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DJIA 24307.18 À 35.77 0.1% NASDAQ 7567.69 À 0.8% STOXX 600 376.75 g 0.8% 10-YR. TREAS. g 6/32 , yield 2.867% OIL $73.94 g $0.21 GOLD $1,239.80 g $11.50 EURO $1.1641 YEN 110.90 What’s Boys Found After Nine Days Lost in the Darkness of a Flooded Cave Morgan, News Goldman

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ed officials offered Gold- From Fed Fman and Morgan Stanley an option to avoid stress-test failure and continue paying billions to shareholders, a sign On Tests of a significant shift in the reg- ulatory climate for banks. A1 BY LIZ HOFFMAN AND LALITA CLOZEL The IPO market has come roaring back in 2018, with Federal Reserve officials companies raising public told Goldman Sachs Group Inc. capital at a pace rarely seen and Morgan Stanley that they in the past two decades. A1 were about to flunk a portion Pfizer raised list prices on of the annual stress tests but over 40 prescription drugs, offered them a deal to avoid marking a second round of an outright fail and continue increases this year despite paying billions to sharehold- mounting public scrutiny. B1 ers. In phone calls to executives Regulators are stepping of the Wall Street titans on up enforcement on broker- June 21, regulators told them ages’ sales of private stakes that to fully pass the test, they in companies, which are of- would have to cut almost in ten targeted at seniors. B1 half the combined $16 billion Tesla’s engineering chief they had hoped to pay out to

won’t return from his leave ROYAL THAI ARMY/EPA/SHUTTERSTOCK shareholders, according to of absence. Separately, the auto HUDDLED TOGETHER: Rescuers found all 12 boys and their soccer coach alive deep inside a cave complex in northern Thailand on Monday, people familiar with conversa- maker upped the output tar- nine days after they were trapped by floodwaters. Authorities warned the mission wasn’t complete, as family members wept in relief. A16 tions between the Fed and get for its Model 3 sedan. B3 both banks. But Fed officials gave the The federal probe into banks an unprecedented op- how Facebook handled data tion: If they agreed to freeze about its users has been joined their payouts at recent levels, by the SEC and the FBI. B4 Vote Resets U.S., Mexico on Trade they would get a “conditional PwC must pay $625.3 mil- non-objection” grade and lion in damages for failing BY JOSÉ DE CÓRDOBA the U.S., issues that are conten- growing strains between the passe it could slow nearly a avoid the black eye of failure. to catch a fraud scheme that AND DAVID LUHNOW tious on both sides of the na- nations under Mr. Trump, who quarter-century of cautious but That meant the banks could helped cause the failure of Co- tions’ shared 2,000-mile border. has repeatedly criticized Mex- successful bridge-building, pay out a combined $13 bil- lonial Bank, a judge ruled. B10 MEXICO CITY—Andres Ma- President Trump called Mr. ico and its people and called which saw the two countries go lion, or about $5 billion more nuel López Obrador’s election López Obrador on Monday to for the construction of a wall from distant neighbors to polit- than what they would have U.S. stocks rallied late victory could offer a chance to congratulate him. Both sides to divide the two countries. ical allies and key economic given back to investors if they in Monday’s session, led by reset frayed relations with termed the conversation ami- Mr. López Obrador could partners who trade nearly $560 had decided to retake the test tech shares. The Dow rose Washington, as the incoming cable. Later, Mr. Trump said prove a pugnacious counterpart billion of goods every year. and get a passing grade. 35.77 points to 24307.18. B11 Mexican president and Presi- Mexico’s president-elect “had to Mr. Trump. He has vowed to “It heightens the risk that It also will boost a profit- Nestlé is in talks to ac- dent Donald Trump both be- a very excellent election. I defend Mexico’s dignity and the relationship will deterio- ability measure that helps de- quire control of Canada’s lieve the North American Free would say even better than published a collection of rate further,” said Michael termine how much Goldman Champion Petfoods for Trade Agreement needs to be anticipated.” speeches during his campaign Shifter of the Inter-American Chief Executive Lloyd Blank- more than $2 billion. B2 rewritten. Mr. López Obrador, who is to called “Oye, Trump,” or “Listen Dialogue, a Washington, D.C., fein and Morgan Stanley CEO But the two committed eco- take office Dec. 1, said in a tele- Up, Trump,” an attack on the think tank. “I think he will be James Gorman are paid. World-Wide nomic nationalists, who come vision interview that “we are U.S. president’s plans to build a PleaseturntopageA5 The arrangement is the from opposite ideological cor- not going to fight.” He added: border wall and his policy to- first of its kind in the eight ners, are expected to butt heads “We will extend our open hand ward migrants, which the Mexi- Mexican voters snub the years of the Fed’s annual tests, López Obrador’s election over exactly how to rewrite the to look for a relationship of can politician called “racist” establishment...... A5 and one of the clearest signs win could offer a chance to trade agreement and how to friendship with the U.S.” and “xenophobic.” Investors view new president to date of a significant shift in reset frayed relations with check illegal immigration into The warm remarks belied If the two men reach an im- warily...... B11 PleaseturntopageA2 Washington, as the incoming Mexican president and Trump both believe the North Amer- ican Free Trade Agreement App Developers Gain Access Academic Honors Lose Luster needs to be rewritten. A1, A5 Honors designations have become much more common at many Germany’s Merkel and her top U.S. schools, according to a Wall Street Journal review. A2 rebellious interior minister To Millions of Gmail Inboxes Percentage of graduates withhonors reached a deal for tighter con- trol over immigration, pulling 60% back from the brink of a full- Johns blown government crisis. A16 Google and others enable scanning of emails by data miners Hopkins Trump’s trade offensive 58.8% is threatening the liveli- University hoods of many farmers in BY DOUGLAS MACMILLAN One of those companies is Return Path Inc., 50 of Southern regions that helped send which collects data for marketers by scanning him to the White House. A3 California Google said a year ago it would stop its the inboxes of more than two million people 44.5% The president said he computers from scanning the inboxes of Gmail who have signed up for one of the free apps in met with four potential Su- users for information to personalize advertise- Return Path’s partner network using a Gmail, Lehigh preme Court nominees and ments, saying it wanted users to “remain con- Microsoft Corp. or Yahoo email address. Com- University would interview more before fident that Google will keep privacy and secu- puters normally do the scanning, analyzing 40 44% announcing his choice. A4 rity paramount.” about 100 million emails a day. At one point But the internet giant continues to let hun- about two years ago, Return Path employees University of A judge halted the admin- dreds of outside software developers scan the read about 8,000 unredacted emails to help North Carolina istration from systematically inboxes of millions of Gmail users who signed train the company’s software, people familiar at Chapel Hill detaining asylum seekers who up for email-based services offering shopping with the episode say. 36.4% have a credible fear of return- price comparisons, automated travel-itinerary In another case, employees of Edison Soft- 30 ing to their homelands. A3 planners or other tools. Google does little to ware, another Gmail developer that makes a 2009 ’10 ’15 ’18 The administration’s police those developers, who train their com- mobile app for reading and organizing email, push for more detention facil- Note: Dates are year of graduation. UNC data not available for 2018. puters—and, in some cases, employees—to personally reviewed the emails of hundreds of Sources: the schools THE WALL STREET JOURNAL. ities for immigrants is boost- read their users’ emails, a Wall Street Journal users to build a new feature, says Mikael ing the outlook for two big examination has found. PleaseturntopageA6 private prison operators. A3 Harvey Weinstein was in- dicted in Manhattan on ad- ditional sex crimes charges, The Heavy Breathing in This Park INSIDE IPO Market Runs at these involving an alleged incident in July 2006. A3 Isn’t What Anyone Thinks It Is iii Fastest Clip Since 2014 Rescuers found 12 miss- ing youths and their soccer Dogs run, humans leap from benches at coach in a Thai cave complex BY MAUREEN FARRELL storage and collaboration nine days after they were the sound of a Manhattan art installation company Dropbox Inc. to trapped by floodwaters. A16 An IPO market that was left home-alarm company ADT Inc. for dead just two years ago to big-box retailer BJ’s Whole- Notice to Readers BY MAYA SWEEDLER dinosaur movie. has come roaring back in 2018, sale Club Holdings Inc. The sounds are recordings CHILDREN’S with companies raising public The total amount raised WSJ.com and WSJ mobile NEW YORK—José Sandín of people breathing. They are capital at a pace rarely seen in doesn’t count one of the larg- apps will publish was sitting on a bench in City part of an art installation SUPPLEMENTS the past two decades. est and most high-profile com- throughout the July Fourth Hall Park in lower Manhattan meant to bring awareness to RAISE CONCERN So far this year, 120 compa- panies to go public in the U.S. holiday. The print edition just before lunchtime last respiratory disease and the ef- nies have used initial public this year. Swedish music-shar- won’t appear Wednesday, week for a little down time. fects of poor air quality. offerings to raise $35.2 billion ing company Spotify Technol- but a daily edition will be Suddenly, seemingly out of Titled “Out of Thin Air,” the LIFE & ARTS, A7 on U.S. exchanges. That is the ogy SA went public without available in our iPad, nowhere, heavy breathing and exhibit—by a Brooklyn-based highest volume since 2014 and raising any money through a Android and Windows apps. gasps erupted, and artist named Sari the fourth-busiest year-to- so-called direct listing. he jumped up. “I Carel—leaves many date on record, according to Some of the largest private thought there was confused. Dealogic, whose data go back companies, including Airbnb CONTENTS Opinion...... A13-15 a bear behind us,” “My first to 1995. Inc., Uber Technologies Inc. Business News.. B3,5 Property Report... B6 he said. thought was dino- Bankers say no single cata- and WeWork Cos., which have Capital Journal...... A4 Sports...... A12 Crossword...... A11 Technology...... B4 He was wrong. saurs,” said New lyst is pushing companies to raised vast amounts of private Heard on Street. B12 U.S. News...... A2-4 It was art. York resident Mi- tap the public markets for cap- capital, are still waiting in the Life & Arts...... A7-11 Weather...... A11 The park’s at- chelle Guelbart, a ital. Instead, the surge has wings and are expected to Markets...... B11-12 World News...... A5,16 mosphere is inter- 30-year-old Brook- been caused by a convergence hold off on going public until rupted twice an You’re hearing art lyn-nonprofit em- 21 RULES FOR of favorable business condi- at least 2019, according to > hour by loud, ployee who tions, strong stock markets people familiar with the com- strange noises that have in- strolled through last week and JULY FOURTH and investors’ hunger for high- panies’ plans. Another closely trigued, perplexed and rankled figured the sounds were a pro- WIFFLE BALL growth companies. watched IPO candidate, ride- visitors. Park goers have mis- motion for this summer’s “Ju- Those factors have led to PleaseturntopageA4 taken them for the whoosh of rassic World” movie. “I was offerings by an array of firms s 2018 Dow Jones & Company, Inc. All Rights Reserved an airplane, the thumping of definitely surprised by the JASONGAY,A12 varied by size, industry and James Mackintosh: Stocks an ultrasound or audio from a PleaseturntopageA6 age—ranging from the web- are up despite troubles...... B1 .

A2 | Tuesday, July 3, 2018 ** THE WALL STREET JOURNAL. U.S. NEWS You Graduated Cum Laude? So Did Everyone Else

BY MELISSA KORN USC, which requires a GPA of Grade Inflation University this past spring at least 3.5 for the lowest were the highest in at least a Nearly half of students who honor, cum laude, and to 44% Minimum GPAs needed decade. graduated from Lehigh Univer- from 39% at Lehigh, where stu- for honors Academic researchers say sity, Princeton University and dents need at least a 3.4. 3.8 Duke* that uptick is a sign of grade the University of Southern Cal- “A 4.0 does signal some- 3.808 inflation, not of smarter stu- ifornia this year did so with thing significant, that that stu- dents. Vanderbilt cum laude, magna cum laude dent is good,” said Stuart 3.7 “Moving the whole bar up- 3.738 or summa cum laude honors, Rojstaczer, a former Duke Uni- ward creates a problem where or their equivalents. At Har- versity professor who has stud- Dartmouth people learn they can do very vard and Johns Hopkins, more ied grade inflation for years. “A 3.6 3.67 little and get a grade-point av- got the designations than 3.7, however, doesn’t. That’s erage that looks very respect- Harvard didn’t. just a run-of-the-mill student able,” said Richard Arum, dean 3.62 Anyone with a grade-point at any of these schools.” 3.5 of the University of California, average of at least 3.4 is Research from an adminis- Irvine School of Education. granted Latin honors at Mid- trator at the College Board and A handful of schools, includ- dlebury College; the number of a doctoral student at the Uni- 3.4 ing the University of North students graduating with hon- versity of Georgia found that 2012 2018 Carolina at Chapel Hill, have ors has been rising in recent 47% of high-school students tried to rein in the awards. years, the school says, and was graduated with an A average in *Duke’s figure is for Trinity College Beginning with the class of Arts & Sciences north of 50% this spring. 2016, up from 39% in 1998. Stu- Note: Dates are year of graduation. that graduated in 2017,

“I’d say that it’s time to re- dents keep earning the high BRIAN SNYDER/REUTERS Sources: the schools Georgetown University started consider our eligibility crite- marks in college. Harvard graduates at their commencement ceremony in May. THE WALL STREET JOURNAL. distributing honors based on ria,” said Middlebury Interim At Wellesley College, 41% of the relative performance of Provost Jeff Cason. this year’s graduating class so with what the school refers medical anthropology in the that can receive academic hon- students, rather than a fixed Honors designations have completed their degrees with to as “general honors” by fall, said he was proud of his ors. But the caps vary widely, 3.5 GPA cutoff. Roughly a quar- become close to the norm at Latin honors, which means a achieving a GPA of at least 3.5. academic accomplishment. But, from 25% at Columbia Univer- ter of the class now gets one of many top schools, according to GPA of at least 3.6 at the Mas- A decade ago, nearly 46% did. he said, “It’s not something sity to up to 60% at Harvard. the three Latin honors; before a Wall Street Journal review of sachusetts school. That share Rushabh Doshi learned of that holds too much weight.” Harvard’s number hit 91% in the shift, according to the stu- the criteria for earning honors has risen in the past two years, his honor after seeing his name Spokesman Dennis O’Shea 2001, as highlighted at the dent newspaper, more than and the percentage of the se- after being roughly one-third on a list in the Johns Hopkins said the school hasn’t studied time in a Boston Globe article half of the students within nior class that got the designa- for much of the past decade. A graduation program this the trend and so can’t provide about generous honors poli- some undergraduate programs tion at schools in the top 50 of spokeswoman said the school spring. Then he noticed the list an explanation for the rise. He cies. Soon after, the school re- received those designations. the WSJ/Times Higher Educa- hasn’t pinpointed the cause. was four pages long. called its students “bright” and vised its selection process. The school says it now uses tion ranking. Meanwhile, nearly 59% of Mr. Doshi, who majored in “committed.” The GPAs required for hon- percentiles “in order to ensure The share increased to 44% seniors who graduated from public health and is heading to Most elite schools cap the ors at the University of Michi- that Latin honors represent a from 32% in the past decade at Johns Hopkins this spring did Oxford University to study share of the graduating class gan and Case Western Reserve mark of distinction.” U.S. WATCH Rescued Turtles Return to Sea With Satellite Tags for Tracking

ECONOMY IDAHO Factory Activity Girl Stabbed at Her Rises Before Tariffs Birthday Party Dies American factory activity ac- A 3-year-old Idaho girl who celerated for the second straight was stabbed at her own birth- month, in part because manufac- day party died Monday, two turers were scrambling to move days after a man invaded the goods ahead of threatened tar- celebration and stabbed nine iffs. people, authorities said. The Institute for Supply Man- Timmy Kinner is accused of agement on Monday said its attacking a group of children and manufacturing index rose to the adults who tried to protect 60.2 in June from 58.7 in May. them at the party at an apart- Numbers above 50 indicate ac- ment complex that is home to tivity is expanding across the many refugee families. manufacturing sector, while Word of the child’s death numbers below 50 signal con- came at Mr. Kinner’s first court traction. The overall ISM index in appearance, where a judge told February hit 60.8, its highest him that he was charged with level since May 2004, before first-degree murder and other easing in March and April. It felonies in connection with the picked up in May and again in Saturday night attack. June. Mr. Kinner is American, and The U.S. imposed steel and the victims are members of ref- aluminum tariffs against Europe, ugee families from Syria, Iraq Canada and other nations last and Ethiopia. month and faced retaliation for Boise Police Chief William the action. Bones said the evidence doesn’t —Sharon Nunn suggest the attack was a hate crime.

NEW ENGLAND AQUARIUM/ASSOCIATED PRESS MICHIGAN The suspect had recently HOMESTRETCH: The New England Aquarium released five loggerhead turtles Monday at West Dennis Beach in Massachusetts. The stayed at the apartment com- tags glued to their shells will transmit location and diving data for six to nine months to study feeding and migration patterns. State Takes Schools, plex but was asked to leave Fri- Cities Off Critical List day over bad behavior, he said. —Associated Press It wasn’t just Detroit and tal payouts level from the prior cise of discretion on the either the amount they paid Flint. Dearborn, Pontiac, Benton CLEVELAND Banks Got year, but was dinged with a quantitative portion of the test out over the past year, or an Harbor—all were run by state- formal failing grade. was “a potential slippery annualized average of its pay- appointed emergency financial Man Held in Alleged The 2018 exercise was the slope.” outs over the past two years. managers in recent years. July 4 Bomb Plot Break on harshest iteration of the stress Agencies run by Trump ap- Morgan Stanley had For the first time since 2000, tests so far, simulating a hypo- pointees have moved to loosen boosted its payout in 2017, so no city or school district in Mich- An American-born citizen thetical scenario of 10% unem- rules in other ways. Regula- it chose the prior-year level. igan is under such control, a sign who federal authorities say re- Stress Test ployment, crashing markets tors recently proposed easing Goldman, which didn’t buy the state has put the auto in- cently scouted locations in and soaring loan losses. the Volcker rule, which limits back any shares in the second dustry’s downturn and other fi- Cleveland to attack people ContinuedfromPageOne Fed officials said their leni- bank traders from making big quarter, gets a bigger number nancial woes in the rearview watching Fourth of July fire- the regulatory environment ency toward Goldman and bets, and are planning changes by using the two-year look- mirror. works and talked of carrying out for banks, which have been ex- Morgan Stanley was due in that could make it easier for back. The difference is worth Gov. Rick Snyder, who ap- additional bombings has been pecting a gentler approach part to the impact of the 2017 banks to meet lending require- about $570 million to Goldman pointed 22 emergency manag- charged with trying to support from Washington ever since tax law, which reduced the ments and reduce compliance shareholders. ers—more than all of his prede- terrorism. the election of President Don- value of certain tax assets held penalties under the Commu- Goldman can return $6.3 cessors combined—credits his Federal authorities said Mon- ald Trump. by the banks and meant they nity Reinvestment Act, which billion to shareholders, com- use of emergency managers day that Demetrius Pitts, 48, “New refs, new rules,” con- entered the crisis scenario with requires banks to lend in poor pared with $5.7 billion last with controlling costs and resolv- had expressed his support for al sulting firm Pricewater- diminished capital reserves, af- neighborhoods. year. Mr. Blankfein said in a ing issues such as unfunded lia- Qaeda for more than a year and houseCoopers LLP wrote in a fecting their results throughout The interim director at the statement that the bank is bilities of cities. Last week, he talked about setting off bombs note. the nine-quarter test period. Consumer Financial Protection “positioned to return capital released the Highland Park at a July 4 parade and later in This round of tests was the Bureau, Mick Mulvaney, has to our shareholders, while re- School District from receivership, his hometown, Philadelphia. first graded by Trump appoin- largely stopped initiating new investing in our global client the most-recent case in which He was arrested Sunday after tee Randal Quarles, a former investigations and wants the franchise for the long-term.” the state has handed control meeting an undercover agent. Wall Street lawyer and pri- The willingness to consumer-finance regulator to Morgan Stanley was ap- back to elected officials. “The FBI special agent Stephen An- vate-equity executive who last compromise contrasts be less antagonistic to the proved for the same $6.8 bil- fact that the state now has no thony said it was unclear how year became the Fed’s regula- businesses it regulates. In lion it paid out last year, emergency managers in place for close Mr. Pitts was to carrying tory czar. with the Fed’s hard May, Mr. Trump also signed a which Mr. Gorman said “re- the first time in 18 years shows out his threats, but he said au- “This year’s stress test fol- line of recent years. bipartisan law rolling back cri- flects the underlying strength how well that commitment has thorities couldn’t sit back and lowed the same notification sis-era rules for smaller and and stability of our attractive worked,” Mr. Snyder said. wait to find out. process as in past years—all regional banks. mix of businesses.” —Kris Maher —Associated Press firms were notified of the re- The deal with the Fed isn’t sults and given the fixed op- The decision came in a a total win for Goldman and tion to reduce their capital unanimous decision by the Morgan Stanley, whose shares CORRECTIONS THE WALL STREET JOURNAL payout plans with no negotia- board, which includes Barack both fell by more than 1% on (USPS 664-880) (Eastern Edition ISSN 0099-9660) tions,” a Fed spokesman said. Obama appointee Lael Brainard. Friday. Investors want banks AMPLIFICATIONS (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) Goldman and Morgan Stan- The stress tests, arguably to raise their shareholder pay- Editorial and publication headquarters: ley had failed the quantitative the most visible sign of the outs every year as profits in- 1211 Avenue of the Americas, New York, N.Y. 10036 portion of the exercise, which postcrisis crackdown on Wall crease, not keep them steady. Health and Human Services Published daily except Sundays and general legal holidays. tests whether bank capital Street, are being changed in But the two banks fared Secretary Alex Azar’s surname Periodicals postage paid at New York, N.Y., and other mailing offices. levels stay above regulatory ways that benefit the industry. better under the Fed’s offer was misspelled as Axar in a U.S. Postmaster: Send address changes to The Wall Street Journal, requirements. A qualitative The Fed exempted three firms than they would have if they News article Saturday about a 200 Burnett Rd., Chicopee, MA 01020. portion looks at more-subjec- with less than $100 billion of had been forced to dial back judge’s decision to strike down All Advertising published in The Wall Street Journal is subject to the applicable rate tive questions, including the assets from the test this year their requests to the point the Trump administration’s ap- card, copies of which are available from the Advertising Services Department, Dow quality of a bank’s internal under the new banking law. Its where they passed the test. proval of a Kentucky plan to Jones & Co. Inc., 1211 Avenue of the Americas, New York, N.Y. 10036. The Journal data or board of directors. treatment of Morgan Stanley If Goldman had been re- impose work requirements on reserves the right not to accept an advertiser’s order. Only publication of an The Fed’s willingness to and Goldman—as well as State quired to rejigger its plan until many Medicaid recipients. advertisement shall constitute final acceptance of the advertiser’s order. compromise contrasts with its Street Corp., which got a pass its capital ratios exceeded the Letters to the Editor: Fax: 212-416-2891; email: [email protected] hard line of recent years. In although it also failed to clear Fed’s minimum, the bank would U.S. Circuit Judge Joan Lar- 2014, for example, the regula- capital requirements under the have been able to seek just sen is 50 years old. In some NEED ASSISTANCE WITH YOUR SUBSCRIPTION? tor blindsided Citigroup Inc. stress scenario—showed the over $1 billion in buybacks, in- editions Thursday, a U.S. News By web: customercenter.wsj.com; By email: [email protected] with a failing grade, leaving ex- Fed taking a more flexible ap- stead of the $5 billion that was article about possible nominees By phone: Or by live chat ecutives were scrambling to proach to what had been a bi- approved, according to people to the Supreme Court incor- 1-800-JOURNAL (1-800-568-7625); at wsj.com/livechat address the Fed’s concerns. The nary exercise. familiar with the matter. rectly said she is 49. same year, Utah-based Zions “The Fed was very kind,” Other aspects of the Fed’s REPRINTS & LICENSING Bancorp also failed on quanti- said Arthur Angulo, a managing offer were unusually accom- By email: [email protected]; By phone: 1-800-843-0008 tative grounds. Like Goldman director at Promontory Finan- modating. The two banks Readers can alert The Wall Street Journal to any errors in news articles Sachs and Morgan Stanley, the cial Group and a former Fed of- could peg their shareholder by emailing [email protected] or GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS firm was able to keep its capi- ficial. He added the Fed’s exer- payouts to one of two levels: by calling 888-410-2667. .

THE WALL STREET JOURNAL. **** Tuesday, July 3, 2018 | A3 U.S. NEWS Weinstein Trade Spat Faces New Takes Toll Assault Charges On Farm Belt BY ZOLAN KANNO-YOUNGS Harvey Weinstein, the pow- BY JESSE NEWMAN Researchers at the Univer- erful Hollywood producer who sity of Illinois and Ohio State was previously indicted in The U.S. Farm Belt helped de- University estimate that over Manhattan for rape and sexual liver Donald Trump to the four years, a 25% tariff on U.S. assault of two alleged victims,

White House, drawn to his soybean imports by Beijing ADAM BIRD FOR THE WALL STREET JOURNAL was indicted on additional sex promises to revive rural Amer- would result in an average Michigan hog farmer Jon White says he thinks the president is trying to do what’s best for the country. crimes charges on Monday in ica and deregulate industry. 87% decline in income for a connection with a third woman Now, the president’s trade of- midsize Illinois grain farm. in a July 2006 incident. fensive is threatening the liveli- Still, many farmers say they Tariff Targets Manhattan District Attorney hoods of many farmers. support the Trump administra- Cyrus Vance Jr.’s office said a Mounting trade disputes, tion’s trade goals. U.S. duties on goods from China, Canada and elsewhere have sparked retaliatory tariffs, grand jury voted to charge Mr. spurred by U.S. threats to “Ultimately I think the presi- which take aim at American farm goods. Weinstein, 66 years old, with a withdraw from the North dent is trying to do the best criminal sex act in the first de- American Free Trade Agree- thing for the country as a Share of farm sector cash receipts in 2016 gree for allegedly forcibly ment and tariffs on billions of whole. You can’t please all peo- Major products affected by Chinese tariffs in place and scheduled for July 6, 2018. committing oral sex on a dollars of goods from key ple all the time,” said Jon White, woman, as well as two counts AK Additional duty rate of 25%. ME trading partners, have cut U.S. a Jones, Mich., hog farmer. of predatory sexual assault. agricultural exports and sent As midterm elections loom, Hogs Soybeans Apples Almonds With the three additional fel- commodity prices tumbling. administration officials have Pork ony charges, he could now face Many farmers, who depend on tried to reassure farmers, say- VT NH a maximum sentence of life in shipments overseas for one- ing they are considering the 1 block = 1% prison. fifth of the goods they pro- use of Depression-era pro- Dozens of women accused duce, say they are anxious. grams, which permit borrow- WA ID MT ND MN MI NY MA RI him of sexual misconduct last “We live and die by trade,” ing of as much as $30 billion fall, sparking a national move- said Arkansas farmer Rusty from the Treasury, as well as ment to encourage victims of Smith, who joined dozens of other tools to shield farmers sexual assault to report such farmers in Grand Rapids, Mich., from trade-related losses. OR UT WY SD IA WI IN OH PA NJ CT crimes. last week to discuss trade and Farmers could take on out- “A Manhattan Grand Jury agricultural commodities. size importance in coming has now indicted Harvey Since April, duties the U.S. elections in key farm states, CA NV CO NE MO IL KY WV VA MD DE Weinstein on some of the has levied on goods from China, like Michigan, which Mr. most serious sexual offenses Mexico, Canada and the Euro- Trump narrowly won in 2016. that exist under New York’s pean Union have sparked retal- Michigan exports more than Penal Law,” Mr. Vance said in $3 billion of food and farm AZ NM KS AR TN NC SC a statement. “This indictment goods, supporting over 26,000 is the result of the extraordi- jobs there, according to the nary courage exhibited by the Some farmers fear it state’s Farm Bureau. OK LA MS AL GA survivors who have come for- will jeopardize foreign Mr. Trump’s job-approval rat- ward.” markets that took ing hasn’t taken a hit as trade Benjamin Brafman, Mr. tensions have escalated, said HI TX FL Weinstein’s attorney, said in a decades to establish. Charles Franklin, director of the statement that his client Marquette Law School poll, would plead not guilty to the which interviews Wisconsin vot- new charges. “Mr. Weinstein ers. But if farm incomes are sig- maintains that all of these al- iatory tariffs and trade threats, nificantly squeezed, tensions Major products affected by Canadian tariffs. Additional duty rate of 10%. legations are false and he ex- targeting American farm goods could emerge between party pects to be fully vindicated,” AK Cattle Oranges Maple products Cucumbers ME from pork to cheese to apples. loyalty and farmers’ wallets. Some beef Orange juice he said. “Furthermore to Disquiet among farmers Some farmers fear trade products charge Mr. Weinstein as a grew in June as crop prices battles will jeopardize foreign Predator when the interac- fell thanks to benevolent U.S. markets that took decades to VT NH tions were each consensual is weather and additional duties establish. “It’s a long, hard simply not justified.” expected from China on prod- climb to build market share,” Mr. Weinstein was charged ucts like soybeans, for which it said Gary Parr, who grows corn WA ID MT ND MN MI NY MA RI in May with first- and third- is the U.S.’s top customer. The and soybeans in Charlotte, degree rape, as well as com- total value of this year’s U.S. Mich. “To lose it is tough.” mitting a criminal sexual act corn, soybean and wheat crops Others worry another bum- in the first degree in connec- dropped about $13 billion, or per harvest this fall will com- OR UT WYWY SD IA WI IN OH PA NJ CT tion with incidents in 2004 10%, in June, said Chris Hurt, pound pain inflicted by tariffs. and 2013 against two women, an agricultural economist at The USDA expects farmers to according to the Manhattan Purdue University. reap the fourth-largest corn CA NV CO NE MO IL KY WV VA MD DE prosecutors office. The planned tariffs on U.S. crop and third-biggest soy- He pleaded not guilty to soybean exports come as bean crop in history. those charges and is currently farmers have boosted plant- Dairy farmers have been out of jail on $1 million bail. ings, betting on the oilseeds to banking on sales abroad to help AZ NM KS AR TN NC SC Under New York state law, deliver stronger returns than absorb increasing milk supplies some of the most serious sex corn during a yearslong slump that have pushed down prices. offenses, such as rape in the in the farm economy. Tariffs imposed on U.S. cheese OK LA MS AL GA first degree or aggravated sex For farmers like Mr. Smith, exports by Mexico, the largest abuse in the first degree, don’t who grows corn and soybeans buyer of U.S. dairy products, have statutes of limitations, in Cotton Plant, Ark., the 16% add insult to injury, they say. according to legal experts. HI TX FL decline in soybean prices alone Brian Preston, a dairy farmer Mr. Weinstein has seen his translates into a nearly $100 per in Quincy, Mich., said trade un- career and reputation implode acre drop in the value of his certainty helped prompt a deci- since the allegations surfaced crop. “That’s $100,000 that has sion to postpone a $2.5 million —Jesse Newman and Yaryna Serkez last fall. Around then, police in disappeared into thin air,” he expansion project on his farm. New York and London began said. “We were already in the —Jacob Bunge Sources: Department of Agriculture (cash receipts); Ministry of Commerce of the People's Republic of China (Chinese tariffs); investigating him for sexual red, and now it’s even worse.” contributed to this article. Department of Finance Canada (Canadian tariffs) THE WALL STREET JOURNAL. assault allegations. More Detentions Boost Private Prisons

BY ZUSHA ELINSON 52,000—49,500 adult and on any coming contracts. A tion bed capacity for ICE” in 2,500 family beds—from about CoreCivic spokesman said the the next budget cycle. The Trump administration’s 40,000 now, a spokeswoman company—formerly known as Immigrant detention has new push for more federal de- said. Corrections Corporation of become an increasingly impor- tention facilities for immi- Shares in both companies America—is ready to accom- tant source of revenue for pri- grants awaiting asylum hear- rose last month after ICE is- modate the federal govern- vate prison companies since ings or deportation has sued a notice that it may seek ment’s changing needs and the Obama administration, as brightened the outlook for the 15,000 new beds for families. would review the request for the number of detainees grows country’s two largest private An ICE official said it made information. and state prison populations prison operators. the request for information on Last month, CoreCivic CEO decline. ICE uses both private Tennessee-based CoreCivic potential facilities and provid- Damon Hininger told investors companies and local govern- Inc. and Florida-based Geo ers “in anticipation of the po- that “this is probably the most ments to house detainees. Group Inc. had already been tential need to house a large robust kind of sales environ- The share of CoreCivic’s helped by higher federal number of family units” after ment we’ve seen in probably revenue from ICE has risen to spending on Immigration and Mr. Trump ended his policy of 10 years.” In a first-quarter 25% in 2017 from 13% in 2007, Customs Enforcement. Now, separating children at the earnings call in April, Geo while for Geo Group, the share the Trump administration is southern border. So far this Group CEO George Zoley said expanded to 24% last year seeking $2.8 billion in the year, Geo’s shares are up 14%, he expected opportunities for from 10% a decade earlier, ac- 2019 budget year to increase while CoreCivic’s have risen new contracts “as the presi- cording to the companies. The the number of beds in immi- 4.8%, according to FactSet. dent will be asking for a sig- rest comes from operating gration detention centers to Geo declined to comment nificant increase in the deten- federal and state prisons as well as other sources. Private prison operators Judge Blocks U.S. a federal judge in California were engaging in “systematic took a hit in 2016 when the aimed at restricting the separa- detention” in violation of gov- Justice Department’s inspector On Asylum-Seekers tion of families after they cross ernment policy. general found that private the border illegally. Monday’s Judge Boasberg’s order—a prisons were more danger- ruling wasn’t about keeping temporary injunction that ap- ous than government-run fa- A federal judge in Washing- children and parents together plies to five ICE field offices— cilities, prompting the agency ton, D.C., on Monday ruled the but the procedures around de- requires that asylum applicants to announce it would begin Trump administration can’t sys- nying so-called humanitarian be granted an “individualized phasing out contracts for fed- tematically detain asylum seek- parole to asylum seekers. determination” into whether he eral prisons, though not for ers who arrive at the border The American Civil Liberties or she presents flight risk or a ICE detention centers. The with a credible fear of returning Union alleged that the Trump danger to the community. companies disputed the re- to their homelands. administration was locking up A Justice Department port’s findings. The ruling by U.S. District the vast majority of asylum ap- spokesman declined to com- The Trump administration Judge James E. Boasberg plicants during their proceed- ment on the ruling. In court revoked the plan to cut private marked the second time in less ings as a measure to deter briefs, DOJ lawyers said the de- prison use. than a week that a federal mass migration. The civil-rights partment wasn’t violating the Between Oct. 1 and June 17, judge has found the Trump ad- group pointed to a big drop in directive and contended that an the U.S. Border Patrol arrested ministration’s immigration poli- the percentage of asylum seek- alleged lack of compliance with roughly 273,000 people, a 17% cies to likely be unlawful and ers released from immigration the internal policy couldn’t be a increase over the year-earlier ordered changes. custody, arguing the decrease basis for a lawsuit. period, according to govern- Last Wednesday’s order by was evidence that officials —Jacob Gershman ment data obtained by The Wall Street Journal. .

