Israel Carries Out Raids Into Lebanon Ahead of Possible Ground Incursion
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Israel prepares for a possible ground incursion into southern Lebanon. Plus, Hurricane Helene leaves a trail of destruction across the southeast. And why Americans' reliance on government spending stands to play a deciding role in November. Much of Pennsylvania, northern Michigan, northern Wisconsin, big parts of southern Georgia are heavily reliant on this

These are the voters that the presidential candidates need to reach most in order to win the election. It's Monday, September 30th. I'm Kate Bullivan for The Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

We begin today in the Middle East, where we are just learning that Israel's special forces have been carrying out targeted raids into southern Lebanon for weeks, aiming to gather intelligence and assess Hezbollah's capabilities. Journal foreign correspondent Stephen Kalin reports a possible ground incursion could come as soon as this week. The Israeli military has been signaling for the last...

couple of days that it's preparing for a potential ground operation inside of Lebanon. Of course, the timing of these sorts of actions could change, but we're sort of getting a sense of growing momentum in that direction. Stephen, this comes as Israel just this weekend killed Hezbollah's long-term leader, Hassan Nasrullah, in an airstrike in Beirut. Where does that leave the group and what does it tell us about what could happen next?

The killing of the group's leader is quite a dramatic step. And to this point, there hasn't really been a dramatic response. So the group is in disarray, trying to reorganize themselves. The deputy secretary general is expected to speak today. That might give us an indication of what the group is thinking, where they're heading. And so there's the possibility that they respond. There's the possibility that Iran responds directly in some way.

They so far have been trying to avoid a direct confrontation, but we really don't know at what point sort of that tripwire might be crossed by Israel and a larger response could be triggered.

Over the weekend, Israel also struck targets in Yemen in response to the Houthi rebel group launching two ballistic missiles aimed at Tel Aviv in recent days. It also continued its air campaign against Hezbollah in Lebanon, where authorities say Israeli strikes have killed more than 1,000 people since mid-September.

In the US, North Carolina, Georgia, South Carolina, Florida and Virginia are reeling in the aftermath of Hurricane Helene, with the death toll climbing to more than 90 across the five states over the weekend.

Federal and state officials rushed to airlift supplies to battered mountain communities in western North Carolina, where the storm left behind damaged water systems, washed out roads and downed power lines. Many of the highways in the region remain closed, hindering search and rescue efforts and the flow of desperately needed water, gas and food.

And in California, Governor Gavin Newsom has vetoed a controversial artificial intelligence safety bill that would have laid the groundwork for how AI is regulated across the US. The Democrat said he decided to reject it because it applies only to the biggest and most expensive AI models and doesn't take into account whether they are deployed in high-risk situations.

He's said he's working with AI researchers to develop legislation he is willing to support. Google, Meta, Microsoft and OpenAI had opposed the measure, saying it would have imposed vague standards in the name of safety. Many smaller companies were also against it, arguing the legislation would chill innovation in the sector, though ex-AI founder Elon Musk tweeted in August that he thought California should probably pass it.

In other politics news, Japan looks headed for a snap election.

Shigeru Ishiba, who was tapped to become the country's next leader last week, has just said that he plans to call an election on October 27th. His ruling Liberal Democratic Party is generally expected to retain its majority, allowing him to stay on as prime minister. The news came as Japanese stocks headed for a sharply lower close on concern that Ishiba's policies wouldn't be market-friendly.

Meanwhile in Austria, the far-right Freedom Party has finished first in the country's general election, in the latest sign of anti-immigrant and populist parties gaining support across Europe. It's unlikely to form a government, however, as its rivals have refused to enter into a coalition with it.

And back in the US, Americans' reliance on government support is soaring and could prove a deciding factor in the presidential election. That's according to a new analysis by the bipartisan think tank Economic Innovation Group, which has found that more than 53% of American counties draw at least a quarter of their income from government aid, up from just 1% in 1970.

Many of those communities that rely heavily on programmes such as Social Security, Medicare and Medicaid lean Republican and are concentrated in battleground states. Journal politics editor Aaron Zittner has more. We have a campaign in which neither Kamala Harris, the vice president, or former President Donald Trump are talking about austerity. Donald Trump would stop taxation of Social Security benefits.

Kamala Harris has a number of efforts that she has proposed that would expand safety net programs, including things like expanding the subsidies under the Affordable Care Act. And when you see the maps of how much of America relies on federal safety net money, it makes sense.

