little bit ofe a optimism and the biggest concern is china. the whole story. the futures are high and they are increasing in the markets. we have one piece of data, this ee w -- zew. ceo, what is the take away? >> he brought up china and the emerging markets and they weren't about it in 2013. -- warned about it in 2013. overall, the four-year looks better than expected. the underlying sales are better than expected and the emerging markets just managed to get eight percent. getting a growth of a percent is what he is saying and the share is up 3.3% as we speak.

are cautious on growth in developing markets. >> we will hear the voice from the man himself. let's go to berlin. david, you are looking at the stocks. let me tell you where they are trading at. what do you think? has beaten the profitability target margin of 35% to 2017. this is as they look at getting extra market share and transitioning towards cloud computing. the growth in cloud computing is something like 41% in annualized growth annually. i will be back with more. >> we will look at that later on. let's have a look at the stocks.

china has had no turnaround and no demonstrative change in the chinese demand for luxury cognac. sapill keep a look on miller as well. it is 2.2%. >> let me give you the bigger picture. it will get a little bit busy. check out the equity markets. business is high through the morning and that is what you have on the open. a touch open on the ot 100 and of performance is a gain 0.7%. what we get is investor confidence. in the u.k., it could be the highest level since 2006. some might say it is a big surprise. that is been shown in the stoxx 600 for the last 12 months. a global poll and uess what investors think?

you know all about the property boom. 35% in london house prices that are in a bubble. let's look at the trade today. the europe and turkish lira. turkish lira over the last 12 months, look at the rise. that is a record high for the euro and a record low for the turkish lira. i talk about this one because the question is can the central bank do anything about this. >> they are the most upbeat on the world economy in any time in the last five years. 59% of those surveyed said that the economic outlook is improving. joining me with his thoughts on the potential, let's welcome rick. he is a global investor with state street and has more than

$2 trillion of assets under management. it is great to have you with us and we took a poll of everyone in the world that is bullish. you are upbeat at state street as we start 2014. but we think the global economy is improving. -- >> we think the global economy is improving and you have to cause a little to say how can we be contrary and? are we missing something? >> the poll was on equities last year and equities was more than 50%. you say that it is about diversification and you like equities. take metrarian view -- through the top line. >> people rely on the equity premiums in the long-term and what we find is that that is very successful for the 100-year investor. termant to find a better

for liquidity premiums to put into your portfolio. from a tactical perspective, equities look like they are offering a better value. >> there was a great line at the end that was a tribute -- attributed to nimbleness. you say that sometimes you can put trades for two or three months in the ration. talk to me about active investment. >> frankly, if you look at europe, we have been enthusiastic since the late summer and a lot of value has been squeezed out. we have to look and examine those prospects in the periphery. the stocks, and this perspective are interesting and i think that some of the. role bond markets have had value squeezed out of them. peripheralthat the on markets have had value squeezed out of them.

39% says they deliver a worse return. where do i look for an alternative? where do i transfer for a fixed income return or a fixed income- style return. >> it is in transition. if you want fixed-income returns, you have to go to credit markets. there's a great deal of interest in short and high-yield credit. the risk was controlled and the or thing we have to walk out -- watch out for there is the protection that investors get and the value. that is why bank loads are becoming more interested in yields. low volatility equity and some of the strategies that offer more certainty with income are interesting substitutes. they come with a price of volatility. >> take me through that volatility. it is slightly longer in terms

of the three-month, four-month trail. it is a much longer flavor. >> you have to look the volatility and take the example of the government shutdown. we were concerned about the shutdown and we thought it would be a delay in payment and there would be a default. it would clearly cause a lot of problems. we cannot change our strategy and go risk-off. that was unlikely. you have to be nimble and there are limits to what you can do. a twist and turn market is hard and you have to think about the patents for 2014. you need to bear in mind that there is still a degree of volatility. >> we have you for half an hour. rick is the global ceo at state street. stay with us on on the move. the maker of ice cream beat

estimates and we will break down the numbers from unilever next. we'll talk about what it means for sap, in terms of profitability.

