#EU-#Turkey talks, #Kushner’s #Russia-collusion denial, urinal-free aircraft carrier

Good morning, Quartz readers!


Turkey and the EU try to reset relations. Meeting in Brussels, top officials from both sides will discuss counterterrorism cooperation, the migration crisis, and visa-free travel for Turkish nationals. But the get-together comes amid acrimony over the detention of human rights activists in Turkey, among them a German.

Donald Trump hosts Lebanon’s prime minister as Mideast tensions rise. Saad Hariri will visit the White House to discuss terrorism, the economy, and refugees, but the talk may also cover clashes over heightened Israeli security measures at the al-Aqsa mosque in Jerusalem.

GM reports quarterly results. Analysts expect General Motors to report a downturn in profit and revenue as it kicks off auto earnings. The carmaker is struggling with a US slowdown while it pivots from Europe to Asia. One bright spot investors will want an update on:booming Cadillac sales in China.

Lawmakers extend their grilling of Shinzo Abe. Japan’s upper house of parliament gets its turn to question the prime minister about allegations that he used his political power to help a friend get into veterinary school.


Look to the UK for a wave of breakthroughs in technology. From 3D printing to reliable developments in AR, explore four projects setting a new global standard.Advertisement


Even the EU can’t stop Google’s parent company from raking in the cash. Alphabet’s quarterly revenue rose 20% to $26 billion, even as it paid a $2.7 billion fine for antitrust violations. But Wall Street wasn’t impressed, sending shares down 3%.

Jared Kushner denied colluding with Russia. The US president’s son-in-law and senior advisor told investigators from the Senate Intelligence Committee that he met with Russian officials four times last year but had “no improper contacts” with the Kremlin. But his answers included some puzzling omissions.

Tanzania hit a mining company with an astronomical tax bill.London-based Acacia Mining’s stock slumped on the news that it owes $40 billion in taxes plus another $150 billion in interest and penalties for failing to fully disclose export revenues. That’s equivalent to nearly two centuries of Acacia’s annual revenue.

Toyota plans to launch a fast-charging, long-range electric car as early as 2022. That’s according to the Chunichi Shimbun, a Japanese newspaper. It reported the vehicle will be built on an all-new platform and will be able to recharge in a few minutes, thanks to a new kind of all-solid-state battery to be used in place of the lithium-ion variety.

South Korea raised its growth outlook. The finance ministry projected economic expansion of 3% for the year, up from an earlier estimate of 2.6%. That would be the fastest growth since the 3.3% seen in 2014. Exports have been in positive territory for eight straight months, and are expected to surge 10.2% for the year.


Anne Quito on the black market for fake designer chairs. “Last year, US customs officers seized over $4 million worth of fake chairs. It was the first year that the agency had ever seized containers-full of such unauthorized reproductions, thanks in part to a novel new training that’s turning port inspectors into design connoisseurs… The global counterfeit furniture industry thrives to the tune of $1.7 trillion.”Read more here.


Summer is for kids / But this summer is lame for / Hasbro and Mattel


Productivity is becoming irrelevant. As difficult-to-automate service industries grow alongside automated labor, GDP and human welfare will become entirely divorced.

Push notifications are ruining your life. They let brands grab your attention whenever they want—and rob you of your inner peace.

It’s time to auction off airwaves to wireless networks. It’s thebest way to re-allocate a scarce resource that traditional broadcasters need less and mobile operators need more.


Meet the man living with the world’s first mind-controlled robotic arm. Johnny Matheny’s prosthetic arm isn’t just a medical breakthrough; it opens up the possibility that we “as human beings [can] go where our minds can take us, but maybe our bodies can’t.” Explore our story on the “half man, half machine.”


Rocker Alice Cooper found a forgotten Andy Warhol masterpiece. His mother remembered that Little Electric Chair wasstashed in a storage locker.

The US Navy’s newest aircraft carrier has no urinals. The $12.9 billion USS Gerald R. Ford reflects an increased need for gender-neutral spaces.

There were eight tropical cyclones in the north Pacific Ocean at once on Saturday. That hasn’t happened since 1974.

Microsoft is killing Paint (and fond childhood memories).Launched in 1985, the ultra-basic graphics editing program isofficially kaput in Windows 10.

It pays to be ugly. A study found that the ugliest 3% of the population outearn the 50% who are sort of ugly or just average-looking.

