Weekend edition—#Trump’s pushy style, billionaire survivalists, hacking your #DNA

Good morning, Quartz readers!

So far, US president Donald Trump has taken steps to restrict migrants from coming to the US; publish crimes by illegal immigrants; stop funding “sanctuary cities”; start building the “wall” with Mexico; gag some government science agencies; freeze some climate-research funding; restart pipeline projects; begin the rollback of Obamacare; freeze federal hiring and new regulations; stop funding international abortion providers; pull out of talks for the Transpacific Partnership; and more besides.

And it’s only been a week.

The stream of executive orders and presidential memoranda issuing from the White House confirms that, contrary to some expectations, the president is sticking to some of his most extreme campaign promises. How easily he can carry them out is another question; his actions this week have galvanized protestors, and some will no doubt face legal challenges.

But over and above the content of Trump’s orders, what they confirm is that his style as a businessman will indeed be his style as a president. As he wrote (or rather, was ghostwritten) in The Art of the Deal, Trump’s negotiating method is to “aim very high, and then I just keep pushing and pushing and pushing.” Expecting resistance to his policies, it was natural for him to go in strong. A similar approach was on display in his tweets lambasting Mexico ahead of a summit with its president—the opposite of how diplomacy is usually done—and, again, removed any lingering hopes that his style once in office would be more cautious. Mexico’s president cancelled the summit, and now Mexican consumers are threatening to boycott US products.

Two of the world’s top experts in negotiation warned last year that what worked for Trump in business will be disastrous in politics and diplomacy, and lead to impasse. We may find out sooner than we thought whether they were right.—Gideon Lichfield


On the Formula E race track, a need for speed is becoming a need for data. For the DS Virgin team, data technology delivers actionable insights that give drivers a competitive edge—and other organizations can similarly benefit from a data driven approach. Tell us how your business uses data analytics to accelerate growth bytaking our brief survey here.


The many faces of political resistance. Dissatisfaction with liberal globalism gave us Donald Trump and Brexit, but the liberals aren’t licked quite yet. Steve LeVine profiles billionaire William Doll, whose private club is looking to harness the energies of the 1% to preserve climate science and the “right kind of capitalism.” Meanwhile, philosopher Slavoj Žižek offers guidance on ethical resistance—specifically whether punching a neo-Nazi is ever ok.

A lesson in foodie economics. In an excerpt from his new book, A Place in Mind: Designing Cities for the 21st Century, architect Avi Friedman traces the history of how we buy groceries—from rural roadside trading to the hipster supermarkets that masquerade as their ancient progenitors. But which came first: the organic chicken or the free-range egg?

The complete guide to the Lunar New Year. Asia ushers in the year of the rooster this weekend, an occasion marked by food, epic travel, gifts, and more food. Quartz’s Asia reporters compiled advice that could apply to any celebration, including the party preparation checklist of reporter Echo Huang’s 80-year-old grandmother, and acrowd-sourced guide to dodging nosy questions from relatives.

A lament for Somalia’s last safe spaces. When al-Shabaab fled the country in 2011, the war-torn capital of Mogadishu began to patch itself together. But in the past two years, writes Abdi Latif Dahir, renewed terrorist attacks have targeted the hotels, restaurants, and parks that symbolized the city’s fragile return to normalcy.

The icky reason behind expensive salmon. Prices are at an all time high due to “sea lice,” an infestation that costs the aquaculture industry some $550 million each year. Gwynn Guilford describes how large-scale salmon farming has contributed to these outbreaks, and the solutions being used—including one that might just be cute enough to distract you from that massive sushi bill.


Our creative services team would like to know what you think about Quartz’s advertising. Would you mind taking this short survey?


The secrets of super-rich survivalists. When the apocalypse hits, the survivors may include axe-wielding outdoorsmen, hardy cockroaches—and Silicon Valley “brogrammers”. Evan Osnos chronicles for the New Yorker what doomsday prep looks like for the wealthy (think Lasik and underground condos) and why end-of-days fears are flourishing amongst people whose day jobs supposedly involve creating a brighter future.

Coming to America. What does it mean to become an American in the age of Trump? New York Magazine’s Andrew Sullivan maps his32-year “infatuation” with the US, culminating in his naturalization ceremony just a few weeks after the election of a president who campaigned against immigration. “What has saved [America] so far is what created it,” he writes. “A Constitution that was prepared for the worst and yet still managed to hope for the best.”

Scientists are hacking their own DNA to speed up research.Genetics will guide the future of medicine, but for California-based microbiologist Brian Hanley, that’s not good enough; he decided to advance the slow-moving field of gene therapy by injecting himself with extra copies of a gene that regulates growth hormone. Writing in MIT Technology Review, Antonio Regalado tells the story of Hanley’s self-experimentation—and explains why, despite his good intentions, Hanley might be more Dr. Frankenstein than Louis Pasteur.

So much for the afterglow. Modern medicine has dramatically reduced the rates of death during childbirth, but it’s not enough to just keep women alive. Doctors frequently don’t discuss the health implications of childbirth, which range from pelvic floor disorder to urinary incontinence. Kiera Stanley writes for Mother Jones about the nonfatal injuries can that can blindside new moms.

