#Germany’s gay-marriage vote, #Taiwan’s arms deal, cockatoo drummers

Good morning, Quartz readers!


An update on euro zone inflation. European Central Bank president Mario Draghi says the improving economy will likely drive up prices as “deflationary forces have been replaced by reflationary ones.” Yet analysts expect the June inflation rate to drop to 1.2%from 1.4% in May.

Germany’s parliament votes on same-sex marriage. The move follows a reversal from chancellor Angela Merkel, who urged lawmakers to vote according to their conscience despite a long history of opposition by her Christian Democratic party.

Delivery Hero goes public. The Berlin-based company appears set to raise over $1 billion in its IPO today, giving Germany’s venture scene a much-needed victory. Delivery Hero connects diners with restaurants through its app and operates in 40-plus countries. Startup incubator Rocket Internet owns 35% of the firm.


The US blacklisted Chinese companies for their dealings with North Korea… Among those to be essentially cut off from the US financial system are a bank, a shipping company, and a few individuals. Treasury secretary Steve Mnuchin insisted the move was not aimed at punishing China itself. A former US intelligence agentcalled the sanctions “extremely long overdue.”

…And approved a $1.4 billion arms sale to Taiwan. Despite the usual outrage from Beijing, the US State Department permitted dealsinvolving torpedoes, missiles, and early-warning radar systems. It was the first such authorization under US president Donald Trump, and the first since a $1.8 billion package in 2015.

Three Tepco executives appeared in court in Tokyo. They face criminal charges for professional negligence after the 2011 Fukushima nuclear disaster, which killed more than 40 people. All three have pleaded not guilty. The trial will likely take more than a year.

China’s manufacturing sector expanded at the quickest pace in three months. The official manufacturing Purchasing Managers’ Index hit 51.7 in June. That was up from 51.2 in May and marked the 11th straight month of expansion.


Nikhil Sonnad on the “wellness” products peddled to opposite ends of the political spectrum. “Many of the alternative-medicine ingredients in Gwyneth Paltrow’s Goop products are sold—with very different branding—on the Infowars store. That’s the site run by Alex Jones, the radio show host and conspiracy theorist.” Read more here.


Tough medicine for / Rite Aid. Spit out by Walgreen’s / is a bitter pill


India is better at protecting cows than women. A striking photo project questions the country’s priorities when it comes to religion and gender equality.

Can China save the US economy? While Donald Trump resists globalization, Chinese investors continue to pour billions into the American economy.

You don’t have to be a jerk to disrupt an industry. Steve Jobs may have succeeded despite his abrasive personality, not because of it.


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Male cockatoos flirt by playing dramatic drum solos. Scientists have captured footage of birds doing their best John Bonham impressions with sticks and seeds.

Dating apps can make you ugly. Rating people in advance makes them seem less attractive when you meet face-to-face.

Birds use cigarette butts as chemical weapons. Urban house finches use the pesticidal properties of nicotine to keep ticks and parasites out of their nests.

The World Bank is letting investors bet on pandemics. It issued$425 million in bonds that pay out less money if there are outbreaks of certain diseases.

The UK parliament is now business casual. The House of Commons voted to reform its centuries-old dress code—including making ties optional.

Our best wishes for a productive day. Please send any news, comments, unwanted ties, and dating-app photo strategies tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.


#Staples acquisition, US airline restrictions, bouncy castle arson

Good morning, Quartz readers!


Xi Jinping visits Hong Kong. His controversial first trip to the semi-autonomous territory as China’s president will mark the 20th anniversary of Britain’s handover. Widespread demonstrations by pro-democracy groups are expected.

Moon Jae-in meets with Donald Trump. The liberal South Korean president, elected in May, plans to discuss how to handle North Korea. Moon tends to favor engagement with Pyongyang but the US has rejected talks.

Ukraine’s central bank convenes after being hit by hackers.The National Bank of Ukraine will hold a monetary policy meeting in the wake of Tuesday’s Petya ransomware attack, which disproportionately affected the country.


The US announced plans to ramp up airline security. The Department of Homeland Security won’t ban carry-on laptops in response to a potential ISIL plot, but will require stringent newscreening measures for inbound international flights. If airlines and airports fail to enforce the new standards, the US threatened to bar personal electronic devices, even in the cargo hold.

