Stock Market Update

Equity futures are higher this morning after a week that saw the major averages finish with modest losses, though a strong rebound session on Friday limited the week-to-date losses as strong income and spending data supported growth hopes. 

President Trump will meet with congressional leaders of both parties today ahead of the government funding deadline tomorrow night, according to Politico. President Trump has previously stated that a shutdown could result in the firing of thousands of government workers if a deal is not reached. 

On the policy front, the market's expectation for a series of rate cuts this year has been somewhat tempered in the wake of stronger-than-expected labor data and looming inflation concerns.

Cleveland Fed President Beth Hammack (FOMC nonvoting member) told CNBC that the current environment is "a challenging time for monetary policy."

This morning's economic data is limited to the 10:00 ET release of August Pending Home Sales, though Friday's Nonfarm Payroll Report for September will be closely watched. 

In trade developments, The Wall Street Journal reports that Chinese President Xi wants President Trump to oppose Taiwanese independence in exchange for a trade deal.

Bloomberg reports that South Korea's National Security Adviser Wi Sung-lac stated that Seoul will not be able to pay the $350 billion investment guarantee in cash as a part of the negotiated trade deal, calling into question similar guarantees from other nations. 

In corporate news:

• Eric Adams has dropped out of the New York City mayoral race, according to CBS News.
• OPEC+ will likely increase production in November, according to Bloomberg. 
• President Trump stated via Truth Social that Microsoft (MSFT 513.20, +1.74, +0.2%) should fire its head of global affairs, Lisa Monaco.
• Novo Nordisk A/S (NVO 53.79, -1.82, -3.3%) was downgraded. to Underweight from Equal Weight at Morgan Stanley, with a target of $47.
• Wells Fargo (WFC 84.52, -0.49, -0.6%) was downgraded to Equal Weight from Overweight at Morgan Stanley, with a target of $90.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: -0.7%, Hong Kong's Hang Seng: +1.9%, China's Shanghai Composite: +0.9%, India's Sensex: -0.1%, South Korea's Kospi: +1.3%, Australia's ASX All Ordinaries: +0.8%.

In news:

• China's industrial profit turned positive for the year in August, though profits of state-owned enterprises are still expected to be down for the full year.
• Japan's LDP leadership election will take place on Saturday and there is still no clear frontrunner.
• China Securities Times reported that banks are facing increasingly challenging bond market conditions going into the end of the quarter, prompting some hedging activity.

In economic data:

• China's August Industrial Profit 0.9% YTD (last -1.7%)
• Japan's July Leading Index 106.1 (expected 105.9; last 105.0) and Coincident Indicator -1.8% m/m (expected -2.6%; last 0.7%)
• India's August Industrial Production 4.0% yr/yr (expected 5.0%; last 3.5%) and August Manufacturing Output 3.8% m/m (last 5.4%)

Major European indices trade on a mostly higher note. STOXX Europe 600: +0.3%, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.3%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -0.1.

In news:

• Spain saw its credit rating upgraded by Fitch, Moody's, and S&P over the weekend. Lufthansa plans to cut its administrative headcount by about 4,000 over the next four years.
• European Central Bank policymaker Makhlouf said that the central bank is near the bottom of its easing cycle while policymaker Cipollone spoke in favor of the digital euro.

In economic data:

• Eurozone's September Business and Consumer Survey 95.5 (expected 95.2; last 95.3)
• U.K.'s August Mortgage Lending GBP4.31 bln (expected GBP4.80 bln; last GBP4.51 bln) and net Lending to Individuals GBP6.00 bln (expected GBP6.30 bln; last GBP6.14 bln)
• Italy's August non-EU trade surplus EUR1.78 bln (last surplus of EUR5.99 bln)
• Spain's September CPI -0.4% m/m (expected -0.2%; last 0.0%); 2.9% yr/yr (expected 3.1%; last 2.7%). September Core CPI 2.3% yr/yr (last 2.4%). August Retail Sales 4.5% yr/yr (last 4.7%)