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RETIREMENT IS YEARS AWAY
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Last week: DJIA 21206.29 126.01 0.6%
Whats
News
Business & Finance
C hinas debt crackdown
is driving firms to seek
loans from loosely regulated
trusts, which invest in risk-
ier areas of the economy. A1
 GMs chief faces share-
holders Tuesday, under pres-
sure from hedge fund Green-
light to split the auto makers
shares into two classes. B1
 Tencent has become
Chinas top investor in the
U.S. tech sector, with stakes
in ventures ranging from
gaming to space tourism. B1
 Truckers face monitor-
ing of their cellphone use as
accidents increase and in-
surers losses surge. B1
 Global growth will hit a
seven-year high of 2.9%
next year, the World Bank
said, but warned of risks. A2
 A food-libel suit against
ABC is set to begin, in what
could be the largest defama-
tion case in U.S. history. A3
 Sunrun asked its board
to review claims by former
employees that they manip-
ulated sales data. B8
 The NFL will allow its TV
partners to run commer-
cials for hard liquor, in a
change of league policy. B3
 Rickmers filed for insol-
vency in a sign of crisis for
German shipping firms. B3
 SpaceX launched a refur-
bished cargo capsule, a first
for Musks company. B4
World-Wide
 Terrorists struck Britain
for the third time in as many
months, killing seven people
in a rampage in London
claimed by Islamic State and
prompting May to say toler-
ance of Islamist extremism
had gone too far. A1, A10-A11
 The attacks underscore
the difficulty faced by au-
thorities in stopping low-
tech assaults by individuals
or small groups. A1
 Republican leaders,
pushing for a legislative win
before summer recess, face
hearings into possible Rus-
sian election meddling. A1
 Afghan authorities ar-
rested over a dozen people in
connection with a triple sui-
cide bombing at a funeral that
capped a week of violence. A8
 Iraqi forces captured a
hub on a key Islamic State
supply route between Syria
and Iraq, the countrys de-
fense ministry said. A8
 Trump will launch a
new campaign this week
aimed at fulfilling his
pledge for $1 trillion of in-
frastructure investment. A4
 Trumps aides defended
his decision to quit the Paris
climate pact, but offered dif-
fering views on his beliefs
about the environment. A4
 Philippine police ruled
out terrorism in Fridays ca-
sino attack, calling the gun-
man a gambling addict. A8
CONTENTS
Business News...... B3
Crossword.............. A16
Heard on Street. B10
Journal Report R1-10
Life & Arts...... A13-15
Markets................... B10
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
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* * * * * MONDAY, JUNE 5, 2017 ~ VOL. CCLXIX NO. 129 WSJ.com HHHH $3.00
NASDAQ 6305.80 1.5% STOXX 600 392.55 0.3% 10-YR. TREASURY 26/32 , yield 2.159% OIL $47.66 g $2.14 EURO $1.1282 YEN 110.41
U.K. Vows to Step Up Terror Fight
Latest assault reflects
rising challenges for
police and intelligence;
Enough is enough
LONDONThe third terror
attack in Britain in as many
months laid bare a growing
challenge to Europes police
and intelligence agencies and
prompted Prime Minister The-
resa May to say tolerance of
Islamist extremism in the
country had gone too far.
By Jenny Gross,
Jason Douglas
DANIEL LEAL-OLIVAS/AGENCE FRANCE-PRESSE/GETTY IMAGES
and Stu Woo
The attack, which killed
seven people and was claimed
by Islamic State, interrupted
the campaigning for national
elections for a second time and
shook confidence in the coun-
trys counterterrorism strategy,
which Mrs. May said would be
reviewed.
Since the emergence of the
threat from Islamist-inspired
terrorism, our country has
made significant progress in
disrupting plots and protect-
A woman asked a police officer to lay flowers near London Bridge on Sunday, as a tribute to the victims of the terror attack. ing the public. But it is time to
say enough is enough, Mrs.
Low-Tech Attacks Harder to Thwart
May said on Sunday.
Mrs. May warned that more
must be done to stop people
from becoming radicalized.
BY JENNY GROSS attacks for 12 years, the U.K. and Nice, where perpetrators officials missed. She added that in the U.K.
AND STEPHEN FIDLER has suffered three in quick suc- used vehicles to mow people In both the Manchester and Please see ATTACK page A10
cession, suggesting the authori- down, illustrate the challenge the Westminster attacks, the
LONDONAs British intelli- ties arent able to stop low-tech of preventing relatively unso- perpetrators were known to in-
gence officers piece together improvised assaults carried out phisticated attacks, even when telligence agencies but deemed U.K. Terror Attack
how three attackers carried out by individuals or small groups. security services succeed in not a serious enough threat to  Assaults shatter an
Saturdays deadly rampage at Prime Minister Theresa May thwarting higher-level ones. warrant high-level monitoring, evenings revelries.......... A10
London Bridge, counterterror- said the U.K. would review its Raffaello Pantucci, director underscoring the difficulty for  Uncertainty grows in
ism chiefs will be trying to es- strategy in light of the chang- of International Security Stud- agencies in determining whom coming election................. A11
tablish what went wrong with ing threat. ies at the Royal United Services to monitor amid a growing  Police arrest 12 in raids on
their strategy. The recent attacks in Lon- Institute, said it is too early to pool of extremists, he said. apartments in London... A10
After escaping mass-casualty don, as well as in Stockholm say what exact signs police and Please see LONDON page A10
Democrat Questions Russia Washingtons Missing Regulators Commodity Futures Trading Commission
Active member Vacant
Link as Comey Heads to Hill Federal Energy Regulatory Commission
BY SIOBHAN HUGHES ner of Virginia said on CNN. Coats, and the director of the Federal Trade Commission
But there is a lot of smoke. National Security Agency,
WASHINGTONThe top As congressional Republican Adm. Mike Rogers, will appear
Democrat on the Senate Intel- leaders begin a push to pro- before Mr. Warners commit- Federal Communications Commission
ligence Committee said there duce a legislative accomplish- tee. On Thursday, Mr. Comey
was no proof so far of collu- ment before an August recess is expected to tell the same National Labor Relations Board
sion between Russia and Don- knowing the window of oppor- panel that Mr. Trump asked
ald Trumps campaign, as Con- tunity is closing, a series of him to back off an investiga-
Securities and Exchange Commission
gress geared up for a week of hearings into possible Russian tion of former national-secu-
high drama highlighted by the interference in the 2016 presi- rity adviser Michael Flynn.
testimony of former Federal dential electionand other Please see HILL page A4 Source: the commissions THE WALL STREET JOURNAL.
Bureau of Investigation Direc- challenges that have beset the Previous vacancies and the slow pace of President Donald
tor James Comey. Trump administration  Trump to turn focus to Trumps transition have created uncertainty for companies and
Listen, theres a lot of threaten to derail their plans. infrastructure............................. A4 others with delicate business before federal commissions. B1
smoke. We have no smoking On Wednesday, the director  Main Street is wary of health
gun at this point, Mark War- of national intelligence, Dan cuts.................................................. A6
Now Investing This Guys Money: INSIDE China Debt Crackdown
400,000 Strangers on the Internet
i i i
Spurs Shadow Lending
BY CHAO DENG They also have more flexibility
Engineer builds game to let users run his AND LINGLING WEI to invest in risky areas than
banks do. For companies,
$50,000 stock portfolio; trouble sleeping BEIJINGChinas crack- trusts represent the next best
down on debt is driving some option as bank loans and bond
companies to a murkier form financing dry up or become
BY BEN EISEN buy or sell with his money.
Based on their votes, the game
CANCER of financing as it gets harder
to secure bank loans or tap the
more expensive.
Government-owned Qing-
On Tuesday morning, Mike is designed to make a move ev- TREATMENTS bond market. zhou City Construction & In-
Roberts, a 26-year-old software ery five minutes.
engineer from Seattle, handed Online trolls got to work
HEART RISK New loans from trusts,
firms that raise money from
vestment Co., in the eastern
city of Qingzhou, received per-
over a personal $50,000 broker- swiftly Tuesday, electing over individuals and corporations mission to issue bonds last
age account to a and over to buy LIFE & ARTS, A13 to plow into riskier areas of year. But with yields rising on
most unusual group shares of Seaboard the economy, reached 882.3 corporate debt, it has turned
of money managers. Corp., the second- billion yuan ($129.5 billion) in to a trust firm instead.
A bunch of ran- most expensive U.S.- the first four months of this Daye Trust Co. is helping
Opinion.............. A17-19 dom yahoos on the listed stock. His year, according to data from Qingzhou City Construction
Sports........................ A16
Technology............... B4 internet. $50,000 would buy the Peoples Bank of China, raise 200 million yuan through
U.K. Attack...... A10-11 People say the just 12 full shares in nearly five times as much as a two-year product that offers
U.S. News............. A2-6 stock market is just a the agribusiness and the same period in 2016. investors returns of 6.5% a
BEBETO MATTHEWS/ASSOCIATED PRESS
Weather................... A16
World News...... A8,12
game, and in the transportation firm. Chinese trust firms, which year. The firm would pay Daye
case of Mr. Roberts Mr. Roberts grew often charge borrowers higher a rate of about 8%, which is
and his hard-earned convinced trouble- rates than banks, occupy a still less than it was expecting
> cash, it really is. By
setting up an algo- Mike Roberts
makers were trying
to undermine him.
MISTAKES middle ground between bank-
ing and asset management.
to pay for bonds. Qingzhou
City Construction intends to
rithm using thou- This is exactly the WHEN PAYING They are licensed and loosely use the proceeds to finance a
sands of lines of computer code, sort of disaster I was hoping
the risk-embracing Amazon.com would not happen, he recalls
FOR COLLEGE regulated by Chinas banking
watchdog but lack some of a
water-treatment project.
One area of concern for au-
Inc. employee is allowing any- thinking. banks protections, such as thorities as they tackle soaring
one to vote on what stock to Please see STOCK page A12 JOURNAL REPORT, R1 government deposit insurance. Please see CHINA page A6
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Monday, June 5, 2017
THE OUTLOOK | By Tom Fairless
For ECB, Halting Easy Money Is Hard
As the euro-
zone economy
gathers pace,
European
Central Bank
officials are
plotting a route back to nor-
mality from an era of excep-
tionally easy money policies.
It could be a complicated
path.
The ECB has indicated it
will follow the U.S. Federal
Reserves game plan for un-
winding its policies, first by
phasing out a 60 billion-a-
month ($68 billion) bond-pur-
chase program known as
quantitative easing and then
turning to increase short-term
interest rates, which have
been negative since 2014.
But a debate has broken
out inside the central bank
about whether that sequence
is right. Some officials sug-
gested at their March meeting
starting to raise rates first, to
get them out of negative terri-
tory, before ending bond pur-
chases, a person familiar with
the matter said. Other offi-
cials, notably the banks chief
economist, Peter Praet, be-
lieve the Feds sequence has a
strong logic and are wary of
shifting from that approach.
It might sound esoteric, but
the path the ECB chooses
could have big consequences
for bank stocks and lending,
market volatility and the out-
look for the euro. The two
policies are different in part
because they affect different
kinds of interest rates. The
negative-rate policies affect
short-term rates, while bond
purchases hit long-term rates.
When Low Jobless Rates End Badly Global Growth Seen
BY JOSH ZUMBRUN
There have been only three
fleeting periods in the past
half-century when the U.S. un-
employment rate was as low
as it is today. This would be
cause for celebration but for
one disturbing fact: Each was
associated with boiling ex-
cesses that led to serious eco-
nomic trouble.
Low unemployment of the
late 1960s preceded an infla-
tion spiral in the 1970s. The
late 1990s bred the dot-com
bubble and bust. The
mid-2000s saw the buildup
and collapse of U.S. housing.
While there is reason to be-
lieve todays economy isnt
boiling over as in the past,
those episodes call for caution.
Its not a matter of super-
stition, its a matter of being
mindful of the history of what
such a low unemployment rate
usually is followed by, said
Michael Feroli, chief U.S.
economist of J.P. Morgan
Chase & Co.
While initially a welcome
development, low unemploy-
ment in the 1960s laid the
groundwork for a buildup of
wage and price pressures,
spurred on by low interest
rates and aggressive govern-
ment spending programs.
The unemployment rate
dropped to 4.3% in September
1965 and then below 4%. To-
days unemployment rate, also
at 4.3%, could drop below 4%
in the next year if it maintains
its present trajectory.
Unemployment fell again to
4.3% in January 1999. This
time the inflation rate re-
mained below 2% and it
seemed that, unlike the late
1960s, the economy wasnt
overheating.
But asset pricesthe stock
market in particularsoared
after what had already been a
long climb. The Dow Jones In-
dustrial Average shot above
10000 for the first time in
March 1998. Highflying tech
companies commanded billion-
dollar valuations with no prof-
its to report. In hindsight, an
internet bubble grew out of
control.
Economic theory draws
clear linkages between low un-
employment and inflation. As
companies compete for scarce
workers, they bid up wages
and raise prices on goods and
services to protect profit mar-
gins. The textbooks dont spell
out such a connection between
low unemployment and finan-
cial bubbles. The tech boom of
the late 1990s might have been
dismissible as a one-off event
had it not been for what hap-
Negative Equity
Bank stocks slumped as the ECB pushed interest rates below zero,
but they recently staged a rebound as the eurozone economy
picked up.
180
June 11, 2014
Cut to -0.1%
160
140
120
Sept. 10, 2014
Cut to -0.2%
100
Euro Stoxx Banks index
80 with ECB deposit rate cuts
60
2014 15
Source: FactSet
T
he distinction matters
in the markets. The
euro jumped and euro-
zone bonds tumbled in March
on reports that ECB policy
makers had considered raising
interest rates before ending
the bond purchases.
ECB officials will meet in
Estonia on Wednesday and
Thursday to consider their
next moves. Mario Draghi, the
banks president, is expected
to express greater confidence
in the economy after the
meeting. He could announce a
review of different exit strate-
gies.
The officials will meet amid
signs of an economic pickup.
Growth in the 19-nation bloc
outpaced that in the U.S. in
the first quarter, unemploy-
Omen or Coincidence?
The unemployment rate has fallen this low three times in the past 50 years.
1960s 1970s
12 %
8 rate
4 sis lows should help perk up
Low unemployment in the
1960s was followed by a surge
in consumer prices resulting in
an ination spiral...
16 %
12
8
4 The development institu-
0
4 2.7% this year. Stabilized com-
8
12
16
But many signs of excess are missing
this time. Unlike the previous three times
unemployment was so low, GDP isnt
$500 billion
above its potential right now.
0
500 GDP below
potential
1,000
1960s 1970s
*Potential GDP is the Congressional Budget Ofces estimate of the economy's maximum sustainable output. If GDP is
above potential, it means the economy is overheating.
Sources: Labor Department (unemployment, ination); Federal Reserve (household net worth);
Congressional Budget Ofce (Potential GDP)
pened next.
Unemployment fell back to
4.4% by October 2006. It coin-
cided with a home-price boom
that happened even though
broader inflation measures re-
mained stable. When housing
prices fell, a financial sector
deeply exposed to mortgage
credit collapsed and the econ-
omy entered the longest and
deepest recession since the
4.3%
The nations unemployment rate
fell to a 16-year low in May.
Great Depression.
Each of those episodes was
different, making it hard to
map out a systematic connec-
tion with low unemployment.
I dont think we can com-
pare the rate of unemployment
now and the rate of unemploy-
ment 10 or 20 years ago, said
Eugenio Aleman, a senior
economist with Wells Fargo.
The rate is similar, yes, and
its calculated the same way,
U.S. NEWS
Dec. 9, 2015
Cut to -0.3%
March 16, 2016
Cut to -0.4%
16 17
THE WALL STREET JOURNAL.
ment has fallen to an eight-
year low of 9.3%, and inflation
has risen from less than zero
to 1.4% over the past 12
months, approaching the
ECBs target of just below 2%.
Some eurozone bank execu-
tives have chafed under nega-
tive interest rates and would
like the ECB to halt the policy
as soon as possible, even be-
fore bond purchases end.
They say negative rates un-
dermine their profitsbe-
cause they arent able to pass
the costs on to customers in
the form of deposit feesand
thus curb their ability to lend.
That is crucial in an econ-
omy where businesses depend
on banks for about 80% of
their borrowing, compared
with just 20% in the U.S.
1980s 1990s
...while low unemployment in the 1990s
and early 2000s was followed by a
surge in asset prices, resulting in the
burst dot-com and housing bubbles.
1980s 1990s
but they dont represent the
same thing. The economy is
very different than 20 years
ago.
Though prices for houses
and stocks are rising again
now, the get-rich-quick mania
of the dot-com and housing
bubbles isnt so ubiquitous to-
day. Importantly, Americans
arent loading up on debt and,
in fact, have spent much of the
past 10 years reducing their
debt burdens.
Wage dynamics also have
changed. Hourly wages in-
creased more than 6% a year in
the late 1960s. They rose over
4% a year in the late 90s and
in the waning days of the hous-
ing bubble. Today, wage growth
has been stuck around 2.5%.
Hitting a low point on the
unemployment rate, compared
to history, isnt a sufficient
condition to say were near a
recession, said Gregory Daco,
the head of U.S. Macroeco-
nomics at Oxford Economics.
The wage-inflation dynamic
has not picked up, and thats
clearly something different
from the past.
Other measures suggest the
economy remains on a more
even keel. The Congressional
Some economists suggest
negative rates also encourage
people to save money rather
than spend it, thereby stunt-
ing economic growth.
ECB officials are weighing
mixed evidence as they con-
sider whether to raise rates
first. Despite bank complaints
about the impact of negative
rates, bank lending to euro-
zone companies grew at the
fastest pace in almost eight
years in April, rising by 2.4%
year over year.
Still, some officials worry
about the longer-running ef-
fects. We see the negative
impact being accumulated
over timein terms of reduc-
ing the interest margin of
banks, ECB board member
Benot Coeur said in New
York in April.
In Germany, negative rates
have become an object of
scorn in some political and
media circles, which refer to
them as Strafzinsen, or
penalty rates.
Crucially, though, Ger-
manys influential central
bank takes a different view.
The Bundesbank is less wor-
ried by negative rates than by
bond purchases, which it ar-
gues reduce pressure on euro-
zone governments to carry
out economic reforms.
To compensate for an early
rate increase, the ECB might
decide to extend its bond pur-
chases. That would likely win
favor among central-bank
governors from southern Eu-
rope because the ECBs pur-
chases of government debt
hold down their borrowing
costs. But it would displease
2000s 2010s
Unemployment
4.5%
Change in U.S.
household net
worth
Ination rate
GDP vs its
potential*
2000s 2010s
THE WALL STREET JOURNAL.
Budget Office estimates that
after all these years of sluggish
economic growth, todays econ-
omy is still producing goods
and services at a slower rate
than it is capable of producing.
Other measures support
this conclusion. In the 1990s
and from 2005 to 2007, U.S.
industries operated at more
than 80% of their capacity, ac-
cording to Federal Reserve
data. In the 1960s, they were
churning out goods at nearly
90% of factory capacity. By
contrast, U.S. industrial capac-
ity utilization maxed at just
79% in 2014 before an oil bust
and industrial slowdown idled
many factories and refineries.
There is no telling how long
this low unemployment period
will last. Still, the broader his-
torical lesson looms: Eventu-
ally these low unemployment
cycles end.
CORRECTIONS 
AMPLIFICATIONS
Readers can alert The Wall Street
Journal to any errors in news
articles by emailing
wsjcontact@wsj.com or by calling
888-410-2667.
* *** THE WALL STREET JOURNAL.
ECONOMIC
CALENDAR
MONDAY: The Labor Depart-
ment releases revised U.S. first-
quarter productivity figures. Pro-
Bundesbank President Jens ductivity, or how many goods and
Weidmann, who voted in fa- services U.S. workers produce per
vor of cutting rates below hour, fell at an annual rate of 0.6%
zero in June 2014, but has in the first quarter of 2017 from
never voted for government the prior three months, the most
bond purchases. recent report showed. Economists
Nor is it clear how much surveyed by The Wall Street Jour-
longer the ECB can continue nal expect the productivity figure
bond purchases, under which to be revised up to 0%, still re-
it has already amassed around flecting softness.
2 trillion of bonds. The pro- THURSDAY: China will release
gram is due to run through at May export dataa key barome-
least December, but con- ter of global demandwhich is
straints on its design mean expected to decelerate to around
the ECB could struggle to find 6% year-to-year growth from
enough to buy next year, par- Aprils 8% level on the heels of
ticularly German bunds. softening business sentiment in
advanced economies, weaker
W
ithin the ECB, the trade data from neighboring
debate is likely to South Korea and lower commod-
hinge on the overall ity prices.
impact of negative rates on The European Central Bank is
the economy. Late last year, expected to leave its stimulus
top ECB officials appeared to measures in place when policy
cool toward the policy, warn- makers meet for two days in Tal-
ing that it could, over time, linn, Estonia. However, the govern-
cause banks to reduce lending. ing council could change its guid-
More recently, though, ECB ance by removing language that
officials have appeared to suggests rates could be cut again
change tack, arguing that the and the size of its bond-buying
effects of negative rates have program increased.
been mostly positive. The Japan will release revised
change in tone coincides with gross domestic product figures for
a recovery in eurozone bank January through March (Wednes-
stocks, which have risen by day evening in the U.S.). Econo-
about 40% since October. mists expect GDP to have grown
Weve seen the initial im- 2.4% from the previous quarter on
pact of our negative-rate pol- an annualized basis, higher than
icy being clearly positive, Mr. the preliminary estimates 2.2%.
Coeur said. The policy an- Capital expenditures and public in-
chors short-term borrowing vestments are likely to have been
costs at low levels, stabilizes slightly stronger than estimated.
financial conditions and en- FRIDAY: China is set to release
courages banks to lend rather May inflation data (Thursday eve-
than leave excess funds at the ning in the U.S.) as economists
central bank, he said. forecast consumer inflation rose
At some point we might modestly to around 1.5% year-to-
change our conclusion, Mr. year from Aprils 1.2% level, driven
Coeur said. Were not there. by higher nonfood prices.
Hitting 7-Year High
BY IAN TALLEY dogging the global economy.
Bank economists still see a
WASHINGTONA rebound risk the Trump administra-
in trade growth from postcri- tions America First policies
could trigger a tit-for-tat esca-
the global economy next year lation in tariffs and other
to its fastest pace in nearly trade barriers in the U.S.,
seven years, the World Bank China and other countries.
said Sunday. An upward spiral in beg-
But a host of risks threaten gar-thy-neighbor protectionist
a recovery in major emerging measures would put into re-
markets and an accelerating verse the process of trade lib-
expansion in rich economies, eralization that has been a
the bank said in its flagship major contributor to deepen-
report. ing trade in past decades, the
bank said. Widening trade
tion projects global growth agreements and the growing
will hit 2.9% in 2018, up from number of World Trade Organ-
ization members have added
modity prices are allowing nearly a percentage point to
Brazil, Russia, Nigeria and global trade growth each year,
other major emerging markets it said. The unwinding of
to pull out of a two-year funk. such agreements would likely
Growth in the U.S. and Europe
is also picking up as many of
the worlds most powerful
economies finally show signs
But a host of risks
of escaping the legacies of the threaten a recovery in
global financial crisis.
Healthier industrial activity,
emerging markets, the
investment and commodity World Bank says.
prices fueled a revival in
global trade growth to 4% this
year, up from 2.5% last year,
the bank said. put downward pressure on
But it cautioned that down- trade prospects and jeopardize
side risks dominate the out- the effectiveness and viability
look. of the multilateral trading sys-
A buildup of emerging-mar- tem.
ket debt, notably in China, the The bank also said Presi-
worlds second-largest econ- dent Donald Trumps tax plan
omy, risks jeopardizing growth would boost the economy, but
around the globe. The problem likely widen the U.S. budget
is particularly acute in the deficit. It estimates the White
corporate sector. But it could Houses proposed corporate-
quickly hit the financial sector tax and personal income-tax
and state balance sheets, trig- cuts could boost near-term
ger a plunge in cross-border gross domestic product by
orders and spurring capital nearly 2 percentage points af-
flight, the bank warns. While ter two years. It currently
Chinas credit boom is the fo- forecasts a 2.2% rate in 2018,
cal point of global worries, up from 2.1% this year.
Turkey and major commodity But those cuts would also
exporters are also vulnerable likely widen the budget deficit
to debt-driven disruption. by up to 2.4 percentage points
Trade-war fears are also of GDP over the same period.
THE WALL STREET JOURNAL
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THE WALL STREET JOURNAL. * * Monday, June 5, 2017 | A3

U.S. NEWS

T&CO. 2017
Food-Libel Trial Set to Begin
Beef Products sues
A MATCH
ammonia gas to kill pathogens.
In the wake of ABCs reports,
ABC over damages
MADE IN HEAVEN
Beef Products says its sales
from 2012 reporting plummeted and ground-beef
processors canceled orders,
on a meat ingredient forcing the company to lay off TIFFANY NOVO ROUND

NATI HARNIK/ASSOCIATED PRESS

700 workers. Less than three
BY JACOB GERSHMAN weeks after ABCs first report,
AND LUKAS I. ALPERT Beef Products suspended opera-
tions in three of its four pro-
Opening statements in what cessing facilities.
could be the largest defamation The company says ABC re-
case in U.S. history are set to lied on biased experts and in-
begin Monday in a South Da- tentionally omitted accurate
kota courtroom. A worker in 2012 sorting cuts used in the production of lean finely and more positive information
In suing ABC News for its textured beef, also known as pink slime, at a Beef Products plant. about LFTBs safety.
coverage of a widely used pro- There is not a shred of evi-
cessed-meat product that the ish it for making reasonable ed- slime made from beef trim- dence, let alone clear and con-
news organization and others itorial judgments. mingsonce used only in dog vincing proof, that ABC in-
have branded pink slime, Beef In court documents, Beef food and sprayed with ammo- tended to convey the message
Products Inc. claims it was a Products has referred to ABCs nia to make them safe to eat that LFTB is unsafe for public
victim of a journalistic hit job. coverage as fake news, a term and then added to most ground consumption, ABC lawyers
The family-owned South Dakota widely used to describe scurri- beef as a cheaper filler. stated in a court filing, noting
meat processor claims the re- lous internet reporting that has The company filed suit that that its coverage repeatedly
porting reduced its revenue. broadened in use since the 2016 year, accusing ABC of creating said that LFTB is safe to eat.
Raising the stakes is a state presidential election. a false impression that BPIs In addition to its defamation
food-disparagement law that al- This was the opposite of product was not beef or meat, claims, Beef Products is suing
lows prevailing plaintiffs to tri- fake news, said ABC lawyer had little or no nutritional under South Dakotas Agricul-
ple actual damages. Beef Prod- Kevin Baine, a First Amend- value, and was not safe to eat. tural Food Products Disparage-
ucts has alleged $1.9 billion in ment attorney at Williams & Beef Products says the prod- ment Act, which imposes liabil-
damages. That means, in Connolly LLP. It was real news uct, called lean finely textured ity for knowingly publishing
theory, ABC could be hit with a of interest to consumers who beef or LFTB, is merely the re- false information that asserts
nearly $6 billion judgment, not didnt know this product was in sult of discovering how to ex- or implies that an agricultural
including any potential punitive their ground beef. tract more lean beef from cows. food product isnt safe for pub-
damages awarded if it loses. ABCs first segment on the Approved by the U.S. Depart- lic consumption.
ABC, a unit of Walt Disney product aired March 7, 2012. ment of Agriculture in 1993, To prevail, Beef Products will
Co., says it never reported any- In the report, national corre- LFTB is made from beef trim- have to show that ABC either
800 843 3269 | TIFFANY.COM
thing about the beef that it spondent Jim Avila, a defendant mings put through centrifuges knew the information was false
knew to be a lie and contends in the case, described the com- to remove fat. Some LFTB is or recklessly disregarded the
Beef Products is trying to pun- panys meat product as pink treated with tiny amounts of truth.

Border Retailers See Sales Decline

BY JIM CARLTON

SAN YSIDRO, Calif.For de-

cades, this border community
has prospered because of Mexi-
can shoppers crossing into the
U.S. to buy everything from
shoes to phones.
But a few years ago the value
of the peso against the dollar
SANDY HUFFAKER FOR THE WALL STREET JOURNAL

fell by half as oil prices plunged.

American big-box stores that
opened in Mexico siphoned cus-
tomers away from U.S. shops.
Business owners in this San
Diego district of about 30,000
people say the decline has
worsened in the last five
months over a new factor: eco-
nomic and political tension be-
tween the U.S. and Mexico.
President Donald Trump
came into office based in part
on pledges to beef up security Pedestrians walk into Mexico with shopping bags, along the U.S.-Mexico border in San Ysidro, Calif.
on the Mexican border by build-
ing a wall and renegotiating said Denise Ducheny, senior Rio Grande Valley city of McAl- They worry they will be sub-
what he called unfair trade policy adviser at the University len, where sales tax allocations ject to searches by uniformed
pacts like the North American of California, San Diegos Center fell 6.4%. Earlier this year, a so- officials and are concerned they
TODS
Free Trade Agreement. Business for U.S.-Mexican Studies. cial media campaign called could have their visas or pass- Fifth Avenue and 50th Street. 212.753.4000.
Saks Fifth Avenue Mens Store. 250 Vesey Street. 212.301.2440.
groups have cautioned the Its depressing, said Eric #AdiosMcAllen was launched, ports confiscated.
Trump administration to avoid Pineda, co-owner of a Cricket calling on Mexican shoppers White House officials didnt
putting Naftas benefits at risk. Wireless outlet in San Ysidro. across the border in Reynosa to return a call for comment.
Since Robert Lighthizer was He estimates his store has seen boycott the border city. Mr. Fullerton said retail sales
approved by the Senate to be a 50% drop in sales so far this Economists say much of the from Mexicans account for
the U.S. trade representative in year compared with last year. shortfall represents Mexicans about 10% of El Paso Countys
May, the Trump administration Still, some Mexican shoppers either making fewer shopping $12 billion in annual retail sales,
has softened its rhetoric on said Mr. Trumps tough talk trips into the U.S., or none at or between $1.1 billion and $1.2
Nafta toward modernizing the doesnt faze them. Hes just all. billion when those sales peaked
agreement rather than a whole- another president, Arlette A lot of visitors say they no in 2014. The sales fell to about
sale rethinking the issue of Mendez, a 43-year-old visitor longer feel welcome in the U.S. $1 billion last year due in part
trade that Mr. Trump prom- from Mexico City, said as she or safe, said Tom Fullerton, a to the peso problems and will
ised on the campaign trail. entered a discount outlet mall professor of economics at the likely fall below $1 billion this
The peso got a 4% bump af- in San Ysidro in April in search University of Texas at El Paso. year, he said.
ter Mr. Trumps inauguration, of brand-name clothing.
then tumbled as tensions esca- In Texas, the states five
lated between the U.S. and biggest border metropolitan
Mexico. Late Friday the dollar areasBrownsville, McAllen,
stood at 18.68 pesos. The fluc- Del Rio, Laredo and El Paso
tuations have made it less at- combined received 2.7% less
tractive for Mexicans to cross sales tax allocations in the
the border to shop. first quarter than the same
All along the border, Ameri- quarter a year earlier, accord-
can retailers are reporting ing to estimates by the Texas
sharp drops in sales this year Comptrollers office. Alloca- For all of Dads journeys, theres Brooks Brothers.
that many attribute to tough tions are a proxy for local re-
trade and immigration policies. tail spending.
Mr. Trump has insisted that Those numbers fell to $96.8
Mexico would pay for a border million from $99.5 million, even
wall, launched a renegotiation as cities statewide in Texas saw
of the Nafta and tightened de- a 2.44% jump in the sales tax al-
portation rules. locations over the same period.
Stepped-up deportations and The same data on sales tax
border enforcement, merchants allocations showed gains in
say, have discouraged many most other Texas cities that
Mexicans from venturing north arent on the border, including
to shop at stores that often fea- Dallas, up 3.8%, Fort Worth, up
ture better prices and selection 7.2%, Austin, up 4.5%, and San
on everything from womens Antonio, up 2.6%.
apparel to electronics. In Texas, the steepest decline
Its like a chilling effect, in shopping was reported in the

Hard-Hit Businesses Political leaders in San Diego

and Tijuanaa binational me-
Look to Stay Afloat tropolis of about five million peo-
plehave worked in recent years
to forge closer ties.
The sales slowdown is hav- Binational efforts have been
ing an outsize impact on San launched to open a new land
Ysidro, a community in the city port of entry and extend a rail
of San Diego where about 650 line into the U.S. In 2015 the
of 800 businesses are stores Cross Border Xpress pedestrian
that cater mainly to Mexicans, bridge opened, allowing airline
said Jason Wells, executive di- passengers to walk from the
rector of the San Ysidro Cham- U.S. to board flights at Tijuanas
ber of Commerce. He said 60 airport.
stores have closed in the 18 We will survive, but there
months though Mayhalf of will be damage to the economy,
them since the election. said James Clark, a cross-border
That started with the peso business consultant in Chula
devaluation, but the rhetoric has Vista, Calif. BROOKSBROTHERS.COM
exacerbated that, he added. Jim Carlton
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A4 | Monday, June 5, 2017 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X ** THE WALL STREET JOURNAL.

U.S. NEWS

Trump Turns to Infrastructure Revamp

President could find
bipartisan support for Plan for Air-Traffic
his effort; questions Control Gets Focus
remain over financing
In his infrastructure push,
BY TED MANN President Donald Trump will
AND MICHAEL C. BENDER embrace a longstanding goal
of some aviation experts and
President Donald Trump lawmakers: transferring con-
will launch a new campaign trol of the nations air-traffic
this week aimed at fulfilling system to a new nonprofit
his pledge for $1 trillion of in- corporation, which they say
frastructure investment, hop- would mean a more nimble
ing to capitalize on support for and cost-effective approach.
rebuilding the nations trans- Control by the Federal
portation systems. Aviation Administration, these
Mr. Trump will begin with a advocates say, is an anti-
White House event Monday quated model that falls short
announcing a push to privatize of the best practices used in
air-traffic control across the other countries.
U.S., in what backers say could Overhauling air-traffic con-
be a catalyst for improving trol would be complex, involv-
speed and fuel efficiency ing the privatization of a fed-
JOHN LOCHER/ASSOCIATED PRESS

across the aviation industry. eral workforce of some

From there, the president 30,000. The administration
will campaign for reviving in- proposes moving air-traffic
frastructure along the Ohio operations off the federal
River, then meet with mayors budget, eliminating taxes that
and governors in the White currently pay for the system
House, followed by a speech at while allowing the new opera-
the Transportation Depart- tors to impose user fees.
ment on Friday. The new system could
The White House still hasnt mean more efficient landing
said how it plans to pay for the patterns and routes for
federal governments share of planes, supporters say, and
the projects, and officials said Work in May on U.S. Interstate 11 near Boulder City, Nev. The president campaigned on a pledge to rebuild the nations infrastructure. could let air-traffic controllers
a more detailed proposal will move more planes per hour
come at an unspecified later however, mean finding a way areasfrom commuter rail- federal money could help trig- desire to cut regulation and through busy air corridors.
date. But Mr. Trumps top eco- to live up to campaign pledges roads to crumbling dams ger roughly $1 trillion of total permitting that can delay the Some lawmakers and avi-
nomic adviser said the admin- that many believe are irrecon- where investors cant turn a funding thanks to a surge in start of new infrastructure ation officials are wary of pri-
istration aims to encourage cilableinvesting $1 trillion in profit. private investment. projects. Mr. Trump has seized vatization, including those
states and cities to bear much infrastructure, but doing so Its not free, Mr. Rechler The administration hasnt on a flow chart provided by from rural states who worry
of the burden. with funds raised almost en- said. At some point or an- said how it will pay for the Mr. Cohns deputy, DJ Gribbin, that a private system would
We want to talk to them tirely from the private sector. other someones going to have federal governments share of that shows how the permitting neglect less-populated areas.
and make sure were partnering The infrastructure push is to pay for this. that investment, and hasnt process for a new highway can Others are concerned that a
with them to make sure that encouraging, said Scott Re- In remarks to reporters last put forward legislation that involve up to 16 federal agen- new system would give too
they can use their tax dollars as chler, a real-estate developer week, presidential advisers would show how it plans to cies. much influence to big airlines.
efficiently, White House Na- and former official at the Port made clear they will be at- spur private investment. Mr. Cohn said Friday that Privatization is opposed
tional Economic Council Direc- Authority of New York and tempting to pair the presi- Senior administration offi- the administration would like by many Democrats, and it
tor Gary Cohn told reporters on New Jersey who consulted dents pledge to renew critical cials didnt say if Mr. Trump to shrink the permitting isnt clear if the White
Friday. We can be a good part- with Mr. Trumps transition infrastructure with a shift of would put forward his own schedule for such projects Houses endorsement will
ner with them in helping them team. They should have responsibility for some of the proposals for raising the funds from as much as 10 years to sway enough Republican sen-
to enhance their infrastructure started with this, since its one costs from federally funded for an infrastructure package two or less. ators to change that cham-
projects. area with a level of bipartisan grant programs to state and or defer to Congress, saying The cost of infrastructure bers rejection of privatization
Shifting the discussion to support. municipal taxpayers. that is something we are cur- goes up dramatically as time less than a year ago.
infrastructure could mean the But Mr. Rechler, a Democrat Some city and state officials rently debating inside the goes on in the approval pro- The Trump administra-
best chance for Mr. Trump to whose real-estate company has say privately that they are al- White House. cess, capital is tied up, it has tions budget released earlier
find common ground with financed infrastructure in pub- ready strapped for funds and An infrastructure proposal people waiting for permits, this year included a proposal
members of Congress who ob- lic-private partnerships with worry about having to shoul- fleshed out with details will be and the amount of paperwork for privatizing the air traffic
ject to other elements of his local government, said the ad- der additional costs. ready when the president tells and the amount of fees that control system with a three-
agenda, given the broad agree- ministrations plans should The administration has us it should be ready, a senior you just encumbered while year phase-in.
ment that the nations roads, recognize that private financ- called for spending $200 bil- administration official said. youre going through the ap- Ted Mann
bridges, rails and water facili- ing wont be able to replace lion on infrastructure over 10 The administration has proval process is enormous, and Andy Pasztor
ties are in disrepair. It would, federal funding in fixing some years, saying that infusion of been most specific about its Mr. Cohn said.

Aides Defend President on Move to Exit Paris Accord

BY REID J. EPSTEIN manufacturing noncompeti-
tive.
President Donald Trumps Mr. Pruitt suggested in a
aides on Sunday defended his series of television interviews
decision to quit the Paris cli- Sunday that what the presi-
mate accord, but offered dif- dent believes specifically
fering views on the presidents about climate change is irrele-
beliefs about the environment. vant to his policy decision on
Scott Pruitt, the Environ- the Paris accord.
mental Protection Agency I think the whole question
administrator, and Nikki Ha- is an effort to get it off the
ley, the U.S. ambassador to point and the issue of whether
with the president.
Our discussion, George,
has been about the agreement,
the efficacy of the agreement,
Mr. Pruitt said. Thats what
he spent the last several
weeks focused upon, the mer-
its and demerits of the Paris
agreement. He put America
first. He said that hes going to
put jobs, and the environment
first.
believes human activity causes Mr. Kerry said on NBC.
climate change, Ms. Haley If you truly understand the
said, I mean, John, I just gave science, if you have done your
you the answer. I mean, thats due diligence and homework,
what he believes. And so thats there is no way that you can-
as clear as I know to give it. not conclude that theres an
Advocates for the Paris cli- urgency to doing something.
mate accord criticized Mr. And you would not pull out of
Trumps decision during their Paris, Mr. Kerry said.
own appearances on the Sun- Former Vice President Al
day interview shows. Gore, who met with Mr.
Former Secretary of State Trump at Trump Tower and
RON SACHS/CNP/ZUMA PRESS

the United Nations, differed Paris is good for this country Ms. Haley, in a separate in- John Kerry, who helped nego- said he has since spoken with
over whether the president or not, Mr. Pruitt said on terview on CBS, went a step tiate the Paris accord, said him about the environment by
believes climate change is ABC. The president has indi- further than Mr. Pruitt, saying Mr. Trump isnt familiar with telephone, called Mr. Trumps
man-made. cated the climate changes. Mr. Trump believes the cli- the science underlying the decision to withdraw from the
Mr. Trump has said re- Asked by ABC host George mate is changing and he be- agreement. Paris agreement reckless.
peatedly that climate change Stephanopoulos whether Mr. lieves pollutants are part of The fact is that still his It was indefensible, Mr.
is a hoax and suggested it Trump still believes climate that equation. whole staff cannot tell you Gore said. It undermines
was created by and for the change is a hoax, Mr. Pruitt When asked by CBS host whether or not he believes Americas standing in the
Chinese in order to make U.S. said he hadnt discussed it John Dickerson if Mr. Trump that climate change is a hoax, world. U.S. envoy to the U.N. Nikki Haley

HILL aged to enact a health law, a

stimulus package and the
Dodd-Frank banking measure
in the early going. But they
Continued from Page One missed other goals, such as
Mr. Warner said his com- passing an ambitious energy
mittee will press Mr. Comey bill. Some of what they did
about the circumstances sur- pass had to be significantly
rounding his abrupt firing last reined inand prompted a
month by Mr. Trump. Many backlash at the polls.
Democrats say Mr. Trump may The Republican playbook
have been attempting to ob- for confronting these chal-
struct justice by dismissing lenges consists of a series of
Mr. Comey. Mr. Trump said he interlocking steps. In the Sen-
J. SCOTT APPLEWHITE/ASSOCIATED PRESS
are planning to lay the
groundwork for a tax rewrite
during this seven-week legisla-
tive period. Mr. Trump is ex-
pected to campaign during
July and August for a tax
overhaul with an official plan
released after Labor Day, ac-
cording to a senior White
House official.
To clear a path for that bill,
House Republicans are ex-
pected by mid-June to start a
legislative process that would

fired Mr. Comey for incompe- ate, Republicans are expected allow the Senate to rewrite the
tence. The president and his to unveil their health plan as tax code with a simple major-
aides have denied colluding early as this week, then wait ity. That is important because
with Russia, which denies for the Congressional Budget Senate Republicans hold only
meddling in the election. Office to provide cost and cov- 52 of the chambers 100 seats
Meanwhile, as Congress re- erage estimates before holding and can expect little support
turns to work Monday after a a vote. A CBO analysis can from Democrats, yet they need
Memorial Day break, Senate take a couple of weeks. 60 votes to pass most bills.
Majority Leader Mitch McCon- Sen. John Cornyn of Texas, The special procedure
nell (R., Ky.) will mount a fresh the second-ranking Senate Re- would come in the form of a
effort to rewrite the Affordable publican, said recently the budget resolution for the 2018
Care Act, the Obama-era Senate Majority Leader Mitch McConnell plans a fresh effort to rewrite the Affordable Care Act. health-care debate would be fiscal year that would include
health law. Mr. McConnell said wrapped up by the end of July. instructions to write tax legis-
last month he wasnt sure how three moderate Republicans. part to project an image of ac- This isnt the first time a If the Senate passes a bill, it lation that can skirt the Sen-
he would secure enough votes The outlook for such a complishment amid the tur- party has faced pressure to would mark a major win for Mr. ates traditional obstacles.
to pass a bill given that no health measure didnt appear moil surrounding the White produce after winning control Trump and Republican leaders, The Trump administration
Democrats support the effort. to improve over last weeks House. Among the bills poten- of the White House and Con- and could lend momentum to recently issued a surprise
The House GOP plan, which break. Its unlikely that we tially in the mix is one impos- gress and found expectations other GOP initiatives. Then, warning that tax revenues are
barely passed that chamber, will get a health-care deal, ing sanctions on Iran, which colliding with political realities. however, the measure would falling short of expectations,
doesnt have enough support Sen. Richard Burr (R., N.C.) cleared the Senate Foreign Re- One challenge is that Con- have to be reconciled with the prompting Treasury Secretary
to pass the Senate, which is told a North Carolina televi- lations Committee last month. gress and the White House op- House version to become law. Steven Mnuchin to urge Con-
expected to advance its own sion station in a blunt assess- The House and Senate plan erate on different clocks, and That could take months, or not gress to raise the countrys
plan. To pass that bill and ment of the prospects for re- to leave for a five-week recess the window of opportunity that happen at all during this con- borrowing limit before it ad-
count on Vice President Mike pealing and replacing the law starting July 28, though that opens in the early months of a gressional session. journs for the August recess.
Pence to provide the tie-break- often called Obamacare. could be delayed. Pressure on presidency can narrow rapidly, Defeat of a GOP health plan The timing is earlier than esti-
ing vote, the Senate can afford If the GOP health push fails, lawmakers ahead of that break as lawmakers turn their atten- in the Senate would leave Re- mates independent fiscal ana-
to lose only two GOP votes. Congress would likely next put has intensified, with the Trea- tion to midterm elections. publicans with one more sig- lysts have cited.
That is a tough goal because its energy into a tax overhaul, sury Department urging Con- When President Barack nificant card to play: a tax Peter Nicholas, Nick
conservative Senate Republi- while also taking up other gress to raise the governments Obama led a Democratic take- overhaul. Republicans from Timiraos and Jay Solomon
cans are at odds with at least measures along the way, in debt limit before departing. over in 2008, Democrats man- Congress to the White House contributed to this article.
THE WALL STREET JOURNAL. Monday, June 5, 2017 | A5

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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

U.S. NEWS

Main Street Wary of Health Cuts U.S. WATCH

PENNSYLVANIA
In Iowa, constituents Cosby Assault Trial
pull senators many Set to Begin Monday
ways on revamping
Comedian Bill Cosby has been
Affordable Care Act accused of sexual assault by
dozens of women over the past
BY KRISTINA PETERSON several years, but his trial start-
AND STEPHANIE ARMOUR ing Monday outside Philadelphia
could be the only time he will
GUTHRIE CENTER, Iowa have to defend himself against
Craig Barnum, a school admin- criminal charges in court.
istrator, took the afternoon off The Montgomery County dis-
recently and drove three hours trict attorney charged Mr. Cosby
to Sen. Chuck Grassleys town- with three counts of aggravated
hall meeting to press the Re- indecent sexual assault, alleging
publican senator on the GOP he drugged a woman at his
plan to overhaul health care. home in 2004. Mr. Cosby, 79
Mr. Barnum has health in- years old, has said he wont tes-
surance through his work. But tify. He has said the woman
his family depends on Medic- consented to his sexual ad-
aid to help cover the medical vances. The parties settled a
costs of his 9-year-old son, civil case in 2006 for undis-
whose delayed development closed terms. Mr. Cosby faces up
means he needs expensive to 10 years in prison if convicted
therapy and equipment includ- in the criminal case.
ing leg braces. Kris Maher
An independent voter who
lives in Cedar Rapids, Mr. Bar- MINNESOTA
CHARLIE NEIBERGALL/ASSOCIATED PRESS

num said he is worried about

the impact of Republican plans Museum Takes Down
to cut Medicaid, the federal- Gallows Sculpture
state health program for the
poor and disabled, as part of The Walker Art Center in
legislation to dismantle and Minneapolis on Friday began dis-
replace the underpinnings of mantling a sculpture that repre-
the Affordable Care Act. Its sented historical state-sanc-
pretty frightening for a family tioned hangings, including the
in my position, Mr. Barnum execution of 38 Native Ameri-
told Mr. Grassley. Karon Finn of Creston, Iowa, right, addresses Iowa Republican Sen. Chuck Grassley at a town-hall meeting Friday in Greenfield, Iowa. cans in 1862, after being lam-
As Republicans in the U.S. basted for cultural insensitivity.
Senate return to Washington Wis.) tweeted in April. That Scaffold, an art installation
on Monday and turn to draft- Iowas Expansion ends the expansion. Others believed most of the ACA fits with the GOP message the that resembled gallows, had
ing their legislation to repeal could see benefits curtailed un- should be preserved. Its just ACA is collapsing on its own, a been exhibited in the Nether-
much of the ACA, Iowa dis- Of Medicaid Rolls der a broader funding change got to be edited, he said. notion rejected by Democrats, lands, Scotland and Germany.
plays the stakes for individual Is Test for Overhaul Republicans are considering for But others are wary of the who say many of the ACAs But when the sculpture came to
states and the senators who Medicaid, which serves low-in- programs costs. Given the diffi- problems are due to GOP Minnesota, it was criticized by
represent them. come and disabled people. culties Iowans face as private threats to eviscerate it, and Dakota tribal members and oth-
Both Mr. Grassley and Sen. Few issues are as fraught Iowas Medicaid program insurers pull out of the states that Iowa is an unusual case. ers for not acknowledging the
Joni Ernst, his fellow Iowa Re- for the Republicans writing a costs about $4.5 billion a year ACA exchanges, they say that Some health experts say pain it could evoke by being dis-
publican, suggested recently health overhaul in the Senate and almost 600,000 Iowans some GOP ideas make more Iowas health system isnt a played just 80 miles from the lo-
that a full repeal was unlikely, as how to handle Medicaid. got services through the pro- sense now, such as easing the harbinger of what other states cation of a mass execution.
given Republicans 52-48 Sen- Iowas experience shows the gram in 2017, according to the sale of insurance across state can expect. Iowa insurers had Olga Viso, director of the
ate majority and rules in the delicacy of the issue. Kaiser Family Foundation. Char- lines. Were going to have to particular trouble setting up Walker Art Center, apologized
chamber limiting what sorts of The state in 2013 used fed- ity care provided by all Iowa do that because there wont be networks with low prices be- for not engaging the community
bills can pass with only 51 eral funds to expand Medicaid, hospitals has declined $127 mil- anyone left in Iowa, said Jeff cause there are few providers before construction began. She
votes rather than 60. while also imposing a small lion, or 38%, since 2014, accord- Evans, a Republican broadband and hospitals to compete and the sculptures artist, Sam
At his town-hall meeting in premium for certain beneficia- ing to the Iowa Hospital Asso- technician in Pleasantville. against one another in the Durant, met with a group of Da-
Guthrie Center, Mr. Grassley ries. The number of uninsured ciation. He said Democrats solu- states many rural areas. kota elders last week to discuss
got an earful from residents Iowans dropped 38% between Some of President Donald tions too often rely on boosting Insurers who participated a remediation process.
whose premiums have risen 2013 and 2015, according to a Trumps supporters are wary of funding. But Democrats said in the Iowa exchange expected Melissa Korn
and choices dwindled as insur- review of U.S. Census data by the proposed changes to Med- helping people pay for their to be reimbursed under what
ers that offer plans in the Families USA, a nonpartisan icaid, including a plan in the health coverage is crucial. If the is know as a risk-corridor pro- CALIFORNIA
states ACA marketplace have health advocacy group. health-overhaul bill passed last states Medicaid is cut, its gram set up by the ACA. But
fled, potentially leaving Iowa Almost 150,000 Iowans month by the House that back to those people falling Republicans limited funding Man, Without Ropes,
without any major companies gained coverage under the Med- would trim $834 billion from through the cracks, said Sandy for the payments. Scales El Capitan
offering plans in 2018. icaid expansion, just part of the the program over a decade. Rumelhart, a Democrat and re- Meanwhile, an Obama ad-
The defections have turned millions added to the program I dont want to see cuts to tired hospital secretary in Guth- ministration decision to allow An elite rock climber has be-
Iowa into a poster child for nationally under the Affordable Medicaid, said Stacy Brewster, rie County. states to let people keep insur- come the first to climb alone to
Republicans who assert that Care Act. Most of them stand a Republican and retired 3M Co. Kristina Peterson ance plans they already had the top of the granite wall
former President Barack to lose insurance if Congress purchasing agent, who said he and Stephanie Armour even if they didnt comply known as El Capitan in Yosemite
Obamas health law has failed with ACA requirementsper- National Park without using
and must be replaced. mitted younger and healthier ropes or safety gear.
Iowa is in a world of hurt, There are people that are Obamacare, is perfect, Rep. whether to remain. people to stay on those less- Alex Honnold, 31, completed
and something has to be done getting help from the ACA and Dave Loebsack (D., Iowa) told If Gunderson and Medica robust plans. That drove older the free solo climb Saturday in
because Obamacare is a total then theres people that have a Rotary Club this week in were to pull out, roughly and sicker people to plans that nearly four hours, according to
disaster, said Guthrie County been harmed by the ACA, Mr. Knoxville, Iowa. 50,000 people who buy health did comply, leaving those in- National Geographic.
resident Vinita Smith, a Re- Grassley said at the recent Wellmark Blue Cross Blue coverage on Iowas ACA ex- surers with higher costs and Climbing the 3,000-foot El
publican retiree who used to town hall. He added he would Shield and Aetna announced in change could have no insur- heavier financial losses. That Capitan used to take days to
work for the state legislature. prioritize protecting children, the spring that they were leav- ance options, including the had a big effect in Iowa. complete with the aid of ropes,
Democrats, meanwhile, ar- seniors and the disabled from ing the states individual in- roughly 85% of those people The individual market was safety gear and a partner. In the
gue that Iowas coverage gains bearing the brunt of any cuts, surance market. Medica, the who get subsidies. broken before the ACA, said past few decades, speed climb-
under the Medicaid expansion but that able-bodied adults third dominant player in Iowa, With another insurer leav- Peter Damiano, who heads a ers working in tandem and using
under the Affordable Care would be less shielded. has said its ability to stay is ing the Iowa insurance market, public policy center at the Uni- ropes have set records in reach-
Actabout 150,000 Iowans Iowas precarious health- also in question. The smallest more Americans will be left versity of Iowa. Iowa has got- ing the cliffs top. Mr. Honnold is
were added to the program care system is also putting player, Gunderson Health Plan, without a choice when it ten lots of attention. And now the first to scale it alone with-
could be swept away by the pressure on Democrats. I sells in only a small number of comes to their health care, good parts of the ACA like Med- out protection in mere hours.
GOP effort to cut it. would never say the ACA, counties and is still weighing House Speaker Paul Ryan (R., icaid could be damaged. Associated Press

P E R F E C T F O R FAT H E R S D AY FROM PAGE ONE

CHINA Into the Gray

Chinas moves to rein in risky activity by banks has raised funding costs, driving more borrowers to
shadow nancing.
Continued from Page One
Chinese debta factor in Five-year corporate bond yields New trust loans Size of nancing markets
Moodys Investors Services 5.0% 1.0 trillion yuan 120 trillion yuan
downgrade of Chinas sover-
eign debt last monthare 4.8 0.8 100 Shadow banking*
loans that banks disguise as Bank loans
$ 4.6 0.6 80
24999 investments. A shift to trust
zvox.com lending would make it even 4.4 0.4 60
harder to gauge the true ex- 4.2 0.2 40
Cant Hear tent of credit in the system.
Regulation of the trust sec-
tor has been much more ad
4.0 0 20

Voices On TV? hoc compared with that of

the formal banking sector, said
Our AccuVoice Speaker uses George Xu, a Moodys credit
hearing aid technology analyst. As a result, trust
to make TV dialogue crystal clear. firms can hide where theyre
investing.
Cant hear dialogue on TV? Youre not alone. Todays Chinas banking regulator
TVs have tiny speakers with weak sound. Our new declined to comment on the
AccuVoice Speaker uses advanced computer rise in trust loans.
algorithms to lift voices out of background sounds. Actions by Chinas central
Dialogue is incrediby clear, even at low volumes.
bank and banking regulator to
Only 17" wide, it fits anywhere. Hookup is simple
raise short-term funding costs
one connecting cord. Room-filling home theater
and rein in banks hidden loans
sound, with the clearest voices weve heard on any
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reluctant to lend.
China Zheshang Bank Co., a
midsize lender that had grown
Great for folks who have trouble hearing the TV. CNET with the help of off-book loans
and aggressive lending tactics,
said that it would step up
scrutiny of borrowers, turning
down property developers in
Great Sound. Made Simple. cities with unsold housing and
businesses in outdated indus-
800-946-2152 tries.
The regulatory storm has
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roiled Chinese markets, send-
ing bond yields to the highest
IF SOLD OUT ON AMAZON ORDER AT ZVOX.COM levels in two years, as banks
sell down their bond holdings
3.8
J F M A
*Includes hidden loans by banks, trust loans, entrusted loans and other forms of gray-area lending Note: 10 trillion yuan = $1.46 trillion
Sources: Wind Info (bond yields); Peoples Bank of China (new trust loans); Moody's Investors Service
to boost liquidity. Yields rise
as bond prices fall. Higher
yields are a burden for compa-
nies, many of which have can-
celed bond-issuance plans.
The market stress has made
Beijing wary that it is moving
too fast. According to people
familiar with the matter, the
central bank and the banking,
securities and insurance
watchdogs have held meetings
in recent days to discuss how
to tackle the debt problem at a
more measured pace.
Authorities continue to give
trusts more leeway than banks
to invest in risky projects, in-
cluding property, steel and
other sectors, where authori-
ties have tried to dial back
borrowing.
Shanxi Trust Co. in northern
China said it issued the sixth it-
M
0.2
2006 08 10 12 14 16 17
January through April
eration of a trust product for a
local construction company in
April, with the aim of raising
50 million yuan. The borrower
had been working with the
trust firm for the past few
years, according to Liang Lu, a
project manager at Shanxi
Trust, who said its customers
dont typically include compa-
nies that can get bank loans.
Trust loans have surged at
times in the past, amid regula-
tor tolerance and high demand
for credit from companies
when the economy was boom-
ing. A record surge in the first
four months of 2013 led regu-
lators to crack down on the
sector. Two years later, trusts
helped investors leverage bets
to buy stocks, which contrib-
uted to a flood of borrowing
that culminated in a market
0
2011 12 13 14 15 16
THE WALL STREET JOURNAL.
crash that summer.
At the end of 2016, trust
loans made up 10% of Chinas
total shadow-banking sys-
tem, or lending outside regu-
lar bank loans and bond mar-
kets, according to Moodys.
Trust loans accounted for 15%
of total shadow banking as of
the end of 2013. Moodys says
the decline in share was
mainly because high-yielding
investment products from
banks, another kind of shadow
lending, grew faster.
Even companies with access
to formal banking channels
and the capital markets are
turning to shadow lending.
It takes time to issue bonds,
said Eva Lau, investor-relations
manager at Shimao Property
Holdings Ltd., one of Chinas
largest property developers.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, June 5, 2017 | A7

PAID ADVERTISEMENT

50 U.S. GOVERNORS
UNITE TO SUPPORT ISRAEL,
FIGHT BDS We, all 50 governors across Israel is a robust democracy with many rights and
the United States and the freedoms that do not exist in neighboring countries
mayor of the District of or in much of the world. Yet, while fundamental rights
Columbia, affirm: are trampled and atrocities are committed routinely
not far beyond its borders, BDS supporters focus only
The goals of the BDS
on Israel.
(Boycott, Divestment and
Sanctions) movement are The BDS movement would also undermine peace-
antithetical to our values and the making by suggesting that economic and political
values of our respective states. pressure on Israel can replace real negotiation.

