- President Joe Biden and House Speaker Kevin McCarthy said they believe the US will not default.
- Walmart reported earnings and sales that beat Wall Street’s expectations.
- Deutsche Bank is settling a lawsuit filed by Jeffrey Epstein’s prosecutors.
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 is the key news investors need to start the trading day:
Investors liked what they heard from Wednesday’s debt ceiling negotiations in Washington (more on that below), if the day’s gains are any indication. The Dow is up over 400 points, while the Nasdaq and S&P 500 are each up more than 1%. The regional banks also experienced an upswing after months of turbulence. Markets will have a lot more to digest on Thursday thanks to Walmart’s earnings as well as various economic data including weekly jobless claims, existing home sales for April and this month’s Philly Fed manufacturing survey. Follow live market updates.
House Speaker Kevin McCarthy, R-California, delivers a press conference with House and Senate Republicans on the topic of the “debt crisis” on Wednesday, May 17, 2023 in the West Plaza of the US Capitol.
Tom Williams | Cq-roll Call, Inc. | Getty Images
At least President Joe Biden and House Speaker Kevin McCarthy agree on one thing: they believe the United States government will default on its debt. That’s what both leaders said on Wednesday, as there will only be a few weeks left before the US will run out of money to pay its bills. Negotiations between the White House and McCarthy’s camp have intensified, and they need to reach an agreement within days for Congress to pass a bill and put it on the table for Biden before a default, which economists estimate, will happen could lead to millions of dollars in job losses and a major hit to US gross domestic product.
A Walmart location in Chicago, Illinois on Wednesday, April 12, 2023.
Christopher Dilts | Bloomberg | Getty Images
Walmart raised its outlook for the year as the largest US retailer continued to benefit as consumers focus on essentials like groceries rather than items like televisions. The discounter also beat Wall Street expectations for sales and earnings, as sales rose nearly 8% in the post-holiday quarter. U.S. e-commerce sales grew 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 similar dynamics as shoppers purchase smaller package sizes of products while the pace of spending slowed during the quarter.
Artificial intelligence will soon find 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. Google’s plans are the latest moves in the tech world to harness fast-growing AI capabilities to bolster sluggish sales and tight profit margins, especially as ad spending slows.
On July 8, 2019, indictments were filed against Jeffrey Epstein in New York City. Epstein faces one count of child sex trafficking and one count of conspiracy to sex traffick a child.
Stephanie Keith | Getty Images News | Getty Images
German financial giant Deutsche Bank has agreed to pay $75 million to the victims of the late sex offender Jeffrey Epstein to settle a legal dispute, CNBC’s Eamon Javers and Dan Mangan report. The settlement comes at a time when JPMorgan Chase, the largest bank in the US, is facing a separate legal battle over its ties to Epstein, who has maintained ties with a multitude of wealthy and powerful men and institutions even after taking office, and such large ones business and philanthropic connections had been convicted of sex crimes. JPMorgan has stated that it is not liable in this case. Epstein became a Deutsche Bank client in 2013 after JPMorgan finalized 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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