- President Joe Biden and House Speaker Kevin McCarthy said they think the U.S. will not default.
- Walmart reported earnings and revenue that topped Wall Street’s expectations.
- Deutsche Bank settles a lawsuit brought by accusers of Jeffrey Epstein.
Traders work on the floor of the New York Stock Exchange during morning trading on May 17, 2023 in New York City.
Michael M. Santiago | Getty Images
Here are the most important news items that investors need to start their trading day:
Investors liked what they heard coming out of debt ceiling negotiations in Washington on Wednesday (more below), if the day’s stock market gains are any indication. The Dow surged over 400 points, while the Nasdaq and the S&P 500 each jumped more than 1%. Regional banks also popped after what’s now months of turmoil. On Thursday, markets will have plenty more to digest, courtesy of Walmart’s earnings, as well as several economic data points, including weekly jobless claims, existing home sales for April and the Philly Fed’s manufacturing survey for this month. Follow live market updates.
Speaker of the House Kevin McCarthy, R-Calif., conducts a news conference with house and senate Republicans on the “debt crisis,” on the west plaza of the U.S. Capitol on Wednesday, May 17, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
At least President Joe Biden and House Speaker Kevin McCarthy agree on one thing: They think the United States government won’t default on its debt. Both leaders said as much Wednesday, with just a few weeks to go before the U.S. is set to run out of cash to pay its bills. Negotiations between the White House and McCarthy’s camp have intensified, and they will need to produce some kind of deal within days in order for Congress to pass a bill and get it to Biden’s desk ahead of a default, which economists estimate could result in millions of jobs lost and a big hit to the U.S. gross domestic product.
A Walmart location in Chicago, Illinois, on Wednesday, April 12, 2023.
Christopher Dilts | Bloomberg | Getty Images
Walmart boosted its outlook for the year as the largest U.S. retailer continued to benefit from consumers’ focus on necessities like groceries over items like televisions. The discounter also beat Wall Street’s expectations on the top and bottom lines, as revenue jumped nearly 8% for the post-holiday quarter. E-commerce sales in the U.S. jumped 27%. The results came after fellow retail giants Target and Home Depot warned that customers are spending less on expensive and discretionary items and focusing more on essentials. Walmart said it’s experiencing a similar dynamic as shoppers are buying smaller pack sizes for products, while the pace of spending slowed down as the quarter wore on.
Artificial intelligence will soon make its way into Google advertising and YouTube content. The Alphabet-owned tech giant has approved the use of generative AI to automate ads and ad-supported services, CNBC’s Jennifer Elias reports, citing internal documents. Google is also testing a large language model called PaLM 2 to help create youth content for YouTube. The Google plans are the latest moves in the tech world to capitalize on rapidly expanding AI capabilities to bolster stagnant revenues and crunched profit margins, particularly as ad spending slows down.
Charges against Jeffrey Epstein were announced on July 8, 2019 in New York City. Epstein will be charged with one count of sex trafficking of minors and one count of conspiracy to engage in sex trafficking of minors.
Stephanie Keith | Getty Images News | Getty Images
German financial giant Deutsche Bank has agreed to pay $75 million to victims of late sexual predator Jeffrey Epstein to settle a lawsuit, CNBC’s Eamon Javers and Dan Mangan report. The settlement comes as JPMorgan Chase, the largest bank in the U.S., faces separate litigation over its links to Epstein, who had cultivated relationships with a variety of rich and powerful men and institutions, facilitating big-money deals and philanthropic connections, even after he had been convicted of sex crimes. JPMorgan has said it isn’t liable in the case. Epstein became a customer of Deutsche Bank in 2013, after JPMorgan concluded its banking relationship with him.
– CNBC’s Hakyung Kim, Emma Kinery, Christina Wilkie, Melissa Repko, Jennifer Elias, Dan Mangan and Eamon Javers contributed to this report.
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