Our best wishes for a productive day. Please send any news, comments, forgotten Warhols, and Microsoft Paint creations tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Bespoke Brunch Reads: 7/23/17

New Ideas

Introducing The Reformed Broker All Access by Josh Brown (The Reformed Broker)

Ritholtz Wealth Management CEO and noted market commentator Josh Brown announces his plans for @AllAccessTRB, part of Premo, a new premium content marketplace for social media platforms. [Link]


Brokers’ Call on Wall Street: Bye by Michael Wursthorn (WSJ)

A review of the move from wirehouse offices where brokers charge commissions for trades to the independent registered investment advisor model. [Link; paywall]

Wall Street Profits by Putting Investors in the Slow Lane by Jonathan Macey and David Swensen (NYT)

Fractions of a cent per trade incentivized by rebates to brokers can add up to billions in costs at scale. More importantly, the practice isn’t transparent, limiting the steps customers can take to prevent or avoid it. [Link; soft paywall]

Goldman Partners Mark End of Era as Stock Holding Drops Below 5% by Dakin Cambell (Bloomberg)

When Goldman IPO’d in May of 1999, more than 60% of the firm’s value was held by partners. As of the third of July, that number is down to less than 5%, its lowest ever. [Link; auto-playing video]

Business Models

The Business of Artificial Intelligence by Erik Brynjolfsson and Andrew McAfee (HBR)

A fantastic and comprehensive overview of the current AI space and what the outlook looks like, struck in easy to understand and realistic terms. [Link]

The Crazy Math Behind Drug Prices by Paul Barrett and Robert Langreth (Bloomberg)

In the complex US healthcare system, pharmacy benefit managers stand between drug companies and the entities that pay for drugs, like insurance companies, are the subject of new lawsuits alleging harm to consumers by uncompetitive behavior. [Link]

International Affairs

EU threatens to escalate Article 7 action against Poland by Arthur Beesley (FT)

With Poland’s Law & Justice Party attacking the independence of the country’s supreme court, the EU is considering steps to limit the attack on an independent judiciary. [Link; paywall]

An Early Sign India’s Huge Tax Revamp Is Working: Happy Truck Drivers by Corinne Abrams, Debiprasad Nayak, and Anant Vijay Kala (WSJ)

Reform to India’s tax system has removed regional taxes and replaced it with a national GDP, improving efficiency of movement for goods around the massive country. [Link; paywall]

Can the Fed and ECB Work Together To Reduce Imbalances? by Brad W. Setser (Council on Foreign Relations)

An argument that the ECB should focus on raising interest rates rather than reducing its balance sheet, having an optimal impact on the country’s currency and the imbalances in global current accounts. [Link]

Economic Dynamism

Older and Slower: The Startup Deficit’s Lasting Effects on Aggregate Productivity Growth by Titan Alon, David Berger, and Robert Dent (NBER Working Papers)

A unique paper design that shows productivity declines are likely driven in large part by falling turnover of US firms, also called the “startup deficit”. [Link; 37 page PDF]

Low-Income Earners See Weekly Pay Gain Faster Than Other Groups by Eric Morath (WSJ)

Wages for the lowest paid workers (those in the bottom decile of usual weekly earnings) are growing at the fastest pace in almost a decade, and faster than both median and top decile workers. [Link; paywall]

Crime and Punishment

Forget Silk Road, Cops Just Scored Their Biggest Victory Against The Dark Web Drug Trade by Thomas Fox-Brewster (Forbes)

This week the DoJ announced cooperative actions with international law enforcement agencies which shut down two major clearinghouses for both cryptocurrency and illicit drugs. [Link]


Why Banco Popular’s credit default swaps are getting messy by Robert Smith (FT)

The ECB put a Spanish bank into liquidation last month, but CDS linked to junior debt are now facing uncertain payouts because junior bondholders may have legal claims related to the liquidation. [Link; paywall]

Real Estate

2017 Profile of International Activity in US Residential Real Estate (National Association of REALTORS)

An excellent, chart-heavy review of purchases made by international buyers in the US market. Total dollar volume reached $153.0 billion in the twelve months ended March 2017, close to evenly split between residents and non-residents. [Link; 48 page PDF]


Former $2 billion private equity fund now nearly worthless: WSJ by Dion Rabouin (Reuters)

An oil producer-focused private equity fund raised at the peak of the shale boom has collapsed, with investor holdings now worth nothing. [Link]

Long Reads

A Piece of the Action: Recent Books on the Digital Economy by Ron Hogan (LA Review of Books)

Long, winding words on the imagination of the digital economy that ends with a brilliant metaphor for network effect products using an episode of Start Trek. [Link]

Screaming About Stocks Into A Well: A Text Adventure by Noon Six Capital (Medium)

