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tv   Bloomberg Markets Americas  Bloomberg  October 2, 2018 10:00am-11:00am EDT

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vonnie: hiring the new ceo stuns the banking world. shows this. and fed chairman jay powell speak later. what he will say about rate increases, trade, and wages. amazon raises its minimum to $15 per hour. what is the motivation? we will ask our executive. that is all in the next two hours. let's check on the markets and how they are doing. here is abigail doolittle. at culinary small moves, mix moves for the major averages. the s&p 500 yesterday up .4%.
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the nasdaq falling. trade, they have cooler heads trying to figure out what the situation is overall. a big boost yesterday, car stocks trading on the nafta deal. now,e nafta 2.0, right these stocks have been all over the map on the day. for both ford and fiat chrysler. the number is coming in, down a miss.it of best beat off 15%, 8%, the september in 18 years. we have a big move with ge down 1.7%. the upside on a management , it is likely to
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persist. it could be more than one notch. investors like that again. ge declined looks like nothing. the ipot decline since last november. this is the online personalized apparel company mixed quarter. they beat earnings estimates, at one point, these shares up since the november ipo. the growth is not quite as high as expected even though it is double digits. hitting its hundred day moving average. as for the s&p 500 overall, let's look at the leaders intel
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mpg and it did intel up three point 6% bouncing back after yesterday's 2% decline in a cut in rating over at barclays, investors looking pass that today. bge looking up more than 2% on the downside. down 5%. saying theof america price target now is lower on evaluation. down 3.9%. map.tle bit all over the down three basis points. bonds are rallying. it may suggest that investors want to keep and i on the possibility relative to bonds. >> we have coverage of that
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coming up right here. getting a new boss. last week, we learned about a management stakeout. that's burress speculation. take a listen. a strategy we agreed in the last
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few years. >> think they can become bigger are more focused in the next couple of years? have have is the opportunity few banks in the world have. of course you would give us growth. it should give us profitable growth as we have done in the past few years. done is a lot. this year, it is more than 7 billion.
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that is a .5 arise. you will do a long capital. you will do a long capital. buffers. capital i am sure it is very accurate. it is sometimes more than predictable in terms of earnings banks in the world. buffers. we do better with earnings. us,s the right level for give us pretty stability. actually growing profits. >> all caps from 2019. classic cannot say what we announced a few months, but we have increased the cash dividend by 30%.
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this year, the target we gave i thinkets years ago, that is a good performance. >> the chairman speaking to francine lacqua. that was a huge surprise a couple of weeks ago or so. the markets reacted to it. everyone thought they were there to do an m&a. >> he said many times what he now wants is basically she laid out three people at the home with different focuses. the spin it probably focused on digital. it -- strength has to do with motivating a team, possibly doing deals, but they have a lot to get through before they can
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do m&a. latin america maybe, but what it -- trying to explain to me, they could grow organically, and that the moment, they don't really need m&a. before now, she said, a great addition to the team. >> the strategy, what would you say about the challenges facing those countries. the argentina is very small. a lot of her eggs are basically in brazil. there is an election coming up, the first round this sunday. the matter what happens, in terms of brazilian politics,
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this will increase. she said remember i told you three years ago i would increase thee., that we would put bank in shape not only emerging markets but especially brazil. it was almost a victory lap because she delivered what she promised. >> spain has been in the past, she does have a significant basis. >> she says because only she can do the internal bank politics, she is not against politics world wide. brexit.talked about the other hot potato here they have a big base. the go bad and worse, she preserves her bank.
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everything is in good shape. >> francine lacqua, talking about the chair over at santander. kaylee with the updates. >> former british foreign secretary boris johnson has called on his conservative party to back prime minister theresa may but there is a catch. >> i hope you join me in urging our friends to deliver what the people voted for. theresa may in the best way possible by sensibly plan andg her original in so doing, to show confidence in conservatism and in our country. >> in other words, johnson wants to rip up the current plan and return to the original one. called for the u.k. to leave the custom reunion without any ambiguity. advisere house economic says the new trade deal with canada and mexico sends a
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message to china that we are acting as one. the deal was negotiated in consultation with democratic lawmakers. president trump said it is too early for trade talks in china because beijing is not ready yet. investors are grappling with opec and falling exports with iran. high, 15% since august. they have fallen to a 2.5 year low. there is little enthusiasm for boosting output. awarded to scientists in the u.s., canada, and france, the american author at bell laboratories is 96 years old. global news -- global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. vonnie: thank you.
