THE TICKER

Treasury Secretary Steven Mnuchin made a surprising admission: The deal with China that President Trump touted as the "greatest and biggest" actually needs work.

That's considered candor from a Trump ally who is practiced by now at toeing the president's line.

Mnuchin touted the phase-one deal Trump administration negotiators struck last week as "quite substantial" and "a fundamental agreement in principle," in a CNBC interview. But he offered this decidedly un-Trumpian assessment: That the matter remains “subject to documentation and there’s a lot of work to be done on that front.” 

By contrast, Trump has framed the fact the two sides didn’t actually spell out and sign a document sealing the agreement as a mere detail.  (See our rundown of the handshake agreement here.)

But Mnuchin’s version of the state of play bears even less resemblance to the one offered by the Chinese. “One word has been suspiciously absent from China’s media coverage of the trade talks with the United States over the past few days: deal,” my colleague Anna Fifield writes from Beijing. “There has been a ‘result,’ there has been ‘progress,’ but there has been no ‘deal.’ ” 

Or as official Chinese mouthpiece Xinhua put it, “This outcome is in line with the expectations of all parties. It took a step in the direction of resolving China-U.S. economic and trade issues, serves the interests of the Chinese and American people and is generally welcomed by the international community.”

The piece argued that “solving the structural problems in bilateral economic and trade relations over the years cannot be achieved overnight.”

Mnuchin insisted the two sides came to agreements on intellectual property protections, issues related to financial services, currency and foreign exchange, and structural concerns related to agriculture. But as Fifield notes, “the White House did not release a single fact sheet about any of those issues or how things would be changed.” And Chinese officials indicated they need to engage in another round of negotiations before committing to any terms on paper. 

Meanwhile, Mnuchin renewed the threat of another round of tariffs, telling CNBC that 15 percent import duties on roughly $160 billion of Chinese goods will still hit on Dec. 15 barring an agreement. "I have every expectation if there’s not a deal those tariffs would go in place, but I expect we’ll have a deal," he told CNBC. 

See Mnuchin's appearance on CNBC here: 

“Pardon us if we are confused, but the events of the last few days have been confusing,” High Frequency Economics Chief International Economist Carl Weinberg writes in a note, adding that “red flags are flying all around this alleged deal … This ‘deal’ — if indeed there really is one — obviously addresses only a small part of the laundry list of complaints the Trump administration has with Beijing.” 

Pantheon Macroeconomics Chief Economist Ian Shepherdson was harsher, calling the agreement a “twentieth of a deal … and even that is not yet certain.”

He wrote off as “trivial” the relief provided by the suspension of a tariff hike scheduled to hit this week. “It's possible that further negotiations over the next couple of months will change that, but for now the substance of this agreement is that China plans substantially to step up purchases of U.S. farm products, which it needed anyway, in return for the deferment of a tariff increase,” he writes in a note. “We remain of the view that a comprehensive deal will not be struck until after the 2020 election, and the economy will suffer in the meantime.”

Stocks fell as investors processed that the deal amounted to meaningfully less than the Trump administration’s billing: The S&P 500, Dow Jones industrial average and Nasdaq all shed 0.1 percent. The economic ripple effects of an underwhelming agreement could be worse: Morgan Stanley writes that employers who had been banking on a breakthrough may start laying off workers now that no such progress is evident

MARKET MOVERS

-- Earnings outlook dims as banks kick off reporting. CNBC's Jeff Cox: "Companies head into the third-quarter earnings reporting period with trouble behind, more hazards ahead and a muddied road map to guide the journey. As the season kicks into gear this week, S&P 500 firms are expected to report a 4.6% earnings decline over the same period a year ago, according to FactSet. If the period ends up with a negative number, that will make three quarters in a row, the first time that’s happened in three years.

"Investors never seem to focus on what’s in the rearview mirror as much as they do the outlook for what’s on the horizon. In this case, though, they’re likely to see the same thing: Profits weighed down by tariffs, economic weakness and geopolitical tumult that seems unlikely to go away anytime soon, despite the recent good news that the U.S. and China have reached at least the first phase of a trade agreement."

E.U., U.K. negotiators seek to reach agreement today. Bloomberg's Jonathan Stearns and Ian Wishart: "British negotiators submitted a revised set of Brexit plans to Brussels amid growing optimism that a deal could be struck this week. The new proposals are aimed at clarifying the U.K.’s proposed customs rules for Northern Ireland, two officials said. Talks will continue throughout the day in Brussels as the two sides try to agree on how far Northern Ireland will be detached from the EU’s customs union -- something that risks incurring the opposition of the Democratic Unionist Party, whose support will be vital for any deal to pass."