A4 | Tuesday, July 3, 2018 PWLC101112HTGKBFAM123456789OIXX ** THE WALL STREET JOURNAL. U.S. NEWS The Dangers of Losing Faith in Democracy tions and dominated by Day, it is worth considering districts for purely partisan coastal elites, was stacked the dangers embedded in benefit, a sin of which both against them. these grievances. A function- parties are guilty. ing democracy depends on For a long stretch in the ince Mr. Trump’s elec- the belief that the system is 1970s and 1980s, Democrats S tion—which, presum- fair, that votes count and that were the ones who benefited ably, proved the system the proper recourse for un- from districts unfairly con- CAPITAL JOURNAL wasn’t rigged against him— happy citizens is the electoral structed to benefit their can- Democrats have been the ones process. If that faith is lost, didates; that was a time By Gerald F. Seib more likely to say the system the chances that citizens will when that party controlled is rigged. They note that resort to other, darker means more levers at the state level twice in the past five general for venting their frustration where new districts are Important as civility in elections Democrats have won go up significantly. drawn. Now the tables have public life is, something even the popular presidential vote “It doesn’t lead to a good turned. Perhaps both sides

more important appears to be yet lost the White House in place if people on both sides MIKE NELSON/EPA/SHUTTERSTOCK can agree that the gerryman- imperiled in today’s charged the electoral college. More- continue to feel this way for California voters cast their ballots last month in the state’s primary. dering process is corrosive political cli- over, they note that, because very long,” says presidential for all. mate: faith in of gerrymandered congressio- historian Michael Beschloss. Frank Luntz, a Republican eryday, ordinary Americans.” Ironically, each party has democracy it- nal districts, the share of American democracy has pollster, is seeing signs of a Three-quarters of Democrats a prominent example to self. House seats they won fell be- flourished because citizens lack of trust in the system, as said they felt that way; al- point to as evidence the sys- During his low their share of the national “had the faith that if you well as deep anger, in focus most six in 10 Republicans tem still works. By his very 2016 presiden- vote total in each of the past wait for a while the system groups with voters he is con- did. presence in the White House, tial campaign, four congressional elections. would, from their point of ducting around the nation. Asked how Americans can President Trump is proof President Don- Now, angry Democrats see view, correct itself. People Sessions with voters from best uplift the country to- that some hidden establish- ald Trump repeatedly told his a Supreme Court unfairly are losing their faith.” both sides of the partisan di- gether, only about one in 10 ment hand isn’t in control. followers the electoral system stacked against them. The There are parallels to the vide now devolve quickly into cited a commitment to vote And among Democrats, was rigged. He declared that Senate denied their presi- current climate. Mr. Beschloss shouting matches, he says. and participate in the elec- last week’s stunning primary the Republican primary sys- dent, Barack Obama, a vote notes that, while the country “A lot of them have now toral process. victory of a 28-year-old new- tem was rigged against him, for his Supreme Court nomi- is in a far different place than just shut out the whole sys- comer, Alexandria Ocasio- that the Democratic primary nee before the presidential it was in 1932, when a deep tem,” he adds. “No one talks ow to turn this Cortez, who felled a Demo- system was rigged, and that election in 2016, while that and potentially destabilizing about elections now. [They H around? For starters, cratic Party power broker in polling places would be same Republican-controlled Depression was settling in, say] we have to take to the the nation needs lead- New York state, is proof that rigged in the general election. Senate now is moving rap- Americans then were voicing streets.” ers who, rather than stoke the simple act of voting is a More broadly, many of his idly to ensure Mr. Trump a similar doubts about the via- Signs of the mood also grievances, show they are powerful way to effect supporters certainly believed vote on his second Supreme bility of both their economic canbeseeninMr.Luntz’s committed to making the po- change. Rep. Joe Crowley that their own party’s power Court nominee before the and democratic systems. One polling. In a recent survey, litical system fair and effec- had every conceivable con- brokers worked against them 2018 midterm election. of Franklin D. Roosevelt’s ac- 65% of respondents said they tive. They could start with a ventional advantage in that and that the political system, As the nation prepares to complishments, he says, was agreed that “the system in commitment to end the ger- race. The democratic process steered by financial institu- celebrate its Independence restoring faith in it. America is rigged against ev- rymandering of congressional had other ideas. Roberts Becomes Man in the Middle Trump Interviews BY BRENT KENDALL Potential Justices WASHINGTON—Though John Roberts has been chief justice of BY PETER NICHOLAS The names most frequently the United States for 13 years, AND VIVIAN SALAMA cited as front-runners include this fall’s term may see the true Thomas Hardiman of the Third birth of the Roberts Court. WASHINGTON—President U.S. Circuit Court of Appeals With the retirement of Jus- Donald Trump said Monday in Philadelphia; Raymond tice Anthony Kennedy, Chief that he met with four poten- Kethledge, of the Cincinnati- Justice Roberts will be the tial Supreme Court nominees based Sixth Circuit; Brett Ka- new man in the middle on the earlier in the day and planned vanaugh of the District of Co- Supreme Court. He will have to interview “two or three lumbia Circuit; Amy Coney four steadfastly liberal justices more” ahead of the planned Barrett of the Chicago-based on his left and likely four announcement of his decision Seventh Circuit; and another deeply conservative ones to next week. Sixth Circuit judge, Amul his right, including a second Speaking alongside Nether- Thapar. justice appointed by President lands Prime Minister Mark As the search unfolds, the Donald Trump. Rutte at the White House, Mr. White House is treading care- That new ideological math is Trump said the candidates fully when it comes to abor- expected to give the chief justice were “outstanding people, tion rights, an issue that could greater leverage to steer the di- they are really incredible peo- potentially cripple a nominee’s rection of the court than at any ple.” Each of Mr. Trump’s prospects. As a candidate, Mr.

time since the George W. Bush WIN MCNAMEE/ASSOCIATED PRESS meetings lasted about 45 min- Trump stated he wanted “pro- appointee joined it in 2005. Chief Justice John Roberts often has soughttobethe voice of the court, whichhe joined in 2005. utes, White House press secre- life” justices who would vote The chief is the sole justice tary Sarah Sanders said. to overturn Roe v. Wade, the whose role, by tradition, goes whatever happens,” said Wil- liberals’ options for coalition The chief justice, however, The pace of the interviews landmark Supreme Court rul- beyond casting votes and writ- liam & Mary law professor Neal building. also has shown an affinity in underscores the urgency in ing that made abortion legal. ing opinions and extends to Devins. “Being the median jus- Chief Justice Roberts has many circumstances for nar- filling the vacancy created by In a sign of the sensitivities serving as the custodian of the tice and having the power as rarely joined with the liberals in row, incremental rulings that the retirement of Justice An- surrounding the issue, Ms. court’s role and reputation. chief justice to assign opinions, 5-4 cases, though he did so fa- pick up more votes, and legal thony Kennedy. The opening Sanders declined to answer a Chief justices have often shown you’re really running things.” mously in 2012 when that observers say his strong sense gives Mr. Trump his second question Monday about concern that the institution not Chief Justice Roberts often lineup upheld the Affordable of stewardship means he won’t nomination to the high court whether the president wants depart too markedly from public has sought to be the voice of Care Act, President Barack want the court to be seen as a and the chance to replace a to see the ruling overturned. sentiment or issue opinions that the court, especially on cases of Obama’s signature health-care partisan body that decides all swing vote with a reliably con- “I’m not going to get into any are strongly at odds with presi- particular gravity, such as last law. That coalition also joined of the nation’s big legal issues servative judicial voice, one specifics,” she said, adding dential or congressional actions. week’s ruling upholding Mr. together in a cellphone privacy on 5-4 votes. who could set a new direction that Mr. Trump has chosen not That puts Chief Justice Rob- Trump’s travel ban. decision last month. “Roberts is a pretty cabined for the court on abortion to ask candidates their views erts in a highly unusual posi- For the 2017-18 session, and cautious opinion writer, rights, gay rights and other is- on specific cases including Roe tion: a chief who also will be a Chief Justice Roberts was in the and that might be due to him sues that have divided the v. Wade. swing vote. majority in 93% of the court’s being chief,” said Mr. Huq. country. As the White House girds University of Chicago law rulings, according to data com- Legal observers say Chief Justice Roberts made Mr. Trump said he intended for a tough confirmation bat- professor Aziz Huq said it has piled by SCOTUSblog, surpass- he won’t want the his first public remarks since to reach a decision on the Su- tle, officials are setting up a been 80 or 90 years since the ing Justice Kennedy for the top the Kennedy retirement on Fri- preme Court nominee this war room. chief justice was also the spot for the first time in years. court to be seen as a day, appearing at a regional le- week and announce the deci- Raj Shah, lead deputy White court’s median justice. “It cre- But the chief justice also has partisan body. gal conference for a question- sion Monday. The nominee House press secretary, will ates some interesting ques- been spectator to a handful of and-answer session with a will require confirmation in leave that role to oversee com- tions, because the chief justice the court’s most notable deci- longtime federal appeals court the Senate, where the Republi- munications and strategy on is supposed to be institutionally sions, cases in which Justice judge, J. Harvie Wilkinson. cans have a 51-49 majority. the high-court pick and help minded,” he said. “We evaluate Kennedy spoke for the court af- More often, the chief justice Judge Wilkinson asked Chief As Mr. Trump interviews coordinate messages with al- chief justices in terms of the ter forging a majority with his has joined with other conserva- Justice Roberts whether he felt prospective nominees, he is lies on Capitol Hill, the White performance of the court.” liberal colleagues to recognize a tives to move the law distinctly the weight of his office in ways seeking a broader sense of House said. Justin Clark, who Most notably, it raises the constitutional right to same-sex to the right. He has been part of that don’t apply to his col- their background, some advis- directs the Office of Public Li- question of how often Chief marriage and to preserve affir- major decisions weakening cam- leagues. “I think there is some- ers said. aison, will oversee outreach to Justice Roberts will choose to mative action. paign finance laws, public-sector thing to that, yes,” the chief jus- Leonard Leo, an outside ad- outside constituency and in- be the leader of the court’s That is far less likely to hap- unions and Jim Crow-era voting tice responded. “As the chief viser to Mr. Trump on judicial terest groups. newly dominant conservative pen now. Because he is more rights protections. His court has justice, I feel some obligation to selections, said in an inter- White House counsel Don wing versus seeking to craft a conservative than Justice Ken- strengthened gun rights and is- be something of an honest bro- view: “Character is something McGahn will lead the search broader coalition of justices. nedy, Chief Justice Roberts is sued a long string of rulings ker among my colleagues. I really important, and presi- for the nominee and head the “For all sorts of reasons, unlikelytobeinplaytothe that have been favorable to cor- don’t necessarily go out of my dents are in a particularly “overall confirmation process,” Roberts is going to be central to same degree, narrowing the porations and employers. way to pick fights.” good position to gauge that.” Ms. Sanders said.

bund 2016. Helping along this ners. ADT, for example, has 2017 and a more-than-tenfold IPOs Come year’s rush: Companies are no fallen nearly 40% from its IPO Deal Deluge increase from 2016’s volume, longer worried they may have price as of Friday’s close. The amount of money raised in U.S. IPOs is the fourth-highest according to Dealogic. to go public at valuations be- Bankers reaped $1.2 billion since 1995. The largest IPOs in the sec- Roaring low those they had achieved in in fees from U.S.-based IPO cli- ond half of 2018 are expected the private markets, as a dis- ents in the first half of this IPO volume through July 2 of each year All other IPOs to come out of China. Many of connect has largely been year, according to Dealogic, $70 billion Technology IPOs the largest Chinese companies Back erased between public and pri- down slightly from 2017 as the planning to debut in 2018, in- vate-market valuations. equity capital markets indus- 60 cluding Meituan Dianping and ContinuedfromPageOne Companies that have gone try has faced continued fee Xiaomi Corp., will do so in hailing firm Lyft Inc., recently public in the U.S. this year are pressure from companies look- 50 Hong Kong as its stock ex- raised $600 million from mu- trading, on average, 23% above ing to cut costs. Among the change changed its listing tual fund and hedge-fund in- their IPO price, and technology top three market-share holders 40 rules this year to allow com- vestors including Fidelity In- companies have done particu- this year for U.S.-listed IPOs panies with dual-class shares vestments. larly well, up 52% above their are Bank of America Corp., 30 to list there. But for the remainder of IPO price, according to Dea- Goldman Sachs Group Inc. and An exception is Tencent the year, bankers and lawyers logic data through Friday’s Credit Suisse Group AG. 20 Music Entertainment Group, expect the rapid IPO pace to close of trading. Meanwhile, The surge in IPOs hasn’t China’s largest music-stream- 10 continue, including many mul- the S&P 500 rose less than 2% dented private-market activity. ing company, which is ex- tibillion-dollar technology for the year, and the tech-heavy Many companies continue to pected to go public in the U.S. 0 companies going public in the Nasdaq Composite climbed raise vast sums there. That and is expected to be one of U.S. Among them: Sonos Inc.; 8.8% during the same period. companies are tapping both pri- 1995 2000 ’05 ’10 ’15 ’18 the largest IPOs of the year, Upwork; SurveyMonkey; and “This year we’re finding the vate and public markets defies Source: Dealogic THE WALL STREET JOURNAL. according to people familiar Eventbrite Inc. investor demand for technol- expectations that companies with the deal. “Our global IPO pipeline is ogy IPOs is literally the high- would largely turn to IPOs once mark event for a company that quisitions and for future capi- While 2018 could be a near- stronger now than it’s been est we’ve ever seen both in private funding tightened. Ac- goes far beyond just raising tal-raising. record year, bankers and law- since the financial crisis,” said terms of the quantity and tivity so far this year has made capital,” said Mr. Namburi. Tech IPOs, mostly software yers are betting activity could Evan Damast, global head of quality of interest,” said it clear both markets can thrive Employees of public compa- companies, have been going continue to accelerate from equity and fixed income syndi- Madhu Namburi, JPMorgan in tandem, at least for now. nies, he said, have a clear strong, raising $12.2 billion in there. “There’s a real chance cate at Morgan Stanley. Chase & Co.’s head of technol- “Private markets primarily sense of the wealth they have 28 deals in the first half of that 2019 could be even stron- IPO issuance began to pick ogy investment banking. facilitate companies to raise earned, and public companies 2018, nearly double the vol- ger than 2018,” said JPMorgan up pace last year after a mori- Not all IPOs have been win- capital. A public IPO is a land- have a currency to use for ac- ume from the same period in Chase’s Mr. Namburi. .

THE WALL STREET JOURNAL. **** Tuesday, July 3, 2018 | A5 WORLD NEWS Mexican Voters Snub the Establishment López Obrador’s win “The results are cata- Electoral Earthquake strophic for the PRI,” said deals unprecedented Legacy political parties take a Roger Bartra, a renowned setbacks to Mexico’s beating amid a backlash against Mexican sociologist. “I don’t the establishment. think the party will disappear, traditional parties because it still has a powerful Morena-PT-PES (López Obrador) machinery, but it faces un- BY SANTIAGO PÉREZ PAN-PRD-MC (Anaya) precedented challenges.” AND JOSÉ DE CÓRDOBA The broader opposition is so Independent/Non-Affiliated weakened that some analysts MEXICO CITY—Mexico’s PRI-PVEM-Panal (Meade) speculate that Morena could be- election was a tsunami for the come Mexico’s next hegemonic Lower House (500 seats) country’s traditional parties, party, exerting a political power which suffered unprecedented Projected* 50% similar to the one the PRI exer- setbacks at the hands of An- 306 seats 131 63 cised from 1929 to 2000. drés Manuel López Obrador “It’s a paradox that the Previous and the Movement for National ones who voted for López Ob- Regeneration the leftist leader 60 5180 255 rador to put an end to the PRI founded just four years ago. are really voting to construct Like Brexit and the presi- Senate (128 seats) another PRI,” said José Anto- dential election of Donald Projected* nio Crespo, a political analyst Trump, Mexico’s historic vote at CIDE university in Mexico is the latest example of the 70 seats 38 20 City. “This could mean a set- backlash against the political Previous back to Mexico’s democracy.” establishment that has swept Like the PRI, Morena is a 198 41 60 through Europe and the U.S. pragmatic “big tent” including amid eroding trust in tradi- all sorts of political actors *Preliminary result with 72.2% of the vote tional political parties. counted. with clashing beliefs, including Mr. López Obrador’s victory Sources: EMPRA (previous); an alliance with the Social En- marks an end to the political RONALDO SCHEMIDT/AGENCE FRANCE-PRESSE/GETTY IMAGES Mexico's electoral agency INE (projected) counter party that has conser- party system that dominated Andrés Manuel López Obrador took more than half of the vote in a field of four candidates. THE WALL STREET JOURNAL. vative views on issues like Mexico over the past three de- same-sex marriage and abor- cades—a three-party system of skinned in Spanish. 30 percentage points over his majority in Congress. ity, making it only the fifth- tion, according to Jorge Cha- the centrist Institutional Revo- “This is the end of the par- closest rival and took more For the ruling PRI, the once- largest party in Congress. The bat, a professor at the Univer- lutionary Party (PRI), the con- ties as we have known them,” than half of the vote in a field hegemonic party that ruled PRI ran in a coalition with sity of Guadalajara. servative National Action said Jesús Silva-Herzog, a of four candidates—is the wid- Mexico as a single party state other parties. “There’s room for every- Party (PAN) and the center-left leading political commentator est since Miguel de la Madrid from 1929 to 2000, the result The PRI’s tally of governor- body—the left, the right, those Party of the Democratic Revo- and scholar. “The legacy par- of the PRI won the 1982 elec- was a disaster. The number of ships has also fallen steadily, with a history of corruption, lution (PRD). His new party is ties have their work cut out for tion, before Mexico became a PRI representatives in the 500- from all 31 states and Mexico those not corrupt,” said Mr. known as Morena, an acronym them in remaking themselves full democracy. member lower house is ex- City in 1987 to 12 after Sun- Chabat. “This is very clear— that also alludes to the coun- and reassessing their identity.” Mr. López Obrador will also pected to drop from 204 to 45, day’s vote, in which it lost Ja- it’s back to the future.” try’s patron saint, the Virgin Mr. López Obrador’s land- be the first Mexican president according to projections from lisco state in the west and Yu- —Juan Montes of Guadalupe, and means dark- slide—he won by more than since 1997 to have an outright the country’s electoral author- catán state in the southeast. contributed to this article.

Jason Marczak, a fellow at the Vote Resets Atlantic Council who special- Disparate Stories, lionaire who built his fortune in apartment in a lower-middle- izes in Latin America. “He will real estate and lives an opulent class neighborhood in the capi- work with the U.S. on areas of Similar Approaches lifestyle. tal. Nations interest when it benefits Mex- Define Leaders The other was born in an Despite coming from differ- ico. I do not see him acquiesc- impoverished rural state, once ent ends of the political spec- ing to U.S. demands when it’s lived for five years in a trum, they also share some On Trade not in Mexico’s interest.” President Donald Trump swamp to help Chontal Indi- characteristics. Some of the same global and Mexico’s president-elect, ans, and is famous for his fru- Both have a populist streak, ContinuedfromPageOne forces that led to Mr. Trump’s Andrés Manuel López Obra- gality. are skilled marketers and have less accommodating to victory helped propel Mr. López dor, have some stark differ- On Sunday night, Mr. López a knack for pulling out the Trump’s demands and his Obrador. Like the U.S. president, ences and surprising similari- Obrador was driven in a Volks- memorable political phrase or abrasive comments about Mex- Mr. López Obrador wants to fo- ties that may color the wagen Jetta to the center of insult. ico and Mexicans and to the cus on the domestic economy. relationship. Mexico City to give his victory Both are known for being extent he stands up to Trump, He is a proponent of “México They have radically different speech. thin-skinned and can lash out he will have a lot of support.” First,” said Andrew Selee, presi- life stories—one a New York bil- He lives in a two-bedroom at the press when criticized.

Mr. López Obrador’s team EDGARD GARRIDO/REUTERS dent of the Washington-based will inherit the renegotiation of Mexico’s president-elect, Migration Policy Institute. Nafta, which has stalled re- Andrés Manuel López Obrador Both men rode to victory on cently on U.S. demands that it a wave of popular anger at the include provisions such as a tries has exploded since Nafta political establishment. While “sunset clause” that requires went into effect in 1994. Mr. Trump, a brusque and the deal to be renewed every Last year, U.S. businesses bombastic 72-year-old billion- five years. sent $243.3 billion worth of aire, promised to drain Wash- In some ways, the new Mex- merchandise to Mexico. For ington’s “swamp,” Mr. López ican team could prove more Mexico, the U.S. is by far its Obrador, 64, a silver-haired r. flexible. Mr. López Obrador has most important export mar- social activist with a messianic signaled his administration will ket, as well as a major source tendency, railed against Mex- be more receptive to Washing- of intelligence and aid in coun- ico’s “mafia of power,” what ton’s push to raise wages in ternarcotics operations. he says is a corrupt clique who tr. Mexico—a key goal of both Mr. Over the past three de- keep Mexicans in poverty. Trump and Democratic law- cades, Mexican presidents Hector Vasconcelos, Mr. Ló- makers in Washington. have largely governed in step pez Obrador’s pick for foreign On the flip side, the new with their counterparts in minister, said in an interview trngr. Mexican leader’s nationalist Washington. They have Monday the new president impulses could clash with Mr. opened the Mexican economy wants to keep close ties with Trump’s “America first” policy. to U.S. investment, helped de- the U.S., but added that Mex- Mr. Trump, for instance, has port growing numbers of Cen- ico will look to deepen ties repeatedly threatened tariffs tral American migrants headed with the rest of the world. Meet the all new SimpliSafe. in industries like cars made in for the U.S. border and worked “For the past three decades, It’s smaller, faster, stronger than ever. Mexico as a way to pressure to stanch the northward flow we’ve been excessively focused Mexico in the trade talks. of illegal drugs. on the U.S., on the north in gen- Engineered with a single focus: to protect. “Any of these arm-twisting Mr. López Obrador, how- eral,” he said. “While we won’t tariffs—whether the threat of ever, is more like Mexican lose sight that the relationship With sensors so small they’re practically invisible. auto tariffs or the imposition leaders during a period of with the U.S. is vital, there is a Designed to disappear into your home of auto tariffs—could be tense relations between the whole world out there, includ- enough to make Mexico under countries in the mid-20th cen- ing Europe and Asia and South And blanket it with protection. [Mr. López Obrador] walk tury, when Mexico charted a America. We’d like to deepen More than easy to use—downright delightful. away,” said Monica de Bolle, foreign policy independent of our economic and political ties senior fellow at the Peterson the U.S. Born and raised in a with them, too.” All at prices that are fair and honest. Institute for International Eco- southern Mexican state, Mr. With Mr. López Obrador in nomics think tank. López Obrador has rarely trav- charge, the U.S. will likely face a It’s home security. Done right. The stakes are high for both eled. He speaks no English. Mexican government less inter- countries. Mexico has long The president-elect, widely ested in cooperating on security been the No. 2 destination for known by the initials AMLO, and controlling immigration. U.S. exports, after Canada. “believes in the power of Mex- —Robbie Whelan Trade between the two coun- ico and Mexico’s destiny,” said contributed to this article. WORLDWATCH

IRAN Diplomat Among Four Held in Alleged Plot European security services ar- rested four people, including an Iranian diplomat, for allegedly planning to bomb an annual gathering of Iranian opposition groups outside Paris on Saturday and are examining whether Teh- ran ordered the attempted attack. Rudy Giuliani, an attorney for President Donald Trump, was

one of several high-profile U.S. IAN LANGSDON/EPA/SHUTTERSTOCK critics of Tehran who spoke at FLIGHT RISK: French investigators transported an Alouette II the meeting at a conference helicopter allegedly abandoned by infamous bandit Redoine Faïd and center. suspected accomplices after his escape from Réau Prison on Sunday. The involvement of the Ira- nian government would mark an insist on zero imports by a Nov. escalation of Tehran’s militancy U.S. Eases Scope 4 deadline. outside the Middle East. Of Sanctions Threat Oil prices rose to multiyear Right now get free shipping at The arrests came days before highs last week after U.S. officials SimpliSafe.com/ws Iranian President Hassan Rou- The Trump administration will signaled the administration would hani is set to travel to Switzer- consider requests for waivers act to cut Iran exports faster than land and Austria, in a visit criti- from economic sanctions against expected and said all countries cal for the country’s relationship Iran on a case-by-case basis, a and companies that continued pur- with Europe. senior State Department official chasing Iranian oil risked sanctions. —Matthew Dalton said, a step back from threats to —Jessica Donati . A6 | Tuesday, July 3, 2018 THE WALL STREET JOURNAL. IN DEPTH

sounded like “someone heavily from a fascination with breath- retreat from the surrounding This Park’s breathing and burping wherever ing. Her sister was diagnosed government buildings, office you go in or near the park.” at 35 with a rare lung disease, towers and traffic-clogged roads The breathing exhibit, which Ms. Carel said, and watching leading to the Brooklyn Bridge. Odd Noises runs through July 8, involves her adjust to the condition It is a popular site for public art six speakers along the park’s sparked the artist’s interest in and in recent years has hosted walkway leading up to City examining disabilities associ- other sound-based installations. Are Art Hall. For 16 minutes roughly ev- ated with respiratory illness. In 2016, a local nonprofit sent ery half-hour, the speakers af- She brought New Yorkers singers in to serenade visitors. ContinuedfromPageOne fixed to light posts unleash suffering from asthma and other That year, the park also installed sounds, though not alarmed, sounds of labored inhales and respiratory problems into a stu- an audio piece in which four because this is New York City.” exhales, gargles and hisses. dio, where she and a recording loudspeakers played a recording Discovering that the noises They are active every day be- engineer created a soundtrack of a flock of starlings. were of people with respiratory tween 10 a.m. and 9 p.m. from their inhales and exhales. Two park regulars, Essence problems, she said: “Huh, OK…I Each speaker emits a differ- Her final product, she said, Franklin, 25, and fellow New

guess I respect the art.” ent sound at any given mo- STEVE REMICH FORlayered THE WALL STREET JOURNAL those breathing record- York municipal employee Mary The New York City Depart- ment, creating the effect of be- A pedestrian in Manhattan’s City Hall Park reacts to breathing ings with others from a medi- Van Noy, 34, visiting last week, ment of Parks & Recreation said ing surrounded by people sounds, an art installation that intrigues—and befuddles—visitors. cal-electronics company that still hadn’t settled on what the it has received three formal breathing simultaneously. taped patients with emphy- sounds were, despite having lis- noise complaints since the in- Parks-department spokes- the city, eventually realized the own conclusions. “We don’t sema, bronchitis, chronic ob- tened on other days. “It sounds stallation opened May 31. One, woman Maeri Ferguson said sound was intentional and want to be overly didactic,” she structive pulmonary disease different every time we’re here,” from a person identifying as a the exhibit doesn’t violate city found a small sign describing an said, “as with any piece of art.” and other illnesses to demon- Ms. Van Noy said. “I thought it nearby resident, took umbrage rules about amplified sound “immersive, breathing, sound- Joseph Greenwood, 18, didn’t strate its digital stethoscope. was a dinosaur at first.” with the “obnoxious noises.” and was approved by a commu- scape” offering “a rich sensory think he was hearing art when a The artist acknowledged Ms. Franklin said she heard “People go to the park to nity board in lower Manhattan. journey through the park while speaker wheezed. “I heard this park visitors may find the ex- rattlesnakes, then birds. “We rest and relax. Not hear these A pug on a walk last week raising important questions sound from the other side of hibit “surprising,” particularly like to play the guessing game.” noises,” the person wrote. “Just was so startled by a sudden about air quality and wellness.” the park,” said the tourist from at quieter times of the day. One thing they hadn’t because it is considered Art whoosh above that he skittered He left still unsure what he’d Florence, S.C. “So I came to in- “Unfortunately, it’s not possi- guessed was labored breathing. doesn’t mean this is the right across the sidewalk, seeking heard. vestigate.” His first thought was ble to make something everyone Told it was recordings of venue for it.” cover under a bench. Only after Jennifer Lantzas, public-art that the park was trying to can connect with or enjoy,” she respiration, Ms. Van Noy said: Many more react on social coaxing was the leashed pug coordinator for the parks de- scare away pigeons; then he said. “I’m not interested in an- “I guess it’s just become a media. One city resident persuaded to resume his stroll. partment, said her agency likes wondered if it was broadcasting tagonizing, though some artists quirky aspect of this park. I tweeted that he hadn’t been Signs around the park leave to provide some guidance, such a recording of an ultrasound. are. I was interested in involving don’t really like day-to-day pre- able to sit in the park in June much to conjecture. Mr. Sandín, as signage, at exhibits but Ms. Carel, the 43-year-old collaborators and community.” dictability, so it’s kind of nice to because the installation 40, a former composer living in wants visitors to draw their artist, said the exhibit emerged The 8.8-acre park serves as a be surprised.”

How Data Miners See Your Email ference, which it shares with Email the users. Email data collectors use software to scan millions of messages a day, looking for clues Earny had a partnership with about consumers that they can sell to marketers, hedge funds and other businesses. Return Path, which connected Inboxes Get its computer scanners to Ms. Hereareafewthings Forghani’s email and began col- lecting and processing all of the they look for: Scanned new messages that arrived in 1) SUBJECT her inbox. Ms. Forghani says ContinuedfromPageOne 1 she didn’t read Earny’s privacy Berner, the company’s CEO. Several subject lines can be tested to policy closely and has never 7 Letting employees read user see which one gets the most clicks. 2 heard of Return Path. “It is defi- emails has become “common 3 nitely concerning,” she says of practice” for companies that 2) SENDER the information collection. collect this type of data, says 4 Matt Blumberg, Return Senders are assigned reputation Thede Loder, former chief tech- scores based on the likelihood Path’s chief executive, says us- nology officer at eDataSource recipients will read their messages. 5 ers are given clear notice that Inc., a rival to Return Path. He their email will be monitored. says engineers at eDataSource All of Return Path’s partner occasionally reviewed emails 3) RECIPIENT apps mention the email moni- when building and improving Names and email addresses, which toring on their websites, he software algorithms. are replaced by code numbers, are says, and Earny’s privacy policy “Some people might consider linked to demographic information states that Return Path would such as age and location. that to be a dirty secret,” says 6 “have access to your informa- Mr. Loder. “It’s kind of reality.” tion and will be permitted to Neither Return Path nor Edi- 4) MESSAGE TEXT use that information according son asked users specifically to their own privacy policy.” Full sentences are parsed to help whether it could read their software algorithms understand 5) RECEIPT DATA 6) EMAIL SIGNATURES 7) TIME STAMP Oded Vakrat, Earny’s CEO, emails. Both companies say the says his company doesn’t sell or natural written language. Purchase information is collected to Names, numbers and addresses are Tracking when messages are opened practice is covered by their user find trends about average prices and scanned and added to databases, reveals the best times to send future share data with any outside agreements, and that they used Source: email data companies best-selling products. such as apps that help users organize promotions. companies. Earny users can opt strict protocols for the employ- THE WALL STREET JOURNAL. their contacts. out of Return Path’s email mon- ees who read emails. eData- itoring, he says. Source says it previously al- lowed employees to read some email data but recently ended Personal messages that practice to better protect Return Path says its comput- user privacy. ers are supposed to strip out Google, a unit of Alphabet personal emails from what it Inc., says it provides data only sends into its system by exam- to outside developers it has vet- ining senders’ domain names ted and to whom users have ex- and searching for specific plicitly granted permission to words, such as “grandma.” The access email. Google’s own em- computers are supposed to de- ployees read emails only “in lete such emails. very specific cases where you In 2016, Return Path discov- ask us to and give consent, or ered its algorithm was mislabel- where we need to for security ing many personal emails as purposes, such as investigating commercial, according to a per- a bug or abuse,” the company son familiar with the matter. said in a written statement. That meant millions of personal This examination of email messages that should have been data privacy is based on inter- deleted were passing through to views with more than two Return Path’s servers, the per- dozen current and former em- son says. ployees of email app makers To correct the problem, Re-

and data companies. The lati- DAVID PAUL MORRIS/BLOOMBERGturn NEWS Path assigned two data an- tude outside developers have in Attendees at a Google conference in May for outside developers of apps for Android, Gmail and other Google products. alysts to spend several days handling user data shows how reading 8,000 emails and manu- even as Google and other tech Nearly two-thirds of all active had employees review emails droves. In 2014, Google said it called an application program- ally labeling each one, the per- giants have touted efforts to email users globally have a with their own eyes. would stop scanning Gmail in- ming interface, or API. When son says. The data helped train tighten privacy, they have left Gmail account, according to Google said it manually re- boxes of student, business and Gmail users open one of these the company’s computers to the door open to others with comScore, and Gmail has more views every developer and ap- government users. In June of apps, they are shown a button better distinguish between per- different oversight practices. users than the next 25 largest plication requesting access to last year, it said it was halting asking permission to access sonal and commercial emails. Facebook Inc. for years let email providers combined. The Gmail. The company checks the all Gmail scanning for ads. their inbox. If they click it, Return Path declined to com- outside developers access its data miners generally have ac- domain name of the sender to Meanwhile, Google in 2014 Google grants the developer a ment on details of the incident, users’ data. That practice, cess to other email services be- look for anyone who has a his- started promoting Gmail as a key to access the entire con- but said it sometimes lets em- which Facebook has said it sides Gmail, including those tory of abusing Google policies, platform for developers to le- tents of their inbox, including ployees see emails when fixing stopped by 2015, spawned a from Microsoft and Verizon and reads the privacy policies verage the contents of users’ the ability to read the contents problems with its algorithms. scandal when the social-media Communications Inc.’s Oath to make sure they are clear. “If email to develop apps for such of messages and send and de- The company uses “extreme giant this year said it suspected unit, formed after the company we ever run into areas where productivity tasks as scheduling lete individual messages on caution” to safeguard privacy one developer of selling data on acquired email pioneer Yahoo. disclosures and practices are meetings. A new Gmail version their behalf. Microsoft also of- by limiting access to a few engi- tens of millions of users to a re- Those are the next two largest unclear, Google takes quick ac- launched this spring adds a link fers API tools for email. neers and data scientists and search firm with ties to Presi- email providers, according to tion with the developer,” a next to inboxes to a curated Return Path, based in New deleting all data after the work dent Donald Trump’s 2016 cam- comScore. spokesman said. menu of 34 add-ons. York, gains access to inboxes is completed, says Mr. Blum- paign. The episode led to Oath says access to email Google says it lets any user Google says apps make Gmail when users sign up for one of berg. renewed scrutiny from lawmak- data is considered “on a case- revoke access to apps at any more useful. Turning Gmail into its apps or one of the 163 apps At Edison Software, based in ers and regulators in the U.S. by-case basis” and requires “ex- point. Business users of Gmail a platform emulates Microsoft’s offered by its partners. Return San Jose, Calif., executives and and Europe over how internet press consent” from users. A can also restrict access to cer- Windows and Apple Inc.’s Path gives the app makers soft- engineers developing a new fea- companies protect user infor- Microsoft spokeswoman says it tain email apps to the employ- iPhone, which attracted outside ware tools for managing email ture to suggest “smart replies” mation. is committed to protecting cus- ees in their organization, the developers to make their soft- data in return for letting it peer based on emails’ content ini- There is no indication that tomers’ privacy and that its company said, “ensuring that ware more useful to corporate into their users’ inboxes. tially used their own emails for Return Path, Edison or other terms of use for developers pro- only apps that have been vetted users. Return Path’s system is de- the process, but there wasn’t developers of Gmail add-ons hibit accessing customer data and are trusted by their organi- signed to check if commercial enough data to train the algo- have misused data in that fash- without consent, and provide zation are used.” emails are read by their in- rithm, says Mr. Berner, the CEO. ion. guidelines for how data can and Google has contended with tended recipients. It provides Two of its artificial-intelli- can’t be used. Neither com- privacy concerns since it Data-mining customers a dashboard where gence engineers signed agree- pany’s privacy or developer pol- launched Gmail in 2004. The companies use free they can see which of their ments not to share anything Data mining icies mention allowing people company’s software scanned marketing messages reached they read, Mr. Berner says. For companies that want to see user data. email messages and sold ads apps to get users to the most customers. Then, working on machines that data for marketing and other Google’s developer agree- across the top of inboxes re- give up email access. Marketers can view screen- prevented them from down- purposes, tapping into email is ment prohibits exposing a lated to their content. That shots of some actual emails— loading information to other attractive because it contains user’s private data to anyone year, 31 privacy and consumer with names and addresses devices, they read the personal shopping histories, travel itiner- else “without explicit opt-in groups sent a letter to Google stripped out—to see what their email messages of hundreds of aries, financial records and per- consent from that user.” Its co-founders Larry Page and Google doesn’t disclose how competitors are sending. Return users—with user information sonal communications. Data- rules also bar app developers Sergey Brin saying the practice many apps have access to Path says it doesn’t let market- already redacted—along with mining companies commonly from making permanent copies “violates the implicit trust of an Gmail. The total number of ers target emails specifically to the system’s suggested replies, use free apps and services to of user data and storing them in email service provider.” Google email apps in the top two mo- users. manually indicating whether hook users into giving up access a database. responded that other email pro- bile app stores, for Apple’s iOS Navideh Forghani, 34 years each made sense. to their inboxes without clearly Developers say Google does viders were already using com- and Android, jumped to 379 last old, of Phoenix, signed up this Mr. Berner says he believes stating what data they collect little to enforce those policies. puters to scan email to protect year, from 142 five years earlier, year for Earny Inc., a tool that Edison’s privacy policy covers and what they are doing with it, “I have not seen any evidence of against spam and hackers, and according to researcher App compares receipts in inboxes to this practice by telling users the according to current and former human review” by Google em- that showing ads helped offset Annie. Most can link to Gmail prices across the web. When company collects and stores employees of these companies. ployees, says Zvi Band, the co- the cost of its free service. and other major providers. Earny finds a better price for personal messages to improve Gmail is especially valuable founder of Contactually, an While some users com- Almost anyone can build an items its users purchase, it au- its artificial-intelligence algo- as the world’s dominant email email app for real-estate agents. plained the ads were creepy, app that connects to Gmail ac- tomatically contacts the sellers rithms. Edison users can opt service, with 1.4 billion users. He says Contactually has never people signed up for Gmail in counts using Google’s software and obtains refunds for the dif- out of data collection, he says. .

