hermes.es, lvmh and it looks as if they have begun to agree. lvmh will change their holdings with hermes. there'll be distribution of stock. let's see how that stock opens. hand,oss on the other looks like their private equity holders will place just under 850 million shares. manus. morning more worriedre about the central banks and geopolitics. it is the story that has been running through our markets for quite some time. european equities? at what isake a look happening. they will focus on tomorrow with the ecb. we go to bank of england, let's

not forget about that. maybe we should. it's unlikely we will see anything significant. equity markets. it went out of asia, pretty good. fairly favorable. there is this kind of slightly interesting story that maybe we need to see negative chinese that willse maybe provide more stimulant from chinese authorities. the market hasn't had enough of the stimulus story. early basedff those on where we were. watch the services data. yesterday the marta -- market got a little bit spooked by the story in scotland. that could become interesting over the next few weeks. a sharp rising quality is what you saw. pushedket can still be around by the geopolitical story. they be the political story with

scotland is what we should be talking about. it does provide every once in a while a reason to pay attention. it is becoming finally more interesting. the foreign exchange may be back on the front foot. the central banks are the story. they will continue to be the story. we talked about it yesterday, and we will talk about it today and almost certainly tomorrow. >> they are the 800 pound gorilla in the room. presidentory, u.s. barack obama has arrived in eastern europe and will speak in a joint press conference in the estonia capital in two hours. the news reporter joins us from estonia. what can we expect from obama? what the baltic leaders are expecting, they're looking for the u.s. president to pledge

long-term or herman and presence of nato troops in their territory. nato already increased air controls in april. naval presence was increased in the u.s. deployed 600 paratroopers across the three countries. and poland. the country say making these measures permanent is key to deter russia. has been talk about permanent nato bases on baltic soil, but last month the estonian prime minister said this isn't what estonia seeks. that there are other more modern -- modern ways to deter russia. estonianscerned are about a russian incursion? is this a real possibility or is this something which is building? is the overriding concern

is that if putin is doing what he is doing to the ukraine, the risks rise for the bordering nations. >> this is certainly the key topic among estonians who remember the soviet times of deportations. the relations have never been warm between russia and the baltic country since independence in 1991. russia has been accusing the baltics of discriminating against the russian minority. the fears of russia among the baltic nations increased after russia's war with georgia in 2008. what is happening in the ukraine only helps these fears to go, even though there president has cited these excess tension fears. that official stance is the country needs to be as well rejected thanks to nato membership. ott ummelas for estonia news.

lvmh and hermes are to mend their relations. we are expecting lvmh to distribute all of its shares to its shareholders. lvmh'serstanding that largest shareholder, christiane will distribute its shares. the position by stealth and hermes. this is a big structural change. they have a big change. is philip mann duca, he is the chief executive of the titanium capital group. great to have you with us. estoniaence of obama in beginning to deliver u.s.

posturing. why are markets not more concerned? pointeels like a boiling in terms of relations between russia and the u.s.. >> it should feel like a boiling point, the problem with the markets is that they have survived everything. this generation is not a war piecetion it is a generation. from y2k, to a bank crisis to everything. but history tells you otherwise. dr. henry kissinger tells you otherwise. he talks about the world in flames. start of a conflict. someone said, why should you be worried? this is nothing like 1941-45. 1933ll that started in when everyone was complacent. that conflict took years to develop. when you think about it, it

took 20 years for this owing ofship, this swo the cold war. putin and involved, the philosophy. what does it say when you look around and say i am concerned. if you're that concerned, how have you maneuvered? parts, why has putin gone into the ukraine. it is always to do with money. youou understand that, understand that he isn't going to stop. he wants the ukraine back in the fold, he has a lot of gas energy that europe is dependent on. a lot of people think he will turn the screw in the winter. as far as europe, people ask me about equities. same tune.k to the it is hard to be short of equities when the people who

make the rules will change them at will to keep the inflation going. >> we will pick it up after the break area -- break.

