TheChek News Flow

China’s industrial profits plunge as economic momentum falters

Steep monthly decline in September comes as policymakers battle to restore confidence

Profits at China’s industrial companies registered their steepest decline this year in September, as policymakers battle to restore confidence across the world’s second-biggest economy.

Profits at large industrial companies fell by 27.1 per cent in September year-on-year, after a 17.8 per cent fall in August. The gauge, which is published by the National Bureau of Statistics, tracks firms with more than Rmb20mn ($2.8mn) in turnover.

The figures come amid mounting pressure on Beijing to support the economy after a string of disappointing data that highlight the effects of a multiyear property slowdown and weaker consumer demand.

Policymakers in late September unveiled a barrage of measures designed to boost confidence and support the stock and housing markets, though analysts have called for further fiscal stimulus to restore momentum. 

China’s National People’s Congress standing committee will meet from November 4-8, an event that will be closely watched for any updates on the government’s spending plans.

Beijing has set a target of about 5 per cent for GDP growth this year, its joint-lowest target in decades. GDP expanded 4.6 per cent in the third quarter year-on-year, according to figures released this month. 

Consumer prices remain close to deflationary territory in China at 0.4 per cent last month, while producer prices declined 2.8 per cent in September. The producer price index, which tracks factory gate prices and is heavily driven by the price of commodities, has been in negative territory for the past two years.

In an accompanying statement, the NBS said that the fall in ex-factory prices had put “great pressure” on corporate profits and revenues, and also cited “insufficient” demand.

Analysts at Goldman Sachs noted that profits in downstream industries, which are closer to the consumer, were essentially flat compared with pre-Covid levels.

Xi Jinping’s government has heavily emphasised the need to upgrade its manufacturing and production this year, in everything from clean energy to AI. The NBS said that profits at high-tech industries have expanded 6.3 per cent so far this year, compared with the same period last year.

Sweden’s EQT eyes deal push as it girds for wave of PE consolidation

Chief Christian Sinding says firm is weighing acquisitions of private investment groups and growth-focused investment firms

Europe’s largest publicly traded private equity group is preparing an acquisition push for what it expects will be a wave of consolidation in the $10tn private capital industry, as smaller firms or those facing succession challenges sell to larger rivals.

Stockholm-based EQT is studying acquisitions of specialised private investment groups including so-called secondaries firms that buy private equity fund stakes, growth-oriented investment firms and those with a niche focus in healthcare, chief executive Christian Sinding told the Financial Times in an interview.

“There are still geographies and capabilities that we don’t have, both in growth investments and in private equity,” said Sinding. “If we woke up one day and found a great healthcare growth business in the United States, that could be something for us.”

“We might also try to get some capabilities under EQT’s roof in solutions and secondaries . . . It is such an important part of what we could do for our clients at the fund level and the portfolio level,” he added.

Other possible acquisition opportunities include asset managers, or investment teams, focused on digital infrastructure such as data centres, or the so-called transition from carbon-emitting industry.

Sinding said any acquisitions would be used to complement EQT’s existing businesses and that no deals were imminent for the group.

EQT listed its shares in Stockholm in 2019 as part of a long-term strategy to use its public stock, presently worth $36bn, as an acquisition currency. In recent years, EQT has acquired large asset managers outside of its existing expertise in European and North American private equity and infrastructure investments. Its assets under management have increased more than fourfold to €246bn since its IPO.

In 2022, EQT bought Barings Private Equity Asia for €6.8bn, securing a toehold in Asia. It acquired Exeter Property Group, a large manager of industrial warehouses, the prior year.

Other private equity groups of EQTs size, including TPG and CVC, have made a similar strategic decision in recent years, listing their shares as part of a diversification push that has fuelled their growth in overall assets.

Sinding said all private equity groups are facing a moment when they must clarify their strategy, as pensions, endowments and sovereign wealth funds choose to invest with fewer managers whom they believe have resources to sustain investment consistency.

“There are many market forces that will come to bear in this next cycle. If you go to market and don’t have a succession plan, or you don’t have an edge, or you haven’t scaled your capabilities, people aren’t going to give you capital,” he said. “Some firms are going to come out good enough, but others will go out of business.” 

EQT has refused to push heavily into credit investments after Sinding jettisoned the group’s debt investment platform in 2020 and has resisted calls to re-enter the space. Unlike peers including Apollo Global, he believes private equity remains a growth market because companies continue to leave the public markets and prefer to partner with private equity owners.

Sinding predicted EQT would eventually be able to do buyouts of between $30bn and $50bn in size as many midsized or family-owned companies remain private and decide to grow into global giants while in private hands.

“There are pension funds, sovereign wealth funds and other institutions that are under-allocated to private capital,” he said. “You add all the capital from private wealth and there’s a huge resource that we can tap into.”

