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Week in Review

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04/28/2018

For the week 4/23-4/27

[Posted 11:30 PM ET, Friday]

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Edition 994

I can’t help but start out by saying on a personal note this was another hectic week for your editor.  Dad is in rehab after his fall, though doing well, while Mom requires 24-hour attention, meaning I divided spending nights (and then some) at the house with my brother while we assess the long-term situation.  For me, it is just a ton of time off the grid and that’s not good for what I do.  It’s also tiring.  But there is light at the end of the tunnel and I don’t think it’s an oncoming train.

Trump World

Yet another chaotic, historic, week in Trump World, and the next two promise more of the same, as this Tuesday President Trump rules on his 25% tariffs on steel and aluminum and whether they should be levied on the European Union, while a self-imposed May 12 deadline on pulling out of the Iran nuclear accord is looming, and we’re likely to learn where and when Trump and North Korea’s Kim Jong Un are going to hold their summit, on the heels of Friday’s historic meeting between Kim and South Korea’s President Moon.

On this last topic, I do wish our president would temper his enthusiasm, and also stop praising Chinese President Xi Jinping, a dictator who is no friend of America. And I wish Trump would understand that any deal with North Korea is incredibly complicated, as spelled out below.

But at the same time the president deserves credit for his role in advancing talks to this stage.  Talk is good.

I also thought the state visit with Emmanuel Macron was terrific, and President Trump handled it well.  Macron is Europe’s future.  Personally, I like the guy.

Today, German Chancellor Angela Merkel had a meeting with the president. While the two tried to put on a show of warmth and friendship, there are tensions between the allies over trade and NATO.  Merkel, like Macron, pressed Trump on a bilateral trade deal between the EU and the United States, but Trump said he wanted a “reciprocal” trade relationship with Germany and other European nations and wanted Germany and other NATO allies to pay more for their common defense, an issue he has raised repeatedly.  Merkel and Macron it would also seem fruitlessly tried to convince the president to stay in the Iran accord.

But there was so much more going on in Trump World this week.

Trumpets....

--President Trump said he has decided not to interfere with the Justice Department, which is conducting an investigation of his associates’ alleged ties to Russia, but suggested there was a point at which he might.

“I’m very disappointed in my Justice Department. I have decided I won’t be involved,” Trump said in an unhinged interview with Fox News’ “Fox & Friends” Thursday morning.

He then added: “I may change my mind at some point.”

In the interview, Trump also lashed out at what he called corruption in the FBI.

“You look at the corruption at the top of the FBI, it’s a disgrace, and our Justice Department – which I try to stay away from, but at some point, I won’t – our Justice Department should be looking at that kind of stuff,” the president said.

The president called the Russia investigation an “absolute disgrace” and a “cloud over my head.”

“They have this witch-hunt going on with people in the Justice Department that shouldn’t be there,” Trump said.  “They have a witch-hunt against the president of the United States going on.”

Trump’s comments Thursday followed weeks of frustration over the Russia probe and then the FBI’s decision earlier this month to raid properties tied to longtime Trump lawyer Michael Cohen. Earlier this month, Trump contemplated the possible dismissal of Deputy Attorney General Rod Rosenstein, who appointed Special Counsel Robert Mueller.

In the Fox News interview, Trump said of the Cohen investigation: “I’ve been told I’m not involved.” He added: “From what I can tell, he did nothing wrong.”

Asked about the extent of Cohen’s work for him, Trump said Thursday: “He represents me, like with this crazy Stormy Daniels deal. He represented me.” He then added, “There were no campaign funds going into it.”

But previously, the president said he had no knowledge of the payment by Cohen to Stormy (Stephanie Clifford) or where the money came from.  Asked earlier this month on Air Force One why Cohen had made the payment, Trump responded: “You’ll have to ask Michael Cohen.  Michael is my attorney. You’ll have to ask Michael.”

Trump also disputed memos written by former FBI director James Comey that the Justice Department gave to several congressional committees last week. In the memos, among other things, Comey said the president told him on two occasions that he didn’t stay overnight in Russia during a trip there for the 2013 Miss Universe pageant, as part of an effort by Mr. Trump to explain why the salacious allegations contained in an unverified dossier in the FBI’s possession were untrue.

But Mr. Trump’s tweets about the trip, and a Bloomberg News inquiry, including flight records, show Trump arrived in Moscow for the trip on a Friday and departed early on a Sunday.  In a CNN interview Wednesday, asked if it was significant Trump appeared not to tell the truth about his 2013 travel, Comey said: “It’s always significant when someone lies, especially about something you didn’t ask about.”

Trump on Thursday called Comey’s memos “phony” and said of his 2013 trip to Moscow: “Of course I stayed there.  I stayed there a very short period of time. I never said I left immediately.”

On the Stormy Daniels quote from Trump on Thursday, her attorney, Michael Avenatti, said the president made a “hugely damaging admission.”

Rod Rosenstein reportedly told Trump in a recent meeting that he is not a target of the Cohen investigation.

Unloading on Comey, Trump said during the “Fox & Friends” gig, “Look, Comey is a leaker and he is a liar and not only on this stuff, he has been leaking for years.”

Trump also said in the interview that he was persuading French President Emmanuel Macron that Iran and the nuclear agreement it has with the U.S. and other countries are problems.

“He is viewing I believe Iran a lot differently than he did before he walked into the Oval Office,” Trump said.

The president added he is reviewing five potential sites for a meeting with North Korea’s Kim Jong Un.  [Today he said it is down to 2 or 3.]

And he praised Kanye West for saying nice things about him.  “I get along with Kanye. I get along with a lot of people frankly.”

Meanwhile, the day before, Michael Cohen asserted his Fifth Amendment right to remain silent in the lawsuit that Stormy Daniels filed against him.  A federal judge ruled on Thursday that a court-appointed independent official should be the first to examine documents seized by FBI agents from Cohen.

Lawyers for Cohen and Trump wanted to seek to limit prosecutors’ ability to review the documents, citing attorney-client privilege.  Both sides then agreed to an independent “special master” who will review them.

But then today, a U.S. District judge ordered that Stormy Daniels’ lawsuit against Cohen be put on hold for 90 days, saying Cohen’s constitutional rights could be endangered if the lawsuit proceeds while he is under criminal investigation.

Judge James Otero wrote in the order: “The Court finds that there is a large potential factual overlap between the civil and criminal proceedings that would heavily implicate Mr. Cohen’s Fifth Amendment rights.”

--The Washington Post’s David Ignatius had an extensive report on former Trump campaign manager Paul Manafort’s ties to pro-Russia figures.

“An ominous sign for Manafort – and potentially for Trump himself – is the recent revelation of an August 2017 memo from then-Acting Attorney General Rod J. Rosenstein specifically authorizing (Special Counsel) Mueller to investigate allegations that Manafort ‘committed a crime or crimes by colluding with Russian government officials with respect to the Russian government’s efforts to interfere with the 2016 election.’”

As Ignatius writes, one campaign insider, speaking on condition of anonymity in order to describe its internal workings, “told me he doesn’t recall any serious questions being asked about Manafort’s activities in Ukraine or his past links with pro-Russia figures. This lack of vetting is surprising, given that the FBI had investigated Manafort’s Ukraine activities back in 2014, according to a source familiar with the bureau’s investigation who wasn’t authorized to speak publicly about it. Such questions weren’t posed about any Trump advisers. It was ‘plug and play,’ the insider recalled, with ‘no process’ for background checks.”

Separately, the Russian lawyer who met with Trump campaign officials in Trump Tower in June 2016, Natalia Veselnitskaya, who said she would deliver damaging information about Hillary Clinton but has long insisted she is a private attorney, admitted to NBC News’ Richard Engel that she worked for the Kremlin, specifically Yuri Chaika, the prosecutor general.

“I am a lawyer, and I am an informant,” she said.  “Since 2013, I have been actively communicating with the office of the Russian prosecutor general.”

So who was she representing when she with Donald Trump Jr., Jared Kushner, Manafort and others?

A slew of emails detailing some of her work were obtained by a Russian group set up by Mikhail Khodorkovsky, a former tycoon stripped of his oil holdings by Putin.  Now in exile after a lengthy period in prison, Khodorkovsky has emerged as a leading opponent of Vlad the Impaler.

But what does it all mean?  Like many of you, forget the various congressional inquiries and their partisan conclusions.  Only Robert Mueller matters.

Then again, Trump tweeted tonight on release of a House investigation: “House Intelligence Committee rules that there was NO COLLUSION between the Trump Campaign and Russia.  As I have been saying all along, it is all a big Hoax by the Democrats based on payments and lies. There should never have been a Special Counsel appointed. Witch Hunt!”

--Navy Rear Adm. Ronny Jackson said Thursday he was withdrawing from consideration as President Trump’s nominee to be the next secretary of the Department of Veterans Affairs amid a barrage of allegations of prior misconduct.

“Unfortunately, because of how Washington works, these false allegations have become a distraction for this President and the important issue we must be addressing – how we give the best care to our nation’s heroes,” Jackson said in a statement.

Jackson said he expected “tough questions” about his qualifications for the VA, “but I did not expect to have to dignify baseless and anonymous attacks on my character and integrity.”

Trump told Fox News that Jackson’s decision did not surprise him – “I saw where this was going” – and said “it’s a disgrace” the way his nominees have been treated, including “Doc Ronny.”

Well as I said at the time of Jackson’s selection, it was a terrible pick, and we didn’t know of the allegations then, which I won’t comment on because I haven’t seen any facts.  He was just unqualified.

In his statement of withdrawal, Jackson called the allegations against him “completely false and fabricated.”  He added:  “If they had any merit, I would not have been selected, promoted and entrusted to serve in such a sensitive and important role as physician to three presidents over the past 12 years.”  President Obama, for one, had given him glowing performance reviews, according to the White House.

Meanwhile, this most important government agency, the second largest, is rudderless and veterans are suffering.  Robert Wilkie, an undersecretary at the Pentagon, has been acting secretary until a permanent one is confirmed.

--Thursday, CIA Director Mike Pompeo became secretary of state by a 57-42 vote in the Senate, far closer than traditional for a president’s nominee.  I thought some of the debate on his confirmation was absurd.  Pompeo should have sailed through.

But now the count doesn’t matter.   Pompeo hopped on a jet to represent the United States at a NATO summit in Brussels, and is of course the key figure, along with John Bolton, when it comes to the upcoming summit with North Korea, let alone Iran, Syria, Afghanistan…you name it.

--Environmental Protection Agency chief, Scott Pruitt, faced two House subcommittees on Thursday and he fought back against Democratic criticism of his spending and policies, asserting the attacks were driven by opposition to Trump’s agenda.

Pruitt acknowledged the “very troubling reports” on his travel, housing and personnel actions, but said the reports were twisted.  “Let me be clear, I have nothing to hide,” he said.

The White House, inspector general of the EPA, House oversight committee and Government Accountability Office are all looking into Pruitt’s spending, including with the link between his rental housing in Washington and a lobbyist.

President Trump remains supportive.

--Supreme Court justices on Wednesday grilled the government’s lawyer about President Trump’s authority to impose a travel ban, which restricts entry into the United States from several predominantly Muslim nations.

In a case that is a major test of presidential power, several justices questioned Solicitor General Noel J. Francisco about the government’s justification for the ban being national security and questioned him on whether the restrictions were tainted by religious animus.

Justice Elena Kagan offered a hypothetical in which a future president who is a “vehement anti-Semite” and makes denigrating comments about Jews comes into office and bans entry to the United States from Israel.

“The question is what are reasonable observers to think in that context?” Kagan asked.  [New York Times]

A decision is expected by late June, but Court observers believe the Supremes will rule in the president’s favor.  Chief Justice John Roberts and Justice Anthony Kennedy said federal law gives the president, not the courts, the power to weigh threats from immigrants.

“Could the president ban the entry of Syrians” if he had evidence that some Syrians had chemical or biological weapons, Roberts asked a lawyer challenging Trump’s travel ban.  The answer was obviously yes, the chief justice said, answering his own question. [Washington Post]

Along with Justices, Alito, Gorsuch and Thomas, the conservatives appear to have five solid votes to uphold Trump’s order.

--Trump tweets: …these last five in succession, last to first, April 22.

“Funny how all of the Pundits that couldn’t come close to making a deal on North Korea are now all over the place telling me how to make a deal!”

“A complete Witch Hunt!”

“ ‘I can die happy now with Trump Job performance,’ stated Mary Matalin.  ‘A great overall President, stunning!’ Thank you, Mary.”

“…We are a long way from conclusion on North Korea, maybe things will work out, and maybe they won’t – only time will tell….But the work I am doing now should have been done a long time ago!”

“Sleepy Eyes Chuck Todd of Fake News NBC just stated that we have given up so much in our negotiations with North Korea, and they have given up nothing. Wow, we haven’t given up anything & they have agreed to denuclearization (so great for World), site closure, & no more testing!”

State Visit...Emmanuel Macron

Seth Lipsky / New York Post

“So much for the idea that President Trump would be too ignorant and coarse to conduct diplomacy with Europe on a grand scale.  And that he can’t handle differing points of view.

“The state visit of French President Emmanuel Macron makes clear Trump has found a European partner of verve and vigor.  And that he can work with someone who is well to his left.

“This started coming into view for millions of Americans at Tuesday’s banquet….

“The startling thing was the next morning, when Macron delivered a speech to a joint meeting of Congress, in which he laid out his differences with Trump on global warming and Iran.

“Republicans gave him a warm and noisy welcome.  The Democrats, though, were faster to their feet, cheering as Macron needled Trump over the Paris climate accord and the Iran deal.

“No cheese-eating surrender monkey ever got a better reception. And the astonishing thing is that Trump seemed to take it all in stride (he said in advance Macron would do a great job).

“What a contrast to the last time the leader  of a major foreign ally criticized an American president’s program before a joint meeting of Congress. That was Prime Minister Benjamin Netanyahu of Israel.

“Remember? Bibi and Macron both went to the Hill with a similar message – the sitting president was about to mishandle a deal with Iran.  Netanyahu warned against signing Barack Obama’s pact with the mullahs, while Macron wants to save, not kill, the deal, and is pushing ‘improvements’ that run against Trump’s instincts.

“How did the two American presidents react?  Obama went into a first-class tantrum, carrying on about how Congress was wrong to invite Netanyahu in the first place and deriding Bibi personally.

“Obama reduced his Israel relations to a shambles. He went ahead and inked the Iran deal against what The New York Times has described as ‘overwhelming’ opposition in Congress.

“While the Israeli leader focused on only a narrow issue – the Iran deal – Macron issued a broader challenge to his host, starting with a call for a ‘new multilateralism.’ How does one say ‘chutzpah’ in French? Trump just won the presidency in part for his beef with multilateralism.

“That is, with institutions like the United Nations, the European Union, NATO and various free-trade agreements. He’s made it clear he prefers bilateral relations and doesn’t want America fleeced.

“Then Macron carped about Trump’s opposition to the Paris climate accord, a scheme to pick Americans’ pocket.  Trump pulled out of it less than a year ago, citing its costs.

“Yet, Macron told Congress, ‘some people’ – Trumpists, he meant – think that securing jobs is ‘more urgent than transforming our economies.’  He said he wanted to ‘make the planet great again.’

“Macron was particularly obnoxious on Iran.  He wants to expand the deal to cover ‘four pillars’ – the current pact, plus ‘the post-2025 period,’ regional military influence and monitoring ballistic missiles.

“None of Macron’s pillars mentioned democracy in Iran or an end of its war against Israel. He’s prepared to contract with an anti-Semitic, non-democratic, theocracy constitutionally committed to jihad.

“Which brings us back to Trump. He’s in a perfect position to refuse to certify Iran’s compliance when the deadline comes up next month, while saying he’ll look at any improvements Macron can get.

“For that matter, he can do the same with the Climate pact. If Macron thinks he can get a fair deal for America that’s in accord with the ‘science,’ let him try.