We support Israel as a vital U.S. ally, important
economic partner and champion of freedom.
The BDS movements single-minded focus on the
Jewish State raises serious questions about its
motivations and intentions.
Our commitment is to the principle of two states for
two peoples, existing side by side in peace, security
and mutual recognition, and achieved through direct,
bilateral negotiations.

ALABAMA I LLI NO IS MO NTANA RHODE ISLAND

KAY IVEY BRUCE RAUNER STEVE BULLOCK GINA RAIMONDO

A L AS KA I NDIANA NEBRASKA S O U TH CA R O L I N A
BILL WALKER ERIC HOLCOMB PETE RICKETTS HENRY MCMASTER

A R I ZO N A I OWA NEVADA S O U TH DA KOTA

DOUGLAS A. DUCEY KIM REYNOLDS BRIAN SANDOVAL DENNIS DAUGAARD

A R KA N SAS KAN SAS NEW HAMPSHIRE TEN N ESS EE

ASA HUTCHINSON SAM BROWNBACK CHRISTOPHER T. SUNUNU BILL HASLAM

C A L I F O R NI A KE NTUCKY NEW JERSEY TEXAS

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C. L. BUTCH OTTER TOM WOLF AJC.org/governors

This message was made possible through the generosity of:

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New York, NY Davison Kempner, Jr. Melnick Steven Silverstein Chicago, IL
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A8 | Monday, June 5, 2017
Deadly Bombing Spurs Kabul Crackdown
Mass arrests follow
suicide attack at
funeral, as president
appeals for unity
BY JESSICA DONATI
AND EHSANULLAH AMIRI
KABULAfghan authorities
on Sunday arrested more than
a dozen people in connection
with a triple suicide bombing
at a funeral the day before,
capping one of the most vio-
lent weeks in the capital in
years.
The funeral was held for the
son of the deputy speaker of the
Senate, who was shot in clashes
with police at a protest against
the government over its failure
to prevent a massive truck
bombing on Wednesday. That
bombing killed at least 90 peo-
ple and injured more than 400.
The spate of violence has
left more than 600 people
dead or wounded in recent
days and prompted President
Ashraf Ghani to appeal for
unity in a televised address on
Saturday evening.
Over the weekend, the
United Nations and U.S. em-
bassies issued statements urg-
ing calm. Several embassies,
including the German, United
Arab Emirates and British,
Iraqi Forces Capture Town on Islamic State Supply Route
BY BEN KESLING
MOSUL, IraqIraqi para-
military forces captured a hub
on a key Islamic State supply
route between Syria and Iraq,
further disrupting the flow of
fighters and goods between
the terror groups major urban
strongholds, Iraqs defense
ministry said.
Units from Iraqs predomi-
nantly Shiite Muslim militias
on Sunday retook the north-
west town of Baaj, about 100
miles from Mosul, where Is-
The
Death
of Field
Sales
This book challenges
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People in Kabul on Saturday ran following a suicide blast at a funeral, capping one of the most violent weeks in the capital in years.
withdrew staff from Afghani-
stan after the truck bomb
damaged their premises.
The collateral damage ex-
tended into international di-
plomacy. It wasnt immedi-
ately clear whether an
international peace conference
to be hosted by the Afghan
government in the week ahead
would take place as scheduled.
lamic State has lost substan-
tial ground to U.S.-backed
Iraqi forces. Baaj served as a
staging ground for the extrem-
ists during a lightning advance
that saw them seize about
one-third of Iraq in 2014.
The town and the surround-
ing district, much of which
sits on the Iraq-Syria border
and which Iraqi forces also
captured, have since been a
main way station between Mo-
sul and Raqqa, the Syrian city
that is the groups de facto
capital in Syria.
WORLD NEWS
The more immediate con-
cerns in the capital were fears
of renewed ethnic violence in
a city that was reduced to rub-
ble during a civil war in the
1990s.
Many top government offi-
cials at the funeral belonged
to the countrys Tajik-led Ja-
miat-e Islami political party,
and some accused the Pash-
Advance comes as
U.S.-backed troops
try to take western
Mosul from militants.
Its a fatal blow to Daesh
there since the liberation of
the Baaj district means cutting
off the connection between
the Syrian Daesh in Raqqa and
Iraqi Daesh in Mosul, said
tun-led government of a plot
against the group.
The Afghan government
said the attackers had been
trained in Pakistan, which it
accuses of using the Taliban as
a proxy force to destabilize
the country.
Islamabad denies the
charge. The U.S. last year cut
aid to Pakistan, demanding the
Brigadier Tahseen al-Khafaji,
spokesman for the defense
ministry, using the Arabic ac-
ronym for Islamic State.
Much of the border area is
sparsely populated and po-
rous, allowing Islamic State to
ferry goods and fighters. But
as key roads and towns come
under Iraqi control, options
for Islamic State to resupply
are diminishing.
Iraqi forces drove the ex-
tremists from east Mosul in late
January, and have since Febru-
ary fought a grinding battle for
Police Rule Out Terrorism
In Attack on Manila Casino
BY BEN OTTO
AND JAKE MAXWELL WATTS
MANILAThe gunman who
went on a deadly rampage at a
metro Manila gaming complex
was a Filipino gambling addict
who had been recently barred
from the countrys casinos,
Philippine police said.
On Sunday, police identi-
fied Jessie Carlos as the as-
sailant in an early Friday gun-
and-arson attack at Resorts
World Manila that left at
least 36 casino guests and
employees dead of suffoca-
tion from smoke.
Philippine President Rodrigo
Duterte said on Saturday the
tragedy didnt resemble a ter-
rorist attack by Islamic State,
which has claimed the gunman
was one of its fighters. Mili-
tants allied with Islamic State
have been fighting Philippine
* ****
country do more to fight ter-
rorism on its soil.
Those angry with the gov-
ernment included the powerful
Tajik governor of northern
Balkh province, Atta Moham-
mad Noor, who said on Sunday
that the Jamiat-e Islami party,
in which he is a senior member,
had declined to meet with the
president to discuss the attacks.
the citys west side. Victory in
Baaj came as Iraqi troops con-
tinued a slow final advance in
Mosul, marked by difficulties in
using air power or heavy artil-
lery in the densely populated
area and Islamic States use of
civilians as human shields.
At an operations center
close to the front lines in Mo-
sul, Iraqi army Col. Hussein
Mustafa sat on Sunday with
American advisers in a dark
room with large monitors,
watching aerial surveillance of
the front lines.
Oscar Albayalde of the Manila police, at right, comforted the
mother of attacker Jessie Carlos at a news conference on Sunday.
the request of Mr. Carloss
family. Mr. Carlos, who was in
his early 40s, was a father of
three who lived with his wife
in Manila, police said.
This could have probably
THE WALL STREET JOURNAL.
In a Facebook post, Mr. Noor
said the party had instead sent
a delegation of 10 people to
talk to Chief Executive Abdul-
lah Abdullah, whose role is
similar to that of a prime min-
ister and is seen to represent
Tajik interests. Mr. Abdullah
has urged people to unite
against terrorism, and let the
government continue its work.
Mr. Abdullah is part of a
unity government formed with
Mr. Ghani, who belongs to the
majority Pashtun ethnic group,
JAWAD JALALI/EUROPEAN PRESSPHOTO AGENCY
in late 2014 after conceding
defeat in a bitterly disputed
presidential election.
Rivalry and infighting has
crippled their partnership and
hampered efforts to fight cor-
ruption in the country.
In his televised address late
on Saturday, Mr. Ghani vowed
to deliver long-promised secu-
rity-sector overhauls.
The countrys armed forces
remain in disarray following the
resignation of top officials after
a devastating attack on the
armys northern headquarters
in April.
More than 170 people died
when Taliban fighters infil-
trated the heavily fortified base
with heavy weapons and mas-
sacred soldiers at rest for lunch
and afternoon prayers.
Habib Khan Totakhil
contributed to this article.
Some 300 to 400 civilian
families were still trapped in
his sector, just outside of Mo-
suls Old City. The sector is
only a fraction of what re-
mains under Islamic State con-
trol in the city.
Elsewhere, closer to the
fighting, gunfire sounded a
few hundred yards away from
a stream of civilians as they
hurried away from the front
lines.
Ghassan Adnan
and Awadh Altaie
contributed to this article.
JOSEPH AGCAOILI/AGENCE FRANCE-PRESSE/GETTY IMAGES
ters in Macau and Singapore.
Mr. Carlos was able to walk
past a metal detector at an en-
trance, which was staffed by a
single guard, a video of the in-
cident shows. Police only
 
 troops in the countrys south
for nearly two weeks, leaving
triggered him, Mr. Albayalde
said, describing Mr. Carlos as
caught up to him once he had
taken his own life.
more than 100 people dead. a high roller who typically Police said they are still in-
FREE   
The days of face-to-face
selling are numbered for
most organizations. Most
customers dont want it
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The Machine will prove you
must completely rethink sales
that commissions should be
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and that salespeople should
Also on Saturday, dramatic se-
curity video footage of the at-
tack was released to the public.
Manila Police Chief Oscar
Albayalde, who spoke to the
media on Sunday alongside
Mr. Carloss family at a hotel
next to the casino, said the at-
tacker had a gambling addic-
tion and was deep in debt.
Police said the government-
owned Philippine Amusement
played with a minimum bet of vestigating how Mr. Carlos
40,000 Philippine pesos was able to carry out the at-
($808). Mr. Albayalde said Mr. tack and will meet this week
Carlos had been addicted to with the heads of security of
gambling for several years and all the major casinos to review
had sold property to try to security protocols.
settle his debts. Police said Mr. Carlos was a
The security failures that former employee of the gov-
allowed Mr. Carlos to rampage ernments Finance Department
through the casino tarnish the who had been fired. Local me-
Philippines hopes of building dia said his departure was re-
a gaming industry on a swathe lated to discrepancies in his
 
  and Gaming Corp. banned Mr. of reclaimed land to rival personal statement of assets
do NOTHING but sell (6 hours Carlos from casinos in April at Asias biggest gambling cen- and liabilities.
A new, better    
 

alternative to sales This book will then walk you step- WORLD WATCH
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called to consolidate the govern-
company related to the Panama
Prime Minister
Wins Second Term
Prime Minister Joseph Muscat
claimed victory in early elections
QATAR
ments position amid corruption al-
legations against his wife and
some political allies. Unofficial re-
sults showed the Labor Party with
55% of the vote. Victory would
give the party a five-year term.
Mr. Muscat called the vote
following an investigation into al-
legations that his wife owned a
The move by Saudi Arabia, the
Papers leaks, which exposed the United Arab Emirates and Bahrain
identities of people with offshore marks a sharp escalation of a rift
holdings in Panama. He and his that started May 24, when Qatars
wife deny wrongdoing. official news agency posted com-
Associated Press ments purportedly by the coun-
trys emir that praised Iran and
called Hamas the legitimate repre-
sentative of the Palestinian peo-
Three Gulf Nations ple. Qatar said the news agency
Cut Diplomatic Ties had been hacked. The countries
said they would also close off air
Three Persian Gulf countries and sea routes and gave Qatari
cut diplomatic ties with Qatar,
accusing their neighbor of med-
diplomats 48 hours to leave.
Qatar didnt immediately re-
dling in their internal affairs and spond to the moves.
backing terrorism. Nicolas Parasie
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, June 5, 2017 | A9

Most Watched.
Most Trusted.

# 1 IN
ALL OF CABLE
11 months in a row

# 1 IN
CABLE NEWS
Total Day & Primetime for
185 consecutive months

# 1
NEWS NETWORK
in A25-54

Source: Nielsen, Live+SD, #1 in all of basic cable (11 months in a row), Jul16-May17, M-Su 6A-6A, P2+. #1 in cable news for 185 consecutive months, Jan02-May17, M-Su 8-11P + 6A-6A, P2+. FNC #1 News Network in A25-54, May17 (M-Su 8-11P + 6A-6A) with A25-54, FNC vs. CNN and MSNBC.
Subject to qualifications which will be made available upon request.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Monday, June 5, 2017 * *** THE WALL STREET JOURNAL. THE WALL STREET JOURNAL. **** Monday, June 5, 2017 | A11

U.K. TERROR ATTACK

Police Arrest 12 in Raids on Apartments in London

SKY NEWS/ASSOCIATED PRESS; REUTERS TV/REUTERS (RIGHT)

Investigators seek addresses in Barking. The

possible accomplices;
neighbors recognize
photo of dead attacker
Early on the morning after
the London Bridge attacks, po-
lice swooped into a modern
apartment complex in the east
Above left, people run from the scene; at right, police entering a bar warning people to get down. London neighborhood of Bark-
women ranged in age from 19
years old to 60. The men, one of
whom has since been released,
were aged between 28 and 55.
The identities of the people ar-
rested werent released. Neigh-
bors at the Barking complex
said they didnt know the men
who were picked up.
Police said they didnt make
any arrests at two residences in

Assaults Shatter an
ing, apparently a focal point in
their hunt for clues about the
three men who killed seven
people in Saturday nights ter-
ror rampage.
the borough where East Ham is
located.
But two neighbors at the
Barking complex recognized, in a
photo of one of the attackers ly-

Evenings Revelries
By Benoit Faucon,
Max Colchester,
Georgi Kantchev
and Philip Georgiadis
LONDONIt all happened in Later Sunday, the police
eight minutes. mounted a dramatic pursuit of
The evening was warm, and a man on a low-rise rooftop in
Borough Market was buzzing. the nearby district of East Ham.
The fruit and vegetable stalls, Police with dogs and some with
along with the butchers and the rifles pointed skyward ran
fish and cheese mongers, were along the street, witnesses said.
closed for the day, but the The man tried to escape by
pubs, wine bars and restaurants scrambling through a window.
YANN FOREIX/LP/ZUMA PRESS
ing dead in the street near Bor-
ough Market, a British-Pakistani
man who lived with family mem-
bers in a ground-floor apartment.
The neighbors said that apart-
ment was the target of the raid.
The attacker recognized by
the neighbors was known to
them as a welcoming man who
regularly organized table-tennis
competitions in the lobby of the
building. About a week before
the attack, he invited neighbors
to a barbecue in his garden.
But he had a more incendiary

that dot the market were filled A video shot by a witness at side. In 2015 he got into an argu-
with customers cheered by the East Ham and viewed by The ment with the imam during
summery weather. Wall Street Journal showed prayers at the Jabir bin Zayd Is-
three men and a woman being lamic Centre, a nearby mosque,
By Stu Woo, taken away by police. One of according to an official at the
Riva Gold the men wore a white robe and mosque. The imam had implored
and Georgi Kantchev white hat. locals to vote in the elections. Af-
Identifying any possible ac- ter the fallout, the man never re-
A short walk away, London- Flowers for the victims at a memorial in the Borough Market area complices of the three London turned to pray, the official said.
ers and tourists strolled along Bridge attackers and trying to On Saturday, neighbors said
London Bridge across the River crowded outdoor tables of Cafe shutters, leaving about two feet divine their motives is a prime they saw the man washing
Thames. Brood, a grill-and-tapas restau- of space at the bottom so they task for the police. A Western down a large white sedan,
That tranquility was shat- rant. In the bustle, the men could crawl back inside. They security official said at least wearing the same top and cam-
tered just a few minutes after seemed taken aback, at least at barricaded the space with one of the attackers was born ouflage trousers depicted in the

CARL COURT/GETTY IMAGES

10 p.m. on Saturday when three first, said Mark Stembridge, the chairs, and diners were moved in Pakistan. The nationalities of photo of the attacks aftermath.
men in what witnesses de- restaurants owner. the second floor of the restau- the other two attackers The man bumped into Ken
scribed as a white delivery van The three were brandishing rant. Mr. Applebee said he couldnt be learned, nor could it Chigbo, a neighbor who was do-
careened across the bridge at long knives, Mr. Stembridge warned diners to stay away be determined whether those ing some moving, and asked
high speed, heading toward said, and as soon his staff saw from the windows and served detained were suspected of be- where he rented his van from.
Borough Market. the men, they began herding as them water. ing accomplices or associates. Me and my family are thinking
The van slammed into pedes- many customers as they could Apparently deterred from Police said seven women and of moving out soon, Mr.
trians on the sidewalk near the into the restaurants indoor entering restaurants, the three five men were arrested at two Chigbo said the man told him. With the help of a lift, investigators loaded a van into a larger truck on London Bridge on Sunday. Police are hunting for possible accomplices to the three men who left seven people dead in the weekend attack on London Bridge and Borough Market.
bridges south end, then three section. The men seemed to men targeted individuals in-
men raced away from the vehi- hesitate and then moved on to stead. A few tried to fight back,
cle wielding knives and wearing
what police said later were fake
explosive vests.
Police said they received the
another pub, he said.
Jack Applebee said he was
having a vape with friends out-
side the door of the seafood
throwing wine bottles and
glasses.
Gerard Vowls said he saw
three men dashing down one of
ATTACK in Pakistan, a Western security
official said.
Twelve people were arrested
Sunday in Barking, East London,
especially online, the strategy
needs to keep up, Mrs. May
said following an emergency
meeting with senior officials
Night of Terror
On Saturday night, a van plowed into pedestrians on London Bridge and knife-wielding attackers stabbed people in Borough Market.
A day later, police arrested 12 people in connection with the attacks in an East London neighborhood.
Uncertainty Grows
first reports of an incident at
London Bridge at 10:08 p.m.
Squad cars, ambulances and
restaurant near Cafe Brood that
bears his familys name when a
young woman ran by scream-
the winding lanes inside the
market. All they wanted to do
was kill people, he said, adding
Continued from Page One
there is too much tolerance of
extremism and more must be
in connection with the attacks,
and authorities were carrying out
raids in a nearby neighborhood.
Sunday morning. She an-
nounced a review to see if po-
lice and security services had
2 miles

2 km
Barking
Twelve people
In Coming Election
specially armed and helmeted ing, Someones running around that he heard one of the men done to stamp it out. I.J. Johnson, who lives across sufficient powers and to exam- arrested Sunday
police rushed to the scene. So- stabbing people! say, This is for Allah. With voting set for Thursday, the street from an apartment ine whether prison sentences 1 London Bridge BY JASON DOUGLAS
cial media lighted up. Mr. Applebee said he ran in- Far above the market, inside campaigning will resume on building in Barking that was for even less-serious offenses East Ham A van jumped onto the
After leaving from the van, side the restaurant and told one of the restaurants in the Monday, with security issues raided, said he saw a white van should be increased. LONDON Witness saw a half- sidewalk, striking pedestrians. LONDONBritains already
the three men ran along the about 50 customers to move Shard, the tallest building in likely to take center stage. For rushing out of the complex In terms of their planning dozen people arrested tightly fought general election
Yellow dots show locations
River Thames
bridge toward the market, quickly to the rear of the dining the European Union, Gemma Mrs. May, the issue is a double- around 9 p.m. Saturday. and execution, the three recent of injuries taken from campaign was thrown into fur-
which is nestled next to a span room. About a minute later, the Martinez and Karl Reed were edged sword: As a former Home The attack brought to 34 the British attacks are not con- Site of social media. ther uncertainty by the week-
attacks R i v er
Th a m e

s
and under a railroad trestle. three men were standing in sitting down to their window Secretary from 2010 to 2016, she number of people killed in three nected, she said. But we be- 200 feet end terrorist attack in London,
(detail)
They encountered a British front restaurants wall-to-wall table for dinner when they saw knows the issue inside out. But terrorist incidents in the U.K. lieve we are experiencing a new the second such assault to hit
Transport Police officer, one of windows, gazing inside. One of hordes of police vehicles and any lapses that emerge from in- since March 22, when a car trend in the threat we face, as the country in less than two
the first responders to early re- the three held what Mr. Ap- ambulances converging on the vestigations of possible failings driver killed four people on terrorism breeds terrorism. weeks.
ports of the incident. At least plebee described as a machete. market, and spotted police ves- by the police or security services Westminster Bridge and then MI5, Britains domestic secu- The issues of security and

CHRIS RATCLIFFE/BLOOMBERG NEWS

one of the men stabbed the offi- They looked to come in, and sels on the Thames scurrying to could also be laid at her door. stabbed a policeman to death. rity service, has tracked 20,000 leadership were at the forefront
cer, causing serious but not life- for some reason turned to carry the base of London Bridge. Three knife-wielding men In May, 22 people were killed individuals in the past in con- of the campaign, thrust there
threatening wounds, police said. on down the street, Mr. Ap- They saw flashes of gunfire. carried out the deadly rampage and more than 100 injured by a nection with extremism and is by the suicide bombing in Man-
At the south end of the plebee said. According to Londons Metro- in the capital Saturday night, lone suicide bomber at a pop currently managing about 500 chester last month that left 22
bridge, the three men plunged Mr. Applebee and one of his politan police, armed officers plowing a rented white van into concert in Manchester. active investigations, a U.K. se- dead and dozens of others in-
down a steep flight of stairs employees then ran outside and confronted the three men and pedestrians on London Bridge Ariana Grande and other pop curity official said in May. jured. Until then, debate had fo-
into the market and among the lowered the facades metal shot them dead at 10:16 p.m. and then indiscriminately stab- stars performed on Sunday be- Only a small percentage of the cused mostly on Brexit, as well
bing people in a lively area of growing number of known Isla- Black & Blue restaurant as perennial British concerns
pubs and restaurants nearby. In mist extremistsa British intelli- Waiter stabbed such as funding the National
2 Van abandoned near here

Leaders Urge More Web Curbs addition to those killed, dozens

were injured, with 21 of them in
critical condition on Sunday.
One of the victims was iden-
U.K. authorities will
be looking to widen
gence official said they now
number more than 3,000, almost
double a decade agoare tracked
full time, given limited resources.
3 Assailants entered
the market and
Health Service.
Polling shows voters prefer
U.K. Prime Minister Theresa
May and the ruling Conserva-
Prime Minister Theresa May says
Thursdays vote will proceed.

The May 22 bombing in

To Stem Spread of Radicalism tified as 30-year-old Christine
Archibald of British Columbia,
who worked in a homeless shel-
ter in Calgary before moving
LONDONHours after the several months ago to the Neth-
third terrorist attack in the U.K. erlands to be with her fianc,
in three months, British leaders Tyler Ferguson, said his sister,
escalated their criticism of Sili- Cassie Ferguson.
con Valley, calling for interna- Ms. Archibald and Mr. Fergu-
tional regulations to hinder ex-
son were visiting London for
tremists who use cyberspace to the weekend when a van plowed
STEFAN ROUSSEAU/ASSOCIATED PRESS
surveillance efforts as
deadly strikes mount.
fore a sold-out crowd at a Man-
chester concert to benefit the
victims of the May 22 attack af-
ter Ms. Grandes concert at
Manchester Arena.
The latest assault suggests a
In the Westminster and Man-
chester attacks, the suspects
were known to security officials,
but they had appeared to be on
the periphery of investigations.
The authorities will be look-
ing to widen their surveillance
net now that it is clear more of
these individuals have the
wherewithal to mount deadly
strikes on short notice.
El Pastor Borough
attacked several
restaurants
tives over Labour and its
leader, Jeremy Corbyn, when it
comes to leadership and secu-
Manchester at a pop concert
came days after the two main
parties unveiled their election
restaurant Market rity, but that doesnt appear to platforms. Officials halted cam-
Assailant entered have translated into any signifi- paigning while police investi-
cant electoral advantage. gated the killer, 22-year-old
Mrs. May spent six years in Salman Abedi, and whether he
4 The Wheatsheaf pub charge of Britains Home Office, had help.
Applebees Assailants appear to the government department re- John Curtice, a polling ex-
sh restaurant be shot by police The Shard sponsible for counterterrorism. pert at the University of Strath-
Assailants attempted to enter How Saturdays van-and- clyde in Scotland, said he didnt

spread their message and re- into pedestrians on London growing tempo of attacks that The government left the knife attack will alter the race think the attack would have a
cruit supporters. Bridge, Ms. Ferguson said. represents a particular chal- countrys terrorism threat rat- as it heads into its final days big effect.
Police ended the violence by lenge to authorities in Britain ing at severethe fourth rung Sources: Police and witnesses; Google (image) THE WALL STREET JOURNAL before Thursdays vote wasnt Yet Mrs. May faces trouble
By Robert Wall, shooting and killing the assail- and across the West: relatively of fiveimplying investigators yet clear. on other issues. The Conserva-
Sam Schechner ants just eight minutes after unsophisticated plots by small didnt see a threat of an immi- the three assailants in the Bor- arrested, and that she and her Malik Rouf was shopping on a another man, around the same It was the third terrorist as- tives lead over Labour has nar-
and Stu Woo they received the first reports groups or individuals using eas- nent further attack. ough Market area and fired husband lived in a lower-floor busy street in East Ham when he age, with a shaved head and a sault in the U.K. this year and rowed dramatically since cam-
of the bridge incident. ily obtainable materials. They Mrs. May said that since the around 50 rounds to kill them. apartment with two children. saw police descend on the Paddy beard, and dressed in a white the second since campaigning paigning began.
We cannot allow this ideol- Islamic State on Sunday said can be very difficult for the au- Westminster attack, the secu- In Barking, neighbors said Later Sunday, police de- Power sports-betting shop. He robe, dragged out in handcuffs. began. No poll has suggested La-
ogy the safe space it needs to on its official Amaq news thorities to track because the rity services had uncovered five they heard bangs and then saw scended on East Ham, another saw one man, whom he de- President Donald Trump In March, five people were bour will win the election,
breed, British Prime Minister agency that a covert unit had plotters often have few links other credible plots. a phalanx of police vehicles east London neighborhood. One scribed as around 30 years old, spoke to Mrs. May, offering the killed when 52-year-old Khalid though a group of surveys pub-
Theresa May said on Sunday, the Police lead a person, center, away in Barking, east London, on Sunday. carried out the attack. with known suspects. Assistant Commissioner during the raid early Sunday at witness, who works at a chicken wearing a gray vest and blue- full support of the United States Masood drove his car into pe- lished on Saturday, before the
morning after a London attack Police havent released the As the nature of the threat Mark Rowley, the U.K.s top an apartment complex. They shop, said she saw a half-dozen jeans, trying to escape through a government in investigating and destrians on Westminster London Bridge attack, showed a
killed at least seven people and and how muchto curb the Unions executive arm cheered identities of the three men. At we face becomes more complex, counterterrorism police officer, said it appeared a woman who people being arrested, including window above the shop. bringing those responsible for Bridge in London before stab- wide variation in the extent of
injured scores more. Yet that is spread of undesirable content, such efforts, saying each of the least one of the men was born more fragmented, more hidden, said eight officers confronted wore a niqab was among those some who were customers. Shortly after, he said he saw these heinous acts to justice. bing a policeman at Parliament. the Conservative lead.
precisely what the internet and from pirated music in the 2000s companies had boosted removal
the big companies that provide to false news reports in recent of illegal content, including ter-
internet-based services provide.
Mrs. May said Britain must
work with other democracies to
reach international agreements
months. Governments ramped up
pressure on them to crack down
on online terrorist propaganda in
the wake of terrorist attacks in
rorist propaganda, 59% of the
time when it was flagged for
review, up from a rate of 28%
six months ago.
LONDON people is a struggle even for the
U.K., which has one of the most
sophisticated intelligence agen-
cies in the world. Intelligence
relevant to thwart self-starting
individuals or small groups car-
rying out less sophisticated op-
erations with everyday materials
in the Middle East and are
harder for the security services
to flag, even if they are aware of
their existence.
their surveillance netand how
to reduce the numbers of people
at risk of carrying out attacks.
Mrs. May said the solution re-
would examine whether police
and intelligence agencies had
sufficient powers to deal with
the threat and whether prison
teachers and pupils. The pro-
gram legally requires teachers,
health-care workers and other
government employees to iden-
Trump Scorns London Mayor
BY PETER NICHOLAS In a tweet on Sunday, Mr.
to regulate cyberspace to prevent Europe and the U.S. in 2015. Tech firms have also funded Continued from Page One agents and police have disrupted such as vehicles and knives. Among the questions counter- quires more than strengthening sentences should be extended tify people they believe are vul- Trump focused on a portion of
terrorism planning. Her state- Many tech companies say efforts to buy ads that target The number of people who five credible plots since the Such people dont need to terrorism chiefs will be asking the capabilities of intelligence for apparently less serious ter- nerable to radicalization so President Donald Trump the mayors response.
ment ratcheted up already criti- they already work hard to po- potential radical recruits, di- are featuring on the fringes is Westminster attack in March, communicate with coordinators therefore will be how to widen agencies. She said a review rorism offenses. The U.K. must counselors can intervene. suggested Sunday that the At least 7 dead and 48
cal remarks her cabinet members lice their platforms for terrorist recting them to content that only going to be bigger, Mr. Mrs. May said. also become better at identify- Alan Mendoza, executive di- mayor of London was playing wounded in terror attack and
made in the wake of a March at- content, and cooperate with ju- shows horrors of life under Is- Pantucci said. Clearly, resources There is some evidence that ing and stamping out extremist rector of the Henry Jackson So- down the threat of terror, trig- Mayor of London says there is
tack, also in London, that killed dicial and police investigations. lamic State, or other messages are getting stretched. He said terrorists have regarded the U.K. Three U.K. Attacks Masood at the scene. The attack He likely had the help of a terror Islamist ideology across society, ciety, a think tank focused on gering rebukes from the office no reason to be alarmed! Mr.
five people near Parliament. Sat- When it comes to propaganda, from the Muslim community policy makers must rethink what as a harder target than continen- claims the lives of five victims. network, officials said. she said. countering terrorism, said the of Mayor Sadiq Khan and oth- Trump wrote.
urdays London attack came 12 Alphabet Inc.s YouTube, Face- disputing the terrorist exhorta- they do with extremists. Should tal European countries. In Three-Month Span Islamic State claims responsibil- Some analysts said the gov- public sector in Britain needs to ers who said the comment was A representative for Mr.
days after a suicide bomber book, Twitter and Microsoft tions from Islamic radicals. those convicted of lesser terror- Unlike most other members of ity for the attack, but police find June 3 Three men plow a ernment should invest more into proactively embrace Prevent and mistaken and ill-timed follow- Khans office, asked for a re-
killed 22 people outside a con- Corp. all agreed last year to A spokesman for Alphabet ism-related offenses be kept in the European Union, which dont no evidence linking Masood to van into pedestrians on London Prevent, its flagship program stop allowing others to under- ing a deadly attack in the city. sponse to Mr. Trumps message,
cert in Manchester, England. create a common database of Inc.s Google said: Our jail for longer? What quantity of usually check people moving March 22, 2017 Khalid Islamic State or al Qaeda. Bridge, then run to a nearby aimed at combating extremism. mine it. Mr. Khan said, Londoners said it took the mayors words
In lambasting internet giants identifiers of terrorist images thoughts are with the victims resources should be dedicated to from one country to another, the Masood, a 52-year-old British open-air market where they stab After the Manchester attack, the All communities and sections will see an increased police deliberately out of context.
such as Facebook Inc. and Twit- to speed up flagging and re- of this shocking attack, and focusing on them? U.K. also maintains border man, mows down pedestrians on May 22 A suicide bomber multiple people with knives. Offi- government said it would go of British society will need to presence today and over the Julian King, who is the U.K.s
ter Inc., the U.K. government moval of propaganda videos. with the families of those Britains domestic intelligence checks. Together with strict gun the crowded Westminster Bridge kills 22 people in a terror attack cers confront the three in the ahead with plans to double down play their part in challenging ex- course of the next few days. European Union commissioner,
joined Washington and other Twitter said it suspended caught up in it. We are commit- agency, MI5, has monitored controls, that makes it harder for in central London before crashing at an Ariana Grande concert in market and shoot and kill them. on Prevent, which has faced crit- tremism, and speaking out That, he said, is no reason to responsible for security mat-
capitals that have said they dont 376,890 accounts in the second ted to working in partnership 20,000 extremists in the past, a terrorists to buy undetected the his car near the gates of Parlia- Manchester. Police identify the Seven people are killed and doz- icism from Muslim and human- against those engaged in the be alarmed, adding that one of ters, tweeted: Theres every
do enough to battle extremists. half of 2017 for promoting ter- with the government and NGOs security official said after the kind of weaponry used in the ment and stabbing a policeman man suspected of carrying out ens injured. Islamic State claims rights groups for alienating bad-faith campaign to under- the things the police and all of reason to stand together in de-
Technology giants have strug- rorism. to tackle these challenging and Manchester attack last month. November 2015 Paris attacks. to death. Police shoot and kill the attack as Salman Abedi, 22. responsibility. Muslims and from teachers for mine counter-extremism ef- us need to do is make sure were fense of our valuesyou dont
gled for two decades over how Last week, the European complex problems. Keeping tabs on this many But these advantages are less inhibiting a dialogue between forts, he said. as safe as we possibly can be. do that by spreading alarm.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12 | Monday, June 5, 2017
Ailing President Leaves Nigeria in Limbo BY ALEXANDRA WEXLER
ABUJA, NigeriaAfricas
largest economy is facing a
potential political crisis, fueled
by its presidents worsening
health and a religious divide
EUROPEAN PRESSPHOTO AGENCY
that threatens his deputys re-
cent turnaround of Nigerias
fortunes.
Unofficially, Nigerias presi-
dency is supposed to alternate
between the Muslim-majority
north and the Christian south
to keep both populations ap-
President Muhammadu Buhari peased, analysts and political
has been treated in London. commentators say. The south
STOCK son to do it, he said.
As Tuesday rolled on, a
crowd of anti-Seaboard players
entered the fray, voting to sell
Continued from Page One down the stock. These more-
If the account fell below thoughtful players discussed
$25,000, the minimum a day- other stocks and began mapping
trader needs to continue trading out strategies for diversification.
under regulatory guidelines, hed Mr. Roberts finished Tues-
have to call it quits. day feeling optimistic, though
Such is life behind the scenes the excitement left him with a
of what appears to be the bit of difficulty sleeping.
worlds first virtual stock-mar- And some nausea.
ket videogame that puts actual It was still dark outside on
money on the line. Mr. Roberts Wednesday when Mr. Roberts
calls his game StockStream and jumped out of bed, took a
broadcasts it on Twitch, an Am- shower, gobbled down some
azon-owned website best known granola bars and a Red Bull, and
for operating a crowd-controlled sat down at his computer to
game of Pokmon. He trades the watch day two of his experiment
money through Robinhood, an unfold. The buying and selling
online brokerage platform. happened automatically as the
In its first week of operation, sun rose over Elliott Bay and a
the live feed on Twitch had cruise ship passed by out the
more than 400,000 visits. window of his condominium.
I wanted to have something Mr. Roberts was on vacation
where people can influence the from his Amazon job because
real-life outcome, Mr. Roberts his parents were due to visit,
said. I know the stock market is but so far hed spent his down-
sort of virtual as well, but it has time watching the action in his
real-life consequences. brokerage account on his com-
For years, people have used puter and a 65-inch television
online tools to simulate stock hooked up to it. He had to de-
portfolios. But none seem to commission his Roomba vacuum
have backed up their bets with cleaner because he was afraid it
hard currency. Mr. Roberts said would hit the computer and
once he got the idea, he became knock out the whole operation.
engrossed in tweaking the user With its pixelated screen,
experience and running simula- StockStream is reminiscent of
tions. The decision to use his the earliest days of videogames.
own money was secondary. I The scrolling feed of user stocks
just wanted to be the first per- picks, interspersed with emojis
WORLD NEWS
is home to the countrys oil
and its economic capital, La-
gos, while the north has his-
torically felt it needs to be the
seat of government to main-
tain balance of power.
During the period of mili-
tary rule, the north monopo-
lized power, said Jideofor
Adibe, an associate professor
of political science at Nasarawa
State University in Keffi, Nige-
ria. That created a lot of ani-
mosity in the south. Still, Mr.
Adibe added that the north
feels as though they are left
with nothing if the south has
FROM PAGE ONE
An image from StockStream, the game Mr. Roberts built to allow strangers to manage his portfolio.
and typo-heavy comments, was
getting so many entries that the
feed often flowed too quickly for
viewers to keep up. The number
of concurrent viewers watching
his account on Wednesday af-
ternoon was more than 3,000.
Mr. Roberts had to pick his
parents up at the airport that
day. It was their first visit to Se-
attle. His phone was buzzing as
he drove back. He had some
news for them: He was kind of
famous on the internet.
They had a hard time com-
prehending what was going on,
he said, though they later came
by his condo to see how the op-
eration worked. His mom got a
the presidency. You get this
competitive anger, he said.
President Muhammadu Bu-
hari has spent 70 days and
counting in London this year,
undergoing unspecified medical
treatment. When he first left in
January for what was billed as
a 10-day vacation, Nigeria was
in the throes of its worst reces-
sion in three decades amid a
dollar shortage that was driv-
ing away investment and a re-
vived insurgency in the oil-rich
Niger Delta region.
Before he left on May 7 for
his second visit to the British
good laugh. His dad enjoyed
keeping up with what users
were buying and selling.
In less than a week, a com-
munity of amateur stock pickers
materialized around Mr. Rob-
ertss game to battle over
whether to buy or sell Tesla Inc.,
and to weigh in on which semi-
conductor stocks are hottest.
Their deliberations mirrored the
actual market in many ways
veering between fear and greed,
caution and euphoria.
Just before noon on a recent
morning, after the account had
suffered some losses along with
the broader market, it managed
to claw back to a profit of more
* * THE WALL STREET JOURNAL.
capital this year, 74-year-old Mr.
Buhari missed cabinet meetings
and looked gaunt in public.
Ahead of each departure,
Mr. Buhari signed over power
to Vice President Oluyemi
Osinbajo. While in charge, Mr.
Osinbajo, a lawyer and a pas-
tor, has ushered in a new for-
eign-exchange policy designed
to infuse dollar liquidity into
the market and sealed a cease-
fire with militants in the Niger
Delta. That has stabilized the
oil-producing region, which
accounts for about 95% of the
countrys export revenue.
STOCKSTREAM/TWITCH
than $100. Were up boys, said
a message-board post from a
user named Ahhhmong.
As the game went on, the us-
ers started to get more sophisti-
cated. Netflix Inc., Tesla, Ad-
vanced Micro Devices Inc. and
other momentum-driven stocks
proved popular on day two. On
day three, some blue chips like
Boeing Co. were in the mix.
With about half the $50,000
still uninvested at the end of the
second day, user Phreadj chimed
in, echoing the age-old conun-
drum of how much money to
keep on the sidelines: we wont
make money if we have all this
cash. Others sung the praises of
The countrys foreign-cur-
rency crisis has also abated.
Under Nigerias constitu-
tion, if Mr. Buhari dies or
steps down, Mr. Osinbajo, 60,
will assume office. Although
many analysts agree that Mr.
Osinbajo has performed im-
pressively, they fear that his
religion and originhe is a
Christian from southern Nige-
ria, while Mr. Buhari is Muslim
and hails from the north
could spur political infighting
and put the continued recov-
ery of Africas leading oil pro-
ducer in jeopardy.
diversification. Buy blackrock,
we need financial stocks too,
robaphone20 posted. One user
wrote Thursday that the port-
folio it is unbalanced, citing the
large amount of U.S.-focused
companies and tech stocks.
One hot stock not being
bought and sold: Amazon. Re-
strictions on trading shares of
the company where he works
pushed Mr. Roberts to write lan-
guage into StockStreams code
so it wouldnt recognize the
stock. This means StockStream
cant participate in whats been
a torrid year for Amazon stock,
which is up more than 30% and
closed above $1,000 a share for
the first time on Friday.
Mr. Roberts got particularly
excited about the project around
the turn of the year when he got
a new computer capable of han-
dling the operation. He funded
the account with sales of bitcoin
and vested shares of Amazon he
had received as compensation.
The account added more than
$700 in value in its first week.
For now, Mr. Roberts plans to
pocket any proceeds from the
project but will re-evaluate that
plan if it becomes more profit-
able. Before launching Stock-
Stream, he ran extensive simula-
tions that suggested the game
could last six months or more
on its own.
He did have one obstacle
coming up, though: He had to go
back to work on Monday.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
GREATER NEW YORK
SPENCER PLATT/GETTY IMAGES
Vehicles and pedestrians compete for space in Midtown. An advocacy group argues the city doesnt need state approval to charge drivers.
New Twist on a Congestion Charge
BY PAUL BERGER
New York City could impose
a congestion charge on motor-
ists driving into Manhattans
busiest streetsand could do it
with or without state approval,
an advocacy group says.
Move NY, which is making
the argument, will outline a
new toll proposal to the City
Councils transportation com-
mittee Monday.
Under the groups plan, the
city would impose a $2.75 fee
on cars entering Manhattans
central business district south
of 60th Street. Trucks would
pay a higher fee, while taxis
and other for-hire vehicles
would pay a congestion sur-
charge based on travel within
the zone.
Recent congestion-charge
proposals faltered in the state
Legislature. But Move NY says
the city doesnt need state ap-
proval to charge drivers. It
cites a 1957 state law giving
cities with a population of
more than one million people
Policeman
In Critical
Condition
BY CORINNE RAMEY
A New York Police Depart-
ment officer was in critical
condition Sunday after being
dragged down a Brooklyn
street by people driving a
stolen sedan.
Mayor Bill de Blasio said
Officer Dalsh Veve, 35 years
old, had surgery Sunday
morning and was fighting
for his life.
Three suspects were in
custody, including a 15-year-
old, police said.
The events that led to the
incident began around 11:50
p.m. Saturday, when police
responded to three 911 calls
of shots fired in Brooklyns
East Flatbush neighborhood,
Commissioner James ONeill
said Sunday.
Six plainclothes officers
responded and found the 911
calls were in response to fire-
works, he said.
Officer Veve spoke to sev-
eral people inside a black
Honda sedan, Mr. ONeill said.
Other officers then saw him
being dragged by the vehicle
for 21/2 blocks.
It appears that Police Of-
ficer Veve was able to dis-
charge his service weapon
twice while being dragged,
the commissioner said.
Officer Veve became free
and fell on the street, police
said. The car crashed a short
distance later, according to
police.
Soon after the incident a
15-year-old walked into
Brooklyns Brookdale Hospital
with a gunshot wound, Mr.
ONeill said.
The 15-year-old had been
in the Honda, which was sto-
len on Long Island, police
said.
Officer Veve has worked
for the NYPD for nine years,
and is married with a 2-year-
old daughter, police said.
* * * *
the power to toll their own
roads and bridges.
Scott Gastel, spokesman for
the citys Transportation De-
partment, said the city would
analyze the legal theory. The
legal experts in both the cur-
rent and previous administra-
tions determined the city does
not have this authority, he
said.
Move NYs legal opinion
was rendered by Roderick
Hills, a professor at New York
University School of Law. It
was signed by four specialists
from law schools at NYU, Co-
lumbia University and Ford-
ham University, as well as by
Frederick Schwarz Jr., a for-
mer corporation counsel for
New York City now at the
Brennan Center for Justice.
Mr. Hills said the law giving
the city the power to raise
tolls is straightforward. The
politics of raising tolls is more
complex. Unless youve got
the guts and the coalition, you
cant use it, he said.
Congestion plans tradition-
March for Israel Brings Out Thousands
BANNER DAY: Students from the Moriah School in New Jersey were among the groups that marched
along Fifth Avenue in Manhattan on Sunday during the 53rd annual Celebrate Israel Parade.
Cabaret Discovers the Right Mix and the Path to Profits
BY CHARLES PASSY
By virtue of its intimate na-
ture, cabaret isnt the most
profitable of show-business en-
terprises. That is, the clubs
generally are too small to gen-
erate significant revenue. And
even then, they are challenged
to find an audience, because
many potential patrons opt for
glitzier forms of live entertain-
ment, such as rock concerts or
Broadway musicals.
But as it prepares to cele-
brate its fifth anniversary on
Monday with a program featur-
ing several stars from the caba-
ret world, Feinsteins/54 Be-
lowsituated under a kel, whose business partners
Broadway theater that formerly
housed the famed Studio 54
discoappears to be an excep-
tion to the rule.
The 147-seat club, which typ-
ically hosts two or three shows
a night, welcomed about 73,000
guests in 2016, more than twice
the number it did in 2013, its
first full year, according to a
NY
ally face opposition from mo-
torists in New York Citys sub-
urbs and outer boroughs.
Although the City Council has
endorsed congestion pricing in
the past, it is unclear whether
councilors would do so now.
Alex Matthiessen, campaign
director for Move NY, said the
city could raise about $1 bil-
lion a year through the plan,
$2.75
Fee that Move NY would put on
cars entering part of Manhattan
which could pay for improve-
ments to roads and bridges, as
well as subsidize MetroCards
for low-income households
and improve bus service.
Congestion pricing is a pe-
rennial issue in the city. While
drivers pay tolls of up to $17
per round-trip at bridges and
Feinsteins/54 Below spokes-
man.
Revenue is up as well. Last
year, the club grossed about $8
million, a 15% increase over
2015, says Richard Frankel, a
veteran Broadway producer,
who is one of Feinsteins/54 Be-
lows owners and founders.
Of course, the club, an un-
derground space that resem-
bles a speakeasy from yester-
year, has more than its share of
expenses. Still, after an initial
period of losing money, it finds
itself in a relatively comfortable
place. Were managing at the
moment to be stable to mod-
estly profitable, said Mr. Fran-
include fellow Broadway pro-
ducers Steve Baruch, Marc
Routh and Tom Viertel.
By most accounts, Fein-
steins/54 Below owes its suc-
cess to a diverse mix of pro-
gramming that attracts all
kinds of audiences. As might be
expected, the club puts a heavy
emphasis on major names from
Monday, June 5, 2017 | A12A
Cuomo Makes
The Task Force
His Go-To Move
BY MIKE VILENSKY
Hate crimes, heroin and
power plants pose disparate
problems, but New York Gov.
Andrew Cuomo has responded
with the same idea: Start a
task force.
Mr. Cuomo, a Democrat, has
increasingly relied on panels
of mostly allies and appoin-
tees to navigate some of New
Yorks dilemmas and contro-
versies.
The governors office and
some past panelists say the
tactic allows Mr. Cuomo to
delegate tricky issues to out-
side experts who can reach
nonpartisan recommenda-
tions. And they point to panel
ideas that became laws to in-
dicate the panels were suc-
cessful.
But Cuomo critics and other
past panelists say it can be a
way for Mr. Cuomo to avoid
tunnels owned by state and bi- taking firm stances, reward al-
state agencies, they cross city- lies with policy-making roles,
owned bridges such as the and still maintain control over
Brooklyn Bridge and the Man- an issue.
hattan Bridge at no charge. It isnt unusual for politi-
The uneven setup attracts cians to create task forces or
cars and trucks to certain commissions to solve prob-
parts of the city, exacerbating lems, but aides to past gover-
congestion. nors said Mr. Cuomo employs
A proposal a decade ago by them more frequently.
then New York City Mayor Mi- We tried to limit their use
chael Bloomberg, modeled on to complex issues that really
congestion pricing in London, required outside expertise,
died in the state Assembly. That said David Catalfamo, who
plan would have imposed an $8 served as an aide to former
fee on drivers entering Manhat- Republican Gov. George Pataki.
tan below 60th Street on week- But I dont think it is inher-
days from 6 a.m. to 6 p.m. ently bad to have more of
More recently, Move NY ad- them. Governance has gotten
vocated a plan that would more complicated.
have introduced more-modest Critics said past task forces
tolls on city bridges, while re- havent had many tangible ef-
ducing tolls on outer bridges. fects.
Mr. Matthiessen said that plan There should be a full pub-
foundered in the state Legisla- lic accounting of what task
ture last year because of a lack forces have been created, what
of support from Gov. Andrew measures have been imple-
Cuomo. mented, and whether or not
A spokeswoman for the the approach has been effec-
governor didnt respond to a tive, said Assembly Minority ing new procurement methods
request for comment. Leader Brian Kolb, an upstate
Republican. The governor has
formed task forces on every-
thing from bee pollination to
plastic bagsand it is difficult
to see how they have served
any useful purpose.
Mr. Kolb pointed to the
Business Regulation Council.
That panel made public rec-
ommendations to Mr. Cuomo
last year to make New York
more business-friendly, but
most of them werent acted
on, though some have moved
forward.
Mr. Cuomos office said the
task forces are effective.
The governor believes in
convening industry experts and
stakeholders to collectively ex-
amine problems, develop best
CRAIG RUTTLE/ASSOCIATED PRESS
practices and identify solu-
tions, spokeswoman Abbey
Fashouer said. From rooting
out worker exploitation and re-
forming our criminal justice
system to redesigning Medic-
aid and strengthening our
business climate, these efforts
are producing real, tangible re-
sults to the benefit of all New
Yorkers.
Recommendations from
the Broadway and cabaret
scenes, topped by its namesake,
Michael Feinstein.
Recent headliners have in-
cluded Tony Award-winners
Lea Salonga, the star of the
original Broadway production
of Miss Saigon, and John
Lloyd Young, who portrayed
Frankie Valli in Jersey Boys.
Just as important, the club
presents a variety of other
Broadway-related programs,
from presentations of musicals
from the past, to first looks at
shows in development.
Even with its relatively small
stage, Feinsteins/54 Below was
designed with such flexibility in
mind. It can be a classic night-
club or it can be a small the-
ater, said Mr. Feinstein. He
isnt one of the clubs owners.
Not that Feinsteins/54 Be-
low doesnt have competition in
the cabaret world. The city has
its share of long-established
clubs, such as the Public The-
aters Joe Pub, which will mark
its 20th anniversary in 2018. Customers settle in for the early show at Feinsteins/54 Below.
past panels have become pol-
icy, though some of them al-
ready had public support.
The governors 2014 Com-
mission on Youth, Public
Safety & Justice issued a re-
port that formed the basis for
legislation passed this year
keeping minors out of adult
prisons and courts for nonvio-
lent crimes.
The governors most recent
commission, a 14-person
group tasked with fixing prob-
lems at Penn Station, was im-
paneled in late May.
Transit advocates pointed
out Mr. Cuomo already ap-
pointed a panel three years
ago to suggest overhauls to
the citys transit systems, the
Transportation Reinvention
Committee.
The committees report was
released in November 2014.
I dont know whats hap-
pened to it since, said Gene
Russianoff, a public-transit ad-
vocate who served on that
panel. He said implementing
those recommendations may
have prevented some of the
citys current transit woes.
Targeting Problems
Some of the panels that Gov.
Andrew Cuomo has formed
 Hate Crimes, 2017
 Heroin and Opioids, 2016
 Common Core, 2015
 AIDS Epidemic, 2014
 Anti-Hunger, 2013
The MTA has and contin-
ues to implement the recom-
mendations of the reinvention
commission, including launch-
ing a global competition seek-
and technologywhich is ex-
actly what the governor and
the MTA announced last
week, Mr. Cuomos spokes-
woman said.
Recent task forces the gov-
ernor impaneled were the
Hate Crimes Task Force in
January, charged with deter-
ring discrimination, accord-
ing to the governors office. In
February, he launched one to
assist the local community
with the closure of the Indian
Point Power Plant.
In February, he impaneled a
group to examine the impact
of plastic bags, amid a battle
raging in New York City over
adding a fee to plastic bag use.
Manhattan Assembly-
woman Linda Rosenthal, a
Democrat appointed to an opi-
oid task force last year, said
the panel she sat on helped
pass legislation she had previ-
ously introduced, requiring
more training for doctors pre-
scribing opioids.
The task force helped push
that existing legislation past
opposition in the medical
community, Ms. Rosenthal
said.
KEVIN HAGEN FOR THE WALL STREET JOURNAL
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12B | Monday, June 5, 2017 NY * * THE WALL STREET JOURNAL.

GREATER NEW YORK

PROPERTY WATCH
NEW JERSEY
Revamped Complex
Is Sold to Barclays
A joint venture that trans-
formed a bland New Jersey of-
fice campus in Whippany into a
modern complex with an ame-
nity building, a bike-share service
and walking trails has sold the
property to Barclays PLC.
The venture of Rubenstein
Partners LP and Vision Real
Estate Partners closed the $69
million sale to banking giant
Barclays, a tenant at the cam-
pus, at the end of May. Ruben-
PETER FOLEY FOR THE WALL STREET
The group led by Morton
F. Silver obtained the 10-year,
fixed-rate loan from Barclays
PLC, enabling the partnership of
owners to repay the previous
$217 million debt early and take
advantage of an attractive inter-
est rate, Mr. Silver said.
The loan also would allow them
to recoup the $135 million spent
on a significant makeover of the
early 20th Century office buildings
at 225-233 Park Ave. South.
BROOKLYN
McCourt Global Puts
Money Into Modular

stein and Vision bought the

500,000 square-foot property
at 115 South Jefferson Rd. for
$25 million in 2012, said Ste-
phen Card, a principal at
Rubenstein.
The company intends to rede-
velop the site in the coming
years to create a world-class
An Uber subsidy for tenants enabled Elements Truffles to add three employees to its Kearny Point staff, says owner Alak Vasa. campus for our technology, oper-
ations and functional teams in
One of the citys most promi-
nent investors is betting on
modular construction.
McCourt Global, the asset-
management firm and business
arm of the family-owned enter-
prise led by former Los Angeles
Dodgers owner Frank H. Mc-
Court Jr., headed up a group of
investors in a $6 million Series

New Jersey Tenant Perks Get a Lift

BY KEIKO MORRIS
New Jersey office landlords
have been sprucing up their
properties with everything
from food trucks to fitness
centers to compete in an era
when urban
PROPERTY amenities are
in vogue.
The latest
enticement: subsidies for digi-
tal ride-hailing services such
as Uber and Lyft.
Hugo Neu Corp. in March
launched a program offering
$50 monthly credits for each
tenant employee without a car
to commute to Kearny Point.
The real-estate investment
firm Marcus Partners, mean-
while, is offering new tenants
a ride-sharing program that
pays the first $3 of a trip to or
from its newly acquired office
building just outside Morris-
towns center in New Jersey.
Morristown is a wonderful
town not only because you
Fiore, a principal at Marcus
Partners and head of the com-
panys New York metro region.
We thought the flexibility of a
ride-sharing program allows
tenants and employees a strong
connection to downtown.
While residential landlords
nationwide have been testing
similar programs, such incen-
tives from office owners are
relatively rare. Services such
as Uber and Lyft could help
New Jersey office landlords,
especially those who are a
short drive to public transpor-
tation and downtowns, real-
estate brokers said.
Subsidizing ride-hailing
services also could help land-
lords attract tenants looking
to pack more people into less
office space, particularly in ar-
eas where parking is tight,
brokers said. The trend is
companies putting more peo-
ple in less space for efficiency
and cost effectiveness, said
David Simson, a vice chairman
built with three to four park-
ing spaces per 1,000 square
feet of office space, but mod-
ern office spaces require up-
ward of five spots per 1,000
square feet, according to a
Newmark report. Adding park-
ing decks can cost between
$20,000 and $35,000 per
space, the report said.
Some landlords are
offering subsidies for
ride-hailing services
such as Uber and Lyft.
Parking constraints for train
commuters prompted Summit
city officials last fall to launch
a pilot program subsidizing city
residents rides to and from the
train station. The participants
pay $4 a day round trip and the
city subsidizes the rest.
the U.S., a Barclays spokesman A round of funding for Brooklyn
said in an email. company FullStack Modular LLC.
The financing will help Full-
MIDTOWN SOUTH Stack ramp up its production ca-
to 35 parking spaces a day, pabilities at its 100,000-square-
said Michael Rogers, Summits Refinancing in Place foot design and construction
city administrator. The city For Linked Buildings facility in the Brooklyn Navy
has increased the number of Yard.
participants in its program The owners of two con- The investment also will en-
from 100 to 150 people. nected Midtown South buildings able the company to explore the
Adequate parking, however, have secured $430 million to possibility of expanding interna-
hasnt been the issue for the refinance the newly renovated tionally and on the West Coast,
property at Kearny Points property, which houses compa- said FullStack Chief Executive
Building 78, which houses many nies such as Facebook Inc. and and founder Roger Krulak.
small businesses. Hugo Neu, BuzzFeed. Keiko Morris
which owns and develops real
estate, added the Uber credits
to provide another transporta-
tion option and has found that
its co-working tenants, many of
whom dont have cars, have
been using about half of the
credits, said Nick Shears, direc-
tor of leasing at Hugo Neu.
The Uber subsidy is what al-
lowed Alak Vasa, founder of
chocolate maker Elements Truf-
fles, to add three people to her
team at Kearny Point and keep
a critical employee who had
been with the company in its
first space in Jersey City. We
have people who live in Jersey

have a train station but also
because you have restaurants
and nightlife, said David P.
11 West 53 Street, Manhattan
NEOSCAPE
at real-estate services firm So far the program, a possi- City who we have already in-
Newmark Grubb Knight Frank. ble alternative to expensive vested in, Ms. Vasa said. How
Older office buildings were new parking, has freed up 30 do we get them here? A rendering of 225-233 Park Ave. South, which underwent a makeover.