Meet the salad hawkers that are valued like tech stocks

But rally for Sweetgreen and Cava may not stay fresh and valuations may prove too rich

Forget artificial intelligence or robotaxis. Investors hungry for returns may want to turn to their lunches for inspiration.

A duo of US fast-casual restaurants — salad hawker Sweetgreen and Mediterranean-inspired outfit Cava — is showing that you can beat the crowd without tech stocks.

Shares in Sweetgreen have more than tripled over the past 12 months. Cava shares have enjoyed an even more blistering run — up over 300 per cent to trade at a record high. That tops even tech darling Nvidia’s 232 per cent rise.

Valuations are punchy. Cava, which only recorded its first annual profit last year, is on a multiple of nearly 300 times. Sweetgreen has a market capitalisation of $4.1bn but is not yet profitable.

This rally may not stay fresh. In the restaurant sector, sales and footfall are sliding as customers cut back spending. Price increases can no longer pick up the slack. McDonald’s, KFC owner Yum Brands and Olive Garden’s Darden Restaurants are among the chains reporting a drop in same-store sales in their most recent quarter. Bankruptcies are also on the rise, with BurgerFi and Red Lobster among the high-profile names that have filed for Chapter 11 protection this year.

But the glum backdrop also explains why the two chains — and their brisk sales — are generating excitement. Same-store-sales rose 9 per cent at Sweetgreen and 14 per cent at Cava in the second quarter. Revenues grew even faster, by 21 per cent and 35 per cent.

Investors on the hunt for the next Chipotle have zeroed in on these numbers. Chipotle shares have generated a near-6,700 per cent return since its initial public offering in 2006.

Comparing Sweetgreen and Cava to Chipotle is not entirely off the mark. The two clearly borrowed their concept from the Mexican-inspired chain. Like Chipotle, both companies have a limited number of fresh ingredients on their menus and customers customise their meals with an assembly line process. The model helps keep labour costs, food waste and wait times down.

But the comparison doesn’t quite stack up. While restaurant-level margins at Cava and Sweetgreen are comparable to Chipotle’s, the gap widens once you factor in administrative overhead, expansion and marketing costs. Cava’s operating margin is less than half Chipotle’s. Sweetgreen’s is negative.

Meanwhile, Chipotle’s market capitalisation equates to $23mn for each of its 3,500 stores. Compare that to Cava: at a near $15.6bn market value, each of its 341 restaurants is worth $46mn. That is even though each store generates only about $3mn in revenue per year on average. That is too rich a valuation to swallow.

Audit threatens African nation’s hard-won reputation as reliable place to do business, critics warn

Senegal’s review of oil and gas contracts could threaten the country’s reputation as a reliable place to do business in a volatile region, critics have warned.

The new administration led by President Bassirou Diomaye Faye, who won a landslide victory in March elections, has argued that the audit of contracts awarded by the previous government is a crucial part of its effort to secure a better deal for Senegal and fill a hole in the public finances that it said was revealed after it took office in April.

But Macky Sall, the former president whose party was trounced by Faye’s Pastef in the elections, accused the government of engaging in populist rhetoric that he said could endanger the west African nation’s hard-won reputation as a stable business environment.

“This political rhetoric could do irreversible damage,” Sall told the Financial Times, adding that his government had negotiated world-class agreements with foreign investors including energy groups.

Mucahid Durmaz, senior analyst at risk intelligence company Verisk Maplecroft, echoed a similar sentiment: “Increased scrutiny risks eroding investor confidence in what has been an attractive destination for foreign investment . . . the government has to find a delicate balance between improving people’s living standards and making sure investor confidence isn’t damaged.”

Faye, who at 44 is Africa’s youngest elected leader, swept to victory in the March polls after campaigning on a leftwing platform to end what his party dubbed the neoliberal policies of an elite accused of ignoring the interests of the poor.

The finance ministry subsequently announced that Senegal’s deficit was more than 10 per cent of GDP at the end of 2023, not the 5.5 per cent declared by Sall’s government. Average public debt over the previous five years was 76 per cent of GDP, not 66 per cent as previously reported, it also said when announcing its findings in September.

“The authorities we replaced lied to the country and lied to partners, falsifying figures,” said Ousmane Sonko, Senegal’s prime minister.

Faye has vowed to renegotiate all government contracts to extract better terms. Since taking power, he has cancelled an $800mn desalination project with Saudi Arabia’s ACWA Power on cost grounds and put the country’s IMF deal on hold after the government’s audit showed the nation’s finances were worse than previously stated.

Speaking at the August launch of a panel set up to probe the energy contracts, Sonko said a number of oil and gas deals had been signed “to the detriment of . . . Senegal and its people”.

The country joined the ranks of oil states in June when Australia’s Woodside began producing from its Sangomar offshore field. The Greater Tortue Ahmeyim, a liquefied natural gas project that straddles the border with Mauritania and is operated by a consortium led by UK energy group BP and the US’s Kosmos, is expected to start production later this year.

