mayer. she is still struggling to turn around sales at yahoo!. investors are looking on the bright side with cash coming in from ali baba. initial share sale, the biggest hit in the u.s. on record. sharesere in europe, could be on the downside. sales don't meet analyst seemings and deliveries to suffer for 2014. >> thank you very much. tech, the sector in focus this morning. even the fed has something to say. janet yellen comes up later this evening. make sure you watch that. markets just opening across much of europe. manus cranny is at the touchscreen. >> equity markets, let's just see, they are probably going to wait and see what more established voice gave a get from yellen. those notes that came out talked about valuations.

you've got equity markets rising. the dax down by 0.3%. let's check in and see who is driving. citigroup down by a third. it is almost as if the equity markets want more focus on the giving side of the testimony from janet yellen. versus not being concerned about bubbles, versus the fed reserve being concerned about technology stocks. china gdp coming in higher than the market had estimated. there is very little to drive the market higher. the conclusion comes down to this, the china data is being trumped by the federal reserve both in terms of janet yellen's delivery and in terms of what the federal reserve report actually says about where we are with overvaluation. that is going to play into the market. ryan and caroline both mentioned

a couple stocks on the open. let's see if we can get any valuations on -- asml. we will take you through the details of what extreme ultraviolet delivery in terms of machines. , you are seeing a total income rise of 16%. they are validating the purchase of brussels. rio tinto up 1.7%. iron ore production up 11%. it depends which way you want to read this market. for an iron ore producer, growth numbers coming from china. depending on the reliability, it is good news. they depend on ore. copper production has raised. with just quickly check in one currency that i was checking on throughout the morning. the new zealand dollar. inflation comes in below estimates. the biggest drop in the new diesel and dollar -- in the new zealand dollar in almost seven

weeks. the question is, will that momentum continue? john, back to you. >> thank you very much, manus. that is your market open. joining us for more perspective is stuart richardson. he is chief investment officer at rng wealth management. welcome to the show. we will get to tech stocks in the moment. what was your take away from janet yellen yesterday? >> her personal view is that you can keep policy very slim for a very long time. i think the fomc is getting more divided. some of the regional governors have gone on record saying they think the policy is too easy and we need to think more about raising rates quicker. really the market doesn't want to see this. it is a bit worried that yellen is going to move a bit more in

line with regional governors and policy will be tightened quicker. she doesn't want to upset the markets but she may not have full control. >> when you look at some of these forecasts, the dispersion is so wide. south of 1%, north of 4%, there is no consensus at all. it would be a push to say she did a carnet yesterday but it is more measured. she started to introduce a little bit of uncertainty on both sides of the debate. if the labor market comes in stronger than expected, we might hike rates quicker than you expect. it is her job to evolve that message and make that message more nuanced? >> i think our job is to lead the committee. her personal views are a bit different from the committee at the moment. it is a broader committee consensus that she believes the economy is doing much better.

it has healed a lot since crisis. therefore policy needs to be more in line as well. 3.5%, 4% over a period of time. they don't want to go from 0% to 3% overnight. they are going to do it in a more measured way. if things go better than expected, we will be raising rates. if they don't, they don't want to raise rates at all. she is playing the role of committee chairman. have got to read between the lines as to what that means. policy will be tightened relatively shortly. >> one thing we don't really have to read between the lines thethat was not really in q&a session, it was in the fed's monetary policy report. i want to bring up this quote. it is about social media and biotech firms and the valuations according to the federal reserve appear to be "stretched." my take is it is kind of like

the cookie jar with the lid off. the kids have themselves a cookie. monti comes along and tells them off. not really much you can do about this. it is symbolic. we have from the bis one central bank out there saying, we are going to try to calm the party down. yellen seems to be more on the dovish side. she doesn't want to upset the markets at all. to say we think valuations should beast -- together with the vis, the bank of england, they have been a leader in terms of policy changes. to us it seems to be a big change in central banks and developed markets. toy are looking to get back -- they have some firepower to help out. >> it was a big call to say valuations were stretched.

