learn which of the eurozone's short inst banks fell the year-long examination. we have done this twice before. showtests failed to problems. credibilitye ecb's is on the line. what does it mean for the open this friday morning? the dax down by 40 points. 0.44%. big week. big, big week. >> it is. you will see equity markets pare back the best week. issues in new york is something that will unsettle not just markets but also the general news bells in the united states of america. when that takes hold, we'll see how it transpires. eu leaders are meeting in brussels. david cameron has been handed a

euro billbillion because the economy is doing so well in the united kingdom. mark -- is perhaps think about challenging the requirement from brussels to pay more money because of his success. a lot of it has to do with accounting. illegal activities taken into consideration. drugs, prosecutions that would boost the gdp. the oldest professions in the world. let's have a look at the united kingdom's. more sense up 1/3 of 1%. intercontinental, if you're thinking ebola and escalation -- this personifies very clearly the concern. group.rnational hotel iag is the former british airways. immediately, you can see ane ebol impact.

let's see whether air france/klm is turning up in the left-hand side. the dax. a little bit of buffering going on there. i will take you into this zone here. basf. i interviewed the ceo. he said he had never seen such a drop in gas demand in his numbers. chemicals business. they are cutting their 2015 targets, their profit targets. 12 billion euros. originally they said it would be 14. net income, tha tmissed. they are cutting the price of oil to $105. he would not speculate on where the price of oil was. when it comes to luxury goods, puma is helping the number. thanks to bloomberg intelligence, i can tell you the luxury sales are lowest in five years.

china is stabilizing. yfl is doing quite nicely relative to gucci. luxury sales are at a five year low. volvo. when it comes to getting a grip on your costs, take a machete. these guys are cutting their costs by an. they're going to cut spending by another 10 billion kroner. truck orders are rising. and truck orders in north america rose by 73%. maybe janet yellen is right. a 3% growth rate in united states of america. the airlines. there you go. iag, british airways down 2.34%. air france down. lufthansa down. the airlines are under pressure. likewise with ihg. >> great work. thanks very much. time to get an investor take.

we have a chief investment officer at london capital were $4 billion.d 4 ebola scare. travel and leisure stocks have onth -- have whipsawed i this. threat willly, the continue. inevitably, investors not only look at the long-term valuations, the fundamentals, but also the short incentive and measures which are not good new s. what is clear is that for all the talk and the tragedy, human tragedy, this is not something that market participants, except now,the ones that are there should worry about. this is very much concentrated on primary care workers. they are the ones at the forefront. secondary contagion has not taken place. ultimately, that should very

much be something we should really be consider. >> we expect the sector to remain volatile. 9 >> expect the fact that it will remain volatile. investors,ong-term the next six months, ultimately companies in some cases that are trading at valuations -- fr western development thato. >> uk gdp. were sitting here three months ago, we would have a different conversation. it is all happy days and sunshine. now everyone is feeling a little bit gloomy. why? >> because this is an economy that was driving. but there was a one very powerful course at the front of the car. your business investment, your government spending were pretty

much anemic. you have a very strong housing driven horse which seems to be losing steam. this is an economy which, and ma comparison,g the point economy. it is no surprise that we're a little bit less excited. >> 0.7%. that is still a decent quarter compared to what is happening in europe. >> correct. it is the rate normalization and the impact of that into the housing market and the impact of that into household confidence and the impact of that into household retail sales is the one that worries us. you will begin to see evidence -- everybody checks where the house is worth. and everybody is beginning to

say, wait a second. this is not the kind of double digit returns i have accrued in the last 10 months. all of us in the last three months, we have house prices in central london up less than 1%. be ais where we begin to big worry for consumers. >> that is still the date discussion in london. it is all about housing prices. the politics are immense. growth in the u.k., what does that mean for the budget contribution? we will talk after the break about that. let's check in on airline stocks after the news that the first ebola case is in new york city. airline stocks this morning a little bit lower on the back of this. indexavel and leisure immensely volatile over the last couple weeks. plenty to discuss as we talked through the show. coming up on "on the move," w inter is on its way but the gas pricing dispute is heating up between moscow and kiev. we will speak with the head of the ukraine's state run natural gas company.

