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STOXX 600 359.82 g 0.2%

10-YR. TREAS. g 2/32 , yield 2.550%

OIL $52.95 À $0.46

GOLD $1,128.80 g $2.30

Deutsche Bank settles case for $7.2 billion; Barclays sued on its mortgage products

Business & Finance he administration moved to resolve its remaining crisis-era megabank mortgage cases, striking a $7.2 billion settlement with Deutsche Bank while separately filing a lawsuit against Barclays. A1

pointees in the Justice Department to resolve the outstanding probes of precrisis conduct at major banks before those officials leave office in mid-January. Part of the rush stems from a great deal of uncertainty about how a Trump administration might pursue, settle or drop the remaining probes, according to people familiar with the discussions. The Deutsche Bank settlement is likely to bring some relief for the German bank’s shareholders, who earlier in the year worried about a much bigger penalty. The Justice Department had originally sought $14 billion from Deutsche Bank, The

The Obama administration scrambled to resolve its remaining crisis-era megabank mortgage cases, striking a $7.2 billion settlement Thursday with Deutsche Bank AG over toxic securities while separately filing a lawsuit against Barclays PLC alleging more than $30 billion in fraud-tainted sales. The dramatic back-to-back announcements show the urgency among senior Obama ap-

T

 Italy set up a backstop fund to shore up troubled banks, setting the stage for a rescue of Monte dei Paschi. B6  Anglo American is dialing back its plan to sell off two-thirds of its mines and shed over half its workers. B1

By Jenny Strasburg and Max Colchester in London and Devlin Barrett in Washington Wall Street Journal reported in September, raising concerns about whether the institution would be able to negotiate that down. Less than half the settlement requires a cash payment that would have an immediate impact on Deutsche Bank’s bottom line. The settlement was divided into a $3.1 billion penalty and a pledge to pay $4.1 billion over time to a “consumer relief” fund to be distributed by the govern-

ment. The terms of that relief—including loan modifications to help consumers—still must be finalized between the bank and the government. Deutsche Bank announced the pact Thursday evening in the U.S., saying it had reached an agreement “in principle” with the Justice Department. A Justice Department spokesman declined to comment. In major corporate settlements, particularly when the deal isn’t yet finalized, it is not uncommon for firms to announce the framework of a deal before the government, often in the hopes of a garner-

Power and Politics After the Death of a Diplomat in Turkey

 Investigators examining alleged fraud at Platinum are asking questions about a billionaire hedge-fund manager and a Bermuda reinsurer. B1  Trump continued his pressure on the defense sector by suggesting a Boeing substitute for Lockheed’s F-35. A4  Airbus followed Boeing in completing a jet deal with Iran, adding a test case for Trump policies on Tehran. B1

YEN 117.54

 The U.S. economy is nearing year’s end on an anemic note, with key measures weakening. A2  U.S. stocks pulled back, with the Dow easing 23.08 points to 19918.88. B12  Nokia filed additional patent complaints against Apple over iPhones. B4  Senate Democrats pressed Wells Fargo for more information on sales practices. B6  A Chinese metals firm scrapped its bid to buy Hollywood filmmaker Voltage. B3

World-Wide

 Trump’s pick to run HHS traded over $300,000 in health-related shares in the past four years while sponsoring health-related bills. A1  Trump said in a cryptic tweet that he supports an expansion of U.S. nuclearweapon capabilities. A5  The president-elect rounded out his White House team, naming ex-campaign manager Conway as counselor to the president. A4  Investor Icahn could face multiple conflicts as he advises the incoming Trump administration on regulatory matters. A5  Israeli officials asked that Trump intervene in deliberations at the U.N. focused on passing a new resolution on the Arab-Israel conflict. A6  The Syrian army claimed full control of Aleppo for the first time since 2012, a major victory for Assad and a crushing blow for the rebels. A6  Three Taliban militants stormed the Kabul home of a lawmaker, triggering a battle with Afghan forces that left at least eight dead. A6  Homicides rose in most big U.S. cities in 2016, continuing a trend that began last year, with Chicago seeing a dramatic increase. A3 Markets.................... B12 Opinion.............. A13-15 Sports........................ A12 Technology............... B4 U.S. News............. A2-5 Weather.................. A10 World News....... A6-8

>

Attack Exposes Gaps in Security PARIS—The prime suspect in the Berlin truck attack arrived in Europe five years ago, at the leading edge of a wave of nearly uncontrolled immigration. That influx, culminating in the 2015 mass arrival of refugees, has exposed the region to security threats that will linger far into the future. The path of the suspect—a 24-year-old Tunisian named Anis Amri who served jail time in Italy, then was detained briefly and released in Germany—has laid bare multiple failings in Europe’s security apparatus, including poor cooperation between national governPlease see SECURE page A7

AT REST: Russian President Vladimir Putin at the Moscow funeral for slain Russian Ambassador to Turkey Andrey Karlov. A6

Rising Murder Rates Fuel Fears

 German officials said fingerprints found in the truck used in the Berlin attack pointed to the central suspect, a 24-year-old Tunisian, as the likely perpetrator. A7  The suspect’s path lays bare failings in European security, including porous borders and poor cooperation between governments. A1

ing a positive reaction from shareholders. The Deutsche Bank settlement follows similar multibillion-dollar agreements reached over the past three years with other big banks, like J.P. Morgan Chase & Co., Citigroup Inc. and Goldman Sachs Group. Inc. It has been more unusual for talks to break down and for the Justice Department to file suit the way it did Thursday against Barclays—though it did file two lawsuits against Bank of America Corp. related to precrisis sales of mortgagebacked securities in 2012 and Please see BANKS page A2

BY MATTHEW DALTON

ALEXEI NIKOLSKY/SPUTNIK/AGENCE FRANCE-PRESSE/GETTY IMAGES

 Blackstone is in talks to take a stake in assets owned by gas-pipeline operator Energy Transfer. B3

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U.S. Presses Banks on Fraud Probes

What’s News

CONTENTS Banking & Finance B6 Business News. B2-3 Crossword.............. A10 Equities....................... B8 Heard on Street.. B11 Life & Arts....... A10-11

HHHH $3.00

Homicides increased in most big American cities in 2016, continuing a worrisome trend that began last year, even as murder rates in most cities are nowhere near the levels of two decades ago. A3 Change in reported homicides for the 15 largest police departments 2015-2016 (through Dec. 11) Chicago Phoenix* Suffolk County, N.Y. Memphis, Tenn. Dallas* Las Vegas Detroit* Los Angeles Houston Miami-Dade Philadelphia New York Milwaukee Baltimore Washington, D.C. –25%

Trump’s Health Pick Traded Medical Stocks in Congress BY JAMES V. GRIMALDI AND MICHELLE HACKMAN President-elect Donald Trump’s pick to run the Health and Human Services Department traded more than $300,000 in shares of healthrelated companies over the past four years while sponsoring and advocating legislation that potentially could affect those companies’ stocks. Rep. Tom Price, a Georgia Republican, bought and sold

0%

25%

*2016 data through Nov. 30 Source: cities’ police departments

 Germany finds fugitive’s fingerprints inside truck...... A7

Nuclear Expansion A tweet from Trump calls for boosting U.S. nuclear-weapon capabilities.................................. A5 stock in about 40 health-care, pharmaceutical and biomedical companies since 2012, including a dozen in the current congressional session, according to a Wall Street Journal review of hundreds of pages of stock trades he filed with Congress.

In the same two-year period, he has sponsored nine and co-sponsored 35 health-related bills in the House. His stock trades included Amgen Inc., Bristol Meyers Squibb Co., Eli Lilly & Co., Pfizer Inc. and Aetna Inc. His largest single stock buy was an August 2016 purchase of between $50,000 and $100,000 of an Australian biomedical firm, Innate Immunotherapeutics Inc., whose largPlease see PRICE page A4

INSIDE

50%

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Crocodiles, Moose, Polo Ponies Go Missing in Consumer Revolt i

i

i

Scalpels, blades kill off embroidered clothing logos; “a tricky surgery” BY KHADEEJA SAFDAR

logos “pretentious,” he said, and resents being used as a Since its debut in 1926, the marketing platform. “Why would I do someone Lacoste crocodile has adorned polo shirts on everyone from else’s advertising for free?” Mr. the brand’s tennis-star founder Ilich said. A branding backlash has to President John F. Kennedy. Yet you won’t likely find one some people working hard to on Max Ilich. The 47-year-old remove logos and names from consultant has extracted the their clothes and accessories. iconic reptilian from at least 10 Blogs and online discussion foof his Lacoste shirts. “It’s a rums offer tips on scratching off the Ray-Ban tricky surgery,” logo from lenses, he said. “But I peeling away the was pleased with Ralph Lauren emthe results.” blem from new Mr. Ilich, who pairs of leather lives in Hampton, The Lacoste logo shoes and using a N.H., borrowed a felt-tip marker to scalpel from an ex-girlfriend, a surgeon, to cut hide the Under Armour symbol out the embroidered crocodile on sports gear. For embroidered logos, some without tearing through the fabric. Then he washed the brand-phobics use a seam ripshirts about four times to hide per—a small tool for unpicking stitches—but the method is his work. He wears Lacoste shirts be- time consuming. Each thread Please see LOGOS page A9 cause of their quality but finds

SYRIA CLAIMS TO HOLD ALL OF ALEPPO

A HOME FOR HIGH-TECH HOMEWORK

MORGENSTERN: SCORSESE’S TEST OF FAITH

WORLD NEWS, A6

MANSION, M1

LIFE & ARTS, A10

GIANT HEDGE FUND BUILDS A MANAGEMENT MACHINE Bridgewater is designing software to automate routine operations BY ROB COPELAND AND BRADLEY HOPE Deep inside Bridgewater Associates LP, the world’s largest hedge-fund firm, software engineers are at work on a secret project that founder Ray Dalio has sometimes called “The Book of the Future.” The goal is technology that would automate most of the firm’s management. It would represent a culmination of Mr. Dalio’s life work to build Bridgewater into an altar to radical openness—and a place that can endure without him. At Bridgewater, most meetings are recorded, employees are expected to criticize one

www.ebook3000.com

another continually, people are subject to frequent probes of their weaknesses, and personal performance is assessed on a host of data points, all under Mr. Dalio’s gaze. Bridgewater’s new technology would enshrine his unorthodox management approach in a software system. It could dole out GPSstyle directions for how staff members should spend every aspect of their days, down to whether an employee should make a particular phone call. The system remains under development, and the exact details of its operations are still being debated inside the firm. One employee Please see HEDGE page A9


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A2 | Friday, December 23, 2016

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U.S. NEWS Economy Cools as 2016 Nears End Noncash Payments Household spending, inflation and income growth all weakened in November BY ERIC MORATH AND JEFFREY SPARSHOTT Stock prices may have soared since the November election, but the U.S. economy is ending 2016 on an anemic note. Measures of economic vitality including income growth, consumer spending and inflation weakened last month following a short-lived spurt. Household spending rose just 0.2% in November from the month before, a slowdown in growth from the previous two months, while incomes flatlined, the Commerce Department said Thursday. Inflation readings, which had perked up, didn’t budge last month, and demand for factory-made goods remained soft. For now, that leaves the U.S. economy in the middling trajectory that has marked the seven-year expansion. “Underlying support for the consumer sector remains fragile at best,” said Lindsey Piegza, economist at Stifel Nicolaus & Co. “The reality the consumer is facing at this point is still modest wage gains and a continued loss of momentum in income growth.” Forecasting firm Macroeconomic Advisers estimates the

Low Gear Even with an upward revision to third-quarter GDP, 2016 economic growth is unlikely to break out from the expansion’s 2% growth trend. Third-quarter revision

5% Line shows change from a year earlier

4 3

3.5%

2 1 0

Fourth quarter est.

–1

1.7%

–2 2010

’11

’12

’13

’14

Note: All figures are adjusted for inflation and seasonality Sources: Commerce Dept.; Macroeconomic Advisers (est.)

economy is growing at a 1.7% rate in the final three months of 2016. Federal Reserve policy makers expect the economy to grow 1.9% this year and 2.1% next year, a forecast the central bank has barely changed since the election of Donald Trump. About two-thirds of total U.S. output goes toward domestic consumer spending. Solid household outlays during the summer helped propel economic growth to a 3.5% annual pace in the third quarter, the best quarterly increase in two years, according to revised data released Thursday. But income growth has softened: Wage and salary income rose 3.5% in November from a year earlier, the slowest year-

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over-year gain since December 2013. Without stronger support from consumers and more investment by businesses, thirdquarter growth momentum could wane. “Clearly, our consumers’ budgets are pinched,” Dollar General Corp. Chief Executive Todd Vasos told investors earlier this month. The combined effects of a smaller share of adults holding jobs and increased housing and healthcare expenses “appear to have taken a noticeable toll on their spending,” he said. Donald Trump’s election raised hopes of tax cuts and deregulation, measures that could boost businesses, consumers and economic growth.

But how those promises will be implemented—and how businesses and households respond—remain uncertain. “There is some optimism that is beginning to develop,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “Though if I were a business and I had major projects in the planning stages, I wouldn’t pull the trigger until I knew the new corporate tax structure.” Price inflation remains another puzzle for businesses and central bankers alike. The personal-consumption expenditures price index, the Fed’s preferred inflation measure, was unchanged in November and up 1.4% from a year earlier. The measure had risen at a modest pace each month since March, reflecting stabilizing energy prices and somewhat firmer consumer demand that allowed businesses to pass along price increases. That firming helped support the Fed’s move this month to raise its benchmark interest rate for the first time in a year. Officials indicated the pace of rate increases could quicken in 2017. But inflation readings for now are holding well below the central bank’s 2% target. November’s softer inflation reading could be temporary. Gasoline and oil costs slumped in November from the prior month, but rebounded in December after oil-producing countries agreed to cut production.

LUKE SHARRETT/BLOOMBERG NEWS

Last Chance for Holiday Delivery

Continue to Grow BY ROBIN SIDEL

Americans are pulling out their credit cards, but also hanging on to their checkbooks. Those are some of the findings from a Federal Reserve study released Thursday that analyzes payment trends over the past three years and tracks the unrelenting march of electronic transactions. The Fed said the number of U.S. noncash payments continued to gain ground between 2012 and 2015, rising 5.3% annually to 144 billion. The payments, which include debit cards, credit cards and checks, had a value of nearly $178 trillion in 2015, up about 13% since 2012. Debit cards helped lead the way as the number of those payments rose to 69.5 billion in 2015, up 23% from 2012. The value of the debit-card pay-

U.S. WATCH LABOR

NLRB Sets Hearings On Harvard Union Bid The National Labor Relations Board will hold hearings to determine whether Harvard University student workers have enough support to unionize, after a November vote that remains too close to call. The latest vote count was 1,456 against unionization and 1,272 for, with 314 ballots still being challenged over voter eligibility, according to an NLRB tally. NLRB procedures state that when the number of challenged ballots could swing the final count either way, a regional office of the NLRB will hold hearings to decide the status of the challenged votes. The close race at Harvard cools an otherwise frenzied push for unionization on campuses nationwide in recent months. The NLRB ruled in August that students who sought to join a union deserved employee protections when they get paid for work at the direction of the school. —Melissa Korn

BANKS

The German lender’s accord follows similar multibillion-dollar settlements.

RALPH ORLOWSKI/REUTERS

Continued from the prior page 2013. One of those was thrown out earlier this year on appeal. The government complaint didn’t quantify the damages it is seeking from Barclays. Barclays said in a statement that it would seek the suit’s “dismissal at the earliest opportunity,” and that it considers the claims “disconnected from the facts.” Bank officials declined to elaborate on why the talks broke down, but one person familiar with the matter said that continuing the talks under “a fresh pair of eyes”—in a new presidential administration—might be more beneficial. A prolonged legal battle would be handled by Justice Department officials appointed by President-elect Donald Trump. Neither Mr. Trump nor his aides have indicated how they might handle legacy financial-crisis fallout inherited from President Barack Obama. But Mr. Trump in 2013 criti-

the latter part of this week following intense negotiations between lawyers representing the bank and the government, a person familiar with the matter said. Going into the week, the two sides still had significant differences to over-

Deutsche Bank‘s move is likely to bring some relief to shareholders.

come, people close to the discussions said. Deutsche Bank and the government were steadily closing in on terms, including the government’s statement of facts about alleged wrongdoing, each day this week, according to a person close to the talks. The final main issue boiled down to money, the person said. A Deutsche Bank settlement was appearing more promising earlier Thursday even without the Barclays lawsuit, but the government’s move to sue the U.K. bank added incentive to close a deal, the person said. The German bank said it would take a roughly $1.17 billion pretax charge this quarter as a result of the $3.1 billion penalty. Hours before the Deutsche Bank settlement was announced, the Barclays talks broke down as executives at the U.K.’s second-largest bank made clear they were wary of being pressured to make a big payout. Barclays Chief Executive Jes Staley had told people in recent months that the bank wouldn’t give U.S. authorities a blank check, and wouldn’t

settle if he felt the price was too high, according to people familiar with the discussions. Government officials had discussed with Barclays lawyers the possibility of suing, but the bank only learned Thursday that a lawsuit was arriving the same day, according to a person familiar with the matter. The impasse between the two sides was still big: They remained multiple billions of dollars apart, with Barclays unwilling to pay $5 billion—an amount the government had said was in the range of possibilities, according to a person familiar with the matter. The 198-page lawsuit by the U.S. government says the bank “engaged in a fraudulent scheme to sell tens of billions of dollars of residential mortgage-backed securities (RMBS), in which it repeatedly

Adm. Harry Harris is commander of the U.S. Pacific Command. A World News article Wednesday about China’s actions in the South China Sea erroneously gave his title as commander of the U.S. Pacific Fleet.

Princeton Cancels Swim Team’s Season

deceived investors about the characteristics of the loans backing those trusts.” Barclays sold the securities to a wide range of investors, including financial institutions, Fannie Mae and Freddie Mac, federal home-loan banks, credit unions, pension plans, charitable and religious organizations, and university endowments. “Many of these investors suffered devastating losses,’’ according to the suit, which was filed in a U.S. District Court in New York. The suit singles out two former New York-based Barclays executives, Paul Menefee and John Carroll, who had been hired in 2003 to help run the bank’s asset-securitization team, according to an announcement at the time. Both were previously at Morgan Stanley and left Barclays in 2008. The complaint is filled with

expletive-laced conversations involving those men and others familiar with the loans, taken from transcripts of recorded phone calls and emails. In one, the complaint says that Mr. Menefee, who was in charge of due diligence on the subprime deals at issue, allegedly said that one loan pool “scares the sh*t out of me.’’ At another point, that same executive said about a Wells Fargo & Co. pool, according to the complaint: “We have to eat their sh*t loans.” Mr. Menefee’s lawyer called the complaint “a misguided attempt’’ to blame his client and others for losses incurred by sophisticated institutional investors after an industrywide housing market collapse. Mr. Carroll’s lawyer didn’t respond to requests for comment. —Aruna Viswanatha contributed to this article.

CORRECTIONS  AMPLIFICATIONS Swatch Group isn’t among the Swiss watchmakers that have bought back slow-moving inventories from retailers. A Heard on the Street article on Wednesday about the Swiss watch industry incorrectly reported that it was.

EDUCATION

The federal judge in the obstruction-of-justice case against former Los Angeles County Sheriff Lee Baca declared a mistrial Thursday, after jurors in-

Jury Deadlocks in Ex-Sheriff’s Trial

cized J.P. Morgan CEO James Dimon that year as “the worst banker in the United States” for reaching a $13 billion settlement in a similar case. “What happened to the days when you actually go to trial?” Mr. Trump said at the time. The Deutsche Bank settlement and Barclays suit come as the Justice Department still has probes outstanding with three other big European banks— Credit Suisse Group AG, Royal Bank of Scotland Group PLC and UBS Group AG. While talks with Credit Suisse have been progressing, it wasn’t clear Thursday whether a settlement was certain before year-end, according to people close to the discussions. The Justice negotiations this year have been a big cloud hanging over an alreadyfragile European banking industry, weighing on several major lenders’ stock prices. Investors have worried about whether those institutions’ capital is sufficient to cover any possible U.S. fines. The Deutsche Bank settlement came together quickly in

formed him they were hopelessly deadlocked. The outcome, on the fourth day of jury deliberation, represents an at least temporary anticlimax in the lengthy federal investigation of the sheriff’s department, which has produced 20 convictions of former Baca subordinates. That investigation uncovered various crimes related to the local jail system, including beating inmates. The U.S. attorney’s office here, which prosecuted the Baca case, has to decide whether to retry the 74-year-old former sheriff on the obstruction charges. —John R. Emshwiller

Princeton University canceled the rest of the men’s swimming and diving season after school administrators discovered that team members had posted “vulgar and offensive” material on their electronic mailing list. The school announced Thursday that the team won’t compete in its two remaining meets or the Ivy League championship in February. A statement released by Princeton didn't disclose specifics but said the “misogynistic and racist” comments involved the women’s swimming and diving team. —Associated Press

CALIFORNIA

MAIL CALL: A U.S. Postal Service worker in Shelbyville, Ky., on Thursday, a day before the suggested cutoff date for shipping in time for Christmas.

ments rose by a smaller amount, however, reflecting the fact that debit transactions tend to be of lesser value than those made on credit cards. The number of credit-card payments reached 33.8 billion in 2015 with a value of $3.16 trillion, representing increases of roughly 25% from 2012. The growth was led by generalpurpose cards that can be used everywhere compared with private-label cards that can only be used in specific stores. The average value of general-purpose credit-card payments dropped to $90 from $93 between 2012 and 2015, the Fed said. Check usage continued to fall, but the decline appears to be leveling off. The number of check payments fell to 17.3 billion with a value of $26.83 trillion between 2012 and 2015, down 17% and 1.4%, respectively.

“The ONE Thing” by Gary Keller with Jay Papasan was No. 8 among hardcover business books on the list of BestSelling Books for the week ended Dec. 11. “The Daily Stoic” by Ryan Holiday and Stephen Hanselman was No. 9 on that list. The list of BestSelling Books published in Saturday’s Review section omitted Mr. Papasan’s name on Dec. 17 and on 17 other occasions since January. Mr. Hanselman’s name was omitted in the Dec. 10 and Dec. 17 editions.

Readers can alert The Wall Street Journal to any errors in news articles by emailing wsjcontact@wsj.com or by calling 888-410-2667.

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Friday, December 23, 2016 | A3

THE WALL STREET JOURNAL.

U.S. NEWS

BY SCOTT CALVERT AND SHIBANI MAHTANI Homicides rose in most big American cities in 2016, continuing a worrisome trend for police and criminologists that began last year, even as murder rates in most cities are nowhere near the levels of two decades ago. Sixteen of the 20 largest police departments reported a year-over-year rise in homicides as of mid-December, a Wall Street Journal survey found. Some notched minor increases, while Chicago saw one of the most dramatic jumps, with more than 720 murders— up 56% from 2015. Nationally, the murder rate rose in 2015 for the first time in nearly a decade, though it remains well below where it stood during the 1990s. Chicago’s 2016 homicide count, greater than the considerably larger cities of Los Angeles and New York combined, marks a grim tally not seen since the violent drug wars of the 1990s. As the body count rose in Chicago—including Nykea Aldridge, cousin of basketball star Dwyane Wade, shot while walking with her baby in broad daylight—police are struggling to solve the killings, clearing only one in five homicides so far this year. Nationally, 37 of the 65 largest police agencies, including

ones in San Antonio, Las Vegas and Memphis, Tenn., reported year-over-year homicide increases as of Sept. 30, the Major Cities Chiefs Association said. In 2015, 44 police departments reported increases, many for the first time in years. “I have a lot of concern about that many cities experiencing those increases in violence,” said Darrel Stephens, executive director of the association, which represents chiefs from the largest departments. He said it is too early to know whether the increases constitute a trend. Mr. Stephens said he thinks crime is largely driven by local dynamics such as drug-related violence. But he said police chiefs nationwide bemoan the easy availability of firearms. In Chicago, police have seized more than 8,000 illegal guns this year. He also said solutions to stem the tide of violence will require more than policing strategies. “One thing that is consistent in our high-poverty, highunemployment, low-educational achievement areas of our cities: We have a lot more violence than we have in other areas,” he said. Chicago and a handful of cities accounted for much of the overall 10% increase in homicides across the 65 communities, he said. Rapes, robberies, aggravated assaults and non-fatal shootings were also up at the end of September, the association’s survey found. San Antonio had the highest percentage increase as of midDecember, the Journal’s survey found. Its 144 homicides

Chicago saw one of the most dramatic jumps from 2015. Above, Chicago police at the scene of a quadruple homicide earlier this month. amount to a 60% increase from 2015. Of the four cities recording drops in 2016, three—Baltimore, Milwaukee and Washington—had homicide upswings in 2015 that topped 50%. The other, New York, had a small increase in 2015 and a 5% decrease in homicides this year through mid-December, and is

Chicago Works To Stem Surge

Some criminologists say Chicago’s surge in violence is partly due to an increasingly fragmented gang structure, coupled with the demolition of publichousing complexes that concentrated the drug trade and shootings when the murder tally last eclipsed 700 in the 1990s. “What we are seeing now is more ‘mom and pop’ type of activity,” said Andrew Papachristos, a Yale University sociology professor who studies violence in Chicago. A trend of smaller, more volatile disputes “makes gang violence a little bit more unpredictable,” he added. The surge in violent crime is happening as the Chicago police work to regain support from minority communities following the November 2015 release of a police dashboard camera video that showed a fatal shooting of a black 17-year-old. Chicago Police Superintendent Eddie Johnson said his department got off to a “rocky start” in 2016 after the video’s release but is back on track, following top leadership changes and an overhaul of its use-of-

JOSHUA LOTT/GETTY IMAGES

Police seek a number of ways to combat worsening violence

Sheila Jones, center, during a vigil for her daughter Africa Bass, who was killed walking through her apartment complex in July. force policy with public input. Meanwhile, the department plans to hire almost 1,000 officers, the largest increase in the force in decades, and is boosting the detective ranks to address the poor homicide-clearance rate. Police are also pushing state legislators to pass tougher sentences for repeat gun offenders. Superintendent Johnson, who is advocating for such a bill, said too many repeat offenders don’t

fear the judicial system and are released too quickly. Experts say any crime-reduction strategy needs community trust, particularly given the tensions between police and minority communities nationally. Cities like Gary, Ind., and Birmingham, Ala., are experimenting with new strategies that get police to acknowledge any biases and foster community ties. —Shibani Mahtani

more broadly experiencing historic lows in violent crime. In some cities, violent crime increased in the wake of deadly police confrontations with young black men. For example, murders and nonfatal shootings skyrocketed in Baltimore after the April 2015 death of 25-year-old Freddie Gray sparked rioting and prompted prosecutors to bring criminal charges against six officers. In Chicago, too, the big increase in homicides has come since the release, in November 2015, of a video from a year earlier showing a white officer killing a black 17-year-old in a hail of 16 bullets. The Chicago department is under investigation by the U.S. Justice Department, which earlier this year found the Baltimore Police Department routinely engages in a range of unconstitutional policing practices. Some law-enforcement experts attribute the rise to the widely debated view that violent-crime increases are tied to the civil unrest that roiled numerous cities after police killings of young black men, starting with such an incident in Ferguson, Mo., in 2014. The main version of the theory holds that many officers have shied away from confrontation, emboldening criminals. Another posits that growing distrust of police among minority residents has made people less willing to come forward as witnesses and more inclined to resolve disputes themselves. “I don’t think anyone knows which of those may be operating, or whether a combination is operating,” said Richard Rosenfeld, a criminology professor at the University of Missouri-St. Louis.

©T&CO. 2016

Out of 20 big police departments, 16 saw murder rates in their cities rise from 2015

SCOTT OLSON/GETTY IMAGES

Homicides Increase in Most Big Cities

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Potential Boost for Air Navigation BY ANDY PASZTOR

ness jets and even some private planes processing signals at the same time from both Global Positioning System satellites operated by the U.S. Air Force and Europe’s still-unfinished Galileo constellation. By taking preliminary steps to develop joint standards, U.S. and European experts are moving toward installation of common equipment over roughly the next decade on both sides

STEPHANE CORVAJA/EUROPEAN SPACE AGENCY/GETTY IMAGES

Aviation authorities are moving to improve the accuracy and reliability of satellite navigation by enabling aircraft in the future to simultaneously rely on separate orbiting systems run by the U.S. and Europe. Such proposed changes, recently endorsed by the U.S. Federal Aviation Administration’s

top outside technical advisers, set the stage for major shifts in how pilots will use space systems for precise position data and flight routes. The upshot would be safer skies because of more exact information about locations of planes and reduced likelihood of gaps or hacking of signals by making more satellites available to users. For the first time, formal plans envision airliners, busi-

Satellites for Galileo, Europe’s satellite navigation system, launched from French Guiana in November.

of the Atlantic. They say the move provides added protection against satellite malfunctions, hostile jamming and other potential hazards that could disrupt ubiquitous, spacebased navigation signals that are essential to the aviation industry. “It is a big deal, and we’re trying to move quickly,” said consultant George Ligler, one of the U.S. technical experts leading the effort. “It would make the entire global navigation satellite system more robust,” he said in an interview last week. Ultimately, some experts predict the strategy could help strapped government budgets by reducing the need for GPS and Galileo—currently operating more than half of its proposed fleet—to launch spare satellites into orbit or take other steps to assure signal redundancy. In effect, the aim is to have each satellite system serve as a backup for the other. “Pretty much everybody would like to have it,” Mr. Ligler said, adding that it could take until 2025 or 2027 until standards are adopted and common receivers are manufactured and installed on large numbers of airliners. —Robert Wall contributed to this article.

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U.S. NEWS

Senior White House Staff Takes Shape Conway chosen as a counselor to president, forming triumvirate with Priebus, Bannon

Kellyanne Conway President and CEO the polling company, inc./ WomanTrend Age: 49

BY PETER NICHOLAS AND CAROL E. LEE

Continued from Page One est shareholder is a GOP congressman on the Trump transition team, according to the filings. The stock has since doubled in price. Phil Blando, a spokesman for Mr. Price and the Trump transition, said that “Dr. Price takes his obligation to uphold the public trust very seriously,” that he has “complied fully with all applicable laws and ethics rules governing his personal finances,” and that, if confirmed, he would comply with the law. Mr. Price declined to answer detailed questions, such as whether he made trades through a broker. Mr. Price, a surgeon who chairs the House Budget Committee, has played an influential role in shaping health legislation. He sits on the Ways and Means Committee’s health panel, which oversees Medicare. He also is a member of the Republicans’ Congressional Health Care Caucus that has called for repeal of the Obama administration’s landmark health overhaul.

Possible hurdle: Ms. Conway will be entering a White House as a counselor to Donald Trump, but where power is also divided among two other Trump confidantes: incoming chief of staff Reince Priebus and incoming chief strategist Steve Bannon.

Kellyanne Conway, the former Trump campaign manager, was named a counselor to the president. tial for rival power centers within the White House. To discourage that, Andrew Card, who served as chief of staff to President George W. Bush, said it is critical that their roles be clear. “What are the defined responsibilities of the staff and how do you hold them accountable?” Mr. Card asked. “You don’t want to just have a great debating society in the White House; you want to have

discipline around the debate because time is your enemy. The president has to make decisions in real time.” Yet people close to Mr. Trump said he prefers a flat organizational structure. “It’s totally an open door,” said Thomas Barrack, a longtime friend of Mr. Trump and the chairman of his inaugural committee. “If Steve [Bannon] were making a presentation

it’s an open-door policy. Reince and Kellyanne and everybody comes in and has an opportunity to adversarially debate what that issue is. It’s not like many executives who take one silo at a time.” Mr. Trump, he added, “curates” the views of various experts on his team and “at the end of the day, he makes his own decisions.” In other moves announced

Mr. Price’s trading is likely to be a significant issue during his Senate confirmation hearings. Allegations of abusive trading by members of Congress led to a 2012 law—the Stop Trading on Congressional Knowledge (STOCK) Act—that bars members and employees of Congress from using “any nonpublic information derived from the individual’s position…or gained from performance of the individual’s duties, for personal benefit.” Some lawmakers have since gone out of their way to avoid

portfolios on mutual funds,” said Rob Walker, former chief counsel to House and Senate ethics committees. If approved for the HHS post, Mr. Price would be required by federal law to sell stock in companies regulated by HHS, or recuse himself from matters regarding them. Senate committees that will hold hearings on his nomination are expected to examine whether Mr. Price had access to nonpublic information about health-care legislation and policy that could directly affect the stock prices of companies in which he invested, according to people familiar with the matter. The health-care industry is Mr. Price’s biggest patron. In 2015 and 2016, he received about $730,000 in campaign donations from health professionals, insurers and drug companies, more than from any other industry, according to the Center for Responsive Politics. Over his six terms, he has raised about $15 million, and about $4.8 million came from the health sector. Aetna donated a total of $10,000 to Mr. Price in 2015 and 2016 through its PAC.

Aetna didn’t respond to requests for comment. Mr. Price has made dozens of trades since 2012. On March 17, 2016, he made 70 trades, adding, among other things, to his holdings of Aetna by as much as $15,000, disclosure reports say. As he has bought Aetna stock, Mr. Price has championed his own legislation to replace the Obama administration’s Affordable Care Act. The Empowering Patients First Act would provide refundable credits for people to buy insurance if they don’t have access to employer or government plans. Such credits could be used to purchase Aetna and others’ insurance. On the other hand, Aetna and others are set to benefit from provisions of the 2010 health law Mr. Price’s bill would replace. The largest shareholder of Mr. Price’s biggest stock buy, Australia’s Innate Immuno, is Rep. Chris Collins (R., N.Y.), with a 17% stake, according to the company’s website. Mr. Collins, a member of the Trump transition team, also sits on the company’s board. Mr. Price’s purchase of between $50,000 and $100,000

Mr. Price has played an influential role in shaping health legislation. even the appearance of conflict that they are placing profit over policy. Ethics lawyers in both parties have advised against trading even if it is legal. “It is a real risk, and that’s why many members choose to give up investing in individual stocks and instead focus their

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Thursday, Mr. Trump named an RNC veteran who worked on his campaign, Sean Spicer, as White House press secretary. Jason Miller, a campaign spokesman, will serve as communications director, while another press official, Hope Hicks, will become director of strategic communications. Mr. Trump tapped Dan Scavino to run his social media operation. The job is likely to

SHAWN THEW/EUROPEAN PRESSPHOTO AGENCY

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Résumé: Ms. Conway, who was born in New Jersey, is a longtime Republican pollster, whose clients have included Sen. Ted Cruz (R., Texas)., former House Speaker Newt Gingrich and Vice Presidentelect Mike Pence. She holds a law degree from George Washington University Law School, and is co-author of the book, “What Women Really Want.” DREW ANGERER/GETTY IMAGES

President-elect Donald Trump rounded out his senior White House team on Thursday, elevating a set of trusted advisers who helped engineer his surprise victory and bringing some of the rhythms and spirit of his unconventional campaign into the government he will soon lead. Mr. Trump tapped Kellyanne Conway as a counselor to the president, giving his former campaign manager a sweeping mandate to help make good on his election promises. Ms. Conway, who has become something of a celebrity in her own right, will be part of what is shaping up to be a triumvirate of senior aides who are all confidantes of Mr. Trump. Shortly after his victory Mr. Trump named Republican National Committee chairman Reince Priebus as his incoming chief of staff and media executive Steve Bannon as chief strategist. Though Mr. Priebus is atop the formal organizational chart, in practice Ms. Conway and Mr. Bannon may prove to be every bit as influential. It is an arrangement that some White House veterans warned could create the poten-

prove important in a Trump presidency, given the New York businessman’s reliance on social media as a tool to rally supporters and sidestep a news media he says he distrusts. In setting up his White House, Mr. Trump is eschewing the structure that some past presidents have employed. Normally, the White House chief of staff plays a gatekeeper role, controlling the people and paper the president sees in the course of the day. When President Barack Obama came to office in 2009, he chose then-Rep. Rahm Emanuel, the current major of Chicago whose strong personality kept a tight grip on White House operations. The Trump model seems to echo that of Republican Ronald Reagan’s presidency. After taking office in 1981, Mr. Reagan installed three men in senior roles who were known as the “troika” because of their coequal status: James Baker, Ed Meese and Michael Deaver. Ms. Conway and Mr. Bannon have clearly won Mr. Trump’s trust and are likely to have unfettered access to the Oval Office, people close to Mr. Trump said. Another source of clout for Ms. Conway: incoming vice president, Mike Pence. She is a strong ally of Mr. Pence, a former congressman and the current Indiana governor, having done polling for his prior campaigns. She also urged that he be picked as Mr. Trump’s running mate.

PROFILE

Rep. Tom Price of Innate Immuno stock on Aug. 31, 2016, came two days after Mr. Collins made a purchase of four million shares worth between $500,000 and $1 million, according to disclosure statements. Innate Immuno’s chief executive, Simon Wilkerson, said at investor presentations this year that its future depends on an experimental drug to treat an advanced form of multiple sclerosis, which is currently in clinical trials. One law enacted this month that could benefit Innate Immuno is the 21st Century Cures Act, which authorizes $500 million for the FDA to

speed up drug approvals. A key provision that would permit clinical trials of new medical treatments to proceed more quickly was written by Mr. Collins as a member of the health panel of the Energy and Commerce Committee. Mr. Wilkerson said his company’s drug is governed by regulations in Australia and New Zealand, so it won’t be deeply affected by the 21st Century Cures Act. Mr. Collins said in the Buffalo News that his authorship of legislation wasn’t a conflict of interest, but rather an instance of bringing his business knowledge to the Congress. A spokesman for Mr. Collins said he “has followed all ethical guidelines related to his personal finances.” Both Mr. Price and Mr. Collins voted yes for the bill’s final House vote in November. The closing price on the Australian Exchange on the day Mr. Price made his purchase was A$0.41, and it closed Thursday at A$0.85. That means Mr. Price’s holdings have gains of between $50,000 and $100,000. —Louise Radnofsky and Tom McGinty contributed to this article.

Trump Tweet Sets Up Fight for Jet Contract BY DOUG CAMERON AND DAMIAN PALETTA President-elect Donald Trump on Thursday continued his pressure on the defense sector by suggesting he could use a Boeing Co. plane as a substitute for the Lockheed Martin Corp. F-35 combat jet. “Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F/A-18 Super Hornet!” he said in a tweet, referring to a Boeing plane that has long been used by the Navy. The Pentagon plans to acquire more than 2,400 of the F-35 jets to replace much of its combat fleet in what is by far its costliest program, and Mr. Trump has singled it out for criticism after a legacy of delays and design problems. It is unusual for a president or a president-elect to publicly negotiate government procurement spending on weapons programs. Mr. Trump’s approach of negotiating via Twitter has shaken defense contractors and the complex defense bidding and procurement process. He has said he sees it as his job to try to save taxpayers money, but defense experts have said he is tackling a process that can’t be orchestrated in 140-character posts. Lockheed Martin declined to comment and Pentagon officials

didn’t immediately respond to a request for comment. Daniel Gordon, who worked on government procurement issues for the Government Accountability Office before becoming President Barack Obama’s administrator for federal procurement policy, said Mr. Trump cannot award government contracts without going through the formal competition and bidding process. “The government would be violating the law to award a contract to Boeing without a competition unless they go through exceptions to the normal legal requirements for competition,” Mr. Gordon said. Pentagon officials have long said the two planes served very different roles, with the F-35 providing more radarevading features and serving as an airborne command post. Variants of the F/A-18 are used as attack jets and to provide electronic countermeasures to protect U.S. forces. The F-35 accounts for more than 20% of Lockheed’s annual sales. Mr. Trump met with the companies’ chief executives Wednesday. Boeing declined to comment on whether Mr. Trump had raised his request about the F/A-18 at his Wednesday meeting with Boeing CEO Dennis Muilenburg.  Iran deals by Airbus and Boeing will test Trump......... B1


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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | A5

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U.S. NEWS

BY BEN KESLING AND PAUL SONNE WASHINGTON—Presidentelect Donald Trump said in a cryptic tweet on Thursday that he supports an expansion of U.S. nuclear-weapon capabilities, the latest social-media missive to baffle experts and ratchet up tensions with the international community. The tweet made it clear that Mr. Trump is an advocate of a strong U.S. nuclear arsenal, but left unanswered whether he wants to greatly accelerate a program begun under President Barack Obama to update the arsenal. A spokesman for Mr. Trump later elaborated on the tweet without fully clarifying the president-elect’s position.

Putin also Thursday called for Russia to strengthen its nuclearcombat potential.

CHARLIE RIEDEL/ASSOCIATED PRESS

“The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes,” said a tweet from Mr. Trump’s official Twitter account, sent around noon Thursday. Mr. Obama has announced plans in 2010 estimated to cost nearly $1 trillion over 30 years to modernize and upgrade the country’s nuclear arsenal. As a seeming about-face for a president who came into office seeking arms control efforts, Mr. Obama made the nuclear commitment during an effort to win congressional passage of his New Start arms control deal with Russia. The president-elect’s tweet left some doubt as to whether he wants to kick off a new arms race or if he just agrees with the efforts already under way. It came a day after Mr. Trump met with a number of top Pentagon officials, includ-

ing Lt. Gen. Jack Weinstein, U.S. Air Force Deputy Chief of Staff for Strategic Deterrence and Nuclear Integration, who regularly stresses the importance of seeing through the planned update to a U.S. nuclear program that hasn’t been modernized since the 1980s. The program under way— which Mr. Obama approved with pressure from Republican lawmakers on Capitol Hill— modernizes all three legs of the nuclear triad with new submarines, bombers and intercontinental ballistic missiles, as well as new nuclearcapable cruise missiles. Russian President Vladimir Putin also called for his country to strengthen its nuclearcombat potential during a meeting of the Russian Defense Ministry board on Thursday, according to Interfax news agency. He said it is important to re-arm the Russian army and navy and to keep developing all aspects of the Russian military. Russia is in the midst of its own nuclear arsenal modernization, in part because many of its Soviet-era capabilities have been operating too long without updates. “This is how arms races begin: with a battle of words,” said Joe Cirincione, president of Ploughshares Fund, a nuclear nonproliferation advocacy group, in a statement. “This could be the end of the arms control process.” Mr. Trump’s campaign released a statement hours after the tweet. “President-elect Trump was referring to the threat of nuclear proliferation and the critical need to prevent it— particularly to and among terrorist organizations and unstable and rogue regimes. He has also emphasized the need to improve and modernize our deterrent capability as a vital way to pursue peace through strength,” said Jason Miller, a spokesman for Mr. Trump in a statement. —Doug Cameron contributed to this article.

A crew checking systems in the underground control room at an ICBM launch control facility near Minot, N.D., in 2014.

VICTOR J. BLUE/BLOOMBERG NEWS

Trump Supports Strengthening of Nuclear Arsenal

Donald Trump, then a Republican presidential candidate, greets Carl Icahn at a primary night event in New York City in April.

Possible Conflicts for Icahn

BY DAVID BENOIT AND TED MANN

Battle Under Way With a Regulator

Billionaire investor Carl Icahn, who has corporate holdings across industries overseen by numerous federal agencies, faces multiple potential conflicts as he advises the incoming Trump administration on regulatory matters. President-elect Donald Trump has named Mr. Icahn a special adviser on overhauling federal regulation, expanding the activist investor’s potential influence in the Trump administration. Mr. Icahn already was advising Mr. Trump informally on such matters as appointments for departments, commissions and agencies that oversee American business. In one sign of the market’s view on Mr. Icahn’s new appointment, his own publicly traded entity, Icahn Enterprises LP, rose 7.6% to $62.30 Thursday, among its biggest gains of the year. The overlap of Mr. Icahn’s business dealings and his coming advisory role is apparent in several of his current stock bets, where a regulation component could help determine his future profits. His largest investment at the moment is American International Group Inc., the giant insurance company. Mr. Icahn took the stake last year and argued for a breakup of the company, eventually gaining a board seat. He wanted the company to try to escape the government’s designation of being a systemically important financial institution, which imposes costs and triggers Federal Reserve oversight—an issue the Trump administration is expected to revisit. Mr. Icahn said on CNBC on Thursday he was surprised by questions about potential conflicts, saying the problem he sees with regulation in the

American Railcar Industries Inc.’s fight with regulators shows the kinds of conflicts Carl Icahn will face in his new job as adviser to Presidentelect Donald Trump. The company, owned by Mr. Icahn, recently sued its own safety regulator, the Federal Railroad Administration, trying to overturn an order that its tank cars be tested for leaks. The suit stems from the May 2014 discovery that an American Railcar-built tanker car was leaking ethanol due to what inspectors eventually determined was a faulty weld. The FRA issued a “railroad worthiness directive” in September ordering comprehensive inspection of 15% of 14,800 cars manufactured with a similar design by the company and another Icahn-con-

trolled firm. The regulators later revised the order to, among other things, reduce the number of tank cars to be comprehensively inspected, in part because of limited capacity at inspection sites, though it wants all the cars inspected eventually. The company has challenged the agency’s legal authority to issue the directive, and filed suit in November in the U.S. Court of Appeals for the District of Columbia Circuit. “The nonconforming weld conditions on the single car that leaked about one gallon of ethanol two years ago did not result in, nor do they create, any threat of cracks,” Jeffrey Hollister, American Railcar’s chief executive, wrote to the FRA on Nov. 28. The company also noted that in the two years since the leaking car was discovered, it has altered designs, improved procedures in its factories, and “fired certain welders.” An FRA spokesman declined to comment, citing the pending lawsuit. —Ted Mann and Jennifer Smith

Obama administration is that business leaders weren’t consulted. He said he won’t have specific duties and the title only cements the role he has been playing by sharing ideas with Mr. Trump. He said he would see an issue only if he was actually making policy. He said he isn’t required to give up his business dealings in the role, and isn’t being paid. “It’s almost as ridiculous as saying, you know, Donald shouldn’t talk to a Jamie Dimon or Brian Moynihan about bank regulation because they are CEO of a bank,” he said, referencing the leaders of J.P. Morgan Chase & Co. and Bank of America Corp., respectively.

“It’s sort of a crazy issue.” Spokesman Jason Miller said the Trump administration would take steps to address potential conflicts with Mr. Icahn’s role. “Obviously, there are proper oversights and there will be plenty of transparency when it comes to how this all ultimately comes together,” he said. The most direct say Mr. Icahn has already had in regulation that could affect his investments was his role in selecting the nominee to lead the Environmental Protection Agency, Scott Pruitt. Mr. Icahn, who controls an oil refiner, CVR Energy Inc., interviewed Mr. Pruitt and discussed with him his views on a

American Railcar is fighting an order that its tank cars be tested after a leak was found

rule about blending biofuels that Mr. Icahn has spent months complaining about to the EPA. CVR’s stock has shot higher on the hopes the rule would change. It rose 10.5% to $23.69 Thursday, bringing its gains to 85% since the election. He also has recently been buying more stock in Herbalife Ltd., a nutritional products company that sells through a network of individual distributors. Mr. Icahn’s rival William Ackman has accused the company of being a pyramid scheme, and their four-year fight is intertwined with a Federal Trade Commission investigation. While the FTC didn’t call it a pyramid scheme, it imposed strict changes on its business model and Herbalife paid $200 million this year. Both Messrs. Ackman and Icahn declared victory. Whether or not Herbalife is living up to the settlement would be determined by the FTC going forward. Mr. Icahn has said businesses face too many regulations, which he sees as scaring executives from investing. Last year, he released a 14minute video about his views on policies and Washington, blasting it as dysfunctional and setting up a financial crisis. He has been betting heavily against the stock market in the past year, convinced it is likely to go down sharply. He also has raised concerns about tax policy and low interest rates, and believes corporate earnings reports are “fallacious” and artificially inflating the stock market. He has blasted executives for stock buybacks. Some have chafed at that criticism, noting Mr. Icahn has also called on companies to repurchase shares. —Peter Nicholas contributed to this article.

BY REID J. EPSTEIN The top candidates to lead the Democratic National Committee are positioning their campaigns as a repudiation of what they see as the legacy of President Barack Obama for their political party. Although they rarely mention the president by name or address his policies, Labor Secretary Tom Perez and Minnesota Rep. Keith Ellison have sent a clear message that Mr. Obama has left the party in a weakened state. Messrs. Perez and Ellison— along with state Chairmen Jaime Harrison of South Carolina and Ray Buckley of New Hampshire, who are also candidates for chairman of the DNC—are seeking a mandate to reverse Obama-era tactics that cut funding and attention to local parties and left Democrats with far less power in Congress, governorships and state legislatures than when his presidency began. “This needs to be the very last cycle in which the presidential candidate takes over the DNC,” said Mr. Harrison, speaking at a forum for candidates this month. “The DNC is not just about winning the presidency. Amen?”

The audience, mostly Democratic state party chairs, responded “Amen.” The next party chairman will be selected by the committee’s 447 voting members in February. It is the first open election to lead the DNC since 2005. When a party holds the White House, the president selects the chairman and the election is perfunctory. Under DNC chairs selected by Mr. Obama—first Virginia Gov. Tim Kaine and then Florida Rep. Debbie Wasserman Schultz—the DNC cut funding to state parties. Local Democratic apparatuses withered. Since the president’s election in 2008, Democrats lost control of Congress and suffered even steeper losses in state capitols, where they hold a minority of governorships and have lost control in dozens of state legislative chambers. At his year-end news conference last week, the president said he was proud of his own national campaigns but acknowledged he is leaving Democrats in a deep hole. At the state level, some elected officials say that while they remain loyal to Mr. Obama, his presidency has left the lower rungs of the party in disarray.

BRENDAN SMIALOWSKI/AGENCE FRANCE-PRESSE/GETTY IMAGES

DNC Chair Candidates Fault Obama Passengers Ejected in

Rep. Keith Ellison is among the candidates for DNC chairman. “There has been too much focus by the DNC on the top of the ticket and too little organizing in between presidential races,” said Philip Bartlett, chairman of the Maine Democratic Party. Mo Elleithee, a top DNC official under Ms. Wasserman Schultz, said of party officials, “They don’t want a chair who is going to disrespect or critique this president, but they want a recognition that things have not been going well and a plan to fix it.” Now, even though Mr. Obama remains immensely

popular among Democrats, the case made by those aiming to succeed him as the head of the party and their allies isn’t subtle. “The painful truth is that despite President Obama’s strong victories in 2008 and 2012, the Democratic Party has lost enormous political ground over the last eight years,” Vermont Sen. Bernie Sanders said last week at a rally for Mr. Ellison. “Whatever the leadership of the Democratic Party has been doing over the last many years has failed, and we need fundamental change.” Mr. Ellison didn’t mention the president by name but made the same point. “We know that even a good car sometimes needs a tuneup,” he said. “You’ve got to maintain and update and invigorate.…If you just let it slide, it tends not to work so well.” Mounting a campaign critical of the Democratic establishment is trickier for Mr. Perez, who has served in the Obama administration since 2009. “We got too reliant on our data,” Mr. Perez told state party officials Thursday during a call launching his campaign. —Janet Hook contributed to this article.

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Ivanka Trump Incident BY MIKE VILENSKY

A passenger was removed from a JetBlue flight on Thursday after accosting Ivanka Trump, a spokesman for the airline said. Another passenger was also ejected, the airline said. The flight was awaiting takeoff from John F. Kennedy Airport in New York City, bound for San Francisco, when a man began shouting at Ms. Trump, the daughter of President-elect Donald Trump, about her father, according to news reports and a witness. A spokesman for JetBlue said the decision to remove the passengers was “not taken lightly” and the party was put on a later flight. A representative for Ms. Trump didn’t respond to requests to comment. The celebrity website TMZ first reported on the incident, writing that Ms. Trump ignored the man as he shouted against her father. JetBlue didn’t identify either passenger who was removed. A Brooklyn, N.Y.-based artist, Marc Scheff, said on Facebook he had been on the plane

and that the man “did not yell” and Ivanka handled it “calmly and with class.” In a phone interview, Mr. Scheff confirmed he was on the plane. He said that he doesn’t support Mr. Trump. Ms. Trump, 35 years old,

JetBlue said the decision to remove the passengers was ‘not taken lightly.’ and her husband, also 35, have been advisers to the presidentelect and were prominent faces in his campaign. According to the JetBlue statement, “If the crew determines that a customer is causing conflict on the aircraft, the customer will be asked to deplane, especially if the crew feels the situation runs the risk of escalation during flight. In this instance, our team worked to reaccommodate the party on the next available flight.” —Susan Carey contributed to this article.


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A6 | Friday, December 23, 2016

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THE WALL STREET JOURNAL.

WORLD NEWS

Syria Regime Claims to Hold All of Aleppo Evacuation ends as convoy leaves city’s east; opposition is hampered by infighting

ISIS Video Is Said To Show Killing Of Turkish Soldiers

Aleppo returned to full government control for the first time since 2012, the Syrian army said Thursday, a major victory for President Bashar alAssad and a crushing blow for the fractious armed opposition.

The Syrian army declared the city had been “liberated” and security restored, according to state-run SANA news agency. As the last convoy left eastern Aleppo, meanwhile, the weeklong evacuation of tens of thousands of civilians and rebels from the final remaining opposition-held areas of the city drew to a close Thursday night. Ahmad Kura Ali, a spokesman with the Islamist Ahrar al-Sham rebel group, said the convoy arrived in oppositioncontrolled territory in the countryside west of the city. The loss of what was once Syria’s largest city caps a string of defeats for the severely weakened rebels. Though the opposition still holds most of neighboring Idlib province and some rural pockets, its defeat in Aleppo further emboldens the Assad regime and strengthens its ability to maintain a grip on power. It also helps explain why

YANG ZHEN/XINHUA/ZUMA PRESS

By Raja Abdulrahim, Noam Raydan and Nour Alakraa

A man waved the Syrian national flag as a convoy including opposition fighters left Aleppo during Thursday’s evacuation of the city. the rebel movement has failed in nearly six years of fighting to unseat Mr. Assad: incessant infighting among numerous factions and the inability to forge a united front. Just weeks before they lost their last major urban stronghold, disparate rebel groups facing the biggest existential threat of the war were still settling scores with each other. As regime forces and allies massed along divided Aleppo’s front lines, opposition groups on the other side were clashing with each other, according to rebels and moni-

toring groups. When regime forces began making sweeping territorial gains inside Aleppo in late November and taking neighborhoods that rebels had held since 2012, a commander of a prominent rebel faction that receives U.S. military support was missing from the battlefield. He was imprisoned by one of the numerous rebel groups in the city and accused by that group of attempting to assassinate the leader of another faction, a claim he denied. Only after the regime had taken back much of rebel-held

Aleppo was the commander released—in part because of the dire situation the opposition found itself in, rebels said. “There is no room to talk about the details of what happened because our beloved Aleppo is going through a difficult time,” the commander Saqir Abu Qutaiba tweeted after his release on Dec. 4. The next day, clashes broke out again between rebel factions in Aleppo’s besieged and shrinking opposition enclave, this time over dwindling supplies of weapons and food. With losses mounting, reb-

els soon signaled defeat in Aleppo by proposing civilian evacuations and negotiations over the fate of the city. Last week, a deal was reached to allow tens of thousands of civilians and rebels to leave. “The biggest reason for the fall of Aleppo was the lack of unity between factions,” said Abdulhafeth Hamood, a native of the Old City and member of the Levant Front faction. “Each faction’s commander refused to give up their control, because they all came out not for the benefit of the people but to get power.”

Violence Bolsters Erdogan’s Power Play

DEPO PHOTOS/ZUMA PRESS

MIDDLE EAST CROSSROADS YAROSLAV TROFIMOV ANKARA—Turkey is moving toward a referendum that if approved would give President Recep Tayyip Erdogan near absolute power— and every new terrorist attack is likely to increase his chances of winning the vote. This nation of nearly 80 million people, a member of the North Atlantic Treaty Organization, is targeted by Kurdish separatists and radical Islamists alike. Over just the past two weeks, it witnessed two major bombings, in Istanbul and the central city of Kayseri, and the assassination of the Russian ambassador in the capital, Ankara. Mr. Erdogan, whose party has governed Turkey since 2002, has repeatedly argued that a strong executive presidency is needed to navigate these dangerous times. If he wins the referendum that is tentatively planned for June, he could stay in office until as late as 2029, with virtually all checks and balances on his authority removed. “If he wins, he will become a dictator,” warned Kemal Kilicdaroglu, the head of Turkey’s biggest opposition party, CHP. “Erdogan didn’t come to power because he

Mr. Erdogan is pushing for a referendum that would transfer executive powers to the presidential office. wants to rule the state. He came to power because he wants to be the state.” Under the proposed constitutional amendments, the prime minister’s post would be abolished and many powers held by parliament transferred to the presidency.

M

r. Erdogan’s Justice and Development Party, or AKP, has failed to win an election outright only once. That was in June 2015, when the rise of a pro-Kurdish opposition party deprived AKP of a parliamentary majority for the first time in 13 years. The collapse of the ceasefire between the Turkish state and Kurdish militants

weeks later, however, rallied voters around Mr. Erdogan. The president, who refused to preside over a coalition government and portrayed himself as a bulwark against terrorism, called snap elections in November 2015 and regained a comfortable majority for AKP. “Terror attacks will unify the political right, Turkey’s major electoral constituency,” predicted Soner Cagaptay, head of the Turkish program at the Washington Institute for Near East Policy. “It will be like a replay of the November 2015 polls.” The Istanbul and Kayseri attacks have been claimed by militants linked to the Kurdistan Workers’ Party, or PKK,

which is considered a terrorist organization by both Ankara and Washington. After the Kayseri blast, mobs attacked the offices of the main pro-Kurdish political party, the Peoples’ Democratic Party, or HDP. With the country on edge, some polls already show growing support for the constitutional changes demanded by Mr. Erdogan. It isn’t clear, however, to what extent voters are providing honest responses to pollsters amid the current state of emergency.