"I fear that's what we're headed into" here in America, warns the former Treasury secretary.
CNBC
The capital markets and global economy are caught in a feedback loop amplified by U.S. politics and the U.S. dollar. The question is how long investors will suffer.
WSJ

TRUMP TRACKER

TRADE FLY-AROUND:

— Trump raises tariffs, halts negotiations with Turkey over Syria: Trump "signed an executive order sanctioning Turkish officials, hiking tariffs on Turkish steel up to 50% and 'immediately' halting trade negotiations with the country, Vice President Mike Pence confirmed," CNBC's Kevin Breuninger reports.

"Trump had announced the order in a lengthy statement posted to Twitter earlier ... The retaliatory measures followed Trump’s decision to order the withdrawal of all U.S. troops from Syria’s northern border with Turkey, which has enabled Turkish forces to launch an offensive against the U.S.-allied Kurdish forces in Syria."

— WTO clears U.S. to impose Airbus-related tariffs: The World Trade Organization formally authorized the U.S. “to impose tariffs on up to $7.5 billion of imports of EU goods after an arbitrator’s decision over subsidies to planemaker Airbus,” Reuters's Stephanie Nebehay reports.

“The authorization was a formality after a WTO arbitrator awarded a record right to retaliate over illegal subsidies this month. It would only have been denied if all WTO members present voted against. The meeting lasted less than 20 minutes.”

POCKET CHANGE

Deutsche Bank spent big to win foothold in China. NYT's Michael Forsythe, David Enrich and Alexandra Stevenson: "Millions of dollars were paid out to Chinese consultants, including a business partner of the premier’s family and a firm that secured a meeting for the bank’s chief executive with the president. And more than 100 relatives of the Communist Party’s ruling elite were hired for jobs at the bank, even though it had deemed many unqualified.

"This was all part of Deutsche Bank’s strategy to become a major player in China, beginning nearly two decades ago when it had virtually no presence there. And it worked. By 2011, the German company would be ranked by Bloomberg as the top bank for managing initial public offerings in China and elsewhere in Asia, outside Japan... [Confidential documents show] Deutsche Bank’s troubling behavior in China was far more extensive than the authorities in the United States have publicly alleged. And they show that the bank’s top leadership was warned about the activity but did not stop it."

Libra attempts to move past high-profle exits. CNBC's Lauren Feiner: "Facebook’s embattled cryptocurrency project has just announced its 21 founding members, a group that lacks many of the high-profile companies that originally voiced support for the effort. The members, including Uber, Lyft and Spotify, met in Geneva, Switzerland, on Monday to sign onto the Libra Association charter, which will govern the libra cryptocurrency... 

"The project hit a major snag on Friday, when Visa, Mastercard, Stripe, eBay and Mercado Pago all said they will no longer be part of the Libra project, following PayPal’s decision to pull out earlier last week, and leaving PayU as the only remaining payments company on the council."

— Crises are nothing new for Boeing's new chairman: “Boeing Co.’s boardroom shakeup puts David Calhoun, a powerful behind-the-scenes figure, in position to control the aerospace giant’s response to the 737 MAX crisis, one of the most fraught episodes in the company’s history,” the Wall Street Journal's Andrew Tangel, Alison Sider and Miriam Gottfried report.

“Now an executive at the New York private-equity firm Blackstone Group Inc., Mr. Calhoun previously ran General Electric Co.’s airplane-engine business during the 9/11 terrorist attacks and ensuing downturn in the airline industry. He is credited with turning around the fortunes of Nielsen Holdings PLC when he was the market-research and measurement company’s chief executive. He later became chairman of Caterpillar Inc.’s board weeks after federal agents raided the heavy machinery maker’s Illinois headquarters.”

— The future of Barneys: “Barneys New York Inc. could get a new life inside Saks Fifth Avenue stores if a deal to buy the luxury retailer out of bankruptcy succeeds, according to people familiar with the situation,” the WSJ's Suzanne Kapner and Juliet Chung report.

“Authentic Brands Group LLC, owner of brands like Nine West and Aéropostale, is preparing a nearly $270 million bid for Barneys with plans to license the brand to Saks, the people said. Saks is in discussions to open Barneys departments in some of its stores and take over Barneys’ website. Authentic Brands, meanwhile, is in talks with Barneys landlords about keeping some stores open, the people said.”

— WeWork continues to open new locations amid struggles: “WeWork has opened almost as many new locations in the last 3-1/2 months as it did in the whole first half of this year, likely accelerating the speed with which the office-sharing company is burning through cash as increasingly hard-nosed investors scrutinize its prospects for going public,” Reuters's Herbert Lash and Carrie Monahan report.

