Judgement day for Trump’s Republican Party

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0:32Good morning from the Financial Times. Today is Tuesday, November 3rd, and this is your FT News briefing. It's Judgment Day for Trump's Republican Party. And I've done it all for one very simple reason, to stop America-hating communists and jihadists from taking over the United States of America by taking over the United States Congress. And Apple's new CEO has a Judgment Day of his own. Plus, oil investors and oil executives just can't get on the same page about the U.S.-Iran war. I'm Mark Filippino, and here's the news you need to start your day.

1:19Americans will choose who should control Congress in today's U.S. midterm elections. Republicans and Democrats have been campaigning hard in the final run-up. Money out of? Money in Europe. Do you believe that you and your family should keep more of what you earn? This is the last play of the last drive, San Antonio. This is the moment we leave it all on the field. Democrats are widely expected to take control of the House of Representatives. There's a reasonable chance that they could take the Senate, too. Even President Donald Trump seems to be bracing for a Republican Party loss. Here's what he said in Washington, D.C.

1:57yesterday. Usually whoever the sitting president is, Republican or Democrat, good or bad, good president, great president, bad. For some reason, the sitting president doesn't win the midterms, but we gave this a very strong shot. But the Senate's fate comes down to just a handful of key races. And here to break those down is the FT's Washington Bureau Chief, James Politi. Hi, James. Hi, Mark. Now, there are a few Senate seats that are in play, James, but I only want to focus on the most important ones. What comes to mind? One that comes to mind is Michigan, where Democrats are desperately trying to hold on to a Senate seat in the Midwestern Rust Belt state.

2:40If they lose that seat to the Republicans, then they have to win a net five Senate races in order to win back the majority, whereas they only have to win four, which is already a tall order, if they maintain control of the Senate seat in Michigan. And in Michigan, Abdul El-Sayed, a progressive Democrat, emerged from a bitter party primary to face off against Mike Rogers, the Republican nominee who's very pro-Trump. And El-Sayed would be the first Muslim U.S. senator if he wins. But his campaign has been shaken in the last few days because Haley Stevens, his moderate Democratic opponent, has come out and endorsed Mike Rogers, the Republican candidate.

3:25I don't belong in Abdul's campaign. And that has really shaken the race. This is the conscience of the Senate right now and our Michigan moment. And I'm just letting you know where I am. triggered some outrage among the Democrats and exposed some of the ideological tensions, you know, within the Democratic Party in an otherwise kind of favorable environment for the Democrats this year. Yeah. Michigan is usually a swing state. What about a state like Texas, which is a Republican stronghold, but is in play this year? Texas is a deeply conservative state, But along with other staunchly Republican states like Iowa, Kansas, Alaska, Ohio, it is suddenly in play.

4:14There are voters there who are deeply disappointed with Trump's handling of inflation, the war with Iran. And that has allowed candidates like James Tallarico, who's the Democratic nominee for the Senate seat in Texas, to actually mount a very competitive challenge to the Republican in the race. In this case, it's Ken Paxton, who is backed by Trump. And the only choice for the proud patriots of Texas is the greatest attorney general in the history of your state, Ken Paxton. Ken, please come up, please. but quite a controversial candidate. And one of the things that people latch onto is the fact that he was indicted on fraud charges that were ultimately dismissed.

5:03And in Texas, there's another dynamic at play, which is there seems to be a very strong swing among Latino voters back to the Democrats after Trump had made some significant gains with them in 2024. And that could also be a big factor that helps the Democrats in Texas and in some other states where there's a substantial Latino population as well. James, you mentioned inflation as a key issue that's driving how people vote this year. Are there other issues that we should be considering when thinking about how voters are thinking? I mean, on foreign policy, the war with Iran has been deeply unpopular because of its effect on energy prices, gas prices.

5:47And there has also been a wider rejection of Trump's governing style. Voters are unhappy with what they see as kind of corruption in Washington at the moment and have not really bought into his vision for an imperial presidency either in terms of his attempts to kind of remake Washington in his own image and project kind of American expansionism across the Western Hemisphere. And that's a crucial dynamic in these midterm elections. James, as I mentioned earlier, Democrats are widely expected to take the House. A good shot at getting the Senate, too. Is there a possibility that this blue wave might not turn out to be what everyone's expecting?

6:34Sure. I mean, Republicans and President Trump are counting on Republicans to sort of turn out on election day and defy the polls. And the main message that has been coming from the White House and from Republicans across the campaign trail has been that, you know, the Democrats are too extreme. They're beholden to the left. They're socialists. And if that message resonates in the final 24 hours, then you'll see a much narrower victory, perhaps, by the Democrats in the House of Representatives. And it's possible that Republicans will maintain control of the Senate. And I think if that is the outcome at the end of the day, President Trump will see that as a vindication of the strategy.

