Investing.com -- U.S. President Joe Biden climbs off a plane in Japan to discuss global issues at this weekend's G7 meeting, but the spotlight remains focused on the outcome of the debt ceiling talks in Washington. Meanwhile, Walmart prepares to report its quarterly results after its retail peers unveiled disappointing sales.
1. "We will not default"
President Biden sounded a cautiously bullish tone on the ongoing negotiations over raising the $31.4 borrowing limit, saying that top-level members of Congress have agreed that the country "will not default."
Biden also confirmed that he would indeed trim his trip abroad this week to arrive back in Washington on Sunday to help hammer out a deal. House Speaker Kevin McCarthy, who has been at the forefront of the discussions as one of the key Republican leaders in Congress, told reporters that it is "doable" to forge an agreement by the time Biden returns this weekend.
For now, a formal resolution has yet to emerge, with both sides at odds over spending plans. Time is of the essence: Officials have estimated that the federal government could run out of money to pay its debts as soon as June 1.
U.S. stock futures edged slightly higher on Thursday as investors maintained guarded optimism for the outcome of the talks. At 04:49 ET (08:49 GMT), the Dow futures contract was up 25 points or 0.07%, S&P 500 futures traded 5 points or 0.14% higher, and Nasdaq 100 futures climbed 20 points or 0.15%.
2. Biden in Japan
Biden has arrived in Japan for a meeting with leaders from the Group of Seven leading democracies, with pressing global issues like the war in Ukraine and strained relations with China among the biggest topics on the table.
However, the debt ceiling negotiations back home will also likely still be a major focus at the gathering in Hiroshima, which is due to begin on Friday. Economists have warned that a U.S. default would not only impact the world's largest economy but have far-reaching consequences abroad.
A White House official told Reuters that Biden will hold a news conference on Sunday before he heads back to Washington.
3. Walmart earnings
Walmart Inc (NYSE:WMT) has posted a bigger-than-anticipated jump in sales in the first quarter, as strong performance at its e-commerce business and an uptick in grocery demand helped offset the impact of inflationary pressures hitting other major retailers.
Total revenue during the three months to April rose by 7.6% to $152.3 billion, topping estimates of $147.8B.
Sales at Walmart's key U.S. operations rose to $103.9B due in part to a 27% surge in its e-commerce operations, particularly in advertising as well as pickup and delivery services. The group also made gains in grocery sales, including in higher-income households.
A move to "leverage expenses" also contributed to a 17.3% expansion in total operating income to $6.2B.
4. Fresh U.S. jobs, housing data
Investors will have chance to parse through new data on Thursday that could give further definition to the outlook for both the U.S. labor and housing markets.
Weekly initial jobless claims are projected to edge down by 254,000 after they touched a year-and-a-half high of 264,000 in the week ended on May 6.
Meanwhile, existing home sales are expected to fall to a seasonally adjusted rate of 4.30 million in April, although elevated mortgage rates - a drag on homebuying activity in the prior month - are starting to show signs of easing.
The numbers may give clues into how the Federal Reserve's aggressive interest rate hiking campaign to corral inflation has impacted demand for labor and housing. The Fed raised borrowing costs by 25 basis points at its most recent policy meeting, but expectations remain that the U.S. central bank may push pause on its tightening cycle at its next gathering in June.
5. Oil inches lower amid debt ceiling discussions
Oil prices dipped on Thursday, paring back some of the previous session's gains, as traders eyed the potential outcome of the debt limit negotiations in Washington.
Crude prices rallied over 3% on Wednesday on hopes that a deal to raise the U.S. debt limit could shortly be reached, adding to the news of a drop in U.S. gasoline inventories due to demand surging to its highest levels since 2021.