>> i am manus cranny in london. here is one stock that is on the move i mentioned to you at the

start of trade. 5% as receipt pyramid are up. 5%.ugo boss over bank of america and merrill lynch picking up the fee on this. along with citigroup they are managing the deal. one 01.5 -- 101.5. raisedlders have billions of dollars in stake sales. turning our attention to japan, the prime minister is taking his time. he has his new cabinet. it is all about restoring momentum. is it working? let's go to tokyo for a discussion with andy. we have new people at the helm

in this cabinet, does this --nvigorate question mark reinvigorate? he is kept the key positions of the finance minister, economy minister, and foreign minister. it is essentially the same. is atat kind of way he the center of his cabinet. but at the edges, he brought in interesting figures. figure is taking over the mandate of the health ministry. that doesn't sound such a big thing, but the health ministry overseas the government's pension fund. the overhaul of that fund is taking place now.

this move to bring in this man could give abe a boost to his cabinet. recordof that, we have a equaling number of cap net -- in the cap net. in the cabinet. is of the people brought in a woman brought in over the power industry. position intant japan. an aspiring, promising politician who happens to be a woman, obuchi, has been brought into this position. i think he has insulated his

core, but on the edge he is he likes toliver -- be seen as a reformist. whetherll wait and see it actually makes any real difference. japanese and korean politics editor. thank you so much. still with me is the chief executive at titanium capital ar. it is moving, it has gone from 101 to 105. do you concur? >> i don't. japanese society and politics is a consensual situation. not much is going to change. is anggest thing is it aging population. the stock market has gone up because the yen has gone down.

the yen has gone down because the bond market in the u.s. has gone up. nothing new. you're not that engaged with japan. where are you? you have this debate going -- not going, but you're acting on it. of the gamee sure or i haven't got the dice. other people have the dice and they are changing the rules to save -- suit themselves. playing to the lowest common denominator. history tells us when you do that you're at the end of a cycle. we have a massive change on the way. i agree with kissinger, the world is in flames. everyone who has been short keeps losing money, for good reason. i don't want to belong either, i'm staying away from my highly speculative asset inflation, bobbled up marketplace.

which may not have come to its end. >> if you're not prepared to short equity markets, where do you go? >> you want to be in a currency. if you keep your money? you don't want to be in the banking system. they can seize your money and are looking to -- the intermediation between banks will get very difficult. >> where am i going to put the money? >> there is an optimal currency a hard asset currency which is reducing supply and increasing demand. which is not man-made and it is called diamonds. i think diamonds are the superior, mobile, hard asset currency. we have moved our focus over the into diamonds.o i can't put much gold into your pocket. if you need to move your wealth at any point --\ >> but that

restricts me in terms of physiological issues, in terms of mining and staff. you have to be more diversified. >> you always have issues in business. everywhere.g harder i'm not so worried as long as they are containable. easy, but most been the miners have rated. i want to give them a shovel and get them digging. it is no different, they need to be run by businessmen. we have come on big stake in diamonds. we know the stones are there, they are large stones in the right postal code when they are producing the biggest and best stones in the world. we are very comfortable with the politics and economics. we are in not miners, the diamond business.

what we have done is taken them all the way downstream. why not be in both ends of the spectrum. hit a parte actually where you have stopped calling to buy gold. taken this have label away from it. i don't like paper. what one million was 25 years ago and one million today is a tip. asset reflation and food inflation, it has been debased i monetary policy. we will look back in due time and say that those policies were crazy. he stays with me to discuss battling over a shiny new product line. stay with us.

>> battle of the devices. new appliances, smartphones, washing machines. dissenting on berlin. at the consumer electronics fair. our international correspondent is there. our gadget man. i was a going? had to mention

washing machines. you know i am interested in the fuel-efficient vacuum cleaners. there are some 1500 exhibitors here. 145,000 square meters of space here. installations all around me. watches, wearables, here is what we expect later today. note from the new samsung, the galaxy note. maybe a new phone from microsoft. motorola also has something. there is a glaring omission, no apple. apple is doing their own event, we expect them to unveil their new iphone on september 9. they are not here. that doesn't mean we don't have a lot to talk about, especially wearables. tech report, a new long from samsung that isn't tethered to a phone.

