European Midday Briefing: Solid Earnings, U.K. -2-

Russian state TV journalists and Ukrainian troops said Ukraine had seized back more ground in Bakhmut, which has been contested by both sides for months, as part of an offensive to push back Russian forces holding all but the westernmost districts of the city.

GLOBAL NEWS

White House Debt-Ceiling Meeting Postponed

WASHINGTON-A highly anticipated meeting scheduled for Friday between President Biden and congressional leaders to chart a path forward on lifting the debt ceiling was postponed until next week, officials said.

The delay will give White House and congressional staff more time to make progress in their closed-door spending talks, the officials said, adding that Senate Minority Leader Mitch McConnell (R., Ky.) was unable to attend the Friday meeting because of a scheduling conflict.

U.S., China Senior Officials Meet in Tentative Effort to Restart Ties

WASHINGTON-National security adviser Jake Sullivan held previously unannounced talks with his Chinese counterpart in Vienna, as Washington and Beijing try to reset high-level contacts and keep relations from further spiraling downward.

Brief official accounts of the meeting Wednesday and Thursday between Mr. Sullivan and Wang Yi, the Communist leadership's top foreign-affairs official, hinted at the immense strains between Washington and Beijing and the struggles both sides are having in steadying ties.

PacWest Stock Decline Indicates Bank Fears Persist

PacWest Bancorp has kept offering reassurances about its business since Silicon Valley Bank collapsed in March. The bank's stock has continued to fall, though, a sign the siege of U.S. regional banks might not end until policy makers act decisively to break it.

Shares of the Beverly Hills, Calif.-based regional bank fell 23% on Thursday after the company said its deposits dropped 9.5% during the week ended May 5. The lender said most of the decline occurred in the wake of news reports that PacWest was exploring a range of options, including a sale.

Stop Equating the Latest Bank Failures to the 2008 Crisis

The failures this year of First Republic Bank, Silicon Valley Bank and Signature Bank have been labeled the second-, third- and fourth-largest bank failures in U.S. history. By one measure, the three banks held more assets than all 25 banks that failed in 2008 during the global financial crisis.

Wait a second: this wave of failures is as bad as the 2008 crisis? The one that caused the Great Recession, street protests, trillion-dollar bailouts and a total overhaul of financial regulation?

Fed Official Signals Support for Further Rate Increases

A Federal Reserve official said the central bank should be prepared to continue lifting interest rates because inflation remains too high and the labor market is too tight, hinting at disagreements within the central bank's rate-setting committee.

Fed governor Michelle Bowman, in remarks prepared for delivery Friday at a banking conference in Germany, said she wasn't confident the central bank was making enough progress slowing down economic activity and inflation even though she allowed that interest rates were now at a restrictive setting.

Waller Says Fed Shouldn't Let Climate Concerns Distract From Overall Stability Risks

A top Federal Reserve official said that the U.S. central bank shouldn't put a special focus on climate-change risks in a way that could distract it from other destabilizing forces in the economy.

"Risks are risks, and from a policy-making perspective, the source of a particular shock isn't as important as building a financial system that is resilient to the range of risks we face," Federal Reserve governor Christopher J. Waller said Thursday during a conference in Madrid.

Bond Selloff Adds to the Pressure on Regional Banks

Investors are demanding higher yields to own the bonds of regional banks, threatening to further pressure lenders that are already being hit by rising deposit costs.

The extra yield, or spread, on regional-bank bonds over U.S. Treasurys has risen in many cases by about 2 percentage points or more since early March, when the failures of Silicon Valley Bank and Signature Bank spurred a broad investor retreat from all but the largest U.S. banks.

EV Startups Are Proving Warren Buffett Right

"The auto industry is just too tough." That was Warren Buffett's response to a question about the opportunities presented by the shift to electric vehicles at Berkshire Hathaway's annual meeting last Saturday. A few days of earnings reports from EV startups later, it is hard to disagree.

Polestar Automotive became the latest manufacturer to cut its outlook for 2023 alongside first-quarter results Thursday. Volvo Cars, one of Polestar's major shareholders, needs more time to perfect the software for a new production platform that Polestar will use for its new sport-utility vehicle, Polestar said. The Polestar 3 will now hit the market in 2024 rather than later this year as previously hoped.

Pandemic-Era Border Policy Expires Amid Migrant Surge

The pandemic-era border measure used to quickly expel asylum seekers ended late Thursday with thousands of migrants crossing into the U.S. before midnight in anticipation of harsher immigration rules.

There were no immediate reports of a rush of migrants at legal ports of entry or elsewhere, which authorities feared would occur right after the expiration of Title 42. Under the public-health rule, U.S. authorities could send migrants who crossed the border illegally back to Mexico before they could request asylum.

Trump's Indifference on Ukraine War Sets Stark Choice for U.S. Voters in 2024

Donald Trump's refusal to commit to aiding Ukraine's fight against Russia's invasion portends a stark choice for U.S. voters if the war is still raging in November 2024: The wide-ranging support for Kyiv under President Biden, or indifference to the winner of a conflict that has cost the U.S. and its allies tens of billions of dollars.

The former president, who is also the GOP's leading contender to challenge Mr. Biden next year, also challenged the broadly unified support in the mainstream of the Republican Party for backing Ukraine, with some GOP lawmakers pushing the Biden administration to provide Kyiv with even more advanced and lethal weaponry.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

05-12-23 0557ET