>> that is what shutter the market this time last year. a bit of a reprieve last quarter. that is helping the stock. g profits, producin centers is always good news. we will talk about what is going on in china later on. some fascinating demographics. -4% higher, let's see how it performs. a lot of people buying those bag. do you by any? >> it is not thanks to me. >> revenue better than expected as well. 2.5 million customers have signed up for bt sport. we will talk about that later. >> bt was very good. hans, you are watching amazon. they missed estimates, but their income for the year, they

actually had a profit. $274 million last year. down $39 million and the market punish them. there is concern that revenue growth just is not fast enough. thanks so much. we have plenty of corporate news to talk about. and caroline, finally, microsoft, we think we may have a name for the new ceo. >> five months they have been searching and it is likely to be the insider, satya nadella. he is gentlemanly, interesting, engaging. but he is not going to get on stage like steve ballmer and start shouting and sweating profusely. he is a little bit more range and then that. he knows the business and he is spearheading the growth of the business. gates be leaving as chairman? that is what we are now hearing. he could be replaced by john thompson, who has been leading the search for the ceo. a lot going on at microsoft.

chiefave only had two executives. satya nadella would be a third. >> what else are we watching? abouthave talked emerging-market routes. now we have the numbers. out of exchange traded funds in the month of january. that is the single biggest month of exodus of money from etf's since 2005. mobius says that the ride will and and people will return. employment andn chicago purchasing managers, we will have you -- we will have that for you later today. that in mind, we look to see whether the equity markets in europe can get any kind of reprieve from the battering they have had. and they have. the heart of europe is rising. things are looking a little bit better. i want to frame the month for

you. it makes for interesting reading. u.k. lost over three percent of its value. paris lost just under three percent. a record high and decline by nearly two percent. in the month of january, it was down in the periphery in italy and in spain. banks were the best performers. where did they perform the best? down here. italy and spain. spain took the prize the most. record low issuance in bond yields. that makes the whole temperature better for the balance sheets within the spanish equation. the under. some tortured souls out there. sab miller, randy cointreau -- remy cointreau. bang, we are back on form. of their core business, fashion and leather. asia doing quite nicely. the transition to non-stamped

lvmh bags has begun. it is playing through. bt signed over 2.5 million sports customers, trying for the sky. say things will be grand in the united states of america. europe will grow. but they missed their numbers because europe is low. trough it is down by 23%. that is the state of play as we go into friday. this is the dollar index. it has been the best january since 2010. westpac has a group of surprise index is a look at. -- indexes they look at. growth, earnings, and profit. will that trunk taper and the fiscal debate in the united states of america? right now, the market says yes. lex manus cranny with the latest on the markets. our next guest favors developed

market equities in the u.s. and japan. for more, let's welcome the head of the london investment office at julian's. i want to get your take on the emerging markets. we had an interview with the indian central bank governor and he says there is a danger of central bank down -- central breakdown. >> there is a danger of some breakdown. what you have seen in the last two weeks has been quite a while in the making. bit of a catalyst to get investors to focus on the issues. a central banker points at something structural tells you that this is not something that is going to go away in another week or two. >> just a month ago, when you and asked what is your main concern, they said emerging markets, it is going to be bumpy, but it will go ahead.

are there investment opportunities in some countries? >> one has to be careful. you look at vulnerabilities and avoid those. >> good countries and currencies. >> the ones with weaker currencies tend to have the worst positions on their balances. domestic countries tend to have been overinflated by two low cost of capital. low cost of capital. go for the regions where the balances are safe. north asia might be better than last time or emerging europe. >> is this the right time to invest or are you waiting a little bit? >> we are waiting. it depends on your risk appetite. >> which is why you still like the developed equities, especially in the u.s. >> quite right. >> and you are buying particularly the industry groups? seen somewhat away

from the areas that have become expensive. the ones they give you a direct exposure to growth. >> anything europe? >> probably the same. it is a little bit behind in terms of where we see the growth coming at the macro level. months, as much as that. in terms of execution, we have spoke about the banks. again, a bit of caution. as the growth comes through, the same thing should apply. generatorsive income to a more -- >> especially if it continues as we are seeing now. >> if the growth keeps coming through, you should see the headline growth topline. if it starts coming through, that is your signal. he stays with us and we will talk with him more about

specific industry groups next. here is a look at what s -- at what else is coming up on "on the move." at microsoft. it may be close to naming a new ceo. details next. ♪

