Rebounding markets, Puerto Rico rescue, ballooning for drones

Good morning, Quartz readers!


A Labour MP tries to unseat Jeremy Corbyn. Angela Eagle, a former pensions minister, was one of 20 parliamentarians who quit the UK Labour Party’s shadow cabinet last week in protest of Corbyn’s allegedly lackluster opposition to Brexit. Eagle plans to launch a formal bid for the party’s leadership.

Barack Obama signs a Puerto Rico rescue bill. The US president will sign legislation that cleared the US Congress yesterday and aims to help Puerto Rico address its mounting fiscal crisis. The US territory was otherwise set to default on roughly $2 billion in debt payments in a few days, which likely would have roiled credit markets.

Yahoo holds its annual shareholder meeting. Investors will meet in California during a dark time for the internet pioneer, which is up for sale. CEO Marissa Mayer recently gave the hedge fund Starboard Value four seats on the board.


The markets bounced back from Brexit. Asian markets climbed for a second day as anxiety from the UK’s upcoming departure the EU diminished. That followed the S&P 500 erasing its loss for the year and Britain’s FTSE 100 surging for a second straight day,regaining all the ground it lost since the UK referendum.

Rodrigo Duterte became president of the Philippines. With today’s inauguration done, the tough-talking populist is forsaking a lavish state dinner in favor of snacks. Since his election, the bodies of dozens of suspected drug peddlers have been dumped in the streets.

Experts leaned toward technical problems as the cause of May’s EgyptAir crash. More analysis of the recently repaired flight recorder is needed, but data so far suggests smoke had been detected on board. That combined with wreckage showing high temperature damage and soot suggest a fire may have broken out on flight MS804.

Beijing derided a tribunal set to rule on the South China Sea.State-controlled media called The Hague-based Permanent Court of Arbitration a “law-abusing tribunal” that had “widely contested jurisdiction.” Yesterday the tribunal announced when (July 12) it will deliver a ruling expected to counter China’s sweeping but dubious territorial claims to the sea.

The NBA got its first Chinese minority owner. Lizhang Jiangbought a 5% stake in the Minnesota Timberwolves for an unspecified amount, and plans to build more partnerships between the league and China. Earlier this month the Shanghai-based tycoon purchased 98% of the Spanish soccer team Granada CF for $41 million.


Brexit won’t matter
We are all completely fine!
Ha-ha. You know? Right?


Jenny Anderson on an industry that’s about to have a Brexit bonanza. “There are plenty of people on the losing side of Britain’s epic decision to vote itself out of the European Union. But from crisis comes opportunity, especially for those billing by the hour for legal advice.” Read more here.


“Tesla Solar” could transform the power sector. Elon Musk isrunning a battery company that could link production and demand.

Boredom leads to political extremism. Radical ideologies help fill a need for a larger purpose.

Uber won’t conquer the world. The network effect provides a competitive advantage—but not across far-flung cities.


Holocaust survivors are getting royalties from Hitler. Mein Kampf generates about $60,000 a year in US sales.

Climate change is causing shark attacks. Rising temperaturespush sharks into human-infested waters.

Learning to fly a hot air balloon can certify you to commercially operate a drone in the US. For the latter you need a pilot’s certificate, and the easiest way to get one is ballooning lessons.

Risqué office photos are booming in Belarus. Its authoritarian president told workers “to get undressed and work till you sweat” to boost the national economy.

Tennis pros hate Nike’s new tennis dress. The “babydoll” lookisn’t going over well at Wimbledon.

Our best wishes for a productive day. Please send any news, comments, tennis dresses, and Belarusian office photos You can download our iPhone app or follow us on Twitterfor updates throughout the day.


Brexit aftershocks, VW settlement, hug-predicting robots

Good morning, Quartz readers!


EU leaders meet to discuss Europe post-Brexit. The European Council gathers for two days of meetings in Brussels on the consequences of the UK referendum. Germany, France, and Italyhave refused to negotiate the details of the UK’s exit until it officially announces its departure from the union.

