Stocks Wait and See
Markets appeared to be waiting for
a rate cut—how big?—and for earn-
ings season to end. The big banks
mostly topped analyst estimates, but
net interest margins narrowed. Net-
flix saw its U.S. subscriber numbers
fall, Microsoft blew the doors off its
earnings, and President Trump
warned that China talks could take a
long time. In central bankdom,
South Korea, Indonesia, and South
Africa reduced rates. For the week,
the Dow industrials fell 0.64% to
27,155.83; the S&P 500 lost 1.23% to
2976.81; and the Nasdaq Composite
shed 1.18% to 8146.49.
More Delays for MAX
American Airlines Group.............10,M
extended cancellations of Boeing
737 MAX planes into the end of the
year. The schedule for flying the
planes now could be pushed back to
January, as delays in fixing flight-
control software and getting gov-
ernment approvals have mounted.
Boeing set aside $5 billion to com-
pensate airlines for the delays.
Tweeting on the Edge
Trump engaged in a multiday tweet
attack against four Democratic rep-
resentatives, starting it off by sug-
gesting they could go back to their
“crime-infested” home countries.
Three were born in the U.S., and all
four are citizens. Critics called the
attacks racist, and the House passed
a resolution condemning the lan-
guage but failed in an attempt to
begin impeachment. On Wednesday,
at a Trump rally, the crowd chanted,
“Send her back,” when the president
mentioned one of the four, Minne-
sota Rep. Ilhan Omar.
Debt Ceiling Rerun
Treasury Secretary Steven
Mnuchin said talks on a debt ceiling
ceiling before the August recess.
House Majority Leader Nancy
Pelosi then shot that down, saying
the ceiling and the budget had to be
done together. By Friday, Mnuchin
said the two sides agreed to a two-
year deal and spending levels, and
were working on spending offsets.
Tech in the Dock
Apple , Amazon.com , Alphabet ,
and Facebook testified for several
days before Congress, hit by every-
thing from privacy to censorship to
political concerns. Facebook also
had to deal with questions involving
its virtual currency, Libra. Mean-
while, the Federal Trade Commis-
sion and the Department of Justice
may be readying antitrust cases
against Big Tech. And President
Trump tweeted that the govern-
ment will look into charges raised
by investor Peter Thiel that Google
had ties to the Chinese government.
Freezing Fuel Efficiency
The Trump administration approved
freezing Obama-era rules that hiked
penalties for failing to meet fuel-effi-
ciency standards. A number of major
car makers protested the move,
which they said would significantly
raise compliance costs.
Barry Blows Through
Hurricane Barry made landfall on
the Gulf Coast last Saturday, dump-
ing rain across the region, though
sparing New Orleans. Some 70% of
the oil and 55% of the natural gas
in the Gulf of Mexico was shut off
as the storm rolled through.
Deals Under Stress
The Justice Department reportedly
gave T-Mobile US a week to com-
plete talks to sell assets or it would
block its $26 billion deal for Sprint.
And Carl Icahn launched a proxy
Review
Review
Electric Race Cars Get Interactive
Powered by 5G and Fans
We saw the future of live entertainment in a recent electric-car
contest. The event: the 2019 ABB Formula E race, run through
the streets of Brooklyn’s Red Hook. In its fifth season, Formula
E is an all-electric, open-wheel racing series with 13 races and
11 teams fielding two cars each. Speeds can hit 170 miles an
hour, and cars produce sounds akin to a Star Wars battle.
As in many racing series, top speeds are capped—the top
speed is limited by power-output rules. Cars could go faster
by sending more juice to the motors. In Formula E, fans can
vote for their favorite drivers, which, thanks to connectivity,
can be translated into a power boost—so more popularity
equates to more speed.
If it sounds a little like Nintendo’s Mario Kart , it is. And
there’s more. Drivers who choose to pass through a power-boost
lane can get roughly 10% more power for a minute or two. For-
mula E calls this “attack mode.” Cars glow when it’s active.
There are investment implications here. Interactivity is en-
abled by higher-speed data connections. It’s one example of
new applications enabled by coming network standards like
5G. It also highlights the benefits of live entertainment to con-
tent operators like WaltDisney —viewers can’t DVR the event
if they want to participate in fan voting. And it’s yet another
example of how social media keeps fans engaged: Formula E
voting requires a Twitter sign-in.
Consider what videogame companies such as Electronic
Arts could do with technology like this. Inside the race village
next to the grandstand, fans can race a driver in a Formula E
videogame during the race. So what’s next? Crowdsourced
penalty flags during NFL games? A four-point power boost
for the NBA’s Steph Curry? Or 30 seconds tacked onto a
hockey power play if a team holds the puck for a given amount
Electric Race Cars Get Interactive
Powered by 5G and Fans
The Numbers
Numbers by Barron’s, a daily
podcast, dug into this trio of
vital statistics this past week.