“Meantime, Trump has found a partner in the heart of Europe – a leader who started out,  like Trump himself did, as a businessman. And who brushed aside the old guard, right and left, to win his presidency.

“Macron declined to get drawn into complaining about Trump’s fitness.  He welcomed Trump in France and has been markedly more friendly than the other European leaders.

“Including, incidentally, the British, who’ve yet to assure Trump a warm welcome in London.  Then again, France sided with us in the Revolution. Old habits die hard.”

Kevin Bacon / Defense News

“Wow, Macron went there.  One day after President Trump welcomed the French president with a bromatic White House visit filled with hugs and handshakes, Emmanuel Macron stood before a joint session of Congress and fired away at his host’s ‘America First’ foreign policy.  With JFK-like phrasing, Macron called for strong Western leadership in urgent defense of liberal democracy.  It was a direct rebuke to Trumpism and the rise of fear-based nationalism and populism in the U.S. and Europe.  It was passionate, articulate, and rousing.

“And the entire Congress rose again and again to applaud.

“Addressing a Republican-controlled legislature that is grappling with Trumpism, Macron on Wednesday repeatedly called for multilateralism as he offered a defense of the liberal world order. He  warned of the potential fall of international organizations and their stabilizing effects on global security.  He called for allies to craft a new future based more on their common goals and less on their fears.

“If a Democrat had given that same speech, the Republican half of the chamber would have sat quiet on their hands. But the French president has become the darling of Washington, for the time being.  His passages on climate change and the Iran deal drew less unified applause, but the larger  themes rang loud and clear.

“More importantly for current events, Macron informed Congress how France apparently has taken the reins in the effort to find a path to peace in the Middle East.  The French president confirmed in his speech that he had convinced Trump – ‘we had decided together’ is how he put it – to work toward a ‘comprehensive’ new agreement with Iran.  (Macron did not say whether Trump will recertify the  existing deal next month, but he argued against scrapping it without an alternative plan.)  Macron also pitched his four-point plan, first outlined last fall at the United nations, including ‘containment’ of Iran.

“Not so long ago – say, two years – the word ‘containment’ sent conservatives screaming about appeasement.  This week, Washington is absorbing Macron’s proposal, seeing in it a possible path to end the war in Syria  and limit Iran’s regional influence through negotiation in Yemen, Lebanon, Iraq, and Syria.

“Liberals and arms control experts who herald the JCPOA say the ‘grand bargain’ idea is folly.  Maybe.   But understand this: Macron, and not the American president, has put forth a path to peace – and not just for the Syria conflict – by tying it to a larger proposed agreement that would leave the original nuclear deal intact while doing something about Tehran’s meddling abroad and missile development at home.

“In short, the French are now in the lead.  Not America.

“Macron’s speech nodded to all of the things that concern Trumpist and populist voters, from inequitable globalism to terrorist threats.

“Was this by design or default?  The French president was invited to Washington in partial recompense for welcoming the New York real estate mogul onto the stage of world leaders.  Did Trump want Macron to ride out of Washington as the lead architect of a new world order, savior of Syria, negotiator of Middle East peace, fomenter of Iranian reform, and gatherer of power, stardom, and American fans? If so, mission accomplished.”

Among Macron’s memorable statements in his speech to Congress:

Both in the United States and in Europe, we are living in a time of anger and fear, because of these current global threats. But these feelings do not build anything. You can play with fears and angers for a time, but they do not construct anything.  Anger only freezes and weakens us. And as Franklin Delano Roosevelt said during his first inaugural speech, ‘The only thing we have to fear, it is fear itself.’

The entire Congress stood.

We can choose isolationism, withdrawal, and nationalism.  This is an option.  It can be tempting to us as a temporary remedy to our fears,’ Macron continued.  But closing the door to the world will not stop the evolution of the world. It will not douse, but inflame the fears of our citizens.  We have to keep our eyes wide open to the new risks right in front of us. I’m convinced that if we decide to open our eyes wider, we will be stronger, we will overcome the dangers, we will not let the rampaging work of extreme nationalism shake a world full of hopes for greater prosperity.

Kevin Bacon says the following passage was the most important.

It is a critical moment.  If we do not act with urgency as a global  community, I am convinced that the international institutions, including the United Nations and NATO, will no longer be able to exercise a mandate and stabilizing influence.

We will then inevitably and severely undermine the liberal order we built after World War II.  Other powers with the strongest strategy and ambition  will then fill the void we would leave empty.  Other powers will not hesitate once again to advocate their own model to shape the 21st century world order.

Personally, if you ask me, I do not share the fascination for new strong powers, the abandonment of freedom, and the illusion of nationalism.

Therefore, distinguished members of the Congress, let us push them aside, write our own history and birth the future we want.

More on the Iran deal below.

Wall Street

There was a slew of economic news this week, with March existing home sales coming in at an annualized rate of 5.6 million, as reported by the National Association of Realtors, down 1.2% over a year earlier, with the median sales price at $250,400, up 5.8% from March 2017.  March new home sales were better than expected at 694,000.

The S&P CoreLogic Case-Shiller home price index for February was up 6.8% for its 20-city index, year-over-year, better than expected.

March durable goods orders were better-than-expected, up 2.6%, but were unchanged ex-transportation.

Then Friday, we had our initial look at first-quarter GDP and it was 2.3%, after 2.9% in the fourth quarter.  In recent years the first quarter has been the slowest, which bodes well for future growth.  [The Atlanta Fed’s GDPNow indicator for Q1 is still just 2.0%, so we’ll see how the final numbers shake out over the coming months, GDP getting two revisions.]

The GDP report contained inflation data that the Federal Reserve monitors and the personal consumption expenditures index for the quarter rose 2.5%, ex-food and energy, with the March reading on PCE coming out this week.

Separately, the Employment Cost Index, another key barometer, rose 2.7% year-over-year, the strongest since 2008, leading some to believe the Fed will now definitely hike the key funds rate three more times this year, not two.  [The Fed meets May 1-2, but no one expects them to raise at this one. Rates are definitely headed higher at the June 12-13 confab.]

Europe and Asia

European Central Bank chief Mario Draghi said policy makers refrained from discussing the end of asset purchases or even the stronger euro at the Governing Council’s two-day meeting. Instead the focus was on gauging the health of the region’s economy, which is slowing, no doubt.  But Draghi said the euro-area expansion was durable.

“The interesting thing is that we didn’t discuss monetary policy per se. It’s quite clear that since our last meeting, broadly all countries experienced, in a different extent of course, some moderation in growth or some loss of momentum.”

An initial look at first quarter eurozone GDP comes on Wednesday, with economists predicting growth of 0.5% - weaker than the 0.7% (quarter-over-quarter) recorded at the end of 2017, but still solid.

Draghi remains confident that inflation in the euro-area will approach 2%, up from the current 1.3% in March.

The ECB chief also added: “The risks surrounding the euro area growth outlook remain broadly balanced.  However, risks related to global factors, including the threat of increased protectionism, have become more prominent.”

Draghi said it was not yet clear what the concrete effects of “what is so far rhetoric about protectionism” would be, especially when it came to the extent of retaliation.  “What is known is that these events have a profound and rapid effect on business, on exporters’ confidence...and confidence can in turn affect growth.”

In the ECB’s formal statement, it was word for word the same as in March, the governing council reiterating it would keep interest rates at record lows “well past” the end of the quantitative easing program.

It is still expected the ECB will stop buying new bonds later this year before raising interest rates towards the middle of 2019. But this is dependent on the data.

Meanwhile, the U.K. economy grew at its slowest pace since 2012 in the first quarter, according to the Office for National Statistics, just 0.1%, down from 0.4% in the previous quarter, driven by a sharp drop in construction output and a sluggish manufacturing sector.

The British economy overall, though, has grown every year since 2010 and unemployment is at a 40-year low, as the prime minister’s office reminded everyone.

In the eurozone (EA19), the April flash readings came out and the manufacturing PMI was 56.0 (50 being the dividing line between growth and contraction), a 14-month low, but still strong, with services at 55.0.

Germany had a flash April reading on manufacturing of 58.1, services 54.1.

France was 53.4 (mfg.) and 57.4 (services).

Chris Williamson, chief economist, IHS Markit:

“The eurozone economy remained stuck in a lower gear in April, with business activity expanding at a rate unchanged on March, which had in turn been the slowest since the start of 2017.  Growth has downshifted markedly since the peak at the start of the year, but importantly still remains robust....

“However, it’s also clear that underlying demand has weakened, in part due to exports being hit by the stronger euro. With companies’ future optimism having slipped to the lowest since last year, it looks likely that growth may well slow further in coming months.”

Separately, Eurostat reported the latest government debt figures for Q4 2017.  The EA19 was at 86.7% debt to GDP, vs. 89.0% Q4 2016.  Greece still leads the way at 178.6%, followed by Italy 131.8% and Portugal 125.7%.  Spain is at 98.3%, France 97.0%, Germany 64.1% and the U.K. 87.7%.

Eurobits...

Italy: President Sergio Mattarella, a figurehead except in times like these, kicked off a fourth round of consultations among Italy’s political parties in another attempt to form a new government, two months after national elections.  Should the current round fail, Mattarella could select a neutral figure to lead a broad-based coalition that would have a limited mandate and duration.  New elections are a distinct possibility.

Mattarella asked a senior parliamentary figure, Roberto Fico, the speaker of the lower house, to hold talks with party chiefs of the anti-establishment 5 Star Movement and the incumbent Democratic Party (PD) to see if they can form a government, with the center-left PD saying it needed until next week to make a decision.

The PD had previously said it wanted to move into the opposition after suffering a big defeat in the March polls.

Turning to Asia...nothing of import this week.

Street Byes

--Stocks ended the week mixed after an incredibly busy week of earnings, as detailed below. The FANG stocks (Facebook, Amazon, Netflix and Google) have all reported outrageous profit numbers, but the fifth member of the group, if you stretch it to FAANG, Apple, reports next week.

The Dow Jones lost 0.6% this week to 24311, while the S&P 500 lost a single point, -0.01%, and Nasdaq fell 0.4%. The industrial sector of the market fell 3.2% over the week as investors took a dim view of their results.

--U.S. Treasury Yields

6-mo. 2.00%  2-yr. 2.48%  10-yr. 2.96%  30-yr. 3.12%

Bonds finished the week virtually unchanged, though the yield on the 10-year crossed 3.00% (highest since Jan. 2014), spooking the markets, but fell back today.

--Chevron, Exxon Mobil and Royal Dutch Shell posted their best first-quarter profits in years, taking advantage of higher oil prices, but despite a 50% price surge since last year, drilling budgets at the largest oil-and-gas companies are up only 7%, according to consultancy Wood Mackenzie and the Wall Street Journal.

Investors don’t want to see a return to the years when the giants spend heavily, often on projects that generated meager returns.

But smaller producers have been far more aggressive, seeing the current period as a time to gain market share.  Shares in the big companies continue to lag the rise in the price of crude, which closed today at $67.97.

Exxon announced a profit of $4.65 billion, up 16% in the quarter vs. a year ago, while Chevron’s profits were $3.6 billion, up 36% year-over-year.

--CNBC’s Jim Cramer called Amazon’s first-quarter results, “the best quarter ever.”  All companies. 

Amazon reported its best revenue growth in more than six years, while topping $1 billion in profit for the second straight quarter, surprising the Street on both fronts.  Amazon more than doubled its net profit to $1.6 billion – just under its record of $1.9 billion from the holiday quarter – with revenue surging 43%.

The revenue growth was Amazon’s best mark since the third quarter of 2011, pushing its total to about $51 billion. The company continues to record better-than-expected results from its cloud-services division and strong growth in the company’s advertising business.

Online sales are growing faster than overall retail, and Amazon currently commands roughly 43 cents of every dollar spent online, according to research firm eMarketer.  The base of Prime members now exceeds 100 million globally.

Amazon Web Services, the company’s cloud-services division, experienced big growth, with revenue rising 49% to $5.44 billion, while operating income increased 57% to $1.4 billion

Dan Gallagher / Wall Street Journal

“Investors have come to expect big things from Amazon.com. Profits haven’t always been among them.

“That is quickly changing, as shown Thursday with solid first-quarter results.  Operating income surged 93% year over year to $1.9 billion. That was more than double the company’s growth in sales, which jumped 43% to $51 billion. Amazon is steadily making more of its money from businesses that are more profitable than shipping boxes of goods to consumers.

“Chief among those is its AWS cloud unit, which generated $5.4 billion in revenue during the quarter. That was up 49% year over year.  More notably, operating profits at AWS surged by 57% to $1.4 billion.

AWS now comprises about 11% of Amazon’s total revenue, but it makes 22% more in profits than Amazon’s North American retail arm, which generates nearly six times the revenue. It also doesn’t hurt that Amazon now owns a high-margin grocer in Whole Foods.  Operating profit for the company’s North American retail unit nearly doubled to $1.1 billion....

“(Yet) it is worth remembering that Amazon’s growth never comes cheap. Capital spending, which includes its outlay for equipment acquired under capital leases, jumped 33% year over year to nearly $5.4 billion.”

But then you have the Washington risk in the form of increased scrutiny over the company’s success and market dominance. And what will the reaction be to Amazon’s plan to boost the Prime membership fee $20 to $119?

--Facebook Inc. continued to add users and saw revenue soar in the first quarter, despite the Cambridge Analytica scandal and FB’s worst crisis in company history over the mishandling of personal data.

The company reported a 50% increase in revenue from the same period a year ago, to $11.97 billion.  Analysts had expected a 40% increase to $11.4 billion.

Earnings per share of $1.69 blew away estimates of $1.35.  Monthly active users totaled 2.2 billion and daily active users 1.45 billion, both meeting the Street’s expectations of a 13% increase from a year ago. The shares rallied in response.

CEO Mark Zuckerberg said: “Despite facing important challenges, our community and business are off to a strong start in 2018.  We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.”

Oh brother.

Despite the bad press, few have left the site and the 1.45 billion daily active users for the first three months of this year, compared with 1.4 billion the previous quarter.  Analysts also expect  monthly active users to rise to 2.19 billion, up from 2.13 billion in the fourth quarter.

--Google parent Alphabet Inc. posted surging profits as advertisers continued to flock to the search giant, despite the global debate about internet privacy.

Net profit jumped 73% to $9.4 billion in the first quarter, up from $5.4 billion in the same period last year.

Advertising revenue soared 24% to $26.6 billion.

But Google’s dominant role in search is bringing tougher scrutiny, with the European Union adopting a sweeping set of rules called the General Data Protection Regulation that goes into effect May 25, and it could affect Alphabet’s revenue.

Google is expected to control 31% of the global ad market this year, down from 31.7%, according to eMarketer.

Alphabet doesn’t break down results for a huge driver of revenue, YouTube, and investors have called for more transparency, with analysts estimating it will generate from $11 billion to $20 billion this year, representing between 10% and 18% of Alphabet’s overall revenue.

--Twitter Inc. beat analysts’ estimates for earnings in the first quarter and showed signs that it’s finally overcoming a slump, but the positives were tempered by an outlook for slower growth this year.

The social media company’s push into live video and more personalized content appears to be starting to pay off, boosting revenue and profit in the first quarter by luring users and advertisers.  Sales jumped 21 percent, the most in two years, to $664.9 million.  Twitter said monthly active users rose to 336 million, up by 6 million from the prior period.

The shares, however, were whipsawed, rising 14 percent in early trading, before selling off after comments on the analyst call regarding growth.

Twitter has been struggling for years to compete for ad dollars with the likes of Facebook and Google’s YouTube.  And monthly user growth was up only 2.8 percent from a year ago, the slowest pace in two years.  Facebook has six times more users than Twitter and far stronger growth.

Twitter’s monthly active users in the U.S. increased by 1 million from the fourth quarter to 69 million, while internationally, MAUs grew to 267 million from 262 million.

