The daily business briefing: May 30, 2017
British Airways stock drops after IT meltdown, Draghi warns U.S. protectionism could be a drag on Europe, and more
British Airways resolves IT problems, but stock drops
British Airways CEO Alex Cruz said Monday that he was "profusely apologetic" about a "catastrophic" computer failure that led to the cancellation of dozens of flights and disrupted travel for 75,000 passengers over a U.K. holiday weekend. Cruz said such a meltdown would "never again" be allowed to disrupt flights. He said he would not resign over the incident, which he said had nothing to do with cost savings measures he implemented after taking over leadership of the airline last year. Union leaders have said that IT outsourcing to India opened the door to computer-system glitches. British Airways said its IT systems were running normally on Tuesday, but its parent company's shares fell by 3 percent as trading resumed after a three-day holiday weekend.
Draghi says U.S. protectionism could be a drag on Europe's recovery
European Central Bank President Mario Draghi on Monday praised the euro zone's four-year recovery, saying that U.S. protectionism was now one of the main threats to the region's economic health. Draghi, speaking to the European Parliament in Brussels a day after German Chancellor Angela Merkel said Europe can no longer rely on the U.S. as it did before President Trump took office, became the latest European leader to suggest that ties with the U.S. were weakening. "The neo-protectionist stances that have been stated in the United States are certainly of concern," Draghi said. On his nine-day foreign trip, Trump scolded NATO allies for not spending enough on defense, refused to commit to staying in the Paris climate accord, and called Germany's trade surplus "very bad."
U.S. warns WTO of possible solar tariffs
The Trump administration has notified the World Trade Organization that it is considering imposing emergency "safeguard" tariffs on imported solar cells to protect American companies, according to a filing with the 164-member WTO published Monday. The U.S. is competing with China and India to lead the fast-growing solar power industry, triggering an exchange of complaints about unfair trade practices. Last September, the WTO found that India was illegally discriminating against U.S. solar-cell exports, and India claimed that solar subsidies in eight U.S. states were giving producers there unfair advantages.
U.S. futures hold steady after last week's records
U.S. stock futures held steady early Tuesday before the resumption of trading after the long Memorial Day weekend. The main U.S. benchmark indexes — the S&P 500, Dow Jones Industrial Average, and the Nasdaq-100 — were all down by 0.1 percent or less. Analysts said last week's gains, which pushed U.S. stocks back into record territory, could be an indication that the bull market is back after a brief retreat. U.S. markets were closed Monday, but both the S&P and Nasdaq Composite closed at all-time highs on Friday after weekly gains of 1.4 percent for the S&P 500 and 2.1 percent for the Nasdaq.
German inflation slows more than expected
Inflation slowed in Germany this month by more than expected, easing pressure on the European Central Bank to wind down its monetary stimulus program soon. The data showed Germany's consumer inflation falling just below the ECB's 2 percent target. This comes after Spain, the euro zone's No. 4 economy, also saw easing inflation in May, with Spanish consumer prices rising by 2.0 percent on the year, the slowest since December.