3 summaries

The summary should be no more than 1 page, 12 fonts (Times New Roman), 1-inch margins, professionally formatted, and single spacing. On the left corner of the heading, please name your summary as “WSJ Summary No. X” with “your name”, and “section number”. 

I will give you three articles and good sample.

Activists to Press Avon to Explore a Sale

In letter to board, Shah Capital, Barington Capital and NuOrion Partners criticize pace of CEO search

Three activist investors are joining in a call on

Avon Products

to seek a buyer, cricizing the board’s abilitiy ‘to create meaningful long-term value.’ PHOTO: RICHARD DREW/ASSOCIATED PRESS

By David Benoit

Updated Jan. 28, 2018 7:42 p.m. ET

1 COMMENTS

A group of activist investors are joining together to call on Avon Products Inc.

AVP 3.40%

to seek a buyer, in a move that could set up a fight for the company’s board as a key deadline looms.

Three investors, who together own a roughly 3.5% stake in Avon, believe a yearslong effort to reshape the storied brand has run out of time and requires new ownership and leadership, according to a letter they plan to send to the board that was reviewed by The Wall Street Journal.

Shah Capital, Barington Capital Group LP and NuOrion Partners have all been investors for several years and pushed, in some cases publicly, for changes at the beauty-products seller. While Barington and NuOrion had earlier partnered, Shah has just joined their alliance.

After struggling for years, Avon is already undergoing a major transition, with Chief Executive Sheri McCoy expected to step down on March 31.

Ms. McCoy, who started in 2012 soon after Avon rejected an $11 billion takeover offer, said in November that a transformation of the company was poised to bear fruit, though the results would take time to show.

“Avon’s board of directors and management team are committed to delivering value for all shareholders and will continue to take actions to improve performance,” a spokesman said Sunday, pointing to the CEO search as being on schedule and saying the company values shareholder input. “We are confident that the changes we are undertaking will strengthen and grow the business.”

In December 2015, as Barington and NuOrion began their public criticism, Avon struck a deal to sell its North American operation and a 17% stake in the publicly traded international business to private-equity firm Cerberus Capital Management LP.

The company has been cutting costs, revamping its offerings and trying to improve its relationships with representatives, but results continued to slide.

The stock is down more than 50% over the past year and its market value has sunk to just over $1 billion.

The investors plan to criticize the company’s operational and stock performance, echoing complaints Barington and NuOrion made last year when they called for a CEO change. This time, they will raise concerns that the board, including the Cerberus representatives, isn’t equipped to complete the turnaround, according to the draft letter.

They also criticize the pace of the CEO search.

Such comments are often a prelude to a fight to change the board, which the investors could launch ahead of a deadline to nominate director candidates in coming weeks.

“We have lost confidence in the ability of the board to create meaningful long-term value for its public shareholders,” they write. “We believe that a better capitalized strategic buyer would do a much better job unlocking the tremendous value potential at Avon.”

The investors believe a range of buyers could be attracted to Avon’s 130-year-old brand, annual sales of more than $5.7 billion, strong positions in developing countries and tax efficiency.

Global Stocks Roar Into 2018, Making Some Investors Even More Nervous

S&P 500’s 7.5% gain so far is biggest since 1987, while Hong Kong’s Hang Seng Index is up 11%

For the first time since 1991, Japan’s Nikkei Stock Average closed above the 24,000 mark earlier this month. PHOTO: FRANCK ROBICHON/EPA/SHUTTERSTOCK

By Steven Russolillo

Jan. 28, 2018 6:50 p.m. ET

22 COMMENTS

Stocks around the world have staged one of the best-ever starts to a year, a synchronized rally that has only gained momentum following 2017’s sharp gains.

In the U.S., the S&P 500’s 7.5% rise in January is its biggest since 1987. In Asia, the Shanghai Composite has already surged 7.6%, surpassing last year’s gain. Hong Kong’s Hang Seng Index is up 11%, rising on all but two days this month. And in Europe, the German DAX and France’s CAC 40 are up 3.3% and 4.1%, respectively.

Strong corporate earnings and improving economic growth world-wide have fueled the gains, with the new U.S. tax law, which cuts corporate rates to 21% from 35%, bolstering optimism. The weaker U.S. dollar has been a boon to emerging markets and

the recent pickup in Treasury yields

has prompted a rotation out of bonds and into stocks, further propelling equity markets, investors say.

The gains have also put some investors on edge, intensifying analysts’ concerns about the rising price of buying into a bull market almost nine years old. The rallies have also drawn comparisons to the 2000 Nasdaq peak, when a mania for technology stocks drove the index to a level that it wouldn’t recapture for more than a dozen years.

While U.S. stocks have been generally expensive relative to historical norms in recent decades, Jim Paulsen, chief investment strategist at Leuthold Group, pointed out last week that the median price-to-earnings multiple for stocks listed on the New York Stock Exchange, Nasdaq and American Stock Exchange has reached a record high.

