Investors will hear Q3 results from 189 members of the S&P 500 in the coming days, marking the biggest week of earnings season and one that is sure to move markets. The group also includes 12 of the 30 companies that make up the Dow industrials. As the market rambles on, October is shaping up to be one of the best months of the year. The Dow is up about 4% for the month, suggesting that stocks could end the year with some serious momentum.

Economy

Shinzo Abe's convincing election victory lifted the Nikkei overnight to its highest in 21 years, climbing 1.1% to 21,697, with the prime minister on track to become Japan's longest-serving leader. The super majority will extend the lifespan of "Abenomics," allowing the BOJ to continue with massive monetary easing, even as the Fed seems determined to hike rates again in December.

China's exports to North Korea jumped 20.9% in the first three quarters of 2017, as Asia's largest economy exported $2.55B in value to the pariah state, but its imports during the nine-month period slipped 16.7%. Increased pressure? Trade between the two nations fell in September, as exports to North Korea dropped 15% to $266M, while imports tumbled 49% to $146M.

With voters upset over traditional parties and orders from Brussels, billionaire populist Andrej Babis, dubbed the "Czech Trump", clinched a victory in national elections on Saturday. Eurosceptics and an anti-Islam group backed by France's National Front also made strong gains, as a breakdown in political consensus shifted the country to the right and sent a record number of parties to parliament.

Nearly half a million people flooded Barcelona's streets on Saturday in a huge protest over the future of Catalonia. Spanish Prime Minister Mariano Rajoy announced earlier that he would invoke special constitutional powers to fire the regional government and force a new election, countering the area's move towards independence, but local leaders vowed to never accept direct rule from Madrid. Euro -0.3% to $1.1744.

European Parliament President Antonio Tajani said Europe should "fear" the spread of small nation-states as Spain struggles with Catalonia and two of Italy's wealthy regions voted in referendums on greater autonomy. As leading members of the anti-migrant, anti-EU Northern League, Lombardy and Veneto, which account for 30% of Italy's GDP, want to keep more tax revenue and control policy areas like immigration, security, education and the environment.

Looking to counter Iran's growing assertiveness in the Middle East, Secretary of State Rex Tillerson on Sunday participated in the inaugural session of a new Saudi-Iraqi council, which aims to foster closer ties between the two countries. It comes as U.S.-backed forces captured Syria's largest oil field, Al-Omar, from Islamic State, which had held it since 2014 and used it as a major source of revenue.

"We're not walking away from the issue of climate change, we want to be part of the conversation going forward," said John McCarrick of the U.S. Bureau of Energy Resources. "We're still fully engaged on this issue, just in a different structure." Commenting about a renegotiated Paris accord, he said the U.S. wants "a deal that's good for America and would not require an overburdening of the taxpayer and energy consumer."

Stocks

Bitcoin hit an all-time high of $6,147.07 on Saturday, according to CoinDesk, recording gains of over 500% this year, more than any other tradable asset class. Some are attributing the latest rise to another upcoming split in bitcoin known as a "fork," which will lead to the creation of a new cryptocurrency called bitcoin gold. There are also rumors that China could reverse its ban on cryptocurrency exchanges.

Helping it gain traction in China's fast-growing EV market, Tesla (NASDAQ:TSLA) has reached an agreement to set up a wholly owned factory in Shanghai's free-trade zone, WSJ reports. The arrangement, the first of its kind for a foreign automaker, could enable Tesla to slash production costs, but it will still likely incur China's 25% import tariff.

Part of a company-wide drive to reduce its cost structure, Boeing (NYSE:BA) has announced a new agreement with Mitsubishi Heavy Industries (OTCPK:MHVYF) to cut the price of producing wings for the 787 Dreamliner. MHI will pursue increased efficiency in its production system and supply chain, while the pair will also study advanced aerostructure technologies for future generation commercial aircraft.

