growth forecast. chief economist says a period of low rates risks come place sensey. >> has led some people to take more risk in order to get more return. >> tackling europe's jobless generation with a fifth of young people out of work, the leaders meet today to try to create jobs. >> air france is to release its sales results after the worst strike in the airline's history.

>> welcome to "countdown." >> there was a selloff. on both sides of the atlantic yesterday triggered by the i.m.f. warning that the global growth would be less than originally forecasted. it was lower on the day and stocks fell by over 1%. what you see are the futures indicating a slightly different turn-around. was at a low. we haven't had a 10% correction in three years. warren buffett that the markets are in a zone of reasonableness and what you are seeing this futures. u.s. equity

london has to play up a catchup game. have a look at this. this is when you begin to understand about volatility. people are nervous. it jumped yesterday and no where near what it was in 2008. this is a shakedown in our market. one of our guests later will speak to that. 2008, a little bit of a shake here. 2008, 1987 and 1929. where does money go in terms of distress? treasury. treasury yields hit the lowest level of 2014. the market reached panic levels of speculation that the federal reserve meeting would bolster the talk or the discussion that you are going to see a discussion on higher rates and bond yields bouncing off a low.

a bounce for u.s. equities. europe is going to play the catchup game. >> one thing is evaluation. sp. and the nasdaq trading on 23.5 times reported earnings in the tech bubble. the peak was 69 times. are those metrics not looking too frothy to use the word of the day. >> i was interested in the reasons that it was giving for its downgrade and any reasons we didn't know about before. russia, weakness in the euro zone, brazil. topics we discussed many times on this program. the market perhaps was looking for ropes. >> i think you are right. when you have a correction and will come down to the earning season.

>> milan is to place to the european union emergency summit and how to reduce the region's 11.5% unemployment rate. it has been described as europe's main enemy. >> there is a confidence vote on the prime minister's plan to tackle italy's own employment program. the labor market he is proposing is boosting unemployment benefits and making it easier to fire people. he said he will win the vote and promises that changes will be sweeping and swift. we spoke to the employee's director and said the country is desperately in need of these changes. >> it's impossible to make strong reforms. you cannot reform a country if you are not able to face

obstacles, strikes or conflicts. but italy desperately needs reforms. reforms are tough. and of course, they will not be liked by everybody. the government and the parliament have got to go on. >> and we will be discussing this and some of the issues throughout the morning. much more to come on this subject, what can be done to create jobs if anything. a partner marco elser will join us. >> air france will release figures, how much impact was made by the recent pilot strike. what impact? > we understand --

[technical difficulties in audio] >> we have a problem with your microphone, so we will come back to you in a moment. perhaps instead we'll talk a little bit what is happening in these markets. you were talking about what we have seen over recent days and what the i.m.f. has been saying. how long the u.s. and the u.k. where g.d.p. growth has recovered, how long can it go on its own trend? how much is being held back by weakness in the euro zone and how long can it go on its own course. >> frothy, frothy, frothy. we have the fed in july talk about the froth in the u.s. stock market, buying technology

stocks and various officials mention about the proggetty nature. >> technology. >> and the market marched on after that. >> don't spoil it. >> how has the market marched? >> technical issues have been overcome. >> she is now audible. >> we were asking you, we have had this strike, what were the numbers, what was the impact? >> 7:00 a.m. is when we get the numbers and see how many people were put off buying tickets. half of the flights were canceled per day on average and lasted more than two weeks. started on september 15 and didn't end until the end of month. 20 million euros thought it would cost them but when you add it up, it could cost 400 million

euros. revenue loss in the terms of the future and people won't be booking any more. >> there was a battle with the pilots going on sometime and there was an interesting story where air france was to announce a new low cost unit. but has been denied. this is an area of contention. and still talking about that? >> that is so interesting, what the reaction has been. the whole reason that they were marching out is because of the area. they wanted to take on the likes f easy jet, the discounters. you have seen the germ airline do it. your rather highly paid pilots are going to lose out on money and benefits that we have always received. some of these pilots are receiving in excess of $200,000. and this is what we have seen a shift in, a consumer reaction.

1998, pilots walked out, threatened to walk out in france just ahead of the world cup. can you imagine the havoc that would have been. 34% of the population were against the action. everyone else said you ought to be working out. >> the world has changed now. >> poland around this particular strike, 69% said this is unjustified. germany, saying their pilots are looking at the strikes going on, because they are worried about losing their benefits. 71% in germany said it was unjustified. we are seeing people, the consumer fighting back against this. but what really is so sad about the situation, it is playing into the very rival's hands. this is what they are trying to do is fight back against easy

jet. they are winning. easy jet got more in sales. they got 3,000 seats over the course of their time. >> raised their profit forecast. >> you have converted. and this is a key consideration. and middle eastern car years went out as well. >> easier to win clients than it is to lose them. k.f.c. arent company of and pizza hut has restaurants in china struggling. for more -- >> nuggets move markets. >> would you order the chicken nuggets at k.f.c. if you thought there was a chicken inside of them was not safe. that's what's going on in china.