>> welcome back. i am francine lacqua here in london. this is "on the move." on the the stock that is

move. it is lvmh and it is gaining some six percent. this is the world's largest luxury goods maker. fashion wasth in apparent in the fourth quarter. fromt boost of optimism investors who were worried about luxury brands. you can see the stock benefiting from that, gaining 6%. earnings beatrter estimates as more customers signed up for broadband. jonathan ferro has the latest. have still gotten pay for the broadband, but some punchy numbers from bt this morning. earnings better-than-expected, revenue as well. and a big one, you cannot talk aboutbt without talking sports. the customer base has now passed 2.5 billion -- 2.5 million. this company has massive conditions in this phase.

the question is, what next? for a lot of people, what matters is an event that could happen at some point in the next year. the next round of merely auctions. ierof are merely -- prem league auctions. since 1992, we have gone from 38 560ion pounds a season to million. the big question is how far these two companies will go to get that golden ticket. >> what is sky doing to counter bt's push to sports? >> the sports side is making all the noise. bt is pushing into sky territory. sky is pushing back into theirs. they're getting customers to sign up to broadband, telephone, and mobile. guess who they are comfy with? vodafone. they are offering contracts with sky sports, possibly free on your mobile.

the question is, could this tie up the a little more formal? dumping a lot of people are talking about, a bit of a buzz. so much.you it is certainly one of the big success stories that we are expecting for 2014. still with us is head of the london investment investment office at julius baer. what is your take? we had a lot of earnings today. it seems a lot of them are surprising to the upside. margins are under pressure. you are just not in the right niche and it is a tough world out there. >> that is right. there are two things for this year. one is the cross correlations between stock starting to come down, trade starting to does new -- to dilute. into 2014, headline growth of expansion of sales could be more important than eps.

companies could find themselves cheaper. other balance sheet exercises. headline earnings were a bit on the modest side. you saw the market re-rate without earnings come through. this year, we want to see the numbers. this is why you could start to see companies meet the numbers from a price point of you. amazon was an example of that. the figuresok at and earnings, certain investors say, i want to pay a premium. these companies have potential to grow. saying, by the companies or the industry groups that are laggards in 2013. where do you stand? >> the laggards are fairly valued and some are quite cheap. they have to demonstrate that they have the ability to deliver. luxury were some examples of those. you have to make up your mind whether you pay for the certainty or bank on growth.

at some point before the summer, we will have a better sense of where that inflection is. right now, i would suggest to stick with quality for a while but look to do a rotation later. >> are you concerned that quality stocks are so linked to emerging markets? that is all the ceos have been talking about. i am going to be big in asia and these growing markets. now the disaster is hitting. >> some of them have very big exposure to these markets. i think it is a little bit premature to get pessimistic about your ability to ask for into some of the asian markets. perhaps not nearly as volatile as some other ones. it does bear watching, especially where some of the valuations are. >> you like japanese stocks. how much can they fight the fed? >> the japanese have got their own fed. they are printing with an effort to move the policy towards a growth-friendly outlook and to

weaken the currency. the market printing that is happening is undermining the yen. that has had a big impact on earnings in 2013. you need a reversal before 2014 becomes any less optimistic. perhaps not that gung ho, but there is still some momentum. >> give me your best headline for 2014. is it the year where japan is going to make it or china is going to struggle? >> the chinese story is one of longer-term restructure. they become less of an issue in the sense that people are going to have to adjust lower their expectations for china. nothing dramatic, but it has to come lower. japan, our view is that they will break the cycle of deflation. slightly more gradually. to not expect plus 45 that we saw last year, but i think it

becomes more sustainable as a result of the policy changes taking effect. >> thank you very much. up next, we are talking tech. amazon sales rise 20%. so did operating costs. is the world's largest internet retailer worth its high valuation? that is a question we will be asking next. and microsoft's ceo search may be over. satya nadella is said to edge out the competition. details next. ♪

