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Good afternoon. Here's what you should know today, May 7: | |
- Russia celebrates an important holiday on Tuesday, but the mood is somber
- Big week ahead in the debt-ceiling talks
- A surge of migrants looms at the southern U.S. border
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 | | The fall of First Republic marked the second-largest bank failure in U.S. history. PHOTO: GODOFREDO A. VÁSQUEZ/ASSOCIATED PRESS | | |
1. Lenders are vulnerable to a loss of faith. | |
| First Republic Bank's seizure and sale to JPMorgan was supposed to be a cathartic moment for American banks, the denouement of the financial system's latest crisis. The relief lasted for barely a day, highlighting the fact that investors are still worried (🔐read for free) about the health of regional banks. In the coming days, investors will also parse April inflation figures for clues on the state of the broader economy, with the consumer-price index slated for Wednesday and producer inflation on tap for Thursday. | |
| 📈 This Year's Regional Bank Selloff Visualized (Read) Investors Flock to Safety Plays, but Stock 'FOMO' Lingers (Read) Warren Buffett Retains Sense of Optimism at Berkshire's Annual Meeting (Read) | |
2. Russia's Victory Day celebrations are set to be muted this year. | |
| The country's most important civic holiday is shaping up this year to be a sober reminder of Moscow's battlefield struggles in Ukraine. A drone attack on the Kremlin and a series of recent strikes on infrastructure deep inside Russia have exposed the country's vulnerability and rattled many Russians. Curtailed official commemorations and parades on May 9 will mark a stark difference from last year, when President Vladimir Putin used the celebrations marking the Soviet Union's victory over Nazi Germany to rally public support for his decision to invade Ukraine, declaring Russia "a great invincible power." | |
| U.S. and Allies Look at Potential China Role in Ending Ukraine War (Read) Russia Evacuates Civilians From Parts of Ukraine Ahead of Kyiv Counteroffensive (Read) | |
3. Top Democrats and Republicans are preparing for talks to break an impasse over raising the nation's borrowing limit. | |
| President Biden will host House Speaker Kevin McCarthy and other congressional leaders at the White House on Tuesday, as they grapple with the prospect of the first-ever U.S. default as soon as June 1. Democrats, who control the Senate, insist on a stand-alone bill to raise the debt ceiling, while Republicans, who control the House of Representatives, say any proposal must include spending cuts and policy changes. While the two parties are publicly standing by their stances, officials on both sides of the aisle have started to quietly search for a way out of a potential crisis. | |
| Biden Faces Rough Month as Debt Talks, Potential Border Surge Loom (Read) | |
4. El Paso is packed with migrants as a policy change draws near. | |
| Trump-era border restrictions known as Title 42 will expire on May 11, and the Biden administration plans to implement a new set of rules limiting which migrants are eligible to ask for protections in the U.S. The change has sparked confusion among migrants. Some are rushing across the border before Thursday, while others are waiting until then to cross into the U.S. El Paso, Texas, officials estimated last week that as many as 2,500 migrants were currently in the city, waiting to travel to other parts of the U.S. They expected that figure to grow in the coming days and skyrocket after Title 42 ends, straining the city's ability to provide shelter, food and other assistance. | |
5. King Charles inherits a monarchy in robust financial health. | |
| No one outside the palace is exactly sure how rich the British monarchy is, or of the personal wealth of its incumbent, Charles, who was crowned on Saturday. But one thing is certain: The monarch's annual income is sharply higher than it was a decade ago, bolstered in part by a property boom fueled by an era of ultralow interest rates and government stimulus. | |
| King Charles III Is Crowned in Lavish Coronation Ceremony (Read) Prince Harry Sidelined at King Charles III's Coronation (Read) | |
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