Transcripts For BLOOMBERG Countdown 20141029

Hello and welcome to countdown. Welcome to the program. A big day for earnings. They are crossing the bloomberg terminals. Company earnings have narrowly missed estimates. Income is 9. 1 billion krone. Below estimates, the big story. They lost him to be e. G. And that was unexpected. And are a smaller rival have been for the better part of a decade. They start looking for a successor and the Company Thousand maintain the strategy of cutting costs to raise shareholder returns. Projectioned earlier targets and started implementing the Efficiency Program with cash 2016. Perations by is output for the quarter of 1. 79 6estimates million. Oil production targets have missed, as well. With theur interview ceo for the time being while they look for another one. He will be joining us. They will discuss the earnings and the search for the successor. Thet is continuing to hit sector earnings. They will be reporting later on today. How is the market performing right now . We have the details. Horror. Oil prices are down and we are seeing profits down. It is down 24 . Yesterday and a drop in profit. Profit in a bear market. That means that we have seen prices from their peak in june. Since prices oil lower joan june. The technicalities that are driving these. We have concern that the economy has been slowing. The International Energy agency is saying that this is going to be the slowest for oil growth demand since 2009. Meanwhile, demand is slowing, in terms of growth and the United States is doing great when it comes to drilling into shale and have produced the most since 1985. , the group of countries that brings together supplied, may not turn the taps anytime soon and has seen the production up. They say, no wonder you are getting the likes of Goldman Sachs cutting forecast. Call. Not opecs is the low reached . They are saying this is the news today. This is the story. We are starting to hear voices say this is the turnaround and oil has started to scream creep up a little bit. The demand fundamentals are not quite as bad. We saw demand pick up a little see data come out today. The demand and supply mismatch is not as bad as we thought. They are all saying that we could see prices start to cut from here and go back to as high as 100 for next year. They say demand will grow. And, if you are going to meet the increase, you have to go into harder places to drill from. The cost is higher and the marginal cost is what is supporting prices at the back end. So say the analysts. Because of the drop in prices, we are getting as much as 22 projects canceled. This happens in the oil market. Whenever you get a mismatch, it takes a little while and you have them planning to cut costs and production. Cutting back of production and we expect many others to rain and. Thank you very much. Deutsche bank has reported a net loss of 94 million euros. Joining us now from berlin is hans nichols. What do the numbers tell us . They tell us that the quarter is much worse than the Third Quarter a year ago. You mentioned the headline number. Had a 400 they million overall profit and you see a big dropoff when you have the overall number. And crucial revenue 3. 41come that was that billion and below estimates. We will have all of these come out and compare and contrast the demand and pressure. There was person no change and a big shift. It seems like when they have news to announce on the numbers side, they do it before a big event. Before we had the stress test, they came out and said they will cashnding a large chunk of of 1gal provisions north billion. Today, we get the actual number and it is not a surprise. We give personnel changes. They have coached a banker. Was the financial chief fred replaced him as the chief financial officer. To all be moving on different role within the company. He will be in charge of the strategy. Deutsche bank has expanded the board. It is now nine members strong and mr. Krause will be on that board. Thank you. We will see you later. The bank faces a number of investigations and are in talks with authorities to resolve the surrounding libel. There are risks to the european macro market. From a number of boards as of late. Lets see what else is coming up on the program. Do not miss our interview with the ceo who will be speaking first to bloomberg coming up later on this morning. You can join the conversation on twitter and let us know what you ache. Tell us the stories you want to hear more about and let us know what you want more or less of. You can have more of us. Not less of us. Say whatever you like. Come, the picture of the day is the unmanned rocket exploding. We will have the pictures on countdown. Facebook shares plunged. The Fourth Quarter lies ahead full top ahead. Be analyst estimates. It was up. They told bloomberg that involvement in mobile is not going away. The investments are longterm. Timehe payoff will take for the advertisement industry to make the shift to longterm growth. Mode in 15 years after the forecast sales disappointed investors. The truck maker has been rattled by talk of a leadership change. Split to meet over a replace the chief executive this week. Profits declined off of the value of the company. A commercial rocket carrying supplies to the International Space station exploded after taking off from virginia. Fell 17 after the explosion. They said they will hold a thorough investigation into what went wrong with the spacecraft. Failures briefed on the of the launch. That the getting news q3 numbers are coming through 247operating