#Park Geun-hye jailed, #Zuma fires cabinet, bulldozer theme park

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY AND OVER THE WEEKEND

The EU shares inflation data. Economists expect the annual rate of inflation for the euro zone fell this month. Last month it surged to a four-year high, prompting calls for the European Central Bank to scale back stimulus measures it has in place—like negative interest rates and a $2.5 trillion bond-buying program—to counter the threat of deflation. Those calls could quiet down.

Mike Flynn’s request for immunity. Trump’s former national security adviser “has a story to tell” investigators regarding possible Russian meddling in the US election, his lawyer said, but wants protection in the current “witch-hunt environment.” Last month Flynn resigned over misleading statements he made about communications with a Russian official.

Elections in Ecuador and Serbia. Ecuador will elect a new president on Sunday as Rafael Correa leaves office. His successorwill get a say in the fate of WikiLeaks founder Julian Assange, currently holed up in Ecuador’s London embassy. Serbia also has a presidential election on Sunday; prime minister Aleksandar Vucic is the favorite to win.

Japan officially recognizes bitcoin. New legislation that legitimizes digital currencies goes into effect on Saturday. But the country’s financial regulator says bitcoin is not a currency, leaving companies and bitcoin fans in the dark.

WHILE YOU WERE SLEEPING

South Korea issued an arrest warrant for its impeached president. Park Geun-hye was put behind bars and will be detained for up to 20 days as prosecutors investigate allegations of abuse of power, accepting bribes, and leaking information. She’s the third Korean president to be jailed. A May 9 presidential election will determine her replacement.

The inventor of the Oculus Rift VR headset left Facebook.Palmer Luckey co-founded Oculus and helped kickstart a wave of virtual-reality gaming that is only just being realized. With CEO Mark Zuckerberg convinced the future of communication is immersive, Facebook spent $2 billion three years ago acquiring Luckey’s startup.

Jacob Zuma sacked finance minister Pravin Gordhan and over a dozen others. The South African president’s abrupt reshuffle led to the rand plunging against the US dollar. Gordhan’s steady stewardship of the economy had reassured investors rattled by the corruption claims and general mismanagement associated with Zuma’s beleaguered leadership.

Stranded Malaysians returned from North Korea. Nine Malaysians had been effectively held hostage in a diplomatic standoff between the countries, after the assassination of Kim Jong-un’s estranged brother in Kuala Lumpur. In exchange for their release, Malaysia delivered the body of Kim Jong-nam to North Korean authorities.

QUARTZ OBSESSION INTERLUDE

Christopher Groskopf and Dan Kopf on the geography of US wages: “As the Rust Belt stagnated, coastal metropolises thrived. As Appalachia sputtered, shale country boomed. As Southern manufacturing centers shut their doors, neighboring research hubs opened theirs.” Read more here.

MATTERS OF DEBATE

Lyft might be more “woke” than Uber, but that’s a low bar. The smaller ride-hailing service has played a much savvier PR game.

Congress is about to learn that tax cuts are easy, but reform is hard. Reshaping the system requires bipartisanship, which is in short supply.

Ivanka Trump is more qualified than her husband. But she still got a lesser title in the White House.

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SURPRISING DISCOVERIES

Madeira has the world’s ugliest statue of Cristiano Ronaldo. Its creator said it “was a matter of taste.”

Patients are going under the knife with their eyes open.Advancements in anesthetics makes it possible for surgical patients to stay awake (paywall).

A bulldozer theme park could solve the US construction worker shortage. Diggerland lets kids operate real backhoes.

Donald Trump’s tweets are being set ablaze by a robot. David Neevel’s contraption prints and burns every @realDonaldTrump message, then tweets him the evidence.

The governor of Maine pardoned a dog. Dakota the husky will no longer be euthanized for killing a smaller dog in 2016.