Jeremy Corbyn faces a no-confidence ballot. The leader of the UK’s opposition Labour Party has been heavily criticized for running a lackluster campaign to remain in the EU, with an exodus from his team following the results. Corbyn insists he’ll lead the party through a general election expected later this year.

Tim Cook hosts a fundraiser for Paul Ryan. The Apple CEO iscourting leaders of the US Republican party, including the House Speaker and former vice presidential nominee, while steering clear of presidential nominee Donald Trump.

Nike faces a steep climb. The athletic wear giant is struggling with a weakening apparel market and tougher competition (paywall), and is expected to post a 6% decline in earnings. The results could affect the race by three Nike executives to succeed CEO Mark Parker.


Videoconferencing makes your meetings more productive.Virtual collaboration tools help shorten tasks, break language barriers, and provide the face-to-face time crucial to building relationships. With the global videoconferencing market set to doubleby 2020 to $6.4 billion, it’s clear that plenty of businesses see the technology’s potential. Read more about how Telstra’s solutions allow clients to realize the full benefits of virtual collaboration.Advertisement


The UK lost its AAA credit rating. In a major aftershock to last week’s Brexit referendum, Standard & Poor’s and Fitch downgraded the UK to AA. Meanwhile, prime minister David Cameron and former London mayor Boris Johnson each said they hope the UK can still participate (paywall) in the EU’s common market.

Volkswagen’s US settlement ballooned to $15 billion. The company is preparing a $10 billion payment to car owners affected by its diesel-emissions cheating scandal, plus $5 billion to “offset excess diesel emissions and boost zero emission vehicles,” Reuters reported. The company is expected to announce the settlement today.

South Korea cut its growth forecast and announced a $17 billion stimulus package. The government cited uncertainty from Brexit and restructuring in ailing industries like shipbuilding. That follows the finance ministry’s surprise move earlier this month to cut interest rates to a record low.

A US judge ruled Mississippi clerks can’t cite religious beliefs to avoid issuing gay couples marriage licenses. Part of a state bill would have allowed it, but that, a US district judge decided, violates the Supreme Court’s landmark 2015 ruling legalizing gay marriage.

The flight data recorder of EgyptAir MS804 was repaired. Now investigators will be able to analyze data that might explain why the jet plunged into the Mediterranean last month en route from Paris to Cairo. The crash killed all 66 people on board.


England and Brexit
The blessed plot grows thicker
And the pound withers


Joon Ian Wong on the cities vying to replace London as Europe’s startup capital. “Besides Dublin, there’s Berlin, already home to successes including Rocket Internet and Soundcloud; Amsterdam, which has spawned the major payments player Adyen; and Stockholm, with Spotify and Minecraft’s maker, Mojang.” Read more here.


Barack Obama should pardon Edward Snowden. The president would improve his own legacy by allowing the whistleblower to return to the US.

Brexit offers a lesson for Hillary Clinton: Don’t neglect your young voters.

Early puberty isn’t just awkward. Girls whose bodies mature before their teen years are at higher risk of breast cancer, depression, and heart disease.


Beijing is slowly collapsing. Excessive water pumping hasemptied out the city’s aquifers.

Marijuana shops are more lucrative than Whole Foods. Based on revenue per square foot, edibles may be more profitable than groceries.

MIT trained an AI to predict sitcom high-fives. It can also analyze any scene for expected hugs, handshakes, and fist-bumps.

Veterinarians are performing surgeries on bullied fish. One received a hand-painted prosthetic eye.

Barack Obama may have a future career in venture capital.Silicon Valley is salivating over the idea.

Our best wishes for a productive day. Please send any news, comments, AI sitcom analytics, and prosthetic fish eyes You can download our iPhone app or follow us on Twitterfor updates throughout the day.

