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tv   Bloomberg Markets European Close  Bloomberg  March 28, 2018 11:00am-12:00pm EDT

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bloomberg markets. ♪ mark: here are the top stories we are covering from the bloomberg and around the world. renewed tech woes rattled world. treasuries shows signs of a safe haven play. we await two key debt auctions today. we will talk with jaguar's chief executive from the new york auto show. toook at what is happening european equities. stocks have rebounded from the loss of 1.3% earlier in the day. luxembourg down, switzerland and denmark are higher. bond yields are declining.
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economicabout surprises -- let's talk about economic surprises. starting to feel pain from the slowdown after the growth spurt we saw last year. a similar gauge for the u.s. is still in positive territory. some stocks are just predict the -- will continue to underperform u.s. peers in the months to come. after years of miserable performance, china small caps are having their turn. herehite line right dominated by tech shares has jumped 1.2%. the blue line right there, tracking some of the --
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trade war sparked abroad. bargain hunters have been leeward to the china -- have been lowered -- lured to the chinex. in bonds is set for the best month since june 2016. economists cutting their forecast for australian growth. the slide has helped drive the gap with u.s. treasuries to the widest in four decades. 90 minutes into the session in the u.s.. how is it looking? julie: it is looking bouncy. stocks are kind of moving around within this range.
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the most of the three major averages but now has cut that decline to three quarters of a percent. a lot of movement even within this short session. a lot of the downward movement is in technology as you can tell and in particular with the so-called faang stocks, amazon one of the worst performers among them. the index down 13%. tesla, one of these momentum stocks. today decline as the company is dealing with an accident that occurred on the west coast. tesla saying it has not gotten access to the vehicle's logs. it is working with authorities to do so. has led did preemptively defend the record of its autopilot safety features -- tesla did preemptively defend the record
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of its autopilot safety features. walgreens coming up with numbers that beat estimates. pharmacy sales are strong as it acquired a number of rite aid stores. in the negative even though it set a record for software revenue. software revenue is something the company has been building up. restoration hardware forecasting first-quarter earnings above estimates. 23% gain. thatompany should be noted 40% of it is sold short. beating estimates in part because of e-commerce sales. the treasury market is an important part of this story and if you take a look at the bloomberg, we've got the 10 year treasury yield which has broken below that 2.8% support level which is also the 50 day moving average.
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it is about the fall in yields we have seen. market.t's stay on the the senior european equity strategist for bloomberg intelligence is here. is it a big deal or not? >> it certainly is, it can be. the death cross comee apparent for the dax up with a stoxx 600, the ftse 100. quite often with the momentum that happens with a 50 day moving average which crosses the 200, it just precipitates more technical selling. we also got relative strengthening -- strengthening kate or's, signs that have gone negative from the trends they are showing. go back to 2006 and there have been seven prior death crosses
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for the stoxx 600. four of them were followed by notable rises in the market, when there was good underlying fundamentals. three of them were crises. the question now is fundamentally, what do we have with things like trade, with currency? mark: you are good. you know what's coming up next. this is the correlation between the stoxx 600 and the euro. turning more negative. it from the look at stock price like this. earnings with the pound and it is a clearly negative relationship. the region gets a lot of revenue and earnings from abroad and if you have a strong currency, you are importing back end week
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foreign currency. -- backend weak foreign currency. that is a challenge, going forward. if we continue to have concern about trade disruptions in the u.s., that is supportive of the euro and a headwind and what is clearly a good -- a big reason why we have much slower growth anticipated in 2018 in europe. vonnie: is that the main reason why the performance has been so poor both on absolute terms and relative terms to the u.s. even though tech has not been such a big driver in europe? tim: that has a lot to do with it. in the u.s., we have had tax reform that was a big cut. we have had a weak currency with the dollar down as much as it is. we have the flip side of that in europe with a strong currency in a headwind.
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trade causes concern, but from a european perspective, it is potent because you've gotten something on the order of a percent of revenue that comes from abroad and that is trade oriented ties that could be potentially disrupted. that is quite notable in terms of the difference tween the u.s. and europe. i would throw out as well that we have had different phases in the underperformance. late last year, it was the tax reform boost for the u.s.. ecb rise concern with the and you had financials outperform everything. then you have the trade concern since late february where the cyclical components like discretionary, all of those industrials have been particularly week. craighead, senior european equity strategist for little -- for bloomberg.