Sall said any attempt to get a better deal from the energy companies would “make me laugh”.

The former president, who trained as a geological engineer, also said it was risky to suspend the $1.8bn IMF programme over what he said were gimmicky recalculations of the country’s deficit. “This gives the country a very bad image because multilateral institutions play a role in surveillance of the macroeconomy,” he added.

However, the IMF, which completed a mission to Senegal last week, said preliminary findings indicated that the fiscal situation was worse than had been presented in the 2019-2023 period reviewed by the global body.

The fund also said Senegal’s macroeconomic outlook remained “challenging” amid sluggish growth in the non-oil sector and low government revenue, but that it expected growth to rise to 6 per cent this year, compared with 4.3 per cent in 2023.

Rating agency Moody’s downgraded Senegal’s long-term debt rating to B1 from Ba3 this month in response to what it said was a significantly worse debt and fiscal position than expected, although it also predicted strong improvement in growth next year as more oil and gas comes on stream.

François Conradie, an analyst at the Oxford Economics Africa consultancy, said Faye’s audit into the energy deals would look for any “irregularities in the contracts” or booking of costs that could reduce Senegal’s tax take.

No deadline has been set for the completion of the review.

BP declined to comment on the audit. A Woodside spokesperson said the company respected “the right of governments to determine the legal and regulatory frameworks that govern oil and gas development”, adding that “the most successful jurisdictions have been those that work in partnership with industry, respect contract sanctity and create investment certainty”.

An executive at another oil company said there might be minor wriggle room in the contracts but that the basic agreements were enshrined in domestic and international law.

Senegal’s tax authorities and Woodside, which owns an 82 per cent stake in Sangomar, are separately at loggerheads over a $68mn tax bill. Woodside confirmed it had filed a case in the Dakar high court disputing the tax assessment.

Fears of an all-out assault on the oil and gas companies were overblown, said Conradie. The government would be “pragmatic and flexible”, he added, as “they don’t want to be so aggressive that the oil and gas companies pause on developing the fields . . . because they need the money”.

Senegal is grappling with a high cost of living and joblessness, particularly among young people, with the headline unemployment rate at 21.6 per cent, according to the country’s statistics agency. Large numbers of young Senegalese have joined the tens of thousands of migrants embarking on risky journeys to Europe each year in search of a better life.

Faye has called a snap parliamentary election on November 17 in the hope of gaining a majority in the 165-seat national assembly, where his party has only 56 seats.

But the economic situation could derail the government’s support among its youth base even as it seeks to show the fiscal mess was inherited from Sall, said Paul Melly, francophone Africa analyst at London’s Chatham House think-tank.

“There are many things that could erode their popularity,” he said. “The grinding everyday stuff about delivering services, not getting sucked into corruption . . . and jobs for young people. These are the things that could drag them down.”

Ask any VC if we’re still in a venture capital bear market and that investor will almost certainly tell you no, that funding is still flowing for good companies.

That might sound like spin, because anecdotes abound about how rough it still is for those raising now. And for good reason. Down rounds — that is, raising at a lower valuation than a previous round, which founders want to avoid unless they have no choice — were still at near record highs through the first half of 2024, according to Aumni’s Venture Beacon report. Around 39% of late-stage deals were a down round, according to Aumni’s report. That covers Series B and beyond, with the biggest percentage of down rounds at Series C and beyond.

Even Stripe — whose success no one questions — hasn’t fully rebounded to its 2021 $95 billion valuation as of a big secondary transaction that took place in July. Although it did climb back to $70 billion by then.

But despite this kind of gloom, late 2024 stats are full of good news, too. For instance, new data from Crunchbase shows a downright boom in megadeals — funding rounds of $100 million or more.

Crunchbase tracked nearly 240 mega-rounds for U.S.-based startups so far this year, which is already more than the 210 raised all of last year.

Even more interesting is that Crunchbase’s top category for these deals was not AI. Biotech and healthcare startups accounted for 87 mega-deals, compared to 26 for second-place category AI.

Some of these rounds are admittedly crossover: companies working on AI for healthcare. For instance, Crunchbase calls out AI drug discovery company Xaira Therapeutics as one of the notable health tech megadeals. Xaira launched in April with a massive $1 billion round led by ARCH Venture Partners and Foresite Labs (both known for biotech), but with classic Silicon Valley VCs in the round, too, like NEA, Sequoia Capital, Lightspeed Venture Partners, SV Angel, and others.

We’d arguably call Xaira an AI company and included it in our ongoing list tracking AI startup megadeals.

But there were also deals like Superluminal Medicines’ $120 million Series A, led by Eli Lilly. While it is also using machine learning to speed drug creation, its focus is finding medications for certain small molecule receptors on cell membranes. That’s a hot area in biotech right now — no AI-washing required. The deal was backed by classic tech investors Insight Partners and Gaingels, as well as NVentures (Nvidia’s venture capital arm), which seems to be everywhere these days.

