max said frenzy. stocks surge and the dollar falls. janet yellen says rates will remain low. >> l'oreal goes on a shopping spree. the ceo tells us that he is just getting started with billions of dollars in deals. >> caution from cable. france must play by the rules in the battle for alstom. good morning, everybody. ."u are watching "the pulse we are here in london. i am guy johnson. >> i am olivia sterns.

also coming up on the program, amazon is taking on apple and samsung. >> securing a spot. we are going to speak to the ceo of electrolux about whether we intelligent connected washing machines, dishwashers, etc. we begin with a bloomberg exclusive. l'oreal is scooping up beauty brands around the world. the world's largest makeup company is buying and la-based at cosmetics company. the ceo tells us he sees more acquisitions after this deal. in an extremely rare interview, he sat down with caroline in paris. >> it is a fantastic brand. brand. professional it is the only brand like that. has been a great success in luxury for many years.

equivalent in luxury, the brand urban decay. we are planning a huge success with this professional makeup brand. the size ofeal acquisition you are looking for? >> it is not that, it is just that we thought it was a great opportunity and we took it. at seizingty good brands that are still at the early stage of development and making them huge. maybelline.xamples, when we bought it, it was a $300 million and now it is 2 billion euros. when we bought it it was $30 million and this year it will be 600 million euros.

this, we do pretty well. taking a brand and being able to identify the strength and value of this brand, and then globalize it and make it very big. we think nyx will be also a very big brand. >> how long will it take to turn the body shop around? if your latest attempt fails, will you consider selling it? >> one of the reasons why maybe the bodye difficult, shop when we acquired it was already a big band. it is easier to take a small brand and make it a huge brand when it is a brand that is already big and you have to reinvent, refresh, renovate, it is always more difficult and takes more time. take the body shop as a real challenge. have not few years

been proving very well, but there is a new team. there is a new strategy. >> are we going to see more acquisitions in the rest of the year? >> we are, i would say, analyzing all opportunities every year. the simple reason is that when you want to, do sell, they contact us first. we see all opportunities. we are selective. we take only the ones that we think fit our strategy and are complementary to our portfolio, that have big potential. we are confident that we are going to find other opportunities this year or next year. this is the story of l'oreal. >> so it is pronounced nyx -- nicks. that doesn't sound like it is from l.a.

it sounds like it is from the west bank. >> i thought you were going to say new york. i am not surprised that it is not on your radar. caroline joins us now from paris. great interview. well done getting it. very bullish sounding, saying this is just the beginning of several deals. how about the market in europe that has been difficult the past few years? does it seem like the european market has hit a bottle? right. is just because he is making this acquisition in the u.s. doesn't mean that he doesn't plan to invest in europe in the near future. he has been very bullish in my interview last night. he said europe is back. he said that countries in southern europe could be a growth region. entries like spain, italy, portugal or greece which have been very difficult for l'oreal in the past six years.

in the first quarter of 2014, for the first time in six years, l'oreal saw sales growth in these countries. they are pretty confident that the future. as for the global cosmetics market, the l'oreal ceo expects growth of 3.5% to 4%. he expects that his company will exceed this market forecast. >> eggs so much, caroline. you will hear more of our exclusive interview with the ceo of l'oreal later. >> let's stay on the m&a theme. we talked about the bidding war for alstom. immelt arrives in france to make the last push for the energy assets. >> the european rules imply an open market in corporate ownership with one or two exceptions which we all apply to. shouldn'tic in france

detract from the underlying reality that we have in the u.k. that is not to say that there are not instances -- you mentioned alstom in france. that is one. we have had this issue in the u.k. where we have been concerned about the impact of a pfizer takeover of astrazeneca. the way we dealt with it is by engaging with the company, pfizer, to secure long-term commitments to the r&d base in the event they have gone away. clearly, there was a interest. we endeavored to engage within the rules. the french are operating on the same rules as we are. >> that was the u.k. business secretary. he described an impressive character, which i thought was interesting. many people describe him as plenty of things. we will hear more of little bit later on.

>> back to our top story, the market reaction after the federal reserve trimmed its bond buying program by $10 billion, staying on course with the taper irrigate the fifth straight cut -- taper. the fifth straight cut in a row. manus cranny is here to walk us through the minutes. clearly the markets liked what they heard but it seems they are more dovish than yellen. >> they are certainly more enthusiastic. if there was an equity trader out there, what you listened to .ere the words, moderate pace you heard about lower rates for longer. those are janet yellen's words. the s&p 500 traded through record highs. let's have a look at the longer term chart. there is the s&p 500. look at the 10 year government bond yields. revised down its economic forecast and investors

bought bonds. there is the bottom line. the dollar went weaker. risk assets went up. things are improving. but the market heard was the same as last month. things are moving at a moderate pace. this is the issue we talked about yesterday with the bank of england. mind, the market is still moderately on an easy mode. >> first of all, the relationship between bonds and equities. you have a big reaction in equities and fx. that equity bond relationship is interesting. pointedointed -- they to quite strong growth in the second half of the year. growth deliver upon that , are we going to see the market having to reprice the fed being more aggressive? she said, everything is ok. we are going to continue on the path we are on at the moment but we are expecting strong

second-half growth theory get to we need to reprice? >> the fed has already reprice that. >> i am not convinced they have priced it enough. 3.5% for the next several quarters in order for us to hit the current trajectory. predicated on the view that housing recovers, that you have a good economy which continues to strengthen. fears of a more hawkish outcome, to a certain extent, this is what it is. yesterday we looked at dollar-sterling. dropping below 1.70. why? i am being slightly facetious in that. here we are, the reaction from the market is thus, fears of a more hawkish outcome. >> that is what happened yesterday with the bank of england. i think that is why the market has priced in the weight that it is.

