The US and French presidents have spoken for the first time since a fierce row erupted over the sale of submarines to Australia, with both leaders agreeing to ease tensions and to meet in Europe next month.
French President Emmanuel Macron was blindsided last week when Australia announced it would scrap a $90 billion conventional submarine contract with France in favour of an agreement for nuclear-powered vessels from Britain and the US.
France was particularly outraged that Australia negotiated with Washington and London in secret, something French Foreign Minister Jean-Yves Le Drian denounced as treachery and a “stab in the back”.
The US frequently touts France as its oldest ally but failed to warn Paris of the new partnership with Canberra and London.
In a nod to France's anger, a joint statement from the White House and the Elysee Palace on Wednesday said “the situation would have benefited from open consultations among allies on matters of strategic interest to France and our European partners”.
Mr Biden and Mr Macron will meet in person in Europe next month “in order to reach shared understandings and maintain momentum in this process,” the statement read.
The statement also said the US recognised the need for stronger European defence to complement the Nato military alliance, a key idea repeatedly floated by the French leader.
In a first concrete sign of a slackening of tension, Mr Macron agreed to send back France's ambassador to Washington after he was recalled to Paris last week in a diplomatic protest.
Relations soured when Mr Biden made a joint announcement with UK Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison to form a US-UK-Australia partnership, nicknamed Aukus.
Mr Morrison visited the Pentagon on Wednesday to meet with Defence Secretary Lloyd Austin. In brief remarks to the press, neither man mentioned France, though the Australian premier said he was "particularly looking forward to discussing how we now take Aukus forward and the many projects that I know we will have".
The row has sent Franco-US ties into perhaps the worst crisis since France opposed the US-led invasion of Iraq in 2003, leading to a wave of anti-French sentiment in America, with many restaurants famously calling chips "Freedom fries" on menus instead of French fries.
As well as a huge commercial setback, the loss of the deal was also a major blow to France's security strategy in the Pacific region.
Using mangled French, Mr Johnson on Wednesday told Paris it should “prenez un grip” — or “get a grip".
Napoleon
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More from Neighbourhood Watch:
What should do investors do now?
What does the S&P 500's new all-time high mean for the average investor?
Should I be euphoric?
No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.
So what happened?
It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.
"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."
Should I buy? Should I sell?
Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.
"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.
All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.
Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.
Will the rally last?
No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.
"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."
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Nancy Ajram
(In2Musica)
Know your Camel lingo
The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home
Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless
Asayel camels - sleek, short-haired hound-like racers
Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s
Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival
