points. it is a very different story in russia it is a nation takes steps towards junk. the s&p says it may cut russia's credit rating. meanwhile vladimir putin prepares to bail out banks as he faces an uphill battle in 2015. so that is what we are watching. the european markets limited european market open that we're about to see is happening as we speak. let's find out what is going on. caroline hyde is at the touch screen. >> thank you very much, guy. yeah, a little bit red on the open. flat on the ftse 100. off by .10%. what blowout numbers we saw yesterday from the united states. third quarter g.d.p. 5%. beating every single economist out there that we surveyed. 75 we got the news from. none of them thought it would go as high as 5%. clearly we're seeing the fastest

growth in g.d.p. for the u.s. in more than a decade, since 2003. will that spill over to the rest of the global economy? next year, dow jones, hitting 18,000 points. a record high. stocks have been rallying since the middle of last week, since the federal reserve said don't worry about it. we'll keep interest rates near zero for at least the first quarter. all of this good news could get tongues wagging in terms of interest rates will come down. coming off that high dollar index. it has been a phenomenal performance that we have seen in the dollar index. check that out. more than 12%. clearly that is pretty phenomenal growth that we have seen in the dollar index. the best in a decade as well. if you're looking at the euro, clearly they have been seeing the flip side of that. the euro down 11% against the dollar year to date. today a little bit of a pickup,

about .10%. they are heading for six month s of losses. speculation the e.c.b. might start to unveil quantitative easing. keep in mind all of that. now a check of how we are doing in terms of oil. brent down .6%. we have seen a bit of an easing up on prices. we are down on the trade today. meanwhile, ruble is actually higher against the dollar. at 54.19 at the moment. let's have a look quickly at the stocks. a little bit of corporate data. a little whiff of m&a for the ear. it did rise in u.s. trading. ryker is getting closer to

striking. santander is up. there are reports they could be willing to sell. back to you. >> caroline hyde running us through the markets. we went through 18,000 yesterday on the dow industrial average. that's the number in focus today. it came after the u.s. supported the strongest g.d.p. data since 2003. the dow has gained about 1,000 points in last five days of trade. is this going to set the tone for 2015? is 2015 all about bidding equities around the world? well, let's find out. let's go to zurich. david is the chief investment officer. good morning to you.

they have delivered this year for developed markets on the equity front. how much more is there still to go? >> i think on a relative basis, equities are if the only game in town as far as i'm concerned. there is still an upside but on a selective basis. i think the u.s. outperformance has not been consistent for well over a year against the most dwoment developed markets. that may tire a little bit in 2015, but on average, i think equities, still, the asset class to hold next year. >> let's take that apart a little bit. if i'm a known u.s. investor, is the u.s. still the place to be ? will i gain as a result as a result of the foreign exchange story and will that compensate me maybe for the lack of performance maybe vs. european equities? where do i put my money? >> i think i would keep the money in the u.s., but i think that the backdrop that is

improved on europe. i think markets have disappointed somewhat in 2014 but i think strars better aligned for 2015, especially if the e.c.b. is going to deliver what everyone is expecting in january, namely that they will start to expand their balance sheet more aggressively. europe and the eurozone is the place to be. and then japan, where we think there is also some more upside. >> market there closed up 2 points this morning. there seems to be some upside judging by the market reaction to the u.s. story. people tell me, and i get lessons about this. they say you want to be defensive, if you don't want to take market risks, you need to sit in fixed income. how risky is that trade going to be in 2015 sitting in fixed income?

>> obviously to everyone's surprise basically, 2014 was a good fixed income year. so the question is whether we can have another repeat. i think we have to be a little bit more delinchshating there. i think -- delinchshating. that creates a little bit of a risk. since the u.s. is basically the only major economy where rates are going to go up, also from a policy perspective, in addition to maybe the u.k., i think the rate raise in yields may not be as dramatic as some people would fearened that means fixed income may not perform as badly as it could otherwise. >> how is the relationship between 2006ed income and equity markets--fixed income and exity markets going to develop? does that start to re-establish itself a little bit, that relationship between fixed income and the equity markets? us who isf any one of

interested in the situation in the global economy and global financial markets, yes, that should reassert itself but it is only going to happen at a slow pace. why? because obviously the fed is only going to increase interest rate vrs gradually. it said last week it is going to be patient and i think that applies to the timing and the rate of increase. on the other hand, eck treasuries priced more after the long-term curve. i don't think that the long-term u.s. dollar yields will rise very, very rapidly over the next 12-18 months. >> just one final wrap-up relating to the oil sector. a lot of notes coming across my desk talking about default rates rising in the u.s. as an investor, how should i play this? how concerned should i be?

