Passed. Yearly sales are set for six years of decline. Cars sold. N nowhere near precrisis records. Thank you very much. Well have more on the car industry shortly. We have recommendations for london. The interim report comes from the Airport Commission that there is need for additional runways. By 2050. Ional runways they shortlisted the options. One is in the south and one in heathrow. Wants, it is that of the shortlisted. It will be reinvestigate it. What ever happens is politically charged. It will have impact on travelers across the world. You are watching dixons. Is a big retailer. Electrical retailer. Number one here. Number two in europe. They have had their first pretax profits in almost five years. The strategy of turning around helps when the competitors go out of business. The goto destination for shopping. You are probably the only destination for real shopping. Their numbers should be taken quite well by the markets. A few other bits of data as well. A will look at that in second. What does the rew watching . A german confidence and data. U. K. Inflation data. Inflation isat headed go back to the target which the bank of england set which is 2 . It is nothing like that if you drive your car. The utility bills and inflation is deeply entrenched and tied into the prices. To extend, we are immune. A volatility is rising. The tapering which could, ron the meeting which begins today. And tomorrow. The tapering which could, from the meeting which begins today. They said it is coming in the coming months. What that means a wait and see. You did a german data. We are expecting confidence to rise for a fifth month. What is moving. More defensive. Sap down by one. 5 . A volatility, people are protecting. They are buying protection here and in the u. S. 17 andty has risen by in the past 10 trading days. Lot about protecting yourself from a volatility spikes in the coming months. We have the automobile reports. Rising for a third month. The loans rising street in four years. You are seeing spain and the u. K. The u. K. Is number two markets. A volkswagen, theyre over wall sales rising. The premium brand saw it fall. Their overall sales are rising. The premium brand was falling. The insurer here. Profits this morning. How to shock the market. Minus. The seven highest a great. A technological glitch here. Lets not focus on that. Fantastic christmas at dixons enacted just tablets and ipass. The phenomenon of baking. I had to throw that in. First pretax profit in six years. Not bad. Thank you. Our next guest is optimistic about the u. S. For 2014 but cautious about europe. Chief strategist and ahead of investing at cross bridge capital. They have more than 2 billion euros in assets under management. Great to have you. 2014. O me about there seems to be an error of complacency. We do not know at the rally will continue and equities next year. If you look at the u. S. , clearly everybody is talking about tapering and how it will affect the market. I am not very surprised about that. It may not happen in december maybe in january. Maybe in march, not now. Janet yellen a dovish outlook. I would be surprised if she comes a taper right away. It is interesting you just see a taper tomorrow. There are two sides to the coin. If you do it this time around, janet yellen will not have to take this decision. I agree. If they were to taper tomorrow, i do not think it would change the market a lot. The market expects tapering. Its is a strong message. This in the forward guidance. Just to make sure i understand, you did everything is priced in. We will not see a huge correction whether we taper tomorrow or next week. Works there is some profit taking. That is for sure. What are the main things in 2014 you are watching for . You look at [indiscernible] most of the returns in the u. S. Have come from expansion. That does not mean you will not have a good returns. I look at the valuation. [indiscernible] 16, you can see it go to 1900. Compare that to europe. Youre not really seen it in europe. I am cautious because at the start of the year, the view of how they should treat to the banks. That is something to look at. However, you have seen in the last four years very quickly. We have to take a break. You have seen a huge amount of money flowing through bonds. Not just one year of trade. So much. You well come back to you after the break. Up . Else is coming sachs wilson of goldman will join us later in the hour. We will be discussing prophetic taper. And his outlook for 2014. Welcome to on the move. We are getting pictures as Angela Merkel is worn in for a third term this morning. Its what happened in berlin. Seeing pictures of purchase a couple of minutes ago. She is there mingling with parliamentarians. This is two days before the leaders meet in brussels. We will monitor and get back to them as soon as something exciting happens. From london, this is on the move on bloomberg. Com. Dixons, largest retailer in the in. , posted the first profit 10 years. Manus cranny is here with the very latest. Talk us through the numbers. This time last year, they made 14 Million Pounds in pretax profit. They have taken on some of their problems. What you have got here is taking away the turkish and french businesses and the leaving you with a core. You look at the geography. Is about tablets. You cannot deny. Cap was are going to add into the mix. Tablets are going to add into the mix. Over in the nordics, they get about 30 of their business. You are seeing it rise by 3 . Have a presence in greece. When you look through the numbers, the story that the margins are just being eaten away. Just 0. 