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

#Bezos passes #Buffett, used-rocket launch, finger gun legality

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

SpaceX launches its first flight-proven (read: gently used) rocket. The booster will carry a satellite into orbit from Cape Canaveral, Florida, and then return to earth, in a bid to drastically cut the price of space flight. The launch window opens at about 6:30pm ET (11:30pm BST).

A South Korean court considers an arrest warrant for the former president. Park Geun-hye could face more than 10 years in jail if convicted of receiving bribes from bosses of big conglomerates in exchange for favors. She’d have a slightly larger cell than others, at least.

Rex Tillerson visits Turkey. Relations between the US and its NATO ally are tense over the status of Fethullah Gulen, a cleric living in Pennsylvania who is accused of backing last year’s attempted coup in Turkey. The US secretary of state is bringing along two pool reporters, doubling the number he brought on his recent trip to East Asia.

WHILE YOU WERE SLEEPING

EU and Chinese leaders reaffirmed climate change pledges.Leaders vowed to honor the Paris Agreement in the wake of Donald Trump’s order to remove Obama-era environmental regulations. China, which has long faced pressure from the US to limit fossil fuels, is now more likely to take the lead.

A judge in Hawaii extended the nationwide halt on Trump’s travel ban… US district judge Derrick Watson placed a stronger hold on the US president’s plan to temporarily suspend immigration from six majority-Muslim countries. He had initially limited the hold, which he issued on March 15, to two weeks. The case will likely end up in the Supreme Court.

…And Seattle sued the Trump administration over its threat to “sanctuary cities.” Mayor Ed Murray contends Trump’s order to withhold federal funds from such cities amounts to unconstitutional federal coercion. He wants the courts to declare that local police—who need the trust of communities—cannot be forced into federal immigration activities.

Jeff Bezos became the world’s second-richest man. The Amazon founder has a net worth of $75.6 billion on the Bloomberg Billionaires Index, passing Warren Buffett. Amazon’s already rising stock surged after it announced this week the acquisition of Dubai-based online retailer Souq.com. Barclays expects the company’s market cap to reach $1 trillion.

QUARTZ OBSESSION INTERLUDE

Tim Fernholz on why cheap rockets could be disruptive in a bad way: “There’s a lot of money and mind-power going toward getting into space more easily. This episode of disruption has ignited a firestorm of funding for private space companies whose ideas for doing business in space have suddenly become more feasible.”Read more here.

MARKETS HAIKU

Article fifty
is invoked. JP Morgan
is going shopping

MATTERS OF DEBATE

Offices need boundaries. The Thinx scandal shows the dangers of a playful workplace culture.

Food has replaced music in social importance. Know-it-all foodies are ascendent, rock’n roll not so much.

The robots are coming for Wall Street’s jobs. BlackRock is replacing about 15% of its stock pickers with algorithms and mathematical models (paywall).

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SURPRISING DISCOVERIES

“Finger guns” count as weapons in court. A New York man was convicted of armed robbery for pretending to have a firearm under his sweatshirt.

Smiley emojis don’t denote friendliness in China. Some happy symbols have been repurposed to convey contempt.

The grandfather of marijuana research has never smoked a joint. Raphael Mechoulam was the first scientist to isolate THC, the plant’s psychoactive component.

Domino’s is rolling out pizza-delivery drones. A pilot program using wheeled robots from Starship Technologies will launch soon in some German and Dutch cities.

Feature phones are making a comeback in Africa. An economic downturn has curbed the growth of internet-enabled smartphones.

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

Article 50 day, #Westinghouse bankruptcy, rivers that are people

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

Theresa May invokes Article 50. The British prime minister is expected to trigger the start of the two-year process of negotiating the UK’s exit from the European Union, by citing an exit clause in the EU founding treaty.

Toshiba’s Westinghouse unit could declare bankruptcy. The nuclear power company has struggled with cost overruns, badly damaging its Japanese parent firm. Toshiba’s future losses will be limited if Westinghouse files for bankruptcy, a move that is imminentaccording to Reuters.

