WSJ What’s News – Episode: New Year’s Violence Rattles U.S. Release Date: January 2, 2025 Host: Luke Vargas

1. Escalating Violence on New Year’s Day

New Orleans Truck Attack: On New Year’s Day, New Orleans was shaken by a deadly truck attack in the French Quarter. The FBI has identified the perpetrator as 42-year-old Shamsuddin Jabbar, a Texas-born father of three with a notable corporate background, including positions at Accenture, Ernst & Young, and Deloitte. Jabbar was killed in a shootout with police after ramming a rented Ford F150 truck into a crowd, resulting in at least 15 fatalities and numerous injuries. An Islamic State flag and improvised explosive devices (IEDs) were discovered inside the vehicle, suggesting potential terrorist motives.

Legal and Investigative Insights: Louisiana Attorney General Liz Merle provided critical insights into the investigation:

• Merle [01:43]: “We do know that there is a connection between a house that was located on Mandeville street in New Orleans and where we believe that these IEDs may have been put together... there are multiple people that are involved.”

Merle indicated that multiple individuals might be responsible, with at least one confirmed deceased at the scene. Deloitte has condemned the attack and is collaborating with authorities.

Las Vegas Cybertruck Explosion: In a separate incident hours later, a Tesla Cybertruck exploded outside the Trump International Hotel in Las Vegas. The explosion resulted in one fatality and seven injuries. Although authorities consider it an isolated event, they have not dismissed the possibility of a connection to the New Orleans attack.

Sheriff Kevin McMahill’s Remarks:

• McMahill [02:57]: “We know that Elon Musk is working with President Elect Trump, and it's the Trump Tower, so there's obviously things to be concerned about there, and that's something we continue to look at.”

McMahill highlighted the potential implications given the Cybertruck’s associations with high-profile figures like Elon Musk and President Elect Trump. Tesla has stated that the explosion was unrelated to the vehicle’s design, with Musk confirming on social media that the vehicle itself was not the cause.

2. Political Turmoil: House Speaker Showdown

As Congress reconvenes, the focus shifts to the election of the House Speaker, a role that has proven contentious in recent years. Historical context includes:

• January 2023: Kevin McCarthy took four days to secure the position.
• Later in 2023: Mike Johnson also struggled, taking three weeks to win the speakership.

Current Dynamics:

• Thomas Massie’s Opposition: Kentucky Representative Thomas Massie has declared his intent to oppose Johnson’s reelection as Speaker. Given the narrow Republican majority, Massie’s stance could jeopardize Johnson’s bid, as only one additional Republican backing an alternative candidate is needed to prevent a majority.

Massie’s resistance stems from his frustration with Johnson’s reliance on Democratic support for passing legislation, placing him at odds with both his GOP colleagues and President Elect Trump, who supports Johnson’s leadership.

3. Business and Market Movements

China’s Electric Vehicle (EV) Market Surge: China’s leading EV manufacturer, BYD, reported a 41% increase in full-year sales, reaching 4.3 million vehicles. December sales set a new record, bolstered by government incentives encouraging consumers to trade in older vehicles for new electric or hybrid models. Despite strong sales, BYD’s stock experienced a decline, with analysts like Nomura suggesting that these robust figures were largely anticipated by the market.

Comparative Analysis: Investors are anticipating Tesla’s Q4 delivery figures, set to be released later, to benchmark against BYD’s performance. Additionally, overall Chinese EV stocks dipped due to broader market concerns, including a slowdown in manufacturing activity and weaker performance in chip and insurance sectors.

European Markets and Energy Concerns: European stock indexes are grappling with the halt of Russian natural gas supplies through Ukraine, following Kyiv’s refusal to renew pipeline agreements. While the immediate impact on the EU is minimal—accounting for only about 5% of total imports—the disruption is expected to significantly affect non-EU countries like Moldova.

Wall Street Trends: Contrary to the traditional Santa Claus rally—a period where stocks typically rise in the final trading days of the year—the S&P 500, Nasdaq, and Dow have been slipping. This downturn is attributed to volatility in speculative assets like Bitcoin, struggling small-cap stocks, and declines in major tech company shares.

4. Shifting Corporate Stance on China Amid Potential Trade War

Change in Tone from US Businesses: As the possibility of a second Trump presidency looms, American companies are altering their approach toward the Chinese market. Previously vocal against tariffs and seeking growth in China, businesses are now adopting a more cautious stance.

Case Studies:

• Starbucks:

  • Stu Wu [07:38]: “Starbucks is a fascinating example... the new CEO of Starbucks says, hey, this is a tough market, we're going to have to look at some partnerships. It's going to be tough to figure out what they do going forward.”

  Once optimistic about China as a major market, Starbucks is reevaluating its strategy due to economic slowdowns and increased competition from local brands like Luckin Coffee.

• General Motors (GM):

  • Stu Wu [08:36]: “Two big reasons why these Chinese companies are doing so well... direct subsidies by the Chinese government... incentives for people to buy Chinese cars.”

  GM is reconsidering joint ventures with Chinese automakers as Chinese competition intensifies, supported by substantial government subsidies and consumer incentives favoring domestic brands.

Policy and Supply Chain Adjustments: US export controls are increasingly restrictive, limiting the transfer of strategic technologies to China. Politicians are encouraging companies to invest domestically rather than in China, leading to a strategic shift in supply chain management:

• Supply Chain Diversification: Companies are maintaining existing Chinese manufacturing bases while exploring new locations in Asia less impacted by US-imposed tariffs.

Lobbying and Future Implications:

• Stu Wu [10:35]: “Apple was a great example of how lobbying could work... Apple got some exemptions to tariffs. So we'll see.”

While direct lobbying has decreased compared to the Trump administration’s first term, companies like Apple have successfully negotiated exemptions, indicating that lobbying efforts, though quieter, remain influential.

Conclusion

The episode of "What’s News" delivered a comprehensive overview of significant events impacting the United States and global markets. From the tragic New Year’s Day attacks and ensuing investigations to intricate political battles within Congress, the coverage underscored the complexity of current affairs. In the business realm, the shifting dynamics between US companies and the Chinese market reflect broader geopolitical tensions and economic strategies. As the New Year unfolds, these developments are poised to shape the socio-political and economic landscape significantly.

Produced by Daniel Bach with supervising producer Christina Rocca. For more updates, tune in to the next episode of "What’s News."