The u. S. Welcomes trade partners and warns them. The weeks best interviews help make sense of a topsyturvy world. There was a notion of china taking on the globalization. There is tremendous potential for aviation in india. The scenario has improved from the beginning of the year. Free trade for future growth, future business development. You want to make sure is that companies are making investments based on the inherent value of the investment, not on a particular tax scheme. Scarlet it is all straight ahead on bloomberg best. Scarlet hello and welcome. Im scarlet fu. This is bloomberg best, your weekly review of the most important Business News, analysis, and interviews from Bloomberg Television around the world. The week began with political maneuvering in the u. K. Britains embattled Prime Minister theresa may moved to shore up her support in parliament while pushing the brexit agenda forward. Vonnie Prime Minister theresa may strikes a deal to keep her grip on power. Northern irelands Democratic Unionist Party will support her minority government on key votes. It gives her some certainty through the rest of the week, which is what she will be happy about for now. On thursday, parliament will vote on the legislative program she unveiled last week and now with the 10 lawmakers in the dup, she should be able to carry that through without difficulty. Vonnie speaking of parliament, a short time ago, the impact of the deal on brexit negotiations and the future of e. U. Citizens in the u. K. Prime minister may mr. Speaker, this is a fair and serious offer. Our obligations in the withdrawal treaty in the e. U. Will be binding on the u. K. As a matter of international law. And we will incorporate it into u. K. Law, guaranteeing we will stand firmly by our part of the deal. There are areas of compromise. The big Sticking Point is likely to be the power of the European Court of justice after brexit. The e. U. Would like it to continue to have a say in british law, arbitrating disputes about citizens rights. The u. K. Would like to rid the british of the ecj, and so theyre saying that theres no role for the ecj to play beyond brexit. Obviously, that is a big area of disagreement and there are others contained in this document. It is going to be something that is negotiated in the next few weeks. The Ransomware Cyber attack has struck firms across the globe. The virus locks computers and demands 300 in payments to allow access. The high concentration of victims are in russia and ukraine, including the russian state run rosneft. British Media Company wpp and danish shipping giant maersk have also been struck. The attack was similar way to last months strike and use to similar virus and identical demands. One of the piece of connective tissue that links the wannacry virus earlier in may and this infection today, its the main mechanism for spreading is a weak nsa exploit from the u. S. Government. That exploit targets a piece of Microsoft Windows software that has been patched for many months. That is not the only mechanism, but thats the primary mechanism. And it is a reminder to companies that just because that earlier infection was stopped, actually thanks to some careless coding by the hackers, does not mean the future ones will be as easy to stop. And it looks like the attackers took some more care in preparing this set of malware. The virus advanced from russia and the ukraine. It kind of went out to europe and ended up in the u. S. It moved on into india with reports it is now moving on to china as well. So far, there has not been that widespread of an impact in asia. I think that is partly because there is not a stringent disclosure requirement on Asian Companies as there is in other parts of the world. Mark Senate Republicans have decided to delay a vote on the Health Care Bill until after the july 4th recess. At least five gop senators have said they wont even back a procedural vote on the measure that was supposed to take place this week. Kevin Vice President mike pence working capitol hill earlier today trying to muster enough votes for the health care passage, but at the end of the day, the numbers did not add up. The math was not there. This is a major setback for mitch mcconnell. He was hoping to get this passed pretty quickly. Within really a week of releasing the bill, which wouldve been a swift effort. But hes still got room to maneuver. Hes still got some cards to play. I think hes going to be pulling out all the stops he possibly can. The name of the game for conseratives is to make sure they remain energized and that the left does not scorn them. We are getting the headlines for the second round of the bank stress tests. 33 banks overall acing the feds stress test result. Capital one has conditionally passed the stress test. So it got the ok, but it must resubmit its capital plan, so it is not a clear passing. Every time they do this with the qualitative section, the fed is a little vague on what they find fault in. Its prophecies and Data Collection and all of the other kinds of systemic, how they look at their risk. So they again mentioned the same things, how they are looking at their risk, and they mention one of their biggest, most important material businesses they werent looking at the risks properly. Everyone has passed, even with a conditional, it is a pass. And that means they are going to increase their dividends and Share Buybacks. The fed told big banks they have more than enough capital and lenders unveiled how they are trying to generate investor interests. Citigroup may purchase up to 50. 6 in Share Buybacks. Jpmorgan says it is boosting its Quarterly Dividend 12 and may increase Share Repurchases to 19. 