#Macron hosts #Putin, #Europe’s lonely path, #Elvis Presley’s jet

Good morning, Quartz readers!


Markets are closed today in the US and UK.

Emmanuel Macron hosts Vladimir Putin. It will be their first meeting since the new French president accused Moscow of meddling in his nation’s elections. They’ll discuss Syria and Ukraine, among other issues. Macron has stated that Russia’s bombing of the Syrian city Aleppo could amount to a war crime.

Theresa May and Jeremy Corbyn “face off” in prime time. The two party leaders won’t debate head on, but each will be interviewed and then asked questions by a studio audience on Sky News in the UK. Corbyn’s Labour party continues to gain ground on the prime minister’s Conservatives ahead of the June 8 snap election.

BMW pauses production in China. The German carmaker is expected to suspend production in Chinese and South African plants, after an Italian supplier failed to deliver a few necessary steering parts.


Angela Merkel said Europe could no longer rely on the US and UK. “We Europeans must really take our destiny into our own hands,” the German chancellor declared Sunday, after meeting US president Donald Trump and UK prime minister Theresa May at NATO and G7 summits last week.

China reminded Hong Kong who’s boss. The country’s third-most senior leader Zhang Dejiang gave a speech in Beijing warning that Hong Kong’s relationship to China “is that of delegation of power, not power-sharing,” and that the city should not overemphasize its “high degree of autonomy.”

Ramadan kicked off around the world. But US secretary of state Rex Tillerson has reportedly decided against hosting a celebratory reception when Ramadan ends, breaking with a bipartisan tradition of honoring the Muslim world’s holy month.

North Korea flaunted a potential new anti-aircraft system. State news agency KCNA released an undated photo of leader Kim Jong-un observing a test launch. Kim reportedly ordered the unspecified weapon’s nationwide deployment.

ISIL-linked rebels threatened the Philippines. Fighting continued in the southern city of Marawi on Mindanao island, where president Rodrigo Duterte recently declared martial law. The death toll reached 100, including 19 civilians, as government forces clashed with terrorists linked to ISIL.


Michael J. Coren on a doctor who helps Silicon Valley execs and engineers hit peak performance for a hefty price: “Her concierge medicine practice in San Francisco serves a small number of patients for anywhere from $5,000 for an initial assessment to upwards of $40,000 per year for comprehensive care.” Read more here.


The key to happiness is indifference. You don’t need to take a position on whether the proverbial glass looks half empty or half full.

China is no threat to Hollywood. Censorship keeps Chinese-made films from achieving much in the way of plot.

You don’t have to be a good writer to write a great thank-you note. There’s no formula, you just have to be sincere.


Get the newsletter the smartest people in tech are reading.Charged is a weekly newsletter and podcast that cuts through the noise and gets you the tech news worth knowing. Subscribe now and join people from DigitalOcean, Microsoft, Apple, and Twitter.


South Koreans are losing their religion. Between work, school, and family, young adults just can’t find time for church.

The historians behind White House chief strategist Steve Bannon’s worldview also coined the term “millennial.”According to William Strauss and Neil Howe, millennials will be a heroic generation.

A ship full of Australian convicts landed in Japan at the height of its isolation in the 1830s. A samurai noted the “unbearable stench” coming from the pirate ship.

French president Emmanuel Macron was testing US president Donald Trump last week. “That’s how one gets respected,” Macron later said of their fierce handshake.

Elvis Presley’s private jet has been gathering dust on a New Mexico runway for 35 years. The velvet-upholstered Lockheed Jetstar was auctioned off for $430,000 over the weekend.

Our best wishes for a productive day. Please send any news, comments, hand grips, and Elvis kitsch to hi@qz.com. You can follow us on Twitter for updates throughout the day.


Bespoke Brunch Reads – 5/28/17

Big Economic Questions

The Question Isn’t Why Wage Growth Is So Low. It’s Why It’s So High. by Neil Irwin (NYT Upshot)

Over time, wages are governed by three factors: inflation, productivity, and labor bargaining power. While the latter has gotten all of the attention in recent years, wages have actually been stronger than the first two factors would predict, suggesting that low wages aren’t actually the problem to be worried about. [Link; soft paywall]

Economic dynamism falls across the US by Sam Fleming and Lauren Leatherby (FT)

The Economic Innovation Group’s index of dynamism (which includes metrics of firm creation or destruction, churn in the jobs market, labor force participation, and other statistics) has fallen across the country persistently for decades. [Link; paywall]


Rural America Is The New ‘Inner City’ by Janet Adamy and Paul Overberg (WSJ)

