in 2007 $63 trillion. russia is talking to the ukraine. we will find out how tragic europe looks a little bit later. paris wheret to they have a whole new regime change. the new government comes after criticism from the former economy minister. the big change is the economy minister. the former banker and former advisor -- what is he going to change? >> and airbus has avoided being hit by sanctions.

the 17 point uptick. can it be sustained? . will be back with more >> you have got futures just an inch lower, but what do we? dictated byng to be confidence. i think we see overall divergence. european markets just coming back ever so slightly. they say to sell the euro and by asian currencies. global equities, let me take you quickly around the world. up from 2007 when it was worth $63 trillion.

has risen by 3.8%. all spending their day rising. the question is about sustainability. ussia is talking to the u.k. israel and gaza declaring a truce. nobody can really question whether the overall momentum continues. key drugs given fda approval for a anemia. we ran the numbers. revenues are up. that supersedes the previous four quarters.

double-digit sales. special dividend. transaction volumes were slow. telefonica, are they preparing to up their bid? a could be getting ready to go to 8 billion euros to blow telecom italia out of the water. it is suggested telefonica has a bit more ability to put a better proposition on the table because they are let -- let debt hinged. straight to the currency. you are seeing momentum in europe. the use the euro as currency of choice.

broke 79.58 -- .7958. get so much value at 8:00 for us. thank you very much. you have got a slightly lower market open. perspective ise the chief investment officer who manages nearly two and a half trillion dollars of assets. record highs in the united states. nobody really gets excited and everyone telling me this is the least loved old market ever. your view? >> many of us are getting come a thinking we have long way. you have got to bear in mind earnings are at a high level as well. markets isf the higher than in 2007, but look at

earnings. >> what is driving earnings? it's not a revenue story, is it? >> certainly not in europe where growth has been disappointing. it has transformed into more of a buyback. it is not a growth story anyone is super enthusiastic about. it is hard to deny there is some growth. >> this chart illustrates where we are at, if there is any euphoria now. for you, what does that chart tell me? the green is an indication of euphoria. wheneen sounds good, but you get to green, it's not good. is euphoric.gime bit contrarian. we find it very useful for the

amount of risk we want to take. when it is euphoric we are going to moderate that. a low seem they are at risk regime, but if you look at markets subjectively in terms of equities and currencies spreads relative to recent history we are in a low risk environment. we have added some risk as we move from a euphoric environment to a high risk environment. >> talk to me about the geography. are you looking more to the u.s. as opposed to europe? >> we're a little overweight in equities, but we are overweight in europe. recovery has been petering out. some companies have been weak in terms of making progress on earnings. the u.s. is a little bit of a safe haven from in equities

perspective because the growth is more well-founded. i guess you could say the u.s. is further ahead, but we are not yet taking a bet on the emerging markets. i think people can be making too much of the relationship. butral banks are useful, our strategy is not about guessing whether that support is going to continue in the future. valuations,ng at and that is what puts us long on equities. >> here is a look at what else is coming up. replacing three ministers after an austerity revolt. and the head of ukraine in the first step toward east talks. reports that the biggest ever ipad is in the works. we are back in two.

>> welcome back. business andk to bring you a stock that is on the

move. the stock is now four percent. would first-half revenue is up over 16%? controlsmortgage introduced by the bank of england are affecting short-term demand. lower for theting half of this year. the stock down by over four percent. let's take it to geopolitics. we are going to talk about russian companies. sales weaken, but so has the which boosted profits. caroline hyde has been working through the numbers. far things have been unaffected by those sanctions. this company has not , so the likes of

be withinot deemed to putin's inner circle. been overdone. so says citigroup. the trade sanctions are unlikely to spread to companies such as those privately held in the steel sector. citigroup still things that is going to remain on course. construction is going to continue. we have got sales down seven percent. that is not as bad as it was expected. because of the russian ruble are actually, you

