Apple. The arm down 2. 5 . You can see this playing out in the markets. Lets move to another company that reported. That is siemens. Hans, youre watching details there. They have a strong future but revenues down 3 from the year before. The first full quarter of a report card for the new c. E. O. Well see how the it reacts through the day on the trading floor. Jon, lets come to you on the Broader Market picture. Emerging markets, things looking a little calmer perhaps . The calm after the storm. U. K. G. D. P. Which manus is on and the Federal Reserve meets today. Very interesting. Youre looking at futures. Fairly flat through the morning. The ftse had its biggest drop yesterday. Here in london on the ftse 100 where it takes a bit of my interest this morning because we get u. K. G. D. P. The best year for growth since 007. This is interesting because it is how it shapes Monetary Policy at the bank of england. What will they do with forward uidance . Likely to move f. X. Heading back towards the highs of may 2011. U. K. G. D. P. And you also have the Federal Reserve meeting beginning today and finishing tomorrow. Looks like another reduction in quantitative easing. Well keep an eye on whats happening stateside. Economists from Deutsche Bank say pain will be limited to a few economies. Lets welcome in a managing director and investor. Some economists are saying the pressure were seeing is going to remain contained within emerging markets and were going to start distinguishing as investors more than those that are facing trouble and those that are less so. Is that correct . I think it is too early to say. Over a number of years we have seen emerging market currencies come under pressure. The selfcorrected forces of better exports should have resulted in lower account deficits. The reality is that has not happened. Were not at level where is current deficits are. Why . Because of a lack of growth in the developed world or because everybody was chasing the export model . Yes. Absolutely. There has not been enough internal reform focus on growth. We also dont know what the transition in china is going to be with their reform program. I think it is way too early in the year for people to say it is contained. Were seeing underperformance now. This is not a new thing. It is a continuation of the same. People are hoping the growth mod realize is changed but they have not yet. Is it china that is worrying or some of the credit issues . I think it is a combination. The two are interrelated. Once we see the proactive sort of credit resolution, they are beginning to embark, we have seen a bit of a setback with the most recent trust fund bailout. What we have to see is defaults happen in on orderly manner. We dont know what the investor impact is going to be. Plus tightening bringing down refocusing of growth that has uncertain consequences on economic growth. It is challenging now. We dont know how deep the slowdown is. Markets can only speculate where it is going to be. We see one bad number and lets talk about more developed markets and the tapering conversation surround pg Federal Reserve. That is one of the reasons we have seen turmoil in the markets at the start of the year. Is that going to change the eds thinking . Are they able to think only about what is right for the u. S. Economy and make that their focus. I think they would love to be able to say that but inevitably there is going to be some feedthrough to their thinking. One economist said the fed these stop digging a hole for themselves because at some point they have to get out of this q. E. 10 billion per meeting according to estimates. But it is still growing. The q. E. Is still going on. At some point they have to reduce their amount of debt they hold. We have to go the full circle here. The first thing to do is stop digging. I dont think they should stop that process. They should carry on tapering which they probably will do. Is the market fallout around the taper story . Is it the amount the fed is utting back on stimulus . It is eventually outcome. We have been moving towards stimulus since 2009. Growth momentum is slowing and we have had a lot of stimulus. Thank you. Here is a look at what is coming up on on the move. R. B. S. , is this a onetime setback . Apple falls short. What is the european fallout . More on that. Welcome back. This is on the move on Bloomberg Television, radio, streaming on your phone, tab let and bloomberg. Com. Here is a stock on the move. The apple readings sent stock eaker. You can see the stock is down. 2 . This company has twice increased its q 4 sales outlook. Lets move to banking. R. B. S. Is on track for its largest pretax loss after setting aside 3 billion pounds for legal and compensation claims. We know the legacy issues. The bonuses and capital are also on the agenda here. When you look through the roll call of additional charges, it moves on to that. Jamie dime deon got a pay raise of 74 . Jamie dimon got a pay raise of 74 . This is the team that is leading our organization and when you making the losses were about to make, the team believes they should not accept the bonuses this year. This is probably one of the most socially politically contentious issues. For me what is interesting is when you go behind the bonus story, they are going to lobby for a 200 bonus and pay for some of the staff. It is the people at the top who are not excluded from receiving a bonus. Have a look at this. The roll call which makes for interesting viewing. Eler nielson will be Peter Nielsen will be allowed to have a bonus. Ory cullinan leads the bad bank and he will be able to have a bonus. He applied for c. E. O. Job which mcunion went for. When youre running a bank which is difficult to hold it all together and keeps the programs in place that are delivering, i can tell you from the sources i spoke to, in the the american and european offices at r. B. S. , it is a tough environment there. People are war weary. There is not a great sphere. People atmosphere. It is not a good place on a whole variety of levels. If youre trung part of the bank that is the bad bank, what does it say on your Business Card . It is probably going to come own to 8. 