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Good Morning. In today’s edition, the Fed stands pat, inside U.S. airlines’ decisions to keep flying the 737 MAX last week, and the triumphant inaugural run of a new ESG fund. |
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The Fed kept interest rates unchanged yesterday and signaled it is unlikely to raise them in 2019—sending the yield on the benchmark 10-year Treasury to its lowest level in over a year. The Fed also put a date on its plan to slow the shrinking of its $4 trillion asset portfolio: It will start in May. In a particularly revealing admission, Fed Chairman Jerome Powell said he is discouraged about inflation, persistently running below the 2% annual rate officials see as healthy. The Fed now believes its monetary policy is back to normal. That should worry you, writes the Journal's Greg Ip. Parse the Fed: Compare the March and January statements. |
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Inside U.S. airlines’ decisions to keep flying the 737 MAX. | | Southwest Airlines installed warning lights in its Boeing 737 MAX 8 cockpits to alert pilots to problems with angle-of-attack indicators, a sensor suspected of contributing to one and possibly two MAX crashes. PHOTO: JOE RAEDLE/GETTY IMAGES |
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Most airline CEOs will say safety is the first responsibility. But when Southwest, American and United decided to keep flying the Boeing 737 MAX after two crashes within five months led carriers elsewhere to stop, it raised the question of whether they were putting revenue and schedules ahead of safety. Three days after the second crash, trailing regulators in much of the rest of the world, the FAA grounded the 737 MAX in the U.S. “The only real factor that we were thinking about was safety,” Southwest CEO Gary Kelly told the Journal. All three airlines say their decisions were largely data-driven. Read more about them. |
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From reporter and Middle Seat columnist Scott McCartney: After two crashes with similar circumstances, fears were building among travelers. The system suspected of causing problems had already been declared by Boeing to be in need of major changes. To many, the prudent course was to stop flying the plane until the concerns were resolved. Were U.S. airlines avoiding grounding for financial reasons? Carriers insist it’s still safety first. Their data, their pilot training and some steps they took on their own, such as Southwest's cockpit warning light, persuaded them it was safe to keep flying. But overreliance on data can leave gaps in understanding. And passenger fears are a factor in decision-making. |
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The Middle Seat newsletter: Get Scott McCartney's weekly look at the ups and downs of airline travel. Sign up here. |
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Alphabet’s Google was hit yet again by European antitrust regulators. The $1.7 billion fine for limiting how some websites could display ads sold by its rivals adds to more than $7 billion levied in two other decisions since 2017 in the nearly decadelong investigation. The commission didn’t order any change in business practices at Google because it says the one at issue ended shortly after charges were filed nearly three years ago. In the past, Google maintained the allegedly anticompetitive practices were legal, but said it ended them to resolve the issue expeditiously. |
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Bayer’s shares were pummeled Wednesday, falling more than 9% after a San Francisco jury found that exposure to the company's Roundup weedkiller was a “substantial factor” in a man's non-Hodgkin lymphoma. Since August, when a jury held Bayer liable in another lymphoma case, its shares have fallen some 35%. In early trading Thursday in Europe, they were down 1.7%. The German chemicals and pharmaceuticals maker still faces suits from 11,200 farmers, gardeners and landscapers, turning its $63 billion acquisition of U.S. agriculture giant Monsanto—meant to bolster Bayer’s fading fortunes—into its biggest potential liability. |
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A new fund from DWS Group, the asset-management business of Deutsche Bank, raised $843 million in a single day—perhaps signaling a step change in investor participation in funds that use environmental, social and governance scores to pick stocks and bonds. Investors have been slow to buy into so-called ESG funds. Unlike older strategies for socially responsible investing, the ESG approach isn’t to ban unloved industries but instead to seek out the companies performing best on issues like pollution and pay parity. $11.6 trillion | The value of assets overseen by U.S. money managers who consider ESG criteria, up from $8.1 trillion in 2016 |
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From reporter Asjylyn Loder: The hype around sustainable investing might make you think it’s something new. But whether called values-based, socially responsible or ESG, it has been around for centuries. The modern version traces to the 1750s, when the Quakers banned members from participating in the slave trade. But Christians are hardly the only group to talk about money in moral terms, which is part of what makes it tricky for asset managers and advisers to navigate. Just look at last year’s controversy about gun divestment. How do you design a strategy that doesn’t offend customers and appeals to a wide audience, but isn’t so anodyne that investors don’t see the point? |