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>> welcome back. this is "on the move." streaming online, your phone, apple tv, and amazon tv. let's get over to germany,

meet ineu leaders brussels today with a packed agenda from energy security to the threat of a bullet to the unrest in ukraine. hans nichols joins us from berlin. hans, what is most important here? you know what is on the front of him. her single newspaper in the u.k.. guess what is. >> i'm going to guess with the ball in the states. that was a little bit on the agenda last night. they did have an agreement. -- i am going to guess it was ebola in the states. they had an agreement on reducing greenhouse gas emissions. now, environmental groups are criticizing that as being too soft, not ambitious enough. what the participants are saying is that is an important that the eu is on the same page heading into the paris climate change talks next year. here is what francois hollande had to say about it. this is a compromise, not all countries are in the same situation. this agreement is expensive for some countries. that is the issue.

how the work of the transfer costs? in the east they have a lot more of granny to do. countries like poland, 38 billion euros was pledged to offset that. these are long-term goals. one other goal they snuck in there -- this is more aspirational. 27% of energy by 2030 will be renewable. these are big goals. we will see whether or not germany and the european union is building momentum towards paris. we saw how that work in copenhagen. it collapse. they are making another run at it. >> talk about the budget talks, because the energy conversation is one thing. everybody here is talking about the eu asking for an action 2.1 billion euros from the u.k.. that seems to be the price of success . look, we are going to be talking about this from now until 2017. until frankly, all of the fiscal

and budget rules are fully harmonized and everyone agrees, to the rules,s which they have done, but agree to abide by them. i suspect the budget talks will be more on the agenda today as well as little bit more on ukraine. you heard that angela merkel pushed back on the idea of lifting any sanctions on the ukraine. critical of how the cease-fire in the ukraine agreement is being implemented. do not look for any action on ukraine. frankly, look for more dithering. maybe horsetrading and quite a bit of dissent on what to do about budget rules. jon? >> let's talk about the big one for the city and that is the stress test results this weekend. what do we know so far? >> we know very little. some banks, if they have failed, maybe on notice that they have not pass the stress test. which will happen in the next 48 or 72 hours. on sunday, the ecb will publicize who has passed, who has failed. it is going to be a remarkable

moment. we will have all of the information on monday morning after they -- they want to do it when markets are closed. you will see asian markets react first. then you'll see what happens in various indices across europe. we have talked about this before. if the stress test is incredible, banks will have to fail. if no banks fail, the stress test might not be credible. we will see whether or not they hit the sweet spot. >> great work. i know you're going to be a very busy man on sunday around midday. still with me now is the chief investment officer at london and capital. let's start with the politics first. uk.gdp number from the this is way better than most of the eurozone. the price of success is 1.1 billion euros. >> european parliamentthe and eurozone never ceases to surprise me. they are trying every single option. forhey wanted more fuel

potential discontent this side of the channel, they are doing exactly what they should be doing. it is a political bargain and it becomes very evident that there is not very much concerned with the overall future of the eurozone. with making it to the next election. >> a political battle in the u.k. is going to be immense. we have another by-election coming up. thatis expected to win seat. the political headwinds from the u.k. could really take up on one issue -- the uk's membership of the european union. of gdp.ounts to 5% is that membership under threat? >> it is. ultimately, you do have a party which a few years ago was at the fringes of mattering. now ultimately having this opinion -- what is important is for investors to create

additional volatility. oyou are beginning to strengthen the party. or actually increase the likelihood that labor might come to power with all of the uncertainty financial markets. not good news for assets. it is time to reduce exposure. rate expectations for the u.k. have been pushed backwards in terms of delays. but we should be very careful that -- this is not a time to be greedy when it comes to asset. we are at the very, the weak spo t for the convergence between economic activity and higher political sensitivity. >> let's talk about eurozone assets. let's talk stress tests. hans nichols talking about the need for the -- these to be credible. let's talk about 2010. guess what happened? irish banks got passed. guess what happened a few months

