mark: i'm mark crumpton with first word news. in russia, a court has upheld the nine year prison sentence handed to american basketball star whitney greiner for drug possession. police say they found canisters containing cannabis oil in her luggage at an airport. the biden administration reportedly offered to exchange greiner and another american held in russia for a russian arms dealer imprisoned in the united states. italy's new prime minister unveiled her policy priorities to the lower house of parliament earlier today in her speech, she

vowed to respect eu financial rules but criticize the european central bank's decision to raise rates. >> to be a rational choice that could have repercussions on bank lending to households and businesses. as compounded by the decision made by the central bank to end beginning july 1, 2022. it creates further difficulties for member states that have elevated public debt. mark: her sharp tone comes as frankfurt officials are ready to raise again, probably by 75 basis points. ukraine's president says his government needs $17 billion in immediate financing to cover a budget gap. global leaders met in berlin to map out how ukraine would be rebuilt after the war with russia is over. the german chancellor says the

country's backers will probably provide assistance as long as it takes. financing higher education via individual borrowing is making inequalities in the country worse according to the jane family institute. the nonpartisan research organization found in black and latino neighborhoods, roughly 75% and 60% of our worst respectively had balances that exceeded the original loan amount. that compared to 50% in white neighborhoods. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. >> welcome to bloomberg markets.

>> green on the screen yet again, the s&p 500 up and the bond market catching a bid down 14 basis points on the 10 year yield. a lot of this triggered by what you are seeing in the eco-space. you are starting to see housing market pressures drop and prices coming down. you have consumer confidence numbers starting to slip. does this lead to a fed pipit? with the yield move, we see a weaker dollar. the bloomberg dollar index down .7%. with that weakness in the dollar, not only an equity rally , but brent crude still trading at a 93 handle. jon: let's look at some individual waivers in u.s. trading. a nice pop for shares of paypal with amazon testing venmo payments. those shares, paypal up almost

6.5 percent. we continue to roll through these different earnings stories. the dow component is a little weaker. a little cooling for the u.s. dollar but the general strength of the greenback taking a bite out of the sales picture for 3m. corning under pressure given its outlook. a mixed bag with a company like ge on the one hand, encouraging signs from the aerospace business being offset by some woes for its wind business. kriti: from a macro perspective, investors looking for the answer to one question -- is this rally sustainable? sam stove all, perhaps with a sweet spot on the markets. sam: we are in the best time, the sweet spot for that market, october of midterm election years to october the year after have posted an average total return of 21% since world war ii and has risen 100% of the time. jon: stocks coming off their

best week since june, even with economic uncertainty still out there. meanwhile, a bellwether stock like ups delivering a fresh dose of optimism, doubling down on its for your guidance. it felt like a recipe where the company is keeping its site on costs but it has some pricing power with its customers in the street seems to like that. >> that's exactly right. they did talk about shipment volumes coming down compared to last year but last year was a wild year. a lot of post-pandemic or mid part of the pandemic bounce back going on. so this is a little smoothing out, but they have been able to counter that with cost increases and cost cuts. they have done a lot to avoid the pricier parts of the market where they were not making money

-- a lot of last mile livery, when -- last mile delivery, when you are getting trucks to homes can be unprofitable and certain parts of the country and they handed off to other partners. they found a labor contract that is going to come due next year but is not a factory yet. they've had's -- they have not had the volatility that fedex has had. kriti: we are getting breaking news -- the tesla twitter saga continues. the headline is elon musk plans to close the twitter deal on friday. you are seeing shares trading at a 53 handle, a massive spike. we will keep you apprised of the developments there, but this will be crucial given that we are getting closer to the $54 20 cents deal. do you have some sort of merger

arbitrage priced into the stock going into friday? that's something we are keeping an eye on. but i want to come back on ups before we continue our twitter coverage and talk about whether this is going to sustain. we heard about truckers last week warning the slowdown is going to continue into 23. will ups'success continue into 23? crayton: whatever you think is going to happen with volumes, and every buddy thinks they're going to go down, it's just a matter for how much and how long. the union has been feisty in their commentary about negotiations, but that contract comes due in june and that could be a major point. a strike is not off the table and that would be a significant disruption for ups and the whole economy. kriti: certainly a lot to keep an eye on. the story with ups is fascinating when you are talking

