lower start. it all has to do with ukraine. john kerry warning that time is running out. we're going to look towards consumer confidence numbers. donald oscar meeting a little bit earlier today. this is going to be the one thing we will watch today over the weekend. investors appeared to be weighing escalating tensions in ukraine. what is the latest? >> president obama will hold a conference call with european leaders according to a senior obama official who says the united states is particularly frustrated with germany and , which official says they impose furthero

sanctions. we have heard from kerry. we have heard suggestions from the same official saying if the u.s. is unable to push the europeans they may impose sanctions unilaterally. >> that will be our top story of the day. you are following a bloomberg exclusive. all about bank of america. >> it looks like the justice department and the united states is looking for $13 billion over litigation issues that go back thehe financial crisis. bottom line is the ceos spend $50 billion dealing with these issues. it's a lot to talk about. >> we have a little bit of corporate news with kerry. in my mind. >> you are close to the ceo. brand.f the beast of the it is eking out gains. that is good news.

you are seeing 30% gains in sales for the first quarter. small, beautiful niche brands. this is about control. they are going to split up the company in terms of designated control in various areas. we will talk to you about who those men are and what their backgrounds are. >> it's a real problem for a lot of them. how do you continue growing when you are so big? amazon is a fascinating story. >> we have had apple beating. we have had facebook as well. sales growth has been matched via expense growth. they are really investing. sales $20 billion. expenses are exactly the same amount. they are pushing into groceries, into phones, into drones. have big picture thinking.

many of the investors believe him. look at the earnings. the earnings.s >> there are a couple of scary things. they will send something to you knowing you will want it. i don't know how that's going to work out. we will have more later in the hour plus a look at microsoft earnings. we have a little bit of corporate. amazon a great story. we have this bloomberg exclusive. >> in the u.k. we see retail sales loathing momentum. -- told a momentum. there is only a set -- building momentum. there is only so much you can deal with. we are going to come down to sentiment. have a look at this. this is dollar yen. would you have is a slight gearshift and the perception of risk in these markets as you go to political negotiation.

will obama put pressure on the europeans to take the next step or what of restrictions they are going to do? overall equity markets are opening lower. they have had a reasonably good week. you are seeing a shift in thinking. equities are declining. kept at stable by s&p. they say the deficit will come back towards three percent by 2017. optimistic. we wait to see. u.k. sales are going to be coming in a little bit later. even though they are making store closures coming in up 1.7%. there are a couple of companies. these guys are going to have to possibly raise some more capital. 5 billion euros.

institutional investors behind the bank have suggested they have done a good job so far but they may need to raise more capital. yuma.mbers beat the sports brand didn't do well. they are breaking the company into different responsibilities. these guys are seeing a dramatic turnaround in terms of demand .evels in europe originally a slight increase in terms of demand. the united dates of america is where the real turnaround is. they expect demand to rise by over four percent. quite a significant turnaround. that's your three for the day. deutsche bank carrying up one and a half percent. back to you. >> thank you so much. joining us for more perspective themes, thearket chief market strategist for the u.k. and europe.

thethe economics editor at bbc. thank you for joining us. there seems to be escalating tensions in ukraine. have a lot of currency swings impacting earnings. because we still have qe across the world it seems everything is ok. are we in a dangerous world? >> of the world where we are trying to get back to normal, but we are not sure what it looks like. we are looking at a global recovery. we were still feeling optimistic about risk assets. we have quantitative easing. we have very loose money. what kind of recovery are we going to see? i think the art sure. i think we see a general move to more synchronized recovery. good growth and places like the u.k.. can this stay the distance?

can it withstand a move to more normal market conditions. i like the people are looking at fundamentals and wondering about earnings rather than being carried on a tide of liquidity. by the numbersed of investors saying they don't know how to read ukrainian tension so i am just going to ignore it. i don't know how to read inflation stories. i'm not going to worry about it. is there a danger of complacency? >> there is a slight risk. the problem with ukraine and russia is you can focus on it for a long time and not come up with a good conclusion as to what is going to happen. i think the americans are always making the assumption in the west that when it came down to it president putin wouldn't do anything that would endanger russia's recovery. so far they haven't been proved right on that. the westutin vouched

wouldn't want to go the distance on sanctions. that has been proven wrong. >> thanks so much for now. ukrainebe talking about and john kerry.

