Harris, Trump eye Pennsylvania in final election sprint

Good morning. Here's what happened overnight and what you need to know today.

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1.

Election swings: Donald Trump and Kamala Harris were frantically pushing their closing messages in the presidential race across key swing states, including the battleground state of Pennsylvania on the eve of election day. With 19 electoral votes, the state - where the NYT/Siena poll shows the candidates tied at 48% - is crucial for both paths to victory. More than 78 million Americans have voted early, either in person or by mail, according to a tracker by the University of Florida. Harris made stops in Pennsylvania cities including Pittsburgh and Philadelphia, accompanied by prominent figures like Alexandria Ocasio-Cortez and Governor Josh Shapiro. Trump was in North Carolina before traveling to Pennsylvania and Michigan, maintaining his divisive rhetoric, including saying he wouldn’t mind someone shooting “through the Fake News” at a rally on Sunday. Both campaigns have plans for a range of outcomes on election night and an expected delay in results. (NYT)(WSJ)(FT)

2.

Defence boost: Labor will pledge nearly $600 million for ADF recruitment and retention, alongside new support for Ukraine, as it releases a new plan to boost the number of soldiers in Australia. The 2024 Defence Workforce Plan will be released today, addressing Defence’s challenge in attracting and retaining staff amid a competitive labour market. The plan makes clear that to stabilise and grow, ADF intake must rise from 5,500 to 9,000 per year within a decade, and the median service length should increase from seven to 12 years. The $600 million will extend continuation bonuses for eligible permanent members at four years of service and introduce a second bonus at seven to nine years. Additionally, operational reserves will grow by 1,000 personnel by 2030. Support for Ukraine will include 14 rigid hull boats worth $14 million, following the recent gifting of 49 M1A1 Abrams tanks. (Capital Brief)

3.

Election bets: The US dollar weakened, and Treasury yields fell as markets adjusted positions ahead of Tuesday’s US presidential election, with traders exiting positions that had benefited from speculation that Republican candidate Donald Trump may win. The Bloomberg Dollar Spot Index dropped 0.7%, marking its steepest decline since August, and the 10-year US Treasury yield decreased by up to 12 basis points to 4.26%, reversing gains from last week. Markets had been positioning for a Trump victory, expecting policies driving low taxes for the wealthy and for corporates, tariffs and stricter immigration policies. Trump’s planned tariffs and mass deportations are viewed as potential drivers of inflation, which could push both longer-term yields and the dollar higher. Harris’s lead in an Iowa poll suggested potential shifts, triggering traders to unwind ‘Trump trades’. Betting markets are also showing tighter results, with odds shifting toward Harris on PredictIt but still favouring Trump on other platforms. (Capital Brief)(FT)(Bloomberg)(WSJ)(Reuters)

4.

AI funds: Physical Intelligence, a robot AI startup focused on developing universal robotic software, raised USD400 million ($606.76 million) in early-stage funding, backed by Jeff Bezos, OpenAI and VC firms Thrive Capital and Lux Capital, Reuters reported citing the company. The fund raising values the San Francisco-based company at USD2 billion, according to PitchBook data. Last week, the company released a report showing how its software, π0 (pi-zero), enabled robots to perform various tasks like folding laundry and bagging groceries. Funding for AI and cloud startups in the U.S., Europe, and Israel is projected to reach USD79.2 billion in 2024, according to VC firm Accel. (Reuters)

5.

Record outflows: Investment manager Franklin Resources, known as Franklin Templeton, posted record outflows of USD31 billion ($47 billion) for the quarter ending 30 September and a USD85 million net loss for the period. The result was primarily driven by USD37 billion in net outflows at its subsidiary, Western Asset Management, amid an SEC regulatory probe. The California-based fund manager, with USD1.7 trillion in assets under management, took a USD389.2 million impairment charge tied to mutual fund contracts managed by Western Asset. The SEC investigation is in relation to trade allocations involving treasury derivatives, with Western’s co-CIO, Ken Leech, receiving a Wells Notice in August and taking a leave of absence. Total investment management fees rose 8% year-over-year to USD1.77 billion, while adjusted quarterly profit excluding one-time costs fell 3% to USD315.2 million. (Capital Brief)

6.

Moncler bid?: Shares in Burberry surged as much as 8.10% on Monday after Miss Tweed, a fashion industry publication, reported Italian luxury jacket maker Moncler may be considering bidding for the London-based fashion group. Moncler declined to comment on “unsubstantiated rumours,” and Burberry also declined to address the report. Nonetheless, Burberry’s stock closed 4.80% higher at 851 pence ($16.71), after falling about 40% year-to-date amid weak sales in China and tough competition. Moncler’s shares slipped 1.06%. The potential bid, which according to the Paris-based publication could create a specialised outdoor clothing giant, comes amid Burberry’s efforts to revive demand, including appointing Joshua Schulman as CEO in July and Daniel Lee as creative director in 2022. The Miss Tweed report included speculation that Bernard Arnault, CEO of LVMH and a recent investor in Moncler with a board seat, supports the idea. (Capital Brief)(WSJ)(Reuters)(Morningstar)

7.

iPad checks: EU antitrust regulators will assess whether Apple's iPad OS complies with the bloc's Digital Markets Act (DMA), which aims to curb Big Tech’s dominance, Reuters reported citing the European Commission. The review follows Apple's compliance report for iPad OS, designated as a key gateway for businesses by the Commission in April. The DMA mandates Apple to allow users to choose their default web browser, support alternative app stores and enable headphones and smart pens to access the iPad OS features. Non-compliance with the obligations could result in hefty fines of up to 10% of global annual turnover. The Commission’s assessment will also consider feedback from stakeholders. Apple has not commented on the development. (Reuters)

8.

NK troops: Ukraine reported its first military engagement with North Korean troops in Russia’s Kursk region, marking the first time a foreign military has been involved in combat since the Russian invasion began in 2022. Andriy Kovalenko, Ukraine’s counter-disinformation head, said in a Telegram post that DPRK soldiers had been targeted, according to media reports. Ukraine’s intelligence has estimated around 12,000 North Korean troops, including officers and generals, were deployed to Russia, with 8,000 in Kursk. Ukrainian President Zelenskyy called for allies to act against North Korean deployment, while South Korea and the EU have condemned North Korea’s involvement. Meanwhile, Putin met North Korean Foreign Minister Choe Son-hui in Moscow, exchanging greetings from Kim Jong Un. (Newsweek)(FT)(Reuters)