fashion battle. mulberry group sees revenue ile burglary climbs. the ftse is lower. 54 points lower on dax futures. the u.s. equity in europe. >> it is going to be interesting to see whether we can find any sense of reprieve. the chinese drop their interest in asfor the first time many weeks. equity markets are opening lower. 1%.on down a quarter of do not squander the opportunity that a low euro brings to you. that was the message from morgan stanley. morning.here this

i will pop out the full interview. burberry down over 3%. lower.sales came assetse taking back some in japan. there is an overall concern about retail side of the business. by almost 3%.ng cpi in france came down for tenths of 1%. this inflation story is the basis of the market. expectations were expected to come in. we will bring that to you later. the monetary transactions, are they legal? a different opinion if you have dinner with a french person. let's look at the individuals. burberry, i will

come back to that. will be below estimates. first-half revenue declined by 17%. the foreign exchange has been tough for us. it is a perfect storm. that is one of the reports i read. you have got ukraine. you have that chinese people not traveling as much as to hong kong as a result. you have got the strength of sterling during the third quarter as opposed to more recently. that is a perfect storm in terms of luxury, but is this a company that can weather the perfect storm? mulberry is down. we will see how that trade. also lower.

let's take a look at equity markets. what you have is a continuation in a little bit of euro weakness. you are seeing that continuing down. the number may compound overall. what i saw this morning was german, france, and italian bonds being lower. you are looking at euro-dollar again. the dollar weakness, the recent weakness is going to be short-lived. it is going to really show itself in the form of the euro dollar trade. back to you. >> equity markets opening lower. just getting some breaking data out of spain as well. spanish inflation comes largely in line with estimates. look at the core figure as well. year, -0.1%. on not great.

plenty of debt that out from spain as well. expecting a pullback from 1.4%. german 2ew down. the data points to watch today. if you are looking at the market, a lower open. that's get some perspective from the head of investment that cross page -- cross bridge capital. great to have you with us. -- were you a seller last week? >> not a seller per se. we have a combination. if you see a selloff in the energy market, it is much more than others. then pick out some sold-out sector like mining. if you look at rio tinto, they are cutting it into almost half.

you will see far more cash come to the shareholder. bargains, and what makes you nervous is if the earnings season doesn't come well -- i hope the earnings season will be ok, but if that doesn't come through there is a nervousness in the market. >> is that a critical point now? we have seen pullback. the allusive correction, but we have dropped 5% in three days. >> we are coming back to europe once again. everybody looks at europe, and the europe is back in recession and inflation is falling. ecb is in the camp to do qe. the bundesbank must take the lesson from what ben bernanke said. there is too much deliberation about whether qe should happen or not. we have to achieve that and

problem. solve the >> you look at the investment environment of where we are now. they are winding down qe again. wind down qe this kind of thing happens. there is still a cell down. you get a slowdown in the general economy. we have heard from the likes of stanley fischer, the fed vice chair, who is ready to say low rates for longer, but equity markets are not responding anymore. >> let's review the data. we have had gdp data in the u.s. there is a lot to do with sentiments. it comes back to the same thing. wobbly.r is the earnings numbers are very critical. i expect financial to report strong earnings. they don't have a hard number to beat. compare the average price

it was 76.7 and not 78. i think earnings will be be. today. inflation is out is the bank of england going to stay on hold much longer than people think? >> i agree. i think the bank of england is going to stay on hold much longer. you are seeing european numbers even worse. there is more currency. i would say equity will be driven by sentiment. >> we are going to talk about europe after the break. we are going to talk about european central bank policy as well. checkout mulberry, the british fashion retailer, getting crushed this morning, down over 20%. -17%.at there is a profit warning as well. since 2012 the company has lost

over half its value. plenty to talk about in the luxury goods section. we will break that down. stay with us. in the meantime, you want to talk markets. i am on twitter. stay with us.

