>> stocks fell off around the globe. asian equities at a six-month low. the stoxx 600 plunges the most in almost six years. $61 billion takeover. >> a busy day for results in europe. >> hello and welcome to "countdown."

the pharmaceutical giant roche has delivered sales of 34 $.8 billion swiss francs. the estimates were 35.5 billion swiss francs. that is a nine month number. we are also getting news coming , the american medical board approval, for one big drawing. this was the driver -- for one big drug. had approval at the fda, that's the block rest are drug in the making by 2019. let's give you some of the other numbers in terms of pharmaceuticals. me, theion -- it gives market was looking for 27.2

billion dollars. diagnostics, the other side of the forecast is confirmed for 2014. next, this is a company that's reduced its debt to equity. a swag bag, where will they go next potentially? discussionhave a ceo, joining us later in bloomberg programming to run through the numbers. >> on to one of our other big stories, stocks selling off across the globe. asian inequities have fallen to a six-month low following falls in europe and the united states. compellingas the statistics. -- let's see who has the compelling statistics over the

last few days. the busiest day for u.s. stock trading in three years, the footsie closed down in london by 2.8%, the biggest one-day fall in more than a year. one ray of light has to be the u.s. market, although they fell as low as 3%, the close down 0.8%. some are suggesting we might see a bit of a bounce for european equities today. that doesn't change the facts that the stoxx 600 indexes down the most in three years. it closed in 11% down from its june highs in correction territory. >> i will raise you, let's start with the bond markets. interesting divergence within europe yesterday. austria, theand, netherlands, all 10 year yields at record lows. the divergence happened in the paris free. are we witnessing what happened in 2012 or spain, italy, yields

were rising fall germany and italy were declining every italian and spanish yields up thomas greek bonds rising to 7.57% yesterday, the highest since march. the fear is about the bailout. will greece exit the bailout? does that make its debt levels unsustainable? you talk about the u.s. and big swings in the stock market. bondw a big swing in the market yesterday. the 10 year u.s. treasury fell the most since 2009. 33 basis point moves. a changed at the end of the day and finished down by six basis points. yields down eight consecutive days, the lowest level since may 2003. year dropping this month by more than half. that's why were seeing the movement in the u.s. bond

market. >> disinflation, deflation, lack of growth. at levels we haven't seen since 2009. the bloomberg commodity index dropped for a third day. copper dropped the most in seven months. let's hope the bottom doesn't fall out of china. brent of course at a four-year low. i think it's a combination between oversupply, opec, will they get their act together? wti andhave a look at brent later. is it 1986 again? a lot of lessons from history. they say get ready for print at $75. -- for brent at $75.

would continue to see low equilibrium. >> we will continue our markets coverage all day today here on bloomberg television. on the pulse after 10:00 u.k. time, do not miss that. >> we've also had some breaking news earlier this morning from , the boardugmaker has recommended shareholders vote against its $51 billion takeover because of concerns that tax rules have changed. that would undermine the rationale for the deal. they say the takeover not in the best interest of the company's stockholders. since september 22 when the treasury department

announced these tougher rules. two other u.s. companies have ship theirns to legal addresses to lower tax countries. but the news harley spell the end of the merger because five of the deals pending at the time remained on track. two new ones have since been announced. >> it depends on why you are doing the deal. , -- in this eight minute the statement, they recognize there was some strategic rationale. take everyecessarily in version deal and treat them as if they are all the same. perhaps in some cases the strategic rationale outweighs the tax situation. >> the other thing as far as the u.s. is concerned is the loss of tax revenue that would possibly see.

driver was sharp pharmaceuticals. there was quite an impact and european equity trading. had rebuffedy it has had its impact. be interesting is whether all of the move was priced in yesterday or today. let's return to that selloff story. digestrs will have to european inflation data later this morning. we have mark oswald, great to have you here.

try and make some sense of this. down at 1.89%, have the markets capitulated? is it an opportunity to get involved in equity markets? >> you've never seen bonds quite so expensive as they were yesterday. cheap.markets look it's time to do a bit of bargain hunting around. also in the bond space, higher risk credits, i'm thinking yesterday there was a very sharp african dollar debt. some of which was very wholesale. for those countries in front your africa which are oil produces, clearly this is a big problem. >> some of them which were sold

off in sympathy, like kenya, which is not a major oil producer, should not be down where they are. it's in a good position, economically it's definitely improving. of course there is the ebola consideration, but that's a consideration everywhere. one should not overplay that particular card. there are bargains to be had. what we've had is a fantastic display of how underlying liquidity in all markets is extraordinarily poor. what we had yesterday was a very ugly example of how a lot of low volatility structures were put in the eurodollar market. you could start getting an uptick in volatility, and people then have to rush to hedge their positions. you end up with finding there's no when they're actually two financially intermediate in these markets. that's the way

financial markets have always worked in a crisis situation. the market makers tend to stand away and tell you that price may have been there five minutes ago, but it's now two points lower, what do you want to do? it's time to reassess when the forecast the fed is going to raise rates, expectations are moving back by the day. to 2016me to push it rather than 2015? >> i don't think it is. i find it very amusing that that story of janet yellen talking to people came out literally within minutes of the fed's beige book yesterday. it was clearly a plot. there is no doubt about it. while they don't want to constrict themselves to a timeline, this was the whole point of explaining what considerable time means. sometrying to carve out

room for maneuver. what they will say they want to do is see financial markets pushing back too far. >> would you call it a real pushback? that is nothing. >> in euro dollars, if you look at december 2016, they have taken 75 aces points of rate hikes out of the eurodollar curve. >> you are going to stay with us and we will continue the conversation and have a little bit more from mark oswald later in the show. coming up, nestlé is set to report earnings any second now. we will bring you results as they break. do stay with us. ♪