--Microsoft continued its winning streak in what was its fiscal third quarter, as its Azure cloud business jumped 93% for the three months; the business never growing slower than 90% since the company began breaking it out in its financials in October 2015. The other big piece of its cloud operations, the commercial version of its Office 365 online-productivity service, grew 42%.

The two businesses combined for $6 billion in revenue, up 58%. The company has been looking to become Amazon’s chief rival in renting out computing power and storage and in the first three months of 2018, Amazon held a 31.7% share of the cloud infrastructure market, while Microsoft was at 16% and Google 7.4%, according to research firm Canalys.

Overall, Microsoft posted a profit of $7.42 billion, with revenue up 16% to $26.82 billion, both exceeding expectations. The company’s shares are trading near an all-time high hit last month.

Microsoft did say it had $3.5 billion in capital expenses, much of that money going toward its data-center expansion.

--Intel Corp.’s quarterly profit surged as the chip giant showed no impact over revelations earlier this year of critical security flaws in its processors.  Profit in the first quarter grew by 50% from a year earlier to $4.45 billion.  Revenue rose 9% to $16.07 billion.

Revenue from the division that sells chips for PCs, which generally makes up more than half of revenue, rose by 3%, despite declining PC shipments in the quarter, according to Gartner.

According to Mercury Research, Intel still holds 95% market share in chips for PCs and servers, which is why the chip flaws announced last January had so many on edge, though Intel has said it would fix the vulnerabilities in new chips due this year, and in the meantime it issued updates.

Rival Advanced Micro Devices reported Wednesday that revenue in its division that sells PC chips ballooned 95% in the first three months of 2018. AMD turned a profit of $81 million, vs. a $33 million loss a year ago.

But AMD’s architect for its latest chips is joining Intel as head of hardware engineering.

--Boeing Co. reported results that beat expectations for the first quarter, with profit rising to $2.48 billion in the quarter from $1.58 billion a year earlier, with per-share earnings up to $4.15 from $2.54; ex-charges, $3.64 vs. $2.58.

Boeing’s order book has swelled to more than 5,800 jets worth $415 billion. Boeing also boosted its guidance for full-year profit.

And the company announced it aimed to have a new facility in China ready to complete some of its 737 jets by the end of this year, a sign Boeing is taking trade tensions in stride.

Boeing CEO Dennis Muilenburg said the company needs the facility (a finishing center being built near Shanghai) in order to compete with rival Airbus, which already builds jets in China.

China accounts for a fifth of Boeing’s jetliner deliveries.

--General Motors Co. first-quarter net income fell 60% amid hefty restructuring costs in South Korea and in the U.S. from planned factory downtime (to prepare for the autumn launch of redesigned pickup trucks), though the automaker still handily beat the Street’s expectations.

Revenue from continuing operations declined 3% to $36.1 billion, still much higher than forecast.

GM got a lift in China – its No. 2 profit generator and top market by sales volume – with record income of $597 million from GM’s joint ventures in the region, up 18% from a year earlier. GM’s China sales rose 8% in the quarter on strong demand for Chevy SUVs and the Cadillac brand.

--Ford announced it was eliminating all of its car models in North America as it reinvents itself as a utility vehicle-focused brand in an effort to improve operating efficiency and profit margin.

The Taurus, Fusion, Fiesta and C-Max will be discontinued, leaving only the Mustang and a new crossover-style compact called the Focus Active in showrooms alongside a growing lineup of SUVs.

Earlier, Ford announced plans to have eight SUVs on sale by 2020, including a new Bronco and an all-electric performance model codename Mach 1.

Ford didn’t reveal the fate of the sedans in its Lincoln lineup, but said the luxury division as a whole is not in jeopardy.

The announcement on the lineup changes came as Ford said it earned a first-quarter profit of $1.7 billion, a 9% increase compared to the same period last year, beating Wall Street expectations.

Ford’s revenue worldwide increased 7% to $42 billion for the quarter.

--Fiat Chrysler Automobiles NV said earnings rose 60% in the first quarter on strong sales of its most profitable vehicles. Fourth-quarter net profit came to $1.24 billion, even as revenue fell 2% to $35 billion.  Like the others, sales were strong for the higher-margin SUVs and new Ram 1500 pickup truck.

--Caterpillar Inc. reported sales for the quarter rose 31% thanks to strong global construction and mining activity.  But on a call with analysts, top executives said the quarter could prove to be a “high-water mark” for the year.  After initially rallying strongly on the earnings news, CAT shares fell 6% on the day.

Shares in 3M also fell more than 6% after the maker of myriad products narrowed its revenue and profit forecast for this year.

Executives at both 3M and Caterpillar said their steel costs have risen since the Trump administration moved to place duties on imports from some foreign countries.

CAT warned trade tensions could darken the outlook for the year.

The general tone off these two reports is that this might be as good as it gets, though CAT boosted its guidance.

--Southern California’s median home price jumped 8.4% in March from a year earlier, setting a new all-time high, as hopeful buyers engaged in bidding wars over a limited supply of homes on the market.

The six-county median price for new and resale houses and condos hit $519,000 last month, up $40,000 from a year earlier, according to CoreLogic.  March’s median topped the previous all-time high of $509,500 set in December.

Sales, though, fell 6.2% compared with a year ago.

The median price in Orange County rose 8.7% to a record of $725,000.

--Southwest Airlines said bookings have dropped since last week’s fatal accident on the largest domestic U.S. airline.  The carrier froze all advertising in the wake of the incident on a flight from New York to Dallas and announced it would lose up to $100 million in revenue into May as a result.

Investigators are continuing their probe into the accident that involved a blown engine, with Southwest saying it has checked 8,500 engine fan blades over the past 10 days, with 16,500 still to go as of this week.

--The Justice Department is investigating whether Huawei Technologies Co. violated U.S. sanctions related to Iran, opening a new avenue of scrutiny into the Chinese cellular-electronics giant on national security grounds.

The latest probe raises the stakes for Huawei, which is already facing a series of actions by the U.S. that have severely limited its business here, and could have a spillover effect in Europe, where Huawei has a much larger footprint.

As I’ve noted in the past, Huawei is also being targeted as a threat to American leadership in the race to develop the future of mobile communication. There have long been fears the Chinese government would use Huawei for cyber-subterfuge.

But in the situation with Iran, if the U.S. concludes the company violated U.S. export laws, the company could face criminal penalties.

Separately, the U.S. ban that bars Chinese telecommunications equipment maker ZTE from using American products and services is a wakeup call for China’s tech ambitions.  The prospect that ZTE could lose its license to use Google’s Android operating system for smartphones has also raised the question: does China need its own smartphone OS as a backup?

This is a question posed in the South China Morning Post today.  Consider that Apple’s proprietary iOS and Android account for 99.9 percent of the global smartphone operating systems, according to Gartner.

Which means that Huawei could be the next to try to crack the duopoly. The company has been developing and perfecting its own smartphone OS, and it has its own OS for tablets and personal computers.  This has long been in the works, but now clearly development needs to be speeded up.  Huawei, according to sources, hasn’t released its OS yet because it isn’t as good as Android.

Well, you can imagine the intellectual property theft taking place in this realm.

--Shares in Chipotle Mexican Grill soared after the company reported net income for the first quarter that was well above consensus, and up 33% from a year earlier.  Investors love the company’s first new CEO in its 25-year history, Brian Nicol, for his infectious enthusiasm.

Revenue increased 7.4% year-over-year, with comp sales up 2.2%, also better than expected. Chipotle expects to add 130 to 150 new restaurants as it seeks to put its past issues behind it.

Nicol said he is “tremendously excited about the fundamentals that we are maniacally focused on.”

--Subway Restaurants is planning to shutter an estimated 500 locations in the U.S.  This comes after Subway shut down 800-plus locations last year.  2016 also saw store closings.  The chain currently has close to 26,000 locations in the U.S.

At the same time, Subway expects to open 1,000 restaurants around the globe, including in Mexico, the U.K., Germany, South Korea, India and China.

With over 44,000 locations in 112 countries, Subway is the largest restaurant chain in the world, according to the company.

It’s a simple story. Subway is getting killed by competition from the likes of Panera to now McDonald’s and its Signature Crafted Sandwiches, as well as Starbucks, which is going after the lunchtime business.

--NBC is under the gun again, as former correspondent Linda Vester told Variety in an interview published Thursday that legendary news anchor Tom Brokaw sexually harassed her on separate occasions while she worked there.

Vester told Variety she was going public because she was unhappy with how the network was handling sex-harassment allegations against former “Today” host Matt Lauer.

Vester claims Brokaw tried to kiss her in her hotel room in 1993, then again at a London restaurant the next year.

Brokaw, who has been married since 1962, denied any misconduct. 

And then NBC News has the Megyn Kelly problem. As the Wall Street Journal’s Joe Flint reported, needless to say, the three-year, $69 million bet to woo Ms. Kelly from Fox News “is backfiring.”  Ratings have declined and production costs are up after Kelly took over the 9 a.m. hour of “Today.”

And Flint notes:

“With the audiences for morning and evening news shows on a slow decline for decades, the focus of most network news managers is on profit margins and reducing the high salaries of the former era.

“When Diane Sawyer stepped down from anchoring ABC’s ‘World News Tonight’ in 2014, relative unknown David Muir was given the job and ratings actually went up.  After Katie Couric gave up anchoring ‘CBS Evening News,’ she was replaced by the less-known Scott Pelley, who has subsequently been replaced by the even lesser-known Jeff Glor without a hit to ratings. Those anchors commanded significantly lower salaries than Ms. Sawyer and Ms. Couric.”

Since joining “Today,” Kelly’s audience is 18% below what the hour was pulling in last season, according to Nielsen data.  And they have continued to fall the past two months.

Among adults aged 25 to 54, the key demographic, ratings are down 28% since last season.

The “Today” franchise is key to NBC News and its parent NBCUniversal, a unit of Comcast Corp.  “Today” generates more than $500 million in revenue and profits of more than $100 million annually, as reported by Joe Flint. And Kelly’s $23 million-a-year salary compares with the combined salaries of previous hosts Al Roker and Tamron Hall, less than half that.

Foreign Affairs

North Korea: The leaders of North and South Korea have agreed to work to rid the peninsula of nuclear weapons after holding an historic summit. The North’s Kim Jong Un and South Korea’s Moon Jae-in also agreed to push towards turning the armistice that ended the Korean War in 1953 into a peace treaty this year.  The developments come just months after warlike rhetoric from North Korea.

Before we get too excited, however, understand there were zero details on how denuclearization would be achieved, Kim and Moon, let alone President Trump, having different ideas on what ‘denuclearization’ really is.  Many longtime Korea watchers remain highly skeptical about the North’s apparent enthusiasm for engagement.

A paramount issue for Pyongyang is the security guarantee extended by the U.S. to South Korea and Japan and the presence of U.S. troops in both countries.

And it’s important to remember that previous inter-Korean agreements have included similar pledges, but were then abandoned by the North. South Korea also has a very liberal leader in Moon, currently, so the atmosphere and cordiality can change if South Korea wanted to go in a different direction down the road politically.

For now, following the summit, Kim said the two leaders had agreed to work to prevent a repeat of the region’s “unfortunate history” in which progress had “fizzled out.”

“There may be backlash, hardship and frustration,” he said, adding: “A victory cannot be achieved without pain.”

The two leaders agreed to other points in a joint statement, including a push for four-way talks involving the U.S. and China (Japan will want to be part of that), an arms reduction in the region pending the easing of military tension, changing the demilitarized zone into a “peace zone” by ceasing propaganda broadcasts, and further joint participation in sporting events.

But the key thus far, the commitment to denuclearize, does not explicitly refer to North Korea halting its nuclear activities, but rather the aim of ‘a nuclear-free Korean peninsula.’  And whatever denuclearization really means, no doubt Pyongyang will want it to be phased, which is not what President Trump would accept.

President Moon agreed to travel to Pyongyang in the fall for a summit meeting.

“We will work towards preventing another horrible war,” Kim said after signing the joint declaration.  “With one language, one culture and one history, North and South Korea will be joined as one nation.”

China praised the political determination and courage of both leaders.

President Trump issued a series of tweets: “After a furious year of missile launches and Nuclear testing, a historic meeting between North and South Korea is now taking place. Good things are happening, but only time will tell!”

“KOREAN WAR TO END! The United States, and all of its GREAT people, should be very proud of what is now taking place in Korea!”

“Please do not forget the great help that my good friend, President Xi of China, has given to the United States, particularly at the Border of North Korea.  Without him it would have been a much longer, tougher, process!”

[This last one makes we sick.]

Prior to the summit, last Saturday, North Korea said it was suspending nuclear and missile tests and scrapping its nuclear test site, and instead pursuing economic growth and peace.

Trump tweeted: “We are a long way from conclusion on North Korea, maybe things will work out, and maybe they won’t – only time will tell.”

Trump interpreted the North’s statement as a pledge to denuclearize: “Wow, we haven’t given up anything & they have agreed to denuclearization (so great for world), site closure, & no more testing!”

However, Kim Jong Un’s announcement did not include a commitment to scrap existing nuclear weapons and missiles, and there are of course doubts he would ever give up the nuclear arsenal his country has been developing for decades.

Plus Kim said North Korea no longer needed to test nuclear bombs or intercontinental ballistic missiles now that his country has the weapons.  In an address delivered by North Korea’s state-run news agency, Kim said halting nuclear testing “is an important process for the world-wide disarmament” and pledged that North Korea wouldn’t share its nuclear know-how with other countries “under any circumstances,” though he also added that exceptions could be made in the event of nuclear threats or provocations against the country. He also said North Korea wouldn’t use its nuclear weapons unless provoked.

Kim celebrated the completion of its nuclear-missile program, calling it a “miraculous victory” that had been “perfectly accomplished...in a short span of less than five years.”

“No nuclear test and intermediate-range and inter-continental ballistic rocket test-fire are necessary...given that the work for mounting nuclear warheads on ballistic rockets was finished,” Kim was quoted as saying.

Ankit Panda and Adam Mount / Defense News

“In truth, Kim’s announcement represents an opening bid that would allow him to keep his nuclear and missile forces intact. Despite his claims, North Korea has not, by most military and technical standards, created an advanced, survivable, reliable arsenal. Suspending testing would effectively prevent the deployment of new, more efficient, or more compact warhead designs.

“But Kim’s proposed cap is only partial. He has said nothing about North Korea’s production of fissile material, which continues today at a frightening pace: The U.S. Defense Intelligence Agency has found that North Korea may be producing enough material for 12 nuclear weapons each year. In his speech, Kim made no mention of submarine-launched missiles, or of short- or medium-range missiles fired from land, which could threaten U.S. allies in the region.  Furthermore, North Korea may circumvent its own limits simply by re-classifying long-range missile tests as space launches, a trick it pulled to scuttle the most recent agreement back in 2012. There are signs of ongoing work on a satellite launcher based on its most advanced ICBM, the Hwasong-15. In short, even if North Korea adheres to the commitments it just set out, it could still produce and test more warheads and missiles.

“Furthermore, North Korea may not adhere to these commitments – it’s easy to break a self-enforced, unverified moratorium as soon as that moratorium becomes inconvenient.  Pyongyang could reverse any of its commitments at a moment’s notice, just as it did in 2006 when it broke a 1999 moratorium on missile launches.

“The key for Trump in his upcoming meeting with Kim, then, will be to convert these commitments from a partial cap to a hard cap.  To do so, American negotiators will have to codify, clarify, and verify Kim’s proposed limits during the summit. This means imposing limits on all missile tests, including satellite-launch vehicles and fixed-engine tests.  Putting a hard cap on the program would make Americans safer if negotiations on a comprehensive agreement drag on into the summer and fall....