A private-equity firm said it would buy Staples for $6.9 billion.Sycamore Partners is betting on the US office-supplies chain even as internet shopping roils the traditional retail sector. Staples’s store sales are dropping, but Sycamore sees potential in its delivery unit, which supplies companies directly.

Australian police charged the Vatican treasurer with multiple counts of historic sex abuse. Authorities in the state of Victoria summoned Australian cardinal George Pell to appear before a court in Melbourne. Pell denies the allegations. Considered the third-ranking official in the Catholic Church, he is the most senior member to face allegations of sexual abuse.

Japan reported slowing retail sales. After a strong showing in April, when they shot up 3.2%, retail sales last month increased just 2% from a year ago. Median forecasts had called for 2.6%. Still, it was the seventh straight month of rising retail sales, a trend analysts expect to continue.


Max de Haldevang on a US crackdown on shell companies with ties to Russia. “President Donald Trump, who would have to sign the bill into law, has long made ample use of shell companies, which obscure exactly what he owns and owes. A recent analysis by USA Today found that 70% of buyers of Trump properties in the last year were shell companies.” Read more here.


You should never name a company after yourself. It can lead toall sorts of legal disputes and isn’t worth the potential costs and hassles.

Brown actors like Aziz Ansari have reduced brown women to a punchline. In romantic comedies starring Indian actors, it’s often white women who are pursued.

Jeff Bezos could teach Donald Trump a thing or two about politics. The Amazon founder has been quietly winning points in Washington.


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Two New York preschools now accept bitcoin. Parents requested the payment option and are now using it.

An Australian bouncy castle kingpin is being charged with arson. He firebombed his competition and then his own business, to collect the insurance.

Couples who argue while sleep-deprived risk seriously damaging their health. It helps if at least one partner has had enough shut-eye.

Airport security is tough on scientists. Researchers often travel with awkward models, including 3D-printed mouse penises.

Thailand’s government blocked The Great Dictator on YouTube. A viewing of the Charlie Chaplin satire had been plannedto celebrate the anniversary of the end of absolute monarchy.

Our best wishes for a productive day. Please send any news, comments, bitcoin tuition, and 3D-printed mouse penises tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

#US threatens #Syria, #Brazil’s beleaguered president, #Hufflepuff pride

Good morning, Quartz readers!


“Davos in Dalian” begins. The World Economic Forum’s annual summer meeting in China kicks off, with discussions focused on innovation and technology. In his opening remarks, premier Li Keqiang echoed president Xi Jinping’s January speech by praising globalization.

Janet Yellen speaks in London. Investors hope the US Fed chair will maintain an upbeat tone despite weak US economic data.

Google faces a record-breaking EU fine. Its parent company, Alphabet, will be charged with infringing on antitrust regulations for anticompetitive behavior and manipulating its search results.


The US warned Syria against another chemical weapons attack. In a statement, the White House said it has observed “potential preparations for another chemical weapons attack” from the Assad regime and told Syria it would “pay a heavy price” if the government proceeds with it. It’s not clear how the US detected the plans.

The president of Brazil was charged with corruption. The nation’s federal prosecutor accused Michel Temer of accepting $11 million (paywall) in promised bribes from the Batista family conglomerate, in exchange for assistance with its business dealings. The case will proceed to trial if the lower house of Brazil votes with a two-thirds majority in favor of one.

Three CNN journalists resigned after retracting a piece about Russia. Thomas Frank, Eric Lichtblau, and Lex Haris each left their posts after publishing a story linking entrepreneur and Trump transition team member Anthony Scaramucci to Russia-related investigations, which CNN later retracted. Scaramucci later tweeted that he accepted CNN’s apology.

Narendra Modi visited the White House. In his first face-to-face meeting with India’s prime minister, Trump laid the groundwork to boost military relations despite differences over trade, climate, and immigration. He also encouraged Modi to reduce trade barriers, stressing a relationship that is “fair and reciprocal.”

A Republican senator blocked weapons sales to the Middle East. Bob Corker, chairman of the foreign relations committee, said he would halt arms deals until disputes between Qatar and its Arab neighbors are resolved. He warned the conflict was undermining efforts to combat the Islamic State.


Leah Fessler on what conference rooms reveal about a company’s culture. “Two weeks ago, in an act of somewhat desperate symbolism, Uber board member Arianna Huffingtonannounced that the ride-sharing service was renaming its ‘War Room’ the ‘Peace Room’ as part of a broader effort to reform its tarnished image.” Read more here.


