>> more pressure on putin. russia's ratings below grades in a decade. taking power in taking on europe. tsipras begins his first full day in office. ministers warned they will only work with him if he drops his demand. >> software lum -- slump. revenue shrinks. >> true grit. new york braces it self for more than two feet of snow as the storm moves across the north

either -- in northeastern u.s. and prepare for emergency. >> we have several hundred national guard and will be stationed in new york city and long island area primarily. ♪ >> welcome to "countdown." i am mark barton. >> i am anna edwards. >> i am manus cranny. >> a warm welcome. we will be speaking to the new ceo following the company's first-quarter results breaking right now. we will be speaking to the philips ceo for his first interview of the morning. >> and their earnings are coming fast. just into the bloomberg terminal. first quarter matched analysts'

estimates. upset by gains in other divisions. profit from so-called industrial operations fail 4.1% to four point 8 billion euros and that matched the average estimate of six analysts. while some divisions provide at the live performance, health care needs to step up is efforts and need a more comprehensive concept to return to historical margins longer-term. kaiser has been expanding fossil fuel extraction and energy supply operations since taking the reins at siemens in august 2013. let's get more details on the results which have just crossed at the bloomberg terminal. hans nichols is in berlin. what stands out? good old morning. >>. health care units had a

flight deck -- and the health care units had a slight decline but most see an increase. what we see and we expected this to get a sense of how costly the integration of dresser-rand that this is a box for rolls-royce, heavy in the u.s. on shell and oil how much it will cost to integrate. when it came out, they paid 6.8 billion euros. it looks like preliminary numbers. through the cost of profitability the margins are a little lower and dresser-rand. the decline of the oil price when they bought dresser-rand in september since that time, oil is down 48%. an indication of how much that big bet may not be paying off and as we see some continued trouble in their health care unit. mark? >> we had joe kaiser saying he had resampled his board.

what is behind that? >> it looks like they want to have more performance out of the health care unit but also they want to give that health care unit greater independence. we have seen them do this in the past and is a further step to make it i do know what to say right for p rechecking above more independent. -- for cherry picking but more independent. spinning that off. when we continue to dig down in the numbers who want to look at profitability and it looks i they are confirming third 20 15 outlook has been for 15% profitability. in terms of margin and revenue, they're expecting margins to be 10%-11% in line with what we expect. not a numbers, not great numbers. we see what extent it is costing and how lower revenue from that division and overall in the

energy business may be difficult. >> thanks, hans. hans nichols and berlin. the breaking news doesn't end there. >> numbers from phillips. very dramatic. q1 numbers coming from phillips which is the lighting and health care business of monks other things. no surprise the broader number before tax of seven hundred 43 million and line of what analysts were expecting. we heard all about the kind of guidance, a little bit ahead of the estimate of 735 million for the fourth quarter. away from the numbers let's look forward at the company said the ceo is saying 2014 has been a setback in their performance trajectory. they are one percentage off of their target of 2016. one percentage off of achieving their sales growth. they go on to stress that the

company things the long-term potential is there to recruit. -- recoup. we will get to the bottom of that 1% tracking away from target means for the business and we will talk about foreign-exchange exposure, the future of health care business and all of that when we speak to the ceo of philips. that is coming up in a few minutes. >> and three. let's go for the third in a row. novartis. one of the biggest stocks on the smi. they are raising the dividend by 6%. the top line news from novartis. a dividend of 2.6 swiss francs. their headline is a stable growth story. and portfolio transformation. the numbers that validate the statements. they said they have seen a solid margin expansion and margins rose by 1.2%. he margin markets, -- emerging

markets, pricing pressures and the u.s. from companies who buy the drugs from the drugmakers. let's take you through the core earnings. did he beat? -- did it beat? in terms of core operating, it was a ministry it dropped to -- it came in at $3.2 billion. the market was looking for something higher. guidance the year ahead. they were doing the adjustments and some other businesses. something over the portfolio over at novartis and that completed this month. the guidance for this year, core operating income for 2015. those are the headlines coming from novartis. bloomberg intelligence said it is the drug company with one of the deepest pockets.

their pockets are full of drugs at stage three. we will discuss all of that with the ceo a little bit later joe jimenez. >> junk is russia's credit rating. russia's expert right and chilcote is here. it was well flat. >> it was. you look at what happened with the ruble yesterday and that's extraordinary. it was not all priced in. quite extraordinary. concerns about sanctions and oil and by the end of the day the whole country was junk and the currency falls. i think we have to think about the ruble yesterday reached 70 two the dollar for a moment there. and the middle of december, we reached 80 rubles to the dollar. after that, we saw the ruble stabilize. and then, the narrative has been

some of the worst of the crisis is behind us at least when it comes to the currency. and now we have a new reality of, the ruble stabilize a little bit since it went down to 70 yesterday and now 67, 68. not a good place to be. it will be more inflation next year. one other thing i would like to talk about is stocks also. something that was so widely expect did did not appear to be price in there either is russia's largest lender has more outlets than any other bank in the world. its stock fell 13%. one of a handful of a russian stocks traded in the u.s. and a good way to gauge what might happen in the open of moscow. 13% down is extraordinary. >> greece is saying the russian complex as well. what about the foreign

ministers? they are meeting this week a you mentioned yesterday the ability or desire to raise sanction levels. >> that is right. the mitigating factor has been in alarm by some countries that the sanctions have already done quite a lot especially with the recognition it is coupled with what is going on with the oil price. i have not heard anyone really shedding any tears over the downgrade. we talked to friends'-- france's finance ministers and they are more accommodating when it comes to russia. yet, the finance minister pretty much blamed all of russia's problems on russia. have a listen. >> russia is angry to difficult to be. is responsible for the most part. his sanctions exist in russia because of admissible attitude in ukraine. i do not know of consequences russia will draw from the

ratings cut but if they draw discussion that would be a good thing. >> i do not think anybody can take what what happened on thursday at the meeting. what i will point out is with had this conversation before sanctions and sanctions. economic sanctions would be a pretty big step. expanding the list at some of the new countries of talked about it to include more of the separatist and more russian individuals it seems like that would be a pretty good face-saving maneuver for the eu after this point. they have to do something. >> and the oil price? >> not helpful. brent is down. wti is down. we had a guest saying that there's no investment in oil oil could go to $200. one of those random comments. i tweeted after that. and the gas price could also go to $25.

you know, inventory in the u.s. is what you have to watch really high. highest since 1982. we will get the number tomorrow. analysts think inventory in the u.s. increase and there's a lot of oil. >> thank you. >> we will speak to the ravens company that rated russia to junk. hea of s&p to talk about russiad and also greece and what would seem and as at 7:40 a.m. u.s. time -- u.k. time. chris the first full day in office for greece's new leaders. alexis tsipras calls anti-austerity within hours of his victory. none of the members of the eurozone are calculating their response to the victory. for more, let's get to athens predict guy johnson. standing by. how is it looking? >> it is going to be an

interesting few days i suspect. it was fascinating to watch mr. tsipras sworn in. no bible involved. he had to explain to the archbishop why he was not going to do it. that set an interesting town, rather unorthodox tone quite literally for the new greek prime minister. she has a big day ahead of him and we expect a cabinet to be announced. we were watching last night for the first response is and we heard from sapin talking about his view from paris. and with had mr. juncker inviting him to brussels and others have invited him to paris as well. both of those gentlemen giving a fairly warm welcome to the arrival of mr. tsipras. and mr. hollande talking about not only russia but greece. he said after the election, france a europe need to treat greece with a more respectful

tone. >> there is a lot of suffering in greece. this is the suffering they expressed. it is not a defiance against the eurozone because the new government has won majority by saying they wish to stay in the eurozone. it is not against the euro but to find growth again. >> they want to remain in the eurozone and it will be tested over the next few days as we begin to get into the process of negotiations. time is incredibly short here to get a more money into the greek economy in terms of the bailout funds available. they have been on hold since september. the process needs to gain momentum very quickly. while the tone from brussels sounds positive and the town from paris sounds positive, the northern capital, that tone is

different and greece needs to deliver what it promised and that is the message that needs to be heard loud and clear. again, we heard from another or of capital representatives -- a number of capital representatives yesterday. the belgian minister making it clear that is what needs to happen now. >> i expect from them as they will work with us to strengthen the greek economy which is crucial, of course. we fully understand a lot of work has to be done and we stand ready to support it down. membership of the euro means you comply to all we have agreed with. on a databases -- -- on that basis -- >> that was not the minister. let's not worry. we start to get the cabinets announced. a finance minister. mr. tsipras has indicated he

will go with 4 super ministries and dismantles on the architecture here in terms of the way the government has been structured. 4 main ministries and the one people want to know is who will be finance minister? atoms get that, we will bring it to you. >> thank you for that round up. chris a quick look at some of the other stories we are following. a turnaround plan and microsoft. sales in software licensing is it down. revenue fell to $10 billion. curbed by flops in china and japan and one of the you -- stronger u.s. dollar. >> a strong storm of the east coast of the u.s. and is expected to don't to be the snow and -- dump 2 feet of snow in the u.s. in new york.

>> ok, those are your main headlines and stories of the day. join us on twitter. what are your thoughts -- the snowstorm in new york? i am @manuscranny. >> we was big to be chief executive of phillips -- we will speak to the chief executive of phillips and stay tuned for that. ♪

>> welcome to "countdown." let's talk to phillips about their numbers. we will speak to the ceo, frans van houten. thank you for joining us. how is the performance of the business doing? you are sad and you are 1% behind achieving yourselves growth -- you said it you are 1% behind achieving your sales growth, tell us a more. >> our 2014 results in my view were disappointing. we had internal issues and also the outside world where the growth is slowing down in china and russia and emerging markets was a lower currency. and we are going to unprecedented transformation of philips separating out the lighting division and making it

a self standing company. that is a lot of movement. it leads us to wanting to inform our shareholders we are currently tracking above one percentage point below our growth rate crawford ability. -- profitability. we look at the future very positively. yesterday obama said he want to go to a health care system that is much more focused on quality and output at a lower cost. that is exactly our strategy. we are looked -- where focusing on partnering with hospitals. we want another six big deals in the fourth quarter. those are the highlights. we are on the right path but we have a lot of work to do as we move forward in creating 2 standalone companies with a great future. >> let's talk about the medical part. some analysts said you will be measured to deliver to hospitals.

what defines success for you and striking some of the long-term deals with hospitals? >> obviously the more you can sign up, the better it is. you will see consolidation in the hospital market. hospitals struggle to drive productivity in this complex world of more patients, in an aging population. what we offer to hospitals is to actually have definitive diagnoses help with minimally invasive treatment where you do not to cut open the patient and why we want to acquire the smart catheters. and help transition patients out of expensive hospital beds and to their homes where they can be supported through tailored health. and we are the market leader as well as home care.

it is a great strategy. i think we are really on the move to become strong in that area. in 2015 with a lot to do to improve quality in separate the company and offset some of the headwinds such as in russia and other markets which are turbulent. >> you talked about selling the lighting business. dutch newspapers were reporting that kkr may make a joint bid. can you confirm what bids you have had or is an ipo in your desired path? >> where there is a rumor, there is a sign of interest and that is always good. i noted that. there is some confusion and the market but caused we are running a process to standalone our automotive business. that is the component side of

lighting and that process is going well. you several interests and expect to close a deal in the first half of 2015. separately, we said we will make phillips lighting solutions the application side of lighting, standalone and take 12-18 months to do that. as you can imagine, lighting was the start of phillips and there's a lot of relationships inside of the companies that we have to undo. as we progress with the separation of phillips lighting solutions later in the year we will come with a market update and that would be the right time to comment on ipo versus other ways of giving lighting access to capital markets. i am happy to see people are already lining up to express their statements of interest. >> has anybody bid for lighting

solutions? >> no, no, this is just people gossiping while this is a great business and i agree. [laughter] >> you mention some the headwinds. tell me about the european part of the business. last time we taught you said you thought we needed more integration across the european union. do you worry about what we see in greece politically and what that might do to europe? >> i was in davos last week and i could speak with many politicians and economists and other folks and colleagues from other businesses and i think the share of worry around the long list a geopolitical issues whether russia or the middle east or the vote in greece are upcoming vote in the u k, the world is not short of challenges.

we should keep our i on the prize. europe is 500 million people and should really close but to create one very strong region. like the united states and china is. and that is the way forward and less focus on making europe more competitive and continue with further integration. in the contest it is good what mario draghi has done to build a stronger europe and we need to put -- and let's make this work rather than standing there whining on the sideline. >> does european business worry about grexit and greece leaving the eurozone? >> in you know, we can worry about a lot of things but we should focus on driving the business. may an upside is that i can share is that the orders for health care, we are edging up in the fourth quarter.

some european countries have started to buy a again. >> ok. >> a grexit as not the forefront of my. >> thank you very much. the phillips ceo. ♪

>> you are watching "countdown." let's check on the current exchange market. dollar strength. rank of america and citigroup are saying the european central bank and bank of japan to will ease monetary policy and make a late the fed -- and may allay the fee. -- fed. we have a survey. tomorrow, you get a statement.

6% said july. 30% said september. year end forecast for the dollar, that 10 year high on the dollar. your end forecast is rising. year end forecast is just below 97 for the dollar index. in the middle of the month. the trend is your friend as they say. the dollar is up. also sterling is going to be very much and focus. dollars/sterling as we go to the gdp, the flashing number. the health of the u.k. economy a looking for a number of 0.6%. a statement yesterday that productivity is rising. inflation expectations coming on mored. a nice little bit of lift

through the air. as ryan was saying, you should keep an eye on the ruvell. liquidity comes in. what you have is the dollar up and the ruble down by 7.4%. yesterday, just as small. be careful on liquidity even though it is 7:30 and you will see momentum after s&p downgraded and "junk" is the new word and that is the first time in 10 years. we will talk about that through the day. three currencies for you to watch. >> the top headlines. russians credit rating is being cut to jump by s&p -- junk by s&p. it is the same as indonesia and bulgaria. and the output for russia isn't that a. russia has been hit by the collapse of the price of oil and

impact of western sanctions over involvement in ukraine. for more on that story, will be joined by s&p at 7:40 a.m. u.k. time. three russians to be charged by espionage from the united states. the three allegedly stole secrets tied to the new york stock exchange as economic sanctions on russia. one of the three men appeared in manhattan on said he was a flight risk and ordered him held without bail. investigation started after the the arrest of 10 russian agents. they had been under deep cover assignment and some lived in the u.s. for as long as a decade. alexis tsipras has been sworn in as greece's prime minister. after providing a coalition between the conservative party and both parties are strongly opposed to the conditions attached to greece's eu bailout.

finance ministers are meeting in brussels with one miss to negotiate -- with a willingness to negotiate as long as tsipras drops a demand of a right to down. they said europe is ready to work with greece. u.s. president barack obama will travel to saudi arabia to mourn the death of king abdulla. he went on a trip to india. he died last week after the age of 90 and will be a company by a 29 member delegation including secretary of state john kerry at fbi director. king abdulla was a key u.s. ally. and a snowstorm of historic proportions of moving up the east coast of the united states. the national weather service predicts more than two feet of snow could fall in new york and

the wind could reach 60 miles per hour. the governors of new york and pennsylvania and massachusetts have declared emergencies and public transportation has been suspended and flights have been canceled. >> breaking news from erickson. the equipment maker released a mixed results. the growth margin above estimates. that was again an estimate of 34.7%. the sales number a little weaker that was estimated. net commerce he contributed positively -- they see their mobile broadband will remain slow and the short term. we will keep across that story and other companies this morning. let's move on to microsoft though world's biggest software maker has seen shares fall following the release of his latest results. what has investors worried? here is caroline hyde.

what is the worry given total sales that beat estimates? >> when you are pulling in $26.5 billion sales are up 8% why are shares down by more than 4%? there are concerns particularly with the slack with the release. you are talking about an earning of the u.s. dollar strength it is going to hurt making a prediction in a multinational company and the u.s. strong dollar continues to hurt their overall sales going forward and matt and weaknesses they highlighted -- and macro weaknesses they highlighted. they have anti-monopoly investigations of over in china and offices raided and the government is not really looking

to buy from u.s. suppliers. they had a number of one off. windows xp was coming to an end and no longer supported by my first out. some businesses had to renew their licenses and that helped. -- no longer supported by microsoft. overwrought trying to -- overall, trying to move the company and how it works. no longer going to be a money spending software licensing and upgrading a usually pay a licensing fee. now it is software as a service which you do not get quite so much bang for your buck. it is hard to get that initially. >> he is an interesting character. i've heard you talk about him. there he is. i am going to guide you to the cloud. the numbers and the cloud are attractive.

