Markets surge on Argentine election results

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Good morning from the Financial Times. Today is Tuesday, October 28th, and this is your FT News Briefing. American M&A is on a tear. And investors seem to be loving Argentina's election results. Plus, Apple's services division is expected to hit record revenues. It's extraordinary that this is a division of apples, which standalone is bigger than the entire annual sales of Walt Disney or Tesla or Bank of America or Nestle. I'm Sonia Hudson, and here's the news you need to start your day.

Seems like it was merger Monday yesterday. U.S. companies announced $80 billion worth of deals. They happened in some of the country's biggest industries, like banking, biotech, and utilities. The Trump administration has signaled that it's open to large mergers and acquisitions, and that's helping revive consolidation. M&A is also being fueled by falling interest rates and more clarity on tariffs. 2025 is on track to be the biggest year for mega deals since 1995.

Investors in Argentina were riding high yesterday. The country's currency and government bonds surged after a landslide election victory for President Javier Malay's party. Investors are betting that the win will rescue Malay's pro-market reforms and stop a run on the peso. Here to tell us more is the FT's Kira Nugent in Buenos Aires. Hi, Kira. Hi, Sonia.

So just how much enthusiasm did we see for this election result in the markets yesterday? Give us a sense of scale. A lot. The peso strengthened 6% on Monday. You saw shares in some Argentine companies that are traded on Wall Street jumping by 50%. The local stock exchange in Buenos Aires jumped 20%. And I'd say probably... Most importantly for Malay in the long run, Argentina's country risk, which is a measure of the interest premium that investors require to hold Argentine debt, has plunged.

And why did we see such a big reaction? I mean, why were investors so relieved by this election result? So over the last month, there's been a sell-off of Argentine assets that began in September when Malay's party lost a really important provincial election in Buenos Aires. And so that kind of cast doubt on Malay's ability to continue his free market reforms and his ability to keep the peso as strong as it currently is.

And this election result will give Malay much more strength in Congress, much more ability to continue his free market reform drive. And because people are less nervous, they're buying back into the peso and selling their dollars, which is going to enable Malay to... stop this run on the peso, at least in the short term. He has been greatly boosted in that effort to keep the currency strong by a $20 billion.

currency swap line pledged by the US last month, which, after statements by President Donald Trump, seemed to be contingent on the election result. And well, you know, this big election result should, in theory, give Malay access to that money if he needs it. Yeah, let's talk a little bit more about what this does for Malay's economic agenda. What do you think is next in terms of his free market reforms? So things...

look a lot easier for Millet now. He has said that he wants to pass tax and labor reforms, which are both kind of big, difficult pieces of legislation for Argentina. He... is much closer to a majority in Congress. His La Libertad Avanza party had 37 seats before and it's now up to 92 seats. But they will still need to negotiate with centrist opposition parties if they want to get to a majority and pass those reforms. And the picture is broadly the same in the Senate.

What risks still exist for Argentina's economy and its markets? Yeah, I mean, things are definitely not all peachy going forward. The economy itself has stalled a lot in the last few months as Malay's focus on fighting inflation has weighed on wages and activity.

Going forward, Malay will need to get growth started again to start rebuilding Argentina's central bank hard currency reserves, which he had kind of let remain very low because he wanted to keep the peso strong as a way to fight inflation. And his controlled exchange rate policy remains really controversial among investors. And they will want to see him liberalize that to restart growth and to bring in more investment.

And that's definitely something everyone is looking to see how the government addresses in the next few weeks. Kira Nugent covers Argentina for the FT. Thanks, Kira. Thanks, Sonia.

JPMorgan Chase has invested $75 million in an Idaho-based mining company. Perpetua Resources recently broke ground on a mine focused on antimony. That's a critical mineral used in military equipment, semiconductors, and batteries. This is the bank's first deal as part of a larger plan to inject about $10 billion in groups related to national security. J.P. Morgan said that plan would focus on themes like supply chains, defense, and energy independence.

It's an unusual move for a publicly traded company. But Chief Executive Jamie Dimon said it'll be, quote, 100% commercial.

Apple might be best known for its hardware, iPhones and MacBooks, but the services side of the business is also booming. The tech giant is expected to announce a record $100 billion in services revenue when it reports on Thursday. That's despite growing legal and regulatory threats to its app store business. The FT's Tim Bradshaw has been following this for us. Hi, Tim. Hey there. Okay, so first of all, which Apple services are generating all of this revenue?

Services includes a whole bunch of different things. So it's the fees that Apple takes from the App Store, it's iCloud subscriptions for backups, advertising, Apple Pay, TV+, music, the old adage about... Apple and its iPhones is that once you're in the ecosystem, it's very hard for people to leave. And all of those people, just by virtue of being part of the Apple ecosystem, end up spending a little bit more with Apple every year. You might take so many photos that you need to...

go up a tier in iCloud storage as I just have because I can't stop taking photos of my four-year-old. It's a big and sticky business for Apple that's been growing very, very steadily. And how significant would it be for Apple to hit this $100 billion revenue figure that analysts are projecting? Well, I just think it's extraordinary that this is a division of...

Apple's business, which makes up a quarter of their total revenue, but which standalone is bigger than the entire annual sales of Walt Disney or Tesla or Bank of America or Nestle. These are like huge businesses in their own right. Apple's little services business that you don't even hear very much about is bigger than all of them. Tell me more about that because Apple really made its name as a hardware provider. So what do these revenue numbers tell you about how the company is evolving?

Yeah, it's about a decade, I think, that they started breaking out the services as its own revenue line. You know, it's growing really fast. It's doubled in the last five years. It's doing what the Nokias and the Blackberries of the world never did, which is ensure that your business isn't dependent on the next piece of hardware that you release being a hit and that you actually are selling into a very loyal customer base and that you can upsell them.

all sorts of other things from F1 racing to cloud backups, all of these different things that when you have a huge audience, there's many, many different ways that you can extract more value from them. Well, I want to talk about the other side of this coin, which is the legal and regulatory scrutiny that Apple services have come under recently, especially the App Store. Can you give us a sense of what they're up against here?

Apple is up against a lot when it comes to legal and regulatory challenges all over the world. And this has been building for a number of years. There have been individual app developers which have complained to regulators in the US, Europe, and other parts of the world. that Apple's fees of up to 30% from digital goods purchases through the App Store are too high. And we've also seen regulators really go after...

this business as well. The European Union is forcing many changes to the App Store under the Digital Markets Act. And there is also a big antitrust case in the US from the Justice Department, which will likely come to trial in a couple of years.

Apple, for its part, I should say, says that it's very important for the security and reliability of how its products function, that it does vet all of the apps that go through the App Store, and the App Store provides this huge marketing distribution platform that developers wouldn't otherwise have. And so that's why it earns that fee. How could all of these legal and regulatory challenges impact Apple's services expansion? I think on...

On the one hand, it doesn't really seem like it's showing up in the numbers yet. But I think the bigger threat is that regulators start to do more of what Apple has been fighting in Europe over, where... All of the little things that make it more convenient to own an iPhone and transact through the App Store are replaced with...

competitive offerings, and suddenly that kind of element of loyalty and lock-in that Apple's been able to take for granted for the last 20 years of the iPhone's life start to be eroded away. So it may in fact be... competition from OpenAI making a phone or something like that that prides people's iPhones out of their hands, finally, rather than regulators. Tim Bradshaw is the FT's global tech correspondent. Thanks, Tim. Thanks.

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