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happening now in washington, d.c., senate majority leader mitch mcconnell speaking on the senate floor. saying democrats will do anything to stop what he calls an exceptionally qualified nominee. the fbi investigation continues. this is bloomberg. ♪ ♪
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>> 45 minutes into the session on wall street. vonnie: this is bloomberg markets. in mixed picture in u.s. stocks
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today. european equities largely to the downside to really spain, france, and germany. for more, let's blink -- bring in mike. italy is a big overhang today. mike: it is important to notice the balance from the trade did not really even last the whole day. most of the gains in the u.s. equity market have fizzled out by the end of the day. now everyone is focused squarely back on italy. neverro -- euro skeptics went away. they are still there and not the most powerful positions but every time one of them speaks up, people take notice. recently, the head of the budget committee in the lower house basically saying the euro is not sufficient for italy's debt problems. it was theast week, european affairs minister.
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the italian government is taking the stance that leaving the euro is not their plan at all. one of these guys speaks, people start whispering about nomination risk again. yields as high as 2014, the euros debt -- back down to the lows. it is interesting the u.s. equity market is holding firm. we are talking about the theme of the u.s. versus the rest of the world of how the u.s. equity market especially decoupled and reporting very well when really most of the equity benchmarks around the world are lower your to date in dollar terms. the question was would we get under performance the u.s. and that is a better performance rate in the world, i think this situation puts the idea on hold at the very least for now. vonnie: i can understand in europe how italy's deficits not helping the are up in projects in general is affecting things.
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in the u.s., we are starting the fourth quarter. we are getting some good metrics when it comes to data. wise it bleeding into the u.s.? >> i'm not sure it is bleeding too much. it is flat in the equity market. the company stop buying back shares. this year, all of the immense buybacks, it is interesting to see it holding firm. especially the goodyear. les miles, we will talk about amazon.
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raising the minimum wage they are giving to the staff. how much attention should we be paying to the amazon story? is it another indication that it will go higher than the markets are anticipating? >> i think the amazon story is a very big story. i am not sure they're prepared to adjust the notion in a speech today. looknk most people will for any more clarity on the notion of rates being -- the fed took the language out of their last statement. it hasn't quite gone away. to year yields are low where they were for the fed last week. fed, trying to figure
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it out, by removing the statement, you cannot really tell if rates are accommodated or not. >> great. thank you indeed. as we have been discussing, jay powell will be speaking shortly. still ahead, amazon employees are getting a bump in pay. doing this? we will find out and speak to the senior vice president of operations. that is next and this is bloomberg. ♪
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>> joined now by dave clark. hiringnomy was posing challenges anyway both here and the united kingdom where you are raising wages. did you need to do this to attract workers question mark -- workers? >> this is about the future. forward, what we want to be as an employer and what do we want for the pay to be. u.s.e now to $15 in the and we are moving across the u.k. and in london effective november 1 as well.
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>> is this amazon reacting to political pressure? >> know, we looked at what people had to say. what do we want our focus to be and how do we want the view on pay going forward and we thought a lot about it. that is why we went ahead and did it. u.k..n the u.s. and the >> including stock incentive bonuses, there pay would have been above that anyway. what does it>> including stock e -- to amazon's bute previously discussed we are telling about the minimum
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day, across the u.s. and across , the earnings call later in the month, i can tell you what it means for customers over the long-term. it is an exciting day for employees. question they be concerned? >> we continue with great prices and great customers in the months to come. >> you are going to lobby for a increase in wages. ready think the number should be and how significant impact would you have on the process?