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the treasury will end up auctioning just under $300 billion of bills and notes this week, the largest ever. -- thering in the u.s. bloomberg u.s. treasury reporter. it is going to be interesting to see the option, today. a seven-year auction to wrap things up. be a question of, there has been this tremendous rally and there is uncertainty going on. bonds are finally reacting to stocks. are buyers going to step in at this point? if nothing we have seen so far has caused the bond trade to turn, what makes us more confident we can predict it now customer -- now?
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to -- everyone was so sure this was going to happen in january and february and now they have sort of petered out, the momentum is no longer there. you are the 10th most read story today. treasury yields near 0%. surge -- it iss unusual, this surge. brian: this is a pretty huge story because with the option, they comes down to who is going to buy treasuries as the market is set to grow even larger as of these budget deficits. the story was is it going to be foreign buyers, particularly japan and european investors in the answer is probably not.
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the heads deals are still attractive. -- the hedge deals are still attractive. easy to get dollars in part because of the tax overhaul plan and some things embedded with that, but because of -- these european investors just don't want them. we will have to leave it there. let's check in on the "first word news." courtney: president says the second amendment will never be repealed. the president is making that pledge on twitter a day after a retired supreme court justice expressed a different view. stevens wrote that repealing the second amendment would help congress enact gun control measures. the president also tweeted quote, we need more republicans in 2018 and must always hold the supreme court.
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-- the disappointment in what they call chambers in action in moving sexual harassment legislation forward. the letter spearheaded by signed by senators -- every female u.s. senator. hundreds of wealthy russians moved to the u.k. promising to millions in british businesses will have their visas revoked. it is part of plans to crack down allowing a nerve agent attacked on a former spy. -- attack on a former spy. concerns have been raised that the system allowed corrupt people and illicit funds into the country. in egypt, authorities are warning people to vote or risk
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paying fines. the government is hoping for a high turnout to lend the election legitimacy. official results come up april 2. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. this is bloomberg. mark: coming up on the european close, an exclusive interview -- discussing the acquisition of the irish stock exchange.
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vonnie: live from new york i am vonnie quinn. mark: and live from london, i am mark barton. we are 14 minutes from the european close. vonnie: now it is time for a bloomberg exclusive. the irish stock exchange is now part of your next. -- euronext. the acquisition of the irish stock exchange was a fundamental decision of the fundamental quality of the exchange is a business because of the great quality and talent pool of the company because of the great -- al position more than 1000 etf's. it is a great business as such. beyond that, the irish exchange is located in iraq -- ireland which is a great cap -- country
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with growth prospects. extent, it is the best potential growth to come from the consequences of brexit. unknown more uncertainty in the current brexit prospect. it is a great addition to the euronext model. >> will you be moving staff from london to dublin and if so, how many? >> we are not going to move staff. we have significant operations so we stay close at a larges and as long as group is in london, we will have large operations in london. vonnie: euronext ceo stephane boujnah speaking exclusively to bloomberg. mentioned unknowns
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in brexit negotiations. one thing we know is that britain plans to hire 1000 staff to manage the border. >> we do seem to be in a strangely calm period. none of the drama we have seen so far throughout this process. we have the bank of england come out with a rather optimistic assessment of how things are going to happen throughout the transition process. to process is not guaranteed until the final agreement is signed. the european side -- everyone must plan for the worst. we do seem to be in this holding pattern ever since the european council meeting last week when the transition agreement was signed and sealed and i guess the next thing to look for is
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the next european council meeting in june. we know it is happening this week is negotiations on the irish border have been continuing. we don't have anything concrete that has come out of that and they are still hiring out details of the agreement. what has been going on is the front pages by this response to the russia -- alleged russian attack. mrs.ositive headlines for may. whistleblowera tell that the referendum could have gone the other way if the law had been broken. has that brewed up into a storm? >> this is being jumped on by the remain side. mrs. may is having none of it. some very strongly worded rebuttal from her in parliament. she said we had the boat, the decision has been made and we will not let these issues get in
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the way of delivering brexit. foster was on with mark about a week ago and he said we cannot get to the border issue without trade. and eileen foster make this more difficult for britain? option always have the of doing so. the reason why mrs. may is able to continue in downing street because chile the minority government with their support, however they are backing her line and the british governments line that there is no point in getting too upset about what is going to happen with the irish border because it depends on what the future trade agreement is. a deep free trade agreement, it lessens the need for border checks. it does not solve the problem, it kicks the can down the road on that issue. reporthere was a times saying that an announcement on
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the border could be today. >> it seems like what the times is referring to is the fact that negotiations have been going on behind the scenes. we're not expecting any announcement. that is what our sources are telling us. get maybe just some more commitments to what is going to happen but the british line on this is and continues to be that we need to start talks on the trade deal because that is the thing that is going to enable us to keep the border in ireland open. mark: bloomberg's david merritt. vonnie: still ahead, jaguar land rover's big bet on automation. we will speak with land rover's ceo. this is bloomberg. ♪
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vonnie: breaking news on deutsche bank.
