Bespoke Brunch Reads + 2018 Annual Outlook Special

Happy Sunday!
Before getting to our favorite articles from the past week, take advantage of our limited time 2018 Annual Outlook special offer.  You’ll get Bespoke Premium for 3 months for the price of 1, and you’ll receive our 2018 Annual Outlook Report when it’s published in December.  The report alone is worth the cost!  CLICK HERE to sign up at our secure checkout page.

Below is our “Bespoke Brunch Reads” linkfest featuring some of our favorite articles from the past week.

Diversity

Ray Dalio Has an Unbelievable Algorithm by Cathy O’Neil (Bloomberg)

Are algos any good if all they do is reflect the biases, fallibility, incomplete information, and general human weakness of their designers? [Link]

Parable of the Polygon by Vi Hart and Nicky Case (NCase)

A simple, intuitive explanation of math showing that small biases against or towards one’s own group or others can create extreme segregation. [Link]

Fraud

The Dead Man Fund by Jack El-Hai (Longreads)

A history of one of the worst investment funds available, and why most of their investors were dead long before the fund was shut down by the SEC. [Link]

Policy

Fed Insiders Seek Radical Policy Review as Powell Era Dawns by Jeanna Smialek and Matthew Boesler (Bloomberg)

As the Federal Reserve’s Board of Governors undergoes a shake-up, other policymakers on the FOMC are advocating a shift in policy goals. [Link; auto-playing video]

AT&T Ready to Probe the White House’s Role in Time Warner Deal by David McLaughlin, Scott Moritz, and Sara Forden (Bloomberg)

Amidst claims that the White House instructed the Justice Department to demand Time Warner sell CNN to clear its proposed merger with AT&T, the bidder isn’t willing to let potential interference slide. [Link; auto-playing video]

A few random thoughts on taxes by Bill McBride (Calculated Risk)

An argument that the current approach to tax cuts and reform is going about a decent idea the wrong way, and possibly at the wrong time. [Link]

Great Things In Unexpected Places

Why classical purists should start taking video game music seriously by Caroline Crampton (New Statesman)

Did you know Hans Zimmer (writer of the epic soundtrack in Gladiator) is the composer for Modern Warfare? Long a hotbed of audio-visual innovation (Gregorian chants of Halo, anyone?), video games are providing a market for modern classical that hasn’t found footing elsewhere. [Link]

Harvard university debate team loses to New York prison inmate by Barney Henderson (The Telegraph)

In a remarkable upset (based on preconceptions alone, of course) three inmates from maximum security Eastern New York Correctional Facility beat three Harvard undergrads in a competitive debate. [Link]

Dystopia

How Facebook Figures Out Everyone You’ve Ever Met by Kashmir Hill (Gizmodo)

People You May Know (PYMK) is an algorithm Facebook deploys to draw data from sources outside the social network itself in order to drive engagement. It also creates massive privacy concerns. [Link]

Crypto

Meet ‘Bitcoin Clashic,’ a Weird and Totally Unexpected Cryptocurrency Rebellion by Jordan Pearson (Vice)

Obscure to be sure but a fascinating look at how unstable and generally head-scratching the world of cryptocurrencies can be. [Link]

The Rich

Look Inside the DeVos Family Office by Anupreeta Das and Jean Eaglesham (WSJ)

A deep dive into the structure and activities of the family office which manages the fortune of Secretary of Education Betsy DeVos and her husband. [Link; paywall]

According to one estimate, wealthy couples in NYC need $190 million to keep their heads above water by Tanza Loudenback (Business Insider)

It turns out living parkside on Fifth, spending lots on art and private jets, having an active philanthropy life, and paying a live-in staff gets expensive…who would have imagined? [Link]

Social Media

The 100 Best Finance Twitter Accounts You Should Be Following by Alap Shah (Forbes)

A Sentieo algorithm has determined the top 100 finance accounts on Twitter. [Link]

Football

The Science of the Post: Going Deep with “Mills” by Chris Brown (Smart Football)

A combination oral history and deep dive into the strategy of post routes, and specifically post routes with an underneath dig route, one of the most-used schemes in modern offensive playcalling. [Link]

Musk

Elon Musk: The Architect of Tomorrow by Neil Strauss (Rolling Stone)

A glowing laundry list of projects and ambitions including cars, mass transportation, and space.  This one is worth the read. [Link]

Aerospace

Airbus clinches $49.5bn single aisle aircraft deal by Peggy Hollinger (FT)

The biggest deal in the history of the European plane manufacturer was signed this week in Dubai, with 430 single aisle aircraft set to be sold to 4 global budget airlines. [Link; paywall]

Branding

Can You Draw the Starbucks Logo Without Cheating? Probably Not. by Zach Schonbrun (NYT)

Being able to reproduce iconic logos is a lot less important than recognizing them. [Link; soft paywall]

Have a great Sunday!