a lot of people were saying, we know. if you look at the reactions on stock market, facebook, linkedin, they were lower. the most you are seeing is 1%, less than that for some of these stocks. how do you play equities right now? you look at those comments, those moves in the market. where would you be putting your money? >> first off, the fed have let complacency get out of hand for quite some time. we are not going to see a wholesale collapse at night. this is a clear warning sign that the fed thinks these valuations are stretched. we think it is part of a process. we think the heat will come out. in terms of where to put your money, i think the u.s. market, broadly, the valuations are stretched. in terms of globally, we think japan is still cheap and that is probably a geographic area where we focus more money. >> stuart richardson, you stay

with us. we continue the conversation on technology. more on "on the move" coming up. we have all the big names covered. ♪

>> welcome back to "on the move ." i am jonathan ferro here in london. we are streaming online, on your phone, amazon tv, apple tv. here is a stock on the move.

portugal telecom. up 1.37%. portugal telecom holders will take a smaller stake in the oi merger. afterake will be 25.6% they default it on loans. shareholders with telecom merging with oi but that is for a smaller stake than previously anticipated. the stock up this morning. we continue to talk tech. apple and ibm are putting an old rivalry to rest. ryan chilcote has the details. plus, caroline hyde is watching the chipmakers. ryan, start with you. walk us through this big deal. ryan, sorry about that. problems with your mic. caroline we look at the yuan asml. in line with estimates.

full-year results perhaps something to worry about. >> you are right. second-quarter figures pretty much in line with analyst estimates. we saw sales at one billion euros. why is the stalk off by 1.5%? it is all about the outlook. sales not living up to expectations. let's remind ourselves what asml does. it makes the equipment that makes chips. the likes of intel, gsm, samsung, are there, the people that buy these products. they are not buying the new machines as quickly as anticipated. perhaps they are not getting the new phones with a powerful chips as quickly as we thought. small chips, more powerful, that is where the investment of asml has been going. they are making these new extreme that make ultralight. a few of those orders have been postponed until 2015 because the demand isn't quite there.

just a few of the chipmakers putting off those orders. that is why 2014 full-year sales aren't going to rise as had been estimated. asml says they are only going to rise 1.6%. maybe the future bodes well. intel winning in terms of analyst estimates. they saw profits up. they are doing better but maybe that demand for chips isn't going to filter through to the machine maker until 2015. >> another tech company showing perhaps disappointing sales, that was yahoo!. alibaba the shining star. marissa mayer still having problems. >> she has been there two years now. stillined july, 2014, having to paint a picture of sales deteriorating. they cannot get the advertising spend. they are still being whipped by the competition.

google and facebook, they are luring in the advertising instead. they have got the content, they have got the better ways of dealing with advertisers. marissa mayer has been trying to turn this around. she has made investments. new products, new content. blr, a blogging service meant to draw in the younger users. as yet she is not convincing companies to spend their advertising box quite yet. instead, investors are having to look to the right side of alibaba. we got news from marissa mayer that they are going to be holding onto more of alibaba than we thought. 23% stake they currently have in alibaba, the chinese e-commerce company that is going to sell shares in america valuing at about $168 billion. it is going to be the biggest share sara on record in america. they are going to cash in less.

they are going to sell 140 million shares. about one third less than had been anticipated. the money they get from that, they will give at least have to investors. they will win out in the future by holding onto a bigger chunk of ali baba. so, good things coming from ali baba. not so good things coming from advertisers. >> thanks, caroline. apple and ibm. there is a deal. ryan chilcote, hopefully this time i can hear you. >> take two. it is always better the second time around. this is not a story that is going to move the market today but it will take all those that are over the age of 40 like me. the first mac came out when i was 11. that is 1984. it was advertised at the super bowl game. ibm was the company to beat. apple was the challenger. fast forward three decades, it

is the other way around. a little bit about what we have with this partnership just announced yesterday between ibm apple is, if you can't beat them, join them. are going to work together to create business apps for iphones and ipads. sounds like a good idea. investors think it is. while lots of business people out there use their iphone and ipad for business, it is sort of business-light. you browse the web, check your e-mail, look at your calendar. how often do you get that approval for that expensive dinner from your manager straight on your iphone? that is the kind of software that ibm is really good at producing. for corporate customers out there. this is a great opportunity for apple to reach out to those when it comes to analyzing data, cloud computing.

