Good morning! Fun fact for you: "The Shining," the horror classic based on Stephen King's book, made its debut in theaters on this date in 1980. Would it be a stretch to describe it as a tale of literal remote work gone awry?

Anyways, today's newsletter is far less frightening and much briefer, at 972 words, 4 minutes.

1 big thing: The U.S. debt clock is ticking

Data: FactSet, Federal Reserve; Chart: Axios Visuals

Time is money. But in the case of the debt ceiling, money is also time, Matt writes.

Driving the news: Uncle Sam's checking account — something known as the Treasury General Account, held at the Federal Reserve Bank of New York — is dwindling fast.

  • The last weekly update on the account showed the balance falling to less than $61 billion, its lowest level since the recent round of wrangling over raising the debt ceiling began.

Why it matters: The so-called X-date is when this account — which fluctuates depending on tax collections and government payments — no longer has enough money to meet the country's financial obligations, potentially triggering a technical default.

The latest: President Biden and House Speaker Kevin McCarthy held what they described as productive talks at the White House late yesterday, but no deal was reached.

Context: A month ago, many on Wall Street closely tracking the debt ceiling issue thought the true X-date would likely be sometime in July or even early August.

  • Yes, but: April yielded disappointing tax revenues — likely due to the ugly year on Wall Street in 2022, which cut capital gains receipts — leaving the Treasury less wiggle room than expected.

What they're saying: Many analysts now think the moment of truth may actually come sometime in early June, which the Treasury has publicly said for months.

  • "By June 8-9 cash is likely to drop under $30 billion," Goldman Sachs analysts wrote, adding, "At that point, we believe there are even odds that the Treasury exhausts its funds entirely."
  • JPMorgan analysts wrote that "up until May 4th, [our] view was that the x-date would actually be mid/early August but, after weak tax receipt data from April likely driven by lower capital gains taxes collected, the date was revised to June 9 and later June 7."

The bottom line: Time keeps on slipping, slipping, slipping...

2. Catch up quick

🎯 Disney's reputation takes a hit from political drama. (Axios)

🤳 TikTok sues Montana over ban. (Axios)

🪧 Some Amazon office workers plan a walkout at headquarters on May 31. (WaPo)

3. Pressures under the surface

Note: Includes U.S. high-yield corporate bonds trading below 60 cents on the dollar and leveraged loans below 75; Data: BofA Global Research; Chart: Axios Visuals

The amount of U.S. corporate debt trading at distressed levels is at a level rarely seen over the last decade, Axios' Kate Marino writes.

Why it matters: We’re all on the lookout for signs of a deeper “credit crunch” as a result of the Fed’s historic rate-hiking campaign.

  • So far, what we're seeing is a growing bifurcation in the credit markets: For reasonably healthy companies, credit is widely available (though more costly than a year ago) — but for already struggling companies, credit is fast drying up.

What they’re saying: “Market access is wide open to higher-quality [companies] … And yet capital is getting severely constrained in areas where issuers overindulged on credit in recent years,” BofA Global Research credit strategist Oleg Melentyev wrote in a report on Friday.

  • Moody’s Investors Service adds that high rates, slowing growth and sticky inflation “will uncover pockets of financial vulnerability” — making it harder for low-rated companies to refinance and leading to rising defaults.

Zoom out: If this all sounds familiar, it might be because we wrote last week about both of these diverging trends.

The bottom line: Though markets are functioning pretty well now — especially considering the recent string of bank failures — “pressures remain under the surface,” Melentyev wrote.

4. Charted: The “R” word

S&P 500 companies citing "recession" on earnings calls
Data: FactSet; Chart: Alice Feng/Axios

Recession chatter from C-suite leaders has chilled since last year, Kate writes.

What’s happening: Mentions of the word “recession” on earnings calls declined for the third consecutive quarter (all but about 25 companies in the S&P 500 have reported results thus far for Q1).

  • As of now, total mentions in Q1 are less than half of what they were in Q2 2022.

The big picture: A year ago, recession fears were high as the Fed kicked off a series of steep rate hikes. Inflation was still high, too, and Russia’s war on Ukraine threatened to tip the global economy into recession.

5. 🩺 Unhealthy trend

Data: Source: Federal Reserve; Chart: Axios Visuals; Chart: Axios Visuals

The share of Americans who skipped medical treatment last year because of costs rose substantially from the lows of 2020 and 2021, per a Federal Reserve Survey out Monday, Emily writes.

  • The most commonly skipped form of medical treatment was the dentist, followed by seeing a doctor and paying for a prescription.

Why it matters: The ability to afford health care often translates into better health.

  • The survey also found that in families with income less than $25,000, 75% reported being in good health, compared with 91% for those with income of $100,000 or more.

Zoom out: Inflation walloped Americans across income levels in 2022, causing many to cut back on spending and that includes health care, an area people feel they can cut when times are tight.

  • 35% of Americans said their financial situation was worse in 2022 than the year prior, per the survey. That's the largest share on record since the Fed started asking the question a decade ago, Axios' Courtenay Brown reported.

Context: Back in 2020 and 2021, a record low share of Americans skipped medical treatment due to cost, likely because they had more cash in their pockets thanks to the COVID-era stimulus, as well as more access to health care — Medicaid coverage was also expanded in the pandemic.

What to watch: If the line on that chart rises more next year. Millions of Americans are expected to lose Medicaid access this year.

  • Those without insurance are twice as likely to skip treatment, the Fed survey found.

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Axios Markets was edited by Kate Marino and copy edited by Mickey Meece.