good morning, everybody. you are watching "the pulse." live in london. i'm guy johnson. >> i'm francine lacqua. turns onto tech for racing in the latest running shoes. we take you inside its innovation labs. >> and growing gucci. we're going to speak with the ceo about expanding his key brands. ofthe gucci brand in terms creativity in the key categories is what it should be. we need to work much more on the communication side of the brand. we have been a little bit too much focusing on the products side. this has been done well. >> what a dream shot. by the side of the pool. >> that is how i want to run my business. >> you will hear more later on. >> talking about nice places. all this morning, we are bringing you exclusive interviews from the ubs wealth management summit in davos. manus cranny is there now. what themes are you hearing? theme i have got so far from the morning is fear ye not. we have spoken to the cio from asia-pacific. she said they will support the market is seven percent. but don't get overly stres sed, because the chinese will not allow the economy to tip over. they will have shadow banking rectified. we come up with alex friedman, the global cio. it was interesting the way you look at the world. stop trying to be myopic. q.e. in europe. stop trying to look through the day today nuances of the fed. correction as a structural opportunity for you to take from your cash portfolio which is pretty darn hard to get these clients to move from task into higher yielding products. any opportunity you get, where it offers value, take that opportunity. and tech. tech was another issue that alex made clear. look at technology in two ways. one is not enterprise investing. but there is capital expenditure versus the downside you've seen in twitter and facebook. >> thank you. manus cranny with the latest. from the ubs summit. we will have plenty more from manus. he is about to speak with the money manager. we will get his take on what they concerned about. >> this guy runs the super wealthy wealth management bit of the business. that is coming up. simon smiles. will be joining us. carrefour reported revenue. it makes a turnaround for its european business. this is the second largest retailer on earth. let's get straight into the business story with our business correspondent, caroline hyde. walk us around the numbers. talk about spain. bit,hares are off a because sales are falling. spain is starting to see a turnaround. after six years of declines in sales, we have two straight quarters eking out growth. we are starting to see in a project or he for spain. the reason that is important, the third biggest unit after france and brazil. the rest of the world, not looking quite so optimistic. italy a particular area of weakness. they say they are trying to change that in the near term. interesting information from china. carrefour was hit by foreign currency weakness. ys persistent falls in consumption is the trend they are seen. concerns for china going forward, but it is about foreign currency weakness. and france. hyper markets not doing so well. >> m&s coming out with figures today. it is about a third of the size of carrefour. they have had a much weaker baseline. >> he's desperately trying to focus at last, are we getting a ringing in the tills? they have been trying to ring clothing up to date. to likeout .6% like sales clothes. that is the first time we have ever seen the government's focus on clothes. usually it is general merchandise -- clothing homew ear. yes, clothing is the best in three years. a nice record numbers of dine-in for valentine's day. record chocolates and flowers for others a. but general merchandise -- growth margin is down. we have seen profitability being hit. general merchandise down for the 11th straight quarter. no great overhaul in the u.k. signs we're getting near to the turnaround. >> lots of ability to our headlines. retailing is falling. >> exactly. >> boom boom. >> having fun with this one. >> interesting points for international growth for marks & spencer. largest ca's lothing retail. it is competition. h&m. they are making inroads into asia overall. wearow price point casual is being eroded at the moment. >> we have moved on from m&s. uniclo. like to like sales rose. they were hit by october sales. typhoons in that time. the japanese did not go out and start buying as much as they used to. there is a concern that robin ability is being hit promotions and competition. this is something that marks & spencer's faces. by aance retail also hit little bit of currency because of the eyn. yen. >thank you. >> you are kind of setting yourself up by call yourself fast retailing. >> not for the potential time when growth may slow. they should have known better. >> ostracism is the word of the day. greece is coming out of the day. book is opening for the first bond sale in four years. demand looks to be pretty strong. david tweed is here with the latest. >> yeah, what is the opposite of ostracism? i suppose warm welcome. looking at the numbers -- 17.5 billion euros worhth of orders. they are only looking to raise 2.5 billion euros. it is quite in next ordinary amount of demand -- an extraordinary amount of demand. the books of only just opened. by the end of the day we should know exactly how much oversubscribed this issue is. the other interesting thing would be how much people are willing to pay for it. a lot of people saying the yield could be below five percent. that is something to watch out for. now, we have got some inflation numbers coming up in an hour. . d, just to say we've got those numbers. just because we had them flashing at the bottom of the screen in front of you. the five-year bond has been set at 3 billion. i do not know what the oversubscription number was. it will probably be a little bit over subscribed. 4.95%> middle of the curve now set. >> great news for the greeks, despite the fact that we had a bomb going off near the central bank this morning. we do not know who is behind that particular activity. >> yeah. what it does, i think, is remind people of the fact that this country still is is experiencing social tension. we are going to see that clearly in an hours time when we get the unemployment numbers out which are still eye wateringly high. maybe a dampening of the enthusiasm that surrounds the bond story today. david tweed in berlin joining us on the latest out of greece. >> chinese trade fell sharply for the month of march. exports and imports missed forecast from economists surveyed by bloomberg. investors are monitoring prospects for additional stimulus as china's premier tries to stabilize the economy. >> investigators are optimism that in a matter of days they will be able to find records from the missing malaysia jet after in australian ship detected to new pings for what might be flight recorders. it may be possible to step towards narrowing further the area which they are covering and to deploy robots to hunt near to the area with -- maybe to triangulate exactly where these devices are. >> dropfox is introducing a photo app. it will let users browse and share images they have s aved on their cloud. emily chang spoke with the ceo of dropbox. >> carousel is basically all of your photos, your entire life in your pocket wherever you go. because it is great to have your photos on your phone, but like, you only have the photos from that phone. what about the ones on your computer and all these other places? we bring it all together into this and we organize it for you so you see this timeline of your life. head into break, let's bring you live pictures from davos. francine lacqua usually to be found in the mountains. manus cranny can be found there in the spring. as you can see, we still have a few white tops out there. i imagine this game is still pretty decent. >> i only get to go when it is -25 degrees. >> we will be back at the ubs conference. stay tuned for "the pulse." we have an interview with ubs. simon smiles will be joining us shortly. ♪ >> we do not believe that luxury brands can take advantage of all the price statements by stretching -- like very low price, 200 euros towards 5000 euros in the same category. we need to move upwards as the number of customers capable of buying luxury products is increasing in the world. kering's chairman. >> i want to be there. >> it is nice to run your business from poolside. he is talking about changing products and pumping more money into gucci. it is a very nice shot. it is distracting. >> all you can think about is, this man is sitting by a pool somewhere warm. >> and he is married to salma hayek. not jealous at all. guy johnson. staying with the theme of luxuries, what trends will we see for the rich