it is good for ibm because they get the buzz of apple. they use their sales to get a product out there. they can tap into this very large market. company, the world's largest engineering company, certainly the largest in europe. they have 30,000 people using iphones. software,t this new that is maybe a chance for both of these companies to do a bit more. >> ryan chilcote, i do not do expensive meals. there is my disclaimer. i find his apple deal quite intriguing. i see that tie in with ibm. i see the rumors developing with the likes of nike. that is intriguing to me as a broader strategy. what are the investors saying? >> they love it. shares up 2.5%. apple shares went up almost 2%. the loser in this was blackberry.

there shares fell 3.5% after the announcement. to put things in perspective, for ibm to be a successful weiness investment story, have to put things in perspective. look at the last five years. has risen over that period about 70%. sounds good but the s&p rose in that same period if you include dividends about 120%. apple, we always talk about, does it have growth ahead of it, but over the last five years apple has returned to its investors with dividends more than 300%. ibm has got a little bit of catching up to do. >> thanks very much, ryan. stuart richardson still with us. we heard about some of the tech earnings. not exactly inspiring across a lot of those companies. we are just dipping into earnings season. it is very easy to paint a garish picture.

equity markets though, the bulls are winning. why are they right and why will they continue to the right? whereause of this process estimates get downgraded. they want to beat expectations. everyone says, what a great earnings season. it is a charade. you have to look at this on the longer-term. the earnings have not been too bad in the last two or three years. revenues have been pretty mediocre. buybacks seemare to be boosting shares. ,hen you look at revenues revenue growth, that is the indication that it is not brilliant out there. while the ball so excited? it is because of fed policy. they believed up until recently we would get continuous qe to push the market higher. even as qe has been tapered.

it feels like in the big picture the central banks seem to have shifted in. it is about how we start to get higher rates. at some point they have to say, we have to let the market find its natural price. if we have been distorting prices, they have got to let the market clear the natural price. we don't know what it is. >> i hear a lot of people say this. we have to rebalance, restructure. it is not that simple, is it? you can't have yields pushed to walkfar and expect away, remove the stimulus, push up rates and be ok. >> this is one of the consequences. you can't manage your economy and manage the markets. creates the high risk we have talked about before. if a state is too late to the party, we get a bubble and we

know the outcome of a bubble when it bursts. to step away now, try and get rates higher and whatever happens in the market will happen. it is not going to be a smooth ride from here. >> how do you position for that? >> you have to be ultra-cautious now. .e have seen the market up it is not the cause earnings have been fantastic or revenues have been fantastic. we have seen a massive expansion. there int is right up terms of expansiveness. you have to be very careful about this. looking around, it might be japan. they will be printing money there for some time to come. -- we have to is be clever about where we put money. >> stuart richardson, chief investment officer at rmg wealth

management. coming up, a $15 million scandal. ♪

>> welcome back. i am jonathan ferro here in london. coming up, airbus, the news on them. $38 billion in deals. the biggest was with air asia which bought 50 of the new a330

neos. bloomberg's anna edwards spoke to air acted if -- air asia's chief executive. is one of the 330 greatest aircraft ever made. there is not a lot of choice. for four years i kept pushing airbus to re-engine this. they were fixated on the 350. >> you told me you were harassing them. >> i really was. >> how long have you been harassing them? >> four years. they told me know in many different languages. politely. they came through. they built a beautiful looking plane with a new wing. it will enable us to grow much quicker. tony fernandez, air asia ceo,

no end to his talents. he runs airlines, designs planes. elsewhere in company news, these are the big ones. the pentagon has confirmed that they f-35 will not make it after the fleet was grounded by fire. the manufacturers, lockheed martin, hope to boost foreign orders. shares of qantas fell on the announcement that the carrier will remain majority-owned by the australian government. australia backed down on its proposal to allow increased foreign investment and will keep a 49% cap on foreign ownership in place. the airline has been forced to cut jobs and sell aircraft. a battle with virgin australia drove it to a loss in the first half. that is your company news. coming up later, bringing new life to a timeless classic. we will show you how one business banks on bringing the porsche 911 into the 21st century. lots to talk about.

