you mention these levels to people and they say, one is the correction? -- when is the correction? what is going to turn this around? i don't know. >> healthy market, a healthy turnaround in the u.k. outlook,he advertising that picture that itv is painting. sales up about two percent. the second quarter is for the glut of growth will come from. they expect advertising sales to rise 12%. there is concern, what about the second half? >> if you have a look at itv stock, maybe that is what the market is telling us. there is a bit of concern after the world cup.

>> they are trying to diversify themselves and sell content. kb--- b-sky-b happens to be the second-biggest shareholder. >> let's see how that plays out. let's cross live to berlin. sap having -- they will be cutting jobs. >> remember, this is the world's biggest management software company. bill mcdermott takes over as the sole chief executive next week. the company confirmed there will be thousands of job cuts right across the business. this will provide more good software online. the chief development officer says the software should become more like lego. i will be back later to explain

what he is talking about. >> looking forward to that report. it is a big day in terms of the inflation report in the u.k. and the world is watching. >> you have the bank of england trying to push back against expectations. unemployment is below seven percent. wages have started to turn the corner. the more that accelerates, the harder it will get for the bank of england to justify keeping rates at record those. we know there is a division over how much slack is left in the economy. the slack -- >> what is going to drive the rest of the market? >> euphoria.

sit tight in the u.k. and europe ahead of the inflation report. what happens from here? there have been seven major tightening cycles in the u.s. since 1970. is that enough to temper expectations of a bigger foot forward on the s&p 500? we talk about the euro. let's talk about the pound. labor market data. inflation report. see pushey speaks, to back against expectations of a rate rise? he may not do that. the pound could well go higher. >> let's keep an eye on those markets. investors will be all ears to what governor carney has to say a little bit later this morning.

j.p. morgan asset management joined us and she sounded up -- she summed it up. >> the bank of england may well be the first major central bank to raise interest rates. >> joining us now for his take is the global head of equity trading strategy over at citigroup. stephanie was saying the whole world will be looking at what carney does. we are on a divergent path in terms of where central banks are. how important is today? it should be important. he started by talking about -- today will be a good opportunity for him to backtrack from that a little bit. he is putting it on the table to make the market more comfortable with it.

but look att avoid dollar-sterling and euros-sterling. they are racing ahead. it is what threatens the bank of england the most. .> the market needs to price in floating.ns have been >> that is quite aggressive. >> at the same time, we have to keep in mind is the reason they can do that is because things are doing better. the u.s. did not put a date on right increases. just mentioning tapering did not derail it. he did get the ecb, which likely will announce more aggressive measures between june and the end of the year. you are still getting liquidity

in the world, just in the places where you need it. and my being to -- and my being overly trite? being bullish on stocks doesn't just come from liquidity. were against the backdrop of economic weakness. a weaker financial system. will be against the backdrop of increasing activity. from an equity point of view, you do have increasing growth on a global basis, albeit not fantastic. mergers in and day -- and acquisitions coming back into play.

valuations are not stretched and equities aren't interesting asset class. -- r and interesting asset class. taking more of a position battling for more of the investors money versus the united states and the u.k.. is that being overly optimistic about europe? started -- they have increased in the last 12 months. -- forlook back further a long time, europe had no interest whatsoever. are we seeing something which is exuberant yet? i do not think so. it is a normalization of the last five years. >> you are going to stay with me. round two coming up.

it is a grilling that will not be missed. it is pfizer with astrazeneca talking about the science of the potential deal. ♪

>> this is "on the move"

streaming online, on your phone, on apple tv. here is one stock that is on the move. itv is one of the biggest losers on one of the -- one of the biggest losers on the stoxx 600. it is all about the guidance going into the second half of the year after the world cup. the world cup is going to play through. it is a mixed bag of results according to ubs. high expectations. advertising growth below estimates. here with a little bit more is caroline hyde. i just mentioned ubs. what is your take? >> i do not think it deserves to be the worst performer. it is lacking the blowout numbers. many are pinning many hopes on the world cup. this is a company that is going to have 32 exclusive live games

of the world cup. they are sharing with the bbc, the coverage. the world cup brought in 47 million viewers for itv. many thought this would lori and -- lure in the advertisers. not blowout enough, so say many. maybe the market got to euphoric ahead of the itv numbers. >> thank you for that. head of trading strategy over at citigroup. before he went to the break, we were touching on europe and the conversations with various investors. what is your view? what is european qe? the way our economist have