Samsung launches a new smartphone. The Galaxy S8 will be the company’s first significant release since its flammable Galaxy Note 7 debacle. One bad omen: Yesterday a Samsung retail outlet in Singapore caught fire.

WHILE YOU WERE SLEEPING

Trump rolled back Obama’s environmental regulations… The US president signed an executive order to dismantle rules that curb power plants’ greenhouse gas emissions. The regulations—currently being contested in court—would have prevented thousands of premature deaths a year.

…And US lawmakers voted to repeal Obama-era internet privacy rules. Slated to go into effect later this year, the rules required broadband providers—but not the likes of Google and Facebook—to get permission before sharing data on a user’s online activities. Trump is expected to sign the bill into law, in a win for ISPslike Comcast and AT&T.

Wells Fargo had a bad day. A federal regulator gave the US bank a failing score (paywall) when it comes to providing lending in low-income neighborhoods. On the same day (March 28) the bank agreed to pay $110 million to settle a class-action lawsuit over its creation of unauthorized customer accounts—a scandal that’s still scaring off potential consumers.

The US admitted its likely role in a deadly Mosul bombing. “My initial assessment is that we probably had a role in these casualties,”said the top US commander in Iraq, referencing airstrikes this month that killed up to 200 civilians. Iraqi officials told Mosul residents not to leave the areas about to be hit, according to Amnesty International.

QUARTZ OBSESSION INTERLUDE

Dan Kopf on the compelling evidence that robots are taking jobs and cutting wages: “A central question about robots is whether they replace human workers or augment them by boosting productivity. Acemoglu and Restrepo’s research is a powerful piece of evidence on the side of replacement.” Read more here.

MARKETS HAIKU

After rainy days
Investors peek out the door,
They like what they see

MATTERS OF DEBATE

The FBI’s facial-recognition database has gone too far. Nearly half of Americans are in the system, and its algorithms are deeply flawed.

Facebook is proof that originality is overrated. Its last five major products were copied from Snapchat, Apple, Twitch, Slack, and Snapchat once again.

Israel’s next war is inevitable. The country is taking deterrence too far with its constant bombing of Hezbollah (paywall).

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SURPRISING DISCOVERIES

Richard Branson wants Kiwi farmers to raise weed, not cows. It would be more profitable and easier on the environment.

A Coca-Cola plant in Northern Ireland was shut down by feces. Police were called in after it clogged the plant’s machinery.

An Airbnb host illegally rented out her Trump Tower apartment. New York City slapped her with a $1,000 fine.

Three rivers are now legally people. One is in New Zealand and two are in India, where they will be treated as minors in court.

Amazon giveth as Barnes & Noble taketh away. For every bookstore that B&N closes this year, Amazon is opening a high-tech brick-and-mortar replacement.

Our best wishes for a productive day. Please send any news, comments, unoriginal app ideas, and untainted cokes 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—#Obamacare lives, #IBM’s remote work shift, insect detectives

Good morning, Quartz readers!

It is always easier to criticize something than it is to fix it.

US president Donald Trump’s signature campaign promise, the complete repeal and replacement of Obamacare, is now dead, at least for the foreseeable future, after it didn’t get enough votes in the US House of Representatives, despite a Republican majority.

Trump, like other populist leaders, promised to do away with“business-as-usual” politics. But as revisions of the health-care bill were kicked between Capitol Hill and the White House, it became clear that this was very much business as usual—a highly public display of the traditional arm-twisting and favor-granting that had led disgusted US voters to vote for Trump. In an attempt to get the needed votes, the White House took a bill already deeply unpopular with voters and heavily criticized by the medical profession and made it even more draconian, stripping away some of the most basic health-insurance guarantees.

Trump pledged before the US election that he would quickly craft “much better health care, at a much less expensive cost.” He alsopromised “decades of failure in Washington, and decades of special interest dealing, must come to an end.” Populists enjoy making such sweeping promises, and voters like them too, because they are easier to digest than the equivocations of mainstream politicians and the nitpicking of policy wonks. But they can also become yokes around a leader’s neck.

The Republicans’ mistake was to spend so many years demonizing Obamacare that repealing it became an end in itself, which had to be achieved at any cost. It turned out that “any cost” was not, in fact, a feasible price to pay.

“We were a ten-year opposition party, where being against things was easy to do,” a chastened Paul Ryan, the House speaker, admitted afterward. “Doing big things is hard.” Welcome to reality.—Heather Timmons and Gideon Lichfield

SPONSOR CONTENT BY THE GOVERNMENT OF JAPAN

Multinational corporations are investing in the world’s third largest economy. With a lower corporate tax rate and revamped visa requirements, Japan is increasingly a destination for those with a growth mindset looking to tap into global business opportunities.

SOME THINGS ON QUARTZ WE ESPECIALLY LIKED

IBM’s office head space. In 2009, 40% of IBM’s nearly 400,000 global employees worked from home. Now the remote-work pioneer has changed its mind about the value of in-person teamwork, asking some employees to move to cities where they can work side by side. Sarah Kessler examines IBM’s shift, part of a transformation effort amid 19 consecutive quarters of declining revenue.

The science behind the meatless burger. The Impossible Burger is 100% made from plants, but it tastes, smells, and bleeds like the real thing. The secret ingredient? Neuroscience. Hannah Yi visits the lab where flavor scientists are creating meat that’s indistinguishable from an actual beef patty—part of the hunt for a perfect meat alternative.

Don’t be relieved by the Dutch elections. While the global media heralded the election results as a repudiation of xenophobia, the “quarterfinals” of European politics actually proved just hownormalized populism has become in the Netherlands. As Christiaan Paauwee notes, in his country and elsewhere, the political mainstream has sold its soul. And that does not bode well for the rest of Europe.

Uber’s biggest selling point is under threat. The world’s most valuable startup often offers an unbeatable price in the nearly 600 cities where it operates. It partly achieved that by skirting local taxes, offering plenty of freebies, and paying drivers as little as possible. As Alison Griswold and Akshat Rathi report, these strategies have run their course: Regulators are forcing Uber to cough up avoided taxes, huge losses are bringing freebies to an end, and it can’t pay its already angry drivers any less.

China jumps into athletic wear. With 415 million millennials, a booming middle class, government investment in sports, and a rapidly growing consumer appetite for sportswear, China is starting to look increasingly attractive to athletic-wear companies. Marc Bain explores how sportswear companies are competing in this arena, as more and more Chinese look to sport for fun.

FIVE THINGS ELSEWHERE THAT MADE US SMARTER

One country, one system? Hong Kong is in a state of “permanent crisis,” and its people fear a head-on collision with the mainland’s masters in Beijing will cause irreparable damage to one of Asia’s freest and most cosmopolitan cities. Howard W. French describes for the Guardian Hong Kong’s increased political radicalization, fuelled by rising mainland wealth, an ascendent Chinese premier, and stalled social mobility.

When the first hundred days go wrong. A new president who misses the traditional honeymoon due to scandal, incompetence, and a lack of discipline will find that early mistakes haunt the rest of his presidency. But we’re talking about Bill Clinton, not Donald Trump, writes David Graham in the Atlantic—which means that despite everything, there is a blueprint for Trump to salvage his stumbling administration.

Corporatized inequality. Stanford economist Nicholas Bloom argues in Harvard Business Review the extent to which the gaps between companies have become drivers of income inequality in the US. This “firm inequality,” driven by outsourcing, an increasing reliance on technology, and a “winner take most” competition, has created a stark division between employees who are treated well and those who aren’t.

ISIL isn’t Iraq’s only nightmare. While the West has largely moved on, the fight against the extremist group in Iraq continues to rage with an extremely bloody and complicated intensity. Ramita Navai spent several weeks on the ground reporting on sectarian power dynamics and describes to Frontline her fear that the entire region is a tinder box, waiting to explode again.