A play on a recent McSweeney’s piece, Noon Six playfully expresses what so many investors are thinking: futility and frustration in a world that we just don’t always understand. [Link]

On The Lighter Side

Supreme Court’s Junior Justice Has to Run the Cafeteria. Don’t Eat There by Jess Bravin (WSJ)

An endearing review of the cafeteria which serves the Supreme Court and the hazing new members of the court undergo by operating it. [Link; paywall]

The 100 Greatest Props In Movie History, And The Stories Behind Them (Thrillist)

An exhaustive list of the physical tapestry of movies, complete with discussions from members of the production team and stories about how they came into being. [Link]

Bespoke Investment Group, LLC

105 Calvert Street, Suite 100

Harrison, NY 10528



Twitter: @bespokeinvest

#Alphabet earnings, #US-#UK trade talks, breastfeeding as class warfare

Good morning, Quartz readers!


Alphabet reports earnings. Google’s parent will likely take a hitfrom a $2.7 billion fine levied by EU antitrust regulators in June. The company is appealing the fine, but said it would report it in its second-quarter earnings. Alphabet may also break out revenue from YouTube for the first time.

The UK’s trade negotiator visits the US. Liam Fox begins discussions with his American counterparts amid warnings from British businesses that the government’s enthusiasm to produce an agreement may give American companies the upper hand.

Rodrigo Duterte delivers his State of the Nation address. Thetheme of the Philippine president’s speech in the second year of his presidency is “A Comfortable Life for All.” It comes just two days after Congress voted to extend martial law in the troubled southern province of Mindanao until the end of the year.

Ryanair announces first-quarter results. The Irish budget carrier may also provide updates on how Brexit is affecting its business. It warned earlier that it could reduce flights between the UK and the EU if aviation arrangements are not finalized by the end of the year.


The positive impact of ESG on bond performance. ESG investing encompasses everything from energy conservation to corporate management. Until recently, however, it was unclear if it had a positive impact on bond returns. A recent study by Barclays uncovers a positive link. Advertisement


Donald Trump may agree to a new round of sanctions on Russia. The president is open to signing legislation that would enforce tougher sanctions on Russia, a White House official said, after congressional Democrats and Republicans agreed on a bill targeting Russia, Iran, and North Korea. However, Anthony Scaramucci, Trump’s new communications director, said the president has not yet made a decision.

A robot may have found Fukushima’s nuclear debris for the first time. An underwater robot captured what could be the first images of melted nuclear-fuel deposits at the nuclear plant since the 2011 earthquake and tsunami in Japan, according to operator Tepco. The find could help the clean-up process and the eventual decommissioning of the plant, which could take decades.

Israel will keep metal detectors at the al-Aqsa mosque…Tensions are still running high between Israelis and Palestinians at the holy Jerusalem site, where two Israeli police officers were shot on July 14, leading to violent clashes. Some Israeli security officials have warned that the installation of devices like detectors and security cameras could cause violence to further spiral.

… And two died at a shooting at Israel’s embassy in Jordan.The shooting took place in the capital Amman, leaving two Jordanians dead and one Israeli wounded. The incident comes after thousands protested in the city on Friday against Israel.


Corinne Purtill and Dan Kopf on the class dynamics of breastfeeding in the US. “‘Breast is best’ has not always been the mantra of the upper classes in the US. While the cultural definition of the ‘best’ food for babies has fluctuated over the last century between infant formula and breast milk, one thing has remained constant: the most socially desirable form of infant nutrition has been whichever is harder for poor parents to access.” Read more here.


Police body cameras are a failure. The problem of police brutality in the US requires more than video footage.

Playing ball with Chinese censors hasn’t helped LinkedIn. The company is one of a handful of Silicon Valley tech giants that arefinding it harder and harder (paywall) to succeed in China.

The future of military robotics looks like Planet Earth II. Humans do not yet know how to replicate all the capabilities of animals like pigeons and cheetahs, but roboticists are trying.


Mongolians can keep a secret. Genghis Khan’s tomb will never be found because he wanted it to stay hidden—and Mongolians want to respect that.

Japan’s government has to force people to work from home.Authorities have declared July 24 “Telework Day” to make people more flexible about where and when they work, and as preparation for the 2020 Olympics, when trains are expected to be exceptionally packed.

Pirates watched the new Game of Thrones episode 90 million times. That’s nearly six times as many as the official view count.

There’s a new garbage patch in the South Pacific. By one estimate, the debris covers an area some one-and-a-half-times the size of Texas.

