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DealBook Briefing: Trump’s Trade Truce Is Mired in Confusion

Credit...Tom Brenner for The New York Times

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It’s been only two days since President Trump and President Xi Jinping of China announced a truce in the trade war, but exactly what promises were made remains far from clear — and the calm may not last long.

The U.S. and China got what they wanted. Briefly. News of the pact helped China’s struggling renminbi climb to a two-month high. In the U.S., stocks rose, with the S&P 500 index up 1.1 percent. But Asian shares slid overnight, and futures tracking U.S. stocks suggest markets will be down when they open today, hinting that the restorative effects of the reconciliation may be short-lived.

Confusion appears to reign. Mr. Trump’s top advisers struggled to explain what the deal between the two leaders delivers, particularly with respect to plans for reduced tariffs on U.S. cars shipped to China. Larry Kudlow, Mr. Trump’s chief economic adviser, dialed down expectations, saying “I’ll call them ‘commitments’ at this point.” (The White House also corrected Mr. Kudlow, who stumbled over the start date for the truce. The real date is Dec. 1.)

Mr. Trump clearly plans to keep playing hardball. He has selected Robert Lighthizer, the U.S. trade representative, to take over from Steven Mnuchin, the Treasury secretary, for the next round of negotiations with China. Mr. Lighthizer, Alan Rappeport of the NYT writes, is “a longtime critic of China’s trade practices and has repeatedly cautioned Mr. Trump not to accept vague promises that fail to materialize.”

But there is some reason to be optimistic. As president of China, Mr. Xi is bound by few rules. But Jamil Anderlini of the FT notes that the Chinese leader has agreed to many concessions, and Andrew Browne of Bloomberg Opinion argues that could continue.

The yield curve is essentially the difference between interest rates on short-term government bonds and long-term government bonds. Every time since 1960 the yield curve has inverted — when long-term rates were lower than short-term rates — a recession followed.

Part of it just inverted.

More on what happened from Bloomberg:

The spread between 3- and 5-year yields fell to negative 1.4 basis points Monday, dropping below zero for the first time since 2007, and the 2- to 5-year gap soon followed.

Don’t hyperventilate. The 2- to 10-year yield, usually thought to be the better indicator of coming recessions, remains positive — even if it is at its narrowest level since 2007. And Brian Chappatta of Bloomberg Opinion puts the switcheroo into perspective:

It’s important to keep in mind the timeline between inversion and economic slowdowns — it’s not instantaneous. The yield curve from three to five years dipped below zero during the last cycle for the first time in August 2005, some 28 months before the recession began.

Even so, the news could signal to the Fed that, somewhere in the not-too-distant future, interest rates will need to be held steady, or even to be cut again.

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Credit...Jeenah Moon for The New York Times

The #MeToo movement could have helped Wall Street embrace diversity. But so far, it risks having the opposite effect, according to more than 30 senior executives interviewed by Gillian Tan and Katia Porzecanski of Bloomberg.

Many men on Wall Street are limiting their interactions with women. “No more dinners with female colleagues. Don’t sit next to them on flights. Book hotel rooms on different floors. Avoid one-on-one meetings. In fact, as a wealth adviser put it, just hiring a woman these days is ‘an unknown risk.’ What if she took something he said the wrong way?”

Some of the interviewees say they’re channeling Mike Pence. The vice president apparently avoids dining alone with any woman other than his wife.

This could end badly. Ms. Tan and Ms. Porzecanski note that the effect on Wall Street could be “in essence, gender segregation.” And Stephen Zweig, an employment lawyer with FordHarrison, told the pair that “if men avoid working or traveling with women alone, or stop mentoring women for fear of being accused of sexual harassment,” then they will “back out of a sexual harassment complaint and right into a sex discrimination complaint.”

The question-and-answer site announced late Monday that account information and private messages of around 100 million users may have been exposed.

What happened: Quora says its systems were compromised by “a malicious third party.” It claims to have discovered the data breach on Friday, and is still investigating what happened.

What’s affected: The company says names, email addresses, user IDs, encrypted passwords, user account settings and messages may have been stolen. The site does not collect credit card or social security numbers.

Why it matters: The breach comes on the heels of the hotel chain Marriott losing data from as many as 500 million guests to hackers. The Quora episode is smaller and less troubling — the Marriott hacking may even leave your passport at risk — but the pair serve as a reminder of how vulnerable our digital lives are, and why corporations must do more to keep them secure.

Oath, the owner of AOL and Yahoo, agreed to pay about $5 million to settle charges from the New York attorney general, which claimed that the media company’s online advertising business violated federal law on children’s privacy.

The penalty is the largest a company has paid for a case tied to the Children’s Online Privacy Protection Act of 1998, known as Coppa. It’s also the latest evidence of increased scrutiny of internet giants, writes the NYT’s Sapna Maheshwari:

In an age when online privacy has become a significant public concern, Coppa is one of the few federal regulations in place. It requires companies to obtain explicit, verifiable permission from parents before collecting, using or disclosing personal information from children under 13 or targeting them with ads tied to their online behavior.

