“The greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country,” as President Trump described it, triggered a broad rally in U.S. stocks on Friday. The Dow












DJIA, -0.06%










and S&P












SPX, -0.14%










have kicked off trading on a weaker note, with buyers wary amid a report China wants more talks.

Indeed, our call of the day, suggests last week’s bullish reaction may have been overdone.

Morgan Stanley












MS, -0.14%










says those who are banking on this trade deal wrapping up are getting ahead of themselves and that the deal with China is an “uncertain” arrangement at best, according to a note from strategists Michael Zezas and Meredith Pickett.

“There is not yet a viable path to existing tariffs declining, and tariff escalation remains a meaningful risk,” the bank wrote. “Thus, we do not yet expect a meaningful rebound in corporate behavior that would drive global growth expectations higher.”

Nevertheless, investors seem to be focusing on the silver lining. Trump said Washington will suspend a tariff hike planned this week on $250 billion of Chinese goods, in return for China agreeing to buy as much as $50 billion of American farm goods.

Future hikes remain in place, though.

For real progress to be made, Morgan Stanley says it will need to see more progress on issues like enforcement and intellectual-property protections.

“Until such evidence is available, we must conclude that this pause is more ‘uncertain’ than ‘durable,’” the strategists wrote.

The chart

Kevin Muir, strategist at East West Investment Management, calls this illustration from Crescat Capital’s Tavi Costa his “new favourite chart.”

“Tavi’s chart illustrates clearly the market is completely complacent about inflation,” Muir wrote on Twitter












TWTR, -1.59%










 . “Yeah, I know the deflationists will argue that it will resolve itself with a GFC-type-bust. Maybe, but true financial crises occur when something happens that NO-ONE-BELIEVES-CAN-HAPPEN.”

The buzz

While traders are understandably preoccupied with the trade deal, the third-quarter earnings season kicks off this week with the first reports expected Tuesday from big banks JPMorgan












JPM, -0.03%










 , Goldman Sachs












GS, -0.41%










and Citibank












C, -0.48%










 , along with fellow Dow components Johnson & Johnson












JNJ, -0.41%










  and UnitedHealth Group












UNH, -0.14%










 .

Away from the markets, Gordon Sondland, the U.S. ambassador caught up in the latest White House controversy, is expected to tell Congress his text message reassuring another envoy that there was no quid pro quo in their interactions with Ukraine was based solely on what President Trump told him. Stay tuned.

There’s lots of build-up heading into Tuesday night’s Democratic presidential debate, and with Elizabeth Warren challenging Joe Biden for the front-runner label, the backdrop is significantly different from prior discussions.

The stat

12.4% — That’s how much Brown University’s $4.2-billion endowment rallied in fiscal 2019. No other Ivy League school managed to beat the S&P 500’s












SPX, -0.14%










10.4% over the same time period, Barron’s reported.

The economy

Banks are closed for Columbus Day, and there are no economic releases on the schedule. Notable reports coming up this week include retail sales figures and September housing starts, due out Wednesday and Thursday, respectively.

Random reads

Oversubscribed! The utter failure of cutting the cord.

Ken Fisher is paying the price for his inappropriate comments.

Alex Trebek gets real about his situation.

Should we soak the rich? Absolutely!

This dark video was shown to a bunch of Trump supporters at the president’s Miami resort last week, according to the New York Times.

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