you got a much bigger reaction in equities. i am looking at the two messages coming out of this theory get we are expecting strong growth in the second half of the year. they did longer-term, cut their longer-term forecast. >> lower growth. >> they raised their view in terms of the first rate hike. i hear 100% what you are saying but for me, the bottom line is they raise by 2015. they said in march rates would be 1% at the end of 2015. now we are at 1.13% and moving. they have downgraded their levels on growth. you downgrade the >> you talked yesterday about having this said carney moment. are we going to have to go through a moment, september, october, where yellen has to go,

i think you are miss pricing this a little bit. >> i am glad you brought up that point. this is the ability to communicate in a much more effective manner. my perception is, janet yellen said there is no mechanical formula for when rates will rise. she has moved on. she has not had a bernanke moment. i will tell you why. i am pretty sure mark carney neither had a bernanke moment nor was unsure how to communicate. he was clear how he was communicating. forward guidance. when peoplepeople, go to study communications in years to come, those will be the three leaders they look at. >> and they are following her. manus cranny, thank you so much. >> what else is on our radar? new typedeveloping a of flat panel display. it can be made into any shape. they are calling it free-form

display and the technology reduces the size requirements for a screen's outer edges, allowing nonrectangular designs. sharp is expanding panel outputs in china's growing market with this product. >> amazon unveiled its first smartphone, the fire phone. the device has tied the online retailer's other services to make it simpler for users to buy items from where else but amazon. 199phone will start at dollars and will go on sale in the u.s. on july 25. we have more on that story later. >> parliament in spain has sworn in a new king. the new king will face a series of challenges as he attempts to restore the reputation of the monarchy. interesting that it happened on the same night as spain's lost in the world cup. l'orealon the exclusive

ceo. we take a look into his shopping bag after the break. ♪

>> when someone asks, they contact us first. we see all opportunities. we are very selective. we take only the one that we think fits perfectly our strategy, that has a big

potential. that we candent find other opportunities this year or next year. this is the story of l'oreal. the ceo of l'oreal speaking exclusively to us. his company is on course to spend more than $5 billion on acquisitions in the first half of this year. what else could l'oreal be i in? let's ask the founder of the luxury brand agency. good morning. said, this is the story of l'oreal. they make these acquisitions and turn them into huge brands. do you agree with him? >> i would agree that this is what l'oreal is very good at, taking something that is relatively successful or unknown and roll it out worldwide using their own marketing. they are not so good at inventing new things.

sense for them to because they probably cannot invent a brand like this by themselves. it will fit nicely into their portfolio. from theiroo far off dna and way of doing things. >> and it is very much like urban decay which they own. >> this is something i know a lot about. can anybody stop l'oreal? it is a bit like the technology giants we see around us as well. and pharmaceutical companies. they are not good from zero to one but they are good from one to two. is it a model that is -- that anybody can tackle? >> the only people who could stop are the consumers. >> this is a great business. >> this is a great business but it is a very tough and competitive business which does

require a lot of resources to go from one to two. >> and there are big competitors. estee lauder has the same business model. i can't think of brands they have natively developed on their own. any thoughts on their other targets? >> i wouldn't want to speculate on this but i think anybody who has a successful brand that is to $10020 million million of turnover is a potential target. >> they get to choose, don't they? they can say, that one is going to be a winner, not that one. they are surveying a landscape and looking for something that is going to fit into their business model. are -- i think what the ceo said about people coming to them first is quite true. >> it is like lvmh. ibo come to them first because they know they have got the machine to take the brand somewhere else.

trying to take something into an emerging market that isn't already there. >> that is true. wayably in a kind of wicked for the brand owners to the targeted, is probably a great sign of recognition that they have achieved so much that l'oreal is considering them. >> can great brands that are coming up in a zero to one stage succeed without being part of a big conglomerate? >> i think they can. it just takes more time. what the big conglomerate rings to the table is the resources successfulto reach levels. it is almost giving them a way of speaking much louder. >> and they share the r&d. estee lauder will spend a lot of money to develop an ingredient to reduce wrinkles. they can then translate that

into several different price points across their brands. what sector in the market do you think is hot right now? a decade ago it was the rise of celebrity makeup artists. then there was the celebrity dermatologists. what is hot now? is maybe not so well served right now is -- i wouldn't say ethical but not environmentally sound. we have emerging stories about the damage that is done by silicones that get thrown through the oceans. brands will start to have product offering in that range, they will probably become very hot. >> explain that to me again. byproducts cosmetics and up being released into the waste system.

brands -- there are some emerging brands right now in the u.k. and italy that are starting to work -- >> biodegradable? >> more environmentally friendly. that is going to be much hotter in the future. >> quickly, we heard mr. agon say that the market in the europe is coming back. he is having some trouble in north america. why is l'oreal struggling in the u.s.? >> there is probably -- i know this is going to sound cliche but there is a huge ultra difference between the u.s. and european markets. l'oreal has always had a love and hate relationship with the u.s. they have cultural problems. >> but they own maybelline. that is a very beloved american brand. >> l'oreal takes something and makes it grow bigger. so maybelline was an american

brand and has grown bigger, which is good for that market. to bring another brand into that market is going to be more difficult. the brand has to be adapted. the communication has to be a adapted. that is not something they are very good at. >> all right, thank you so much. >> see you in a couple of minutes. we are going to be talking about what is happening in today's business stories. we have some great ones coming up. electrolux a big theme. ♪

>> welcome back. time for a quick look at the equity markets. if you are in doubt of what to do, according to janet yellen you look towards risk assets. european equity markets are rising. you are seeing the dollar decline. the currency is just coming back a little bit. according to the bloomberg index, we are at a one-month low. china also making noise over the past 24 hours. they are committed to 7.5% growth. they are committed to keeping that economy moving. we saw an uplift. rio has a story in terms of moving coal around. kingfisher, you saw credit suisse saying, do it yourself. the market only just beginning. i have yet to buy my tool belt. rolls-royce rising. one billion pounds of shares to

be bought. that is the state of play. ♪ .

