Violent attacks in three states have put the U.S. on high alert, but the incidents don't appear to be shaking markets, with stock futures up 0.4%. A device exploded overnight as a bomb squad robot examined a backpack that appeared to contain pipe bombs near an Elizabeth, NJ transit station. On Saturday, nine were wounded in a knife attack at a Minnesota mall, a pipe bomb exploded on the Jersey shore, another bomb was detonated in NYC and a pressure-cooker device was safely removed nearby.

Economy

Excessive credit growth in China is signaling an increasing risk of a banking crisis in the next three years, according to the Bank of International Settlements' quarterly review. The central bank of central bankers also called the recent equity rally "more stick than carrot," but stopped short of warning of a bubble, with policy makers questioning whether market prices fully reflect potential risks.

A technical fault disrupted Australia's stock exchange today, limiting trading for the day to less than three hours. The issue comes at an inconvenient time for investors and traders assessing their positions, with policy meetings scheduled at the BOJ and Fed this week, and Australia's central bank set to release minutes from its most recent meeting tomorrow.

Global bond issuance is running at its fastest pace in nearly a decade as companies, countries and U.S. agencies such as Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) binge on debt. According to Dealogic, a total of $4.88T of debt has been sold since the year began as issuers take advantage of rock-bottom borrowing costs. The figure is a hair below that of 2007, when $4.91T of bonds were issued during the same period.

Bundesbank President Jens Weidmann has warned that London's position as a financial center would be dealt a severe blow if the U.K. left the single market because banks would be denied the right to operate across the EU. The "hard Brexit" option - favored by some leading Conservative euroskeptics - would mean banks would lose their passporting rights unless Britain remained part of the European Economic Area.

Angela Merkel's CDU party has suffered its second electoral blow in two weeks, slumping to its lowest level since 1990 in a regional state election in Berlin. Voters turned to the anti-immigrant Alternative for Germany, which with 12.9% of the vote will enter its 10th regional assembly among the country's 16 states. Ahead of the election, hundreds of thousands of Germans took to the streets in seven cities throughout the country, in protest of the TTIP and CETA trade deals.

Russia's Duma elections on Sunday preserved the ruling party's status as largest the faction in the lower house of parliament, according to the nation's election commission. United Russia, allied to President Vladimir Putin, won 54.2% of the vote, with 90% of the ballots counted. Turnout weakened as opposition parties not loyal to the Kremlin failed to make an impression at the ballot box.

Moscow has stepped up its war of words with Washington, saying air strikes by a U.S.-led coalition on the Syrian army threatened the implementation of a U.S.-Russian ceasefire plan. According to the Russian Defense Ministry, U.S. jets on Saturday killed more than 60 soldiers. In other regional news, Turkey's President Erdogan is planning to create an almost 2,000-square-mile safe zone inside Syria.

OPEC and non-OPEC producers are close to reaching an output stabilizing deal, Venezuelan President Nicolas Maduro declared, a day after Iran welcomed any move aimed at market stability. OPEC members may even call an extraordinary meeting to discuss oil prices if they reach consensus at an informal gathering in Algiers this month, OPEC Secretary-General Mohammed Barkindo said during a visit to Algeria.

Stocks

Contract negotiations between Canada's Unifor union and General Motors (NYSE:GM) are continuing around the clock, with the two sides divided over new investment, ahead of a looming strike deadline that could see 3,900 workers walk off the job by 11:59 p.m. tonight. A strike would halt powertrain and vehicle production in at least two Canadian plants and potentially start a ripple effect for GM production in the U.S. that relies on those parts.

Although approval had been expected by the end of August, Iran has been told the U.S. will issue export licenses for the purchase of more than 200 Boeing (NYSE:BA) and Airbus (OTCPK:EADSY) aircraft by the end of September, according to Deputy Roads and Urban Development Minister Asghar Fakhrieh Kashan. The U.S. Treasury can veto sales of modern aircraft to Iran, including non-U.S. ones, due to the high proportion of U.S. parts.

Airbus is preparing to launch a new restructuring and cost-cutting plan next month to offset expensive delays to aircraft programs and minimize losses on the A380. The restructuring will tighten Airbus (OTCPK:EADSY) CEO Tom Enders' grip on the civil aerospace division, eliminate duplication of certain functions and may include job cuts across the group. Although the plans have not yet been finalized, talks with unions are expected to begin soon.