THE WALL STREET JOURNAL. **** NY Tuesday, July 3, 2018 | A6A GREATER NEW YORK Taxi Group Proposes a Minimum Wage BY KATIE HONAN during peak usage times. this report and believe many of taxi medallion drivers com- wide minimum wage is $15 an shield affixed to a car that gives The new recommendation the assumptions made about plained of low wages due to a hour for companies with 11 or the driver the right to pick up A study commissioned by would require ride-hailing our industry are oversimplified proliferation of ride-hailing more employees. street hails in certain parts of New York City’s Taxi and Lim- companies to make up the dif- to the point of flawed,” he said. apps and an explosion in the Meera Joshi, the commis- the city. Other drivers can only ousine Commission recom- ference if their drivers don’t number of drivers on city sioner for the TLC, said the respond to bookings, whether mends setting a minimum wage make a minimum of $17.22 an roads. Economists from the study is important in finding over the phone or via an app. for for-hire drivers working for hour during their shifts. Es- Center for New York City Af- ways to improve working condi- Advocates for taxi medallion ride-hailing app-based compa- tablishing that minimum wage Under the proposal, fairs at The New School and the tions for thousands of drivers. drivers say they want further nies like Uber in an effort to ad- would increase an individual the city would Center on Wage and Employ- “Getting feedback on the regulation to curb the number dress complaints of low pay in driver’s earnings by an aver- ment Dynamics at the Univer- analysis of our proposal is es- of for-hire drivers who rely on the industry. age of 22.5%, according to the establish a minimum sity of California, Berkeley, sential to inform upcoming pol- hailing apps. Under the proposal, the city study. Drivers would make an rate of $17.22 an hour. wrote the study. icy-making on driver pay by “The only way forward is to would establish an hourly mini- average of $6,300 more each The authors found that de- TLC and City Council,” she said look at the industry holistically mum rate of $17.22 for the year. spite promises of independence in a statement. and implement one set of policy 80,000 drivers working for Josh Gold, a spokesman for and a steady paycheck, drivers There are more than solutions that will help drivers companies like Uber and Lyft. Uber, said the proposal could If the study’s proposal is im- working for these apps struggle 600,000 trips daily on ride-hail- in every sector,” Bhairavi Desai, Currently, these drivers get a hurt riders with higher fares plemented, it would be the first financially. ing apps—which is twice as the executive director of the base rate for each fare, plus pay and limit transportation op- of its kind in the U.S. The majority of app-based many rides as taken in medal- New York Taxi Workers Alli- based on the time and distance tions. The TLC commissioned the drivers make less than the cur- lion taxi cabs. ance, said in a statement. of the ride. They can also re- “We are concerned about the study after a City Council hear- rent minimum wage and work The number of New York Hearings on the proposal ceive bonus pay based on other unintended consequences of ing last year on ride-hailing more than 30 hours a week, the City medallion taxi cabs is could come later this summer, factors, including surge pricing implementing the findings in apps where both for-hire and study found. The current city- 13,587. The medallion is a metal according to city officials.

METRO MONEY | By Anne Kadet Life Is Good For Long Island Fishmongers

Alex and alive. It’s a perfect day!” Stephanie Vil- Fishing ranks second only lani enjoy an to logging as the nation’s enviable life. deadliest occupation. They live in a “There’s lots of ways to kill beautiful, se- yourself,” Mr. Villani says. cluded home with a big pool Cruising 4 miles into the on Long Island’s idyllic North Sound from Mattituck Inlet Fork. They set their own work on his 36-foot boat, he met hours and answer to no one. the dawn dragging the wa- They spend two months every ters with his 55-foot net. winter in the Florida Keys. There’s not much to do And how do they pull it while you trawl. “I listen to

off? They fish for a living. Lit- music and twiddle my JOHNNY MILANO FOR THE WALL STREET JOURNAL (3) erally. Their income derives thumbs,” says Mr. Villani, who Alex Villani emptied his haul on the deck of his boat. Below, he steered the vessel during a recent Long Island Sound fishing trip. from their daily catch in the grew up in Manhattan and Long Island Sound, which they started fishing professionally sell through their Blue Moon in 1972 with a $600 clam boat. Fish business at farmers mar- When the net was full, he kets in Brooklyn and Manhat- sprang into action, emptying tan. “It’s not much different his haul of flopping fish onto than how it would be 300 the boat deck. Donning knee- years ago,” Ms. Villani says. pads and gloves, he threw Unlike most local fishing the undersized fish over- operations that eke out a board, along with sea bass meager living selling their worth several thousand dol- catch to wholesalers, the Vil- lars that were off limits due lanis sell direct to the pub- to state quotas. lic—and command a lot Next, he decapitated 45 more for their fish. sand sharks, nesting them on Wholesalers offer about ice, followed by 60 flounder $1 a pound for bluefish, for and 600 porgies. After example. But the Villanis sell breakfast, he trucked his their whole bluefish at the catch to the fillet house to market for $3.50 a pound, be skinned and deboned. Commercial fishing is larly accompany Mr. Villani on The stalls—which each rent Rose on a recent Saturday. and get $8 a pound for blue- Ms. Villani, who is 50, heavily regulated. Thanks to his expeditions. “They’re great for $125 a day—are a bustling The Villanis, who have fish fillet. The downside? It’s spends her days smoking quotas aimed at maintaining company. I so look forward to scene. Customers pepper the sold at the markets for 30 twice as much work. fish for sale at the market, fishery sustainability, New it,”hesaysdryly. Villanis and their eight helpers years, say it’s been a long On a recent Monday, Mr. cleaning the truck and fish York’s harvest—which centers Saturday is the longest day with questions and snap up a road to prosperity. It helps Villani, a burly 66-year-old, tubs and loading fish and ice. largely on Long Island—fell of the week for the Villanis. dozen kinds of fish, ranging that despite growing demand munched a bagel at his “There’s a lot of drudgery from 60 million pounds annu- They load their 24-foot truck from pricey striped-bass fillet for local fish, they see little kitchen table and declared behind the scenes that people ally in the mid-1990s to 30 with 1,200 pounds of fish and at $20.95 a pound to sea robin competition. “A lot of fisher- himself pleased with the don’t see,” says Ms. Villani, million in 2016. Commercial- hit the road at 3:30 a.m. to at $1.50 a pound, along with men don’t want to do what morning’s expedition. “I who is raising an 11-year- fishing permits, meanwhile, make the 100-mile trip to oysters, clams and scallops. we do,” says Ms. Villani. caught a lot of fish in two daughter with her husband. fell 42%, to less than 1,000. markets in Manhattan’s “Their stuff is always “They want to be solitary.” hours,” he said. “You get back, “You’re dirty, you’re wet, Inspectors with the National Tribeca neighborhood and at fresh. It’s the best you can you tie up the boat, you’re you’re smelly. You’re so tired.” Marine Fisheries Service regu- Grand Army Plaza in Brooklyn. buy,” said customer Stephen [email protected] Repair Costs for NYCHA Properties Skyrocket to $31.8 Billion BY KATIE HONAN cently as last year that repairs wasn’t publicly released until thority previously had stated laws, as well as best practices the agency’s 177,666 apartment would cost about $25 billion. Monday, after a Politico New that 19 children had elevated to keep our kids safe and units. And $2.6 billion is needed The New York City Housing But officials said Monday that York story detailed the findings. lead-exposure levels. Lead-paint healthy,” he said in a statement. for architectural and electrical Authority said Monday that it the cost estimate increased by The cost-increase announce- exposure was just one of the “The CDC guidance is clear, improvements in common needs $31.8 billion to fix its de- 27% to $31.8 billion after new ment comes shortly after many failings noted in the fed- and the Health Department has spaces, parks and playgrounds. caying housing stock, an in- inspections of its affordable- NYCHA was put under a fed- eral prosecutors’ investigation. always followed it,” City Hall Deborah Goddard, NYCHA ex- crease of nearly $7 billion from housing apartments revealed eral-monitor program follow- Comptroller Scott Stringer said on Monday. “The reason ecutive vice president for capital previous estimates. crumbling infrastructure. ing an investigation by federal said Monday that he would we are now going above and projects, said the costs ballooned “You can’t escape the enor- The agency reached the new prosecutors that revealed ma- open an investigation into beyond these guidelines is be- due to an aging portfolio and in- mity of the number, or the enor- estimate after inspectors re- jor health and safety violations. NYCHA, the city’s Health De- cause the City has had dramatic flation. A more-competitive con- mity of the unmet gap in the viewed the needs of its 2,413 The city admitted Saturday partment and City Hall con- success in reducing childhood struction market also “stunned” funding,” Stanley Brezenoff, the buildings in 325 developments that hundreds of children under cerning how they responded to lead exposure.” them, she said. NYCHA is com- interim NYCHA chairman, said between 2016 and 2017. The in- 5 years old living in NYCHA lead-paint hazards. “Agencies NYCHA officials said the larg- peting for limited contractor re- at a news conference. spections’ results were compiled apartments had tested positive must be held accountable for est repair cost would be $12.6 sources during the city’s con- NYCHA estimated as re- in a report in March, although it for elevated lead levels. The au- coordinating and following all billion to gut-renovate many of struction boom, officials said.

OYSTER PERPETUAL DATEJUST 36

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A6B | Tuesday, July 3, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK Democrats Vie for Governor Nod New MTA BY JOSEPH DE AVILA nects, who’s a leader, who has a vision of where we want to take Connecticut’s Democratic this state, and the folks over- voters have a stark choice to whelming supported me,” Mr. App Aims make in August’s gubernato- Lamont said in an interview. rial primary. Mr. Lamont, a cable-televi- On one side, there is Ned sion entrepreneur who op- Lamont, a wealthy business- posed the war in Iraq, arrived man from Greenwich whose on the national political scene To Ease Ride claim to fame includes beating when he beat Mr. Lieberman, a former U.S. Sen. Joe Lieber- staunch supporter of the war, man in the 2006 Democratic in the 2006 primary. But he BY PAUL BERGER includes fare payment across primary for U.S. Senate. The ended up losing the general all of its services, “it will give other choice is Joe Ganim, Ned Lamont, center, recently chatted with officials in Connecticut. election to Mr. Lieberman, The Metropolitan Transpor- the MTA’s app a huge leg up who made a stunning political who ran as an independent. In tation Authority launched a and utility” compared with comeback in 2015 when he 2010, Mr. Lamont ran for gov- new website and app called other transit apps. was elected to his sixth term Ned Lamont ernor and lost the Democratic MYmta, giving riders the abil- Already, using the new app, as mayor of Bridgeport after a primary to Mr. Malloy. ity to plan journeys on the a rider could plan a trip from seven-year prison stint for AGE: 64 years old CAREER: Former cable TV Mr. Ganim was Bridgeport’s subway, buses and commuter Long Island to Connecticut on public corruption. executive mayor for five terms before he rail, as well as to see real-time the Long Island Rail Road, the The candidates are vying EDUCATION: Harvard College, was convicted on 16 felonies. service information as they subway and Metro-North Rail- for the chance to succeed out- Yale School of Management POLITICS: Beat Joe Lieber- He returned to politics in 2015 travel. road. Along the way, the trav- going Democratic Gov. Dannel man in the 2006 Democratic and retook the mayoral seat. MTA Managing Director eler could see subway train ar- Malloy, who declined to run FAMILY: Married with two primary for U.S. Senate. Lost Connecticut’s next governor Ronnie Hakim said Monday rival times, service advisories for a third term. Republicans daughters and a son in general election. will face significant fiscal chal- that the new tools are a re- and escalator and elevator are aiming to capitalize on Mr. lenges. The winner will have sponse to calls from riders for outages. Malloy’s poor public-approval RESIDES: Greenwich POSITION: Supports highway to close a budget deficit of “convenient, accurate informa- Soon, the MTA plans to al- rating to pick up a governor’s tolls for commercial trucks. $1.96 billion in the fiscal year tion in a way that I can man- low Paratransit customers to seat in a reliably blue state. that begins in July 2019 and age myself using the devices see when their Access-a-Ride Front-runner Mr. Lamont $2.5 billion the following year. that I carry in my pocket.” vehicle will arrive and, during won the endorsement from the Messrs. Ganim and Lamont The website and app, which a journey, when they should ex- Connecticut Democratic Party, both said they don’t want to are still in test mode, combine pect to reach their destination. as well as support from key raise income taxes to fix the many functions already avail- Democratic allies, including state’s fiscal mess, but haven’t able individually, such as the Connecticut’s AFL-CIO branch, ruled it out. Both want to collect MTA’s subway countdown- and party stalwarts like Sen. sales taxes on online purchases. clock app, Subway Time, and Technology combines Chris Murphy (D., Conn.). Connecticut’s transporta- third-party products such as real-time service Mr. Ganim, who was con- tion system is in need of an Google Maps and the Transit victed in 2003 for granting city overhaul, and both Democratic app. MYmta is available on the information and the contracts in exchange for hun- candidates propose instituting Google Play store and the ability to plan trips.

dreds of thousands of dollars MONICA JORGEhighway FOR THE WALL STREET JOURNAL (2) tolls to help pay for iTunes Store. in cash, entertainment, food Bridgeport Mayor Joe Ganim spoke at a June news conference. it. Mr. Lamont only wants Ms. Hakim stressed that the and home furnishings, peti- commercial trucks to pay tolls, website and app are at an tioned his way onto the ballot. Joe Ganim while Mr. Ganim said he wants early development stage. She The MTA also draws infor- That conviction “is the first out-of-state drivers to pay. encouraged riders to use feed- mation from outside agencies thing people who are not from Both candidates support le- back functions on both to help such as NJ Transit, the PATH Bridgeport think of when they AGE: 58 years old CAREER: Elected mayor of galizing and taxing recre- the MTA improve. “We know rail system, some suburban hear about him,” said Ronald Bridgeport six times. Served ational marijuana and raising that with more customer in- bus systems, the Staten Island Schurin, associate professor in EDUCATION: University of Con- a federal prison term from the minimum wage to $15. put, we can continue to make Ferry and the Hudson River residence of political science necticut, University of Bridgeport 2003 to 2010 for corruption. The Republican playbook it better,” she said. and East River ferries. at the University of Connecti- Law School for November includes tying Beginning later this sum- Nick Sifuentes, executive di- cut. “Nothing is beyond possi- POLITICS: Elected to sixth the Democratic candidate to mer, MYmta will include the rector of transit advocacy bility, but he has a pretty FAMILY: Divorced with three term as mayor in 2015 in Mr. Malloy. There are five Re- authority’s eTix functionality, group Tri-State Transporta- steep hill to climb.” children comeback election. publicans competing in Au- allowing customers on the tion Campaign, worked with Mr. Ganim pleaded not gust’s primary. Long Island Rail Road and the MTA on the new website guilty to the charges. And in RESIDES: Bridgeport POSITION: Supports highway Connecticut’s general election Metro-North Railroad to buy and app during the past cou- 2015 he made a public apology. tolls for out-of-state drivers. could come down to whether tickets. ple of months. He said MYmta Mr. Ganim’s strategy in- more voters are unhappy with After the MTA rolls out a puts New York ahead of other cludes touting his stewardship the last eight years under an un- new fare-payment system be- cities nationally and interna- of Bridgeport—he attracted in- businessman who can’t con- said he and Mr. Ganim attended popular Democratic governor or ginning in 2019, MYmta also tionally in terms of having a vestments from companies nect with average voters. dozens of Democratic town with Republican President Don- would allow riders to pay for single app that combines so like real-estate developer Ex- “Who’s more in touch and committee meetings and fo- ald Trump. “There will be some subway and bus trips. many functions. act Capital and expanded the sensitive to the challenges?” Mr. rums and spoke to hundreds of people in each camp,” Mr. Schu- Jon Orcutt, a spokesman for “I love it,” he said. “I think police force—while painting Ganim asked in an interview. party delegates. “They got to rin said. “Where the greater the research group Transit- other people are going to love Mr. Lamont as an out-of-touch In response, Mr. Lamont see us and figure out who con- number is, I don’t know.” Center, said after the agency it too.” alexa Cooling Off in the Summer Heat

FREE INSIDE THE THE SUMMER ALBA VIGARAY/EPA/SHUTTERSTOCK SWEET RELIEF: Children played in a water fountain Monday in lower Manhattan’s Battery Park as the thermometer hit 95 degrees. More hot, hazy weather is on tap for Tuesday and the Fourth of July. ISSUE GREATERNEWYORKWATCH

THE SEASON’S MOST NEW YORK STATE NEW JERSEY CRIME DECADENT FASHIONS, State Trooper Killed Nuclear Power Plant Police Say Two Dead ELEGANT ESCAPES & In the Line of Duty To Close on Sept. 17 In Murder-Suicide A 29-year-old New York state America’s oldest nuclear Authorities say a man ab- SPECTACULAR HOMES trooper responding to a call power plant will shut down on ducted a woman and then ap- about a suicidal and possibly Sept. 17, but the Oyster Creek parently shot and killed her at a armed man barricaded in his plant near the New Jersey shore New Jersey motel before turn- home near the Pennsylvania bor- will stay right where it is for the ing the weapon on himself. der early Monday was fatally next 60 years. Bergen County prosecutors shot along with the suspect, a Officials with the U.S. Nuclear say police were called just after 43-year-old school principal, offi- Regulatory Commission held a 5 a.m. Monday about a domes- cials said. briefing Monday on shutdown tic violence incident/kidnapping Trooper Nicholas Clark was plans for Oyster Creek, which at a Paterson address. among responders to a 3:30 a.m. opened in 1969. They said Chi- Police found the male sus- 911 call from the estranged wife cago-based Exelon plans to re- pect’s vehicle near the Knights of Steven Kiley, said State Police move the remaining nuclear fuel Inn in South Hackensack and First Deputy Superintendent Chris rods from storage pools and put approached a motel room Fiore. Trooper Clark was fatally them into dry storage within 5½ shortly after 8:30 a.m. Monday. shot during the response, and Mr. years of the shutdown date. After they announced their Kiley was later found dead with a All told, it will cost $1.4 billion presence, officers reported gunshot wound inside the home to shut down the plant; Exelon hearing gunshots and tried to in Erwin, near Corning. currently has $982.1 million of break down the door, then Mr. Kiley was principal of that set aside in a decommis- broke a window and got inside Bradford Central School, which sioning account, NRC officials the room to find the man and has 280 students in grades K-12, said. woman dead. OUT according to the state education Although the plant will stop Authorities said they believe department. producing electricity just before 45-year-old Jose Segura-Mon- TODAY Gov. Andrew Cuomo called summer ends, radioactive mate- tero shot and killed 41-year-old Clark “a stellar trooper with an rial could be on site until the Marcia Fererra and then him- extraordinary record. He had his late 2070s, if not later. self. whole life before him.” He or- A public hearing on Exelon’s The county medical exam- dered flags across the state to decommissioning plans is sched- iner’s office will determine the be flown at half-staff until uled for July 17 in Lacey Town- cause and manner of their

3NYP101 Trooper Clark’s internment. ship. deaths. —Associated Press —Associated Press —Associated Press . THE WALL STREET JOURNAL. Tuesday, July 3, 2018 | A7 LIFE&ARTS SIMON SIMARD FOR THE WALL STREET JOURNAL (2); USA SWIMMING (SOCCER)

FITNESS USA Swimming Flips for Other Sports

BY HILARY POTKEWITZ As more tweens drop swim team, USA Swimming has suck up your life now—they’re the launched ads, left, to attract multisport athletes. Swimmer ones that have really changed.” George Groves, below, also plays soccer and baseball. It’s too early to tell if USA WATCHING HIS teenagers com- Swimming’s gambit will work, pete in a championship swim meet Kathleen but it is drawing interest from in early June, Polo Trejo was sur- Hughes, 46, of some coaches. Brandon Stallings, prised to see USA Swimming ads Providence, R.I., 37, who recently formed a new on large-screen TVs showing kids grew up as an swim club in Jonesboro, Ga., doing other sports. all-or-nothing learned about the FlexSwim pro- The video clips of young swim- swimmer and has gram last month and is consider- mers playing baseball, soccer, la- some regrets. “I ing signing his team up to join crosse and track-and-field and felt I had to quit USA Swimming’s Georgia regional marching in the school band every other sport chapter. caught Mr. Trejo’s attention be- by sixth grade to Mr. Stallings, who grew up in cause most of the competitive focus exclusively nearby Decatur, was on his high- swimmers he knows in California’s on swimming,” school swim team and played in Central Valley—including his she says. Ms. the marching band. In his day job, daughter Alyssa, 18 years old, and Hughes swam for he teaches piano, voice and drum son Matthew, 16—have time only “We know that swimming can be stress on the a Division I col- lessons, but he’s spent years teach- to swim. Other activities fell off perceived as an all-or-nothing type same muscle lege program, but ing swim classes at community once they joined a year-round club of sport, and we know that today’s groups. was determined pools on nights and weekends. His swim team at age 10. families are busier than ever with Mr. Farrell ac- that her children new team, the North Henry County “The tone was, if you’re going to activities,” says Matt Farrell, USA knowledges the not specialize too Dolphins, includes 45 kids ranging be a serious swimmer, swimming is Swimming’s chief marketing officer. campaign carries early. As a pedi- in age from 4 to 14, and most, like all you can do,” recalls Mr. Trejo, “So we were facing a choice: Do we risks. “We’re telling people it’s OK atric nurse practitioner, she’s been him, are African-American. 45. “It was a foreign concept to me, want to fight that culture, or decide to do other sports. We know that following research showing that fo- “I’m trying to develop the love of because growing up I wrestled, I to own it?” even within our own sport, not ev- cusing on just one sport from an swimming here,” Mr. Stallings says. played baseball, I rode my bike— In early June, USA Swimming eryone is going to agree with that,” early age can lead to overuse inju- It hasn’t been easy. Most of the and I didn’t do any of it year-round. launched its new ad campaign he says. “But it’s a real philosophi- ries and burnout in young children. parents didn’t consider swimming Swimming is a different world.” showing young swimmers doing cal shift, and we think it’s the best Ms. Hughes searched for a local “a real sport,” he says, until they His youngest, 11-year-old Amelia, other sports, in a move to position long-term view.” swim club with the “least crazy” saw their kids compete in their didn’t follow her siblings onto the itself as a home for multisport From its headquarters at the practice schedule and coaches that first swim meet. Most of his swim- club team starting blocks. She says athletes and gain back some of the Olympic Training Center in Colo- shared her philosophy. Now, her mers play other sports, including she enjoys soccer, basketball and kids it has been losing. It is rolling rado Springs, USA Swimming daughter Ruby, 14, swims on a year- basketball, soccer, lacrosse, track track too much to give them up. out a new, entry-level membership steers the nation’s competitive round club team but also plays on and football. “She likes swimming, she just program called FlexSwim for youth swim programs. It provides her school’s soccer, swim and la- “This is what I sell them on: doesn’t want to do it all year,” Mr. young swimmers ages 5-18 who educational materials for coaches crosse teams. Her son George, 11, Swimming protects the body,” Mr. Trejo says. want to try competitive swimming and athletes, organizes fundraising swims on the year-round club team Stallings says. “It may not be your It’s become a common refrain as but can commit to only a few days events and runs swimming compe- and plays club soccer and baseball. first sport, but it can propel you to more American tweens opt out of of training a week and two swim titions. It also selects the U.S. Occasionally, events overlap and be better at your first sport.” swim team. From 2013 to 2016, the meets a year. In contrast, tradi- Olympic swimming team. they skip something. He says it is unlikely that his number of competitive swimmers tional training for competitive Nationwide, about 2,900 swim “We chose our teams very care- team would join USA Swimming if in the 10-year-old age group swimmers often means practice clubs belong to USA Swimming. fully and have made swimming they had to maintain an elite club’s dropped by almost 10%, according every day—before school, after Individuals pay an annual member- work for us,” Ms. Hughes says. practice or competition schedule, to USA Swimming, the sport’s gov- school or both, depending on the ship fee of $60 and teams pay a Next season George will advance considering that the families only erning body. While sports leagues age group—plus swim meets many separate club fee of about $150 to to a higher-level soccer team with a recently agreed to increase prac- nationwide are facing overall de- weekends. $200. Benefits include liability in- more demanding schedule, and Ms. tices to three times a week. clines in youth participation, With its new campaign, USA surance coverage, subscriptions to Hughes isn’t sure how the family’s “They’ll get to see the progres- nearly half of the swimmers who Swimming is choosing sides in a swimming publications and access juggling act will go. sion as they gradually get better at quit said they left swimming to national debate about over-spe- to competitions. FlexSwim has a “I actually think swimming is the swimming, and as swimming play other sports. More than 40% cialization in youth sports and lower membership fee of $20 a one sport that hasn’t gotten more makes them better at their other said swim team was too much of a mounting concerns over subjecting swimmer, including the insurance intense since I was a kid,” she says. sports,” Mr. Stallings says. “It’s a time commitment. growing bodies to year-round and other offerings. “It’s soccer and baseball that will joyful thing.”

YOUR HEALTH | By Sumathi Reddy ARE KIDS TAKING TOO MANY SUPPLEMENTS?

MORE AND MORE childreninthe ments, the analysis found, Healthy children and adoles- U.S. are taking alternative dietary largely reflecting the use of multi- cents who eat a balanced diet don’t supplements that have scant vitamins. That rate has held steady need vitamins, experts say. “These proven benefits and could pose over a decade, while the use of al- treatments add complexity and health risks. ternative supplements has jumped. cost to patient regimens with little According to a recent analysis, The analysis, published in the or nothing to gain,” Dr. Alexander the rate of children taking alterna- journal JAMA Pediatrics in June, is says. “Why should children and ad- tive or herbal supplements nearly based on a national survey of PleaseturntopageA10 doubled, to 6.3% from 3.7%, be- more than 4,400 families asking if tween 2003 and 2014. The in- anyone ages zero to 19 had used crease was fueled by melatonin, a dietary supplements in the past hormone used to aid sleep, and 30 days. omega-3 fatty acids, or fish-oil “What this study supplements, which often are underscores is how given to children with attention- commonly dietary deficit/hyperactivity disorder and supplements are autism despite little evidence that used,” says Caleb Alex- they help. ander, co-director of the All told, one-third of children Johns Hopkins Center for and adolescents in the U.S. take Drug Safety and Effectiveness loosely regulated dietary supple- and a co-author of the analysis. SERGE BLOCH . A10 | Tuesday, July 3, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

MY RIDE | By A.J. Baime A Porsche’s Roar Evokes Childhood Memories

Bruce Turkel, a branding consul- tant from Miami, on his 1983 Porsche 911 SC rally car tribute, as told to A.J. Baime. When I was a kid, my dad drove air-cooled Porsches. At the end of the day, I would go down to the end of my street so I could hear the sound of that engine when he came home. He did some rally rac- ing in a Porsche, and to this day, I keepatrophyhewononmydesk. When my oldest daughter grad- uated college, I bought a 2009 Porsche 911. I love it, but it has a water-cooled engine. [Porsche switched from air-cooled to water- cooled engines in the 911 in model year 1999.] The sound is not the same. My Porsche mechanic worked for the mechanic my dad used to go to, and earlier this year, he sent me a note with a picture of this 1983 Porsche rally car replica. He asked, “Is this your next toy?” My immediate thought was that it was too flashy for me. It was owned by a Miami car collector and I decided to take a look. This owner had the car in a big man- cave. When he started the engine, it was the same beautiful song that I remember from the Porsches my dad drove—that air-cooled engine. This Porsche has been built out

by a previous owner as a replica of ANDRIANA MEREUTA FOR THE WALL STREET JOURNAL a Porsche that raced in the Dakar Rally [from Paris to Dakar, Sene- fan. Starting in the 1960s, Mar- Rally cars, road-racing cars, circuit Bruce Turkel, above, with his 1983 Porsche 911 SC rally car tribute, which has gal] in 1978—rally racing like my tini—the Italian vermouth brand— cars. an air-cooled engine that sounds just like the one in his father’s Porsche. The dad did when I was a kid, though sponsored racing cars that soon This Porsche’s air-cooled 3.0-li- car has extra lights, below right, and a distinctive striped paint job that not in Africa. The paint job is in- became known world-wide for ter engine is original and has been recognizes Italian race-car sponsor, Martini. stantly recognizable to any racing their bright-striped paint scheme. rebuilt. In fact, everything in this car has been rebuilt, and the air- conditioner has been upgraded. You need that where I live. Itookdeliveryofthecarjusta few weeks ago. For my first real adventure in it, I left my house at 4 a.m. and drove across the state of Florida through the Everglades. I may have broken the speed limit. As a rally car, it has special lights so you can see everything around you in the dark. Every time I get in this car, I think of my dad. He was my hero, and he would have loved this air- cooled Porsche. —Contact A.J. Baime at Facebook.com/ajbaime.

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The Gateway Arch in St. Louis has undergone a $380 million reconfiguration, including the Museum at Gateway Arch Entry Plaza (right); stagecoach and model in both the ‘Manifest Destiny’ and ‘New Frontiers’ galleries of the museum (below).

persons of color experienced greater oppression.” The expansion of the U.S. raises persistent concerns. “Should the residents of the territory have had a voice in the Louisiana Pur- chase?” “Is acquiring land through warfare justified?” Why celebrate when those setting out westward believed they had a right to “seize land for their own use, even if oth- ers already lived there”?

GATEWAY ARCH PARK FOUNDATION (3) Reaching past such character- izations would require very differ- EXHIBITION REVIEW ent questions. When, in any earlier time, have inhabitants of pur- chased or vanquished territories been consulted about their prefer- ences? When has victory not led to A New Gateway to the West land acquisition and displaced peo- ples? Had any previous confronta- tions between pre-modern cultures and more technically advanced so- BY EDWARD ROTHSTEIN on an airy mezzanine with a ter- cieties unfolded differently, given razzo floor-map of the U.S. marked vastly different understandings of with paths of exploration and set- property, history, rights and law? St. Louis tlement leading from St. Louis, the Instead, everything is seen NEVER HAVING VISITED Eero visitor is led into six galleries de- through contemporary spectacles. Saarinen’s stainless-steel-clad voted to particular themes: the co- America’s failings are treated as Gateway Arch—created as an entry lonial era, Jefferson’s westward vi- singular, not its promise. Look, in in a 1947 architectural competi- sion, the riverfront metropolis, contrast, at the challenge posed by tion, completed here in 1965 and Manifest Destiny, new frontiers, the 1947 architectural competition now the focus of a $380 million re- and the arch’s origins. Each gallery configuring of the surrounding na- offers a major artifact: a covered tional park (including some $220 wagon, say, or a Creole cabin con- million from private sources) and structed using vertical logs. The A monument to the opening of a $176 million visi- exhibits, created by Haley Sharpe American expansion gets tor center and museum in a sub- Design, are deft and clear. terranean space of 150,000 square Unfortunately, the content itself a contemporary feet—I was unprepared for the im- is often ambivalent—for the same transformation. pact it has in person. reasons the Jefferson National Ex- Arches have been typically as- pansion Memorial was renamed the sociated with weighty conquest— Gateway Arch National Park in Feb- recall the Arc de Triomphe—but ruary. Celebrations of “national ex- that led to the arch: Design a this one is ethereal, otherworldly. pansion” are now considered in structure that would “keep alive in Its 630-foot-high frame traces the poor taste: One person’s expansion the present and in the future the path of an equilateral triangle is another’s desecration. And, as we daring and untrammeled spirit” sweeping upward, tilting and know, there were serious deleteri- that “conceived and made possible shrinking as it rises, becoming im- ous effects, particularly on Ameri- the territorial integrity and na- possibly light, almost pulled into In 1935, this waterfront park and eliminates an enormous park- can Indians. tional greatness of the United filigree before returning earth- was created by President Franklin ing garage, cushioning the arch in a So now, instead of celebration States of America.” ward, creating a stunning path of Roosevelt as the Jefferson Na- symmetrical expanse of tamed na- there is much denigration. Exhibits Think how startling it would be reflected light that seems to defy tional Expansion Memorial, thus ture and hidden commerce. A new pose at offering varied views, but to be told that, yes, important as- geometry and confound perspec- honoring President Thomas Jeffer- civic space is created, extending accusations are unanswered. In- pects of American expansion are tive. It has no resemblance to sur- son, who doubled the country’s into the Gateway Arch Museum, dian tribal advocates assert that worth celebrating. That would rounding remnants of industry size with the Louisiana Purchase, which was designed by Cooper Columbus “came and murdered mean affirming the value and dis- and trade. The arch presents an turning St. Louis into a gateway Robertson and James Carpenter our people” or proclaim that be- tinctiveness of American ideals, ideal, altering our perceptions of westward— an idea the arch is Design Associates with Trivers As- cause of land seizures, “America despite earthly failings that can the real. meant to invoke. sociates. legally owns” no more than a “few accompany them. And that, I now In fact, it isn’t the park and the The 91 acres of parkland have Its entrance is a radiant slice acres.” A graphic offers support. see, is the geometric allegory of museum that provide the context just been refined by Michael Van into the earth through which we There is not much to cheer, ei- Saarinen’s arch: It offers an ideal for the arch; it is the arch that Valkenburgh Associates as if restor- are inducted into the history of St. ther, when French and Spanish law with enduring significance in a provides a context for the park ing a vision of the pastoral. The Louis and the settlement of the gave way to U.S. law after the Lou- flawed, less-than-ideal world. and museum. The arch measures park now covers over an interstate West (climaxing with a paid tram isiana Purchase. “Women lost what is seen around it. that once divided it, elevates the trip through the arch’s core, up to many rights,” “enslaved families Mr. Rothstein is the Journal’s What is the result? riverfront to minimize flooding, an observation room). Beginning could be torn apart,” and “free Critic at Large.

