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Jan 23, 2019

Democratic Mayor Pete Buttigieg launches 2020 White House campaign

John Whitesides



WASHINGTON (Reuters) - Pete Buttigieg, the Democratic mayor of South Bend, Indiana, launched an underdog 2020 bid for the White House on Wednesday, aiming to stand out as a problem-solving Midwestern outsider who would be the first openly gay nominee of a major U.S. political party.
The relatively unknown Buttigieg, 37, a two-term mayor of the Rust Belt city of about 100,000 people, has argued the party needs new leadership that can appeal to the working-class voters who deserted Democrats in favor of Republican Donald Trump in the 2016 presidential race.
In an email and video to supporters, he sought to embrace fresh solutions for the future, in contrast to Trump’s nostalgia-driven message invoking an America of the past.
“My generation is the generation that experienced school shootings beginning when I was in high school, the generation that fought in the post-9/11 wars, the first generation to have to deal with the reality of climate change, and the first generation not to be better off than our parents materially - if nothing changes,” Buttigieg said.
“Only a forward focus - untethered from the politics of the past and anchored by our shared values - can change our national politics and our nation’s future.”
Buttigieg enters what is expected to be a crowded Democratic field of candidates vying for the right to challenge Trump, the likely Republican presidential nominee, in 2020. The mayor formed an exploratory committee to begin raising money and hiring staff to compete for the Democratic nomination.
He will face a tough task raising money and building a coalition of support in a race that will feature many candidates with greater name recognition and bigger donor networks.
Pete Buttigieg, the Democratic mayor of South Bend, Indiana, U.S. in an undated photo provided January 4, 2019. City of South Bend, Indiana/Handout via REUTERS
Other Democratic rivals for the nomination include U.S. Senators Elizabeth Warren, Kamala Harris and Kirsten Gillibrand as well as U.S. Representative Tulsi Gabbard and former San Antonio mayor and U.S. housing secretary Julian Castro.
On Wednesday, Buttigieg acknowledged the odds but touted his unique candidacy, saying, “At a moment like this, underdog campaigns will go further than the establishment would normally allow, when it comes to bold ideas that can truly meet the threats and opportunities coming our way.”
Buttigieg began building a national profile in 2017 with an unsuccessful run for chairman of the Democratic National Committee. Former President Barack Obama mentioned him in an interview shortly before leaving the White House as a young Democrat with a bright future.
Iowa's extreme abortion ban is struck down
The Harvard graduate and former Rhodes Scholar returned to his hometown of South Bend and was elected mayor in 2012 at the age of 29. He served a seven-month Naval Reserve tour in Afghanistan while mayor and came out as gay in a 2015 column for the local paper. He married in June 2018.
As mayor of South Bend, a blue-collar town that is home to the University of Notre Dame, Buttigieg made redevelopment a top priority and was named mayor of the year in 2013 by the website GovFresh.com. He signaled his White House run in December when he announced he would not seek a third term as mayor.
Reporting by Susan Heavey and Ginger Gibson; Editing by Catherine Evans, Colleen Jenkins, Jonathan Oatis and Steve Orlofsky

Source: Reuters

Stocks making the biggest moves premarket: Comcast, Walmart, IBM & more

Peter Schacknow



Check out the companies making headlines before the bell:

ComcastThe NBCUniversal and CNBC parent reported adjusted quarterly profit of 64 cents per share, beating consensus estimates by 2 cents a share. Revenue also beat Street forecasts and the company increased its dividend by 10 percent.
United TechnologiesThe maker of Carrier air conditioners, Otis elevators, and a wide variety of other industrial products reported adjusted quarterly profit of $1.95 per share, well above the consensus estimate of $1.53 a share. Revenue also came in above analysts' forecasts, boosted by the company's November acquisition of defense contractor Rockwell Collins.
Procter & Gamble – The consumer products company beat estimates by 4 cents a share, with adjusted quarterly profit of $1.25 per share. Revenue topped analysts' forecasts, as well, helped in part by strong demand for P&G's beauty products. Organic sales were up 4 percent, stronger than the 2.6 percent consensus estimate.
Restaurant Brands International – The parent of Burger King, Tim Hortons, and Popeyes named current Burger King head Jose Cil as its new chief executive officer. He replaces Daniel Schwartz, who will become executive chairman.
Synchrony Financial – The financial services company earned $1.09 per share for its latest quarter, 16 cents a share above estimates. Revenue also beat forecasts. Synchrony also announced it had reached an agreement to extend its partnership with Walmart's Sam's Club, continuing to manage and service the Sam's credit-card portfolio. It also settled a lawsuit with Walmart over the sale of the Walmart loan portfolio.
Walmart – Morgan Stanley upgraded the retailer's stock to "overweight" from "equal-weight," saying Walmart will be one of the few retailers to grow earnings this year.
Merck – The drugmaker's stock was downgraded to "market perform" from "outperform" at BMO Capital, which is concerned about Merck's overdependence on its cancer treatment Keytruda.
Pfizer – UBS downgraded Pfizer to "neutral" from "buy," noting Pfizer's valuation and a long-term "patent cliff."
IBM – IBM reported adjusted quarterly profit of $4.87 per share, 5 cents a share above consensus. Revenue also beat forecasts and IBM gave strong 2019 guidance on continued strength in its services business.
TD Ameritrade – TD Ameritrade beat estimates by 10 cents a share, with adjusted quarterly profit of $1.11 per share. The online brokerage's revenue also came in above forecasts. Profit more than doubled from a year earlier thanks in large part to the acquisition of Scottrade.
Capital One – Capital One reported adjusted quarterly profit of $2 per share, missing the consensus estimate of $2.37 a share. The bank's revenue also fell shy of forecasts, and an 81 percent increase in marketing costs had a significant bottom line impact.
Johnson & Johnson — J&J is pursuing an acquisition of surgical robotics firm Auris Health, according to a Bloomberg report. J&J is said to be willing to pay a premium to the $2 billion valuation that emerged from the latest Auris funding round.
ASML Holding – ASML warned of weak first-quarter sales, with a number of the chipmaker's customers delaying their orders into the second half of this year.
Aphria – Aphria is the target of a hostile takeover bid from U.S. cannabis rival Green Growth Brands. Green Growth said it plans to make a second all-stock bid for the Canadian company worth about $1.76 billion. Aphria said the bid is substantially identical to the prior bid, and urged its shareholders to take no action while a board committee considers the offer.
Viacom Viacom announced the acquisition of live-TV streaming service Pluto TV for $340 million in cash.
Walgreens Boots Alliance – Walgreens will pay more than $269 million to settle a number of federal and state lawsuits that had accused it of overbilling federal health-care programs.
Apollo Global The private-equity firm agreed to buy European packaging company RPC for $4.28 billion in cash. It had been reported yesterday that the two sides were close to a deal.

Analysis | The Cybersecurity 202: FBI cyber investigations hit hard by the shutdown