>> welcome back. this is "countdown." just getting some breaking news from nestlé, the world's biggest food company. organic sales up by 4.5%. analysts were estimating 4.7%, just a slight mist there. it has kept its full-year outlook unchanged.

the forecast was for sales growth of roughly 5% on an organic aces. the average increase over the last decade has been 6.1%. the good thing is it has kept its full-year outlook unchanged. narrowlyales growth below expectations. nichols, what do we think is the early feeling about these numbers? the good news is it has kept its outlook unchanged. >> that is important because there were so much global risk out there. what's interesting here, we have sales,t miss on organic but what we're really looking for us with their pricing is doing. those will be crossing here just momentarily. they do have a lot of exposure with the for it -- with the swiss franc. exposure in africa in asia.

it's hard to remember that nestlé is the world's biggest food company. they are making a big lay in russia. they want to have some 200, potentially 250 nestlé stores where they start selling bottled water and other goods inside russia. we will look to see if they have any indication on what their russia plans are. overall, the numbers look like they are in line with expectations. a slight miss, as you say. when you look at nestlé as a company, look at it by the numbers, they have 2000 brands, it's a massive company. of $30 billion. around $997enue billion. this will give us a good overview of what's happening in the food industry globally and what's happening to swiss companies that have that strong frank.

we will do a deeper dive but i think it's safe to say everyone can enjoy a cup of hot cocoa and maybe even a gilbert. >> we talk about deflationary pressures -- in markets such as france. important rawy material for nestlé, isn't it? >> will take a very close look in terms of what they're doing with cocoa coming in. up,had six months going that's largely because of ebola. ebola has not really taken hold in ivory coast. ofyou start seeing reports ivory coast having some sort of ebola outbreak, it's going to ivory companies like coast. there is a graph showing it's

really gone up quite a bit in the last six months. >> we will see you later. the chief executive of nestlé joins us in the polls with his first interview of the day to talk about those results. >> after the break, the second part of our conversation with mark oswald. how much does the deflation debate in the euro zone matter? are iny a lot if you that debate. ♪

>> welcome back. oswald is back with us. we were having a discussion in the break. hopefully the cost of living is going to drop, but it's potentially a big issue for sovereigns. why? you have a great example you are chatting about. >> the greatest example comes from a 19th-century britain. at that time the economy was at the height of the industrial revolution, the economy was expanding strongly and we had deflation here in the u k the difference between now and then is that written didn't have a huge amount of debt.

it did start to accumulate along -- a lot of war related debt thereafter. you don't want the debt to become larger as a result of ablation. >> what can we say about how good or bad lower oil prices are for the global economy? >> traditionally it has always been viewed that lower oil prices are effectively like a tax cut. unfortunately if you have a lot of debt, it doesn't actually becauseot of difference you're disposable income is still being impinged by the fact that you've got a lot of debt. is priceseally want to rise so that my wages can rise so i can pay off my debt more easily. that's essentially the problem that most sovereigns find themselves, it's not just eurozone problem. of u.k. has totaled that 500%, something that is often

overlooked because we have our own currency and the eu is currency.o its own it's not actually some form of hannah cia, it just makes life a little bit easier. >> on the subject of the ui a, -- what about u.k. rate expectations? first this week's insulation figure, and the unemployment .eport the numbers were not as rosy as the headline unemployment rate suggested. >> we focused on the states a lot on the participation rate. participation rates have been falling. the key with the employment data , q1 we wererday a 2.10% employment

growth average. we still have very high levels of agencies in this post crisis time. so it's very disappointing that were not creating more jobs here in the u.k. as for the inflation story, by nextstandards the riskiest month because we have -- we will go down below 1%. by u.k. standards, that is deflation. we've always had about 1% more than the rest of the eurozone. so we are pushing very heavily out on the u.k. timeline for rate hikes. is stillhe market pricing in the idea of september . the problem here in the u.k. is the problem seems to be slowing at exactly the wrong time as we head into an election which one

would hope after it, there will be a lot done to address some of the issues. there are problems with the u.k. economy, but it looks like we will have a hung parliament. we may have to go to another election we might also go to an eu referendum which will deter both the mystic and international investors from investing in the u.k. economy just when we need that to kick in. >> thank you very much indeed. >> great to get your thoughts, mark. up what's been happening over the last few days, you can join in our conversations on twitter. of us know what you think the latest market moves and anything else were talking about here on "countdown." coming up, the b-sky-b final earnings report, how important

are today's results? we will find out, next.