What borders really mean. Joshua Kucera writes for Roads & Kingdoms from the Bosphorus waterway, a heavily trafficked link between Europe and Asia that has had a defining impact on Istanbul’s identity and character. Kucera explores how the barriers between the two continents took on meaning over time, and what that has meant for the world at large.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, survivalist techniques, and Lunar New Year recipes to hi@qz.com. You can follow us on Twitter here for updates throughout the day.


#US-#Mexico stalemate, #Australia’s wine exports, lying thermostats

Good morning, Quartz readers!


Donald Trump and Theresa May put their heads together. The UK prime minister has wryly noted that “sometimes opposites attract” as she prepares to visit DC, where a joint press conference is scheduled for Friday. They’ll discuss trade, foreign policy, and security; May suggested intelligence sharing may be curtailed if the US endorses torture.

The US releases economic data. The commerce department willshare its first reading (paywall) of GDP data for the fourth quarter and all of 2016. Analysts expect growth of 2.2% for the quarter and 2% for the full year. Numbers on manufacturing growth in December will also be shared.

The Lunar New Year migration gets underway. It’s that time of year in China when planes, trains, cars, and boats carry millions of people home to celebrate the weeklong holiday with their families. The official day is Jan. 28. The world’s biggest annual migration(paywall) is also notable for the gifts being hauled—from kilos of meat to flatscreen TVs.


On the Formula E track, a need for speed is becoming a need for data. For the DS Virgin Racing team, data informs every step of race strategy: from pre-race simulations, to in-race sensor data, to post-race analysis. And the team that has the best tech partner enjoys a tremendous competitive advantage. Advertisement


Mexico’s president bailed on a US summit… Enrique Peña Nietocalled off his trip to DC, putting US-Mexico relations into an ugly stalemate. Trump had threatened to cancel it himself if Mexico did not consider paying for his border wall.

…and Trump floated a 20% tax on Mexican imports. Hours after Peña Nieto’s cancellation, White House spokesman Sean Spicer said the measure would raise $10 billion per year to pay for the border barrier. Such a tax, which would need congressional approval, basically means that US consumers would pay for the wall.

Alphabet missed expectations. Google’s parent company came up short with its quarterly profit after making less money per clickfrom advertisers than analysts had forecast. Investors are worried that the company’s growth in mobile and video ad sales has peaked.

Japan recorded its first annual consumer price decline in four years. New data showed prices dropped 0.3% in 2016 from a year earlier, amid tepid household spending and measly wage hikes. The result underscored the challenges Tokyo faces in its long-running battle against deflation and lackluster economic growth.

Australia’s wine industry had a vintage year. The value of the nation’s wine exports rose by 7% in 2016. The biggest factor? Exports to China, which jumped by 40%.


Aamna Mohdin on the European far-right leaders who want to make Europe great again: “With crucial elections in France, the Netherlands, and Germany this year, Trump’s victory has given these far-right leaders hope for a united strategy to inflict Trump-like devastation on European political elites.” Read more here.


Sales of hard liquor
are booming. Is anyone
Terribly surprised?


A ban on Syrian refugees will mean losing the war on terror. It would fuel European anti-immigrant movements and boost recruitment for jihadist groups.

Donald Trump’s trade policy was debunked 200 years ago.Adam Smith conclusively proved that mercantilism doesn’t work.

Neuroscience has the solution to the opioid epidemic.Researchers are trying to disconnect pain relief from addiction.


Win today’s most coveted digital products. Plug in, nerd out, and be the envy of your friends. We’re giving away a suite of today’s most buzzworthy tech gadgets to elevate your everyday. Enter now.


Your hotel thermostat is a lie. To save money on electricity, companies override the settings (paywall).

Finland’s adorable “baby boxes” are headed to America.They’re filled with infant gear and double as cribs.

Fake Trump tweets are a Chinese internet sensation. More than a million have been created in the last four days.

Scientists made metallic hydrogen by squashing a gas between diamonds. Strange things happen when super-cold atoms get intimate.

McDonald’s is launching a Big Mac vending machine. It may be an omen of our dystopian roboburger future.

Our best wishes for a productive day. Please send any news, comments, thermostat tricks, and Nordic baby supplies tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

CWS Market Review – January 27, 2017

CWS Market Review

January 27, 2017
“I can calculate the motion of heavenly bodies, but not the madness of people.”
– Isaac Newton

Don’t feel bad, Ike. I can’t do either. Talk about the madness of people. Consider that since Election Day, the U.S. stock market has added $1.9 trillion in market value.

Despite warnings that a Trump victory would plunge the world into chaos, this has been a great time for investors. On Wednesday, the venerable Dow Jones Industrial Average finally smashed through 20,000. Remember that less than eight years ago, the index was floundering below 6,500. Madness of people? On Thursday, the Volatility Index dropped to a two-year low.

Right now, we’re smack in the middle of earnings season, and the results for our Buy List have been quite good. On Thursday, Sherwin-Williams crushed estimates, and the shares jumped 7.6%. We also had good results from companies like Stryker, CR Bard and Microsoft.

We have a bunch more earnings coming our way next week, plus a Federal Reserve meeting, but this week’s CWS Market Review will be all about earnings. All I need to say about upcoming Fed meeting is that the Fed won’t do anything. In fact, the earliest they’ll hike rates will probably be June. In short, don’t worry about the Fed. This is the time to focus on earnings.