>> welcome back. this is "on the move."

is on thestock that move. one of the biggest gainers in today's trading session. heard from what we the company this is the second-biggest maker of home appliances. they came out with earnings saying they were better than xpected. maybe another sign europe is ticking up. we had a lot of dad doesn't testing this year will see growth. look at that. electro let gaining. lux gaming. tokyo consumer prices gained at the highest pace and 1992. joining us now with more details is them. what did we learn today? cracks we learned the tax hike is having an impact on the tokyo

metropolitan area because the numbers we received cover tokyo and the national figure as well. the national figure is from march, so we are zeroing in on april. consumer prices rising at 2.7% in april. this reflects the impact of the sales tax increase. the pace of inflation was below estimates. our survey saw a 2.8 are sent. -- sought two point eight percent. we need to keep in mind the fact that this national rate came in at 1.3%. that's exactly as expected. with what we saw in recent months. inflation at the national level staying at 1.3%. that suggests japan's efforts to get out of this inflationary

spiral is not necessarily moving forward. remainedprices have stagnant. that will be one of the key issues going forward as the bank of japan evaluating whether to add further stimulus. we have seen a rise since april of 2013. >> thank you so much. us is stephanie, the chief market strategist for the morgand europe and jp asset management. if we focus on economics this is still a great experiment. goodwill we have a indication it is actually working? >> i think the second half of this year is going to be crucial. japan has been one of the many disappointments when people went in with confident views in a story that was so successful last year with japanese equities not doing so well.

i think we are waiting to see the second piece of the puzzle. we have seen the inflation. in the yen has pushed up prices domestically. if you are going to get a self-sustaining recovery you just increase in prices but also higher wages and being more confident about the future. we haven't seen that yet, which is still giving some of us a bit of applause about japan. especially with the sales tax a negative impact on the economy. theing at fundamentals and underlying situation. >> we should be wait and see? >> i think so. you don't know how it's going to pan out. it's interesting with the eurozone because you have the central bank worried about the strength of the euro, not wanting to see the strength of the euro pulling down inflation. one advantage is it has pushed

down household income for the first time. that might start feeding two to the recovery. >> how do you see it? how much does this have to do ith japan, and how much does have to do with the weak dollar? it still doesn't make sense fundamentally. >> there is one issue in the last few years. haveing market economies been taking on the slack of the global recovery, and their currencies have been going up. the rich countries have been trying to depreciate their currency against the emerging market economy. in the last year or so they said, we need to get our competitiveness back. we are starting to worry. all of that's one thing the advanced countries are seeing their currencies pushed up by the need for the emerging market economies to get some more competitiveness back. i think that's a forced the euro

is facing as well. >> the pound, from when until when can the bank of england try to keep interest rates at these levels? is it 2015? i know you argue that a slightly higher pound doesn't have a big effect on the economy. doing it in been the u.k. for a long time, but i at people,ooking speaking to people. they are not that worried about the pound right now because they can see positives. inflation fort the last few years. now we are coming down. if that is being helped by the pound that is giving the bank of england a bit more room to maneuver. i think if they get into the spring of 2015, looking at how strong the numbers are, they will be quite fortunate, but they are hoping to do that. >> thanks for now. we are going to talk about

ukraine. russia has warned the ukraine and now the u.s. warns russia. russian troops build on ukraine's eastern border for military exercises. u.s. secretary of state john kerry says russia still year to comply with the geneva -- russia possibility or to comply with the geneva accord would be a mistake. ryan, let's listen to what secretary kerry said, and i will come back to you with the latest. >> the window to change course is closing. president putin and russia face a choice. if russia chooses the path of the escalation -- deescalation, all of us will welcome it. if russia does not the world will make sure the cost of russia will only grow. earlier today, we are ready to act. understand that gas problem is actually getting

ready for possible u.s. sanctions. >> we understand from u.s. banks in there are two russia that could be included in the next round of sanctions should the sanctions come. gas prom bank is one. that's russia's third-largest lender. a big corporate lender that works with gas prom themselves. , which is russia's development bank. during the financial crisis it was somewhat of a bailout bank the government used to bail out some of the russian oligarchs who got into trouble during the financial crisis. we understand from a treasury official those two banks could be included in another round of sanctions. we understand from the banks themselves they are preparing for that possibility. >> thank you so much.