Now on View

Robert Rauschenberg
Among Friends

Bank of America is the Global Sponsor
of Robert Rauschenberg.
The exhibition is supported at Tate Modern
and The Museum of Modern Art by the Terra
Foundation for American Art.
Major support for the New York presentation is provided
by Glenn and Eva Dubin, The Dana Foundation, Donald
B. Marron, the Lenore S. and Bernard A. Greenberg Fund,
Monique M. Schoen Warshaw, Mrs. Ronnie F. Heyman,
Helen and Charles Schwab, Sue and Edgar Wachenheim
III, Sue and Edgar Wachenheim III in honor of Jerry I.
Speyer, and by Tiffany & Co.
Generous funding is provided by west elm.
This exhibition is supported by an indemnity from
the Federal Council on the Arts and the Humanities.
Additional support is provided by the Annual
Exhibition Fund.
MoMA Audio+ is supported by Bloomberg
Philanthropies.
Robert Rauschenberg. Signs. 1970. Screen print.
Publisher: Castelli Graphics, New York. The
Museum of Modern Art, New York. Gift of Leo and
Jean-Christophe Castelli in memory of Toiny
Castelli. 2017 Robert Rauschenberg Foundation
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, June 5, 2017 | A13

LIFE&ARTS
HEALTH

Making a Tough Medical Call

Cancer-fighting treatments that can damage the heart put some patients into an agonizing quandary
Jennine Elkins, at her home in Staten
Island, N.Y., stopped a treatment to
keep her breast cancer from
returning because doctors thought
the drug was damaging her heart.

with radiation to the chest area.

Oddly, it was a surfeit of good
newsmore cancer patients beat-
ing the diseasethat brought the
problem of cardio-toxicity to the
fore, says Saro Armenian, a pediat-
ric oncologist at City of Hope, a
comprehensive cancer center in
Duarte, Calif.
In some cases, such as with Ms.
Elkins, the dangerous effects are
spotted quickly. But they can take
decades to surface, as seen in sur-
vivors of some childhood cancers.
Pediatric oncologists began sound-
ing the alarm 20 years ago, says
Dr. Armenian, director of the
Childhood Cancer Survivorship
program, when they saw heart
problems among patients who had
beaten cancer as children.
Our cancer outcomes are im-
proving. People are living longer,
Dr. Armenian says. But we have
to recognize there are new issues
after the cancer treatment, and
NICOLE CRAINE FOR THE WALL STREET JOURNAL

that the risk is much greater than

BY LUCETTE LAGNADO
AFTER FIGHTING breast cancer
with lots of chemotherapy and
surgery, Jennine Elkins rejoiced
last month, believing she was
through the worst.
Then the 38-year-old math
teacher from Staten Island, N.Y.,
got some bad news. Her heart was
getting weakerand doctors felt it
was due to Herceptin, a potentially
life-saving drug she was on to pre-
vent the cancer from returning.
The hospital stopped the drug.
Now Ms. Elkins is waiting to see
if her heart will get better so she
can resume Herceptin, which is
given intravenously and can stave
off even some aggressive breast
cancers. It could damage her heart
all over again, so Ms. Elkins must
decide if she wants to take that
risk. Fighting cancer or heart fail-
ure is like a coin toss, she says.
Which one do you choose?
Thousands of cancer patients
are confronting similar dilemmas
because their treatment may also
cause heart problems, either im-
mediately or down the road.
Women like Ms. Elkins face a
tough choice: Stay on a miracle
drug that might damage their
heart or stop the drug and risk
having the cancer spread.
It is a balancing act, says Rich-
ard Steingart, chief of cardiology at
Memorial Sloan Kettering Cancer
in the general population.
Dr. Armenian led a team of ex-
perts to draft guidelines for the
American Society of Clinical On-
cology that would raise awareness
of the cardiac risks that cancer pa-
tients face. The guidelines were
published in March in the Journal
of Clinical Oncology.
Clinical suspicion for cardiac
disease should be high and thresh-
old for cardiac evaluation should
be low in any survivor who has re-
Hopeful Signs ceived potentially cardiotoxic ther-
Cancer death rates declined overall by 25% in the past two and a half decades, but barely budged for some types. apy, the guidelines state. They call
for monitoring and testing patients
Lung and bronchus Breast Colorectum Ovary Uterus Stomach Prostate
deemed at risk of heart problems
Cancer death rates per 100,000 women Cancer death rates per 100,000 men because of cancer treatments re-
ceived recently or long ago.
90 90 Rae Harris, a nurse in Santa
80 80
Barbara, Calif., developed Hodg-
kins lymphoma, a cancer of the
70 A decline in smoking likely 70 lymph-node system, in the late
helped curb lung-cancer fatalities. 70s when she was 26. She was
60 60 treated aggressively with radiation
and had more radiation along with
50 50
chemotherapy after she relapsed.
40 40 Now 65, Ms. Harris felt that All
in all, I survived very, very well.
30 30 But a few months ago, doctors
found signs of a heart murmur that
20 20
had gotten worse. Tests showed
10 10 problems with two heart valves. To
fix them, Ms. Harris is supposed to
0 0 have surgery in a few weeks.
1930 40 50 60 70 80 90 2000 10 1930 40 50 60 70 80 90 2000 10 Decades ago, doctors pointed
out that radiation could cause seri-
Note: Age adjusted to the 2000 U.S. standard population.
Sources: National Center for Health Statistics, Centers for Disease Control and Prevention, American Cancer Society THE WALL STREET JOURNAL. ous side effects, including other
forms of cancer, but Ms. Harris
doesnt recall warnings about
Center, who is monitoring Ms. El- women who have been treated with with Herceptin, 72% of women with heart problems. I didnt see it
kinss heart while cancer specialists it in addition to chemotherapy. Car- a certain type of early-stage breast coming, she said.
follow her cancer. Heand Ms. El- diac risks are included in the pre- cancer enjoy disease-free survival Her cardiologist, Megha Agar-
kinshope she can resume taking scribing information, the company for 10 years. It is a remarkably ef- wal, at UCLA Health Specialty
Herceptin and be watched closely said, and physicians are familiar fective drug, he says, despite the Practice in Ventura, Calif., says Ms.
to avoid heart failure. with this risk. cardiac-toxicity, which he believes Harriss heart problems are the re-
Genentech, the maker of Hercep- Herceptin often is used against is manageable. sult of the radiation she received
tin, said the drug has become the breast cancer in tandem with or af- Men and women on some kid- nearly 40 years ago. That radiation
standard of care for certain aggres- ter other therapies. Among women ney-cancer and lung-cancer drugs caused scar tissue to form over
sive breast cancers that once had a treated with Herceptin, 10% to 15% also have experienced hyperten- the heart valves, making them
very poor prognosis, and it has im- develop heart problems, Dr. Stein- sion and other cardiovascular rigid and no longer functioning ad-
proved survival rates among many gart says. But he points out that problems, as have patients treated Please see CANCER page A15

FOOD & DRINK

OFFICE BARISTAS
TAKE YOUR ORDER
BY ALINA DIZIK
FORGET THE SLUDGE in the break
room. The latest corporate perk is a
barista who knows how to pour.
Companies are opening on-
premise coffee shops that wouldnt
look out of place on Instagram.
There is cold brew on tap and ex-
pertly pulled espresso shots keep
TAYLOR GLASCOCK FOR THE WALL STREET JOURNAL
sphere, keep long days more entic-
ing and encourage employees to
stay at their desks. Now the idea is
reaching the mainstream, including
at manufacturers and real-estate
investment firms, as they look for
ways to revamp more traditional
offices and recruit young talent.
Employees typically pay for the
coffee drinks, but prices are passed
on to employees without a markup.

employees from stepping out. Costs can be as much as 50 % less

It is an uphill battle. Daily cof-
fee drinkers spend more than 62
hours a year purchasing coffee
away from the office with 75% of
full-time employees also drinking
coffee at work, according to a 2015
research report from Packaged
Facts, a market research firm.
The shift follows technology
companies, which learned decades
ago that stocking premium snacks
and providing hip areas for loung-
Jones Lang LaSalles coffee shop offers cold brew on tap. Here, barista George Fero, Jr. makes a green tea matcha latte. ing can improve the office atmo-
in-house. A 16-ounce Stumptown
cafe latte costs around $4.25 at
their cafes, but only $2.50 in offices.
Companies outsource daily oper-
ations, staffing and build-out of the
cafes. Coffee revenues go directly to
the company, but the firms pay
$18,000 to $100,000 monthly per
space, says Michael Schultz,
founder of Infuse, a year-old Chi-
cago based firm that works with
companies and hotels to create cafe
Please see COFFEE page A14
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A14 | Monday, June 5, 2017
Contact Combat Before Work
PayPal chief executive Dan Schulman swears by Krav Maga, the intense Israeli self-defense practice; a tool for conflict resolution
MOST CEOS start their day strat-
egizing bottom lines or growth
strategies over email. Dan Schul-
man starts his day at the gym, fig-
uring out how to disarm someone
with a knife. He credits his daily
Krav Maga (pronounced krahv
mah-GAH) training with develop-
ing leadership skills he has put to
use in roles at American Express,
Virgin Mobile, Priceline, AT&T and
in his current position as presi-
dent and CEO of PayPal Holdings
Inc. They say leadership is de-
fined in times of stress, and I think
Krav Maga trains you for those
moments, he says.
Krav Maga, or contact combat
in Hebrew, is a self-defense and
fighting system that combines
techniques from judo, boxing,
wrestling and aikido. It was origi-
nally taught to the Israeli army.
Today, the practice has been em-
braced by law-enforcement agen-
cies, as well as gyms, where a
faster-paced version has become
an increasingly popular workout.
Mr. Schulman, 59, was intro-
duced to the practice when he was
13 and visiting Israel. I was living
on a kibbutz and was put into youth
military training, he recalls. I was
a skinny little kid and it was incred-
ibly intense, but also extraordinarily
practical and useful in stressful sit-
uations involving conflict.
In Krav Maga, all elements of
the bodylegs, knees, elbows,
hands, feetare used as tools to
strike and defend. People com-
plain about having less resources,
but having too many tools often
starves you from being as creative
as you might be, Mr. Schulman
says. He rediscovered Krav Maga
after college and now practices
daily. He splits his time with his
wife between Silicon Valley and
the New York City area. (The cou-
ple has two college-aged children.)
He trains at Tactica Krav Maga
Institute in Santa Clara, Calif. At
Gotham Gym in New York he boxes
and slips in some Krav Maga kicks.
Part of the Krav Maga philoso-
phy is that the best way to win a
fight is not to get into a fight. So
we spend a lot of time figuring out
how do you de-escalate situations
and win through avoidance of con-
flict, he says.
When conflict is unavoidable,
DANIEL DESLOVER/ZUMA PRESS
MUSIC
ROCKER TAPS INTO
THE OLD GUARD
BY JOHN JURGENSEN
DAN AUERBACHS new album
Waiting On a Song is billed as a
solo project because it doesnt
feature his famous rock band the
Black Keys. In fact, his solo al-
bum resulted from top-to-bottom
collaboration with some of the
best songwriters and
session musicians in
Nashville.
Mr. Auerbach didnt
seek out hot, young
talent. Instead, he sur-
rounded himself with
seasoned veterans
most of whom are
about twice the age of
the 38-year-old singer
and guitarist.
They have this magic that
transcends age, Mr. Auerbach
says of his writing and recording
team, including John Prine, age
70, keyboardist Bobby Wood, 76,
and guitarist Duane Eddy, 79.
Unlike the slash-and-burn style
that made early Black Keys re-
cordings stand out, Waiting On a
Song, out June 2, has a precise,
multilayered sound that pays re-
spect to the bright pop of the
1960s and 70s.
By working daily with musicians
WHATS YOUR WORKOUT? | By Jen Murphy
PayPal CEO Dan Schulman, above and top right, during a Krav Maga self-defense workout with his coach, Danny Zelig.
Krav Maga teaches how to use ev-
erything at your disposal to neu-
tralize a threat while remaining
calm under pressure. My teacher
always says, Standing still is asking
to be hit. Thats a valuable lesson
in business, he says. If you stand
still as a business just because
things are going well and you dont
challenge yourself, inevitably your
competition catches up with you.
The Workout
Mr. Schulman trains for a mini-
mum of one hour daily during the
week and up to three hours on
Saturdays and Sundays. He warms
up on the speed bag or heavy bag,
sometimes challenging his core by
balancing each foot on a skate-
board, and will then do footwork
Dan Auerbach
collaborated with
Nashville artists for
Waiting On a Song.
who helped create hits of that era,
Mr. Auerbach says he learned how
to collaborate across generations.
Some of his takeaways:
Seek out introductions
After the Black Keys moved to
Nashville in 2010 from their
hometown of Akron, Ohio, Mr.
Auerbach became fast friends
with David Ferguson,
a sound engineer who
worked with Johnny
Cash, among many
other artists. Fergie
would go on to intro-
duce Mr. Auerbach to
most everyone who
contributed to Wait-
ing For a Song, in-
cluding Mr. Prine and
his longtime mandolin player Pat
McLaughlin, who co-wrote most
of the songs.
Do the work
Songwriting sessions typically be-
gan at 9 a.m. when Mr. Ferguson
and Mr. McLaughlin arrived at Mr.
Auerbachs house. At quitting
time, about eight hours later, they
would emerge with two or three
new songs. In total, Mr. Auerbach
wrote about 200 songs with vari-
ous collaborators, though only 10
made it onto the album.
LIFE & ARTS
drills, like various kicks, to loosen
up. The next phase involves work-
ing on technique, like a particular
combination of kicking and strik-
ing, or escaping from a headlock,
followed by 15 to 20 minutes of
sparring. He might have to disarm
someone with a knife, stick or gun.
Once hes worn out from spar-
ring, he finishes the workout with
a set of drills. He might bear-crawl
around the perimeter of the room,
stopping in each corner to perform
push-ups, then reverse and go the
opposite direction. I might end up
doing 150 push-ups in that exer-
cise, he says. It requires incredi-
ble focus to get through it when
your body is already at its limit.
Mr. Schulman typically works
one-on-one with a coach or spar-
Thats the thing about song-
writing in Nashville, you dont get
paid for your job directly. You have
to work a lot of hours to possibly
get a song used [by a recording
artist]. So songwriters are used to
writing just to write, and you end
up sharpening your blade.
Dont get lost in nostalgia
Despite being surrounded by musi-
cians who worked side by side with
legends such as Elvis Presley (as
Mr. Wood did), Mr. Auerbach says
nobody wasted time on nostalgia.
I like to hear a story every
now and then, but I dont hang
out with these guys for the work
they did. I hang out with them for
what they might do, right now,
Mr. Auerbach says. And they are
as addicted and in love with mak-
ing music as they ever were.
Create the right setting
The album was recorded in Mr.
Auerbachs Easy Eye Sound,
which he built to function in the
way that legendary studios like
Stax and Motown didwith musi-
cians playing live together in one
room. Then I meet these guys,
who spent their entire lives re-
cording just like that, Mr. Auer-
bach says. Immediately they felt
at home and they knew exactly
what to do.
Dont get stuck on
pecking order
As the one whose name and im-
age is on the album cover, Mr.
Auerbach says he wasnt timid
about guiding colleagues with de-
cades more experience: It
doesnt matter how old you are
or what youve done before. All
that goes out the window in the
studio. Whoever makes the magic
is what matters.
Soak up the expertise
By spending days at a time with
his collaborators, Mr. Auerbach
absorbed their quirkssuch as
Mr. Prines knowledge of meatloaf
specials across Nashville restau-
rantsand advice. In addition to
helping him learn not to over-
think things, Mr. Auerbach says,
those guys taught me that to re-
ally be someone in Nashville,
youve got to drive a Cadillac.
He adds, I definitely got that
Cadillac. Its working already.
ring partner, but says its also im-
portant to train with groups. Of-
ten in fights, there are multiple
attackers, he says.
The Diet
Mr. Schulman has half of a cup of
coffee pre-workout. Thats just
enough to get the body going
without having coffee sloshing
around in my stomach during a
workout, he says. Post-workout
he has yogurt and fruit. Lunch is
light, usually a salad, and dinner is
a protein, often steak or fish, with
a vegetable or salad. Two to three
times a week he must attend a
work lunch or dinner. Ill have
one or two sips of wine to be so-
cial, because people dont want to
drink alone, he says.
COFFEE
Continued from page A13
spaces and menus from
independent roasters.
Most firms end up break-
ing even on the running
the cafes, he says. Mr.
Schultz works with brands
including Irving Farm Cof-
fee Roasters, Ritual Coffee
Roasters and Metric Cof-
fee and uses the same
kind of commercial
espresso machines that
are used by the roasters.
At Jones Lang La-
Salles Chicago headquar-
ters, the Club, a seating A barista
area with a long coffee
bar, draws younger employees,
who dont want to spend the day
in a traditional cubicle, says Ed
Nolan, managing director of work-
place strategy. The company built
out the space to feel like an inter-
nal co-working space, but it has
become so popular that its now a
spot for external meetings, Mr. No-
lan says. Unlike in nearby cafes,
they are free to loiter, he adds.
Employees can plug in laptops
along the bar area while sipping
traditional espresso-based drinks,
pour-over offerings from local
roasters, sparkling teas and green
tea matcha lattes. Cold brew is of-
fered on tap. I keep it pretty legit,
says George Fero, Jr., the lead
barista at Jones Lang LaSalle who
often uses ceramic cups in lieu of
paper. Recently, Mr. Fero who works
for Infuse, introduced some employ-
ees to a traditional macchiato, an
espresso with a dash of milk.
Piercings, tattoos and casual
clothing are allowedand, at
times, encouraged. They are not
walking in in a suit and tie and
serving up coffee like its the Ad-
mirals Lounge, Mr. Schultz says.
Corporate food-service company,
Compass Groups Bon Apptit sub-
sidiary, is also working to mimic in
offices what employees are pur-
chasing off premises, says Maisie
Ganzler, chief strategy and brand
officer. Three years ago, the com-
pany started hiring coffee manag-
ers, who are professionally trained
baristas that can discuss coffee at
length and host regular tastings
with employees, says Ms. Ganzler.
THE WALL STREET JOURNAL.
The Krav Maga
Mentality at Work
Krav Maga might look like
something out of Fight Club, but
proponents say the philosophy of
the fighting system develops skills
that translate to the office. Krav
Maga training develops an individ-
uals ability to effectively deal with
confrontation, says Danny Zelig,
founder of the Tactica Krav Maga
Institute, based in San Francisco.
People learn to maintain confi-
dence and mental function without
shying away from conflict due to
fear of confrontation.
Making decisions under stress
boosts mental strength and
teaches students to focus their
efforts and energy on the most
important, immediate needs, he
says. Krav Maga develops height-
ened negotiation and improvisa-
tion skills through situational
awareness, he says.
An individual learns to take
JASON HENRY FOR THE WALL STREET JOURNAL
cues from others during their at-
tempts to de-escalate and nego-
tiate with an aggressor during
dangerous situations, Mr. Zelig
says. A heightened sense of
awareness allows leaders to un-
derstand their peers, co-workers
and upper management and to
be in tune and aware of their co-
workers current mental states by
the cues they give.
The Gear & Cost
Mr. Schulman spars barefoot. His
uniform consists of Nike Pro Com-
bat compression shorts, a T-shirt,
a mouth guard and Revgear MMA
gloves, which retail between $30
and $60. If were really going at
it, I wear shin guards, he says. I
have scars on my legs from not
wearing them.
TAYLOR GLASCOCK FOR THE WALL STREET JOURNAL
pours coffee at Jones Lang LaSalle.
Companies are more demanding
when it comes to beverage offer-
ings, she says. Fifteen years ago,
it was just coffee, she says.
Most weekdays, ConAgra Brands
attorney Megan Agnew orders her
regulara latte with cinnamon
and stays for the chitchat. At the
one-year-old cafe, which is run by
Infuse, baristas keep regulars mugs
behind the bar and offer Kombucha,
a fermented tea beverage, on tap.
The cafe also serves breakfast tacos
and chia seed pudding. These are
my besties at work, says Ms. Ag-
new who often shares photos of her
children with the baristas.
At Mastercards Union Square
office in New York, people often
sit for meetings in nooks sur-
rounding the cafe where a barista
pours drinks from Portland
roaster, Stumptown. Employees
are less likely go out hunting New
York City for this kind of experi-
ence, says John Sheldon, a senior
vice president at Mastercard.
At some companies, coffee
lounges are replacing the corpo-
rate cafeteria. In 2010, office furni-
ture maker Steelcase turned an un-
der-utilized cafeteria into what the
company bills the Workcafe in
their Grand Rapids, Mich., head-
quarters. Theyve replicated it for
some clients. In addition to a
barista, employees get access to a
full kitchen and a nourishment
bar. It is open from 7 a.m. to 7
p.m. with an atmosphere that re-
sembles a cafe, says Ms. Johnson:
We purposely offer the best cof-
feeand its not self service.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Monday, June 5, 2017 | A15

LIFE & ARTS

America Responds, above, and United but Unequal, left, galleries

in the Arsenal of Democracy exhibit at the National WWII Museum

Storekeeper Second which gave the military the au-

Class Roy Boreen, who
was aboard the USS
Oklahoma, abandoned
ship, and swam to
safety on the USS
Maryland, where, a
plaque tells us, he
NATIONAL WWII MUSEUM
thority to declare any part of the
country a restricted military
zone. It didnt mention the Nisei
by name, but thats who it tar-
geted. Among the stories told
here is that of William Nakamura
of the 442nd Regimental Combat

had a cup of black cof- Team, an all-Japanese unit that

fee and the first ciga-
rette of his life. The
watch is stopped at
8:04 a.m., less than 20
minutes after the Japa-
nese attack started.
EXHIBITION REVIEW Oral histories recount harrowing
distinguished itself in Europe. Na-
kamura was killed distracting a
machine gun away from his com-
rades. He was initially awarded
the Distinguished Service Cross,
because Japanese-Americans were
not eligible for the Medal of

The War at Home

World War II viewed from the U.S., from the Victory Garden to the factory
events leading up to the Japanese
BY MARK YOST
attack on Pearl Harbor. A wall
timeline charts the rise of fascist
New Orleans dictatorships and militant nation-
AT FIRST GLANCE, it may seem alism from Italy to Germany to
odd that the National WWII Mu- Japan. Interesting artifacts include
seum is opening its new exhibit, an original Volksempfnger, the
Arsenal of Democracy, about life Peoples receiver created by the
on the home front, on the anniver- Nazis to pick up only Nationalist
sary of D-Day. But as the show broadcasts, as well as a Walt Dis-
makes abundantly clear, the Allies ney-created Mickey Mouse gas
couldnt have embarked on the mask for children (rubber short-
greatest amphibious landing in ages limited production, making
history without the efforts of the this a rarity).
folks at home. Discordant Voices, the second
The museums $5.6 million per- gallery, reminds visitors how di-
manent addition, encompassing vided America was about going to
some 9,500 square feet and nearly war, and how those attitudes
400 artifacts, dedicates the first changed quickly. Side-by-side Gal-
three of its nine galleries to the lup polls show that in January
1940 88% of Americans were
against declaring war on Germany
and Italy, and 60% against helping
a besieged Britain. Fast-forward a
year and two-thirds of Americans
were in favor of going to war. Au-
dio and video loops rebroadcast
President Franklin D. Roosevelts
January 1941 Four Freedoms
speech, in which he outlines the
fundamental freedoms people ev-
erywhere in the world should en-
joy. The antiwar argument is given
by the leading isolationist of the
day, Charles Lindbergh.
America Besieged uses a 50-
foot-wide screen to immerse visi-
tors in the Japanese attack on
Pearl Harbor. Notable artifacts in-
clude a wristwatch belonging to
tales of those who survived it.
While this history is important,
six of the nine galleries focus on
life on the home front and how
every American contributed to the
war effort. War Affects Every
Home features a mural of a
woman and boy hoeing dirt in a
Victory Garden, where Americans
grew their own fruits and vegeta-
bles. Visitors next step into an ex-
quisitely re-created 1940s Ameri-
can kitchen, complete with period
appliances, ration books, and rec-
ipe books that helped women
stretch those rations.
United but Unequal is a bal-
anced look at how America strug-
gled withand resolvedits segre-
gationist policies to fight and win
the war. Personal stories shine
here, telling how minorities
blacks, Latinos, American Indians
were initially rejected but eventu-
ally integrated into military service,
such as Enrique Cervantes, a Mexi-
can-American who persevered to
become a distinguished B-17 pilot.
Japanese-Americans rightly get
the most coverage. On display is
FDRs Executive Order 9066,
Honor. President Bill Clinton
changed that in 2000 for Naka-
mura and others whod been de-
nied awards and medals based on
race. Video screens embedded in
period suitcasesinternees were
allowed to bring just one suit-
casetell oral histories, including
that of Rep. Norman Mineta.
The museum has also re-cre-
ated a factory floor with assembly
lines for Jeeps and the Packard-
built Merlin engines that gave
American P-51 Mustangs a signifi-
cant performance advantage over
German aircraft.
Most interesting here is a wall
display showing what manufactur-
ers made before the war, and what
they converted to for wartime pro-
duction: Frigidaire made the
Browning M2 machine gun, Kodak
made Beano grenades.
This museum has long been the
standard-bearer for serious World
War II history, especially the oral
histories it curates for the public.
Arsenal of Democracy only adds
to that much-deserved reputation.
Mr. Yost is a writer in Houston.

CANCER
Continued from page A13
equately. She wishes that a
cardiologist had monitored
Ms. Harris through the
years.
Many cancer patients are
vigilant about getting
checked for cancer, but ig-
nore potentially greater
risks they face with their
heart, says Dr. Agarwal, a
cardiologist with an interest
in the emerging subspe-
cialty of onco-cardiology,
also called cardio-oncology.
Every one of those survi-
vors, they go back to their
oncologists; [the female pa-
tients] get screening mam-
mograms, they get routine
colonoscopies, their doctors
reiterate the importance of
wearing sunscreen to pre-
vent melanoma, she says.
But once you cross 10, 12
years, [cancer] isnt your
main issue: What you should
be concerned about is heart
disease, and everyone for-
gets that.
Sometimes the risk to the
heart is worth taking. Last
year, John Cheek, an 86-
year-old retiree from Idaho,
moved in with his daughter
in Oak View, Calif., after he
was diagnosed with Stage 4
lung cancer and given three
months to live. He had treat-
ment at UCLA Health Hema-
tology-Oncology and seemed
to be beating the odds. Then
FROM TOP: ROBERT HERNANDEZ/UCLA; REED HUTCHINSON/UCLA
Rae Harris survived cancer in the 70s but is facing heart surgery.
he started feeling poorly.
My breathing was so bad I
could hardly carry on a con-
versation, he says.
The problem turned out to
be his heart, Dr. Agarwal
says. She believes the cancer
therapy was the source of
his problems, even as it was
saving his life. His daughter,
Lynette Cheek, a nurse, is
philosophical. I know there
are risks and benefits, she
says. I cant help thinking
that without the cancer
treatment he wouldnt be
here. He is still walking.
Some patients beset by
cancer and heart issues man-
age to survive both.
That has been the case for
Emeldine McAndrew, a pa-
tient of Dr. Steingart for 20
years. She consulted him for
a serious heart problem in
1998 when he was practicing
cardiology in Long Island,
N.Y. Ms. McAndrew was di-
agnosed with Stage 3 breast
cancer in 2005. Following
chemotherapy and radiation,
she started Herceptin, but
after a month, developed
heart problems.
Doctors told her that if
they continued you will be
cancer-free but you will also
be gone, the 59-year-old
accountant recalls. They
stopped the drug. Twelve
years later, she is cancer-free
and her heart has been sta-
ble. She has annual check-
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John Cheek in the center where patients have chemotherapy at UCLA Health Hematology-Oncology.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A16 | Monday, June 5, 2017 * *** THE WALL STREET JOURNAL.

SPORTS
GOLF | By Jason Gay

Phil Mickelsons Easy Choice

The golf star will skip the U.S. Open for a family moment. Who would argue it isnt the right move?
ITS POSSIBLE the
golfer Phil Mickelson
will conclude one day
that he made a terrible
mistake, deciding to
skip the 2017 U.S. Open
to attend his daughters high
Venus Williams fell in three sets school graduation. The man they
to Timea Bacsinszky on Sunday. call Lefty turns 47 later this
month, and the U.S. Open is the

FROM LEFT: MICHEL EULER/ASSOCIATED PRESS; STACY REVERE/GETTY IMAGES

only major that has eluded him in
TENNIS
his outstanding careerMickelson
has finished second in the tourna-
AMERICANS ment a maddening six times.
Graduations are nice, but who

ARE LOST knows how many more chances he

will get? Wont Mickelson feel a
twinge of regret when he realizes
IN PARIS his colleagues are teeing off with-
out him at Erin Hills in Wisconsin?
Maybe. But I doubt it.
Its the right move. He knows
BY TOM PERROTTA it, and I think the rest of us do,
too.
THE SECOND WEEK of the French Mickelson told the media Satur-
Open began with a goodbye: All the day after his round at the Memo-
American singles players are gone. rial Tournament in Ohio that hes
Venus Williams, the last remain- informed the United States Golf
ing American in singles, was beaten Association of his intention to
by Switzerlands Timea Bacsinszky, withdraw from the U.S. Open. He
5-7, 6-2, 6-1 in the fourth round. added that hes yet to officially Phil Mickelson said he plans to withdraw from the U.S. Open to attend his daughters high school graduation.
Williams, 36 years old, was making withdrawwere the graduation
her 20th appearance at the Open. plan to change, or the long-term when that insidious smartphone Reporter: No, but a semifinal is im- This doesnt mean its a simple
She has never won the tournament. forecast for Thursday, June 15s brings our work wherever we go. portant. decision; its just a simpler one.
I feel like I played well today, opening round look like a washout, Theres not a Saturday I havent Jasikevicius: To whom is it impor- Would Mickelson have made a dif-
but, you know, I didnt quite figure theres a chance Mickelson could contemplated tossing that thing in tant? ferent decision had he won a bunch
out the solution in time, Williams make it to the start. the ocean. Reporter: The team. of recent tournaments? Who cares?
said. Williams looked like she would But thats a long shot. A far I think were wising up, I really Jasikevicius: Which one? He made the choice he made.
dominate after shocking Bacsinszky more likely scenario is that on the do. Even in sports, where perspec- Reporter: Zalgiris. Mickelson has a history with
in the first set. Williams trailed 5-1 day the tournament begins, Mick- tives are always a little askew and Jasikevicius: Did you see the num- balancing family life with this par-
and promptly won six straight elson will be in California with his caveman-like. ber of fans at the game? Impor- ticular tournament.
games. But Bacsinszky led the rest family, and his daughter, Amanda, Mickelsons fellow golf pro tant? When you see your first Four years ago, he managed to
of the way. for commencement ceremonies. Hunter Mahan walked away from child, you will understand what hustle between the U.S. Open in
Other defeats in the womens Shes the school president, the Canadian Openwith the the most important thing in life is. Philadelphia and the West Coast to
tournament on Sunday made the Mickelson said. Shell be giving leadwhen his wife Kandi went Because nothing can be more ma- attend Amandas eighth grade grad-
unpredictable event even more the commencement speech. into labor in 2013, and his move jestic in the world than the birth uation, and still finished second in
wide open. Caroline Wozniacki de- I hate schmaltz, and I dont was widely lauded. You can also of a child. Not titles, not anything the field. More memorably, there
feated Svetlana Kuznetsova, who want to be schmaltzy here. Too of- see progress in team sports. Yes, else. Augusto Lima is now in was 18 years ago, when Mickelson
won a French Open title in 2009. ten we give professional athletes there are still dinosaurs among us heaven emotionally. Im really with his wife Amy very pregnant
Jelena Ostapenko, a 19-year-old excessive credit for the most ordi- who gnash and growl that a player happy for him. finished runner-up to the late Payne
from Latvia, upset Australian Sa- nary of human behavioror, con- who leaves to attend a childbirth Stewart. At the end, Stewart cupped
mantha Stosur in three sets. And in versely, fly off the handle when is letting down the club, team- Mickelsons face and congratulated
the most popular highlight of the
afternoon, Frances Kristina Mladen-
they make the most human of mis-
takes. My opinion here is not ex-
mates, fans. (Usually, it seems,
these dinosaurs have shows on
Career versus family him on impending fatherhood, and
the birth of a child who would be
ovic knocked out Garbie Muguruza, actly radicalcolumnist sides with sports radio.) isnt the easiest battle to born the following day:
last years Open title winner, in
three sets, 6-1, 3-6, 6-3. Those de-
athlete prioritizing family, what
courage!but theres something re-
But many more of us feel like
Sarunas Jasikevicius, the coach of
navigate. But we appear Amanda.
Mickelson was asked Saturday
feats mean theres not a single assuring about Mickelsons choice, the Lithuanian team Zalgiris (and to be wising up. if he planned to help Amanda, who
player left in the draw who has and his apparent comfort with it. former Maryland Terrapin) whose will attend Brown University, with
won a Grand Slam singles title. Obviously, [the U.S. Open] is spirited defense of a player be- her graduation speech.
A French woman has not won the tournament that I want to win came a viral video last month. Probably not, no, he said.
this tournament since Mary Pierce the most, and the only way to win To date, more than a million Actually, definitely not.
in 2000. Mladenovic will face Bac- is if you play, Mickelson said. Reporter: Coach, what do you think and a half people have watched Shes a better writer, more elo-
sinszky in the quarterfinals. Bacsin- But this is one of those moments about Augusto Lima going away in Jacieviciuss comments on You- quent speaker than I ever dreamed
szky said she knows the crowd will where you look back on life, and the midst of a series to attend the Tube, which I suspect is more to be.
root against herbut no matter you just dont want to miss it. Ill birth of his child? views than the typical Zalgiris There will be plenty of recog-
what, she said, Switzerland tops be really glad that I was there. Jasikevicius: What do I think about coachs availability. nizable golf talent in Erin Hills a
France in at least one thing. Most of us have faced a choice it? I allowed him to go. Mickelson, to be sure, is in a week from Thursdaystars like
Of course everyone knows like thisprobably not with such Reporter: But is it normal for a different scenariohe works only Jordan Spieth, Jason Day, Dustin
Swiss cheese is so much better public and dramatic stakes as Mick- player to leave the team during for Phil Mickelson. He has spon- Johnson and recent Masters cham-
than French cheese, she said. You elsons, but with similar emotional the semifinals? sors, but no teammates, no owner- pion Sergio Garcia. The tourna-
are impostors. pulls. Surely there are a few of us Jasikevicius: Do you have kids? ship, no locker room to address. ment will go on, and on Sunday,
Besides Mladenovic, two others who have made a choice we regret. When you have kids, youngster, Hes made a fortune in his playing June 18Fathers Daythe winner
from France remain in the draw: 23- I definitely have a few. We almost youll understand. Because thats career. Though hes had a bumpy will get a check close to $2 million
year-old Caroline Garcia and 27- always know what the correct deci- the height of a human experience. few years since his last victory, at dollars, and one of the most cov-
year-old Aliz Cornet. Garcia and sion is, but career versus family Wow, thats a good question, re- the British Open in 2013, he re- eted titles in golf.
Cornet will play each other in the isnt the easiest battle to navigate. ally. Do you think basketball is the mains perhaps the most popular Phil Mickelson will be else-
fourth round on Monday. Thats especially the case today, most important thing in life? player in the field. where. And richer for it.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are todays noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Edmonton
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P tl d
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ff Hartford
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70s 32 33 34 35 36
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C y Des
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C h
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C
Cl l d ew York
New Y k ground balls are 36 Pardon me...
Reno Cheyenne Omaha
h Pit b gh Ph
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h d ph 80s fielded
80s Indianapolis
di p 37 38 39 40
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p 38 Like some
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DC 90s 6 Major artery
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h d 100+ 7 Bib moistener
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p 80s LLouisville
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hit Nashville
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Angel Ch l tt
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Santa
anta Fe 70s Memphisph
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C b 49 50 51 52 9 Melodramatic Lyon
Phoenix
Ph i Albuquerque
A b q q Oklahoma
homa City Warm Rain
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Atl t
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Tuc El P
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h 53 54 55 56 57
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F Worth
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Cold T-storms 49 TVs DeGeneres
30s 100s Mobile
b Jack
Jacksonville 58 59 60 61 62 11 Cost for a hand
90s Austin
A ti 80s 50 Bit of snow
40s Houston Stationary Snow 12 Feature of the
New
ew Orleans Orlando
d 63 64 65 51 Gallbladders
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n Antonio
A Ta p
Tampa Texan flag
Showers Flurries 66 67 68 neighbor
60s
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A h g Honolulu
l l 100s Miami 15 Wedding
70s settings 53 Test the weight
50s of
Ice
CHANCES ARE | By Daniel Hamm 17 Convertible
54 Grade
drivers option
U.S. Forecasts City
Today Tomorrow
Hi Lo W Hi Lo W City
Today Tomorrow
Hi Lo W Hi Lo W
Across 26 The Mikado 49 List-shortening
20 Answer an
determiner, often
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Donna Summers town abbr. 55 1871 Verdi opera
t...tstorms; r...rain; sf...snow flurries; sn...snow; i...ice
Omaha 93 61 s 85 61 s Frankfurt 72 54 sh 65 51 t invitation
Orlando 85 70 t 82 71 t Geneva 68 53 t 65 47 t music 28 Genesis name 50 Hits opposite 56 Intel product
Today Tomorrow Havana 87 74 pc 87 75 pc
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Philadelphia 77 61 t 68 54 c 6 Tack on 29 Language 52 Explosive
City Hi Lo W Hi Lo W Phoenix 108 82 s 107 80 s Hong Kong 90 83 t 90 81 sh 22 Get gas 57 Settings of four
9 Stress-relieving suffix letters series in a CBS
Anchorage 57 47 pc 62 49 c Pittsburgh 74 54 t 68 52 sh Istanbul 77 66 pc 77 65 s 23 Challenges for
Atlanta 82 69 c 77 64 t Portland, Maine 57 46 r 56 47 r Jakarta 89 76 t 89 76 pc resorts 32 Close angrily 53 Physical franchise
Austin 87 68 t 91 70 pc Portland, Ore. 77 53 pc 83 56 pc Jerusalem 85 62 s 88 67 s location? dry cleaners
13 From Brunei, 33 Shark, maybe 60 Laugh sounds
Baltimore 76 61 r 75 54 c Sacramento 92 55 s 91 54 s Johannesburg 68 38 s 66 39 s
58 Banish 27 ___ corny as
Boise 76 53 pc 86 61 s St. Louis 91 62 pc 82 60 s London 64 51 r 61 51 t Bhutan or 37 John Smith, Kansas in 61 Mine output
Boston 57 50 r 53 50 r Salt Lake City 85 62 s 91 68 s Madrid 80 56 s 84 57 s Bangladesh often 59 Might succeed, August (South 62 39-Across
Burlington 66 52 r 59 50 r San Francisco 71 52 pc 68 54 s Manila 90 80 t 93 79 t and what the
Charlotte 84 68 t 81 61 c Santa Fe 86 54 s 84 53 t Melbourne 60 47 sh 54 44 sh 14 ...man ___ 39 Recipient of Pacific lyric) collection
Chicago 71 52 s 73 53 s Seattle 71 52 pc 78 54 pc Mexico City 82 58 pc 83 56 pc mouse? starred answers
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Cleveland 73 55 c 66 54 sh Sioux Falls 86 58 s 83 60 pc Milan 75 61 t 75 55 t 15 Conduct a Previous Puzzles Solution
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City Hi Lo W Hi Lo W 65 Pageant winners P G A P L E A T H E R
Indianapolis 84 56 s 76 53 s Rome 80 62 pc 78 62 pc 18 ___ la vista! 44 Annas sister in A R E A S WH I T S B R R
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headgear N E X T R I L E S L O G O
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19 Person who Frozen 66 Eliot Ness, I R E N I N O S L A Y E R
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Los Angeles 80 61 pc 77 60 pc Bangkok 92 77 t 91 78 t Singapore 89 82 t 89 79 t 21 Conditions for short C E E S P R E E N E R
Miami 88 79 sh 89 79 t Beijing 87 59 c 66 57 c Sydney 66 48 pc 62 51 pc 67 For every A R I E L S H A R O N B A I
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Nashville 79 66 t 81 58 s Buenos Aires 56 33 pc 59 39 s Toronto 64 53 sh 62 50 sh The contest answer is DEPOSIT. The Xs in the grid
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Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Oklahoma City 81 64 c 88 59 s Edinburgh 62 48 r 57 46 r Zurich 65 51 t 62 46 t 49-Down) by letters that spell the contest answer.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
The Radial Tire Lesson for Tech
By Andy Kessler
W
ant to know what
scares tech execu-
tives? Its not com-
petition from China, Wanna-
Cry ransomware attacks, or
being coded out of existence
by Mark Zuckerberg clones.
Its radial tires.
Until around 1970, almost
all cars and trucks rolled on
bias-ply tires. Under the rub-
ber treads, nylon belts ran di-
agonally, at 30 or 45 degrees,
forming a crosshatch. This al-
lowed for stronger sidewalls
and cheaper manufacturing.
The problem was that bias-ply
tires needed to be changed
every 12,000 miles.
Then along came radial
tires. Introduced in 1949 by
Michelin, radials have steel
belts inside that run across
the tread at a 90-degree an-
gle. They are wider, better at
dissipating heat, and safer.
Although radials cost a little
more to manufacture, they
last at least 40,000 miles.
The first American car
that came with radials was
the 1970 Lincoln Continental.
Four years later, Goodyear
was making only radial tires.
Other companies missed out
and paid dearly. By the end
of the decade, radials effec-
tively had 100% market share
for cars.
Which brings us back to
Silicon Valley. In the 1980s
and 90s, technology was
changing so fast that a new
computer was almost dispos-
able. You upgraded every
Brazils President Temer Teeters
Brazils Supe-
rior Electoral
Court is ex-
pected to rule
Tuesday on
whether ille-
AMERICAS gal campaign
donations,
By Mary
made during
Anastasia
Brazils 2014
OGrady
presidential
race, invali-
date the re-election victory of
former President Dilma Rouss-
eff and her vice president,
Michel Temer.
Ms. Rousseff, of the hard-
left Workers Party, was im-
peached and removed from
office by Congress in 2016 on
charges of violating the con-
stitution. Mr. Temer, of the
more centrist Brazilian Demo-
cratic Movement Party
(PMDB), is now president. He
had his own finance commit-
tee for his vice-presidential
campaign so he could be
judged independently of Ms.
Rousseff. But if the court were
to rule against the ticket, he
would have to step down.
In that case, the constitu-
tion stipulates, the speaker of
the Chamber of Deputies, the
legislatures lower house, be-
comes president for a 30-day
period. During that time Con-
gress would elect a successor
to finish the term, which runs
through 2018.
But forces on the left have
mounted a public campaign in
favor of holding a general elec-
tion. The threat to the consti-
tution is so serious that the
Brazilian daily O Estado de
So Paulo editorialized on the
Yes, Pittsburgh Trumps Paris
By Lou Weiss
M
Pittsburgh
y hometown has been
basking in glory since
President Trump said
last week that hed rather look
after Pittsburgh than Paris. No
need for concern, Mr. Presi-
dent. I have been to Paris for
a few days and can authorita-
tively state that Steel City
holds up quite well.
Paris may be lovely, but
there is no truer beauty than
being able to make it from
your house to Heinz Field in
under 15 minutes thanks to
the hundreds of bridges that
cross our three riverstriple
the rivers of Paris. And can
you spell Monongahela?
The Louvrenot to mention
Pariss impressive museums
devoted to Rodin and Pi-
cassois world-class. Pitts-
burgh has the Andy Warhol
and Roberto Clemente muse-
ums, the latter dedicated to
the greatest artist ever to play
right field. We cant help it if
our greatest (robber?) barons,
Frick and Mellon, plunked
few years. But as innovation
slowed, they lasted longer,
which meant fewer people
buying computers.
Bill Gates was worried
about this all the way back
in 1991. When radial tires
were invented, he said in
an interview, people didnt
start driving their cars a lot
more, and so that means the
need for production capac-
ity went way down, and
things got all messed up.
The tire industry is still
messed up.
Smartphones and
computers last longer
than ever. Can their
makers adapt?
During the dot-com boom,
Mr. Gates invoked the anal-
ogy again. Every time I read
about optic fibers or wire-
less, I say to myself, Wow,
that sounds like radial
tires, he said. When they
got radial tires did people
drive four times as much just
because the tires lasted lon-
ger? No, the industry
shrank.
That fear has come true.
When was the last time you
upgraded your PC? Exactly.
They run and run. Sales of
personal computers peaked in
2011 at 365 million. Five
years later, only 260 million
shipped, down almost 30%.
Tech companies continue to
issue on May 31: It would be
a fraud to the democratic state
of law if a particular political
group or social stratum could,
under certain circumstances,
change the rules of the game
simply because they are now
unappetizing. All true. Brazil-
ians are right to resist.
The worlds 9th largest
economy grew 0.5% in 2014;
in 2015 it contracted 3.8% and
last year lost another 3.6%.
Despite his close association
with the leftist Ms. Rousseff,
Mr. Temer is now trying to
put Brazil back on the mar-
ket-oriented trajectory
launched under Fernando
Henrique Cardoso, who was
president from 1995 through
2002.
Yet Mr. Temers tenure is
tenuous. Even if the electoral
court validates his 2014 re-
election as Ms. Rousseffs vice
president, it is far from cer-
tain that he can survive as
president for the remaining 19
months of the term.
That challenge was made
more difficult on May 19 when
Brazils Supreme Federal
Court released plea-bargain
testimony from executives of
the giant meatpacking com-
pany JBS, alleging that they
had bribed Ms. Rousseff, Mr.
Temer, former president Lula
da Silva and more than 1,800
other politicians.
Shortly thereafter an au-
dio tape of Mr. Temer talking
to JBS chairman Joesley Ba-
tista was leaked to the press.
Mr. Temers opponents said
that the tape, secretly re-
corded by Mr. Batista, proved
their artistic booty into facili-
ties in New York and Washing-
ton. Advantage: Paris.
The City of Light is fa-
mous for its cuisine, but how
do you really feel after all
that heavy sauce? Mean-
while, Pittsburgh won Za-
gats 2015 award for the No.
1 food city in America. The
Big Mac was invented here,
too. We may not confit our
ducks, but we do put french
fries on the inside of our
sandwiches. Throw in Heinz
ketchup and its not even
close. Pittsburgh.
Paris ended up with Jim
Morrison, Oscar Wilde and
many more famous expats.
But only Pittsburgh can claim
the geniuses of Gene Kelly,
August Wilson and Christina
Aguilera. Gertrude Stein, host-
ess of famous Parisian artistic
salons, was born in Allegheny
County. Call this a draw.
Paris has a few historical
sites, but from my backyard I
can look down the river to
the battlefield where Gen. Ed-
ward Braddock and George
Washington fought the French
OPINION
post relentless performance
increases and cost improve-
ments, except they show up
elsewherein cloud comput-
ing, artificial intelligence and
speech recognition.
Its true that tablet com-
puters caused some of the
PCs decline, but theyve
peaked, too. Steve Jobs intro-
duced the iPad in 2010. Sixty-
eight million were sold in
2014. Last year Apple moved
barely 45 million, down a
third. The company is on
pace to sell even fewer this
year. These tablets dont
wear out, and the new ones
dont have enough additional
features or applications to
entice users to upgrade. Its a
radial tire.
Smartphones are the same
story. The iPhone turned
heads in 2007. Here was a
piece of glass with a com-
puter behind it that you
could tap and flip and pinch.
Think different indeed. Since
then Apple has added bigger
screens, better graphics,
polycarbonate housing, fin-
gerprint sensors, front-facing
cameras, pressure-sensitive
displays and Siri. By last
July, it had cumulatively sold
a billion, often to the same
customers who upgraded
early and often.
Yet sales essentially have
flatlined since 2015. Are
smartphones so good that
they now last three or four
years instead of two? What
would it take to make you up-
grade? Youve probably heard
about the 10th-anniversary
the politicians complicity in a
bribery and influence-peddling
scandal. Corruption charges
had already sent lower-house
speaker Eduardo Cunha, also of
the PMDB, to jail in March.
But the opposition cele-
brated too early. The 76-year-
old Mr. Temer did not resign
as rumors said he would. In-
stead he asserted his inno-
cence and vowed to fight the
allegations.
If he falls, respect for
the constitution is
crucial to the future
of the democracy.
There are credible claims
that the Batista tape was tam-
pered with. Even if it was not,
some of the presidents re-
sponses to Mr. Batistas state-
ments on the recording are
subject to interpretation, at
least in a court of law.
The more immediate ques-
tion, providing he gets a fa-
vorable ruling from the elec-
toral court, is whether Mr.
Temer can survive politically.
To do that, he has to prevail
in the court of public opin-
ion, where the anemic econ-
omy and a barrage of corrup-
tion scandals have worn
down patience with the polit-
ical class.
Mr. Temer is betting that
he can revive growth. But he
has to shrink the state and
rein in a far-too-generous
public-sector pension system.
and their Indian allies. France
won in a rout, but made it up
to us a bit in the Revolution-
ary War. All right, give this
one to Paris.
Sports? No contest. The
Penguins are now on the
verge of their fifth Stanley
Cup. How many Super Bowls
has Paris won?
Whats better than
duck confit? French
fries on the inside
of a sandwich.
When it comes to fashion,
we could be in trouble. Cargo
shorts may not have the same
cachet as Yves St Laurent,
Dior, Chanel and Givenchy,
but at least we can hold a lot
of stuff in our pockets.
The Paris Metro is compre-
hensive and famous for the
beauty of some of its stations.
Pittsburgh has a ridiculous
and expensive three-hole sub-
way that runs under a river salesman.
refresh, the iPhone 8, to be
announced this fall. By all ac-
counts it will be incredible.
Industry wags suggest it will
include the cool features of
todays Samsung Galaxy S8
such as edge-to-edge displays.
But note the S8 sold only five
million in its first month,
against 10 million for the Gal-
axy S4 in 2014.
Maybe the iPhone 8 will
have killer new features. The
website MacRumors has
floated wireless charging and
a camera with three-dimen-
sional infrared sensors to
measure location and depth,
allowing facial recognition,
iris scanning and augmented
reality. Will it be enough to
meet sky-high expectations?
Rumors also suggest an
iPhone 8 could run $1,000.
For many, that iPhone 7 may
look like a gently used radial
tire.
As with PCs, technology
gains continue, but they
show up elsewhere. At the
pace voice platforms are im-
provingwhether its the
Amazon Echo, Google Home,
or Apples new stand-alone
Siri device due to market
soonmaybe we dont even
need smartphones. Maybe
screens are deadin which
case that old Motorola flip
phone will make a comeback.
After all, flying cars dont
need tires, radial or other-
wise.
Mr. Kessler writes on tech-
nology and markets for the
Journal.
Government-employee unions per second in the U.S. suffers an injury needing medical at-
are among the countrys most
powerful special interests.
Plenty of other corporatists,
including some business inter-
ests, also have their hands
out. Rent-seekers are not
about to let Mr. Temer take
away the gravy train without
a fight.
Still, getting rid of Mr. Te-
mer may be easier than de-
railing reform. His coalition in
Congress seems to have held
together, and it will be under
pressure to rally around a
market-friendly successor.
The left knows this too, which
is why it wants to ignore the
constitutional mandate and
hold a direct election for a
new president.
If that were to happen, Mr.
da Silva, who remains a popu-
lar figure with his base, would
likely be a candidate. He has
been indicted for his alleged
role in a corruption scheme
involving the state-owned oil
company Petrobras. If he is
found guilty, he will be barred
from holding public office.
But if he were to win a snap
election to replace Mr. Temer,
any prosecution against him
as president could be carried
out only by the Supreme Fed-
eral Court and would proba-
bly drag on.
That would be a double
gut-punch for a country that
needs to show that it has
graduated from using the rule
of bananalandia to using the
rule of law. It has made great
strides. But this is a crucial
test.
Write to OGrady@wsj.com.
to a casino. Thanks to Uber
and Ford, we are pioneers in
self-driving cars, which one
needs to navigate our gridless
street layout. Advantage:
Paris.
Anyone who has ever been
to Pittsburgh remarks about
the fabulous friendliness of
the people. Parisians are no-
toriously snobby, although I
must say that the two I have
met have been nice. While
folks in the Burgh speak
what to outsiders seems like
a foreign language, to us yin-
zers it is the language of
love.
Sure, France is exquisite
even if it is populated by
cheese-eating surrender
monkeys. But what can com-
pare to living in the land of
the free and home of the
brave?
So, Mr. President, thanks
for looking out for us here in
Pittsburghbut on the whole
were doing quite well al-
ready.
Mr. Weiss is a carpet
Monday, June 5, 2017 | A17
BOOKSHELF | By Edward Kosner
What Could
Go Wrong?
Careful
By Steve Casner
(Riverhead, 326 pages, $26)
G
rowing up in Manhattan in the 1940s and 50s, I
climbed the Palisades across the Hudson, rode be-
tween subway cars, took 15- and 20-mile bike rides
along busy highways, bodysurfed the breakers at Long
Beach in the summers, played hardball on lumpy play-
grounds with my glasses on, swam in pools during polio
season, flicked my switchblade, set off cherry bombs and
had BB guns fired at me. And I never suffered more than a
scuffed knee and a cut lip.
As it turns out, Steve Casner, a NASA psychologist who
has devoted his career to studying why people get into ac-
cidents and how to prevent them, flirted with even more
dangerous things a few decades later, like dangling out of
the bed of his grandfathers pickup. Most of that behavior
wouldnt be tolerated these daysand for the rest there are
bike lanes, batting helmets,
shatterproof lenses, inocula-
tions and endless precautions.
Yet people feel less safe than
before. Being careful today
seems harder than it used to
be, writes Mr. Casner, in his
useful new book, Careful: A
Users Guide to Our Injury-
Prone Minds.
Theres certainly enough to
worry about. Deaths from acci-
dentsavoidable injuries in
safetyspeakare down drasti-
cally from the good old days of
the early 20th century. But the
downward curve flattened out in 1992, Mr.
Casner writes, and then began to rise. This is partly be-
cause smartphones and other driving distractions offset
safety improvements in cars and, inescapably, because peo-
ple are living longer and thus have more opportunities to
get killed in accidents.
That observation is just one of a fascinatingand chill-
ingarray of facts and stats that Mr. Casner marshals to
buttress his case. Did you know that more than one person
tention? Or that some of them are among the more than a
quarter-million Americans who die each year because of
medical errors? Or that injuries caused by washing ma-
chines sent 40,000 people to the ER in 2014.
Mr. Casner is one of those pop writers who tell you what
theyre going to tell you, then tell you, then tell you what
theyve just told you. Still, his repetitious analyses and
guidance are worth reading.
His central point is that human fallibility is a fact of life.
Peoplesmart or dumb, young or old, highly educated or
dropoutscant concentrate on a single task for long before
their attention wanders. Multitasking is a myth: It generally
means doing two things badly at the same time. Remind
yourselfor someoneto do something in a few minutes
and it will be forgotten. Confident that youre watching
your kids frolic in the pool? You werebut now youre
probably thinking of the hot new associate at your law
firm, how your Apple stock is doing, the latest episode of
The Real Housewives of Beverly Hills or the utility slot in
your fantasy-baseball lineup.
Utility workers wrangling high-voltage cables
are as safe as anyone at home. Kitchen knives
send 300,000 people a year to the hospital.
Mr. Casners generalizations are backed up by an array of
studies by ingenious psychologists all over the map. These
invariably show that people are overconfident about their
own capabilities, more open to risk than they imagine, less
cool in a crisis, and prone to error. He distinguishes be-
tween slipsminor distracted errors like absent-mindedly
dropping your sweaty T-shirt in the toilet rather than the
washing machineand errors: like misdiagnosing Lyme
disease as the flu.
And then theres risk homeostasis. Thats the tendency
of people to accelerate their dangerous behavior when new
safety features are introducedsay, by driving even faster
in cars with the latest safety technology. Or the inclination
to use the right tool, a screwdriver, say, for the wrong job:
not to tighten or loosen a screw but to pry open a jammed
lidresulting in a maimed forearm.
So what to do? Mindfulnesseasy to imagine, hard to
sustainis Mr. Casners prescription. People should be con-
stantly aware of their limitations, visualize driving, walk-
ing, working and other situations in advance, and program
their responses to danger. How could this go wrong? is
the question, he says, that should always be at the top of
ones mind. When you reach for that screwdriver to pry
open a lid, visualize the blade . . . snapping in two and the
bottom half of the blade taking flight. Being careful can be
as simple as looking both ways before stepping off the curb
on a one-way street and as complex as long checklists for
pilots and surgeons. If youre watching a child in a pool,
dont even talk to anyone; concentrate on the kid. Remem-
ber that using a cellphone hands-free while driving is as
distracting as holding one to your ear.
It turns out that people are far safer at work than they are
while walking down the street or in their houses. In 2014 Mr.
Casner reports, 333,527 emergency-room visits in the U.S. in-
volved kitchen-knife injuries. Power-line workers wrangling
high-voltage cables are as safe as anyone at home. He tells
the story of a champion Hollywood stunt woman who
knocked herself out colliding with a shelf in her bathroom.
Some of Mr. Casners lessons are common-sensical. For
example, when making a turn at an intersection, always re-
member that a van or truck may be shielding a car about to
pass into your path. But some are counterintuitive: Keep in
mind that most drowning victims dont splash around mak-
ing noise, but simply sink under the surface. When people
switch tasks, it takes the brain nearly 30 seconds to focus
fully on the new one. A third of young men in one survey
admitted to SWDhaving sex while driving. But Mr. Casner,
who flies jets and helicopters, was surprised to learn that
SWF in single- and twin-engine private planes is more
prevalent than he imagined, with fewer fatal consequences
than one might think.
So life can be a crapshoot. The players who know how
the odds can be stacked against them and stay focused
have the best chance to keep on rolling.
Mr. Kosner is the former editor of Newsweek, New York,
Esquire and the New York Daily News.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A18 | Monday, June 5, 2017 * * THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

Jihad Returns to Britain Hard Times Come to Much of Rural America

S
aturdays terror attack in the heart of cult and often embarrassing conversations with Businesses in rural towns are starv- nues, tax receipts and businesses.
London, Britains third murderous assault the Muslim community, and she is right. This has ing for equal access to capital that has Thats the legacy of the Reagan Revo-
benefited urban areas for decades. lution that goes unspoken in com-
in 72 days, poses a difficult choice for free to include an end to political coddling of so-
Scarcity of capital for small businesses mentaries on rural distress and the
societies: Do more to contain called soft Islamist groups and has accelerated the crisis described in rise in rural poverty.
this internal Islamist insur- The U.K. is waking up imams who treat candor about Rural America Is the New Inner City DAVID SCHANOES
gency now, or risk a political to the ideological nature the Islamist threat as anti- (page one, May 27) by stunting the New York
backlash that will result in Muslim or refuse to identify growth of young businesses. Tradition-
even more draconian limits on of the Islamist threat. radicals in their midst. ally, a rural business owner or enter- Rural America has endured poor so-
civil liberties. The one misstep in an oth- prising farmer who needed assistance cioeconomic conditions for over a cen-
Islamic State claimed re- erwise clear-eyed speech is to purchase farm or manufacturing tury. Fifty years ago the Presidents
sponsibility late Sunday, and the operation that Mrs. Mays suggestion to outsource surveillance equipment or National Ad-
killed seven and wounded 48 bore the hallmarks of jihadist online speech to social-media plat- even ware- visory Com-
of recent jihadist atrocities. The London Bridge forms. This line is popular among Western lead- house space mission on
would go to Rural Poverty
area and nearby Borough Market are packed ers because it provides an excuse for their failure
the commu- published
with bars and restaurants popular with tourists to defend the need for Big Data surveillance and nity bank or The People
and young people. The three alleged perpetra- threat analysis following Edward Snowdens Na- farm credit Left Behind.
tors rammed a van into pedestrians, then began tional Security Agency thefts. office and ac- In the report,
stabbing people before police shot them. Silicon Valley companies such as Facebook quire a loan. it noted some
Prime Minister Theresa May said Saturdays and Google bear some of the blame because

GETTY IMAGES
Today there
attack wasnt directly linked to the suicide they joined the fashionable campaign against are far fewer
bombing committed by Salman Abedi at a pop the NSAs metadata collection. And by all means community
concert in Manchester last month. But the three Facebook, Twitter and other social media need banks, and
attacks in succession show why governments to police their sites against the promotion of those remain-
must target the threat at its roots, in self-isolat- violence and jihad. If they refuse, politicians ing lenders have higher credit and li-
quidity standards. Federal lending
ing Muslim communities that reject mainstream will eventually do it for them because Western standards have made loans cost-pro-
values and create homegrown or Islamic State- publics will not allow mass murder to become hibitive for many entrepreneurs. Fur-
inspired radicals like Abedi. a new normal. thermore, big banks have decreased
On this front, Mrs. May is well ahead of many But thats all the more reason for govern- their loan volumes to small businesses,
of her European counterparts. The Prime Minis- ments to revive the use of Big Data and surveil- creating a widening lending gap.
ter in a speech Sunday morning outlined a new lance to prevent attacks to avoid even worse in- AB BASU
counterterror strategy that puts ideology and trusions on civil liberties. As attacks continue, Rural Jobs Coalition
Muslim integration at the forefront. The trio of so will political pressure for measures such as Occoquan, Va.
recent attacks in Britain, she said, were bound quarantines and mass preventive arrests of peo-
together by the single evil ideology of Islamist ple on terror watch lists. The farm crisis of the 1980s was
one of the consequences of the dou-
extremism. On that score the U.S. is no exception. Presi-
ble-dip recession during the Reagan
Mrs. May went on to call for a battle of ideas dent Trump responded to the London attack in administration. Farmers had piled on
against Islamism and tough love for British Mus- a typically heavy-handed way with a tweet urg- debt to make heavy capital invest-
lims who have failed to confront radicals in their ing the courts to restore his travel ban. But the ments in the 1970s to take advantage
mosques and community centers. Said the Prime anti-antiterror left needs to realize that hostility of increased agricultural-product
Minister: We need to live our lives not in a se- to surveillance and honest debate about jihad prices, a result of OPEC price rises.
ries of separated, segregated communities, but will make such bans inevitable if attacks con- Recessions, price busts, bankruptcies
as one truly United Kingdom. tinueand Mr. Trump wont be the only politi- and foreclosures followed, along with
Mrs. May suggested this would involve diffi- cian pushing them. the devastation of small- and middle-
sized rural industries. With this came
the withering away of social networks,
A Mosque for New Jersey as schools, hospitals and stores were
closed as a result of declining reve-
14 million ru-
ral residents
were classi-
fied as being
in poverty
slightly over 25% of all rural residents.
In contrast, central cities were esti-
mated to have 10 million people in
povertyabout 17% of central-city
residents. The idea that local govern-
ment, churches and community
groups provided a viable social safety
net is great theory not supported with
facts. At best, these pick up a percent-
age of people in need. Life can be
great growing up on a farm or living
in a rural community away from horns
and traffic and people. But there are
costs. Services are always less avail-
able, the most important being health
care.
DALE L. STANSBURY
Los Gatos, Calif.
The once-dominant rural culture of
discipline, self-reliance and hard work
is collapsing under the corrosive influ-
ence of Hollywood and secular liberal-
ism.
LINDA NICOLOSI
Encino, Calif.

