Stock Market Update

Equity futures point to a higher open this morning after last week's action sent the major averages to record-high levels. 

Shares of Advanced Micro Devices (AMD +39.40, +23.9%) are surging in the pre-market after the company announced a 6-gigawatt agreement to power OpenAI's next-generation AI infrastructure, with OpenAI set to take a significant equity stake in the company. 

The ongoing U.S. government shutdown has persisted through the weekend, with The New York Times reporting that negotiations remain deadlocked ahead of another Senate vote on continuing resolution tonight. The equity market has largely overlooked the shutdown, as the S&P 500 climbed to new record highs multiple times last week.

There is no economic data on the docket today, and it is a relatively light week on the data front as a whole, though some analysts have concerns that a long enough data blackout as a result of the shutdown could complicate the market's (and the Fed's) view of the economy. 

In global news, Japan's Nikkei (+4.8%) also hit fresh record highs following the election of Sanae Takaichi as the new leader of the LDP, who is expected to become prime minister after a full parliamentary vote in mid-October.

In corporate news: 

• Advanced Micro Devices (AMD +39.40, +23.9%) and OpenAI announced a 6 gigawatt agreement to power OpenAI's next-generation AI infrastructure across multiple generations of AMD Instinct GPUs. AMD has issued OpenAI a warrant for up to 160 million shares of AMD common stock, structured to vest as specific milestones are achieved.
• Boeing (BA 217.60, +1.30, +0.6%) is preparing for a 737 production increase as early as this month, according to Bloomberg. 
• Micron (MU 195.81, +8.01, +4.3%) was upgraded to Overweight from Equal Weight at Morgan Stanley, with a target of $220.

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region had a mixed showing with Japan's Nikkei (+4.8%) soaring to a fresh record high while markets in China and South Korea were closed for holidays. Japan's Nikkei: +4.8%, Hong Kong's Hang Seng: -0.7%, China's Shanghai Composite: HOLIDAY, India's Sensex: +0.7%, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: -0.1%.

In news:

• The outperformance in Japan followed the election of Sanae Takaichi as the new leader of LDP. The new conservative leader, who is seen as a proponent of Abenomics, is expected to become prime minister after a full parliamentary vote in mid-October.
• Most members of the Reserve Bank of New Zealand's shadow board support a rate cut on Tuesday night.

In economic data:

• Hong Kong's September Manufacturing PMI 50.4 (last 50.7)
• India's September Services PMI 60.9 (expected 61.6; last 63.2)
• Australia's September MI Inflation Gauge 0.4% m/m (last -0.3%)
• New Zealand's September ANZ Commodity Price Index -1.1% m/m (last 0.7%)

Major European indices trade near their flat lines while France's CAC (-1.3%) underperforms after Prime Minister Lecornu resigned due to broad opposition to fiscal plans. STOXX Europe 600: +0.1%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.1%, France's CAC 40: -1.3%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -0.1%.

In news:

• It is currently unclear if President Macron will attempt to name his sixth prime minister or dissolve the National Assembly, leading to new elections.
• European Central Bank policymaker De Guindos said that rates are at an appropriate level, but uncertainty remains high.

In economic data: 

• Eurozone's August Retail Sales 0.1% m/m, as expected (last -0.4%); 1.0% yr/yr (last 2.1%).October Sentix Investor Confidence -5.4 (expected -7.5; last -9.2)
• U.K.'s September Construction PMI 46.2 (expected 46.1; last 45.5)
• Spain's August Industrial Production 3.4% yr/yr (last 2.7%)
• Swiss September Unemployment Rate 3.0% (expected 2.9%; last 2.9%)