>> there are series bright spots we have to remember with microsoft cloud and wealth or 5% of offices were knowing and moving -- and we have 45% of offices three knowing and moving to the cloud. >> what about microsoft? >> $5.5 billion per year is what the rate will be for cloud but half of your commercial licensing big businesses used to be. cloud is nowhere near where the this is unit is very it is going to double. you have xbox selling records. xbox one doing very well. even the lumia phones. surface pro 3 is outselling. the consumer is moving to office as well. office is now 365. an apple product. you do not have to how microsoft

hardware to install microsoft software and that is a big change. this is a company that has not lost his entrepreneurial spot and is bringing in windows 10 and will be cheaper. there's one to be a tylenol voice activated assistance that will help salespeople at work asked -- and work asked what calls you have made and tablets. even the hologram. it is a company that is inspirational of what it is doing. at the moment, the big money spender is licensing and it is coming to an end. >> caroline hyde. >> the red army liberated auschwitz where nazis murdered 6 million jews who died in the holocaust. israel held a memorial and decided to digitize all of the documents and photos and videos from the era as elliott gotkine

reports, not without challenges. >> face to face for the first time. her father was a russian army soldier who left liberate her mother from auschwitz. -- who helped liberate her mother from auschwitz. >> they asked him to take care and they made him [indiscernible] to say thank you because he took care of them. two days before he died, he asked me, it was his which that i would find out what happened. >> how do you feel about meeting the daughter of the man that saved your mother? >> but now [indiscernible] >> connecting survivors is one of the outcomes of the ambitious digitization program using state

of the art technology, it stores every item he can find. he has always been an archive and museum. since it began digitizing the archives almost 20 years ago, it is had to act like a big data company. the holocaust memorial has overloaded 100 million documents and 200,000 hours of video. i enough to -- it is enough to fill about a one billion books. the man behind the scheme is to put it on line. >> to give accessibility to the new generations that doesn't speak another language. >> to help make the material more accessible, he has developed proprietary search tools and let israel he startups test it to the benefit of both.

it is taken 17 years for the digitization program to get this far in helped to complete the job in another five. chris elliott gotkine. >> you can join the conversation on twitter and let us know what you are talking about this morning as we head into tuesday's business day. >> coming up -- less than 100 days before the u.k. goes to the polls. we will have that discussion. stay tuned for that. ♪

>> u.k. gdp out later and will consumer spending be enough to ramp up growth? capital management stephen, happy new year. let's put the election and contacts. a few nontraditional parties in the u.k. that might grab a few seats. are we looking at a changing political landscape across europe as we approach elections here in portugal italy, and

spain? >> that is a big conclusion that the markets are too fixated, the central bank being able to put lids on fire. the politics is much more challenging. there they are winning a majority in greece. coming from and insurgents to a storm -- an insurgence to a storm. can it happen and they u.k.? it is harder to crack. it creates all kinds of dynamics and my favorite party might let someone get it and it's complicated. all of us voters will have multiple choices. if you look at the polls, the u.k. is holding in perhaps a better than people had thought. the tories had always hoped as we got nearer to the moment of truth that the u.k. ship would

start to fade. it seems to be holding. i think it is entirely different campaign. >> careful not to worry too much directly of greece into u.k., on austerity, many voices speaking out against austerity for lack of a better word getting that one of the parliament for it is not clear is it where the political voices of anti-austerity and where they will coalesce in which party they will coalesce around. >> a couple of ministers have come out to say that the greek shows you if you campaign on anti-austerity and quite boldly you can catch the mood of the moment. ed miliband is in a quandary. he wants to be seen as sensible and the voters can trust him.

he was for just different message. it is a difficult campaign for all of the leaders and will come down to their skills. >> with had a growth -- we have had a growth in one of the repercussions is the currency. that relationship with europe is very strong, angel's export market. how much of a burden is the currency going to be on a forward-looking u.k. economy? >> it will keep inflation under control and continue to undershooting inflation and hence perversely keeping the bank of england and their box and have no rate increases this year and possibly next year. trying to answer your question means the housing boom will continue. the one thing that. it is the higher interest rates in i do not think we will get it for considerable amount of time. pre-election or postelection calm consumer boon can feed on

itself and we can't contain with 2.5% growth into next year. >> a contentious discussion you want to talk about. the end of the u.s. dollar bull market. put it in perspective. it is measured against the major currencies. is it an all time high today going back to january 2 thousand five? where does this argument stemmed from? >> here we are at record levels for the dollar for considerable period of time. if you look at sentiment levels against the euro, record negative levels. the future positioning's are showing extreme levels which is a point of serious caution. the situation in greece is interesting. we have a new dynamic. the markets and commentators are trying to tell us, a little bit more left than a traditional

left-wing party and perhaps we are being serious a little bit more extended. the reality is that cannot happen. i am not even sure they understand. i think it is a complete change in the path. that means germany and the paths of brussels have a stark choice -- do they let a serious negotiation take place? does anybody want to do it can see in style? -- kensians tyle? >> i am coming to a point. the point is i do not think of this negotiation can succeed. germany will front out of greece and greece will go out of the euro. in the short run, that may be a bit bumpy. as a medium to the long term, it

is more comforting for holders of euro assets. should degrees and possibly one or two others have been in the euro? >> should be there or shouldn't be there a you are centralizing with a doesn't matter. >> it makes it harder. >> you said holding your assets, we should not be fearful. it doesn't matter. >> i think it is a benefit. it makes the euro harder like a deutsche mark. >> a pandora's box. >> on a longer-term, we have to see how the politics plays out. the ecb and brussels and others will be able to contain it and greece will be the sacrificial lamb like cyprus was last year. nobody expected that to happen. >> spain, ireland, and the radicals may come fourth.

>> if greece is shown the door, the consequences of their folly will be shown. u.s. economy is overplayed as well. the interest rate differential will start to narrow. german interest rates are as low as they can be. you can not -- you can see a benefit. all that can happen is you is growth will start to tell off. shale is turning into a disaster. all of the employment growth has come from texas, south dakota in the shale producing area. >> stephen isaacs. >> coming up -- our favorite stories including a live of debt -- including a live look at the united states. ♪

>> welcome to "countdown." let's give you a quick look on digital today. i thought we would focus on the state of emergency new york, new jersey, rhode island. business week pages tell you if you are traveling in and around the new york area, metro-north

will run additional trays and governor christie state of emergency in new jersey. no plans to resume training service it before thursday. connecticut, a state of emergency and a travel ban beginning tonight. those are some of the things in need to know your logistics. >> eight reasons it is not just a blizzard. a view columnist, politics and blizzards come together. it is a well-known popular event . he goes through population density and all types of policies set in the 1890's in new york and still having an impact. >> the russian maria sharapova has blown through the australian open and is in the semifinals. she will play her fellow russian catarina and the semifinals. andy murray will play the local

heartthrob. good luck, andy. >> "countdown" continues and we will be to the company that downgraded russia to junk. ♪ . .