>> 6:30 in london. time for foreign exchange check. the bloomberg dollar index, the --kets have moved possibly they have moved their probability to december 20 15, 35 percent possibility. the start of this month they were looking more like july. janet yellen came out to try to support the view that the u.s. -- the base but did it

for her. it does nothing for the dollar. lockhart speaks today, atlanta fed. moving on, the aussie dollar. there you go, trading at 87.86. we've come back through that 88 level, surging as some people say you had a dollar capitulation. will it last? >> these are the bloomberg headlines. concerned about ebola growing after a second health care worker in texas tested positive. u.s. officials are contacting at least 132 people were on this woman's flight just a few days before she was diagnosed. the infected worker did alert

u.s. health officials to her elevated temperature prior to flying, but it was below the fever threshold. the market selloff threatens to derail the country's exit plan. deals on the greek tenure bond reached 8.01% yesterday. the highest since february. docs have fallen more than 23% and the last month. italy's cabinet has approved its budget for next year. the prime minister's plan includes 18 billion euros in tax cuts. the budget must still be approved by the european commission which wants italy to reduce its deficit by 2 trillion euros. >> the french spirits producer remy reporting results this morning. broadlyng looks to be in line with expectations.

concerning the 2014-2015 targets, organic sales down 11.8%. the estimate was down 10%. 5.5%.anic sales down that is exactly in line with where analysts were expecting it to be and the q2 sales number, 257 million euros. analysts expected 259, so slightly low but still in line with estimates. >> let's turn our attention to hong kong, the democracy demonstrations have grown again. pictures of police beating protesters, authorities claim that have been in contact with the student leaders. fromn chen joins us live

hong kong. any sign that we are anywhere near an end of this? like weeks, it looks nerves are beginning to fray on all sides. >> within the last half-hour or so we actually have heard that the government is going to hold a press conference. attending will be the chief theutive of hong kong and secretary for constitutional and mainland affairs. they have not said what the press conference will be about. it's going to be at about 45 minutes from now. they werethey said using intermediaries to try to see if they can at least take steps toward opening up a dialogue of some kind. at that time the secretary-general of the student federation said he had not heard yet from the intermediaries but he also said they would welcome the talks if that were the case.

are waiting to find out what might come from that press conference in about 45 minutes and if it's going to be related to that. >> roslyn, thank you very much. >> normally an apple product release is shrouded in secrecy with only tantalizing teasing about what is going to be released. details and pictures of the latest tablet appeared briefly on its website. how rare is it for apple to give us a glimpse of a product before it is revealed? sometimes we get leaks, but not usually from the company itself every >> very unusual him and these folks are the masters of suspense. to have something like this happen is very unusual and not totally unheard of. of and, an engineer early generation source iphone 4, prototype in development left

it in a bar. that got out on the internet and apple was very embarrassed and unhappy about that. so it's very rare, but not unheard of. >> what is the importance of the event were saying -- seeing take place today? sales have declined for two quarters. about 12 hours, the company is expected to show the new version of the ipad, the 9.7 inch ipad and smaller version. sources have told us they expect it will be in available in colors like gold and it will be thinner and faster, kind of the typical rollout. it's important because it is the second biggest revenue generator for the company. the market for tablet has become more competitive. it's a market they really created. the companies making a push to sell more to businesses and companies and schools and

government as it looks for new customers out there. >> thank you very much for joining us, tim higgins in san francisco. >> b-sky-b reports in roughly 25 minutes. company recently acquired skied deutsche land. here is paul sweeney from bloomberg television. with this consolidation of the german and italian franchises, is it well-positioned in this rapidly consolidating european paid television space? is. think it they sensed the u.k. market is competitive in terms of pricing. there is lots of competition in the u.k. they look at where they can get growth over the next five-10 years. consolidating their italian and german businesses was

recognition on their part that there is more upside from a pay-tv penetration rate story longer term, so that's where they're putting their capital going forward. >> those are the challenges why they are looking out the u.k.. what is driving the consolidation across europe? of programming is going up dramatically, particularly sports programming. at the global phenomenon. rights seem to grow by up to 100% every time. that's something that has to be borne by the pay-tv providers. they try to pass it on to consumers but at the end of the day, the cost of programming is going up. they need to allocate that over more subscribers. >> we were just told in the break, what is content? will make you own the space. content is a capital expenditure. who has the deepest pockets and

who's making the best decisions there? viacomally they look at or disney or time warner, and a lot of investors say there are so many new places where consumers can get their content. it's not just on their cable or satellite system. we now have opportunities such as netflix. there is ever-increasing demand for content and if you're in hollywood making it, you're in good shape. to pushix has tried through a price increase. there is a big elephant in the room called hbo. >> that is exactly right. of subscriberhort growth estimates. it's very much a momentum stock driven by subscriber growth. that was point number one. point number two, hbo and new

york said for the first time they are going to let consumers get hbo outside of a pay-tv tactics, get it over the internet much like they get netflix. they have the content, the brand name, and the marketplace. here is a big competitor coming into the market against netflix. we see consumers altering their behavior. they are consuming more content when and where they want it on whatever device they want, and that means over the internet. >> great to have you with us. we will have you back later in the show. .oming up, oil plunges what is behind the weekly demand? find out next. ♪