7:23That's the FT's James Politi in Washington, D.C. Thanks so much, James. Thanks, Mark.

7:33Israeli Prime Minister Benjamin Netanyahu is pushing the Trump administration to restart strikes on Iran. But oil investors bet that that's not going to happen. Here to discuss is the FT's energy editor, Malcolm Moore. Hi, Malcolm. Hi there, Mark. So there have been some pretty dramatic times in the oil market lately. And yesterday, did not disappoint, Brent crude dropped about 8%. What happened there? Well, so in normal times, it would be all over the front page of the FT, it'd be on the front page of most newspapers, to be honest. And I guess what the market's reacting to is this news out of Iran that Ayatollah Khamenei has granted certain authorities to people in the negotiations to try and reach a deal.

8:17And I guess, look, we've been here before. We've seen oil move up and down on peace talks being announced and then peace talks falling apart. This is the first time that I've seen that Iran has empowered negotiators with certain authorities, whatever that might mean. It feels a little bit vague. And yet, obviously, in recent weeks, we've really seen oil prices ramp up. And I guess some people are just taking their money out of the market. You're at a conference in Abu Dhabi. What are you hearing compared to what's happening in the broader market? So I'm at ADIPEC, which is one of the biggest oil and gas conferences in the world.

8:53and the tensions here in the Middle East really scared a lot of the executives who were due to come here. The chief executive of ExxonMobil pulled out, a lot of other executives pulled out, and that's all because they thought that the war was about to restart sometime around the midterms. So the mood here is very much a sense of apprehension and concern. It's fair to say that here, there isn't a sense of optimism yet. So what does this tell you, Malcolm, this disconnect between oil executives thinking about the direction of the war and investor optimism? That's a good question. I mean, I would say just to add that it's, of course, every executive is going to run a risk assessment and is going to decide whether or not it's a risky situation based on the information they have.

9:42The situation changes rapidly, and I guess that information changes. But at the moment, you know, there's still an aircraft carrier sailing here, a U.S. aircraft carrier sailing here. There's still a lot of military movement going on. Okay, so we have this aircraft carrier, we have military movement. Do we have any sense of what investors think that the Trump administration is leaning towards? Do they think Trump will take the diplomatic route even after the midterms are over? Look, it's difficult to say. What we know is that over the weekend, there was a readout of a call between Trump and Netanyahu where Trump was like, I want to give the peace talks a chance.

10:17I think there is a timing issue here where basically, you know, they're sailing this aircraft carrier to the Gulf. It's not going to get here until mid-November. And so there's kind of a window there where they might as well talk. And then if it doesn't work, well, they've got the hardware in place. And then the second thing is, of course, you know, if Trump does have a window for action, it's going to be after the midterms and before Congress is sworn in in January. Because let's say that he doesn't do so well in the midterms, then maybe, you know, a new Congress would start to hamper him. So he has that little window.

10:52But at the moment, he also seems to be at least minded to continue talking. Malcolm Moore is our energy editor. Thanks so much, Malcolm. Thanks, Mark.

11:07More bad news for the American tech sector. This time it was Apple's turn. The iPhone maker reported earnings yesterday, and while the company forecasted better than expected sales for the critical Christmas season, it also said its margins are going to get smaller, thanks to supply chain issues and the cost of AI tools. Investors are extremely interested in how Apple will do during the holidays. Consumers have been dealing with higher prices and the rocky debut of the foldable iPhone Duo. The device saw delivery delays, and there have been reports of cracks in the screen. Yesterday's earnings were the first since John Ternus took the helm as Apple's new CEO.

11:44He's the former hardware boss and took over the top job in September.

11:52You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News briefing. Check back tomorrow for the latest news from the Financial Times.

12:36We'll see you next time. Lenders win, and so do Lindas. When you build credit scores the right way, everybody wins. Get started at VantageScore.com. The new episode of the Next 5 podcast is all about sovereignty, data, and control. Charlie Giancarlo at Everpure joins me. You always get a very embarrassed response if you ask them if they know where all their data is. As does Professor Sana Karaghani. There isn't any modern AI system that's entirely sovereign. and Claire Schramm-Fergus at Lloyds Banking Group. We really need to design for safety rather than bolting it on at the end. Listen to The Next Five wherever you get your podcasts.

13:16Enjoy.