they have a bit of inflation. an upbeat starat. we will take it for what it is. >> we will see how the day progresses. the search is on for a new ceo for microsoft. >> one comes out. we had mcnally being called out. he will not be taking the role. the ericsson chief executive thrown in. this man is particular good at -- a fast game. he is going to need that if he is going to managed to steer microsoft onto a growth path. bill gates on the board, you have a battle of will power. >> you certainly do. this is the ultimate marketing event. we are watching banks. >> we have a story this morning that the european central bank, when they go to stress test the banks later this year, they are going to do it in an environment where they will ask the banks to hold 6% of their assets.

that is higher than the last time they did this, which everybody almost passed. a few banks went bust after that. this will bring credibility and the benchmark at six percent is something that has not been finalized that will be argued on -- lobbying for credibility. >> content. sugar content is next. >> that will be a next story. a real diversifying company. 16 week sales up 14%. sugar, revenue down 28%. a 42 month low. couldhe next decade, you see a structural demand issue, just as the politicians are trying to declare a war on sugar. something you and i can talk about. >> we could see the stock fall anywhere up to 4%. in johannesburg

trading. china, china, china. sales decline. they are not sending as much jewelry. cartier, the demand is not there. >> we have quite a lot of news today. we have corporate news and richemont, and we have the car sector as well. what else? wereose car numbers stunning. as we go onto the morning, we are going to keep an eye on initial jobless claims. the fed reports later on in the day. there is no doubt. for the moment, we have a higher opening. this richemont maple the numbers a little lower on the map. the uk, you have three-month housing prices expectations at the highest level since 1999. equities, a little bit of a mixed picture at the moment. we have started with higher futures. london, paris now. a tone set into these markets, just coming off the initial sweep higher for teachers.

there are a country -- a couple of interesting themes. cars and luxury and miners. the cars are beating the market. bmw unchanged. fiat the highest that car sales, a 13% rise. 2013 for the year was the worst since 1995. we have bottomed out. chad thomas will take us through those numbers from berlin shortly. rio tinto. they beat their cost-cutting program. they are ahead of schedule. in iron ore output for the fourth quarter, and they are cutting costs. that is the story. 33 pounds on the nod, up 1.4%. missed on the headline sales. tough times in asia. caroline will run you through the individual pieces of that. less than the market wanted.

dutch the big retailers. fourth-quarter numbers missed. earnings may fall, according to analysts. dollar was higher since i came in at 3:30. the dollar was higher. through the latter part of the asian session. we're drifting off those higher levels in euro-dollar. 1.3610. off a nod. back to you. >> thank you so much. a look at the markets and currencies. christine lagarde urged policy makers in advance to fight deflation. she spoke at the national press club in yesterday -- in washington yesterday. >> now that the global economy looks more stable, the big priority for policymakers from 14 isoint of view in 20

going to be to fortify the feeble global recovery and make it sustainable. >> let's get to our next guest. he's a portfolio manager at janus europe fund. we hear from christine lagarde. deflation is something that is less worse -- much worse than inflation. is there a danger the european central bank is taking it too lightly? >> i think what they're doing is prudent. they are establishing a lot of monetary ease, but they are focused on monetary transmission. $10 trillion in the last five years across all central banks, and all of that money is being parked in bank reserves. it is not productive. it is not reaching the sme's, and the businesses that do employment. what draghi is fixated on is really trying to accelerate monetary transmission. >> it is also a mandate. he can go a little bit beyond

what people thought he would've done on the basis of that. when you look at deflation, if euro,ok at the high certain days, we look like we are in danger of becoming the next japan. >> absolutely. but i think there is a big difference between europe and japan. this is what i want to accentuate today. once you migrate away from the economy, which has fits and starts, although let's be frank -- it has really improved from the bottom in europe. draghi has done a great job of taking out the tail lift. but once you get to companies and you realize that the largest sci europe only produces 45% of its revenues from the european economy and is declining, you realize that when it comes to investing inequities, the value creation is not about inflation or deflation. it is much more of a global story. >> what is value creating? it seems likees

the equities go up by so much because there is cheap money around. >> the era of quantitative easing has lifted a lot of assets. i am not a fan of that. i want more realism. but when you actually do the research and you go down into the companies, you can play any theme on your mind. the biggest revolution in energy is shale. people say that is american. if you look at the component rackanies, be it the pump f manufacturers are those who make utilityl piping or companies that will play a big role in exporting that back from the american shores to europe and elsewhere, you find that europe is very much, very attractive. same thing with tablets. >> there is technology. we will touch on that. thank you so much for now. we will be back with the portfolio manager. here is what is coming up on "on the move."