Other biotech Series A and B megadeals include the $120 million Series B closed by Terray Therapeutics, which is also working on small molecule drugs; and the $100 million Series A Judo Bio landed to tackle kidney drugs. A new biotech megadeal seems to be announced every week.

Beyond health tech and AI, another sector nabbing mega-rounds is cybersecurity, with 16 such deals so far this year. Examples include email security startup Kiteworks raising $456 million, data security startup Cyera raising $300 million, and cloud security startup Wiz raising a whopping $1 billion.

There are a few other goods sign for founders at earlier stages. Pre-money valuations improved slightly for seed and Series A deals in the first half of the year, Aumni found.

The dealmaking in 2024 also appears to be at a similar pace as 2023, according to the Q3 PitchBook-NVCA Venture Monitor. In 2023 it clocked in at just under 16,000 deals, which was just a bit higher than the average annual activity before the pandemic and ZIRP-fueled frenzy of 2020-21.

For those interested in learning more, TechCrunch Disrupt 2024 will host a session on the Builders Stage titled “What You Need to Raise a Series A Today” and another on “How to Raise in 2025 if You’ve Taken a Flat, Down, or Extension Round.”

The Chess Revolution — flash grandmasters finding fame and followers online

Peter Doggers charts the resurgence of the ancient game thanks to technology and globalisation

As Covid lockdowns rippled across the planet in early 2020, Magnus Carlsen had an ingenious idea. The global chess elite were stuck at home, just like everyone else, unable to play regular in-person tournaments. Instead, the world chess champion invited seven of his biggest rivals to join a flashy online contest, dubbed (modestly) the Magnus Carlsen Invitational. The event attracted hundreds of thousands of viewers and kicked off a new boom in online chess that lasted through the pandemic to today.

As journalist Peter Doggers details in The Chess Revolution, similar online innovations continue to proliferate, while sizeable audiences flock to talkative grandmasters on YouTube and streaming platforms like Twitch. “It is a big part of the chess revolution that chess is not just something you do any more, but also something that you can watch, even if you are not that good at it yourself,” he writes.

There are other elements to the changes afoot in the game, notably its geography. Traditionally dominated by European players, and particularly those from the former Soviet bloc, energy across the board is increasingly shifting to Asia.

India’s team won a resounding victory at the recent twice-yearly chess Olympiad in September. The upcoming battle to be the next World Chess Champion in November will feature grandmasters from India and China, in a contest hosted in Singapore.

Attempts to rebrand the sport have a decidedly Indian flavour, too. During October a range of elite players, including Carlsen, gathered in London for the Tech Mahindra Global Chess League — an exuberant new competition bankrolled by Anand Mahindra, a Mumbai-based billionaire industrialist. 

Designed to launch a more television-friendly format, the contest featured prematch fireworks, faster games and grandmasters in colourful team uniforms — all part of a ploy to borrow some of the razzmatazz of the wildly popular Indian Premier League cricket tournament.

The changes transforming chess are also partly technological. Computers eclipsed human players decades ago but machines powered by neural networks have now begun to overturn even basic notions about how the game should be played. “It feels like the chess we have played as humans for centuries is being reinvented almost from scratch,” the author suggests.

As a chess journalist, Doggers is an excellent guide to these changes. Indeed, he played a role in some of them. An early enthusiast for online chess, in 2007 he pioneered the practice of uploading behind-the-scenes clips from chess tournaments. “In a way, I started a new era for chess: the video age,” he notes.

Perhaps not surprisingly, therefore, his book is strongest towards the end, when he describes the characters who helped foment the revolution he describes, and other factors that contributed to it, such as the runaway success of Netflix drama The Queen’s Gambit, which also launched during the pandemic in 2020.

Especially good are sections on Hikaru Nakamura, a brash, fast-talking American grandmaster who has become the game’s best-known streaming star, and Levy Rozman, known online as GothamChess, whose YouTube channel now boasts 5.5mn followers.

The early chapters are less compelling, however, and feel padded out by more familiar material, ranging from the game’s history to its appearances in literature. Indeed, the result ends up reading a little like a patchy chess match, in which a weak opening is eventually compensated for by a stronger endgame.

There are gaps too, notably the fact that Doggers is largely silent on the byzantine but fascinating world of chess politics, as embodied by its governing body Fide, a murky grouping still largely dominated by bureaucrats from the post-Soviet world.

Nonetheless, The Chess Revolution provides an entertaining and instructive overview of a game in the throes of reinvention. A decade ago it would have been quite possible to view chess as a fading sport, as its mysteries were solved by computers and its audiences tempted away by video games and other less taxing entertainments. Instead, by embracing a heady mix of technology and globalisation, it has been re-energised — providing a lesson for other human intellectual pursuits far beyond the sixty four squares.

