is that what has taken us a little bit lower? >> that is a pretty lagging indicator going back to the first quarter. you have hit decade-highs on the ftse. you have touched these numbers and we haven't gone through them with any conviction. we have been flirting around these levels for a long time now. that's where we're at again now. >> we'll see how the markets actually get going. we're off 18 points. caroline, dixons-carphone. >> they are going to be dixons-carphone. they are coming together to save costs. 18 million pounds they estimate they can save by 2018. also it is about scale. about expertise. they have the scale on the high street together. 3,000 outlets, not only in the u.k. but also in greece and scandinavia.

hopefully soon they will be talking to us letting -- our fridge will be talking to us, letting us know when it has run out of milk. >> do you want your fridge to tell you when you're out of milk if >> when your fridge starts talking to you, you had a long night, caroline. >> when i'm talking to the fridge, i've had a -- we have the g.d.p. number numbers. you say it is historical. >> i still think there is a story there. the diverge ens between germany and everybody else. france give you absolutely nothing. italy set to deliver .2% growth. can you call that growth? that is the ongoing story. >> i think the debate comes down to what is the next move or what is in the tool kit of the european central bank. let's cross over to david tweed.

you'red a adidas headquarters. the m trying to draw parallel. there are lots of parallels. this is a company which has lots of employees outside germany. it is a major exporter but like the german economy which did do better than expected in the first quarter, there are many uncertainties just as there are the german economy. what is going to happen in russia? hasd itself a has -- adidas a big business in russia. the currency could continue to fall. there is a chinese slowdown. i'll be back to talk about that as well. adidas, just like the german economy. manus? >> it is a big day in terms of the markets. 22 companies are reporting. what is your feeling on these

markets? > i think the big trading news is going to come out of the u.s. janet yellen. >> if you're keen to stay up night, you can watch it or catch bloomberg. you get to these levels you pull back a little. these are not really any real big moves. we're pretty much dead flat across the euro-zone. in europe, it is growth day or if you're france, no growth day. zero percent from them. .8% from germany. what a divergeance? it continues. you have germany and everybody else. the euro jumped around a lit. at 1.3714. forget growth really.

you get that headline number at 10:00 today. that is not a deal maker or deal breaker. when you get that rating on june 3, the big one, the e.c.b. meeting and what they might do. what it is really loobt is the outlook for inflation. nothing really changes today. it is e.c.b. forecast on june 5 that will drive what happens outside the euro-zone. >> let's pick up some of the themes now with the head of global client group at deutsche assets and wealth management. great to have you with us this morning. g.d.p., everybody says is slightly retrospective. the key thing is what the european central bank does next or potentially does next for us. what do you think they do? >> well, i think we have had a little bit of a surprise last week with mario draghi announcing potentially something could happen in june. so that led us to revise our

expectations about a june intervention. probably no rate cut. maybe other stimulus measures. we'll see. our punchline is when it comes to europe, we should really not be so afraid of deflation. >> i read that. the really smart money will tactically exploit hurt mentality of investors. maybe i'm in the hurt. that is a fairly different line to other people that i have read. >> this year has really been if, you take a step back, first we were talking about the u.s. market and about whether the weakness in the u.s. was truly led by the weather effects. there was fear about that and then fear about the ukraine and russia and now the latest fear is deflation. we still see it hovering around .9% to 1%. >> is it fair to say then that

fear is my friend? if you extrapolate what you just said to me, fear is my friend. dips on markets. we're at record highs. we have come through record highs in the states. six-year highs in europe. if i get retracement, is that not an opportunity to reallocate cash? >> for sure. because of the -- continue to be bumpy and any retracement continues to be a buying opportunity. >> a bumpy ride. the u.k. is pumping along. mark carney was at paines yesterday. what do you make of his performance? are you inspired about rates remaining low through 2015? >> well, i think, yes, carney went out of his way, led say, to reassure the markets that rate rises are not impresent in and that led to many of our

competitors and economists pushing forward the first rate hikes. i would think that on a personal basis, many of my clients feel same way, that they will start seeing some centers in the m.p.c.. >> that is healthy, isn't it? it makes sense to have higher rates. >> yes, but let's not forget the fact that the debt levels as a percentage of g.d.p. are at all an-time high. 2007.sed eep highs of >> stay with me, dario. we're going to get into some of your big trends and thoughts when we come back after the break. stay with us. here is a look at what's coming up a little bit later in the show. for dixons. they are teaming up with carphone. grinding comes to a halt.

inside adidas. we look at the technology that is giving the german giant that competitive edge. stay with us because we are "on the move."