“(Pyongyang’s commitments are) hardly worth the paper it is printed on, as North Korea has previously proved willing to export reactor designs and expertise to Syria.  Pyongyang would have to surrender sensitive information about the location and purpose of its nuclear facilities so that U.S. intelligence agencies or international inspectors could narrow their search rather than inspect every piece of cargo that crossed North Korea’s borders. If the United States and North Korea could agree to such limits, this would represent a major accomplishment.”

Finally, about that nuclear test site that Kim said he is closing, two separate groups of Chinese scientists have concluded the site collapsed, putting China and other nearby nations at unprecedented risk of radioactive exposure.

After five nuclear blasts (the last five of Pyongyang’s six overall), Mount Mantap essentially collapsed, with researchers finding the mountain had been turned into fragile fragments, as reported by the South China Morning Post.

“Radioactive dust could escape through holes or cracks in the damaged mountain, the scientists said.”

The findings are to be published on the website of the peer-reviewed journal, Geophysical Research Letters, likely next month.

The mountain’s surface had shown no visible damage after four underground nuclear tests before 2017, but the 100-kiloton bomb that went off on September 3 “vaporized surrounding rocks with unprecedented heat and opened a space that was up to 200 meters (656 feet) in diameter.”

A large section of the mountain’s ridge slipped down into the empty pocket created by the blast.  Scientists reached these conclusions after analyzing data from nearly 2,000 seismic stations.

Japan, like the U.S., has vowed to keep up the pressure on Pyongyang.  “Just because North Korea is responding to dialogue, there should be no reward,” Japanese Prime Minister Shinzo Abe said the other day when he was with President Trump.

Iran: Despite his hard sell, French President Macron said he may have failed in his efforts to persuade President Trump to stick to the Iran accord.

“My view is...that he will get rid of this deal on his own, for domestic reasons,” Macron said at the end of his three-day state visit.

Trump has until May 12 to decide, saying again this week the deal was “insane.”

Tuesday, Trump said there would be big problems if Iran resumed its nuclear program, saying a “bigger” deal was possible but it must be built on “solid” foundations.

“They should have made a deal that covered Yemen, that covered Syria, that covered other parts of the Middle East,” he said.

Trump has long complained that the deal signed by the P5+1 (U.S., Russia, China, France, the U.K. and Germany), and Iran, does nothing to halt Iran’s support for militant groups in the region.

And Trump is demanding the signatories to the pact agree to permanently restrict uranium enrichment, which under the current deal can resume in 2025.

This week, Iranian President Hassan Rouhani said the U.S. and France have no “right” to renegotiate a seven-party agreement, and that Iran would take “important steps regarding our nuclear technology,” though he added the measures would be “peaceful.”

Supreme Leader Ayatollah Ali Khamenei called on Muslim nations to unite against the U.S.

Trump said: “If Iran threatens us in any way, they will pay a price like few countries have ever paid.”

Editorial / Wall Street Journal

“Emmanuel Macron’s state visit to Washington this week was notable for its warm atmospherics, but its significance could be far more substantial. The French President said he’s willing to accept a revised Iran nuclear deal that includes at least some of President Trump’s demands.

“ ‘We want sustainable stability and I believe that the discussions we’ve had together make it possible to open the way, to pave the way, for a new agreement,’ Mr. Macron said Tuesday, surprising many in Europe. The Trump-centric U.S. media gave more attention to Mr. Macron’s remarks a day later that he thinks Mr. Trump still wants to withdraw from the deal by May 12, but that isn’t news.  Progress toward a joint Europe-U.S. revision is.

“Specifically, the French leader appears to be on board with fixing at least two of three giant loopholes in the John Kerry-Barack Obama deal: strengthening inspections at any suspect sites inside Iran, and adding a provision on Iran’s ballistic missiles.  He also seems to have embraced the larger Trump strategy to contain Iran, which includes confronting its record of cyberattacks, human-rights abuses, support for terrorism and military adventurism.

“This is a major advance, and it offers hope that the U.S. and France, Britain and Germany can agree on a revised pact. Contrary to common misunderstanding, Iran, Russia and China wouldn’t have to agree to these changes. The Joint Comprehensive Plan of Action, as the deal is known, isn’t a treaty. Mr. Obama never submitted it for Senate approval because he knew it would be defeated. The deal is essentially a set of assurances agreed to at the United Nations that lack the force of law.

“The U.S. and the French are still negotiating over the range of missiles that would be banned. But we’re told the biggest remaining U.S. disagreement with Mr. Macron is the deal’s sunset provision. To get a deal before leaving office, Mr. Obama agreed to let the pact begin to expire in 2025.

“This is an invitation to Iran to bide its time and restart its nuclear program from a stronger economic position in a mere seven years.  Mr. Trump is right to want to make the deal permanent, and Mr. Macron told Congress Wednesday that ‘Iran shall never possess any nuclear weapons. Not now. Not in five years. Not in 10 years. Never.’  Never is later than 2025.

“The Europeans fear this would cause Iran to renounce the deal and break out to build a bomb. But while the mullahs will protest, Iran has incentives to remain in a revised deal.  The terms are simply too good for Iran even with revisions, and Iran can’t afford the renewal of sanctions if it wants faster growth to create jobs for its restive youth.  Iran needs foreign trade and investment.

“On the sunset provision, Iran could decide to ignore a U.S.-Europe rewrite and wait until 2025 to test the world’s resolve to enforce it.  This is all the more reason not to let this single issue block U.S. and European agreement now.

“The benefits would be considerable.  A revised deal would show Western unity against Russian revanchism and Iranian imperialism. It would show Iran that the Obama-Kerry appeasement was the exception, not a Western consensus.  On the eve of a Trump-Kim Jong Un summit, a Europe-U.S. rewrite would also reinforce Mr. Trump’s demand that North Korea must dismantle its nuclear program to have normal relations with the world....

“Europe has to decide if it wants to unite with the U.S. to make the Iran deal better for world security, or stick with the Obama terms and risk a showdown over U.S. sanctions on Iran and Europe.”

China: Beijing confirmed on Thursday that it had put into service a new missile that Chinese media has dubbed the “Guam killer” for its ability to hit the U.S. Pacific Ocean base with a conventional or nuclear weapon.

China is in the midst of an ambitious modernization of its armed forces, developing stealth fighters, aircraft carriers and advanced missiles as it strives to become a world class military by the middle of the century.

That, along with Beijing’s aggressive stance in the disputed South China Sea and Taiwan, concerns the entire region and Washington.

A Defense Ministry spokesman said the military had begun deploying the DF-26 intermediate range ballistic missile, and while giving few details, said it can attack targets on land or at sea with precision.

As I’ve been noting, China also continues to harass and threaten Taiwan with its air force, circling Taiwan numerous times since April 18 “to improve its ability to safeguard national sovereignty and territorial integrity.”

On a different topic, state news agency Xinhua reported last weekend that China just strengthened its grip on the internet to ensure broader social and economic goals are met, underlining a hardening attitude towards online content.

Xinhua cited President Xi Jinping as saying: “Without web security there’s no national security, there’s no economic and social stability, and it’s difficult to ensure the interests of the broader masses.

“We cannot let the internet become a platform for disseminating harmful information and stirring up trouble with rumors.”

Syria: Presidents Trump and Macron discussed Syria, with Trump reiterating: “We want to come home. We’ll be coming home.  But we want to leave a strong and lasting footprint.”

For now, Macron helped convince Trump to keep U.S. forces in Syria until their mission was “accomplished.”

As for the Douma chemical weapons site, it took 11 days but inspectors did collect some samples as they try to determine whether such weapons were used there on April 7.  No doubt the site had already been sanitized.

Israel: The death toll in weeks of protests on the border between the Gaza Strip and Israel since March 30 is now at least 43, after three more Palestinians were killed when a large group tried to storm the border. The protests have been staged every Friday.

Afghanistan: ISIS claimed responsibility for an attack in Kabul where officials were issuing identity cards as part of the registration process for upcoming (long-delayed) parliamentary elections, with a suicide bomber on foot killing at least 57 people.  The explosion destroyed cars and shattered windows in nearby buildings, part of the deadliest blast in the capital since about 100 people were killed in January by a bomb concealed in an ambulance, and it came after repeated warnings militants could try to disrupt the election process.

This latest attack is a further blow to the credibility of President Ashraf Ghani’s government for once again failing to keep his people safe.

Russia: A senior government official said on Wednesday that there would be no economic growth in Russia without investment generated by preparations for the 2018 FIFA World Cup.  Deputy Prime Minister Arkady Dvorkovich said the work had contributed $14 billion, or around 1 percent, to Russian GDP in the last five years.

Russia’s economy returned to growth of 1.5 percent last year after a two-year downturn brought on by Western sanctions and a collapse in global oil prices.

Russian authorities have been shaming hotels caught jacking up room prices ahead of the World Cup, which runs from June 14 to July 15, with some increasing nightly rates by as much as 5,000 percent.

Random Musings

--Presidential tracking polls....

Gallup: 38% approval for President Trump, 57% disapproval [Apr. 22]
Rasmussen: 47% approve, 52% disapprove

--In  a new Quinnipiac University National Poll, April 25, President Trump received a 39% approval rating, 54% disapproval, compared to a 41-52 split in an April 10 survey.

Voters do approve of Trump’s handling of North Korea by a 52-42 margin, and support 61-30 the military action taken against Syria.

American voters disapprove 69-22 percent of the job Republicans are doing in Congress, and disapprove 66-26 percent of the job Democrats are doing.

In the generic House ballot, Democrats prevail 48-40, 8 points, including 48-36 among independent voters.

Among national leaders, voters disapprove of the job House Speaker Paul Ryan is doing by a 58-33 margin.

--In my state of New Jersey, Democrats have a 19 point advantage over Republicans in the generic House ballot among registered voters, which if it holds could lead to a switch in control of the five congressional seats currently held by Republicans here, including my own congressman, Leonard Lance.  The Monmouth University Poll finds that poor public opinion of Donald Trump leads the list of factors behind the New Jersey GOP’s underlying problems.  The recently enacted federal tax reform plan doesn’t help since it hurts many New Jerseyans.

The House generic vote in New Jersey is significantly wider than the generic House vote edge of 9 points for the most recent Monmouth University national poll, 50% Democrats, 41% Republicans.

Democrats won the House vote in New Jersey in 2016 by 8 points, 53% to 45%, so you can see how the polling at this stage is definitely cause for concern for the elephants.

--Editorial / Washington Post

“Press freedom is a sentinel in a democracy, not only in the watchdog and accountability role but also as an indicator of whether the democracy is healthy. The significance of this year’s World Press Freedom Index, compiled by Reporters Without Borders, is not only that journalists face increasing obstacles but also that democracy in many places is ill.

“ ‘More and more democratically-elected leaders no longer see the media as part of democracy’s essential underpinnings, but as an adversary to which they openly display their aversion,’ say the authors of the survey, which has been published annually since 2002, measuring media freedom in 180 countries. The United States under President Trump fell two notches in the rankings, to 45th overall, in part because of Mr. Trump’s attacks on journalists, including calling them ‘the enemy of the American people,’ and his routine use of ‘fake news’ to respond to critical reporting.

“Separately, Freedom House issued a report, drawing from its previous research, that also sounded an alarm.  ‘As recently as five years ago,’ the report said, ‘global pressure on the media did not appear to affect the United States or the established democracies of Europe in any significant way. Today, populist leaders constitute a major threat to free expression in these open societies.’

“The surveys expose disturbing trends.  ‘The line separating verbal violence from physical violence is dissolving,’ the authors of the Reporters Without Borders survey noted, pointing, for example, to the threat from Philippine President Rodrigo Duterte that reporters ‘are not exempted from assassination.’  The report lays blame on many political leaders who have directed diatribes at journalists, such as President Milos Zeman of the Czech Republic who turned up at a news conference with a fake Kalashnikov rifle inscribed with the words ‘for journalists.’  The index includes a black category dubbed ‘very bad,’ with North Korea at the bottom. There have never been so many countries in the black category, the group said....Among others, the report said press freedom in Russia, ranking 148, and Turkey, at 157, has sunk to levels not seen in more than three decades. Turkey is ‘the world’s biggest prison for professional journalists,’ and Russia has used ‘draconian laws and website blocking’ to pressure the independent media.  China, which ranks 176th, has put in place ever-stricter controls on news and information, and ‘more than 50 journalists and bloggers are currently detained in conditions that pose a threat to their lives.’

“Too often, press-freedom concerns are dismissed as special-interest complaining. They are much more than that. These reports show that when the press is silenced, when journalists are killed, a deeper sickness is afoot. Unfortunately, it seems to be spreading.”

--I watched Sean Hannity’s show on Wednesday, the day Michael Cohen took the Fifth, and Hannity never mentioned the story, but instead made fun of granting “full disclosure” to all his guests that night.  This as stories emerge of Hannity’s extensive real estate transactions, though he denies ever being involved with fraudster Jeffrey Wayne Brock, who has been part of a process that acquired properties at little more than the minimum bid during fraudulent auctions, Brock paying off two men who would attend the auctions but refrained from bidding against him, as reported by The Daily Beasts’ Michael Daly.  Records show Hannity was a beneficiary of the crooked scheme.  The Guardian estimates Hannity’s real estate portfolio at more than 870 properties in seven states, utilizing a large number of shell companies.

Brock, who pleaded guilty to federal bid rigging and fraud charges in 2016, helped Hannity acquire at least 11 properties, according to the Guardian’s Jon Swaine.

At the same time, Hannity has denied he had any direct discussions with the Department of Housing and Urban Development regarding loans for some of his larger holdings.

--James Comey’s book “A Higher Loyalty” had a big opening week, sales topping 600,000 copies, a number that includes print, audio and e-books.  I’m kind of surprised.

--Sacramento police arrested a former police officer for a notorious spree of murders, rapes and burglaries in the 1970s and 80s.  Joseph James DeAngelo, 72, known as the so-called Golden State Killer for 12 murders, 51 rapes and more than 120 burglaries, was identified after new efforts to solve the case, investigators say.

Police had been monitoring the suspect and used “discarded DNA” to match him to the crimes.  Incredible work.

--According to a report from the AAA Foundation for Traffic Safety, hit-and-run crash deaths are rising nationwide, with pedestrians and bicyclists accounting for about 70% of the victims, owing to more people cycling to work.  Motor-vehicle fatalities are at a near-decade-high level, up 61% from 2009 to 2016.

About 68% of fatal hit-and-run victims in 2016 were pedestrians or cyclists.

Of course it’s not just distracted drivers that are adding to the carnage, but it’s distracted pedestrians.  

--Comedian / actor Bill Cosby was found guilty of three counts of aggravated indecent assault by a jury in Norristown, Pa.  He faces years in prison when he is sentenced in 60 to 90 days.  His lawyer, Tom Mesereau, said “the fight is not over” and that they will appeal. Cosby maintains his innocence.

The guilty verdict came less than a year after another jury deadlocked on the charges.

As I watched the news with my mother, she blasted the women, Mom being a Cosby fan.

--Congratulations to the Duke and Duchess of Cambridge on the birth of their child, a boy, Louis Arthur Charles, or more formally His Royal Highness Prince Louis of Cambridge.  The new prince is fifth in line to the throne.

---

Pray for the men and women of our armed forces...and all the fallen.

God bless America....and James Shaw Jr., the Waffle House hero.

---

Gold $1324
Oil $67.97

Returns for the week 4/23-4/27

Dow Jones  -0.6%  [24311]
S&P 500  -0.01%  [2669]
S&P MidCap  -0.4%
Russell 2000  -0.5%
Nasdaq  -0.4%  [7119]

Returns for the period 1/1/18-4/27/18

Dow Jones  -1.7%
S&P 500  -0.1%
S&P MidCap  -0.4%
Russell 2000  +1.4%
Nasdaq  +3.1%

Bulls 48.0
Bears  19.6  [Source: Investors Intelligence]

Have a great week.