>> welcome back to "on the move ." i am francine lacqua here in london. here are some companies on the move could the family that controls peugeot is said to them greeted sell shares to dongfang. support of the plan is crucial because they control more than 25% of the company's capital. goldman sachs boosted chief findsive lance blank bonus for his work last year. his bonus and salary adds up to dream million dollars more than jpmorgan paid its ceo, jamie dimon. he was the highest-paid bank chief for 2012. and yahoo! reports a security incident. effortntly identified an to break into some users yahoo!

mail accounts. and passwordsmes was likely taken from third-party database and there is no evidence that data was actually stolen. amazon poststech, a 20% gain in sales, but it is the slowest quarter and growth since 2009. at the moment, the world's largest internet retailer is valued at 90 -- 90 times more than the s&p 500 average. hans nichols has more. it is a pretty frothy valuation. >> that is what investors saw last night when they finally saw -- you know, revenue growth was at 20%. income was up. the first time they turned a profit in three quarters. the first full year they have had a prophet in quite some time. yet investors punished it. the stock was down 13% in after-hours trading. then it ended up down about five percent. here is the issue. yes, income is up and they are

turning a profit. their growth model does not seem to be as explosive as it had been in the past. that is giving investors a little bit of pause on this stock. they also have a question on the delivery model. 2-day prime, $79, you get delivery no matter what. they had all of the problems with ups over the holiday season. some christmas packages arrived after the holiday. they are thinking about upping amazon prime as high as $40 more , may be a 50% increase. they are struggling with some of the other problems that retailers have been struggling with for some time, cost, shipping cost, and fuel costs. where their margins are and just how wide they are, if their growth comes back down to earth, it is unclear for investors. >> it is very unclear. what about the currency impact?

we have talked a lot about how currency affect these companies. how did it affect amazon? >> amazon was heard again on currency. they had some $278 million loss on that. they thought it would be in the mid-$100 million range. their growth in europe is not as good as the state. if they are overly reliant on the states, they are going to get hammered by currency. it is another aspect of the story that we have been talking about now for a couple of months. how do you hedge against currency fluctuations? it will be a bigger story if the taper continues to add volatility. >> thank you so much. on par with hedging, you have to make sure that you hedge in the right way. hans nichols with the latest on amazon. microsoft's search for a chief executive may soon be over. the board is said to be preparing to make satya nadella the new ceo. here with more is caroline hyde. you met him last december, great

interview. what was he like? >> he was a gentleman. he was engaging. he was interested and interesting. he is quite different than steve ballmer. he will not be leaving up on stage, streaming with sweat developing across his brow. he is slightly more calm when it comes to pr. internally, he is highly-respected. he will be the third ever chief executive in the whole of the microsoft dynasty. they have been operating since 1975, founded by bill gates. there moreas been than half the time, since 1992. it is cloud services which is a beacon of growth. driver ofit to be a growth as it tries to renegotiate where it lives within the new technology world. pc's are falling. we are seeing new growth in terms of cloud computing. he has doubled sales their last quarter.

he says microsoft is a really inspiring place to work. >> microsoft is an exciting place to be right now. if you look broadly at what they and what we are doing in the cloud computing, it is an amazing spot to be in, both innovating and taking to market and having broad impact across society at large. innovating, showing an --a where sale doubled in and since 2011, he has managed to drive sales up 22%. if we finally get a name, it would be a relief for everyone. bill gates has not been ceo since 2000, but he has been chairman. now there is rumor that he may step down. really is the man who part of the institution, the very backbone of microsoft. is focused on

philanthropy as well. he told us just this month when he had an interview with betty liu and michael bloomberg that he is focused on philanthropy. >> my full-time work will be the foundation for the rest of my life. i enjoy that and i get to do it in depth. i am not going to change that. i will help out part-time. >> this would be big news if he steps down as chairman. the person who might be taking over, it is john thompson. he is on the board and has been spearheading the search for the new chief executive. what is interesting to investors is this guy does not hold his tongue. he has a reputation and has driven sales at a company he two $6 billion. that was called symantec. he also has experience in asking hard questions. he asked steve ballmer to step

down in august to find a new executive. >> interesting. something that we have to keep on top of. after the break, andrew wilson of goldman sachs joins us to discuss china, emerging markets, and bernanke. ♪

