e russian president will have talks with his ukrainian counterpart at a summit. we are live in the capital. >> france's reshuffled president hollande will rename his new team. s&p 500's milestone -- the index briefly jumped above 2000 for the first time. will europe continue the rally?

>> welcome to countdown. president françois hollande has been forced into with third major overall of his cabinet. aftervernment resigned the economy minister broke ranks and publicly criticized his deficit reduction policies. caroline, is standing by. this reflects retaliation in france. >> exactly. the government lasted only 147 days, less than five months. it reflects the big divide among the socialist in the party. between those who support the policies and want change. french growth has been zero. france had to abandon their

deficit target for 2014. beginning, the president prefer to increase taxes for companies. more recently, he has been targeting tax cuts for companies. asking french household to do more. he is planning 50 billion euros of spending cuts before the end. who isnomy minister responsible for the cap never shuffling says this was proof the current government policies are failing. we should be. maddock about trying to cut the deficit -- dogmatic about trying to cut the deficit. he was trying to offer an alternative. >> of my personal responsibility as the economy minister is the proposal alternate solutions. another path exists. other choices for france and europe. i have past few years,

been tired by the president's actions. letters to notes and the head of the executive trying to convince him. president ofed the the republic to refuse the excessive measures that is damaging and weakening the economy. more than a cabinet reshuffle, it is a whole ideological debate that is offered not only in france but across europe. what sort of people are we going to see in this new government? who is out, who is in? hollande's popularity rating is at 16%. he really has to get this right, hasn't he? >> yes. his priority is to form a new cabinet that will reflect his plans for the country, doesn't want any troublemakers. he doesn't want anybody to defy him.

about the been talks former paris mayor who is very popular. mayor. socialist those who might change jobs -- you have the interior minister who may return to an economic minister unless the job gets extended to both economy and finance. ministerthe education also supported and could decide the german chancellor. he doesn't hold any positions. he said last night on french television that he will look for a new job like many french people. forhank you very much

reporting in paris. let's talk about markets. hours in thef two s&p 500 made it above 2000 and close to just below it. the question is whether europe will carry through today. so we u.k. was closed could see it move higher in parts of europe as the u.k. plays catch-up. the markets in europe were very strong yesterday. comparingthe debate out to them. n. we have for this wonderful story. it was valuations. at 30 timesing annual earnings and now it is 19 times. how many stocks are taking part in this rally and it is much better now than it was in 2000 when it was predominantly

internet-based stocks. yesterday's record 48 stocks were at a 52-week high, 27 was the peak in 2000. earnings,ons based on based on acid multiples are much inducible than looking at overall levels but it doesn't hurt to remind ourselves that even though the s&p was over 500, the nasdaq is still 10% from its record. maybe theminder of comparisons with those days of the tech bubble but the fed is concerned. they have talked about biotech and social media. same part, there was a lovely line in australia. i would disagree on a personal basis. i am begrudging about this rally.

gravity pulls markets and what you see here is a velocity. it is a velocity that you haven't seen since 2000. on march 9,t stocks 2009 until now, you will earned 195% return. the question is is this rally overdone? take yourself back to do thousand, the same time before 2000 if you owned, it rallied by 32.6%. the 2000 stockmarket rally was much faster than we have at the moment. in theory, there is more. traders are buying more downsize protection at a ratio of 2.2:1. started 10 years before the bubble burst. in 2000, this bull market has

only lasted five years. will return to this because it is easy to talk about earnings and valuations. are we on the coattails of what the central bank chooses to do? >> we will have more on the state of the french economy in how it fits in the picture of the eurozone recovery. we will talk to the global hell of economics. -- head of economics. stay with us. ♪

>> welcome back. time for today's company news. aazon bought twitch, website focused on video gamers. it is amazon's biggest ever acquisition and wraps the marking up a bit entertainment ambition. twitch was earlier in talks with google about a potential buyout. expanding its european advertising network, according to the financial times. the company which has offices in eight european countries will open offices in 12 more in eastern and southern europe. markets will be able to buy twitter directly from these

local sales teams. aviation is buying $8.8 billion worth of boeing jets. this is the company's biggest ever order. they will serve asia's travel bone. 737 claim from the family. they bought 33 jets from them. >> the french president will name a new cabinet today after the previous french government resigned following comments made i the economy minister. view, he criticize what he called the president's use of deficit reduction that he said is soaking french unemployment. we will talk to michaela marcus on. with this change in the french government, with these comments, where does this leave the french?

