10 things you need to know before the opening bell

Here is what you need to know.

The S&P 500 is at an all-time high. Monday’s 0.3% gain was enough to propel the S&P 500 to its best close on record. The index finished Monday’s session at 2137.16, edging out its previous intraday record of 2,134.72. “This new high breakout in US big cap stocks has defiantly bucked a dour global mood and, based on historical precedent, should be respected,” wrote Tom Leveroni at Nautilus Research. “We know of no other technical signal as robustly bullish for a longer-term horizon.”

The pound is rallying on confirmation Theresa May will be Britain’s next prime minister. Theresa May has been named the new leader of the Conservative Party, and will take over as prime minister on Wednesday. That will mark the end of David Cameron’s run as Britain’s prime minister, a position he has held since 2010. The British pound is stronger by 1.3% at 1.3163.

Italy faces 2 lost decades. The International Monetary Fund has released a new report suggesting the Italian economy will be stagnant until at least 2025. “On current projections, the economy is not expected to return to its pre-crisis (2007) output peak until the mid-2020s, implying nearly two lost decades, a growing income gap with euro zone partners, and a protracted period of balance sheet vulnerability,” the report said. Because Italy is the third largest economy in Europe, and the eighth largest economy in the world, the worry is that a stagnant Italy could be a drag on other parts of Europe, and then possibly the world.

China took a big hit in the South China Sea. The Hague has ruled in favour of the Philippines’ claim that China’s “nine-dash line,” a boundary for its ownership claim to 85% of the South China Sea, has no legal merit. The area, which is one of the most disputed in the world, has seen Vietnam, Malaysia, Brunei, the Philippines, Taiwan, and China all stake claims. “We won’t accept any of their so-called materials, no matter what they are,” Foreign Ministry spokesman Lu Kang told reporters ahead of the decision.

Tesla is reportedly being investigated for violating securities law. According to the Wall Street Journal, a person familiar with the matter said the US Securities and Exchange Commission is looking into the possibility that Tesla violated securities fraud by failing to disclose to investors a fatal crash involving the Autopilot feature. “Tesla has not received any communication from the SEC regarding this issue,” a Tesla spokesperson told Business Insider. The company knew of the death on May 7 and then raised $2 billion through a stock sale on May 18. The fatal crash became public at the end of June.

Alcoa opened earnings season with a beat. The aluminium giant earned an adjusted $0.15 per share, topping the Bloomberg consensus of $0.09. Revenue fell 10.2% to $5.30 billion, but that was still ahead of the $5.27 billion that Wall Street was expecting. While total alumina production and shipments were down, the results were helped by gains in areas like aerospace. “In the face of a transforming aerospace market, we moved quickly to bring our costs down while capturing new opportunities,” CEO Klaus Kleinfeld said in the earnings statement.

Seagate is cutting 14% of its workforce. The data storage company said it will lay off 6,500 employees by the end of its fiscal year 2017. According to a statement, the layoffs will result in pretax charges of about $164 million. Additionally, Seagate upped its revenue forecast to $2.65 billion for the fourth quarter, topping both its original estimate ($2.3 billion) and Wall Street’s expectation ($2.34 billion). Shares were up as much as 11% following Monday’s closing bell.

Stock markets around the world up. Spain’s IBEX (+1.9%) leads the gains in Europe after Japan’s Nikkei (+2.5%) set the pace in Asia. S&P 500 futures are higher by 9.75 points at 2140.00.

Earnings reporting is light. Fastenal will release its quarterly results ahead of the opening bell.

US economic data trickles out. JOLTS Job Openings will cross the wires at 10 a.m. ET. The US 10-year yield is higher by five basis points at 1.48%.

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