Brian Trumbore

 

 



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Week in Review

04/28/2018

For the week 4/23-4/27

[Posted 11:30 PM ET, Friday]

Note: StocksandNews has significant ongoing costs and your support is greatly appreciated.  Please click on the gofundme link or send a check to PO Box 990, New Providence, NJ 07974.

Edition 994

I can’t help but start out by saying on a personal note this was another hectic week for your editor.  Dad is in rehab after his fall, though doing well, while Mom requires 24-hour attention, meaning I divided spending nights (and then some) at the house with my brother while we assess the long-term situation.  For me, it is just a ton of time off the grid and that’s not good for what I do.  It’s also tiring.  But there is light at the end of the tunnel and I don’t think it’s an oncoming train.

Trump World

Yet another chaotic, historic, week in Trump World, and the next two promise more of the same, as this Tuesday President Trump rules on his 25% tariffs on steel and aluminum and whether they should be levied on the European Union, while a self-imposed May 12 deadline on pulling out of the Iran nuclear accord is looming, and we’re likely to learn where and when Trump and North Korea’s Kim Jong Un are going to hold their summit, on the heels of Friday’s historic meeting between Kim and South Korea’s President Moon.

On this last topic, I do wish our president would temper his enthusiasm, and also stop praising Chinese President Xi Jinping, a dictator who is no friend of America. And I wish Trump would understand that any deal with North Korea is incredibly complicated, as spelled out below.

But at the same time the president deserves credit for his role in advancing talks to this stage.  Talk is good.

I also thought the state visit with Emmanuel Macron was terrific, and President Trump handled it well.  Macron is Europe’s future.  Personally, I like the guy.

Today, German Chancellor Angela Merkel had a meeting with the president. While the two tried to put on a show of warmth and friendship, there are tensions between the allies over trade and NATO.  Merkel, like Macron, pressed Trump on a bilateral trade deal between the EU and the United States, but Trump said he wanted a “reciprocal” trade relationship with Germany and other European nations and wanted Germany and other NATO allies to pay more for their common defense, an issue he has raised repeatedly.  Merkel and Macron it would also seem fruitlessly tried to convince the president to stay in the Iran accord.

But there was so much more going on in Trump World this week.

Trumpets....

--President Trump said he has decided not to interfere with the Justice Department, which is conducting an investigation of his associates’ alleged ties to Russia, but suggested there was a point at which he might.

“I’m very disappointed in my Justice Department. I have decided I won’t be involved,” Trump said in an unhinged interview with Fox News’ “Fox & Friends” Thursday morning.

He then added: “I may change my mind at some point.”

In the interview, Trump also lashed out at what he called corruption in the FBI.

“You look at the corruption at the top of the FBI, it’s a disgrace, and our Justice Department – which I try to stay away from, but at some point, I won’t – our Justice Department should be looking at that kind of stuff,” the president said.

The president called the Russia investigation an “absolute disgrace” and a “cloud over my head.”

“They have this witch-hunt going on with people in the Justice Department that shouldn’t be there,” Trump said.  “They have a witch-hunt against the president of the United States going on.”

Trump’s comments Thursday followed weeks of frustration over the Russia probe and then the FBI’s decision earlier this month to raid properties tied to longtime Trump lawyer Michael Cohen. Earlier this month, Trump contemplated the possible dismissal of Deputy Attorney General Rod Rosenstein, who appointed Special Counsel Robert Mueller.

In the Fox News interview, Trump said of the Cohen investigation: “I’ve been told I’m not involved.” He added: “From what I can tell, he did nothing wrong.”

Asked about the extent of Cohen’s work for him, Trump said Thursday: “He represents me, like with this crazy Stormy Daniels deal. He represented me.” He then added, “There were no campaign funds going into it.”

But previously, the president said he had no knowledge of the payment by Cohen to Stormy (Stephanie Clifford) or where the money came from.  Asked earlier this month on Air Force One why Cohen had made the payment, Trump responded: “You’ll have to ask Michael Cohen.  Michael is my attorney. You’ll have to ask Michael.”

Trump also disputed memos written by former FBI director James Comey that the Justice Department gave to several congressional committees last week. In the memos, among other things, Comey said the president told him on two occasions that he didn’t stay overnight in Russia during a trip there for the 2013 Miss Universe pageant, as part of an effort by Mr. Trump to explain why the salacious allegations contained in an unverified dossier in the FBI’s possession were untrue.

But Mr. Trump’s tweets about the trip, and a Bloomberg News inquiry, including flight records, show Trump arrived in Moscow for the trip on a Friday and departed early on a Sunday.  In a CNN interview Wednesday, asked if it was significant Trump appeared not to tell the truth about his 2013 travel, Comey said: “It’s always significant when someone lies, especially about something you didn’t ask about.”

Trump on Thursday called Comey’s memos “phony” and said of his 2013 trip to Moscow: “Of course I stayed there.  I stayed there a very short period of time. I never said I left immediately.”

On the Stormy Daniels quote from Trump on Thursday, her attorney, Michael Avenatti, said the president made a “hugely damaging admission.”

Rod Rosenstein reportedly told Trump in a recent meeting that he is not a target of the Cohen investigation.

Unloading on Comey, Trump said during the “Fox & Friends” gig, “Look, Comey is a leaker and he is a liar and not only on this stuff, he has been leaking for years.”

Trump also said in the interview that he was persuading French President Emmanuel Macron that Iran and the nuclear agreement it has with the U.S. and other countries are problems.

“He is viewing I believe Iran a lot differently than he did before he walked into the Oval Office,” Trump said.

The president added he is reviewing five potential sites for a meeting with North Korea’s Kim Jong Un.  [Today he said it is down to 2 or 3.]

And he praised Kanye West for saying nice things about him.  “I get along with Kanye. I get along with a lot of people frankly.”

Meanwhile, the day before, Michael Cohen asserted his Fifth Amendment right to remain silent in the lawsuit that Stormy Daniels filed against him.  A federal judge ruled on Thursday that a court-appointed independent official should be the first to examine documents seized by FBI agents from Cohen.

Lawyers for Cohen and Trump wanted to seek to limit prosecutors’ ability to review the documents, citing attorney-client privilege.  Both sides then agreed to an independent “special master” who will review them.

But then today, a U.S. District judge ordered that Stormy Daniels’ lawsuit against Cohen be put on hold for 90 days, saying Cohen’s constitutional rights could be endangered if the lawsuit proceeds while he is under criminal investigation.

Judge James Otero wrote in the order: “The Court finds that there is a large potential factual overlap between the civil and criminal proceedings that would heavily implicate Mr. Cohen’s Fifth Amendment rights.”

--The Washington Post’s David Ignatius had an extensive report on former Trump campaign manager Paul Manafort’s ties to pro-Russia figures.

“An ominous sign for Manafort – and potentially for Trump himself – is the recent revelation of an August 2017 memo from then-Acting Attorney General Rod J. Rosenstein specifically authorizing (Special Counsel) Mueller to investigate allegations that Manafort ‘committed a crime or crimes by colluding with Russian government officials with respect to the Russian government’s efforts to interfere with the 2016 election.’”

As Ignatius writes, one campaign insider, speaking on condition of anonymity in order to describe its internal workings, “told me he doesn’t recall any serious questions being asked about Manafort’s activities in Ukraine or his past links with pro-Russia figures. This lack of vetting is surprising, given that the FBI had investigated Manafort’s Ukraine activities back in 2014, according to a source familiar with the bureau’s investigation who wasn’t authorized to speak publicly about it. Such questions weren’t posed about any Trump advisers. It was ‘plug and play,’ the insider recalled, with ‘no process’ for background checks.”

Separately, the Russian lawyer who met with Trump campaign officials in Trump Tower in June 2016, Natalia Veselnitskaya, who said she would deliver damaging information about Hillary Clinton but has long insisted she is a private attorney, admitted to NBC News’ Richard Engel that she worked for the Kremlin, specifically Yuri Chaika, the prosecutor general.

“I am a lawyer, and I am an informant,” she said.  “Since 2013, I have been actively communicating with the office of the Russian prosecutor general.”

So who was she representing when she with Donald Trump Jr., Jared Kushner, Manafort and others?

A slew of emails detailing some of her work were obtained by a Russian group set up by Mikhail Khodorkovsky, a former tycoon stripped of his oil holdings by Putin.  Now in exile after a lengthy period in prison, Khodorkovsky has emerged as a leading opponent of Vlad the Impaler.

But what does it all mean?  Like many of you, forget the various congressional inquiries and their partisan conclusions.  Only Robert Mueller matters.

Then again, Trump tweeted tonight on release of a House investigation: “House Intelligence Committee rules that there was NO COLLUSION between the Trump Campaign and Russia.  As I have been saying all along, it is all a big Hoax by the Democrats based on payments and lies. There should never have been a Special Counsel appointed. Witch Hunt!”

--Navy Rear Adm. Ronny Jackson said Thursday he was withdrawing from consideration as President Trump’s nominee to be the next secretary of the Department of Veterans Affairs amid a barrage of allegations of prior misconduct.

“Unfortunately, because of how Washington works, these false allegations have become a distraction for this President and the important issue we must be addressing – how we give the best care to our nation’s heroes,” Jackson said in a statement.

Jackson said he expected “tough questions” about his qualifications for the VA, “but I did not expect to have to dignify baseless and anonymous attacks on my character and integrity.”

Trump told Fox News that Jackson’s decision did not surprise him – “I saw where this was going” – and said “it’s a disgrace” the way his nominees have been treated, including “Doc Ronny.”

Well as I said at the time of Jackson’s selection, it was a terrible pick, and we didn’t know of the allegations then, which I won’t comment on because I haven’t seen any facts.  He was just unqualified.

In his statement of withdrawal, Jackson called the allegations against him “completely false and fabricated.”  He added:  “If they had any merit, I would not have been selected, promoted and entrusted to serve in such a sensitive and important role as physician to three presidents over the past 12 years.”  President Obama, for one, had given him glowing performance reviews, according to the White House.

Meanwhile, this most important government agency, the second largest, is rudderless and veterans are suffering.  Robert Wilkie, an undersecretary at the Pentagon, has been acting secretary until a permanent one is confirmed.

--Thursday, CIA Director Mike Pompeo became secretary of state by a 57-42 vote in the Senate, far closer than traditional for a president’s nominee.  I thought some of the debate on his confirmation was absurd.  Pompeo should have sailed through.

But now the count doesn’t matter.   Pompeo hopped on a jet to represent the United States at a NATO summit in Brussels, and is of course the key figure, along with John Bolton, when it comes to the upcoming summit with North Korea, let alone Iran, Syria, Afghanistan…you name it.

--Environmental Protection Agency chief, Scott Pruitt, faced two House subcommittees on Thursday and he fought back against Democratic criticism of his spending and policies, asserting the attacks were driven by opposition to Trump’s agenda.

Pruitt acknowledged the “very troubling reports” on his travel, housing and personnel actions, but said the reports were twisted.  “Let me be clear, I have nothing to hide,” he said.

The White House, inspector general of the EPA, House oversight committee and Government Accountability Office are all looking into Pruitt’s spending, including with the link between his rental housing in Washington and a lobbyist.

President Trump remains supportive.

--Supreme Court justices on Wednesday grilled the government’s lawyer about President Trump’s authority to impose a travel ban, which restricts entry into the United States from several predominantly Muslim nations.

In a case that is a major test of presidential power, several justices questioned Solicitor General Noel J. Francisco about the government’s justification for the ban being national security and questioned him on whether the restrictions were tainted by religious animus.

Justice Elena Kagan offered a hypothetical in which a future president who is a “vehement anti-Semite” and makes denigrating comments about Jews comes into office and bans entry to the United States from Israel.

“The question is what are reasonable observers to think in that context?” Kagan asked.  [New York Times]

A decision is expected by late June, but Court observers believe the Supremes will rule in the president’s favor.  Chief Justice John Roberts and Justice Anthony Kennedy said federal law gives the president, not the courts, the power to weigh threats from immigrants.

“Could the president ban the entry of Syrians” if he had evidence that some Syrians had chemical or biological weapons, Roberts asked a lawyer challenging Trump’s travel ban.  The answer was obviously yes, the chief justice said, answering his own question. [Washington Post]

Along with Justices, Alito, Gorsuch and Thomas, the conservatives appear to have five solid votes to uphold Trump’s order.

--Trump tweets: …these last five in succession, last to first, April 22.

“Funny how all of the Pundits that couldn’t come close to making a deal on North Korea are now all over the place telling me how to make a deal!”

“A complete Witch Hunt!”

“ ‘I can die happy now with Trump Job performance,’ stated Mary Matalin.  ‘A great overall President, stunning!’ Thank you, Mary.”

“…We are a long way from conclusion on North Korea, maybe things will work out, and maybe they won’t – only time will tell….But the work I am doing now should have been done a long time ago!”

“Sleepy Eyes Chuck Todd of Fake News NBC just stated that we have given up so much in our negotiations with North Korea, and they have given up nothing. Wow, we haven’t given up anything & they have agreed to denuclearization (so great for World), site closure, & no more testing!”

State Visit...Emmanuel Macron

Seth Lipsky / New York Post

“So much for the idea that President Trump would be too ignorant and coarse to conduct diplomacy with Europe on a grand scale.  And that he can’t handle differing points of view.

“The state visit of French President Emmanuel Macron makes clear Trump has found a European partner of verve and vigor.  And that he can work with someone who is well to his left.

“This started coming into view for millions of Americans at Tuesday’s banquet….

“The startling thing was the next morning, when Macron delivered a speech to a joint meeting of Congress, in which he laid out his differences with Trump on global warming and Iran.

“Republicans gave him a warm and noisy welcome.  The Democrats, though, were faster to their feet, cheering as Macron needled Trump over the Paris climate accord and the Iran deal.

“No cheese-eating surrender monkey ever got a better reception. And the astonishing thing is that Trump seemed to take it all in stride (he said in advance Macron would do a great job).

“What a contrast to the last time the leader  of a major foreign ally criticized an American president’s program before a joint meeting of Congress. That was Prime Minister Benjamin Netanyahu of Israel.

“Remember? Bibi and Macron both went to the Hill with a similar message – the sitting president was about to mishandle a deal with Iran.  Netanyahu warned against signing Barack Obama’s pact with the mullahs, while Macron wants to save, not kill, the deal, and is pushing ‘improvements’ that run against Trump’s instincts.

“How did the two American presidents react?  Obama went into a first-class tantrum, carrying on about how Congress was wrong to invite Netanyahu in the first place and deriding Bibi personally.

“Obama reduced his Israel relations to a shambles. He went ahead and inked the Iran deal against what The New York Times has described as ‘overwhelming’ opposition in Congress.

“While the Israeli leader focused on only a narrow issue – the Iran deal – Macron issued a broader challenge to his host, starting with a call for a ‘new multilateralism.’ How does one say ‘chutzpah’ in French? Trump just won the presidency in part for his beef with multilateralism.

“That is, with institutions like the United Nations, the European Union, NATO and various free-trade agreements. He’s made it clear he prefers bilateral relations and doesn’t want America fleeced.

“Then Macron carped about Trump’s opposition to the Paris climate accord, a scheme to pick Americans’ pocket.  Trump pulled out of it less than a year ago, citing its costs.

“Yet, Macron told Congress, ‘some people’ – Trumpists, he meant – think that securing jobs is ‘more urgent than transforming our economies.’  He said he wanted to ‘make the planet great again.’

“Macron was particularly obnoxious on Iran.  He wants to expand the deal to cover ‘four pillars’ – the current pact, plus ‘the post-2025 period,’ regional military influence and monitoring ballistic missiles.

“None of Macron’s pillars mentioned democracy in Iran or an end of its war against Israel. He’s prepared to contract with an anti-Semitic, non-democratic, theocracy constitutionally committed to jihad.

“Which brings us back to Trump. He’s in a perfect position to refuse to certify Iran’s compliance when the deadline comes up next month, while saying he’ll look at any improvements Macron can get.

