#Alphabet and #Amazon, #United pays up, cobalt hero

Good morning, Quartz readers!


The EU hosts a Brexit summit. Leaders from European Union member countries will come together Saturday to discuss Brexit practicalities, including what to do about passports (paywall) once the UK is no longer a member.

SpaceX launches a classified payload into orbit. Elon Musk’s reusable-rocket company could gain more government contracts if its Sunday launch for the National Reconnaissance Office—part of the US defense department—proves successful. (Psst, it’s probably a spy satellite.)

US lawmakers thwart a government shutdown. A vote is expected today for a bill that would fund government operations for one more week while a longer-term deal can be worked out.


Donald Trump warned that a “major, major conflict with North Korea” is possible. But the US president told Reuters he’d prefer a diplomatic solution to the problem presented by the rogue nation’s weapons development programs. Meanwhile his secretary of state Rex Tillerson said direct talks with Pyongyang could happen—as long as the agenda was denuclearizing the Korean peninsula.

Alphabet and Amazon notched stellar first quarters. A controversy over YouTube ad placement failed to dent Google’s parent company, which saw revenue jump 22% from a year ago. Amazon’s net profit rose 41% from a year ago, although the engine of that growth, cloud computing, is slowing down. (It was a big day for corporate earnings, so here’s an emoji cheat sheet.)

Re-accommodation-gate ended as United Airlines paid up. The company settled a lawsuit with mistreated passenger David Dao for an undisclosed sum. It also announced it would offer up to $10,000 in compensation to passengers who take another flight when the airline overbooks.

Uber’s autonomous-driving chief stepped aside. Anthony Levandowski is recusing himself from all work on self-driving cars amid a legal battle between Uber and Waymo, the Alphabet spinoff where he once worked. Waymo alleges he stole nearly 10 gigabytes of “highly confidential” data before leaving to found a driverless trucking startup that Uber then acquired.


Ephrat Livni on an insanely detailed map of US racial diversity.“The free map tracks racial diversity spatio-temporally by laying census data from 1990 to 2010 over detailed grids from NASA satellite maps… ‘People don’t realize that the United States is a diverse country but at the same time is still very segregated,’ says astrophysicist Tomasz Stepinski.” Read more here.


American gives / a raise. Wall Street sells its shares. / So much is made clear.


Trump’s tax cut is radical, but America can afford it. An investment in the US economy would be worth the increase in the national debt.

It’s time to hand science over to machines. AI can find relationships and correlations that are beyond the grasp of the human mind.

Japan’s most powerful political bargaining chip is its culture.Sushi and manga are two obvious examples of Japanese soft power.


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Asians spend seven times as much as Americans on tutoring their kids. Asian households devote about 15% of their income to supplemental education, compared to a mere 2% in the US.

Drug dealers are lacing heroin with an elephant tranquilizer.Carfentanil, 5,000 to 10,000 times stronger than morphine, is being blamed for a surge in fatal overdoses.

Khloe Kardashian is being sued for posting a picture of herself on Instagram. The photo was taken by a paparazzo, who claims the social media star did not have the proper rights.

Cobalt is the unlikely hero of 2017. The metal’s price has soared nearly 70%, more than any other commodity, due to demand for rechargeable batteries and electric cars.

Crowded subways are golden opportunities for online retail.Cramped commuters buy 45% more than those on uncrowded trains.

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


CWS Market Review – April 28, 2017

CWS Market Review

April 28, 2017

“It is remarkable how much long-term advantage people like us have gotten by trying to
be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger

What a dramatic week this has been for us! It started on Sunday evening when Becton, Dickinson, a former Buy List stock, said it’s buying out CR Bard for $24 billion! On Monday, shares of Bard jumped nearly 20%. It’s now our biggest gainer of the year.

Then on Monday afternoon, Express Scripts reported good earnings but said they’re losing their largest customer in Anthem. On Tuesday, shares of ESRX dropped 10.7%. But then Anthem said, “hold on, we haven’t made a final decision!”

And that’s not all. We got good earnings from stocks like Microsoft, Stryker and AFLAC. Wabtec beat earnings, and the shares rallied 6% in three days. Fiserv easily topped earnings, and the stock touched another all-time high.

This week, the Nasdaq Composite broke 6,000 for the first time ever, and the S&P 500 came very close to making a fresh all-time high. Thanks to CR Bard (and Becton!), our Buy List is now up nearly 9% for the year.

Get ready, because this is going to be an earnings-packed issue of CWS Market Review. I’ll cover the nine reports we had this week, and I’ll preview our final six reports for this earnings season. Let’s start with the great news from CR Bard.

