Global stocks are starting the week sharply lower, as concerns about tighter monetary policy and rising bond yields halt two months of calm summer trading. Some Fed members have been trying to convince markets that the September meeting would be "live" for a hike, even though futures only imply a one-in-four chance of a move. The sea of red follows Friday's sell-off of all three major U.S. indices, which posted their biggest losses since Brexit.

Economy

With signals from the Fed jolting financial markets, traders will be closely watching the last of Fedspeak today before the Sept. 20-21 policy meeting. The remarks from Fed governor Lael Brainard and Atlanta Fed President Dennis Lockhart will be the last comments ahead of the central bank's self-imposed week of silence. Fed Governor Daniel Tarullo said Friday he wouldn't rule out the possibility of a rate hike.

Hillary Clinton is suffering from pneumonia, the Democratic presidential candidate's personal doctor said Sunday, after she fell ill at a 9/11 memorial less than two months before the November election. She was due to travel to California today for a two-day fundraising and campaign trip, but has canceled the event to rest at her home in Chappaqua, New York. Will her health be another landmine for the suddenly vulnerable markets?

A defiant North Korea has restated its demand for recognition as a "legitimate nuclear weapons state" and vowed to increase its strike force "in quality and in quantity," as world powers pondered ways to punish Pyongyang for its latest and largest atomic test. "The Obama administration running around and talking about... meaningless sanctions until today is highly laughable," North Korea's foreign ministry spokesperson said in a statement.

Japan's core machinery orders rose for a second straight month in July, climbing 4.9% from the previous month, following a recent run of weak indicators including exports, factory output and household spending. Prime Minister Shinzo Abe's government has been counting on capital expenditure to drive private sector-led growth, but business investment has been slow to pick up because of an uncertain outlook and external headwinds.

A rift between the EU and IMF on how to address Greece's debt crisis is damaging for the country, Prime Minister Alexis Tsipras told a news conference in Thessaloniki, saying the institutions are slowing investors down from regaining trust in the markets. In an unexpected move, Tsipras also called upon private investors to help kick-start the Greek economy, arguing it would be "mutually beneficial both for you and for our country."

Britain as a trading nation has become "too lazy and too fat," according to International Trade Secretary Liam Fox, and business leaders are more interested in playing golf on Friday afternoons than in seeking new export markets. The comments - made at a Westminster drinks party - angered entrepreneurs and drew a frosty response from Downing Street, which said the minister was not expressing the view of the government.

A cease-fire in Syria brokered by the United States and Russia is set to begin at sunset amid mixed messages of commitment from various rebel factions but with verbal backing by President Bashar Assad. The deal allows the Syrian government to continue to strike at Islamic State and al-Qaida-linked militants with the Jabhat Fatah al-Sham group, earlier known as the Nusra Front, until the U.S. and Russia take over the task in one week's time.

Stocks

Tesla is changing the way its Autopilot system works following the fatal crash in May of a car that was driving under semi-autonomous control. The revision will depend more on radar signals to help guide vehicles along roadways, and adds safeguards to keep drivers engaged at high speed. "This is not going from bad to good. It's going from good to, I think, great," Elon Musk told reporters. TSLA shares are down 19% since the start of the year.

In what was described internally as a "reboot" of the program, Apple (NASDAQ:AAPL) has laid off dozens of employees at its self-driving car project, and closed down parts of it entirely, NYT reports. With the tech giant being secretive about its car ambitions, the threat of disruption out of Cupertino has been somewhat of an enigmatic overhang in the industry. One thought is that Apple's $1B investment in Didi Chuxing (Private:DIDI) earlier this summer may have been an indication of its future car strategy.

Music streamers may get several new service choices in the coming months, sources told the NYT. Pandora (NYSE:P) could announce plans this week to expand its $5/month platform, and is expected to launch a $10/month on-demand service by Christmas, which would compete with Spotify (Private:MUSIC) and Apple Music (AAPL). Amazon (NASDAQ:AMZN) is also expected to reveal a platform with a large catalog of music for $10/month, or about half that amount for Echo customers.

Facebook has reinstated a Vietnam War-era photo of a naked child fleeing a napalm attack, after a public outcry over its removal of the image including harsh criticism from Norway's prime minister. "They must see the difference between editing out child pornography and editing out history," Erna Solberg told Reuters. "After hearing from our community, we looked again at how our Community Standards were applied in this case," Facebook (NASDAQ:FB) said in a later statement.