Much of Pennsylvania, northern Michigan, northern Wisconsin, big parts of southern Georgia are heavily reliant on this money. These are the voters that the presidential candidates need to reach most in order to win the election. And they are very invested in receiving federal safety net money.

Well, while austerity isn't getting much airtime this campaign season, the fact Americans are having fewer babies is, with politicians and policymakers taking up the issue.

And we want to know what questions you have about America's falling birth rate and what it means for politics and the economy. Send us a voice memo to WNPOD at WSJ.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show.

Coming up, while most insurance companies are cutting back on fossil fuel investments, we'll look at two players who are redoubling those bets. That's after the break.

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Two huge players in the insurance industry are creating a deep divide in the sector over their investments in fossil fuels. While most insurance companies have significantly cut their exposure to fossil fuel investments, State Farm and Berkshire Hathaway have made multi-billion dollar bets on major oil companies such as Chevron and ExxonMobil.

That is according to analysis carried out by journal reporters Shane Shifflett and Gene Eaglesham. And Shane joins me now. Shane, first off, tell us a little bit more about the analysis you carried out and what it was that you discovered. So we wanted to understand what insurance companies, specifically property and casualty insurers, fossil fuel holdings look like. And part of the big reason for that is property and casualty insurers, they insure your cars...

They insure your homes. When a natural disaster strikes, they have to pay out claims for those. So fossil fuel producers, they are helping to fuel climate change, which makes climate-related disasters more expensive and more frequent.

And so what we found is that there was a big increase in what insurers said they spent on fossil fuel related securities, a $27 billion increase over the last decade, basically between 2014 and 2023.

And we found that really it was two big insurers that were driving those increases that we saw at the start of this process, which was State Farm and Berkshire Hathaway. Why are they still making big bets on fossil fuels? It sounds like a contradiction to continue to support an industry that's also going to hurt the other side of their business.

Yeah, well, neither company would comment for us, but there's a couple things I can share. Berkshire, they bought billions of dollars worth of Occidental Petroleum securities. Those purchases drove about 85% of the industry's overall increase in fossil fuel holdings.

Berkshire's chief executive, Warren Buffett, he praised that oil and gas giant, saying it was helping the nation achieve energy self-sufficiency. But there's a broader reason that I pointed out earlier that insurers will invest in securities like these. They have to pay claims eventually. And so they have to make smart choices about what securities they buy that will appreciate. So when there is a disaster, they can sell them and then pay those claims.

Right. And what about State Farm? You have reported that they've poured more money into shares and bonds of companies like Exxon, Chevron and Diamondback, even as their business has taken a hit from climate related effects.

Yeah, I mean, you can look at California, right, that's had massive wildfires in the last year that have destroyed thousands of properties and resulted in billions of dollars in damages. State farms actually decided to pull out of that market, and they've aggressively raised their rates after big losses. They're continuing to invest heavily in fossil fuel-related securities, but they have acknowledged that climate change does impact their business. Shane G.

You mentioned that these two insurers are sort of outliers in the industry. So what is everyone else doing? More than half of insurers with fossil fuel related securities in 2014 basically reduced the share of those holdings overall. And one of those insurance companies was AXA. It's a French insurer. They cut their investments in oil and gas and coal stocks

and bonds from 6% in 2014 to less than a percent last year. Their company's chief executive said that higher claims caused by fossil fuel outweighed any financial benefit from investing in them. And he said every insurer should look at this. And there are many insurance companies out there that have policies now that say they're trying to transition to a net zero economy and they're placing limits on how much they will invest in fossil fuel companies and the kinds of companies that they'll invest in.

That was journal reporter Shane Shifflett. Shane, thanks so much for your time. Thank you very much. And finally, let's take a quick look at what's happening in markets. Chinese stocks have extended their run-up with the Shanghai composite rising around 8%. That's after Beijing said over the weekend that it would allow homebuyers to refinance their mortgages, the latest in a week-long torrent of policies to jolt the economy.

Back in the US, stock futures a little changed ahead of the last trading session of the quarter. And that's it for What's News for Monday morning. Today's show was produced by Daniel Bach with supervising producer Christina Rocker. And I'm Kate Bullivant for The Wall Street Journal, filling in for Luke Vargas. We'll be back tonight with a new show. Until then, thanks for listening.

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