microsoft eyes eric's and's ceo. ceo.icssono''s more on that next. ♪

>> i'm francine lacqua. from ouron the move" european headquarters. the microsoft ceo search continues. vesberg is said to be

under consideration for the top job. our european business correspondent caroline hyde has the latest on the tech giant's ceo, hans. >> the clock is ticking. we are meant to have steve ballmer to part in august, 2014. added to thebeing mix today is the ericsson chief executive hans vestberg. he is hungry, driven and young. he's p.r. savvy. he gave the keynote address at the consumer electronics event in 2012. he is also a notable sportsmen. handball. he is the chairman of the sweetest handball association -- the swedish handball association. but also, he is going to need

that body contact to push and pull this juggernaut of microsoft into the ranks of growth, get it back on target and also to come up against some very strong personalities who will remain on the board. steve ballmer and bill gates. >> caroline, whoever takes the job will be a tough one as the company is in the midst of a big overhaul. >> you are right. all about the organization. this is a company that is trying to reinvigorate itself. we are not buying pc's. we go for our tablets now and smartphones. they use android. how are they trying to get back on top? whether it is producing their own hardware. the surface tablet. they are making their own nokia phones, but that has not paid off. the areas of growth seem to be cloud computing, productivity software, the likes of database products, exchange to e-mail. and vestberg knows how to make

tough decisions. he knows how to offset competition. remember, he's head of ericsson wireless. they have had plenty of competition coming from asia here they had to dismantle some unprofitable joint ventures. he knows how to make tough decisions. he is also going to win against inside competitors, too. >> thank you so much. we are back with the portfolio manager at janus europe fund. you were telling me that actually this environment can pick which industry group to like. you mentioned tablets. are you big on tech? is there concern that there is so much hype surrounding it? >> honestly, first of all, we do not take bets. if you try taking sector bets, you're bringing in influence of politics and the economy. in every single sector, we are looking for global competitors and ones that are winning the

game. in tech, what is interesting as people think about n apple. the secret sauce of these companies -- you find them in europe in terms of the microchip companies and the euv company that is manifested in the netherlands. when you think about everyday use of a device, you would not think that actually there is a chemical in your ipad that keeps all of the semi-components together. so european companies play a role there and for dissipating the growth. >> are you trying to identify the companies we have not heard about? these are smaller companies, that supply components that are essential to what we do day-to-day, which is used tablets? 9 >> small and big. the most important point i am trying to make is that the war asml versus ericsson. emi versus arm.m they are not saying what is

happening with french gdp? i cannot tell you how companies today, especially in the large cap universe are competing against one another globally. >> except to say that they pay more taxes in france. which is why they may look at the election. >> although, companies are becoming quite efficient in terms of how they move around. companies today are in switzerland, ireland, and the netherlands. >> if you're -- i know they are competing globally, but his currency still not the biggest concern? this is something they have no control over. >> in terms of currency. the last time i checked, value creation is not predicated on a quarter or two years. it is a long-run gambit. my office is focused on currencies. the company -- the economy is missing the boat. a lot of things are happening in europe. of10 years, less than 1/3

revenues will emanate from the continent. myopically whirring about this is missing a great opportunity. what are the global drivers of value? >> longer-term. mont's jewelry -- riche third-quarter sales missed estimates. rules thators would require bank capitalization to never fall below six percent of assets. manus cranny joins us now with more. >> this 6%, let's be clear about it. 6% of assets in the event of the stress test. erse economic scenario. that is what the ecb may ask bsanksanks to have. currently, the request that banks live with 8%.

