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- [00:00]
Vera Bergengrun
Over 60 years, Medline has demonstrated a track record of delivering consistent growth. Today, Medline is proudly Nasdaq listed and is the largest provider of medical surgical products and supply chain solutions serving all points of care. See how Medline makes healthcare run better@medline.com
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Daniel Bok
Republicans begin the scramble to replace Senator Lindsey Graham following his sudden death. Plus, company expectations are sky high for this earnings season. But can it last?
- [00:28]
Christine Short
We're past the AI hype now. We want some sort of proof that there returns on these investments and shares
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Daniel Bok
in SK Hynix suffer their steepest drop ever. It's Monday, July 13th. I'm Daniel Bok for the Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of what's news, the top headlines and business stories moving your world. Today, Republicans are expected to move quickly to fill the seat of late Senator Lindsey Graham, the longtime South Carolina lawmaker who died late on Saturday at the age of 71. Preliminary findings by the District of Columbia Medical examiner show that Senator Graham died of an aortic tear caused by cardiovascular disease. He had been in Kyiv on Friday to meet with Ukrainian President Volodymyr Zelensky before returning home to Washington. I've never been more optimistic than I am today that we have the formula to end this war, help Ukraine be more lethal, let those supporting Russia to know it's going to be a price to be paid if you keep doing it, he said.
- [01:31]
Donald Trump
I'm tired because it's a long trip. But other than that, he was fine.
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Daniel Bok
President Trump told CNN's State of the Union that he spoke to Graham shortly before he died.
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Donald Trump
He was a great politician. He was a natural. There are very few of them. He was a natural politician, got along with everybody. When he didn't, he was very tough. You know, he's a tough cookie, too, but he got along with everybody.
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Daniel Bok
Journal White House reporter Alex Leary says Graham was known as a foreign policy hawk who was widely respected in Washington and after being a fierce critic of Trump, became one of the president's closest allies on Capitol Hill.
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Alex Leary
The loss of Senator Lindsey Graham is just a shock that settled over Washington. He was not just a beloved figure among fellow lawmakers, including Democrats, who saw him as a folksy, smart, collegial person, even if they've disagreed strenuously with some of his views on foreign policy. And his relation with President Trump will go down as one of the most interesting relationships of the Trump era, someone who really vehemently opposed Trump and became one of his closest friends and allies. When Trump was running for president in 2016. Graham was a fierce critic of him, saying that the Republican Party would be forever changed then. He continued to criticize him at times during Trump's first term, most notably during the the aftermath of the January 6 riot at the Capitol by Trump's supporters to overturn the election results. But they patched things up. Graham represented the foreign policy hawkish views that traditional conservatives had. He was very consistent on that front for a long time. He was instrumental in advocating for the war with Iran, for example, a fierce defender of Israel. So a lot of ins and outs, contradictions and sort of a fascinating political storyline between those two.
- [03:20]
Daniel Bok
His death narrowed Republican Senate majority adding to the challenges the GOP faces in moving President Trump's agenda forward ahead of November's midterms. Alex says South Carolina Governor Henry McMaster can immediately appoint someone to serve out the rest of Graham's term.
- [03:35]
Alex Leary
Politically in South Carolina, this is going to set off a certain free for all to replace Graham. The governor there can appoint someone temporarily, but there's a lot of ambitious younger Republicans in a very conservative state that are going to vie for this seat. So we now have another black blockbuster election on our hands.
- [03:54]
Daniel Bok
Names floated for the short term appointment or those who have expressed a personal interest in running in the primary include Representatives Russell Fry, Nancy Mace, Ralph Norman and lieutenant governor Pamela Evatt. Their representatives didn't immediately respond to requests for comment or couldn't immediately be reached because of the slim lead over Democrats. GOP House leaders have signaled they are wary of any House member leaving for a new post before the end of this Congress. Once someone fills Graham's position, Republicans will be back to a 5347 majority, though Senator Mitch McConnell remains unavailable to vote because of his own health problems over the weekend. McConnell broke a weeks long silence about his hospitalization, saying he's been recovering from a fall and a subsequent bout of pneumonia. Markets have dipped this morning, striking a pessimistic tone after shares in SK Hynix slumped 15% in South Korea after the company's historic listing on the NASDAQ. U.S. stock futures are also pointing to a lower open, with futures for the tech heavy Nasdaq down more than 1%, with US shares of SK Hynix sinking 10% ahead of the open. It comes as results from major US Banks this week kick off a busy earnings season. Market expectations for this upcoming season are sky high, with the consensus estimate suggesting average earnings per share for S&P 500 companies will grow an impressive 23%. This week's guest on WSJ's take on the week was Christine Short, head of research at Wall Street Horizon, which is part of the financial services company TMX Group. She said there is one reason for companies huge expectations.
