It is 9 00, good morning. We are live from bloombergs European Headquarters in london. Man versus machine, hands net nichols gets behind the wheel to see if he can beat one of the fastest self driving cars out there. It is a great package. Look at that mans face. Calm, collected, cool. We get a taste of the worlds most expensive burger. The price is eye watering. To our top story. Shire shares tumbling today. Abbvie thinking about scrapping its acquisition of the company after the u. S. Announced changes to tax regulations which would make this deal less attractive. Matt campbell joins us now. This feels like a big casualty of the crackdown. The company said it was not just about tax. Everyones statements are being tested. Abbvie did say, this is a Strategic Acquisition for them. Tax and the ability to redomicile was always a huge part of this. There was a bit of a question mark from the new rules. The new rules were not all that severe. There was an expectation in the market that this deal would go ahead. We are seeing this rude awakening in the shares this morning. Very ugly to be a hedge fund. Some very big names. We do not know when they got in. We do not know if they are nursing a loss at all. Farmer sector, which was so on fire in the summer, is this pouring cold water on the a that him in a deals mergers and acquisitions deals . Astrazeneca did not get done. Huge question mark. What we have seen we have seen a lot of announcements and pharma in pharma. If youre looking to see these deals get done, i cannot imagine todays news is very encouraging. Matt campbell, are deals reporter, talking about what is happening. Lets talk about another deal. Qualcomm, was that out of left field . Apple more likely a bitter. Dder. A bi csr was talking about a merger with microchip. Thiswill be buying barring any great surprise. It seems it is going to qualcomm. This is the internet of things. No one in the chip space wants to miss the next evolution. People did not see this coming. What is coming now, connected cars, connected appliances, connected homes. Another big name in cambridge. Prelude to another round of rumors . There a little bit different than most other Semi Conductor companies. They do not manufacture themselves. They are more of a designer. The whole point is that it is neutral. They are very happy to sell their designs to apple devices, android devices. As a strategic player like apple or samsung were to buy them, you lose the ability to cross sell two different players to different buyers. They do design very effective; doctors. Doctors e; semiconductors. Were watching the Norwegian Oil company. Lets get the details. Ryan chilcote plummeting oil prices. Brent is down more than two dollars in just an hour. Really dramatic. More bad news for statoil investors. They were already disappointed about the departure of their ceo. The head of marketing is now the active ceo and they are looking for a new ceo. Exactly 10 years is what he spent at the company, doubling production and changing the focus for just norway to a Real International profile. In 2011 big bet back with the acquisition of an oil company, very prominent in the shale gas space. He is going to be missed. Bg shareholders happening to see him. 3 shares went up more than on the back of that news. If you look at the oil price, how brent has come down, the share price for statoil, it has it is down about 12 or 13 over the last month. Athas been a bit ugly statoil. He has been firing people and cutting costs. They be he saw this as a good time to go. It is very welcomed news for bg because they have spent the better part of five months looking for a new ceo. Thisll be their third ceo in just two years. The broader picture is very interesting. We see oil continue to fall again this morning. People questioning were Different Oil companies, marginal costs lie. Peoplealking about are wondering where the line is. The oil industry has to be feeling pretty nervous. More and more, we are hearing talk that 80 maybe the floor. This is just speculation. It has been in the last several years as low as 46. Further ult much it could fall much further. A lot of people out there do not opect Production Cut from when they meet at the end of november. The answer could that the answer to that is only the United States. The breakeven price is 80. I am talking about brent. 80 or below, you would expect some u. S. Producers to cut production and wait it out. That would lead to less oil on the market. It will lead to a higher will price. That is just speculation. We are witnessing this huge retreat in the price of oil. Thank you very much indeed. We will be talking about the Airline Sector, a beneficiary of all this. The chinese premier is speaking at the headquarters of the food and agriculture organization. Yesterday, he met with a print minister of italy. With the Prime Minister of italy. Really trying to inspire investor interest from china. It seems to be working. Is everybody happy . They are pretty happy with this. Italy needs Foreign Investments and is a good matchup with china. All kinds of different interests at play. There were deals about 8 billion euros signed. They signed with italys Biggest Energy company. They have arty had some deals they have already had some deals with china. It is something very positive. The main problem is more of fear of chinese buying out Small Businesses in italy. Bringing that in a little bit, big names attracting attention. Are we seeing Small Companies being snatched up as well . There could be some great family names out there that are being snapped up. I think that is the major fear. The Large Companies are happy to have an extra investor. The italians are not afraid of the chinese. A lot of Foreign Investors fear red tape. Chinese certainly dont. The problem, the family businesses. Because the chinese have a lot of cash. That is the fear italians have about anybody coming in and taking their family jewels. Thank you very much. Aboutl be talking more the trip a little later on with the president of the italian trade agency. We will put some of those fears to him. Investor confidence dropping in germany. We will discuss recession concerns. Welcome back. You are watching the pulse. The pressure is mounting on Angela Merkel. Yesterday, we saw the federal government putting growth forecast significantly. Is germany headed for a recession . Lets gorankfurt to frankfurt. Do you agree . Good morning. At this stage, recession fears are probably not fully justified. Germany the German Economy has lost a lot of momentum this year. Production turned out very weak. We think the economy may still eke out positive growth figures for q3. I have read a lot of editorials saying this is the turning point. This is the moment