US ECONOMY & POLITICS

Congressional Negotiators Reach Agreement on $1.6 Trillion Government Spending Level for 2024 – Wall Street Journal, 1/8/2024

• Congressional leaders reached a bipartisan deal on Sunday setting a roughly $1.6 trillion federal spending level for the year. Still, the pact drew quick criticism from some conservatives, and it remained unclear whether lawmakers could pass legislation to avert a government shutdown quickly.
• The House and Senate now have less than two weeks to craft underlying bills funding the government, with several federal agencies set to run out of money later this month and the rest to follow in February, a tall order in a Congress that has struggled to pass significant legislation on time.
• The deal leaves some key battles unresolved. It could open up more friction between House Speaker Mike Johnson (R., La.) and his conservative flank, which has outsized power because of Republicans’ narrow majority and has repeatedly derailed bills in the chamber.
• Among other things, some House Republicans plan to fight for so-called policy riders, which can be used to advance conservative social policies and which Senate Democratic leaders have called nonstarters.
• Johnson said the deal contains “hard-fought concessions” from Democrats, including canceling unspent pandemic aid.
• “These final spending levels will not satisfy everyone, and they do not cut as much spending as many of us would like,” Johnson said.

Defense Secretary Lloyd Austin’s Hospitalization Deepens Mystery of His Absence – Wall Street Journal, 1/8/2024

• The Pentagon’s No. 2 official didn’t learn that her boss was hospitalized on January 1 until four days after she had assumed some of his duties, US military officials said Sunday, deepening the mystery of why Defense Secretary Lloyd Austin was hospitalized and why he hid his medical situation from senior defense officials and even President Biden until days after he was admitted.
• Deputy Secretary of Defense Kathy Hicks, who was on scheduled leave in Puerto Rico, had already assumed some of Austin’s duties that week, which happens from time to time, Pentagon officials said.
• Hicks had secure communications at her location while on vacation, as is routine.
• But she wasn’t informed of the gravity of Austin’s hospitalization, which included some time in the intensive care unit of Walter Reed National Military Medical Center in Washington, until Thursday.
• Austin, who resumed his responsibilities as defense secretary Friday night, remained hospitalized Sunday.
• He had had what officials described as an elective procedure during scheduled leave on December 22, returning home the next day, Pentagon officials said, without disclosing what the treatment was, citing privacy reasons.

Winter Storm Dumps Snow and Rain on Northeast – Wall Street Journal, 1/8/2024

• A wintry mix of snow and sleet made for a miserable weekend across much of the Northeast, and a second storm moving coast to coast could bring blizzard conditions to the Plains and Midwest and potential flooding to the Northeast early this week.
• The worst weekend storm was over for much of the Northeast by Sunday, except in southern New England, where snow was expected to continue until evening, according to the National Oceanic and Atmospheric Administration’s Weather Prediction Center.
• Southern New England along the New Hampshire border with Massachusetts got some of the most concentrated snowfall, ranging from 15 to 17 inches, the weather prediction center said.
• A second winter storm dumped over a foot of snow in northern California on Saturday night and moved over Arizona, Utah, and New Mexico Sunday, the center said.
• Flagstaff, Ariz., recorded 8 inches of snow by midafternoon.

Vulcan Rocket Launches, Kicking Off First U.S. Moon Race in Decades – Wall Street Journal, 1/8/2024

• A powerful new rocket from United Launch Alliance blasted off Monday, taking a vehicle expected to make the first US lunar landing in more than half a century.
• The Vulcan Centaur rocket, which took to the skies from Florida’s Cape Canaveral Space Force Station at 2:18 a.m. local time, included the Peregrine Lunar Lander vehicle, which, if successful, would carry out the first lunar exploration since the final Apollo mission in 1972.
• The uncrewed lunar landing is expected to take place next month.
• ULA, a joint venture between Boeing and Lockheed Martin, will now look to accelerate its launches for customers ranging from Amazon.com to spy agencies.
• Pittsburgh-based Astrobotic Technology developed the lunar lander on the ULA flight and carries several NASA instruments, including one designed to measure radiation risk for future astronauts.

EUROPE & WORLD

Deep Oil Price Cut by Saudis Highlights Soft Physical Market – Bloomberg, 1/8/2024

• A substantial cut in official oil pricing to Asia by OPEC+ leader Saudi Arabia has reinforced signs of a softer physical market in the critical region.
• Saudi Aramco cut the official selling price for its flagship Arab Light crude to a $1.50-a-barrel premium to the regional benchmark for February, the lowest level since November 2021.
• The $2-a-barrel reduction was more profound than had been foreseen and followed a weakening of spot differentials for Middle Eastern crudes due to lackluster Chinese appetite and increased global supplies.
• Saudi pricing has been lowered in line with the spot market, which may potentially boost margins for customers using the kingdom’s cargoes as their baseload, refiners, and traders.
• Aramco’s pricing is typically followed by other major producers in the Middle East, such as Kuwait and Iraq.
• Still, at least three Asian customers said the price drop was unlikely to lead to requests for incremental deliveries from the Saudis as cheaper, rival supplies are still available in the spot market.

