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Good Morning. In today’s edition, Republicans push ahead with the Kavanaugh nomination, “safety” stocks fuel a market rally, and companies prepare for the great Brexit unknown. |
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Republicans forge ahead with the Brett Kavanaugh confirmation process. They still plan a hearing Monday on sexual-assault allegations by Christine Blasey Ford against the Supreme Court nominee, and set a 10 a.m. Friday deadline for Dr. Ford to say whether she will testify. The White House said President Trump wouldn’t name a replacement nominee unless there is a clear need, and that the administration is going “full steam ahead” to support Judge Kavanaugh, who has denied the assault accusations. |
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“Safety” stocks fuel a market rally. | |
The S&P 500 and Dow Jones Industrial Average rose to within 0.2% and 0.8%, respectively, of their all-time highs on Wednesday. But there’s a change in the stocks propelling the rally, a sign investors may be protecting against a pullback. The S&P 500’s biggest gainers this month include telecommunication-services and consumer-staple companies—so-called safe sectors, typically favorites when markets are volatile or declining but laggards during rallies. Many of the shares that powered indexes to highs earlier in 2018 have tumbled this month—including Apple, Amazon and Alphabet, all down at least 4%, and Facebook, off more than 7%. From reporter Akane Otani: Few investors I speak to are ready to bail on the stock market, but it’s easy to get a list of things that worry them: rising interest rates, inflation, the recent tech-share pullback, the trade conflict. What to watch for is a point where everything—stocks, bonds, commodities, bitcoin—starts falling in unison. We’re not there yet. Different sectors of the stock market have been taking the baton, allowing broader indexes to keep marching higher. That suggests investors on the whole are still betting they can get more out of the bull market. |
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Companies’ Brexit plans are leaps into the unknown. | | BMW is moving up its annual weekslong maintenance shutdown at a U.K. plant to fall right after Britain’s planned departure. PHOTO: GEOFF CADDICK/AGENCE FRANCE-PRESSE/GETTY IMAGES |
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Some of the world’s biggest companies are drawing up plans for the unplannable: a March divorce between Britain and the European Union in which even some basics have yet to be hammered out. Drug makers are stockpiling medicines, Mondelez International is boosting supplies of ingredients and Airbus is asking suppliers to keep extra parts on hand. From reporters Saabira Chaudhuri and Robert Wall: Executives’ worries that the U.K. will crash out of the EU next year without a follow-on trade deal have increased in recent weeks amid political infighting in London. Their concerns go beyond the need to stockpile goods and prepare for red tape at the border. Ryanair CEO Michael O’Leary says it is now “more likely” flights between Britain and the EU could be grounded for several days after March 29, 2019 absent an agreement on flight rights. Trans-Atlantic travel shouldn’t be affected. |
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A Russia-linked money-laundering case involving Danske Bank grows even more massive. Denmark’s largest bank said more than $230 billion in transactions flowed through its tiny Estonian branch, a disclosure accompanied by the resignation of CEO Thomas Borgen (pictured). The sheer size of the cited sum points to the bank’s being the nexus of a network carrying illicit money out of Russia and other former Soviet states. |
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FEMA began taking stock of hurricane damage. | | A FEMA task force from California searched a Fairfield Harbour, N.C., neighborhood for evacuees last week. PHOTO: CHIP SOMODEVILLA/GETTY IMAGES |
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Just as some local officials in the Carolinas said they were getting antsy about federal aid, it began arriving. FEMA said the agency isn’t designed to take the lead in these situations, and it is working with local officials to provide expertise and resources as needed. Some of FEMA’s main functions, like funding rebuilding efforts and medium- and long-term shelter, can’t begin until floodwaters recede, the agency said. In North Carolina, flooding from Hurricane Florence has hit hog farms hard, killing more than 5,000 animals and releasing pollutants from waste lagoons into waterways. |
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Hack the vote: Can tech safeguard elections?
