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TECHNOLOGY: DISH POSTS INCREASE IN PAY TV CUSTOMERS B

BUSINESS&FINANCE

Even with U.S. stocks rallying

to all-time highs, adding to the

longest bull market on record,

many foreign investors feel they

have no choice but to pile in.

The influx provides another

pillar of support to the U.S.

market, which has outper-

formed global equities for

much of the past decade.

U.S. stocks remain appealing,

despite rich valuations, because

of brighter domestic growth

prospects than other developed

economies, a strong labor mar-

ket and solid consumer spend-

ing, global investors say.

An apparent thaw in U.S.-

China trade relations has also

given international players

more confidence to maintain

their allocations to the world’s

largest economy.

Foreign private holdings of

U.S. stocks hit a record of $7.

trillion as of July, the latest

data available, according to

Treasury Department figures.

Data for foreign funds excludes

holdings from sovereign-wealth

funds and central banks, so

overall international holdings

are likely substantially higher.

“You’re seeing a real diver-

gence between growth pros-

pects in the U.S. equity market

and the rest of the world,” said

Hannah Anderson, global mar-

ket strategist at J.P. Morgan As-

set Management in Hong Kong.

Analysts on average expect

9.7% growth in earnings per

share for the S&P 500 in 2020,

FactSet data show, versus 8.6%

for Europe’s Stoxx 600 and

2.6% for Japan’s Nikkei 225.

Ms. Anderson said the appe-

tite for U.S. shares among in-

ternational clients has been

Please turn to page B

BYSTEVENRUSSOLILLO

Foreign

Cash Adds

Strength to

U.S. Stocks

Saudi Arabia’s sovereign-

wealth fund has pumped $

million into Travis Kalanick’s

new company,CloudKitchens,

according to people familiar

with the situation, in a deal

that could value the commis-

sary operator at about $5 bil-

lion and reunites the former

Uber Technologies Inc. chief

with one of his top backers.

The Saudi fund completed

its agreement with Cloud-

Kitchens in January, the peo-

ple said. It was the fund’s first

known deal in Silicon Valley

since the murder of journalist

Jamal Khashoggi last year, the

people said, an incident that

sparked global outrage and

nixed several would-be invest-

ments amid the U.S. determi-

nation that Saudi leaders or-

chestrated the killing. Saudi

Arabia has denied that assess-

ment.

CloudKitchens buys cheap

or rundown real estate, often

near city centers, where it

builds commissary kitchens—

also known as ghost kitch-

ens—that it rents to restau-

rants wanting to prepare food

exclusively for delivery ser-

vices like Grubhub Inc. and

DoorDash Inc. CloudKitchens

also operates its own delivery-

only restaurants in the com-

missaries, with names like Ex-

cuse My French Toast, Egg the

F* Out and B*tch Don’t Grill

My Cheese.

Saudi Arabia’s Public In-

vestment Fund, or PIF, has

helped finance the company’s

expansion from cities in the

Please turn to page B

Saudis Get

Behind

An Uber

Founder’s

Startup

ByRory Jonesin Dubai

AndRolfe Winklerin

San Francisco

its debut last week to mixed

critical reviews but very favor-

able audience reaction, ac-

cording to the review-aggrega-

tor website Rotten Tomatoes.

The program is the flagship

series for Apple’s TV+, a

$4.99-a-month subscription

service designed to help lessen

the company’s dependency on

its iPhone business at a time

of slowing sales.

Apple is offering the service

free for a year with a purchase

of a new iPhone, iPad or Mac.

Hollywood agents, writers

and actors have been watching

Apple’s shows closely to see

how it would handle its first

foray into original TV pro-

gramming.

Among their questions:

Would the shows be a vehicle

to push Apple’s own products?

“The Morning Show”

Please turn to page B

S&P3085.18À0.27% S&PFINÀ0.67% S&PITÀ0.67% DJ TRANSÀ0.56% WSJ$IDXÀ0.09% LIBOR3M 1.901 NIKKEI (Midday)23352.10À0.09% See more at WSJ.com/Markets

The split was an acknowl-

edgment of how much of its

once-powerful grip on U.S. con-

sumers Gap has lost, as shop-

pers shifted to fast-fashion

chains such as H&M and Zara.