>> cut to jump. more pressure on couldn't - on putin. russia's rating below investment grade for the first time in a decade. >> taking power and taking on europe. alexis tsipras begins his first full day in office. finance ministers warn he will -- they will only work with him if he drops his demand for a debt write-down. >> and the turnaround plan for microsoft runs into problems. revenue from commercial licenses shrink as consumers turn to the cloud. >> and true grit. new york braces itself for more than two feet of snow as the

storm moves across the northeastern u.s. state governors prepare for an emergency. >> we have several hundred national guard called out and will be stationed in new york city and the long island area primarily. ♪ >> hello and welcome to "countdown." i am mark barton. >> i am anna edwards. >> and i am manus cranny. on the headline, it is a beat on the estimates. let's speak to the chief executive. it to have you with us this morning. i am seeing some of the comments that you made on the numbers. you are making some comments about sales. my understanding is you have the strongest pipeline. at the near point of where it

begins to make dollars, phase three. where do we need to focus on investors, your company, for delivery in 2015? >> for 2015, we have two very important new drugs that will be blockbusters for novartis. the first is a new drugs for chronic heart failure, called lcz. our phase three trial showed that it had a 20% reduction in cardiovascular death and a 20% reduction in hospitalization for those patients that took it. we have filed now in europe and the u.s. and we expect to be selling this new drug towards the back half of 2015. this could be a multibillion-dollar drug for novartis. the second is a drug called present this -- cozentis. this is something that will be a very strong and important new

drug for novartis. again, probably over $1 billion. >> let's talk about the big issue for people in switzerland. huge volatility in the foreign exchange markets. will you change your hedging strategy as a result? >> obviously the snb action does have an impact on novartis. again, we are a very large multinational company. we happen to be headquartered in switzerland. because of that action and the 15% appreciation or 12%-15% of the swiss franc, we are identifying ways to reduce cost. we are also looking at costs across the company. the underlying growth of this company is really what is important. we are focusing on constant currency growth in 2015 and we will adjust to the currency situation over time. i do not want to overreact and i

do not want to jeopardize those two new launches. we will have to invest in them. they have peaks sales potential that is substantial for the company. >> when will we know about the cost revision? if that is happening, when can we assume that we will get an indication from you in terms of what you are going to do in terms of jobs and restructuring? and give me a dollar value in what you might need to restructure. >> it is too early to comment on that. we are taking a hard look now. we do not have a timetable, but because we have already started the year in 2015, we are taking that look right now. we are looking at procurement and ways that we spend. it is important to notice that, last year, we formed a group called novartis business services within the company. this was a consolidation of our back offices for all of our divisions. this is one way that we will be able to reduce our costs in

2015, not just in switzerland, but around the world. >> you are talking about transforming the business. you grabbed the headlines last year. i have the contact lens and the chip at home. we are talking about sexy pharma tech. when is that really going to deliver dollars? and what kind of quantum can pharma tech make? do not give me the five years? i have seen that in an interview before. >> when you look at the google lens in licensing that, i have said publicly that that is in early development. this is something that is going to take a number of years. the investment is not huge. you are not going to see a big impact on the bottom line of novartis. we are a $60 billion company.

we generate a lot of cash. we are investing. it will probably be five years before you see an impact on that technology coming together with biology just because that is how long it takes. in the short-term, we have blockbusters like lcz and cozentis, which will drive this company in the next few years. >> i see you raised the dividend. well done. good for the shareholders. a nice 6% bump for the shareholder. you have castrated the market is getting hot for acquisitions. do you want to be in that acquisition market or do you want to focus on organic growth? if i said to you around the board table, what is the consensus? >> we are focused on driving our organic growth. if you think back to april of last year, we announced a transformative deal with gsk and eli lilly.

that is now done. the gsk deal is that we will acquire their oncology business for about $14.5 billion. we will tell them our vaccines business and form a joint venture on over-the-counter drugs. this deal will close in the first half of 2015. we have our hands full in terms of getting that integration and the integration -- and de-integration completed. that does not mean we are out of the mn day game -- m&a game. strengthen pipelines of those divisions. it is going to be a combination of organic and acquisitions. you probably will not see us do multibillion-dollar transactions. we do not need it. we now have the portfolio that we need to drive organically

with bolt on acquisitions. >> let me talk about pricing pressure. in the united states of america, everybody has pressure with these buying agents. you are just about to launch a new drug in the u.s. are you going to join in the game? are you going to crowd market share on a new drug by smacking down in terms of the payouts to the buyers -- how are you going to play this entry into the u.s.? or are you going to feed the frenzy that is diminishing margins? >> what is happening in the u.s. from a pricing standpoint is that if you are not highly differentiated in the drug that you are introducing you will be facing some significant pricing pressure. our respiratory franchise, we have filed for approval. it will still be overly late 2015 before we are able to launch. in fact, we are looking for a

partner because we are not sure we are going to make that investment given the pricing situation that has occurred in respiratory if you take our new heart failure drug, we do not have a lot of competition in heart failure. we are going to be launching that drug both in the u.s. and europe. cardiovascular drugs are priced at a much lower level than some of the specialty drugs. really, what is important is that we focus on generating breakthrough innovations. if you are generating breakthrough innovations, the payers across the world will pay for that innovation. a drug that reduces hospitalization by 20%. right now, that cost almost $100 billion a year for heart failure patients. we have a drug that can reduce that by 20%. that is a huge value for the health system. >> let's hope that that is picked up by pretty much every health care system in the world. joe gimenez -- jimenez, great to

have you with us. >> in the ceo interviews do not end there. let's go to another one. full-year revenue of 636 billion pounds -- million pounds. profit narrowly ahead of estimates. crest nicholson executive stephen stone joins us. thank you for joining us today on bloomberg. >> good morning. >> let's start with the last year. profit beating, sales beating. some up -- sum up 2014 for me. >> it was a strong year not only for crest nicholson, but all the homebuilders. the government recognize that one way to create jobs was to stimulate the housing market. as well as economic growth, we saw some incentives particularly help to buy.

let's not forget, we ipo'ed back in february of 2013. we hit our ipo target about 18 months ahead of target. a very strong year for the company. >> have we seen the peak of the u.k. housing market? demand for approval fell the most in the fourth quarter. are the measures implemented by the bank of england in june and july of last year, have they worked in taking the froth off the housing market? have we seen the peak? >> i have been saying that we need house prices to rise in line or a little bit ahead of earnings. i think the actions the governor took last year took the froth out of the market and that was needed because housing is becoming unaffordable once again. if we take a long-term market

what is good for the housing industry? it is jobs and access to mortgages. what we're seeing is unemployment falling and we are seeing banks offering very good future rates. probably some of the lowest i have seen throughout my career. what we needed was lower sales price inflation making homes more affordable, and, for the first time, earnings growth. or the first time, i think it is a more sustainable housing market. >> i saw one forecasted it that prices could actually decline on a nationwide basis in 2015. should we be that pessimistic? >> we certainly have not seen any evidence of that. what is widely recognized is that, as a country, we simply have not been building enough homes. housing starts this year are at 130,000 compared to what

everybody believes we need 200,000 plus. there is a long way to go to recognize the demand imbalance. we see no signs of house prices falling. what we are seeing is house price inflation at single-digit levels. >> as we approach the election which half will best deliver on this need to build over 200,000 homes a year to meet demand? >> if we look at perhaps the three main parties, they are all convinced and recognize that we need to build more homes in this country. they have all set targets of at least 200,000. the spread is 200,000 to 300,000 homes. i think they are committed. what we really want is a government that is not going to temper with the planning system

and one that is going to create economic growth. we have gdp figures out and while they might come back a touch, it is still very positive. i am looking for the parties, in these next two months, to talk about individual taxation. that is a factor that has an impact on buying a home. also, the party that is going to create the economic growth going forward, hopefully without increasing the country's debt burden. i am looking forward to a positive election debate in the next few months. maybe it will be a little longer this year than i would have liked. >> the duty measures announced by george osborne recently in the autumn statement. did they hit the nail on the head? >> i think it is the right thing

to do. we have been wanting this to happen for many years. the system simply was not the right taxation for the country. it created barriers as you moved different price ranges. 98% of our buyers last year would have benefited had the stamp duty been in place. that just shows how fair it is. what it enables people to do is to either put that money back into the economy or reduce their deposit. i think it is a very positive factor that the chancellor has done. >> give us an idea of the uncertainty surrounding the election. we talked about the parties and what they need to do to achieve this housing supply that is necessary for the country. if we get another phone parliament -- hung parliament, what is that going to do to the housing market for after may 7?

>> i have given that a lot of thought. history tells -- i have been through a lot of elections in my career. what we know is that, generally, there is a slight pause in the housing market for a month or two before the actual election because of the uncertainty. this time, we have a fixed election period. we have not experienced that previously. i suspect it will heat up as the political rhetoric comes forward. if there is a hung parliament maybe the status quo is not a bad place because the country is doing pretty well at the moment. when you consider europe and other parts of the world. i am a believer that status quo is going to be ok for the housing market. >> thanks. we will see you soon. hope to speak to you again before and after the elections. stephen stone, the chief executive of crest nicholson. full-year sales and pretax

profit narrowly beating analyst estimates today. >> russia's credit rating has been cut to junk by s&p putting it below investment grade for the first time in a decade. it is now rated bb+. s&p also said the outlook for russia is negative. we will be speaking to the ratings company that downgraded russia later this morning. morris cramer will be joining us live to talk about russia greece, and the european central bank. that will be at 7:40 u.k. time. >> let's look at some of the other stories this morning. alexis tsipras has been sworn in as the new prime minister. both parties are strongly opposed to the conditions attached to greece's eu bailout. mocscovici urged patience and

said europe was what it -- was ready to work with greece. >> of course, the european union is willing to continue to help the country staying on its feet help the country creating jobs and growth, help them repay their debt. >> a massive snowstorm is making its way up the east coast of the united states. it is expected to dump about two feet of snow on new york city. a state of emergency will be declared today. public transport is suspended and thousands of flights in and out of the region's airports have been canceled. >> next, as we have been hearing, russia was downgraded by s&p. we will catch up on russia after the break. ♪

>> welcome back. cut to junk. that is the verdict on russia's credit rating. the first time in over a decade that the country has been below investment grade. >> the ruble has been strengthening, which makes you wonder if the central bank has been intervening. they have 379 billion dollars of

reserves according to the latest figures. there were some people out there saying that they expect the ruble to go beyond 70 rubles to the dollar. we saw that yesterday for a couple of moments on the back of the s&p downgrade, on the back of sanctions concern and the defining price of oil. a great issue for the russians because everyone got used to the 60 to 65 range after the volatility from the middle of december. now we have a new normal. >> the my sex was down about .5%. -- the micex was down about .5%. >> stocks down a little bit this morning. oil not down as much. everybody says what you have to watch is not just when and sent but when you have moody's or someone else. that would trigger a lot of automatic selloff for technical

buyers. >> i love the calls on this. $200 on oil. it could happen. >> it could happen. he did not give any timeframe. in the fullness of time -- i tweeted that we could see $25 oil as well. the president of goldman sachs said we could see 20 -- $30 oil. everyone has their views. the fundamentals are that u.s. production is very high, the highest it has been in more than 30 years. inventories, we will get that number tomorrow. the expectation is they are rising. a lot of oil on the market. nobody cutting supply just yet. >> thank you very much. >> 7:23 -- >> let's talk about greece. >> the first full day in office for alexis tsipras. forging an anti-austerity

alliance. what is on the agenda today? >> he was sworn in last night. interestingly enough, he did not do that over a bible, which breaks tradition. the greek orthodox church gives their take on that. but he decided not to go that way. he explained it to the archbishop. his approach really has everyone talking, including those in brussels where the eurogroup met yesterday trying to come to terms with what happens next. the arrival of mr. tsipras and his anti-bailout coalition that he is putting together. last night, they were talking -- the head of the eurogroup was talking about this orthodox or lack of an orthodox strategy. >> they are difficult problems. they will not go away in a short time. it will take tough measures from new governments.