>> welcome back. i am jonathan ferro, live in london. we stream on apple tv and amazon

five tv. many people know that he is the head of strategy. we are going to talk europe in the second. we are going to talk european finance ministers. the first thing i want to talk about is the beginning of a challenge to the bond buying program and the european court of justice. whatever it takes is hitting a bit of a roadblock. it is on trial. in your mind, with that on trial can we expect sovereign qe from the ecb? if an unlimited bond program, which is an emergency program, cannot get through the courts? >> it is a growth hearing. we are only going to get statements. i do not think we are going to get a judgment. my view is, what are the other options?

it is the game changer to make the balance sheets correct. you have to provide cheap money to the banks. then for them to the end. ittill see eventually if comes to europe as a problem you have a sovereign qe coming. what you say it is important for credit growth. it is important for credit growth. no use having credit growth without demand. >> it all comes down to sentiments. you have nothing but reform together with qe. nothing is going to happen without reform. you cannot have high tax rate. draghi has mentioned several in hishen he talks meeting. reform combined with qe is going to make the difference. >> we look at france. france breaking the rules.

they have a deficit. it is not expected to come down to 3% until 2017. are they going to get the accommodation they get elsewhere in europe? >> if you are trying to balance the budget in these circumstances you might run a surplus, but you don't get gdp growth. it defeats the purpose. eventually you would increase your liquidity. it is the same thing with italy. is have a surplus where gdp not growing. that is not the solution. is going tocouncil agree to some form of french demand, and they will be able to run the budget they want. it is not cutting the debt without gdp growth. >> there will people thinking, i have heard this conversation for five years. this has been going on, and nothing has changed. do you need a german recession for there to be this kind of

change in the euro zone? ask you are not off the mark for saying that. if the germans have the same will take it from the ecb. there is no point talking about balance and surpluses when you don't have gdp growth. there is an imf taper that talks about the purpose of balancing paper that talks about the purpose of balancing your debt. we have seen how the u.s. had a recovery because of qe. >> we're going to debate in just a second. i am going to luxembourg because france is under fire after the battle of the budget. european finance ministers talk about spending. hans nichols is in berlin, where officials have been firm about the need to abide by deficit rules. how strong is german resistance? >> german resistance appears to be holding.

appear ways it doesn't to be as insistent as pro-austerity measures a described -- prescribed for greece and portugal. there does seem to be a double standard. at the same time you look at what other finance ministers are saying, the austrian finance minister, the dutch finance minister -- they were firmer in their insistence france needs to bring the budget deficit closer to 3% of gdp. it is going to be 3.4 this year, four point three next year. the finance minister said france has got to get real, with all due respect. at the same time, the french france'sinister says national sovereignty has to do with france and is centered in france and not brussels. do thebig question -- germans or dutch have to give the french anything?

>> here is where they give is. spending too much according to regulation. you top up the european investment bank. here is what the luxembourg and finance ministers said last i think there was a large consensus we need more investment in the european union and those countries that have a good fiscal situation should do more in terms of public investment on top of private investment and that the new plan of the commission is expected to be hundredted. billion debt free hundred billion will be a good stimulus to growth. be a goodlion will stimulus to growth. >> those are long investment

projects. you don't necessarily have shovel-ready project. .his isn't immediate stimulus it's not going to do a whole lot. >> it never stops. the story continues. it's the same one every time. we have laid out fiscal problems in europe. we know the constraints to monetary policy. let's talk investing in europe. going tod the euro is weaken by the dax. euro-dollar has gone down. how is the dax? more thans fallen euro-dollar in the last few months. on?you, what is going the inverse relationship is not playing out. >> something happen. the reality germany is

suffering a lot because of sanctions. slowdown in the emerging markets as well. it is a combination of those. the points about investing in europe, there is an investment problem. if you look at italy, gdp is down almost 9%. youth unemployment is 40%. there is a website. they are not saying there is no demand. they are saying tax rate is high and consumption is low, but chinese are still willing to buy. they are getting by. the point is you have to reform. reform is very important. you cannot have a high tax credit. there is no jobs. that is important. the ecb should make reforms, which i think they are about to discuss. they have a spending program, and that is going to kickstart

the economy. >> the s&p 500 is down almost 5%. you start to worry? 10% lower? >> my view is the s&p is going to finish higher in december. i think you will have a big , maybe in december. >> they will be back in december. don't worry about that. a quick check as we head to the break. we open a touch lower. ftse 100 down to 16 points. lower as third of 1% well. next we are going to talk deals. 2014 saw a big jump in him and a with the value of acquisitions soaring to a seven-year high. what about the deals that didn't make it? they are soaring. we will tell you why iliad is getting a lift this morning.

the are back in two. stay with us.

