Bespoke Brunch Reads: 7/30/17

Below is our “Bespoke Brunch Reads” linkfest featuring some of our favorite articles over the past week.

Macro Long Reads

Clearing up some misconceptions about how the stock market works by Matthew C Klein (FTAV)

Contrary to popular opinion, companies don’t use the stock market to raise capital, and households are net equity sellers relative to market value. [Link; registration required]

Quantitative Easing and Long‐Term Yields in Small Open Economies by Antonio Diez de los Rios and Maral Shamloo (Bank of Canada Staff Working Papers)

This quantitative analysis of 4 central bank QE programs (Fed, BoE, Riksbank, and SNB) suggests that QE from smaller central banks does not have an impact on global risk premiums and therefore have a limited impact on domestic financial markets. [Link; 46 page PDF]

Corporate News

GE’s Jeffrey Immelt Is on Uber’s CEO Shortlist by Eric Newcomer (Bloomberg)

Immelt is departing from GE, but he’s reportedly high on the very short list of people the ride hailing company’s targets for the CEO job. [Link; auto-playing video]

Researchers have a new theory for why companies are sitting on ungodly piles of cash by Max Ehrenfreund (WaPo)

Two professors at NYU argue that the reason corporate cash is piling up is that a few dominant companies don’t need to invest to stay ahead, accruing huge profits that don’t go anywhere. [Link; soft paywall]


Trend Is Not Your Only Friend By Dr Ewan Kirk and Dr Chris Longworth (Cantab Capital)

A step-by-step walk through of the construction of a portfolio of assets which exhibit both trend and carry, creating larger risk-adjusted returns. [Link]

Would You Invest with Steven Cohen? by Julie Segal (Institutional Investor)

With the former head of SAC Capital Advisors soon to emerge from an industry ban following insider trading accusations, Steve Cohen is planning the launch of a hedge fund controlling $20bn of capital. [Link]

The Death of Equity Research Hasn’t Been Greatly Exaggerated by James Valentine (Integrity Research Associates)

A review of the challenges facing equity research, which are legion. That said, the author identifies areas where equity research can deliver value. [Link]


Why I tweet by Beatrice Cherrier (The Undercover Historian)

A long, sprawling essay on the value that Twitter can add for knowledge workers, through the prism of an economic historian. [Link]

What The Enron E-mails Say About Us by Nathan Heller (NYer)

An opportunity to review linguistics and data science in the context of a massive archive of digital communication, specifically the Enron email archives released as part of the investigation into that company’s collapse. [Link]

Are influencers turning away from Snapchat? by Eileen Brown (ZDNet)

A new survey of widely-followed “influencers” on social media suggest that Snapchat is on the way out, especially when coupled with a 22 percent drop in downloads over the last couple of months. [Link]


Origins by Blair Reeves

A very helpful review of recent data, research, and discovery into the origin of the human species over the last several hundred thousand years. [Link]

First Human Embryos Edited in U.S. by Steve Connor (MIT Technology Review)

Following similar efforts in other countries, US researchers have successfully edited human embryo genes in a lab. [Link]

110 N.F.L. Brains by Joe Ward, Josh Williams, and Sam Manchester (NYT)

A new study of donated brains from football players reveal pervasive chronic traumatic encephalopathy, a degenerative disease that attacks brain tissue and is tied to concussions and other head trauma. [Link; soft paywall]


Grave Concerns by Jennifer Crossley Howard (Bitter Southerner)

A history of the Southern tradition of visiting the dead, eating a family meal and visiting the resting places of the dearly departed. [Link]

we’re still here by Anne Helen Petersen (Tinyletter)

A review of the very interesting question “Why does Montana have so few people and so many counties”? [Link]

I trained an A.I. to generate British placenames by Dan Hon (Medium)

A hilarious application of machine learning gives some amusing results. Some of our favorites: Brotters Common, Topswick End, Boll of Binclestead, Farton Green Pear End, Capton Briins Forehouint Eftte Green, Crocken-on’s Clow, Prrighstock Tabergate, and Stote S’ster. [Link]


Bannon Calls for 44% Tax on Incomes Above $5 Million by Margaret Telev (Bloomberg)

Standing in stark contrast to the Republican Congress, which has advocated the opposite sort of policy, White House Chief Strategist Steve Bannon wants a more populist bent. [Link]