HP is getting a lot bigger. The personal computer and printing giant is buying Samsung's (OTC:SSNLF) printer business for $1.05B, in a move that will give it 6,000 new employees, thousands of new technology patents and a bigger presence in Asia. The acquisition is expected to add to HP's (NYSE:HPQ) earnings in its full year after closing. Samsung will also buy $100M-$300M worth of HP shares on the open market once the deal is through. HPQ -1% premarket.

Meanwhile, more than $14B was wiped off Samsung's (OTC:SSNLF) market capitalization after the firm urged consumers worldwide to immediately stop using their Galaxy Note 7s and exchange them as soon as possible. U.S. authorities told users on Friday to power down their devices. The world's largest smartphone maker plans to provide Note 7s with new batteries in South Korea starting Sept. 19, but schedules vary for other countries.

As print ad page sales continue to decline, Time Inc. (NYSE:TIME) is launching the People Entertainment Network, an advertising-supported streaming video service. The channel, which will be available to watch live or on demand, will focus on celebrities, human interest stories and live events, and include five hours of original programming a week. Time Inc. is also in talks to acquire programming from outside producers.

Starbucks plans to increase its global tea business to $3B over the next five years as it starts selling its Teavana line in more than 6,200 stores across the Asia Pacific region following its entry in China last week. American consumers seeking out healthier food and drink options propelled Starbucks' (NASDAQ:SBUX) tea business to grow 12% last year, with sales of best-seller iced tea climbing 29%.

The New York Stock Exchange is instituting new procedures today that would eliminate "Rule 48," which allows market makers to delay opening a stock when markets are unstable. Under the changes, NYSE (NYSE:ICE) pre-open price indications will be simplified and adjust for volatility. Values will also be published on both proprietary and other feeds under all market conditions.

Spencer Lake is set to leave HSBC after an "instrumental" 10-year stint culminating in a role as vice-chairman of global banking and markets. Earlier this year, HSBC hired senior Goldman Sachs (NYSE:GS) banker Matthew Westerman to become co-head of banking. The business was subsequently reorganized, with Lake becoming vice-chair of GBM. HSBC -2% premarket.

More than 11 years after civil charges were filed, New York's case against Hank Greenberg, the former chief executive of AIG, goes to trial this week. Greenberg and AIG's former CFO, Howard Smith, are accused in part of engineering bogus reinsurance transactions to bolster reserves, and allegedly orchestrated other transactions that allowed the company to convert insurance losses into investment losses.

Sanofi and Alphabet's life sciences firm Verily are investing about $500M in a diabetes joint venture combining devices with services, an example of growing ties between the pharma and tech sectors. "The company will leverage Verily's (GOOG, GOOGL) experience in miniaturized electronics, analytics, and consumer software development, with Sanofi's (NYSE:SNY) clinical expertise and experience," the two companies said in a statement.

Starboard Value has built a 4.6% stake in Perrigo (NASDAQ:PRGO), worth nearly $600M, and is urging the firm to refocus on its core business by shedding non-core assets and exploring other alternatives. The activist sent Perrigo a letter Sunday criticizing the company for failing to live up to performance targets it set while successfully fending off a $26B takeover offer last year from Mylan (NASDAQ:MYL). PRGO +2.1% premarket.

Citing governance complications, Linde (OTCPK:LNEGY) and Praxair (NYSE:PX) have ended merger talks that would have created a gas market leader with a value of more than $60B. The two companies had been in early-stage talks amid consolidation in the industrial gas sector, where slower economic growth has weakened demand in the manufacturing, metals and energy sectors. PX -2.9% premarket.

The world's largest container shipping firm is seeing a short-term rise in freight rates and an inflow of new clients after the collapse of Hanjin Shipping (OTC:HNJSF). "There's no doubt that we're seeing a reaction in the rate market," said Klaus Rud Sejling, the executive in charge of Maersk Line's (OTCPK:AMKAF) east-west network. "In the short term, the effect is positive... The question is, what will happen with rates in the longer term."

Today's Markets

In Asia, Japan -1.7% to 16672. Hong Kong -3.4% to 23290. China -1.9% to 3021. India -1.5% to 28353.
In Europe, at midday, London -1.4%. Paris -1.9%. Frankfurt -1.9%.
Futures at 6:20, Dow -0.7%. S&P -0.7%. Nasdaq -0.9%. Crude -2% to $44.95. Gold -0.5% to $1328.20.
Ten-year Treasury Yield +2 bps to 1.69%

Today's Economic Calendar

8:00 Fed's Lockhart speech
1:00 PM Results of $24B, 3-Year Note Auction
1:00 PM Results of $20B, 10-Year Note Auction
1:00 PM Fed's Kashkari speech
1:00 PM Fed's Reserve Gov. Lael Brainard speech