Stryker Beats the Street

On Tuesday, Stryker (SYK) kicked off a good week for us when they reported Q4 earnings of $1.78 per share. That beat the Street’s consensus by two cents per share. Digging through the numbers, this was a solid quarter for the orthopedics company. Net sales grew 16.2% to $3.2 billion. That’s 16.8% growth in constant currency.

For the year, Stryker earned $5.80 per share. They had previously given us a range of $5.75 to $5.80. Later they said they expected earnings at the top of that range. So it turns out, they were right! For 2016, net sales grew 13.9% to $11.3 billion. In constant currency, that’s growth of 14.3%. These are all very good numbers. The short version is that Baby Boomers are falling apart, which is very good news for Stryker. From hippies to hip replacements. From joints to new knee joints. (I’ll stop now.)

“I am pleased with our performance in both the fourth quarter and the full year 2016,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “Fourth-quarter organic-sales growth of 6.7% versus a strong prior year is impressive and was balanced across Orthopaedics, MedSurg and Neurotechnology and Spine. In addition, we executed well on acquisitions and delivered leveraged adjusted-earnings gains. We enter 2017 with good momentum across our businesses and look forward to building on this success.”

Now let’s look at guidance. For Q1, Stryker expects earnings to range between $1.40 and $1.45 per share. According to my math, that’s about right. Wall Street had been expecting $1.43 per share. For all of 2017, Stryker sees earnings between $6.35 and $6.45 per share. Wall Street had been expecting $6.39 per share. I was actually a little surprised that Stryker was willing to go that high with the high end of their forecast. That’s good to see. Stryker added that if foreign exchange rates hold, then they expect to see earnings dinged by $0.03 to $0.04 in Q1, and $0.10 to $0.12 for the year.

The shares traded erratically on Wednesday and Thursday, jumping between $119 and $125 per share, before settling back near $121. Stryker remains a solid buy up to $128 per share. This is a good stock.

Four Earnings Reports on Thursday

Thursday was a busy day for us. We had four Buy List earnings reports.

Let’s start with the good news. Sherwin Williams (SHW) reported Q4 earnings of $2.34 per share, which blew past Wall Street’s consensus of $2.21 per share. As it turns out, last quarter was very good for paint.

SHW had quarterly revenue of $2.78 billion, which beat estimates of $2.69 billion. For all of 2016, Sherwin-Williams made $12.45 per share on revenue of $11.86 billion.

For Q1, SHW sees earnings ranging between $2.03 and $2.13 per share, and sales rising by mid-to-high single digits. Wall Street had been expecting $1.95 per share. For all of 2017, they see earnings between $13.60 and $13.80 per share, and sales rising by mid-single digits. Wall Street had been expecting $13.63 per share.

“We continue to generate significant cash from operations, allowing us to invest in the business and return a substantial portion to our shareholders. In 2016, we generated net operating cash flow of $1.31 billion. In 2016, we added 94 net new stores, finishing the year with 4,180 stores in operation. During the year, we increased our annual cash dividend 25% to $3.36 per common share. Our balance sheet remains flexible and is positioned well for the anticipated Valspar acquisition and other investments in our business.

“We now expect a divestiture will be required to gain approval from the FTC to complete the acquisition of Valspar. We are moving forward on a divestiture that we believe will allow us to gain approval from the FTC. The expected divestiture has revenues below the $650 million threshold, and we expect to negotiate the divestiture and complete the Valspar transaction at $113 per common share within 90 days.”

Excellent quarter. The stock jumped to $305 on Thursday. I’m lifting my Buy Below on Sherwin-Williams to $322 per share. As always, don’t be afraid of high-priced stocks. If you can only buy a few shares of a great stock, remember that you’ll be owning a great stock.

Alliance Data Systems (ADS) reported Q4 earnings of $4.67 per share, which was one penny above expectations. The downside is that revenues came in at $1.83 billion, which fell short of Wall Street’s estimate of $1.94 billion. For all of 2016, ADS made $16.92 per share, and revenue was $7.14 billion.

“Our biggest success in 2016 was the ability to grow core EPS double-digits despite a 12-point drag on growth from credit normalization. We remain on track for solid growth again in 2017, and expect to complete the credit normalization process towards the end of the year.”

Heffernan continued, “Consistent with our announcement in October 2016 of our intention to offer a balanced approach to return capital to shareholders through a combination of dividends and share repurchases, our board of directors today declared our second quarterly dividend of $0.52 with a record date of February 15.”

For 2017, ADS expects earnings of $18.50 per share on sales of $7.7 billion. That’s a little below the Street’s consensus of $18.68 per share and revenue of $7.95 billion.

Wall Street didn’t like the poor guidance, but the shares recovered some lost ground and closed down 2.45% on Thursday. There’s nothing wrong here. For now, I’m keeping my Buy Below on ADS at $250 per share.

After the closing bell on Thursday, Microsoft (MSFT) reported fiscal Q2 earnings of 83 cents per share. That was four cents more than Wall Street had been expecting. This is MSFT’s third impressive earnings season in a row. Quarterly revenue came in at $26.07 billion, which beat estimates of $25.28 billion.