Birth to death ratios, employment, wages, health outcomes: all are lagging and deteriorating in rural communities across the country. [Link; paywall]

America’s Cities Are Running Out of Room by Patrick Clark (Bloomberg)

Urban areas have many advantages, but lots of available space is not one of them. As demand for in-city and near-city housing accelerates, land space is running out. [Link; auto-playing video]

More on America’s unproductive homebuilding sector by Matthew C. Klein (FTAV)

An excellent analysis of the dismal productivity in the US homebuilding sector including some excellent charts and data. [Link; registration required]

Real Estate

Toronto Homeowners Are Suddenly in a Rush to Sell by Kim Chipman (Bloomberg)

Preliminary data from the Toronto Real Estate Board suggests a plunge in the ratio of sales to listings, a leading indicator of home price growth in the Greater Toronto Area. [Link; auto-playing video]

Is This a House or a Playground? by Stefanos Chen (WSJ)

Slides to get around, custom bunk beds, 12 foot ceilings in the basement, a custom 8-person Tempur-Pedic mattress, seven bedrooms, eleven bathrooms…this 13,000 square foot South Dakota home is a paradise for its young occupants. [Link; paywall]

Fixed Income

How I Learned to Stop Worrying and Love the Basis by Guy Debelle (RBA)

An excellent speech from the Deputy Governor of the RBA, offering explanation and detail on the cross-currency basis that should rationalize the conversation around the obscure relationship. [Link]


Mnuchin Wants Debt-Limit Increase With No Conditions Attached by Kate Davidson and Richard Rubin (WSJ)

The Treasury is now expecting to run out of cash and hit the debt limit in July, prompting the Treasury Secretary to urge Congress to raise the debt ceiling as soon as possible without any strings attached; that move would require Democrats as a Freedom Caucus statement this week opposed such a move. [Link; paywall]


Canada backs off blockchain interbank payment system by Neil Ainger (CNBC)

The Bank of Canada had taken a look at using a distributed ledger for the country’s interbank payment system, but after reviewing the prospects has decided against shifting to that technology. [Link]

DTCC to Launch Blockchain Credit Default Swaps Reporting in Early 2018 by Alex Lielacher (NASDAQ)

The Depository Trust and Clearing Corporation, an entity that serves as the settlement facility for the CDS (and other) markets, wants to have a parallel blockchain-based settlement platform for CDS by Q1 2018. [Link]

Media Matters

As Trump’s Problems Mount, Brietbart’s Numbers Are Cratering by Tina Nguyen (Vanity Fair)

Brietbart got massive traffic when it went on offense against the Obama Administration and the Clinton campaign but as other media outlets see strong traffic covering the Trump White House, Brietbart’s rank has plummeted. There are some interesting details in the article around digital media as well: the importance of The Drudge Report, and the difficulty of measuring traffic. [Link]


Portugal exits EU budget procedure six years after bailout by Jim Brunsden, Peter Wise, and Mehreen Khan (FT)

With a budget deficit falling to 2% of GDP in 2016, Portugal is no longer in breach of Eurozone budget rules. With the announcement, on Spain, France, and Greece remain in breach of the stability and growth pact rules. [Link; paywall]

Culture and household saving by Benjamin Guin (ECB Working Paper Series)

We’re somewhat unconvinced that cultural factors are a significant explanation of national savings rates, but this paper does a good job investigating differences in regional savings rates inside countries. [Link; 67 page PDF]


Tudor Jones backs AI hedge funds by Robin Wigglesworth and Lindsay Fortado (FT)

Legendary macro investor Paul Tudor Jones has invested in funds that use AI to pick investments including CargoMetrics and Numerai. [Link; paywall]

Exclusive: Google launches AI investment platform by Dan Primack (Axios)

Google is going to try and use AI to pick venture investments. [Link]


The Rise of the Amateur Oil Sleuths by Georgi Kantchev (WSJ)

An overview of the diverse landscape of oil research, which is being fueled by both talented amateur analysts and high tech professionals looking for an edge. [Link; paywall]


Twitter Bug Allowed Hackers To Tweet From Any Account by Lorenzo Franceschi-Bicchierai (Vice)

A vulnerability in Twitter’s advertiser platform meant it was possible for almost anyone to tweet from the account of anyone else. That backdoor has now been closed. [Link]

Novice Nomura Trader Tells Jury How Bosses Taught Him to Lie by Chris Dolmetsch (Bloomberg)

Mortgage bond traders systemically deceived customers about how much they had paid for bonds, teaching junior employees how to do the same. [Link]

Just for the zols by George Hay (Reuters)

Zimbabwe is creating fake dollars by electronically crediting bank balances with entries in USD that are not backed by reserves, creating a discount for dollars in a bank versus physical cash. [Link]

America Second?

