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BRITISH TO PAY FOR SOME EU PROJECTS UNTIL 2020 Despite the Brexit vote passing in June, the British government will continue to pay for European Union-funded agriculture, infrastructure and science projects until 2020 if the country pulls out of the EU before then, the Associated Press reports. Philip Hammond, chief of the British Treasury, said he made the announcement as British scientists, farmers and other organizations “want reassurance about the flow of funding they will receive.” The guarantee would cost taxpayers about 4.5 billion pounds ($5.8 billion) a year. It will take at least two years, if not more, before a Brexit is finalized. VOLKSWAGEN GETS GERMAN APPROVAL FOR ENGINE FIXES Volkswagen, which is in the midst of repairing its cars with software rigged to cheat emission standards, said Sunday it has won approval from German regulators for its technical fixes on 460,000 diesel cars with faulty software. Approval applies to cars in Europe in the affected engine category, 1.2-liter TDI engines. Fixes on 2-liter TDI engines began earlier this year. The latest approval raises the number of cars ready for repair to over 5 million, Reuters reported. About 475,000 2-liter diesel cars in the U.S. were rigged with faulty software. FRIDAY MARKETS INDEX
Dow Jones industrials Dow for the week Nasdaq composite S&P 500 T-bond, 30-year yield T-note, 10-year yield Gold, oz. Comex Oil, light sweet crude Euro (dollars per euro) Yen per dollar
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18,576.47 y 37.05 0.2% x 32.94 5232.90 x 4.50 2184.05 y 1.74 2.23% y 0.04 1.51% y 0.05 $1335.80 y 6.70 $44.49 x 1.00 $1.1164 x 0.0023 101.27 y 0.66
SOURCE USA TODAY RESEARCH, MARKETWATCH.COM
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When switching jobs Average pay raise in the U.S. as of first quarter is
15.4% SOURCE CEB Global Talent Monitor JAE YANG AND KARL GELLES, USA TODAY
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L awrence J ournal -W orld - USA TODAY MONDAY, AUGUST 15, 2016
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Traders get chummy at the New York Stock Exchange on Thursday. A low reading on the VIX signals that investors expect calm.
‘FEAR GAUGE’ SENT TUMBLING AS STOCK MARKET HITS HIGHS Wall Street is feeling confident despite some investors’ warnings
Billionaire investor Carl Icahn says the stock market — which posted its ninth record high of 2016 on Thursday — is a “mirage.” Influential bond investor Jeff Gundlach of Doubleline Capital says: “Sell everything.” Bill Gross, the current Janus fixed-income fund manager that once ran the world’s biggest bond fund at PIMCO, recently wrote: “I don’t like bonds. I don’t like most stocks.” Despite the warnings from high-profile investors — often dubbed the smart money — fear is nowhere in sight on Wall Street, according to a closely watched Wall Street “fear gauge” that tumbled last week to a fresh 52-week low and not far from record-low fear levels in December 1993. As fear was retreating, the U.S. stock market was climbing to an all-time high, with the Standard & Poor’s 500 stock index, Dow Jones industrial average and Nasdaq all registering record highs Thursday, the first time that’s happened since 1999. On Aug. 9, the CBOE Volatility Index, or fear gauge better known
cause the VIX (or fear) to spike,” says John Canally, chief economVOLATILITY INDEX NEARING RECORD LOW ic strategist at LPL Financial. But that benign state of affairs A closely watched Wall Street “fear gauge” is near an all-time low can change quickly, he adds, if at a time the stock market is hovering near all-time highs. something hits “completely out of the blue,” like last August when 40.74 China surprised investors by de40 valuing its currency, the yuan. That shock caused the VIX to 32 jump from an intraday low of 10.88 on Aug. 5, 2015, to 53.29 on 24 Aug. 24. The S&P fell nearly 10% during that period. 16 11.56 VIX spikes are often associated with market drops. The S&P 500 8 also fell 9% earlier in January 17.79 when the VIX jumped more than 0 50% in a 12-session span. A VIX reading above 40 sugJan. 2, 2015 Aug. 24, 2015 Aug. 12, 2016 gests “scary” times for stocks and SOURCE CBOE; Bloomberg anything under 20 occurs in beJAE YANG AND KRIS KINKADE, USA TODAY nign market environments, says as the VIX, fell as low as 11.02, not Rutherford, CEO and co-founder Paul Hickey, co-founder of Befar from its intraday record low of of Cavalier Investments. “The spoke Investment Group. 8.89 back on Dec. 27, 1993, ac- only thing we have to fear is the The VIX hit an intraday peak cording to CBOE data. of 89.53 on Oct. 24, 2008, at the lack of fear.” Rutherford ticks off a list of height of the financial crisis, the A low VIX (a measure of how much market volatility investors worries that could challenge the CBOE says. While a low VIX can smack of are expecting) signals that inves- market’s current calm. “(Price-to-earnings ratios) are investors turning a blind eye to tors expect the market to remain calm. Low fear levels most often extremely high,” he says. “GDP is risk, Bespoke data show that foloccur at times of rising stock weak. Corporate earnings have lowing the 10 other times since prices and tranquil markets. But contracted four straight quarters. 1990 that the VIX fell below 12 aflow VIX readings are often The world economy isn’t great. ter not doing so for three months, viewed as a sign of investor com- There’s downward pressure on oil stocks were 2.9% higher three prices again. And central banks months later. placency as risks build. Despite fears of a spike in in“The VIX is extremely low, but continue to drop interest rates vestor fear levels, the VIX could at the same time there are a lot of (due to weak growth).” So why isn’t the market listen- stay low for an extended period if things on the negative side of the the stock market grinds higher ledger that people should be con- ing to the warnings? cerned about, (but they don’t) The market “doesn’t see an into 2017, says Mark Arbeter, seem to be focused on,” says Greg event on the horizon that could president of Arbeter Investments.