later. a few needed a little bit of money. 2011. they face accuracy within a matter of months. these tests were not credible. why are these tests going to be credible? make amuch will difference. we are in a losing situation. some fail. very bad news, because then what do we do? recapitalize them and what will be the impact of those stress tests? isich is what the - draghi concerned about. if everybody passes, then it is not good news because credibility is at stake. it is a losing situation for the financial regulators. it emphasizes the insane amount of work that mario draghi has in front of him. banks are not going to lend. q.e., -- you can talk about

q.e., but that is not going to help you >> banks have spent amount of time leveraging capital. it must be healthier sector than it was 12 months ago. >> it has become a utility tough sector. it is very much regulated. it is wonderful news for financial bond investors. it it might be horrible news for lower.s because they are those that are buying into financial bonds, into the balance sheet of these which are becoming safer by the minute, good news for investors. for the real economy -- horrible news because the tab will be close for a long time. >> what about the equity investors? the swing has been immense. we already bought the good news that comes out of these tests? >> i think the equity side of the financial stock is catching

on. yes, you might see some significant moves upwards, but ultimately this is not a very good end game for equities. they are the owners of institutions which will be safer. it will be less leveraged. institutions which ackland -- which actually will see the return because the levers goes down. low for a very long time in the eurozone, which means that you will not even have the yield curve the u.s. banks will be able to take of.ntage n io do not think it, is time to invest in financial institutions in the eurozone. >> you said more problems for mario draghi. in december, another auction of that funding. the stress test will be done. we were told that one of the big hurdles to getting a big pickup in the first auction was these tests. do we get a decent pickup in

december? >> you will get a better pick up in december because uncertainty will be reduced. what is clear is that, even if you have a higher pickup, this is not about funding anymore. it is not about liquidity. scared.e they are they have the alternative of putting the deposit at a e, which soundst like lunacy. the alternative is to give it to mr. and mrs. garcia in spain with 25% unemployment. we should stop thinking about armageddon. and start talking about the three musketeers. one for all, all for one. if germany does not play ball, it will be a long story. >> thanks very much for joining us this morning. as we head to the break, amazon shares sunk overnight.

that is being kind. while microsoft got a little pass. we will tell you what went wrong at amazon and what microsoft is doing right. a look at equities. 20 minutes into the session. the ftse down 30 points. back in two. ♪

>> welcome back to "on the move ." 8:24 uk time.

after theres sank company posted its worst loss since it first sold shares 11 years ago. have talked about amazon so many times. we complain when investors are stockthe money for buybacks, then we complain about amazon because they do the opposite. our investors losing patient? 13% after hours. i think a little bit of patience is waning because this is a company that is spending phenomenal amounts on all manner of things. it sells products, books and and now online presence. it's content is king. it is spending money on drones. amount of phenomenal money. more than $20 billion in the last quarter. it has increased its spending

22%. sales rose 20%. but then they have got a let of half anet loss billion dollars. 10 times the amount last year. worst of all, the fourth quarter, when we all splash out on christmas giving, it is not looking as good as analysts had hoped. missing projections. a little bit of worry going on amazon. that all of this investment is not giving you rewards. >> it's always jam tomorrow. with them and mr. bezos. stock is getting crushed. there was a silver lining. >> this is all about web services. this is about cloud computing. they made a phenomenal part of their business producing, allowing companies to start -- from stoutest of the company to run their websites, their storage of their dated via amazon. they pay per hour. youron't have to host

website or store that data that you and i need. this is the way company is moving. there was a real up tick. they were getting crushed last quarter by competition -- google, microsoft providing cloud efficiently, but their unit that is doing -- the cloud year on year growth. not as good as the good days of 2013, but it was getting there. >> microsoft and 10 seconds -- the polar opposite. >> all about cloud, all about calmingduceing and investors. investors have braced themselves for not such good numbers from microsoft. sales are up 25%. even though they're laying off 18,000 people. having to pay out for redundancies. i will leave you with a quote from bernstein, "how many vendors of this size are growing

that fast, more than double their cloud?" >> up next, we will hear from the man at the heart of the russia-ukraine gas dispute. ♪