In the Stock Market, International Is Actually First by Jeff Sommer (NYT)

International equities are trouncing the US in recent quarters, but the dependence on international sales and profits goes deeper than foreign versus domestically listed stocks. [Link; soft paywall]

Labor Markets

The Exquisitely English (and Amazingly Lucrative) World of London Clerks by Simon Akam (Bloomberg)

A review of the go-betweens for UK barristers (attorneys appearing in court) and solicitors (attorneys who provide legal advice without appearing in court). [Link]

‘I’m ruined’: Workers realize too late that they signed away the right to other jobs by Conor Dougherty (Raleigh News & Observer/NYT)

Production workers traditionally unconstrained by obscure legal provisions in their contracts are increasingly facing non-competes and other passages designed to keep them bound to existing employers. [Link]


Winning Yankees Aren’t Faring Nearly as Well at the Ticket Office by Billy Witz (NYT)

Lots of wins and a few great personnel stories aren’t helping move tickets for the Bronx Bombers. [Link; soft paywall]


Dutch police eagle on standby at Nato summit to take down drones (Dutch News)

The NATO summit in Brussels this week was defended by eagles trained to attack drones violating the airspace above the event. [Link]

Have a great Sunday!

Bespoke Investment Group, LLC

105 Calvert Street, Suite 100

Harrison, NY 10528



Twitter: @bespokeinvest

Weekend edition—The new “#Trump trade,” why we lie, dating Italian-style

Good morning, Quartz readers!

The S&P 500 and Nasdaq indexes both hit record highs this week, and the Dow flirted with its own all-time high. The message from the market—just in time for a three-day weekend in the US—is that everything is great!

Except it isn’t. Just this week, the Trump administration published aneconomically illiterate budget, nonpartisan number-crunchers said the president’s signature health care policy would leave 23 million Americans uninsured, and president Donald Trump’s most trusted advisor was pulled into the FBI’s Russia investigation (paywall).Markets rallied hard when Trump won, as investors banked on tax cuts and deregulation. But why are they still so happy?

Markets can act as a check on politics. In the months after the Brexit vote, the pound plunged so deeply that the currency became the de facto opposition to the British government. Last week, Brazil’s stock market dropped by 10% after the president was implicated in a bribery scandal. But while US markets do sometimes register disapproval of Trump—stocks had their worst day in eight months(paywall) last week, after it emerged that he tried to influence the FBI’s Russia probe—any skittishness has been short-lived.

Market signals suggest that traders have long since given up hope on the policy changes—tax reform, infrastructure spending, and bank deregulation—that boosted stocks immediately after the election. Instead of the “Trump trade,” they are focusing on the strengthening economy, signs from the central bank that interest rates will continue to rise, and the best quarter of corporate-earnings growth in five years.

Historically speaking, this is sensible. Research has shown that political crises rarely have a lasting impact (paywall) on markets. But don’t be surprised if, as stocks continue to climb, politicians misinterpret the movement and take credit for it.—Eshe Nelson


A former religious extremist tries to make it right. Born in St. Louis, Missouri, Ismail Royer went to prison after 9/11 found him running with an extremist crowd. Fourteen years later, he’s free, remorseful, and hoping for redemption. In Nushmia Khan’s video profile, Royer reflects on lessons learned from spending years in prison with some of the most reviled American terrorists.

IRL, Amazon sucks the joy out of book-buying. The e-commerce giant opened its seventh brick-and-mortar store this week, this time in New York City, and Thu-Huong Ha found it lacking. The store is too much like the website, in all the worst ways—cluttered with signs, with too much emphasis on user ratings and Amazon Prime membership.

Xi Jinping is beating Narendra Modi at his own game. India’s prime minister spent two years globe-trotting in an effort to establish his country as an influential soft power on the world stage. But as Modi contends with local conflict and the fallout from a currency crisis, Manu Balachandran and Zheping Huang look at how China’s Xi is building up a rock-solid strategic presence in India’s backyard.

The future of Slack is your boss using it to spy on you. The team messaging app’s 5 million daily users may be surprised to learn that Slack stands for Searchable Log of All Conversation and Knowledge, and that employers can buy access even to private channels and messages. Lila MacLellan explores the less-than-private future being ushered in by Slack and other so-called productivity tools.

