* Democrats expected to accept GOP offer to push debt deadline to December
* CDC director says US at risk of severe flu season this year
* Biden and Xi agree on holding a US-China virtual summit
* Fed Chair Powell’s renomination at risk amid new political risks
* Natural-gas prices pull back as Russia agrees to boost supplies to Europe
* Analysts warn that Europe becoming hostage to Russia over energy supplies
* World’s first malaria vaccine approved for use in Africa
* GM predicts its transition to all-electric vehicle lineup will boost sales
* US companies added workers at fastest pace in three months in September:

Finding compelling slices of global markets to overweight isn’t getting any easier. After an extended run higher in much of the world’s risk assets, the low-hanging fruit has been picked. But there’s always relatively attractive markets. All the usual caveats apply, of course, but beggars can’t be choosy.

As an example, consider a new column of data — Spread — that’s now part of the periodic return estimates for the major asset classes on these pages (see this introduction for background). The basic idea is the new addition to the numbers is to identify markets with trailing 10-year returns that deviate substantially from the performance forecasts (based on averaging three models, which are defined below). The logic: If asset x has a trailing return substantially below the expected return, there’s a case for overweighting (and vice versa).

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The outlook for this month’s third-quarter GDP report continues to edge down, based on a set of nowcasts. The Oct. 28 release from the Bureau of Economic Analysis remains on track to report a solid gain in output, but today’s update reflects a mild but ongoing trend of sliding estimates.

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* US recession looms if Congress doesn’t raise debt ceiling, warns Treasury Sec.
* Biden reluctantly agrees to downsize Democrats’ ambitious budget proposal
* Taiwan-China tensions at ‘worst in 40 years,’ says Taiwan’s defence minister
* Rebounding imports drive US trade deficit to new record in August
* New Zealand raises interest rates — first hike in seven years
* German factory orders plunged in August
* Global economic growth ticked up in September via PMI survey data
* US business growth posted softest growth in 9 months via Sep survey data
* Healthcare was fastest-growing US sector (again) in September via survey data
* ISM Services Index continued to indicate strong growth for sector in September:

Risk-adjusted performance continued to rise in September for the Global Market Index (GMI), an unmanaged, market-value-weighted portfolio that holds all the major asset classes (except cash). But the widespread losses in markets last month suggest that GMI’s trailing 10-year Sharpe ratio may have peaked for this cycle.

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* Sen. Majority Leader Schumer schedules debt-ceiling vote for Wednesday
* Sen. Minority Leader McConnell warns he won’t cooperate on raising debt ceiling
* Chinese military aircraft enter Taiwan’s air defence zone for fourth straight day
* White House warns China over its provocations against Taiwan
* New signs of stress emerge in China’s property market
* Oil near 3-year highs after OPEC+ rejects plan for big production increase
* US factory orders rose for a fourth straight month in August:

The Global Market Index (GMI) fell in September from the previous month, dipping to 5.9% and reversing an upward trend in recent months. The new estimate reflects a long-run forecast for performance over the “risk-free” rate, according to a risk-based model (details below).

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* Dems will continue to struggle this week over fraying unity on Biden agenda
* Broader signs of inflation pressures starting to emerge
* Japan elects new prime minister: Fumio Kishida
* US auto sales plunged over past 3 months due to chip shortages
* Huge leak of offshore data shows tax dodges of rich and powerful
* China raises pressure on Taiwan with surge of provocative military flights
* Trading halted in shares of Evergrande, the troubled property developer in China
* US 60/40 stocks/bonds benchmark suffered rare loss in September
* Key inflation metric monitored by Fed rose to 30-year high in August
* ISM Mfg Index rose in September, signaling strongest growth since May
* US consumer spending rebounded sharply in August:

● Wireless Wars: China’s Dangerous Domination of 5G and How We’re Fighting Back
Jonathan Pelson
Summary via publisher (BenBella Books)
As the world rolls out transformational 5G services, it has become increasingly clear that China may be able to disrupt—or even access—the wireless networks that carry our medical, financial, and even military communications. This insider story from a telecommunications veteran uncovers how we got into this mess—and how to change the outcome. In Wireless Wars: China’s Dangerous Domination of 5G and How We’re Fighting Back, author Jon Pelson explains how America invented cellular technology, taught China how to make the gear, and then handed them the market. Pelson shares never-before-told stories from the executives and scientists who built the industry and describes how China undercut and destroyed competing equipment makers, freeing themselves to export their nation’s network gear—and their surveillance state. He also reveals China’s successful program to purchase the support of the world’s leading political, business, and military figures in their effort to control rival nations’ networks.

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• Small-cap stocks and commodities continue to outperform
• All our strategy benchmarks take a hit

Small-cap stocks and commodities rallied this week: Otherwise, it was a bust for our world-spanning global ETF opportunity set for the trading week through Friday, Oct. 1. For details on all the strategies and metrics in the tables, see this summary.

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