36%: Blue Apron’s stock
surge after adding Beyond Meat
to its menus.
1%: Surveyed fund managers
who think inflation will increase
globally in the next 12 months.
19%: Analysts bullish on Mi-
crosoft stock before the com-
pany reported earnings.
Sign up wherever you listen to
podcasts or head to Barron’s/
podcasts for more information.
Dow Indicator DowIndustrials 27154.20 – 177.83 DowGlobalIndex 404.76 – 2.63 10-YearTreasuryBonds 2.05 – 0.
He Said:
“Many players have
attempted to use
cryptocurrencies to
fund their malign
behavior...”
Treasury Secretary Steven
Mnuchin
Preview
Preview
ConsensusEstimate
Day Time Consensus Est Last Period
T 10:00 JuneExistingHomeSales 5,330,000 5,340,
W 10:00 JuneNewHomeSales 650,000 626,
TH 8:30 JuneDurableGoods 0.65% -1.30%
8:30 JuneWholesaleInventories 0.2% 0.4%F 8:30 Q2GDP-a 1.8% 3.1%
ComingEarnings
Day Consensus Year
Estimate AgoM
HALLIBURTON(2Q) $0.30 $0.
T Target...................................
CHUBB(2Q) 2.56 2.
TEXASINSTRUMENTS(2Q) 1.22 1.
VISA(3Q) 1.32 1.
BIOGEN(2Q) 7.49 5.
LOCKHEEDMARTING(2Q) 4.77 4.
FIRSTENERGY(2Q) 0.61 0.
TRAVELERS(2Q) 2.32 1.
KIMBERLY-CLARK(2Q) 1.61 1.
COCA-COLA(2Q) 0.62 0.
UNITEDTECHNOLOGIES(2Q) 2.04 1.
MoreEarningsonPageMMonday 22
The Chicago Fed releases its National
Activity Index. Look for a reading of
0.10 in June compared with a -0.
reading in May.
Halliburton , SteelDynamics , GNC
Holdings , and ZionsBancorp are
among the companies reporting finan-
cial results.
Tuesday 23
The Federal Housing Finance Agency
releases its Home Price Index for
June. The index is expected to grow at
0.4% as it did in May.
The National Association of Realtors
releases existing-home sales for June.
Sales are expected to remain flat at a
seasonally adjusted annual rate of 5.
million units from May’s 5.34 million.
Financial results are coming fast and
furious this week. Today look for
earnings conference calls from Snap.
RobertHalfInternational , Visa ,
DiscoverFinancialServices , Chi-
potleMexicanGrill , Whirlpool ,
Coca-Cola , UnitedTechnologies ,
LockheedMartin , Harley-Davidson ,
and Travelers.
The International Monetary Fund re-
leases its World Economic Outlook
update.
Wednesday 24
The Census Bureau releases new-home
sales data for June. Consensus esti-
mates are for a seasonally adjusted
annual rate of 650,000 homes from
May’s rate of 626,000.
Former Special Counsel Robert Muel-
ler’s testimony before Congress is
expected after being postponed so
that lawmakers could reach an agree-
ment allowing them more time for
questioning.
Tesla, Deutsche Bank , AT&T , United
ParcelService , GlaxoSmithKline ,
HiltonWorldwideHoldings , Boeing ,
Facebook and FordMotor release
financial results.
Thursday 25
The European Central Bank holds its
monetary policy meeting in Frankfurt.
Analysts expect the bank to cut its key
interest rate, now at minus 0.4%, or
signal a rate cut before its September
meeting. ECB officials have signaled
they’ll consider interest-rate cuts or
the relaunch of the bond-buying pro-
gram to stimulate the euro-zone, which
is suffering from slowing growth and
trade disputes.
Southwest Airlines,AlaskaAir
Group , SpiritAirlines , Alphabet ,
Amazon.com , Bristol-MyersSquibb ,
O’ReillyAutomotive ,and MGMRe-
sortsInternational hold earnings
calls with investors.
New orders for manufactured durable
goods for June are released by the
Census Bureau. Expect new orders to
rise by 0.65% up from May’s 1.3%
drop. Excluding transportation, orders
are seen rising 0.2% against May’s
0.45% increase.
Friday 26
The Bureau of Economic Analysis re-
leases the advance estimate of gross
domestic product for the second quar-
ter. Estimates call for economic growth
to slow to an annual rate of 1.8%, com-
pared with 3.1% for the first quarter.
Colgate-Palmolive,McDonald’s , Phil-
lips66 Twitter and PrincipalFinan
Formore
informationaboutcoming
economicreports–and
whattheymean–goto
Barrons.com’sfree
EconomicCalendar.
Tuesday 23 The U.K.’s Conservative Party is
expected to announce its choice for prime minister
and party leader to replace outgoing Theresa May.
The two contenders: Jeremy Hunt and Boris Johnson.
Big-Budget Sequels and Reboots
Disney’s Magic Formula