i will be back in two minutes. in the meantime, you can follow me on twitter. ♪

>> welcome back to "on the move ." i am jonathan ferro joining you live from the city of london. it is a: 30. as you can see, we are at session highs. up 0.5% on the ftse 100. janet yellen's message is, we will stay easy but there is signs of complacency and fraud. three stocks to watch. manus cranny is at the attached screen. >> let's pick up on some of those themes. the iron ore producers. that is really helping. iron ore production up 11%. they are expanding operations in western australia. copper, they have raised

full-year guidance on that. goldman sachs trumps everything. they come out with commodities this morning calling iron ore at a price of $80 over the next five years. copper at $6,600 over the next five years. if you thought brent was spared, it is not. $100. gtech is out there. they have made an offer for international game technology's and they are paying an 18% premium for the honor. $18.25. keep an eye on that. the spirit of cento up 6% -- santo up five point 79%. the ceo is -- 5.79%. that could come from a number of key shareholders. that is giving a little bit of a boost. back to you. >> thanks very much, manus.

here are the big headlines. janet yellen told lawmakers the central bank must press on with record monetary stimulus. >> although the economy continues to improve, the recovery is not yet complete. even with the recent declines, the unemployment rate remains above the federal open market estimate participants' of its longer run normal level. >> day to with janet yellen today. that will be keenly watched. israel renewed air raids on the gaza strip after a palestinian rocket attack left an egyptian truce proposal in tatters. the israelis had accepted but hamas said it was not consulted on the plan. within six hours, 50 rockets had been fired from gaza into israel. that attack left one israeli dead. china now, economic

growth accelerated for the first time in three quarters. gdp came in at 7.5%. that beat economist estimates. the government has sped up spending and freed up more money for loans. restructuring? what restructuring? china's economic growth will be watched by anyone. one of them is rio tinto. they delivered numbers this morning. iron ore prices have plunged this year by about 27%. rio tinto, the number two miner of course delivers this morning, rising 11%. they cite australian expansion. to talk about that, bloomberg news' jesse who covers european commodities. for more, we are joined by john mayer. good morning. jesse, we are going to start with you. what is the top line for the numbers? >> broadly in line with expectations. iron ore, they are a dominant

player in that market. the second-biggest exporter. that came in line with bloomberg news survey's. copper standout was in where they beat estimates. they upgraded their full-year guidance and that is probably resulting in the stocks outperforming this morning. >> john, let's bring you in. when you see iron ore down by about 27%, how could you stay bullish on rio? >> look at the production performance. it is incredible. sam watters really delivering not just in iron ore, but in aluminumven the division doing pretty well. sure, the iron ore price has come off, but most of that is witht by what is going on good quality iron ore being sold into china. the question i would ask is, how can china carry on absorbing

this much material? because rio is better than the iron ore producers in india generally, it will displace other material. i think the chinese themselves are closing a lot of iron ore mines and preferring to take the rio's material as well for environmental reasons as much as anything else. rio should emerge as a winner out of this. feeling that iron ore prices could rise a bit through the second half. rio is well set to benefit. >> jesse, some of the other big minors reporting. who is going to be the loser? we have bhp next week. >> they are not as exposed to iron ore as rio. winkler coming up as well. rio is the most exposed. bhp should fall to fairly dead numbers. there was a bit of a disruption in the quarter. >> jesse, you talk to a lot of

the ceos. john, you look at the companies and how they operate. how concerned are you about china? not just for the likes of rio before the mining sector in its entire ready. >> the market was very worried about china. they made a lot of comments about slowing the economy, anticorruption, environmental regulations, which we support all of that. while they slowed things down a lot earlier this year, they seem to have taken the foot off the brake and allowed things to speed up again. they are still consuming the iron ore. they are still increasing steel production. the economy is still motoring ahead. aboutre talking earlier good chinese gdp numbers and impressive capital investment figures. it is still growing. >> one of the big focuses for investors on rio is the prospect of a share buyback next year.