Alcuni articoli interessanti dalla settimana scorsa, che vale la pena ancora di leggere 27-06-2016

Alberto Nagel, l’uomo del salotto accanto

Merloni, il più piccolo dei grandi imprenditori

Perché Microsoft entra nel mercato della marijuana

«L’Europa penalizza le banche italiane, subito avanti con la garanzia unica sui depositi»

Apple si apre, lentamente

Digitalizzare la PA: quanto è indietro l’Italia e due cose concrete da fare

Quanto contano le elezioni comunali in economia? Molto. Anzi, zero. Follow the money

Ue, moneta, debito, fisco: l’economia targata M5S

Una Dda per i reati finanziari–155355_PRV.shtml?uuid=ADDmyNg

All’innovazione serve formazione per tenere il passo tedesco

Monito Bce alle banche: migliorare governance e presidi sui rischi

La Corte costituzionale tedesca promuove il piano anti-crisi Omt della Bce–091226_PRV.shtml?uuid=ADqUH9f&

Banca d’Italia dà il “nulla osta” all’esplorazione dei Bitcoin

I fondi preparano le munizioni: liquidità ai massimi dal 2001

I 10 aforismi più cattivi sugli inglesi (detti da inglesi)

Brexit, il piano anti-panico delle Banche centrali

Brexit, le cinque mappe del voto per capire chi ha voluto uscire

Brexit, le cinque mappe del voto per capire chi ha voluto uscire

Avanti a Ventisette ma per andare dove?

La City ora si prepara all’esodo dei banchieri

Brexit fallout, a groundbreaking Pope apology, nitro-brewed beers

Good morning, Quartz readers!


Markets reopen in a post-Brexit world. Stocks plummeted on Friday in response to the referendum vote. Further turbulence is expected, and has already been seen in Asia, as the world adapts to the idea of a UK-less European Union. British finance minister George Osborne will make a statement at 6am GMT.

EU heads of state meet in Berlin. Germany’s Angela Merkel will host (paywall) France’s François Hollande, Italy’s Matteo Renzi, and European Council president Donald Tusk for a post-Brexit summit. Merkel is determined to hold the EU together despite populist pressures threatening to further divide it.

The UK’s Labour Party considers ousting leader Jeremy Corbyn. Members of the UK parliament are expected to discuss a vote of no confidence in Corbyn. If the motion is accepted by party chair John Cryer, it will be followed by a secret ballot tomorrow, which could force Corbyn out.


Britons called for a redo. A petition that calls for a second Brexit referendum if the winning campaign garnered less than 60% of the vote and voter turnout was less than 75%, both of which were true on Thursday, got 3 million signatures. By law, the UK parliament must consider petitions with more than 100,000 signatures, but this one isstill a long shot—and many of the signatures might be fake.

Iceland and Spain held elections. On Saturday, Icelanders electedhistory professor Gundi Johannesson as president, a largely ceremonial post. In Spain, the conservative People’s Party won the most seats, but no party won a majority (paywall).

China and Russia strengthened ties. Chinese president Xi Jinping and Russian president Vladimir Putin met on Saturday to reaffirm 15 years of mutual political and economic support. Among other things, they discussed an energy deal that would put Russian oil producers and Chinese national chemical companies into business together.

Brazil’s drug-testing laboratory was suspended. Just six weeks before the Olympics start in Rio, the World Anti-Doping Agencydeclared the Brazilian Doping Control Laboratory unfit to test blood and urine samples from athletes, citing “non-conformity” with international laboratory standards. The lab has 21 days to appeal the suspension.

Pope Francis recognized the Armenian genocide and said gays deserve an apology. During a visit to Armenia, the leader of the Catholic church referred to the 1.5 million deaths during WWI as a genocide, and prayed that killings of that magnitude would never happen again. Returning from the trip, he said Christians should apologize to and seek forgiveness from gay people they have disrespected or discriminated against.


Oliver Stanley on a fertility drug made with the Pope’s blessing and gallons of nun urine. “Soon, tanker trucks were hauling the pee of hundreds of nuns from Catholic retirement homes across Italy to Serono’s headquarters in Rome. While the urine of any post-menopausal women would work, nuns provided Serono with an extra advantage: Because hormones from pregnant women would contaminate the batch, it was critical there be no chance any of the women were pregnant. Working with nuns improved the odds.” Read more here.


The Brexit fallout will be good for young Europeans. The vote will force younger generations to be more seriously politically engaged, instead of relying on the benefits their parents enjoyed.