Becton, Dickinson Buys CR Bard for $24 Billion

As soon as I learned the news that Becton, Dickinson (BDX) was buying out CR Bard (BCR), I sent you a brief alert on Sunday evening. Here are the details of the merger: BCR shareholders will get $222.93 per share in cash plus 0.5077 shares of BDX.

The deal has been approved unanimously by the boards of both companies. It’s expected to close in the fall of this year. I think it’s good that a large part of the deal is in cash. That means shares of BCR won’t be hurt so much by what happens to BDX between now when the exchange is made. Obviously, regulators have to sign off on the deal as well, but I don’t expect any major delays.

Bard also released its earnings report on Sunday evening. They had previously said they expected Q1 EPS between $2.60 and $2.66, and full-year EPS between $11.45 and $11.75. It turns out for Q1, they made $2.87 per share. They now expect full-year EPS between $11.65 and $11.90. For Q2, they’re expecting $2.75 to $2.85 per share. Wall Street had been expecting $2.87. You can see why BDX likes them!

What to do now? Nothing. Just keep holding on to BCR. I’m lifting my Buy Below to $330 per share. As of Thursday’s close, shares of Bard are going for 3.2% below the buyout price. That’s not unusual, since there’s always a possibility the deal could fall apart. It’s low but not zero.

For Buy List track record purposes, when the deal is completed, shares of BDX will replace the BCR position. Also, the cash portion will be assumed to buy shares of BDX at whatever price the shares are then going for. In other words, BDX will entirely replace BCR. This is how we’ve done previous mergers in the Buy List.

This is great news for us. Bard is one of those quiet stocks that keeps churning out great gains. Ironically, it was in last week’s CWS Market Review where I point out that we first added the stock to the Buy List in 2012 at $85.50 per share. Congratulations to all long-term holders of BCR!

The Soap Opera Between Express Scripts and Anthem

After the closing bell on Monday, Express Scripts (ESRX) released very good earnings. But that got lost in the bigger news. First, though, let’s look at the numbers. For Q1, Express earned $1.33 per share, a penny more than expectations.

Express also raised its full-year guidance. The previous range was $6.82 to $7.02 per share. The new range is $6.90 to $7.04 per share. For Q2, they’re looking for $1.70 to $1.74 per share. Wall Street was at $1.68 per share.

So…nothing to complain about? Not so fast.

In the earnings report, Express said they’re basically done with Anthem, their largest customer. Anthem has claimed that Express has been overcharging them, which Express has flatly denied. They’ve been trying to reach a deal, and I’ve assumed they would. There’s too much money at stake. But this week, Express told Anthem not to bother making them an offer. Dude! On Tuesday, ESRX dropped 10.7%.

Let me point out that we’re talking about what will happen in December 2019 when the deal between the two finally ends. It’s not like Express stormed out of the deal. On Wednesday, Anthem’s CEO surprised everyone when he said that no final decision has been reached. ESRX rallied 2% that day. I don’t know if Anthem is playing hardball, but it seems like an unusual way to get a deal.

For now, let’s watch what happens. I think there’s more drama to be had, but Express is fundamentally a sound company. This week, I’m lowering our Buy Below to $62 per share.

Tuesday: Stryker and Wabtec Beat Estimates

On Tuesday afternoon, Stryker (SYK) reported Q1 earnings of $1.48 per share. Previously, the orthopedics firm had told us to expect a range between $1.40 and $1.45 per share. Wall Street had been expecting $1.43 per share. This was a solid report.

“Our positive momentum continued in the first quarter, as we demonstrated our ongoing commitment to deliver organic sales growth at the high end of med-tech and leveraged earnings gains,” said Kevin A. Lobo, Chairman and Chief Executive Officer. “Our results were well balanced across business segments and geographies, and position us well for another strong year in 2017.”

For Q2, Stryker expects EPS between $1.48 and $1.52. Wall Street had been expecting $1.51 per share. Stryker also maintained its full-year forecast of $6.35 to $6.45 per share. I’m raising our Buy Below on Stryker to $140 per share.

Also on Tuesday, Wabtec (WAB) reported Q1 earnings of 84 cents per share. That beat Wall Street’s estimates by two cents per share. This was a nice rebound from the awful quarter they had for Q4. I should add that during the quarter, Wabtec completed its acquisition of Faiveley.

The freight-services company reiterated its full-year guidance numbers. They expect revenue of about $4.1 billion, and EPS between $3.95 and $4.15.

Raymond T. Betler, Wabtec’s president and chief executive officer, said: “Our first-quarter adjusted earnings were in line with expectations, and we expect improvement during the year. As we work to integrate Faiveley and our other recent acquisitions, we are managing our costs aggressively based on market conditions. We continue to invest in our balanced-growth strategies and expect to benefit from our diversified business model and rigorous application of the Wabtec Excellence Program.”