possible sanctions against russia. we started by talking about the impact of the fed. actually beal banks looking at possible sanctions and keeping the commodities approach because of this? >> we tend to look at the fed as looking around the world and worried. a do focus on what is going to affect the u.s. economy, but they are much more self-centered. they are much more focused internally and people in the rest of the world like to think. when i was working in washington i was a little surprised emma and i learned they are always going to be putting the u.s. first. if you are sitting in the fed trying to see how do we get from what we were just talking about to a real affect on the u.s. economy, it's still very difficult. if you are chancellor merkel in europe, it's a little easier to join those dots together. if you're worried about energy

supplies for a large number of european countries, but even then can you really see where these sanctions are just starting to talk about, how that leads to a major problem for energy in europe, it's not impossible. i think people are thinking about how that could happen and how russia could allow that to sopen given that it's against its own interest. i think they have probably caused a mini recession. the stock market has been hammered. hasof the economic damage been on the russian side. >> and russia being downgraded. if you go a step further, how important is it that the sanctions are to be made by the u.s.? exportshas imports and to russia a lot, and the u.s. is .ulnerable >> i think there is another element, which is chancellor is so conscious of the

geopolitics and russia's approach. quitek it will be interesting to see how the americans try to work with the europeans. they may already have decided they can't do that. >> thank you. it was great to have you on the program. could up, bank of america have a $13 billion bill hanging over its head. break. after the >> welcome back.

the ages.nt for bank of america could be ready to pay out 13 billion dollars to resolve federal and state probes into the sales of mortgage-backed bonds leading up to the financial crisis. jonathan ferro has the details on this exclusive. what exactly have we found out? >> we found out that might be what a are demanding. we have had no comment from either side. bank of america is one of those under investigation by the justice department. all of this with the run up to the financial crisis surrounding bonds backed by home loans. it wasn't good. they find it is piling up. if they do settle, that would be thatp of the 9.5 billion

went to the financial agency, eclipse thing what jpmorgan are made to pay. it's a huge amount of money. thane ceo has been more $50 billion in the financial crisis and actually resolved a lot of these claims. are we close to the end? >> we could be in the next few months. these issues have been going on for six years. the process is just hitting going. to say $15 billion is a huge amount of money. equivalent of 12 month sales at coca-cola. adon't think it's been geopolitical issue. has beenng industry the litigation, and the biggest concern is can it keep getting deeper. >> we will follow these developments very closely. up to speed with

some other companies on the move. the euro gained from global currencies offset higher deal every. the company said fluctuations burden them by more than 400 million euros pushing emerging markets to reduce the dependence on europe. return 5ays they will billion euros to shareholders by 2015 to dividend and share buyback. the french company has sold more than $30 billion of assets in the past year, including the phone unit, in an effort to refocus the company. citigroup chief executive withdrew from an economic forum that vladimir putin is hosting next month. the bank will send other executives in its place. they have more than 50 branches in russia. this comes as the u.s. threatens tougher sanctions to push russia . amazon pours out the cash it spending as fast as it takes

money. is it paying off? we will break down the expenses coming up next. in the meantime, you can follow me on twitter. i'm back in 10 minutes. ♪

welcome back to "on the move." i'm francine lacqua in bloomberg's european headquarters in london. australia lanein has been forced to land in an airport in bali. dolly's police chief has told local media that this flight has been hijacked. bali's police chief has told local media that the flight has been hijacked.