>> i am manus cranny in london and this is on the move. we are streaming on your phone, your tablet and bloomberg.com full top ok.

april graham a note for your diary. in the loopill join with betty liu. a conversation with my boss, michael bloomberg. those are the layers. -- layers. -- players. operating margins. this is the second time in nine months. they were weaker than expected in the equipment business. the margins are under pressure and remain around seven percent. the stock is down 13% now. that is up from 2415. that is where the stock traded. keep an eye on that. we have big corporate stories making news today. what is unilever and the other is sap. caroline hyde is following unilever and david tweed has the latest on sap.

what is the take away? >> he is sounding upbeat. in sixe up the most months on the back of underlying growth and that is in the underlying markets. it is a tale of two worlds. andemerging markets are up the key driver is latin america and china for growth. the growth is easing and that was put forward to me by the chief executive of unilever. they say it will be more sustainable growth in the emerging markets and what will not have growth is the developing world. there is weakness there. fiveso saw, in europe, years ago, it would take 10 years for europe to recover and to expect another few years of slow and sluggish growth. -- happy onnt on

the whole. forward ate looking the opportunities and the alternatives. and ourve a purpose sustainable living plan. it has an environmental impact. it is planning to work for us. the challenges will be the it isic challenges and being challenged. >> they innovate and improve the margins. they are improving profitability and coming up with new and clever ways of doing it by unleashing new products and the types that they love over there. clearly, this is a company that they feel is winning once again. view on theis

emerging markets and when will that improvements come through? >> in terms of the foreign that is whates, hit unilever in the third quarter. really had a blow because of the winding down of the stimulus in the emerging markets that fell off a cliff with the russian currency and the chinese currency. they did not give me an answer and it is consistent that emerging markets will be there in the longer-term. that is why it is 75% of all the sales that is aimed at the markets. on they are still focused that area as the slowdown happens in europe. to the agenda online. sap is trading lower online and earlier today, they postponed

profitability targets of 35%. .n 2017, the original target this is about reshaping sap. >> it is totally about reshaping sap because what the challenge from therating software enterprise licensing sale and going over to the cloud. selling happened is in , they sold a license to use it. is a farmis happening and it is called the cloud. most of the growth is going to come from that.

glow -- growto very fast in the cloud and in the core. when you move to a cloud business, you start to recognize some of the revenue radically and there is a three-year cycle to hypergrowth. >> one of the reasons is that they cannot be more immediately profitable and there are farms that they are talking about. they are talking about total sales and the cloud could represent 3.5 billion of the sales -- 3.5 million of the sales. >> talk to me about asia and that is where the slump in the traditional was. >> they had a slump in the enterprise software licensing in asia and they are going to focus .n the cloud this will be their memory computing platform and they are

going to migrate all of the products onto the school. what they are doing in asia is linking up with phone companies. for example, samsung. they want samsung to be competitive with all sap software and with the people who have that software in the business. one of the areas that they are looking at. it is richly valued at 16 times the earnings. >> ok, david. thank you for that. those are key news stories. let's talk. >> rick, different businesses. the investment for the future is all about the klein. what do you make of that kind of story? >> it is a powerful story. they had powerful efficiency gains and it is a testament of how quickly these are.

better rate for sap. off,hat story to bounce investors still want to them to the profitability targets if they can. >> this is the consumer side. it is very much a corporate enterprise. they have emerging markets and it is about the consumer and they are committed to that story. generally, this is something that you look for. ani think this is interesting story. normally, it is volatile and expensive. it can be expensive for people's mind. there are emerging markets.

investor, the glamour of stock has become cheaper. cash crunch and a slowdown. investors are most worried about china. what are you worried about in china? are you worried? >> there is a chance for a hard landing and it has been relegated effectively. banking hangs over china as an unresolved issue and it will have to be consolidated and brought into the system. there is some of the valuations of banks overstating the risks in shadow banking. we have seen them in other parts of the world and they have severe damage in the financial system. there is a credit bubble or a monetary stimulus.

