Investors really want to be cheery. Here's what's holding them back

London(CNN Business) Happy Tuesday. A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.

Global investors really want to ditch all the gloom. US stocks kicked off the week with a rally, pushing the S&P 500 above the psychologically important level of 3,000. Stocks in Asia followed suit with fresh gains.

One reason for the optimism? An indication from President Donald Trump that the United States and China are making progress on a "phase one" trade deal that could be signed at a meeting in Chile next month.

"They have started the buying," Trump said Monday at a Cabinet meeting, referring to Chinese purchases of US agricultural products.

If you think those remarks aren't sufficiently upbeat — well, you're not wrong, as lingering uncertainty appears to be bringing investors back down to earth. Stocks in Europe are broadly flat in early trading, and US futures indicate more of the same.

For the Federal Reserve, which meets next week, it's a difficult situation to read. Right now, the trade signs are positive — though it's important to remember that a deal signed next month is unlikely to remove tariffs on hundreds of billions of dollars of goods, which will continue to weigh on global economic growth.

"If trade talks are going so well, according to Trump, and the S&P 500 approaches the all-time high [of 3,028], should the Fed cut interest rates further? Something to ponder," Rabobank strategists Piotr Matys and Jane Foley wrote in a note to clients Tuesday.

According to CME Group's FedWatch tool, 93.5% of investors expect a 25 basis point rate cut. Rabobank agrees that's still likely.

Also on the radar: Investors are eager to get more clarity on Brexit. That could come Tuesday — though, then again...

What's happening: Prime Minister Boris Johnson's Brexit strategy faces a major test in Parliament. Lawmakers will vote on whether they support the general principles of the exit agreement that he negotiated with the European Union last week. The pound is holding close to $1.29 in the meantime.

Despite frantic vote counting that indicates this measure could pass, there are plenty of wild cards, including the introduction of amendments to the legislation and calls for lawmakers to be given more time to scrutinize the Brexit bill. And, as always, it's important not to lose sight of the bigger picture.

"When all is said and done, the decision to float out of the world's biggest customs union in the middle of a global trade recession will have negative economic consequences," Société Générale strategist Kit Juckes wrote in a note to clients Tuesday.

WeWork's fate could be decided soon

The time has come: WeWork is reportedly weighing last-ditch financing options this week to avoid running out of money after a disastrous attempt at an IPO.

WeWork parent The We Company appears to be considering at least two possible financial lifelines, per my CNN Business colleagues Sara O'Brien and Sherisse Pham. One option would see SoftBank, its largest investor, lend $5 billion to the company. That would accelerate a $1.5 billion equity investment originally due to WeWork next year, according to a person familiar with the matter.

Details, details: SoftBank is also offering to buy up to $3 billion of stock from existing investors and shareholders. That would boost SoftBank's ownership of the company to between 60% and 80%, depending on the amount of shares tendered, the person said.

The shocker: WeWork's potential valuation would drop to between $7.5 billion and $8 billion. That's well below its peak of $47 billion.

The other option involves a financing package led by JPMorgan, which has pulled together a group of outside investors, according to the Wall Street Journal.

Stay tuned: The decision could be announced as soon as Tuesday, according to multiple reports, closing out the latest chapter in the startup's gripping fall from grace.

Banks aren't ready for the next downturn

The next economic downturn could be devastating for the global banking sector, according to a new report from McKinsey & Company.

More than half of the world's banks could be in trouble, McKinsey claims. Roughly 20% of banks aren't big enough and are weaker than competitors. "They are at risk from a downturn and must act promptly to build scale in their current businesses, shift business models to differentiate, and radically cut costs," McKinsey writes.

On top of that, the consultancy claims another third of global banks have inherently flawed business models. These banks are operating below scale in unfavorable markets.

"To survive a downturn, merging with similar banks or selling to a stronger buyer with a complementary footprint may be the only options," per McKinsey. The other road? Nothing short of reinvention.

Up next

More earnings. Harley-Davidson (HOG), Hasbro (HAS), JetBlue (JBLU), Kimberly-Clark (KMB), Lockheed Martin (LMT), McDonald's (MCD), Procter & Gamble (PG) and UPS (UPS) report before US markets open. Chipotle (CMG), Snap (SNAP), Texas Instruments (TXN) and Whirlpool (WHR) will follow after the close.

Also today:

• US existing home sales for September arrive at 10 a.m. ET.

Coming tomorrow: Mark Zuckerberg testifies before Congress on Facebook's Libra cryptocurrency.