about an economic perspective, but something i like to look at from an economic perspective is the social media names. after the bell, we get alphabet. we like to look at them as a bellwether for the advertising space. if you are bullish on the consumer, you are spending those ad dollars. if you are not, not so much. tell me your take. jon: it's very true and obviously for those companies that have stock prices, they are going to react to a big way to that news. we will get a sense on the mood surrounding social media players. the story around twitter is different because we know elon musk has done that deal. let's bring in ed ludlow who has been tracking the story. the specifics are elon musk had a conversation with all the big bankers about getting to the finish line. ed: correct. according to bloomberg sources, elon musk held a video conference with the bankers. the intention, according to musk, is this deal closes by

friday. 5 p.m. eastern time on october 28 was the deadline imposed by the delaware judge when she issued a stay of proceedings because musk had reverted back to the original $54.20 a share offer. it is another sign we are moving forward. we use twitter stock as an indication of wall street sentiment that this deal gets done. there's a lot going on this week. we are hoping we get some resolution on this sooner rather than later. kriti: $13 billion of financing on the line. i want to ask about the stock movements because we are still looking for $54 20 cents. you've seen it come off the 53 handle, trading just shy of that level. what are we waiting for from a stock perspective? ed: you read into this one of two ways. the stock at $52 90 eight cents, there's a little hesitation in

the market whether the deal goes through. elon musk's behavior throughout the course of this situation has been hard to track. but on balance, the market thinks and has always given high probability that it closes. around the debt, the $12.5 billion of debt with a $5 billion credit line, the markets take has been consistent but it would be almost unimaginable for the banks not to come up with that debt in the form of cash even if they still have to go to asset managers and try to sell it. market conditions have changed for this area of the high-yield market relative to how it was in april, but we are moving toward the right direction. elon musk owning to better and bringing it under a holding company where he moves toward and everything at where all the functionality of twitter is combined with a lot more.

these are exciting times. jon: just to go through this list again -- we've got some big banks and this $13 billion figure. you break it down, the share of debt commitment and -- branches out there a few different players. crayton: this is the crammed elect -- ed: this is the crammed elect from of wall street names. bank of america for 21%, barclays 1%, bnp paribas 5% -- coming up the bottom of the list is society general at 2%. the amount ranges from the hundreds of millions of dollars to $3.5 billion from morgan stanley. the two both .5 billion is split between secured and unsecured bonds and you have the revolving credit line as well as a chunk being a loan. musk has been calling income according to bloomberg reporting, equity or potential

equity financing partners. for me, that remains the biggest question. who else has he brought in sides the $7.1 billion of equity commitments? has he had to get more partners? that report verified by bloomberg musk would lay off 75% of twitter's workforce. the headline was the layoffs, but it was the action of trying to bring more equity partners on board that was communicated, so there might be surprises there. kriti: certainly something we are going to keep our eye on. as we are speaking, or shares trading at $52 86 cents. we will keep you apprised of all the share moves. this is bloomberg. ♪

kriti: this is bloomberg markets. we just got some headlines that elon musk is potentially looking to close the deal on twitter as soon as this friday. that's boosting twitter shares to the tune of $52.81, just shy of that $54 a share. walk us through that timeline -- if he closes the deal friday,

what happens next? ed: a very short timeline between here and friday, which is the data that court set. what is happening now is procedural. the debt financing is sort of end update. twitter will come as far as i understand, not trade on friday. essentially, the deal will be closed and done premarket friday. that should be that. we have a slight overhang of letter -- of whether the government does look at the deal after the fact. they have the ability to litigate after musk is close and whether twitter gets paid at the price agreed seems almost a certainty.