profit is million euros. In previous statement came from the company and sales were down. Against 148euros million a year earlier. Theyompany is saying that have missed euros from the operating profits. In terms of how numbers operate, profit came in at 200 47 million. That was off from the average analyst estimate. It looks like the operating profit is coming in below analyst estimates and the strike impact here. We are seeing a booking delay on customers and they are referring the numbers surrounding the strike to clip. We have heard those numbers before from the company and they are going to be accelerating the cost cuts and adapting investment plans. Revenues byuce in 416 million euros. We are getting further details from the business on how much the strike activity against plans for this business. The company has moved away from those plans. There are delays in booking. Our next guest critics it the doves. For hello. Surveyed4 economists and hud today. L just to say they will not. Brave . U be im afraid not. By market got blindsided comments the other week that there may be some delay. That was extraordinary, coming from someone who was previously a hawk. We are in the midst of a market plunge. It was extraordinary. The market turned on a sixpence and showed how Monetary Policy is the biggest factor on where the markets go. The global gross story. It is in the back of the mind. It is part of the consideration. Concerned about the low levels of inflation and deflation. What is causing that is domestic. Is a the fact that this ,elatively closed Economy International developments are not at the forefront. They are there as a factor. Considerable. It is the word we have been hanging on. Will says say the fed is appropriate to continue to hold rates low for a considerable time. Are you in that camp . Will you view that language . I am sorry. I think i will. Signaled forish as months and years. They will finish this month. They are keeping the market there seems tose put. Yellen bu there will be a soothing assurance that rates will stay low. Markedomething that believe is there. Exactly. Why will they maintain this . There are so many reasons. You illustrated them before. Growth and deflation. Germany and france has the growth. The euro zone. Isre do you think the worry focused at the moment . I think the eurozone is at i cannotf the list and read the feds mind. Share the same would attitude. So morel do universally. I think the euro is front and center and we have a logjam of ideologies and strategies to combat the problem that seems to be stuck. A convergence and centralbank policy. The fed really has to wait for the eurozone to catch up. Lets not forget that we are in the midst of an undeclared currency war, as well. To you in a second to talk about the eurozone and the bank of england. Chairman after the break. Welcome back. We are back with the chairman. The comment from the Deputy Governor of the bank of england said that slowing inflation justified keeping emergency stimulus for longer and he seems to be joining the camp that and become gloomier about the economic outlook. Are you becoming more entrenched . Looking like the only hawks looking to raise rates and we seem to have a steady as you go policy at the bank of england coming. I think it will continue. Of the back of everyones mind. It is a dominating force and stopping the increase in rates, combined with the currency war quiets going on in the between the major nations. And itation is weak means the voting pattern that we have seen has to be maintained. Islation, as weak as it is, strange to the man or the woman on the street to increase Interest Rates in that environment. I think it will continue and what worries is that the private surveys increase wages quicker than official surveys. They think it will creep up on the committee. I think, for that reason, where ittion risk is is. You mentioned the currency war. We were joined 15 or so minutes ago. Who are going to be the winners and losers . I think it will be the euro. The market becomes convinced fullblown qe will be coming next year. There is an enormous struggle at the moment. We are trying to convince them the Monetary Policy still has a role to play and inflation will not go out of hand if they do and it. The structural changes are not the only answer. They will take too long. Mario draghi want to see more action and fiscal loosening. Results ofseen the the review and the stress test. Are we going to see the Banking Sector behaving differently . I think it is necessary and not sufficient to see lending to the Financial Sector increase. The banks will not be watching their backs. Problem is demand for loans. Chronic deflation means that companies do not borrow. Thank you for joining us. Up, the ceo joins us on bloomberg on the back of the results this morning. Stay with us. Welcome back. The dollarring against the biggest training. Trading. It is down. Four days of decline is the longest losing streak for the bloomberg dollar spot index. It is on track for a monthly fall. Fourt is on track for major currencies out of 31. Dollar and it is because of the dominant currency. Is the news of the fed. The next question is when is the one will be. These are the top stories. The European Commission president says that none of the member nations have broken the articles by the big enough action to win the margin. The eu has the authority to reject their budget and demand considersif it significant risks of breaching debt and deficit rules. Securing supplies for the winter. He will meet his counterpart in brussels today. Stopped supplying the ukraine with gas in june because of unpaid bills. From russian rebels fought with Government Forces in the east of the country. Another win for real madrid. They secured financial backing from a company to redevelop the stadium. Become the will worlds greatest sport facility. The thirdquarter profits inl along with the decline oil production. There was a change at the home. We will get more from the chief executive and he joins us on bloomberg on the phone. For morning and thank you joining us today. Good morning. Falls from 12. 