Angela Merkel concedes that it needs to be spending more, that it needs to be the demand driver. Im pretty surprised by the editorials. The message im hearing from berlin is the exact opposite. If you look into the source of the slow down, external demand has weakened. We saw softer Global Demand from china and the u. S. Up ais going to pick little bit, especially from the u. S. And china. Russia,is in geopolitical risks, it is impacted the investment climate. Softer. Nt has been much when he to take into account that at the beginning of the year, there was pentup demand accumulated over the past few years. We were expecting some slow down, but it came stronger. Now there is a call for the government to do something about investment. The government is pushing back. Expect that if things we can a bit further, aken a bitry we further. It takes time. Very few shovel ready products that can be implemented immediately. I would not expect too big of figures on this. Even if the germans do spend mark, how much of that with the gout into extra demand do spend more, how much of that would leak out into extra demand . It depends on what germans spend more money on. Infrastructure investment spending, relatively small. Tax cuts the race the purchasing power of consumers would have a bigger effect. Last time we had a battle between the bundesbank and the sided with merkel h mario draghi. Will she be so willing to commit to his next move . Buying government bonds . She has been very reluctant to comment on Monetary Policy other than saying the ecb has its mandate and they should have as much discretion as possible to fulfill the mandate. Yesterday, we had the hearing about omt and there was a lot your from the government. Government. Om the it is up to the ecb more or less how they manage to implement Monetary Policy. Further clarification on what remains would be useful. Chancellor merkel is very unlikely [inaudible] thank you very much. Senior european economist at barclays. Lets go to hans nichols in berlin. This is the first time the strike hits commuters during peak hours. A 14 hour strike and it starts at 2 00 local. Crucial rushhour times. This is a standoff between unions look at the number of employees and they have gone down precipitously in the last 10 years. That has required the workers to do more. Yes, they one of 5 increase in pay. A twohey want to work hours reduction. Ine a maximum of five shifts 120 hours. 350,000 to 190,000 in about 10 years. The Economic Impact of all of this . The best numbers we have are from 2007. Included somealso lines in france as well. One thing to look for, look to see if any of the auto plants cancel any shifts because they cannot get any parts. That happened in 2007. Great work. European Airline Stocks really rallying today. Jet fuel is a big component of their cost base. A few days back, they were being hit by ebola fears. Back. Come we are alive on bloomberg television, as you can probably tell. We are also on bloomberg. Com. We are very much on the markets this morning. In the whole of the eurozone. Losses are on the ftse in london, down by over 1 . Correction territory. Get over here so i can tell you the story. The two biggest movers lower, astrazeneca and shire. Astrazeneca down 3. 5 . Hire down by more than 25 . Reconsidering . They told us in july that tax reasons for not the primary rationale. I say you can pretty much forget that. Look at these moves year to date. We are still higher on the year. A quarter of the value gone from this company in a day. Back down to 38 pounds. That. A big move in this market. Is this the end of the tax and version . Tax inversion . One currency to talk about it it is sterling, down 4 . In andyment data coming four minutes time. Question, with inflation at a fiveyear low, winner wages going to start above it . We will talk about that when we come back. The data about to drop. He expected number is 6. 1 the risk is to the downside. This is not any old big mac. Burger. 0 everything is expensive in this burger. Does it taste good . Good morning. Welcome back. The june august Unemployment Rate has fallen to 6 . 6. 1. Stimate was the risk was always to the downside on that number. We continue to see inflation coming down. Sterling, a big move yesterday. Always toe risk was the downside on the 6. 1. Latest estimate saying 6. 1, but. He surprises . Any surprises . For the hawks, they will be clinging on to any good news. They are fighting a massive had headwind ofation inflation pressures. You would not of expected a pick up in wages this time round . If youre going to get a pay raise, it comes in the first month of the calendar year. Sayingonest, one survey wages should pick up. It is not well established. All the other indicators, not a lot of pressure, lot of people working parttime that would rather work fulltime. You could see a real disappointment on wages. It is going to stay like that for a while. I would not be surprised next k if we get the minutes carney wouldve had yesterdays inflation number. He wouldve shared that with the committee the last weeks meeting. Inflation has been consistently lower. I would not be surprised to see the dissenters fallback into line. Look the market has been pricing out rate hikes. Where do you think the first hike comes . Hike, if that, by the end of next year. It is probably overshot a little bit. If you look at the bank of projections, oil prices the pound is weaker. The fact that there is no hike, that will add a little bit to their profile. Think inflation is going to go . Where are we at the end of this year . It takes a while for oil to be factored in. By december, more than anything, last december, utility bills rose by close to 10 . The base effect is working against us. Whole quarter percentage point. We will be below 1 . How much credibility does the bank have . They have a decent amount of credibility. We have decent growth. There is a real squeeze in disposable income. The spread between the top and bottom is big. Than one is aess big move in a short space of time. It has done well to push back on expectations. It was a bit ahead of itself, but so is everyone else. They do not have crystal balls anymore than the rest of us. What is the communication strategy now . They need to abandon any time contingency. That was the real mistake with Forward Guidance when it came in. Concept. Zzy it was on the hook before guidance and it was a fuzzy inbetween. We should be looking at rate hikes. If there is no wage inflation, we will kill off this recovery. Until we see wage inflation, we are not in any hurry. Thank you for the analysis lets talk about an area where we are seeing inflation. If you have an appetite for the finer things in life, you might the most expensive