do we see a stronger reform agenda as a result of a new government be put in place or a weaker one because of the grievances? >> it leaves the reform agenda unchanged but what is good news is there will be less critical and dissenting voices within the cabinet itself which i think will help the government in terms of its communication to the french people on what it is they are trying to do and what it is they are trying to achieve. we heard three things from the president. he said that he was going to stick to the $50 billion in spending cuts he is planning to put into place. he was going to stick to the different measures that he had been planning in terms of improving competitiveness and cutting taxation for businesses. the third thing that he added last week was to pursue reforms in terms of housing, perhaps opening hours. the socialt we call levels in france which basically means the levels of the number

employees which regulation starts to kick in. these will be the type of things they will push ahead with, but i think the bottom line is this will not be enough to lift of the growth of the french economy sufficiently. we have heard from the finance minister that growth this year is likely to be around half a point of gdp. the budget deficit is likely to overshoot 4%. the target is 3.8% and that is a real challenge. >> is it time to chuck out the roles, the growth and stability rules? as the likes of the italian prime minister has been suggesting he just allow governments to spend, spend, spend. >> i would disagree a little bit -- a little bit a lot. not completely, but i think the key point is what europe really needs bottom line is structural

reform. i think if you put in place a system where you have a mix of -- drive little bit for the structural reform agenda will help. what we have seen in the economies that are doing restructure reform, they have done a lot better for it. if we take a country like france, where do we need to see more reform? we need to see it on the labor market, products and service markets, more simplification of the overall economic. of lessthem, no amount austerity will give us long-term growth potential. merkelas symbolic to see in spain praising his reform agenda. >> it is. you see angela merkel -- can she be swayed? >> we are eager the message in late july when they were pushing

really hard to get more fiscal wiggle room. --ically, the message was put in place for structural reform and i will be more flexible around the interpretation of the rules. >> this is a bargain that was put across during the weekend. and monetary policy complementing one each other. he said i am not going to propose flexibility unless you guys really put the structural reform in place. >> this has been the message all along. this has been part of the european message for quite some time -- do the reforms and we can be more a flexible. that is not really something that has changed. we are hearing the message a lot more but i think that message has been a fundamental message for quite some time. is doing withb bond yields being as low as they are in the eurozone and talk of withlation about easing,

all of that going on, is that ability ofe governments to deal with these issues? >> once we have moved away from mood, some of the pressure came off governments. those economies that have pushed the most ahead on structural reform agenda are the countries that have been on a program. clearly, that stick has been very important in pushing forward reform agendas. at the same time, i am a little bit skeptical that further ecb monetary policy stimulus will actually lift the real economy. it will help financial markets but the question is how much can it really drive afford the real economy? this is where some of the recent considerations we have been hearing, some of the concerns we hear from the bears in the isket that a lot of this qe

going into artificially increasing asset prices that has to be a concern. >> there was a point where investors may start to realize it will not implement more qe even though the tone changed. downside? be the if markets continued on with what you were saying? >> basically, he is indicating that they would be prepared to pursue a program but probably more focused on the hope that the ecb would go up and aggressively buyout european government bonds. that is probably overdone in this point of time because the message was also that our institutional setup is very different from that of the u.s., u.k., or japan and that means it will be more challenging to buy government bonds. thecan also ask yourself

question -- how much is it worth to go out and massively buyout government bonds at a time where bond deals are credibly low? the only thing you hope is to weaken the currency. the lesson from japan shows is that even weakening the currency very aggressively does not necessarily give you that miracle left to exports. we cannot have a weak currency. there is a challenge out there in terms of quick fixes and i think bottom line is the structural reform is really what is needed. that is also the message in japan. >> we will leave it there. much more to talk about when we come back. we will talk a little more about wages and the upcoming u.s. data. how strong is the u.s. recovery? what was the real message? ♪

>> welcome back the countdown. we are set for a big day's worth of data. the global head of economics is here. yesterday was the slowest in sales in four months. it is about housing market. you a fairly spectacular call. >> we're looking at a number of 24.5%. a big chunk of that is airline so once we strip that out, we

are looking for relatively healthy 1.3% gain. when we look at the u.s. economy, even though there is some volatility in the data, we are seeing fundamentally for several months is a recovery that is beginning to look increasingly sustainable. it is coming through on housing. there is a housing recovery coming through. less fiscal austerity which is a big lift. also, most importantly, we are beginning to see signs of improvement in business investment. i think that is the driving point. show us wepposed to are seeing an investment cycle getting underway. >> of that is our belief. we see evidence when we look at the survey data so that is beginning to come through. that is one of the coins the continues to falter in many of the euro area economy's. interestinge debates was the wages and the

number of central bankers. where is the visible hand? one of thethis is new ideas that is coming up. governorasically that corona told us that after a very prolonged. inflation that people do not get wage gains anymore. is suggested this to say that wage formation needs to be invisible hand. as auggestion was perhaps reference for wage negotiation the central banks inflation target should serve as a reference point for wage negotiations. for all of us that have been brought up with the idea that wage mechanism is a way back to inflation and we have to be careful about this. there is a bit of shock and horror. it is actually not such a bad idea when you think about it because if you want price

stability, at the end of the day, price stability and inflation needs to come back to weigages. you end and up in a situation where you're still losing purchasing power for your consumers and that is what japan has been experiencing. that is what he is pushing against now. >> he made a speech in conjunction where he talked about people having to -- this is a new labor market, isn't it, where we have to get used to lower wages. he went on in the speech to say very clearly that gdp is a reference point is no longer the reference point. you have to look at the employment market, the labor market and that has changed. >> he also highlighted this idea that perhaps we have seen a downward shift.