this is a big deal. k.f.c., pizza hut, both brands yum, 6,400 restaurants in china. that's where they get 2/3 of their revenue and their sales are down by 14%, because this is the second food scare they have had in china at yum in about 2 1/2 years. so the chinese are saying, i think i might hold off for now. a little bit worse than expectations in terms of exactly how many chinese have been staying away from the chicken nuggets and the pizza. the issue is with their global binlier who they have sin ned. they aren't sure how long it is going to take to recover. it takes consumers six to nine months to get over a scare.

once you eat bad chicken, you don't forget that. >> talking about the overall numbers. you got three, pizza hut and taco bell and the k.f.c. how do the numbers stack up? >> the interesting thing is taco bell was the bright spot. they don't have many in china but 6,100 in the united states and taco bell is trying to redefine itself. trying to move into the breakfast space and dollar cravings menu and everything on the menu is $1. >> have you tried it? >> no. i'm more into the protein-heavy. >> nutritious menu. tein-heavy menu. not a backwards looking one. sales-wise, they missed by a hair in terms of revenue.

in terms of profitability, they were in line. little bit better depending on which analyst you are talking to. it's the forecast, they were telling the market they expected earnings per share to increase by at least 20%. the market thought it was going to be 14% and then revised it after the market yesterday to between 6% and 10%. big reduction. i have to say if you look across the space, their shares down almost 13%. so underperforming restaurants in general. but some of the issues that they are tasting are some of the same issues that mcdonald's is facing. in china, fastest group of consumers in the world and so food scares are an issue for mcdonald's as well. the strength of the dollar, increasing strength of the dollar is one thing you have to look at. >> you can join in on our

conversation on twitter. will face p, reforms the ultimate test. will the i tlian prime minister be able to win over the senate?

>> renzi faces a confidence vote on his proposed jobs act in the italian senate. the proposal has unions up in arms. renzi insists he will not accept any vetoes on the labor vote. here to discuss it is the chief european economist at jeffries international. 17 years ago since we had the first european jobs summit. back then the jobless rate in he euro zone was 11%, now it's 11.5%. why have we made no progress in 17 years? the chart goes up and down, but essentially the figures are the same. >> when you think back, he was

writing an awful lot why there was a high jobless rate in the european economy. and again, he is looking at this issue. he is writing about it back in the early 1990's. obviously, this is being hotly contested. lots of issues and we have gone through a major recession. g.d.p. is down from where it was before and unemployment is high. various european economist are very different. improved. market has labor force is patient. and look at switzerland and france. all countries have different issues. >> everybody holds up spain. the one thing being held up is what to do. you can't devalue your currency. spain -- tell it is what it is that spain did that had such a

dramatic impact or is having a substantial impact that can be replicated in italy and france? spain, it went into a major recession. you had no choice but to slash costs and splashed employment. unemployment goes to 25%. >> that is still the case. but they reformed the labor market. one of the issues was the labor market is very inflexible. wages were tied to the price of oil and the labor market is more flexible and did cut costs. with spain, if you cut employment and labor costs improve and exports. >> you still left with the problem. >> i don't think they are going to grow out of it. they have a lot of debt on the balance sheet. it's not the case as flexible as the u.s. or u.k. markets. germany doesn't have a

particularly labor market per se but has very employment. unemployment is only 4.9%. and doesn't have a particularly flexible labor market. >> thank you. ♪

countdown." ack to " we were having a conversation about job creation and you were going back to some of the words that the i.m.f. has done. reform.laboror market is it more than going into another country. >> services are very broad and in germany, it is being driven by business services and here in the u.k. this has been the main driver. this includes things like architecture, design, social media, i.t. >> cross board? >> we had a market in services. in manufactured goods. and there is trade flows in the goods arena.

so entry into services and physically low. that's where the bulk of the european economy lies when you look at individual countries. so you need to have a free market in those areas. and that will help all these market reform. >> what do you think of the french and italian argument that you need growth -- it's liking chicken or the egg, what does come first? germany should be doing more. we want to balance our budget. who is right? > in germany and dutch case, boosting public spending and cutting taxes. hey have the scope to do that. help euro zone economy recover nd market reforms.

these wide-arranging reforms. without some ut additional help from the core, it's going to be much more ifficult reform. >> how much growth, all this talk, all this discussion, how much structural reform -- he aid structural reform is .7 of 1%. how much growth can we get out of it? >> the numbers don't seem silly. but the issue is the time line as well. not over the next one, two

years, but five, seven, 11 years. the reforms we have in the u.k. didn't bear fruit until the 1990's. look at germany, 2005. their market reforms kicked off in 1995. >> distancing himself from that. >> at the same time, these reforms will take a long time. as i said, these reforms have to be much more wide arranging but a stronger economy. businesses need a reason to invest and that's very important. >> david, thank you for joining us. >> 6:26 in london. ♪