Shares of WAB got a nice lift from the earnings report, and the stock is now positive for the year. This is a good example of sticking with a well-run outfit that’s going through a rough patch. I’m raising my Buy Below price on Wabtec to $87 per share.

Wednesday Earnings from Axalta and Fiserv

On Wednesday, Axalta Coating Systems (AXTA) said they made 26 cents per share for Q1, which was two cents more than estimates. Revenues rose 5.5% to $1.01 billion, $20 million more than estimates. Axalta also reaffirmed full-year guidance for EBITDA of $930 to $980 million. Not much to add here; it was another good quarter. AXTA remains a buy up to $35 per share.

Also on Wednesday, Fiserv (FISV) reported Q1 earnings of $1.25 per share, six cents more than Wall Street’s consensus.

GAAP operating margin was 26.2 percent in the first quarter, increasing 70 basis points compared to the first quarter of 2016.

Net cash provided by operating activities was $463 million in the first quarter of 2017, compared with $509 million in the prior-year period, a decrease of 9 percent. Net cash provided by operating activities included cash distributions from StoneRiver of $31 million and $140 million in the first quarters of 2017 and 2016, respectively.

“We are off to a good start to the year, producing strong financial results across the company,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Our business model continues to deliver revenue acceleration, strong sales growth and excellent free cash flow.”

Fiserv reiterated its full-year outlook for $5.03 to $5.17 per share. That represents a growth rate of 14% to 17% over last year. The stock gapped up to yet another all-time high. Fiserv remains a buy up to $122 per share.

Thursday’s Reports from AFL, CERN and MSFT

We had three more earnings reports after the bell on Thursday. AFLAC (AFL) reported Q1 operating earnings of $1.67 per share. The duck stock topped the Street’s consensus by five cents per share. The dollar/yen exchange rate added one penny per share to AFLAC’s bottom line.

Dan Amos, the CEO, said, “We are pleased with the company’s overall performance for the quarter. Our results for the first quarter are consistent with what we communicated on our December outlook call. Despite the persistent low-interest-rate environment, Aflac Japan, our largest earnings contributor, generated solid financial results. In yen terms, results on an operating basis were in line with our expectations for the quarter. Additionally, our operation in Japan produced better-than-expected third-sector sales results. As we’ve communicated, we continue to believe the long-term compound annual growth rate for third-sector product sales will be in the range of 4% to 6%.”

Now for some guidance. Amos said that if the exchange rate averages ¥108.70 for this year, which was last year’s average, then AFLAC is on pace to net between $6.40 and $6.65 per share in operating earnings for this year. If the yen averages 105 to 115 for Q2, then he sees AFLAC earning between $1.55 and $1.70 per share. Wall Street had been looking for $1.62 per share.

AFL broke out to a new all-time high this week. The shares remain a buy up to $75.

Cerner (CERN) has made an impressive U-turn for us this year. On Thursday, the healthcare-IT folks said they earned 59 cents per share for Q1. They had previously given is a range between 57 and 59 cents per share, while Wall Street’s consensus was at 57 cents.

But I wanted to dig down to the details, and they look pretty good. Total backlog is up 10% from last year. Q1 operating cash flow was $303.6 million. For Q2, Cerner expects earnings between 60 and 62 cents per share. For the entire year, they’re looking for a range between $2.44 and $2.56 per share. I think both are very doable. It’s nice to hear some good news from Cerner. I’m lifting my Buy Below on Cerner to $66 per share.

That brings us to the big earnings report from Microsoft (MSFT). The software giant earned 73 cents per share, three cents more than estimates. That’s up from 63 cents per share one year ago. This was a good quarter, but the revenue number was a bit light.

For the quarter, Microsoft had adjusted revenue of $23.56 billion. That’s up 6% from last year. But Wall Street had been expecting $23.65 billion. The company blamed the shortfall on weak Surface Pro sales. It’s not a huge miss, but it was enough to hurt the shares in the after-hours market. Don’t worry about it at all. Microsoft is doing very well. Revenue for their “Intelligent Cloud” business was up 11% to $6.8 billion. I’m raising my Buy Below on Microsoft to $70 per share.

Six More Earnings Reports Next Week

Next week, we’ll have our final six Buy List earnings reports for this earnings season. We’ll get three earnings reports on Wednesday: Cinemark, Intercontinental Exchange, and Ingredion. Then Continental Building Products reports on Thursday, May 4. Finally, on Friday, May 5, we get reports from Cognizant Technology Solutions and Moody’s.

In February, Cinemark (CNK) had a blow-earnings report. The movie theater chain earned 66 cents per share, which was 50% more than Wall Street had been expecting. Estimates for Q1 have been climbing higher and higher and are now at 58 cents per share. Here’s a number I love—gross margins on their concession business run about 85%. In the theater business, that’s where all the real money is.

Intercontinental Exchange (ICE) is coming off a good year for 2016. I think the stock exchange people can make $3 per share this year. Wall Street’s expects Q1 earnings of 70 cents per share. I’m expecting a small beat.

In February, Ingredion (INGR) reported decent numbers for Q4. They beat by three cents per share, but the stock got punished for a 9% loss that day. I’m really not sure what ticked traders off so much. The company said full-year earnings should range between $7.40 and $7.80 per share. That’s not bad. Wall Street is looking for Q1 earnings of $1.76 per share.

I like Continental Building Products (CBPX) a lot, and the company provides lots of guidance for several different financial metrics. Except EPS. My numbers say that CBPX can make $1.35 per share this year. For Q1, analysts are expecting 27 cents per share. That sounds about right.

In February, Cognizant Technology Solutions (CTSH) said they see Q1 earnings of 83 cents per share, and full-year guidance of $3.63 per share. The big news for Cognizant this year is that they reached an agreement with Elliott Management, an activist investment group. As part of the agreement, Cognizant now plans to return $3.4 billion to shareholders over the next two years. They also plan to initiate a dividend of 15 cents per share.

Moody’s (MCO) is our third-biggest winner this year, with a gain of 26.7%. The shares reached another new high on Thursday. For 2017, Moody’s said they expect earnings between $5 and $5.15 per share, which doesn’t include a 15-cent-per-share accounting benefit. For Q1, Wall Street forecasts earnings of $1.21 per share.

That’s all for now. We get our last batch of Buy List earnings next week. With the beginning of May, we’ll also get some key economic reports. The ISM report comes out on Monday. The Federal Reserve meets on Tuesday and Wednesday, but don’t expect anything to happen. The policy statement will come out at 2 p.m. on Wednesday. Then the big April jobs report comes on out Friday, May 5. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

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

#Trump’s #NAFTA about-face, #Venezuela’s OAS withdrawal, security robot assaulted

Good morning, Quartz readers!


The European Central Bank weighs in. With the French election imminent, the ECB is not expected to make any major moves, but traders will be watching for any shifts in tone of the bank’s assessment of the euro zone economy and hints about future tapering.

A big day for tech earnings. Analysts expect Alphabet, Google’s parent company, to post an impressive 21% increase in revenue to $20.02 billion, though they’ll also be watching for signs (paywall) that advertisers are abandoning YouTube. Microsoft and Amazon will also report quarterly results.

Shinzo Abe sits down with Vladimir Putin. North Korea will be on the agenda when the Russian and Japanese leaders meet in Moscow—but so will sea urchin and scallop cultivation in the islands off the coast of Hokkaido that are claimed by both countries.


Trump pulled a 180 on NAFTA. After media reports surfaced stating that Trump would issue an executive order ending US participation in the North American Free Trade Agreement, the president stated that the White House would merely “renegotiate” its terms with Canada and Mexico. The announcement comes one day after Trump imposed tariffs on Canadian lumber shipped to the US.

Venezuela announced it would exit OAS. After members of the Organization of American States voted to hold a meeting to discuss the country’s plight, Venezuelan foreign minister Delcy Rodriguez said the regime would begin the withdrawal process from the organization. Violent protests against the Maduro regime, which has brought its citizens to the brink of starvation, have been waging in Caracas for over a week.

A North Korean official warned his nation would “never stop” its nuclear tests. His comments followed a joint statement given by secretary of state Rex Tillerson, defense secretary Jim Mattis, and director of national intelligence Dan Coats saying Washington will manage North Korea’s nuclear threat “by tightening economic sanctions and pursuing diplomatic measures with our allies and regional partners.”

Samsung Electronics had its best quarter in three years. The company reported operating profits of 7.68 trillion won ($6.8 billion), driven by a strong components division that has compensated for its lagging mobile phone unit. It also stated it would not re-structure into a holding company—something US-based activist investors, hungry for more dividends, have rallied for.

“Canada’s Donald Trump” withdrew his political bid. Kevin O’Leary, the outspoken businessman and star of the reality TV showShark Tank, ended his bid for leadership of Canada’s Conservative Party. O’Leary stated he dropped out of the race because his unpopularity in Quebec would make it difficult to beat prime minister Justin Trudeau in the 2019 election.