By Joseph Marks


THE KEY

The FBI headquarters in Washington on Nov. 1, 2017.(J. David Ake/AP)
The partial government shutdown is hampering the FBI’s ability to investigate and prosecute cyber criminals and to combat digital national security threats, current and former agents said Tuesday.
With the shutdown now in its second month, the vast majority of FBI agents are still on the job and working without pay. But many of the resources they need for cyber investigations are missing in action, the agents said — including money to pay for wiretaps, subpoenas and other tools that form the bedrock of most digital investigations.
In one case, an FBI cyber agent didn’t have money to pay two confidential informants who provide intelligence about cyber assaults by U.S. adversaries, according to a report released yesterday by the FBI Agents Association. In another case, a cyber investigation was stymied because the agent in charge couldn’t coordinate with furloughed workers at another agency.
"These delays slow down our work to combat criminal activity on the [internet] and protect the American people," that agent said, as quoted in the report. It featured testimonials from some of the 14,000 current and former agents the FBIAA represents about how the shutdown is affecting their operations and personal lives.
Many investigations into cybercriminal gangs, hacktivist groups and even nation state-backed hacking operations are probably on hold during the shutdown, edged out by investigations where lives might be more imminently at stake, Austin Berglas, a former top cyber official in the bureau’s New York office, told me.
“If the head of an office understands he’s got dwindling funds to support investigations, he’s going to devote resources to the top priorities of the bureau: terrorism and significant counterintelligence investigations,” Berglas told me. “A massive botnet attack or a massive breach of credit card data is going to take a back seat to that.”
The FBIAA report details hard times across the bureau, ranging from counterterrorism sources who have gone mum because there’s no money to pay them to agents who had to back out of assisting local police investigating violent street gangs.
The funding impasse probably is hitting cyber investigations harder, however, because they tend to be more expensive than other operations, Berglas told me.
That’s because they often rely on troves of court-ordered digital evidence held by multiple Internet service providers and other tech companies, and the FBI has to compensate the companies for retrieving all those records. That can be a lot costlier than an agent tailing a drug dealer, he said.
The cyber divisions problems won't end when the shutdown does.
The bureau will also face significant difficulty resuming cyber operations after weeks in limbo, says Anthony Ferrante, former chief of staff for the FBI’s cyber division. After the October 2014 shutdown, Ferrante told me in an email, it took months before the bureau was processing cases at normal speed again.
“A longer shutdown could result in an even lengthier recovery time — and therefore greater exposure to threats at all levels of government,” Ferrante, who now leads the cybersecurity practice at FTI Consulting, told me.
That slowdown could be particularly damaging because the FBI is trying to meet an ambitious goal of “deterring, detecting, disrupting, and dismantling,” 8,400 computer crimes during the 2019 fiscal year. That’s about 1,000 more crimes than the bureau dealt with in 2018 — a year that didn’t include a weeks-long slowdown in operations.
The FBI declined to comment on whether the shutdown might affect that goal.
In the longer term, the shutdown could be a devastating blow to workforce morale and permanently impair the bureau’s ability to recruit top cyber talent. The Agents Association painted a bleak picture during a news conference of young agents unable to afford to feed their families and longer-serving agents delaying things including braces for children.
Berglas, an executive at the cybersecurity firm BlueVoyant, has fielded several recent calls from FBI cyber agents looking for private-sector jobs, he told me.
“Agents who are technically savvy and able to investigate very technical crimes are already wanted by the private sector at salaries that dwarf what they’re making at the bureau,” Berglas said. “Now, it’s been a month since the shutdown and they’ve already missed a paycheck and they’re often living paycheck to paycheck. That’s not just cruel, it’s a massive morale hit.”
You are reading The Cybersecurity 202, our must-read newsletter on cybersecurity policy news.
Not a regular subscriber?

PINGED, PATCHED, PWNED

The Department of Homeland Security logo in Washington on May 11, 2017. (Salwan Georges/The Washington Post)
PINGED: DHS issued an emergency directive to civilian agencies Tuesday requiring them to protect their data from being hijacked by hackers. The move came after attackers intercepted web and email traffic at “multiple executive branch agencies,” my colleague Ellen Nakashima reported.
It’s not clear how many agencies were infected, a senior official told Ellen, but no Defense Department or classified networks were affected.
The hacking campaign targets the “Domain Name System” (DNS), which translates Web or domain names into IP addresses. It was first spotted last fall by private-sector firms including Cisco and FireEye and was aimed then at government and industry targets in the Middle East.
The U.S. government response to the hacking campaign will be affected by furoughs of information technology staff due to the ongoing government shutdown. Here’s a take from Alex Stamos, former chief information security officer at Facebook, who’s now teaching at Stanford:
In all seriousness, everybody is going to come back to work, look at their logs and we are going to find out how our adversaries took advantage. The long-term impact of driving away qualified workers from the USG will be harder to measure.
— Alex Stamos (@alexstamos) January 22, 2019