Old Navy now exceeds the orig-

inal Gap brand in sales.

But on Thursday the com-

pany warned that sales were

Note: €1= $1.1066 Sources: the company (revenue); FactSet (market cap)

Photo illustration by Lynne Carty; Photos: Bloomberg News (2); AFP/Getty Images; F. Martin Ramin/WSJ; iStock (2)

Wine

& spirits

€3.9B

s10%

Selective

retailing

€10.6B

s11%

Perfumes

& cosmetics

€4.9B

s11%

Watches

& jewelry

€3.3B

s8%

Fashion

& leather goods

€15.9B

s22%

Nine-month

segment revenue

for2019and

change from

previous year

Market capitalization, in billions

€

0

50

100

150

2017 ’18 ’

LVMH

€204.2B

BP

Unilever

AB InBev

HSBC

PARIS—Selling handbags,
cognac and designer fashion,
LVMH Moët Hennessy Louis
VuittonSE has become one of
the most valuable companies
in Europe.
Its shares are worth more
than Europe’s biggest auto
maker, Volkswagen AG, and
biggest bank, HSBC Holdings
PLC. This week, LVMH’s mar-
ket capitalization topped €
billion ($221 billion) for the
first time, making it almost
as valuable as Europe’s big-
gest oil producer, Royal
Dutch ShellPLC.
LVMH isn’t the only
stock-market star in the
luxury business: The
share prices of two of
LVMH’s smaller rivals,
KeringSA andHer-
mès International
SA, have soared
over the past two
years.
The shift in stock-market
fortunes is a sign of how the
luxury business is eclipsing
sectors that were once at the
core of the European economy.
Banks are struggling to adapt
to new post-financial-crisis
regulations. Auto makers face
declining car sales. Big oil
companies are subject to the
whims of turbulent oil and
natural-gas markets.
But LVMH, Kering and Her-
mès are enjoying a strong tail-
wind: steady growth in the
number of customers around
the world who want to own a
piece of European heritage.
The growth has been strongest
among the Chinese, whose
fast-rising incomes have made
them the luxury industry’s
most important customers.
But the three companies are
selling strongly to Americans
and Europeans as well.
LVMH, which owns 75
brands, has created a mass
market for luxury by selling
goods with a range of prices
that can attract consumers
who vary in age and income.
Louis Vuitton, which by some

BYMATTHEWDALTON

LVMH Drives Luxury to High End of Market

Tiffany has said it is re-

viewing the offer and that no

discussions have taken place.

“As long as global market

conditions support a larger

and larger audience of con-

sumers who are interested in

Please turn to page B

make a bid forTiffany&Co.,

the American jeweler. At $14.

billion, Tiffany would be the

biggest acquisition yet by Ber-

nard Arnault, the French bil-

lionaire who is the chief exec-

utive and controlling

shareholder of LVMH.

cosmetics boutiques are in

malls across the U.S.

Now the conglomerate aims

to add engagement rings in

blue boxes to its offering. This

month it decided to use some

of the cash it accumulated

during the luxury boom to

estimates accounts for one-

quarter of LVMH’s sales and

half of its operating profit,

sells leather goods starting at

a few hundred dollars in over

450 stores world-wide. A bot-

tle of Hennessy Cognac sells

for as little as $25. Sephora

AppleInc.’s flagship televi-

sion series “The Morning

Show” is a glossy, star-stud-

ded program designed to draw

subscribers for the company’s

new streaming service. The

show, it turns out, also dou-

bles as an extended commer-

cial for the gadgets that drive

Apple’s business.

While Jennifer Aniston,

Reese Witherspoon and Steve

Carell have top billing in the

drama about a news program

gone haywire after an anchor’s

sexual misconduct, the

iPhones, iPads and Macs in the

show might have deserved

their own makeup room given

all their time on camera.

