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Target earnings, debt ceiling debate, Tesla's ads: Three things to know this morning

The Yahoo Finance Live team breaks down three top trending headlines; Target's Q1 earnings, the debt ceiling dilemma, and Elon Musk addressing investors at the Tesla annual shareholders meeting.

Video transcript

JULIE HYMAN: This is "Yahoo Finance Live." I'm Julie Hyman. That's Brad Smith. And here are the three things that you need to get your morning started.

Thing number one, Target numbers last quarter hit the mark, but earnings this quarter will miss the bullseye. Comparable sales almost flatlined in Q1, while digital sales slumped by 3.4% from a year ago. A growing issue for Target and other retailers, in-store theft, which Target CEO Brian Cornell said could trim profit this year by $500 million. Still, the company did leave its full-year earnings forecast unchanged.

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And there is a pattern emerging from some of these early retailers that consumers are being more selective in their purchases, avoiding bigger-ticket items. It follows on what we saw with Home Depot's report yesterday.

Thing number two, debt-ceiling negotiations are inching forward even as the threat of default continues to hang over the market, particularly and increasingly the bond market. The debt-ceiling impasse continues to act as a sword of Damocles hanging over the market. President Joe Biden and Kevin McCarthy have appointed high-level representatives to try to push talks forward and wrangle over details. The president nixed a visit to Australia and Papua New Guinea that was to follow his trip to Japan to the Group of Seven meeting in order to return to Washington to continue negotiating.

Treasury Secretary Janet Yellen, of course, has been warning over the issue on what seems like a daily basis. She says a default could trigger recession.

And thing number three, the world's richest man making a series of headlines overnight. We're talking about Elon Musk, of course, addressing shareholders, first at Tesla's annual shareholder meeting in Austin, Texas. Among the highlights, he announced the delivery of the much anticipated Cybertruck. He says that will begin this year, adding he'll be driving one himself.

His tone on the economy was downbeat, but he said Tesla was well positioned, and he said the Model Y will become the best-selling car on the planet. Musk also hinting that Tesla might rethink its stance on advertising. That would be a big shift.

In a separate interview with CNBC, Musk touched on monetary policy, defended his tweeting, and slammed work-from-home culture.