hamburger. Chef behind the glam burger. It is the ultimate and opulence. I am executive chef of the honkytonk restaurant group. The ingredients are exceedingly expensive and they taste delicious. Kobe beef from japan, new zealand venison, black truffle, caviar, white truffles, goldleaf. It is what every burger should be, but no one can afford it. They gave me a budget for the ingredients, which are readily spent. Wherein chelsea. We are in chelsea. Had people contact me on twitter and facebook. Understand the criticism. It is all about having a creative input to do something you would never normally do. 2618 calories. Try putting that one through expenses. We are back down to where we were before the number came out. Bad news for Oil Companies is good news for air companies. Airline stocks are rallying. Good morning. Second Health Care Worker testing positive for ebola in texas. As soon as we get details, we will bring them to you. This is something the Airline Sector will be paying a great deal of attention to. Interesting times for the Airline Sector. On the one hand, you have the ebola story. The other hand, look at the price of brent. Distillate, the jet fuel price which has been down aggressively. Airline stocks around europe rallying pretty hard. I got hit by ebola. They are up on the jet fuel story. You. Morning to lets talk about ebola. We saw the effect on the Airline Sector. It got hit and hit hard. Unlikely. Retty sars occurred in asia. This is like singapore, hong kong. We are talking about relatively small markets with much smaller traffic flows. It is lots more isolated. These are not global hubs. A much more controllable risk at this moment. You generate surprising amounts of demand. Move capacity around . They do move aircraft every day. The configuration of the aircraft changes. British airways flies to freetown. Aircraft. Bout 1. 5 that into the fleet, trying to reallocated, engineering requirements. A few aircraft is not a big issue. They will be able to absorb that. They may lose a few pounds. Compared and contrasted at with what they are making with jet fuel coming down. Ebola is a crisis. Oil prices down at their lowest point for five or 10 years. It is great. We are heading into the winter season. I dont anticipate we will see huge amount of special offers and discounted airfares. Unlikely thaty fares will follow. Airlines have hedged aggressively. A drop on a monday does not have an immediate effect. Blended balance of hedging and direct fuel price. There will be a lot of procurement purchasing people looking to hedge forward as possibly they can. Around the to turn i wonder whether the mix is slightly more skewed. It will benefit the shorter haul carriers. That is important. Getting four rotations ivan aircraft a day out of an aircraft the day, the market loves it. Does it mean some of the other carriers are expected to suffer this winter . I was talking to the boss of aer lingus. He is expecting it to be really bad this winter. You cannot change the fundamentals of business. There will be some risk and casualties in the winter. There is every winter. Suspect people like ryanair, easyjet, aer lingus will enjoy a pretty good winter comparative to previous years. These guys have complicated algorithms to help them with their hedging. Are they going to be jumping on this opportunity . No doubt, there will be a lot of people looking at this very closely. My now buying six months forward or 12 months . The effect in terms of the bottom line will be there quite a while. Fort will be factored in the next six or seven months quite comfortably. How about the asian carriers . What is the difference in the conversation . Does it take the emphasis ofan aircraft has a lifespan 15 or 20 years. You want to be getting the best equipment in the sky. 21 feels producing a cost savings for united airlines. It makes absolute sense for these carriers to be investing in new technology. The double positive. Winwin. Uld be a joining us from oag. The brightest young minds filled with entrepreneurial spirit. We will preview the event. We will get one of the delegates to come and talk to us. Welcome back. You are watching the pulse. We are live on bloomberg television. It looks like were getting some ebs news. Do have a replacement details on that will make him back. I want to talk about details on that when we come back. We are joined by the head of private equity. Good morning to you. Interest rates are on the floor. If you look at the yield curves around europe, they are on the floor. You are talking about money flowing out of the gulf into europe, targeting renewables. What kind of advantage are you getting by investing in this space . I think it is very simple. Agreement by european sovereign that gives you cash flows. You are not taking any construction risks. You can generate dividends about five or 6 . It is effectively a quasikind of bond because of that link to the government. Some operational risk. How much are we talking about . This deal, we have acquired 41 of a portfolio and france. In france. 4 Million Euros of our own money. There is more to come . I think so. With this low Interest Rate environment, needing to sell assets and refinance their balance sheets, it will be a lot of opportunities in europe. This is the start of more to come. Are there opportunities in the region . A lot of opportunities specifically in renewables in countries like egypt. Development e Operational Assets with existing yield. Different dynamics. Is there a capital gain element to the said well as well . Slightly, but not much. Thatis is a cause i bond im investing qualify bond. Where is the best place to go hunting for this stuff . Europe has a strong base of her nobles across renewables across the various countries. U. K. , france, italy, scandinavia, poland. America is a big country with a lot of competition opportunity as well, but very competitive. The competition is how strong . Suspects for these opportunities are the canadian , the larged infrastructure funds. A lot of interest to get leaner money. When we opened up the door nice to see you. I want to take you back to the breaking news out of france. The energy sector, a change of leadership. Yes. , its just been confirmed has been a huge political battle in france to replace them as the head of the french utility company, the worlds leader of nuclear reactors. He was nominated back in 2009 by the former president Nicolas Sarkozy. In 2012, he was openly supporting Nicolas Sarkozy francoisresident hollande. He was a simple of the former president. Should a symbol of the former president. He was a symbol of the former president. We had discussions about the former chairwoman. They were among the candidates. A very important time for edg. Edf. Thank you very much. Breaking news out of paris. We will take a break. For those listening on the radio, first word is up next. For our viewers, the second hour of the pulse. Sure shares f, tumbling on the news. We have breaking news within the last few minutes. Evy is going to replace at e. T. F. , a big political story in france this morning. And italy on the auction block. The Prime Minister strikes eight billion euros in deals with chinas premier has been speaking in italy this morning. Well talk about that story in a few minutes time. Good morning to our viewers in europe. Good evening to those in asia. A very warm welcome to those of you just waking up in the United States. Its a busy morning. This is the pulse. Were live from london. What else have we got coming up for you . Man versus machine. Hans nichols tries to beat one of the worlds fastest selfdriving cars. Check out the look on his face. Its worth watching. Lets go to our top story first of all. That is what is happening in the farmer sector. This morning we have seen sure shares tumbling as abbey says it will reconsider its bid for the u. K. Pharmaceutical stock. Lets talk to matt campbell, our deals reporter, about what is happening here. Big drop in sure stock this morning. Basically were roundtrip to where we were when abbvie indicated its interest. Was this just a tax deal . You have to ask that question at this point. There are clear strategic reasons to buy sure for abbvie. Theyre basically a one drug company. Humira is their one therapy for respiratory illnesses and other issues. Buying share gave them a pipeline to diversify, but it also gave them the opportunity to redomicile in the u. S. And put some of their cash balance to work. This is something that they have been trying to do, but if that is impossible because of these new Treasury Department rules, the deal becomes less attractive. Not necessarily impossible or out of the question, but less attractive. Something investors are asking this morning is does this mean the deal dies . Does this mean theres an attempt to renegotiate it in some way . The farmer sector was on fire earlier on as a result of the story almost on a daily basis. Astrazeneca stock down again this morning in line not in line, but kind of in tandem with what is happening here. Does this remove that story, do you think, from the pharmaceutical sector . Other deals are still going through. Some of the air is coming out, but clearly there are lots of things being announced in the pharma sector. What we are not seeing go through are the real transactions. Astrazeneca never happened. It looked like sureabbvie is in serious trouble at the very best, its in serious trouble. Medtronic, we still dont know whether that gets done. And allergan, another deal thats not been resolved. So these enormous mega deals in the pharma space are actually proving very, very difficult to pull off, and it will have to see whether anyone can, in fact, get one done. Lets talk tech. Qualcomm making a bid for a radio, c. S. R. Its not a massive deal, its a pretty big deesm a surprise, though. I think everybody has been caught by this one. A bit of a surprise to see qualcomm come in, absolutely. We were not expecting that. There were negotiations between c. S. R. And microchip, which is nother u. S. Company. Qualcomm came in with a big price, blowing everyone out of the water. This is all about where the Semiconductor Space is going. Weve actually seen a few deals. Infineon made a recently sizable acquisition in the u. S. Several weeks ago. Everyone wants to catch the next big wave in semiconductors. The consensus is that that is the socalled internet of things, which is a somewhat horrible expression, but basically it means that everything is going to be wired, everything will be hooked up to a mobile network, cars, appliances, buildings. Thats a lot of chips potentially. And blue tooth and advanced Blue Tooth Technology could be a part of that. Exactly. So this is really the sweet spot for c. S. R. , and qualcomm wants to make sure this have a good view on that. Theres one company that has an awful lot to say about things, and another company that is also based in cambridge. Theyre the same company. As you pointed out to me earlier, this is the perennial m a story, but nevertheless, if the story is the next big thing, and thats driving m a, weve got to talk about us. We do have to talk about arm, and theyre one of the perennial rumors. There was a period where it came up like clock work every friday afternoon, but look, theres a reason that companies become perennial m a rumors. Arm is very admired in the Semiconductor Space. That said, its expensive, and it has a Business Model that actually relies arguably on being independent, on being able to sell its chip design to anyone who wants them. If you buy arm, perhaps youre no lorninge able to do that. Any inquirer, whether it be apple, intel, samsung, someone else, thooze think very hard about whether its worth it. You lose some of the business, but do you gain a competitive advantage . I guess thats the question. Thanks very much indeed. Were also watching the Norwegian Oil company, whos left to lead the u. K. Company. Meanwhile, theyre feeling the pressure. Lets get details on what we know this morning. Ryan jones us. Well, a bad news for stat oil. Shares at stat oil fell, of course, they would also be following on the news of the plummeting oil price. We went from 85 to 83. But certainly he knows his timing. If you look at the share price last month, brant oil price, this is not a bad time to leave. Hes had a great 10 years there, during which he nearly doubled production. And really turn this into an International Oil company. What was a statbacked Norwegian Oil company, focused in norway and on the north sea, really all over the place right now, including in brazil and in he United States, and in shale gas. Great news for b. G. Their shares are up. Theyve spent last five months looking for a new c. E. O. This is their third c. E. O. In two years. Perhaps some stability on the horizon. He takes over in march, and he of the t the disposal norwegians up until then, though, they do have a new acting c. E. O. , the old head of marketing, whos been with the company for 34 years. Guy . Lets talk about the oil price. People are trying to run the numbers on where we are relative to the marginal cost. Were getting pretty close. Yeah, so a lot of people talk about the break even price in the United States for tight oil being around 80. Some people think that makes that a floor, because when the price of brent gets to 80, some of the producers in the United States would cease to produce, and that would take some supply off the market, and that would raise the price of oil. Thats