Dating gets industrialized. Watching the new season of hit Netflix series Master of None, Annalisa Merelli was struck by how well the show captures regional attitudes toward romance. In Italy, she says, “the emphasis is more about looking for love and less about looking to be in a relationship.” In New York City and other urban centers, by contrast, online dating makes singles decidedly more mercenary.


Sign up for the Cannes Daily Brief, our pop-up newsletter on the world’s premier celebration of creativity in advertising. Quartz journalists will be at the Cannes Lions International Festival of Creativity from June 19 to 23 to report on industry moments, trends, and surprises. Whether or not you’ll be on La Croisette, sign up to stay informed about what’s happening on the ground and what it means for the media business.


The sand supply is slipping through our fingers. Sand is the world’s most widely consumed natural resource, after water, but rapid development is making it increasingly hard to find. From India’s “sand mafias” to America’s eroding beaches, the New Yorker’s David Owen takes a granular look at the world’s dwindling reserves of sand (whose chief ingredient, incidentally, is often quartz).

To lie is human. Though deceit seems like a defect in the matrix of social behaviors, you might want to applaud (silently at least) when your kid starts telling fibs. In this month’s National Geographic cover story, Yudhijit Bhattacharjee highlights how lying is actually an evolutionary advantage, and a sign that childhood cognitive development is on track.

Did a Turkish security detail attack US protesters? Footage says yes. The New York Times parsed videos and photos from multiple angles (paywall) to figure out what exactly happened in Washington, DC last week, when 24 men, including armed members of Turkish president Recep Tayyip Erdogan’s security detail, kicked and punched protesters outside the Turkish ambassador’s residence.

Trump used to be a decent speaker. The US president is known for his dubious syntax and free-association ranting, but it wasn’t always so. STAT put 30 years of unscripted Trump talk in front of psychologists and psychiatrists, who concluded that his speaking style has noticeably deteriorated. That could be the result of cognitive decline, though it could also be stress, anger, exhaustion, or even deliberate strategy.

All hail ambient computing. After more than 25 years of writing a weekly tech column, Walt Mossberg, formerly of the Wall Street Journal and then Recode, has hung up his keyboard. He uses his final column to anticipate the age of ambient computing, in which technology is barely distinguishable as such. Within 20 years, Mossberg says, computers will be integrated into our daily lives the same way steel beams and engine blocks are today. Hello, Starship Enterprise.

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

CWS Market Review – May 26, 2017

CWS Market Review

May 26, 2017

“The single greatest edge an investor can have is a long-term orientation.”
– Seth Klarman

On Thursday, the S&P 500 closed at yet another all-time high. The index is already up 7.8% this year, and we’re still in the merry month of May. Last week, the market had a slight jitter, and I thought the recent quiet period might be coming to an end.

Not so.

On Wednesday, in fact, the S&P 500 was on track for one of its narrowest days (meaning the difference between the daily high and low) in decades, but an afternoon surge put that off. Last week, Wall Street was alarmed when the Volatility Index jumped above 16. But once again, the index collapsed. On Thursday, the VIX closed at 9.99. That’s only the seventh sub-10 close in the last 20 years.

It’s as if the low-volatility, slowly upward-trending market is reasserting itself after a momentary disruption. No matter what happens, we keep returning to a market of micro changes that are mostly rising.

In this week’s issue, we’ll look at two of our recent Buy List earnings reports, from HEICO and Hormel Foods. Even though the report from HEICO was quite good, and the report from Hormel was mediocre, both stocks fell. Such is Wall Street. I’ll have more on that in a bit.

But first, I want to discuss this week’s Fed minutes, and what the central bank plans to do with its enormous balance sheet. I still think the Fed is making a big mistake by raising interest rates next month. Let’s hope cooler heads prevail.

What Will Happen to the Fed’s $4.5 Trillion Balance Sheet

On Wednesday, the Federal Reserve released the minutes of its last meeting. The minutes revealed largely what Wall Street had expected, and I feared. The Fed acknowledged the weak spots in the economy, but it still sees the need for another rate hike. I just don’t get it.

If the rate hike happens, and I’m afraid it will, then this would be the fourth hike of this cycle. The Fed seems to believe that the sluggishness in the economy during the first quarter will soon pass. I sincerely hope they’re right, but I haven’t seen the evidence just yet. I think the Fed has become overly concerned about the idea of being “behind the curve.” Chairwoman Yellen has said that if we don’t raise rates beforehand, then we’ll require faster rate increases later. What’s so awful about that?

I should be clear that one rate hike probably won’t sink the economy. Even after a fourth hike, real interest rates will still be quite low by historical standards. The facts are clear: wage growth is iffy, inflation isn’t a problem, and there are few signs of an economy overheating.