their approach may be different. we will talk about how they want to address these problems. within the boundaries of what we have agreed to in the eurozone. >> it will be interesting to know exactly what the negotiating strategy looks like what kind of content there has been. the greek press saying the next finance minister we may get that confirmed later. none of this is confirmed. it is just coming out of the greek dress at the moment. maybe the back channel has already been established. already an understanding of what exactly the greeks now want. we will wait and we will watch. we will wait for confirmation from the government later and then we will get some flesh on the bones in terms of the negotiating strategy and the greek debt. back to you. >> speak to you later.

>> the reminder that we will speaking -- we will be speaking with the ratings company that downgraded russia to junk later this morning. that is mark's conversation. he will be joining us live to talk about russia, greece, and the european central bank. that is at 7:40 london time. >> a bit of company news. bp is raising employee pay as crude prices continue to impact the economy. more than 30,000 dismissals have been announced across the industry as the company has slas hed budgets. huawei will surpass 100 million units this year. that is according to a company statement. the portion of sales from high-end devices will also rise more than 30%, up from 18%. huawei is expanding its lineup

to better compete againstx ioami and lenovo. we will take a short break. stay with us. ♪

>> welcome back to "countdown." time to check on the foreign exchange markets. are the russian banks intervening? this is the movement on dollar-ruble. the dollar traveling higher. the ruble off. we are just getting used to the 60's. hello. we are on our way higher. central bank has $379 billion. this is the ruble strengthening. this is the dollar falling ever so slightly on the back of the cut to junk by s&p. moritz kraemer will discuss the

implications very shortly. today is going to be a flash reading for gdp growth semester product -- gross domestic product in the united kingdom. the monetary policy committee says production growth has finally improved. inflation expectations will not become unmoored. dollar sterling belts -- bounce. that is what you make of the monetary policy comments in terms of where we are. the market is assuming rate hikes will come a little bit later. we also want to keep an eye on the dollar. you are looking at a 10-year high. i am showing you the overall momentum on the dollar. it is traveling higher. the dollar gets a gift from draghi.

i will put that on my twitter account. what does that mean? it means they will add fuel. that could allay the concerns that the fed hiking is going to slow down or create liquidity vacuum. we are looking at the highest level since 2003. bloomberg survey of 53 economists, when will the fed hike? two-day meeting begins today. 45% say june of this year. 6% say july. 30% say september. it is getting further and further away in terms of when the fed might ask. the consensus estimate on our poll of where the dollar might be 96.6, up from 94.00. sterling is looking strong. and the ruble, if you could call it 1% retracement a reprieve.

>> these are the bloomberg top headlines. russia's credit rating has been cut to junk by s&p, putting it below investment grade for the first time in a decade. it is now rated bb+, the same as indonesia and bulgaria. s&p also said the outlook for russia is negative. they have been hit with the impact of western sanctions over its involvement in ukraine. for more on that story, we will be joined by the s&p head of sovereign ratings. three russians have been charged with espionage by the united states. the three allegedly sought secrets tied to the new york stock exchange and u.s. economic sections on russia. one of the three men appeared before a federal judge in manhattan, who said he was held without bail. the u.s. investigation started after the arrest of 10 russian agents in 2010. the agents had been on a deep cover assignment. some had lived in the u.s. as long as a decade. alexis tsipras has been sworn in

as greece's new prime minister after forming a coalition government between the syriza pa r and the conservative independent greeksty party. both are opposed to the conditions attached to the eu bailout. brussels expressed a willingness to negotiate those conditions as long as tsipras drops his demands for a write-down of greece's debt. moscovici urged patience and said that europe was willing to work with greece. >> of course, the union and the commission is willing to continue and is ready to help greece to be a country staying on its feet, help greece to be a country creating job growth help greece to pay its debt.

>> gdp figures in the u.k. out later. the stimulus, lots to talk about. thanks for joining us today. finance ministers from the eurozone signaled their willingness to meet with tsipras as long as the prime minister drops his demand for a get right down -- a debt writedown. how will a compromise be reached? >> this is something of a game of poker, really. it is a question of who is going to blink first. are people going to overplay their hands? there is a danger of a train crash. there could be some sort of deal . if you listen to what tsipras said in the election campaign you have to think that the train crash is more likely. he is going to have to back down massively if he is going to get some sort of deal. on the other side, although

merkel and others in the eurozone can compromise a bit at some point, if tsipras is too tough, they will say, sorry, no deal. >> it comes down to which of the values of the eurozone that we keep hearing about matter the most to germans and others. does it matter whether you hold the euro together? does it matter that everybody pays their way? looking for a new formula through that is going to be key. >> i think it is incredibly difficult. it is not so much the direct costs of whatever deal he might do with greece. greece is a small economy. that is not really the problem. the problem is the principal that is established. if they give way to greece, it is going to be difficult to keep the other weaker members in the eurozone in line. >> are you saying this could ignite a broader crisis across the eurozone?

>> absolutely. my own view is that if greece were to leave, i do not think they would be that much immediate contagion because greece would leave in an atmosphere of chaos. the usual thing that happens is people like you, programs like this say it is disaster, shots of murder and mayhem in athens. other countries think, we do not want to end up like that. the real issue of contagion will come later on, 6, 8, 9 months down the line. and the question will be, is it actually working? if greece gets some economic relief and it looks as though it is working, that is when you get the contagion. >> in the more short-term, when you draw on what happened in greece and say we are going to see more splintering across the european spectrum, whether that is spain or italy or the u.k. or elsewhere is that what we look ahead to hear? -- here?