Foxconn could get up to $200 million in cash a year from state residents for up to 15 years by Jason Stein and Patrick Marley (Journal Sentinel)

Foxconn (a major supplier of Apple’s iPhone value chain) is opening a new manufacturing facility in Wisconsin. While this is good news for Wisconsin manufacturing workers, it’s going to cost the state’s taxpayers dearly. [Link]

France nationalises shipyard to thwart Italian majority, angering Rome by Leigh Thomas and Crispian Balmer (Reuters)

While newly-elected President Macron has liberal, pro-market credentials, France is still France and will nationalize a shipyard instead of letting an Italian company take control of it. [Link]

EU explores account freezes to prevent runs at failing banks by Francesco Guarascio (Reuters)

In a remarkable pivot, EU policymakers are considering measures that would prevent depositors from withdrawing their cash if a bank is facing funding challenges. [Link]

Video Gaming

A video game you’ve never heard of has turned three teens into multimillionaires — and it’s just getting started by Matt Weinberger (Business Insider)

A review of the ecosystem that Roblox has built around its simplistic but extremely popular platform, where young coders can see huge revenue sharing numbers. [Link]


A teacher’s solution to buy school supplies for her classroom: Panhandling by Amy B Wang and Emma Brown (WaPo)

A tragic comment on how we choose to fund schools: an Oklahoma woman was reduced to panhandling to provide basic school supplies for her class. [Link; soft paywall]


‘Phelps vs. Shark,’ Reviewed by a Shark by Fred the Shark (WSJ)

An important coda to the widely televised shark race earlier this week. [Link; paywall]

WWII pilots used North Carolina waters for target practice. Now their bombs are washing ashore. By Thomas Gibbons-Neff (WaPo)

70 year old munitions are emerging from the sea on the shores of North Carolina. [Link; soft paywall]

Have a great Sunday!

Bespoke Investment Group, LLC

105 Calvert Street, Suite 100

Harrison, NY 10528


Twitter: @bespokeinvest


#Tesla’s Model 3 debut, #Shkreli trial, the confidence myth


The Bank of England tries to halt its first strike in 50 years. The central bank will meet with union representatives in hopes of heading off a three-day strike over staff wages. If the talks fail, the strike will begin Tuesday. The bank will also announce an interest-rate decision.

Jury deliberations begin in the Martin Shkreli trial. US federal prosecutors argue that Shkreli, who ran two hedge funds along with the pharmaceutical company Retrophin, cheated investors in a Ponzi-like scheme. He could face up to 20 years in prison for fraud.

Germany releases data on industrial production for June.Manufacturing output rose 1.2% on the month in May, easily beating the consensus forecast of 0.3%. Another strong showing (paywall) would bolster chancellor Angela Merkel’s economic credentials ahead of federal elections in September, when she’ll seek a fourth term.


Trump took China to task over North Korea’s missile tests. US president Donald Trump tweeted on Saturday that China’s leaders are doing “nothing” to help thwart North Korea, which on Friday test-launched a missile capable of hitting the US homeland. Secretary of state Rex Tillerson piled on, calling Russia and China North Korea’s “principal economic enablers.”

Venezuela went ahead with a controversial vote. Venezuelan president Nicolás Maduro pushed ahead with an election Sunday to form a new constituent assembly that could rewrite the country’s constitution. Critics called it a move to displace the elected, opposition-controlled National Assembly and create a dictatorship. Violence erupted on both sides, with at least nine dead in the past 24 hours.

Russia retaliated against impending US sanctions. Russian president Vladimir Putin ordered the US embassy to cut 755 personnel from its staff in response to tough new sanctions approved by the US Congress last week. Although Trump opposed the sanctions, which condemn Russia for allegedly meddling in the 2016 US election, he is expected to sign the bill.

Elon Musk handed over the keys to Tesla’s Model 3. The first 30 owners of Tesla’s long-awaited mass market vehicle drove their cars home after a launch event outside the company’s Fremont factory in California. Tesla hopes the Model 3—getting rave reviewsso far—will be the first electric vehicle adopted by millions of mainstream buyers in the US and Europe.

Apple removed apps that help people in China evade censorship… Chinese users rely on virtual private networks (VPNs) to circumvent the country’s internet filters and access the open web. But on Saturday, Apple confirmed that it had removed the softwarefrom its China app store in order to comply with a law, approved in January, that bans all VPNs operating without government approval.