The back-pain industry is a $100 billion hoax. Massages, chiropractors, painkillers, and injections obscure a simple solution: moving.

Vladimir Putin is the greatest Russian in history. Polls show thepublic’s esteem for their president is rising.

Hufflepuffs are the best. It’s time to rethink the humble, hardworking heroes of the Harry Potter novels.


Salvador Dali’s body is being exhumed. DNA is needed to settle a paternity suit filed by a Spanish tarot card reader who claims she’s the artist’s daughter.

Facebook’s AI created its own language. Chatbots accidentally veered from their human-coded scripts while talking among themselves—and it turns out they’re great negotiators.

Climate change is spreading Lyme disease. Ticks carrying the disease are traveling farther and reproducing faster due to warm winters.

Eternal sunshine of the spotless snail mind. Scientists found a way to delete snails’ associative memories, which may have implications for humans with PTSD.

Even ancient Greeks thought society’s best days were behind them. Athenian plays were plagued by comic nostalgia.

Our best wishes for a productive day. Please send any news, comments, friendly chatbots, and fond snail memories to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Bespoke Brunch Reads: 6/25/17

Systemic Musings

Chart of the Week: FDI in Financial Centers (IMFBlog)

Foreign direct investment has surged over the last decade or so, but a disproportionate share of that investment (which typically has huge benefits for recipients in the form of technology transfers and productivity gains) has been finding its way to financial centers. [Link]

Fed raising the stakes (barnejek’s blog)

An argument that the Fed has not been missing its inflation target, reflexivity of markets, and a the impact of a higher inflation target. [Link]

Globalisation, inflation & political choices by Duncan Weldon (Medium)

The key question: what drove low and stable inflation in the wake of the 1980s? The traditional explanation is better monetary policy, but globalization may be a better one. [Link]

This Week In History

Bear Stearns Staves Off Collapse of 2 Hedge Funds by Vikas Bajaj and Julie Creswell (NYT)

The Times’ recounting of the events that kicked off the subprime crisis: Bear Stearns’ bailout of two hedge funds deeply invested in mortgage-backed securities. [Link; soft paywall]


Stock Picking Is Dying Because There Are No More Stocks to Pick by Jason Zweig (WSJ)

An argument that fewer listed stocks makes picking the winning ones harder. It should be noted, though, that this appears to be a phenomenon only found among the smallest listed stocks. [Link]

Short-Seller Nailed Home Capital, Then Got Stung by Buffett by Noah Buhayar (Bloomberg)

Marc Cohodes (who we talked to on Bespokecast recently, link) is on the wrong side of Buffett, who has thrown a lifeline to the struggling Home Capital Group. [Link]


Political Divisions in 2016 and Beyond by Lee Durtman (Voter Study Group)

A comprehensive review of attitudes and ideology of 2016 voters, filled with interesting charts and data on the electorate’s views. [Link]

How Tinder Could Take Back the White House by Yara Rodrigues Fowler and Charlotte Goodman (NYT)

A fascinating – and concerning – development from the UK election: chatbots that borrow a Tinder user’s profile (with permission from the Tinder usr) as a way to communicate with potential voters. [Link]

Labor Markets

‘I Need More Mexicans’: A Kansas Farmer’s Message to Trump by Michelle Jamrisko (Bloomberg)

With half of the US agricultural labor force estimated to be undocumented immigrants, farmers are facing an impossible task finding the workers necessary to get crops out of the ground. [Link]

Uber Founder Travis Kalanick Resigns as C.E.O. by Mike Isaac (NYT)

Following a damning report on internal culture from former Attorney General Holder and chaos on the Uber board, the CEO has extended a leave of absence into full departure from management of the ride-sharing behemoth. [Link; soft paywall]

Environmental Activities

The Mammoth Pirates by Amos Chapple (Radio Free Europe/Radio Liberty)

A remarkable review of mining for mammoth, a practice which is seeking to meet insatiable demand for ivory without harvesting elephants. The mining does come at a cost though. [Link]

Why the World’s Rivers Are Losing Sediment and Why It Matters by Jim Robbins (Yale Environment 360)

Background on the build-up of sediment behind dams around the world, and its negative consequences for downstream agriculture, buffer areas like wetlands, and other parts of the global ecosystem. [Link]


Obesity rates are skyrocketing, and dietitians say a key factor may be to blame by Erin Browin (Business Insider)