also, talked about that being a structural shift in the wage formation process. suggested there was a real risk that the bank of england could undershooting its own weight forecas -- wage forecast. when we're looking at central banks, we are increasingly focused on the wage component and a little less on the headline inflation number. i think when we look ahead to the next u.s. employment report, it is that wage number that will be key. janet yellen also spoke very much about those wage numbers being crucial to what the fed does next. >> thank you for joining us today. the global head of economics. up, ukraine celebrates its independence day last sunday and other countries president will meet his russian counterpart, president putin .

angela merkel downplayed it. we will tell you their agenda coming up next. ♪

>> welcome back. london anda.m. in time for a check on how the foreign traders are doing. you are seeing the yen gained for the first time in seven days. this is yen gaining. the consensus in the market is that it felt too far, too fast. some of the strength indicators are over bullish or oversold and in this case it was decidedly over bullish with an indicator at 78.4.

petro poroshenko and putin tension todding some the markets in terms of what can happen on the geopolitical front. you are seeing the dollar, lower generally this morning. that probably manifested itself in the first instance. that is where i decided to show these examples you see. mosttors have solve the amount of korean debt in almost six months. the dollar on the move. >> the top stories. these are the top headlines. the president of ukraine and russia met today during a summit of the russian led. no separate this this options are expected between them. talks come after ukraine accused russia of sending tanks across the border.

petro poroshenko dissolve the parliament. -- frenchpresident president françois hollande will name a new team after he fired the economy minister yesterday who was critical of the government's austerity measures. it exposes a water risk within europe which is a backlash on spending. drama breaking bad captured american television's highest honor by taking home five emmys. the show about a high school teacher turned drug kingpin ended its run last year after five seasons. it built a massive viewership around the world due to netflix. turning to geopolitical tensions, president putin is met to meet ukrainian president petro poroshenko today. an agreement is unlikely to occur. ya.are joined by martin

thank you for joining us. it seems like the russian foreign minister had a separate bilateral meeting between putin and president poroshenko. meetingextent could a move emerging-market asset today? >> i think expectations are very low. markets have already done that because of the risk. there may be some potential. it is very difficult to see a breakthrough in these stocks. >> what is it leave us in terms of the russian investment story? we have seen the longest gain since 2005 just in recent days. soleast, people are talking we saw these meetings in berlin where we had the leaders of ukraine, russia, france, and germany getting together to find some solution. has that meant we turned a

corner in the investment story around russia? >> i think they have been relatively good for two weeks, since the beginning. investors areng in a position for a de-escalation. it is still the summertime. a lot of people have sold russia. to see a lotting of buyers because there is a lot of risk management not to buy into russia. it is not a good outlook. >> if you look at emerging markets, right at the start of the year, that has played through. there has been a recovery. we have the fed a potentially going one direction in terms of rates and we have the ecb potentially moving towards quantitive easing. is it fed tightening or is it ecb easing?

>> i think the ecb expectations have been dominant. u.s. yields have come down the mainly because of european causes. the liquid a trait is still on. if the fed changes and start the hike earlier, that probably will be be bad news for urban markets. as long as the ecb is on the way for qualitative easing, there is that possibility. >> the emerging markets. it is almost 20%, almost a bull market. is that misleading looking at an index like that? >> i think the first month of the year and most of last year since 2010, the emerging markets have been week. it is a bit of a rally. i think it has been on and off earlier in the year since mid-june. it has been a pretty solid rally. driven by liquidity

expectations, not so much by sentimental. central banks,e what are the fundamentals we should watch for? is it about chinese growth, striking trade deals? is that very much the center of where emerging markets go? >> it is not a growth story at all. global growth has been disappointing. it is mainly the quilty -- liquidity. the picking up of chinese growth has been helping but that is also not that convincing because china's data has been disappointing. it is primarily a liquid with the story -- liquidity story. growth and change, it is not really there. >> we need to assess how we look at the emerging markets. if that indicates it is not growth, who is structurally changing the most?

you have new government in india. we have turkey going to a presidential structure. who and where do you look at the most potential for restructuring and therefore delivering the best value? >> we need change almost everywhere so it is very important. if you really need to see growth picking up. so far, it is mexico. that is a really good story on the reform side. india is very encouraging but has been disappointing as well. indonesia -- >> you have greece in your preferred markets. is that a positive because they are showing such potential or should they take that as an insult? >> it is not an insult. greece is the typical turnaround story. they had their prices already. some emerging markets and might have to go into a crisis. defenseore or less a

story because the main markets were having a different theme. i think that is the same c ase. there was a lot of upside because it has been so big. >> what have you been playing in greece because the financial story -- it is done and gone. there was that big boon you had increased which is over -- in greece is over. >> the financials have new capital, that is maybe reason why the capital -- the market has been disappointing over the past few months. if you believe and agree to recovery, you should play it through the banks. >> we have a president-elect promoting import substitution which many have their doubts about. you like indonesia. >> not primarily because of the new president. he can do very well but it is