Climate graphic of the week: Blackouts and water rationing as South American drought worsens

Bogotá limits water use and Quito schedules daily power cuts to cope with historically low rainfall

Historic droughts are rocking large parts of South America as energy grids powered by hydroelectric dams struggle to meet demand, and forest fires continue to spread in the stricken Amazon region.

The effects of global warming on the continent are intensifying extreme weather events, even as almost 200 countries gather over a fortnight for the UN COP16 biodiversity summit in the tropical city of Cali, Colombia.

Bogotá in Colombia, typically one of the world’s wetter capitals thanks to its altitude, has suffered scheduled daily water rationing for much of this year.

A study by an independent group of international scientists earlier this year found that climate change was the main cause of the exceptional drought in the Amazon Basin that has prevailed since 2023.

The basin stretches across the entire central and eastern area of South America, as far as Colombia in the north, Peru and Ecuador in the east, Guyana and Suriname to the west, and Brazil and Bolivia in the south.

The water shortages mean that Colombia has halted electricity exports to neighbouring Ecuador to protect its own supply.

Ecuador relies on hydropower for nearly 80 per cent of its energy, and the worst drought in six decades has led to strict electricity rationing across the nation. The capital, Quito, suffered scheduled daily blackouts of up to eight hours last week, with the prospect of these increasing to 14 hours a day next week.

Ecuador has contracted a barge-mounted 100MW power plant built by the Turkish firm Karpowership, though this barely covers 10 per cent of the national shortfall in demand of around 1,000MW.

The nation’s energy crisis, driven by drier reservoirs, is forecast to last until at least January. It could also have ramifications at next year’s polls where President Daniel Noboa will be standing for re-election. Earlier this month, he announced the interim replacement of energy minister Antonio Goncalves with Inés Manzano, who also holds the environment portfolio.

Cristian Paliz Acosta, a forecaster at INAMHI, the Ecuador government’s meteorological agency, attributed the unusually dry conditions to an intensification of the Walker circulation over the tropical Pacific, in which warm, moist air rises in the west while cold, dry air descends in the east.

“This strengthening is inhibiting the rains in South America and is delaying the appearance of other systems, which normally at this point of the year should already be occurring with more intensity,” Paliz said. 

“That is why we have, at least in the last 30 days, accumulated percentages [of rainfall] that barely reach between 10 and 50 per cent in several areas of Latin America, Venezuela, Ecuador, in the Amazon areas, in Brazil.”

Parts of the Brazilian Amazon are suffering their worst drought on record, with key rivers, including tributaries of the Amazon river, falling to their lowest ever levels.

In the rainforest port city of Manaus, water levels earlier this month hit their lowest level since records began in 1902, breaking the previous record set only a year ago.

Much of the region’s river-borne transportation has been forced to a standstill, leaving remote villages isolated and short of supplies. 

Below-average rainfall continued throughout the traditional rainy season this year, triggering a surge in the number of wildfires. These have burnt 10mn hectares in Bolivia and 7mn hectares in Brazil, according to the Inter-American Association for Environmental Defence (AIDA), and in turn caused extreme levels of pollution across swaths of the two countries in September.

Last month, Peru’s government declared a 60-day state of emergency in its Amazon provinces bordering Ecuador and Brazil, which have been the worst affected by forest fires.

Clair Barnes, researcher at the Grantham Institute, noted on the release of a recent report on the fires in the Amazon and the Pantanal wetlands: “The never-ending heat has combined with low rainfall to turn these precious ecosystems into highly flammable tinderboxes.”

FINANCIAL TIMES

-Israel has launched air strikes against Iran, including targets in Tehran, as part of an escalating conflict between the regional foes. The Israeli military targeted military facilities such as missile manufacturing plants and air defenses in retaliation for the missile barrage Iran fired at Israel three weeks ago. Iran's air defense headquarters said that Israel had targeted military bases in Tehran, the south-western province of Khuzestan, and the western province of Ilam. The US had pressed Israel to avoid striking Iran's nuclear sites or oil facilities as Prime Minister Benjamin Netanyahu's government prepared its response to the Iranian ballistic missile attack on the Jewish state three weeks ago. The White House was notified of the strikes in advance but did not participate in the attack. After Israel declared its assault over, the Biden administration said Israel's response should mark the end of the latest cycle of attacks between the foes. The US has conveyed this message directly and indirectly to Tehran.

-Electoral polls have faced challenges in recent years, with over a third of national pollsters adjusting their methods after 2020. In 2016, national-level polls were overly focused on national-level data, leading to misinformation about Trump and Brexit. In 2020, pollsters also underestimated Trump's support. However, a Pew study shows that more pollsters now use online and text surveys, and have turned to probability-based panels. The 2022 midterm polls, despite predictions of a "red wave," were accurate, and this year's polls may have followed suit. This shift in polling methods is a response to the changing world and the need for accurate data.