getting more bang for your buck. you are seeing profits on the rise because your cost are going down when you are making this yield. it is also very present in south africa. we have been hearing from so many u.k. companies. this is an example of a company being helped for the weakness of the ruble? >> and growing outside of russia, is that what they are looking to do? >> exactly that. they be selling shares in their american unit to reduce debt. they have been doing that efficiently. company that is the biggest provider of rail tracks in the world. getting presence in

north america. they want to expand in the middle east as well. these are the areas that are going to be investing in rail tracks going forward. americans are 22%. they want that to get they gear. many say that you are too worried. this is a company that will avoid that. they actually do well through all this turmoil. amazing. >> we will get more on those results. for the moment we will carry on talking about russia. a positive start is how vladimir putin spoke. the leaders met yesterday to try and broker a political resolution on ukraine's eastern border.

let's go live to minsk. was there any tangible progress made? the talks lasted late into the night. they scheduled a one-on-one meeting behind closed doors. this is a good sign the president is willing and able to talk to each other. the meeting did not change to a quick stop. discuss aable to tentative stop to solve the crisis. sides agreed to continue talking to each other.

needed. a resolution is we have seen that many times already. >> we have heard a lot about the east ofening in ukraine. what is the latest on the conflict? >> president putin has had a handshake yesterday. it was apparently not enough to , which was in eastern and southern parts of ukraine. the ukraine and defense ministry than 220 rebels have been killed. no information of casualties on the ukrainian side. and ukrainianon

territory. russians have been captured by ukrainians who allegedly crossed by mistake. that is the situation. there is always an excuse. we will have to leave it there. for more perspective is the chief investment officer. you hear or -- you hear all this noise. how much attention do you pay? it is an explicit look at policies. that has changed from five years ago.

you look at things more permanent. be a is not going to significant supply issue we should not be too concerned. trade matters a lot. as soon as you have the beginnings of an unraveling of free trade, that is damaging to investors. i think we should be concerned. consumer confidence is absolutely tied to even further east. the manyone of ingredients for lower german bond yields. i want to talk to you about negative yield. is negative.d debt would you be a buyer? choicesu have got many and you are a global investor, i don't inc. you would invest in those safe haven assets.

if you are hemmed in, you may consider it the least bad option . i think that is part of the strategy to force yields down and force people to take credit more credits to the market. >> you are underweight fixed income. what is behind the underweight? >> the attraction of other assets. i don't think we are making the argument bonds are in a bubble. things are more attractive. >> what else is more attractive than fixed income? >> generally we are trying to diversify. funds, but, hedge certainly real estate is overweight at the moment. it is hard to find things cheap these days. those thathings are

have macroeconomic risk. i think that has been a challenge. although we believe the recovery eventually comes, and order to gain exposure, you are buying cheap assets that are swung around. >> when you look at the recovery, there isn't one in the eurozone at all, particularly when you look at the likes of france. when you look at the new lineup, and you think, is this going to change anything, does it change anything or is it such a downward trajectory it is not stopping? >> i think it is a downward trajectory. they have been borrowing for 40 years. it has challenges that need to be overcome. the changes in government won't overcome those challenges in the short term, but it's not a good reason to find good companies in france. to be more worried about how it

is going to come out of that growth slump as a whole. france is one example. it is a great example of private sector productivity with the public policy. >> i have been asking a few questions. orit the germans austerity quantitative easing? which do we get first? >> i think quantitative easing unless german politicians become so worried about the lack of wewth in germany that realized there is a need for fiscal stimulus that needs to be coordinated. just to let the shackles off i don't think is going to happen. qe first.t joining us. for

up next we will talk tech. apple has investors bubbling with reports of a bigger and better ipad. stay with us. we are back in two.