uncertain to what is the room for him to act. he needs to come with a new government, the appointment we very important. what will be the direction for policies? it will be difficult for him. but still, it is an economy that should be growing quite well. the currency has corrected the most. it is an interesting story. it benefits as well. >> you like brazil. the firstxpecting year of contraction in gdp in brazil since 2009. you found something to like. >> brazil is a weakness sentiment -- a sentimental story. there is a lot of policies mistakes. there is an election coming in october and the chance of the opposition winning the election has increased. with the economy weakening, particularly since this tragic

plane accident, that is what we have to play. >> does the market reacted to the downside? >> i think people have been negative on brazil for so long. on, theresident stays downside is less than what the upside is if the opposition wins. >> i think you have cheered up. >> people do that. >> it is fixed 40 a.m. -- 6:40 a.m.. >> thank you. >> the profits are expected to increase. we find out why with caroline hyde. ♪

companyfor today's news and paul lo is sticking to its scandinavian roots. its first model since being acquired by a chinese owners for years ago. it will keep the engineering in the assembly of the new suv in the hometown. the overhaul is on the brands flagship model will be unveiled today near stockholm. europe's lead largest online

clothing ipo is this week. at company could be valued $4 billion -- 4 billion euros. it was created by the berlin based rocket internet tech incubator. offering its first low-cost smartphone in india for $33. the phone that may be its best bet for getting users. more people access to the internet through smartphones than computers. it went on sale yesterday. >> that was the independence debate that took place in glasgow last night. said oilrs of the unit revenue and viability of the currency union and the fac -- defect. >> what we make in three weeks time will define us, this

generation, and also the future of the nation. few societies anywhere on earth have secured this opportunity to vote themselves into independence. this is an opportunity peacefully at the ballot vote and a process that has been agreed. it is an opportunity that may not come again. >> we don't need to divide these islands into separate states in order to assert our scottish identity. we can have the best of worlds more decisions we make in scotland backed up by the strength and security provided by the united kingdom. i say that we have no options. politely, respectively, no thanks to independence. 71% that heund that won the debate. overall, the campaign is down. undecided voters could tip the balance in favor of the.revolution scotland goes to the poll on

september 18. will you be there? >> i hope so. >> she is our scottish expert. in theas fascinating sense that both of the gentlemen seem to it knowledge things -- acknowledge things. scotland could keep any currency it wanted without permission. currencies are global and you can use it. just like panama uses the dollar. sammons was so resident to give any plan b on the currency and he did stick to plan a. he said using the pound is plan a. me, he went further because he did say they could if there was a yes vote, they could have an independent currency. -- there is or is

three plan b's. >> he was forced into actually thinking about a plan b. it is not a plan b. >> that is his line of attacking him rather than focusing on the currency, you are in bed. it doesn't go down well in scotland. >> right. we will return to that between now and september 18. -- is set to return its reveal its results today. is warning over the impact of sanctions in russia and over slowing growth in europe, all eyes will be on house sales will be. caroline hyde will be on that subject. should investors be worried? >> not for the first half of the year. we will see how the next year will be. so far, the chief executive

says the sanctions in russia will bite in the second half of the year. the first half has been pretty strong. we got a hint of that because we got numbers on the first five months of 2014 back a couple of months ago and sales rose 1.2%. the united states, the emerging markets gave sales. this earnings season, we are seeing issues to do with the british pound. if you have money revenues being brought home from abroad, particularly in the emerging market where there has been weakness, there have been some hits to revenue. we actually saw the likes of sales up 8% in the first five months. there seems to be strength in there to dexter he. -- trajectory. it is worth to note how big they are.

they are in 110 countries. the brands go on and on. you have to click and click to get a list of the companies. there have been some hands by martin just over the last couple of days. you didn't interview saying that he is worried about russia. also, worried about france and italy. he is concerned we are seeing a tailing off on the economic growth. >> when you look at the stock , it isance on the wpp down 11%. these stocks have not done that well as wefar as though year is concerned. cup.ad the world >> it was dominated by those.

downblicist sent a shiver spines today because they came out with their second-quarter results -- sales up have to percent. some of them have been canceling campaigns. >> an indicator of what is going on in the caution that is crept the the market rather than half yearly results we get. that israel spending. -- that is real spending. >> those with the words coming. they were worried about the emerging markets saying that is where they lacked. brazil was a bit of a worry for him even though there was the world cup. there was a slowdown in the economy. he said india was a concern as well. >> the sales merger with on the con has fallback. that was evident.

during the whole merger negotiation between the two companies. many wanted to see what was going to happen after the deal unraveled suddenly. may be all-consuming with it on your doorstep, you are less consumed about what will be going on you use a little bit of focus. we will have to pore over these numbers and look what many are feeling the second half of the year will be like for wpp because they're expecting sales to fall. four of thes one in buys's -- it creats or one in four of the world's ads. >> thank you. we will have those numbers in about nine minutes. >> and not even the rain could deter partiers from attending

notting hill carnival. i didn't get any sleep. that is next. ♪

>> welcome back. from stockaway trading. we have caroline hide here.

