The 10-Point: Russian Sanctions, Beijing's Bond Bet, Media Mergers and More

A New Cold Front

The Obama administration announced it was escalating its sanctions against Russia over its alleged interference in Ukraine after determining that President Vladimir Putin's hints at cooperation were leading nowhere. But the sanctions are once again limited and stop well short of action that could seriously weaken Russia's economy. Mr. Putin still bristled at the new measures: "I am convinced that is to the detriment of the long-term national interests of the American government and its people." According to the U.S. and Europe, separatists in Ukraine are receiving support from Russia, an accusation Moscow has denied. The new sanctions impose restrictions on the Russian state-controlled oil giant Rosneft and other top firms, but stop short of blocking deals with entire sectors of the Russian economy to limit spillover on companies in the U.S. and allied nations. We note, however, that the move risks diminishing cooperation with Russia on other fronts, such as negotiations over Iran's nuclear program. (Pictured above: Pro-Russia militants watch a Ukrainian army plane pass overhead Wednesday near the town of Marynivka.)

Beijing's Big Bond Bet

Investors wondering who has been behind the great U.S. bond rally of 2014 now have a clue where to look: China. We report that the Chinese government has increased purchases of U.S. Treasurys this year at the fastest pace since records began more than three decades ago, according to data released yesterday. Specifically, it boosted its official holdings of Treasury debt maturing in more than a year by $107.21 billion in the first five months of 2014. Our story looks at why China might have increased its buying and considers the implications of the move. We note that China is likely attempting to lift its export-driven economy by weakening its currency, the yuan, against the dollar. While lower yields mean lower income for bond investors, the purchases—besides weakening the yuan—also hold down U.S. interest rates, making houses more affordable and generally easing financial conditions in the U.S. economy.

Power Couple

21st Century Fox made a bold bid to acquire Time Warner, in a takeover that would put some of the world's best-known media brands under one roof. We note that Fox's $80 billion cash-and-stock offer was rejected last week for a number of reasons, one being the price. Our story looks at the implications of such a deal and considers why Fox made the offer to begin with, indicating that it wasn't necessarily to gain scale and leverage. Fox, like other media companies, is looking to find the right mix that ensure it stays relevant as the media landscape undergoes big changes in the coming years. If the deal happens, the merger could combine Time Warner cable channels such as TBS and HBO with Fox's broadcast network, as well as its Fox News, FX and Fox Sports 1 channels—a marriage of media giants that will likely receive close scrutiny from antitrust regulators.

Future of Flying

There's no doubt that technology has changed travel, from how airlines price and sell tickets to self-service check-in and baggage tagging. But many airlines have been struggling with what's next. Our Middle Seat columnist Scott McCartney writes about a "hack-a-thon" staged on a trip from New York to San Francisco, in which American Airlines put techies onboard to design and evaluate new tools in aviation. Some passengers previewed an app to track the health of your dog in the cargo hold and airport signs that recognize you when you walk by and flash your gate information. The winner came up with an app that would let a traveler designate one person to follow them through each step of the trip, providing notices, for example, when the traveler's smartphone passes beacons installed at airports. Meanwhile, don't miss our coverage of the Farnborough Air Show, where Boeing and Airbus have bolstered their order books by signing up customers for their single-aisle and long-range widebody jets.

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Number of the Day

3.96 million

The number of babies born in the U.S. last year. The country's fertility rate has dropped to a record low, prompting Procter & Gamble to re-enter the adult diaper market.

Quote of the Day

I believe that in as little as two years, the conversation can change, that VA can be the trusted provider of choice...We can turn these challenges into the greatest opportunity for improvement.

-- At a Senate Committee on Veterans's Affairs hearing, Sloan Gibson, acting VA Secretary, said the department needs an additional $17.6 billion over the next three years, which will pay for 10,000 clinical staff members to properly address problems highlighted over the past few months by investigations, internal reviews and complaints from veterans.

What do you think of Mr. Gibson's view? Send your response to 10point@wsj.com. Follow @GerardTBaker on Twitter and "like" my Facebook page.

—Compiled by Khadeeja Safdar

Reader Response

Yesterday we asked readers about Sen. Ben Cardin's rejection of the swift deportation of migrant children. Chris Rieser of Michigan wrote that "We ought to be working harder with Mexican and Central American governments to better manage the situation than just building a wall or sending people back." From North Carolina, Robert Goddard wrote: "...The sooner we start deportation of these new illegal immigrants, the sooner people in Central America will understand that the promises of the human smugglers based in their home countries are worthless, and this practice will stop." Tim Pasquarelli of Colorado wrote: "... (W)e can work diligently with other countries to help stem the tide of movement. We also need to change our visa program. In an open and viable market economy it is insane to limit work visas to a few tens of thousands when we have jobs and our businesses use millions of migrant workers..."

This daily briefing is named "The 10-Point" after the nickname conferred by the editors of The Wall Street Journal on the lead column of the legendary "What's News" digest of top stories. Technically, "10-point" referred to the size of the typeface. The type is smaller now but the name lives on.

Photo: Dominique Faget/Agence France-Presse/Getty Images