Markets slide on Trump and terror concerns – business live

European markets set to open lower after Wall Street suffers second biggest drop of the year

It may be a summer lull in the business world in many ways but there are still a few key events to come, so here’s a quick preview of next week from IHS Markit:

Next week’s economic diary includes the flash #PMI surveys for the US, Eurozone & Japan plus UK #GDP. Read more here https://t.co/53Tv6QHZBB pic.twitter.com/VFRkCcoAXH

Here’s Neil Wilson, senior market analyst at ETX Capital, on the fall in airline shares:

Airlines bore the brunt of a risk-off turn on the open, with shares in Ryanair, IAG, Air France KLM, Lufthansa and EasyJet all slumping following the terror attacks in Spain. As we’ve seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings. Investors are concerned that demand will fall over the rest of the year, which was already looking like it would be a tough patch for the industry.

Airlines are already dealing with a price war and several have warned about the second half. The attacks in Spain will do nothing to help and should hit earnings, although we won’t know to what extent until the quarterly updates come in.

The Spanish market, inevitably, is also among the losers. The Ibex is currently down 1.1%, but has recovered a little from its worst levels.

It is no wonder investors are shying away from equities, says David Morrison, senior market strategist at SpreadCo:

European equities and US stock index futures have begun today’s session on the back foot. This follows yesterday’s sharp sell-off on Wall Street which saw the major indices log some of their biggest daily losses so far this year.

The move mimics that from last week. Back then investors dumped equities after President Trump responded to North Korea’s threat to fire missiles towards Guam with a couple of bellicose tweets.

Renewed worries about tourism in the wake of the Barcelona attacks have sent the European travel and leisure sector index down 1.4% in early trading.

Following the Barcelona attacks, markets have opened sharply lower.

The FTSE 100 is down 0.66%, with airlines easyJet and International Airlines Group leading the fallers on fears about the effect the attacks may have on tourism.

Even this early in the day, Heineken directors may well be raising a glass after the Competition Commission gave the go-ahead to the company’s £403m purchase of 1,900 pubs from Punch Taverns.

There were concerns about the impact on the ranges of cider and beer supplied to pubs in 33 local areas, but the regulator has accepted Heineken’s proposals to sell pubs in the affected areas.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The recent brief revival in stock markets has come to a grinding halt, as Donald Trump’s presidency descends into further confusion and the Barcelona attacks revive terrorism fears.

Our European opening calls:$FTSE 7353 -0.48%
$DAX 12140 -0.52%
$CAC 5116 -0.59%$IBEX 10369 -0.72%$MIB 21669 -0.55%

For several months US markets have managed to give President Trump the benefit of the doubt with respect to the implementation of some form of fiscal or tax reform, particularly since he appeared to have the support of the business community, and for the most part, many in the Republican Party.

This confidence appears to be slowly melting away given recent events that have taken place in the aftermath of Charlottesville, as US politics descends into parody.

Related: Barcelona attack: five suspects killed in Cambrils in second terrorist attack – latest updates

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Brexit Britain And Trump America: A New “Special Relationship”?

Authored by Henrik Choy via NationalInterest.org,

Can common enemies and threats keep Britain and the United States together for decades to come?

British prime minister Theresa May’s narrow victory in the 2017 general election has earned her the reputation of a “dead woman walking,” given that her failure to win a Conservative majority in the House of Commons has drastically slimmed her chances of executing her party’s manifesto. Across the Atlantic, President Donald Trump is facing domestic and international problems of his own. Faced with polarization in both their parties and respective countries, Trump and May face uphill battles to achieve their political agendas. Appealing to the more nationalist and populist elements of society, Trump and May have entered uncharted territory by promising to tackle issues in ways that differ from their predecessors. For decades, Britain and the United States have been bound together in a unique relationship through their common vision of a world they wish to create, the external and internal threats they share, and the personal relationships their leaders have developed. Today, the changing mood in both Washington and London is forging an unusual new chapter in this long standing “special relationship.” Trump and May face an uncertain future, but they can still look back to see how their predecessors maintained the Anglo-American special relationship during the tumultuous and transformative years following World War II.

1941: A Grand Vision

Coined in 1946 by British prime minister Winston Churchill, the term “special relationship” between Britain and the United States describes a bond born out of common cause in defeating the fascist powers in World War II. Since then, it has endured strain and a cyclical reinvigoration of mutual understanding and commitment. While the origins of this relationship precedes World War II, it was solidified in 1941. That’s when Churchill and President Franklin D. Roosevelt came up with eight principles that were to promote world peace and spread democracy worldwide: the Atlantic Charter. These principles, with a general emphasis on Wilsonian style self-determination and economic liberalization, would act as a foundation for the Anglo-American special relationship well into the twenty-first century. World War II left a power vacuum that the North American superpower quickly raced to fill at the encouragement of the exhausted Brits. Under the guidance of the Atlantic Charter, both Britain and the United States utilized their power and influence to create the United Nations and develop other international organizations based on the liberal Western democratic vision of the world. The Soviet Union and its allies challenged this vision, creating a common threat against which the United States and Britain could consolidate the anti-Communist bloc under the North Atlantic Treaty Organization.

In addition to pursuing a common cause, British and American leaders developed personal bonds that were crucial in the early days of the special relationship, as demonstrated by Churchill and Roosevelt. Away from the war maps and professional public atmosphere, the two men had their personal bonding moments, such as when the president accidentally walked into the prime minister’s room in Washington to find him naked shortly after showering. The joyful Brit assured the embarrassed Yank that he had nothing to hide.

The close-knit relationship was not always smooth, as disagreements erupted early over how to honor the principles of the Atlantic Charter. On one hand, Britain was very reluctant at first to grant independence to its colonies, while the United States appeared idealistically hypocritical with its increased military involvement in Vietnam throughout the 1960s and 1970s. The Suez Crisis of 1956 represented the low point in bilateral relations, when Prime Minister Anthony Eden’s decision to send troops to Egypt along with French and Israeli forces angered President Eisenhower. Unlike his predecessor, Eisenhower did not have the best relations with Churchill during World War II and was suspicious of British colonial interests after the conflict ended. The Suez Crisis demonstrated that the former general had had enough of dealing with British politicians, angry that his counterparts in Westminster had not given him prior notice of this military venture.

1980s: Cold War Hawks

By the early 1980s, new leadership on both sides of the Atlantic reinvigorated the special relationship in a way not seen since the end of World War II. President Ronald Reagan and British prime minister Margaret Thatcher both came to power with the intention of reintroducing the old school Anglo-American way of thinking, with an emphasis on free-market capitalism, less government intervention, and a hard-line foreign-policy stance against the Soviet Union and Communism. The two had each other’s back in times of international crisis, with the United States supporting Britain in its 1982 war over the Falkland Islands, and Britain allowing the United States to use its airbases during the latter’s bombing campaign against Libya in 1986. It was this ability to see eye-to-eye that made it easier for them to cooperate in the struggle against Communism and engage with Mikhail Gorbachev and his attempts to reduce tensions with the West. This would help bring down the Berlin Wall and, eventually, the whole Eastern bloc.

For Reagan and Thatcher, their ideological perspectives made them ideal partners but also created numerous disagreements. Reagan was initially reluctant to support Thatcher’s war against Argentina’s military junta in 1982, as Buenos Aires was a key anti-Communist ally. In 1986, Thatcher flew to Iceland to convince Reagan to forgo the Reykjavik Summit due to her fear of the security consequences of nuclear disarmament. Nevertheless, both leaders managed to contain any bilateral dispute that came in the way of the special relationship, which they both needed in order to sustain a hard-line approach against the Soviet Union. Their unwavering friendship hastened the end of the Cold War, bringing a new chapter for the special relationship and opening up new opportunities for their successors to implement the ideals of the Atlantic Charter.

1990s–2000s: New Idealists

The United States found itself being the world’s undisputed superpower in the early 1990s, with Western capitalism attempting to fill the vacuum left as a result of the collapse of the Eastern bloc. The “Washington Consensus,” a term coined by British economist John Williamson, was essentially an expansion of the Atlantic Charter’s principle of economic liberation. Interestingly enough, it was not the Thatcherites or the Reaganites who brought this new “consensus” into the twenty-first century, but the traditional left-leaning political parties and politicians who accelerated the transition towards globalized capitalism. President Bill Clinton’s “New Democrats” and Prime Minister Tony Blair’s “New Labour” party revealed their firm idealistic views for a new world order based on the Atlantic Charter, which meant encouraging developing countries to open up their markets to Western capital investments, as well as military interventions (very reluctantly in most cases) to stop the rising power of authoritarian leaders. The most notable foreign-policy issue of the Clinton-Blair years was the successful intervention in Kosovo in 1999. The joint Anglo-American decision to pressure Yugoslav president Milosevic to end hostilities proved to be the decisive move that tipped the balance against the use of mass violence to achieve political objectives in the Balkans. This active interventionist policy carried over when George W. Bush took over as president. Despite coming from different political backgrounds, the new president and Blair got along well and bolstered the special relationship as they joined together to fight the War on Terror in wake of the 9/11 attacks. Their unshakable belief in promoting democracy led to their fateful decisions to invade Afghanistan and Iraq. As the conflicts dragged on with increasing loss of life and money, both leaders faced mounting political backlash for being overly ambitious and perhaps carried away in their idealistic military crusades. By 2008, the war-weary public gave their optimistic leaders the boot when the housing market crashed and a worldwide recession brought tensions to a boiling point. Bush and Blair left office with controversial scars on their political legacies and domestic populations that today are increasingly skeptical of the global neoliberal economic system and the interventionist military policies they pursued during their leaderships.