>> u.s. economy gained strength. two zones, one which is growing. so i'm not surprised by the appreciation of the dollar against the euro. it may well continue. we don't predict rates. but as the u.s. becomes stronger indeed the dollar will appreciate and the euro will

depreciate which is good news for the euro zone. >> that was the chief economist speaking on the strength of the dollar. has the market checking in. just after 6:30 here. before we get those federal reserve minutes, dollar index climbing, will the minutes show how much discussion there was about the possibility, even the hint of the first hike possibly coming along since 2006? the fed -- the u.s. economy is not strong enough to stand on its own and leads little hope for the rest of the world, getting ready for a hike but it's premature. premature to begin hiking. the dollar strength could knock 1/10 of 1% to 1/8 of 1%.

dollar higher, euro lower. putting more pressure. growth estimates for europe having been cut yesterday. deutsche bank joined the party. year for the end of the and $1 .15 by the middle of 2015. the cuts are coming in at once. >> top headlines. u.s. prosecutors are getting ready to bring charges against the bank's surns currency rate and will likely follow in 2015, people who are familiar with the investigation. the justice department may seek guilty pleas from several firms including one in the united states. clashes have broken out in southeast turkey as kurds

protect against the country. 10 proximate cause proximate cause local. earthquake has struck southern china. the quake killed one and injured over 300 people as well as destroying almost 7,000 homes. >> bloomberg been talking to the second richest man. spoke to our colleague in new york as his company pursues its breakup to comply with new laws. >> you have to talk a little bit of business. you have been the leader in the telecom market in mexico. >> 28 countries. most of latin america. in u.s. we have an important operation and now we are getting involved in europe. >> we were talking about splitting up companies in united

states. mexico, there is reforms and you are anticipating splitting up american mobile. it has helped your stock price. it's been a benefit it seems. share holders are applauding this breakup. the e operation -- cooperation of it in the pass. >> do you support the reforms? >> i think two years ago, because it has changed. need clear rules and the rule that was put in place is that the market will be 50%. that's ok. what you need in business is rules and state of law. and if you have some regulations , this mandate of law, you

should do that. >> in this complying with the rules, i know american mobile has been in talks with various parties about buying its assets up on the east coast of mexico. have you been negotiating with t&t? >> west coast, and the border. >> bigger package of assets. >> bigger package that we think working with the potential buyers to do this. the bank is doing the job and the bank is working on that to have the information available to make the corporation interested and get involved. >> are you closest to the deal with at&t? >> that's all i can tell you. >> one final front, i know you

had mark zuckerberg in mexico, is that right? >> we were happy with his presence. we have every year a meeting, a conference with 10,000 scholarship and 18,000. and he was very, very nice and we were very happy that he was there in mexico. >> what did the two of you talk about specifically? >> everything. oth have many, how you say things in common. . ternet tax on everyone broadband access to all. and location. very important for society of

nowledge and technology. >> richest person in the world, bill gates, $83 billion. the gap is $13 billion, correct? that in itself would make you about the 70th richest person in the world. big gap between two and three. >> we have a guest talking about the top 1%. coming up on the program before that, tech leaders get on their bikes for charity. we went along for the ride. and carolyn has more on this, next. ♪

> shares fell in sydney. they are now prohibited in most circumstances from making a renewed bid under u.k. rules.

rio tinto rejected the proposal. it has been agreed to give up future bonuses. they were unhappy. the washington-based lender intends to reduce its budget over the next three years and may cut jobs. start targeting users with tiesments. part of the social network's drive to boost revenue. it allows it to reach people within a mile of a particular advertiser and only for show up users to access their wherebs and the change facebook assured users private information won't be misused. >> vying for reading. they have raised $1 billion

going toward child literacy. caroline joins the ride from paris to london. >> bike. helmet. glasses. meet the tech bikers. investors riding wheel to wheel from paris to london raising money for charity. >> the goal was to bring the startup community together and do something for the good of all society. >> tech bikers is the brain child of this man behind google london. >> we are doing really great on fundraising. >> third year, the riders raised 170,000 pounds with money donated to room to read.

>> we found there is a passionate group of people that they are willing to do the challenge but also work hard to fund raise and help kids get access to education. > off we go. >> these riders work at the cutting edge of technology, but o fancy tech can make it easy. still, the evening is a chance to refuel and maybe talk a bit more business. they can network and bring together talent and money. >> having been in other startup communities, you can meet people over networking but you never make a real connection. but if you cycle with them for

three days, you will have friends for life. >> afterwards, all the sore muscles, the welcome back home is warm and the beer cold. >> let's find out. for more on the success of tech bikers by the co-founder and caroline who was on that ride joins us. mark, that answered the key question, it is for charity and helps people network. how do you network while riding a bike up the hill. there are other opportunities. >> networking, once you are finished the day cycling and nothing like encouraging someone to go up a hill and also pitch your business. depends how fit you are and i guess that is encouragement there. >> what came out of this, any