… And Putin banned VPNs. The Russian president signed a new law that prohibits the use of VPNs and other technologies allowing people to surf the web anonymously. The regulations will go into force in Russia on Nov. 1.


Melody Wilding on the confidence myth. “We tend to think confidence is a personality trait, and treat it as a prerequisite for action. So we put off signing up for a dating site because we feel insecure about our looks, or neglect to apply for jobs because we worry that we won’t be competitive. But the truth is that confidence isn’t an innate trait; it’s a quality gained through experience. So we should take risks in order to build confidence—not the other way around.” Read more here.


Elon Musk should stop running Tesla. Passing the torch on the auto company would relieve Musk of his boring CEO duties, so he could put his visionary talents to better use.

Paid parental leave has bipartisan appeal. Trump and Democrats have come to the same conclusion: The US needs to pay parents for time off after the birth of their children.

The American South is much more diverse than most people assume. The media and pop culture tend to depict the South as a bastion of white conservatives, but the reality is far richer and more complex.


Millennials don’t have any special tech superpowers. Research suggests that so-called “digital natives” are no more adept at smartphones and computers than older generations.

Finnish scientists are using electricity to make food. Zapping protein powder into existence could be a step toward addressing world hunger.

The US Department of Defense wants a better way to vet social science. The goal is to develop a system that can help separate credible research from unreliable studies.

A record-holding 17th-century pub is for sale. The Tan Hill Inn in Swaledale, Yorkshire, the highest watering hole in the UK at 1,735 feet, often gets snowed in—but it’s the perfect spot to glimpse the Northern Lights.

Alcohol may be the culprit behind teenage obesity. A recent study showed that 39% of high schoolers in Canada admitted to drinking five or more alcoholic beverages per night once a month—which adds up to a lot of calories.

Our best wishes for a productive day. Please send any news, comments, electric food, and faraway pubs to You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Weekend edition—China’s electric-car jump start, eclipse warnings, and the new coup rules

Good morning, Quartz readers!

This week the UK became the fifth country—after the Netherlands, Norway, India, and France—to commit to selling only electric cars in the near future. It will do so starting in 2040, while Norway and India are more ambitious, aiming for 2025 and 2030 respectively.

As battery prices fall, it’s clear that electric cars are the future. How soon we get there will depend on how serious we are about reaching emissions goals set under the Paris accord.

There is a world of difference between making the pledge and actually delivering. Each country will need to create incentives that promote electric-car purchases, build thousands of charging stations, and ensure enough electrical capacity.

The UK’s transition to an all-electric future will push peak demand by 18 GW, a third more than now. The country’s transmission operatorhas warned that the UK won’t be able to reach its goals without large investments in new plants and line upgrades.

If any country seems to be on track in this regard, it’s China. In 2016, the country registered 350,000 electric vehicles (the US was a distant second with 160,000). It has tax exemptions in place worth $6,000 to $10,000 per car. It boasts 150,000 charging stations, with 100,000 more coming in 2017 (the US has just 16,000). And it has plenty of spare capacity to power all these vehicles, with its thermal power plants running only half the time.

China has other motivations. Since US president Donald Trump pulled out of the Paris agreement, there is an opening for Beijing to take on global leadership.

Even if saving the climate is not China’s priority, the transition makes sense from an energy-security perspective. The country doesn’t have as much oil as it has coal—the fuel most power plants need.

—Akshat Rathi



An exclusive look inside London’s reputation-laundering business. The British capital is home to consultancies and law firms that help the global super-rich obscure the sources and extent of their wealth and burnish their images. Max de Haldevang investigates the efforts three firms undertook on behalf of Vladimir Yakunin, US-sanctioned ally of Vladimir Putin.

One way to beat the shortage of quality engineers in India.Zoho Corporation, a Chennai-based software firm catering to global cloud customers, makes programmers out of high-school graduates—and some dropouts—by taking their education into its own hands, as Sushma U N reports.

Solar-eclipse fever has spawned a surfeit of counterfeits.Americans who gaze heavenward Aug. 21 for the rare sight of the sun disappearing behind the moon will need special dark glasses. Many for sale on Amazon may not be safe, Elijah Wolfson and a squad of Quartz reporters discovered. Good thing there’s NASA guidance for consumers.