It’s a simple truism that if you surround yourself with junk food, it’ll be hard to resist it. That’s a huge problem for most of the world as cheap, easily accessible processed foods are constantly available and constantly tempting for dieters. [Link]

The Fake Rolex of Canned Foods by Mari Uyehara (Taste)

San Marzano tomatoes are everything in sauces, but most Americans don’t hold them in the same light; one of the reasons is that most San Marzanos are not what they claim to be. [Link]

Media Matters

Media Startups Try a Lower-Cost Model: Unpaid Student Writers by Austen Hufford (WSJ)

The hot new thing in content production: don’t pay people to produce it. [Link; paywall]

New York Times Sends Cease & Desist Letter Over CalPERS’ Massive Copyright Infringement; Potential Damages Eight Figures for Times and WSJ Each; Theft Extends to Virtually Every News Publication in US by Yves Smith (naked capitalism)

Remarkably, CalPERs (California’s pension system) ran a wholly illegal website for disseminating more than 50,000 articles from media organizations via an internal server to 2700 members. [Link]

Devilish Details

Banks to vote on alternative to Libor as new rate benchmark by Karen Brettell (Reuters)

Efforts are underway to pick a new alternative to the panel-submitted LIBOR rate. [Link]

The Snowballing Power of the VIX, Wall Street’s Fear Index by Asjylyn Loder and Gunjan Benerji (WSJ)

We had no idea that the VIX index emerged due to inquiries from Mark Cuban, but that’s a fact. An excellent summary of the VIX index’s history. [Link; paywall]


How to Survive the Retail Crisis: A Master Class from T.J. Maxx by Suzanne Kapner (WSJ)

Off price retailers have been able to generate growth and solid margins despite brutal performance for traditional boutiques, department stores, and other high-dollar retailing operations. [Link; soft paywall]

Amazon Turns to Subscription Boxes to Dominate Clothing Market by Kim Bhasin and Specer Soper (Bloomberg)

Prime Wardrobe allow shoppers to pick 3 or more pieces of clothing, try them for 7 days, and return them, a direct shot at a number of start-ups attempting to groom consumers into similar behavior. [Link; auto-playing video]

America’s Massive Retail Workforce Is Tired of Being Ignored by Sarah Jaffe (Racked)

An update on America’s largest employment sector, massive compared to other groups that get much more political attention, and arguably at much greater economic risk. [Link]

Get Some Rest

Hammocks Over Hikes This Summer by Emily Swanson and Beth J. Harpaz (AP)

Feeling tired, burned out, and in need of a lie-in? You’re not alone. Resting and relaxing is the most important vacation activity on Americans’ minds this summer. [Link]

Weird Market News

The Stock Market Speaks: How Dr. Alchian Learned to Build the Bomb by Joseph Michael Newhard (UGA)

An astounding paper that reveals how an investor identified the secret component of a new US nuclear weapon based on equity prices. [Link; 31 page PDF]

Have a great Sunday!

Bespoke Investment Group, LLC

105 Calvert Street, Suite 100

Harrison, NY 10528



Twitter: @bespokeinvest

Weekend edition—#Uber’s corrosive sexism, Millennial luxe, where Russian hackers test tactics

Good morning, Quartz readers!

Evidence grows that sexism stands as the gateway drug to the worst of corporate behavior, with Uber and its recently departed chief Travis Kalanick just the most recent egregious example. If the CEO can’t understand that an employee outing to a karaoke bar that alsofeatures escort services is a bad idea, who knows else what he might attempt? Now we do.

When a former Uber engineer told the world about the routine harassment she faced, Kalanick called the details “abhorrent and against everything Uber stands for.” Not true, then or now, it turns out. The ruthless approach to conquering international markets—and any plausible competitor—translated to a workplace where women were regularly demeaned. That’s the problem with corporate cultures that celebrate winning at all costs. It becomes increasingly difficult to tell where the playing field ends and the “locker room” begins.

At Fox News, Roger Ailes unashamedly counted among his cable-TV commandments that blonde newsreaders are best, and most optimally viewed when their bare legs are visible through the glass desks he demanded for the set. The later accusations of his sexually degraded underlings—a scandal that would engulf Ailes and Bill O’Reilly, his most prized on-air acolyte—astonished no one.