RELATED

·

Asia Markets Falter as U.S. Dollar Loses Steam

“For the first time in this recovery, the stock market has finally become expensive based on its ‘new valuation range,’” Mr. Paulsen said in a note to clients, referring to that record-high price-to-earnings multiple.

Overall, the MSCI All Country World Index, which captures equity returns from 23 developed and 24 emerging markets, has rallied 6.9% so far in January, on pace for its best monthly start to a year over the past three decades.

“I figured we’d rally again in 2018, but I wasn’t expecting a full-year’s worth of gains in the first few weeks of January,” said Andrew Clarke, director of trading at brokerage firm Mirabaud Asia Ltd. in Hong Kong.

Created with Highcharts 5.0.14

Outsize Gains

MSCI All Country World Index, January performance over the past three decades

Source: WSJ Market Data Group

Note: 2018 data through Jan. 26

Created with Highcharts 5.0.14

The surge in U.S. stock indexes this year has extended a roaring postelection rally that few analysts predicted, taking the S&P 500 index to 14 record closes in 2018, alongside 13 in the Nasdaq Composite Index and 11 in the Dow Jones Industrial Average.

Stocks and Treasurys are in the midst of what Goldman Sachs calls the most “extreme” start to a year ever. The bank says its cross-asset risk indicator, a measure of how investors are positioned across various asset classes like stocks, bonds and credit, is at its most bullish since inception in 1991.

“Risk appetite is now at its highest level on record,” Goldman analysts wrote to clients, “which leads to the question of what future returns can be.”

The investing environment has made billionaire investor Howard Marks nervous. The co-founder of Los Angeles-based Oaktree Capital Management, which has about $100 billion of assets under management, said investors shouldn’t get caught up in the rallies and be defensive.

“Most valuation parameters are either the richest ever or among the highest in history,” Mr. Marks said, referring to U.S. equity valuations. “In the past, levels like these were followed by downturns. Thus a decision to invest today has to rely on the belief that ‘it’s different this time.’

“I’m convinced the easy money has been made,” he said.

Cash has recently started to pour into equity markets at a record-setting pace. Buyers committed a net $58 billion to mutual funds and exchange-traded funds that invest in global stocks over a four-week stretch through Jan. 17, the most inflows for any comparable stretch in records going back to 2002, according to Bank of America Merrill Lynch.

In its monthly summary of market positioning, the bank said that investors’ allocations to equities had jumped to a two-year high, whereas positioning in bonds had fallen to a four-year low.

But for some investors, that is evidence of a long-awaited rotation into equities, one that might only be just beginning of more cash supporting stock markets.

“I’m not yet observing that we’re at peak optimism,” said Samuel Le Cornu, co-head of Asian equities at Macquarie Investment Management in Hong Kong. “I could definitely understand if the market continued to rally from here.”

Analysts and investors remain upbeat about emerging markets. “We think emerging market macro fundamentals are the best they’ve been in 20 years,” said Ajay Kapur, head of Asia Pacific and global emerging market strategy at Bank of America Merrill Lynch, pointing to indicators such as current account balances, lending metrics and currency fluctuations. “Out of 17 countries we monitor, not one is sick. That’s a very rare thing.”

He predicts the MSCI Emerging Markets Index—a broad measure of emerging-market equities—will double in two years, supported by a weak U.S. dollar and valuations that are cheaper relative to developed markets.

Much of his optimism is due to China, which Mr. Kapur says is the firm’s biggest overweight in emerging markets. With Chinese economic growth accelerating again and

memories of the 2015 stock-market crash fading

, he said conditions are ripe for more gains.

“There are a lot of skeptics out there, but you don’t really hear much from them these days,” Mr. Kapur said. “They’re burrowed into some caves.”

Write to Steven Russolillo at

steven.russolillo@wsj.com

Appeared in the January 29, 2018, print edition as ‘Global Stocks Start the Year With A Sizzle.’

Intel

Warned Chinese Companies of Chip Flaws Before U.S. Government

Decision to disclose issue to select few customers, including Lenovo and Alibaba, has ripple effects through security and tech industries

Intel’s decision to inform Chinese technology companies about security flaws in its processors raises concerns that the information could have reached the Chinese government before being publicly divulged. PHOTO: STEINBA/EPA/SHUTTERSTOCK

By Robert McMillan in San Francisco and Liza Lin in Shanghai

Jan. 28, 2018 11:37 a.m. ET

108 COMMENTS

In initial disclosures about critical security flaws discovered in its processors, Intel Corp.

INTC 10.55%

notified a small group of customers, including Chinese technology companies, but left out the U.S. government, according to people familiar with the matter and some of the companies involved.

The decision raises concerns, security researchers said, as it potentially could have allowed information about the

chip flaws

, dubbed Spectre and Meltdown, to fall into the hands of the Chinese government before being publicly divulged. There is no evidence any information was misused, the researchers said.

