we're looking at the russian ruble. it hit a fresh record low this morning against the dollar. as you crane lurches back toward -- pro russian rebels step up the blame game. so much to discuss. ftse higher. dax futures up by 36 points. we may well be getting a higher open. >> a good day to you. the question is draghi's voice yesterday sounded convincing. was convincing. he has put a price tag on it. does he have the germans onboard? this is the dollar. this is the trade as you said, jon, 235 is around the consensus estimate under this year. a 5 yoif year high. - 5 1/2-year high.

that difference between east and west versus north and south in europe. s&p made records yesterday afternoon. 80% of the companies in the u.s. reported a profit. in europe today we are seeing just a little bit of a -- carry through. equity markets are opening higher. we've had a couple of reports. waiting for the dax to open. allianz we saw the figure come out there for 50 million euros worth of money that has been taken out of allianz. let's see how that opens. paris, that's where all the action is. arcelormittal up 4%. credit agricole. the banks generally lower this morning. richemont saying actually the protests in hong kong -- their numbers. that is not really knocking their overall performance this

morning. sales down 1%. asia has slowed down. and the overall operating profit -- up 1.3%, burr bury. burberry down .2%. they talked about a slow down. a look at the dollar. let's have a look at the euro. b.n.p. paribas. 3 along with standard chartered this morning, pair ba would say you get quantitative easing in december. standard chartered saying you get it in the eurozone in the first quarter of 2015. ecause b.n.p. paribas, 1.15. again, momentum called very much on the downside here, jon and on dollar/yen, i leave with a

thought, 1.25 is attainable. kuroda's bazooka is definitely bigger than mario draghi's. >> the ftse 100 1/3 of 1% higher. let's get to that meeting of central bankers kicking off in paris. we're joined by mark dean. tell us what we can expect. some big hitters attending. >> i mean, everyone -- just about everyone big in the central banking world is here. we don't have mario draghi but we have a lot of other representatives of the e.c.b.. the key issue is that the fact that the fed is essentially tightening. the bank of japan is going great guns on a balance sheet expansion the e.c.b. said it was to expand its balance sheet by a trillion euros in coming months.

the big central banks of the world are moving in different directions. this is bound to cause market volatility. it shows that different parts of the world's economy are different -- in different stages over the economic cycle. i think this is going to be the key -- the key issue being discussed here today. >> thank you very much for giving us the update. . we'll catch one you later in the morning. that is mark dean. let's get the investors' take on today's top themes . he helps manage a $2.24 trillion in assets. great to have you with us. >> thanks. >> you see the central bankers meeting. we have a currency war. are we talking about the same thing again? is that where we're at? >> that is the unintended consequence of these meetings.

ultimately what we're going to see going forward in 2015 is a divergeance of monetary policy. we have the fed in play talking about removing tapering. they are removing any form of easing going forward. it is already priced in market. also we had draghi yesterday, obviously the bank of japan the week before. this is going to affect the currency. is it going to affect interest rates and evaluations of the currency markets? without a doubt. >> quite a performance by draghi yesterday. the market giving him a great start. how important is that for you as you look at the markets here in europe? >> hugely important. i think he managed a lot of the questions very well and i think going forward, what we'll see here is a continued weakness of the euro. especially against the dollar. we have changed our predictions of the euro down to about 118. we can see that happening within

the next couple of months and given the momentum of the currency markets, we can see that going well through that. in 2015, you can see the euro dollar trade significantly below 118 down to probably about 110 if not lower. >> if we can head to 110, euro dollar. towards 120. when does the fed start making noise about the strength of the dollar? when does this start to become real noise? >> it depends how it is achieved. i think the fed are going to be supportive of what draghi is doing with -- with q.e. and what they are doing in the ltro's and the bond market. i don't think they are going criticize the unintended consequence. the bank of japan has more -- about the manipulation. the interesting thing is the

impact of that currency. devaluation over the euro has on broad european g.d.p. going forward. >> you think it is a short-term thing or is this something that is going to stimulate the economy for a while? a lot of people saying this is a short-term phenomenal. once it drops out of the earnings, that is it if? >> if you look forward to 2015, the way we model it is if you take about a 10% drop in the euro, you're probably looking at about a .7 increase in points of g.d.p. to the eurozone area. you have that and you overlay that with a weaker oil price for example and you could have a tail wind that will help draghi and the rest of his monetary policy. >> we'll talk about some headwinds after the break. the ruble hits a fresh record low against the dollar this morning. terribly volatile.

another headwind we have to talk about. russia and the relationship are europe. we are back in two.

