US army in $150bn revamp talks

Good morning and welcome back. In today’s newsletter:

• US army in talks with private equity for overhaul

• Brazil’s corporate credit market under pressure

• How the manosphere is changing

• And how safe is melatonin?

The US army has asked private equity groups including Apollo, Carlyle, KKR and Cerberus to pitch “meaty” strategic projects to help the service fund a $150bn infrastructure overhaul.

What we know: US army secretary Daniel Driscoll and Treasury secretary Scott Bessent held a forum with about 15 of Wall Street’s best-known buyout firms yesterday to discuss deals. Driscoll, the service’s top civilian official and a former investment banker, said he asked the groups to draw up “unique financing models” to help meet the army’s infrastructure needs.

Why it matters: The proposals mark the latest example of the Trump administration’s efforts to work with the $13tn private capital industry and enlist some of Wall Street’s biggest investors in US national security. The projects expected to get backing include data centres and rare processing facilities. Read more for details of the discussions.

• More military news: Donald Trump offered his first public backing for Aukus — the US, UK and Australia military alliance signed by Joe Biden — after a meeting with Anthony Albanese.

Here’s what else we’re keeping tabs on today:

• Results: 3M, Capital One, Coca-Cola, General Motors, Halliburton, Lockheed Martin, GE Aerospace, Nasdaq, Northrop Grumman, Philip Morris, Mattel and Netflix report results as earnings season for non-financial companies kicks into gear.

• Economic data: Mexico’s national statistics agency publishes its preliminary economic growth figures for September. Argentina publishes its trade balance for last month and Colombia’s trade and imports data for the month of August is also scheduled for release.

• Fed speakers: Board governor Christopher Waller speaks at an event in Washington.

• Israel: Vice-president JD Vance will arrive in Israel a day after US envoys Steve Witkoff and Trump’s son-in-law Jared Kushner held talks with Prime Minister Benjamin Netanyahu.

Five more top stories

1. Japan’s parliament has elected Sanae Takaichi as the country’s first female prime minister. Investors welcomed the vote, sending stocks in Tokyo to a record high as they anticipated increased spending on defence, potential tax cuts and a push to restart Japan’s nuclear power plants. Read more on a historic day in Tokyo.

2. Unilever said it had been forced to delay the spin-off of its €15bn ice cream division by the US government shutdown. Unilever is hiving off the division, called The Magnum Ice Cream Company, ahead of a turnaround that will see it pivot towards beauty and personal care. The new business was due to list in Amsterdam on November 10, with secondary listings in London and New York.

3. Ukraine and its European allies have called for negotiations to end the war with Russia to be based on the “current line of contact”, rather than Kyiv ceding any further territory to Moscow. The Financial Times reported at the weekend that at a volatile meeting late last week Donald Trump urged Volodymyr Zelenskyy to surrender the entire Donbas region to Vladimir Putin. Read more on this developing story.

4. The Argentine peso has fallen below the level it reached before the US Treasury began purchases earlier this month, in a sign the Trump administration’s financial support is failing to halt the currency’s slide and sure up support for libertarian President Javier Milei ahead of crucial elections. Concern is growing that Milei may have to devalue the peso.

5. Leading US universities are bracing for deep spending cuts to offset an upcoming increase in the endowment excise tax despite posting double-digit investment returns this year. The spending cuts follow Congress’s passage in July of the “One Big Beautiful Bill”, which raised the excise tax on endowment income from the flat 1.4 per cent to a tiered system with rates of 4 per cent and 8 per cent.

The Big Read

German Chancellor Friedrich Merz campaigned on a promise of reform. But he now faces a stagnating economy and a sceptical public, as well as a far-right party, Alternative for Germany, that is gaining momentum. Read how the pressure is rising for Merz to deliver.

We’re also reading . . . 

• US-China relations: When Trump began his trade war with China, his working assumption was that the US had all the leverage. The rare earths spat has changed that.

• FT View: American CEOs would be wise to avoid staking too much on Donald Trump’s industrial strategy — it may change.

• The manosphere: Once the sole purview of misogynists and trolls, a new type of business influencer has appeared on websites, accounts and online forums aimed at young men, writes Josh Gabert-Doyonb.

• Pocket problem: Sarah O’Connor prefers a smaller mobile phone. But capitalism is not giving her what she wants. Are manufacturers the ones to blame?

Join Sarah and John Burn-Murdoch for a live Ask an Expert Q&A on Thursday as they tackle your questions on how AI is reshaping the world of work. The conversation coincides with the launch of ‘The AI Shift’, their new newsletter, which you can sign up to here.

Chart of the day

A series of blow-ups in Brazil’s corporate bond market has pushed up dollar borrowing costs across Latin America’s biggest economy. Bonds issued by waste manager Ambipar, petrochemicals behemoth Braskem and biofuels maker Raízen have slumped in price over the past month, sending a chill through Brazil’s corporate credit market.

Take a break from the news . . . 

How safe is melatonin? Experts weigh up the pros and cons of taking the world’s favourite sleep aid.