1 billion. As you account for the drop in profitability. First of all, i would like to operations across the portfolio are doing good and, on the financial side, the earnings were in line with my expectations and were obviously impacted by the oil and gas prices. They were impacted by some that they had done. Arereported earnings impacted by impairments in this quarter and is a negative net income for the porter. They have been solid in the porter. Earnings have been overshadowed by banks in recent weeks. Gone. Evious ceo has what kind of hold the sea leave . Does he leave . It is encouraging. We have strong support in the organization and from the Leadership Team with the stakeholders. Our leadership is determined to continue to go on the improvement program. Why is that . That is a personal call from isaiah my side. I think it is prudent to have a long time perspective in my situation. I am not prepared to take that. Do you think you will act as chief executive . How long do think it will take to find a new chief executive . That ithort answer is will take as long as it takes. G. Ourse, he has gone to bf i gather that he will become the best Oil Executive in europe and have compensation that could reach 14 Million Pounds in total. That equates to 10 times what he made last year. Talent attract the best when your competitors can pay a lot more than you . A think it is an illustration of what we are to know with talent. This is a job. Im sure they will make the right judgments. Question we talk about the price of oil . We know it has plunged. It is down 25 in recent months. Expect prices to recover . Is this the new normal . Fundamentally expect rises to recover. Long, it is hard to say. Obviously, the meeting is very important. We have what could happen and the outcome that could be in november. Will oil prices have consequences . Will you maintain the policy . The policy is firm. , how the policy is firm are you going to pay for it . Are you going to have to raise the debt level . Sincerse, you sold assets 2010. Our you going to meet the dividend commitments . Target for our committee a community and the numbers that you see for this quarter and on this basis indicate that we are on track with that. The debt ratio is around 19 . For the fouryear year, it is around 20 . We are in a sound financial position with our dividend policy. Price affect oil projects . Do you think you will become more selective and reduce investments even further than you already have announced so far this year . That is what they are we are in ad fortunate position with a solid portfolio. To as strengthened successful activity. It will continue with a policy of prioritizing the projects. Thank you very much for joining us today. We appreciate you taking the time out to chat. The interim chief executive biggestof norways company. Lets talk about the number one semiconductor maker. In. Net profit is coming that is ahead of estimates. In terms of sales, they are in line or a shade below. Estimate in against an in u. S. Dollars. They are seeking 100 million of operating expense savings. They are setting a weaker than anticipated market. Player talking negatively about the sector. We will dive into the message is coming in. This is not about processes. This is other things. Videogames and microcontrollers. We will get other things in the next hour of countdown on the back of that report. Bbva is getting numbers. In at sixofit came under one million euros. And, if we look at what they are , core about the loans capital is 11. 7 and has moved in the right direction. Bbva isnumber four below estimates this morning. We have air france earnings earlier and we are going to talk about them after the break. Carolyn jordan will be here. What else did they say . Mainly that the strike has by 330 operating profits million euros. Boeing 737. E now, for the full year, they are 2. 2 and 2. 3between they areuros and launching a new plane. The ceo has artie said the cost them one year of the restructuring plan. That includes one third of the group. The earnings of the group should be positive this year. Air france should be losing money for the sixth consecutive year. Is hitting the dutch arm of air france after this report yesterday in industrial papers from the airlines that the airline may cut more jobs. Air france says that is pure speculation and the shares ended up in the green yesterday. Continueoblems will beyond the Third Quarter. Yes. The main concern is the fourth order bookings and how the france customers are affected delayed there, the bookings. Carriers where the problems started in the first place. Air france wants to put more planes at all airports to compete ettore with this lowcost carrier. They brought the strike to abandon the project are europe. The project for france is on the table and the pilots just managed to get what they wanted. Contract between air france the social conflict may not be over. Once caroline and paris. Salesorting third porter and 