The daily business briefing: May 23, 2023
European regulators hit Meta with a record $1.3 billion fine, Biden and McCarthy finish 'productive' debt limit talks without a deal, and more
EU regulators fine Meta a record $1.3 billion
The Irish Data Protection Commission on Monday imposed a record $1.3 billion fine on Facebook-parent Meta after finding that the social media giant violated European Union privacy laws by transferring users' data from Europe to the United States. The commission ordered Meta to stop sending personal user data to the U.S. from the European Economic Area, which includes the E.U. and non-E.U. countries Iceland, Liechtenstein, and Norway. The fine is the largest the trading bloc has ever levied, surpassing an $887 million penalty a European privacy regulator demanded from Amazon, which the online retail giant said it would appeal. Meta said the decision was "flawed" and "unjustified," calling it a "dangerous precedent" that threatened many companies.
Biden, McCarthy finish 'productive' talks but don't reach debt limit deal
President Biden and House Speaker Kevin McCarthy (R-Calif.) wrapped up talks on raising the debt limit without a deal late Monday, but the two leaders said they "had a productive discussion" on a plan to avert an unprecedented, catastrophic default. "We reiterated once again that default is off the table," Biden said. Treasury Secretary Janet Yellen has warned it's "highly likely" the federal government will run short of money to pay the country's bills and default on some obligations as soon as June 1. McCarthy said he expected to speak with Biden every day until they have an agreement. Democrats have been calling for raising the borrowing cap without conditions while Republicans are demanding spending cuts as part of any deal.
Amazon workers plan 1-day HQ walkout over layoffs
Some Amazon employees in Seattle are planning a one-day walkout on May 31, a week before the company's annual shareholder meeting, to express frustration over recent layoffs at the online retail giant. One worker planning to participate told The Seattle Times organizers plan to go ahead if at least 1,000 employees at Amazon's Seattle headquarters agree to walk out. "We're really walking out to show leadership is taking us in the wrong direction," the worker, a software engineer, said. The Washington Post, which first reported the plan, said organizers sent messages via Slack and email urging employees to participate. "It's an unsettling time to work at Amazon," a Los Angeles Amazon worker told the Post.
Stock futures struggle as debt limit negotiations continue
Stock futures were little changed early Tuesday after President Biden and House Speaker Kevin McCarthy (R-Calif.) had what they described as a "productive" meeting that ended without a deal on raising the debt limit. Futures tied to the Dow Jones Industrial Average were down 0.1% at 6:45 a.m. ET. S&P 500 and Nasdaq futures were flat. U.S. stocks were mixed on Monday as Republicans and Democrats worked on a deal to raise the borrowing cap before the government runs short of money in June, raising the threat of a catastrophic default. The Dow and the tech-heavy Nasdaq ended the day down 0.4% and 0.5%, respectively. The S&P 500 was little changed.
Lowe's cuts full-year guidance
Lowe's shares fell 1% in pre-market trading on Tuesday after the home-improvement retailer lowered its full-year outlook as demand weakened after a pandemic-era boom. Lowe's said that with shoppers cutting back and lumber prices falling, it expected full-year sales between $87 billion and $89 billion, down from its previous forecast of $88 billion to $90 billion. Quarterly earnings per share came in at $3.67 adjusted, compared to the FactSet consensus estimate of $3.44. Revenue was $22.35 billion, beating expectations of $21.6 billion. "We are pleased with the performance of our business despite record lumber deflation and unfavorable spring weather," said Chief Executive Officer Marvin Ellison.