continued on page 2 Monday’s Calendar - Dow Jones

Market Snapshot*

DJIA 17690.46 -55.51
Nasdaq
S&P 500 5128.28 -0.49
10-Year
30-Year 2103.93 -4.69
Euro
Nymex Crude 2.2072% 17/32

Source: SIX Telekurs, ICAP plc 2.9309% 14/32

Friday, July 31, 2015 $1.09845 +0.005

Stocks $47.12 -1.40

U.S. stocks finished mixed Friday as pal- *preliminary values subject to adjustments
try growth in U.S. wages cast some
doubt over whether the Federal Reserve Tomorrow’s Headlines
would raise interest rates in the coming
months. The U.S. employment-cost Labor Costs Rise at Slowest
index, a measure of workers' wages and Pace in Three Decades
benefits, rose a seasonally adjusted
0.2% in the second quarter from the first U.S. labor costs rose at the slowest pace in at least three decades in the
quarter, the Labor Department reported spring, a sign of persistently sluggish wage growth that could weigh on the
Friday. The gains marked the smallest Federal Reserve’s decision to raise short-term interest rates.
quarterly rise since record-keeping
began in 1982, and fell below econo- The employment-cost index, a broad measure of workers’ wages and bene-
mists' expectations of a 0.6% increase. fits, climbed a seasonally adjusted 0.2% in the second quarter from the first
quarter, the Labor Department said Friday. That marked the smallest quarterly
Treasurys gain since record keeping began in 1982. Economists surveyed by The Wall
Street Journal expected a 0.6% increase.
Yields on short-dated Treasury notes
nearly breached the highest level of the Civilian worker wages and salaries, reflecting more than two-thirds of employ-
year on Thursday after a report showed ment costs, grew 0.2% in April through June, also the smallest gain on
the U.S. economy picked up speed in the record. Benefits climbed 0.1%.
second quarter, bolstering the case for
the Federal Reserve to raise interest Compensation costs can ebb and flow from quarter to quarter. Over a broader
rates in September. While the 2.3% period, wages and benefits are growing modestly. Total compensation grew
growth rate was below the 2.7% forecast 2.0% in the second quarter compared to a year earlier. That was a slower
by economists, the pace quickened from pace than the 2.6% year over year growth in the winter.
0.6% in the first quarter, which was
revised higher from a 0.2% contraction. The latest figures came after months of tentative signs that workers’ wages
An upturn in exports and stronger con- were finally picking up from years of tepid growth. The report suggests slack
sumer spending were among factors remains in the labor market despite a long stretch of hiring and a sharp drop
boosting economic growth last quarter. in unemployment.

Forex continued on page 2

The dollar slid against the euro Friday Monday’s Calendar
after a quarterly measure of U.S. labor
costs indicated stagnating wages, cast- 8:30 a.m. Jun Personal Income & Outlays Personal Income, M/M% (previ-
ing some doubt on the Federal Reserve's ous +0.5%), Consumer Spending, M/M% (previous +0.9%), PCE
plans to raise rates in the coming Price Idx, M/M% (previous +0.3%), PCE Price Idx, Y/Y% (previous
months. The dollar weakened 1.5% +0.2%), PCE Core Price Idx, M/M% (previous +0.1%), PCE Core
against the common currency, as one Price Idx, Y/Y% (previous +1.2%)
euro bought $1.1090 versus $1.0977
ahead of the data. 9:00 a.m. Federal Reserve Governor Jerome Powell keynotes event on 'Are
there structural issues in U.S. bond markets?'
Commodities
9:45 a.m. Jul US Manufacturing PMI (previous 53.6)
Oil prices slumped to multi-month lows
again Friday, but pared losses as they 10:00 a.m. Jul ISM Manufacturing Report on Business Manufacturing PMI
followed the dollar's erratic moves. Light, (previous 53.5), Prices Idx (previous 49.5), Employment Idx (pre-
sweet crude for September delivery vious 55.5), Inventories (previous 53), New Orders Idx (previous
recently fell 1.5%, $47.79 a barrel on the 56), Production Idx (previous 54)
New York Mercantile Exchange. Brent,
the global benchmark, rose 0.9%, to 10:00 a.m. Jun Construction Spending - Construction Put in Place New
$52.82 a barrel on ICE Futures Europe. Construction Residential Construction (previous +0.8%)
Both had briefly rebounded all the way to
small gains Friday before resuming their 11:00 a.m. Jul Global Manufacturing PMI PMI, Mfg (previous 51)
retreat.
4:00 p.m. Jul Domestic Auto Industry Sales Auto Sales Annualized (previous
17.16M)