E
ach year the State Department rates gious outfits, from the American Association
other countries on respect for religious of Jewish Lawyers and Jurists to the Becket
liberty, but Americans also sometimes Fund for Religious Liberty to the National
need reminders. So it was Association of Evangelicals,
So Europe Is Now on Its Own? Its About Time
good to see the Justice De- Religious liberty is the International Society for German Chancellor Angela more money to their joint national
partment last week announce Krishna Consciousness and Merkels Lament (Review & Outlook, defense, but that President Trump
a settlement that will allow a
for every American, the Sikh Coalition. All rec- May 30) that we Europeans must re- failed to personally endorse Article 5
mosque to go up in a New including Muslims. ognize that a threat against ally take our destiny into our own (mutual assistance if individually at-
hands raises the question as to why tacked) in his Brussels speech. Our
Jersey town that had unfairly one faith is a threat against
Europe delegated the determination NATO allies have reasons now to
tried to stop it. all. In its amicus brief, the of its destiny to someone else in the doubt our seriousness to their com-
The settlement comes after five years, 39 Becket Fund noted that Congress passed the first place. If President Trumps re- mon defense. Ms. Merkel clearly said:
public hearings and two suitsone by the Is- Religious Land Use and Institutionalized luctance to follow in his predeces- We Europeans must really take our
lamic Society of Basking Ridge and the other Persons Act in 2000 precisely to address the sors footsteps and bless the Paris cli- destiny into our own hands.
by the Justice Department. At the heart of the kind of unequal treatment the mosque faced mate accord infuriated Europeans We cannot expect our allies to
dispute was the towns bid to impose parking in New Jersey. and prompted a renewed sense of re- prod Russia by arming Ukraine as
requirements on the mosque that it didnt re- The good news is that free exercise has pre- sponsibility for their fate, is that so you continually urge, if they doubt
quire for Christian churches. In December a vailed. At a time when the United States is bad? Germany can step up now and we might not back them if push
federal court ruled against the town. pushing Middle Eastern nations to show more start covering more of the cost of de- comes to shove. It is all a matter of
Its telling that in bringing its suit the Is- respect for the minority religions within their fending Europe or it can cuddle up to trust.
Vladimir Putin, supposedly Mr. FELIPE PROPPER DE CALLEJON
lamic Society of Basking Ridge enjoyed the midst, its also a welcome insistence that we
Trumps BFF, and hope that a nonag- New York
backing of an extraordinary range of reli- practice at home what we preach abroad. gression pact works out better than
the one in 1939. Chancellor Merkels comment that

How to Make Medicine More Expensive President Trumps disorderly be-

havior led to Ms. Merkels epiphany
we Europeans must take really take
our destiny in our own hands

R
regarding Europes responsibility for doesnt have to mean a breakdown of
egistering outrage over the high price neric Metformin? $2.31 a month. Europes fate. Its about time. World relations between Europeans and the
of medicine is a national pastime, espe- One FDA analysis in 2005 revealed that pa- War II ended seven decades ago, and US. On the contrary, when you con-
cially for politicians whose solution is tients pay 94% of the branded price when a the Cold War ended nearly three de- sider she made them to a crowd in a
always handing themselves medicine has one generic cades ago. beer tent in Bavaria during her re-
more power. The latest exam- State politicians competitor. That falls to about THOMAS BELL election campaign, it seems more
Atlanta likely she has listened to President
ples come from Nevada and know nothing 20% of the price when eight
Trump and is starting to motivate
Maryland, where legislators companies are angling for The real lament, not just the Ger- the German people to contribute
are passing bills to punish about drug prices. market share. (See the nearby man chancellors, but all leaders of more to their defense.
drugmakers for no benefit to chart.) Yet a drug like insulin European NATO countries, isnt the CARL BECHGAARD
patients. is expensive to produce and fact of being asked to contribute Eastham, Mass.
On Friday Nevada Republican Governor profit margins are low, so companies invest in
Brian Sandoval vetoed a bill on diabetes medi- areas with higher returns. Proving similarity to
cation. The bill swept through the legislature a branded drug is another challenge for more
and may make a comeback, so its worth exam- complex treatments, particularly alternatives
VOA Should Come Clean on Mandarin Service
ining the details. to things like the EpiPen allergy shot that also As a former director of the Voice equally strange that five members of
of America, I was surprised at the the Mandarin service have been sus-
The state would have decided what counts require deploying a device.
current VOA directors May 26 letter pended, pending an investigation.
as an essential diabetes medicine, including Yet instead of noticing such disincentives, upbraiding the performance of her My Feb. 18 article on VOA men-
insulin and others. Manufacturers would be re- state governments are now attacking the ge- Mandarin language service chief. tions a particularly egregious viola-
quired to disclose the cost of production and neric industry. In May, Marylands Republican Amanda Bennett said that Sasha tion of journalistic standards at its
marketing, as well as profits and more. That in- Governor Larry Hogan allowed a bill to become Gong didnt uphold the journalistic Ukrainian service from last October.
formation is proprietary and hard to calculate, law without his signature that would unleash principles . . . [that] apply universally There have been others, as amply
as the cost of medicines is influenced by re- the state Attorney General to investigate any ge- to all VOA services. documented at BBG Watch. None of
search and development over many years. neric drugmaker responsible for an unconscio- This accusation was made in re- these reported instances has resulted
Manufacturers would nable price increase. spect to a live VOA interview with ex- in personnel suspensions or investi-
have to inform the state Competition and Drug Prices Remember that the left patriate Chinese billionaire business- gations. Why the draconian action re-
90 days in advance of Average relative price per dose and the number of defines as unconsciona- man Guo Wengui who had some garding the five Mandarin service
explosive revelations to make on how members?
any price increase, manufacturers, 1999-2004 ble paying money for
Chinese businesses are suborned into Any investigation ought also to go
which is nothing but a $100 any health-care product supporting the Chinese governments to VOAs management to make sure
heads up to the folks 90 or service. spying on its own citizens. In my day, these questions are adequately an-
running the public 80
The assault is espe- such an interview would have been swered.
shaming campaign. 70
cially bizarre given that considered a coup. What went ROBERT R. REILLY
Some purchasers would generic products fill wrong? Vienna, Va.
60
stockpile meds before nearly 90% of all pre- As far as I am aware, no one has
50 raised any journalistic concerns re-
the price ticks up, which scriptions but account
could lead to shortages. 40 for only 27% of total garding the content of the interview. Pepper ...
The bill requires new 30 drug costs. State and Nor does it appear that the broadcast
20 took place without permission, as it
And Salt
disclosures for pharma- federal programs are
was monitored live by several senior THE WALL STREET JOURNAL
ceutical representa- 10 among the largest pur-
members of VOA management. None-
tives, an industry al- 0 chasers of generic theless, the broadcast was abruptly
ready regulated by the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 drugs, and in 2015 ge- terminated at an hour and 16 minutes
Food and Drug Adminis- Source: FDA THE WALL STREET JOURNAL. nerics saved more than into what was to be a three-hour in-
tration. $32 billion in Medicaid terview. What must the Chinese audi-
In his veto message, Mr. Sandoval rightly alone. Generic drugs saved Maryland $3.7 bil- ence have thought of this?
said the bill fails to account for market dynam- lion in 2015. In my 11 years of experience at
ics that are inextricably linked to health care More than a dozen states have a drug- VOA, I am unaware of anything like
delivery and access to prescription drugs. pricing bill in the hopper. The good news is this having happened before. It is
If Nevadas Democrats really want to lower that FDA Commissioner Scott Gottlieb is pre-
the price of medication, they should support paring a plan to drive more generic innova- Letters intended for publication should
more competition from generic alternatives. tion and competition, which may include be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
Take Glucophage, which helps regulate a dia- streamlining a duplicative approval process, or emailed to wsj.ltrs@wsj.com. Please
betics blood sugar. Glucophage costs about $43 among other improvements. That would make include your city and state. All letters
a month out of pocket for a Medicare D patient, medicine more available and affordable for are subject to editing, and unpublished
according to data from the Association for Ac- patients, unlike the political ploys rolling out letters can be neither acknowledged nor Lets do something
returned.
cessible Medicines. A prescription for the ge- of state capitals. completely crazy this time.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
The Diminishing Returns of a College Degree
By Richard Vedder
And Justin Strehle
I
n the 375 years between 1636,
when Harvard College was
founded, and 2011, college en-
rollments in the United States
rose almost continuously,
rarely undergoing even a temporary
decline. When the American Revolu-
tion began in 1775, only 721 stu-
dents attended the nine colonial
colleges. By 2010 enrollments had
surpassed 20 million.
In the mid-1970s, far less
than 1% of taxi drivers
were graduates. By 2010
more than 15% were.
Yet from 2011 to 2016, the Na-
tional Student Clearinghouse re-
ports, total higher education en-
rollments declined every fall,
falling to 19 million from 20.6 mil-
lion. Although the declines were
concentrated in community col-
leges and for-profit institutions,
even many traditional four-year
schools saw previously steady en-
rollment growth come to an end.
Many smaller schools have even
missed their annual enrollment
goals.
Why is this happening? Some
point to demographic influences,
such as a drop in birth rates during
the 1990s. Others cite increases in
job opportunities, which lured col-
lege-age Americans away from the
academy in the aftermath of the
Great Recession. But two longer-
term trends are at work: The cost
Cmon, LeBron, Your Emmett Till Analogy Is Simply Cavalier
By Jason Whitlock
O
n the eve of the NBA Finals,
vandals defaced basketball
star LeBron Jamess $20 mil-
lion second home in Los Angeles.
According to the police report, the
perpetrator scrawled the N-word
across a gate.
When asked to comment last
Wednesday, Mr. James responded
like a young politician mentored by
Bill Clinton, an expert at giving
speeches to elevate his stature with
black voters. Mr. James, who cam-
paigned for Hillary Clinton in the
2016 presidential election, measured
his words, tone and posture in a way
to convince working-class and poor
African-Americans that he shared
their pain.
Hate, in America, especially for
an African-American, is living every
day, he said. Even though its con-
cealed most of the time . . . its alive
every single day. And I think back to
Emmett Tills mom, actually. Its
kind of one of the first things I
thought of. And the reason that she
had an open casket is because she
wanted to show the world what her
Syrias Chemical Weapons Might Start a New Six Day War
By Asher Orkaby
W
hen Syrian forces launched
a chemical attack on the
town of Khan Sheikhoun
two months ago, no one was watch-
ing more closely than Israels mili-
tary elite. Of all the existential
threats their country fears, chemical
weapons rank high on the list. In
1967 Israeli fear of a chemical attack
helped spark the Six Day War, the
most transformative conflict in the
modern history of the Middle East.
Continued use of chemical weapons
in Syria poses a similar threat to Is-
raeli securityand may foreshadow
another regional war.
The first country to use chemical
weapons in the Middle East was
Egypt. During the 1960s, President
Gamal Abdel Nasser deployed poi-
son-gas bombs during the North Ye-
men Civil War. Unknown to the
Egyptians, Israel had obtained a
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of college attendance is rising while
the financial benefits of a degree
are falling.
The evidence on rising costs is
well established: From 2000 to 2016,
the tuition-and-fees component of
the Consumer Price Index rose 3.54%
annually (74.5% over the entire pe-
riod), adjusting for overall inflation.
With sluggish business investment, a
slowdown in income growth has ag-
gravated the rising burden of paying
for higher education. American fami-
lies have taken on more than $1.3
trillion in student-loan debtmore
than what they borrow with credit
cards or to buy cars.
Less well known is that the earn-
ings advantage associated with a
bachelors degree compared with a
high school diploma is no longer
growing like it once did. Census
data show that the average annual
earnings differential between high
school and four-year college gradu-
ates rose sharply, to $32,900 in
2000 (expressed in 2015 dollars)
from $19,776 in 1975only to fall to
$29,867 by 2015. In the late 20th
century rising higher-education
costs were offset by the increasing
financial benefits associated with a
bachelors degree. Since 2000 those
benefits have declined, while costs
have continued to rise.
Rising costs and declining bene-
fits mean the rate of return on a col-
lege investment is starting to fall for
many Americans. Some observers
have begun asking whether it might
not be better for more students to
forgo college in favor of less expen-
sive postsecondary training in voca-
tions like welding and plumbing. The
New York Federal Reserve Bank says
about 40% of recent college gradu-
ates are underemployed, often for
son went through as far as the hate
crime, and being black in America.
No matter how much money you
have, no matter how famous you are,
no matter how many people admire
you, being black in America is tough.
And weve got a long way to go for
us as a society, and for us as Afri-
can-Americans, until we feel equal in
America.
The progressive media hailed Mr.
Jamess words as the most powerful,
uncomfortably authentic and elo-
quent ones spoken by an American
athlete since Muhammad Ali re-
torted: I aint got no quarrel with
them Viet Cong.
As a member of the Nation of Is-
lam and a protg of Malcolm X, Ali
would never have been so naive as
to analogize the pain of spray-paint
graffiti to the grief associated with
the brutal murder of a 14-year-old
boy. Only a coddled multimillionaire
celebrity pitchman could be that
foolish. And only a journalism indus-
try addicted to social-media click-
bait could sell Mr. Jamess poorly
crafted victimology as genuine em-
pathy.
In 1955 two white men kidnapped
front-row seat to study their mili-
tary capabilities.
The conflict involved the Yemen
Arab Republic, founded in 1962 after
a coup dtat deposed the countrys
religious monarch, Imam Muham-
mad al-Badr. Egypt took the republi-
can side, sending mechanized and
heavily armed battalions to aid the
revolutionaries.
The monarchist northern tribal
militias, aided by a cadre of British
and French mercenaries, took shel-
ter in the countrys mountainous
highlands. The problem was finding
a way to resupply their position. Af-
ter concluding that an air resupply
was vital, the mercenaries began
searching for an ally willing to or-
chestrate airlifts into hostile and
unfamiliar territory. In the end they
turned to Israel, the only country
with something substantial to gain
from an extended guerrilla war
against Egypt.
Robert Thomson
Chief Executive Officer, News Corp
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Chief Executive Officer and Publisher
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Professional Information Business:
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OPINION
a long time. They sometimes resort
to taking jobs as Uber drivers or
baristas. With some inexpensive vo-
cational training, they could easily
get jobs that pay much better.
To be sure, the payoff from a
college education varies sharply de-
pending on school and major. U.S.
Department of Education data sug-
gests recent attendees of Stanford
University earn on average far
more than twice as much as those
and bludgeoned Emmett Till before
tossing his body in a creek. Till had
been visiting his uncle in Money,
Miss., a tiny town populated mostly
by cotton sharecroppers. The vic-
tims mother, Mamie Till, chose to
have an open-casket funeral so the
The Cleveland star
likens graffiti vandalism
to the brutal murder
of a 14-year-old boy.
American press could expose the
brutality of the killers and of Missis-
sippis segregation. An all-white jury
acquitted Tills murderers, who then
publicly confessed.
The locals rallied around the
men who killed Emmett Till, says Mr. Jamess sharing of his tough
Devery Anderson, who wrote a 2015
book on the killing. There were col-
lection jars in all the stores to pay
for the murderers lawyers. When
the press started using the Till case
to argue against segregation, the
people in the state rallied around
Between 1964 and 1966, the Is-
raeli Air Force flew 14 missions to
Yemen, airlifting vital weapons and
supplies to beleaguered tribal out-
posts. Although the identity of the
supplier was a closely guarded se-
cret, these airlifts constituted an
important physical and psychologi-
cal lift for the tribal militias.
In exchange, Israel received well-
informed intelligence from its own
pilots and British mercenaries on
the ground. The Israelis main con-
tact was Neil McLean, a former Spe-
cial Air Service soldier and member
of the British Parliament. McLean
passed to Israel details of Egypts
military activity, even samples of its
chemical weapons.
The Egyptian Air Force had been
dropping the poison-gas bombs, tar-
geting militias hiding in a network
of caves, with increasing frequency
and precision. This news alarmed
Israelis, many of whom had lost
family and friends to Hitlers poi-
son-gas chambers only two decades
earlier. They were haunted by the
prospect of a similar fate befalling
them in a gas attack on Tel Aviv or
another Israeli city. A sense of
Notable & Quotable: The $600 Billion Man
From James Freemans Best of the
Web, WSJ.com, May 31:
As if taxes havent been high
enough, the U.S. Government also
forced Americans to spend an eye-
watering $1.9 trillion in 2016 just to
comply with federal regulations.
Thats according to the latest annual
10,000 Commandments report re-
leased today by Wayne Crews of the
Competitive Enterprise Institute. . . .
According to the Crews annual
scorecards, the yearly cost of federal
regulation soared by more than $700
DAVID GOTHARD
attending Northern Kentucky Uni-
versity ($86,000 vs. $36,000). Elec-
trical engineers typically earn twice
as much as psychology majors. No
wonder elite students flock to
schools like Stanford and demand
for graduates with engineering de-
grees remains robust, while many
state universities, community col-
leges and smaller liberal-arts
schools struggle to attract stu-
dents.
the killers because they saw it as
protecting segregation and their way
of life.
The Till family was the epitome
of the working poor. Emmett Tills
uncle earned about $1,200 a year as
a sharecropper. Mamie Till lived and
worked in the Chicago area and
earned $3,900 a year (about $35,000
now). They did not own a gated
home in Los Angeles. They employed
no staff capable of cleaning a fence
within hours.
Mr. James, whose net worth is es-
timated at $500 million, had a repug-
nant and racist slur spray-painted on
a home where he wasnt living by an
unknown criminal. The slur was de-
leted like a bad tweet. Police are con-
ducting a legitimate investigation.
Mr. Jamess open casket discussion
of the graffiti so far has not included
releasing a picture of the vandalism.
ing black pain publicly and
African-American plight has included
few details beyond that his staff re-
moved a slur from a gate.
Racism is real. It has real damag-
ing effects, mostly on the poor.
Wealthy black elites are inconve-
nienced by racism but rarely denied
looming existential threat pervaded
Israeli society, down to the local
school district. In one emergency
meeting in May 1967, teachers de-
bated security protocols. In the
event of an air-raid siren, should
students be ushered into the base-
ment bunkers? Or would climbing to
the rooftops be better for escaping
poison gas?
In 1967, fear of a gas
attack convinced Israel
it had to destroy Egypts
air force pre-emptively.
The fear of a chemical attack un-
doubtedly factored into Israels de-
cision to attack Egypts air force
pre-emptively on June 5, 1967. Over
five hours Israel destroyed 300
Egyptian planes and disabled 18 air-
fields, eliminating the short-term
threat of chemical warfare. But the
long-term danger has remained.
There is a clear parallel to the
current conflict in Syria. What made
billion in nominal dollars from 2008,
the last full year of the Bush Admin-
istration, through Mr. Obamas final
full year of 2016. Adjusting for infla-
tion, you can call Mr. Obama the
$600 Billion Man. . . .
Some readers will argue that the
$600 billion figure wildly understates
the costs inflicted on the U.S. economy
by Mr. Obama given increases in on-
the-books federal spending and the
creation of future federal spending
commitments. But on that score he
must share the blame. Its not easy to
precisely assign responsibility between
Monday, June 5, 2017 | A19
The size of the college-earnings
advantage also varies with race and
gender. In recent years, male col-
lege graduates earning power has
decreased significantly, as it has
for whites and Asians. Not so for
women, Hispanics and blacks, for
whom the financial payoff to a col-
lege education has continued to
rise. College graduates traditionally
earn more than high school gradu-
ates in part because their degrees
act as signaling devices in the job
market. To employers, a candidate
with a bachelors degree has al-
ways seemed brighter and more
disciplined, ambitious and reliable
than someone with only a high
school diploma. But how does
knowing a lot about, say, anthro-
pology, make one a more produc-
tive worker?
As the proportion of adult Ameri-
cans with college degrees grows be-
yond one-third, being a college grad-
uate no longer necessarily denotes
exceptional vocational promise. The
bachelors degree is not the reliable
signaling device it once was.
Nowadays, because of underem-
ployment among college graduates,
restaurant owners can hire bartend-
ers who have college degrees. Cre-
dential inflation is at work. In the
mid-1970s, far less than 1% of taxi
drivers were college graduates; by
2010 more than 15% were. Is it pos-
sible that by 2030 a masters de-
gree in janitorial science could be a
prerequisite for a job sweeping
floors?
Mr. Vedder is director of the
Center for College Affordability and
Productivity and teaches at Ohio
University, where Mr. Strehle stud-
ies economics.
opportunities or seriously harmed.
Mississippis love of white suprem-
acy irreparably devastated Mamie
Till. Mr. James should know the dif-
ference. If he wanted to start a dis-
cussion, one about how to help the
poor could make a difference. But
his social circle includes prominent
politicianspeople skilled in manip-
ulating the plight of the poor for
brand enhancement.
Google, Facebook, Twitter, Snap-
chat and Instagram, the social-media
titans of Silicon Valley and San
Francisco, have turned athletes and
celebrities into 24-hour-a-day per-
formers. Their lives are now a con-
stant popularity contest, and
retweets and likes are the poll num-
bers.
It should be no surprise that Le-
Bron James is channeling Bill Clin-
ton, who perfected the art of feel-
intensifying that pain with his poli-
cies. As long as Mr. James courts
popularity, he will never equal Mu-
hammad Ali.
Mr. Whitlock is a co-host of
Speak for Yourself on Fox Sports 1.
the 1960s crisis in Yemen so danger-
ous was that the international com-
munity did not respond to Egypts
use of chemical weapons. The Ye-
meni civil war was waved off as
merely an intra-Arab conflict. With-
out visible international assurances
that chemical warfare would not be
tolerated, Israel in 1967 felt com-
pelled to eliminate the threat before
it arrived.
In the barrage of Tomahawk mis-
siles President Trump launched
against Syria in April, the U.S. pro-
vided some response to the latest
chemical attack. Failure to follow up
this show of force with collective in-
ternational actionmaking clear to
Israel that further chemical warfare
is off the tablemay push the Mid-
dle East toward another destructive
regional war.
Mr. Orkaby, a research fellow at
Harvards Near Eastern Languages
and Civilizations Department, is the
author of Beyond the Arab Cold
War: The International History of
the Yemen Civil War, 1962-68, out
next month from Oxford University
Press.
the executive branch and the Congress
for each dollar of the historic increase
in federal outlays that occurred early
in the Obama presidency or the rela-
tive moderation that occurred after
Republicans took control of the House
in 2010.
In contrast, the executive branch
is largely responsible for the costs of
regulation. Yes, a Democratic Con-
gress had to . . . enact laws like Dodd-
Frank and ObamaCare . . ., but the
regulatory agencies have enjoyed
broad discretion in deciding just how
heavy those burdens will be.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A20 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
BUSINESS & FINANCE
2017 Dow Jones & Company. All Rights Reserved.
Last Week: S&P 2439.07 0.96%
D.C. Regulatory Jobs Go Begging
Just two commissioners
remain at the FTC;
ranks are depleted
across Washington
BY BRENT KENDALL
WASHINGTONWhen the
Federal Trade Commission lev-
eled deceptive-advertising al-
legations against DirecTV in
2015, all five FTC commission-
ers were on the job. There
were four when Walgreens
Insurers
Struggle
To Keep
Truckin
BY LESLIE SCISM
Insurers have a message for
Americas truckers: Let us
monitor your every move or
we might take away your cov-
erage.
Behind the push are surging
losses for many insurance
companies as an improved
economy has led to more-
crowded roads and more acci-
dents. Meanwhile, smart-
phones have proliferated,
increasing distracted driving.
Last year, the commercial
auto-insurance industry lost
an estimated $716 million be-
fore taxes on policies, as costs
totaled nearly $112 for every
$100 of premium they col-
lected, according to research-
ers at investment-management
firm Conning Inc.
The business lines under-
writing results have been de-
teriorating since 2011, and are
at their worst level since 2001,
according to data collected
from insurers by ratings firm
A.M. Best.
To keep losses from repeat-
ing, insurers are increasing
premiums across much of a
business that generated $28
billion in premiums last year.
Increases have ranged from
low-single-digit percentages to
30% a year, companies and
brokers say. Some insurers
have even exited certain types
of coverage altogether, includ-
ing American International
Group Inc.
Insurers are more likely to
renew coverage, however, if a
customer adopts sometimes-
invasive technology. As a re-
sult, a wide range of commer-
cial operators are installing
cameras in the cabs of their
vehicles, and cellphone appli-
cations to block use while a
Please see TRUCKS page B2
KEYWORDS | By Christopher Mims
More Workers Have
Out-of-Office Experience
When Dell
recently sur-
veyed its
110,000 em-
ployees about
their work
habits, it discovered some-
thing surprising: While only
17% of Dells employees were
formally authorized to work
wherever they prefer, 58%
were already working re-
motely at least one day a
week. That is good news,
says Steve Price, chief hu-
man-resources officer at
Dell. In 2013, the company
had said it wanted half its
employees to work remotely
for at least part of their
weekby 2020.
In contrast, International
Business Machines recently
gave thousands of its home-
based employees a choice:
Start working at one of
IBMs regional offices or take
a hike. IBM once boasted
that 40% of its employees
work outside traditional of-
fices. It has its own in-house
tools to facilitate remote
work, and it regularly pro-
TECHNOLOGY: SPACEX RECYCLES CAPSULE IN STAR TURN B4
S&P FIN g 0.76% S&P IT 1.34%
Boots Alliance Inc. and Rite
Aid Corp. began trying to win
antitrust clearance for a pro-
posed merger later that year.
And when the FTC sued Qual-
comm Inc. early this year,
there were three.
Now just two commission-
ers remain. It is a predicament
never before seen in the
agencys 102-year history, one
making life more complicated
for these companies and oth-
ers with delicate business be-
fore the FTC.
Similar stories are unfold-
The Chinese companys best-known investments include League of Legends maker Riot Games. A League competition last month.
Tencent Is Big Coin in Silicon Valley
BY DAN STRUMPF
HONG KONGIn its quest
to expand its global reach,
Tencent Holdings Ltd. has
quietly become Chinas top
corporate investor in Silicon
Valley, pouring money into ev-
erything from electric cars to
moonshot ventures such as
space tourism and asteroid
mining.
Tencents best-known in-
vestments are gaming compa-
nies, including Clash of
Clans maker Supercell Oy of
Finland and League of Leg-
ends maker Riot Games Inc.
But the internet giant hasnt
stopped there.
People close to Tencent,
Chinas most valuable listed
company with a market capi-
talization of $328 billion, say
the approach reflects the com-
panys desire to remain
abreast of even the most far-
fetched ideas and products out
of Silicon Valleyand its fear
of missing out on the next big
motes telework to its clients.
Other companies that have
reversed course on remote
work include Yahoo, Bank of
America and Aetna.
Despite these moves by
big companies, data indi-
cates that the remote-work
trend in the U.S. labor force
is inexorable, aided by ever-
better tools for getting work
done anywhere. Surveys
done by Gallup indicate that
in 2016, the proportion of
Americans who did some or
all of their work from home
was 43%, up from 39% in
2012. Over the same period,
the proportion who only
work remotely went to 20%
from 15%. Amazon.com,
American Express, United-
Health Group, and Sales-
force.com allow employees
to work remotely at least
some of the time.
IBM has said it hasnt
found remote work saves
money. It also said the shift
away from remote work isnt
aimed at cutting costs
though inevitably some em-
Please see MIMS page B4
THE WALL STREET JOURNAL. Monday, June 5, 2017 | B1
DJ TRANS 1.69% WSJ $ IDX g 0.63% LIBOR 3M 1.223 NIKKEI 20177.28 2.49% See more at WSJMarkets.com
GM Meets
Activist in
ing across official Washington, DirecTV, Walgreens, Rite mittee on May 25. The nomi-
as the unexpected election vic-
tory by President Donald
Trump and a slow transition
Aid and Qualcomm all declined
to comment about the situa-
tion at the FTC.
nations must be reported out
of the committee and con-
firmed by the Senate.
Face-Off
process added to the usual
disruption triggered when
power changes hands. While
The Federal Energy Regula-
tory Commission has lacked a
quorum since February, be-
The Commodity Futures
Trading Commission also is
operating with depleted ranks,
Over Stock
some of the positions were un- cause its rules require at least having slipped to two mem- BY MIKE COLIAS
filled even before Mr. Trump three commissioners, and it bers in February when a com-
took office, left open by tradi- has only two. The commission missioner left. The effect has General Motors Co. Chief
tion for the next president to cant hold its monthly meet- been to sideline for now most Executive Mary Barra faces
fill, they could remain empty ings or vote on matters like of the plans of its acting Re- shareholders this week, under
for more months, making 2017 approving new pipelines. Mr. publican chairman, J. Christo- pressure from a hedge-fund in-
a year of prolonged uncer- Trump announced two FERC pher Giancarlo, who wants to vestor and fresh scrutiny fol-
tainty for businesses eager for nominees last month, and they ease rules adopted after the fi- lowing the ouster of her coun-
clarity from regulators. appeared before a Senate com- Please see JOBS page B2 terpart at a crosstown rival.
Shareholders have generally
been patient with GMs 55-
year-old boss even as the stock
trades near the $33 initial pub-
lic offering price set in 2010.
Ms. Barra emerged victorious
in a standoff two years ago
against a group of investors
demanding share buybacks,
and she now opposes a new
proposal from Greenlight Cap-
itals David Einhorn to split
GMs shares into two classes.
GM investors will
vote Tuesday on Greenlights
proposal to divide GM stock
into a security that pays divi-
dends and a capital-apprecia-
tion stock that would entitle
holders to all additional earn-
ings. The idea has garnered
little support from other in-
vestors, and follows a string of
record profits, stock buybacks
and consistent dividends.
I trust Mary Barra and we
back her, said Robert Olstein,
JASON LEE/REUTERS
chairman of the Olstein Capi-
tal Management, a value-ori-
ented investment firm that
owns about 265,000 GM
shares. Even so, Mr. Olstein
said he is open to more-drastic
steps to unlock GMs value,
though he doesnt think Mr.
Einhorns plan is the right one.
Mr. Einhorns strategy has
already been rejected by the
home with its ubiquitous board, but will be debated in a
Start Me Up WeChat appwhich hasnt GM annual meeting taking
Tencent is the largest Chinese corporate investor in the U.S tech sector. gained much traction overseas place about two weeks after
amid competition from the the ouster of Ford Motor Co.
Largest investors in U.S. tech companies, by number of companies* likes of Facebook Inc. CEO Mark Fields. Like Ms.
0 50 100 150 200 250 300 The WeChat social-media Barra, Mr. Fields led the com-
Google platform boasted 938 million pany during an era of stock-
Intel monthly active users in the price malaiseTesla Inc., an
Salesforce first quarter, 23% more than a electric-vehicle startup selling
Comcast year earlier. a fraction of Detroits volumes,
Qualcomm If you want to be a top-10 passed both companies in
Samsung corporation on a global scale market valuation this year.
In-Q-Tel and Tencent is already a top Mr. Einhorn has made com-
Bloomberg Beta 10-type of corporationI dont ments skeptical of Tesla, say-
GE think there is any aspect of ing he shorts the stock be-
Cisco technology that you should cause he believes its value is
Verizon Other 5 Chinese investors leave behind, said Sinovation overrated. Tesla officials
Venturess Chris Evdemon, of couldnt immediately be
Top 6 Chinese
investors Tencents U.S. approach. Mr. reached for comment.
Evdemon is a partner at the Meanwhile, Mr. Einhorn ar-
Tencent
*From 2011 to April 2017 venture-capital firm, which has gues GM is underappreciated,
Source: CB Insights THE WALL STREET JOURNAL. made investments alongside and says dividing shares
Tencent. would attract more interest
thing. into even more outside-the- Tencents top U.S. executive, from both value and growth-
While several Chinese firms box developments in Silicon David Wallerstein, said the ac- hungry investors.
have jumped into hot areas Valley, people familiar with the tive U.S. investing presence is GM disagrees, saying the div-
such as artificial intelligence company said. aimed at finding companies idend shares could weigh down
and driverless vehicles, Ten- The strategy underscores tackling big-picture problems. the company with future pay-
cent hopes an active invest- Tencents broader ambitions I deliberately seek to push ment obligations and would risk
ment arm will offer a window after rising to dominance at Please see FUNDS page B4 its investment-grade rating.
INSIDE
NFL TAKES
A SHOT
AT LIQUOR ADS
MARKETING, B3
SPY
WONDER
WOMAN OWNS
BOX OFFICE
MOVIES, B3
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Monday, June 5, 2017 * *** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS & FINANCE

These indexes cite notable references to most parent companies and businesspeople
in todays edition. Articles on regional page inserts arent cited in these indexes.

A
Aetna...........................B1
Alphabet......................R5
Amazon.com.....A1,B1,R5
American Express . B1,B7
American International
Group...................B1,B2
AMG Yacktman Fund..R5
Aon..............................B2
Apple......................B9,R5
Automattic..................B4
B-C
Bank of America.........B1
Barclays.......................B8
Beef Products.............A3
Beitler Trucking..........B2
Berkshire Hathaway
............................... B2,R5
BlackRock....................R6
BlackRock Strategic
Income Oppor ........... R9
Bristol-Myers............B10
General Motors...........B1
Gilead Sciences...........R6
Greenlight Capital ...... B1
Hersha Hospitality ... B10
Host Hotels...............B10
HSH Nordbank............B3
Intel...........................B10
International Business
Machines...................B1
iShares Edge MSCI USA
Momentum Factor ETF
.....................................R4
iShares Nasdaq
Biotechnology ETF ... R6
K-L-M
Knossos Asset............B9
LaSalle Hotel Prop....B10
Liberty Mutual Group.B2
Loomis Sayles Bond
Fund .......................... R9
MainStay Convertible
Fund .......................... R9
Qualcomm............B1,B10
R-S
Reality Shares DIVS ETF
.....................................R6
When an Ill Wind Blows in C-Suite
Rickmers Holding........B3
BY JOANN S. LUBLIN
Riot Games.................B1
Rite Aid.......................B1 Few jobs take a greater
Salesforce ................... B1
toll than chief executive. Yet
Seaboard.....................A1
Shanxi Trust...............A6 companies rarely know
Shimao Property.........A6 whether their new leaders
SpaceX.........................B4
arrive healthy enough to
SPDR S&P Biotech ETF
.....................................R6 thrive in the pressure-cooker
role.
SunRun........................B8
Supercell......................B1 CSX Corp. recently faced
T-U-V questions over how much
Taiwan Semi Mfg ..... B10 the big railroad knew about
Tencent Holdings...B1,B3
Tesla............................B1
the health of
Tesla Motors...............B3 THE WEEK its new CEO,
Tiffany &...................B10 AHEAD Hunter Harri-

CHRIS GOODNEY/BLOOMBERG NEWS

Broadcom .................. B10
Canadian Pacific..........B2
Celgene........................R6
China Zheshang Bank A6
Cisco Systems.............R5
Citigroup......................B8
Comcast.......................B3
CSX..............................B2
D-F
Dalian Wanda Group .. B3
Daye Trust..................A1
Dell..............................B1
Diamondrock.............B10
DreamWorks...............B3
Facebook.........A10,B9,R5
Fidelity Growth...........R5
First Trust NYSE Arca
Biotechnology Index
Fund .......................... R6
Fitch Ratings .............. B2
Ford Motor..................B1
G-H-I
General Electric .......... B9
MetWest Total Return
.....................................R9
MSCI..........................R10
N-O
Nationwide Mutual.....B2
News Corp...................B3
Nvidia........................B10
Olstein Capital............B1
Oracle..........................R5
Orient Overseas..........B3
P-Q
PepsiCo........................R5
Philippine Amusement
& Gaming..................A8
Pimco Total Return .... R9
Pixar ............................ B4
Portfolio Resources....B9
Procter & Gamble..B9,R5
Progressive ................. B2
Prudential Total Return
Bond Fund.................R9
Qingzhou City
Construction.............A1
Time Warner...............B3
Torino Capital..............B9
Toyota Motor..............B3
Travelers......................B2
21st Century Fox........B3
UnitedHealth Group....B1
VanEck Emerging
Markets Fund ........... R5
VanEck Vectors Biotech
ETF............................R6
VanEck Vectors Russia
ETF............................R5
Vanguard Total Stock
Market ETF...............R4
Vanguard Ultra-Short-
Term Bond Fund.......R9
W-Y-Z
Walgreens Boots........B1
Walt Disney................A3
Warner Bros................B3
Yahoo...........................B1
Yang Ming...................B3
Zurich Insurance.........B2
Zurich North Amer.....B2
son. The 72-
year-old for-
mer head of Canadian
Pacific Railway Co. took the
CSX job in March. He some-
times uses a portable oxygen
machine and often works
from home due to an undis-
closed medical condition.
CSX directors considered CSX has faced questions about the health of Hunter Harrison, who became chief executive in March.
Mr. Harrisons age and expe-
rience before hiring him, a Fearful of violating U.S. Brian Duperreault as its new that his doctors cleared him
spokesman has said. Mr. job-bias laws, businesses leader this spring without to work for CSX and that fel-
Harrison insists he is able to typically dont investigate seeking a physical exam or de- low directors know his medi-
lead the companys turn- the health of their incoming scription of prior ailments be- cal condition.
around. At CSXs annual chief, according to executive cause the big insurer believes Dennis Carey, a vice chair-
meeting on Monday, inves- recruiters, reference check- he is in good shape, a person man of executive-recruitment
tors vote on an $84 million ers and coaches. familiar with the matter says. firm Korn/Ferry International,
payment for him. They likely Yet employers legally may Mr. Duperreault declined to says companies are starting to
will bless the package, which inquire whether an applicant comment about his health. pay more attention to poten-

INDEX TO PEOPLE covers compensation for-

A G
Amosova, Julia ........... B4
Armstrong, Mark........B4
Avedisian, Margaux....R1
B Gokkaya, Sinan...........R4
Barnum, Craig.............A6
Barrato, Joseph .......... R9
Bartolini, Matt............R6
Beitler, Quentin..........B2
Bradley, Daniel............R4
Brown, Janet...............R4
Buffett, Warren..........R5
C-D
Chaikin, Marc..............R2
Chavez, Hugo..............B9
Chenard, Jesse............R1
Cohick, Michael ..... R5,R6
Collins, Michael .......... R9
Craswell, Andrew ....... R6
Daniel, Kent................R4
DeFelice, Tony.............B2
Duperreault, Brian......B2
E-F
Eagan, Matt................R9
Einhorn, David ............ B1
Ernst, Joni .................. A6
Ervin, Eric....................R6
Eslami, Lida ................ R6
Evdemon, Chris...........B1
Fama, Eugene ............. R4
Fields, Mark................B1
French, Kenneth..........R4
Fuss, Dan .................... R9
Garcia-Zarate, Jose .... R6
Gedeon, Dave..............R6
Ghersi, Francisco ........ B9
Goldrick-Rab, Sara......R2
Goldstein, Jeff............B3
Grassley, Chuck .......... A6
Grisanti, Alejandro.....B9
Guba, Robert...............B2
Gnther, Frank............B3
H-I-J
Hightower, Rich........B10
Issakainen, Ryan.........R6
Jacobs, Jay..................R6
K-L
Kantrowitz, Mark ....... R1
Karatzas, Basil............B3
Kennedy, Brian............R9
Kirby, William...........R10
Kostin, David .............. B9
Lara, Alejandro ........... B9
Leggio, Ryan ............... R5
Lighthizer, Robert ...... A3
Liu, Xi..........................R4
Loebsack, Dave...........A6
Lowe, Ellis...................B2
M-O
Maduro, Nicolas..........B9
Mather, Scott..............R9
McDill, Kent................R2
McDowell-Larsen,
Sharon.......................B2
McGee, Chad...............B2
Meyer, Marshall........R10
Moskowitz, Tobias......R4
Musk, Elon..................B4
Olstein, Robert...........B1
Owen-Smith, Jason....B4
P-R
Philips, Chris...............R9
Price, Steve.................B1
Rakshit, Neelarjo........R6
Rickmers, Bertram R.C.
.....................................B3
Rieder, Rick.................R9
Romick, Steven...........R5
S-T
Sacks, Adam.............B10
Scheunert, Frank ........ B3
Schirp, Wolfgang........B3
Schulman, Dan..........A14
Serebriakov, Vassili....B9
Setser, Brad................B9
Silverstein, Edward....R9
Smith, Deborah B.......R2
Sosa, Juan I................B9
Stokes, Elaine.............R9
Sturtevant, Anne........R1
Terpin, Michael...........R1
Tipp, Robert................R9
W-X-Y
Whalen, Bryan............R9
Winum, Paul...............B2
Xie, Fei........................R4
Yadava, Tushar ........... R6
feited when he left Canadian
Pacific. Mr. Harrison has said
he would resign without it.
Situations like the one at
CSX are wake-up calls for
boards, management special-
ists say. They highlight the
potential vulnerability to
shareholders when a medical
condition may prevent a
chief executive from doing
his or her job, says Paul Wi-
num, a senior partner at
RHR International LLP, a
leadership-development
firm. This is something that
will get more attention.
That vulnerability was ex-
posed at United Continental
Holdings Inc. in 2015, when
Oscar Munoz suffered a
heart attack less than six
weeks after being named
CEO of the airline. Mr. Mu-
nozs lengthy hospitalization
left United grappling with
operational and labor-rela-
tions troubles without its
permanent leader.
can do the work and require
medical tests tied to busi-
ness necessity, says Patricia
Snchez Abril, professor of
business law at University of
Miamis business school.
The average age of a CEO of
an S&P 500 firm who was ap-
pointed in 2016 was 53 years
old, according to executive
search firm Spencer Stuart.
Prospective CEOs in their 50s
appear healthy, though we
are probably taking a bit on
faith, a director of three ma-
jor corporate boards says.
Mr. Munoz was 56 at the
time of the heart attack. He
later received a heart trans-
plant and resumed work
last year.
A United spokeswoman
declined to say whether di-
rectors questioned Mr. Mu-
noz about his medical his-
tory before he joined from
CSX, where he was president
and chief operating officer.
American International
Group Inc. hired 70-year-old
Boards are more likely to
give the CEO job to someone
who works long hours than to
someone who spends long
hours working out, observes
Sharon McDowell-Larsen, an
exercise physiologist who runs
an executive-fitness program
for the nonprofit Center for
Creative Leadership.
Ms. McDowell-Larsen be-
lieves directors should be sure
a new leader has good exer-
cise, sleep and eating habits.
CSX tried to learn about
Mr. Harrisons medical history
during initial discussions ear-
lier this year with activist
hedge fund Mantle Ridge
about naming him CEO. He re-
fused the railroads request
that an independent physician
chosen by its board review his
medical records. He declines
further comment.
Mr. Harrison went on
medical leave in 2015 after a
bout of pneumonia and leg
surgery. He had heart-bypass
surgery in 1998. He has said
tial chiefs health.
Mr. Carey says that during
three of his four latest CEO
hunts on behalf of major U.S.
companies, directors asked
their front-runner to disclose
the existence of significant
medical problems that
would prevent them from
doing the job effectively.
Each of those finalists said
they had no known health
problems, he adds.
Other businesses such as
Greif Inc. try to ensure leaders
can handle the rigors of a de-
manding role. In 2014, then
CEO David B. Fischer encour-
aged new operating chief Pe-
ter G. Watson to get in better
shape for his 24/7 job.
At that time, he traveled
so much that he did not
work out like he used to,
Mr. Fischer recalls. The COO
soon resumed exercising,
adds Mr. Fischer, who gave
him the reins in 2015.
Paul Ziobro
contributed to this article.