The software giant had pretty good results across the board. Their revenue from Azure rose 93%. For a “stodgy” old tech company, they’ve really established their cloud business. I have to say that CEO Satya Nadella has been an impressive leader. His goal is to reach $20 billion in cloud revenue for the fiscal year ending June 2018. I think they can do it. This report was also the first time LinkedIn showed up on Microsoft’s book. Since December 8, LinkedIn brought in $228 million in revenue and had an operating loss of $201 million. That acquisition cost MSFT $26 billion.

Sales in Microsoft’s Productivity and Business Processes unit, which includes Office, rose by 10% to $7.4 billion. Office 365 now has almost 25 million subscribers. Their More Personal Computing group (Windows) saw revenue drop by 5% to $11.8 billion. The global PC market is still in rough shape, but it might be bottoming out.

I like this report, although the market had a muted reaction. Still, the stock has rallied 33% in the last seven months, so it may need time to breathe. This week, I’m raising my Buy Below on Microsoft to $67 per share.

Finally, CR Bard (BCR) reported Q4 earnings of $2.77 per share. That beat Wall Street’s estimate of $2.74 per share. Quarterly sales rose 11% to $967.1 million. For the full year, Bard earned $10.29 per share, which is a 13% increase over 2015’s bottom line.

To give you a good idea of how good this year was for Bard, last January, their forecast for 2016 was $9.90 to $10.05 per share. That was gradually lifted to $10.23 to $10.28 per share, which they still beat.

Timothy M. Ring, chairman and chief executive officer, commented, “Our strong performance in 2016 once again demonstrated the effectiveness of the execution of our strategic investment plan. We are seeing a broad contribution to growth across our portfolio, from each of our four businesses, both domestically and internationally. We remain in investment mode and continue to focus on providing shareholders with above-average revenue growth and attractive profitability.”

For 2017, Bard sees sales rising by 6% to 6.5% after adjusting for currency. The company sees full-year EPS ranging between $11.45 and $11.75 per share. That’s very good. Wall Street had been expecting $11.36 per share. This means the stock is going for about 19 to 20 times this year’s earnings estimate. That’s at the high side, but not unreasonable for a company like Bard. I’m keeping my Buy Below on CR Bard at $230 per share.

Four Earnings Reports Next Week

On Tuesday, January 31, AFLAC (AFL) and Danaher (DHR) are due to report earnings. In October, AFLAC said that if the yen averages 100 to 110 to the dollar for Q4, then they expect Q4 earnings between $1.53 and $1.82 per share. That would bring their full-year earnings to a range of $6.78 to $7.07 per share. During Q4, the yen gradually fell from 104 to 117 to the dollar. For context, the duck stock made $6.16 per share last year. The consensus on Wall Street is for Q4 earnings of $1.63 per share.

Danaher is a very solid company. Three months ago, they said their Q4 will range between $1.01 and $1.05 per share. They also raised their full-year guidance from $3.53 to $3.60 per share to $3.57 to $3.61 per share. I’m expecting to see a beat here.

On Thursday, February 2, Snap-on (SNA) and Ingredion (INGR) are due to report. In October, Snap-on had a very good earnings report. The company beat estimates by seven cents per share, and the stock jumped 6.6% the next day, then rallied another 13% from there. Wall Street expects $2.41 per share.

Ingredion had blowout earnings three months ago. The company earned $1.96 per share, which was 18 cents more than estimates. The ingredients company now expects full-year earnings to range between $6.95 and $7.10 per share. That works out to a Q4 range of $1.49 to $1.64 per share. Wall Street expects $1.63 per share.

That’s all for now. Earnings will again be the big story next week. Even though there’s a Federal Reserve meeting on Wednesday, don’t expect much to happen. On Friday, we’ll get the jobs report for January. Since we had two presidents during the month of January, I’m sure the political spin will be creative. 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

#Mexico’s wall-bashing, #Harvard’s outsourcing, #Kiwi sheep suits

Good morning, Quartz readers!


Scientists decide whether the “Doomsday clock” needs adjusting. Donald Trump’s stance on nuclear arms, refusal to address climate change, and disregard for science in general may beinching the world toward disaster. At 10am ET, the Bulletin of the Atomic Scientists will announce whether the minute hand will move closer to midnight.

Britain kickstarts Brexit maneuvers. Theresa May’s governmentwill publish legislation seeking parliamentary approval to begin divorce proceedings from the EU. One think tank believes the Article 50 bill could pass as soon as February, though March looks more likely.

Gambia’s new president comes home. Adama Barrow is returning from Senegal, where he took refuge during a standoff with ex-leader Yahyah Jammeh. One urgent bit of business he’ll need to address: It turns out his just-appointed vice president, Fatoumata Jallow-Tambajang, is past the constitutional age limit.


Mexico’s president rejected Trump’s border wall. In a televised address Enrique Peña Nieto assured his countrymen that Mexico would not pay for the wall, as the US president has suggested. That followed Trump ordering construction of the wall, one of his campaign pledges. Peña Nieto reportedly is considering canceling a visit with Trump scheduled for next week.

China ordered banks to curb new loans in the first quarter. The new guidance focused on mortgage lending in particular, as the nation grapples with runaway property prices. The central bank said it might punish lenders that don’t comply by making them pay more for deposit insurance.