The class dynamics of breastfeeding. Even as the cultural definition of what’s “best” for babies has fluctuated between formula and breast milk for decades, one thing remained constant, as Corinne Purtill and Dan Kopf explain: The most socially desirable form of nutrition has been whichever is harder for poor parents to access.

Accepting your darkest emotions is the key to psychological health. In this decidedly pro-positivity era, the pressure to suppress feelings like anxiety and rage is real. Lila MacLellan finds that science has joined Buddhist thinkers and mindfulness teachers in agreeing “acceptance” is the key to handling emotional reactions to stressful events.

Drones are dropping from the sky. Users took to DJI’s support forum to complain that their new Spark drones were switching off in mid-flight. After Mike Murphy pointed out the issues, DJI said it was sending out a firmware update.


The film Her is one step closer to becoming reality. See how a graphic designer created a robot replica of Scarlett Johansson using supplies he found at the hardware store. While you’re there, check out the rest of Machines with Brains, our latest special series exploring what it means to be human in an increasingly artificially intelligent world.


A ping-pong match reveals the inner workings of China’s Communist Party. When the country’s star player refused to show up for a match against a Japanese rival, blame fell mostly on the sports minister. Ma Tianjie of Chublic Opinion digs deeper to show how a seemingly mundane controversy exemplifies the complicated games Chinese politicians play to get ahead.

The new rules on staging a military coup. The old first directive—take control of the TV airwaves—doesn’t apply now, Danny Orbach writes at War on the Rocks. Reviewing Naunahal Singh’s bookSeizing Power, he notes that the attempt to overthrow Recep Erdogan in Turkey floundered because the president was able to communicate with the nation on an iPhone.

A frightening transition, nukes included. US Department of Energy staff waited for days to brief Trump’s team on running the 110,000-person bureaucracy that safeguards the grid and nuclear stockpiles. When they showed up, Michael Lewis recounts, their approach mirrored that of their boss: “We don’t want you to help us understand; we want to find out who you are and punish you.”

Not everyone who works at Facebook has it made. Just miles from Mark Zuckerberg’s five-house compound, a couple that works in his company’s cafeteria lives in a two-car garage with their three children, Julia Carrie Wong reveals in The Guardian. Combined wages of $37.70 an hour are not enough to rent an actual house in Silicon Valley.

The two dirtiest words in the world of shipping. No one on board died in the 2011 hijacking of the Brillante Virtuoso off Yemen, as Kit Chellel and Matthew Campbell write in Bloomberg BusinessWeek. Yet the oil tanker’s name became an epithet among shipping veterans,” because the incident and its aftermath revealed so much that is ugly about the industry.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, counterfeit eclipse viewers, and recalcitrant drones to You can follow us on Twitter herefor updates throughout the day, or download our apps for iPhone andAndroid.

CWS Market Review – July 28, 2017

CWS Market Review

July 28, 2017

“99% of the troubles that threaten our civilization come from too optimistic accounting.”
– Charlie Munger

This was another big week for Buy List earnings reports. We also had a Federal Reserve meeting. As expected, the central bank decided against raising interest rates. The stock market seemed pleased as the major indexes rose to more all-time highs. At the same time, the Volatility Index dropped to its lowest levels in more than 20 years.

For the overall market, this is shaping up to be a very good earnings season. About 80% of companies in the S&P 500 have beaten their earnings expectations. The typical “beat rate” usually runs around 65%. Some of the results are being aided by the weak U.S. dollar.

In this week’s CWS Market Review, I’ll go over all our recent earnings news. Moody’s, Express Scripts and Stryker all beat and raised guidance. I love seeing that! At the other end, RPM International had a lousy report. They missed expectations by a mile. I’ll go into more details on that in a bit. I’ll also preview the final batch of Buy List  earnings coming our way next week. First, though, let’s look at last week’s excellent earnings report from Moody’s.

Moody’s Beats, RPM Misses

Last Friday, shortly after I sent you last week’s newsletter, Moody’s (MCO) reported very good earnings, plus they raised guidance. For Q2, the ratings company earned $1.51 per share which is a 16% increase over last year. That beat expectations by 17 cents per share. Quarterly revenues were up 8% to $1 billion, and operating income rose 12% to $457.5 million. These are very good results.

