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Good morning. Today we’re covering:
We begin, though, in the Middle East where Israel has begun a ground offensive in Lebanon, despite calls from its western allies for a ceasefire.
In a brief statement released in the early hours of this morning, Israel said the operation would be “limited, localised, and [involve] targeted ground raids” against Hizbollah in southern Lebanon. It warned “heavy fighting” was taking place in the border area.
The incursion follows two weeks of targeted operations by Israel’s military that has decimated Hizbollah’s top chain of command, including the assassination of its leader Hassan Nasrallah, the destruction of its communications network and a bombing campaign that has killed 1,000 people in Lebanon and led to the displacement of as many as 1mn.
But, in the first public remarks by Hizbollah’s leadership since Nasrallah’s assassination, the group’s deputy leader Naim Qassem was defiant yesterday.
“If the Israelis want a ground incursion, the resistance forces are ready for that,” Qassem said. Our reporters in the region are following developments.
We have more insight below into what this means for the region:
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Where will it stop? Israel’s offensive in Lebanon has moved into a new, riskier phase that leaves the region on edge.
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Opinion: We are witnessing a substantial shift in the balance of power in the Middle East, writes John Sawers, former chief of Britain’s MI6.
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The FT View: As Israel prepares to mark the grim anniversary of Hamas’s horrific October 7 attack, Netanyahu should take his wins and chart a new course, writes our editorial board.
And here’s what else I’m watching today:
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Markets: Fourth-quarter trading begins with the S&P 500 up more than 20 per cent this year. The benchmark index closed the third quarter at 5,762.48, a gain of more than 5.5 per cent since the end of June.
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US election: Democratic and Republican running mates Tim Walz and JD Vance will go head to head in the only scheduled debate between the vice-presidential candidates ahead of the November 5 election.
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Company results: Nike reports its first set of results since announcing that company veteran Elliott Hill will replace chief executive John Donahoe later this month. The sportswear company has lost market share to rivals such as Hoka and Roger Federer-backed On in recent years.
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Economic data: Activity in the US manufacturing sector will come into view today with the release of the Institute for Supply Management’s manufacturing index for September.
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Mexico: Claudia Sheinbaum assumes office as Mexico’s first female president.
Five more top stories
1. Ports along the US east and Gulf coasts have shut down as thousands of dock workers went on strike for the first time in nearly five decades. The affected ports, stretching from Maine to Texas, together handle a quarter of the country’s international trade, worth $3tn a year, according to The Conference Board.
2. Federal Reserve chair Jay Powell yesterday signalled that the US central bank would consider reverting to its more usual quarter-point cut in November if economic data remained robust. He said the goal of the central bank was to move US monetary policy “over time towards a more neutral stance”. Here’s more on what Powell said about the interest rate outlook.
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Mohamed El-Erian: Jay Powell’s justification for the unusually aggressive start to the central bank’s rate-cutting cycle reinforces the belief that we never exited the monetary policy regime that first flourished in the run-up to the 2008 global financial crisis.
3. Investors are turning to complex derivatives trades as they seek to profit from an uncertain US presidential race, which remains extremely close with fewer than 30 trading days to go. Instead of predicting who will win, a growing number of investors are betting on volatility rising sharply in the coming weeks. Here’s more on the bets investors are making.
4. Accounting firm BDO lost celebrity clients led by the rapper Jay-Z following accusations that a staff member had been stealing money from customer accounts. Megan Thee Stallion and rapper Fat Joe were also among the affected stars. Here’s what we know so far about the allegations.
5. The chief executive of SAP, Europe’s largest software firm, has cautioned EU policymakers against over-regulating artificial intelligence and widening the already large gap with the US in the transformative yet nascent sector. Christian Klein told the Financial Times that if it was easier to test AI models in America, Europe would be at a “massive disadvantage”.
The Big Read
Ukraine is heading into what may be its darkest moment of the war so far. It is losing on the battlefield in the east of the country, with Russian forces advancing relentlessly, and facing the prospect of winter energy shortages. As Volodymyr Zelenskyy returns home from the US, he faces an exhausted country and increasing pressure to find a negotiated settlement, with soldiers at the front fearing a “forever war”.
We’re also reading . . .
Chart of the day
With perfect hindsight Walmart’s sale of its entire stake in the Chinese ecommerce giant JD.com back in August “looks awesomely, hilariously terrible” write Robin Wigglesworth and Robert Smith.
Take a break from the news
They say never to meet your heroes. What about revisiting former homes? Speaking from personal experience, Sophie Heawood advises against it: seeing what the new owners have done rarely works out well.
Additional contributions from Tee Zhuo and Benjamin Wilhelm.