businesses emerged? >> we have seen debate successes over the last few years. a number of people have sike called next to their future employers. we have seen people found a technical co-founder to build that out and blaze, which is a laser-light technology company go from ideas to kickstart to development based on a tech biker connection. we see a lot of business success. >> i understand the bikes were taken. >> i was on a road bike, so it made the process a lot easier along with the padded seat and made it consumer friendly. one of the stories was brilliant and someone on a tandem. the startup was in the front and the angel in the back happened

to be blind and being chased by the money. it was a brilliant team. >> chris wants to make sure michael was working. we find the challengeses that entrepreneurs find every day comes out through cycling. so chris and michael are one of those great success stories. >> it's spreading. we had in the story, it's now been ridden from copenhagen. >> we have interests to cycle next year. a lot of interest in america and australia. and it's great to see the opportunity grow because at the end of the day it is great for networking and money raised. talk to us about london and there was a series on interviewers, has london shifted

a gear in term of its dominance and presence? >> five, 10 years back, you had the makers and founders and what they have been joined by now after success is the money and the professional funds and infrastructure that goes along with that. google opened up as a central heart for co-working and sharing of ideas and that is to bring a lot of founders and startups and mentals together in one place. we needed that kind of opportunity. there is still a long way to go, but maybe tech bikers can get people together. play golf? o they the way that people network these days and we talked about sports companies and how they network. bearing the

it involves sports and philanthropy. >> classic entrepreneur thing. i don't know if they play golf. but cycling can raise money and ride a bike which appeals to the interviewers -- entrepreneurs. >> you you are behind a couple of other startups. this is shaken. nothing in there. but what is shaken? >> it's a monthly cocktail kit that arrives by post. it is booty gray box. lots of people know what great cocktails when you get home. sometimes they are messy or costly and we provide ingredients and means you can leave the kitchen and become an

expert. we are three months in and we are looking to continue to grow. we want to be that open point for people to experience great cocktails and other commercial areas as well. fingers crossed and ask me in three months' time. mixology. the whole thing is changing, the booze makers are going after these makers? >> the research suggests that spend at home has taken over spend at bars and that is a shift that i'm capitalizing on and lots of major vendors are trying to do the same. we can bring spirits that are unique and different and represent their own life instead of picking on one particular brand. >> you brought out whiskey when

we were out cycling and gave everyone something. it's the whole entrepreneurial spirit. would you have been able to follow this passion through? and it is like a perfect storm, if you have an idea, spark it. >> now more than ever what i'm seeing in london, if you have an idea, people are prepared to listen. it has to have strength and legs and no one is going to op the door for you. but not going to step the networking environment. my stockups, you do become one's best friend. the doors a little more open. >> thank you very much. great to speak to you this morning. >> bbc has a mega star lineup for its new promotion. and the perfect song used for

the event. ♪

>> welcome back. 6:53 and finished the last segment talking about booze. let's talk about caroline's favorite topic, booze. >> bad reputation on twitter. she's really not that bad.

>> nice story. . er, sider, even wine this woman is not about to announce the executive director and been at the company for 26 years and now the boss of a very large and successful company. you can go from anywhere. from mop to the top for adams. it is brilliant and showing her loyalty of someone staying in a company for 26 years. you are getting there with bloomberg. > five or six years to go. [laughter] >> way to go. >> harry potter, why not? 15 billion pounds, that's what the wizard brand is worth. that's not what we are focused

on. rowling. it went amuck. and harry party line. all about will she or won't she write another story? . >> how many? >> seven. ight movies. $7.7 billion. and 467 million copies. >> we are getting children back into reading. >> and throughout all of your kitchen gadget urges, tom is eeping it real in the kitchen. measure around that with your centrifuge. >> what? >> centrifuge. >> stir that up. he hasn't had a microwave. there are no new recipes for

anybody who feels slightly overwhelmed by the wealth. and also says, there will never be a gravy. >> where were you all in 1997 hen the bbc released their own star-studded version of "perfect day"? lovely versus and became a single. ast night they did it again. beach boys' song sung by brian wilson. i think this is the video. sam smith, chris martin. >> forward williams. >> lord knows. >> i realize it. >> i have heard it.

we will be back, second hour continues after the break. italian prime minister and what he is trying to bring down his country's double-digit unemployment rate. ♪

>> the i.m.f. forecast. chief economist tells bloomberg complacency. >> the jobless generation. with young people out of work, leaders meet today with an emergency summit to try to create jobs. >> and france to release its sales results after the worst strike in the airlines history.