all theoretical, though. Thats not what weve been seeing for the last several moss. Remember, oil was at about 116 no one thought it was going to go below 100 or 90 or from 85 to 83 in the first couple of hours of today. Ryan, thank you very much indeed. Ryan chilcote covering all the news from the energy sector. Lets recap the breaking news weve had in the last hour. A second Healthcare Worker has tested positive for ebola in texas. The worker was one of the people who took care of thomas eric duncan, who passed away from the virus. The worker reported a fever yesterday and is now isolated at a texas hospital. Lets take you to italy now. The chinese premier has been speaking this morning in rome. Yesterday he met with italys Prime Minister. They signed eight billion euros in deals. Lets go to our italian bureau chief on this story. Renzi trying to drive investor interest. Hes trying to get people investing in his country. China seems pretty interested. They do indeed. In fact, weve seen in recent months, the bank of china buying equity stakes of about 2 in some of italys biggest companies. The Oil Companies, italys biggest utility, telecom italia, and then we saw these deals reached yesterday signed otaling eight billion euros. The big Defense Company signed a contract for the sale of 50 of their helicopters. So, yeah, theyre drumming up support for the blue chips, and then underneath all this stuff you have italys small and mediumsize companies attracting interest from chinese investors as well. In terms of the names that are attracting attention, the big names we know about, the small names are interesting, though. Let me have a followup to that. Its a concern that its a Small Company that is being bought up, and that may be not such a good thing. Well, scombre no. The fact is that, as you know, italy is mired in yet another recession. And a lot of the small and mediumsized companies, were talking about mom and pop stores, bars here in downtown milan, just cant deal with the crisis, tax payments coming due. They cant get credit. So theyre looking for buyers. There already are chinese residents that have been living in the country for several years, and this is an opportunity for them and for the early, its a chance to get out from underneath from whatever. They have a license to run a bar or store in a big city. Are we going to see more and more of this . Is this something were going to expect . The chinese have been buying in italy for quite some time. We see them buying yacht makers, etc. , etc. Is this going to become a normal part and parcel that the chinese are going to be spending a lot of cash in italy . I would think so. The reserves are apparently quite high, and the fact is the Italian Economy probably is not going to recover for several onths. It was from property to retile luxury goods, for example. Weve seen a top label being snapped up by chinese investors, so i think the trend will continue for months to come. Dad, thank you very much indeed. Thats our italian bureau chief, talking about the interest the chinese have in the country. Coming up, our next guest says italy needs to revive Consumer Spending to get back on track. Will the italians help with that . The president of the italian trade Growth Agency is going to join us. Good morning. Welcome bask youre watching the pulse live from bloombergs European Headquarters in london. Lets look at some of the moves, particularly with whats happening in the currency markets. Lets start off dealing with whats been happening in the pound. You can see the little spike that we had coming through earlier on. That was when the data came through on unemployment. That came through at 6 . You would have thought that would encourage the hawks a little bit, maybe push the line hat we need. Didnt take long to unwind that one. We did see a pickup in wages as well, which will be welcome there as a story, too. But nevertheless, you see whats happening with oil. You see whats happening with the inflation numbers. Youve got to assume that that rate hike is being pushed further and further away from the u. K. Similar story over in the United States as well. Let me show you the w. T. I. Contract for crude. ve been into the mid 80s this morning. Another big leg lower for the price of crude this morning, and were getting to some very squeaky levels. Ive heard 75, 80, some of the other shale oil pruckeds we see in the states. Were not there yet, but were getting very, very close. Watch this space. You may see the 80 line being taken out. Lets get our attention back to italy. Unemployment over 12 , and its one of the biggest debt loads that there is in the world. Certainly in europe. There are bright spots. There are many bright spots, some would say, and its the chinese that are looking for those. The two nations signing more than eight billions worth of euros yesterday. The chinese premier is touring the country. Joining me to talk about italy up for sale is the president of the trade promotion agency. Should italy be welcoming the chinese . Is this just what italy needs for a vote of confidence in the country . Well, i do believe so. We are seeing increasing interest also from a large u. S. Or british fund. But the chinese, they have a different angle. They can open up the chinese market, which is the biggest market in almost every consumption area, so if we attract capital, that in turns open up the market of china for these companies, we will have a big boost in exporting the first few moss of the year. We had 11 increasing export of italy. So i think we should be welcome in china. In general, we should be very welcoming. Is there a concern that some of the Smaller Companies that are being bought up are really forced sellers, that given the economic cycle, given the economic problems that italy ces right now, effectively its a fire sale, thats what were seeing, particularly for the smaller and mediumsized companies. Well, in my direct experience, of course, its a lot of entrepreneurs who are in financial securities, but if you look at the track record, in general were seeing largely continuity in the management. Companies are being bought and left in italy. The design, even the manufacturing in most cases, and i believe chinas company in the last few years have learned have learned. Years ago, they were much more, let me say, rough in the way theyre managing, how theyre working. The process is much more ordered and much more professional, in my view. Is there the chinese have been buying up Italian Companies for a little while now. You go down to the lakes and you look at a company like reeva and its partner company. Theyve been acquired by chinese owners. Have we seen a pickup when the chinese buy or trade with asia . Is there a track record