Uber’s board did what it must with Kalanick. But shakeups attack a symptom, not the disease. The damage of sexism at Uber may be under control now, but the factors that allowed it to thrive won’t be so easily undone.—John Mancini


The botanist’s last stand. Steve Perlman of Hawaii’s Plant Extinction Prevention Program has helicoptered, hiked, and rappelled his way across the islands to catalogue their most threatened native plant species. Zoë Schlanger explores what goes into preserving biodiversity, and the toll on those charged with its survival.

Is Amazon too big? Oliver Stanley visited John D. Rockefeller’s Kykuit estate to learn about the industrial baron of the 20th century and came home thinking about Jeff Bezos. In every age, ballooning companies have caught the eye of the US government, leaving founders no less wealthy but splintering their influence. Can a modern captain of industry learn from a tycoon’s past?

The new Millennial luxe. Luxury is about the subtle conveyance of good taste, access, and wealth, Marc Bain writes. All but the most exclusive items have lost their value as class signifiers. Brands trying to connect with younger elites are instead touting their products as “organic,” “ethical,” and “sustainable.”

Your ever-shrinking social circle. “The older we get, the person we spend the most time with is the one we see in the mirror,” Corrine Purtill and Dan Kopf report in their fascinating analysis of an existential truth, courtesy of new data from US Bureau of Labor Statistics. Fewer intimates can create lonelier twilight years—or more meaningful ones.

Uber would be nothing without Travis Kalanick. The deposed CEO reveled in pissing people off, writes Allison Griswold, but that’s what it took to disrupt a global industry. Politicians, drivers, customers, Tim Cook—no one was immune. And the company will forever be indebted to him.


Russian hackers are using Ukraine to practice global cyberwar. Power grids, government departments, the railway company, the port authority—all have been temporarily crippled in Ukraine in the last couple of years using methods of rapidly growing sophistication. As Andy Greenberg reports for Wired, security experts suspect these are all test runs by Russian hackers developing cyber-weapons that could take out swathes of Western infrastructure.

How tragedy begets crackdown. In an essay for Harper’s, Masha Gessen eyes the paranoid politics of the Trump era to remind “resisting” Americans that the US took its first tottering steps toward authoritarianism in the wake of 9/11. Rather than wait anxiously for the calamity of a new Reichstag fire, she advises, look long and hard at the security state, put in place by Democrats and Republicans, that has handed so much power to a president so feared.

One big risk in putting Saudis to work. Expats hold half the jobs in the kingdom, and phasing out foreign workers is a goal of the government as it diversifies beyond oil. Yet if more of its subjectsearn their own livings, Bloomberg’s Dana El Baltaji and Glen Carey argue, they may very well insist on a bigger voice in the affairs of state.

The faded promise of The Guardian in America. With its much-reduced staff buffeted by leadership changes, a lost sense of mission and the vagaries of the digital-ad business, Steven Perlberg declares in BuzzFeed News that the once high-flying Guardian US is a news outlet in search of purpose, highlighting a new wrinkle in the unfolding story of media in the digital age.

The opposite of fast fashion. In central Pennsylvania, the Amish have been basically wearing the same outfit for centuries. The academic fashion journal Vestoj explores the incremental and symbolic style iterations of a people who question “change for the sake of change,” traffic in small symbols of difference, and share and reuse clothing. The wisdom the rest of us might find there extends well beyond how we dress.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, fancy organic products, and slow-fashion suggestions to hi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone andAndroid.

#SpaceX’s next trick, no #Trump tapes, #Aussie toddler tablets

Good morning, Quartz readers!


For its next trick, SpaceX will launch two rockets in 48 hours.Elon Musk’s rocket company will show off its ability to carry cargo into space more frequently than its competitors. Meanwhile, India will launch a rocket carrying its 712 kg (1,600 lb) satellite, the Cartostat-2, along with 30 nanosatellites from over a dozen countries.

BlackBerry shares its quarterly results. The Canadian company is morphing from a smartphone maker to a software vendor focused on cybersecurity. Analysts expect a revenue drop of nearly 13% from the previous quarter, but also rapidly rising software sales.

The US releases data on new-home sales. A sharp drop in April suggested possible weakness in the market amid limited inventory and rising prices. But economists expect a rebound for May, with sales increasing about 5.4% (pdf).


Republicans in the US Senate released their health-care bill, finally. The legislation would hit poor voters even harder than the House version that passed in early May, and is particularly harsh on women. Majority leader Mitch McConnell wants a vote next week, but it appears the bill has insufficient support to pass in its current form.