over the next 20 to 30 years. let's get back to manus cranny from the ubs wealth management summit in davos. >> i do not know how to follow the pictures you have just shown, but simon smiles is the chief executive -- high netafter the worth business. talk about the scale of the business you look after. the complexion of the business. the kind of people you talk to. 00 the business of ubs has $4 billion invested assets. >> how has that changed? the world has gone through a huge change. rich change their perspective ijn the conversations you have had? >>. if you go back 10 years ago, the perception was about asset gathering and confidentiality. you move forward to today, it is very much about investment performance and also increasingly about connectivity. out.know you have been you ran off the list of countries you have been to recently. what are the most important points of those conversations face-to-face? are they worried about risk, about america, about china? one of the big themes? >> there are two. one is an increasing interest in european assets. in addition to that, as always, real estate. particular within the european context. the other thing i've noticed among the larger clients we have is increasing willingness to talk and want to talk about longer-term things, things that could be more certain of. i think it is a function of the last three years of fed and ecb press conferences. termerms of the longer investment, talk me through the geography. asia and china have a proclivity for rich. through how that manifests itself in the business as you do? >> it continues to be a strong base. clients have a large allocation towards chinese and hong kong equities. in the u.k., the u.k. equities. in switzerland, handful of blue-chip swiss equities. and swiss bonds. the commonality across these regions, along with the european assets, this is increasing focus on longer-term things. talk about population growth. talking about growing emerging market consumption. that leads to conversations about investments in things like protein consumption is. companies that increase agricultural yields. water infrastructure. >> those are quite long-term, very structured investments. are they reconcile? they know once again into these big themes about population, about agriculture, food and water -- water is another issue as well. are they prepared for the long trade? >> i think so. some of these lend themselves to public equities. many of them lend themselves to private equities. with the larger clients, they have the liquidity that they are able to lock up for a longer time. and earn additional returns based on the lockout. again, it depends on the nature of the themes. water. a constant problem with investing is where to invest. beenricing of water has difficult. rather than investing in utilities, talk about the people that provide infrastructure, the pipe and filter makers. >> that takes quite a bit of research. let's talk about ringing the rich together, because this is something that fascinates me. presume it -- i happens in quiet locations. you bring some incredibly rich people together. talk to me about what happens at those gatherings. are focused increasingly as a business on creating networking opportunities and connectivity between clients. we're doing it through the billionaire clients. we bring them together once a year. programs ineries of asia. this week, concurrent with the conference downstairs. for clients and executives and consumer and retailing businesses. it goes all the way down to more granular events. we have events for in the tunisian plantation owners. it ising on the event, different. on the connective end, it is a lot about philanthropy, access to management. on longer-term investment themes and opportunity for clients to network with each other. >> that is quite a spectrum from billionaires to ceo's. i have got to be brutal. you do not do this for the sake of your health. it is about fostering opportunity. gatherings lead to longer-term conductivity which will lead to bigger business for the wealth management side of the business? is that what you hope for. and you look at it as an opportunity? broader concept here to try to create value for our clients. we invest a lot of money in investment chief officer function. we have 900 analysts to drive investment opportunity. we have events such as the one below that, the public is showing what we do every month. information from our clients. we asked him how the world is going. that is one side. creating value. the other side very much as trying to trust the bank of choice and create networks -- >> simon, we will have to leave it there. that is one of the classic conversations, a great conversation. i'm looking forward to being downstairs with you. i'll have all the cio's together. the culprit of the film and went off in the middle of the interview -yes, me. back to you. >> we were going to let it slide, but we were wondering. >> yeah. >> professional 99.999% percent of the time. >> it is always a risk. manus is on tv. let's give him a ring. ok, as we had to break, it is time for "the pulse" number. $1,600 this is how much this original princess elsa dress is going for on ebay. do we have a picture? >> the dress was featured in "frozen." stores across the u.s. are sold out of the dress. it is not even the original. this is just one of them. wow. >> desperate parents trying to get a hold of these things. if they cannot, they are selling their own. sequined out. "frozen" blew away the box office winter. the dress may be the most popular amongst nursery growers. >> we will take a break. see you in a couple minutes. ♪ >> 25 minutes past the hour. you're watching "the pulse." let's find out what is happening with the markets. there is one man to talk to you. our markets editor is in davos . jon ferro will tell us what we want to know. >> the second choice is the markets. .6 on the dax. an equity market rally on the back of those, dovish than expected fed minutes. equities markets today -- boring. euro-dollar has been pushing higher. we see a weaker dollar off the back of those minutes. the euro pushing back to 1.3864. fx boring. one thing everybody is talking about all morning -- the greek bond auction. the five year. the yield? 4.95%. below five percent. the greek five year two years ago had a yield north of 6%? is this a bet on greece? is this a search for yield gone too far? >> jonathan ferro with your asset check. we are back in two. ♪ . . >> welcome back to "the pulse" live from bloomberg's european headquarters in london. >> these are the bloomberg top headlines. >> chinese trade fell sharply from the month of march. exports and imports missed forecast from economists surveyed by bloomberg. monitoringre prospects for additional stimulus as china's premier tries to stabilize the economy. >> golf fans are only hours away from the tee off of the first major of the year. competing.24 rookies golf's biggest name of course out. woods is recovering from back surgery. no tiger this year. >> kering's ceo has been speaking to bloomberg. we asked where he sees the biggest growth opportunities for his brand. next 20,ou ask in the 30 years in terms of economic development, the key market our young people, very much attracted by brands, very much aware, attracted by sports. because of their fast-growing pace are generating more and more members of rich people to the other side. fortunes, with big ukraine's richest man is fighting to save his billions. his industrial fortune has plummeted by almost half to about $12 billion. >> a mere $12 billion. rob lafranco joins us now with more. how much of a risk is there that this number keeps falling? >> it is a pretty high risk. this is a fortune that was about $22 billion in january, 2013. a decline in the metals market knocked about 44% off and then the crisis happened. this is an individual who i think it is safe to say pretty much controls ukraine's economy, controls half of its coal and energy output. , land, cellultural phones, retail, banks, finance, life insurance. >> it is a huge fortune. what can you tell us about the man, the way he runs things, is he flashy? >> one of the most incredible aspects of the story at the moment, this is a very reclusive individual. we have never spoken to him once. he was out on april 7 speaking to protesters into the wee hours of the morning. he has made a very public appearance in the wake of this crisis. a longtime ally of the ousted president, viktor yanukovych. rose toof them prominence at the same time. there has been a lot of looking at his assets and how they have been acquired, whether it was cronyism or that sort of thing. this is a guy whose world has been shaken to its