rates are around 2% at the moment. how big of a difference is that going to make to the investment outlook more broadly across a broader set of asset classes? >> i think we should differentiate once again. that obviously will affect some of the issuers, mainly in the u.s. high yield space. there are indeed some default rates that may go up. but there are a lot of winners due the lower oil price. i think the markets will as we enter 2015, focus on more of those. >> stay with us. we need to carry on that conversation. we'll get the russian perspective in just a moment. david staying with us in zurich. let's check in on the equity markets. a bunch of markets are closed today. we have half days in other markets. those that are open are rising this morning. very, very strong performance out of the u.s.

the dow at the 18,000 level. we priced the bulk of that yesterday into the european session. spain up over 1% this morning. we're going to take a break, but up next, russia takes a step towards junk. s&p says it is considering a downgrade as vladimir putin plans to bail out a bunch of lenders. more when we return on "on the move" in a moment. ♪

>> welcome back. you are watching "on the move." you are looking at the frobts of st. paul's cathedral. christopher wren being augmented by that tree. beautiful scenes on the other side of the river. st. paul's facing the river. it is kind of drizzling outside in london to be honest. doesn't feel that christmasy. fairly warm. a bit of drizzle. not exactly the white christmas that some were hoping for. standard and poor's has delivered a fresh blow to russia's currency and the crisis that the country is facing. it is warned of cutting the country's credit rating to junk. to find out what the details are, ryan chilcote is here. >> i brought the holiday cheer.

>> is that your christmas jumper? >> it is. i'm trying to assimilate into british society. the christmas jumper. the christmas sweater. it doesn't have crazy drawings on it but it is red. >> next year. >> ryan bringing some christmas cheer. >> step by step. > squash that christmas cheer. there is more than a 50% chance that russia will be downgraded to junk. you look at the yield now on russian bonds, north of 6%. funny thing was it was about 7.5% on the 10-year dollar denominated bonds. a week ago, it is slightly improved. you look at the ruble, does anybody care about this potential downgrade? the ruble has been strengthening. about 1% better off when it comes to the ruble. it is stronger than it was eight days ago when we got to 80

rubles to the dollar. we have seen this before. it looks like the investors have already acknowledged this and priced this in. now we're getting the confirmation from s&p s&p that russia is in a tough spot next year. they are certainly in a tough spot next year. we have seen plenty of businesses having a few problems as a result of that. i'm told cash is king in russia at the moment. how much cash you to make sure you can survive this deep freeze. some companies are prospering. >> one company we have been looking at today trades here in london. it is an exporter so they get paid in dollars. provides mpany that phosphates for growing crops. it held its ground, which is more than you can say for most russian stocks. but it is really popular among

the analysts. hey think stock is going to go up. jimmy rogers is on the board. he has been buying stakes in russian companies. e is interested in phosagro. he likes it. but i thought i would give you a little bit of a contrary -- >> you can gets loans out of russia. >> you can. particularly in the exporter space. >> let's talk to david, the chief investment officer at a bank in zurich. welcome back to the conversation, david. we have been talking about russia. how big of a problem is russia going to be for you next year in toverples the way you make your investment decisions? >> um, i don't think it is going to be a major problem unless obviously president putin decides to escalate

confrontation with the west. the rest of the story is actually well known. a potential downgrade has been priced in. i think russia is able and willing to pay its debt in 2015. certainly the sovereign and the qua sinch sovereign debt is not a risk. r -- there may be some defaults from smaller companies. >> two quick questions. first off, is there any u.s. stock you would by under any conditions going into 2015? a lot of people say no way. when you talk about increasing as an investor, increasing exposure to the eurozone stocks, you know, there has been so much talk about how the situation in company d uryous for