4 billion in the next 12 months. I think the banks thought that regulators asked them to relativemuch capital to the risks involved. The first opportunity they get, to return capital to shareholders one way or another , they are going to do it. The symbolism is that the pendulum is probably swinging away from the build up of capital and back toward bringing the capital ratios down. The fact that the numbers suggest that banks are going to pay out all of the money they are projected to earn over the course of the year, tells you that the banks are ready to start reducing the e, the equities in the equation to try to boost returns. Pretty good for people who own the stock of those banks. Shares of blue apron made their public debut thursday. But the stock gave a muted performance in its first day of trading, literally unchanged by the end of the session after the company lowered its ipo price to 10 a share from an initial range of 15 to 17 a share. What happened, how much does this have to do with amazon and whole foods . A good bit does have to do with amazon and whole foods. Looking at the trading today, the fact it was unchanged, it was unchanged, and close at 10 a share. We had an aftermarket trade at 9. 95. Below the ipo price. It seems like there is a bit more investor concern baked in as well. Mark the market story of the week treasuries heading for their biggest weekly loss since march and stocks, theit worst they worst week in two months. I think that the bond market has been telling us we will be in a modest growth, modest inflation environment for quite some time. It has also been telling us six hikes in two years from the fed is a headwind for the economy, not a reflection of an accelerating economy. So for us, stock valuations are a little stretched here. We are looking for the market to finish this year, 4 to 6 lower than where we are right now. We do not think this cycle is over, but i think the second half of this year, there is multiple headwinds that will be a little bit of a problem for stocks. The 100 most expensive stocks in the s p out of the 500 are, have only been more expensive relative to the rest of the market in 1999. So, you could easily see a significant correction in those. That is where all of the capitalization is. Scotts right that theres the possibility of that 5 or 6 drop but it would be centered in the expensive stuff we might have seen the beginning of that in the last two or three weeks. Thats the beginning of what the trading has looked like. Scarlet still to come, as we review the week, italy arranges the rescue of two struggling banks, but the finance minister insists it is not a bailout. Plus, ceos talk about the new reality of protectionism and how they are working around it. And up next, more of the weeks top business stories. The Worlds Largest food Company Becomes a target for activist investors. A rather long wish list that we saw coming out last night, saying they should make acquisitions. Scarlet this is bloomberg. Scarlet this is bloomberg best. Im scarlet fu. Lets continue our global tour of the weeks top stories with a european regulator coming down hard on a u. S. Tech giant. Google has lost its biggest regulatory battle with a record 2. 7 billion fine from the e. U. Following a sevenyear investigation into the companys Comparison Shopping service. That is the biggest ever competition fine from the european commission, doubling the previous record handed to intel back in 2009. You look at amazon, they are doing incredibly well. Ebay, likewise. Wheres the evidence the competition has suffered materially . What we have found and studied intensively, i think with 5. 2 terabytes of data, is that there is a very close relationship between visibility and traffic, and traffic and revenue. So, what you see is that google has taken advantage for its own shopping comparison on the cost of its rivals. And being able to do so by misusing the dominant position in general search. And that is the key of the case. Francine italy has approved emergency rules for two ailing banks in the northern region, mobilizing as much as a 17 billion euros to liquidate lenders and sell their good assets. On friday, the European Central bank declared the lenders failing or likely to fail and said both would be wound up under italian insolvency rules. What does this tell us about how lenient the commission and the e. U. Are when when it comes to bailing in . And what does it mean for just italian banks . I think first of all we have to say the bail inlaws make a lot of sense. Everybody believes it is a more political way to go forward. But i think you have to get to a starting point before before you can actually apply those across the whole marketplace. I think it is really clear italy has its own idiosyncratic problems around senior debt holders and the e. U. s having to get italy to this point in time where they can say, from now on, it is bailins. This is what we will be seeing here. Takatas filed for bankruptcy at home and in the United States, claiming liabilities of 10 billion and confirmed the sale of its core business to key Safety Systems for 1. 