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>> the federal minimum wage is too low, will the experts decide $15,the number should be, we encourage other large employers to join us there. target, i think we have targets paying, i think it is the wrong -- long way around. target his 12. those numbers are too low, the numbers say. we encourage other big employers like the ones mentioned to start the journey and join us to that would be great. >> you will raise this to nine: -- $9.5 and $10.5 in some areas. how long do you expect needing
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to increase even further to attract talent? >> that is a great question. we will come back and look at it again in 2019. vonnie: thanks to dave clark. just checking amazon stocks right now. down in a pretty flat market. still ahead, start your engines. a motor shows underway. companies opting for a more silicon valley setting to unveil their next tesla. this is bloomberg. ♪
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vonnie: live from new york, i'm vonnie quinn. guy: i'm guy johnson. let's check in on the markets right now.
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we are an hour to the close now. btp's today have been moving. -- have a lotove of movement at the front end of the italian curve. yields higher. prices move lower. the ftse actually rallied about an hour ago. maybe we are finding a short-term base. there's the cable rate. boris johnson backing may but not her plan for brexit. speaking at the conference in birmingham a little earlier on. earlier on we had a touch at 85. this is as supply concerns continue to be a big factor into those markets. let's check in on the first word news. here's kailey leinz. >> president trump has cleared the decks for a protracted trade war with china. the president has struck a
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last-minute trade deal with mexico and canada, signed an agreement with south korea and convinced japan to open up one-on-one talks. at a news conference trump says it's too early to talk with china because beijing isn't ready yet. in indonesia the desk told -- the death toll from the tsunami and earthquake has risen. have received little assistance because roads are impassable. italy's deputy prime minister is pushing back against euro area governments who don't like the italian budget deficit. he says the deficit has been tolerated in the past when it was used to save banks and oil businessman. used deficit were spending to help people retire, find jobs and save on taxes. melania trump is in ghana. she arrived for her first extended solo international trip.
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toured a hospital to highlight her interest in child welfare. she is on a five-day tour. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm kailey leinz. this is bloomberg. breaking news on gm. we have auto sales for the third quarter down 11% versus of 4.6% in q2. gm's total vehicle sales fell 11% in the third quarter. this has been the pattern. do have a very unfavorable comparables to the last quarter and last year. joining us to explain is david welsh. we have seen it disappoint. explain why we are comparing with the quarter that is making us look bad this quarter. >> we did have big auto sales a
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year ago. there are some other factors. you have rising interest rates and inflation. if you look at auto sales for the year through august we are up about 1%. sounds like that's pretty good because the auto market was very good last year. this is solid moneymaking business for everybody. incentives have been higher. fleet sales have also been higher. been asust hasn't strong. earlier in the year the gm president described the mark to me as a little bit squishy. i think it is getting softer right now. there's competition from the used market. it's not a disastrous market by any stretch. it is just tougher for everybody to get the retail sales and good pricing that they want. tesla did some ok numbers
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this time around. certainly the late birth has punched the numbers higher. my question is can they repeat these numbers? is this a blip or is this sustainable in terms of the production story? >> that's a good question. let's look at the model three. 53,000 vehicles divided by the number of weeks in a quarter. they still have to get to 5000. they did that in the last week of the quarter. that's one week and they did to reallybig push and get cars sold. that's why you saw the shares down a bit for a while. he made some noise about making a push and i think maybe investors were making him to be well above 4000 and 80 and sustainably hit 5000. they are not there yet.
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is when they're going to have to do is promising profit in cash flow the second half. we will see what is to ramp up. vonnie: i want to give a shout out three tracker web site to him in trashing within numbers. numbers -- within tracking vin numbers. do they get out into some actual factories? putting up a second tend to do some of the finishing work on the cars. it doesn't look like they are going indoors just yet. think maybe going into the cooler months of the year even in northern keller when you they would want to get in side. let's assume they get to 5000 of the model three a week. at some point there investors and analysts are going to start
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asking how efficient can this be? this machineryf and robots indoors that's not really doing most of the production and a bunch of people assembling the cars out doors. that's a massive factory in fremont, california. gm and toyota used to make is000 cars a year and tesla making well under half of that. it's not an efficient way to do business. the production numbers is great but eventually they've got to produce these cars at a profitable rate. jameset's talk about bond. aston martin's ipo in the morning. they are trying to put it on for rory like multiples. can they do that? do you think the market is going to be up for it? going to be closer to 1850 or 20 in terms of the pricing? going to bet's tough to get that for every multiple. brand with a great
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the investors who are actually buying the stock. there's a lot of excitement for this. i think hitting the for re: multiple on the stop -- on the spot is going to be pretty tough. if they bring back the db five may. that was james bond's car. guy: they say they are going to continue to produce beautiful cars. the question is will they have a beautiful valuation. lots of news coming out of the auto show in paris as well. plenty of coverage on bloomberg on that story as well. vonnie: that's not the real question when it comes to aston part and it is whether idris elba will be sitting in the next one. coming up, why shares and pepsico are falling today. this is bloomberg. -- in pepsico are falling today. this is bloomberg. ♪
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guy: that is some of our reporting by tictoc on bloomberg. live from london, i'm guy johnson. vonnie: i'm vonnie quinn. pepsi returned to growth under the leadership of the new ceo. shares are sliding today although they are making up some of the loss after the cfo made a comment about the company's lack of interest in cannabis investment. joining us with the details is craig g mona.