foundation. >> what is he doing to protect it? >> he is reaching out to just about everybody that one can reach out to. he has not spoken with president putin although some reports have said he has. he has reached out to presidential candidates. he is reaching out to the protesters. he has put out a number of public statements calling the use of outside force unacceptable in ukraine, urging people that ukraine needs to stay together. obviously the calls for calm have not been heeded but he is giving it his best shot. >> rob, thank you so much. fascinating story. >> the ukrainian government forces are working to entrench their authority in the country's russia leaning east. as tension remains high, the human toll is starting to be seen. non-russian minorities flee the recently annexed crimea and penicillin. angus bennett reports. >> a penniless crimean woman weeps on the steps of a key of social service office. >> my six-year-old daughter was in crimea. i got her out using every method i could. ha was a children's clothing designer in crimea before the disputed referendum and crimea last month that saw her region break away from ukraine and become part of russia. she is one of thousands who have fled 500, mentors north to the ukrainian capital kiev because of concerns about ethnic tension. many stay in places like this, a crumbling soviet era shelter. there are no luxuries here. alexandre and his son lived behind a two room flat, their car and their lives. >> we left because we are ukrainian citizens. we don't want to the russians. beginning april 18, we will all automatically become russians. social security workers are helping the waste -- helping displaced crimea across the city. new offices have had to open up because of demand. >> about 900 people have been provided with health and registered here. different people, some with children, some elderly. people need housing first and foremost. >> without international assistance in a country teetering on the brink of bankruptcy, how long can this last? forget,ten -- let's not we talk about the tensions, sanctions, but this has a real effect on people on the street. they are struggling to get things in and out of the country. >> let's move on. policymakers have been meeting. today we are going to find the results of the decision. it was a short meeting this time around. jonathan ferro joins us with illegals -- with the details. >> i think it is another reason why people might be talking about this being a nonevent. this is our talking point. i have a full-screen talking about whether it is a nonevent or not. three reasons perhaps, inflation below target, this new fuzzy guidance, something that even officials within the bank of england don't really agree on, and new officials coming in june. i spoke to kevin of goldman sachs and he is violently disagreeing. he says they are on autopilot as long as nothing changes. if thepound goes up, russian sanctions go up, if something happens, they need to be on alert. so they are alert but for the moment it is steady as she goes. >> you're talking about the bank of england. you have the financial policy committee that may well have to act in the next 12 months. the fact that we have new policymakers is also interesting. when you talk to a lot of these analysts, no one can tell you what the bank of england is going to look like in 12 months. the composition of the bank of england, how these people will vote. i think that is when the bank of england gets a little bit more interesting. when we get that first vote, that first dissent, someone looking for a rate rise, that is when it gets -- you will not hear a single person talk about the bank of england on autopilot. let's talk a little bit about the fed. quite dovish i thought. i looked at it last night and again this morning. they are very much focused on not diffusing the markets. ratesint is really, that -- we are not going to see them tightened anytime soon. there has been this confusion over communication. it cleared it up a little bit. >> at the same time, it confused me even more. rates will beere 2015-2016. it was up from december. i understood that. then i am told that i am not to read too much into that. what i also think is you can have a dovish interpretation and focus on one line and that one line is seven participants noted the increase, the shift in projections. read the next line, the next line says that some think it was warranted. there is a lot more this then has to be said. the reason people are dovish is because there was no mention of the six-month line from janet yellen. this is more in-line with what janet yellen is pushing anyway. we are not in a rush. are lot of economists saying they don't see anything for the next 12 months. we are also interested in this jamie dimon. he took a more the less optical approach this year. he was weighing what the bank had to pay and what the common man on the street, the world's poor he was talking about. >> this guy wants to be more appealing for the everyman and not just the guy at the top area of this is a guy that has, under a lot of pressure. rates normalize, we know one thing for certain. it will happen differently from what people expect. that is a key line. when we are talking about the fed, the bank of england, there seems to be this sense of security. is it a false sense of security? can we bank on these guys to say , rates won't rise, we won't put them up aggressively. can they guarantee that? >> the same for the bank of england. fed may be four percent. >> if you talk to the average person, their understanding of just one comment from the bank that we won't hike aggressively -- >> we have been in the markets long enough to know there is no guarantee. they react to data. they react to the changing world. when geopolitics is involved, that is difficult to foresee. they don't understand the alpha gap. this is this thing that economists talk about. , fuzzy as the right way of looking at it. >> another reason to be cautious. how can they guarantee something when no one can agree on how much slack there is in the economy? >> fairpoint. to be taking seems a position right now. there will be plenty of guys on the contrary side of that trade. you look at the reaction last night, the vibe was definitely dovish. >> the mortgage brokers also choose the right line to follow. john farrell, thank you so much. >> that's talk about some of the company news you need to know about. hong kong flight up a serrated -- operated by cathay pacific starting december. grew itsr airport longest terminal in the last 12 months. peugeotwagen, chrysler, are all discontinuing convertible models from the current lineup. worldwide sales of convertibles have plunged 44% from a decade ago. buyers are opting for more pragmatic vehicles. >> no fun at all. convertibles may be will add a reason to carry on driving them. apple's chief of design is getting more authority over the look of the company's product. he is taking full control of the team that designs apple's ios software. first or second job out of college. >> and now in charge of apple. and angela ahrens of course arriving in a couple of weeks. there will will be an exciting combination. >> the chairman of yahoo! investments network gets pitches from startups each year. how does he decide which startups he will fund and which ones he won't? we are going to a fly on the wall. in addition to my other responsibilities, i have created an early stage investment network. many of you have sent your ideas for us to look at. today we are going to vet those presentations. typically you we see anywhere from 15 to 30 companies per week. >> the first thing we look for is industry focus are. >> what was the most creative thing you saw? >> monitoring for pollution in china. it is a very big problem. >> how confident are you that they can pull it off? >> it looks like their product is still in the design stage. to markthey pitched cuban already? >> it is unclear. >> they have a quote here from him, could be interesting. young teens that are hard to evaluating. we tend to lean on capability. >> did you try to download it? >> i had trouble finding it in the app store? >> i like the last line. it always seems impossible until it is done. >> that is an amazing job. >> good motto as well. >> we are going to take a break. we are back in a couple of minutes. ♪ >> welcome back. france's largest retailer and the you k's biggest clothing retailer both reported numbers today. >> marks and spencer saw i pick up in women's clothing. we are joined by stephen springer, senior retail analyst for planet retail, and caroline hyde. take.get a a little better than expected? how should the gauge and an s -- &s? expected a decline