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ven among AKP voters, between 15% and 30% currently oppose the presidential system, according to Ibrahim Uslu, head of the

Anar polling and consultancy firm that advised the ruling party for more than a decade. Mr. Erdogan’s political enemies hope that the “no” side will also be fueled by a backlash against the massive purges that began after the failed July coup attempt against him. “All of this provoked huge hatred and rage against AKP, and because of that he will not succeed,” said Pervin Buldan, deputy speaker of parliament and a lawmaker from the pro-Kurdish HDP. Mr. Erdogan’s allies laugh at predictions of a referendum defeat. “We believe our president will have the support of over 60%,” said AKP lawmaker Mehmet Metiner. While AKP controls the absolute majority of seats in the Turkish parliament, it is 14 short of the 330 votes needed to pass the constitutional changes, which would then be submitted to a referendum. AKP expects to receive support on the amendments from the nationalist MHP party, whose leader, Devlet Bahceli, could become a vice president in exchange. It isn’t clear, however, to what extent Mr. Bahceli commands support within MHP. “Our voter base is completely against the presidential system,” said Yusuf Halacoglu. Mr. Erdogan’s allies argue that Turkey can’t afford the risk of future elections producing unstable coalition governments when the entire region is facing escalating turmoil. “In these lands, if you need to survive, you need to have a very strong system,” said his senior adviser Reha Denemec.

Israel Lobbied Trump to Help Derail U.N. Resolution Israeli government officials requested that U.S. Presidentelect Donald Trump intervene in deliberations at the United Nations focused on passing a By Jay Solomon, Rory Jones and Farnaz Fassihi new resolution on the Arab-Israel conflict, thrusting him into the center of one of the world’s most intractable conflicts even before taking office, according to Israeli officials briefed on the discussions. Top Israeli officials had come to believe that the Obama administration wasn’t going to block a U.N. resolution that seeks to define Is-

Islamic State in Syria released a video on Thursday purporting to show two captured Turkish soldiers being burned to death, according to the U.S.-based SITE Intelligence Group, which monitors militant groups online. Reuters wasn’t able to verify the report, and no comment was immediately available from Turkish officials. Late last month, Turkish military officials said they had lost contact with two soldiers in northern Syria, where the army is waging an offensive against Islamic State. —Reuters

raeli construction in disputed territories as “illegal” when the measure came up for a scheduled vote by the Security Council on Thursday, according to the officials. Instead, they turned to the incoming president, who has staked out positions more favorable to conservative Israelis and at odds with Palestinians. Mr. Trump responded Thursday morning by issuing a Twitter message calling for U.S. opposition to the U.N. resolution. He also held a phone conversation with Egypt’s President Abel Fatah al-Sisi, whose government had drafted the U.N. resolution. Cairo proceeded on Thursday to call for a delay on the vote. A spokesman for Mr.

The president-elect and Israel urged the Obama administration to veto the resolution. Trump’s transition team said Mr. Sisi initiated the call. Transition officials didn’t respond to questions about Israeli government contacts. Obama administration officials declined to comment on how it would have voted on the U.N. resolution. State Department spokesman John Kirby confirmed that Secretary of State John Kerry talked with Israeli Prime Minister Benjamin

Netanyahu Thursday morning. Palestinians and their allies favor a resolution such as the one that was under consideration, and may push for another vote. But the unusual developments, pitting an incoming administration directly against the sitting president, accentuates the uneasiness in the U.S. political transition. In Mr. Obama’s final year in office, the White House has considered ways to revive Israeli-Palestinian peace talks, and in recent months has considered supporting a U.N. resolution, according to White House officials. Mr. Trump is expected to significantly shift U.S. policy on Israel, condoning the construction of settlements in dis-

puted areas and proposing the move of the American embassy to Jerusalem. Egyptian officials said the phone call between Messrs. Sisi and Trump was the start of a new, U.S.-led approach in the Middle East. “They have agreed to lay the groundwork for the new administration to drive the establishment of a true peace between the Arabs and the Israelis,” an Egyptian official said. The U.S. vetoed a similar resolution in 2011, but Palestinian officials brought the measure forward hoping the outgoing president will break with precedent and not order a veto or abstention. —Carol E. Lee and Damian Paletta contributed to this article.

The Levant Front was formed years ago to unite major rebel groups throughout Aleppo province. But it failed amid disagreements about who would lead it. Financial and military backers of the rebels have for years pointed to lack of unity as one of the main reasons for not increasing their support. President Barack Obama spoke of the challenges the U.S. faced in its Syria policy. “The opposition on the ground was not cohesive enough to necessarily govern a country,” he said at a news conference this month.

Attack On Afghan Lawmaker Kills Eight BY EHSANULLAH AMIRI AND JESSICA DONATI KABUL—Afghan police shot and killed three Taliban militants who had stormed the Kabul home of a prominent lawmaker, triggering an all-night battle with security forces that killed at least eight people, officials said. Security forces managed to rescue Mir Wali Khan from his house in western Kabul after the militants attacked late Wednesday. But two of his young grandchildren were killed in the attack, along with other relatives and security guards. Mr. Khan and his wife were among the six other people wounded. Afghan security forces rescued 18 people from nearby buildings during the nine-hour battle, the interior ministry said. Mr. Khan, who is wellknown in government circles, represents Helmand province, which is largely under Taliban control. The provincial capital, Lashkar Gah, is the site of frequent clashes between the insurgents and security forces. The attack demonstrates the insurgents’ ability to gather intelligence and target protected officials. Mr. Khan’s son was killed last year while working as a police officer in Helmand. The lawmaker couldn’t be reached to comment. The Taliban swiftly claimed responsibility for Wednesday’s attack, saying they had targeted an important security meeting that was under way at the house. They also claimed to have blown up a U.S. military vehicle in Helmand, though U.S. military spokesman denied one of its vehicles had been hit. “Two holiday gifts for invaders by #Taliban today,” a Taliban spokesman said on Twitter. The attack interrupts several weeks of calm in the Afghan capital, which had seen a lull in violent attacks incidents as the insurgents have focused their efforts on making gains in the rural provinces where the Taliban have a presence. Afghan and international coalition officials in the country have expressed concern that Helmand province could fall fully to the Taliban when fighting picks up next summer, when the winter snow melts, allowing for the transit of militants and weapons.


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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | A7

* * * *

WORLD NEWS

BY RUTH BENDER BERLIN—German investigators said fingerprints found in the truck used in this week’s terror attack pointed to the central suspect as the likely perpetrator, as it emerged that Germany had alerted the U.S. in June that the 24-year-old Tunisian asylum seeker may pose a risk. The new evidence in an investigation that otherwise showed little progress came as the government hit back at accusations that authorities failed to stop Anis Amri, the fugitive suspect, despite being aware of his radicalization, or put him under surveillance. Chancellor Angela Merkel came under renewed pressure this week from opponents of her decision to open the country’s doors to hundreds of thousands of asylum seekers last year, a move critics say opened an avenue for Islamic State sympathizers to enter Europe and carry out attacks. The extent of authorities’ prior knowledge about the danger Mr. Amri posed was made even more apparent on Thursday when a senior U.S. official said Germany had notified the U.S. about him. U.S. authorities then added his name to a terrorism watch list. German officials in November provided more information and U.S. officials decided to put Mr. Amri’s name on a no-fly list, an indication they believed

he posed a more significant threat than they previously thought, the official said. It would be “totally disgusting” to blame Ms. Merkel for the attack, said Stephan Mayer, a lawmaker in Ms. Merkel’s conservative alliance and a critic of her refugee policy. “But we have to acknowledge that there is a connection between the refugee crisis and the increase in Islamist terror cases.” Ms. Merkel hit back on Thursday, defending Germany’s record in the fight against terrorism and praising the cooperation between Germany’s security and intelligence agencies and international services as “seamless.” “We have made considerable efforts in recent years to better meet the danger of terrorism,” she said. She praised Germany’s joint terrorism defense center, a recently created structure that brings together federal and state authorities on terrorism cases, saying their work made her confident that Germany would be able to weather the challenge it was now facing. Interior Minister Thomas de Maizière said while a time would come to draw political consequences from the attack, the focus should now be on finding the attacker. Mr. Mayer, however, rejected the call for patience, saying, “This case shows in really a dramatic way, where there are indeed deficits in the residency laws and also

MICHAEL KAPPELER/EUROPEAN PRESSPHOTO AGENCY

Germany Finds Fugitive’s Prints Inside Truck

Police officers on Thursday walked through the reopened Christmas market in Berlin that was the scene of the terror attack. in security laws.” Mr. de Maizière said investigators had found Mr. Amri’s fingerprints in the truck that rammed through a Berlin Christmas market on Monday, expressing confidence that the fugitive was the perpetrator. He also said there was other evidence supporting this. A spokeswoman for the federal prosecutor’s office said it had issued an arrest warrant for Mr. Amri after finding his prints in the cab and on the truck’s door. Several places connected to Mr. Amri across the country had been searched during the day, the spokeswoman said. —Valentina Pop in Berlin and Shane Harris contributed to this article.

Berlin Market Hit By Truck Reopens In Anxious Defiance BERLIN—Three days after a terrorist rammed a truck into a Christmas market here, vendors on Thursday reopened their stalls to throngs of patrons in a somber act of defiance tinged with anxiety. Hundreds of mourners crowded into the nearby Kaiser Wilhelm Memorial Church for a service honoring the 12 people killed in Monday’s attack, before drifting hesitantly into the once festive Breitscheidplatz Christ-

mas market. Christmas markets—there are roughly 60 throughout Berlin and well over 2,000 in Germany, according to government offices—are a fixture of the holiday season here. Each December, Germans gather at their local outdoor squares, often in freezing cold, to drink Glühwein and visit booths selling everything from ornaments to hats. But on Berlin’s Breitscheidplatz on Thursday, the mood was more respectful than festive. “I think it’s very strange, but very courageous of course,” Isabelle Legrand, a 50-year-old Berlin-based tour guide, said of the market reopening so soon

after the tragedy. “It’s not a normal atmosphere.” As the market opened, a crane lowered concrete blocks to the ground as workers hurried to improvise a security barrier along the perimeter of the square. The police presence was minimal. A few officers roamed the market carrying machine guns, but reporters with video cameras appeared to far outnumber security forces. German officials vowed this week to step up security at Christmas markets and public places across the country, while urging markets to reopen and citizens to go about their business.—Christopher Alessi

By the time he talked to his sister earlier this month, Anis Amri had eluded a Tunisian prison term for car robbery, deportation attempts by Italy and Germany, and a terrorism probe in Berlin. By Anton Troianovski in Berlin, Nedim Hedhli in Oueslatia, Tunisia, and Hassan Morajea in Nice, France “With God’s will,” Mr. Amri’s sister recalled him telling her about 10 days ago, “I’ll be coming home soon.” Days later, German authorities say, Mr. Amri rammed a stolen truck into a Christmas market and killed 12 people. He appeared to have adopted the ideology of radical jihad even as he sold drugs outside Berlin nightclubs and stayed in touch with his family back at home. Then he pulled off one more escape: avoiding a Europe-wide manhunt for at least 72 hours.

Most migrants who come to Europe, authorities say, peacefully pursue legal ways of making a living. But some seek out petty crime or fall prey to extremism. Mr. Amri did both, according to the authorities and people who knew him. One day in March 2011, two boats left the Tunisian port of Sfax. One boat sank, killing everyone aboard. The other brought Mr. Amri to the Italian island of Lampedusa, according to family members and a friend who traveled with him. Half a year later, Italy turned down Mr. Amri’s application for a residency permit, according to Italian officials, and he and two other Tunisians were arrested and sentenced to four years in prison for setting fire to the center housing them. Italian authorities released Mr. Amri a few months early, in May 2015, and ordered him to leave the country. Mr. Amri traveled to Switzerland and after a week to Germany, accord-

BERND THISSEN/EUROPEAN PRESSPHOTO AGENCY

Suspect in Berlin Attack Slipped Through Many Nets

Police officers climbing a staircase to search an apartment in Dortmund, Germany, on Thursday. ing to his family. He told his brother Walid that he had found intermittent employment in agriculture and at a garage. But according to German officials, he also soon started

searching the internet for links to Islamic extremists and downloading radical content. They say he made contact with a radical Iraqi preacher known as Abu Walaa, whom

Continued from Page One ments, porous borders and lack of biometric data to identify people who use false identities. The rise of Islamic State and Germany’s decision to throw open the door to refugees last year has left security services overwhelmed as they try to track jihadist threats among the new arrivals. The attacks in Paris in 2015 and Brussels in March confirmed fears that Islamist groups had exploited refugee flows to smuggle operatives into the heart of Europe. Investigators have determined most of the assailants in those cases traveled from Syria through the Balkans and then Central Europe along with a river of refugees in the summer and fall of 2015. Around the same time, Mr. Amri was released after four years in an Italian prison for starting a fire at a refugee shelter. The authorities ordered him to return to Tunisia. Instead, he headed to Germany, where he roamed freely using a series of false identities and sought asylum. His path to Berlin is prompting calls for Europe to fix the longstanding security flaws of the Schengen Zone, which allows border-free travel throughout much of the region. “We are very late, and we’re in the process of catching up,” said Georges Fenech, chairman of the French parliamentary committee that investigated the

MICHAEL DALDER/REUTERS

SECURE

Migrants headed into a registration camp near Munich in November. Paris attacks. “Because today, these terrorists move freely in the Schengen area. From the moment they enter with the migrants, they pass borders without much difficulty.” Overtaxed security agencies dropped 24-hour surveillance of Mr. Amri this year when they failed to find enough evidence to make him a high-priority target. Mr. Amri had been under scrutiny after authorities discovered links between him and a radical cleric. Police detained him in July when they discovered his request for asylum was denied and he was to be deported. But they released him a day later, because of Germany’s strict legal limits on the detention of migrants and Tunisia’s unwillingness at the time to take him back. German officials in November provided information that prompted the U.S. to put Mr. Amri’s name on a no-fly list. Authorities aren’t certain whether Mr. Amri is their only

suspect. Islamic State issued a boilerplate claim of responsibility for the massacre. Jean-Charles Brisard, head of the Center for Analysis of Terrorism in Paris, said the fact that Mr. Amri was allowed to leave Italy with a criminal record and apply for asylum again in Germany underscores the disorder of Europe’s refugee system. Authorities still don’t routinely fingerprint migrants or check their fingerprints against national criminal databases, he noted. “This is clearly a failure of exchange of information, but also of initial screening and control of refugees,” Mr. Brisard said. The scale of the inflow is daunting. The German Interior Ministry said as of Nov. 30, there were 32,714 Tunisian asylum seekers in the country. Decisions had been made for nearly 1,500 to be repatriated, but only 111 had been sent back to Tunisia. The accep-

tance rate for Tunisian asylum requests is 0.8%, a ministry spokeswoman said. In 2015, meanwhile, European Union countries designated 533,395 people for deportation, but only 36% were sent back, according to Eurostat, the bloc’s statistics office. Since the Paris attacks, European security services have raced to detect jihadist threats among the millions of refugees who arrived in recent years. Evidence has mounted this year that Islamic State sent dozens of operatives to Europe over the past two years, to Germany in particular, officials say. Authorities say those people are plotting attacks and trying to recruit other refugees. Europe’s stretched security officials are set to face another test. Authorities expect the looming fall of Islamic State’s strongholds of Raqqa, Syria, and Mosul, Iraq, will prompt many jihadists to flee and attempt to enter Europe. Yet the bloc’s control of the Schengen borders remains patchy. The EU has set up “hot spots” where officials from Europol, the body’s police-coordinating agency, conduct security checks of migrants. But the hot spots still don’t have necessary infrastructure, according to a note by the EU’s counterterrorism coordinator for national governments. “Further progress needs to be made with regard to systematic checks of the migrants against all relevant databases,” the note says.

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authorities took into custody last month for recruiting fighters for Islamic State. Mr. Amri moved to Berlin in February, authorities say. Berlin prosecutors launched a

probe against him in March because they thought he might be planning an attack. But months of surveillance yielded no evidence that could stand up in court, they said this week. In June, authorities rejected Mr. Amri’s asylum application. They ordered him deported and detained him for a day in July. He wasn’t sent back after Tunisia contested his citizenship. In September, prosecutors stopped monitoring him. In November, state and federal officials compared notes, but found no evidence to justify round-the-clock surveillance. Hassin, a 32-year-old Tunisian who said he often smokes in a small park in Berlin’s Moabit neighborhood, said he immediately recognized Mr. Amri in the police’s wanted notice. Mr. Amri, he said, sometimes came to the park in the evenings to sell drugs, always calm and always alone. “He was bizarre,” Hassin said. “He didn’t trust anyone.”


A8 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

* ***

WORLD NEWS

BY MARK MAGNIER BEIJING—China’s government issued a measured response to Donald Trump’s naming of a China trade skeptic to oversee American trade and industrial policy, as it weighed how to approach the president-elect’s threats of a confrontation over trade. “China like every other country is closely watching the policy direction the U.S. is going to take,� said a Foreign Ministry spokeswoman on Thursday, without mentioning the nominee’s name. “Cooperation is the only right choice for both sides.� Mr. Trump named Peter Navarro on Wednesday to head the National Trade Council, a newly created White House office. Mr. Navarro, a Trump campaign adviser and University of California professor, has argued that China’s accession to the World Trade Organization in 2001 halved American economic growth and cost it 70,000 manufacturing jobs. He urges the U.S. and its allies to sharply reduce imports from China to deprive it of resources and to curb the country’s militaristic outlook. Mr. Navarro’s appointment—and the Trump team’s threats to name China a currency manipulator and to erect high tariffs against it—drew fire in China outside official circles. Their rhetoric is based on “wrong ideas,� said Cheng Dawei, a Renmin University of China economics professor and former trade adviser to Beijing. Tough U.S. steps against China would likely prompt calibrated retaliatory moves by Beijing, economists and foreigntrade analysts said. Among China’s likely targets, say trade experts: Boeing Co. aircraft and U.S. farm exports from Midwestern Republican states.

Ivory Coast Grows Into Powerhouse BY JOE PARKINSON

Towering Turnaround

ABIDJAN, Ivory Coast—This West African country in October became the continent’s fastest-growing economy, a sharp reversal from 2011, when a bloody civil conflict left 3,000 people dead. The International Monetary Fund said surging foreign investment, political stability and firm prices for its main crops helped the nation of 25 million people surpass Ethiopia. The World Bank expects growth here to hit 8.5% this year, the second-fastest in the world after Myanmar. Ivory Coast’s performance stands in contrast with that of economies like Nigeria and Angola, which fell into recession as the price of oil collapsed, and other African democracies have cited Ivory Coast’s economic success as a model. Diplomats say the country’s progress is real but that peace remains precarious, while Ivorians remain deeply divided along political and ethnic fault lines. The government still has limited control over some branches of the security forces. Authorities say they are taking steps to limit child labor. Long the world’s top cocoa

In the years since a bloody civil war in 2011, Ivory Coast has become one of Africa’s biggest success stories, helped by a diversiďŹ ed economy. GDP, adjusted for ination change from a year earlier

GDP per capita based on purchasing power parity

10%

$4,000

2016 $3,830.6*

All Sub-Saharan Africa 3,000 5

$3,581.2* 2,000 All Sub-Saharan Africa Ivory Coast

0 1,000 Ivory Coast Projection

–5 2003

’05

*Projection for 2016

’10

’15

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producer, Ivory Coast has taken steps to diversify its economy, boosting exports of electricity and agricultural products including timber, palm oil, rubber and cashews. Its currency, the West African CFA franc, is pegged to the euro, helping inoculate investors against foreign-exchange swings seen in many of the continent’s big economies. An infrastructure boom has helped revive the country’s

’15

THE WALL STREET JOURNAL.

Source: IMF

historic role as a hub for West Africa’s market of 300 million consumers, and has drawn the country’s elite back from Europe, the U.S. and Canada. “The diaspora is coming home and money is flowing in. This is our moment,� said Issa Diabate, a Yale-trained architect who constructs housing units for the country’s fast-expanding middle class. A bullet hole has long marked a window in his office.

“We kept it there as a reminder of how far we’ve come� since the 2011 war, when forces loyal to President Alassane Outtara fought those of his predecessor, Laurent Gbagbo. Western-backed Mr. Outtara emerged victorious and began rebuilding the country, aided by a wave of foreign capital. Mr. Gbagbo is on trial for crimes against humanity in The Hague, charges he denies. Voters in October approved

a new constitution Mr. Outtara said would guarantee a stable transition when his second term ends in 2020, but the polls were marked by low turnout and sporadic violence. This week, the president’s ruling coalition took nearly two-thirds of the votes in parliamentary elections, although just 34% of voters cast ballots. Some commentators say stark political divides haven’t been extinguished by the country’s growth spurt. “We are sitting on a bomb,� said Bart Inobo, a journalist here. “Not everyone has benefited, and the political crisis is still unsolved.� Economy Minister Narcise N’Dri this week said the economic success has lifted support for the government and that the wealth is trickling down to poorer areas. Investors and executives say the government will tackle inequality after bolstering the nation’s economic fundamentals. Herve Boyer, managing director of Standard Bank’s regional office, says his affiliate will more than double its current level of capital to 37 billion CFA francs ($59 million) by 2020. “We are very, very bullish,� he said.

WORLD WATCH our experts fully inspect and assess it,� U.S. Pacific Fleet spokesman Lt. Cmdr. Matt Knight said. China says its personnel hadn’t identified the drone when they picked it up because they thought it posed a safety risk to ships and sailors in the area. The Pentagon has described the seizure as “unlawful.� —Jeremy Page

CHINA

U.S. to Probe Drone For Any Tampering The U.S. Navy said an American underwater drone that had been in China’s hands for five days would be examined for any tampering but appeared intact, as U.S. officials attempted to figure out Beijing’s motives for the unusual incident in the South China Sea. Photographs released by the U.S. naval forces late Wednesday show the “ocean glider� drone being loaded onto the USS Mustin, a guided-missile destroyer, following a handover from the Chinese ship on Tuesday. “At this time I can’t speculate on the condition until

AUSTRALIA

Police Foil Plot To Attack Melbourne Authorities said they disrupted a terrorist plot inspired by Islamic State to explode devices in central Melbourne. the coun-

try's second-largest city, on or around Christmas Day, with a railway station and a cathedral among likely targets. Prime Minister Malcolm Turnbull said seven people were arrested, of whom five were expected to be charged. The plan allegedly involved the use of several improvised explosive devices, and a senior police chief said the accused plotters may have planned to use other weapons as well, including knives and a firearm. Counterterrorism police arrested the seven alleged plotters after a predawn raid on several Melbourne buildings. Mr. Turnbull called it “one of the most substantial terrorist plots� of recent years. —Rhiannon Hoyle

MACIEJ KULCZYNSKI/EUROPEAN PRESSPHOTO AGENCY

China Weighs Approach To Trump

RECOVERY: A 32-year-old man looked at his transplanted hand in a hospital in Wroclaw, Poland, in what was described as the world’s first transplantation of a hand to an adult who was born without one.

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Friday, December 23, 2016 | A9

LOGOS Continued from Page One has to be pulled out carefully to keep the underlying fabric pristine. Vinyl logos attached to sportswear are particularly challenging. Some people have tried to dissolve them with nail polish remover. Others just wear the garments inside out. “This isn’t a trend we’re seeing with Ray-Ban,” said a spokesperson with Luxottica, the company that owns the brand. Ralph Lauren and Under Armour declined to comment. In the 1990s and 2000s, consumers flashed brand names with pride. Some shoppers now, though, shun such uniformity and prefer unlabeled clothing, which has prompted a few logoheavy brands to shift course. “Nobody wants to be branded anymore,” said Aaron Levine, head designer for Abercrombie & Fitch. Gabrielle Gutierrez, 33 years old, said Abercrombie shirts were an ideal fit, but she didn’t want to display the brand’s moose insignia. “It was a bit of a dilemma,” said the neuroscientist, who lives in Seattle. Ms. Gutierrez said she learned one way to “de-Aber-

crombie-ify” her shirts. She bought iron-on patches from the clearance bin at a Jo-Ann fabric store to cover the Abercrombie moose. Her shirts now have eyeballs, smiley faces and palm trees, a style she described as “personalized and subversive.” Abercrombie recently launched a marketing campaign and changed its logo to cultivate a new image for its clothing line, after its highly sexualized branding began to alienate too many buyers. Ms. Gutierrez hasn’t revisited an Abercrombie store since the change. She stopped shopping there because the logo kept getting “bigger and bigger,” she said. “It became impossible to cover.” Research shows that midtier brands often have the loudest logos because their buyers want to signal wealth. Seasoned luxury shoppers may prefer more subtle branding. “People in the know can recognize a high-end brand from the little things such as the stitching,” said Barbara Kahn, a marketing professor at the University of Pennsylvania’s Wharton School, who dismissed logo removal as “ludicrous.” Discerning shoppers who can identify a Brooks Brothers shirt from the six-pleat shirring

TOPICAL PRESS AGENCY/GETTY IMAGES

FROM PAGE ONE

French tennis player Rene Lacoste first wore a blazer with a signature motif in 1926, playing off his nickname: The Crocodile. at the cuffs or an Alden loafer from its distinctive stitching are “part of your tribe,” said Jerrod Swanton, age 37, of Springfield, Ohio. He writes a clothes blog called Oxford Cloth Button Down and said he prefers not to advertise how much he spends on clothing or where he

shops. “It is becoming more and more challenging to find articles of clothing without the logos,” Mr. Swanton said. He and several of his blog readers shared their disapproval, for example, when Brooks Brothers added a logo to one of its classic sweaters. “Some styles come with logo

and others without,” said Arthur Wayne, a spokesman for Brooks Brothers. “We leave it to the customer to decide.” Lacoste was a pioneer in logo-branded clothing. By the 1980s, its shirts had become staples of preppy wardrobes, and its tiny green crocodiles seemed to spawn Ralph Lauren

ponies, Tommy Bahama marlins and Abercrombie’s moose. Professional tennis player Rene Lacoste was nicknamed “The Crocodile” after he won an alligator-skin suitcase in a wager with the French Davis Cup captain, the company said, and the logo first appeared on his blazer. Nothing personal, Mr. Ilich said, but he just doesn’t want it showing on his Lacoste shirts. Lacoste said no executive was available to comment. Jeff Taxdahl, owner of Thread Logic, a custom logo embroidery company based in Minneapolis, has a warning for logo tamperers. “Unless you’re fairly skilled at it, you would destroy the shirt,” he said. “And once you get the threads out, the outline of the image may still exist due to the needle holes.” That is a risk some shoppers are willing to take. Ian Connel, 33 years old, who lives near St. Paul, Minn., said he tried it out on an Abercrombie shirt. “I don’t want to be seen in their stores, let alone wear the moose,” he said, though he likes the brand’s snug fit. He turned the shirt inside out and painstakingly removed each thread. “It has a few small holes,” he said, “but it’s still better than having the logo.”

FROM PAGE ONE

HEDGE Continued from Page One familiar with the project described it as “like trying to make Ray’s brain into a computer.” Bridgewater manages $160 billion, the most of any hedgefund firm. It has earned clients twice as much total profit as any rival, says LCH Investments NV, a firm that puts client money into hedge funds. Mr. Dalio personally earned $1.4 billion last year, according to research firm Institutional Investor’s Alpha. Bridgewater’s flagship fund, however, was down about 12% on the year at one point in 2016, causing alarm inside the firm. The fund has since recovered to being up 3.9% in mid-December. A lower-fee fund was up 8.1%. Rules for Bridgewater’s staff are laid out in a 123-page public manifesto known as the “Principles,” which every employee is expected to know and diligently apply. Along with maxims such as “By and large, you will get what you deserve over time,” the Principles are filled with advice from Mr. Dalio such as “Don’t ‘pick your battles.’ Fight them all.” Bridgewater says about one-

fifth of new hires leave within the first year. The pressure is such that those who stay sometimes are seen crying in the bathrooms, said five current and former staff members. This article is based on interviews with them and more than a dozen other past and present Bridgewater employees and others close to the firm. Mr. Dalio returned to run Bridgewater earlier this year after stepping back to a mentor role six years ago. Within a few weeks, he gathered managers under a tent and said the firm had grown bloated and inefficient. The fix, he said, would be a “renovation,” in which weak employees were let go. Staff cuts began almost immediately. Since his return, head count is down by about 150, or 10%. Hundreds more may be cut in coming months, though some are expected to be replaced eventually. The budget for the holiday party, which in the past has had elaborate decorations, such as Christmas trees hanging inverted from the ceiling, has been trimmed by 20% this year. Stung by public disclosures early this year of internal tumult, Mr. Dalio changed a decades-old system of making all high-level deliberations and decisions known to every member of staff. Instead, he decided to

Benchmark Beater Bridgewater’s Pure Alpha hedge fund initially trailed an index of hedge funds using a macroeconomic approach but then began frequently beating the index. Pure Alpha

40 30 20 10 0 –10 ’95

2000

’05

’10

’15

Note: 2016 through Dec. 16 for Pure Alpha and through Nov. 30 for HFRI. THE WALL STREET JOURNAL. Sources: Investor Document (Pure Alpha); HFR

Dalio Faulted Some He Put in Charge When Ray Dalio temporarily retreated from day-to-day management, the Bridgewater founder spent weeks at a time away from the firm’s Westport, Conn., campus indulging pursuits such as scuba diving and, until he gave it up, bow hunting. He bought a submarine-equipped yacht, MV Alucia, for research expeditions in the open ocean. To run Bridgewater in his absence, he brought in a collection of big-name outsiders. Before long, he was expressing frustration with some in senior roles. There was James Comey, whom Mr. Dalio hired as general counsel in 2010, saying he would act as a “godfather” figure to improve justice at the firm. Within three years, according to two former employees, Mr. Dalio had taken to calling Mr. Comey something else, a “chirper” who repeats stale ideas, as opposed to a “shaper,”

‘It’s like trying to make Ray’s brain into a computer,’ one fund employee said. When an employee challenged Mr. Dalio in an open meeting on whether the response was proportionate to the leaks, he replied that as the inventor of the firm’s management system, he determined it was. Mr. Dalio founded Bridgewater in 1975 as a research shop based in his two-bedroom Manhattan apartment. He earned attention for his ability to predict macroeconomic trends.

Economic machine

HFRI Macro (Total) Index

50%

1991

let only around 10% have the full measure of what he calls “radical transparency.” He wrote a new principle, not yet public, that says, “Expect those who receive the radical transparency to handle it responsibly and don’t give it to them if they can’t.”

the Bridgewater ideal of a visionary leader. Mr. Comey left in 2013, telling colleagues his personality didn’t fit. Now director of the Federal Bureau of Investigation, he declined to comment. An executive long seen as Mr. Dalio’s heir apparent, Greg Jensen, ran afoul of his boss a year ago for allegedly talking about him beyond his back, which at Bridgewater is a sin second only to dishonesty. In a tribunal the firm convened, Mr. Jensen was found to have broken the rules. He lost his coCEO title but remains co-chief investment officer. Mr. Jensen declined to comment. “These types of interactions go on in any workplace in America,” Bridgewater said in a written statement for this article. “The difference here is that instead of pretending it doesn’t exist we address it openly and deal with it honestly. We show them to everyone and if necessary conflicts are decided by a vote.” —Bradley Hope and Rob Copeland

At the core of the technology project now under way is a walled-off group called the Systematized Intelligence Lab, headed by David Ferrucci, who led development of the artificial-intelligence system Watson at International Business Machines Corp. before joining Bridgewater in 2013. Though outsiders expected Mr. Ferrucci would use his talents to help find hidden signals in the financial markets, his job has focused more narrowly on analyzing the torrent of data the firm gathers about its employees. The data include ratings employees give each other through the day, called “dots.” The underpinning to his success, Mr. Dalio often says, is his belief that markets reflect the workings of a misunderstood economic machine, and interpreting its mechanics requires a relentless and often painful dedication to getting to the truth through “thoughtful disagreement.” That’s why employees are encouraged to challenge each other repeatedly and without reservation. The economy, Mr. Dalio has written, is “really just a zillion simple things working together.” Decades before computer-driven trading came into vogue, Bridgewater began tracking relations among what are now 100 million separate data points, such as international interest rates and retail sales, and creating investment algorithms. The main hedge fund embodying these algorithms, Pure Alpha, uses the data to buy and sell stocks, bonds, currencies and other assets. The fund has long anticipated booms and busts around the world, includ-

ing the looming financial crisis as early as 2006, the firm has told investors. Mr. Dalio also believes humans work like machines, a word that appears 84 times in the Principles. The problem, he has often said, is that people are prevented from achieving their best performance by emotional interference. It is something he thinks can be overcome through systematic practice. That applies to managing, too. Successful managers “design a ‘machine’ consisting of the right people doing the right things to get what they want,” he wrote in the Principles. The “Book of the Future” software to automate management, a project Mr. Dalio has also sometimes referred to as “The One Thing,” later gained the more formal name of Principles Operating System. Abbreviated PriOS, it is an attempt to make management nearly as systematic as the firm’s investing process. Data are incorporated from a phalanx of personality tests that Mr. Dalio requires of his employees. In one, managers undergo written exams to determine their “stratum,” an unconventional score for conceptual skills developed by the late Canadian-born psychoanalyst Elliott Jaques. As applied at the firm, questions include “What is the biggest problem Bridgewater faces today?” The highest marks go to those found to have an innate ability to spot long-term trends. Mr. Dalio has the highest score at Bridgewater, and the firm has told employees he has one of the highest in the world. Likewise, Bridgewater’s software judges Mr. Dalio the firm’s most “believable” employee in matters such as investing and leadership, which means his opinions carry more weight. Mr. Dalio is always in search of new data with which to measure his staff. He once raised the idea of using head bands to track people’s brain waves, according to one former employee. The idea wasn’t adopted. The push to automate management addresses a larger challenge, which is how this culture would survive without Mr. Dalio, who is 67 years old. Mr. Dalio frequently develops new ways to enforce his philosophy. He recently created a job category called Overseer, whose roughly dozen members are spread through the firm and act as the eyes and ears of the top leadership. The Systematized Intelligence Lab is involved in several iPad applications that are part of employees’ everyday lives, among them the “Dot Collector.” It allows employees to rate each other on dozens of attributes and to hold snap polls on issues during meetings, including asking blunt questions such as whether a current conversation is a waste of time. The data blend with others to produce “Baseball Cards” that show people’s strengths and weaknesses in various categories, such as “touching the nerve,” a prized attribute. A job advertisement for the Systematized Intelligence Lab said it sought to “extract meaning and domain understanding from the wealth of text-based

www.ebook3000.com

Ray Dalio's Management Machine The founder of the world's biggest hedge fund, Bridgewater Associates, is working on automating day-to-day decisions to match his ‘Principles’ manifesto. Here is how it would work. Employees rate each other er g.’ in categories like ‘listening.’ Dot Collector’ organizes aallll ‘Dot personal grades.

Snap polls are conducted eetings. in meetings. Resu R ults of peer votes stored. Results

Psychological Psy ycchological tests assess y con nceptual abilities nc conceptual abilities. Em mployees are assigned Employees ‘str rratum’ levels, among ‘stratum’ oth her metrics. h other

S tafff tak ke da ailily aily Staff take daily oice multiple-choice eal-life quizzes on real-life ags. managementt sna snags. ncorrrect Correct and incorrect ged answers are logg logged over time.

Input to o the machine

Pr rin n es nciple Principles peeratin n S ng ysteem m Operating System ook of of the th he Future’ he Fu utu utu urree’ ur ‘The Book The machine turns Dalio's principles into automated commands Samplee principle principles es ‘Pain + Reflection c ction = Progress’ Proogre ress’ T So oupp’ ‘Taste The Soup’ ‘Problems are a thee fuel fuel for fo r fo o oveme nt’ improvement’ i ot ther jo o s… obs ‘Sort people into other jobs… or remove them’ hem’ ‘Don’t depersonalizee mista mistakes’ a es’ ake e

Output Out tput from thee machine machin ne GPS-style directions for day-to-day tasks

Suggestions Sug ggestions g gestions on wh hom to employ whom in a given scenario

Names N am of people to hire, fire or move to different jobs.

1 1. THE WALL STREET JOURNAL.

data our innovative applications generate.” Several employees said they have felt that working at Bridgewater was as much experimental research into human decision-making as investing. New apps in recent months shed light on Mr. Dalio’s expanding technological vision. Software called “The Contract,” loaded on staff iPads, instructs employees to formalize goals to be achieved over time and tracks how they follow through.

Insert question here An app called “The Coach” lets people input a question and directs them to the relevant passage in Mr. Dalio’s Principles document. The goal is an evolution of The Coach into an intelligent system that can assist in decision-making. Those are initial uses of PriOS, the management software Mr. Dalio is developing. Future uses would include the ability to scan open positions at the company and have PriOS sort through the staff to find people with particular talents and strengths to fill jobs.

In other instances, employees at loggerheads over decisions wouldn’t have to hash out each debate out loud. They would key their opinions into PriOS, and the software would rank their perspectives, consult with Mr. Dalio’s Principles, and spit out the best way to proceed. The ultimate vision is that PriOS would be able to predict outcomes of meetings before they are completed, and to guide people to take certain actions throughout the day. Within five years, Mr. Dalio aims for nearly three-quarters of management decisions to be determined by PriOS. The role of many remaining humans wouldn’t be to make individual choices but to design the criteria by which the system makes decisions, intervening when something isn’t working. Mr. Dalio’s original written manifesto nods to the goal of automating decision-making. With greater use of the Principles, it says, “not only will they be understood, but they will evolve from ‘Ray’s principles’ to ‘our principles’ and Ray will fade out of the picture.”


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A9A | Friday, December 23, 2016

NY

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THE WALL STREET JOURNAL.

GREATER NEW YORK

Uber Ramps Up Political Pressure on Albany BY MIKE VILENSKY Since its founding in San Francisco nearly eight years ago, ride-hailing app Uber Technologies Inc. has taken off in global cities like Paris, Tokyo and Johannesburg. But it is still working on the Catskills. With less than two weeks before the Legislature convenes its 2017 session, Uber is in negotiations with Gov. Andrew Cuomo and lawmakers about measures that would allow it to operate anywhere in New York. Insurance requirements on commercial cab operators prevent Uber from legally operating in places outside New York City. Mr. Cuomo, a Democrat, supports approving Uber and other ride-sharing services such as Lyft.

NEW YORK WATCH

Now, the company is in talks about legislative efforts to impose a special tax on the ride-serving services, benefits for drivers, an insurance minimum for accidents and safety requirements, according to people familiar with the negotiations. Uber has been pushing back, however, against the potential costs. “It would be unfortunate if…costs and unreasonable taxes make it impossible to operate in Upstate communities most starved for affordable, reliable transportation,” Josh Gold, a policy strategist for Uber, said in an email. One of 13 states where the ride-hailing service doesn’t have a statewide regulatory framework, New York has been dubbed the “final frontier” by Uber officials. “We’re in Kazakhstan, but

Upside for Cuomo Of Statewide Deal

Legalizing Uber could help improve Gov. Andrew Cuomo’s standing with the technology industry after blowback over

signing a bill this year that imposed fines on Airbnb users who violate certain terms. It also could help boost his appeal upstate. Mr. Cuomo and legislators are discussing a worker’s compensation fund that would make New York the first state to demand insurance coverage for Uber drivers and could be a political win for the governor,

who is allied with labor groups. Melissa DeRosa, Mr. Cuomo’s chief of staff and highest ranking aide, has recused herself from “anything related to Uber,” a spokeswoman for the governor said, because she is married to Matthew Wing, an Uber executive and himself a former Cuomo aide. —Mike Vilensky

not upstate,” said Josh Mohrer, the company’s New York general manager. “It’s…like a joke.” Since failing to reach an agreement during last year’s legislative session in Albany, Uber has been drawing up plans to pressure state lawmakers in 2017. The company has followed the playbook it used last year

when it won the right to expand in New York City despite opposition from Democratic Mayor Bill de Blasio. The company has been running television and web advertisements, touting the support of civil rights activists and urging New Yorkers to phone their legislators about the issue. Trial lawyers and other

groups allied with the Democratically led Assembly have pushed for a higher accident insurance minimum, according to people familiar with the negotiations. Uber has resisted the proposal. Groups representing traditional cabs have demanded background checks and fingerprinting of Uber drivers. “We’re not sure why up-

Governor stands to gain with technology, labor and voters

state consumers should have less protection than downstate,” said John Tomassi, president of the Upstate Transportation Association, which represents taxi drivers. Mr. Gold, the Uber executive, called the issue “a red herring.” Some lawmakers said their own rides around Albany might be an incentive. Many city lawmakers commute by train before hopping a taxi to the capitol, sometimes sharing the cab with more people than fit comfortably. Cabs often charge riders $20 apiece even though they are going to the same place. “It’s one of the most frustrating parts of being in Albany,” said Assemblywoman Linda Rosenthal, a Manhattan Democrat who led the fight to regulate Airbnb but said she is open to negotiating with Uber.

A Milestone for the Tappan Zee

NEW YORK CITY

High-End Developers Close Financing Deal

SETH WENIG/ASSOCIATED PRESS

The developers of a pair of luxury residential rental buildings on Manhattan’s East Side have secured $660 million in financing. JDS Development Group and its partner, Largo Investments, closed on a deal Thursday that allows them to retire a $390 million construction loan, repay equity provided for construction costs and provide financial flexibility for the 761-unit towers at 626 First Ave., said Aaron Appel, a JLL managing director who was on the team that brokered the financing. American International Group Inc. provided a $500 million senior loan, and SL Green Realty Corp. and a fund managed by Apollo Global Management LLC provided a $160 million mezzanine loan. The floating-rate loan has a threeyear term. The American Copper Buildings, designed by ShoP Architects, will have 601 market-rate units and 160 affordable units as well as 13,441 square feet of groundfloor retail space. —Keiko Morris NEW YORK CITY

A four-alarm fire Thursday in Manhattan’s Lincoln Square neighborhood injured 13 people, three seriously, said a New York Fire Department official. The fire at 515 W. 59th St., which began shortly before 5 p.m., burned through the third and fourth floors of the 33story residential building. More than 160 firefighters responded; three suffered nonlife-threatening injuries. All the injured were taken to hospitals. The investigation is continuing. —Zolan Kanno-Youngs NEW YORK

Drivers Get Break On Road Closures Lane closures at road and bridge construction sites on New York state highways won’t be permitted over the coming holiday weekends. The temporary bans will run from 6 a.m. Friday until 6 a.m. Tuesday on the Christmas and New Year’s weekends. The move is being made to make it easier for holiday motorists to get around. —Associated Press

SPAN SUPPORT: The eight massive towers for New York’s new $4 billion Tappan Zee Bridge are finished at last. Work on the 3-mile bridge, one of the largest public infrastructure projects under way in the U.S., began in 2013 and is set to be finished in mid-2018. The bridge will replace the adjacent, 61-year-old Tappan Zee Bridge.

Cuomo SeesPushbackonPortAuthority Plan BY MIKE VILENSKY AND ANDREW TANGEL

New York Gov. Andrew Cuomo faced pushback Thursday over proposals that would give him more power over the Port Authority of New York and New Jersey and state procurement practices. Ahead of the legislative session next month, Mr. Cuomo has floated a plan to appoint an inspector general to the Port Authority and allow the governor to fire his appointees to the agency. Port Authority Chairman John Degnan didn’t mince words in an email sent to two former agency advisers, describing Mr. Cuomo’s proposal as “the most egregious attack on the independence of the PA yet from a governor whose lust for control and power is now so clear.” In an interview, Mr. Degnan

added that his concern is that commissioners would “act on loyalty to the governor” rather than their fiduciary responsibilities if Mr. Cuomo’s legislation passed. A spokesman for Mr. Cuomo said the Democratic governor is no longer pursuing the measure enabling him to fire appointees but is still pushing for an inspector general. “There has been significant corruption and abuse at the Port Authority, and it is undeniable that a reform such as an inspector general would be well advised,” the spokesman said. Mr. Degnan, a Democrat and former New Jersey attorney general who was appointed to the agency by New Jersey Gov. Chris Christie, and Mr. Cuomo have locked horns over funding for a new Port Authority Bus Terminal in Manhattan. The two previ-

MARK LENNIHAN/ASSOCIATED PRESS

Manhattan Blaze Injures 13 People

Gov. Andrew Cuomo, left, and Attorney General Eric Schneiderman ously have been at odds over issues related to two of Mr. Cuomo’s pet projects: overhauls of La Guardia Airport in Queens and New York Penn Station in Manhattan. On a solely New York issue, Mr. Cuomo is also floating a

separate but related proposal to allow him to appoint a prosecutor overseeing state procurement practices. That, too, is facing resistance from other public officials. In a letter sent to Mr. Cuomo and the leaders of the

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Senate and Assembly this week, New York Attorney General Eric Schneiderman painted the proposal as a way for Mr. Cuomo to protect himself while policing other agencies. “Such a scheme violates the fundamental checks-and-balances principle that underlies our state constitution, as it does not establish the independence required of a procurement watchdog,” Mr. Schneiderman, a Democrat, said in the letter. Mr. Schneiderman’s office and the state comptroller’s office already have powers to probe state procurement practices and contracts. A spokesman for Mr. Cuomo, Richard Azzopardi, disputed Mr. Schneiderman’s characterization of the proposal, saying, “This would be in addition to all other efforts and can only be a positive.”


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THE WALL STREET JOURNAL.

NY

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Friday, December 23, 2016 | A9B

GREATER NEW YORK

Acting Out By the Audience Isn’t in the Script BY DARRYN KING Immersive theater productions encourage audiences to explore sets, interact with performers and determine their own experience. Not surprisingly, people sometimes act badly. “A bachelorette party of a dozen girls pulled down the pants of one of my actors who was playing dead,” said Cynthia von CULTURE Buhler, the writer-director of “Speakeasy Dollhouse: The Bloody Beginning,” an immersive murder mystery. “He had to stay dead and couldn’t move. He said it traumatized him.” Audience misbehavior can range from filching props and distracting performers to more serious infractions. Some damage property. Others touch actors inappropriately. “When it goes wrong, it really goes wrong,” said Thomas Pearson, co-founder of Third Rail Projects, whose Brooklyn-based production “The Grand Paradise” sometimes invites intimate contact, such as rubbing suntan lotion onto a performer’s back. Occasionally, actors have had to enact preplanned exit strategies, retreating through secret doors, Mr. Pearson said, when interaction goes south. “Sometimes audiences want to have a little more agency and choice than we’ve made room for,” he said. With blurred boundaries and often erotically charged atmospherics, immersive theater seems ripe for egregious audience behavior. At “Sleep No More,” audi-

Four Seasons Is Heading to New Orleans For Stopover At Brennan’s BY CHARLES PASSY Months after it ended its half-century run at New York’s Seagram Building, the Four Seasons restaurant is readying itself for an already announced return to the city’s dining scene at a new Midtown location. But first, it makes a pit stop in New Orleans. From Feb. 8-11, co-owner Julian Niccolini will bring the Four Seasons—or at least some of its dishes—to Brennan’s, a mainstay in New Orleans for seven decades, said representatives for both restaurants. The pop-up style partnership also will see Mr. Niccolini, a celebrated figure among the New York power brokers who dined regularly at the Four Seasons, serving as host for the four days. The plan is in no way intended to detract from the Four Seasons’ plan to reopen, as early as the fall of 2017, at its new roughly 150-seat space at 280 Park Ave., Mr. Niccolini said. If anything, he hopes the stint in New Orleans will serve to promote the restaurant’s relaunch. “It’s a time to create excitement,” said Mr. Niccolini. During the four days, Mr. Niccolini plans to feature items from the old Four Seasons menu, such as Marylandstyle crab cakes and roast duck. But he also hopes to test some yet-to-be-announced items that are being developed for its new incarnation. Brennan’s, which is famed for Creole cuisine, will offer some of its regular menu items during the Four Seasons stint, too. Nevertheless, Brennan’s co-owner Ralph Brennan said the idea for the partnership was born from his love over many years for the Four Seasons during New York visits. “I had my third date with my [future] wife at the Four

ence members are welcomed with the seductive promise of the show’s unofficial credo, “Fortune favors the bold.” Behind the anonymity of masks, it is easy for audience members to be swept up in the free-roving production’s dark, erotic and bloody take on Shakespeare’s “Macbeth.” Guests can feel emboldened, particularly during scenes where an audience member is taken into a room with one performer, said Evan Matthew Cobb, a “Sleep No More” fan blogger, who has collected performers’ “nightmare stories” about undesirable audience behavior. “That’s when things can go off the rails,” said Mr. Cobb. “People will misinterpret the scene, not realizing it’s scripted drama, thinking it’s personal, and interpret it sexually.” At “Paradiso,” which bills itself as an “interactive escape room” and combines elements of immersive theater and high-pressure puzzlesolving, participants have activated fire alarms, pulled light fixtures off walls and body-slammed through doors, said co-producer Jennifer Worthington. “People think it is really funny to press emergency buttons when they are intoxicated,” she said. At “Then She Fell,” a Third Rail show drawing on the characters and situations of “Alice’s Adventures in Wonderland,” audience members were encouraged to unlock cabinets and rummage through drawers. Some absconding with props is expected, Mr. Pearson said, though he chalks it up to absent-mindedness rather than

PETER J. SMITH FOR THE WALL STREET JOURNAL (2)

When immersive theater goes too far

In ‘Paradiso,’ an audience member delves into an actor to retrieve a clue. The interactions are monitored in the production’s control room.

A Star on Stage, If Ever So Briefly Need for attention disrupts the show—and stings to boot

outright theft. To prevent misbehavior, some productions instruct audiences about proper conduct before the show. And audience ejections do happen, Mr. Pearson said. At “Sleep No More,” blackmasked stage managers keep watch of the action, and surveillance cameras can be spotted among the Victorian

bric-a-brac. At “Illuminati Ball,” a security guard poses as an audience member to supervise the proceedings. Careful casting is imperative when performers will be in close quarters with an audience, said Anya Sapozhnikova, co-creative director of the House of Yes venue, which hosts erotically themed immersive productions.

“They need to have experience enforcing boundaries,” she said. But you can’t cast an audience. “The beautiful thing about immersive theater is that it’s unpredictable,” she said. “We want to maintain some of that unpredictability. But some things shouldn’t be left to chance.”

Audience members sometimes crave the spotlight. At a performance of “Versailles 2016,” staged in a New York apartment, Caitlin Goldie had her monologue interrupted by an audience member who goaded her about her political beliefs. “They seem to have an agenda of proving their intelligence, or trying to test the boundaries of the play.” Occasionally, the misbehavior raises safety concerns. Once, at “Ziegfeld’s Midnight Frolic,” an audience member took a cue from a staged fight and slapped an actor in the face, recalled House of Yes co-creative director Anya Sapozhnikova. “I’ve experienced everything from forcefully being dragged to dance with someone to being slapped on my butt.” —Darryn King

The Tale of Two Restaurants Four Seasons Year Opened 1959

Brennan’s 1946

Signature Dishes

Maryland-style crab cakes, roast duck

Steak Diane, bananas Foster

Of Note

Ended five-decade run at original New York location earlier this year, but is opening new spot likely by end of 2017.

Is under third generation of family ownership; completed $18 million renovation in 2014.

Seasons,” he said. Plans also are proceeding for a new restaurant, dubbed the Landmark Rooms, at the former Four Seasons space in the Seagram Building at 375

Park Ave. Major Food Group, the prominent New York restaurant company behind the Landmark Rooms, said it hopes to open the concept next March.

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A10 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

LIFE&ARTS

TELEVISION REVIEW

EVERETT COLLECTION

New Holiday Tradition: Watch Cable

PARAMOUNT/EVERETT COLLECTION (2)

‘A Christmas Story’ (1983) BY JOHN ANDERSON

WHAT ARE THE HOLIDAYS really about? Food. Family. And television. Could Easter and/or Passover ever be the same without ABC’s annual slog through “The Ten Commandments”? Would people even know it was Thanksgiving without a parade and a dog show on NBC? The new year doesn’t officially start until the ball drop is certified by Anderson Cooper. And for all the hubbub about carols and dreidels and latkes and Santa, what the December holidays mean for many is a nostalgia bath on basic cable. Holidays are about looking back; the nature of media culture is to look forward. But the downside of upscale TV and its attendant luxuries—binge-able programming, DVRs, Netflix, Hulu, HBO, etc.—is that there’s very little anticipation about anything, other than live TV. The Oscars. The Super Bowl. A presidential debate. Christopher Walken playing Captain Hook. Everything else, viewers can see when they want. Availability breeds contempt. To actually sit down and get involved in an old movie, or some other rerun, requires the kind of concentration and expenditure of time that very few people can afford, especially at this time of year. But certain programs can be watched only at this time of year. And that, of course, includes any and all of the 24 hours devoted, once again, to “A Christmas Story” (TBS and TNT, beginning 8 p.m. Saturday), an odd tradition, but less offensive than Black Friday. If you’re wrapping presents, or burning a ham, it’s nice to have Ralphie (the perpetually wide-eyed Peter Billingsley) in the background, scheming about the Red Ryder Carbine-Action 200-Shot Range Model Air Rifle he wants for Christmas (“with a compass in the stock and this thing which tells time”). And making Hanukkah in circa 1940 Indiana even more miserable for at least one of his friends. (“Three blocks away, Schwartz was getting his,” Ralphie recalls, having scapePlease see CABLE page A11

FILM REVIEW | Joe Morgenstern

Torturous Tests of Faith ‘Silence’ follows two Portuguese Jesuit missionaries who travel to Japan in the 17th century IN THE FILMMAKING WORLD a passion project can be prompted by anything from cherished books first read in childhood to obscure oddities that no one wanted to finance. Martin Scorsese’s “Silence” redefines the category. It’s a film that Mr. Scorsese has wanted to make for almost three decades, and passion is its subject—the spiritual passion of two Portuguese Jesuit missionaries who travel to Japan in the 17th century to find their mentor, a priest believed to be an apostate, and living as a Japanese with a Japanese wife. This is filmmaking as an act of devotion, and exploration—not just of the nature of faith but of faith’s obverse, abject doubt. The production is physically beautiful, and evokes the beauties of classic Japanese films, but the substance makes few concessions to conventional notions of entertainment. What the missionaries endure at the hands of their Japanese tormentors—torture, isolation and more torture—is almost unendurably violent, and, at a running time of 161 minutes, punishingly repetitive. The film is based on the novel of the same name by Shusaku Endo; Jay Cocks and the director wrote the screenplay. Andrew Garfield and Adam Driver are the missionaries, Rodrigues and Garrpe. Their performances are obviously not meant to be entertaining, and never venture into so much as the outskirts of enjoyable. But they’re notable, all the same, for their intensity and focus—two modern movie stars giving them-

Top, Andrew Garfield and Shinya Tsukamoto; Above, Liam Neeson in the Martin Scorsese film selves over entirely to roles that require steadfast self-effacement. (Liam Neeson is Ferreira, the mentor they seek.) And though “Silence” is obviously not a genre film in the usual sense, the story functions as a search, or trackdown, if you will, through fascinating territory—and across land- and seascapes photographed with quiet elegance by Rodrigo Prieto. The feudal Japan that the missionaries discover is a savage place where Christianity is seen

as something akin to the plague, an alien infestation to be stamped out wherever it’s discovered, and always by the same methods—threats of death, backed up by pitiless torture, that force Christians into public displays of apostasy. And the Christianity that Rodrigues and Garrpe discover is, as Mr. Scorsese portrays it, a re-enactment of the origins of the faith, with secret gatherings of congregants in caves. For the Japanese faithful, the missionaries’ arrival brings fresh hope, but it also brings anguish for all concerned once the priests are discovered and captured by the forces of a local inquisitor. (He’s played slyly and, dare I say it, entertainingly, by Issei Ogata, a veteran Japanese actor, writer and comedian with what appears to be an irrepressible sense of showmanship.) Rodrigues and Garrpe are tortured, too, hideously and graphically, and further tortured by the knowledge that innocent members of their flock will die unless the priests themselves apostatize. Thus does “Silence“ become a chronicle of a crisis of faith, as well as a test of its audience’s willingness to stay connected and involved. I’ve tried to keep myself out of this review as much as possible until now, but I must say it’s a test I failed. For all the respect that Mr. Scorsese’s film demands, and deserves, I couldn’t wait for “Silence” to be over.  For more review coverage including web exclusives visit WSJ.com/arts.

The WSJ Daily Crossword | Edited by Mike Shenk

Weather Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.

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PRESIDENTIAL SUITE | By Matt Gaffney The answer to this week’s contest crossword is a position at the White House.

20 Affleck flick 21 Ancient Italian 23 •Ramones classic 27 “Already taken Across care of!” 1 Thin nails 28 Piece of silver? 6 Five-star Bradley 29 Charge 10 Israeli author Oz 30 Regarding 14 Snake that’s writing Portuguese for 35 Fussing “snake” 36 •“Very well 15 Candy in a done!” cylindrical 38 Road reversal, in package slang 16 Seamster 39 Conditions Strauss 17 •They’re chewed 41 Talk with your hands by the Quechua 42 Soothe 19 Hot and dry

43 Ludicrous to behold 45 •Hit the detonator 50 It’s entered via the Bab-elMandeb 51 Column type with scrolls at the top 52 Yearn (for) 53 •Impudent fellow 58 For whom a day of the week is named 59 Arch shape 60 Roman district with a famed fountain

Email your answer—in the subject line—to crosswordcontest@wsj. com by 11:59 p.m. Eastern Time Sunday, Dec. 25. A solver selected at random will win a WSJ mug. Last week’s winner: Laurie Dings, Cotuit, MA. Complete contest rules at WSJ.com/Puzzles. (No purchase necessary. Void where prohibited. U.S. residents 18 and over only.)

