Your Sunday US Briefing: Debt Limit Meetings and Robot Boyfriends

Hello from California, where we are still licking our wounds from Friday about the state’s budget deficit, including cuts to public transport. The timing is awful because people need to get back to their offices, if only to stop day drinking and using drugs. Here are some things you need to know to prepare for the coming week.  

The Big Meeting: President Joe Biden and House Speaker Kevin McCarthy are expected to get together in the next few days to hammer out ways the US can avert a catastrophic debt default. At least that’s the plan, they canceled last week’s summit. Still, the president had some reassuring words on Saturday, saying “there’s real discussion about some changes we all could make.” That must be music to Treasury Secretary Janet Yellen’s ears. The Treasury said Friday it had just $88 billion of extraordinary measures to help keep the government’s bills paid as of May 10.

The Big Tumble: Bank shares fell for a fourth straight week and maybe it’s no surprise that eight of the 10 worst performers in the S&P 500 this year are financials. The collapse of Silicon Valley Bank and other lenders over the past two months has fueled widespread concern that others would be hit by a similar combination of rising costs and mounting losses as higher interest rates weigh on the economy. Is there a bottom in sight? “History would suggest that you don’t see and smell this much smoke, and then have everything be just fine,” said Ann Miletti, head of active equity at Allspring Global Investments. 

The Big Matchmaker: No weekend briefing is complete without AI, and this week the robots are trying to muscle in on our love life. A new, premium-priced matchmaking app is about to come out that uses machine learning to find your mate without you having to swipe left all the time. It’s the latest effort to reconcile the somewhat inharmonious human concepts of dating and intelligence

The Big Pitch: A writers strike is weighing on plans by the networks to sell their commercial inventory to media buyers for the coming TV season. Typically, there are big parties in fancy venues, and celebrities come out to celebrate. But many stars won’t cross picket lines and the networks don’t want to talk up shows they may not be able to deliver when the new season starts in September. “It’s hard to present an exact schedule, right, if you’re only in entertainment,” Fox CEO Lachlan Murdoch said on a conference call with investors last week.

The Big Deja Vu: The death spiral of Pepe the frog-themed digital token is catching some heat for dragging down Bitcoin and Ether. Long-time crypto fans have seen this play out before. Speculators typically offload some of their crypto holdings to invest in memecoin frenzies, like Pepe, leading to a drawdown in the prices of the two major coins, saids Kyle Doane, a trader at digital-asset manager Arca. Pepe peaked at a $1.6 billion market value (yes, billion) on May 5 before reversing course and plummeting some 70%, according to CoinMarketCap. “At the end of the day it’s a lottery ticket,” said Doane, who doesn’t trade Pepe. “That type of trading is basically a centralized casino.”  

The Big Appeal:  President Joe Biden pleaded for Congress to do more to curb gun violence in the US. “For God’s sake, do something,” the president in a column published Sunday in USA Today.  “America doesn’t have to be a place where our children learn how to duck and cover from a shooter, or scan a movie theater or restaurant for their exit options.”

The Big Splurge: Few things epitomize the growing global wealth gap better than post-pandemic air travel. Desperate to claw back revenue that evaporated during Covid, big airlines are honing in on wealthy travelers who are willing to fork out a small fortune to fly in style, such as first-class offering cabins that increasingly resemble mini hotel rooms, with sofas, double beds, big TVs, desks, wardrobes, minibars and even walk-in showers. Bon voyage, indeed.

Be well this week. See you on the other side. 

— With assistance by Adam Majendie