Biden Urged to Curb China’s Dominance of Older-Generation Chips – Wall Street Journal, 1/8/2024

• The Biden administration needs to take more decisive action to stem China’s growing dominance in making older-generation microchips that are essential across several US industries, according to the bipartisan leaders of a House of Representatives panel.
• The lawmakers’ call for new efforts, including potential tariffs, is intended to counteract an overreliance on China for less-advanced chips, according to a letter seen by The Wall Street Journal.
• Republican Mike Gallagher of Wisconsin, chairman of the House Select Committee on the Chinese Communist Party, and Raja Krishnamoorthi of Illinois, ranking Democratic member, wrote to President Biden’s top business and trade officials on Friday.
• In their letter, the representatives suggested China could become a dominant supplier of essential technology and then use that position to punish foreign competitors.

Shell Flags Earnings Hit of Up to $4.5 Billion From Impairments – Wall Street Journal, 1/8/2024

• Shell said its fourth-quarter earnings took a hit of between $2.5 billion and $4.5 billion in impairments offset by significantly higher gas trading, while its overall production volumes are on track to meet targets.
• The London-based energy giant said Monday that the impairments were primarily driven by macro developments and portfolio choices, including its Singapore chemicals and products assets, which it has been trying to sell.
• The FTSE 100 leader by market cap also said it expects its cash flow from operations to be hit by a $900 million charge from emissions permits in Germany and the US.
• Gains from integrated gas trading are expected to be significantly higher on-quarter despite declining oil and gas prices. Oil hits a five-month low in early December, reflecting supply and demand concerns despite support from geopolitical uncertainty.

Israeli Airstrike Kills Senior Hezbollah Commander In Lebanon, Official Says – Bloomberg, 1/8/2024

• An Israeli airstrike killed an elite Hezbollah commander in southern Lebanon on Monday, the latest in an escalating exchange of strikes along the border that have raised fears of another Mideast war even as the fighting in Gaza exacts a mounting toll on civilians.
• The strike on an SUV killed a commander in a secretive Hezbollah force that operates along the border, according to a Lebanese security official, who spoke on condition of anonymity according to regulations.
• Hezbollah identified the slain fighter as Wissam al-Tawil without providing details.
• He is the most senior militant in the armed group to have been killed since Hamas’ October 7 attack into southern Israel triggered all-out war in Gaza and lower-intensity fighting between Israel and Hezbollah, which has escalated since an Israeli strike killed a senior Hamas leader in Beirut last week.

Nord Stream Probe Hampered by Resistance From Poland – Wall Street Journal, 1/8/2024

• Polish officials have resisted cooperating with an international probe into sabotaging the Nord Stream natural gas pipelines and failed to disclose potentially crucial evidence, according to European investigators working on the case.
• Those Polish officials have been slow to provide information and withheld vital evidence about the alleged saboteurs’ movements on Polish soil, investigators said.
• They hope the new government in Warsaw, which took office in December, will help shed light on the attack.
• European investigators have long believed the attack was launched from Ukraine via Poland.
• But they say Warsaw’s failure to cooperate fully has made it hard to establish whether the attack happened with or without the former Polish government’s knowledge, according to senior officials.

China Says It Has Detained a British Spy – Wall Street Journal, 1/8/2024

• China has taken into custody an alleged British spy, the country’s national security agency said Monday, as Beijing steps up warnings over national security and the infiltration of foreign spies in the country.
• In a social-media post, China’s Ministry of State Security alleged that MI6, the UK intelligence service, 2015 recruited a foreign national surnamed Huang and provided training and “specialized spy equipment for intelligence liaisons.”
• According to the MSS, the British instructed Huang to enter China as a representative of a consulting agency and send back intelligence.
• The Chinese agency didn’t specify Huang’s nationality or name the consulting firm.

Factmonster – TODAY in HISTORY

• The Battle of New Orleans, the last battle in the War of 1812, was fought. – 1815
• Woodrow Wilson outlined his Fourteen Points peace program. – 1918
• Bobby Fischer won the United States Chess Championship for the first time at age 14. – 1958
• Charles de Gaulle became the first president of France’s Fifth Republic. – 1959
• President Lyndon Johnson announced his War on Poverty. – 1964
• The AT&T Bell System telephone monopoly agreed to divest itself of 22 Bell System companies and split itself into seven “Baby Bells.” – 1982
• The mastermind of the 1993 World Trade Center bombing, Ramzi Yousef, was sentenced to life in prison. – 1998
• Arizona Representative Gabrielle Giffords is among 17 shot by a gunman at a meeting outside a grocery store. Six people were fatally wounded, including United States District Court Judge John Roll and a young girl. Police identify the gunman as Jared Lee Loughner. – 2011