Trading Day: US shutdown deadline is nigh

By Lewis Krauskopf

(Reuters) -TRADING DAY

Making sense of the forces driving global markets

By Lewis Krauskopf, Markets Reporter 

Jamie is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what's happening in markets.

The spectre of a U.S. government shutdown loomed large across asset classes, with the Tuesday midnight deadline for an agreement little more than 24 hours away.   

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Today's Key Reads

1. Wall Street left in the dark on U.S. data if shutdownhappens  2. Trump says U.S. to impose 100% tariff on movies madeoutside the country  3. 'Battlefield' maker Electronic Arts to go private inrecord-setting $55 billion LBO  4. U.S. SEC readies relief for asset managers to add ETFsto mutual funds  5. BOJ board's hawkish flex lowers bar for an October ratehike 

Today's Key Market Moves

* STOCKS: Wall Street indexes gain modestly, back nearrecord highs. China, Hong Kong stocks rise sharply, on signsthat Beijing's crackdown on price wars is starting to bearfruit. * SHARES/SECTORS: Energy sector slumps, tracking oil priceslower. Cannabis stocks jump after social media post by U.S.President Donald Trump over the weekend suggested potentialhealth benefits from the use of cannabidiol. * FX: U.S. dollar falls against major currencies, includingeuro and yen. * BONDS: U.S. 10-year Treasury yield dips, around 4.14%.Investors weighing shutdown risks. * COMMODITIES: Gold rises above $3,800 an ounce for thefirst time, as investors flock to the safe-haven asset.   

Today's Key Talking Points

* Shutdown bearing down

Investors were girding for a U.S. federal government shutdown that could disrupt a wide range of services as soon as Wednesday. Trump was meeting with congressional leaders on Monday in a last-ditch effort to reach an agreement.

Markets have largely shrugged off past shutdowns, but there were reasons to think this time could be different, with stocks trading at record highs and pricey valuations.

One issue is the delay of economic data in the event of a shutdown, starting with the U.S. employment report due on Friday, and whether such delays might muddy the ability for the Federal Reserve to make monetary policy decisions. 

* Nearly three-quarters done

Are we here already? Tomorrow marks the last day of the third quarter, which has been a bang-up period for U.S. stocks. The S&P 500 is up over 7% in the quarter, on track for its best third-quarter performance since 2020, while the tech-heavy Nasdaq Composite has gained nearly 11% in this quarter alone.

The benchmark S&P 500 is well on its way to a third straight year of solid double-digit percentage gains.

* L-B-Oh!

In a jolt to the M&A landscape, video game developer Electronic Arts has agreed to sell itself to a group of private investors in a deal that valued it at $55 billion. That would be the largest leveraged buyout in history, if completed.

The buyers of the videogame maker, whose titles include "Battlefield" and "Madden NFL," are Saudi Arabia's Public Investment Fund, Jared Kushner's Affinity Partners and private equity firm Silver Lake.

What could move markets tomorrow?

* U.S. consumer confidence (September) * U.S. JOLTS job openings (August)  * Japan retail sales (August) * Reserve Bank of Australia meeting

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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(By Lewis Krauskopf, Editing by Nia Williams)