6 billion. For car owners, it is good news because it does mean the company will continue to operate and that it will continue to produce the airbags needed to replace those. The takeover by key Safety Systems means there will be new investment in the company in order to produce the massive number of airbags needed to replace the faulty ones. Bond holders, less good news for them. As well for companies that have all kinds of liabilities with takata. You know, now that they are a bankrupt entity, there is less money in the pool for them to pay out on those, so there will be a big gap between what their liabilities are and the cash they have on hand. And that will have to be worked out in court. Nestle is coming under pressure from activist investor dan loeb to sell a 27 billion stake in loreal. The aim is to get them to shed underperforming assets in high growth areas. A rather long wish list we saw coming out last night saying they should make acquisitions. At the same time, they should shed underperforming assets. Nestle is a huge company with 2000 brands, there are lots of areas where they can probably improve and he says as much. He wants them to improve their margin. Many areas where he sees opportunity and he says there has rarely been a case where there are so many areas where you can improve and that is why he has gone in. Nestle has announced a 21 billion Share Buyback and says it is looking for acquisitions days after dan loeb called for a shakeup. Is this nestle buying time or giving in, or pursuing a plan that it already had in place . Its quite dramatic doings on the shores of lake geneva two days or less after dan loeb bought in. So it certainly looks like they are moving aggressively to respond, whether this was, how long this was in the works, we dont know exactly at this point. But clearly they are signaling a willingness to engage with the activist and with other investors. Francine shares of the rental car company avis jumping 21 after it reached a deal with waymo, the self driving car unit of alphabet. The service will manage the fleet of about 600 cars in phoenix. Avis competitors shares like hertz are up 13 . What will the terms of this deal be . What is required of avis . Right. A pretty small deal. We saw people on twitter are joking that avis is just changing the oil for the cars. They are doing just service and storage, but it does show the reason i think that hertzs stock jumped today, is it shows that the rental Car Companies could play a significant role in this fleet and could play a significant role. Earlier this hour we learned that apple is working with hertz, testing selfdriving technology in a small fleet of lexus Sport Utility vehicles. Apple is leasing some of these lexus suvs from hertz, the traditional Fleet Management unit. So that came on the heels of the avis report that we did earlier today. So we put out the apple story this afternoon, and as we noted the shares are moving quite a lot on it. The bank of England Governor Mark carney has planned along with his Financial Stability team to increase Capital Requirements by 11. 4 billion pounds to tackle risk posed by Consumer Credit growth and prepare for uncertainty of brexit talks. Mark did the boe buy stealth, announce a tightening of conditions today, policy today . It did, in a way. There has been a big split on the Monetary Policy committee recently. And carney, of course, sits on both the mpc and the spc, which looks at Financial Stability and which took the decisions today. And by raising the capital buffer, thats in essence, tightened conditions a bit. So it kind of gives carney more leeway in terms of holding off on any changes in Monetary Policy come august. Mark a lot of action in the currencies as we hear from the Global Central Bank leaders in portugal. The euros rebounding after falling to a new low against the dollar after the ecb said the market misjudged president Mario Draghis speech. Meanwhile, the pound rising as boe governor mark carney says removal of some monetary stimulus is likely to become necessary. The euro and markets have reacted very strongly to a speech by draghi yesterday. They euro depreciated, bond yields have gone up, all of this is putting in danger the progress that the ecb is doing. It was sort of a message control. It is a way of saying that draghi is not signaling any imminent tapering. Mark mark carney now saying the bank of england may need to begin raising rates. Earlier, week ago, he suggested he was not in that camp. His comments today now suggest that august 3 will be quite a tricky meeting. Im not sure you will get a rate hike. We are getting close to that point where the tradeoff between tolerating higher inflation may not be worth it anymore. Jonathan Rupert Murdochs 21st century fox inches closer to securing sky in the u. K. The first we learned from the u. K. Government there were a they were inclined to refer them to a regulator and then we heard from the regulator that they see no broadcast standard concern. Is mr. Murdoch a happy man for the news out of the u. K. Today . It is really interesting to see the sky shares surge. I think they are surging because this is not the worst Case Scenario for fox with its proposed takeover of sky. The worst Case Scenario is an outright rejection. What the government has said is that they are planning, they are minded to review this for additional regulatory review which could take another six months but it is definitely not the worst Case Scenario. Walgreen Food Alliance has scrapped its merger agreement with rite aid which was being reviewed by regulators. Instead, it will buy 22 rite aid 2200 rite aid stores. And those stores will be converted to walgreens. Walgreens will pay rite aid a 325 million termination fee. Its always been obvious the remedies walgreens and rite aid put in front of the regulators were insufficient. They pushed back the time for getting this done again again and again. What they have come out with today is interesting. They said we are going to do a deal but we are going to only buy a small proportion of stores rather than buying the whole company. The really interesting question is what happens to the rest of rite aid . Scarlet you are watching bloomberg best. Im scarlet fu. The health of italys Banking Sector under scrutiny as the government allowed the secondlargest lender to take over the good assets of two failed banks for a token amount. Bloombergs mark barton discuss th