“For that matter, he can do the same with the Climate pact. If Macron thinks he can get a fair deal for America that’s in accord with the ‘science,’ let him try.

“Meantime, Trump has found a partner in the heart of Europe – a leader who started out,  like Trump himself did, as a businessman. And who brushed aside the old guard, right and left, to win his presidency.

“Macron declined to get drawn into complaining about Trump’s fitness.  He welcomed Trump in France and has been markedly more friendly than the other European leaders.

“Including, incidentally, the British, who’ve yet to assure Trump a warm welcome in London.  Then again, France sided with us in the Revolution. Old habits die hard.”

Kevin Bacon / Defense News

“Wow, Macron went there.  One day after President Trump welcomed the French president with a bromatic White House visit filled with hugs and handshakes, Emmanuel Macron stood before a joint session of Congress and fired away at his host’s ‘America First’ foreign policy.  With JFK-like phrasing, Macron called for strong Western leadership in urgent defense of liberal democracy.  It was a direct rebuke to Trumpism and the rise of fear-based nationalism and populism in the U.S. and Europe.  It was passionate, articulate, and rousing.

“And the entire Congress rose again and again to applaud.

“Addressing a Republican-controlled legislature that is grappling with Trumpism, Macron on Wednesday repeatedly called for multilateralism as he offered a defense of the liberal world order. He  warned of the potential fall of international organizations and their stabilizing effects on global security.  He called for allies to craft a new future based more on their common goals and less on their fears.

“If a Democrat had given that same speech, the Republican half of the chamber would have sat quiet on their hands. But the French president has become the darling of Washington, for the time being.  His passages on climate change and the Iran deal drew less unified applause, but the larger  themes rang loud and clear.

“More importantly for current events, Macron informed Congress how France apparently has taken the reins in the effort to find a path to peace in the Middle East.  The French president confirmed in his speech that he had convinced Trump – ‘we had decided together’ is how he put it – to work toward a ‘comprehensive’ new agreement with Iran.  (Macron did not say whether Trump will recertify the  existing deal next month, but he argued against scrapping it without an alternative plan.)  Macron also pitched his four-point plan, first outlined last fall at the United nations, including ‘containment’ of Iran.

“Not so long ago – say, two years – the word ‘containment’ sent conservatives screaming about appeasement.  This week, Washington is absorbing Macron’s proposal, seeing in it a possible path to end the war in Syria  and limit Iran’s regional influence through negotiation in Yemen, Lebanon, Iraq, and Syria.

“Liberals and arms control experts who herald the JCPOA say the ‘grand bargain’ idea is folly.  Maybe.   But understand this: Macron, and not the American president, has put forth a path to peace – and not just for the Syria conflict – by tying it to a larger proposed agreement that would leave the original nuclear deal intact while doing something about Tehran’s meddling abroad and missile development at home.

“In short, the French are now in the lead.  Not America.

“Macron’s speech nodded to all of the things that concern Trumpist and populist voters, from inequitable globalism to terrorist threats.

“Was this by design or default?  The French president was invited to Washington in partial recompense for welcoming the New York real estate mogul onto the stage of world leaders.  Did Trump want Macron to ride out of Washington as the lead architect of a new world order, savior of Syria, negotiator of Middle East peace, fomenter of Iranian reform, and gatherer of power, stardom, and American fans? If so, mission accomplished.”

Among Macron’s memorable statements in his speech to Congress:

Both in the United States and in Europe, we are living in a time of anger and fear, because of these current global threats. But these feelings do not build anything. You can play with fears and angers for a time, but they do not construct anything.  Anger only freezes and weakens us. And as Franklin Delano Roosevelt said during his first inaugural speech, ‘The only thing we have to fear, it is fear itself.’

The entire Congress stood.

We can choose isolationism, withdrawal, and nationalism.  This is an option.  It can be tempting to us as a temporary remedy to our fears,’ Macron continued.  But closing the door to the world will not stop the evolution of the world. It will not douse, but inflame the fears of our citizens.  We have to keep our eyes wide open to the new risks right in front of us. I’m convinced that if we decide to open our eyes wider, we will be stronger, we will overcome the dangers, we will not let the rampaging work of extreme nationalism shake a world full of hopes for greater prosperity.

Kevin Bacon says the following passage was the most important.

It is a critical moment.  If we do not act with urgency as a global  community, I am convinced that the international institutions, including the United Nations and NATO, will no longer be able to exercise a mandate and stabilizing influence.

We will then inevitably and severely undermine the liberal order we built after World War II.  Other powers with the strongest strategy and ambition  will then fill the void we would leave empty.  Other powers will not hesitate once again to advocate their own model to shape the 21st century world order.

Personally, if you ask me, I do not share the fascination for new strong powers, the abandonment of freedom, and the illusion of nationalism.

Therefore, distinguished members of the Congress, let us push them aside, write our own history and birth the future we want.

More on the Iran deal below.

Wall Street

There was a slew of economic news this week, with March existing home sales coming in at an annualized rate of 5.6 million, as reported by the National Association of Realtors, down 1.2% over a year earlier, with the median sales price at $250,400, up 5.8% from March 2017.  March new home sales were better than expected at 694,000.

The S&P CoreLogic Case-Shiller home price index for February was up 6.8% for its 20-city index, year-over-year, better than expected.

March durable goods orders were better-than-expected, up 2.6%, but were unchanged ex-transportation.

Then Friday, we had our initial look at first-quarter GDP and it was 2.3%, after 2.9% in the fourth quarter.  In recent years the first quarter has been the slowest, which bodes well for future growth.  [The Atlanta Fed’s GDPNow indicator for Q1 is still just 2.0%, so we’ll see how the final numbers shake out over the coming months, GDP getting two revisions.]

The GDP report contained inflation data that the Federal Reserve monitors and the personal consumption expenditures index for the quarter rose 2.5%, ex-food and energy, with the March reading on PCE coming out this week.

Separately, the Employment Cost Index, another key barometer, rose 2.7% year-over-year, the strongest since 2008, leading some to believe the Fed will now definitely hike the key funds rate three more times this year, not two.  [The Fed meets May 1-2, but no one expects them to raise at this one. Rates are definitely headed higher at the June 12-13 confab.]

Europe and Asia

European Central Bank chief Mario Draghi said policy makers refrained from discussing the end of asset purchases or even the stronger euro at the Governing Council’s two-day meeting. Instead the focus was on gauging the health of the region’s economy, which is slowing, no doubt.  But Draghi said the euro-area expansion was durable.

“The interesting thing is that we didn’t discuss monetary policy per se. It’s quite clear that since our last meeting, broadly all countries experienced, in a different extent of course, some moderation in growth or some loss of momentum.”

An initial look at first quarter eurozone GDP comes on Wednesday, with economists predicting growth of 0.5% - weaker than the 0.7% (quarter-over-quarter) recorded at the end of 2017, but still solid.

Draghi remains confident that inflation in the euro-area will approach 2%, up from the current 1.3% in March.

The ECB chief also added: “The risks surrounding the euro area growth outlook remain broadly balanced.  However, risks related to global factors, including the threat of increased protectionism, have become more prominent.”

Draghi said it was not yet clear what the concrete effects of “what is so far rhetoric about protectionism” would be, especially when it came to the extent of retaliation.  “What is known is that these events have a profound and rapid effect on business, on exporters’ confidence...and confidence can in turn affect growth.”

In the ECB’s formal statement, it was word for word the same as in March, the governing council reiterating it would keep interest rates at record lows “well past” the end of the quantitative easing program.

It is still expected the ECB will stop buying new bonds later this year before raising interest rates towards the middle of 2019. But this is dependent on the data.

Meanwhile, the U.K. economy grew at its slowest pace since 2012 in the first quarter, according to the Office for National Statistics, just 0.1%, down from 0.4% in the previous quarter, driven by a sharp drop in construction output and a sluggish manufacturing sector.

The British economy overall, though, has grown every year since 2010 and unemployment is at a 40-year low, as the prime minister’s office reminded everyone.

In the eurozone (EA19), the April flash readings came out and the manufacturing PMI was 56.0 (50 being the dividing line between growth and contraction), a 14-month low, but still strong, with services at 55.0.

Germany had a flash April reading on manufacturing of 58.1, services 54.1.

France was 53.4 (mfg.) and 57.4 (services).

Chris Williamson, chief economist, IHS Markit:

“The eurozone economy remained stuck in a lower gear in April, with business activity expanding at a rate unchanged on March, which had in turn been the slowest since the start of 2017.  Growth has downshifted markedly since the peak at the start of the year, but importantly still remains robust....

“However, it’s also clear that underlying demand has weakened, in part due to exports being hit by the stronger euro. With companies’ future optimism having slipped to the lowest since last year, it looks likely that growth may well slow further in coming months.”

Separately, Eurostat reported the latest government debt figures for Q4 2017.  The EA19 was at 86.7% debt to GDP, vs. 89.0% Q4 2016.  Greece still leads the way at 178.6%, followed by Italy 131.8% and Portugal 125.7%.  Spain is at 98.3%, France 97.0%, Germany 64.1% and the U.K. 87.7%.

Eurobits...

Italy: President Sergio Mattarella, a figurehead except in times like these, kicked off a fourth round of consultations among Italy’s political parties in another attempt to form a new government, two months after national elections.  Should the current round fail, Mattarella could select a neutral figure to lead a broad-based coalition that would have a limited mandate and duration.  New elections are a distinct possibility.

Mattarella asked a senior parliamentary figure, Roberto Fico, the speaker of the lower house, to hold talks with party chiefs of the anti-establishment 5 Star Movement and the incumbent Democratic Party (PD) to see if they can form a government, with the center-left PD saying it needed until next week to make a decision.

The PD had previously said it wanted to move into the opposition after suffering a big defeat in the March polls.

Turning to Asia...nothing of import this week.

Street Byes

--Stocks ended the week mixed after an incredibly busy week of earnings, as detailed below. The FANG stocks (Facebook, Amazon, Netflix and Google) have all reported outrageous profit numbers, but the fifth member of the group, if you stretch it to FAANG, Apple, reports next week.

The Dow Jones lost 0.6% this week to 24311, while the S&P 500 lost a single point, -0.01%, and Nasdaq fell 0.4%. The industrial sector of the market fell 3.2% over the week as investors took a dim view of their results.

--U.S. Treasury Yields

6-mo. 2.00%  2-yr. 2.48%  10-yr. 2.96%  30-yr. 3.12%

Bonds finished the week virtually unchanged, though the yield on the 10-year crossed 3.00% (highest since Jan. 2014), spooking the markets, but fell back today.

--Chevron, Exxon Mobil and Royal Dutch Shell posted their best first-quarter profits in years, taking advantage of higher oil prices, but despite a 50% price surge since last year, drilling budgets at the largest oil-and-gas companies are up only 7%, according to consultancy Wood Mackenzie and the Wall Street Journal.

Investors don’t want to see a return to the years when the giants spend heavily, often on projects that generated meager returns.

But smaller producers have been far more aggressive, seeing the current period as a time to gain market share.  Shares in the big companies continue to lag the rise in the price of crude, which closed today at $67.97.

Exxon announced a profit of $4.65 billion, up 16% in the quarter vs. a year ago, while Chevron’s profits were $3.6 billion, up 36% year-over-year.

--CNBC’s Jim Cramer called Amazon’s first-quarter results, “the best quarter ever.”  All companies. 

Amazon reported its best revenue growth in more than six years, while topping $1 billion in profit for the second straight quarter, surprising the Street on both fronts.  Amazon more than doubled its net profit to $1.6 billion – just under its record of $1.9 billion from the holiday quarter – with revenue surging 43%.

The revenue growth was Amazon’s best mark since the third quarter of 2011, pushing its total to about $51 billion. The company continues to record better-than-expected results from its cloud-services division and strong growth in the company’s advertising business.

Online sales are growing faster than overall retail, and Amazon currently commands roughly 43 cents of every dollar spent online, according to research firm eMarketer.  The base of Prime members now exceeds 100 million globally.

Amazon Web Services, the company’s cloud-services division, experienced big growth, with revenue rising 49% to $5.44 billion, while operating income increased 57% to $1.4 billion

Dan Gallagher / Wall Street Journal

“Investors have come to expect big things from Amazon.com. Profits haven’t always been among them.

“That is quickly changing, as shown Thursday with solid first-quarter results.  Operating income surged 93% year over year to $1.9 billion. That was more than double the company’s growth in sales, which jumped 43% to $51 billion. Amazon is steadily making more of its money from businesses that are more profitable than shipping boxes of goods to consumers.

“Chief among those is its AWS cloud unit, which generated $5.4 billion in revenue during the quarter. That was up 49% year over year.  More notably, operating profits at AWS surged by 57% to $1.4 billion.

AWS now comprises about 11% of Amazon’s total revenue, but it makes 22% more in profits than Amazon’s North American retail arm, which generates nearly six times the revenue. It also doesn’t hurt that Amazon now owns a high-margin grocer in Whole Foods.  Operating profit for the company’s North American retail unit nearly doubled to $1.1 billion....

“(Yet) it is worth remembering that Amazon’s growth never comes cheap. Capital spending, which includes its outlay for equipment acquired under capital leases, jumped 33% year over year to nearly $5.4 billion.”

But then you have the Washington risk in the form of increased scrutiny over the company’s success and market dominance. And what will the reaction be to Amazon’s plan to boost the Prime membership fee $20 to $119?

--Facebook Inc. continued to add users and saw revenue soar in the first quarter, despite the Cambridge Analytica scandal and FB’s worst crisis in company history over the mishandling of personal data.

The company reported a 50% increase in revenue from the same period a year ago, to $11.97 billion.  Analysts had expected a 40% increase to $11.4 billion.

Earnings per share of $1.69 blew away estimates of $1.35.  Monthly active users totaled 2.2 billion and daily active users 1.45 billion, both meeting the Street’s expectations of a 13% increase from a year ago. The shares rallied in response.

CEO Mark Zuckerberg said: “Despite facing important challenges, our community and business are off to a strong start in 2018.  We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.”

Oh brother.

Despite the bad press, few have left the site and the 1.45 billion daily active users for the first three months of this year, compared with 1.4 billion the previous quarter.  Analysts also expect  monthly active users to rise to 2.19 billion, up from 2.13 billion in the fourth quarter.

--Google parent Alphabet Inc. posted surging profits as advertisers continued to flock to the search giant, despite the global debate about internet privacy.

Net profit jumped 73% to $9.4 billion in the first quarter, up from $5.4 billion in the same period last year.

Advertising revenue soared 24% to $26.6 billion.

But Google’s dominant role in search is bringing tougher scrutiny, with the European Union adopting a sweeping set of rules called the General Data Protection Regulation that goes into effect May 25, and it could affect Alphabet’s revenue.

Google is expected to control 31% of the global ad market this year, down from 31.7%, according to eMarketer.

Alphabet doesn’t break down results for a huge driver of revenue, YouTube, and investors have called for more transparency, with analysts estimating it will generate from $11 billion to $20 billion this year, representing between 10% and 18% of Alphabet’s overall revenue.

--Twitter Inc. beat analysts’ estimates for earnings in the first quarter and showed signs that it’s finally overcoming a slump, but the positives were tempered by an outlook for slower growth this year.

The social media company’s push into live video and more personalized content appears to be starting to pay off, boosting revenue and profit in the first quarter by luring users and advertisers.  Sales jumped 21 percent, the most in two years, to $664.9 million.  Twitter said monthly active users rose to 336 million, up by 6 million from the prior period.

The shares, however, were whipsawed, rising 14 percent in early trading, before selling off after comments on the analyst call regarding growth.

Twitter has been struggling for years to compete for ad dollars with the likes of Facebook and Google’s YouTube.  And monthly user growth was up only 2.8 percent from a year ago, the slowest pace in two years.  Facebook has six times more users than Twitter and far stronger growth.