More importantly, Moody’s raised their full-year guidance range to $5.35 to $5.50 per share. The previous range was $5.15 to $5.30 per share. Things are going very well for Moody’s. This week, I’m raising my Buy Below on Moody’s to $141 per share.

On Monday, RPM International (RPM) had a complete dud of an earnings report. The company made $1.02 per share for its fiscal Q4 which was 16 cents below Wall Street’s consensus. Quarterly net sales rose 4.6% to $1.49 billion.

The company’s explanation:

“We took additional cost reduction measures in the fourth quarter to position RPM to a return to double-digit earnings growth in fiscal 2018. We were pleased with solid organic growth in both our industrial and specialty segments during the fourth quarter, which we expect to continue as we enter into fiscal 2018. Organic growth across our consumer businesses was down 1.0%, principally due to lower results at our Kirker nail enamel business, the negative impact of a very rainy start to the spring season for home improvement sales and a difficult comparison to our prior-year quarter in which organic growth across RPM’s core consumer product lines increased 9.9%,” stated Frank C. Sullivan, RPM chairman and chief executive officer.

“The consolidated revenue increase, particularly in a growth-challenged economic environment, was mitigated somewhat on leverage to the bottom line as a result of higher raw material costs during the quarter, including shortages and availability issues in a couple of key product lines. Also, a significantly higher tax rate in the fourth quarter this year versus last year reduced earnings per share on a comparative basis by $0.12.

I’m always a little suspicious when companies blame the weather for their business woes. Now for guidance. RPM sees fiscal 2018 earnings ranging between $2.85 and $2.95 per share. For fiscal Q1, which ends in August, RPM projects earnings between 83 and 85 cents per share. Wall Street had been expecting $3 per share for the year and 89 cents per share for Q1.

In Monday’s trading, RPM dropped 7%. I’m not pleased with RPM’s progress so far. For now, I’m going to keep my Buy Below at $55 per share.

Express Beats and Raises Guidance

After the closing bell on Tuesday, Express Scripts (ESRX) reported Q2 earnings of $1.73 per share. That’s up 10% from last year’s Q2, and it topped Wall Street’s consensus by two cents per share. Earlier Express told us to expect Q2 results to range between $1.70 and $1.74 per share.

Here are some highlights:

-Adjusted claims of 350.0 million, flat
-GAAP net income of $801.8 million, up 11%
-GAAP earnings per diluted share of $1.37, up 21%
-EBITDA of $1,824.1 million, up 1%
-EBITDA per adjusted claim of $5.21, up 1%
-Adjusted net income of $1,011.6 million, up 1%
-Adjusted earnings per diluted share of $1.73, up 10%
-Net cash flow provided by operating activities of $1,081.2 million, up 146%

The best news is that Express raised its guidance. The company now sees full-year earnings of $6.95 to $7.05 per share. The earlier guidance was $6.90 to $7.04 per share. Wall Street had been expecting $6.97 per share. The new range represents growth of 10% over last year.

For Q3, Express expects total adjusted claims of 340 million to 350 million, and they see earnings of $1.88 to $1.92 per share. Wall Street had been expecting $1.89 per share.

Express didn’t have much more to say about the ongoing battle with Anthem. They did say that if they continued to do business with Anthem it would be on terms significantly less favorable for Express Scripts. I will say that I feel more confident about ESRX than I did a few weeks ago, but I want to see more improvement. Express Scripts is a buy up to $69 per share.

Earnings from AFLAC, Cerner, CR Bard and Stryker

There were four Buy List reports on Thursday, all of which came after the close. First up was AFLAC (AFL). For Q2, the duck stock’s operating earnings rose 10.9% to $1.83 per share. That easily beat the range they had given us of $1.55 to $1.70 per share. There are two notes to add. First, the exchange rate knocked off two cents per share. Also, the company also got a tax benefit of five cents per share during the quarter. For Q2, AFLAC’s annualized ROE was 13.6%.

Dan Amos, AFLAC’s CEO, stood by the company’s full-year range for operating earnings of $6.40 to $6.65 per share. That assumes that the yen averages 108.70. I’m a little surprised he didn’t raise that range. For Q3, Amos expects AFLAC to earn $1.51 to $1.69 if the yen averages between 105 and 115.

I like these numbers. AFLAC is a buy up to $80 per share.