The Philippines registered strong growth. The nation’s GDP increased 6.6% from a year earlier in the fourth quarter, while the economy expanded 6.8% in 2016. Economists expect the fast growth to continue in the years ahead, with the nation’s gainsmimicking those enjoyed by nearby Malaysia and Thailand as they industrialized in the 1990s.

The world’s richest university is outsourcing its $35 billion endowment. Harvard University is reportedly laying off half of its 230 staffers and shutting its internal hedge funds. The real-estate division will be spun off into a new entity that will continue to invest some of Harvard’s billions.


Eshe Nelson on the downgrade of the United States to a “flawed democracy.” “The US has been ‘teetering on the brink of becoming a flawed democracy’ for years, a new report says… Trust has been declining in the US for decades, leaving the country’s institutions battling a ‘legitimacy crisis’ and struggling to sustain representative democracy in its current form.” Read more here.


China should reduce its trade surplus with the US. Beijing has a clear path (paywall) to undisputed superpower status, but it needs to prevent a trade war.

Angela Merkel’s re-election is far from assured. Her coalition partner has chosen the popular Martin Schulz, the former president of the European Parliament, as her opponent in this year’s election.

The stock market doesn’t really care who’s president. The US commander-in-chief has very little to do with the economy’s performance.


Join 230,375 executives and see what’s next in technology, VC and startups. If you don’t already read CB Insights’ excellent newsletter, you should. Their newsletter offers a data-driven, no fluff view into what’s next in technology, startups, venture capital, and M&A. Check it out here.


The US constitution is stored in an atomic bomb-proof vault. A special elevator carries the country’s foundational documentsunderground every night.

Elon Musk is building a tunnel under SpaceX. It’s not exactly clear why, but the billionaire has tweeted that traffic is “driving him nuts.”

After a 19-year wait, Japan has a sumo grand champion. The 30-year-old Kisenosato ended decades of dominance by Mongolian wrestlers.

Chasing sheep is illegal in New Zealand. So a famed rodeo isemploying men dressed like sheep as a substitute.

British health officials launched a crusade against burnt toast.It contains a chemical compound that is a probable carcinogen.

Our best wishes for a productive day. Please send any news, comments, Musk tunnel theories, and toaster manuals to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

#Trump pumps pipelines, #Cisco buys #AppDynamics, prehistoric otters

Good morning, Quartz readers!


India meets with Apple to discuss manufacturing. The tech giant has demanded special concessions, including duty exemptions and simplified customs procedures. A breakdown in negotiations could throw a wrench in prime minister Narendra Modi’s plans to make the country a manufacturing hub.

A Mexican delegation sits down with the Trump administration.Two days of talks in DC on trade, immigration, and security will lay the groundwork for a meeting between the US president and his Mexican counterpart Enrique Peña Nieto on Jan. 31. The men had a phone call on Saturday.

The European Space Agency tries to dodge space junk. One of its three Swarm satellites, launched in 2013 to study the Earth’s magnetic field, faces oncoming debris from an old Russian orbiter. A rushed orbit adjustment will try to ensure a miss.


Trump greenlit the Dakota Access and Keystone XL oil pipelines. Native American and environmental groups fiercely oppose the controversial projects, which were blocked by the Obama administration. A different Canadian pipeline in Saskatchewan spilled 200,000 liters (50,000 gallons) of oil in an aboriginal community on Monday.

Japan’s exports rose for the first time in 15 months. In December they were up 5.4% compared to a year ago, easily beating expectations of 1.1%. While the export-reliant nation faces a more protectionist US under Trump, last month’s exports to China jumped 12.5% to hit a record high.

Cisco announced a $3.7 billion acquisition of AppDynamics.It’s also a customer of the startup, which was close to going public and makes software to help companies monitor the performance of applications. Cisco, known more for networking gear, is transitioning toward software.

The US Senate cleared Trump’s pick for UN ambassador. South Carolina governor Nikki Haley won significant Democratic supportdespite having no formal diplomatic experience. She criticized Trump as a candidate and freely aired her disagreements with him during her confirmation hearing. But she also, like Trump, has questioned the effectiveness of the United Nations.

Toyota touted plans to expand a US plant and hire 400 workers. The carmaker is investing $600 million to expand a manufacturing facility in Indiana. While the move seemed to be a response to Trump criticizing the carmaker’s investments in Mexico—and his threat this month to hit it with a “big border tax”—the plans had already been laid out before his election victory.


Steve LeVine on the billionaires determined to stop Trump.“William Doll calls his club Syneidesis, which in ancient Greek means conscience. He started it four years ago, and is now wrestling with what comes next.” Read more here.


Long exile over,
CEOs are returning
to bask in the sun


The post-antibiotic era is going to suck. Vanquished diseases could once again become deadly unless drug company incentives are realigned (paywall).

Trump staffers are lying to prove their loyalty. Telling blatant falsehoods binds them to the president—a classic tactic of distrustful dictators.

US silence on abortion equals deaths around the world. A new gag order on family planning will result in botched illicit procedures(paywall).


The Amish are fighting laws requiring horses to wear diapers.The communities that renounce modernity say the measures violate religious freedom (paywall).

American universities are embracing e-sports. The Big Ten conference will field teams for the multiplayer game League of Legends (paywall).

Uber drivers are camping out in parking lots. The trend is most common in cities where fares are high and rents are unaffordable.

