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Argentina’s leftwing populist Peronist party has swept back to power in Sunday’s presidential elections, with former cabinet chief Alberto Fernández winning a clear victory over pro-market incumbent Mauricio Macri amid a deep economic crisis.
Mr Fernández triumphed with 48 per cent of the vote to 40.5 per cent for Mr Macri’s centre-right coalition, with 96 per cent of the ballots counted. Although the result was smaller than Mr Fernández had hoped for it ruled out the need for a second round of voting.
President-elect Mr Fernández said that he would meet Mr Macri on Monday to discuss the handover of power in what promises to be a difficult transition before he becomes president in December. “I hope that those who will now be our opponents are aware of the situation they have left us and that they help us to rebuild the country,” said Mr Fernández.
In a stark reminder of the difficulties facing the Argentine economy, the central bank announced overnight a dramatic tightening of restrictions on foreign exchange purchases. Argentines will now be limited to just $200 per month, down from a limit of $10,000 per month before the election, in an effort to conserve scarce reserves.
Argentina’s economy is shrinking, inflation is running at more than 50 per cent a year, unemployment is over 10 per cent and more than a third of the population lives in poverty.
One of Mr Fernández’s first tasks will be to renegotiate Argentina’s debt. The country is on the brink of its ninth debt default and is struggling to pay more than $100bn of foreign debt, much of it run up under a record $57bn IMF bailout handed to Mr Macri’s administration.
The victory was vindication for former president Cristina Fernández de Kirchner and her decision to invite the lesser known but more pragmatic Mr Fernández, who is no relation, to run for the presidency, while she became his running mate. (FT)
What does team Fernandez do next? This piece explains the challenges that lie ahead for the populist Peronist party, while this is a look at where it went wrong for the market-friendly Mr Macri. Meanwhile, this story identifies some of the bondholders braced for steep losses. (FT)
In the news
Tiffany rebuffs bid from rival
Upmarket jeweller Tiffany is expected to reject a $14.5bn takeover bid from French luxury group LVMH. News of the all-cash offer emerged over the weekend and Tiffany’s advisers on Sunday were assessing the merits of the bid, which was pitched at a 30 per cent premium to Tiffany’s closing share price at the time the offer was made earlier this month. However, Tiffany’s shares have since rallied and the offer today stands at a slimmer premium of 22 per cent. Meanwhile, a deal has been agreed in the unglamorous world of warehousing. Prologis, the world’s largest warehouse company, has agreed to acquire rival Liberty Property Trust for $12.6bn. (FT)
World’s most wanted man killed
Isis leader Abu Bakr al-Baghdadi was killed over the weekend in a special forces raid in north-western Syria. Donald Trump announced on Sunday the symbolic blow to the global terrorist network that conquered territory the size of Britain and launched attacks abroad. His death came just weeks after Mr Trump announced the withdrawal of US forces from north-east Syria, raising fears the jihadi group could surge back. (FT, NYT, CNN)
EU leaders have agreed a flexible extension to the Brexit deadline from October 31 to the end of January. Meanwhile, the UK parliament will vote later today on a Boris Johnson proposal to trigger a pre-Christmas general election on December 12. However, the opposition Liberal Democrats and Scottish National party are proposing an election date of December 9 — an idea the prime minister could support. Follow the latest Brexit developments on our live blog. (FT)
Forest fires rage in California
California’s governor Gavin Newsom declared a statewide emergency on Sunday as thousands were ordered to evacuate and more than 2m were without electricity after utilities shut off power in the face of raging wildfires. Bankrupt utility Pacific Gas and Electric, which supplies electricity and natural gas to most of northern California, has cut off power to avoid falling wires from igniting fires owing to 80 mile an hour winds. The shut-off is said to be the largest deliberate power outage in California’s history. (FT)
HSBC reports profit plunge
Third-quarter net profits at HSBC, one of the world’s largest banks, declined by 24 per cent in the third quarter, prompting interim chief executive Noel Quinn to announce plans to “remodel” large parts of the Asian-focused lender. Mr Quinn said that while parts of the business had “held up well in a challenging environment”, read Hong Kong, in others, mainly in Europe and the US “performance was not acceptable”. (FT)
AT&T and Elliott agree truce
US telecoms and media group AT&T and activist investor Elliott Management have reached a broad truce with in a deal based around a “three-year action plan” that will put the company’s assets under review and reconfigure its board. There was a more immediate boardroom departure at music-streaming service Spotify, which announced its chief financial officer was leaving. (FT)
European election round-up