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Friday, July 31, 2015 4 p.m. ET Exxon Mobil 2Q Earnings Cut in Half

Tomorrow’s Headlines Exxon Mobil Corp., the biggest and richest U.S. oil compa-
ny, reported its lowest earnings in six years on Friday as
continued bigger profits from refining couldn’t offset plunging earnings
in its exploration and production business.
Uber Crosses $50B Valuation
Shares of Exxon Mobil tumbled as much as 5% on Friday
Uber Technologies Inc. has closed a new round of funding to their lowest level since mid-2012. Recently, shares were
valuing the five-year-old ride-hailing company at close to $51 down 4.7% to $79.11.
billion, according to people familiar with the matter, equaling
Facebook Inc.’s record for a private venture-backed startup. Exxon also said it would again scale back its share buy-
backs during the current quarter to a level of $500 million.
Uber raised close to $1 billion in the round, one of the peo- Exxon bought back $1 billion in shares in the second quar-
ple said, bringing its total funding to more than $5 billion. ter, which was down from its previous level of about $3 bil-
The San Francisco company initially had briefed investors lion in buybacks each quarter. Stock repurchases are popu-
on a plan to raise between $1.5 billion and $2 billion, The lar with investors because they shrink the number of shares
Wall Street Journal reported in May. available and tend to make them more valuable.

Investors in the latest round include Microsoft Corp. and the In a news release, Chief Executive Rex Tillerson said
investment arm of Indian media conglomerate Bennett results in the latest quarter “reflect the disparate impacts of
Coleman & Co., another person familiar with the matter the current commodity price environment.”
said, as Uber seeks allies to help bolster its technology and
expand in large markets outside the U.S. Profit in the exploration and production, or upstream, busi-
ness plunged 74% to $2.03 billion in the latest quarter, as
Fed’s Bullard: ‘In Good Shape’ its U.S. division swung to a loss.
to Raise Rates in September
Chevron’s Profit Plunges
Federal Reserve Bank of St. Louis President James Bullard on Impairments
said Friday economic data seen since central bankers gath-
ered this week are bolstering the case for raising short-term Chevron Corp.’s profit tumbled 90% to the lowest level
rates when officials meet in September. since 2002 in the second quarter as the oil company took
over $2 billion in impairments and charges to suspend proj-
“We are in good shape” for increasing the Fed’s currently ects amid lower crude-oil prices.
near-zero short-term rate target at the Sept. 16-17 central
bank gathering, Mr. Bullard said in an interview with The “Second-quarter financial results were weak, reflecting a
Wall Street Journal. He said officials needed to see how crude-price decline of nearly 50% from a year ago, said
growth data released Thursday shaped up before clearing Chief Executive John Watson in a news release. “Our
the way to act. upstream businesses were particularly hard hit, as lower
prices reduced revenues and triggered impairments and
EU Probes FedEx-TNT Deal other charges.”