jon: there is an interesting road ahead to watch with respect to where this debt land. you've reported extensively on that. can you explain what these banks are going to be doing? the fact some of this debt, arguably a large chunk of it, we don't know which investors will be owning it. ed: i think the banks will be kicking themselves. what looks like a very different world from today, it's going to be very hard to get in the way of the market. the report is around the idea they will hold onto the paper for a while and look to syndicate it once things improve. it would be difficult and quite costly. similarly with some of the equity banks, some have loudly

expressed their willingness to back musk. we now understand they are not as willing as they once were. i think people who really tied themselves to the deal are thinking maybe we should have waited and been a little more careful. jon: thanks very much for that breaking news reporting. ed hammond, who helped to break this bloomberg exclusive story. staying with the world of technology, we want to get some more perspective with ted mortenson who works on the technology desk as a strategist with baird. you are already booked to join us and talk about what the expectations are for big layers like alphabet. just in terms of the business of twitter which undoubtedly people are going to compare to what is happening at alphabet or what is happening at meta, how would you characterize what is happening in that industry right now? ted: if you look at marketing in

general, this is a bad recessionary environment and marketing is the first to get cut. i don't think that's going to be a shock to anybody we are up against, not only difficult comparisons in advertising year-over-year but the budgets are being rationalized now. as it relates to the post i dfa apple environment, if you look at pinterest, snape was a disaster last week, i think you can throw twitter in that bucket a little bit. if essentially you don't have captive a network and don't have the machine learning and ai to actually mined the data like google and amazon and others have that captive network, it's up to the advertising -- the advertisers to see what kind of relevance you are going to get off those advertising ai.

as twitter goes forward, last quarter, they had an operating loss of almost $344 million, so it will be interesting as a relates to what eli and does rightsizing the organization. -- what elon does rightsizing the organization. i think the proof is in the pudding, but google, the google report with 58% of their revenue coming from search and it was up 14% last quarter is going to be a critical data point on how good or how bad advertising is. kriti: that will give us a london to the consumer, but i'm serious about business investment. i feel like microsoft is the perfect name when it comes to the cloud business. what can you tell us about the business investment side of it? ted: i think everybody is standing by to see. we had six or seven quarters of robust cloud growth and investment.

this is the right question to ask. generally the cycle last about six to seven quarters of build and then there's some kind of digestion. in this cycle, it's a little more murky because we have global economic headwinds and to see what these cloud titans are going to do is spend. we've been at at unbelievable investment area and revenue run rate. if you take amazon, aws is 16% of their revenue. they grew 33% last quarter. if you look at google's number three, call it 7% of google's revenue and then azure grew 36% last quarter. where we are focused on the cloud area is can we keep this investment up and from a second

derivative standpoint, that can be from a growth standpoint where we are talking about a sequential decline either on a dollar or growth basis, that is what people are waiting for. i think there is generally a bias to rationalize spend but we will have to see it in the numbers. jon: lots to consider. thank you very much. we appreciate the preview and reaction to the twitter news. stay tuned for the technology latest. coming up, adidas and gap the latest brands to cut ties with ye over at the rappers anti-semitic marks -- remarks. how much is that set to cost them? we will find out next. this is bloomberg. ♪

jon: this is bloomberg markets. i'm jon erlichman with kriti

group to. time for today's what it's worth. a quarter of a billion dollars is essentially how much it is going to cost adidas to cut ties with ye. the athletic giant will take a massive profit hit to cut its ties with the designer whose line had grown to represent 8% of the company sales. after ending the partnership with the label last month, we are learning gap will be playing all remaining products from its stores and online as this story has continued to snowball. kriti: it is something we are going to keep an eye on when it comes to the shary action. gap shares in the green but fading on those headlines. for the broader market, you are seeing some green on the screen. take a look at the s&p 500 -- a rally of 1%. the nasdaq up one point 6%. some outperformer's in the tech space head of the heavyweights after the bell. the 10 year yield, 14 basis

points drop in the 10 year yield taking down the dollar with it. stick with us. bloomberg markets the close is next. this is bloomberg. ♪

mark: keeping you up today with news from around the world, here's the first word. i'm mark crumpton. a russian court rejected an appeal by wnba star brittney griner against her nine year sentence for drug smuggling. it means the two time limit gold medalist will be sent to serve her prison term in a penal colony in russia. >> it is honestly tragic that she had to spend her birthday last week in a russian prison rather than at home with her family and on the basketball court with her teammates.