Otters were once larger than leopards. In China researchersfound the remains of an otter that weighed 50 kg (110 pounds) and tore open mollusk shells with its teeth.

“La La Land” almost never got made. Hollywood studios told director Damien Chazelle to replace his jazz protagonist with a rock musician.

Our best wishes for a productive day. Please send any news, comments, horse diapers, and otter gifs 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—Women march on, triangles of instability, smarter hearing

Good morning, Quartz readers!

The day after Donald Trump’s swearing-in as 45th president of the United States, thousands of people will join the Women’s March on Washington, or one of its many sister marches around the world, to remind the incoming administration that “human rights are women’s rights, and women’s rights are human rights,” a motto coined by Hillary Clinton more than 20 years ago.

This should not be a partisan issue. Trump has said that he loves women—”cherishes” them even. But his presidency is the culmination of a campaign stained by sexism, and his proposed policies threaten substantial setbacks for American women—including a war on reproductive rights, a likely increase in health-care costs, and no plan to address the gender pay gap. Activists across the world hoping the US might advance on these issues will continue to look elsewhere for leadership.

The conversion of women’s rights into a partisan issue also masks another undeniable element of this activism: the economic benefits at stake. Fair pay, equal participation in the workforce, reproductive rights—when women, regardless of race, religion, or sexual orientation, have their rights fulfilled, their countries grow faster, and more inclusively. According to a McKinsey report, fully equal workplace participation worldwide would add as much as $28 trillion to global annual GDP.

This progress is too important—ethically, socially, and economically—for anyone to be complacent. No government should stand in the way of a society where the minds and bodies of women are safe and supported, and where the roles of women are properly valued.

Women aren’t the only ones who carry the burden of reminding the world of this. It’s a task for all of us. —Annalisa Merelli


On the Formula E race track, a need for speed is becoming a need for data. For the DS Virgin team, data technology delivers actionable insights that give drivers a competitive edge—and other organizations can similarly benefit from a data driven approach. Tell us how your business uses data analytics to accelerate growth bytaking our brief survey here.


A paradigm shift in geopolitics. Anti-elitism will be a powerful driving force in geopolitical and financial events this year and probably beyond, ushering us into a new, unknown era, predicts Steve LeVine. Expect a backlash against Silicon Valley, and look for the US, North Korea, and Russia to form a “triangle of instability.” (For those concerned about democracy prevailing, here’s some advice onhow reading might help.)

And a paradigm shift for scientists. While a new administrationsets its sights on overturning now-former US president Barack Obama’s efforts on climate change, some scientists are working on ways to bring climate research to the attention of a wider audience. Antarctic scientist Ari Friedlaender talks to Georgia Frances King about the potential of storytelling to effect change—and lets us know how the whales are doing.

In or out of Africa? Donald Trump’s transition team has spent the last few weeks coming to grips with how the United States is run, including how it spends foreign aid. As part of that process, the team sent a four-page list of Africa-related queries to the US State Department, probing how much funding is being stolen, and asking why Africa should receive aid when people in the US are suffering. Quartz Africa reporters Lily Kuo, Abdi Latif Dahir, and Yomi Kazeem set about trying to bring some perspective to those queries.

Indian mixologists go retro. Long before a burgeoning bar scene spawned celebrity mixologists with hip cocktail recipes, the most refreshing, distinctive drinks in India were made by village grandmothers, write Suneera Tandon and Maria Thomas. Now these traditional drinks, with their dazzling complexity and interplay of sweet and salty, sour, bitter, and floral flavors, are making a comeback in India’s hippest bars, transforming a basic Gimlet or Manhattan into something you won’t find anywhere else.

The earbuds of the future have brains. The Amazon Echo has proven audio’s power to be the medium through which we interact with our devices, but people still underestimate the power of putting computers in your ears. In a detailed look at the potential of “smarter hearing,” Dave Gershgorn test-drives the Here One, wireless earbuds from Doppler Labs that can make a conversation more understandable, a commute quieter, or, eventually, a real-time dialogue across languages possible.


Scandinavia’s supercyberspies. Hugh Eakin in the New York Review of Books describes a paradox: Despite Sweden’s image as a beacon of human rights and internet freedom, its small but proficient cyber-intelligence agency is one of the US’s closest collaborators in digital surveillance. Other countries, too, are expanding their snooping capabilities in response to growing threats to NATO from Russia and China, with only mild resistance from citizens and lawmakers.

The team trying to get you to “like” Mark Zuckerberg. From hoodie-wearing introvert to proud dad, eloquent speaker, and thoughtful CEO: Mark Zuckerberg’s image has evolved significantly over the last few years, thanks in no small part to the employees managing his Facebook page, Bloomberg’s Sarah Frier writes. From deleting spam to interspersing soft-focus pictures with user stats updates, Zuckerberg’s page is a revealing mix of how conflated his personal image is with that of his company.

Why statistics have failed us. From William Davies in the Guardian comes a convincing explanation for the loss of trust in experts and the rise of populism and post-truth politics. Statistical categories and methods didn’t evolve to keep pace with rapid changes in society and the economy. As a result, their generalizations became increasingly divorced from individual experience and they—and people who relied on them—lost credibility.