The European Commission on Friday opened an in-depth Chevron booked $1.96 billion in impairments and $670 mil-
investigation into FedEx Corp.’s 4.4 billion euro ($4.8 bil- lion in charges related to project suspensions and adverse
lion) deal to buy TNT Express NV, saying it was concerned tax effects. Chevron said the charges stemmed from a
about the merged company’s dominance in the internation- downward revision of its long-term crude-oil price outlook.
al delivery of small packages in some European markets.
End-July Consumer Sentiment
The commission, the European Union’s antitrust watchdog, Unexpectedly Slips to 93.1
said the two remaining international delivery companies,
United Parcel Service Inc. and DHL Worldwide Express Consumers remained uncertain about the economy in July,
Inc., may not provide sufficient competition to the merged as the University of Michigan final July sentiment index
company. slipped to 93.1 from a preliminary reading of 93.3 and a
final June reading of 96.1.
“This could lead to higher prices for business customers
and consumers,” the commission said. The two companies Economists surveyed by The Wall Street Journal projected
announced the deal in April. the end-July index to increase to 94.0.

TNT shares traded down about 1% after the announce- “A disappointing pace of economic growth was the main
ment, while FedEx stock was up 0.2%. reason for the small decline in consumer confidence,” said
Richard Curtin, chief economist at Michigan’s Survey of
The commission now has until Dec. 8 to investigate the Consumers that compiles the sentiment index.
proposed acquisition and to decide whether to approve the
deal or ask the companies for concessions to ease its con- continued on page 3
cerns. If it fails to reach an agreement on how to bring the
acquisition in line with EU competition rules, the commis-
sion can also decide to block the merger.

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Friday, July 31, 2015 4 p.m. ET Chief Executive Mary Barra was awarded 2.6 million
options with a $31.32 strike price, gradually vesting over a
Tomorrow’s Headlines four-year period beginning in 2017. She earned $16.4 mil-
lion in her first year at the helm, during which she steered
continued the company through a costly ignition-switch recall crisis
and set lofty margin targets for the 107-year-old company.
Steep Losses Hit Carlyle
Commodity Hedge-Fund Firm BofA Details Vote Plan On CEO Role

Private-equity firm Carlyle Group LP has split with the Bank of America Corp. on Friday gave more details about its
founders of its Vermillion commodity hedge-fund firm after plans for letting shareholders have a say about whether
its flagship fund shrank from $2 billion to less than $50 mil- Chief Executive Brian Moynihan can keep his chairman title.
lion in assets, according to people familiar with the matter.
Responding to pushback from influential shareholders,
Vermillion Asset Management LLC’s Viridian commodity including California State Teachers’ Retirement System, the
fund, which traded in oil, metals and agricultural markets, second-largest pension fund in the U.S. by assets, the bank
has seen assets dwindle after heavy losses and a wave of in May said it would give shareholders a chance to vote on
investor redemptions, the people said. The fund lost 23% in the move the company made in October to give Mr.
2014; the latest investor exits began in the spring and the Moynihan the role.
fund reached a nadir in recent weeks.
In a filing with the Securities and Exchange Commission,
Marines Say Costly F-35 the Charlotte, N.C.-based lender said it appreciates “the
Jet Fighter Is Finally Ready candor” with which holders have expressed “insights and
perspectives” and confirmed it is calling a special meeting
The U.S. Marine Corps on Friday said the F-35 Joint Strike with a vote to ratify the board’s power to select a leadership
Fighter is finally ready for combat, a milestone for the structure that it sees fit.
world’s most expensive weapons program and one that is
likely to shift debate to the jet’s capabilities. Greece’s Tsipras Called for
Euro-Exit Contingency Plan
The announcement by Marine Corps Commandant Gen.
Joseph Dunford comes almost 14 years after Lockheed Greece’s Prime Minister Alexis Tsipras on Friday acknowl-
Martin Corp. beat out Boeing Co. for what’s become the edged making contingency plans in case Greece was
world’s priciest military contract, with the Pentagon planning forced from the euro, but said it was never his aim to leave
to spend almost $400 billion to develop and buy more than the common currency.
2,400 jets.
His comments to lawmakers came after a call made public
ValueAct Takes 5% this week suggested his former finance minister wanted to
Stake in Rolls-Royce hack government information to set up a system based on
IOUs in case Greece could no longer stay afloat using euros.
Activist investor ValueAct Capital Management LP has
taken a more than 5% stake in Rolls-Royce Holdings PLC The news caused an uproar, pouring more pressure on Mr.
after the British engine maker suffered a series of profit Tsipras as he already faces divisions within his left-wing
warnings that has weighed on its stock. party after making an abrupt about-face on austerity
demands and striking a tentative bailout deal with creditors
ValueAct crossed the 5% reporting threshold on July 29, for as much as 86 billion euro ($94 billion).
Rolls-Royce said in a regulatory announcement. The
investor, which has had a smaller share in Rolls-Royce for Russia Cuts Interest Rates Again
some time, now holds 5.44% of the stock, the regulatory
notice said. The Bank of Russia cut interest rates on Friday for the fifth
time so far this year, citing economic risks, but declined to
GM Grants Executive Stock Options commit on whether there would be further monetary easing.

