California declares state of emergency as wildfires rage

Good morning and welcome back to FirstFT. In today’s news:

• 30,000 evacuated as California declares a state of emergency

• Trump refuses to rule out seizing Greenland and the Panama Canal

• Wall Street analysts question Jane Fraser’s turnaround plan

• And today’s Big Read on robots taking jobs

Thirty thousand people have been told to evacuate their homes in Los Angeles as wildfires, whipped up by strong winds, raged across the wealthy neighbourhood of Pacific Palisades.

Thousands of acres have burnt in the hills around the Palisades, an affluent coastal community with some of the most expensive property in the US. The cause of the blaze, which started at about 10.30am yesterday, is unknown.

Winds reached up to 60mph fanning the flames and making it difficult for “super scooper” aeroplanes to dump water on the fires. The winds were expected to accelerate up to 100mph overnight, the strongest in at least a decade for southern California.

Utility companies shut off power to more than 8,000 homes to prevent live electrical wires from increasing the fire risk and the National Weather Service said a red flag warning for the area would remain in place until 6pm PST on Thursday.

Gavin Newsom, California’s governor, declared a state of emergency, as did Los Angeles mayor Karen Bass. President Joe Biden, who was in California to dedicate national monuments, promised federal aid to reimburse the state for its response to the disaster. Fire authorities warned of an “immediate threat to life”. Here’s the latest.

And here’s what else we’re keeping tabs on today:

• Fed minutes: Minutes from the Federal Open Market Committee’s December meeting will be released this afternoon, revealing policymakers’ thoughts on the outlook for interest rates. Fed governor Christopher Waller will also deliver a speech on the economic outlook at an OECD event.

• Labour market data: ADP, the private payroll processor, will release its US employment report for December, ahead of official government figures on Friday. We are also expecting data on the number of new applications for unemployment aid for the week ending January 4.

• Companies: Albertsons, which recently abandoned a proposed takeover of rival Kroger, is expected to post a rise in third-quarter revenue.

What will Donald Trump’s second term mean for America and the world? Join our experts for a special subscriber webinar to gain critical insights into the next four years of the Trump presidency. Register for free for subscribers. And submit your questions about the incoming administration for a special edition of FirstFT Americas to firstft@ft.com, including your name and location.

Five more top stories

1. Donald Trump refused to rule out using force or economic pressure to obtain Greenland, or take control of the Panama Canal, and vowed to rename the Gulf of Mexico the “Gulf of America” yesterday. And in another broadside against Canada, the president-elect said annexation of one of America’s closest allies “would really be something”. Here’s more on the freewheeling Mar-a-Lago press conference.

• Europe responds: France’s foreign minister Jean-Noël Barrot said today that the EU would not allow any country to “attack its sovereign borders”, after Trump’s comments on Greenland.

2. China’s currency weakened to a 16-month low following strong US economic data and as the potential for sharp tariff increases from the incoming Trump administration fuels growth concerns for the world’s second-largest economy.

3. Facebook owner Meta is ending its third-party fact-checking programme and will instead rely on its users to flag misinformation. “It’s time to get back to our roots around free expression on Facebook and Instagram,” Mark Zuckerberg, Meta’s chief executive and co-founder, said in a video post. The move is the latest sign of the social media giant preparing for the return of Donald Trump to the White House.

• More technology news: Anthropic, the four-year-old AI start-up, is close to securing a $2bn investment in a deal that would triple its valuation to $60bn.

• Niklas Zennström’s interview: Europe’s start-ups can still succeed in artificial intelligence despite their huge funding gap with the US, the Skype co-founder told the Financial Times.

4. Wall Street analysts are betting Citigroup will miss a closely watched measure of profitability, heaping pressure on chief executive Jane Fraser to prove that her sweeping overhaul will succeed in turning around one of America’s biggest banks. Citi shares continue to trade at a discount to rivals and one analyst said the current price suggested investors had lost faith in Fraser.

5. US stocks sold off and government bond yields jumped yesterday after strong jobs and services data prompted investors to bet the Federal Reserve would lower interest rates just once this year. One chief investment officer said investors were “slowly absorbing the fact that the economy is actually pretty strong”.

• Pharma stocks: Shares in vaccine developers, including Moderna and Novavax, jumped yesterday after the US reported its first human death from the H5 strain of bird flu.

Today’s Big Read

As more businesses experiment with robots, the backlash against automation from labour groups representing UPS drivers, Las Vegas casino workers and grocery store employees has intensified. Previously run-of-the-mill union negotiations over pay and conditions have mushroomed into larger, more existential disputes over the relationship between humans and machines.

We’re also reading . . . 

• Musk’s war on America’s allies: Is the world’s richest man speaking for Donald Trump? If he is, the west is as good as dead, says Edward Luce.

• Car software: As electric vehicles and more sophisticated systems proliferate, managing smooth updates is more important than ever, writes Brooke Masters.

• Manmohan Singh: Martin Wolf pays tribute to the former prime minister and economist who transformed India’s economy. “One of the greatest men I have known”, Martin writes.

• US stock market: Howard Marks, co-founder and co-chair of Oaktree Capital Management, assesses whether the S&P 500 is in bubble territory and the FT editorial board asks will US stocks keep rising under Trump?

Chart of the day

China’s three biggest state-owned airlines are rapidly expanding routes and capacity to Europe as their ability to fly over Russian airspace gives them a cost advantage over regional rivals. Scheduled flights from Air China, China Eastern and China Southern to the UK, Spain and Italy rose between 25 per cent and 45 per cent in the first nine months of 2024, according to aviation consultancy Ishka, compared with 2019.

Take a break from the news

Why does the universe exist? A facility in Sweden is seeking to produce the world’s most powerful source of neutrons, which may help answer that question, writes Anjana Ahuja.