I like to keep an eye on the spread between the two- and ten-year Treasury yields. Over the last 30 years, whenever the spread turns negative, the economy has soon gotten bad. The current spread suggests the Fed can raise rates four more time. That would be three after a rate hike in June. I suspect that means that a rate increase wouldn’t hurt the economy, but it decreases our breathing room for further hikes.

What was interesting about these Fed minutes is that they give us a preview of what the Fed intends to do with its massive balance sheet. Let me rephrase that: the Fed’s gigantic, massive, world-devouring, $4.5 trillion balance sheet. The central bank has been reinvesting the proceeds of its bond holdings into still more bonds. The plan presented at the FOMC meeting is to pull the plug on all that reinvesting. In other words, just let the current holdings mature.

According to Binyamin Appelbaum at the New York Times, the Fed “would begin by keeping a fixed amount of the monthly proceeds and then increase the cap every three months until proceeds were no longer being reinvested.” What’s the downside of this? Probably not much, assuming the economy avoids a recession. That’s even more reason why the Fed should hold off raising interest rates next month. Now let’s take a look at this week’s Buy List earnings reports.

HEICO Earns 53 Cents per Share

After the bell on Tuesday, HEICO (HEI) reported fiscal Q2 earnings of 53 cents per share. That was three cents better than Wall Street’s estimate. The details look pretty good. Net sales rose 5% to $368.7 million. For the first half of the year, net sales are up 8%. I was pleased to see HEICO’s operating margin edge up from 19% a year ago to 20.8% for this year’s Q2.

Laurans A. Mendelson, HEICO’s Chairman and CEO, commented on the Company’s second-quarter results, stating, “We are very pleased to report record quarterly results in consolidated net sales, operating income and net income driven by record net sales and operating income at both operating segments. Our outstanding performance principally reflects increased demand and operating efficiencies within both of our operating segments, as well as the excellent performance of our well-managed and profitable fiscal 2016 acquisition.”

Best of all, HEICO raised its full-year guidance. This was the second increase this year. Unfortunately, the company doesn’t guide for EPS, but they do for a few other metrics.

HEICO now sees net sales rising this year by 8% to 10%. The previous forecast was 6% to 8%. For net income, HEICO projects growth of 12% to 14%, up from 9% to 11%. HEICO also projects cash flow from operations of $270 million. That’s up $10 million from the previous forecast.

Last year, HEICO earned $1.86 per share. If we assume no change in shares outstanding, that implies 2017 EPS of $2.08 to $2.12. Wall Street had been expecting $2.05 per share.

Unfortunately, shares of HEICO dropped 3.4% on Wednesday. I listened to the earnings call, and it seemed fine to me. Perhaps some folks were expecting more. I can’t complain too much about the share price, considering HEI hit a new high on Tuesday. Perhaps the drop was due to some price jitters. I’m lifting my Buy Below on HEICO to $75 per share.

Shares of Hormel Drop on Turkey Issues

On Thursday morning, Hormel Foods (HRL) reported fiscal second-quarter earnings of 39 cents per share. That was a penny below expectations. The culprit is apparently an oversupply of turkeys. Hormel’s Jennie-O Turkey Store saw its volume drop 6% and sales fell 8%.

Turkey prices are near a seven-year low. The issue is that some folks were afraid of another outbreak of avian flu. As a result, they ramped up production. To their credit, Hormel acknowledged the problem and was careful to explain that it’s not a long-term one.

This was, by no means, a lousy quarter for Hormel. Their grocery-products division did quite well, as did their international business. I often tell people that Hormel is a lot more than Spam. Well, it’s a lot more than turkey as well. Most importantly, the company is standing by its full-year forecast of $1.65 to $1.71 per share. However, they now say they expect results to be at the low end of that range.

Shares of Hormel get dinged for a 6.4% loss on Thursday. I’m not bailing out at all. This is still one for the long term, but I will lower my Buy Below on Hormel Foods down to $35 per share.

Buy List Updates

One of the lessons of investing is that periodically, the market freaks out. Sometime the reasons are good; many times, they’re not.

Last September, shares of Cognizant Technology Solutions (CTSH) plunged after the company said that an internal investigation revealed that the company may have violated the U.S. Foreign Corrupt Practices Act. Cognizant notified the SEC and DOJ. The same day, the company’s president resigned.

That day, the stock got crushed. At one point, CTSH dropped down to $45.44, which was a loss of 17.4% for the day. By the closing bell, the stock had shed 13.3%.