>> i like that. they went to the minutia of 7.5 and 7.7. opportunity and not a threat. >> there are opportunities and when you have people concerned, you look at the number of people with shadow banking and it is very large, indeed. it will not end well for some of the lenders in the shadow banking market. how will it go for the banking system in china? it is about consolidation and there is damage on the way with volatility. markhings to cheap talk to >> if they cheap enough further -- she? eap?h further --cheap and cheapen further --

others in asia. >> we will talk about europe and the value placed there in the financial system when we come back. stay with me for that. we will have more of rick mckay. you can never get enough of a person who manages just under a trillion dollars. stay with us.

>> welcome back. i am manus cranny in london. let's go to the chief investment officer at global investment. to the u.s. debate. the taper has started. to care too much about tapering. how do you look at the united states? is it valuation or profitability? >> the valuation has been squeezed out of the equity market. people are looking for something and they seem to find it. drives momentum higher in the equity market. from a valuation perspective and an economic perspective, you cannot really have strengthening without rising yields. you cannot have rising yields without going into earnings. not necessarily going into gdp growth. >> what do you think of the earnings story. -- story?

provide rising and will less opportunities for attractive rates. that will begin to the minute. -- diminish. we see that replay again? is that a big risk by? >> i think the bond markets are looking more attractive and if you compare them with the emerging market on's on the outside in emerging markets, that balance will tip more points emerging rather than periphery. >> let's talk about that balance. if you are going to make a andce on the bond spacing europe can deliver stellar returns. been upgraded and spain has 13% returns. talk me through your thinking there. >> the bond markets reflect

finishing risks in the economy and it is not improving rapidly. markets have gotten ahead of themselves. if you look at the bond markets toeurope, they are beginning look a little bit more interesting with the yields that you can earn and what you need is more stability in the terms of currency. seconds left and we could go on forever. give us the conundrum of what mario draghi needs to do. >> he needs to go as radically as he can. is credit creation process the number one priority. >> it is great to have you here today. you'll have francine on another occasion. loki.

up, it is about lenovo. will they do a deal? we will talk about them when we get back from the break. stay with us, we are on the move.

>> welcome back to on the move. i am manus cranny. we are in bloomberg's european headquarters in london. philanthropist, bill gates, would join in the loop for a conversation with michael bloomberg. these are the bloomberg top headlines. the you did night -- united nations withdrew its invitation to iran. the spokesperson for ban ki-moon says that iran was deeply

disappointing by reneging on promises that were contingent on the talks. the discussions are set to begin tomorrow. 's benchmark money market rates have fallen and they injected $42 billion into the financial system. reduced of china also demand for cash. saysld economic report that he is in a constant fight to keep corporate interests from domineering the annual meeting and doorposts. >> it is a constant fight and when you go somewhere, on the one hand, you may be surprised that we have the spirit of doorposts and the global citizenship and engagement of

social good. you also have your personal interests and it is natural. it is the balance that counts. that was an interview with bloomberg's eric. will be live from doorposts tomorrow and we will bring you the leading voices throughout the day. and they is in talks have a low-end server business. we will have more on the story and let's go to our technology report. he broke the story. why would lenovo go for this now? >> why would they do this now? the consumer pc business is not a healthy place for anyone to be right now. the largest exposure for the

consumer side of the pc business are two taiwanese companies that have had a rough time last year. you look at the companies that did relatively well in the last several months and lenovo is one of them. apart fromause, having exposure to china and the growing markets, they have a higher exposure to corporate markets and a company like a marketd dell have they can tap into when the consumer market is being hurt by accpac -- ipad. more forhave a lot their corporate clients and they can go out there and bought one or two desktops or laptops. , they canple years sign on and really be a customer with a company like lenovo.