An advisor of South Korea’s ousted president was sentenced to jail. Choi Soon-sil will spend three years behind bars for soliciting university favors for her daughter, a court in Seoul ruled. More convictions will likely follow in the influence-peddling scandal that brought down president Park Geun-hye. Choi also faces charges of accepting bribes for Park, who is on trial.

North Korea tested another rocket engine. US officials said the engine might be intended for use in an intercontinental ballistic missile capable of reaching American cities. Fielding such a missile is one of North Korea’s key goals, though experts believe it could still be years away from having reliable ICBM capability.

Donald Trump said there are no secret White House tapes. The US president ended weeks of speculation about possible tapes of his conversations with former FBI director James Comey by tweeting that he “did not make, and do not have, any such recordings.”


Corinne Purtill and Dan Kopf on the person we spend the most time with across our lifetimes: “Time with friends, colleagues, siblings, and children diminishes over the course of a lifetime. The older we get, the person we spend the most time with is the one we see in the mirror.” Read more here.


All the banks have passed / their stress tests. Clearly, we’re not /grading on a curve.


Robots are gaming human compassion. The push to humanize AI could dehumanize actual people.

Apple’s next big investment could reshape capitalism. Cashing in on Trump’s tax reform laws could fund the largest basic-income trial ever.

Millennials are the cheapest generation. Young people aren’t playing hard to get—they just don’t want your cars or houses.


An ancient Chinese dynasty had foreign slaves. A new studyshows the Shang dynasty exploited non-locals’ labor before beheading them as human sacrifices.

Opioids killed as many Americans last year as the last three US wars combined. Only 10% of addicts get treatment (paywall).

One-third of Australian preschoolers own a smartphone or tablet. Parents distract their kids with screens to get their own work done.

No one in Britain’s royal family wants to rule. Nevertheless, Prince Harry says his family will “carry out our duties at the right time.”

The successor to the fidget-spinner is seriously dangerous.Chinese parents are demanding a ban on the viral “toothpick crossbow.”

Our best wishes for a productive day. Please send any news, comments, humanized AI, and toothpick crossbows 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 – June 23, 2017

CWS Market Review
​​​​​​​June 23, 2017

“Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.” – Peter Lynch

The stock market easily survived the Federal Reserve’s recent rate hike. In fact, the S&P 500 touched a new all-time high as recently as Monday. However, aside from the new high, the chief characteristic of the market continues to be its very low volatility.

Simply put, the market ain’t doing a whole lot of moving around lately. This seems at odds with so many of the headlines we see coming from around the world. Here’s a remarkable stat: seven times in the last eleven trading sessions, the S&P 500 has closed up or down by less than 0.1%. That’s a very small move.

If the market were to average daily changes of 0.1%, that would mean the Volatility Index (VIX) should be less than 2. The takeaway is clear—we’re living in a volatile world with extremely chill financial markets.

Frankly, we’re in the midst of a lull period for the stock market. I don’t expect much action from the markets until the second-quarter earnings season begins in another few weeks. While there hasn’t been a great deal of action for the overall market, there have been some growing currents underneath the surface.

As the second quarter wraps up, Wall Street is experiencing a pronounced sector rotation. The tech sector is getting wobbly. Healthcare stocks are finally coming to life, and oil is dropping like a stone. Also, many retail stocks are in full retreat. I’ll tell you what it all means. I’ll also run down several of our Buy List stocks. Plus, I have several new Buy Below prices for you. But first, let’s take a closer look at where the economy and markets stand at the middle of the year.

The Stock Market’s Quiet Sector Rotation

The market continues to be quiet and upward. In the last 43 trading says, the VIX has closed over 11 just four times. The S&P 500 has already set 23 new highs this year, and we’re not even at the midway point yet. By historic standards, that’s a high pace.

But not all stocks are equally calm. Two weeks ago, the Tech Sector got dinged for a 2.5% loss. Actually, the selloff on June 9 wasn’t that big by historic standards, but it was gigantic by 2017 standards. Tech stocks are starting to settle down, but there could be another move down for them. Fortunately, Microsoft (MSFT), our large-cap tech position on the Buy List, is holding up well. I’m going to keep our Buy Below for Microsoft at $70 per share. This has been a very solid performer for us. I’m looking forward to another good earnings report next month.