you can make calls, check your e-mails, and sports scores with only your watch. there is a conversation here about the cloud, how safe, how secure will these wearables be? that is one of the things i am .ost excited about, the tv the pixelation, the digitization , the clarity with which you can see the screens. .ou have 4k what that means is when you see something up close, you need a magnifying glass to see how good it is. under the magnifying glass it is crystal clear. all the technology coming to your home in one year, or two years, or 10 years down the line. i am not nearly as cutting-edge as you make me out to be. >> pixelation's keep me up all night, hans. they really do.

the clarity that it brings to my life. deal with us for his final thoughts is philip from titanium capital. break, equity markets, record highs. and, euro looks like it could be having a few issues in readiness for qe. tied in together form a. >> -- for me. >> the problem i've been having for the last two years. the euro swiss rate based on correlations should probably a much closer to 150, even 160. particularly with the euro dollar rates in the one 30's. if the smb were there defending the 120 floor, we would be closer to the parity at one.

there is inherent risk in these markets. investors absolutely do understand this. if they understand those risks, then why not buy protection? >> i am. i'm buying diamonds. that is the point. where can you buy protection? it becomes a game of musical chairs. i may not believe it, but they have to play it. agemost managers over the of 40. they do not believe any of this, they understand the risks, but god believe -- god for did they be out of it when their competitors are making hay. this line, never have we seen volatility rise so much since 2008. because it has fallen in scotland. real risk or not? >> no one cares. >> that is just wrong. that nobodybelieve

cares what the scots due south of the border. if they want to go, go. >> no impact? >> there will be some impact, but will people actually care? no. is volatility high, from a macro trading point of view it will be in this 160 range for ever. it hasn't moved a lot. if you're talking about volatility of two cents or three cents, and help fx traders out there. i agree with you, it really isn't volatility in a much broader range. >> if you have to choose one industry. technology is at its zeitgeist moment. luxury is on the move. where is the biggest crawl for at if you want to be in it 2015, apart from diamonds. >> if i can't have diamonds, i wouldn't put it in real estate.

i do think the real estate market is a bubble. it is very exposed to taxation. it is politics which is over democratized, it is playing to the lowest common denominator. >> we will have to leave it there. thank you so much for your thoughts.

>> welcome back to "on the move ." equity markets are into the trading day. obama arrives in estonia to give reassurance to the baltics. you have u.k. services later on, china services data. there are a couple of interesting things that are definitely moving with luxury. every now and then, i am giving you an whole big order up of luxury this morning, because some of the business -- biggest movers are indeed that. .he top story, lvmh

why? because of the conflict between lvmh and hermes. a conflict no more. they have resolved the situation and lvmh will be setting down its 23% stake in her meds. -- hermes. 3.8% as itlvmh up cashes in. think of the big winners. lvmh cells its earnings holdings to its to shareholders. none other than the owner of lvmh who is the key man behind it. --ono will keep. meanwhile, hugo boss the other luxury name, also on the downside. why? similarly there are shares being sold in hugo boss.

850ing down close to million euros worth. the stock down by just under 5.5%. thanks for that. those are your three stocks to walk -- watch. the video showing the beheading of a second american journalist i the islamic state has wrought fresh cause for an international alliance to combat the group. the recording shows the execution of a man identified as .ivan -- stephen sotloff the u.k. labour party is throwing resources into scotland. that is according to people familiar. were removeders from marginal electoral districts and a ploy to scotland to rally the "no," vote.

u.s. president barack obama is in estonia this morning i had of a nato summit. --ahead of a nato summit. steps up, it is criticism of the u.s. over ukraine. agenda, we obama's are joined by the bloomberg white house reporter. she is traveling with the president in estonia. whata, give me a sense of we can expect obama's message to be. the mood of that flight, is this an emboldened president? >> yes, i think so. .bama arrived last night very early this morning. he is already in meetings. as we speak he is about to meet and estonian president, later with the president of latvia and lithuania. they will be talking about

protection of the baltic states. should they see russian aggression like the ukraine, they also will likely be discussing the situation in the middle east. how much will the latest news out of iraq and syria overshadow obama's agenda. -- agenda? >> less so than today in estonia. it is a clear agenda here. it will be talking about protection under the nato alliance under the baltic nations. tonight president obama flies to wales and friday will attend the nato summit with the 28 member states. isre, the discussion certainly likely to center on what is going on in iraq and syria with the murder yesterday of the american journalist stephen sotloff. the tense situation is made all the worse.