Annunci

CWS Market Review – November 17, 2017

CWS Market Review

November 17, 2017

“I’m always fully invested. It’s a great feeling to be caught with your pants up.”
– Peter Lynch

Wall Street has been in a slightly sour mood lately. Of course, I mean this in a relative sense. Volatility is still low—very low, in fact.

Until last week, the S&P 500 had climbed for eight weeks in a row. So within that context, four daily drops in five days does seem to stand out. The damage was a little over 1%. Again, that’s barely a speck, but it seems like more when compared to serene market we’ve had since late August. This week, the S&P 500 snaps a streak of 54 days in a row of closing within 1% of its all-time high. That was the longest such streak in half a century. That’s what investing is like in 2017.

More good news for our Buy List this week. We had a very good earnings report from Smucker. The jelly stock jumped nearly 10% on Thursday. We also had a very good earnings beat from Ross Stores. I don’t know yet how the shares opened on Friday, but ROST was up more than 7% in Thursday’s after-hours market.

I’ll run through both reports in just a bit, plus I’ll preview next week’s earnings report from Hormel Foods. The Spam stock has been hot lately (up 9.2% since October 30). I’ll also have some updates on our Buy List. But first, let’s look at some recent news on the economy.

Wall Street Wraps up Another Good Earnings Season

Overall, the third-quarter earnings season was a good one for Wall Street. This was the 23rd consecutive quarter that exceeded expectations. This earnings season was especially good for the tech sector. The Financial Times noted that four mega-cap tech stocks were responsible for half of the earnings beat for Q3. The big four are Apple, Alphabet, Facebook and our very own Microsoft. The tech sector has been such a big winner (+37% YTD) that it’s more than doubled the second-place sector (healthcare +18%).

The Federal Reserve will almost certainly raise interest rates next month, but what about after that? As I’ve said before, I’m not terribly worried about the first few rate increases, but I do think the Fed has less room to work with than they may realize. The futures market currently thinks another hike will happen by June (and possibly by March).

There continues to be little to worry about on the inflation front. This week, we learned that inflation was calm last month. The CPI rose by just 0.1%, and the “core rate,” which excludes food and energy prices, also rose by 0.1%. In the last year, core inflation is running at 1.8%. That’s still below the Fed’s target of 2%. Bottom line: I just don’t see what the Fed is so worried about. The jobs market is humming and prices are steady.

But here’s what worries me. The spread between the two- and 10-year Treasuries narrowed to just 65 basis points this week. The spread hasn’t been that narrow in ten years. I would expect to see the spread tighten after the rate increases. Historically, when the 2/10 spread gets to 0%, economic weakness isn’t far behind.

So any trouble is off in the distance, but it’s there. The overall market and economy are doing fairly well. For example, this week we learned that retail sales rose 0.2% in October. In the last year, they’re up 4.6%. Taking out gasoline, retail sales rose by 0.4% in last month. The industrial production report showed an increase of 0.9% for October. Economists had been expecting a rise of 0.5%.

I expect a calm market for the rest of the year. This is a good time for investors to make sure they’re well-diversified, and that they hold high-quality stocks. As always, our Buy List is a great place to start. As a whole, our Buy List has been leading the market since late summer (we lagged during Q2 earnings season). Now let’s turn to this week’s strong earnings reports from our Buy List.

Smucker Soars 10% on Strong Earnings

On Thursday morning, JM Smucker (SJM) released a very positive earnings report. The jelly folks beat Wall Street’s consensus thanks to higher prices for several of their product lines. For their fiscal Q2, the company earned $2.02 per share last quarter, beating estimates by 12 cents per share.

“We are pleased with our second-quarter results, primarily driven by our pet-food business and the strong performance of a number of key brands across all our businesses,” said Mark Smucker, Chief Executive Officer. “This included double-digit sales increases for Nature’s Recipe® dog food, Dunkin’ Donuts® coffee, and Jif®peanut butter. We also experienced continued strong growth of our brands in e-commerce, as sales in this channel doubled in the quarter for our U.S. retail segments. We are confident in the ability of our brands to win in the rapidly changing retail environment. In addition, we remain focused on achieving sustainable cost reductions that both support the bottom line and fuel investments in future growth.”

SJM’s coffee business is still struggling, but that’s not news. They raised coffee prices earlier this year, and that blew up in their face. What is new is the way the other divisions have picked up the slack. Smucker’s net income rose 10% to $194.6 million. I was pleased to see operating margins come in at 17.2%, compared with 15.8% last year.

