Aurelia Butler

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to receive the newsletter every weekday. Explore all of our newsletters hereGood morning. In your final FirstFT of the week, we’re covering:Large investment funds offload shares to avoid tax troubleThe extreme ads targeting swing votersAnd why peak population maybe coming sooner than you thinkBut we start with partner pay at some of the US’s biggest law firms, which has hit record highs, according to a leading survey.Researchers at recruitment specialists Major, Lindsey & Africa, who surveyed top lawyers at the country’s leading 200 firms, found that partner pay had risen 26 per cent over the past two years to an average of $1.4mn.The boom in pay comes amid the early signs of a revival in mergers and acquisitions activity — including several so-called megadeals — and a sharp increase in litigation.But the MLA survey found that the high rewards were not distributed fairly between male and female partners. Top male lawyers earned almost 30 per cent more than their female counterparts on average, at nearly $1.7mn.While still a significant divide, the gender pay gap has narrowed from 47 per cent reported in MLA’s survey four years ago. The study said the discrepancy was driven in part by the fact that men “significantly outpace women in originations”, meaning they bring more business to their respective firms, and a difference in billing rates. Read more of the survey’s results, including geographical differences in pay.Here’s what else I’m keeping tabs on today and over the weekend:Companies: Consumer brands including Colgate-Palmolive and Sharpie pen maker Newell Brands report earnings. Economic data: Durable goods orders and the University of Michigan’s consumer sentiment index are published. Campaign events: Vice-president Kamala Harris will hold a rally in Houston, Texas, where global pop star Beyoncé is expected to appear. Meanwhile, former president Donald Trump will stage a rally in the swing state of Michigan. Israel-Hamas war: CIA chief Bill Burns and his Mossad counterpart David Barnea renew talks over a potential Gaza peace deal in Doha this weekend. Elections: Georgia holds parliamentary polls tomorrow that could decide whether it tilts towards Russia or the west. Bulgaria, Japan, Lithuania, Uruguay and Uzbekistan also have elections on Sunday.Five more top stories1. Large investment funds run by groups such as Fidelity and T Rowe Price are being forced to offload shares to avoid getting into trouble with US tax authorities. This year’s lopsided stock market rally has pushed them up against strict limits requiring them to maintain diversified portfolios. The stock market rally has driven the S&P 500 and other indices to near-record levels of concentration.2. The European economy is set to fall further behind the US’s by the end of the decade, the IMF warned yesterday. The fund estimated Europe’s annual GDP growth rate for the 10 years until 2029 would fall to just 1.45 per cent, while the US’s is estimated at 2.29 per cent for the same period. Here’s why. 3. The US has approved a huge new lithium mine as part of its strategy to break China’s dominance over the supply chains of critical minerals. The project in Nevada is the first such mine approved by the Biden administration, which has also offered a $700mn loan to help build the project. Read the full story.4. Vladimir Putin appeared to confirm yesterday that North Korean soldiers had been sent to fight in Russia as Ukrainian intelligence officials said troops had arrived in the Kursk region. Their presence has been an open secret since South Korea’s intelligence service released footage of North Korean troops training in Russia’s far east. More details on the Russian president’s remarks.China’s reaction: The troop deployment threatens to destabilise the delicate balance of power on the Korean peninsula, upsetting China.5. Justin Trudeau has announced big cuts to Canada’s immigration programme in response to a growing public backlash over the impact of migration on the cost of living and housing affordability. Trudeau, who trails opposition Conservative party leader Pierre Poilievre by 13 points in the polls, blamed companies for abusing a temporary work scheme for rising housing unaffordability and youth unemployment. How well did you keep up with the news this week? Take our quiz.Today’s big read© FT montage/Erik S Lesser/EPA/ShutterstockThe US election will come down to seven key battleground states, and voters who live in them are being inundated with some of the most sophisticated and targeted advertising in political history. As Kamala Harris and Donald Trump try to win over undecided voters in a tight race, political ads in the swing states — from billboards to text messages — are everywhere, all the time.We’re also reading . . . Climate change: The world is on course for a “catastrophic” temperature rise of more than 3C above pre-industrial levels, according to a new UN report. ‘Bespoke’ banking: Ultra-wealthy clients who can pay for customised care in investments, tax and family governance may not get everything they need. Italian tomatoes: A tomato sauce magnate tells the FT that cheap imports from China’s Xinjiang region have damaged the “dignity” of Italy’s staple red fruit.Israel’s dead fathers: Since last October, families