in home wares. he got that. down 11 consecutive quarters. there was a slight twist. they went to the effort of putting out a figure for clothing which they don't normally do. that was a positive figure. >> first time they put the number out. >> caroline, the base for the last three years was so low. >> criticism is that it is too they arehe female targeting are 50 to 70-year-olds. it is even to middle-aged for them. the price point is also higher, about 20% higher on average than other retailers on the high street. maybe we are being lured back by these new celebrities. is that what is going on? is it the new stylish play that is drawing in females? >> i am not sure about that. they have had a major relaunch. womenswear is a core component so that has been at the forefront. that all happened last year. we have kind of seen the results come through. yes, overall, clothing sales are up. but they warned that gross margins were down. they have been promoting very heavily -- >> is that the right strategy? try the top line? forget what the margin looks like. you have to start getting people going through. you have to get the ball rolling -- so yes, we will take a margin hit. >> in theory, yes. they have fallen back on the promotions with the aim of getting momentum going, getting people to stores, getting a bit of excitement going. they may have crossed that line a bit too far. the indication is they have some momentum going but they haven't had the spinoff benefits of people going to stores and buying the non-promotional merchandise. they are creating a bit of a roll. >> we were talking about this yesterday. this is a retailer that could be great, that was great in the past and they never quite got it right. i am a great shopper but i just don't -- >> she is not kidding. >> it is a difficult one. nots part of the u.k. -- just retail heritage, national heritage. there is a lot of heritage in the brand. with that comes a lot of baggage. what does m&s represent these days? it is traditionally associated with middle england and certain demographics. it has to broaden its church. that is the challenge. >> caroline was talking about this. she says, the cosmetics are amazing. the skincare, that is really strong. >> in saudi arabia and india, they are doing standalone lingerie and beauty stores. why not here? >> that is a fair point. lingerie is one of the areas that m&s is very strong. [laughter] they have launched initiatives of standalones for lingerie. i am not sure we are going to see those over here. get have other things to right. >> is that a mistake? they are really good at something. why not focus on it? just break this apart? why don't we see standalone lingerie stores? we already have the standalone food stores. s store, it is& massive, you get lost. it is quite a jumbled experience. why don't you break it out into separate units? >> there is an argument for that. you mentioned the food business. that is performing very well. you do have this polarity. , womenswear especially, is the cornerstone of that brand and that business. that is what they have to get right. off theld hive best-performing parts, but really the focus has to be on getting the vore -- core right. merchandise sales are down, clothing is up, what dragged it down so much? >> the home where, it must have been. this is the split side of putting up the clothing figure. home wares must have been pretty poor. becauseld be a surprise that is a fairly buoyant part of the retail market. >> we will have to get you back on to talk about cara for. i know you are a specialist. thank you so much. stephen springer and caroline hyde, we are back in two is to couple of minutes. ♪ move -- >> time for today's hotshots. a rolling seven truck is a pretty horrifying obstacle to encounter on your morning commute. this professor capture the collision on his car -- camp -- dash cam. miraculously, both drivers escaped unhurt. >> that is amazing. anyway, from overground to underground. this video of a rat on a new york city subway has gone viral. the furry animal caused quite a stir. the video has received more than one million views on youtube since it was published on monday. listening on bloomberg radio, the first word is up next. for our viewers, a second hour of "the pulse" is coming up. >> we are going to talk about what is happening in london. to what extent is the story in crimea changing that? we will talk about how the theme is changing. >> we will get an insider glimpse into the chinese luxury consumer. we will be talking to james roy from china market research group. we heard that a lot of the chinese shoppers like to instagram or be on social media to decide whether to buy a frock or not. we will see if that is still the case. ♪ >> the leading ladies deliver. marks & spencer reports a pickup in women's clothing, but retailing slows as japanese shoppers hit the brakes. >> making more money. we're live in davos with exclusive interviews from the world's biggest private wealth manager. >> and ost radio simple over. greece comes out of exile. demand for the first greek bond sale in four years tops 20 billion euros, but a car bomb near the central bank reminds nvestors of the risks. >> a very warm welcome to those of you waking up in the united states. >> this is "the pulse" live from london. >> right, let's continue to talk about one of our top headlines, greece. the ostracism is over. the nation is coming out of exile. demand for the first greek bond sale in four years tops 20 billion euros. let's get the details now. our europe editor, david tweed, has been tracking the action. are we surprised by the level of demand? >> pretty extraordinary, isn't it, 20 billion euros. the number seemed to keep on going up and up and up over the last 24 hours, these estimates. but 20 billion euros, it looks like that's what it was. the question is, who were the buyers? i would seriously doubt that we'll see some extremely conservative german insurance companies going into that market, but then again, this is also a market which is denoted as an emerging market. the other thing is, where else are you going to get a yield of 4.95%? you're probably not going to get that in junk bonds and corporate bonds. if you buy greek debt, you've got the sort of implied guarantee of the european central bank that will stand behind and do whatever it takes to keep the eurozone together. are they going to allow greece in five years' time to default on a three billion bond issue? let's have a look at the comparison with what you can get in other markets. the u.k. five-year, that's yielding 1.85%. listen to this, guy and francine. italy, its yield is 1.7 %. that's below what the u.k. yield is. ireland and other comparable market, 1.2% is the yield on the five-year. and in portugal, just to add to this one, portugal, which has been back in the market since last year during these syndicated issues, their five-year deal is 2.56%. they hope to go back actually with an auction in the market, probably in the second quarter of this year, so something to look out for. that said, 4.95%. really, are we that surprised we see such huge demand for that great bond? maybe not. >> i guess when you consider where it was relatively short time ago, the fact that it's come in so much is amazing, like prices have rocketed. >> yeah, anything under 5% is good, but we also seem to understand that they may get $28 billion of orders on this bond, so it's no mean feat. tell us about the bomb that went off outside the central bank building. >> it dent deter investors. we don't know who set the bomb off. all we know is there was a bomb. there was a warning at about 5:10 in greece this morning to a website. police were notified. they cordoned off the area. the bomb went off, and no one was injured. this happens relatively frequently in athens, i'm told by our bureau wheef there. it hasn't happened this year. but the important thing is nobody was injured. it must be putting a lot of the greek police on alert, because, of course, who's going to greece tomorrow? it's angela merkel. will she have a bag of tricks with her? she's going to meet business ople, and it will be maybe something there to offer from the greek development agents as the german development agency, but nothing confirmed yet. that will be something we'll watch for tomorrow as well, guy. >> david, we'll leave it there. david tweed, our europe editor. maybe this next one will put the bond in con tefpblgs you've got a yield in there of 5%. you've got an inflation rate. we've just seen the data coming out, c.p.i., year-on-year number, the latest number coming out at minus 1.3. you've got to think about that versus the yield. maybe that pops the yield a little bit