Vaccines could soon be delivered without needles. Star Trekfeatured a needle-free device, a jet injector called a “hypospray.”

Our best wishes for a productive day. Please send any news, comments, robot pigeons, and needle-less vaccines to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

CWS Market Review – July 21, 2017

CWS Market Review

July 21, 2017

“Don’t confuse brains with a bull market.” – Humphrey B. Neill

Second-quarter earnings season kicked off this week for our Buy List stocks. Unfortunately, we’ve had a few poor reactions to the earnings reports, even though the underlying fundamentals of our companies are still pretty strong.

We’ve had six Buy List stocks reports so far this week, plus Moody’s is due to follow later today. In a bit, I’ll go over all our earnings reports. I also have a few new Buy Below prices for you. Later on, I’ll preview six more earnings reports coming next week.

Overall, Wall Street has been in a buoyant mode. The S&P 500 has continued to make several new all-time highs. Volatility remains extremely low. Here’s an interesting stat: Only once in the last 14 trading days has the S&P 500 fallen by more than 0.1%. It’s almost as if every trading day, the market closes just a tiny bit higher. Now let’s take a look at what was a very busy week for earnings.

Signature Bank Earns $2.21 per Share

On Wednesday, Signature Bank (SBNY) started off the second-quarter earnings season for our Buy List. The New York-based bank reported quarterly earnings of $2.21 per share, which matched Wall Street’s consensus.

But there’s a big caveat to that number. It doesn’t include Signature’s “provision expense and write-downs for the taxi-medallion portfolio.” As we’ve seen, SBNY took a bath on those medallion loans. Uber, Lyft and others have knocked the entire cab industry for a loop. But as I’ve said, this is a known problem, and SBNY has been working on it.

“We did not, nor did any others, foresee the dramatic decline in taxi-medallion values caused by a combination of rapid radical disruption by app-based hailing systems and inaction by governmental authorities. We did, however, see the disruption coming in time to set an upper limit on loan amounts and to stop our lending earlier than most,” said Scott A. Shay, Chairman of the Board.

I was more concerned with net interest margin. That’s the key metric for any bank. For Signature, their net interest margin for Q2 was 3.11%. That’s pretty good. Overall, this was an OK quarter for Signature. It’s largely what I expected.

Traders were not pleased with the earnings reports. The shares have struggled lately, but I still like SBNY. Don’t let the downdraft scare you. This week, I’m dropping my Buy Below on Signature down to $144 per share.

Five Earnings Reports on Thursday

Thursday was a very big day for us, as we had five Buy List stocks report earnings.
Leading off the group was Danaher (DHR). The diversified manufacturer said they made 99 cents per share for Q2. Danaher previously told us to expect earnings to range between 95 and 98 cents per share.

Thomas P. Joyce, Jr., President and Chief Executive Officer, stated, “During the second quarter, we delivered double-digit adjusted earnings per share growth, generated strong cash flow, and our two most recent large acquisitions – Pall and Cepheid – continued to perform very well.”

Joyce continued, “As we look to the second half of the year, we expect our core growth rate to accelerate compared to first half levels off of improving order trends and as recent acquisitions become part of our core revenue. We believe that the power of the Danaher Business System, significant opportunities across our portfolio, and a strengthening balance sheet position us well for the remainder of 2017 and beyond.”

Now for guidance. For Q3, Danaher said to expect earnings between 92 and 96 cents per share. Wall Street had been expecting 96 cents per share. The good news is that Danaher raised its full-year range. The old range was $3.85 to $3.95 per share. The new range is $3.90 to $3.97 per share.

Despite the higher guidance, the shares pulled 3% during Thursday’s trading. Frankly, the report looked just fine to me. The company is doing well. I’m keeping Danaher’s Buy Below at $90 per share.

Snap-on (SNA) said they made $2.60 per share for Q2. That was five cents better than expectations. Net sales rose 5.6% to $921.4 million. Diluted EPS rose by 10.2% over last year’s Q2.

The CEO said, “Our year-over-year improvement in operating margin before financial services reflects ongoing progress through our Snap-on Value Creation Processes. At the same time, these results also demonstrate continued advancement along our strategic runways for growth, as indicated by the notable increase in activity in the quarter. Despite some sales headwinds in the quarter for the Snap-on Tools Group, we believe the vehicle-repair markets in which we operate remain robust and afford significant ongoing opportunity. Furthermore, our acquisition of Norbar Torque Tools in the second quarter adds to our expanding product offering to customers in critical industries. Finally, these results would not have been possible without the dedication and capability of our franchisees and associates worldwide; I thank them for their extraordinary commitment and ongoing contributions.”