president obama has not yet said anything about the release of would expect to hear something out of him today during one of his public appearances on that. our bloomberg white house correspondent, angela traveling with president obama. for more on the significance of president obama's visit to eastern europe. we are joined by melissa. thank you for coming in. estonia, it isn a very symbolic moment, gesture to the baltics. does putin care? thatu're absolutely right this is a symbolic gesture. there is a sense that the u.s. has been slow to do a to support allies in eastern europe as the crisis in the ukraine unfolded. is giving a really high level indication of u.s.

support. however, unless this is followed up with any action by nato, then putin's is not that impressed. they are trying to galvanize support and troops. a spearhead response. has nato been wrongfooted and ill-prepared? and everybody, for this kind of u-turn by putin? he is an aggressor now on the world stage. >> that is how he is been perceived and presented, russia is still denying that is directly result -- involved in the ukraine, but nobody believes that line anymore. there is the perception that nato was not responsive enough, was not flexible enough, didn't know what to do in the face of this new warfare. think obama will get

support when he comes to wales? air forcees to get on one to leave wales, what does he want to walk away with? spearhead0 strong troop? a commitment from nato? what does he want us to mark -- what does he want? he was to send the message to the world that nato is a viable force. cameron willma and be pushing for more military spending by nato members. we have already seen a ramping the eastern and european states. it is a question of whether other countries are willing to follow suit. >> there is this almost ismongering perception, that one of the phrases used by the ukrainians. nato wants a spearhead him a ukrainian prime minister says,

get ready for a full-scale invasion. merkel seems ready for more sanctions. when you talk to your client about the risks, where are we on the risk? you, one is the least and 10 is the most explosive, where are we on that scale? risk, you talk to clients every day about how to understand risk. in a are continuing to be high risk. on a scale of 1-10, we are up to seven or eight. russia's's that strategy has been to confuse and mislead, to deny what is going on in the ukraine. that makes this more of a dangerous situation because it is not obvious at which point this turns into a conventional conflict. -- we have europe

spent weeks talking to people now -- putin either doesn't want to escalate, but he wants power and he once eastern ukraine. or he does want to de-escalate but doesn't know which way to turn. what is your sense, what is your reading and what are people telling you? situation, there is the risk of escalation regardless of what various parties intend because of the way the situation has unfolded. while crimea would've been a strategic decision, in the eastern ukraine the goal seems to be more diffuse. there is a goal of stabilizing the ukraine am a of economically damaging the country, of undermining kiev and ensuring that the ukraine is in the weakest possible position and comes crawling to russia. whether or not that is the

intent is not quite clear. ?> what does statehood mean this is a phrase that has been used. what does statehood mean for putin? himself, not him but his spokesperson, semi-retracted this statement. from russia's perspective would look more like a federate ukraine van and independent -- than an independent region. consequently, the most likely a prison conflict self-efficacy a -- >> do you think another round of sanctions matters? >> not in immediate term. takeybe they will have to

the football world cup off of them before they begin to understand. ihs.a lockwood from >> still to come, a taste of the u.k. manufacturing sector. it is the chief executive of a high-end stove maker.

>> i am manus cranny in london and this is "on the move." some companies are on the move zalando announced plans to cells shares in the second half of 2014. the public offering may value the company between four and 5 billion euros. hugo boss is one of the biggest losers this morning it is selling steak and a fashion retail worth 850 million euros.

concord technologies is said to have approached companies and taking sap to gauge their interest. thatrd develops software helps businesses manage travel expenses. value ofs a market $5.8 billion. another company we are watching this morning is aga. as the high-end stove maker pours millions of dollars. the ceo joins us from one of the factories. great to have you with me this morning. i remember i grew up with one of your oven's in the kitchen of my family home. you are now developing 14 new colors. you are selling people not big but the big aga,

brand, it is the dream. absolutely, the great brand we have here is fantastic. we've been trying to widen our addressable market. city 60 that is one cap it with -- cabinet width. we have a more flexible product, on when you want it and off when you don't. it can be rolled into a house, it is a much more situation product. that is why we opened up a new store right in the heart of the city. we are making a point to plus or minus 30-year-olds that the aga is relative. if we can win the case in london, and we think we can win the case for aga not just as a u.k. brand, but an international brand.