The healthcare sector badly lagged the overall market from the middle of 2015 until the early part of this year. Since then, healthcare has become increasingly popular. In fact, the Healthcare Sector ETF (XLV) has now beaten the overall market for seven days in a row. A lot of this, naturally, surrounds the debate about healthcare reform. I won’t speculate on the political debate, but the U.S. Senate has moved forward with a bill of its own. The bill in its current form probably won’t go very far, but it could serve as the starting point for a negotiation. In any event, many healthcare stocks are acting much better.

On our Buy List, the healthcare rally has been good news for Express Scripts (ESRX). If you recall, the pharmacy-benefits manager dropped more than 10% after they said they’re losing their largest customer. The shares have gained back more than 8% since then. This week, I’m raising my Buy Below on Express Scripts to $69 per share.

I think it’s interesting that healthcare is improving while retail is falling. Perhaps rising premiums are taking a bite about out of shopping plans.

Perhaps one of the more surprising moves lately has been the downward spiral for oil. Many traders had assumed that OPEC had finally wrested control of oil from the bears. Not so. Since May 23, the price for spot West Texas crude has fallen from $51.47 per barrel to $42.74 per barrel. This week, oil touched a 10-month low. This is especially bad news for OPEC because it took a lot of arm-twisting to get all the members on board for the production cuts. Now prices are lower than when they started.

This has been especially difficult for energy stocks. The Energy Sector ETF (XLE) broke $76 per share late last year. This was part of the Trump Rally. This week, the XLE broke below $64 per share. Fortunately, we don’t have any major energy stocks on our Buy List. This wasn’t a prediction on the macro economy from me. Rather, I just didn’t see any energy stocks I liked at the moment.

Amazon’s (AMZN) surprising move to purchase Whole Foods (WFM) has shaken up many consumer and retail stocks. The market apparently thinks this is bad news for stocks like Hormel Foods (HRL) and JM Smucker (SJM). I don’t see why, but the market doesn’t always think these things though.

Shares of SJM have dropped for the last seven days in a row to reach a new 52-week low. The shares now yield 2.5%. This looks to be a good buying opportunity for SJM. I’m going to lower my Buy Below on Smucker to $131 per share.

The real loser in the retail sector of late has been Ross Stores (ROST). I still like Ross a lot, but the stock has been a dud lately. In the last three weeks, ROST has lost over 12%. The deep discounter has proven itself to be one of the few “Amazon resistant” retailers out there. Let’s also remember that Ross has recently raised its full-year guidance, plus they increased their dividend by more than 18%. I’m going to drop my Buy Below on Ross down to $59 per share this week. The next earnings report is due out in mid-August.

Since the beginning of June, the Consumer Discretionary Sector (XLY) and Consumer Staples (XLP) have both been laggards. I’m not sure if this trend will last. I noticed, for example, that this week, we got a very good existing-home sales report. For May, existing-home sales rose 1.1%. This was the third–highest report in the last 10 years. On a year-over-year basis, housing inventory has dropped for 24 straight months. That’s probably a decent sign for consumer spending. I should also note that initial jobless claims have now been below 300,000 for 120 straight weeks.

Buy List Updates

Shares of Alliance Data Systems (ADS) have drifted higher recently. The stock rallied after its earnings report in April, but lately gave most of it back. ADS has now climbed for the last six days in a row. This week, I’m raising my Buy Below to $264 per share.

Cerner (CERN) has been a big winner for us this year. It’s currently up 42% YTD. This week, I’m going to bump our Buy Below up to $68 per share.

CR Bard (BCR) isn’t slowing down since the acquisition was announced. The stock just touched another 52-week high this week. The merger with Becton, Dickinson seems to be going well, and both stocks are drifting higher. I’m keeping my Buy Below on BCR at $330 per share.

This week, Stryker (SYK) announced that it’s buying Novadaq Technologies for $701 million. Novadaq is a Canadian fluorescence-imaging technology manufacturer. The deal is expected to dilute Stryker’s earnings by three to five cents per share, but it will have no impact of their full-year adjusted earnings. Stryker’s current guidance for this year is $6.35 to $6.45 per share. I’m raising Stryker’s Buy Below to $145 per share.

That’s all for now. Next week is the final week of trading for the first half of the year. It also marks the three-quarters mark for the decade. On Monday, we’ll report on orders for durable goods. Then on Tuesday is consumer confidence. On Thursday, the government will give its second revision for Q2 GDP. Last month, the government revised Q2 growth from 0.7% to 1.2%. That’s not very good. On Friday, we’ll get the personal-income and spending data 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.
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