This is a welcome earnings report because Smucker had been in a jam (Heh). They bombed their last earnings report, missing consensus by ten cents per share. This time, Smucker lowered the upper end of their full-year guidance by five cents per share. The company now expects full-year earnings of $7.75 to $7.90 per share. Smucker said that reflects higher anticipated freight cost for the rest of the fiscal year.

In Thursday trading, shares of SJM jumped 9.5% to close at $116.65 per share. The stock is still trying to make up for a lot of lost ground. Going on a simple valuation basis, the stock is trading for about 15 times earnings. JM Smucker remains a buy up to $118 per share.

Ross Stores Earns 72 Cents per Share

After the close on Thursday, Ross Stores (ROST) reported Q3 earnings of 72 cents per share. Previously, they gave us a range of 64 to 67 cents per share. Ross made 62 cents per share for Q3 last year.

Looking at the numbers, this was a solid quarter for Ross. Net sales rose 8% to $3.3 billion. Comparable-store sales rose 4%. That’s a key metric for retailers. Operating margins were 13.3%. That’s good for a retailer, especially for a deep discounter.

Barbara Rentler, Chief Executive Officer, commented, “Our third-quarter sales and earnings outperformed our expectations despite being up against our toughest prior-year comparisons and two major hurricanes during the quarter. We are pleased with these strong results, which reflect our continued market-share gains in a challenging retail environment. Operating margin of 13.3% was better than expected, mainly due to a combination of higher merchandise margin and leverage on above-plan sales.”

Now for guidance. A small note. Like other retailers, Ross uses 13-week quarters. That means, every so often, they’ll have a 14-week quarter, and a 53-week fiscal year. Q4 happens to be a 14-weeker. For fiscal Q4, which ends on February 3, Ross expects earnings of 88 to 92 cents per share. That’s up from 77 cents for last year’s Q4, which was a 13-weeker. Ross estimates that the extra week for this quarter adds about eight cents per share. So even adjusting for that, Ross is growing nicely. Adding it all up, Ross expects to make between $3.24 and $3.28 per share for this fiscal year.

This was an excellent quarter for Ross. These numbers are especially good to see because ROST has had a tough time this year. From its December 2016 peak to its July 2017 trough, shares of ROST lost 24%, even though nothing about the business changed. Folks are just scared of anything in retail not named Amazon. This week, I’m raising my Buy Below on Ross Stores to $73 per share.

Earnings Preview from Hormel Foods

Hormel Foods (HRL) is another stock that hasn’t joined in on the fun this year. In fact, though it’s been up lately, HRL is still down 5.4% this year. Consumer-staple stocks have been lagging the market badly since February 2016. These are classic defensive stocks, which means they do well when things aren’t going well. The downside is that they lag when things are going well, like now.

It’s best to avoid trying to guess when these cycles change. Instead, investors should understand that every so often, good stocks fall out of style. The crowd always loves to follow the next big thing. Sometimes you’re surprised to find out that you already own it!

Hormel will report their fiscal Q4 earnings on Tuesday, November 21. Like Smucker, Hormel’s last earnings report wasn’t a great one. They made 34 cents per share, which missed by three cents. So what caused the miss? The problem is that there’s been a surge in demand for bacon. Normally, that’s a good thing, but Hormel hasn’t been able to catch up with the cost change. Their CEO said that since April, pork-belly prices have doubled. Hormel said they probably will not be able to raise prices until October. As a result, the company’s profit margins got squeezed hard.

That’s not all. Hormel also had a poor quarter from their Muscle Milk unit, which they’ve spent heavily on. Plus, their turkey unit continues to see poor sales. The silver lining is that Hormel’s grocery-store biz, with brands like Skippy Peanut Butter, is doing well. (By the way, Smucker owns Jif, so we have maximum peanut-butter exposure in our Buy List.)

In August, Hormel lowered its full-year guidance range to $1.54 to $1.58 per share from the previous range of $1.65 to $1.71 per share. For the first three quarters, Hormel made $1.17 per share, so their guidance means a Q4 range of 37 to 41 cents per share. Wall Street expects 40 cents per share.

Buy List Updates

In last week’s issue, I mentioned the good earnings report from Continental Building Products (CBPX). The stock reacted well to the earnings news (as we know, that doesn’t always happen). I’m lifting our Buy Below on CBPX to $29 per share.

Shares of Ingredion (INGR) got a big lift on Wednesday. The shares touched a new high of $134.03 after the stock was upgraded by some Wall Street firms. The company also gave a business overview. Ingredion got clobbered earlier this year, but it’s gradually fought its way back and is now a 6.4% gainer for us YTD.