The political center needs its mojo back. Former UK prime minister Tony Blair argues that unless the center can find a way to resist populist anger and push back against the far left and right, Europe faces an uncertain future (paywall).

Ads featuring super-thin models shouldn’t be banned. Blocking advertisements that show unhealthily thin women only reinforces the idea (paywall) that judging women’s bodies is acceptable.


Some fish are OK out of water. A meta-review suggests that, in some instances, fish may have evolved to survive out of water for short periods of time.

Tech companies are hiring chiefs of staff. Rapid expansion is forcing Silicon Valley firms to adopt a more hierarchical structure, and they’re looking to Washington for clues.

Americans are sleeping more. It’s mostly because of the country’s aging workforce, but unemployed Americans are also getting more shut-eye (paywall).

Goldman Sachs is using video interviews to tackle diversity. In lieu of on-campus interviews, the bank will require (paywall) summer analyst candidates to answer software-generated questions via video.

Trendy nitro-brewed beers are creamier thanks to chemistry.Nitrogen creates smaller bubbles than carbon dioxide, and doesn’t produce extra acid.

Our best wishes for a productive day. Please send any news, comments, nitrogen-bubble recipes, and Brexit petitions You can download our iPhone app or follow us on Twitterfor updates throughout the day.

FinSentS Weekly Recap

Weekly Review of Headlines
● Fitch: Brexit Result Broadly Credit Negative for Most UK Sectors

The “Leave” result in the UK referendum on membership of the European Union is credit negative for most sectors in the UK, due to weaker medium-term growth and investment prospects and uncertainty about future trade arrangements, Fitch Ratings says…Read More

● Britain’s financial sector reels after Brexit bombshell – Rtrs

Britain’s 2.2 million financial industry workers face years of uncertainty and the risk of thousands of job cuts after the country voted to quit the European Union, an upheaval that threatens London’s dominance of finance…Read More

● BoE: Will ‘Take All Necessary Steps’ On Brexit – MarketWatch

The Bank of England said it is working with other central banks to preserve the stability of the financial system as markets swooned following the U.K.’s decision to exit the European Union.

● BoJ’s Nakaso Says Ready To Ease If Needed, Watching Risks – Yahoo

On the British vote to leave the European Union, Nakaso said the BOJ will work closely with domestic and overseas authorities and ensure that steps are taken to stabilise markets, including through using existing swap arrangements with other central banks.

● Sterling Plunges To 31-Year Low, Biggest Ever Fall, As UK Votes For Brexit – RTRS

Sterling plunged to its lowest in three decades and the value of London’s big banks sank by the most since the 2008 financial crisis as Britain’s shock vote to leave the European Union triggered turmoil on global financial markets on Friday.

● Yuan Plunges to 5.5-Yr Low as UK Quits EU – WBP

China’s onshore yuan plunged to its weakest level against the dollar in more than five years on Friday, amid a massive market reaction sparked by Britain’s vote to leave the European Union.

● German bond yields hit new low after Brexit vote – Rtrs

Benchmark 10-year euro zone sovereign bond yields fell to a fresh record low below zero on Friday as investors rushed to the safety of German government debt after Britain’s dramatic and historic decision to leave the European Union.

● Crude slammed as UK votes to Brexit – MW

Oil futures dropped nearly 5% on Friday to their lowest level in about a week, after the U.K.’s vote to leave the European Union in a nationwide referendum triggered a selloff across markets.

● Gold Sees Biggest Gain Since 2008 In Rush For Havens From Brexit – BBG

Gold surged the most since the height of the 2008 global financial crisis after the U.K. voted to exit the European Union, causing turmoil across markets and boosting haven demand.

● Shocking Brexit Vote Sets US Stocks Up For Ugly Open – MarketWatch

U.S. stocks plunged Friday, closing slightly above session lows, a day after U.K. citizens voted to end the country’s membership in the European Union—a historic rejection of Europe’s political order.