6 . What half the ceo Sebastian Jens down to transform the business . Ftse is been there for a while. Is about hardware. He has been there for a while. It is about hardware. It is about diversity. [indiscernible] transforming the complexion of the company. He is definitely added to that transformation story and really turned it around. For theeyear high stock. Despite, despite a pretty tough time of the u. K. High street. Ing comes into this. We buy more baking paraphernalia. Is a british phenomenon. It is british baking. And in the observer, the ceo said baking has really people are looking at in their kitchens. It is involved in the Great British baking frenzy. It is making people think a more about what is going on in their kitchen so they are looking at mixers as saul of the implements. I am not saying the bakeoff has turned dixons around. It shows you that products and the right moment as long as you the right product at the right time on display which is what customers want. You are hitting your stride. Dixons is doing that from the Technology Side and in terms of the baking. From the ceo. A legend. You are right. It is fashionable to bait into the u. K. Where it was not two years ago. That translates to sales. You have to remember. They are all carrying through. People go out and restock in terms of refrigerators and goats. Would you buy new, you want new technology and you want to be able to adopt the home. Still with us is chief strategist at cross bridge capital. ,ere talking before the break you are more cautious in europe and other parts of the world. What you like . We come back to the question of well not seen it this year. Europe is out of recession. The food sector. What is happening in china. And other stocks in europe. The media sector. Stophave not delivered to we are going to see the earnings. In 2013, we have not had any earnings per growth. At the same time, we had such a big rally. Even with they are mentioning their numbers will the money is not going to two banks. And lots of money has been returned by the banks. And not to buy businesses. Easy enough confidence, you will see it. That cycle will go in 2014. What about emerging markets . Sure, sure. Or firstirst quarter half, it will be cyclical. You look up money across the board in india and brazil and indonesia as well. You are looking at reforms and emerging markets that deliver the growth. All of the fruits have been harvested. And now it comes from the government side. The gdp growth is going to be much better than emerging markets. A challenge. Gave me a sense of what you think, consumer goods. Health care and financial. Consumers would you buy into financials . I would wait to see what it means how the bombs will get treated. And what it means for the banks. Bonds will get treated. We have said a lot of m a. It will continue to play out. Yes. The u. S. Isngs on industrials, my favorite and technology. That thing you would not abide in 2014 and that you like and 2013. I would say energy. Especially oil prices are sliding. Interesting. Manish singh, thank you. Airport commission has published recommendations to increase capacity at british airports. Caroline hyde joins us with the very latest. What are the key proposals knew it woulde add to capacity. What they outlined is we definitely need an additional runway. Potentially we need to a additional runways and south east england by 2050. The proposals and they are down theard, head is saying three proposals. Options aty or two heathrow. That is the biggest and Busiest Airport in the whole of europe. One additional runway is there or extend an extension of runway up by 6000 meters. It would be too independent runways. What is not on the table. To notbeen trying shortlisted. There are too many challenges. They will study it once again in 2014 as potentially a credible proposal for consideration. Thank you. Before you go. Campaigning for a boost in capacity, right . Right. Look at the preks pension program. They called themselves led to britain fly. The pro expansion program. Universities and solicitors. They are all coming out and saying we need to boost capacity. This morning, we heard from the british airways. He said we need a political consensus. They needo saying heathrow to remain the heart. All of this comes before the next general election. The party pledged in the last election that they would not support a third runway at heathrow. It will be hugely politically challenging. It will be contentious. That is the main issue. It will be such a political haggling. Thank you so much. Caroline hyde a with the latest on airport expansion. Hree months of auto sales what is driving the sector next. Welcome to on the move. I am francine lacqua. Here are companies on the move. Traders have push russia voting shares to the lows in 25 years. It signals speculation that novartis will sell more than a 40 billion stake. Traders are preparing. Exit with thell u. K. Government i had a schedule. There are leaving the facilities. Have an eject a 8 billion will ejected 8 billion. Said theexecutive company is a better position to pay dividends next year. Gm said it it plans to spend an additional 1. 3 billion to upgrade five u. S. Factories. Automobiles, lets go to hans nichols in berlin. Emmas optimism on europe. A lot of optimism on europe. Had a sneakrson peek. Gm did not to do well in europe. He seemed to be on target. Things are turning a corner in europe. The European Market is starting to show life. Some countries are doing better than others. A commitment that we will be in europe. Thes francine, let to do numbers. A slight increase for the month of november. Barely. Would you look at the past four months, you see the trend. In septembercrease 2 544 . Up slightly in november. 25. 4 . Eptember spain has renewed their cash for clunkers program. An increase of seven percent. There is softness. Year on year, 2013 looks to be the worst year in the last six. 11. 4 million cars. It will say december a will not be a big month. It rarely is. It looks to be won the softness months on record. One of the winners, volkswagen. Jim had a bad numbers. Was down. Gm had bad numbers. Hard to find good news in the share prices for peugeot. Thank you so much. My next guest was won the first to talk about that tapering. Andrew wilson joins us after the break. His outlook for 2014. In the meantime, this is what the markets are doing. We opened with a downturn. We are a little bit cautious. Waiting for the outlook of the Federal Reserve for meeting starting today. 34 of those polled by bloomberg predict the fed will ease purchases tomorrow. A. M. , thet 10 00 index of investor and analyst expectations to predict development six months and event climbed. In advance client. We are watching for Angela Merkel. She is taking the oath. This is at she takes charge of a third term to allow her to press her agenda for europe. You are seeing live pictures. We are back in two couple of minutes. Welcome to on the move. I am francine lacqua. These are the top headlines. Angela merkel will be sworn in for her third term as a german chancellor. She signed a platform yesterday that leads her union and control of key ministries. Her 16 member cabinet will also be sworn in today. Than 800have shed more billion euros in assets since the end of 2011 according to reports by the top banking regulator. Well they canw sure losses over the time period. Criticized a plan on how to deal with failing banks. He said at the current proposals might be too complicated. Ministers are meeting in brussels to work on a plan for future bank failures. The french finance minister said needed a deal to be reached by thursday. Speaking of central banks, we are getting the breaking news from sweden. They lowered the key rates to around zero point 75 . An impact and what that is doing on the currency very shortly. Something a lot of economists were expecting. Something we will continue to mention throughout the day. Lets get more on the breaking story. Our europe editor david tweed. Dragicsore about critique about how we deal with failing banks. There are two elements. Excuse me. Two elements that have to be addressed by eu leaders this week. One is the banking a resolution mechanism. This is administered by a board. It would be made up by representatives of national government. It would be created using european treaties. The other element of the baking union and that will be discussed as a single resolution fund. That would be created by a governmental agreement and cap would be National Funds which would then come together by 2025 into a single font. Mr. Draghi said at the way it is being approached is too complicated. Responsibility for supervision and resolution needed to be aligned at the european level. You as a counsel to set up a robust, single resolution mechanism for which three elements are essential in practice up a single system. A single authority. And a single fund. Basically what he is saying that the European Central banks or Central Market regulated the bank is unviable, the resolution of the bank needs to have an instantaneously. If you cannot have all of these people running out consulting each other all whether a baby is viable, that is his issue. He wants and that sorted out. We have what are analysts expecting . Out innumbers are coming 90 minutes. We are expecting an increase. The third increase in a row. The highest since 2009. A German Economy at the same time, we will have a government. Angela merkel, a meeting they are expected to vote and as the chancellor. She will be sworn in later today. Thank you so much. Our european editor. The very latest from berlin. Our next guest was one the first to talk about fed tapering. ,ets welcome Andrew Wilson goldman sachs. Great to have you on the program. Tapir is very difficult to predict. It always has. Very difficult to predict. Will we get it tomorrow on march . What are the pros and cons . It will not happen by the end of q1. Debating a lot. It will matter quite a bit on the day it happens. Not in terms of the outlook six months from now. What they are looking at is the day to improving. Moving on strongly. Gdp came out, heavily inflated that it will not keep pace. If you look at 2014, the u. S. Economy is on a decent recovery trend. 3. 5 growth next year. Most likely, we start in january. A chance in march. Inflation is at a very low levels. The conundrum or the fed, how do they balance . They definitely needed to unwind. This the point were making last time. The marks understand that fed tapering it does not mean a rise in Interest Rates. The markets panicked. That is right. There has been communication to distance they ease of tapering from rate hikes. Talking about 2016 or later. Chance view is theres a that the fed could be hiking the rates in 2015. Would bring that forward a little bit because of the nature of the recovery. In the u. S. Economy particularly around the house in the markets. We were talking earlier session about the aspect around housing and House Building creates demand for finishing and appliances. The key elements in our view for next year. That positive momentum in the Housing Market will spread out more broadly. If you look at the world economy, 2015, the fed started to tighten. They will start taking. Your the ecb possibly using. And the bank of japan. It is a phenomenal environment. Central banks on different levels. The fed meeting the accommodation. You have to find a way for mario keepi and his team to european rates low. We think the economy is recovering. A fragile recovery. They cannot afford to see Interest Rates rise. Some form of further accommodation a we think is very likely in 2014. Itll be interesting with central bank moving in different directions. Will Mario Draghis job more difficult . We see the u. S. A rates rising. For it will be hard to stop the u. K. Rates to stay where they are. European rates at the subdued levels. We will see. It will be addressing. Youre quite optimistic about europe, a little cautious. We have been through such a tough time and we look across the eurozone, around germany, it looks to be doing pretty well. The directory is improving. Spain is getting better. We are seeing significant improvements. Better flexibility and places like spain. Spanish exports are doing very, very well. We are optimistic but in that context we are seeing subdued growth and contraction. Next, we think 1 . Not a lot to be excited about. How toes it mean set policy especially when we are more word about inflation . You are talking from a investment perspective. We are cautious. As a result with positioning portfolios to benefit in some cases from a rise in Interest Rates. That is one of our key abuse. You do not want to particularly in the u. S. Where we are very confident. Would you buy anything in europe . Maybe. Some of the peripherys. Some of those are stabilized. European growth is around one percent. Would continue to think and places a like spain. Reasonable value with inflation being so low. We have inflation figures later. A full report. What is your take . And doing a. There are pockets that to the bank of england is concerned about. Areumsize Enterprises Still very weak. The consumer looks to be recovering. Car sales and home sales doing well. It is giving a lending to business and getting the business is going. Thank you. Andrew wilson. He stays with us. Also coming up, how these artists are turning technology to boost live performances. Keep it right here. We are on the move. I am francine lacqua. On is on the move, bloomberg. Com. Andrew wilson is the ceo of asset management. Thank you for sticking around. We talked about the macro environment as we go into 2014. We talked about the you as a europe the u. S. And europe and u. K. They tell you about how markets are reacting . We are fortunate. We have seen inflows into certain bonds. From bloomberg is talking about the strategic and, font. That category has seen significant inflows. Around 100 billion across was up inflows into bonds. It has flowed into bond funds. That number was higher in the middle of the year. Tapering, it comes from emerging markets. Big inflows into the equity bonds. The inflows, the other extreme dynamic is we have seen outflows from emergent markets. We are seeing inflows into emerging markets equities. Not as large, but the mining going into equities. The money going into equities. Very low Interest Rate and on people thatg we need to get returns. That money is starting to flow into riskier assets. That is what is driving the flows. How surprised were you we have a story on the bloomberg terminal. This is tracked by morningstar. How surprised are you by the fact about the Bond Mutual Fund . Pleased to see that. We up and telling the story for a time. Competitors have Interest Rates and that horizon. You have to move away from traditional bonds. You have to move into something that can still benefit. To see those kind of inflows. No, we are not a surprise. The question is keeping the momentum going into 2014 because the Interest Rate will rise. Maybe the next 12 or 24 months. It will be a different world. And investors are thinking of this well ahead of time. They are concerned about and they want to make sure they do not get wrong. The comments around tapering and people notice it can go up. An investor much forefront of their minds. If Interest Rate is not going go , what do i need to do . Protecting yourself is a good expression. This is what they are doing. Thank you so much. Great story have you on the program. Andrew wilson. The pulse is coming up in 15 minutes. We are joined by guy johnson. We will be talking about airports and the u. K. And recommendations we had this more from the commission. The u. K. Has gened a complete inability to make decisions about capacity as special and the south east of england. They are addressing this. The commission which was a led was a deferred decision. Read between the lines and it is clear. What he is suggesting is that heathrow is expanded and further expansion of gattick. To getalk to later exactly what he thinks. And this is an interim report. He is focused on to airports. Gattick and heathrow. We are going to be talking to the ceo of gattick. At 930 a. M. Ening time slot. Looking forward to the conversation. Selfie. Old it is in the dictionary. It is not a picture, capturing a moment. You are plenty of moments of the pulse, in 12 minutes. Companies on the move. Twitter, some analysts downgraded. They said the company new Advertising Products may not warrant the climb since the ipo. They fell more than four percent. A u. S. The judge ruled claims over the handling of face the ipo. Suffered 520 in damages from the botched offering. Nasdaq faces negligent claims. Not over decisions and to allow trading to continue. Beyonces surprise album have smashed sales on itunes. The selftitled album has sold more than 800,000 in three days. It cannot early friday exclusively on itunes. Staying on the music industry. Artists are turning to technology to boost live music performances and revenue. Cory johnson reports. 4. A 1, 2, 3, withe concert this is technology driven. Today, the best show often means the best stage. It is an arms race. Based in thes heart of amish county in pennsylvania. You build your relationship with your customers in the live experience. Elton john and Justin Timberlake and madonna all have turned to construct mind boggling, functional, geeks out sets. We have architects and engineers tom a people went to trade school. It cut,e a single board the process starts with 3d modeling. These are shipped from all over the world was a slapped together to stand for a day and disassembled as quickly as the next gig. James. Behind it all is he started it in a 1994 when he was in college. We have to do it financially responsibly which is usually the most difficult was up everybody has champagne wishes and caviar dreams. Putting on a big show is necessary. A great to be here. You will not regret. Michael late taped for his buble taped for his tour. If you ask for somebody is been 100 a ticket to see you and sent a football field away from you, this is something that is necessary. Performance magic is a necessity in the changing music industry. Cory johnson, philadelphia. Up next to my gaping. Escaping. , no final thoughts are next. Love them like we do here or hate them. No escaping the selfie. Who can we blame for the rise of the selfie . It is not a kardashian. I do not have a problem. It is an instinct to carry yourself in a way you would like to be remembered before history does it for you. Norman rockwell painting a selfie. Inis possible have a camera your pocket has perverted this natural instinct and turned into unbearable narcissism. It is possible. We have to remember the role of the self he selfie. Have one ont facebook, it will remind you until you selfie your cell. These are not social clubs. They need you to selfie so they can make money. This was taken at my wedding. Ais is me walking away from photo. These are ways to imply i am too cool for selfies. Twitterot be a part of or facebook or instagram to make a decision of what you would like to world to think you will like to be remembered as. Silicon valley is a random by ies. Randa by ran by self after this, i am going to put it on facebook. Currency. Sism is the i do not think the rise has anything to do with a decline in humility. Its a Business Strategy and it is working. Who does not love a selfie . Manus . I love one. He is right. I have not got a photograph. You have to do a funny selfie. A of lighting and camera work. What we are doing. A lets check in on the markets. The your interview with Andrew Wilson was quite depressing. What matters today and six a months time. Quite depressing. For me that is the most emphatic statement. I think actually buried in the conversation was a really important online in terms of the view of the markets which is the momentum in the united states. 3. 5 and the fed will be forced to hike early in 2015. Something to think about. With bloomberg television. We are back with the pulse. That is next. Roger runway. The u. K. Air force commissioned banks expansion of the busiest hub. Howard davis. Th cashing in hong kong spurs. European car sales rise for a Third Straight month. And making a mess. Mario draghi warns politicians that plans for a Banking Union look to come located and underfunded. Complicated and underfunded. Good morning, everybody. We are live from Bloomberg European headquarters in london