>> oil prices have been falling for nearly four months, weighing heavily on stocks and currencies. plunge, weing the welcome our guest. give us a history lesson. lesson on thetory

oil price shock and how it compares to the 70's and 80's. >> in 1986 i was working for petroleum venezuela, and oil prices at the end of 1985 for about $30 a barrel. they fell sharply down to $10 a barrel at the beginning of 1986. quick history lesson on why we have parallels for today. they fell in 86 because demand growth was tepid and very weak. fell yearyears they on year. meanwhile, the north sea hadn't been invented in the mid-1970's. its target from zero and by the mid-80's it had gone for two 6 million barrels a day. in 1986 in ather succession of meetings and cut production. fast forward to 2014. where are we now? --have very weak loadable

global demand. side, theduction united states is the new north sea. in two thousand eight it was producing 5 million barrels a day. and 2014 it's producing 9 million barrels a day. it will go to 10, possibly 11. is lotslly what we have of supply coming into the market from the u.s. and others because iraq, for example, has not collapsed, which people thought it would in the middle of the year. plenty of supply from elsewhere. so the supply-demand balance is starting to topple over. in 1986, there was a huge debate at opec about whether to go to market share or focus on price. did we learn anything from that? they focused on

price. they wanted to prop up the price. they paid a big penalty for that because they ceded market share. meanwhile the non-opec producers carried on regardless. this is the other lesson from the mid-1980's which we need to apply to today. i can vividly remember 1980 as a gun analyst looking at these numbers, these low oil price list are going to kill the north sea -- as a young analyst. had taken place over many years, so all the exploration and development, as long as the north sea was covering its operating costs, which even at the lower pricing we got in 1986, it was reduction continued and actually went up. 2014, you see these numbers, $90 a barrel, that's just not true. the operating cost for the older

new fields if you like in the united states are much lower than $19 a barrel. figures,ifferent 35-75, something like that. the point is were not going to see a huge shuffling of u.s. shale production. >> what is your near-term range for brent? you said it is a little lower than we are now. >> it's a moving target to some extent. we are playing educated guesswork here. when i was thinking about it a week ago, i must say i had not anticipated we would be looking at $83 today. , andrt of the debate that's lower than some of the they would seen, need to cut as much as the u.s. is producing. this wonderful conspiracy theory

, they're talked about going to absolutely keep these effecton the floor to much more political change around the world in terms of russia and the middle east. >> i think that's complete baloney. as if the u.s. and the saudi's stroking a. evil white cat, how can we destroy destroysarket so it our evil russian and iranian friends, it just isn't like that. think of it from this point of view. the u.s. oil industry is very powerful politically. the idea that they are delighted to sit there and look at its government conspiring to destroy its income essentially i think is absolutely fanciful. were getting a situation where the fundamentals of supply and demand have decayed in the direction of price.

the fallout from the falling price, yes it does mess up the iranians because they are under sanction, they need every dollar they can get. of course it's messing up the russians in the short term, which before the price fall started wasn't happening because the sanctions against russia are more applicable to the long-term. the russians are coming under a lot of pressure in the short term as well. that's the fallout from the underlying direction of oil, which is down. iran comespens if back into the market following sanctions, libya sustains and approves its recovery, your lower base with 75-90, can that be even lower? >> absolutely so. libya has been exporting more oil recently than earlier in the year. the living situation is very fragile and no one can be sure if they can sustain that level. ship twoey continue to

point 5 million barrels a day from the southern export terminals and let's assume that iran does come back into the market in 2015, although in practice it won't be in the early part. unless something changes somewhere on either side of the sublime -- i don't see how prices can do anything other than continue to fall. we may be in a situation where in the new era for prices, having got used to the $100 plus, renowned a situation where we might be looking at $60, $70. >> another new normal. what about opec and their response? >> there not going to convene before that.

one of the points i've been making recently is that in 1986g 2014 to 1986, the price collapsed essentially. we're not in a price collapse situation quite yet. remember that on october 16 the average price for brent so far this year is still about $105 a barrel. it's not yet a crisis. we will not have an emergency opec meeting. in 1986, i call it statesmanship. think it's very important because there were a lot of ministers who had been around for a long time and have a common aim, to bring stability to the market. the saudi minister barely hide his contempt for opec meanings. -- opec meetings. there are a lot of ministers who have been in the job for about

10 minutes. there's not the same cohesion of unity. falling to pieces as an economy. there is in that same sense of unity. >> great conversation. thank you so much to the head of analysis, neil atkinson. stay tuned to bloomberg this morning. nestlé has reported sales that missed analyst estimates. the chief executive will be joining the polls. make sure you stay tuned for that. >> coming up, brad pitt's new released this" is week. it's described as an ultraviolent odyssey. ♪