>> welcome back to "countdown." >> a little breaking news. >> russia's central bank has been selling 16.8 billion rubles. selling dollars to prop up the ruble which has fallen for a number of reasons. you know the reasons. the ongoing geopolitical event that's taken place in ukraine. because of growth that is at best flatlining. the central bank has been raising. all to prop up the ruble. we have to take a 16.8 billion

worth of rubles. an ordinary ruble drop is going to cost $30 billion by the end of the year. that's coming from a number of different houses. -- the ruble drop drops. this is just one of the reasons why they have not come out with much more robust retaliatory measures to step up in terms of the european measures being acted against. >> and i guess tensions have receded on the ground a little bit. >> we were waiting for numbers from air france since september. we have those numbers now.

we have a report on how big an impact the strike has had on the airlines. >> air france is going to actually cut by half a billion euros. you said earlier, easy jet picked up some of their passengers. >> easy jet picked up 3,000 societies seats. 5 million pounds. it has been estimated that five million euros a day is what air france is losing, but they estimated air traffic is down 15%. this is where they are being

eaten into by the middle east carriers. they say half a billion. we were hearing about 400 million euros, is where we were at. you have 10 million a day, but they you have to factor in going forward. we heard from easy jet about their 5 million pounds. this is a much greater impact. this is an impact of 500 million euros. there are a lot of airlines that will be picking up business as a result of this. >> they have to also return money to those left out as umans.

then also, you are going to have to compensate. many people have turned to easy jet, have to turn to competitors. you don't have to get away. you can suddenly end after a two-week strike. >> and they say sometimes once you try a different carrier, sometimes you don't go back to the usual carrier. >> well, the business passenger is who easy jet has been trying to woo all along. they are clearly able to convince people to go that way. what is so ironic about the wholization, is of course, the strike came about because air france was trying to fight easy ryan air. the part that said, no thank

you. we're worried about the benefits. so they walked out. but now, they are losing even more so because of the strike actions to these competitors that we're desperately trying to beat by setting their own discounts, rivals. not so clearly. >> ok. let's see, thanks for that. >> there was a selloff, in case you haven't noticed, both sides of the atlantic. let's talk about the i.m.f. it would be less than originally forecast in new york, and the s & p fell 2% lower. it was the same story here in europe where stocks also fell. let's look at futures. we have european equities ndicating lower.

they are getting a little bit f a bounce back. you are up 5% on the year. 41.84 in paris. i love the line. let's look back at the u.s. futures. if you are a strategist, whether you are in forecast on the standard & poors, you may feel like a kid coming home from fall break with a new tattoo. you're going to have to talk about it. let's have a look at the mix. volatility is rising. don't you know back in 2008, volatility was up at 80. we are nowhere near those levels. however, a little bit of a health warning 2008, 1987, and nine nicotine. could it be the start of a volley? if you are in doubt if you should be in the market, warren

buffet said we are in a zone of reasonableness. have a look at the treasury. what you see there is city group saying, we have hit panic levels. i like a little bit of manic. 10-year government bonds jump ff their 2014 low. so on valuation grounds neither the s&p 500 nor nasdaq is trading. >> you are trying to decide if you like that valuation at all? >> exactly. >> e.u. leaders facing the challenge of how to reduce the region's 11.5 aunemployment rate. mario draghi has described this as europe's main enemy. they talked about matteo

renzi's plan. his reforms include boosting unemployment benefits and making it easier to fire eople. renzi said he will win the ote. >> she says the country is in desperate need of these changes. >> it is impossible to make strong romples having the full consensus. you cannot reform a country if you are not able to face obstacles, strikes or conflicts. i think italy needs reforms. even if the reforms pass, they will not be like everybody. the government and the

parliament has got to go on. >> these reforms will not be for everybody, she says. good to see you. >> morning. >> tell us about the objections to these labor reforms. why are they proving so controversial? >> above all, because mr. renzi wants more power to fire workers. this has attracted attention from major -- there has been an issue on the confidence vote in that today's bill they will be voting on, the legislation, they have stripped out for now the controversial parts. they will just be voting on the less controversial issue such as giving incentives to companies for hiring more non-temporary workers. he's going to delay the controversial issue on the firing because of the opposition.

not just from unions, but he's getting oppositions from within his own party. sort of the more leftist elements in the democratic party that don't like him tampering with this historical rotection for workers. >> does that mean there isn't any chance that renzi loses the confidence vote? >> no, the numbers, it looks like he will be able to win this fairly easily. the dissenters probably will stick with him on this. but, as i said, the real key vote will be down the road when they package all of those, you know, hotter topics into probably another confidence vote. >> assuming he manages to get this through, that this doesn't go his way, what is -- >> this is his top priority

vite now. if he can get this labor reform through, it will also send a ssage to angela merckel and information that he can push through structural reform. the other important part that's missing, though, is the election law. he wants to change that, to make it easier for parliament to elect a stable majority. that's because, perhaps italy might be forced to have early elections yet again next year or the year after. >> thank you very much. >> you can follow the conversation, join in the conversation, tell us what you think about this. we're always here for all your comments. >> whatever you want. ♪

>> welcome back. today's company news. the cruise line industry has taken a hit due to concerns over the ebola virus. he largest operator up 5%. norwegian also closes north. ebola and weighing the impact n tourism. >> part of its package for web customers, according to a person familiar with plans, e.e. said to plan tv service. it will give customers access to 75 tv channels. facebook is to start targeting users with advertisements on their most recent location. part of the social network's drive to boost membership by expanding member data.

