Los Angeles and the rest of Southern California face a second week of fierce winds that are turning wildfires into blowtorches, putting a larger number of lives at risk and destroying more homes, businesses and landmarks. Extreme fire conditions are forecast across 2,267 square miles (5,872 square kilometers) around Los Angeles  through Tuesday as winds whip flames with tropical storm-strength gusts. An even larger area with a population of about nine million people has been deemed under critical conditions until Wednesday. And while the fires are far from done, the litigation over loss of life and untold billions of dollars in damages has begun. Edison International’s southern California utility was hit with a lawsuit blaming the energy provider’s equipment for igniting one of the still-raging wildfires. The case was brought on behalf of a group of homeowners, renters, business owners and others with property destroyed by the Eaton Fire in the Pasadena area. The suit alleges a Southern California Edison pole holding power lines was the cause of the blaze that leveled the town of Altadena. —Natasha Solo-Lyons

What You Need to Know Today

New US cases of dementia will double by 2060 from their level in 2020, according to a new study. The number of Americans diagnosed annually with the brain-impairment disorder is projected to rise to about 1 million over the next 35 years, according to research published Monday in the journal Nature Medicine. More than two of five people over age 55 are expected to develop the condition during their lifetimes.

Pershing Square Capital Management has proposed a deal to merge a newly formed subsidiary with Howard Hughes Holdings, the latest step in Bill Ackman’s pursuit of the real estate developer he used to help lead. The investment firm is offering Howard Hughes holders $85 a share, a majority of which would be paid in cash, the company said in the letter to investors posted on its website. That would represent a 38.3% premium to Howard Hughes’s stock price in August, when Pershing Square expressed interest in a tie-up.

Bill Ackman Photographer: Jeenah Moon/Bloomberg

Treasuries extended their drop after Friday’s strong employment report strengthened speculation the Federal Reserve is poised to pause its interest-rate cuts. Yields on benchmark US 10-year rose on Monday to as much as 4.8%, the highest since late 2023 and capping a more than percentage-point jump since mid-September. Meanwhile, the 30-year yield headed back toward 5% after breaching that level on Friday for the first time in more than a year.

A renewed wave of dip buying fueled a rebound in stocks, following a selloff triggered by the aforementioned recalibration of Fed wagers. Almost 380 companies in the S&P 500 rose on Monday, with the gauge wiping out a decline that approached 1% earlier in the day. Energy producers joined a rally in oil while banks climbed ahead of the start of the earnings season. That’s despite a slide that engulfed tech powerhouses like Nvidia and Apple. 

US President Joe Biden moved to discharge federal student loans for more than 150,000 people on Monday, a final push that will bring the total number of borrowers who received loan forgiveness under his administration to more than 5 million. The Education Department is canceling debt for individuals who were cheated or defrauded by their institutions, as well as public servants and people with severe disabilities. Easing the burden of student loan debt was one of Biden’s signature campaign promises in the 2020 election, but his efforts to carry out that pledge were blocked by litigation pursued by Republican-controlled states and a ruling by the US Supreme Court. The Democrat’s original plan would have slashed up to $20,000 in debt for over 40 million people.

Joe Biden delivers a speech about his foreign policy achievements at the State Department's Harry S. Truman building in Washington on Monday. Photographer: Chip Somodevilla/Getty Images

Honeywell may soon move forward with a breakup following pressure from activist Elliott Investment Management. The Charlotte, North Carolina-based industrial conglomerate is planning to split into two independent publicly traded companies, one focused on automation and the other on aerospace and defense. In December, Honeywell said it was exploring a separation of its aerospace business as part of a broader review of its operations. 

Talks between Israeli and Hamas envoys to pause the 15-month war in Gaza are making progress, with negotiations underway to release hostages in exchange for Palestinian prisoners and deliver a boost to humanitarian aid. US National Security Advisor Jake Sullivan said there’s a “distinct possibility” that Israel and Hamas will be able to reach a ceasefire deal before Biden leaves office in a week. But Israel has threatened to escalate its offensive against Hamas if there is no deal by Donald Trump’s inauguration.

A man walks through the rubble of buildings destroyed in Israeli airstrikes at the Bureij camp for Palestinian refugees in Gaza, on Jan. 12. Photographer: Eyad Baba/AFP/Getty Images

What You’ll Need to Know Tomorrow

For Your Commute

Authorities say more than 12,000 structures have been consumed by the wildfires raging across Los Angeles this week, many of them single-family homes that had stood for decades. Thousands of Angelenos are still at risk, with new evacuations following a week of destruction. But in the months and years to come, lawmakers will weigh decisions about where and what to rebuild. Some discussions will surely tackle how to rebuild as well. Architects who specialize in climate-adaptive design—informed by lessons learned from California to Australia—say protecting homes from wildfires will require a policy that accounts for design. 

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