Weather TheWSJDailyCrossword| Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. 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Worth Cold El PasoP JacksonJack T-storms heading 100s Mobileb 90s Jacksonville 55 56 57 58 7 Major musical AustinAAti 50s Houston Stationary work 43 Stole Snow 59 60 61 60s Newew Orleans Orlandold 80s Sanan AntonioA ti Tampap 8 Dissenters’ 44 Subsided 70s 80s 62 63 64 Honolulull 60s Miami Showers Flurries answers AAnchorageh g 45 Houses of lords 9 Harlem 70s 46 Lone Star State Ice PUTTING AMERICA LAST | By Lewis Porter Renaissance sch. novelist Nella U.S. Forecasts Today Tomorrow Today Tomorrow Across 20 Father of Deimos 42 Sleuth on the City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W 10 Relieves, as of 49 Cicero wrote in it s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Skate park and Phobos case of the Omaha 92 75 pc 95 72 s Frankfurt 86 61 s 86 65 pc 50 Draw out t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice missing cushion? guilt Orlando 88 71 pc 86 70 t Geneva 82 63 t 83 63 t sight 21 Nittany Lions’ Today Tomorrow Philadelphia 96 76 pc 91 76 pc Havana 88 72 pc 89 73 pc 11 Sister company 51 Medicine City Hi Lo W Hi Lo W 5 Uncommonly sch. 47 Angrily denounce Phoenix 108 83 s 108 85 s Hong Kong 92 83 sh 92 84 sh of Zales measures Anchorage 73 57 s 72 58 pc Pittsburgh 90 72 t 89 71 t Istanbul 87 73 s 85 72 s bright 22 Crush container 48 Struggled Atlanta 91 73 pc 88 72 t Portland, Maine 87 67 pc 88 67 s Jakarta 91 76 pc 90 76 pc against 12 High trains 53 Jupiter, by 9 Son of Padmé 24 Flowers in a another name Austin 103 74 s 94 73 t Portland, Ore. 77 60 pc 81 60 pc Jerusalem 87 67 s 88 68 s and Anakin butterfly garden 52 Patriots’ org. 15 It may use an Baltimore 96 74 pc 92 74 pc Sacramento 90 54 s 81 52 s Johannesburg 58 34 s 58 36 s ornate font 55 Paid player Boise 77 52 pc 96 64 s St. Louis 90 76 t 93 75 pc London 80 55 s 80 60 pc 13 “Art is ___ 27 Blond Brahmans? 53 Sister of Dick, Boston 91 75 t 87 75 t Salt Lake City 91 63 s 96 69 s Madrid 88 62 s 86 59 s that makes us in primers 17 Food with a fold 56 Fresh quality Burlington 92 69 s 95 74 s San Francisco 75 58 pc 70 57 pc Manila 86 78 t 87 78 t 30 “Here’s the Charlotte 96 72 pc 93 69 t Santa Fe 90 57 c 93 63 s Melbourne 59 52 c 59 52 pc realize truth”: thing...” 54 Commotion 23 “Happy Days Are 57 Acquired Picasso Chicago 88 73 pc 90 74 t Seattle 74 55 pc 80 59 pc Mexico City 74 55 t 73 53 t 32 “___ you’re told!” 55 Academy Here Again” 58 “Between My Cleveland 87 71 t 90 73 t Sioux Falls 87 73 pc 89 67 pc Milan 90 69 t 89 69 s composer Milton Dallas 102 77 s 96 77 t Wash., D.C. 94 76 pc 90 77 pc Moscow 66 52 pc 64 52 r 14 Industry event 33 “Before and founder Head and the Denver 9761pc9159pc Mumbai 87 79 sh 86 80 r 15 Hackneyed After Science” 57 What 24 Shortly, in verse Sky” musician Detroit 88 73 t 91 74 t International Paris 86 65 pc 86 64 t musician congressional Honolulu 87 75 pc 88 75 sh Rio de Janeiro 85 70 t 78 68 pc 16 Dancewear for Previous Puzzle’s Solution Today Tomorrow Houston 95 75 pc 85 72 r Riyadh 111 86 s 113 85 pc 34 Observation bills do, for City Hi Lo W Hi Lo W cross-dressing ASLEEP BASS I QS Indianapolis 88 74 t 93 76 s Rome 83 67 pc 85 67 s monarchs? following a diner signing or SHAL L I OHNO NUT Kansas City 93 75 s 92 74 s Amsterdam 76 55 s 75 57 pc San Juan 89 79 pc 89 78 pc explosion? vetoing? WA I L I N GWA L L A I R Las Vegas 105 79 s 104 80 s Athens 93 75 s 93 74 s Seoul 88 73 pc 87 70 pc 18 Seller of the EDD TURK DELTA 59 Carnival WE E P I NGW I L L OW Little Rock 91 72 t 93 72 pc Baghdad 117 87 s 117 88 s Shanghai 88 78 t 89 80 t Smokehouse 39 It might exhibit EBAY STOR I ES attractions Los Angeles 78 62 pc 80 62 pc Bangkok 93 80 t 93 80 t Singapore 84 79 c 85 78 t Brisket relief DOSED TERR CAM Miami 88 74 pc 89 75 pc Beijing 91 72 pc 95 75 pc Sydney 6549pc7053s 60 Concluded GOTS I CK GEOLOGY Milwaukee 81 68 pc 86 74 t Berlin 80 55 s 82 59 s Taipei City 100 82 c 99 81 c sandwich 40 Rondeau writer EKE NA I R NAMES Minneapolis 88 73 pc 90 73 t Brussels 83 59 s 82 59 pc Tokyo 8676pc8375sh BILLION ZEST 19 Busy season in 41 “Antony and 61 Pleasant MOURNINGDOVES Nashville 90 75 c 96 75 t Buenos Aires 51 38 pc 52 41 c Toronto 88 66 s 90 69 s Saint-Tropez Cleopatra” prop IDTAG GIGA EAR New Orleans 83 76 t 88 76 t Dubai 102 91 s 110 92 s Vancouver 69 55 s 75 61 c 62 Paper piece LOU CRY I NGSHAME

New York City 92 76 pc 88 74 pc Dublin 70 51 s 75 54 pc Warsaw 73 57 c 79 57 pc s ERR ANON I CES I N Oklahoma City 96 71 s 92 68 s Edinburgh 68 52 pc 72 55 pc Zurich 80 60 t 82 59 t Solve this puzzle online and discuss it at WSJ.com/Puzzles. SSN RANG NOTYET . A12 | Tuesday, July 3, 2018 THE WALL STREET JOURNAL. SPORTS

WORLD CUP How England Stole From the NBA England manager Gareth Southgate went to an NBA game. The experience changed the way that England’s soccer team plays.

BY ANDREW BEATON AND BEN COHEN

1 Samara, Russia IT WAS THE NIGHT before the Super Bowl, and sitting courtside at the New Orleans Pelicans vs. Minnesota Timberwolves game was a man who had traveled all the way from England with his mind intensely focused on another global sports event: the World Cup. There has never been anyone more interested in a Pelicans vs. Timberwolves matchup than Eng- land manager Gareth Southgate. 3 Southgate bombarded his com- panions with detailed inquiries about strategy, arena operations and even Crunch, the wolf mascot. Chris Wright, the chief executive of the local MLS team Minnesota United, was stunned by his curios- ity about this sport that’s about as 2 British as sauerkraut. “Here’s this English guy, the Eng- land team manager, trying to figure out Basketball 101,” Wright said. But these are strange days for England. They have emerged as a

serious contender at the World FIFA Cup. They lucked into the weaker 1. England takes a corner kick against Panama. 2. John Stones begins outside the box while Ashley Young sets a backscreen. 3. Stones gets free for a header. half of the knockout bracket. They play Colombia on Tuesday for a England as a bloody disaster. proven Southgate, a retired player It started with Kieran Trippier’s “Like I’m Tom Thibodeau,” spot in the quarterfinals. And they All of which makes England’s whose prior managing experience bending corner. Once the ball was Wright said referring to the Tim- can attribute some of their un- set pieces at this World Cup noth- included a stint with the country’s in the air, two English players berwolves coach. likely success to basketball. ing short of a national miracle. youth team and three seasons with cleared out the center of the box, Southgate had so many ques- Wright was delighted when the Their six goals on set plays a middling English Premier League almost like they were 3-point tions about how everything from Football Association contacted him were the most of any country in club that was relegated under his shooters flaring away from the how offenses create space to how before Southgate’s visit to the Su- the group stage. But there’s a bet- watch. Southgate was an improba- basket. At the top of the box, Ash- defenses protect the basket that per Bowl in Minnesota. He is Eng- ter comparison than England vs. ble choice, and he was given the ley Young threw his body into the he stayed long after the game was lish himself, which is why he the world: England vs. England. job only after Sam Allardyce was defender guarding John Stones over. Grossman realized when they wasn’t expecting this request from They have scored four goals on fired in disgrace. long enough for Stones to get free finally left that Southgate was not the manager: “Is there any way we corners and free kicks so far. They Southgate now looks like the in the middle of the box and head at the NBA game simply to have a can go to the Wolves game?” scored four goals on corners and manager who might be able to the cross for a goal. good time. He was there to work. On the ride to the arena, South- free kicks in the previous three solve England’s problem of face- It was a primitive basketball “I know this is going to sound a gate told colleagues that he was World Cups combined. planting in spectacular fashion at play: the back-screen. And it little silly, but I actually left that especially curious about how NBA “On set plays, we’re a real the worst possible time. His inven- worked to perfection. night expecting England to do well teams created space around the threat,” Southgate said. “We’ve tive schemes have benefited one It’s not like Southgate invented in the World Cup;” he said. “You basket. He thought there might be identified that as a key area in player in particular: Harry Kane. In the pick play in soccer. But even he could just tell the way he went something he could steal. tournaments and a key area we England’s World Cup win against said, through an England spokes- about his business that he was go- Was there any way he could ap- felt we could improve on.” Tunisia, Kane slammed home a man, that he was influenced by ing to leave no stone unturned.” ply the principles of NBA plays— England’s ineptitude on set header on a corner kick in the 91st what he saw watching basketball. the pick-and-rolls, the off-ball plays before Southgate’s hiring in minute to avoid an embarrassing “In areas where he was specifi- screens, the constant movement— 2016 was a bigger national drama draw. It was his second goal of cally interested,” Wright said, “he TV Listings to the English soccer team? than Brexit. that match: Kane had already wanted to go deep.” There are precious few mo- At the time, England star Harry scored on another corner kick. Which is why Southgate was so Tuesday, July 3 ments in every soccer match when Kane took their corners and free But the clearest example of how inquisitive at the Pelicans vs. Tim- (All times Eastern) a manager can choreograph the ac- kicks, one of the many question- England implements basketball berwolves game. “He was the one 10 a.m.: Sweden vs. Switzerland tion by designing a play. They’re able tactical decisions that eventu- strategies on their set plays was a asking questions all night,” said (FS1) called set pieces, and for many ally cost Roy Hodgson his job. corner kick during their 6-1 blow- Ben Grossman, a Minnesota United 2 p.m.: Colombia vs. England (FOX) years, they were better known in That paved the way for the un- out of Panama in the group stage. minority owner.

WIFFLE BALL | By Jason Gay 21 Rules for Fourth of July Wiffle Ball

It’s been a in free agency. You

KEVIN C. COX/GETTY IMAGES few years know how many Belgium players celebrate a goal. since I hot dogs you can cranked out a buy with $400 mil- BELGIUM 3, JAPAN 2 Rules for lion? A…lot. Who Fourth of am I, Journal tax July Wiffle ball. If you policy reporter think this is just a lazy Richard Rubin? I’m A CRAZY attempt to do a summer the sports doofus. I version of Rules for can’t do math. Thanksgiving Family 13. You can tell FINISH Touch Football so I can how old someone is sneak away for a pro- by whether or not longed holiday weekend, they do Carlton let me tell you…guilty as Fisk arm waves BY JONATHAN CLEGG charged! when they hit a I actually wrote this deep fly ball down Wiffle ball column in the left field line. Rostov-on-Don, Russia February, people! There 14. The Red Sox THROUGH THREE GAMES at the are five-month old jokes have won a lot in 2018 World Cup, Belgium had in here! Lot of references recent years, and looked so irresistible that the big- to “Philly Special,” “The there are kids who gest question was whether it Shape of Water” and Es- have grown up in might actually be too good for its ter Ledecka. You had to New England who own good. Three straight wins had look up Ester Ledecka, don’t know how to landed Belgium in a loaded side of didn’t you? She was only do the Carlton Fisk the World Cup bracket, an impos- the biggest sensation in arm wave—they ing lineup featuring four former Pyeongchang! SCOTT POLLACK don’t even know champions, and a potential quar- What’s Pyeongchang? who Carlton Fisk is. terfinal matchup with Brazil. Sheesh. How quickly we forget. to become “The Grillmaster”: 20 seized up. You really did need That’s incredible to me. Growing up No one expected Japan to put The point is, while you’re read- minutes of googling “how to grill warm-up pitches. Sorry. in Massachusetts, I think they used up much of a fight. But in the lat- ing this, I’m goofing off on vaca- fish” on an iPad. 8. Wiffle ball games have the to teach the Fisk arm wave to us in est breathtaking encounter in a tion. I’ve taken my son down to 3. Announcing yourself “Grill- option of playing with bases and school, like English. Carlton Fisk tournament that had already pro- the pond to fish…for six minutes, master” is also a shifty way of di- base runners—or awarding bases was a bigger deal than Paul Revere. duced its share of thrillers, Bel- until I’m bored to tears. Can’t that verting attention from the fact based on distance of batted balls. 15. No, your aunt isn’t trying to gium was forced to battle back kid have more traditional hobbies, that you didn’t bring anything for You know: hitting it off the house show you up with a slow home run from a two-goal second-half deficit like playing Fortnite on my phone? the grill. But we noticed. Oh, we is a double, over the roof is a trot around the bases. She’s 81. It to advance to the last eight thanks Now onto the Wiffle ball: noticed. home run, through the back wind- takes a while. Give her a break. to an epic 3-2 win sealed in the 1. I like to begin my Wiffle ball 4. I strongly suggest you get the shield of your brother’s Tesla is a 16. Everyone thinks they have last minute of regulation. columns with a stern admonition Wiffle ball game under way before Grand Slam. an amazing curveball in Wiffle. Se- The final goal came from Bel- against betting. However, now that lighting the grill. Everyone remem- 9. You just lost two outfielders cret: everyone’s curveball stinks. gium’s final attack of the game, a the Supreme Court has given a bers what happened to Cousin Ray to the artichoke dip. 17. Hey! I just tatered your cur- sweeping, length-of-the-field surge thumbs-up to sports degeneracy, in 2011. It was a great catch, 10. No, let’s not play with a ten- veball over the roof, like Aaron that ended up with Nacer Chadli knock yourself out, America. Bet though, Ray. Sorry you had to go nis ball. You need a proper Wiffle Judge. tapping into the Japan net. While away! Gamble the mortgage. I sug- to the emergency room. ball. A tennis ball damages the bat, 18. Someone is already shooting Chadli was promptly buried under gest a Fourth of July parlay: Win 5. Keep it moving! Speed is essen- it goes too far and…wow, congrat- off fireworks. Find Otis. Ugh, Otis is a pile of red jerseys, the Japanese at Wiffle ball, get into a fight at tial to a good Wiffle game. After all, ulations, Dave Kingman, you just under the porch. You’re safe, Otis. players, who had looked on course the fish store, and knock over the the average baseball contest in 2018 hit a tennis ball 6,500 feet into the They’re just fireworks. Good boy. for one of the upsets of the tour- table next to the grill, with all the runs for six and a half hours, except woods. 19. You won! Congratulations. nament, crumpled to the field. meat. Everyone winds up eating for Red Sox and Yankees games, 11. Awwwwww, man, that was You are 11 games in front of the The win means Belgium will hot dog buns from the bag. which last 11 hours. Try to get your Otis’s tennis ball. Poor doggy. I’m Baltimore Orioles in the AL East. head into its quarterfinal against 2. There’s always one confident Wiffle game done in a half-hour, be- sorry, Otis. We’ll get you a new 20. The game isn’t over until we Brazil in Kazan on Friday facing person at Fourth of July who pro- fore anyone’s back seizes up. tennis ball at the store. find out who got poison ivy. serious questions about its shaky nounces him or herself “The Grill- 6. No, you don’t need warm-up 12. There’s a chance that Wash- 21. No, let’s not play two. Wiffle defense and its painfully slow master.” You can ignore this per- pitches. What do you think this is? ington Nationals star Bryce Harper ball is fun, but there’s guacamole starts, but not for its resiliency. son, because here’s what it takes 7. Aw geez, Grandpa’s back could land a $400 million contract here, people. . THE WALL STREET JOURNAL. Tuesday, July 3, 2018 | A13 OPINION

Abortion, Roe—and Trump BOOKSHELF | By Mark G. Spencer Whenever a Ditto for assertions by Dem- they appreciate the violence The Birthday Supreme Court ocrats such as Senate Minority Roe does here. seat opens up Leader Chuck Schumer that In this sense, Roe can like- during a Re- “at least 20 states” are “poised wise be a good test of a nomi- publican ad- to ban abortion immediately” nee’s views on stare decisis. OfaNewWorld ministration, if Roe is given the heave-ho. This is the legal principle that MAIN headlines start Which itself confirms both even bad decisions, especially STREET warning that that any national “consensus” ones that have been accepted Apostles of Revolution By William American is fake and that the scare over by society, must sometimes be McGurn women will Roe now showing up in news left standing because to over- By John Ferling soon be in for coverage reflects the under- turn them would create more (Bloomsbury, 478 pages, $35) a new Dark standing among Roe support- harm than good. Ages if Roe v. Wade—the land- ers that their legal rationale There are decent argu- ith each passing July 4, the Founders’ world fades mark 1973 decision legalizing remains weak and nationally ments, rooted in stare decisis, further into the past. The march of time takes the GETTY IMAGES?ISTOCK W abortion across all 50 states—is unpersuasive. on why a Roberts court would meaning of the American Revolution with it. In overturned. This time around, As for litmus tests, Demo- Protesters at the high court. be unwise to overturn Roe—or “Apostles of Revolution,” historian John Ferling helps us with Justice Anthony Kennedy’s crats are more honest here. Al- at least refrain from doing it bridge that historical distance. The author, a professor retirement, the fifth vote to most all Senate Democrats will wouldn’t ask prospective Su- all at once. And there are emeritus at the University of West Georgia, has written a overturn Roe has just become a vote against anyone the presi- preme Court nominees how equally strong counterargu- comparative biography of Thomas Jefferson (1743-1826), numerical possibility. dent picks, and almost all will they might vote on Roe.For ments about the corruption Roe Thomas Paine (1737-1809) and James Monroe (1758-1831). invoke concerns over Roe as good reason: It is a bad idea to and Casey continue to inflict on “Comparative history,” he writes, “prompts the historian to part of their defense. This re- expect that any nominee will the body politic. The strongest ask questions that might not otherwise be asked, to travel The Supreme Court flects another reality. The Su- publicly express his (or her) is that the court has usurped a pathways of inquiry that might not otherwise be taken, and is the Democrats’ preme Court is the Democrats’ dissent from a Supreme Court decision that a free and self- to draw conclusions that might otherwise never be drawn.” preferred legislature for get- decision that has yet to be governing society would leave Jefferson, Paine and Monroe are hardly overlooked figures. preferred legislature ting their way on socially con- overturned. During his own to the ballot box. Few American revolutionaries have been studied as much as for social issues. tentious issues. How much eas- confirmation hearings in 1986, This pro-life columnist em- the principal author of the Declaration of Independence. ier to gain five justices’ votes even Antonin Scalia demurred braces all the arguments about Elected president in 1800, than to do the hard work of when asked by Sen. Ted Ken- the need to protect the most Jefferson was “a colossal winning over the American nedy if he would vote to over- innocent and vulnerable among figure in giving shape and Unfortunately, what ought electorate. In this case, at least turn Roe if confirmed. “I do not us. But the Constitution says meaning to the American to occasion a healthy debate two pro-choice Republican sen- think it would be proper for me nothing about abortion. All Revolution,” Mr. Ferling writes. over a contentious issue once ators—Alaska’s Lisa Murkowski to answer that question,” he government of, by and for the He asserts, similarly, that again looks to be clouded by a and Maine’s Susan Collins— answered. people guarantees is that such Paine’s “Common Sense” was handful of dubious orthodox- may join Democrats out of Which leads to the final issues are to be decided by the “the most important pamphlet ies. In rough order, they are as worries about Roe. confusion. Five decades of an- American people themselves, published in the American follows: On the GOP side, mean- gry debate have unfortunately acting through their elected Revolution.” Monroe, the fifth First, that Roe is the settled while, some activists errone- conflated the case against representatives. president, was the last of the law of the land. ously maintain that the Demo- abortion with the case against So when it comes to seat- revolutionary generation to hold Second, that litmus tests crats’ insistence on justices Roe. In fact, the fundamental ing the Supreme Court’s next that office. What does the author’s are bad and unhelpful. who will reliably vote for pro- legal objection to Roe (and justice, here’s hoping—for the comparative history of these three Finally, that an individual’s abortion outcomes must be the follow-up, Planned Par- sake of both the unborn and yield? stand on abortion determines matched by Republican ap- enthood v. Casey) isn’t moral. American democracy—it will First, his selection of individuals empha- where he stands on Roe. pointees equally committed to It’s that it substitutes the be someone who, regardless of sizes the Revolution’s radical core. For Jefferson, Start with settled law. The pro-life outcomes. Mr. Trump views of a handful of un- his or her own views on abor- Paine and Monroe, political independence was only a part of obvious reality is that Roe re- seemed to embrace this view elected men and women in tion, recognizes that a jus- America’s Revolution. Their revolution included a radically mains one of the most unset- during the 2016 presidential robes for the democratically tice’s main obligation on this new and forward-looking republican society formulated in the tled decisions in the history of campaign when he declared, “I expressed wishes of the issue is to ensure a fair and wake of Independence. Some Founders—such as John Adams the high court. After all, if one am putting pro-life justices on American people. And many democratic fight, the winner and Alexander Hamilton—were deeply skeptical about seat change will really mean the court.” excellent jurists who are per- being the side that persuades democracy. Jefferson, Paine and Monroe embraced it. “No the death of a nearly 50-year- Mr. Trump walked this back sonally pro-choice rightly re- their fellow citizens of the individual of their era,” Mr. Ferling asserts, “strove harder old precedent, the ruling can’t Sunday on Fox Business when gard Roe and Casey as terrible justness of their cause. than these three to bring an end to a world where wealth and be as settled as claimed. he told Maria Bartiromo he decisions precisely because Write to [email protected]. power were restricted to the few.” In 1776 their vision of change encompassed not just America but Europe as well. With the American Revolution, wrote Paine, “The birthday of a new world is at hand.” America’s Decline Never Seems to Arrive France mattered greatly to the meaning of America’s Revolution. Living there from 1784 to 1789, Jefferson found This year’s In- China’s authoritarian technoc- accelerating. In the mid-18th U.S., which must not only re- “enormous inequality producing so much misery to the bulk dependence racy is a better governance century, the Enlightenment form its own domestic insti- of mankind.” When revolution came to France in 1789, Paine Day does not model for the 21st century and Industrial Revolution un- tutions but also act as custo- “rushed” to Paris to participate. Jefferson declared that find the na- than America’s chaotic demo- leashed ideas and technolo- dian of a world system under France had been “awaked by our revolution.” tion in the cratic system. gies that would transform the strain from globalization, The turmoil of the French Revolution, however, also had most celebra- Uncertainty about the fu- world. Modern capitalism ex- technological disruption and its sway. During the Reign of Terror, Paine was imprisoned GLOBAL tory of moods. ture is not new to the U.S. “A ploded into being. The social great-power rebalancing. in the Luxembourg, a royal palace turned prison for the VIEW With one republic, if you can keep it,” turmoil, geopolitical instabil- As Franklin well knew, Revolution’s “political enemies.” Hundreds, like Paine’s By Walter of the most was Benjamin Franklin’s fa- ity, and technological change there are no guarantees that friend Georges Danton, were beheaded. This was the Russell Mead polarizing mous account of the product now battering the global sys- the American experiment will context that greeted Monroe when he arrived in France as presidents in of the Constitutional Conven- tem are only the latest stages work. Yet he and his fellow an American minister in 1794, clutching “his unwavering American his- tion. Our national anthem be- in a long process whose end Founders designed a system hope that the French Revolution would succeed, spreading tory poised to make the most gins not with a triumphant we can’t yet see. of government to weather change across Europe” and bolstering anti-Federalist forces consequential Supreme Court assertion but an anxious the stress and the strain of in America. Paine, too was steadfast in his hope to spread choice in decades, trade wars question: Is the American revolutionary times. The revolution, especially to England. Addressing London’s looming on all sides, a moral flag still flying as night gives Our institutions show strength and flexibility of Revolution Society in 1791 he toasted “THE REVOLUTION and humanitarian crisis on way to dawn? an unrivaled capacity Madisonian federalism have OF ALL THE WORLD.” the southern border, and at That anxiety intensified as for weathering enabled the American system least one member of Con- American power grew. Fear to flourish amid more than A comparative biography of Thomas Jefferson, gress calling for mobs to ha- of decline has been an Ameri- disruptive change. two centuries of successive rass administration officials can obsession since the end upheavals. James Monroe and Thomas Paine emphasizes on the streets, the atmo- of World War II. The political But constitutions, however sphere in Washington could scientist Andrew Hacker pub- elegant, can’t breathe life into the ‘radical core’ of the American Revolution. hardly be more tense. Some lished “The End of the Amer- The U.S. has stood the dead polities. It is the union speak of a “cold civil war” ican Era” in 1970; Charles challenge better than most. of sound institutions with a between red and blue. Kupchan used the same title Now in its 230th year, the strong national spirit—ordi- By the late 1790s, Jefferson and Paine had “lost hope” in Meanwhile, the values that for a 2002 book; and in 2011 American political system is nary Americans’ patriotism, the French Revolution. Yet in America’s presidential election have defined U.S. foreign pol- Stephen Walt used it again one of the world’s oldest. democratic faith and enter- of 1800 they saw a chance to fulfill America’s Revolution. On icy since World War II are for an influential article in But the revolutionary force prising ambition—that has it rested their “hope that a republican beacon of light might shuddering and shaking. As the National Interest. From of capitalism isn’t finished made America such a force in shine toward the rest of the world.” China and Russia seek to pull Paul Kennedy to Fareed Za- with us. The social and polit- the world. Mr. Ferling’s American Revolution does not end with the down the pillars of American karia to Henry Kissinger, ical changes of the 21st cen- Noisy extremists on the War for Independence. That was only “the first act of the strength, it is unclear whether some of the most acute for- tury challenge the institu- political fringes notwithstand- great drama.” Its real meaning was in subsequent 19th- President Trump is commit- eign-policy thinkers have tions that humanity so ing, that spirit still rules in century developments, the “bustling democratic world” that ted to the institutions and al- from time to time perceived painstakingly assembled in America today. As long as it historian Gordon S. Wood has described. “The birthday of the liances that have kept Amer- the signs of decline. the second half of the 20th. does, the country will con- new world that Paine and Jefferson had envisaged with ica great for so long—or And yet somehow, the flag Across the globe, societies tinue to astonish the world American independence had at last come,” Mr. Ferling writes, whether his ill-judged at- has continued to fly. Why must renew themselves as with its creativity and its ca- “flowing over the new nation and transforming it into a more tempts to reform the global does American power look the information revolution pacity for renewal. For now, egalitarian and democratic country than most who were system will bring it down in so fragile and remain so re- reshapes the way people at least, we can still answer living in 1776 could ever have imagined.” ruins. Some leaders in Asia, silient? One reason is that work, think, interact and en- Francis Scott Key’s anxious Along the way, Mr. Ferling challenges many common Africa and even Europe are the U.S. emerged just as the gage in politics. question in the affirmative: interpretations, especially of Paine, whom he defends from beginning to wonder whether pace of human history was This is doubly hard for the our flag is still there. unfair partisan assessments. (John Adams memorably described Paine as “a mongrel between Pigg and Puppy, begotten by a wild Boar on a Bitch Wolf.”) Paine’s alcoholism, Mr. Ferling argues, was an exaggerated claim bruited about If You Value My Opinion, Pay Me for It by his enemies. More certain are Paine’s “palpable self- regard,” his suffering bouts of severe depression and By Peter Funt “Thank you in advance for Some companies are less to determine if I was “eligible” loneliness, and his habit of serially overstaying his welcome your time.” daft. Wells Fargo offers survey to complete more surveys. even with those sympathetic to him—once for five years! he Nielsen Corp., which The Geico Homeowners respondents “a chance to win I decided to phone Chase Jefferson’s final letter—written days before he died, on T tracks TV viewing and Team emailed a survey saying $1,000 in our Survey Sweep- customer service to check the July 4, 1826—defined his American Revolution. The real other consumer behav- the company’s goal is “excellent stakes.” Best Buy dangles “a validity of this odd program. achievement was “the signal of arousing men to burst the ior, knows the value of a buck. service.” No thanks. My goal is chance to win one of three Three different customer-ser- chains” imposed by “monkish ignorance and superstition . . . When Nielsen sends out sur- to get paid for my work. $5,000 Best Buy shopping vice agents, taking more than a and to assume the blessings and security of self-government.” vey mailers, tucked inside each sprees.” AT&T promises a shot half-hour of my time, con- The Revolution, Jefferson wrote, had secured “the free right envelope is a crisp dollar bill. at “1 of 8 $100 Gift cards.” cluded it was a scam and ad- to the unbounded exercise of reason and freedom of opinion. After all, a deal’s a deal. Niel- Avis, Home Depot and However remote your chances, vised me to forward the email All eyes are opened, or opening, to the rights of man.” He sen wants your feedback, and even Donald Trump a prize at least conveys the to the Chase Abuse unit. A made clear what he saw as the significance of the annual it learned years ago that company’s thanks. fourth agent checked further celebration: “Let the annual return of [Independence] day you’re more likely to respond want free feedback. The most riling request for and informed me that the Ip- forever refresh our recollections of these rights, and an when compensated, even with uncompensated feedback I’ve sos survey was legit. undiminished devotion to them.” a token sum. ever seen came in a recent Alas, I’ll never know what, if What would Jefferson make of America on July 4, 2018? But in the internet era, Petco called me “a valued email from JPMorgan Chase anything, members of the Mr. Ferling speculates that he would “be pleased by the many companies think it’s rea- pet parent” but offered nothing Bank, “inviting” me to join Chase Innovation Community breadth of today’s democracy.” But Jefferson, Paine and sonable to ask for your time for a hefty 15-minute survey. something called the Chase In- receive for their service. A team Monroe would also be distressed by the maintenance of an and advice without offering Really? At the federal minimum novation Community. This “se- T-shirt, perhaps? After com- enormous standing army and an eagerness to use it for anything in return. wage, I deserve $1.81. lect group of customers,” I was pleting the initial survey, which frequent foreign wars, as well as “an economy underpinned by “At Avis, we value our cus- Even the wealthiest Ameri- told, “will be asked to partici- asked about my accounts, a federal banking system and a permanent national debt.” And tomers’ opinions,” said the can president in history wants pate in short online surveys and credit cards and various bank- the powerful, centralized presidency of today would, to them, email after my recent car free feedback. “Please, take a discussions with others in the ing habits, I was rejected. most resemble “the eighteenth-century English monarchy.” rental. I doubt it, since Avis of- moment to take the Official community,” occurring “once or Just as well. My advice to But what might be most shocking to these founders, Mr. fered me zilch for filling out its Presidential Job Performance twice a month.” Chase and other feedback free- Ferling speculates, is “that wealth in the United States was in three-minute survey. Poll today,” reads the email Working with the interna- loaders: If you want my two about the same percentage of hands as had been the case in Home Depot wanted me to sent by the Republican Na- tional research firm Ipsos, cents, you can start by offering England in 1776.” Jefferson, Paine and Monroe, the author “take just a few minutes” to tional Committee, operating as Chase pledged that this data me at least a penny for my concludes, “might welcome another Age of Paine.” Some will rate my purchase of “1 lb. Stain “The official polling team of “will result in improvements thoughts. suspect that Mr. Ferling might, too. Removing Poultice Powder.” President Trump.” What? No and products inspired by The compensation was Home chance to win Trump steaks? you.” To participate, I would Mr. Funt is a writer and Mr. Spencer, a professor of history at Brock University, is Depot’s enduring gratitude: Not even a MAGA hat? first have to fill out a survey host of “Candid Camera.” the author of “David Hume and Eighteenth-Century America.” . A14 | Tuesday, July 3, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR

The Abortion Scare Campaign Spare Us From the Internet Sales Tax Tsunami

ome things in politics are predictable—a Planned Parenthood v. Casey in 1992 super- Regarding your editorial “Spring- needed, then, is to change the law to New Jersey tax increase, a “no” vote by seded Roe with its “undue burden” test on states time for Internet Taxers” (June 22): make all sales pay the applicable S The states should have a right to col- sales tax of the location where the Senator Rand Paul, and an abortion- for imposing limits on abortion. In 2016 in Hell- lect sales taxes for items shipped into seller is domiciled. rights scare campaign every erstedt, the Court invoked that Why Roev.Wade their territories. As the owner of a Since every seller already has that time a Republican President test to strike down a Texas law small business that sells restroom system in place for “in-state sales” makes a Supreme Court nomi- and same-sex marriage imposing stringent regula- fixtures to all 50 states, however, I no additional work is required. It also nation. And sure enough, the tions on abortion clinics. In am terrified, not of the taxes, but of pays the taxes to the location where predictions of doom for abor- are likely to survive many other cases when the the paperwork. When my business the seller is using the facilities of tion and gay rights began after Kennedy. Court has upheld state restric- files sales taxes every quarter in our that state or local government to op- within minutes of Anthony tions, the core right was never home state, North Carolina, we have erate his or her business. Kennedy’s resignation last challenged. to calculate, report and pay four dif- ALAN YENDLE week. These predictions are Our view, supported by ferent tax rates: one for the state and Woodway, Texas almost certainly wrong. more than a little reporting, is that even three others depending on what each iii though they think Roe was wrongly decided, of the 100 counties demands. It is an The court chose not to consider arduous but manageable process for the constitutional issue under the “Abortion will be illegal in twenty states in most of the current conservative Justices us. If we have to file in 50 states, it 10th Amendment but only the Com- 18 months,” tweeted Jeffrey Toobin, the legal would shy from overturning it and handing will bury us and leave even more of merce Clause, which is incidental to pundit, in a classic of cool, even-handed CNN abortion law entirely to the states. The excep- an advantage to Amazon and others the issue in making its decision. analysis soon after the resignation news. Demo- tion is Justice Clarence Thomas, who has made who can throw a team of accountants Under the 10th Amendment, states cratic Senate leader Chuck Schumer was almost his intentions clear. and coders at this form of chaos. have the power to tax their resident as definitive. “Whomever the president picks, Scientific advances have made abortions Are the states willing to make this citizens. With that power first comes it is all too likely they’re going to overturn easy to obtain through medication in the early reasonable for us? If we are going to the citizens’ responsibility to comply health-care protections and Roe v. Wade,” the weeks of pregnancy, and making them illegal go in this direction, how about one with the law and second the state’s 1973 abortion-rights decision, Mr. Schumer de- would create an enormous social uproar and in- tax rate for all states who charge it, responsibility to enforce the law. If a clared. “We don’t need to guess.” vite an attack on the Court that Chief Justice reporting to one agency? The addi- citizen chooses to purchase goods tional revenues are going to be a from an out-of-state entity either as The first thing to keep in mind is that this is Roberts in particular would not want. Judge windfall to the states, so maybe they the result of travel or by way of the what Democrats and their media allies always Laurence Silberman of the D.C. Circuit Court of can afford to work with us on this. internet, it is the citizen who bears say. They said it in 1987 when Justice Kennedy Appeals told us recently that his long-time CHRIS BERL the responsibility to comply with the was nominated. They said it in 1990 about David friend and colleague Antonin Scalia told him be- Mooresville, N.C. law and pay the sales tax that is due. Souter, again about Clarence Thomas in 1991, fore he died that even he would not have sought It is the state’s responsibility to see John Roberts and Samuel Alito in 2005, and Neil to overturn Roe today. How did the assenting justices get that it is collected. What the Su- Gorsuch in 2017. They even claimed the Chief Ah, but didn’t five Justices only last week around Article 1, Section 9 of the U.S. preme Court has done by using the Justice might overturn Roe because his wife is vote to overturn a 41-year-old First Amendment Constitution: “No Tax or Duty shall Commerce Clause that is incidental to a Roman Catholic. Mrs. Roberts is still waiting precedent on coerced speech on union fees? be laid on Articles exported from any this issue is to require that a nonresi- to write her first opinion. They did, but Abood had long ago become an State”? dent third party do what the citizen JOAN GLACY The liberal line is always that Roe hangs by outlier in the Court’s free-speech jurisprudence. of the state did not do in violating New York the state’s law, and what the state a judicial thread, and one more conservative It survived by a single vote even as the Court did not do to collect the tax it is Justice will doom it. Yet Roe still stands after struck down other examples of speech coerced This ruling, if it is not carefully owed. All of this is nothing more nearly five decades. Our guess is that this will by governments. legislated, opens the door to unin- than political expediency and not an be true even if President Trump nominates an- The same cannot be said about the Court’s tended consequences for the taxation application of our Constitution. other Justice Gorsuch. The reason is the power abortion precedents. A post-Kennedy Court is of goods and services never envi- If the Supreme Court can use con- of stare decisis, or precedent, and how conser- likely not to overturn Roe and its successors but sioned by the justices. If states tax a stitutional clauses that are incidental vatives view the role of the Court in supporting it will probably uphold more state restrictions. transaction based on a customer’s to an issue to get around the 10th the credibility of the law. This won’t please some social conservatives, state of residence, imagine busi- Amendment, then what other powers Start with the Court’s Obergefell ruling that but it would put U.S. law close to where Ameri- nesses in a popular tourist or busi- will it decide to rewrite next? WALT NOCITO legalized same-sex marriage in 2015. The ruling can public opinion is—keeping abortion legal ness convention location being re- was only 5-4 and Justice Kennedy wrote the ma- but making it rarer than it now is. quired to ask customers what state Appleton, Wis. iii they hail from so they can collect jority opinion with a formidable dissent by taxes on behalf of their various home You shouldn’t be so harsh on Con- Chief Justice Roberts. Many on the left and right will disagree with states. necticut and New Jersey. Certainly Yet there’s almost no chance the Chief would this analysis for different reasons. Conserva- MIKE FULJENZ the governors of those states will reverse Obergefell now. Tens of thousands of tives want to believe that Roe can still be re- Beaumont, Texas quickly propose legislation to reduce gay couples have been married across the U.S. pealed in toto, like Plessy v. Ferguson, and we other state taxes to compensate their since the ruling. They have changed their lives admire their conviction. Liberals want to scare The premise is that when you go residents for the increased taxes based on it. Is the Court now going to tell those Americans to believe abortion rights are in peril to an internet site in another state awarded by the Supreme Court. couples that states can declare their marriages so they can intimidate enough GOP Senators to you are virtually at that location, just JACK WOODRUFF void? Or that their property rights under mar- defeat whoever Mr. Trump nominates to replace as if you visited in person. All that is Vail, Colo. riage laws are no longer valid? Justice Kennedy. A key part of the Court’s stare decisis calcu- The headlines are already targeting GOP Sena- lation is “reliance interests,” or how and how tors Susan Collins, Lisa Murkowski and Shelley many people have come to rely on a precedent. Moore Capito, and abortion is the political cudgel. Art of the Deal Varies Throughout East Asia Chief Justice Roberts cited reliance interests in Ms. Collins said over the weekend that she won’t William Zartman provides impor- convey is that when a Japanese deal- his Wayfair dissent on state internet sales taxes vote to confirm a nominee who shows “hostility” tant insight into East Asian culture maker asks to renegotiate, it is driven this term, and its logic is even more compelling to Roe. She isn’t likely to face such a choice. and negotiations (“Kim Jong Un and by a need to prevent harm to mother for same-sex marriage. No one on Mr. Trump’s list of nominees will the Art of the Asian Deal,” op-ed, Japan or the firm. Further, the deal- A different stare decisis logic applies to Roe, claim to want to overturn Roe—and not because June 25). I have lived, worked and ne- maker is willing to renegotiate if the which was one of the Court’s worst rulings but they are lying. In their caution and deference gotiated in Asia, I have had my share Westerner encounters difficulty and is now 45 years old and embedded in American to precedent, they will be showing proper con- of soju, large sea cucumbers and fish needs relief from the deal. This is law. While abortion is still hotly debated, the servative respect for the law and the reputation eyeballs in the pursuit of relation- more of a win-win mind-set. ship-building to close on deals. In the case of China or Korea, the Court has reinforced the right many times. of the Court. President Trump can be assured focus is very self-centered. In fact, that Kim Jong Un, Xi Jinping, Moon negotiations tend to follow the pre- Jae-in and Shinzo Abe all have read cepts in Sun Tzu’s “The Art of War” The Peso Federales “Trump: The Art of the Deal.” The where deception is a key component real question is whether President of success. This is clearly a win-lose ndrés Manuel López Obrador’s victory in nancial markets. From Sunday evening into Trump understands the culture and mind-set. Sunday’s presidential election was a Monday afternoon, the Mexican peso fell 1% mind-set differences between China, RON DUDLEY A Korea and Japan that guide their own Sanibel, Fla. landslide by Mexican standards, as he against the U.S. dollar as investors assessed appears to have won more than 50% of the vote what the leftwing sweep might mean for policy. unique “art of the deal” thinking. and his Morena party dominated gubernatorial, Call them the peso federales. Prof. Zartman points out most mayoral and legislative races. Voter participa- News later Monday that Mr. López Obrador Westerners are frustrated that a deal Income Equality Helped in Asia appears transitory and subject tion was a robust 63%, so the president-elect had spoken to Donald Trump calmed markets to renegotiation. What he fails to Trump, Embarrasses Some certainly has a mandate. and the peso recovered some losses. But the Phil Gramm and Robert B. Ekelund Yet it didn’t take long for Mr. López Obrador peso message is that the president-elect now has Jr.’s “How Income Equality Helped to see that he’ll have to cope with a different sort to worry what the markets think if he wants to The Problems With Justice Trump” (op-ed, June 25) explains with of election—the one that takes place daily in fi- improve the lives of Mexicans. mathematical precision what many in- Kagan’s Free-Speech Dissent tuitively suspect by what we see Regarding your editorial “The Su- around us. I wonder how forthcoming Let German Voters Try Again preme Court’s Banner Year” (June 28): census participants were about any In her dissent in Janus v. Afscme, Su- “off-the-books” work and “hidden in- he main lesson from the troubles in An- hofer’s stunt may have backfired. preme Court Justice Elena Kagan says come” not otherwise reported to keep the decision overrides “citizens’ income at levels low enough to qualify gela Merkel’s German government is The larger and longer-term problem is that T choices” and has stopped “the Ameri- for benefits and services. All income that administrations need to be about Mrs. Merkel remains politically weak after last can people...frommaking important quintiles could have “hidden income,” something other than sur- A new election with year’s inconclusive election, choices about workplace governance.” but I suspect the consumable income vival. By our deadline Monday and this probably won’t be the How, I ask, is compelling government of the lower three quintiles would be evening it appeared she had new ideas is needed to last domestic crisis she faces. employees to pay fees for political even closer together. survived the latest challenge She didn’t so much win that speech with which they don’t agree a JOHN TROTTER to her chancellorship. But fix the Merkel crisis. election as lose it less than “choice”? Isn’t the opposite true? Elizabeth, N.J. she’ll limp through the re- Germany’s other major parties She at least gets something inad- maining three years of her did. Her diminished CDU/CSU vertently correct later in her dissent, Apparently Americans aren’t as na- term if she can’t fill the ideas void at the center seat count in parliament, and its unwieldy coali- to wit, her stating that the majority of ive as many on the left want us to be- of her government. tion with the center-left Social Democratic the court is “weaponizing the First lieve. Income inequality is a natural Amendment.” In that she is correct. and needed outcome of the indepen- Mrs. Merkel stared down a rebellion from the party, make her vulnerable to political shenani- The First Amendment is a weapon— dent decisions we all make daily. center-right Christian Social Union (CSU), the gans from all corners. against coerced speech, which the WILLIAM MORSE Bavarian sister party to Mrs. Merkel’s Christian Political leaders and commentators have Janus case has exposed and at least Grosse Ile, Mich. Democratic Union (CDU). Horst Seehofer, Mrs. convinced themselves that Mrs. Merkel is indis- partially eliminated. Merkel’s Interior Minister and CSU leader, had pensable for German stability or European co- JOHN TRICKETT threatened to resign (or force Mrs. Merkel to operation or something. Voters disagree. Other- Charleston, Ark. Pepper ... fire him) if she didn’t emerge from last week’s wise they’d have re-elected her with a bigger And Salt European summit with a plan to stem the entry margin, especially considering her enduring Justice Kagan’s dissent was laugh- of asylum-seekers into Germany. personal popularity. able. She frets that “public employee THE WALL STREET JOURNAL She did, and despite Monday’s theatrics Mrs. Mrs. Merkel should have gone back to voters unions will lose a secure source of fi- Merkel’s deal with Mr. Seehofer mostly builds again after the last inconclusive result, and she’d nancial support.” So what? What bear- ing does that have on a case attempt- on that EU pact. She promised the CSU stricter be wise to keep the option on the table when the ing to adjudicate the First Amendment enforcement along the Germany-Austria border next crisis inevitably arises. A new vote would rights of government workers? It to bar asylum-seekers whose claims are being give Mrs. Merkel a chance to run on a more com- seems pretty obvious that her no vote processed elsewhere in the EU from entering pelling program than she did last year or to bow was results-oriented; i.e., she didn’t Germany, in line with the EU plan. out for a new party leader. want a party to whom she is sympa- Maybe that will give Mr. Seehofer the politi- The alternative is for Mrs. Merkel to lurch from thetic to be inconvenienced. cal boost he wants from stirring up this feud. Ba- crisis to crisis, her authority weakened by each JOHN KNOERLE varia, in Germany’s south, was traversed by a one, while enacting policies that voters didn’t en- Chicago large share of the Middle Eastern migrants who dorse. It’s hard to see the virtue in that. Any entered after Mrs. Merkel’s open-door offer of short-term stability will come at immense cost as Letters intended for publication should refuge in 2015. The CSU now faces an electoral infighting paralyzes Mrs. Merkel’s center-right. be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, threat from the anti-immigrant Alternative for Frustrated voters might turn to the AfD. or emailed to [email protected]. Please Germany (AfD), which could deprive Mr. See- Germany’s current political crisis began include your city and state. All letters hofer’s party of its absolute majority in the state when Mrs. Merkel failed to give enough voters are subject to editing, and unpublished parliament in local elections in October. But the enough reason to vote for her. It won’t end until letters can be neither acknowledged nor “Where do you see yourself returned. CSU’s slipping poll numbers suggest Mr. See- she or someone else does. in 50 million years?” . THE WALL STREET JOURNAL. Tuesday, July 3, 2018 | A15 OPINION Will New The Case for Brett Kavanaugh York’s Mayor By J.D. Vance acquired my conservative constitu- tionalism after reading Justices Sca- Erase Real hat should President lia and Thomas rebut their more Trump look for in a progressive colleagues. The conser- Supreme Court nomi- vatives simply have the better of the Diversity? W nee? Exactly what he argument, I often thought. Persua- did with his selection sive power requires not only sound of Justice Neil Gorsuch and his slate principles but intellectual strength, By Maximilian Ximenez of lower-court nominees. He should rhetorical skill, and a willingness to ask one question: Who is best at be- engage with an opponent’s best ar- hen I received my diploma ing a judge, as demonstrated by a guments. From the way he worked in W from Bronx Science High consistent record of applying textual- the classroom to his 12 years on the School in 2010, I was one of ist and originalist reasoning to signif- D.C. Circuit, Judge Kavanaugh regu- the few Hispanic graduates on the icant legal questions? Given the re- larly reveals those qualities. stage. But my fellow students and ported options Mr. Trump is now The through line in Judge Ka- alumni were united by a deep re- considering, the answer is obvious: vanaugh’s jurisprudence is his capa- spect for our common accomplish- Judge Brett Kavanaugh of the U.S. ble and committed defense of the ment—which is now in jeopardy. Court of Appeals for the District of Constitution and other laws—as writ-

Mayor Bill de Blasio and Schools Columbia Circuit. AFP/GETTY IMAGES ten. His 12-year record is one of con- Chancellor Richard Carranza have I’ve known Judge Kavanaugh since Justice Anthony Kennedy administers the oath to Judge Kavanaugh, 2006. sistent textualist and originalist juris- proposed to abolish the Specialized 2011, when I was a law student at prudence. Records can be dangerous High Schools Admission Test, the Yale. He taught a foreign-policy semi- that an administrative agency violated Justice Antonin Scalia. Judge Ka- in court confirmations, and partisan qualifying exam for Bronx Science nar that year, and what most im- the separation of powers. In 2010 the vanaugh’s reasoning in another case, politics offer the temptation to avoid and New York City’s eight other pressed me was his willingness to de- Supreme Court agreed with Judge Ka- Doe v. Exxon, informed two separate nominees with long paper trails. specialized high schools. In the fend himself and his principles in an vanaugh, in a 5-4 opinion written by Supreme Court decisions, Jesner v. Fealty to principle sometimes re- name of “diversity,” they propose a ideologically hostile environment. Chief Justice John Roberts. Judge Ka- Arab Bank and Kiobel v. Royal Dutch quires setting aside one’s own pref- lottery open to the top students For a conservative finding my way in vanaugh’s PCAOB opinion also served Petroleum. erences. Judge Kavanaugh has come from all city middle schools, re- an institution where I was heavily as a foundation for his recent opin- His judicial record spans just about under fire in some quarters of the gardless of academic standing or outnumbered, Judge Kavanaugh’s ions in PHH v. Consumer Financial every important area of the law, and right for a handful of opinions—no- rigor. mentorship and example were invalu- Protection Bureau, in which he made conservatives should be happy with tably two involving challenges able. A few years later, he hired my a similar case against Elizabeth War- the results. He sided with the Trump against ObamaCare—in which he wife as a law clerk. So I’m personally ren’s brainchild, the CFPB. administration in rejecting the Amer- aimed to rule narrowly and fairly ‘Asian’ is a broad category, a proud Kavanaugh partisan. ican Civil Liberties Union’s demand rather than politically. In one, he dis- covering the planet’s That said, his qualifications stand that the government facilitate an im- sented from an opinion that upheld on their own. First, he has the nec- He faithfully applies the mediate abortion for an illegal-alien the individual mandate. He observed largest continent with the essary intellectual commitments. He Constitution, and his teenager in federal custody. He re- that the individual mandate “is un- majority of its population. is a committed textualist and origi- jected the Obama administration’s at- precedented in American history” nalist, one whose time on the bench dissents have already tempt to coerce religious groups to and cast doubt on its validity under has revealed a unique ability to ap- influenced the high court. provide contraception to employees. either the Commerce or Taxing ply these principles to legal facts. He stood by Scalia’s strong originalist clause. In another, he rejected what The notion that specialized high He deeply believes in the constitu- interpretation of the Second Amend- the conservative scholar Ed Whelan schools are insufficiently diverse is tional separation of powers as a ment and rejected balancing tests de- calls “a very adventuresome Origina- false. The majority of students at means for ensuring governmental By my count, Judge Kavanaugh’s signed to undermine the right to keep tion Clause challenge.” almost all of them are not white accountability and protecting indi- opinions have been adopted by the and bear arms. He upheld labeling re- Judge Kavanaugh’s record shows but Asian-American, the racial vidual liberty. justices 11 times—a record of influ- quirements on foreign-made products him to be a jurist who adheres to his group with the highest poverty rate From the start of his career, he’s ence and persuasion that suggests he designed to protect American manu- principles and can influence his fu- in New York City. Most are not applied the Constitution faithfully, would be effective on the still-di- facturers and farmers. He has pro- ture colleagues on the bench. He is sons and daughters of privilege; even when that made him a lonely vided high court. His influence has tected police officers acting in good the most qualified candidate by all they are first-generation Ameri- voice. He has done so with particular been especially notable in cases in- faith against unwarranted damage the criteria that matter. On top of cans, if not immigrants themselves. tenacity on the issue that matters volving overreach by regulatory verdicts, most recently in a case in that, he is a good and decent man of My best friends were the children most to the president: taking power agencies. In two different Environ- which the Supreme Court vindicated integrity. He would be a worthy Su- of cabbies and grocers, cleaners away from unelected bureaucrats and mental Protection Agency cases, each his position in a 9-0 opinion by Jus- preme Court justice. and cooks—parents who sacrificed returning it to elected officials. Con- involving billions of dollars in regula- tice Clarence Thomas. to support their children’s dreams sider his 2008 dissent in Free Enter- tory burdens, the Supreme Court ad- A Justice Kavanaugh could also Mr. Vance is author of “Hillbilly of becoming doctors, physicists or prise Fund v. Public Company Ac- opted Judge Kavanaugh’s dissenting be influential beyond the bench. Like Elegy: A Memoir of a Family and a roboticists. counting Oversight Board, arguing views in 5-4 decisions by the late a lot of conservative law students, I Culture in Crisis.” “Asian” is a broad category, cov- ering the planet’s largest continent with the majority of its population. Many of my classmates were of Chi- The Culture That Sustains America’s Constitution nese, Indian or Korean heritage. But I also studied alongside Afghan, By Joseph Tartakovsky world’s first constitution to institu- suggests that Americans have a mi- unite us in virtuous rage. Bangladeshi, Burmese, Filipino, In- tionalize the principle of human raculous thing that we must never- Every American generation has a donesian, Iranian, Jordanian, Malay, ince 1789 the average life span equality. Consider that it was an im- theless strive to make better. In the vocal minority that considers itself Mongolian, Pakistani, Taiwanese, S of national constitutions world- migrant who put the words “We the 1940s, we interned Japanese-Ameri- doomed to live in an age of constitu- Uzbek and Yemeni students, among wide has been 19 years, accord- People” into the Constitution. He was cans out of misbegotten wartime ra- tional degeneracy. The supposed fall others. ing to scholars at the University of James Wilson, the brilliant but forgot- cial hysteria. But we also apologized from purity began about 600 days I was exposed to more diversity Chicago. Meanwhile, “We the People ten Scottish-born founder who taught for it in a 1998 law that was co-spon- into the Constitution’s life, when the at Bronx Science than I could have of the United States” are now well that under monarchy, in the “attempt sored by then-Rep. Norman Mineta. Virginia Legislature, in November been at almost any other institution into the third century under our to make one person more than man, As a child, Mr. Mineta had been 1790, denounced George Washington’s of learning in the world. Long Constitution. We’ve lived under the millions must be made less.” taken to an internment camp in Wy- financial policies as constitutionally nights in the school’s tech lab same written charter longer than Popular rule had become more oming. He went on to serve 20 years blasphemous. But Americans chose to would end with a friend’s mother any people on earth. We’ve had reg- than a slogan. Alexis de Tocqueville in the House and five years as secre- cannonade each other with pam- dropping off lumpia or paneer for ular federal elections every two visited in 1831 from France, where tary of transportation. phlets, not artillery. And so the or- the robotics team. During free peri- years, uninterrupted even by the the crowned heads at Versailles derly transitions of power went on, ods I would practice guitar chords Civil War. dared not mingle with their people. one after another, like a never-ending from Taiwanese death-metal bands Yet America’s Founders had seri- He was astonished to meet state Without it, checks and football game in which the parties or discuss mythology and philology ous doubts about the durability of governors who had kept their day balances are barricades of eternally gain and lose yardage. with my friend who headed the their “experiment.” Alexander Ham- jobs as farmers. Later Tocqueville Constitutionalism is not a mere school’s Vedic Religions Club. Some ilton, in an 1802 letter to Gou- visited Andrew Jackson in the White foam and counterweights institutional form but a culture—a of my best friends belonged to verneur Morris, wondered why he House, where the president himself, of butterfly’s breath. set of sentiments, habits and as- small communities like the Druze, had wasted his best years defend- with no servant in sight, served sumptions, a permeating spirit that Baha’i or Tayoke, groups that would ing our “frail and worthless” char- glasses of Madeira. animates an otherwise lifeless paper be hard to find together outside ter. In 1832 Chief Justice John Mar- America’s progress in respecting scheme. Without this instinctive loy- New York. shall, near the end of his 34-year the real implications of equality has “Every banana republic has a Bill alty, the Constitution’s checks and The idea that schools like Bronx tenure, lamented in private corre- at times been slow, even glacial, es- of Rights,” Justice Antonin Scalia balances are barricades of foam and Science lack diversity reflects some- spondence that “our Constitution pecially with regard to race. As early told a Senate committee in 2011. counterweights of butterfly’s breath. thing worse than mere ignorance. cannot last.” as 1876, black fathers in Kansas Written guarantees are meaningless It is not in having a constitution that Chancellor Carranza asserted that You might think America’s track sought to have their children admit- without a culture to sustain them. our strength lies, but in cherishing he does not “buy into the narrative record in the subsequent 200 years ted to schools on equal terms with Russia’s Constitution purports to se- it. So long as we keep the faith, our that any one ethnic group owns ad- would inspire greater confidence. Yet white children. Yet Brown v. Board cure the freedoms of speech and Constitution will be displaced no mission to these schools.” It’s as if many people today feel, as they have of Education would not come for an- press, but Muscovites shrugged in sooner than an ant tips over the he wants to erase my classmates after many fraught elections, that other 78 years. The truth that justice 2001 when Vladimir Putin seized the Statue of Liberty. and their genuine diversity. the president is either a savior or will be forever approximated but last independent television network. I was born in the Bronx and the harbinger of doom. So it’s worth never achieved is reflected in the Imagine if the White House swal- Mr. Tartakovsky is author of “The raised by a single mother. I at- reflecting on why the Constitution paradoxical words of the Constitu- lowed up Fox News, CNN and Lives of the Constitution: Ten Excep- tended a failing middle school has endured. tion’s preamble: the aim of forming MSNBC, one after another. Americans tional Minds that Shaped America’s with a graduating class of fewer There is, first, its text: It is rigid a “more perfect” union. may bicker over “fake news,” but an Supreme Law” and a former deputy than 60, which was closed right enough to restrain excesses, yet flex- That impossibly shrewd phrase attempt at censorship like that would solicitor general of Nevada. after I left. I made it into Bronx ible enough to accommodate innova- Science with little more than a tions. It is so terse that you could used copy of a $10 test-prep book fold it into a paper airplane (though my mom ordered on eBay. That I the guards at the National Archives The Progressives Who Don’t Hate Trump was Hispanic had no bearing on would prefer you didn’t). It pre- my admission: I got in because I sumes that both governors and the By Ted Rall family separation or pretending that And the senator observed last year studied hard and worked hard, just governed will act mostly responsibly. police brutality isn’t real. But left that Mr. Trump has “very strong po- like my many Asian friends from But as Robert H. Jackson, a future was at a friend’s daughter’s con- populists are not entirely unsympa- litical instincts” and knows how to all backgrounds. I would have been Supreme Court justice, explained in I firmation party in eastern Long thetic to economic nationalism or “connect with people.” mortified to hear that I was of- 1937: “Checks and balances work as Island, N.Y. The family Volvo and stronger border controls. For them, For Democrats to have a prayer of fered a spot in the school at their effectively on spite, jealousy or per- the Tesla bore Bernie Sanders stick- American workers come first, and taking back a congressional chamber expense. sonal ambition as they do on patrio- ers, one from 2016 and the other from Donald Trump is the first (far less or two this fall or unseating the pres- tism or principle.” 2020. “The thing about Trump...”I than perfect) president in most peo- ident in 2020, party leaders will have Mr. Ximenez is a literary agent. The Framers also created the began, and the father interrupted me: ple’s lifetimes to walk that talk. to face an uncomfortable truth. For a “. . . he’s not all bad, right?” he said. lot of lefties, Trump hatred won’t be “I actually like some of the things enough to get them to vote. They just he’s doing.” He mentioned North Ko- Even Bernie Sanders has aren’t that not into him. PUBLISHED SINCE 1889 BY DOW JONES & COMPANY rea and trade protectionism. He cast said not-unkind things If Democrats want a united front Rupert Murdoch Robert Thomson his eyes about, worried about being against the Republican, they’ll have Executive Chairman, News Corp Chief Executive Officer, News Corp overheard. about the president. to acknowledge that Mr. Trump has Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher My friend didn’t vote for Donald re-created the Reagan Democrat Trump and doesn’t intend to in 2020. phenomenon among the white work- Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Mark Musgrave, Chief People Officer; But he doesn’t despise the president Sen. Sanders has acknowledged as ing class and its allies. They’ll have Jason Anders, Chief News Editor; Thorold Barker, Edward Roussel, Chief Innovation Officer; Europe; Elena Cherney, Coverage Planning; nearly as much as he—being a leftie— much. He praised Mr. Trump for nix- to do something to keep the populist Anna Sedgley, Chief Operating Officer Andrew Dowell, Asia; Neal Lipschutz, Standards; is supposed to. I hear that from a lot ing the Trans-Pacific Partnership and left inside the tent. Meg Marco, Digital Content Strategy; OPERATING EXECUTIVES: of my fellow progressives. pledging to renegotiate the North Mr. Trump isn’t the president Alex Martin, Writing; Michael W. Miller, Features Ramin Beheshti, Product & Technology; & Weekend; Shazna Nessa, Visuals; Kenneth Breen, Commercial; “Disgusting,” a friend in academia American Free Trade Agreement. He progressives would have chosen, but Rajiv Pant, Product & Technology; Ann Podd, News Jason P. Conti, General Counsel; told me as we discussed the separa- gently criticized Mr. Trump’s tariffs his appropriation of policies previ- Production; Matthew Rose, Enterprise; Tracy Corrigan, Chief Strategy Officer; tion of children from their illegal-alien on Chinese imports for not being ously championed only by Mr. Sand- Michael Siconolfi, Investigations; Frank Filippo, Print Products & Services; Nikki Waller, Live Journalism; Steve Grycuk, Customer Service; parents at the border. “But isn’t it “comprehensive.” ers may prove to be a neat trick. He Stephen Wisnefski, Professional News; Kristin Heitmann, Chief Commercial Officer; weird to just leave the border open?” Mr. Sanders has also praised some may neutralize enough of the Demo- Carla Zanoni, Audience & Analytics Nancy McNeill, Advertising & Corporate Sales; Centrists who supported Hillary of Mr. Trump’s foreign-policy moves: crats’ left flank that he won’t be de- Christina Van Tassell, Chief Financial Officer; Gerard Baker, Editor at Large Suzi Watford, Chief Marketing Officer; Clinton go crazy when Mr. Trump “While very light on substance, the spised enough, by enough of the Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International tweets. His gleefully crass style drives meeting between President Trump Democratic electorate, to bring Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher them bonkers. His contempt for iden- and Kim Jong Un in Singapore repre- about a wave election. WALL STREET JOURNAL MANAGEMENT: Professional Information Business: Joseph B. Vincent, Operations; Christopher Lloyd, Head; tity politics appalls them. Many pro- sents a positive step in de-escalating Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head gressives, on the other hand, are pri- tensions between our countries, ad- Mr. Rall is a political cartoonist

EDITORIAL AND CORPORATE HEADQUARTERS: marily motivated by economic and dressing the threat of North Korea’s and author of “Francis: The People’s 1211 Avenue of the Americas, New York, N.Y., 10036 class justice. That isn’t to say that the nuclear weapons and moving toward Pope,” the latest in his series of Telephone 1-800-DOWJONES Bernie Sanders people approve of a more peaceful future.” graphic novel-format biographies. .

A16 | Tuesday, July 3, 2018 ****** THE WALL STREET JOURNAL. WORLD NEWS Merkel, Balking Allies Strike Migrant Deal Standoff with accept asylum seekers being sent back to where they first Bavarian sister party registered claims. threatened to unravel Should Germany fail to se- cure such agreements—a dis- chancellor’s coalition tinct possibility after Italy’s new anti-immigration govern- BY ANDREA THOMAS ment said it wouldn’t take back AND JAMES MARSON refugees who leave the coun- try—German authorities would BERLIN—Germany’s gov- still deny entry to asylum seek- ernment stepped back from ers who turn up at the Ger- the brink of a full-blown crisis man-Austrian border, accord- Monday when Chancellor An- ing to Monday’s agreement. gela Merkel reached a last- This appeared to represent minute deal for tighter control a concession by Ms. Merkel, over immigration with her re- who previously insisted such bellious interior minister after rejections would have to be two days of talks. taken in concert with the gov- Interior Minister Horst See- ernments of the countries hofer announced the agree- where asylum seekers first en- ment late Monday after agree- tered the EU. ing to a final make-or-break In facing down the unprece- round of talks with Ms. Merkel dented challenge from within less than a day after offering her own conservative alliance, his resignation as minister and Ms. Merkel demonstrated the chairman of the Christian So- survival skills that have under- cial Union, the Bavarian sister pinned her more than 12-year party to Ms. Merkel’s Chris- rule as chancellor, even as the tian Democratic Union. events themselves showed

Speaking shortly after the PAUL ZINKEN/DPA/AGENCE FRANCE-PRESSE/GETTYhow IMAGES much her authority has deal was struck, Ms. Merkel German Chancellor Angela Merkel, right, with Interior Minister and Christian Social Union leader Horst Seehofer on Saturday. waned in recent years. praised it as a “really good com- The price of restoring peace promise” that would help regu- ernment would establish so- proved to be worth fighting for cal differences. party supported the funda- in her own ranks was high. In late the movements of asylum called closed centers near its a conviction. And what has But the drama and the level mental idea of such an acceler- seeking to placate the CSU, seekers within the European borders where asylum applica- now been agreed is really a of brinkmanship over the po- ated asylum procedure, though she all but abandoned the Union without creating tensions tions would be reviewed clear agreement that is very larizing issue of immigration their approval depended on 2015 open-door policy toward with Germany’s neighbors. quickly. He didn’t immediately sustainable for the future.” have raised doubts about the the details of the conserva- migrants that caused a politi- “This preserves the spirit of provide further details but The deal Monday appeared sustainability of Ms. Merkel’s tives’ agreement. cal backlash, slashing her partnership in the European said the deal would be suffi- to stave off a rupture in the left-right coalition and left the Party chairwoman Andrea party’s support in elections Union while at the same time cient for him to remain in his seven-decade alliance between chancellor bruised at the Nahles said after meeting with last year and emboldening taking a decisive step toward role as minister. the chancellor’s Christian hands of her closest partners. the conservatives following anti-immigrant forces at home organizing and managing sec- “We have a clear agreement Democratic Union and Mr. It wasn’t clear immediately the deal that it was too early and across Europe, including ondary emigration,” she said, on how to prevent illegal mi- Seehofer’s Christian Social after the announcement to assess it and the parties within her own coalition. a reference to migrants who gration in future on the border Union that had moved closer whether Ms. Merkel’s center- would meet again for delibera- “She had to correct herself come to Germany after regis- between Germany and Aus- Sunday when the interior min- left partners, the Social Demo- tions on Tuesday. here. And this correction is a tering applications for asylum tria,” Mr. Seehofer said. “I am ister unexpectedly said he was crats, were on board with the The deal would require ad- move to the right,” said in other EU countries. glad that this agreement has willing to resign over what he compromise. An official from ditional agreements with Tilman Mayer, a politics pro- Mr. Seehofer said the gov- been reached. It has once again said were unbridgeable politi- the Social Democrats said the other EU countries for them to fessor at Bonn University. U.S. Sanctions Echo Through Russian Factory Towns Company owned by billionaire freezes budget for communities; ‘The life of the city depends on that factory’

BY THOMAS GROVE

SAYANOGORSK, Russia— When the Trump administra- tion blacklisted Russia’s big- gest aluminum producer, United Co. Rusal, in April, it was among a blast of mea- sures aimed at the country’s elite. But the sanctions are al- ready weighing on the resi- dents of this Siberian factory town more than 2,000 miles

east of Moscow, where Rusal MAX AVDEEV FOR THE WALL STREET JOURNAL (2) and its smelter anchor the local economy. For most of the town’s his- The smelter is still running, tory, Rusal has been the life- employing more than 6,000 of Moscow blood of Sayanogorsk. Almost Sayanogorsk’s 45,000 resi- RUSSIA half of the city’s budget dents. But Rusal has frozen its Sayanogorsk comes from Rusal taxes. $24 million budget for commu- Those taxes—as well as other nity spending in company KAZAKH. company spending—have towns, including Sayanogorsk’s 500 miles MONG funded parks, hospitals and $3 million share, according to retirement homes. As alumi- a Rusal employee. “It was the Living standards in Sayanogorsk, Russia, have been buoyed by funding from aluminum maker Rusal. 500 km CHINA num prices have risen over first thing we had to look for The town was established in 1975 to house workers at a hydroelectric plant on the Yenisei River. THE WALL STREET JOURNAL. the years, so have the city’s to freeze,” the employee said. fortunes. “You take Rusal That means plans for up- that owns 48% of Rusal, and sanctions against smartphone political and economic com- are casting a pall over away, we’d be little more than grades to the Rusal-built hos- give up his seat on the EN+ maker ZTE Corp. have shut petitor of the U.S. Rusal’s 12 factory towns and orphans here,” said local ac- pital are on hold; the com- board. Mr. Deripaska had al- down a big part of the firm’s Mr. Putin warned that the 60,000 people that work tivist and opposition-party pany has put off consideration ready given up his seat. operations. Amid those ef- sanctions will do nothing in the company in and out- politician Vitaly Anisimov. of an expansion of the town’s Mr. Deripaska is one of the forts, Mr. Trump has also said more than unite Russians side the country. Immediately after the in- cultural centers and the reno- Russian businessmen targeted it is important to get along against the U.S. measures Sayanogorsk was estab- troduction of sanctions, which vation of a memorial wall in by U.S. sanctions because of with Russia and China; the and force the country to ex- lished in 1975 to house work- forbid financial transactions the town center. their perceived closeness to White House said Thursday pand its ties with China. ers at a hydroelectric plant and purchases from Rusal, the “The life of the city de- President Vladimir Putin. The that the president would hold Mr. Deripaska, however, built some 20 miles up the company’s exports dropped pends on that factory,” said sanctions, levied against a summit meeting with Mr. has agreed to distance him- nearby Yenisei River. The alu- 70%, though they have risen Nina Chvaniva, one of this more than three dozen Rus- Putin on July 16 in Helsinki. self from EN+, bowing to the minum smelter was opened slightly since. Aluminum has city’s deputy mayors. “Other- sian individuals and entities, The Russian leader has Trump administration de- 10 years later to feed off the piled up in factory ware- wise there is no Sayanogorsk.” represented a shift by the U.S. lashed out against U.S. sanc- mand that offered a reprieve plant’s power. It is here that a houses and ports. Rusal has Hanging over the town is from going after isolated tions, saying he sees the accu- for the company. The move young Mr. Deripaska cut his said it would continue to pro- an October deadline set by companies to targeting multi- sations against Russia for could help Rusal escape U.S. teeth, buying up shares in the duce, but that if it can’t find a the Trump administration for nationals that employ tens of “malign activities around the sanctions. Mr. Deripaska factory—and eventually ex- buyer for Mr. Deripaska’s Russian billionaire Oleg Deri- thousands of people in Russia globe,” including meddling in hasn’t commented on the panding his holdings to a stake that will satisfy Wash- paska to sell down his major- and overseas. U.S. elections, as a pretext to U.S. measures since he was more than 60% ownership of ington, it will have to cut its ity ownership in EN+ Group The same dynamic is play- restrain Russian might and sanctioned in April. Rusal, a collection of such operations, a move that PLC, the holding company ing out in China, where U.S. strike against its position as a Meanwhile, the sanctions smelters across Russia. would force job cuts. Rescuers Find Thai Youth Soccer Team Trapped in Cave Complex