Stock Information
● $3

HK China stocks fall, Hong Kong flat as investors brace for Brexit vote #HONG KONG & CHINA GAS CO LTD #HSI50 More Details


US Spartan Motors Inc (SPAR) Shares Down 8.1% #SPARTAN MOTORS INC #NASDAQ More Details


LN KLCI down 0.36% as Brexit batter world markets #BAT-BRITISH AMER TOBACCO PLC #LDN100 More Details


US James E. Flynn Sells 178,454 Shares of eHealth, Inc. (EHTH) Stock #EHEALTH INC #NASDAQ More Details

● $WOS

LN Wolseley plc (WOS) Insider Purchases 22,512 in Stock #WOLSELEY PLC #LDN100 More Details

● $DBK

GR Adobe Systems Incorporated (ADBE) Stock Price Down 4.6% on Analyst Downgrade #DEUTSCHE BANK AG #STOXX600 More Details


US Alphabet Inc (GOOGL) Sees Strong Trading Volume #GOOGLE INC #SP500More Details

● $UNA

NA Unilever (UN) Shares Gap Up to $44.33 #UNILEVER NV #STOXX600 More Details


US Qualcomm sues Chinese phone maker over patents #QUALCOMM INC #SP500More Details

● $005930

KS Samsung, Huawei may go with own operating systems: reports #SAMSUNG ELECTRONICS CO LTD #APEX50 More Details


InfoTrie News
● Real-time Sentiment for You

The “Leave” result in the UK referendum on membership of the European Union is causing turbulence in financial markets. Stocks, FX, Commodities…

What do you care about? Do you want to know the sentiment for each markets and equities fast?

Click me to know more: Real-time Sentiment


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Weekend edition—Brexit hangover, Airbnb racism, the Panama Canal fiasco

Good morning, Quartz readers!

There are good reasons to leave a marriage—constant conflict, deep differences, a deranged partner. There are also less good ones—conversation’s a bit dull, the sex isn’t great, or you have the same thing for breakfast every morning.

British voters just called it quits on their 43-year-long marriage with the EU. The 52% who voted “leave” may have believed they did so over deep-seated and long-held grievances with the status quo: They were on average older and poorer (paywall) than the population at large. Yet their poverty was long-entrenched, not necessarily connected with growing economic inequality or foreigners taking jobs, and the regions that voted to leave were those that most depend on trade with the EU. Dull, passionless, and repetitive it may have been, but theirs was a boring marriage, not a bad one.

The Brexit campaign made a simple but alluring appeal to them: “Take back control.” And it worked. But some Britons are already realizing the grass isn’t magically greener. More than 80 pro-Brexit parliamentarians urged pro-EU prime minister David Cameron to stay in his job for stability’s sake; he promptly resigned. The “leave” campaign suggested that divorce proceedings with the EU needn’t be too hasty, but Brussels isn’t in the mood for delays. As the pound tanks and stocks tremble, it’s getting harder for the Brexit camp to maintain the claim that warnings of an economic wipeout were anelaborate EU plot to bully British voters.

Even nationalist leader Nigel Farage admitted one of his side’s key campaign pledges—to redirect funds from the EU budget to the national health service—was “a mistake.” And though Boris Johnson, the face of the Brexit campaign and now frontrunner for prime minister, rebuked those such as Farage “who play politics with immigration,” the “leave” campaign played plenty of that politics itself, and Johnson may find it hard to put that genie back in the bottle.

Divorce can be thrilling, but in the cold light of the morning after, freedom isn’t always such fun. When you “take back control,” there’s nobody left to blame when things go wrong.—Jason Karaian


Racist hosts are the greatest threat to Airbnb. Its advertising campaigns frequently feature heart-warming stories of connection, but some users are complaining their race or gender has been used to discriminate against them. Alison Griswold describes how this, more than fights over regulation, data use or affordable housing, riskspoisoning the popular home-sharing platform from within.

Spinning a loss into an opportunity. Sree Sreenivasan, the Metropolitan Museum of Art’s first-ever chief digital officer, didn’t lick his wounds after he heard his job was being cut, writes Jenni Avins. Instead, he shared the news on social media, soliciting advice andproviding a master class in how to turning a public firing into a masterpiece of personal branding.

Why millennials all love the “side hustle.” Gigs worked in addition to day jobs aren’t just about the extra cash, argues Catherine Baab-Muguira. They provide a psychology benefit, helping younger workers avoid feeling stuck, dull and pigeonholed in their careers.