>> i'm manus cranny in london and this is "on the move" streaming online, on your phone, on apple tv and new amazon fire testify. dixons and carphone warehouse announced a merger. caroline has the details. dixons-carphone coming together in a merger to be called dixons-carphone. combining expertise that carphone warehouse has been selling the new up to date tablets, the smart phones and with that combined with the scale of dixons. 12 billion pounds in sales per year when combined together and they are also promising investors cost cuts. 18 million pounds worth by

2017-2018. clearly the company feels together they are stronger. shares have been up for the whole of may. we have been hearing this merger is likely to be taking place. we get? of t from dixons in terms sales. it outperforms, 5% growth in sales in the u.k. 2% in europe. he lag ert is greece, down 9%. they will each have a 50% stake in the combined unit. back to you. >> thanks for that roundup on the deal. it is g.d.p. day as we have been saying through the morning and in germany, david tweed is taking a look at one of the country's most famous companies, didas. i know it is an amazing

technology site for us. what is it like? give me a feel. >> you get the sense of energy being here actually. i'm in this sort of administrative center at the moment where they have got their design is here. we came here a couple of months ago to film some of the packages that will be showing throughout this morning. there were plenty of places we were not allowed to go and shoot. they are all top secret. it is next year's latest designs being worked on right now and maybe the year afterwards. i don't know how far they are looking ahead for this stuff. it was only opened a couple of years ago in 2011 and there is a whole block of history, a huge installation where you can go and see adidas' history if you were lucky enough to be invited here. i was talking about the energy here. everybody is informal here. bear this in mind if you ever come here, the only people who

ever turn up at adidas wearing a tie are journalists and job candidates who haven't done their research. it is incredibly informal here. i feel comfortable, even with my tie on. maybe i should take it a off. >> you have a lot coming up through the morning. run me through what is on the agenda. >> look, one of the things about adidas is a innovation. i'm saying it very much similar to what goes on in german companies. the head of football oin vegas, you can catch that interview if you're interested. i thought it is very interesting. it is on the web. you can check that out. 10:10 london time, we will be speaking with the c.e.o.. i want to ask him to tell us about this big launch they have been talking about going over to world cup. they are keeping that pretty much under wraps. i've been trying to ask people here this morning. they are like we can't tell you. maybe we'll get something out of

the c.e.o. later on. the three famous -- the ones that i think are the most famous boots. there is plenty to look at coming up, manus. >> talk to me about adidas. how is that like the german economy? can we draw any similarities? >> i forgot that is why i'm here, isn't it? to talk about the german economy. adidas is really a little like the german economy. it is a big exporter and the german economy is an export-driven economy. it has similar problems that are hang overing the german economy. they had a strong first quarter. unexpected. we're going to see that moving into the second quarter. the things moving over, the things a the i.m.f. has been talking about, christine lagarde in berlin this week. what is going to happen to the ruble? problems with the ruble when it fell against the euro? what is going on with china? we have seen a slowdown in

china. latin america is coming. obviously the world cup is coming up. latin american curn s.i. sis have been falling. it has an impact on any german company doing business in these regions, which is why i'm here. i'll be speaking during "the pulse" to the c.e.o. hopefully i think it is going to be quite an interesting interview. >> david, we look forward to that interview. david tweed there for us live at the adidas h.q. still with us for his views on today's market is the head of global clients at deutsche asset and wealth management. before we get into the nuts and bolts of what the clients are telling you. tell me what you make of this. this is bill gross. he is quite an opinionated guy. >> in terms of investment markets, we have a new neutral and the new neutral basically refers to the neutral policy