>> welcome back to "on the move ." i and jonathan ferro in london. get minutes into the trading day. this is how things are shaping up. ftse is down about 37 points. the dax off by a similar amount. 50 points lower. u.k. gdp is the big number. 0.7% is the estimate for the third quarter. if it beats, happy days. who theyses, you know will blame, the neighbors in the eurozone. caroline, cheer me up. >> the best performer in europe, up more than 10%, volvo.

it is all about trucks, all about reorganization in this company as well. sales and profits have been being hurt but they are promising reorganization. they are promising they will cut by 2015.another 50% that as we see slowing demand in south america and asia. there is a glimmer of hope, america. truck deliveries ramping up in north america. investors feeling the optimism about volvo's future. construction equipment, also engineering components for aircraft as well. they are reoriented in themselves for the future. all about cost-cutting. meanwhile, kering, a little luxury for you this morning, down almost 4%. why, gucci. the weakest area for kering group. laurent continues to

is seeing and puma the movement, the launch they are doing really starting to pay dividends. they are doing well. sending a gucci shiver down investors spines. basf, all about chemicals for this company. all about the downside as well. we are seeing cuts for the 2015 goals. weaker demand. asf.economy is hurting b they are cutting jobs, closing factories. >> they are three stocks to toph, here are four headlines at bloomberg. authorities in new york confirmed the city's first case of ebola. the doctor had recently returned

to the u.s. from ginny where he treated infected patients. he is now in a special isolation ward in manhattan. new york's governor says that people he came into contact with have already been tracked down. u.k. prime minister david cameron is challenging a european union call for additional british constitution to the common budget. the eu wants to .1 billion more because ofbritain the nation's comparative economic health. cameron says the bloc does not need the money. the disagreement comes as some u.k. voters question britain's role in the union. brazil votes in a runoff presidential election this sunday. the incumbent, dilma rousseff has taken her first lead against challenger nieves. according to the polls, president rousseff leads by

eight points. tough job will have a ahead as brazil struggles with inflation over 6%. we areanother election closely watching is ukraine. president poroshenko's party as well as his prime ministers hold more than 40% of support ahead of sunday's parliamentary elections. poroshenko says a strong coalition will be formed after the election. supplier state-run gas locked in a pricing dispute with .ussian producer gazprom they will try to reach a temporary deal next week. failure totions of a reach a deal are huge. so much of eastern europe's gas travel through ukraine from russia. joining us now to discuss this is andrei kobelev.

ryan chilcote also joining us. let's start with the ukrainian elections. tell us why these are important. it looks like the results can be predicted already. >> still difficult to be predicted. there is a chance for a different party to get into the parliament. it is important for us to make sure we continue going the same route. >> talk to me about how these elections fit into the stuff ryan and i have been talking about, the talks over energy. do they have any relationship at all? >> looking forward to this meeting on tuesday, what is the likelihood that is when you meet the russians again? >> it is quite difficult to predict. so far, we have not seen desire prom to sign a deal.

we need a binding deal signed by both parties so there is trust and gas deliveries that we need. >> the german chancellor talks about a loan by the european union to allow you to prepay for some of your russian gas. you don't have the money to do that. what if you don't get the loan? >> we have some money to pay for the gas, however there is more needed to pump into storage. need --way, we >> you are saying for the european union to get the gas its needs, they have to pony up the cash. >> there is need to have enough volume of gas so there is stable transit. gazprom does not want to. someone needs money to finance that gas. >> what does this mean for the rest of the eurozone? this is an important route for

european gas. it is 15% of demand. europe could possibly get through the winter with this shut off. what does it mean for ukraine? first is how much we will be able to cut consumption inside ukraine. this is challenging but we are doing this. second is flow from europe. we are trying to increase them. if we keep them stable or increase them, that will help a lot. >> the environment right now with these talks, take me inside the room. how critical are these talks? how energetic has it become? is there plenty of shouting? what is happening right now? >> put it this way, the closer we get to winter, the more emotional it is getting. >> give us an example. on tuesday there was a lot of discussion.