SNA was also punished by traders. On Thursday, the shares closed 4.7% lower. I don’t understand how a five-cent beat can result in a $7.37 falloff in the share price, but that’s Wall Street for you. This week, I’m dropping my Buy Below on Snap-on down to $161 per share.

Alliance Data Systems (ADS) was the ugly one this week. The loyalty-solutions people said they pulled in $3.84 per share for Q2. That was 11 cents more than expectations. Quarterly revenue rose 4% to $1.8 billion.

However, the big news is that ADS is lowering its full-year guidance from $18.50 to $18.10 per share. ADS said its brand-loyalty business “produced soft results.” But ADS is actually bumping up its revenue guidance from $7.7 billion to $7.8 billion.

The company also said it’s “comfortable” in giving initial 2018 guidance of $21.50 per share in core earnings. The consensus on Wall Street was for earnings of $21.42 per share. Still, Wall Street was not pleased with Thursday’s report. Shares of ADS dropped by 9.5%. I’m lowering my Buy Below to $252 per share.

Sherwin-Williams (SHW) had a big earnings miss. The company only made $3.80 per share last quarter. Wall Street had been expecting $4.57 per share. The reason for the earnings shortfall was the recent merger with Valspar.

Sherwin said they see Q3 earnings coming in between $3.70 and $4.10 per share. That includes a charge of $1.10 per share related to the acquisition. Wall Street had been expecting Q3 earnings of $4.91 per share.

For all of 2017, Sherwin now expects earnings to range between $12.30 and $12.70 per share. That will include $2.50 in charges related to the acquisition. Wall Street had been expecting $14.76 per share.

Shares of SHW got clobbered early Thursday. At one point it was down more than 6.1%. But the stock recovered some lost ground and closed down just 2.5%.

After the closing bell on Thursday, Microsoft (MSFT) reported fiscal-Q4 adjusted earnings of 98 cents per share. But that figure includes a tax benefit of 23 cents per share. Excluding that, MSFT earned 75 cents per share, which was four cents more than Wall Street’s consensus.

Revenue in MSFT’s Intelligent Cloud unit rose 11% to $7.4 billion. The company said that Azure revenue rose by 97%, while Office 365 revenue jumped by 43%. The CFO even said that Azure was the primary catalyst for the earnings beat. Microsoft said that LinkedIn brought in $1.07 billion in revenue, and had an operating loss of $361 million.

The software giant also gave upbeat guidance for the current quarter. The company expects Intelligent Cloud revenue to rise by between 8% and 11%. They see Productivity and Business Processes revenue rising by 21% to 24%. Overall, Wall Street seemed pleased by Microsoft’s results. The shares gapped higher during the after-market session, but that’s never a guarantee of what will happen on Friday. For now, I’m going to raise our Buy Below on Microsoft to $76 per share.

Six Buy List Earnings Reports Next Week

On Monday, RPM International (RPM) is due to report. This is the odd-man out this earnings season because RPM’s fiscal Q4 ended in May. The other added wrinkle is that usually around 40% of RPM’s annual earnings come during their fourth quarter. The company said it expects full-year earnings to range between $2.57 and $2.67 per share. That implies a Q4 range between $1.13 and $1.23 per share.

On Tuesday, Wabtec (WAB) is due to report. The freight-services company has been in the midst of an impressive turnaround. Only recently has it started to falter. In April, WAB said they see full-year numbers ranging between $3.95 and $4.15 per share. Wall Street expects Q2 earnings of 94 cents per share.

Express Scripts (ESRX) follows on Wednesday. The pharmacy-benefits manager has been a headache for us this year. I’ll be curious to hear any updates on the Anthem saga. Fortunately, regular business seems to be going well. Express told us they expect Q2 earnings to come in between $1.70 to $1.74 per share. That’s a pretty optimistic forecast, but I think they can do it.

Next Thursday will be another crowded day for us. We have three more Buy List earnings reports. AFLAC (AFL), the duck stock, said that if the yen averages between 105 and 115 for Q2, then they see earnings coming in between $1.55 and $1.70 per share. The yen has mostly been between 110 and 115 for the last few months.

Cerner (CERN) has been an excellent stock for us this year. The healthcare-IT folks pegged Q2 earnings between 60 and 62 cents per share. That’s a narrow range. I wanted to add that Cerner’s founder, Neal Patterson, recently died. You can read here about his extraordinary contribution to business.