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Christine Short
Well, I think a lot of it has to do with the efficiencies around AI. I think a lot of this is operational resilience as opposed to revenue. Growth is still very robust at 12%, but they're finding ways to manage the supply chain perfectly, manage inventory, cut unneeded, cost less, cut the fat. Right. There has been a lot of overhiring during COVID that a lot of these companies have taken care of. It's an efficiency game and I think what these companies are seeing is AI is just going to continue to drive that. For this year. We see analysts expecting calendar year 2026 earnings growth at 24% for a yearly growth number that's quite exquisite.
- [06:10]
Daniel Bok
For more on this earnings season and whether those expectations are actually sustainable, check out the link we left in our show Notes on the economic front, the outlook is also positive, with economists in the latest journal survey expecting US GDP to grow 2.1% this year, an uptick from their view. In April, they said the war with Iran hasn't impacted growth as negatively as first thought, but at the same time are increasingly worried about sticky inflation. They now predict consumer prices will stay well above 3% for the rest of the year, leaving the Fed no room to cut rates. And Chinese fast fashion giant Shein has won approval from Beijing for a Hong Kong IPO that could value the company at over $40 billion, with a listing expected as early as the third quarter. Here's my summer Shein haul did a little damage on Shein, so I thought
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Vera Bergengrun
we could open this together. Here's my huge 2026 summer shein haul
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Christine Short
Pile is so big you can't even
- [07:02]
Vera Bergengrun
see me, but I have a massive Shein haul. I'm headed to Florida.
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Daniel Bok
The company has become one of the most popular ultra fast fashion brands. And while finding itself in the crossfire of geopolitical tensions between China and the west, which has complicated its path towards an ipo, supply chain scrutiny and US Tariffs derailed the brand's initial attempt to go public in the U.S. while Shein has no customers in China, its reliance on thousands of local factories meant it needed Beijing's blessing ahead of the public offering. Coming up, Washington puts the squeeze on Cuba's program to send doctors and nurses overseas, one of the island's last financial lifelines. That story after the break.
- [07:43]
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- [08:16]
Daniel Bok
The US Campaign to force economic and political change in Cuba has included blocking fuel shipments to the island, slowing tourism to a trickle, and curbing money being sent back to the country from abroad. But now the Trump administration is turning the screw on Cuba's most valuable export and one of its few dependable sources of hard currency, the doctors and nurses it sends to other countries. Journal National Security reporter Vera Bergengrun is here with more. Vera, can you give us a sense of the size of Cuba's program and its importance to the country?
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Vera Bergengrun
These overseas medical missions are pretty enormous. There are about 24,000 doctors across 50 countries. They've been doing this for decades. And it's a pretty well known program in the region and across Latin America, some parts of Europe. And they often tend to also appear during natural disasters during the COVID pandemic, when especially small countries or rural areas have very stretched health care systems. Cuba, which invests a ton in training these doctors, tends to send them abroad almost as a, you know, soft power diplomatic mission as well as a way to get currency back into the country. So in 2024, economists tell us this program brought in about $5.3 billion. We have to remember, you know, this is an incredibly cash strapped economy and it's really, really important source of income and hard currency.
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Daniel Bok
And how has the Trump administration been upending this practice and squeezing other countries? As you write about, the Trump administration
- [09:41]
Vera Bergengrun
is trying to make it very costly for these governments to keep employing them. So their main tool has been diplomatic pressure. They've been threatened visa restrictions or other kinds of penalties for foreign officials involved in the program. I saw this myself when I traveled with Secretary Rubio to Jamaica and to other parts of the Caribbe, where some of these communities really rely on these doctors and nurses. These are the only medical staff that they sometimes have. And even when they train local doctors, they tend to move away for more money. So Rubio has really been putting a lot of pressure privately and sometimes publicly on these governments that hire these doctors, telling them that it's an abusive program, that they are funding the Cuban regime, and that there are other alternatives available.