Scientists as therapists. Entomologists are used to studying insects so they can help clients with pest control. But occasionally, people will come to their offices complaining of bites from insects that aren’t real—the product of a mental-health condition called Ekbom syndrome, or delusional parasitosis. For STAT, Eric Boodman explores how these scientists navigate the moral waters of helping clients find the treatment they need, not necessarily that they want.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, meatless burger recipes, and Chinese athleisure to hi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone andAndroid.

Hong Kong “election,” premium #Twitter, private-jet paint

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY AND OVER THE WEEKEND

US lawmakers vote on health-care legislation, probably. A vote by the House of Representatives to repeal and replace Obamacare, slated for yesterday, was delayed because not enough Republicans backed the replacement bill pushed by Trump. The US presidentthen threatened that Obamacare would stay unless the vote was held today. House Speaker Paul Ryan said it would be.

Hong Kong selects a new leader. On Sunday, the 1,194 members of a Beijing-sanctioned “election committee” will choose the semi-autonomous territory’s new chief executive. Carrie Lam, until recently the city’s second-ranked official, is expected to win. Her strongest opponent, financial secretary John Tsang, is far more popular and supported by pro-democracy parties.

The EU’s bummer of a 60th birthday party… Leaders will meet on Saturday in Rome under the specter of Brexit. Disgruntled members Greece and Poland are threatening not to sign a declaration designed to promote unity and solidarity.

…And an anti-Brexit march in London. On Saturday thousands of demonstrators will march from Park Lane to Parliament Square in London, demanding that Britain remain in the European Union. They argue that Brexit is not inevitable and people have “the right to change their minds.”

SPONSOR CONTENT BY THE GOVERNMENT OF JAPAN

Germany and Japan are teaming up to create new tech standards. Before touring Germany’s largest technology trade fair, Chancellor Merkel and Prime Minister Abe signed the Hannover Declaration, which promises to establish common standards for IoT and artificial intelligence. The agreement will be an opportunity for both countries to play a key role in tech innovation moving forward.

WHILE YOU WERE SLEEPING

A group of nations called on Venezuela to return to democracy. In an unprecedented show of unity, the US, Canada, and 12 Latin American countries collectively urged the government of president Nicolás Maduro to release political prisoners, hold elections, and take other measures to bring back “democratic normality.” Maduro has led a broad crackdown against political opposition.

Twitter said it might offer a subscription-based premium service. It’s surveying some users to gauge interest in such an offering, which would be aimed at business and power users. Twitter has struggled to grow its user base and faces a decline in advertising revenue, currently its only significant source of income.

US authorities said a Trump hotel in Washington doesn’t violate conflict-of-interest rules. The luxury hotel is housed in the historic Old Post Office near the White House, but elected officials may not take part in a lease of federal property. The agency said there was no violation because Donald Trump Jr., the president’s eldest son, now controls the company that runs the property.

More than 250 migrants were feared to have drowned in the Mediterranean. Two dinghies sank off Libya’s coast, according to Italy’s coast guard and a Spanish aid organization. With the route between Turkey and Greece effectively shut down, more migrants are trying to reach Europe from Libya via Italy.

QUARTZ OBSESSION INTERLUDE

Ilaria Maria Sala and Isabella Steger on the “election” in Hong Kong: “Campaigning has become part of Hong Kong’s political culture now, there is an expectation that you have to win the hearts and minds of the people,” said one pro-democracy lawmaker. “But in the end, it cannot sway anything. The system is rubbish, the winner is predetermined.” Read more here.

MARKETS HAIKU

The cracks are spreading
In the Trump trade’s foundation
Watch out for debris.

MATTERS OF DEBATE

Monogamy is based on flawed science. Bias has been getting in the way of important research.

The next generation of feminists will feel even more frustrated.Governments worldwide should get rid of dated legislation that keeps women out of particular occupations.

