Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

The Donald J. Trump Accord

Written by Scott Reid, associate partner
Edited by Harriet Moll, creative director
14 August 2020

Good morning,

Not many believed that the Trump administration’s particular form of diplomacy – dominated by the Trump extended family and a heavy use of WhatsApp notifications – would finally have its day.
 
And the United States has helped broker a historic peace deal that will normalise diplomatic relations between Israel and the United Arab Emirates for the first time.
 
As part of the agreement, Israeli president Benjamin Netanyahu has agreed to “delay” his country’s annexation of parts of the occupied West Bank, and Israeli sovereignty would still be pursued only “in full co-ordination with the US”. “Normalisation” of diplomatic relations means Israel and the UAE can now assume an exchange of embassies, mutual investment and normal trade and tourism ties. UAE will be the third Arab country to make such a move with Israel, after Egypt and Jordan.
 
Palestinian authorities were reported to be taken by surprise by the announcement. Palestinian Authority president Mahmoud Abbas denounced the deal as “a betrayal of Jerusalem” and announced the immediate withdrawal of its ambassador to the UAE.
 
In Washington, however, Donald Trump hailed the so-called Abraham Accord, named for the “father of all three great faiths” – Christian, Muslim and Jewish. “I wanted it to be called the Donald J. Trump Accord but I didn’t think the press would understand that,” Trump followed up.
 
But perhaps it should have been called the Jared Kushner Accord. Two insightful Atlantic articles this morning take a look at the crucial role played by the president’s son-in-law; one on why this deal came about in the first place, and another on the pedigree that got Kushner where he is today. His personal line to Saudi crown prince Mohammed bin Salman (supposedly Washington’s worst-kept secret) was apparently essential in reaching today’s accord. 
 
Expect today’s airwaves to be filled with speculation on what this agreement now means for Trump’s hopes of re-election come November. In short, it’s a feather in his cap. But, as the BBC defence correspondent Jonathan Marcus notes this morning, hype shouldn’t be overblown for what was in fact an inevitable deal.
 
Perhaps more intriguing is what the deal could mean for a future Democrat administration that has less personal affinity with the parties involved. Indeed, it was Kamala Harris who called for a reckoning of the fourth party in all this – Saudi Arabia – over the murder of journalist Kamal Khashoggi. She may now find it harder to be forthright with authoritarian leaders in the Middle East who are now getting along with each other.
 
For those Arab administrations eyeing the possibility of a new resident in the White House, this agreement is ”an insurance policy”, Atlantic writer Graeme Wood notes. And no doubt President Trump, and the rest of his brood, are hoping it plays similarly for their place in the history books.

News

President Trump yesterday suggested Kamala Harris’ eligibility to run for vice president may be in question, despite being born in the US. Trump said he would “take a look” into a Newsweek article penned by a “very talented” conservative lawyer, John Eastman, who suggested that the question of citizenship for a child born in the US to overseas nationals had never been considered by the Supreme Court.

France, Malta and the Netherlands have been added to the quarantine list for all UK arrivals. The move means that from 4am on Saturday, travellers returning from those countries – as well as Monaco, Turks & Caicos and Aruba – must self-isolate for 14 days following their arrival in the UK. Government explained its decision was made after France reported a 66% increase in the number of positive coronavirus tests in the past week.
 
And nearly 40% of A-Level students in England yesterday received lower final grades than those predicted by their teachers, leading to calls for a review into this year’s assessments. The numbers of those achieving the highest grades of A and A* across England, Northern Ireland and Wales, however, were up and 58.7% of grades remained the same.

Business and economy

The UK government has signed deals for a further 90 million doses of the coronavirus vaccine. The latest agreements are with Belgian pharmaceutical company Janssen and US biotech company Novavax, bringing the UK’s total potential stockpile to 340 million doses.
 
The number of Americans filing new claims for unemployment benefit has fallen below one million for the first time since March. The US Labor Department estimated that around 963,000 people sought unemployment benefit last week, down from 1.2 million the week before. More than 28 million people – nearly one in five American workers – remain on the benefit register.
 