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this is just because pepsi isn't going into the cannabis trade. >> no it isn't. the shares were roughly flat. there is some concern about higher cost. they are facing higher aluminum costs tied to the tariffs and their full-year profit forecast because of the stronger dollar. definitely some challenges facing the news rio as he takes over tomorrow. north american beverage sales are down 30%. they obviously would like that number higher. is it going to get any higher? >> there are signs of life north american average unit. it's a very important business. they have had to advertise more because coke is doing a little bit better. they returned to sales growth in the quarter but the profit is still taking a pretty big hit because of the higher costs. have been calls from investors to spin the business off. that's really the one that
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people watch. they did get that back to growth this quarter. buying coffee from whitbread over the last few weeks. looking to diversify the business. what have we learned today about pepsi's plans? how are they going to produce the same trick? >> they have the starbucks partnership. they did call that out. there's a lot of interesting coffee. coffee now fits into things that are less sugary. done quite a bit to diversify away from sugary soda. they talked about bubbly which lacroix competitor. they said they would not get into the restaurant business. you will see them continue to diversify the beverage portfolio. guy: where is the sweet spot?
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we have a lot going on in that space. where are people positioning themselves? conversation around cannabis, you saw coca-cola talk about cbd and maybe using that for wellness beverages. and maybe using that for wellness beverages. it's really a new generation of beverages. there is potential as a new ingredient that could really drive growth. vonnie: what is the new ceo literally taking over this week going to do with sodastream international? >> that's one of the biggest questions. it's always interesting when a new ceo inherits a deal that wasn't a their idea. you have to believe he was consulted on it. you have to believe he was at least nominally on board. it's going to be very interesting to see. it's a sensitive topic for them. they are kind of going around the bottlers to get products into those homes. it's definitely something
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investors will watch. vonnie: there's only so much under pepsi's control. they're going to have higher transportation costs. how does the ceo deal with that without crimping margins? great point. some of this is outside of his control. the positive is that it wasn't structural to their business. that doesn't make it any easier to keep the profit up when you are dealing with all of this. they are going to raise profits -- prices on sodas and drinks. they are following coca-cola. you'll see that as they try to keep profit strong. issue.m is an ongoing the trucker shortage are all things facing ramon as he takes over tomorrow. , are they companies ultimately going to be affected by the trade tariff story? is there an effect that's going to come through?
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>> you are seeing that now with higher aluminum costs. pepsi is getting to the point where they have to pass some of that along to the customers did i don't know that you are seeing a big consumer revolt and sometimes companies can raise prices and you don't see much of a reaction. coke has done it successfully. as far as the new nafta deal pepsi said they are taking a wait-and-see approach. they haven't really determined yet whether that's going to make prices cheaper as we get the new trade deal. vonnie: very quickly, what is ramon like? it's hard to say. he is a life he has been at the company a long time. he is european. he is only the sixth ceo in pepsi history. the last ceos personal story i think resonated with a lot of people. it will be interesting to see how his leadership style takes shape.