JOBS change Commission is operat-

ing with three members (in-
cluding one who arrived last
month) and two vacancies
two-person commission.
A White House spokesman
Saturday wouldnt discuss the
vacancies on the commissions.
FTC lawsuit, initiated in the
last days of the Democratic
majority on the commission,
alleging Qualcomm engaged in
What nancing rate is your
Continued from the prior page (which have been open for Several factors have led to unlawful tactics to maintain a
nancial crisis. The other com- more than a year). The situa- the FTCs short-handedness. A monopoly on cellphone chips. broker charging you?
missioner is Sharon Bowen, a tion effectively grants every Republican commissioner left The company denies the
Democrat who generally op- commissioner a veto because in 2015 to return to academia; charges.
poses the rollback. The White agency rules require that at a Democrat resigned last year Awkward moments have
House has nominated a former least three commissioners be for private practice; the Demo- arisen, as when FTC lawyers
House aide to fill one vacancy present for a vote on new cratic chairwoman named by filed a brief urging a judge to
but hasnt tapped anyone for rules. former President Barack reject Qualcomms motion to US Margin Loan Rates Comparison $300k
the two others. The commis- With only two sitting mem- Obama resigned after Mr. dismisswhile acknowledging
sion has operated at less than
full strength for nearly two
bers, the FTC, which enforces
antitrust and consumer-pro-
Trump took office. Mr. Trump
designated Ms. Ohlhausen the
that Ms. Ohlhausen doesnt
support the suit.
Interactive Brokers 2.08%1
years. tection laws, cant challenge a FTCs acting chairman, but The FTC also could be
On the National Labor Rela- merger or a questionable busi- hasnt installed her perma- tested on the proposed Wal-
tions Board, Mr. Trump hasnt ness practice, or approve a nently in the post, though she greens-Rite Aid merger, as the
Schwab 7.50%
nominated any candidates for settlementunless Republican remains a candidate. companies try to address
two open seats, and Demo- Maureen Ohlhausen, the act- Even down to two mem- agency concerns the deal
crats still hold a 2-1 majority. ing chairwoman, and Demo- bers, the panel has approved would hurt competition and
Fidelity 6.56%
The board has had three mem- cratic Commissioner Terrell some closely scrutinized threaten higher drug prices. If
bers since August. The presi- McSweeny agree. mergers, including China Na- Ms. Ohlhausen and Ms. Mc-
dent did elevate Republican The design of the FTC tional Chemical Corp.s $43 Sweeny did deadlock on what
TD Ameritrade 6.75%
Philip Miscimarra to chairman, doesnt contemplate three va- billion takeover of Syngenta the FTC should do, the compa-
so he can stall decisions he cancies, said Jon Leibowitz, a AG and Sherwin-Williams Co.s nies could complete the deal E*TRADE 6.75%
disagrees with. But many busi- former FTC chairman who is acquisition of Valspar Corp, a without having to shed any
nesses are anxious for Mr. now a partner with Davis Polk deal valued at more than $11 stores.
Trump to appoint Republicans & Wardwell LLP. A lot of com- billion. Andrew Ackerman, Dave Scottrade 7.25%
to reverse Obama-era rulings. panies are trying to sort But Ms. Ohlhausen and Ms. Michaels, Eric Morath
The Securities and Ex- through how to deal with a McSweeny disagree about an contributed to this article.
Vanguard 6.00%

TRUCKS Hauling Losses

Percentage of premium dollars that commercial-auto insurers
have spent on claims and expenses
of millions of dollars.
In the past, some employ-
ers were concerned about
cameras and other monitor-
Competitor rm information is for margin loan rates obtained from their
respective websites as of 4/4/17.
Competitor rates and oers subject to change without notice.
Continued from the prior page ing devices because they had
vehicle is in motion. 125% the feel of Big Brother
Were in the same boat as watching, said Chad McGee,
everyone else who operates a 100 another Pritchard principal.
fleet in Atlanta: how to not But as premiums rise, compa-
lose our coverage, said Ellis 75 nies are getting over the is- If you think our margin rates are low,
Lowe, human-resources man- sue, he said.
ager at Estes Services, a heat- 50 Pittsburgh-based Beitler take a look at our commission rates.
ing and air-conditioning firm. Trucking Inc. President Quen-
Insurance companies are
25
tin Beitler said he was look- ibkr.com/margin
tightening up. ing for any technology that
Estess annual premium for would help bring our claims
auto insurance, in the low six 0 down when he saw a televi-
figures, has risen more than 2000 02 04 06 08 10 12 14 16* sion program about onboard
20% over the past two years, *Estimate video cameras. He now has
Mr. Lowe said. The firm just Source: A.M. Best, Conning (estimate) THE WALL STREET JOURNAL. them in 45 trucks. WE AUTOMATE TO SAVE YOU TIME AND MONEY
finished installing a program If there is a triggering
called Cellcontrol on phones pal at the broker Pritchard & lances and cars used by sales event such as slammed brakes,
of 112 technicians. The tech- Jerden. There is a lot more forces. these create video of the sec-
nology detects a vehicles scrutiny. You have to be a lot Part of what is driving the onds just before and after the Interactive Brokers Rated Low Cost
motion and can be pro- cleaner risk and focused on losses: Many trucking firms event. The video can exonerate
grammed to prevent drivers reducing claims, he said. hired inexperienced drivers to a driver if wrongly accused of by Barrons 16 years in a row*
from any calling, app use, Insurance companies with fill jobs after the recession, causing a crash, and it can
texting and emailing unless the largest share of the com- and they are more prone to help the firm coach its drivers
the vehicle is stopped, said mercial-auto market include accidents than seasoned ones. if necessary, Mr. Beitler said. Trading on margin is only for sophisticated
Robert Guba, chief executive Berkshire Hathaway Inc., Lib- In addition, plaintiffs lawyers Across the industry, drivers
of Cellcontrol. erty Mutual Group, Nation- have increasingly targeted can be fired for serious driv- investors with high risk tolerance. You may lose
An insurance broker sug- wide Mutual Insurance Co., trucking firms as the deepest ing problems, though dis- more than your initial investment.
gested the technology as a Progressive Corp., Travelers pockets in accidents. missal policies vary by com-
way for Estes to hold down fu- Cos., and Zurich Insurance There has been an explo- pany. Member - NYSE, FINRA, SIPC, NFA Supporting documentation for
any claims and statistical information will be provided upon request.
ture rate increasesand possi- Group AGs Zurich North sion of judgments and jury The firms insurer, Zurichs Services vary by rm. *Low Cost Rated by Barrons 16 Years Straight
bly avoid cancellation. America unit, according to awards, said Tony DeFelice, North America unit, reduced - Low cost broker 2002 through 2017 according to Barrons online
broker reviews. For more information see, ibkr.com/info - Barrons is
Many carriers have tough- Fitch Ratings. Besides heavy an executive at the insurance Mr. Beitlers insurance bill to a registered trademark of Dow Jones & Co. Inc. [1] IB calculates the
ened their stance on writing trucks, the product line in- brokerage of Aon PLC. Some encourage the use of smart interest charged on margin loans using the applicable rates for each
interest rate tier listed on its website. For additional information on
new commercial-auto policies, cludes local contractors are known as nuclear ver- technologies, a spokeswoman margin loan rates, see ibkr.com/interest. 05-IB17 1096CH1095
said Lawson Burnat, a princi- pickup trucks, buses, ambu- dicts, at tens or even hundreds said.
THE WALL STREET JOURNAL.
German
Shipping
Firm Seeks
Bankruptcy
BY WILLIAM WILKES
AND COSTAS PARIS
FRANKFURTGermanys
third-largest shipping firm
filed for insolvency Friday af-
ter it was cut loose by one of
the countrys biggest shipping
lenders, a sign Germanys
long-simmering shipping cri-
sis has reached a boiling
point.
Rickmers Holding AG said
lender HSH Nordbank AG
backtracked on an under-
standing that it would re-
structure the companys debt,
forcing it to file for insol-
vency. HSH Nordbank said its
board examined the Rickmers
business plans carefully be-
fore deciding they werent vi-
able. Rickmers bondholders
said they expect the firms
owner, Bertram R.C. Rick-
mers, to gut the companys ity message and cant have a
assets.
Frank Gnther, managing
director at One Square Advi-
sors, the chief representative
for bondholders, said money
could be recovered from Rick-
mers if an investor is found
to help finance restructuring.
Mr. Gnther said he was sur-
prised HSH Nordbank didnt
agree to the original restruc-
turing plans.
Rickmers is maritime roy-
alty, said Basil Karatzas,
chief executive of New-York
based Karatzas Marine Advi-
sors & Co. Seeing them file
for bankruptcy is like seeing a
king get deposed.
The companys bankruptcy
puts an exclamation mark on
a dismal 12 months for Ger-
manys shipping firms. Plung-
ing world freight rates and
the bankruptcy of South Ko-
reas Hanjin Shipping last
year helped create a perfect
storm for the sector, a head-
ache for German banks and
investors who own around
21% of the worlds container
fleet, according to the Ger-
man Shipowners Association.
A glut of tonnage in the
water brought about a rare
wave of industry consolida-
tion over the past two years,
with the worlds 20 biggest
container operators shrinking
to about a dozen that posted
about $5 billion in collective
losses in 2017.
Rickmers is
maritime royalty,
says industry adviser
Basil Karatzas.
Despite some signs of the
recovery with rebounding
volumes, freight rates in the
benchmark Asia to Europe
trade route are still around
half break-even levels, forcing
top players like Denmarks
Maersk Line and Germanys
Hapag-Lloyd to shed thou-
sands of jobs.
Industry players said the
carnage isnt over, with Asian
operators like Hong Kongs
Orient Overseas Container
Lines and Taiwans Yang
Ming in the cross hairs of
bigger players.
Rickmers, which operates
114 ships, on Wednesday said
HSH Nordbank surprisingly
denied a term sheet needed
to restructure its debt. Bond-
holders said Mr. Rickmerss
new business proposals were
too risky for creditors. Rick-
mers Maritime, Singapore, a
financially independent sub-
sidiary of Rickmers, last year
missed interest payments on
Monday, June 5, 2017 | B3
BUSINESS NEWS
NFL Adds Liquor to Menu of Ads
Up to four 30-second
spots per game will be
permitted in the
coming football season
BY JOE FLINT
AND SUZANNE VRANICA
The National Football
League is ready for a good stiff
drink.
In a change of its advertis-
ing policy, the NFL will allow
its television partners to ac-
cept commercials for distilled
spirits in the 2017 season, ac-
cording to a memo reviewed
by The Wall Street Journal.
The NFL said it will accept
no more than four 30-second
hard-liquor spots per game
with a limit of two such spots
in any quarter or during half-
time. In addition, the networks
airing the matchupsESPN,
FOCUS ON SPORT/GETTY IMAGES
Fox, CBS and NBCcan run
two spots in pregame and
postgame programs.
The ads have to include a
prominent social responsibil-
football theme or target un-
derage drinkers.
The NFL confirmed the pol- Liquor ads will have to include a prominent social responsibility message and cant have a football theme or target underage drinkers.
icy change. While described as
a one-season test, the policy is of young fans. Broadcasters other forms of birth control. GNC, just days before the big Gambling also is still a red
expected to become perma- and other professional sports While those spots arent al- game. The Pittsburgh-based vi- flag, including ads for any ho-
nent, an NFL executive said. leagues started easing into ac- lowed, the league has no prob- tamin and supplement retailer tel that features gambling even
Over the past 10 years, cepting ads from spirits lems with commercials for said at the time that it was no- if it isnt referenced in the
sports leagues have expanded brands several years ago. performance-enhancing erec- tified by Fox that GNCs partic- commercial. That also includes
aggressively into wooing new Hard-liquor companies tile dysfunction drugs. ipation in the Super Bowl as tourism ads for places that al-
advertisers and league spon- spent roughly $411 million on Also, while many people an advertiser wasnt accept- low gambling such as Las Ve-
sors to bring in more revenue U.S. ads last year, estimates like to mix their vodka with able to the NFL. gas. Lottery ads are accept-
from companies beyond the Kantar Media. an energy drink, they wont GNC is listed under prohib- able, as is general advertising
traditional beer brands, car There are still several cate- get that idea from the NFL, ited companies on a memo for horse or dog racing or
makers and financial-services gories of advertising the NFL which still wants nothing to from the NFL and the players state and municipal off-track
firms. wants to continue to keep do with Red Bull and similar union, warning against busi- betting organizations.
But the ban on spirits had clear of football. energy drinks. ness relationships with the The NFL is also worried
held firm amid concerns of as- Most prominent on its list Earlier this year, a brouhaha company because it is associ- about excessively violent mov-
sociating hard liquor with fa- of prohibited advertising cat- erupted after Fox rejected a ated with substances banned ies and videogames being ad-
mous football players in front egories are condoms and Super Bowl commercial for by the NFL. vertised.
Wonder Woman Reigns at the Box Office
BY ERICH SCHWARTZEL kinss first feature directing
credit since 2003s Monster.
Wonder Woman, the first Her accomplishment comes
major comic-book adaptation to amid considerable scrutiny of
put a super heroine front and Hollywoods lopsided record of
center in more than a decade, hiring women directors.
powered to the top of the box In 2015, the U.S. Equal Em-
office this weekend with an esti- ployment Opportunity Commis-
mated $100.5 million debut. sion began interviewing direc-
The critical acclaim and tors and Hollywood executives
box-office success of Wonder about hiring practices; the in-
Woman breathes new life into vestigation is ongoing.
Warner Bros. DC Comics Overseas returns totaled
franchise, which has had the $122 million, led by a $38 mil-
performance of recent install- lion debut in China. Warner
ments like Suicide Squad Bros. brought on Chinese com-
CLAY ENOS/ASSOCIATED PRESS
hurt by withering reviews. panies Dalian Wanda Group
Gal Gadot headlines Won- Co. and Tencent Holdings Ltd.
der Woman as Diana, Prin- as investors in the film to help
cess of the Amazons, a warrior with marketing and distribu-
who becomes the title charac- tion in the country. Wonder
ter made famous by Lynda Woman has so far opened in
Carter on the 1970s television countries comprising about
show. When a World War I pi- 75% of the global marketplace.
lot (Chris Pine) crashes into The movie, which cost Gal Gadot in Wonder Woman as Diana, Princess of the Amazons. Patty Jenkins directed the movie.
her hidden world of Themy- about $150 million to make,
scira, Diana joins him to fight was also co-financed by Rat- Works Animation SKG Inc.
the German army. Pac-Dune Entertainment LLC, release that will be distributed
Wonder Woman, directed the film finance group that un- by Twentieth Century Fox
Estimated Box-Office Figures, Through Sunday
SALES, IN MILLIONS
by Patty Jenkins, is the best til recently was co-led by U.S. since the company was ac-
opening of all time for a female Treasury Secretary Steven quired last year by Comcast FILM DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE
director. Women made up 52% Mnuchin. (Mr. Mnuchin is Corp.s NBCUniversal.
1. Wonder Woman Warner Bros. $100.5 $100.5
of the opening-weekend audi- listed as an executive producer (Foxs parent company, 21st
ence; most DC movies sell more on the film.) Century Fox, and News Corp, 2. Captain Twentieth $23.5 $23.5
than 60% of tickets to men in The weekends other new owner of The Wall Street Underpants Century Fox
their first weekends, said Jeff wide release, Captain Under- Journal, share common own- 3. Pirates of the Disney $21.6 $114.6 -66%
Goldstein, president of domestic pants: The First Epic Movie, ership.) Caribbean
distribution at the Time War- opened to $23.5 million in sec- Wonder Woman re-ener-
4. Guardians of the Disney $9.7 $355.5 -53%
ner Inc.-owned studio. ond place, a fine start for the gizes a summer box office that
Galaxy
Theres no question that inexpensive animated film. last week suffered its worst Me-
this character hits the zeit- Captain Underpants, morial Day weekend in 18 years. 5. Baywatch Paramount $8.5 $41.7 -54%
geist, he said. adapted from the childrens Year-to-date box office is up *Friday, Saturday and Sunday Source: comScore
Wonder Woman is Ms. Jen- book series, is the last Dream- nearly 3%, according to Nielsen.
Toyota Hit Brakes on Tesla Partnership ADVERTISEMENT
Legal Notices
To advertise: 800-366-3975 or WSJ.com/classieds
BANKRUPTCIES
LEGAL  


 

 

NOTICES
    
a bond, and rating agency      
Creditreform Rating AG   

  
  

JONATHAN ALCORN/BLOOMBERG NEWS

       !
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pany. Mr. Scheunert said he when the transaction occurred cent company disclosure. nouncing it would stop using . + /" 01    2&
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could recover debt. These from the sale. But Tesla shares 2010 to work on electric vehicles. tric RAV4, which is no longer All Rights Reserved. $+-$#D-$

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bonds will be emptied out. have been on a tear, rising Toyota took a $50 million stake sold. Sean McLain
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B4 | Monday, June 5, 2017
Musks SpaceX Notches Another Milestone
Cargo capsule used
on previous mission is
refurbished and then
successfully relaunched
BY ANDY PASZTOR
Elon Musks SpaceX for the
first time launched a refur-
bished cargo capsule that had
been used on a previous mis-
sion, a major stride toward
eventually reusing spacecraft
carrying astronauts.
Saturdays blastoff of the
Falcon 9 rocket carrying the
unmanned Dragon capsule
went off like clockwork, rising
from Floridas Kennedy Space
Center on schedule at 5:07
p.m. local time. Neither the
rocket nor the previously
flown capsule, filled with
roughly three tons of supplies
and experiments destined for
the international space sta-
tion, experienced any techni-
cal problems.
The capsule initially flew
and came back from the orbit-
ing laboratory in 2014.
The latest feat by Southern
California-based Space Explo-
ration Technologies Corp. fol-
lowed by two months the
closely held companys historic
accomplishment of launching,
returning and vertically land-
FUNDS
Continued from page B1
out on the frontier a little fur-
ther than the other teams in
Tencent, he said.
Based in the southern Chi-
nese technology hub of Shen-
zhen, Tencent competes on
many fronts with Chinas two
other tech giants, Alibaba
Group Holding Ltd. and Baidu
Inc. Each has ventured over-
seas as part of their appetite
for growth outside China,
though none has invested as
aggressively in the U.S. as Ten-
cent.
Since 2011, Tencent has in-
vested in 41 tech startups in
the U.S., joining fundraising
rounds worth $3.5 billion. The
figure excludes investments in
public companies. That makes
it the second-biggest foreign
investor in the sectorbehind
only Koreas Samsung Group
and tied for 11th biggest cor-
porate investor overall, up
from 18th four years ago, ac-
cording to research firm CB
Insights. Google parent Alpha-
bet Inc. is at the top of the
list.
MIMS
Continued from page B1
ployees leave as a result.
Other companies, though,
cite saving on rent among a
variety of reasons for letting
employees work remotely.
They say it also improves
employee satisfaction, help-
ing retention and recruiting.
The larger truth is that
nearly every company that
employs knowledge workers
is still learning which jobs
can best be done remotely,
as the tools to accomplish
remote work become in-
creasingly powerful.
Making the transition in a
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ing the major portion of a used
booster to cap off two separate
trips to space.
Slightly more than five
years ago, SpaceX became the
first corporate entity to link up
a spacecraft with the orbiting
space station.
Ultimately, Mr. Musk and
many other space experts con-
sider reusable rockets and
spacecraft key to slashing the
cost of access to space and
stepping up launch tempos.
Over the years, a major
challenge confronting SpaceX
was ensuring that water
didnt leak into returning
Dragons as parachutes guided
them to gentle splashdowns.
A still unanswered question is
how many times a capsules
heat shieldattached to the
bottom of the pear-shaped ve-
hicle and designed to with-
stand fiery returns through
the atmospherecan be re-
flown safely.
The recycled Dragon fea-
tured a new heat shield and re-
placement parachutes.
Three minutes after liftoff,
the main engines stopped fir-
ing as planned, the first stage
separated and then the engine
powering the second stage ig-
nited. Less than eight minutes
after blastoff, the Falcon 9s
first stage touched down verti-
cally at its landing site near
Sang Park in a League of Legends College Championship match
In May Tencent reported a
58% rise in first-quarter profit
and a cash pile of $4 billion.
Mr. Wallerstein, whose offi-
cial title is chief exploration
officer, is a key figure in the
companys overseas push. The
California native joined Ten-
cent in 2001 and spent more
than a decade shuttling be-
tween China and the U.S. be-
fore settling full time at the
big company isnt easy, Dells
Mr. Price says. What is abso-
lutely essential is getting ev-
eryone the right tools. This
can be expensive and time-
consuming, even for compa-
nies whose primary purpose
is building those tools.
To understand the issues,
it is helpful to look at a com-
pany that has always been
almost entirely remote. Au-
tomattic, maker of Word-
Press, the content-manage-
ment system that powers
28% of all websites, has 558
employees spread across
more than 50 countries, up
from 302 in December 2014.
Despite its growth, the
company is getting rid of its
custom-designed, light-filled,
APY *
TECHNOLOGY
Saturdays blastoff of the Falcon 9 rocket carrying an unmanned
Dragon capsule went smoothly.
the launchpad. The capsule is mice that are part of an effort
scheduled to arrive at the to study loss of bone density
space station Monday. The in space, along with hundreds
launch had been scrubbed of fruit flies for biological ex-
Thursday due to weather. Sci- periments and seeds intended
entific cargo on board includes to grow in microgravity.
Recent Acquistions
Investments involving Tencent, in millions of dollars
Epic Games
Fab.com
330 150
June June
2012 2013
JOSH LEFKOWITZ/GETTY IMAGES
Size of funding round Source: CB Insights
Valley investors.
We get behind the founder
and the executive team and help
the company become the best
company they can become, Mr.
Wallerstein said. We will work
with the company to bring their
companys U.S. headquarters technology to China when
in a converted church in Palo theyre ready, but we do not
Alto, Calif. push the company.
People close to Tencent said These investments differ
Mr. Wallerstein and his team from the handful of big-ticket
of roughly half a dozen execu- stakes that Tencent has taken
tives take a hands-off ap- in the U.S. Those deals have
proach after buying a stake, in- been led by the companys
vesting just a few million China-based deals team, peo-
dollars at a time or less, typi- ple familiar with the company
cally alongside other big com- said, and include its acquisi-
panies or well-known Silicon tion of Los Angeles-based Riot
14,250-square-foot office in a
hip San Francisco neighbor-
hood. On an average day,
maybe five workers will
out, says Mark Armstrong,
whose site, Longreads, was
acquired by Automattic in
2014. Everyone knows that
show up, dwarfed by the feeling where youre the one
cavernous space and nearly on the conference call and
outnumbered by the Ping- everyone else is in the room
Pong and foosball tables that together, he says.
mostly sit idle. A distributed workforce
With teams that may be can have other benefits, says
spread across a dozen time
zones, Automattic relies on
Julia Amosova, a happiness
engineer at Automattic. The
Slack for synchronous com- online communication re-
munication, Zoom for weekly
videoconferences and its own
quired allows for radical
transparency, since anyone
internal system of threaded in the company can search
conversations for document- across all internal communi-
ing everyones work and for cations. Most of the meet-
major decisions. ings were held behind closed
When everyone is forced doors at other places I
to communicate through worked at, she says. I
these tools, no one is left didnt have the same feeling
of unity and inclusion.
Unless youre a pure soft-
ware company like Automat-
tic, being 100% remote prob-
ably isnt an option. Dell
isnt planning to get any
$2,000
minimum
opening
deposit
Julia Amosova works as happiness engineer in tech support at Automattic, maker of WordPress.
THE WALL STREET JOURNAL.
Lawmakers to Study
Some Space Rules
GOP lawmakers craft bill to
simplify federal supervision of
private outer space ventures
Three influential House Re-
publicans have proposed shak-
ing up federal oversight of bur-
geoning commercial space
activities by putting the Com-
merce Department squarely in
charge of regulating such en-
deavors.
Backed by Rep. Lamar
Smith, the veteran Texas law-
maker who chairs the House
Science, Space and Technology
Committee, the bill seeks to
BILL INGALLS/NASA/ZUMA PRESS
promote private space ventures
partly by giving Commerce pri-
mary authority over nongov-
ernmental missions beyond the
atmosphere ranging from imag-
ing to anticipated asteroid
mining. That responsibility is
now scattered across the gov-
ernment, with the Federal Avia-
tion Administration playing a
central role in approving launch
licenses and coordinating
agency positions.
The FAA would keep its
launch-approval authority, but
the bill doesnt support the
STX Entertainment Grail
Lyft
530 700 900
March August March
2015 2016 2017
THE WALL STREET JOURNAL.
Games as well as its $1.8 bil-
lion investment in Tesla Inc.
Chinese companies are
now wanting to go global more
than ever before, said Connie
Chan, partner at the Menlo
Park, Calif., venture-capital
firm Andreessen Horowitz.
Among recent investments,
Tencent led a $10 million in-
vestment round in Aca-
demia.edu, a San Francisco- pated in a $900 million fund-
based company that operates a
platform for scientists and ac-
ademics to publish and review
papers online.
Other smaller stakes in-
clude: a $3 million investment
disclosed earlier this year in
more of its employees work-
ing remotely, Mr. Price says.
Engineering, leadership,
R&D, sales and customer
supportthose are roles that
dont lend themselves very
well to remote work. Not ev-
erybody gets to do it. Roles
The tools to
accomplish remote
work are becoming
increasingly powerful.
where it does work include
HR, legal, marketing, analyt-
ics, data science and other
support functions, he adds.
For workers in an office,
collaboration occurs natu-
rally, says Jason Owen-
Smith, a professor of sociol-
ogy at the University of
WSJ.com/Tech
agencys efforts to enhance its
power over monitoring space
debris or creating new air traf-
fic-control procedures reflecting
rapidly increasing launch
tempos.
Proposed space tourism
flights arent affected by the
proposals.
The legislation, scheduled to
be debated and likely approved
by the full committee on
Thursday, also aims to dramati-
cally streamline approvals for
remote sensing satellites while
updating and simplifying proce-
dures to ensure that operators
of all commercial spacecraft
comply with international
treaty obligations.
The goal of the bill is to
champion private enterprise in
space, reduce government in-
volvement and make U.S. enti-
ties more competitive by
speeding regulatory decisions
and providing investors greater
certainty.
Other key sponsors include
Rep. Brian Babin, the Texas Re-
publican who heads the space
subcommittee, and Rep. Jim
Bridenstine, an Oklahoma Re-
publican who is an outspoken
advocate of loosening govern-
ment controls on a wide range
of private imaging systems.
Andy Pasztor
Innovega Inc., a Bellevue,
Wash.-based company building
an augmented reality device
into a contact lens. A former
Tencent executive now sits on
the companys board, and
Chief Executive Steve Willey
says he plans to first launch
the final product in China with
Tencents help.
Some of Tencents early in-
vestments paid off big, like its
investment in Snap Inc. in
2013, four years before the
Snapchat parent went public.
But not every investment has
taken off.
Since 2014 the company has
participated in $25 million
worth of fundraising by Kam-
cord, a San Francisco social-
media company. Kamcord has
had ambitions to expand in
Asia, but last year discontin-
ued its live video-streaming
service. Kamcord wasnt avail-
able for comment.
In March Tencent partici-
ing round for Grail Inc., a
Menlo Park, Calif., firm aiming
to build tests for genetic evi-
dence of cancer. Other inves-
tors in the round included
Johnson & Johnson and Merck
& Co.
Michigan who has studied
collaboration and innovation
at academic research institu-
tions. His research indicates
that for every 100 feet of
overlap between the typical
daily walking paths of people
in a building, there is a 17%
increase in the likelihood
two researchers who have
not previously worked to-
gether will collaborate on a
new projectand a 20% in-
crease in the likelihood they
will get their project funded.
In one building Dr. Owen-
Smith and his team studied,
the mens and womens
restrooms were at opposite
ends of the facility: Same-
gender collaborations went
up and mixed-gender collab-
orations were suppressed.
Famously, at Pixar, Steve
Jobs put the bathrooms in
the center of the building,
to force people to cross
paths multiple times a day.
STEVE REMICH FOR THE WALL STREET JOURNAL
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THE WALL STREET JOURNAL. Monday, June 5, 2017 | B5

The Wrong School

Could Cost You
a Lot More
Than Money

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event on finding the right college
and paying for it.

6/7/2017 | NYU Law School

With so many schools to choose from and so many

factors to consider, learn how to narrow the field with
tips on researching schools effectively and identifying
what really matters. Well also explore how to impress
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B6 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

MARKETS DIGEST
Dow Jones Industrial Average S&P 500 Index New to the Market
Last Year ago Last Year ago
21206.29 s 126.01, or 0.60% last week Trailing P/E ratio 20.63 19.00 2439.07 s 23.25, or 0.96% last week Trailing P/E ratio 24.08 24.22 Public Offerings of Stock
High, low, open and close for each of P/E estimate * 17.92 16.99 High, low, open and close for each of P/E estimate * 19.01 17.81
the past 52 weeks Dividend yield 2.37 2.58 the past 52 weeks Dividend yield 1.95 2.18 IPOs in the U.S. Market
All-time high 21206.29, 06/02/17 All-time high: 2439.07, 06/02/17
Initial public offerings of stock expected this week; might include some
offerings, U.S. and foreign, open to institutional investors only via the
Current divisor 0.14602128057775 Rule 144a market; deal amounts are for the U.S. market only
21600 2425
Symbol/ Pricing
Week's high Expected primary Shares Range($)
DOWN UP pricing date Filed Issuer/business exchange (mil.) Low/High Bookrunner(s)
20800 2350
t

Monday's open Friday's close Week of 6/55/2 ShotSpotter Inc SSTI 2.8 10.00/ Roth Cptl Ptnrs,
Gunshot location Nq 12.00 Northland
Friday's close Monday's open detection systems Securities Inc
t

20000 2275 company

6/8 6/16/14 Plymouth Industrial REIT Inc PLYM 3.8 19.00/ DA Davidson & Co,
Week's low Focused on acquisition, N 21.00 BB&T Capital
19200 2200 ownership and Markets,
management of single and Oppenheimer Inc,
multi-tenant Class B Janney
industrial properties Montgomery
18400 2125 located in markets across Scott
the Eastern half of the U.S.
200-day moving average and Texas.

200-day moving average 17600 2050 Lockup Expirations

65-day moving average 65-day moving average Below, companies whose officers and other insiders will become eligible
16800 1975 to sell shares in their newly public companies for the first time. Such
Bars measure the point change from Monday's open
sales can move the stocks price.
16000 1900 Lockup Offer Offer amt Through Lockup
expiration Issue date Issuer Symbol price($) ($ mil.) Friday (%) provision
J J A S O N D J F M A M J J J A S O N D J F M A M J
June 5 Dec. 7, 16 Senestech Inc SNES 8.00 15.0 26.1 180 days
Primary
NYSE weekly volume, in billions of shares market Composite June 6 Dec. 8, 16 Athene Holding Ltd ATH 40.00 1242.0 22.9 180 days
t
t

Financial Flashback Dec. 8, 16 Ichor Holdings Ltd ICHR 9.00 60.8 164.2 180 days
30
20 The Wall Street Journal, June 5, 2009 June 11 Dec. 13, 16 WildHorse Resource Development WRD 15.00 447.0 17.2 180 days
10 The Journal reported that the FDIC wanted to overhaul Sources: Dealogic; WSJ Market Data Group
0 management at Citigroup, imperiling the job of then-CEO
J J A S O N D J F M A M J Vikram Pandit, who ultimately stepped down in 2012. IPO Scorecard
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc. Performance of IPOs, most-recent listed first
% Chg From % Chg From
Friday3s Offer 1st-day Friday3s Offer 1st-day
Major U.S. Stock-Market Indexes Nasdaq Composite Company SYMBOL
IPO date/Offer price close ($) price close
Company SYMBOL
IPO date/Offer price close ($) price close
Latest Week 52-Week % chg s 95.60, or 1.54% KBL Merger IV 10.00 ... ... Bright Scholar Edu Hldgs 12.40 18.1 7.5
High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann. KBLMU June 1/$10.00 BEDU May 18/$10.50
Dow Jones
last week
Appian 17.85 48.8 18.9 G1 Thera 18.94 26.3 26.3
Industrial Average 21225.04 20942.57 21206.29 126.01 0.60 17140.24 l 21206.29 18.6 7.3 8.2 APPN May 25/$12.00 GTHX May 17/$15.00
Transportation Avg 9406.24 9087.95 9331.72 155.52 1.69 7093.40 l 9593.95 20.1 3.2 4.6 WideOpenWest 18.00 5.9 9.1 ASV Hldgs 8.19 17.0 4.3
6300 WOW May 25/$17.00 ASV May 12/$7.00
Utility Average 735.86 718.76 732.63 12.41 1.72 625.44 l 732.63 11.6 11.1 10.3
SMART Global Hldgs 14.09 28.1 4.8 Gardner Denver Hldgs 22.65 13.3 7.3
Total Stock Market 25277.87 24821.63 25257.37 267.08 1.07 20583.16 l 25257.37 16.6 8.5 7.9 SGH May 24/$11.00 GDI May 12/$20.00
Barron's 400 650.61 629.84 647.66 9.79 1.53 491.89 l 647.66 22.5 7.7 7.7 6250
argenx 20.88 22.8 9.2 Solaris Oilfield Infrastructure 11.67 2.8 1.0
ARGX May 18/$17.00 SOI May 12/$12.00
Nasdaq Stock Market
6200
Nasdaq Composite 6308.76 6164.07 6305.80 95.60 1.54 4594.44 l 6305.8 27.6 17.1 14.2 Sources: WSJ Market Data Group; FactSet Research Systems
Nasdaq 100 5881.46 5762.56 5881.46 93.10 1.61 4201.05 l 5881.46 30.4 20.9 16.4
6150
Other Stock Offerings
Standard & Poor's 26 29 30 31 1 2 Secondaries and follow-ons expected this week in the U.S. market
500 Index 2440.23 2403.59 2439.07 23.25 0.96 2000.54 l 2439.07 16.2 8.9 8.2 May
Symbol/
MidCap 400 1758.55 1704.94 1751.11 23.84 1.38 1416.66 l 1758.27 16.7 5.5 8.2 DJ US TSM Primary Amount Fridays
Expected Issuer/Business exchange ($mil.) price ($) Bookrunner(s)
SmallCap 600 858.91 822.45 851.91 14.41 1.72 670.90 l 863.08 20.1 1.7 9.4 s 267.08, or 1.07% June 5 PetroShare Corp PRHR 50.0 1.88 Johnson Rice & Co,
Other Indexes last week Oil & Gas N Seaport Global Securities
Russell 2000 1414.96 1354.85 1405.39 23.14 1.67 1089.65 l 1419.43 20.7 3.6 7.6
NYSE Composite 11728.80 11554.86 11718.70 86.83 0.75 9973.54 l 11718.7 11.7 6.0 2.8 Off the Shelf
Value Line 526.50 511.45 524.58 6.05 1.17 435.06 l 529.13 13.0 3.6 2.5 25300 Shelf registrations allow a company to prepare a stock or bond for
NYSE Arca Biotech 3697.59 3483.72 3690.05 121.87 3.42 2818.70 l 3690.05 13.1 20.0 12.7 sale, without selling the whole issue at once. Corporations sell as
NYSE Arca Pharma 530.83 517.90 530.27 11.39 2.19 463.78 l 554.66 0.8 10.1 1.2 25100
conditions become favorable. Here are the shelf sales, or takedowns,
KBW Bank 90.50 88.02 89.38 -1.44 -1.59 60.27 l 99.33 28.1 -2.6 8.9 over the last week:
PHLX Gold/Silver 84.30 82.30 -1.43 -1.68 73.03 l 112.86 5.5 -0.6 Takedown date/ Deal value Registration
83.22 -6.6
24900 Issuer/Industry Registration date ($ mil.) (mil.) Bookrunner(s)
PHLX Oil Service 141.83 135.72 138.35 -3.76 -2.65 138.35 l 192.66 -14.6 -24.7 -21.9
Savara Inc June 2 $38.5 $150.0 Jefferies
PHLX Semiconductor 1104.90 1084.28 1103.40 18.55 1.71 648.32 l 1103.4 56.4 21.7 22.3
Healthcare March 24,315
CBOE Volatility 11.30 9.58 9.75 -0.06 -0.61 9.75 l 25.76 -27.6 -30.6 -5.6 24700
26 29 30 31 1 2 Park Hotels & Resorts Inc June 1 $392.3 $832.3 GS

Philadelphia Stock Exchange Sources: SIX Financial Information; WSJ Market Data Group May Real Estate/Property May 5,317

Visa Inc May 31 $209.4 ... BofA ML

Finance July 23,315
International Stock Indexes Commodities and Air Transport Services Group IncMay 31 $77.9 ... BofA ML
Latest Week 52-Week Range YTD
Currencies Transportation May 31,317
Region/Country Index Close % chg Low Close High % chg Last Week YTD
Close Net chg %Chg % chg NanoString Technologies IncMay 31 $50.3 $100.0 R W Baird & Co
World The Global Dow 2790.26 0.75 2197.91 2790.26 10.2
549.09 -11.64 -2.08 -3.20
Healthcare Aug. 29,314
DJ Global Index 362.83 1.09 293.27 362.83 11.3 DJ Commodity
ExtendedStayAmericaInc/ESHHospitalityIncMay 30 $438.8 $2,785.6 Citi, MS
DJ Global ex U.S. 243.70 1.15 194.95 243.70 13.9 TR/CC CRB Index 177.96 -4.04 -2.22 -7.56 Real Estate/Property June 5,315
Global Dow Euro 2330.21 0.06 1885.53 2398.98 3.1 Crude oil, $ per barrel 47.66 -2.14 -4.30 -11.28
ApolloCommercialRealEstateFinanceIncMay 30 $251.9 ... Citi, JPM, BofA ML, MS
DJ TSM Global 3734.62 1.11 3015.61 3734.62 11.1 Natural gas, $/MMBtu 2.999 -0.311 -9.40 -19.47 Real Estate/Property May 7,315
Global ex U.S. 2462.44 1.15 1969.71 2462.44 14.0 Gold, $ per troy oz. 1276.80 8.70 0.69 11.03
James River Group Holdings LtdMay 30 $170.0 $715.8 MS
Developed ex U.S. 2398.94 1.48 1921.04 2398.94 13.5
U.S. Dollar Index 96.67 -0.73 -0.75 -5.42 Insurance Jan. 7,316
Global Small-Cap 5074.27 1.38 4057.70 5074.27 9.8
WSJ Dollar Index 88.29 -0.56 -0.63 -5.00
Global Large-Cap 3543.80 1.07 2866.49 3543.80 11.4
Euro, per dollar 0.8864 -0.0079 -0.89 -6.75 Public and Private Borrowing
Americas DJ Americas 585.14 0.89 480.83 585.14 8.3
Yen, per dollar 110.41 -0.92 -0.83 -5.63
Brazil Sao Paulo Bovespa 62510.69 2.46 48648.29 69052.03 3.8 Treasurys
U.K. pound, in dollars 1.29 0.01 0.69 4.42
Canada S&P/TSX Comp 15442.75 0.17 13689.79 15922.37 1.0 Monday, June 5 Tuesday, June 6
Mexico IPC All-Share 49317.38 0.72 44282.03 49939.47 8.1 52-Week
Low Close(l) High % Chg Auction of 13 and 26 week bills; Auction of four-week bill;
Chile Santiago IPSA 3724.11 0.26 3067.58 3782.66 15.5
announced on June 1; settles on June 8 announced on June 5; settles on June 8
2.88
Europe Stoxx Europe 600 392.55 0.31 308.75 396.45 8.6 DJ Commodity 506.18 l 589.81
Stoxx Europe 50 3233.89 0.17 2636.71 3276.11 7.4 TR/CC CRB Index 177.01 l 195.82 -5.67 Public and Municipal Finance
Eurozone Euro Stoxx 388.06 0.51 288.98 392.06 10.8 Crude oil, $ per barrel 39.51 l 54.45 -1.97 Deals of $ 150 million or more expected this week
Euro Stoxx 50 3591.82 0.36 2697.44 3658.79 9.2 Natural gas, $/MMBtu 2.40 l 3.93 25.06 Final Total Rating Bookrunner/
Belgium Bel-20 3915.04 0.36 3141.13 4041.03 8.6
Gold, $ per troy oz. 1127.80 l 1364.90 2.96
Sale maturity Issuer ($mil.) Fitch Moodys S&P Bond Counsel(s)
France CAC 40 5343.41 0.13 3984.72 5432.40 9.9
Germany DAX 12822.94 1.75 9268.66 12822.94 11.7 U.S. Dollar Index 93.21 l 103.25 2.98
June 6 Oct. 1, 2030 Orange Co- 202.7 AA Aa3 AA- Prelim/GreenbergTraurig PA
Israel Tel Aviv 1421.14 0.16 1378.66 1478.96 3.4 WSJ Dollar Index 85.14 l 93.56 2.48
Florida /Law Offices of Debi V Rumph
Italy FTSE MIB 20928.24 1.33 15104 21788 8.8
Euro, per dollar 0.88 l 0.96 0.73
Law Offices of Debi V Rumph
Netherlands AEX 526.74 0.24 411.62 536.26 9.0
3.65
Spain IBEX 35 10905.90 0.02 7645.5 11135.4 16.6 Yen, per dollar 99.88 l 118.18 June 6 July 1, 2047 Seattle City- 239.9 N.R. Aa1 AA+ Preliminary/Stradling
Sweden SX All Share 592.96 1.05 445.00 592.96 10.9 U.K. pound, in dollars 1.20 l 1.49 -11.21 Washington Yocca Carlson
Switzerland Swiss Market 9043.96 0.02 7593.20 9127.61 10.0
Real-time U.S. stock
U.K. FTSE 100 7547.63 5923.53 7547.63 5.7
Asia-Pacific
Australia
DJ Asia-Pacific TSM
S&P/ASX 200
1633.12
5788.10
1.70
0.63
1324.15
5103.3
1633.12
5956.5
14.8
2.2
WSJ
.COM
quotes are available on
WSJ.com. Track most-
active stocks, new
June 6 Feb. 1, 2024 Virginia
College
285.0 AA+ Aa1 AA+ Preliminary/
Kutak Rock
China Shanghai Composite 3105.54 0.15 2833.07 3288.97 0.1
highs/lows, mutual
Building Auth
Hong Kong Hang Seng 25924.05 1.11 20038.42 25924.05 17.8
funds and ETFs.
India S&P BSE Sensex 31273.29 0.79 25765.14 31273.29 17.5 June 8 June 15, 2037 Clark SD 624.3 N.R. A1 AA- Preliminary/
Japan Nikkei Stock Avg 20177.28 2.49 14952.02 20177.28 5.6 Plus, get deeper money-flows data and Sherman &
Singapore Straits Times 3240.01 0.64 2729.85 3271.11 12.5 email delivery of key stock-market Howard
South Korea Kospi 2371.72 0.70 1925.24 2371.72 17.0 data.
Taiwan Weighted 10152.53 0.50 8458.87 10152.53 9.7 All are available free at June 9 prelim. Chabot-Las 160.0 N.R. N.R. N.R. Piper Jaffray
Source: SIX Financial Information;WSJ Market Data Group WSJMarkets.com Positas Comm
Coll Dt

Consumer Rates and Returns to Investor Benchmark Yields and Rates June 9 Nov. 1, 2036 Chicago City- 199.6 N.R. N.R. N.R. Cabrera Capital Mrkts/
U.S. consumer rates Selected rates Treasury yield curve Forex Race Illinois Pugh Jones Johnson/
A consumer rate against its 30-year mortgage, Rate Yield to maturity of current bills, Yen, euro vs. dollar; dollar vs. Cotillas & Associates
benchmark over the past year notes and bonds major U.S. trading partners
Bankrate.com avg: 3.94% June 9 prelim. Chicago City- 399.7 N.R. N.R. A Siebert
Supreme Lending 3.62% 5.00% 8% Illinois Cisneros
4.00% Bellevue, WA 206-963-4788 WSJs
$ index Shank & Co
4.00 4 s
t Capital Funding Mortgage 3.63% Yen
3.00
30-year xed-rate Newtown, PA 215-860-1513 3.00 0 June 9 prelim. East Bay MUD 453.8 N.R. N.R. N.R. Barclays
mortgage Fidelity Bank Trust 3.63%
t 2.00 Friday 2.00
t

Dubuque, IA 563-557-2300 4 s June 9 prelim. Los Angeles 800.0 N.R. N.R. N.R. Citi
10-year Treasury
Euro Co-California
note yield 1.00 Mortgage Solutions Financial 3.63% 1.00 8
One year ago
t

Bothell, WA 425-780-4538
0.00 0.00 12 June 9 prelim. Metro 550.0 N.R. N.R. N.R. RBC Cptl Mkt
J J A S O N D J F M A MJ Camelot Mortgage Group, Inc. 3.75% 1 3 6 1 2 3 5 710 30 2016 2017 Washington
2016 2017 Franktown, CO 303-814-2310 month(s) years Airports Auth
Yield/Rate (%) 52-Week Range (%) 3-yr chg maturity
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group June 9 prelim. New Hanover 213.8 N.R. N.R. N.R. Fifth Third
Federal-funds rate target 0.75-1.00 0.75-1.00 0.25 l 1.00 0.75 Co-North Securities
Prime rate* 4.00 4.00 3.50 l 4.00 0.75
Corporate Borrowing Rates and Yields Carolina
Libor, 3-month 1.22 1.20 0.62 l 1.22 1.00 Spread +/- Treasurys,
Yield (%) in basis pts, 52-wk Range Total Return
Money market, annual yield 0.33 0.32 0.23 l 0.34 -0.07 Bond total return index Last Wk ago Last Low High 52-wk 3-yr June 9 prelim. Riverside Co- 340.0 N.R. N.R. N.R. J P Morgan Securities LLC
Five-year CD, annual yield 1.33 1.31 1.17 l 1.34 -0.05 California
10-yr Treasury, Ryan ALM 2.159 2.248 -2.18 3.14
30-year mortgage, fixed 3.94 3.95 3.43 l 4.33 -0.28
DJ Corporate 2.957 3.034 2.68 3.99 June 9 prelim. St Louis City- 160.1 N.R. N.R. N.R. Wells Fargo &
15-year mortgage, fixed 3.15 3.15 2.70 l 3.50 -0.16
Aggregate, Barclays Capital 2.450 2.500 43 41 57 1.66 2.71 Missouri Co
Jumbo mortgages, $424,100-plus 4.42 4.45 4.02 l 4.88 -0.12
High Yield 100, Merrill Lynch 5.102 5.117 336 316 575 12.789 3.489
Five-year adj mortgage (ARM) 3.36 3.34 2.97 l 4.03 -0.16
Fixed-Rate MBS, Barclays 2.720 2.780 29 10 33 1.21 2.52 June 9 prelim. Texas A&M 398.7 N.R. Aaa AAA BoA Merrill
New-car loan, 48-month 3.08 3.07 2.87 l 3.36 0.01
Muni Master, Merrill 1.843 1.889 15 -6 16 1.107 2.964 University
HELOC, $30,000 4.95 4.93 4.57 l 4.96 0.34
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest EMBI Global, J.P. Morgan 5.410 5.459 323 315 435 8.992 5.093 System
banks. Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch Source:Thomson Reuters/Ipreo
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Monday, June 5, 2017 | B7

BUSINESS NEWS

States Press AmEx Case

BY ANNAMARIA ANDRIOTIS Supreme Court to review its chants that choose to accept that accept its cards to en-
antitrust case against AmEx cards cant steer con- courage shoppers to use
Attorneys general from 11 AmEx. We believe the DOJs sumers into using cards on cheaper cards.
states filed a petition Friday decision not to proceed sends other networks. The costs at issue are the
asking the U.S. Supreme Court a strong signal that this The states along with the fees merchants pay the card
to review their case against seven-year litigation should Justice Department were company when people

SCOTT EELLS/BLOOMBERG NEWS

American Express Co., which come to an end, an AmEx plaintiffs in this use its cards to shop.
centers on whether the card spokesman said. case against AmEx when a fed- AmEx has said in financial
company can ban merchants Ohio is the lead state in the eral appeals court ruled in fa- filings that losing this case
from encouraging consumers 48-page states petition and is vor of American Express last could have a material adverse
to use cards that run on com- joined by Connecticut, Idaho, September. effect on its business.
peting networks, like Visa and Illinois, Iowa, Maryland, Mich- The appeals court reversed The AmEx statement said
Mastercard. igan, Montana, Rhode Island, a lower-court ruling that said the company will continue to
Also Friday, the Justice De- Utah and Vermont. AmEx violated antitrust rules vigorously defend the appeals
partment said it wont ask the AmEx card policy says mer- because it didnt allow stores court ruling. At issue are fees merchants pay the credit-card companies.

Closed-End Funds | WSJ.com/funds

Listed are the 300 largest closed-end funds as
measured by assets.
Closed-end funds sell a limited number of shares and
invest the proceeds in securities. Unlike open-end
funds, closed-ends generally do not buy their shares
back from investors who wish to cash in their holdings.
Instead, fund shares trade on a stock exchange.
a-The NAV and market price are ex dividend. b-The
NAV is fully diluted. c-NAV is as of Thursdays close. d-
NAV is as of Wednesdays close. e-NAV assumes rights
offering is fully subscribed. f-Rights offering in process.
g-Rights offering announced. h-Lipper data has been
adjusted for rights offering. j-Rights offering has
expired, but Lipper data not yet adjusted. l-NAV as of
previous day. o-Tender offer in process. v-NAV is
converted at the commercial Rand rate. w-Convertible
Note-NAV (not market) conversion value. y-NAV and
market price are in Canadian dollars. NA signifies that
the information is not available or not applicable. NS
signifies fund not in existence of entire period.
12 month yield is computed by dividing income
dividends paid (during the previous twelve months for
periods ending at month-end or during the previous
fifty-two weeks for periods ending at any time other
than month-end) by the latest month-end market price
adjusted for capital gains distributions.
Source: Lipper
Friday, June 2, 2017
52 wk
Prem Ttl
Fund (SYM) NAV Close /Disc Ret
General Equity Funds
Adams Divers Equity Fd ADX 17.03 14.43 -15.3 21.5
Boulder Growth & Income BIF 11.49 9.49 -17.4 23.4
Central Securities CET 30.33 25.05 -17.4 29.7
CohSteer Opprtnty Fd FOF 13.84 13.05 -5.7 24.9
Cornerstone Strategic CLM 13.45 16.94 +25.9 28.3
EtnVnc TaxAdvDiv EVT 22.37 21.77 -2.7 15.9
Gabelli Dividend & Incm GDV 23.39 21.89 -6.4 22.0
Gabelli Equity Trust GAB 6.38 6.27 -1.7 22.8
Genl American Investors GAM 40.96 34.32 -16.2 21.2
HnckJohn TxAdv HTD 26.79 25.95 -3.1 13.3
Liberty All-Star Equity USA 6.54 5.66 -13.5 22.6
Royce Micro-Cap RMT 9.90 8.74 -11.7 25.6
Royce Value Trust RVT 16.57 14.69 -11.3 30.8
Source Capital SOR 43.18 38.36 -11.2 8.4
Tri-Continental TY 27.87 24.24 -13.0 22.8
Specialized Equity Funds
Adams Natural Rscs Fd PEO 21.51 18.73 -12.9 -0.
AllnzGI NFJ Div Interest NFJ 14.56 13.34 -8.4 15.6
AlpnGlblPrProp AWP 7.19 6.24 -13.2 24.4
ASA Gold & Prec Metals ASA 13.58 11.90 -12.4 -7.8
BlkRk Enh Cap Inco CII 15.94 14.92 -6.4 18.1
BlkRk Engy Res Tr BGR 14.51 13.26 -8.6 0.7
BlackRock Enh Eq Div Tr BDJ 9.47 8.75 -7.6 19.5
Blackrock Global Trust BOE 14.58 13.43 -7.9 19.2
BlkRk Health Sci BME 34.69 35.76 +3.1 7.3
BlkRk Intl Grwth&Inco BGY 6.85 6.39 -6.7 15.8
BlackRck Rscs Comm Str Tr BCX 9.37 8.26 -11.8 16.4
BlackRock Science & Tech BST 24.57 22.92 -6.7 49.1
BlackRock Utility & Infr BUI 21.20 21.38 +0.8 16.4
CBREClarionGlblRlEstIncm IGR 8.77 7.70 -12.2 6.2
Central Fund of Canada CEF 13.63 12.72 -6.7 -0.2
ClearBridge Amer Engy CBA 9.87 9.13 -7.5 14.7
ClearBridge Engy MLP Fd CEM 16.30 15.89 -2.5 5.1
Clearbridge Engy MLP Opp EMO 13.52 12.92 -4.4 9.95
Clearbridge Engy MLP TR CTR 13.78 13.04 -5.4 12.6
Cohen & Steers Infr Fd UTF 25.53 23.40 -8.3 27.7
C&S MLP Incm & Engy Opp MIE 11.70 10.93 -6.6 17.4
Cohen & Steers Qual Inc RQI 13.61 12.54 -7.9 8.0
CohnStrsPfdInco RNP 22.68 20.45 -9.8 15.7
Cohen & Steers TR RFI 13.53 12.61 -6.8 5.2
CLSeligmn Prem Tech Gr Fd STK 21.28 22.70 +6.7 47.8
Divers Real Asset Incm Fd DRA 19.46 17.70 -9.0 16.7
52 wk
Prem Ttl
Fund (SYM) NAV Close /Disc Ret
Duff & Phelps DNP 10.12 11.05 +9.2 16.5
Duff&PhelpsGblUtilIncFd DPG 18.91 17.14 -9.4 9.5
Eaton Vance Eqty Inco Fd EOI 14.37 13.59 -5.4 11.8
Eaton Vance Eqty Inco II EOS 15.27 14.75 -3.4 21.5
EtnVncRskMngd ETJ 10.07 9.31 -7.5 6.0
Etn Vnc Tax Mgd Buy-Write ETB 16.02 16.41 +2.4 12.1
Eaton Vance BuyWrite Opp ETV 14.49 15.44 +6.6 14.4
Eaton Vance Tax-Mng Div ETY 11.88 11.47 -3.5 18.7
EatonVanceTax-MngdOpp ETW 11.43 11.59 +1.4 21.1
EtnVncTxMngGlDvEqInc EXG 9.48 9.10 -4.0 13.8
Fiduciary/Clymr Opp Fd FMO 13.66 13.88 +1.6 16.1
FT Energy Inc & Growth Fd FEN 24.60 25.97 +5.6 14.5
FstTrEnhEqtIncFd FFA 16.29 14.93 -8.3 21.3
First Tr Engy Infr Fd FIF 19.41 18.26 -5.9 16.8
First Tr MLP & Engy Incm FEI 15.02 15.74 +4.8 12.0
Gabelli Utility Tr GUT 5.66 6.90 +21.9 16.8
GAMCOGlblGoldNatRscs&Inc GGN 5.58 5.67 +1.6 0.4
GoldmanSachsMLPIncOpp GMZ 9.95 NA 12.7
Goldman Sachs MLPEnergy GER 7.51 NA 16.9
John Hancock Finl Opps Fd BTO 33.68 34.46 +2.3 31.8
Macquarie Glbl Infrstrctr MGU 28.05 24.90 -11.2 23.7
NeubergerBermanMLPIncm NML 10.34 9.51 -8.0 27.4
Neubrgr Brm Rl Est Sec Fd NRO 5.90 5.30 -10.2 8.5
Nuveen Dow 30 Dynamic DIAX 17.39 16.43 -5.5 22.5
Nuveen Diversified Div JDD 12.99 12.55 -3.4 21.9
Nuveen Engy MLP Fd JMF 12.36 12.95 +4.8 17.4
NuvNASDAQ100DynOver QQQX 21.98 22.71 +3.3 34.6
Nuveen Real Est Incm Fd JRS 11.42 11.42 0.0 12.4
NuvS&P500DynOverwrite SPXX 15.83 NA 23.7
NuveenS&P500Buy-Write BXMX 14.12 14.47 +2.5 21.1
Reaves Utility Fund UTG 35.39 35.85 +1.3 27.3
Salient Midstream & MLP SMM 12.75 12.07 -5.3 19.3
Tekla Hlthcr Investors HQH 24.81 24.51 -1.2 2.5
Tekla Healthcare Opps Fd THQ 19.24 17.66 -8.2 14.6
Tekla Life Sciences HQL 20.09 20.36 +1.3 17.5
Tekla World Hlthcr Fd THW 15.49 14.66 -5.4 12.2
Tortoise Engy Ind Fd NDP 13.42 14.43 +7.5 17.5
Tortoise Energy TYG 28.34 31.59 +11.5 14.2
Tortoise MLP Fund NTG 18.69 19.15 +2.5 11.1
Tortoise Pipeline & Engy TTP 20.94 19.95 -4.7 21.0
Voya Gl Equity Div IGD 8.11 7.45 -8.1 20.1
Income Preferred Stock Funds
Calamos Strat Fd CSQ 12.48 11.82 -5.3 29.4
Cohen & Steers Dur Pfd LDP 27.01 26.52 -1.8 17.2
Cohen & Strs Sel Prf Inco PSF 27.66 28.03 +1.3 14.0
FT Interm Duration Pfd FPF 24.60 24.48 -0.5 15.5
Flaherty & Crumrine Dyn DFP 26.23 25.70 -2.0 15.3
Flaherty & Crumrine Pfd FFC 20.24 21.58 +6.6 12.4
John Hancock Pfd Income HPI 21.89 22.10 +1.0 5.2
John Hancock Pfd II HPF 21.63 21.86 +1.1 5.3
John Hancock Pfd Inc III HPS 19.30 19.07 -1.2 5.9
JHancock Pr Div PDT 16.32 16.94 +3.8 14.5
LMP Cap & Inco Fd SCD 14.27 NA 21.3
Nuveen Preferred & Incm JPI 25.65 25.08 -2.2 13.5
Nuveen Pfd Incm Opps Fd JPC 10.75 10.40 -3.3 11.5
Nuveen Pfd Secs Incm Fd JPS 10.26 10.21 -0.5 19.4
TCW Strategic Income Fund TSI 5.54 NA 10.0
Virtus Global Dividend ZTR 13.07 12.70 -2.8 25.4
Convertible Sec's. Funds
AdvntClymrFd AVK 17.45 16.35 -6.3 24.1
AllianzGI Conv & Incm NCV 6.78 6.99 +3.1 29.7
AllianzGI Conv & Incm II NCZ 6.08 6.24 +2.6 32.6
AllianzGI Equity & Conv NIE 22.34 20.04 -10.3 18.1
Calamos Conv Hi Inco Fd CHY 11.88 11.90 +0.2 27.8
Calamos CHI 11.29 11.36 +0.6 30.4
52 wk
Prem Ttl
Fund (SYM) NAV Close /Disc Ret
World Equity Funds
Alpine Tot Dyn Div AOD 9.81 8.76 -10.7 26.2
Calamos Glbl Dyn Inc CHW 8.99 8.47 -5.8 32.8
Cdn Genl Inv CGI 29.92 22.19 -25.8 27.0
China Fund CHN 20.34 18.20 -10.5 31.1
Clough Global Opp Fd GLO 11.75 10.52 -10.5 23.9
EtnVncTxAdvGblDiv ETG 18.08 16.93 -6.4 24.2
EatonVance TxAdv Opport ETO 24.28 24.20 -0.3 23.7
First Trust Dynamic Eur FDEU 20.09 19.10 -4.9 30.4
India Fund IFN 30.53 27.39 -10.3 21.1
Japan Sml Cap JOF 13.11 11.54 -12.0 28.7
Korea Fund KF 45.34 40.43 -10.8 27.2
Mexico Fund MXF 18.65 16.54 -11.3 3.7
MS China a Shr Fd CAF 24.21 21.13 -12.7 26.7
MS Emerging Fund MSF 18.19 16.29 -10.4 22.8
MS India Invest IIF 37.91 33.66 -11.2 31.1
New Germany Fund GF 19.08 16.96 -11.1 29.8
Swiss Helvetia Fund SWZ 14.11 12.73 -9.8 25.3
Templeton Dragon TDF 22.42 19.72 -12.0 25.7
Templeton Emerging EMF 16.74 15.20 -9.2 41.1
Voya Infr Indls & Matls IDE 16.15 15.14 -6.3 35.6
Wells Fargo Gl Div Opp EOD 6.40 NA 14.9
Prem12 Mo
Fund (SYM) NAV Close /Disc Yld
U.S. Mortgage Bond Funds
BlackRock Income Trust BKT 6.77 6.31 -6.8 5.0
Nuveen Mtg Opp Term Fd JLS 26.34 25.36 -3.7 5.3
Investment Grade Bond Funds
Blackrock Core Bond Tr BHK 14.75 13.77 -6.6 5.7
BlkRk Credit Alloc Incm BTZ 14.79 13.52 -8.6 6.4
John Hancock Income Secs JHS 15.63 14.67 -6.1 5.8
MFS Inc Tr MIN 4.60 4.34 -5.7 9.1
WstAstClymr InfLnkd Fd WIW NA 11.16 NA 3.2
WstAssetClymr InflLnk Sec WIA NA 11.40 NA 2.8
Loan Participation Funds
Apollo Sr Fltg Rate Fd AFT 18.18 17.25 -5.1 7.1
BlackRock FR Incm Strat FRA 15.03 14.42 -4.1 5.6
Blkrk FltRt InTr BGT 14.52 14.41 -0.8 5.2
BlackstoneGSO Strat Cred BGB NA 16.20 NA 8.2
Blackstone GSO Sr Float BSL NA 17.96 NA 6.4
Eagle Point Credit ECC NA 20.40 NA 9.9
Eaton Vance FR Incm Tr EFT 15.58 15.10 -3.1 5.7
EatonVnc SrFltRate EFR 15.24 14.91 -2.2 6.1
Eaton Vance Sr Incm Tr EVF 7.19 6.75 -6.1 5.8
First Trust Sr FR Fd II FCT 14.23 13.57 -4.6 6.0
Invesco Credit Opps Fund VTA 13.18 12.19 -7.5 7.1
Invesco Senior Income Tr VVR 4.90 4.68 -4.5 6.0
Nuveen Credit Strt Inc Fd JQC 9.35 8.73 -6.6 7.1
NuvFloatRteInco Fd JFR 11.81 11.95 +1.2 6.5
Nuv Float Rte Opp Fd JRO 11.74 11.90 +1.4 6.8
Nuveen Senior Income Fund NSL 6.98 6.84 -2.0 6.6
Pioneer Floating Rate Tr PHD 12.56 11.87 -5.5 6.1
Voya Prime Rate Trust PPR 5.75 5.38 -6.4 5.9
High Yield Bond Funds
AllianceBernstein Glbl AWF 14.08 12.90 -8.4 7.2
Barings Glbl Short Dur HY BGH 21.64 20.18 -6.7 9.0
BlackRock Corp Hi Yd Fd HYT 12.26 11.17 -8.9 7.9
BlkRk Debt Strat Fd DSU 12.75 11.69 -8.3 6.6
BlackRockDurInco Tr BLW 17.02 15.76 -7.4 9.3
Brookfield Real Assets RA 25.76 NA NA NS
Credit Suisse High Yld DHY 2.81 2.81 0.0 9.6
DoubleLine Incm Solutions DSL NA 20.71 NA 8.7
Dreyfus Hi Yd Strat Fd DHF 3.62 3.54 -2.2 8.9
Fst Tr Hi Inc Lg/Shrt Fd FSD 18.16 17.14 -5.6 6.8
Guggenheim Strat Opps Fd GOF NA 21.08 NA 10.4
Prem12 Mo
Fund (SYM) NAV Close /Disc Yld
Ivy High Income Opps Fund IVH 16.52 15.85 -4.1 9.4
Neuberger Berman HYS NHS 13.53 12.05 -10.9 7.8
NexPoint Credit Strat Fd NHF 25.17 21.90 -13.0 11.9
Nuveen Gl Hi Incm Fd JGH 18.61 17.14 -7.9 8.6
Nuveen High Incm Dec18 JHA 10.16 10.11 -0.5 5.7
Nuveen High Incm Dec19 JHD 10.34 10.22 -1.2 5.9
Nuveen Hi Incm Nov 2021 JHB 10.22 10.11 -1.1 NS
Pioneer High Income Trust PHT 10.85 10.04 -7.5 9.1
Prud Gl Shrt Dur Hi Yd GHY 16.65 15.19 -8.8 8.0
Prudentl Sh Dur Hi Yd Fd ISD 16.88 15.60 -7.6 8.0
Wells Fargo Incm Opps Fd EAD NA 8.65 NA 9.1
Wstrn Asset Glbl Hi Inco EHI NA 10.27 NA 10.1
Wstrn Asset High Inco II HIX NA 7.34 NA 9.2
Wstrn Asset Opp Fd HIO NA 5.18 NA 7.6
West Asst HY Def Opp Fd HYI NA 15.54 NA 8.2
Other Domestic Taxable Bond Funds
Apollo Tactical Incm Fd AIF 17.54 16.43 -6.3 9.0
Ares Dynamic Credit Alloc ARDC NA 16.26 NA 7.6
Barings Corp Investors MCI NA 15.13 NA 3.9
BlackRock Multi-Sector IT BIT 19.50 18.02 -7.6 10.6
BlackRock Taxable Mun Bd BBN 23.12 23.01 -0.5 6.8
Doubleline Oppor Credit DBL NA 25.52 NA 7.9
Duff & Phelps Utl & Cp Bd DUC 9.93 9.24 -6.9 6.4
EtnVncLtdFd EVV 15.26 13.99 -8.3 7.7
Franklin Ltd Duration IT FTF NA 12.07 NA 9.4
GuggenheimTaxableMuni GBAB NA 22.92 NA 6.6
John Hancock Investors JHI 18.84 17.70 -6.1 7.5
KKR Income Opps Fund KIO NA NA NA 8.9
MFS Charter MCR 9.46 8.70 -8.0 8.5
MFS Multimkt MMT 6.76 6.24 -7.7 8.5
Nuveen Build Am Bd Fd NBB 21.89 21.07 -3.7 6.0
PIMCO Corporate & Incm PTY NA 16.43 NA 10.5
PIMCO Corporate & Incm PCN NA 17.03 NA 10.4
PIMCO HiInco PHK NA 8.94 NA 12.9
PIMCO Inco Str Fd PFL NA 11.84 NA 9.1
PIMCO Incm Strategy Fd II PFN NA 10.51 NA 9.2
Putnam Mas Inco PIM 5.03 4.74 -5.8 6.5
Putnam Premier Income Tr PPT 5.55 5.18 -6.7 6.0
Wells Fargo Multi-Sector ERC NA 13.41 NA 8.6
World Income Funds
Abeerden Asia-Pacific FAX 5.47 5.02 -8.2 7.6
Etn Vnc Short Dur Fd EVG NA 14.05 NA 7.4
Legg Mason BW Glbl Incm BWG NA 13.32 NA 4.7
MS EmMktDomDebt EDD 8.95 8.23 -8.0 8.7
MS Emerging Mkts Debt MSD 11.12 10.07 -9.4 6.2
PIMCO Dynamic Credit PCI NA 22.41 NA 11.6
PIMCODynamicIncomeFund PDI NA 29.78 NA 13.8
PIMCO Income Opportunity PKO NA 26.55 NA 9.97
PIMCO Strat Income Fund RCS NA 10.40 NA 9.0
Stone Harbor Em Mkts Fd EDF 15.02 16.79 +11.8 12.9
Templeton Emerging TEI 12.87 11.42 -11.3 6.2
Templeton Global GIM 7.40 6.65 -10.1 6.7
Wstrn Asset Gl Def Opp Fd GDO NA 17.99 NA 7.6
National Muni Bond Funds
AllianceBrnstn NtlMun AFB 15.03 13.77 -8.4 4.8
Blackrock Invest BKN 15.83 14.88 -6.0 5.5
BlackRockMun2030Target BTT 23.85 23.43 -1.8 4.1
BlackRock Municipal Trust BFK 14.48 14.34 -1.0 5.8
BlackRockMuni BLE 15.14 15.33 +1.3 5.8
BlackRockMuni Tr BYM 15.20 14.33 -5.7 5.5
BlkRk MuniAssets Fd MUA 14.21 14.88 +4.7 4.6
BlkRk Munienhanced MEN 11.96 11.96 0.0 5.7
BlkRk MuniHldgs Inv MFL 14.88 14.66 -1.5 5.8
BlkRk MuniHldgs Qlty II MUE 14.23 13.84 -2.7 5.5
BlkRk MuniHldgs MHD 17.08 17.34 +1.5 5.6
Prem12 Mo Prem12 Mo
Fund (SYM) NAV Close /Disc Yld Fund (SYM) NAV Close /Disc Yld
BlkRk MuniVest MVF 9.75 9.79 +0.4 6.0 Nuveen OH Qual Muni NUO 16.79 15.14 -9.8 4.8
BlkRk MuniVest II MVT 15.36 16.07 +4.6 5.8 Nuveen PA Qual Muni NQP 15.30 13.51 -11.7 5.3
BlkRk MuniYield MYD 14.92 14.93 +0.1 5.8 Nuveen VA Qual Muni NPV 14.54 13.30 -8.5 4.4
BlkRk MuniYld Quality MQY 15.83 15.52 -2.0 5.6 PIMCO California Muni PCQ NA 16.96 NA 5.5
BlkRk MuniYld Qlty II MQT 13.92 13.21 -5.1 5.6 PIMCO California Mun II PCK NA 10.15 NA 5.6
BlRkMunyldQltyIII MYI 14.46 14.48 +0.1 5.6 52 wk
Deutsche Mun Income Tr KTF 12.79 13.68 +7.0 6.1 Prem Ttl
Dreyfus Mun Bd Infr Fd DMB 14.15 13.19 -6.8 5.2 Fund (SYM) NAV Close /Disc Ret
Dreyfus Municipal Income DMF 9.42 9.11 -3.3 5.4
General Equity Funds
Dreyfus Strat Muni Bond DSM 8.50 8.47 -0.4 5.8 Specialized Equity Funds
Dreyfus Strategic Munis LEO 8.72 8.84 +1.4 5.8 Griffin Inst Access RE:A 26.76 NA NA 5.4
Eaton Vance Mun Bd Fd EIM 13.88 12.71 -8.4 5.2
Griffin Inst Access RE:C 26.41 NA NA 4.6
Eaton Vance Mun Income EVN 13.52 12.95 -4.2 5.4
Griffin Inst Access RE:I 26.88 NA NA 5.7
EV National Municipal Opp EOT 22.00 21.96 -0.2 4.6 Griffin Inst Access RE:L 26.75 NA NA NS
Invesco Adv Mun Incm II VKI 12.30 11.58 -5.9 5.9
Griffin Inst Access RE:M 26.69 NA NA NS
Invesco Mun Incm Opps Tr OIA 7.62 7.98 +4.7 5.0
NexPointRlEstStrat;A 20.96 NA NA NS
Invesco Mun Opportunity VMO 13.68 13.19 -3.6 6.2 NexPointRlEstStrat;C 20.90 NA NA NS
Invesco Municipal Trust VKQ 13.66 12.80 -6.3 5.9 NexPointRlEstStrat;Z 20.90 NA NA NS
Invesco Qlty Mun Inco IQI 13.76 12.69 -7.8 5.7 SharesPost 100 25.79 NA NA 1.1
Invesco Inv Grade Muni VGM 14.17 13.28 -6.3 5.8 Versus Cap MMgr RE Inc:F 27.51 NA NA 5.3
Invesco Value Mun Incm Tr IIM 16.41 15.11 -7.9 5.0
Versus Cap MMgr RE Inc:I 27.57 NA NA 5.6
MainStay DefinedTerm MMD 20.16 20.03 -0.6 5.4 Wildermuth Endwmnt Str 12.34 NA NA 12.0
MFS Munl Inco MFM 7.42 7.23 -2.6 5.2 Wildermuth Endwmnt S:C 12.22 NA NA 11.1
NuveenAMT-FreeMunValue NUW 17.06 17.26 +1.2 4.2 Income Preferred Stock Funds
Nuveen AMT-Free Quality NEA 15.11 13.77 -8.9 5.5 Convertible Sec's. Funds
Nuveen AMT-Free Mun NVG 16.26 15.15 -6.8 5.9 Calmos Dyn Conv and Inc CCD 20.75 19.95 -3.9 15.9
Nuveen Mun Credit Incm Fd NZF 15.90 14.99 -5.7 6.0 World Equity Funds
Nuveen Enhncd Mun Val Fd NEV 15.14 14.45 -4.6 6.0 BMO LGM Front ME 9.91 NA NA 13.7
Nuveen Intermed Dur Mun NID 13.75 13.42 -2.4 4.9 U.S. Mortgage Bond Funds
Vertical Capital Income 12.56 NA NA 3.0
NuveenMuniIncoOpp Fd NMZ 13.37 13.47 +0.7 6.3
Loan Participation Funds
Nuveen Muni Value Fund NUV 10.31 10.14 -1.6 3.8
504 Fund 9.87 NA NA 3.3
Nuveen Qual Mun Incm Fd NAD 15.48 14.12 -8.8 5.8
FedProj&TrFinanceTender 10.06 NA NA NS
Nuveen Sel Tax Free NXP 15.35 14.40 -6.2 3.8
FS Global Crdt Opptys D NA NA NA 2.5
Nuveen Sel TF NXQ 14.80 13.78 -6.9 3.7
Invesco Sr Loan A 6.66 NA NA 4.6
PIMCO MuniFd PMF NA 13.66 NA 6.5
Invesco Sr Loan B 6.66 NA NA 4.6
Pimco Muni Inc II PML NA 13.07 NA 6.0
Invesco Sr Loan C 6.67 NA NA 3.9
PIMCO Muni Inc III PMX NA 11.75 NA 6.1
Pioneer Mun Hi Inc Adv Tr MAV 12.13 11.58 -4.5 6.0 Prem12 Mo
Pioneer Mun Hi Incm Tr MHI 12.93 12.01 -7.1 5.5 Fund (SYM) NAV Close /Disc Yld
7.92 7.48 -5.6 5.5
Putnam Tr PMM Invesco Sr Loan IB 6.66 NA NA 4.8
PutnamMuniOpportunities PMO 13.23 12.38 -6.4 5.4 Invesco Sr Loan IC 6.66 NA NA 4.7
Wstrn Asset Mngd Muni MMU NA 13.91 NA 5.1 Invesco Sr Loan Y 6.66 NA NA 4.8
WesternAssetMunTrFund MTT NA 22.69 NA 4.8 RiverNorth MP Lending RMPLX NA NA NA NS
Single State Muni Bond Voya Senior Income:A 12.72 NA NA 5.4
BlackRock CA Municipal Tr BFZ 15.36 14.48 -5.7 5.4 Voya Senior Income:C 12.69 NA NA 4.9
BlkRk MuniHldgs CA Qlty MUC 15.56 14.47 -7.0 5.1 Voya Senior Income:I 12.68 NA NA 5.7
Blkrck MunHl NJ Qlty MUJ 15.58 14.59 -6.4 5.5 Voya Senior Income:W 12.73 NA NA 5.7
BlRk MuHldg NY Qlty MHN 14.85 13.84 -6.8 5.0 High Yield Bond Funds
BlkRk MuniYld CA Fd MYC 15.62 15.25 -2.4 5.3 Griffin Inst Access Cd:A NA NA NA NS
BlkRk MuniYld CA Quality MCA 15.73 15.09 -4.1 5.1 Griffin Inst Access Cd:C NA NA NA NS
BlkRk MuniYld MI Qlty MIY 15.50 14.07 -9.2 5.4 Griffin Inst Access Cd:I NA NA NA NS
BlkRk MuniYld NJ Fd MYJ 15.88 15.80 -0.5 5.7 PIMCO Flexible Cr I;Inst NA NA NA NS
BlRk Muyld NY Qlty MYN 14.25 13.09 -8.1 4.9
PionrILSInterval 10.49 NA NA 9.6
WA Middle Mkt Dbt NA NA NA 11.1
Eaton Vance CA Mun Bd EVM 12.60 11.66 -7.5 5.2
WA Middle Mkt Inc WMF NA NA NA 11.2
Invesco CA Value Mun Incm VCV 13.61 12.70 -6.7 5.1
Other Domestic Taxable Bond Funds
Invesco PA Value Mun Incm VPV 14.16 12.44 -12.2 5.3 Capstone Church Capital 11.82 NA NA 1.0
Invesco Inv Grade NY Muni VTN 14.79 13.77 -6.9 5.3 CION Ares Dvsfd Crdt Fd NA NA NA NS
Nuveen CA AMT-Free Qual NKX 15.86 15.44 -2.6 5.3 GL Beyond Income 4.06 NA NA NE
Nuveen CA Muni Value NCA 10.44 10.53 +0.9 4.1 Palmer Square Opp Income NA NA NA 6.4
Nuveen CA Quality Muni NAC 15.75 14.90 -5.4 5.6 Resource Credit Inc:A NA NA NA 6.3
Nuveen MD Qual Muni NMY 14.71 13.15 -10.6 5.0 Resource Credit Inc:C NA NA NA 5.6
Nuveen MI Qual Muni NUM 15.56 13.75 -11.6 5.0 Resource Credit Inc:D NA NA NA 5.8
Nuveen NC Qual Muni NNC 15.03 13.32 -11.4 4.2 Resource Credit Inc:I NA NA NA 6.4
Nuveen NJ Qual Muni NXJ 15.79 13.85 -12.3 5.3 Resource Credit Inc:T NA NA NA 5.6
Nuveen NY AMT-Free NRK 14.63 13.23 -9.6 5.0 Resource Credit Inc:U NA NA NA 6.3
Nuveen NY Qual Muni NAN 15.24 13.95 -8.5 5.2 Resource Credit Inc:W NA NA NA 5.9