>> good morning, everybody. welcome back. you're watching "the pulse". actually what you're watching is live pictures coming from spain where king felipe is now doing the rounds, effectively, a guard of honor in madrid for him this morning. interesting. it wasn't a coronation that we saw for him. it is the proclamation. a subjectle difference i suspect for royal watchers and very subtle difference for the rest

of us. nonetheless, we have a new king of spain. this is the first time we have seen the transfer of the royal family within spain. quite a big shift. i wonder who were the the spanish are weigh up this morning are more engrossed in this story or the fact that spain got knocked out of the night. p last >> by chile. ouch. >> they probably would have preferred -- something to think about this morning, the spanish on two fronts. the new king and the loss of a ground when it comes to the football world cup. >> the fed is sending global stock markets higher after reassuring investors that rates would remain low. >> the committee believes economic ackstivet rebounding in the current quarter and will

continue to expand at a moderate pace thereafter. >> u.s. prosecutors are broadening their investigations into the foreign exchange industry. authorities have been asking bankers how much they charge ustomers to exchange currency. >> and the fighting in iraq continues. local police say they have taken back control of the country's biggest oil refinery. it has been seized by extremists on wednesday. >> ryan chilcote joins us far look at the latest.coms in the country. what are we seeing? >> look at the market first. oil generally up since tuesday . tuesday morning. yesterday oil closed at a nine-month high. some of what is going nonis in beijing.

it is now under the government's control. now maybe there is a truce in place and they are evacuating people from there. very important for iraqis. it is responsible for 40% of their refining. 300,000 barrels a day. not just for the north of the country but also for baghdad. that is one of the friction points, if you will. the oil fields themselves remain very safe. 3/4 of the output comes from the south. we have b.p. and exxon beginning to pull some of their people out of the country. having said that, there has been absolutely no change to the physical supply of oil, the oil over picture out of iraq the last week. it is just as it was. >> earlier last week, we heard

malachy, voices from the iraqi government saying -- now what we're hearing from the u.s. is that the option is off the table. president obama met with congressional leaders last night. any signs that he is now shifting his stance and will take a more active role? >> never say never. even if they were going to launch air strikes, i'm not sure they would be very clear or public about that in advance. definitely it does not look like that is on the cards at the moment. in fact, the message seems to be a political one for the prime minister of iraq, al-malaki. while at the same time, it seems like we're getting a message from the u.s. that they are not sure that he is capable of that. think about that. al-malaki has been in power for eight years. i was in baghdad in may 2006 when he became prime minister for the first term. it was a very sectarian time in baghdad when he rifed. -- arrived. third term in april he was

elected not with broad support among sunnis and occurreds but from extremist shia parties. now he needs to be this uniter and there is concern that he might not be able to do that or this st not be able to do quickly enough to stop the advance. if you want to stop the militants from getting loafer to baghdad you have to get moderate sunnis onboard and that is something he has the failed to do at least thus far. back to you. >> let's get back to one of our top corporate stories this morning. g.e.'s c.e.o. is in france for the third time in two months trying woo over the frefrpbl government making its final push or alston's energy unit. -- alstom's energy unit. >> we spoke to them yesterday

about this. he is described as an impressive character. the u.k.'s business secretary talks about alstom and the fact that the french have to play by the rules. >> we have this -- in the u.k. where we have been concerned about the potential impact of a fizer takeover of astrazeneca. it is very engageing with the company. pfizer. so secure long-term commitments to the ready base and in the event they have gone away. this for the time being. clearly there was a national interest. but within the rules. >> ok. joining us now is matt campbell. let's take a look at this battle. jeff's in town. he wants to nail it. what does he have to do?

>> he wants to get it over the line. all of the noise we have seen with siemens and its counterbid, g.e. still has the upper hand. they are very much in the lead. i think he really has to close to deal to convince the government to go along with his plan. the smart money is very much on g.e. getting this done but i think it has been much more complicated or drawn out than they or anyone else thought it would be. >> everybody comes on this show and says the smart money is that g.e. gets it, but siemens, mitsubishi are not in the business of making bids for companies they are not serious about. that's why i find it all so surprising. >> yeah. that is an interesting points. the question is are they serious about it or are they just trying muddy the waters? >> their offer looks so much

more complex and doesn't make as much strategic sense. i think that is the proverbial $17 billion question. the siemens offer is strmly complicated. we would struggle to describe it. it is a bit too clever. the kind of thing you can see get done and in two or three years, getting dismantled in some way. i think the alstom board realizes that. it is just too complicated. sfeeven the siemens bid fails, it will tie g.e. up in all sorts of knots making all sortors french commitments. from the siemens perspective that is probably not an entirelyly thing. >> also coming up, staying with m&a, let's get back to that

bloomberg exclusive. l'oreal scooping up beauty brands. the c.e.o. tells us he sees more cquisitions. >> the market -- in fact, in the u.s. it is a very contrasted situation. on one side, the luxury business is doing pretty well. the luxury market is doing pretty well. the mass market in fact itself has been really flat since the beginning of the year. ue to maybe different reasons. this will definitely help to boost our sales. it is not going to be the only thing. we really also intend to increase our market shares. to grow organically on the market itself.

>> it is almost the end of the second quarter. how bullish are you? >> i'm confident. europe is back. it is not growth in the market like in china, of course, but it is -- and the good thing, the very good thing for us, l'oreal, is also the fact that southern europe is back. southern europe has been very difficult for six years. spain, portugal, italy, greece. very tough. these were countries where we were very strong. it really impacted us very much in five or six years. for the first time in a first quarter, first time in six years, first quarter of 2014, the markets there are flat and we are positive. so it means that this could be again, a growth region and also in the other countries of europe, we are doing pretty well.

we are an amazing success in germany. we are doing very well in the u.k. europe for us is a positive region. >> do you -- global forecast growth of 2.5% this year and you think l'oreal is going to exceed this forecast? >> the answers are yes. first yes is i think that the market will be maybe between 3.5% and 4% as i said before. i don't see any reason why it should be very different from that. yes. our ambition is to -- what on the market. our ambition is to outperform the market. some years we are by far. some years less. the ambition is to grow our market shares every year. and to grow your market shares, you have to -- the market. >> that was l'oreal's c.e.o. spoge to us in an exclusive

interview. >> up next, it is london tech week. we're looking at artificial intelligence. caroline hyde joins us for a quick look at what is coming up. kire line? -- caroline? >> thanks, guy. you'll be able to see one of those drones flying over my shoulder as i speak. we're at the forefront of where robot six going the future. they will be able to build their own nests. they will be able to sun themselves, building up energy to go off in 3-d print, wind urbines. $4.5 trillion can be added to the economy through some of these little things. we'll be back with more from the head of the lab after this break.