this'll be tougher than the level set in 2011. we are in this zone. it is called the comprehensive assessment zone. we have a risk assessment going on. we will test the asset quality on the balance sheet. then the stress test. three components that will come through. it is all about mario draghi's sentiment. banks need to fail to give credibility. you spoke to him on this very issue. indeed it is, if they have to fail, they have to fail. it is about credibility. >> what are analysts saying? >> bankers say it is manageable. it is less ambitious than anticipated. but when you look at what this scenario by the ecb versus the u.s., their most recent stress tests, they had a minimum requirement of 5%.

but you know what i would say to that? the u.s. banking system is tremendously further along in terms of rehabilitation than their european counterparts. that is something critically important to understand. >> what are the issues still left? >> when we talk about the issues, think about it this way -- it is about the bad debts, you know, how do you establish nonperforming loans? how do you treat government bonds? mario draghi says they will be zero risk rated. and stress tested. what are the assumptions? it was that the economy would contract by half a percent and real estate would fall by 10%. that was all rather fantastical, wasn't it? >> think you so much. let's go back to our guest. we were talking about industry groups varied you do not look at

industry groups. u.s. saying that investors are missing opportunities because they are not focusing on value creation. talk about banks because this is one sector that is linked to fundamentals. >> actually, what we just heard his music to my ears. bravo, mario draghi. i think you should have strict rules. we should cleanse the system of weeak banks. we need a economy that is robust, not just monetary easing. i love the fact that companies and countries are becoming a lot more competitive. when it comes to banks, why are we forgetting about posting a normal roi? if you think about the lakers versus the out performers -- the laggards versus the out performers, and all of the banks the direct -- that do create an roe --? >> based on the fact that banks

are going up. this is european bonds saying investors are not worried and they hope -- hold so many of them, so they are going up. >> i agree. it is something that i worry about -- it is risk on, risk off . people are not focusing on ok, what is long-term competitive? there are many banks in europe that are growing hand over fist, plus, and are forgotten in the last few months. >> thanks so much for all of that. coming up, european car sales speed ahead in december. we will look at what is behind the biggest gain in four year. stay with us. ♪

>> welcome back to "on the move ." i'm francine lacqua in london. european auto sales surged 13% in december. for more on the story, let's get to berlin where the head of bloomberg news's european auto team chad thomas has more on the story. how much of a surprise was this? >> after six years of declines, automakers have something to cheer about. was a big surprise and it was across all markets. more than half the markets in rurope posted a gain of 10% o r

more. the gain in the u.k. was 25%. always aand there is however what we talk about auto sales in the current market, the spanish market being up 18%, that was propelled by a cash for clunkers program that the government is paying for. and sales in the netherlands more than doubled, but that was because of a new tax increase coming into effect in january. a lot of people in the netherlands went out and bought cars in december before the tax increase came into effect. >> chad, sales are up, but how are they pricing? a lot of these got boosted by cash for clunkers. >> and there are a lot of incentives in the market. we did see incentives creep up in december and january and in g ermany. germany being the biggest market in the region that those

incentives help automakers clear out inventory before the start of the new year. however, automakers are saying that cars are seven to eight years old in europe here at people are coming into showrooms to buy new vehicles. e, what is also important is that used car sales are starting to increase. as sales go up, that is an incentive for people to buy new cars as the prices get closer to one another. raiseelps auto makers prices on used cars. increases iss usually the first sign of a market recovery in the automotive industry. >> it bodes pretty well for 2014. >> yeah, certainly, we are not expecting an increase of 13%, but analysts and automakers who are speaking at the detroit auot say they do expect

sales to be up in europe, somewhere around 5%. thank you so much. here are some companies on the move. dickson's has posted third-quarter sales that beat estimates, but the company expected performance to. be more modest in the fourth quarter stock down 2.6%. staying with u.k. retail. ocado sales climbed 21%. that beat analysts estimate. ums man behind dyson vacu says that the process of invention is unpredictable. he shared his insights on " innovation with charlie rose." >> inventing something could not be devised by one skilled in the arts. so it is the process of discovery of accident, happen

chance. it is the most wonderful journey. it is agony. >> you can watch the full interview by "charlie rose" later on today. ♪

>> welcome back to "on the move ." i'm francine lacqua in london. we are 30 minutes into the trading day. let's see how things are shaping up. you can see a lot of focus on banks. it is the industry groups we're looking at for european new car sales. surging 13%. the luxury sector having a tougher time with richemont missing estimate. let's have euro-dollar. 1.3610. the dollar is rising versus the

yen. dollar-yen.for these are top headlines. imf managing director christine lagarde urged policy makers and advanced economies to fight deflation that would threaten what she called a feeble global recovery. >> if inflation is the genie, then certainly deflation is the ogre that must be fought. >> well, the european central bank is set to have -- said to a six percented capital buffer during stress tests for banks. it is tougher than the five percent requirement set by london-based european banking association in 2011. and italy's democratic party leader will unveil his reform plan to the party today. the 39 year old newly elected leader was hoping to make the labor market more dynamic. italy faces a youth unemployment rate of 40%.

now for more on italy and the renzi performs. let's get to our bureau chief. dan, thanks for joining us. does renzi have support within his party? buon giorno. >> yes, he does. however, you have to remember that what -- renzi has totally wiped out the former leadership of this party in the last six months. so there are remnants of those who he defeated that aren't terribly enthusiastic about his methods, which is this gung ho approach, setting goals and targets, and trying to set the agenda for this government led by mr. letta. so yes, he has support, but there are still people within his party who i think are trying to curb him a little bit. what is interesting, as mario monti said, talking about the

labor reform is this is all interesting because this is being proposed by the head of italy's lefist party. the centerleft. it is not coming from conservatives on the center-right. while these performs -- reforms have been proposed before, it has never come from that side of the political spectrum. ergo, i think perhaps there is more of a chance now these could be adopted. >> the problem is at the moment, renzi's young. he has great ideas. he wants to shake things up. but there is a danger that if he shakes things up too much, the government falls, and that at the end of the day means less stability for italy. >> sure. well, i think his game plan is this -- he obviously wants to get these reforms to the labor

market rolling, but above all, he wants to change the way italian politicians, and lawmakers are elected. i do not think he wants to have elections this year. stabilityd to have is to get the structural changes in place, he wants to govern with a new system. with a new electoral system that will elect a clear majority and not go through the pain of what italy, what happened last year in february that produce this odd coalition government that included mr. berlusconi on the right and the the democratic party on the left. he wants to have clear rules in place and have a shot at a clear victory, and he becomes prime minister. that is his game plan. >> interesting. thank you so much. our italy bureau chief from milan. coming up, we will focus more on italy and go through -- and automakers. back in two.

♪

ini'm francine lacqua london. this is "on the move" on

bloomberg television, streaming live on your tablet phone and any windows phone as well. the industry is facing long-term challenges. jonathan ferro has more on the story. are we talking about high prices for sugar or are we eating less? >> it is a supply-side issue. we have seen increasing supply come out of the likes of brazil and india. we have seen. subggar fall. sugar revenue is down 28% in just the last 16 weeks. stellary the trimark. the budget store doing well. this wille -- is how impact the company on the demand side. structural demand falling for sugar just as the politics of this country start to hea t up. >> is sugar the new tobacco,

i.e., the devil? >> some people are calling it the new tobacco. i will give you some stats for color. isteaspoons of sugar, that how much the average american consumes. supply of sorts by the beverage industry. what's interesting is how this debate plays out in the u.k. ad foods produces one million tons of the stuff every single year. they meet half of our sugar requirements. . this will be a hot potato. if someone wants to get fat, eat loads of sugar, that is up to them. on the other side of things, you have the nhs, the taxpayers that will have to take care of the bill. $600 billion is how much the obesity epidemic.cost the industry .