been describing it is a three-step approach. the first one is to lower rates. the second is to ease credit conditions because negative rates on the deposit side may have some compositions -- consequences on the repo market. the last up is what everybody is waiting for. large-scale asset purchases. >> rate cuts, negative deposit rates, potentially at the next meeting? >> we are calling for june. you will not get the full package in june. you are quite likely to get a rate cut in september. securitiest backed is where they want to focus. >> they cannot do scale. able.ough inventory to be

it is going to help the banks and kickstart the market. one of the big differences between the u.s. and europe is about 50% of nonfinancial corporate are funded by the banks in europe. it is only 20% in the united states. they need to work with the banks, not around the banks. >> we have some of the bank names. you like financials and you like financials in the european periphery. whicht we like, anything look at whereu you get the most leverage in the context of qe, it will be a periphery. the periphery banks -- earnings, momentum.

>> we just get over the hump of the asset quality and stress test. >> we are not likely to hear a huge announcement at the june meeting. -- that will be a nice roadmap to start easing conditions. we will cross over to david tweed in berlin and have a quick chat about sap. we have had some of the top lines on this. this is preparedness for a new world at sap, isn't it? >> one of the reasons why you see the share price is down 10%, pretty much unchanged at the moment, because people are waiting to see after bill mcdermott takes over. the american takes over as the ceo. what we have had confirmed from the company is there will be

thousands of job cuts. we do not know how many thousands of job cuts, but that is significant because it is the first time since 2009 that we see sap shedding jobs all across business units. it is a sign of what is happening within the company and that is a shift to the cloud-based services. they will be selling more of their product online. they have also got this new head who hasct development just been thrust into the position. he had something quite interesting to say yesterday. they want the software to become more like lego so the customers can choose whatever they need rather than having some great -- a-- some great big market is holding back before it decides whether it will vote on these changes. you know a thing or two about

lego. when you read about that ambition, what are you thinking? the very interesting thing about lego, when it lost its way 10 years ago, ignorantly went bankrupt. -- it nearly went bankrupt. it went right back to its roots. it's absolute focus on their product. sap also focusing on what it is about their product and making can buy thelients parts of their product they need and not have to take on this great take monoliths. -- this great big monoliths. i want to get your -- we have a story this morning about china. -- i amand citigroup

not trying to stress you out -- where do you think we go from here? >> the targets we have been mentioning our 12 month target so we have another seven months to catch up. we have been wrong as an industry. for the last four or five months, it has not turned out to be the case. the reasons we made a bullish call on china, the variations a huge amount of the bad news. the new premier was putting in place required to be able to slow growth. -- to spur growth. cranking down on corruption. he made a significant announcement on the banks and the bank capitalization recaps.

law, you cannot issue capital. you are stuck in this vicious circle. your capital does not get any better. they change that about two months ago. the banks are allowed to start issuing preferred shares. that was pretty big news. that corresponds with the end of the significant underperformance in china. from a positioning point of view, it is as uncrowded as it gets at the moment. you have had no interest from clients, no appetite to buy into china. on a medium-term basis, we are bullish on china.

they take a lot of the boxes of the maddux we like. -- that we like. they are producing a high cash flow. the sector does not yield as much as some of the higher-yielding sectors, some of the names are yielding quite high. rates are most likely going to convert lower and dividend yields will become that much more interesting. they are helping themselves as well. they're trying to see what they can dispose of. earningsetting momentum and capital returns. you are getting a lower correlation to china. miners were highly correlated. to the tune of about 70%. that is now at 50. all of that together added to

the positioning. >> that sounds like a convincing argument. great to have you with us this morning. we will put you on the spot in a months time. thank you. coming up, deal or no deal? that is the multibillion-dollar question for astrazeneca and pfizer. it is day 2 of the grilling. ♪

skype, peoplerom love to use your service. if you don't try to innovate, that is a big challenge. cofounders skype's speaking with me about the troubles he sees in store for twitter. now is -- we will talk pfizer and astrazeneca this morning. the ceolans to face -- plans to face another parliamentary hearing this morning. we are joined by a bloomberg news reporter.

back at somelooked of the comments from this committee. grandstanding, calling them a leopard that won't change its spots. will the committee be a little more educated? questions being asked and him not being able to answer with any definite commitments. he was not able to give any more assurances than those he had laid out in the offer. with r&d.