our russian counterparts made it clear that the result of six to signs their proposal a nonbinding document. after six months discussions, you are getting a nonbinding document. >> who are you negotiating with? the russian energy minister, the head of gazprom, the eu commissioner, isn't this all being decided by the russian president? politicians as well. however, most of the decisions, most of the proposals are designed in that room. given the importance of this issue, how much depends on that, i believe those on the russian side and ukrainian side have to have something clear. >> do you take a smoke break so you can call up the ukrainian president? russians do the same? >> we make breaks, we make calls

home. at the end of the day, for ukraine and russia, each will go back home and explain the deal. so the deal is fair, the deal is written on paper, here is money, here is gas. >> who has the leverage right now? we are getting closer to winter. europe seems to have enough gas. russia is looking further east. is ukraine losing leverage here? >> i don't think so. we are all pretty much in the same boat. europe is safer than ukraine and russia. that europe,show especially western europe can survive without russian gas at all. for russia and ukraine, this winter may become quite critical. it will mean a difficult winter for ukraine, but that will also mean gazprom will keep losing

his market share in europe. >> we are hearing that you are in talks with statoil to provide 6 million cubic meters of gas at $60 per cubic meter. give us a sense what that would do for ukraine. that isly, confidential. secondly, we are working with european five providers who supply gas to ukraine. gas is there. of flowsa bottleneck from europe to ukraine. this is where we need to unlock more volumes. if there was more volume, there would be no crisis. ukraine could be sourcing all of its gas from europe. >> let's talk about politics. this crisis emerged, since the sanctions came through, ukraine is looking increasingly

isolated. if you are a european country, you are probably thinking, why depend on a gas route that comes from ukraine? ukraine is looking increasingly isolated. is the best route out of this to look back to russia and try to sort this out? >> to look back at russia meaning what? >> to get rid of sanctions, tone down the dialogue. ukraine is looking towards the eu. historically, that has not been the case. >> you must understand one thing. our gas stocks is a good example. we are actually looking for a deal. the problem is that our russian counterparts do not want to have the deal. >> you still think they don't want a deal? >> if you wanted a deal with someone, you would be prepared to sign paper. there are simple steps. you have to meet guarantees to

the counterpart. you make sure that your counterpart does not have the aprilhat what happened in this year will happen again. >> if i go shopping and don't pay my bills, those people will stop supplying to me. what is the difference here? >> the difference is huge. if people you have been supplying understand and they can prove that they have been paying for the last four years and you refuse to change the price, then you suddenly agree to change the price to compensate for past overpayments, then you change your decision -- from the very beginning, ukraine was ready to cover all invoices from a book. all we wanted was to have a guarantee of price. we have no positive response.

so we probably will try to buy gas from different sources. will agree the russians have a different view about that. maybe a conclusion you can tell us, it has been a while since russia turned off the tap, what is it really like and how bad will it get in ukraine? >> heating is there for several days already. as soon as the temperature gets to a certain level, there is a law that provides gas. >> at a reduced temperature? >> temperature is standard. on some we do insist internal work. people in ukraine are used to conditions that are different from european ones. they are used to much warmer houses which sometimes create inefficient use of gas. >> how bad could it get? >> we will see. we believe that we can survive.

>> a final question. i asked earlier but you didn't really give us a clear answer. i guess it is difficult to tell. when does the gas run out? can you get through winter without sorting this out? >> again, that will depend on how much we get from europe. >> the consensus is you need at least 4 billion cubic meters from russia. no way of getting around it. >> or from europe. from somewhere. either russian route or european route. we can get this from one direction or a different direction. >> as i understand, the stocks now are not enough to get through winter, right? >> existing stocks with projected consumption, yes. >> thank you. ryan chilcote, thank you very much. andriy kobolyev, privileged to have you in the studio. coming up, humor. sales figures at kering. ucci gets no love from china.