>> welcome back to "on the move ." i am francine lacqua have bloomberg european headquarters in london. we are 30 minutes into the trading day. let's see how things are shaping up. this is the picture for the markets. we are seeing a small reversal. overall, these indices are pretty much unchanged. the dax is slightly lower. equities overall are heading for the worst start to the year since 2010. we did have a strong rally last year, but nothing to worry about. investors also waiting for reports on euro area

unemployment and u.s. consumer sentiment a little bit later on. this is the talk on the currencies. euro-dollar is probably the one where we want to watch out for. the dollar heading for its best january since 2000 and. -- since 2010. this is ahead of the data forecasted to show that americans increased spending. watch out for the emerging markets. theill continue conversation very shortly about what the emerging markets can do from here and what it means for currencies. these are the top headlines. japan's inflation accelerated in december, bringing the rate closer to the central banks 2% target. that was higher than the median estimate surveyed by bloomberg. probably inflation remained below half of the ecb's target in january. economists estimate that the isual rate rose 2.9%, which

straight reading below one percent. this adds the case for policymakers to cut rates during next week's ecb meeting. india's central bank governor is warning of a breakdown in global policy coordination. he made those comments in an interview with bloomberg tv india. >> international monetary cooperation has roque and down. industrial countries have to play a part in restoring that and they cannot wash their hands we need we will do what to, you do the adjustment. >> the indian central bank raised interest rates this week along with the central banks of turkey and south africa. joining me now for his thoughts on emerging markets, the fed, and the current earnings season is andrew wilson. he is ceo at goldman sachs asset management emea.

suddenly, it is all we are focusing on again. opportunities for investors or do you want to wait a couple of months? backdrop for emerging markets has been very favorable the last few years. high commodity prices, a lot of ecb that hasthe provided a favorable backdrop. we are getting into the phase where the fed is withdrawing that liquidity. that favorable backdrop does not exist. for us now, the question is not trading -- treating emerging heterogeneous asset class, but where are the -- the opportunities? us, it is creating some opportunities. you cannot look at a single asset class and say we like them all. we do not like them. it is time to do more in-depth

analysis and understand what the drivers are, looking specifically at the countries that are more susceptible to this lack of liquidity, those running the current account deficits. those whose financial positions are sound. you pick the country that you like? is it because of the structural reforms that they put through or is it the central bank that has the firepower to try to fight the fed? >> it is hard to fight the fed. you look at those countries that are well-placed, more positioned for u.s. growth. we will touch on it, but we are more concerned about the outlook for china over the next two or three years. we have been very optimistic on the u.s. and those countries that are geared into the u.s. economic story. mexico, for example. great reforms are taking place in the labor market. obviously, they have proximity to the u.s., which is helpful.

the opening up of the oil market. these are positive things. those countries are well-placed. others are more geared for chinese growth. something like korea, it will be a more challenging time for them. >> what are your three favorite countries to invest in and do you buy currencies, bonds, or equities? >> we focus on all of those asset classes. particularly in the rate and affect space, we like latin american, the mexican peso. ,e are more cautious on brazil but we have something like the rate story. they have very high real rates in particular. those are the markets we like as well. ande go through the asian eastern european countries, we are a little more cautious on , very places like hungary large debt levels and a lot of reliance on foreign capital. very slow growth. those countries, we are more cautious of. >> what is your take on the fed?

some are saying of course the fed needs to do policy for the u.s., but it should look more to the outside world, which is why maybe they have stanley fischer. is the trajectory clear? we are going to gradual tapering. >> the tapering story will play out through this year. improves, it is possible that the $10 billion per could turn into 15 or 20. we think they will be finished in september or october. 2015, theyll into will monitor how the economy is doing. we saw the gdp numbers out yesterday. again, they were strong. he had this kind of momentum in the u.s. it is possible that rate hikes ofe part in the early part

2015. >> you said you liked a lot of the u.s. equities. has anything changed? >> we have not changed. it is based on the fact that the u.s. economy continues to do well. it is outperforming. he has seen that in the currency markets as well. the dollar has performed very well. it is up more than anything this year except the yen. it is based on the solid momentum in the economy. we are sticking with that story. >> one of the things we discussed a lot in douglas -- in davos was complacency. you have been more cautious on europe. what exactly concerns you? is it the fact that we may see more extremist parties coming into play? and that the eurozone crisis may reemerge? caution is the fact that ultimately, they need to have more growth. we still have very modest growth. our own expectations for this year, 1% growth across the eurozone. you have got to contrast that

with the u.s., running at 3%. there is still a greater fragility to the european economy. the debt levels are very high and it will take time to bring that down. you look at places like spain and ireland, the current account there. there are some signs that things are moving in the right direction. on a fragile recovery path. >> thank you so much for now. andrew wilson stays with us and we will be talking about earnings and china next. puts fashionmh first and it pays off. how they are driving growth at the world's largest luxury growth maker. that is coming up next. ♪

