Economic sanctions look unlikely. They are saying the issue is not just a lack of consensus. So far, the only consensus has been avoiding the topic altogether. Thank you. We will have more throughout the day. We are watching retailers. 2013 as a great year. The chairman is saying that there is an increase in profit now. It is a 130yearold rival. Say that this recovery is it no way certain. Investors have been betting big, though. Is going up 1. 2 . They had a fantastic 2013. We are getting some news. We think it is breaking news. We have more complete news. Australia is now sending surveillance claims to see if objects in the ocean along to a missing passenger jet. We will keep on top of that news and the press conference in 1. 5 hours. We have a lot of components. We have Corporate News and janet yellen. We have a stress test today. What else are we watching. The focus is on the Federal Reserve. There are surprises. Lets see how it is impacting europe overnight. You see the nikkei going up and you see the shanghai compound. We are expecting this to play out into a lower open in europe. Let me get the map of where you. The European Equity markets are down right now and it is down 1. 5 . It is down. 7 on the dax. Not just because of tapering. We expected that. Is being priced in and the change could come sooner than expected the change could come sooner than next fact it and more aggressive. Most of thefor majors and look at how the dollar moved. 7 . It is the biggest move since august. This could be interesting. The euro dollar fell. Spain yesterday. This is the bailout that the eu needed. It is something that a lot of people are talking about. But thank you with the latest on the markets. For more on the chat, lets welcome max king. Great to have you on the program. We are getting pictures from merkel addressing parliament before heading to brussels. The ukraine is still very much in the center. We expect to ratchet up sanctions on russia. What does that mean on the portfolio . But it does not mean much to the portfolio. I suppose that the longerterm nations how a group of is opposing selfdetermination. This is a western back to. Coup. That is more on the political side. You say that russia is cheap. It is cheap at it is cheap for a reason. We are going to have big economic sanctions. Isthe reason that russia cheap is because of the domestic savings industry. T will remain cheap that is why it is one of the cheapest markets. You are saying that no matter what sanctions are put on, they are going to Keep Holdings in russia. It should be a small part of the overall portfolio. We like those markets and the value is low. There are signs of a turnaround in equities. The problem with equity emerging markets is that equity seven falling in the last few years. The emergingght, markets will do well. It is a job of bottom up stockpicking. Would you buy assets in russia . Moderately. We are stepping up exposure. Such as . Would you not investor radically. We do invest in Companies Like reassuring expensive qualities and Major Companies that have corporate subsidies. How much of a handler they have on the economy . We dont know. No one knows. We dont suspect that they have a handle. You are fine with china . You think that the economy is taking care of . Thehere is no doubt that economy is slowing and needs to reform. That will be disruptive. Happen, theynot will have Serious Problems down the road. Markets, it is a bright side and were trying to avoid it. I maintain that position. I cannot think that we have hit a controlled environment in china and in emerging markets, i am more interested in latin america and india. It is emerging markets where you have to to be focused on companies and regions rather than overall bets. Has pressure on those markets. That is baked into markets that theyis nothing say or can say that can surprises. Yearis our view for this in the first half of the year. We think that it will be a flat first half of the year. The least because of the earnings forecast coming down. We need to see the forecast it was. Thank you so much. Talking more about the hot topics. Here is what else is coming up. Update. Llen will we will have more on that next. Welcome back. In london, this is on the move. Phone,streaming on your your tablet and bloomberg. Com. We are checking the hang seng index. Is in a bearex market after a drop. That is what we are watching out for. That the client is in two months and it means that the threshold is with some traders. We will keep an eye on that with certain investors on the market and we will have reactions to it. Janet yellen held her first News Conference and took the markets i surprised. We are joined with the very latest. Noisecount all of the over forward guidance. We even got a mention in a statement for the first time. The market moves for one reason. It is expectations and Economic Projections. You see the series of dots where they think the rate will be at the end of the year. Percent in 2015 and 2. 25 in 2016. It is up from december and the forecast. Janet yellen came out in the press conference and try to talk down. It did not work at the time. The market was moving. How much weight can we put on the dots . Know who is you and which belongs to which official. The firston is when rate hike this. It is hard to define. Know, it means six months or that type of thing. You know, it depends on the statements in what conditions are like. Six months. Was it a stumble . Bernanke saying that seven percent was when he would end. Its not like something she will back up on. They will have to get moving eventually. Thank you so much. That is the latest on that. Still with us is max king. Thank you for sticking around. We talked about janet yellen and you said that they should be on the markets yes. Quantitative easing and Interest Rates are a return to normality and reflects economic backgrounds,. Revenues, higher corporate profits. What is your favorite play at the moment . Is it attractive because it is cheaper . Gene thatt particular i am not particularly keen im not particularly keen on making place at the moment. We have a bias on midcaps this year. News,terms of Corporate Companies are being adversely affected by fx. Is a bigger issue. We do not need to worry about it too much. This is one of your favorite stocks as far as im concerned, it is for a long span of time. Do you prefer the United Kingdom, in general . Europe has done well since last year, compared to the United Kingdom europe. Ry is coming in there is no real sign of that. We think that the u. S. Is more attractive. We are tilting towards the u. S. , rather than europe. Tll tell it europe ailgate europe. In a more dynamic economy. You will get what you pay for more dynamic economy. You will get what you pay for. We are looking at beneficiaries of corporate chains and companies that can benefit from the change. Ch like google and amazon. You look at a trip advisor. Technology. Ng they have done well out of that. They have fallen behind. You are looking for change coming from technology. You are looking for disruptors are companies that are quick to adapt mobile technology. I prefer adapters to disruptors. I am not adverse to disruptors. Certainly adapters. It is worth a modest exposure for a disruptor. You have to have confidence in the disruption technology. It is a happy Hunting Ground for us. But thank you for all of that. Story that we have followed for two weeks. The us trillion authorities may have found signs of the missing malaysia and flight. Paul allen joins us on the phone from sydney. There is an investigation into debris in the ocean. Tell us what we know. So far, nothing new. There are airplanes heading into the area. Zealand one from new and a poseidon plane. There is an australian arriving there and they are looking for what the Maritime Safety authority cautiously describes as a lead. Debriss of the possible of the Malaysian Airlines was rogan by tony abbott one parliament spoke this afternoon. He told the parliament that they were checking on objects that were seen floating 2. 