they say, you know what, they have this and they can give you service. behind why thinking a company like lenovo would be interested in buying the specific server unit. it is not going to be a one-way trade. they will get their hand on the ibm. >> yeah. they say it is a good deal and they have a great product. they will not be alone in believing that this is something that was going to be purpose -- purchased. that is in other company that they will be looking at and considering as they get into the bidding war. >> ok, we will leave it there. corporate's now. later this morning, the strong euro impacts profits.

joined and it is great to have you with me this morning. exchange about foreign this is a pretty hefty announcements that they made. and we havey true come to expect it. ,hat brought this to life and despite the fact that we saw you , i do see itwn 12% in some respects as being price dan. the outlook is for emerging markets and the trouble in the as they forecast for a while to come. for the time being, it seems to be part of the year clippers share price that is further upside. >> i think that when you look at these two conversations,

, what ournd sap clients feeling and what is their appetite at the moment. not come into the lexicon because of the fact that it has been underperforming for the past year or so. there are higher yielding strop -- stocks. have better-than- expected numbers there versus the expectations. it is the emerging markets that .arry the company we need to see a turnaround in the developing markets and that will clearly help the underdeveloped markets. in addition to sap, i think there is an overoptimistic relation to profitability.

they got at least 20 billion in the particular junction. i think the right to go after ae cloud share to look for longer-term ingrowth. that will all come good. >> ok. we will send it over to the market strategist. we will go over to the high-end headphone market. it takes to beat out competition online.

>> i am manus cranny in london and this is on the move on bloomberg television streaming live on bloomberg.com, your tablets, and any windows phone. later today, the billionaire philanthropist would join in the move with betty liu. -- 2:30today at 230 london time.

the headphones by dr. dre and hip-hop and music this mess is turning his attention to music streaming with the launch of his music today. can they compete with spotify and pandora? here is more on dr. dre and how he hopes to beat competition. you have the headphones. do you have the headphones? >> i do not have the headphones. a would you spend $9.99 on service? are you a millennial? >> they want something for free and that is why spotify does so well. they come out and say they want an end to end music experience and i think the big difference is that this will cost you. this will not be free and it is a noncommercial.

>> what about jumping the rubicon and getting out the funkiest headsets? they are pretty cool. it is surreal. what are they going to give me in this proposition that will make me pay nine dollars 99? $9.99? >> you get 30 days of free subscription for the subscription and an extra $10 a month to put on your monthly phone bill that will carry on. easier and the phone bill leads to your account. analysts actually think that you may be four times more likely to pay if it goes onto an existing bill. that is one of the cap -- t actics.

at&t and them together is a pretty manageable combination. >> it is massive, as well. you want the duration side of things. it will lead you to a nether genre of music that is related. they like to say that this is sure rated -- curated. on dr. dre, you do not get miley cyrus. >> they are building a more sophisticated one. >> that is to the individual. you pay the money and the other thing is exclusivity. dr. dre comes out and says that he launches a new album that is exclusive to the company. you see people do this on netflix.

potentially, dr. dre could do this with beats music. spotify and pandora has struggled to make a profit and get people to pay for a subscription. that is a big challenge and a relative unknown going forward. >> it is exclusive and i will buy. get the headphones. it is a good experience. the pulse is coming up next. jonathan is in charge of that program. guy, what is it all about? >> i'm talking about this new move by dr. dre. lehman is what one guest describes it as. it is an unoriginal business going to disrupt this. it will cause spotify problems. they are not taking the model

forward enough and changing the business enough. bituple of guys who know a about music will be appearing and they are not impressed with what these two are doing. nevertheless, dr. dre has had a successful business and music career. some of has just listed the great attributes he brings to the table and he puts a positive spin on this. we will investigate all of this at 10:00 london time today you will get the news. tony fernandes is at the formula one factory today and he will talk about india and he will say that he has some pull down. we will be talking about that story. a great story. >> we will catch you later on. here are companies on the move. we talked about profitability targets by two years and that is