Shipping, the world’s biggest invisible industry. In an excerpt on Longreads from a new book by Rose George, the author of Ninety Percent of Everything marvels at how container ships bring almost all our goods to us yet remain one of the least transparent industries. Boarding a vessel belonging to Maersk—“the Coca-Cola of freight with none of the fame”—she reflects that shipping involves environmental and labor issues as serious as those in industries like mining, yet has almost entirely avoided similar levels of public concern and scrutiny.

Barack Obama prepares for a third term. Obama might have thought being the first African-American US president was going to be the biggest political battle of his lifetime, but he’s now gearing up for a potentially bigger fight to protect progressive ideals, and his legacy, under a Trump presidency. “You can lock in progress for generations if you win three in a row,” Dan Pfeiffer, a former White House senior adviser, tells GQ’s Jason Zengerle. “Some of the battles that would have been settled with a Clinton win will now continue for the next 4 to 20 years.”

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, PR-perfected Facebook pages, and Indian cocktail recipes to hi@qz.com. You can follow us on Twitter here for updates throughout the day.

CWS Market Review – January 20, 2017

CWS Market Review

January 20, 2017
Obama’s Radicalism Is Killing the Dow” – WSJ, 13,000 Dow Points Ago

Dear Lord, this has been a dull, dull, dull market. The S&P 500 has now gone six weeks without having a single daily move, up or down, of more than 1%. Compare that to last summer, when we had six straights days of moves greater than 1%.

The Trump Rally has apparently given way to the Ambien market. Folks, Wall Street is fast asleep. Here’s a stat for you: Since December 12, the Dow has closed every single day within a range of 230 points. That’s a little over 1%. You can expect that kind of range for one day, but over a month?

Things may change soon. Fourth-quarter earnings season is under way, and we’ve already had our first Buy List earnings report. Signature Bank beat consensus estimates by two cents per share. This bank has had a phenomenal rally since the election, but, like everybody else, it’s chilled out. I’ll go over the earnings report in a bit.

I’ll also preview the five earnings reports coming our way next week. But first, let’s look at why the Ambien market may not last, and why I’m cautious about stocks over the next few weeks.

Expect a Rougher Market This Winter

The new president is going to be sworn in in a few hours. Whenever there’s a new president, you’ll hear lots of breathless commentary about how he’ll ruin or save Wall Street. I tend to shy away from these predictions (see this week’s epigram). As Warren Buffett said, forecasts tell you more about the forecaster than they do about the future.

Having said that, I think the market is looking tired right now. The Dow ran into 20,000 and could go no further. Let me be clear: I’m hardly forecasting doom. Rather, I think some minor pullbacks are in order over the next few weeks. Nothing to be too concerned about. In fact, I would expect our stocks to weather any storm better than the overall market.

This is a key moment for the economy. Next week, we’re going to get our first look at the fourth-quarter GDP report, and I think it will be a good one. The report for Q3 was 3.5%, but here’s the thing—the U.S. economy has had a difficult time stringing together two or three good quarters in a row. I think this is our best chance to break that.

This week, for example, we learned that industrial production grew by 0.8% last month. That’s quite good. That beat expectations, and it was the biggest increase in more than two years.

We also got another CPI report telling us that inflation is well contained. The news reports noted that inflation rose by 2.1% last year, which was the largest increase in five years. Well, yes, that’s correct, but it glides over the fact that we came close to deflation over those five years. So this year, inflation has climbed all the way to “low.” This is another reason I doubt the Fed will raise interest rates three times this year.

This week’s Fed’s Beige Book said that labor markets are getting “tight.” That’s econo-talk for “workers want more money.” They may get it. The initial claims report came within a whisker of touching its lowest point since the Nixon administration. Plus, last Friday, the Census Bureau released a decent retail-sales report for December. On Wednesday, Janet Yellen said the economy is close to full employment.

I prefer to listen to the market’s opinion over that of economists, and I’m pleased to see the bond market pull back some. It shouldn’t be too easy for bond investors to outpace stock investors. The bond folks need to be kept on their toes. The 10-year yield got up to 2.5% this week. That’s about double the yield from six months ago. This is part of an ongoing rotation as money leaves safe assets and is gradually finding a home in riskier ones. That could be a major theme this year.

Now let’s look at our first Buy List earnings report for Q4.

Signature Bank Earned $2.11 Per Share for Q4

On Thursday, before the opening bell, Signature Bank (SBNY) reported Q4 earnings of $2.11 per share. That was two cents more than Wall Street’s consensus. Overall, this was another good quarter for Signature.

For the year, the bank earned $7.37 per share. That was only 10 cents more than 2015’s total, but remember they took a 70-cent charge in Q3 related to their medallion loans. Still, they were to top 2015’s result, which made 2016 their ninth record year in a row. The numbers for last year were pretty impressive. Total deposits grew 19% on the year. The key stat I like to watch is net interest margin, and that came in at 3.30%. That’s quite good.

I was also pleased to see Signature improve its fiscal condition this year by raising money from the capital markets. They had a common stock offering that brought in $320 million, plus a debt offering that took in $260 million.

Signature Bank Chairman of the Board Scott A. Shay, noted: “Signature Bank has produced yet another record year of earnings and solid financial performance. We are proud that — even from the depths of the financial crisis — we maintained a rapid growth pace while remaining a pillar of strength for our clients during those uncertain times.

