China's back to business; US shutdown risk; Brexit bites

The Shanghai Composite gained 1.4% during the first day of trading in the Year of the Pig. The tech-heavy Shenzhen Composite added nearly 3%.

This is a big week in the trade conflict between the United States and China.

Trade talks between the countries have resumed, with US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin set to travel to Beijing for discussions later this week.

Trump has threatened to increase existing tariffs and enact a third wave of penalties on Chinese goods if the two sides can't broker a permanent truce before the March 1 deadline.

2. US government shutdown (round 2): The United States is facing another possible government shutdown later this week.

Budget talks between Democrats and Republicans ground to a halt over the weekend in a dispute over immigration policy.

The disagreement appeared to dash hopes that a deal could be reached by Monday to allow each chamber of Congress plenty of time to pass legislation well before a Friday deadline.

A repeat of the 35-day shutdown that started before Christmas could cause hundreds of thousands of federal workers to again be furloughed.

3. Brexit bites: The British economy grew 0.2% in the final quarter of 2018, compared to the previous three months, according to data published Monday.

The rate of expansion for the full year was 1.4%, down from 1.8% in 2017.

Economists said that uncertainty over Brexit was a major factor in the poor performance, with business investment falling for the fourth consecutive quarter.

With less than 50 days to go before Brexit, Prime Minister Theresa May has still not identified an exit proposal that is acceptable to both the European Union and UK parliament.

"As the drag on growth from Brexit uncertainty is only going to be bigger in [the first quarter], there's little hope of a rebound early this year," said Paul Dales, chief UK economist at Capital Economics.

The pound dropped 0.4% against the US dollar on Monday, slipping below $1.29.

4. Global market overview: US stock futures were pointing higher. European markets opened with gains, while stocks in Asia were mixed.

US stocks notched another win last week despite investor jitters over trade tensions. The Dow Jones industrial average closed down 0.3% on Friday, while the S&P 500 and the Nasdaq added 0.1%.

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5. Earnings and economics: Loews Corp (L), Meredith (MDP) and Restaurant Brands International (QSR) will release earnings before the open.

Moneygram (MGI) will follow after the close.

6. Coming this week:
Monday — UK monthly GDP; Japan markets closed
Tuesday — JOLTS report on US job openings; Under Armour (UA), Activision Blizzard (ATVI), Molson Coors (TAP), Groupon (GRPN) report earnings
Wednesday — US and UK inflation data; Cisco (CSCO), Hyatt (H), Yelp (YELP), Heineken (HEINY), report earnings
Thursday — US holiday retail sales; Coca-Cola (CCEP), CBS (CBS), Nvidia (NVDA) report earnings
Friday — Newell Brands (NWL) and Pepsi (PEP) report earnings

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