>> let's bring you up to speed with companies that posted. rose 5% versus five and a half percent gains projected by analysts. heineken turned down an offer by sab. suppliesem -- gasprom

30% of eu gas and halted deliveries over a debt dispute in june. they estimate they are demanding 3 billion in payments by the end of the year. google's ceo eric schmidt says amazon is the company's biggest search competitor. schmidt argued google should not the regulated as if they are the of the internet. schmidt made those comments in berlin. iliad has abandoned plans to buy a majority stake in t-mobile after the american parent company rejected an improved offer. caroline joins us now. i am looking at the stock. investors liking this news.

but they are indeed. investors are reassured this deal did not go through. shares are 12%, the biggest gainer this morning. maybe investors thought t-mobile was too big for iliad. ownedall french company by the billionaire. they first made an offer in july. and $15ered $33 a share billion in cash. that offer surprised many. many said it was like the small guy trying to buy the big guy. one analyst even said the deal was kind of a joke. they decided to raise the offer to $36 a share. decided to not entertain this offer.

investors are reacting well, especially since the share lost 24% since july. >> that deal is at one billion euros. there is no getting away from it. this is a company with big ambitions. the question will be asked, what does it mean for iliad's future? >> exactly. the billionaire who owns the company is very ambitious. this t-mobile deal was to and sure he had a u.s. footprint. at the moment iliad remains the smallest layer in france. the earle -- they already failed to grow in france. they try to get their hands on telekom. that didn't go through. withtried to make a deal

orange. the shares this morning, they are also rising to 4%. ofo among the top gainers the stoxx 600, meaning there is speculation now that this deal is over iliad might come back and possibly get a new interest. >> great work. we will get updates through the day. i am sure the story does not stop for them. luxuryheck in on retailers. burberry numbers in line with estimates. they see a tougher environment weighing in on profitability. stocks getting crushed 25%. that is over 41% lower. sales were not good.

the outlook for profit, they revised that as well. to talk luxury goods, we will talk more about luxury goods makers after the break. ♪

>> welcome back. i am jonathan ferro. this is with the markets look like right now. the ketchup selloff. advance 100 leads the here. the dax is lower. the u.k. inflation is the data to watch here. we expect a little bit of a pullback. ew -- zew to watch. >> you do not see big moves like

this every day. we had is walking away from t-mobile. the parent company is doing to telecom. the new offer would value the stock at $36 a share, including cost savings. iliad shares are up. it was down 25%. it lost a quarter of the market value like this. it is second to the luxury handbag maker. they expect earnings to be below analyst estimates. value in thef the last two years and that tells you what is going on. burberry is not the only luxury retailers seeing shares decline. it is down by 5%. the biggest decline in a year. difficultt a more

luxury goods market off of rough it ability this year. sales met analyst estimates. fewer chinese are shopping in hong kong because of these protests and the fighting in the ukraine with the resulting sanctions of russian spending in europe. burberry is down by 5%. there you go. >> big moves. thank you very much. let's take you to the retail stocks. we are joined by the founding and managing director here. it is a tiny company now. it got crushed over the last few years. stopped asking for the handbags for christmas. what has gone wrong with the company? decided he was going to companyand this is a

class income.pper overnight, they decide to take the prices 30% or 40%. they shut the whole market out and stop seeing the value. internationally, the bread was not as well known. they have not really been able to find a new one. unfortunately, that has been going on and on. >> we may have seen some companies go down from before. is there any kind of example where companies managed to go upmarket, fail, and come back to development? what's it is harder to execute because it supposedly offers a higher pricing platform and you try to present yourself as a