of fallen Israeli soldiers have been offered post-mortem sperm retrieval. FT Magazine explores the process — and its implications.Chart of the dayMethods for predicting the world’s population growth vary and as a result so do the outputs. But, one after another, the projections keep missing — repeatedly underestimating the pace and duration of falls in birth rates. And new research challenges the conventional wisdom of a U-shaped recovery trend, writes chief data reporter John Burn-Murdoch. Take a break from the newsAspen is mostly known as a glamorous ski resort. The exceptional and reliable snow conditions and the challenging and varied terrain guarantee its continued winter-destination appeal; but this is only part of Aspen’s identity, writes Josh Hickey, in this weekend’s HTSI autumn travel special.Prayer flags at the edge of the winter ski area on Aspen Mountain in Colorado More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The participation of EU partner nations in a summit in Russia hosted by Vladimir Putin is a message for Brussels to stop “lecturing” other parts of the world, said the top official representing the bloc’s governments.European Council president Charles Michel told the Financial Times that the EU needed to show more respect towards developing countries with which the organisation has signed strategic, trade or political co-operation agreements if it wanted to combat Chinese and Russian efforts to expand their influence in Africa, Latin America and south-east Asia.“We are convinced that we know what is right and what is wrong. And we don’t make the effort, at least, to understand what are the reasons for which [other countries] think another way,” Michel said. “At the European level . . . there is a reflex which is close to a form of lecture,” he said. “We are not always very good in terms of communication, in terms of explanation, in terms of talking with them and showing a certain respect to them.”Michel spoke as two dozen leaders, including Recep Tayyip Erdoğan, the president of EU candidate and Nato member Turkey, as well as partners such as Egypt and the United Arab Emirates, joined a Brics summit hosted by Putin in Kazan, which has been pitched by the Russian president as a riposte to a western-led global ideology.“It shows something if a country like Egypt, very close to us and very close to the US from a military point of view, if a country like the Emirates, very close to us in terms of economic partnerships . . . are making the choice to be in Kazan, they want to send a message to the rest of the world,” Michel said.“One of the emirs in the Gulf countries once told me if there is a vacuum, very quickly someone will fill the vacuum. And if you are not there, others are there,” he said.Michel, who will step down on November 30 from his role, which involves chairing summits of EU leaders and representing the 27 countries internationally, said that Brussels should be proud of its record of developmental aid and upholding key values.“We are right to be active, to support a lot of countries across the world in terms of development, in terms of humanitarian aid . . . we are good in terms of mobilising means, money, providing support.”He added that many of these nations wanted to diversify their economic and security alliances, reducing dependencies on China and Russia. But the EU needed a new approach to win them over.He recalled one meeting with an unidentified African president in 2022 who said: “When you Europeans come to my country . . . you leave lessons. When the Chinese come, they leave infrastructure.”“I’m not saying that they are right or they are wrong. I’m just explaining that we are not making the effort to understand,” Michel added, saying that this approach did not help “to convince them and to influence them”.This month the EU delayed a punitive anti-deforestation law that would have banned tens of billions of euros of imports from the developing world. After complaints from countries including Brazil, Indonesia and even the US, Brussels decided to pause its introduction by a year to December 2025 to give them more time to set up systems proving their exports such as timber and palm oil did not contribute to forest loss.Michel said that the EU’s approach to enforcing its standards and regulations on trading partners, such as over fishing rules, was often “humiliating”.“We use the vocabulary: yellow card or red card,” Michel said, describing EU language on breaches of standards. “The words we use are really humiliating because we give the impression that we are a player on the pitch, and at the same time the referee.” More