this is an indonesian network. anyill bring you any net -- news as we get it. we are 30 minutes into the trading day. his is a picture for the overall market. watch this hijacking story. it may have an impact on market sentiment. tensions between ukraine and russia, which is put a damper on markets overall. the cac 40, the dax, down 0.40% -- ando point 83% 0.83%. we will talk about that in a

moment. goods, homewhite appliances. europe they say that demand will rise by about three percent from an original guidance of more positive demand. it has a renewable part of the business. weak margins are hitting the stock. they say renewals business has disappointed. those are the three stocks on the move at the moment. manus, thank you so much. john.s. secretary of state kerry says the world is ready to act if russia does not try to de-escalate the situation in eastern ukraine. russia has begun

military exercises along the border of the ukraine. since 1992.st jump prices have been bumped up by sales tax increase in a year of unprecedented stimulus from the bank of japan. u.k. regulators are stepping up scrutiny of how gold prices are set. the so-called london fixing pro process. the watchdog is watching all banks for price setting. let's turn to corporate news and talk tech. 's new ceo doubles down on cloud computing as amazon burns through cash reserves.

let's kick it off with microsoft. there's a new person at the helm and he needs to get it right. >> i think he is getting it right already. 5.6 6 billion dollars for fiscal third-quarter earnings. about going into the cloud. they're doing it well and doing it a lot quicker than many people anticipated. the job and doing exactly what he said he was going to do. all three companies doing exactly what they said they would do. facebook getting more advertising on mobile. what they really do advertisement.re >> they're going to expand

outside web retailing. amazon has a very strong cloud computing element. microsoft provides a lot of cloud computing to apple. amazon is a fascinating story because they have $20 billion in sales last quarter. to $20so spent close billion. they're spending as much as they're getting in. 100 million just dollars. everyone at amazon is betting on future growth. they're making sure it is very slick process when you order. they're looking at delivering groceries. tesco in the u.k. is worried about that. you have the amazon five television. there will be selling a smart television in the future. this is fake, blue sky thinking.

investors are buying it. big, loose guy thinking. thinking.y >> next month i'm just going to send you a note book. >> personally, i'm a little freaked out by the process. the thing about amazon that surprises me is that these investors have such immense faith in the company. i was having a conversation with someone saying come on, this is ridiculous. how do you price world domination? this is a dump in a that is tried to dominate every side of our life. even though it survived the tech bubble, back then it lost 80% of its value.

when the valuation is that high, these are the companies that will get hit, and get hit quite hard. >> you speak to a lot of they are saying that their biggest competitor is amazon. they must really be getting something right. >> they are. your hardware aspect is also fascinating. apple withing on five tv. also, other hardware they're developing is helping preempt what you want to buy. they have something called the --. scan youran you barcode and it goes on your shopping list. they're making it is slicker process. into theay something microphone like chocolate chip cookies. it will recognize it and put it on your shopping list.

have anso lucky i don't eye microphone by my desk. >> if you're making hardware exclusively, amazon are not doing it to make profit, they're doing it is a vessel for the other services. basic,e boil it down to this is just about making life easier? are we just getting lazy or do not have the time? is amazon just making it cheap and easy? >> they want to make the whole process so much easier. to make life that much slicker. alsois a company that is pushing into china. they have a big investment in spain and italy. they believe in the european turnaround as well. thank you so much, guys.

caroline hyde and jonathan ferro. at the problematic brands. ♪

>> welcome back to "on the move." i'm francine lacqua here in london. we are getting some breaking news out of bali, indonesia.

we were understanding that this could've been a hijacking. virgin australia manager now says that the plane has not in hijacked. this is a local network. we will have to be following these developments very closely. this is what we know so far. one of the hijackers has been arrested heard we now understand that this virgin plane was not hijacked. will give you any breaking news that we have. iconic rants like gucci and yves -- manus cranny joined us with the details. key take away? >> it is a relief for investors.

the caringund within ng group isrri underway. ing group is underway. where they have control, things are getting better. the real take away is the niche boutique individualistic brands. laurent are storming ahead. their sales are up 15%. against the gucci numbers. then you begin to understand the direction we are going in. a bit of a relief for investors. something that is still very much in transition. puma is coming in later in the year.