strong luxury good player. it is hard. newre going to have to see product introductions at a lower price again. they are trying to do the same thing in america. coach is trying to set itself up as luxury. they are trying to curb this. is this going to get crushed? appreciation.and they should really be killing it. it is too expensive, relative to the consumer. >> there are tumultuous went --s will stop headwinds. when do they take advantage of the numbers? >> they are already. a second quarter

with a percent. there has been forms of slowing level.ercent is a good the difficult market tells you that the end market is slowing somewhat. it is having more of an impact. chinese consumers are hard to follow. we know what is happening in russia. generally, luxury and handbags is more competitive than it has been in a while. it used to be all about logos and people came in to buy them. producting to be more and you are seeing more new shapes having to work. that has made life harder for everybody. >> i was looking at an index that attracts luxury goods and the question i asked is whether the headwinds are so strong that

you have to throw in the threat of ebola to buy up the luxury goods. that is the question of whether we are heading for a bear market now. >> i have seen the stuff about is,al media and the fact the brands are aspirational. you have to live with the fact that burberry was at the top of the game over the past 1.5 years. i think you will seek more konges in october and hong is a big market for luxury. you are going to see really weak sales from there. the opposite is for many of these companies. let's not forget that they go to asia in dollars and there is a big tailwind coming.

luxury markets would offset some of the tailwind. it will start getting interesting. >> let's start talking about jimmy all stop the soft goods are coming under pressure. is this a time to be floating? >> luxury is getting harder. productmpeting more on and people are becoming more sophisticated in terms of how they buy luxury. the lifecycle of many luxury products is shorter than it used to be. it is challenging as a brand to navigate. are barely scratching the surface. we are going to be much bigger than we are. it is a plausible story. the only thing i would say is that it is a trickier time than

we have seen in the past. is aroundcing range 180. you have probably looked at the numbers and financials. you have heard about the investor conference, as well. is it expensive? >> it is cheaper than where we were. that is good, in terms of what is happening with luxury space. casean start to make the that there is valuation. i think the environment is tricky. >> $1 billion for issue company. thank you very much. these are the bloomberg top headlines. a brief rally after the police cleared barricades in the district. the last days have been the most

aggressive effort and demonstrators have occupied the city. >> mario pledges to do what ever it will take for the eurozone. weigh whetherl the ecb overstepped power making debt ofncement to buy distressed countries as needed. the program was never deployed and the court is unlikely to overturn it. the irish finance minister will .nveil a budget in dublin today there will not be an increase in taxes or spending. on a corporate tax regime that comes under scrutiny. that controversial tax deal has -- knowingu know it

it as the double irish. >> double irish has come to symbolize flaws in the international tax system. how does it work? licensepanies intellectual property through an irish company. these guys lessons the hat and rights to a second irish company that is based in ireland. they received income and pay next to no taxes because they are offset by royalties and fees which is tax adoptable. uncle sam pays no federal taxes and the earnings are not made in the u.s.. it all adds up. amassede multinationals trillions of dollars outside the u.s. last year. lost ofates to revenue

up to $90 billion. >> that is the double irish. let's head to the break and check in on european equities. we opened low and stay low. they are down by one third of 1%. a quarter of 1%. we are looking at the ruble. check out the record lows. the crisis in eastern ukraine intellectual.of we will talk about that next. in a couple of minutes.

>> welcome back. this is on the move. the u.s. and europe continue his sanctions over the ukraine. the chinese premier is in moscow to meet with the russian president and the nations have energy,n accord on banking, and technology. a little bit about russia. what are the big takeaways? >> they are sitting down with the chinese minister in the next couple of hours. the relationship with china is

becoming personal. he has met with the president of china nine times. the president of china only took office last year. and this in isolation is an easy target. a can expect them to discuss timetable for weapons sales. getchinese would love to their hands on it. in principle, they have agreed to sell it. it is critically important that they would then control the airspace above taiwan, creating problems for japan and india. some people say it would create an arms race. the chinese are buying from the russians. neither of those things you can expect. that is a protocol meeting. we will not get a readout of what they discussed.

yesterday, the chinese minister met with the russian minister and we got a substantive deal. what was more down to earth was the idea that the chinese would cooperate with the russians to build high-speed rail. they would be the companies you expect to do that. sanctions, maybe the chinese are moving in. nonetheless, the chinese provide the technology that the chinese really need. that is the big concern. the trade relationship continues to grow. the countries did $89 billion in trade. >> you did that in two minutes. i bet they cannot do that.

