Recession fears evoke deja vu. The Middle East might be safe
It's been a time of tumult on Wall Street – at the hands of the White House.
US President Donald Trump made his plans for tariffs known on the campaign trail, but their scale has taken the world by surprise.
The sweeping tariffs sent global markets into chaos. Then, with the announcement of a 90-day pause, things calmed down. But that hasn't done much for perhaps the greatest fear among investors and the public: the possibility of recession.
We've heard about so-called recession indicators – particularly as they pertain to the US. Here in the Middle East, though, the outlook might not be so grim.
On this episode of Business Extra, we explore the basis of the recession fears and what that means for markets and, ultimately, consumers.
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Middle East Eye
18 minutes ago
- Middle East Eye
How big tech and populism are upending 'western values'
The highly tense and polarised situation within the US and EU raises unprecedented challenges, especially amid the ongoing shifting of the global order from a unipolar to a multipolar one. Since the beginning the of the 21st century, the world has been embroiled in a series of crises: the war on terror, the global financial crisis, intensifying climate change, a worldwide pandemic, and a renewed great-power competition. This uneasy landscape has been further complicated by the Fourth Industrial Revolution, of which artificial intelligence is the most compelling and pervasive example, alongside the crisis of globalisation, the rise of China and the start of the second Trump administration. On the latter point, US President Donald Trump is now contesting, if not repudiating, the same world order that Washington created, managed and enforced over the past eight decades. His administration is wielding its new army of big tech companies in an alleged pursuit of a political, economic, cultural and social metamorphosis of humankind. It is not yet clear whether these big tech players will be a tool in the hands of Trump's 'America First' vision, or vice versa. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters As the late former secretary of state, Henry Kissinger, remarked seven years ago: 'Trump may be one of those figures in history who appears from time to time to mark the end of an era and to force it to give up its old pretences. It doesn't necessarily mean that he knows this, or that he is considering any great alternative. It could just be an accident.' New words have emerged in the current lexicon to explain this epochal change, such as techno-feudalism, techno-optimism and 'Dark Enlightenment'. A cast of characters from big tech - somewhere between CEOs and gurus - are now influencing politics, economics and the relationship between humans and technology to an unprecedented degree. 'Shadow empire' Some of these figures are in the spotlight daily, such as Tesla's Elon Musk, Open AI's Sam Altman and Meta's Mark Zuckerberg, while others seem more comfortable leading from behind the scenes. Some are perceived as the vanguard of 'reactionary acceleration', while others, like Palantir co-founder Peter Thiel, who mentored Vice President JD Vance, portrays this period as the 'dusky final weeks of our interregnum' - or, if you prefer, the last days of an ancien regime; a sort of twilight, or worse, an apocalypse. It may be that change of era of which the late Pope Francis warned five years ago in his astute encyclical 'Fratelli Tutti' (All Brothers). Both European and American liberal-democratic establishments believe this change brings a fundamental threat to democracy and western societies, along with the 'values' upon which they are built. Who ultimately has the right to decide who's in and who's out? In normal times, this power would be in the hands of the electors They seem terrified by the possible rise of what has been described brilliantly, but disturbingly, as a 'shadow empire' driven by big tech magnates. At the same time, the rise of far-right movements in the US and Europe is seen as a clear and present danger that requires a 'whatever it takes' approach to keep these parties out of power. These widespread fears could explain some unprecedented developments in recent months in France, Germany and Romania. In France, Marine Le Pen's National Rally made significant gains in last year's legislative elections, despite a massive mobilisation against the party - but now a criminal conviction could derail her future political prospects. In Germany, a similar mobilisation occurred against the far-right Alternative fur Deutschland (AfD), but the party still managed to double its vote share in February elections. Yet it now risks being banned after Germany's spy agency classified AfD as 'extremist', allowing for increased state monitoring. Populists on the rise The most stunning event, however, was in Romania, where presidential elections were cancelled by the country's constitutional court last December after the first round was won by far-right candidate Calin Georgescu, amid allegations of Russian interference. Among the evidence cited in the declassified Romanian intelligence documents used to