injuryous for companies in western europe. do you think this whole russia risk has been overstated? >> i don't think it has been overstated. there was a -- to some sectors in some companies whose ability to trade with russia is impaired and maybe impaired for the long-term but overall russia is basically the main link with russia to europe to phrase it differently is through the energy channel and i don't think either party has an interest in breaking that relationship. as a result of that, when choosing european exposure, one has to be mindful of the russian dimension 3. i think we have to be a little bit sanguine about this. >> you have a doctorate from oxford in modern russian

history. where does what we're seeing now in russia fit in? >> well, it fits in actually quite nicely in the sense that russia has this very -- let's say tense relationship with the rest of the world and it still hasn't found its place in a constructive relationship, especially with the west and i think it was on a good course until 2008 and then things started to unravel as mainly from my position as a result of the unwillingness of the leadership to actually let others participate, not just in the political game but also more in the economic game and obviously the case was a stark reminder that the current political ltte in russia is not willing to share the -- from the russian economy. that i think is the main stumbling block for russia actually becoming a better and more trusted partner in the

world again. >> there seems to be this assumption in moscow that the country can turn east and that asia will provide what europe and the united states have taken away. is that misplaced optimism or do you think that is a realistic prospect? >> i think obviously diversifying your trading partners is for any country a good idea. it depends on who you talk to this moscow and when you listen to what the former finance minister had to say. he didn't think turning to asia is going to be a solution. there is one purnt current issue about this. when the west installed financial sanctions on russia, that russia could turn east to raise necessary capital. this has not happened and this is not going to happen. so that relationship with the west remains the most crucial one for russia within the

foreseeable future. >> with it being christmas eve, give us your ruble forecast. where is the ruble going to end 2015? would you bite now isn't the it is at 54 to the dollar at the moment. >> no, i wouldn't buy the ruble. what is the reason for that? because this is one area are the russian government and the authorities can obviously intervene and act. if things go really bad, i don't think russia is going to default on its foreign debt like in 1998. it will if anything is needed through a restructuring and its domestic market. you'll be particularly hit. i don't think the ruble is a buy at this level. >> ok. we'll wrap this conversation up. david, it has been a great pleasure having you here this morning. thank you very much indeed for your time. ryan chilcote also joining us as

well. he'll be back. >> i will? >> ? n his christmas jumper looking very bright and festive. there are better jumpers in this news room i want to point out. this is as far as we're prepared to go when it comes to christmas jumpers. >> it is pretty conservative. >> "the interview" apparent sli back on. sony has reversed the decision and will release the movie that provoked the hacking of the company's computer system. we will tell you what led to this event and tell you where you can see this movie. there has been a lot of p.r. surrounding it, not all good but i suspect people will be curious. we're going to take a break and leave you with the pictures. see you in a moment. ♪

>> welcome back. you are watching "on the move." i'm guy johnson. so we have another plot twist. in a sudden turn of events, sony entertainment has announced it will now release its film "the interview" and will do so tomorrow in a number of theater ace cross america. here with the latest twist is caroline hyde. >> a coalition of the independent cinema owners actually petitioned sony. they went to them and sony is

thinking actually people want to show this film. we can make this work. they started sending this film out. he had to distribute it yesterday if you wanted to air it on christmas day, which had always been the plan until the four major chains said we don't want to run this. because of the attacks. at least 300 theater also show this film now. >> nothing says christmas day like seeing a film about killing the north korean leader. >> there is quite a few reviews that are not perhaps all that endearing to it. seth rogen is laughing. he said the people have spoken. freedom has prevailed. sony didn't give up. >> it was the cinemas that changed the course of events. a chain in austin, texas will be playing it. police will be surrounding the

location. other locations changed it. i think actually politics had an awful lot to do with it. president obama said look, we n't have it where some dictator in some place can start imposing censorship in the united states and actually have a listen at what we wished had happened at sony. >> sony is a private company, was worried about liability and this and that and the other. i wish they had spoke on the me first. not ld have told them do get into -- a pattern in which you're intimidated by these kinds of criminal attacks. >> cue green light to start thinking they can push ahead with this film. the fact that a comedy has