>> one of these things was a currency swap. it is a deal the nominated in dollars. not the first that the chinese have done. $60 did one that was worth billion. this is about building and breaking down barriers to trade, removing the risk of the dollar in the currency for the transactions between the countries and talks about raising the importance of the currency. you see it. it is a tougher sell for the chinese with the ruble down again today. russiaa central bank in was spending reserves defending the ruble. this is the direction that the russians and the chinese would

like to move. they put a little bit of a buffer between themselves and the united states. is -- west thank you very much gathering for the annual conference about the quest for content this year. francine is on the ground. what are they looking for? looking to make money, of course. this is content, media, and entertainment that is valued at $100 billion. that is what it will be valued at in 1-2 years. try and seee to what are the game shows and reality programs. what are the television series or future films that will bring money and. i spoke to the ceo.

this was one of the biggest production companies in the world and she told me that game shows are the way forward because everything is cyclical. there are too many people try to capture the teenage market and they do not want to lose the customers right now. >> we have to create something that works and is brought. there is a real danger of people chasing the young demographic. i think it is a huge mistake. >> this is going to be the second-biggest entertainment market by 2016. how do you want to capture china. do you want to capture china? but it is a big market and complicated. culturally, it is a different place. i think we need to be really mindful of, you know, western companies that are dealing in a

cultural -- culture we do not understand. they are not waiting for us to arrive. i do not subscribe to it. i think is interesting and we have a lot to learn from it. we are learning how to best embrace china and build a business in china. it is going to be something that we do over the course of the next 10 years. i am sure that we will make mistakes along the way. who knows if it will be successful. i think it is interesting and we are excited about the prospect. i think we have to be modest -- goingo it will stop into it. >> they have turnover and are .etting ready for big tv shows >> we have watched a lot.

let's get back to the chinese business. why are the chinese there? what do they want to buy? heardk, the chinese, you from them. i caught up with the coo. one of the biggest providers of content in china. >> i think we are buying everything. you name it. breaking bad and homeland. all of those recent ones. broken girls. modern family. very popular. the most popular recently. also, yeah, some others. >> you look at the western markets. after a couple of years, is that how you buy it?

and membersnowledge who live in the u.s. for quite some time and really understand it. it is very popular in the u.s. and is popular in china. >> just a little bit of size and scope. day in two views per years. crushing linear tv in china. >> thank you. great work. i am not jealous at all. i'm telling you who is jealous. guy johnson in the newsroom. the pulse is up in eight minutes. >> definitely. i think that is the game changer from the point of view. a little less so. anyways. the producer tells me i have little time here. a new finance minister in south africa is going to deliver his

budget and we are going to talk about the current account deficit in south africa and what is happening. and, the risk from ebola. thatere an economic effect is going to spread down to the south? we will talk about that a little later on. a big art fair is very exciting. a frenetic event. very words to the international auction calendar. stephen murphy will join us and we are looking forward to the conversation. he has great shows coming up and auctions coming up. he is really into technology surrounding us at the moment also we will talk about that, as well. >> the pulse is in seven minutes. on the move is back in two minutes.

>> welcome back. let's get a quick check of the equity markets. almost one hour into the session. a bit of a turnaround. they are down by .2%. two pieces of data to watch through the morning. investor confidence out of germany comes out and we are expecting a monthly drop. inflation is expected to fall from 1.5%4 percent previously. in the meantime, we are talking

markets. you know where i am. 20 to discuss. stocks are getting crushed. that is up for on the move. the pulse is next. ♪

>> tech giants, google and facebook, the tax loophole being closed in today's budget. the south african exclusive. we will speak to the countries finance minister. markets for masterpieces, christie's kicks off. we talked to stephen murphy in another exclusive interview. ."ght here on "the pulse