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Daniel Bok
And on those alternatives, you report that the US in some cases has offered to provide alternative medical care and resources to the countries that they're asking to remove Cuban doctors. What does that look like?
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Vera Bergengrun
That's right. The US Is now really just encouraging these countries to do different workarounds. In some cases, they're asking them to hire doctors, nurses from other parts. They're asking them to pay the doctors directly instead of through the Cuban government, which, you know, a lot of these countries say they're already doing that, but US Officials don't believe them. And in other cases, you know, for example, in the Caribbean and some of these islands that really have almost no other medical staff, some US Hospital ships sporadically show up and provide surgeries or medical care or eye care, things like that. But ultimately that's just not enough. When I was in St. Kitts, which is a very small island in the Caribbean with Secretary Rubio, I went to a local hospital. In some of these rural clinics or these small islands, Cuban nurses and doctors are the only highly trained medical staff that they have, especially when it comes to eye surgeries, things like that. Speaking to Latin American and Caribbean officials, they tell us that it's really unrealistic for some of these short term solutions, like a US Hospital ship that might come once a year to bridge the gap of again, just, you know, emergency rooms, Cuban nurses, people who can do dialysis, people who can do surgeries. That's something that they really rely on these Cuban doctors for, and there isn't any other alternative.
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Daniel Bok
And has the Trump administration said anything about how they might move this forward? Cuba and Latin America more broadly evidently is more of a priority for Trump in his second term.
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Vera Bergengrun
There's been quite a lot of movement at first. Some of these countries were quite defiant. A lot of them said, you know, I would rather lose my job than have people die or suffer. We have seen quite a shift, especially since the US Began flexing more muscle in the region. We've seen these strikes on drug boats in the region. We've seen the US Military assert itself a lot. We've seen this operation to remove Venezuelan autocrat Nicolas Maduro. And I've seen a lot of these officials get quieter, and they don't really want to publicly defy the Trump administration. Guatemala has phased out its program. Honduras has sent back hundreds of medical workers. And we've seen some of these countries start to comply, or at least really want to show the Trump administration that they're working to comply, because I think they've realized that Secretary Rubio and Trump himself are quite serious about this.
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Daniel Bok
Journal National Security reporter Vera Bergen Gruen. Vera, thank you for this.
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Vera Bergengrun
Thanks so much.
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Daniel Bok
And finally, move over Chippendale and Eames chairs. Gen Z and millennial collectors are driving a new furniture craze by turning vintage IKEA pieces into rare collector's items. The Swedish retailer built its brand over the past 84 years on low cost mass market design, but some of its early pieces are now so sought after that they're out of reach for many buyers. Journal contributor Leonora Epstein says the trend is driven by a combination of nostalgia, appreciation for good design and recognition of
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Leonora Epstein
future launch in the US until 1985. So there's a real appetite for American collectors for pieces produced prior to 1985, as they tend to be more rare in the States and the stock is concentrated in Europe. IKEA pieces made during the 50s and 60s are exceedingly rare and can cost tens of thousands of dollars. But the 90s, 2000s and early 2000s are also trending. Now this movement is driven by serious and novice collectors alike, but the biggest, biggest demographic seems to be millennials and Gen zers who are experiencing nostalgia for pieces they may have had during childhood or a general nostalgia for the aesthetics of the 2000s.
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Daniel Bok
What many of these pieces have in common is they were originally released as part of special collections and were eventually discontinued. On one online marketplace, the average vintage IKEA item sells for nearly $1,000. And on another, a rare 1970s reclining chair, originally priced around $350, is listed for over 12,000 DOL. So if you've got an old, or should we say vintage IKEA chair, you might already be sitting on a great investment. And that's it for what's news for this Monday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Kilhoff. And I'm Daniel Bach for the Wall Street Journal. We'll be back tonight with a new show.
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Vera Bergengrun
Until then, thanks for listening.
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Donald Trump
Foreign.
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Fidelity Trader Plus Announcer
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