Markets are beginning the week with caution amid tensions in Washington and important economic events on the horizon. Amid "phase two" tax cut talk in Washington, President Trump lashed out at Special Counsel Robert Mueller following the weekend firing of Deputy FBI Director Andrew McCabe. Lawmakers are also expected to unveil a spending bill today that would fund the government until October as investors count down to this week's Fed meeting and EU Brexit Summit.

Economy

Washington has opposed the EU's plans for a levy on digital revenues, while Brussels published a list of 200 U.S. products that would be targets for higher duties if it failed to secure an exemption from U.S. metal tariffs. According to a draft proposal by the European Commission, large digital companies operating in the EU, such as Alphabet (GOOG, GOOGL), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR), could face a 3% tax on their gross revenues based on where their users are located.

Steel and aluminum users that depend on imported products not available from U.S. producers may have to wait up to 90 days for an exclusion from the Trump administration's new tariffs. "The request should clearly identify, and provide support for, the basis upon which the exclusion is sought," according to a Commerce Department document. The tariffs are expected to go into effect on March 23.

Federal borrowing nearly doubled during the presidency of Barack Obama, and it has continued to rise under President Trump. According to the U.S Treasury, the national debt exceeded $21T for the first time this past week, a little more than six months after it reached $20T on Sept. 8. It comes after Congress and Trump passed a debt limit suspension in February, allowing unlimited borrowing until March 1, 2019.

China has elevated a key confidante of President Xi as part of a broad reshuffle of government positions that now mostly consist of his Communist Party allies. Yi Gang, a vice governor of the PBOC, has been nominated to replace Zhou Xiaochuan, who has run China's central bank for more than 15 years. He has pledged to follow "prudent" monetary policy, promote reform and maintain financial stability.

Representatives of North Korea, South Korea and the United States are reportedly meeting in Finland for talks on denuclearization. So-called "track 1.5 talks" bring together a mixture of current government officials and nongovernmental experts. The gathering comes amid a flurry of recent diplomatic activity before an expected meeting between President Trump and Kim Jong-un by the end of May.

Russian President Vladimir Putin won re-election by a wide margin Sunday, extending his rule amid an escalating confrontation with the West. The Kremlin's longest-serving leader since Joseph Stalin scored almost 77% of the vote, putting him on track for a new six-year term. The landslide victory comes despite a stagnating Russian economy that follows the longest recession in two decades.

Russia has also ordered the expulsion of 23 British diplomats in response to a similar move by the U.K. government, which blames Moscow for a nerve agent attack on a former spy and his daughter. In further retaliation, Moscow decided to close the British Council in Russia and withdraw permission for Britain to open a consulate in St. Petersburg.

President Trump is set to unveil his Initiative to Stop Opioid Abuse in New Hampshire, which will seek to cut opioid prescriptions by a third over the next three years, as well as the death penalty for some drug traffickers. While Congress recently appropriated $6B to combat the epidemic, today's plan will lay out how the administration believes that money should be spent. According to the CDC, opioids were involved in more than 42,000 overdose deaths in 2016.

Stocks

Several Apple screen suppliers traded sharply lower overnight, including Samsung (OTC:SSNLF), Sharp (OTCPK:SHCAF), LG Display (NYSE:LPL) and Japan Display (OTCPK:JNNDF), following a report from Bloomberg stating the tech giant was making displays of its own. Apple (AAPL) has made a "significant investment in the development of next-generation MicroLED screens" at a facility near its California headquarters, but consumers will "probably have to wait a few years before seeing the results."

Following similar action by Facebook (FB) and Google (GOOG, GOOGL), Twitter (TWTR) is set to be the next to bar a range of advertisements for cryptocurrencies. The ban would apply to ads for initial coin offerings, token sales and wallets, according to the report from Sky News, and may include ads for exchanges as well with limited exceptions.

Meanwhile, Mastercard is "very happy to look at" facilitating the use of cryptocurrencies, but only as long as those virtual currencies are issued by central banks, FT reports. Mastercard (NYSE:MA) and its rival Visa (NYSE:V) both made it more difficult for users to buy bitcoin this year by reclassifying such purchases as "cash transactions," which attract higher fees.

The U.S. State Department and Coca-Cola (NYSE:KO) are launching a project using blockchain's digital ledger technology to create a secure registry for workers that will help fight the use of forced labor worldwide. This will "further increase transparency and efficiency of the verification process related to labor policies within our supply chain," said Brent Wilton, the company's global head of workplace rights.

Igniting a firestorm over how it manages third-party access to its users' information, Facebook (FB) was slammed by U.S. and British lawmakers over the weekend for not providing more information about its ties to Cambridge Analytica. The data firm, which worked for President Trump in the 2016 election, improperly kept Facebook (FB) user data for years despite saying the records were destroyed. FB -3.3% premarket.

Google is teaming up with retailers including Target (NYSE:TGT), Walmart (NYSE:WMT), Home Depot (NYSE:HD), Costco (NASDAQ:COST) and Ulta Beauty (NASDAQ:ULTA) on a new program called Shopping Actions, Reuters reports. In exchange for search listings and linking to loyalty programs, the companies will pay Google (GOOG, GOOGL) a piece of each purchase. According to analysts, the current default choice for many consumers is a Google search that ends with a transaction on Amazon (AMZN).

Alibaba is investing an extra $2B in Southeast Asian e-commerce firm Lazada (Private:LZDA) and tapped one of Alibaba's 18 founders, long-time executive Lucy Pen, to take over as chief executive. The region "is a key part of Alibaba’s global growth strategy," Alibaba (NYSE:BABA) said in a statement. It held an 83% stake prior to the investment, which now totals $4B after a $2B infusion over the past two years.

In the midst of a turnaround that hopes to achieve same-store sales growth, Macy's (NYSE:M) detailed some new app experiences at the ShopTalk conference in Las Vegas. The company will roll out a mobile checkout option at every location by the end of the year and announced the expansion of a successful virtual reality pilot for furniture to 60 stores by this fall.

UPS's entire central London fleet will soon be made up of electric vehicles, marking the "beginning of the end" of what the company called reliance on the internal combustion engine. The new "intelligent smart grid" from UPS will stagger when delivery trucks charge, solving the problem of needing to recharge a large number of vehicles simultaneously without having to pay for an expensive power supply upgrade.

The NHTSA is opening a probe into why some air bags failed to deploy in Hyundai (OTCPK:HYMLF) and Kia (OTCPK:KIMTF) vehicles after crashes in which four people were reportedly killed and another six injured. The agency is specifically reviewing 425,000 2012-2013 Kia Forte and 2011 Hyundai Sonata cars, but also said it will determine if any other manufacturers used similar air bag control units.

General Dynamics intends to proceed with its tender offer to acquire all outstanding shares of CSRA for $40.75 per share in cash, or a total of $9.6B, despite CACI's unsolicited stock and cash offer of $44 per share. General Dynamics (NYSE:GD) said it had secured all necessary regulatory approvals and has the funding in place to complete the transaction in early April. CACI +2.1% premarket

Today's Markets

In Asia, Japan -0.9%. Hong Kong flat. China +0.4%. India -0.8%.
In Europe, at midday, London -1.3%. Paris -0.7%. Frankfurt -1%.
Futures at 6:20, Dow -0.6%. S&P -0.5%. Nasdaq -1.4%. Crude -0.4% to $62.15. Gold -0.1% to $1312.80. Bitcoin +0.3% to $8223.
Ten-year Treasury Yield +1 bps to 2.86%