Katherine Foley on how science got it wrong about fat. In an article published in the British Journal of Sports Medicine (an affiliate of BMJ) on April 25, researchers from the UK and California reviewed all the existing studies about cholesterol and heart disease. Based on all the published literature, “the conceptual model of dietary saturated fat clogging a pipe is just plain wrong,” they write. Read more here.


Trump’s tax plan: Something / For everyone. And a lot/ For the very rich.


Kim Jong-un is acting rationally. He’s doing what it takes to stave off a military coup or a popular uprising—both of which would upend the regime.

Queens are more likely to wage war than kings. And married queens are more bellicose than unmarried ones.

Pre-muddied expensive jeans are a symptom of “the war on work.” For $425, the wealthy don’t have to get their hands or pants dirty.


Quartz Index indicator of the day: $4.1 billion. That’s the projected size of the iris recognition market in 2025 (it was $670 million in 2016). Fingerprint recognition is already mainstream; is iris scanning next? 👀 for yourself at the new Quartz Index.


Donald Trump has a special red button to request a soda. The Oval Office device is not to be confused with the one that could start a nuclear war.

A security robot was assaulted in Silicon Valley. An intoxicated man knocked over the Knightscope K5 and was promptly arrested by (human) police.

Amazon’s new gadget judges your fashion sense, or lack thereof. The $200 Echo camera uses machine learning to analyze your daily clothing choices.

Humans may have arrived in the Americas 130,000 years ago.Controversial research posits that people lived in California 115,000 years earlier than is commonly accepted.

Baby whales whisper to their mothers. The faint squeaks and grunts are designed to prevent eavesdropping by predatory orcas.

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

Made-in-China aircraft carrier, #Trump’s tax plan, an aurora named “Steve”

Good morning, Quartz readers!


Donald Trump unveils the blueprint of his tax cuts… The US president reportedly wants to apply a 15% tax rate on both mom-and-pop companies and large corporations, which currently face a much higher rate. The slashed rate would also apply (paywall) to entities like his own real estate conglomerate—opening a line of attack for his opponents.

…And briefs the US Senate on North Korea. All 100 senators have been summoned to a rare joint meeting at the White House with the president and senior cabinet officials to discuss Pyongyang’s nuclear program.

Earnings, earnings, earnings. Among the many companiesreporting results (pdf) are Twitter, PayPal, PepsiCo, Hershey, Boeing, and Procter & Gamble. The day could be especially painful for Twitter, which is expected to report a revenue drop amid struggles to find new users and advertisers.


China launched its first domestically built aircraft carrier. The nation could eventually have a fleet of up to six as it tries to project power further afield. For Chinese president Xi Jinping the launch was a chance to bolster his commander-in-chief credentials ahead a key Communist Party meeting later this year.

AT&T lost wireless customers for the first time last quarter.Admitting it was slow in reacting to competitors offering unlimited data plans, the US carrier said it lost 191,000 postpaid subscribers (those who pay bills monthly), versus expectations it would add about 100,000. Customers want to stream video without worrying about exceeding a cap.

McDonald’s dropped plans to sell shares in its Japan unit. It said early last year it might sell the business, which had been struggling after a series of food scandals. But last month the unit reported same-store sales rose almost 17% from a year ago. Shares in McDonald’s hit an all-time high yesterday after the company reported a strong quarter.

Australia notched its highest consumer price inflation since 2014. Petrol, education, and health care all got more expensiveDown Under. The news was welcome in a nation worried about deflation, but at just over 2% the quarterly figure still underwhelmed—meaning don’t expect to see interest rate hikes anytime soon.


Tim Fernholz on Donald Trump’s war on Canadian lumber socialism. “The lumber debate between the US and Canada began in 1982. It is driven by fundamental factors: In the US, much timber land is privately owned and competitively priced. In contrast, Canada’s vast timber reserves are mostly owned by the government and leased over the long term to producers.” Read more here.


The mystery of / business success in three words: / “All-Day McMuffins.”


French politics have moved beyond left and right. Instead, the far-left and far-right are converging.

People are scared of artificial intelligence for all the wrong reasons. Robotic cars are far less dangerous than AIs making decisions about policing and health care.

The 😬 emoji is the best emoji. It allows us to acknowledge the low-key stress and anxiety we feel every day.


Astronomers are investigating an aurora named “Steve.” The purple-green streak was created by a ribbon of ionized gas over Alberta, Canada.

Researchers created an artificial womb for livestock (and soon, for humans). Fetal lambs lived in the fluid-filled sack for four weeks.

Apple wants the cool kids to hang out at its stores. Retail chief Angela Ahrendts is overseeing a revamp featuring “Genius Groves” and lots of foliage.

Brazilian bandits stole $40 million from a heavily guarded vault in Paraguay. The gang killed one police officer in its overnight raid on a cash storage facility.