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PUZZLE CONTEST

61 Result of a schism, often 62 Kings and queens 63 Mystery award Down 1 Email option, for short 2 Milne joey 3 “Scandal” network 4 Police tactic 5 Solution from an optometrist 6 Maker of the Genius Pro 8000 electric toothbrush 7 Picture 8 Bitter bottleful 9 “The Day Dream” painter 10 Mobile location 11 Have coming 12 Of the flock 13 Went along (with) 18 “My word!” 22 Result of a double fault at deuce 23 Worshipers of the sun god Inti 24 Arlo’s dad 25 Williams of “Happy Days” 26 Trane played them

30 Against the clock 31 Barely make 32 One of the Mario Bros. 33 Understanding, in metaphor 34 “Fiddler on the Roof” role 36 Steaming mad 37 Get canned 40 Course taken last 41 Phone insertion 43 “Vogue” editor Wintour 44 Jeanne d’Arc, e.g. 45 They’re grilled in Green Bay 46 Mexican milk 47 Improvised 48 Chopped 49 Symbols of oppression 54 Period of history 55 Mastermind piece 56 Green of “Miss Peregrine’s Home for Peculiar Children” 57 Title for Rod Stewart, as of 2016

Previous Puzzle’s Solution L O N D O N A L M S M A N

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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | A11

LIFE & ARTS

THEATER, FILM, TELEVISION

Tracy Letts: An Entertainment Polymath Keeps Juggling BY JOHN JURGENSEN WHEELER, a new character created by Tracy Letts, has fallen apart at age 50. With a ruptured marriage and nothing to be proud of at work, he’s looking for both a lifeboat and a direction to steer it in “Linda Vista,” a play premiering next spring at Chicago’s Steppenwolf Theatre. “It’s a best-case, worstcase scenario: He’s a version of me at my best, and he’s a version of me at my worst,” says Mr. Letts. Unlike his protagonist, however, the playwright is enjoying “a hell of a good time” at 51 years old. Straddling multiple jobs, genres and geographies, Mr. Letts represents a rare link between entertainment fields. As a writer and actor, he’s a foundational figure in Chicago theater whose work is also in demand on Broadway and in Hollywood. He has a Pulitzer for writing, a Tony for acting, and has lately achieved a sort of career singularity, known for both creating the play “August: Osage County” and playing a hotheaded bureaucrat in TV’s “Homeland.” His route wasn’t direct. After the Oklahoma native established himself in Chicago in the 1990s with his plays “Killer Joe” and “Bug” (both of which traveled and later got made into feature films), he followed a wellworn path to Los Angeles. He landed some acting jobs—a “Seinfeld” episode here, a “Home Improvement” there—but “not enough to do any good,”

ON AIR Tracy Letts and Sarah Jessica Parker in HBO’s ‘Divorce’ Mr. Letts says. After he moved back to Chicago, taking a self-described vow of poverty that full-time theater work tends to require, he wrote his masterpiece, “August: Osage County,” which premiered in 2007 at Steppenwolf, where Mr. Letts has been an ensemble member since 2002. The wrenching yet hilarious drama, about an Oklahoma family devouring itself in the wake of the patriarch’s disappearance, went to Broadway, earned Mr. Letts a Pulitzer Prize, accumulated Tony Awards and grew into a star-heavy movie. It also brought Mr. Letts a financial windfall. The play has been in production somewhere ever since. Other plays of his have also had long shelf lives. “Superior Donuts” from 2008, about a nostalgic shop owner and his gumptious young employee, has been adapted into a CBS sitcom due on Feb. 2. The screen roles Mr. Letts once hunted in L.A. came rolling in once he stopped chasing them. A creator of “Homeland” saw his seeth-

ing performance as George in a 2012 Broadway revival of “Who’s Afraid of Virginia Woolf,” and recruited Mr. Letts for a role. His turn on the cable series, as a bitter senator who takes over the CIA, spanned two seasons. He appeared in five movies released in 2016, including “Indignation” and “Christine.” In the first episode of the new HBO comedy “Divorce,” led by Sarah Jessica Parker, Mr. Letts’s character gets shot by his second wife (Molly Shannon). But instead of killing him off as planned, the show’s producers invited Mr. Letts to stay at least through season 2. Mr. Letts jokes about being a go-to actor for the role of “the a—hole in a suit.” But he brings an ease to his characters (even as they blow their stacks) that renders his performances “secretly flashy,” says Dexter Bullard, a Chicago-based theater director who met Mr. Letts in 1990. He first directed Mr. Letts in two short plays co-starring Michael Shannon, another Chicago actor turned film star.

“On stage Tracy is relaxed. He brings you toward him. Later, when things get active—like in the third act of ‘Virginia Woolf’—the emotional stuff comes uncorked and you see the power,” says Mr. Bullard, the director of “Linda Vista.” For now, Mr. Letts is opting for TV and movie roles, which are quicker jobs to complete than stage commitments. He says he’s taking an indefinite break from acting in plays, at least those of the knock-down, drag-out variety. “‘Virginia Woolf’ really kicked my a--, and made me not want to go out there. It was that hard,” he says. (In return, however, the play brought him a Tony and introduced him to his current wife, actress Carrie Coon, who co-starred as Honey.) Writing has taken precedence. After creating six plays over 25 years, Mr. Letts has written three in the last year or so, including “Mary Page Marlowe,” the story of a woman told through multiple stages of her life. The ideas in “Linda Vista” deal with the way people—specifically straight, white, middle-aged men—struggle to pin down an identity for themselves. The manner in which Wheeler blunders through social and sexual minefields will probably change somewhat in rehearsals, Mr. Letts says, given the identity-politics themes of the presidential election. “Tracy keeps saying, ‘It’s just an adult comedy.’ Yeah, right. Just like ‘August: Osage County’ is a family play,” Mr. Bullard says.

Continued from page A10 goated his buddy after that F bomb he dropped in front of his father.) Another tradition worth getting into is the Turner Classic Movies “Thin Man” marathon (8 p.m. Friday). Unlike a lot of ’30s-’40s chestnuts, these six films, all inspired by the one Dashiell Hammett novel and starring William Powell and Myrna Loy, hold up splendidly; the wit is sharp, the dialogue still sparkles. The first film takes place around Christmas time, so there’s a bona-fide holiday hook, but the real connection is romantic: Nick and Nora Charles may banter, but they never bicker, and the pickled sleuths are among the more effervescent couples on film. The first installment (the best) starts at 8, the last at 5:15 a.m., so TCM is basically inviting viewers to set the DVR. Two holiday classics with a twist—the 1951 “A Christmas Carol” (a.k.a “Scrooge”) with the delightfully demented Alastair Sim, and “Scrooged” (1988) with an equally askew Bill Murray—are a bit elusive this year. The Sim film aired on TCM Thursday night at 11:30 (but, psssst, it can be

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found on YouTube in its entirety…) and “Scrooged” is on at 9:55 p.m. Saturday and Sunday on Freeform, which used to be the Family Channel, Fox Family and ABC Family, but seems to be available through most cable providers. What would the season be without “It’s a Wonderful Life”? Less depressing, some might say—Frank Capra’s postwar classic (8 p.m., Saturday, NBC), like many of the director’s films, paints a despairing portrait of an America populated by characters who are redeemed only through some sort of blind chance or, in this case, divine intervention. (See also Capra’s “Meet John Doe,” 8:15 a.m. Saturday, or 3:30 a.m. Monday, TCM.) The ending, as many know, is deliriously happy, and because of that—and the fact that the copyright lapsed back in the ’70s—the film became a ubiquitous holiday staple for two decades. Now in the possession of NBC, it airs only a couple of times a year. It’s a masterwork, regardless of interpretation. And over at AMC? It’s a two-night Clint EastwoodJohn Wayne extravaganza! To quote the song: Do they know it’s Christmas? Ah well, it’s better than 48 hours of “The Walking Dead.”

What would the season be without ‘It’s a Wonderful Life’?

FILM REVIEW | Joe Morgenstern

The Monster (voiced by Liam Neeson) and Lewis MacDougall shows up at his bedroom window one night—at 12:06 a.m., for some reason, instead of 12:07 as in the book—we know right away that he’s part of Conor’s dream life. But so does Conor, interestingly enough. He’s a contemporary kid who understands such things, within limits, so he argues with his towering visitor frequently, insisting that the stories the monster tells don’t help him because stories aren’t real. But the stories are real enough to give Conor hope for his mother’s recovery and stirrings of courage for himself. He begins to go

along with them, just as we do, though perhaps for different reasons; we’re under the spell of the animated art, which summons up shimmering visions of bygone eras from the Middle Ages to the Industrial Revolution. (Art plays a central role in Conor’s life.) But we’re equally under the spell of the mother-son tale, which is told with great intimacy and tenderness, and photographed, by Oscar Faura, with extraordinary attention to detail. It’s impossible to say which is more moving, Conor grasping at every straw that suggests his mother will recover or

clutching her out of desperate fear that she won’t. This is Mr. Bayona’s third feature; it confirms the sensitivity and impressive technique that distinguished his previous film, “The Impossible” (in which a mother played by Naomi Watts is torn from her husband and sons by a tsunami in Thailand). One surprise in the script, which Mr. Ness adapted from his novel, is the New Age willingness of the adults around Conor to indulge his destructive behavior once they understand that his anger is the result of his mother’s illness. The kid isn’t punished when he breaks things because, as grown-ups say on two occasions, what would be the point? Another surprise is how the monster eventually reveals himself to be not only a product of Conor’s imagination but a therapist in disguise, dispensing psychological truths along with those empowering stories. The therapeutic syrup flows heavily at times, but that’s the nature of the beast; if you’re visited by a monster, best he be an enlightened one.

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IF YOU WANTED to be clinical about “A Monster Calls,” you could call it a fantasy about anger management. But that’s the last thing you’ll want to be while you’re watching J.A. Bayona’s exquisite screen version of the children’s book by Patrick Ness. (After it’s over is another matter.) And do watch it on a big screen to take in all the beauty. A couple of flawless live-action performances share the screen with lovely animation, and with whatever digital magic spawned the monster—who looks like a tree, has molten sap, biteless bark, Liam Neeson’s voice and a face that reminded me of Boris Karloff. What spawns the monster in the context of the story is a schoolboy’s rage. Twelve-year-old Conor O’Malley (Lewis MacDougall) has more than he can cope with in life. His beloved Mum (Felicity Jones) is dying of cancer, his Grandma (Sigourney Weaver) is an icy scold, he has recurrent nightmares and he endures regular beatings by bullies at school. When a monster

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THE WALL STREET JOURNAL.

A12 | Friday, December 23, 2016

SPORTS HEARD ON THE FIELD

Duke Suspends Allen For Tripping Incident

JONATHAN BACHMAN/GETTY IMAGES

Duke men’s basketball coach Mike Krzyzewski suspended star guard Grayson Allen indefinitely on Thursday, the morning after he tripped Elon’s Steven Santa Ana in a 72-61 win for the fifth-ranked Blue Devils. During the game, officials reviewed the play—in which Allen was called for a foul, then after the whistle stuck out his right leg and sent Santa Ana to the ground—and issued a technical foul. “The incident was unacceptable and inexcusable,” Krzyzewski said in a statement. In two games last February, against Louisville and Florida State, Allen was seen tripping opposing players, causing a national uproar. In the first incident, he was whistled for a flagrant foul. The second time, nothing was called although the Atlantic Coast Conference issued a reprimand afterward. Allen, a junior, entered this season as a favorite for National Player of the Year honors. He rose to stardom at the end of his freshman year when he came off the bench in the 2015 national championship game to lead Duke to the title. —Andrew Beaton

LSU running back Leonard Fournette is skipping the Tigers’ Citrus Bowl game against Louisville on Dec. 31 to prepare for the NFL Draft.

NCAA FOOTBALL | Jason Gay

Beware the Zombie Bowls!

North Carolina again faces an NCAA charge for providing improper extra benefits tied to its multi-year academic fraud scandal. The school on Thursday released a third Notice of Allegations from the NCAA that outlines rules violations. The notice, dated Dec. 13, includes rewording a charge that had been removed from the first version filed in May 2015 that was tied to athletes’ access to the irregular courses on the Chapel Hill campus. It also restores a reference to football and men’s basketball players using problem courses to help maintain eligibility, which was removed before the second version filed in April. UNC still faces five charges, including lack of institutional control. Athletic director Bubba Cunningham said on Thursday that the school had “serious concerns” about a process he said “has gotten off track.” —Associated Press

T-B: CHUCK BURTON/ASSOCIATED PRESS; JACOB KUPFERMAN/CSM/ZUMA PRESS

North Carolina Faces Extra Benefits Charge

College football needs to admit what we all know: They’ve turned their bowl games into zombie bowls. If you had millions on the line for you in the NFL, would you risk it in a zombie bowl? We now have a playoff, which we wanted, and we all pretty much seem OK with a playoff—even one that has again scheduled its semifinal round on New Year’s Eve, in a wicked plot to destroy the cheap sparkling wine hangover industry. Sometime in the not-too-distant future, we will get an expanded playoff, six teams or eight teams, or even more, because college sports are run by TV networks, and TV networks love themselves some hot sizzling playoff action. Some of the bigger bowls are hanging around in a rotation in which they will serve as the stage for playoff games, but they’re diminished as events, too. Even if they go on forever, they’re effectively walking dead. They’re zombie bowls just like the rinky-dink zombie bowls. The zombie bowl predicament was well-stated in a Journal story by my colleagues Matthew Futterman and Jim Chairusmi. Please know Alabama coach Nick Saban and his Fabulous Hair seems to agree with the premise: the playoffs have rendered all but a few bowls as irrelevant. “We kind of created this trend,” Saban and his Fabulous Hair said to reporters the other day. “As soon as we had a playoff, we were going to minimize the importance of all other bowl games. “I’m not saying whether it’s good or bad, it kind of is what it is,” Saban said.

“I’m not saying whether it’s good or bad, it kind of is what it is” is a spectacular piece of equivocation. I would give that line a mustard blazer and induct it into the Equivocation Hall of Fame. But I digress. Bowls were endangered the moment the playoff was created, but this issue perked up this week because a couple of high-level college players came out and said they

A playoff has rendered bowls near-irrelevant so it’s tough to chastise a player for opting out. were going to pass on their zombie bowl engagements because they wanted to focus on prepping for the NFL draft. These decisions—by LSU running back Leonard Fournette and Stanford running back Christian McCaffrey—elicited a ruckus from people who love but maybe romanticize big-time college sports a bit too much, and believe a player has an obligation to his school and his teammates to play the whole season. If this means playing in the Mel’s Improved Roach Killer Morning After Christmas Bowl, then for heaven’s sake, he must play in the Mel’s Improved Roach Killer Morning After Christmas Bowl. I understand why folks feel this way. In an ideal world, it would happen. But college sports in 2016 is a far less romanticized place, for one reason: We see the money. Money is everywhere in the bigtime college sports of football and

men’s basketball. We see the tens of millions (or more!) paid to conferences—and bowl committees—to deliver product. We see the millions paid to coaches (Florida State coach Jimbo Fisher just signed an extension that Tallahassee Democrat said includes an annual thing called a “contract completion benefit,” for which Fisher’s agent should take a bow, whenever the agent stops laughing.) We see a multibillion-dollar universe in which the adults in the suites and sidelines get paid— and the talent on the field does not. You can’t un-see this cash. And the moment conferences schools started chasing—and hoarding—the megabucks, they lost any upper hand in this conversation. Yes, yes, yes, there is a form of compensation: a college scholarship is nothing to sniff at, and there are many students playing sports, including at the Division I level, who think that’s a very nice deal. But if you are going to play at the next level—professional—it’s natural you’re going to start thinking of your own self-interests. This is what Fournette and McCaffrey are doing: making a calculation that their self-preservation before the 2017 NFL Draft is worth more than their respective time in the Buffalo Wild Wings Citrus Bowl and the Hyundai Sun Bowl. Why is it thinking in your own self-interest is only an outrage if a player does it? Coaches think in their own self-interests so often, it’s a laughable ritual—we are accustomed to the regular denials and half-denials and escapes of coaches under contract to richer gigs. (Twice in the past five years, my own school, Wisconsin, has been coached in bowl games by its athletic director, Barry Alvarez, af-

ter coaches skipped before season’s end for new jobs.) Schools think selfishly on everything from shifting conferences to scheduling (Night games! Friday games! Tuesday games!) not at the behest of students or alumni, but TV money. None of this is a secret. And one of the most interesting things in the matter of Fournette and McCaffrey (and we should point out that Fournette’s case is a bit different, since he’s coming back from injury) is that the public didn’t really get that steamed. The yappers on sports TV and radio tried to make hay of it, but there was only so much hay to be made. The public didn’t get that steamed because they see the money. Which brings us back to zombie bowls. There seems to be little doubt that the inconsequentiality of these games played a factor in both Fournette’s and McCaffrey’s decision. If either was involved in a playoff, their decision may have been different. Fournette or McCaffrey are just acknowledging the obvious: these bowls are exhibitions. Is there anyone out there who truly considers the Buffalo Wild Wings Citrus Bowl essential entertainment in 2016? The Buffalo Wild Wings Citrus Bowl might not even be the most exciting thing to watch inside a Buffalo Wild Wings. Pointless bowls with goofy titles aren't a new phenomenon, of course. But the playoff has drawn a stark line between what college football games really mean something, and what ones don't. It created a new wave of revenue but also zombies. And I don’t know what you learned in school, but sometimes it’s wise to stay away from zombies.

THE COUNT

JARED GOFF ACTUALLY IS NOT HISTORICALLY AWFUL Of the quarterbacks selected in the top-10, who had the poorest rookie seasons, six of 11 went on to have successful careers. In addition to Jones and Bradshaw, whose adjusted passer ratings were 59 and 64, respectively, Eli Manning (68) has won two Super Bowls, Matthew Stafford (72) threw 41 touchdown passes in his third season and Troy Aikman (74) is also enshrined in Canton. The player ranked lowest, Alex Smith (49 in 2005) has won 70% of his games since the start of the 2011 season. So Goff’s chances of becoming a franchise QB still seem no worse than they were when he was initially drafted by the Rams. He’ll also have a chance to reset his career with a new head coach and offensive coordinator, since the team recently fired Jeff Fisher. Of course, he’ll need a better supporting cast of players, too. The Rams (4-10) are hamstrung in that regard since they traded next year’s first- and third-round picks to the Tennessee Titans as part of the package to move up in the draft to select Goff. —Michael Salfino

Rough Starts Quarterbacks selected in the top-10, who had the poorest rookie seasons. Rate+ is passer rating adjusted for the year played, with 100 as average. PLAYER/TEAM/YEAR

TD

INT

RATE+

Alex Smith SF 2005 Ryan Leaf SD 1998 Bert Jones BAL 1973 Jared Goff LAR 2016 Terry Bradshaw PIT 1970 Richard Todd NYJ 1976 Eli Manning NYG 2004 Joey Harrington DET 2002 Matthew Stafford DET 2009 Troy Aikman DAL 1989 Blake Bortles JAX 2014

1 2 4 4 6 3 6 12 13 9 11

11 15 12 5 24 12 9 16 20 18 17

49 54 59 63 64 68 68 71 72 74 74

Source: Pro-Football-Reference

WSJ

Rams quarterback Jared Goff has struggled this year.

KEVIN SULLIVAN/THE OC REGISTER/ZUMA PRESS

The Rams’ return to Los Angeles this season hasn’t gone as advertised. The poster boy of the relaunch, rookie No. 1 overall pick Jared Goff, has struggled in his first five starts at quarterback with many critics already writing him off as a draft bust. The criticism may be a bit premature. It’s true that Goff has been bad. His passer rating adjusted for the year is 63 on a scale where 100 is exactly league average. That’s third worst since the 1970 AFL-NFL merger for a rookie top-10 draft pick with at least five starts. It barely tops the biggest bust in NFL history, Ryan Leaf, whose career crashed and burned just down the coast in San Diego in the late 1990s. But Goff’s rookie performance so far this year also ranks right between Bert Jones and Terry Bradshaw. Bradshaw, of course, went on to have a Hall-of-Fame career, as a linchpin of the famed Pittsburgh Steelers dynasty that won four Super Bowl titles. Jones rebounded from his terrible rookie season with the Colts to become the NFL’s MVP just three seasons later, in 1976.


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Friday, December 23, 2016 | A13

THE WALL STREET JOURNAL.

OPINION Obama’s Midnight Express Barack Obama isn’t known for humility, though rarely has his lack of grace been more on disPOTOMAC play than in WATCH his final hours By Kimberley in office. The A. Strassel nation rejected his agenda. The president’s response? To shove more of that agenda down the nation’s gullet. Notice the growing and many ugly ways the Obama administration is actively working to undermine a Donald Trump presidency. Unnamed administration sources whisper stories about Russian hackers to delegitimize Mr. Trump’s election. These whispers began at about the same time Hillary Clinton officials began pressuring electors to defy election results and deny Mr. Trump the presidency. How helpful. Trump transition-team members report how Obama officials are providing them with skewed or incomplete information, as well as lectures about their duties on climate change. (No wonder Mr. Trump is bypassing those “official” intelligence briefings.) The Energy Department is refusing to provide the transition team with the names of career officials who led key programs, like those who attended U.N. climate talks. Sen. Ron Johnson recently sent a letter to President Obama

voicing alarm over “burrowing,” in which political appointees, late in an administration, convert to career bureaucrats and become obstacles to the new political appointees. But perhaps nothing has more underlined the Obama arrogance than his final flurry of midnight regulations. With each new proposed rule or executive order, Mr. Obama is spitefully mocking the nation that just told him “enough.” The technical definition of a midnight regulation is one issued between Election Day and the inauguration of a new president. The practice is bipartisan. George W. Bush, despite having promised not to do so, pushed through a fair number of rules in his final months. But Jimmy Carter and Bill Clinton were more aggressive, and Mr. Obama is making them look like pikers. Mr. Obama has devoted his last year to ramming through controversial and far-reaching rules. Whether it was born of a desire to lay groundwork for a Clinton presidency, or as a guard against a Trump White House, the motive makes no difference. According to a Politico story of nearly a year ago, the administration had some 4,000 regulations in the works for Mr. Obama’s last year. They included smaller rules on workplace hazards, gun sellers, nutrition labels and energy efficiency, as well as giant regulations (costing billions) on retirement advice and overtime pay.

Since the election Mr. Obama has broken with all precedent by issuing rules that would be astonishing at any moment and are downright obnoxious at this point. This past week we learned of several sweeping new rules from the Interior Department and the Environmental Protection

The goal is to issue more rules than the new administration could ever repeal. Agency, including regs on methane on public lands (cost: $2.4 billion); a new anti-coal rule related to streams ($1.2 billion) and renewable fuel standards ($1.5 billion). This follows Mr. Obama’s extraordinary announcement that he will invoke a dusty old law to place nearly all of the Arctic Ocean, and much of the Atlantic Ocean, off limits to oil or gas drilling. This follows his highly politicized move to shut down the Dakota Access pipeline in North Dakota. And it comes amid reports the administration is rushing to implement last-minute rules on commodities speculation, immigrant workers and for-profit colleges—among others. Any action that is rushed is likely to be shoddy, especially if it’s from the federal government. The point is for Mr. Obama to have his way

and to swamp the Trump administration with a dizzying array of new rules to have to undo. That diverts manpower from bigger and better priorities. President Obama is hoping this work will prove too much and his rules will stand. He’d be making a good bet. George W. Bush promised to undo last-minute Clinton regulations. Yet a paper done in 2005 by Jason M. Loring and Liam R. Roth in Wake Forest Law Review found that a whopping 82% were left to stand. Then again, a Republican Congress seems ready and willing to invoke the Congressional Review Act, which allows legislators to reject rulemaking. More important, Mr. Trump and his team seem to understand that Americans are angry at Mr. Obama’s tendency to rule like an autocrat. They also surely know how damaging many of these Obama parting gifts (particularly energy rules) will prove to their own agenda. A Trump administration could send a powerful message to future presidents and build public support by highlighting the “midnight regulation” phenomenon and then making it a priority to ax every final Obama order. Single them out. Make a public list. Celebrate every repeal. That would be as profound a rebuke to the Obama legacy—a legacy based on abuse of power—as any other. Write to kim@wsj.com.

Why This Rabbi Loves Christmas HOUSES OF C h r i s t m a s would be nothing new, no sur- human interventions are avail- of a particular rabbi or acadWORSHIP f a s c i n a t e s prises. able? Given that life is not emy. The forest is too often By Michael Gotlieb

me. I’m drawn to its history, its color, its atmosphere, its music. And, of course, I’m drawn to the fact that Jesus was a Jew. He was born a Jew, lived as a Jew and died a Jew. If for nothing else, I can appreciate Christmas as the celebration of one Jew’s epic birthday. The 20th century philosopher and theologian Martin Buber would often begin lectures to ecumenical gatherings by stating that a key difference separating Jews and Christians is whether Jesus was the messiah. Christians believe he was, and they are awaiting his return. Jews believe that the messiah hasn’t yet come. His suggestion: Let’s all pray for the messiah— Christians and Jews alike. When he arrives, we’ll ask if he’s been here before. While I am a religious Jew, and Judaism unequivocally promotes belief in a messiah, the concept sometimes puzzles me. My difficulty with the notion of a messiah is not an issue of faith—that’s too personal to argue. The question is if the messiah were to appear, or reappear, what would he say that hasn’t already been said? I assure you that there

The messiah would likely declare that we shouldn’t treat fellow human beings like objects and that we shouldn’t steal from one another. To bring peace to the world, the messiah would certainly demand, “Love your neighbor as yourself,” “Don’t murder—especially in the name of God,” “Don’t commit adultery,” and “Don’t bear false witness.” He would no doubt add that personal and universal redemption requires that we not gossip, manipulate others or act deceitfully, and that we should channel and refine our base impulses. This would help us become kinder, humbler and more human. All of us are well familiar with these timeless moral instructions, the result of our affiliation with churches and synagogues. Such lofty principles are hard-wired into the universal Judeo-Christian ethic. A messiah need not repeat them. Even if his message isn’t fresh, many idealize the messiah as a personal redeemer, a force capable of divine, superhuman power. Who hasn’t prayed for miraculous intervention? Whether it be for help to overcome a personal obstacle or for a loved one to survive a deadly disease. What is one to do when no more

merely physical, we all have a spiritual dimension that requires attention. Humans naturally search for a superhero—something to apprehend the bad guy, to stop the disease from spreading, to change human nature

Christians and Jews await the messiah. The only debate is if he’s been here before.

lost amid the trees. So while Christians ask, “What would Jesus do?” Jews ask, “What does Jewish law say?” That’s completely understandable from a traditional Jewish perspective, and it is often praiseworthy. But, I wish Jews would learn from their Christian cohorts and ask directly, “What would God say?” Just as the Prophet Micah did by asking, “What does God require of us?” Christmas and its celebration of the birth of Jesus compels me to think about the concept of a messiah. I am grateful to my Christian neighbors and friends. Through their religious holy day, I am better able to confront and clarify my own religious convictions and theological certitudes. Like a brightly lighted Christmas tree, Christianity dispels a lot of darkness, theological as well as moral. In its glow, it challenges Christians and non-Christians alike to consider that which is transcendent, eternal and greater than us all. Merry Christmas indeed.

and the physical order of the universe and save the day. A messianic belief can help fill that yearning. It has for me. Yet the issue isn’t necessarily the messiah. To think so is to take one’s eye off the theological ball. The real issue is God. The messiah can become a veil, it can separate us from the primary source. I’d prefer to blame or praise God directly and not a messianic filter. Within Judaism, rabbinic law has become a potential veil between the individual and God. Rulings on Jewish law are too often engulfed in a Rabbi Gotlieb is the rabbi of labyrinth of hairsplitting de- Kehillat Ma’arav, a Conservabate. Not uncommonly its re- tive congregation, in Santa solve depends on the authority Monica, Calif.

Is Communism Cool? Ask a Millennial By Andrew Clark

M

illennials are one of history’s luckiest generations. We were fortunate to be born around the end of the Cold War a quarter century ago, when the tyrannical Communism embodied in the Soviet Union came tumbling down, also knocking socialism down a few pegs along the way. We have grown up in a world where, for the most part, economic and personal freedom are the rule rather than exception. And apparently we hate it. How else does one explain why so many millennials seem to long to live in government-run economies, or worse? A Gallup poll in June 2015 found that almost 70% of U.S. millennials would be willing to vote for a socialist presidential candidate. Even more shocking, a poll conducted before this year’s presidential election by the Victims of Communism Memorial Foundation found that barely half of millennials believe “Communism was or is a problem.” The same poll found that a quarter of millennials hold favorable opinions of Vladimir Lenin, while 18% think favorably of Mao Zedong. More than

10% even have positive feelings about Joseph Stalin. Never mind that these men were responsible for the deaths of tens of millions and the impoverishment of hundreds of millions.

The U.S.S.R. broke up 25 years ago—ancient history for some. These polling numbers are frightening—especially when the Communist-ruled and socialist nations in the world today, from North Korea and Cuba to Venezuela, show so clearly how such systems invariably lead to repression and declining standards of living for their populations. Part of the problem is that many millennials see these ideologies as represented by Scandinavian countries, an ignorant view fed them by candidate Bernie Sanders, among others. As Harvard and Stanford visiting professor Daniel Schatz (a Swede) wrote in Forbes in February, “Sweden began to reverse its economic model during the 1990s” through privatization and deregulation. Danish Prime Minister Lars Lokke Rasmussen

was even more unequivocal in a speech earlier this year: “Denmark is far from a socialist planned economy. Denmark is a market economy.” Scandinavian economies are in some ways freer than those in the U.S. The Heritage Foundation’s Index of Economic Freedom gives these countries high marks for limited regulatory burdens and for corporate tax rates lower than in the U.S. In many ways it’s easier to start a successful business and take part in economic life in a Scandinavian country than it is in America. Millennials who wish to see a socialist or Communist Party-ruled nation in action should look to Venezuela, Cuba and North Korea. Venezuela’s current troubles make daily headlines. The country is crippled by inflation and shortages of basic goods, and the government takes more control over the economy each day. No wonder even millennials want to get out. A poll conducted by the Venezuelan market analysis firm DatinCorp in September found that 69% of youths there wanted to emigrate. As Venezuelan blogger Maria Antonia Marturet recently observed, the country’s millennials

are fleeing because, “They wanted to live in a place where they could go out at night without being kidnapped, where they could eat whatever they wanted without queuing, and where they could eventually have babies without the stress of not finding a hospital where to give birth.” At least Venezuelan millennials still feel somewhat able to speak up. Communist Cuba arrests political dissidents. In North Korea, speaking against a regime that imposes starvation on its population can mean joining what the United Nations estimates are as many as 120,000 political prisoners kept in prison camps. Young people living in Communist and socialist countries today don’t deserve U.S. millennials’ envy, but their concern and pity. There was nothing to admire about the Soviet Union, and there is even less to admire in countries that seek to perpetuate its failed philosophy at the expense of liberty and prosperity. Our generation is lucky it hasn’t learned this firsthand—and let’s hope we never have to. Mr. Clark is the executive director of Generation Opportunity.

www.ebook3000.com

BOOKSHELF | By Allan Massie

Shepherds Still Seeking a Sign Conclave By Robert Harris (Knopf, 286 pages, $26.95) Robert Harris is a master storyteller and accomplished craftsman who, like Graham Greene and Somerset Maugham, marries a searching moral imagination to his rare ability to tell a compelling tale. He understands that people read novels for pleasure, not under compulsion; any student of writing would benefit from considering how he paces and directs his narrative. Mr. Harris has written many fine novels: “Fatherland” (1992), an ingenious exercise in counterfactual history; “An Officer and a Spy” (2013), his novel about the Dreyfus case; and his marvellous Roman trilogy following the career and intrigues of Cicero. But I am inclined to think that “Conclave” is his best yet. As the title indicates, it tells the story of a papal election, only a few years hence. No matter what his subject matter, Mr. Harris’s concern is always how people behave in difficult or dangerous situations and how they react to moments of crisis. An accomplished political journalist in earlier years, he writes novels that are in the fullest sense of the word political, because he is concerned to examine the nature of power, and its use and abuse. Novelists have made rich use of elections, whether parliamentary, presidential or restricted to a narrow electorate (as in C.P. Snow’s 1951 “The Masters,” which takes place in a university setting). Elections are full of drama, aspiring and disappointed ambition, shifting alliances, resentments, enmities, even idealism. For Mr. Harris’s characters, the 118 members of the College of Cardinals, there is another element: All are listening, or believe they are listening, to the voice of God. All engage in prayer, seeking guidance from the Almighty. Mr. Harris is not, I think, a Roman Catholic and seems indeed to be of a secular turn of mind, but he does full justice to his cardinals’ faith, even while showing that some may be self-serving, some duplicitous. The novel begins with the sudden death of the pope, a reformer at odds with the Vatican hierarchy. He dies of a heartattack a few hours after a difficult meeting with a senior cardinal—a Canadian—whom he may or may not have dismissed from his office. There is a suggestion that in his last months the pope, who bears some resemblance to the present Holy Father, may have lost faith, not in God, but in the Church. The central figure of the novel is Lomeli, the dean of the College of Cardinals, through whose eyes all the action is presented. Lomeli is a good man, but a dry one, who became dismayed when the pope who he admired and served faithfully told him he was not “a shepherd” but “a manager.” Dismayed or not, as dean it is his task to coordinate the conclave.

‘I expect to die in my bed, my successor will die in prison and his successor will die a martyr.’ What pope can lead the Church in such an age? The cardinals assemble. The last to arrive, unexpected because unknown, is Benítez, a Filipino and the archbishop of Baghdad. He was the late pope’s last appointment made “in pectore”—that is, without any public announcement, due to the precarious and dangerous situation in his diocese. But, his credentials having been checked, he is made welcome, and Lomeli soon realizes that though none of the other cardinals know him well, his work in the Philippines and Africa has given this mild and modest man a reputation as an extremely holy man. The conclave is divided between traditionalists and modernizers. The leader of the former is Cardinal Tedesco, Patriarch of Venice, born to a poor peasant family in Basilicata. He has “a curious way of eating. He would hold his plate in his left hand and empty it with great rapidity, using a fork in his right” and while glancing around “as if fearful that someone might be about to steal his food.” Tedesco, deploring all modernizing changes since the Second Vatican Council, is an impressive and surprisingly endearing character. Many present in the conclave would like to see an Italian pope again, but the Italians are divided. An early favorite is the impressive Nigerian Cardinal Adeyemi—attractive as the first black pope but rigidly old-fashioned in his moral stance. He emerges as leader in the early ballots, but a papal election is a steeplechase: Will he fall at the next fence? Then there is the Italian liberal Bellini, an intellectual and a reluctant candidate, as well as that Canadian Tremblay, who is ambitious but—perhaps?—unscrupulous. Lomeli, more and more disturbed, ends up engaging in what amounts to detective work. What he discovers brings on a possibility that alarms him: He may be elected himself. Mr. Harris’s plotting is deft; there are as many ingenious twists as in an Agatha Christie novel. Yet all are credible, and the sense of tense seriousness is never disturbed. Disturbance comes from outside, from the world beyond, from news of which the cardinals are supposed to be excluded. Yet the disturbance is so terrible, of such a nature, that the conclave cannot be kept in ignorance. It calls to Lomeli’s mind the foreboding words of the (real) American prelate Francis George: “I expect to die in my bed, my successor will die in prison and his successor will die a martyr in the public square.” Who could be the right man to lead the Church in these new and terrible times? The horror of these events tilts the balance, determining the outcome of the eighth ballot. At last the white smoke may ascend into the Roman sky and the city and the world be told “Habemus Papam.” Even then, Mr. Harris provides us with a final, significant twist, just the right side of credibility. “The Holy Spirit had done its work.” “Conclave” can be read as a thriller. It is indeed a thriller and a very good one, written with the authority that comes from the combination of scrupulous research and a sympathetic imagination. So it is more than a thriller; it is a novel of ideas, and one in which the author’s characters are tested, some diminishing, others growing as the story unfolds. I couldn’t imagine this theme being better treated. Mr. Massie’s most recent book is the novel “End Games in Bordeaux.”

Coming in BOOKS this weekend The clown prince of modernism • Pearl of the Arab kitchen • The first coalition of the willing • When spies can’t spell • The physics of nothing • Mexico’s mestizo master • The Buddha’s brilliant deception • & more


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THE WALL STREET JOURNAL.

A14 | Friday, December 23, 2016

OPINION

T

REVIEW & OUTLOOK

LETTERS TO THE EDITOR

The FDA Empire Strikes Back

Infrastructure—Public Good vs. Boondoggle

his year produced no shortage of sur- cal benefit or improved health outcomes. prises, and a rare happy one was Food But the walking test is a bogus measure. Dr. and Drug Administration approval of a Woodcock approved the drug because it promuscular dystrophy drug that duced dystrophin, a missing The bureaucracy is had been singled out for deprotein. Performance on a struction by agency staffers. walking test had nothing to do talking down a drug But the bureaucracy is now with it, though the trial boys the agency approved. mounting a misinformation did walk nearly two football campaign, and as a result infields farther than those in a surers are denying coverage control group. The drug can to some patients. slow the disease of boys who no longer walk, In September the FDA approved eteplirsen, even if it’s more effective the earlier it’s started. now marketed as Exondys 51. The treatment Sarepta must have more detailed data on how slows the decline in patients with Duchenne the drug helps preserve pulmonary function, muscular dystrophy, and 10 of 12 boys in a trial and the company should let it rip. still walk after four years of treatment. Janet That might help twins Jack and Nolan Willis, Woodcock, who runs FDA’s drug evaluation the two patients who lost the ability to walk center, approved the therapy after a brawl with during Sarepta’s trial. The boys have continued reviewers, who demanded a placebo trial that infusions every week for more than five years, would be unethical and impossible to fulfill for which allowed Sarepta to collect data on boys a rare pediatric disease. whose condition had progressed further. The i i i Willis twins testified at an April FDA meeting But at the same time the agency released that treatment had helped them retain abilities some 100 pages of documents trashing the like picking up books and brushing their teeth. drug’s data, in what looks like a case of bureau- Their hearts and lungs are also performing betcratic revenge to hang approval solely on Dr. ter than expected. Woodcock. Then FDA wrote a label that says Get this: The twins have so far been denied clinical benefit “has not been established,” no coverage for a drug they’ve spent their lives doubt to scare off insurance companies and trying to get approved. An initial denial letter doctors. The label omits that the drug was ap- we’ve reviewed calls the drug “not medically proved because of an effect that is “reasonably necessary,” which must be news to the boys and likely” to predict clinical benefit. their family. Excellus, a BlueCross BlueShield A member of the committee that advised affiliate in New York, is also only covering paFDA on Exondys 51, Aaron Kesselheim, la- tients who can walk, according to its policy onmented FDA’s approval decision in the Journal line. The company declined to comment on speof the American Medical Association. Dr. Kes- cific cases. selheim has no known experience treating The cost of the drug is high: Price is based Duchenne patients, and it shows: He says the on weight and can run $300,000 a year. Yet treatment targets a nonsense mutation, which fewer than 2,000 patients in the U.S. are amenait does not. The treatment is for a different ble, which means insurers won’t have an influx mutation known as a deletion. He also calls of beneficiaries. Care for Duchenne patients in the disease “usually” fatal when the death their late teens or early 20s is already expensive, rate is 100%. from hospitalizations to cardiac medication, so More astounding is that John Jenkins, direc- insurers will pay in any event. tor of the office of new drugs, called out the Insurers are usually hypersensitive to avoid drug’s developer in October at a conference: public shaming campaigns, but here they don’t “path taken by Sarepta NOT a good model for seem too concerned. That’s probably because the other development programs,” according to his reporters who cover FDA have taken the side of Power Point slides on FDA’s website. One slide the reviewers and insurers. Thus one of the grim calls this merely his opinion, but the presenta- ironies of this story: The men who in the 1980s tion bears the agency logo. FDA declined to beat down the doors at FDA to demand approval comment, though it recently announced inter- for AIDS treatments are rightly regarded as henally that Dr. Jenkins would retire. roes, yet these boys and their families have been All of this is spreading confusion about an treated as desperate losers. approved therapy. Anthem has declined to cover Still, the genesis of these mixed messages is the treatment, calling it “investigational.” FDA, which should stop undercutting a drug the (That’s false.) Aetna will require boys to start agency has approved. But that will require the drug before age 14, among other stipula- changing the bureaucracy’s toxic culture of potions, and insurers like Humana are limiting the litical control and contempt for private innovatreatment to boys who can walk. The compa- tion, and Donald Trump’s FDA commissioner nies’ explanation is that there’s no proof of clini- should make that his first priority.

I

Illinois: Land of Leaving

llinois Governor Bruce Rauner’s Illinois come of the new arrival was $56,689. turnaround project got a boost when state That gap is widening and the differential can Democrats lost their veto-proof majority in be traced to policy decisions as the state staggers November. Some bipartisan reunder pension debt and an enThe public-union form can’t come soon enough trenched Democratic-public given this week’s news that union machine in Springfield. In exemplar leads the taxpayers are fleeing the Land an effort to cover growing debt, U.S. in out-migration. in January 2011 state lawmakof Lincoln in record numbers. According to the Census ers raised the personal income Bureau, Illinois now leads the tax rate to 5% from 3% and the nation for the steepest population decline. Be- corporate income tax to 9.5% from 7.3%. tween July 2015 and July 2016, Illinois lost According to an analysis of Census data by some 114,000 people in net migration to other the Illinois Policy Institute, for the 16 years bestates, with total population decline of 37,508 fore the tax hike Illinois lost an average of some (including births and deaths). For the third 66,800 people in net migration. The exodus acyear in a row it was the only state to have lost celerated to 73,500 from July 2011 to July 2012, population among the nine in its Great Lakes 67,300 in 2012-2013, 95,000 in 2013-2014, and Mid-America region. 105,000 in 2014-2015 and 114,000 this year. The numbers are especially worrisome for The Census data show that Illinois’s net mithe state’s tax base because the average person gration losses since 2000 are equivalent to the moving out of the state earns some $20,000 net losses in the 10 next largest U.S. cities after more than the average person moving in. Ac- Chicago. The 2011 tax hike has partially expired, cording to IRS data for tax year 2014 (filed in but Democrats are trying to shake Mr. Rauner 2015), the average income of the taxpayer leav- down for a repeat. He needs to hold firm to stop ing Illinois was $76,824 while the average in- the state’s population exodus.

N

Another Government Pension Scandal

o, we’re not writing about the scandal In October 2010, former New York State (all too legal) that state and local pension Comptroller Alan Hevesi pleaded guilty to a felfunds have run up more than $1 trillion ony corruption charge in another pay-to-play in unfunded liabilities. Today’s scandal—one of several criminews concerns a single govern- Public retirement funds nal convictions in the case. In ment pension official and the 2010 financier Steare a giant opportunity November way he allegedly abused taxven Rattner agreed to pay for corruption. payers and the workers who more than $6 million to settle depended on him to guard a case with the Securities and their retirement savings. Exchange Commission. In DeOn Wednesday U.S. Attorney Preet Bharara cember 2010 he agreed to pay $10 million to announced the indictment of New York State make New York State’s civil case go away. Among Common Retirement Fund portfolio manager other allegations, the SEC had accused Mr. RattNavnoor Kang for fraud and obstruction of jus- ner of helping arrange for the distribution of a tice. The government says Mr. Kang partici- film called “Chooch,” produced by the brother pated in a “pay-for-play” scheme in which he of the pension fund’s chief investment officer. steered billions of dollars in pension-fund Mr. Rattner denied any wrong-doing. bond trades to two brokerage firms. In exTwo years ago the former chief executive of change, the government says the erstwhile the California Public Employees’ Retirement public servant took bribes that included co- System, Fred Buenrostro, admitted to acceptcaine, prostitutes, event tickets, travel and lux- ing more than $250,000 in cash and other ury items, as well as cash to pay for strippers bribes from a former board member seeking and other personal expenses. Calpers investments with outside money manMr. Kang’s lawyer declined comment to the agers. Buenrostro had accepted money to pay Journal, and he deserves the presumption of for his wedding—and later took money to pay innocence, though one of the brokers in- for his divorce. volved has pleaded guilty and is cooperating The problem here is the opportunity for corwith prosecutors. “This was an age-old and ruption that comes from giving politicians and classic tale of quid-pro-quo corruption,” said bureaucrats power over retirement money. Mr. Bharara. He might have called it a classic That money belongs to workers and ought to tale of public pension management that keeps be in individual accounts that the workers can repeating. control. It’s a great way to “drain the swamp.”

In response to Alan S. Blinder and Alan B. Krueger’s “Trump’s Infrastructure Mistake (op-ed, Dec. 19): One problem with federal infrastructure spending is that it is hard practically to separate the public-goods value from the boondoggle costoverrun aspect. The long delayed and dramatically costly Second Avenue subway in New York City is a prime example. One benefit of privately financed infrastructure spending that Messrs. Blinder and Krueger ignore is that it potentially enables the projects to escape the strictures of the DavisBacon Act. The act effectively mandates the use of high-priced union labor. Taxpayers would gain if infrastructure spending could be accomplished free of the necessity to lavish monopoly rents on unions. Of course, repeal or selective congressional exemption of certain projects from the act would also be beneficial. MARIO J. RIZZO Department of Economics New York University New York

These funds can be repatriated with little or no tax consequence if invested in an infrastructure bank with interest set at 200 basic points above prime for 20 to 30 years. The same opportunity can be offered to private investors. The priority for infrastructure improvements can be taken from the American Society of Mechanical Engineers (ASME) evaluations of the infrastructure and awarded on a state-by-state basis. The government can guarantee the loans. Repayment can be made through tolls, user fees and other cash-generating means. Of course, regulations and other obstructions that make infrastructure repair bureaucratically constipated must be streamlined and consolidated. If the U.S. is to be competitive in the coming decades, revitalizing our infrastructure must be among the nation’s highest priorities. But funding must come from the private, not public, sector if we are to keep our national debt manageable. HARLAN K. ULLMAN Washington

Messrs. Blinder and Krueger are correct in their criticism of President-elect Donald Trump’s current proposal for rebuilding America’s crumbling infrastructure. But Build America Bonds lack the firepower to generate enough funding to accomplish this massive and vital undertaking with real impact. What is needed is a national infrastructure bank of $1 trillion to $2 trillion as a base for accomplishing this task. The source of funding cannot be through government financing as the $20 trillion debt is already too large and will grow significantly through the proposed tax cuts. Nor will tax credits work as the professors note. The source must be the $2 trillion or so that U.S. firms hold abroad to avoid corporate taxation.

The incoming administration would do well to look beyond the way infrastructure was built in the 1950s to maximize the societal benefit of each public dollar spent. I and many other Americans are hoping for a pragmatic approach based on what works, even if it means that in some cases investors will be paid to take risks off of the public balance sheet. There is a large and growing body of literature that examines methods and precedents for structuring projects to attract private capital while reducing the risks and expenses borne by taxpayers. These methods, deployed with care, can be used to steer private investment into desired areas, including schools and water systems. CHRISTOPHER BUCKINGHAM London

The Desire for Democracy Is Not Universal Regarding “The U.S.S.R. Fell—and the World Fell Asleep” by Garry Kasparov (op-ed, Dec. 17): We should give Mr. Kasparov credit for being a consistent critic of the Putin regime and a fighter for Russian democracy. He thinks that the Putin regime “has no ideology beyond power and money.” In reality, the communist idea in Russia has been replaced with an even more powerful one—nationalism. This ideology has always had strong roots in Russia and the Soviet Union. Like many prominent dissidents in Soviet Russia and Russia today, Mr. Kasparov believes that the Russian people want democracy and a free market, that a true democratic system would be good for the country. True enough, many people in cities such as Moscow and St. Petersburg want democratic institutions to be established, but the majority of the people do not want democracy. They consider it weak and uncertain. They

A Great Idea for Our Time; But First, Some Suggestions Andy Kessler’s call for a job-creating GI Bill for the 21st century (“Just Don’t Call It ‘Trump University,’” oped, Dec. 16) is an idea whose time has come. But replicating the transformative power of that landmark legislation requires more than an online road to an entry-level job. Instead, the action should begin in Congress with a bill chartering a nonprofit foundation that offers vouchers or tax credits for online courses to potential students from all educational levels and backgrounds. Some would use these resources to master a trade or a technical field, perhaps enrolling in courses created by IBM or other private companies in need of skilled workers. Others could choose to earn college credits through a wide array of online courses and curricula created by universities or other interested groups; new learning options are emerging all the time. If they successfully complete the equivalent of three years of college-level study, the foundation should reward their hard work with funding for a fourth year to complete their bachelor’s degree on a college or university campus. Like the great GI Bill, this would be a distinctively American innovation, productive of better jobs, better lives and a stronger economy. We should do it. RICHARD C. ATKINSON President Emeritus University of California San Diego Letters intended for publication should be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, or emailed to wsj.ltrs@wsj.com. Please include your city and state. All letters are subject to editing, and unpublished letters can be neither acknowledged nor returned.

want and understand “a strong hand.” Reality shows that outside the West the ideas of democracy and free markets have not taken strong root. But the West stubbornly continues to believe that all peoples are dreaming of democracy. Unfortunately, this is not true. VICTOR MISHKEVICH (A former Soviet citizen) Bridgewater, N.J. This essay should be a must-read for President-elect Donald Trump and his staff. Given the civilized world’s reluctance to use military power, when justified, against the Russian dictatorship, the only other viable option is economic pressure. As Ronald Reagan did in the past, we could use a military buildup, together with our huge natural-gas capability, to bring Russia to its knees. By creating liquified natural-gas facilities to export to Europe, we could undermine Russia’s already fragile economy by severely impacting its exports to Europe. We can only hope that Presidentelect Trump can outfox Vladimir Putin, who has played us for suckers these past several years. All apparent indicators point to a rapport with Mr. Putin by Mr. Trump. The key question: Is Mr. Trump smart enough to outfox the fox? PATRICK T. PALMIERI Waretown, N.J.

Be Sure Your Enemies Are Close Enough to Be Friends Regarding William A. Galston’s “Prepare for a Rocky Confirmation Process” (Politics & Ideas, Dec. 14): Considering the “close” relationship secretary of state nominee Rex Tillerson has with Russian President Vladimir Putin, I cite a wise saying by Michael Corleone and others: “Keep your friends close, but your enemies closer.” JOHN A. PFISTER St. Augustine, Fla.

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Friday, December 23, 2016 | A15

OPINION

Giving Back Isn’t Only for Billionaires By James Piereson And Naomi Schaefer Riley

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mir Lakhani and his wife Dilshad Sumar grew up in East Africa and moved to the U.S. as young adults. Both had witnessed the poverty of the developing world—and the potential for the right kind of charity to lift people up. By the late 1990s they knew they wanted to engage in serious philanthropic efforts abroad, but they had demanding careers and two children. The couple lacked the time and resources to make much of a difference. That’s why they started a donoradvised fund, or DAF, which works like a charitable savings account. Donors make contributions annually and receive an immediate federaltax deduction. The funds’ value appreciates tax-free. Contributors then decide how to donate the money whenever they want. Mr. Lakhani and Ms. Sumar planned to start donating once they had enough saved—and enough time to determine how to best spend their money. The couple is part of a growing number of Americans setting up such funds. The number of DAFs in the U.S. grew to 238,293 in 2014, up from 184,364 in 2010, according to a November report from the Manhattan Institute. During the same period, charitable assets in DAFs grew to $70.7 billion from $33.6 billion. It’s not only older donors who are attracted to this method of giving.

Millennials give on average $1,000 a year to Fidelity Charitable donoradvised funds. The Chronicle of Philanthropy announced in October that Fidelity Charitable, the biggest sponsor of donor-advised funds, had topped its list of the 400 largest charities. Not everyone was thrilled. Boston College law professor Ray Madoff wrote in the same publication that “DAFs undermine fundamental principles of what it means to give.” She criticized the funds because they do not require a minimum amount to be paid out each year and they have less rigorous reporting requirements than private foundations. But these funds aren’t becoming so popular because their donors are greedily trying to keep their money and avoid taxes. It’s more simple: Donor-advised funds have made giving much easier, particularly for those with modest resources. Mr. Lakhani and his wife debated several platforms for their giving. “We’re not billionaires,” he explained in a recent interview, “where we could hire a bunch of lawyers and set up a foundation.” They simply needed a long-term and well-organized vehicle. As American philanthropy has grown, so has the bureaucracy that sustains it. Foundation budgets have ballooned to $55 billion in 2013, up from $30 billion in 2003, according to the Foundation Center. Also growing are the regulations that govern these foundations and the staffs that support them.

The Sarbanes-Oxley Act of 2002 requires foundations to complete paperwork regarding whistleblower protection and conflicts of interest. Trustees are often urged by auditors and the IRS to set up compensation and audit committees to set staff salaries and monitor the finances of their organizations. Many wealthy Americans now feel it is too burdensome and expensive to start a charity.

Many Americans set up donor-advised funds to make a difference without the bureaucratic hassles. Donor-advised funds allow donors of all levels—the minimum amount required to start a fund with Fidelity is $5,000—to put away money for charitable causes without having to worry about exactly how much is being granted each year. These contributors disburse money at a higher rate than private foundations—21.9% of assets, compared with 5.8% for private foundations in 2013-14, according to the Manhattan Institute report. These funds also provide an opportunity for people who want resources ready in case immediate opportunities arise. Pam Norley, who heads Fidelity Charitable, reports that donors have directed significant funds this year to Syrian refugee charities, as well as to victims

A Presidential Getaway Is No Vacation By Tevi Troy

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s Donald Trump spends Christmas at his Mar-a-Lago resort in Florida, Americans of goodwill shouldn’t begrudge him for taking a break from the crush of transition work. Still, the incoming president needs to consider his vacations carefully and be prepared for intense scrutiny. A president is always on call, and history shows that an absence from the White House can create complications for the administration.

Trump deserves time to unwind, but he should remember that he’s never really off the clock. It might seem like in the era before modern communications it was easier for presidents to escape the burdens of the White House. But the president has never been able to fully get away. On April 7, 1793, Secretary of State Thomas Jefferson sent a vacationing President George Washington a letter informing him that war had broken out in Europe, and counseling that the U.S. “take every justifiable measure for preserving our neutrality.” Washington did not return to Philadelphia until April 17, whereupon he called a cabinet meeting. Today a 10-day delay in the president’s response would be unimaginable. Theodore Roosevelt’s presidency began during a vacation. President William McKinley had been shot in Buffalo, N.Y. but seemed to be stable. So Roosevelt, the vice president, went on a family trip to the Adirondacks. When he learned that McKinley’s condition had taken a turn for the worse, Roosevelt set out again for Buffalo, but McKinley died during the return journey. Roosevelt took the oath of office shortly after arriving. Perhaps influenced by this experience, President Roosevelt transformed the concept of the presidential vacation. In July 1902, he established a remote White House in his Long Island vacation home, Sagamore Hill. The invention of the telephone made this more practical, and he brought a robust staff

instead of the customary single clerk. The combination meant that the president no longer had to step out of his duties while away from Washington. Yet presidential vacations were still not risk-free endeavors. Lyndon Johnson was away at his ranch in Texas in 1965 during the Watts riots in Los Angeles. An aide, Joseph Califano, frantically tried to reach Johnson to no avail. This dilatory response set a bad precedent. From then on race riots would plague Johnson—and the country—every summer of his presidency. A vacation can’t shield the president from bad news. In 1998 President Bill Clinton went to Martha’s Vineyard right after the speech in which he admitted to an inappropriate relationship with Monica Lewinsky. The decision hurt him, as press aide Joe Lockhart recollected in an interview: “All of a sudden, he didn’t have any way to show that he was doing the people’s business . . . and the Democratic senators started getting a little squishy.” Mr. Clinton did secure the Democratic support he needed to avoid conviction in the Senate, but he was unable to prevent being impeached by the House. In 2005 George W. Bush was on vacation in Crawford, Texas, when Hurricane Katrina hit. Mr. Bush ended up being blamed for the ineffective response to the storm, which killed more than 1,800 people and caused nearly $150 billion in damage. Not all the attacks were fair, but Mr. Bush acknowledged in his memoir one of his mistakes was not returning from vacation sooner. All that said, time off is important for the president’s health. President James K. Polk frowned upon vacations. “No President who performs his duties faithfully and conscientiously,” he wrote in his diary in 1848, “can have any leisure.” Consequently, he expected “to remain constantly in Washington.” In four years as president he was away from the White House for only six weeks. And workweeks for Polk typically lasted a full seven days. All that took its toll: He died only four months after leaving the White House. Many historians surmise he was killed by exhaustion. In the modern era, presidents can go just about anywhere and remain in contact. But world events now happen faster than they used to, and

Americans expect a response from their president, vacationing or not. As Mr. Trump prepares to take his first break since winning the election last month, he should be mindful of his predecessors’ experiences and stay alert even when away from Washington. Mr. Troy, a former deputy secretary of health and human services, is the author of “Shall We Wake the President? Two Centuries of Disaster Management from the Oval Office,” out in September 2016 from Lyons Press.

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of Hurricane Matthew. “People are doing an average of nine grants a year. That’s a lot of record keeping and information to keep track of,” she told us. With a donor-advised fund, reporting requirements are limited to a single tax deduction. Donors Trust, another DAF, offers other services, such as monitoring charities to ensure that money is actually going to the causes the donor designates. Lawson Bader, the president and CEO, said in an interview that “older philanthropists, especially conservative or libertarian ones, have grown disillusioned with foundations. They tend to drift from the original intent to causes that are contrary to desire of the founder.” All Donors Trust accounts sunset over time, which means they will not be available for multiple generations to redirect. Donor-advised funds have some competition. Last month the Bill & Melinda Gates Foundation announced the creation of Gates Philanthropy Partners, a nonprofit to receive donor contributions. According to the Chronicle of Philanthropy, it would allow donors to “piggyback on the foundation’s work of supporting global health, international development, and American education.” Robert Rosen, one of the foundation’s directors, argues that donors with limited resources should give to large foundations with staffs to vet applicants.