Twitter’s monthly active users in the U.S. increased by 1 million from the fourth quarter to 69 million, while internationally, MAUs grew to 267 million from 262 million.

--Microsoft continued its winning streak in what was its fiscal third quarter, as its Azure cloud business jumped 93% for the three months; the business never growing slower than 90% since the company began breaking it out in its financials in October 2015. The other big piece of its cloud operations, the commercial version of its Office 365 online-productivity service, grew 42%.

The two businesses combined for $6 billion in revenue, up 58%. The company has been looking to become Amazon’s chief rival in renting out computing power and storage and in the first three months of 2018, Amazon held a 31.7% share of the cloud infrastructure market, while Microsoft was at 16% and Google 7.4%, according to research firm Canalys.

Overall, Microsoft posted a profit of $7.42 billion, with revenue up 16% to $26.82 billion, both exceeding expectations. The company’s shares are trading near an all-time high hit last month.

Microsoft did say it had $3.5 billion in capital expenses, much of that money going toward its data-center expansion.

--Intel Corp.’s quarterly profit surged as the chip giant showed no impact over revelations earlier this year of critical security flaws in its processors.  Profit in the first quarter grew by 50% from a year earlier to $4.45 billion.  Revenue rose 9% to $16.07 billion.

Revenue from the division that sells chips for PCs, which generally makes up more than half of revenue, rose by 3%, despite declining PC shipments in the quarter, according to Gartner.

According to Mercury Research, Intel still holds 95% market share in chips for PCs and servers, which is why the chip flaws announced last January had so many on edge, though Intel has said it would fix the vulnerabilities in new chips due this year, and in the meantime it issued updates.

Rival Advanced Micro Devices reported Wednesday that revenue in its division that sells PC chips ballooned 95% in the first three months of 2018. AMD turned a profit of $81 million, vs. a $33 million loss a year ago.

But AMD’s architect for its latest chips is joining Intel as head of hardware engineering.

--Boeing Co. reported results that beat expectations for the first quarter, with profit rising to $2.48 billion in the quarter from $1.58 billion a year earlier, with per-share earnings up to $4.15 from $2.54; ex-charges, $3.64 vs. $2.58.

Boeing’s order book has swelled to more than 5,800 jets worth $415 billion. Boeing also boosted its guidance for full-year profit.

And the company announced it aimed to have a new facility in China ready to complete some of its 737 jets by the end of this year, a sign Boeing is taking trade tensions in stride.

Boeing CEO Dennis Muilenburg said the company needs the facility (a finishing center being built near Shanghai) in order to compete with rival Airbus, which already builds jets in China.

China accounts for a fifth of Boeing’s jetliner deliveries.

--General Motors Co. first-quarter net income fell 60% amid hefty restructuring costs in South Korea and in the U.S. from planned factory downtime (to prepare for the autumn launch of redesigned pickup trucks), though the automaker still handily beat the Street’s expectations.

Revenue from continuing operations declined 3% to $36.1 billion, still much higher than forecast.

GM got a lift in China – its No. 2 profit generator and top market by sales volume – with record income of $597 million from GM’s joint ventures in the region, up 18% from a year earlier. GM’s China sales rose 8% in the quarter on strong demand for Chevy SUVs and the Cadillac brand.

--Ford announced it was eliminating all of its car models in North America as it reinvents itself as a utility vehicle-focused brand in an effort to improve operating efficiency and profit margin.

The Taurus, Fusion, Fiesta and C-Max will be discontinued, leaving only the Mustang and a new crossover-style compact called the Focus Active in showrooms alongside a growing lineup of SUVs.

Earlier, Ford announced plans to have eight SUVs on sale by 2020, including a new Bronco and an all-electric performance model codename Mach 1.

Ford didn’t reveal the fate of the sedans in its Lincoln lineup, but said the luxury division as a whole is not in jeopardy.

The announcement on the lineup changes came as Ford said it earned a first-quarter profit of $1.7 billion, a 9% increase compared to the same period last year, beating Wall Street expectations.

Ford’s revenue worldwide increased 7% to $42 billion for the quarter.

--Fiat Chrysler Automobiles NV said earnings rose 60% in the first quarter on strong sales of its most profitable vehicles. Fourth-quarter net profit came to $1.24 billion, even as revenue fell 2% to $35 billion.  Like the others, sales were strong for the higher-margin SUVs and new Ram 1500 pickup truck.

--Caterpillar Inc. reported sales for the quarter rose 31% thanks to strong global construction and mining activity.  But on a call with analysts, top executives said the quarter could prove to be a “high-water mark” for the year.  After initially rallying strongly on the earnings news, CAT shares fell 6% on the day.

Shares in 3M also fell more than 6% after the maker of myriad products narrowed its revenue and profit forecast for this year.

Executives at both 3M and Caterpillar said their steel costs have risen since the Trump administration moved to place duties on imports from some foreign countries.

CAT warned trade tensions could darken the outlook for the year.

The general tone off these two reports is that this might be as good as it gets, though CAT boosted its guidance.

--Southern California’s median home price jumped 8.4% in March from a year earlier, setting a new all-time high, as hopeful buyers engaged in bidding wars over a limited supply of homes on the market.

The six-county median price for new and resale houses and condos hit $519,000 last month, up $40,000 from a year earlier, according to CoreLogic.  March’s median topped the previous all-time high of $509,500 set in December.

Sales, though, fell 6.2% compared with a year ago.

The median price in Orange County rose 8.7% to a record of $725,000.

--Southwest Airlines said bookings have dropped since last week’s fatal accident on the largest domestic U.S. airline.  The carrier froze all advertising in the wake of the incident on a flight from New York to Dallas and announced it would lose up to $100 million in revenue into May as a result.

Investigators are continuing their probe into the accident that involved a blown engine, with Southwest saying it has checked 8,500 engine fan blades over the past 10 days, with 16,500 still to go as of this week.

--The Justice Department is investigating whether Huawei Technologies Co. violated U.S. sanctions related to Iran, opening a new avenue of scrutiny into the Chinese cellular-electronics giant on national security grounds.

The latest probe raises the stakes for Huawei, which is already facing a series of actions by the U.S. that have severely limited its business here, and could have a spillover effect in Europe, where Huawei has a much larger footprint.

As I’ve noted in the past, Huawei is also being targeted as a threat to American leadership in the race to develop the future of mobile communication. There have long been fears the Chinese government would use Huawei for cyber-subterfuge.

But in the situation with Iran, if the U.S. concludes the company violated U.S. export laws, the company could face criminal penalties.

Separately, the U.S. ban that bars Chinese telecommunications equipment maker ZTE from using American products and services is a wakeup call for China’s tech ambitions.  The prospect that ZTE could lose its license to use Google’s Android operating system for smartphones has also raised the question: does China need its own smartphone OS as a backup?

This is a question posed in the South China Morning Post today.  Consider that Apple’s proprietary iOS and Android account for 99.9 percent of the global smartphone operating systems, according to Gartner.

Which means that Huawei could be the next to try to crack the duopoly. The company has been developing and perfecting its own smartphone OS, and it has its own OS for tablets and personal computers.  This has long been in the works, but now clearly development needs to be speeded up.  Huawei, according to sources, hasn’t released its OS yet because it isn’t as good as Android.

Well, you can imagine the intellectual property theft taking place in this realm.

--Shares in Chipotle Mexican Grill soared after the company reported net income for the first quarter that was well above consensus, and up 33% from a year earlier.  Investors love the company’s first new CEO in its 25-year history, Brian Nicol, for his infectious enthusiasm.

Revenue increased 7.4% year-over-year, with comp sales up 2.2%, also better than expected. Chipotle expects to add 130 to 150 new restaurants as it seeks to put its past issues behind it.

Nicol said he is “tremendously excited about the fundamentals that we are maniacally focused on.”

--Subway Restaurants is planning to shutter an estimated 500 locations in the U.S.  This comes after Subway shut down 800-plus locations last year.  2016 also saw store closings.  The chain currently has close to 26,000 locations in the U.S.

At the same time, Subway expects to open 1,000 restaurants around the globe, including in Mexico, the U.K., Germany, South Korea, India and China.

With over 44,000 locations in 112 countries, Subway is the largest restaurant chain in the world, according to the company.

It’s a simple story. Subway is getting killed by competition from the likes of Panera to now McDonald’s and its Signature Crafted Sandwiches, as well as Starbucks, which is going after the lunchtime business.

--NBC is under the gun again, as former correspondent Linda Vester told Variety in an interview published Thursday that legendary news anchor Tom Brokaw sexually harassed her on separate occasions while she worked there.

Vester told Variety she was going public because she was unhappy with how the network was handling sex-harassment allegations against former “Today” host Matt Lauer.

Vester claims Brokaw tried to kiss her in her hotel room in 1993, then again at a London restaurant the next year.

Brokaw, who has been married since 1962, denied any misconduct. 

And then NBC News has the Megyn Kelly problem. As the Wall Street Journal’s Joe Flint reported, needless to say, the three-year, $69 million bet to woo Ms. Kelly from Fox News “is backfiring.”  Ratings have declined and production costs are up after Kelly took over the 9 a.m. hour of “Today.”

And Flint notes:

“With the audiences for morning and evening news shows on a slow decline for decades, the focus of most network news managers is on profit margins and reducing the high salaries of the former era.

“When Diane Sawyer stepped down from anchoring ABC’s ‘World News Tonight’ in 2014, relative unknown David Muir was given the job and ratings actually went up.  After Katie Couric gave up anchoring ‘CBS Evening News,’ she was replaced by the less-known Scott Pelley, who has subsequently been replaced by the even lesser-known Jeff Glor without a hit to ratings. Those anchors commanded significantly lower salaries than Ms. Sawyer and Ms. Couric.”

Since joining “Today,” Kelly’s audience is 18% below what the hour was pulling in last season, according to Nielsen data.  And they have continued to fall the past two months.

Among adults aged 25 to 54, the key demographic, ratings are down 28% since last season.

The “Today” franchise is key to NBC News and its parent NBCUniversal, a unit of Comcast Corp.  “Today” generates more than $500 million in revenue and profits of more than $100 million annually, as reported by Joe Flint. And Kelly’s $23 million-a-year salary compares with the combined salaries of previous hosts Al Roker and Tamron Hall, less than half that.

Foreign Affairs

North Korea: The leaders of North and South Korea have agreed to work to rid the peninsula of nuclear weapons after holding an historic summit. The North’s Kim Jong Un and South Korea’s Moon Jae-in also agreed to push towards turning the armistice that ended the Korean War in 1953 into a peace treaty this year.  The developments come just months after warlike rhetoric from North Korea.

Before we get too excited, however, understand there were zero details on how denuclearization would be achieved, Kim and Moon, let alone President Trump, having different ideas on what ‘denuclearization’ really is.  Many longtime Korea watchers remain highly skeptical about the North’s apparent enthusiasm for engagement.

A paramount issue for Pyongyang is the security guarantee extended by the U.S. to South Korea and Japan and the presence of U.S. troops in both countries.

And it’s important to remember that previous inter-Korean agreements have included similar pledges, but were then abandoned by the North. South Korea also has a very liberal leader in Moon, currently, so the atmosphere and cordiality can change if South Korea wanted to go in a different direction down the road politically.

For now, following the summit, Kim said the two leaders had agreed to work to prevent a repeat of the region’s “unfortunate history” in which progress had “fizzled out.”

“There may be backlash, hardship and frustration,” he said, adding: “A victory cannot be achieved without pain.”

The two leaders agreed to other points in a joint statement, including a push for four-way talks involving the U.S. and China (Japan will want to be part of that), an arms reduction in the region pending the easing of military tension, changing the demilitarized zone into a “peace zone” by ceasing propaganda broadcasts, and further joint participation in sporting events.

But the key thus far, the commitment to denuclearize, does not explicitly refer to North Korea halting its nuclear activities, but rather the aim of ‘a nuclear-free Korean peninsula.’  And whatever denuclearization really means, no doubt Pyongyang will want it to be phased, which is not what President Trump would accept.

President Moon agreed to travel to Pyongyang in the fall for a summit meeting.

“We will work towards preventing another horrible war,” Kim said after signing the joint declaration.  “With one language, one culture and one history, North and South Korea will be joined as one nation.”

China praised the political determination and courage of both leaders.

President Trump issued a series of tweets: “After a furious year of missile launches and Nuclear testing, a historic meeting between North and South Korea is now taking place. Good things are happening, but only time will tell!”

“KOREAN WAR TO END! The United States, and all of its GREAT people, should be very proud of what is now taking place in Korea!”

“Please do not forget the great help that my good friend, President Xi of China, has given to the United States, particularly at the Border of North Korea.  Without him it would have been a much longer, tougher, process!”

[This last one makes we sick.]

Prior to the summit, last Saturday, North Korea said it was suspending nuclear and missile tests and scrapping its nuclear test site, and instead pursuing economic growth and peace.

Trump tweeted: “We are a long way from conclusion on North Korea, maybe things will work out, and maybe they won’t – only time will tell.”

Trump interpreted the North’s statement as a pledge to denuclearize: “Wow, we haven’t given up anything & they have agreed to denuclearization (so great for world), site closure, & no more testing!”

However, Kim Jong Un’s announcement did not include a commitment to scrap existing nuclear weapons and missiles, and there are of course doubts he would ever give up the nuclear arsenal his country has been developing for decades.

Plus Kim said North Korea no longer needed to test nuclear bombs or intercontinental ballistic missiles now that his country has the weapons.  In an address delivered by North Korea’s state-run news agency, Kim said halting nuclear testing “is an important process for the world-wide disarmament” and pledged that North Korea wouldn’t share its nuclear know-how with other countries “under any circumstances,” though he also added that exceptions could be made in the event of nuclear threats or provocations against the country. He also said North Korea wouldn’t use its nuclear weapons unless provoked.

Kim celebrated the completion of its nuclear-missile program, calling it a “miraculous victory” that had been “perfectly accomplished...in a short span of less than five years.”

“No nuclear test and intermediate-range and inter-continental ballistic rocket test-fire are necessary...given that the work for mounting nuclear warheads on ballistic rockets was finished,” Kim was quoted as saying.

Ankit Panda and Adam Mount / Defense News

“In truth, Kim’s announcement represents an opening bid that would allow him to keep his nuclear and missile forces intact. Despite his claims, North Korea has not, by most military and technical standards, created an advanced, survivable, reliable arsenal. Suspending testing would effectively prevent the deployment of new, more efficient, or more compact warhead designs.

“But Kim’s proposed cap is only partial. He has said nothing about North Korea’s production of fissile material, which continues today at a frightening pace: The U.S. Defense Intelligence Agency has found that North Korea may be producing enough material for 12 nuclear weapons each year. In his speech, Kim made no mention of submarine-launched missiles, or of short- or medium-range missiles fired from land, which could threaten U.S. allies in the region.  Furthermore, North Korea may circumvent its own limits simply by re-classifying long-range missile tests as space launches, a trick it pulled to scuttle the most recent agreement back in 2012. There are signs of ongoing work on a satellite launcher based on its most advanced ICBM, the Hwasong-15. In short, even if North Korea adheres to the commitments it just set out, it could still produce and test more warheads and missiles.

“Furthermore, North Korea may not adhere to these commitments – it’s easy to break a self-enforced, unverified moratorium as soon as that moratorium becomes inconvenient.  Pyongyang could reverse any of its commitments at a moment’s notice, just as it did in 2006 when it broke a 1999 moratorium on missile launches.

“The key for Trump in his upcoming meeting with Kim, then, will be to convert these commitments from a partial cap to a hard cap.  To do so, American negotiators will have to codify, clarify, and verify Kim’s proposed limits during the summit. This means imposing limits on all missile tests, including satellite-launch vehicles and fixed-engine tests.  Putting a hard cap on the program would make Americans safer if negotiations on a comprehensive agreement drag on into the summer and fall....