>> i was there yesterday. the guardian had this wonderful picture on the front cover of notting hill. they celebrated -- there is even a better one inside. i have to say everyone was such a good mood despite the absolute rain. it was karen this we went -- karen this lee west -- karen thihorrendously wet. the music was brilliant. >> what did you wear? >> not a bikini. i had my waterproofs on. of ladiesthe pictures wrestling engraving. very british, no doubt. one and seven wake-up sleep drunk and confused. this is now a thing.

it is a scientific condition. we don't take sleep drunkenness seriously enough. answering the phone instead of turning off the alarm is common. hallucinations, all kinds of things. nothing to do with drinking but just being so tired. talked about the former french economy minister saying spend, spend. manchester united is spending, spending. it looks like it will smash the british record. any will buy di maria, argentinian -- 65 million pounds. they lost one game, draw one game -- they are devastated. >> you never know. they laughed at me -- i do pictures. there is a memo which you have to wear red if you want to go to

the emmys. i bring a bit of style and quality to the show. >> russian president putin and ukrainian president poroshenko meet. what is the agenda? ♪

>> the russian president will attend talks with his ukrainian counterpart today at a summit. we are live in the capital of belarus. >> fran says refresh old. -- france has reshuffled. the president will name his new administration. the s&p 500's milestone -- the index briefly jumped above 2000 for the first time. will europe continue to rally?

>> welcome to countdown. >> good morning. 7:00 in london but all eyes are set on one meeting between president poroshenko who is meeting president putin in belarus. morefollows a day of fighting in uterine ukraine and what ukraine says was an incursion of tanks from russia. hanz is following the story. we understand that this meeting is about trade of but the eyes of the world will be there to see if there's any movement between putin and poroshenko. conversationhe will be dominated by the situation in ukraine and what can only be called as collating violence. ukraine accused russia of sending in an armored calvary, including 10 tanks.

both sides are trying to increase their position. the negotiating position and try to have real battlefield victories the between they sit down and have a conversation about maybe peace. the other theory which is perhaps the least optimistic one is that both sides are really quite far away from actually coming together and having real negotiations. there is too much conflict, too much strife on the ground for their to be any progress here. another complicating factor to all of this -- they have called for new elections in ukraine. the president called for elections later in october. they have no parliament. they also need a remarkable amount of money over the weekend. they called for another $3 billion for defense spending which will go as high as $8 million. ukraine is getting ready for a

longer conflict. don't know that there will be a one-on-one meeting, do we? that has not been confirmed. so far, has it? >> no, all we have is group meetings. there will be an eu delegation. we don't know if president putin or president poroshenko will sit down and have separate meetings one-on-one. we know there will be in a group meeting. it has been months since the last group meeting. there will be a face-to-face meeting. we just don't know if it will be one-on-one and that could be a negative sign. in some ways, we will know fairly early this morning on whether or not there will be real progress. if there is going to be a separate bilateral meeting between president putin and president poroshenko. one thing that caught my eye was that nato have made the

suggestion that the second convoy is nothing more than a mask as it were in potentially building up more military presence. we are looking at the aid convoy and we're are not focusing on what russia is really doing. what are you hearing about that because we have heard many different people using phrases in regards to invasion of ukraine, entering ukraine. where are we/ is it an invasion and is nato right? >> an invasion means an illegal incursion. you take an illegal in her incursion to be in a group that came across the border without the official recognition, permission from the ukrainian government, clearly that is tantamount to invasion. that there is is

a lot of focus on the aid convoy. what ukrainian officials had been telling us, they told me and my colleague, there is clearly daily incursions either artillery supplies or actual weapons. is the intense focus on the aid convoy misses the point when you have a porous border. hundreds of kilometers are controlled by ukrainian separatists. penetrating that border and bring it across eight is not difficult. that is not the challenge.>> in terms of the snap elections that have been called, what can that deliver in terms of stability if that is the right word? is that with the ukrainians are hoping to achieve by calling a snap election? will that solidify political position, a mandate of turning toward europe instead of russia? >> stability and perhaps more

ukrainian purity. what president poroshenko's case is that there are many lawmakers that will still support deporting separatists. one thing they haven't quite figured out is how are you going to hold a referendum, how are you going to hold balloting in eastern ukraine where there is still violence, and humanitarian situation? president wants members of parliament that are pro-ukrainian wants to purge the parliament of all the pro-rebel members of parliament that he does not think cap ukraine's national interests at heart. >> of thank you very much. we will speak to you throughout the day. hans nichols, live. french president fonts wall hollande has been talking to the third major overhaul of his cabinet.