>> welcome back. let's get out to our man in berlin. hans nichols, good morning. >> good morning, mark. disturbed connection, massive it covers somey, congestion going to and from work yesterday. i know it doesn't affect you guys big as you take private cars. i got a great e-mail solicitation from a private jet company. strike, you can

now fly private. i want to know what the overlap is between german wings and flying private. maybe i will make the jump and join you guys in your 1% existence. >> what have you been eating this morning, hans? >> brad pitt's new film is called "fury.' , is a world war ii gorefest what they're calling it. there's a lovely description of this film here. heads explode, limbs are blasted apart, faces shot to bits, and in a telling move during the daddyg frame, war repeatedly stabs a former not zi through thena eye socket. >> it's never too early for your midlife crisis.

lots of people are having a crisis in their 20's instead. stay with us. ♪

>> stocks fell off around the globe. the stoxx 600 plunges the most in almost six years -- three years. >> the board recommends shareholders vote against a $51 billion takeover. >> a setback for nestlé. the world's biggest food company has reported sales that missed analyst estimates as it struggles to lift prices in europe. breaking now. is ♪

>> welcome to "countdown." from are getting numbers the spirits, wine and beer giant . reporting their numbers this morning. -- the estimate was supposed to be done by 1%. a bit weaker than the markets had been looking for. we are getting a breakdown of things regionally from the company. i 0.1%.les are up the estimate was for an increase of .5 of 1%. on organicor europe net sales down 1.4%. the estimate was for up half a percent. in those developed markets not living up to

expectations. we have seen africa unchanged compared to the previous period. latin american net sales down and the estimate was down for something weaker. the developing markets are showing a bit more strength in some cases. certainly in latin america than had been expected. that is a big focus in markets. the exposure to china that many of these businesses have, the exposure comes in the shape of [inaudible] america ism latin against estimates. perhaps not a pretty picture together.ut all that a little bit of a steeper fall than had been estimated. the ceo is -- has not been in

the job all that long. this is the business that makes johnny walker and others. a 6% increase in revenue for the first quarter. estimates i anticipated 3%. it has had a strong demand from customers. 760,000 new paid subscription products. more than 6 million tb customers are connected. it has made excellent progress on new revenues. its sky store revenue doubled year on year. and revenues up by 40% on the

quarter as well. what it is doing is it is creating a world-class lt national pay television business. it is on track to complete the acquisition of 100 for present 100%.rcen into an 11%tes increase. well positioned is it, it seems to be pretty well-positioned. a pretty solid quarter for them. u.k.ast quarter, it is a only business so they can venture forth into italy and consolidate and then into germany which is a very strong market. they have a lot of confidence

coming out of this quarter going in and trying to consolidate these larger markets. >> what is the rationale behind the consolidation? >> there's a lot of growth in pay tv penetrations in europe generally speaking but certainly in italy and germany. they see upside for pay tv penetration. they need to get some leverage over their programming costs which for all pay-tv providers are going up exponentially so they need greater scale. >> the content is the key game here. they have made some purchases, the itv debate. what is going on with the content debate? >> the content debate is content is king. they have been saying that for a few years. becauseis king simply pay-tv penetrations are increasing globally. increasing demand for more content. people are spending more time

consuming video content today than they have in the past. if you own content, if you can create content that has global demand, you're going to be in a very good position. >> a good illustration yesterday when we got those numbers from netflix and people starting to wonder what difference it makes top hbo offers and over the service that rivals netflix and they start to weigh up content. >> a difficult day for netflix. they missed their subscriber targets and it is a subscriber driven stock so that was a setback for the stock and at the same time, hbo makes a very big announcement that for the first time, hbo will go direct the two consumers over the internet into north america which is a direct competitive threat to next clicks -- netflix. , people areavior consuming media in different ways. they do not need to have their pay-tv package. they can get it over the internet and that is where content providers are going.

>> our top story. you will kick it off. you have bonds and you have stocks. >> martin might have some of the best stats. because of the good -- it moves we saw. market, of the stock the index down the most in three 11th -- 11%g down from its june highs. so now in correction territory in europe and japan. closed down. they might be interested in the fact that we might see a bounce at the start of european equity trade because the s&p 500 was as 3% butch recovered. it was down by 0.8 percent at the close of trade. many people asking what is the

driver here? october 7 is a date that stands up. -- they will increase the balance sheet and we saw some fixed income. >> that is a divergence and that brings you to 2012 for you saw falling to yields record lows where's the periphery -- whereas the periphery rose. spain and italy is higher. greek yields up to 7%. greece won't be able to finance itself if it leaves the bailout program. in the u.s., a fascinating day. you talk about the swings in the

u.s. stock market. day. was the busiest >> at one point yesterday 10 year treasury yields were down by 33 basis points. the most since 2000. janet yellen spoke up about the u.s. economy saying the future is not as bad as many have been suggesting in the market. the yield finished down by six aces points. the yields have fallen for eight days. the lowest oval for year. >> can you imagine if you were on the wrong side of that bond market? index dovety touching levels you have not seen since 2009. the lowest since may 2013. what you're seeing is a big change.