>> welcome back. i'm jonathan ferro from london. this is "on the move." let's get right back to the markets and turn to ukraine.

fighting in the east of the nation has escalated threatening total disintegration of the cease-fire between kiev and the rebels. ryan, what is going on this morning? i look at that. it is jumping everywhere. >> looks like we got a little bit of a battle for the ruble underway. yesterday we saw the ruble with its single biggest loss. single bigs on any given day loss since 2009. those losses continued into this morning. the ruble weakening to 48.5. then we saw what looks like a little bit of intervention. we're calling traders to find out if the bank of russia has jumped in. we saw the ruble claw back some of those losses and yet again the ruble is weakening. perhaps the bank of russia has intervened and is again perhaps behind the curve. we know that the bank of russia

spent $10.5 billion last week trying to support the ruble. $25 billion in october. tens of billions this year. they indicated they will spend what they need to defend the financial security of russia. have we reached that point? my zpwess 50 might be the line they want to depend. it is anybody's guess. keep in mind we started the week at 43 rubles to the dollar. a year ago it was 32 rubles to the dollar. and really if you look at the last five years, the ruble moved within 25-32. this is psychologically very stressful for russians. they look at the ruble/dollar exchange rate and usually make a judgment on their own wealth on the basis of that, translating their ruble incomes into dollars to see how good they feel about where they are in life and they are not feeling good at all this week.

though it does of course help the russian budget because they saw their energy in dollars. this is bad overall for inflation and confidence in ruble. >> ryan, we look at the dollar/ruble chart. we'll be looking to the east of ukraine as welling up to headlines that stay country is lurging back to outright war. how close are we to being in an all-out war again? >> things have been escalating for the past few weeks. the trend has been a negative one. we have seen both the ukrainians, the central government of ukraine and the rebels in the east of the country accuse one another of beginning major offensives in the east of the country. we can't confirm that is the case. there has been fighting after all underway there for the last two months since they reached a truce. what is important is it looks like that might be a pretext for increased military action on both sides. we also heard the russian

president yesterday say he doesn't see the civil war subsiding in the east of the country. people looking at that as a potential pretext for more russian action in eastern ukraine. you definitely want to keep your eyes on this, sanctions and the prospect of more sanctions back on the sable. >> thank you. with us is bill street. he helps manage more than $2.4 trillion in assets. when you look at the developments in eastern ukraine and really the relationship developing between europe y and russia or lack of relationship, you look out to 2015 and you're called to be overweight european stocks. is that one of the big headwinds for you? >> without a doubt. you think about the conversation rlier, 118, 110, lower oil prices by $25, that is really good. we have discounted p/e's.

the p/e ratios look attractive. if there is one elephant in the room that is going to disrupt anything for europe going forward is the geopolitical risk of what is going on at the moment. >> we have seen this show up in some of the earnings already. when i look at it so far, it has been decent. 60% of those reported have beaten. the u.s. situation with earnings. we talked about this top line/bottom line divergeance. the bottom line growing because of cost cutting, buybacks, dividends. paying all of this money back to shareholders. are we seeing the same thing europe yet? is that starting to develop for you? >> that dynamic, bottom line attrition of costs is what is drivering the margins without a doubt. what we're looking for in 2015 is this growth on the top line. we do see it coming through. we have seen some positive

revisions on sale. coming back to russia. this is exactly what will hit corporate confidence, consumer confidence. this will be what stops spending and reinvestment. this is exactly what put headwinds into that top line growth and force corporates to continue to hit the bottom line to support those margins. >> will it force the e.c.b. to do more? >> no. i think the e.c.b. are in play. draghi quite clearly has made some very strong statements about what the e.c.b. are prepared to do. they are in play. they are going to do whatever it takes. i think this is just a headwind that is going to come around the corner. i think the story for 2015 is e.c.b. in this play and the fed leaving the field. >> how significant was the statement yesterday and the change at the top of the statement that referenced the