that this actually works . The track record, definitely. Italy is very export. Theyve been performing better than most in europe. In china, were still way below the potential. The first seven months of the year, its a sign this cycle is happening, and we can tell you almost every company with chinese shareholder have immediately increase the export to china and its business with china. The u. K. Get most out of any european country, let the u. K. s record of exporting to china leaves a lot to be designed. Is the problem here the chinese are coming up and buying up and investing in companies, but as you say, the data doesnt necessarily support idea theyre willing to do more more imports from europe as a result of that. Well, first of all, england, they attract investor from everywhere. They are the champion of Foreign Investment in europe. Of course, its a very open language, the english language. E know the factor. They attract also more investor for germany, from the u. S. And elsewhere. If you look at the big picture, china needs to rebalance the alance it creates. There are huge triples in terms of cash. Also to rebalance these, they need to investor more and consumer more. This is happening. The fiveyear plan is selling up their consumption. Its a key factor for the future of china, and this is happening. So i do believe and by the way, england has overtaken italy on export to the chinese market, mainly because of highend and luxury cars. But for the first time in the last year, british export to china has been bigger than italian export to china, to my big disappointment. Ok. Im sure youll try to fix that. Ricardo, nice to see you. Thanks very much for your time. Thank you for inviting me. Nice product to sell, i have to say. Ricardo, thank you very much. A lot of stuff. The president of the italian trade promotion agency. They got nice cars in italy. Coming up commuter chaos. German trade workers are set to strike today as negotiations go off the tracks. Good morning. Welcome back. Were streaming on your tablets. Were on bloomberg. Com. Let me run you through some of the details. Baby food helps reinforce the companys prediction of a return to possible growth in the second half. Infant formula and baby food sales gained 19 . That was the first quarterly increase in more than a year. European stocks are rallying today. Passengers are also ignoring bola fears and continuing to fly. German trade workers are gearing up to go on strike this afternoon and tomorrow. Negotiations between Deutsche Bank and the trade Drivers Union have broken down. Demands included a 5 pay increase. Up next, we are looking at changes atop of the e. T. F. Were going to be live in paris. Jean bernard levy looks set to take over as c. E. O. Well have more on that story. And were going to take a spin in audis selfdriving concept car. Its fast. Note welcome back. Were live on bloomberg tv. Were here in london. Im guy johnson, and these are the Bloomberg Top headlines. Shares in shimpe slumping today. Abbvie is considering scrapping its plan to buy a company after the u. S. Treasury department announced changes to tax laws, which effectively make the inversions which abbvie were so interested in less attractive. U. K. Unemployment outdraw more forecasts. Wage growth picked up a touch. Thats the second month running. Jobless rates fell from 6. 2 to 6 . And a second Healthcare Worker has tested positive for ebola in texas. The worker was one of the people who took care of thomas eric duncan, who property settlemented away. The worker reported a fever yesterday and is now isolated in the texas hospital. Right, thats the news. Lets deal with the markets. Another rough day for the market bulls right here, guy. Look at a map. Its across the board, with the exception of whats going on over in airland. You look elsewhere, ftse 100 down by over 1 . In frankfurt, were down by. 7 percent pemples the euro stoxx 50 is 10 off the highs for the year. Forget about whether we will get a correction in the u. S. , right now weve got a correction in the dax. Ere down 10 in the matter of a month. Today were blaming two words, it is steel risk. Check this out. Astrazeneca and sure. Abbvie reconsidering their bid for sure. Sure loses a quarter of its value in under a day. Big, big move. The price goes back towards 38 pounds a share. Because the tax laws in the u. S. Are changing, might remind thaw back in july, abbvie said that tax is not the primary rationale for a deal. Guess what, apparently it is. That puts risk into the equation. It looks unlikely. Elsewhere, what are we looking at . Sterling, 159. 20. That is off the back of unemployment data here in the u. K. Unemployment slips more than expected to 6 . The head winds facing the u. K. Economy right now, inflation at a fiveyear low. The eurozone looking like theyre on the brink of recession. Will that push back a rate hike here for the bank of england . Sterling, you saw the pop, very short lived at 159. 20. Elsewhere, what moves are you seeing in the Commodity Markets . Oil continues to remain under pressure, and in the bond markets, just to wrap this up for you, guy johnson, guess whats happening. Record low yields there. We go. Yeah, no real surprise to see a theme running through the markets. W. T. I. Getting close to the 80 line. Thank you very much indeed. Right, 27 minutes to go until surveillance takes to the airwaves in new york. Tom keene joins us from there now. Tom, a lot to talk about. Got inversion news, oil news. What have you guys got . Oil continues its ascent this morning. The ramifications on canada, on russia, and, of course, on mighty opec. Were thrilled to bring you the first interview as she joins r. B. C. Capital markets. Dr. Kroft with her experience as the c. I. A. Is perfect to speak to on the complex geo politics, particularly of the middle east. On earnings, with bank of america coming up, guy will talk with Steven Whiting of citi group. Theres no one i know that hinges together earnings and profits and losses wr the economy. Steve whiting of citi group, for years theyre in economics, now in strategy. Steve, bank of america out with earnings. Well look at that with bloomberg intelligence. A lot going on this morning. Looking forward to the show. Great analysis coming up on surveillance. Hats in 25 minutes time. Theyre set to be replaced by the current c. E. O. , jean bernard levy. A bit of a surprise, yes. This is a massive political story, though, in france. It is a massive political story indeed. The c. E. O. Being replaced by the italian c. E. O. Now its very controversial, among the socialist party, because he was nominated by the former president , Nicolas Sarkozy, back in 2009. But then in 2012, during the he president ial campaign, opened