-US Treasuries have experienced a sell-off, causing ripples across markets, including gold and currencies, as investors warn of volatility ahead of the upcoming presidential election. US government bonds are on track for one of their worst months in recent years, with 10-year yields rising almost 0.4 percentage points to 4.2%. This comes just weeks after the US Federal Reserve signaled an easing era with a half-percentage point cut, prompting investors to expect at least a further quarter-point cut at both remaining meetings this year. Strong economic data and bets on a Republican victory leading to reflationary policies have prompted investors to scale back their bets. Portfolio manager Mike Cudzil said investors are "walking back some of the overzealousness" after the Fed cut.

-Kamala Harris and Donald Trump have been in a heated debate over the US election, with Harris focusing on women's rights and abortion access, while Trump has emphasized masculinity and vulgar language. With just a week and a half until election day on November 5, Harris is aiming to increase women's support while Trump appeals to male supporters. A USA Today/Suffolk University poll shows women supporting Harris by 53% to 36%, while Trump holds a similar edge with men. This could lead to the largest partisan gender gap in modern US history, as a similar vote on November 5 would mark the largest partisan gender gap in modern history.

-Jeff Bezos, the owner of The Washington Post, has faced criticism for not announcing an endorsement for a US president for the first time in 36 years. The decision came after the editorial page staff had written an endorsement for Kamala Harris, but it was not published. The change comes less than two weeks before the presidential election, where Harris and former president Donald Trump are running neck-and-neck. Tensions between Trump and Bezos were evident during his time in the White House, with Amazon filing a lawsuit in 2019 claiming it was denied a $10B US defense contract due to "escalating and overt pressure" from the then president. The Washington Post's chief executive, Sir Will Lewis, acknowledged the policy change could be seen as an abdication of responsibility but denied it.-The US government is investigating alleged Chinese attempts to hack US telecoms infrastructure, following reports that hackers targeted former president Donald Trump and his running mate JD Vance's phones. The FBI and Cybersecurity and Infrastructure Security Agency are investigating "unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People's Republic of China." Trump's campaign spokesperson, Steven Cheung, blamed the attack on Kamala Harris, the US vice-president and Democratic presidential nominee. Cheung criticized the Democrats for continuing election interference and urged China and Iran to attack critical American infrastructure to prevent Trump from returning to the White House. This comes one month after the US justice department indicted members of Iran's Islamic Revolutionary Guards Corp for allegedly hacking Trump's presidential campaign. Tehran has rejected the allegations.

-Boeing, the company that revolutionized commercial aviation, has been in turmoil for over five years due to various issues such as fatal crashes, a worldwide grounding, a guilty plea to a criminal charge, a pandemic, a plane breaking off mid-flight, and a strike. The company's finances are fragile and its reputation has been damaged. Bank of America analyst Ron Epstein compared the crisis to the Hydra of Greek mythology, stating that every problem that has come to head, then [been] severed, more problems sprout up. Resolving Boeing's crisis is crucial for the future of commercial air travel, as most commercial passenger aircraft are made by it or its European rival Airbus, which has little capacity for new customers until the 2030s. CEO Kelly Ortberg faces challenges in motivating the workforce, persuading investors to support an equity raise, addressing quality control and manufacturing issues, and placating frustrated customers who have had to rejig schedules and cut flights due to delays in plane deliveries.

-Millennium Management is considering launching its first fund since its founding over three decades ago to target less liquid assets, including private credit. Private credit, which involves loans made to risky companies, has grown into an almost $2T asset class as traditional banks have retreated from their core lending business. Despite the explosive growth in private credit, Millennium believes there are still opportunities in this market and other less liquid assets. The potential move comes as Millennium seeks to sustain its growth, which has transformed it into a $69.5B business since its inception 35 years ago.

-The Dutch government has avoided collapse over migration policy after far-right leader Geert Wilders backed down on a demand for drastic measures potentially in breach of EU law. His Freedom party, one of the four coalition partners, scrapped a plan to declare a migration crisis, which would have allowed further measures without parliamentary consent. Instead, center-right coalition partner New Social Contract convinced Wilders to settle for a draconian refugee policy set to be approved by the cabinet on Friday, which will have to be endorsed by parliament. The compromise is the latest attempt by centrist forces in the three-month-old government to rein in Wilders, whose party won the most seats in last year's election.

-US regulator Michael Hsu has warned that failing to finalize stricter stability rules could lead to an international "unravelling" of guardrails put in place after the financial crisis and create conditions for a new global banking meltdown. Hsu believes that such a breakdown would create unhelpful uncertainty for US banks, lead to a race to the bottom, sow the seeds for a future financial crisis, and hurt US credibility and leadership on these issues. The warning is the strongest from a regulator about what could happen if the US abandons the Basel III endgame, a set of rules meant to increase financial stability and synchronize how big banks are regulated around the world.