It is tempting to suggest that large foundations might be smarter about where to spend money than the average Americans, but this is not always the case. Plenty of small foundations have made a big difference, and large foundations like MacArthur and Ford have made their share of costly mistakes. In recent years Mr. Lakhani and Ms. Sumar have retired and started to disburse the money from their funds, sometimes with the help of their children. In Cambodia they have spent about $3,000 to provide sewing machines to young women who were trained to be seamstresses. These women earn money from sewing school uniforms in their villages, and then pay back the cost of the sewing machine. That money is then used to buy machines for others. These are not large sums when compared with the expenditures of organizations like the Gates Foundation, but they mean a great deal to the donors who establish personal relationships with the people they support. Donors can see firsthand how their funds improve lives. As Ms. Norley argues, donor-advised funds have “democratized giving,” which is no small thing in an increasingly bureaucratized world. Mr. Piereson is the president of the William E. Simon Foundation. Ms. Riley is a senior fellow at the Independent Women’s Forum.

Notable & Quotable: Dimon Jamie Dimon, CEO of JPMorganChase, as quoted in a Dec. 22 interview with BloombergBusinessweek: The Republicans are in charge, and they have not been anti-business the way you’ve seen the Democrats largely be anti-business for years. I think if you are going to be president, you should have the best people sitting around a table. I think it’s a mistake for the American public to constantly be told that if you work for an oil company or you work for a bank, that automatically makes you bad. I think a lot of these people are very qualified people who are patriots. They’re going to want to help the country.

They’re not going to try to help their former company. These are people with deep knowledge that will hopefully do a great job. I think it’s a reset moment for how businesses are going to be treated: 145 million people work in America; 125 million of them work for private enterprise; 20 million work for government—firemen, sanitation, police, teachers. We hold them in very high regard. But you know, if you didn’t have the 125 you couldn’t pay for the other 20. Business is a huge positive element in society. But for years it’s been beaten down as if we’re terrible people. So I think it’s a good reset.


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Miner to Scale Back Its Sale Plan Anglo American gets a boost to cash flow from the surge in coal and iron-ore prices BY SCOTT PATTERSON AND ALEXANDRA WEXLER A year after Anglo American PLC announced a dramatic corporate downsizing, the company is dialing back its plan to sell off two-thirds of its mines and shed more than half its workers, a people familiar with those plans said.

Though Anglo found its costcutting plans tangled in South African politics, the delay has helped the company take advantage of a rebound in commodity prices during the second half of this year—especially in coal and iron-ore—that have turned some money-losing mines into cash cows, making it harder to justify their sale. While U.K.-based Anglo, the world’s eighth-largest mining company by market capitalization, may still look to divest a number of its low-margin mines, the pressure to dispose of a vast chunk of its assets has

eased. After commodity prices plunged last year, Anglo unveiled what it called a “radical” turnaround plan to sell as many as 29 mining assets and an accompanying 85,000 workers over the next several years. So far, it has sold only nine of those mines and hasn’t met the $3 billion to $4 billion target for asset sales that its Chief Executive Mark Cutifani set at the start of this year. The dialed-back divestment plan highlights how the sharp rebound in commodity prices this year has altered the fortunes of the mining industry.

Now, instead of cutting back and hoarding cash, miners could be on the verge of a new wave of expansion, analysts say. Glencore PLC, which saw its shares plunge last year, recently said it had finished raising cash to stabilize its balance sheet and then announced a big investment in Russian oil giant PAO Rosneft. In 2015, Anglo was among the worst-suffering companies in the global mining industry, which had been racked by almost three years of slumping prices, and was teetering under $12.9 billion of net debt. Anglo

posted $5.6 billion in losses that year. Now, its share price is up nearly 300% in 2016, and it is raking in cash from its coal operations—businesses it had planned to sell. The price of metallurgical coal, which is used in steelmaking, has risen four times this year. Iron-ore prices are up 99%. Some analysts have called on Anglo to use money from rising cash flows to pay down its debt instead of selling assets to raise funds. Analysts expect the company to post positive cash flows Please see ANGLO page B2

Jet Deals With Iran To Test Trump Policies LONDON—European plane maker Airbus Group SE followed Boeing Co. in completing a multibillion-dollar plane deal with Iran’s state air carrier, adding a big test case for how the incoming Trump administration responds to the West’s accelerating economic opening with the Islamic Republic. Airbus, the world’s No. 2 plane maker after Boeing, said Thursday it had completed an agreement—first outlined nearly a year ago—to sell 100 planes to Iran Air. The contract is valued at more than $18 billion based on list price, though such deals can include big discounts. Airbus said it would start delivering planes early next year. The agreement comes close on the heels of Boeing’s deal to sell Iran Air 80 jets for $16.6 billion, based on list price. The two contracts are far and away the most valuable commercial agreements between Western firms and Iran in the wake of a nuclear pact between the U.S. and other world powers and Tehran. In exchange for Iran curbing its nuclear program, the international community agreed to lift many of the sanctions that have isolated Iran economically for years. Since then, Western firms have scrambled to assess opportunities, and a few have made headway with Iranian counterparts in industries including energy and auto manufacturing. Commercial aviation has been a particular priority for Iran, which has struggled to modernize its aging fleet of Please see IRAN page B2

RICHARD B. LEVINE/LEVINE ROBERTS/NEWSCOM/ZUMA PRESS

BY ROBERT WALL

Among other things, CEO Victor Luis has remodeled stores and curtailed discounts to help Coach improve its image.

CoachDesignsMakeoverBeyondBags Retailer reimagines itself as a fashion house to compete with Michael Kors BY SUZANNE KAPNER

did not invest enough in differentiating ourselves from the new competition that was in some ways taking our playbook, Victor Luis, Coach’s chief executive, said in an interview. Coach, based in Manhattan, paid the price with three years of declining sales, but it is starting to turn the corner. Its sales are up 2% at existing North American stores in the October quarter. Global sales at existing Michael Kors stores fell 5.4% in the same period. “Coach has made great strides in becoming more fashion relevant,” said Oliver Chen, a Cowen & Co. analyst. Coach brought in a new executive creative director, Stuart Vevers, who launched a high-end collection this year that includes $2,700 shearling coats, $900 sweaters and $800 bags—well above the $300 to $400 range of its regular handbags. And Coach is on the hunt for acquisitions following its purchase last year of

It was a simple test. The slides showed photos of mall stores with the names obscured. Which was a Coach store? Which was Michael Kors? A roomful of people gathered in New York City two years ago couldn’t tell the difference. The truth is most shoppers probably couldn’t either. But this wasn’t a focus group. They were Coach Inc.’s own employees. The pioneer of selling luxury handbags at affordable prices had been beaten at its own game by Michael Kors Holdings Ltd., which aped Coach’s store designs, prices and even used the same factories to make its goods. In the latest fiscal year, Michael Kors’s revenue reached $4.7 billion, eclipsing Coach’s $4.5 billion. Three years ago, Michael Kors had less than half the sales. “We did not innovate quickly enough,

the shoe company Stuart Weitzman Holdings LLC. It approached Burberry Group PLC about a takeover but was rebuffed; it is considered a potential suitor for Kate Spade & Co., according to people familiar with the situation. Coach has closed a third of its North American full-priced stores, pulled out of 250 department stores and scaled back online discounts, part of a bigger effort to reduce promotions. But not everyone is convinced Coach’s problems are fixed. Sales are growing slowly and profit, at $461 million in the most recent fiscal year, remain well below 2013 levels, when the company earned $1 billion. Coach’s North American outlet stores, which analysts estimate account for about two-thirds of the region’s retail revenue, continue to struggle with heavy discounting and sluggish sales. Moreover, after binging on handbags Please see COACH page B2

STREETWISE | James Mackintosh

Red Alert: Do Not Mix Trading and Politics There were just two problems with trading politics in 2016: the politics and the trading. The year brought two of the biggest political upsets in decades with the surprise votes for Brexit and Donald Trump, but investors mostly missed both. Worse, those who did call the votes right might still have lost money because of the surprising market response. Even an investor with advance knowledge of the electoral outcomes would have struggled, said Mark Haefele, global chief investment officer of UBS Wealth Management. “If you had said during 2016 the U.K.’s going to leave the European Union and Donald Trump’s going to be elected president and the stock market’s going to love it, I think few people would have expected that,” he said. Not every political trade went wrong. Those who ig-

nored the consensus that the U.K. would vote to stay in the EU were able to make big money from the collapse in the pound, and a Trumprelated bet against the Mexican peso also paid off. But Sebastian Lyon, chief executive of London-based Troy Asset Management, points out that the big Brexit trades—gold up, sterling down, shares down a lot— were reversed when Mr. Trump won. “Brexit and Trump were seen as two very similar outcomes,” said Mr. Lyon. “If you had tried to position for Trump to be like Brexit, you would have been carried out; the Trump [market] reaction was the exact mirror image.” Many think the natural reaction to the political news would be a flight to safety. “I would have expected a bigger and more prolonged risk-off move,” said Joachim Fels, global economic adviser at Pacific Investment Management, the bond fund manager. A risk-off trade

Bucking Expectations Many investors missed making the right calls on the U.K.'s Brexit vote and the U.S. presidential election. For those who guessed right, the market response still made it hard to make money. Total return for S&P 500 ( ) and the 10-year Treasury ( ) 15%

Japan moves 10 to negative rates

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typically involves buying bonds and selling stocks. Not only did the stock, bond and currency reactions to political events buck expectations, but the political upheavals didn’t even help identify the major market turning points. In February, the rout in

emerging markets and commodities reversed as fears about China faded and low valuations tempted buyers, without any single event as an obvious cause. In July, U.S. Treasury yields began to climb from their lows, as investors became less concerned about recession or

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deflation. Rising yields ended the global rush into defensive stocks, low-volatility funds and bondlike shares with steady dividends, making bets on economic growth attractive again. Andrew Milligan, head of global strategy at Standard Life, says what really mattered this year was the end of the U.S. corporate profit recession and the dovishness of central banks. Again, though, knowing the moves in advance might not have helped investors much. None of the easing coincided with the major market turning points. The one common factor between the February turning point for emerging markets and the July turn in bonds and bond proxies in the stock market was that bearish bets had become heavily overdone. If one lesson of 2016 is to be humble about political predictions, it is a lesson the market is ignoring.

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Platinum Inquiry Extends Its Reach

Federal investigators are asking questions about a billionaire New York hedge-fund manager and a Bermuda reinBy Rob Copeland, Erica Orden and Nicole Hong surer as they examine the alleged fraud by hedge fund Platinum Partners. On Monday, six Platinum executives, including chief investment officer Mark Nordlicht, were arrested and charged with faking the firm’s investment performance. The allegations against Platinum, which had more than $1 billion under management, outline what would be one of the largest investment frauds since Bernard L. Madoff’s Ponzi scheme. As part of the Platinum probe, prosecutors are casting a wide net. Investigators have interviewed potential witnesses about the relationship between Platinum co-founder Murray Huberfeld and billionaire hedge-fund manager Israel Englander, people familiar with the matter said. Mr. Englander, head of $34 billion Millennium Management LLC and one of the most emulated traders in the hedge-fund industry, hasn’t been accused of wrongdoing. A spokesman for Mr. Englander said he was unaware of any investigation into him personally and hadn’t received any inquiries from prosecutors. Mr. Huberfeld and Mr. Englander, who have been friends for decades, are members of the Orthodox Jewish community from Brooklyn, people close to them said. Mr. Huberfeld sought Mr. Englander’s advice before helping start Platinum in 2003, one of the people said. Mr. Huberfeld himself was arrested in June when he was charged with playing a role in the alleged bribery of a New York union official in exchange for investments in Platinum. He pleaded not guilty. He wasn’t named in Monday’s complaint but is the unnamed “Co-Conspirator 1” in the criminal indictment, said a person familiar with matter. Federal investigators are looking into the actions of Bermuda reinsurer Beechwood Re, people familiar with the matter said. Beechwood’s investment adviser arm was two-thirds owned by Platinum’s executives and close associates, according Please see FUND page B2

INSIDE

ITALY SETS THE STAGE TO RESCUE MPS BANKING, B6

RUPEE RUCKUS SQUEEZES INDIA’S EXPATS CURRENCIES, B10


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B2 | Friday, December 23, 2016

INDEX TO BUSINESSES A

E-F Energy Transfer Partners....................B3 Eskom Holdings..........B2 Etihad Airways...........B4 Exxon Mobil.......B11,B12 Fannie Mae.................A2 Fininvest ..................... B2

B Baidu ........................... B4 Banca Monte dei Paschi di Siena.....................B6 Bank of America.........A2 Barclays.......................A1 Beechwood Re ............ B1 Blackstone Group ....... B3 Boeing....................A4,B1 Bridgewater Associates .....................................A1 Burberry Group...........B1

Michael Kors Holdings .....................................B1 Midnight InvestmentsB3 Millennium Management.............B1

said: “Beechwood did not engage in wrongdoing and intends to cooperate fully with any investigation.” Beechwood’s chief executive has previously said he didn’t tell clients about his firm’s connection with Platinum because the ownership stakes were passive. Representatives for the two U.S. attorney’s offices handling the Platinum investigations declined to comment. Platinum’s flagship fund, which has filed for bankruptcy protection, specialized in esoteric assets like loans tied to life-insurance policies, which the firm was largely permitted to value itself, investor documents show. Launched in 2003, the firm reported some

of the best performance in the hedge-fund world, with no down years and few down months for any of its funds. Prosecutors said the men arrested on Monday made up the performance figures to collect their cut of any unrealized investment gains. All of the executives pleaded not guilty and declined to comment further. Platinum’s investors, who authorities say may total more than 600, include the families of New York real-estate executives Ralph Herzka and Rubin Schron and philanthropist Gordon Diamond, people familiar with the investments said. Mr. Schron said in an interview that his investments

Gap ............................ B11 GlaxoSmithKline.........B3 Glencore ...................... B1 Goldman Sachs Group ...................................B11

I Interactive Brokers Group.......................B10 Investor's Alpha.........A9 iQiyi.com ..................... B4 Iran Air........................B1

J-K J.C. Penney................B11 Kate Spade..................B1 Koch Industries.........B12 Korean Air Lines.........B4 Kumba Iron Ore..........B2

Coach......................B1,B2 Conagra Brands...........B4 Credit Suisse Group...A2

D

Liberty Global ............. B4 Lockheed Martin.........A4 LVMH Moet Hennessy Louis Vuitton............B2

Deutsche Bank............A1 Didi Chuxing Technology .....................................B4

Macy's.......................B11 Mediaset.....................B2

M

N-P Nokia...........................B4 Odebrecht....................B3 PAO Rosneft...............B1 Platinum Partners......B1

R Ralph Lauren.............B11 Rite Aid.......................B3

S Stuart Weitzman Holdings....................B1 Swatch Group.............A2

T-U Teva Pharmaceutical Industries..................B3 Timber Hill................B10 Troy Asset Management .....................................B1 Uber Technologies.B3,B4

V Vivendi ........................ B2 Volkswagen.................B4 Voltage Pictures.........B3

W Walgreens Boots Alliance.....................B3 Weight Watchers International...........B11 Wells Fargo.................B6

INDEX TO PEOPLE B

H

R-S

Ball, Cramer................B4 Brown, Sherrod...........B6

Haefele, Mark.............B1 Huberfeld, Murray......B1

Reed, Jack...................B6 Ruffy, Fred................B10 Sloterbeck, Oscar......B12 Sosnick, Steve..........B10 Staley, Jes..................A2 Standley, John............B3

C

L

Carroll, John ............... A2 Connolly, Sean............B4 Cutifani, Mark.............B1

Letts, Tracy...............A11 Lyon, Sebastian..........B1

F Fels, Joachim..............B1

M Malone, John .............. B4 Menefee, Paul.............A2 Merkley, Jeff...............B6 Milligan, Andrew........B1

N-P Nordlicht, Mark...........B1 Puzder, Andy.............B11

T-V Tester, Jon .................. B6 Vevers, Stuart ............ B2

W Warner, Mark..............B6 Welch, Jamie .............. B3 Winfrey, Oprah ......... B11

Bolloré Boosts Mediaset Stake MILAN—Vivendi SA said Thursday it now has a 28.8% stake in Mediaset SpA, as the French media group increases its shares in the Italian broadcaster despite ongoing legal battles between the two firms. Vivendi, led by billionaire Vincent Bolloré, previously said it planned to reach a 30% stake in the Italian broadcaster, controlled by the family of the former Italian Premier Silvio Berlusconi. A 30% stake is the legal threshold before an investor is

FUND Continued from the prior page to regulators. Beechwood repeatedly directed its clients to invest in Platinum and related deals over the past three years, according to filings and people familiar with the matter. Beechwood didn’t disclose its Platinum ties to clients before telling them to invest with the firm, The Wall Street Journal earlier reported. A former Beechwood executive who is Mr. Huberfeld’s nephew and later returned to Platinum was among those arrested Monday. A Beechwood spokesman

ANGLO Continued from the prior page in 2016, a sharp reversal from a cash outflow of $982 million last year, according to FactSet. Anglo continues to hold discussions with potential buyers. It successfully sold a few of its assets before the commodity surge, much of which came in the second half of 2016. In April, it agreed to sell its Brazilian niobium and phosphates businesses to China Molybdenum for $1.5 billion. But the company is finding it hard to set a price on its assets of late. Anglo was on the verge of selling some prized coal assets in Australia this summer, but then the price of coal surged in a matter of days, prompting Mr. Cutifani to pull back on the deal, a person familiar with the matter said. Not all buyers are convinced the commodity upturn will last, the person said, and that has

IRAN Continued from the prior page mostly Boeing jets, bought before the 1979 Iranian Revolution. Uncertainty has shrouded many of these commercial inroads in Iran since the election of Donald Trump. On the campaign trail, Mr. Trump said he opposed the Iran nuclear deal. Critics in the U.S. Congress have said they would try to un-

Fashion Comeback

required to launch a takeover offer for all shares outstanding. The Berlusconi family is the major shareholder in Mediaset, through holding company Fininvest, with a current stake of just over 38%. But it can’t buy any more shares until April, according to Italian law. Last week, after a long-running dispute over a failed partnership between the two giants, Vivendi started buying up Mediaset shares, spending $860 million to build a 20% stake. —Manuela Mesco

G

L

Dalio, Ray..............A1,A9 Dimon, James.............A2 Donnelly, Joe .............. B6 Drahi, Patrick..............B4

COACH Continued from the prior page in recent years, women appear to be taking a breather. The global market, estimated at $24.3 billion by Euromonitor International, is barely growing. “What we see is consumers looking for innovation,” Mr. Luis said. Coach’s shares are up 4.61% this year, closing Thursday at $34.24, but remain well below their all-time high of $79.03 reached in March 2012. Founded in 1941, Coach became known for its sturdy handbags, created from a type of cowhide used to make baseball gloves that becomes more supple over time. Lew Frankfort, who served as CEO for nearly two decades starting in 1995, hit on a novel idea of selling luxury at affordable prices. The strategy drew derision from European rivals, who dubbed Coach the “McDonald’s of luxury.” But it opened the brand to an untapped market. By 2013, Coach’s global sales had grown to $5 billion, from $550 million in 2000, the year it went public. Under the surface, though, the brand was under strain. It became reliant on online flash sales and was overly dependent on logo bags. “Those huge C’s really cheapened the brand,” said Amy McDonald, a 38-year-old marketing executive. The launch in 2010 of an eponymous line by Reed Krakoff, who at the time was the company’s creative director, exacerbated the problems, said previous and current executives. Mr. Frankfort blamed Mr. Krakoff for taking his eye off the Coach brand, according to people who know them both. Mr. Krakoff was frustrated by the CEO’s unwillingness to scale back promotions, these people said. “Everything comes to an end,” Mr. Krakoff, who left in 2013, said recently. Mr. Frankfort, who left a year later, declined to comment. Meanwhile, Michael Kors was gaining steam, propelled by the celebrity of its name-

C

D

BUSINESS & FINANCE Coach has been closing stores and cutting back on discounts, after being eclipsed by rival Michael Kors. Annual revenue* $6 billion 5

Michael Kors

4 MICHAEL NAGLE/BLOOMBERG NEWS

These indexes cite notable references to most parent companies and businesspeople in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

Acacia Partners...........B4 Airbus Group...............B1 Alitalia.........................B4 Altice...........................B4 American Railcar Industries ................. A5 Anglo American..........B1 Anglo American Platinum ................... B2 Anhui Xinke New Materials...................B3 Apple...........................B4 AstraZeneca................B3 AT&T............................B4

THE WALL STREET JOURNAL.

* ***

Coach has closed a third of its full-priced North American stores.

British Designer Is Transforming Coach

Coach

3 2 1 0 2010 ’11 *Fiscal years

’12

’13

’14

’15

’16

Source: S&P Capital IQ

THE WALL STREET JOURNAL.

Stuart Vevers knew little about baseball when Coach Inc. approached him about becoming the brand’s executive creative director. But the 43-year-old British designer was intrigued that Coach’s handbags were made from a type of cowhide used in baseball gloves. So he learned about the sport, and extended the baseball reference to apparel—making a Varsity jacket for a sample collection that

landed him the job in 2013. It is all part of what Mr. Vevers calls his “optimistic, outsider’s view of America.” Growing up gay in Doncaster, part of England’s industrial north, Mr. Vevers said he learned about fashion by going to nightclubs. Both his parents left school at 15. His mother cleaned houses and his father manufactured tractors. After graduating from college, he landed at Calvin Klein and moved on to a series of European labels that included Louis Vuitton, Mulberry and Loewe. At Coach, where he was given a mandate to reinvent the brand, he has demonstrated a knack for taking Coach’s sym-

bols and using them in unexpected ways. For instance, putting a turnlock clasp— introduced in the 1960s—on a chunky, shearling lined boot. “He’s been successful at rebranding Coach,” said Stefano Tonchi, the editor of W magazine. “You say Coach today and you identify not just with a bag, but with a wardrobe.” Mr. Vevers works from an office on Manhattan’s West Side, which has a custom-designed couch in his favorite color—pink. The designer said he was discouraged from favoring the color when he was younger. “But,” he added, “I have thrown off the shackles.” —Suzanne Kapner

sake designer, who had become a household name from his stint as a judge on the TV show “Project Runway.” Coach executives contend that Michael Kors also borrowed the company’s store design and even used some of the same factories as Coach. “Thanks for the playbook,” Michael Kors CEO John Idol told Mr. Frankfort, according to a person familiar with the conversations. A Michael Kors spokeswoman declined to comment. Michael Kors, however, had something that Coach didn’t: a

full head-to-toe look, selling clothing and shoes. Enter Mr. Vevers, a 43year-old Briton who previously worked for LVMH Moët Hennessy Louis Vuitton. Since he was hired in 2013, Mr. Vevers has added about 30 new designers to the 80person team to help Coach make the transition to a full fashion house. Mr. Luis has curtailed discounts and remodeled stores, moves that helped the company upgrade its image. Coach now holds two online flash sales a month, down from

about 12. The pullback resulted in $300 million in lost sales. But it helped reposition the brand. As a result, handbags and accessories priced at more than $400 accounted for 50% of Coach’s sales in the most recent quarter, up from 30% last year. Asked whether a slowdown in Michael Kors’s sales is further helping Coach, Mr. Luis responded with his own question. “If we had done nothing would Coach be better today?” he asked. “The answer is, no.”

were selected by a money manager. “I’m not really familiar with the investments we invest in,” he said. “Maybe I’ve heard the name.” The money manager, Jack Bojman, said Platinum was in the portfolio before he was hired. “We just hoped it performed,” he said. Over the past year, Platinum restricted redemptions and then suspended them entirely. At the same time, its executives told investors they would eventually be paid back in full, perhaps even with further investment gains, investors said. Shlomo Rechnitz, a billionaire California nursing-home magnate, had tens of millions of dollars tied up in Platinum

and related deals, a person familiar with the matter said. He told friends he has cut back his charitable giving following Platinum’s woes, in one instance slashing his annual donation to Jerusalem’s Mir Yeshiva to $1 million from $5 million in years past. Torah Umesorah, an Orthodox Jewish education charity that provides teacher training for more than 800 schools, had millions invested in Platinum. That is because when developer Richard Stadtmauer made a 2008 donation to the organization he recommended that it be invested solely in Platinum, according to three people familiar with the matter. Mr. Stadtmauer had an

apartment in the same Manhattan building as Mr. Huberfeld and Mr. Nordlicht, according to a person familiar with the situation. Torah Umesorah asked for the money back last year and was rebuffed, people familiar with the matter said. Mr. Stadtmauer then threatened to sue Platinum if it didn’t give the money back, the people said. Instead, Platinum agreed to treat the redemption as a loan, bearing interest. It hasn’t yet been repaid, the people said. Arrangements like that were flagged in Monday’s indictment, which prosecutors termed “preferential redemptions, often for arbitrary reasons.”

His creations reflect ‘optimistic, outsider’s view of America’

made many prospective buyers reluctant to pay the higher prices Anglo is asking for. “Mark will be looking at me and say, ’Is that the right price for what you are selling?’” said Norman Mbazima, deputy chairman of Anglo American South Africa, in an interview. Despite their misgivings, “there’s certainly no lessening of pressure because of the price of commodities,” Mr. Mbazima added, referring specifically to Anglo’s operation in South Africa. Another complicating factor for Anglo is South Africa, where the company had planned to sell as many as 13 of its 23 mining operations. Anglo is targeting coal mines there, some of which have low profit margins, as well as aging iron-ore operations, which are held in separately listed, majority-owned unit Kumba Iron Ore. Despite their many ties, the South African government and Anglo have had a strained relationship. The South African gov-

ernment has made it clear that Anglo should sell to homegrown companies or groups, but few enterprises in the country can afford to buy Anglo’s assets. The government also has

made it difficult for Anglo to cut workers at unproductive mines. South African government officials didn’t respond to requests for comment. “When you have to cut costs,

it’s not easy, when you have a government that isn’t being helpful and doesn’t appear to like you; you feel a bit lonely, isolated,” said Ian Woodley, an analyst for Old Mutual Equities

in Cape Town. Anglo recently has been involved in a price dispute with the state-run power company, which buys some of its coal used in energy production from the mining company. Eskom Holdings SOC accused Anglo of overcharging for coal; Anglo has responded by saying it charged a fair market price. The Public Investment Corp., South Africa’s state-run pension fund, has been pushing Mr. Cutifani to spin off Anglo’s assets as a package that includes some coveted platinum mines, a move the CEO has resisted. The pension fund wields influence as the largest shareholder in Anglo American, Kumba, and Anglo American Platinum, a majority-owned unit of Anglo listed in Johannesburg. The pension-fund manager declined to comment beyond an August statement saying it was talking with Anglo about finding the “best ways of maximizing value for all the stakeholders.”

wind the Boeing deal, in particular. Boeing announced its Iran deal this month at an awkward time for the American plane maker. Mr. Trump had just questioned the cost of Boeing’s government contract to build the next version of Air Force One, the presidential jet. Mr. Trump hasn’t weighed in publicly on Boeing’s contract with Iran, and he and his team haven’t detailed their position on the nuclear deal with Iran since the election.

Even though it is a European company, Airbus is vulnerable to any big shift in U.S. policy toward Iran. Airbus requires specific U.S. approval for the sales because its jets include many American parts and technology that are subject to American export controls. It received that approval, from the U.S. Office of Foreign Assets Control, earlier this year. The U.S. has other levers that could make completing the Airbus transaction more

difficult—for instance, forbidding any financing or payments to be routed through institutions with access to the American banking system. Farhad Parvaresh, head of Iran Air, said in an interview that Airbus “probably” would finance some of the first planes to be delivered. Airbus didn’t disclose financing details. Iran previously has said it would finance a chunk of the two plane orders domestically and rely on foreign financing for the rest.

Airbus is expected to deliver its planes to Iran Air well ahead of Boeing, making its deal an earlier litmus test of Trump administration policy. Mr. Parvaresh said he expected delivery of three to four Airbus planes by March. One person familiar with the situation said at least one plane could arrive before Mr. Trump’s Jan. 20 inauguration. Boeing didn’t include the Iran Air deal in its latest weekly order-book update. Iranian officials said earlier

this week they would seek repayment with interest on any money they paid for the Boeing jets if Washington interfered with the order. For Boeing and Airbus, the Iranian purchases are a big help. After years of record orders for the newest planes, airlines’ appetite has been ebbing globally. The two orders will go a long way in upgrading Iran Air’s fleet, one of the oldest in the world due to the sanctions. —Aresu Eqbali in Tehran contributed to this article.

Comeback Story A rebound in commodity prices...

...boosted Anglo American’s fortunes

75%

£20

50

Coking coal

25 0

Share price in London

15 10

–25 –50

LME copper

5

–75

Iron ore

0

2013

’14

’15

...prompting it to rethink a radical plan to sell off mining assets.

’16

9 Number of mines sold to date

2013

Up to 29 Number of mines the company originally planned to sell

Notes: Commodity prices are though Wednesday; £1 = $1.24 Sources: FactSet (shares, iron ore); WSJ Market Data Group (copper); The Steel Index (coal); the company (mines)

’14

’15

’16

45 Number of mines the company had when plan was announced THE WALL STREET JOURNAL.


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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | B3

* * * *

BUSINESS NEWS

Blackstone, Energy Transfer in Talks Private-equity firm sizes up some assets of pipeline operator ahead of bigger deal

Welch was a key lieutenant of Energy Transfer Chairman and Chief Executive Kelcy Warren before the men fell out over another deal that collapsed earlier this year. It isn’t clear how big the latest deal would be, but one of the people said it could be valued at about $5 billion or more. Energy Transfer Partners is a master limited partnership that owns and operates around 62,500 miles of natural-gas and natural-gas-liquids pipelines. It isn’t clear which of its assets are part of the potential deal with Blackstone and Mr. Welch and why the Dallas company would do it. It is still possible the talks will

BY DANA MATTIOLI AND DANA CIMILLUCA Private-equity firm Blackstone Group LP is in talks to take a stake in assets owned by Energy Transfer Partners LP, according to people familiar with the matter, as the natural-gas pipeline owner seeks to complete its $21 billion sale to a sister company. Blackstone is discussing joining on the deal with Jamie Welch, the people said. Mr.

fall apart before a deal is reached. Last month, Sunoco Logistics Partners LP agreed to buy Energy Transfer for $21 billion in stock. The deal would bring together two of the five publicly traded partnerships controlled by Mr. Warren. Should it be completed, the merger would simplify Mr. Warren’s network of oil-and-gas pipeline companies, something analysts and investors have urged. His other companies are Energy Transfer Equity LP; Sunoco LP, which owns Sunoco-branded retail gasoline stations in the U.S. and is controlled by Energy Transfer Partners; and PennTex Midstream Partners LP.

Energy Transfer Equity in June called off its merger agreement with rival pipeline operator Williams Cos., a deal valued at nearly $33 billion when it was signed last year. The deal would have created a 100,000-mile network but buyer’s remorse set in at Energy Transfer Equity as a drop in oil-and-gas prices buffeted pipeline companies. Differences over that deal led to Mr. Welch’s departure from Energy Transfer Equity, where he had served as finance chief. Energy Transfer Partners and Sunoco Logistics both own stakes in the Dakota Access oil pipeline, which would transport crude from the Bakken Shale formation in North

Dakota to markets in the Midwest. The nearly 1,200-mile pipeline is nearly complete, except for a 1,100-foot cross-

$21B

Value of Sunoco Logistics deal last month for Energy Transfer

ing of a Missouri River reservoir. The Standing Rock Sioux tribe and environmental activists have been protesting work on the pipeline near the crossing, arguing the project endangers drinking water and sa-

cred sites. The Obama administration this month denied a permit needed to complete the last leg of the pipeline, though the move could be short-lived since President-elect Donald Trump supports the project. Despite turbulence in the energy sector as the price of oil fluctuates after its steep decline, there has been a fair amount of pipeline deal-making this year. TransCanada Corp. bought Columbia Pipeline Group Inc. for about $10 billion, and Canadian pipeline operator Enbridge Inc. agreed to purchase Spectra Energy Corp. for about $28 billion. —Alison Sider contributed to this article.

Brazilian Bribery Scandal Shakes Up Latin America BY RYAN DUBE

Teva Settles Charges in U.S. Drug firm to pay $519 million related to violations

MERIDITH KOHUT//BLOOMBERG NEWS

LIMA, Peru—Brazilian construction giant Odebrecht SA’s admission to U.S. prosecutors that it paid hundreds of millions of dollars in bribes to win lucrative infrastructure contracts is reverberating across Latin America, where the company has built some of the region’s biggest projects during the last 15 years. Since 2001, Odebrecht paid nearly $800 million in bribes in 12 countries, providing the company with $3.34 billion in profits, according to an anticorruption settlement released by the U.S. Department of Justice this week. Excluding Brazil, half of that illicit money was used to pay off officials in nine Latin American nations, from market-friendly Mexico to socialist Venezuela. “This is going to be a political earthquake in many of these countries,” said José Ugaz, a former Peruvian prosecutor and chairman of Transparency International, the Berlin-based watchdog group, who believes the revelations represent the tip of a broader scheme. On Thursday, Colombia’s government reacted by saying it could void infrastructure contracts that are found to have been won through illegal means after the document said Odebrecht paid $11 million in bribes. Panama President Juan Carlos Varela called for prosecutors to investigate all of Odebrecht’s contracts and prosecute as warranted. In Venezuela, where nearly $100 million in bribes were doled out, the opposition-controlled Congress moved to begin investigating Odebrecht’s contracts, even as President Nicolás Maduros’s government remained silent. And in the Dominican Republic, prosecutors

Odebrecht’s Mercosur Bridge in Venezuela remains a line of barren concrete columns a decade after the start of construction. asked U.S. authorities to share information after the settlement said Odebrecht spent $92 million to win contracts. The scandal created a political crisis in Brazil that led to the impeachment of former President Dilma Rousseff. In the wake of Wednesday’s settlement, leaders of some other countries denied wrongdoing. Former Colombian President Álvaro Uribe defended his 2002-2010 administration, saying he managed state resources with “absolute care” during his final term, when more than half of the Odebrecht bribes in Colombia occurred. Peruvian President Pedro Pablo Kuczynski said he didn’t provide favors to Odebrecht as a cabinet minister more than 10 years ago, and his govern-

ment announced plans for new legislation to curb future graft. Odebrecht, Latin America’s biggest construction firm, had an upper hand over competitors by developing a secretive system to hide its bribes to foreign officials, politicians and political parties. It set up a special office, called the Division of Structured Operations, that funneled illicit money never reported on the company’s balance sheet, according to the settlement. To make the transfers, it used smaller banks in countries with strict secrecy laws to avoid international law enforcement. Sometimes, it even paid in cash. Odebrecht in recent years has won a number of projects from Petróleos Mexicanos,

Mexico’s national oil company, according to the government’s transparency agency. Those contracts were awarded amid the opening to private investment of Mexico’s state-owned energy industry under President Enrique Peña Nieto. Odebrecht won four Pemex contracts in 2014 totaling $1.15 billion. A Pemex spokeswoman said the firm’s internal comptroller is investigating whether there were irregularities in the contracts. A spokeswoman for the Attorney General’s Office said a criminal probe would be opened. Outside of Brazil, the most bribes were paid in neighboring Venezuela. Odebrecht made $98 million in illegal payments under the current

socialist government, an ally of Brazil’s former president, Luiz Inácio Lula da Silva, who was indicted this week for alleged corruption and money laundering. Odebrecht’s project list in Venezuela swelled to include airports, subways, dams and railways. But most were never completed. Odebrecht’s $8 billion Tocoma hydropower plant, the most expensive non-oil project in Venezuela’s history, is almost five years behind schedule with no completion in sight. The company’s 8-mile Mercosur Bridge over the Orinoco River remains a line of barren concrete columns a decade after the start of construction. —Juan Montes and Dudley Althaus in Mexico City contributed to this article.

Teva Pharmaceutical Industries Ltd. agreed to pay $519 million to settle charges that it violated U.S. foreignbribery law in its operations in Ukraine, Mexico and Russia. The Israeli company will pay the largest criminal fine imposed by the U.S. government against a pharmaceutical firm for violating the Foreign Corrupt Practices Act, prosecutors said. The law, jointly enforced by the U.S. Justice Department and the Securities and Exchange Commission, bars the use of bribes for foreign officials to get or receive business. The U.S. has extensively enforced the FCPA on pharmaceutical firms over the years. The sector faces heightened FCPA exposure in countries with national health systems, where doctors are considered public officials. In 2016, pharmaceutical giants GlaxoSmithKline PLC, AstraZeneca PLC and Novartis AG all settled cases involving FCPA violations. Teva entered into a deferred-prosecution agreement that charges the company with violating the antibribery provisions of the FCPA, and it agreed to pay a $283.2 million criminal fine, continue to cooperate with a U.S. investigation and retain a compliance monitor. Its Russian subsidiary pleaded guilty. The parent company also agreed to pay $236 million to the SEC. —Samuel Rubenfeld and Austen Hufford

Chinese Metals Firm Ends Hollywood Bid Uber Self-Driving Test

Moved After Roadblock

A Chinese metals manufacturer ended its unexpected foray into Hollywood, scrapping a bid to buy the indepen-

BY GREG BENSINGER

dent filmmaker behind the award-winning movies “The Hurt Locker” and “Dallas Buyers Club,” saying it couldn’t satisfy a Chinese regulator. Shanghai-listed Anhui Xinke New Materials Co., which prepares copper and other metals for use in electronics and auto industries, said Wednesday in a regulatory filing that it canceled its at least 2.4 billion yuan (US$345.6 million) offer for a controlling stake in Midnight Investments LP, a company whose main asset is Los Angeles-based film-financing, production and distribution company Voltage Pictures LLC. Xinke, which announced the deal in November, said in filings to the Shanghai Stock Exchange that the U.S. film company didn’t provide additional information requested by the Chinese regulator. Xinke referred questions to an executive who wasn’t available for comment. Neither Nicolas Chartier, founder of Voltage, nor a lawyer who represented Voltage’s parent companies in the transaction replied to requests for comment. The collapse of the deal comes as Beijing clamps down on Chinese companies seeking to invest overseas, part of a push to stem the rising flow of

FOCUS FEATURES/EVERETT COLLECTION

By Wayne Ma in Beijing and Kane Wu in Hong Kong

Xinke canceled its offer to take over Voltage Pictures, the filmmaker behind ‘Dallas Buyers Club.’ money out of the country. Tighter regulatory scrutiny could be delaying a number of ongoing transactions, bankers and lawyers say. The sale of Italian soccer giant AC Milan to a Chinese consortium was postponed to March, the Italian team’s parent company said earlier this month; a person close to the deal said the Chinese buyer was facing problems moving money out of the country. New measures on overseas deals that Beijing circulated in late November include greater scrutiny of Chinese companies investing in foreign entities that aren’t closely related to the investor’s core business. Xinke, which is losing money

on its main metal-rolling business and has little experience in movies, said when it announced the deal that it hoped the acquisition would propel it into the global film and TV industry, as well as bolster its bottom line. A few weeks after Xinke disclosed its offer for Voltage, the stock exchange in Shanghai sent a letter to the metal maker asking for information about the U.S. filmmaker, according to Xinke’s regulatory filings. The letter asked for details about Voltage’s business structure, assets, management team and films. Regulators also asked Xinke to justify its valuation of Voltage.

Xinke had offered to purchase an 80% stake in the company for at least 2.4 billion yuan. After the deal was canceled Wednesday, the Chinese regulator asked Xinke whether there were additional reasons for the termination, such as issues related to “foreign investment or foreign-exchange policy.” It isn’t clear whether Xinke has responded to the letter. In a transcript of an investor question-and-answer session posted Thursday, the company said it wasn’t sure whether it would attempt another investment in Hollywood but said it would continue its push into the entertainment industry.

www.ebook3000.com

Uber Technologies Inc. is moving a test of its self-driving cars to the friendlier environs of Arizona after suffering a regulatory defeat in California over its use of the vehicles in San Francisco. The startup on Thursday said it would begin a test of the self-driving vehicles early next year in Phoenix, and it sent journalists photos of the vehicles leaving a warehouse hauled by a big rig. Uber touted the support for its experiment of Arizona Gov. Doug Ducey, a Republican, who had issued a statement telling Uber “California may not want you, but we do.” Uber’s announcement came less than a day after the California Department of Motor

Vehicles said it would revoke the registrations of 16 Uber vehicles because the company refused to apply for a $150 permit for autonomous cars. Uber had said the permit shouldn’t be required for its cars. After halting the San Francisco tests on Wednesday, Uber said it was seeking a solution to “develop workable statewide rules” in California that would allow it to test the autonomous vehicles. It also is testing the cars in Pittsburgh, where it has a sizable lab and where local laws don’t require permitting. Under terms of a permit, Uber would have had to disclose accidents as well as incidents when a vehicle’s autonomous mode is deactivated by either failures or a car’s human driver.

Rite Aid Earnings Fall Short BY ANNE STEELE Rite Aid Corp.’s earnings fell below estimates in the latest quarter as pharmacy revenue was hit by pressure on prescription-reimbursement rates and cheaper generic drugs. Chief Executive John Standley pointed to a “difficult operating environment created by the extended duration” of the merger process with Walgreens Boots Alliance Inc., but highlighted continued growth at its pharmacy benefit manager.

Same-store sales fell 3.4% in the quarter from a year ago as a 0.4% slip in retail sales was further weighed on by a 4.7% decrease in pharmacy sales. In all for the November quarter, Rite Aid reported a profit of $15 million, or a penny a share, compared with $59.5 million, or 6 cents, a year prior. Revenue edged 0.8% lower to $8.09 billion. Analysts polled by Thomson Reuters had forecast adjusted earnings of 4 cents on $8.23 billion in revenue.


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B4 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

TECHNOLOGY

WSJ.com/Tech

Has AT&T Video Push Gets Rocky Start Baidu IPO Plan DirecTV Now service for internet streaming frustrates customers with technical glitches

After a long day at work earlier this week, Richard Maltz plopped down at his Chicago home and began watching “People Magazine Investigates” through DirecTV Now, AT&T Inc.’s new streaming-video service. Instead of the show’s latest episode, “JonBenét: The Untold Truth,” the 30-year-old recruiter and his fiancée gazed at an error message. “We would have to switch channels and then switch back for it to work,” Mr. Maltz said, “but in a few minutes, it freezes all over again.” AT&T’s high-profile push into internet video has gotten off to a rocky start. Customers of DirecTV Now, which launched three weeks ago, are complaining about technical glitches that cause crashes, features not functioning and other bugs. The outages have been widespread enough that an error many customers encounter related to a problem loading video content, QP1502, has be-

DAVE KOTINSKY/GETTY IMAGES FOR DIRECTV

BY THOMAS GRYTA

AT&T launched DirecTV Now in New York last month, above, and has since had complaints of outages. come a frequent hashtag on Twitter. The Dallas telecom acknowledged there are some problems with the service, which an AT&T spokesman said “we are working quickly to address.” A “limited amount of customers” have been affected, he said.

“With any new technology there are going to be fixes that need to be made,” he added. “While we understand we still have work to do, overall feedback on DirecTV Now has been very positive.” AT&T declined to disclose how many people have signed up but has said initial re-

sponse exceeded its expectations. The company is hoping that DirecTV Now attracts young people, cord-cutters and other consumers who don’t sign up for its traditional payTV packages. It spent a year negotiating rights from content companies and for a limited time is offering a bundle

of more than 100 channels for $35 a month, throwing in a free Apple TV for those who pay three months in advance. AT&T, already the biggest U.S. pay-TV provider, pitches the streaming service as a customer-friendly option, as regulators consider its $85 billion proposal to buy Time Warner Inc., owner of HBO, CNN and other channels. Watching shows such as “Doctor Who” on BBC America has been a “maddening” experience for Todd Copilevitz since he signed up for DirecTV Now on its second day of availability. “I have not been able to watch a single show from start to finish since that day,” he said. The 54-year-old, who works at an advertising agency in Atlanta, expected hiccups but is frustrated that AT&T hasn’t provided a timeline for fixing the problems. Google data show that searches for “QP1502,” spike between 7 p.m. and 10 p.m. ET, which seems to indicate customers are experiencing the worst streaming issues during prime time. On Twitter, AT&T has said that video freezing is “a known issue that we are working on to correct with no estimated time frame.”

Nokia, Rule Change in China Thwarts Didi Drivers Apple Face Off Over Patents Nokia Corp. said Thursday it has filed additional complaints against Apple Inc., alleging the iPhone maker has infringed its patents. The Finnish company, which was once a dominant cellphone maker, said it now has filed in 11 countries in total, saying Apple violated 40 of its patents covering technologies such as display, user interface, software, antenna, chipsets and video coding. On Wednesday, Nokia said it had filed actions against Apple with courts in the U.S. and Germany, for infringements of 32 patents. The company said it has also filed a suit against Apple with the U.S. International Trade Commission. The patent conflict between Nokia and Cupertino, Calif.based Apple has escalated in just a few days. On Tuesday, Apple filed a suit in the U.S. District Court for the Northern District of California, arguing that Nokia excluded some patents from that agreement and transferred them to third-party companies “to be used for extorting excessive royalties” from Apple. It asked the court to award damages and rule that Nokia breached its contract. In 2011, Apple settled a twoyear patent case with Nokia and agreed to pay licensing royalties for use of some Nokia patents in iPhones. Nokia was able to secure a favorable settlement valued at an estimated $720 million from Apple. Nokia said it has negotiated several years with Apple to reach an agreement on the use of the patents before deciding it would take action. On Wednesday, an Apple spokesman said the company has always been willing to pay a fair price for patents covering the technology in its products. “Unfortunately, Nokia has refused to license their patents on a fair basis and is now using the tactics of a patent troll to attempt to extort money from Apple,” he added. An Apple spokesman on Thursday reiterated the company’s Wednesday statement. Nokia was once the world’s largest cellphone maker, but its business declined rapidly not long after the introduction of the iPhone in 2007. Nokia abandoned mobiledevice manufacturing in 2014, when it sold its mobile-phone business to Microsoft Corp. for €5.44 billion ($5.68 billion) to focus on network equipment. Nokia’s patents, however, still cover technology used in many of today’s smartphones and tablets. —Tripp Mickle contributed to this article.

A Didi driver in Beijing last year. Under a new rule, migrants may be dropped as drivers because they are not official city residents. tory. But the residency rule for ride-hailing drivers in Beijing and Shanghai is in line with other Chinese regulations: Only residents with local hukou can drive traditional taxis in those cities. Influxes of migrant workers have been more tightly controlled in Beijing and Shanghai—China’s political and financial capitals—than elsewhere in the country. Guangzhou issued looser ride-hailing rules Thursday that allow some migrant workers with special residence per-

mits to work as drivers. As in the U.S., China’s ridehailing sector is controversial among regulators, but popular with investors. Didi’s investor list includes Apple Inc. and China’s three internet giants, Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Baidu Inc. More than six million passengers use Didi and Uber in China each day. Didi, which had sharply criticized a draft of the rules in October, saying that it would kill millions of jobs for

BUSINESS WATCH CONAGRA BRANDS

Fewer Discounts Weigh on Results Conagra Brands Inc. said its quarterly revenue and profit fell as it offered fewer discounts for its Healthy Choice frozen dinners, Slim Jim snacks and other food. Chief Executive Sean Connolly said Conagra hopes to improve its profit margins by relying less on undercutting competitors’ prices and instead selling more food by modernizing the ingredients and advertising. For the quarter, ConAgra reported a profit of $122.1 million, or 28 cents a share, compared with a year-ago profit of $154.9 million, or 35 cents a share. On an adjusted basis, earnings were 49 cents, ahead of the 45 cents analysts expected, based on a poll by Thomson Reuters. Revenue fell 11.5% to $2.09 billion, falling short of the analysts’ $2.11 billion estimate. —Annie Gasparro ALTICE

Telecom Shifts Strategy With Sale After an acquisition binge that made his company a major player in the U.S. and Europe, French mogul Patrick Drahi is do-

ing something he usually avoids: selling assets. Mr. Drahi’s telecommunications group, Altice NV, said Thursday it would sell its Belgium and Luxembourg business to Telenet Group BVBA, the Belgian unit of U.S. cable magnate John Malone’s Liberty Global PLC, in a transaction that values the assets at €400 million ($417 million). The sale marks the first time Mr. Drahi has opted for a disposal and highlights a new strategy of focusing on his larger assets. Thursday’s deal allows Altice to focus more on its push in the U.S. —Nick Kostov VOLKSWAGEN

Auto Maker to Show Electric Minibus Volkswagen AG is refusing to let America’s nostalgia for the Microbus die, with plans to unveil at next month’s Detroit motor show an electric and autonomous vehicle with styling cues that borrow from the 1950s-era passenger vans. The vehicle is a next step in Volkswagen’s strategy to eventually become an electric-vehicle leader, a move made to revive its reputation after a costly dieselemissions cheating scandal

drivers, on Wednesday issued a more conciliatory statement, praising the government for taking some of its suggestions in earlier discussions. Beijing added a five-month grace period for existing drivers to comply, and Shanghai allowed some smaller cars to operate that it previously planned to exclude. “We are encouraged by improvements in new local rideshare rules published in Beijing and Shanghai,” Didi said on Wednesday. “Compared to the first proposed drafts, these rules are a significant step toward a more sensible and liberal framework.” Shanghai’s internet regulator remained combative. In a scathing attack through its WeChat social media account on Thursday, it alluded to Didi’s October complaint without naming the company, essentially saying it was running an illegal taxi business. “In their lofty boasting, they say it’s a ‘sharing economy’ of unused cars and parttime drivers,” the post from the Shanghai branch of the Cyberspace Administration of China said. “But as soon as there is regulation, it’s exposed that it is ‘taxi-like’ in reality. If they’re really part-time drivers, where does this talk of job losses come from?!” A Didi spokeswoman said in response that the company’s statements about job creation encompassed both part-time and full-time drivers. —Yang Jie contributed to this article.

BY ALEC MACFARLANE AND RICK CAREW HONG KONG—Chinese internet giant Baidu Inc. is planning an initial public offering of its video-streaming site iQiyi.com that could value the unit at up to $5 billion, according to people familiar with the matter. Baidu is considering listing iQiyi in either Hong Kong or the U.S. next year, the people said. The company is planning to issue a convertible bond or similar instrument to raise funds from investors before the IPO, the people said, but the size and timing of that fundraising hasn’t been set. IQiyi is expected to raise about $1 billion through the IPO, according to one of the people, but the exact amount remains fluid and terms could change as the company negotiates with prospective investors. IQiyi said at its annual marketing conference in Shanghai in October that it planned to invest as much as 10 billion yuan ($1.4 billion) to buy and produce content in the coming year. A spokeswoman for iQiyi declined to comment. The plans come after an aborted attempt by the Chinese search giant’s chief executive, Robin Li, to buy the unit earlier this year for $2.3 billion.

$1B

Amount that iQiyi is expected to raise through the public offering

While Baidu’s shareholders have pushed the search giant’s management to improve the profitability of its video and ondemand units, many considered Mr. Li’s bid a low-ball offer. The IPO, which is expected to value iQiyi at between $4 billion and $5 billion, is likely to be seen as a better deal for Baidu shareholders than the buyout bid in February by a consortium led by Mr. Li, which also included iQiyi founder and CEO Yu Gong. Some investors criticized it as a sweetheart deal for Mr. Li to profit at the expense of Baidu’s investors, and it was dropped in July after the two sides failed to reach an agreement on the deal structure and purchase price. Those investors included New York hedge fund and Baidu investor Acacia Partners LLC, which wrote an open letter to Mr. Li criticizing the low sale price. Acacia said the offer valued iQiyi at $2.8 billion compared with a $4.8 billion valuation for Youku Tudou, the rival video platform that Chinese e-commerce giant Alibaba Group Holding Ltd. bought in 2015.

Korean Air Lines Pilots Strike emerged more than a year ago. Committing significant capital to electric vehicles is a cornerstone of Volkswagen’s redemption program. —Adrienne Roberts ALITALIA

Carrier Pushes Anew To Reduce Costs Alitalia SpA has launched a new strategy aimed at cutting costs as a previous plan failed to stem losses. Alitalia said Thursday that further cost cuts are needed. Without such efforts, “Alitalia has no future,” Chief Executive Cramer Ball said in a statement. After years of political interference and disastrous management, Alitalia hit bottom in 2014. Abu Dhabi-based carrier Etihad then scooped up a 49% stake. Since then, it has expanded the Italian carrier’s routes, redesigned the interiors of its aging fleet and retrained most of its staff. The Italian airline’s shareholders have approved short-term financing to “allow the management to start negotiations with all the main stakeholders” including trade unions to find an agreement on cuts. No decision has been taken on staff reduction, the company said. —Manuela Mesco

YONHAP NEWS/NEWSCOM/ZUMA PRESS

BY MATTHIAS VERBERGT

BEIJING—New Chinese rules on ride-hailing apps are expected to force many of Didi Chuxing Technology Co.’s Beijing and Shanghai drivers off the road by declaring that they must be local residents. This skirmish in the global battle between transport regulators and ride-hailing apps is distinctly Chinese, centering on a household registration document called a hukou that stipulates where Chinese citizens may live and work. Many drivers aren’t officially registered in the cities in which they work; in October, Didi said less than 2.4% of its drivers in Shanghai were locals. The rules are expected to dim growth prospects for a sector dominated by Beijingbased Didi, which struck a deal in August to acquire Uber Technologies Inc.’s China unit. Industry analysts said the rules will likely shrink the driver pool in Beijing and Shanghai, forcing companies to raise prices. The ride-hailing hukou rule is typical of the blunt instruments China often resorts to for regulating urban life. Beijing traffic authorities told China’s official Xinhua News Agency on Wednesday that keeping migrant workers out of the ride-hailing driver pool was necessary to limit traffic, environmental problems and other “urban diseases.” In many Western countries, a ban against migrant drivers would be seen as discrimina-

HOW HWEE YOUNG/EUROPEAN PRESSPHOTO AGENCY

BY EVA DOU

For Video Website

Pilots at Korean Air Lines Co. went on strike Thursday for the first time in 11 years, disrupting flights on Asian and Middle Eastern routes. The pilots entered the 10-day strike after wage talks broke down. The strike is expected to

lead to cancellation of as many as 150 passenger and cargo flights, according to the transport ministry. Korean Air said more than 90% of flights scheduled for the next 10 days will be unaffected. —In-Soo Nam


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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | B5

NEW OPPORTUNITIES AND RISKS MAY 2, 2017 | WASHINGTON, D.C.

The Wall Street Journal will bring together leading figures in business, finance and government to discuss the opportunities and risks shaping the future of America’s middle market—the engine of U.S. growth, job creation and competitiveness. We’ll examine the shifting outlook for the U.S. and global economies, as well as explore how new legislative, regulatory and trade policies of the new administration and Congress will affect middle-market companies. The Journal’s senior editors will also lead dynamic discussions with experts on top mid-market business issues, including finance and investing trends; technological innovation and disruption; strategies to recruit, train and retain talent; how best to prepare a company for the next generation of leadership; healthcare policy and its likely evolution; how businesses can best identify and manage business risk; the best investments companies can make to protect themselves against cyber threats; and how to measure and protect business reputation.

SPEAKERS MARCO ANNUNZIATA

SUSAN C. SCHWAB

CHIEF ECONOMIST AND EXECUTIVE DIRECTOR OF GLOBAL MARKET INSIGHT GENERAL ELECTRIC COMPANY

U.S. TRADE REPRESENTATIVE (2006-09) PROFESSOR, UNIVERSITY OF MARYLAND SCHOOL OF PUBLIC POLICY

DREW ALTMAN

RICHARD EDELMAN

PRESIDENT AND CEO HENRY J. KAISER FAMILY FOUNDATION

PRESIDENT AND CEO EDELMAN

RICHARD BEJTLICH

ANDREW KEYT

CHIEF SECURITY STRATEGIST FIREEYE, INC.

CLINICAL PROFESSOR OF FAMILY BUSINESS MANAGEMENT QUINLAN SCHOOL OF BUSINESS LOYOLA UNIVERSITY CHICAGO

PETER CAPPELLI

THOMAS A. STEWART

PROFESSOR OF MANAGEMENT AND DIRECTOR, CENTER FOR HUMAN RESOURCES, THE WHARTON SCHOOL UNIVERSITY OF PENNSYLVANIA

EXECUTIVE DIRECTOR NATIONAL CENTER FOR THE MIDDLE MARKET

TO REQUEST AN INVITATION, PLEASE VISIT MIDDLEMARKET.WSJ.COM

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B6 | Friday, December 23, 2016

* ***

THE WALL STREET JOURNAL.

BANKING & FINANCE 360 million*

Getting Smart The use of internet-connected systems that aim to improve home safety is increasingly common, and sales are expected to more than quadruple in the next four years. Estimated number of shipments of smart-home devices

2010

2015

TONY BACON

Device category

American Family Insurance in Wisconsin installed scores of devices in a house to train adjusters.

BY GIOVANNI LEGORANO

79 million*

40 million

2016

Features

2020

Estimated price range

Motion sensors/ security cameras

Stream video to mobile device

Smoke and carbon monoxide detectors

Alert homeowners to low batteries

Water leak detectors

Find leaks, shut off water

*Projections Sources: ABI Research (shipments); retailer listings (prices)

$25–$500

$60–$200

$30–$1,600 $0

500

1,000 1,500

THE WALL STREET JOURNAL.