A dead woman’s Fitbit led to her husband’s murder arrest. It showed she was alive after he claimed she was shot by an intruder.

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

#LePen and #Macron runoff, #Obama re-emerges, mole rat secrets

Good morning, Quartz readers!


Barack Obama holds his first public event since leaving the White House. The former US president will lead a conversation with young people on civic engagement and community organizing at the University of Chicago.

Protests by Russian truckers resume—and spread. Despite theKremlin downplaying (paywall) the situation, thousands of long-haul truckers are demanding the repeal of a tax hike on the use of federal highways. An opaque company with ties to Russian president Vladimir Putin is behind the electronic toll scheme.

ISS commander beats the 534-day record for time spent in space by an American. Peggy Whitson, 57, is in the midst of her third long-duration mission. She will receive a congratulatory phone call from US president Donald Trump, and will remain on the International Space Station until September.


Voter anger has the power to move markets. From globalization to immigration, political upheaval has far-reaching economic implications. These research insights examine what economies and markets can expect if global politics continue to shift dramatically.


France’s next president will be a former banker or a far-right populist. The first round of voting winnowed the field to Emmanuel Macron, who has never before run for office, and Marine Le Pen, who wants a Frexit. The runoff vote is on May 7.

Saudi Arabia restored financial perks for public sector workers. It also rescinded salary cuts for ministers. Authorities said the moves reflected the improved fiscal position of the government, which has seen its finances undermined by low oil prices—and grumbling from a population used to generous subsidies and benefits.

Angela Merkel’s party saw a turnaround in German polls. Support for the German chancellor has risen to 34% in the country’s most populous state, the highest since 2015. That figure draws her Christian Democratic Union party even with its main opposition, the Social Democrats.

American Airlines dodged a scandal by quickly apologizing for an onboard incident. Reacting to footage of a flight attendant supposedly grabbing a stroller from a woman, hitting her, and just missing her baby, the company swiftly launched an investigation anddenounced the employee’s lack of empathy and patience.

Scientists and their fans took to the streets around the world.They devised clever signs for the March for Science on Saturday: A baby held one reading, “Remember polio? Neither do I. Thanks, science!” One with a blow-up dinosaur read, “Ask how climate change went for me.” Kids in New York held one saying “Make America scientific again.”


Paul Smalera on Fox’s business incentive for dropping Bill O’Reilly—his age: “Nothing about the way Rupert Murdoch has ever operated suggests he is interested in overpaying celebrities of his own creation to work through their declining years, while putting his business interests at risk. He has shown us who he is over and over, and we should, as the saying goes, believe him.” Read more here.


It’s time to break up Google. Tech monopolies like Google and Facebook are stymying innovation, costing millions, and must be regulated (paywall)—either by limiting acquisitions, treating them like public utilities, or removing the “safe harbor clause.”

Japan is saying “no thanks” to political change. Voters are just fine without the kind of turbulence they see in Europe, the US, and South Korea.

Relationships work best when partners don’t have too much in common. Different personalities, interests, and religious views canbroaden perspectives and deepen love in a way similarities can’t.


Quartz Index indicator of the day: €29,750 . That’s the average amount a financial firm would spend in housing and office space per employee if they relocated them to Frankfurt, one of the cheapest real estate markets in the EU. Learn which European cities are looking especially nice post-Brexit and explore other indicators at the new Quartz Index.


Prince had over 2,000 pairs of shoes. The late musician had a preference for ankle boots with three-inch heels.

A 1969 oil spill in Santa Barbara sparked the modern US environmental movement. Residents discovered there were few laws to help them clean up the mess and protect the environment from future disasters.

The farthest you can get on Earth from a Trump property is an island off the coast of Angola. But with just one largely abandoned town, Baia dos Tigres isn’t the safest getaway (paywall).

Larger-sized clothes fit badly for a painfully obvious reason.Designers ineffectively “scale up” the dimensions of each piece, instead of simply fitting clothes on larger models.

Naked mole rats can survive without oxygen for nearly 20 minutes. Enzymes in their hearts and brains convert fructose into energy.

Our best wishes for a productive day. Please send any news, comments, celebrity footwear, and postcards from Baia dos Tigres 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—France’s new politics, the happiness experiment, how Google Books died

Good morning, Quartz readers!

The point is approaching in the populist era when left- and right-wing parties become so extreme that they end up meeting, as if someone had grabbed the two ends of the political spectrum and bent it into a loop.

France is already there. For the first time in the country’s modern political history, candidates from both its mainstream parties are bracing to be knocked out of the presidential election, of which the first of two voting rounds is on Sunday.