BY JAMES HOOKWAY rescue teams to penetrate far- strength with food and water. season was in full flow. The ther into the 6-mile-long Tham The area around the cave Tham Luang caves are often BANGKOK—Rescuers found Luang cave in search of the entrance, meanwhile, is thrum- flooded from June to October. 12 missing boys and their soc- team and their coach. The ming with the sound of gener- Finding the team proved to cer coach deep inside a cave SEALs spent much of the past ators powering water pumps be an arduous technical chal- complex in northern Thailand, few days setting up relay sta- that have been flown in from lenge. On Monday, the SEAL and are now preparing to give tions with air tanks and other as far away as Bangkok in an teams and other rescuers them a crash course on diving equipment every 25 yards. effort to subdue the elements worked on widening the pas- so they can escape the flood- Local media showed images and make it easier for the boys sages inside. They drove deeper waters that trapped them 10 of family members weeping and their coach to get out. into the complex until the res- days ago. and hugging each other in relief “They are all safe, but the cuers’ instincts proved correct: Narongsak Osottanakorn, as news of the discovery broke. mission is not completed,” Mr. The boys had found refuge 400 Chiang Rai’s provincial gover- Given the weakened state of Narongsak said. “So far we have yards farther in than initially nor, told reporters Tuesday the group after 10 days trapped just found them. The next mis- thought, and all were safe and morning that if rescuers don’t beneath ground, concern is sion is to bring them out from accounted for. teach the soccer team scuba now turning to how to safely the cave and send them home.” The Thai SEALs later re- techniques, the boys might and quickly to extract them. The boys, ranging in age leased a video clip of the boys, face months waiting for Thai- The biggest problem is that from 11 to 16, entered the cave some still wearing their soccer land’s rainy season to end and some of the passages connect- after playing their regular Sat- shirts, sheltering on a raised the floodwaters to recede. ing the chambers of the cave urday match on June 23. Their outcrop of rock as British div- British cave diving experts are still fully submerged with coach, 25-year-old Ekkapol ers Rick Stanton and John Vol- and Thai navy SEALs found all muddy floodwaters. Rescuers Chantawong, sometimes took anthen approached. “How 13 people alive late Monday. are assessing whether the the team known as the Wild many of you? 13? Brilliant!” The breakthrough came after boys and their coach are able Boars on expeditions in addi- Mr. Stanton said. torrential rains eased, en- to make the arduous four-hour tion to coaching them, and they Some of the boys asked what

SOE ZEYA TUN/REUTERS abling a network of pumps to journey to the entrance while had been to the caves before. day it was. “Monday,” he said. Thai navy SEALs cheer the discovery of the 12 boys and their coach. reduce water levels and allow trying to build up their This time, however, the rainy “You’ve been here 10 days.” . TECHNOLOGY: LYFT TAKES SPIN IN BIKE-SHARING B4 BUSINESS&FINANCE

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S&P 2726.71 À 0.31% S&P FIN À 0.66% S&P IT À 0.99% DJ TRANS À 1.00% WSJ $ IDX À 0.40% LIBOR 3M 2.343 NIKKEI (Midday) 21805.73 g 0.03% See more at WSJMarkets.com Pfizer Again Raises Drug Prices Regulators A second round this lung-cancer treatment Xalkori, Pfizer, one of the world’s cines this month, according to less than medical inflation, Take Aim Norvasc blood-pressure pills biggest drug companies by the wholesale acquisition cost while also noting that its part- year comes even as and Lyrica pain capsules, ac- sales, said it commonly sells its data from Elsevier’s Gold Stan- ner has “final decision-making” industry as a whole is cording to drug-pricing data products at a discount and isn’t dard Drug Database, though on pricing and directing ques- At Private from RELX PLC’s Elsevier in- responsible for how much pa- most of them are smaller drug tions about the increase to the wary of public criticism formation business. Many lift tients must bear in copays or makers. French company. the list prices by 9.4% and by other out-of-pocket costs. Sanofi SA raised the price of Sanofi said the increase was Stake Sales BY JONATHAN D. ROCKOFF double-digit percentages for “The list price remains un- eczema treatment Dupixent by Dupixent’s first “since launch- BY JEAN EAGLESHAM the year overall. changed for the majority of our 3% on Friday, and the explana- ing last March, and is the only AND COULTER JONES Pfizer Inc. raised the list The moves separate Pfizer medicines. We are modifying tion for the move reflected in- planned increase for 2018.” prices for more than 40 of its from several rivals that have prices for about 10% of our dustry sensitivity to questions A round of drug-price in- Regulators are stepping up prescription drugs this week, pledged to lift list prices only medicines, including some in- about price increases, even creases in June or July is a enforcement on the sale of marking a second round of in- once every 12 months and by stances where we’re decreasing slight ones. standard, though less and less private stakes in companies, creases this year despite less than 10% overall for the the price,” the company said in Regeneron Pharmaceuticals common, practice for the in- following a Wall Street Jour- mounting public scrutiny. year as they try to blunt criti- a statement. Inc., Sanofi’s partner selling dustry and usually draws little nal investigation that found The increases apply to cism and avoid congressional Other drug companies Dupixent, said in a statement notice. Pfizer’s latest round, securities firms with unusually widely used drugs including action. raised the list prices of medi- that the drug’s price rise was PleaseturntopageB2 high numbers of troubled bro- kers selling tens of billions of dollars a year of these invest- STREETWISE ments, often targeting seniors. By James Mackintosh The Massachusetts chief fi- nancial regulator announced a probe on Monday into 10 bro- kerage firms in the state sell- ing investments, known as pri- Stocks vate placements, as a result of the Journal’s reporting. “Private placements are risky investments that reward Are Up the salesperson handsomely with high commissions,” said the Massachusetts regulator, William Galvin. Brokers with a Despite history of disciplinary actions “magnify the risk of unsuitable sales in connection with pri- vate placements,” he added. Troubles The North American Securi- ties Administrators Associa- Almost tion, which represents all state everything on regulators, said it plans to the list of work even closer with federal investor law enforcement to target bad concerns at actors following the Journal’s the start of reporting. the year has come true—yet Sales of private placements, U.S. stocks are up, even as which can be stakes in any- many of the world’s markets thing from a real-estate devel- suffer. Investors shouldn’t opment to an oil well, are expect this American booming: More than 1,200

exceptionalism to continue. NIC BOTHMA/EPA/SHUTTERSTOCK brokerage firms sold around The main worries in Swiss tennis star Roger Federer wore Uniqlo gear at Wimbledon Monday, as his 21-year sponsorship deal with Nike came to an end. $710 billion of private place- January were rising ments last year. Treasury yields, a too-good- The Journal found that to-be-true world economy, firms selling private place- Donald Trump’s policies, the Nike Out as Uniqlo Wins Federer ments tend to have higher return of volatility and numbers of brokers with red European politics. All have BY TOM PERROTTA Grand Slam singles titles. Mr. flags such as investor com- taken a turn for the worse, AND SARA GERMANO Getting Paid Federer, who will turn 37 plaints, regulatory actions or hammering assets in each Even before his new deal with Uniqlo, Roger Federer ranked among the years old next month, hasn’t criminal charges and are more area but leaving the U.S. WIMBLEDON, England— top-paid athletes. Estimated pay for the past 12 months: lost his winning form. At likely to be booted from the equity markets miraculously Roger Federer and Nike Inc. Wimbledon Monday, he easily industry. Around one in eight unharmed. are no more. Pay, in millions Salary Endorsements won his first match against brokers marketing private The first-half gain of The Swiss tennis champion Athlete Sport $0 50 100 150 200 250 300 Serbia’s Dusan Lajovic. placements carried three or 1.67% in 2018 was truly and current top-ranked player Floyd Mayweather Boxing Nike’s relationship with Mr. more red flags on their re- unusual: The S&P 500 has at Wimbledon emerged at the Federer dates to 1997. The cords, compared with one in swung up or down by less tournament on Monday wear- Lionel Messi Soccer world’s largest sportswear 50 in the broader industry, the only five times in the first ing a new uniform from Cristiano Ronaldo Soccer maker went to great lengths to Journal previously reported. half of a year since 1963. Uniqlo, marking the end of Conor McGregor MMA* recognize his success, design- Private placements are gen- Those smaller moves weren’t more than two decades of ing a sneaker in collaboration erally subject to less policing propitious for investors, led sponsorship by Nike. Neymar Soccer with basketball star Michael and have fewer rules about by the calm of the six “I was excited to wear LeBron James Basketball Jordan and naming a walkway what financial information to months to June 2015, just Uniqlo today,” he said after his on Nike’s Oregon campus in disclose to investors than the Roger Federer Tennis before China’s devaluation match, in a black hoodie. “It’s Mr. Federer’s honor. more transparent public mar- sparked widespread been a long time coming.” Stephen Curry Basketball Uniqlo, which is owned by kets, like stocks and bonds. Fast Retailing concerns about its economy Mr. Federer’s new deal with Matt Ryan Football Co. of Japan, The Massachusetts-based and a 10% correction in the Uniqlo is valued at roughly has expanded rapidly by focus- firms targeted in the state’s S&P. $300 million over 10 years, ac- Matthew Stafford Football ing on insulated basics and probe include Moors & Cabot The other calm periods cording to people familiar *Mixed Martial Arts Source: Forbes THE WALL STREET JOURNAL. wardrobe staples. Inc., which the Journal found look like a roster of times to with the matter. The outer- Yet Uniqlo isn’t a tennis- was among 25 firms selling sell: June 2000, shortly wear brand announced Mr. spokeswoman. “However, we The break with Nike comes shoe manufacturer. Mr. private placements with the before the dot-com crash Federer as a new spokesman are thankful and proud to have as Mr. Federer begins his de- Federer donned Nike sneakers highest number of red flags spread into the wider on its Twitter feed Monday. been a part of Roger’s incredi- fense of his 2017 Wimbledon in his Wimbledon entrance per broker. markets; June 1990, the last “We do not comment on ble journey and wish him the trophy, in an attempt to ex- Monday. He plans to stick with More than one-third of its month before a recession; athlete contracts,” said a Nike best in the future.” tend his standing record of 20 the shoes, at least for now. PleaseturntopageB2 June 1978, two months after the inflation that would ravage real portfolio valuations began to INSIDE accelerate; and June 1965, Whole Foods Riles Workers, Suppliers which was followed by a brief boom before the 1966 BY HEATHER HADDON bear market (a decade later AND LAURA STEVENS the S&P was still at the same level as in June 1965). Amazon.com Inc. has in- There is nothing in a six- fused Whole Foods with its ef- month change that would ficient, data-driven ethos in matter to statisticians, so the year since it bought the this may well be nothing natural grocer. But not all more than luck. But there Whole Foods employees and are reasons to be concerned, suppliers are happy about and they are mainly the POULTRY PECKS that. same reasons that held at Suppliers say they are an- the start of the year. AWAY AT BEEF’S gry at the higher rates Whole The first is the Federal BURGER RULE Foods now charges them to Reserve. Investors think it sell their products there, with has become more hawkish, some refusing to sign new with the probability priced BUSINESS NEWS, B5 contracts. At Whole Foods into federal-funds futures of stores, hundreds of layoffs a total of four rate rises this have upset workers and led to year up from 9% in January calls for unionization. to 41% on Monday, according “There has never been a to CME Group. Treasury time in Whole Foods’ history yields have risen, too, and more ripe for widespread la-

even worse is that the link bor organization,” a group of DANIA MAXWELL/BLOOMBERG NEWS between stocks and bonds employees wrote in a letter A Whole Foods in Burbank, Calif. Suppliers are being charged more to sell products at the chain. seems to be breaking down. last month as part of their ef- In the past two decades forts to organize workers. since the takeover, as consum- chase closed have been grad- founder John Mackey is still at higher yields have typically Amazon and Whole Foods ers respond to new delivery op- ual and considered, and many the helm and continues to been strongly tied to rises in spokeswomen declined to tions and enhanced benefits for said they were relieved that spend time in the company’s stocks, as a stronger RIDING THE comment. Amazon Prime members. Whole activist investors are no lon- stores, talking to employees economy pushes up both. A year after Amazon bought Foods recently introduced 10% ger putting pressure on Whole and checking out the grocer's This year so far the six- RAILS PARISIAN Whole Foods for $13.5 billion, discounts for Prime members at Foods, as they were in 2017 af- operations. month correlation of daily STYLE the e-commerce company is all of its 460 stores, and it of- ter two years of falling sales Still, Amazon is exerting its changes in the S&P and the making its mark on the nation’s fers two-hour delivery service and before the chain sold itself influence. Whole Foods has 10-year Treasury yield, a largest natural and organic su- in 19 cities. to Amazon. hired workers from Amazon, formal measure of the link, PROPERTY REPORT, B6 permarket. Year-over-year sales Employees said Amazon’s One thing that hasn’t including a new head of com- PleaseturntopageB10 at Whole Foods stores are up changes since its August pur- changed: Whole Foods co- PleaseturntopageB4 .

B2 | Tuesday, July 3, 2018 **** THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE

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.

A Goldman Sachs GroupA1 R Adamis Pharmaceuticals GSR Capital...... B3 Reis...... B2 ...... B2 H Return Path...... A1 ADT...... A1 Hershey...... B12 S Airbnb...... A1 Hormel Foods...... B5 Sinochem...... B5 Alphabet...... A6,B10,B11 J Social Finance...... B10 Amazon.com...... B1,B3 Spotify Technology.....A1 Apple...... A6,B11 J Sainsbury...... B3 K Starbucks...... B2,B3 B Syngenta...... B5 Kroger...... B3 BJ's Wholesale Club T Holdings...... A1 L Tesco...... B3 C L'Oréal...... B12 Tesla...... B3,B12 Carrefour...... B3 LPL Financial...... B2 Third Point...... B12 Champion Petfoods Lyft...... A4,B4 Thor Equities...... B6 ...... B2,B12 M Tyson Foods...... B5 Colgate-Palmolive...... B4 Microsoft...... A1 U Contactually...... A6 Moors & Cabot...... B1 Uber Technologies...... A1 CoreCivic...... A3 Morgan Stanley...... A1 Unibail-Rodamco- D Motivate International Westfield...... B6 Dell Technologies B3,B12 ...... B4 United Co. Rusal...... A16 Dropbox...... A1 N Uzabase...... B5 E Nestle...... B2,B12 V Earny...... A6 Nike...... B1 Vanguard Group...... B10 eDataSource...... A6 Nissan Motor...... B3 Verizon Communications Edison Software...... A1 Novartis...... B2 ...... A6 EN Group...... A16 O-P VMware...... B3,B12 F-G Ocado Group...... B3 W Facebook...... A6,B4,B11 Pfizer...... B1,B2 Walmart...... B3 MARK RALSTON/AGENCE FRANCE-PRESSE/GETTY IMAGES Fast Retailing...... B1 PricewaterhouseCoopers Walt Disney...... B5 The company’s pet-care operation generated sales growth of 3% last year, which was second only to the coffee division’s growth. GEO Group...... A3 ...... B10 WeWork...... A1 INDEX TO PEOPLE Nestlé, Pet-Food Maker Talk Deal Nestlé SA is angling to take care, bottled water and coffee dog nutrition business in the are growing faster than their B Giunta, Stephen...... B5 Papadakos, Peter...... B6 control of Canada’s Champion amid pressure from U.S. activ- U.K., for an undisclosed more traditional rivals as Band, Zvi...... A6 Godbert, Faustine...... B6 R Petfoods for more than $2 bil- ist investor Daniel Loeb. Since amount. health-conscious consumers in- Goldston, James...... B5 Blankfein, Lloyd...... A1 Read, Ian...... B2 lion, according to people famil- then, the company has made Nestlé’s pet-care operation creasingly do for their pets Blumberg, Matt...... A6 H Reback, Brad...... B3 iar with the matter, as the con- several deals, including its $7 generated organic sales growth what they have done for them- billion acquisition of the rights of 3% last year, second only to selves by favoring natural food Bompard, Alexandre...B3 Hickley, Marie...... B6 Risi, Karin...... B10 Ben Dummett to sell Starbucks Corp.’s coffee the coffee division’s growth on and high-end treats—a trend Brin, Sergey...... A6 By , I Ronen, Assaf...... B10 Dana Mattioli and tea in grocery and retail an organic sales basis, which that has had many packaged- Buckley, Mortimer J.B10 Ifill, Sherrilyn...... B3 Ross, Brian...... B5 and Dana Cimilluca stores. excludes such factors as for- foods companies playing catch- C K S Still, Mr. Loeb remains dis- eign-exchange fluctuations. By up. sumer-goods giant seeks out satisfied with these efforts. On comparison, the company’s Champion sells its dog and Cagney, Mike...... B10 Kaprelian, Jeff...... B11 Schneider, Mark...... B12 higher-growth businesses to Sunday, he made public a letter confectionery and prepared- cat food under the Orijen, and Cook, Ian...... B4 Schwartz, Rhonda...... B5 L help offset its struggling pack- to Nestlé Chief Executive Mark dishes and cooking-aids busi- Acana brands, listing fresh Cuvillier, Christophe...B6 Silverblatt, Howard..B10 Lam, Jennie...... B10 aged-foods operations. Schneider and the board, criti- nesses grew by 0.3% and 2.2% meat, free-run poultry and Simons, Thomas...... B11 D Loeb, Dan...... B12 Nestlé is in talks to acquire a cizing the company for not respectively. wild-caught fish among the in- Dell, Michael...... B3 M T majority stake in the closely selling underperforming and The acquisition of Champion gredients it uses. Donohoe, Tony...... B10 held maker of specialty cat and nonstrategic businesses quickly could help Nestlé sustain the The company sells its prod- Mackey, John...... B1 Tanona, Bill...... B10 Dujardin, Cedric...... B6 Thin, Win...... B11 dog food, whose owners in- enough and described the com- momentum of its pet-food op- ucts in more than 80 countries McGhee, Heather...... B3 clude Toronto buyout firm Bed- pany’s strategic approach as eration, while providing the through a network of pet-food Turkel, Bruce...... A10 F Metz, Eric...... B12 ford Capital. The talks, how- “muddled.” Edmonton, Alberta-based com- distributors and veterinarian Federer, Roger...... B1 N V ever, could still break down. Switzerland-based Nestlé is pany with a broader customer practices, as well as in-store Field, Doug...... B3 Ning, Gaoning...... B5 Vakrat, Oded...... A6 The interest in Champion already established in the pet- base. and online, according to its Friedman, David...... B5 Noto, Anthony...... B10 W comes about a year after Nestlé food market through its well- Champion, as a closely held website. first disclosed a far-reaching known Purina brand. In April, it company, doesn’t disclose fi- G P Weinstein, Harvey...... A3 plan to revive its stock price by acquired a majority stake in nancial information. But it and Heard: Nestlé’s activist needs Galvin, William...... B1 Page, Larry...... A6 Wilkinson, Rob...... B6 investing in areas such as pet Tails.com, a direct-to-consumer other natural pet-food makers to be patient ...... B12 Regulators Mall Vacancy Rate at Highest Level Since 2012 Focus on BY ESTHER FUNG centers, for example, increased ping centers, although some lif., said he visited Toys “R” Us space, far more than Canada’s during the last quarter in 55 of landlords are finding other regularly when he was grow- 16 square feet per capita, Aus- Stake Sales Malls are the emptiest they the 77 metropolitan areas uses for the space, transform- ing up, but the store fell be- tralia’s 11 square feet and 5 have been since 2012, when studied by Reis. ing them into gyms, call cen- hind the competition. Lately, “I square feet in the U.K. the U.S. economy was still The impact is especially se- ters and even churches. only went to the store when I Not all is gloomy in the re- Continuedfromthepriorpage struggling to recover from the vere among strip malls and Space has been emptied by need an emergency gift for a tail world. Some well-located approximately 135 brokers last recession. other neighborhood and com- a steady decline of some of the baby shower or birthday I for- malls that cater to more-afflu- have at least one red flag, ac- The vacancy rate reached munity shopping centers, most-iconic retail names. Bon got to shop for,” he said. ent consumers are still seeing cording to the Journal’s analy- 8.6% in the second quarter, up which suffered their worst Ton Stores Inc., Sears Holdings In the first quarter, e-com- strong tenant demand and rent sis. A representative of Moors from 8.4% in the first quarter, quarter in nine years. About Corp. and J.C. Penney Co. are merce sales accounted for 9.5% growth. Reis data showed that & Cabot didn’t have an imme- as more consumers shifted 3.8 million square feet of space among big names that have of total retail sales after ad- mall rents grew by 0.3% in the diate comment Monday. their shopping online, accord- was emptied from April to sharply reduced the number of justing for seasonal variations, second quarter despite rising The biggest firm in the ing to data from real-estate re- June, pushing the vacancy rate stores in recent years. up from 9.1% in the previous vacancies. probe is LPL Financial LLC. A search firm Reis Inc. The high- for this type of mall up The last Toys “R” Us stores quarter, according to data Some retailers are recogniz- spokesman for LPL said it was est postrecession vacancy was to 10.2%, Reis said. closed on Friday after a re- from the U.S. Census Bureau. ing that having a brick-and- reviewing the state regulator’s in the third quarter of 2011, Local governments that de- structuring attempt failed. In Retail landlords also have mortar presence reinforces request for information. when it hit 9.4%, Reis said. pend on retailers to create jobs March, when it announced the suffered from a glut of new their online efforts. Even Ama- “Based on the Journal’s re- The shopping slowdown is and generate tax revenue are liquidation of U.S. stores, the shopping centers that were zon.com Inc. has begun to porting, state and federal reg- being felt in all types of brick- among those feeling the pain. company had roughly 800 built in the years leading up to open stores. “A store can still ulators need to work even and-mortar retail outlets The rising vacancies also are stores in the country. the 2008 financial crisis. For reach new shoppers,” said Tif- more closely together,” said throughout the country. Va- pockmarking the suburban Xander Chou, a 40-year old every person in the U.S., there fany Hogan, senior analyst at Joseph Borg, president of the cancies in open-air shopping landscape with empty shop- resident of Mountain View, Ca- are 24 square feet of retail Kantar Consulting. state regulators association and Alabama securities com- missioner. “And that’s exactly what we’re planning.” Pfizer Lifts Prescribing Prices EpiPen Alternative amis, a San Diego startup, Lawyers who represent in- Pfizer raised the list prices of more than 40 of its prescription drugs Gains Sales Clout never launched the product vestors with claims against this week. Here’s a small sample: and instead hired an invest- brokerage firms and brokers Prices on ment banker to find a commer- welcomed the regulators’ CHANGE cial partner for it. Sandoz, one DRUG/PRICE IN PRICE ramped-up efforts but were Swiss drug giant Novartis of the biggest generic-drug Some Drugs Lipitor 20mg (90 tablets) skeptical of the outcome. AG has bought the U.S. com- makers, plans to begin selling “We have heard the refrain $1,402.31 9.4% mercial rights to sell a poten- it in the U.S. after virtually every major in- Continuedfromthepriorpage tially lower-cost alternative to Mylan came under criticism Neurontin 800mg (100 tablets) vestment scandal that regula- which was first reported by the Mylan NV’s EpiPen, the emer- in 2016 for boosting the list 9.4 tors will work closer and coor- Financial Times, comes after $1,325.61 gency treatment for allergic re- price for an EpiPen two-pack dinate,” said Andrew President Donald Trump, in actions that has been dogged to more than $600, up 550% Norvasc 10mg (90 tablets) Stoltmann, president of the May, said he expected some big by pricing and supply chal- since acquiring the prod- 9.4 Public Investors Arbitration drug companies to make “mas- $840.09 lenges. uct in 2007. It has since Bar Association. “Unfortu- sive” price cuts. Novartis’s Sandoz ge- started selling a generic Celebrex 100mg (100 capsules) nately, it simply doesn’t hap- The price increases help neric-drug unit acquired version for about $300. 9.4 pen.” drug makers meet financial- $804.43 the U.S. commercial Mylan also has ex- Private placements can of- growth targets, especially rights for an emer- perienced supply Lyrica 150mg (90 capsules) fer better returns than pub- when key products are losing gency shot called shortages for 4.0 licly traded stocks and bonds, sales to lower-cost generic ver- $695.59 Symjepi from EpiPen this year but are generally riskier and sions. Yet many companies Chantix 1mg (56 tablets) Adamis Pharma- because of harder to trade. pledged in recent years to ceuticals Corp., problems at a 7.0 Former regulators said pri- make just one increase a year $429.34 the companies said Pfizer Inc. manufac- vate placements can attract and nothing totaling more than Zoloft 100mg (30 tablets) late Sunday. The deal turing plant that bad actors because of the lax 10% after the rising prices of means Mylan will face makes the product. $318.62 9.4 policing and high commis- EpiPen allergy treatments and competition from an in- Sandoz didn’t say sions. “The Journal’s findings other drugs sparked criticism Source: Elsevier's Gold Standard Drug Database THE WALL STREET JOURNAL. dustry heavyweight, when it planned to be- further show the need for from doctors, hospitals and pa- though Symjepi isn’t an gin distributing tough policing in this space,” tients and hearings in Con- have kept rising, and the trend drug affordability that is the exact copy of EpiPen Symjepi in the U.S., or said Brad Bennett, a former gress. has remained a political issue problem,” Mr. Read said in May so some patients how much it would chief of enforcement at Finra The restraint has curbed the in Washington. In May, the at an event in Washington held may stick with the cost. and now a partner at law firm rise in list prices for brand- Trump administration issued a by the news organization Polit- more familiar brand. Adamis hopes Baker Botts LLP. name medicines overall. plan to combat high drug ico. Symjepi contains Symjepi will be a A spokeswoman at the Fi- “Sub-6.0% inflation levels are prices. Among the drugs whose list the same active ingredi- “cheaper alternative” to nancial Industry Regulatory here to stay,” Raymond James Pfizer Chief Executive Ian prices Pfizer raised this week ent, epinephrine, as Mylan’s generic version Authority said private place- analyst Elliot Wilbur wrote in a Read has been among the most are big sellers for the company, EpiPen, which is used to of EpiPen, Adamis spokes- ments have “long been an ex- note to investors Monday. List vocal industry executives push- such as Chantix smoking-cessa- treat anaphylaxis caused by man Mark Flather said. amination priority and con- prices for generic drugs have ing back against the criticism, tion pills. On July 1, the price insect bites and Adamis shares tinue to be an area of focus” in been falling. noting that spending in the U.S. of a bottle of 56 tablets rose 7% foods, among other Symjepi treats jumped 50% to its oversight of the brokerage Drug companies say they on prescription drugs has held to $429, after a 9.4% increase allergic reactions. allergic reactions. $4.80 on Monday. industry. aren’t profiting much from in- relatively steady as a percent- in January, according to El- Symjepi comes in a Dennis J. Carlo, A Securities and Exchange creases, because they offer dis- age of overall health-care sevier’s drug-price database. prefilled syringe, which Adamis Adamis’s chief executive, ac- Commission spokesman said counts and rebates off the list spending. The list price for a month’s says could make it cheaper knowledged in February that that “cases involving private price to win contracts with the Mr. Read also has blamed supply of Viagra rose 9.4% to than EpiPen, which comes in the search for a commercial placements have long been middlemen that manage drug health plans for raising the $2,211 on July 1, after a similar an auto-injector device that partner for a U.S. rollout of and continue to be a core part benefits for health plans and out-of-pocket costs for patients price increase for the male-im- conceals the needle. Symjepi was taking longer of our enforcement program, decide which medicines to re- by increasing copays and de- potence treatment on Jan. 1. U.S. regulators approved than expected. particularly when retail inves- imburse. ductibles. —Joseph Walker Symjepi in June 2017 but Ad- —Peter Loftus

tors are the victims.” Yet for many patients, costs “It’s not drug pricing. It’s contributed to this article. AUDACITY HEALTH/ADAMIS PHARMACEUTICALS/ASSOCIATED PRESS . THE WALL STREET JOURNAL. Tuesday, July 3, 2018 | B3 BUSINESS NEWS Tesla’s TopEngineer Leaves Departure occurs as layed goal of building 5,000 develop new products, includ- Tesla has struggled to bring Model 3 cars a week, Tesla said ing the Model Y compact sport- out the Model 3, which is auto maker sets new on Monday that it aims to in- utility vehicle that Mr. Musk priced lower than its other lux- production target for crease the output to 6,000 a has said he wants to unveil in ury vehicles as part of a plan to week by late August. The elec- March and begin production in transform the company into a mass-market sedan tric-vehicle maker has spent the first half of 2020. more mainstream auto maker. the past year struggling to A key leader at Tesla since At least 50 vice presidents BY TIM HIGGINS meet production goals for the joining in 2013 from Apple Inc., or higher-ranking executives Model 3, twice missing the Mr. Field oversaw the engineer- have departed over the past 24 Tesla Inc.’s engineering 5,000-a-week target for what is ing of the company’s vehicles months, according to people fa- chief won’t return from his considered Tesla’s first mass- and last year was given over- miliar with the company, partly leave of absence, a person fa- market offering. sight of production until Chief because of its purchase of So- miliar with the situation said, The auto maker on Monday Executive Elon Musk resumed larCity Corp. Mr. Musk sees ex- as the auto maker heads into a also reaffirmed that it expects that role last spring. ecutive turnover as being in pivotal period to prove it can to have positive cash flow and Mr. Field is credited for line with other large companies sustain production of the post a profit in the third and helping make the Model 3 eas- and has announced plans for a Model 3 sedan. fourth quarters. Keeping up the ier to build by simplifying engi- management reorganization Doug Field, who had been 5,000-a-week production pace neering complexity that aimed at flattening the layers senior vice president of engi- is key to Tesla meeting its plagued previous vehicles. of managers. neering, stepped away from his cash-flow forecast. Mr. Field’s departure is one work overseeing product devel- Beyond ramping up Model 3 of several by high-level execu- Heard on the Street: Tesla’s opment at the Silicon Valley production, Tesla is racing to tives over the past two years as triumph goes only so far.. B12 auto maker in early May. At the time, a Tesla spokesman said, “Doug is just taking some time Nissan Unplugs Deal facturing operations in Smyrna, technology.