As a powerful typhoon approaches the mainland, Toyota (NYSE:TM) suspended operations this morning at all of its assembly plants in Japan, including those of its subsidiaries. Tens of thousands of citizens evacuated on Sunday, while hundreds of flights were canceled and rail services disrupted with heavy rain and wind lashing the country.

It's a long shot, but Puerto Rico, which is still in shambles from Hurricane Maria, has submitted a bid to host Amazon's (NASDAQ:AMZN) second headquarters, Bloomberg reports. The U.S. commonwealth desperately needs a big break to reverse a decade of economic decline, and the 50,000 jobs projected to come with Amazon's HQ2, to be built at a cost of more than $5B, could radically reverse its fortunes.

"We have always said that we will be listing in 2018, and to be more specific, in the second half of 2018," Saudi Aramco (Private:ARMCO) CEO Amin Nasser told CNBC, shooting down rumors of a delayed IPO or plans to sell private shares to sovereign wealth funds. The IPO for roughly 5% of the company, which will be listed on Saudi Arabia's Tadawul and one or more foreign exchanges, is widely expected to be the largest in history.

Toshiba now expects to slide to a net loss of nearly $1B this business year after calculating taxes related to the sale of its prized chip unit to a group led by Bain Capital. However, Toshiba's (OTCPK:TOSYY) latest forecasts, which kept annual revenue and profit estimates unchanged, do not reflect expected gains from the ¥2T ($17.6B) sale as the deal has yet to receive regulatory approval.

Renegotiations... United Continental (NYSE:UAL) is in discussions with JPMorgan Chase (NYSE:JPM) over terms of their co-branded card partnership, a move some analysts fear could suppress revenue at the bank. Competition for travel co-brand cards has intensified in recent years, with big banks attracted to the deals because frequent travelers are often affluent consumers with good credit scores.

Getting ready to take on Amazon (AMZN) and Wal-Mart (NYSE:WMT) for the upcoming shopping season, Target (NYSE:TGT) will start free shipping in November, while it will price most of its holiday assortment under $15. The retailer is also rolling out a service that allows online customers to send friends and family electronic gift boxes that let them make changes to items or select entirely different gifts before they ship.

Meanwhile, Amazon is opening a research center dedicated to artificial intelligence in Germany's Cyber Valley, creating 100 jobs dedicated to expanding applied research with AI. It will mean the U.S. e-commerce behemoth is part of "one of the largest research partnerships in Europe in the field of artificial intelligence," said Ralf Herbrich, director of machine learning at Amazon (AMZN).

Closing in on a deal to acquire BroadSoft (NASDAQ:BSFT), Cisco (NASDAQ:CSCO) is hoping for yet another route to diversify away from the switches and routers business, which is slowing, and gain a foothold in contact centers and collaboration. BroadSoft has typically sold its products to big telecoms like Verizon (NYSE:VZ) and AT&T (NYSE:T), who resell them to business customers.

According to the NYT, 21st Century Fox (FOX, FOXA) was aware Bill O'Reilly had reached a $32M settlement with a network analyst who had accused him of sexual harassment when it renewed the former news host's contract last February. The deal included allegations of repeated harassment, a nonconsensual sexual relationship and the sending of gay pornography and other sexually explicit material to her.

A problem on Wall Street? Fidelity Investments has pushed out two high-level executives, C. Robert Chow and Gavin Baker, over the past few weeks amid sexual harassment complaints, WSJ reports. The investment firm has also hired an outside consultant to review employee behavior in its stock-picking unit, where both of the employees had worked.

Today's Markets

In Asia, Japan +1.1%. Hong Kong -0.6%. China +0.1%. India +0.4%.
In Europe, at midday, London +0.1%. Paris +0.6%. Frankfurt +0.5%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude flat at $51.84. Gold -0.3% to $1276.70.
Ten-year Treasury Yield +1 bps to 2.39%

Today's Economic Calendar

8:30 Chicago Fed National Activity Index