2010s: Reluctant Partners

By the time Barack Obama entered the White House in 2009 and David Cameron took his first steps to 10 Downing Street in 2010, the special relationship was at risk of being pulled apart by dissatisfied populations on both sides of the Atlantic. These new leaders took measures to resolve the problems that their predecessors left behind, although they had stark disagreements regarding the best methods to tackle them. Starting with the economy, the Obama administration implemented deficit spending to bail out the nation’s most troubled banks, acquire debt-ridden assets, and ultimately pull the nation out of recession. Across the Atlantic, Cameron pushed through a series of austerity measures that gradually reduced Britain’s deficits, but nonetheless caused major contractions in the economy. The arduous task of restoring public confidence in the global capitalist system was quickly followed by the problems related to the War on Terror and other matters of foreign policy. Cameron resembled his predecessor more than Obama resembled his, opting for direct intervention where there was trouble. The prime minister took the helm with French president Sarkozy in the overthrow of Muammar el-Qaddafi in 2011, with reluctant support from the Obama administration. It was the crisis in Syria that brought the biggest challenge to both Obama and Cameron and ultimately the Anglo-American special relationship. In August 2013 both governments were ready to use military force in response to Assad’s use of chemical weapons. Their plans fell apart after a vote from both Parliament and Congress shut down the idea, a reminder that the public had not forgotten the long drawn-out wars from the Bush and Blair years.

Relations between Obama and Cameron did not improve much. The Brexit referendum in June 2016 and the election of president Donald Trump in November of that same year saw the end of their administrations and also the end of the world they both knew. As much as Obama and Cameron differed in the best course of action when responding to crises, they both shared the vision that their predecessors had and openly sought policies that promoted democratic values and globalized trade. Their legacies will be saturated with the failure to bring peace to the Middle East, unpopular economic policies that stirred populist sentiment, a divided Europe in wake of the Brexit referendum, the growing scarcity of jobs available for the working and middle classes, and ultimately the end of the Atlantic Charter establishment as we knew it.

Today: A New Type of Special Relationship?

Where does that leave the special relationship today? To start off, neither the Atlantic Charter nor any of its post–1941 evolutions appear to be the guiding principle for today’s Anglo-American special relationship. President Trump and Prime Minister May share a vision of the world that departs from the neoliberal policies of their predecessors and focuses more on protecting jobs at home and the public from terrorism. Both leaders are suspicious of twenty-first century globalization, and they hope to challenge this trend by implementing policies that reflect the interests of the nationalist and populist sectors.

Economically, Trump and May have already begun pursuing such policies, with the former having withdrawn the United States from the Trans-Pacific Partnership and renegotiating the U.S. position in the North American Free Trade Agreement, and the latter having activated Article 50 in March of this year. We will most likely see a general shift in preference towards bilateral free-trade agreements and away from multilateral ones. This will allow them to pick and choose which nations they would like to trade freely with and also provide more leverage in negotiating trade terms. Both leaders, however, may find it difficult to maintain such policies. May’s weakened position following the 2017 general election and the creation of a coalition government with the Democratic Unionist Party may pressure her to compromise on the “hard Brexit” that she originally sought, potentially leaving the border between Northern Ireland and the Republic of Ireland as an EU-style free-trade zone. Should this happen, an ideal response would be for both nations to prioritize a U.S.-UK free trade deal. This has already been put on the table, as both leaders have expressed great interest during the recent G20 Summit in Hamburg. Such a deal could potentially open up new bilateral deals with other nations worldwide, with an emphasis on the Commonwealth of Nations, such as Canada, Australia and New Zealand, as well as with wealthy developing economies throughout Latin America, Asia and Africa.