supported the candidate, nicholas car dozeny, against hollande, so the left wing held him as a symbol of the former president. It is a surprise that the c. E. O. Has been named. We had other names circulating, including the former c. E. O. , lso the former chairwoman. Now, maybe the government, because obviously this decision is very political because e. D. F. Is 85 owned by the french state, maybe the government thought that jeanbernard levy was better than other candidates. Hes been running the past couple of years, and before that he was and helped a lot in the restructuring. Put this in the context of Frances Energy policy for mesm obviously the Current Energy minister, you remember her, former president ial candidate back in 2007 against Nicolas Sarkozy, currently Energy Minister in the government. She weighed a lot in the balance for the replacement, because just yesterday the National Assemble until france passed a new energy law which s a big program for the rest of the monday. The goal is to reduce frances dependence on nuclear. They rely 75 on nuclear, and they want to bring this down to 50 . In terms of dependence on nuclear and the challenge for the new deal, jeanbernard levy. Caroline, thank you very much. Thats the breaking story out of paris. Now lets talk about other things happening in london. Let me take you to the one young world annual summit. Its in dublin tomorrow, but a lot of the people are coming through london today. Its being called davos for young people. Its a space for World Leaders to mentor some of the brightest young people from around the planet. Lets talk to one of them, the managing director at metcalf food company. Hes a special delegate at this event. Good morning to you. For those who dont know what ou guys do, its nice Little Things downstairs. If you dont know, i munch on them during this program. Keep the sugar levels up. Traditionally this event has been about kind of big hitters coming to the event. Its talking to people that are trying to be entrepreneurs. You dont necessarily fit that profile. Youre more of a peer group mentor. Are they changing the gig . Is this a changing nature of the way were treating entrepreneurs . Yes, so i think they wanted to do a panel for young people, its the first time theyve done this in four years, and theres a lot of emphasis now on entrepreneurship. Two hours tomorrow, were going to be talking about what weve donna long with the other panelist. Its great, and its one of the founders of one young world asked to put this together about eight months ago, never been done before. And i think the audience, who is people 18 and 30 years old, will relate to us a lot better. Theyve always had big Business Leaders speak at one young world, and its a chance for us to speak to the audience and relate our reallife experiences. You worked in the finance industry for a while, did not you, and then he set up the business . How many people are attending this before the financial crisis would have ended up working in one of the big banks, one of the big law firms, etc. It seems to be a sea change. I dont know how many, but definitely a few. What weve seen in the last few years, particularly our company, lot of the bright young grads who went into finance Law Consulting have decided to work for young startups. Weve been able to attract aa lot of bright young grads that i dont think weve been able to do before. A lot of people are changing industries. When you look at the opportunities that are out there at the moment, is there a desire in the Wider Business Community to foster more companies . We have more products in our pantry downstairs. Is the fact that we got you guys here part and parcel of the fact that Many Companies want to bring Companies Like yours in . You talk to big c. E. O. s, and they often talk about this lost generation. Are Big Companies doing enough to help Small Companies like you . I think theyre doing more and more. On our panel, for example, the c. E. O. Of jenkins is hosting it, and hes supporting young entrepreneurs in a very big way. Its part of his strategy. Theyre looking to fund young startups, so there is definitely a lot of emphasis on encouraging people to start their own businesses. Its a problem n spain. If you look ahead to the opportunities that exist, do you think you can probably get your head round a little bit more the opportunities that exist because youre closer in age and the nature of your company is a bit different than we would have seen previously . Do you, therefore, have a better opportunity to take advantage of this . I think so. Were focused on healthy snacking. People need to eat, and young people want to eat healthily. Its a big opportunity for us, and even in spain, where the economy hasnt been great, people need to eat, and we think theres a massive opportunity there, as in france and belgium and other european countries. Im curious about the demographic of people that eat rice cakes covered in chocolate. Do they tend to be younger . It is a young demographic, 18 to 35yearolds, but a lot older people eat rice cakes as well. Im not pointing at you. Im curious whether investors are watching this program. Are Younger Companies better at taking advantage . The thing with us, we can innovate much more quickly than bigger companies. Julian, who heads up all the product innovation, he can create a product within three to six months, whereas a Bigger Company would take two to three years to do that. Were able to innovate, and that is a big, big focus for the u. K. Supermarkets, retailers, and people were dealing with overseas as well. They launched in august in the big supermarkets here in the u. K. Were launching new favors, and we think were going to revolutionize how people snack at lunch on noodle pots. We are launching some new flavors of popcorn. Weve got a whole load of stuff coming along. Thats all we do, we innovate. Fantastic stuff. Thank you very much indeed. Enjoy the event. The managing director of metcalf food company. Right, up next deal or no deal. Investors punishing shares as abbvie said its rethinking its takeover. What will the u. S. Companies decide to do next . Welcome back. Lets talk about our top story. Abbvie considering its plan to buy the drug maker. For more, lets bring in an analyst tracking the business. There were always doubts that this was anything other than a tax inversion story, despite what abbvie was saying, that there is a strategic rationale behind this. Thats now looking pretty thin, isnt it . This almost certainly looks like a tax deal thats gone wrong. Certainly the tax deal was responsible for taking the price to where it did. Yeah. In terms of analyzing the standard, theres certainly value there. But whether abbvie would have been able to