Hello and welcome. I am mark barton. A warm welcome to the first hour of the program. It is 6 00 a. M. In london. Lets get to the top story. More than 100 World Leaders gathered in new york for a United Nations summit on Climate Change. Among them was u. S. President obama urging action while there is still time. There is one issue that will define the contours of the century more genetically than any other. And that is the urgent and of a changing climate. The chinese delegation was there. Some commentators suggesting these are bold commitments coming. Bigger than they have made in the past. President obama saying the u. N. Money is helping emerging markets. Key to this conversation is the level of development. Obama has called Climate Change, which was a key part of it hasction campaign not been embraced by everyone in congress. This is the moment when the rise of the oceans began to slow and our planet begin to heal. They almost laughed at him. They say he would have no better luck with the tides than the 11th century monarch. We also have oxfam america. They say the policy does not reflect the whole the president s rhetoric. It would be impossible to to limithe agreement rising temperatures without more substantial action by congress. Oxfam saying more is needed by congress. Criticism for different reasons. What does business make of it, or what are they doing to help the fight . Here is caroline hyde. It marks it apart from there has been some declarations. Key among them was an oil and gas player. Coming here from europe. They said they recognized they want to be recognized as the most carbon efficient producer. Clean air, they want to see and share in best practices. They are committed to reducing methane. This is where a number of players got involved. They want to reduce methane production. There seems to be a growing voice for a price on carbon. Ring down ifu can you charge for it, whether you put a cap on it, or indeed you just tax it. Charge was that the five dollars per ton in a carbon tax. Ton for a carbon tax. Joining them coming have had nestle. 30 companies committing to saying, we want a Carbon Pricing. One that is a longterm way of making our own business decisions. It is the world bank doing some of the heavy work. They are sending Many Companies up. Investors as well. Mars came out, a confectioner will 2010 says they said they wanted all their factors to be renewable. And apple, tim cook come up paid a bit of lip service. Howre Asset Managers forcing the issues . One sure way to get companies listening is if investors say, we are not going to buy your shares. We were mentioned in this yesterday. A campus movement, gaining momentum. Its got a significant play yesterday. They managed to sign up Rockefeller Brothers fund. It is linked to the Rockefeller Family, which made most of its money from the standard oil company. This is a real sentiment to move for a company, born of the fact that it has made money from oil and gas, is shying away. They are not going to be buying the largest Coal Resources or exxon. You should be shying away from investing in companies that plow into destroying our climate. Investors, 188 billion california teachers retirement system, will boost investment in clean energy. 3. 7 billion in the next five years. Double tofett will 15 billion is investment in wind and solar. Once you have big money, once the money starts walking, coming as well walk the walk and talk the talk. Pfizer is launching another prize. They have expressed an interest in an acquisition. Our International Correspondent hans nichols has the story from berlin. Good morning. Pfizer does not seem to be deterred by the ruling announced by the Obama Administration. That would be one way to look at it. It seems to be the correct way to look at it. This is a fantastic story. Our colleagues at Bloomberg News broke it overnight. It shows what the u. S. Is trying to do to stop in versions, or rather the limits of what they can do without legislation. Even after the rules were announced, they concluded it was a convocation and not a prohibition buried complication and not a prohibition. Inquired acquired an irish tax domicile. They could end up paying the market cap, which is around 63 billion. The previous bed got hostile, a 14 billion bid. It was rebuffed. Share prices went to high. What is interesting is you look at what the u. S. Is trying to do in terms of stopping in versions. They are looking at the funding. If companies can find a different ways to fund in versions, the u. S. Is powerless to do anything about it. Bigmits articles pharmaceuticals have creative accounting and lawyers. Shares fell 3. 5 on this news. Are they still interested in astrazeneca . A personing to familiar with the matter, they are interested but they dont with the bid to be hostile. They want it to be friendly. There is a cooling off. End of that, they will and and have a chance for another bid. Here is the issue. It could be a november. That is after the u. S. Midterm elections. Love the political rhetoric of this might be dialed down. Inverting, however you refer to it, it may be more politically palatable. Thanks hans. Hans nichols in berlin. You can join in our conversations on twitter. M we will take a short rake. Break. Looking at the opportunities theoreign exchange with global fx strategist. For todays company news. Barclays was finds twice in one day for failures. It has agreed to pay a total of 77 million in fees. For the u. K. , they will pay a fee for failing to protect clients. The company replicates businesses from groupon to airbnb. They could be the largest for germany this year. They will list on the Frankfurt Stock Exchange on october 9. The american subsidiary of rbs raise 3 million in its ipo. To shedallows them assets and boost capital. The stock will start exchanging trading on the exchange today. Business the Business Confidence index was released today. Lets talk to a strategist. Today. Xpected disappointing data on pmo. Further more reasons to sell . We think so. Now, when numeral see the weaker reading in the ifo as well as , the euro has been trading heavy and this will be another reason for it to do so. Not just against the dollar but the t10 currencies. 