politically and economically, this'll be a story not necessarily for now but perhaps over the next decade. >> it is. it is not great, but it tastes so good. >> i cannot deny that. >> the very latest on sugar being the new tobacco. refrormsl unveil his to the party today. for more, marco, great to have you on the program. give me a sense. we want to know what he is up to, to see if he supports the government or not. situation that is happening in the last 24-48 hours. renzi has decided he will go see president berlusconi to see if he can finally make a proposal to do the major reforms needed in italy and that i've been talking about for 18 months. the first and fundamental one is the labor reform. italy hasewers know,

an extremely expensive ratio as far as the government is concerned between what the employee takes home and what it costs the employer. when an employee makes 1000 euro s a month, it costs the employer 36,000 euros a year. this is something that has really hurt the italian economy. he also wants to get rid of the senate. he has been talking about eliminating bicameralism. and just tearing it down. italy,, when you look at it is probably one of the most on flexible labor markets in europe. what is he politically playing at? does he want to become the next prime minister? is he willing to wait? or will we have less stability in the next six months? >> that is a very good question, and i think it is a question that renzi wakes up every morning and asked himself.

i think he is less than 40 years old. he is politically, i would say, similar to obama. full of enthusiasm and new ideas. he is going to wait for letta, who is the current prime minister. so far, i do not see making any errors. he has not antagonized anybody. he is a person of consensus. he is moderately left-wing. he is not an extremist. and renzi's got problems within his own party because his left been accusingve him of going to bed with the enemy when renzi announced he wants to visit berlusconi on saturday. i think he'll wait it out. >> ok, that would probably be better for the country, because it needs more stability. marco, going to see berlusconi.

why? he is out of the picture, isn't he? >> berlusconi is out of the picture. he was taken from the senate last year. he has claims he wants to be involved in politics, as many viewers know, he had his passport taken away. he is not allowed to leave the country. he has another process coming up in the next couple weeks. but he still commands and amazingly strong following. bear in mind that half the tv stations in italy are still owned by him. a significant part of print media is still owned by him and his brother. he still has enormous attraction to middle-class italians who have been disenchanted with the socialist experiment of the 1980's and 1990's of berlusconi's opponents. so he still things he has a

crack at it. >> he's always thought that. when you look at renzo. 39 now. do you think he will be prime minister by 45? some of the sad things about italy is sometimes they have great politicians, but they never quite make it. it is always the old class that comes back. francine, i think it is not a question of if, it is a question of when. renzi is going to become prime minister just like obama became president. it is written in the stars. and it is going to happen. whether it is going to be hta,diately after le or there will be a transitional government, it is unquestionable renzi has attracted a very significant chunk of the left-leaning italians. and in fact, even the center. the old christian democrats are

not in agreement with many of renzi's policies. so it is very possible he will become prime minister before 45, which would be in enormous first in italy, which has been a eenntry which has b governed by a jeering to craddick majority over the last 60 years. ontocractic majority. world's most influential supermodels turns 40 today. we report on kate moss's rise f rom teenage cover girl to 21st century. cover girl this story contains flash photography. ♪ >> katemoss remains one of fashion's biggest names. in this world, friends and models come and go. but moss is an exception. she has appeared on the covers

of the most important fashion magazine and strolled the catwalk for chanel and top shop. she made nearly $20 million in 2012, but since then, she has launched and accessories collection, published a book, and signed endorsements. moss was discovered at jfk airport at the tender age of 14. two year later, she was on the cover of magazines. but in 2005, she was pictured snorting cocaine. contracts lead, but it did not hurt her popularity. a year later, she was voted british model of the year and the offers came streaming back. moss is now turning 40. so how do you celebrate when you are a multimillionaire model? well, you go to richard branson's personal island, of course. the same, it to do

would set you back $60,000 a night. it's reported moss is getting the virgin islands get away for free. it helps when you are friends with the boss. in an industry dominated by teenagers, moss continues to grace the cover of magazines and redefine the idea and image of a supermodel. will be quite a party, but we did not get an invitation. most women are not making kate moss's millions, but more women are buying jewelry for themselves. caroline hyde joins us with the latest. richemont sales figures came out this morning. pointed to thets trend of women buying more jewelry for themselves. >> shares off by 2.2%. largely because chinese sales are declining. they are falling. this really disappointed the likes of deutsche bank who expected richemont, maker of