higher, the real interest rate on that five-year. >> think what it means for the european central bank. manus cran sea standing by in davos, swutserland, where he's been catching up with some of the biggest names at the biggest private wealth manager. you've had some exclusive chief investment officer conversation. what's the dominant theme? >> the dominant theme, fran, has been see through the day-to-day volatility, the drops in these markets are an opportunity for you to invest. and that was alex friedman's view. one said fear not, the chinese will come in with support, whether it's stimulus packages, making sure that growth stays around 7%. i thought that was a fascinating conversation, the conversations that the networks and billionaires want to have about water, about food. they want to have it about long-term, perhaps not necessarily stocks, but access, big, long-term trends and themes. >> well, if you talked at wealth management, give us his take on the world. >> you know, this is where he crals these guys and girls as it were. they do it behind closed doors every month, so this is a very public forum. i think the message was, look, lot of the risk, the very, very rich are still stocked in cash. that's the theme i come back to you with every time i come to zure and i can talk to the wealth manager. but the future and the growth is absolutely asia. >> asia is the number one growth opportunity. i would say 70 plus percent of my net investment is going into asia and the emerging markets. if you look at the numbers that we posted over the last couple of years and quoted, you could clearly see that it's even accelerating, and that's why we're very happy with our franchise and continue to invest. >> and they are investing. they're hiring in asia. we've seen the bankers out there. he said he expects his average wealth manager advisor here in europe to be producing two million euros of revenue for him. it's about growth and leverage. i'm going to ask about growth. he said you know what, i think we're past the worst. i'm up summing what he said. go to bloomberg.com and you'll catch all of those conversations on the web. back to you. i'm off tomorrow. and those c.i.o.'s are like race horses, all of them wanting to give us their views to the wealth advisors later in the day. back to you in the studio. autopsy hopefully no injuries. manus cranny with the latest from davos, a warmer davos that we usually see. >> we're not talking about jumping fences, but maybe edges. carrefour went up in its update. caroline hyde is here. >> yeah, it hatched. sales still down, so it's not all firing on all cylinders. two quarters we've seen an improvement in sales, tiny numbers, but it is better than the six years we saw a decline in sales. still, there are areas of concern. italy, your home country, francine, is number one, and they're definitely trying to turn that particular area around. also, they're very negative on china. interesting comments coming out saying that china, they're seeing no pickup. in fact, they see a deterioration going forward. but generally, emerging markets, and this is what they sell for the time being, when you've got weak innocence the emerging markets. they're very big in brazil and latin america. that's going to eat into their seasms >> this is a huge retailer. i'm fascinated with the spanish story, because you have more and more investors saying there's value in spanish banks, and this is something, you know, we tend to forget. this is a good sifpblee >> it's a great hunt, isn't it? >> ok, caroline. >> let's talk about m&s. this is the flip side, right? if you look at carrefour, they had pretty good figures over the past three to four years, so today a little bit disappointing. m&s, on the other hand, was so weak in terms of growing that today they surprise on the upside. >> exactly, a .6% growth is surprising. clearly, they're all so worried about marks & expensers and its retailing that any sort of optimism is going to be taken very well by the market so. shares are rising, because for once, in fact, the best in three years is what their othing sales are, and they say, look, we've en vested in advertising, emma thompson, annie lennox, they're trying to say we're more stylish, stop thinking of us as frumpy. starting to ring through on the till, but not that much. i think the food is where they also continue to outperform. what's got to be heavy on everyone's mind is competition and discounting. they're sacrificing profits and sales at the moment. shares actually turning lower now, off by .8%. and i think maybe that is what the future is, how are they going to manage to stabilize profitability while they try to lure in people with very cheap deals at the particular moment? interesting is also the international growth, because it's really betting big. 2250 stores around the world, and employing tactics that maybe guy and i think should be in the united kingdom, stripping out language are you. lingerie and beauty, they're doing stand-alone stores in sued sandrabe india. maybe they could deploy that here. >> the problem is internationally they failed. they've had to close down stores. >> yeah, they just need to make sure this time they get it right. caroline hyde there with the latest on some of the retail stocks we're watching. >> still ahead -- russians living near london, we're going to talk about the changing lifestyle trend of london's russia next. note >> good morning. welcome back. you are watching "the pulse." let's talk about the conscious a markets. let's show you the korean one. don't talk about this one very on which, probably should. we have traded at levels this morning that we haven't seen since 2010. we picked up a little bit off that. .5 a. down as low as 1031 ads you can see, we're trading at 1040.16. they've been perceived as hawkish. this is a country that is just exporting huge amounts at the money, and the flow going back continuing to boost. let me show you a shorter term chart, and i'll show you what's happening here, but the trend basically continues to remain very positive for the korean one, despite a light turnaround in the dollar this morning from the earlier low. so 1040.16 is where they're trading, but earlier on we were down to levels we haven't seen since 2010. >> now, tensions are escalating between russia and the west over the crisis in ukraine. we want to know how russia and ukraine is being impacted. we're jound by the director for russia at qunt essentially lifestyle, a company that provides lifestyle management and concierge services. we're also joined by a billionaires editor. thank you so much for joining us. give me a sense of whether things have changed. we talk here about sanctions. we fwalk the billionaires being affected. but have you seen a difference in your kind of daily, you know, day-to-day dealing with a lot of these russian wealthy? >> well, in the last six months, we've had a definite increase of russian language request. i would say it's about 20% so far. about a year ago, we set up the desk for their particular reason because a lot of my ex-compatriots are coming to live in london. london is still being seen as a financial capital of the world with stability and safety and tradition, as well as schooling and endless financial and business. a lot of russians coming. definitely -- they're more -- i mean, i can hear more russian speakers that are walking down central london. >> not being detered by the threat of sanctions. the talk of sanctions is not detering them, not changing their behavior in any shape or form. >> not really. i just think that russians, and when i say russians, i mean -- >> ukrainians as well potential. >> well, they see london as a fantastic place to live, and i always say that if you have ideas and ambitions, london is the place to be. they're coming here. they have been coming here. they are coming here. but we can see they are on the increase in coming here. >> give us a sense, this is something, we've seen figures float around and pass each other in newspaper articles and various research about how many russian rich actually live in london. i mean, we're talking about 150,000, 200,000, but it's very difficult. what do you know? what does bloomberg know about russian millionaires in london? >> yeah, i mean, it echos the sentiment. we've heard that there is definitely a flee to safety, and that safety is in the west. they fear much more -- they fear far less sanctions coming from the west. they don't worry about losing their apartments. , i an, ukraine, a apartment think he's less afraid about losing that to sanctions from the e.u. than he is to losing his fortunes in ukraine, where putin is unpredictable, violent , upheaval, riots