it will allow people to be reached within a mile of a particular advertiser, but only show up to people that have allowed the app to know their where abouts. facebook has gaurpted users private information won't be misused. >> joining us now from global trategies at barclays, ian stark. global equity markets, we don't know what they were referring to exactly, the i.m.f., but would you say the equity market ? >> no, we would say valwagers in line with historical averages, globally. a little above that in the u.s. and a little below that in other parts of the world. it doesn't feel like a big

market change to us. social media ay stock -- >> i would agree. if you are looking for extended valuations, the u.s. is the place to look for those. the mark has been leading the recovery in global equities and valuations are higher there than they are anywhere else. having said that, it doesn't look like an over-valued market to us. . >> we're going to earnings season in the u.s. many analysts are bringing down their expectations a little better. >> i think there is going to be a little risk there in the u.s. on currency because of the strength in the dollar through the quarter. it is not clear that numbers have moved enough to reflect that shift in the currency. having said all of that, you know, we still believe that

companies will be beating a forecast in much the same way at they do in most other quarters. a little risk there, but not something we are desperately worried about, no. -- the kind of investors you are stating in the market. ely.ing retrospectiv you say momentum is not in this market and stop looking back to 2007. what is so different about this market? why are you so convinced? >> there are a couple things on sentiment that are somewhat contradictory. if you ask people how they feel, most people suggest there of -- there a lot

of bulls and not a lot of bears. there is the idea that short-term sentiment does not -- if you look at the longer term perspective and you look at the behavior around big market tops in the past, usually we see performance chasing behavior across the market in a much bigger way than we have done in some of the selected areas that have been running hard in this market. it's just not there from a global perspective. so momentum and performance chasing behavior is not there. >> we're going to chat more about japanese equities, we've chatted about the u.s. ♪

>> ian we were talking before the break about global equities. you said in your research, the case for the gains were increasingly on non-u.s. equities. where does that leave the rest of the world, and where are you looking at for low gains. >> we are currently looking at european and japanese equities to give us those gains.

both regions look relatively cheaply priced, and both should benefit from policy measures as well. >> and that's because the negative surprises we've seen, because you think we have bottomed on those? we're not going to see any worse news? >> when you look at the degree of negativity around economic indicators, it is pretty extreme at the moment in the euro-area. it is unusual for that to persist. we can go back and look at similar periods this the past, it has been right to take the other side of it and look more toward the improvements in economic data that usually come after a period of negativity. >> and you are committed to europe, aren't you, ian? you have an over-weight rating? is it justified by the earnings outlook? >> we think so. we think if you take a more medium-term view and look at 2013, the drop in the euro in particular, we're not talking

much, but a little bit of a strengthening in the gloth out of next year should be enough to give us certainly strong double-digit earnings growth next year. hat's pretty good. >> talk to me about -- one of warren buffet, he says that the market is in a zone of reasonableness in reference to the u.s. equity markets. you say we remain underweight. more on that region history. the pace of earnings could be slower than other regions. are we just running out of steam a little bit? >> a little bit, i think. i would completely concur with the reasonableness statement. i think if you look at the u.s., it is not expensively priced, it is just richer than other markets around the world.

if you take a global perspective, the market is as close to a global perspective as you could imagine. >> they are one of the economies that are going to grow. we do not want a bigger weight. >> if you look at the nature of growth going forward in the u.s., i think more of it is going to come through wages and salaries and less of it through the improvements in profits and profit margins. so the up-side for profits is there, but it is likely to be less strong than it has been in the past. >> thank you very much. ian scott, head of global management. >> what happens when the rich become too rich? author daniel darling is here with his opinion. stay with us. ♪

>> welcome back to "countdown." 7:30 in london. the ruble is on the move. confirmation. just off that 40 level thursday it is expected by the end of the year deutsch bank will have to spend $30 billion defending the currency. they also moved the plan on the currency as well.

so the dollar certainly moving against the ruble. the dollar overall is stronger in global markets. the u.s. a growth rate of 3.1% next year. minutes from the fomc, federal reserve minutes. have they talked about the possibility of a rate hike? some say it won't actually happen. others say there is a possibility of rate hikes. we're getting a little too excited too son. premature to talk about hikes and dollar strength. what you've got here is a drop in the euro. obviously cutting the european growth rate. we have merckel. deutsch bank $1.25 by the

middle of next year. .oining the bandwagon >> e.u. leaders meet in milan today to discuss jobs in the euro area. one-fifth of people out of work. matteo renzi says he has a plan to overhaul the country's labor issue. >> we will go to the discussion with our european partners with a plan of structural reforms that is the most ambitious ever conceived in italy with a time frame for implementation never seen in europe. >> forces broken out across southeast turkey. the advance of -- a 10:00 p.m. local time cur fefment w has been imposed. >> a 6.6 magnitude quake in