>> the big issue and the one issue that you can't lawmakers have been talking about is jobs and r&d and we are likely to see more of the same, then asking questions. we cannot really give you assurances on this because they are the company that is being brought. right, i havee is a fiduciary duty. what is the market telling you in regards to the likelihood of doing a deal quickly? on aprilthe news broke 20 first, pfizer shares are down six percent. that probably makes the deal more expensive. we are hearing from sources that there is a likelihood of this going through, but it is starting to look --

>> we will see what day 2 brings to us. itv, they hope the world cup will help them. stay with me. we will talk about itv, the world cup and content -- is it king? ♪

>> welcome back. p.m.oomberg half year headquarters in london. we are in the trading day. lives show you the equity markets coming off of a six-year high and you can see the dax holding on. we are waiting for the tank of england inflation reports and for carney to speak. we'll see how it goes. the equity markets. let's look at individual stocks

to watch. >> let's keep it on the theme of mark harney. look at how they are approaching the meeting. any suggestion that the bank of england could move mortgage availability could move that market. is management overhaul taking over. they are arty saying what we know. this is the shift that the company expected. the biggest ball on the stock 600 today. it is not really disappointed markets. ubs says that there is lots of upside in this one. 12 and 13% growth. the low estimates. really this morning. >> certainly. let's get you some top headlines. the head of the bank of england 's quarterly inflation report.

they are looking to see if stronger growth numbers will encourage the central bank to increase the rates sooner. setting into a time of above trend growth. a new report says that investors may have profited on getting early word on changes to the fed policy. a new report from researchers say that the trading records show abnormally large movement subsequent to policy surprise. moves occurred before and during the media lockup. troubles in eastern ukraine have killed seven soldiers and wounded eight been in ambush. thatefense minister says the east is embroiled in an undeclared war with russia.

russia, do not miss a bloomberg exclusive. sergei lavrov is in moscow. that is at bloomberg. watching this morning. the numbers are in line with estimates. is here with me. you have been in the business for a long time. what do you make of where we are? what you make of what they are up to? >> i think they have fixed the initial problem they have had. they were hugely dependent on

off air advertising. a huge advertising slump. he has fixed all of this. moves feel very logical. >> those deals have been praised. >> when you buy and find out about the longevity of the content, -- >> the big business is what you are buying is a track record. if people choose to go somewhere touch, lose the magic that is where it is tricky. there is a question about if they can execute the strategy. does anyone disagree that this is a bad strategy? that much.t oh

they own fabulous assets and they did not own downton abbey. is what a lot of people have in america. voice.have doubt in your >> certainly. i bought businesses myself in america. we all think it is easy to do. it is not. chatting about diversification being the new norm in the british media. adam is heading towards america. what do you think about diversification and the big moves for the institution. is it good and a solid move? >> it is a solid move. it is similar and different.

they are as big as they are ever going to be in the advertising. it is hard. in their case, it is content. that thereto imagine are going to be many more british households. they are maxed out in numbers. the logic is to look to europe. a successful business and these guys are awesomely good at what they do. can take that into germany and italy, which are much smaller, you can see big upside for them. both companies are as big as they are going to be. what do you think there is a premium? do you think?

you have been in business a long time. >> it is more likely to be with a minority shareholder. > i agree with you. it could be a challenge. could get the deal done with less of a challenge and they know exactly what they are doing. they will have to do work around the house. you have been part of the landscape for a long time. we in this as we look at this going forward? that is where we are. trend, theook at the

business is very business-like and technocratic. business.owbiz now, industrial business. the people at the top are thinking in a strategic financially-driven way. >> it is like the business has matured and grown a bit. monopoly, you not have to be that good. now, it is going to be a lot more effective. >> it is great to get your input. roger perry. the chairman. neetg up, he has the turnednd mark zuckerberg 30. you'll might give up a hoodie

any soon. stay with us.

when started the facebook he was in harvard and his name is mark zuckerberg. and has been a good day catered for the billionaire. joining us is rob.

make me really sad. kid?ich is this he is really red. he is not a kid. it is pretty astounding. he just turned 30. >> who is under 30? >> one known billionaire under the age of 30. one.ve not found istin is the cofounder and only under 30 for another week or so. how that wealth has been accumulated. mark zuckerberg is good with his wealth. when i think of billionaires, i think of european billionaires and families.

how is it distributed? has it changed? not really. you look at the people that we are tracking and each favors the aged. significant and there is only for who are under the age of 40. the google founders are under the age of 40. it takes a while. the largest percentage is right in the sweet spot. 26% is the list. >> there are billionaires. who else is in the club? inheriting their fortunes and our people who are secretive about it. we do not know. lindsay cortez is the granddaughter of the founders of in and out.