The good news is that we waited the mess out, and on Thursday, CTSH is at a new 52-week high. The stock is up 47% from its post-plunge low.

To quote Warren Buffett, “the stock market is designed to transfer money from the active to the patient.”

I also wanted to highlight the surge in Stryker (SYK). This company doesn’t make a lot of news, but it’s been a steady winner for us. The shares have rallied 32% since mid-November. The company has turned out good earnings reports, plus we got a dividend increase. The shares just closed at another 52-week high.

Shares of Alliance Data Systems (ADS) got a nice boost on Thursday after Signet Jewelers said it was selling ADS $1 billion worth of prime accounts. That represents 55% of Signet’s credit portfolio. The two companies agreed on a seven-year deal in which ADS will become the primary credit source for Signet’s business. Shares of ADS rallied 3.3% on Thursday.

The board of directors at Cerner (CERN) approved a $500 million share-buyback plan. At the current price, the plan represents 2.3% of CERN’s outstanding shares. CEO Marc Naughton said, “Given our strong balance sheet and expected strong cash flow, we are well positioned to continue investing in growth while also returning value to shareholders through share repurchases.”

Over the weekend, Barron’s highlighted Ingredion (INGR). The stock is a favorite of David Anguilm, a portfolio manager:

One favorite is Ingredion (INGR), which makes sweeteners and nutrition ingredients, like ones that make crackers crisper, and pharmaceutical products like intravenous solutions. The stock has pulled back amid concerns about changes in foreign trade. Anguilm sees demand rising from a growing middle class in emerging markets and aging populations in the developed world.

Ingredion “generates strong and consistent cash flows, has a healthy balance sheet, and has a history of returning cash to shareholders,” he says. Ingredion yields 1.7% but has grown its dividend by 170% over the past five years. Its payout ratio is 26% of earnings, “which we believe will allow for attractive dividend growth in the years ahead,” says Anguilm, who recently added to the fund’s position.

That’s all for now. The stock market will be closed on Monday for Memorial Day. I’m taking some time off, so there will be no issue next week. The Memorial Day weekend traditionally marks the beginning of summer. On Tuesday, we’ll get the latest reports on personal income and spending. On Thursday, we’ll get the ADP payroll report, plus the ISM report for May. Then Friday is Jobs Day, when we’ll get the latest employment figures for May. 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

#G7 summit, #India’s new bridge, anti-“and” crusade

Good morning, Quartz readers!


World leaders converge in Sicily for the annual G7 summit.Climate change and international trade policy are on the agenda for the two-day event. US president Donald Trump is skeptical of both issues.

AlphaGo goes for the sweep. The suspense during Saturday’s match between Google’s Go-playing AI and world number one Ke Jie will be minimal, after AlphaGo swept the first two games. Today, the AI will compete against a team of top humans working together.

India’s longest bridge opens near the disputed border with China. It runs from Assam across a Brahmaputra River tributary to Arunachal Pradesh, which China has claimed as South Tibet. Stretching 9.2 km (5.7 miles), the tank-ready bridge will make it easier for India to send troops, weapons, and equipment to the northeast state—and keep an eye on its neighbor.


A US appeals court declined to reinstate Trump’s travel ban.Judges confirmed a lower court ruling that the ban discriminates on the basis of religion. Trump has vowed to fight the ruling, and the case will likely make its way to the Supreme Court.

The FBI turned its attention to Jared Kushner. It believes Trump’s son-in-law and senior adviser has significant information related to its probe into Russia meddling in the 2016 US presidential election and related matters. While Kushner hasn’t been accused of wrongdoing, the FBI’s interest in him brings the investigation closer to not just the White House, but also the Trump family circle.

Nissan could fetch $1 billion for its stake in a rechargeable-battery unit. The carmaker owns 51% of Automotive Energy Supply, a venture with NEC that makes lithium-ion batteries for electric cars, including the Nissan Leaf. It’s nearing a deal to sell the stake to a Chinese private-equity firm, according to Bloomberg. Beijing wants China to produce more such batteries.

Greg Gianforte won the Montana race for US Congress despite body-slamming a journalist. The Republican millionaire was charged on Wednesday after assaulting Guardian reporter Ben Jacobs, whose questions were apparently annoying. Montana’s three largest newspaper rescinded their endorsements for Gianforte afterwards, but he won anyway.


Akshat Rathi on the Chinese company training US coal miners to become wind farmers: “If you want to truly understand what’s happening in the energy industry, the best thing to do is to travel deep into the heart of American coal country, to Carbon County, Wyoming (yes, that’s a real place).” Read more here.