2012 sized balance sheet that we will get growth of a trillion euros. is that a game changer for you? >> no, not really. i think he alluded to it many times. to be honest, when you look at his original statement nearly 18 months, two years ago, when he said the e.c.b. are going to do whatever it takes, it is more complicated monetary operating model in europe than it is in the states. so not surprised that it takes a bit longer. the lead time to get to this point than for someone like the fed for opening up the balance sheets to that extent. it does mean some clever political navigation and draghi is a master of that. >> we're going to talk policies after the break. he stays with us. p next, a new low for francois hollande. his popularity hits a record low again as he pledges not to run

for re-election if he can't create jobs in france. i don't blame him. he probably can't get reelected. we'll talk about that after the break.

>> back to "on the move." i'm jonathan ferro live from london. the world's largest jewelry maker, richemont missed profits in the half. profit dropped 4% after luxury good demand in china weakened.

european luxury houses have faced headwinds and the chinese government crackdown on bribery and extravagant spending. allianz confirmed its full-year profit forecast and claimed to paye pay a higher share of profits to shareholders. they are prepared to pay 50% of net income to stake holders. they are trying to stem outflows from their pimco unit. pimco has suffered almost 50 withdraws. s in revenue beat estimates after broad hand helped the carrier offset shrinking phone bills. it is a sunny of recovery after overcoming a price war. time to talk politics now. french president hollande said he will not run for a second

term if unemployment does not decline in the remaining 2 1/2 years of his presidency. we're joined now from paris with more. does this mean that hollande won't be running in 2 1/2 years time? is that pretty much what he just told us? >> i would gotten that far. there is 2 1/2 years to go. it is hard to imagine the unemployment rate is going to keep going up every month, if it does, we're really going to be in a crisis. i think he is there to show he has no personal ambitions. he is just there for the french. he won the last based on the promise to bring down the unemployment rate. his approval rating is 13%. in those conditions he would not be able to run again. i think it is a little bit of facing reality and little bit of

gamesmanship. >> if he doesn't run, who runs in his place? >> that is the big issue. believe me, there is plenty of people behind the scenes in the socialist party thinking about that now. there is a bit of a battle for the soul of the party going on. you have the prime finish i minister. he is trying to purble the socialist party towards a a more pro business and talked about getting rid of the name socialist which he says is outdated and then you the mayor. she has run for president before. she represents the traditional french socialist party. much more focused on the welfare state. certainly not pro business. there is that battle going on. at this point, the prime minister is certainly in the lead. the polls show him as the favored candidate for the socialist party but the mayor, she is very -- she is tough and she has been around the socialist party for quite

sometime. she has a lot of followers. there are a lot of people in the party who don't like to pro business direction he is taking the party in. there is going to be a lot of stuff going on behind hollande's back for the next 2 1/2 years. >> thank you very much for joining us from paris. let's bring in bill street of state street global advisors for a few final thoughts. president of france -- as an investor, do you listen to the politics? it is just so insulated anyway. >> i'm not sure he listens to politics. politics is engrained in europe. we have monetary policy, fiscal policy is ultimately political policy. so while trying to get to move to the point where we have a more uniform fiscal policy

across the whole of europe like we do in other economic zones, it is important to be aware of what is going on because exactly the conversations we're having with hollande creates it in the bond markets. >> 25 minutes into a conversation with you and we have not spoken about payrolls. u.s. payrolls. for someone that manages and helps manage over $2 trillion, when you see that headline come out, how much attention do you pay? > we're long-term investors. payrolls are quite volatile. it is a long time. it is not only the unemployment new but the rate. payrolls can be a punchy number. you look at how a.d. spmbings coming out and the i.s.m. numbers we could have quite a strong number. it is all about reducing things like the output gap and also about inflation.