china killed one and injured over 700 people as well as destroying almost 7,000 homes. >> chicken nuggets are causing a little stir in china. the parent company of k.f.c. and talk owe bell has missed profit estimates. probably because i haven't been eating it. it's struggling to survive a second food safety scare for a little more. think of those iconic brands. it's about food safety, but that's what has gone to the top of the agenda? >> yes. the issue is, if you think the chicken in your chicken nuggets might be rotten, will you buy them? the answer is, no you won't. at least that's the answer in china. as you say, mum has not just k.f.c. but also 6,400 raunts there between k.f.c. and pizza

hut. sales down 14% in the last quarter. this is interesting because the scandal broke out in july. it was a shanghai tv channel called "dragon tv." it showed where people were at the factory of the o.s.i. group which is a subsidiary in -- has a subsidiary in china. biggest meat supplier in all of china. supplies not just yum restaurants but mcdonald's and starbucks, a whole host of restaurants, and you see people taking raw meat off the ground. you see people taking meat out of a vat marked sub standard food and mixing it with decent meat. so quite the square in china. and the chinese, despite the fact that yum severed its ties with the o.s.i. group and pulled its meat out, just like you can imagine, a vegetarian

mcdonald's or vegetarian k.f.c., that's what they did, but they said they are not sure when sales will recover, and sometimes it takes six months o nine months for these to recover. >> kentucky fried tofu maybe. >> inequality and the 1%. what goes wrong when the rich becomes too rich. what does go wrong? what evidence have you uncovered that tells us wealth concentrating within the top 1% is so damaging to society and the other 99%? >> when you get exstream concentration by the top 1%. there is a remarkable degree of variation between which countries. in the u.s.a., the top 1% are taking over 20% of all incomes.

in the u.k. about 15%. in the netherlands less than 7%. it has all kinds of repercussions. immediate income in this country is lower than france and germany. the average income in france and germany -- actually, living costs are lower because housing costs are lower. the average person does much better in a rich country where the 1% are taking less. >> you think for that reason it is ok to focus a lot on this 1%. others would say, let's not focus often the 1%, but focus on the 9% and try to get equality throughout that group. >> we actually have better distribution. thubs numbers have gone back to the 1990 level. so people are together in the u.k. except you see real growth.

hmc reports that in april they have seen one of the biggest increases. you have falling living standards in the middle for most people. this is historically unique. for the whole of the last century, the 1% -- when we became more equal, the 1% took less. this has ince 2008, not happened before. it is hard to say what's going to happen when a small number of people aren't doing ok. and even those just beneath hem are actually seeing -- >> it is tough out there. sometimes you see fill by throughout the -- philanthropy throughout the top 1%. there you go, people giving out half their wealth. these people are incredibly wealthy.

you have bill gates. you have phenomenally wealthy people in a position to really change the world. what's wrong with that? >> you have to go back a century to find -- >> what's bad about that? >> what's wrong with this is what went wrong a century ago. you can't run a world well with a few well meaning people at the top giving out their money. >> it is not a bad thing, is it? >> it is when you cument to get them all, that's when you spend on mundane things like basic health care accident which is a t more mundane for philanthropists to do. > there are wider more muntain things about health. creating a health service can't be done by philanthropy. that requires a society more in

it together. we created a health service when the rich and poor came ogether, and the rich required the health care as well. >> politicians in this country picking up on all kinds of con notations about -- connotations about taxes. you are referring to the 1920's and 1930's? >> you are seeing a change in sentiment? you are seeing changes in tax laws. they are very tiny, but your job -- but you are seeing property tax gains changes. >> how much effect will that have on the super wealthy snl > they will keep getting richer. >> they have for 70 years. but for the 70 years before that, they didn't do that. they came together. one more prub problem with the certain , there is a

number of people -- this instability doesn't help people at the top. the one reason the people at the top began to worry, they were worried about their own positions. they were willing to give up a bit of their wealth to have a more stable society. >> thank you. dorling nny discussing his book, "wealth and the top 1%." ♪

>> welcome back. the word of the day. the i.m.f. said the risk of equity losses has risen. i thought i would look at a couple indices to see if equities are dropping worldwide. i'm looking at the russell 2000. this is the nasdaq technology index. charts go back to 2011. it is very clear what the trend is. look what has happened since

those circles. i circled july 15, 2014. that's when the fed in its semi-annual policy report said valuations of biotech stocks appear to be stretched. i look at the biotech, what's it done. it has actually risen by 6%. it's only 5% below its record reach. the pedestrian didn't speak about the russell 2000, but many say it is a bit "frothy" to use the word of the day. interestingly, the russell down 6.7% since july 1r5, and down by 11% since march. there has been a correction within the russell 2000. both indices have come farther since 2009. the russ he is has risen. the nasdaq biotech has gone up.