5 kilometers south and west of perth. He issued a word of caution. New and credible information has come to light in relation to 370. Earch for mh the australian Maritime Safety authority has received information that is based on satellite imagery and is related to the search. Analysts analysis of this, objects have been identified. \ shortly after that, the australian Maritime Safety held a conference. Objectsf the describing how do they describe the objects . They were spotted by a satellite and they are low resolution. Safety describe an object 24 meters in length. It is the sort of thing that you would expect to find floating in the ocean. These things come off cargo ships more often than you would imagine. Difficult and the object may be hard to locate. It is related to the search. To seee flying overhead if they get a higher resolution image. There are four carol planes into ships on the way airplanes and two ships on the way. When we have a better idea . They will hold another press conference later tonight in one hour. Were not expecting them to announce that they have found anything significant. It is an update. They will issue a confirmation today, tomorrow. They say the weather is good and the visibility is poor. The objects are moving around kilometers south of perth. It is difficult to imagine a of the world. Part this could be a lead or a false lead. Coming up on the program, the conveneinvestors will today. We go to the hightech summit next. Welcome back. I am francine in london. Were posted that missed analyst estimates. The Worlds Largest cell phone spending accordingly. Earnings missed estimates. Investors will get shares for each one. The ipo has made it harder to attract individual investors. Selling as much as 40 of their state of ali baba they are trying to boost ad sales. They are doing research in online advertising. Onto retail. Company shares are rising today after claiming they had a great 2013. Caroline hyde has been watching the retailer revolution. It is all about the online offering. It is amazing. Moreyearold is now profitable than spencers. They are doing a good job at eating up profits. Investors have been betting on them for five years in market capitalization and the overall value is seen as higher. Have catalogs. Thes,u knew how to get close it has retailers offering it the next day to the store. They dominated it online. They did not slash prices in the runup. The customer knows what they are getting and they are getting bigger. Wherere going into a home and looking more department storelike. It is amazing. The chief executive, financial director, sales and marketing director. If you are not furnished, you do not know. It is everyday clothing for work. It is 20 pounds for a top. Talk to me about burberry. This is the highend side of u. K. Retailers. They say that they had a good year and to about for the economy. It is clear that theyre having a good year. A creativeot have director since last year. It is an awful year for them. Thank you for the latest on u. K. Retailers. Russia claims victory over crimea. Well have more. Welcome back to on the move. Im Francine Lacqua. Now we are 30 minutes into the trading day. Acrossseeing pressure the board. Certainly, this is what the european indices are doing. Down. Otsie do the ftse down. X is ignore that move in the grain. It is at 9240 points. This is a victory for currency. Yesterday we heard from janet yellen signaling that benchmark Interest Rates could rise six months after the central bank and bond purchases. That is what is weighing on markets. It is having an impact on euro dollar. These are the Bloomberg Top headlines. Yields on twoyear treasury notes have climbed the most since 2011. This after investors seized on comments from janet yellen barring cost could start rising around six months after it stops buying bonds. In her First Press Conference as fed chair yesterday, she emphasized the fed was not altering policy by dropping the 6. 5 unemployment threshold. To ahinese stocks rose twoweek high after china says it will speed up measures to stabilize growth. It will allow Property Companies to raise money through share sales for the First Time Since 2010. Cabinet says it will speed up Construction Projects and other measures to support the economy. Australia is sending surveillance planes to check whether two objects spotted in the indian ocean along to the missing malaysian jet. That is according to tony abbott. He addressed lawmakers earlier today. New and credible information has come to light in relation to the search for Malaysian Airlines flight mh 370 in the southern indian ocean. The australian Maritime Safety authority has received information based on satellite imagery of object possibly related to the search. Following specialist analysis of the satellite imagery, two possible objects related to the search half but identified. Have been identified. Ukraine calls his troops from crimea and reinforces its eastern border and as all eyes turned to the west response. Ryan chilcote is here. What are we expecting today . It is interesting. Just as quickly as russia is moving to annex, crimea the European Union is scrambling to embrace ukraine. Remember that trade deal that ousted president yanukovych . Kicking off those violent clashes in kiev. The ukrainian Prime Minister will sign in brussels tomorrow. I caught up to him. Our protests started with the pros european slogans. Dream. Have their and this is the first step to execute the dream. The dream for a better life, dream of dignity, justice. Dream of values instead of value. So this is a very solid and historic step for my country. Nd as it isolid a stored as it may be, ukraine is financially speaking staring into the abyss. It owes 10 billion by the end of this year alone. I caught up with the eus Economic Affairs commissioner and he told me there is a recognition that they need to move more quickly with aid. Have a listen. We have actually already 600 million disburse immediately once there is an agreement between ukraine and the International Monetary fund on a new imf program. There is a mission on the ground in kiev. They are supposed to wrap up their work tomorrow. They extended their visit. Theyre working on a program, but at least for the time being, it is just a pledge. Francine . Ryan, what are we likely to see in terms of sanctions . We have been speaking to a lot of investors and it depends on how aggressive they are to see whether russia will feel the pain. Very interesting. We expect to see some kind of expansion of that lack list of russian and crimean officials subjected to asset freezes and travel bans. What we are less likely to see, and this is based on eu leaders, is fullblown economic