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the ceo says he is committed to serving the lenders. this is a memo to employees that bloomberg has seen. bank issays deutsche experiencing no difficulties between him and the rest of management and that the board is on board with the strategy he is implementing. he also said to expect further possible developments. while lowere stock earlier has crawled back and is pretty much flat at this point. mark: no difference of opinion between the management and the supervisory board on strategy. this after the peace in london suggested that the cfo and the chairman specifically over strategy when it comes to the investment bank and we've got the story today saying deutsche bank is conducting this fresh review of the investment bank
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that could lead to deeper cuts across the trading businesses. that was already in place before all the speculation unfolded. clearly things are happening within deutsche bank. let's look at what is happening to european markets as we head to the close. take a look at equities. you can see the ftse is trailing up, led by shire on news that eda ista -- tak interested. around.ave turned three minutes to the close. ♪ retail.
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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. mark: from bloomberg's european headquarters in london, i am mark barton. stocks rebounding from earlier in the session. stage, the stoxx 600 was
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falling for the fifth day. yesterday, the gain was 1.2%. at the close, utilities, classic defensive sector, leading in gains. let's look at cyclical stocks. europe cyclical -- equities have the in their defensive peers. economic growth turning investor attention to utilities. the region's cyclical shares beat their defensive peers every quarter since june 2016. the white line, defensive, the blue line, cyclical. the yellow line, the spread between the two.
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have a look at this chart as well. high grade european corporate bond sales heading for a 30% a briefs quarter after march flurry. volatility partly because companies rush to do deals in 2017 in order to lock in the record low borrowing costs. this chart shows us how european investment grade yields have climbed, roughly 16 basis points this year. the big gainer on the ftse 100 today is shire. up by 14% and it did rise earlier, as much as 26%.
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takeda is first -- is considering pursuing the pharmaceutical company. the possible deal comes amid a flurry of transactions in the pharmaceutical sector. shire up by 14%. vonnie: starting with the nasdaq in the u.s., down as much as 1.5% earlier on. now, contributing to down market overall in the united states and this is in spite of a stronger dollar, today. yields, the big move there. 2.75. auction results coming out any minute and that will be it for
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the week. we got down as far as 2.74 and change. 2.80 is the level to watch. the yen is an expression of how the dollar is strengthening. seeing some weakness. let's to go look at the world. wm, read all over. -- red all over. early on, this is actually green. butmpy start to the session now let's see how we do for the rest of the day. mark: let's check in on the "first word news." courtney donohoe has more from new york. courtney: a good chance that north korean leader kim jong-il and will quote, do what is right for his people and humidity and make moves towards feats -- towards peace.
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the chinese president xi jingping said a meeting that xi had with the north korean leader went quote, very well. catalonia's parliament has passed a symbolic motion affirming the right of the spanish region's former separatist leader to be related to his old job -- reelected to his old job. pro-independence parties used their slim majority to approve the motion today and continue their defiance of the government which says that it will can says the wealthy northeast region cannot secede. their strategy, the eu and nato unveiled a joint mobility plan to counteract russian aggression. need to have better
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alignment of regulatory issues, different taxes, different diplomatic issues that need to be resolved and also the transfer of dangerous goods. use oftalking about dual the same infrastructure for civilian use and military use. that is why this alignment and fitness check is necessary. it is the third time in 70 years that nato has issued a major overhaul of its defense strategy. : has signed a deal with the u.s.. it ream it was designed to soothe concerns over russia's assertive stance in the region. it is the largest weapons purchase for poland. the president called this a historic moment. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries.