NEW YORK TIMES

-Israel has launched a retaliatory attack on Iran, causing "limited damage" to military bases in three provinces, including Tehran. The Israeli military said it was conducting precise strikes on military targets in Iran in response to more than a year of attacks on Israel by Iran and its allies across the Middle East. The strikes have been conducted by over 100 combat aircraft, including fighter jets and unmanned drones, hitting around 20 sites in Iran, Syria, and Iraq. Iran's national air defense force stated that Israel had attacked military bases in three provinces, including Tehran and two near the Iraqi border, Ilam and Khuzestan. Iranian air defenses were able to limit the damage, but it is continuing to assess the situation. Three news agencies run by different branches of Iranian authorities said that the city of Tehran itself had not been hit and that civilian airports were operating normally. The blasts were close enough to the Iranian capital for them to be seen and heard by residents, bringing closer to home a war that had felt remote for many.

-The recent exchanges of air attacks by Israel and Iran have ruptured their longstanding practice of avoiding direct military clashes. The Israeli military said it was "conducting precise strikes on military targets in Iran," acting in response to more than a year of attacks on Israel by Iran and its allies across the Middle East. Residents of Tehran reported hearing explosions in and around the city. Just after 6 a.m., the military said the strikes had concluded. Israeli officials said the attack was over by about 5 AM, after 20 targets had been struck. Israel waited only about five days to respond to an Iranian attack similar to Tehran's Oct. 1 missile barrage during an exchange of airstrikes in April. Various factors seem to have dictated a sudden shift in the relationship between Israel and Iran.

-Vice President Kamala Harris attended a rally in Texas, where she received endorsements from global superstar Beyoncé, focusing on abortion rights. The rally was her largest and most emotionally charged event since becoming the Democratic nominee. Beyoncé's speech focused on a more optimistic future, emphasizing the stories of Texas women who suffered life-threatening health complications due to being denied proper care for pregnancy complications. Harris and many speakers blamed former President Trump, who frequently boasts of appointing three of the Supreme Court justices who voted to overturn Roe v. Wade in 2022.

-Michigan's Democratic Congresswoman Elissa Slotkin faces a tight Senate race due to the Middle East war and anger among the state's Arab American voters. The violence in Gaza and Lebanon has directly affected the state's Arab American population, leading some to consider withholding their support or even sitting out the election altogether. The state's large Arab American contingent has been directly affected by Israel's military campaigns in Gaza and Lebanon. Some voters are deciding to withhold their support from Slotkin or sit out the election altogether, potentially cutting into the margin she would need to win. Some voters, such as Nina Saad, have expressed their intention to not vote this year, citing the lack of motivation from Slotkin or her Republican opponent, former Representative Mike Rogers.

-With less than two weeks until Election Day, law enforcement officials are facing a surge of threats to election workers and political activists. The Justice Department has unsealed a complaint against a man in Philadelphia who vowed to kill a party official recruiting volunteer poll watchers. Police in Tempe, Arizona, arrested a man in connection with shootings at a Democratic campaign office and other acts of political vandalism. Prosecutors charged a 61-year-old man from Tampa, Fla., with threatening an election official, on top of pending charges over menacing messages sent in the past five years. On Thursday, police officers in Phoenix arrested a person in connection with a mailbox fire, damaging some 20 ballots in a Democratic stronghold. The situation is likely to lead to a bitterly contentious coda and potentially unsettled aftermath for the presidential contest.

-Former President Donald Trump has defended himself against a magazine report accusing him of disparaging fallen veterans and making a racist remark about a murdered Mexican-American soldier. Trump attended a rally in Austin, Texas, with some of Specialist Vanessa Guillén's relatives, following the publication of the article. The Atlantic magazine reported that Trump had expressed sticker shock when he asked an aide if his administration had received a bill for Guillén's funeral expenses. During a White House event in April 2020, Trump offered to help cover any expenses not picked up by the military. However, the article quoted Trump as saying it doesn't cost 60,000 dollars to bury a Mexican. Trump's family has stepped forward to help vindicate him, and the former president has defended his actions.

-According to US officials Thousands of North Korean soldiers have arrived in Russia's western Kursk region, with the aim of participating in a counteroffensive to dislodge Ukrainian forces occupying the region since August. The North Korean troops have not yet entered the fight and their role is not yet clear. However, any significant contingent of North Korean troops will allow Russia to keep more of its forces in eastern Ukraine, where they can focus on seizing as much Ukrainian territory as possible before the harsh winter weather sets in. The governments of South Korea and Ukraine have warned that thousands of North Koreans were training alongside Russian soldiers, with Ukraine putting the figure as high as 12,000 troops. US officials confirmed that a contingent of North Korean troops had been transported by ship to Vladivostok (not far from the Russian-North Korean border), a large Russian city on the Pacific Ocean, in a "very, very serious" escalation. The first North Korean troops made the nearly 4,000-mile journey to the Kursk region, with thousands more arriving each day since.