sanctions. Saying that not only is there not the kind of unanimity needed for those sanctions, the unity we are seeing among leaders is in their desire to avoid the subject altogether. We do have the g7 meeting next week or it and i did say g7 because they have not invited russia. That will be on the sidelines of another summit in the hague. We could get some action then when it comes to economic sanctions, but for the time being, they do not look like they are in the cards. If you look at the russian stock market, that is when investors are expecting. Because if you look at monday and tuesday this week, the biggest twoday rise in four years. Climbed back half of the losses that russia incurred when Russian Forces surfaced in crimea. They are writing off the idea of full blown sanctions. What were hearing from eu officials is that investors have not gotten it wrong yet. I guess the problem is that sanctions require the agreement of all 28 countries. That consensus building. Russia can move much quicker. We know who the main stumbling blocks or what countries would be most opposed to it in terms of what we talk about eu in economic sessions . Thing. Et freezes one economic sanctions, that would be the most difficult to gather consensus from everyone. A couplethere are issues. You take Great Britain and germany. They have votes just voiced support for ratcheting up the sanctions, but they also have their respective interests they want to protect. Germany exports 50 billion worth of goods to russia every year. Their air interested in protecting that in keeping the energy they get from russia flowing to them. Of their natural gas needs. The big stumbling blocks comes in that department where yes, they may be up for sanctions, but they cannot agree on what sanctions. Even those that do think that the eu should move forward. Then you have countries like cyprus, which still relies on russia for a lot of financial investments. They are against ratcheting up sanctions. And you have several countries on the fence like romania and hungary, that just are not convinced that just because you financial pressure on the kremlin that will lead to president putin changing his foreignpolicy in ukraine. Ryan, thank you so much. On the ground in brussels. Coming up, alibaba wants to tango. The Chinese Company is making the latest big bet on messaging app markets. We have details after the break. Welcome back. I am Francine Lacqua in london. This is on the move streaming live on bloomberg. Com, your tabl et, phone and any windows phone. Forget by the jets and super yachts, the worlds wealthiest want the peace and quiet. Tom gibson takes us inside a soundproof sanctuary fit for a billionaire. As a child, the perfect escape to nature or from your parents is a treehouse. If you think theyre offlimits to adults, think again. From a fully fitted kitchen and the latest electronics to a skyhigh price tag him at this structure is anything but childish. If we were to retail this treehouse we would look at 400,000. This is pretty standard for the treehouse we build these days. A lot of them have heating and hot tubs and you name it. On display at londons show, this model is proving popular. One of its special features is how it blocks out the outside world. Noise reduction technology, from the insulation in the glass to even food blenders. The team behind its aps and quiet is an important luxury in todays hectic world. Forests treehouses sell in excess of seven figures but they did not start out like that. We were building kids toys for 25 thousand pounds. We lost most of that market and we upscaled to do high net worth. We were going for the billionaires rather and that can sometimes mean strange request. We did a job for a client who believed in fairies and insisted on separate entrances for a a fairy. Fairy furniture. Whoever orders it, blue forest will not let imagination get in the way of their design. Is coming uppulse in 15 minutes. I enjoyed by guy johnson. A billionaire. Ng if you believe in fairies, they have an entrance to your treehouse that is worth half a million. Of that is why you want to become a billionaire. I built treehouses in my youth. They were pretty good. Probably did not cause quite as much. I would pay anything for a treehouse. Some peace and quiet sometimes. We do not get that round here or at home. But we have a cracking show. A busy show. But the things coming up. We are speaking to the ceo of Alcatel Lucent. We will talk to him about his company, what is going on in the industry. He really has turned around the share price of Alcatel Lucent since he took over. A lot of costcutting underway. And we will talk about the change in the industry. Cable consolidation. What is happening with 4g, the china story. It will be a great conversation coming up. The press conference in kuala lumpur today regarding the missing flight can be interesting. We now have this ongoing story surrounding some large pieces of africa,ound between madagascar, and australia. It is a long way out, but the aircraft is on its way to take a look at this. Were hearing reports that there could be more evidence of debris well. E site as we are covering a press conference and making sure we get the latest on that story. So interesting little show. Great news makers coming up. Interesting news developing as well. We will keep on top of all of that. Thank you so much. In 11ulse coming up minutes. Here are the companies on the move. Silk ties they reported a record profit margin for 2013. Hermes sold more highmargin closing and accessories. Hermes is weathering a slowdown in luxury goods better than its peers. Beats music is signing up 1000 paying prescribers in its first month. Three weekption service was started by jimmy lemon and dr. Dre. Amazonshas become bestselling kids movie. The firm is number one in digital downloads. The dvd version was released earlier this week. Another big deal brewing at market. Leading investment in tango that values the californiabased startup worth 1 billion. The news comes a month after facebooks 19 billion deal. For more on the big bet, we are joined by mike campbell. Why is ali baba backing tango . Flavor ofng is the the month at the moment. Clearly we have facebook, whats app deal. 19 billion rather than 1 billion which is the neighborhood of tango. There is another competitor called vine which is popular in japan and china. Been rumored to be around that company. Everyone who has a stake in the internet wants to have a piece of the messaging ecosystem because that is where users are spending their time. I imagine that we will see more deals in the space. Yes, we are. Vine is an obvious one. Another one people are switching is calledatsapp telegram. We could see quite a number of investments. One of the things about messaging is the technology is not particularly sophisticated. Barriers to entry are not very high. What you are really looking for is Network Effect what ever application for what ever reason signs up a lot of users and gets users engaged. If someone does achieve liftoff in that respect, they could attract a lot of interest. Alibabatango. Facebookwhatsapp. Where does that leave yahoo . Is an interesting situation because of the relationship with alibaba. Yahoo agreed to cut their stake in ali baba. Melissa meyer problem in an opportunity. Yahoo s share prices been supported by ali baba. Looking at a valuation north of 200 billion in its ipo. However, having more cash on the Balance Sheet is an interesting opportunity for orissa meyer to go out and make acquisitions in messaging or other platforms like tumblr. What would she look at . You mentioned some of the names it is tricky for yahoo the question is what is yahoo trying to do . It is always been something of an also ran relative to google and facebook. Certainly content is what one thing that Marissa Mayer has invested it. She has hired journalist to start producing original content. Was an interesting acquisition because that is not especially sophisticated technology, but what it has is users. This is what yahoo is after because they want to be able to say to advertisers, work with us because we can deliver you the eyeballs. Matt campbell, r bloomberg deals reporter. Stay with on the move. Final thoughts coming up next. Welcome back to on the move. Is at the hightech summit in berlin which brings together top industry executives, innovative startups, and investors. Hans a standing by with the ceo of one of those startups. Over to you. With the ceo. G by the morning. You see berlin behind me. An abandoned building. It is one of the reasons why berlin is exciting. Rents are cheap. Last night we spoke with peter keele and talked about where he is investing. This morning, i am here with one of the companies he has invested in thank you for joining us. You move your firm from boston to berlin three years ago. Tell us why. Investments three years ago from benchmark. Benchmark in San Francisco. We discussed, should we move the company to San Francisco or berlin . Matt said boston is not the right place. The start up seeing and berlin is starting to be very important. There is a lot of talent here which we are using. Tell me about that product. What is Research Gate . It is a social network for scientists. It is a place where scientists for the First Time Ever can change or Exchange Knowledge or changing or uploading negative data sets which is a huge part of science experiments which are failing. You have raw data. You are bringing it all together. Then scientists go to your database and extract from there and do their own research . Yes, for example. Or you can review published articles in a very open, transparent way. It just recently happened where a hong kong scientist debunks a very famous story, Research Story from nato about stem cells. He did that on Research Gate. It is a place where scientists for the first time can discuss these things in real time. You guys are like the internet for journalists. All of the things were saying are being checked. Tell us about your latest round of investment from bill gates 35 million. Walk me through it. Several funding rounds before. Then my dream was to have bill gates as an investor. His goal is to eradicate diseases. A secreti met him in place in france, and he looked at it and he loved it and invested. Did you want to share that secret place live on air . No. The secret part which is interesting is when i entered the room and started presenting and opened my bag, i noticed in that moment that i had brought a mac. So i presented Research Gate using mac. You still got the 35 million. What is it like to present to bill gates and how long was the presentation . It took an hour and a half. At the end, he hands you a check . Not really but it was a good feeling when i left. So i knew this may happen. Did you know the amount . No. We discussed it over the couple weeks after that. You have done three rounds of funding. How many employees do you have . 120 employees. What are the next stage is . The next big event we are having is working on these open reviews. We want to create a way that scientists are discussing openly research results. Because it can help all of us if we have faster treatments for diseases etc. If we are connecting the right data to the right people. When you look at an exit, peter keele suggested some of these companies exit too soon. What is your timeframe . Exit . I do not think about exit. I think about selling the company for me personally is a failure because then you are not able to produce something very longlasting. This is something berlin is missing. Research gate could be a big success. You need one sure success. And this is something we are on track. For me, i dont know. Not an exit. But you would consider an ipo . Yes, i consider everything except the exit. Everything but the exit. Very interesting. Im going to throw it back to you, francine. So much of the conversation in berlin is why there has not been an exit. Here is someone who is not talking about an exit. He is taking control of his company. One day getting public funding on an ipo but staying in control. And win the nobel prize potentially. Small ambitions. Thank you so much. Live in berlin. Stay with bloomberg. Guy johnson and i are back with the pulse. Twitter. Ollow us on a reminder of our top stories. European stocks are down after the Federal Reserve chair janet yellen signals benchmark Interest Rates could rise six months after the central bank ends bond purchases. Then we will talk about luxury stocks. Hermes reporting an 8. 9 increase in earnings. Next doing pretty well. Crimea is the ukrainians territory. No one will recognize this socalled referendum and annexation. s Prime Minister talks toss in an exclusive interview. Were live in russell says eu leaders meet to discuss punishing russia for seizing crimea. Australia may have found something. These satellite images could be the wreckage of some of the missing malaysian jet. We will bring you the latest briefing on flight 370. And yellen moves markets. She signals rates could rise in the u. S. After the fed stops its bond buying program. Good morning to our viewers in europe and a warm welcome to those waking up in the united states. I am guy johnson. Im Francine Lacqua. This is the pulse in london. We are live with Alcatel Lucents ceo to talk about his ambitious telecoms turnaround. First, we begin with ukraine. The nation calls back its troops from crimea and reinforces his eastern border as all eyes turn to the response from the west. Eu leaders are in brussels to discuss this. Ryan chilcote is the latest. What are we expecting from the meetings today . More sanctions . Francine, itknow, is clear the European Union would like to punish russia. The question is how. They have two options. The less severe of the two is to expand that blacklist that subjects russian officials to asset freezes and travel bans. The other option is to introduce economic sanctions. Eu leaders themselves say economic sanctions, at least at this meeting at this point, however, are unlikely. There is not the kind of unanimity necessary. Not all of the countries believe they would be effective in discouraging president putin from pursuing the policy he is in ukraine. Take a look at the markets. The russian stock market, for example. You sought nose dive when Russian Forces surfaced in crimea a couple weeks ago. Monday, tuesday the pig is today gain in almost four years. That is because investors in do not think therell be economic sanctions that will hurt stocks they are putting their money into. Stock market is down a little bit today. Just a little bit less than one percent. The reason for that is because there is still some uncertainty. We heard Angela Merkel say that russia faces economic sanctions. But at the eu over the next two days that is unlikely. Next week at the g7 meeting because russia has not been invited. It will happen in the hague. We could see more forceful sanctions there. An assumption,is i think everybody is making it at the moment, that the annexation of crimea will proceed but it is not 100 a done deal. Deal, in the done sense that you have ukrainian servicemen inside crimea. These are troops that were there, that had people storming onto their bases yesterday. Russian forces, militia, protesters saying you have two choices leave crimea or defect and pleasure allegiance to russia. Seven of them, seven ukrainian servicemen, were taken hostage, including the head of the ukrainian navy. They have just been released. That is reassuring. Says it is not over yet. The Prime Minister says we have to move our forces to the east of the country, but there is a threat that russia may want to continue its military incursion into the ukrainian mainland. Have a listen. So its Crystal Clear for us that russian authorities will try to escalate the situation in the Eastern Ukraine, but we still maintain control and we still preserve this fragile stability in this region. Its almost as if they are moving goal posts on this one. They wanted to punish president putin to discourage him from annexing crimea. Now he goes forward with that. The question is how can they preempt any other moves . That is what were likely to see in the eu. Maybe at the g7 next week. Action two percent president putin from going further than he already has. Thank you so much. Ryan chilcote with the latest from brussels. Australian authorities may have found signs of the missing the middlelight in of the indian ocean. The australian Maritime Safety authority spoke about the satellite images earlier. Indistinct on the imagery. I dont profess to be an expert in assessing it, but those who are expert indicate they are credible sightings. The indication to me is of objects that are of reasonable size. And are probably awash with wat er. Right. Lets go to paul allen for more. He joins us on the phone from sydney. These pictures are very blurry. They are fairly indistinct. What exactly are we hearing about the story at the moment . Morning. So far, that is about the nub of it. These images are caught on the satellite. The images low resolution, and the Maritime Safety authority says commercial satellite with better resolution is moving into position. They are hoping to get a High Resolution image of the area as soon as they possibly can. But another thing they are doing is drift modeling because the sea is in motion. They are trying to figure out where they are going to be by the time the commercial satellite arrives. In the meantime, there are many more assets on the way. Anre is one orion, Australian Air force orion. On and theand ori u. S. Poseidon play in an emergent ship eating diverted and an Australian Naval vessel. But those ships more slowly, obviously, and they will take a few days to get there. It is important to stress, though, the Maritime Safety authority said this as well they are not raising hopes. This object may not even be related to the search. Lead,oung called it a and it is the best league we have right now. We have a, when night better idea of what these objects actually are . The sun has gone down in sydney and it will be getting dark in western australia. Plus the search area is a long way away. Perth is one of the most cities on earth. The search area is 2500 kilometers west of that. The weather down there is good, but the visibility is very poor. In terms of what we might hear something, the Maritime Safety authority said maybe today, maybe tomorrow. But it is very difficult to tell. Once again, they were sort of calling for everybody to keep calm head. There were many false leads before in the search for this missing plane, and they are conscious that this may be another false lead. Thank you so much. Paul allen talking to us from sydney. We are expecting that News Conference in 20 minutes from malaysia. We will bring that News Conference to you a little bit later on in the program. In the meantime, the Federal Reserve will present the results of the stress tests this week. Tests designed to ensure that the u. S. , the largest u. S. Banks weather the next financial crisis and will not turn that into economic disaster. Jon ferro joins us with more. The fred rattling markets the fed rattling markets. 30 large Financial Institutions in the u. S. Are expected to pass. U. S. Lying how far ahead banks are from european banks, when the ecb conducted those stress tests in europe, they will take rate is significant. No one is talking about this right now. They are talking about yesterday evening. How much do we read into the forecast rates . Two things. I think they are significant. Thedots at the end of summary of Economic Projections were the officials put where they think rates will be have moved higher. That was without revisions to growth, without upper revisions. So the read away is that this is a lot more hawkish. Official see rates of one percent by the end of 2015. 2. 25 from 2016. That is up. That is quite significant. The caveat, you dont know which dot belongs to which official. You do not know who has a vote and who has not. If it is someone at the top that the end ofy 2 by next year, they might not have a vote. It is significant because she told us a considerable amount of time after asset purchases end remains sixmonth peerages may backtrack, but people are pricing it into markets. The takeaway on the bottom line is eventually the fed has to put up rates. When are they going to do it . They want to be at one percent by the end of 2015, so they have to get moving eventually so they do not have to do it so aggressively. It is fascinating. The bank of england. The ecb mightve got a little marginal bailout last night. Especially for the ecb, because they are in trouble. Jon ferro with the latest. Lets go from the fed to tech. Executives from google to paypal are in berlin. The focus driving the Digital Transformation of europes economy. Our International Correspondent hans nichols joins us from there now. You authority spoken to some big names. Already spoken to some big names. We have gotten some big names here, but there are two overhanging questions that permeate this tech conference along with the rap. One of this is, why has there not been a big exit . Why hasnt berlin taken off . The other one is to what extent will the nsa revelations and the talk of edward snowden, what will that do to vulcanized the internet . Will c loud computing become National Cloud computing . With one for berlin, one for germany, one for france. Theked what he thought ramifications of the nsa would be. I think that people are disturbed about the intrusiveness across the board. I think, you know, i think the that,thing about it is my sense is that we are not dealing with the big brother type state. It was not like the nsa really knew everything. It probably was massively incompetent. It was this bureaucracy on autopilot that simply collected all the data in the world because it could. And in terms of the nsa revelations hurting ecommere. Ce. Thiel does not see evidence of that. So far the internet has not become balkanized. What are people saying about funding . I think we have some technical difficulties. Hes really still there. Which is rare. Rare for hans. We will get that fixed. And we will get back to berlin. We will be talking more about what he was referring to their. There. Rring to we will talk to combes about the snowden effect that is having a big impact on how the internet operates. Here is what else we are watching. There is a change at mulberry. The ceo is stepping down. The former ceo will be coming an executive chairman until a successor is found. Hermes reported a record profit for 2013. It sold more highmargin clothing than its competitors. Investment banks and fx traders using chat rooms that have the potential to rig currency prices. They told us there shouldve been controls over Bank Employees internet. Gothe essex the ethics too lax. It is easy to say with libor that that was some time ago. If you look at what is happening in forex, that is recent. We are sending a strong message to banks that this attitude has to change. s still toc come, ukraine Prime Minister is rattling the west to come to his aid against president putin. We spoke to him in an exclusive interview. That conversation coming up next. Welcome back. Lets return to the standoff over ukraine. The nations Prime Minister is warning that russia will try to escalate tensions with this country. InRyan Chilcote spoke to him an interview and asked him about his signing of an eua accord. It means a lot for the people of ukraine. Our protest started with a proeuropean slogans. E their dream, and this is the first step to execute the dream. The dream for better life, dream of dignity and justice. Dream of values instead of value. Andhis is a very solid historic step for my country. You still got a lot of troops in crimea. How are you going to get them out . How concerned are you about given the fact that we have Russian Forces and protesters storming the spaces . This ie are two parts of would say striking problem. The first one is a political or defensive one. My secretary of defense to make an urgent call to u. S. Secretary of defense, k secretary of defense, and to the minister of defense of russian federation. Jointer to establish a task force how not to escalate the situation and avoid bloodshed. And to save the life of every human being, because you are well aware, two days ago, one ukrainian soldier was shot to death. And another two were wounded. Those are under russian protection. The socalled green people. Unidentified green people with russian passports. We have a number of strategies. Save the ukrainian military. Not ready to unfold them. How concerned are you about the situation in Eastern Ukraine . Trigger toll try to clash of violence. The agents. Occupied, i would say. The entire territory of Eastern Sovereign ukraine. They collected the groups from 50 to 100 people. Wellfinanced, welltrained. How to make provocations. So it is Crystal Clear for us that russian authorities will try to move and escalate the situation in Eastern Ukraine, but we still maintain control and we still preserve this fragile stability in this region. Yesterday i issued a very comprehensive reform plan for my country. And responded to every question that eastern or southern ukraine is interested in. Starting with the language and ending with an additional sovereignty for local bodies. What is going to become of crimea now . Crimea is a ukrainian territory. Thise will recognize socalled referendum and annexation. Interesting conversation. Still maintaining the line on crimea. Officially the country has yet to be at next. It has declared itself an independent state. We have live pictures coming from the Ukrainian Parliament meeting for the First Time Since russia made that move. We have lost those pictures. We will find them. They are around here somewhere. Still to come, a bloomberg exclusive. We are live without but tell alcatels ceo. He declares that now is the time for innovation. 24 minutes past the hour. Youre watching the pulse streaming on your tablet, your phone and bloomberg. Com. It is time for todays pulse number. It is 24. That is how many hours pharrell will play videos on International Day of happiness. Happy happiness day, guy. Sunshine shes here hes teamed up with the un, and encouraged fans to send in videos. The singer compiled his favorite pics it is playing them on his site on 24 hours of happiness. Com. This is a huge is the story. A lot of cities, a lot of mayors and companies try and find that elusive happiness for their employees. If you are happy, you work more. There was an interesting piece, i read about the fact cap how you use happiness. They of people are worried badhappy because that means things will happen to you. That is a bit weird. And then we will talk about the french later. Lets get back to business. Lets talk to carolyn hyde. She is always happy. I am always happy. The markets seem less so this morning. Risk aversion the name of the game. We have stocks falling in europe. They are following asia. Moves. Significant the chinese benchmark trading in hong kong, entering a bear market, down 20 off its peak in december. Shanghai off by 1. 4 to risk aversion getting out of stocks. Why . The Federal Reserve governor does not seem to be banging that low Interest Rate drum quite as lovely. More of a hawk than we thought . Will we say Interest Rates see Interest Rates rise in the u. S. By the end of 2015 . Stimulus willthat be reined back faster and money goes out of equity and into the dollar. We are seeing money moving into the yen, the ultimate haven as well. Up 1 10 of a percent. It is coming out of the euro. A sigh of relief for mario draghi. Money also coming out of the kiwi. Caroline hyde with the latest on the markets. Up next, australia may have found something. At Prime Minister says these images could be the wreckage of flight 370. Malaysian officials are giving a briefing any minute now. We will be taking that live. You can follow us both on twitter flacqua. Welcome back to the pulse live in london. Im Francine Lacqua. Im guy johnson. A briefing on the missing malaysian jet will soon get underway in kuala lumpur. We will bring you that want to get started. Australia is sending surveillance flights to check whether two objects spotted in the indian ocean along to the plane. Prime minister is warning that russia will try to provoke tensions in eastern and southern ukraine. He spoke to was an exclusive interview. Eu leaders are gathering in brussels to discuss how to respond to russias news to annex crimea. The hang seng china indexes in a bear market. Concern is growing over the slowdown in the worlds secondlargest economy. That is pushing the yuan to a oneyear low because it lost 20 since december 2. Stay with china,. And tech. Alibaba has jumped on top of the messaging app bandwagon following the steps of Facebooks Whatsapp deal. Ali baba is leading an investment in tango. Deals coming thick and fast. Lets talk to our deals reporter matt campbell. Tango. Lets talk about tango first of all. It seems like an orange drink, but it means something else. It is a messaging app. Dozen outabout half a there that have a Critical Mass of users. What is interesting about these apps, if they are all sort of the same. There are slight differences. Indeed. Some of them are orange. But apart from the visual interface and a few extra features, they are all basically quite similar, offering some commendation of text, vooice video and photos. So many internet players feel the need