>> they have been good with capital expenditure control so i think there is every chance of -- a meaningful share buyback next year. >> china continues to expand, 7.5%, if they refuse to restructure and you continue to see this kind of growth, is the risk that the mining sector and to ag companies move back picture of overcapacity and oversupply? >> i would have said yes to that but now that we are seeing 20% to 30% of chinese iron ore mines being shut down or already shut down, and i think we are going to see a similar pattern across , they have become more energy efficient, more environmentally conscious, i think what will happen is the more efficient western producers will displace that and shut down chinese production. i think

things will be ok. >> thank you very much for joining us. rio delivering solid numbers today. the stock up 1.7%. coming up, a short-lived peace proposal is shattered as israel and hamas trade airstrikes. we are live in tel aviv with the developments next. ♪

>> welcome back to "on the move

." i am jonathan ferro here in london. to the middle east now. back for an egyptian cease-fire elaborated yesterday after hamas rejected it. our middle east editor, elliott is live in tel aviv. more rockets, a more airstrikes and more death. about the size of it. quite a depressing spectacle. this conflict now even more long-lasting than the last one between israel and hamas in 2012. we our in our ninth day. no signs of it debating after that cease-fire was rejected by the militants and they carried on firing rockets into israel which has resumed airstrikes against gaza where the death toll is now above the 200 mark. a few of those women and children. spectacle.ressing since we have moved away from that cease-fire, hopes that we

may be inching towards the possibility of some kind of ground invasion, not a decision that prime minister netanyahu has made yet. troopsave been reserves called up in preparation for a possible ground invasion. yesterday we also had our third israeli casualty when a mortar exploded injuring a volunteer who had gone down to see the troops and take them food packages. >> the big concern with this story was the chance that there could be a grand invasion. on the one side, what are the prospects of that? could we actually get a cease-fire? >> things can go either way right now. hamas is feeling a little misled. it says that egypt didn't consult with it over the terms of the proposed cease-fire which israel accepted. it was feeling a bit left out.

strategic objectives are unclear. it is furnishing its resistance credentials. it is also showing its newfangled technology, that it can keep firing rockets despite the onslaught from the israeli air force. it even has drones in its arsenal. the israelis one rocket firing to stop. they want to weaken hamas. at some point there has to be a cease-fire. how far we go, we don't know. the last time there was a ground invasion was 2009. more than 1000 palestinians died. i don't think anyone wants to go that far again. that doesn't mean we won't go there. >> thank you, elliott. stay safe. the tensions are not just in the gaza strip. considering new sanctions on russia as they meet in brussels today. the u.s. has been urging its allies to take a tougher stance against moscow. good luck with that. ryan chilcote, will they get that stance?

>> not to tripoli eyes -- not to the situation in the middle east, but if you look at the conflict in east ukraine, hundreds of people getting killed. the calls for some kind of diplomatic solution and for russia to be part of it are getting louder and louder. -- to, the mechanism true try and a conflict that has been to threaten russia with sanctions. what we had from the european union is that they sanctioned 72 individuals, froze their assets, banned them from traveling to the eu. that is not very far. the way they divide up the escalation of sanctions is into three tiers and we are still in tier one. the u.s. would like the european union to take it further and ban arms sales. france is about to sell a warship to the russians that is for helicopters. >> this just shows the commercial incentives for these

countries not to step up sanctions. they talk the talk. when are they going to walk the walk? does this crisis need to escalate for that to happen? >> the crisis has already escalated. what it isn't is a declared war. if you do the test, it looks like a war, sounds like a war. that is what the foreign minister is saying. this is a full on war. , thee in the u.s. saying separatist leaders, they are agents from moscow. the u.s. was making these allegations yesterday. there is a staging area for russian weapons to come over the border. question is, you have italy, france, austria, other countries that don't want to bite the bullet. side, you have russians i consider this a badge

of honor. you know the chief executives and the investors. you probably know some of those guys under sanctions as well. is it a badge of honor or is this actually biting some of these guys? >> i can tell you about one. badge of honor, sure. isple think that the west really out of line and out of step in russia. but it is not something that they take lightly. if you are a minority investor in a company that has been sanctioned, you can't get your dividends out. there are very serious issues involving these sanctions. macro economically, the threat of sanctions plus the sanctions we have has completely shut down all investment in russia. people are concerned about it. they are hoping that it stays here. to answer your question about whener it will, i think the foreign minister says we