General Motors Co. handed out its first stock options since The central bank cut the key rate by half a percentage point
emerging from bankruptcy in 2009, awarding grants to to 11%, in line with the market consensus, taking its total
about 300 top executives based on their ability to deliver cuts so far this year to six percentage points. Still, the key
shareholder returns in line with industry peers and other rate remains above 10.5%, the level it was at in early
factors. December, before an emergency increase to 17% that
helped to stabilize the plummeting ruble.
Part of the company’s long-term incentive plan, the options
were granted this week. The stock awards are designed to The cut is smaller than a month ago, when the central bank
retain top executives through noncompete clauses and tie slashed rates by one percentage point. But the continuation
compensation to company performance, a spokesman of a policy of monetary easing indicates that the central
said, and were awarded as quickly as possible following bank is trying to revive the battered economy without letting
shareholder approval last year. the rate of inflation rise.

Copyright © Dow Jones & Company, Inc. All Rights Reserved. page 3
www.dowjones.com

Friday, July 31, 2015 4 p.m. ET The Week Ahead

Copyright Dow Jones & Co., Inc. Employment Data Seen Strong

Tomorrow's News Today is made The first full week of August brings a busy docket of data. The most important of
available as a complimentary service the reports will be Friday’s employment report. The July numbers will show how
to Dow Jones News Service paying labor markets kicked off the third quarter.
subscribers. No further redistribution is
permitted without written permission Economists surveyed by The Wall Street Journal forecast the nonfarm payrolls
from Dow Jones. Tomorrow’s News increased 215,000 in July. The jobless rate is expected to hold at June’s 5.3%
Today is intended to provide factual rate.
information, but its accuracy cannot
be guaranteed. Dow Jones is not a Also of interest for economy-watchers and Federal reserve officials will be the
registered investment adviser, and change in average hourly earnings. Wage growth has been stagnant throughout
under no circumstances shall any of this six-year expansion. The median forecast thinks wages increased 0.3% in
the information provided be construed July after no change in June.
as a buy or sell recommendation or
investment advice of any kind. Russia, British Relations Worsen
After Litivenko Inquiry
Want to send a co-branded daily
version to your valued clients? A monthslong inquiry into the 2006 death from poisoning of former Russian spy
Alexander Litvinenko concluded Friday after a parade of witnesses provided evi-
Dow Jones offers subscribing firms the dence that British police said “points unwaveringly” at two men working at the
opportunity to co-brand Tomorrow's behest of the Russian state.
News Today for redistribution to their
clients. If your firm is interested in Mr. Litvinenko, who moved to the U.K. in 2000 and became a Kremlin critic, died
co-branding, please contact us at after consuming tea laced with radioactive polonium at a luxury hotel in Mayfair,
[email protected] or London. British officials have long accused two Russians, former KGB agent
1.800.223.2274. Andrei Lugovoi and a longtime acquaintance Dmitry Kovtun, of administering the
fatal dose when they met with Mr. Litvinenko at the hotel bar.

But during the course of the high-profile hearing, the inquiry heard fresh evi-
dence including testimony from a friend of Mr. Kovtun. The witness, identified
only as D3 and having worked with Mr. Kovtun as a waiter in Germany, said the
alleged suspect confessed he was traveling to London to lure Mr. Litvinenko and
“finish him off” with an expensive poison.