The gig economy glorifies workers’ helplessness. Companies like Uber and Lyft are touting inspiration stories of contractors whowork themselves to the bone.

QUARTZ ANNOUNCEMENT

Get inspired for the weekend with Quartzy. Each weekly edition of our lifestyle newsletter is comprised of intelligent, heartfelt reflections on the current cultural moment, expert but attainable guidance on the fashion and art scene, and interesting and actionable insider tips on events, products, and recipes.

SURPRISING DISCOVERIES

The $5 male fertility test is coming. Users inject a tiny sperm sample into a 3D-printed smartphone case.

The ultra-rich paint their jets in “Matterhorn White.” The understated tone “evokes a snowy morning,” at up to $350,000 per coat.

At least one Chinese shoe manufacturer is moving to the US.Fed up with skyrocketing wages, Dongguan Winwin is moving closer to its most lucrative customers (paywall).

Reality TV contestants emerged from a year’s seclusion to find their show canceled. The UK show Eden in the rugged Scottish Highlands was pulled from the airwaves months ago.

An eco-friendly brewery in San Diego made beer from purified sewage. Stone Brewing’s Full Circle pale ale uses the same water to which it will return.

Our best wishes for a productive day. Please send any news, comments, sewer beer, and $5 fertility tests 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 – March 24, 2017

CWS Market Review

March 24, 2017
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.” – Jack Bogle

The streak finally came to an end. On Tuesday, the stock market did something it hadn’t done in the previous 109 trading days. It closed down by more than 1%.

This was the longest such hot streak in more than 20 years, and it was close to becoming the longest in over 50 years. If we look more closely, the recent streak was even more impressive, because there were only two days in which the S&P 500 fell more than 0.7%. Of course, we have to remember that not that long ago, a 1% drop was barely a scratch. In 2008, it happened 75 times.

As we know well, Wall Street has a notoriously poor memory.

So, is this the beginning of the end? Have the walls come crashing down? Eh…probably not. Bear in mind that the Trump Rally has endured four North Korean missile launches, two Fed rate hikes, and of course, President Trump himself. Through all that, it’s quietly powered ahead.

But this may be the end of the Trump Trade. It’s a little more complicated than has often been portrayed. I’ll explain what it all means. I’ll also cover some of the recent stories impacting our Buy List stocks. But first, let’s look at the fading Trump Trade.

The Death of the Trump Trade

While there’s been a lot of talk of the Trump Trade, properly speaking, there were two separate trades in recent months.

The first Trump Trade came immediately after the election. That’s when stocks soared. The stock rally was matched by a big downturn for bonds. Within a few days, the yield on the 10-year Treasury jumped from around 1.8% to close to 2.3%. That’s an unusually large move for such a short period of time. Combine that with the fact that the 10-year yield had been creeping higher since the summer, and you can see how dramatically the interest-rate outlook had changed.

Within the stock sectors, the small-caps saw the biggest gains. On November 3, the Thursday before the election, the Russell 2000 stood at 1,156.89. By November 25, the index had risen to 1,347.20. That’s a jump of more than 16% in just over three weeks. That’s a huge leap for an entire size category.

Among stock sectors, the big winners were industrials and financials. The move in the latter was astounding. On our Buy List, shares of Signature Bank (SBNY) soared 21% in four days. Prior to the election, Goldman Sachs warned of dire consequences if Trump were to be elected. That outcome, apparently, didn’t include a massive rally in shares of Goldman. Shares of GS gained more than 60% in the second half of 2016. (The bank’s former COO, Gary Cohn, is now President Trump’s top economic advisor.)

Here’s what was happening. This first stage of the Trump Rally was based on the idea of a markedly improving economy. Traders thought policies in Washington would shift towards fiscal stimulus. That’s why the cyclicals stocks led the way. The yield curve widened, and defensive areas like utilities and staples didn’t fare so well.

But by early December, that stage of the rally had petered out. By December 13, the S&P 500 had reached a near-term peak of 2,271.72. The stock market was pretty flat for a few weeks after that. By Inauguration Day, the S&P 500 closed at 2,271.31.

