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Monday, June 5, 2017

Mexican peso recovers from Trump plunge; Will tourists avoid London?; Toyota dumps Tesla stake

Profitable Moment
 

Qatar's crisis felt high in the sky

The news about Saudi Arabia, Bahrain, Yemen and the UAE breaking off relations with Qatar arrived late in the evening here in Cancun, Mexico at the annual meeting of the International Air Transport Association (IATA).
 
The most immediate effect of this action is that flights between those countries and Qatar have been suspended. This is extremely significant because of the aviation role now played by Dubai's Emirates, the largest carrier in the world; Abu Dhabi's Etihad; and Qatar Airways.
 
Qatar Airways will no longer be able to fly over the other countries. They will need extensive re-routing to depart and arrive at Doha.

I spoke to representatives of many Middle East airlines. All of them left me in no doubt as to the seriousness of the situation. This full-scale breach is the closest you can come without declaring war, one person told me.
 
There is now turmoil in one of the most significant aviation regions in the world. The UAE with Dubai and Abu Dhabi. Qatar with Doha. Three major global hubs now in conflict.
 
Not surprisingly, global airline executives are walking the IATA conference halls deep in conversation, looking worried, questioning about what it means for the future of international aviation.
 
What do you think about the news on Qatar? Please email me your comments. 

 

-Richard.Quest@cnn.com 

What's new... what's next
 

By Matt Egan, Patrick Gillespie, Julia Horowitz and Paul R. La Monica of CNNMoney

1. Will tourists avoid London this summer?

The London attack last Saturday -- the third in the U.K. in three months -- could be the final straw for tourists on the fence. Research firm Euromonitor estimates that about 285,000 tourists could be swayed against visiting London this summer due to security concerns, and that demand may not recover until 2020. Prime Minister Theresa May also put major internet firms on the hot seat after she called on them to help weed out terrorists' communications online. For its part, Facebook says it wants to be "hostile" toward terrorists. 

2. Trump wants to privatize air traffic control

Cheaper, faster and safer. That's what Trump argues will happen if control of the skies is handed over to private business. He said the current air traffic control system is "stuck, painfully, in the past." Republicans and airlines support the move, which has already been done by Canada, Australia and Germany. Democrats argue private business can't be trusted here, pointing to the passenger who was dragged off a United flight as proof.

3. Unplugged: Toyota has sold its stake in Tesla

Toyota invested $50 million in Tesla when Elon Musk's company went public in 2010. But the Japanese auto giant revealed Monday it sold its remaining stake last year. The two briefly partnered on a RAV4 with Tesla technology. But Toyota is now stepping up plans to make its own electric cars. Toyota likely sold its Tesla stock at a huge profit, but it has missed out on even bigger gains in 2017. Shares of Tesla have soared more than 60% this year.

4. Peso fully recovers from Trump plunge

Mexico's currency has dug out of its Trump hole. The peso fully recovered Monday to its value from before President's Trump win in November. It plummeted after the election and fell steadily until the inauguration, dropping 14% in all. But there's always room for a good comeback story. Despite ongoing uncertainty about the relationship between the the U.S. and Mexico, the currency has been on the up-and-up, and rallied 1.5% against the dollar to start off the week.

5. Quick Takes:

United will stop flying from the U.S. to Venezuela starting in July

Google collects pollution data with Street View cameras -- as stock tops $1,000

Ivanka Trump's firm seeks trademarks in China, reviving WH ethics concerns

Trump wants to save coal. But he can't. Natural gas prices are just too low

Imagine a world with no apps. Apple thinks it's easy if you try

Verizon is this year's worst Dow stock. Doing too many deals? Or not enough?

Apple, Amazon, Facebook & Google express support for Paris climate deal

6. What's next:

Are Europeans shopping more? Investors have plowed money into the European stock market in recent months, betting the continent's economic recovery will accelerate. They'll look for evidence of a stronger recovery from Tuesday's report on eurozone retail sales for the month of April.  

Hearing to fill Trump vacancy: Kevin Hassett, nominated to lead the White House Council on Economic Advisers, is scheduled to get questioned by the Senate Banking Committee at 10 a.m. ET on Tuesday. This economic policy position has been unfilled nearly five months into Trump's presidency, allowing for Gary Cohn to exert more influence as the director of the National Economic Council.

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