There is strong bipartisan support in Congress for tougher privacy regulation on tech companies. If that materializes, we might see far more of these kinds of settlements.

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Credit...Bryan Anselm for The New York Times

A judge is considering halting CVS’s $69 billion acquisition of Aetna.

Things were going smoothly. CVS closed the deal to acquire the health insurer on Wednesday, after the Justice Department approved the merger in October. The two companies have already started their integration process, and the only major condition was that Aetna sell off its private Medicare drug plans.

Such Justice Department decisions need to be signed off by a judge. But on Thursday, Judge Richard Leon of the U.S. District Court for the District of Columbia objected to being treated as a “rubber stamp.”

And now he’s playing hardball. At a hearing on Monday, he said he would issue an order asking the two sides to explain why he shouldn’t require them to postpone their integration plans until he decided whether to approve the agreement. Here’s what he can and can’t do.

Deal trivia: If Judge Leon’s name sounds familiar, here’s why: He presided over the Justice Department’s lawsuit to block AT&T’s acquisition of Time Warner.

Michael Dell, Will Smith & Shaquille O’Neal want to put a ring on it. A sleep-tracking ring, that is.

The news: Oura Health, a small Finnish technology company that developed a smart ring to track sleep, has raised $20 million from a group of investors led by Michael Dell. That’s not huge, but the list of names backing the company is: Will Smith, Shaquille O’Neal, Lance Armstrong, the YouTube co-founder Steve Chen, the Twitch co-founder Kevin Lin and the New Orleans Saints quarterback Drew Brees, among others.

Why they’re excited: The technology in the ring tracks sleep similar to the way the Apple Watch does, but it is packaged in a considerably smaller form that can be worn on your finger. Andrew has been experimenting with the company’s device — he’s obsessed with sleep — and says: “It has captured the imagination of some high profile investors and athletes because it is infinitely better than any sleep tracking device I’ve ever tried. And I’ve tried them all.”

Aristotelis Mistakidis, the director of Glencore’s copper business, will leave the company at the end of the year amid legal pressure over assets he once ran in the Democratic Republic of Congo.

Deals

• Altria reportedly held early-stage talks to acquire the marijuana company Cronos. (FT)

• GlaxoSmithKline lost about $7.25 billion in market value after agreeing to buy the pharmaceutical company Tesaro for $5.1 billion. (Bloomberg)

• Brazil’s antitrust regulator has raised concerns about Walt Disney’s plan to buy Twenty-First Century Fox’s entertainment assets. (Reuters)

• Tencent Music’s I.P.O. is back on, with the company having embarked on a roadshow to sell shares to investors. (WSJ)

• SoftBank is said to be planning to invest in the parking start-up ParkJockey. (Axios)

Politics and policy

• The coffin of former president George Bush arrived at the Capitol, where he will lie in state until a funeral service at Washington National Cathedral on Wednesday. (NYT)

• In mid-May 2017, Paul Manafort tried to broker a deal with Ecuador to have Julian Assange handed over to the U.S. (NYT)

• Why Michael Cohen confessed to it all. (NYT)

• The legal adviser to the European Union’s top court said that Britain could unilaterally reverse its decision to leave the bloc. (CNBC)

Trade

• President Trump says China will curtail the flow into the U.S. of the powerful opioid fentanyl — but the Chinese have made, and broken, similar promises in the past. (NYT)

• C.E.O.s of German automakers will meet with U.S. officials in Washington today, and European politicians aren’t happy about it. (WSJ)

• Smaller movie firms are having a hard time trying to crack the Chinese market. (WSJ)

Tech

• France and Germany abandoned a push to impose an E.U.-wide digital tax on tech companies. (FT)

• Larry Kudlow, President Trump’s chief economic adviser, said that the administration was looking to eliminate subsidies on electric cars. (WSJ)

• The race is on to protect data from an actual quantum leap in computing — and China is winning. (NYT)

• Four former employees at Uber’s security team accused the company in court of trying to block them from disclosing “deeply troubling practices.” (Bloomberg)

• The head of Britain’s MI6 secret service said there were security concerns with the Chinese telecoms company Huawei. (FT)

Best of the rest

• Next year is set to be filled with more economic uncertainty. Stock exchanges and trading firms can’t wait.

• Ray Kelvin, the chief executive of the British fashion chain Ted Baker, has been accused of inappropriate behavior, including a “forced hugging” policy. (NYT)

• Oil prices climbed more than 1 percent, bolstered by supply cuts led by OPEC. (Reuters)

• Americans value equality at work more than at home. (NYT)

• The Walt Disney chief executive, Bob Iger, must meet higher benchmarks if he wants to collect a $100 million equity grant in 2021. (WSJ)

• Millennials have been accused of killing the canned fish industry. They deny the accusations (and say that they do, in fact, own can openers). (NYT)

Thanks for reading! We’ll see you tomorrow.

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