The Dow is struggling to stretch its eight-session winning streak into another day as the 10-year Treasury note pokes its yield back above 3%. Traders are also bracing for readings on retail sales and the housing market, as well as some speeches from Fed officials. Further dampening investors' sentiment are comments on the gap seen in trade talks between the U.S. and China (see below).

Economy

Washington and Beijing are still "very far apart" on trade, U.S. Ambassador to China Terry Branstad announced as trade talks kick off today between the world's two largest economies. The Trump administration wants a timetable on how China will open up its markets to U.S. exports, and meet pledges with regards to the insurance and financial services sector, as well as reduce auto tariffs.

MSCI has released a list of 234 Chinese stocks that it will include in its key indexes from next month, capping a year-long process that is likely to attract billions of dollars into China's markets. The initial batch of companies will have a 0.39% weighting in MSCI's Emerging Markets Index (ETF: EEM) and a 1.3% weighting in the MSCI China Index (ETF: MCHI). The news comes amid the monthly release of Chinese business activity: Factory output grew 7% in April, while fixed-asset investment expanded 8.4% and retail sales rose 9.4%.

Voters are heading to the polls in crucial party primaries in Pennsylvania, a state that has become central to claiming control in the U.S. House of Representatives. Politics were thrown into turmoil earlier this year when the Pennsylvania Supreme Court found that the current congressional districts had been unconstitutionally tailored to favor Republicans and redrew the map to make some districts more competitive.

Italy's 5 Star Movement and the League are seeking more time to complete a pact to form a governing coalition and find a prime minister suitable to both parties. Key points include scrapping an unpopular pension reform, tougher rules on immigration, tax cuts and renegotiation of EU treaties. If the deal falls apart, it would pitch Italy into fresh elections, only months after elections in March.

Argentina's peso has fallen to a record low, tumbling almost 7% to 25 per U.S. dollar, as the the IMF said it won't set any exchange-rate targets for a stand-by arrangement. That pushes the currency's decline this year to 26%, the worst in emerging markets. President Mauricio Macri spoke by phone with President Trump on Monday, and said the U.S. supported his discussions with the IMF.

Turkey's lira is also in trouble. The currency slid to its weakest level ever against the dollar, down 13% YTD to 4.3990, after President Erdogan revealed plans to take greater control of the economy. He said the central bank was independent, but it cannot ignore executive signals following the switch to a new presidential system next month that will grant him sweeping authority.

Malaysian Prime Minister Mahathir Mohamad plans to remain in power for one or two years following his shock election win, but expects criminal charges to be filed against former leader Najib Razak following an investigation into the 1MDB scandal. Questions over how long he plans to stay in power risk undermining an agenda that includes cutting spending, scrapping a goods-and-services tax and reviewing large infrastructure projects.

Stocks

Vodafone -3% premarket after CEO Vittorio Colao said he'll step down in October after 10 years of major dealmaking and reshaping the company into a digital communications powerhouse. Nick Read, finance director since 2014, will replace him. The announcement came as Vodafone (NASDAQ:VOD) reported an impressive set of results, including major organic growth, for the fourth quarter.

Seattle's city council has approved new levies on the city's biggest companies amid a local economic boom that has driven up real estate costs at the expense of the working class. With the head tax coming out less than originally proposed - roughly 14 cents per employee per hour worked within the city - Amazon (NASDAQ:AMZN) said it would go ahead with a major downtown office building, called Block 18, that it earlier had put on hold.

Two more Wynn board members have resigned - including one who was investigating sexual misconduct allegations against former CEO Steve Wynn - ahead of the company's annual meeting tomorrow. "The move represents a good step towards establishing the 'New Wynn Resorts' (NASDAQ:WYNN), but there remains more work to be done," said co-founder Elaine Wynn, the company's largest shareholder, who had pressed for additional board changes.

Described as the "nuclear option," CBS has filed a lawsuit to reduce the voting power of controlling shareholder National Amusements, aiming to loosen the control the Redstones have held over CBS for nearly two decades. It's the next step in a long-running power struggle between Shari Redstone and CEO Leslie Moonves, who has resisted her efforts to merge CBS and Viacom (NYSE:VIA) since 2016.

The Supreme Court ruled Monday that New Jersey can legalize sports betting in what could be a landmark case in the gaming industry. It clears the way for states, if they choose, to allow gambling on athletic events by striking down the 1992 Professional and Amateur Sports Protection Act, a federal law that said states couldn't "sponsor, operate, advertise, promote, license, or authorize" sports gambling. Related tickers: CHDN, CZR, BYD, MGM, DDE, NYNY, PENN, GDEN, PNK, SGMS, ERI, FLL, DRAFT, DUEL

Following years of financial crisis due to accounting scandals and Westinghouse woes, Toshiba (OTCPK:TOSYY) expects net income to jump 33% to ¥1.07 ($9.75B) this year thanks to the planned $18B sale of its memory chip unit. Although the deal hasn't yet been approved by Chinese regulators, with a deadline approaching on May 28, Toshiba still plans on selling the division and returning the benefits to shareholders.

Tim Cook has finally shed some light on last month's meeting with President Trump, stating the discussion focused on the importance of trade and how cooperation between two countries can boost the economy more than nations acting alone. "It's true that not everyone has been advantaged," the Apple (NASDAQ:AAPL) CEO told Bloomberg TV. "But I felt that [Chinese] tariffs were not the right approach there, and I showed him some more analytical kinds of things to demonstrate why."

The California Department of Motor Vehicles has confirmed that Apple (AAPL) has 55 self-driving vehicles and 83 drivers permitted to test on the state’s roads. The company had about 45 self-driving vehicles in January. Apple hasn't yet applied for a separate driverless testing permit that would allow for testing without a person in the car, but the California DMV began issuing that type of permit in April.

FedEx CEO Fred Smith is calling blockchain the "next frontier" for the logistics industry due to the potential for huge benefits in supply chain data management. FedEx (NYSE:FDX) has already been testing the technology to track valuable cargo and is working with the "Blockchain in Transport Alliance" to set industry standards. Unless a company embraces new technologies such as blockchain, it will face "probably, at some point, extinction," Smith added.

The Trump administration is weighing expanding Medicare's ability to negotiate drug costs, according to Health and Human Services Secretary Alex Azar, by giving private payers a role in setting the price of medicines. The details add to the plan unveiled on Friday by President Trump, which assailed health insurers and pharmacy benefit managers for pocketing negotiated rebates rather than passing the savings on to the consumer. Related tickers: CVS, RAD, WBA, ESRX, UNH, ABC, MCK, CAH, OMI

Today's Markets

In Asia, Japan -0.2%. Hong Kong -1.2%. China +0.6%. India flat.
In Europe, at midday, London +0.3%. Paris +0.1%. Frankfurt -0.1%.
Futures at 6:20, Dow -0.2%. S&P -0.1%. Nasdaq -0.1%. Crude +0.7% to $71.45. Gold -0.7% to $1308.90. Bitcoin +1.4% to $8794.
Ten-year Treasury Yield +2 bps to 3.02%

Today's Economic Calendar

8:30 Retail Sales
8:30 Empire State Mfg Survey
8:55 Redbook Chain Store Sales
10:00 Business Inventories
10:00 NAHB Housing Market Index
1:10 PM Fed's Williams Speech
4:00 PM Treasury International Capital