15 minutes. That it may hit profit forecast. Bloomberglen from intelligence, thank you for coming in. Impact is that happening having . You do not sell as many coats. If yous a saying that have not sold by the end of october, you will not. People will generally make do with last year or the year before. Concern. He too much merchandise will have to be marked down and they will have to see what that is and adjust. That have not i just the forecast yet. Adjusted the forecast yet. I think that is worth watching out for today. Essentially. Narrow they may not lower, they could narrow. Prophethave raised the forecast. Once consistently this year and last year. What about buybacks. They have an estimate of the levels they will buy at. The share price is 66 pounds at the moment. If the share price is below, they will buy back the stock stop the stock. It may change the buyback level. I like tony, the analyst. He said they could tweak the forecast and the profits are a check on the markets recent love affair with the company. Affair with charles . Some people do not like it at all. A great performer. When it was 16 and people thought it was going bust. Over 60hink about the pounds, you would love it. You would have married it. You are updating. Winter wardrobe for the last 40 years. Do have some work to do in the fashion industry. I have not got a car. One startup says there is a big market. Elliott reports. Shopping centers do not get much posher. The Perfect Place to indulge and test indoor navigation. The store and i am not sure where it is. I am seeing if they can help me. I will happen in. Type it in. With a couple of taps, i get directions. How are you. Great to see you. It is like a gps. Is like indoor navigation. Open and the cameras know where you are. We position you and use other sensors to track. In august, it works with big brands and malls, shops, and hospitals. It is helping customers pinpoint items and buy them. Do we need indoor navigation . Some people are shy. Some people feel insecure. Say,ad of asking, they can i want to go to the Office Building or the store i want to go. It is where you park your car. There are so many things we can do. App uses Magnetic Fields to navigate. It uses wifi and sensors. Inside, they plan to use the power of the crowd. Have the sense of direction of a blindfolded catcher, you may never need to navigate again. The sense of direction of a blindfolded badger. You will not have to talk to anybody ever. Never have to ask directions of anybody. Would you get it . I do not get lost. Flying over the caribbean sea. More than just a great view. Well tell you about the interesting cloud formation. Welcome back. Lets get through some stories. What do you have . Samaritans are a charity that helps those who are in need and are launching an app that would help tell if any of your loved ones have suicidal tendencies. Was sort ofssess language is used and, hopefully, you can receive email alerts. The picture of the day. A lady took a photo from a plane over the caribbean and thought the cloud formation was interesting. She saw a lovely rainbow effect. It is beautiful. Look at that. Is melissa. Boosts sales. This is about the new releases coming our way. They are not so new. All of my favorites. We have breaking news from the french oil giant. Stay with us. But the new man at deutsche bank. The chief financial officer. For ank had a net loss Fourth Quarter. Klm says the pilot strike cost 340 million euros. What might the end of qe mean . 200 million up in smoke. An unmanned cargo rocket carrying supplies to the International Space station explodes on take off. Hello, welcome to countdown. The time in london has just gone 7 00. A warm welcome to the second hour of the program. Carolineil giant is here to break us through the numbers. Better than expected. Down, but we are actually seeing a drop of just 2 . It had been thought to drop off more than that. Production is down by 8 . 2. 122re now producing Million Barrels of oil per day. This is also a very sad story and therefore a story of the the chiefause executive died in a plane accident in moscow. Now they are sticking to costcutting strategy overall. There is continuity. In whichng areas prices could affect total. It is staggering in terms of how much it could cut back profitability. A 10 drop per barrel. They are down by 30 from the peak earlier in june. Means0 drop per barrel one and a half billion dollar reduction in annual net profit. This is the amount Oil Fluctuations hit. The governor economy such as norway, which gets a huge amount of money from the biggest for the biggest Sovereign Wealth Fund in the world from oil. Total is keeping its dividend unchanged from a second quarter. Per share. Ros this is a company trying to hold the hand and see them through this time of change. It is a big change to deal with. The oil price is a really tough move we have seen since the summer for many of these Oil Companies really questioning whether it makes sense to get out of the ground. You are right. This feeds back into the oil price. We are actually seeing projects being canceled. Barclays has said 22 projects, largely in the arctic, largely in canada, have been shelved a cousin of this dramatic drop we have seen in the oil price, which means the oil contract traded in europe and in the u. S. , both are in a bear market, 20 of the more than peak. We know what is behind this oil volatility. It is the fact world demand is slowing and supply is too much with the United States providing 1995. Il since now they are in charge of the