| In this episode of WSJ’s The Future of Everything, we watch hackers compromise voting machines and hear from technologists hoping to safeguard democracy with help from blockchain and mobile voting. Can tech protect our democratic process from foreign interference? | Listen Now |
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What We’re Following Auction for Sky: Comcast and 21st Century Fox will settle their long takeover battle for British pay-TV company Sky via an auction starting Friday. Amazon Probe: The EU is looking into the company's treatment of merchants. Fed Choice: President Trump will nominate Nellie Liang to the central bank’s board of governors. Jack Ma’s Jobs Promise: The Chinese tech tycoon took back his pledge to create a million jobs in the U.S., citing the trade fight with China. Catholic Abuse Scandal: Roman Catholic bishops in the U.S. announced new policies for dealing with sexual-abuse accusations. |
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Trending Stories at WSJ.com | |
Some Fortune 500 companies are using artificial intelligence to weed out job applicants. Is this fair? In this episode of Moving Upstream, WSJ’s Jason Bellini investigates. (Watch) Universal life insurance, a 1980s sensation, has turned into a crippling burden for some elderly policyholders. (Read) The godfather of cryptocurrency has a plan to address bitcoin’s biggest shortcoming: speed. (Read) The legal team conducting the Ohio State football probe didn’t attempt to recover deleted text messages. (Read) |
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What Else We’re Reading Amazon is considering opening as many as 3,000 new cashierless stores. (Bloomberg) Go inside Facebook’s “War Room,” the company’s headquarters for safeguarding elections. (New York Times) United Nations statistics show Colombian cocaine production hit record levels in 2017. (BBC) President Trump suggested building a wall across the Sahara to help solve Europe’s migration crisis, Spain’s foreign minister said. (Bloomberg) |
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Today’s Question and Answer In response to yesterday’s question about employers’ boosting benefits—including bonuses and vacation—faster than salaries, and whether you would prefer a higher salary or more benefits: Kalyna Melnyk from Illinois said: “Having just graduated with my master’s degree in May, and starting my first job in the fall, I would (surprisingly) prefer better benefits to a higher salary. More money is always good to have, especially with student-loan debt looming, but increased vacation time, better health coverage and higher contributions to 401(k)s are very attractive. These are perhaps less necessary when only considering the financial aspects, but for personal happiness and improved mental well-being the benefits packages far outweigh a heftier salary.” Thomas Giordano from New York wrote: “Both yield-curve inversions and unemployment-rate troughs show that a recession could be very near. It makes sense for companies to increase bonuses and vacation time over salary. Although I’d rather have a higher, consistent salary, I’d also rather have a job if something bad was on the horizon. In the meantime, I’ll take what I can get.” Richard Spaulding of New Jersey shared: “Increasing benefits is just another form of throwing crumbs to the working class. While it’s obviously better than no increase, companies should not be congratulated for this. The only significant increase would be to wages at an equal pace to growth in profits. Without that, this benefit increase is just window dressing for the working class while the rich continue to get richer and get compensated at a much greater rate.” Question for tomorrow’s 10-Point: Going back to our story above, what are your thoughts on the new steps announced by Roman Catholic bishops in the U.S. for dealing with sexual-abuse accusations? Email us your comments, which we may edit before publication, to 10point@wsj.com, and make sure to include your name and location. |
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| The 10-Point was the name given to the news column that runs on the front page of The Wall Street Journal. Today’s newsletter was curated and edited by Eleanor Miller (eleanor.miller@wsj.com) in collaboration with Editor in Chief Matt Murray. Let us know what you think by replying to this email. Editor’s note: The 10-Point is now a WSJ member benefit. If you receive our flagship newsletter and aren’t yet a member, we will continue sending it to you for now. To ensure you don’t miss out, we invite you to join us and enjoy the full breadth of scoops, analysis and great storytelling from our journalists around the globe. |
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