Insurers Cool to Smart-Home Gear BY NICOLE FRIEDMAN

Americans are snapping up millions of new security cameras and smoke detectors connected to their Wi-Fi networks. But so far insurers aren’t persuaded the devices will make homes any safer. The average cost of insuring a home was expected to rise this year despite the gadgets that are intended to prevent billions of dollars in damage and loss. The $84.9 billion U.S. home-insurance industry is resisting widespread price reductions because insurers say there is little data to show the devices can improve security or prompt homeowners to be more active in securing their homes. The home-insurance industry could see billions in revenue evaporate if the new technology dramatically improves home safety over time, potentially outpacing the costs insurers would save from paying out less in claims. Some consumers say internet-connected devices make them feel safer and that insurance companies should encourage their use.

“The insurance companies should provide an incentive,” said Tony Bacon, who outfitted his four-bedroom Chatham, N.J., home with internet-connected security cameras, thermostats and lights. Only his security-alarm system qualifies for an insurance reduction. For some years, insurance companies have lowered home premiums for homeowners who use basic security devices. The question is whether the internet-connected versions of this equipment will be more effective than their analog counterparts. Internet-connected devices include those that alert homeowners when their smoke-detector batteries run low, route doorbell-mounted video to their phones and detect leaky water pipes. Technology-research firm ABI Research expects 360 million shipments of so-called smart-home devices in 2020, up from 79 million shipments this year. Some home insurers are offering small discounts for such devices while they test their effectiveness, but the reductions so far aren’t big enough

to reduce average premiums. The average U.S. home premium is forecast to rise to $1,293 this year, up 5.5% from 2015 and up 61% from 2006, according to trade group Insurance Information Institute. A 2014 study from Morgan Stanley and Boston Consulting Group estimated that smarthome devices could cut potential losses by 40% to 60% and reduce premiums globally by between $32 billion and $47 billion over the next 10 years. Global home-insurance premiums were $160.8 billion in 2013, the study estimates. The push to gather more data from homeowners follows similar efforts by auto-insurance providers. For about a decade auto insurers have been installing devices to monitor how far people drive and how often they slam on the brakes—and using that information to adjust pricing. Drivers can get discounts of as much as 30% if they agree to use the tools. State Farm, the nation’s largest home insurer, provides a 15% reduction attached to certain internet-connected home-security systems, said

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Dar Hakimi, director of innovation. Mr. Hakimi said such devices are preferable to traditional smoke detectors or security systems because it is easier to verify they are installed and working properly. Other insurers say they are encouraging consumers to buy connected-home products, especially if the homeowners agree to share data with the insurance companies. Bostonbased Liberty Mutual Insurance offers discounts in 38 states for customers that use connected security devices or smoke alarms. If the customers allow Liberty Mutual to verify that the devices are working correctly, they can get a larger price cut. American Family Insurance in Madison, Wis., is discounting the cost of Ring Video Doorbells, which have motion sensors, cameras and microphones that allow users to remotely see and speak to visitors. It also is offering to reimburse the insurance deductibles of customers with the doorbells who are burglarized. Those deductibles usually are between $600 and $800, American Family said.

Italy’s government has set up a backstop fund to shore up troubled banks, setting the stage for the rescue of troubled Italian lender Banca Monte dei Paschi di Siena SpA. At a cabinet meeting in the early hours of Friday, the government of Prime Minister Paolo Gentiloni approved the creation of a €20 billion ($20.9 billion) fund to help troubled banks. Shortly afterward, Monte dei Paschi said it will apply to tap this fund for fresh equity to shore up its balance sheet. The government’s decision comes just hours after the Tuscan bank declared that a last-ditch effort to raise capital from private investors has failed. The bank, Italy’s No. 3 lender, attempted to raise €5 billion to stay afloat and avert a government bailout. The government said that if a bank taps the newly created fund, its outstanding junior bonds will be forcibly converted into shares. European rules on bank rescues require that investors suffer at least

some losses. However, under the terms attached to the Italian government’s new fund, the losses suffered by holders of Monte dei Paschi’s junior bonds appear to be fairly limited. The government said that for the Tuscan bank, some junior bonds held mainly by institutional investors will take a 25% haircut on their face value when converted into shares when the bank taps the fund. In the case of those held by retail investors, however, their bond holdings will also be forcibly converted into shares, but at their full value. MPS will swap the shares obtained by retail investors from the forced conversion of their junior bonds with senior bonds and then the government will buy those shares from the bank. A Treasury official said the government believes the mechanism to rescue Monte dei Paschi—which other troubled banks can also tap— abides by European rules, even though the government hasn’t received a specific green light by the European Commission.

ALESSIA PIERDOMENICO/BLOOMBERG NEWS

Less than 1.9 million

Italy Sets Stage For Rescue of MPS

Banca Monte dei Paschi’s headquarters in Siena, Italy.

Democrats Put Pressure on Wells BY EMILY GLAZER Democrats on the Senate Banking Committee demanded Wells Fargo & Co.’s board respond to questions the bank has yet to answer related to its sales practices scandal, according to a letter reviewed by The Wall Street Journal. The senators asked the board for more information about its continuing independent investigation of the alleged fraud that caused the bank to pay a $185 million settlement in September over opening as many as 2.1 million accounts using fictitious or unauthorized customer information. The senators in this latest letter also asked the board for a timeline of when its members learned of the questionable sales tactics, actions the board took to address the problem and reasons why it didn’t investigate sooner, according to the letter. It asked for answers to its 10 questions by Jan. 7. “Continued failure to answer questions—especially basic questions—about the causes and consequences of the fraud that Wells Fargo permitted for many years does nothing to restore the trust of Wells Fargo’s customers and shareholders, many of whom are our constituents,” according to the letter.

Wells Fargo’s board in late September announced its independent investigation alongside moves to rescind a collective $61 million in pay from now-former Chief Executive John Stumpf and former retail banking head Carrie Tolstedt. The board’s independent directors “will take such other actions as they collectively deem appropriate,” according to a statement at the time. The bank neither admitted nor denied the allegations in the settlement Sept. 8.

Lawmakers pushed for more information on the bank’s probe of fraud allegations. The 10 Democratic senators, led by ranking member Sen. Sherrod Brown (D., Ohio), submitted 58 questions to Wells Fargo management on Sept. 29 that they said weren't answered by Mr. Stumpf in two congressional hearings. The bank responded on Nov. 15, but cited the board’s continuing independent investigation as a reason it couldn’t fully answer some questions. A bank spokeswoman at the time said Wells Fargo appreci-

ates Congress’s role and will continue to be responsive to lawmakers as the bank’s board investigation progresses. A person familiar with the board said Thursday that it previously responded to earlier letters from some of the Democratic senators that included some of the same questions. A spokesman for the board reiterated Thursday that the board would make the findings of the investigation public upon its conclusion. In addition to Sen. Brown, the latest letter was jointly submitted by Sens. Jack Reed (D., R.I.), Bob Menendez (D., N.J.), Jon Tester (D., Mont.), Mark Warner (D., Va.), Jeff Merkley (D., Ore.), Elizabeth Warren (D., Mass.), Heidi Heitkamp (D., N.D.) and Joe Donnelly (D., Ind.). They asked the board to identify members of the special committee who are leading the investigation and the criteria to select them, why the board didn’t launch an independent investigation earlier, and the probe’s scope. The senators also sought details on how the board will provide “sufficient transparency into and details of” the investigation to stakeholders and the public, among other questions relating to the sales practices issues.

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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | B7

BIGGEST 1,000 STOCKS How to Read the Stock Tables

The following explanations apply to NYSE, NYSE Arca, NYSE MKT and Nasdaq Stock Market listed securities. Prices are composite quotations that include primary market trades as well as trades reported by Nasdaq OMX BXSM (formerly Boston), Chicago Stock Exchange, CBOE, National Stock Exchange, ISE and BATS. The list comprises the 1,000 largest companies based on market capitalization. Underlined quotations are those stocks with large changes in volume compared with the issueâ&#x20AC;&#x2122;s average trading volume. Boldfaced quotations highlight those issues whose price changed by 5% or more if their previous closing price was $2 or higher.

Footnotes: s-New 52-week high. t-New 52-week low. dd-Indicates loss in the most recent four quarters. FD-First day of trading. h-Does not meet continued listing standards lf-Late filing q-Temporary exemption from Nasdaq requirements. t-NYSE bankruptcy v-Trading halted on primary market. vj-In bankruptcy or receivership or being reorganized under the Bankruptcy Code, or securities assumed by such companies.

Wall Street Journal stock tables reflect composite regular trading as of 4 p.m. and changes in the closing prices from 4 p.m. the previous day. Thursday, December 22, 2016 Stock

Net Sym Close Chg

NYSE ABB ABB 21.19 0.14 AECOM ACM 37.71 -0.05 AES AES 11.78 -0.20 Aflac AFL 70.38 0.08 AT&T T 42.72 0.36 s AXIS Capital AXS 65.82 0.45 AbbottLabs ABT 38.29 0.05 AbbVie ABBV 61.66 0.21 Accenture ACN 117.79 -0.11 AcuityBrands AYI 232.30 1.96 Adient ADNT 57.00 0.38 AdvanceAuto AAP 170.39 -3.12 AdvSemiEngg ASX 4.92 -0.06 Aegon AEG 5.54 0.01 AerCap AER 42.23 -0.80 Aetna AET 124.69 1.34 AffiliatedMgrs AMG 145.88 -1.42 AgilentTechs A 45.97 -0.07 AgnicoEagle AEM 38.12 -0.11 Agrium AGU 100.70 0.91 AirProducts APD 146.09 -1.26 AlaskaAir ALK 89.10 -2.02 Albemarle ALB 88.42 -0.86 Alcoa AA 29.75 -0.68 AlexandriaRealEst ARE 108.52 -0.51 Alibaba BABA 86.80 -2.45 Alleghany Y 612.21 -3.92 Allegion ALLE 65.25 -0.30 Allergan AGN 193.99 ... AllianceData ADS 231.66 -2.02 AllianceBernstein AB 23.40 0.45 AlliantEnergy LNT 37.81 0.12 AllisonTransm ALSN 34.00 -0.20 Allstate ALL 74.48 0.04 AllyFinancial ALLY 19.54 -0.20 Altria MO 67.68 0.41 AlumofChina ACH 10.03 -0.23 Ambev ABEV 4.77 -0.01 Ameren AEE 52.41 0.46 AmericaMovil AMX 12.19 -0.24 AmericaMovil A AMOV 13.02 0.62 AmCampus ACC 48.31 0.23 AEP AEP 63.24 0.44 AmericanExpress AXP 74.58 -0.74 AmericanFin AFG 87.54 0.18 AIG AIG 66.23 -0.43 AmerTowerREIT AMT 106.60 ... AmerWaterWorks AWK 72.44 -0.36 Amerigas APU 46.94 0.95 Ameriprise AMP 111.76 -1.15 AmerisourceBrgn ABC 77.81 -1.04 Ametek AME 49.42 0.12 Amphenol APH 68.28 0.06 AnadarkoPetrol APC 70.77 0.02 ABInBev BUD 102.82 -0.79 AnnalyCap NLY 10.31 0.07 AnteroMidstream AM 30.50 0.92 AnteroResources AR 24.44 -0.03 Anthem ANTM 144.58 -0.40 Aon AON 112.48 0.23 Apache APA 66.74 0.10 ApartmtInv AIV 44.55 0.58 AquaAmerica WTR 30.20 0.01 Aramark ARMK 36.23 -0.04 ArcelorMittal MT 7.38 -0.21 ArcherDaniels ADM 45.18 -0.95 Arconic ARNC 20.07 0.05 AristaNetworks ANET 96.86 -1.09 ArrowElec ARW 71.73 -0.60 AshlandGlobal ASH 108.39 -1.20 Assurant AIZ 93.19 0.87 AstraZeneca AZN 27.18 0.12 s Athene ATH 46.99 1.30 AtmosEnergy ATO 74.66 0.39 Autoliv ALV 111.53 -1.36 AutoZone AZO 799.61 -4.01 Avalonbay AVB 173.72 0.79 Avangrid AGR 37.85 -0.15 AveryDennison AVY 71.37 -0.20 Aviva AV 11.69 -0.19 Avnet AVT 48.14 -0.70 AxaltaCoating AXTA 27.05 -0.22 BB&T BBT 47.31 -0.09 BCE BCE 43.08 0.21 BHPBilliton BHP 35.64 -0.55 BHPBilliton BBL 31.26 -0.74 BP BP 36.91 0.13 BRF BRFS 14.01 0.08 BT Group BT 23.18 -0.08 BakerHughes BHI 65.61 0.72 Ball BLL 76.45 0.14 BancoBilbaoViz BBVA 6.74 ... BancodeChile BCH 68.45 -0.46 BcoSantChile BSAC 21.61 0.05 BancoSantander SAN 5.11 -0.04 BanColombia CIB 36.34 0.32 BankofAmerica BAC 22.54 -0.09 BankofMontreal BMO 72.17 -0.22 BankNY Mellon BK 47.61 0.06 BkNovaScotia BNS 56.48 -0.07 Barclays BCS 11.07 -0.20 Bard CR BCR 220.68 1.02 BarrickGold ABX 14.12 -0.04 BaxterIntl BAX 44.16 0.07 BectonDickinson BDX 165.91 -0.06 Berkley WRB 66.75 0.03 BerkHathwy A BRK/A 249000369.00 BerkHathwy B BRK/B 166.03 0.08 BerryPlastics BERY 50.12 -0.46 BestBuy BBY 45.10 -1.72 Bio-RadLab A BIO 182.57 0.75 BlackRock BLK 387.12 -6.41 BlackstoneGroup BX 27.99 -0.51 s BoardwalkPipe BWP 18.20 0.45 Boeing BA 157.46 -0.02 BoozAllen BAH 36.29 -0.06 BorgWarner BWA 39.63 -0.94 BostonProperties BXP 124.53 -0.06 BostonScientific BSX 21.66 0.18 Braskem BAK 20.28 -0.25 Bristol-Myers BMY 58.76 0.07 BrixmorProperty BRX 24.14 -0.35 BroadridgeFinl BR 65.59 ... BrookfieldMgt BAM 33.04 -0.30 BrookfieldInfr BIP 33.48 0.31 Brown&Brown BRO 44.76 -0.01 Brown-Forman A BF/A 46.74 -0.17 Brown-Forman B BF/B 44.95 -0.39 BuckeyePtrs BPL 66.05 0.89

Stock

Net Sym Close Chg

Bunge BG 71.46 BurlingtonStores BURL 85.79 CBRE Group CBG 31.74 CBS B CBS 64.50 CF Industries CF 30.11 CGI Group GIB 46.79 CIT Group CIT 43.79 CMS Energy CMS 41.59 s CNA Fin CNA 42.07 CNOOC CEO 125.26 CPFLEnergia CPL 15.20 CRH CRH 33.20 CSRA CSRA 31.87 CVS Health CVS 78.79 CabotOil COG 22.30 CamdenProperty CPT 82.77 Cameco CCJ 10.60 CampbellSoup CPB 60.21 CIBC CM 83.18 CanNtlRlwy CNI 67.78 CanNaturalRes CNQ 32.44 CanPacRlwy CP 143.47 Canon CAJ 29.14 CapitalOne COF 89.19 CardinalHealth CAH 72.11 Carlisle CSL 111.37 CarMax KMX 64.06 Carnival CCL 52.41 Carnival CUK 51.49 Caterpillar CAT 94.12 Celanese A CE 80.28 Cemex CX 7.77 Cencosud CNCO 8.32 CenovusEnergy CVE 15.43 Centene CNC 58.06 CenterPointEner CNP 24.84 CentraisElBras EBR 6.53 CenturyLink CTL 23.87 ChesapeakeEner CHK 7.34 Chevron CVX 118.77 ChinaEastrnAir CEA 22.37 ChinaLifeIns LFC 12.81 ChinaMobile CHL 52.49 ChinaPetrol SNP 72.11 ChinaSoAirlines ZNH 26.43 ChinaTelecom CHA 46.30 ChinaUnicom CHU 11.39 Chipotle CMG 391.16 Chubb CB 133.31 ChunghwaTelecom CHT 31.58 Church&Dwight CHD 44.51 Cigna CI 136.97 CimarexEnergy XEC 136.77 s Citigroup C 60.49 s CitizensFin CFG 36.00 Clorox CLX 120.51 Coach COH 34.24 Coca-Cola KO 41.55 t Coca-Cola Femsa KOF 62.57 Colgate-Palmolive CL 66.37 Comerica CMA 69.02 SABESP SBS 8.25 CSC CSC 60.67 s ConagraBrands CAG 39.29 ConchoRscs CXO 136.49 ConocoPhillips COP 51.54 ConEd ED 73.50 ConstBrands A STZ 148.74 ConstBrands B STZ/B150.23 ContinentalRscs CLR 52.60 Cooper COO 173.10 CoreLabs CLB 119.27 Corning GLW 24.75 Coty COTY 18.73 Credicorp BAP 156.71 CreditSuisse CS 14.93 CrescentPoint CPG 13.75 CrestwoodEquity CEQP 24.40 CrownCastle CCI 87.13 CrownHoldings CCK 53.84 Cullen/Frost CFR 88.77 Cummins CMI 138.23 DDR DDR 14.87 DTE Energy DTE 98.51 Danaher DHR 78.33 Darden DRI 74.57 DaVita DVA 64.85 Deere DE 103.09 DelphiAutomotive DLPH 67.25 DeltaAir DAL 49.80 DeutscheBank DB 18.54 DevonEnergy DVN 46.90 Diageo DEO 103.30 Dick's DKS 52.85 DigitalRealty DLR 96.19 DiscoverFinSvcs DFS 72.42 Disney DIS 105.42 DollarGeneral DG 74.36 DominionRscs D 76.63 Domino's DPZ 161.33 Donaldson DCI 42.82 DouglasEmmett DEI 35.49 Dover DOV 75.60 DowChemical DOW 58.75 DrPepperSnap DPS 90.51 DrReddy'sLab RDY 44.12 DuPont DD 75.07 DukeEnergy DUK 77.77 DukeRealty DRE 25.95 ENI E 31.50 EOG Rscs EOG 103.13 EQT EQT 66.62 EQT Midstream EQM 74.53 EastmanChem EMN 75.93 Eaton ETN 68.07 Ecolab ECL 118.59 Ecopetrol EC 9.03 EdisonInt EIX 72.13 EdwardsLife EW 91.80 EmersonElectric EMR 56.69 EnbridgeEnPtrs EEP 25.08 Enbridge ENB 42.76 Encana ECA 12.21 Endurance ENH 92.48 EnelAmericas ENIA 8.05 EnelGenChile EOCC 18.73 Energen EGN 59.26 EnergyTrfrEquity ETE 19.29 EnergyTrfrPtrs ETP 36.20 Enerplus ERF 9.44 EnLinkMidPtrs ENLK 18.26 Entergy ETR 73.18 EnterpriseProd EPD 26.99

Stock

Net Sym Close Chg

-0.62 EnvisionHlthcr EVHC 64.96 -0.68 EFX 118.91 0.26 -1.83 Equifax -0.22 EquityLife ELS 70.19 -0.10 -0.13 EquityResdntl EQR 62.97 0.01 1.21 EssexProp ESS 229.59 2.01 -0.48 EsteeLauder EL 78.78 0.66 0.13 EverestRe RE 217.23 0.75 0.03 EversourceEner ES 55.44 0.49 EXC 35.31 0.17 0.02 Exelon -1.33 ExtraSpaceSt EXR 74.36 0.78 0.25 ExxonMobil XOM 90.87 0.59 FMC 56.98 -0.20 -0.22 FMC -0.13 FMC Tech FTI 35.25 0.29 FDS 162.88 -2.30 -1.06 FactSet -0.14 FederalRealty FRT 139.71 -0.09 FDX 190.89 -1.23 1.38 FedEx RACE 57.74 -0.29 0.12 Ferrari ... FiatChrysler FCAU 8.83 -0.22 -0.26 FibriaCelulose FBR 9.15 -0.09 -0.22 FidelityNatlFin FNF 34.40 -0.18 -0.26 FNFV Group FNFV 13.65 -0.10 -1.54 FidelityNtlInfo FIS 75.80 -0.89 FDC 14.52 -0.17 0.09 FirstData -1.25 FirstRepBank FRC 91.20 -0.09 -0.51 FirstEnergy FE 31.22 -0.20 -1.09 FleetCorTech FLT 142.40 0.47 -1.94 Flowserve FLS 49.16 -0.22 FLR 53.62 -0.54 -0.68 Fluor -0.67 FomentoEconMex FMX 75.64 0.10 72.13 -2.95 0.30 FootLocker FL 12.40 -0.24 -1.02 FordMotor F -0.28 ForestCIty A FCE/A 20.07 -0.14 -0.24 ForestCity B FCE/B 25.94 -0.40 FTS 30.76 0.42 -0.15 Fortis FTV 54.09 -0.03 -0.44 Fortive 0.19 FortBrandsHome FBHS 54.98 -0.41 -0.11 Franco-Nevada FNV 57.26 0.32 0.10 FranklinRscs BEN 40.28 -0.13 -0.09 Freeport-McMoRan FCX 13.80 -0.25 0.86 FreseniusMed FMS 42.34 0.25 AJG 51.98 0.25 -0.61 Gallagher -0.21 Gap GPS 22.48 -1.27 -0.30 Gartner IT 103.29 -0.90 -0.53 Gazit-Globe GZT 8.50 -0.18 -0.53 GeneralDynamics GD 174.53 0.43 -0.55 GeneralElec GE 31.82 -0.07 -0.10 GeneralGrowthProp GGP 24.54 -0.58 -2.34 GeneralMills GIS 62.46 0.07 -0.01 GeneralMotors GM 35.69 -0.73 -0.02 GenuineParts GPC 96.57 -1.26 -0.06 Gildan GIL 25.92 -0.53 -0.10 GlaxoSmithKline GSK 38.28 0.15 0.84 GlobalPayments GPN 70.03 -0.84 -0.26 Goldcorp GG 12.36 -0.06 -0.02 GoldmanSachs GS 240.12 -1.32 0.95 Grainger GWW 238.19 -0.10 -1.42 GreatPlainsEner GXP 27.62 -0.12 -0.02 GpoAvalAcciones AVAL 7.84 0.04 0.12 GpFinSantandMex BSMX 7.33 0.12 0.32 GrupoTelevisa TV 20.88 -0.21 -0.13 GuangshenRail GSH 30.24 -0.23 0.28 HCAHoldings HCA 73.96 0.44 -0.38 HCP HCP 29.18 -0.19 1.29 HDFC Bank HDB 60.86 0.27 -0.11 HP HPQ 15.14 ... 0.06 HSBCHoldings HSBC 40.34 -0.18 0.38 Halliburton HAL 55.07 0.11 -2.97 Hanesbrands HBI 21.72 -0.36 -4.02 HarleyDavidson HOG 57.84 -1.87 0.92 HarmanIntlInds HAR 110.85 0.10 -1.52 Harris HRS 103.70 -0.09 -0.94 HartfordFinl HIG 48.16 -0.05 -0.08 Helmerich&Payne HP 78.65 -0.85 -0.03 Hershey HSY 104.44 1.27 -1.61 Hess HES 63.71 0.15 -0.20 HewlettPackard HPE 23.76 -0.13 -0.12 HiltonWorldwide HLT 27.45 -0.28 -0.25 HollyFrontier HFC 32.63 0.76 ... HomeDepot HD 135.43 -1.40 0.13 HondaMotor HMC 30.17 0.15 0.98 Honeywell HON 116.92 -0.28 -0.47 HormelFoods HRL 35.15 0.39 -0.06 DR Horton DHI 27.76 -0.39 0.30 HostHotels HST 18.80 -0.37 -0.03 HuanengPower HNP 25.10 -0.16 -1.17 Hubbell HUBB 117.81 -0.03 0.18 Humana HUM 202.93 3.13 ... s HuntingtonIngalls HII 187.90 3.05 -1.94 HyattHotels H 56.37 -0.38 -1.12 ICICI Bank IBN 7.45 -0.04 -0.17 ING Groep ING 14.25 -0.04 0.33 Invesco IVZ 31.05 -0.39 -0.60 IDEX IEX 90.86 -0.04 -4.46 IllinoisToolWks ITW 124.65 -0.05 INFY 14.80 -0.17 0.87 Infosys 76.41 -0.32 -0.47 Ingersoll-Rand IR INGR 126.58 0.82 -0.14 Ingredion ICE 57.28 -0.05 -3.07 ICE 0.39 InterContinentl IHG 43.65 0.05 IBM 167.06 -0.27 -1.30 IBM -0.13 IntlFlavors IFF 119.35 1.11 -0.66 IntlGameTech IGT 25.83 -0.03 IP 53.79 -0.16 -0.29 IntlPaper -0.33 Interpublic IPG 23.58 0.08 0.21 IronMountain IRM 32.41 0.17 4.00 0.08 -0.71 IsraelChemicals ICL -0.39 ItauUnibanco ITUB 9.68 0.23 0.77 s JPMorganChase JPM 86.89 0.14 -0.04 JacobsEngineering JEC 58.35 -0.11 -0.01 JamesHardie JHX 15.79 0.14 JNJ 115.44 0.13 0.58 J&J -0.44 JohnsonControls JCI 42.61 -0.20 JOY 28.01 ... 0.46 JoyGlobal -0.46 JuniperNetworks JNPR 28.26 -0.20 0.25 KAR Auction KAR 42.44 -0.18 KB 36.51 -0.56 -0.78 KB Fin KKR 16.34 -0.28 -0.17 KKR KT 14.32 0.01 0.39 KT 0.37 KSCitySouthern KSU 85.29 -0.20 K 73.66 0.51 -0.23 Kellogg KEY 18.36 0.04 0.70 KeyCorp 0.53 KeysightTechs KEYS 36.21 0.06 -0.09 KilroyRealty KRC 73.71 -1.29 0.04 KimberlyClark KMB 115.02 0.41 -0.06 KimcoRealty KIM 25.18 -0.13 -0.14 KinderMorgan KMI 20.99 -0.18 KSS 49.94 -2.61 0.80 Kohl's 0.53 KoninklijkePhil PHG 30.23 0.22 0.81 KoreaElcPwr KEP 19.04 -0.12 KR 34.98 -0.23 0.06 Kroger KYO 50.27 -0.34 0.47 Kyocera LB 66.61 -2.12 0.28 L Brands 0.06 LGDisplay LPL 13.22 -0.17

New Highs and Lows | WSJ.com/newhighs

Thursday, December 22, 2016 52-Wk % Sym Hi/Lo Chg Stock

NYSE highs - 89 AXIS Capital AXS AdvancePierre APFH AmerMidstreamPtrs AMID AresDynamicCredit ARDC Athene ATH BancorpSouth BXS BaringsGlbShtDurHY BGH BlackStoneMin BSM BlkrkFltRt InTr BGT BlckRkEnDivTr BDJ BlackstoneLSCrInco BGX BlackstnGSOSrFloat BSL BoardwalkPipe BWP CNA Fin CNA CONE Midstream CNNX CampingWorld CWH CastlightHealth CSLT CedarFairRec FUN Chemed CHE Citigroup C CitizensFin CFG ClaytonWilliams CWEI ClearBridgeAmEn CBA CommBkSys CBU ConagraBrands CAG CushingTotRetFd SRV CustomersBancorp CUBI DCP Midstream DPM DTE EnergyDebF DTY EmployersHldgs EIG EnbridgeEnergy EEQ EnLinkMid ENLC EnPro NPO EraGroup ERA FCB Financial FCB FairmountSantrol FMSA FirstCmwlthFin FCF GlobalBrass BRSS Griffon GFF HanoverIns THG HarvestNatRes HNR Hilltop HTH HuntingtonIngalls HII Inphi IPHI InvenSense INVN InvescoCreditOpps VTA InvescoSeniorIncm VVR JPMorganChase JPM JPMorganWt JPM/WS KayneAndersonEnTR KYE KayneAndMidstrEngy KMF MainStreetCap MAIN NGL Energy NGL NatlBankHoldings NBHC NuSTAR EnPfdA NSpA NuSTAR GP NSH NuveenDow30Dyn DIAX NuvS&P500DynOver SPXX NuvShrtDurCrOppFd JSD OCI Partners OCIP ONEOK Partners OKS PNC Fin Wt PNC/WS PinnacleFoods PF

65.86 29.38 17.85 15.07 47.32 31.45 19.03 19.86 14.24 8.24 15.95 18.25 18.23 42.24 23.93 33.31 5.35 64.90 162.96 60.93 36.16 124.73 9.26 61.98 39.43 13.63 36.53 38.92 25.25 38.90 25.77 19.40 68.93 16.61 47.85 10.97 14.29 35.75 26.45 91.74 6.43 30.06 189.17 48.46 12.85 12.20 4.62 87.17 45.49 12.18 16.40 37.51 21.50 32.07 26.90 28.40 15.13 14.39 17.78 8.40 46.27 51.00 53.00

0.7 0.9 -0.8 0.5 2.8 1.0 0.4 -1.3 -0.4 -0.4 1.0 0.1 2.5 ... 0.8 -0.2 1.9 0.5 -0.9 -0.4 -0.1 -1.4 2.1 ... 3.4 1.7 0.7 2.3 0.4 0.6 1.7 1.3 -0.1 4.5 1.2 1.9 ... -0.3 -0.6 0.3 5.8 -0.9 1.6 -2.3 0.5 -0.1 -0.2 0.2 0.5 2.3 1.8 0.1 ... -0.1 0.3 1.3 -0.3 1.6 1.2 3.1 1.4 -0.4 0.8

52-Wk % Sym Hi/Lo Chg Stock

PioneerFR PHD ProsperityBcshs PB RadianGroup RDN RenaissanceRe RNR ResourceCapPfdA RSOpA ResourceCapPfdC RSOpC RiceMidstream RMP RudolphTech RTEC Schlumberger SLB SonicAutomotive SAH StarGas SGU STMicroelec STM SunTrustBanks STI SynovusFin SNV TCF Fin TCB TimeWarner TWX TortoiseEnerInd NDP TortPwEnInfrFd TPZ TriNet TNET US Silica SLCA Univar UNVR VoyaPrimeRate PPR WabashNational WNC WesternGasPtrs WES Willbros WG WooriBank WF

11.98 73.39 18.11 136.04 24.50 23.69 24.36 23.90 87.00 24.30 11.00 11.27 56.30 41.74 19.95 96.57 16.49 22.80 26.64 56.50 28.09 5.58 16.01 60.21 3.43 35.86

0.2 0.1 0.7 0.7 1.7 0.3 2.7 1.3 0.3 -1.7 3.6 -0.6 0.2 0.1 -0.8 0.5 1.7 2.7 3.4 0.7 1.3 0.4 0.5 1.5 -2.4 5.7

NYSE lows - 20 Abercrombie&Fitch ANF AdeptusHealth ADPT AmplifySnack BETR Coca-Cola Femsa KOF EtnVnTaxAdvBd&Opt EXD eHiCarServices EHIC 58.com WUBA GNC Holdings GNC Guess GES KateSpade KATE KiteRealty KRG MexicoFund MXF NuvCA TxF NXC SCE IV Pfd SCEpJ Tri-Cont Pfd TYp UnderArmour A UAA WellsFargoPfdQ WFCpQ WestAssetMuni MTT WildHorseResource WRD YingliGreenEner YGE

11.98 7.66 8.86 61.00 11.31 8.11 28.77 12.08 12.11 14.02 22.96 13.73 14.57 23.42 47.50 29.14 23.58 21.71 14.36 2.75

-6.3 0.1 -1.2 0.2 -2.3 -1.2 -0.9 -6.6 -6.0 -4.0 -1.0 -1.4 -0.2 0.3 0.4 -2.2 0.4 -0.9 -0.7 -3.1

NYSE Arca highs - 19 AdvShsPeritusHiYd HYLD 35.96 0.3 AlerianEnergyInfr ENFR 23.90 0.5 DeutscheXAustralia DBAU 25.97 1.6 ETRACS2xMLevS&PMLP MLPZ 57.57 2.9 FlexSharesCurrHdDM TLDH 25.85 0.7 iShCurHdgMSCIEAFE HSCZ 25.71 0.3 iShIntRtHdgCorpBd LQDH 94.33 0.1 iShIntRtHdgHiYdBd HYGH 90.11 0.2 iShIRHdg10+ CLYH 24.97 0.8 OppenheimerGlbGwth RGRO 47.39 3.5 37.14 0.5 PwrshsDynSemi PSI ProSharesShtVIXST SVXY 98.19 -1.8 ProShrUlSemi USD 142.05 0.6 123.40 1.4 PrShrUltrTelcm LTL SPDRBlackstoneSrLn SRLN 47.62 0.1

52-Wk % Sym Hi/Lo Chg

SPDRSSgAMultiAsset RLY SPDR S&P Semi XSD WisdomTreeEurHdgSC EUSC WisdomTreeIntlHdg HDWM

25.54 58.02 26.03 25.31

-0.2 -0.2 -0.3 0.1

NYSE Arca lows - 15 iPathS&P500VIXST VXX DeutscheXMSCMexico DBMX DrxSmcdBear 3x SOXS iPathAsian&GulfCur PGD iShCurHdgMSCIMex HEWW iShEdgeMSCIMinVlAs AXJV iShMBSETF MBB iShMSCIMalaysiaETF EWM JohnHanMultDev JHMD ProSharesUltVIXST UVXY ProShrUSSemi SSG ProShsVIXSTFut VIXY SummitWaterETF WTRX UBSMLPShort MLPS VanguardIntrm BIV

23.74 19.28 10.01 47.34 19.99 28.29 105.52 27.58 24.73 7.58 20.59 19.79 25.03 11.62 82.17

1.8 0.1 -1.3 -0.4 ... -0.7 -0.1 -1.0 -0.1 2.9 -0.3 1.5 -1.9 -4.4 -0.4

NYSE MKT highs - 3 NatlHealthcare NHC SagaComm SGA WesternCopper WRN

78.75 -1.4 51.20 ... 1.16 -0.9

NYSE MKT lows - 3 AdCareHealth CastleBrands Hemispherx

ADK ROX HEB

1.44 -2.0 0.67 -2.2 0.65 -5.5

Nasdaq highs - 127 AdvEnergyInds AEIS AdvMicroDevices AMD AirTransportSvcs ATSG AmCapSeniorFloat ACSF AmNtlBcsh AMNB AndinaAcqnIIWt ANDAW ApogeeEnt APOG ApolloEducation APOL AppliedMaterials AMAT AtlCapitalBcshs ACBI BCB Bancorp BCBP B RileyFin RILY BancFirst BANF BankofOzarks OZRK BankFinancial BFIN Banner BANR BarrettBus BBSI BostonPrivFin BPFH Brooks Auto BRKS CVB Fin CVBF CapitalBankFin CBF CarolinaTrBcshs CART CarrolsRestr TAST CentralGardenA CENTA CentralGarden CENT ColonyBankcorp CBAN ColumbiaBanking COLB CmntyTrBcp CTBI ElectrumSpecWt ELECW EntegraFin ENFC

56.98 11.75 17.29 12.10 36.25 0.23 54.08 9.93 33.62 18.95 13.50 19.40 94.23 54.16 15.12 56.20 65.81 16.48 17.63 23.19 40.00 6.68 14.90 32.01 34.26 12.60 45.27 47.85 0.33 20.35

-0.3 1.1 0.5 1.9 -0.8 11.4 -0.5 0.1 1.3 0.5 -0.4 -0.3 -0.4 0.8 ... 0.5 1.2 -0.3 3.9 0.2 1.3 4.5 0.3 2.7 2.7 0.8 0.2 1.2 17.4 0.5

Net Sym Close Chg

LINE LN 33.71 L-3 Comm LLL 153.80 LabCpAm LH 126.82 LambWeston LW 36.33 LasVegasSands LVS 54.22 Lazard LAZ 41.46 Lear LEA 133.61 Leggett&Platt LEG 49.50 Leidos LDOS 51.08 Lennar A LEN 42.92 Lennar B LEN/B 34.52 LennoxIntl LII 156.12 LeucadiaNatl LUK 23.50 Level3Comm LVLT 56.41 LibertyProperty LPT 39.02 EliLilly LLY 73.26 LincolnNational LNC 67.43 LiveNationEnt LYV 27.10 LloydsBanking LYG 3.13 LockheedMartin LMT 252.80 Loews L 47.68 Lowe's LOW 73.01 Luxottica LUX 53.04 LyondellBasell LYB 87.53 M&T Bank MTB 156.03 MDU Rscs MDU 29.13 MGM Resorts MGM 29.33 MPLX MPLX 33.55 MSCI MSCI 78.49 MSC Industrial MSM 93.85 Macerich MAC 68.35 MacquarieInfr MIC 82.43 Macy's M 36.17 MagellanMid MMP 75.39 MagnaIntl MGA 43.97 Mallinckrodt MNK 52.03 Manpower MAN 89.98 ManulifeFin MFC 18.11 MarathonOil MRO 18.04 MarathonPetrol MPC 50.34 MarineHarvest MHG 17.67 Markel MKL 909.39 Marsh&McLennan MMC 68.41 MartinMarietta MLM 224.15 Masco MAS 32.03 Mastercard MA 104.31 McCormick MKC 92.86 McCormickVtg MKC/V 92.89 McDonalds MCD 123.72 McKesson MCK 140.34 MeadJohnson MJN 71.11 Mednax MD 67.82 Medtronic MDT 71.74 Merck MRK 59.58 MetLife MET 54.43 MettlerToledo MTD 423.07 MichaelKors KORS 42.75 MidAmApt MAA 95.39 MitsubishiUFJ MTU 6.28 MizuhoFin MFG 3.67 MobileTeleSys MBT 9.03 Mobileye MBLY 34.14 MohawkIndustries MHK 202.99 MolsonCoors A TAP/A 96.68 MolsonCoors B TAP 96.84 Monsanto MON 105.33 Moody's MCO 95.86 MorganStanley MS 42.79 Mosaic MOS 29.35 MotorolaSolutions MSI 83.72 MurphyOil MUR 32.30 NCR NCR 41.47 NTTDoCoMo DCM 23.23 NVR NVR 1665.50 NationalGrid NGG 57.84 NatlOilwell NOV 38.90 NatlRetailProp NNN 42.79 NewOrientalEduc EDU 41.97 NY CmntyBcp NYCB 15.91 NewellBrands NWL 45.54 NewfieldExpln NFX 42.50 NewMarket NEU 424.26 NewmontMining NEM 31.44 NextEraEnergy NEE 118.90 NielsenHoldings NLSN 42.77 Nike NKE 52.14 NipponTelegraph NTT 42.37 NiSource NI 22.43 NobleEnergy NBL 39.53 Nokia NOK 4.72 NomuraHoldings NMR 6.06 Nordstrom JWN 48.24 NorfolkSouthern NSC 108.78 NorthropGrumman NOC 233.72 Novartis NVS 71.77 NovoNordisk NVO 35.54 Nucor NUE 61.63 NuSTAREnergy NS 50.00 OGE Energy OGE 33.77 ONEOK OKE 57.91 s ONEOK Partners OKS 46.18 OccidentalPetrol OXY 72.36 Och-Ziff OZM 2.99 OmegaHealthcare OHI 30.24 Omnicom OMC 86.15 Oracle ORCL 38.96 Orange ORAN 14.74 OrbitalATK OA 87.38 Orix IX 78.69 OwensCorning OC 52.09 PG&E PCG 61.28 PLDT PHI 26.68 PNC Fin PNC 117.43 POSCO PKX 55.70 PPG Ind PPG 95.00 PPL PPL 34.46 PVH PVH 90.36 PackagingCpAm PKG 85.98 PaloAltoNtwks PANW 125.06 ParkerHannifin PH 142.80 ParsleyEnergy PE 35.71 Pearson PSO 10.03 PembinaPipeline PBA 31.59 Pentair PNR 56.82 PepsiCo PEP 105.35 PerkinElmer PKI 52.34 Perrigo PRGO 84.34 PetroChina PTR 75.05 PetroleoBrasil PBR 9.88 PetroleoBrasilA PBR/A 8.46 Pfizer PFE 32.34 PhilipMorris PM 91.61 Phillips66 PSX 87.56 s PinnacleFoods PF 52.94 PinnacleWest PNW 77.60 PioneerNatRscs PXD 186.94 PlainsAllAmPipe PAA 33.04 PolarisIndustries PII 79.67 PostHoldings POST 78.83 Potash POT 18.13 Praxair PX 117.19 PrincipalFin PFG 58.42 Procter&Gamble PG 84.47 Progressive PGR 35.62 Prologis PLD 51.90 PrudentialFin PRU 105.65 Prudential PUK 39.26 PublicServiceEnt PEG 43.68 PublicStorage PSA 217.26 PulteGroup PHM 18.55 QuantaServices PWR 34.70 QuestDiag DGX 91.81 QuintilesIMS Q 74.95 RELX RENX 16.55 RELX RELX 17.73

Stock

The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSE MKT and Nasdaq Stock Market stocks that hit a new 52-week intraday high or low in the latest session. % CHG-Daily percentage change from the previous trading session.

Stock

Stock

-0.23 -0.21 -1.61 1.31 -0.30 -0.61 -2.40 -0.13 -0.28 -0.55 -0.35 -2.56 -0.28 0.34 -0.13 0.01 -0.35 -0.10 -0.08 0.28 -0.22 -1.18 -0.41 -0.24 0.12 0.02 0.05 0.26 -1.17 0.20 -0.23 -0.21 -1.34 0.83 -0.68 -0.40 -0.51 -0.25 -0.04 1.35 -0.21 4.64 0.10 -1.30 -0.76 0.14 -0.36 -0.44 0.54 -1.25 -0.55 1.93 0.16 0.15 -0.15 0.01 -1.46 1.06 -0.04 -0.04 -0.09 -1.06 -1.88 -0.11 -0.47 0.12 -0.63 -0.58 0.57 -0.28 -0.37 -0.28 0.16 0.16 -0.06 0.05 -0.13 -0.27 -0.02 -0.63 -0.98 -5.41 -0.11 0.30 -0.49 -0.16 0.45 0.10 -0.07 -0.04 -0.05 -2.97 0.73 0.57 0.26 0.15 -0.51 0.88 0.20 -0.63 0.65 0.20 0.07 0.01 0.21 0.13 ... 0.41 -0.54 -0.77 0.16 -0.06 -0.21 -0.26 -0.87 0.03 -2.14 -0.53 -1.05 0.41 0.19 -0.12 0.16 -0.24 0.65 -0.75 -0.45 -1.03 -0.05 -0.11 -0.06 0.30 0.78 0.44 0.54 2.10 0.23 -1.06 -0.07 0.14 -1.34 -0.69 0.19 -0.11 ... -0.82 -0.08 0.09 2.13 -0.60 -0.33 -0.23 -0.49 0.05 0.05

52-Wk % Sym Hi/Lo Chg

EnterpriseFinSvcs EFSC FarmersCapBk FFKT FidelitySouthern LION FirstBancorp FNLC FirstBusey BUSE FirstHawaiian FHB FirstMidwestBncp FMBI FirstSavingsFin FSFG FT Nasd100Tech QTEC FT NasdSemicon FTXL FlushingFin FFIC Forterra FRTA FulgentGenetics FLGT FullHouse FLL GlobalIndemnity GBLI GreenBancorp GNBC GuarantyBncp GBNK HanmiFinancial HAFC HawaiianHoldings HA HealthInsInnov HIIQ HeritageFin HFWA HopeBancorp HOPE HorizonBancorp HBNC Impinj PI IndepBankMI IBCP Inogen INGN iShPHLXSemicond SOXX JM Global Wt WYIGW KinsaleCapital KNSL LakelandFin LKFN LawsonProducts LAWS LeMaitreVascular LMAT LoralSpace LORL LumosNetworks LMOS MIAcquisitionsUn MACQU Macatawa MCBC MagellanPetrol MPET MagyarBancorp MGYR MainSourceFncl MSFG MerchantsBcshsVT MBVT MicronTech MU Microsoft MSFT Misonix MSON Multi-Color LABL NBT Bancorp NBTB NationalCommerce NCOM NatlInstruments NATI NeuroDerm NDRM NutraceuticalIntl NUTR NVIDIA NVDA OceanFirstFin OCFC OmegaFlex OFLX OrigoAcqnWt OACQW OritaniFinancial ORIT PB Bancorp PBBI PacificPremBncp PPBI PacificSpecialWt PAACW People'sUtahBncp PUB PeoplesBncpOH PEBO PeoplesBncpNC PEBK PeoplesFin PFBX Plexus PLXS ProgressSoftware PRGS RBC Bearings ROLL RaPharm RARX RepublicFirstBncp FRBK S&T Bancorp STBA SandySpringBncp SASR SeacoastBkgFL SBCF SierraBancorp BSRR SmartSand SND SpartanNash SPTN StaarSurgical STAA StateNational SNC StockYardsBncp SYBT StonegateBank SGBK SummitStateBk SSBI SussexBancorp SBBX

42.45 42.45 24.24 32.00 30.44 35.42 25.34 44.98 53.72 23.50 29.57 21.98 12.15 2.24 38.96 15.50 24.50 35.40 60.90 16.20 26.48 22.50 28.36 41.91 21.80 68.69 125.69 0.23 33.71 47.80 25.80 25.19 42.15 15.71 10.21 10.63 10.00 11.95 34.75 54.50 23.49 64.10 10.45 79.75 42.49 37.40 30.78 23.10 35.58 108.87 30.49 64.91 0.35 18.50 9.95 34.90 0.30 27.85 32.98 25.20 16.35 54.80 32.45 94.78 16.56 8.90 39.11 40.75 22.47 27.04 16.17 39.96 11.50 14.37 46.50 43.13 15.15 21.95

0.8 1.1 1.5 -0.3 0.5 0.6 0.5 1.2 ... 0.2 0.2 3.7 5.0 5.2 -1.2 2.3 3.8 0.1 -1.6 9.2 ... 0.3 0.8 2.4 0.5 3.2 0.5 10.0 1.4 0.4 -3.3 4.4 0.4 -0.7 1.3 1.0 12.8 8.1 1.0 -0.6 12.7 ... 6.1 ... -0.4 -1.4 1.6 9.0 1.6 1.2 2.3 2.7 10.0 1.1 0.5 1.6 64.2 -1.3 -1.5 2.3 ... -0.7 -1.0 -1.1 5.0 1.1 0.4 0.6 -0.2 0.1 -2.3 0.3 1.8 -1.1 0.1 0.2 1.7 10.1