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this is bloomberg. vonnie: more now on our breaking story. istsche bank's ceo says he committed to serving the lender. bloomberg'sd now by finance team leader. tohe is clearly trying scroll to some of the rumors that there have been wrote -- squelch some of the rumors that deutsche bank -- would certainly wants to steady the ship. there have been questions over the strategy. they have moved more to getting back to growth. that the. really happen partly because of the trading environment -- that did not really happen, partly because of the trading environment. reports thatof the
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were circulating yesterday was that the chairman is not on board with the strategy. said the board and the management are very supportive in the memo. michael: he is pushing back strongly. you saw earlier today that deutsche bank is looking at further cuts in the investment banking unit. according to other reports, that is what he was pushing for. that seemed to be what he was pushing for, a more dramatic restructuring because the possibility -- the profitability has been so bad in that unit. mark: given that we are in phase three of his turnaround plan, might it be best to just take with it to see it out? -- the bank further
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ofes -- bank's chances staying if they keep the same later -- if they change the leader? part of the issue for the bank has been confidence from clients, whether it is part of that big rumored doj settlement which came in at half what the rumors were or other concerns about the bank's capital picture which it tried to address. part of his effort has been to stabilize the bank, to bring back confidence to the bank and certainly bringing in a new leader could shake that up. , michael moore
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moore, our bloomberg news financial team leader. jaguar land rover making waves of the new york auto show. it teams up with waymo. it is the first all electric are full -- offering from the company. we are now joined by ralf speth, the jaguar land rover ceo. why did you choose waymo? electrification -- we have a clear vision about modern mobility and this mobility cannot be done in isolation. modern mobility needs .artnerships we are leaving in the electrification and you look for partners who lead in their respective fields. about -- vision
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mark: some might say your announcement is unfortunate given the recent tragic news we had out of uber and tesla. rollouts slow down the of the ride-hailing service that waymo wants to implement? ralf: not at all. from my point of view, we are doing everything on the side of the car when you factor are -- manufacturer. on the other hand, waymo has the most advanced algorithm and security systems, so this will be a very good basis to develop
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this kind of future. vonnie: you are looking have about 20,000 vehicles in waymo's fleet which is quite an ambitious target. reacting,nsumers given jaguar's legacy in history? view,from my point of they fit very well together. delivering an outstanding product with very good capability. i think it is a good choice for our customer. up the high paced production right now. it is not to overstate it.
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the administration in the united states is taking a strong stance on tariffs. i have to ask how that modeling is already affecting your business. day, at the end of the this creates the right environment for these kinds of vehicles but i am very optimistic that this kind of technology, we can step ahead. vonnie: i meant the u.s. administration and the tariffs it is placing on car imports and exports. how is it impacting jaguar? ralf: at the moment, it does not impact us. overall, i want to emphasize that we want to see free and
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fair trade all around the world. it is the basis for further wealth of society and people. we can learn a lot of these things for the benefit of the society. mark: tomorrow is the one year to go date when the u.k. leaves the eu. ,iven your presence in the u.k. how do you view the auto industry's future as uncertainty prevails in the process and the auto industry is such a key part of the u.k. economy? industry istomotive really revitalized in the u k and the important part of the overall economy. i am hoping that in that case,
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we see the kind of protectionism -- the opportunity to hire people to create better value and better products. vonnie: are thanks to ralf speth, the jaguar land rover -- our thanks to ralf speth, the jaguar land rover ceo. this is bloomberg. ♪
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mark: battle of the charts, we take a look at some of the most telling charts of the day. you can access these charts on
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the bloomberg by running the function featured at the bottom of your screen. kicking things off today, mike regan. mike: i am excited about trucks today and the reason is trucking pricing in the u.s. has been rising aggressively to the point where it might start impacting some company's profits like we saw with general mills. i was looking at the fdr trucking index which gauges the state of the industry. two interesting things about it. the red columns are recessions. you can see how this index dips into the negative territory well before a recession. also it is very forward-looking. the most recent reading is in that circle, so what it shows is the trucking industry is red hot right now and should continue to get hotter over the couple months -- months but then it should cool down in the back half of the year but not enough to signal problems.