Mallrats can rejoice / Best Buy shows retail’s not dead / Sears? Um, not so much.


The $11 million budget for Star Wars was the best film investment ever made. The film, released 40 years ago, pulled in almost $2 billion and spawned a money-making empire.

NAFTA is good for America—and Canada and Mexico can explain why. The countries’ foreign ministers are debunking Trump’s myths about trade.

Saudi Arabia is OPEC’s weakest link. The looming IPO of Saudi Aramco will make it impossible to support the cartel’s attempts to cut production.


The World Bank’s chief economist was demoted for his crusade against “and.” Paul Romer pushed staff to write more clearly and avoid “Bankspeak.”

Scientists have discovered the first snakes that hunt in packs.They hang from the mouths of caves in Cuba to catch bats.

Texas has approved the hunting of feral pigs from hot air balloons. They’re a lot more stealthy than helicopters.

A Swiss watchmaker is trolling Apple with a faux-smartwatch.The analog timepiece from H. Moser & Cie “cultivates this ambiguity in irreverent fashion.”

Kuwaiti officials caught a drug-smuggling pigeon wearing a backpack. It was carrying nearly 200 pills over the border from Iraq.

Our best wishes for a productive day. Please send any news, comments, grammatical crusades, and pigeon smuggling accessories to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Trump meets NATO, Brazil protests, festival beer pipeline

Good morning, Quartz readers!


Donald Trump meets with NATO leaders in Brussels. The organization that the US president once called “obsolete” is pulling out all the stops with a ribbon-cutting ceremony for its new headquarters, followed by a ceremonial dinner. Trump will also participate in a European Union meet-and-greet.

Aboriginal Australians discuss constitutional recognition.During a three-day meeting at the sacred landmark of Uluru, leaders will hammer out a plan to be presented to prime minister Malcolm Turnbull. That could lead to a referendum to make changes to Australia’s constitution.

OPEC meets to discuss its production-cut agreement. The Organization of the Petroleum Exporting Countries is expected to recommend (paywall) a nine-month extension to an agreement that expires in June. The pact doesn’t seem to be working: Prior to the meeting, oil prices fell to just $55 a barrel, thanks in large part to US shale drillers.


The US challenged Beijing’s claim in the South China Sea. In the first such action under Trump, the US sent a warship within 12 nautical miles of the Spratly archipelago’s Mischief Reef, atop of which China has built one of its militarized artificial islands. The move was long expected. Going against international law and norms, Chinaclaims nearly all of the sea as its own.

Protesters set fire to a Brazilian ministry. Tens of thousands of demonstrators calling for president Michel Temer’s removal clashed with riot police, resulting in widespread damage to government buildings in the capital, Brasilia. Temer deployed the army to restore order. Demonstrators believe he condoned paying off a potential witness in a massive corruption probe.

A Republican candidate for US Congress was charged for body-slamming a reporter. Greg Gianforte, running for Montana’s lone House seat in a special election, allegedly attacked (paywall) Ben Jacobs, a reporter for the Guardian, during a final rally on the eve of today’s vote. An audio recording reveals the nominee saying “I’m sick and tired of you guys!” followed by the sounds of a physical struggle.

The US charged seven people with economic espionage. The defendants, including four Americans, allegedly stole trade secretsfrom a Texas-based marine technology firm and shared the information with a Chinese company. A day earlier, a Chinese womanwas arrested for sending restricted US space and military communications technology to Hong Kong.


Tim Fernholz explains Trump’s $2 trillion accounting error.“Here’s the problem. You’re counting on the tax cuts generating $2 trillion in extra revenues to compensate for the cost of the tax cuts. You’re also counting on them generating $2 trillion in extra revenues to help close the deficit. That $2 trillion can’t do both jobs at once.”Read more here.


Downgraded China / Isn’t dejected. But it’s / Degrading Moody’s


We can’t let ISIL shape the news. Media coverage of terrorist atrocities is playing right into the Islamist group’s hands.

For all the chest-thumping, India cannot win a conflict against Pakistan. “War is a strange game, in which the only winning move is not to play.”

The alt-right is weaponizing irony to support its fascist agenda. Humor and ambiguity are some of the movement’s favorite tactics.


See the future of life-changing creativity at Lions Health, from pioneering doctors and medical innovators to award-winning creatives and some of healthcare’s biggest brands. This is the must-attend event for creatively courageous people working in pharma, healthcare, and wellness communications taking place on June 17 and 18 in Cannes. Get your pass here.


A German heavy-metal festival is building its own beer pipeline. The 75,000 Wacken Open Air attendees are expected to drink about 5.3 liters of beer each.