rate going forward. that magical number, whenever it is, whatever janet yell and mr. carney and others decide it should be in order to maintain 2% inflation and 2% to 3% real growth. the real neutral is that magical number that will drive markets going forward. >> and in the best -- it was difficult to hear. he was talking about inflation and that is what is going to drive markets. for you and your clients, what is driving markets? where are the allegation going to? where is the thinking? >> it is interesting. bill gross' interview last night. it is talking about interest rates and remaining low for longer and maybe 2014 will not be remembered as the end of the

30-year bull market and the bond market. that is very interesting. to a certain extent, we do justify that. we continue to see flows in fixed income and lower rates for some reason. we have surprising inflation numbers yesterday from the u.s. yet the traders rallied. markets are short durations. >> taking a look at some of your notes. stable growth. continued tapering is going to be the theme there. everybody i talked to, we're looking at slightly higher rates in terms of the mid part of the curve. what is your view? >> yes. i think we have to differentiate between investor demand and looking for yields and the demand for return, some form of return and the movement into fixed income as we continue to see flows into fixed income, which are surprising, even for

us. then the fact that on a medium-term baste basis maybe interest rates, are -- the return risk/reward is not really so favorable anymore with interest rates at these levels. i think it is a question of timing. >> ok. that is the fixed income side. i'm just looking through some of the things that we have in the markets. technology, m&a, pharmaceuticalsened that debate about new social media tech. out of those three -- what is your feeling? is the m&a story still to play in the pharmaceutical division? >> m&a is a big driver this year, especially for a variety of reasons. we have heard about tax aversion. interest rates are not playing very much into the m&a spectrum. ake for example, bayer's purchase of merck. they could get a loan at 3% and

refinance at 1.5%. if you're playing maybe a little bit more on a multiple in sales, probably one or two time what is the average would have been, you can still make it. >> in terms of technology and information technology, you say you are still overweight on that. is that on the enterprise side of the technology spectrum opposed to the consumer side? >> yes. we continue to be constructive on technology because we see companies still hoarding cash and cap excould continue the drive. that will spill over. despite we have had a little bit of a bumpy ride recently, we continue to be constructive. probably even more controversial is healthcare on our side. healthcare is labeled to be very expensive. we have looked -- we have a strategy that looks at real returns beyond accounting measures and if you look at that and you look at the cash return ratio and you look at the

limited liabilities in the healthcare sector, they look to be an interesting sector. contrary to tell kos which pear to be from a purity perspective cheap. >> we'll have to leave it there. we have covered a lot of ground. great to have you with me this morning. come back and join me again. thank you. coming up, vivendi beats the estimates as the french media giant gets smaller and smaller. will a new strategy do the trick? we'll find out. ♪

>> welcome back to "on the move." i'm manus cranny in london. we have been watching vivendi through the morning. the french media giant is a bit smaller as it releases its first quarter earnings that beat estimates. they have been be refocusing, slimming down. marie, run me through the numbers first of all because income up 20% at 161 million euros. >> yes, manus. good morning. income is up this quarter and that is really what investors are going to be looking at. this is the first quarter where they published their earnings as a media company after it got rid of about 30 billion dollars of

assets over the past year. what these earnings show is really the income adjusted is up mostly thanks to lower cost of debt. that is because they used part of their proceeds from asset sales to pay back debt. that cheaper cost of debt is showing there in that income. there is some good news on their media assets. part of that is on the pay tv unit which is showing it is able to win subscribers in the first quarter. >> talk me through this. they have sold off the s.f.r. that was a definitive end to the refocusing and now it is about the media. what is next? is it about delivering results in the media space? >> the first step is closing the s.f.r. deal. it is expected to close before the end of this year. that is not done yet. a regulator in france has to give an opinion about that before it can be done.