>> let's talk tech. sorry, something went wrong. earlier this morning, facebook users around the world, mainly in europe and asia were unable to access the tie it site. panic over. the longest outage in recent memory. i think we just -- we were maybe about to solve the u.k. productivity problem.

>> it is a massive spike. the guardian put up their web traffic. it was a massive plunge. productivity in our office and some other offices might have spiked had some people gotten off their facebooks? >> this is going to be a big problem. anyway. we have to stay with tech. >> day four of london technology week. let's focus on one of the themes of the week, artificial intelligence. for more let's get back to caroline hyde at imperial college learning about some drones flying about her. take it away, caroline. >> thanks very much, olivia. an aero robotics lab at imperial college. i'm here with the head of that company. these drones, you really look to byology. -- biology.

>> they look very much like insects or birds. about the same size as an insect. a larger insect can fly and transform and take off and transform -- >> how will they transform society? >> well, they are a big area of growth. they are used for filming in architecture buildings or facilities. the next generation will be directing the environment, search and rescue, oil and gas industries. there is huge potential for investment and the future is really growing. >> tell neebt future investment of this is approaching the academic world which are you are leading. coming to you asking for ways this which they can tackle these real worrell problems now with robotics. >> i think they get a lot of inquireys from big companies that want to bring this to the

market. however some of the technologies are not there yet. we need to bridge this gap and we need frameworks that are in place to allow this to happen. >> what sort of frameworks? is this where the government comes in? do they need to be funding ack temperature wra to make sure we have -- academia to make sure we have the same -- give us a timeline. two years? five years? a decade to have those flying robots helping businesses? >> some of the ack -- acquisitions can be five, 10, 15, 20 years. we already collaborate with the government. er in now developing a strategy or a road map of how to bring robotics to the market. how the u.k. can become a leader in that. we are doing this together with the technology strategy board in supporting us and developing this. there is huge performance for investments and this will

happen. >> what are the other areas of robotics as well? where is this going to be largely applied? where is the 4 1/2 trillion dollars worth of value going to be coming from? is it manufacturing where robotics are already largely there in terms of the car manufacturers who have welding going on? which industries are going benefit the most do you think? >> i think it is across many industries. the u.k. can become the leader n this area in robotics. for example, the u.k. is already fukushima ng -- in for disaster response in such areas. pipeline -- for oil and gas industries. another example is they could live on wind farms and look at cracks or damage on the wind turbines. and repair them without any human intervention.

this would reduce the down time. >> are there any ethical issues when it comes to robotics? eelon musks talked about worry about -- elon musk talked about are ing about a term in -- these getting too life like? >> i think there are a lot of science fiction novels that talk about the dangers of this. i think now robotics and aero robot six moving off into space for many different an indications and there is lots of opportunities there. we need some kennettics framework that will allow us to define what we want them to do and what they should not do. similar to genetic engineering community such as things we don't want to clone humans, we

have to think -- they are benefiting humanity, improving the quality of life to the nefit and not endangeringing people. >> wonderful speaking to you. thank you very much indeed. in 5-10 years we'll be seeing your robots helping the gas industry, manufacturing in general. and minting wind turbines. i love the flying robots building themselves nets and flying off with their 3-d printer. the head of the aeroyell robotics laboratory here -- airline robotics laboratory here. >> let's move on from robotics to what's happening in spain this morning. you're looking at the pictures of king felipe. he has been proclaimed king this morning. he is giving his first speech to congress this morning. the event in spain fairly low

key, it has to be said by royal standards designed for a smooth transition and really to usher in a new era. a less grandiose era and a more keeping with the people era for the spanish royalty. he is decked out in a spanish flag this morning. tough considering that the out of thehe team is world cup.

>> welcome back to "the pulse." in today's new energy, imagine you have an offgrid soil ar system. what if it breaks down? here to tell us is the c. tombings of product health. a remote solar monitoring system. welcome to "the pulse," ben. just explain in basic temples what your company actually does. >> we take data from remote-connected power products. analyze that data and turn it into useful, insightful meaning that allows you to tell for example when it is going to fail or if it is tending to stop producing power. >> where are your big markets? you're in remote locations? third world markets or is this a product for western europe? >> the product applies to any

location. really we're focusing on africa. here is a huge growth. 600 and we're trying ride that wave and help things become more reliable. >> the criticism of sole czar that it is to inefficient now and expensive and unpredictable. cloud come, solar power goes away. how do you see yourself as a solution to that? there is a huge amount of sun in africa. when you compare the solar energy to burning a pair finish amp which is terrible -- perafin lamp, which is terrible for people's health. >> you can bring an internet of things. i think everything is wired up. >> the nice thing is it is wireless. especially in africa.

they skipped the wide infrastructure. we ride that as a communications infrastructure. >> that sounds promising. thanks so much for the chief technology officer at product health. stay with "the pulse". we will be back after the break. ♪

>> l'oreal goes on a shopping spree. the c.e.o. tells us he is just getting started with billions of dollars in deals. >> bript's business secretary says france must play by the ules in the battle for alstom. good morning to our viewers in

europe. good evening to those in yaze and a warm welcome to those just waking up in the united states. i'm die with johnson. -- guy johnson. >> i'm olivia stearns. also coming up, amazon lights a fire taking on apple. >> and securing a spot in the smart home. we'll speak to the c.e.o. of electrolux about whether we want connected washing machines. l'oreal is on a shopping spree. they are buying l.a.-based nyx cosmetics to boost its offering in north america. it c.e.o. tells us he sees more acquisition a.f.c. this deal in an extremely rare interview. >> nyx is a fantastic brand.