During concluding arguments Friday, Ben Emmerson, a lawyer acting for Mr.
Litvinenko’s widow, said the killing of a high-profile dissident with a dangerous
radioactive isotope “could not have happened without President Putin’s
approval.”

A day earlier, Richard Horwell, a lawyer for London’s Metropolitan Police said:
“The evidence suggests that the only credible explanation is that, in one form or
another, the Russian state was involved in Litvinenko’s murder.”

It comes at a time of already strained relations between Moscow and Western
governments over Russia’s intervention in Ukraine. During the course of the
inquiry Russian President Vladimir Putin awarded Mr. Lugovoi, now a politician,
a medal for “services to the motherland.”

Messrs. Kovtun and Lugovoi, who have repeatedly denied any wrongdoing,
couldn’t immediately be reached for comment Friday.

Mr. Kovtun, in a statement submitted to the inquiry, said that he was at the bar of
the Millennium Hotel with Mr. Litvinenko and Mr. Lugovoi “completely by chance”
and that he “knew nothing about Polonium 210 until Mr. Litvinenko’s death”.

Mr. Lugovoi, in comments reported by Interfax news agency Friday, dismissed
the accusations of his involvement and said the British government was seeking
to “demonize” Russia.

“The aim of this trial is not to find out the truth but to continue hanging labels on
Russia,” he said.

“If you recall, when Litvinenko died, similar, full-blown accusations were already
being made without any investigation, both from British officials and bodies that

continued on page 5

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Friday, July 31, 2015 4 p.m. ET Radioactive contamination was detected in the airplanes,
cars, hotels and nightclubs the accused visited, according
The Week Ahead to the police investigation. Traces were even found in the
stadium of Arsenal football club where they attended a soc-
continued cer match. In the moments before Mr. Litvinenko arrived at
the Millennium Hotel for his meeting with Mr. Kovtun and
only had the investigation ahead of them. So we’ve heard it Mr. Lugovoi, the pair retreated to the hotel’s reception lava-
already,” said Dmitry Peskov, a spokesman for the Kremlin. tory, where high levels of contamination were later found on
a cubicle door, the police investigation found.
Russia has declined to extradite the pair to the U.K., where
authorities have charged the two men with murder. The radioactive trail ended at the British embassy in
Moscow in the room in which the alleged murderers made
The judge said Friday that he planned to issue his final their declarations, according to the Metropolitan Police,
report by the end of the year. known as Scotland Yard. A chair in the room used by Mr.
Kovtun showed particularly high levels of contamination,
The hearing took an unexpected turn in March when Mr. the police said.
Kovtun announced that he wanted to take part in the
inquiry. The judge granted him “core participant” status, During the inquiry, British police portrayed the two prime
providing the Russian access to 15,000 inquiry documents. suspects as an “odd couple,” with Mr. Kovtun as the “foot
soldier” and Mr. Lugovoi as “the general.”
But last week, just days before he was due to testify via
video link, Mr. Kovtun pulled out citing obligations to a The inquiry also heard testimony that hadn’t previously
Russian “investigation.” been made public from Mr. Kovtun’s ex-wives, presented
by the police that painted Mr. Kovtun as someone who
That prompted lawyers for the British police and Mr. drank heavily and was a drifter.
Litvinenko’s wife to accuse Mr. Kovtun and the Russian
state of a deliberate charade designed to obtain access to Police allege Mr. Lugovoi recruited Mr. Kovtun to assist him
the evidence. The judge said he had the “gravest suspicion in poisoning Mr. Litvinenko. Mr. Litvinenko’s high-profile
that an attempt is being made to manipulate the situation.” defection to the U.K. in 2000 was viewed in Russia as “akin
to treachery,” Mr. Horwell, the police lawyer, told the court
The inquiry also heard new witness testimony from nuclear Thursday.
scientists and forensic experts presented by police related
to a radioactive trail left behind by the polonium that
marked nearly everywhere the accused assassins visited
while in London.

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