cartier, to eke out double-digit growth. we saw 9% growth. you factor in the strength of the euro, and how much that ate into their sales in the u.s. and japan. it really is asia-pacific where the disappointment is coming. department stores are not ordering is much. they are nervous. gift giving. that is what is impacted the most. and don't want watches jewelry being given to chinese politicians. you are seeing a plummet in luxury spending. >> now we are seeing a lot more women being empowered, working themselves, earning their own money, especially in asian countries. >> it is a fascinating trend. it has been marked out since the early 2000's, but it has ramped up as we are coming out of the

recession. pay gaps are narrowing. women are wanting to buy jewelry for themselves. analysts have been highlighting this as a trend. on, didlace you have you buy it yourself? >> my sister did. >> the interesting trend for the last year is that women are starting to spend even more. before, they were economical. now they are ramping it up and getting into higher prices. this is a theme will keep on pushing. watch for marketing to taylor to women. and we want trends to follow. >> women power. we love it. now "the pulse" is coming up in 15 minutes. we are joined by guy johnson. girl p ower. >> not even slightly. let's carry on that conversation. we have a guest talking about how you find the face -- if you

are a big brand. the biggest shift u.s. seen in the way models are selected is because more women are working in more senior positions within the luxury industry. it used to be you used sex to sell. no you use edginess. that has been a shift in the way you market to men and women. we will be discussing all of that. i certainly did not bend my 40th on neckar island. we have a great guest talking about the sugar industry. and we will talk to a company solvereezes air to energy problems. what am i talking about? stay tuned. "the pulse" will be up at the top of the hour. looking forward to it. >> you are not 40 yet. guy johnson with "the pulse" in 10 minutes. stay with "on the move." we are back in a few minutes. ♪

>> s ever wonder what it is like to beo, a vegas player? we revealed the incredible perks of being a vegas star. >> 40 million gamblers walk to the vegas trip each year, but most people only get a peek at

the spectacle that is las vegas. to see it all, you need to be a high roller, willing to spend $100,000 a hand. meonke don -- [bleep] >> he is a blackjack player who lives the life of a rockstar. when don johnson walks into a club, bankers -- celebrities pay respect. the casino picks up the tab. >> they are going to try to customize the package and give him what he wants. >> what it takes to dazzle everybody today is 100 times more complex and challenging than before. >> steve wynn's always inventing new generations to lure

gamblers. from nightclubs to shows to chef restaurants. >> we trained the public and raised their expectations. a good thing. >> but only players like don get this treatment -- the best tables, the most expensive. >> they are catering to high end players, starts before they think about coming here. the mgm property has the mansion, which is 29 villas. >> and you get to stay for free? >> nothing is free. it is all factored into the game. i will give you a secret, inside baseball on casinos. >> jim is the ceo of mgm. isowns 10 casinos and don getting perks that every one of them. >> let's say you spend $1000. you win $200. i can comp you to induce you. i will give you $80. >> the more money spent, the

more money casinos make. >> the wahlhale is going to lose $200,000. i should be willing to give him $80,000 worth of stuff, but you cannot eat that much caviar. so the margin on the high end, on the whales is higher. >> which is why casinos will do just about everything to keep the whales playing. >> now we know what a vegas whale is. we are a couple minutes away from the end of the show. "the pulse" is up next. dollar is moving. dollar rising versus the eyn. -- the yen. is before a u.s. reports that economists are saying that joblessness fell, but we saw manufacturing increasing. guy johnson and i are back with

"the pulse." you can follow both of us on twitter. we will see you very shortly. ♪ .

>> office politics. microsoft adds eriksson's boss to its list of c.e.o. candidates. melissa myer fires her top lieutenant. >> happy birthday, kate. why this super model is still on top of her game and why some of the world's biggest brands still think she is the face. good thursday morning to everybody out there. welcom