-Wang Huning, the top adviser to President Xi Jinping, is credited with shaping China's authoritarianism. During the first-ever talks in Beijing with Taiwan's former president, Wang Huning, a bookish-looking official, spoke confidently in his presence and sat next to him. This highlights the relationship between Xi, the country's most powerful leader, and Wang, the ruling Communist Party's most influential ideological adviser. The scene provides insight into the relationship between Xi and Wang.

-Tommy Robinson, the founder of the English Defense League, is the highest-profile leader of Britain's growing far-right movement. He is known for organizing and promoting a far-right London rally on Saturday. Robinson, who was involved in the anti-immigrant riots in August, will not attend the rally as he was taken into police custody. He faces charges of repeatedly libeling a Syrian refugee in breach of a 2021 injunction. Antiracism activists have planned a counterprotest on Saturday, with the police ensuring that the two demonstrations take place in different parts of central London. The police will monitor closely to ensure that those involved stay "sufficiently far apart" to prevent serious disorder. Robinson is due in court on Monday.

-Israel has claimed to have bombed a structure associated with Hezbollah and is reviewing the strike. The Hasbaya Village Club, a former oasis in southern Lebanon, was home to 18 journalists from international and Lebanese news organizations. The bungalows were destroyed during an Israeli airstrike on Friday, killing three journalists and injuring at least three others. The attack occurred while the occupants were asleep, and the journalists were able to retreat from the battlefield at the end of each day. The Israeli airstrike destroyed three of the bungalows while the occupants were asleep, causing the journalists to retreat from the battlefield. The Israeli government has stated that it is reviewing the strike and is working to protect journalists from the ongoing conflict between Israel and Hezbollah.

-Opponents of the Equal Rights Amendment argue that it is a broad attempt by Democrats to grant rights to transgender athletes and migrants. The Vote No on Prop 1 political action committee has received $8 million in last-minute donations from conservative donors. Dick Uihlein, a scion of Schlitz beer founder and Uline shipping company founder, has given generously to former President Donald J. Trump and groups opposed to gay and transgender rights. The committee also received $1 million from Thomas J. Tisch, a financier who was a key supporter of Lee Zeldin's unsuccessful bid for governor of New York in 2022. The committee received $6.5 million from Dick Uihlein, who has given generously to former President Donald J. The amendment would not give undocumented immigrants the right to vote.

-Georgia's former Soviet republic faces a political crisis, with two new laws and a looming election leading artists to reconsider their livelihoods and whether they can stay in the country. Artist and drag performer Andro Dadiani reported that numerous artists have left Georgia in recent years due to the political situation. The country, home to a rich contemporary art and cultural landscape, has seen numerous artists leave due to the political situation. Georgia, a former Soviet republic, is home to international figures such as Demna Gvasalia, the creative director of Balenciaga, Nino Haratischwili, and filmmaker Salomé Jashi. The situation has led to a potential last gasp for Georgia's rich contemporary art and cultural landscape.

NEW YORK POST

-Donald Trump's son, Barron Trump, has been instrumental in reaching some of his biggest audiences during the 2024 election cycle through his appearances on podcasts aimed at Gen Z and millennial men. Trump's 78-year-old dad has often credited Barron with helping him pick his podcast spots. Trump has appeared on various podcasts, including "This Past Weekend with Theo Von," "Flagrant" with comedian Andrew Schulz, and the "PBD Podcast" with businessman Patrick Bet-David. Trump's Aug. 20 appearance with Theo Von, which included a discussion of cocaine, has garnered 14M views alone. Trump's Oct. 9 "Flagrant" appearance with Schulz had received 6.2M views, while Trump's Oct. 17 sit-down with Bet-David had a YouTube audience of 2.8M. Trump also appeared in June on Logan Paul's "Impaulsive" podcast and taped an appearance on "The Joe Rogan Experience," the most-listened-to podcast on Spotify. Democratic nominee Kamala Harris' forays into the podcasting jungle have had less impressive results, with an interview with "The Shade Room" having just over 144,000 views as of Friday and an eight-minute clip of her appearance on the popular "Call Her Daddy" podcast having a relatively paltry 675,000 views as of Friday. Trump campaign senior adviser Jason Miller praised Barron for his recommendations, stating that non-traditional media like podcasts and YouTube shows help meet voters where they are at.

-Delta Air Lines has filed a lawsuit against CrowdStrike in Georgia state court after a global outage in July caused mass flight cancellations, disrupted travel plans of 1.3M customers, and cost the carrier over $500M. The lawsuit called the faulty software update from CrowdStrike "catastrophic" and claimed that the firm forced untested and faulty updates to its customers, causing over 8.5M Microsoft Windows-based computers around the world to crash. The outage affected industries such as banks, healthcare, media companies, and hotel chains. Delta claims CrowdStrike is liable for over $500M in out-of-pocket losses, lost profits, expenditures, and reputational harm and future revenue loss. The Transportation Department opened an investigation into the incident. Delta's lawsuit argues that if CrowdStrike had tested the faulty update on even one computer before deployment, the computer would have crashed.