oil price. Not opec. Not the cartel. The unitedbout states and Goldman Sachs. They cut the forecast. We are starting to see the likes we think oilaying, prices are going to pick back up. We think they will be around 100 a barrel next year because it is so expensive to get them off the ground, so many people are delaying their projects. Eventually it will rebound. Thank you very much. Next, the uks number two retailer has released sales figures from the Fourth Quarter. Forecast. Aked its prior to today it said pretax 775,000,002 800 15 million. O 815 million. T the big difference is mild temperatures. Shoppers are hesitating to update their wardrobe. It is one of the driest septembers since 1910. Because of warm weather we are putting off buying our autumnal gear. Long enough, we put it off altogether. Analysts estimated 7 . The next directory thirdquarter sales missed estimates. Lowerquarter sales were than estimates. It does see earnings her share of 10 . It sees directory sales growth of 6 to 8 , and it has the capacity to continue its dock buyback program. It did warn us on september 30 that it tweaked its profit forecast to between 750 million and 790 million, and it is all about the weather. Lets move on. Deutsche bank was hit and 94orted a net loss of million euros. The bank said it was in talks with authorities to resolve cases involving libor manipulation. And all thenumbers intrigue from berlin. Is there any relief question is there anything in this release . Bank equity trading came in at 1. 4 4 billion. Equity trading was around 723 high 600ersus the million. The big top number everyone is taking away from this is a 94 million loss. Most of that is due to litigation charges. When you look at elsewhere in the company, 60 or income that was done to 1. 4 4 billion. When you look at the numbers quarter on quarter, they are releasing a lot of fluctuation on this part. The litigation issue is the most interesting. Last night. Hat out that was 894 million euros. That cost 1. 1 3 billion. Compare the litigation challenges with some of the peers. Bank of america at 5. 6. Goldman sachs the lowest, 194 million. Ubs 2 billion. Credit suisse at 243. The challenge for the bank Going Forward is cleaning up these litigation charges and some growth inee fixed income and equity trading. Science, butet its hard to execute. What can you tell us about Management Changes taking place . There is an overnight shift. They announced this last night ahead of their earnings. We have a new chief financial officer. Comes from goldman, where he was for just over a year. He is german. Out of the picture. Krauss will stay on board in a strategic role. He will also be joining the board. To aoard has been expanded ninemember board. Clearly they want to keep track of their numbers. A labor dispute causing a pilot strike. In the thirdy 61 quarter. Were are seeing the full about 18 the strike. Of the capacity for september. On the operating thirdquarter the impact is 330 million euros. That is the equivalent of three 747. G it could be up to 500 million euros. Air france klm is saying theyre going to accelerate cost cuts with the new plan. Montho said earlier this the strike has probably cost one year of the restructuring plan. One third of the group, the earnings should still be positive, but air france should for the losing money sixth consecutive year. The problem will extend beyond the Third Quarter. The main concern is how much bookings were impacted for the Fourth Quarter and for the winter. Hurtirline is say it may fourthquarter bookings. You still havem very tough competition, which is why the strike started in the first place with air france wanting to add planes from all the airports in order to compete with local carriers. Did win one of the battles during that strike. They forced the airline to abandon a project for europe. Did not manage to get what they wanted in terms of contracts, so they did not sontain a union contract, the pilots have hardly lost confidence in their ceo. Some of the Union Members are you can be born one but it is hard to become one. 11 minutes past seven. We are going to be speaking to the ceo. That is coming up next. Came inarter sales weaker than analysts estimated. We will talk to this man when we come back. You can join the conversation on twitter. Think know we what you of the show. Postpone for another year . Or do you wear last decade. An unmannedcome, rocket bound for the International Space station explodes on take off. We will have the full story next on countdown. Time for company news. Facebook shares plunged more than 11 in extended trading after a warning that the Fourth Quarter is ahead. Revenueation of slowing growth and rising expenses next year. Thirdquarter earnings beat estimates. Sales reached 3. 2 billion, up from a year earlier. Mobile promotions are the biggest contributor to add sales. Sheryl sandberg said facebooks involvement in mobile is not going away anytime soon. The investments are longterm. These are large and strategic investments. The payoffs will take time, but we think they provide a Necessary Foundation to make the shift to mobile and for facebooks longterm growth. Diabetesst for 2015 sales disappointing investors. Also talk of a leadership change. According to people familiar, the board will meet today and discussed whether to replace this man. They have wiped 13. 