Director of National Intelligence Daniel Coats at the White House in Washington on Aug. 2, 2018. (Jabin Botsford/The Washington Post)
PATCHED: The 2019 National Intelligence Strategy released Tuesday by Director of National Intelligence Daniel Coats warned that U.S. adversaries are increasingly taking advantage of technological progress to pose “new and evolving threats” in cyberspace, computing and other areas. “Cyber threats are already challenging public confidence in our global institutions, governance, and norms, while imposing numerous economic costs domestically and globally,” according to the document, which provides strategic guidance to the U.S. intelligence community for the next four years. “As the cyber capabilities of our adversaries grow, they will pose increasing threats to U.S. security, including critical infrastructure, public health and safety, economic prosperity, and stability.”
The document also said that the U.S. intelligence community plans to improve its understanding of adversaries' cyber operations, increase the production of cyberthreat intelligence and seek to prevent and counter malicious cyber activities via diplomatic, military, economic tools and other means. The intelligence community “must continue to grow its intelligence capabilities to meet these evolving cyber threats as a part of a comprehensive cyber posture positioning the Nation for strategic and tactical response,” according to the document.
“The intelligence strategy is not a direct rebuke of the president’s policies,” according to The Washington Post's Shane Harris. “But it is the latest expression of intelligence leaders’ intention to pivot away from a focus on combating terrorism, which has been their central concern since 2001, toward countries that threaten the United States on a geopolitical scale, chief among them Russia, China, North Korea and Iran.”
PWNED: A former top DHS cybersecurity official says it is “likely” as the shutdown drags on that the federal government is not working with state and local officials to boost the security of upcoming elections. Suzanne Spaulding, a former undersecretary at DHS in the Obama administration, wrote in a post published by the Center for Strategic and International Studies that the government is not as equipped to collaborate with operators of critical infrastructure to patch vulnerabilities or perform other important cybersecurity tasks. “With a cyber workforce that is understaffed in the best of times, we are losing ground against our adversaries every day that we operate at less than full strength,” said Spaulding, now a senior adviser for homeland security at CSIS.
PUBLIC KEY

Acting attorney general Matthew G. Whitaker in Kansas City, Mo., on Dec. 6, 2018. (Orlin Wagner/AP)
— The House Judiciary Committee plans to ask acting attorney general Matthew G. Whitaker when he appears before the panel next month whether he has ever been briefed about special counsel Robert S. Mueller III’s investigation into Russian interference in the past U.S. presidential electionEllen reported. If Whitaker has indeed been briefed on the probe, the committee also plans to ask whether he shared information with President Trump or his lawyers.
“The committee sent a list of questions in advance to Whitaker on Tuesday,” Ellen wrote. “Its chairman, Rep. Jerrold Nadler (D-N.Y.), noted in his letter that the questions ‘relate to whether there has been interference with the special counsel’s work. They do not relate to the underlying substance’ of Mueller’s investigation, he wrote.”
— More cybersecurity news from the public sector:

The news will intensify a diplomatic standoff with China that has officials and scholars worried.
Anna Fifield, Emily Rauhala and Ellen Nakashima
PRIVATE KEY

A Surface Laptop computer at Microsoft's main campus in Redmond, Wash., on April 20, 2017. (Mike Kane/Bloomberg News)
— The top five industries that were targeted by cyberattacks last year were the computer and electronics industry, health care, business services, the Internet and software sector and manufacturing, according to a report released today by the cybersecurity company Carbon Black. The company also said in its Global Threat Report that by the end of 2018, “China and Russia were responsible for nearly half of all cyberattacks.”
— Tech giants such as IBM, Intel and Microsoft as well start-ups are researching a way to encrypt data while it is in use, according to CyberScoop's Jeff Stone. “This kind of security, known as homomorphic encryption, would mark a significant upgrade over current forms of encryption, which secure data while it’s stored or while it’s moving through a connection,” Stone reported. “Homomorphic encryption would better protect users who are using internet searches and accessing stored credit numbers as well as businesses that are sharing proprietary data as part of information sharing programs.”
— More cybersecurity news from the private sector:

Marriott CEO Arne Sorenson offered further clarity on the data breach the company announced in November.
CNBC

To clamp down on the spread of rumors, WhatsApp is restricting message forwards to five times for users after testing in India indicated it was effective.
Hamza Shaban
SECURITY FAILS

Heavy traffic in Nashville on June 26, 2015. (Mark Humphrey/AP)
— Many automatic license plate recognition (ALPR) cameras — which are mostly controlled by police and government agencies — have weak security protections and some of those devices are leaking sensitive information about vehicles and drivers, according to TechCrunch’s Zack Whittaker. “In the course of a week, TechCrunch found more than 150 ALPR devices from several manufacturers connected to and searchable on the internet,” Whittaker reported. “Many ALPR cameras were entirely exposed or would have been easily accessible with little effort. Of the ALPR cameras we identified, the majority had a default password documented in its support guides.”
THE NEW WILD WEST
— Cybersecurity news from abroad:

China's cyber watchdog said on Wednesday it had deleted more than 7 million...
Reuters