government resigned after the economy minister chronically criticized the president deficit reduction policies. we are joined from harris -- paris. this reflects the economic malaise that france finds itself in. government only lasted 147 days, less than five months. there was a clash between the different members of the president's party. he wanted more fiscal stimulus from france. the current austerity policies were failing. you might be surprised that the president was actually conducting austerity policies. washe beginning, he including taxes for companies with households and more

recently he has introduced 30 billion euros of tax cuts for companies. in exchange, he was planning 50 billion euros of spending cuts during. as a result, french growth has not been growing for the past two quarters. the government had to abandon their targets for 2014. said thaty minister was proof that the current government policies were failing. he said he just wanted to offer an alternative. my personal responsibility of economy minister is super bowls alternate solutions -- is to propose alternate solutions. i wase past two years, trying to convince the french president. i have sent notes, letters with private and public messages to the head of the executive to try to convince him.

president ofed the the republic to refuse the excessive measures that risks damaging and weakening our economy. >> how can we expect the new government to look different from the old government? one assumes no roles for multiples or supporters. what is it leaves the last of the party? >> the president doesn't want any troublemakers. he doesn't want anybody to define him so he will be very careful that the prime minister chooses the right people to follow his stance for the country. those who might join the government -- there have been talked about the former paris mayor. he is very popular among the french. adsu who wasmer asked to do a report on french competitiveness. those whom i change jobs -- the

finance minister to get his job extended to include both economy and finance. whoeducation minister economicpported the minister and criticized angela merkel. he doesn't hold any kind of position . he said he will be looking for a new job like many french people. >> thank you very much. >> coming up, a big day for advertising juggernaut at wpp. we have the earning report next. ♪

>> welcome back. aazon is buying twitch, website focused on video gamers. it is for $1 billion in cash and payouts. it is amazon's biggest ever acquisitions. in talks withlier google about a potential transaction valued at $1 million. s weighing on whether he

will keep the company's u.s. presence. the italian defense company spoke exclusively to bloomberg. executive always reports on the most important. yet to decide whether to maintain and also on the united states, not only for -- the ceo was talking to a meeting in italy where we caught up with the chairman of and asked him about problems with ferrero. had this every 10 years. in rththe past, nobody talked about it. we are very surprised people are starting to talk about it.

i'm wondering if there are people that are trying to raise the price. i hope it is not the case, but i can ensure you that we shall intinue to provide nutella the same quantity as the consumer asks for it. >> the largest advertising agency in the world, wpp, just released results. caroline hyde is here. it is a mixed bag but overall, sales have been 5.5 billion pounds. basis, it ispretax up 1.5%. when you need to dig into is this -- >> the strength. >> if you look at pretax profit, up 1.5%, it is up 15% for the currencies. butre seeing sales up 2.7%

on the like to light, they're up almost 9%. you can see the currency is really affecting them. if you read out where it is doing well, they say north american a strong, u.k. strong, africa, middle east, europe all strong. you have to dig into where it is outperforming. clearly, western europe is not. that was a concern that austria, greece, italy, switzerland are difficult. they are very challenge from a macro economic point of view. they managed to see sales increase but nevertheless despite its concerns. north america saw relatively good growth but u.k. is up almost 6%. they say understandably ukraine shows continued softness overall. andeems relatively buoyant they say digital media, the

purchases are outperforming. that is what they have revised for the second quarter forecast. dividend is up 10%, not as much as many were expecting but overall, it really is showing the strength of the british pound and how much -- >> they say long-term targets are reaffirmed. they are themselves on 2014 and saying they would deliver stronger the competitive revenue in digital. exactly. they say they will outperform rivals. the french competitor which didn't tie up with omnicom. the deal that never happened but they were saying, we are extremely cautious about growth prospect. none of that real worry coming from wpp, the biggest advertising company in the world. they seem to be on track. >> what is your stat of the day? create or buy one in

four of the world's ads. >> coming up, cease-fire between ukraine and russia could be, could be an economic win for the markets. could it happen when they come face-to-face today? that his next. ♪

>> welcome back. this is countdown.

when president putin and president poroshenko me today do not expect to cease-fire. according to our next guest, it is the key to market recovery. vladimir joins us live from moscow. thank you for joining us today. >> good morning. it is rising again -- the 12 out of the last 13 days, it has risen almost 10%. you think the gains are justified? >> repeat, please. weto do you think the gains have seen, and the last two weeks are justified? >> if you look at the market reaction, the gains are treated some preparations before

negotiations transpire. i do not expect significant improvement in the situation. mention in your notes that if you look at chart of the micex over the last four years, it has gone nowhere. why do you think there are gains to be had from year? there are fundamental reasons? you are looking at the russian economy. >> of course. there are problems which we see now. it is a long-term trend which you find in rising cost of corporate which is important. it allows investment to grow. we see the central bank of russia and its structural limits of growth.