Stage Two of the Trump rally really got going in February. This second stage was led by large-cap tech stocks. Unlike stage one, this time the long end of the bond market was relatively stable. The yield on the 10-year bond peaked around mid-December and has mostly been in a trading range since (between 2.3 and 2.6%).

Instead, the interest-rate action has been at the short end. The second stage of the Trump Rally happened at the same time there was a perceived need for higher interest rates. This is when we saw yields at the short end of the yield curve touch levels they hadn’t seen in seven or eight years. This move in the market foreshadowed last week’s Fed rate hike. In fact, it also caused traders to think more hikes were on the way.

But now, that thesis is starting to show holes. For one, we can’t help noticing the price of oil. One month ago, West Texas Crude got as high as $54.45 per barrel. Everything was going right for OPEC. The production cuts were holding. Finally! But the latest numbers show that there’s still an oil glut. In fact, it’s a big one, and the oil markets are taking notice. At one point, the price of oil fell ten times in eleven days. This week, West Texas Crude came close to falling below $47 per barrel.

Goldman Sachs noted that OPEC’s production cut has had an unintentional side effect—it has spurred the biggest productions in history. It’s hard to say that the Fed needs to raise interest rates to combat inflation when the price of oil is dropping.

Both parts of the Trump Rally have seen rising share prices and low volatility. If I had to pinpoint a single day when the Trump Rally peaked, it would probably be the day after President Trump’s congressional address. Traders loved the speech. The Dow shot up 300 points the following day.

Since then, however, the market has had a tough time getting its footing, and some cracks are starting to show. For example, 217 stocks in the S&P 500 are currently below their 50-day moving average. The overall index is just 0.72% above its 50-DMA. There are now 171 stocks in the index that are more than 10% below their 52-week high, which is the traditional definition of a market correction. In other words, more than one-third of the index is effectively in a correction already.

On Tuesday, the S&P 500 lost 1.24%. Ryan Detrick notes that the average worst day of the year is three times worse than Tuesday’s loss, which is our current worst day of the year. It wasn’t bad, but it was different from the trend, and that’s what catches our attention. The Nasdaq Composite, actually, hit a new all-time high on Tuesday, which shows the impact of large-cap tech.

So stage one of the Trump Rally (November and December) was about a resurgent economy. Stage two (February) was about taking on more risk due to higher rates.

What to do now: I’m still holding on to my view that stocks are due for a modest pullback. It may have already started, since the S&P 500 has now gone three weeks without making a new high. But let me caution you not to worry. I’m not expecting a major decline.

Make sure that you’re well diversified and look for decent dividends. Microsoft (MSFT), for example, currently yields 2.4%. Cinemark (CNK) yields close to 2.7%. I think there’s a very good chance that we’ll be looking at a lot of bargains in the spring. Now let’s look at some news affecting our Buy List stocks.

Buy List Updates

Sherwin-Williams (SHW) said the acquisition of Valspar will take longer than expected. It doesn’t seem to be a major problem. They have to work through some divestitures. Originally, Sherwin thought the deal would close by April. Now they’re thinking it will be June. Going into the deal, SHW knew they were going to have to sell off some units to appease regulators. They just didn’t know what. Don’t let this news worry you. Sherwin-Williams is doing fine.

HEICO (HEI) announced a 5-for-4 stock split. This means investors will get an extra share for every four they currently own. The share price will be expected to fall about 20%. The semi-annual dividend will stay at nine cents per share, so that’s effectively a 25% increase.

I’m never sure why companies like to do small splits like this. If I had my way, only 2-for-1 splits or higher would be allowed, and the share price needs to be over $100. This will be HEICO’s 15th stock split since 1995. The split is payable on April 18 to shareholders of record as of April 7. Cash will be paid in lieu of fractional shares. If you had invested $100,000 in HEICO in 1990, today it would be worth $18.7 million.