the push against software. reachmpany will probably 75% of sales by 2017. that is better than previously projected. analysts had projected that they would miss. the third quarter beer volumes have rose at a slower pace than expected. the organic beer volume rose one percent. clark says that the growth is by emerging markets. coming chinese new year will offer new -- no relief to sales of cognac. the organic sales have plunged 18% through december. welcome kenneth.

she covers consumers. great to have you. you read the statement and you deep ingosh, things are china. it is a vortex. >> absolutely. they have double-digit figures aboute last time, it was 20% and that was quite a hit. the topline line is massively effective in china and it obviously makes different things. it is the biggest source of their revenue and china is one of the biggest markets. >> what is more alarming is the chinese new year. year is muchew more popular and that is not even going to happen. >> exactly.

retailers look towards christmas for a positive thing. saying the chinese new year is not going to happen is a problem. it has really hit cognac. traditional. they will toast each other and wish each other a happy new year with it. not anymore. >> fine cognac. that emerging markets are grounded in good. what is the take away as you read it this morning? is the largest exposure to the emerging markets and gives a lot of investor support to investor markets for growth. we look at the one percent improvement and if you look at africa, they came in below estimates and asia-pacific was up seven percent. latin america is the largest region. >> if they get the operations correct and get the right

product into those markets, the ability to grow is significant. >> absolutely. it is relatively obvious consumer concern in europe. percent andn one they fell five percent. >> we will leave it there. -- beer, beer, cognac, and more beer. >> beer before breakfast. >> it is not all business. we talk about here. goldie hawn is taking some time off between meeting. you can catch her on mental health panels. on the benefits of meditation and the dangers of stress. i should really get to that one. next, for ari and lamborghini.

ari -- ferrari and lamborghini.

>> welcome back to on the move. i am manus cranny. expensive we'll at. us

has a top speed at 12 miles an hour. driving is dangerous and requires skill. our international correspondent reports. but high in the mountains above. davos.-- they reclaim the mountain. than half $1ore million. they groom the slopes until they are smooth again. you work all night. >> the city is parting -- partying and you make it nice for them. sometimes, it is 2:00 or 3:00.

they party until 6:00 in the morning. >> the parties. >> yes. >> the track monsters prepare 200 miles of snow covered feasts every night. it can be dangerous work. >> you go with the mountain and down the hill. and put the plow down sometimes it stops. you watch and tip it over. >> do you ever get lonely up here 16 hours a night? out.u sleep and you go the machine puts snow in your face and you keep going. >> you do that? >> yes. no a call.

after work. >> always. >> no, not always. >> tomorrow, do not miss this. we have the european and francine is traveling today. she will be in for the long haul over these three days of programming out in. close. we have a recap on the biggest market movers and let's bring in caroline hyde and jonathan ferro. who has a better trade? caroline, unilever, you sat down with the ceo. had unilever and they sounded upbeat while saying that they are winning companies and

shares are up. that is the best in six months and it is under the emerging markets. we sought in russia and indonesia. thatwere 75% of the sales was targeted at the emerging markets. we were getting no growth in europe and the americas. it really is focused on emerging markets. poll and, we had a optimism is up. >> is not just the unilever ceo. it is where they think the bubbles are. andthinks it is in internet social media stocks. the other said it was london housing prices. >> we will leave it there. stay with bloomberg television and guy johnson is next.

get a pair of headphones. we leave it there. it is the eve of doorposts. os.dav go to my twitter account. . .

>> we are back. the unilever ceo says confidence is high. remy is no relief for cointreau. china loses its taste for cognac. his musice launches streaming service today. will he find the same success as he found with his headphones? good