After Brexit, eyeing the next exit. “Grexit.” “Beljump.” “Retireland.” “Outaly.” Britain’s stunning vote has us mulling over what the next campaign to leave the EU might be called. Meanwhile, the vote leaves its mark on Cassie Werber, who describes the sense of lossfelt by a younger generation that voted overwhelming to remain. (And we wrote a lot, lot more on Brexit.)

Inequality in San Francisco isn’t just bad for California. Silicon Valley may be yielding unprecedented prosperity in the Bay Area, but studies suggest San Francisco’s overpriced housing could prove an precursor to widespread class warfare, argues real-estate broker Frederick Kuo.


Behind Brexit: Inequality in the UK. The vote to leave the EU was more than just about the financial crisis and increases in immigration, argues the Resolution Foundation’s Torsten Bell. Long-standinggeographic inequality had a strong hand in guiding people’s voting choices, and the country’s failure to address it should be a lesson for the future.

The Panama Canal fiasco. The New York Times investigates the$3.1 billion expansion of the world’s most important artificial waterway and finds dodgy construction quality, huge cost disputes, and an uncertain economic future. Featuring riveting drone footage, the piece drives home the wide-ranging consequences if the canal’s expansion fails.

Driving and texting isn’t the worst thing you could be doing.Federal data show that a surprising number of accidents in the US are caused by drivers talking to passengers, the Washington Post writes. While a campaign getting drivers to put down their phones is important, they also need to be taught to focus in general.

Peer behind the bars of a private US prison. Mother Jones’ Shane Bauer spent four months as a private prison guard toinvestigate the industry that holds 9% of America’s prisoners. In a five-part story, Bauer details his experience working alongside overworked guards and encounters prisoner neglect, lapses in security, and daily struggles for survival.

Secularism began with the first “how-to” books. The belief system isn’t new, and it didn’t develop as a rejection of religion, history professor William Eamon writes for Aeon. Rather, it grew out of a recognition that our experience and understanding of the material world are useful. Practical manuals that began appearing six centuries ago not only bolstered technical literacy but also helped establish more open and tolerant views.


The perfect post-Brexit beach read. Lionel Shriver has written novels on everything from mass murder to obesity, but her latest really nails the are-we-facing-imminent-economic-collapse zeitgeist. In The Mandibles, the year is 2029, the dollar is plummeting, and the US government is printing money and vowing to default on its debt. All this turmoils proves quite inconvenient for the Mandibles, a wealthy family whose anticipated inheritance just went up in smoke. The Independent calls it “distinctly chilling.”

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, Brexit beach reads, and medieval how-to books to You can follow us on Twitter here for updates throughout the day.

CWS Market Review – June 24, 2016

CWS Market Review

June 24, 2016

“The second Vice is Lying; the first is running in Debt.” – Ben Franklin

I’m writing this to you early on Friday, and the big U.K. Brexit vote is still up in the air. Going into the vote, traders had been expecting a victory for Remain, which helped pushed the S&P 500 to within 1% of its all-time high. The index has now gone 54 days in a row without a 1% drop.

The buoyant market is also helping to lift some of our favorite Buy List stocks. Just this week, both Stryker and CR Bard made new 52-week highs. They’re turning into big winners for us this year. Thanks to the strong Japanese yen, shares of AFLAC just broke out to a new all-time high. The duck stock is a now a 20% winner on the year for us. I don’t think many people on Wall Street were expecting that.

In this week’s CWS Market Review, I’ll discuss this week’s earnings report from Bed Bath & Beyond. It wasn’t as good as I had hoped. I’ll have all the details in a bit. Also, Janet Yellen also went to Capitol Hill to give her semi-annual monetary policy testimony. I’ll focus on what she said, and what it means for us. But first, let’s look at the Brexit vote and how it’s impacting world markets.

The UK Votes

I tried to get the most current news on the Brexit Referendum for this issue, but I had to call for a deadline at some point, so some of this may already be dated. The vote simply appears to be too close to call. The initial news suggested that Remain was going to pull it out, but the early results indicate that it’s all up in the air.