once that is done, vivendi said clearly this morning that they have financial red room to do acquisitions and grow the media part of the business going forward. the question is you know, whether vivendi is going to pick up m&a again in the coming month and we'll know about that in june. there is a shareholder meeting through june 2424. for today, there is not much detail about what the strategy is going to be. >> ok, marie. let's see what they come out with. still to come, bloomberg's exclusive conversation with russia's foreign minister. lavrov. he says it is war we're seeing in eastern ukraine. >> i believe this is as close to a civil war as you can get. ♪

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>> you are very welcome back to "on the move." i am manus cranny in london. we are 30 minutes into the trading day. let's see how things are shaping up. we have managed to turn it around. markets had opened lower. stronger growth data from france, underwhelming stagnation would be the word in france. these markets have turned it around a little bit. -- focusingor sick a little bit more on what comes from the european central bank.

first of all, the top headlines. japan's economy grew at the fastest pace since 2011 in the first quarter as consumers and companies ramped up spending ahead of a planned sales tax increase. gdp grew at an annualized 5.9% from the previous quarter which exceeded forecasts of 4.2%. here in europe, france's economy recovery stalled in the first quarter as tax increases by president hollande squeezed consumers. gdp was unchanged compared to a 0.2% gain in the previous quarter. germany's economy grew more than forecast at a rate of 0.8%. comesne composite reading out at 10:00 a.m. london time. russia's foreign minister sergei lavrov says ukraine is sliding into civil war that will make it impossible to hold legitimate elections on may 25. the u.s. and eu say russia is

behind the unrest in the eastern part of ukraine. pro-russian separatist groups were excluded from unity talks that started in the capital yesterday. in an exclusive interview we asked foreign minister lavrov about president putin's recent comments about kiev and whether russia has any claim on the ukrainian capital. have a listen to what he told ryan chilcote. kiev is the mother of the russian cities. russian language, russian religion, orthodox christianity was born in the territory of ukraine as it stands now and we do not consider ourselves foreign. america is different from the north american territory from traditions, from culture. we have been one nation for more

than 300 years. even before that, when they brought religion more than 1000 years ago. >> you raise a really good point. >> it is impossible to miss the psychological historical family feeling. >> president putin not long ago mentioned the term new russia, and in." term that refers to what is -- and in." term that refers to what is today ukraine. does that give russia a right to lay claim to it. said -- the return of medieval ages. , when you ask people in europe, where are you from?

they say south europe. do you feel some neo-imperialistic intention in this answer? it is a historical term. >> let's return to markets. the pan-european gdp number comes out at 10:00. we are joined by the head of european macro credit research. always great to have you with me. i like what you said which is we are far too focused on markets -- markets are far too focused on the sugar rush we might get from the ecb. what should we be focused on? >> we are going to get a rate cut, maybe some other measures, but there are a few other things that are really important. the elections, no one is really talking about that. we have eurosceptics getting more consensus across europe. the parliament, some people think is not important. it is very important.

that political development is very important. markets are very focused on the near-term sugar pill, what the ecb is going to do. the reality is that what the ecb can do doesn't change lending yet. andcondition is liquidity banks still lacked capital. you need the stress test. you need banks to raise more capital. next year, the ecb needs to buy some of the loans that it needs to restart. >> that is going to take time to get to that point. yesterday i was reading through some copy. ltro, liquidity with conditions, is that not constructive? what do you think? >> it is better than just cutting rates or buying sovereign bonds. the fact that spanish government at 3% doesn't mean the

banks are going to give you a mortgage. they are still concerned about the economy. they are still concerned about their existing stock of bad loans. they are concerned about the capital they need. the community needs to lower the capital needs. it is the european investment bank not this the ecb. a lot of pieces in the puzzle. the market is already rallying because of expectations for cuts. to restart the economy takes a lot longer. that is why the euro parliament and the stress test is important. we see all these things over the next three to six months. in the meantime, we are positive -- there is going to be more rallying for europe. for the economy to restart takes a bit longer. >> you are in perpetual motion. we are lucky to get you in this year.