to get on top of some. F these startups here these big players are nervous about some of the engagement numbers these messaging apps can show. The amount of time people spend in them. They won a piece of that. They want to be an on the ground floor rather than making their own competitors. They do so much. We are going to go to that Malaysian Press conference we are expecting, as we are getting some news. We got some news overnight out. Lets listen in. The australian maritime continueshority coordinating the search for the missing Malaysian Airline within australias searchandrescue area. Assistance from the Australian Defense force, the air force, and the u. S. Navy. The rescue Ordination Center has received satellite imagery of objects possibly related to the search for mh370. Our cc rcc australia received an assessment of the imagery. The images were captured by satellite. They may not be related to the aircraft. The assessment of these images was provided by the Australian Intelligence Organization as a possible indication of debris. As a result of this information, four aircraft have been redirected to the area 2500 kilometers southwest of perth. An orion aircraft arrived in the area at 10 50 a. M. Another three aircraft have been cast to the tasked to the area, including an orion, new Zealand Orion, and a u. S. Navy poseidon. Poseidon is expected to arrive this afternoon. The orion was expected to depart base in perth midafternoon. The new new Zealand Orion was due to depart this afternoon. 130 aircraft has been cast by tasked to drop data drifts to assist in modeling. They would provide a reference point. Ship responded to a shipping broadcast issued monday. It was expected to arrive in the area this afternoon. The Royal Australian navy ship hms success is some days away. The ship is wellequipped to recover any objects proven to be freoom mh370. Tory effort is being made locate the images in the satellite imagery. It must be stressed that these sightings, while credible, are still to be proven. The search is a multinational effort. I will now give you an update on the ss deployed. Assets deployed. Defense forcehe has spoken to its counterparts in australia, china, indonesia, ives, thailand, u. K. , it and the usa. All were very supportive. Focus of the search has moved from the South China Sea to the northern and southern quarters, our International Partners have continued to provide whatever support they can. A number of assets have been deployed. And currently, there are 18 ships, 29 aircraft, and six ship borne helicopters deployed along the northern and southern corridors as follows. Aircraft , four two for malaysia, two from japan, and one from the u. S. In the south, 25 aircraft. From am malaysia, five straight, three from china, for from indonesia, two from india, for from japan, one from new zealand, two from south korea, one from the uae, and one from the us. All 18 ships are in the seven corridor. This deployment includes six helicopters, three from malaysia and three from china. Untile located mh370 we have located mhy370 searchandrescue will continue. The uks planning to send one ship to the seven corridor. In ther of countries northern core door are carrying out search and rescue operations within their own territories. China is using every means possible including 21 satellites to search the area within its borders and is ready to send more aircraft whenever needed. In cambodia, four helicopters are conducting search efforts. The laos aircraft is caring out search and rescue operations. The Thai Military are conducting Search Operations in the northern part of thailand. And the unum are conducting Search Operations within their merritory using and vietna are conducting Search Operations within their territory. Together this is a Significant International force deployment and i am thankful for the cooperation as we continue to focus on finding mh370. Imilies, the High Level Team announced yesterday is leaving for beijing this evening. I would also like to confirm that representatives from me government spoke to the familys present yesterday. In addition, the Prime Minister and theenvoy to china Chinese Investor to malaysia will lead a briefing today for the chinese families here in kuala lumpur. Also in attendance will be the department of civil aviation, the armed forces, the ministry of foreign affairs. And a similar briefing will also be held for the families. Ladies and gentlemen, for the families around the world, the one pice oece information they t most is information we just do not have the location of mh370. Our primary focus has always been to find the aircraft. With every passing day, our efforts have intensified. Yesterday i said we wanted to reduce the area of the search. We now have a credible lead. But it means much work is to be done to deploy these assets. And this will continue overnight. Thank you. Ok, you have a listening to the briefing coming out of kuala lumpur related to flight mh370. The reefing revealing the sight ings we have had by the australians are credible but still to be confirmed. One of the most telling things is he says, of course, there are a lot of deployed aircraft traveling to there, but tille they are s searching the other two corridors. We will be waiting for the arrival of the orions and poseidon aircraft. And we hopefully will get some news as it is moving into nighttime in that part of the world. We will get more data fairly shortly. We will take a short rate. Back in a couple minutes. Welcome back. Youre watching the pulse. News breaking relating to the missing galatian aircraft. Theu. S. Poseidon aircraft, social rescue aircraft, a 737 aircraft has returned to perth spotting no objects. Seen in the satellite images. Returnedposeidon has to base, and it was unable to arete the images you looking at at the moment. So the objects youre looking at the moment in the satellite imagery. We will keep on top of this news and bring you any breaking news or developments as soon as we get them. Lets talk tech. Rings together top investors and startups to support innovation in europe. The listntinues to top as one of the most innovative companies. Lets rejoin our International Correspondent hans nichols. In berlin. Summits aree tech always a mix of Old Companies and the new ones that want to get noticed. Joining me now is someone for one of the Old Established companies. Theyre not that old. The principle of new products at google. Tell me what you see in the berlin tech scene and what you see exciting here. I think it is great to be here. I think berlin has really developed into one of the hubs in europe if not one of the hubs. It is trying to keep up with the silicon valley. Weve seen a lot of startups created. Some buyouts. It is exciting for us to be here and look at the scene. We have not seen a big buyout. Why not . There are probably a number of reasons for european startups not to be as bifg. I think europe needs a lot of more substance to the start up seeing. It starts with simple things such as education. If you look at the way kids are taught at school, they probably no more than their teachers. You need to start thinking about teaching the teachers about the digital ecosystem. This you mean taxes are too high. High, and it is too difficult for companies to start a company. It is too difficult in europe to hire and let go of people. Quues k about visa estions