Last is Stryker (SYK). For Q2, Stryker expects EPS between $1.48 and $1.52. The orthopedics firm has a full-year forecast of $6.35 to $6.45 per share. They should be able to achieve both.

Before I go, I wanted to mention that Smucker (SJMraised its dividend by 4%. The quarterly payout will rise from 75 to 78 cents per share. This is their sixteenth annual dividend increase. The new dividend will be paid on Friday, September 1 to shareholders of record at the close of business on Friday, August 11. Smucker remains a buy up to $131 per share.

Next week will be dominated by earnings reports. There’s actually a Federal Reserve meeting on Tuesday and Wednesday, but don’t expect much in the way of headlines. It’s highly doubtful the Fed will make any more on interest rates. The policy statement will come out on Wednesday afternoon. The big economic report for next week will come on Friday, when the government releases its first estimates for Q2 GDP growth. 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

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.
2223 Ontario Road NW, Washington, DC 20009, USA

#Trump-#Putin chat, #IBM’s blues, T. Rex couldn’t run

Good morning, Quartz readers!


The US and China hold a tense trade meeting in Washington.One hundred days after the countries formed the “US-China Comprehensive Economic Dialogue,” the US is threatening sanctions on Chinese steel, and president Donald Trump is criticizing his counterpart Xi Jinping for not reining in North Korea.

Citigroup names Frankfurt as its post-Brexit European hub.The US bank is expected to announce its retreat from London as the UK moves toward exiting the European Union. Meanwhile Citibank and Bank of America are planning to boost their presence in Dublin.

Germany mulls the future of diesel engines. A court in Stuttgart will hear a lawsuit that could force automakers to retrofit vehicles or even ditch them completely to reduce air pollution.


Look to the UK for a wave of breakthroughs in technology. From 3D printing to reliable developments in AR, explore four projects setting a new global standard.Advertisement


A second Trump-Putin G20 conversation came to light… The US president and his Russian counterpart had an undisclosed conversation—reportedly lasting about an hour and joined only by Putin’s translator—at the G20 summit earlier this month. The Trump administration said any suggestion it tried to hide the conversation was “absurd and malicious.”

…And Trump made his pick for US ambassador to Russia. The White House said he’ll nominate Jon Huntsman, who was ambassador to China under Barack Obama. A former governor of Utah, Huntsman has long been expected to be Trump’s pick for the job. The nomination requires confirmation by the senate.

McCormick said it will buy the food business of Reckitt Benckiser for $4.2 billion. The US maker of spices and seasonings will get brands like French’s mustard and Frank’s RedHot sauce with the acquisition. The sale will allow UK-based Reckitt Benckiser, maker of Durex condoms, to focus more on its newly acquired infant nutrition unit.

Apple named its first-ever managing director for Greater China. Isabel Ge Mahe, who has worked in wireless technology at Apple for about a decade, will coordinate teams across China. Revenue from the region has declined year-on-year for the past five quarters, but it drives much of Apple’s growth.

Nauto lured investments from tech and auto heavyweights. The two-year-old Silicon Valley startup, which makes software for self-driving vehicles, closed a $159 million funding round led by SoftBank and VC firm Greylock Partners. GM, BMW, and Toyota are also on board. CEO Stefan Heck said the firm’s post-funding valuation was shy of $1 billion—”unicorn” status—but he added, “We’re getting there.”

IBM reported its 21st straight quarter of year-on-year revenue declines. On the plus side, Big Blue saw a surge in its cloud business, with sales reaching nearly $4 billion. The tech stalwart isstruggling as it transitions from traditional businesses to newer fields like cybersecurity, artificial intelligence, and data analytics.


Michael Coren on all the times Elon Musk has trash-talked his own stock. “Tesla CEO Elon Musk keeps telling investors Tesla’s stock price is wildly overpriced based on today’s performance despite his faith in its future. Investors keep ignoring him. Tesla is now one of the world’s most valuable carmakers.” Read more here.


Senate dysfunction? / It’s good business. Record highs / everywhere today.


Apple is experiencing diseconomies of scale. The next iPhone will always be constrained by its own immense production demands.

Robots will take fake news to a new level. Technology could allow us to make videos of events that never happened.

The UK’s new Jane Austen banknotes are a flirtatious lie. The famously plain author has been given the “Georgian equivalent of an airbrushing.”


Manchester residents don’t know how to share. Widespread vandalism and antisocial behavior is making life difficult for a Chinese bike-sharing startup.

Britain is banning ads with gender stereotypes. New legislation prohibits typecasting girls as ballerinas and boys as engineers.