we do look at it but look at it much longer term. >> unemployment, 9.9%. how low does unemployment have to come for wages to start to accelerate? >> the problem is we have got negative real wage growth. part of this is really the productivity conundrum. it is really the fact that there is a reinvestment cycle, corporates spending more money, making that workforce more productive because if they don't we have an inflation problem coming down. ultimately there is only a certain level of which that unemployment rate can go before you start triggering wage demands. if you can trigger off the productivity cycle with reinvestment and stimulate productivity, we should be ok. >> that is the big question. bill street, head of investments at state street.

up next, u.s. stocks. will the s&p break through 2100? our next guest thinks so. find out why he is so bullish after the break. we're back in two. ♪

works welcome back. i'm jonathan ferro at bloomberg's european headquarters in london. 30 minutes into your trading day. let's see how things are shaping up. we opened 0.3% higher on the ftse. we are 30 points higher. the dax keeping its head above water ahead of the big payrolls number. jobse looking for 235,000 added to the u.s. economy last month. unemployment rates to stay at 5.9%. that is the big data of the day. here are the top stories. francois hollande says he will not seek reelection if unemployment does not decline.

france's jobless rate stands at 10.5%. approvala record low rating. hollande made the comments in an interview. luxembourg denied it broke global rules to help companies dodge taxes. that follows a report which reveals secret details of deals done during jean-claude tenure as prime minister. according to leaked documents, companies use complicated tax arrangements. later today, we get a snapshot of the health of the american economy with the latest jobs data released. that is at half past 1:00 u.k. time. economists expect 235,000 people joined the workforce last month. the unemployment rate is expected to hold steady. let's talk u.s. equity markets. another day, another record high. the dow and s&p 500 hit new

all-time highs at the close thursday. our next guest says we have more to go. he call -- he forecasts the s&p will reach 2500 points by the end of the year. pleasure to bring laszlo birinyi. he joins us here today live. thank you very much for joining us this morning. let's go back to october 15. if you had set with me that morning, you said, 2500 by the end of the year. what made you keep your conviction? marketompare this bull to driving cross country. we knew there was going to the detours and bad weather. this was just another incident that came along. a little more damaging than we thought.

but the really significant declines are ones where the market is telling you beforehand that something is going to take place. in this case, a quick drop in oil. where i was concerned was where i see the market softened and then the bad news comes. the market was telling us that it really is bad. >> talk to me about germany. -- the journey we have been on. what phase are we in? we in the bull market? >> we determined years ago that this was a protracted market somewhat along the nines of 1982, 1990. you have the reluctance, the consolidation, the acceptance, then exuberance. i think we are in the fourth phase but i thought that before. i thought 2013 was the beginning of exuberance. we still have markets hitting

new highs. the bad days are on the front page. as long as we still have this discontent and people telling us it is a bubble, i think we have more good days ahead. >> when you see a front page that starts that feeling of euphoria? piece on howng a to tell the end of a bull market. not the things that people look at. for example, the ratio -- they are not very useful. one of the things we do is we save these newspapers. we save the transcripts, we save the magazine covers. , and alsoot of them we see the arguments where people are reaching and this

could happen or that could happen. we base a lot of what we do on history and facts. making upe start things, that is where we get concerned. >> when you get back in the saddle and you see the rebound and how quickly the rebound took, what was that telling you? >> you have a lot of people with cash and they are nervous. they are waiting for another opportunity and they have learned that you can't wait too long. that is a very positive sign. ,> people in front of me say 95% of earnings on the s&p 500 are going into buybacks, into dividends. the top line-bottom line divergence, you keep seeing the bottom line grow, the top line not so much. what do you say to those people? >> study history. from 1982 to 1987, the stock , earnings went up 6%.

the correlation between earnings and a rising market is there but it is not quite as compelling as some people think. in the 2002 bull market, earnings went up more than the market. it should have gone up more. a lot of the things we look at in the market, yes, they effect one -- they affect one another, but not to the degree of that point in time. >> a lot of the negative headlines have been stimulated by negative macro data. when you look at equities , how muche macro data attention do you pay to the number? do you think it is more effective to see the health of the u.s. economy by the earnings of u.s. corporates? >> a lot of the noise is generated politically.

