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investing involves risk principal loss is possible Good morning from the Financial Times today is Friday May 2nd and this is your FT News briefing.
Amazon sees danger ahead and market volatility is giving European banks a boost plus Australians have a big election coming up and on the ballot is the cost of living and Donald Trump.
I'm Mark Filippino and here's the news, you need to start your day.
Amazon issued weaker than expected guidance for the second quarter.
The tech giant reported earnings yesterday, and it said it's gonna get hit by US President Donald Trump's tariffs too.
The group said it expected an operating income of between $13 and $17 .5 billion in the quarter we're in right now.
Wall Street was betting on $17 .7 billion.
Amazon imports about a quarter of the items it sells from China, which the US is now taxing at least 145%.
Amazon is trying to negotiate steep discounts with its suppliers to try and dampen the effects.
The company's share price fell around 5 % in after -hours trading yesterday.
European banks got a major windfall last quarter.
UBS, Société Générale, Barclays and Deutsche Bank reported earnings this week.
Their trading revenues shot up because of the global market volatility that followed US President Donald Trump's tariffs.
Here to talk more about this is the FT's European banking correspondent, Simon Foy.
Hey, Simon. Hey, Mark.
So first off just how much of a windfall are we talking here?
So we're talking about the pretty big windfall that we've seen in the first quarter among European banks.
So you had earlier this week, UBS, its trading business surged by more than a third, to a record $2 .5 billion.
Then you also had SocGen in France, their trading revenues climbed 11 % that was driven by their equities business mainly.
And then you had Barclays in London.
They reported a 16 % rise in their trading revenues.
So what you're seeing here, I suppose, is you have this stellar trading performance that has helped the three banks profits sort of surpass their expectations for the quarter.
And that has really cushioned the blow from a slowdown in deal making that we've also seen during the period.
Yeah, so it's no secret the first quarter of this year was not a great one for markets.
Why was that actually a good thing for these European banks in just banks generally.
If you step back to look at the broad sort of breakdown of an investment bank, you have sort of the investment banking side, where that sort of advising on things like IPOs on capital raises on M &A activity, to the uncertainty created by Trump's erratic tariff policy has broadly sort of dumped activity on that side of things.
But on the trading side, there has been a ton of activity as investors have tried to navigate this very volatile market and it's been that volatility that has helped all these banks and their trading arms sort of produce very significant revenues during this period.
Sounds a lot like what we heard from US banks when they reported earnings a few weeks ago right?
Absolutely yes it's very similar so we were seeing an uptick on the trading side whereas the investment banking and advisory side is down quite a bit so in the US in recent weeks we seen JP Morgan Chase, Goldman Sachs, Morgan Stanley, as well as Bank of America and Citigroup so together they generated 37 billion in trading revenues in the quarter.
While we're not seeing quite as high a number in Europe, the trend is certainly the same.
Are these European banks expecting to see this kind of windfall continue or taper off?
So as we think about the timeline that the first quarter obviously ended at the end of March and then you had early April Trump's so -called Liberation Day tariff announcements, so we saw a lot of activity that first week of April, which is what UBS's CEO Sergio Amati said this week.
But he said in more recent weeks we have seen that cool down a bit.
So I think while there will be a certain uptick in those first few weeks of April, I think we're probably now settling into a more normalized market as well.
Simon Foy is the FT's European banking correspondent.
Thanks, Simon. Thanks, Mark.
JS Byerly Australia heads to the polls this weekend, Labor Party incumbent Anthony Albanese has made a dramatic turnaround against opposition leader Peter Dutton in the polls.
Voters are considering the country's stalled economy and how Australia handles being in the middle of the US -China trade war.
Here to talk about it is the FT's Nick Fildes in Sydney.
Nick, how do voters feel about the Australian economy right now?
Nick Fildes It's very much been, or was thought to be, a cost of living election.
Australia, like a lot of countries, has been suffering very high levels of inflation on things like food and fuel.
And that's angered the population quite a lot, especially in the outer suburbs, where people are very dependent on their cars, where you have young families.
And it's also playing out in the form of housing and the rents and mortgages obviously a lot more expensive than they were.
That's a real issue in Australia where we've had a housing shortage for some time.
So we ended this election with these cost of living questions really hanging over what the candidates are able to offer.
So given the high cost of fuel, Nick, how are political parties handling the country's energy situation in the run up to the election?
As part of the cost of living crisis, power bills, household levels and industrial have been going through the roof, and both of the major parties in Australia have tried to latch on to that as a potential vote winner.
The incumbent party, the Labor Party, have introduced energy subsidies and pledged more to help people pay for those very high bills.
The coalition, led by Peter Dutton, the right wing alternative, they flirted and put on the table the idea of transitioning to nuclear power, which we don't have, it's actually banned here.
So that was seen as a potential winning strategy for the opposition.
And partly what it was also reflecting was the fact that the Labour Party and the Greens, which is the third largest party here, have been really pushing hard on the renewable energy transition.
And that's created quite a lot of disconnect in some parts of the country, especially coal mining, regions of Queensland and New South Wales.
A lot of proposals for offshore wind farms, for example, have proved incredibly unpopular in parts of the country and that's become a major electoral issue.
So the polls are pointing to a victory for the Labor Party in Albanese.
What does that tell us about the political dynamics at play?
The polls have really, really turned.
It's very interesting.
And it's also interesting to compare it to the Canadian election that we've just had.
At the start of the year and up to February, the opposition had really, really looked like they were going to pull off a remarkable win.
This would be the first time there'd been a one -term government in Australia since the Great Depression.
However, the Trump effect, as happened in Canada, has landed with a real bang in Australia.
the imposition of tariffs, the aggression towards allied countries from the Trump administration has actually been felt on the ground here.
And it has really turned the polls.
It's not the only factor, but we are now seeing that on Saturday, Anthony Albanese, the Labor prime minister, is looking like he is going to win a majority again, which was completely unexpected only two or three months ago.
So you mentioned the Trump factor, Nick.
How does this election impact Australia's view toward the US China trade war?
Australia is in a bit of an awkward position really because our main trading partner is China Although only five years ago.
We were involved in a trade war with them ourselves During the course of this government We've repaired a lot of his relations a lot of the goods that were struggling to get sold into the country like fine wine and barley and coal have returned.
So the relationship with China, at least at the trading level, has repaired quite a lot.
But our main security partner is America.
We're sort of caught in the middle of this sudden trade war, geopolitical war, that has broken out.
And the elections sort of landed in the middle of that, if you like, and is asking voters who do they think of the two candidates they can trust to navigate not only the relationship with Donald Trump, but also the relationship with President Xi.
So Australia is really trying to chart that course and the candidates are setting out their stall on that basis.
Nick Fildes covers Australia for the FT. Thanks, Nick.
No problem at all. You can read more on all these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back next week for the latest business news.
The FT News Briefing is produced by Sonya Hudson, Fiona Simon, Lulu Smith, Ethan Plotkin, Kasia Brussayan and me, Mark Filippino. We've helped this week from Michaela Tindera, Josh Gabbard -Doyon, Persis Love, Flo Phillips, Michael Lello, Peter Barber, David De Silva and Gavin Coleman.
Our executive producer is Topher Forhez, Cheryl Brumley is the FT's global head of audio, and our theme song is by Metaphor Music.
We'll be right back.
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