That’s all for now. There will be no newsletter next week. I’m taking my traditional Thanksgiving break. The U.S. stock market will be closed on Thursday for Thanksgiving, and it will close at 1 pm on Friday, November 24. There’s not much in the way of economic news next week. We’ll get the existing-home sales report on Tuesday, and durable goods on Wednesday. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Image
Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 eight times in the last ten years. This email was sent by Eddy Elfenbein through Crossing Wall Street.

Bespoke Brunch Reads: 11/12/17

Good Morning!
Below is our “Bespoke Brunch Reads” linkfest featuring some of our favorite articles from the past week.

Wages

Why Is U.S. Wage Growth So Low? It’s All About the Top 80% by Matt Boesler (Bloomberg)

The low end of the wage pile (occupations with average hourly earnings in the bottom quintile of the distribution) have seen drastically higher wage growth recently. [Link; auto-playing video]

Bubbles

In 2017, Investors Can Either Buy Bubbles or Be Left Far Behind by Luke Kawa (Bloomberg)

An index of trades pundits have broadly agreed are unsustainable “bubbles” has drastically outperformed of late. [Link; auto-playing video]

Europe

European leaders seem determined to remake the “global savings glut” on a massive scale by Matthew C. Klein (FTAV)

Running persistent current account surpluses may reduce exposure to external shocks, but it creates problems elsewhere by forcing borrowing into economies that may not be able to use it productively. [Link; registration required]

On collateral: implications for financial stability and monetary policy by Stefano Corradin, Florian Heider, Marie Hoerova (ECB Working Papers)

This new discussion paper makes the argument that collateralizing lending is not sufficient to maintain financial stability; this is an intuitive result for anyone that’s spent time reading about previous financial crises. [Link; 51 page PDF]

The Hanseatic League 2.0 by Jim Brundsen and Michael Acton (FT)

The 13th century federation of trading nations in northern Europe is getting something of a revamp as a similar geographic lineup seeks to navigate Brexit and the future of the EU. [Link; paywall]

Blowups

America’s ‘Retail Apocalypse’ Is Really Just Beginning by Matt Townsend, Jenny Surane, Emma Orr and Christopher Cannon (Bloomberg)

This mix of text and graphics does a good job showing the scale of America’s dependence on retail; if the worst possible outcomes play out for the industry, it’s going to have a big impact. [Link]

Venezuelan debt: ‘Qué Pasa?’ by LeeC. Buchheit and Mitu Gulati (FT)

The dons of the sovereign restructuring world outline a strange set of developments in the Venezuelan bond market, which could point to a possible out for the country in its restructuring. [Link; paywall]

Crypto

Cryptocurrency Mania Fuels Hype And Fear At Venture Firms by Erin Griffith (Wired)

A review of how venture capital firms – the traditional gatekeepers of early stage tech funding – are reacting to the world of cryptocurrencies, blockchains, and ICOs. [Link]

Security Alert (Parity Technologies)

A cryptocurrency wallet provider was struck by a major vulnerability discovery this week, which put users’ portfolios at risk of theft. [Link]

Regulators begin to tackle the craze for initial coin offerings (The Economist)

A review of the current intersection between regulation, speculation, and abuse in the cryptocurrency space, especially ICOs. [Link; soft paywall]

Conspiracy

‘Fat Leonard’ probe expands to ensnare more than 60 admirals by Craig Whitlock (WaPo)

Have you heard about the massive corruption across the highest ranks of the Navy that’s currently being rooted out? We hadn’t either. A remarkable review of the effort to reign in the admirals. [Link; soft paywall]

Something is wrong on the internet by James Bridle (Medium)

A disturbing review of the darker side to kids’ favorite videos on YouTube, and in a more sinister sense, how and why those videos become popular. [Link]

Leaked Documents Expose Stunning Plan To Wage Financial War On Qatar – And Steal The World Cup by Ryan Grim and Ben Walsh (The Intercept)

A leaked presentation proposed to the UAE that FX trades, CDS positions, and a cornered bond market be used to disrupt Qatar. If this sounds like an absolutely ridiculous plan that could never work, you’re barking up the right tree, but the details are still highly entertaining. [Link]

Harvey Weinstein’s Army of Spies by Ronan Farrow (The New Yorker)

Potential accusers of Harvey Weinstein and the journalists working with them faced a sophisticated counterintelligence operation which included former Israeli spies and gross misconduct from lawyers. [Link]

Baseball Fakes

Teen Girl Posed For 8 Years As Married Man To Write About Baseball And Harass Women by Lindsey Adler (Deadspin)

In what may be the strangest story of the week, Adler reveals the details of a young woman who pretended to be a man on the internet so she could write about baseball…with very dark results. [Link]

Operation Stolen Base by Luke Winn (SI)

The story of a minor league washout’s road from behind home plate to behind bars, all part of the largest sports memorabilia fraud in history. [Link]

Anthropology

Most scientists now reject the idea that the first Americans came by land by Annalee Newitz (Ars Technica)

While there’s no dispute that the Clovis people of ~13,500 years ago crossed from Siberia to North America by a land bridge, it’s almost certain they were proceeded by island-hopping peoples of the Pacific. [Link]

Have a great Sunday!