>> 8:25 in the u.k. let's talk tech.

the largest ever ipad. >> 12 inches. we have been used to nine inches. that is the average size. larger than the average size. there are a lot of competitive up butperhaps matching, now we have learned apple is going to be releasing a 12 weight nine inch ipad. larger than the size of the ipad right now, so a significant change in this company. i think what is interesting is the same time apple is deciding that size matters on their phone

, we wonder what impact it has. does building a much larger ipad mean the same users don't want that anymore? it also starts to validate the that the tablet is starting to replace the laptop and they wanted to be there for that adjustment. >> i am pressed he did all of that with a straight face. a report of a bigger better ipad in the works. said that profit rose in the first half of the year. the company is one of three main china telecom state owned carriers. snapchat is said to be close to a round of funding that would value it at $10 billion.

they previously rejected a $3 billion bid from facebook. it is the third most popular apps for adults under 35. stay with us. we are back in two.

>> welcome back to "on the move ." i am jonathan ferro. 30 minutes into your trading day and this is how things are shaping up in europe. pretty much dead flat. pulling back off the cac 40 a little bit. the u.s. dominating the headlines. s&p 500 north of 2000. a record high. who got excited? did manus cranny get excited? he is a little bit skeptical. united utilities is down 1.65%. utilities, bank of

america, they spent a lot of money on rebranding. rbc set to perform. because the market is not discounting adequately enough that the regulator may not allow 900 million pounds worth of capital expenditure. stock off 1.65%. telecom italia, are they in discussions? the smallest brazilian wireless carrier, we understand that they are in talks to acquire telecom italia was stake in tim. telecom italia holds about 67% of that. what is going on with telefonica and vivendi? storing up the pockets for potentially a bit. lufthansa, they are talking to the pilots. the pilots have threatened to go

on strike on august 28. the big issues, bridge payments. bridging payment until they are able to take up their pension. bottom line is, discussions are underway and that is bucking the market trend today. lufthansa and telecom italia. back to you. >> thank you very much. three top headlines from bloomberg this morning. global equities have reached a record value of $66 trillion. shares worldwide have added more than $2.2 trillion in the last weeks. investors are looking past conflicts and renewing bets that stimulus will revive growth. russian president vladimir putin is in talks with his ukrainian counterpart. he met with petro poroshenko in minsk as part of the gathering at the customs union trading block. poroshenko says russia and its partners have backed a ukrainian strategy to hold battles between

its army and pro-russian rebels in the east. israel and hamas have agreed to a cease-fire which would end the seven-week conflict in gaza. the border crossings between gaza and israel are opening while the fishing zones off the coast of gaza have been extended. ar more, i am joined by bloomberg news reporter from jerusalem. what were the terms of the deal? >> as you said, a promise that those boarding -- border crossings would be eased. that is short of what hamas was seeking, to have those crossings fully opened and to have a airn -- an airport and seaport opened in gaza. israel got a promise of quiet that hamas would stop firing rockets into the country. israel also not getting its full demands.

they wanted to see a demilitarization of the gaza strip. both sides really having to settle for much less than they were seeking. like anothersounds cease-fire among a whole host of cease-fires we have seen before. will this one actually last? >> in the short term, i think it will because both sides are exhausted from the seven weeks of fighting. hamas has suffered some major blows in the last week. several top leaders were killed by israeli airstrikes. , the people there have suffered under these rocket attacks. the economy is also taking a blow over the last month. i think both sides just realize over the short-term it is in their interest to stop the fighting. there is a lot of skepticism going forward that this is the foundation for a long-term peace between israel and the palestinian groups in gaza. question, you talk about the terms of this

particular cease-fire. who are the winners and losers here? , betweenhard to see israel, prime minister benjamin netanyahu who is getting a lot of domestic criticism about the deal. hard to see him the winner. we have to see how it develops. of course, hamas like i said suffered some blows. there were celebrations in gaza but you have 2000 dead, tremendous damage. i would say the only clear winner -- i spoke to some analysts talking about egyptian president sisi who negotiated this. maybe the only clear winner out of this. >> great perspective. calev ben-david in jerusalem, thank you for joining us. we turn from the middle east now to france.