120 seemed to be a key level. Draghi would like to move the euro down to 120. Where deftly headed to 120. We have 125 for the end of the year and 118 for the end of 2015. We think the euro is headed lower. Is between 120130. In fair value by some estimates, but we have some way to go given the weaker cyclical dynamics. You said in your notes that the tepid reception, the targeted loans, they are not doing much to support the euro. Draghi doesnt want them to support the euro, does he . He doesnt want them to be successful . Which is the most important to him at the moment . The trp owes are extremely trpostant to the ecu r are important. Look at the two to number two together and dont read too much. They look at a broad range of variables. They want a competitive economy and to do Everything Possible to stimulate growth. That includes boosting the liquidity. Having in the a Competitive Exchange rate. Ratesw germanys exchange are dependent on external demand and a weaker currency. They need to continue having strong export growth, particularly to china. Extra euro area trade is important. Domestic demand is weak. We think it was probably week in terms of take up because of the incentive to wait until december. The december number will be key. The plan is to increase the Balance Sheet by roughly one trillion euros. Will that include buying government bonds or not . Is the key question that everybody keeps thinking about you read and, we thought we would see broadbased asset purchases we think there is a 5050 chance that will still happen. We need to get the lending going in the eurozone. We need to get the transmission mechanism going. We have liquidity, just know banks lending. Is there danger of a qe program, the longer we talk about it, the less effect it will end up haveing . We know when Central Banks act earlier, it does tend to have a bigger impact. Truth. Re some trent but when they engage in more aggressive measures, it will have an impact. If we see qe, the euro will weaken. More chat on the currency markets in a minute. Phyllis. Shes the global fx strategist. Stay with us. Welcome back. This is countdown. we are back with phyllis. Lets talk about sleepless nights. Should we compare notes about how little sleep everyone had . Convinced the solid fundamentals behind the u. K. Economy rate expectations, that continues to push sterling a lot even in the face of of conversations about constitutional reform and devolution . Upwards is the way for sterling. Now that we have the referendum out of the way, we have a key uncertainty out of the way. People were really uncertain and about what the outcome was. In the the argument runup to the referendum that the fundamentals in the u. K. Are strong and solid. The pm eyes were wobbly last month. Pmis were wobbly last month. The bank of england was on course to raise rates. Political risk doesnt dissipate with the election taking place may . It all takes place in 2017 . Do we configure that into the thinking or not . The referendum will be a bigger event risk than the scottish referendum. Both the election in the u. K. As well as the referendum. That is next year. In terms of the mediumterm, macroeconomic policy and fundamentals in the u. K. , when you compare them to the rest of solid10, they look particularly against the eurozone. Euro sterling is a key trait of ours. Fox lets talk about the global forecast. Where you see the chinese growth story at the moment . How influential is that driver . People Pay Attention to china because they are a major consumer. They export as well. We are looking for 6. 8 growth. Sub 7 growth. There are clear signs that china is slowing. Clear indications that the policymakers will have to act again to boost the chinese economy. That does not send a positive signal. Major trading partners. Within the g 10 space, use a the yen and the new Zealand Dollar are the most oversold. Yes. The only one you would buy is the new Zealand Dollar. It is not a funding currency. The yen is the most oversold but there is a good reason. That is the currency you fund with. Fund longpeople positions in the Canadian Dollar. The Canadian Dollar is undervalued in our view. The new Zealand Dollar is oversold. We have in our bm it can be said for a number of other g 10 banks. Aat currency and from positioning perspective looks unjustifiably low. You have been revising up your figure. Is that for a good reason . What is the reason for that. They are now sitting the timeline for normalizing monetary policy. They are operationally ready to start normalizing rates. The revisions to the forecast were largely on the back of the move in the euro. Our view that the dollar yen would trade higher. We have seen that already materialize across when you listen to the fed, d listen to the words or more to the dots. Equallynk both are important. We saw divergence. In some sense, it is normal to comments. Ence between we are at a Crucial Point where the timing of policy normalization when is the big hike happening . You to,are looking at 2015. Are looking at q2 will the blackberry new phone be enough to win back the business . We look at the business and how far it can take the company. Big data could bring an end to happy hour with some of your favorite drinks. We will discover how your is going hightech. Welcome back. Lets take a look at your fx check. Confidences business in germany fell for a fifth consecutive month. Up a fraction. The euro has declined by 8 against the dollar. Senior fxatted to the strategist at bmp. She said the projection for the euro is 125. 