Stock

Net Sym Close Chg

Stock

Net Sym Close Chg

Net Sym Close Chg

Stock

Stock

Net Sym Close Chg

Stock

Net Sym Close Chg

Net Sym Close Chg

Stock

CPRT 55.37 -0.89 LamarAdvertising LAMR 67.96 -0.24 SS&C Tech SSNC 28.91 -0.34 RPM RPM 53.79 -0.22 UnumGroup UNM 44.53 -0.07 ZayoGroup ZAYO 33.22 -0.13 Copart SIVB 173.43 1.12 VER 8.35 -0.03 ZimmerBiomet ZBH 101.57 -0.09 CoStarGroup CSGP 189.96 -0.74 LibertyBroadbandA LBRDA 73.07 0.11 SVB Fin RSP Permian RSPP 45.32 0.47 VEREIT SABR 24.79 -0.36 VFC 53.54 -1.05 Zoetis COST 162.07 -0.97 LibertyBroadbandC LBRDK 74.87 -0.03 Sabre RalphLauren RL 90.73 -2.08 VF ZTS 53.26 0.14 Costco V Ctrip.com CTRP 40.07 -0.63 LibertyGlobal A LBTYA 30.82 -0.24 ScrippsNetworks SNI 72.60 0.47 77.90 -0.24 RangeResources RRC 34.22 0.01 Visa STX 39.02 0.11 DISH Network DISH 59.07 -0.51 LibertyGlobal C LBTYK 29.83 -0.19 Seagate RaymondJames RJF 71.44 -1.20 VailResorts MTN 163.25 2.13 VALE 7.79 -0.12 DentsplySirona XRAY 59.13 -0.65 LibertyLiLAC A LILA 22.45 0.15 SeattleGenetics SGEN 60.66 -0.72 Raytheon RTN 143.31 0.75 Vale SHPG 166.27 -2.56 DXCM 62.10 -1.64 LibertyLiLAC C LILAK 21.59 0.07 Shire RealtyIncome O 56.33 0.09 ValeantPharm VRX 14.27 0.07 AGNC Invt AGNC 18.17 0.08 DexCom Ansys ANSS 92.47 -2.18 DiamondbackEner FANG 102.73 1.28 LibertyQVC A QVCA 20.02 -0.19 SignatureBank SBNY 150.27 1.90 RedHat RHT 68.71-11.08 ValeroEnergy VLO 68.72 0.79 SIRI 4.51 -0.02 VAL 103.25 -0.15 ARRIS Intl ARRS 30.96 -0.33 DiscoveryComm A DISCA 28.13 -0.31 LibertyVenturesA LVNTA 37.87 -0.23 SiriusXM RegencyCtrs REG 67.33 0.31 Valspar ASML 109.98 -0.07 DiscoveryComm C DISCK 27.41 -0.27 VNTV 58.48 -0.16 ASML RegionsFin RF 14.55 0.02 Vantiv LincolnElectric LECO 78.15 -0.17 Skyworks SWKS 78.15 1.08 SPLK 52.34 -1.10 ReinsuranceGrp RGA 127.21 0.25 VarianMed VAR 90.27 -0.19 ActivisionBliz ATVI 36.44 -0.46 DollarTree DLTR 79.31 -4.75 LinearTech LLTC 62.44 -0.08 Splunk AdobeSystems ADBE 104.72 -0.79 SPLS 9.26 -0.44 VEDL 12.60 -0.60 Dunkin' DNKN 54.04 -0.60 lululemon LULU 64.58 -2.39 Staples RelianceSteel RS 82.14 -0.87 Vedanta s RenaissanceRe RNR 135.84 0.94 VeevaSystems VEEV 41.51 -0.88 AkamaiTech AKAM 67.37 -0.50 E*TRADE ETFC 34.90 -0.17 MarketAxess MKTX 150.20 -3.47 Starbucks SBUX 57.11 -0.33 AlexionPharm ALXN 125.85 6.86 SteelDynamics STLD 36.90 -0.37 Ventas VTR 61.17 0.02 EastWestBancorp EWBC 51.16 0.22 Marriott RepublicServices RSG 57.32 0.03 MAR 83.73 -1.12 VZ 53.65 0.68 AlignTech ALGN 98.21 -0.50 eBay EBAY 29.54 0.18 MarvellTech MRVL 14.29 -0.09 Stericycle SRCL 77.28 0.77 ResMed RMD 61.62 ... Verizon Alkermes ALKS 56.31 -0.54 Symantec SYMC 24.11 -0.14 VermilionEnergy VET 42.57 -0.39 ElectronicArts EA 79.79 0.13 Mattel RestaurantBrands QSR 47.89 -0.28 MAT 28.34 -0.18 VIPS 11.21 -0.16 Alphabet A GOOGL 809.68 -2.52 Equinix EQIX 351.04 1.02 MaximIntProducts MXIM 39.16 -0.02 Synopsys SNPS 59.41 -0.69 ReynoldsAmer RAI 55.95 0.02 Vipshop Alphabet C GOOG 791.26 -3.30 TD Ameritrade AMTD 44.15 -0.10 VMware VMW 79.54 -2.37 Ericsson ERIC 5.70 -0.08 MelcoCrownEnt MPEL 15.72 0.15 RioTinto RIO 38.18 -0.70 TSRO 132.59 -4.22 ... Amazon.com AMZN 766.34 -4.26 ErieIndemnity A ERIE 113.07 0.45 MercadoLibre MELI 156.45 2.05 TESARO RitchieBros RBA 35.25 -2.69 VornadoRealty VNO 103.05 Amdocs DOX 58.23 -1.41 TFS Fin TFSL 19.16 0.10 VoyaFinancial VOYA 40.08 -0.07 Expedia EXPE 114.40 -0.46 RiteAid RAD 8.44 -0.03 UHAL 367.90 -3.86 ExpeditorsIntl EXPD 53.78 -0.21 MicrochipTech MCHP 65.38 0.21 T-MobileUS TMUS 58.08 0.26 RobertHalf RHI 48.89 -0.01 VulcanMaterials VMC 125.31 -0.88 Amerco s MicronTech MU 23.19 2.61 AmericanAirlines AAL 48.69 -0.78 TRowePrice TROW 76.57 -0.85 WABCO WBC 108.65 -1.00 ExpressScripts ESRX 68.43 -0.07 Rockwell ROK 135.57 ... AMGN 146.36 0.19 F5Networks FFIV 144.24 -1.87 Microsemi MSCC 55.76 -0.56 TeslaMotors TSLA 208.45 0.75 RockwellCollins COL 93.95 0.02 EWEC Energy WEC 58.71 0.25 Amgen s Microsoft MSFT 63.55 0.01 TexasInstruments TXN 74.20 0.03 AnalogDevices ADI 73.45 -0.15 W.P.Carey WPC 58.98 -0.25 Facebook FB 117.40 -1.64 RogersComm B RCI 38.57 0.16 Middleby MIDD 130.90 -0.85 AAPL 116.29 -0.77 Fastenal FAST 48.03 -0.11 Mondelez MDLZ 44.98 0.11 TractorSupply TSCO 76.21 -1.44 Rollins ROL 33.37 -0.13 WPX Energy WPX 14.89 0.18 Apple Trimble TRMB 30.27 -0.23 WAB 83.08 -0.85 s AppliedMaterials AMAT 33.01 0.43 FifthThirdBncp FITB 27.62 -0.07 RoperTech ROP 186.01 0.20 Wabtec MonsterBeverage MNST 45.30 -0.07 t TripAdvisor TRIP 46.39 0.11 ... Fiserv FISV 107.61 -0.96 Mylan RoyalBkCanada RY 68.21 -0.40 Wal-Mart WMT 69.59 -1.65 ArchCapital ACGL 87.09 MYL 37.31 -0.21 21stCenturyFoxA FOXA 28.43 -0.02 Atlassian TEAM 24.05 -0.28 WasteConnections WCN 78.78 -0.27 Flex FLEX 14.62 -0.07 RoyalBkScotland RBS 5.62 -0.01 NXP Semi NXPI 97.88 0.18 21stCenturyFoxB FOX 27.75 0.01 FTNT 28.61 -0.94 RoyalCaribbean RCL 84.24 -0.97 WasteMgt WM 70.79 0.10 Autodesk ADSK 74.58 -1.05 Fortinet NDAQ 67.21 -0.28 UltaSalon ULTA 257.31 -5.64 ADP 102.60 0.13 Gaming&Leisure GLPI 30.45 0.42 Nasdaq WAT 135.72 0.08 ADP RoyalDutchA RDS/A 54.19 0.07 Waters NetApp NTAP 36.22 -0.18 UltimateSoftware ULTI 181.36 -3.41 WSO 147.56 -2.35 B/EAerospace BEAV 59.92 0.14 Garmin GRMN 50.44 0.39 RoyalDutchB RDS/B 57.82 -0.19 Watsco Netease NTES 217.10 -6.02 UnitedTherap UTHR 139.44 -3.60 BOK Fin BOKF 83.90 0.17 WellCareHealth WCG 136.04 -1.75 Gentex GNTX 20.02 -0.20 SAP SAP 85.71 -0.24 Netflix NFLX 125.58 -0.92 VCA WOOF 67.43 0.17 BIDU 162.89 -1.03 GileadSciences GILD 73.30 -0.66 S&P Global SPGI 109.70 -2.00 WellsFargo WFC 55.75 0.04 Baidu NewsCorp A NWSA 11.74 0.02 VeriSign VRSN 76.56 -1.34 s BankofOzarks OZRK 53.85 0.45 Welltower HCN 65.34 0.03 Goodyear GT 31.50 -0.56 SINOPECShanghai SHI 53.14 -0.47 NewsCorp B NWS 12.05 ... VeriskAnalytics VRSK 82.07 -0.36 BBBY 41.38 -4.18 Grifols GRFS 15.75 0.03 SK Telecom SKM 21.53 0.16 WestPharmSvcs WST 83.92 -0.70 BedBath Nordson NDSN 114.40 -0.59 t VertxPharm VRTX 72.02 -0.58 Biogen BIIB 283.07 -0.04 WestarEnergy WR 56.25 ... HDSupply HDS 42.83 -0.55 SLGreenRealty SLG 106.80 -0.81 NorthernTrust NTRS 89.70 -0.38 Viacom A VIA 38.90 -0.30 HAS 78.72 -1.29 Salesforce.com CRM 69.90 -0.21 WestAllianceBcp WAL 49.48 0.28 BioMarinPharm BMRN 83.54 -1.51 Hasbro NorwegianCruise NCLH 43.38 -1.55 Viacom B VIAB 35.15 -0.10 Sanofi SNY 39.54 0.11 WesternGasEquity WGP 44.32 0.18 BlackBerry BBRY 7.17 -0.13 HenrySchein HSIC 152.38 -0.66 s VimpelCom VIP 3.82 -0.02 NVIDIA NVDA 107.11 1.28 HOLX 40.07 0.08 Sasol SSL 28.16 -0.10 s WesternGasPtrs WES 59.86 0.91 Broadcom AVGO 180.60 -1.69 Hologic CA 32.16 -0.27 JBHunt JBHT 97.16 0.15 OPKOHealth OPK 11.58 -0.17 Vodafone VOD 24.72 -0.07 Scana SCG 74.50 0.27 WesternUnion WU 21.80 0.14 CA WPP WPPGY 110.27 -0.12 OReillyAuto ORLY 282.99 -2.54 ... s Schlumberger SLB 86.38 0.22 WestlakeChem WLK 56.80 -0.67 CBOE Holdings CBOE 73.70 -0.43 HuntingtonBcshs HBAN 13.33 WalgreensBoots WBA 84.27 -1.58 SchwabC SCHW 39.77 -0.21 WestpacBanking WBK 23.56 0.06 CDK Global CDK 60.18 -0.26 IAC/InterActive IAC 66.13 0.39 OldDomFreight ODFL 86.93 -0.65 Weibo WB 40.69 -2.00 ON Semi ON 12.73 0.04 CDW 52.01 -0.95 IdexxLab IDXX 119.09 -0.47 ScottsMiracleGro SMG 95.83 -0.15 WestRock WRK 51.53 -0.79 CDW s WesternDigital WDC 70.19 0.97 SealedAir SEE 46.24 -0.72 Weyerhaeuser WY 30.62 -0.20 CH Robinson CHRW 74.47 -0.16 IHSMarkit INFO 35.49 0.08 OpenText OTEX 61.35 -0.68 WholeFoods WFM 31.86 -0.65 PTC PTC 46.15 -0.68 SemicondctrMfg SMI 6.66 0.06 Whirlpool WHR 181.01 -0.03 CME Group CME 120.69 -0.50 IPG Photonics IPGP 101.43 1.44 PCAR 65.14 -0.22 WillisTwrsWatson WLTW 122.85 -0.14 CSX 36.69 0.19 IcahnEnterprises IEP 62.30 4.38 Paccar SempraEnergy SRE 102.13 0.29 WhiteWaveFoods WWAV 55.55 0.07 CSX WynnResorts WYNN 88.25 -1.02 WMB 30.30 -0.32 CadenceDesign CDNS 25.52 -0.26 Illumina ILMN 126.77 -1.05 PacWestBancorp PACW 55.01 0.11 SensataTech ST 40.15 -0.79 Williams XLNX 60.19 -0.05 Paychex PAYX 61.50 0.11 Xilinx Celgene CELG 117.87 2.02 WilliamsPartners WPZ 36.91 0.46 Incyte INCY 101.47 1.71 ServiceCorp SCI 28.46 -0.02 YHOO 38.50 -0.65 PYPL 39.68 -0.41 Yahoo CERN 47.81 -0.73 Intel WIT 9.53 -0.05 Cerner INTC 36.93 -0.05 PayPal ServiceMaster SERV 37.22 -0.80 Wipro Yandex YNDX 20.50 0.21 People'sUtdFin PBCT 19.42 0.07 s CharterComms CHTR 291.02 -0.22 Intuit INTU 116.91 -0.78 WooriBank WF 35.70 1.92 ServiceNow NOW 74.55 -2.70 Zillow A ZG 37.05 -1.32 PCLN 1481.34-24.42 WDAY 66.55 -1.35 CheckPointSftw CHKP 84.95 -0.71 IntuitiveSurgical ISRG 637.58 7.29 Priceline ShawComm B SJR 20.06 0.12 Workday Zillow C Z 36.60 -1.74 Qiagen QGEN 27.54 0.01 CincinnatiFin CINF 76.29 0.10 IonisPharma IONS Wyndham WYN 51.59 -0.56 77.23 -0.65 SherwinWilliams SHW 270.21 -1.00 ZionsBancorp ZION 43.74 0.10 QRVO 55.10 0.11 CTAS 120.09 0.58 JD.com JD 25.62 -0.26 Qorvo ShinhanFin SHG 39.38 -0.60 XcelEnergy XEL 40.67 0.10 Cintas Qualcomm QCOM 66.76 -0.40 CiscoSystems CSCO 30.46 0.04 JackHenry JKHY Xerox XRX 88.91 -0.22 9.01 -0.08 SignetJewelers SIG 93.40 -1.36 XYL 51.13 0.30 CitrixSystems CTXS 90.45 -1.61 JazzPharma JAZZ 106.61 -1.42 RandgoldRscs GOLD 71.10 0.81 SilverWheaton SLW 17.34 -0.09 Xylem CGNX 64.79 0.24 JetBlue JBLU 22.19 -0.52 RegenPharm REGN 372.38 7.32 BritishAmTob BTI 112.03 -0.43 YPF 15.21 -0.04 Cognex SimonProperty SPG 176.24 -1.93 YPF SixFlags SIX 59.73 -0.33 YanzhouCoal YZC 6.77 -0.06 CognizantTech CTSH 56.45 0.17 KLA Tencor KLAC 79.15 0.17 RossStores ROST 67.11 -0.89 CheniereEnergy LNG 41.26 -0.11 RYAAY 83.13 0.17 CheniereEnerPtrs CQP 28.34 -0.40 Comcast A CMCSA 71.02 0.19 KraftHeinz KHC YumBrands YUM 87.28 0.67 Ryanair 64.05 -0.14 SmithAO AOS 47.89 -0.72 LKQ 30.94 -1.43 SBA Comm SBAC 104.63 0.06 CheniereEnHldgs CQH 21.98 -0.18 Smith&Nephew SNN 29.79 0.26 YumChina YUMC 26.16 -0.47 CommerceBcshrs CBSH 58.26 0.10 LKQ SEI Investments SEIC 49.34 -0.12 ImperialOil IMO 35.67 -0.23 CommScope COMM 37.20 -0.17 ZTO Express ZTO LamResearch LRCX 107.69 1.21 12.91 -0.25 Smucker SJM 129.22 0.67 SnapOn SNA 172.84 -0.78 SOQUIMICH SQM 28.39 0.06 SonocoProducts SON 53.24 -0.23 Sony SNE 28.35 -0.14 Amount Payable / Southern SO 49.36 0.12 Company Symbol Yld % New/Old Frq Record SoCopper SCCO 32.02 -0.41 IBDL 1.4 iSh iBonds Dec 2020 Corp .03017 M Dec29 /Dec27 SouthwestAirlines LUV 50.25 -0.40 Dividend announcements from December 22. iSh iBonds Dec 2021 Corp IBDM 1.5 .0298 M Dec29 /Dec27 SouthwesternEner SWN 11.08 0.10 SpectraEnergy SE 41.67 0.51 iSh iBonds Dec 2021 Muni IBMJ 0.5 .0099 M Dec29 /Dec27 Amount Payable / SpectraEnerPtrs SEP 45.78 0.42 Company iSh iBonds Dec 2022 Corp IBDN 1.6 .03364 M Dec29 /Dec27 Symbol Yld % New/Old Frq Record SpectrumBrands SPB 120.90 -0.56 iSh iBonds Dec 2022 Muni IBMK 0.5 .01091 M Dec29 /Dec27 SpiritAeroSys SPR 58.71 -0.07 Increased iSh iBonds Dec 2023 Corp IBDO 2.0 .04179 M Dec29 /Dec27 SpiritRealtyCap SRC 10.61 0.03 CVS 2.5 .50 /.425 Q iSh iBonds Dec 2024 Corp IBDP 2.1 .04341 M Dec29 /Dec27 CVS Health Feb02 /Jan24 Sprint S 8.50 0.09 ISTR 0.3 .0121 /.011 Q iSh iBonds Dec 2025 Corp IBDQ 2.6 .05347 M Dec29 /Dec27 Jan31 /Jan04 Investar Holding StJudeMedical STJ 79.70 0.42 PKBK 2.2 iSh iBonds Dec 2026 Corp IBDR 1.5 .02996 M Dec29 /Dec27 .10 /.08 Q Jan31 /Jan17 StanleyBlackDck SWK 115.81 -0.97 Parke Bancorp iSh iBonds Mar 2018 Corp IBDB 1.3 .02858 M Dec29 /Dec27 StarwoodProp STWD 22.24 0.02 iSh iBonds Mar 2020 Corp IBDC 1.8 .03851 M Dec29 /Dec27 StateStreet STT 79.00 0.14 Reduced YUM 1.9 .30 /.36672 Q Feb03 /Jan13 iSh iBonds Mar 2023 Corp IBDD 2.4 .0531 M Dec29 /Dec27 Statoil STO 18.12 -0.05 YUM! Brands Steris STE 69.05 0.70 iSh iBonds Sep 2017 Muni IBMF 0.9 .02105 M Dec29 /Dec27 s STMicroelec STM 11.10 -0.07 Initial iSh iBonds Sep 2018 Muni IBMG 0.8 .01617 M Dec29 /Dec27 .05256 Dec29 /Dec27 Stryker SYK 120.48 1.08 Elkhorn Lunt Low Vol Hi LVHB iSh iBonds Sep 2019 Muni IBMH 1.0 .02006 M Dec29 /Dec27 GVIP SumitomoMits SMFG 7.85 -0.02 GS Hedge Ind VIP .03509 Dec29 /Dec27 IBMI 0.8 iSh iBonds Sep 2020 Muni .01575 M Dec29 /Dec27 SunCommunities SUI 74.82 0.42 iSh MSCI Min Vol USA SC SMMV .20595 Dec29 /Dec27 LQD 3.3 iSh iBoxx $ Invt Gr Cp Bd .31769 M Dec29 /Dec27 SunLifeFinancial SLF 38.65 -0.44 Recon Cap USA Mgd Risk USMR .60882 Dec27 /Dec23 GVI 1.6 iSh Interm Govt/Credit Bd .15028 M Dec29 /Dec27 SuncorEnergy SU 32.92 0.11 CIU 2.3 M iSh Intermediate Cred Bd .20527 Dec29 /Dec27 SunocoLogistics SXL 24.52 0.56 Funds and investment companies IAGG 7.2 .30978 M Dec29 /Dec27 iSh Intl Aggregate Bd s SunTrustBanks STI 56.15 0.13 Aberdeen Greater China Fd GCH .0509 Jan11 /Dec30 WPS 12.0 .99858 Q Dec29 /Dec27 iSh Intl Dev Property SynchronyFin SYF 36.88 -0.22 Aberdeen Israel Fund ISL .5514 Jan11 /Dec30 IFGL 20.1 1.29762 Q Dec29 /Dec27 iSh Intl Dev Real Est Syngenta SYT 79.75 0.05 JEQ 1.2 .2271 Jan11 /Dec30 IPFF 4.0 s SynovusFin SNV 41.60 0.06 Aberdeen Japan Equity Fd .05255 M Dec29 /Dec27 iSh Intl Preferred Stock JEQ 1.2 A .089 Jan11 /Dec30 Sysco SYY 56.25 -0.01 Aberdeen Japan Equity Fd IDV 2.3 .16589 Q Dec29 /Dec27 iSh Intl Select Dividend LAQ 3.1 .30 SA Jan11 /Dec30 TAL Education TAL 67.85 0.91 Aberdeen Lat Amer IGOV 6.5 .47778 M Dec29 /Dec27 iSh Intl Treasury Bd SGF 1.0 .0226 Q Jan11 /Dec30 TE Connectivity TEL 70.60 -0.06 Aberdeen Singapore Fund JPXN 2.7 .71183 SA Dec29 /Dec27 iSh JPX-Nikkei 400 MIE 8.6 M .077 Jan31 /Jan19 Telus TU 31.62 0.02 C&S MLP Incm & Engy Opp ILF 2.1 .28455 SA Dec29 /Dec27 iSh Latin America 40 MIE 8.6 M Ternium TX 24.53 -0.31 C&S MLP Incm & Engy Opp .077 Feb28 /Feb16 ICSH M 1.3 .05325 Dec29 /Dec27 iSh Liquidity Incm TIM Part TSU 11.49 -0.09 C&S MLP Incm & Engy Opp MIE 8.6 M .077 Mar31 /Mar23 iSh MSCI USA Eq Weighted EUSA 2.0 .24356 Q Dec29 /Dec27 TJX TJX 76.44 -1.01 ChnStrGbInc INB 9.7 .069 M Jan31 /Jan19 IBB Q 0.1 .0919 Dec29 /Dec27 iSh Nasdaq Biotech TaiwanSemicon TSM 28.74 -0.40 ChnStrGbInc INB 9.7 .069 M Feb28 /Feb16 iSh Natl AMT-Free Muni Bd MUB 1.6 .14268 M Dec29 /Dec27 TargaResources TRGP 57.24 -0.24 ChnStrGbInc INB 9.7 .069 M Mar31 /Mar23 NYF 2.0 M .18287 Dec29 /Dec27 iSh New York Muni Bd Target TGT 73.74 -3.39 LDP 7.8 M .156 Jan31 /Jan19 Cohen & Steers Dur Pfd IWY 1.6 TataMotors TTM 34.29 -0.47 iSh Russell Top 200 Grwth .2259 Q Dec29 /Dec27 LDP 7.8 M .156 Feb28 /Feb16 TeckRscsB TECK 20.71 -0.37 Cohen & Steers Dur Pfd IWX 2.3 Q iSh Russell Top 200 Value .26886 Dec29 /Dec27 LDP 7.8 M .156 Mar31 /Mar23 TelecomItalia TI 8.56 -0.25 Cohen & Steers Dur Pfd NEAR 0.9 .03947 M Dec29 /Dec27 iSh Short Maturity Bd UTF 8.1 M .134 Jan31 /Jan19 TelecomItalia A TI/A 7.06 -0.07 Cohen & Steers Infr Fd MEAR 0.9 M iSh Short Maturity Mun Bd .03627 Dec29 /Dec27 UTF 8.1 M .134 Feb28 /Feb16 Teleflex TFX 159.74 -0.65 Cohen & Steers Infr Fd SHV 0.9 M .08 Dec29 /Dec27 iSh Short Treasury Bd UTF 8.1 M TelefonicaBras VIV 13.03 -0.01 Cohen & Steers Infr Fd .134 Mar31 /Mar23 SUB 0.6 iSh Short-Tm Natl Muni Bd .05364 M Dec29 /Dec27 Telefonica TEF 9.03 -0.14 Cohen & Steers Qual Inc RQI 8.1 M .08 Jan31 /Jan19 TFLO 0.5 M iSh Trea Floating Rate Bd .02235 Dec29 /Dec27 TelekmIndonesia TLK 27.61 -0.33 Cohen & Steers Qual Inc RQI 8.1 M .08 Feb28 /Feb16 CRED 3.0 .26844 M Dec29 /Dec27 iSh U.S. Credit Bd Tenaris TS 35.01 0.30 Cohen & Steers Qual Inc RQI 8.1 M .08 Mar31 /Mar23 GOVT iSh U.S. Treasury Bd 1.1 .02362 M Dec29 /Dec27 Teradyne TER 25.59 -0.08 Cohen & Steers TR RFI 8.1 M .08 Jan31 /Jan19 iShares $ HY xOil & Gas HYXE 3.9 .16393 M Dec29 /Dec27 Tesoro TSO 90.31 0.64 RFI 8.1 M .08 Feb28 /Feb16 Cohen & Steers TR SLQD 1.4 TesoroLogistics TLLP 50.62 0.73 .05894 M Dec29 /Dec27 iShares 0-5Y Inv Grd Cp RFI 8.1 M .08 Mar31 /Mar23 TevaPharm TEVA 36.91 0.54 Cohen & Steers TR CLY 4.1 M iShares 10+Y Credit Bond .196 Dec29 /Dec27 PSF 7.9 M .172 Jan31 /Jan19 Textron TXT 48.59 -0.11 Cohen & Strs Sel Prf Inco CSJ 1.5 iShares 1-3Y Credit Bond .12885 M Dec29 /Dec27 PSF 7.9 M .172 Feb28 /Feb16 ThermoFisherSci TMO 140.52 -0.25 Cohen & Strs Sel Prf Inco SHY 0.9 M iShares 1-3Y Treasury Bd .06053 Dec29 /Dec27 PSF 7.9 M .172 Mar31 /Mar23 ThomsonReuters TRI 44.03 -0.30 Cohen & Strs Sel Prf Inco TLT iShares 20+Y Treasury Bd 3.1 .30857 M Dec29 /Dec27 RNP 7.8 M ThorIndustries THO 102.71 -1.93 CohnStrsPfdInco .124 Jan31 /Jan19 IEI 1.2 M iShares 3-7Y Treasury Bd .12479 Dec29 /Dec27 3M MMM 179.20 0.77 CohnStrsPfdInco RNP 7.8 M .124 Feb28 /Feb16 AGZ 1.5 iShares Agency Bond ETF .14203 M Dec29 /Dec27 Tiffany TIF 77.77 -2.27 CohnStrsPfdInco RNP 7.8 M .124 Mar31 /Mar23 AIA SA 3.6 .82583 Dec29 /Dec27 iShares Asia 50 ETF s TimeWarner TWX 96.46 0.47 CohSteer Opprtnty Fd FOF 9.0 .087 M Jan31 /Jan19 FXI 2.5 iShares China Large-Cap .68919 SA Dec29 /Dec27 Toll Bros TOL 31.32 -0.47 CohSteer Opprtnty Fd FOF 9.0 .087 M Feb28 /Feb16 CMBS M 1.7 .07161 Dec29 /Dec27 iShares CMBS ETF Torchmark TMK 74.62 -0.21 FOF 9.0 .087 M Mar31 /Mar23 ILTB 4.4 Toro TTC 55.72 0.42 CohSteer Opprtnty Fd iShares Core 10+Y USD Bd .21724 M Dec29 /Dec27 .01551 SA Dec28 /Dec23 TorontoDomBk TD 49.85 -0.07 Deutsche X Australia Hdg DBAU 0.1 ISTB 1.2 M iShares Core 1-5Y USD Bd .04882 Dec29 /Dec27 .13495 Q Dec28 /Dec23 Total TOT 50.06 0.53 Deutsche X EAFE Hi Div HDEF 2.3 iShares Emg Mkt Dividend DVYE 1.0 .08178 Q Dec29 /Dec27 Dec28 /Dec23 TotalSystem TSS 50.05 -0.20 Deutsche X EAFE SC Hdg DBES 0.7 .08595 SA IEV 1.5 SA iShares Europe ETF .29126 Dec29 /Dec27 .12612 Q Dec28 /Dec23 ToyotaMotor TM 120.66 -0.45 Deutsche X EM High Div HDEE 2.3 iShares Floating Rate Bd FLOT 1.7 .07285 M Dec29 /Dec27 TransCanada TRP 46.26 0.18 Deutsche X Eurozone HiDiv HDEZ 4.7 .29046 Q Dec28 /Dec23 IOO 2.3 iShares Global 100 ETF .86745 SA Dec29 /Dec27 TransDigm TDG 248.95 -0.01 Deutsche x FTSE Dev xUS DEEF 3.2 .18826 Q Dec28 /Dec23 IXC 2.8 iShares Global Energy ETF .48073 SA Dec29 /Dec27 Transocean RIG 14.74 -0.10 Deutsche X FTSE Em Comp DEMG 1.7 .10231 Q Dec28 /Dec23 IXG 1.4 iShares Global Financials .40815 SA Dec29 /Dec27 TransUnion TRU 30.92 0.01 Deutsche X Harvest CSI300 ASHR 0.7 .17143 A Dec28 /Dec23 IXJ 1.5 iShares Global Healthcare .72408 SA Dec29 /Dec27 Travelers TRV 122.12 -0.45 DBIT 2.6 .2373 SA Dec28 /Dec23 Deutsche X Italy Hdg EXI 1.5 SA iShares Global Industrial .57346 Dec29 /Dec27 TurkcellIletism TKC 6.73 0.15 JPNH 3.6 .41137 SA Dec28 /Dec23 IGF 2.7 TurquoiseHill TRQ 3.20 -0.04 Deutsche X JPX-Nikkei 400 iShares Global Infra .53373 SA Dec29 /Dec27 .32755 SA Dec28 /Dec23 Twitter TWTR 16.41 -0.67 Deutsche X MSCI AC AP xJp DBAP 2.9 MXI 0.9 iShares Global Materials .25537 SA Dec29 /Dec27 .15533 SA Dec28 /Dec23 TylerTech TYL 144.08 -1.18 Deutsche X MSCI AW ex-US DBAW 1.3 iShares Global REIT ETF REET 8.3 .03371 Dec29 /Dec27 .04162 SA Dec28 /Dec23 TysonFoods TSN 61.74 -0.23 Deutsche X MSCI Brazil Hd DBBR 0.8 REET 8.3 iShares Global REIT ETF .51244 Q Dec29 /Dec27 DBEF 0.2 .03333 SA Dec28 /Dec23 UBS Group UBS 15.89 -0.14 Deutsche X MSCI EAFE IXN iShares Global Tech ETF 0.9 .48403 SA Dec29 /Dec27 UDR UDR 35.42 0.18 Deutsche X MSCI EM Hedged DBEM 1.9 .18228 SA Dec28 /Dec23 IXP 4.4 1.28216 SA iShares Global Telecom Dec29 /Dec27 UGI UGI 45.54 0.31 Deutsche X MSCI Europe Hd DBEU 0.5 .06504 SA Dec28 /Dec23 JXI 4.7 1.04568 SA Dec29 /Dec27 iShares Global Utilities US Foods USFD 26.94 0.18 Deutsche X MSCI Japan Hdg DBJP 0.2 .03152 SA Dec28 /Dec23 GNMA M iShares GNMA Bond ETF 1.0 .04031 Dec29 /Dec27 UltraparPart UGP 19.99 0.38 Deutsche X MSCI Mexico DBMX 0.3 .05368 A Dec28 /Dec23 GBF 2.6 M iShares Govt/Credit Bond .2443 Dec29 /Dec27 t UnderArmour A UAA 29.39 -0.66 Deutsche X MSCI S Korea DBKO 0.4 .04691 SA Dec28 /Dec23 HYG 4.0 M iShares iBoxx $ HY Cp Bd .28559 Dec29 /Dec27 UnderArmour C UA 25.48 -0.57 DBUK 1.1 .11115 SA Dec28 /Dec23 Unilever UN 40.81 0.29 Deutsche X MSCI UK Hedged INDY 0.2 SA iShares India 50 ETF .02938 Dec29 /Dec27 .38122 Q Dec28 /Dec23 Unilever UL 40.47 0.25 Deutsche x Russell 1000 DEUS 5.6 EMB 2.9 M iShares JPM USD Emg Bd .263 Dec29 /Dec27 Dec28 /Dec23 UnionPacific UNP 105.19 0.54 Deutsche X Russell 2000 DESC 0.9 .06966 Q MBB 5.8 .51214 M Dec29 /Dec27 iShares MBS ETF .30521 SA Dec28 /Dec23 UnitedContinental UAL 74.19 -1.53 Deutsche X S Europe Hdg DBSE 3.0 IWC 1.5 Q iShares Micro-Cap ETF .31608 Dec29 /Dec27 DBSP 3.3 UPS B UPS 116.30 0.20 Deutsche X Spain Hdg .35771 SA Dec28 /Dec23 IWB 2.2 iShares Russell 1000 ETF .67865 Q Dec29 /Dec27 UnitedRentals URI 106.86 -1.62 Deutsche xTr S&P Hdg Gl DBIF 3.1 .36843 SA Dec28 /Dec23 IWF 1.6 iShares Russell 1000 Gwth .42278 Q Dec29 /Dec27 US Bancorp USB 52.15 -0.02 Deutsche X-trkrs MSCI Eur DBEZ 1.4 .1813 SA Dec28 /Dec23 IWD 2.7 iShares Russell 1000 Val .77338 Q Dec29 /Dec27 US Steel X 35.77 -0.70 Deutsche Xtrks Nikkei400 JPN 2.1 .25338 SA Dec28 /Dec23 iShares Russell 2000 ETF IWM 1.7 .56296 Q Dec29 /Dec27 UnitedTech UTX 110.46 -0.03 Deutschex DJ Hgd Real Est DBRE 5.3 .29229 Q Dec28 /Dec23 IWO iShares Russell 2000 Gwth 1.3 .51815 Q Dec29 /Dec27 UnitedHealth UNH 161.58 0.25 Elkhorn FTSE RAFI US Equ ELKU 3.1 .22093 Q Dec29 /Dec27 IWN 2.5 UniversalHealthB UHS 106.82 0.07 iShares Russell 2000 Val .73466 Q Dec29 /Dec27 Elkhorn S&P 500 Cap Exp CAPX 1.3 .08474 Q Dec29 /Dec27 IWV 2.0 iShares Russell 3000 ETF .67611 Q Dec29 /Dec27 M Elkhorn S&P High Qual Pfd EPRF 5.8 .112 Dec29 /Dec27 IWP 1.6 iShares Russell MC Growth .39559 Q Dec29 /Dec27 Flex Credit-Scored US Lg LKOR 4.1 .01167 Dec29 /Dec27 IWS 2.8 Q iShares Russell MC Value .57288 Dec29 /Dec27 Flex Credit-Scored US Lg LKOR 4.1 .17858 Dec29 /Dec27 52-Wk % IWR 2.3 1.04816 Q iShares Russell Mid-Cap Dec29 /Dec27 .67081 Dec29 /Dec27 Stock Sym Hi/Lo Chg Flex Credit-Scored US Lg LKOR 4.1 IWL iShares Russell Top 200 2.0 .26149 Q Dec29 /Dec27 Flex Gl Quality Real Est GQRE 8.5 1.17266 Q Dec29 /Dec27 8.06 1.8 TheBancorp PFF 6.5 TBBK M .20323 Dec29 /Dec27 iShares US Preferred 1.3 .09302 Q Dec29 /Dec27 16.00 0.6 Flex Glbl Upstrm Nat Rscs GUNR TiGenix TIG iShrs Emg Mkt Hi Yd Bd Fd EMHY 9.9 .40004 M Dec29 /Dec27 TDTT 1.0 22.60 1.4 Flex iBx 3Y Dur TIPS TriStateCapital TSC .02069 M Dec29 /Dec27 EMIF SA iShs S&P Emerg Mkts Infra 2.4 .32368 Dec29 /Dec27 UbiquitiNetworks UBNT 59.43 0.7 Flex Mrn US Mkt Ftr Tilt TILT 2.1 .51465 Q Dec29 /Dec27 TRSK 1.8 .1287 Q Dec29 /Dec23 Janus Velocity Tail LC Umpqua UMPQ 19.30 -0.1 QDEF 3.7 .36506 Q Dec29 /Dec27 UnionBankshares UBSH 36.50 -0.5 Flex Qlty Div Defensive SPXH 1.8 Q Janus Velocity Vol Hdg LC .13751 Dec29 /Dec23 .32244 Q Dec29 /Dec27 UtahMedProducts UTMD 75.00 ... Flex Quality Div Dynamic QDYN 3.3 M Vangrd Intermed-Trm Cp Bd VCIT 3.7 .26 Dec29 /Dec27 ESGG 2.3 50.55 -1.8 Flex STOXX Glb ESG Impact VSInverseVIXSTerm XIV .44676 Q Dec29 /Dec27 VGIT Vangrd Intrmd -Trm Gvt Bd 1.8 .0675 Dec29 /Dec27 WCF Bancorp WCFB 10.29 0.8 Flex STOXX US ESG Impact ESG 2.4 .32216 Q Dec29 /Dec27 Vangrd Intrmd -Trm Gvt Bd VGIT 1.8 .095 M Dec29 /Dec27 WellesleyBancorp WEBK 27.75 0.9 TLTD 3.3 .46611 Q Dec29 /Dec27 WesBanco WSBC 43.46 0.5 FlexMDevexUSFacTilt

NASDAQ

NYSE MKT

Dividend Changes

West WSTC WesternDigital WDC WestNewEngBncp WNEB WhiteHorseNts WHFBL WillametteVallPfA WVVIP WisdmTreeGermanHdg DXGE WolverineBancorp WBKC Xcerra XCRA

25.85 72.01 9.75 26.22 6.00 28.49 33.10 7.92

-0.3 1.4 2.7 3.2 20.8 -0.1 7.6 3.1

Nasdaq lows - 56 AcuraPharm ACUR Aixtron AIXG AmicusTherap FOLD Aradigm ARDM AviragenTherap AVIR BCommunications BCOM BiondvaxPharm BVXV CascadianTherap CASC Cerecor CERC ChinaCache CCIH ChinaNetOnline CNET Crocs CROX CumulusMedia CMLS CytRx CYTR DelcathSystems DCTH DexteraSurgical DXTR GDSHoldings GDS Gevo GEVO Gridsum GSUM Gyrodyne GYRO HTG Molecular HTGM HeronTherap HRTX Hydrogenics HYGS iKangHealthcare KANG InfoSonics IFON Innocoll INNL JA Solar JASO JaguarAnimalHlth JAGX JunoTherap JUNO LibertyTripAdvA LTRPA Medigus MDGS MerrimackPharm MACK MicronetEnertecWt MICTW MonsterDigitalWt MSDIW NeuroMetrix NURO OncoMedPharm OMED Ovascience OVAS PacBiosciCA PACB PershingGold PGLC RXiPharm RXII SearsHoldings SHLD SifyTech SIFY Soligenix SNGX SyndaxPharm SNDX TopImageSys TISA TrilliumTherap TRIL TripAdvisor TRIP VangIntrmGvtBd VGIT VanguardMBS VMBS VS2xVIXShortTerm TVIX VSVIXShortTerm VIIX VeraBradley VRA VertxPharm VRTX VictoryCEMPEMVol CEZ xGTechnology XGTI YulongEcoMat YECO

0.72 -9.7 3.10 -4.3 4.41 -3.0 1.53 -2.4 1.14 -7.9 17.99 -7.4 3.04 -9.0 4.52 4.0 0.84 11.4 2.55 -6.3 1.00 2.9 6.73 -4.5 0.95 1.0 0.37 -2.7 1.01 -7.1 0.95 -6.7 7.54 0.5 0.18 -5.3 10.10 -0.9 18.16 -0.3 1.82 -5.2 12.30 -4.6 4.00 -5.9 13.72 1.2 0.35 -5.1 1.68 -9.4 4.87 -0.8 0.64 -4.5 17.52 -0.7 14.85 -0.3 0.57 -6.5 4.14 -4.1 0.05 -18.3 0.12 -50.0 0.60 0.4 7.42 -2.9 1.30 -54.9 3.80 1.3 3.10 -1.9 0.72 -8.0 9.32 -5.0 0.71 -8.5 2.05 3.3 7.30 -3.5 1.24 -1.0 5.25 -5.4 45.63 0.2 63.42 -0.1 51.88 ... 8.27 3.3 8.03 1.5 11.66 -4.7 71.46 -0.8 23.90 -1.2 1.46 -6.9 0.85 5.9

FlexShares Discip Dur MBS FlexShares Dividend Dyn FlexShares Emg Mkrs Fact FlexShares iBoxx 5Y TIPS FlexShares Intl Qual Div FlexShares Intl Quality FlexShares STOXX Gl Broad FlexShs Credit-Scored US FlexShs Credit-Scored US FlexShs Credit-Scored US FlexShs Quality Dividend FlexShs US Quality LgCp Goldman Sachs ActBt US LC Goldman Sachs Active EM GS ActiveBeta Europe GS ActiveBeta Intl Equity GS ActiveBeta Japan India Fund iSh 0-5Y Hi Yd Corp Bd iSh 10-20Y Treasury Bond iSh 7-10Y Treasury Bond iSh AAA-A Rated Corp Bd iSh Asia/Pacific Dividend iSh California Muni Bd iSh Cohen & Steers REIT iSh Commodities Sel Strat iSh Convertible Bd iSh Core 5-10 Year USD Bd iSh Core Russ U.S. Growth iSh Core Russ U.S. Value iSh Core Total USD Bd Mkt iSh Core US Aggregate Bd iSh Edge MSCI Min Vol USA iSh Edge MSCI Mult USA iSh Edge MSCI Mult USA SC iSh Edge MSCI USA Mom iSh Edge MSCI USA Quality iSh Edge MSCI USA Size iSh Edge MSCI USA Value iSh Em Mkts Corp Bd Fd iSh Exponential Techs iSh Fallen Angels USD Bd iSh Gl Clean Engy iSh Gl Timber & Forestry iSh Glbl Hi Corp Bd Fd iSh Global Cons Discr iSh Global Consmr Staples iSh iBds Mar2018 Cp xFin iSh iBds Mar2020 Cp xFin iSh iBds Mar2023 Cp xFin iSh iBonds Dec 2017 Corp iSh iBonds Dec 2018 Corp iSh iBonds Dec 2019 Corp

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MBSD IQDY TLTE TDTF IQDE IQDF NFRA SKOR SKOR SKOR QDF QLC GSLC GEM GSEU GSIE GSJY IFN SHYG TLH IEF QLTA DVYA CMF ICF COMT ICVT IMTB IUSG IUSV IUSB AGG USMV LRGF SMLF MTUM QUAL SIZE VLUE CEMB XT FALN ICLN WOOD GHYG RXI KXI IBCC IBCD IBCE IBDJ IBDH IBDK

2.8 1.6 2.9 1.7 3.2 3.2 4.0 2.4 2.4 2.4 3.8 2.4 2.0 1.9 5.1 2.0 4.7

4.1 1.9 1.9 1.8 2.4 2.0 6.4 0.3 5.4 2.5 1.4 2.3 1.9 2.8 2.8 1.4 1.2 2.0 2.1 2.2 1.8 3.4 2.2 3.5 3.7 0.9 13.0 1.5 2.3 1.9 1.5 2.5 0.9 1.1 1.1

.06812 .09542 .31892 .03422 .17067 .17931 .4353 .05479 .10255 .14255 .37875 .16936 .22795 .12164 .32155 .12301 .32155 1.49 .16194 .20749 .16473 .07771 .2727 .1918 1.56002 .02916 .2194 .1028 .15484 .28211 .07739 .24867 .31221 .09681 .10792 .38989 .36242 .40325 .3213 .14015 .14688 .07724 .14502 .25181 .52103 .66797 1.04774 .03825 .03136 .04898 .01785 .02361 .02205

Q Q M Q Q Q

Q Q Q Q Q Q Q M M M M Q M Q Q M M Q Q M M Q Q Q Q Q Q Q M Q M SA SA M SA SA M M M M M M

Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec30 /Dec27 Dec30 /Dec27 Dec29 /Dec27 Dec30 /Dec27 Dec29 /Dec27 Jan11 /Dec30 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27

Vangrd Intrmd -Trm Gvt Bd Vanguard Div Appreciation Vanguard Emg Mkts Govt Bd Vanguard Extended Mkt Vanguard Fds MCap Grwth Vanguard FTSE DevMkts Vanguard Growth ETF Vanguard High Div Yld Vanguard Intermed-Term Bd Vanguard Intermed-Term Bd Vanguard Intermed-Term Bd Vanguard Intl Hi Div Yd Vanguard Large-Cap ETF Vanguard Lg-Term Govt Bd Vanguard Long-Term Bd Vanguard Long-Term Bd Vanguard Long-Trm Crp Bd Vanguard MBS Vanguard MBS Vanguard MBS Vanguard MdCp Value ETF Vanguard Mid-Cap Vanguard REIT Vanguard S&P500 Vanguard Short Tm Govt Bd Vanguard Short Tm Govt Bd Vanguard Short Tm Govt Bd Vanguard Short-Term Bond Vanguard Short-Term Bond Vanguard Short-Term Bond Vanguard Shrt-Trm Crp Bnd Vanguard Small-Cap Vanguard Small-Cap Growth Vanguard Small-Cap Value Vanguard SmCp 600 ETF Vanguard Tax-Exempt Bd Vanguard Total Bond Mkt Vanguard Total Bond Mkt Vanguard Total Bond Mkt Vanguard Total Intl Bd Vanguard Value ETF Voya Prime Rate Trust

VGIT VIG VWOB VXF VOT VEA VUG VYM BIV BIV BIV VYMI VV VGLT BLV BLV VCLT VMBS VMBS VMBS VOE VO VNQ VOO VGSH VGSH VGSH BSV BSV BSV VCSH VB VBK VBR VIOO VTEB BND BND BND BNDX VTV PPR

1.8 2.7 5.1 2.2 1.2 3.3 1.9 3.5 2.7 2.7 2.7 2.4 2.3 3.1 4.1 4.1 4.8 2.0 2.0 2.0 2.5 2.0 8.4 2.5 1.1 1.1 1.1 1.6 1.6 1.6 2.5 2.3 1.9 2.6 0.9 1.9 2.5 2.5 2.5 9.0 3.0 5.8

.0133 .577 .329 .54 .327 .30 .528 .667 .0015 .3321 .18462 .338 .591 .189 .1516 .30055 .352 .0015 .085 .1614 .614 .648 1.695 1.296 .0081 .056 .0015 .0061 .0069 .10377 .162 .749 .624 .796 1.185 .078 .0243 .0114 .16977 .404 .695 .027

CIO FORTY

7.4 2.3

.235 .48

HT MPB

5.3 2.1

.20 .10

M M Q M

Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Dec29 /Dec27 Jan12 /Dec30

Q SA

Jan25 /Jan13 Jan19 /Dec30

Q M Q Q Q Q Q

M Q Q M M M M Q Q Q Q M

M M Q Q Q A M

Foreign City Office REIT Formula Systems ADR

Special Hersha Hospitality Cl A Mid Penn Bancorp

Jan17 /Jan05 Jan17 /Jan04

KEY: A: annual; c: corrected; M: monthly; Q: quarterly; r: revised; SA: semiannual; S2:1: stock split and ratio; SO: spin-off.


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.

B8 | Friday, December 23, 2016

MARKETS DIGEST EQUITIES S&P 500 Index

Dow Jones Industrial Average Last Year ago

19918.88 t 23.08, or 0.12% High, low, open and close for each trading day of the past three months.

Trailing P/E ratio * 21.72 16.76 P/E estimate * 18.64 16.18 Dividend yield 2.39 2.53 All-time high 19974.62, 12/20/16

Nasdaq Composite Index Last

2260.96 t 4.22, or 0.19% High, low, open and close for each trading day of the past three months.

Year ago

Trailing P/E ratio * 24.98 22.95 P/E estimate * 19.06 17.47 Dividend yield 2.07 2.14 All-time high: 2271.72, 12/13/16

Last Year ago

5447.42 t 24.01, or 0.44% High, low, open and close for each trading day of the past three months.

Trailing P/E ratio * 24.15 23.01 P/E estimate * 19.55 20.05 Dividend yield 1.23 1.17 All-time high: 5483.94, 12/20/16

Current divisor 0.14602128057775 20000

2260

5480

UP Close

19600

2230

5400

Open

19200

2200

5320

18800

2170

5240

18400

2140

18000

2110

Session high t

DOWN Session open

t

Close

65-day moving average

Session low

65-day moving average 5160

65-day moving average

5080

Bars measure the point change from session's open Oct.

Nov.

Sept.

Dec.

5000

2080

17600 Sept.

Oct.

Nov.

Sept.

Dec.

Oct.

Nov.

Dec.

* P/E data based on as-reported earnings from Birinyi Associates Inc.

Major U.S. Stock-Market Indexes High

Latest Close

Low

Net chg

% chg

Transportation Avg Utility Average Total Stock Market Barron's 400

9225.98

9138.86

13.5

14.3

7.1

6625.53

20.2

22.0

7.9

Most-active issues in late trading

723.51

577.48

13.7

14.3

10.6

23620.57 18663.11 611.12 446.15

10.3 15.5

11.3 17.1

7.1 6.3

52-Week Low

YTD

% chg

661.65

656.88

660.52

5432.77 4917.33

0.33

2.17

23535.77 23437.26 23486.05 -67.29 609.20 603.45 604.75 -4.27

Nasdaq Stock Market Nasdaq Composite 5472.01 Nasdaq 100 4948.36

19974.62 15660.18

9159.64 -69.80 -0.76 -0.29 -0.70 -0.44

5447.42 -24.01 4934.39 -14.51

Standard & Poor's 500 Index

2263.18

2256.08

2260.96

MidCap 400 SmallCap 600

1679.56 849.69

1665.35 838.71

Other Indexes Russell 2000

1375.46

1360.25

5483.94 4953.80

-0.29 -0.19

-4.22

% chg 3-yr. ann.

4266.84 3947.80

8.8 7.4

7.9 6.7

9.9 11.8

2271.72

1829.08

9.7

10.6

7.5

1669.52 -10.10 -0.60 840.82 -8.17 -0.96

1696.12 857.50

1238.82 588.26

17.9 23.1

19.4 25.2

8.2 8.5

1362.66 -12.53 -0.91

1388.07

953.72

18.0

20.0

5.9

Company

Symbol

SPDR S&P 500

SPY

-0.26

11127.78 11100.93 11114.14 -28.43 513.94

509.39

NYSE Arca Biotech

3139.29

3092.25

NYSE Arca Pharma

Value Line

509.91

11237.17

9029.88

8.3

9.6

2.9

-4.03 -0.78

518.98

383.82

12.6

14.4

2.0

-0.72

3868.26

2642.53

-18.6

-18.5

10.8

554.66

463.78

-12.3

-11.7

1.3

93.30

56.51

25.3

27.1

112.86

38.84

52.8

61.2

192.50

128.61

14.5

923.06 28.14

559.18 36.9 11.27 -27.4

3109.75 -22.55

0.13

479.38

475.81

478.04

0.60

KBW Bank

93.09

92.51

-0.10

PHLX§ Gold/Silver

92.86

74.63

72.84

PHLX§ Oil Service

73.03

-0.62 -0.84

188.98

186.55

PHLX§ Semiconductor CBOE Volatility

186.80

-1.57 -0.83

928.29 11.67

919.45 11.14

923.06 11.43

-0.10

0.51

4.73 0.16

1.42

Philadelphia Stock Exchange

Last

Net chg

8,547.5 225.58

After Hours % chg High

0.20

6,839.6

19.04

-0.03

-0.16

19.15

19.04

Navient Corp.

4,858.0

16.63

unch.

16.63

16.62

Finl Select Sector SPDR XLF

3,403.8

23.54

unch.

23.59

23.52

Bank of America

BAC

3,387.4

22.55

0.01

0.04

22.56

22.53

Comcast Cl A

CMCSA 3,169.1

71.02

unch.

71.02

71.02

Corning Inc

GLW

2,981.5

24.75

unch.

24.75

24.75

VanEck Vectors Jr Gold GDXJ

2,865.3

28.15

-0.08

-0.28

28.35

28.15

NAVI

Percentage gainers… 37.8

31.49

3.15

11.12

31.49

28.34

Progenics Pharmaceuticals PGNX

46.7

9.60

0.74

8.35

10.00

8.86

Synergy Pharmaceuticals SGYP

539.0

5.10

0.36

7.59

5.18

4.61

MAT

FRED

42.3

20.34

0.96

4.95

21.00

19.31

Stone Energy

SGY

20.4

9.76

0.40

4.27

9.98

9.26

10.8

Citizens Financial Group CFG

35.6

32.32

-3.68

-10.22

36.00

32.32

-3.2

M&T Bank

MTB

53.1 140.84 -15.19

-9.74 156.03 140.84

International Paper

IP

36.9

49.02

-4.77

-8.87

53.79

49.02

Novo Nordisk ADR

NVO

7.0

32.61

-2.93

-8.24

35.58

32.61

Wells Fargo

WFC

259.7

51.85

-3.90

-7.00

55.87

51.85

20.9 -6.1

...And losers

Sources: SIX Financial Information; WSJ Market Data Group

International Stock Indexes Region/Country Index

Close

Percentage Gainers... Latest % chg

Net chg

World

The Global Dow 2535.79 The Global Dow Euro 2283.46 DJ Global Index 326.11 DJ Global ex U.S. 211.90

Americas Brazil Canada Mexico Chile

DJ Americas 544.37 Sao Paulo Bovespa 57255.22 S&P/TSX Comp 15335.23 IPC All-Share 45008.08 Santiago IPSA 3197.34

Europe Euro zone Belgium France Germany Israel Italy Netherlands Spain Sweden Switzerland U.K.

Stoxx Europe 600 Euro Stoxx Bel-20 CAC 40 DAX Tel Aviv FTSE MIB AEX IBEX 35 SX All Share Swiss Market FTSE 100

359.82 348.70 3596.92 4834.63 11456.10 1463.47 19121.26 482.47 9333.60 532.10 8237.98 7063.68

–0.74 –0.43 –2.44 0.81 –12.54 3.27 –94.33 –0.74 –38.10 –1.90 4.53 22.26

Asia-Pacific Australia China Hong Kong India Japan Singapore South Korea Taiwan

DJ Asia-Pacific TSM 1417.33 S&P/ASX 200 5643.90 Shanghai Composite 3139.56 Hang Seng 21636.20 S&P BSE Sensex 25979.60 Nikkei Stock Avg 19427.67 Straits Times 2882.04 Kospi 2035.73 Weighted 9118.75

–5.05 30.40 2.13 –173.60 –262.78 –16.82 –19.66 –2.23 –85.51

–6.44 –10.95 –0.79 –0.50

YTD % chg

8.5 12.8 5.9 0.8

–0.25 –0.48 –0.24 –0.24

–0.27 –1.47 –391.30 –0.68 0.19 29.34 0.06 25.05 –26.70 –0.83 –0.21 –0.12 –0.07 –0.11 –0.49 –0.15 –0.41 –0.35

–0.36

0.02 0.22

0.06 0.32 0.54 0.07

–0.80 –1.00 –0.09 –0.68 –0.11 –0.93

11.7 32.1 17.9 4.7 8.6 –1.6 1.0 –2.8 4.3 6.6 –4.3 –10.7 9.2 –2.2 5.3 –6.6 13.2 2.0 6.6 –11.3 –1.3 –0.5 2.1 –0.0 3.8 9.4

Company

Symbol

Imprimis Pharmaceuticals China Natural Resources Cemtrex Global Partners Magellan Petroleum

IMMY

Micron Technology Sunoco Diffusion Pharmaceuticals CVR Refining CVR Energy

MU

Energous Corp. Sussex Bancorp Nobilis Health CounterPath Abeona Therapeutics

WATT

CHNR CETX GLP MPET

SUN DFFN CVRR CVI

SBBX HLTH CPAH ABEO

High

52-Week Low % chg

Symbol

Micron Technology Bank of America VanEck Vectors Gold Miner VelocityShares 3x SPDR S&P 500

MU

iShares MSCI Emg Markets Globalstar Advanced Micro Devices DXN DLY GLDMNR 3x BL Finl Select Sector SPDR

EEM

BAC GDX DGAZ SPY

GSAT AMD NUGT XLF

Selected rates

A consumer rate against its benchmark over the past year

Money market accounts

23.19 26.52 2.53 10.10 23.69

2.61 2.98 0.26 1.00 2.25

12.68 12.66 11.44 10.99 10.49

23.49 9.31 40.06 21.01 17.00 2.20 20.29 5.50 41.32 12.03

60.2 -31.8 ... -49.5 -42.1

Signal Genetics Tidewater Conatus Pharmaceuticals Sangamo BioSciences Boot Barn Holdings

SGNL

19.26 20.80 2.20 2.25 4.65

1.78 1.90 0.20 0.20 0.40

10.18 10.05 10.00 9.59 9.41

20.13 3.65 21.95 11.43 4.66 1.80 3.85 1.81 9.44 2.05

140.8 60.5 -24.4 -15.1 27.4

Direxion Dly Retail Bl 3x Intellia Therapeutics Clean Energy Fuels Avinger Editas Medicine

RETL

Volume % chg from Latest Session (000) 65-day avg Close % chg

84,535 63,671 52,879 49,590 47,457

218.5 -45.6 -35.2 163.7 -48.8

46,896 41,320 35,813 34,469 34,384

-32.1 34.08 -1.19 883.6 1.81 23.13 -23.3 11.60 1.13 -17.2 5.98 -0.50 -56.9 23.54 -0.25

Benchmark Yields Treasury yield curve andtoRates Yield maturity of current bills,

12.68 -0.40 -0.10 4.03 -0.17

23.19 22.54 19.07 3.61 225.38

52-Week High Low

23.49 9.31 23.39 10.99 31.79 12.40 32.28 3.31 228.34 181.02 38.32 3.00 11.75 35.80 23.87

27.61 0.63 1.75 3.48 15.86

t

Federal-funds target rate

0.50 0.25

t

Money market account yields

0.00 –0.25

J F MAM J J A S O N D 2016

Ally Bank Midvale, UT

1.00% 877-315-2559

Barclays Wilmington, DE

1.00% 888-720-8756

California First National Bank 1.00% Irvine, CA 800-735-2465 Capital One 360 Glen Allen, VA

1.00% 877-464-0333

t

One year ago 1 3 6 month(s)

1 2 3 5 710 years maturity

18%

4.00

12

3.00

6

2.00

0

1.00

–6

0.00

–12

30

s Yen

Euro

s WSJ Dollar index

Interest rate

Federal-funds rate target 0.50-0.75 0.50-0.75 Prime rate* 3.75 3.75 Libor, 3-month 0.97 1.00 Money market, annual yield 0.26 0.26 Five-year CD, annual yield 1.22 1.19 30-year mortgage, fixed† 4.15 4.28 15-year mortgage, fixed† 3.34 3.46 Jumbo mortgages, $417,000-plus† 4.72 4.60 Five-year adj mortgage (ARM)† 3.93 3.76 New-car loan, 48-month 3.01 3.02 HELOC, $30,000 4.71 4.69

3-yr chg 52-Week Range (%) Low 0 2 4 6 8 High (pct pts)

0.25 l l 3.50 0.60 l 0.22 l 1.17 l l 3.43 l 2.70 l 4.02 l 2.97 l 2.87 l 4.29

0.75 3.75 1.00 0.29 1.41 4.29 3.47 4.88 4.03 3.38 5.01

0.50 0.50 0.75 -0.16 -0.16 -0.33 -0.21 -0.04 0.13 0.06 -0.51

Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest banks.† Excludes closing costs. Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com

Corporate Borrowing Rates and Yields Bond total return index

Close

Yield (%) Last Week ago

52-Week High Low

Total Return (%) 52-wk 3-yr

1413.015

2.133

2.175

2.186

1.141

10-yr Treasury, Ryan ALM 1671.006 DJ Corporate 358.171 Aggregate, Barclays Capital 1862.290 High Yield 100, Merrill Lynch 2675.535 Fixed-Rate MBS, Barclays 1922.610 Muni Master, Merrill 496.891

2.550 3.250 2.720 5.563 3.000 2.363

2.580 3.301 2.760 5.710 3.030 2.419

2.600 3.462 2.770 8.696 3.070 2.516

1.366 –4.856 3.262 2.460 4.804 3.947 1.820 1.878 2.680 5.248 13.127 3.182 1.930 0.965 2.749 1.297 –0.449 3.388

735.527

6.123

6.221

7.128

5.134

Treasury, Ryan ALM

EMBI Global, J.P. Morgan

* Primary market NYSE, NYSE MKT NYSE Arca only. †(TRIN) A comparison of the number of advancing and declining issues with the volume of shares rising and falling. An Arms of less than 1 indicates buying demand; above 1 indicates selling pressure.

LPTN RHT VLTC

TDW CNAT SGMO BOOT

NTLA CLNE AVGR EDIT

Latest Session Close Net chg % chg

High

1.34 -1.63 -54.88 2.15 -0.57 -20.96 3.08 -0.67 -17.87 68.71 -11.08 -13.89 2.60 -0.40 -13.33

11.66 1.30 5.69 1.42 5.88 1.68 84.44 59.59 5.69 1.75

-87.3 -13.7 -4.8 -15.9 -48.5

52-Week Low % chg

5.04 3.70 3.77 2.90 12.14

-0.76 -0.55 -0.55 -0.35 -1.46

-13.10 -12.94 -12.73 -10.77 -10.74

15.11 11.58 5.50 9.55 17.26

1.80 1.44 1.40 2.65 5.20

-58.0 -47.5 23.6 -69.1 -2.3

38.36 14.46 3.02 4.00 16.86

-4.47 -1.65 -0.34 -0.45 -1.83

-10.43 -10.24 -10.12 -10.11 -9.79

49.91 22.94 30.40 11.86 4.80 2.15 25.11 3.35 43.99 12.43

2.3 ... -20.5 -82.6 ...

Ranked by change from 65-day average*

Company

Symbol

First Trust CEF Incm Opp Assd Capital Cl A iShares Curr Hdgd MSCI EM Weight Watchers Intevac

FCEF

FlexShares Dividend Dyn iPath Global Carbon Red Hat Kyocera ADR Reality Shares DIVS ETF

IQDY

AC HEEM WTW IVAC

GRN RHT KYO DIVY

Volume % chg from Latest Session (000) 65-day avg Close % chg

400 901 1,870 15,372 662

4883 3689 1977 1796 1317

19.93 32.65 20.83 11.08 6.80

69 99 14,616 86 81

1064 1018 924 917 853

23.71 -0.42 7.24 5.69 68.71 -13.89 50.27 -0.67 25.33 0.11

0.03 -2.68 -0.90 5.32 0.74

52-Week High Low

22.98 18.95 35.96 24.67 22.46 17.69 24.80 9.37 7.00 3.99 24.39 10.36 84.44 50.93 26.00

19.24 4.09 59.59 38.01 22.04

CURRENCIES

Country/currency

US$vs, YTDchg Thurs in US$ per US$ (%)

Americas Argentina peso .0636 15.7185 21.5 Brazil real .3042 3.2874 –17.0 Canada dollar .7417 1.3483 –2.6 Chile peso .001480 675.70 –4.6 Colombia peso .0003347 2987.39 –5.9 Ecuador US dollar 1 1 unch Mexico peso .0482 20.7631 20.7 Peru new sol .2948 3.393 –0.6 Uruguay peso .03508 28.5100 –4.7 Venezuela b. fuerte .100100 9.9901 58.4

Asia-Pacific 2016

Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group Yield/Rate (%) Last (l)Week ago

NYSE Arca

U.S.-dollar foreign-exchange rates in late New York trading

Yen, euro vs. dollar; dollar vs. major U.S. trading partners

5.00%

Thursday

Nasdaq

Total volume*1,558,110,880 237,975,848 Adv. volume* 560,837,086 68,783,186 Decl. volume* 954,920,865 164,867,255 Issues traded 3,029 1,336 Advances 994 412 Declines 1,872 900 Unchanged 163 24 New highs 127 19 New lows 56 15 Closing tick 314 13 Closing Arms† 0.90 0.84 Block trades* 6,654 1,187

* Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least 5,000 shares =Has traded fewer than 65 days

Forex Race

notes and bonds

ableBanking,adivisionofNortheastBank 1.00% Lewiston, ME 877-505-1933

AUPH

Volume Movers

Currencies

t

0.75%

OVAS

7.21 1.65 -63.6 5.73 0.60 87.0 6.59 1.56 108.8 19.82 12.28 3.5 10.00 0.20 1414.5

* Volumes of 100,000 shares or more are rounded to the nearest thousand

0.26%

Bankrate.com avg†:

Ovascience Aurinia Pharmaceuticals Lpath Red Hat Voltari Corp.

21.89 18.35 18.09 13.74 12.77

s

U.S. consumer rates

Symbol

0.44 0.40 0.87 2.15 1.08

CREDIT MARKETS Consumer Rates and Returns to Investor

Company

2.45 2.58 5.68 17.80 9.54

Most Active Stocks Company

NYSE MKT

Total volume* 724,395,812 12,001,882 Adv. volume* 257,250,921 7,225,979 Decl. volume* 453,256,560 4,015,937 Issues traded 3,118 337 Advances 1,249 147 Declines 1,738 162 Unchanged 131 28 New highs 89 3 New lows 20 3 Closing tick 116 23 Closing Arms† 1.27 0.40 Block trades* 5,484 158

Percentage Losers Latest Session Close Net chg % chg

Sources: SIX Financial Information; WSJ Market Data Group

0.127 2.927

9.804 5.363

Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch

Australian dollar .7218 1.3854 1.0 China yuan .1439 6.9503 7.0 Hong Kong dollar .1288 7.7620 0.1 India rupee .01474 67.848 2.5 Indonesia rupiah .0000743 13456 –2.7 Japan yen .008508 117.54 –2.3 Kazakhstan tenge .002998 333.54 –1.5 Macau pataca .1254 7.9731 –0.4 Malaysia ringgit .2231 4.4825 4.2 New Zealand dollar .6903 1.4486 –1.0 Pakistan rupee .00954 104.850 –0.05 Philippines peso .0201 49.782 6.2 Singapore dollar .6892 1.4509 2.3 South Korea won .0008297 1205.26 2.5 Sri Lanka rupee .0066836 149.62 3.7 Taiwan dollar .03109 32.169 –2.3

ONLINE Real-time U.S. stock quotes are available on WSJ.com. Track most-active stocks, new highs/lows, mutual funds and ETFs. Plus, get deeper money-flows data and email delivery of key stock-market data. All are available free at WSJMarkets.com

US$vs, YTDchg Thurs in US$ per US$ (%)

Country/currency

.02777 36.010 –0.1 .00004394 22760 2.8

Thailand baht Vietnam dong

Europe Czech Rep. koruna Denmark krone Euro area euro Hungary forint Iceland krona Norway krone Poland zloty Russia ruble Sweden krona Switzerland franc Turkey lira Ukraine hryvnia UK pound

.03862 25.893 4.0 .1404 7.1232 3.7 1.0438 .9581 4.1 .003361 297.55 2.4 .008795 113.70 –12.7 .1148 8.7127 –1.5 .2362 4.2340 7.9 .01640 60.977 –15.2 .1084 9.2250 9.2 .9748 1.0258 2.4 .2848 3.5113 20.3 .0382 26.1975 9.2 1.2283 .8141 20.0

Middle East/Africa Bahrain dinar Egypt pound Israel shekel Kuwait dinar Oman sul rial Qatar rial Saudi Arabia riyal South Africa rand

2.6536 .3769 –0.1 .0533 18.7451 139.4 .2620 3.8169 –1.9 3.2638 .3064 1.0 2.5970 .3851 0.03 .2746 3.641 –0.04 .2666 3.7511 –0.1 .0712 14.0442 –9.3 Close Net Chg % Chg YTD%Chg

WSJ Dollar Index 93.35

0.11 0.12

3.52

% Chg

YTD % chg

Sources: Tullett Prebon, WSJ Market Data Group

Commodities

COMMODITIES Thursday

52-Week

Pricing trends on someClose raw materials, or commodities Net chg % Chg High Low DJ Commodity

WSJ .COM

Low

0.09 225.84 224.99

Fred's

18.4 -12.2 39.1 -37.2

Volume (000)

NYSE

VanEck Vectors Gold Miner GDX

Mattel Inc

NYSE Composite

World

Volume, Advancers, Decliners

9421.08

High

-0.12

19933.83 19882.19 19918.88 -23.08

Trading Diary

Most-active and biggest movers among NYSE, NYSE Arca, NYSE MKT and Nasdaq issues from 4 p.m. to 6:30 p.m. ET as reported by electronic trading services, securities dealers and regional exchanges. Minimum share price of $2 and minimum after-hours volume of 5,000 shares.