“(Pyongyang’s commitments are) hardly worth the paper it is printed on, as North Korea has previously proved willing to export reactor designs and expertise to Syria.  Pyongyang would have to surrender sensitive information about the location and purpose of its nuclear facilities so that U.S. intelligence agencies or international inspectors could narrow their search rather than inspect every piece of cargo that crossed North Korea’s borders. If the United States and North Korea could agree to such limits, this would represent a major accomplishment.”

Finally, about that nuclear test site that Kim said he is closing, two separate groups of Chinese scientists have concluded the site collapsed, putting China and other nearby nations at unprecedented risk of radioactive exposure.

After five nuclear blasts (the last five of Pyongyang’s six overall), Mount Mantap essentially collapsed, with researchers finding the mountain had been turned into fragile fragments, as reported by the South China Morning Post.

“Radioactive dust could escape through holes or cracks in the damaged mountain, the scientists said.”

The findings are to be published on the website of the peer-reviewed journal, Geophysical Research Letters, likely next month.

The mountain’s surface had shown no visible damage after four underground nuclear tests before 2017, but the 100-kiloton bomb that went off on September 3 “vaporized surrounding rocks with unprecedented heat and opened a space that was up to 200 meters (656 feet) in diameter.”

A large section of the mountain’s ridge slipped down into the empty pocket created by the blast.  Scientists reached these conclusions after analyzing data from nearly 2,000 seismic stations.

Japan, like the U.S., has vowed to keep up the pressure on Pyongyang.  “Just because North Korea is responding to dialogue, there should be no reward,” Japanese Prime Minister Shinzo Abe said the other day when he was with President Trump.

Iran: Despite his hard sell, French President Macron said he may have failed in his efforts to persuade President Trump to stick to the Iran accord.

“My view is...that he will get rid of this deal on his own, for domestic reasons,” Macron said at the end of his three-day state visit.

Trump has until May 12 to decide, saying again this week the deal was “insane.”

Tuesday, Trump said there would be big problems if Iran resumed its nuclear program, saying a “bigger” deal was possible but it must be built on “solid” foundations.

“They should have made a deal that covered Yemen, that covered Syria, that covered other parts of the Middle East,” he said.

Trump has long complained that the deal signed by the P5+1 (U.S., Russia, China, France, the U.K. and Germany), and Iran, does nothing to halt Iran’s support for militant groups in the region.

And Trump is demanding the signatories to the pact agree to permanently restrict uranium enrichment, which under the current deal can resume in 2025.

This week, Iranian President Hassan Rouhani said the U.S. and France have no “right” to renegotiate a seven-party agreement, and that Iran would take “important steps regarding our nuclear technology,” though he added the measures would be “peaceful.”

Supreme Leader Ayatollah Ali Khamenei called on Muslim nations to unite against the U.S.

Trump said: “If Iran threatens us in any way, they will pay a price like few countries have ever paid.”

Editorial / Wall Street Journal

“Emmanuel Macron’s state visit to Washington this week was notable for its warm atmospherics, but its significance could be far more substantial. The French President said he’s willing to accept a revised Iran nuclear deal that includes at least some of President Trump’s demands.

“ ‘We want sustainable stability and I believe that the discussions we’ve had together make it possible to open the way, to pave the way, for a new agreement,’ Mr. Macron said Tuesday, surprising many in Europe. The Trump-centric U.S. media gave more attention to Mr. Macron’s remarks a day later that he thinks Mr. Trump still wants to withdraw from the deal by May 12, but that isn’t news.  Progress toward a joint Europe-U.S. revision is.

“Specifically, the French leader appears to be on board with fixing at least two of three giant loopholes in the John Kerry-Barack Obama deal: strengthening inspections at any suspect sites inside Iran, and adding a provision on Iran’s ballistic missiles.  He also seems to have embraced the larger Trump strategy to contain Iran, which includes confronting its record of cyberattacks, human-rights abuses, support for terrorism and military adventurism.

“This is a major advance, and it offers hope that the U.S. and France, Britain and Germany can agree on a revised pact. Contrary to common misunderstanding, Iran, Russia and China wouldn’t have to agree to these changes. The Joint Comprehensive Plan of Action, as the deal is known, isn’t a treaty. Mr. Obama never submitted it for Senate approval because he knew it would be defeated. The deal is essentially a set of assurances agreed to at the United Nations that lack the force of law.

“The U.S. and the French are still negotiating over the range of missiles that would be banned. But we’re told the biggest remaining U.S. disagreement with Mr. Macron is the deal’s sunset provision. To get a deal before leaving office, Mr. Obama agreed to let the pact begin to expire in 2025.

“This is an invitation to Iran to bide its time and restart its nuclear program from a stronger economic position in a mere seven years.  Mr. Trump is right to want to make the deal permanent, and Mr. Macron told Congress Wednesday that ‘Iran shall never possess any nuclear weapons. Not now. Not in five years. Not in 10 years. Never.’  Never is later than 2025.

“The Europeans fear this would cause Iran to renounce the deal and break out to build a bomb. But while the mullahs will protest, Iran has incentives to remain in a revised deal.  The terms are simply too good for Iran even with revisions, and Iran can’t afford the renewal of sanctions if it wants faster growth to create jobs for its restive youth.  Iran needs foreign trade and investment.

“On the sunset provision, Iran could decide to ignore a U.S.-Europe rewrite and wait until 2025 to test the world’s resolve to enforce it.  This is all the more reason not to let this single issue block U.S. and European agreement now.

“The benefits would be considerable.  A revised deal would show Western unity against Russian revanchism and Iranian imperialism. It would show Iran that the Obama-Kerry appeasement was the exception, not a Western consensus.  On the eve of a Trump-Kim Jong Un summit, a Europe-U.S. rewrite would also reinforce Mr. Trump’s demand that North Korea must dismantle its nuclear program to have normal relations with the world....

“Europe has to decide if it wants to unite with the U.S. to make the Iran deal better for world security, or stick with the Obama terms and risk a showdown over U.S. sanctions on Iran and Europe.”

China: Beijing confirmed on Thursday that it had put into service a new missile that Chinese media has dubbed the “Guam killer” for its ability to hit the U.S. Pacific Ocean base with a conventional or nuclear weapon.

China is in the midst of an ambitious modernization of its armed forces, developing stealth fighters, aircraft carriers and advanced missiles as it strives to become a world class military by the middle of the century.

That, along with Beijing’s aggressive stance in the disputed South China Sea and Taiwan, concerns the entire region and Washington.

A Defense Ministry spokesman said the military had begun deploying the DF-26 intermediate range ballistic missile, and while giving few details, said it can attack targets on land or at sea with precision.

As I’ve been noting, China also continues to harass and threaten Taiwan with its air force, circling Taiwan numerous times since April 18 “to improve its ability to safeguard national sovereignty and territorial integrity.”

On a different topic, state news agency Xinhua reported last weekend that China just strengthened its grip on the internet to ensure broader social and economic goals are met, underlining a hardening attitude towards online content.

Xinhua cited President Xi Jinping as saying: “Without web security there’s no national security, there’s no economic and social stability, and it’s difficult to ensure the interests of the broader masses.

“We cannot let the internet become a platform for disseminating harmful information and stirring up trouble with rumors.”

Syria: Presidents Trump and Macron discussed Syria, with Trump reiterating: “We want to come home. We’ll be coming home.  But we want to leave a strong and lasting footprint.”

For now, Macron helped convince Trump to keep U.S. forces in Syria until their mission was “accomplished.”

As for the Douma chemical weapons site, it took 11 days but inspectors did collect some samples as they try to determine whether such weapons were used there on April 7.  No doubt the site had already been sanitized.

Israel: The death toll in weeks of protests on the border between the Gaza Strip and Israel since March 30 is now at least 43, after three more Palestinians were killed when a large group tried to storm the border. The protests have been staged every Friday.

Afghanistan: ISIS claimed responsibility for an attack in Kabul where officials were issuing identity cards as part of the registration process for upcoming (long-delayed) parliamentary elections, with a suicide bomber on foot killing at least 57 people.  The explosion destroyed cars and shattered windows in nearby buildings, part of the deadliest blast in the capital since about 100 people were killed in January by a bomb concealed in an ambulance, and it came after repeated warnings militants could try to disrupt the election process.

This latest attack is a further blow to the credibility of President Ashraf Ghani’s government for once again failing to keep his people safe.

Russia: A senior government official said on Wednesday that there would be no economic growth in Russia without investment generated by preparations for the 2018 FIFA World Cup.  Deputy Prime Minister Arkady Dvorkovich said the work had contributed $14 billion, or around 1 percent, to Russian GDP in the last five years.

Russia’s economy returned to growth of 1.5 percent last year after a two-year downturn brought on by Western sanctions and a collapse in global oil prices.

Russian authorities have been shaming hotels caught jacking up room prices ahead of the World Cup, which runs from June 14 to July 15, with some increasing nightly rates by as much as 5,000 percent.

Random Musings

--Presidential tracking polls....

Gallup: 38% approval for President Trump, 57% disapproval [Apr. 22]
Rasmussen: 47% approve, 52% disapprove

--In  a new Quinnipiac University National Poll, April 25, President Trump received a 39% approval rating, 54% disapproval, compared to a 41-52 split in an April 10 survey.

Voters do approve of Trump’s handling of North Korea by a 52-42 margin, and support 61-30 the military action taken against Syria.

American voters disapprove 69-22 percent of the job Republicans are doing in Congress, and disapprove 66-26 percent of the job Democrats are doing.

In the generic House ballot, Democrats prevail 48-40, 8 points, including 48-36 among independent voters.

Among national leaders, voters disapprove of the job House Speaker Paul Ryan is doing by a 58-33 margin.

--In my state of New Jersey, Democrats have a 19 point advantage over Republicans in the generic House ballot among registered voters, which if it holds could lead to a switch in control of the five congressional seats currently held by Republicans here, including my own congressman, Leonard Lance.  The Monmouth University Poll finds that poor public opinion of Donald Trump leads the list of factors behind the New Jersey GOP’s underlying problems.  The recently enacted federal tax reform plan doesn’t help since it hurts many New Jerseyans.

The House generic vote in New Jersey is significantly wider than the generic House vote edge of 9 points for the most recent Monmouth University national poll, 50% Democrats, 41% Republicans.

Democrats won the House vote in New Jersey in 2016 by 8 points, 53% to 45%, so you can see how the polling at this stage is definitely cause for concern for the elephants.

--Editorial / Washington Post

“Press freedom is a sentinel in a democracy, not only in the watchdog and accountability role but also as an indicator of whether the democracy is healthy. The significance of this year’s World Press Freedom Index, compiled by Reporters Without Borders, is not only that journalists face increasing obstacles but also that democracy in many places is ill.

“ ‘More and more democratically-elected leaders no longer see the media as part of democracy’s essential underpinnings, but as an adversary to which they openly display their aversion,’ say the authors of the survey, which has been published annually since 2002, measuring media freedom in 180 countries. The United States under President Trump fell two notches in the rankings, to 45th overall, in part because of Mr. Trump’s attacks on journalists, including calling them ‘the enemy of the American people,’ and his routine use of ‘fake news’ to respond to critical reporting.

“Separately, Freedom House issued a report, drawing from its previous research, that also sounded an alarm.  ‘As recently as five years ago,’ the report said, ‘global pressure on the media did not appear to affect the United States or the established democracies of Europe in any significant way. Today, populist leaders constitute a major threat to free expression in these open societies.’

“The surveys expose disturbing trends.  ‘The line separating verbal violence from physical violence is dissolving,’ the authors of the Reporters Without Borders survey noted, pointing, for example, to the threat from Philippine President Rodrigo Duterte that reporters ‘are not exempted from assassination.’  The report lays blame on many political leaders who have directed diatribes at journalists, such as President Milos Zeman of the Czech Republic who turned up at a news conference with a fake Kalashnikov rifle inscribed with the words ‘for journalists.’  The index includes a black category dubbed ‘very bad,’ with North Korea at the bottom. There have never been so many countries in the black category, the group said....Among others, the report said press freedom in Russia, ranking 148, and Turkey, at 157, has sunk to levels not seen in more than three decades. Turkey is ‘the world’s biggest prison for professional journalists,’ and Russia has used ‘draconian laws and website blocking’ to pressure the independent media.  China, which ranks 176th, has put in place ever-stricter controls on news and information, and ‘more than 50 journalists and bloggers are currently detained in conditions that pose a threat to their lives.’

“Too often, press-freedom concerns are dismissed as special-interest complaining. They are much more than that. These reports show that when the press is silenced, when journalists are killed, a deeper sickness is afoot. Unfortunately, it seems to be spreading.”

--I watched Sean Hannity’s show on Wednesday, the day Michael Cohen took the Fifth, and Hannity never mentioned the story, but instead made fun of granting “full disclosure” to all his guests that night.  This as stories emerge of Hannity’s extensive real estate transactions, though he denies ever being involved with fraudster Jeffrey Wayne Brock, who has been part of a process that acquired properties at little more than the minimum bid during fraudulent auctions, Brock paying off two men who would attend the auctions but refrained from bidding against him, as reported by The Daily Beasts’ Michael Daly.  Records show Hannity was a beneficiary of the crooked scheme.  The Guardian estimates Hannity’s real estate portfolio at more than 870 properties in seven states, utilizing a large number of shell companies.

Brock, who pleaded guilty to federal bid rigging and fraud charges in 2016, helped Hannity acquire at least 11 properties, according to the Guardian’s Jon Swaine.

At the same time, Hannity has denied he had any direct discussions with the Department of Housing and Urban Development regarding loans for some of his larger holdings.

--James Comey’s book “A Higher Loyalty” had a big opening week, sales topping 600,000 copies, a number that includes print, audio and e-books.  I’m kind of surprised.

--Sacramento police arrested a former police officer for a notorious spree of murders, rapes and burglaries in the 1970s and 80s.  Joseph James DeAngelo, 72, known as the so-called Golden State Killer for 12 murders, 51 rapes and more than 120 burglaries, was identified after new efforts to solve the case, investigators say.

Police had been monitoring the suspect and used “discarded DNA” to match him to the crimes.  Incredible work.

--According to a report from the AAA Foundation for Traffic Safety, hit-and-run crash deaths are rising nationwide, with pedestrians and bicyclists accounting for about 70% of the victims, owing to more people cycling to work.  Motor-vehicle fatalities are at a near-decade-high level, up 61% from 2009 to 2016.

About 68% of fatal hit-and-run victims in 2016 were pedestrians or cyclists.

Of course it’s not just distracted drivers that are adding to the carnage, but it’s distracted pedestrians.  

--Comedian / actor Bill Cosby was found guilty of three counts of aggravated indecent assault by a jury in Norristown, Pa.  He faces years in prison when he is sentenced in 60 to 90 days.  His lawyer, Tom Mesereau, said “the fight is not over” and that they will appeal. Cosby maintains his innocence.

The guilty verdict came less than a year after another jury deadlocked on the charges.

As I watched the news with my mother, she blasted the women, Mom being a Cosby fan.

--Congratulations to the Duke and Duchess of Cambridge on the birth of their child, a boy, Louis Arthur Charles, or more formally His Royal Highness Prince Louis of Cambridge.  The new prince is fifth in line to the throne.

---

Pray for the men and women of our armed forces...and all the fallen.

God bless America....and James Shaw Jr., the Waffle House hero.

---

Gold $1324
Oil $67.97

Returns for the week 4/23-4/27

Dow Jones  -0.6%  [24311]
S&P 500  -0.01%  [2669]
S&P MidCap  -0.4%
Russell 2000  -0.5%
Nasdaq  -0.4%  [7119]

Returns for the period 1/1/18-4/27/18

Dow Jones  -1.7%
S&P 500  -0.1%
S&P MidCap  -0.4%
Russell 2000  +1.4%
Nasdaq  +3.1%

Bulls 48.0
Bears  19.6  [Source: Investors Intelligence]

Have a great week.

Brian Trumbore