As usual, I’ll withhold my political opinion on such matters, but I will address the investment implications. Financial markets were clearly nervous leading up to the big vote. A Leave decision, it’s believed, will cause a recession, and some damage will spill over to U.S. markets. Honestly, that’s probably overhyped, but rhetoric around political campaigns tends toward stoking fears. Since a Remain win had been expected, a Leave victory will probably unravel the market’s recent moves.

Every time a poll came out showing Leave ahead, the British pound would drop against the dollar and other major currencies. Then, quite suddenly, over the last few days, the British pound started to rally strongly. The pound jumped from roughly $1.40 to $1.50 in just a few sessions. This was a sign that world markets expected Remain to pull it out. Every rumor or new poll sent the pound careening back and forth. The implied volatility involved in betting on the pound reached the highest levels since the financial crisis.

As I’m watching the latest results, the pound is bouncing up and down like a tech stocks from the 1990s. With this vote, there’s a large asymmetry. That’s a fancy way of saying that a Remain victory would be taken in stride, while an Exit win would freak everybody out. That’s actually quite common with investing. The Great Rule of investing is that things crash quickly, and recover slowly. In fact, by the time people realize that something bad is happening, it’s probably too late. In this case, the Exit forces were in full view.

As I write this, the S&P futures are down about 1.3%, which basically erases the entire gain from Thursday. As I said, these results aren’t final. The BBC reports that the Electoral Commission will have their results on Friday, “around breakfast time,” which may be the most British thing ever.

I don’t think a Brexit victory would hurt the U.S. economy, but it could spur other countries to ditch the EU. George Soros, who famously broke the Bank of England in 1992, said the pound could fall 15% to 20%. I would also expect money to flee to the perceived safety of U.S. assets.

My advice is don’t panic. Either result should have minimal effect on our Buy List stocks. I’ll have more to say once the outcome is clearer.

Yellen Still Sees the Need for Rate Hikes

This week, Janet Yellen headed to Capitol Hill to give her semiannual testimony on monetary policy. This comes after last week’s Fed meeting, in which the central bank decided to forgo raising interesting rates.

I’ll briefly summarize her comments. Yellen said that the pace of improvement in the jobs market has slowed down. While she was careful to say that it may not be the start of a larger trend, there does seem to be evidence that wage growth is picking up. If so, that would be very good news.

Yellen also noted that the strong dollar has weighed down the economy in recent quarters. That’s certainly been evident in the financial markets. (You may remember how much I spoke of the Strong Dollar trade.) Recently, business investment has been quite weak. On the plus side, Yellen said that Q2 GDP will probably be better than Q1, and that consumer spending appears to be rising.

Overall, Yellen said she’s optimistic for the economy, and she believes that gradual rate hikes may be needed. Hmmm. I’m not so sure about that, and the market doesn’t buy it either. Inflation is still quite low. Yellen also mentioned that the Chinese economy isn’t as healthy as it could be. That’s undoubtedly true.

Just look at the futures market. Traders currently think there’s a 63% chance the Fed will hold rates steady through the next three meetings. I would also think the pressure to do nothing will grow as Election Day gets closer. The yield on the two-year Treasury is currently at 0.78%. Sure, that rate has tripled in the last three years, but it’s gone from next to nothing to barely above next to nothing. The markets are clearly not concerned with any rate hikes.

With yields so low, the focus remains on stocks. In a few weeks, Q2 earnings season will begin. For the first time in a while, operating earnings are rising. The upcoming earnings season is projected to break our six-quarter run of lowering earnings.

According to S&P, analysts on Wall Street expect the S&P 500 to earn $28.41 for Q2. That’s the index-adjusted number. The estimate is down from $31.02 at the start of the year. Wall Street now expects the S&P 500 to earn $114 this year, and $134 for next year. Based on trailing earnings, the stock market looks a bit pricey. However, analysts expect this profit recession to end. If the profit estimates for next years are anywhere close to accurate, then the stock market is still quite reasonable.