and all that sort of thing. we spoke to a high-end real estate broker a couple of weeks ago when we were first chasing the sanction story, thinking that russians were really going to pull their money from the west. he said just the opposite. he had one client who essentially hp given him the green light to purchase any property worth $10 million or more in london. well, that number jumped at the oment putin took crimea. he wanted his money out of ukraine, out of the east bloc and into london. >> does the trend continue? you talked about a pickup. you talked about the fact that -- you both talked about the fact that they're seeing an acceleration in this process. does that carry on from here? are we going to have more and more russians arriving in london? >> no, no, i'm not afraid, but is it something that's caused by a short-term story surrounding what's happening in the ukraine? ukraine is just a blip on an overall bigger trend, do you think? >> well, without the political situation, when i was growing up, i read about london, about england, about royal family, you know, oscar wilde, charles dickens. ought beautiful and more intricate things and, you know, like every russian person actually knows about all the adventures by heart. e just think that -- >> i feel like i should go back and read my doe unanimous doyle. >> russians do read conan doyle there's lar basis, and a beauty of history and literature and royal family and tradition is very alluring for most people. >> is that the real reason? is that the reason they're coming here, for conan doyle and prince george? that's why they're coming? >> well, you'll have to kind of think that it's not very realistic reason. people are curious. so when they come here, they satisfy their curiosity, they see an -- i'm talking on behalf of many russians leaving here, -- london is ke most beautiful city in the world. >> i was going to ask, because it's very romantic, and actual al lot of russians are very well read. there's also an afinity with paris and the french language, but how much does it actual have the to do with asset prices in london going up? >> yeah, london is always a good market, and the wealthy coming in are driving everybody who can't afford to pay those prices out of the market. >> i think it's a safe investment when you look at it that way, and i don't see that it's stopping. the ukraine crisis is a rather momentary blip, and this has been happening -- london has been the wealth capital of the world for millionaires and billionaires for decades, if not hundreds of years. i don't see it changing. >> all right, thank you so much. now we're back in just a couple of minutes. ♪ >> welcome back to "the pulse" live on bloomberg television and streaming on the ipad and, of course, bloomberg.com. >> right, let's talk tech. israel has been big in microchips ever since intel set up shop there 40 years ago. now it's getting even bigger. this after israel signed a joint venture with panasonic, sending shares up a staggering 140. that's a great name as well. for more, let's get over to tel aviv and our middle east editor, elliot gotkin. >> thanks, guy. i'm joined by the c.e.o., russell. russell, great to have you with us. markets seem to love this panasonic deal, sending your shares skyrocketing. what do they love it so much? >> it's a deal that is truly a win-win. with any partnership, if you understand what the partner wants, if they're upfront about what they want, and if what they want is really what you can give and wish to give, it drives a very good partnership, in the case of the panasonic deal, panasonic is an loss components leader and an log systems leader. they have factories that weren't 100% utilized. the ability for them to reduce cost by having a higher utilization of their factories and employing our expertise as an an log fond are you leader was a good win for them. for us, it gives a lot of capacity and capability. >> panasonic also seems to benefit. investors carrying their policy. in terms of revenues, what impact is this going to have? >> well, we've set for ourselves a target of hitting a billion dollar revenue in 2015, annualized revenue, and this will be the bridge to get there. the start of the deal will bring about $400 million of revenue. on top of that, as we build the fond are you business itself, the j.v. can produce on that range. >> and when is this going to move towerjazz back into profitability? >> profitability for the past eight years, we've been ebitda positive the past seven years. >> in terms of net income? >> net income, the deal we announced that in combination of doing the panasonic will be consolidating our japanese operations. so by doing so, we'll be taking out about $130 million of annualized cost. upon the completion of that, one would think that the gap net profit will be achieved. again, the gap net profit is simply an issue at this point of covering the depression, and i had come to the company in 2005, we had about, in our factory, 10,000 wafer a month capacity, which wasn't enough to make it cash even. we've increased that to 40,000 per month, which took capital. now at this point we're reaching a point of being able to absorb all of the depreciation. >> just very briefly, what's next, more acquisition? >> we always look at acquisitions, and we have a very good board that's aligned with us, an excellent chairman, but -- >> i'm sorry, we're actually out of time. but i do appreciate you joining us this morning. we're going to hand it back to london. thank you very much, c.e.o. of towerjazz. back to you in london. >> elliot, thank you so much. now we're back in just a couple of couple of minutes. retail, we had figures, and we're looking at chinese consumer luxury. >> yes, after the break, basically we're going shopping. follow us on twitter guyjohnsontv @flacqua. ♪ >> in august, we will have a worldwide relaunch, as we call it, of the brand on a new signature, forever faster, and it's an amazing investment. no other brand has done that before to that extent. it's an investment. for this we bring worldwide visibility, a new image to the brand, and at the same time, we will add new products on the market. the two together and sales-wise next year should have some great impact on our development. >> oh, to be in china next to that swimming pool. >> i have to say, for our u.s. audience who wasn't watching in the previous hour, we've been talking about this a lot, here is the guy running an amazing company, married to salma hayek, and that's the way you should conduct your business, by the poolside. >> he was speaking to us about his plans to relaunch puma. the sports brand has struggled to keep up with rivals. >> yeah. we'll talk about that a little bit more later, but let's talk about what's happening in terms of headlines that you need to know about this morning. investigators are optimistic that in a matter of days they'll be able to find wreckage from the missing malaysian jets after search vessels detected two new pings. it may be possible to step towards narrowing it, robot submarine to scan the sea bed. >> now chinese trades fell sharply in the month of march. exports and imports missed forecasts. investors are monitoring prospects for additional stimulus, and the chinese premier tries to stabilize the economy. >> and golf fans are only hours away from the first major of the year, the masters tees off a little bit later in augusta, georgia. this year they have 24 rookies ompeting in the competition. not a tiger in sight. back surgery causing him to stay away from this one. >> now let's take a look at how european markets are trading. jonathan has the latest from the touch screen. john? >> thanks very much, francine. this is how europe is trading right now as we speak. they're down by almost .1%. cac 40, a half of 1%. you saw the rally early on, and n interpretation of dovish financial reserve minutes. let me show you something europe is talking about, if you're waking up in the united states. greece is back in the bond market. unemployment is at a february 2013 low. it's at 26.7%. you can borrow money at 4.95%. let me show what you the yield was in greece two years ago, above 60%. everybody is asking the question, is it a bet on greece? or is this a bet that they'll just keep on going and duly, if you buy in a with a yield of 4.95%, you can profit later down the line. a lot of people talk about one thing, has the search for yield one too far. >> thank you. he was oversubscribed many, many times n. just 25 minutes, it's, of course, "surveillance." >> tom keene is in washington today. that means we have the pleasure of scarlet fu's company to tell us what we can expect from new york. >> good morning, guy and