A Scottish Chambers of Commerce survey has reported that less than half of Scottish companies expect to be working at near to full capacity by the start of 2021. The chamber of commerce’s coronavirus survey tracker found only 44% anticipated a return to at least three-quarters capacity, while 31% indicated they would be operating at half capacity or less.
 
And almost 300 workers at a supplier factory to M&S in Northampton have tested positive for coronavirus. Greencore, which employees 2,100 people, reported 299 positive tests whose contacts are now being traced. Production will continue at the plant while those affected self-isolate.

Columns of note

In the Spectator, Alex Massie argues that unionists cannot take refuge in signs of internal hostilities within the SNP as Scottish public opinion moves in favour of independence. He suggests that neither are demographics on the Union’s side and that the more the question of a second referendum is rejected, the more reasonable a suggestion it becomes. (£)
 
And in The Atlantic, Franklin Foer looks at the often overlooked story of the second most powerful man in The White House; Jared Kushner. Coming from an elite background and education, Kushner believes himself eminently capable of dealing with the US’ Covid-19 crisis – a self-belief and penchant for deference that Foer believes have combined to enable some of his father-in-law’s worst impulses as president. (£)

Cartoon source : The New Yorker

Markets

What happened yesterday?

US stocks briefly surpassed the all-time closing high reached before the coronavirus pandemic as shares of major tech companies recovered some of their steep losses from the previous session. The S&P 500 Index jumped 1.4% to 3,380.35, the highest in about six months. The Nasdaq Composite Index and The Dow Jones Industrial Average also rose sharply at 2.13% and 1.05% respectively.

In Europe, stocks closed higher as investors continued to bet on an impending economic recovery from the coronavirus crisis. London’s FTSE 100 ended the session up at 2.04% following signs of a recovery in economic output in June and the FTSE 250 was 0.51% firmer at 18,089.58.

In terms of bonds, the yield on 10-year treasuries climbed two basis points to 0.66%, the highest in more than five weeks while Britain’s 10-year yield gained four basis points to 0.237%, the highest in almost eight weeks. 

On the currency markets, the pound ended down 0.01% against the dollar to $103047, losing 0.49% on the euro to €1.1061.

Copper climbed 0.2% to $2.88 a pound and gold slightly changed at $1,911.27 an ounce.

On the currency markets, the pound was down 0.15% against the dollar at $1.31 and edged down 0.13% against the euro at €1.11.
 
In company news:
 

Online fashion retailer ASOS has increased its sales forecast for the year ahead, reporting an increase in full year pre-tax profit to £80 million amidst growing demand. 

The London-based online food order and delivery service Just Eat Takeaway.com‘s stock price rose 3.2% to 102.46 after reporting higher revenues and underlying profit for the first half of 2020. The European food-ordering firm posted EBITDA of 177 million euros, a 44% year-on-year increase. 

NatWest is cutting at least 550 jobs across its retail business and will close a major London office as it battles to cut costs during the Covid-19 crisis. 

China’s Lenovo Group reported a better-than-expected 31% jump in quarterly profits and said it is capturing opportunities emerging from remote working. 

What’s happening today?

Interims
Romgaz S
Verona Pharma VRP
Westminster Group
Yew Grove Reit.

AGMs
Adamas Fin
Baker Steel
NewRiver

Annual report
Abbey

Int. economic announcements
(10:00) GDP (Preliminary) (EU)
(10:00) Balance of Trade (EU)
(13:30) Retail Sales (US)
(14:15) Industrial Production (US)
(14:15) Capacity Utilisation (US)
(15:00) Business Inventories (US)
(15:00) U. of Michigan Confidence (Prelim) (US)

Source: Financial Times

did you know

The UK’s discarded bread is estimated to contribute a roughly similar carbon footprint per year as a million flights from London to New York.
 
Source: @quiteinteresting

Parliamentary highlights

House of Commons

In recess until 1 September

House of Lords 

In recess until 2 September 2020.

Scottish Parliament 

No business scheduled

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on email

Copyright© 2020 Charlotte Street Partners