Germany’s far-right, anti-immigration Alternative for Germany party was the big winner in Sunday’s regional election in the eastern state of Thuringia. The AfD’s share of the vote increased from 10.6 per cent in 2014 to 23.8 per cent yesterday, catapulting it into second place. The ruling hard-left Die Linke party secured 31 per cent of the vote, making it the largest party. In Italy, a coalition led by Matteo Salvini’s anti-migration League party won power in the once staunchly leftwing central Italian region of Umbria, following regional elections on Sunday. (FT)
Italian PM’s Vatican investment links
Staying in Italy, a Vatican-backed investment fund at the centre of a financial corruption investigation was behind a group of investors that hired Giuseppe Conte, now Italy’s prime minister, for a deal it pursued just weeks before he took office, according to documents seen by the FT. Separately, an assembly of Roman Catholic bishops from the Amazon on Saturday proposed that married men in the remote area be allowed to be ordained priests, a move that could lead to a landmark change in the Church’s centuries-old discipline of celibacy. (FT, Reuters)
UK lorry tragedy
Authorities on Sunday released on bail three people arrested in connection with the discovery of 39 bodies in one of the UK’s worst human trafficking tragedies. Evidence mounted that most of the dead were from Vietnam, where family members of the suspected victims gave DNA samples to aid in identification. (FT, Reuters)
The day ahead
Alphabet, the parent company of Google, reports third-quarter earnings after the market closes on Monday. Last week the search giant was showered with praise from the White House after it revealed a breakthrough in quantum computing. But investors will be more interested in what the company has to say on the ongoing antitrust investigations that are targeting Big Tech in the US.
Mario Draghi on Monday hands over the European Central Bank presidency to Christine Lagarde amid one of the most vicious internecine feuds in the bank’s history. Our Big Read imagines the ECB under Ms Lagarde. The FT View calls for the central bank to finish the job Mr Draghi started. (FT)
Virgin Galactic shares blast-off
Investors will have their first chance on Monday to buy stock in a space tourism venture when Sir Richard Branson’s Virgin Galactic lists on the NYSE. (FT)
China’s Communist party meets
The Central Committee of China’s ruling Communist party begins a four-day meeting on Monday, which could see the powerful policy-setting body promote the next generation of leadership to the Politburo Standing Committee. (FT, SCMP)
Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead. Click to subscribe here. And don’t miss our FT News Briefing podcast — a short daily rundown of the top global stories.
What else we’re reading
Masters in Management
The University of St Gallen, the Swiss business school, is the best place in the world to study for the Masters in Management degree, according to the latest Financial Times league table of institutions that offer the popular business qualification for graduates with little or no prior work experience. The latest results revealed that applications to study on MiM programmes around the world rose by 3 per cent last year, while MBA demand was flat.
India’s economic pile-up
Not long ago, India was the world’s fastest growing large economy. But a deepening economic malaise is becoming impossible to ignore, with economists blaming New Delhi’s own policy mis-steps under Narendra Modi. The FT View warns that Mr Modi’s social agenda is crowding out economic concerns. (FT)
Fact-checking Facebook’s fantasies
Facebook insists it does not want to be responsible for false political advertising. But it is absurd to posit that a flagship of surveillance capitalism with a half-trillion dollar market cap represents a counterculture, Rana Foroohar writes. (FT)
Living and working with cancer
Businesses need to prepare for cancer, which is classed as a disability in the UK, one business leader tells Emma Jacobs, aiming to demystify the impact of the condition at work and in our lives. Pilita Clark imagines how much more work we could get done by restricting email use to one hour a day. (FT)
Boeing pushed for law that undercut oversight
With a few short paragraphs tucked into 463 pages of legislation last year, Boeing scored one of its biggest lobbying wins: a law that undercuts the government’s role in approving the design of new aeroplanes. The changes were agreed before two Boeing 737 Max aircraft crashed in separate fatal accidents, killing nearly 350 people. The New York Times investigation was published just days before Boeing chief executive Dennis Muilenburg testifies before Congress. (NYT, Reuters)
The business case for diversity
Inclusion gives companies a competitive edge over their peers, according to an analysis that found more diverse companies not only have better operating results, but their shares outperform those of the least-diverse companies, with the financial industry the best-performing sector. (WSJ)
Video of the day
Google’s quantum computing leap
The FT’s Madhumita Murgia examines the claims surrounding Google’s new quantum computer and looks at how the technology could change our lives. (FT)