Special Counsel Jack Smith's Final Report

Special Counsel Jack Smith released a final report detailing the evidence against President-elect Donald J. Trump, asserting that sufficient proof existed to secure a conviction in his 2020 election interference case. However, Smith dropped the case following Trump’s 2024 election victory, citing a Justice Department policy barring the prosecution of sitting presidents. The report, spanning 137 pages and focusing solely on the election interference case, criticized Trump’s alleged efforts to overturn the 2020 election, while a second volume on classified documents remains sealed by court order. Trump’s legal team dismissed the report as a political maneuver, and allies like Jeffrey Clark expressed concerns over being implicated.

Source: The New York Times

LA Fire Updates

The National Weather Service has issued its most severe fire warning, an extreme red flag alert, for Los Angeles and Ventura counties from early Tuesday through Wednesday. Wind gusts between 45 and 70 mph, combined with dry air, could lead to rapid fire spread and extreme fire behavior. Firefighters continue battling the Eaton and Palisades fires, which have burned over 37,800 acres combined and damaged thousands of structures. Despite containment progress—14% for the Palisades fire and 33% for the Eaton fire—thousands of residents remain under evacuation orders.

Source: Los Angeles Times

Biden Administration Announces Sweeping AI Export Controls

The Biden administration has unveiled robust new export controls aimed at curbing China’s advancements in artificial intelligence (AI). The policy places stringent quotas on the export of GPUs, essential for AI development, and restricts the transfer of advanced AI software to most nations, with exceptions for close U.S. allies such as Britain, Japan, and Taiwan. These measures target nations like China, Iran, and Russia while imposing intermediate controls on countries like India and Brazil.

The controls are designed to maintain U.S. leadership in AI and prevent Chinese efforts to bypass prior sanctions. Industry representatives, however, warn that the restrictions may backfire, bolstering China’s domestic chip industry while limiting international sales for U.S. firms. The policy’s implementation will include a 120-day comment period, leaving its fate in the hands of the incoming Trump administration.

Notes: China has circumvented previous U.S. export controls by acquiring chips through third countries.

Source: The Washington Post

Breakthrough in Ceasefire Negotiations Could Lead to Hostage Release and Halt Gaza Conflict

Negotiations in Doha have brought a potential breakthrough in efforts to finalize a ceasefire between Israel and Hamas. Mediators delivered a final draft agreement, which includes provisions for releasing hostages held in Gaza and a phased withdrawal of Israeli forces. U.S. President Joe Biden highlighted this deal as a significant diplomatic achievement, emphasizing its potential to bring stability and humanitarian aid to Gaza. The agreement is under a tight timeline, with January 20, 2025—the inauguration of U.S. President-elect Donald Trump—viewed as a deadline. The initial phase of the deal would secure the release of 33 hostages, with further stages addressing the release of other captives and broader territorial arrangements.

Source: Reuters

6.9-Magnitude Earthquake Strikes Southwest Japan

A 6.9-magnitude earthquake struck southwest Japan on Monday night, prompting tsunami warnings. The quake occurred at a depth of 30 kilometers at 9:19 PM local time. While there were no immediate reports of damage, residents in coastal areas were urged to evacuate, and transportation was disrupted. 

Notes: The tsunami advisory has since been lifted. 

Source: Euronews

Stock Futures Up, Key Inflation Reports, Bank Earnings

U.S. stock futures rose on Tuesday morning, with the Dow futures gaining 90 points (0.21%), S&P 500 futures rising 0.34%, and Nasdaq 100 futures advancing 0.5%. This comes ahead of key inflation data, with the Producer Price Index (PPI) set to release Tuesday morning and the Consumer Price Index (CPI) due Wednesday. Economists predict moderate wholesale inflation growth, which could influence the Federal Reserve's upcoming interest rate decisions.

The Nasdaq Composite has been under pressure, declining for four consecutive sessions as investors shift away from Big Tech to sectors like energy and health care. Banking giants such as JPMorgan and Goldman Sachs are slated to kick off the fourth-quarter earnings season this week, providing further insight into the economy's performance. Fed fund futures indicate a strong likelihood of interest rates remaining steady in the near term.

Source: CNBC