president francois hollande has appointed new cabinet members after their removal over spending cuts. caroline connan has been following the story from paris. what are the main changes here? is this something more significant? biggest change of all, you have to remember, emmanuel macron, the new economy minister after hismontebourg statements. he is a former banker. 2008rked at rothschild in and became advisor to the president on economic issues after the election in 2012. he is speaking right now at the inaugural press conference. macron is saying we can change the economy with politics. he said he needed the support of the whole team to make these changes. he was in favor of economic patriotism and that economy was

not an exact science. macron is a big fan of literature. he quoted oscar wilde in his press conference saying, i have the impression of being tricked. clearly very different from the former economic minister. he has been hailed as a symbol of finance. we have inig changes this government are for education and culture. the first woman to the education minister and the new culture minister, both replacing two ministers who were supporters of montebourg. what about the consequences? what are the consequences of reshuffling french policy? >> of course, this signals that prime minister valls and president hollande want to maintain their line of economic policies with a target of 50 of spending cuts

before 2017, the end of their mandate. prime minister manuel valls was speaking on french television last night. he said the priority was to cut france's deficit and he has no doubt that he will get the majority from the socialist party about this. have a listen. i will seek a vote of confidence at the national assembly in september or october. we will get the majority. it can't be otherwise. >> the problem is that the socialist party has been fractured, has been divided after this political crisis in france. they have a very short majority, only 291 seats when the majority

needed is 289. they might have to look for broader support from the greens or even the far left. seekmay even have to opposition votes. >> thank you very much, caroline connan. up next, we continue the conversation on the fallout in france after a major government shakeup this week. not a big surprise, but the timing was for many people. we talked to ricardo barbieri up next after the break. stay with us. ♪

>> welcome back to "on the move" live from the city of london. let's bring it back to hollande. the french president has replaced cabinet members including the economy minister. will these changes be enough to turn around france's ailing economy? zuho'stalk to mi international economist. he joins us now in the studio. you see the changes. let me ask you a question. is it kind of like reshuffling the deck chairs on the titanic?

>> hopefully not. the risk that we are on the titanic has gone up in recent weeks as we have seen a series of business services that came in with as a mystic expectations like today -- pessimistic expectations like today. there is a risk that gdp growth could turn negative in the eurozone. slightly positive in germany where there was an excessive drop due in part to pay back for a strong q1. obviously, the picture is probably because international trade has not increased in the past couple years. the only driver of european growth has been missing. the likes ofrts to russia and turkey have been

following this year. situationlooking at a of low growth, perhaps even deflation? is that inevitable. you hear a lot of noise from the french politicians, the ecb. is it too little, too late? >> we seem to be heading at best for a period of stagnation. the growth rates may be slightly positive but not as strong an economic recovery. our only hope is that the global environment will improve, the u.s. economy will continue to show strong growth. the fed exits not only from qe but also from near zero interest rates. the dollar gives a bit of breathing room to the european economy. vis asia as most asian countries are targeting the dollar. that is i think the only way out.

monetary policy can help achieve that, perhaps weaken the euro exchange rate. we also have the problem that the ecb is too late given the needs of the economy. we continue to have fiscal consolidation in the countries that are weak economically like france and italy. >> let's talk about the ecb. i have read the speech from mario draghi. i keep reading it and thinking the same thing. he makes quite a strong statement on inflation and acknowledging the fact that in the medium term, the trend is going to be lower. did he really open the door to qe? the market reacted like he did. opened the door to qe in previous ecb press conferences. initially a bit tongue-in-cheek and then more clearly, he said qe could include government

bonds. i think draghi today has a majority in favor of qe on the ecb council. his problem is the timing of the decision and whether he keeps on board with the germans. i think if he goes for an immediate decision, he probably won't have the support of the president on the bundesbank. if he wants his support, he has to wait a while longer for the numbers to be unequivocally week including in germany, perhaps inflation moving closer to zero. at that point it is easier for the bundesbank to secure qe. aesill be a combination of and government bonds. >> do we overstate the bundesbank's influence on the ecb? do they really have the biggest say at the ecb right now? >> germany is the biggest country in the eurozone. is huge and european