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As the U.S. and China prepared for a new round of trade talks, President Trump said he expected to keep tariffs on Chinese goods in place for a “substantial period of time,” even after a deal. The details of a tariff rollback are one subject of the negotiations. Mr. Trump also said Islamic State would suffer its final territorial defeat by last night, though Pentagon officials said the formal end of the self-proclaimed caliphate likely was days away, not hours. In other politics news: The president is expected to issue an executive order today tying federal grants to colleges and universities to their upholding free-speech standards. U.S. senators came to the defense of the late Sen. John McCain, a recent target of the president’s tweets. The House Judiciary Committee is considering requesting more documents from associates of the president. |
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What We’re Following Jeans Pool: Levi Strauss & Co. is set today to go public for the second time, in one of the largest retail and consumer-products IPOs of the past decade. Unsafe at Any Altitude: Consumer crusader Ralph Nader, whose niece’s daughter was killed in the crash of Ethiopian Airlines Flight 302, is taking on Boeing Ideological Split: Democratic candidates for president, pressured by the party’s base, are divided on how liberal their positions should be. Real-Time: Facebook acknowledged that the gruesome mosques-shootings video revealed gaps in its handling of live broadcasts by users, but pushed back against establishing a time delay. General Election: Five years after a coup swept him to power, Thailand’s junta leader Prayuth Chan-ocha faces his most difficult mission yet: getting voters to support him in Sunday’s elections. |
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Trending Stories at WSJ.com | | Jack Patton and Mike McNamara met the first day of high school 59 years ago and have been friends ever since. PHOTO: DUSTIN FRANZ FOR THE WALL STREET JOURNAL |
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Lifelong friendships are more common among women, but many men wish they had them. (Read) New Zealand moved to ban military-style semiautomatic weapons, assault rifles and high-capacity magazines. (Read) The founder of 8chan—used by the New Zealand shooter to announce his intentions—says the website he created as a bastion of unconstrained speech needs more censorship. (Read) Auto makers are taking on their next challenge: refreshing vehicle software remotely, so people don’t have to drive to the dealership for updates. (Read) |
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What Else We’re Reading Ethiopian Airlines was among the first to install the Boeing 737 MAX 8 simulator—but the captain of doomed Flight 302 had not trained on it. (New York Times) Harvard is being sued over its use of photos of two slaves from 1850 by a Connecticut woman who says they are ancestors of hers. (Associated Press) A labor shortage has Japan’s 24-hour convenience stores struggling to stay open around the clock. (Reuters) Canada’s arrest of Huawei’s CFO at Washington’s request only boosted the tech giant’s global fame, Beijing’s top official in Hong Kong said. (South China Morning Post) |
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Today’s Question and Answer In response to our question about President Trump’s moves to strengthen ties with Brazil: Kevin Ivers, Washington, D.C. A stronger alliance with Brazil is a logical step, and marks a welcome shift away from decades of neglect of the Americas. The non-NATO ally designation is particularly important for President Bolsonaro’s government because it will pave the way for more meaningful collaboration between Brazil’s professional military staff and U.S. authorities on shared national-security concerns, which include balancing the influence of China in the hemisphere. Matt Posthuma, Illinois Brazil is the fifth-largest country in the world, both by land area and population. It has abundant natural resources and a growing middle class. Brazil has a stable democracy, which has elected presidents from both the left and right. Recent anticorruption efforts such as Operation Car Wash have gone a long way in restoring confidence in government among investors and the electorate. Brazil has a diverse culture that has received immigrants from all over the world. Many say that Brazil is quite similar to the U.S. 50 years ago. It is only natural that the U.S. should promote closer relations with Brazil as a trading partner and political ally in the region. Slade Howell, North Carolina Bolsonaro was elected president as a response to the recent corrupt leaders in Brazil, primarily brought on by abuses related to the state-owned oil industry and the pitfalls of socialism. Unlike Venezuela, the change was made before collapse. It is refreshing to have our leaders embrace the president of a country returning to democracy and market economy, as opposed to a philosophy of military regime change and "then what." Question for tomorrow’s 10-Point: What are your thoughts on President Trump’s expected executive order tying federal grants made to colleges and universities to free speech on campus? Email us your comments, which we may edit before publication, to 10point@wsj.com, and make sure to include your first and last name and location. |
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| The 10-Point was the name given to the news column that runs on the front page of The Wall Street Journal. Today’s newsletter was curated and edited by Eleanor Miller (eleanor.miller@wsj.com) in collaboration with Editor in Chief Matt Murray. Let us know what you think by replying to this email. Editor’s note: The 10-Point is now a WSJ member benefit. If you receive our flagship newsletter and are not yet a member, we’ll continue sending it to you for now. To ensure you don’t miss out, we invite you to join us and enjoy the full breadth of scoops, analysis and great storytelling from our journalists around the globe. |
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