Borrowing Benchmarks | WSJ.com/bonds Insider-Trading Spotlight

Trading by insiders of a corporation, such as a companys CEO, vice president or director, potentially conveys
Money Rates June 2, 2017 new information about the prospects of a company. Insiders are required to report large trades to the SEC
within two business days. Heres a look at the biggest individual trades by insiders, based on data received by
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a Thomson Financial on June 2, and year-to-date stock performance of the company
guide to general levels but dont always represent actual transactions. KEY: B: beneficial owner of more than 10% of a security class CB: chairman CEO: chief executive officer CFO: chief financial officer
CO: chief operating officer D: director DO: director and beneficial owner GC: general counsel H: officer, director and beneficial owner
Week 52-WEEK
Inflation Latest ago High Low Notes on data: I: indirect transaction filed through a trust, insider spouse, minor child or other O: officer OD: officer and director P: president UT:
April index Chg From (%) U.S. prime rate is the base rate on corporate unknown VP: vice president Excludes pure options transactions
level March '17 April '16 Six month -0.255 -0.254 -0.154 -0.255 loans posted by at least 70% of the 10
One year -0.131 -0.130 -0.016 -0.131 largest U.S. banks, and is effective March
U.S. consumer price index 16, 2017. Other prime rates arent directly Biggest weekly individual trades
Value 52-Week
All items 244.524 0.30 2.2 Latest Traded High Low comparable; lending practices vary widely Based on reports filed with regulators this past week
by location; Discount rate is effective March
Core 251.642 0.14 1.9 No. of shrs in Price range ($) $ Value
DTCC GCF Repo Index 16, 2017. DTCC GCF Repo Index is Depository
Trust & Clearing Corp.'s weighted average Date(s) Company Symbol Insider Title trans (000s) in transaction (000s) Close ($) Ytd (%)
International rates Treasury 0.928 41.620 1.266 0.244
for overnight trades in applicable CUSIPs.
MBS 0.934 76.250 1.328 0.257
Week 52-Week
Value traded is in billions of U.S. dollars.
Federal-funds rates are Tullett Prebon rates
Buyers
Latest ago High Low Open Implied
Settle Change Interest Rate as of 5:30 p.m. ET. Futures on the DTCC GCF May. 24-26 Bioverativ BIVV A. Denner DI 920 54.16-57.21 51,307 58.12 22.4
Prime rates Repo Index are traded on NYSE Liffe US. May. 30 A. Denner DI 90 55.93 5,033
DTCC GCF Repo Index Futures Sources: Federal Reserve; Bureau of Labor
U.S. 4.00 4.00 4.00 3.50 May. 26-30 Advance Auto Parts AAP J. Smith DI 350 132.98-134.98 47,000 137.80 -18.5
Treasury Jun 98.990 -0.005 5916 1.010 Statistics; DTCC; SIX Financial Information; May. 26 T. Greco CEO 16 134.43-135.34 2,154
Canada 2.70 2.70 2.70 2.70 Treasury Jly 98.875 unch. 1884 1.125 General Electric Capital Corp.; Tullett
Japan 1.475 1.475 1.475 1.475 Treasury Aug 98.865 0.005 310 1.135 Prebon Information, Ltd. May. 25-30 Medley Capital MCC B. Taube CEOI 436 6.06-6.10 2,652 6.10 -18.8
May. 25-30 S. Taube DI 436 6.06-6.10 2,652
Policy Rates
May. 24 Continental Resources CLR H. Hamm CEOI 36 42.05 1,533 36.07 -30.0
Euro zone 0.00 0.00 0.00 0.00
80 19.05 1,516 19.09 4.3
Switzerland
Britain
0.50
0.25
0.50
0.25
0.50
0.50
0.50
0.25
A Week in the Life of the DJIA May. 26
May. 26
Coty
Wesco Aircraft Holdings
COTY
WAIR
E. Huber
T. Bancroft
O
DI 150 9.45 1,418 9.85 -34.1
Australia 1.50 1.50 1.75 1.50 A look at how the Dow Jones Industrial Average component stocks May. 25-26 American Assets Trust AAT E. Rady CEOI 33 39.30-39.68 1,291 40.12 -6.9
Overnight repurchase did in the past week and how much each moved the index. The DJIA May. 30-31 E. Rady CEOI 31 39.03-39.19 1,220
U.S. 0.94 0.93 1.30 0.15 gained 126.01 points, or 0.60%, on the week. A $1 change in the price May. 24-26 Seritage Growth Properties SRG B. Berkowitz BI 31 39.56-39.82 1,238 40.85 -4.4
of any DJIA stock = 6.85-point change in the average. May. 31 Akamai Technologies AKAM F. Leighton CEO 21 47.17 1,000 48.53 -27.2
U.S. government rates
The Weeks Action May. 30 PBF Energy PBF T. Nimbley CEO 50 19.69 985 19.99 -28.3
Discount Pct Stock price Point chg $1,000 Invested(year-end '16) May. 24 Huntington Ingalls Industries HII C. Kastner CFO 4 189.40 792 193.79 5.2
1.50 1.50 1.50 1.00 chg (%) change in average Company Symbol Close $1,000
June 1 Tallgrass Energy Partners TEP D. Dehaemers CEOI 15 49.61 767 48.34 1.9
3.42 2.66 18.22 Du Pont DD $80.51 N/A
Federal funds May. 30 Alnylam Pharmaceuticals ALNY L. Keating GC 12 65.35 752 71.99 92.3
Effective rate 0.9300 0.9200 0.9400 0.3300 3.00 6.03 41.30 3M MMM 206.70 N/A May. 30 Amerco UHAL D. Holmes TI 2 352.87 706 356.45 -3.6
High 1.0625 1.0625 1.0625 0.5000 2.59 3.88 26.57 McDonald's MCD 153.74 N/A
Low 0.7500 0.9000 0.9100 0.2000
2.57 1.80 12.33 Microsoft MSFT 71.76 N/A Sellers
Bid 0.9100 0.9100 0.9300 0.2000
Offer 0.9300 0.9200 1.0000 0.2600 2.49 3.16 21.64 Johnson & Johnson JNJ 130.08 N/A May. 24 RSP Permian RSPP R. Kayne BI 17,250 38.78 668,955 36.37 -18.5
Treasury bill auction 2.47 1.12 7.67 Verizon Comm VZ 46.44 N/A May. 26 Hyatt Hotels H R. Friedman DI 4,000 57.53 230,120 57.91 4.8
4 weeks 0.840 0.735 0.840 0.160 1.95 3.64 24.93 Boeing Co BA 190.23 N/A May. 24-25 Wal-Mart Stores WMT S. Walton DOI 2,476 78.27-78.38 193,957 79.62 15.2
13 weeks 0.960 0.920 0.960 0.250 1.91 1.49 10.20 Wal-Mart Stores WMT 79.62 May. 24-25 A. Walton BI 2,476 78.27-78.38 193,957
26 weeks 1.060 1.050 1.060 0.340 N/A May. 24-25 J. Walton BI 2,476 78.27-78.38 193,957
1.57 0.43 2.94 General Electric GE 27.88 N/A May. 30-31 S. Walton DOI 1,456 78.21-78.52 114,041
Secondary market 1.56 1.48 10.14 Visa V 96.15 N/A May. 30-31 A. Walton BI 1,456 78.21-78.52 114,041
May. 30-31 J. Walton BI 1,456 78.21-78.52 114,041
Fannie Mae
1.54 1.34 9.18 Procter & Gamble PG 88.59 N/A May. 26 S. Walton DOI 1,158 78.06 90,353
30-year mortgage yields May. 26 A. Walton BI 1,158 78.06 90,353
1.52 0.48 3.29 Cisco Systems CSCO 31.98 N/A
30 days 3.455 3.463 3.865 2.806 May. 26 J. Walton BI 1,158 78.06 90,353
60 days 3.483 3.490 3.899 2.832 1.33 1.03 7.05 American Express AXP 78.49 N/A May. 30 Trade Desk TTD R. Ehrenberg DI 3,186 50.05 159,460 56.96 105.9
1.24 0.40 2.74 Pfizer PFE 32.54 N/A May. 30 E. Paley DOI 1,130 52.00 58,783
Other short-term rates
1.20 1.49 10.20 Travlr Comp TRV 125.15 N/A May. 26 Kosmos Energy KOS D. Krieger DI 10,000 7.25 72,500 6.06 -13.6
Week 52-Week May. 31 Quintiles IMS Holdings Q D. Gillings D 860 84.01 72,249 87.93 15.6
Latest ago high low 1.20 1.84 12.60 Apple AAPL 155.45 N/A May. 30 J. Danhakl DI 761 84.01 63,944
1.10 0.50 3.42 Coca-Cola Co KO 45.89 N/A
Call money May. 25-30 Willis Towers Watson WLTW J. Ubben DOI 445 145.01-145.06 64,540 147.18 20.4
1.06 1.89 12.94 Unitedhealth UNH 179.39 N/A
2.75 2.75 2.75 2.25 May. 26-30 Facebook FB M. Zuckerberg CEOI 280 151.70-152.85 42,500 153.61 33.5
0.85 0.55 3.77 Merck MRK 65.47 N/A
Commercial paper (AA financial) * Half the transactions were indirect **Two day transaction
0.74 0.39 2.67 Nike NKE 52.98 N/A p - Pink Sheets
90 days 1.06 1.05 1.13 0.51
0.29 0.45 3.08 Home Depot HD 155.35 N/A
Libor
0.27 0.29 1.99 Caterpillar CAT 105.95 N/A Buying and selling by sector
One month 1.08617 1.04467 1.08617 0.44205 Based on actual transaction dates in reports received this past week
Three month 1.22250 1.20178 1.22250 0.62360 0.22 0.27 1.85 Utd Technologies UTX 122.12 N/A
Six month 1.42822 1.41378 1.44517 0.88685 0.17 0.06 0.41 Intel INTC 36.32 N/A Sector Buying Selling Sector Buying Selling
One year 1.73067 1.72122 1.82761 1.19570
0.29 0.44 3.01 IBM IBM 152.05 N/A
Basic Industries 1,193,807 2,683,381 Finance 1,809,145 68,642,473
Euro Libor 1.13 1.23 8.42 Walt Disney DIS 107.18 N/A Business services 112,671 16,038,714 Health care 1,472,446 58,723,103
One month -0.401 -0.399 -0.351 -0.404 1.54 1.61 11.03 Chevron CVX 103.11 Capital goods 0 0 Industrial 15,180 53,988,862
Three month -0.370 -0.369 -0.278 -0.373 N/A
Six month -0.287 -0.285 -0.163 -0.287 2.51 2.05 14.04 Exxon Mobil XOM 79.50 N/A Consumer durables 0 3,483,200 Media 56,036 26,462,174
One year -0.170 -0.155 -0.026 -0.170 3.19 2.72 18.63 JPMorgan Chase JPM 82.64 Consumer nondurables 162,798 24,435,100 Technology 1,107,183 137,775,597
N/A
4.57 10.22 69.99 Goldman Sachs GS 213.31 N/A Consumer services 5,446,389 33,907,682 Transportation 0 5,466,641
Euro interbank offered rate (Euribor)
Energy 2,807,727 3,363,035 Utilities 0 12,620,725
One month -0.372 -0.371 -0.351 -0.375
Sources: WSJ Market Data Group; S&P Dow Jones Indices. For more information on the Dow Jones
Three month -0.329 -0.329 -0.261 -0.332 Industrial Average and the 30 industrials, please visit www.djindexes.com Sources: Thomson Financial; WSJ Market Data Group
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B8 | Monday, June 5, 2017
Solar Giant Reviews Sales
BY KIRSTEN GRIND
Executives at solar energy
giant Sunrun Inc. have asked
the companys board of direc-
tors to independently review
claims by former employees
that they were manipulating
sales data around the time of
Sunruns initial public offering
in 2015.
According to a statement on
its website, Sunrun made the
request to its audit committee
following a Wall Street Jour-
nal article published May 22.
The story quoted former
employees saying they held
back on internally reporting
hundreds of customers who
canceled their contracts for
home energy systems during a
roughly five-month period in
the middle of 2015.
Sunrun didnt directly ad-
dress the allegations at the
NASDAQ
time of the Journals story,
saying in a statement from
Chief Executive Lynn Jurich it
had reviewed the digital audit
trail in our systems and
turned up no evidence that
our employees changed can-
cellation dates in our systems
to delay the reporting of can-
cellations.
In its new statement, the
company said: Sunruns exec-
utive team is committed to
Citigroup Adds a Quant Trader
BY TELIS DEMOS
Citigroup Inc. has tapped a
quantitative trading veteran to
help the bank vault into that
hot category, as part of a
broader build-up of its equi-
ties unit.
Thomas Chippas will join as
global head of quantitative ex-
ecution, the bank said Friday.
Mr. Chippas previously led
quant-trading units at Bar-
clays PLC and Deutsche Bank
AG, before leaving for jobs be-
yond Wall Street, most re-
cently as chief operating offi-
cer of blockchain-technology
startup Axoni Inc.
The return to Wall Street
for someone who left to work
at a tech startup is an indica-
Gold Hits
A High
Following
Jobs Data
BY IRA IOSEBASHVILI
Gold prices rose to their
highest level in more than a
month Friday after weaker-
than-expected U.S. employ-
ment numbers bolstered the
case for the Federal Reserve to
continue raising rates at a
gradual pace.
Gold for August delivery
closed up 0.8% at $1,280.20 a
troy ounce on the Comex divi-
sion of the New York Mercan-
tile Exchange, the highest set-
tlement value since April 21.
Nonfarm payrolls rose by a
seasonally adjusted 138,000 in
The metal for August
delivery closed up
0.8% at $1,280.20 a
troy ounce.
May from the prior month, the
Labor Department said Friday.
Economists surveyed by The
Wall Street Journal had ex-
pected 184,000 new jobs.
Some investors believe the
data will keep the Fed from
raising rates too quickly for
fear of bruising a hard-won
U.S. recovery. That is good
news for gold, which struggles
to compete with yield-bearing
investments when borrowing
costs rise.
It doesnt seem the U.S.
economy is firing the way peo-
ple think it is, said Peter Hug,
global trading director at
Kitco Metals.
The unemployment rate fell
to 4.3% from the prior months
4.4% reading. The rate was
last this low in May 2001.
Copper for July delivery
was down 0.5% at $2.5745 a
pound.
Sunrun made a request to review sales data from near the time of its IPO, which was in 2015
transparency and looks for-
ward to taking any and all ap-
propriate actions in response
to the Audit Committees
eventual findings. We remain
committed to doing what is
right for our customers and
shareholders at all times.
San Francisco, Calif.-based
tion of the growing impor-
tance of the highly complex
and tech-heavy quant style
of trading. Banks are trying to
keep up with clients who are
increasingly shifting away
from fundamental trading
strategies to ones dictated by
data and patterns. The shift
comes as banks equity trading
desks have struggled with low
volatility and a growing em-
phasis on low-cost forms
of passive trading.
I would categorize the en-
vironment as being okay, but
low volatility, Citigroup CEO
Michael Corbat said an at in-
dustry conference Thursday,
echoing other bank chief exec-
utives who were expecting a
dip in trading revenue in the
A cotton field in Texas. The International Cotton Advisory Committee has reduced its estimates of the worlds ending stocks for the current and next market years.
Cotton Futures Fall as Speculators Exit Positions
BY CAROLYN CUI
Cotton futures fell Friday
as speculators continued to
exit their bullish positions
after cottons gyrations in
mid-May.
In New York, cotton for
July delivery dropped 1.2%
to settle at 76.69 cents a
pound at the ICE Futures
U.S. exchange. That repre-
sented a 12% loss from its
peak hit on May 15.
Open interest of the July
contract dropped to 91,399
lots Friday, down more than
50,000 contracts since May
5, when it had reached a re-
cord 141,874 contracts, ac-
cording to Plexus Cotton.
Speculators have been
BANKING & FINANCE
Sunrun, the largest publicly
traded residential solar com-
pany in the U.S., and Tesla
Inc.s SolarCity Corp. are un-
der investigation by the Secu-
rities and Exchange Commis-
sion for masking the number
of customers backing out of tion rates. The SEC has de-
contracts, the Journal has re-
second quarter.
The pressure led banks
across Wall Street to invest in
quant trading and prime bro-
kerage, which provides tech-
nology and financing for cli-
ents.
Citigroup in particular has
said that despite the tough en-
vironment for stock trading, it
believes it can sharply grow
its market sharewhich has
lagged behind peers in recent
yearsin large part by invest-
ing in prime brokerage, which
also provides clearing services
for complex quant trading.
We called ourselves out a
few years ago for being too
small in equities, Mr. Corbat
said Thursday. I think youve
seen us continually taking rev-
COMMODITIES
calling it quits since Julys
parabolic up and down
move, but there havent
been any massive sell stops
hit so far, which is why the
liquidation has been orderly
and without much price
movement. While specula-
tors are selling, the trade is
eager to cover its short po-
sition, which is to a large
degree tied to unfixed on-
call sales, according to
Plexus.
The latest on-call report
showed that as of May 26
there were still 3.1 million
bales to be fixed on July and
Plexus estimated that this
number is down to around
2.7 million bales by Friday.
Nevertheless, this is still a
ported.
Sunrun has declined to
comment on the investigation.
SolarCity has said the com-
pany has focused on reporting
the quality of its installed as-
sets, not pre-install cancella-
that were especially challeng-
clined to comment.
enue share.
Citigroups first quarter eq-
uity revenue rose 10% from a
year ago, versus smaller gains
or falls among its larger rivals.
Mr. Chippas will oversee
the global expansion of
systems that allow hedge
funds and asset managers to
rapidly put on or take off
trades based on quantitative
signals, known as low-latency
execution, the bank said. He
will report both to the head of
cash trading and the head of
prime finance.
Such quant trading is criti-
cal in continuing the momen-
tum of our prime and equities
businesses, said Adam Herr-
mann, Citigroups global head
of prime finance.
sizable amount considering
that there are only about
three weeks left to get it
done, it said.
The International Cotton
Advisory Committee on
Thursday reduced its esti-
mates of the worlds ending
stocks for the current and
next market years. The ICAC
said it estimated world cot-
ton production to reach 22.9
million tons while world mill
use was projected at 24.3
million tons, which repre-
sents the second consecutive
season where mill use has
exceeded production.
As a result, the committee
said it estimated the total
cotton stocks by the end of
July would decrease by 7%
THE WALL STREET JOURNAL.
Coming Soon: What
Auditors Think of
Company Numbers
BY MICHAEL RAPOPORT
Investors will soon get a
new window into companies,
courtesy of auditors.
Audit regulators from the
Public Company Accounting
Oversight Board voted Thurs-
day to approve a long-planned
overhaul and expansion of the
auditors reportthe letter
included in a companys an-
nual report in which the audi-
tor blesses the financial state-
ments.
That statement, which
hasnt changed much in more
than 70 years, has largely be-
come legal boilerplate and
doesnt give investors much
information about what an
auditor actually thinks of a
company.
The new report will retain
the current reports up-or-
down decision on whether an
auditor thinks a companys
numbers are fairly pre-
sented. But it will also re-
quire auditors to tell inves-
tors about any critical audit
mattersareas of their audit
ing or complex or forced them
to make tough decisions in
evaluating a companys books.
For instance, the auditors
assessment of how a company
sets aside loan-loss reserves
when it introduces a new loan
product could be a critical au-
dit matter. So could the evalu-
ation of a companys esti-
mates and the valuations of
the assets it acquires.
The new rule will make the
auditors report more com-
plete and relevant for inves-
tors, the boards Chairman
James Doty said in an inter-
view with The Wall Street
Journal. Investors want it.
The new requirement will
bring the U.S. closer to the
U.K. and other European
countries where such disclo-
sures in the auditors report
are already required.
Some other new disclo-
sures will also be required, in-
cluding the length of the au-
ditors tenure working for the
to 17.3 million tons.
Specially, the ICAC noted
that China, the worlds larg-
est cotton consumer, would
increase its cotton purchases
from the international mar-
ket for the first time in five
years. Declining domestic
production and increasing
mill use have pushed Chi-
nese mills to source cotton
overseas. In the year ending
in July, China is expected to
increase cotton imports by
10% to 1.06 million tons.
Sales from the state-run
reserves were also used to
make up for the shortfall.
The ICAC estimated that
China this year has auc-
tioned off over 1.1 million
tons of cotton through May.
company. Some investor ad-
vocates think an audit firm
that has been working with a
company for decades might
get too cozy with manage-
ment, jeopardizing its ability
to perform a tough, impartial
audit.
In addition, new language
will be added to the report to
clarify the auditors responsi-
bilities, notably a proviso that
auditors are required to de-
sign the audit to detect any
material misstatements,
whether due to error or
fraud.
The new rule will take ef-
fect in stages. Disclosure of
auditor tenure and all other
changes except the critical
audit matters will begin with
reports filed in early 2018.
Large companies must begin
70
The rough number of years the
PCAOB has used a boilerplate
detailing critical audit mat-
ters with reports in mid-2019;
all other companies will begin
doing so in early 2021. Newer,
smaller companies classified
as emerging growth compa-
nies will be exempt from the
critical audit matters require-
ment.
The efforts to revamp the
auditors report date back
nearly a decade, and the
PCAOB made its first formal
proposal in 2013. Audit firms
balked at first, complaining
the requirement to disclose
critical audit matters was too
broad and could force them to
disclose dozens or hundreds
of such issues.
The oversight board subse-
quently narrowed the require-
ments scope: To be disclosed,
critical audit matters must be
material and significant
enough to be reported to the
companys audit committee.
EDDIE SEAL/BLOOMBERG NEWS
As a result, the decline of
world ending stocks occurs
entirely within China where
stocks are projected to be
down 17% to 9.2 million tons
by the end of July, according
to the ICAC. Stocks held out-
side of China are forecast to
rise by 6% to 8 million tons.
In other markets, raw
sugar for July was down
3.4% to end at 13.74 cents a
pound, the lowest level since
February 2016; cocoa for
July fell 1.1%, to close at
$2,001 a ton; arabica coffee
for July delivery lost 1.7%, to
end at $1.2555 a pound and
frozen concentrated orange-
juice futures for July added
0.5%, to end at $1.3250 a
pound.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Venezuela Poses Investor Dilemma
Bonds produce big
profits as nation
grapples with deep
economic crisis
BY JULIE WERNAU
AND KEJAL VYAS
As managing director at
hedge-fund manager Knossos
Asset Management, Francisco
Ghersi buys and sells Venezue-
lan debt for a living. But as a
Venezuelan, he is also hoping
for the day when
CREDIT his country puts
MARKETS rebuilding over
repaying him.
If a new gov-
ernment stepped in and said it
couldnt pay me for five years
because it had a plan to re-
solve the problems in Venezu-
ela, I would say, OK, he said.
About 23.4% of the coun-
trys debt outstanding is held
by individuals and institutions
inside Venezuela, according to
investment bank Torino Capi-
tal. That doesnt include bonds
held by the millions of expats
who have fled in recent years.
If you took out the Venezu-
elan demand for these bonds,
I would suspect that half the
transactions would not occur,
said Juan I. Sosa, co-chairman
of Portfolio Resources Group,
Inc. in Miami. Mr. Sosa, also a
Venezuelan, estimates that
40% of the 3,800 accounts he
manages belong to Venezue-
lans, most of whom own Vene-
zuelan debt.
Many of the Venezuelan in-
vestors profit from their coun-
trys bonds, which have posted
returns of about 55% over the
past year, the best in emerging
markets. But the investors are
also acutely aware of the
countrys plight. Venezuela is
gripped by an economic crisis
so deep that some of its citi-
zens, including children, are
starving.
This year, the countrys so-
cialist government likely will
spend as much money servic-
ing foreign debt to investors
as it does importing food and
medicine for its people, ac-
cording to estimates by No-
mura Securities.
Goldman Sachss recent
purchase, through an interme-
diary, of Venezuelan bonds
52%
The percentage of domestic large-cap
stock mutual funds that are beating
their benchmarks so far this year,
their best performance since 2009
Stock Pickers Rebound
Soaring technology stocks
this year are providing a boost
to stock pickers
Much maligned active stock
managers are off to their best
start to a year since the end of
the financial crisis. Some 52% of
domestic large-cap stock mutual
funds are beating their
benchmarks this year, their best
THE TICKER | Market events coming this week
Monday
Factory orders
March, previous up 0.2%
Apr., expected
down 0.2%
ISM non-mfg index
Apr. previous 57.5
May, expected 57
Productivity
4th Qtr.. previous
down 0.6%
1st qtr., prel. ,expected
0.0%
Unit labor costs
4th Qtr. previous
up 3.0%
1st qtr., prel. expected
up 2.4%
Tuesday
Earnings expected*
Estimate/Year Ago($)
HD Supply 0.66/0.51
* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DONT INCLUDE EXTRAORDINARY ITEMS (LOSSES IN
PARENTHESES)  ADJUSTED FOR STOCK SPLITNOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF
ECONOMISTS
JOSH RITCHIE FOR THE WALL STREET JOURNAL
Juan I. Sosa says investors are marching against Venezuelas regime but still buying its bonds. Its a little eery. But its a reality, he says.
that had been held by the
countrys central bank sparked
an angry reaction from oppo-
sition groups. They said the
transaction provided fresh
funds for the embattled ad-
ministration of President Nico-
ls Maduro as it faces rising
unrest over food and medicine
shortages.
Alejandro Grisanti, a Vene-
zuelan economist, said he has
no moral qualms about Vene-
zuelans who bought bonds
years ago or snapped them up
on the secondary market as
long as the transactions dont
provide new capital for the
government, which he said
might use the money on tear
gas against protesters.
Many Venezuelan investors
say they feel that by holding
the bonds, they are helping to
keep the countrys wealth
abroad.
Others believe that if Vene-
zuela were to default, the
money that would have gone
to bondholders would simply
be stolen rather than put to-
ward food and medicine.
performance since 2009,
according to Goldman Sachs
stock strategists headed by
David Kostin.
Most actively managed U.S.
stock funds have failed to beat
their market benchmarks over
the past decade and a half,
according to the latest S&P
Indices Versus Active funds
Keysight Tech 0.57/0.61 Thursday
Initial jobless claims
Wednesday Previous
Expected
Mort. bankers indexes
Purch., previous EIA report: natural gas
down 1% Previous change in stocks in
Refinan., prev. billions of cubic feet
down 6%
Earnings expected*
EIA status report
Estimate/Year Ago($)
Previous change in stocks in
J.M. Smucker 1.72/1.44
millions of barrels
Vail Resorts 4.90/4.23
Crude oil down 6.4
Gasoline down 2.9
Distillates up 0.4 Friday
Short-selling reports
Consumer credit Ratio, days of trading volume of
March, previous current position, at April 28
up $16.4 billion NYSE
April, expected N.A. Nasdaq
Earnings expected* Wholesale inventories
Estimate/Year Ago($) March, previous
Brown-Foreman
0.41/0.42 April, expected
* * Monday, June 5, 2017 | B9
MARKETS
Dollar
Takes Hit
Over Rate
Outlook
BY CHELSEY DULANEY
The dollar tumbled Friday
after a disappointing monthly
jobs report fueled uncertainty
about the path for higher U.S.
interest rates.
The WSJ
CURRENCIES Dollar In-
dex, which
measures
the U.S. currency against 16
others, fell 0.5% to 88.28the
lowest closing level since the
U.S. presidential election Nov.
8 sent the currency soaring.
The Labor Department said
that while the unemployment
rate fell to its lowest level in
16 years in May, the pace of
hiring was slower than ex-
pected.
Average hourly earnings, a
measure being closely watched
by investors for signs that in-
flationary pressures are firm-
ing, rose 2.5% from a year ear-
lier, the latest sign that wages
havent risen much despite the
low jobless rate.
Id rather that they pay in- credit-rating firms trying to servicing its debt. Investors believe stronger
terest and principal rather figure out how much money One reason could be the wage growth would signal that
than put more money in their the country has. On the central large number of wealthy ex- inflation is picking up, sup-
pockets, said Mr. Sosa, who banks balance sheet, a host of pats and Venezuelan institu- porting the Feds case for rais-
travels frequently to Venezuela securities it holds are valued tions that still hold it, and ing rates at a faster pace.
to see family and even re- at four different exchange profit handsomely from it. Lo- Earnings remain subdued,
cently joined a street protest. rates due to the countrys Byz- cal state-run and private banks which is going to hurt the dol-
Investors are out there antine currency controls. hold about $15.5 billion in lar, said Vassili Serebriakov, a
marching against the regime Many Venezuelan econo- debt, according to investment currency strategist at Crdit
and buying bonds, he said. mists dub the banks books bank Torino Capital. Agricole. Mr. Serebriakov said
Its a little eerie. But its a re- simply as the zoo. The government could force Fridays data does support the
ality. Venezuelan investors think them to swap those securities Feds case for raising rates at
On a recent sunny day, be- they know enough about Vene- for locally denominated notes. its meeting this month, but he
tween transactions in his Mi- zuela that they will get out in Venezuelan officials could then added that it validates very
ami office, Mr. Sosa received a time, said Alejandro Lara, a raise about $5 billion to $6 bil- low expectations for rate in-
call that the son of one of his former securities broker in lion by selling these bonds at a creases thereafter because of
longest-standing clients had Venezuela and a Florida li- deep discount as it did with low wage pressures.
been kidnapped in Caracas, a censed independent invest- Goldman, which paid 31 cents Fed-funds futures, used by
common occurrence in the ment adviser. on the dollar. This could ser- investors to bet on the U.S. in-
crime-ridden capital. Youre sitting in front of a vice the countrys debt pay- terest-rate outlook, show a
Under Mr. Maduros prede- prospective client with ments for an additional eight 96% chance that the Fed raises
cessor, the late strongman $500,000 to invest and you try months, according to Torino. rates at its June 13-14 meet-
Hugo Chvez, Venezuelas gov- to convince him to buy Gen- To sell its own bonds at a ing, according to CME Group
ernment piled on debt despite eral Electric stock, Procter & discount is an incredibly ex- data. Markets are pricing in a
a $1 trillion oil windfall during Gamble, and the return is pensive way of raising cash. 52% chance that the Fed sticks
his tenure. 2%-3% a year. They say, Why Youre potentially putting to its forecast for three rate-
But years of mismanage- am I going to do that when yourself in a much worse increases in 2017, CME data
ment and lower oil prices have Venezuela keeps paying? They hole, said Brad Setser a se- shows.
left the country scrambling for have never been proven nior fellow at the Council on Higher rates typically boost
cash. wrong, he said. Foreign Relations and a former the dollar by making U.S. as-
Venezuelas opaque finances Venezuela has gone to ex- senior U.S. Treasury official in sets more attractive to yield-
have haunted investors and traordinary lengths to keep the Obama administration. seeking investors.
Currencies
scorecard. Such performance has the best returns. Fully 63% of
made it difficult for active stock large-cap growth funds, which U.S.-dollar foreign-exchange rates in late New York trading
US$vs, US$vs,
managers to justify their higher are most exposed to tech Fri YTDchg Fri YTDchg
management fees, and in turn, shares, have beaten the Russell Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%)
investors have flooded into 1000 Growth index in 2017, Americas Vietnam dong .00004403 22714 0.3
lower-cost index-tracking funds compared with the 10-year Argentina peso .0623 16.0388 1.1 Europe
that aim to mimic, rather than average of 38%. Growth funds Brazil real .3079 3.2483 0.2 Czech Rep. koruna .04285 23.338 9.1
beat, the stock market. buy shares of companies with Canada dollar .7415 1.3486 0.3 Denmark krone .1517 6.5933 6.7
Chile peso .001492 670.30 0.1 Euro area euro 1.1282 .8864 6.8
Some $1.2 trillion has flowed rapid earnings growth.
out of actively managed U.S. Fund types that havent Colombia peso
Ecuador US dollar
.0003454 2895.48
1 1
3.5
unch
Hungary forint
Iceland krona
.003669 272.54 7.4
.010249 97.57 13.6
bulked up in tech continue to
MONEYBEAT lag. Just 37% of core stock funds
Mexico peso
Peru new sol
.0535 18.6794
.3056 3.272
9.9
2.4
Norway krone
Poland zloty
.1189 8.4126 2.7
.2697 3.7079 11.4
have topped the S&P 500 this Uruguay peso .03531 28.3200 3.5 Russia ruble .01766 56.632 7.6
stock funds over the last year. A core fund aims for a Venezuela b. fuerte .098790 10.1225 1.3 Sweden krona .1160 8.6201 5.3
decade, while nearly the same diversified basket of stocks. Asia-Pacific Switzerland franc 1.0389 .9626 5.5
Turkey lira .2849 3.5097 0.4
amount, $1.1 trillion, has moved Goldmans analysis of these Australian dollar .7443 1.3435 3.2
Ukraine hryvnia .0381 26.2800 3.0
into passive U.S. stock funds, portfolios found core funds, on China yuan .1468 6.8105 1.9
UK pound 1.2891 .7757 4.2
Hong Kong dollar .1284 7.7890 0.4
according to Morningstar Inc. average, own slightly fewer tech Middle East/Africa
India rupee .01552 64.415 5.2
A surge in the shares of the stocks than the indexes they Indonesia rupiah .0000751 13311 1.6 Bahrain dinar 2.6511 .3772 0.01
biggest tech firms this year is aim to beat. Japan yen .009057 110.41 5.6 Egypt pound .0555 18.0029 0.7
the reason behind the improved Kazakhstan tenge .003195 313.01 6.2 Israel shekel .2820 3.5466 7.8
performance. The S&P 500 tech ONLINE Macau pataca
Malaysia ringgit
.1244 8.0356
.2336 4.2800
1.5
4.6
Kuwait dinar
Oman sul rial
3.2919 .3038 0.6
2.5978 .3849 0.01
sector is up 21% in 2017, while
New Zealand dollar .7143 1.4000 3.1 Qatar rial .2745 3.643 0.1
the S&P 500 has gained 8.9%. For more 0.3 .2666 3.7505 0.01
WSJ
Pakistan rupee .00955 104.725 Saudi Arabia riyal
Apple Inc. and Facebook Inc. are MoneyBeat blog Philippines peso .0202 49.627 0.04 South Africa rand .0781 12.8115 6.4
up more than 30% apiece. posts, go to Singapore dollar .7240 1.3813 4.6
Funds owning outsize stakes .COM blogs.wsj.com/ South Korea won .0008941 1118.40 7.4 Close Net Chg % Chg YTD%Chg
in those firms have generated MoneyBeat Sri Lanka rupee .0065664 152.29 2.6 WSJ Dollar Index 88.29 0.480.54 5.00
Taiwan dollar .03321 30.108 7.2 Sources: Tullett Prebon, WSJ Market Data Group
Thailand baht .02937 34.050 4.9
248,000
240,000
up 81
RJ SANGOSTI/DENVER POST/GETTY IMAGES
4.5
4.2
up 0.2%
0.0%
Vail Mountain last June. Vail Resorts is expected to report higher earnings when it posts quarterly results on Thursday.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B10 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

MARKETS
THE DAILY SHOT By Lev Borodovsky, Ben Eisen and Tom Destefano WSJ
subscribers can get
The Daily Shot

Technology
The Tech Sector Catches Fire a chart-by-chart brieng
on markets and economics
sent to their email
each morning. Subscribe at
wsj.com/newsletters
29.2% in 1999 By now its no epiphany that technology stocks are in What you may not know is that by one measure,
ahead of the favor. Apple recently passed $800 billion in market value the 2017 tech-stock rally is already at levels last
dot-com crash
for the rst time and Amazon.com just moved above seen in 2000. The S&P technology sector accounts
Selected sectors
the rarely surpassed $1,000-a-share level. Alphabet, the for nearly a quarter of the S&P 500s market value.
share of S&P 500 parent of Google, is within reach of that milestone. The last time that happened was 1999.
Technology
total market value
Financials Rose to
No. 1 leading into 23.2% this
20%
nancial crisis year, highest
Health care since 1999
Overtook
nancials
15 this year
Health care
Financials

10 Industrials
Energy
Declined with
crude-oil prices Energy
5

0
1996 98 2000 02 04 06 08 10 12 14 16 17*

The FAANG stocks have been on a roll, rising to new highs... ...and helping to drive repeated records in the Nasdaq and S&P 500.
Number of record daily closes FAANG stocks combined market value Cumulative PowerShares QQQ Trust Series 1 Record closes in 2017
37
Last year This year as a percentage of S&P 500 total market value inows in 2017 Vanguard Information Technology ETF
11% Technology Select Sector SPDR ETF
20 $2 billion
22
15 10 1
17
10 0
9
5 1
0 0 0 0 8 2
Facebook Amazon Apple Netix Alphabet Oct. Nov. Dec. Jan. Feb. March April May Jan. Feb. March April May
Dow industrials S&P 500 Nasdaq
(Google)

Internal signs of the tech sector's health look relatively ruddy, though gains aren't uniformly shared in the U.S. economy thanks to offshoring and other broader business trends.
San Francisco Tech Pulse, change from a year earlier Computer and software employees payroll index Value of manufacturers new orders Computer and electronics industrial production,
10% 140 for computers and electronic products change from a year earlier
$22 billion 8%
130
5 21
120 4
20
0 110 19 0
2013 14 15 16 17 2013 14 15 16 17 2013 14 15 16 17 2013 14 15 16 17

*Sector composition for 2017 is as of May 27. Calculated by multiplying estimates of average hourly earnings, average weekly hours and employment
Sources: S&P Dow Jones Indices (sectors); WSJ Market Data Group (record closes, FAANG market value); FactSet (ows); Federal Reserve Bank of San Francisco (Pulse); Bureau of Labor Statistics (payroll index); U.S. Census Bureau (new orders); Federal Reserve (industrial production)
THE WALL STREET JOURNAL.

Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Chip Rally Knocks Down Leaders OVERHEARD Plenty Can

The stunning rally in semi-
conductor stocks has been
surprising for two reasons: It
has been bigger and longer
than nearly everyone antici-
pated, and it has changed the
pecking order among the big-
gest chip makers.
This may have investors
understandably nervous about
when the turn may come. But
the companies driving the
most recent surge have strong
prospects ahead that dont
look to diminish soon.
As of Friday, the PHLX
Semiconductor Index is up
22% for the year, against the
Nasdaqs 17% uptick. This
comes after the chip index
surged 37% last year, making
it the best performer in tech.
And this has continued even
as big M&A activity cools. The
semiconductor sector has
seen just under $9 billion
worth of deals so far this
year, following a splurge that
totaled $134 billion worth last
year, according to Dealogic.
One big change is that
Nvidia and Broadcom are
now among the five largest
companies on the PHLX Semi-
conductor Index, ranked by
Restack
Market value
$200 billion
150
100
50
0
2012 13
Source: FactSet
market cap. Earlier this week,
Nvidias market value briefly
surpassed that of Qualcomm,
which was once the second-
most-valuable chip company
next to Intel Corp. Qual-
comms market value has
bucked the trend, falling by
nearly a quarter over the past
two years as the companys
lucrative licensing business
faced an array of problems
that now includes a legal war
with Apple.
Another is that Intel, long
TSMC
Intel
Broadcom
Qualcomm
Nvidia
14 15 16 17
THE WALL STREET JOURNAL.
the No. 1 chip maker by mar-
ket cap, was passed last
month by Taiwan Semicon-
ductor Manufacturing.
TSMC, as it is also known, is
Intels biggest rival in chip
production and has benefited
from the boom in mobile de-
vices and from growing de-
mand for other types of chips
such as graphics processors.
Investors should expect
further gains. Broadcom is in
a good position, even though
its market value more than
doubled since its merger with
Avago early last year. The
company reported an 18%
jump in revenue for its fiscal
second quarter on Thursday,
beating expectations. It pro-
jected a similar gain for the
current period, getting a
boost from the buildup of the
next iPhone models, which
use the companys wireless
filter chips. At just 15 times
forward earnings, Broadcom
is still at a slight discount to
the PHLX average.
Nvidia could see further
gains as well. The companys
graphics processing chips
have a prime opportunity
ahead as companies like Ama-
zon, Google and Microsoft
build artificial intelligence into
their vast global networks.
Nvidias high multiple of
around 48 times forward
earnings admittedly makes
the stock a bit more precari-
ous. But the PHLX Index in
general is averaging only 16
times, less than 10% above its
five-year average and about
30% below the Nasdaqs aver-
age, so chip investors neednt
rush to cash out just yet.
Dan Gallagher
The American shopping
mall is dying. Or is it?
While thousands of retail
outlets are closing across
the country as customers
shift purchases online and a
recent study said a quarter
of American malls may
shut in the next five years,
the developer of the
mammoth Mall of
America is doubling down.
More than doubling,
actually.
Canadas Triple Five
Worldwide Group wants to
build a 6 million square
foot complex in Miami, the
biggest in the country. They
arent completely bonkers,
it seems. Rather than
focusing on retail, the
companys president said
that their focus is retail-
tainment, according to the
Associated Press.
The facility would be
more like an amusement
park with an indoor ski
slope, a submarine ride and
theaters. Oh, and if you
need to do some shopping,
they may have a few places
to do that too.
Go Right for
Bristol-Myers
Last years cancer-drug
darling is this years value
stock.
At last years American So-
ciety of Clinical Oncology an-
nual meeting, investors
mostly considered Bristol-
Myers Squibb to be the front-
runner. That changed when
the company announced last
August that a key clinical trial
in lung cancer for its main
immuno-oncology drug, Op-
divo, had failed. The news
shocked investors, and the
stock remains 24% lower over
the past twelve months.
Late Sunday, Bristol pre-
sented new data to investors.
They should recognize that
falling share prices have the
silver lining of lowered expec-
tations. Analysts expect, for
instance, that Bristol-Myers
will book $20.8 billion in rev-
enue next year, down from
nearly $23 billion a year ago,
according to FactSet. Bristol
can clear that lower bar.
Opdivo sales still are grow-
ing, despite last years set-
back. First-quarter sales of
the drug were up 60% from a

Foreign Tourists Arent Coming to America This Summer year earlier.

