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Jan 2, 2019

The 10-Point : A Guide to the Day's Top News

Wall Street Journal.

Today's guide to the WSJ
Good Morning. In today’s edition, bruised markets begin a new year, North Korea’s Kim extends a peace overture to the U.S., pharmaceutical companies raise prices, and more.
A battered market limps into the new year, with U.S. investors’ headlong retreat threatening the nearly 10-year bull run. Wednesday, Asian markets logged a miserable start to 2019 following weak economic data from China, while stocks in Europe were down in early trading. Futures pointed to lower openings for the Dow industrials and S&P 500.
  • In the largest monthly exodus since at least 1992, investors yanked a net $75.5 billion from U.S. mutual funds and exchange-traded funds in December. But some retail investors are looking to hold on through the volatility and even take advantage of the rout.

President Trump invited congressional leaders to a bipartisan meeting Wednesday, ramping up pressure on Democrats to end an impasse over border-wall funding that has shut down part of the government.
  • It wasn’t immediately clear that Democratic congressional leaders would take part. The party’s leverage stands to grow Thursday, when it officially takes control of the House.
  • Congressional aides also said it might be difficult for some of the eight invited Republican and Democratic leaders to attend, given that they are returning to Washington from the holidays.
As the partial shutdown stretches on, the financial strains grow for some 380,000 federal employees on unpaid leave and 420,000 more working without pay.
From reporter Natalie Andrews:
After a week of no action, there could be some movement on Capitol Hill on day 12 of the shutdown, but don’t expect a deal. Lawmakers will start arriving in Washington and there may be a briefing at the White House, though Democrats are already looking ahead to Thursday’s opening of the new Congress, where they plan to vote on spending bills and send the legislation to the Senate.
In a New Year’s overture, North Korea’s Kim Jong Un said he is willing to meet with President Trump again.
Kim Jong Un delivered his New Year’s address with his grandfather and father peering over his shoulders. PHOTO: KRT/ASSOCIATED PRESS
In the annual speech, the leader said his country is refraining from producing nuclear weapons, a gesture some experts interpreted as a potential opening for resuming talks.
  • While North Korea hasn’t tested nuclear weapons or missiles since Mr. Trump’s Singapore meeting with Mr. Kim in June, there hasn’t been any discernible progress toward an agreement.
  • Some veterans of North Korea talks said Mr. Kim is seeking a drawn-out process that delivers some sanctions relief at the start, while he still hangs on to his nuclear arsenal.
  • Mr. Trump tweeted, “I also look forward to meeting with Chairman Kim who realizes so well that North Korea possesses great economic potential!”
From reporters Michael R. Gordon and Andrew Jeong:
Experts have pored over the address in search of hints about the secretive regime. Mr. Kim cast himself as seeking dialogue with other nations and added a new wrinkle by announcing Pyongyang would refrain from producing nuclear weapons or selling nuclear arms and technology. Until now, the moratorium applied to nuclear tests and missile launches. U.S. negotiators must determine whether it covers the production of fissile material or just the assembling of warheads and bombs. Their conclusion may determine whether there will soon be a second summit between Mr. Trump and Mr. Kim—who also warned he could seek a “new path” if the U.S. continues its sanctions and pressure.
More than three dozen pharmaceutical companies raised prices on hundreds of drugs in the U.S. as of Jan. 1. Allergan is setting the pace with increases of nearly 10% on more than two dozen products.
  • Many increases are relatively modest, as the industry faces growing public and political pressure over prices. Yet a few are particularly high, including on some generics.
  • Overall, the increases, which average 6.3%, continue to exceed inflation. They affect “list prices,” which almost no patient pays because they don’t take into account rebates, discounts and insurance payments.
Tariff exclusions are sowing confusion. Steel importers are winning most requests to avoid paying tariffs on products they say they can’t find in the U.S., but the process is riddled with inconsistencies, according to manufacturers and importers.
Meanwhile, the EU’s large trade surplus with the U.S. is posing a risk to the 2018 tariff truce between the two. 