>> i am francine lacqua in london. this is "on the move" on bloomberg television and streaming live on bloomberg.com, your tablet, your phone, and any windows phone as well. still with us is andrew wilson. thank you so much for sticking around. before the break, we were talking about opportunities in equities, the u.s. as well.

the general sentiment is things are stable in the u.s. you are still a little bit cautious about europe. what are earnings telling us? , we have had. about half of the earnings and we are seeing about a 4% beat. quite a bit of a dispersion across different companies. expectations, performance is strong. if you missed, you are getting penalized by the markets. there is more differentiation taking place. clients, some particularly if you look at the tech sector, at&t, we have been talking about this capital expenditure boom or a pickup in the u.s. for some time. it has not really materialized. maybe we are seeing signs that companies are starting to invest. activity being&a rewarded by the market. that is a little bit of a turnaround. to us, a positive sign that markets are starting to pay dividends to companies that are

willing to invest and conduct mergers and acquisitions. europe, a little more cautious. european companies are more exposed to emerging markets. about one third of the revenues from european companies come from emerging markets. of course, markets there, given what has been going on, there is a little bit more caution around the european earnings season. ofis in the new telling sign getting better? equities, we had so much liquidity, difficult to read into it. once we see more m&a and spending going on, is that when you think we are definitely on a solid path? in thee think about it, u.s., you have the reduction of fiscal tightening. 2013, a small amount of tightening. that is positive. still very positive on the housing market and the consumer and the effect it has on the jobs market. thathird link for us is

capital expenditure increase. yes, i think that will be a sign that the economy gathers more momentum. we have talked about 3% growth in 2014. there is a chance it is higher than that. positive.s are >> we talked about emerging markets but left china out. are we going to see a lot more volatility in china? this is something that we touched on last time. i was also filtering through earnings and companies have to deal with the kind of fallout. exactly who is buying what? is the biggest emerging market, clearly. it dominates what we think about. it is clear that there has got to be some credit contraction in china. we are going to see some reduction. wealth management products hitting headlines. we think the fallout from that is a tightening of credit conditions. ultimately, that leads to software growth. we think growth will be somewhere between 7%-7.5%.

over the next two or three years, we have got to get china to a position where that growth is more sustainable and not just driven by investment, but driven by consumption. the credit tightening that we think is going to take place will undoubtedly result in softer growth. if you are exposed to china, and it is true for a lot of the asian countries, it is much tougher going. >> thank you so much for being with us this morning. andrew wilson, the ceo of goldman sachs asset management for emea. "the pulse" is coming up 15 minutes from now. we have a lot to talk about. super bowl, drones, france. >> and you link all that with a bit of pub politics. david cameron, francois hollande in a pub talking about the defense of the realm. what could go wrong?

we will talk about that a little bit later. these two will be meeting to talk about what is going on in the defense world and then they will be moving onto a public house very near the constituency home of david cameron. we will be covering all of that. then we will move into the tech story aggressively. google, amazon, what is going on there? these companies investing aggressively in new technology. we will discuss the implications of all of that for the tech world. cannot ignore microsoft today. it looks like it has found its head in the cloud. the boss of the cloud in microsoft could be the business of the whole thing soon. caroline hyde is covering that story for us. and it is super bowl sunday. how can we ignore it? and how do you build an ad campaign if you do not want to s to put a-buck primetime slot into the super bowl? we will have a pitch for you. >> i am looking forward to that. i am also very excited about

david cameron bringing francois hollande to a pub. i'm sure that will be a first for the president. in the meantime, here are some companies "on the move." microsoft is said to be preparing satya nadella to be chief executive. he has been with the company for more than a decade and leads the enterprising cloud divisions. my caps off is said to be replacing founder bill gates as chairman. zynga shares surged as much as 24% in extended trading yesterday. this after the game maker said it is cutting 15% of staff and spending more than $500 million on the u.k.-based mobile developer natural motion. the company's chief executive defected to microsoft last year, focusing on games for mobile devices. volkswagen is said to be trying to hire a former dimer board member -- daimler board member to take charge of their truck business and has offered him a