ecome an international geopolitical situation. will this roll out internationally? >> i think there is a huge amount of comedic value to the whole thing to be brutally honest. we'll leave that there. up next, one last chance for. the greek prime minister will be facing a crucial vote. we'll talk about it when we come back. ♪ . . ♪

make the best entertainment part of your holidays. catch all the hottest handpicked titles on the winter watchlist, only with xfinity from comcast. >> welcome back. you are watching "on the move." i am guy johnson in for jonathan ferro, who is not here. title sequence talks about francine lacqua, who is not your either. i'm the only one here. 30 minutes into the trading day, our markets shaping up? broadly higher. most markets are trading higher. it is very strong session in the u.s. yesterday.

the bulk of that has been priced into the european session. nevertheless, the positive momentum is there. a lot of markets not open today. for work.g up they are around europe, enjoying themselves, waiting for christmas. german bank is not open today. in terms of stocks that are on the move, let's take a look at what is going on. ryan chilcote is here with what we need to be watching. >> nevermind the fact that next to no one is trading today. there are stocks to pay attention today. smith and nephew on fire. er hase known that stryk been interested in for a wild. they make artificial hips and medical devices. that deal could close within weeks. to pay attention to is heidelberg cement. finally, ocado.

we have to do the online brochure. despite the fact that we know that guy johnson just got his ocado delivery and 11 truck yesterday. not enough people ordering their christmas turkeys. the stock has been up for the lsu days. it is very volatile. today, down a little bit. >> we will have more on heidelberg a little bit later on. we will talk more about the cement story with hans nichols. his covering the back story of the disposal. the me tell you about the other top stories. the dow jones industrial average closing about 18,000 and's yesterday. more thanis up 5.5% in the last five trading days. the united states had the strongest numbers since 2003. japan following suit as well. the nikkei closing up 2000 points. downhanghai, closed

around 2%. china is the world's second performing market last year. russian has taken a step closer to junk. nation'sit may cut the credit rating to below investment grade. it will allow them to bail out banks. s&p expects to conclude the review by mid-january. let's go from russia degrees. willsian prime minister have one last chance to push through his presidential candidate. failure on the 29th of december generaligger a snap election and change the dynamics of what is happening in greece.

alayna joins us. she is a former member of the parliament. of call foreader action. good morning. in terms of your expectations, your expectations are that mr. samaras will fail to get his political campaign through? >> yes, i'm afraid so. i'm afraid will not have votes to disconnect enough of those members of parliament. we will not have an elected president on the 29th of december, which will mean that on the 25th of january we will have national elections. >> who will win those elections? seems tomber one party

syriza. we have a radical left party that is only getting 4% of the electoral vote. it is not a pro-european party. syriza is a pro-european party. it is a european-left party. >> they would like to significantly renegotiate bt.ece's de after we saw the debt reorganization carried out by the debt office, we had a lot of that death being held by governments around europe. what are the chances that he reacteen able to debt restructuring? platform is about debt restructuring. his whole platform is about reducing as much as possible the official debt.

the markets to talk about the fact that there is a debt trap in greece and there is very little possibility in coming to terms for greece to be able to handle the payback of this amount within the maturity time that the debt is posed to be expected to finalize. i believe that there is going to be a serious conversation about debt restructuring and the question is will he do it right away as he wins, or will he do it a few months later or a few weeks later? i think he will do it a few weeks later. organized the public, the restructuring of greece's debt, it took a lot longer than that. what makes you think he can do it more quickly than petros was able to do? >> no, i'm saying that if he

gets elected, which he will get elected, and if he manages to form a government without a collusion of other parties, manages to rate a government of his own, he will be talking about debt restructuring, part of which there will be debt forgiveness involved and i will -- that will happen right away after he gets elected. he will start have this conversation. or he will do it a month or a month and a half later. the reason that the delay will be based on the fact that we are dependent on the bailout loan. we are still expecting to receive one of our dispersants. will wenicality is doeive the disbursement and another wave of austerity measures and then talk about debt restructuring, or will we talk about it before? that is a bit of a trap, a bit