4 billion euros from the value of the companies. Europes number one the Semiconductor Manufacturer is reporting fourthquarter net earnings of 72 million. That is higher than analyst estimates. One hundredking for Million Dollars in operating savings and predicting a drop in revenue in the Fourth Quarter. An unmanned commercial rocket carrying supplies from the International Space station has exploded six seconds after taking off from its launch pad in virginia. The company says it will hold a thorough investigation into what went wrong. Is it the day when qe goes up . N smoke it is decision day at the fed. Our next guest says janet yellen should announce an end to quantitative easing, but talks of rate rises will come for a while. David, they for coming in. . Re we going to cnn to qe today probably. Oft economists seem to be the same view. When you talk about qe4 or extending this rounded to the future, that is overdone . I think it will be a huge shock. Do withe is what they the language in the statement. They can make purely mechanical stopes, tell us when they buying bonds, and maintain dovish language. The fed knows ending qe is going to create uncertainty in the markets. It is going to mark it. They are going to see this issue for the new year. In july the fed dropped its opinion, expressing a warning inflation poses a risk to economic performance. Is it time to reinsert that clause because in september it is said the likelihood of inflation running below 2 has diminished somewhat since earlier this year. Expectations are falling as well. Theirave expressed worries about inflation or not . I think there are some members that are going to make that case. My view is very little has changed. Headline inflation is going to we see in commodity prices. The rising dollar is going to hold things down. The big story is what is going to happen in the labor market. Are we going to see wage growth . It may be october 16 before we get the real boost. That is when they are going to judge if it will be a threat to the inflation target in the medium term. Consumer confidence came at a sevenyear high. Upwards considerable movement in wages. I think that is a positive statistic. People looking at how far we are in this expansion have been able to point to Consumer Confidence and say it is actually quite low. I think there is room to go with consumers. Falling gasoline prices helped. It makes them feel better about things. I think it reflects the strength of the labor market as well. Is it time to be considerable or not . They want it removed. Is it time to remove it or Something Different or not . If i had to guess i would say they are not going to remove it. They are not going to want to have any focus aside from qe. Nobody really knows. Keeping it in his assigned of what the market expects, a sign the fed wants to address rates at a later point. I believe they leave the committee at the end of the year. I am not sure how much power they are going to have over language at this point. I think it stays. Labor is another phrase we are going to look out for. Stays with us. After the break more from him. We will move our focus a little bit to europe. When we come back. Welcome back. What can we say now that the is in the Rearview Mirror . Is that a lay anyones fears about the european Banking Sector . Hopefully it is a change of mindset in the Banking Sector. You can understand why people have held off a little bit, unsure about the regulatory environment. Goodopefully they can find businesses with projects they want to put to work and lend more money. Aggregate demand. Those are words i keep hearing. Its interesting. For a long time there would be more questions about demand for credit, not just supply. The ecb has a Credit Demand survey. Hopefully the supplier is better. We will get a better credit in the eurozone. What we make of the earnings season so far . You have seen it particularly positive. We spoke to someone who was talking about troubling low levels of earnings growth. Often you can find what you are looking for. What do you see . The numbers i have seen in the u. S. , growth in revenue has been a little lower than one auld hope, but you have continuation in most sectors. What is interesting is going to be what our currency moves doing. What are we doing with european earnings . ,t has acquired a heavyweight and when we get in the Fourth Quarter, are they going to be , andby the rising dollar is that going to do what we suggest, which is to boost smallcap earnings . We had that bizarre day, a huge volatility when the 10 year treasury yields fell. It was a mad day. Since then equities have come back off their lows. Has it passed . That wall bowl . Sector for the u. S. Feed on that day. I think potentially. I think it is what the fed is seeing. They realize there are a lot of other things in the world. Even though ending qe could cause volatility on its own, i arek market till it is concerned with what is going on in china. There are a lot of positive catalysts lining up, but i dont see them affecting the data for the next six months. See it reduced. Thank you for joining us. It is 7 26. Revenues declining. The chief executive speaks to us first here on bloomberg. Stay with us. Lets take a look at your fx check. 10 of the Major Trading peers i had the federal open market committee, falling for a fourth day. Decline is the longest streak for this gauge since july 1 but still it is on track for a monthly decline as well. This month down by three quarters of 1 . It is up for the year, up by 4. 