it is on that point of internationalization that i wanted to touch. i caught up with the chief of commerce, you are looking for china and germany. one of the accusations from the british chambers of con us -- commerce are not being helped enough in the export drive. are you being helped enough? is the government pumping resources into companies like yours? >> i think they have put a lot of effort in. we are very big supporters it is a great campaign. it shows you what people can do. it shows you are enthusiasts for the export drive. rightstrange really that back to 1709 when abraham darby got his first patent, it had a

public policy component. an export led drive and sealing off imports. wet may be the sort of thing should be looking to do. there are enthusiasts who are looking to the new markets in china, but also some of the markets where we have long had business in north america. we have been there for 50 or 60 years. newgreat thing is, with the products it is a much more accessible market. electricity has made all the difference. now you can have a product which doesn't need to be built in your home. that is the first time we have had products leave here, packaged up that you can roll into your house. that makes a big difference i think to the kind of people that can say yes, the cooking quality is there for you and here is a product which fits your lifestyle. >> william talk to me about you

have 550 employees, how much slack is there? people aren't earning more in wages. you are the ceo of a company that hires 550 employees. how hard is it to keep your staff? are you having to raise wages? i think, we have 550 people here, we have 1800 people across the country because we have the range master brand. what we have done in recent years, we had to cut back when the recession hit the housing market. there was a good deal of slack at that point in the cycle. as things start to take up on household expenditure, we are seeing a little bit more demand. there is scope for a bit more expansion. we are not seeing too many product issues.

labor, although groups like will just land rover start to help everybody see a way forward for the regional economy. as that comes through, that is great. as we see more jobs being created by ourselves, already we are seeing them taking on more people. that should see a little bit more vibrancy. we are keen to see real wages move up because as people move into new homes, then the natural tendency should be for them to spend money on their kitchens. if they do so we like to think we have moved to the business to ensure we are in the right position to take advantage of more buoyancy and the market. we would like to see real wages moving up. you have a sizable

company, and you have mark carney running the bank of england. telling us industry rates will remain low, there will be a gradual process, do you trust the bank of england governor mark carney? or has that trust dissipated because he is a flip-flop. you have to make big decisions, do you trust carney? >> i think absolutely. he has a good grasp on all the data. i think it is difficult to read at times. we've seen mortgage approvals pick up about 25% on this time last year. they're not going to hit the targets that the bank of england said they would reach until the end of this year. the conflicting thing is going on there. with the stimulus on the other

side, the mortgage approvals were held back by the review process. getting a little bit more difficult to get mortgages. overall, we are keen to see the market balancing between consumer spending moving ahead against a rising housing market. if you simply think about household formation in the you you can see there should be more spending on the household in the years ahead. we have aga, we have range is benefiting from the pickup in consumer confidence. leave you,have to i'm devastated i didn't know about the pink behind you. great to have you with me. >> as we had to break, louis vuitton, the beasts of luxury and a change of foot.

>> hermes shares are slumping that is after lvmh agreed to distribute all of its shares. joining me now, our european business consultant. what is this?

is this a versailles settlement? >> that's what the press release says. apparently they even had to get the president of a commercial. conflict,to end this wanted to improve relations. all the way back to 2010, we learned that lvmh had taken a sizable chunk from lbm -- from hermes. it was equity derivatives they had bought in 2008. two years later concerted them -- converted them into cash settlement. they really upset hermes. they have been waiting for years for that cell position. it is going to their own shareholders, but lvmh distributive get largely to their own owner. take a stake in his investment firm.

that is why the shares are dropping for hermes. for that run-up. that is it for me. i will see you friday. tomorrow is ecb day in case you didn't know. guy johnson is up next with "the pulse."

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>> the breakthrough. they agree to distribute to shareholders and and a four-year ban. the shares are sliding on the news. a storm cloud. home depot may be the latest target. we'll talk about security later in the program. president obama says that nato members are safe from russian aggression. we will bring you his speech live.