the underinvestment which was done several years before. i do not see high prospect for russian economy to grow and no prospect for the russian market as well. as asituation with ukraine short term risk, not a fundamental cause. >> good morning. you talk about the challenges thin the economy and food inflation is up -- almost 10%. it is been rising. is that one of the biggest threats and how do you invest around that in russia with that kind of backdrop? problems withwo inflation. the first one is of the central .ank of russia

they have targets for inflation like 6.5%. efficiency will grow prices for food. the rise of costs and wages in the sector. will remaination somewhere between 7% and 9%. this is actually good. , then ask at the ruble -- it is quite a good investment opportunity. but, shares in equities -- i think only some companies that have strong internal drive like

private oil companies. private in terms of the government does not direct their business. this is quite a task and an investment opportunity but they are here. >> when you talk about the ruble, it is one of the worst performing currencies in emerging markets. how much more volatility can we expect on that currency and with that in mind, what does that to in terms of investments? do i need to be hedged when i consider any investment in russia? ruble, to my the mind, we hit the target for this year. the ruble rate is really high -- about 10% right now. it is really expensive.

the ruble may be volatile, it may grow higher or lower. it is not fundamentally justified. therefore, i expect the ruble to be 35.5. is about the same as it is now, maybe -- just because we have high rates and demands for goods. i expect we will see it go down . research.r, head of thank you for joining us this morning on countdown. >> we are putting 50% of profits and dividends to attract investors to buy into the moscow business.

we will talk to the cfo of russia's biggest -- after the break. ♪

>> welcome back. time for foreign exchanges. they get back and decided to buy and sell the dollar. people are saying it moved too far, too fast. poroshenko will meet with prudent. what is happening is very important and we may see some news there. we have seen a little bit of a reprieve.

dollar is taking a small pause. you are seeing the korean rise in the dollar fall. i think that this reflects a little bit of a pause for the dollar trade. >> i am mark barton and these of the top headlines. the russian-led customs union. nothing is expected between poroshenko and vladimir putin. the unitedcome as states accuses russia of sending a column of tanks.

poroshenko dissolve parliament. a new team today. the move comes after yesterday. the dismissal exposes a wider risk. and, breaking bad captured the highest honor. the run last year. the show took on a massive viewership. the largest hotel operator. there are new business models putting pressure. we are joined now by the ceo of the company. the business week called it the

rich man's airbnb. the cofounder and ceo joins us now. interesting times in business week. what do i get? it is the un-hotel experience. what is that experience? to be rich.t need if you want a guarantee because you are in town for business or for a precious family vacation, we supply a hotel experience in isrivate home setting and it high thread count linens and nice toiletries. we can even lend you the iphone. in-home experience. >> that sets you apart. airbnb, there are

similarities that you do not get. >> there are lots of services out there that provide a mechanism. people have a rental mechanism. what we do is unusual. some of these are nice homes and centerul places in the of cities. ,articular for families staying it is a compelling alternative. you want the quality and that comfort. >> i like the decadence. we have sifted through the quirky and surprising houses. let's talk decadence. dot kind of decadent homes we have?

>> one people are not in town for a few months over the summer or winter break, this is a place that is available. people who own these properties would not necessarily be inclined to do this for themselves. we are there to make it easy. they will get their whether it is decadent or quirky. we have presented hospitality experience. and why areadent these people wanting to rent out these homes? they have a bit of cash. what is the incentive for the people doing the renting out? if you wouldon is pick up a 10 pound note. the answer is that you probably would. there is extra money and you do not have to take the risk.

have that end of the market and they are selling their secondhand goods on ebay. running a hospitality business at the top of the market. a lot of hard work. >> you want to be a real competitor? how to use your brand. -- how do you see your brand? what is it going to be? virgin is ahat competitor at the top of the market. unlike those examples, there is fundamental innovation there. the highest occupancy rates and sectors are the boutique and scale sectors. that is the area where we

compete against the traditional incumbents. is fundamentally disruptive at the top end and you are talking about a talk and -- a that issector significantly faster than that. 's time hasidea who come. whether we're looking at the emitter low end of the market come this is going to come to represent -- the middle girl over and of the market -- the and of the market. >> what is the commission structure and how does it work? what will determine that depends

on the length of stay. what is the biggest fear you have with regulation. -- regulation? what's the biggest frustration is that it is not moving faster. universallys been progressive and the u.k. government announced that they thepriest -- pleased to see >>eralizing moves from paris we will bring you back on the next round. >> 7:38 in london. the moscow exchange plans to stop trading eurobonds and paid out a record in dividends this year. we are joined by the moscow exchange chief financial officer. like you for joining us. tell us about operating profits.