“WeWork has only about $2.5 billion of cash on hand as of June 30, according to the prospectus that was issued in August. It will run out of money in the second quarter of next year if the company’s current trajectory doesn’t change, according to research by AllianceBernstein. Some media reports in recent days said it may run out of cash before the end of the year without a new lifeline.”

— Uber lays off 350 employees: “In his latest bid to reduce losses at Uber Technologies Inc., Dara Khosrowshahi fired about 350 employees, in what he said is the 'last wave' of workforce reductions,” Bloomberg News's Lizette Chapman reports.

“The cuts hit a handful of divisions, including self-driving car development and food delivery. Uber dismissed more than 800 employees over two rounds of cuts in July and September. Since a disappointing initial public offering in May, Uber’s stock price is down about 30%. Investors have expressed concerns about increased losses and slowing growth.”

NBA
Los Angeles Lakers star LeBron James took issue with Daryl Morey’s decision to post a message on Twitter in support of Hong Kong protesters, suggesting that the Houston Rockets GM did not properly consider the consequences of his political statement.
Ben Golliver

MONEY ON THE HILL

— Bloomberg is exploring a presidential run, again: "[Michael] Bloomberg, the billionaire former mayor of New York, has indicated to associates in recent weeks that Joe Biden’s recent struggles against Sen. Elizabeth Warren are making him rethink his decision to stay out of the 2020 Democratic primary. That’s according to people familiar with the discussions who spoke on condition of anonymity because the conversations were deemed private,” CNBC's Brian Schwartz reports.

“Bloomberg has signaled he’s 'still looking at' running for president, but people close him say that the only way he could even go down that path is if Biden’s fortunes suffer so much that he drops out before or during the early stages of the primary.”

If Congress eases marijuana banking laws, send thanks to Scotts Miracle-Gro.
Politico

OPINIONS

Benioff: We need a new capitalism. Via the NYT: "Capitalism, as we know it, is dead... To my fellow business leaders and billionaires, I say that we can no longer wash our hands of our responsibility for what people do with our products. Yes, profits are important, but so is society. And if our quest for greater profits leaves our world worse off than before, all we will have taught our children is the power of greed.

"It’s time for a new capitalism — a more fair, equal and sustainable capitalism that actually works for everyone and where businesses, including tech companies, don’t just take from society but truly give back and have a positive impact."

CHART TOPPER

Recession chances in the next year hit 27 percent. Bloomberg: "Bloomberg Economics created a model to determine America’s recession odds. Right now, the indicator estimates the chance of a U.S. recession at some point in the next year is 27%. That’s higher than it was a year ago but lower than before the last recession. There are reasons to keep a close eye on the economy but no need to panic yet."

DAYBOOK

Today:

  • Citigroup, Wells Fargo, United Airlines, Goldman Sachs, Johnson & Johnson, BlackRock, Charles Schwab and United Health are among the notable companies to report their earnings, per Kiplinger.

Upcoming Wednesday:

  • The House Financial Services Committee holds a hearing on the semi-annual review of the CFPB on Wednesday, director Kathy Kraninger will testify.
  • IBM, Bank of America, PayPal, Netflix and Alcoa are among the notable companies to report their earnings on Wednesday, per Kiplinger.
  • The House Budget Committee holds a hearing on improving economic resiliency on Wednesday.
  • A Financial Services Subcommittee holds a hearing on reauthorizing the terrorism risk insurance program on Wednesday.
  • The Joint Economic Committee holds a hearing on measuring income inequality on Wednesday.
  • The Brookings Institution holds an event on what happens when a big domestic bank fails on Wednesday.
  • Brookings also holds an event with European Central Bank economist Phillip Lane on Wednesday.

Thursday:

  • E*Trade, Morgan Stanley, Phillip Morris, Union Pacific, Skechers USA and BB&T Corp. are among the notable companies to report their earnings on Thursday, per Kiplinger.
  • The Senate Banking Committee holds its hearing on the CFPB’s report on Thursday, Kraninger will testify.
  • A Financial Services subcommittee holds a hearing on the impact of stock buybacks on Thursday.
  • A House Small Business subcommittee holds a hearing on opportunity zones and small businesses on Thursday.
  • The Tax Policy Center holds an event on cryptocurrency and tax administration on Thursday, featuring remarks by IRS chief counsel Michael Desmond.

Friday: 

  • Coca-Cola and American Express the notable companies to report their earnings on Friday, per Kiplinger.

THE FUNNIES

From The Post's Tom Toles:

BULL SESSION