As the world seems to become increasingly unstable, nations across the globe are investing huge amounts of money on defense budgets


Important Takeaways:

  • Rising global threats force ‘epoch-making’ shift in world order
  • The return of great power competition across the globe is forcing countries to adapt, spurring major changes to alignment and spending from Europe to the Indo-Pacific to the Middle East.
  • The change is everywhere on the map — but most evident in countries like Sweden and Japan as the nation’s make dramatic changes to meet rising threats from Russia and China.
  • “I’ve described the security environment as the most dangerous I’ve seen in 40 years in uniform,” said U.S. Adm. John Aquilino, head of Indo-Pacific Command, before the House Armed Services Committee this month.
  • The rise of new tensions has driven up defense spending worldwide. In an annual report this year, the International Institute for Strategic Studies found defense spending was up 9 percent worldwide last year, reaching $2.2 trillion.
  • European countries collectively drove spending up from about $350 billion in 2021 to more than $388 billion in 2023, while Asian nations bumped that from more than $500 billion to higher than $510 billion in the same time frame.
  • The spending bumps go hand-in-hand with public opinion. A November Ipsos poll of 30 countries found 84 percent of people believe the world is becoming more dangerous, up from 74 percent in 2018

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Iran and the so called ‘Axis of Resistance’ don’t seem to give a hoot what Washington thinks and Russia, China, and North Korea are taking note


Important Takeaways:

  • Joe Biden ‘is struggling to keep his head above water’ as US is challenged by Iran and Russia – ‘and China and North Korea are taking notes’, experts say as they warn inaction now ‘will cost American lives later’
  • Joe Biden ‘is struggling to keep his head above water’ as the US ‘ignores’ threats from Iran and continues to be challenged by Russia – while North Korea and China are ‘taking notes’, experts have warned.
  • Iran’s Revolutionary Guards confirmed yesterday that their forces launched ballistic missiles close to the US consulate in Erbil, northern Iraq – a move condemned as ‘reckless’ by the US State Department.
  • Former military intelligence officer Colonel (Ret) Jonathan Sweet and foreign policy expert Mark Toth labelled the US response ‘as perfunctory as it was lacking’, saying it is just the latest example of the Biden administration’s inaction in the region.
  • Iran’s so-called ‘Axis of Resistance’ – including Lebanon’s Hezbollah and Yemen’s Houthi rebels – has been increasing its attacks on Israel and commercial shipping routes, prompting the US and UK to launch devastating strikes by air and sea.
  • But the experts told MailOnline: ‘For all the US military might put on display throughout the Middle East, Red Sea and the Gulf of Aden right now, Iran and their proxies have not been deterred.’
  • Meanwhile, as the war in Ukraine approaches its third year, Vladimir Putin’s rhetoric has become more aggressive, threatening Ukraine’s statehood and warning that Russia would ‘never’ abandon the gains it has made.

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Shock and shrug: U.S. stocks brush off latest round of global threats

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 15, 2017. REUTERS/Brendan McDermid

By Lewis Krauskopf

NEW YORK (Reuters) – Another global shock. Another collective yawn by U.S. stock investors.

Equity investors appeared to largely brush off the latest apparent threat to the world’s security: A global cyber attack, which began spreading on Friday that by Monday had infected computers in more than 100 countries. Adding to global jitters, North Korea said it had successfully conducted a mid- to-long-range missile test and would continue such launches “any time, any place.”

Yet major U.S. stock indexes moved higher on Monday, with the benchmark S&P 500 <.SPX> touching a record high, as stocks continued to rally even as many investors worry about unbridled optimism and expensive valuations.

“I am really on pins and needles to be honest with you because there are so many threats to this stability and this complacency which have not yet been priced into the market,” Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.

“It is just a question of what straw is going to break the camel’s back and then there is going to be all sorts of reasons that the market should have sold off,” Kenny said.

While past cyber attacks may have had limited impact on the market, the WannaCry attack was described as having “unprecedented” global reach at a time people increasingly rely on technology to store their sensitive data. The attack follows hacking incidents during the U.S. and French elections.

“The cyber attack I would have imagined would have created some nervousness and anxiety, and throw in North Korea over the weekend, I’m confused on why the market is doing what it’s doing,” Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.

U.S. equities continued to move upward on Monday, a trend that has been firmly in place since the U.S. presidential election in November. Helped by higher oil prices, the benchmark S&P 500 <.SPX> rose 0.5 percent on Monday and set a new all-time high. In Europe, where the attack took center stage, investors also showed limited concerns. European shares closed higher while the UK’s FTSE 100 <.FTSE> edged up to end at a record high.

Indeed, the main impact from the attack appeared to be a rush to own shares of cyber security firms, the Purefunds ISE Cyber Security ETF <HACK.P> up 3.2 percent, U.S.-listed FireEye Inc <FEYE.O> up 7.5 percent and Symantec Corp <SYMC.O> gaining 3.2 percent.

To be sure, market watchers said that cyber threats have typically had limited impact on the market. Nicholas Colas, chief market strategist at Convergex, a global brokerage company based in New York, said for the market to become concerned, an attack would need to be more narrowly targeted, such as hitting a company that consumers depend on such as Apple Inc <AAPL.O> or major banks.

“If you want to get U.S. investors’ attention you’d have to shut down major banks’ ATM systems,” said Colas.

The market’s ability to push higher underscored worries about investors being overly complacent and optimistic about the direction of stocks.

The S&P 500 has risen more than 12 percent since the election of President Donald Trump spurred by expectations that his tax cut proposals and planned infrastructure spending will help economic growth. While threats to Trump’s plans have rattled investors they have failed to cause any significant pull back in stocks.

The CBOE Volatility Index <.VIX>, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, last week closed at 9.77, its lowest close since December 1993. On Monday, the VIX fell 0.11 point at 10.29.

“I’d say the market has been overly complacent for quite some time,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “There are a lot of people shorting volatility, which means investors are not worried about much of anything right now.”

(Additional reporting by Caroline Valetkevitch, Megan Davies, Sinead Carew and Chuck Mikolajczak in New York and Vikram Subhedar in London; Editing by Megan Davies and Lisa Shumaker)