stay with us. ♪\

>> welcome back to "on the move ." here are some companies on the move this morning. ericsson reported a 9.4% drop in third-quarter profit. competition in the wireless network sector weighed on margins as the company works to

expand other businesses. erickson says a decline in north america was offset growth in other regions. big push higher today after announcing plans to widen cost-cutting operations. the truck maker will reduce spending by an additional $480 million. operating income dropped more than 6%, falling short of estimates. cut its 2015 profit target by more than expected, falling to 2.4 billion euros short of the previous forecast. the world's biggest chemical maker has lowered its outlook on domestic growth as well. the company confirmed this year's targets, saying sales will decline slightly. shares of the luxury giant kering are taking a hit after the company posted sales in line with analyst estimates. like many luxury reports,

slowing chinese demand is taking a bite out of the bottom line. andrew roberts has more from paris. great to have you here. who would have thought it would be pooled a that was helping -- puma that was helping kering. is really a mixed bag. we have luxury on one hand, sports and lifestyle on the other, underpinned by gucci and puma. puma has been a drag on company shares for some time. nonetheless, comparable sales grew twice as fast as analysts expected. is tryingcause puma to reposition itself as a performance brand with a big marketing campaign that it launched starring you same bolt -- usain bolt. goodseems to be having a

affect at the actual brand itself. the market this morning is a little bit concerned about gucci which is still underperforming. sales are down. they have fallen less than they did in the previous quarter but the problem is ,kering is trying as a moreion gucci exclusive brand by shutting wholesale accounts. findsoblem that gucci itself in is that you have this problem of chinese consumption. ,hat is going on in hong kong the protests, have dented chinese demand in the city. although chinese shoppers are now spending elsewhere, the other places they are spending outside of china only account for about one third of the spending they do in hong kong. as much as gucci tries to work to reposition itself and those things are going in the right direction, what is happening in hong kong is dragging down its performance. >> you do wonder if this is the

kering or just a luxury good story. andrew roberts on top of the stories as ever. thanks for joining us. as we had to break, a quick check in on european equities. down about 0.5% at the open. course, it is u.k. gdp day and we will be talking about that after the break. the gdp figure out at 9:30 u.k. time. the estimate, 0.7%. "on the move" is back in two. ♪

>> welcome back to "on the move ." in just over 30 minutes, you get the only number that matters this morning, u.k. gdp. expected to come in at 0.7%. the question, what does it mean for the bank of england? david joins us now to discuss. great to have you with us. three months ago, you and i were back and forth saying, we can question the foundations of this recovery but growth is going gangbusters. now we are talking 0.7%. not that bad, is it? >> certainly a good number relative to many of the countries in continental europe, which are stagnating.

i think it is important to put it in context. essentially, we had a dovish set , andnutes, dovish speeches essentially what they are saying is growth is not so bad but we are worried about the headwinds, particularly the trouble in the largest trading partner of the u.k., the eurozone. economist feeling a little gloomy over the central bank and the bank of england. inflation, five-year low, is that a big concern? is that pushing back expectations? >> the drop in inflation has push them back already. the market is focused on a hike in august of next year. it is looking at the distant prospect not partially due to that decline. inflation in the u.k. is lower than even in the u.s. >> you wonder about the flip-flop of governor carney. one minute, it is very hawkish,

now it is dovish. we look ahead to the next inflation report. >> essentially, he has been a victim of the data. when he came into office, he used the phrase, crisis economy to describe the u.k.. but the recovery has surprised everyone. more recently, you had those gdp revisions that showed the economy well above the crisis peaked. he has had to adapt to the data. that has not made for a consistent message. >> david powell, thank you very much for joining us this morning. u.k. gdp comes in 34 minutes time. expectations here are 0.7%. misses, they will blame the eurozone. this is how sterling's trading. one pound now buys you $1.60. just coming off session lows.

the number drops in 30 minutes. look out for the number. as we head to the break, equities a little bit lower. the ftse down by 0.5%. "on the move" is over. "the pulse" is up next. ♪

>> ebola arrives in new york. a doctor has tested positive with the virus. we are live outside the hospital. >> punished for success. the eu to handover an extra 2.1 billion euros because of the country's strong economy. >> too close to call, recess and nieves harnacknd and back. we will talk to mark mobius about the story.