unfortunately has given their political input into the market input. i don't see the press being quite as distant from markets. unfortunately, with the proliferation of information on websites, news and so forth, we over exaggerate that and we don't try to look at them in perspective. i look at the trends. a lot of these are just aberrations. where i am concerned is not with the data, but with the market. example, in the last several years, we printed thousands of commentary on tapering and qe2. , a housing-market related stock. i look at sherwin-williams trading at a multi-year high. i look at home depot. these are stocks that tell me about housing. housing is fine.

if housing is fine, that tells me about interest rates. the argument that once the fed stops with tapering, then things are going to happen, that is not how markets work. the markets anticipate, not react. i think the economy is fine. >> when i look at the bond market, these low yields, that is telling me low growth, low inflation. >> i think you have this issue, but again we have a different set of circumstances. i'm not quite clear on what the bond market is saying. i was at settlements for many years. they would stay on their turf and i would stay on mine. >> i wish you were here the week when qe3 was ending. i had this lovely chart tracking the s&p 500. rip that chart to shreds for me. >> you can always find those

charts. devilpeare said even the can cite scripture for his purpose. that is the only thing that was taking stocks up. there were other things as well. it is compelling and i saw it all over again, but as we saw even when the fed loosened or stopped or would make statements, the world didn't fall apart. where i worry is where the market is telling me before the comments arrive. you, final question for 2100 is the call year-end for the s&p 500. by year-end. by the year-end of 2015, more to go? >> the market looks three to six months advance. it would be presumptuous to go beyond that. we get to our data and then we

re-examined. we think it is going to 2100 by the end of the year. we will make another forecast after we look at our data. the go beyond six months is looking further than the market is looking for i have been influenced by the hook, the signal and the noise. making the market forecast static is difficult. we are saying, let's give ourselves a different -- a little room. if we stick to our timeframe, we can understand what the market is doing. in 2009, you were one of the early voles. you were saying visible market was going to happen. talking about the push that you had then and the pushback you are getting out. >> the pushback i had been was fingering i was not looking at the -- i was guessing.

i was not looking at reality. what i am doing now is a little more -- unfortunately, we have in the market what you have in the political system. we are sort of transient in our views. ratio, topring here , the same thing in technicals. highs.t have enough new if you look at the chart of new highs, we didn't have any new highs in february or march of 2013. a lot of these things, if you really do analysis and roll up your sleeves, i think you get a different perspective. >> we are going to get you back in three months. , it is so easy to be negative in europe. welcome to london.

let's check on the equity markets as we had to the break. here is one stock on the move, rish mont. pointing to a slowdown. it is asia. the stock is up 2.3%. those headwinds could subside. we are back in two. ♪]

>> welcome back. this is "on the move." 'stough environment for europe

luxury giants continuing as the world's largest jewelry company's results show. caroline, sales are down and stock is up. >> if you are looking at the sales numbers, they used words like "volatile," "difficult." profit is down, it is not looking pretty. they say they have volatile trading. the united states, middle east, that is seeing improved growth. they are up about -- phenomenal growth in terms of the african unit. america is up 10%. europe, growth still there. it is slowing but there is still 6% growth in europe. asia-pacific, one of 2%ir biggest units, down in terms of sales. japan off by 13% because of the sales tax hike.

jewelry, that is pretty resilient. but they still make the watches as well. operating profit is where it was hurting most. the stock is up because perhaps this is no surprise. they said back in september, we had the worst start to our fiscal year since 2009. fell in the middle of golden week, one of the busiest trading sessions, when the chinese in the mainland come over to hong kong. this asianseen weakness across various earnings from luxury goods companies. the big question is whether this is some short-term phenomenon or whether the weakness is going to be something more long-term. >> exactly, they have been clamping down on giftgiving, potential bribery. they are trying to make out that this isn't a long-term problem.

