Dwindling gains in science, medicine and technology hold back growth; is America too risk-averse?
Suddenly, boring is beautiful in the stock market.
As investors lick their wounds from early-year troubles and search for some stability in their portfolios, they are dumping shares in fast-expanding industries such as technology and turning to companies paying hefty dividends.
This year, stocks in the S&P High Yield Dividend Aristocrats Index—companies in the S&P Composite 1500 that have increased their dividends every year for at least 20 years—are up 1.91%, including dividends, compared with a negative total return of 4.3% for the S&P 500 index. The total return on the Dow Jones U.S. Dividend 100 Index, composed of stocks that offer consistent, high payouts, is negative 0.8%.
It is the latest sign of changing times in the markets, with income-generating investments suddenly warranting a premium, in contrast with the trend that held from 2009 to last year, when dividend stocks lagged behind a broad market rally.
The U.S. government has warned some top U.S. banks not to bid on a potentially lucrative but politically risky Russian bond deal, saying it would undermine international sanctions on Moscow, people familiar with the matter said.
The move, apparently the first of its kind since the sanctions went into effect, has sent Wall Street bankers scrambling to determine whether the opportunity for new business is worth the political downside of bucking the administration’s warning. The rules don’t explicitly prohibit banks from pursuing the business, but U.S. State Department officials hold the view that helping finance Russia would run counter to American foreign policy.
Russia plans to issue at least $3 billion of foreign bonds—its first international issue since the U.S. and its allies imposed sanctions in 2014 following Moscow’s annexation of Crimea and support for separatists in Ukraine, according to people familiar with the matter.
Russia invited European and Chinese banks to bid on the deal as well as several from Wall Street, including Bank of America Corp, Citigroup Inc., Goldman Sachs GroupInc., J.P. Morgan Chase & Co. and Morgan Stanley, the people said.
So far, there is no consensus among the Wall Street firms about whether to move ahead. Some bank officials, including at Citigroup, say they won’t participate. Other banks, including Goldman and J.P. Morgan, continue to weigh their options.
Officials at the State Department and Treasury Department issued the caution in response to questions from some of the banks about whether they were permitted to arrange a bond sale for Russia.
U.S. government officials say helping Russia finance its debt would run counter to the objectives of the sanctions.
Agencies are developing encryption tools for secure communications, even as the FBI battles for access to an encrypted iPhone
Researchers in London last year discovered an online jihadi handbook with instructions on sending encrypted instant messages that would be indecipherable to law enforcement. The tools it recommended—ChatSecure and Cryptocat—are popular throughout the Middle East, making them easily available to extremists from that part of the world.
They were also developed largely with money from the U.S. government.
The U.S. federal government can work at odds with itself, but not often so directly on a topic with such clear national-security implications. Some federal agencies have funded the development of nearly unbreakable encryption software, while others, especially in intelligence and law enforcement, fume over their inability to read protected messages when they have a court order.
The U.S. Justice Department has sought a court order to force Apple Inc. to help the FBI break into the encrypted iPhone of one of the perpetrators of the San Bernardino, Calif., terrorist attack. Apple says it will fight the order. Meanwhile, at least five federal agencies are developing similar encryption tools, with the aim of helping military officers or pro-democracy activists avoid detection overseas.
Since the days of Teddy Roosevelt, presidents have been using tools like photo ops, speechwriting and polling—and often for their biggest achievements
Since Theodore Roosevelt’s day, when candidates began campaigning for votes and presidents started regularly courting the public, politicians have been refining the tools and techniques of what we now call spin. Illustration: Peter Oumanski
As the 2016 election starts for real next month, one complaint that unites Americans left and right—and helps to explain the rise of outsiders like Donald Trump and Bernie Sanders—is that our political process has become shallow and scripted, manipulated at every turn. We gripe about the suffocating presence of “spin”: the policies tested by pollsters and focus groups, the slogans and laugh lines penned by speechwriters, the staged photo ops and town-hall meetings. To find examples of a nobler, more authentic politics, we can only look to the past: the irrepressible Theodore Roosevelt, the austere Calvin Coolidge, the jaunty Franklin Roosevelt, the unrehearsed Harry Truman, the unprepossessing Dwight Eisenhower.
But the spin that we find so pervasive today is nothing new. It actually goes back more than a century. In fact, all those revered past presidents were pioneers in honing the modern methods of image-making and message-craft that we now so often denounce.
Since Theodore Roosevelt’s day, when candidates began campaigning for votes and presidents started regularly courting the public, politicians have been refining the tools and techniques of what we now call spin. Spin turns out to be woven into the fabric of American politics, and though it is hardly an unmixed good, it is inseparable from many of the signature achievements of our greatest leaders.
Consider the presidential press conference, an institution so familiar today that no one thinks twice about it. But it began as a political gambit.
Two ex-employees of the blood-testing startup Theranos are alleging that the company deleted quality control data of its proprietary machines and cherry-picked data when comparing those machines to traditional lab machines, according to a new report published by the Wall Street Journal on `.
The first incident involved a blood test ordered in 2013 for a patient using the company’s proprietary “Edison” lab machine. The lab worker assigned to the test found problems that indicted accuracy problems with the device. When the lab worker told superiors, a research and development employee came to the lab and deleted the data.
In the second incident cited by the Journal’s John Carreyrou, an employee sent an email to CEO Elizabeth Holmes in 2014 alleging that the company had “cherry-picked” data when comparing the “Edison” machines to traditional blood-testing machines to make the machines look more accurate.
From the report:
Procter & Gamble Co. Chief Executive A.G. Lafley speaks on just one earnings conference call a year, down from his previous practice of every quarter. The company says that helps him stay focused on pulling P&G out of a growth slump.
But Mr. Lafley still meets regularly with investors in private. In March, Mr. Lafley’s comments during a string of conversations with investors in New York gave a Wall Street analyst who was present the strong impression that he would step aside as CEO sooner than expected. That hunch was confirmed in July.
P&G says it is careful not to reveal market-sensitive information to investors and analysts who get special access to the company. For the past 15 years, selective disclosure by companies has been illegal under U.S. securities rules. Yet the same rules explicitly allow private meetings like those by P&G.
The result is a booming back channel through which facts and body language flow from public companies to handpicked recipients. Participants say they’ve detected hints about sales results and takeover leanings. More common are subtle shifts in emphasis or tone by a company.
“You can pick up clues if you are looking people in the eye,” says Jeff Matthews, who runs Ram Partners LP, a hedge fund in Naples, Fla. He says he never invests in a company without meeting its management.
Access usually is controlled by brokers and analysts at Wall Street securities firms, who lean on their relationships with companies to secure meetings with top executives. Invitations are doled out to money managers, hedge funds and other investors who steer trading business to the securities firms, which in turn provide the investors with a service called “corporate access.”
Investors pay $1.4 billion a year for face time with executives, consulting firm Greenwich Associates estimates based on its surveys of money managers. The figure represents commissions allocated by investors for corporate access when they steer trades to securities firms.
Publicly traded U.S. companies held an average of 99 one-on-one meetings with investors apiece last year, according to a survey by market-information company Ipreo.
General Electric Co. said in its annual report that it “ensured strong disclosure by holding approximately 70 analyst and investor meetings with GE leadership present” in 2014. The total was roughly 400 when including meetings with other executives, such as those in GE’s investor-relations department, a spokesman says.