Psychedelic mushrooms are the safest drugs for getting high.Just 0.2% of users needed medical attention in a recent survey.

Norway’s central bank has created an ode to cod. The ridiculously catchy music video promotes a new cod-themed banknote.

A Chinese company is offering free training for US coal miners to become wind farmers. In the fittingly named Carbon County, Wyoming, no less.

Flamingos are more steady on one leg than two. They can effortlessly maintain the pose while sleeping—and even when dead.

Our best wishes for a productive day. Please send any news, comments, weaponized irony, and catchy marine tunes tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

#China’s downgrade, #UK’s terror threat, “cauliflower rice” rage

Good morning, Quartz readers!


A Taiwan court rules on same-sex marriage. A Taiwan courtrules on whether same-sex couples can marry. Judges will consider a lawsuit filed by gay rights activist Chi Chia-wei. If the answer is yes, Taiwan would become the first country in Asia to have marriage equality.

A senior Japanese banking executive steps down. Takashi Oyamada, the head of the Bank of Tokyo-Mitsubishi UFJ, is expected to announce his resignation for health reasons after less than a year on the job. The move may upset succession planning at parent company Mitsubishi UFJ Financial Group, one of the world’s largest banks.

Marks & Spencer reports earnings. Analysts expect the high-street apparel maker to report a drop in profit as clothing sales decline. Investors are more optimistic about results for Tiffany, since the jeweler has proven largely immune to online competition.


Moody’s downgraded China for the first time since 1989 on debt risk. The ratings agency warned that the nation’s financial strength would erode, “with economy-wide debt continuing to rise as potential growth slows.” Though the downgrade will likely increase the cost of borrowing for the government and state-owned enterprises, it keeps China within investment-grade status.

The UK raised the terror threat level to “critical.” Further attacksmight be imminent, said prime minister Theresa May, and military personnel will be deployed to protect key sites. The move comes after a suicide bomber killed over 20 people at a concert by US singer Ariana Grande in Manchester.

A video-game toolmaker scored a $400 million investment.Unity Technologies, based in San Francisco, is now valued at $2.6 billion following the hefty investment by private equity firm Silver Lake. The startup offers not games but the software used to make them, meaning its success depends more on the overall industry than individual titles. Its software underpins Pokémon Go.

Rodrigo Duterte declared martial law on the southern island of Mindanao. The Philippines president made the move as security forces fought to capture Isnilon Hapilon, the leader of an ISIL affiliate in Southeast Asia. Duterte had to cut short his official visit to Moscow, but he still managed to squeeze in a meeting with his “favorite hero” president Vladimir Putin.

The US sued Fiat-Chrysler for emissions cheating. More than 100,000 diesel vehicles—Ram 1500s and Jeep Grand Cherokees from 2014, 2015, and 2016—were allegedly sold with “defeat-device” software. Now, the US Department of Justice is suing the company for violating the Clean Air Act.


Ana Campoy on the surprising demographics of illegal immigration in the US: “By the end of fiscal year 2016, some 630,000 visitors had failed to leave the US, far exceeding the 415,000 people who were intercepted crossing the US-Mexico boundary during the same time period. According to Homeland Security, Canadians, not northbound Latin Americans, were the biggest group of violators.” Read more here.


Should you consider bitcoin for your retirement savings? It’s a risky way to achieve steady asset growth but also a bet on atransformed financial sector.

…And what about asteroid mining? Goldman Sachs sees a trillion-dollar opportunity for investors.

India is ready and eager to welcome Tesla. CEO Elon Musk was “misinformed” about the country’s “Made in India” trade restrictions.


Join top venture capitalists, a former US treasury secretary, and fintech unicorns like Credit Karma, Palantir, and Robinhood for CB Insights’ Future of Fintech conference in New York City June 26-28. They’ll be discussing all things fintech, including insurtech, wealth management, alternative lending, and product design. You can use the exclusive promo code FoFQuartzto save $1,500 off your ticket.


The rice industry is furious at “cauliflower rice.” The faux grain—made by finely chopping cauliflower florets into tiny granules—may end up in court.

More than half of Americans are getting the recommended amount of exercise. For the first time ever.

India’s horrific rush hour is primetime for Netflix. Peak streaming occurs at 5pm, the earliest of any market, as users cope with lengthy commutes.

Some mango maniacs take their obsession to another level.Under the patronage of the Sheherwali Jains, Murshidabadi mangoes are an icon of flamboyant sophistication.

Conservative Americans are furious that their favorite sitcom has been canceled. Last Man Standing is standing no longer.

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