and letting go of employees with situations are changing. New Companies Need to be able to fire employees more quickly . Able, as a to be company, you need to be able to found a Company Quickly and hire great talent from different nations such as you do in the teasxs, and you need to adapt your business operation. How far behind you think berlin is from the london . I do not think it is a question of being behind. Its great to see that we have companies in europe that we have a great start scene. And i think it is really sad to berlin hast to say done a great job to gain the recognition of Venture Capital companies. Weve seen a number of Venture Capital companies from all over the place join the start up scene, opening offices here. Those are great signals. Last night we heard criticism complains that the first round of money can come from german funders, but the second and third round usually does not come from german vcs. Why is that . Another reason to grow the ecosystem in your, not only in germany but in europe. We need to make sure there is a counterbalance. There is not only tel aviv and silicon valley. We need europe to be strong. So new products, google. What can you tell us . What she we be expecting from google . I am not responsible for all the products but what i can say is we are investing in a lot of different areas. The mobile space is increasingly valuable. That is no secret. Things areese growing together. If you think our products at where you can get suggestions while you go somewhere. The search that is performed before you think about a search. A very useful service that give you information in the moment when you need it. Trend in wearable devices. We Just Announced the android wearables. We invite the developing scene to start working with us and our platform to join us in creating more technology that improves interaction. Hine when you go back to california, are you allowed access into the x lab . For some of the projects, yes, i am, but there are some projects that are worked on and to be announced them. Did you confirm the existence of an x lab . We have a google x department. That is not a secret. There are a number of projects that are not announced yet. We look forward to more projects being announced. Whats security like getting into the x lab . It is just like any other company. Badges. A light becomes green or red. Badgesnot everyones work for google x. I cannot say any operational details of our security measures, break can tell me how to in to google x. I am happy to have coffee with you afterwards a give you details. What is the most exciting thing you have seen at this conference in berlin . So far, repairing for some things. I had a couple of great talks an interesting start up in the medical space. That is something where old economies can gain a lot of additional input from digital technology. If you are able to perform medical examinations over rthe internet, that is great because that can get more efficient and it is great for patients because they cant, they do not have to schedule an appointment. They can send in kindes not work for every of medical difficulty. I found it interesting. And it proves that the internet is now in every single industry. It is not only the hightech industry. It can come to old industries, to virtually every single subset you can imagine. Goal is toe your have google be part of the new industry and those new growth models. We are a commercial company so we do enjoy growth. So yes, we are looking into new areas. To talk tohere people and to understand what the ecosystem is like and hopefully inspire some of the people. Inspiring thoughts. No keys to inside the google secret of x lab. We will have to have a plan b for our mission. Francine, guy . He promised you a coffee. To get to the bottom of that story. In berlin with the latest. We have further breaking news from the missing relation airplane. The tweets are coming out at the moment. Yal Australian Air force, the smaller aircraft, they are reporting that the crew was unable to locate the debris that has been on the satellite imagery we have been showing a. Clouds and rain limited visibility. Continueircraft will to search the area looking for the object. P. A. Poseidon aircraft returning to base with nothing found. It is not return to perth. At the moent, it is too early to say whether it was nothing there. Thisll keep an eye on developing story and bring you breaking news. Back in a couple minutes. Now, for a look at what were watching for the rest of the day, we are joined by Caroline Hyde in the studio. And Ryan Chilcote in brussels. Lets kick it off with you, caroline. New developments in the search or do we . A lead is all we have to go on, but we understand the australian Maritime Safety organizations said they located debris up to 24 meters long. Are they part of flight 370 . We had a tweet coming from the Maritime Safety authority of australia saying so far of the planes, the raf p3 crew have not been able to find it. The visibility is that. Needle in a haystack. Look at the distance. You could get any more bleak and an isolatedwn in area, but it is something to go on. They have two ships and four planes scouring that area. But we heard from the News Conference that in general, we have 80 ships, 29 aircraft doing their utmost to work out if this is a lead. We should find out at some point today. Ryan, lets talk to. We are awaiting eu leaders meeting in brussels discussing the further response to russias crimea actions. Thats right. Im on sanctions watch. Dinner ends at 10 00 p. M. It is likely we will learn what kind of sanctions they have in mind, if any, against russia. That is what they discuss. Is it going to be an expansion of the blacklist they have for russian officials, or will they go the full monty with economic sanctions . Dont forget. It is a twoday summit. If they want, they can move this not only into the wee hours of tomorrow, but they could go into friday. Back to you. Ryan, thank you so much. Ryan chilcote with the latest from the eu leaders in brussels. We have an exclusive interview coming up with the Alcatel Lucent ceo. Michel combes. About the amazing acceleration of the Alcatel Lucent share price over 12 months. We will talk to him more broadly. Hans nichols is at tech conference in berlin. He is talking about innovation. We have got the security story to talk about. Lust, some amazing valuations put on tech companies. All of that part of the conversation we will have. For those listening on bloomberg radio, first word is up next. Surveillance is coming up next in new york. In europe, we will talk exclusively to tell lucent. This is bloomberg surveillance. Australia leads the search for debris. It is the best leave we have now. Lead we have now. Planes come back without finding debris. The fed shifts. Will we see raising rates . David takes on to goliaths. Google takes on apple. Good morning. Were live from new york. It is thursday, march 20. I am tom keene, joined by scarlet fu and olivia sterns. I start overnight in asia. China says they will be for Construction Projects to support Economic Growth after a slowdown in industrial production. The council made that in a Statement Last night. Economics it. S. , is coming out at 830. Jobless claims are expected to show a slight uptick. The Business Outlook is at 10 00. And speaking of housing, it will show a late decrease