10 things you need to know before the opening bell

Here is what you need to know.

The US and Canada reach an agreement on NAFTA. The agreement, which came hours before a self-imposed deadline, will allow American farmers more access to Canada’s dairy market, keep the Chapter 19 dispute resolution in place, and give Canada some assurances that future tariffs on imported cars and auto parts will not hit the country. As part of the deal, NAFTA will be renamed the US-Canada-Mexico Agreement.

The Mexican peso and the Canadian dollar are rallying. The peso trades up 0.7% at 18.5454 per US dollar, while the Canadian dollar is higher by 0.4% at 1.2804 per US dollar.

Elon Musk settles fraud charges with the SEC. Tesla CEO Elon Musk will neither admit nor deny the allegations that he misled investors with an August tweet, he will step down as the company’s chairman for at least three years, and both he and his company will pay $US20 million fines.

Tesla’s stock soars. Shares of the electric-car maker are up more than 16%, at $US307.45, ahead of Monday’s opening bell.

The stock market is behaving unusually, and it could be signalling that the next big crash is near. “For a stock market supposedly driven by some of the best economic performance of the entire recovery, its leadership seems out of whack,” Jim Paulsen, the chief investment strategist at The Leuthold Group, wrote in a recent note to clients. “It might be worth paying attention to this oddity.”

A ‘blue sweep’ could pressure key parts of the stock market. While a Democratic takeover of both the House and the Senate is still not Morgan Stanley’s base case, the firm showed clients several polls that showed increased chances of the Democrats recapturing a Senate majority in the midterm elections and offered some recommendations for investors wanting to hedge their portfolios.

Facebook is facing a massive EU fine for its most recent data breach. The social-media giant could be fined as much as $US1.36 billion, or 4% of its annual revenue, under the European Union’s new privacy law, the General Data Protection Regulation, for the data breach revealed last week that affected about 50 million users.

Stock markets around the world are higher. China’s Shanghai Composite (+1.06%) led the gains in Asia, and Germany’s DAX (+0.71%) is out front in Europe. The S&P 500 is set to open up 0.65% near 2,932.

Earnings reports trickle out. Stitch Fix reports after markets close.

US economic data keeps coming. Markit US Manufacturing PMI is set for release at 9:45 a.m. ET, with construction spending and ISM Manufacturing to follow at 10 a.m. ET. US auto sales will be announced throughout the day. The US 10-year yield is up 3 basis points at 3.09%.

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