biotech trading at 250 times estimated earnings. that's about the five-year average of 189. it is just on this day when we are fixated with this term "frothy" just to see how frothy these two indices are. that's the index when the fed said techs continue to rise. >> when it comes to speeding up labor reforms, he says italy's prime minister matteo renzi is the man for the job. they have been saying article 18 which lows dismissal of workers only under very specific circumstances, that needs to change.

what do you want to see in terms of labor reform? >> well, there should be one ord which means "indeterminate term." in italy once you have a job, the company is forced to hire you for life. it is more than a wedding. it goes until your grave. this is what has procrastinated and obstacled any takeoff of the italian labor market because italian employers are reluctant to employ people knowing that they will never, ever be able to get rid of them, no matter how bad they are. there is anecdotal evidence of people being caught stealing or cheating, and the employer cannot fire them. this is something that has to be abolished.

it is a remnant from the past and has to be eliminated. the unions in italy, two of them have agreed. one of them is still kicking and trying to prevent this abolishment, which i think is necessary. then, mark my word, renzi will be successful in doing this. >> final markets won't just see reforms. hat is the broader italian electorate? what do they make of it? what did they want to see? re they listening to matteo renzi on this? some of these laws have been in place for 40 years. he e.u. has been arguing about regulations for 17 years. are we going to see traction at this time? >> yes. the financial markets are voting with the fed tightening. 500 base points over government -- german government bonds.

it is not a question of if, it is a question of when. financial markets tend to be light. they are going to make sure that renzi is going to carry the vote. this after, confidence vote in the senate, article 18 has been it is to -- unquestionable is and definite that renzi is going to carry through the day. he can move forward these reforms. this is just part of the reforms that matteo renzi promised to do when he brought himself to power. you can't forget, he brought himself to power. he was not elected. he has been implemented so quickly chipping away at bastions of old corporatism and he is chipping away at it like a good, good miner. >> you sound like quite the believer, marcus. you think he can actually

deliver something that's proven difficult to deliver in the past for italy? >> well, i've said it in the past. matteo renzi is half the age of many previous prime ministers. so for one, he has energy. witness yesterday the fact that he called a meeting at 8:00 in the morning yesterday. something that never happened in the past. witness the fact that renzi can live off seven hours of sleep and still function 17 hours a day spectacularly well. he has energies which are not available to people who are older. that, by the way, is probably the problem in italy, because older than other people. we have a very nice lifestyle, a very good welfare state, and people are reluctant to give up their vested interest of privileges that have accumulated. unfortunately that's not the -- the music has changed. italy is part of the european

union. italy has to adapt to -- i would not call it the straight jacket, but to the common sense of the dictate of the european union. in the old days, it was easy for italy to get out of the cunsu currency. but not anymore. >> last night ll renzi was trying to distance himself from anyone comparing him to margaret thatcher in the u.k. they were saying he's taking a tough stance with the unions, and he said he felt very different. how do you measure this up against previous reform issues in the u.k. and germany? >> it is interesting. a very difficult question. matteo renzi is the first italian prime minister from the left who is doing these reforms. i think his biggest fear is

that the left wing of his party, the edgeage rated people who still believe in marxism, still believe in the soviet union, still dream the past as if it was better. they are free to have those thoughts. renzi is a pragmatic person. i think at this point the only people that can sabotage his plan are this minority of people on the ectstreem left -- on the extreme left which is the transfer of the old communist party in italy. renzi is as centrist as a person can be. even though he represents the democratic party, he has an enormous amount of liking by all parts of the people. people in the north, the south, rich people, poor people. because he is the only hope italy has.

anyone who tries to create obstacles is in for a surprise. >> it is 7:51. you are getting a live view. futures down by half of one percent. ♪

>> welcome back to "countdown." europe plays the catch-up game with asia. john joins us now. are you going to be taking "not the move." three leaders in europe talking about what they don't agree on? >> yes, it is a little annoying. it's a little bit of a political side-show, isn't it? we talk bd italy. the thing about italy, once you have a company that goes beyond -- 15 employees, you are subject to the law. if 5 a% of the companies re at 15 employees or lower. these two things go together hand-in-hand. the argument is, you have weaker data in germany and across much of the euro-zone.

what can central banks to do about that? >> ok. i think on that note we will leave. >> and we'll have more. "on the move" is next. ♪ >> welcome to "on the move."

we are minutes away from the start of european trading. inures pointing lower london. this is what we are focused on. european stocks fly. isope's largest economy arguably on the cusp of recession. on angela merkel to change approach. lower afterhares the airline says a 14 day pilot strike may cut from earnings. we will be looking at the

federal reserve last meeting. the new york fed president said raise interestto rates. during over in frankfurt the same thing. it looks like we could have another day of stocks moving lower. >> this is europe playing catch-up we have seen from the equity markets in the u.s. we are seeing the central bank in russia intervene. what they are going to achieve that will turn around 10 years ago. in the united kingdom lets the of some of the stocks are moving. tesco is up 3%. 6/10 of 1%. a little pressure on rio.