tell her what is so positive before we talk about the threats to the business. >> thank you. the positive thing is that we had a good quarter this year and a net income of 3.5 billion. we have seen revenue of 6.5 billion. and thisover the year is due to the new zealand business model that we have. classes iny asset equities, bonds, foreign exchanges, and derivatives. move,tured a market regardless of the conditions. >> what are the biggest effects from thesiness tensions that we see geopolitically and the sanctions

that have been imposed by western countries and russia? effect,r as the biggest higher volatility in the market and bonds. and we see a higher trading volumes for the markets. that results in record revenue for us. >> let's talk about how foreign investors feel about investing in russia. capital outflows were the largest since the fourth quarter of 2008. that was the collapse of lehman brothers, of course. howdy you see the assets right now? >> we cannot see the whole picture. upsee equity trading that is year over year and we see more interest from investors, both foreign and domestic into the russian equity markets. we have 30-40

investor meetings of month and we see a healthy appetite for our stock. hadee a placement -- we millions of dollars a month ago and it went well. it went multiple times. i think there is investor appetite and smart investors are looking at this. >> you told us the positives with the geopolitical tension and the volume going through to the bottom line. you say it makes your business better. you must be experiencing negatives. give us examples of those. higher volatility and extended times of higher volatility affects certain products in more negative ways. they are not enjoying the extended times of higher volatility. we are looking for a recovery. liking bullish

markets and do not enjoy being nervous. >> you have the capital you need at the moment? i know some have been unable to raise money on international markets and receive money from the government. tell me about the capital positions. products andsh about 46 billion rubles. sitting and we needed to support growing trading volumes. the successful placement of the central banks was sold and we confirmed that we have a company and a target for investments that are tracked -- attractive. i think we are. that you have given access to russian clients. for investingite

in google and those businesses? question and iod think that we are starting with russian companies listed a broad. broad. do we want to bring these companies to trade locally? we want to give access to our local investor base. want to bring russian liquidity back to russia and we have been successful with that. we have other exchanges and we have been treating volume in equities very successfully. >> thank you for joining us today. of the moscow exchange. >> coming up, pfizer in pursuit of after zeneca. the company keeps rising.

>> the first day pfizer could

ruin new a bid. remind us why they had? >> they abandoned the offer for astrazeneca and, according to our rules, you can come back if you were invited act to the table -- back to the table. that is pretty unlikely. they were opposed to the bid and they wanted increases if they were going to acquiesce. they were oldish on the pipeline. you would have to have a bid. there is another way they could come back. offer.e knockout

it would ensure that they have a good idea. how much could that be? remember. the bid was on the table and they did not want to go higher. asterisk zeneca said, no. that is another 3-4 pounds they have to come up with per share. it was not enough. they have to stretch higher. that is what is being debated. approachzer made the to ask her zeneca -- astrazeneca , the love affair continues. they have been eyeing up activists. remember the key reasons why pfizer wants the deal. rate to at the tax

lower potential amount by read re-domiciling. at a canadiank company. and then of keys make much sense. a $28ave completed billion deal. glaxosmithkline -- >> same issues. >> glaxosmithkline is more strategic to the u.k. and valiant is going hostile on a bid. >> everyone is talking to everyone. aren't they? betse market that's -- against after zeneca. that has fallen. a number of short positions.

that is dropping between the start of july and when the deal started. it has risen. inklinget has half an that there will be a re-date. >> why? the pipeline. they could get far more promising pipelines. they have highly likely -- according to esther zeneca -- astrazeneca. largely, pfizer is desperate to u.s.. outside of the they would have to pay hefty tax bills. >> thank you. the future suggests a lackluster rate. set to play is catch up today. we will be back with further analysis of the market.

>> we have seven mins to go and jon ferro joins us now. futures are taking a breather. >> what were you watching? >> i was watching and waited until mark rang me. >> everybody is getting the star joe. me, the bigger moves were in

the bond markets. the yields had record lows. germany with the one year, the two year, the three year. all negative. you have the 10 year bond yield at 2.22%. this was not thinkable two years ago. what is going on right now. in about 10 minutes time, i am going to ask the question. we're talking about asset management. what is going on with german bond yields. who is buying this. i want to know why. >> i'll to you what pimco is doing. strong the assets have a backstop from liquidity that and them and -- come

core position should be in the periphery. we have to put this into context of the political situation that is underway. frenchill be a new government announced today. the margate has been insulated to some extent and you have deflation at some point. the political situation is compelling because of the presidential election. you have a record low approval rating. >> free to run against. is a threat.pen a far right party. you talk about a eurozone exit. >> many analysts were telling us yesterday that france would do anything to build a government that would have them of avoiding to go to the polls right now. john will be back. on the move is next.

stay with us. the markets open up with mark. trillion.ore than $2 a lot of zeros. stay with us for on the move. .

>> welcome totics "on the the move." i am jonathan ferro. have them for 30 minutes to talk about the market and much more. with him he is caroline hyde in paris. caroline in a paris. time to unveil a new cabinet today after the economy minister openly criticized the policies of the government forcing the entire cabinet to resign. new debate one

austerity. who will be in and who will be out? i will tell you more later. over to caroline hyde. >> got to love it. i am talking the world's largest advertising company. a bit of a winning streak. sales reached 5.5 billion pounds. better than expected. the u.k. grew as well as the u.s. and emerging markets. britishngth of the pound. i will be back more on where the company expects. if not asees gray black. >> a black swans. looking for. futures lower in paris and germany. why? we were off it yesterday. welcome. -- we were off it yesterday. man