it is a professional brand en masse. it is only the brand like that. it has been a great success in luxury for many years. we have been very successful with the quive leapt luxury, the brand urban decay and we are planning a huge success with nyx. all over the states. >> is this deal an indication on size of acquisitions you're looking for? >> no, it is not indicative of that. it is just that we thought it was a great opportunity. and we took it. what is true is that we are pretty good at seizing, you ow, brands that are still at their early stage of development and making them huge. one of two examples is maybelline. when we bought it 20 years ago

t. a $300 million. now it is 2 billion euros. it is -- this we do pretty well. taking a brand, being able to identify what is the strength and value of this brand that could make it universal and globalize it and make it very big. a think that nyx will be also very big brand. we will follow the same direction. >> how long will it take to turn body shop around and if your latest fails will you consider failing it? >> one of the reasons why maybe it is more difficult is that the body shop when we acquired it, was already a big brand. it is easier to take a small brand at an early stage and to make it a huge brand. when it is a brand that is already big, you have to

re-invent, refresh, renovate, it is more difficult and takes more time. so we take the body shop as a real challenge and so the first few years have not been proving very well, but there is a new team. there is a new strategy. there is a new vision. >> are we going to see more acquisitions in the rest of the year? >> you know, we are, i would say analyzing all opportunities every year for the simple reason that when someone asks a beauty brand to sell, they contact us first. so we see all the opportunities. we are very selective. we take only the one that we ink fits effectively our strategy that are complementry to our portfolio that have a big potential. but we are tchaft we're going to find the other opportunities

this year or next year. this is story of l'oreal. >> caroline joins us live in paris. he is a very hard guy get an interview with. well done there. sounding very bullish in tone particularly on acquisitions. what did he have to say about europe? >> that's right, olivia. he was really bullish about europe. normally spends $5 billion in acquisitions just for the first half of 2014. not only in north america but globally. about europe, he told me europe is back. he believes that southern europe could again be a growth region, countries like spain, italy, portugal, greece, that have been very difficult for l'oreal in the past six years, well these countries could soon grow again, and in fact, in the first quarter, l'oreal saw some growth

in sales in these countries in the south of europe for the first time in six years. as for the global cosmetics market, the l'oreal c.e.o. 4%. ts growth of 3.5% to but he expects that his company will exceed this forecast. >> thank you very much indeed. an excellent interview with l'oreal. now let's move on. kind of in a way but staying with m&a. i sat down with the u.k.'s business secretary vince cable. we spoke about the bidding war for alstom. this as jeff immelt arrives in france. he says france needs to play by the rules. >> the european union rules on takeovers imply under the market with one or two exceptions which will -- the rhetoric in france,

you know, shouldn't detract from the underlies reality which is the same that we have in the u.k. now that is not to say that ere are not instances and -- they mentioned about france, we have in this year in the u.k. where we have been concerned about the potential impact of the pfizer takeover of astrazeneca. the way we dealt with it is by engaging with the company. with pfizer, to secure long-term -- r & nts to the ready d base. clearly there was a national interest. an effort to engage with it, but within the rules. the french are operating under exactly the same rules that as we are. >> i'm surprised at a number of things. he says the underlying reality is the same as in the u.k.. i think people will disagree with that. and he said sees the ministry

-- minister in france. >> jeffrey immelt probably disagrees. he says it is the same in france as in the u.k.. when pfizer came along trying to buy astrazeneca, it is not like he went to sanofi and said you should put in a bid. >> he would not be that involved. >> no. i think what the u.k.'s view would be is that we want to maintain a science base in this country and therefore we need to protect that science base. the siemens strategy in the alstom story is fascinating and i think it will go down as one of the great spoilers of all time. i think the french have played along with this. >> the global stock market surging today. the s&p hit a new high yesterday. up about 6% so far year to date after janet yellen said interest rates are likely to stay low for

a considerable time. christian schultze joins us now. markets clearly liked what they hear but they don't seem to be pricing in the forecast. they are ahead of the forecast. do you think we're in for some kind of correction or is the growth going to be even better than janet yellen says? are it is surprise nag the markets react so positively. the fed did downgrade the forecast which means it can keep stimulus going potentially for longer but they put that down to temporary factors only. a sign of confidence in the u.s. economy. it will go ahead as planned or maybe quicker. there are all kinds of things you could interpret. it wasn't that much more dovish that would justify a big positive reaction in the markets. >> the growth expectations are still pretty high going forward

for the rest of the year. to come back to the point that you have just been making. are we going to get a carney moment where the fed has to say guys, you missed pricing this. you need to change that, or are we going to get a smooth overition of communication the next 12-18 months? how does its work? how mispriced do you think market would be if we get 3.5% to 4% growth? >> the fed can be wrong about their forecast. as splarl wrong as the bank of england was. -- spectacularly wrong as the bank of england was. i think that is less likely for the fed than it is for the u.k. at once data improve and it is improving after that harsh winter, i think markets themselves will be looking again at the u.s. economic story, will be potentially starting to discuss an earlier exit of the

er rate hike of the fed and that will be in itself a cooling factor for the economy, but a very slight one. >> so you sell this rally. -- saw this rally. there is a slight movement we're seeing in the bond markets. what is the duration of that do you think? >> it is always difficult. there must be a certain relief that the fed didn't get more hawkish as carney did. there is that relief. it didn't get more dovish either. fact that they attribute the entire forecast downgrade to temporary factors. >> and to what happened in the past. >> exactly. means that in the future, we get good data, we must get good data from the fed. if that happens, the focus would shift towards tightening. >> if we actually do have this 3.5% growth raid, which we would need to reach the fed's actual

targets for 2014 maybe equities have further to run. >> growth is good in the long run but in the short run, it may cause volatile fifment >> what is your take on a the labor market in the u.s.? yellen said underutilization remains significant plsm >> it is at 6.33%. the long run is 5-5.5%. it is not that much higher. when it was at 6.3%, you normally wouldn't have the fed with an interest rate at 0.2% or them buying government bonds. i think that government is a little bit overstretched at the the moment burks at the same time, there are plenty of indicators in the labor market hat suggest that even though unemployment rates are low, there is slack that requires ction. the fed is not going to suddenly

correct interest rates. obviously they are going to go gradually. the labor market is improving. >> the wage pressure appears to be coming back. >> yes. >> thanks so much. >> ok. let us move on and find out what is coming up next. coming up, we have a bloomberg exclusive for you. we'll be live with the c.e.o. of electrolux. you're looking at live pictures coming from spain. king felipe is giving his first speech as doing congress after succeeding his father. in congress, he says they are creating jobs for young people, it should be the country's priority. we're taking a break. we'll see you in a moment. ♪