Apple products are visible

in an average of 32 camera

shots per episode, and an Ap-

ple logo is visible in roughly

one-third of those shots, ac-

cording to a Wall Street Jour-

nal tally from viewing all 10

episodes of the first season.

Rival brands are scarce.

“The Morning Show” made

BYJOEFLINT

ANDTRIPPMICKLE

Apple’s Gadgets Grab Lots of

‘Morning Show’ Screen Time

GapInc. said Chief Execu-
tive Art Peck will step down
immediately and be succeeded
on a temporary basis by Robert
Fisher, the son of the com-
pany’s founders.
The apparel maker, which is
spinning off its Old Navy chain,
has struggled for years with
sluggish sales. On Thursday, it
warned of another quarter of
weak sales and lowered its
profit targets for the year.
Shares tumbled in after-hours
trading.

Mr. Peck, who joined Gap

nearly 15 years ago and became

CEO in 2015, also will relin-

quish his board seat.

Mr. Fisher, who is Gap’s

chairman and a board member

since 1990, was previously in-

terim CEO.

In February, Mr. Peck an-

nounced a plan to separate the

rapidly growing Old Navy bud-

get brand from the rest of the

business, creating two publicly

traded companies in 2020. Mr.

Peck was expected to remain

CEO of the parent of Gap, Ba-

nana Republic and Athleta. On

Thursday, a Gap spokeswoman

said the separation is continu-

ing as planned.

Mr. Peck’s compensation

since he became CEO adds up

to about $40 million, according

to Equilar, a compensation data

firm. The tally includes stock

appreciation after equity

grants, though Mr. Peck’s out-

standing option awards are un-

der water. Equilar valued Mr.

Peck’s departure package, in-

cluding 18 months of salary, at

about $3.7 million, plus a po-

tential year-end bonus based

on company performance.

falling across its brands. Global

comparable sales at the Gap

brand dropped 7% in the fiscal

third quarter ended Nov. 2,

while those for Banana Repub-

lic dropped 3%. Old Navy’s

global comparable sales fell 4%.

On Thursday, the company

said it expects adjusted earn-

ings per share of $1.70 to $1.

for the current fiscal year, com-

pared with its previous fore-

cast of $2.05 to $2.15 a share.

Finance chief Teri List-Stoll

blamed difficult market condi-

tions and company missteps,

Please turn to page B

BYMICAHMAIDENBERG

Gap Chief Executive Steps Down

PG&ECorp. reported a $1.
billion third-quarter loss as the
costs of wildfires, bankruptcy
and blackouts weighed on the
beleaguered California utility.
The San Francisco company
recorded $2.5 billion in new
pretax charges related to the
claims it faces following a se-
ries of deadly wildfires in 2017
and 2018 that California inves-
tigators have linked to its
equipment. That raises the total
charges the company has taken
from the fires to $20.4 billion.
The charges reflect a tenta-
tive $11 billion settlement that
PG&E, the parent of Pacific Gas
& Electric Co., reached in Sep-
tember to compensate insur-
ance companies that covered
fire-related losses. The com-
pany is still working to reach a
settlement with individual vic-
tims of those fires and has pro-
posed establishing an $8.4 bil-
lion trust fund to pay claims.
Please turn to page B

BYKATHERINEBLUNT
ANDMICAHMAIDENBERG

PG&E Hit

By Cost of

Wildfires,

Blackouts Prime-TimePlacement
Of the nearly 320 camera shots in ‘The Morning Show’ that
featured Apple products, the iPhone got the greatest visibility.

Percentageofshotsinwhicheachproductwasvisible

Source: WSJ analysis of the show

iPhone

MacBook

iMac

iPad

Watch

HomePod

AirPods

AppleNews

80%

18%

15%

9%

5%

4%

1%

1%

INSIDE

Sears Closings

The retailer’s owner is

shutting down 96 stores.... B

FINANCE

As consumers

gravitate to apps,

banks rethink the role

of their branches.B

TECHNOLOGY

T-Mobile launches

price war by slashing

monthly data plan’s

cost to $15. B

PATRICK T. FALLON/BLOOMBERG NEWS