1 to 8. 5 . This is going to put pressure on mcewan to accelerate the downsize of the bank. Can you time to go for an ideal . Do you to sell the assets . Disposing of some of the assets would relewis your riskweighted assets. Lets see what he delivers in 2014. Thank you. Lets get the thought of our guest. I know you like some of the financials. Is this tied to a Global Recovery story . There are so many legacy ssues. Are we going to see financials respond the same they might have done in previous upturns . It is an improving position. A lot of the capitalraising issues hopefully are behind us with some of the u. S. And u. K. Banks. Europe will have to wait and see. Housing is giving us a bit of a as is reducing credit spreads for a lot of the european peripheral bonds. Hat is the real tail wind. I think were way away from that. That credit channel is still in place. Do you stay away from it because they have the asset quality reviews . Do you wait before you review whether you want to be involved in those kinds of banks . There is no need to jump the gun on this. We have u. K. Banks that we like and u. S. Banks. We like to be more cautious. Lets talk about technology now. There was some disappointing news out of apple. Jonathan ferro has more. It is all about the iphone. Record iphone sales but they disappoint. Expecting just at 55 million 51 million. At a significant part of the . Apples market share is declining. Large screens, low prices and that is where the trend is. The other side of this story are the forecasts apple released last night. Revenue for this current quarter, even with the tieup could well decline for the First Time Since 2003. This could be the quarter that were in could be the First Quarter of sales drops that well see apple report since 2003. Lets talk about what this means in terms of product category. Does this come down a lack of new products from the business . Yeah. The discussion comes back to exactly that. Apple hasnt released a new product since 2010. No new product since steve jobs. People will come back to this issue, a lack of innovation. Maybe a push into mobile payments. Something tim cook says increegs him. Sensor has been uilt in. How global apple is. You see how this is impact european markets. The likes of arm and dialogue, you see them down in early trading. Lets continue our conversation with our guest. We had a more disappointing set of numbers from apple. What does this tell you about technology . The trend that many are talking about is the move towards a lower price hand set. Is that something youre interested in as an investor . Are you focused elsewhere . I guess it is not surprising. This is because we have new and sets that are cheaper. We want to play it through micron that builds flash memory chips. Pricing power has returned to the sector. Ry to get nine times earnings. That is the stock that will benefit from proliferation. Away from partially sticking with the hand sets you like google, dont you . Google is a complete dominance the online ad spending space. They are building momentum. Hey are the dominant player. We really like to company. In this market where growth is hard to come by, this is one company that is growing. There are not many Company Names that thank you so much for joining us today. Coming up, a good report. Profit in one of siemens key units more than doubled. T could help him prove his predecessor wrong. Details next. Welcome back to on the move. Breaking news out of ukraine. He Prime Minister azarov has resigned. It is not the resignation that protesters in the streets have been calling for. Ryan chilcote has been following this story for us over the last few weeks. Lets get his thoughts. A resignation but not the one the protesters were looking for. Yes. We had some hints that it might appen. He was prepared to install one of the opposition leaders into his job. He declined the offer so it seemed as if the issue was sort of closed though we did get a hint there might be a discussion about government responsibility for the violence we have seen during protest and the violence from the police and whether that was appropriate. Ery interesting. This happened about just about 10 minutes ago. Immediately after the announcement, they switched away. Interesting. The announcement going on to say with the intention of opening the way for political compromise. The government in the last few days offered this position to the opposition. It was rejected. Now they are opening up this discussion again and think perhaps they can revisit there. Redshirt appears there is an irreconcilable problem. The president wants to stay in power until march. The protesters want him out. The president and his government are the problem. The Prime Minister is a technocrat in this country. The power is consolidated at he president ial level. Whoever is offered the Prime Ministers job, if that is omebody that is palatable to the opposition. Would they be given any real power. What we have seen in the last 48 hours has raised concern for the government. Particularly the protests outside kiev. They want to see that stop. This is a real concession. Obviously the cynics will say strategizing is, and politicing. Thank you very much. Still to come, it may be the best year of growth in the u. K. Since twen. Fourth quarter g. D. P. Due in about an hour. Well have analysis next. Dd welcome back to on the move. Lets get a quick check on the markets. We have moves higher across European Equity indices. Things are calmer. Many will be watching the Federal Reserve in terms of their meeting. Well hear from them tomorrow on what they choose to do on tapering. We saw emerging market currencies under pressure at the start of this year. The r. B. I. In india, the central bank there actually moving on Interest Rates to stem the fall we have seen in the rupee. Things different than how they have been over the last couple of trading sessions. Lets get to top headlines for you. Ukraines Prime Minister icholas azarov has resigned. They are expected to hold a noconfidence vote in the government. R. B. S. Is on track for its biggest pretax loss since 2008. They set aside 3. 