of a technical trap that syriza is considering as we speak. think there will be a willing participant on the other side of the table for that debt restructuring? what we haven't seen this time around is any contagion from greece throwing it into the peripheral market. there may be a sense that in berlin that the rest of the eurozone can take a hard line this time. >> they have all taken hard lines since the first day of the greek crisis and the euro crisis. the question is whether or not it makes economic sense to keep inundating countries with so much debt. it is not just greece. it is all of the eurozone. the debt of the eurozone is also not sustainable, as the greek debt. if there is going to be a serious conversation about

restructuring greek debt, which i believe there should be, then there should be serious conversation about restructuring the european union debt, the eurozone debt, because it is not sustainable for the rest of the country. it is impossible to keep talking about debt went over 100% of the gdp of the major european production -- >> there is a bit of a wrinkle their, and that is that the ecb is about to launch a program of buying government debt around europe. if there is any possibility, if there is any credit risk associated with government debt in key members of the eurozone, then that program does not work. i am wondering whether or not that is going to limit the possibility of any discussion, consideration of restructuring these now government-backed debts of greece because it is going to make the ecb's job incredibly difficult if we associate credit risk with those

countries. if we turn it back to credit risk, the qe program does not work. is super program important and it needs to be in parallel with debt restructuring. if we do debt restructuring in coordination, there is no sovereign risk. qe needs to be coupled with debt restructuring and everybody is talking about that saying, wait. -- situation is as follows people talk about the extension of maturity of the sovereign debt. it is exactly the same thing. this is also debt restructuring. the question is whether you will pay your debt in 20 years or in 40 years. the point is of the next value of debt needs to be sustainable. that is one of the major conversations we have with the imf, and the imf is having with the european union. see you really cannot have you he without debt restructuring. >> you think the germans will go for that? honestly, do you really think --

>> it is a matter of survival. it is a matter of survival and common economic sense. it is a matter of how the situation will be discussed. it is not an issue of blackmailing or an issue of a one or zero-some game. it is an issue of consideration of all the member states coming into a common solution. there is no such thing as one country doing the other thing the countries don't want to do. >> do you think -- we haven't talked about the future of greece within the eu yet, and a read your note this morning and you made it very clear that any exit of greece from either the euros ernie -- the euro or eu is not realistic. you are 100% convinced of that, yeah? >> more than 100% convinced. possibilitysuch

even legally, and there is no such consideration. you have a great christmas. i think we will be talking again in the new year. we have got some fairly busy days coming up for the greek economy. >> merry christmas to you, to sue. >> thank you -- too. we will do corporate news whom he come back. heidelberg cement solidifies a deal. it is selling a business unit for $1.4 billion. ♪

>> 45 minutes past the hour. i am "on the move -- you are watching "on the move." i'm guy johnson. is caroline hyde. >> it is sending smith and nephew to the highest on record. top of the leaderboard when you look at stocks. is goinglike stryker to bid in a couple of weeks for smith and nephew. the stock is already up about 26% on the year. the reason is back in may we understood that stryker was looking around, potentially bidding. it sent the stock higher, but

the bid was not made you to tech rules. they had to go away -- not made due to u.k. tech rules. they had to go away. back in may, all the fashion was to leave tax inversions. it was about u.s. companies coming to the u.k. to make the most of a lower tax rate. that is not on the issue. too much political risk. the u.s. may be cutting down on these types of deals. now it is all about synergy. is about lowering the cost for hospitals. stryker, which makes surgical implants, can get together with smith and nephew. >> they have to do this because they have been on a series of acquisitions. a bunch of transactions which made a monster in this phase. >> medtronic and covidien did the same thing.