the strong dollar story does not cover it. how about the oil markets? -- i do not opec remember much about 1986. but if it is going to be a rerun where you see a collapse in prices, lloyd's register told us get used to $60 because everybody is producing and the asian market can choose where they want to go for their oil. there was a fascinating comparison. >> we will continue our coverage. interview with eight -- our guest from the inf. >> and recommending to

shareholders vote against the $61 billion takeover of shire. good morning to you again. i guess up to speed. >> the price move we saw in shire, it seemed like the market decided this has a low chance of happening. a lot of analysts were saying this did not make sense and you have to keep knowing for it but obviously, shire decided to say do not wait three days, come back to ss in his weekend can, we cannot wait that long. the board says we are recommending that shareholders do not do anything. this is not the end of the deal but it is the comatose range. they said we are recommending no action, they did not approve.

what is interesting is that during these conversations and the presentations they were making come a they were saying that this is more than just about taxes. tax was the last thing. there is -- the reason the deal is breaking down is because of the changes in the u.s. law. that might make it more difficult for them to have the benefits without the would have. if that model, if that analysis does not work then this is what the border telling shareholders. it would be interesting to see. shire said they will carry on. they still have to vote and this is -- >> nearly 7 billion pounds was marked off. that is a mountain of market cap to get shut back for shareholders. how can they do that, can he do

it that emma can shire survive on its own? >> yes. this company has been doing pretty well as it was before anybody came for it. the interesting question here is more for abvie. you already showed your hand. >> they do not want to come after a texan version. >> i get that but that will be $15 billion. ofo not know what percentage the total revenue that is but that is a big number. you still have to do with that coming up. whatever strategies you put in place. for shire, i am sure that all the speculation will resurface. if remember -- you remember before abbvie came along, astrazeneca was mentioned. pfizer was mentioned before. what would be interesting is if pfizer comes back and said -- abbvie is chicken.

we will do this deal. >> we will see. thank you very much. >> coming back -- coming up. we will break down the earnings outlooknd the investors with our guests. stay with us.

>> welcome back. a major morning for earnings. we heard from b-sky-b and nestée and roche. thank you for coming in. let's start with the u.k. businesses. that is where they are listed. you did not like all that much this quarter. organic net sales number coming in weaker than many have been looking for. >> with businesses -- that would drive the prices up. it is struggling to get growth coming through. the earnings are not coming through. it has made some moves and the gifting business is not as strong as it was. the emerging markets are a bit

weaker. it is struggling. >> is not just the weakness in the emerging markets. the north american business and coming inusiness, weaker than analysts had expected. >> that is right. they have fantastic brands. they do charge a lot for these rants and people are getting more price sensitive. they are not quite so happy to fill -- pay the full cost. s> what about b-sky-b' first-quarter revenue. it is stepping up a petition with bt. well placed ahead of consolidating its italian and german divisions? >> it has more ability to buy content. it can deliver more content to their customers.

outflanking bt and that leading to growth. >> is income the most important thing for you? >> it is a big factor. we have seen companies growing their dividend. that is a big headwind for market growth going forward. >> on that whole point about cash and dividends. the mining industry has been promising fantastic. cash machines was the phrase. attempting us in the wrong way? >> i think they are in a way. they are commodities. commodities are named to monitor these because they have spikes.

they spike up and down. they have things they cannot control so they would generate huge amounts of cash but that is not the real world. commodities are not level. they're always moving. >> what do you make of what we have seen for the last few days, certainly for the start of october. are you viewing about -- the amount of money [indiscernible] equities, is this a fine opportunity or time to thingsk and watch how shake out? >> there is room for the markets to go down. you can see them coming down. it will be difficult for people to make money. anything where a transactional strategy will struggle. i think he we has ramped up prices already and the world is notf the economy

coming through. >> we will come back in a second. our guest will tell us about his new book. stay with us. ♪

>> welcome back. our guest.ve

before we left for the break mark said your book is coming out. their future is -- the future is small. said [indiscernible] institutional investors spent the last 25 years getting out and it will be inconvenient if we find this is the area that delivers growth when the rest of the world is not in growth. we -- we could get a couple of decades of performance which will take five or 10 years, maybe 20 years when institutions it back in to participate. give them an idea. >> small companies which are growing their businesses, they

and asling out networks they do so they are growing sales and they will be able to generate cash. dividend growth that is so exciting. we have eight or 10% dividend theth coming in through bottom of the market. they have better balance sheets and some of them are growing in spite of the world economy. >> let's talk about roche. you own roche and you own a number of drugs is this is. m&a is the big theme. >> sales are good and that is fine. what you're looking for in lowe's companies to bring in new innovation. gross and they have a strong pipeline of developments coming through.

we will hear about in the next six months will -- which will give them more opportunity to grow. >> nestlé is one part of the food debate. they missed on their organic growth. about nestlé. what do you hold in the food space? termsere is thinking in of grocers? >> the area where we do have in small companies. small suppliers to the food industry. sufferingothers are that they need animation. you see the people bringing innovation and bringing real sales growth. they're able to innovate. they are growing the category. is a nice company. it is not growing fast enough,

therefore no dividend growth. >> thank you for joining us. japanese on yields ball to record lows. ♪