“As the Bank continues to grow, we retain our strong discipline and follow the hedgehog theory of business – doing a few things, but doing each of them very well. In our case, that means maintaining our unrelenting commitment to depositor safety and service and conservative lending posture. We look forward to the New Year and to embracing many opportunities as we have built a platform poised to serve an expanding roster of clients,” Shay concluded.

Shares of SBNY weren’t doing much until the election. Then, out of the blue, the stock jumped 21% in four days. It’s always interesting how stocks can suddenly rally right about when you’ve given them up for dead. Once SBNY got to $150 per share, the rally started to peter out, and that’s about where the stock is today. I continue to rate Signature a buy up to $165 per share.

Next Week’s Buy List Earnings Reports

Stryker (SYK) is due to report its Q4 earnings on Tuesday, January 24. The orthopedics company had a good earnings report in October. In fact, they felt confident enough to raise the low-end of their full-year guidance by five cents per share. Stryker now expects 2016 earnings to range between $5.75 and $5.80 per share. That translates to Q4 results of $1.73 to $1.78 per share.

I’ll be curious to hear their forecast for 2017. Wall Street expects $6.39 per share. I suspect Stryker will offer conservative guidance.

Just a reminder that one year ago, Stryker said to expect 2016 earnings of $5.50 and $5.70 per share, and they’ll clear that with room to spare. This is why we like high-quality stocks. Here’s the annual EPS trend for Stryker: $2.95, $3.33, $3.72, $4.07, $4.23, $4.73, $5.12, and $5.75 to $5.80 for last year. That’s very impressive.

On Tuesday of this week, Alliance Data Systems (ADS) said it stands by its 2016 FY forecast of $16.90 per share in core earnings on revenue of $7.2 billion. That translates to Q4 guidance of $1.9 billion in revenue and core EPS of $4.64. My numbers say that sounds about right. ADS will report its earnings on Thursday, January 26.

CR Bard (BCR) has enjoyed a few upgrades recently from Wall Street. I started to get very bullish on this stock during the fall. On CNBC, they asked me for a candidate to beat earnings for Q3, and I said, CR Bard. The company gave guidance of $2.51 to $2.55 per share, and I said that was too low. I was right. Bard made $2.64 per share, but the stock didn’t start to rally until last month.

Bard also increased their 2016 EPS range to $10.23 and $10.28 per share. That implies Q4 earnings of $2.70 to $2.75 per share. Keep an eye on my $230 Buy Below price. Don’t chase BCR. I’ll raise my Buy Below if the numbers are strong.

Microsoft (MSFT) also reports on Thursday. Not much to add about the software giant. The company has been churning out very good earnings. They beat the Street three months ago by eight cents per share. The consensus on Wall Street is for 78 cents per share. The stock has had a very good run over the last six months.

Sherwin-Williams (SHW) is one of our new stocks this year. The company gave a Q4 range of $2.13 to $2.23 per share; Wall Street expects $2.21.

Here’s an earnings calendar for our Buy List stocks for this earnings season.

Company Ticker Date Estimate  
Signature Bank SBNY 19-Jan $2.09  
Stryker SYK 24-Jan $1.76  
Alliance Data Systems ADS 26-Jan $4.66  
CR Bard BCR 26-Jan $2.74  
Microsoft MSFT 26-Jan $0.78  
Sherwin-Williams SHW 26-Jan $2.21  
Aflac AFL 31-Jan $1.64  
Danaher DHR 31-Jan $1.03  
Ingredion INGR 31-Jan $1.64  
Snap-On SNA 2-Feb $2.41  
Cognizant Technology CTSH 6-Feb $0.86  
Intercontinental Exchange ICE 7-Feb $0.69  
Axalta Coating Systems AXTA 8-Feb $0.29  
Fiserv FISV 8-Feb $1.16  
Cerner CERN 9-Feb $0.61  
Express Scripts ESRX 14-Feb $1.87  
Wabtec WAB 16-Feb $0.93  
Moody’s MCO 17-Feb $1.13  
Continental Building Products CBPX 20-Feb $0.27  
Cinemark CNK 22-Feb $0.42

Buy List Updates

Good news for Moody’s (MCO). The credit-ratings agency has agreed to pay $864 million to settle with the government over its ratings leading up to the financial crisis. The agreement calls for Moody’s to pay $437.5 million to DOJ and $426.3 million to the states. The news helped the stock bounce above $100 per share, despite being downgraded by UBS and Barclays last week.

Barclays struck again. This time, they downgraded Cerner (CERN). Interestingly, Cerner was one of our worst-performing stocks last year, and it’s our best so far this year. Weird how that happens! Earnings are due out on February 9.

SunTrust initiated coverage on HEICO (HEI) with a buy rating and a price target of $85. Also, Institutional Investors named HEICO’s CEO, Laurans Mendelson, the best CEO in defense/aerospace.

Deutsche Bank initiated coverage on Danaher (DHR) with a Buy rating. They gave the stock a price target of $88 per share.

That’s all for now. The news next week will probably be dominated by earnings news, but there will be some key economic reports. The most important will be the first look at Q4 GDP. Growth for Q3 was 3.5%, but we’ve had a lot of difficulty getting two good quarters back to back. Let’s see if we can do it this time. 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