Nearly one-third of Hanjin Shipping container ships that have been waiting to dock at ports around the world have offloaded their cargo, raising hopes that the disruption in the global supply chain will ease ahead of the year-end holiday season. Meanwhile, a South Korean judge has ruled that all Hanjin (OTC:HNJSF) vessels that have unloaded must cancel their charter agreements and return the ship to their owners.

Sanofi has filed a lawsuit against Merck's (NYSE:MRK) international unit for alleged patent infringements, following the company's filing for new drugs applications with FDA. Sanofi (NYSE:SNY) claims that Merck Sharp & Dohme Corp. violated as many as 10 of its patents, including ones for its blockbuster diabetes treatment Lantus and its insulin delivery device soloSTAR.

Oracle's Larry Ellison fired a shot across Amazon's (NASDAQ:AMZN) bow Sunday evening, declaring that with the release of Oracle's (NASDAQ:ORCL) second generation IaaS data centers, "Amazon's lead is over." The Seattle-based company is currently considered the leader in cloud computing. Earlier this year, Morgan Stanley estimated Amazon Web Services generated $7.9B in sales in 2015, nearly 8x as much as Microsoft's Azure (NASDAQ:MSFT), the second largest IaaS player.

Salesforce is embedding artificial intelligence into its software, making it the latest firm to enhance workplace tools with human-like abilities. Called Einstein, the new offering is a set of online AI services designed to automate tasks, predict behavior and spotlight relevant information. Salesforce (NYSE:CRM) will demonstrate the software at its annual user conference next month in San Francisco.

Indonesia plans to pursue Google (GOOG, GOOGL) for five years of back taxes, and the search giant could face a bill of more than $400M for 2015 alone if it is found to have avoided tax payments, Reuters reports. Investigators from the tax office's special cases branch are said to have visited Google's local unit today. They believe that PT Google Indonesia paid less than 0.1% of the total income and value-added taxes it owed last year.

After rolling out a similar hub in the U.S., UPS is expanding its 3D printing services to Asia with a new facility in Singapore run by its partner Fast Radius. The company sees 3D printing as a potential threat to its warehousing business - where it stores parts for manufacturers - so it has looked to incorporate the technology into its business model.

Volkswagen's Audi head of development will be suspended this coming week as part of the probe into an emissions scandal, Bild am Sonntag reports. Investigations have shown that Stefan Knirsch, an Audi (OTCPK:AUDVF) board member, knew about the use of VW's (OTCPK:VLKAY) cheat software in 3.0 liter diesel engines and gave a false promise under oath. He's already been asked to clear his desk.

Lyft co-founder John Zimmer expects self-driving cars to handle the "majority" of LYFT's rides within five years, all of them within 10 years, and foresees that private car ownership will "all-but end" in major U.S. cities by 2025. What will the transition look like? Fixed-route autonomy would show up as early as 2017, with low-speed (under 25 MPH) autonomy on changeable routes starting as soon as 2018. Full autonomy would just be the next logical step.

As it grapples with a massive global smartphone recall that is estimated to cost more than $1B, Samsung Electronics (OTC:SSNLF) is moving swiftly to sell stakes in other tech companies to raise cash. The firm said Sunday it disposed of shares in ASML, Seagate (NASDAQ:STX), Rambus (NASDAQ:RMBS) and Sharp (OTCPK:SHCAY). Total proceeds from the sales exceeded 1T won ($889M).

Meanwhile, two Galaxy Note 7 smartphones have reportedly caught fire in China in what, if confirmed, would be the first such incidents in the world's largest smartphone market. Samsung Electronics (OTC:SSNLF) said it was investigating one of the reported cases after stating earlier that Note 7s sold in China were safe to use.

Today's Markets

In Asia, Japan closed. Hong Kong +0.9% to 23550. China +0.8% to 3026. India +0.1% to 28634.
In Europe, at midday, London +1.4%. Paris +1.4%. Frankfurt +0.8%.
Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.4%. Crude +1.3% to $44.17. Gold +0.5% to $1316.90.
Ten-year Treasury Yield -1 bps to 1.69%

Today's Economic Calendar

10:00 NAHB Housing Market Index