Vomit is a big problem for driverless cars. Ride-sharing companies that go driverless will have to deal with people’s “nasty habit of throwing up in moving vehicles.”

Conservative India’s moral policing extends to Airbnb. Many listings in the country use a version of this caveat: married couples only.

T. Rex was too big to run. New research suggests the dinosaur’s legs would have snapped had it moved any faster than a “brisk walk.”

Our best wishes for a productive day. Please send any news, comments, Tesla trash talk, and vomit-free vehicles to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Weekend edition—#Robot twins, rude conversation openers, and doomsday biobanks

Good morning, Quartz readers!

We already rely on machines to build our cars, trade our stocks, and answer our customer-service calls. In the near future, they’ll likelydrive our cars for us, care for our elderly, and even, in a limited form,replace us when we die. This week we explore this future in Machines with Brains, a 13-part series on the nature of humanity in an increasingly automated world.

But although machines are learning to do what only humans could once handle, how they learn is very different. A human artisan, trader, driver, or caregiver relies to a large degree on empathy—her ability as a human to infer what another human might want. Even bored ticket sellers or call-center operators use empathic cues to figure out how to serve you, not least because they have been on the other side of that conversation. Algorithms, though, learn through pattern-matching and repetitive training against quantified goals, and while this can make them very good—even better than humans—at certain things, they achieve them without any true understanding of what a human actually wants.

As computers serve more of our needs, empathy is drained out of our interactions, forcing us to adapt to the machine mind. You query Google using weird Google-search-speak, modify your enunciation for Alexa or Siri, spend minutes trudging obediently through automated phone menus when a single sentence could easily communicate what you want. It’s not only our digital servants who are being trained. So are we.

Increasingly, empathy will be treated as a luxury. We’ll pay more for a real human whose job is to understand us just as we are. As with bespoke shoes, artisanal coffee, or handmade clothes, we’ll shell out a premium for financial services, medical care, and even companionship that isn’t machine-made. Normally it’s the rich who benefit first from new technology; the irony of the AI revolution is that the rich will be those who can afford to benefit last.—Mike Murphy and Gideon Lichfield


How to visualize an iceberg. A trillion-ton formation, freshly split from an Antarctic ice shelf, inspired a global flurry of size comparisons. Zoë Schlanger, Jennifer Brown, and Katherine Ellen Foley created a handy, global guide to give you some context, whether you live in Spain (10 Madrids), or Turkey (four Istanbuls).

Russia’s helping hand. From Humphrey to Kennedy, there’s a long history of the Kremlin offering support to their favorite US candidates— what’s unusual about the Trump campaign is that they actually took them up on it writes Casey Michel.

I, robot. As part of Quartz’s Machines with Brains series, Mike Murphy documents his journey to create a digital twin using a messaging app that distills thousands of messages into a chatbot replica of oneself. In the process, he tries to figure out what robots can teach us about being human.

The groundbreaking case of the gay seagulls. In the 1970s, a pair of scientists discovered lesbian seagull couples in California. Zoë Schlanger explores how the scientific discovery, and resulting controversy, ruffled feathers and challenged the most trenchant argument about gay humans: That being gay isn’t “natural.”

A classic American conversation-opener is considered rude in much of the world. “What do you do?” is an innocuous cocktail-party question for most North Americans that doesn’t transcend borders. Lila MacLellan looks to small-talk experts for better lines to engage strangers, from the French to descendants of manners-maven Emily Post.


Paravel is reimagining the future of travel. We’re design-obsessed travel junkies on a quest to create the perfect bag for every adventure, no matter the size. Our collection of ultra-lightweight bags is made from stain-proof, waterproof Italian cotton canvas engineered using a zero-waste treatment. Looking for the perfect travel companion? The Grand Tour duffel or the new Aviator backpack marry an eye-catching look with unrivaled performance while the Stowaway overnight bag collapses flat for easy storage. Use the code DailyBrief10 for 10% off your order over $100 through July 21.


Earth is not designed to survive climate change. The most frightening insight of David Wallace-Wells’s exploration of the consequences of the world’s warming in New York magazine is not that we are beyond the point of no return. It’s the realization that living through a hell of dislocation, epidemics, famine, and global conflict could be the only way humankind can be convinced to save itself.

The view from the bog. Political reporter Mark Leibovich susses out the changes in the US’s most famous “swamp” six months into Donald Trump’s presidency for the New York Times. Rather than draining DC, Trump has created a different creature altogether, throwing the Republican establishment off-kilter in the process.