Cerner (CERN) reported Q2 earnings of 61 cents per share which matched expectations. The healthcare IT company had previously announced an earnings range of 60 to 62 cents per share. Quarterly revenue rose 6% to $1.292 billion which exceeded Cerner’s guidance.

For Q2, operating cash flow was $292.2 million and free cash flow was $119.1 million. Days sales outstanding fell to 73 days from 74 days last year. Total backlog rose 11% to $16.648 billion.

For Q3, Cerner expects revenue between $1.265 billion and $1.325 billion, and EPS between 61 cents and 63 cents. For all of 2017, Cerner sees revenue between $5.15 billion and $5.25 billion. Cerner is narrowing its full-year EPS guidance from $2.44 – $2.56 to $2.46 – $2.54. Cerner remains a buy up to $68 per share.

CR Bard (BCR) reported Q2 earnings of $2.92 per share. That beat their forecast of $2.75 to $2.85 per share. Quarterly sales rose 5% to $979.7 million.

Timothy M. Ring, chairman and chief executive officer, commented, “We continue to see strong, balanced growth across our portfolio and geographies. Half-way through 2017, each of our businesses has performed at or above the top of our forecasted constant currency revenue growth ranges for the full year. In the second quarter we reached a new milestone, with revenue from emerging markets now representing 12 percent of total company revenues. We are pleased with the continued momentum of our global business as we prepare to merge with Becton, Dickinson and Company in the fourth quarter of 2017.”

Bard also raised the low end of their 2017 range by five cents per share. They now expect full-year earnings to range between $11.70 and $11.90 per share. I’m pleased to hear they expect to complete the merger with Becton, Dickinson (BDX) sometime in the fourth quarter.

Our last one is Stryker (SYK). For Q2, earnings rose 10.1% to $1.53 per share, two cents more than consensus. Quarterly net sales rose 6.1% to $3.0 billion. In constant currency, that’s an increase of 6.9%.

Kevin A. Lobo, Stryker’s CEO, said “Our growth momentum continued in the second quarter as we continue to drive share gains through new products and strong commercial execution.” Looking at Stryker’s three divisions, Orthopaedics sales rose by 5.5%, MedSurg’s sales increased by 6.2%, and the Neurotechnology and Spine unit saw a sales increase of 6.9%.

Stryker now expects organic sales growth for this year of 6.5% to 7%. For full-year EPS, they expect $6.45 to $6.55. That’s an increase of 10 cents per share at both ends. For Q3, Stryker sees a range of $1.50 to $1.55 per share. This is very good news. I’m raising my Buy Below on Stryker to $149 per share.

Several More Buy List Earnings Next Week

Next week will be another very busy week for earnings. On Tuesday, Fiserv and Ingredion are scheduled to report. Fiserv (FISV) just reached another all-time high. In April, Fiserv reiterated its full-year outlook for $5.03 to $5.17 per share. They didn’t give a range for Q2, but the consensus among analysts is for Q2 earnings of $1.23 per share.

Ingredion (INGR), the plant food people, had a very good report for Q1. They now see 2017 EPS ranging between $7.50 and $7.80. Wall Street is looking for $1.85 per share.

Next Thursday will be crowded with four earnings reports.

Axalta Coating Systems (AXTA) recently helped out another one of our Buy List stocks. Valspar needed to sell its North American Industrial Wood Coatings unit in order to complete its merger with Sherwin-Williams (SHW). Axalta bought it for $400 million in cash. Wall Street expects Q2 earnings of 39 cents per share.

Cognizant Technology Solutions (CTSH) has rebounded quite nicely over the past several months. For Q2, Cognizant expects revenue ranging between $3.63 billion and $3.68 billion and EPS of at least 89 cents per share. That’s quite good. For the full year, CTSH sees revenue between $14.56 billion and $14.84 billion and EPS of at least $3.64.

Continental Building Products (CBPX) has been sliding downward for the last several weeks. I think the wallboard maker is a good buy here. Wall Street expects earnings of 35 cents per share.

Intercontinental Exchange (ICE) is turning into a nice winner for us this year. ICE is up 17.2% for us YTD. The consensus is for Q2 earnings of 76 cents per share. ICE should beat that.

Cinemark (CNK) is due to report next Friday. The movie theater chain had a decent Q1 earnings report but the stock has pulled back. Cinemark theater chain now runs 525 theaters with 5,894 screens. Wall Street expects earnings of 45 cents per share. I expect Cinemark to beat that.