francine. we've got a lot of great guests coming up on "surveillance," starting with a former banker at goldman sachs, bear stearns. niece somehow an author. her book talks about the cozy relationship between u.s. presidents and wall street leaders. she says that the u.s. financial political system is rigged, so she goes one step further than michael lewis in talking about the u.s. stock arket being prigged. tom is in washington. he'll speaking with a professor of cornell university, but before that, the head of the china desk over at the i.m.f. so they'll take a look at what to expect from the i.m.f. meetings. tom's a presetup to big interview with christine lagarde, taking place later on this morning, along with his conversation with the president of the world bank as well. so a lot to come from those discussions. we're looking forward to us. it's going to be a great few days. >> scarlet, thank you very much indeed, scarlet fu joining us from the "surveillance" desk. >> now let's get you some news. manchester airports will add some flights operated by cathay to its knelt work. cathay will operate four weekly flights started december 8. they stand to have expand the network of its largest terminal with seven new long haul routes in the past 12 months. >> volkswagen, chrysler, and renault are all discounting convertible models, discontinuing, even, convertible models from their current lienup. worldwide sales of convertibles have plunged. people in the u.s. and europe are offering for more pragmatic vehicles. that sounds stunningly boring. >> well, you say that. the apple chief of design is getting more authority over the look of the company's products. now he's taking full control of the team that designs apple's i.o.s. software. the move coincides with the retirement of greg christie, a key software designer behind the original iphone. >> all right, i'm a big harsh, talking about the convertible. anyway, bank of england policy makers have been meeting. they did so yesterday. today we're going to get the decision. it was a short meeting because they're all off to the meeting that scarlet was talking, about the i.m.f. meeting in washington. jonathan is here to talk about it. >> i think it's what everybody is talking about. this goes off to washington and have a good time. well, a good time or not, it's a time. >> she is tough. i think this is something people are talking about. it's something we've got to talk about, is the bank of england on auto pilot the rest of the year? i think a lot of reasons people pick it out is the fact it's below target. it's quite a big deal for the last couple of years. in fact, we've got this kind of fuzzy guidance, no clear threshold. it's unclear how that plays out. then you start to come on board in june, and this is just leading to a lot of people to believe, look, the bank of england is not going to do anything the rest of 2014. i've got to ask the question whether that's the right way to think about it. you've got the monetary policy and interest rates and then the financial policy committee that's got to look at financial stability, things at the mortgage market and how this is underwritten. they may lead to that over the next 12 months. in fact, there's a lot of people that say they will over the housing market. but guy, you've also got to think about new members that come on. we've talked about the i.m.f. we don't really know how she's going to vote. will she be dovish or hawkish? a lot of people talking about paper, talked about how new members actually tend to be a little bit more hawkish so. over the next year, it could get really interesting if we finally get that 8-1 vote. i'm looking for a rate hike. ask you a lot of people, that's going to come before the end of 2014. it's going to come at some point and then everybody will talk about auto pilot. >> yeah, exactly. what can we read into what the fed said yesterday? >> follow the markets. u.s. markets rallied. yields came down, the dollar got weaker. by that justification, it was a pretty dovish interpretation of the minutes. but i think it's difficult to have a 25-page document and only focus on one line and say, look, that medium rate forecast, don't read too much into that. we're not in a rush. that's at least the way people are taking this, but we're talking earlier about whether you should be comfortable with the central bank keeping rates low for a significant period of time. >> so this basically stems from the fact that janet yellen stemmed from a period, which a lot of markets were nervous b. this is delaying this a little bit. >> come out in the press conference, rates might rise. there's no reference to that in the minutes. a little bit of relief. >> there's a video conference, which big surprise to me was actually, ok, we've taken the toned down a little bit, but the fact they had a video conference, a special video conference we didn't know about, to talk about how they manage guy, i thought it was fascinating. >> well, i thought it was fascinating, and then you check the date of the video conference, it was march 4, a couple of days before the unemployment report, and get the labor market report a couple of days later, and i think the fed has to be prepared f. we've got unemployment, it drops to 6.5%, and some of these guys were going to talk before the meeting, and there needs to be a conversation just in case -- >> i think the fact that that happened, i think it's -- >> it's concerning, and they needed to talk about it, but it's not the first time they've had some sort of extraordinary unplanned meeting. they did this in the debt ceiling crisis as well. >> and you're having an extraordinary meeting. we're kind of -- it's not in the millionaire crisis. it just shows you the level of debt that's going on about how communication and how they manage the communication process. >> janet yellen takes it very seriously. >> so does mark carney. this is probably the one thing that central bankers really should not rest on their laurels, making sure whatever they're thinking comes across in the right way. jonathan with the very latest on central banks. actually, before we go, should we talk about what jamie dimon did? i wrapped a little bit early. john, jamie dimon, c.e.o., what are the key takeways from that? he was a little bit more cautious on central bank action, basically the market's interpretation. >> yeah, i think the key light from that, we've got the quote right here. when rates normalize, we know one thing for certain, it will happen differently than what people expect. i don't know what it means. listen to what the central banks are telling us. the central banks are telling us one thing, so we all expect it to happen that way. when rates go up, it's going stay below historic levels. can they guarantee that? >> just give us the quote again. >> when rates do normalize, we know one thing for certain, it will happen differently from what people expect. my guess is when it happens, it will happen faster than people expect. >> right. are you adding that? >> no, he's saying that. >> he said the last bit, so that's the critical bit. it's going to be faster. >> watch out, guys. it may rise faster and catch you by surprise. john, thank you very much, the very latest on jamie dimon and central banks. >> coming up, how can luxury brands stay relevant in china? we're going to check out changing tastes in the country. >> and as we head to break, eighth a hot shot, this video of a rat on a new york city subway that's gone viral. the animal that joined the commuters quased caused quite a stir. the footage has received more than one million views on youtube. >> yeah, you see mice on the underground pretty regularly, but this is a fast-moving rat. very well filmed rat. look at all the cell phones that are out. note ♪ >> we don't believe that luxury brands can take advantage of the price segment by stretching he brands. we don't believe in that. so we need to move upwards as a member of customers is increasing in the world. >> that was kering c.e.o. on pricing luxury products for global consumers. can that strategy work, though, amid competition from lower price labels, especially in markets like china? >> let's ask james roy, associate principal at the china market research group. he specialize insist helping brands understand consumer behavior in china. great to have on you the program. thank you so much for coming in, james. look, we talk about the logo, about how much we want logos. let's just leave that conversation to one side. how do the chinese shop differently than the europeans? they spend more time doing market research. do they own different brands? are they more loyal to brands? what kind of insight can you give