Dow Jones Industrial Average

Late Trading

TR/CC CRB Index Crude oil, $ per barrel Natural gas, $/MMBtu Gold, $ per troy oz.

560.97

-0.66

190.31 52.95 3.538 1128.80

-0.47 0.46 -0.004 -2.30

573.28

420.23

23.87

23.61

-0.25 195.82 52.98 0.88 3.75 -0.11 -0.20 1364.90

-0.12

155.01 26.21 1.64 1060.10

8.07 38.98 74.37 4.79

7.96 42.95 51.39 6.46


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.

Friday, December 23, 2016 | B9

COMMODITIES Futures Contracts

Oats (CBT)-5,000 bu.; cents per bu.

Metal & Petroleum Futures Contract Open High hi lo Low Settle Chg Copper-High (CMX)-25,000 lbs.; $ per lb. 2.4905 2.5030 2.4550 2.4945 0.0030 Dec March'17 2.4930 2.5095 2.4570 2.4995 0.0025 Gold (CMX)-100 troy oz.; $ per troy oz. Dec 1131.20 1132.80 1128.30 1128.80 –2.30 Feb'17 1133.20 1135.50 1128.60 1130.70 –2.50 April 1135.60 1138.00 1132.00 1133.30 –2.50 June 1138.40 1140.40 1134.60 1136.00 –2.60 Aug 1139.60 1141.90 1138.20 1138.80 –2.70 Dec 1148.10 1148.50 1143.80 1144.90 –2.70 Palladium (NYM) - 50 troy oz.; $ per troy oz. 686.00 686.00 681.00 657.10 –3.30 Dec Jan'17 655.40 655.40 t 655.00 656.00 –3.30 March 658.10 663.45 652.15 656.60 –3.30 June 658.80 659.70 t 657.10 657.55 –3.50 Platinum (NYM)-50 troy oz.; $ per troy oz. 917.50 917.50 912.60 906.40 –6.90 Dec April'17 919.50 922.60 908.10 908.90 –7.60 Silver (CMX)-5,000 troy oz.; $ per troy oz. 15.915 15.970 15.790 15.815 –0.103 Dec March'17 16.000 16.085 15.815 15.871 –0.108 Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl. Feb 52.52 53.19 52.08 52.95 0.46 March 53.41 54.08 52.96 53.86 0.48 April 54.13 54.78 53.70 54.61 0.51 May 54.74 55.36 54.36 55.20 0.54 June 55.11 55.77 54.70 55.60 0.53 Dec 55.71 56.33 55.36 56.14 0.47 NY Harbor ULSD (NYM)-42,000 gal.; $ per gal. Jan 1.6411 1.6675 1.6244 1.6608 .0207 Feb 1.6602 1.6868 1.6443 1.6782 .0175 Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal. Jan 1.6005 1.6062 1.5780 1.6040 –.0015 Feb 1.6161 1.6222 1.5914 1.6198 –.0004 Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu. Jan 3.572 3.626 3.497 3.538 –.004 Feb 3.583 3.645 3.518 3.563 –.004 March 3.549 3.600 3.490 3.533 .006 April 3.418 3.472 3.384 3.422 .015 May 3.383 3.437 3.359 3.395 .015 Oct 3.428 3.450 3.388 3.427 .014

Open interest 1,174 151,163 685 275,143 41,457 34,899 11,327 21,853 16 7 24,246 660 2 39,150 448 130,503 471,832 335,306 139,799 114,547 219,654 200,694 37,118 110,419 39,010 116,351 37,937 164,013 255,986 118,109 100,538 86,380

Agriculture Futures Corn (CBT)-5,000 bu.; cents per bu. March July

347.25 361.75

348.00 362.25

Contract High hilo Low

Open

346.00 360.00

347.25 361.25

… 702,103 –.25 173,639

March May

222.75 222.00

222.75 222.00

Settle

Chg

Jan March

218.00 219.75

1007.75 1017.50

1008.75 1019.00

993.50 1003.00

Jan March

309.40 313.30

311.10 315.00

308.00 311.90

Jan March

36.19 36.44

Soybean Meal (CBT)-100 tons; $ per ton.

36.19 36.46

–5.25 –3.50

5,121 1,081

994.50 –12.25 101,575 1004.00 –13.00 317,275

Soybean Oil (CBT)-60,000 lbs.; cents per lb.

309.30 313.30

–.20 36,926 –.30 167,671

34.79 35.09

–1.25 53,946 –1.25 192,654

34.76 35.06

Rough Rice (CBT)-2,000 cwt.; $ per cwt.

t 927.50 928.50 t 951.50 952.00 Wheat (CBT)-5,000 bu.; cents per bu. March 399.25 400.50 396.50 397.00 May 412.00 413.00 409.50 410.00 Wheat (KC)-5,000 bu.; cents per bu. 408.50 410.50 407.25 408.00 March July 432.00 433.25 430.25 431.25 Wheat (MPLS)-5,000 bu.; cents per bu. March 539.00 543.25 533.50 535.00 May 536.00 540.00 532.00 532.50 Cattle-Feeder (CME)-50,000 lbs.; cents per lb. Jan 130.275 131.200 129.750 131.125 March 126.225 127.325 125.750 127.175 Cattle-Live (CME)-40,000 lbs.; cents per lb. Dec 113.400 114.825 113.400 114.000 Feb'17 116.225 117.200 116.050 116.800 Hogs-Lean (CME)-40,000 lbs.; cents per lb. Feb 65.300 65.750 64.425 64.725 April 68.125 68.500 67.550 67.725 Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft. Jan 310.20 310.50 307.50 308.10 March 321.00 321.00 318.00 318.20 Milk (CME)-200,000 lbs., cents per lb. Dec 17.36 17.39 s 17.35 17.38 Jan'17 16.66 16.78 16.50 16.73 Cocoa (ICE-US)-10 metric tons; $ per ton. March 2,278 2,283 2,183 2,189 May 2,272 2,276 2,180 2,184 Coffee (ICE-US)-37,500 lbs.; cents per lb. March 144.05 144.30 138.65 139.10 May 146.50 146.50 140.95 141.35 Sugar-World (ICE-US)-112,000 lbs.; cents per lb. March 18.24 18.31 18.13 18.16 May 18.00 18.10 17.92 17.95 941.50 962.00

944.50 969.00

–8.00 –9.50

3,550 8,123

–2.50 267,086 –2.25 70,654 –1.25 127,815 –1.25 63,255 –4.50 –3.75

34,593 13,883

.900 .975

11,003 19,305

.725 2,840 .575 125,527 –.175 –.275

85,415 47,990

–.70 –2.10

1,384 2,446

.07 .11

5,904 4,839

–90 126,343 –87 53,159 –5.45 –5.40

98,077 40,996

–.04 362,866 –.05 166,869

Bonds | WSJ.com/bonds Tracking Bond Benchmarks YTD total return (%)

1.9

Total return close

YTD total return (%)

Yield (%) Latest Low High

Index

Mortgage-Backed Bloomberg Barclays

Broad Market Bloomberg Barclays 1862.29

2.720 1.820 2.770

U.S. Aggregate

U.S. Corporate Indexes Bloomberg Barclays

1922.61

0.8

Mortgage-Backed

1904.97

0.9

Ginnie Mae (GNMA) 2.920 1.850 2.990

3.000 1.930 3.070

2604.37

5.2

U.S. Corporate

3.470 2.750 3.710

1123.26

0.8

Fannie mae (FNMA) 3.030 1.950 3.090

2504.59

3.5

Intermediate

2.960 2.190 3.120

1729.73

0.8

Freddie Mac (FHLMC) 3.040 1.980 3.110

Long term

4.630 3.960 5.130

496.89

-0.5

Muni Master

2.363 1.297 2.516

Double-A-rated

2.820 1.980 2.870

345.60

-0.8

7-12 year

2.443 1.300 2.618

Triple-B-rated

3.820 3.180 4.450

383.72

-0.7

12-22 year

2.854 1.610 3.047

22-plus year

3.416 2.027 3.622

9.4

3454.54

2.9

536.15

7.1

663.37

17.0 High Yield Constrained 6.204 5.953 10.099

Global Government J.P. Morgan†

382.45

36.9 Triple-C-rated

11.473 11.473 21.753

534.74

2675.54

12.7 High Yield 100

5.563 5.248 8.696

748.28

351.02

15.5 Global High Yield Constrained 5.862 5.661 9.437 8.9

286.49

0.5

368.90

High Yield Bonds Merrill Lynch 387.09

Europe High Yield Constrained 3.300 3.223 6.500

U.S Agency Bloomberg Barclays

2.5

Global Government 1.410 0.750 1.600

-1.0

1.960 0.770 1.960

Canada

n.a.

n.a.

EMU§

n.a. n.a. n.a.

705.45

3.4

France

0.770 0.270 1.100

513.15

3.8

Germany

0.290 -0.100 0.740

1597.32

1.0

U.S Agency

1.860 1.150 1.910

288.16

3.6

Japan

0.340 -0.120 0.670

1441.43

0.9

10-20 years

1.650 0.960 1.710

564.84

4.1

Netherlands

0.430 0.020 0.880

3083.18

2.6

20-plus years

3.410 2.390 3.460

900.67

9.1

U.K.

1.650 0.960 2.320

2327.41

3.9

Yankee

3.030 2.320 3.110

735.53

9.7

Emerging Markets ** 6.123 5.134 7.128

*Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds ** EMBI Global Index

† In local currency § Euro-zone bonds

Sources: Merrill Lynch; Bloomberg Barclays; J.P.Morgan

Global Government Bonds: Mapping Yields Yields and spreads over or under U.S. Treasurys on benchmark two-year and 10-year government bonds in selected other countries; arrows indicate whether the yield rose(s) or fell (t) in the latest session Country/ Coupon (%) Maturity, in years

1.000 2.000 3.250

0.250 0.000 0.000 0.250 1.250 0.100 0.100 0.250 1.300

Month ago

Year ago

1.094 2.313

0.977 2.238

1.729

2.021

U.S. 2 1.192 s 10 2.551 s

l

1.192 2.539

1.894 s 2.844 s

l

1.880

l

2.836

2.683

2.741

France 2 -0.691 t 10 0.730 s

l

-0.673

-0.659

-0.289

l

0.693

0.714

0.953

Germany 2 -0.790 t 10 0.262 s

l

-0.788

-0.740

-0.344

l

0.246

0.222

Italy 2 -0.145 s 10 1.851 s

l

-0.163

0.023

l

1.822

2.027

1.648

Japan 2 -0.182 t 10 0.052 t

l

-0.180

-0.161

-0.048

l

0.063

0.030

Spain 2 -0.252 s 10 1.402 s

l

-0.272

l

0.073 t 1.231 t

l l

10

4.750 1.000

Yield (%) Latest(l) 0 20 40 60 80 100 120 Previous l

Australia 2

1.250

U.K. 2

2.000

10

Spread Under/Over U.S. Treasurys, in basis points Latest Prev Year ago

70.2 29.3 -188.3

68.8 29.7

50.4

-186.5

-126.6

-184.6

-128.5

-198.0

-132.1

0.602 -228.9

-229.3

-163.5

0.136

-135.5

-84.1

-182.0 -198.3 -133.7

Dominion Gas Holdings Deutsche Bank McKesson Diamond 1 Finance

D DB MCK DELL

197.05 193.75

197.20 194.45

193.20 191.10

194.35 191.95

–.14 …

149-040 149-110

148-120

1.2382 1.2430

March June

.07 167,035 .12 41,369

.9796

March

123-115 123-135

123-015

117-022 117-035

116-282

–1.0 3,064,109

.8535 –.0001 218,467 .8576 –.0001 281

March June

.7451 .7460

.7461 .7469

.7404 .7414

.7420 –.0047 .7429 –.0047

Canadian Dollar (CME)-CAD 100,000; $ per CAD

Silver, troy oz.

2258.60

2.500 Dec. 15, ’19 4.500 April 1, ’25 2.284 March 15, ’19 3.480 June 1, ’19

3558 263 220 232

–64 –22 –15 –10

3472 291 n.a. n.a.

–9 –8 –8 –7

60 290 55 112

Last week

n.a. 312 66 112

... 86.89 ... ... ... 18.54 140.34 ...

Australia and New Zealand Banking Synchrony Financial Boeing Bank of America

ANZ SYF BA BAC

2.250 2.700 2.250 5.000

June 13, ’19 Feb. 3, ’20 June 15, ’26 May 13, ’21

156 254 94 108

15 15 11 10

n.a. n.a. 96 93

... 16.44 60.49 ...

... –1.62 –0.43 ...

63 89 57 97

10 8 7 7

67 n.a. n.a. 105

... 36.88 157.46 22.54

... –0.59 –0.01 –0.40

High-yield issues with the biggest price increases… Maturity

Bond Price as % of face value Current One-day change

Last week

2.06 1.59 1.50 1.45

85.250 96.500 71.500 n.a.

23.87 64.85 ... ...

0.42 0.28 ... ...

106.125 93.750 104.000 99.250

... 7.95 8.00 ...

... –1.24 –0.12 ...

–3.18 –3.16 –1.27

98.500 94.020 n.a. n.a.

... 15.49 4.90 ...

... –2.39 2.08 ...

–1.25 –1.15 –1.13 –1.06

n.a. 100.750 105.012 79.750

... 22.76 18.66 8.93

... –2.86 –2.76 –2.72

Issuer

Symbol

CenturyLink DaVita Peabody Energy QVC

CTL DVA BTU QVCN

7.650 March 15, ’42 5.000 May 1, ’25 6.250 Nov. 15, ’21 4.850 April 1, ’24

88.250 99.085 67.750 99.939

Jaguar Holding Kindred Healthcare Felcor Lodging Sabine Pass Liquefaction

PPDI KND FCH CQP

6.375 Aug. 1, ’23 8.750 Jan. 15, ’23 6.000 June 1, ’25 5.000 March 15, ’27

108.064 94.330 104.689 100.500

1.19 1.08 1.06 1.00

Stock Performance Close ($) % chg

…And with the biggest price decreases 10.000 3.900 5.875 6.300

Sept. 1, ’19 May 15, ’24 May 15, ’23 April 1, ’20

6.050 7.000 5.875 6.250

Aug. 15, ’21 May 15, ’25 May 1, ’19 Oct. 1, ’40

94.500 –7.13 90.500 85.375 35.500 40.000 98.250 103.250 80.500

*Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-run Treasury; 100 basis points=one percentage pt.; change in spread shown is for Z-spread. Note: Data are for the most active issue of bonds with maturities of two years or more Sources: MarketAxess Corporate BondTicker; WSJ Market Data Group

2251.80

2258.25 2253.25

March June

2261.00 2255.25

2251.50 2246.25

2258.70

–1.70

56,622

2258.75 2253.25

–1.75 2,735,177 –1.75 9,592

1669.00 1659.50

–9.90 –9.70

Mini S&P Midcap 400 (CME)-$100 x index 1677.30 1658.50

March June

1680.10 1661.20 s

1664.00 1658.50

4953.0 s 4950.3 s

4917.0 4916.3

Mini Nasdaq 100 (CME)-$20 x index 4948.0 4940.5

March June

4936.5 4935.0

Mini Russell 2000 (ICE-US)-$100 x index 1373.60 1366.80

March June

1377.30 1366.80

1357.20 1366.80

1251.60

1252.60

102.97 102.90

March June

1249.00

103.15 103.10

96,607 n.a.

–13.0 224,173 –12.0 246

1363.10 –11.00 673,342 1360.10 –11.00 368

U.S. Dollar Index (ICE-US)-$1,000 x index

1252.90

–1.20

8,164

103.10 103.07

.07 .07

85,080 1,303

102.59 102.62

80,674 1,716

Source: SIX Financial Information

12517

Other metals LBMA Platinum Price PM *912.0 Platinum,Engelhard industrial 908.0 Platinum,Engelhard fabricated 1008.0 Palladium,Engelhard industrial 659.0 Palladium,Engelhard fabricated 759.0 Aluminum, LME, $ per metric ton *1730.5 Copper,Comex spot 2.4945 Iron Ore, 62% Fe CFR China-s 77.1 Shredded Scrap, US Midwest-s,w 286 Steel, HRC USA, FOB Midwest Mill-s 584

Fibers and Textiles 0.5425 0.7070 *78.20 75.000 n.a.

Burlap,10-oz,40-inch NY yd-n,w Cotton,1 1/16 std lw-mdMphs-u Cotlook 'A' Index-t Hides,hvy native steers piece fob-u Wool,64s,staple,Terr del-u,w

Grains and Feeds n.a. 111 3.2850 95.6 503.5 n.a. 85 250 2.8300 356.00 21.38 6.8350 317.80

Barley,top-quality Mnpls-u Bran,wheat middlings, KC-u Corn,No. 2 yellow,Cent IL-bp,u Corn gluten feed,Midwest-u,w Corn gluten meal,Midwest-u,w Cottonseed meal-u,w Hominy feed,Cent IL-u,w Meat-bonemeal,50% pro Mnpls-u,w Oats,No.2 milling,Mnpls-u Rice, 5% Broken White, Thailand-l,w Rice, Long Grain Milled, No. 2 AR-u,w Sorghum,(Milo) No.2 Gulf-u SoybeanMeal,Cent IL,rail,ton48%-u

Thursday

9.7400 6.6000 3.8300 3.3550 4.4850

Soybeans,No.1 yllw IL-bp,u Wheat,Spring14%-pro Mnpls-u Wheat,No.2 soft red,St.Louis-bp,u Wheat - Hard - KC (USDA) $ per bu-u Wheat,No.1soft white,Portld,OR-u

Food Beef,carcass equiv. index choice 1-3,600-900 lbs.-u select 1-3,600-900 lbs.-u Broilers,dressed 'A'-u Broilers, National comp wghtd-u,w Butter,AA Chicago Cheddar cheese,bbl,Chicago Cheddar cheese,blk,Chicago Milk,Nonfat dry,Chicago lb. Cocoa,Ivory Coast-w Coffee,Brazilian,Comp Coffee,Colombian, NY Eggs,large white,Chicago-u Flour,hard winter KC Hams,17-20 lbs,Mid-US fob-u Hogs,Iowa-So. Minnesota-u Pork bellies,12-14 lb MidUS-u Pork loins,13-19 lb MidUS-u Steers,Tex.-Okla. Choice-u Steers,feeder,Okla. City-u,w

174.64 160.91 n.a. 0.8265 2.2150 156.75 171.00 105.00 2563 1.4141 1.6064 1.3050 12.80 0.75 58.13 1.2384 0.8527 113.92 143.14

Fats and Oils 38.5500 0.2750 n.a. 0.3354 0.3150 n.a.

Corn oil,crude wet/dry mill-u,w Grease,choice white,Chicago-u Lard,Chicago-u Soybean oil,crude;Centl IL-u Tallow,bleach;Chicago-u Tallow,edible,Chicago-u

December 22, 2016

Week Latest ago

Inflation Nov. index level

Chg From (%) Oct. '16 Nov. '15

–0.16 0.004

241.353 249.227

All items Core

1.7 2.1

International rates Latest

Week ago

52-Week High Low

3.75 3.75 3.75 3.50 2.70 2.70 2.70 2.70 1.475 1.475 1.475 1.475

Policy Rates Euro zone Switzerland Britain Australia

0.00 0.50 0.25 1.50

0.00 0.50 0.25 1.50

0.05 0.50 0.50 2.00

0.00 0.50 0.25 1.50

1.30

0.15

Overnight repurchase U.S.

0.52

—52-WEEK— High Low

0.55

Other short-term rates

1.25

1.25

1.25

1.00

Federal funds Effective rate High Low Bid Offer

0.6800 0.8125 0.5000 0.6600 0.6900

0.6800 0.8125 0.5000 0.6600 0.6900

0.6900 0.8125 0.5000 0.6600 0.7500

0.2400 0.5600 0.0800 0.0800 0.2500

0.490 0.480 0.490 0.160 0.515 0.530 0.530 0.215 0.645 0.645 0.645 0.340

4 weeks 13 weeks 26 weeks

Secondary market Fannie Mae 30-year mortgage yields 3.767 3.828 3.828 2.806 3.801 3.862 3.862 2.832

Largest 100 exchange-traded funds, latest session

ETF

AlerianMLPETF CnsmrDiscSelSector CnsStapleSelSector DBGoldDoubleLgETN DBGoldDoubleShrt DeutscheXMSCIEAFE EnSelectSectorSPDR FinSelSectorSPDR GuggenheimSP500EqW HealthCareSelSect IndSelSectorSPDR iShIntermCredBd iSh1-3YCreditBond iSharesTIPSBondETF iSh3-7YTreasuryBd iShCoreHiDividend iShCoreMSCIEAFEETF iShCoreMSCIEmgMk iShCoreS&P500ETF iShCoreS&PMdCp iShCoreS&PSmCpETF iShCoreUSAggBd iShSelectDividend iShEdgeMSCIMinEAFE iShEdgeMSCIMinUSA iSharesGold iShiBoxx$InvGrCpBd iShiBoxx$HYCpBd iSharesJPMUSDEmgBd iShMBSETF iSharesMSCIEAFESC iSharesMSCIEAFEETF iShMSCIEmgMarkets iShMSCIEurozoneETF iShMSCIJapanETF iShNasdaqBiotech iShNatlAMTFrMuniBd iShRussell1000Gwth iShRussell1000ETF iShRussell1000Val iShRussell2000Gwth iShRussell2000ETF iShRussell2000Val iShRussell3000ETF iShRussellMid-Cap iShRussellMCValue iShS&P500Growth iShS&P500ValueETF iShUSPfdStk

www.ebook3000.com

AMLP XLY XLP DGP DZZ DBEF XLE XLF RSP XLV XLI CIU CSJ TIP IEI HDV IEFA IEMG IVV IJH IJR AGG DVY EFAV USMV IAU LQD HYG EMB MBB SCZ EFA EEM EZU EWJ IBB MUB IWF IWB IWD IWO IWM IWN IWV IWR IWS IVW IVE PFF

12.65 82.63 51.96 19.31 7.09 28.12 76.42 23.54 87.29 68.94 62.93 107.70 104.75 112.29 121.83 82.77 53.38 41.42 226.85 166.24 137.94 107.39 89.20 60.66 45.30 10.86 116.15 86.44 109.92 105.63 49.13 57.53 34.08 34.22 49.67 266.70 107.72 105.81 125.52 112.90 154.31 135.32 119.52 134.01 180.09 81.00 122.94 102.17 37.32

5.0 1.20 5.7 –1.08 2.9 –0.15 6.4 –0.67 0.41 –20.0 3.5 –0.11 0.41 26.7 –0.25 21.7 –0.40 13.9 0.13 –4.3 –0.19 18.7 0.4 0.02 0.1 0.08 2.4 0.31 –0.01 –0.6 0.28 12.8 –0.21 –1.8 5.2 –1.05 –0.15 10.7 –0.59 19.3 –0.99 25.3 ... –0.6 –0.11 18.7 –0.07 –6.5 8.3 ... 6.2 –0.37 1.9 0.01 7.3 0.22 3.9 0.04 –0.08 –1.9 –0.18 –1.6 –0.23 –2.0 5.9 –1.19 –0.22 –2.3 2.5 –0.16 –0.40 –21.2 0.15 –2.7 6.4 –0.34 –0.21 10.8 –0.09 15.4 –1.13 10.8 –0.86 20.2 –0.66 30.0 –0.33 11.4 –0.44 12.4 –0.30 18.0 6.2 –0.24 –0.15 15.4 0.21 –3.9

ETF

2.50

2.50

2.50

2.25

...

...

...

Commercial paper

Treasury bill auction

30 days 60 days

—52-WEEK— High Low

Call money

Exchange-Traded Portfolios | WSJ.com/ETFresearch Thursday, December 22, 2016 Closing Chg YTD Symbol Price (%) (%)

Week Latest ago

U.S. government rates Discount

U.S. consumer price index

... 0.16 ... ... ... –0.91 –0.88 ...

2260.70

–18 127,746 –19 185

Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a guide to general levels but don’t always represent actual transactions.

1.879

Current

19873 19811

Borrowing Benchmarks | WSJ.com/bonds Money Rates

1.238

Maturity

19830 19765

KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; I=Natural Gas Intelligence; L=livericeindex.com; M=midday; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=The Steel Index; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. *Data as of 12/21 Source: WSJ Market Data Group

1.246

Stock Performance Close ($) % chg

15.8300 18.9960 15.9200 19.9000 £12.7796 15.7700

Engelhard industrial Engelhard fabricated Handy & Harman base Handy & Harman fabricated LBMA spot price (U.S.$ equivalent)

0.630

Spread*, in basis points One-day change

1132.57 1217.51 1131.35 1255.79 *1134.40 *1133.65 1174.73 1186.03 1186.03 1369.90 1110.18 1186.03

Engelhard industrial Engelhard fabricated Handy & Harman base Handy & Harman fabricated LBMA Gold Price AM LBMA Gold Price PM Krugerrand,wholesale-e Maple Leaf-e American Eagle-e Mexican peso-e Austria crown-e Austria phil-e

1.802

-35.9

0.6513 1.0844 3.570 3.500 3.350 3.310 3.380 3.010 3.430 48.050 11.000

Gold, per troy oz

0.146

-129.2

.0008 391,985 .0008 8,559

Thursday

Metals

1.527

-132.0

19899 s 19828 s

Mini S&P 500 (CME)-$50 x index

Coins,wholesale $1,000 face-a

Propane,tet,Mont Belvieu-g Butane,normal,Mont Belvieu-g NaturalGas,HenryHub-i NaturalGas,TranscoZone3-i NaturalGas,TranscoZone6NY-i NaturalGas,PanhandleEast-i NaturalGas,Opal-i NaturalGas,MarcellusNE PA-i NaturalGas,HaynesvilleN.LA-i Coal,C.Aplc.,12500Btu,1.2SO2-r,w Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w

0.083

-111.9

1.0479 1.0531

Thursday, December 22, 2016 These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace— separate from the futures price on an exchange, which reflects what the commodity might be worth in future months.

1.361

-43.6

.04766 –.00049 140,033

Cash Prices | WSJ.com/commodities

-85.2 -34.7

80,024 459

1.0468 1.0521

S&P 500 Index (CME)-$250 x index March

March

.8514 .8555

.7195 –.0036 .7179 –.0036

.04752

Mini Russell 1000 (ICE-US)-$100 x index

.8558 .8598

-146.4 -117.8

1.0544 1.0595

19875 19815

March June

Currency Futures .8541 .8583

54,515

Index Futures

–.5 2,938,458

March June

.0001

Mini DJ Industrial Average (CBT)-$5 x index

Japanese Yen (CME)-¥12,500,000; $ per 100¥

0.126

-110.9

.9799

.7183 .7169

.04819

1.0472 1.0523

March June

2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100% Dec 108-170 108-180 108-162 108-170 … 5,094 March'17 108-065 108-070 108-047 108-055 –.5 1,115,976 30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg. Dec 99.463 99.465 99.463 99.465 … 77,607 April'17 99.290 99.290 99.285 99.290 … 218,466 10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100% March 92.906 93.016 92.719 92.938 –.016 29,738 1 Month Libor (CME)-$3,000,000; pts of 100% March 99.1700 99.1700 t 99.1700 99.1650 –.0025 22 Eurodollar (CME)-$1,000,000; pts of 100% Jan 98.9925 98.9950 98.9900 98.9900 –.0025 179,685 March 98.9350 98.9400 98.9300 98.9300 –.0050 1,442,867 June 98.7650 98.7650 98.7500 98.7550 –.0050 1,303,497 Dec 98.4350 98.4450 98.4150 98.4250 –.0100 1,298,229

-0.156

-114.9

.7244 .7227

.04812

March

123-085 117-007

.9788

Euro (CME)-€125,000; $ per € –4.0 588,966

1.2312 –.0066 203,751 1.2341 –.0066 836

Mexican Peso (CME)-MXN 500,000; $ per MXN

5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100% March

1.2304 1.2335

.9836

.7216 .7210

March June

3,717 9,408

148-260

Open interest

Chg

Australian Dollar (CME)-AUD 100,000; $ per AUD

Treasury Notes (CBT)-$100,000; pts 32nds of 100% March

U.S. Canada Japan

-144.4

1.2405 1.2433

Swiss Franc (CME)-CHF 125,000; $ per CHF

Treasury Bonds (CBT)-$100,000; pts 32nds of 100% March

Settle

British Pound (CME)-£62,500; $ per £

1,054 1,749

–3.50 –2.90

Contract High hilo Low

Open

Interest Rate Futures

Prime rates

4.150 Feb. 1, ’24 5.100 Sept. 15, ’23 2.350 Aug. 2, ’21 4.400 May 30, ’21

FE CC DO CLF

Jan March

-196.2

KMI NBR C ABXCN

FirstEnergy Solutions Chemours Diamond Offshore Drilling Cliffs Natural Resources

70.20 70.60

-247.6

Kinder Morgan Energy Partners Nabors Industries Citigroup Barrick North America Finance

LAUR ENBL RFP DYN

69.76 70.15

0.276 -249.9

…And spreads that widened the most

Laureate Education Enable Midstream Partners Resolute Forest Products Illinois Power Generating

70.77 71.12

-58.9

11.000 March 15, ’20 6.000 Aug. 1, ’49 5.500 Sept. 1, ’41 6.484 Oct. 23, ’45

Coupon (%)

70.13 70.48

-102.5

Investment-grade spreads that tightened the most… EXXI JPM TWC CHTR

29.31 29.44

Orange Juice (ICE-US)-15,000 lbs.; cents per lb.

-71.7

-137.5

Price moves by a company’s debt in the credit markets sometimes mirror and sometimes anticipate moves in that same company’s share price. Here’s a look at both for two companies in the news.

Energy XXI Gulf Coast JPMorgan Chase Spectrum Management Holding Charter Communications Operating

29.45 29.44

March May

-137.2

-70.0

Corporate Debt

Symbol Coupon (%)

29.45 29.44

Cotton (ICE-US)-50,000 lbs.; cents per lb.

104.4

Source: Tullett Prebon

Issuer

29.45 29.44

March May

Open interest

Chg

Thursday

Yield (%) Latest Low High

Index

Settle

Energy

Return on investment and spreads over Treasurys and/or yields paid to investors compared with 52-week highs and lows for different types of bonds Total return close

Contract High hilo Low

Open

Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb. 218.00 219.50

Soybeans (CBT)-5,000 bu.; cents per bu.

Jan March

Open interest

| WSJ.com/commodities

Closing Chg YTD Symbol Price (%) (%)

iShrSilverTr iSh1-3YTreasuryBd iSh7-10YTreasuryBd iShRussellMCGrowth PwrShrs QQQ PS SP500LoVoltlPrt PowerSharesLoan SPDRBloomBarcHYBd SchwIntlEqty SchwUS BrdMkt SchwUS LrgCap SPDR DJIA Tr SPDR GldTr SPDR S&PMdCpTr SPDR S&P 500 SPDR S&P Div TechSelectSector UtilitiesSelSector VanEckVectBiotech VanEckGoldMiner VanEckVctrOilSvcs VanEckVectorsPharm VanEckVctrRetail VanEckSemiconduc VanguardInfoTech VanguardSCVal VangdDivApp VanguardFTSEDevMk VanguardFTSEEmgMk VanguardFTSEEurope VanguardAWxUS VanguardGrwth VanguardHiDiv VanguardIntrm VangIntrCorpBd VanguardLC VanguardMC VanguardMCVal VanguardReit VanguardS&P500 VanguardSTBd VanguardSTCpBd VanguardSC VanguardTotBd VanguardTotIntlBd VanguardTtlIntlStk VanguardTotStk VangdTotlWrld VanguardValue WisdomTreeEurope WisdomTreeJapanHdg

SLV SHY IEF IWP QQQ SPLV BKLN JNK SCHF SCHB SCHX DIA GLD MDY SPY SDY XLK XLU BBH GDX OIH PPH RTH SMH VGT VBR VIG VEA VWO VGK VEU VUG VYM BIV VCIT VV VO VOE VNQ VOO BSV VCSH VB BND BNDX VXUS VTI VT VTV HEDJ DXJ

14.98 84.34 103.86 98.04 120.12 41.80 23.32 36.57 27.63 54.59 53.73 198.97 107.59 303.24 225.38 85.88 48.92 48.62 107.41 19.07 33.87 52.38 76.90 72.80 123.00 121.73 85.86 36.38 34.86 47.39 43.87 112.34 76.29 82.37 84.95 103.24 132.60 98.03 80.61 207.01 79.22 79.01 129.56 80.22 54.06 45.44 116.24 61.19 93.82 57.42 51.27

–0.93 13.6 0.04 –0.0 –0.04 –1.6 6.7 –0.69 7.4 –0.28 8.4 0.22 4.1 ... 7.8 0.14 0.3 –0.22 –0.27 11.3 –0.19 10.6 –0.10 14.4 6.0 –0.24 –0.60 19.4 –0.17 10.6 –0.24 16.7 –0.20 14.2 0.35 12.3 0.10 –15.4 –0.10 39.0 –0.09 28.1 ... –19.8 –1.59 –1.1 0.51 36.6 –0.38 13.6 –0.69 23.2 –0.20 10.4 –0.27 –0.9 6.6 –0.94 –0.19 –5.0 1.1 –0.39 5.6 –0.32 –0.04 14.3 –0.37 –0.8 1.0 –0.01 –0.19 10.4 –0.54 10.4 –0.48 14.1 1.1 –0.16 –0.13 10.7 –0.05 –0.4 0.0 –0.05 –0.77 17.1 –0.11 –0.7 2.2 –0.07 0.7 –0.48 –0.26 11.4 6.2 –0.39 –0.05 15.1 6.7 –0.28 2.4 0.20

n.q.

30 to 270 days

Commercial paper (AA financial) 0.88

0.98

90 days

1.03

0.45

Euro commercial paper n.q. -0.08 -0.14 n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q. n.q.

n.q. n.q. n.q. n.q. n.q. n.q.

30 day Two month Three month Four month Five month Six month

Libor One month Three month Six month One year

0.75611 0.99706 1.31600 1.68789

0.70728 0.97039 1.29822 1.65456

0.75611 0.99761 1.32267 1.69956

0.42190 0.60310 0.82730 1.11560

-0.380 -0.335 -0.227 -0.086

-0.383 -0.331 -0.226 -0.084

-0.204 -0.127 -0.038 0.059

-0.386 -0.337 -0.227 -0.086

Euro Libor One month Three month Six month One year

Euro interbank offered rate (Euribor) -0.369 -0.316 -0.216 -0.082

One month Three month Six month One year

Latest

-0.370 -0.316 -0.217 -0.081 Value Traded

-0.199 -0.131 -0.040 0.060

-0.374 -0.318 -0.220 -0.082

52-Week High Low

DTCC GCF Repo Index 0.486 0.496

Treasury MBS

71.250 1.266 0.244 66.340 1.328 0.257

Open Implied Settle Change Interest Rate

DTCC GCF Repo Index Futures Treasury Dec Treasury Jan Treasury Feb

99.505 0.010 5554 0.495 99.345 unch. 4227 0.655 99.350 0.005 4803 0.650

Weekly survey Latest

Week ago Year ago

Freddie Mac 30-year fixed 15-year fixed Five-year ARM

4.30 3.52 3.32

4.16 3.37 3.19

3.96 3.22 3.06

Notes on data: U.S. prime rate is effective December 15, 2016. Discount rate is effective December 15, 2016. U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks; Other prime rates aren’t directly comparable; lending practices vary widely by location; DTCC GCF Repo Index is Depository Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in billions of U.S. dollars. Futures on the DTCC GCF Repo Index are traded on NYSE Liffe US. Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; General Electric Capital Corp.; Tullett Prebon Information, Ltd.


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 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

* ***

CURRENCIES

Rupee Ruckus Squeezes Indians Abroad Government’s ban of large notes creates a cash bind for expats; ‘no way to be prepared’

When Cash Is Dethroned India's decision to ban 500- and 1,000-rupee notes affects the lion's share of Indian money in circulation and about a third of bills by volume. How much currency India has collected vs. issued From Nov. 10 to Dec. 10

BY CHELSEY DULANEY

Analysts Diverge On Views For Buck

AmcpA p AMutlA p BalA p BondA p CapIBA p CapWGrA EupacA p FdInvA p GwthA p HI TrA p ICAA p IncoA p N PerA p NEcoA p NwWrldA SmCpA p TxExA p

27.46 37.07 24.94 12.65 58.07 43.82 45.02 55.04 42.50 10.24 36.53 21.73 35.44 36.89 50.92 45.75 12.70

-0.0610.0 +0.0414.9 -0.02 9.2 ... 2.1 ... 6.7 -0.07 6.5 -0.71 0.5 -0.1013.8 -0.13 9.6 +0.0115.9 -0.0115.5 ...10.9 -1.48 2.2 -0.17 2.6 -0.64 2.8 -0.25 5.2 +0.01 -0.1

Value

20-rupee notes 5.4%

100-rupee notes 9.6%

Other notes* 4%

account, that many say they don’t have. Currency-exchange services and many overseas branches of Indian banks aren’t accepting the bills for exchange or deposit because Mr. Modi’s decision rendered them illegal. The 500- and 1,000-rupee bills are worth only about $7.50 and $15, respectively, but many overseas Indians keep piles on hand to pay for small expenses such as taxis, hotels or gifts during visits without having to pay foreign-exchange fees. “There is a huge Indian diaspora outside of India and all of us are trying to figure it out,” said Vaibhav Agrawal,

sense to lose out on the exchange rate, the exchange fees when we’re going to be traveling back in a year again,” said Mr. Karnawat, who moved to the U.S. in 1996. He says he can travel to India before year-end, or find someone traveling to India to exchange the bills for him. But even these paths are riddled with obstacles. Indian banks have stopped exchanging the bills and are now only accepting deposits. Lines often stretch for hours. Attempts to deposit large amounts could bring tax consequences or legal problems. Mr. Agrawal in Chicago grew so frustrated with the

who lives in Chicago and had been keeping about $600 of the now-banned currency for trips to his Indian hometown. After contacting about a dozen friends, Mr. Agrawal finally found someone traveling to India before year-end to try to exchange his bills. Mr. Modi’s decision, which took about 86% of India’s currency out of circulation, has already wreaked havoc on India’s cash-based economy and threatened India’s position as one of the fastest-growing emerging markets. Real-estate sales have plummeted while sales of bigticket items such as vehicles have also dried up as the In-

dian government struggles to get the new bills into people’s pockets. Critics have labeled it a “war on cash” that has been particularly hard on the poor, who often depend on off-thebooks cash payments. The Modi administration has said the move will eventually lead to better tax collection, improved surveillance of crime networks, and more accurate monitoring of commercial activity itself. Like many Indians living abroad, Mr. Karnawat in New York built up a stash of rupees through decades of trips back home. “My family travels to India so often it doesn’t make

Analysts are making their bets on how the world's most traded currencies will move in the year to come. Euro vs. dollar

$1.20

Traders Make Big Bet On a Bond Rebound

Forecasts by:

1.15

J.P. Morgan

1.10

Bank of America Merrill Lynch Goldman Sachs

1.05 1.00 0.95

Traders have placed large wagers that prices of a popular bond exchange-traded fund will rise, a sign investors are

Deutsche Bank

0.90 2016

2017

By Gunjan Banerji, Min Zeng and Ben Eisen

Pound vs. dollar

1.50 1.40 1.30 Oxford Economics National Australia Bank HSBC Deutsche Bank

1.20 1.10 1.00 2015

2016

2017

Dollar vs. yen

¥130

Capital Economics

125 120 115

Goldman Sachs

110

Bank of America Merrill Lynch

105 100 2015

2016

J.P. Morgan

2017

THE WALL STREET JOURNAL.

Sources: Factset (currencies); the companies (forecasts)

ing. This is continuing in 2016 and likely in 2017 as well,” the note added. Others aren’t so positive. Goldman Sachs and Oxford Economics expect the euro to fall to parity with the dollar by the end of next year. Morgan Stanley and Deutsche Bank expect it to travel even further, falling to $0.97 and $0.95 respectively. Some think the euro’s decline against the dollar may already be exhausted, while others believe the eurozone’s ultralow interest rates and slow growth will continue to

Net YTD NAV Chg %Ret Fund

DoubleLine Funds

USBdIdxInstPrem 11.43

Fidelity Advisor I Net YTD

NAV Chg %Ret NwInsghtI

41.38 -0.0114.6 Del Invest Instl Value AMG Managers Funds NA YacktmanFd I 23.36 -0.0111.9 Dimensional Fds 5GlbFxdInc 10.83 AQR Funds 23.59 MgdFutStrI 9.34 -0.01 -8.2 EmgMktVa EmMktCorEq 17.05 Baird Funds 11.60 AggBdInst 10.68 ... 2.8 IntlCoreEq IntSmCo 17.05 CorBdInst 11.01 ... 4.0 IntSmVa 18.85 BlackRock Funds A US CoreEq1 19.45 GlblAlloc p 18.20 -0.04 3.9 US CoreEq2 18.79 BlackRock Funds C US Small 34.05 GlblAlloc t 16.57 -0.04 3.1 US SmCpVal 37.80 BlackRock Funds Inst US TgdVal 24.24 EqtyDivd 22.74 -0.0217.2 USLgVa 35.46 GlblAlloc 18.30 -0.04 4.2 Dodge & Cox HiYldBd 7.63 -0.0213.6 Balanced 104.08 StratIncOpptyIns 9.83 +0.01 3.5 Income 13.53

... 1.9 FPA Funds FPACres

27.22 -0.10 7.6

Fidelity Freedom

WshA p

... NA ... 1.4 -0.2218.0 -0.1110.3 -0.02 4.8 -0.03 4.5 -0.02 7.0 -0.0815.9 -0.0917.7 -0.3024.3 -0.3329.7 -0.1928.1 -0.0420.1

FF2020 FF2025 FF2030 FreedomK2020 FreedomK2025 FreedomK2030 FreedomK2035 FreedomK2040

15.29 13.09 16.08 14.23 14.86 15.17 15.68 15.71

Fidelity Invest

Balanc BluCh Contra ContraK CpInc r DivIntl -0.2017.4 DivIntlK r ... 5.1 GroCo

22.11 68.04 99.69 99.61 9.73 33.08 33.00 146.10

-0.04 -0.04 -0.06 -0.03 -0.04 -0.05 -0.06 -0.06

will fall by another 4% by the end of 2017. “Political risk looks set to rise into the new year,” said Deutsche Bank analyst Oliver Harvey in a recent note. “We are concerned that initial negotiations could be fractious.” Forecasts for the yen in one year’s time are heavily spread out, ranging from ¥130 per dollar to ¥99. The yen is now at about ¥117.50 to the dollar. Much of the disagreement comes down to how far analysts believe the policies of the Federal Reserve and Bank of Japan will diverge.

Net YTD NAV Chg %Ret Fund

146.08 38.02 -0.11 8.0 GrowCoK 7.75 186.60 -0.5422.8 InvGB InvGrBd 11.04 49.69 TotRetBdI 10.60 +0.01 1.6 LowP r TotRetBdN 10.59 ... 1.3 LowPriStkK r 49.65 MagIn 92.31 Federated Instl 83.93 StraValDivIS 5.93 +0.0210.3 OTC Puritn 20.71 Fidelity SrsEmrgMktF 15.45 500IdxInst 79.09 -0.1413.0 SrsInvGrdF 11.05 500IdxInstPrem 79.09 -0.1413.0 TotalBond 10.47 500IdxPrem 79.09 -0.1413.0 ExtMktIdxPrem r 55.77 -0.4116.6 Fidelity Selects Biotech r 175.17 TMktIdxF r 65.08 -0.1813.6 TMktIdxPrem 65.08 -0.1813.6 First Eagle Funds 54.20 USBdIdxPrem 11.43 ... 1.9 GlbA Intl Stk Stock

Data provided by

Net YTD NAV Chg %Ret Fund

weaken the currency. Analysts are more bearish about the British pound. The U.K. currency had a dismal 2016, falling from as high as $1.50 to below $1.20 after the U.K. voted on June 23 to leave the European Union. None of the forecasts sees sterling at higher than $1.27 at the end of 2017, a level already reached this month. The most pessimistic forecasts for the pound are Deutsche Bank’s and HSBC’s, at $1.06 and $1.10 respectively. At around $1.185, the average forecast suggests the pound

Fund

lack of information about the ban that he sent more than a dozen tweets to India’s central bank, financial minister and the Indian consulate in Chicago. No one responded, he said. In the Jackson Heights neighborhood of Queens, Shaikh Abdul Hai has searched for weeks for someone traveling to India by year-end to exchange about $300 of rupees for him. “Of course it’s painful to lose the money. I’m a working man,” said Mr. Hai, who works at India Sari Palace, a retailer situated on a block dotted with curry houses and shops known as “Little India.”

CREDIT MARKETS

Foreign-Exchange Forecasts

Thursday, December 22, 2016

American Funds Cl A

50rupee notes 4.3%

500-rupee notes 47.8%

*Other notes include 10-rupee (1.9%), 50-rupee (1.2%), 20-rupee (0.6%), 2- and 5-rupee (0.3%) † THE WALL STREET JOURNAL. As of March 2016 Source: Reserve Bank of India

e-Ex-distribution. f-Previous day’s quotation. g-Footnotes x and s apply. j-Footnotes e and s apply. k-Recalculated by Lipper, using updated data. p-Distribution costs apply, 12b-1. r-Redemption charge may apply. s-Stock split or dividend. t-Footnotes p and r apply. v-Footnotes x and e apply. x-Ex-dividend. z-Footnote x, e and s apply. NA-Not available due to incomplete price, performance or cost data. NE-Not released by Lipper; data under review. NN-Fund not tracked. NS-Fund didn’t exist at start of period.

Net YTD NAV Chg %Ret Fund

1,000rupee notes 7%

1,000-rupee notes 38.6%

India’s decision to ban larger-denomination rupee notes was intended to thwart corruption.

Top 250 mutual-funds listings for Nasdaq-published share classes with net assets of at least $500 million each. NAV is net asset value. Percentage performance figures are total returns, assuming reinvestment of all distributions and after subtracting annual expenses. Figures don’t reflect sales charges (“loads”) or redemption fees. NET CHG is change in NAV from previous trading day. YTD%RET is year-to-date return. 3-YR%RET is trailing three-year return annualized.

Fund

10-rupee notes 35.5%

Volume

2- and 5-rupee notes 12.9%

Mutual Funds | WSJ.com/fundresearch Explanatory Notes

$68

500rupee notes 17.4%

$1.60

The U.S. dollar’s explosive rise is the major story in international currency markets as 2016 draws to a close. What happens next? The surprising thing about 2017 is just how little consensus there is. Nine forecasts made by investment banks and research houses for the year ahead show a variety of views on how exchange rates will develop in 2017. The dollar has jumped by more than 5% against a basket of international currencies since the Nov. 8 presidential election, reaching a 14-year peak. That shift drove the euro to its lowest in nearly 14 years in December, hitting just $1.0352. Dollar parity isn’t a consensus bet, though. Nine major forecasters see the euro at $1.037 on average by the end of 2017, barely changed from its current level. “Resilient Euro area growth is central to our positive outlook,” said UBS analysts in their year-ahead research on currency markets. The bank has among the most bullish euro forecasts, expecting a $1.13 exchange rate by the end of 2017. “The Euro area and U.S. economies spent much of 2015 converg-

Reintroduced into circulation

100-rupee notes 17.5%

2015

BY MIKE BIRD

$183 billion

The currency that India has voided represents a significant share of cash in circulation†

DHIRAJ SINGH/BLOOMBERG NEWS

When India abruptly banned its largest-denomination bank notes last month, New York City resident Raj Karnawat’s nearly $3,000 stash of rupees became essentially worthless overnight. “It’s not a small amount of money for a middle-class family to lose through no fault of our own,” said Mr. Karnawat, a citizen of India and the U.S. whose family owns a wholesale precious-stone business in Manhattan. “There was no way to be prepared for this.” About 16 million Indians live outside the country, the largest nonresident population in the world, according to a 2015 United Nations report. In the U.S. alone, there are more than three million people of Asian-Indian origin, the U.S. Census Bureau estimates. Many say they were floored when Indian Prime Minister Narendra Modi announced in early November he was voiding the 500- and 1,000-rupee bills to thwart corruption, counterfeiting and tax evasion. The Indian government has set a deadline of Dec. 30 to deposit the old bills, but this option is largely unavailable outside the country. Indians living abroad are only allowed to deposit the banned bills into a special bank account, called a nonresident ordinary

Collected from circulation

-0.96 ... ... -0.29 -0.28 -0.25 -0.41 -0.02 -0.14 ... ...

7.1 4.7 3.7 9.2 9.4 6.3 3.9 5.5 9.1 3.7 5.2

Net YTD NAV Chg %Ret Fund

Net YTD NAV Chg %Ret Fund

John Hancock Class 1

LrgCpStr 12.84 15.10 -0.03 7.1 Oppenheimer Y 15.89 -0.05 7.1 DevMktY 31.32 John Hancock Instl IntGrowY 34.31 DispValMCI 21.67 -0.0816.3 Parnassus Fds JPMorgan Funds ParnEqFd 39.73 MdCpVal L 36.68 -0.2015.5 PIMCO Fds Instl JPMorgan R Class AllAsset NA CoreBond 11.46 ... 1.9 HiYld 8.79 JPMorgan Select Cls TotRt 9.96 CoreBond 11.45 ... 1.8 PIMCO Funds A USLgCpCorPls 28.44 -0.0911.1 IncomeFd NA LSBalncd LSGwth

-1.29-23.2 Lazard Instl PIMCO Funds D EmgMktEq 15.67 -0.2418.3 IncomeFd NA -0.0410.5 Loomis Sayles Fds

PIMCO Funds Instl

LSBondI

NA

32.85 -0.0911.1 Lord Abbett A FrankTemp/Frank Adv ShtDurIncmA p 4.30 IncomeAdv 2.29 ...16.6 Lord Abbett F FrankTemp/Franklin A ShtDurIncm 4.30 CA TF A p 7.28 ... 0.3 Metropolitan West Fed TF A p 11.98 +0.01 0.4 TotRetBd 10.47 IncomeA p 2.30 -0.0115.8 TotRetBdI 10.47 RisDv A p 53.14 -0.2115.5 TRBdPlan 9.85

7.2 7.3 8.1 7.3 7.5 8.3 FrankTemp/Franklin C 2.33 ...15.5 8.8 Income C t 8.8 FrankTemp/Temp A GlBond A p 12.06 ... 6.8 -0.04 7.5 Growth A p 23.68 -0.06 9.6 FrankTemp/Temp Adv -0.31 2.6 -0.39 4.7 GlBondAdv p 12.02 +0.01 7.1 -0.39 4.8 Harbor Funds 57.10 -0.33 -0.3 ...10.6 CapApInst 58.14 -0.28 -0.2 -0.06 -4.4 IntlInst r Invesco Funds A -0.06 -4.3 10.63 -0.0115.6 -0.96 7.0 EqIncA

MFS Funds Class A ValueA p

36.32

MFS Funds Class I ValueI

Mutual Series GlbDiscA GlbDiscz

36.51 30.68 31.24

Oakmark Funds Cl I EqtyInc r Oakmark OakmrkInt

30.56 73.34 22.64

Old Westbury Fds

... NA IncomeFd ... 3.7 IncomeP

Price Funds

-0.03 4.8 R2030 R2035 -0.24 5.0 R2040 -0.02 -3.1 SmCapStk SmCapVal +0.0311.4 Value

Net YTD NAV Chg %Ret Fund 22.57 16.33 23.27 45.09 45.28 33.95

-0.05 7.9 -0.04 7.9 -0.07 7.9 -0.3819.0 -0.2829.4 -0.0711.9

DivdGro 24.03 GNMA 10.53 HlthCare r 194.62 INSTTRF2020 20.51 INSTTRF2025 20.49 INSTTRF2030 20.45 INSTTRF2035 20.40 INSTTRF2040 20.35 LifeCon 18.58 LifeGro 29.23 LifeMod 24.43 PrmcpCor 23.60 SelValu r 30.30 STAR 24.63 STIGrade 10.62 TgtRe2015 15.08 TgtRe2020 29.00 TgtRe2025 16.77 TgtRe2030 29.90 TgtRe2035 18.24 TgtRe2040 30.96

-0.05 8.4 ... 1.0 -0.14 -9.5 -0.04 6.9 -0.04 7.4 -0.04 8.0 -0.05 8.4 -0.05 8.9 -0.02 5.7 -0.07 8.4 -0.05 7.0 -0.0813.4 -0.0817.2 -0.06 6.5 ... 2.5 -0.02 6.0 -0.05 6.8 -0.03 7.4 -0.06 7.9 -0.04 8.3 -0.08 8.8

25.69 -0.01 5.0

... NA

73.37 26.29 31.77 60.67 53.76 59.16 29.54 12.78 15.20 75.85 29.29 43.53 9.32 9.06 14.17 20.42 15.52

-0.42 2.0 -0.02 8.6 -0.0520.4 -0.1112.8 -0.22 2.4 -0.10-10.2 -0.16 3.9 ... 0.4 -0.04 1.7 -0.60 7.0 -0.1525.3 -0.44 8.3 ... 2.0 ... 2.8 -0.02 7.2 -0.03 7.5 -0.03 7.7

Net YTD NAV Chg %Ret Fund

500Adml 208.53 BalAdml 31.39 CAITAdml 11.49 CapOpAdml r 132.44 EMAdmr 29.12 EqIncAdml 70.19 ExtndAdml 73.03 GNMAAdml 10.53 GrwthAdml 57.81 HlthCareAdml r 82.13 HYCorAdml r 5.82 InfProAd 26.18 IntlGrAdml 67.57 ITBondAdml 11.16 ITIGradeAdml 9.68 LTGradeAdml 10.11 MidCpAdml 164.18 MuHYAdml 10.97 MuIntAdml 13.85 MuLTAdml 11.37 MuLtdAdml 10.83 MuShtAdml 15.71

16.73 -0.0513.7

GblValue

Tweedy Browne Fds

NA

The reflation trade—selling Treasurys to buy stocks—has been in vogue since Donald Trump’s victory in the Nov. 8 presidential election. Some investors worry that the trade may be getting crowded and subject to a sudden reversal. Hedge funds and money managers accumulated a net $68.8 billion in Treasury futures contracts betting on higher bond yields for the week that ended Dec. 13, according to data from TD Securities. The amount reached $71.87 billion a week earlier, the most on a weekly basis since 2008, when TD started to track the data.

VANGUARD ADMIRAL

TIAA/CREF Funds

... NA EqIdxInst

... NA

Yield on 10-year Treasury, up from July’s record low of 1.366%

-0.2111.8 -0.14 6.1 -0.4718.8 ... 1.1 ... 2.6 ... 1.9 -0.01 4.3 -0.07 3.9 -0.1513.6 -0.02 2.0 -0.0318.0 -0.1514.5 +0.04 8.0 -0.0411.5 -0.1013.8

Prudential Cl Z & I

... NA

2.550%

PrmcpAdml r 115.46 REITAdml r 114.29 SmCapAdml 62.04 STBondAdml 10.40 STIGradeAdml 10.62 TotBdAdml 10.59 TotIntBdIdxAdm 21.60 TotIntlAdmIdx r 24.44 TotStAdml 56.56 TxMIn r 11.69 ValAdml 36.58 WdsrllAdml 67.27 WellsIAdml 62.84 WelltnAdml 69.45 WndsrAdml 72.88

13.98 ... 4.0 ... NA TRBdZ ...12.3 Schwab Funds S&P Sel 34.75 -0.0612.9 ... 1.8

NA

PIMCO Funds P ... 3.8 BlChip CapApp ... 1.6 EqInc ... 1.8 EqIndex ... 1.9 Growth HelSci -0.0514.7 InstlCapG Intl G&I -0.0515.0 IntlStk MCapGro -1.4513.0 MCapVal -1.5313.3 N Horiz N Inc -0.1111.5 OverS SF r -0.1619.8 R2015 -0.05 7.6 R2020 R2025

bracing for a reversal in the 2016 bond rout that has sent yields to the highest levels in two years. More than 100,000 call contracts with a $126 strike price on the iShares 20+ Year Treasury Bond ETF changed hands on Wednesday, according to Trade Alert’s Fred Ruffy. That’s about double the average daily volume in call contracts overall. A call gives a trader the right, but not the obligation, to buy a security. A strike price is the point at which a contract can be bought or sold. Another transaction, on Thursday, showed 38,000 call contracts trading with a $127 strike price. The trades underscore investor bets on a rebound in an ETF that has faced about $330 million in outflows over the past month and $3.8 billion since March, FactSet data show. The fund has dropped 10% since early November to $117.81 on Thursday. The options contracts expire on Feb. 17, 2017. The Federal Reserve’s first meeting of the year concludes on Feb. 1. It appears that “the call buyer is trying to get ahead of a potential bounce in Treasury

prices,” said Steve Sosnick, equity risk manager at Timber Hill, a division of Interactive Brokers Group Inc. The yield on the 10-year Treasury note rose to 2.550% Thursday, up from its record low of 1.366% in early July. Yields rise as bond prices fall. Long-term Treasurys, like those held in the $5.5 billion iShares ETF, have been hit particularly hard in recent weeks by more optimistic expectations on growth and inflation.