justify this decision was a coordinated TikTok campaign - but an investigative report later revealed that the centre-right National Liberal Party had paid for the campaign, which was hijacked to benefit Georgescu, who was subsequently banned from standing in the new election. Paris, Berlin and Bucharest have thus provided compelling examples of what 'whatever it takes' might mean. Amusingly, such behaviour drew criticism from Vance - not exactly a champion in the observance of democratic values - during his recent speech at the Munich Security Conference. The new fascism: Israel is the template for Trump and Europe's war on freedom Read More » 'For years, we've been told that everything we fund and support is in the name of our shared democratic values. Everything from our Ukraine policy to digital censorship is billed as a defence of democracy,' Vance said. 'But when we see European courts cancelling elections and senior officials threatening to cancel others, we ought to ask whether we're holding ourselves to an appropriately high standard.' The bare facts, however, are that some of these populist forces are already in power, from Trump and his Maga supporters in the US; to Giorgia Meloni, now into her third year as Italy's prime minister; to the relaxed Viktor Orban who rules Hungary; to Slovakian Prime Minister Robert Fico, who has already survived an assassination attempt. Similar political forces appear to be on the rise in other countries. Some polls show a commanding lead for Reform UK, led by Nigel Farage. In Poland, an EU sceptic has just been elected president. Curiously, there is not much pushback over the questionable tactics and techniques being employed across Europe in efforts to keep far-right contenders out of power. Are such moves justifiable to bar from office allegedly undemocratic political figures and movements? Who ultimately has the right to decide who's in and who's out? In normal times, this power would be in the hands of the electors - but these do not seem to be normal times. The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
The National
36 minutes ago
- The National
Oil heading for weekly gain amid optimism over US-China tariff talks
Oil prices were up on Friday and were heading for their first weekly gain in three weeks amid hopes for a US-China deal on tariffs. Brent, the benchmark for two thirds of the world's oil, was up 0.11 per cent at $65.41 a barrel at 2.49pm UAE time. West Texas Intermediate, the gauge that tracks US crude, added 0.05 per cent to $63.40 per barrel. Both Brent and WTI, which reversed earlier losses on Friday, are on pace for a 4.2 per cent weekly gain. For the year, they are down about 12 per cent. Crude futures posted modest gains on Thursday, but the market became more optimistic after a phone call between US President Donald Trump and China's Xi Jinping, who agreed to resume negotiations on trade and tariffs. The US and China are the two main protagonists in the global trade war, imposing tit-for-tat levies on each other's imports. However, they agreed to a detente on May 12, with Washington lowering its 145 per cent tariffs on Chinese imports to 30 per cent, while Beijing dialled down its own levies from 125 per cent to 10 per cent. The call between the two leaders, a sign of progress in their countries' negotiations, 'prompt[ed] relief after a recent escalation in tensions', analysts at Vanda Insights said. Crude prices took a hit after Mr Trump's sweeping global tariffs announced on April 2 disrupted stock markets and reignited fears of a global recession. However, with many of the tariffs temporarily paused and the US seeking deals with its partners, the uncertainty has reduced. A positive sign for oil prices is the decline in US oil inventories, indicating demand for the commodity remains strong. At the moment, market fundamentals seem to remain balanced, especially after Opec+ last month agreed to increase its monthly oil output at 411,000 barrels per day for July, the same as in May and June, analysts at Fitch unit BMI said. The decision was 'in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories', the group said. Opec+ noted that gradual increases may be paused or reversed 'subject to evolving market conditions' and 'flexibility will allow the group to continue to support oil market stability'. Analysts say the move by Opec+ may be a gesture to mollify Mr Trump, who has called for lower crude prices. BMI analysts, however, cautioned that any slower economic growth later in 2025 'will see markets tip into oversupply'. They also expect a similar production rise for August, 'should market conditions and prices remain steady'. 'But both weaker demand for oil and increased production from both Opec+ and non-Opec producers will add to downside price pressures in the coming quarters,' BMI said. Upstream oil investments are projected to be under $570 billion in 2025, which would be a 6 per cent decline, marking the first annual drop since the Covid-induced slide in 2020 and the largest since 2016, the International Energy Agency said on Thursday. The decrease is being attributed to lower oil prices and demand expectations, amid economic uncertainties, the Paris-based IEA said.