Signs are emerging that
the $1.6 trillion U.S. tourism
industry could suffer this
summer as overseas travelers
stay away.
The potential slowdown
comes months after President
Trump tried to ban travel
from some countries and just
as hotels, restaurants and re-
sorts gear up for peak tourist
season. Because international
travelers often book trips
months in advance, the im-
pact hasnt been strong on
the ground but can be seen
most clearly in bookings.
Travel consultant Forward-
Keys reported Thursday that
bookings for air travel to the
U.S. for June through August
are down 3.5%, while rising
And there is good reason
to suspect that Opdivo will
That is supported by data Expedia noted a slowdown in are heavily exposed to New have a lasting commercial
Flight Pattern from location-tracking com- travel from the Middle East York hotels. Hersha Hospi- presence. More than 240 clin-
Long-haul ight bookings for June pany Foursquare, which show to the U.S., and Hyatt Hotels tality Trust, Diam- ical trials are under way
through August by destination, that the U.S. share of interna- said it saw a decline in inter- ondRock Hospitality, Host across the industry using Op-
versus a year ago. tional tourism to leisure loca- national inbound travel to Hotels & Resorts and La- divo in combination with an-
tions such as casinos, depart- the U.S. A March ban by the Salle Hotel Properties have other drug, according to re-
U.K. 18% ment stores and theme parks U.S. and U.K. on carrying on the highest exposure to the search firm EvaluatePharma.
Spain 13 was down 16% in March com- laptops on flights from cer- city, according to Rich High- Bristols shares arent par-
France 7.3 pared with a year earlier. tain countries in the Middle tower, an analyst with Ever- ticularly cheap at about 18
Italy 6.8 Residents of the Middle East East and North Africa may core ISI. Retailers such as times forward earnings, but
Thailand 3.2
and Latin America have been also be having an effect. jeweler Tiffany, which gets a this is down from 26 times a
the primary groups avoiding New York City tourism of- significant percentage of an- year ago. That is supported
3.5 U.S. the U.S., Foursquare found. ficials are forecasting the nual sales from its flagship by the attractiveness of Op-
Source: ForwardKeys What were seeing is a rise first drop-off in foreign visi- store on New Yorks tourist- divo. Any larger pharma com-
in antipathy toward the U.S., tors this year since the finan- trafficked Fifth Avenue, could pany could theoretically buy
for other major travel desti- related to the administrations cial crisis. Foreigners account also feel the pain. the company and immediately
nations. With global tourism rhetoric and policies, thats for half of tourism spending Mr. Trump was a master at get a large presence in a lu-
rising overall, if youve got a translating into a shift in even though they amount to drawing tourists to his hotels crative area.
negative number, something travel intentions, said Adam just a fifth of tourists to New and casinos. As host-in-chief, Less than a year removed
must be going on, said For- Sacks, president of consulting York, city officials say. he may have lost his touch. from a major disappointment,
wardKeys spokesmen David firm Tourism Economics. That could hurt some real- Justin Lahart that should reassure inves-
Tarsh. In first-quarter earnings, estate investment trusts that and Miriam Gottfried tors. Charley Grant
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

JOURNAL REPORT | A MONTHLY ANALYSIS

Intro
THE WALL STREET JOURNAL.
The J ducing Monday, June 5, 2017 | R1
2017 Dow Jones & Company. All Rights Reserved.
Repo ournal
rt Po
wsj.c dcast INSIDE
JR om
podc /
a st s
INVESTING FOR
RETIREMENT
Ask Encore:
She Retires. He Doesnt.
Why retiring together
makes senseplus, the
rules on Social Security
spousal benefits
R2

FUNDAMENTALS OF
INVESTING
Is Momentum Dead?
For a decade, momentum
strategies have frustrated
investors. But heres the
case for sticking with it.
R4

ANALYSTS
Wall Street Analysts Do
Better With Experience
A study says those with a
background in an industry
make better watchdogs
R4

NEED TO KNOW
Peak Performance
Matters to Active Funds
Investors may be missing
out if they dont consider
how a fund does in a
complete bull-bear cycle
R5

EXCHANGE-TRADED FUNDS
Biotech ETFs Rebound
LLOYD MILLER Risks remain despite this
years 11% bounceback

The Mistakes We Make

in the category
the College Board. R6
But many factors can improve the chances that

When Paying for

a family will get aid, including the cost of the FIXED-INCOME INVESTING
school, how many children in the family are in Star Bond Managers On
college and any special circumstances. Playing Rising Rates
Theres a tendency among middle-income How the experts at

College
Among the traps people fall into: obsessing
about Ivy League schools; thinking it isnt worth
it to even apply for aid or scholarships; and not
Traps include fixating considering 529 college-savings plansinvest-
ment accounts that offer big tax advantages when
on the Ivy League, or the profits are used to pay for higher education.
Only about one-third of parents are even aware
not even trying for aid of 529s, according to the latest annual survey, re-
leased in May, by St. Louis brokerage firm Ed-
ward Jones.
BY CHANA R. SCHOENBERGER Here are some of the main mistakes that fami-
lies make, and how to fix them.
families for the parents to overestimate eligibil- Loomis, Pimco and other
ity for merit aid and underestimate eligibility firms are adjusting
for need-based aid, says Mark Kantrowitz, pub- R9
lisher and vice president of strategy at the
scholarship site Cappex.com. Merit aid is typi- NEWS CHALLENGE
cally for overqualified students whom the col- Do You Know China?
lege wants to attract, while need-based aid is Try our quiz, ahead of this
about the familys financial situation, not the months big decision on
students own rsum. China-stocks investing
Its also a mistake not to apply for financial aid R10
before freshman year.
Some families delay applications for aid to
subsequent years, to minimize the possibility that SCOREBOARD

AS THE SCHOOL YEAR ENDS, summer vacation
offers parents and students alike the opportunity
to focus on what may be their most dreaded sub-
ject: paying for college.
Unfortunately, many of them will deserve an A
for effort, but a middling C for execution. Thats
because many families continue to commit un-
forced errors in their efforts to save and pay for
the hefty tuition bills that typically await. Its no
disgrace, since few people have all the nuances
covered. But experts say that some of the biggest
blunders being made can be easily fixed.
1.
NOT APPLYING FOR AID
Just 1 in 8 students at private, nonprofit
colleges pay full freight for school. Yet
many upper-income and even middle-class
families dont apply for aid or fill out the Free
Application for Federal Student Aid, or Fafsa.
Many figure that they wont be approved, or that
it will prejudice the admissions decision makers
against their student.
They just assume theyre not going to qualify
for any need-based financial aid, says Anne Stur-
tevant, executive director of higher education at
a request for aid could hurt their students
chance of being admitted. But colleges dont like May 2017 fund performance,
it when families try to game the system, so they total return by fund type.
typically restrict new applications for aid to stu- More on R2.
dents whose financial circumstances have
changed, Mr. Kantrowitz says. U.S. Intl. Bonds
Some parents may not want to apply for finan- stocks* stocks* (intmd.)
cial aid, fearing it could affect their childs admis-
sion chances. In some cases thats true, and par-
ents should first check to see if the school
considers applicants financial situations in its 0.4% 3.4% 0.7%
admission process. Parents should be aware,
Please turn to the next page *Diversied funds only, excluding sector
and regional/country funds
Source: Lipper

Take My Bitcoin...Please!
A Comedian Tries to Mine
The Cryptocurrency for Laughs
BY RYAN VLASTELICA
DO WE HAVE ANY libertari-
ans in the house?
The comedian, Margaux
Avedisian, is setting up her
audience.
You must be so happy with
this administration, she con-
tinues, after maybe half the 50
rencys community.
If you arent laughingor
dont even get the jokethats
understandable. It was told at
a cryptocurrency conference,
and its fair to say that Ms.
Avedisians is a specialized
form of comedy, written by a
bitcoin nerd, for other bitcoin
nerds.
like, in prison or banned from
the country.
Ms. Avedisian entered com-
edy and bitcoin on the same
day in 2012, and both deci-
sions were largely impulsive.
She has no formal perfor-
mance training but signed up
for an open-mic night. After
her set, she met a founder of
GARY HAOVLAND

audience members cheer. It
actually makes Gary Johnson
look like not a bad idea. But
hes like Bitcoin Unlimited
never gonna happen.
JONATHON MARIN
Ive been in crypto since
2012. It was the first time I
worked in an industry where
compared with everyone else,
I was the sane and rational
person.
The 33-year-old Ms. Avedi-
sian is a bitcoin investor,
founder of two bitcoin-related
companies and an adviser and
director at others. But what
sets her apart is this unique
job title: bitcoin comedian. She
performed in May at Consen-
sus 2017, a New York confer-
ence dedicated to all things bit-
Tradehill, an early bitcoin ex-
change. They were looking for
a business-development per-
son, were going to a meeting
in San Diego, and had an extra
seat on the plane, she says. I
was like, Yeah, Ill do that.
The move to technology
wasnt out of left field.
Though she studied psychol-
ogy and chemistry at Mount
Holyoke College, and was
trained and certified as an
emergency medical technician,
Ms. Avedisian also worked at a
variety of startups in San
Francisco, including Answer in
months, then co-founded Mon-
etaGo Inc., which works with
financial institutions on block-
chain-related issues.
Shes like Zelig, says Mi-
chael Terpin, referring to the
Woody Allen character who
finds himself at every pivotal
moment of the Jazz Age. Mr.
Terpin is CEO of Transform
Group, a public-relations firm
focusing on companies that
been just bitcoin-related. At a bigger laugh than the
variety of venues, she does punchline, about why they
routines about Florida and San werent in a nicer car given all
Francisco, as well as her expe- the digital currencies he holds.
riences on dating apps and be- Bitcoin audiences are open
ing a woman in tech. to being made fun of; God
If everyone had a refer- knows theyve been the butt of
ence to what bitcoin was, itd the joke for seven years, Mr.
be a lot easier to do jokes Chenard says before Ms. Ave-
about it outside the context of disians Consensus show.
a conference, Ms. Avedisian Theres a whole raft of com-
says. Meanwhile, bitcoin-spe- edyor tragedythat can be

Margaux Avedisian
Theres a smattering of
laughter, but its drowned out
by the mild gasps and oohs
that come from the audience.
With this crowd, any offense
taken isnt in response to the
reference to Mr. Johnson, the
Libertarian Partys 2016 presi-
dential candidate. Instead, the
audience is reacting to the
knock against Bitcoin Unlim-
ited, a software update that is
controversial in the cryptocur-
coin and blockchain (thats the
ledger used for bitcoin transac-
tions), where no explanations
for her jokes were needed.
Ms. Avedisian has traveled
the world using bitcoin, ac-
cepts tips in the form of the
cryptocurrency and has
worked at every level of the
industry. She has been dubbed,
by herself and others, the
Queen of Bitcoin, a nickname
she wants to shed. Because I
dont have that much bitcoin,
she says, and because Id like
to not get kidnapped.
Its not a crypto confer-
ence without someone who is,
30, a video-based information
service she co-founded.
Wild West adventure
I got a little jadedhow
many photo-sharing apps do
we really need? she says.
But bitcoin seemed like some-
thing that really could disrupt
the world and change finance.
And it was such a Wild West
that you could help shape it.
When Tradehill shut its
doors later that year, Ms. Ave-
disian went on to co-found Al-
phaPoint Exchange, a finan-
cial-software firm specializing
in digital-currency networks.
She stayed there only three
deal with new technologies.
Ms. Avedisian is currently a
vice president at Transform,
but it was at MonetaGo that
she began combining her com-
edy with her work, starting a
weekly comedy show at New
Yorks Bitcoin Centeran edu-
cational and promotional site
for the currencythat lasted
about two years.
We initially laughed about
it: Youre going to tell jokes
about bitcoin? That plays?
says Jesse Chenard, CEO of
MonetaGo. But the best com-
edy is what you live, and she
lives bitcoin.
Her material has never
cific audiences pose unique is-
sues. Theyre nerds, so typi-
cally theyre not the most
gregarious audience, and the
community can be very cliqu-
ish, she says. I find I get
more of a reaction if I roast
the audience a bit or reference
things that are more obscure.
The Antonopoulos joke
Those references to things
that are obscure to bitcoin
outsiders become a sort of in-
side joke. For example, the
setup to one of her Consensus
jokesI was in a car with An-
dreas Antonopoulos, a major
figure in the industrygot a
created out of the fact that
this is literally digital gold,
created out of nothing. Of
course, it must be easier to
have a thick skin when the
digital gold you spent $10,000
on is now worth $2 million.
Ms. Avedisian agrees, and
then jumps on a table to begin
her set in front of the bitcoin
crowd. Im very honored to
be here, cause this may be the
last comedy show some of you
see before you are jailed.
Mr. Vlastelica is a markets
reporter at MarketWatch
in New York. Email him at
rvlastelica@marketwatch.com.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
R2 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

JOURNAL REPORT | INVESTING IN FUNDS & ETFS

Paying for College: What We Do Wrong ASK ENCORE | GLENN RUFFENACH

Continued from the prior page
though, that for at least some of these schools, it will af-
fect only how much aid they receivenot whether their
child gets in or not.
for a Parent Plus loan, which requires a credit check? Or
if parents establish a financial plan that assumes their
student will work 20 hours a week, but the student cant
find a job for as many hours? What if the student plans
to take 15 credits and graduate early, but the work is too

2.
NOT LOOKING INTO A 529
The stats are glum. Yes, more than $275 billion
was stuffed into these tax-advantaged higher-edu-
cation investment accounts at the end of 2016, ac-
cording to the Investment Company Institute. But accord-
ing to the Edward Jones survey, just 32% of Americans are
aware of 529s, and, when asked how they have paid or
how they plan to pay for college, only 14% cited a 529.
That is misguided, says Mr. Kantrowitz, who argues that
529s are the best tool available to save for college.
A 529 account allows you to invest after-tax money for
hard, so she ends up dropping a class and doing poorly
in another, landing her in academic probation and imper-
iling her financial aid? What if her roommate doesnt
work out and she needs to move into another housing
situation in the middle of the semester? How about if the
parents make more money this year than last, and their
student loses some of her aid as a result?
Its important to have a family conversation about how
much parents can afford to pay for college, before deciding
where the student will enroll, Prof. Goldrick-Rab says.
Another common mistake is not factoring in accurate
costs for housing and food, which can exceed a students

SONIA PULIDO
the benefit of your child (or another designated recipient). budget by thousands of dollars a year, she says. As a re-
The money is invested in mutual funds, and no federal tax sult, parents should research the actual cost of living in
is owed on withdrawals as long as they are used to pay for the colleges local area, and not just rely on the figures
qualified higher-education expenses. the college gives out.
If your child wins a scholarship or goes to a military
She Retires. He Doesnt.
4.
service academy, you can withdraw the equivalent amount
from the account with- MISFIRING ON SCHOLARSHIPS

College Fund
'529' plan assets at year-end
out penalty (youll
have to pay income
taxes on the portion
Scholarships are the best way to attend school
courtesy of someone elses money, although
earning outside scholarships will likely reduce
Why Retiring Together
$300 billion
that represents your
gains, but not on your
contributions). If plans
any aid you received from the college by the same
amount. Many students dont approach the scholarship
process in the best way, Ms. Sturtevant says.
Makes Sense (Usually).
250 change, you can retitle Students have a higher likelihood of qualifying for
the account, pointing scholarships in their local area, so they should start in the My wife and I both manage retirement when one spouse
200 it to any direct relative college counselors office by looking through records of work, and were try- is still working, again, is to talk
of the original benefi- scholarships earlier graduates have won, she says. Ideally, ing to figure out about this transitionwhat it might
ciaryanother sibling, their goal should be to obtain more in scholarship money when each of us will look like and how it might workbe-
150 or cousin, for instance. than the school offers them in either grants or loans. retire. What are the forehand. What does each spouse
The plans come with Look at sources youre likely to qualify for, renewable advantages and dis- expect from the new arrangement?
100 state-tax benefits in over four years or a big dollar amount, so when youre advantages of retir- How will roles and responsibilities
some states as well. spending all that effort youll get the biggest bang for ing together or at different times? shift? How will spending patterns
50
Theres little down- your buck, she says. How do you manage retirement and the household budget change?
side: If you take the Just 0.2% of students receive $25,000 or more in when one spouse is still working? (Thats a big one.) Does the retired
money out for a non- scholarships for one year, so a free ride is exceedingly spouse want to travel alone?
0 qualified reason, you rare, Mr. Kantrowitz says. The best bet is to cobble to- There is, of course, no single cor- Ideally, a situation where one
08 09 10 11 12 13 14 15 16 just have to pay in- gether many small scholarships. Students should try one rect answer when it comes to timing spouse continues to work will yield
Sources: Investment Company Institute, come tax on the gains of the free scholarship-matching services online; they retirement. But here are several benefits: a steady paycheck; medical
College Savings Plans Network (CSPN) and a 10% penalty. should never pay a fee for this information. They should points to consider: care (if health insurance remains in
THE WALL STREET JOURNAL. But parents enter as much biographical detail as possible. This will  Retiring at the same time effect); increased Social Security
shouldnt count on allow them to apply for scholarships aimed at niches like tends to work better. Most cou- payments (at some point in the fu-
their financial adviser to set them up with a plan, says students whose siblings have had cancer or whose ances- ples, by definition, navigate big ture); and lessons from the retired
Kent McDill, a researcher at Spectrem Group, which ana- tors came from a specific country. changes in their lives together: relo- spouse about how to navigate the
lyzes the behavior of wealthy investors. A Spectrem sur- Most people skip over scholarships that award less cating, starting a family, choosing transition to life after the office.
vey found that only 16% of investors with more than than $1,000 as well as essay contests, so these are un- (and changing) career paths. Retire-
i i i
$100,000 in nonresidential assets held a 529 account. tapped resources. ment, of course, is a very big

5.
Advisers dont promote the plan because theres no change. If one spouse suddenly is Im 72 and filed for Social Security
benefit to them, Mr. McDill says. That is because advis- OBSESSING ABOUT ELITE SCHOOLS staying home, it can throw a mar- at age 62. My wife, who is still
ers dont get paid extra to push their clients into 529s, Think the Ivy League is the only college pedigree riage out of whack. working, will soon turn 66. Can she
unless they happen to work for a firm that offers a 529 that matters? Just 2.7% of undergraduate appli- Take something as simple as take a 50% spousal benefit and
program, he says. cations in 2015 went to the eight universities housework. When one spouse con- continue to work without penalties?
Even small contributions to a 529 will still help. Par- that belong to this club, Mr. Kantrowitz saysand that tinues to work while the other re- Would her payout be based on my
ents should aim to save at least one-third of their stu- is applications, not individuals, many of whom applied tires, the working spouse may ex- full-age benefit or the reduced ben-
dents expected college costs. Because these expenses to multiple Ivy schools. Most American college students pect the latter to take on more efit I get for early retirement? And
typically go up by a factor of three over 17 years, their are at public institutions where admissions are moder- responsibility for cleaning, running will her benefit continue to increase
savings goal should be the cost of a college education in ately selective, not cutthroat. So while an elite education errands and cooking. But the retired until she reaches 70?
the year the baby was born, Mr. Kantrowitz says. definitely can pay dividends, families should focus on spouse may balk at suddenly be-
If parents cant afford to pay for college all at once aligning what they can spend with their students needs, coming a full-time homemaker. Re- Given that your wife was born be-
and few cantheir best strategy is to pay for some with wishes and academic performance. tiring together can help minimize fore Jan. 2, 1954, she is able to file a
college savings (in a 529, ideally), some with current in- Students will do better if they go to a college they such complications. restricted application at age 66.
come, and borrow the rest. And take advantage of tuition can afford that is a match for them academicallywhere  Except when it doesnt. Yes, That means she can apply for just a
installment plans, which allow payments over the course they will be challenged but not overwhelmed, Ms. Stur- some spouses who retire at the spousal benefit now and switch to
of the school year for a nominal fee. tevant says. same time struggle with new rou- her benefit (based on her earnings
With 4,000 colleges in the U.S., it is also a mistake to tines and new boundaries. But thats history) at some point in the future.

3.
fall in love with one school too early in the process. usually because they failed to take (Note: This particular claiming strat-
NOT BUDGETING FOR TRUE COSTS You cant know what school is best for you after visit- time before retiring to address sev- egy has been eliminated for people
Families have plans for how theyre going to pay ing a single campus, says Prof. Goldrick-Rab. Students of- eral fundamental questions. Among born on or after the above date.)
for college. But they rarely have backup plans, says ten get hung up on a particular school without knowing them: Whats our vision of later life? Her spousal benefit will be equal
Sara Goldrick-Rab, a professor of policy, organiza- their full range of options, she says, and parents struggle How do we plan to fill our days? to half the benefit you would have
tional and leadership studies at Temple University in Phil- to afford it although the student could easily have been What activities and interests will we received at your full retirement age.
adelphia who studies higher-education funding. happy at a different campus. pursue as a couple and individually? Meanwhile, her benefitagain, the
For instance, what happens if a parent doesnt qualify Research shows the more a college charges, the more There is also one specific instance one based on her earnings history
people apply, says Prof. Goldrick-Rab: Just because it is in which retiring at the same time will continue to grow until she
expensive doesnt mean it is good. can cause problems. Men and reaches age 70. And, if she contin-
HAVE A COLLEGE-FINANCE QUESTION IN women often view decisions about ues to work, she wont be penalized.
GENERAL? Well be answering them in future Investing
in Funds & ETFs reports. Write to reports@wsj.com. Ms. Schoenberger is a writer in New York. She can be retirement through different lenses, Social Securitys earnings test, in
reached at reports@wsj.com. says Deborah B. Smith, a professor which benefits can be reduced if a
of sociology at the University of person is collecting a salary and So-
Missouri-Kansas City. cial Security at the same time, no
To be specific, when a husband longer applies when a person
retires, it is frequently an individual reaches her/his full retirement age.
MONTHLY MONITOR | WILLIAM POWER decision: His career has run its
i i i
course, or he has reached a particu-
lar age or goal. Yes, he might dis- And finallya follow-up to volun-
U.S.-Stock Funds Rise, but Many Investors Look to Bonds cuss the decision with his wife, but teer vacations
such chats are more likely to occur
Theres an old Wall pected moves to stimulate the econ- is expected in mid-June. Bond prices after he has made up his mind, or all In a recent column we invited
Street expression omy would lead to higher inflation. move in the opposite direction of but made up his mind. readers to tell us about some of
about long stock ral- While stocks do continue to hover yields, yet investors generally expect When a woman retires, by con- their favorite experiences that com-
lies: Its too early to at highs, bonds have come back from the Feds increases to be gradualnot trast, its more likely to be a family bine travel and volunteer work.
leave the party, but that postelection selloff. Mr. Chaikin generating a sharp rise in yields. decision, Dr. Smith says. A husband Among the recommendations:
stay close to the says, In 20 of [the past] 21 weeks, International-stock funds, mean- expects the wife to leave work be-  Habitat for Humanity. A
door. money has been flowing into bonds. while, rose 3.4% in May, and are up cause he is doing so, or a family number of readers said they worked
Many investors seem to be follow- So thats pretty interesting since the nearly 15% for the year to date. Many member (usually an aging parent) with this venerable group, building
ing that approach. While the stock assumption after the Trump victory is investors have followed the advice to requires care. homes in the U.S. and overseas.
market continued to hit records in wed be seeing money flowing out of park at least some of their portfolio In short, if a wife is pulled from a  African Impact. Offers oppor-
Mayboosting U.S.-stock mutual bonds, and that hasnt been the case. in overseas stocks. The U.S. markets job or career before she might be tunities to work in African communi-
funds and ETFs by an average 0.4% The stock-fund gains in May have gains have often undercut that strat- ready, strains are all but inevitable. ties (education, construction, health
investors fear theyve seen the best of left investors with a solid 6.4% year- egy. So far this year, though, the in-  Negotiating how a single re- care) and help conserve wildlife.
the corporate-earnings gains that to-date average return, according to ternational diversification has paid off. tirement might work. Of course,  Great Shape Inc. Organizes
drove the market in the beginning of Thomson Reuters Lipper data. Growth stocks [in the U.S.] per- many spouses cant, or dont want humanitarian projects in the Carib-
the year, and they are looking to the The bond-market rally boosted formed very well last month, but to, retire at the same time. Layoffs, bean, focused on education, health.
bond market and overseas instead. funds focused on intermediate-matu- value stocks were downin Europe health problems, working longer to  Wilderness Volunteers. Leads
The whole reflation trade is his- rity, investment-grade debt (the most everything was up across the board, qualify for a full pension or to beef 50 weeklong service trips a year
tory, says Marc Chaikin, founder and common type of fixed-income fund) by says Mr. Chaikin. Money is going up a nest egg, a spouse who simply throughout the U.S. (Similarly, see
chief executive officer of Chaikin Ana- an average of 0.7% in May. The funds into Europe. I call this a momentum loves her/his jobany number of is- the Society for California Archaeol-
lytics in Philadelphia, referring to in- are now up 2.5% for the year to date. trade because Europe has really out- sues can translate into differing re- ogy and its Archaeological Site
vestors who had been selling bonds The bond-fund buying has been performed since the beginning of the tirement dates. Stewardship Program.)
and buying stocks after the Novem- intense despite the Federal Reserves yearFrance, Germany, Italy and the If thats the case, the best way to Our thanks to all who wrote in.
ber election of Donald Trump. The bet telegraphing of what it plans to do U.K. Fund money is chasing the Euro-
was that the new presidents ex- with rate increases. Another increase pean economy. Mr. Ruffenach is a former reporter and editor for The Wall Street Journal. His
column examines financial issues for those thinking about, planning and living
Mr. Power is a Wall Street Journal news editor in South Brunswick, N.J. Email him at william.power@wsj.com. their retirement. Send questions and comments to askencore@wsj.com.

The Journal Report welcomes REPRINTS AVAILABLE

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THE WALL STREET JOURNAL. Monday, June 5, 2017 | R3

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R4 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

JOURNAL REPORT | INVESTING IN FUNDS & ETFS

FUNDAMENTALS OF INVESTING

Why Momentum Investings Death

Has Probably Been Exaggerated
Heres the case for still using the much-maligned strategy
on momentum comes from Tobias
Moskowitz, a Yale University finance
professor and a principal at AQR Cap-
ital Management, a firm that manages
a number of momentum-oriented
funds. Prof. Moskowitz says he and
fellow researchers havent detected

JON KRAUSE
any overwhelming increase over the
past couple of decades in the amount
of money invested in the highest-mo-
mentum stocks. Had there been such
an increase, we would worry that mo-
mentum had stopped working be- It Takes One to Know One:
cause too much money had killed the
goose that lays the golden egg. Analysts With Experience
Psychological basis
Might Be Better Watchdogs
JASON SCHNEIDER

Absent too much money chasing

BY MARK HULBERT
MOMENTUM STRATEGIES have
turned in disappointing performance
for nearly the past decade. But there
are still plenty of reasons for mo-
mentum investors to stay the course.
With a momentum strategy, the
investor favors stocks with the best
trailing-12-months returns and shuns
those that have performed worst.
Some of those approaches explicitly
base their strategies on price move-
ments, while others do so implicitly
by focusing on factors such as earn-
ings momentum, trends in analyst
revisions and so forth. But anyone
who sells their losers and holds on
to their winners is at least partly a
momentum investor.
The past 10 years have been frus-
trating for followers of this ap-
proach. According to data compiled
by Eugene Fama, a finance professor
at the University of Chicago Booth
School of Business, and Kenneth
French, a finance professor at Dart-
mouth Colleges Tuck School of Busi-
ness, the decile of stocks with the
highest momentum beat the S&P
500 by just 1.3 percentage points
over the 10 years through March 31
of this year (before transaction
costs). That is less than one-fifth as
much as the strategys average an-
nual advantage over the past 90
years, and almost certainly not
enough to pay the considerable ex-
pensesboth brokerage commis-
sions and bid-offer spreadsin-
volved in the high turnover of a
momentum portfolio.
This frustrating decade has been
particularly evident in the real-world
performance of a momentum news-
letter that, in mid-2007, had the best
long-term record of any of the ser-
vices monitored by the Hulbert Fi-
nancial Digest: NoLoad FundX, ed-
ited by Janet Brown.
This services approach to captur-
ing momentum is to recommend those
no-load mutual funds with the best
performance over the trailing 12
months. Over the 25 years through
mid-2007, it was in first place for per-
formance among any of the nearly 200
Losing Momentum
Trailing 10-year annualized return*
relative to S&P 500 of a portfolio
containing the 10% of stocks with best
trailing 12-month performance, in
percentage points.
25
20
15
6/1/1937
10
5 works best when market volatility is
0 tend to be clustered together. Taken
5
10
1940 60 80
* Before transaction costs
Sources: Eugene Fama, Kenneth French, Hulbert Ratings
THE WALL STREET JOURNAL.
that were monitored. Since then, how-
ever, it has lagged behind the market
by 3.1 annualized percentage points.
Ms. Brown, while acknowledging
that the past decade hasnt been fa-
vorable to momentum approaches,
says she doesnt believe the strategy
has permanently lost its market-
beating potential and, therefore, she
and her firm are sticking with it.
Stick with it
There are several reasons to agree
with Ms. Brown. First, despite a de-
cade of market-lagging performance,
momentum strategies are still ahead
of the market over the long term.
According to the Fama-French data,
for example, from 1927 through
March 31 of this year the top decile
momentum portfolio beat the S&P
500 by 6.6 annualized percentage
points (before transaction costs).
Also, a decade of disappointing per-
formance isnt unprecedented for mo-
mentum strategies. Something broadly
similar occurred in the late 1930s and
early 1940s, according to Kent Daniel,
a finance professor at Columbia Uni-
versity who has extensively studied
momentum strategies. (See chart.)
Yet another reason not to give up
it, momentum would stop working
only if its underlying causes disap- compensation and CEO turnover.
BY JEFF BROWN
peared. One of the most significant Using a database of analysts re-
of those causes, Prof. Moskowitz ports and profiles from LinkedIn,
says, traces to human psychology, IS HAVING INDUSTRY experience the business networking site, the
and in particular to our tendency to good or bad for a Wall Street ana- researchers examined reports by
react irrationally when confronted lyst? 4,845 analysts covering 6,391 firms
with new information. He says he Academics and investors have from 1988 to 2011, distinguishing
has seen no evidence that there has long assumed that analysts will reports by the 25% who had
been any change in investor psychol- ride herd on corporate executives worked in the industry they cov-
ogy that would call into question by exposing high pay, self-serving ered from reports by analysts who
momentums long-term potential. actions and poor performance that hadnt.
Meanwhile, there is a relatively undermine shareholders interests. Then the professors assessed
simple way to improve the profit- And, in theory, an analyst who has such issues as earnings manage-
ability of momentum investing, ac- worked in the industry that he or ment, the frowned-upon practice of
3 /1/ 2017
cording to Prof. Daniel. The strategy she covers could be better at smoothing earnings from quarter
derives from two discoveries that he knowing when a pay package truly to quarter, or boosting reported
and others have made: Momentum spurs a CEO to do a better job. earnings when that will trigger
This is the effective-monitor hy- more pay for the CEO.
low, and periods of high volatility pothesis.
But the opposing impaired- Keeping down CEO pay?
together, he explains, this means a monitor hypothesis says industry The researchers found that com-
trader should be able to improve re- experience could make the analyst panies more heavily covered by in-
turns by having a high allocation to too sympathetic or, worse, leave a dustry-experienced analysts were
momentum stocks when volatility is trail of personal contacts that less likely to have issued financial
2000 low, and investing instead in an in- could undermine the gadfly func- misstatements or earnings restate-
dex fund when volatility is high. tion. ments, less likely to overpay their
New academic research finds CEOs relative to industry norms
A VIX strategy that the first theoryexperience and more likely to replace under-
Prof. Daniel adds that he hasnt makes analysts better watchdogs performing CEOs.
translated his research into a set of generally holds true, says one of Our collective findings indicate
specific trading rules. But a simple the researchers, Fei Xie, associate that industry-expert analysts pro-
rule of thumb would be to focus just professor of finance at the Univer- vide external monitoring of firm
once a month on the CBOEs Volatil- sity of Delawares Lerner College of managers and improve corporate
ity Index, or VIX. If it is below its Business & Economics. governance, the researchers
historical median (17.7 at the end of write.
May), and assuming the future is like Fraud watchers The study also found industry-
the past, allocate an above-average We examine multiple outcomes experienced analysts 31% more
portion of your equity portfolio to of corporate governance, including likely than other analysts to exam-
momentum strategies. He reported the extent of earnings manipula- ine corporate governance issues in
that, in his simulations, an approach tion and probability of committing their reports. These analysts also
such as this would have markedly in- financial fraud, CEO compensation were more likely to issue cash-flow
creased momentums past profitabil- and CEO turnover decisions, Prof. forecasts, discouraging financial
ityeven over the past decade. Xie says. We find broad support misstatements. And they disagreed
If you follow this strategy, keep that coverage by industry expert with firms earnings forecasts
transaction costs low by using ex- analysts improves these gover- more often.
change-traded funds. The momen- nance measures. Future research will look at
tum-based ETF in the U.S. equity Co-authors on the study are whether investors could profit
market with the most assets under Daniel Bradley, finance professor from this insight by betting for or
management is iShares Edge MSCI at the University of South Floridas against firms based on the work
USA Momentum Factor ETF Muma College of Business, and Si- history of the analysts that cover
(MTUM), with an expense ratio of nan Gokkaya and Xi Liu, assistant them, Prof. Xie says.
0.15% (or $15 per $10,000 invested). finance professors at Ohio Univer- The recent work also has impli-
When shifting funds away from mo- sitys College of Business. cations for aspiring analysts, Prof.
mentum, Vanguard Total Stock Research by others has shown Xie says: It clearly makes sense
Market ETF (VTI) has an expense that industry experience improved for brokerage firms to emphasize
ratio of just 0.04%. analysts earnings forecasts and industry experience in hiring and
stock recommendations, but the assigning analysts.
Mr. Hulbert is the founder of the study by Prof. Xie and his col-
Hulbert Financial Digest and a leagues zeroes in on an analysts Mr. Brown is a writer in
senior columnist for MarketWatch. impact on things like the quality of Livingston, Mont. He can be
Email him at reports@wsj.com. firms financial disclosures, CEO reached at reports@wsj.com.

Mutual-Fund Yardsticks: How Fund Categories Stack Up How the Largest Funds Fared Data provided by
Performance numbers are total returns (changes in net asset values with reinvested distributions) as of
Includes mutual funds and ETFs for periods ended May 31. All data are preliminary. Data provided by
May 31; assets are as of April 28. All data are preliminary.
Perfomance (%) Performance (%)
Investment objective May YTD 1-yr 5-yr* Investment objective May YTD 1-yr 5-yr* The Largest Stock Mutual Funds
Diversified stock & stock/bond funds World stock funds Total Return (%)
Large-Cap Core 1.2 8.0 15.9 14.0 Global 2.5 11.9 16.4 11.4 Assets Annualized
Large-Cap Growth 2.9 15.5 18.7 14.7 International (ex-U.S.) 3.4 14.9 15.7 9.2 Fund Ticker ($ billions) May 1-year 3-year 5-year 10-year

Large-Cap Value 0.02 3.7 15.1 13.5 European Region 4.0 16.3 16.4 11.1 Vanguard TSM Idx;Adm VTSAX 560.46 1.0 17.7 9.6 15.2 7.1
Midcap Core 0.3 4.4 14.6 13.3 Emerging Markets 2.3 16.6 23.4 4.6 Vanguard 500 Index;Adm VFIAX 315.98 1.4 17.4 10.1 15.4 6.9
Midcap Growth 1.9 11.6 16.8 13.1 Latin American 1.7 11.7 25.6 3.7 Vanguard Tot I Stk;Inv VGTSX 270.62 3.0 18.3 1.7 8.8 1.1
Midcap Value 0.8 2.5 15.0 13.8 Pacific Region 3.5 16.7 20.8 9.1 SPDR S&P 500 ETF SPY 237.26 1.4 17.4 10.0 15.3 6.9
Small-Cap Core 1.8 1.0 17.5 13.0 Gold Oriented 0.3 6.2 1.0 9.4 Vanguard Instl Indx;Inst VINIX 225.38 1.4 17.4 10.1 15.4 6.9
Small-Cap Growth 0.1 7.8 19.6 12.9 Global Equity Income 2.0 8.4 12.1 9.5 American Funds Gro;A AGTHX 159.41 2.1 20.7 10.8 16.3 7.2
Small-Cap Value 3.0 2.4 17.1 12.6 International Equity Income 3.2 12.6 15.6 6.6 American Funds EuPc;R6 RERGX 136.94 3.4 18.6 3.7 10.5 N.A.
Multicap Core 0.8 7.3 15.6 13.7 Fidelity 500 Idx;Pr FUSVX 118.54 1.4 17.4 10.1 15.4 6.9
Taxable-bond funds
Multicap Growth 2.5 14.1 18.3 14.1 Fidelity Contrafund FCNTX 110.69 3.6 20.8 11.5 15.3 8.7
Short-Term 0.2 1.2 1.8 1.3
Multicap Value 0.3 3.3 14.8 13.5 American Funds Bal;A ABALX 109.95 1.4 12.0 7.4 11.4 6.6
Long-Term 1.0 3.4 4.0 3.6
Equity Income 0.5 4.7 13.4 12.1 Intermediate Bond 0.7 2.5 2.2 2.3 iShares:Core S&P 500 IVV 109.20 1.4 17.4 10.1 15.4 6.9
S&P 500 Funds 1.4 8.4 16.9 14.8 Intermediate U.S. 0.1 1.5 2.3 0.3 American Funds Inc;A AMECX 105.21 1.7 11.8 5.6 10.2 5.2
Specialty Divers. Equity 1.0 4.5 4.9 5.2 Short-Term U.S. 0.7 2.5 2.2 2.3 American Funds CIB;A CAIBX 103.61 2.5 10.1 4.2 8.6 4.0
Balanced 1.0 6.0 10.2 8.3 Long-Term U.S. 0.8 2.4 0.4 1.1 Vanguard Wellington;Adm VWENX 99.09 1.2 12.4 7.1 11.0 6.8
Stock/Bond Blend 1.0 6.0 10.3 7.4 General U.S. Taxable 0.8 3.4 5.1 4.1 American Funds Wash;A AWSHX 90.27 1.5 16.6 8.7 14.3 6.2
Avg. U.S. Stock Fund 0.4 6.4 15.4 12.5 High-Yield Taxable 0.7 4.1 11.4 6.1 American Funds CWGI;A CWGIX 88.08 2.4 17.2 4.9 12.2 4.5
Sector stock funds Mortgage 0.6 1.8 1.6 1.9 American Funds FInv;A ANCFX 85.97 2.2 19.8 10.6 15.8 7.0
Science & Technology 4.1 18.1 29.1 16.6 World Bond 0.8 4.9 7.0 2.1 American Funds ICA;A AIVSX 85.28 1.1 16.5 8.6 14.9 6.3
Telecommunication 1.2 6.6 13.0 11.6 Avg. Taxable-Bond Fund** 0.6 2.7 4.8 2.7 Vanguard Md-Cp Idx;Adm VIMAX 84.91 0.9 16.4 8.9 15.2 7.2
Health/Biotechnology 1.5 11.4 9.0 17.9 Franklin Cust:Inc;A FKINX 82.61 0.9 14.7 2.8 8.3 4.9
Municipal-bond funds
Utility 3.4 10.8 11.6 11.0 Short-Term Muni 0.2 0.7 0.6 0.4
Natural Resources 4.9 13.7 0.5 0.7 Intermediate Muni 1.2 3.2 0.8 2.2
The Largest Bond Mutual Funds
Sector 0.7 0.4 6.4 8.3 General & Insured Muni 1.4 3.5 0.9 3.2 Total Return (%)
Real Estate 0.3 1.0 3.3 9.2 Assets Annualized
High-Yield Muni 1.5 4.9 1.8 4.7 Fund Ticker ($ Billions) May 1-year 3-year 5-year 10-year
Vanguard Tot Bd;Adm VBTLX 179.59 0.7 1.5 2.5 2.1 4.4
Stock & Bond Benchmark Indexes All total return unless noted Vanguard Tot Bd II;Inv VTBIX 126.18 0.7 1.3 2.4 2.0 N.A.
Perfomance (%) Performance (%) PIMCO:Income;Inst PIMIX 82.27 1.0 9.7 5.8 8.4 9.3
Investment objective May YTD 1-yr 5-yr* Investment objective May YTD 1-yr 5-yr*
Vanguard Tot Itl BI;Adm VTABX 82.26 0.5 1.7 3.9 N.A. N.A.
Large-cap stocks Stock indexes Met West:Total Return;I MWTIX 79.30 0.7 1.9 2.4 3.6 6.0
DJIA 0.7 7.5 21.2 14.0 DJ U.S. TSM Growth 1.9 12.5 19.9 16.1 PIMCO:Tot Rtn;Inst PTTRX 73.67 0.8 3.4 2.7 2.8 5.9
S&P 500 1.4 8.7 17.5 15.4 DJ U.S. TSM Value 0.1 3.9 15.4 14.3 Vanguard Sh-Tm Inv;Adm VFSUX 59.91 0.3 2.1 1.9 2.2 3.3
DoubleLine:Tot Rtn;I DBLTX 53.54 0.8 2.7 3.2 3.7 N.A.
Midcap stocks Taxable bonds
Vanguard Int-Tm TxEx;Adm VWIUX 52.22 1.4 1.37 3.0 3.0 4.3
S&P MidCap 400 0.5 4.3 17.2 15.0 Barclays Agg. Bond 0.8 2.4 1.6 2.2
Dodge & Cox Income DODIX 49.31 0.7 4.7 2.9 3.5 5.2
Small-cap stocks Municipal bonds
Vanguard Sh-Tm Bd;ETF BSV 48.55 0.3 1.1 1.3 1.2 3.0
Russell 2000 2.0 1.5 20.4 14.0 Barclays Muni. Bond 1.6 3.9 1.5 3.3
iShares:Core US Agg Bd AGG 44.13 0.8 1.5 2.5 2.2 4.3
Broad stock market International stocks Templeton Gl Bond;Adv TGBAX 39.91 1.4 10.5 1.3 4.7 6.5
DJ U.S. Total Stock Market 1.0 8.0 17.7 15.2 MSCI EAFE (price return) 3.1 12.2 13.3 7.2 Lord Abbett Sh Dur;F LDLFX 39.90 0.3 3.3 2.0 2.7 N.A.
Russell 3000 1.0 8.0 17.7 15.3 Dow Jones World (ex. U.S.) 3.2 13.9 18.1 8.9 T Rowe Price New Inc PRCIX 34.88 0.8 1.7 2.3 2.4 4.6
*Annualized Diversified funds only **Excludes money-market funds Europe, Australia, Far East Note: For funds with multiple share classes, only the largest is shown. N.A.: Not applicable; fund is too new or data not available
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, June 5, 2017 | R5

JOURNAL REPORT | INVESTING IN FUNDS & ETFS

NEED TO KNOW

A Funds Peak Performance Matters

We found the active funds that did best in the complete bull-bear cycle
SPOTLIGHT | VANECK BY JOHN COUMARIANOS
conventional presentation, showing Yacktman Fund (YACKX) and Romicks point is that the full cycle
Berkshires calendar-year returns growth funds such as Fidelity is more important than any of its in-
VECTORS RUSSIA versus those of the S&P 500 index. Growth Company (FDGRX). The dividual parts. Fidelity Growth held

A RUSSIA ETF MANY INVESTORS dont look at how

funds performed during the com- Our winners list
value funds made it on the list
mostly for holding up in the bear
up well enough in a part of the cycle
unfavorable to its style to allow its
HAS INVESTORS plete cycle of a bull and bear market,
instead relying on typical industry
Still, following the lead of Messrs.
Leggio and Romick, we decided to
market of 2008 and early 2009.
Yacktmans lowest point, a peak-to-
performance during the beneficial
part of the cycle to catapult it to in-
SPINNING yardsticks such as one-, three- and
five-year returns.
apply a peak-to-peak approach to the
performance of the 100 largest non-
trough decline of 39.7%, reflects its
relative resiliency in bad times. But
dex-beating full-cycle returns. Inves-
tors should note, however, that the
VanEck Vectors Russia ETF But in doing so, investors may be bond, actively managed funds, from its most recent portfolio shows it is funds Sortino ratio, a measure of
(RSX) is taking a rocky ride as re- missing an important gauge of a 2008 through the first quarter of hunkered down with around 23% in volatility-adjusted returns, was the
lations between the U.S. and funds performanceas we discov- 2017, making sure a single manager cash along with many consumer-sta- lowest among the top-five funds.
Russia have run hot and cold, and ered in our own analysis. or team was responsible for the per- ples companies such as Procter & That means investors had to stom-
as the price of energy, its largest The argument for a complete- formance. We are still living in the Gamble and PepsiCo, and stodgier ach more volatility to reap rewards.
sector weighting, slumps. market-cycle yardstick was made by cycle that Mr. Buffett mentioned in information-technology names such A full cycle view can help inves-
The $2.2 billion funds perfor- Ryan Leggio and Steven Romick of his 2013 letter since it hasnt suf- as Cisco and Oracle. Consequently, tors avoid dismissing funds with a
mance over the past few years FPA Funds, a Los Angeles fund man- fered a major extended decline be- it looks subpar on three-year and subpar three- or even five-year per-
offers a cautionary tale for any in- ager, in an article in the Fall 2015 is- yond that of 2008 and early 2009. five-year comparisons, supporting formance versus an index. Although
vestor with a weak stomach con- sue of the Journal of Portfolio Man- From 100, we narrowed the list by Messrs. Leggio and Romicks point there can be some anxiety associated
sidering a single-country emerg- agement. The two authors define a stripping out sector funds, small-cap that a shorter time frame can some- with trailing the index in the last
ing-market exchange-traded fund. full market cycle as a peak-to-peak funds, midcap funds, and allocation times mask longer-term excellence. stages of a bull market, some down-
The fund soared more than period that contains a price decline funds, since most people have the The growth funds, meanwhile, side protection in a bear market can
47% last year on improving eco- of at least 20% over at least a two- bulk of their stock exposure to do- show impressive results regardless of make up for that lag both in lower
nomic fundamentals and a rebound month period from the previous mestic large-cap funds. That left us the time frame. But they can still have drawdowns and better long-term
in commodities. Russian stocks market peak, followed by a rebound with 60 funds that invested in large- problems. Indeed, they owe much of performance.
also jumped after Donald Trumps that establishes a new higher peak. cap domestic and/or foreign stocks. their full-cycle performance to the It may well be that low-cost index
election. But this year through The authors rely partly on Berk- Of the 60 funds, 41 beat the S&P past few years when growth stocks funds are the most appropriate
May, the fund has shed 6.9%, shire Hathaways 2013 shareholder 500, the MSCI EAFE or the MSCI have rallied. Fidelity Growth counts choice for most investors. But those
while VanEck Emerging Markets letter, in which Warren Buffett re- ACWI from 2008 through the first Apple, Amazon.com, Google parent contemplating alternatives should
Fund (GBFAX) has gained 23.6%, marked that Berkshires book-value quarter of this year. That is a strong Alphabet and Facebook among its know how to judge them properly.
according to Morningstar Inc. increase exceeded the return of the performance, compared with studies top holdings. These investments have To assist that effort, fund companies
There was a lot of wind in the S&P 500 index from year-end 2007 showing a much smaller percentage helped it produce a 14.2% annualized and ratings services should display
sails of the market post Donald through 2013. In the letter, Mr. Buf- of active funds typically beating return for the past five years, helping full-cycle return data along with the
Trumps election, says Michael fett also said that he expected Berk- their relevant indexes. Nevertheless, overcome a peak-to-trough plunge of current standard one-, three-, five-
Cohick, an ETF product manager shires performance to exceed that of one-third of our largest active funds, 47% during the financial crisis. and 10-year data points.
with VanEck. That had a lot to the index over subsequent full-mar- holding more than $1 trillion,
do with the expectation that we ket cycles, and that investors have couldnt beat their index. The full cycles importance Mr. Coumarianos, a former
would perhaps see an end to recourse to index funds if it doesnt. Among the domestic funds beat- The late-cycle dominance of the Morningstar analyst, is a writer in
[U.S.] sanctions [on Russia] or at In subsequent reports, however, ing their index by the highest mar- growth funds may mask earlier Laguna Niguel, Calif. He can be
least a moderation of sanctions. Mr. Buffett has maintained a more- gin were value funds such as AMG stumbles, but Messrs. Leggio and reached at reports@wsj.com.
Few observers, including Mr.
Cohick, think that is still likely,
given the investigations in Wash- Dancing Peak-to-Peak | Funds that beat the S&P 500 by the biggest margin over a full cycle
ington into Trump dealings with
EXCESS 3-YEAR 5-YEAR
Russian government officials. 2008 ANNUALIZED ANNUALIZED ANNUALIZED RETURN OVER
The negative performance this TO 2017* S&P 500 RETURN EXCESS EXCESS MAX BAD VOLATILITY
year could also be attributed to MORNINGSTAR RETURN RETURN FOR CYCLE RETURN RETURN DRAWDOWN (SORTINO RATIO)
energy prices, says Mr. Cohick. Oil FUND TICKER CATEGORY (PCT.) (PCT.) (PCT. PTS.) (PCT. PTS.) (PCT. PTS.) (PCT.) 2008 TO 2017*
has been on a roller coaster since
March amid concerns over AMG Yacktman I YACKX Large Blend 10.57% 7.59% 2.98 2.95 2.70 39.73% 1.17
mounting stockpiles. OPEC offi- Oakmark Select Investor OAKLX Large Blend 10.27 7.59 2.68 2.35 0.40 46.76 0.89
cials extended output cuts into
next year, but the price of Brent Oakmark Investor OAKMX Large Blend 10.14 7.59 2.55 1.35 0.82 45.28 0.93
crude initially fell on disappoint-
ment the cuts werent bigger. Vanguard Primecap Core VPCCX Large Growth 10.07 7.59 2.48 1.01 2.41 40.82 1.02
Energy investments made up Fidelity Growth Company FDGRX Large Growth 9.84 7.59 2.25 1.67 0.89 47.26 0.88
32.4% of RSXs stockholdings as
of May 30, Morningstar says. S&P 500 index 7.59% 48.45 0.76
Daisy Maxey
*through March 31 Source: Morningstar THE WALL STREET JOURNAL.

Consistency keeps you on solid ground.

Columbia Adaptive Risk Allocation Fund is designed to smooth the ride in

uncertain markets. This global multi-asset solution consistently adjusts risk exposure as market
environments change, making the most of the upside and striving to protect on the down.
Learn more about how our approach can consistently help you and your clients stay grounded.

Average annual total returns as of 3/31/17 (%)

Since
Without sales charges 1-year 3-year Inception

Class Z 9.94 4.59 4.40

Class A 9.63 4.34 4.13
With sales charge
Class A (5.75% max. sales charge) 3.35 2.30 2.85