Common enemies and threats have kept Britain and the United States together for decades. Today’s leaders agree that global terrorism is a major threat that has to be dealt with. Trump and May have pledged to continue the War on Terror in response to the recent terror attacks that hit Britain. Although Trump himself did not explicitly endorse NATO initially, he has since backtracked from his previous remarks during the joint press conference with the Romanian president in June, ensuring that the United States will continue to be a major player in military global affairs. Even before changing his opinion, Trump has demonstrated his willingness to use force after his decision to strike a Syrian airbase in April of this year. While May has promised to increase defense spending, she has a long way to build up her credibility due to the major defense cuts she oversaw as Home Secretary under Cameron’s administration. Considering both nations have shaky relations with the EU, they may have little choice than to rely more on members of the Five Eyes intelligence pact for information, binding the major English-speaking nations closer than ever before.

Trump and May appear to have started off well in a long-term partnership, given that they are both struggling to deal with domestic problems and shaky international reputations. Their suspicions of modern globalization, in particular towards free trade and immigration, will cement their personal bond. But that does not mean they will entirely escape the looming possibility that their shared vision of a post–Atlantic Charter era may follow up with disagreements. Disputes regarding intelligence sharing after the Manchester attacks in May of this year have opened up potential weak spots in the struggle against terrorism, and the pursuit of bilateral trade agreements may not be enough to sustain economic growth in the long run. Trump and May’s vision to roll back post-war Atlantic Charter ideals may become compromised should their execution strategies conflict with one another.

For the moment however, the current leaders of the Anglo-American partners seem content with one another and will put their differences aside to tackle bigger problems that lie ahead. May’s stiff manner may clash with Trump’s blunt character, but their common interests and the threats they face will more than overcome the obstacles in developing a resurgent special relationship. Their desire to create new economic models, fight global terrorism, and promote democratic values without excessive military intervention will ensure the transatlantic alliance does not falter. If Trump and May are serious about transforming the world, then perhaps it is time for them to fully understand the significance of the special relationship and to realize the potential impacts they could have on a global scale.

Urban Warfare: NATO Issues RFP For Training To Fight In Big Cities With “Dense, Interconnected Populations”

Throughout the 2016 campaigning cycle, then candidate Trump frequently criticized NATO as “obsolete” and repeatedly knocked allies for not paying their “fair share.”

Then, in a shocking reversal, Trump hosted a joint press conference with NATO Secretary General Stoltenberg, just a few months after moving into the White House, in which he declared: “I said it was obsolete.  It’s no longer obsolete.”

“The Secretary General and I had a productive discussion about what more NATO could do in the fight against terrorism.  I complained about that a long time ago and they made a change.  And now they do fight terrorism.  I said it was obsolete.  It’s no longer obsolete.”

 

Well, it now seems he may have been right in the first instance.  According to a new request for pricing (RFP) from NATO entitled, “Development of NATA Military Operations In Urban Environment Concept,” NATO forces are “not sufficiently organized, trained, or equipped to  comprehensively understand and execute precise operations” in modern urban environments.  Here’s how NATO defines their problem:

Problem statement: NATO is not sufficiently organized, trained, or equipped to  comprehensively understand and execute precise operations across the maritime, cyberspace, land, air, space dimensions/domains in order to create desired effects in an emergent complex, urban littoral system possessing a dense, interconnected population.

 

So why the sudden interest in urban warfare?  NATO’s RFP conveniently cites urban population statistics from the United Nations as its justification but that’s hardly a new trend so it will undoubtedly leave the cynics among us a bit skeptical.

Projections by the United Nations indicate that by the year 2035 the world population will increase to 8.7 billion people, an increase of 1.4 billion people, and that most of this growth will take place in developing countries and in urban areas. Currently 80% of the global population lives on or within 100 km of the coast; this also will likely continue. The SFA1 2013 Report – including 2015 Interim Update Report and the FFAO2 2015 have identified this trend of urbanisation as a potential instability situation for NATO. The world as a whole passed the 50% urban mark seven years ago. Estimates are that five billion people live in cities with two billion of these living in slums. It is also estimated that 1.4 million people worldwide migrate to cities each week. Studies, based upon global demographic trends, suggest that an increasing percentage of armed conflicts will likely be fought in urban surroundings.

But, irrespective of the motivation, one thing is certain…modernizing an “obsolete” international force is going to be expensive.  Perhaps it’s time for Trump to write up some new invoices