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vonnie: you can find that chart at -- mark: you can find that chart at g #btv 1499. one of the parts of my pitch is the number. 1234. stocks and bonds, they don't love each other anymore. it is a lost connection. the correlation has gone 20. jim byanko says it is unaligned. some buying up stocks yesterday, but that correlation, the 120 day correlation between the vix in the move is at zero again. you can see that chart on the bloomberg at g #btv 1234.
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mark: you get a bonus point for the number. a lost connection sounds like a sandra bullock george clooney movie. i am into trucks. mike regan is the champ. off-the-cuff are fokkeuit supply founder de jong. this is bloomberg. ♪
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vonnie: why fit in when you can find the perfect fit? that has been the suit supply company mantra since it started nearly two decades ago. like it is a new on the channel type of company but it
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has been around for a long time. with us now is the man who started it all, fokke de jong. you have to be careful with that name, fokke. have been around since 2000 and yet you are doing it better than nearly anybody. explain how. weke: we don't just fit in, tried to find your perfect fit in how we can communicate about the brand but also in our models and i think in that 18 years ago, we started as a direct to consumer online company and we found out for a company like ours, people still want to have stores. we use online driving people to our stores. it allows us to have stores and now over 100 locations worldwide in cosmopolitan citizen -- cosmopolitan cities.
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be where theto not usual suspects are but find our own locations and that helps in the bottom line. vonnie: every day, it seems like we are reporting on another retailer going out of business or having trouble. yesterday, it was h&m. how are you solving those kinds of problems? with onlineroblem is it is a garden of eden for inventory. it looks like everything is there with your phone and that makes stores look like, the chance of being it is satisfying shopping experience -- of it being a this satisfying shopping tisfyingce -- a dissa shopping experience. technologies in all of our stores so we have 95%
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inventory and that allows us to help that inventory to be there when the customer really wants it. mark: given how much retailer is changing and how you are going , tryingying to reinvent to do everything different, whether it is inventory, marketing, real estate, how do you envisage retail in five years, 10 years? how different will it be? fokke: let me try five years. i think there is going to be retail for products that need retail. a product like ours where people want to have personal attention and personal advice, it is a relevant place. it is also relevant for online. we see online in a place where people want to have personal advice and talk to somebody in customer service.
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we are trying to merge these worlds. if you are shopping online, you can talks -- you can talk to somebody in store and vice versa. we are making it a personal journey that is connected to the person that helped you. vonnie: you are fresh off of the menswear summit in new york city. what was the feeling there about caning, like whether you scale a store like yours. fokke: we are about relative scaling. we have 35 stores in the u.s., 100 worldwide and we grow relatively because we want to make sure our execution is done right. we are about making a beautiful product with italian fabrics, a lot of handwork. if you get the wrong size, then that does not work. we are about making sure there are people in our stores that are very well-trained, so we grow relatively in a way that we
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can maintain that quality. vonnie: we have to leave it there. will these tariffs impact you? your suits get made in china, right? fokke: the labor is in china and the fabrics are in italy. relatively, i think we are going to be ok. vonnie: the ceo and founder of suit supply. let's check in on the markets. the s&p 500 and the nasdaq which is the laggard. it is not as much down as it had been. this is bloomberg. retail.
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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> it is noon in washington. i am shery anh. david: and i am david westin. welcome to bloomberg: balance of
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power. shery: how are republicans feeling about president trump's push for more tariffs and what are the chances for tax reform part two? kevin brady joins us in moments. suv,dillac unveils its new is the company worried about whether tariffs will hurt its business in china? we will talk to the president of cadillac. speaking of china, president xi has just posted north korean leader kim jong-un. is china 100 -- 100% back on north korea side? we will -- north korea's side? we will discuss. ♪ shery: let's get a check of the major averages.


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