Weekend edition—Russian propaganda, Chinese Confucius centers, deadly American air

Good morning, Quartz readers!

Want to make what you’re reading better in just three minutes?Take our survey. Each of Quartz’s products is designed to improve your life in a different way, and we’d love to know how you think we’re measuring up against that goal.

In a diary discovered after the fall of Berlin, Nazi propaganda chief Joseph Goebbels outlined his principles (pdf) for effective propaganda. The second of these states that it “must be planned and executed by only one authority.”

What would Goebbels have made of Facebook? Where the 20th century was macro, the 21st is micro. Just as the clash of massive armies has given way to guerrilla war and terrorism, information—and disinformation—now flows not from a single entity but from thousands or millions. And with the micro-targeting power of social networks like Facebook, propaganda is no longer one message: It can be any number of them, tailored to any number of audiences.

Russia understands both these differences. The ads it spread on Facebook during last year’s US election—some of which Congressmade public this week—were not a single pro-Trump message; indeed, many supported left-leaning causes like anti-Trump rallies and LGBT rights. Where Goebbels aimed to sow confusion and fear, Russia’s goal was simply to deepen the American public’s existing divisions. And unlike Goebbels, Russia is fine with not having the monopoly on propaganda. If a bevy of Macedonian teenagers are helping, so much the better.

The key lesson of the scandal is not that Russia is dangerous to US democracy, but that social media makes all democracies vulnerable to anyone with a political agenda, a bit of money, and a reasonable quantity of data. It would be a trivial matter to target Facebook ads at just the undecided voters in the US’s small number of competitive districts at the next election, for instance, and very hard to catch the culprit.

Guerrilla war cannot be won by a conventional army; it requires a solution to the war’s underlying causes. Similarly, 21st century propaganda cannot be dealt with by trying to eliminate its sources. How platforms like Facebook enable it is also part of the problem, and they need to take part in the solution as well.—Nikhil Sonnad

SIX THINGS ON QUARTZ WE ESPECIALLY LIKED

Why pregnant women die in America. With an estimated 26.4 deaths for every 100,000 live births in 2015, the US has the highest maternal mortality rate of all industrialized countries—by several times over. And the trend is worsening. Annalisa Merelli unpacks how sexism, racism, inequality, and a fragmented, for-profit health system all combine to form a country that cares too little about its new mothers.

Deadly air. More than two dozen people suffocated in a small Pennsylvania town on Halloween weekend in 1948. The disaster happened two decades before the passage of America’s first clean air laws. Zoe Schlanger reports that when a weather phenomena began trapping gases in the town’s valley, the regular morning haze came and never left. First plants died, then pets. By the weekend it was people. Donora, Pennsylvania knows what life was like before clean air laws, and it wasn’t pretty.

Are you on clock time or event time? There are two main ways to approach time, and they’re frequently in conflict with one another—at work, in families, and in societies moving from one system to the other. Lila MacLellan, writing in Quartz At Work, investigates the psychology and the business history dictating our relationships with our schedules, and offers new insight into the universal quest for time management.

Will McKinsey walk the talk? One of the world’s top consulting firms is preparing to select a new leader next year, and the list of potential candidates is already taking shape. The selection process is reportedly a grueling one (paywall), but Lila MacLellan argues the choice for McKinsey is simple—that is, if you accept the findings of the firm’s own comprehensive research on diversity and gender equality.

Confucius centers across Africa are teaching Mandarin and a pro-China outlook. China is driving the largest language and culture-promoting initiative the world has ever seen. But, as Claire van den Heever finds traveling through Lusaka, Dar es Salaam and Harare, Confucius centers are more than just language schools in Africa. China hopes the centers will help shape its public image for the long term on a continent with so many young people.

Yolie Cintron was going to commit suicide—and then she found zumba. Cintron is just one of thousands of people who swear by the dance-fitness craze. Amy X. Wang travels to Orlando, Florida for the 10th annual ZINCON, a convention of 8,000 zumba instructors, to investigate the origins and appeal of the mysterious multi-million dollar empire, led by—magically enough—three men all named Alberto.

FOUR THINGS ELSEWHERE THAT MADE US SMARTER

Cooking for survival. Coverage of refugees and displaced people often feature the predictable images of large sacks of anonymous food distributed to the hungry masses. But what do people actually make for themselves and their families in these trying circumstances? Andrew Esiebo, reporting for Buzzfeed in Niger, visited a camp for internally displaced people, many fleeing Boko Haram, and came back with a humanizing photo essay on the simple meals that sustain families.