familiar and at ease with the software that is transporting them. “This is bringing a whole new world inside their backyard in a way that’s safe for them to explore,” Regina Jackson says as she watches the students absorb the morning lessons. Jackson is president of the East Oakland Youth Development Center. Equal parts sanctuary and springboard, it was founded nearly four decades ago by former Clorox CEO Robert Shetterly to lift the fortunes of a neighborhood overburdened by sky-high rates of poverty, crime and violence. Of the students in this class, about 90% qualify for free lunch and live within blocks of the center. They come here for rare access to opportunity in the form of free after-school tutoring, college preparation courses, music and arts lessons, health and wellness education programs and the hardwood that such NBA greats as Gary Payton and Jason Kidd once played on. The community center’s goal: to give children the same shot at success they would have in wealthier parts of the city. Increasingly, that means the digital literacy they will need to successfully navigate the world.
corridor that stretches between San Francisco and San Jose, has come under broad criticism that its outreach efforts have overlooked Oakland, a diverse city across the Bay where African Americans and Latinos make up more than half of residents. No critic has been more vocal than Jesse Jackson, the civil rights leader who has led the campaign for Silicon Valley to hire more African Americans and Latinos, two groups sharply underrepresented in Silicon Valley tech companies. His advocacy led to Intel forming a five-year partnership with the Oakland Unified School District designed to touch the lives of 2,300 students and graduate 600 students in computer science and engineering programs at two high schools. Tyrese Jackson, 9, dreams of one day making gaming apps like the pair of seventh-grade girls on the Nickelodeon sit-com Game Shakers. Building games is on Raul Sanchez’s bucket list, too. “For most of these kids, this is the first time ever being around an iPad,” says Pettaway, their 17year-old college-bound instructor. “What I am trying to do is start their digital footprints early.”
Adam Shell @adamshell USA TODAY
A few swipes swoop youths into a new world Oakland program exposes low-income kids to technology Jessica Guynn @jguynn USA TODAY
On a sunny morning, kids bounce in their chairs and rock their heads rhythmically to infectious beats their classmates are mixing on GarageBand software. “Give her a thumbs up for her beat,” exhorts instructor Jeffrei Pettaway and an enthusiastic sea of hands juts into the air. For many in this classroom, this is the first time they have touched an iPad. This six-week, hands-on summer class exposes kids ages 7 to 12 to technology — and the 21st century skills that come with it. With a few swipes, the tablets on the tables in front of them — a gift from technology giant Apple — open up worlds miles away from this hardened stretch of East Oakland, Calif. The kids have ventured on virtual scavenger hunts in Africa and researched what life is like in India, each project making them more OAKLAND
JESSICA GUYNN, USA TODAY
A student at the East Oakland Youth Development Center plays with software on an iPad. Low-income youths in East Oakland are among “the most technologically disconnected demographic groups in the United States,” Jackson says. Four out of 10 students in Oakland public schools do not have access to a computer at home, and Jackson estimates 70% of the students at her center do not have a computer at home with parents relying instead on smartphones.
Jackson installed computer labs to connect more kids to technology and offer year-round computer classes. And, this summer, she teamed with Apple, which is reaching across the digital divide into Oakland, starting with this donation of 40 iPads to expose 180 kids to the technology that will shape their lives and careers. Silicon Valley, the high-tech