The two front-runners are from outside the mainstream: far-right leader Marine Le Pen, who has lured disenchanted voters from both left and right with her protectionist mantra, and Emmanuel Macron, a pro-market centrist who melts the hearts of urban progressives.

But a close challenger for third place brings the country’s extreme views full circle. In recent weeks, far-left firebrand Jean-Luc Mélenchon, a tech-savvy admirer of Mao Zedong and Hugo Chávez, has shot up in the polls. His tirades against free trade and clubby elites are eerily similar to those of his far-right rival. Bankers, Mélenchon said at a campaign rally (paywall), are “parasites” on society who “produce nothing.” In an interview, Le Pen called for a return to “real economies, not Wall Street economies, but rather factories and farmers.”

Both candidates are pro-worker and anti-EU and favor chummier ties with Russia. The only major difference between them boils down to xenophobia. Le Pen, whose fear-mongering implicates French Muslims in the rise of ISIL, wants a blanket ban on immigration, while Mélenchon, born and raised in Morocco, preaches compassion for refugees (link in French), but better control over those who have yet to arrive.

The merging of their ideals speaks to the unraveling of left and rightcategories everywhere, as voters contend with the forces of globalization in everyday life. In France, the burning question is how to root its cherished culture in a destabilized world. The answer it comes to will transcend borders, setting a course for Europe, global markets, and modern politics for years to come.—Roya Wolverson


The Happiness Experiment. In a special series this week we examine happiness through lenses like economics and evolutionary psychology. Highlights include Nikhil Sonnad on how the Wikipedia page defining happiness has evolved, in a kind of Socratic dialogue, through thousands of edits; Meredith Bennett-Smith on why being grumpy in the workplace can make people more energetic and creative; and Michael Coren on the philosopher who is teaching Silicon Valley moguls to stop trying to optimize their lives.

The South American protestors who took Europe’s space program hostage. A protest movement against conditions in French Guiana blocked satellite launches in an attempt to attract France’s attention—and succeeded. Peter D’Auria reports from Kourou.

The enigma of Bashar el-Assad. Even now, Syria experts and former friends of his cannot fully agree on how the baby-faced, shy opthalmologist became one of the 21st century’s leading villains, as Max de Haldevang discovers.

America explained for foreigners. Wikitravel, the free, crowd-sourced travel guide, offers tips on speaking to women, coping with massive food portions, dealing with the police, and talking about politics. Thu-Huong Ha picks out the gems in a revealing look at the US through the eyes of other cultures.

California’s six-year drought is finally over. Governor Jerry Brown largely lifted the state of emergency on April 7, but its impact will live on, as David Yanofsky shows in 93 maps and two charts.

How to game your airline. Airlines oversell seats on the expectation that some passengers won’t show up. But what if overbooked passengers band together to make the airline pay? Play our interactive game created by Emily Withrow and Adam Pasick to find out what happens next.

Iran’s remarkable transgender rights policy. The Islamic Republic is actually an accepting place for transgender people to live, as long as they get sex reassignment surgery. Neha Thirani Bagri explores trans life in Iran.

Children are learning about sex through porn. In the internet age, there is little parents can do to control what their children watch.Cassie Werber delves into how governments around the world are struggling to regulate this.


Why are we all so obsessed with happiness? Quartz reporters go beyond platitudes and quick fixes to try to answer this question in our latest special series, the Happiness Experiment. Explore happiness’s relationship with money, evolution, and history, as well asthe case for being the workplace grump.


The end of Google’s first “moonshot.” Google once aimed to scan every book in the world and make them searchable. James Somers in the Atlantic traces the history of the modern-day Library of Alexandria that became Google Books, and the legal battles from authors and publishers that thwarted it. He writes, “Google did that thing where you ask for forgiveness rather than permission, and forgiveness was not forthcoming.”

The last thing about Rachel Dolezal that you’ll ever need to read. Dolezal is a white woman who famously lied about being—and continues to identify as—black. In a piercing interview with her, black writer Ijeoma Oluo concludes that Dolezal’s efforts to coopt blackness are the ultimate mark of white privilege.

Juicing the juicers. The internet reveled in Bloomberg’s revelation that food-tech startup Juicero’s $400 wifi-enabled juice press was basically pointless: The QR-coded juice packs could be squeezed by hand, serving up a potent metaphor for the tech boom’s glorification of disruptive but unnecessary products. Also: read thenote from Juicero’s CEO and make up your own mind.

The shaky future of the blue-blooded crab. The biomedical industry captures about 500,000 horseshoe crabs every year to extract their blue blood, using it to detect the presence of dangerous bacteria in drugs and implants. Caren Chesler visits a crab phlebotomy lab for Popular Mechanics, and explains how, with surging demand and no regulation to speak of, the 450-million-year-old species is now in dangerous decline.