(First) class concerns. Dwight Garner, book critic for the New York Times, was once so terrified of flying he would get to the airport and promptly turn around. In a funny essay for Esquire about his only time in first-class, he remembers a course he took for paranoid travelers, in which he learned which clothes are most likely to catch fire in a flight emergency.

Portugal’s road to decriminalization. In the 1980s, before the opioid crisis gripped the US, one in ten Portuguese citizens were heroin addicts—until 2001, when the country became the first nation to decriminalize the consumption of all illicit substances. In a sweeping essay, Susana Ferreira returns to her family’s home and, with the help of a local doctor uncovers how a law change informed an enormous shift in perception, pulling the nation out of the depths of addiction.

I forgot my key to $30,000 of bitcoin. It’s the stuff of nerd-nightmare fuel. In Wired, Mark Frauenfelder traces how his casual purchase of 7.4 bitcoins became, thanks to an innocent mistake, locked in a web of complex systems. He enlisted the services of a hypnotist, his family, Reddit, and finally an overseas hacker, all in a desperate bid to recover the keys to his wallet—and his cash.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, Confucius centers, and bitcoin PINs tohi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone and Android.

#iPhone X launch, @realDonaldTrump silenced, kleptopredation

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

Apple’s iPhone X finally launches. Potential sales in China are stilla big question mark, but lines formed outside stores pretty early inSingapore, Japan, and Australia. Though investors worried that announcing three iPhones at once was a mistake, Apple’s quarterlyearnings were solid, and shares hit a record high.

Berkshire Hathaway reports its quarterly earnings. This year’s extreme weather did a number on Warren Buffet’s collection of insurance groups. Analysts expect major losses, but Berkshire should still turn an operating profit.

Donald Trump visits Hawaii on his way to Japan. Pearl Harbor is the US president’s first stop before touring Asia. Japan is up first, then South Korea, China, Vietnam, and finally, the Philippines. Trump’s not going anywhere near the North Korean border, calling the Demilitarized Zone a “cliche.

The US releases October jobs data. The US economy shed jobs for the first time since September 2010 because of weather disruptions. Economist surveyed forecast 300,000 new jobs(paywall) were added last month.

SPONSOR CONTENT BY EXXONMOBIL

Capturing carbon. Reducing CO 2 emissions. At ExxonMobil, we’re researching new technology for capturing CO 2 from natural gas power plants. Using fuel cells, we could potentially capture up to 90% of a plant’s CO 2 emissions while also generating more power. Learn more at EnergyFactor.comAdvertisement

WHILE YOU WERE SLEEPING

Venezuela announced plans for a debt restructuring. President Nicolas Maduro said the government will transfer funds for a $1.1 billion principal payment on state-owned oil company Petroleos de Venezuela bonds that came due yesterday, and will then renegotiate the terms of its debt with creditors.

Twitter accidentally silenced Donald Trump. The social network said that the president’s Twitter account was shut down for 11 minutes by a departing customer-support employee on the last day of the job.

The US pulled back on fighting corruption in the oil industry.The White House said it would withdraw from the Extractive Industries Transparency Initiative, which requires members to disclose their revenues from energy and mining assets.

A billionaire closed down DNAinfo, Gothamist, and other blogs.Their owner, Joe Ricketts, who founded TD Ameritrade, shuttered the sites after New York-based staff decided to unionize last week. The decision involves blogs based in other cities too, such as Chicagoist, Shanghaiist, and LAist.

QUARTZ OBSESSION INTERLUDE

Michael J. Coren on how Amazon competing with so many companies may not end well. “But Amazon’s unprecedented logistics and delivery infrastructure, paired with access to personal data about Americans’ purchasing habits, means it is unique in the history of global commerce. No company has ever wielded this combination of consumer insight and infrastructure, say historians and legal analysts, which means the company grows stronger and less assailable with every purchase.” Read more here.

MATTERS OF DEBATE

The economic disparity in innovative cities is no coincidence.An analysis of US cities shows that growth in high-tech innovationcauses a widening gap between the rich and the poor.

The new Fed chair isn’t an economist, and that’s fine. A chair with more political savvy than a lifelong academic may be what’s necessary to maintain the Fed’s independence.

Xi Jinping is not the “president” of China. His official title is actually “state chairman,” reflecting the emphasis not on republican representation, but authority.

We shouldn’t separate work from life. Instead, we should seekwork-life integration by incorporating our personal and business interests into our daily routines.