  • Negotiators missed a self-imposed November deadline to deliver quick results on nontariff barriers. Talks on a broader free-trade deal appear doomed as the two sides spar over the scope of any pact.
  • U.S. Trade Representative Robert Lighthizer is slated to meet EU Trade Commissioner Cecilia Malmström in Washington on Jan. 9.
Rewards credit cards gained a fanatic following, but now banks are pulling back.
Big banks calculated that ultra-premium rewards would encourage card users to spend more, earning the banks more interest and boosting their returns. They calculated wrong. Instead, consumers have figured out how to game the system.
  • Rewards costs in the third quarter were up an average of 15% from a year earlier at Bank of America, Citigroup, JPMorgan, U.S. Bancorp and Wells Fargo, one analyst estimated.
What Were Following
O Presidente: Jair Bolsonaro was sworn in as the first right-wing president elected in Brazil since military rule ended 30 years ago.
Tourist Trap: The family of an American detained in Russia said he was traveling for a wedding and denied he was involved in espionage.
Rule of Law: Taking effect Jan. 1 in various states and cities: gun regulations spurred by last year’s school shooting in Parkland, Fla., restrictions on plastic straws and foam containers, the gender “X” birth certificate and more.
China Games: Beijing ended a freeze on videogame approvals, though regulators left industry giants Tencent and NetEase out in the cold when giving the first group the green light.
Trending Stories at
The Dry January effect: Research shows that giving up booze for a month can have lasting health benefits. (Read)
Atlanta’s strategy for drawing more young workers includes covering highways with acres of green park land. (Read)
Brazil has an idea to fix rampant gun violence: more guns. (Read)
The leaders of China and Taiwan sparred over the prospects of unifying the two territories, with Beijing’s offer to accommodate the island’s democratic system swiftly rebuffed by Taipei. (Read)
The most talented American soccer player of his generation is now the most expensive American soccer player of all time. (Read)
What Else Were Reading
In the race for content, Hollywood is buying up podcasts. (New York Times)
An 11-month-old baby was rescued after nearly 36 hours in frozen rubble from a collapsed apartment building in the Russian city of Magnitogorsk. (Associated Press)
Today’s Question and Answer
In response to our question about China’s push for supremacy in space:
John Greholver from Washington said: “Good. I remember Sputnik and the dismay and worry this caused us. The Communist government of Russia turned out to be no match for a free-market U.S.A. that was finally challenged to step up its game. We have lost so much of that spirit in the chaos caused by our ascent to unmatched prosperity. We need something to force us to remember who we truly are, and why we are, to a world suffering from their own governments seeking absolute control over their people and the world.”
Rich Irwin in Ohio wrote: “We challenged the Soviet Union in the race to the moon. We won. We then gutted the space program. We now ride Russian rockets to ISS. I don’t think we are much of a challenge to the Chinese.”
Frank Janecek in Alabama said: “If America can’t compete in space we don’t deserve to be there. Let the free market take over the race and see what we can do. I think this will be good for both countries. Imagine the world today if only the Spanish had explored the oceans. It was competition from Great Britain and other powers that led to the world as we know it.”
David P. Wisla in Illinois shared: “We were the pre-eminent, dominant masters of space and we let it slip. We had no competition, funding slowed and the boldest we have been involved telescopes. Useful yes, but not the groundbreaking discoveries that should have been. It is vital for our national security that we again become the clear leader in space. It is a challenge, in my humble opinion, that we as a nation cannot ignore. Costly? Most certainly, but most certainly less than ignoring the challenge and allowing said totalitarian state mastery of our very skies. If that doesn’t scare you, you’re probably brain dead. Can we win? Certainly. I mean, Mr. Xi’s ‘One Belt, One Road’ scam isn’t doing so well. And they are spending a lot of money on internal cybersecurity. With a strong national will committed to keeping us secure there is no doubt in my mind that we can again lead the way in space.”
Question for tomorrow’s 10-Point: Going back to our article above, what are your thoughts on pharmaceutical companies’ price increases on hundreds of drugs? Email us your comments, which we may edit before publication, to, and make sure to include your name and location.

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