decisions. there are a few satellite countries that nominally support the german view. there is a bit more than that. 20% depending on the indicator you use. i would say germany's influence is at least one third of the votes on the council. isarly, the political weight disproportionate. because of that, i think draghi always prefers to keep the bundesbank on board if possible. it is clear that if things continue to worsen and he is still facing this opposition, then he will go for a narrow majority and nonunanimous decision on qe. >> in the last four minutes, we talked about low inflation, low growth, the prospect of the ecb doing more. doesn't that all spell out lower bond yields? we can go lower from here, can't

we? >> yes, we can. my forecast is we go down by another 10 basis points. recently, we moved our forecast from 1% to 0.85%. that simply is based on some educated guesses on where the front end of the curve grows. how low can it go? and then, a realistic level for the forward. obviously the market in a moment of low inflation figures, inflation risks, weak economic data, geopolitical concerns, perhaps some signs of friction within the eurozone, we could have even lower bond yields. this morning.gb i see the 10 year drop. is that where you could go in germany on the 10 year? >> i think so. toew months ago, i mentioned

people, i didn't put it down as a written forecast but there was a risk that we could get to as low as 0.6% on german 10 year bonds. i think if we have signs of improvement in the u.s. business cycle and beyond october, once the fed ends qe, there is a sense that the rate hikes are coming next year. that will probably put a floor under these bond yields. , thank youbarbieri very much for joining us this morning. here are some companies on the move. liberty global is said to win eu approval to by the dutch cable operator ziggo after it agreed to sell a tv channel. the purchases of nearly 5 billion euros would give pretty global 2.7 million new cable customers in the netherlands.

the world's biggest area exporter plans to invest more than $500 million in a partnership with chinese food manufacturers. accesse gives fonterra to the chinese formula market. " is coming up next. 10 minutes away. let's get a look ahead. i don't want it to be over. we are carrying on the conversations you have been having. we will talk about what has been happening in france. significantly, we are also going to talk to the cfo of roche's largest steel company. sanctions affecting his business? what does he see the outlook being? we have seen german business suffering. how does he see his whole business environment improving or decelerating from here? we will take from the heart of russian business which i think

is going to be fascinating. that continues to be a big focus. it is speeding into the data. you were talking about the fact that the germans may need to see their economy has stalled. this is going to be one of the factors. the russian economy continues to be one of the big partners for the german economy. if it slows down, that is going to feed back into germany. >> the french changes, big enough? >> probably still too early to tell. i think it also means a split socialist party. it is going to mean the relationship with germany is going to stay like. look at how long it has taken spain to get its economy back on track. much structural reform that it needs to do. it is the supply side, yet demand has a little to do with it. >> two years until 2017, the clock is ticking. thank you very much.

videogames the new showroom for cars? aston martin hope so. ♪

>> test driving aston martin's new supercar is within your reach. the company's lead designer told us how the brand is bringing its cars to the masses. >> this car is a real car.

it is incredibly exciting to design a car for a videogame. you don't have real world constraints. you can push the boundaries of what aston martin could be without a huge investment. however, you have to design the car as if it was a real car. it has to have a real engine. it has to have suspension. weight,to give it performance figures, breaking figures. there, but just in the virtual. there are elements on this car that may find their way into our production cars. it was really important to see it as a physical model. if i go through some of the highlights, the front of the car doesn't feature a typical aston martin look but yet we know it is an aston martin.

we have a very pure, very simple side to the car. at the back of the car, our haveal c-section where we deconstructed that. it is incredibly futuristic. we do reach a huge audience with this. if you think about the amount of people that download and play on grantor prisma, it is huge. if you provide something that is the coolest of cool, they will all want to download and they understand your brand more. the virtual world is becoming more of a reality. most people who play this game see this model. because't be unexpected they will be used to seeing it in a virtual world.

>> that is it for "on the move." a slightly lower open across europe. the ftse 100 just in positive territory. i am on twitter. withtuned for "the pulse" guy. that is next. ♪ . .

>> the russian steelmaker. profits, thep in housing markets are about to cool. apparently, size does matter. an ipad andes boosts shares in suppliers.