>> welcome back. time to see how foreign exchange traders are looking at risk. this is the bloomberg dollar index. we are down again. a significant shift in the perception of when the federal reserve could, would, or should higher on interest rates. that has a 35% probability. retail sales underwhelm.

the empire state disappointed. it had the steepest drop in the dollar since october 6. what will they say because madam ellen said fear not, the u.s. is going to grow. that was nicely timed with the beige book. higher on interest rates. speed to our guest room hsbc. the aussie dollar is down. to 8800. the aussie dollar is getting a bit stronger. >> these are the bloomberg top headlines. goingn about ebola is after a second health-care worker tested positive. u.s. officials are contacting 132 people who were on the woman's flight a few days before

she was diagnosed. it elevated temperature but it was below the fever threshold. and approving the budget for next year. the plan includes 18 billion euros in tax cuts. the largest reduction ever for the country. the budget must be approved by the european commission which wants it to reduce the deficit. a month-long market selloff threatens to derail the country's exit plan. bonds reached zero point 1% yesterday. the highest since february. the stock market fell and has fallen more than 22% in the last month. talk about fixed income

markets. yesterday we saw some swings in markets. let's talk to its us bc's head of fixed income research. you in. have would you like to make sense of the last month? -- we are reaching for superlatives to describe what happened. thes a wake-up and smell coffee moment. people have been in denial for a long time. why is it that the crowd has been looking for -- the consensus are looking for higher and higher yields. the feds told us they will lift off the fed funds him a that they will rise. the fed does not know how to do it. they have not forgotten. they do not know how to get rates up in the current environment.

that has been created to buy the bonds they are holding in their balance sheet. happened during tapering. the bond market has this habit of influencing the policy decision. it -- they cut rates. the forecast has been gravitating toward the middle of next year. that has to be pushed backwards. you have to look at the dots to see that no one can agree on the size and timing. 4% guy and the others or 0.5. you have the range and the timing issue. the market is unsure about what to do. i would say later rather than sooner. pushing back, pushing out the first rate hike -- rate hike.

>> with a broad range of ideas and where rates might go, what does that do for your view when you sat down earlier and said the market is looking for around 3 or 4%. >> we have been 2.1 for this year and 2.5 for next year. we are below the consensus. they want to believe that things are getting better but the is a cyclicals indicator. it may give you some positive reasonable andis the same kind of methods. there are some good signs with the secular and structural factors are overwhelmingly negative. and so the models are predicting these recoveries. they continually fall short of where the normally are. we are starting to get around to

understand it is difficult for a cyclical recovery to come through. the idea that bond yields will stay low for longer is becoming more sensible. if that is the case you have to recalibrate your equity expectations. what happens when you put a lower bond yield in. on the one hand it is good because the yield is lower but that depends on what circumstances. growth is down so you have to adjust your forecast. if risk assets keep falling, qe has facilitated the mother of all carry trades and a big supporting factor for risk assets. if we are seeing the end of qe and at some stage a liftoff may be later rather than sooner, if bonds are supported. >> what is the heart of all of this, that we are having these

wake up and smell the coffee moments. is it the fact that mario draghi is proving more hesitant than some people assumed? >> think we will pick the bones of this one for a while. the triggers were eurozone data. what is happening in greece, u.s. retail sales, a collection of factors. you could talk about ebola and jubal -- geopolitical risk. somehow the market has been in denial and that trigger point may well have been a level of yield but we will not sit there and rationalize. >> is this fear that it will exit the bailout, this is really quite some worry. the ecb's liquidity has enabled all the scripts to be tight.

on the surface with type yield spreads and low cds levels it looks like there is no problem. everything is fine. the credit fundamentals have not been getting better in a number of countries. they may have been getting worse. in greece we know how factual things are and the triggers for previous problems were no elections,votes, referenda. anything like this that challenges the next troika meeting and potential exit is not good news. people will associate that with concerns about other sovereigns in the eurozone. >> is the bond market, you have touched on, i am thinking about other asset classes. we have had warnings from other people who say this is an opportunity. controlks cannot volatility. looking at the asset classes,

where do you think the most impact would be from this -- from what we are saying? >> what we're seeing now is a bit more volatility. that has been very low for a long time. it says it could affect all the -- effect in different ways. per equity we will have a big re-think because the assumption of low yields is being questioned. bond yields can be lower is also because of the term premium factor and it is linked to volatility and equities. why yieldsm explains are beyond nominal. it is driven by things like volatility and all that kind of stuff. >> the time in london is 7:39

a.m. and you can see life xers from nestlé in geneva. the ceo and cfo are speaking on a webcast at the moment. they missed analyst estimates he will be joining "the pulse." >> 7:40 a.m. london. stocks will rise but the stoxx 600 in europe has fallen into a correction. what does it mean, what is going on? stay with us. ♪