A law passed last month allows the authorities to compel tech companies to build tools to bypass their products’ encryption. It has global implications.
The New York Times
ZERO DAYBOOK
Coming soon:
EASTER EGGS
FBI says ongoing shutdown hinders drug and gang crime operations:
President Trump spins asylum restrictions as humanitarian relief | Fact Checker:
Ice disk forms in Maine river:

Markets: Lockstep Moves Stoke Fears of Further Volatility

The Wall Street Journal.
Markets Bull logo.
Markets
Greetings. I'm Amrith Ramkumar, breaking down the latest in financial markets.
Stock futures are edging up after the Dow industrials slid more than 300 points Tuesday, snapping a four-day winning streak. IBM shares are higher premarket after the company beat on earnings late yesterday. 
We're also parsing recently-released results from Comcast, Procter & Gamble and United Technologies. Meanwhile, Ford will release its latest numbers after the closing bell following last week's profit warning
Before we see if stocks can rebound, Ira Iosebashvili and I look at the significance of rising correlations across asset classes. 

Markets in a Minute

Markets Data

Overnight Developments

Risk Assets Move in Tandem, Unnerving Investors

By Ira Iosebashvili and Amrith Ramkumar
Risky investments have continued moving in lockstep lately, raising hopes that this year’s nascent rebound will continue but also fueling worries that momentum could once again reverse.
Correlations across assets have hit their highest level in almost a year, with the S&P 500, the 10-year U.S. Treasury yield and U.S. crude oil moving in tandem in nine of the last 12 sessions. A six-day run of declines for the asset classes earlier this month was the longest streak since June.
Rolling correlations between the S&P 500 and the S&P GSCI commodities index, 10-year Treasury yield and the MSCI All Country World ex U.S. index have all stayed at or above 0.8 in recent weeks for the first time since early last year, according to a Dow Jones Market Data analysis of 50-day periods.
Correlation is measured on a scale of minus-1 to 1. A reading of minus-1 means two assets are moving in opposite directions, while a correlation of 1 means they are moving in tandem.

Worries over global growth resurfaced this week, pushing stocks, oil and Treasury yields lower Tuesday. The International Monetary Fund a day earlier cut its outlook for world economic growth, while official data showed China’s economy expanded at its slowest pace in nearly three decades last year.
The moves have caught investors’ attention for several reasons. Such patterns have come near major market turning points in the past, making them an important signal to investors trying to gauge whether this year’s early rally in stocks could turn into a more sustained rebound after 2018’s steep decline.
Others are worried the moves indicate that investors have loaded up on similar bets across a broad range of asset classes, setting the stage for a sudden unwind of positions once correlations break down and computer-driven trading models try to buy or sell all at once.
Such a scenario unfolded in 2015 and 2016, when worries over China’s economy and recession fears triggered sharp declines across markets. While those drops were eventually followed by rallies in stocks, the whipsawing markets hurt wrongly positioned investors.
“The risk here is that all of your market positions become the same trade,” said James Bianco, head of the Chicago-based advisory firm Bianco Research. “You’re doing poorly if you’re on the wrong side of that.”
Kenny Jimenez contributed to this article.

Market Facts

  • Analysts have lowered their earnings-per-share estimates for S&P 500 companies in the first half of 2019 by 4.5%, the largest such decrease in four years, according to FactSet.
     
  • Shares of Stanley Black & Decker fell 15% Tuesday, their largest one-day drop ever, after the tool maker reported a loss in its fourth quarter amid higher costs, currency headwinds and pressure from tariffs.
     
  • On this day in 1895, the New York Stock Exchange recommended that listed companies should publish annual financial statements and distribute them to shareholders.

Key Events

The World Economic Forum annual meetings are in Davos. You can follow the Journal's full coverage here.
The Richmond Fed manufacturing survey for January is due at 10 a.m. ET. 