us that surprised you? >> hi, francine. great to be here. so what we find when we talk to chinese consumers these days, well, it's quite a bit different than what we found three or four years ago. so these days, you see a lot more emphasis on uniqueness, on authenticity, on matching more with your personal style. you might have seen a lot more people a few years ago just go and buy a single look, a head to toe look. now you're seeing people developing their own sense behalf they want. there's not as much loyalty to any single brand. it's more about looking for what's new. so that's why right now in the market, you're seeing people drift away from the really mass luxury brands in the middle, like louis vuittons and guccis, on the one hand toward ultrahigh brand to the wealthy, and on the other towards more affordable luxury brands like coach, but also newer brands that are in the market now, like michael kors and kate spade, which are offering more differentiated and just overall just a newer brand, a newer look. >> are these consumers mixing high end and low end? people talk in europe about the fact that the consumers will have a bag matching with something or other. is that starting to happen? are we getting the mix and match story beginning to emerge in china a little bit more? >> not as much mixing and matching between the very high end and the more affordable end. it's more that you're seeing the markets split and become more polarized. she left the mid-range brands behind and drift ever more towards the more exclusive brands, ones not that everybody will know, but other people that they know who, you know, who count will know. they are more focused on the affordable side. they're choosing to save up their money rather than save up three months' salary ads they might have used to do for a louis vuitton bag, might be saving that amount of money to travel aboard. they're looking more for an experience, but save a smaller amount of money for something that's at a more affordable price point. they're looking to mix and match, but within an area that's within their means, not so much between different, highly contrasting price points. >> so what's the main difference you've seen in china over the last couple of years? i remember, you know, when easy jet started, people would say, you know, the way we travel is different because we want to spend cheaper in terms of airlines, but we want to stay in nicer hotels. are people spending more, for example forget luxury holiday instead of focusing on putting money to one side for four, five months for a new bag? >> absolutely. you're seeing 97 million people from china travel overseas last year, and they spent about $102 billion. that was more than any national in the world, and that's going to annal increase. i think travel increased by 18% . you're seeing a lot more travel, but a lot more individualized travel, lot more travel that's focused on different experience, newer experience. they're on very exotic types of vacations like an ultraluxury safari in africa or trips to new zealand. and in a way going to more and new interesting places that people haven't been to before is another way of projecting status through social media in the same way that carrying around the latest bag would ave had a number of years ago. >> you see this in western markets as well, experience is becoming more valuable than maybe ownership. just a final quick question. we played a clip earlier on of the c.e.o. of kering, and he's talking about taking his price point higher. if you were running that business, how would you position your market, your company to operate successful until china? what would you be doing? >> i think he's on the right track, especially about going at a market with certain brands, so that's become a very hot brand among more wealthy chinese. number one, because it's more -- it's newer. number two, the designs are less conspicuous and logo cent-ric. it's more about the pattern, the quality of material. that's a brand that's doing really well. i would also say, you also want to have another set of brands in your portfolio that will indicater to young women in their 20's who can't quite afford that level yet, and they will still spend for a bag in a price range that they can afford, but they're not going spend for the ultrahigh level yet. >> james, thank you so much for that. james roy there, senior analyst at the china market research group. >> ok, as we head to break, let's get today's pulse. the original princess elsa dress is going for on ebay. the dress is featured in the disney hit, "frozen", stores across the u.s. have sold out, apparently. >> they certainly are. pretty desperate parents even sewing their own. "frozen" blew away the box office this winter. the dress may be the most sought after amongst nursery goods. at the same time, we're speaking to someone who talks about finances of young couples, and she was saying, children sometimes really can be seen as cost centers. i think this is a good example. >> i hate to see child as profit, but anyway, profit. anyway, right, we're going to be back in a couple of minutes. ♪ >> welcome back. let's talk about the currency markets, the central bank leaving rates on hold today. we have hit fresh highs for the won. earlier on, we got down as low as 131.55. we haven't been down to those levels since 2010. more export strength out of this country is continuing >> now when it comes to the mass market for running shoes, they sell far few trainers than competitors like nike and asics. but now the german sporting giant is hoping it can disrupt this crowded space. achel crane reports. >> at the adidas innovation lab in portland, oregon, the company is getting ready for a marathon. >> what kind of investment was the creation of this film for adidas? >> we spend millions of dollars on r&d, and this is one of our biggest programs. it's a multimillion dollar investment. >> adidas has packed this lab with high-tech equipment and is using science to grab a slice of the lucrative running shoe market. >> if you took basketball and you doubled it, and you put any shoe with a cleat on the bottom, from soccer, baseball, football, anything, track, put them together, it's smaller than running. women's running is begger than basketball. it's just giant. >> only a fraction of the 30 million active runners in the united states wear adidas running shoes. the company wants to change that with the new spring blade and boo shoe. >> this is the market we're most off, and this is what we need in this market. >> adidas spent years creating boost's innovative cushioning that they say returns energy to the runner. run he is world magazine called it the best debut of 2013. was it a big gamble for adidas? >> i think all of our innovations are a gamble of some sort, and we do try to hedge our bets as much as possible. >> so adidas is not just now a sports apparel company, also a technology company as well? >> yes, absolutely. >> after years of testing, the new shoe hit stores late last year. but it's too early to tell if adidas' investment in innovation will make runners invest in adidas. >> i think this will help our top line, our bottom line, every line. >> i don't run, but i'm also told it's apparently a fashionable shoe to wear outside for drinks. >> on that note, we will leave there. we're going to talk to christine lagarde later on in the program. we're also going to be talking to the boss of the world bank. great interviews coming up on bloomberg television. make sure you stay tuned. it's going to be a great morning. ♪ >> acrimony and stalemate have led to a lame duck washington. is janet yellen the only adult in the nation's capital? j.p. morgan they had a tin ear. and the kingdom of isolation has been in, disney missed billions as you can't let go of "frozen." good morning, everybody. this is bloomberg "surveillance." we're live in washington, d.c. this is thursday, april 10. i'm tom keene. joining me from our world headquarters. scarlet fu and adam johnson, let's get right to the morning brief in new york city. here's adam johnson. adam? >> tom, overnight, here's what happened. china trade falls unexpectedly. imports were down 11.3%. the government says it will initiate more growth policies. meanwhile, in europe, the bank of england expected to keep rates at a record low, half a percent. we're going to get the official announcement in about an hour, 7:00 this morning. and here in the u.s., we're going to get weekly jobless claims, as well as import prices, both at 8:30. we've got earnings before the bell. family dollar and rite aid, allied financial, the former gmac, begins trading today.

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