3 . Index, forar spot the dollar itself only four major currencies have risen against the dollar. The india rupee, the south korean and the indonesian. But they have risen by less than 1 . The dollar is the dominant currency against maine 31 trading partners. But the spot index is down for a fourth day. It is all about the fed today. Commissioner says none of the eu member nations has broken its budget rules by a big enough margin to warrant immediate action. That gives france and italy more time to win approval and draw up spending plants. The eu has the option to reject the budget if it considers a significant risk and breaching debt. The ukraine is resuming talks with russia on gas supply for the winter. Supplying ukraine with gas in june due to unpaid bills. Madrid,win for real this time off the pitch. The richest club has secured financing. They say they will become the greatest sport instability. Europe us Biggest Semiconductor Maker just reported sales that missed estimates. Lets talk with the ceo carlos bizotti, thank you for joining us. Take us through what youre trying to tell us about the state of demand at the moment. Q3 scales coming in a little below the market. Paint the picture where is the demand coming from echo from . What we see as a softening particularly in the massmarket. From customers and the distribution gentle. I would say it is more concentrated in europe and asia. It is a gain of the wild industrial customers and of course the Distribution Channels that we use to serve thousands of the medium and small sized customers. What is your experience in germany at the moment. The bank has warned that Economic Growth will be meager at best. Weakness inuggest the German Economy, you previously did well in jury what is your experience . We dont see anything specific to germany. Germany for us is very important. Particularly important for the automatic business and the other one i would say is more customer specific. Maybe there is some softening on the market in asia but the signs that we have noticed in september is a softening in the industrial and distribution and Nothing Specific to the german market. When we tried to get a handle on the Global Economy we look to businesses like yours to give us clues. Some suggest that we need not worry much about china because that slowdown is designed and we should worry about the eurozone. What are you worried most about . Think for us it is europe. Company like steed, europe is important and more important. That for us it is too early to say that there is a link between what we saw at the end of the Third Quarter and a macroeconomic view. Imf has reduced from 3. 7 to 2. 3 at a global level. Tohink it is premature this mitigated recovery and what is happening with the semiconductor. It may be an inventory with a decline in the point of sales for the last quarter of this year. Tummy tuck about the structure of your business . Talk about the structure of your business . Are you now in the best part of the chip is this . And you done the big changes . The think structurally changes from a pot of Product Point of you are secure. Five areas of focus that is the core business. One is automotives where our present is global. Are number one in china and number two or three in the world. Industrial power where our present is number two in the world. Live in a position where there are sensors and microsensory products, our numberntrollers, we are palmn the world and the gateway and the set of applications for the consumer. These are the five areas of focus. It is important for us to move on, focusing on what we are doing and it is important to underline from a financial point of view that there was a significant turnaround moving from last year to this year. We are not yet at the level we would like to be but this is a strong regression looking where we were 12 months ago. Bozotti take you for joining us. Most people have a satnav in their car, but one star says there is a big market for different navigation. Shopping Centers Israeli Shopping Centers dont get much more posh than this shopping center. Im not sure where that ralph lorenz store is. Loren, mye in ralph camera automatically recognizes that im outside the store and with a couple of taps it will automatically give me directions. How are you . What is this like a gps for indoors like in your car . E for indoore waz navigation. App the camerahe is on and we know where you are within one meter. In august, it worked with big brands in malls, shops and hospitals. It is working with stores to help customers pinpoint items and buy them, but do we need indoor navigation . Are lot of times we indoors, some people are rushed, some people are shy. Etc. Asking you can just say i to this Office Building, or where you parked your car. Crowded becoming a space. Usesnds indoor app magnetic space to navigate indoors. Then there is google. The powerely he used of the crowd to build up his database, so if you only have that sense of direction of a blindfolded badger you can never get lost again. I actually have better eyesight than a blindfolded badger. Does he need to be blindfolded . And ask essential question. You may never need to ask for directions again. Fared sinceassets the last fed meeting . Stick around. Time for todays bart chart. Faredt how assets have since the last fed meeting on september 17. The dollar, highyield bonds, commodities and stocks. Block is back september 17, but it is fastening to see how they have fared. The dollar which is measured by the bloomberg dollar spot index is up by 1. 