Must Reads

Trade talks between President Trump and President Xi of China will help shape the outlook for 2019./PHOTO: XINHUA/PANG XINGLEI GETTY IMAGES
The world is bracing for slower growth. China’s trade dispute with the U.S., Brexit, Italian fiscal troubles and a fall in German industrial production are all signs of the sweep of a synchronized global slowdown.
U2’s Bono and TPG are launching a company to measure “impact investments.” The U2 frontman and his business partners at the U.S. private-equity firm announced a new company called Y Analytics, which will use a method they developed to measure social and environmental change created by investments.
A Wall Street backlash has sunk a plan to transform the swaps market. The chairman of the Commodity Futures Trading Commission plans to walk away from a proposal he supported on derivatives-market changes after pushback from big financial firms including Goldman Sachs and Citadel Securities.
Brexit delays are enticing sterling investors to rejoin the market. The British pound has become more appealing to some investors as they bet that the probability of extending the Brexit negotiating period, or a second referendum on the U.K.’s divorce from the European Union, is becoming more likely.
Silicon Valley’s unbridled optimism is getting a fresh reality check. Startup investors and company founders warn that the unchecked growth of the past several years could be hitting a limit. A rout of publicly traded tech companies is fostering newfound restraint.
Market volatility is testing UBS’s pivot to the ultrarich. Swiss bank UBS said it swung to a profit in the fourth quarter but missed analysts’ expectations, as volatile financial markets weighed on its wealth-management unit.
No pay stub? No problem. Unconventional mortgages are making a comeback. Lenders are turning to borrowers with harder-to-document finances, helping drive growth in the kind of home loans that were panned for their role in housing meltdown.

What We've Heard on the Street

“The decline in mortgage rates helps, but won’t be enough to get housing’s recovery going again.”
—Heard on the Street columnist Justin Lahart

Stocks to Watch

IBM: The tech giant swung to a profit in the fourth quarter despite posting a second straight quarterly drop in revenue. 
Capital One: The company missed revenue expectations in the latest quarter. Shares of the bank have risen 10% this year, though they are still down 14% over the past six months. 
TD Ameritrade: The brokerage firm topped analysts' profit estimates in the latest quarter despite the market turbulence in the final three months of 2018.

Real Time Economics: Business Executives Have the Jitters.

The Wall Street Journal.
Percentage logo.
Real Time Economics
The partial government shutdown enters its 33rd day, the World Economic Forum grapples with heightened global uncertainty and the U.S. housing market looks poised for another rough year. Good morning. Jeff Sparshott here to take you through key developments in the global economy. Let us know what you think by replying to this email.
 

Unprecedented Uncertainty...

Business executives are jittery. Political paralysis in major developed economies, frayed trading links and concerns about concentration of corporate power are weighing on the annual World Economic Forum. While many corporate bigwigs in Davos put on a brave face and said the economy has overcome the short-term challenges, there was a brooding sense that major risks lie ahead, Alex Frangos and Deborah Ball report.
“Whether you’re looking at global trade, the government shutdown, the state of the economy and politics,” the uncertainty is unprecedented, said Afsaneh Mashayekhi Beschloss, chief executive of investment firm RockCreek, which manages $14 billion in assets.

...But No Imminent Recession

That doesn’t mean a recession is about to hit. But the global economy no longer appears poised for a breakout, Greg Ip writes from Davos. The short-term trigger is clear enough: trade conflict and monetary tightening. More broadly, much of the world appears to be stuck in a low-growth equilibrium. The main suspects: slowing labor force and productivity growth. That's helped push the “neutral” interest rate–high enough to contain inflation, low enough to avoid recession–much lower than before. And that's why many suspect the Federal Reserve may be done raising rates for now. Central banks need to proceed carefully: in a low-growth world, a little bit of monetary tightening can go a long, and painful, way. 

What to Watch Today

The World Economic Forum annual meeting are in Davos. You can follow the WSJ's coverage here
Eurozone consumer confidence is out at 10 a.m. ET.


The Richmond Fed manufacturing survey for January is out at 10 a.m. ET.

Top Stories

Shutdown Vote


The Senate is scheduled to vote Thursday on rival proposals to end the partial government shutdown. The votes will come one day before hundreds of thousands of federal employees will miss their second paycheck.
Fallout: The FBI Agents Association says lack of funds is hindering federal law-enforcement operations. The Consumer Product Safety Commission has stopped monitoring incoming shipments of goods that could pose a safety hazard. U.S. Federal Courts may be forced to halt funded operations by Jan. 31. Some federal employees are considering a switch to the private sector. Follow the WSJ's latest coverage here.