With the turn of the month, we’ll get some key economic reports next week. On Tuesday, we’ll get the latest ISM report. We’ll also get a look at personal income and spending. Wednesday is the ADP payroll report. Then on Friday is the big July jobs report. 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

#Amazon disappoints, #Tesla Model 3 hits the road, phony eclipse glasses


Venezuela does away with democracy. Through a referendum on Sunday the government aims to establish a constituent assembly that will replace the constitution and be powerful enough to overrule all other bodies (paywall) Months of street protests have failed to halt president Nicolás Maduro’s drive toward dictatorship. The US has ordered embassy families out of the country.

The Tesla Model 3 hits the road—finally. Today the automakerwill hand the keys of its mass-market electric car to 30 customers. That’s just the first step in an ambitious rollout by Elon Musk to produce 5,000 sedans a week by the end of the year, and twice that many in 2018.

The US Commerce Department releases an advance estimate of second-quarter GDP. Economists expect an increase of about 2.6% (pdf). Last month the Commerce Department revised the first-quarter GDP from 1.2% to 1.4%—still a lackluster performance.


Look to the UK for a wave of breakthroughs in technology.From 3D printing to reliable developments in AR, explore four projects setting a new global standard.Advertisement


Trump’s new communications director spewed bile at his colleagues. In an interview with The New Yorker, Anthony Scaramucci went on a profanity-laced tirade against White House chief of staff Reince Priebus and Trump’s chief strategist, Steve Bannon. He also expressed anger over leaks and threatened to “eliminate everyone” in the White House communications team.

California approved a VW plan for expanding clean-vehicle infrastructure. The carmaker will install hundreds of charging stations around the state in the plan’s first phase, which will involve investing $200 million of the $800 million it must invest as penalty for the diesel-emission cheating scandal. Governor Jerry Brown wants 1.5 million zero-emission vehicles on California roads by 2025.

Japan’s defense minister said she’ll resign. Tomomi Inada’s announcement follows a cover-up of a botched UN peacekeeping mission in South Sudan, and comes amid plunging public support for prime minister Shinzo Abe. Inada was viewed as a possible future premier.

Amazon results fell way short. Quarterly net income plummeted to $197 million from $857 million, well below analyst expectations, due to expensive investments in video content and Indian expansion. Shares fell more than 2%, dinging the net worth of CEO Jeff Bezos, who earlier in the day briefly claimed the title of the world’s richest man.

The Pentagon took no steps to enforce Trump’s transgender ban. The Defense Department said there would be “no modifications” to the current policy permitting transgender people to serve in the US military until it receives formal instructions from the White House. The presidential tweets announcing a ban earlier this week caught military leaders by surprise.


Moses K Gahigi on the transformative rise of mobile money in Africa. “Mobile money accounts in sub-Saharan Africa have surpassed bank accounts… It gives a fighting chance for millions of un-banked rural poor to be financially included and benefit from products like savings and loans for their small and mostly informal businesses.” Read more here.


The economy has created a workforce of quitters. Short-term gigs have encouraged employees to see themselves as marketable goods.

Employers should reconsider drug tests. As marijuana is decriminalized, companies must admit that some good workers smoke pot.

Meg Whitman is the CEO that Uber desperately needs. The seasoned tech leader would be a shrewd pick for a company thatbadly needs stability.


Blowing out birthday candles spreads bacteria. A single puff increases bacteria by up to 1,400%—but it’s probably harmless.

British food is suffering from shrinkflation. Manufacturers havedownsized some 2,500 products as they cope with higher costs and a weak currency.

Fraudsters are selling fake eclipse glasses. Relying on the phony eyewear could result in serious injuries during the Aug. 21 celestial event.

A professional video-game league is mandating health insurance. Overwatch pros will receive a $50,000 salary plus health and retirement benefits.

German condoms funded the Russian Revolution. Vladimir Lenin could not accept direct payments, so instead he profited fromthe resale of commodities (paywall).

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Big earnings day in Europe, war games in the Yellow Sea, space surgery

Good morning, Quartz readers!


European companies worth more than $3 trillion report results. In an unusually hectic earnings day—a “day from hell,” as one analyst put it—a wide range of heavyweights will open their books. Among them: Nestle, Danone, Orange, Kering, Bayer, Airbus, Telefonica, Volkswagen, Deutsche Bank, Roche Holding, Fiat Chrysler, Royal Dutch Shell, and Anheuser-Busch InBev.