118 next year. Are at the high end of fair value right now, interestingly. She said the most undervalued currency in the g 10 is the yen and new Zealand Dollar. These are the Bloomberg Top headlines this hour. The pentagon says u. S. It led whereikes in syria prompted by a Group Planning a an imminent attack on the west. Arabnvolvement in the makes this the Largest Coalition since the first goal for. Gulf war. It is not our policy to discuss future operations, but last nights strikes were only the beginning. Massive amounts of supplies are needed in liberia, syria leone, and ginny. Guinea. A leone, and there is a probe involving European Union regulators. Therech bank is claiming was bias. The have opened an official investigation. Announce their ceot device since the new took the helm. Take on thenough to likes of samsung and apple . Quite a week to unveil your new phone. After the iphone 6 had record sales. A tough order. We will get snazzy and fancy events in toronto, london, and dubai. We have had a few details sent to us. It will be a square screen. Like a passport. It will be ideal for reading, editing documents. 4. 5 inches. Smaller than the iphone 6. Keyboard,ing to be a which is a been they have gone back to. Like ay in which usual keyboard on a computer. The price, allimportant. 599 u. S. Is about 50 cheaper than the iphone. Remember this is a comedy that has outsourced production of their hardware. Foxconn makes it all. They do the manufacturing. Smartphones are clearly still important. Even though we are moving to the services, we are moving more to enterprise and soft where, we still care about our devices. Sidebar, they did do an unveiling a couple of weeks ago. This is their flagship, their main device. They have been empathizing the software and the other parts of their business. It interesting they are bringing out the new hardware. I didnt realize some of the software they make is available on android and ios. They are supplying their rivals in the hardware business. The reason is because they are both trusted. It is known that Angela Merkel likes blackberry. They are far more secure. Will this do very well . It is clearly aimed front and center at the business community. They say the excel spreadsheets High Resolution to examine xray images. You can get things done. This is about trying to rake even for the committee. The ceo came on board and is trying to turn it around. Cash positive. Exactly. Take these steps. Citigroup is already saying, employers dont tend to buy phones. You bring your own. 1. 5 million phones abroad are bought by companies. It used to be 4 million per quarter. Apple sold 10 million over the weekend. This is a committee with a tiny market share. Still, samsung dominates. Apple has but 20 to read this is less than 3 in terms of market share. Back,ately trying to get but i dont think this will make much headway. When you are in the cold, there is nothing like a keyboard with letters you can feel , if you wear gloves, you are lost on a touchscreen. The kind with sensors on your fingertips. For more on the blackberry, we will be talking to the ceo at the toronto launch event in a first interview at 4 45 london time this afternoon. France now considering to expand itss lowcost arm. The carrier had often did we are joinedd by our transport correspondent. The plot thickens. Yesterday, speaking on french radio, said we might have to withdraw this project. This is a way to get into the lowcost sector. This would not be scrapping the actual airline. It would be scrapping the expansion plan, the expansion outside of holland and france. Concession. Big his way of getting into the lowcost sector. Is takings the strike hold and the pilots are winning. What reaction to we have from the pilots . Is enough to get them back in the cockpit . They were protesting out of the national assembly. A bit of a reaction from the government. They consider this the big embarrassment. It is time when the economy is not doing well. The Prime Minister were saying, this really needs to get resolved. You have to wonder when the government will get involved. The strike is still expose expected to end on friday. It may extend early on that. Beyond the bat. Who is benefiting . Which rival airlines is to mark you have easyjet. If you have inconsistency on the part of air france or business passengers that cannot get their flights, they will go to easyjet. All of a sudden, they are going to try it and think it works. Lets use them again. Thank you. Our transports reporter. What are the hottest yields one of the hottest fields in high tech is big data. Trying to make sense of everything from shopping to dating. It has never been used before for beer. We have more. There is an art to pulling the perfect pint. Now theres a science to go with it. Thede the walkin cooler, quality and quantity are being measured by these meters. The information is transferred to a box like this. By the bar analyzed owner and a brewer. Using the system has helped to cut waste and boost profits. It tells us exactly what to do. Offer the second one at halfprice. Up 50 , more profit. Sometimes even 80 more profit. The Realtime Data comes courtesy of an israeli startup. The breweries know how many cakes were shipped kegs were shipped. We tell them how they were consumed. What hours, what days. What regions. By providing them with this data. They can leverage it to a better marketing and sales method. It can also throw up some unexpected insights. One of the more surprising facts we found out is some of the beers consumed here is consumed when the bar is closed. That is probably be owner enjoying some beer. Certain times of the week and at night. Consumed earlier than strong ales. Be more targeted with their promotions. On the downside, they may also end up killing happy hour. Killing off happy hour. What a thought. A fascinating report. We call that