If history is a guide, investor sentiment will continue to be good for stocks into the end of the year. Earnings should continue to be a positive for the market, and the Republican tax plan, announced last Wednesday, could also be a catalyst. The S&P 500, Nasdaq and Russell 2000 are at all-time highs heading into the fourth quarter, while the Dow is slightly off its high at 22,400, but still recorded a 4.9% gain in Q3.

Economy

The euro got knocked overnight, falling 0.7% to $1.1738, as more than 90% of Catalan voters chose independence from Spain amid clashes with riot police. Markets also took a hit following the referendum dubbed illegal by Spain, with the benchmark Ibex 35 Index down 1.2% and government debt suffering as well. "The extraordinary recovery of the Spanish economy could be hindered," warned analysts at ING, as the country sinks deeper into a constitutional crisis.

The unemployment rate in the eurozone stuck at 9.1% for August, stabilizing for a third straight month and unchanged at its lowest level since early 2009. It's the latest piece of good news for the region that has stoked expectations the ECB will soon start to reduce its stimulus. More data? As new order growth accelerated, the eurozone factory PMI for September hit its highest since February 2011.

President Trump is beginning the new fiscal year with a "cut the red tape" event at the White House, highlighting the administration's efforts to eliminate what he sees as burdensome government regulation of private businesses. His regulatory reform speech will be followed by breakout sessions at 10 federal agencies, including the departments of Agriculture, Energy, Interior and others.

U.S. Treasury yields are at their highest in almost 12 weeks, with the 10-year at 2.37%, pushing the dollar half a percent higher against a basket of currencies. Firming expectations of a third interest rate hike this year, data pointing to steady U.S. growth and talk of a potentially more hawkish successor to Fed Chair Janet Yellen all appear to be contributing to the movement.

"I told Rex Tillerson... that he is wasting his time trying to negotiate with Little Rocket Man," President Trump tweeted over the weekend, after the Secretary of State acknowledged that the U.S. is in direct contact with North Korea. "Being nice to Rocket Man hasn't worked in 25 years, why would it work now? Clinton failed, Bush failed, and Obama failed. I won't fail."

Suspect Stephen Paddock opened fire last night at the Route 91 Harvest festival in Las Vegas, killing at least 50 people and wounding more than 100 others before he was killed by police. Terror weekend? Two women were stabbed to death at Marseille's main railway station by a suspect that shouted "Allahu Akbar," while a Somali refugee knifed a police officer and ran down several pedestrians in Edmonton, Alberta.

Saudi officials steering efforts to prepare the kingdom for the post-oil era are on high alert after the nation's economy contracted for two consecutive quarters for the first time since the global financial crisis. It's not unexpected, but notable, as OPEC members slash crude production to bolster prices. GDP shrank 1% in Q2 after contracting 0.5% in the first three months of 2017.

Stocks

Equifax is reviewing its Chief Legal Officer John Kelly's clearance of stock sales by company executives made weeks before the credit reporting service disclosed a massive data breach, WSJ reports. Top brass, including the firm's chief financial officer, sold $1.8M in shares within three days of Equifax (NYSE:EFX) learning on July 29 that hackers had breached the personal data of up to 143M Americans.

Citigroup has agreed to return $1.74B to the estate of Lehman Brothers, Bloomberg reports, resolving a decade-old dispute that dates back to the financial crisis in 2008. The quarrel arose after Citi (NYSE:C) said it was owed $2.1B by the investment bank's bankruptcy, while Lehman argued that the money - which Citi has on deposit for the latter's trades - should go to its creditors.

According to a mailed statement, Altice USA (NYSE:ATUS) and Walt Disney (NYSE:DIS) have come to an agreement on terms in their dispute over channel carriage and retransmission fees. That means access for Optimum customers to Disney's networks (ABC, the Disney Channels and ESPN) was uninterrupted at the start of October, and particularly clears the path for a New York Yankees playoff game and Monday Night Football.

Shifting its center of gravity halfway around the world, IBM now has more employees in India than in the U.S., with about 130K workers in the country, or about one-third of its total workforce. "IBM India, in the truest sense, is a microcosm of the IBM company," said Vanitha Narayanan, chairman of the company’s Indian operations. Work there spans cloud computing and artificial intelligence to self-driving car technology.

Larry Ellison ran through demonstrations of Oracle (NYSE:ORCL) Database 18c at the company's annual developers conference last night, guaranteeing its bill will be less than half of what Amazon (NASDAQ:AMZN) would charge for a similar service. The reason the database costs less is that 18c autonomously provisions only the computing resources as customers need them, but Amazon disputed the claims, stating its clients can scale its database offerings.

Warming its icy relationship with publishers, Google this week is ending its decade-old "first click free" policy that required news websites to give readers free access to articles from its search results. The Alphabet (GOOG, GOOGL) unit is also planning tools to help increase subscriptions, like enabling users to log in with their Google passwords and sharing user data with news organizations.

The divisions between Uber and its former CEO Travis Kalanick are widening behind the scenes. Last Thursday, UBER and one of its investors, Goldman Sachs, made a proposal to the board that would reduce Kalanick's voting power at the company, CNBC reports. In response, he appointed former Xerox CEO Ursula Burns and former CIT Group CEO John Thain as directors to reassert his control.

Sears Canada has asked a court to extend creditor protection that expires on Wednesday by another month so it can finish negotiating a deal with its executive chairman that would keep the iconic brand alive. Sears Canada (OTCPK:SRSCQ), which in 2012 was spun off from U.S. retailer Sears Holdings (NASDAQ:SHLD), laid out a restructuring plan in June that included cutting 2,900 jobs and closing roughly a quarter of its stores.

Caught in the crossfire of a trade dispute between Boeing (NYSE:BA) and Bombardier (OTCQX:BDRAF, OTCQX:BDRBF), Britain said it would fight its corner to protect thousands of jobs put at risk in Northern Ireland. Trade Minister Liam Fox is working to find a resolution after the U.S. imposed a 220% preliminary duty on Bombardier's CSeries jets, whose wings are made in Belfast.

An Air France flight carrying 520 people from Paris to Los Angeles made an emergency landing in eastern Canada on Saturday after one of its four engines exploded over the Atlantic. The Air France (OTCPK:AFRAF) jet involved in the incident was an Airbus A380 (OTCPK:EADSY), according to airfleets.net, while the engine was made by Engine Alliance, a joint venture between GE and Pratt & Whitney (NYSE:UTX).

Today's Markets

In Asia, Japan +0.2%. Hong Kong closed. China closed. India closed.
In Europe, at midday, London +0.5%. Paris +0.1%. Frankfurt +0.3%.
Futures at 6:20, Dow +0.2%. S&P +0.1%. Nasdaq +0.2%. Crude -1.5% to $50.91. Gold -0.7% to $1276.20.
Ten-year Treasury Yield +4 bps to 2.37%

Today's Economic Calendar

9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending