Buses are packed. The strikes are about modernizeation of the tube. Transport for london is trying to update and get rid of ticket offices but with the modernize modernizeation comes the opportunity to impact business. Waking up at 4k a. M. Has good watch out what mario draghi will do. A lot of Brokerage Companies expected to cut rates before march. Will we get a rate cut snl that is the question. Watch out for p. M. I. Services. Well get italian, french and germany. P. M. I. s are are important services. We have a little bit of disappointing news in the last couple of weeks. Were watching the tech world and this data. What else are we watching . The data is very important. Were expecting them to come out with big numbers. Europe is where the big story is. R. B. S. , Deutsche Bank looking for a rate cut now. My big question is that japanese rebound yesterday, does it carry through to european trade. Equities up overnight. U. S. Equities higher yesterday. European falling. Down on the ftse and down 1 3 on the dax and down 1 3 in paris as well. Im going to get stock specific with you. You can decide whether youre brave enough. Im looking at swatch. Expected to rise when it does finally open. Up 4 this morning. Profit will the swiss franc ever give them a break . 1. 6313. D now buys you the number were expecting this morning, 59. Anything above 50 is expansion territory. Approaches 60, that is outright punchy, francine. Thank you. Markets look to be rebounding after a serious slide earlier this week. Joining us to share his Investment Strategy richard jeffries. Great to have you on the program. How surprised were you by the correction . I think rather than the correction, i would see this as a reintroduction of volatile any the markets. What the fed has done is buy a period of quiet they have forced down markets to abnormally low levels. With the tapering it must be the case that the volatility comes back. Im not particularly concerned by this. 3 trillion has been wiped off probably in equities since january. 3 trillion against what . What is the basis were talking about . The percentage has been reasonably substantial. We know that. But on the other hand, the progress that World Markets made last year was substantial. At the same time, of course, the tapering is taking place, i think there is a readjustment of economic views going on as well. There has been a tendency for economists who have been surprised by the strength of growth, particularly in europe last year, to ratchet up their forecasts to rates that were not achievable for the current year. People are beginning to bring those down. The other big issue, which we tailback about quite a lot of course, is that this is not the sort of economic recovery that is going to be particularly beneficial to emerging markets. It is not a recovery in which the west generates excess demand. Weve had a little bit of a mixed bag but a lot of them still under pressure. Oil, pharmaceuticals. These are industry problems tied to growth. We do need to see some growth, more in the u. S. Than europe. Europe, we could see more p e expansion. The United States market is more highly valued. It needs more validation from immediate earnings growth. Earnings are important through the economic cycle. What is the main thing that youre watching out for . When you look at earnings, is it a good time to get into a stock that was in 2013 where we see potential in 2014 because of earnings or do you stick to the top value stocks . Were looking for stocks that can show good Growth Potential and probably can get that growth more out of focus on western economies than trying to export to developing economies. That is going to be a much tougher environment. What we have been looking at previously is exposure to cyclical recovery. That will be the surprise factor of markets. That story is not completely played out yet. That has run its course. Were looking more now at longterm growth. The west is going to grow and the west is going to grow this year most likely a little bit faster than it grew last year. That is a good background story for financial markets. If youre looking at longer term growth, the banks are the easiest play if you believe that growth will come in four or five years. Strong growth. Im not sure how strong it is going to be. We have to ratchet down expectations. Were not going to get to the growth rates we saw pre the recession. Banks could do well against this background. It has been a slow process. There is some value in the financial area for markets. Thank you so much for now. Richard will stay with us and well be talking about other Industry Groups and technology and retailers. Here is another look at what is up on on the move. Twitter faces investors with their first public earnings and alibaba may be worth more than 150 billion. Peaking of billions, michael coarse makes a fashionable fortune. Welcome back. Im Francine Lacqua in london. This is on the move. Now this is a stock that is on the move. R. S. A. You can see it is up some 3. 2 . This is after the insurance, the troubled Insurance Group hired the former r. B. S. Chief executive stephen hester. The company is trying to put its scandal behind at its irish unit. For the moment the stock is gaining 3 bonnie 2 . Microsoft has named Satya Nadella as its new c. E. O. Were following twitter this morning which will announce its first quarterly earnings. Hans, first of all, how much will he make and is bill gates more or less powerful in his new role . The second question is a lot harder to answer than the first. The first is 18 million in total compensation. He gets a oneoff Stock Offering that could be worth 60 million for nadella. For mr. Gates, hes going o come back and spend 1 3 of his time at microsoft opposed to before 1 5 of his time. Im not sure how they got so precise. His role bb to incubate new products. Nadella wants a more narrow focus. A tighter focus that could mean units and groups like the x box, like bing, could be sold. There are still a lot of changes to happen at microsoft. Nadella will be implementing the plan that ballmer put in. Well see how he does his first day in the ring. Speaking about first days in the ring, twitter releasing earnings for the first time and they have to contend with facebook. What we have seen in the last two, three months is that every time something happens with facebook, people by analogy say twitter is doing the same because they are so tied in the social space. Look at the two companies in comparison. Total number of users, 232 for twitter. 1. 2 billion for facebook. E saw twitter stock spike. Were looking at their revenues for mobile unit users. Hans, thank you so much. Hans nichols with the latest. Before you go, facebook may not be the biggest kid on the block for much longer. Alibaba, the evaluation they got is amazing. 150. Around just in october, the average evaluations were 120 billion. Facebook is at 159 billion. The point with all the alibaba evaluations is they are derivative of yahoo presentations. They have 24 of alibaba. They have their Third Quarter revenues around 700. Third quarter profit around 700 million. We dont know. We wont know until alibaba i. P. O. s and that is going to be a fun one to cover. Francine . Thank you so much. Hans nichols there on the ground in berlin. Still with us is richard jeffrey. Thank you so much for pick ising around. We talked about because it seems like it is the big new thing and at the same time it looks punchy in terms of evaluations. How do you see the twitter news today . When you look at technology, you have to be focused on growth areas and content. I think when you look at Something Like twitter and alibaba, for instance, they are content providers. They give people the opportunities to do things with their underlying technology. That is important. That is where the growth is going to be longer term. This is what mind boggles me is that i love being on twitter. At the same time, how does it make money . Were thinking that it may do some e commerce side. Until we have a plan in place, what are we buying into . Eventually they have to convert their platform into something that is revenuemaking. That may be in some way selling you product through advertisements. It could be introducing a new e commerce type product. Clearly their access to people has to be monetized. That is a big question. It is the sort of question that other companies have got over but they have to look work at how to do it. Do you see any value to be made, media, telecoms. Consolidation . Is it too tough for investors to pick that industry just because they think they will buy each other and evaluations will go up . With these sorts of companies whether it is technology, media, telecoms, i dont think you can say were going to buy that sector. You have to focus on the companies that are growing and extrapolate that into the sector. So you are looking for the people who are exploiting Current Technology effectively and are not lobbed into for instance, old technologies. We have seen companies in growth areas but they get locked into old technologies and they fall way behind. Thank you so much for now. Well be talking about retailers next. We had numbers out from swatch this morning. Lets get to johnathan ferro to break down the numbers. Jon . The stock moving up over 4 . The biggest oneday move higher in some 12 months. 2013 profit up 17 . They had a bumper compensation from tiffanys. They had very good sales in january despite significant headwinds for the luxury good market. Each month sales missed richemont sales missed estimates. Watch is shrugging it all off. As for china, they are expecting a bit of a rebound. The c. E. O. Also told bloomberg that the Exchange Rate was the one thing that he was concerned about. Is there any sign of the pressure abating . Yes, he is calling it the headache. Cutting more than 100 million swiss francs from sales. You have to question what happens here. The central bank has come out. They put a floor on the Exchange Rate. Whether this remains a safe haven currency or not, there is still a trade surplus. It is something they have to learn to deal with. Thank you so much. Johnathan ferro with the latest on swatch. Lets talk about retails. Do you still like some of the stocks . Luxury was the darlingor 2013. 2014, concerns about china. It may not be such a good bet for investors. There is a bit of a sea saw effect there. If you look at developing markets and emerging markets, it looks as if Discretionary Spending power will be limited in those countries. With better growth in the west, you would assume it would be growing. Again, i think it depends on which company youre talking about. If a company gets a lot of its sales through western markets and can benefit from higher Income Growth yes, then they might do quite well in this situation. If youre focused on emerging markets then youre going to struggle. Should china be more under pressure . We had an interview with bill gross yesterday. It is one of the biggest questions in developing nation and the largest risk for markets. Is the market aware of this and are you worried about china . I think what markets have been doing over the past couple of months is yes they are aware of whats going on in china do people believe the 7 . They probably believe actually that growth is somewhat lower than that and that is what the shortterm indicators are suggesting. Is there any way what is your next play in the next couple of quarters . There are so many opportunities. China is biggest risk but also the biggest opportunities. What is your favorite way to minimize risk but maximize returns. It is quite difficult. They are trying to rebalance the economy and trying to rebalance it toward domestic demand. It is going to be quite difficult to find plays what are going to benefit from increased domestic demand. Youre possibly looking for more basic type good producers and are probably looking for companies within china itself and smaller companies. That is really difficult. Richard jeffrey there. Chief Investment Officer of cazenove capital management. Coming up, we looked at proposed policy changes at the heart of a travel tantrum. Welcome back to move. Im Francine Lacqua in london. Caroline, as part of the modernizeation, London Underground is business. What plans does it have to boost income . Youre right, francine. Of course it is a negative effect of modern sizeation that we will see jobs go. Transport for london is looking to close all of the ticket offices across london. Yes, that means 750 job losses but it also means a real opportunity to bring business, bring money into transport for london. Think of all of those unused ticket offices. They could be prime retail space. Travel for london has been wooing them for the biggest retailers out there. Tesco wants a piece of it. We could see them putting in lockers as well and other retailers getting involved in the opportunity for business in the London Underground. There is money to be brought in. In fact, the key strategy here is to bring in 3. 5 billion pounds in terms of returns to help bring down fares. At the same time, basically london would be following moves made by other global cities. Youre right, francine. It is an interesting one. Already we have barclays sponsoring the bikes here in london. Virgin sponsoring the wifi. Rio madrid. Vodafone has a station named after them in madrid. Look at korea. They have taken some major steps. They have kia, the carmaker offering. They have ways of getting in the retail space as well. I think there are many ways that london can develop. 75 of those polled in london think we would appreciate for sponsorship of the london and bring in more money and bring down fares. Back to you. Thank you so much, Caroline Hyde with the latest where business meets the queue. Here are some companies on the ove for you. R. S. A. Hester to lead he will seek to boost the ompanys finances. Alibabas estimated evaluation rose to 153 billion after they posted sales and profit last week. It was estimated to be worth 120 billion. Analysts expect the company to hold the largest i. P. O. Since facebook. Now coming up on the program, we have plenty more. Well go through the market and tell you everything about the day and talk about cars. All of that and much more coming up on on the move. Welcome back to on the move. Im Francine Lacqua at bloombergs European Headquarters here in london. Were 30 minutes into the trading day. Lets see how things are shaping up. This is the picture for the markets in europe. Were seeing a little bit of a mixed bag. The ftse up. 03 . This is before the e. C. B. Were expecting retail sales later on in europe. Tomorrow a lot of banks are expecting a cut in the next couple of months. Will it come tomorrow . Will it come at the meeting afterward . Will it come at all . Thats what they are asking themselves. Euro dollar, 1. 3518. The euro declining toward a 10week low against yen. We are expecting retail sales. We are expecting a bit of p. M. I. Services. Ill bring you those as soon as they break on the bloomberg terminal. Investment bankers in europe are off to leanest start to year in a decade. Loans and stock and Bond Offerings fell 22 last flont a year ago. It has been stagnant since the financial crisis. The founder to have billion dollar online marketplace faces a new charge. He was indicted by a federal grand jury in new york for running an ongoing criminal enterprise. And twoday strike by London Underground employees is threatening the capital with ravel chaos. There will be limited service in most lines until the strike ends tomorrow night. Good luck to the commuters. Michael kors is fashions newest billionaire. Shares rose to a twoyear high yesterday. We have more on michael kors fortune. How did he make his billions . He is a very interesting guy. After ed out of f. Y. T. Only nine months of study. He help helped design this is mothers second Wedding Dress when he was only 5 years old he had his first womens line in 1981. We have been watching him for about two years. He sold out of the companys i. P. O. Two careers ago. Only owns 2 . Yesterday, this is a story of beating expectations. Analysts expected about 860 million in revenue. They delivered over 1 billion. He stock jumped 20 yesterday. We had prada. Tori birch. Knew siblings nobody about. The founder of month claire was a new billionaire. The fashion stocks have been surging in 2013. Completely different story in 014. Everything is going in the opposite direction. This was really a case of people didnt expect michael kors to deliver what he delivered and he is bucking the trend. The fashionista billionaires will be replaced . Were looking at a bunch of Different Industries at the moment. This is a wide, dispersed realm of people. I like when you analyze billionaires. It is like analyzing the markets but in a sexier way. What are the reasons well see most billionaires . We cant talk specifics of course. We dont want to tip off who we are looking at. Cause of the downturn in luxury stocks they have gone the other direction. Were looking at people in the beverage industry. It is not just the industries that are rising. It is the industries that people dont Pay Attention to normally and there are big companies. Telecommunications is a big one. The Mainstream Media and technology stocks. Hey are having a resurgence. Were going to see more m a in a lot to telecoms this year. Thank you so much. Another billionaire were watching today is russias vodka king. Ryan chilcote sat down with him for an exclusive interview. Lets gets to ryan. Yeah. He got his start under the drinks business in the early 1980s, importing russian drinks into russia, things like mart iani. Martini. It doesnt even have its own high end, national vodka. He created Russian Standard. One way you can judge scale in the vodka business is by the number of cases you produce. There are nine one liter bottles a case. By last year, he was producing 3 million cases a year. Then he decided he needed to get even bigger because for the distributors if you want to be global, what you to do, he decided was to give them more than just the premium vodka he was offering but also stuff on the cheaper end. He bought a company in poland and instantly started producing 27 million cases a year. Only eight million case off. And took him one step closer to his real ambition which was to be truly global. Have a listen. Have other people. Just in the news with the acquisition of jim beam . Yes. You have france, u. K. , United States, japan, the recent acquisition of jim beam. These this g5 will continue or it is going to get smaller . I believe in Global Markets the new brands who come out the g 5 and new brands will ome out ch will continue to what will happen some place when people will be buying the companies, smaller companies. It is interesting that youre in the vodka business and getting bigger. I thought people were drinking less vodka. It is not decreasing. It is growing. Growing . I thought it was whiskey that was growing. Whiskey is growing too but we have a lot categories which are urrently decreasing. I think the real challenge Going Forward is he may want to be even bigger than he already is. If you look at them, they are only eight million cases ahead in terms of vodka production, they have a huge number of brands in their stable. In terms of revenue, while Russian Standard does 3 billion f business a year, diagio does 18 billion. Six times larger. When youre trying to be global, vodka in front of people. Your brand. Spend money on marketing and advertisings. Companies out there like diagio have the pockets and money to do that. They were losing 100 million a year to build up Russian Standards. He is going to have to continue to spend to i guess, grow his empire. You touched on a very good point, ryan. All about marketing and enticing customers and drinkers. How do you go about selling vodka . How do you place yourself in the bar . It is increasingly tricky. You billboards where you can advertise alcohol in the u. K. In many countries it is illegal. You can for the on trade business go and into the bars and sell to singles. Russian standard positions itself as an authentic vodka. You fund things he also owns the miss russia competition so miss russia will often come out into these bars. The other thing is trying to be all things to all people. You also sort of promote cocktails for example. The moss coy schmuhl something they are big in promoting. Moss cow mule is something they are big in promoting. Ryan, thank you so much. For that. Ryan chilcote with the coinching vodka. Coming up, microsoft has a new c. E. O. Well have more on what the leadership change means for the tech giant. That is coming up next. Im Francine Lacqua in london. This is on the move on bloomberg television, streaming live on bloomberg. Com, your tablet, phone and any Windows Phone as well. It could be a deal worth 1 billion. Mp ovartis is said to be drawing interest. Sam, talk to us about the vaccine unit and what is going on with merck. It is interesting with novartis in the Fourth Quarter results. Until now, when you look at their accounts, you see diagnostics. They sold the diagnostics business sometime last year. For about 1. 7 billion. The company during the call, the Conference Call they had, actually gave some numbers that allows you to try and estimate what the profitability of this business, what the revenues of this business is as far as vaccines are concerned. We estimate 1. 4 billion in sales just for vaccines. Looking at the numbers they gave, suggest it made no money. At best in 2014, i think they are looking for Something Like a 16 million to 20 million income from that business or zero. 1 billion on that multiple, youth come up with an evaluation. What they think they could do to make it more profitable. Is there anything in the pipeline that could help with the valings . They have great vaccines. The is why is it not making profits . They do have one new vaccine that has been launched for meningitis b. There is some excitement around that. Well have to see how that performs it launches. What are we looking for in the numbers . Not much excitement there. The earnings flat on last year. Sales flat on last year. Basically that is what consensus estimates are looking for. What has happened here is if you look at guidance, the company has given 3 to 4 increase for adjusted e. P. S. Before the that is on a currency basis. When you take the Major Pressure that currencies have had from the weakening yen to the market issues that we have had, etc. , that is what is putting pressure on the e. P. S. The key for glaxo is focus on business. Are there new drugs launching . What is happening from novartis. Well get back to sam with more on the farm industry later on. Now later on today, well be speaking with glaxosmithklines chief Financial Officer about the companys latest results. In the meantime, the pulse is coming up in about 15 minutes from now. At the top of the hour, well bring you my conversation with philip green. He talked to me about growth and expansion for his company and later on in the program, well talk twitter. The social media giant will be under scrutiny as it releases its first results as a company. Well have all of that and much, much more coming up on the pulse starting in about 12 minutes from now. Here are some other companies on the move. Airbus says it may set up an sembly line in india for its plane. They are set to pitch the plane to their air force next month. Sony is said to be in talks with an investor group. The sale would include their vio. Rand sony has struggled with demand for its Core Products as people have shifted to tablet computers. Panasonic is focusing on products for home and cars and less on smart phones. Of course another company were watching closely very, very closely is microsoft. The tech giant named Satya Nadella c. E. O. Yesterday after a fivemonth search. The companys founder bill gates will be stepping down as chairman. To discuss the changes at the top of microsoft, im joined by russ. My first question is it is unclear to me whether bill gates will get a bigger role or smaller role. What is your take . I think he is going to take a slightly bigger role here. My sense from what ive been hearing and reading is that he is going to be a bit of a mentor for satya. You have two technology guys now in the company. You have satya and bill gates coming back. I think a lot of engineers and product people within microsoft are saying this is great. This is exactly what we need at this point in time. I think were going to see bill gates play a slightly larger role here. Is he the right man for the job . Some critics said it doesnt bode well. If he is the best guy after five months, give the guy a chance. I think he is a good, solid choice. I have spoke on the a few microsoft employees a couple were slightly disappointed looking for an outsider to come in and shake things up. Speed is of the essence here. He knows the company well. If he can woman in knowing the culture and people and come in and be a strong leader to move quickly and make changes, i think that will bode well for him. I think hell have a three to six month honey moon. There are other changes at the board level which are going to be curious to see how that pans out. He has never been a company c. E. O. Before. The markets will give him six months to achieve what . Does he have to turn around the culture . One of the things that came out is that the culture is very stifling because there is competition within units of microsoft. That nothing stood out. That innovations were stifled. He is going to have to show a couple of quick wins. Maybe leadership changes within his top team. Or a coukt of marketbreaking couple of marketbreaking signals saying he is willing to make tough decisions. If he does that, he is on to a good trajectory coming up on the program, the five cars most likely to steal tezzlas spark. Teslas spark. Welcome back to on the move. Im Francine Lacqua here in london. When you think of attractive ecofriendly cars, tesla comes to mind. We check on whether the competition has what it takes to steal teslas spark. Matt miller has the scoop. When you think about sexy ecofriendly transportation, you probably think about the tesla. Why wouldnt you . It is a gorgeous car but it costs about 100,000. We have five alternatives that o for about half that price. The fiat 500 e. An all electric vehicle that literally costs 1 3 the price of a tesla. It starts at 31,800 and comes with an absolutely gorgeous driver. I3. M. W. It is 95 recyclable. This is a technology that toyota is betting will knock teslas electric cars out of the water because water is all this thing produces. The a hydrogen fuelcelled vehicle and the only emissions from Burning Hydrogen and oxygen together are water. This entire car is expected to come in about 50,000. That is the amount of money tesla spends on its battery pack alone. Hybrid a 36r7b plugin only takes 2 1 2 hours to charge with one of these super chargers. If none of those with good enough for you and the tesla price tag is not the problem, well, here is another option. I8. M. W. Engine. Turbocharged it is more aggressive than tesla. Look at these doors. Pretty cool stuff in in the last couple of minutes, we had some data out of europe. P. M. I. Out of italy and france. Are expecting germany shortly. France has come out with very disappointing figures over the last couple of days. P. M. I. 48. 9 for january. It is still a contraction. Ything below 50 indicating a contraction. Italy better than expected but still a contraction. In terms of what were seeing overall for european stocks, a lot of focus on the e. C. B. Tomorrow in europe and a lot of focus on the jobs data on friday. Today were also expecting a couple of figures from the United States including the a. D. P. Research Institute Jobs data at 8 15 new york time. Stay with bloomberg tv. Coming up, well bring you my billionaire with a philip green. You cant stop top shop. Philip green tells me about huge expansion plans for the brand and why he wants the Main InternationalFlagship Store in new york. We put our flag down in the middle of 5th avenue, there is no leaving. It is a commitment. We have to get it right. Thank you, tiffany. Profit at swatch surges as it gets compensation from the jeweler over a failed alliance. Courtesy touches a 10 week low against the yen on that the ecb will stick to low rates