How Russia handles its hackers. The US election hack and Yahoo’s massive data breaches were both sponsored by Russia, US intelligence agencies believe. But as Sheera Frenkel reports for Buzzfeed, what makes these hacks hard to pin down is the fluid, shifting relationship between the Russian state and cybercriminals it sometimes employs and sometimes pressures to help do its dirty work.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, blue crab blood, and definitions of happiness to hi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone andAndroid.

#Venezuela’s “mother of all protests,” #Australia’s citizenship test, photobombing iceberg

Good morning, Quartz readers!


Donald Trump meets Italy’s “gentleman” prime minister. Prime minister Paolo Gentiloni visits the White House to discuss the upcoming G7 summit in Sicily, which will be the US president’s first overseas trip.

China’s launching its first cargo spacecraft. The unmannedTianzhou-1 takes off Thursday night at 7:41 PM local time from the Wenchang Satellite Launch Centre. It’s designed to resupply China’s space station, which is scheduled to be permanently manned by 2022.

Pakistan’s supreme court rules on the Panama Papers leak.Prime minister Nawaz Sharif could be deemed ineligible to hold office due to leaked documents that revealed his children’s ownership of offshore companies involved in an alleged money-laundering scheme.


Thousands gathered in Venezuela’s capital for the “mother of all protests.” Crowds in Caracas marched to demand the removal of president Nicolás Maduro, as the country suffers from a recession so severe that citizens face a chronic food shortage. Violent clashes erupted between the protestors and government troops, resulting in two deaths by nightfall.

Australia made it harder to become an Australian. Applicants for citizenship will take a test that assesses their integration into the local community and commitment to religious freedom and gender equality. The length of permanent residency required to earn citizenship was also extended, from one year to four. The changes come two days after prime minister Malcolm Turnbull announcedrestrictions on visas for foreign workers.

Rex Tillerson struck a tough tone on the Iran deal. Hours after the State Department confirmed that Iran was complying with the restrictions on its nuclear program, the secretary of state hosted a press conference and told reporters the deal “fails to achieve the objective of a non-nuclear Iran.” He added that the administration is considering adding North Korea to its list of state sponsors of terror, in hopes of spurring Pyongyang to re-engage with Washington.

Exxon applied for an exemption to work in Russia. The oil giant is reportedly seeking a waiver from the US Treasury Department that would allow it to drill for oil in the Black Sea (paywall), and continue its relationship with state-run Rosneft. Secretary of state Rex Tillerson, a former Exxon CEO who helped create the partnership, has recused himself from the decision.

Fox News fired its top host amid a sexual harassment scandal.Rupert Murdoch and his sons said Bill O’Reilly—off-air since April 11—would not return to the network after an internal investigation of sexual harassment allegations against him. The move was precipitated by dozens of advertisers boycotting Fox News.


Marc Bain on Amazon’s patent for an automated on-demand clothing factory: “Standard operating procedure in the apparel industry goes like this: Make clothes, and then sell them. … But Amazon, the ecommerce giant steadily growing into the largest apparel seller in the US, has another idea.” Read more here.


IBM shares droop / So can Watson calculate / Warren Buffett’s loss?


The war in Syria has been great for North Korea. Pyongyang isgetting rich selling weapons to the Assad regime, and gaining valuable expertise on how to deal with a military conflict on one’s territory.

The big winner in the French election will be Vladimir Putin.Three of four leading candidates are pro-Putin populists.

Live crime is the beast Facebook can’t control. Relying on user reports has its limits.


Quartz Index indicator of the day: $5.8 million. That’s the average amount the 12 best-paid YouTube stars made in the year starting in July 2015. Learn why that number may fall for this year and explore other indicators at the new Quartz Index.


Silicon Valley invested $120 million in a juicer that does nothing. Juice packs for the Juicero can just as easily be squeezed by hand.

Amazon is using peer pressure to keep workers from calling in sick. German warehouse employees only get a bonus if their coworkers show up.

A massive traveling iceberg is photobombing a Canadian village. Newfoundland’s “iceberg alley” is hosting a record crop this year due to rising temperatures.

Southern California’s trees are dying rapidly. An infestation of polyphagous shot hole borer beetles could decimate 38% of the trees in the Los Angeles, Orange, Riverside, and San Bernardino counties.

China put Richard Gere out of work. The star of “Pretty Woman” says his outspoken advocacy of Tibet has led Hollywood to stop placing him in big-budget movies meant to reach audiences in China.

Our best wishes for a productive day. Please send any news, comments, tree-killing beetles, and superfluous juicers tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.