-0.3613.0 -0.06 9.1 +0.01 -0.5 -0.6411.6 -0.22 9.3 ...15.8 -0.5316.6 ... 1.1 -0.19 7.1 -0.06 -9.4 ...10.9 +0.08 3.9 -0.32 0.8 -0.01 1.6 ... 3.3 ... 6.7 -0.9212.1 +0.01 0.5 +0.01 -0.2 +0.01 0.2 ... -0.2 ... 0.4

VANGUARD FDS

TgtRe2045 TgtRe2050 TgtRetInc TotIntBdIxInv WellsI Welltn WndsrII

Net YTD NAV Chg %Ret 19.38 31.05 12.91 10.80 25.94 40.21 37.90

-0.05 9.0 -0.08 9.0 -0.01 4.9 -0.01 4.3 +0.02 8.0 -0.0211.4 -0.0814.4

VANGUARD INDEX FDS

500 208.54 -0.3612.9 ExtndIstPl 180.22 -1.3016.7 SmValAdml 52.29 -0.3425.5 TotBd2 10.56 ... 1.9 TotIntl 14.61 -0.04 3.8 TotSt 56.54 -0.1613.5

VANGUARD INSTL FDS BalInst 31.40 DevMktsIndInst 11.70 ExtndInst 73.03 GrwthInst 57.82 InPrSeIn 10.66 InstIdx 207.62 InstPlus 207.64 InstTStPlus 51.49 MidCpInst 36.27 MidCpIstPl 178.86 SmCapInst 62.04 STIGradeInst 10.62 TotBdInst 10.59 TotBdInst2 10.56 TotBdInstPl 10.59 TotIntBdIdxInst 32.42 TotIntlInstIdx r 97.71 TotItlInstPlId r 97.73 TotStInst 56.57 ValueInst 36.58

Western Asset CorePlusBdI

NA

-0.05 9.1 -0.03 2.0 -0.5316.6 -0.19 7.1 +0.03 3.8 -0.3613.0 -0.3613.0 -0.1413.7 -0.2012.1 -1.0112.1 -0.4718.8 ... 2.6 ... 2.0 ... 2.0 ... 1.9 -0.01 4.4 -0.30 3.9 -0.30 3.9 -0.1513.6 -0.0318.0 ... NA


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Friday, December 23, 2016 | B11

THE WALL STREET JOURNAL.

HEARD ON THE STREET

Email: heard@wsj.com

FINANCIAL ANALYSIS & COMMENTARY

Holidays Tax Retailers’ Willpower

Even the full-price stalwarts cave in to discounts the week before Christmas, and those that have been cutting prices slash even more. At high-end boutique Polo Ralph Lauren, everything was 30% off on Dec. 20 when Heard on the Street collected the latest round of data for its holiday retail pricing experiment. We are monitoring five items at each of the four stores—Macy’s, J.C. Penney, Ralph Lauren and Gap—to try to get a sense of whether retailers’ low inventory heading into the fourth quarter is actually helping them avoid discounting. The most significant shift was at Ralph Lauren, where an inexpensive scarf had been the only discounted item in our basket.

This week, the whole store was on sale, showing the lengths to which retailers will go to sell off their merchandise before even steeper post-Christmas promotions eat away at margins. The retailer’s discounting strategy may have been working at the store we visited on Manhattan’s Fifth Avenue. The red down parka and the black faux fur hat we have been following were already sold out there. Both are still available online—the parka at 26% off and the hat at full price. The scarf, which had already been marked down to $54.99 from the original $78, was $34.49. Perhaps most significant, the leather pants, which had been selling for full price at $998 since our experiment began, were marked down

with a sticker to $689.99. Take another 30% off that, and a savvy Christmas shopper could have bought them for $482.99 that day. A sticker typically means a markdown is set in stone. Even after the 30%-off sale ends, those pants won't go back to full price. Stickers also were coming out at some of the other retailers where we hadn’t seen them before. A pair of memory foam slippers at J.C. Penney, which had previously been marked down with a sign to $15.99 from the original $28, was stickered at $8.39 this week. At Macy’s, the few remaining examples of the Michael Kors handbag we were following bore stickers marking them down to $298 from the original $398. They had been selling at full price the previ-

ous week. That was noteworthy because the bag had swung from 50% off to full price the previous week, a change that Macy’s had attributed to the ability to sell at higher prices when supply is tight. This week’s discount suggests the department-store retailer didn’t have that much pricing power. The Fossil smartwatch also was discounted by 25% this week after regaining full price last week, but the discount was done via a sign as opposed to a sticker. Of course, a sticker isn’t the only sign that price cutting is getting serious. There were no stickers at Gap, but all men’s and women’s clothes not already on sale were selling for 50% off. Last week, the discount was 40%.—Miriam Gottfried

WSJ.com/Heard

Price Check None

1%–29%

In-store changes from original prices 30%–39%

40%–49%

All That Glitters is Goldman Change since the U.S. election 40% 30 20

Goldman Sachs Dow Jones Industrial Average

10 0 Nov. 8

Dec.

Source: WSJ Market Data Group

Investors have certainly taken notice, as the Dow Jones Industrial Average’s move toward 20000 shows. Maybe the most telling aspect of the rally is the 32% gain in the shares of Goldman Sachs, which accounts for 408 of the Dow’s 1,608point gain since Election Day. A little of that might be a response to how many Goldman alums will be wandering around the West

Wing—not just Mr. Mnuchin, but also Goldman No. 2 Gary Cohn (who got the nod to head the National Economic Council), former Goldman banker Steve Bannon (who will be Mr. Trump’s chief strategist and senior counselor). And Carl Icahn, who will help overhaul regulation. More broadly, it reflects a belief that the new team in the White House will treat financial firms with an easier touch than President Barack Obama. Mr. Trump’s vow to dismantle DoddFrank seems likely to go unfulfilled, but in surrounding himself with so many Wall Streeters the message seems to be that the 2010 financial-overhaul law will be lightly enforced. Mr. Tillerson’s nomination, and the picks of former Texas Governor Rick Perry for energy secretary and Oklahoma Attorney General

Scott Pruitt to head the Environmental Protection Agency signal a far friendlier regulatory environment for the energy sector. Strategas Research Partners estimates that there are $48 billion in U.S. private fossil-fuel energy projects that have languished as a result of climate-change concerns. Presumably, much of that money will be unleashed by the Trump White House. Mr. Puzder as labor secretary suggests the incoming administration will oppose efforts to raise the federal minimum wage, will reverse the Obama administration’s expansion of workers’ overtime eligibility, and will push back against workplace regulations. That would be particularly beneficial for companies in lowwage industries, such as restaurants. But while Mr. Trump’s

Sold out

Wavy cable-knit sweater Pendleton fringe scarf 2-in-1 hooded parka Camo slim-fit utility pants† Crazy stripe utility tote

-30 % -40 -30

-40% -70 -40 -40

-58 % -70 -40 -40

-50 -50

Lee curvy-fit pants J.C. PENNEY* Isotoner gloves with SmarTouch

-30

Liz Claiborne puffer vest St. John's Bay cable-knit sweater Dearfoams memory foam slippers

-50 -44 -43

-30 -50 -50 -44 -43

-30 -50 -50 -50 -43

-30 -50 -50 -50 -70

Michael Kors ‘Selma’ satchel Calvin Klein striped lace-up sweater Tommy Hilfiger ‘Graham’ corduroy pants Burberry emerald check cashmere scarf Fossil Q Wander stainless steel smartwatch

-25

GAP

MACY'S

-13

-50 -30 -30

-25 -30

-25

-28 -25

Black leather straight pant Rib-knit ragg scarf Waffle-knit cashmere sweater

-30

-30

-52 -51 -30

*Additional 25% off all items with coupon on Dec. 6 †Buy one, get one at 50% off on Nov. 29 Source: the retailers THE WALL STREET JOURNAL.

business-friendly cabinet ought to help out the bottom lines at many companies, it will only help so much. The strength of the economy and the level of short- and longterm interest rates are what matter most for financial companies. Oil prices, which are set by global markets, are the major issue for energy companies. And labor costs are dictated by the supply of available workers. And then Mr. Trump’s campaign rhetoric could hurt as well, either because limiting immigration drives up wages or because abandoning his populist agenda hurts his political clout. The danger for investors is that in their enthusiasm for the regulatory environment Mr. Trump’s administration is heralding, they aren’t paying enough attention to the things that really matter. —Justin Lahart

OVERHEARD Not even Oprah Winfrey is exempt from diminishing returns. Shares of Weight Watchers International surged 15% Thursday morning after the company announced a new ad campaign in which Oprah will reveal she lost over 40 pounds since she began the weight loss program last year. However, the extra pounds Ms. Winfrey has shed haven’t given the shares much of an extra boost. Despite this morning’s rally, the stock isn’t far from January’s price, when she announced she had lost 26 pounds on the program and is worth less than half of last year’s high, which came shortly after Ms. Winfrey announced she had taken a 10% stake in Weight Watchers. Stockholders will need more than Ms. Winfrey’s continued weight loss success if they, too, want to live fully.

CLASSIC FUSION AEROFUSION LIMITED NEW YORK EDITION

www.ebook3000.com

-58%

RALPH Red down parka with faux fur hood LAUREN Black faux fur hat

What Trump’s Cabinet Picks Mean for Markets If it wasn’t clear already, the people that Presidentelect Donald Trump is slotting for his administration have emphasized that he aims to be extremely shareholder friendly. The question facing investors is what sort of value to place on that friendship. Never before has a U.S. president stocked his cabinet with as many businessmen as Mr. Trump is aiming to. While putting up a Goldman Sachs Group alum like Steven Mnuchin for Treasury secretary counts as almost status quo, tapping Exxon Mobil Chief Executive Rex Tillerson for secretary of state and fast-food chain executive Andy Puzder as labor secretary shows how highly Mr. Trump values business experience—and how focused he is on reshaping the regulatory environment in businesses’ favor.

50%–70%

Nov. 29 Dec. 6 Dec. 13 Dec. 20


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B12 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

* ***

MARKETS

Options Traders Mind Energy-Price Gap Proposed U.S. ‘border adjustment’ levy may boost domestic crude, leading to oil parity

Crude Trade Wall Street is betting U.S. crude prices will rise relative to global ones, reflecting in part a Republican proposal to tax imported goods and exempt exports from some taxes. Such policies if enacted could favor exports over imports and make winners of some options bets on the spread.

BY ALISON SIDER AND GUNJAN BANERJI

$25 a barrel

The price gap between U.S. and global crude benchmarks

20

A proposal aimed at encouraging production of U.S.made goods could push domestic oil prices higher and leave consumers paying more at the pump, some energy economists say. “Border adjustment,” as the provision is known, would for the first time levy corporate taxes on imports to the U.S. while exempting exports from U.S. tax. It employs a concept commonly used in other countries’ value-added taxes. Some traders on Wall Street are looking for ways to profit from the potential change in the tax regime, which some analysts say could cause U.S. oil prices to come more into line with international prices. Volume in a thinly traded options contract used to bet on the difference between U.S. and global oil prices flared to a record last week, with traders wagering that U.S. oil prices will reach parity with global crude in two years. The crude glut that resulted from the boom in U.S. shale-oil output pushed U.S. oil prices below international prices. But the gap has narrowed in recent years as the oversupply has eased and after crude-oil exports were allowed. Oil analysts and traders speculated the tax proposal could be behind the jump in options volume, although it is unclear who was behind the trade. “Most of the market chatter [last] week has been about that provision,” said Andy Lebow, senior partner at the consulting firm Commodity Research Group. The provision is a key feature of House Republicans’ tax plan that would be expected to generate part of the revenue that would pay for lowering the corporate tax rate to 20% from 35%. It would have farreaching effects beyond the

15 10

Thursday $2.10

5 0 –5 2012

’13

’14

U.S. crude-oil exports

’15

U.S. crude-oil imports

800,000 barrels a day

Sept. 692,000

Sept. 8.1 million

8 million barrels a day

’16

Trading volume in options tracking the spread between U.S. and global crude prices 40,000 contracts

600,000

6

30,000

400,000

4

20,000

200,000

2

10,000

0

0 2013

’14

’15

’16

Wednesday 500

0 2013

’14

’15

’16

O

Sources: WSJ Market Data Group (price gap); U.S. Energy Information Administration (exports, imports); CME (trading volume)

oil-and-gas industry, but energy analysts have becoming increasingly vocal on the subject in recent weeks, and some companies like Koch Industries Inc. have criticized it. Among those set to benefit from such a policy are U.S. oil producers that would be able to avoid taxation by selling into foreign markets. U.S. companies currently pay corporate income tax on profits from all sales, but only domestic sales would be subject to tax under the GOP plan. Refiners that make fuels like gasoline and diesel could end up paying higher prices for domestic crude, some analysts said. The tax change could encourage refiners to try to buy more domestic oil, while producers would have more incentive to export, analysts at PIRA Energy Group wrote in a research report. The combination of those two

factors could push U.S. prices higher, the analysts wrote. Even though output from U.S. oil fields has surged in recent years, about half of the crude processed into fuel here comes from abroad. “The proposed border-adjustment tax would create a windfall for domestic oil producers,” said Philip Verleger, who co-wrote a study on the tax with the Brattle Group, a consulting firm. The study, which was funded by Koch, concludes that retail gasoline taxes could rise by as much as 36 cents a gallon if the tax is imposed. Fighting the tax change is becoming a priority for refiners, who say it could make it harder for them to compete with fuel makers globally and could raise prices for consumers. “The refining industry in particular has initial concerns

with the border adjustment provision given the amount of crude oil the U.S. imports and the potential impacts the provision could have on consumers,” said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers. A trade group representing oil producers said it is reviewing the border adjustment concept. “Our industry remains focused on a pro-growth tax code to encourage economic development and keep energy costs affordable for American consumers and businesses,” the American Petroleum Institute said. Economists and supporters of border adjustment say refiners’ fears are overstated. They say the dollar will rise to offset any tax effects—due to the combination of weaker import demand and stronger ex-

N

D

THE WALL STREET JOURNAL.

ports—and preserve the existing trade balance. It is unclear how complete or uniform that shift would be. House Ways and Means Committee Chairman Kevin Brady (R., Texas) said in a statement last week that lawmakers are talking to refiners and other importers about their concerns. Mr. Brady, who is spearheading the tax plan, represents a district outside of Houston that is home to energy companies and a major Exxon Mobil Corp. campus. Congressional Republicans haven’t released a bill. Once they do, it will take months to go through the legislative process. It is also not yet clear when the border adjustment provision could take effect. President-elect Donald Trump hasn’t commented on the plan. —Richard Rubin contributed to this article

A Flurry of Activity Hits a Quiet Corner Traders often turn to plain-vanilla options on oil futures to wager on crude prices, which recently have been whipsawed by efforts to curtail global output. But a less-popular approach is attracting attention. These options allow traders to bet on the price gap itself. On Thursday, that gap was $2.10. The benchmark U.S. oil contract closed at $52.95 a barrel, while Brent crude, the global benchmark, finished at $55.05. On Dec. 13, trading surged to a record on options that bet on the spread between West Texas Intermediate crude and Brent, according to a spokesman for CME Group Inc., the world’s biggest operator of derivatives exchanges. Contracts that bet on parity, or no difference in price between the benchmarks, were the most popular bullish contracts across all spread options, said the CME spokesman. Contracts with June 2018 and December 2018 expirations saw the greatest surge in number of options contracts outstanding last week. “It is unusual to see trades beyond a year in maturity, much less with this kind of volume,” said Michael Hiley, a trader at LPS Futures LLC. After three days of no trading on the options spread, contracts exchanged hands in a flurry on Dec. 12 before more than doubling to a record 39,700 contracts on Dec. 13, CME data show. The average daily volume for the product so far in 2016 is about 1,000 contracts. “These are not very liquid instruments at all,” said John Farley, a portfolio manager at commodity-trading adviser Emil Van Essen LLC, which participated in the trades last week by selling options contracts. The firm makes markets in energy options and specializes in spread options. —Gunjan Banerji and Alison Sider

EQUITIES

Dow Loses Step in 20000 Pursuit U.S. stocks pulled back Thursday, as a postelection rally eased heading into the holidays. Market activity has dwindled in recent sessions, with trading volumes trailing off and stocks, currencies and government bonds moving in narrow ranges. The Dow Jones Industrial Average surged 8.6% from Election Day through Dec. 13, the day before the Federal Reserve raised interest rates, but the index is little changed since then. Many investors and traders say the markets are likely to drift along through the end of the year. “Few traders want to open new positions” shortly before the Christmas break, said Lee Wild, stockbroker at Interactive Investor. Despite the recent lull, the Dow Jones Industrial Average is on course for its best December since 2010, when it rose 5.2%. The Dow industrials are up 4.2% so far this month, compared with December 2015, when they dropped 1.7%, and December 2014, when they fell less than 0.1%. Many investors are optimistic that U.S. stocks will continue their rally in 2017—although they caution that stocks’ trajectory hinges on continued improvement in corporate earnings and the successful implementation of tax cuts under the new administration. “If that doesn’t come through, we could be in for some trouble,” said Tom Cassidy, chief investment officer at Univest Wealth Management Division, who added that it is unlikely there will be much clarity on the policy front until the second half of 2017. On Thursday, the Dow Jones Industrial Average fell

CHRISTOPHER DILTS/BLOOMBERG NEWS

BY AKANE OTANI AND RIVA GOLD

Losses for Nordstrom and other retailers’ shares contributed to the broader market’s decline. 23.08 points, or 0.1%, to 19918.88. The S&P 500 slipped 4.2 points, or 0.2%, to 2260.96, and the Nasdaq Composite fell 24.01 points, or 0.4%, to 5447.42. Consumer-discretionary

shares led declines in an otherwise muted session, falling 1% in the S&P 500. Bed Bath & Beyond, which posted a decline in quarterly profit earlier this week, shed $4.18, or 9.2%, to $41.38. Nordstrom fell $2.97,

or 5.8%, to $48.24 and Gap declined $1.27, or 5.3%, to $22.48. The yield on the 10-year U.S. Treasury note rose to 2.550% Thursday after previously settling at 2.544%. Yields rise as prices fall.

Treasury to Auction $213 Billion in Securities as Year Comes to Close WASHINGTON—The Treasury Department plans to auction $213 billion in securities next week. Details of the offerings (all with minimum denominations of $100):  Tuesday: $28 billion in sixmonth bills, dated Dec. 29 and maturing June 29, 2017. Noncompetitive tenders must be received by 11 a.m. EST Tuesday and competitive tenders by 11:30 a.m. Cusip: 912796LF4. Also, $50 billion in reopened four-week bills, dated Dec. 29 and maturing Jan. 26, 2017. The debt is a reopening of an issue first sold on July 28, 2016. Noncompetitive tenders must be received by noon Tuesday and competitive tenders by 1 p.m. Cusip: 912796KE8. Also, $34 billion in reopened three-month bills, dated Dec. 29 and maturing March 30, 2017.

The debt is a reopening of an issue first sold on March 31, 2016. Noncompetitive tenders must be received by 11 a.m. Tuesday and competitive tenders by 11:30 a.m. Cusip: 912796JJ9. Also Tuesday, $26 billion in two-year notes, dated Jan. 3, 2017, and maturing Dec. 31, 2018. Noncompetitive tenders must be received by noon Tuesday and competitive tenders by 1 p.m. Cusip: 912828U99.  Wednesday: $13 billion in reopened one-year, 10-month floating-rate notes, dated Dec. 30 and maturing Oct. 31, 2018. The debt is a reopening of an issue first sold on Oct. 31, 2016. Noncompetitive tenders must be received by 11 a.m. Wednesday and competitive tenders by 11:30 a.m. Cusip: 912828T75. Also Wednesday, $34 billion in five-year notes, dated Jan. 3,

2017, and maturing Dec. 31, 2021. Noncompetitive tenders must be received by noon Wednesday and competitive tenders by 1 p.m. Cusip: 912828U81.  Thursday: $28 billion in seven-year notes, dated Jan. 3, 2017, and maturing Dec. 31, 2023. Noncompetitive tenders must be received by noon Thursday and competitive tenders by 1 p.m. Cusip: is 912828V23. AUCTION RESULTS

Here are the results of Thursday's Treasury auction. All bids are awarded at a single price at the marketclearing yield. Rates are determined by the difference between that price and the face value. FOUR-YEAR, FOUR-MONTH TIPS $37,585,519,600 Applications $14,000,047,700 Accepted bids $37,479,600 " noncompetitively 102.005809 Auction price (rate) (0.120%) 0.125% Interest rate 29.80% Bids at clearing yield accepted 912828Q60 Cusip number The Treasury inflation-protected securities, dated Dec. 30, 2016, mature on April 15, 2021.

AHEAD OF THE TAPE | Steven Russolillo

The Christmas-Tree Indicator Signals Joy ‘Tis the season to be confident. Investor, consumer and executive surveys have shown robust sentiment in the wake of Donald Trump’s election victory. All have coincided with the stock market’s biggest postelection rally on record. And, in the midst of the holiday season, Christmas-tree sales are the latest indicator to show the confidence in the economy. Sales of Christmas trees have jumped 10% from a year ago, the largest increase on record, according to Oscar Sloterbeck, head of company surveys at Evercore ISI, which has tracked this data since 2003. Mr. Sloterbeck polls regional Christmas tree associations, farmers and retailers around the U.S. to get a sense of how the holiday shopping season is doing. With people willing and able to spend nicely on Christmas trees, as well as wreaths and garlands, the assumption is they might also spend plentifully on gifts. A healthy jobs market, rising wages and low gas prices offer ripe conditions for a strong holiday season. That is all good news for retailers, with enthusiasm expected to showcase itself in Friday’s release of the University of Michigan’s consumer-sentiment reading. Economists polled by The Wall Street Journal estimate the final reading of the December sentiment index climbed to 98.7, which would be the highest since January 2004 and up from the pre-

Grow to the Sky Christmas tree sales, change from a year earlier 10% 8 6 4 2 0 ’04

’08

’12

’16*

*Through Dec. 20 Source: Evercore ISI

liminary 98.0 reading. It also marks a dramatic shift from October, when sentiment matched a two-year low. Consumers aren’t the only ones that are confident these days. The latest survey from the American Association of Individual Investors, released Thursday, showed a seventh consecutive week of above-average bullish sentiment. A measure of homebuilder confidence unveiled earlier this month jumped to an 11-year high. Of course, the divisive reaction to the election outcome is still a big issue. A survey by Gallup last week found Mr. Trump’s approval rating was the lowest of any incoming president over the past 25 years. Perhaps that explains one other stat from Mr. Sloterbeck’s survey: Christmas-tree sales growth in states that went for Mr. Trump was 3 percentage points stronger than in states won by Hillary Clinton. All of these sentiment surveys suggest the year will end on a merry note. And that is the reason to worry once the calendar flips.


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Fannie Flagg on finding her comedic voice in Birmingham, Ala. M6

HOMES

|

MARKETS

|

PEOPLE

|

MANSION

UPKEEP

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Friday, December 23, 2016 | M1

A Home for High-Tech Homework

FROM TOP: JESSE NEIDER FOR THE WALL STREET JOURNAL; MEI-CHUN JAU FOR THE WALL STREET JOURNAL

As school assignments go digital, more parents are building dedicated, gadgetfriendly spaces where they can monitor children’s activities; a USB plug for everyone.

CHARGE IT The study area in the New Canaan, Conn., home of Jennifer and Robert Sechan. Electronic outlets run along the wall and underneath the built-in walnut desk, with under-cabinet lighting for visibility. Holes in the desk help to hide the wires. Melissa Powell, below, in the study room of her Dallas home with two of her children—Carter, 7, in the red shirt, and Caden, 9, in the green shirt. for parents to keep an eye on things, but far enough to minimize distraction. It also needs lots of plugs and wiring for electronics without looking like a space lab. The percentage of middle- and high-school students using technology for homework more than doubled between 2011 and 2015, according to research by Project Tomorrow, an education nonprofit organization based in Irvine, Calif. Of students between grades 6 and 12, 87% use the internet at home for school assignments. Given the myriad opportunities the internet offers for distraction—or worse—more parents Please turn to page M4

BY CECILIE ROHWEDDER IN OUR DIGITAL AGE, finding a place for children to do their homework can be a tough assignment. Forget the kitchen table. Kitchens, which now often function as gathering, entertaining and play spaces, are getting busier, making it hard to do focused schoolwork. The dining table, the other usual standby, often can’t serve the demands of numerous electronic devices. The result is increasing demand for a dedicated homework area. It must be close enough

A NEW LEASE ON LUXE LONDON

INSIDE

High-end rentals are on the rise as potential buyers and sellers alike take a wait-and-see approach to the market. BY CHARLIE WELLS AND ART PATNAUDE

LOG-CABIN CHIC California ranch asks $16 million M2

GET YOUR KICKS Stairs that kick it up a notch M7 ALICE WHITBY FOR THE WALL STREET JOURNAL

EMILY PREHEIM DUPRE feels like she is throwing away $8,000 a month. That is what the 40-yearold American expat pays to rent a 2,000-square-foot, three-bedroom apartment with her husband and two daughters in the prime London neighborhood of Belsize Park. Dr. DuPre, a clinical psychologist, and her husband, a banker, wanted to buy a home, but after viewing 50 properties since early 2015, they have been unable or unwilling to sign for a single place. A $2.8 million offer the couple made on a threebedroom, 1,600-square foot home last year fell through when they were “gazumped,” a British term for being outbid late in the deal. “We’ve got the money in the bank. It’s not like we’re broke,” says Dr. DuPre, who is originally from Dallas. “It’s just that it doesn’t make sense for us right now in this predicament.” Luxury rentals in prime central London are on the Please turn to page M8

SOUTH KENSINGTON The posh neighborhoods of prime London, such as Belsize Park, Chelsea and South Kensington, above, are luring upscale renters to their quiet streets, as well as to their pubs, restaurants, cafes and shops.

www.ebook3000.com

BAY AREA BOOM Why prices are rising in Oakland, Calif. M3


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M2 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

NY

MANSION PRIVATE PROPERTIES | CANDACE TAYLOR

San Francisco Penthouse Sells for $13 Million San Francisco’s Millennium Tower, the ultraluxury building that has been beset by reports that it is sinking and tilting, has posted a big sale: The late venture capitalist Tom Perkins’s penthouse has traded hands for $13 million. The buyer was Craig Ramsey, a tech-industry veteran who worked at Oracle. Mr. Ramsey, who in 2012 paid $4.3 million for a different unit on a lower floor, said he felt the purchase price was “very reasonable” and “well below what the market was nine months ago.” Mr. Ramsey, 70, added that after speaking with engineers and lawyers, he feels confident that the building will soon be repaired. “I felt the possibility of the building not being habitable was extremely low,” he said, adding: “I’m willing to take whatever risk there is to benefit from a depressed environment.” Mr. Ramsey said he plans to move into the penthouse this week, and will use the other unit to accommodate family members. David Waitrovich, Mr. Perkins’s longtime financial adviser, said while “it’s not the

optimal situation” for selling an apartment, the Perkins family is “very pleased” with the sale. “We’re glad to see that [Mr. Ramsey] and his family are going to use it,” he said.

In August, residents filed a lawsuit stating that the South of Market building was tilting, had lost at least 16 inches in height since its completion and was expected to sink another 8

sales process it had “settled within predicted, safe ranges,” and that further settling was caused by construction and excavation of the nearby Transbay Transit Center.

According to Gregg Lynn of Sotheby’s International Realty, who had been quietly marketing Mr. Perkins’s penthouse, few units in the Millennium Tower have sold since the bad news broke. Mr. Lynn added the penthouse likely would have garnered a higher price if it wasn’t for the negative headlines, noting that he sold a condo in another building with less impressive views (albeit larger) for $28 million in 2011. Still, “I think this will mark a turning point in optimism for the building,” Mr. Lynn said. The homeowners association didn’t respond to a request for comment. Mr. Perkins, the venture capitalist, bought the 60th-floor Grand Penthouse for $9.4 million in 2009 and spent more than two years and roughly another $9 million building it out. With two bedrooms and an office, the penthouse has roughly 5,000 of interior square feet plus a terrace, and views of the Golden Gate Bridge, the Bay Bridge, the Transamerica Pyramid and other landmarks. Mr. Perkins died in June at age 84.

larger ranch to continue with his experiments in cattle breeding. To do that, he said will look to join with cattle breeders in Africa or

South America. Many affluent San Diego residents have second homes in the area, said listing agents Eric Iantorno and Brett Dickin-

son of Pacific Sotheby’s International Realty. Mr. Iantorno said he is listing a 640-acre ranch a few miles away for $12.95 million.

Philip Gutman of Douglas Elliman Development Marketing, who is overseeing sales at the building. A rendering of a unit is seen here. Lionheart’s Mr. Sternberg

said Penthouse 1 and Penthouse 12 are being offered both separately and as a combination because they are “already fairly large by themselves” and as a way to “maintain some

flexibility” for buyers. Miami has seen a slowdown in condo sales in recent months. Mr. Sternberg said he is happy with the pace of sales at the building.

to 15 inches. Several other lawsuits have been filed as well. A spokesperson for the developer, Mission Street Development, said when the building was completed and during the

A cattle ranch in Southern California with its own chapel, three-bedroom “log cabin” and two helipads is going on the market for $16 million. Located about 60 miles east of San Diego outside the village of Santa Ysabel, the 560-acre property contains a two-bedroom, roughly 4,000square-foot main house overlooking a pond. Surrounded by verandas and decorated with taxidermied African animals, the house was built to resemble the childhood home of the owner, surgeon Stuart Jamieson, who grew up on a 2.5 million-acre cattle ranch in Rhodesia (now Zimbabwe). For guests, there is a log cabin spanning about 4,000 square feet, with a deck on three sides and views of the nearby mountains. There is also a four-bedroom caretaker’s cottage, a stable with eight stalls for horses and a helicopter hangar. Roughly 15 cattle plus chickens, turkeys, goats and llamas are included in the asking price. Dr. Jamieson, who is known for heart and lung transplants,

FROM TOP: JACOB ELLIOTT; SAM CHEN (3); LLUSION (RENDERING); ENGEL & VÖLKERS

SOUTHERN CALIFORNIA CATTLE RANCH LISTS FOR $16 MILLION

is dean of cardiovascular affairs at the University of California, San Diego. A licensed helicopter pilot, Dr. Jamieson, 69, said he often trav-

MODERN ASPEN Just minutes from the best skiing in Colorado’s Rocky Mountains.

This sleek, contemporary home was designed as an homage to the Case Study Homes of the 1950s, with countless gorgeous details in keeping with the luxury standards of today. The exterior is composed of custom zinc panels, sandblasted concrete, aluminum windows, floor glazing system, and tempered glass railings. Ideal family space including five bedrooms with ensuite baths, exercise room, media room, and spacious wine cellar. Private garden and rooftop patio. $8,950,000

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els by helicopter to the ranch from the San Diego area, where he lives and works. Dr. Jamieson said he is selling because he needs a much

A $40 MILLION MIAMI BEACH PENTHOUSE In Miami Beach, a penthouse that will boast four swimming pools and two outdoor kitchens is coming to market with a $40 million price tag, according to developer Lionheart Capital. The eight-bedroom, roughly 12,300-square-foot spread will be on the eighth floor of the under-construction Ritz-Carlton Residences, Miami Beach. With views of the Miami skyline, Biscayne Bay and the ocean, the unit will also have a library and a wine tasting room. Outside there will be nearly 13,000 square feet of outdoor space, including two larger swimming pools, two smaller plunge pools, two hot tubs and the two summer kitchens. Purchasers who prefer to design their own layout can buy the unit as raw space for $37 million, said Lionheart CEO Ophir Sternberg. Another option is to split the space into two penthouses: Penthouse 1 is asking $17 million and Penthouse 12 is priced at $20 million. Another three penthouses are also coming to market asking $11 million and up, said  See more photos of notable homes at WSJ.com/Mansion. Email: privateproperties@wsj.com

On WSJ.com: House of the Year VOTING ENDS JAN. 3 This home is built on a steep hillside in Mallorca, Spain. With six bedrooms and six bathrooms, the 13,993square-foot villa was designed to be both modern and warm, and to maximize its views across the Bay of Palma. It has a 65-foot-long outdoor infinity pool, as well as an indoor pool and gym. This villa is one of the homes in the running to be the House of the Year, as chosen by readers. Pick your favorite at WSJ.com/realestate.


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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | M3

MANSION THE MARKET

The Soaring Cost of Living in Oakland The low-key neighbor of San Francisco is undergoing a rapid transformation as housing prices rise

HOT HOUSE Kathy Kuhner and her daughter Francesca Boyd listed this property, above, for $925,000 and sold it for $1.2 million. Ms. Kuhner and Ms. Boyd, below right; Oakland buyers Jason Lee and Doan Nguyen with son, Roland, below left; their home, center.

was worth it. “It’s a very diverse and energetic area,” says Mr. Lee. Nancy and Mark Atlas reaped the benefits as sellers. With three children (including 11-year-old twins) the couple decided to purchase a larger home in nearby Lafayette. They listed their 2,500-square-foot three-bedroom, cottage-style home in a walkable part of Oakland’s Montclair neighborhood for $995,000 in September, expecting to sell it for about $1.2 million. “We

One Montclair house got 14 offers and sold for 66% over its asking price. went by the open house and it was just packed with people,” says Ms. Atlas, a personal life consultant. “It was pretty astounding.” According to her listing agent, Jack Cooper of the Grubb Co., they got 14 offers and sold the house for $1.65 million. With a population of 419,000, this 78-square-mile city is known for its mild microclimate, ethnic diversity and dozens of distinct neighborhoods. In the past few years, Oakland has seen a cultural resurgence as well as a booming restaurant scene, partly as artists and chefs priced out of San Francisco decamp to the East Bay. Former industrial spaces and car dealerships now house coffee shops, coworking spaces and bars. There are also vast industrial swaths, along the waterfront and elsewhere, and there are many areas pockmarked with abandoned or

blighted homes, vacant lots and homeless encampments with clusters of tents under freeway underpasses. Crime can be an issue, as can city dysfunction. Though overall crime rates have decreased in the past few years and violent crimes are down nearly 20% since 2013, Oakland still has a relatively high crime rate: There were 6,169 violent crimes in 2015. The police department went through four police chiefs in a 10-day period last summer as a series of escalating sex scandals unfolded. Oakland has experienced real-estate booms and busts before, and some real-estate experts express concern that the market is overheated. “It’s definitely at a boiling point,” says Javier Vivas, manager of economic research of Realtor.com. In terms of rapid price appreciation, “we don’t really expect it to continue because we’re quickly coming to a place where the locals are being priced out and when you look at income versus home prices it’s not sustainable.” He predicts price appreciation will likely taper off, though another all-out crash is unlikely. Developers seem undeterred. Signature Development Group will soon break ground on Brooklyn Basin, a 65-acre waterfront development that will include 3,100 apartments and condos, and 200,000-square-feet of shopping and offices, along with 33 acres of waterfront park space. Prices haven’t yet been determined. Breaking ground next year, Oak Knoll will be a 187-acre master-planned community with 935 homes in the Oakland Hills. Station House, a development of 171 luxury townhomes on a roughly 8acre former truck storage site

in West Oakland, launched sales in October and has since sold more than one-third of the units. Prices range between mid-$600,000 and up-

per $800,000 for townhomes with open kitchens, optional wide-plank hardwood floors and solar power. Phil Kerr, CEO of City Ven-

tures Homebuilding, Station House’s developer, says the company invested in Oakland partly because of the shifting job base. “Last time around the jobs were really based in Silicon Valley,” he says. “This time, a lot of the creative jobs are in San Francisco or Oakland.” West Oakland, the area geographically closest to San Francisco, has recently become an epicenter of the kind of change sweeping the city. Amidst the mix of charming old Victorian homes, vacant lots, and industrial and storage facilities, developers are renovating and building new homes targeted at buyers eager to be near public transit. The neighborhood’s BART station is a seven-minute ride to downtown San Francisco. Real-estate developer Kathy Kuhner has been living in West Oakland since 1999. She and her daughter, Francesca Boyd, have 10 homes under construction. On a recent drive, the two pointed out several homes they had built and recently sold, and properties on nearly every block where renovation or construction was under way. In October, they listed a property with concrete floors and 20-foot ceilings for $925,000 and sold it for $1.2 million. They had so many back-up offers, an adjacent home they built sold to another bidder for around the same price. “I thought people would come to Oakland and for many years, they didn’t,” says Ms. Kuhner. “And now it’s like we’re being discovered.”

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BARAN STUDIO ARCHITECTURE (RENDERING)

WITH SOARING PRICES, low inventory and a buzzing tech scene, Oakland—San Francisco’s low-key neighbor 6 miles to the east—has its own crazy housing market. Neighborhoods once known for modest bungalows and starter homes now regularly see million-dollarplus sales. Condominium and apartment buildings are under construction, transforming once blighted areas into trendy destinations. And the city is bracing for an influx of new jobs as tech companies like Uber and Fluid set up offices downtown. Rents and prices are skyrocketing in this East Bay city, long considered an affordable alternative to San Francisco. Median home values have grown by more than 70% since 2012, jumping to $658,844 from $387,182, according to Trulia. In Rockridge, a popular neighborhood on the Berkeley border, a 2,100square-foot, two-bedroom house with a guest cottage recently sold for a record $2.4 million, says listing agent Anthony Riggins. While San Francisco’s prices are still higher—the median home value there is $1,095,574—its market has cooled a bit in recent months. San Francisco saw home sales volume drop by more than 7% in October from a year earlier, according to real-estate tracker CoreLogic, while Oakland and surrounding areas have remained relatively strong. Oakland’s rising cost of living has attracted attention since the recent fire there that killed 36 people. The tragedy took place in a warehouse that illegally housed a community of artists and others living in unsafe conditions; some survivors said they couldn’t otherwise afford to live in the area. Even for the fairly affluent, finding a home in Oakland can be challenge. “You find a house that you love and there are 10 other people who love it, too,” says Karthiga Anandan, a real-estate agent with the Grubb Co. Realtors. Waiving all contingencies, including inspections and appraisals, is common in bidding wars. These days, the most indemand neighborhoods are the ones near public transportation hubs and tech bus shuttles—a shift from the previous boom cycle, when demand was for high-end homes in more suburbanfeeling areas, says Claudia Mills, a real-estate agent and longtime Oakland resident. Jason Lee, a securities-law attorney, spent nearly every weekend over a seven-month period house hunting. “It was really emotionally draining,” he says. After nearly a dozen offers, he and his wife, Doan Nguyen, a public-interest lawyer, finally put in a no-contingency, $901,000 bid for a home that was listed for $739,000, and won. The roughly 2,000-squarefoot home, near Lake Merritt, has three bedrooms and two bathrooms with an inlaw unit downstairs. The couple, who have since had a baby, says buying in Oakland

FROM TOP: TONY MILLS; VIVIAN JOHNSON FOR THE WALL STREET JOURNAL (3)

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SEEING RED A rendering of WestHausTen, a development by Ms. Kuhner and Ms. Boyd.

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THE WALL STREET JOURNAL.

M4 | Friday, December 23, 2016

MANSION

A HOME FOR HIGH-TECH HOMEWORK

Continued from page M1 want children using their devices in the home’s public spaces. Plus, there is the general trend of greater parental involvement in schoolwork. “Younger parents want to be more involved in their children’s educational process at home,” says Julie Evans, Project Tomorrow’s Chief Executive. Sometimes the children’s work takes precedence. Scott and Melissa Powell’s six-bedroom, 5,200square-foot house in Dallas has no home office. Instead, there is a bright, contemporary study room for their four young children in a wing behind the kitchen area. They were planning ahead: Currently only 9-year-old Caden, the oldest, does schoolwork on one of four installed desktops. Each workstation has two electrical outlets above and two below, as well as its own data line and USB plug. The room also has a Wi-Fi booster. Sometimes Mr. Powell, owner of a home design and construction business called New Leaf Custom Homes, uses the area for his own work, but he and his wife said they preferred this to a home office they wouldn't use every day. The Powells paid $1.1 million to build their Midcentury Modern house on an undeveloped lot they bought for $450,000 in the city’s White Rock Valley neighborhood. In the children’s workspace, the main expense was cabinetry, which cost around $5,000, says Mr. Powell, 37. The floor is polished concrete for resilience and easy cleaning. “A lot of the time, they are leaving a mess in there,” he says. For Connecticut mother Jennifer Sechan, getting away from the mess was one reason that she and her husband, Robert, created a homework space when they renovated and enlarged their New Canaan home for $2 million in 2012. “We used to have a desk in the kitchen but I have four kids, so the kitchen was always cluttered,” says Ms. Sechan, 47. Now the study area, located off the family room and designed by Portland, Ore.-based interior designer Garrison Hullinger, is her favorite room in the house. “This room has

ANDREA RUGG/JACQUELINE FORTIER DESIGN

BOB STEFKO FOR THE WALL STREET JOURNAL (4)

FORM AND FUNCTION Daisy Glazier, 13, and brother Clay, 12, in the children’s work area as parents, Leslie and Josh Glazier, lounge in the background, above; Daisy in the playroom, below right. The Glaziers created the area, below, as part of a yearlong, $1.5 million renovation of their Chicago home. ‘The space has run through different stages as the kids have gotten older,’ Ms. Glazier says.

KEEPING THEM CLOSE Thalia Bell with dog Auggie in the study space of her Minnesota home. Mom Daniela Bell says she likes to have her daughter close by. enough drawers and cabinets to keep the clutter out of sight. And it keeps the kids close by, so I can monitor what they are doing.” With four children in three different schools, each with its own set of directories, class lists and permission slips, Ms. Sechan set up a basket for each child’s paperwork and individual, colored boxes for documents, such as passports, birth certificate and health re-

cords. Electronic outlets run along the wall and underneath the builtin walnut desk, with under-cabinet lighting for visibility. Holes in the desk help to hide the wires. The Sechans’ children, ages 11 to 17, bring laptops to and from school but often prefer the bigger screens of their home desktops. From there, they log onto the school websites. Ms. Sechan’s only regret: no built-in charging stations

for iPhones and iPads, as plugs and cables have a way of disappearing. It cost around $40,000 to create the children’s study, not counting the addition to the six-bedroom house that now measures 11,100 square feet. As part of a renovation four years ago, the Sechans added a basement and fashioned a new family room, kitchen, mudroom and homework room. The children use the space to

read and lounge, meet with tutors and manage college applications. In the morning, Mrs. Sechan pays bills there. The study keeps most of this activity out of the kitchen—and the home office of Mr. Sechan, a wealth manager in nearby Stamford, Conn. Creating an environment conducive to studying, home builders say, increasingly comes up as a goal when families configure a new house. “Having power at


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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | M5

MANSION

JESSE NEIDER FOR THE WALL STREET JOURNAL (4)

KEEPING IT TOGETHER Storage and organization were top priorities in creating the study area in the Connecticut home of Jennifer and Robert Sechan. Daughter Meghan, 12, reading on a bench, above left; a breakfast nook occasionally used for school work, above middle; each child has a basket for their paperwork, and colored boxes for documents, above right; a computer area, below.

MEI-CHUN JAU FOR THE WALL STREET JOURNAL (3)

FAMILY FIRST Scott and Melissa Powell with Caden, in the green shirt, Carter, in the red shirt, and Avery in the study room, above; Caden at the computer, below left; Avery in the living room, below right. The family’s Dallas home has no home office—instead they built the study room for their four young children.

these homework stations is essential for all the gadgets kids have, in addition to doing homework on the computer,” says Wayne Yamano, senior vice president of strategic operations and marketing at Scottsdale, Ariz.-based home builder Meritage Homes. In high-end houses, a space reserved for homework usually doesn't replace the home office, says Mr. Hullinger, the interior de-

signer. The extra workspace is unlikely to negatively affect a property’s resale value because it can be used for household management or work from home, he adds. In Daniela Bell and Eric Foster’s 2,800-square-foot Victorian home in a historic neighborhood of St. Paul, Minn., the homework area is next to the kitchen stove. When the couple bought the three-bedroom house, with bay windows

and a turret, for $190,000 in 2012, interior architect Jacqueline Fortier suggested they widen a nook in the kitchen wall to create a space for daughter, Thalia, now in the second grade, to draw and do school projects. The alcove has a soapstone table and wooden benches with integrated storage drawers. Magnetic paint on the walls allows Thalia to display artwork and photos.

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Ms. Bell, a teacher of health and fitness classes, and Mr. Foster, a 44-year-old restaurant owner, like having their only daughter close by when they cook, so “she doesn’t feel like she’s exiled to the attic,” says Ms. Bell, 43. Last month, Thalia used the space to write a family recipe into her school art book. In October, she researched a report on nocturnal animals there. The defined nook keeps her sup-

plies from taking over the kitchen. And unless the dog wants to play, the 8-year-old isn't distracted by activity around her. Tim and Nicola Duffin chose their 3,850-square-foot house in the Austin, Texas area because the floor plan, by Meritage Homes, included two offices. The couple, who moved into the $518,000 home in August and own two hair salons, work from home a lot. While Mr. Duffin, who also works for a local technology company, uses the home office, Mrs. Duffin, 46, has claimed the satellite office near the laundry room. For 11-year-old Kayla and 6-yearold Roman, the Duffins converted one of the home’s five bedrooms into a study. It has a large desk, as well as a dry-erase board, a world map and a telescope. They also added fun touches like candy in glass jars and a chaise, where Roman likes to watch movies. Roman, a first-grader, doesn’t have much homework yet, but the Duffins encourage Kayla to use the study because it is less distracting than their busy kitchen. Because the upstairs room is harder to supervise, they check on her regularly. “Occasionally, I sneak up to check that she is doing her schoolwork,” says Mr. Duffin, 45. As children grow, homework spaces can evolve. Chicago residents Leslie and Josh Glazier created a children’s work area after they bought their six-bedroom home in Lincoln Park for $1.9 million in 2007. As part of a yearlong, $1.5 million renovation that followed, they built a light-filled basement area equipped with a long, white desk and bookshelves built into white walls. The Glaziers installed desktop computers and a cork board for art projects. Their older sons, Alex and Matt, now 23 and 21, did homework on the desktops, while their younger siblings, Daisy and Clay, used the space for art and sewing. Now 13 and 12, Daisy and Clay have laptops and often study in their rooms. For them, the basement is a social space. Ms. Glazier, a 51year-old real-estate agent, uses the area to create photo albums, spreading pictures across the desk. “The space has run through different stages as the kids have gotten older,” she says. “It’s used for different things now.”


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THE WALL STREET JOURNAL.

M6 | Friday, December 23, 2016

MANSION HOUSE CALL | FANNIE FLAGG

Where a Southern Comic Found Her Voice The ‘Fried Green Tomatoes’ author, born into a family of film projectionists, wrote plays as a kid; memories of sleeping in the living room listening to couples on their walks home

I grew up in the balcony of movie theaters in Birmingham, Ala. My father was a projectionist, as was my grandfather. I loved film and quickly became theatrical. The movies exposed me to the outside world. becoming an actor and writer. He wrote little plays and was artistic. My mother, Marion, was very pretty and ladylike. She didn’t have the theatrical drive that my father and I shared. She was quiet and wanted to stay home. I was more like my father. I had dyslexia when I was young and couldn’t spell. In school, I was embarrassed about it. To compensate, I acted silly. I guess it was a way to let people know what was going on inside me. I left Birmingham by entering the Miss Alabama Pageant. Down South, you went into pageants at 16 and kept going. I did these crazy comedy sketches and won cash prizes. After high school, I won a scholarship to the Pittsburgh Playhouse. But because of my Southern accent, the teachers felt I would never get work, so I eventually headed home. My timing was good. The summer I returned to Birmingham, the woman who appeared on TV’s “Morning Show” was leaving. My mother pushed me to audition. I got the job, and after a few weeks, a woman came up to me in a department store and asked for my autograph. Wow, I thought, TV is better than the theater. Eventually I quit my job and went to New York and sold comic material to a theatrical revue at Upstairs at the Downstairs on

ANDREW SOUTHAM (PORTRAIT); FANNIE FLAGG (2, HISTORICALS)

In the fifth grade I wrote a play called “The Whoopee Girls,” a comedy about two friends living above New York’s Copacabana nightclub. But when my teacher read it, she called my mother: “We’re kind of concerned about your daughter. The play she wrote has the word ‘martini’ 21 times.” Birmingham was more sophisticated than most people realized. There were lots of stage and movie theaters, and the city had a symphony and a ballet company. My family lived in a one-bedroom apartment on the second floor of a three-story redbrick apartment building along a main thoroughfare. My parents had the bedroom so I slept on the living-room couch next to the window. At night, I could hear people walking by as they returned home from dates. It was romantic. But I felt transient. I think it was a combination of being an only child and not having a bedroom or a house. As such, I liked looking at houses and longed to be inside one of them. My creative side was processed through actress Ginger Rogers. She was brassy, cute, funny and a wisecracker. I admired everything about her. In all of my books, I mention Ginger someplace as a good-luck piece. My father, Bill, was hilarious and had ambitions. He dreamed of

LAUGH TRACK Fannie Flagg in a publicity portrait, above, and in the first grade at St. Clement’s in Birmingham, left. Right, the street where she lived. West 56th Street. An actress was hired to perform my material, but days into rehearsals she dropped out. The director called me to be in the show. On opening night, Alan Funt of TV’s “Candid Camera” was in the audience. He hired me as a writer.

I had been in New York just two weeks. The first idea I pitched featured a truck driver stuck in traffic. The gag would be the expression on other drivers’ faces as they came to help and saw a woman behind the wheel. I was the truck driver.

To show you how much times have changed, another episode featured me as an airplane pilot. We filmed it at New York’s LaGuardia Airport. I was introduced to passengers as the pilot. Many wouldn’t board the plane, including the flight attendants. From there, I became a regular on TV game shows, including “The Match Game.” My Southern accent led to movie and TV roles, and I never stopped writing. Today, I live in Santa Barbara, Calif. I moved here in the mid-1970s. My first house was near the beach, but too much fog lingered in the mornings, so I moved up the hill. My home now is a two-bedroom Midcentury Modern that looks as if it belongs in Palm Springs. It’s along a golf course, though I don’t play golf. I just love to sit by my pool and watch the golfers go by and listen to them say awful things when they miss the ball. —As told to Marc Myers Fannie Flagg, 72, is an actress, comedian and author who has appeared in nine films, including “Five Easy Pieces” and “Grease.” Her nine novels include “Fried Green Tomatoes at the Whistle Stop Cafe” and, most recently, “The Whole Town’s Talking” (Random House).

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10,000 sq. ft. villa. 24 hour guarded/gated community of Pedregal. This 6 BR 5 ½ bath is a party palace. Magnificent views overlooking the Sea of Cortez. Satellite TV, internet, phone. A tunneled waterslide enters the lap pool under the Jacuzzi that seats 18. A putting green and driving range are on the pool level. From the 2-car garage the funicular, will rapidly elevate you to the upper levels.

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Minto Single-Family Estate Homes located in an area famous for extraordinary golf communities. TwinEagles boasts not just one championship course awarded “Best New Private Course in America” by Golf Magazine, but two 18-hole, tour-quality courses and a spectacular 47,000 sq. ft. country club lavished with every imaginable amenity. Best of all, golf membership initiation fee is included with every Minto new home purchase.

Own it. Enjoy it. Rent it. Just moments from the world-famous beaches of Anna Maria Island. Marina Walk offers you all the luxuries of the awardwinning Harbour Isle lifestyle with the option to place your waterfront condo with our preferred rental agency for short term rentals. Don’t miss your chance to own a vacation home that can work for you year-round!

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THE WALL STREET JOURNAL.

Friday, December 23, 2016 | M7

MANSION ELEMENTS

STAIRS THAT KICK IT UP A NOTCH Risers that connects steps are getting the attention of homeowners; lights, metal, porcelain THE STAIR RISERâ&#x20AC;&#x201D;the vertical piece that connects steps on a staircaseâ&#x20AC;&#x201D;may be the most overlooked item in the home. But homeowners should give this underfoot spot a second look. Tile, light, metal and even shelving are used to bring flair to the stairs. â&#x20AC;&#x201D; Leigh Kamping-Carder

METAL

FROM TOP: MARRETTI SRL; ED BUTERA/IBI DESIGNS, INC.

A metal riser can add an industrial edge or a pop of color to stairs. Architectural Grille, of Brooklyn, N.Y., makes risers in brass, bronze, steel, aluminum and stainless steel. Some can be powder-coated to match a paint color; others are treated with a high polish or antique patina, said senior estimator Ken Cavendish. The company offers a range of patterns, or can custom-cut one from digital files. Price: About $125 to $600 a riser, based on material and finish

FROM LEFT: DEVON BANKS; ARCHITECTURAL GRILLE

LIGHT BOXES Italian staircase manufacturer Marrettiâ&#x20AC;&#x2122;s Compon model has boxlike backs at each step, which can be lined with stainless steel, illuminated with LEDs and used for displays, such as small plants, said Marzia Marzi, director of U.S. operations. Made of a range of woods, the stairs must be attached to a wall. A light switch can sit at both ends. Price: About $12,000 for a basic 15-step model, plus shipping and installation

TILES More people are choosing sleek, monochromatic tiles for risers, rather than once-popular ceramics, said Jeff Strasser, chief creative officer of MarcMichaels Interior Design, of Winter Park, Fla. Porcelain tiles can mimic marble, but are less expensive and more durable. They can also be printed to look like Mediterranean-style ceramicsâ&#x20AC;&#x201D;for about a third of the price, he said. Price: $5 to $10 per square foot

STORAGE To maximize space in this 700-square-foot Manhattan loft, the staircase to the sleeping area has bookshelves. â&#x20AC;&#x153;People really like the idea of using storage in their stairs,â&#x20AC;? said Sarah Zames, principal designer of Brooklyn, N.Y.-based General Assembly, which designed the home. The ship-ladder-style staircase is cut from five repeating pieces of budget-friendly walnutveneer plywood. Price: About $10,000 for model shown

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M8 | Friday, December 23, 2016

THE WALL STREET JOURNAL.

MANSION

ALICE WHITBY FOR THE WALL STREET JOURNAL (8)

A NEW LEASE ON LUXE LONDON

BELSIZE PARK Emily Preheim DuPre in her home, top, which she rents for $8,000 a month while continuing to look for a property to buy. Dr. DuPre, an American expat, lives in the 2,000-square-foot, three-bedroom apartment in Belsize Park, above left and center, with her husband and two daughters. Above right, some of the restaurants that fill their lively neighborhood. Continued from page M1 rise. Falling home prices in the past year have prompted many would-be buyers to postpone purchases in hopes of getting a better deal. And some are reluctant to commit to a purchase in the face of high real-estate taxes and uncertainty following Britain’s vote to exit from the European Union. Meanwhile, homeowners in posh neighborhoods such as Chelsea and Mayfair also are taking a wait-andsee approach, in many cases deciding to rent out their homes rather than sell in a softening market. Estate agents Knight Frank said rental agreements were up 23% in the three months to November, compared with same period in 2015, though the firm declined to disclose the number of leases it brokered. With the number of homes available outstripping demand, it is “a tenant’s market,” says Tom Bill, head of residential research at Knight Frank. Oscar Creixell visited between 30 and 40 homes around South Kensington and Chelsea in his search for a two- or three-bedroom luxury apartment. Working with a $1.8 million budget, the 29-year-old director at a recycling company in the U.K., says he made two offers. Both fell through after the Brexit vote. People “were saying they were very serious about selling, but what I found, really, is that a lot of the people who owned these places are actually wealthy enough that they can afford not to sell” until the market is more stable, says Mr. Creixell, a Barcelona native. Mr. Creixell has decided to rent a three-story house in South Kensington instead. He pays $3,100 a month. He says he has soured on the London market and plans to continue renting for the foreseeable future. Recent revisions to the U.K.’s transaction tax, or stamp duty, have posed a particular problem for expats looking to buy in London. In late 2014, the cost of buying homes valued at more than £937,000 went up on a sliding scale, rising to a 12% tax on the portion of a sale over £1.5 million. In April, an additional 3% was tacked on to the sale price of homes for foreign buyers or for those renting out their properties. For people posted to London for work—who might be staying only a few years—these changes mean that buying a home now makes less financial sense, says Jo Eccles,

managing director at broker Sourcing Property. Many of her clients have chosen to rent instead. “If you’re only here for three years, you won’t have enough capital appreciation to wipe out stamp duty,” she says. Dr. DuPre has calculated that stamp duty on the kind of property her family would want to purchase would be comparable to paying three years of rent—on top of the price of the property, she says. The couple continues to scour real-estate listings in London. But while they wait, they have made some additions to their rental property to make it feel more like a permanent home, including setting up a trampoline and swing set in the backyard for their daughters. Interior designers in London say such moves to customize rental homes are increasingly common among London residents. Annabella Nassetti, who creates modern interiors with an emphasis on maximizing space in city apartments, says high-end renters are spending more on rugs, tapestries and art for properties they can’t change structurally because of their leases. And renting is increasingly looking like a good deal. An influx of properties on the market has helped push rents down about 5% since their most recent peak in mid-2015, says Mr. Bill of Knight Frank. The increase in inventory is the result of the falling prices of homes in central London—6% on average in 2016, according to Knight Frank—which has encouraged homeowners to wait for a market rebound before listing their properties. In May, Lennox Investment Management, which runs a fund that invests in prime central London real estate, was preparing to sell two houses and two condominiums valued together at about $74 million. The fund had an eight-year lifespan due to end in June. But given the weak sales market, “our investors said if you think you can rent these out, great, we’d rather do that,” says Rupert Bradstock, investment partner at Lennox. Mr. Bradstock says that since putting the homes on the rental market in September, all have been leased for as much as $16,700 a week. “If you don’t believe the market is roaring ahead, which it’s not,” he says, “then it can make a lot of financial sense to rent.”

NO DEAL Clockwise from above: Oscar Creixell, 29, a native of Barcelona, decided to rent in South Kensington after offers to buy fell through; the dining area of his home; a local street; an ice rink and the Natural History Museum.

The wall street journal december 23 2016  
The wall street journal december 23 2016  
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