big data. You could call it revenue management. If heirlooms airlines have been doing it for years. A different price because of the time of the day or destination. That is what they are talking about their. There. Data in every part of our lives. Nothing should intrude on the trip to the bob pub. Coming up, can cubbies afford to ignore Climate Change . Welcome back to countdown, i am anna edwards. For more on my bed geniuses wide businesses are taking Climate Change seriously, our guest is here. Washo you separate green from real policy commitments . That is a difficult one. The announcement over the next couple days shows this is not green wash. There are so many comedies involved. When i looked at the company data, it is over half of global gdp. They are looking for a simple and fair way to price carbon they said they need to tackle it and need government help. Is Carbon Pricing the main focus . Is that where we should be focused . Who is taking the lead . Governance governments or companies . You are saying is countries pushing governments down the road . Companies are realizing it is a risk for their business. Not just among finance and insurance, which have been the leaders. The big and exciting thing that is happening is Energy Intensive companies, ones which will find it to go to deal with oil companies. A number of cement companies. These face technical challenges in deke harmonizing. But they realize it is serious for their businesses. You have been working with a number of partners on various innovations. One caught my eye. One with the Scottish Government on a project to use waste from whiskey to reduce fish food. Talk about that. It is a fascinating story. Climate change but resources. One of the challenges we have it is we are fishing he sees out. There is a big demand for fish farmed salmon. The trouble is farmed salmon require wild fish food. What the researchers figured out is how they can extract protein from barley after using it to make whiskey. Isplaces anchovy fish meal. And makes the fish drunk. It helps them grow efficiently. It makes company that use the meal more resilient to Climate Change. The fisheans warm, move. The ocean as citified scum of the food for the anchovies becomes disrupted. Acidifies, the food for the anchovies becomes disrupted. There is a big need for Technology Change in tackling admissions omissions. One of the changes we were are is in the prices of technology. If you look at solar, the most extreme example, its price has dropped by 80 . This totally changes the equation for diplomats and politicians. They can see a technology that niche, starting to look like a viable thing. Let me give you an example. In hawaii, it is cheaper to get electricity from solar panels than to buy it from the local electricity grid. The same is true off grid in india and subsaharan africa. It is cost competitive in certain parts of the world. Big scale renewals, which are cheaper, are displacing fossil falls in the midwest and brazil. Coming about the commitment we have heard from china. There was criticism that the chinese delegation would be they made ahey pledge that a significant. There is a lazy narrative lists is thatenta china and the u. S. Are laggards. If you look at american diplomacy and the chinese commitments, which is what we need, these rc changes. Sea changes. Is the big question. Will we see change. Has there been a change since copenhagen . Evidence of a big change . One of the big changes is the difference in views from the chinese and americans, a commit ors. Big emitters. For ngos. Is they realize that what we need is a process rather than a single deal. It needs a certain amount of flex ability. What they are calling for is visible action before 2020. A clear Legal Framework that comes back and negotiates how we cut the motions best cut emissions. Dustin. Would you let a computer choose a meal for you that includes brockley and mangoes broccoli and mangoes . This must be an anna story. A countdown newspaper segment. Of the fact. Welcome back. Puras been occurring ring . Clean, the queen, apparently. Cameron was picked up oversight news. Over sky scotland, isn for isplayed all right calling and saying, all right. Defense cameras slightly concerned. Price. A should pay a looked tired. Im sure you are absolutely her career did not rest on the result. I a lot more makeup than david cameron. We dont know that. Back to grub. Lets talk about brockley. Broccoli. Ibm has a computer called watson. It is a supercomputer. They are teaching it to come up with recipes. Heds called he don it onic psychophysics. It depends on adam counts. Counts. Servants y plan presents you thought you liked the taste. We are meant to have brockley. Broccoli. According to the computer. The computer put vanilla in. Chickpea yogurt. Ragout. That doesnt sound so bad. It is fergie time. Hes not back, is he . The ryder cup this weekend when the europeans take on the u. S. Was told to make a motivational speech. It is taking place in scotland. Mcilroy. Ig fan of rory rory is a Manchester United fan. Come on europe, make it six wins out of seven. Second hour of countdown continues after a short break. 