Weeks after word of the flaws first surfaced, Intel’s choices about who would receive advance warning

continue to ripple through the security and tech industries

.

The flaws were first identified in June by a member of Google’s Project Zero security team. Intel had planned to make the discovery public on Jan. 9—people working to protect systems from hacks often hold off on announcements while

fixes are devised

—but sped up its timetable when the news became widely known on Jan. 3, a day after U.K. website the Register

wrote about the flaws

.

Because the flaws can be leveraged to sneak sensitive data out of the cloud, information about them would be of great interest to any intelligence-gathering agency, said Jake Williams, president of the security company Rendition Infosec LLC and a former National Security Agency employee. In the past, Chinese

state-linked hackers

have

exploited software vulnerabilities

to get leverage on their targets or expand surveillance.

It is a “near certainty” Beijing was aware of the conversations between Intel and its Chinese tech partners, because authorities there routinely monitor all such communications, Mr. Williams said.

Representatives from China’s ministry in charge of information technology didn’t respond to requests for comment. The country’s foreign ministry has in the past said it is “resolutely opposed” to cyberhacking in any form.

An Intel spokesman declined to identify the companies it briefed before the scheduled Jan. 9 announcement. The company wasn’t able to tell everyone it had planned to, including the U.S. government, because the news was made public earlier than expected, he said.

MORE

·

Intel Fumbles Its Patch for Chip Flaw

(Jan. 11, 2018)

·

Businesses Rush to Contain Fallout From Major Chip Flaws

(Jan. 5, 2018)

·

Intel Wrestled With Chip Flaws for Months

(Jan. 5, 2018)

·

What You Can Do Now to Protect Against the Chip Flaws

(Jan. 4, 2018)

Intel’s tricky path—inform enough big customers to head off significant damage while keeping the information as contained as possible to limit potential leaks—

continues to weigh on smaller companies

that weren’t given an early nod.

Joyent Inc., a U.S.-based cloud-services provider owned by

Samsung Electronics

Co. , is still playing catch-up, said Bryan Cantrill, the company’s chief technology officer.

“Other folks had a six-month head start,” he said. “We’re scrambling.”

In the months before the flaws were publicly disclosed, Intel

worked on fixes

with

Alphabet

Inc.’s Google unit as well as “key” computer makers and cloud-computing companies, Intel said in an emailed statement to The Wall Street Journal.

An official at the Department of Homeland Security said staffers learned of the chip flaws from the Jan. 3 news reports. The department is often informed of bug discoveries in advance of the public, and it acts as an authoritative source for information on how to address them.

“We certainly would have liked to have been notified of this,” the official said.

The NSA was similarly in the dark, according to Rob Joyce, the White House’s top cybersecurity official. In a message

posted Jan. 13 to Twitter

, he said the NSA “did not know about these flaws.” A White House spokesman declined to comment further, referring instead to the tweet.

Chinese computer maker

Lenovo Group

Ltd.

LNVGY -1.20%

was among the large tech companies, including

Microsoft

Corp. ,

Amazon.com

Inc. and ARM Holdings in the U.K., that were notified of the flaws beforehand.

Lenovo was able to issue a statement Jan. 3 advising customers on the flaws because of “the work we’d done ahead of that date with industry processor and operating system partners,” a spokeswoman said in an email.

Alibaba Group Holding

Ltd.

BABA 3.47%

, China’s top seller of cloud-computing services, also was notified ahead of time, according to a person familiar with the company.

A spokeswoman for Alibaba’s cloud unit declined to comment on when the company was informed. She said any idea that the company might have shared information with Chinese authorities was “speculative and baseless.”

A Lenovo spokeswoman said Intel’s information was protected by a nondisclosure agreement.

Despite the security concerns, an early heads up to a select number of large global companies made sense, said Dave Aitel, chief executive of Immunity Inc., a company that sells security services. “They’re going to tell as few people as possible” to contain possible leaks, he said.

Because they had early warning, Microsoft, Google and Amazon were able to r

elease statements soon after news of the flaws

leaked out saying their cloud-computing customers were largely protected.

Smaller competitors, though, continue to struggle. DigitalOcean Inc., a cloud-services seller, said Jan. 19

it was still testing a fix for its customers

. Rackspace Inc. said last Wednesday it has several teams working on a fix. The cloud company earlier in January told customers it

understood the situation “can be frustrating

.”

The DHS also stumbled with its initial guidance. The agency’s Computer Emergency Response Team first linked to an advisory stating the only way to “fully remove” the flaws was by replacing the chip. CERT now advises users instead to patch their systems.

The DHS should have been looped in early on to help coordinate the flaws’ disclosure, Joyent’s Mr. Cantrill said. “I don’t understand why CERT would not be your first stop,” he said.

Write to Robert McMillan at

Robert.Mcmillan@wsj.com

and Liza Lin at

Liza.Lin@wsj.com