No One's Home

Home sales tumbled in December to their weakest level since 2015, ending a difficult year at a new low and offering fresh evidence that the housing market could be in for a bumpy ride in 2019, Laura Kusisto and Sarah Chaney report. Home sales were weighed down by a surge in stock-market volatility, uncertainty as the government shutdown began and rising interest rates. Housing also suffered from high home prices and a dearth of starter homes in major markets.

Back to School

Los Angeles teachers will return to work Wednesday after reaching an agreement to end a weeklong strike that upended education for half a million students. The pact included a 6% raise, additional staffing at schools, and a reduction to class sizes, covering the union’s major demands, Nour Malas and Tawnell D. Hobbs report.
In the last year, teachers in states including North Carolina, Arizona and West Virginia have gone on strike to demand higher pay and other changes, winning average pay increases of between 5% and 20%. Teachers unions in Denver and Oakland, Calif. are currently locked in disputes with their districts and threatening to strike within the next month.

Gaming the System

Company-ratings website Glassdoor has become an important arbiter of employee sentiment in today’s  job market. A Wall Street Journal investigation shows it can be manipulated by employers trying to sway opinion in their favor, Rolfe Winkler and Andrea Fuller report.
Whom to trust? Glassdoor’s problem echoes the challenges faced by other online rating platforms trying to ensure their rankings are real. Amazon.com, Yelp and TripAdvisor have all had to fend off attempts to game reviews and ratings. 

Do You Hear What I Hear?

Workers tasked with listening to machines to identify potential breakdowns are retiring. They're being replaced with better ears. Anheuser-Busch InBev, the world’s largest beer maker, is using low-cost sensors and machine learning to detect ultrasonic sounds—beyond the grasp of the human ear—to predict when machines need maintenance. Sensors have been used for predictive maintenance in the past but advances in processing now enable companies to collect and analyze real-time sensor data, Sara Castellanos reports.

Overnight News

China’s central bank injected 257.5 billion yuan ($37.8 billion) into to the nation’s big and mid-sized banks as a way to boost their lending to small private businesses. The targeted medium-term lending facility is designed to provide cheaper funding for banks and help goose a slowing economy. Wednesday’s operation was its first, Grace Zhu reports.
Japan’s December exports had their largest year-over-year fall in more than two years on a sharp drop in demand from China. That sent Japan’s trade balance in 2018 into deficit for the first time in three years, Mayumi Negishi reports.
The Bank of Japan stood pat on policy at its first meeting of 2019, holding short-term interest rates at minus 0.1% and its target for 10-year government bond yields at about zero. The decision came despite downward revisions to its inflation forecast, suggesting the bank is in no hurry to reach its 2% target, Megumi Fujikawa reports.

Quote of the Day

What scares me the most longer term is that we have limitations to monetary policy, which is our most valuable tool. At the same time, as we have greater political and social antagonism. So the next downturn in the economy worries me the most.
Ray Dalio, founder of Bridgewater Associates, at the World Economic Forum

What Else We're Reading

Taxes shouldn't just be about revenue. "The point of high top marginal income tax rates is to constrain the immoderate, and especially unmerited, accumulation of riches. From the 1930s to the 1980s, the United States came as close as any democratic country ever did to imposing a legal maximum income," UC Berkeley’s Emmanuel Saez and Gabriel Zucman write in The New York Times.
Traditional data sources underestimate global wealth inequality. "In a country like Norway, accounting for hidden assets increases the wealth of the top 0.01% by more than 25%. Because most Latin American, and many Asian and European economies own much more wealth offshore than Norway, the results found in Norway are likely to be lower bound for most of the world’s countries," Gabriel Zucman writes in a National Bureau of Economic Research working paper
 

Up Next: Thursday

The World Economic Forum annual meeting are in Davos. You can follow the WSJ's coverage here.
The European Central Bank releases a policy statement at 7:45 a.m. ET.
U.S. jobless claims are expected to rise to 218,000 from 213,000 a week earlier. (8:30 a.m. ET)
Markit's U.S. flash manufacturing and services indexes for January are out at 9:45 a.m. ET.
The Conference Board's leading economic index for December is expected to fall 0.1%. (10 a.m. ET)
The Kansas City Fed's manufacturing survey for January is out at 11 a.m. ET.