have a problem, i think all of the eu countries recognize that. they will do something. the question is, what will they do? will it be a significant step from what they have already done? maybe not. >> ryan, thank you very much. "the pulse" with manus cranny is coming up. he will round up the latest news in tech from apple's ibm partnership to yahoos latest results. that is with passion capital. plus, the auction house. christie's reports today. we will discuss the rise of the business in china with the ceo. bill o'neill at ubs wealth management explains how china will transition to a more consumer-driven economy. all of that and more coming up in "the pulse" with manus cranny. now, mr. bernie ecclestone, the ceo of formula one has taken the stand in munich with an unusual defense. i bribed someone but not for the reasons you think. hans nichols joins us from

berlin. what was the bride? -- the bribe? >> according to mr. ecclestone, he offered $50 million because he didn't want information about a family trust to be revealed to u.k. authorities for tax purposes. essentially, his argument is, yes, i bribed him but not to influence the sale of formula one. this all has to do with the individual. what mr. ecclestone said. him, would $50d million be enough, hoping this would be enough to keep him quiet. quiet about a potential tax shelter in the u.k. ecclestone previously admitted to paying $44 million of it. he went to the stand and offered his reasons for paying it. it was to hide a tax shelter.

he is 83 years old. this is his defense. we will see if the jury buys it. it is remarkable. manyw you don't make excuses, but when you do they are always for something that are more outrageous than you are actually accused of doing. >> tell you what, if i ever make excuses, they do not involve $50 million. on the business side, you have john malone. he wants to buy. where does this leave him? which ended upvc taking over 35% of formula one, they are still about $1 billion apart on the valuation. this was in mid-june. malone wants to buy this stuff. he has content for a cable empire. you want to have an empire, you need content. formula one despite all its problems is still very popular.

advertisers want to pay for it. >> thank you very much. we will stay with fast cars. from formula one to porsche. a love letter to the porsche 911. how romantic. a business brings new life to the timeless classic. the creative director spoke to us about the meticulous craftsmanship that goes into every one of these designs. >> this car has millions and millions of fanatical followers around the world. it is not by chance. it is because of design. my name is rob dickinson. oldestore and modifie porsches.

part of our mantra here is that this car is not meant to look like a custom car or a car that has been fiddled with. porschewill always be a 911. everything we have done builds on that proposition. it has been lavished with some passionate love by a bunch of lunatics here in california who respect and honor what porsche did. the first time i was introduced to the porsche 911 was on southern vacation with my parents. it made this incredible noise. as a five-year-old, that fascinated me and inspired me. we call this our captain america car. clients are a wide and varied bunch of people. they have an exquisite level of aree and they also gentlemen and ladies with a certain amount of net worth.

start at about $180,000. our work here is one of admiration for a company that we love. to keep these cars on the road and attempt to make them better than they were and give them a second life is an honor for us. 911 expends no energy into finding itself. it just is. >> fast cars, high-end luxury. stay with us. up next, we go inside the fastest private jet in the world. got some tens of millions of dollars to burn? ted -- stay with us. ♪

>> welcome back. the makers of the world's most expensive private jet are expanding their range. bloomberg spoke to gulfstream about their latest plane which carries you in comfort at nearly the spirit of sound -- the speed of sound. >> we are sitting inside the largestam g-650, the business jet aircraft available. it is the longest range business aircraft, the largest cabin and

also the fastest certified civilian aircraft in the world. it is a cutting edge technology aircraft with an advanced cockpit, really the most advanced systems jet on the market today. standard fairly layout. this arrangement seats 13 for both eating, sleeping and working. the airplane is capable of flying for almost 16 hours. typical missions at 9/10 of the speed of sound. it allows you to get you to your destinations quicker than any aircraft in the world. the price is $64.5 million plus installation. we have a backlog on the airplane that extends through 2017. you have to wait your turn. it is worth waiting for. >> that is it for us on "on the move." stay with bloomberg television.

manus cranny is back with "the pulse" next. the ftse is higher. in the meantime, follow me on twitter. ♪

>> optimism in the air, european stocks rise as china's growth beats estimates. apple and ibm team up to tackle the corporate market. yahoo! keeps a bigger stake in ali baba. the e-commerce giant prepares to go public. we are live with christie's ceo this hour at the auction house.