>> good morning, everybody. welcome back. you are watching "the pulse." let us take pulse of the foreign exchange markets. a lot of regulatory interest for hat is happening here. 1.3636 is where we're trading uro/dollar this morning. that is the story with euro/dollar. punching higher there. got to be great news for the euro-zone. going to find you a high when it comes to the pound.

back above 1.70. we are up by .2. time to go shopping in new york. >> unfortunate if you're a new yorker living in london. let's get back to one of our top corporate stories. g.e.'s c.e.o. in france to make his final push to buy alstom's energy unit. jeff immelt will present new detallahassee of his offer to union leaders. matt, where do the two rivals stand right snoup >> i think g.e. still has the inside track here. everyone seems to agree with that. jeff immelt in paris today making further commitments notably to put g.e.'s rail signaling business into alstom as part of this deal. trying to strengthen the rump of

alstom that would remain after g.e. buys the energy stuff. g.e. clearly is ahead in this game. siemens are trying to make life very difficult for them. >> and succeeding. this has been one of the great spoilers of all time. they have come in and played their cards very well and brought in mitsubishi. it muddies the water even further. in terms of what they have managed to extract from g.e. as a result of siemens, how much further down the road do you think geoff is as a result of their involvement? >> well, we had the french finance minister on the radio this morning saying that he thinks all of this turmoil has been rather good for alstom because in the end produced a better deal for the company what happened the government would see as a better deal for france. what he didn't say is we think it is good for alstom because siemens is going to end up getting this deal. even he was not really saying that. what is going son france has

succeeded get more out of this than they thought they would. >> you have to wonder what alstom and their board is thinking. they already accepted g.e.'s offer and g.e. is not actually putting more money on the table. they are just handing out symbolic concessions, handing over the rail business so they can be this giant in french technology. any reasons they might prefer siemens' bid? >> i don't think so. not obvious ones. one thing that has come out of the alstom camp so far is this notion that the siemens bid, several moving parts, is just too delover work essentially. with a stake here. a sale there. it is a lot of work basically. especially in an environment where investors seem to want clear corporate structure. >> it is designed to be confusing, suspect it? >> and it is succeeding, really. >> it is designed to be inparen

tateable. -- inpenetratable. >> mitsubishi is going to pay several billion euros and not get control over anything. >> the whole thing is very hard to understand. i think it is an interesting study in how you make deals in france which remains a very interesting economy and a very important economy for companies like g.e.. they do not have direct role and yet we have politicians from the socialist party playing deal maker. it is interesting to see how this affects the perception of france among investors in the future. >> thanks so much, matt campbell. stay with "the pulse" where we'll be back with more in two. ♪ 3

>> welcome back to "the pulse." as iraq battles extremist rebels and syria's civil war rages on, tensions in in israel are rising. the kidnapping of three israeli teenage rs has prompted a crackdown on intelligence. elliott gotkine has more. >> thanks. i'm joined by the senior researcher. great to see you. we heard overnight there were gun battles and troops searching for these abducted teenage rs.

how likely is this to spill over if you like into some sort of conflict with gaza? >> it is very clear that the idea for -- does not intend to carry out a major militaryry operation in the west bank against hamas. reserves haven't been called up. it is only regular forces engaged. having said that, each day that goes by with large numbers of troops on the streets in west bank cities, the likelihood of a flashpoint going off becomes more likely. the longer it goes on, the more possibility of an explosion. israel doesn't want that. that is the kind of operation that we're seeing. >> the ongoing talks have resumed this week with iran. how likely do you think it is that those talks might succeed and where will that leave things with israel?

>> we're getting close to the deadline, july 20. it appears the differences are still quite major specifically with regard to the amount of uranium inrichment. they say we should be able to enrich as much as we want. the west much less sure of that. my sense is that the gaps are quite major. we could be looking at an extension of the deadline from july 20. >> while all of this is happening, iran might be on the same side as the u.s. in iraq in this battle against these rebels. we're seeing now since last friday in baghdad organizing the defense, the other sunni elements there. the americans are much less sure of exactly what they want to do. my sense is if they intervene from the air, it will be a pretty minor intervention. perhaps drone strikes of one

kind or the other. the american commitment i think is much more questionable. >> we'll have to see how that plays out as well as all the over geio political issues. i will hand it back to you in london. >> thanks. elliott gotkine live there from tel aviv. >> coming up, the chief executive of electrolux. it is a bloomberg exclusive. do you really want your cooker to be connected up? does it really matter? is it going to make a meaningful difference to your life? >> probably not. don't you want your baby monitor to be remotely accessible? >> i don't want to be that far away from my children. >> that is a good point. you want your garage door to operate. it is really all worth it? >> is it going to make a

meaningful difference to our lives. the electrolux c.e.o. is coming up. i'm at guy johnson tv. olivia sterns is easier at olivia sterns. we're taking a break. see you in a minute. ♪ .