is about looking for synergy. there is no such thing as no bidding war. we will see if anyone else is up for it in the new year as well. >> thank you very much. let's talk cement. heidelberg cement has agreed to tell its north american building units. let's find out why this is happening. cementchols is our corresponded today. let's go to berlin. >> a cement and brick guy. we are going to talk about the exciting things. the interesting thing about this sale is that if it's not going to do in ipo. heidelberg had talked about andding the unit through ipo. they filed paperwork in september. they are proceeding on a separate action to try to sell the asset. a have agreed to do it. $1.4 billion is the price. it is too lone star capital, a texas-based private equity fund. you have an investment on the

u.k. and u.s. house recovery. this investment specializes in brick, cement, and roof tiles. this is about the potential housing market taking off in u.s.. we had the 5% revived gdp growth last quarter. we will see what that does to interest rates. the other side is that interest rates on the home own side could become more expensive. for heidelberg cement, gives them a little more cash. they will be doing battles with big cement makers, lafarge and wholesome. they have a planned merger earlier next year that will be a $40 billion merger. heidelberg cement will be a little more nimble in their battle with them if they shed some of their u.s. and u.k. assets. >> thank you very much indeed. hans nichols joining us from berlin on the cement story. when we get back, we will talk airbags. we will tell you what has been happening with takata.

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welcome back. your washing "on the move." i want to take you to the takata airbags scandal that has engulfed the company. it is announced that the president will step down.

takata's up -- chairman will step up. executives will give up a surrounding the scandal involving deaths involving the project. the president will give up 50% of his pay for four months. this is after the airbag recalls we have seen coming through. let's go from airbags to airbus. the company is developing a high-altitude, solar powered drone that can stay aloft indefinitely. check it out. in greek mythology, zephyr was the god of the light, westerly wind. zephyr glides through the skies. solar-powered

aircraft. it is very light and flies at high altitude. >> zephyr is more than a aircraft. high-altitude pseudo-satellite, or haps system, invented by airbus. >> we can do observation from miles away. we are so much closer to the use of a satellite. >> traditional satellites orbit hundreds of miles away from the earth's's surface. this effort operates at 65,000 feet and is geostationary. it can remain above a specific location for extended amounts of time. >> it is like having a cell phone tower in the sky. >>'s effort has the potential to disrupt many industries, from communications to whether to surveillance. needs tot off, zephyr stay in flight for as long as possible.

the key? the sun. the lightweight carbon body has flexible solar powells that power small electric indigents. keeping the engines running day and night is a challenge. >> there are very large wings. the batteries are charged during the day and when the sun sets, the aircraft is flying only on the batteries throughout the night. >> the lighter the aircraft, the longer the batteries last. engineers are constantly trying to make the zephyr lighter. always going to be disappointed with things that are too heavy. >> this is a flood structure from the zephyr aircraft. not only is this phenomenally light, it is also incredibly strong. we can make it even lighter. zephyr eight will have half the mass. this is a solar cell. we have once again improved them ved the mass again.

>> a ground crew can direct the flight path, but for the most part zephyr is autonomous. airbus will you zephyr as a low-cost the solution to fill the gaps where conventional communication satellites and aircraft struggle. zephyr can provide continuous local coverage for a fraction of the price. >> the target is below 1000 euros. around $1000 per flight hour. >>'s effort can help extend the internet to parts of the world where high cost has been a barrier to connectivity. platform, weaps can go from no capability to good communication capability with one platform. the development of new services. >> google and facebook have announced their own plans to use aircraft-like balloons and drones to spread the internet. airbus is not worried about competition.

are quite happy about the interest of google and facebook the cousin proves we were right to believe in this market. we would guess that they are where we are a couple of years ago when we discovered is more difficult to do this type of flying. >> we have gone through processes and test phases to know what works. >> for decades, we have considered outer space for our highest tech knowledge he endeavors but launching satellites and rockets is really expensive and really hard. when zephyr shows us is that our future may not be so much of in the stars, but just above the clouds. >> really, really cool technology. that wraps up "on the move." for this year. have a very, very good christmas if you are an avid "on the move" follower. if you like to follow "the

polls," there is more to come. we still have more to come if you want to join the conversation this christmas eve. you can follow me on twitter. ♪

>> a christmas twist in the sony hacking saga. "the interview" will be released. russian risk. s&p warns it may cut the country's credit rating to junk. takeover target. striker lines up and offer for smith and nephew. good morning. you are watching "the pulse." we are live from bloomberg's european headquarters in london. i'm guy johnson. sony has announced that it will