SURPRISING DISCOVERIES

Finnair is weighing passengers at Helsinki airport. The airline is checking that the estimates it uses to calculate total weight, fuel, and safety are accurate.

Scientists discovered a void inside the Great Pyramid of Giza.The mysterious 30-meter-long space may have been a burial chamber, a gallery, or just a sealed-off construction passage.

NASA found another 20 promising planets for human colonization. If confirmed, this would increase the number of known, habitable near-Earth-sized exoplanets to around 50.

Kleptopredation is a new scientific term for super-sizing a meal at sea. It refers to a previously unknown behavior: a predator eating prey that itself just filled up on prey.

The world’s most expensive whisky is actually fake. Laboratory tests found that a £7,600 ($9,928) dram of 1878 Scotch, bought by a Chinese millionaire, was likely distilled sometime after 1970.

Our best wishes for a productive day. Please send any news, comments, habitable exoplanets, and real whisky to hi@qz.com. You can follow us on Twitter for updates throughout the day or downloadour apps for iPhone and Android.

Euro-zone GDP, #Samsung soars, #AI horror stories

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

The EU publishes an initial estimate of GDP growth. Analysts expect the euro-zone economy expanded 0.5% in the third quarterfrom the second. With economic sentiment high after a decade of malaise, the European Central Bank last week announced it will begin to gently dismantle the emergency stimulus it’s been providing.

Australia shuts down a refugee detention center. Fearing for their safety outside, hundreds of asylum seekers are refusing to leave the country’s controversial Manus Island facility in Papua New Guinea, even as authorities plan to cut off water, food, and power supplies. Refugees report being assaulted by local residents.

A flurry of earnings reports. Among the companies sharing their numbers today (pdf) are MasterCard, Aetna, Mosaic, Electronic Arts, Devon Energy, Archer Daniels Midland, and Under Armour. The last is expected to report slower sales growth as it loses ground to German rival Adidas.

WHILE YOU WERE SLEEPING

China and South Korea agreed to shelve the dispute over THAAD. The two countries, each set to host Trump early next month,will restore a relationship that was strained by South Korea allowing the deployment of the US missile shield on its soil. Beijing said it still had concerns about the system but didn’t see South Korea as a strategic threat.

New Zealand said it will ban foreigners from buying existing homes. Making good on one of her campaign pledges, new prime minister Jacinda Ardern said, “We are determined to make it easier for Kiwis to buy their first home, so we are stopping foreign speculators buying houses and driving up prices.” The new rules, which won’t apply to Australians, will start early next year.

Apple is designing iPhones that would jettison Qualcomm components. The tech giant could make the devices only with modem chips from Intel or possibly MediaTek, reported the Wall Street Journal (paywall). Qualcomm has reportedly withheld testing software following a lawsuit in January, in which Apple said Qualcomm uses its market dominance to block competitors.

Samsung Electronics notched another stellar performance.After hitting record operating profit in the second quarter, the company did even better in the third with $12.9 billion, thanks to soaring memory chip earnings. The strong showing came despite turmoil at the top level of the company.

QUARTZ OBSESSION INTERLUDE

Zheping Huang on China blocking the world’s hottest video game. “[Authorities] compared PlayerUnknown’s Battlegrounds and similar survival games with ancient Rome’s gladiator battles, saying the violently competitive spirit behind them is ‘against our country’s core socialist values and the Chinese nation’s traditional cultural behaviors and moral principles, and bad for teenagers’ physical and mental health.’” Read more here.

MATTERS OF DEBATE

Trump is turning the Fed into a reality show. His selection process disrespects the institution and undercuts his eventual pick—reportedly Fed governor Jerome Powell.

Changing the topic won’t work for sexual harassers. Actor Kevin Spacey’s pivot to discuss his own sexuality is offensive—and it didn’t save House of Cards from cancellation.

Do robots have free speech? The Russian-backed bots that influenced the 2016 election raise a host of questions about who and what qualifies for constitutional protections.

QUARTZ ANNOUNCEMENT

New Orleans is more than parades and parties—it’s home to the fastest-growing tech conference in America. Come to Collision on April 30-May 3, 2018 and meet the biggest founders and investors in tech. Last year’s attendees included leaders at Facebook, WeWork, FanDuel, Intel Capital, Benchmark Capital, Cisco, eBay, Credit Karma, and Mozilla—oh, and Wyclef. Enter herefor the chance to go for free—airfare and hotel included.

SURPRISING DISCOVERIES

The alt-right is creating its own language. Quartz analyzedbillions of comments to define terms like “hypergamy,” “femoids,” and “meeks.”

Google is fixing its inaccurate cheeseburger. CEO Sundar Pichai said the company “will drop everything” to address the Android emoji that stacks the cheese beneath the burger.