i think the numbers show this. the cfo of richemont is saying, down 4%.ales it is actually getting a little better. they look forward. they say at the end of the day, the middle class is still growing. we are going to see in the longer term sales driving forward. but in the medium and short term, volatile sales are here to stay. the month of october, you saw weakness in asia. lower sales in external environments. not looking pretty going into the holiday season. i don't think the next half of the year is going to be that 2017prettier but 2016, things are rosy. gross, did he get a pay rise? his d-up archer from pimco led to outflows of nearly 50 billion euros.

hans nichols is standing by in berlin. the question is, have they weathered the departure? >> it looks like they have. their net income beat estimates. they came in at 1.6 one billion. operating profit on their wealth management unit was down 5%. that is the unit that has pimco in it. they came in at 694 million euros. what we have here is a company whose other aspects have outperformed, done very well. toy are going to be able increase their dividend from 40% to 50% of net income. take a look at their three divisions. managementme asset at 694, then property insurance at 1.4 2 billion, then life and health insurance at 790 million. you mentioned that 50 billion

number. you translate that into dollars, that is $60 billion of outflows from pimco. here is what the company is saying. no matter, no worry. here is a statement from them last night. net outflow development after the resignation of bill gross is within our expectations. they say they are confident in their new team in newport beach and they are sticking with them. insurery if this continues to have great insurance numbers, the pimco side of things is less determinative. >> great work, thank you very much. talking of allianz, mohammed al arian is speaking at the symposium in france. as we had to break, let's listen in.

>> until now, there has been no issue as to whether you are operating in an economy or a monetary union. where i think that distinction is much more important in terms of the response then it is in terms of the vulnerability to shock given how large the shocks have been. where i would like to get each of the details is somewhere else. the less easy part of the story and the less controversial one. world, the state of the speaks to what the fed faced in 2008-2009 and what the ecb faced -- 2007-2009.d the hardest part of the story is what the central banks face today. that is, in pursuing their objectives, inflation or a mandate, how to best do that

licy the rest of the po world is so partial and so imperfect. world whenate in the you are nowhere near the world of first best. thisow do you combine all with the pursuit of financial soundness? is thatlem today central banks have tools to deal with a trifecta of economic competitiveness, delayed structural reforms, and aggregate demand mismatch between the will and the wallet to spend. that is -- ♪

>> welcome back. i'm jonathan ferro live from london. time to talk tax, time to talk jean-claude juncker. mayrts are emerging that he have cut some sweetheart tax deals when he was prime minister of luxembourg. hans nichols has the story from berlin. is this putting him in a difficult spot? >> difficult would be one way to say it. his representatives say that jean-claude juncker -- let me explain the background for you. the background is there is an international consortium of investigative journalists that have uncovered documents from

luxembourg prepared by price waterhouse cooper which pertain to the tax deals that some of these companies may have cut with luxembourg. at the time, jean-claude juncker was the prime minister of luxembourg. it was the policy to attract these companies. what we are seeing now is what may appear to be sweetheart deals from household names. we have companies like pepsi co., fedex. we have other companies like amazon, starbucks, apple. all these companies have in some cases their own special deals with luxembourg authorities. was it tax avoidance? it was clearly the policy of the luxembourg government, a country of a half a million inhabitants. more international investment, more big businesses flow through them. now,hallenge for younger

can he clean this up or does he have to recuse himself? he is saying he won't recuse himself. some of his critics say it may make tax reform easier because juncker is going to have to get this to clear his name. >> thanks. great work. i know you will be talking about that throughout "the pulse." here is a picture of the markets for you. nice little pop on the ftse 100. we are up 0.7%. the dax up 0.1%. ahead of the big one of the day, nonfarm payrolls. we are looking for 235,000. that is the estimate for the month of october. higher 0.1%.rading ,ook at the number, 1.21395 near lows not seen since 2012. mario draghi moving the euro. look out for payrolls.

in the meantime, you can follow me on twitter. ♪

>> the divergence debate. yellen-kuroda. the biggest anti-central banking are in paris. no jobs, no hollande. the french president says he won't run again unless unemployment goes down. allianz confirms a target as pimco struggles with the departure of its founder. welcome to "the pulse" live from bloomberg's european headquarters in london.