Twin scandals hit PwC’s Asia profits

Good morning. In today’s news:

• The Trump campaign tries to stem the fallout from the Madison Square Garden rally

• China’s Luckin Coffee plans US expansion

• How Evan Spiegel is battling to revive social media company Snap

But first, PwC has reported slowing annual revenue growth due to twin scandals in Asia and a slowdown in the consultancy market.

The consultancy firm was accused of fraud by Chinese regulators after the collapse of property developer Evergrande and last month PwC China had its licence to operate in the country suspended for six months.

In Australia, the firm has been in the middle of a political furore after a partner in its tax practice was found to have used confidential information from his work with the government to help colleagues woo multinational technology companies.

Revenue in Asia-Pacific, the smallest of the firm’s regions, fell from $10bn in the 2023 fiscal year to $9.3bn, down 5.6 per cent in local currencies.

The firm singled out strong growth in the Middle East, Sweden, and France. Emea profit growth was 3.4 per cent.

Despite the challenges in Asia, PwC achieved global revenue growth a little higher than Deloitte’s 3.1 per cent and a little behind EY’s 3.9 per cent. Read more on the results.

Here’s what else I’m keeping tabs on today:

• Results: Google parent Alphabet will kick off this week’s Big Tech earnings. McDonald’s reports a week after an E. coli outbreak at its restaurants across the Midwest and southwestern US. Pfizer, which is the subject of a campaign from activist investor Starboard, also reports earnings.

• Economic data: The Conference Board updates its index tracking US consumer confidence with October data. The Case-Shiller 20-City Composite index is updated for the month of August and government data on job openings for September are also released.

• Campaign trail: Vice-president Kamala Harris will make her “closing argument” at the Ellipse in Washington. Donald Trump will speak to the press in Palm Beach, Florida, and host a rally in the swing state of Pennsylvania.

Five more top stories

1. Donald Trump and his allies were hurrying last night to stem the fallout from a campaign rally at New York’s Madison Square Garden where one speaker called Puerto Rico a “floating island of garbage” and another likened Kamala Harris to a prostitute with “pimp handlers”. Read more on the Trump campaign’s response to a series of racist, misogynistic, and vulgar comments by warm-up acts.

• More election news: Jeff Bezos has sought to tamp down controversy over his ownership of the Washington Post in a newspaper editorial. His intervention, which led to the Post not endorsing any US presidential candidate, sparked criticism from Post staff past and present.

• Elon Musk: Philadelphia’s district attorney has sued the Tesla CEO and his political action committee, alleging that a $1mn daily giveaway to registered voters in swing states who sign a petition amounted to an “illegal lottery scheme”.

• Have your say: With one week to go, who do you think will win the election? Vote in our latest poll.

2. China’s largest coffee chain, Luckin Coffee, is planning to enter the US market and undercut rivals including Starbucks with its low-priced drinks. The US expansion follows a 2020 fraud scandal that resulted in Luckin’s Nasdaq delisting, a $180mn fine, and a wave of investor lawsuits. Read more on Luckin’s US launch plan and turnaround.

3. Saudi Arabia’s sovereign wealth fund plans to scale back the share of its international investments by about a third, drawing a line under the past decade’s multibillion-dollar global spending spree as it refocuses on the domestic economy. Yasir al-Rumayyan, governor of the Public Investment Fund, confirmed the pullback at a conference in Riyadh today.

4. Israel’s parliament approved two pieces of legislation yesterday that banned the UN agency for Palestinian refugees from operating within Israeli territory and cut diplomatic ties with the organisation. The measures, which threaten the UNRWA’s ability to provide food, medicine, and shelter to nearly 2mn Gazans displaced by war, have raised concerns among Israel’s closest allies.

5. Microsoft has accused Google of running “shadow campaigns” seeking to undermine its position with regulators and politicians, the latest example of the escalating competition between the tech giants in cloud computing and data centers. The allegations come at a sensitive time for Google with the US Department of Justice debating whether to demand a break-up of its monopolistic search business.

Today’s big read

Kevin Roberts, president of the Heritage Foundation think-tank and architect of its controversial Project 2025 policy manifesto, told the FT earlier this year he was confident Donald Trump would “usher in the most glorious golden age of conservative reform since Ronald Reagan”. But as the race enters its final stages Roberts, Project 2025 and Heritage itself have been frozen out — temporarily, at least — from the Trump orbit. Here’s what happened.

We’re also reading . . .

• US foreign policy: America needs a new approach focused on breaking up concentrated global economic power, writes Chris Murphy, junior senator for Connecticut.

• Snap: Evan Spiegel is battling to revive the social media company’s fortunes as ambitions are hit by the growing strength of arch-rival Meta.

• Auto industry: The once-lucrative Chinese market is now highly competitive and the country is exporting more electric vehicles, leaving the European car industry in crisis.

• Ukraine’s future: Germany will play a pivotal role in the debate over Kyiv’s Nato membership and a negotiated ceasefire, writes Constanze Stelzenmüller of the Brookings Institution.

Chart of the day

Spain is set to surpass the US to become the world’s fastest-growing major advanced economy this year, fueled by a combination of immigration, tourism, foreign investment, and public spending. Figures out this week are expected to confirm the Spanish economy is on course to grow nearly 3 per cent this year.

Take a break from the news

Jean Tinguely is viewed as a pioneer of kinetic art. With the centenary of the latter-day Dadaist’s birth just months away, the Pirelli HangarBicocca museum in Milan has kicked off celebrations early with a retrospective that highlights the radical nature of his work and his connections with the Italian city.