6 56 in london. Pfizer sets its sights overseas. Curbing Climate Change. A group of companies pledging to use Carbon Pricing and business decisions. Smartphonekberrys hits london. Talks to bloomberg first later today. Markham to welcome to countdown, i am mark barton. More than 100 World Leaders gathered for a u. N. Summit on Climate Change. Is president obama. There is one issue that will define the contours of the century more dramatically than any other. The urgent and growing threat of a changing climate. And was intended to create momentum for negotiations that will lead to a Global Climate treaty in paris in 2015. We had a conversation with the significance of things that happened in new york. Even though the top chinese ship was not there, they believe the commitments made by the chinese are significant. Per capita, the largest polluter. Peakare talking about the polluters. Of emergingtion market is tainted with a distinction. Said eat what they back to the argument about ies beingg countr different. The responsibility seemed to be pointed at wealthier nations. Since the air of china and the likes of beijing has turned into what a reporter called a foul brown soup, the tone has changed. It has not changed in congress. Obama has needed the support of congress. As a result, here has relied on regulationelied on and the republicans have been up in arms. He said this was the moment when the rise of the oceans began to slow and our planet begin to heal. Magazine likened him to he would have no better luck than king. H century according to polls, americans back by 74 . Parks he had taken ambitions before being elected. Us, it is aelling lazy argument to suggest it is the chinese and u. S. That is increasingly changing. We will see how that continues to play out. What our business is doing to help the fight . Here is caroline hyde. It was notable there was a big role for business at the event. It was all about getting the momentum building. Perhaps an opportunity to get good publicity. The section of your annual report. We had air france, siemens. All getting up and proclaiming what promises they would make. Some of the big players from europe taking to the stage. It is notable among them come you have big players. Shall. Shell. Stat all. Statoll. They wanted to be recognized as the most carbon efficient producer. They want to share information, learning. Notably, they said they are reducing not only carbon but also methane emissions. They are among the six producers who have signed up for this. Bg group. Clearly, companies are taking a role. Some of the Big Companies that do pollute our planet. Saying, we are supporting carbon prices. This is a big move by the world bank to get companies and investors saying, we want Carbon Pricing. Missions. O cap in emissions. Per ton ofat 50 carbon emissions. Got tim cook of apple paying lip service, same or want to make products and the supply chain more efficient. We have ikea saying, we want to reduce our emissions. A lot of lip service. How our Asset Managers forcing this . Helps focus the mind as much as money. Andt managers coming out saying, we will stop investing in committees that are fossil fuel producers and makers is going to start to focus certain minds. 180 institutions, more than 650 individual saying, we thenot going to invest in 200 companies with the largest share of oil and gas resources. Exxon is going to be had. The likes of india coal is going to be had. Standard oil company. Fund, aler brothers small fund part of the Rockefeller Family that made its money from standard oil, they said they are going to shy away in investments in resource have any companies. Resource heavy companies. Other investors are looking to be more proactive. Investmentsreduce in dirty admissions. They are going to invest in clean in missions. Cleanan in missions emissions. Warren buffett is doubling his investment in solar and wind. We are going to hear this more and more. A great way to make a difference. Carolyn, thank you. Approached a company who has expressed interest in an acquisition. Story froms has the berlin. Deterred bypfizer the rules announced by the Obama Administration . Apparently not. This is a fast hitting story. It comes from our colleagues in Bloomberg News. They had a potential they did this before obama announced the rules that were sort of not retroactive in place from september 22. They would apply. But pfizer takes a look and says, they are a complication. What the rules do, from treasury, they make the funding more difficult. Does is it shows you the limits of what obama can do just administratively. To alter or prevent inversions. You would need to legislation. They see a company, run out of new jersey. Warnerey bought chilcott, they relocated to ireland for tax purposes. This is a company that already has a lower tax base. They get a new pipeline of drugs. The speculation is they are doing it to have their foreign earnings taxed at lower rates. Ireland is about 12. 5 . The top rate in the u. S. Is 35 . This is a covenant with a market cap around 30 63 billion. Earlier this summer, astrazeneca was the target. They fell short. The bid got close to fort 114 billion. A couple of prizes in their minds. We will see how far they go in pursuing them. Is pfizer still interested in asters in a car . Astrazeneca . Apparently they are. They will renew a bid when the waiting. Period. They want to do a friendly takeover. That means they want to keep their options open. After the u. S. Midterm elections, the Political Climate in the states could be a little more palatable for Companies Looking to invert. Thank you, hans. You can join in the conversation on twitter. Always there. Forever. U. K. Politics and the british economy. First. Bloomberg. Time for today pass company news todays company news. Pfizer abandoned a bid for astrazeneca. Apples latest Software Update may be causing mobile apps to crash more. Iosrding to a report, the eight operating system is causing apps to crash 67 more often. And starbucks will buy the remaining japanese operations. Store profit in japan is the money highest is among the highest worldwide. Political conference underweight in the u. K. To discuss how political challenges could become economic challenges and talk about all sorts of prices. Robert tober. Tolbert. Tandem,kets moving in will we witness a divergence now that u. S. Interest rates possibly are heading higher sooner rather than later . I think we are into a new phase for financial markets. Up until now, it has been about monetary largess. We are getting into the phase will some where some cubbies are going to