>> welcome back to "the pulse." these are the bloomberg top headlines. fighting in iraq continues. local police it am taken back control of the countries a guest oil refinery that had been seized by extremists yesterday, wednesday. >> the fed is sending mobile stock markets higher after reassuring investors rates would remain low. janet yellen says monetary stimulus will continue until the central bank achieves its goal. >> the committee believes

economic activity is rebounding in the current quarter, and will continue to expand at a moderate pace thereafter. let's go to spain. king felipe they has just finished giving his first speech as king after seceding his father. he said creating jobs for young people should be the country's priority. he also said spain has a moral duty to help those hurt by the economic crisis. quick look ata how european markets are trading this morning. thank you. equity markets and takers of risk are appealed by these markets on the back of what janet yellen said. christine lagarde is about to tell mr. druggie what he should be doing -- what mario draghi should be doing.

would you dare to tell the fed what to do? u.s. equity futures are higher. combined with china, growth rate of 7.5% and the prospect that maybe christine lagarde could be right, maybe we do need a vast flood of qe in bonds. share of buybacks coming through at rolls-royce and the delivery of over 4000 engines by 2023. rio tinto, a nice reflection of what is going on in the overnight market on the back of the chinese market. >> thank you. exclusive, another

ledger luxe has been serving of innovation since 1919 -- electrolux has been serving up innovation since 1919. from theoins us now taste of london festival, the hottest food festival in london. good morning. a food festival in london. talk to me about how tech meets and or washing machines nothing like that. do you think consumers really hereby connecting all of these devices? >> i think consumers will care about appliances. we do believe appliances ultimately will be smart, green, and connected. in order for that have value to the consumer, it has to be convenient and simple. some examples are, you can remotely turn on and off your

appliances. if you're in the office and are going home and it is a humid day, you could bring up the air-conditioning. you can do remote diagnostics. we can sense with the performance of the appliances are. those are the kinds of functional things. a more exciting things for consumers, into your point, it has to have a rock consumer benefit, is what if we could bring professional cooking capability into your home digitally from a tablets and your mobile phone smartphones, even directly into your ovens so you can prepare a rack of lamb and professional levels? there are lots of opportunities for connected appliances to bring benefits to consumers. >> it sounds fantastic. everybody would love the idea of an oven or my knowing how to perfectly cook your turkey, for example, or even a pie, the consumers have struggled to adapt to technology.

nobody knew how to program their vcr, now it is much higher. as the appetite really there from consumers to have everything from the refrigerator to their toaster remote-controlled and accessible from the office? >> i think the bigger opportunity first tier point, nobody needs or nobody wants 80 different apps to control different refrigerators and washing machines and dishwashers and tvs come so first, there has across protocol industries. across software, white goods, brown bids, so there are protocols and standards so it is easy for consumers. that is one thing that has to happen that is underway. it needs to happen to your point so it is easy and seamless for consumers. we do think consumers ash we see opportunities for consumers who call -- alle consumers want with the prozac.

it doesn't matter if it is golf clubs or ovens. they want the best of the best. an important china technology development in our industry and electrolux in particular because we have a 90 year history were over have to michelin star restaurants in europe have electrolux appliances in them, we're bringing to the domestic market what the professionals have, which is technology like steam cooking, induction cooking. we're bringing what are in this world class restaurants into the homes and be able to connect -- giveitally and begin consumers and users the hardware and software, the recipes, the capabilities the chefs use, into their homes. it is exciting, tivoli the trend with consumers around -- particularly with the trend with consumers around food. we are here in london and having a great time. >> am i going to have to worry about data in your company?

am i going to have to think about what this data means from a security point of view? am i going to have to worry about my washing machine being a security risk for my home network? we are opening up ourselves to a whole new world here. >> absolutely. you're right on point. privacy is going to be a critical part of enabling this or allowing this to happen and for consumers to tap into it. on everyone's agenda, certainly on our agenda, privacy and individual privacy will be and must be a critical element so consumers are protected. absolutely has to happen. >> do you cut out the retailer in this environment? my relationship is going to be with you. you're going to be providing me with the cooker, the link i have. how does that change the retail relationship that you have established over so many years? i think that collaboration

with retail continues. we are not delivering, we are not installing or building in the cabinets. we are not servicing. that is going through our retail partners and trade partners. it is more of a collaborative effort. and will continue to be. the trend, though, we would see in our retail partners with c, 50 years ago, most of the power was with the people who made stuff, the manufacturers. in the last 20 years, it has been the retailers having most of the power and the ability to transfer information to consumers. clearly, it is with consumers now. we all have to adjust to that and make sure we are together with those consumers. >> we were speaking earlier today speaker of -- ceo of l'oreal and he said he is bullish on europe. are you confident with that? we would say, our view is,

europe and the eurozone has in fact left the longest recession since world war ii. it looks pretty straight to us and we're pretty confident the eurozone is coming out of the recession. bullish, if that is interpreted as robust, we would not go quite that far. we do see recovery, even in countries like spain and italy. france is still a little bit weak from the appliance market. u.k. has recovered, probably led the recovery. nordic europe did not feel it too bad, so it is a bit of a mixed bag. we think it is a positive territory. we think it will be a gradual recovery. to some of those countries you're been talking about, what impact you think the rising rates will have on consumer behavior? >> in terms of interest rates from it probably matters how fast they go up.

for appliance demand, there are several key factors that drive that. one is consumer confidence. two is housing activity. and three is interest rates. part of consumer confidence is the unemployment levels. those are the three or four key variables we track and you can predict kind of where housing demand and then, ultimately, appliance demand will go. if interest rates go up, that has a negative effect. it looks to us like the cost of capital has been and still is starting at pretty affordable levels. we're not overly concerned a slight rise in interest rates will dramatically affect demand. >> keep, i would ask about brazil. you're the market leader in brazil and all eyes are on the country with the world cup going on right now. brazil hasews around been negative. we keep hearing about downgrades and growth forecast. what are you seeing on the ground?

are you seeing a slowdown in the consumer environment in brazil? particular,, in brazil and argentina, there is a slowdown from an appliance demand standpoint. result has grown double-digits in the last dozen years. strong economy there. 30 million, 40 million people have formed households and by washing machines and refrigerators and we'll see that demand for a long time. part of that demand has been consumer stimulated by government incentives, so we kind of knew it was a little overheated and needed to correct. we think we are seeing that correction, which is probably a needed correction. there is a slowdown in the consumer buying patterns. the world cup has all the attention of the brazilians. whenever brazil is playing, it is a national holiday. buying patterns stop there as well. we think there is a slowdown and probably a needed correction.