The National
2 hours ago
- The National
'Trumped' again: Taking stock of Tesla's market ups and downs
Tesla Motors' stock price is taking a beating again, this time because of the very high-profile squabble between chief executive Elon Musk and US President Donald Trump. Its 15 per cent decline on Thursday reflects the volatility that shadows the company's shares, which remain vulnerable to everything from market trends to short tweets, especially from Mr Musk. Now, with his increasingly bitter fight with Mr Trump, Mr Musk might find himself on the short end of the stick: once a trusted adviser, he has now fallen out of favour with his blitz of criticism over Mr Trump's "big, beautiful" budget bill. Mr Musk derided it as a "disgusting abomination". His gripes won't surely sit well with a "very disappointed" Mr Trump, who is notorious for getting back at his critics. Mr Musk curried favours during his time in the US administration, securing contracts and deals for his companies. Those favours are now likely up in the air. Mr Trump had already suggested that one way to save "billions and billions" is to "terminate" Mr Musk's government subsidies and contracts. It's a spectacular U-turn for the once allies; Mr Trump said he even bought a Tesla to show his support for Mr Musk. Losing the White House's support would be "terrible for Tesla, which is being eaten alive in Europe and Asia by Chinese competition, and Elon Musk's irritating involvement in politics", said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. She pointed out that Mr Musk would need the President's support, especially for Tesla's self-driving cars and Robotaxis, which "need friendly legislation to thrive". "Legislation is Trump. The hype around Tesla is not looking good," she added. Tesla's shares were up nearly 5 per cent in premarket trading on Friday amid reports of a scheduled call between Mr Trump and Mr Musk to end the spat. While Tesla's stock still remains slightly above its level when Mr Trump won his second presidency in November – Mr Musk splashed $250 million to help ensure that – it's now uncertain how the Musk-Trump clash will affect its share price moving forward. Here are some of the biggest movements in Tesla's stock history. July 24, 2024: Competition heat Tesla's stock dove 12 per cent to $215.99 after its second-quarter financials disappointed, with revenue sliding 7 per cent. The EV maker began feeling the heat from intense competition, most notably from China, as BYD famously overtook it as the world's biggest EV maker in the fourth quarter of 2023 and, subsequently, for the entirety of 2024. October 24, 2024: 22% blitz After solid third quarter financials that saw Mr Musk boldly projecting up to 30 per cent more sales in 2025, Tesla's stock rocketed nearly 22 per cent, putting investors at ease. This was the biggest single-day gain in more than a decade, which also added $150 billion to the company's market value. November 11, 2024: Tesla gets 'Trumped' Tesla gained nearly 9 per cent to $350 as investors expected the alliance between Mr Musk and the then president-elect Mr Trump to further boost its stock. The world's wealthiest person threw in about $250 million into Mr Trump's campaign to help the latter recapture the White House earlier that month. January 2, 2025: New Year's peeve After a series of highs, Tesla came back down, starting the new year with a more than 6 per cent drop to $379.28 after deliveries posted their first decline in a decade. This was also the first time the stock went below the $400 level in nearly a month. February 11, 2025: BYD strikes again After the previous coups, BYD once again hit Tesla, this time as it partnered with fellow Chinese company DeepSeek – famous for putting a dent into the auras of OpenAI and Nvidia – to utilise artificial intelligence in autonomous vehicles. That caused Tesla's stock to shed 6.3 per cent to $328.50. March 10 to April 9, 2025: Tariff see-saw The beginning of the Trump tariff effect: on March 10, Tesla's stock slid more than 15 per cent to $222.15, amid concerns and uncertainty around Mr Trump's planned tariffs. It didn't last long, as the company's share price worked its way back up, peaking – for this period – at $288.14 on March 25, as Mr Trump signalled he might scale back some of the levies. Mr Trump unveiled his Liberation Day tariffs on April 2. By April 8, investors were now raising concerns on how the company would cope with them: that combination pulled down Tesla's shares nearly 5 per cent to $221.86, its lowest since the March 10 slide. This time, it seemed like a blip: the following day, April 9, Tesla shares soared more than 22 per cent after Benchmark Company analyst Mickey Legg dismissed the sell-off as 'overblown'. April 21, 2025: Dogged by Doge Tesla shares gave up almost 6 per cent analyst fears that there was an 'continuing brand erosion' stemming from Mr Musk's role in the Trump administration. Mr Musk and Tesla had already been feeling the backlash: consumers and the general public, particularly those incensed by his federal job and budget cutting, have protested outside Tesla stores and vandalised its EVs, in addition to Tesla owners "rebranding" their cars out of protest. May 14, 2025: Tariff reprieve Tesla gained more than 9 per cent to $347.68 from the close on May 12 – the day the US and China agreed to temporarily halt their tit-for-tat tariffs. The company's stock would then remain largely steady, until Mr Musk departed from his role in the US government – leading to the public squabble with Mr Trump.