what is coming through when you are sitting in front of clients these days? are they saying, the americans are buying peripheral europe. are we too late? there is more recognition that there is a european recovery and investors want to buy into it. not just the bond market but the flows of capital starting to go into real economy. offices, bad loans, that is interesting. it is taking time to work its way through. you need reforms. you need spain but also italy to do reforms that are needed. >> this is something which came through. i sat down with bob who used to run the world bank. he said it is about structural reform all around. that is what we should be focusing on. when that comes through, that is the next leg. >> when we asked investors, are

you going to buy italy or spain? 70% said yes. the major reason why they would stop buying is if reforms slow down. if they don't see enough reforms, they are going to stop buying or sell. one -- i probably pronounced his name, is probably in charge of your home country. the are you confident he is going to deliver there? >> we are pretty confident. portugal and greece are the companies that are catching up now. favorites in the periphery. other hand, the market and investors are maybe too quiet on other countries which haven't been hit but we think are safe havens. >> [indiscernible] where are the fake havens? don't say central london. >> the u.k. needs to do more to stop the microwave affect in housing prices. to some extent it is not the

bank of england's fall. it has been the government to push rending for risky borrowers. the bank of england needs to do more to stop the microwave from turning people into popcorn. >> i love that. microwave, itthe is politically fairly unpalatable isn't it? >> what do you do? you hike rates and that affects the whole country and the whole economy. maybe that is not the right thing to do. >> macro credential? the use of macro credential but not much has been done. inre is very little evidence norway, sweden and denmark that macro credential works. they are already behind and they need to do more. and know that the stock trade of your yields that comes through is still very much

geared towards bank debt. where are you on that story? we are almost at the halfway point of the year. are you still as enthusiastic about various levels of bank that? >> i think banks continue to heal, continue to raise equity. that is very good for their strength. they are still not able to lend. they are deleveraging at a slower pace. we think there is around 800 billion to go. we are over two thirds of the way. that arehe best banks feeling now are the ones in the parade for a. the banks in greece, portugal. in core europe, they already trade very well. in the periphery, there is some more upside. >> we will get you back in. let's see how fake avon holds

up. alberto gallo, head of european macro credit research at rbs. coming up, as manchester united prepares to release earnings, we take an in-depth look at the family buying the iconic franchise. ♪

i am manus cranny in london and this is "on the move."

here is one stock that hasn't been moving, french connection. stock was down 50% at one juncture. the volume has changed hands. french connection are saying that north america is below forecast and u.k. and european , but sales arese going to be tougher going into the second half. in light of german gdp, let's return our focus to one of the most famous companies in the world, adidas. it relies on high-tech innovation. company famous for its three stripes is going to fend off its biggest rival, adidas products have to be cutting-edge. this is the room where the products are perfected. this robot leg helps adidas simulate kicking a ball in controlled conditions. cold, wet or dry and it

hits the same every time. >> the reason for this machine is the repeatability. to takeplayer is able the ball 10 times, 100 times as needed for a study of ball flight. >> the team checks how the ball responds when struck and how it flies through the air using video and radar. then there is the boot. triangle hasof the a special target. this one is specially for breaking. football is not only straightforward, it is about change of direction. >> using information taken from plates beneath the turf, the team creates boots that react to different forces. this test is designed to keep adidas athletes injury free. it is not sports science that stands out as inspiration. first byas developed the gaming and movie industry.

>> reflective dots are placed on parts of the body. a computer maps the athlete's skeleton, examining the forces applied. >> when we are comparing products, you can say product a is better or product a is better than product b. then there is the climate change temperatures ranging from minus five to plus 50 degrees centigrade, adidas puts its products as well as its interns through their paces. for this summer's world cup, teams sponsored by adidas will wear shirts tested in the chamber. >> it is highly light weight without compromising on performance. our athletes will sweat but we will provide them a garment that will stay later thank stu faster evaporation. >> adidas wearing teams winning football's greatest prize could

prove that science was worth it. , insight adidas by david tweed. manchester united released earnings today and our billionaires team have been investigating the man who owns the franchise. bloomberg's billionaires reporter joins me now. they gotr when involved in manchester united and caused quite a stir. where did the money come from? is a bitfortune mundane. it is an american family, multibillion-dollar fortune headed up by malcolm. they made their money on real estate. they own shopping centers across the u.s. >> what brought them into football? it is not for the love of the game, is it? honest, i think they