5 . A number of fed officials have expressed concern about the strength of the dollar and its impact on the u. S. Economy. It is crept high, i dont know if it is high in the. But it is up. Highyield bonds, that is where a lot of money has gone. The fear is if the fed steps back which it is likely to do today and if it raises Interest Rates we could see an exodus from some of the more risky events. Highyield is deemed risky. It is unchanged but look at the low, low was the 15th of october and right then it was down by 2 . Since then it has recovered. Commodities is the same. Run october 15. Fed itt just about the is about china and Global Growth expectations. Periodty stocks in one were down by 8 from the fed meeting through october the 15th. October the 15th was the eye of the storm. German growth fears, chime in growth fears, ebola fears, russiaukraine fears, that dayt fears seemed the perfect storm but it was the day after on the 16th and they have all recovered since then. Bullard said the fed should consider a delay in ending qe and giving a lift to the market. The irony is the fed is likely to end qe today. It washat wasnt it but interesting that it happened on the 16th. Since then all the assets have performed better but the ones that have underperformed, commodities and stocks, how will they fear from this meeting to the next one. From this meeting to the next one. Secondlargest retailer says its thirdquarter sales miss analyst estimates. You are more of a meteorologist than ever, because it is about the weather. Mostly it seems, it has been unseasonably warm in september and october and next got off to a good start this season. August was called. August was cold and the sales were up. The autumnal. Was pretty cold. They have cut forecasts and left a wide range. Certain Sales Estimates are minas two to plus four. Four. Us two to plus that indicates the uncertainty. You have not bought a coat by october, youre not going to. You will not buy it at full price anyway. If people have not been wearing last years code again the idea was that you will keep warring the coat up until the sales come coat upwearing the until the sales come. They have arty done the sales. Do people really replace their coats every year . I thought it just meant that you went coat list, apparently you can wear last years. Even if it is two years old or three years old coats last a long time, they did in the good old days. What about will this go to the end of the air . We have talked many times about strategy that comes from like last christmas, that youre not surprised by the sales that come out of nowhere. Praised byhat was analysts and customers alike. It is something they have done for decades, they dont mark down until after christmas and this was why they left a wide range. Because they were not want down the question was if other people were. Virtue and will have much less discounting than last year. So far that has been the case but we see if they managed to keep it up to christmas. Ks could continue. No further special dividends. The special dividends were when the share was above the buyback price and it is around current level at the moment so it is less protectable. Thank you very much. Looking at a live shot at the city of london, and roughly 10 minutes time, futures indicating that stocks will open higher. Not long until the European Equity markets open up. Lets talk to Jonathan Ferro who is here. It will all be, one word that starts with an s and has an easy and id in it. E and a d in it. What has been the impact of the Federal Reserve Balance Sheet. Talking a mother German Economy we are not talking a significant amount of money. A lovely shark that well show you of the Balance Sheet plus the s p 500 and we will talk about nex as well. The debate between consultative easing quantitative easing i have two lovely coats, they dont need updating. The interesting thing about next is they flagged this in september and it wouldve been in the estimates and they still missed. Maybe a little bit of a sweetener is the tease of a Share Buyback but you cannot hide the ugly numbers that came out. Have a job for you because i cannot find it on the bloomberg, there was a forecast page about the fed meeting. All 30 economist that we have surveyed say there will be an and to qe, but according to our story we have gone further, two say we will not end qe. Who are the two . We need to call them. Thirstyig boys, the institutions we did survey say i want to know who the two are. What is your view . Paragraph five, it is a big paragraph, everyone is upset stover it. Is upset over it. The symbolism around q et end e coming to an timelinea considerable whether that stays in or not. John is next on the move. We will be back nice and early tomorrow. Movecome to on the right here in the city of london, just minutes away from the start of european trading. This is what we are looking at. Rest in peace qe3. Almost every economist surveyed by bloomberg expects the fed to wind down its Asset Program when the meeting concludes today. Deutsche bank delivers a loss. Germanys biggest lender posted losses after setting aside nearly 900 million to cover the cost of investigations of past wrongdoing. Elsewhere, bling the weather. I miss across the board for the u. K. Clothing retailer, next. Downgradedorroded the outlook for profit. What does it mean for the open . Futures here in london, forget about it. Ftse 100 up by 34 point. The dax up by almost 60 points. Qe3 ends, looks like a higher open. Pushing equities higher. We are seeing spain, italy as well. Lets have a look at how we are opening across the board. Higher 4 10 of a percent this morning. Similar moves on the ftse 100. Quantitative easing, byebye in the United States. Still no hint of rate rises. We are