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vonnie: going after gd. why moody's sees different prospects for the manufacturer. this is bloomberg. ♪
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guy: live from london, i'm guy johnson. vonnie: i'm vonnie quinn. this is bloomberg markets. guy: a look at some of the biggest stories in the news right now. apparently a turning point for canada and the global gas industry. itsl dutch shell and partners have agreed to invest in a project that will create the fastest route to asia for north america on -- north american liquefied natural gas. it will be canada's largest infrastructure project. construction is going to be starting immediately. investorss rewarding
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that fended off unwanted takeover attempts. carlyle group agreed in march to buy the business. akzonobel.lped is taking its most loyal customers to get the chance to buy the 1.9 million mondo supercar. they will get to choose between the one seater or the two-seater. no one will be allowed to buy more than one. sells itself as a luxury goods company these days as well as an automaker. we are about to get the ipo tomorrow morning of aston market -- aston martin. toys "r" us could be poised for a comeback. the same lenders taking the heat for it liquidating the company say they have canceled the plan to auction off.
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they want to reorganize the assets into a new company. vonnie: time for futures in focus. oil dancing around today after crossing the $75 a barrel mark. what is giving oil this post all of a sudden? we are talking about three dollars just in a few sessions. >> exactly. concerns reenter the market. it's just big-time supply concerns. is opec and russia going to make up the difference or not. these seeing a lot of refineries running at full capacity yet there still seems to be a lack of supply. that's a big concern as we move through this week. like people are taking off their long positions
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on wti. why is that? >> we are seeing a lot of money called buying going on. there seems to be some demand for the side optionality. brent is just easier to get to and i think that's part of the reason. capacity constraints in the united states are entering into that spread. vonnie: we have seen the u.s. dollar bounce around. what are traitors saying about the dollars direction given what has happened to the euro and the british pound? slippedheme has kind of the last week or two. some of the ideas that were in the marketplace are now starting to wash out. concerns about the euro have put a bid underneath the dollar.
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vonnie: we still seem to be in that range. do you see anything in the jobs report pushing us out of the range on the 10 year? >> sure. fed chairman powell will be speaking in boston today. we will see some news later out this week when you look at the unemployment report. we are seeing a little bit of a back off primarily due to some of the global unrest we are currently dealing with in the market place. trade question impact the trade down there at all? >> it has. of're seeing news coming out tesla having a difficult time selling their cars in china. you're starting to see the tariff issues roll out in the market. that is part of why you are seeing the market back off here today. vonnie: hello everybody down at the cme. yesterday we spent a lot of
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time talking about this company. shares in ge are falling today after moody's investor services for the company's debt under review for a possible downgrade. it could be a multi-notch downgrade. itmoody's saying right now could be more than one notch downgrade. this comes after the news yesterday that the new ceo was coming in and taking over and that free cash flow they will be missing their 2018 free cash flow and earnings per share guidance. right now free cash flow for 2018 is about $2.1 billion for the year. at 2.7.w they are you're definitely going to the seeing declines in terms of free cash flow and weakness in that ever important power sector. market cap is something we have been talking a lot about with ge
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they haveast years been just on a massive decline. yesterday on the positive news of the news the a rebounded about a hundred and dollars. biging behind some of their rivals like united technologies and honeywell. vonnie: before the report the credit analysis said they were trading to a triple d. >> a lot of that is priced in. on the front end of the curve spreads look tight. on the longer end of the curve they are trading wider relative to some of their triple b rivals by about 30 basis points. ge had talked a lot about their net debt target. relative to some of their rivals their average with companies are dan herne you tx, they
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way above some of the a rated peers. really interesting to see how they deal with the deleveraging. ourie: taylor riggs with stock of the hour. this hour it is general electric. thank you. 30 minutes until we close out the european markets for the session. doing a little bit better than some of the other markets. the dax had a tough day. the market i want to focus on his foot demand. .- is the ftse mid we will talk about that in the next hour. this is bloomberg. the closes next. -- the close is next. ♪
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jonathan: 30 minutes left in the european trading day. from london, i'm guy johnson. vonnie: i'm vonnie quinn. this is the european close on bloomberg markets.
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guy: here at the top stories we are covering from the bloomberg and around the world. blinks. amazon bows to political pressure and delivers a prime pay rise to workers in the united states and the u.k.. italian markets have another turbulent day but stocks bounce off their intraday lows and push up towards the end of the session. have they found a short-term base? and boris backes may. the former u.k. foreign secretary says he supports the prime minister but not crucially her plan for brexit. let's talk about the european markets and 30 minutes to go until the close of european trade. italian y

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