That’s all for now. Next week is the final week of the first quarter. On Thursday, the government will update the Q4 GDP report for a second time. Before that, on Tuesday, we’ll get the report on consumer confidence for March. Then on Friday, we’ll get the reports on personal income and spending for February. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Image
Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 eight times in the last ten years. This email was sent by Eddy Elfenbein through Crossing Wall Street.
2223 Ontario Road NW, Washington, DC 20009, USA

#Japan scandal, advertisers leaving #YouTube, freeze-dried tardigrades

Good morning, Quartz readers!

WHAT TO WATCH FOR TODAY

A tense China-South Korea football match. Authorities are stepping up security for the World Cup qualifier in Changsha, China, providing police escorts for visiting South Korean fans. The two countries are in a heated standoff over the deployment of a US antimissile system in South Korea.

Brazil launches its first defense and communications satellite.It will beam broadband internet to remote parts of the country, while giving military and government personnel secure communications. Embraer subsidiary Visiona is behind the project, which will launch Thursday night from French Guiana.

Congress votes on Donald Trump’s health-care bill. Democrats and a range of Republicans have all come out against the pivotal legislation, which is designed to replace Obamacare. With 26 GOP representatives publicly refusing to vote “yes,” the bill seems unlikely to pass.

WHILE YOU WERE SLEEPING

CNN dropped a bombshell. The network said it’s been told by unnamed US officials that the FBI has evidence that Trump associates “communicated with suspected Russian operatives to possibly coordinate the release of information damaging to Hillary Clinton’s campaign.” It warned the information is not conclusive.

Trump’s oldest son criticized London’s mayor hours after a terror attack. On Twitter he referenced an out-of-context quote(paywall) by Sadiq Khan, the city’s first Muslim mayor, from September. Yesterday (March 22) a terrorist killed four people and injured dozens in Westminster, London, before being shot and killed by security forces.

Major companies like Verizon and GSK pulled ads from YouTube. The fifth-largest US advertiser and world’s sixth-largest pharmaceutical company are among hundreds of brands protesting their ads appearing alongside extremist content.

A political scandal deepened in Japan. A school principal testified that Akie Abe, the prime minister’s wife, handed him an envelope with 1 million yen ($9,000) when she visited a kindergarten run by nationalist group Moritomo Gakuen. Parliament has been questioninghow the group, which has students bow to portraits of the emperor, was able to buy publicly owned land for a fraction of its market value.

QUARTZ OBSESSION INTERLUDE

Dave Gershgorn on the crime-fighting software that scours itself for bias. “Predictive policing is being adopted across the country—despite being riddled with issues. These algorithms have been shown to disproportionately target minorities, and private companies won’t reveal how their software reached those conclusions.” Read more here.

MARKETS HAIKU

Months without drama
on Wall Street. Then came a plunge.
It’s steady once more

MATTERS OF DEBATE

Don’t start your own business—manage someone else’s.Business managers rank higher than founders on happiness and job satisfaction.

Young geeks will save us from political attacks on science. A leading astronomer notes that being a nerd is now a compliment.

Donald Trump has a credibility problem. When his “Black Hawk Down” moment inevitably arrives, Americans won’t believe a word he says.

SURPRISING DISCOVERIES

Scientists figured out why tardigrades are indestructible. The microscopic creatures freeze-dry themselves in hostile conditions.

A pizza investment beat Silicon Valley. Since 2010, Domino’s shares have outperformed those of Apple, Facebook, Google, and Amazon.

Some nearby planets may be swapping life. Microbes may bejoyriding on meteorites between the seven worlds of the TRAPPIST-1 solar system.

The NBA is addicted to peanut butter and jelly sandwiches.Teams can’t live without the seductive combination of sugar, salt, protein, carbs—and superstition.

An Irish betting site has hired a manager for unlikely Trump bets. Will the president make it to Mount Rushmore or announce the existence of aliens? Paddy Power will quote you odds.

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