>> welcome back. time for today's company news. apple released a snake review of its new ipad. if it -- ahead of the official launch in california today. it has been a year since the ipad had enough date. apple closed door in new york. ebay is down in after-hours trade after reporting that revenue for the fourth quarter would be lower than estimates. ebay is expecting revenue this

quarter. it is still feeling the impact of a security breach in may when hackers obtained login information. tesla could face a ban on selling its electric cars in michigan. the state's governor is studying a bill which would ban the sale of new cars wrecked to customers rather than through franchised dealers. >> time for today's bar chart. mario draghi's beach sands stocks down. european stocks were trading near their highest levels in almost six years. the talking about here, beginning of september. a lot has changed since then. the stocks 600 has fallen 11%.

it is an correction territory. 3% yesterday. figures fall in three years. greece was down by more than 10%. it is in a bear market. it has fallen by more than 20% has -- as has portugal. that is the red circle. when mario draghi, the ecb resident stopped short of spelling out how many assets the ecb might buy to head off deflation. that day, european stocks plunged the most in 15 months. the stoxx 600 has fallen by 6%. the fear is there is a limit. whatever it takes thomas happened in july 2012. the stoxx 600 is up by 40% since then. the fear is maybe he will not do

whatever it takes. maybe he will not allowed the big bazooka and by sovereign debt. volatility is rising as well since those june highs, since when the stoxx 600 was at its highest level in six years. those were the call must days for volatility in seven years. volatility was at a seven-year low. index, then fear volatility index has more than doubled. it closed at a two-year high. the stoxx 600 is in a correction mode. the big question i am asking, is it down to mario draghi? x he -- heathrow and other airports have started screening passengers arriving from countries affected i ebola. how effective is this kind of screening?

>> when those passengers are ,rought to the public health staff will be at the airport. asked a series of questions through questionnaire and have their temperature taken. if there is anybody we have concerns about that may be a risk to the public health then there are powers that can be put in place to ensure that they are taken to a hospital to be further assessed and treated as necessary.

the most important thing for us to do to help resolve this problem is to work with the country's concerns. -- countries concerned. there is screening as people leave those countries. >> you're looking at a live shot of the city of london. can you name all the buildings that you say? andhave the cheese grater the walkie-talkie. >> after the break. it is a beautiful day and

london. how are the markets going to react to the biggest losing streak since 2011? james hughes joins us for that discussion after the break. ♪ >> welcome back.

european equity futures are about to start trading. we will see a bounce after seven

days in a row create we have had losses on the equity markets here, the longest losing streak since 2011. , what are youpect feeling? >> the last few days have been waiting for small bounce. losses have to be followed by a small bounce. even though some of the futures have told us we will see a nice start. today is a lot coming out. we have the euro zone cpi first thing and that is going to be an interesting one. it may not even move that much but the fact they were made -- remain so low is going to be the issue. this is the big question. what does mario draghi do, does he throw the big qe at it or does he leave it alone and that is the big question we are asking. i can clutch at straws all the time. it was something to do with

grace -- greece or this or that. the markets are falling because they were rallying for so long with no foundations. there was hardly any ball attila the. the volume was not necessarily there. when it turns around there is nothing underneath to hold it up necessarily so it falls very quickly. it has to be one of the catalysts. >> the realization that the u.s. is passed the global economy. that is something that the fed was talking about over the weekend. all those things being talked a lot about -- talked about a lot this week. >> there is an obsession of trying to move interest rates higher. whether they need to be moved how are -- higher or not, we have to get that to what feels like a sense of normality. you're almost going back to pre-2008 sorts of levels which cannot be normality anymore. there is this question as to

whether we need rate hikes. within all that euphoria everyone has decided that the stories that were not stories three weeks ago are now the biggest stories and that is why the market is falling so aggressively. lockhart speaking this afternoon. it will not take much from him in terms of the snippet of this or that that could spark these markets into freefalling again. it is those tiny things that is causing that panic situation. >> what is sentiment like among your clients? are they saying to you? >> there is this feeling that this is still outside. this is a little pullback and a lot of clients want to be long in these markets. the dow fell and we were over 400 points lower. termopped bang on a long trend line.

it stopped bang on it and went straight back up. those little signs that this is not a full bear market total reversal. there is a situation -- >> is that because you have those who lived in able run? they did not experience volatility. central banks have tried to quell volatility but it is back with a vengeance. with these clients do not want to do, do i, and of the market and that is the thing because they are holding these long-term lawns and hoping for a bit of a turnaround. >> thank you for joining us. >> "on the move" is next.

stay tuned. indicating stocks will open higher. will it last? see you tomorrow. ♪

>> welcome to "on the move," minutes away from the start of european trading. what a week we have had so far. global stocks get crushed. the worst day of losses and years. investors looking for a little bit of a rebound. greece firmly back on the radar. bond yields have moved aggressively higher. is the market questioning their ability to fund themselves?

we were told back in july that was not the rationale for the deal. futures are higher. ftse futures are up 36 points. --eceased >> what you do have to do is -- where you are with bond yields has a tacit implication of how you look at all the other asset classes. just look at that u.s. bond market from yesterday. that was just the stuff of real moments of capitulation, an