be tightening policy and others will be loosening policy. More instability, i think. What does that do to equity markets . Does it influence the price of the assets . Ins it move equity markets and of themselves . I think it will. What ishe questions is the underlying economic story in those countries . If the economy continues to strengthen, like the u. S. Appears to be doing, that will create some companies that equities will do well. What we are seeing in europe, persistent weakness, will be a drag on the ability to directly for markets to move forward hearing forward. What comedies are contributed to the highs . The Smaller Companies are lagging the bigger companies. How worried should we be about statistic . Breadth it is a concern. That is one of the red flags. Markets are into unstable territory. If the rises are determined by fewer and fewer companies. Is something, everybody should pay close attention to. Making sure it does not continue to narrow down. Hopefully one of the metrics you are keeping an eye on . What is key for you in terms of judging whether markets are overpriced . There are no cheap markets around. Every market around the world, none of them are cheap. We are dealing with a world of relative attractiveness. That equitieshink can do ok. It is not an outstanding performance from here. Bonds are not the surly going to sell off not necessarily going to sell off. We just think youll get a better return out of equities than bonds. Is the story around the fed starting to flag rate rises . Event . Nd the when the tapering talk started to take hold, that led markets lower in some cases. Are we over that now . Do except, this is because the economy is improving . We look through that tightening and buy into the positive story . Monetary authorities are going to be aware of not wanting to destabilize the situation. Any rate rises we do see will be pretty minimal. They will be stretch out over a long time. The Central Banks dont want to get the blame for destabilizing the Global Economy and equity markets. The thing we have to look out for, is up until now, there are a number of geopolitical events around the globe which investors have said, they are not significant economic events so we dont need to pay too much attention to them. If we reach a stage where any of these events potentially becomes the real economic event, that will be a very destabilizing russia is becoming an economic event. Further evidence out of germany. The russian situation is sapping confidence across the whole of the continent. Particularly in germany. There is what is happening in the middle east. It doesnt seem to be affecting oil prices. There is the potential for it to do so. Other events around the world. Chinas geopolitical stance. Would like to increase its sphere of influence in the region. For the attention to those to make sure the underlying story, gentle economic expansion, underpinning for the earnings, remains in place. Chief Investment Officer robert. We will be back in just a moment. Oakham back to countdown i amme back to countdown, anna edwards. Mario draghi does not see a risk of deflation. Worryu, it is france, the point for the economy. I think it is a significant concern. Its very large. He ability to bail out would be impossible. It has significant structural problems to deal with. The Current Administration is recognizing that and addressing it. Gets worseis it before it gets better. My own sense of what is happening in europe and the policy chance stance, speaking to a lot of europeans, it is not bad enough for them to actually want to move on to what they consider to be the ultimate step of some sort of qe. Some dramatic policy shift. Markets have shifted ahead of that. They have. Equity markets, did they respond to outright qe . I think they would respond to outright qe if we were to see it. It would be seen as something about injecting growth into the economy. It would be a risk. For certain countries, it is anathema to consider doing that. Ultimately, it will happen. It will be later than most people think. Inflation at 0. 4 . What is not bad enough about that to push them into some sort of action . Yes, there is high unemployment. Especially youth unemployment. It is not as if we have a writing on the street or civil unrest. Streets oron the civil unrest. Mainstream parties being thrown out. If there was a prospect of that, it could be a game changer. One of the significant events that could come up, a couple of years away, are the president ial elections in france. The possibility of a new president of france. That could be a real earthquake event in terms of shaking up the establishment in europe. Theres something very meaningful happening here. We need to do something to restore growth and confidence. The cap close . Do you have confidence on the earnings . Not we we are dont think that the underlying european economy is going to be Strong Enough in the next 1218 months. Persists. Er sets looking at, you talk about the french elections. Newer term, u. K. Elections. U. S. Elections. Politics, very close to your thoughts as an investor. What did the u. K. Elections hold in store for you . Investors like to believe that politics is something you can leave to one side. You can effectively decide whether you are attracted to a particular market or not. We are increasingly living in a world where the views of central bankers are key. The view of politics is key to understanding the direction of the markets and how they are likely to evolve. Thank you very much. The chief Investment Officer. I will be looking back at the conferencelady Party Labour Party conference. Stay with us. Back. Come i am mark barton. Lets take a look at the fx check. Dollar. Against the unchanged. 128. 47. Confidence more a fall in germany may fall in germany for the fifth consecutive month. Slide. O on a downward it is now at 128. 