Expense ratios: Class Z: Gross 1.03% | Net 1.00%

Class A: Gross 1.28% | Net 1.25%

columbiathreadneedle.com
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be lower or higher than the performance data shown. Please visit www.columbiathreadneedle.com/us for performance data current to the most recent month end. Class Z shares are sold at net asset value and have limited eligibility. Columbia Management Investment Distributors,
Inc. offers multiple share classes, not all necessarily available through all rms, and the share class ratings may vary. Contact us for details.
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Investments involve risk,including the risk of loss of principal.Market risk may affect a single issuer,sector of the economy,industry or the market as a whole.The funds investment in other funds subjects it to the investment performance (positive or negative),risks and expenses of these underlying funds.Investing in derivatives is a specialized activity that involves special risks that
subject the fund to signicant loss potential,including when used as leverage,and may result in greater uctuation in fund value.Commodity investments may be affected by the overall market and industry- and commodity-specic factors,and may be more volatile and less liquid than other investments.Short positions (where the underlying asset is not owned) can create unlimited risk. As a non-
diversied fund,fewerinvestmentscouldhaveagreateraffectonperformance.Investmentsselectedusingquantitative methodsmayperformdifferentlyfromthemarketasawholeandmaynotenablethefundtoachieveitsobjective.Marketorother(e.g.,interestrate)environmentsmayadverselyaffecttheliquidityoffundinvestments,negativelyimpactingtheirprice.Generally,thelessliquidthe
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Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes.The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately,
which may cause slight variations in the distribution percentages.) The Morningstar ratings for the overall- and three-year periods for the A-share are 4 stars and 4 stars and for the Z-share are 4 stars and 4 among 247 and 247 Tactical Allocation funds, respectively, and are based on a Morningstar Risk-
Adjusted Return measure. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance gures associated with its three-,ve- and ten-year (if applicable) Morningstar Rating metrics.ColumbiaThreadneedle Investments (ColumbiaThreadneedle) is the global brand name of the Columbia andThreadneedle group of companies.Columbia funds are distributed by
Columbia Management Investment Distributors,Inc.,member FINRA,and managed by Columbia Management InvestmentAdvisers,LLC.Columbia Management Investment Distributors,Inc.,225 Franklin Street,Boston,MA 02110-2804 2017 Columbia Management InvestmentAdvisers,LLC.All rights reserved. 1763433
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R6 | Monday, June 5, 2017
JOURNAL REPORT | INVESTING IN FUNDS & ETFS
EXCHANGE-TRADED FUNDS
Biotech ETFs Are Getting
Hearts Pumping Again
Risks remain despite this years 11% bounceback
BY GERRARD COWAN
Rebound
Nasdaq Biotechnology Index,
BIOTECH STOCKS took a weekly closes
pounding in 2016 but have
bounced back since, with a 3500
range of exchange-traded
funds benefiting from the re- 3000
surgence.
The biotechnology sector 2500
harnesses biological processes
to create technologies and
2000
products for a wide variety of
challenges, from expanding 2016
crop sizes to treating disease. Source: FactSet
Pharmaceutical-focused firms THE WALL STREET JOURNAL.
are a major component of bio-
tech funds, with names like lini, head of SPDR Americas
Celgene Corp. and Gilead Sci- research at State Street Global
ences Inc. often among their Advisors, which runs SPDR
top 10 holdings. S&P Biotech ETF (XBI), a
Last year, the Nasdaq Bio- $2.95 billion fund with a year-
technology Index, or NBI, fell to-date gain of 14.47% through
about 21%. Politics was a ma- May. Mr. Trumps tax plans
jor contributor, analysts say, and efforts to bring back prof-
as drug prices became a its held offshore could spur
punching bag in the presiden- merger and acquisition activity
tial campaign. In September in the sector, he says, as many
2015, for example, a Hillary
Clinton tweet on price goug-
ing sent stocks tumbling.
of the large biotech names
have cash holdings overseas.
The sector benefited from
Things have turned around M&A in 2015, he says, and a
this year, with the NBI up 11% return to that could be a nice
so far. Mutual funds and ETFs tailwind for the segment.
measured by Lippers health/ That point is echoed by
biotechnology category are Neelarjo Rakshit, an analyst
likewise up 11% in 2017 after for ETFdb.com, who says the
falling 10% last year. number of M&A deals in bio-
Politics, some fund managers tech in 2016 was the lowest in
say, has played a role in the six years. There is increasing
turnaround, as well.
Election effect
anticipation that M&A activity
will increase, which is raising
the overall price-to-earnings
More specifically, Donald
Trumps victory in the presi-
ratio in the sector.
Then there is the fact that
dential election made inves- last years drop in biotech
tors more optimistic, they say. stocks led to significant reduc-
Although Mr. Trump also criti- tions in companies valuations,
cized high drug prices during says Dave Gedeon, vice presi-
the campaign, investors be- dent and head of index re-
lieved Mrs. Clinton was more search and development for
likely to bring in tougher mea- Nasdaq Global Information
sures aimed at controlling Services. Many of these firms
prices, says Michael Cohick, have continued to generate
product manager at VanEck, healthy earnings, he says, so
which runs VanEck Vectors they start to actually look
Biotech ETF (BBH), a $645 very favorable from a valua-
million fund that has gained tion perspective.
9.18% this year through May.
Investors also expected Mr. Biotech risks
Trump would be in favor of Still, the biotech sector has
streamlining the Food and a number of vulnerabilities
Drug Administrations drug- that investors need to keep in
approval process. There also mind, analysts say. One of the
has been innovation in areas biggest is that it remains sus-
like immunotherapies, Mr. Co- ceptible to political develop-
hick says, with more products ments. Mr. Cohick points to a
in clinical trials. dip in biotech stocks in recent
Politics may have played a months that may have been
role in the biotech rebound in driven by factors including a
other ways, says Matt Barto- tweet from President Trump
Tracking Exchange-Traded Portfolios
Performance figures are total returns for periods ended May 31; for largest exchange-traded funds and
other portfolios, ranked by asset size.
Fund Symbol
Assets
($ bil.)
SPDR S&P 500 ETF SPY 235.79
iShares Core S&P 500 ETF IVV 112.53
ARK Web x.0 ARKW 105.00
Vanguard Tot Stk Mkt Idx ETF VTI 79.14
iShares MSCI EAFE ETF EFA 76.08
Vanguard 500 Index ETF VOO 68.73
Vanguard FTSE Emerging Markets ETF VWO 54.77
Vanguard FTSE Developed Markets ETF VEA 53.76
PowerShares QQQ Nasdaq 100 QQQ 52.20
iShares Core US Aggregate Bond ETF AGG 45.34
iShares Core S&P Mid-Cap ETF IJH 39.59
iShares Russell 1000 Value ETF IWD 36.92
iShares Russell 1000 Growth ETF IWF 36.01
iShares Russell 2000 ETF IWM 34.90
SPDR Gold Shares GLD 34.49
Vanguard Total Bond Market ETF BND 34.28
iShares iBoxx $ Inv Grade Cor B ETF LQD 33.98
Vanguard REIT ETF VNQ 33.85
iShares MSCI Emerging Markets Index Fund EEM 31.47
iShares Core MSCI Emerging Markets IEMG 31.25
Vanguard Value ETF VTV 30.85
iShares Core S&P Small-Cap ETF IJR 29.61
Vanguard Growth ETF VUG 27.28
iShares Core MSCI EAFE IEFA 26.75
Vanguard Div Appreciation ETF VIG 24.40
*Expense charge is a maximum of 8 cents a share Assets are estimated N.A.= Not applicable, fund is too new.
Note: Total returns are based on the change in the net asset values, not changes in market prices. Net asset values can vary from market prices, which
therefore can reflect a premium or discount to the net asset values.
THE WALL STREET JOURNAL.
Europes ETF Trek Speeds Up
Still far behind the
U.S., the market hits
a higher gear
BY TANZEEL AKHTAR
LUKE MACGREGOR/BLOOMBERG NEWS
IT HAS TAKEN nearly a de-
cade for exchange-traded
funds to gain traction in the
European market, but they fi-
nally seem to be catching on.
Propelled by the U.S. mar-
ket, where investors have
been pouring money into pas-
sive investments such as
ETFs, the appetite for Fidelity has launched two smart-beta ETFs in London.
cheaper funds that track Eu-
ropean indexes has been some 1,350 exchange-traded MiFid II, as the rules pack-
slowly increasing. products listed on the LSE. age is known, will create a
Fund-tracker Morningstar Lida Eslami, manager of level playing field for passive
Inc. predicts that by 2020, listed products at the London funds to compete against ac-
ETFs listed in Europe will exchange, says a range of new tive funds, in that it will re-
have more than $1 trillion in ETPs have been coming to quire all trades, including
assets under management. market in London. In April, those over the counter, to be
Currently, there is about she says, Fidelity Interna- reported, experts say.
$700 billion invested in Euro- tional listed it first European The regulation will im-
pean ETFs, according to Jose ETFs in London. prove transparency, liquidity
Garcia-Zarate, associate di- Still, Europe is at least five and price discovery for Euro-
rector of passive-strategies years, and some would say a pean ETFs, says Mr. Craswell
DAVID JUNKIN
research at Morningstar. decade, behind the U.S. in the of Brown Brothers. As such, it
Weve seen the European adoption of ETFs. Whats be- has the potential to dramati-
ETF market shifting to a hind the lag? Mr. Garcia- cally increase the ETF market
higher gear, Mr. Garcia- Zarate says one major reason in Europe, he says.
pledging to bring drug prices Zarate says. In addition to is that Europe hasnt had the Already, the rise of low-
way down and uncertainty ETFs that track core indexes, same demand from individual cost index-tracking funds is
around the repeal of the Af- ETF providers are bringing to investors the U.S. has. contributing to an increase in
fordable Care Act. Some com- market products that offer In the U.S. there is a very mergers and acquisitions
panies also have missed earn- more sophisticated strategies, active participation of the re- among asset managers.
ings expectations. including smart beta (in tail community in the takeup Recently, two of Scotlands
The sector also tends to be which holdings are weighted of ETFs. This isnt the case in largest asset-management
volatile, with stocks experienc- by something other than Europe, he says, adding that firms, Standard Life and Ab-
ing dramatic moves based on market value). distribution channels and erdeen Asset Management,
drug approvals. For some who Mr. Garcia-Zarate calls it a regulation are more condu- announced a merger. Both
want to invest in the health- natural evolution: First, one cive to reach retail clients in firms, which run actively
care sector, taking a more-di- starts with plain-vanilla, the U.S. managed funds, said in their
versified approach might be straightforward exposures. Andrew Craswell, vice merger document that index
2017 more sensible, says Ben John- Then when clients are happy president at Brown Brothers funds are gaining ground and
son, director of global ETF re- with those and are comfort- Harriman, explains that Eu- that many actively managed
search at Morningstar. There able with how ETFs operate, rope isnt a homogeneous funds have had a hard time
are a number of broader ETFs they start demanding more- market (so the way ETFs are consistently outperforming
that focus on health care as a complex exposures and strat- distributed can differ from their benchmarks, after fees.
whole, he says, which could egies. region to region). Still, his
provide more-stable returns. firm expects growth to accel- Ms. Akhtar is a writer in
Biotech has always been a Playing catch-up erate over the next three to London. She can be reached
difficult sector to value, says At the end of 2016, there five years as new players at reports@wsj.com.
Tushar Yadava, an investment was about $3.4 trillion in ETF bring innovation in terms of
strategist at BlackRock Inc.s assets globally, according to the types of products offered
iShares unit, which runs the ETFGI LLP, a London-based and how they are sold.
largest biotech ETF in the U.S.: consulting firm. U.S.-listed FUND RESULTS
iShares Nasdaq Biotechnol- funds, which have been Regulatory changes
ogy ETF (IBB), a $7.75 billion around since about 1993, con- Regulatory changes such Lippers A-to-Z
fund that is up 7.97% this year.
On the one hand, the out-
look for companies can be rel-
tinue to attract the most
money, pulling in some 50%
of all new ETF investment.
as the Markets in Financial
Instruments Directive, a rules
package set to take effect
WSJ
.COM
mutual-fund and
ETF monthly
performance
atively clear in that there is The first ETF listing on the across Europe in January listings and
patent protection, and a de- London Stock Exchange came 2018, are expected to contrib- other statistics are free at
fined customer base. But there in April 2000. Now, there are ute to ETF growth in Europe. WSJ.com/FundsETFs.
is also that regulatory over-
hang: Any change to the
drug-pricing landscape would
turn companies revenue mod-
els upside down, he says. SPOTLIGHT | REALITY SHARES DIVS
Still, when you look at the
companies and their underly-
ing fundamentalsespecially
the large-cap biotechsyouve
AN ETF THAT COUNTS ON THE
got a pretty good backdrop of
solid earnings and solid reve- DIVIDEND STREAM
nue, he says. That lends it-
self well to investing in bio- Stock investors looking for some sta- dividend at maturity. DIVY gains in
tech. You just have to weather bility in this market might find it in value if the actual rate of dividend
the storms of momentum, of overall dividend growth. growth is higher than the estimated
valuation and regulation. Thats the thinking behind Reality level.
In the long run, the sector Shares DIVS ETF (DIVY), a $53.4 Dividends provide a stable return
holds some key attributes, million exchange-traded fund that is stream, Mr. Ervin says, growing on av-
says Ryan Issakainen, senior up 3.01% this year through May. erage by about 6.5% to 7% annually.
vice president and ETF strate- The idea is to invest in the aggregate growth Dividends have contracted only three times
gist at First Trust Advisors, rate of dividends of companies in the S&P 500, across the index as a whole in the past 45
whose $931 million First rather than the growth in value of the shares years, and always by much less than the value
Trust NYSE Arca Biotechnol- themselves or any other metric, says Reality of stocks, he says. This stability comes from
ogy Index Fund (FBT) is up Shares Chief Executive Eric Ervin. their close link to earnings: If a companys earn-
15.07% this year. The fund is based on the S&P 500 as a ings grow by 10%, then its likely the dividends
Some of the biotech sectors whole: The index is imagined to be one gigantic will grow, too, he says.
products are aimed at the big- stock, with DIVY looking to benefit from the Sometimes volatility is the investors friend,
gest challenges in society, from growth rate of the combined dividends across producing outsize gains relative to the com-
expanding food supplies to the index. This is largely achieved through the panys actual performance, Mr. Ervin says.
tackling the health problems of use of tools like dividend-swap contracts. These DIVY is aimed at investors who may have
aging populations. Theyre are financial instruments that are arranged with the bulk of their portfolio invested in stocks, but
certainly at the cutting edge of another institutionfor example, an investment are looking for an alternative thats potentially
innovation, he says. bankin which Reality Shares makes a payment a bit more stable. Thats what DIVY is based
based on the estimated future value of the in- on: the historical stability of the dividend
Mr. Cowan is a writer in dex dividend, and the counterparty ultimately stream.
Northern Ireland. He can be pays Reality Shares the actual value of the index Gerrard Cowan
reached at reports@wsj.com.
IN TRANSLATION
Volume
(000s)
Expense
ratio
Launch
date May
Performance (%)
YTD 1-year THEMATIC INVESTING
8,683,357.5 0.09 01/22/93 1.4 8.6 17.4
334,550.9 0.07 05/15/00 1.4 8.7 17.4
The world has changed, and through cobs. For investors, that may mean
5,750.1 0.89 09/30/14 16.1 40.3 59.4
necessity so has the world of invest- looking for investments centered on
204,384.9 0.04 05/24/01 1.0 8.0 17.7
ing. That has given rise to something what is expected to be the growing
3,105,390.1 0.33 08/14/01 3.7 14.1 16.4
called thematic investing. need and demand for specialty health
64,133.6 0.04 09/07/10 1.4 8.6 17.4
Unfortunately, a lot of investors services.
1,171,898.0 0.14 03/04/05 1.2 13.8 24.0
have built up expectations of investing There also will be a huge transfer of
1,144,245.1 0.07 07/20/07 3.4 14.1 17.0
returns based on the returns of the wealth between the baby boomer gen-
3,029,941.8 0.20 03/10/99 3.9 19.5 29.2
past, says Jay Jacobs, director of research at eration and their children, the millennials, says
239,428.8 0.06 09/22/03 0.8 2.4 1.5
New York-based fund-management company Mr. Jacobs. Such a transfer will affect many in-
Global X. dustries, including tax planning, money manage-
105,877.6 0.12 05/22/00 0.5 4.3 17.1
He points to slowing population and eco- ment and real estate. The companies in those
243,134.2 0.20 05/22/00 0.1 2.9 14.4
nomic growth in the U.S. as part of the reason industries that can successfully woo millennials
184,238.9 0.20 05/22/00 2.6 14.2 20.0
that investing returns in the future likely wont likely will do better than those that cant.
3,384,394.2 0.20 05/22/00 2.0 1.5 20.4
mirror those of the post-World War II period. Then there is the introduction of disruptive
1,033,865.6 0.40 11/18/04 0.1 9.1 4.1
Theres a growing mismatch between expecta- technologies such as robotics, artificial intelli-
208,899.8 0.05 04/03/07 0.8 2.4 1.5
tions and what is needed to reach retirement gence, the Internet of Things and lithium-bat-
442,870.4 0.15 07/22/02 1.4 3.9 4.1
goals, he says. Put more simply, the investing tery technologies, which is a theme that crosses
551,406.2 0.12 09/23/04 0.7 0.5 2.7
ideas that worked in the past likely need to be a number of industries. Lithium is extracted by
7,996,474.5 0.72 04/07/03 2.9 17.0 26.7
reworked. mining companies. It is used in the automobile
705,631.1 0.17 10/18/12 2.7 17.1 26.3
For some ultralong-term investors, that sector for batteries and vital for powering
172,919.5 0.06 01/26/04 0.1 3.4 15.8
means looking for decadeslong themes with the smartphones.
292,108.6 0.12 05/22/00 2.2 0.2 19.6
potential to change the economy across tradi- If the trend continues, resource companies
53,414.3 0.06 01/26/04 2.8 15.3 19.9
tional industry lines. that specialize in these specialty minerals stand
461,193.6 0.12 10/18/12 3.7 14.6 16.7
For example, now that people are living lon- to increase their profits, and investors that bet
40,357.5 0.08 04/21/06 1.6 9.7 16.1
ger, aging likely will lead to a more proactive on them could enjoy gains.
approach to health and wellness, says Mr. Ja- Simon Constable
Source: Thomson Reuters
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, June 5, 2017 | R7
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
R8 | Monday, June 5, 2017 THE WALL STREET JOURNAL.

JOURNAL REPORT | INVESTING IN FUNDS & ETFS

Category Kings in 16 Realms Data provided by Leaders and Laggards Data provided by

Top-performing funds in each category, ranked by year-to-date total returns (changes in net asset values Performance numbers are total returns (changes in net asset values with reinvested distributions) as of
with reinvested distributions) as of May 31; assets are as of April 28. All data are preliminary. May 31; assets are as of April 28. All data are preliminary.
Best-Performing Stock Funds
Total Return (%)
Large-Cap Core Small-Cap Core Assets Annualized
Fund Ticker ($ millions) May YTD 1-year 3-year 5-year
Assets Total return (%) Assets Total return (%)
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr* Direxion:S Korea Bull 3X KORU 5.5 28.2 96.9 124.2 4.4 N.A.
Amer Cent:Foc DG;Inv 15.0 3.3 17.9 23.9 14.7 B Riley Dvsfd Eq;Instl 1.6 0.6 1.4 35.4 N.A. Direxion:CSI Ch Int Bl2X CWEB 3.2 11.9 83.4 N.A. N.A. N.A.
GMO:Quality;III 8,549.7 3.6 15.9 2.2 14.5 Gabelli Eq:Foc Five;I 164.5 0.4 9.1 6.8 9.7 Rex VolMAXX SVW Ftrs Str VMIN 11.4 5.8 76.1 170.8 N.A. N.A.
Pear Tree:Quality;Ord 12.4 3.6 15.8 19.2 13.8 Highland:Sm-Cp Eqty;A 63.2 2.1 8.0 18.8 14.5 Direxion:S&P OG EP Br 3X DRIP 19.8 18.8 75.1 32.8 N.A. N.A.
BNY Mellon:Foc Eq Op;M 444.9 5.2 15.7 27.3 16.6 Pru Jenn Small Co;Z 3,579.8 0.7 8.0 18.7 13.7 Direxion:MSCI Ind Bull3X INDL 104.8 3.7 72.5 61.1 1.4 6.8
Direxion:iBillionaire Id 13.9 3.8 14.6 18.0 N.A. AlphaMark Act Mgd SC 26.8 1.4 7.9 1.8 N.A. VelShs DlyInv VIX ST ETN XIV 719.7 6.5 70.4 149.9 27.2 55.8
BlackRock:LC Gro;A 121.4 2.0 14.4 22.5 15.3 Royce Fd:Premier;Inv 2,335.0 0.5 7.9 24.4 11.4 Direxion:Semicnd Bull 3X SOXL 236.9 26.7 69.7 244.2 62.3 73.8
Indep Franch Prtnrs USEq 1,814.1 3.3 13.8 19.2 15.2 Bernzott US Sm Cap Val 81.8 0.7 7.8 17.7 N.A. ProShs II:ShVIX STF ETF SVXY 530.7 6.4 69.6 147.6 26.6 54.7
Frst Tr:Capital Strength 412.3 2.8 13.3 17.8 17.8 AMG RR Select Val;I 4.9 0.3 7.5 24.0 13.8 ProShares:UltP QQQ TQQQ 1,453.2 11.4 67.4 102.6 45.9 56.3
Vanguard PRIMECAP;Adm 5,233.6 3.0 13.1 24.4 19.2 Invesco Sel Co;A 542.7 0.3 7.5 24.2 11.3 Direxion:Ntrl Gs Rl Br3X GASX 3.8 23.1 61.8 11.7 N.A. N.A.
Davis Research;A 4.7 2.7 12.8 21.9 14.7 Ancora/Thelen SmMidCp;I 74.9 0.7 7.1 16.9 N.A. Direxion:FTSE EU Bull 3X EURL 30.5 14.6 58.9 38.9 10.5 N.A.
Category Average: 84.4 1.2 8.0 15.9 14.1 Category Average: 284.5 1.8 1.0 17.5 13.2 Direxion:Hbldrs&Sup Bl3X NAIL 8.0 0.1 58.4 47.0 N.A. N.A.
VelShs 3x Inv Nat Gas DGAZ 249.8 23.4 58.3 65.6 16.9 40.7
738 897 858 822 664 869 18 978 933 667
Direxion:Tech Bull 3X TECL 261.8 11.5 58.2 104.6 43.7 46.7
Direxion:MSCI EM Bull 3X EDC 160.8 7.9 57.7 79.7 10.3 1.9
Large-Cap Value Small-Cap Value VelShs VIX Short Vol Hdg XIVH 51.4 4.0 50.4 N.A. N.A. N.A.
Assets Total return (%) Assets Total return (%) Direxion:China Bull 3X YINN 145.9 12.3 49.7 63.0 3.5 9.0
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr* ProShares:UlS O&G Ex&Pr SOP 0.7 12.8 48.8 15.3 N.A. N.A.
DoubleLine:Sh Enh CAPE;I 351.7 2.5 12.6 28.4 N.A. LMCG Internatl SmCp;Inst 7.1 2.9 16.3 15.7 N.A. ProFunds:UltraChina;Inv UGPIX 10.9 9.0 47.7 47.9 6.0 15.5
Barclays ETN+ShillerCAPE 62.3 1.9 11.8 26.7 N.A. Paradigm:Micro-Cap 42.1 2.9 11.4 4.8 15.5 Direxion:MSCI DM Bull 3X DZK 24.0 10.4 46.2 43.1 6.2 20.8
Natixis:VN Select;Y 138.1 1.9 1.7 17.5 N.A. Aristotle SmCp Eqty;I 3.9 1.2 5.8 21.5 N.A.
ProShares:Ult Tech ROM 163.4 8.5 43.2 76.6 31.1 32.2
MassMutual Sel:Fc Vl;I 738.7 1.3 8.5 25.7 15.6 Symons Conc SC Val Inst 1.3 0.9 5.4 N.A. N.A.
Direxion:EnergyBear 3X ERY 41.3 10.3 43.0 18.4 3.2 29.9
BlackRock:USA Sz FI;K 1.5 1.4 8.2 N.A. N.A. Ancora MicroCap;I 18.5 0.6 5.2 23.8 14.4
Quantified STF;Inv QSTFX 89.5 7.7 41.5 34.0 N.A. N.A.
Deutsche CROCI EqDv;A 196.7 1.9 8.6 17.5 12.4 Royce Fd:Oppty;Inv 1,485.7 1.3 4.8 3.5 14.3
ProShs II:UlS Blm Nat Gs KOLD 7.8 15.6 41.4 38.6 34.8 10.5
WellsFargo:LV US Eq;Inst 34.7 2.0 7.5 N.A. N.A. Perritt Ultra MicroCap 58.2 3.6 4.4 23.8 13.9
ProShares:Ult QQQ QLD 1,135.3 7.6 41.4 62.2 31.61 37.6
Cullen:High Div Eqty;I 1,894.7 1.4 7.3 14.0 12.3 Walthausen:Sel Val;Rtl 83.9 2.1 3.2 12.7 13.6
iPath ETN LgEn MSCI EM EMLB 1.9 6.0 41.4 72.5 1.4 8.1
Pioneer Disc Val;A 583.6 0.9 7.2 19.6 12.7 Frst Tr Srs:AQA Eqty;C 36.6 1.2 3.4 17.9 N.A.
ARK Innovation ARKK 20.1 12.5 41.3 45.3 N.A. N.A.
MFS Value;I 42,439.1 1.4 6.6 14.2 15.3 DGHM MicroCap Val;Inst 24.1 1.6 2.8 N.A. N.A.
Rydex:NASDAQ 2x;H RYVYX 350.5 7.5 40.9 60.6 30.4 36.4
Category Average: 486.2 0.2 3.7 15.8 13.5 Category Average: 328.5 3.4 2.4 17.9 12.6 Rydex:MR NASDAQ-100 2S;H RMQHX 31.3 7.5 40.8 62.0 N.A. N.A.
467 525 59 488 375 267 311 35 294 219 ProFunds:UltraNASDAQ;Inv UOPIX 320.8 7.5 40.7 60.7 30.4 36.3

Best-Performing Bond Funds

Total Return (%)
Large-Cap Growth Small-Cap Growth Assets Annualized
Fund Ticker ($ millions) May YTD 1-year 3-year 5-year
Assets Total return (%) Assets Total return (%)
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr* Measured Risk Strategy;I MRPIX 12.4 3.3 23.8 N.A. N.A. N.A.
Transam:Cap Growth;I 718.1 6.5 29.5 3.4 18.9 Baron Discovery;Rtl 15.0 3.7 18.9 4.6 N.A. UBS AG Enh Eur Gl HY ETN FIHD 681.3 5.5 19.3 26.3 N.A. N.A.
Morg Stan I:Growth;A 355.4 6.3 28.9 3.4 18.7 Brown Cap Sm Co;Inv 3,636.7 5.0 16.3 26.4 18.5 Direxion:20+Y Trs Bl 3X TMF 85.0 5.4 13.8 12.3 9.9 0.1
Baron Fifth Ave Gro;Inst 158.6 4.3 24.5 25.2 15.9 T Rowe Price New Hzns 19,122.8 2.1 16.7 25.8 17.2 Mrkt Vctrs ETN Dbl Lg Eu URR ... 6.6 13.5 1.7 15.3 6.3
JPMorgan:Dyn Gro;R5 343.8 5.5 22.9 27.5 16.6 Morg Stan I:SCG;I 546.4 3.6 16.6 2.5 11.3 PowerShares Eu Curr HLV FXEU 6.8 4.1 13.4 14.3 N.A. N.A.
JPMorgan:LgCp Gro;I 12,151.0 6.3 21.8 25.4 14.4 JPMorgan:Dyn SCG;I 163.2 1.1 16.4 31.3 14.9 Barings:Emer Mkts LCD;I BXLIX 5.2 2.7 13.2 10.6 N.A. N.A.
Touchstone Inst:Snd Gr 2,267.8 3.3 21.6 19.0 13.5 Frontier:Tmpni SCG;Inst 44.6 3.2 16.1 23.3 13.7 JPMorgan:Dvs Rtn Euro CH JPEH 28.3 4.1 12.8 14.5 N.A. N.A.
Columbia:Select LCG;Z 4,296.3 2.6 21.6 18.2 15.7 JPMorgan:SmCp Gro;R6 1,252.2 1.2 15.9 31.1 15.2 iShares:Curr Hgd Em Mkts HEEM 284.0 2.3 12.2 18.5 N.A. N.A.
Touchstone:Sel Gro;Y 2,399.0 3.3 21.6 18.9 12.9 Nationwide:Sm Co Gro;IS 198.3 4.8 15.5 28.5 18.1 ProShs II:Ult Euro ULE 13.3 6.0 12.0 2.2 14.9 6.2
Edgewood Growth;Inst 8,646.1 3.7 21.1 27.2 19.1 Conestoga SMid Cap;Inst 2.6 3.3 15.2 26.8 N.A. PowerShares Dv EP Cu HLV FXEP 1.4 3.0 11.9 12.6 N.A. N.A.
Marsico Inv Fd:Focus 532.5 4.1 2.3 14.9 12.6 Alger:Sm Cap Foc;Z 356.2 5.3 15.1 28.6 14.4
Pru EM Debt Loc Curr;Z EMDZX 30.8 1.8 11.4 12.6 2.4 0.6
Category Average: 85.2 2.9 15.5 18.7 14.7 Category Average: 182.8 0.7 7.8 19.6 12.9 Dreyfus EMD Local Curr;I DDBIX 38.3 1.7 11.4 12.0 4.7 0.4
637 725 695 662 535 521 596 577 553 446 Hartfd:EM Local Dbt;Y HLDYX 100.2 2.0 11.3 13.6 2.1 1.9
Barings:EM DB Tot Rtn;Y BXEYX 10.5 1.5 11.0 16.8 N.A. N.A.
Goldman:Loc EM Dbt;I GIMDX 353.7 1.9 10.8 11.7 3.6 0.3
Midcap Core Multicap Core GAMCO Gl:Gab Gl RI&D;I GAGIX 48.9 2.5 10.8 14.1 5.5 7.8
Assets Total return (%) Assets Total return (%) Stone Harbor Loc Mk;Inst SHLMX 961.1 1.5 10.8 12.6 3.8 1.6
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr*
T Rowe Price Int:EM LC PRELX 303.9 1.7 10.7 14.2 2.5 0.3
CB Select;IS 16.4 4.8 19.4 29.0 N.A. TCW:New America Prm Eq;I 1.4 5.6 21.3 29.9 N.A. PIMCO:Em Local Bd;Inst PELBX 3,940.1 1.4 10.6 13.6 3.1 0.5
Guggenhm Insider Snt ETF 71.1 1.4 12.9 16.8 13.6 Schwab Cap:Lg-Cap Gro 234.4 2.5 14.2 19.7 14.7 Payden:Em Mkt Lcl Bd;Inv PYELX 159.1 1.7 10.4 13.3 2.6 0.2
Tarkio 69.4 1.7 11.3 32.7 17.4 USA MUTUALS:Vice;Inv 236.9 2.7 13.9 17.5 14.4
13D Activist;I 28.5 0.2 1.3 25.2 16.2 Manning&Napier:PB Max;S 694.8 2.1 13.6 13.2 11.3 Eaton Vance EM Loc Inc;I EEIIX 337.5 1.6 10.3 14.4 0.3 1.8
JPMorgan:MdCp Eq;R6 2,737.5 1.7 9.3 14.7 N.A. SPDR MFS Sys Gro Eqty 24.2 2.6 13.3 18.2 N.A. Franklin Inv:Cv Sec;Adv FCSZX 2,353.9 1.8 10.3 15.0 6.4 11.4
Guggenhm MC Core ETF 165.0 0.8 9.2 17.9 15.2 Thornburg Value;A 926.6 1.9 13.0 2.5 17.2 Ashmore:EMs LC Bd;Inst ELBIX 85.4 1.3 10.0 14.2 2.6 0.4
Aberdeen:US MdCp Eq;Inst 1.6 1.6 9.2 15.3 N.A. Franklin Cust:Gro;A 13,173.4 2.5 12.8 19.7 15.0 Rydex:Wkn Dlr 2x Str;H RYWBX 4.1 3.9 10.0 5.3 13.2 7.6
Sterling:Cp SMID Opps;I 8.6 1.8 8.8 N.A. N.A. T Rowe Price Spec:Gro 3,644.3 2.3 12.6 19.5 13.4 Lord Abbett EM Loc Bd;A LEMAX 10.6 1.6 10.0 11.5 4.2 N.A.
Govt Street MdCp 47.1 1.3 8.7 17.3 14.0 Aspiration Redwood 19.1 2.4 12.5 28.9 N.A. Frst Tr VIII:CEF Inc Opp FCEF 22.5 0.9 10.0 N.A. N.A. N.A.
Calvert US MCC Resp Ix;I 31.6 0.9 8.4 18.9 N.A. Glbl X Millennials Thmtc 4.3 1.9 12.4 16.7 N.A. JPMorgan:Dvs Rtn Intl CH JPIH 41.8 3.2 10.0 21.1 N.A. N.A.
TCW:Em Mk Loc Cur Inc;I TGWIX 125.3 1.5 9.9 14.5 1.5 0.6
Category Average: 413.2 0.3 4.4 14.6 13.3 Category Average: 538.6 0.8 7.3 15.6 13.7
UBS E-TRACS MP 2xL DJ SD DVYL 34.3 1.4 9.8 30.0 20.5 29.7
44 466 455 42 32 697 816 81 759 575 Voya:EM Loc Curr Debt;P ILCDX 92.2 2.0 9.8 10.5 3.2 N.A.

Worst-Performing Stock Funds

Midcap Value Multicap Value Assets
Total Return (%)
Annualized
Assets Total return (%) Assets Total return (%) Fund Ticker ($ millions) May YTD 1-year 3-year 5-year
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr*
ProShs II:UltVIX STF ETF UVXY 388.1 23.7 75.2 95.9 86.8 89.9
Neuberger MC Int V;Inv 94.1 0.9 6.9 17.6 15.0 Biondo Focus;Inv 25.4 1.3 15.0 29.7 14.4 VelShs Dly 2x VIX ST ETN TVIX 175.8 23.7 75.2 96.0 86.8 89.9
Vanguard MC Val Idx;ETF 14,865.4 0.1 6.0 17.3 16.2 AllianzGI:NFJ MCV;A 651.7 5.8 13.6 25.4 15.9 VelShs 3x Long Nat Gas UGAZ 452.2 26.3 66.7 40.2 83.0 64.5
Transam:Sm/Md Cap V;A 879.6 0.7 5.4 21.9 14.1 RvrPrk:Foc Value;Instl 39.5 1.5 9.0 14.8 N.A. Rex VolMAXX LVW Ftrs Str VMAX 1.7 14.8 56.5 82.5 N.A. N.A.
Nuveen Mid Cp Value;I 19.0 0.3 5.3 14.5 14.6 Barrett Opportunity 6.6 2.0 8.8 2.4 13.9 Direxion:S&P OG EP Bl 3X GUSH 138.5 21.0 55.1 41.2 N.A. N.A.
Alambic Mid Cap Val Plus 0.7 1.4 5.2 N.A. N.A. SS Inst Inv:Dsp US Eq;I 3.6 1.8 8.8 16.7 N.A. iPath Bloomberg NatGas A GAZ 4.3 25.2 53.4 0.1 52.9 32.0
Transam:MdCp Val Opps;I 154.7 0.3 5.0 14.8 N.A. Fidelity Lvrgd Co Stk 3,134.2 0.5 8.4 13.9 13.1 VelShs Dly 2x VIX MT ETN TVIZ 1.5 5.0 52.4 69.4 49.1 61.4
Am Beacon:MC Val;Inv 622.8 0.4 4.6 18.2 14.8 Sound Shore;Inv 25.3 2.2 7.1 17.2 16.0
Direxion:Nat Gas Bull 3X GASL 46.5 23.2 50.0 46.9 90.4 70.9
Nuance Mid Cap Val;Inst 34.0 0.8 4.3 14.3 N.A. AMG Mg Fairpt FcEq;I 7.1 1.2 7.6 21.1 N.A.
ProShs II:VIX ST Fut ETF VIXY 130.8 10.7 47.5 74.9 53.7 60.3
Ancora Special Oppty;I 15.9 0.3 4.2 15.2 14.2 Vanguard Windsor;Adm 1,833.9 1.2 7.0 18.5 15.5
iPath ETN SP500 VIX ST A VXX 984.3 10.7 47.4 75.1 53.7 60.3
Hennessy:Crnst MdCp;Inst 173.3 1.5 4.6 9.9 12.9 Longleaf Partners Fund 3,396.8 1.1 6.8 18.7 2.0
VelShs VIX ShTm ETN VIIX 14.8 10.7 47.4 75.1 53.7 60.3
Category Average: 319.6 0.8 2.5 15.3 13.8 Category Average: 486.8 0.3 3.3 14.8 13.5
Direxion:Semicnd Bear 3X SOXS 33.7 24.1 47.2 80.1 61.1 62.4
154 174 166 159 12 286 35 339 329 261 ProShs II:Ult Blm Nat Gs BOIL 42.4 17.0 45.8 15.1 62.1 41.6
Direxion:S&P Btech Br 3X LABD 100.6 14.3 43.1 66.7 N.A. N.A.
VelShs 3x Long Crude UWT 385.8 10.9 43.1 N.A. N.A. N.A.
Midcap Growth Multicap Growth
VelShs 3x Long Crude ETN UWTI 127.8 10.9 43.0 57.7 83.7 65.3
Assets Total return (%) Assets Total return (%)
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr* Direxion:Jr Mnr Bear 3X JDST 124.4 2.4 42.7 80.9 84.1 N.A.
Direxion:Hbldrs&Sup Br3X CLAW 2.7 1.7 42.7 49.9 N.A. N.A.
Baron Partners Fund;Rtl 184.9 4.8 26.2 31.4 17.9 Zevenbergen Genea;Inst 3.7 9.3 35.5 46.8 N.A.
ProShares:UltP Sht QQQ SQQQ 518.5 11.1 42.0 56.7 45.7 48.8
Renaissance IPO ETF 13.1 6.4 22.1 25.4 N.A. Morg Stan MultiCp Gr;A 347.3 7.7 29.4 3.3 17.1
Direxion:MSCI EM Bear 3X EDZ 108.6 9.0 41.0 59.7 24.5 30.1
BlackRock:MC Gro;A 638.3 3.7 21.5 26.7 17.4 Baron Opportunity;Rtl 236.1 4.4 27.2 25.5 12.6
Virtus:KAR Mid-Cap Gr;A 92.1 3.6 19.5 21.5 11.2 Morg Stan I:MCG;A 621.6 7.7 26.4 19.4 8.3 iPath ETN ShEn MSCI EM EMSA 0.9 12.0 40.9 51.3 12.9 16.2
Harbor:Mid Cap Gro;Inst 347.8 5.6 18.6 23.0 14.3 Franklin Cust:Dyna;A 3,438.7 5.4 23.9 28.6 16.7 ProShares:ULT O&G Ex&Pr UOP 1.2 13.9 39.5 21.9 N.A. N.A.
Baron Focused Gro;Inst 196.4 3.8 18.3 19.9 11.8 Berkshire:Focus 58.8 5.4 23.6 33.6 14.7 Direxion:Tech Bear 3X TECS 15.9 11.5 39.2 58.0 45.5 45.9
J Hancock II:MC Stk;NAV 1,638.7 5.2 17.3 21.7 14.7 Fidelity OTC 14,842.6 5.2 22.7 31.6 3.0 Direxion:Gold M Id Br 3X DUST 269.4 8.7 38.8 65.2 72.5 53.4
Baron Asset Fund;Rtl 2,773.1 3.3 17.2 22.8 15.7 Zevenbergen Growth;Inst 5.7 4.2 21.8 28.2 N.A. Direxion:China Bear 3X YANG 57.9 12.4 37.8 54.9 41.5 45.2
PowerShares Russ MdCp PG 68.0 4.5 16.7 21.7 12.7 RidgeWorth:Innv Gr St;I 27.6 4.4 21.7 28.7 17.5 Direxion:EnergyBull 3X ERX 521.5 11.1 35.9 11.7 38.7 6.1
Baron Growth;Inst 675.9 1.5 16.5 2.0 14.3 Fidelity Adv Srs Eqty Gr 955.9 4.1 2.8 23.8 N.A. ProFunds:UlSh China;Inv UHPIX 1.9 9.5 35.8 42.8 27.1 32.2
Category Average: 33.6 1.9 11.6 16.8 13.1 Category Average: 325.7 2.5 14.7 18.3 14.5 Direxion:MSCI DM Bear 3X DPK 5.1 10.1 34.0 44.1 17.4 35.3
PowerShares S&P SC Enrgy PSCE 46.0 11.3 33.2 9.4 34.6 13.9
358 417 48 398 327 495 57 559 541 411
ProShares:UlS Tech REW 2.5 8.5 31.7 47.8 32.9 33.1

Latin American funds Natural Resources Worst-Performing Bond Funds

Total Return (%)
Assets Total return (%) Assets Total return (%) Assets Annualized
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr* Fund Ticker ($ millions) May YTD 1-year 3-year 5-year

Glbl X MSCI Argnt ETF 144.1 5.6 4.0 45.4 15.2 PowerShares WldHill CE 13.2 0.4 13.6 8.8 2.2 iPath ETN Trs 10Y Bear A DTYS 49.4 -6.7 -19.1 6.2 -15.0 -9.9
VnEck Vctrs:Brazil Sm Cp 12.6 3.6 21.6 63.2 8.9 Frst Tr:NASDAQ CE Green 56.3 3.8 12.9 2.1 16.1 Barclays Inv US TC ETN TAPR 16.6 -6.7 -16.4 -1.9 N.A. N.A.
BullMark LatAm SL ETF 3.2 1.3 18.1 27.1 N.A. PowerShares Water Res 797.1 0.8 9.5 16.4 9.6 Direxion:20+Y Trs Br 3X TMV 443.0 -5.8 -16.2 -3.4 -25.4 -17.7
Tierra XP Latin Amer RE 2.9 1.9 17.9 21.6 N.A. Frst Tr:Water 235.8 0.5 7.5 22.1 15.1 ProShares:UPSh 20+ Trs TTT 89.9 -6.2 -15.6 -2.0 -24.2 -16.6
iShares:MSCI Brz Sm-Cap 59.0 5.4 17.9 61.9 8.1 ICON:Ntrl Res;S 7.8 1.5 2.5 13.6 8.9 iPath ETN Trs Lng Bear A DLBS 20.0 -5.8 -14.1 8.6 -15.4 -8.9
iShares:MSCI Mexico Cap 129.2 0.2 16.4 4.6 0.5 Frst Tr IV:NA EnrgyInfra 1,663.6 1.3 0.1 11.4 N.A. FX Strategy;I FXFIX 25.80 -3.6 -13.5 2.7 4.3 -2.7
JPMorgan:Latin Am;R6 46.8 1.2 15.6 24.9 N.A. Spirit of Amer:Energy;A 698.1 4.4 2.4 9.5 N.A. Mrkt Vctrs ETN Dbl Sh Eu DRR ... -6.2 -12.3 -1.3 12.7 2.5
iShares:MSCI Chile Cap 488.4 0.2 15.9 23.9 4.7 PowerShares WH Prg Eng 24.7 3.2 2.5 14.4 3.0 ProShs II:UlS Euro EUO 277.6 -5.9 -11.9 -1.6 11.4 1.7
T Rowe Price Int:Lt Am 674.0 1.9 14.5 27.5 1.2 Dreyfus Natural Res;I 36.7 1.3 3.2 14.4 5.5 Transam:AA Sh Hzn;R4 TSHFX 195.2 -13.4 -11.5 -10.2 -3.0 0.1
Fidelity Latin America 599.0 3.5 13.9 22.8 6.4 SPDR S&P N Amer Ntrl Res 882.2 2.6 5.3 2.3 N.A. ProShs II:UlS Yen YCS 210.8 -1.3 -10.6 -2.4 3.0 11.3
Category Average: 294.4 1.7 11.7 25.6 3.7 Category Average: 394.2 4.9 13.7 0.5 0.7 Rydex:Stg Dlr 2x Str;H RYSBX 12.7 -4.0 -10.4 1.4 10.4 3.1
33 42 4 4 31 76 99 97 93 67 ProShares:UlS 20+ Yr Trs TBT 2,197.0 -4.1 -10.3 -0.1 -15.6 -10.2
iPath ETN Trs 5Yr Bear DFVS 1.2 -3.1 -10.3 1.9 -9.4 -6.7
Direxion:7-10Y Trs Br 3X TYO 29.4 -2.6 -9.6 -2.9 -13.5 -10.2
Financial Services Science and Technology ProShs II:UltSht AUD CROC 15.2 1.3 -7.2 -10.3 7.4 N.A.
Assets Total return (%) Assets Total return (%) iPath ETN Trs Steepenr A STPP 3.5 -2.7 -6.4 3.3 -4.3 -1.6
($ millions) May YTD 1-yr 5-yr* ($ millions) May YTD 1-yr 5-yr*
Direxion:M7-10Y B 2x;Inv DXKSX 5.1 -1.7 -6.1 -1.4 -8.5 -6.2
Innovator IBD 5 38.2 4.7 13.2 28.1 N.A. Direxion:CSI Ch Int Bl2X 3.2 11.9 83.4 N.A. N.A. ProShs II:Short Euro EUFX 15.3 -3.0 -6.0 -0.7 5.8 N.A.
PIMCO:Captl Sec&Fin;Inst 17.5 1.4 7.4 15.2 N.A. ARK Innovation 2.1 12.5 41.3 45.3 N.A. ProShares:UlS 7-10Y Trs PST 127.4 -1.7 -5.7 0.1 -7.6 -5.5
PowerShares KBW Hi Dv Y 291.4 3.4 6.3 23.3 9.2 ARK Web x. 24.2 16.7 4.3 59.4 N.A. ProFunds:Rs USD;Inv RDPIX 22.7 -2.1 -5.5 0.3 4.7 1.2
Guggenheim LC Optmz Dvsf 1.3 0.2 5.3 9.2 N.A. EMQQ EM Intrt & Ecom ETF 47.5 7.2 38.7 39.2 N.A.
WisdomTree:Blm USD Bull USDU 189.0 -1.4 -5.3 -0.1 5.2 N.A.
Fidelity Sel Insurance 584.6 1.9 5.2 18.4 18.4 PureFds Vid Game Tch ETF 9.0 11.8 34.1 43.5 N.A.
Direxion:20+Y Trs Br 1X TYBS 5.3 -1.9 -5.2 0.4 -7.7 -4.8
Fidelity Sel Brkg & IM 392.4 0.7 5.2 17.7 14.2 Fidelity Sel Technlgy 4,799.8 6.4 3.4 44.0 19.6
PowerShares DB USD Bull UUP 705.9 -2.1 -5.2 0.9 5.3 1.8
SPDR S&P Insurance ETF 133.2 0.1 4.8 2.5 19.8 Fidelity Adv Tech;A 1,367.4 6.6 3.3 44.1 19.3
ProShares:Sht 20+ Treas TBF 710.1 -2.0 -5.2 0.4 -7.7 -4.9
Davis:Financial;A 1,126.0 0.2 4.4 18.0 14.9 iShares:N Amer Tech-Soft 91.4 6.2 27.4 3.6 18.9
iPath ETN Trs 2Y Bear A DTUS 7.7 -0.9 -5.1 -1.4 -6.4 -5.6
SPDR S&P Cap Mkts ETF 98.4 1.2 4.1 15.2 12.1 BlackRock:Sci&Tch Op;A 385.8 6.4 26.7 38.8 19.5
Rydex:Inv Gv LB Str;Inv RYJUX 145.5 -1.9 -5.0 1.6 -7.3 -3.6
iShares:US Ins ETF 163.7 0.9 3.4 18.6 17.7 Firsthand Tech Opptys 9.2 4.2 26.6 4.2 17.1
Access One:Fx Br HY;Inv AFBIX 0.8 -0.3 -4.6 -11.4 -8.7 -11.8
Category Average: 576.1 1.7 0.9 2.4 15.3 Category Average: 384.1 4.7 2.3 32.3 17.8 Catalyst/Prince UH Inc;C HIFCX 2.2 -1.1 -4.5 7.9 N.A. N.A.
76 96 93 88 73 143 183 18 169 143 ProShares:Sht High Yield SJB 94.2 -1.1 -4.5 -12.0 -5.4 -8.3
Rydex:Inv Hi Yld Str;C RYIYX 3.1 -0.6 -4.4 -10.3 -8.6 -11.5
N.A.: Not applicable; fund is too new * Annualized Note: For funds with multiple share classes, only the largest is shown. Note: For funds with multiple share classes, only the largest is shown. N.A.: Not applicable; fund is too new or data not available
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THE WALL STREET JOURNAL. Monday, June 5, 2017 | R9

JOURNAL REPORT | INVESTING IN FUNDS & ETFS

FIXED-INCOME INVESTING

What Some Star Bond Managers Are Doing

Interest rates are expected to rise, MICHAEL COLLINS AND ROBERT
thanks to the Fed, but mutual-fund TIPP, Prudential Total Return

managers differ on the strategy Like Loomis Sayles, Prudentials $24

billion Prudential Total Return Bond
fund (PDBAX) is heavy on corporates and
BY TIM MULLANEY
light on Treasurys: The 8% of its assets in
Treasurys is a fraction of their weight in
NOTHING ABOUT the bond market is ever simplenot even the best way to the benchmark index. The fund is over-
play this years expected rise in interest rates. weight (relative to its benchmark) in cor-
As markets look for the Federal Reserve to raise rates three or even four porate debt, including high-yield, emerg-
times this year, star bond managers have embraced different strategies. ing-markets bonds and asset-backed
Much of their differences boil down to a simple question: Do they share the securities.
economic optimism that fueled the so-called Trump Bump (the surge of mar- Prudential feels good about credit risk,
ket enthusiasm that followed Donald Trumps election win) or not? and it will add risk to get yield, says Mr.
For every manager like Loomis Sayless Dan Fuss, betting on corporate SCOTT MATHER, Collins, senior investment officer at Pru-
bonds, believing defaults will be rare in a strong economy, another is adding Pimco Total Return dential. But it isnt infinite: The fund,
less-glamorous mortgage securities that allow for more weakness. Pros like which is up 3.75% this year through May,
Bryan Whalen, co-manager of MetWest Total Return (MWTIX), say the cor- has pared junk holdings by a third, a move
porate-bond rally is overdone despite a recent downtick, and postelection Pimcos $74 billion Pimco Total Mr. Collins mostly chalks up to profit-tak-
optimism is, too. Return fund (PTTAX) is now run by ing after the rally in corporate bond prices
We have felt that earnings growth, real economic growth, real income three managers, including Mr. over the past year.
growth, have been insufficient to support the debt load that has built up, Mather, and pretty conservatively. We made most of our trims, on valua-
Mr. Whalen says. You can ignore fundamentals for a long time, but not for- Only 19% is in corporate credit, and tion mostly, earlier in the year, says Mr.
ever. only 3% represents high-yield debt. Collins. The U.S. data has been a little
We talked to major investors about how theyre approaching the bond Instead, the funds holdings are con- weaker, and there has been more appreciation lately that its going to be
market, and why. Here are some highlights. centrated in government-related se- hard to implement a lot of the administrations pro-growth agenda.
curities and mortgage-related paper,
categories that overlap because of RICK RIEDER, BlackRock Inc.
ELAINE STOKES, Loomis Sayles Bond Washingtons role in mortgage-bond
markets.
To Mr. Mather, this is a logical Few oversee more bond assets than Mr.
The managers of the $14 billion Loomis reaction to the 9% run-up in corpo- Rieder, chief investment officer for global
Sayles Bond Fund (LSBRX) think the rate debt prices in the first half of fixed income at the worlds largest asset
economy is healthy enough to take some 2016, and it has paid off modestly: manager. He says he is using hedging in-
credit risk on bonds to boost returns. Total Return is beating its bench- struments and global diversification to
To a degree, that has meant acting and mark with a 3.16% gain this year avoid too heavy a macro bet in either di-
thinking something like stock pickersnot through May, after trailing in 2014 rectionbut BlackRock is betting that pa-
surprising, since nearly a quarter of the and basically matching it for the per with maturities of two to five years
fund is in high-yield (or junk-rated) debt, 2013-15 period overall, according to will outperform short-term Treasurys as
an investment that requires detailed Morningstar data. Within corpo- rates rise.
knowledge of company fundamentals and rates, Pimco favors conservative BlackRock has added inflation-pro-
an appreciation of how sentiment can plays such as insurance firms, as tected Treasurys to lower the interest-rate
move short-term values. well as mortgage bonds in both resi- sensitivity of its $1.6 trillion portfolio, in-
Co-manager Ms. Stokes and her part- dential and commercial sectors, ex- cluding the flagship $28 billion BlackRock
nersMr. Fuss, Matt Eagan and Brian cept for debt from real estate built Strategic Income Opportunities (BASIX) fund, which is up 2.02% this year
Kennedyalso are weeding out bonds for retailers, which are losing cus- through May. It also is reducing exposure to principal losses from rising U.S.
from challenged industries such as retailing in favor of financial-company tomers to online rivals. The manag- rates by adding debt from countries where interest rates are still falling.
bonds, which have been bolstered by stiffer capital requirements so unpopu- ers also are skeptical of developed- The most eye-catching part of the BASIX fund may be its concentration
lar in Washington. market non-U.S. corporate debt. in derivatives, which account for more than half of the fund. Lower volatility
One note of caution: Citing political risk, Mr. Fuss said in March that the High quality is more affordable has made it possible to trade 10-year options on U.S. Treasury rates, for ex-
fund is focusing on shorter-term bonds, a shift Loomis says is mostly within and lower quality is less affordable ample, letting BlackRock take interest-rate risk with more downside protec-
its government-bond holdings. The fund is still adding corporate bonds, con- after the repricing, Mr. Mather tion, Mr. Rieder says. Heading into spring, the fund was beginning to in-
fident that credit conditions are solid, Ms. Stokes say. says. (The 9% run-up in corporate- crease exposure to investment-grade corporate bonds and shave exposure
Sometimes it works, sometimes it doesnt: Ms. Stokes concedes the fund debt prices was especially pro- to junk, he says. At BlackRock, risk is in, exuberance isnt.
was too early in 2015 to bet on energy bonds resurgence, when low oil prices nounced in high-yield bonds.) And One thing thats distinct about fixed-income is the extraordinary variety
increased repayment risks. Loomiss fund beat its benchmark by 6.9 percent- if [stimulus] is coming, its likely to of tools you can use, Mr. Rieder says. We diversify like crazy. We want a
age points in the year through May 31 , but its performance ranks low among be smaller and to take a lot longer, stable yield and a fund that isnt as volatile as the benchmark.
comparable funds over three years through May. he says, referring to the administra-
Were long-term investors, she says. Were more into buying into down tions tax-cut and infrastructure- Mr. Mullaney is a writer in Maplewood, N.J. He can be reached at
markets and not as worried about staying close to the benchmark. spending proposals. reports@wsj.com.

ULTRASHORT BOND FUNDS BECKON

With the Federal Reserves
next interest-rate rise all but
certain in June and the stock
market at or near highs,
some investors are taking a
more-defensive approach.
Historically, that has
meant money-market funds.
But new rules have placed li-
quidity constraints on those
funds. Rising interest rates
also mean that investors
could see fees creep up, ef-
fectively neutralizing much of
the yield that makes money-
market funds attractive.
As a result, ultrashort-
duration bond funds and ex-
change-traded funds are be-
coming more popular. About
$13 billion is in ultrashort
bonds year-to-date through
May 24, compared with $8.2
billion at the end of 2016, ac-
cording to Morningstar data.
Ultrashort-duration bonds
are bonds that are due to
come to maturity in less than
two years. These securities
can sometimes be removed
from bond indexes once the
maturity date drops below
one year, creating an oppor-
tunity for short-term inves-
tors to pool them and cap-
ture the yield at maturity.
The resulting performance of
an ultrashort-duration bond
product often looks similar to
or slightly better than that of
a money-market fund.
We view this product as a
way to help advisers and ETF
strategists with their tactical
cash management, says Jo-
seph Barrato, CEO and direc-
tor of investment strategies
at Arrow Funds. The yield is
higher than a traditional
money-market fund, with
similar liquidity.
Still, there are key differ-
ences. For one, investors in
the bond category will be tak-
ing on credit risk, however
briefly. Vanguard Group, for
example, advises investors in
its Ultra-Short-Term Bond
Fund (VUBFX) to hold off on
tactical moves as a way to
manage some of this risk.
We discourage people from
entering and exiting before
the bonds reach maturity,
says Chris Philips, head of
Vanguard Institutional Advi-
sory Services. Exiting early
increases the amount of churn
and cost in the holdings.
Karen Schenone, a fixed-
income-product strategist in
BlackRocks Global Fixed In-
come Group, isnt so sure.
She says the basket of securi-
ties in an ETF or fund offers
diversity, which lowers the risk
and mitigates the need for
advisers or investors to man-
age individual securities selec-
tion. We ask people tolook
at what they need in terms of
immediate liquidity, she says.
Anything over and above
that could go into an ultra-
short-bond position, say on a
six- to 18-month timeline.
Bailey McCann

S&P DJI can factor in more

SPOTLIGHT | MAINSTAY CONVERTIBLE FUND

A CONVERTIBLE FUND HAS ITS OWN

REWARDS, RISK
Torn between bonds and stocks?
Theres a mutual fund for both.
MainStay Convertible Fund
(MCOAX) invests in convertible corpo-
rate bonds, which are debt instru-
ments that can be converted into the
underlying stock of the issuer, usually
when they reach maturity.
MCOAXs approach is designed to limit
downside potential, while allowing a virtually un-
limited upside, says fund manager Edward Sil-
verstein. A convertible bond pays less in interest
income than one would expect from a similar,
nonconvertible bond with a similar rating (typi-
cally BB or BB minus, Mr. Silverstein says). For
example, a standard bond that pays 6% to 8%
interest would pay only about 2% to 3% in its
convertible form.
The potential upside of the convertible bond,
however, more than compensates for the differ-
ence, Mr. Silverstein says. Say an investor pays
$1,000 for the bond, with an agreement that he
or she can opt for 20 shares of the company at
maturity, rather than take back the principal. If
those shares combined are valued at more than
$1,000, the investor profits. If the value of the
shares is less than the principal, the investor
can simply take back the initial investment.
Fine-tune your portfolio
The latter scenario shouldnt be
by combining factor indices
viewed as a good investment, Mr. Sil- that enhance returns and
verstein says, as the investor wouldnt
see a great return. Still, the convertible
manage risk. S&P DJI provides
approach allows investors to potentially tools so you can dial your
benefit from a surging stock price, exposures up or down and
without having to invest in the stock
itself. You get equity-like returns, without tak- mix factors with systematic
ing equity risk. precision. Set your own levels
The $1.1 billion fund is up about 4.98% this
year through May. The fund managers decide and factor in more.
whether to take back the principal or invest in
shares based on simple math, Mr. Silverstein
says. If they opt for stock, the shares generally
are sold right away, and the proceeds used to
indexology
invest in more convertible bonds. syncs up factors
Convertible bonds are generally non-invest-
ment-grade, or junk bonds, Mr. Silverstein spdji.com/indexology
says, just as the nonconvertible high-yield ver-
sions are. The convertible bonds have greater
volatility, however, because ultimately they are
linked to the performance of a share price,
which tends to move around much more than S&P Dow Jones Indices LLC, a division of S&P Global 2017. All rights reserved. S&P and Indexology are
the price of a bond. The risk with convertibles registered trademarks of Standard & Poors Financial Services LLC. Dow Jones is a registered trademark of
is definitely a little bit greater than you would Dow Jones Trademark Holdings LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices
see on a high-yield bond, Mr. Silverstein says. receives compensation for licensing its indices to third parties. S&P Dow Jones Indices LLC does not make
But its certainly lower than equities. investment recommendations and does not endorse, sponsor, promote or sell any investment product or fund.
Gerrard Cowan
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
R10 | Monday, June 5, 2017
JOURNAL REPORT | INVESTING IN FUNDS & ETFS
Test Your Smarts onChina Stocks
BY DAISY MAXEY
CHINAS STOCK MARKET is more than 100
years old and ranks second in size behind
the U.S. But access for foreign investors
has been tightly controlled.
That might be about to change. In what
has become an annual ritual, investors are
awaiting a decision on June 20 by index
provider MSCI Inc. on whether it will add
domestic Chinese shares, known as A
shares, to its MSCI Emerging Markets In-
dex. Such a move would be a blockbuster
that could draw billions of dollars into
China, because asset managers who track
the index would then allocate money to the
included China shares.
Foreigners can buy and sell shares is-
sued by Chinese companies listed in Hong
Kong but have more limited access to the
mainland exchanges in Shanghai and Shen-
zhen, where mainland-China-based compa-
nies are listed. The latter exchanges are
known for irregularities, insider trading,
accounting fraud and a heavy hand by the
government, which has ordered companies
and fund managers to buy stocks during
downturns, for example.
Whether or not youre considering
jumping into Chinas capricious markets,
the expected MSCI decision this month is a
good time to test your knowledge of the
market:
1. The Shanghai Stock Exchange was
re-established in what year?
A. 1890 B. 1901 C. 1990 D. 2008
ANSWER: C. Securities trading in Shanghai
began in the 1860s but the current Shang-
hai Stock Exchange was re-established in
1990 after a 41-year hiatus due to Chinas
Communist revolution. When it was re-es-
tablished, the SSE was in large measure a
means of getting private money to state-
owned entities, says William Kirby of
Harvard Business School. More private
companies are now listed, but the SSE is
still a vehicle through which private sav-
ings are invested in state-owned enter-
prises, he says.
2. What is the market capitalization of
Chinas A-share market?
A. $1.5 billion B. $7.3 trillion
C. $4.5 trillion D. $16 billion
ANSWER: B: At about $7.3 trillion in size,
Chinas domestic stock market trails only
that of the U.S., according to the World
Bank.
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NEWS CHALLENGE: FUNDS AND INVESTING
Will more foreigners soon be welcome at the Shenzhen Stock Exchange, above, and Shanghai?
3. Chinas stock market is
dominated by _________________.
A. Golden statues of dragons
B. Hedge-fund managers
C. Individual investors
D. Hong Kong investors
ANSWER: C. Individuals dominate trading.
Some 61% of Chinese investors trade at
least once a month, compared with 37%
of investors globally, according to a 2016
study by State Street Corp. Chinas
stock market is widely understood as
speculative, says Marshall Meyer at the
University of Pennsylvanias Wharton
School. People are betting on govern-
ment policy, not on the fundamentals
generally. Chinese economist Wu
Jinglian famously called Chinas market
worse than casinos, noting that casinos
have rules.
4. Who is permitted to purchase
Chinas A shares?
A. Chinese investors only
B. Chinese investors and some foreign
investors
C. Chinese citizens with a net worth of
$1 million or more
D. Foreign investors who are living in
China
ANSWER: B. Chinese may purchase A
shares, and some foreigners may also buy
limited amounts.
TYRONE SIU/REUTERS
5. Name a reason why some index pro-
viders havent included A shares.
A. Not enough A share listings
B. Concerns about Chinas capital controls
C. U.S. noncompete provisions
D. The fear that assets would flow out of
U.S. stock markets
ANSWER: B. We have worked very closely
over a decade with China to bring our con-
cerns to them, and work with them in a
positive and collaborative way to affect
those changes, says Mat Lystra, senior re-
search analyst at FTSE Russell, which be-
gan in 2015 offering transitional indexes
including A shares. Some have come in a
matter of months; for others, it has taken
years to break down those barriers.
6. How much money could pour into
mainland-listed Chinese shares if
MSCI adds A shares to its index?
A. $5.3 billion
C. $4.5 trillion
B. $30.3 billion
D. $11.1 billion
ANSWER: D. Some $11.1 billion could in time
move into Chinese shares if they are added
to the index, MSCI estimates. The index is
followed by money managers with $4.75
trillion in assets, MSCI says.
7. Compared with H sharesChinas
state-owned enterprises listed in
Hong Kong, trading in Hong Kong dol-
larsthe A shares have historically:
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THE WALL STREET JOURNAL.
A. Traded at about the same level
B. Been incomparable
C. Frequently traded at a discount
D. Frequently traded at a premium
ANSWER: D. The shares have the same in-
trinsic value, but A shares typically trade
more according to speculation than on
fundamentals, says Whartons Minyuan
Zhao. The Hang Seng China AH Premium
Index tracks the changes in the premium.
8. What is the Shanghai-Hong Kong
Stock Connect?
A. A mechanism that permits interna-
tional investors to buy stocks in Shanghai,
and permits mainland Chinese investors to
buy stocks listed in Hong Kong
B. A mechanism to link Chinas Shanghai
and Shenzhen stock exchanges to make
trading easier for residents
C. A shuttle between the exchanges
D. A program to exchange information
ANSWER: A. The Shanghai-Hong Kong Stock
Connect was launched in 2014, and the
Shenzhen version in 2016.
9. The Qualified Foreign Institutional
Investor program:
A. Permits foreign governments to view
trades on Chinas stock exchanges
B. Permits foreign institutions to buy
and sell A shares
C. Permits individual foreign investors
to invest in Chinas institutions
D. Allows U.S. investors only to invest in
Chinas state-owned corporations
ANSWER: B. The QFII, launched in the early
2000s, permits foreign institutions such as
asset-management firms to buy and sell A
shares within a quota based on the firms
size or assets under management. Foreign-
ers with QFII licenses can repatriate out of
China each month no more than 20% of
their total assets as of the prior years end.
10. True or false: About 35% of A
shares are owned by foreigners.
ANSWER: False. Less than 2% of A shares are
foreign-owned, according to Capital Eco-
nomics, a global economic consultancy.
Trading individual stocks is really difficult
because of weak corporate governance and
the lack of transparency in the market, says
Ms. Zhao.
Ms. Maxey is a reporter for The Wall
Street Journal in New York. Email her at
daisy.maxey@wsj.com.