There’s a planet where it snows sunscreen. Titanium dioxide, the active ingredient in sunblock, falls from the sky on Kepler-13Ab, a scorching-hot planet six times the size of Jupiter.

Japan’s Halloween is a celebration of cuteness and grossness. From pumpkin decorations to faux-moldy hamburgers, the holiday is now bigger than Valentine’s Day and second only to Christmas.

An AI learned to write horror stories. “Shelley” generates spooky, off-putting plots after studying 140,000 original horror posts from Reddit.

Our best wishes for a productive day. Please send any news, comments, flawed emoji, and sunscreen snow to hi@qz.com. You can follow us on Twitter for updates throughout the day or downloadour apps for iPhone and Android.

Bespoke Brunch Reads: 10/28/17

Good Morning!
Below is our “Bespoke Brunch Reads” linkfest featuring some of our favorite articles from the past week.

Rethinkings

Public Policy After Utopia by Will Wilkinson (Niskanen Center)

A case for evidenced-based policy making and an eschewing of “the perfect world” that radicals of all kinds think they can achieve, but are often unable to show would actually move forward their goals. [Link]

A Peek at Future Jobs Shows Growing Economic Divides by Ben Casselman (NYT)

Huge swathes of the country have employment landscapes dominated by jobs that are estimated to shrink by 2026 per new BLS data. [Link; soft paywall]

Investing

The Morningstar Mirage by Kirsten Grind, Tom McGinty and Sarah Krouse (WSJ)

Investors flock to funds that receive a coveted five star rating from Morningstar, but returns don’t tend to be much higher for funds with more stars. [Link; paywall]

Inflation

How I Accidentally Stiffed My Poor Venezuelan Waiter by Stephen Merelman (Bloomberg)

When the amount of cash you need to accomplish daily tasks rises into the “grocery bags” denomination, even tipping becomes a major challenge. [Link]

The Lighter Side

So This Happened in Our Comments Section Today by Nancy Wartik (NYT)

Never read the comments, except for this one. [Link; soft paywall]

Blockchain

This Company Added the Word ‘Blockchain’ to Its Name and Saw Its Shares Surge 394% by Lisa Pham (Bloomberg)

A company with little to offer got investors to bid up its shares by almost 4x on a simply name change, in case you’re wondering what sentiment around cryptocurrencies looks like. [Link]

Backed by Dollar Scarcity, Price of Bitcoin Caps $10,000 in Zimbabwe by William P (Crypto Analyst)

The exchange which services Zimbabwe has seen an explosion in local prices for bitcoin, driven by huge domestic demand and a lack of arbitrage. [Link]

Tech Dystopia

The 12 Most Desperate Stunts Cities Have Pulled To Woo Amazon’s New H.Q. by Maya Kosoff (Vanity Fair)

Buying (and reviewing!) 1000 separate items, Spotify playlists, noisemeters at hockey games, a 21 foot cactus, free sandwiches, and more. [Link]

Elon Musk Was Wrong About Self-Driving Teslas by Tom Randall (Bloomberg)

Tesla owners are suing over a feature that hasn’t lived up to its much-hyped debut buzz last year, and doesn’t show any sign of being ready soon. [Link]

New Chatbots Will Help People Accept Death by Jordan Pearson (Vice)

While chatbots are proving helpful for people unaware of basic legal and medical planning for the end of their lives, they’re not going to be providing much in terms of spiritual guidance any time soon. [Link]

Food & Drink

‘Fish Fraud’ Is Rampant. Here’s How to Fix It by Elizabeth Dunn (WSJ)

As much as one third of US seafood is mislabeled, and with 90% it imported there’s lots of room for standards in the market to propagate better practices elsewhere around the world. [Link; paywall]

World wine production ‘to hit 50-year low’ (BBC)

+15% declines in Italy, Spain, and France brought about by weather mean global grape growth has slowed dramatically. Australia and Argentina will be up while the US crop should be little changed (forest fires in California came after most of the harvest). [Link]

The Thing About Bisquick by Alia Akkam (Taste Cooking)

For our two cents, biscuits don’t need anything more than flour, milk, butter, baking powder, and a bit of honey. But Bisquick is defensible if only for its time saving properties. [Link]

Long Reads

Under The Darkest Sky by Jasmina Keleman (Roads And Kingdoms)

In wide open Texas, the limitless night skies are in need of conservation; not against traditional threats to visibility, but from the even more pernicious footprint of human civilization, light. [Link]

How Martin Luther Changed The World by Joan Acocella (The New Yorker)

While the man who launched the Reformation probably never nailed his 95 Theses to a church door, he was still a fascinating and truly revolutionary character who has deeply shaped our modern world. [Link]

Have a great Sunday!