Sluggish Quarter for Bed Bath & Beyond

We had one Buy List earnings report this week. After the closing bell on Wednesday, Bed Bath & Beyond (BBBY) reported fiscal Q1 earnings of 80 cents per share. That’s down from 93 cents per share for last year’s Q1. Wall Street had been expecting 86 cents per share.

This is not a strong report. Net sales were almost exactly the same as last year, while comparable-store sales fell by 0.5%. Digging into comparable-store sales, those from digital channels grew by over 20%, while in-store sales were down in “the low single-digits.”

One bright spot is that the company continues to buy back tons of its own stock. In the past year, shares outstanding dropped by 10%. You can expect the share count to continue to shrink. The company still has over $2 billion left in its current authorization. Bed Bath is also standing by its full-year profit range of $4.50 to $5 per share. Previously, they had said they expected to be at the high end of that range. Now they say they’ll be “comfortably within” that range. I’m not sure if that counts as lower guidance.

The shares dropped 5% in Wednesday’s after-hours market. Fortunately, the bears ran away in time for Thursday’s trading, as shares of BBBY gained 1.5%. I think the earnings call assuaged some investor fears. For example, the company seems to be very optimistic about its recent acquisition, One Kings Lane. On the conference call, Bed Bath updated its assumptions for the rest of this fiscal year. They expect comparable store sales to grow by 0% to 1%.

I also think there’s the simple fact that the negative sentiment was so strong that just about any news would be seen as positive. Quite frankly, I’m disappointed with Bed Bath’s performance. Perhaps there needs to be more pressure from shareholders to shake up management. I could be wrong, but I believe this is the first time they’ve taken questions on an earnings call. If I don’t see better performance here, I doubt BBBY will return to next year’s Buy List.

Top Buy List Bargains and New Buy Below Prices

I wanted to highlight a few Buy List stocks which I think look particularly attractive at the moment. I really like Ford Motor (F) below $13.50. It pays a generous dividend, and I expect a good earnings report in a few weeks. I also like Cognizant Technology Solutions (CTSH) here. This stock can move fast. In the banking sector, I really like Signature Bank (SBNY) when it’s below $135 per share. The bank has delivered 26 record quarters in a row.

Since this has been a fairly quiet time for our Buy List, I wanted to adjust a few of our Buy Below prices this week. Biogen (BIIB) continues to be weak, but I’m expecting a decent earnings report. This week, I’m lowering my Buy Below on Biogen to $265.

I also want to pare back Wabtec’s (WAB) Buy Below from $87 to $83. This isn’t a negative for either stock. I simply want the Buy Below prices to reflect the market’s current activity.

With Stryker’s (SYK) new high, I’m going to lift its Buy Below from $114 to $122 per share. Stryker is up 27% for us this year. I’m also going to raise our Buy Below on Fiserv (FISV) to $110 per share.

I also wanted to touch on AFLAC (AFL). As the yen has gained ground, the duck stock has quacked higher. When the yen was getting smacked around in 2014-15, I cautioned investors not to read too much into it, and that AFLAC is a well-run company. Now that we’re getting rewarded by forex, I still hold the same view.

AFLAC based this year’s earnings estimate on the yen’s being at 120.99 to the dollar. It’s now down to 104, and there’s talk of it soon breaking 100. Based on that 120.99 figure, AFLAC gave a full-year earnings range of $6.17 to $6.41 per share.

Basically, for every one yen the Japanese currency strengthens against the dollar, meaning the ratio goes down, three cents per share are added to AFLAC’s full-year profits. I estimate the yen has averaged 112 this year. That translates to a 27-cent headwind.

The shares tested $70 for several weeks in May and June, and have finally burst through. The duck stock came close to touching $72 per share on Thursday. AFLAC remains an excellent company.

That’s all for now. The first half of the year comes to a close next week. I’ll have a summary of our performance in next week’s issue. On Tuesday, the government will again revise its estimates for Q1 GDP growth. The last report said the economy grew by just 0.8% during the first three months of the year. We’ll also get key reports on personal income and spending. The big jobs report won’t be until the following Friday, July 8. 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 nine years. This email was sent by Eddy Elfenbein through Crossing Wall Street.
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