Unlock the US Election Countdown newsletter for freeThe stories that matter on money and politics in the race for the White HouseThe writer is chief economist at UBS Global Wealth ManagementTraditionally, consumers’ views on the economy have been taken as a leading indicator for political trends. If consumers are happy, incumbent politicians generally do well. If consumers are unhappy, then “it’s the economy, stupid” and incumbent politicians swiftly swell the ranks of the unemployed. But in the Alice in Wonderland world of today, everything is turned upside down; politics is leading (and distorting) economics.Economic data is extremely reliant on survey evidence. Most official data is presented with authority as an absolute measurement of economic activity, but the reality is that this authority is constructed on the extremely dubious foundations of asking people how they feel. Fewer and fewer people can be persuaded to fill in any kind of survey nowadays. Falling participation rates mean that those who do answer surveys are (by definition) odd. Something peculiar has to motivate someone to fill in a survey form.One such motive is politics. Political partisanship takes people away from objectivity and into a world of fantasy. If someone is going to bother to answer a survey from political motives, they are unlikely to take the time and effort to objectively research their answers. Politically inspired survey respondents reply with their gut instincts.In the US, the Michigan consumer sentiment survey has shown a significant partisan bias. At the moment, there is a Democrat in the White House, and so Democrats will tell pollsters that all is for the best in this best of all possible worlds. Republicans, contemplating the Biden White House, tell pollsters that the economy is mired in the worst of times. Four years ago those positions were reversed. Likewise, the position four years before that was back to Democrat optimism and Republican despondency under the Obama administration. This partisanship is a relatively new thing, however. Before the Obama presidency, the evidence of political bias in survey responses was far more muted.Some content could not load. Check your internet connection or browser settings.Michigan sentiment rose higher in August and September, suggesting US households were more optimistic about the economy. However, the details showed increasing pessimism among Republicans. Only Democrats actually told pollsters that they were more optimistic. It cannot be a coincidence that Republican pessimism and resurgent Democrat optimism coincided with President Joe Biden withdrawing from the race and vice-president Kamala Harris taking the nomination. This fact alone did not alter the current economic situation, but it did change the polarised political filter through which everything in the US is viewed at present.This polarisation extends beyond the headlines of surveys. For example, Republicans are much more likely than Democrats to say they think inflation is high. Over the past three years, there have been some significant differences in regional inflation that might correlate with different political perceptions. However, regional differences have become more muted of late and do not justify the extent of the partisan perception gap. This particular political bias is all the more troubling, as US Federal Reserve chair Jay Powell has previously cited inflation expectations as a motive for policy changes.It should not be thought that this is solely a problem with consumers. Business sentiment data can just as easily be influenced by the political climate. Whenever an economist has had a bad week and is in need of some light relief, they can always turn to the US Dallas Fed manufacturing sentiment survey. The comments section of this report is often hilarious — naked partisan political views litter the remarks made by survey respondents. It is simply not plausible to expect that such bias does not extend to the supposedly objective answers in the data section of the report.In increasingly polarised societies, where world views are shaped by the partisan nature of the media we consume, survey evidence is less likely to capture economic realities. It is certainly true that in the US and elsewhere, people seem inclined to say one thing and do the reverse. The repeated pessimism in business sentiment data coincides with stable or improving business output. Consumer despondency in surveys has been accompanied by robust, rising overall spending.If political partisanship is polluting survey results, then economists and investors need to increasingly challenge the conclusions of survey-based evidence. In the absence of impartial opinions, we need to emphasise the data that is sourced from observable, objective facts. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.An Italian tomato sauce magnate has urged Brussels to protect farmers from the “unfair” competition posed by cheap paste made in China’s Xinjiang region and restore the “dignity” of Italy’s staple red fruit.Francesco Mutti, chief executive of the eponymous maker of ingredients including passata, pulp and canned tomatoes, said an EU ban or high import tariffs on the Chinese products were needed to safeguard Italian farmers. In 2021, the US banned tomato paste imports from Xinjiang citing forced labour concerns, but Brussels has not followed suit.“We should stop the import of tomato paste from China or add a 60 per cent tax on it so that its cost will not be so different from Italian [products],” Mutti told the Financial Times at the headquarters of his 125-year-old family business, which had revenues of €665mn last year.He warned that Italy’s tomato industry risked being undercut by tomato paste made by Chinese state enterprises in Xinjiang, where the UN human rights commissioner has documented widespread rights abuses against the local Muslim Uyghur minority — including forced labour. Beijing has denied the allegations.Francesco Mutti: ‘We have to protect [our farmers] from unfair competition’ More