she is a drag racer. not much is known about her. we only discovered her fortune last year. she was born in 1983. son of then is the founder of enterprise products. cap.s a market siblings -- desk siblings face no estate tax. >> when you track these guys and patterns thate come up and show themselves through philanthropy? let's look a little deeper. >> for the younger billionaire, the most fascinating are people who are building their own

companies. the rest seem to be people who have fallen into fortune. that is not. the richest woman in china and inherited a property development company. she was going to board meetings when she was a teenager. these are people who are fortunate to have inherited a fortune. >> ok. we are going to leave it there. a great deal of money from mark zuckerberg. the billionaire's editor. the pulse is coming up and mark barton joins us with more. the sun is shining. good morning to you. a big one today. the quarterly inflation report from the bank of england. inflation week forecast and what matters is

expectations for rate increases. it is based on expectations. are forpectations interest rate hikes next year. the second quarter does not indicate that interest rates could rise a quarter earlier. that is what we are told. that is the internal that they that is taking place. it will be changing in the next few months. a lot of internal and asked terminal numbers will be moving in. -- and asked terminal will be moving in. ernal numbers will be moving in. three percent rise in revenue. ubs calls it a mixed bag. they say they are against higher

expectations. the shares are down. 40% in the last 12 months. it has been priced into the shares. this is a company investing in content. why are they doing that? advertising. if you invest in content, you whether the slowdown in advertising. it is pushing money into content. it is a big u.s. production company who, i am told, one of the companies that you love watching, "the real housewives of new jersey." is that true? >> i have on occasion watched. i have never seen so much botox in my life. stories.awn

i like a bit of trash tv. it lightens everyone's life. >> yes. >> mark barton with the pulse later on this morning. let's bring you up to speed with companies on the move. leakean citizens who arsenal information. to. may be ordered where there is no public interest in publishing it. it is the biggest blow to the american internet company. they may lose $3.5 billion. swiss voters have reviewed the referendum. that thet survey says voters are ready to block the contract. anyvote could kill and warplanes over the next 10 years.

company had arent london ipo. it gives them a market cap of 170. grants.e pastry -- brands. it is a bakery. aircrafts.elling $3.8 million.rth the chinese government continues. controls, starbucks your subconscious. you make decisions for before you even walk in the door.

starbucks whena you are going to work this morning? i cannot tell you what is actually in this cup. paid designers.

this coffee chain is controlling you and your subconscious. >> walk into a starbucks and you are going to feel a pretty laid back vibe. that is what starbucks wants. the casual experience is a result of well-thought-out details. >> you have not even walked in yet. already, starbucks is working on you. start with the door handle. the designers call this a handshake between the customer and the door. it provides a little bit of advertising and gets you thinking about the coffee you are about to buy. flow and is all about getting people in and out of the stores in the most efficient way possible. in this store, they get people to go to the back.

they use lighting and visual cues. notice that the merchandise and the food is back there and that it is lit more brightly. in, you walk automatically move towards the back. starbucks knows that two things are happening to you. you are seeing the seating options and you can decide where to sit down. you are also getting positive reinforcement. you are seeing nice people enjoying cups of starbucks coffee. you see the strip of countertop watermark it does not look like much. it is part of the plan to maintain the connection to the people who work here. if this was not here, the first thing you would encounter is tall coffee machines. counterdrawn with the and, because everything is below level -- i level, you can remain

in contact with the people making your coffee. gaveis a question, i just starbucks my money. why am i seeing more advertisement for coffee? starbucks is based on repeat customers. they want me to think about the next time i come back. >> well. pretty cool. they work on the mind. jonathan ferro is getting ready to listen to mark cap -- mark carney. >> growth is set to be above three percent this year. it is the most compelling part of all this. how much stock is left in this economy and how will it play out in the coming months? how will these new people vote

and when will we get the first? that is the question. >> citigroup was with me earlier. the markets got ahead of themselves and the job is to get us to calm down. favor withrried money and calm the markets down. with is a significant part the turning point in wages. real wage growth has a lot of people talking about how this plays out. should the bank of england move? this was touched on. wages are involved. it is not robust wage growth right now. that is one of the keys. >> let's see what mark carney and the governor has to say.

thank you so much for the roundup. that is it for me. mark barton and caroline hyde will take you with the pulse. . .

>> carney's challenge. chiefnk of england's tries to manage expectations on the timing of rate hikes. we will bring you his inflation report in full. the foreignwith minister as germany's chancellor wades into the conflict. >> and astrazeneca's ceo on day two of the takeover hearings. hello. welcome to "the pulse," live from bloomberg's e