41. Euro forast for the this years 125. Next year, 118. The value at 120130. We are the high end for fair value. The german Business Confidence report could fall according to, economists we have spoken to. Are the top headlines this hour. The pentagon says usled strikes were posted by a militant Group Planning and imminent attack. Upis described as being made of islamic al qaeda veterans and is separate from the islamic state. It makes it the largest arab u. S. Coalition. They said more bombing raids in syria can be expected. The initial indication is the strikes were very successful. While it is not our policy to discuss future operations, last nights strikes were only be beginning. Massive amounts of supplies erraed in syria lyon si leone and guinea. Curbing the virus will require 1000 more personnel as well as residents who can help on the ground. The french transport minister has confirmed air france is scrapping its plans to expand the lowcost chain. Earlier, they had offered to plan. E postpone the and offer the union rejected. The strike has lasted nine days at a cost of 20 Million Euros per day. Air france has said is premature to say the plants have been strapped grant. Scrapped. A statement make today also. We will tie you what happened to the shares. A lot of operating losses are day. Lets talk about constitutional matters in the make of the scottish referendum. We look back at the labour party conference. The conversation around a waylution has muscled its into the agenda. Lets talk to a Research Fellow about this issue. Devolving power. Take us through it. What are the options for the u. K. . A lot of lingo as we are trying to a lot of talk and lingo. What we have been using for years and is now becoming a common currency. The shortterm, we are talking about enhanced devolution. Referendumought the on the basis would not be voting for the status quo. They would be voting for some form of advanced devolution to. Schemes including one i have been working on. We call it devo more. Even though we got a joint commitment, there was not a consensus on what it would look like. There is a broad sense is about the main features. A significant amount of fiscal devolution. One in the area of welfare of the terms being used is devo max. That is not in the cards as far as the prounion parties are concerned. The devolution of all sorts of policies including things like immigration. Sitting all taxes in scotland. No one is contemplating that. We are talking about most or all income tax . Other taxes . Yes. One of the problems we have its we have a centralized tax system in the u. K. It has been built around a centralized tax system. It is hard to think how you would decentralize it. Their tax systems around the centralized constitutions in canada and switzerland. We are doing it the other way around. We are trying to work out how we might do that given the way our tax system works. There was personal income tax. The first candidate on the list. That should be mostly or holy devault devolved. Are we talking about the any powers around Corporation Tax . In scotland or anywhere else . There is a debate in relation to northern ireland. Because of competition with ireland. Because of competition with the republic of ireland and also being the limited nature of the private sector. It might provide a spur for Economic Activity in the north. A decision on that, a final decision has been postponed. We have yet to hear about that. If that is put on the table for northern ireland, it should raise questions about whether it should happen in scotland. And what else the will be ones hope the table is english votes for english laws. That becomes a more fraught issue. It sounds like a straightforward issue of fairness and justice for england. The u. K. Only form of that does not have a form of selfgovernment. England is 85 of the whole. The problem is england is 85 of the whole. That creates one set of difficulties. The other is making the work difficult in terms of administrative realities and figuring out which relate only to england. Very bit ofecome a parliament terry this could ary hokeyrliament pokey. There is the suggestion that the processes work out devolution options for scotland. Draft laws by january of next year. Englishto work out what votes for english laws looks like. Controversiestico political controversies labor was more comfortable devolving power to cities and regions, then as a country issue. Is that where this will go . It goes in both directions. That is where the liberal democrats have been for some time. Are willing to support a report on english laws. The conservatives want to go further. Soft ratherto than hard version. Further labor would race embrace it is an open question. There might be a deal to be done that involves some form of english votes for english laws. And enhanced government as well. Essentially, as you say, we are entering a time of complex, protracted constitutional debates. Indeed. We shall see. It depends what the other businesse is. We doubled state extensively devolutionence of were not entirely thought through and nobody has looked at it in a thorough way. Now the issue cannot be docked. Thank you very much ford joining us. A senior Research Fellow. 