we are thinking is more in a few quarters versus a few years, but the fundamental of the emerging middle class will continue to stimulate demand. that is our view. >> keith, a pleasure. thank you very much for your time. ceo of electrolux. enjoy the event. it looks like it will be quite tasty. >> new energy top headlines, solar cell prices have fallen the most in 19 months. that is amid a trade dispute between u.s. and china. it is some chinese companies holding back purchases ahead of the u.s. pulmonary anti-dumping ruling against the nation -- preliminary anti-dumping ruling against the nation. >> emission reduction goal, ambitious, foster investments. the panel includes experts from the international energy agency and the oacd. they also said the eu needs a low carbon energy union and targets for energy efficiency

and were nobles. >> german winter maker has won .hree turkish windfarms it will obtain the towers and some of the rotor blades locally. they will be built next year. >> ready, set, buy. l'oreal's chief executive said he is just getting started with $5 billion in acquisition so far this year. we will bring you more from our exclusive interview when we come back. ♪

>> welcome back to "the pulse." world slow just cosmetics buyer is back on a buying spree. la-based cosmetics company in a rare interview, and a rare interview, the ceo spoke with us in paris about the market in europe and north america. the market was sluggish itself. it is a very contrasted situation. on one side, the luxury business is doing pretty well, the luxury market is growing pretty well. the mass market itself has been really flat over the year. that is due to maybe different reasons, but sales have

increased sluggish. this will definitely help to boost our sales. it will not be the only thing. to increase market shares, to grow organically on the market itself, but it will be a serious help. quick it is a must the end of the second quarter. how bullish are you on europe? >> i'm confident europe is back. it is not the growth of the market like in china, of course, but it is positive. and the very good thing for us, l'oreal, is it is also the fact southern europe is back. southern europe has been very different for six years. spain, portugal, italy, greece were very tough. these were countries where we were very strong. it really impacted us very much in the past six years.

for the first time in the first -- for the first time in six years, the first quarter of 2014, the markets there are flat and we are positive. so it means this could be the growth region. ofthe other countries europe, we're doing pretty well. we are having success in germany. we are doing very well in the u.k. europe, for us, is a positive region. >> do still forecast market growth of 3.5% this year and are you still seeing l'oreal will exceed this forecast? >> the answers are yes. the first is, i think the market 3.5%probably be between and 4%, as i said before. i don't see any reason why it should be very different from that. yes, our ambition is to expand

on the market. themission is to outperform market every year. so some years we are off by far, others, less. the ambition is to grow our market share every year. and to grow it for you have to depend on the markets. >> seven years after the iphone debuted, amazon has entered a very crowded smartphone market. the fire has 3-d technology. also, image recognition. it goes on sale in the u.s. next month. cory johnson was at the launch in seattle. item of thet, the .oment, the amazon fire phone this phone is interesting. there are a couple of things that make it different than your standardized smartphone or iphone. one, dynamic perspective.

effect, essentially, that allows the phone to have a 3-d thatram-like image on it allows things to rotate and see things a little bit better with things like maps and so on because it has four cameras that face the user that allow it to recognize how you're looking at the phone and given a justin pugh. it is a fascinating thing to see. something that amazon hopes will distinguish the phone from others on the market. the other thing, something called firefly. you have a camera where you point it at something in your house or in the store, identified that thing, price it and buy it on amazon store. it will also help you listen to music and recognize the music, even recognize scenes from a movie or television show. it instantly takes information about that stuff whether it is wikipedia entries or imdb entries with information about movies and television shows and so on, all that driving more

business into the amazon ecosystem. perhaps allowing people to buy up a lot more stuff at amazon. it makes it even more possible, the phone will be 190 nine dollars subsidized shortly from at&t, but will also come with a one-year amazon prime membership. that means the people who have this phone be much more likely to spend loads of money on amazon, so amazon i be subsidizing this phone, at&t may be, it may drive a lot of topline revenue amazon itself. basically, a mobile cash register and a push all of your shopping on amazon.com. >> look at the images. >> i am very excited about this phone. there's a lot of concern. we've seen so many people come up with their own signature. facebook comes to mind. they had that htc phone.

that was a flop. this had some cool new features for shopping. i know you are a good shopper. when you tilt the phone, you can scroll down to browse. because it has the 3-d effect, you can see the various size of products. so say you want to buy a new handbag, guy johnson. you can pull up the handbag on your amazon phone and turn the phone and see it in three dimensions. >> you have done your research. >> i mean, i've bought a handbag or two, and i'm pretty excited about this. >> are you really going to buy your next handbag on the phone? online. people buy them either way, this is a real threat to show rooms. i will still go into the store to have the look and feel, but i might go to amazon to close the deal. >> when olivia buys her first handbag on the fire phone, it will be something we need to

talk about. she mentioned facebook. there was a glitch. sorry, was the message that was sent out earlier. facebook users across the world were unable to access for 20 to 30 minutes, the longest outage in recent memory. for productivity, i'm sure he will spike over the next two months when you look at the data. we will take a break and back in a couple of minutes. ♪

>> welcome back to "the pulse." let's talk about the foreign exchange markets. throughworked our way 170 once again. it looks as if we are holding their. ..7019 is where we are trading pressurer is under pretty much across the board. >> for what we're watching, we're joined by ryan. somebody dropped the "f" bomb. >> i've been watching when the foreign minister of one country uses the "f" on to describe the leader of another country. that is what ukraine's foreign minister or now former foreign minister said last week to describe the russian president. he was at a demonstration outside the russian industry --

embassy in kiev. he was really upset. in any case, he was fired half an hour ago. >> that is it for "the pulse." see you tomorrow. ♪

and abruptlyact the dow surges as janet yellen signals further accommodation. the white house begins to distance itself from iraq prime

minister malarkey. -- maliki. fire phone. uphill battle. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york city. it is thursday, 219. i am tom keene with scarlet fu and adam johnson. u.k. ant to start in the retail sales for first time in four months. we get that news effectively 24 hours after the bank of england governor says, market, you better wake up or we're going have to raise rates at some point. >> it is a swirl. his central banks world right now. chair we got more of yellen yesterday. claims.itial jobless