>> talk me through the management changes. who are going to take the key positions? head of luxury is leaving, francine. he's going off to reconsider his career. siloyou have here is creation. by a going to be run 51-year-old italian. much, manus so cranny, with the very latest on kering and luxury goods. we have some breaking news. an exclusive that general electric was looking at heard we haven't

from the french government which is usually concerned with there is a big, foreign company coming to buy one of their most recognized companies. i believe our european business correspondent is on top of this story. m first.t to alsto the board is meeting to discuss a ged deal. >> this is a big decider. said they didtom not know about any approach from ge. it makes the fastest train in the world.

they want an engineering powerhouse. ge looking to spend some of its hoards of cash. we have no confirmation about whether it has been approached. we understand the board is going to meet to discuss this bid coming from ge of $13 billion. also understood that the french government had been in discussions about this deal. we know that some big m&a deals of the past have been scuppered by regulators. not always do u.s. juggernauts get to purchase european ones, but we know that ge is well-liked in france. we talked about the amount of

charm offensive they have been employing inside france. they have been a good corporate our reporters from upstairs have been telling us. it looks like the board will be looking to see if the bid is a good one. yesterday, shares went 11% m. her for alsto >> is actually the biggest acquisition for ge ever if it goes through. let's go back to luxury and ng. somet back to keri of the divisions were a little bit weaker than we were expecting. thank you so much, luca, for joining us. we talked a lot about caring. . what does the

new person need to do when they come in? one, it is to delay the transition of the mega brand, gucci, in this case, from being a cash cow. notng a cash cow, which is growing very much, is an issue. therewpoint is that should be a very clear priority in getting excitement and buzz that gucciucci so becomes center stage. this is a major brand. ideas, new products could do well to bring the gucci brand back to higher growth. they do not have further major opportunities to expand their retail network.

>> the ideal situation is that they want to give more autonomy to the individual brands. they want to grow the smaller brands. has to be recognized as the champion in growing smaller brands. if you think about that, all the brands, excluding gucci, were providing one percent of group profits. toer, they provided close one third. this track record is far and above other luxury goods groups. have their shares of issues. we think the organization should be supportive of this dynamics and getting more synergies to the smaller brands so they can continue to produce value. these are the two major challenges.

they must continue to transform? brands into stars. >> it seems there are more into sports wear. i was quite surprised when i heard the ceos say this. >> i would get very concerned about that. i think investors would possibly share that view. g has to showkerin that it can create value through puma. is a very difficult category. puma is significantly smaller nike.didas and it has now become mainstream. puma struggles in a market dominated by giants, also to some extent by local players.

you have five local companies in china and of them. i would certainly think that footng puma on the right is far more important than adding with mna to other divisions. &a to othernd divisions. >> we have a busy morning today. what a cycle to deal with today. this is a story that bloomberg has been out in front of, and we are very much still there. we're going to talk about what is happening between ge and update you onll what is happening in the ukraine and what is going on there. we will focus on that third we are also going to have a focus on france as well, not just the

alstom story. today we are going to have props. you know what i am talking about. >> i know they are edible. i know they are dangerous for me. >> we're doing cakes today. >> they're not any cakes, they -- high-end petit surrey isserie cakes which are a weakness for me. we will be back shortly. ♪

>> welcome back to "on the move." i'm francine lacqua here in london. here's the latest on that incident of the version australia flight from brisbane. they're saying it was not a hijack at all. forere is what a spokesman virgin australia tells us. this was virgin australia flight the mainrisbane to international airport in bali. all passengers are safe on the ground. is that anknow unruly passenger caused a disturbance on the flight. virgin is not saying exactly

what happened, however, indonesian police speaking with metro tv in indonesia have said that a drunk passenger tried to force his or her way into the it. the passenger has been arrested by indonesian police. passengers and crew were detained on the grounds. the virgin airport -- the virgin airplane manager says the plane was not hijacked as was originally reported by metro television in indonesia. it looks like all's well that ends well harry at certainly, a frightening few moments for passengers aboard flight 41. the good news, it is safe on the ground in bali. this brings up so many questions about security and how a drunken passenger could even have gotten access to the it. -- to the cockpit. guy johnson and i will be back with the pulse after the break.

we will have full coverage of the alstom deal with ge. ♪ . .

--russia praised the place pays the price for its actions in ukraine. class for the internet, america and europe move in different directions on net neutrality. >> alstom is set to meet today to discuss a deal with ge. welcome. you are watching "the pulse." i am guy johnson. >> i am francine lacqua. this is our top