7 39. Coming up, revised guidance for two any 15 42015. More after the break. Countdown. K to we are looking at an index of small and midsized cap stocks in the u. S. I have wanted shock about that crosses for a long time debt crosses for a long time. This is a oneyear chart. It represents the lack of breaaddth in the equity market. This is a oneyear chart. It has dropped for three days. 5 since september. Versus a 1 drop for the s p 500. Why is the chart interesting . The purple line is the moving average. Over the pastice 50 days. The green line is the 200 Day Moving Average. The average price over 200 days. Moving average that is a positive. It highlights enough trends. The trend is your friend. The inverse also applies. That is what happened on monday. The 50 Day Moving Average moved average. The 200 day that is called a death cross and it is a negative charge sign. A golden cross is the opposite, when it moves above. This is the death cross. Keep an eye on it. It does show that fewer stocks are shouldering the rally. Said, thatur guest is not a good sign. A death cross is significant. The trend is a downward. Thank you very much. The death cross. I probably never said it he four. I will say it once more. One of many top corporate tories stories. Carolyn is here to give us the details. They are saying come at the moment, things arent looking so nice. We have a profit warning coming from them. The apple in the eye of ups. Parcels, letters, documents. The competitive rushers have increased pressures have increased. Overall trading conditions in europe have deteriorated. Speeding up the investment programs, they are trying to reduce overall costs. It is not looking pretty for tnt express. Ascould see shares fall much as 7 . A deathly cross coming. Keep an eye on that and rbs. The ipo price. Not as high as some has expected. A lot of money to go back to shareholders. We will keep an eye on that and tnt. Raise lower based on they d less than expected. The pricing was not what expected. Rbs could fall. Tnt express could fall. The relief from the no vote lasted a total of one day. Looks take a short break. Seven 46. A live view of the city of london where equities are set to open in 10 minutes. Manus will be here. Welcome back, this is countdown. 49 in 49 in london 7 london. What lies in store for us this wednesday . What you expect from the equity markets when they open up . Sell for equity markets yesterday. We are expecting the footie to open flat. Open flat. A lot of people asking whether it can push above the alltime high of 6900. Or whether this is the end of people run. And of the bull run. Every time he gets around 6900, it gets flustered and tired. Seven happens geopolitically. Theres a piece of news on the corporate front. It fails to push above that. We saw a big sell off yesterday. We are not expecting a large bounce at the moment. A lot of pressure from the likes household names such as tesco which people thought would be a bit of a by. There yesterday as well. At what point does tesco become a buy . It has lost over 2 billion of its market value. Do declining andock the market share, has stopped being eaten into. Yesterday, they came out with figures for the supermarkets. It is not just tesco. Others are looking weaker than expected. A slowing showing pace of decline. They have been vocal in their price slashing. Trying hard to attract customers in by reducing prices. Tesco has a number of problem spirit we could talk for a long time about them. If you want to look at getting into tesco, you dont want to start catching a falling knife. The price about that the business achieved, not quite as much as some people expected. What does this mean for them . Wanted a substantially larger chunk of financials. We know theyre not getting as much as they had hoped. Priced at the lower range, below the lower range. Investors were sort of, probably a little bit they had just through the alibaba ipo. Ent, when you compare it to your peers, it is not an attractive valuation. Rbs will be a little disappointed with what they have. If they do manage to turn things around, they can look to sell more of it. Divestment the story of the divestment, you have a long way to go. Its going to be another delay to the overall privatization process. They have a long way to go. Citizens financial may be a disappointment. Not going to hear the end of it for some time. Utilities. Nited in thehave invested stock this year, you have been rewarded. You have seen a 21 upside. What is the takeaway for from the Trading Statements . Is this company a byuy . You have to be cautious. You would not have been rewarded if you had not in the summer had bought in the summer. The stock has fallen since august. Investors are nervous over the drop, that came at the end of august. What are they going to resubmit in terms of their Business Plans . There is an area, circuit 800 million a plans. They were questioning over a billion dollars billion pounds worth. That is a bit of a gray area. Angus, thank you for joining us. That brings us nearly to the end of the program. Lets update you on air france. We have had conflicting comports reports about the business. We heard from the french transport minister who said plans had been scrapped. The airline came out and said, it was preventure to say the plans have been scrapped. Since the beginning of last week, shares down 12 . Next. E move is we will be talking about what can be done to spur the euro zone economy. You will not see me until next tuesday. Welcome to on the move, live from Bloomberg European headquarters. We are minutes away from the start of european trading. , the pilots are on strike. The transport minister in france says plans to expand the unit have been ended. Air france says that is not what they are doing at all. That is the big story in the first couple minutes. For now, lets get over to hans nichols and caroline hyde. Ofwe are looking at the ipo rock internet. A price of 1. 4 billion. That is what they want to raise. We have a date, october 7. They will list in frankfurt. With that, i handed over to caroline. And the latest product later today for passports. It is squarely focused at the business humidity. Apart from the allimportant keyboard, it has better views of your work documents on excel, spreadsheets, even xrays if youre a doctor. But is it too little, too late . More onit should focus services and software, given we have record sales of the iphones over the weekend. Thank you very much, caroline. The markets just opening in europe. De ftse 100 flat, the