Google’s academic influence. For the past decade, Google has paid professors from Harvard to Berkeley up to $400,000 to provide research that benefits their business. The Wall Street Journal’s Brody Mullins and Jack Nicas investigate (paywall) the company’s little-known campaign to defend their market dominance through academic studies.

Fox News’s Tucker Carlson is shaking up conservative media. The TV host is doing “something extraordinary” writes The Atlantic’s Peter Beinart: Challenging conservative orthodoxy on foreign policy with stimulating debates, presenting “a glimpse into what Fox News would look like as an intellectually interesting network.”

Will doomsday “biobanks” save us from ourselves? When the Svalbard Global Seed Vault, a “modern-day Noah’s ark” for crop seeds, flooded last October, no one noticed. But with climate change back in the spotlight after Donald Trump announced he was pulling the US from the Paris accords, Malia Wollan and Spencer Lowell of the New York Times chronicle the many banks—from caches of milk to cell cultures—scientists are building to understand, and perhaps save, the world.

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

#Honda recall, #Emmy nominations, witch translators

Good morning, Quartz readers!


France celebrates Bastille Day. This year’s military parade, which marks the 100th anniversary of America’s entry into WWI, will be led by US troops for the first time. US president Donald Trump’s attendance follows an amiable meeting with his French counterpart Emmanuel Macron in Paris, where Trump hinted at a possible renegotiation of the Paris climate accord.

China takes a bird’s-eye view of its financial system. Chinese leaders convene for two days in Beijing for the National Financial Work Conference, held every five years, to consider ways to improve the country’s complex financial system. On the agenda this year:handing regulation responsibilities over to China’s central bank.

The US reviews June economic activity. The commerce department releases June retail sales data—the struggling sector(paywall) is expected to grow only 0.1% after a 0.3% drop in May. Also due today: inflation data and industrial production figures.


Look to the UK for a wave of breakthroughs in technology.From 3D printing to reliable developments in AR, explore four projects setting a new global standard. Advertisement


The Trump administration prepared new sanctions on China.US officials said the White House could impose sanctions on small Chinese banks, shell companies, and other “low-hanging fruit” within two weeks, in retaliation for China’s failure to rein in North Korea.

Honda recalled 1.2 million vehicles. Engine compartments in Accords from the 2013 to 2016 model years can catch fire, the company said. The problem has cropped up in US states where winter roads are cleaned with salt, which corrodes and possibly shorts out inadequately sealed battery terminals. The recall follows Honda confirming this week the 11th customer death in the US tied to faulty Takata airbags.

Trump offered details on the proposed US-Mexico border wall.In his most definitive statements yet on the matter, the US president said the wall—a key campaign promise—could run for just 700 to 900 miles (1,448 km), and not the entire length of the border (about 2,000 miles). The wall, he added, should be see-through for security reasons.

Robot thriller Westworld scored 22 Emmy nominations. The sci-fi drama helped HBO rack up the highest number of nominations, at 111. Netflix followed with 91, nearly doubling last year’s nods. HBO’s Game of Thrones, which won best drama for the past two years, was ineligible due to a later start date. The awards will be presented by talk show host Stephen Colbert—also up for an Emmy—in September.


Oliver Staley on “chiefiness” taking over the corporate world.“As the proliferation of chiefs spreads, the title has become less a position of authority, and more a reflection of a company’s current culture. To stress its pizzas are made with fresh ingredients, Papa John’s promoted a senior vice president to chief ingredient officer. Mars, the candy and food company, is making a push toward sustainability, so it named a chief agricultural officer.” Read more here.


The pollyanna / Street. It finds only good news / Amid the chaos


Universal basic income is bad for everyone except billionaires.It’ll help Silicon Valley sleep better, while compounding social inequality.

Nobody really believes in free-market health care. If they did, they’d be willing to forego saving some patients (paywall).

There’s a right and wrong kind of popularity. Likability, not status, is a more meaningful trait for people to pursue.


Our perception of time is warped by the number of important events we remember. That’s why the Trump presidency already feels like a lifetime.

A Chicago library is seeking a witch translator. Volunteers are needed to help make sense of a mysterious 17th-century book of charms.

Some narcoleptics hallucinate their own death. A lesser-known aspect of the sleep disorder prevents sufferers from distinguishing between dreams and reality.

People miss almost 10% of their faces when they apply sunscreen. UV photos reveal that they’re especially lax around their eyes.

A Google search helped the US SEC nab an insider trader. He was allegedly looking for tips on “how sec detect unusual trade.”

Our best wishes for a productive day. Please send any news, comments, dubious searches, and extra sunscreen to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.