view it more as a business. invest in the tampa bay buccaneers, an nfl team. they were looking at manchester united, the strongest brand in u.k. football. they can probably earn some money and make a sound investment with it as well. >> as you said, manchester united is a very serious investment. talk to me about how the team's fortunes have affected the glazers. >> this season has been the worst in memory. >> i don't like to say that. >> i am afraid they finished seventh. that means they are out of the champions league. frommeans lower revenue the premium european competition and how will that impact on merchandise, etc.

we can see what that will do to manchester united's value. the glazers own about 50%. right now the stock is about 9% down. since january, it is up 6%. investors perhaps pulling back slightly from the negative view they had. >> obviously there is a few other billionaires in football. what about them? how are they faring? >> abramowitz is the classic one. he has been with chelsea since 2004. the glazers took on a lot of debt. for others it was more of a show asset. he has been losing a lot more money than the glazers but equally buying very high mark namebrand players. we are going to leave it

there. tom from bloomberg billionaires team. "the pulse" is coming up at the top of the hour. caroline hyde and mark barton will be helming the show. my conversation about manchester united. what else have you got lined up? who is justot mark vaguely obsessed with manchester united. we will be continuing that conversation. of course it is gdp day-to-day. we are getting italy's figures out at the top of 9:00 and also the eurozone at the top of 10:00. we will be digging into those numbers, seeing why france and italy remain the laggard. we are talking through the new normal and the new neutral as pimco has now coined the modest trend growth that andrew balls for sees. also digging into the eurozone numbers with david allen's. he has got some interesting views of what he anticipates the

ecb to do, how mario draghi will inflationhe slowing that david sees across many a european country. and of course our standout interview will be with the head of adidas, the chief executive will be talking to david from germany, digging into the outlook for the german economy. also, the outlook ahead of the world cup. we were busy -- we will bring much more to you. >> looking forward to that. make sure mark stays upright. coming up, you could say the adidas headquarters is in the middle of nowhere but thanks to some adrenaline boosting company perks it has managed to attract extremely young workforce who continue to take a look inside adidas. that is next. ♪

>> as we focus on economic growth across europe, we continue to look inside the business of adidas. its headquarters isn't exactly in a young urban center like london or new york. it is in a small german town with a population of just over 20,000. attracting creative minds should be a tough task.

david tweed reports. >> for a company founded 65 years ago, the average age of adidas staff comes as a surprise. just 30 years old. at its south german headquarters, the workforce is made up from 74 different nationalities. >> most people are in their 20's. >> courtney is a good example. 35, american, a designer. >> when i moved here to germany, i felt like i was going back to school. everybody was friends. there is always some sort of party. everybody is so much more welcoming. >> you can feel it in the atmosphere. departments are linked by walkways allowing fast connections. sporty at those is important in everyday life. >> we have a stadium where i do

my training at lunchtime. workout.we have a long you need a kettle bell and a partner. >> our designer runs cxt. courtney is crosstraining. it is so popular it has a waiting list. on the same lunch break we see athletics, football. this employee fancied having a go at archery. all as the founder looks on. what could be more appropriate? nearly an hour into the trading session, we are on gdp watch. i am joined by jonathan ferro. you were talking about the dutch gdp. >> to be fair, absolutely terrible. over 1% negative. you have gdp at 0.8%. you have france doing nothing.

these gdp figures were never going to be the deal maker or breaker. >> and the euro is trading 1.3674. markpulse" is up next with barton and caroline hyde. ♪

forecast growth beats as france unexpectedly stalls. >> our exclusive interview with the chief executive of adidas. how will the sports giant cash in on the world cup? >> dixons and carphone warehouse agree to a 3.8 billion pound merger. hello, welcome to "the pulse" live from bloomberg's european headquarters in london. >> also coming up, a rival of the fittest.