pay what its supposed to pay without the tax inversion benefits, i doubt that very much. Do we have to strip out from the sector here in europe the kind of premium we may have put in as a result of expectations to further inversion tax deals, whatever they were going through, can we change the rules . The rule changes havent been that significant, but the premium certainly is dropping out. Certainly would seem to be the case if you look at the Market Reaction today, although it has to be said that making significant changes to legislation in the u. S. Is not straightforward, and this one has not particularly been tested and seems to be hinging on whether or not companies are able to use this socalled hopscotch sort of financing and whether the u. S. Government is able to apply a tax that is akin to what they would apply in a dividend from a company. Ike i said, its untested. I guess the markets are taking a view now that its impossible to price this risk, and we were going to were going to react the way we have, but sure, the current valuation is looking an attractive proposition, i think. Ok. Youre down there, and youre trying to figure out what to do next, youre the managing team of this company. How hard is it to kind of pick yourself up after youve seen the kind of maelstrom surrounding your company the last few months and get back to business . Yeah, i mean, that is a key question. I think all of that value and destruction would have probably been captured by the break fee, if youre being very hardnosed about trying to value that. Its easier to do that if youre sure, because its such a High Growth Company in terms of revenues and its earnings. You know, obvious it will does require the input of management in terms of what they do for the long run and what acquisitions theyre able to execute. But in terms of running the business, trying to continue with the growth, i dont think it would have been too much of a destruction on this stage. It s sure still a takeover target . I think so. Who is the kind of company that would buy it . I still dont think that the abbvie story has finished. Ok, thats interesting, yeah. I think that the board meeting, which is going to take place on the 20th, you know, will have to appraise the new situation as its presented to the board. They have an obligation to do that. But we saw a tax inversion deal announced this week. They made the acquisition of the best part of 2 billion, citing inversion. You know, i think its fair to say that they have the duty to look at this new circumstances, but i dont think its a done deal that this deal is dead in the water. And the probability of there, and im a merger ash trage guy and trying to work out exactly what the balance is here . Billion dollar question, isnt it . Yeah. I would say probably, in my view, its more like 7030 that the deal does go ahead with abbvie. Ok. The price isnt necessarily reflecting that this morning. No, sir. Thank you very much. Were going to take a break. Welcome bark, everyone. Youre watching the pulse. Lets take a look at the future of riding. Audi is hoping to set a new world record for the fastest selfdriving car. Our hans nichols took a spin in the concept car. This is a standard audi rs7. Pretty nice sedan, and this over here is also an rs7, but its spefrpbl its got a name, bobby. Thats because its piloted driving. Were here at a racetrack in central germany, and were going to do man versus machine. And im going to see whether or not i can beat bobby on some hot laps. You feel that burn, bobby . I think im pulling some gs right there. Of course, computers dont feel g forces, so that may be my advantage. The question, is am i going to be making it more down the straightaway or the turn . What i come in at. Now lets see what bobbys got. Are you ready . Im ready, lets go. Pretty fast start. Why did it take that turn like that . Now, tell me, does it know the track . Yes. So this has been programmed to learn this track. Yeah, actually, it gives the map to the car, and the map finds the bond are you of the track. And then the car starts to think about it and generate speed. If you lose control, then we want to have an automatic system that helps you to regain the control and keep the car on the track. Have you ever spent time on a racetrack . No, no im a financial journalist. I have no business being on a racetrack my only hope, really, is i was safe and this car stayed within the sort of safety envelope and that, you know, i pushed the envelope, because ive got the right stuff. Now the moment of truth. See hole see how well i did. No you did a pretty fast, but i got to disappoint you, bobby was five seconds faster. Theres only way to beat a machine, more practice. Ive got five seconds to shave off. Our financial juniorist, i have no business being on a racetrack, the quote of that package. I always thought hans nichols was a machine, a financial journalist machine nevertheless, but still a machine. Right, lets talk about the currency markets, talking of machines, show you what is happening. This is the cable rate. As you can see, were bouncing back. We saw some data out a little bit earlier that showed the u. K. Employment Getting Better and better. Unemployment falling. The pound didnt react that much to that, spiking up and down, but since then we started to crime back. The big story of the day is what is happening in oil. Check out the contract. The west texas contract is getting very close to that 80 mark. Nevertheless, the possibility later of breaking through the 80 level. When is the marginal cost of production for the guy . Is it 80, 75, 70, 65 . Were going to find out, but certainly they made a better position from an Innovation Point of view than others, and of course im talking about the russia, at the present story around the world. Were going to talk more about it on surveillance. That is it for the pulse from bloomberg television. This is bloomberg surveillance. Morning, another case of ebola in texas. This as the cdc goes in search of a robust response. Oil continues to descend as opecs very future at risk. Leadepper spray and batons to arrest in hong kong. Good morning, everyone. This is bloomberg surveillance. Were live from our world Head Quarters in new york, it is tuesday come october 15. Im tom keene, joining me adam johnson and scarlet fu. A second ebola case has been diagnosed in texas. This is another Health Care Worker who helped treat the ebola patient at a dallas hospital. Meanwhile, the World Health Organization warns that the infection rates could hit 10,000 a week by december and the u. S. Government is ramping up its campaign. Here is cdc director tom frieden. Anywhere inospital the country that has a confirmed case of ebola, we will put a team on the ground