With about five months to go before Brexit, many will be watching a key summit today in Brussels between U.K. and European leaders. But because there is still no deal over how to solve the Irish border question, the most likely scenario is negotiations continuing over the coming weeks. Tensions are high as businesses, consumers and investors on both sides of the fence are concerned that more delays won't leave enough time to solve outstanding differences and ratify an exit agreement in parliament.

Economy

Volatility is racking the markets as traders struggle to adapt to a world of reduced central-bank stimulus. Following a sharp rally on Tuesday, U.S. stock futures are pointing to a red open, ahead of more earnings and minutes from the FOMC's latest meeting in September. Some say the turbulence reflects the early stages of a rotation, or reallocating resources away from assets whose gains now appear at risk.

Just weeks after the retooling of NAFTA, the U.S. Trade Representative’s office has informed Congress it intends to open trade talks with the EU, U.K. and Japan, aiming to "address both tariff and non-tariff barriers and to achieve fairer, more balanced trade." Under fast-track rules, the U.S. cannot start trade talks until 90 days after notifying Congress.

China's holdings of U.S. Treasuries fell for a third consecutive month in August, dropping $6B to $1.165T, as the Asian nation struggled to prevent the yuan from weakening amid tensions with America. Beijing's sale of Treasuries is sometimes viewed as a response to the ongoing trade war, especially after China’s ambassador to the U.S. signaled in March his country could scale back purchases of the debt to retaliate against tariffs.

The U.S. is back as the most competitive country in the world, regaining the No. 1 spot for the first time since 2008 in an index produced by the World Economic Forum. America's "vibrant" entrepreneurial culture, "strong" labor market and financial system "are among the several factors that contribute to making the U.S.' innovation ecosystem one of the best in the world," said the organization that produces the Davos conference.

Doubling down... "My biggest threat is the Fed," President Trump told Fox Business. "The Fed is raising rates too fast, and it's too independent." The central bank has jacked the Fed Funds rate three times this year, and showed no sign of backing away from a fourth in September. The "dots" point to another three hikes in 2019.

Passing a crucial market test, Turkey made a comeback in the international bond markets after receiving three times the bids for its $2B dollar-denominated bond. This means that companies and banks in the country now have greater access to foreign capital markets, allowing them to borrow at better rates. It follows a roller-coaster ride for Turkish assets over the last few months.

Stocks

Netflix +10% premarket after the streaming giant posted Q3 results that blew Wall Street estimates out of the water. The company reported 1.09M domestic streaming additions vs. 674K consensus and guidance for 650K, while international streaming additions were up 5.87M vs. 4.46M consensus and guidance for 4.35M. The record number brought Netflix's (NASDAQ:NFLX) customer base to 137M worldwide.

Pot stocks are on watch this morning as legal recreational marijuana sales begin in Canada, with provinces handling their own regulations for sale, growth and taxation. Adults will be allowed to carry and share up to 30 grams of legal marijuana in public, cultivate up to four plants in their households and make products such as edibles for personal use. Canadians can also order weed through the mail. Related: TLRY, OTC:CRON, OTC:CGC, MJ

Minnesota's attorney general has filed a lawsuit accusing drug manufacturers Sanofi (NYSE:SNY), Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY) of deceptively raising costs of insulin, which has more than tripled in price since 2002. The suit alleges that companies fraudulently set artificially high fees for their products while offering rebates to pharmacy benefit managers in exchange for them covering the drug on behalf of health plans.

Khashoggi fallout... Softbank (OTCPK:SFTBY) is "anxiously looking at what is happening with the news" of Saudi journalist, but it's "business as usual" at the companies backed by its nearly $100B Vision Fund (which is almost half financed by Saudi Arabia). "I think we have to find out what happened first," President Trump told the Associated Press. "Here we go again with, you know, you're guilty until proven innocent. I don't like that."

YouTube experienced a major outage overnight as users complained that they were unable to access the website. A map on DownDetector showed that users in the U.S., Brazil, Japan, parts of Australia, Southeast Asia and Western Europe were affected. The service is now back online, although YouTube (GOOG, GOOGL) did not explain what caused the outage.

Uber is considering selling minority stakes and spinning off its costly self-driving car unit as the ride-hailing firm tries to address rising cost pressures ahead of its IPO set for 2019, FT reports. UBER would retain operational control and majority ownership of its Advanced Technologies Group, but external partners could share the cost of developing and eventually commercializing autonomous driving technology.

Tesla has acquired an 864,885-square meter plot in Shanghai's Lingang area for its first Chinese factory, which is expected to produce its first cars in three years. The facility will initially have capacity for about 250K vehicles and battery packs per year, and plans to eventually double that. Funding will mostly come from local debt, and Tesla's (NASDAQ:TSLA) own investment "will not start in any significant way until 2019."

Following a similar deal in Huizhou last month, Exxon Mobil (NYSE:XOM) is in talks to build a $7B ethylene plant in the Chinese city of Zhoushan, which would have annual production capacity of 1.5M-1.8M tonnes. The investment comes as China sets out to complete the biggest expansion in petrochemical production in its history, with at least 13 ethylene complexes already planned in the next five years.

According to an SEC ruling, the NYSE (NYSE:ICE) and Nasdaq (NASDAQ:NDAQ) did not justify previous market data fee increases, in a landmark move that adds pressure on stock exchanges over the cost of trading data. The decision will be welcomed by brokers, who have been engaged in a long-running battle against the exchanges over market data fees.

Fujifilm has won an appeal in its legal battle with Xerox (NYSE:XRX), with a U.S. court overturning preliminary injunctions requested by activist investors that had blocked a planned merger. The ruling could give Fujifilm (OTCPK:FUJIY) leverage to bring Xerox management back to the negotiating table after the two companies agreed in January to a complex deal that would have combined Xerox into their Asia joint venture and given Fujifilm control.

Target is adding nearly 250K sq. ft. of new space for toys across more than 500 stores and remodeling toy departments in more than 100 outlets, in an effort to snap up market share left by the liquidation of Toys 'R' Us. Target's (NYSE:TGT) moves come at a time when rival Walmart (NYSE:WMT) is also trying to win more toy sales by permanently expanding space to stock toys in 235 stores and add more merchandise.

Tuesday's Key Earnings

BlackRock (NYSE:BLK) -4.4% as Q3 net inflows declined.
CSX (NYSE:CSX) +0.5% AH topping expectations.
Domino's Pizza (NYSE:DPZ) -4.9% after a comp sales miss.
Goldman Sachs (NYSE:GS) +3% following "solid" Q3 results.
IBM (NYSE:IBM) -4.7% AH on a revenue miss, server weakness.
J&J (NYSE:JNJ) +2% beating estimates, lifting outlook.
Morgan Stanley (NYSE:MS) +5.7% on trading, underwriting strength.
Netflix (NFLX) +10.9% AH on record subscriber growth.
United Continental (NASDAQ:UAL) +5.1% AH giving a rosier outlook.
UnitedHealth (NYSE:UNH) +4.7% raising guidance.

Today's Markets

In Asia, Japan +1.3%. Hong Kong +0.6%. China closed%. India -1.1%.
In Europe, at midday, London +0.2%. Paris flat. Frankfurt -0.3%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq -0.4%. Crude -0.5% to $71.53. Gold -0.1% to $1229.40. Bitcoin -0.6% to $6493.
Ten-year Treasury Yield +1 bps tp 3.17%

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Housing Starts
10:30 EIA Petroleum Inventories
12:10 PM Fed's Reserve Gov. Lael Brainard Speech
2:00 PM FOMC minutes