ELAINE THOMPSON/ASSOCIATED PRESS off to recharge and spend time Tenn., England and Japan. GSR Chairman Sonny Wu The company plans to hold a conference next year for its 15,000 with his family. He has not left For Battery Business Nissan said on Monday it had said the deal represented store managers and leaders, focused on bias and inclusiveness. Tesla.” had been aiming to complete an important step for the com- People familiar with the the deal by the end of June but pany in entering the “new en- move believed at the time he TOKYO—Nissan Motor Co. GSR Capital couldn’t provide ergy vehicle industry chain.” would return six weeks later, said it scrapped a plan to sell the necessary funds. Batteries are among the Report Criticizes but he hadn’t. its battery business to GSR A spokesman for GSR Capi- most sought-after areas of In a statement on Monday, Capital after the Chinese in- tal didn’t immediately respond technology because leading car the company said: “After al- vestment firm was unable to to a request for comment. makers have said they plan to Starbucks Over most five years at Tesla, Doug pay for the deal. Nissan has been seeking to boost the proportion of their Field is moving on. We’d like to The companies agreed last get out of the battery-making sales from electric cars. thank Doug for his hard work in August that GSR would buy business for some time. Chair- South Korea and Japan over the years and for every- the majority of Nissan’s elec- man Carlos Ghosn has said he have some of the battery in- Its Diversity Policy thing he has done for Tesla.” tric-car battery operations for prefers for Nissan to purchase dustry’s leading companies, Mr. Field couldn’t be an undisclosed sum. The deal batteries because several sup- with China in fast pursuit. BY RACHEL FEINTZEIG said, teaching participants reached for comment. included Nissan’s battery-manu- pliers compete on price and —Alastair Gale about “being mindful of trig- After reaching its long-de- Starbucks Corp. should au- gers and pausing to make dit its stores for prejudice thoughtful decisions that move against customers, review the beyond bias.” The company racial diversity of its staff and also plans to hold a conference help pay for antibias training next year for its 15,000 store for local police, according to a managers and leaders, focused report compiled by outside ex- on bias and inclusiveness. perts advising the coffee chain Donte Robinson and Rashon on its diversity efforts. Nelson, the two men arrested The report was released after the Starbucks manager Monday by Sherrilyn Ifill, called the police, also had rec- president and director-counsel ommendations for Starbucks in of the NAACP Legal Defense the report: They want the com- and Educational Fund, and pany to develop a “customer Heather McGhee, distinguished bill of rights” that would be senior fellow of the think tank displayed at each cafe. They Demos. also want Starbucks to donate The pair came on as advisers money toward college readi- to Starbucks after an incident ness and SAT prep programs in in April when a store manager Philadelphia schools as well as in Philadelphia called the police to “an initiative to increase after two black men who hadn’t trust between communities and law enforcement.” “We decided to turn what happened to us into something The critique by positive by using this moment outside advisers as a call to action,” Mr. Nelson said in a statement released follows an incident at Monday by his attorneys. “We a Philadelphia store. stand ready to work with Star- bucks and other businesses that are committed to ensuring public spaces are inclusive and purchased anything didn’t leave free from discrimination.” the store when asked. The NAACP Legal Defense

Ms. Ifill and Ms. McGhee Fund and Demos examined the STEPHEN LAM/REUTERS urged Starbucks to revamp how company’s store manual and The company constructed a tent at its factory in Fremont, Calif., to help it reach its goal of producing 5,000 Model 3s a week. it hires, trains and promotes the handbook that Starbucks staff, including evaluating man- gives to workers and described agers on goals around “cultural the company’s policies as “con- competency and management fusing,” adding that “ad hoc of diverse teams.” unwritten policies” dissemi- Grocery Giants Flex Their Muscle “Bluntly, some managers and nated at the store level can even corporate leadership may lead to discrimination. Two of the world’s biggest for resale, like cleaning supplies. Amazon has also ramped up in the U.K.’s grocery market. not have a future with the com- The report also suggested grocery chains, Tesco PLC and Financial terms weren’t dis- its fresh-food delivery service in That deal is expected to pres- pany under the new standards,” that Starbucks should train Carrefour SA, will collaborate closed. “The details are very the U.K. In France, it struck a sure Tesco. they wrote. employees on when to reach on how they buy from suppliers much still being worked out,” a deal with Casino Guichard-Per- Tesco and Carrefour have A Starbucks spokeswoman out to community resources in an effort to cut prices amid Tesco spokeswoman said. rachon SA to deliver items from moved to beef up their online said Monday in a statement instead of the police—for ex- The deal, which was an- that company’s Monoprix chain. delivery and technology. that the company had a pro- ample when dealing with the By Saabira Chaudhuri nounced Monday, is the latest Amazon’s inroads into the Alexandre Bompard, Carre- gram for executives “to estab- homeless. It encouraged the in London and Nick in a string of moves by tradi- grocery sector have struck fear four chief executive, in January lish and track diversity goals” company to tally up store calls Kostov in Paris tional grocers as they race to into supermarket chains world- pledged to invest €2.8 billion and that it routinely evaluates to law enforcement, suggest- compete with Amazon’s grow- wide and prompted a number of ($3.27 billion) in digital com- its “employment processes to ing that Starbucks should re- mounting competition from Am- ing food ambitions and rapidly recent deals. merce by 2022 and grow online determine if there are any bar- view stores that reach out to azon.com Inc. and other rivals. changing shopper behavior. Kroger Co., America’s largest food sales to €5 billion in five riers for minority and female police five or more times in a Tesco, Britain’s largest gro- Online shopping, discounters chain, in May said it would in- years—a sixfold increase over partners.” set period. cery chain, and Carrefour, the and meal-delivery services all crease its stake in British online last year. Starbucks also said it would “Make clear in company pol- French giant, said they would are eating into once-reliable delivery specialist Ocado Group Tesco last week said it would start releasing training mod- icy that law enforcement jointly source certain products profit margins. PLC and license its technology test a checkout-free method of ules on bias later this summer, should only be called to ad- to lower prices, raise quality and The announcement comes to run automated warehouses payment for its convenience with a total of 12 set for the dress criminal activity or broaden their offerings. just over a year after Amazon and process online orders. stores that would allow shop- next year. Half of them, to be threats to public safety,” Ms. If- The deal, which the compa- said it would buy Whole Foods Analysts said Amazon’s ambi- pers to scan products on their delivered via iPads, will be ill and Ms. McGhee wrote. nies said would initially last for $13.7 billion. Since then, Am- tions also were partly responsi- mobile devices and then leave geared toward managers and The pair also want Starbucks three years, will give them more azon has slashed prices and ble for Walmart Inc.’s decision with them. Last year, it became half toward employees. The to push for antibias training for leverage with suppliers. It will used the Whole Foods network in April to sell its British arm the first retailer to offer a same- first is set to cover “mindful police departments in areas cover joint purchasing of store- of stores to ramp up its online- Asda Group Ltd. to J Sainsbury day grocery delivery service decision making,” the company close to Starbucks cafes. brand products and goods not grocery business. PLC, creating the largest player across the U.K. Dell and CEO Return to Public Spotlight ADVERTISEMENT The Marketplace BY JAY GREENE nounced plans to buy the Street questioned the law’s im- products business growing To advertise: 800-366-3975 or WSJ.com/classifieds shares that track its stake in pact on heavily indebted com- 22% to $16.67 billion in the When Dell Inc. closed the the fast-growing software panies. quarter that ended May 4, biggest technology merger in company VMware Inc.—a There is “no doubt” the tax driving 19% overall net reve- TRAVEL BUSINESS OPPORTUNITIES history nearly two years ago, move that would make Dell a change pushed Dell to look for nue growth to $21.36 billion. the company’s namesake publicly traded company again. “creative ways to reduce its But Dell’s return to a public Save Up To 60% founder said the new entity The share-swap decision debt load and likely simplify company comes as corporate     First & Business would enjoy its freedom away came after a monthslong stra- its capital structure,” said Brad computing is evolving. In the INTERNATIONAL from the glare of Wall Street tegic review as Dell wrestled Reback, an analyst with Stifel five years Dell was privately Major Airlines, Corporate Travel and its obsession with quar- with a bulging debt load built Nicolaus & Co. held, cloud computing has Never Fly Coach Again! terly earnings. through a $25 billion leveraged But Mr. Dell pushed back on soared, diminishing legacy www.cooktravel.net       On Monday, Michael Dell buyout in 2013 that took the the notion the change in U.S. companies that sell hard- (800) 435-8776       said he was ready to go under company private and the EMC tax law had anything to do ware—Dell’s key businesses as       the spotlight again. “I did that deal, which added tens of bil- with the company’s decision to a maker of servers and storage         for 25 years, and obviously I lions of dollars more to the be publicly traded again. “The gear. THE   know what I’m getting myself pile. change in the tax law was not Corporate customers are in-       into,” he said in an interview. Dell Technologies had been any material change to the fi- creasingly renting computing MARKETPLACE       Mr. Dell’s company, now paying roughly $2 billion a nancial condition of the com- services from companies such ADVERTISE TODAY known as Dell Technologies year in interest on that debt pany,” Mr. Dell said. as Amazon.com Inc. rather      Inc., is a one-stop shop for cor- when Congress passed legisla- Mr. Dell and the company than buying their own hard- (800) 366-3975    !"# $ For more information visit: porate-technology services tion at the end of 2017 that declined to comment further ware. wsj.com/classifieds   that was formed through the eliminated a big chunk of the on the tax impact. $67 billion merger of Dell and deductions companies can Dell has performed well in a Heard on the Street: Dell’s © 2018 Dow Jones & Company, Inc. All Rights Reserved. EMC Corp. On Monday, it an- make on such payments. Wall strong tech market, with its deal won’t be easy...... B12 .

B4 | Tuesday, July 3, 2018 **** THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech Lyft Takes Spin in Bike-Sharing Probe Into Ride-hailing company Facebook to purchase Motivate, which offers bicycles Adds FBI for short-term rentals And SEC BY GREG BENSINGER BY GEORGIA WELLS

Ride-hailing firm Lyft Inc. The federal investigation said it agreed to purchase an into how Facebook Inc. has urban bike-rental company handled information about its recognizable by its curbside users is getting bigger. docking stations and sponsors The social-media giant has such as Ford Motor Co. and received questions from the Se- Citigroup Inc. curities and Exchange Commis- The deal for Motivate In- sion and Federal Bureau of In- ternational Inc. gives Lyft ac- vestigation, according to a cess to thousands of bicycles person familiar with the matter. for short-term rental and a po- The SEC and FBI join the tential advantage over bigger Justice Department and Fed- rival Uber Technologies Inc., eral Trade Commission in which recently bought smaller probing how the political ana- dockless bike-rental company lytics firm, Cambridge Analyt- Jump. ica, which aided President Lyft is spending about $250 Donald Trump’s 2016 presiden- million in cash for the New tial election, purchased data on York City company, according 87 million users of Facebook to people familiar with the without their consent. matter, which compares with Facebook and Cambridge An- $200 million for Uber’s deal. alytica officials have provided The two rivals are clamor- conflicting accounts of what the ing to provide riders with op- social-media giant knew about tions for short trips within cit- how the data were going to be

ies as scooters and bicycles DAVID PAUL MORRIS/BLOOMBERG NEWS used by Cambridge Analytica. have become a popular option. Motivate International, whose sponsors include Ford, holds exclusive deals to provide bike-sharing in cities such as San Francisco. “We are cooperating with of- Venture-capital firms have ficials in the U.S., U.K. and be- poured hundreds of millions of Lyft will gain about 30,000 Motivate has one advantage for rental. functions, which include bicy- yond,” a spokesman for Face- dollars into upstart electric- bikes in eight U.S. cities from over Jump and other bike- Motivate took in about cle maintenance and servicing book said. “We’ve provided scooter-rental companies such San Francisco to New York. rental firms, such as Neutron $100 million in revenue last operations, will fall under a public testimony, answered as Bird Rides Inc. Customers can rent them for Holdings Inc.’s Lime, that plan year, with roughly half of that new, separate company retain- questions, and pledged to con- Bike-sharing, scooter rent- intervals of 30 minutes typi- to bring thousands of bikes to sum coming from sponsors ing the Motivate name, ac- tinue our assistance as their als and even flying taxis are cally for $3, or $10 to $12 for a U.S. cities: exclusivity. In New who adorn the company’s cording to Lyft. work continues.” attractive to the largest ride- day pass, depending on the York, San Francisco and else- bikes with their logos, accord- App-based transportation The Washington Post previ- hailing companies because city, and must return them to where, Motivate has negoti- ing to people familiar with the companies have resisted work- ously reported the broadening they offer customers a other docking stations. ated exclusive deals to be the matter. ers from forming unions, in- of the investigation. cheaper and often quicker Uber’s Jump, available in lone provider of bike-sharing Lyft carefully structured cluding in Seattle where Uber Representatives for the FBI, means to travel within dense just a handful of cities, is $2 services. That means other the transaction to avoid add- and Lyft drivers have at- SEC, FTC and Justice Depart- cities. Uber has said the aver- for 30 minutes and the bikes outfits will have to reach deals ing about 600 Motivate work- tempted to organize. ment either declined to com- age Jump ride in San Fran- can be left anywhere a cus- to enter a city, rather than just ers represented by the Trans- —Eliot Brown ment or couldn’t immediately cisco was 2.6 miles. tomer can lock them. placing their bikes on streets port Workers Union. Those contributed to this article. be reached.

products annually. The in- AYearOn, creases surpass what rival Colgate to Invest in Online Startup chains routinely charge for merchandising changes, food- BY ROB COPELAND succeeded in wooing shoppers Grocer Deal company executives said. AND SHARON TERLEP en masse from industry stal- “A lot of our members are warts, forcing them to re- Riles Some perplexed, just completely Colgate-Palmolive Co. is spond. dumbfounded,” said Phil Kafa- turning to an online startup to In toothpaste alone, there rakis, president of the Spe- help it sell products such as are several upstarts like Quip ContinuedfrompageB1 cialty Food Association, which toothpaste through a home- and Goby selling monthly sub- pensation and benefits who represents both suppliers that subscription service, the latest scriptions for toothbrushes or worked at Amazon’s Seattle have gone along with the new experiment by a big house- toothpaste. headquarters for nearly four fees and ones that have re- hold-products maker to cut Defections to razor sub- years as senior compensation fused. out traditional retailers as scription services Dollar Shave manager. Whole Foods planned the sales shift online. Club and Harry’s forced Amazon also has been look- fee increase before Amazon’s Colgate, which has been Procter & Gamble Co.’s Gillette ing for a Seattle-based execu- acquisition, but executives are selling its namesake product to slash prices and shift focus tive to develop products for now using the promise of since 1873, is close to a deal to toward new products. P&G ex- Whole Foods and work with wider, Amazon-fueled sales to acquire a minority stake in ecutives are exploring a range the companies “on everything push suppliers to agree to the Hubble, people familiar with of alternatives to the tradi- from strategy to execution,” charges. the matter said. The two-year- tional retailer model. according to a job posting. “We are excited about the old New York company cur- Two years ago, Unilever At the same time, Whole new growth opportunities that rently sells contact lenses in PLC bought Dollar Shave Club Foods is laying off hundreds of exist as we continue to inno- brightly colored boxes online. for $1 billion. P&G last year in-store marketing employees vate with Amazon,” Whole As part of the deal, Hubble acquired Native Deodorant, a who filled out chalkboard

would develop online sub- DANIEL ACKER/BLOOMBERG NEWS startup selling natural deodor- signs and organized local scription avenues for some of Hubble would develop subscription avenues for Colgate products. ant online. events. Monday was their last Colgate’s products, the people “We’re working very hard day with the company. Whole Foods is said. consideration, the people said. move brings Colgate into an to stay on top of that and not More finance and purchas- laying off hundreds of The first, focused on oral The companies will share arena vexing the biggest mak- let a direct-to-consumer model ing decisions are being made care including teeth whitening, revenue from the ventures. Fi- ers of household goods. slap us the way it slapped Gil- at Whole Foods headquarters the firm’s in-store is expected to start as soon as nancial terms couldn’t be Subscription-service start- lette,” Colgate CEO Ian Cook in Austin, Texas. Whole Foods marketing employees. this year, while others in areas learned. ups have yet to deliver profits said at the company’s share- executives say that centraliza- such as pet food remain under The better-late-than-never for the most part but have holder meeting in May. tion is making the company nimbler and saving money. “Please note this wasn’t an Foods wrote in a recent email easy decision and isn’t a re- to vendors who hadn’t agreed flection of the dedication of to new contracts. “Unfortu- the work you do,” Whole nately, we have yet to receive Foods leaders said in a recent your full commitment to sup- conference call announcing the port the program.” cuts to marketing employees Whole Foods says the fees GO TO WORK in the Midwest, according to and centralized merchandising an audio recording reviewed strategy mean that suppliers’ by The Wall Street Journal. goods will be displayed and For many suppliers, Ama- promoted more consistently, IN BLISSFUL zon is helping spur Whole helping to drive sales. There Foods sales after two tough will also be additional market- years. Cereal maker Kashi Co. ing efforts, according to the and kombucha brewer GT’s company. COMFORT Living Foods are some of the Many food companies say health-food brands whose they have no choice but to go sales have grown since the with the tougher terms. deal, according to data firm “You play ball,” said Donald inMarket. Snyder of Green Hasson Janks But many suppliers are an- LLP, a Los Angeles-based ac- gry that Whole Foods has counting firm that met with added fees of at least 3% to re- clients last month to discuss stock shelves and run promo- the changes at Whole Foods. tions for vendors who sell ap- “They are a great source of proximately $300,000 in revenue.”

Shelf Life Top brands by percentage of Whole Foods sales since Amazon's acquisition of the company

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Note: Data from July 2017 through May 2018 Source: inMarket THE WALL STREET JOURNAL. . THE WALL STREET JOURNAL. Tuesday, July 3, 2018 | B5 BUSINESS NEWS

Burger Battle Beef dominates the market for Beijing Anticipates ground meat but faces growing competition from often-cheaper poultry and pork. Chemicals Merger Ground meat and poultry average retail price BY STELLA YIFAN XIE sets Supervision and Adminis- Beef Turkey Chicken Pork AND TREFOR MOSS tration Commission, or SASAC, $4.5.a pound according to a copy of the bul- A single chairman has been letin seen by The Wall Street 4.0 named to lead China’s two Journal. state-owned industrial chemi- A spokesman for SASAC 3.5 cals giants, likely bringing said he had no information their long-expected combina- about the personnel changes or 3.0 tion a step closer. the potential merger. The com- The appointee, Ning Gaon- panies didn’t immediately re- 2.5 ing, currently chairman of spond to requests for com- 2012’13 ’14 ’15 ’16 ’17 ’18 state-owned Sinochem Group, ment. will also assume the chair- Talk of a possible merger Ground meat and poultry annual man’s job at China National between Sinochem and Chem- meat case sales in 2017, millions Chemical Corp., or ChemChina, China began two years ago, of pounds 48 44 according to an internal news when ChemChina’s Mr. Ren be- Chicken Pork announcement by Sinochem. gan an ambitious bid to ac- The announcement didn’t quire Syngenta AG. say when Mr. Ning would take China has been consolidat- 2,516 415 over as ChemChina chairman. ing its big state-owned enter- Beef Turkey The current chairman, Ren Ji- prises, many of which are Note: Doesn't include prepared foods/deli, anxin, who has a reputation of laden with debt, since at least further processed, shelf-stable or frozen sales; 2018 figures as of April 30, 2018 being one of China’s most dy- 2015 in a bid to boost effi- Sources: IRI; National Cattlemen’s Beef namic businessmen, is widely ciency and curb overcapacity. Association MIKE COPPOLA/GETTY IMAGES FOR NYCWFF expected to retire this year. Energy, mining, railways, ship- Some poultry producers are marketing their patties as an alternative to the classic hamburger. THE WALL STREET JOURNAL. The merger of the two com- ping and steel are among the panies would reduce the finan- state-run sectors that have al- cial risk attached to China’s ready been streamlined, pro- largest foreign deal to date: ducing new national champions ChemChina’s $43 billion take- that Beijing hopes can better Buns Are New Meating Place over of Swiss agribusiness Syn- compete internationally. genta AG last year. ChemChina ChemChina had $58 billion Americans continue burgers marketed under its “Are consumers in general than one-fifth of all beef eaten borrowed heavily to fund that Aidells brand. Meanwhile, tuna more open to burgers other at home winds up between acquisition, which followed its to prefer beef for their and salmon burgers jockey for than beef? I would say abso- hamburger buns. $7.7 billion purchase of Italian Sinochem’s hamburgers, but other space in grocery-store meat lutely,” said David Friedman, “Ground beef is the burger, tire maker Pirelli in 2015. Ning Gaoning cases, alongside a new genera- founder and chief executive of in my opinion,” said Stephen “The personnel change at was picked to ingredients gain favor tion of plant-based burgers. Epic Burger, a Chicago-based Giunta, culinary director the top clearly signals a step serve also as Right now, beef remains the burger chain that serves beef, for protein at Cargill Inc., one closer toward the merger be- chairman of BY JACOB BUNGE undisputed leader by sales in turkey and vegetarian burgers. of the largest U.S. turkey pro- tween the two giants,” said Liu state-owned the $12 billion-a-year retail Standing in front of a Trader cessors and the world’s biggest Qiang, an analyst at Pacific Se- ChemChina. Beef, which has long fulfilled market for ground meat, ac- Joe’s meat case in Chicago, maker of ground beef. While curities in Beijing. Along with America’s hunger for hamburg- cording to Nielsen. U.S. con- Amanda Clement surveyed the burger concept is being easing ChemChina’s debt bur- ers, faces fresh competition sumers spent more than $10 burgers made from poultry, stretched—Mr. Giunta sang the den, he said, the merger fits in revenue last year, and a from poultry producers pushing billion on fresh ground beef, fish and veggies. “I’m praises of a salmon burger he with Beijing’s effort to make profit of $370 million. their own patties onto U.S. beef during the 12 months open to anything and every- recently consumed—“it’s really state-owned enterprises more Sinochem had a profit of $2 grills. ended May 26. The only other thing,” said the 28-year-old hard to displace the original.” competitive globally. billion on $78.3 billion in reve- Fueling the battle is a record protein coming close was performer in musical produc- For consumers, hamburgers Should they combine, the nue. Together, the two compa- supply of meat in the ground turkey, with $1.2 billion tions as she examined a $10.99 have gotten cheaper. After a new company would be the nies employ more than 170,000 U.S., pressuring prices and in retail sales. pack of bison burgers. “If it’s 2012 drought forced ranchers world’s largest chemicals com- people. spurring meat producers to But retail sales of ground healthy and looks like it’d be to cull herds, the U.S. beef cat- pany with annual revenue of The wave of consolidation is seek out new markets. chicken and turkey enjoyable, I’ll try it.” tle herd has rebounded, rising about $136 billion. Both a major shift from China’s ear- Hormel Foods Corp., one of have each grown by more than The burger has helped to the highest level in nearly a Sinochem and ChemChina pro- lier—and mostly unsuccess- the largest U.S. turkey suppli- one-third over the past five ground beef carve out a leading decade. Poultry farmers have duce industrial and agricultural ful—approach of breaking up ers, in June launched a cam- years, versus a 6% increase for role in the U.S. beef industry been expanding their flocks, chemicals, and have significant unwieldy state-run enterprises paign urging consumers to ground beef, according to IRI. over the last few decades. too. A 2015 outbreak of avian petrochemical interests. in hopes of spurring domestic “make the switch” from ground Beef producers learned not to Ground beef makes up 64% of influenza forced farmers to cull The leadership change was competition and making state beef to ground turkey. Tyson underestimate poultry after the all beef currently sold in the millions of turkeys, but since announced in a bulletin Mon- firms more innovative. Foods Inc. last year introduced early 1990s, when chicken over- U.S., according to data compiled then production has climbed day shared with staff at —Julie Steinberg shrink-wrapped packs of took beef as the most con- by the National Cattlemen’s 5%, pushing prices to their low- Sinochem. It attributed the de- and Kersten Zhang ground chicken and chicken sumed meat in the U.S. Beef Association, and more est level in seven years. cision to the State-owned As- contributed to this article. Quartz Site Changes Hands BY BENJAMIN MULLIN 2016 valuation of about $250 Inc.’s Google. Bigger digital million. news startups such as Buzz- Quartz, the online business- Quartz, which has 215 em- Feed and Vice Media have news startup founded by At- ployees and reached 12 million struggled to hit their revenue lantic Media nearly six years U.S. readers in May, according targets in this competitive ad- ago, is getting a new parent: to comScore, built a following vertising market. BuzzFeed Uzabase Inc. with its nontraditional ap- missed its 2017 revenue target The Japanese financial in- proach to business-news cov- of about $350 million by telligence and media firm, a erage. With an eye on the roughly 15% to 20%; Vice also relative unknown in the U.S., global nature of commerce, missed its 2017 revenue target will pay between $75 million the New York-based publica- of $800 million. These firms and $110 million for Quartz in tion assigned reporters to have sought alternative reve- cash and stock, tied to the site cover “obsessions”—beats that nue streams to expand their hitting certain financial goals. often cut across topic areas. It business. The deal will strengthen Uza- was among the first digital Last year, Quartz booked base’s U.S. foothold as it seeks news companies to embrace $28 million in revenue and is growth outside Asia. large native advertisements, on pace to increase revenue by The sale price is welcome or ads that fit into the overall as much as 35% in 2018, a per- news for a digital-media in- format and feel of a page or son familiar with the matter dustry that has seen some un- app. said. Its 2016 revenue was $30 favorable exits in recent Much of Quartz’s revenue million. Quartz was profitable months. For instance, Mash- comes from digital advertis- that year but has since taken Bigpearlsforasmallprice able sold for about $50 million ing, a category dominated by down margins to reinvest in late last year, a fraction of its Facebook Inc. and Alphabet the business, the person said. An affordable way to add pearls into your everyday style. These 8-9mm cultured Journalist Brian Ross to Depart freshwater beauties are nearly the size of sought-afterSouthSeapearls.Strungwitha ABC News in Wake of Suspension braided-leather collar with silver rondelles BY JOE FLINT for a distinctive new look. Veteran ABC News investi- gative reporter Brian Ross is leaving the network less than a year after he was suspended for an erroneous report that said former national security adviser Michael Flynn was prepared to testify that Presi- dent Donald Trump told him to make contact with Russian officials during the 2016 presi- dential campaign. Thestorywaslatercor- rected by Walt Disney Co.’s ABC News to say it was after

the election Mr. Trump di- FRED LEE/ABC/ASSOCIATED PRESS rected Mr. Flynn to contact Mr. Ross had been suspended following an erroneous report. $ Russian officials on a variety of topics including “working time producer Rhonda Goldston praised the work of 59 jointly against Isis.” ABC News Schwartz said they were leav- Mr. Ross and Ms. Schwartz, Plus Free Shipping apologized for the incorrect ing the network. The pair, who saying in a memo announcing story saying it “had not been have worked at the network their departure that the pair Cultured Pearl and Leather Collar fully vetted through our edito- for nearly 25 years, said in the “exposed government corrup- 8-9mmculturedfreshwaterpearls.Polishedsterlingsilver rial standards process.” memo they were not stepping tion at every level, interna- 1 Along with the suspension, back from reporting. “We are tional human rights abuses rondelles. 17" length. ⁄4"wide.Pearlsshownactualsize. Mr. Ross was also prohibited hardly leaving investigative and fraud, uncovered danger- from covering anything having journalism, there is too much ous working conditions, sexual to do with the Trump adminis- to do.” abuse coverups and dishonest tration. He did one story since Mr. Ross won numerous business practices.” his four-week suspension in awards for his investigative Mr. Ross also had some no- Ross-Simons Item #872754 December about ankle-bracelet reporting at ABC News includ- table errors during his career To receive this special offer, use offer code: DELIGHT71 monitoring for the ABC News ing four George Polk awards, including an incorrect report magazine “20/20.” four Peabody awards and 17 linking the 2012 mass shooting 1.800.556.7376 or visit www.ross-simons.com/DELIGHT In a memo to ABC News Emmy awards. in a movie theater in Aurora, staffers, Mr. Ross and his long- ABC News President James Colo., to the Tea Party. .

B6 | Tuesday, July 3, 2018 ** THE WALL STREET JOURNAL. INTERNATIONAL PROPERTY REPORT France Paris Pins Growth Hopes on Rail Demand BY SHEFALI ANAND where two train lines will For Offices meet. For more than a decade, “What can be almost cer- French planners have dreamed tain is that the Grand Paris Climbs of an ambitious and expensive Express will benefit the exist- BY SHEFALI ANAND new rail network that would ing good locations today, such AND PETER GRANT supersize Paris and turn it as La Defense, but also some into a leader rather than a fol- of the new hubs” like Saint- France’s commercial real- lower of global cities like Lon- Denis and Villejuif, said Cedric estate market has been hitting don and New York. Dujardin, head of real estate post-2008-crash records for Today, the Grand Paris Ex- forFranceatDWS,aunitof sales and office vacancy in re- press—one of Europe’s largest Deutsche Bank AG. cent months, but concerns transport projects—is starting Investors are jumping in. about a slowing econ- to take shape. In dozens of Last month, French invest- omy could put a damper on sites in the region, construc- ment firm La Française the party. tion work can be seen such as bought Le Balthazar, a 32,600- Investors purchased €39.4 boring machines digging tun- square-meter office building billion ($46 billion) worth of nels into the ground or ma- in Saint-Denis, for about €235 French commercial property in chines pouring concrete to million, on behalf of Korean 2017, according to Real Capital make the roof of a future investors including Hyundai Analytics, the highest total metro train station. Investment Asset Manage- since the data firm began Like most other major ment. tracking the market in 2007. transportation projects, the Also in June, a 24,000- By comparison, the figure was Grand Paris Express has run square-meter office building €34.8 billion in 2016 and €33.5 into major delays as well as named #Curve, under con- billion in 2007, just before the cost overruns of its initial struction near the future sta- crash hit, Real Capital said. budget of about €25 billion tion in Saint-Denis, was Demand for office space in

($29 billion). The network of GERARD ROLLANDO/SOCIÉTÉ DU GRAND PARIS bought by Générale Continen- the Paris region is the highest 124 miles of new metro lines The Grand Paris Express is years away from completion but has added to rising property values. tale Investissements, a French brokers have seen in years. In in and around Paris is now investor and real-estate devel- the first quarter of 2018, slated to be completed in more traction. These include strongest commercial real-es- stations. oper, and U.K. private-equity nearly 750,000 square meters phases between 2024 and the coming Paris Summer tate markets it has seen in Already, the Grand Paris firm Benson Elliot. The price (8.1 million square feet) was 2030, and financing problems Olympics in 2024 and post- years. plan has contributed to rising wasn’t disclosed. leased in the region, the best or other issues could still de- Brexit uncertainty that has hit That is stoking interest property values in areas like Schroder Real Estate in- start of a year since 2007, ac- rail the project. London, Paris’s historical eco- among investors, developers Saint-Denis to the north of vested €130 million in a cording to Knight Frank. Last But a number of energy nomic rival in the region. and tenants in new develop- Paris, where Olympic housing 25,000-square-meter office year, 2.6 million square meters sources are powering the Also, the Paris region is ment opportunities tied to the and venues are being planned, building in June 2017 in Bag- were leased, also the best per- Grand Paris Express, giving it benefiting from one of the new rail lines and 68 expected and Villejuif in the south, neux, south of Paris. formance since 2007 and 15% higher than the 10-year aver- age, the firm said. Brokers and investors say the market is being fueled by Big Real-Estate Buyer Turns Into a Seller economic growth and the busi- ness-friendly policies of Presi- BY ISOBEL LEE consists of 102 shopping malls, and well-let offices,” he said. warehouses and distribution malls with the right designs, lo- dent Emmanuel Macron. 13 office properties and 10 con- The next step will come in centers rather than higher- cations and mix of stores, res- France also has been benefit- Just weeks after pulling off vention centers in Europe and the fall, by which time Unibail price store space, raises ques- taurants and entertainment. ing from a growing tech sector. the largest retail real-estate ac- the U.S. will have analyzed the 35 West- tions about the strength of fu- “I’m still a strong believer in Not all the news is good: quisition ever, Unibail-Ro- Chief Executive Christophe field malls it purchased. ture demand for Unibail’s physical retail and connected The economic growth rate in damco-Westfield is going into Cuvillier said the plan is to sell Unibail’s strategy—both as a malls. It will also make it more retail,” he said. “I do not be- France has slowed this year property-sales mode. noncore assets from both the buyer and seller—faces numer- difficult to find buyers for lieve that all sales will go on- and forecasts are being weak- The Paris-based mall giant is old Unibail-Rodamco portfolio ous pitfalls at a time retail real lower-quality shopping centers. line in the future.” ened by rumblings of a trade under pressure to reduce the and the slate of Westfield prop- estate faces an existential chal- “Retailers don’t want to be E-commerce now accounts war triggered by the Trump debt load it took on to finance erties. lenge from online shopping. in second-rate malls in the cur- for a global sales average of 9%, administration. its $15 billion acquisition of First, €3 billion of properties The purchase of Westfield rent sales climate,” said Peter according to Bain & Co., a fig- Commercial-property sales Westfield Corp., which closed from the old Unibail-Rodamco added 44 million square feet of Papadakos, head of Continental ure which is expected to double so far this year have been in June and created a global portfolio of €43 billion will be malls, a property type many in- Europe at REIT research firm by 2023. Online sales are much slow. company with €62 billion sold, according to Mr. Cuvillier. vestors are shunning. Green Street Advisors. higher in the U.S. and the U.K., Volume was only €9 billion ($72.43 billion) worth of prop- “Those disposals will include Competition from internet Mr. Cuvillier said he believes where nearly all the Westfield as of June 26, according to erty. The combined portfolio shopping centers and mature retail, which relies on low-rent there is a bright future for malls are. Real Capital.

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 SAVILLS     Paris had more luxury store openings than any city in the world last year. A Louis Vuitton store.                          Luxury Retail Booms in Capital       !                 BY ISOBEL LEE physical stores, said Faustine pean city,” says Marie Hickley,                      Godbert, an associate in director of Savills European                One of the few bright spots Savills’s retail real-estate unit retail research. They come for     in retail real estate these days in Paris. “Luxury brands are cheaper prices than they can                ! " "  # #    $           !  !  " #  % & #  ' !   "    ( is on the “high streets” of ma- ready to pay huge amounts to find in their home markets, ! "    )                        jor cities, where luxury brands own the building, because they and to be certain they aren’t  $ %          &  '(    are still willing to pay strato- know that they will stay there acquiring fake goods, she said. )* %        +, -(  %    spheric rents to promote their for a long time,” she said. Landlords are reaping the    )    "     ( designer clothes, accessories, The investments reflect the benefits: Prime high-street  .      " *  %  /    shoes and other goods. diverging paths of retail Paris rents grew about 9% a "  0 1  2  -( (!  (!   (!  !  !  * * Nowhere is the luxury high brands, with luxury labels year between 2013 and 2017,   street stronger today than in buoyed by Chinese consumers according to Rob Wilkinson,           Paris. The French capital had even as the sector overall re- chief executive of AEW Europe   3   3 more luxury store openings mains under siege from online SA, a unit of asset manager TENNESSEE than any other city in the competition. While sales at AEW Global. “But it’s very world last year, accounting for some high-end stores might much bifurcated between high-        5.6% of total global designer not be enough to justify their end luxury and the more basic    store launches, according to high real-estate costs, retailers retail that’s been impacted by           real-estate firm Savills. still consider the locations in- e-commerce,” he added.         In October, Louis Vuitton valuable for marketing and Some investors have been opened its new flagship on branding purposes. taking advantage of the high AUCTIONS OKLAHOMA       Place Vendôme in a historic For Paris, a position atop prices to put properties up for       property near the Ritz hotel the high-street heap under- sale. New York-based Thor Eq-  that was originally built by the scores the city’s re-emergence uities LLC, which has accumu-     architect behind Versailles. as a fashion and tourist mecca lated a half-dozen Paris prop-             Nearby, luxury rival Chanel nearly three years after terror- erties in recent years, sold    has slowly been acquiring ist attacks caused visitor num- two flagship spaces on Rue de                             smaller premises around its bers to plummet, decimating Rennes last week. It also re-    ! historic home at 31 Rue Cam- retail turnover. cently sold a designer arcade          bon over the past decade, with “When the hotels are full, on the Croisette in Cannes,                     plans to create the brand’s so are the boutiques,” said leased to Burberry, Bottega largest store in Paris, if not Ms. Godbert. “International Veneta and Saint Laurent,      !"   # $ % & '     !()(*+      , !!-. Europe. Set to open later this tourism is a more important among others.    / & 0      # $ % & THE year, the revamped flagship driver of luxury retail sales Not all high streets are ex-    '   ()(*+      , MARKETPLACE will include offices, show- now than ever before. And the periencing the same boom. In          !** / & 1 ADVERTISE TODAY rooms and museum spaces, as fashion houses are ready to New York, rents along the ton-           well as workshops for custom- welcome them in a big way.” iest section of Fifth Avenue fell (800) 366-3975                izing goods. Asian shoppers, in particu- to $3,700 a square foot in the                  For more information visit:      ! "#$ %& ' ( ) wsj.com/classifieds The decision by both Vuit- lar, have been helping the first quarter of 2018, down ) *  + ,    * - * ton and Chanel to buy prop- city’s retailers. “Paris wel- 0.5% from the year-earlier pe-      © 2018 Dow Jones & Company, Inc. erty instead of renting reflects comes more Chinese overnight riod, according to CBRE Group    All Rights Reserved. a long-term commitment to visitors than any other Euro- Inc. . B10 | Tuesday, July 3, 2018 THE WALL STREET JOURNAL. MONEY & INVESTING

Full Speed Ahead Issuance of automotive SoFi Eyes $500 Million Deal Chest asset-backed securities is on track to exceed last year's total. BY PETER RUDEGEAIR raising billions of dollars in lines of credit from banks in Year-to-date Rest of year AND MAUREEN FARRELL capital to branch out beyond the run-up to their IPOs. Mr. $80 billion its original business of refi- Noto said at the June confer- Social Finance Inc. has nancing student loans. As re- ence that an IPO is “definitely been meeting with banks in cently as last summer, SoFi not a priority for SoFi.” People 60 recent weeks to discuss rais- was applying to open its own familiar with the company’s ing a roughly $500 million un- bank in Utah and teasing that plans said any IPO would come secured line of credit that an initial public offering in late 2019 at the earliest. 40 could go toward potential buy- wasn’t far off. Pre-IPO companies can typi- outs of other financial-tech- Those plans stalled after cally command stellar terms 20 nology firms, people familiar former CEO Mike Cagney and from banks eager to lend to with the matter said. much of senior leadership left them with the assumption that SoFi is now led by Anthony the company last year. Mr. doing so will earn them a place 0 Noto, a former Goldman Sachs Cagney’s resignation came in the IPO underwriting team. Group Inc. deal maker who weeks after ex-employees ac- Still, many banks have balked 2013 ’14 ’15 ’16 ’17 ’18 took the reins at the startup in cused some managers in law- at the terms SoFi has sought, Note: Year-to-date as of July 2 March. The chief executive is suits of engaging in or tolerat- according to people familiar Source: Dealogic looking to ramp up acquisi- ing what they described as with the matter. Some couldn’t THE WALL STREET JOURNAL. tions to make the online improper behavior toward get their risk committees to lender more of a full-service women. He said at the time sign on to the deal because it financial institution. In June, that the litigation and media wasn’t secured by any assets. SoFi hired Bill Tanona, a vet- coverage of it made his pres- Mr. Noto has also been Electric- eran executive who most re- ence a “distraction from the spending his first few months

cently served as finance chief company’s core mission.” CHRISTOPHER GOODNEY/BLOOMBERG NEWS on the job rebuilding the exec- of venture-capital firm GSV Now Mr. Noto, who de- Chief Executive Anthony Noto left Twitter to join Social Finance. utive ranks. He hired former Car Debt Capital Corp., to lead its inter- parted as operating chief of Goldman Sachs partner Mi- nal deal-making team. Twitter Inc. to join SoFi, is sets this year, according to a Mr. Noto said in a May let- chelle Gill to be chief financial “We won’t have a mentality looking to expand SoFi’s pres- letter to SoFi shareholders re- tertoinvestorsreviewedby officer and Expedia Inc. tech- Leads to that everything has to be built ence in areas such as banking viewed by The Wall Street the Journal that rate increases nology chief Tony Donohoe to internally,” Mr. Noto said at an services and wealth manage- Journal. were a “challenge to our finan- serve in that role at SoFi. industry conference on June ment, potentially with acquisi- Acquiring other fintech cial performance.” SoFi sepa- SoFi also recently hired for- Warning 20. “We don’t have any near- tions and partnerships with firms could help SoFi cope rately told investors in Febru- mer Amazon.com Inc. executive term plans, but we’re building outside firms, some of the with an operating environ- ary that it missed its earnings Assaf Ronen to help run its BY ORLA MCCAFFREY a strategy and a process to people said. The San Francisco ment that is getting tougher. target for the last three products team, according to evaluate the different opportu- startup began offering cus- SoFi borrows money from months of 2017 in part be- people familiar with the mat- Amid the hoopla about a nities as they come our way.” tomers a SoFi checking ac- banks and institutional inves- cause of worse-than-expected ter. Mr. Ronen had previously new technology, the rising Since its 2011 founding, count and debit card in June. tors to make loans, and with performance in a portfolio of been in talks to join Uber Tech- number of electric-vehicle SoFi had been one of the most It also plans to give customers short-term interest rates ris- consumer loans. nologies Inc. in a senior role leases is cause for concern to ambitious startups looking to access to buying and selling ing, the cost of those funds It has become common for before the ride-hailing com- bond investors, according to shake up consumer finance, individual stocks and other as- has gone up. tech startups to receive large pany rescinded the offer. some analysts. That is because the uncer- tain resale value of the cars could increase risk for inves- Judge Hits tors who buy bonds com- Vanguard Nixes Fees on Rival ETFs posed of pooled auto leases, according to an analyst at BY LISA BEILFUSS For years customers paid to Vanguard and offer them Vanguard won’t be the only S&P Global Ratings. PwC With nothing to trade Vanguard’s other services like financial ad- firm allowing investors to Electric vehicles comprise Vanguard Group plans to own funds. In August, the vice where Vanguard can col- trade rival funds without pay- less than 2% of all auto sales, eliminate online commissions manager will extend that same lect additional revenue. ing a commission. Fidelity In- but their leases are increas- Big Payout on its rivals’ exchange-traded arrangement to customers that “If we attract new investors, vestments’ brokerage unit al- ingly being securitized, or BY MICHAEL RAPOPORT funds, a move by the asset want to buy or sell online we have an opportunity to of- lows clients to do the same bundled together and sold as management giant to lure new nearly 1,800 other ETFs of- fer them advice over time,” thing with 95 ETFs run either bonds to investors, according PricewaterhouseCoo- assets and steer more custom- fered by such competitors as said Karin Risi, head of Van- by Fidelity or BlackRock’s to a recent comment by Jen- pers LLP must pay $625.3 ers to financial advice. BlackRock Inc., Charles guard’s retail investor group. iShares commission free, ac- nie Lam, lead analyst on auto million in damages for failing Vanguard became the Schwab Corp. and State Street Currently, the amount Van- cording to its website. lease asset-backed securities to catch a fraud scheme that world’s second-largest money Global Advisors. It will still guard customers pay to trade Vanguard launched its fi- at S&P. The leases from these helped cause one of the big- manager by offering some of charge commissions for phone other ETFs depends on a cli- nancial advice business, Per- gest bank failures of the fi- the lowest-cost products in the trades of these rival ETFs. ent’s account size and, in some sonal Advisor Services, in nancial crisis, a federal judge industry. Rivals have increas- The plan is the first signifi- cases, trading frequency. For 2015. It caters to customers ruled Monday. ingly tried to match or beat cant pricing change at Van- example, investors with with at least $50,000 and The judgment against PwC Vanguard on fees, pushing the guard under new Chief Execu- $50,000 or less pay $7 per on- charges 0.3% of assets under over the 2009 failure of Ala- cost of investing toward zero tive Mortimer J. “Tim” Buckley, line trade on the first 25 management for that advice. $45.6B bama’s Colonial Bank is one for some basic portfolios of who took the helm earlier this trades, and $20 thereafter. That is less than the 1% typi- Bond issuance this year in the of the largest judgments or stocks and bonds as firms duel year. The larger strategy is to Those with $500,000 to $1 mil- cally charged by traditional auto-backed ABS market settlements ever for mal- for customers. attract new brokerage clients lion pay $2 per online trade. wealth advisers. practice by an accounting firm, and accentuates long- standing concerns over the vehicles, along with resale quality of audits performed U.S. Stocks Ride Out Rising Rates, With Help From Big Tech revenue, fund interest pay- by the Big Four accounting ments to investors over the firms. Big technology Performance this year course of the bond. When The decision follows a De- pools are composed largely companies 50% cember ruling in which U.S. of leases on electric vehicles, District Judge Barbara Ja- helped the U.S. Amazon.com their risk profile may be en- cobs Rothstein found PwC, market beat 40 hanced, Ms. Lam wrote. the outside auditor for Colo- the rest of the “Pools of auto leases that nial’s bank holding company, 30 finance a significant number world this year. NYSE FANG+ negligent in not detecting a of electric cars shed light on massive fraud at a major 20 operational risks and manu- customer of the firm. That facturer linkages not often scheme helped trigger the S&P 500 observed in the auto lease 10 tech sector bank’s collapse. ABS market,” Ms. Lam said In her ruling, Judge Roth- 0 S&P 500 in the comment. stein agreed with the Federal Some of the risk derives Deposit Insurance Corp., MSCI from the relatively brief re- –10 which had sued PwC as the All-Country sale history for electric vehi- receiver for the failed bank, January February March April May June World ex-U.S. cles compared with more that $625.3 million was the traditional cars. Analysts proper level of damages to Investors are Probability of number of rate rises this year* don’t see an increased risk of assess against PwC. That pricing a much 100 % default with the cars, since amount was “amply sup- most are leased to customers ported by reliable evidence,” greater chance with relatively high credit she said. PwC had asked the of four rate 80 scores. But the short history judge to impose damages of rises this year More of electric vehicles creates less than half that amount. uncertainty around their re- than they were 60 Four “We are pleased that the sidual value—an estimate of in January. court recognized there are Three their worth when their consequences when an audi- 40 leases are up. That value, tor breaches its duty to the Two (current) along with interest rates and investing public,” said Ste- One taxes, determines monthly phen Sorensen, a lawyer for 20 lease payments. the FDIC. None The asset-backed securi- Philip Beck, a lawyer for 0 ties market has been an in- PwC, said the firm is “disap- JanuaryFebruary March April May June creasingly popular destina- pointed” in the ruling and tion for companies that want plans “to pursue an appeal of *Probabilities derived from Federal-Funds futures to raise capital quickly and this matter at the earliest Sources: Thomson Reuters Datastream (stock and index performance); CME Group (probabilities) THE WALL STREET JOURNAL. use high demand to secure opportunity.” low interest rates. Tesla Inc. The case stemmed from a divergence, by hurting U.S. turn of market volatility. sulated from day-to-day poli- in February closed a deal for fraud scheme at Taylor Bean Stocks Are exports and foreign profits Last year was extraordinarily tics in Europe, but 2012 $546 million in bonds backed & Whitaker Mortgage Corp., of U.S. multinationals, and calm for equities, bonds and demonstrated that if trou- by lease payments on its once of one of the nation’s there has been some disap- currencies, with the Cboe bles become serious in Eu- Model X and Model S cars. biggest mortgage companies. Up Despite pointment in the U.S. data Volatility Index, or VIX, rope, Wall Street will suffer The largest tranche of that Authorities have said Taylor already, if minor so far. reaching new lows. But vola- too. deal carried a 0.3-percent- Bean overdrew its account at Troubles The third risk is from Mr. tility has risen, and the Why are U.S. markets tak- age-point spread above the Colonial for years to cover Trump’s trade war. At the Cboe’s VVIX index, a mea- ing it so well? Part of the benchmark swap rate. its own cash shortfalls. Tay- start of the year the political sure of swings in the VIX it- answer is that investors But Tesla hasn’t offered lor Bean covered that up by, ContinuedfrompageB1 focus was on the beneficial self, had its highest average aren’t pricing in much of a leases on its Model 3 vehi- among other things, selling is just 27%, half the level of effects for investors of Mr. over six months in more drag from the rest of the cles yet and doesn’t plan to Colonial thousands of mort- a year ago. If it breaks down Trump’s corporate-tax cuts, than a decade. If the VVIX world, wrongly in my view. for another six to nine gages it had already sold to further, higher bond yields but his trade policies are de- moves indicate a broader But another part is the en- months, CEO Elon Musk other investors—even as could be bad for stocks, as tested by markets. New tar- rise in volatility ahead, that thusiasm for big technology wrote on Twitter last month. PwC’s audits of Colonial happened briefly in Febru- iffs contributed to China’s will hurt stocks. stocks, almost all of which Mr. Musk attributed the de- found no problems. ary. bear market, and U.S. com- Finally, there is European are listed in the U.S. lay to a negative effect on When the fraud was dis- The second is the global panies are just beginning to politics. Italy’s general elec- The big gains in Amazon, Tesla’s cash flow. covered, Taylor Bean filed economy. At the start of the warn of profit hits from re- tion always threatened to Apple, Microsoft, Netflix, Issuance in the auto sec- for bankruptcy in August year, hopes for global taliatory tariffs and supply- deliver a win for populists, Facebook, Nvidia and Alpha- tor of the asset-backed secu- 2009. This was followed growth were high, and inves- chain problems. but the eventual coalition bet in the first half ac- rities market—which in- shortly by Colonial’s failure, tors became overconfident. “Asinvestors,wehave between populists on the left counted for the entire gain cludes leases, prime loans which cost the FDIC’s deposit Hope ran far ahead of real- been long global trade for and right spooked markets. in the S&P 500, according to and subprime loans—is insurance fund billions of ity, and European, Japanese, three decades,” said Pascal European stress over immi- S&P senior index analyst roughly $45.6 billion so far dollars. Taylor Bean Chair- Chinese and other emerging- Blanqué, chief investment of- gration is spreading, with Howard Silverblatt. Their in 2018, up from $39.8 billion man Lee Farkas and at least market data came in well be- ficer at France’s Amundi As- the leader of Germany’s ju- momentum may keep them at this time last year, accord- seven other people, including low expectations while econ- set Management. “We are nior coalition partner offer- going for a while yet. ing to Dealogic. Analysts ex- two Colonial employees, omists upgraded their moving into an era of domi- ing to resign this weekend But if Big Tech stumbles, pect demand for lease secu- were convicted or pleaded forecasts for U.S. growth. nance of politics over eco- and political opportunists the U.S. stock market may ritizations to remain stable guilty to participating in the The rise in the dollar should nomics.” taking advantage. Investors not prove so exceptional af- as companies compete to at- scheme. help narrow the economic The fourth risk is the re- in the U.S. are reasonably in- ter all. tract consumers. .

THE WALL STREET JOURNAL. **** Tuesday, July 3, 2018 | B11 MARKETS New Mexican President Spurs Uncertainty Investors view López in office, but these things must be done using the financial re- Obrador warily as they sources available.” wonder about impact Mexican bonds are typically thought of as one of the most of his economic policy stable emerging-market debt investments because of the BY ROBBIE WHELAN country’s close economic ties AND ANTHONY HARRUP with the U.S. If Mr. López Ob- rador doesn’t keep to promises MEXICO CITY—Financial of fiscal austerity, or if trade markets reacted cautiously relations significantly worsen, Monday to Andrés Manuel Ló- the risk premium on Mexican pez Obrador’s decisive elec- debt instruments could widen, toral victory as investors pon- Mr. Stock said. der what the country’s swing “Right now, Mexico has very to the left will mean for eco- cheap access to capital in U.S. nomic policy. dollars. That market access The leftist former mayor of could be jeopardized if it looks Mexico City won more than like the fiscal condition of the 53% of the votes Sunday, and country is going to deterio- the coalition led by his Morena rate,” he added. party secured majorities in Private investors worry both houses of congress as about Mr. López Obrador’s plan well as several key governor- to halt new auctions for oil- ships, according to the national and-gas exploration rights electoral agency. while the government reviews After strengthening over- contracts handed out since the night to as few as 19.64 pesos 2013 energy overhaul, although

to the dollar in what currency CARLOS JASSO/REUTERS analysts say his government traders described as a “eupho- The peso gave back some gains after strengthening overnight in what currency traders described as a ‘euphoria rally.’ will need the revenue from ria rally,” the Mexican currency those contracts. gave back some gains and was be blinking on global trade least it sounds like he’s trying for Goldman Sachs. “His re- grams for millions of young “To deliver on his campaign trading around 19.95 per dollar conflicts. We can expect the to soften the market impact at marks added some comfort to Mexicans. He vows to fund the promises, López Obrador will Monday afternoon. The local peso to remain under pressure this time.” the market, although investors programs through government need an energy sector that stock market’s benchmark IPC for the time being.” Investors said commitments might still be somewhat con- austerity and savings from a generates revenue during his index was down 2%. In a speech before tens of to economic orthodoxy and a cerned about excessive concen- crackdown on public corrup- six-year term,” wrote Ixchel “We still really don’t know thousands of supporters in promise not to confiscate pri- tration of power.” tion, which he says costs the Castro, manager of Latin what this guy is going to do,” Mexico City’s central square, vate assets, despite a planned The first major test of Mr. government $25 billion a year. America oils and refining mar- said Win Thin, head of emerg- Mr. López Obrador reiterated review of contracts in the López Obrador’s fiscal disci- “It’s going to be a hard cir- kets research for the consul- ing-markets currency strategy promises of fiscal discipline, newly opened oil industry, pline will come when his tran- cle to square,” said Graham tancy Wood Mackenzie. “This at Brown Brothers Harriman, a respect for central-bank auton- gave the market confidence. sition team prepares a 2019 Stock, a partner at BlueBay As- administration stands to reap trading house in New York. “He omy and good relations with “We now have an adminis- federal budget in cooperation set Management in London, a the rewards of the reforms— said all the right things in his the private sector. tration with a super-presi- with the lame-duck administra- firm that has about $1 billion increased production, private victory speech, but we don’t “The conciliatory tone is dency that has very few con- tion. He has promised exten- invested in Mexican sovereign investment and job creation— know who his advisers will be, what the market’s concentrat- straints on power, so we’ll have sive social programs, setting and corporate bonds. “We’re but this will require strong what his exact policy stances ing on right now,” said Chris to see how he exercises that up scholarship funds for hun- used to candidates making backing from both the incom- will be, and this all comes in a Gaffney, president of world power,” said Alberto Ramos, dreds of thousands of students promises during campaigns ing administration and govern- context where no one seems to markets at TIAA Bank. “At chief Latin America economist and workforce-training pro- and finding they’re not feasible ment coalition support.” Soybean Prices Technology Shares Prod Late Rally BY RIVA GOLD quite specifically the winners Tumble to Lowest AND ALLISON PRANG and losers because the global supply chain is so integrated,” U.S. stocks turned higher in said Talbot Babineau, chief ex- In Nearly 10 Years the final hour of trading Mon- ecutive of Toronto-based hedge day, led by shares of technology fund IBV Capital. companies. Still, “we don’t think this is BY BENJAMIN PARKIN “That is the market,” said Major indexes spent much of going to escalate to any point of Jeff Kaprelian, a broker at ad- the session in the red as esca- economic destruction,” he said, Soybean prices fell to the visory firm The Hueber Report. lating trade rhetoric curbed ap- noting current tariffs make up a lowest point in almost a de- “There is nothing more impor- petite for risk. small percentage of global trade cade Monday as looming Chi- tant than Chinese demand.” MONDAY’S The Dow Jones and the negotiations might re- nese tariffs The tariffs could come at a MARKETS Industrial Aver- sult in a more open Chinese COMMODITIES threatened particularly inopportune time age dropped as economy. to kill off for U.S. farmers. much as 194 Rich Guerrini, president and demand The agriculture industry has points before turning modestly CEO of PNC Investments, said from the U.S.’s largest cus- endured a long-running slump higher. Technology stocks, he thinks the tariffs are likely tomer. sparked by global crop gluts which have powered the market small in scope. “The market is Futures for July fell 1.2% to and low commodity prices. in 2018, led the charge again trading on news, and I think $8.48½ a bushel at the Chicago But the soybean market with Facebook, Apple and that the unknown is probably

Board of Trade, the lowest proved more resilient, bol- Google parent Alphabet climb- DAVID PAULthe MORRIS/BLOOMBERG NEWS bigger driver,” he said. close since March 2009. stered in large part by a roar- ing over 1%. Apple’s shares rose 1.1%, advancing with other tech companies. Disappointing readings on The market tumbled 15% in ing Chinese appetite for oil- Stocks have searched for di- global manufacturing added to seeds to crush into pig feed rection in recent sessions as the cautious tone, analysts said. and juice for cooking oil. trade rhetoric between the U.S. Low Energy Manufacturing activity in the Beijing said it plans That demand prompted U.S. and its partners ramps up. Ana- Energy stocks were the worst performers in the S&P 500 on Monday eurozone slowed in June and by farmers to grow more of the lysts pointed to continued un- as crude oil prices slumped. slightly more than previously to introduce tariffs on crop, this year planting more certainty around global trade as reported, data firm IHS Markit 0.5% U.S. soybean imports soybeans than corn for the a catalyst for Monday’s moves said. first time in 35 years. but also noted the tariffs are S&P 500 Confidence among Japan’s Now those farmers, who had relatively small. Trading vol- large manufacturers weakened starting on Friday. 0 mostly decided what to sow umes, meanwhile, were rela- for a second consecutive quar- before trade tensions between tively light in a holiday-short- ter amid growing concerns China and the U.S. flared up, ened week. about the potential impact of –0.5 June as soybeans, which be- aren’t sure what they will do The Dow industrials inched trade friction, according to a came a crucial cash crop for with all of it come harvest up 35.77 points, or 0.1%, to central-bank survey, while a pri- beleaguered American farmers time. 24307.18. The S&P 500 climbed –1.0 vate gauge showed growth in in recent years, got caught up Bumper soybean production 8.34 points, or 0.3%, to 2726.71, China’s manufacturing sector in a trade dispute between in Brazil has increasingly al- while its tech sector gained 1%. S&P 500 slowed in June. energy sector China and the U.S. lowed China to bypass the U.S. The tech-heavy Nasdaq Com- –1.5 The Stoxx Europe 600 fell Beijing said it plans to intro- altogether, although some of posite rose 57.38 points, or 0.8%, while markets in Japan duce tariffs on U.S. soybean that lost business could be re- 0.8%, to 7567.69. and South Korea posted their imports starting Friday, part of placed by other countries. Seven of the 11 sectors in the biggest losses in three months. –2.0 a package of measures retaliat- “They’re definitely in the S&P 500 ended the session Early Tuesday, both the Japa- ing against the Trump adminis- red,” said Joel Karlin, an econ- higher. Shares of energy firms 10 a.m. 11 noon 1 p.m. 2 p.m. 3 p.m. nese and South Korean bench- tration’s own threatened duties omist at Western Milling. “The in the index were the biggest Source: FactSet THE WALL STREET JOURNAL. marks were up 0.4%, but Hong against hundreds of billions of reason that U.S. farmers decliners, falling 1.5% as oil Kong’s Hang Seng Index was dollars worth of Chinese goods. planted more soybeans than prices slumped. posal to impose 20% levies on Many investors expect the down 2.5%. Hong Kong’s market Soybean buyers in China— corn is that because the return President Donald Trump said imported vehicles. China, mean- effects of a shake-up in trade to had been closed for a holiday which gobbles up around one- from soybeans was more prof- he sees his threat to impose while, fulfilled a pledge to slash spread far beyond the auto sec- on during Monday’s selloff in third of all the U.S.-grown itable…The farm community global auto tariffs as his biggest tariffs on imported cars Sunday, tor, however, as the administra- Asia. crop—have sharply slowed was not anticipating this.” weapon to extract concessions but Beijing is preparing to slap tion already has imposed steel —Shen Hong their purchases in anticipation —Jesse Newman from trading partners, as his an additional 25% tariff on U.S. and aluminum duties. and Nina Adam of the duties. contributed to this article. administration studies a pro- auto imports Friday. “It’s very difficult to isolate contributed to this article. Oil Prices Edge Lower Bonds Drop on Strong Economic Data

BY DANIEL KRUGER across the manufacturing sec- vestors use to bet on the di- On Supply Anxieties tor. Economists surveyed by rection of interest-rate policy, AUCTION RESULTS BY NEANDA SALVATERRA day when he asked Saudi Ara- U.S. government bond The Wall Street Journal had late Monday showed a 47% Here are the results of Monday's Treasury auctions. AND AMRITH RAMKUMAR bia to significantly boost its prices fell Monday after strong expected a 58.1 reading for probability that Federal Re- All bids are awarded at a single price at the market- clearing yield. Rates are determined by the difference production by about two mil- manufacturing data signaled June. serve officials will raise rates between that price and the face value. U.S. oil prices edged lower lion barrels a day to offset the economy still has momen- “There’s still quite a bit of at least two more times this 13-WEEK AND 26-WEEK BILLS from a multiyear high Mon- falling production from Vene- tum for further growth. good fundamental momentum year, up from 44% Friday, ac- 13-Week 26-Week day, with some traders wor- zuela and an expected decline The yield on in the economy,” leading some cording to CME Group data. Applications $125,880,604,000 $118,836,780,900 Accepted bids $48,000,224,000 $42,000,042,900 ried that major oil producers in supply from Iranafter U.S. CREDIT the benchmark investors to sell Treasurys, While policy makers in- " noncomp $851,321,700 $774,250,900 could increase production sanctions on Tehran fall into MARKETS 10-year Treasury said Thomas Simons, a money- creased their forecast for the " foreign noncomp $0 $473,000,000 Auction price (rate) 99.509611 98.945917 more than previously ex- place. note rose for the market economist at Jefferies total of 2018 rate increases to (1.940%) (2.085%) pected. Investor anxiety about geo- fourth time in Group LLC. four at their June meeting Coupon equivalent 1.977% 2.136% Bids at clearing yield accepted 53.58% 4.12% Light, sweet crude for Au- political events in places like the past five trading sessions, Broader economic growth from three in March, futures Cusip number 912796QB8 912796PK9 gust delivery inched down 21 Canada and Venezuela has climbing to 2.867%, according appeared to pick up in the have been slow to incorporate Both issues are dated July 5, 2018. The 13-week bills mature on Oct. 4, 2018; the 26-week bills mature on cents, or 0.3%, to $73.94 a spurred the recent oil rally. to Tradeweb, from 2.847% Fri- just-completed second quarter the new projection into mar- Jan. 3, 2019. barrel on the New York Mer- The request from Mr. Trump day. after a modest slowdown in ket probabilities. The chance FOUR-WEEK BILLS cantile Exchange, snapping a comes after Washington said Yields rose after the Insti- the early months of 2018. The of a fourth rate increase was Applications $85,608,729,300 four-session winning streak it would sanction countries tute for Supply Management unemployment rate declined 35% a month ago, before the Accepted bids $35,000,369,300 " noncompetitively $759,558,700 following its best week since that don’t cut oil imports on Monday said its manufac- below 4% this spring, and Fed’s June rate increase. " foreign noncompetitively $0 2016. Brent crude, the global from Iran to “zero” by Nov. 4. turing index rose to 60.2 in forecasters expect solid The probabilities are likely Auction price (rate) 99.855333 (1.860%) benchmark, was down $1.93, Among refined products, June from 58.7 in May. It was growth this year, supported by to increase more the closer Coupon equivalent 1.889% or 2.4%, at $77.30 a barrel. gasoline futures dropped 4.64 the second consecutive in- recent tax cuts and strong the Fed gets to raising rates at Bids at clearing yield accepted 88.72% President Donald Trump cents, or 2.2%, to $2.1048 a crease. Numbers above 50 in- consumer sentiment. its September meeting, Mr. Si- Cusip number 912796PS2 jolted the oil market on Satur- gallon. dicate activity is expanding Fed funds futures, which in- mons said. The bills, dated July 5, 2018, mature on Aug. 2, 2018. . B12 | Tuesday, July 3, 2018 THE WALL STREET JOURNAL. MARKETS Investors Are Wary on Tech, Small Caps Options that offset 40 An options measure dubbed 500 added 2.9%. skew, measuring how Meanwhile, a measure that risk in sectors that tracks expected volatility one Feb. 5 expensive it is to hedge outperformed in 2017 VIX records biggest month from now for a popular jump in history as stock declines, recently small-cap ETF, the iShares become more popular inflation jitters rise. surged for the Technology Russell 2000 fund, has crept June 25 30 Select Sector SPDR Fund. higher, Trade Alert data show. BY GUNJAN BANERJI Volatility jumps It is currently close to the amid trade fears. The Cboe Volatility Index, or VIX, 10 highest it has been in the past After becoming accustomed year, meaning investors see to extraordinary calm in mar- jumped several times this year XLK the possibility of greater kets last year, investors are after hitting lows in 2017. 8 swings ahead. showing greater caution in 20 Expected volatility in one of two of the best-performing the biggest ETFs tracking Jan. 3, 2018 groups of 2018: technology 6 China—the iShares China and small-cap companies. VIX hits second-lowest Large-Cap fund—has risen, The U.S. equity market eked level in its history. too, according to New York- out gains in the second quar- 4 based brokerage Macro Risk ter, but bouts of volatility have 10 Advisors. become a common fixture this Some traders are wagering year. that turbulence in the market 2 As share prices lose some will rise across the board. of their upward momentum, There has been a tick higher in investors are turning to op- call-option buying on the Cboe tions to help shield them in a 0 0 Volatility Index, or VIX, ac- market downturn. 2017 ’18 May June cording to Credit Suisse in a Investors often offset risks June 25 note. A bullish bet on in their stock positions with Tech and small-cap shares have been winners this year, The ratio of bearish put options to bullish call options on the volatility gauge is akin to a options—contracts that give outpacing the S&P 500's slim gains. the iShares Russell 2000 Exchange-Traded Fund has risen. bearish bet on stocks. The VIX them the right to buy or sell is based on options prices on shares at a later date. Traders 15% 3.0 the S&P 500 and tends to rise say that while hedging using when stocks fall. S&P 500 Tech Sector options is still relatively low IWM Call options give the right Russell 2000 2.9 as a nine-year bull market 10 but not the obligation to buy S&P 500 chugs along, activity has shares, while puts confer the picked up. 2.8 right to sell. That is a shift from 2017, 5 The majority of the biggest when record stock prices led 2.7 options positions in the Cboe investors to largely see buying index are calls, Trade Alert these contracts as a waste of 0 data show. Some of these posi- money. 2.6 tions will pay out only if the What has changed is an es- VIX rockets past 25, 55% calation of geopolitical –5 2.5 above 16.09, the level at which stresses. Last year, tensions it closed Friday. JFMAMJJJune with North Korea rattled some The VIX’s average over the investors, but the threat of a Sources: Cboe (VIX); Trade Alert (options data); FactSet (tech stocks) THE WALL STREET JOURNAL. past three months has been trade war between the U.S. about 15, slightly below where and China—the world’s two After being mostly impervi- In the options market, a according to data provider president of equity derivatives it was in the prior quarter. biggest economies—has ous this year to jitters over a measure known as skew tracks Trade Alert. trading at Credit Suisse Group While these figures are below caught their attention in 2018. trade war, technology stocks the cost of bearish options “The tech outperformance AG. its long-term average of Signs of slowing growth in also have been hit recently. versus bullish ones. It is a has really been so large that it Investors are turning to in- roughly 18, it is a jump from countries outside the U.S. have This past Wednesday, as eq- widely followed gauge because behooves people to pay up for surance even in groups that the historic calm of last year, added to anxieties. uity prices tumbled, the S&P during times of nervousness, insurance,” said Eric Metz, are considered less exposed to when the VIX closed below 10 The outsize gains in the 500’s technology sector bore investors tend to pay up for Chicago-based chief invest- the ramifications of a global a record number of times. technology sector and shares the brunt of the selloff, falling the bearish options that allow ment officer at SpiderRock trade war. Because they tend “Volatility markets are of smaller companies this year 1.5%. Some investors are gear- them to sell shares later. Advisors, who oversees op- to get less revenue from clearly reacting to the escalat- have made them more at risk ing up for more tumult, even Skew for a big technology tions strategies. abroad, small companies have ing trade war rhetoric,” Amy during market pullbacks, some after the tech-heavy Nasdaq exchange-traded fund, the This is a shift from the been darlings of the stock Wu Silverman, equity deriva- market participants say, incen- Composite Index just logged Technology Select Sector trend of buying of bullish op- market this year. The Russell tives strategist at RBC Capital tivizing investors to seek in- its eighth consecutive quarter SPDR fund, recently hit the tions for technology stocks in 2000 index climbed 7.4% in the Markets, wrote in a recent surance for them. of gains. highest level in two months, the past, said Tom Holm, vice second quarter while the S&P note. HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Tesla’s Triumph Goes Only So Far Dell’s VMware Deal Tesla’s production tri- scramble affected finances umph comes with some fine Sell the News $380 until Tesla reports financial Won’tBeanEasyOne print. Tesla share price results later this summer. Dell Technologies Inc. go- uity-backed deals. The com- The electric-car maker an- 360 Perhaps most important, ing public again may have panyexpectstohavethe nounced it produced 5,031 higher production figures been inevitable. That doesn’t whole matter wrapped up Model 3 sedans in the final 340 will test how deep the pool mean it was ever going to be before the year is out, pend- week of the second quarter, of demand for Tesla’s cars easy. ing approval of the holders hitting a closely watched 320 really is. In that light, the plan an- of that tracking stock. Monday milestone. The company The company said Monday nounced Monday qualifies as That may not be a slam $335.07 shared photos of celebrating 300 it has 420,000 Model 3 res- one of the better options. As dunk, given opposition Dell employees in its announce- ervations. At last week’s pro- a debt-laden tech giant still has faced in the past from ment filed with the Securi- 280 duction rate, that implies a heavily reliant on selling activist investors. But by of- ties and Exchange Commis- backlog of about 18 months. personal computers, Dell was fering a 25% premium over sion. Shares were up as 260 But Tesla’s website says a never going to be an easy the tracking stock’s average much as 6% Monday but the Model 3 reservation placed sell as an initial public offer- price from the past month, euphoria quickly wore off 240 today will be filled in ap- ing. And the prospect of a Dell has good reason to be- and the stock finished the proximately six to nine reverse merger with VM- lieve it can win most of them April May June July day 2.1% lower. months. A month ago, the ware ran the risk of hurting over. It helps that the track- Tesla is clearly getting Source: SIX THE WALL STREET JOURNAL. website said orders would be the most valuable part of the ing stock has had a tricky better at producing cars, but filled in up to 12 months. new Dell empire. Rumors of value proposition from the a look at the entire quarterly week. That means Tesla built duction rate isn’t the only “Demand is considered a such a move earlier this year beginning, having averaged a output should keep any cele- on the gains made in the last topic investors ought to given due to the reported clobbered the market value 34% discount to VMware’s bration to a dull roar. Tesla week of the first quarter, scrutinize. After all, the backlog of the Model 3 or- of both VMware and the shares since inception. produced about 28,500 when it produced 2,020 point of mass producing ders. However, the actual tracking stock Dell created As for VMware’s holders, Model 3s in the latest quar- Model 3s. But the company Model 3s is to make a profit. size of this backlog is illu- to follow the software maker the deal should help remove ter, meaning nearly 18% were said that nearly 40% of the Tesla added a new assembly sive at best,” says Daniel as a way to help pay for its the cloud that has hung over produced in the final fren- total Model 3s produced in line and worked around the Ruiz, founder of Blinders Off latest big move—the $60 bil- the software maker since zied week, only slightly the most recent quarter have clock to achieve its produc- Research. lion takeover of EMC in January, when rumors of the lower than the last week of yet to be delivered to cus- tion goal, which can’t be It will take much more 2016. reverse-merger option were the previous two quarters. tomers, a larger percentage good for profit margins. In- good news to justify Tesla’s VMware is helping Dell swirling. That has offset the The average for the quar- than in previous quarters. vestors won’t get a clear stratospheric valuation. pay for its transaction again. company’s otherwise strong ter was about 2,200 cars per Tesla’s sustainable pro- look at how the production —Charley Grant This time, Dell is planning to performance of late. buy up the tracking stock, in Dell will still have to face part with $9 billion coming the challenge of appealing to from a special dividend an- investors as a consolidated Nestlé’s Activist Needs to Be Patient nounced by VMware on technology giant at a time Monday. It will then list its when its peers are simplify- Class C shares directly on ing themselves. That won’t be Dan Loeb’s $3 billion bet der has said he will turn pion Petfoods, The Wall the market, making Dell a easy. So it helps that Dell on Nestlé is running into a Slimming over roughly 10% of the Street Journal reported public company five years isn’t making that task any problem: Activist investing Nestlé's price/earnings ratio portfolio; Mr. Loeb suggests Monday. after going private in one of harder. works best on basket cases. 15%. So far Mr. Schneider One problem with Mr. the largest ever private-eq- —Dan Gallagher 24 times Mr. Loeb’s firm Third Dan Loeb invests has disposed of only the U.S. Loeb’s position is that Nestlé Point published an open let- 22 candy business. is a vast company that will ter Sunday accusing the Mr. Loeb is right to point take a long time to refocus. OVERHEARD world’s largest food com- 20 out that, with asset prices Many of its troubles, such as pany of a “muddled strategic high, Mr. Schneider should intense pressure from strug- approach” and calling on its 18 move faster. The activist is gling food retailers, are be- Hershey has joined the list ter Cups. Canada accounts for directors to react faster to 16 also right that Nestlé’s $32 yond its control. of iconic American brands to around 5% of the company’s changing tastes. A new divi- billion stake in cosmetics Mr. Loeb’s other problem be hit by foreign trade retalia- sales. While some other U.S. sional structure based on 2013 ’14 ’15 ’16 ’17 ’18 group L’Oréal serves no ob- is that he bought Nestlé tion, following the likes of Har- food companies produce most product category rather than Source: FactSet vious purpose and is ripe for roughly a year ago, when its ley-Davidson and Jim Beam. of their Canadian sales in the geography would help, he asale. shares were at a peak multi- Canada last week unveiled country, Hershey exports most added. the time frame. But in other respects, Mr. ple of earnings. its list of U.S. products that of its products across the bor- Yet the activist’s vision For example, the easiest Loeb’s criticisms look unfair. They have fallen 7% over will be hit with new tariffs. It der. for Nestlé is actually similar way to improve growth Mr. Schneider has been a one year as growth has dis- includes yogurt, roast coffee, This is the last thing the to that of Mark Schneider, would be to sell dated very active buyer, having al- appointed. salad dressing and chocolate. company needs as it is already who became chief executive brands that don’t sit com- ready picked up a range of Third Point’s investment Among those that will be struggling with reduced de- 18 months ago. fortably with its focus on often niche brands in areas in Nestlé will test Mr. Loeb’s hit the hardest is the Pennsyl- mand at home. Hershey bars Their main disagreement “nutrition, health and well- of strategic focus. Nestlé is appetite for long-term think- vania maker of Hershey’s these days are coming with seems to be over the extent ness,” and replace them with in talks to acquire a $2 bil- ing. Kisses and Reese’s Peanut But- fewer smiles. of the changes needed and trendier brands. Mr. Schnei- lion stake in Canada’s Cham- —Stephen Wilmot