1 billion pounds more for legal and compensation claims. A surprise rate increase from the reserve bank of india. They raised their bench mark to 8 from 7. 75 . U. K. G. D. P. Figures for 2013 come out in about an hours time. There are signs of a pickup in growth. Questions we main how sustainable it is. Manus cranny joins us with a look at these numbers. A good 2013. The ability to replicate that is going to be tough. It is the question of whether t is widespread. Production slipped a little in november. The view is were going to get momentum continue through 2014 and into 2015. 2. 6 . Were in a sweet spot. That is phrase being used. There was one cracking quote. A natural momentum that a selfreinforcing cycle, people spend, companies rise, companies hire. That is the key. It is about that level of confidence. Do you feel more confident bout doing innovation. Do we feel more confident to spend . Some key analysts have been adjusting when we see the first rate hike. It was in the latter part of last week. Have a look at this. City and barclays. They are pulling their view forward. First rate hike will come this quarter of 2014. Pair ba says it is the end of the afair. Barclays says were going for a gradual process. I think what you have here is a definite shifting. Said 1 by the end of the year. Economist enior u. K. Ross walker joins us. We were going through range of expectations. Youre towards the end of the range. When do you see the rate hike happening and why . Were were still Third Quarter 015. In august we had the first hike. We were one of the earlier banks looking for an early rate rise. The consensus has shifted. Im concerned about the medium term sustainability of growth. I think well have a decent gleer 2014 but some of the props may fall away in 2015. Particularly relations of the Housing Market and credit. I think you need to keep an eye on whats happening in the u. S. And euro area. I dont think they will be raising rates too far ahead of the fed or e. C. B. If the u. K. Economy is in a sweet spot, should we sit back and enjoy it . No, i think they are reasonable questions. It is i would say in the shortterm, it is certainly threw unbalanced growth is better than no growth because at least if you develop a bit of momentum, we could see the recovery broadening out. But really that is we have only seen partial rebalancing of the economy. In todays numbers well get only an output breakdown which is not the best way of exposing the fragilities. We have had no boosts to growth from net exports since the recovery began and the level of investments is below where it as at the cyclical trough. I think we need to see growth bronged out. That is big question for the year ahead. How do sue see broadening out impacting on Employment Data . The markets were caught off guard at the pace at which the Unemployment Rate is coming down in the u. K. Do does this mean they will adjust Forward Guidance because it is tied to the speed at which unemployment comes down . The guidance will have to be adjusted because were closing n so fast on the 7 threshold. Carney seems to be hinting they will make an announcement in february in the inflation eport. Hinting they may ditch this unemployment threshold and move to something else. It is still vague what that might be. Inflation on the other hand perhaps giving the bank of england a little breather in terms of the outlook for Interest Rates. Where do you see ip nation heading in the u. K. . Does that continue to give the u. K. And bank of england some time to breathe . The Unemployment Rate has fallen faster than forecasters expected. The game change is how quickly ip nation has fallen back to target. When the bank of england launched guidance in august, they thought inflation today would be at 2. 9 . It is actually at the 2 target. They have only one target, the inflation target. That is the key thing that is going to allow Interest Rates to be held for longer. If we have this conversation of falling unemployment and higher, stickier inflation they would be in a more difficult position. Fascinating to watch the interplay between inflation and unemployment numbers in the u. K. Thank you. Well take a short break here at on the move. After the break, well speak with the chief executive on europes Largest Semiconductor maker. Keep it here. Were on the move. This is on the move on Bloomberg Television and streaming live on bloomberg. Com, your tablet, phone and any windows phone. Carlo. Great to talk to you. Your business is in the middle of restructuring. You delivered losses but they are narrowing. What is the big headache for you . What is the big challenge ahead . Carlo, do you hear me . Yes, now i can hear you. You delivered losses. They are narrowing. What is the big challenge ahead for stmicro . We moved into at least from an operating point of view to a small positive. It is now Second Quarter in a row that we have a small profit. If i compare with the situation that we have in q 4, 2012, it is much, much better. He turnaround was for 2012, the loss to st was negative and moving into positive territory. What is done it is clearly not enough. E want to move on. We want to gain share. Like 2013. The markets that we serve declined and we grew. This year we are more encouraged by the markets projection information that we ave. The target is 4 growth. We want to do better than the arket. The growth margin will improve. We will continue to drive down our expenses. In q to 4 we reduced them by 4 . Carlo, can i ask you about what customers are buying now . Some Technology Industry analysts are talking about how consumers are m