substantial budget to bring in new people. eterana 25-year daimler v and a candidate for ceo. the world's largest maker of luxury goods reported a very strong set of fourth-quarter sales. lvmh saw a rebound, capping the week with a next bag of results for luxury goods makers. here with more is manus cranny. they did well today. >> they did. you look at all the business divisions, fashion and leather, that is a big beast for them. the stock is up the most in four years. cosmetics, double-digit growth. you look at the numbers. this is trying to turn away from those heavy-branded lvmh bags. non-monogrammed bags. to all of thef other stocks in the industry groups.

looks as if there is a little bit of a turn. >> china is fascinating. the chinese demographics are changing. a lot of them are not in the big cities and sales in smaller cities, even though they are bigger than london, and a lot more women are buying. >> this is a fascinating story. i really did not know this. i was reading into it. in 1995, most expensive goods were what by men. girl power is phenomenal in china. you are seeing independent women with their own income. the gifting phenomenon is not dissipating. it is over for now. women will replace that gifting process. female, fashion addicts and fashion forward. it is a $19 billion market and those girls are shoppers. they want it now and they want lower-margin product. you still keep the bags and the shoes over in europe. nip on theke a

margin, but those girls like to shop. >> there is something about buying your own stuff. the superrich have everything now. what they want is experience instead of goods. >> the superrich spend 1.8 trillion pounds. anybody can have things. but to buy an experience is something really unique. chat is what the uber-ri really want. gourmet dining, swimming with sharks, flying in planes. they are no longer preoccupied about having. they are preoccupied about being. i amnot know whether preoccupied. i am still in the preoccupied phase about having. i worry about living my life. >> manus cranny with the latest on the luxury world. losing some of its shine as china clamps down

on luxury spending. their biggest exhibit ever. final thoughts with our markets team is coming up next. ♪

>> welcome back to "on the move ." i am francine lacqua in london. it is the largest display dedicated to the famous french jeweler cartier.

paris through february 16 and shows off some of their most famous jeweled donned by royalty. bloomberg took it to a. by katetro was warned middleton at her wedding with prince william. duket in 1936 by the then of york, it is just one piece of royal jewelry on disk i -- on display at the exhibition in paris, which also includes this flower brooch, one of queen elizabeth's favorites. >> we are very proud to have this from the royal collection. >> you have to be rich like a royal to afford one of these sparkling tiaras. cartier quickly landed the nickname the jeweler to the king. worths estimated to be around $50 million. be on blinding emeralds and willires and rubies, you

find clocks, watches, and paintings. cartier was very inspired and it is the incarnation of style and french eclecticism. attracted american personalities from grace kelly to live taylor, who once received a $1 million necklace from her third husband. cartier's more recent business may be losing some of its sparkle. the company missed estimates due to currency swings and a decline in luxury sales to china. >> very nice. let's check in with our european business correspondent, caroline hyde, on microsoft. in terms of market sentiment, pretty much unchanged. the big story of the day, we may now have a name, who you

interviewed exclusively in december. >> satya nadella may be exclusively taking the reins as ceo. what does it say about him if they had to look at more than 100 candidates? does it cast a little bit of concern that they were not as inspired by the internal candidates? ericsson ceo, steven e lop of nokia, but having spoken to him, he is so impressive and engaging. he is such a gentleman. myself at refreshing some of the dance moves of steve ballmer. he is shouting and sweating profusely. that is not what satya nadella is going to do. it will be a big change. of course, bill gates could step down as chairman as well. >> or he may dance on stage. we will see. knows? >> thank you so much. stay with bloomberg tv. guy johnson and i are back with

"the pulse," coming up next. ♪

>> pub politics. prime minister camera and president hollande seek closer ties, including a deal on romans. then they will discuss britain's place in the eu. >> microsoft find its head in the clouds. the tech giant prepares to make satya nadella ceo and bill gates could be out as chairman. broadbandgs in more customers with his free scores channel. good morning, everybody. you are watching "the pulse."