China closes off part of the Yellow Sea for military maneuvers.It’s holding large-scale war games for two days in an area off the coast of Qingdao measuring 40,000 sq km (15,444 sq miles). The exercises come ahead of next week’s 90th anniversary of the founding of the People’s Liberation Army.

The US Commerce Department releases economic data for June. Analysts expect factory orders to snap back, rising about 3% after disappointing results in May. Also due are advance wholesale and retail inventories, excluding autos.


China’s industrial firms notched a strong June. Their earningssurged over 19% from a year earlier, reported the National Bureau of Statistics. Makers of autos, electronics, and steel had particularly good showings. The results suggested economic momentum remains solid, though worries persist about the rising cost of borrowing.

Facebook’s earnings got a boost. The social media giant beat analyst expectations for the 17th straight quarter, with revenue up 45% from a year ago to $9.32 billion and net income rising 71% to $3.89 billion. Still, most signs point toward Facebook being unable to keep up the pace of revenue growth it’s set over the past few years.

The US Fed held steady. The central bank left interest rates unchanged, noting that inflation is well below its 2% target. Separately, Brazil reduced interest rates below 10% for the first time since 2013 in hopes of jumpstarting the economy after a devastating recession.

Slack Technologies is eyeing a $5 billion valuation. The messaging startup is raising $250 million in a new funding round being led by Japan’s SoftBank Group and venture capital firm Accel, according to Bloomberg. The company, which sells software for workers to communicate with colleagues, was valued at $3.8 billion in its last funding round in April 2016.


Max de Haldevang on how the family of Vladimir Putin’s US-sanctioned ally uses British companies to burnish its reputation. “Yakunin reportedly lives in a palatial mansion outside Moscow, with an Olympic-size indoor pool and one room solely dedicated to storing fur coats. After the reported fur coat room began trending on Russian social media, Yakunin denied that he’d ever worn a fur coat.” Read more here.


Fed assets for sale / All for the low, low price of / $4.5 trillion


Publishers need to stop pivoting on command. Facebook’s self-interested whims suck up resources while fostering media’sunhealthy dependence.

To get ahead at work, be polarizing. As long as you’re a mensch in your personal interactions, there’s value to bringing divisive ideas to the table.

Sanctions won’t work on Putin. Economic penalties have a long history of failure (paywall), especially when targeting a powerful country.


China is building an army of robot friends for its elderly population. With over a quarter of the world’s old people, China is turning to artificial intelligence in what could be the world’s biggest experiment in robot companionship. Watch how one grandma interacts with her “care bot” in our new series, Machines with Brains.


Guantanamo Bay has a video-game library. Prisoners have long been able to borrow board games and books, but now the offerings include DVDs and PS3 games.

In zero gravity, blood forms a dome around a womb or incision. That’s just one reason space is a terrible place to perform surgery.

A mysterious mega-swan once ruled New Zealand. The Poūwa swan, which went extinct around 1450 AD, was up to 30% larger than modern swans and semi-flightless.

Sperm counts are plunging in rich countries. Exposure to chemicals may be to blame for the 60% drop over the last four decades.

Archaeologists discovered the world’s oldest 🙂. It’s painted on a 3,700-year-old jug unearthed on the Turkish-Syrian border.

Our best wishes for a productive day. Please send any news, comments, ancient emoji, and mega-swans to You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

A Dozen Lessons on Investing from Ed Thorp


“Edward O Thorp is the author of Beat the Dealer, which was the first book to prove mathematically that blackjack could be beaten by card counting, and Beat the Market, which showed how warrant option markets could be priced and beaten. He also was the co-inventor of the first wearable computer along with Claude Shannon. Thorp also pioneered the use of quantitative investment techniques in the financial markets (Option Arbitrage, Warrant Modeling, Convertible Arbitrage, Index Arbitrage and Statistical Arbitrage).”  

Thorp speaks clearly and from the heart. He reminds me of that other ultra rational decision maker Charlie Munger. Despite his prodigious intellectual gifts Thorp remains grounded and approachable. A few sentences reveals his gift for communication which reminds me of Michael Mauboussin:

“My life has been an adventurous journey I thought readers would enjoy my stories of the people I met and the challenges I faced.” “Chance can…

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