Good morning from the Financial Times.
Today is Friday, February 21st, and this is your FT News Briefing.
EU debt markets could be in for a shakeup, and Walmart is dusting the dirt off its shoulder.
Plus, Donald Trump doesn't want to be responsible for defending Europe, and that's forced the EU to move quickly.
The alarm bell's gone off several times, and the snooze button has been press, but that's no longer an option.
I'm Mark Filippino, and here's the news you need to start your day.
Investors want the European Union to revamp rules around debt securitization.
Just a quick refresher, debt securitization is when things like risky corporate loans or mortgages are packed up into one chunk that banks then sell off to investors.
These kinds of securities are now heavily regulated because of their key role in the global 2008 financial crisis.
But bond giant PIMCO and Italian insurer Generale told the EU that those safeguards are now strangling the market.
They're hoping that reforms would kickstart sectors in the EU and UK.
For what it's worth, Brussels is investigating ways to revive the debt market, the idea being that a thriving market could attract more financing for businesses and households.
About a decade ago, Walmart was staring down a big threat to its dominance.
Amazon overtook its market capitalization and made its big box stores look outdated.
But now Walmart has come roaring back.
Here to tell us how Walmart did it is the FT's consumer editor, Greg Meyer.
Hi, Greg. Hi, Mark.
All right. So give us a sense of scale.
Just how big has Walmart's glow up been since it hit a low point a few years ago?
Well, Walmart has been the world's largest retailer for a long time now.
But about a decade ago, it was facing a very serious threat from Amazon.
Amazon overtook it in market capitalization in 2015.
Amazon bought Whole Foods in 2017, which added brick -and -mortar stores to its empire.
And investors were beginning to question Walmart's potential for future growth.
Since then, Walmart has shown that it can survive and genuinely compete with Amazon.
So yesterday, Walmart reported its latest annual results, and they brought in $680 billion in annual revenue.
That's a new high for them.
It's by far higher sales than any other company on the planet.
So tell me a little bit about how they did it.
What caused this turnaround?
There's a lot going on at Walmart.
To start with, there are big macro factors that have been beneficial.
The U .S. and many other economies went through a major surge of inflation in the past few years, and as customers were trying to save money, many of them increasingly sought out lower -cost retailers such as Walmart.
In addition, Walmart has invested heavily in its e -commerce offering, which includes ordering online and then you can pick up what you order in store.
You can get it delivered at your house.
They've built a third party marketplace that has other non -Walmart merchants who list their products for sale on Walmart .com, similar to Amazon.
That now includes more than, I think, 700 million individual products.
Okay, so inflation has been good for Walmart, and its focus on e -commerce has also helped it bounce back.
But I'm wondering, Greg, what kind of risks does it face?
Well, I mean, one risk, as with any company, is just execution risk that, I mean, they're running a big, complicated company.
There's the continued competitive threat from Amazon and others.
And then there are big macro risks, including tariffs, as the Trump administration looks to impose tariffs on any number of U .S.
trading partners. And that could, in theory at least, could raise prices.
Another risk is just, you know, Walmart is so big, it's hard to grow a very big company even bigger.
So Walmart's shares actually fell sharply yesterday because even as it reported record sales, it offered a more cautious sales outlook for this year.
I mean, I think executives are saying they're really being prudent, but it may not be able to grow at the same pace that Wall Street has been accustomed to in recent months.
That's the FT's Greg Meyer.
Thanks so much, Greg.
Thank you. Alibaba has some wind in its sails.
Yesterday, the Chinese e -commerce giant reported earnings.
The company saw an 8 % rise in revenues last quarter.
That's its fastest revenue growth in over a year.
Investors sent the stock price up as much as 12 .5 % after the news dropped.
And Alibaba's CEO, Eddie Wu, has a plan for all this momentum.
He wants to aggressively invest in more cloud and AI infrastructure.
In fact, Wu said Alibaba will spend more on those things over the next three years than it had over the past decade.
But he declined to say exactly how much Alibaba wants to invest.
this week has been dominated by talks to end the war in ukraine and president donald trump has been clear he wants the u .s to pull back its military presence in europe which means the continent will have to fend for itself the ft's john paul rathbone has been thinking about how the eu will do that and he's
here with me now to talk about it hi jp hi mark so i guess the first thing we should know is how much of a military presence does the U .S.
have in Europe right now?
What would Europe be missing without the U .S.?
I think the best way to look at it is what kind of military presence the U .S.
has in Europe. And the bit that counts are the stuff that makes military operations possible.
That includes intelligence, satellite technology, giant transporter planes, planes that can do mid -air refuelling, that kind of stuff.
There are also roughly 90 ,000 troops stationed across Europe.
20 ,000 of them were brought in by Biden immediately after the full -scale invasion of Ukraine.
The main issue is that the US is still essentially the arsenal of democracy.
It has these production lines which were never mothballed in the same way they were in Europe after the fall of the Berlin Wall.
You can't push a button when there's nothing at the other end of it for it to magically appear.
Okay. So then what can Europe do to get prepared?
So it's wrong to think of Europe as being entirely defenseless.
It's not. And, you know, Europe was involved in missions in Afghanistan and Iraq, and they're still involved in missions in Bosnia and so on and so forth.
So if the main problems are, one, equipment, you can't press a button magically, so that means you can buy it from the United States instead.
Second point on personnel.
There are well over a million troops full -time in Europe.
The problem is that they're not always ready.
They're in various states of readiness, and that's true of all armies everywhere.
But they need to be made more ready, and for that they need ammunition, so that takes you back to the equipment point.
Okay, so how does Europe square both points?
I mean, how concerned should European countries be about their defense capabilities?
I think there's a lot of talk at the moment is figuring out, A, how can Europe support Ukraine?
And there are lots of plans that are being detailed about that.
And B, what does that mean for the defense of Europe per se?
And the two things are quite distinct.
And there's no reason to think that NATO countries in Europe are unprotected, because there's still the airpower.
We haven't seen any role played by Western airpower in the conflict in Ukraine.
And that is one area where the West has got a distinctive and complete advantage over the Russians.
So if there was an attack on Europe, you'd have air power coming into play, which we haven't seen so far.
So JP, we've been talking about what Europe needs to do to defend itself, but will it actually do it?
Well, the European approach or the Western approach, until now you could categorize it as peace through strength, but terms and conditions apply.
And those terms and conditions applied include US backing.
So it's now peace through strength, but under terms and conditions that are no longer applicable.
And it comes down to what's feasible.
Earlier this week, you saw Denmark all of a sudden ramp up its projected defense spending to 3%.
And that's what Mark Rutter, the Secretary General of NATO, has said that everyone needs to do.
I think a lot of Europe, and especially the countries that have any kind of proximity to a Russian border, are waking up very fast.
The alarm bell's gone off several times, and the snooze button has been pressed, but that's no longer an option.
And this kind of free -riding that a lot of Europe has done for a long time is no longer possible.
It's worth bearing in mind that Trump is not the first president to complain about European free -ridings.
JF Kennedy did it. Even Eisenhower did it, and he was the one who was partly responsible for setting up NATO.
So this is not a new situation, but it is definitely a very big wake -up call.
John Paul Rathbone is the FT security and defense correspondent.
Thanks so much, JP.
Thank you. Before we go, don't forget, you can get 40 % off an annual digital subscription to the FT right now.
Just go to ft .com slash briefing sale.
That's ft .com slash briefing sale.
We'll have a link to that in the show notes.
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