>> i think it is. the real danger is that that feeds eurosceptic views in other countries. she has got to worry about her own eurosceptic party, pressing her from the right. they will kick up a real stink if she makes big concessions. >> we have u.k. gdp data within two hours. election approaching within a few months. the economy growing less slowly in the fourth quarter than the third. >> i think that is what is likely. i have to say it is very marginal. it is going to be .6% on the quarter, down from .7%. frankly, these minor changes do not me very much. you could easily find that that difference was revised away.

>> the coalition government, the conservative party referring constantly to their long-term economic plan. you can go to their website and look at their policy for this election. it is all about the long-term economic plan. is that going to be a successful message? has the recovery been good enough, been felt well enough for enough -- by enough people for that to be a good message? >> it has certainly been a strong recovery compared to what most people expected. i also made this error. i did not anticipate the economy being quite as strong as it has been. i think that is a positive message for the government. the problem is that, until very recently, it was not getting through to people's pockets. incomes were not rising. that has started to change. with a few more months of that we think we will see lower

prices, negative inflation somewhat. that is going to help the message. it is not only about where we are now. it is also about what is coming up in the future. what the government is saying is we are going to stick to this plan. >> what does that mean for the bank of england? does that push back a possible interest rate hike as many are now saying until 2016? >> it could do. as far as inflation is concerned we think there will be negative inflation. it is difficult to see the bank of england raising interest rates. by the end of the year, if inflation starts to pick up a bit, wage rises increase, at

some stage the bank will stop reacting to the current position. i think there is a chance before the end of this year. it may well be delayed until next year. >> he was making a plea for the status quo, suggesting we did not need to see too much political change. is there -- where does the business community sit on this election? do you think they are torn? on the one hand, they like the policies that the conservative party presents. on the other hand, they do not look favorably on a vote on eu membership. an interesting conundrum for the business community. >> i think that summary is basically right. there are people in the business community who are critical of the eu. we do not hear so much from them on the whole because the large companies and the large business organizations take the opposite view.

in general, business does not like uncertainty. the idea we have a major vote coming up which might produce a result they would like, they do not like that, running up to that vote, things are uncertain. let's thank you so much for coming. stay with us on bloomberg. we will be speaking to the ratings company that downgraded russia to junk. moritz kraemer will be joining us live next to talk about russia greece, and the ecb. do not go away. ♪

>> time for today's bar chart. where can you buy gasoline for 0 .002 dollars a gallon? yes, it now costs a fifth of a penny to buy a gallon of gasoline in venezuela. that is based on black-market currency rates. let's put it another way. you can get 482 gallons with just one dollar. that is enough to drive a chevrolet silverado to one end of venezuela's caribbean coast to the other six times. it has been two decades since the venezuelan government last lifted state and local prices. that is on a concern that a move could spark row test similar to the ones that swept across the

nation in 1989, when the government raise prices. in the interim, a string of currency devaluations has pushed the cost, in dollar terms to levels that would seem improbable to other consumers in other parts of the world. down to 1/5 of one cent. it is incredible. you better hurry if you want to -- to venezuela to fill up your tank, because president maduro told lawmakers he is considering raising prices as the collapse in oil exports pushes the country to the brink of default. imagine that. 1/5 of a u.s. cent to buy a gallon of gasoline. incredible. russia's credit rating was cut to junk by standard & poor's. the nation is below investment grade for the first time in a decade. the downgrade underscores the country's dramatic deterioration as policymakers struggle to

boost growth. for more let's welcome in moritz kraemer, standard & poor's head of sovereign ratings. it morning to you again. thanks for joining us today on "countdown." >> good morning, mark. >> in response to your rating cut, the finance minister said the rating company's move showed excessive pessimism. are you excessively pessimistic about russia's prospects? >> it is interesting that you say that because if you look at our own forecast of growth in russia this year, 2015, and year it is considerably less pessimistic than the government the central bank forecasted themselves. i do not think it is based on unwarranted pessimism. russia, like the other 130 sovereigns that we rate we stick to transparent criteria.

i think we spelled out why the downgrade happened. the economic deterioration and the prospect is only one of those reasons. >> how can russia contain this currency crisis the worst since 1998? they are preparing this anti-crisis program that is estimated to cost 1.4 trillion rubles. will it work? what will work? >> the great strength that russia still has is it has a strong government and balance sheet of the country. although the latter has been eroding quite a bit. the position of the government has been eroding. we estimate that the government is in debt to the rest of the world. in relative terms, there are some buffers that have been built up during the oil boom years. what we are feeling is that a buildout of assets from the

rainy day fund if he was like are probably rather puny compared to some of the challenges that might lay ahead. >> what are your big challenges? what is the biggest hurdle that you see russia faces? >> one of the key challenges that russia, just like other oil-exporting countries have, to actually diversify the economy to make it more resilient and competitive, to be able to deal with those shocks. these shots are quite extraordinary that russia is facing. not only have we seen almost unprecedented deterioration in the oil prices we also have a situation where the economy is further weakened by sanctions from the west and counter sanctions from russia is self. -- itself.

all of it is driving down growth and driving up inflation. the russians central bank has acted quite vigorously. they floated the exchange rate in december. it is almost twice the level it was a year ago. extreme weakening will reduce the disposal of -- the disposable incomes of russian households and stress the finances. the russian central bank has been trying to stem this through increasing the interest rates on the ruble to try to prevent further capital outflows to attract funds into the country. at the same time, it is really stifling credit. this will create great trouble for some of the indebted companies and households. in a nutshell, we see that this is a very cold environment -- difficult environment.

getting out of this is all the more complicated now. >> it is only a matter of time before russia imposes capital controls. >> we do not think this is necessarily going to happen. we explicitly make reference to it. if this were to occur, we would probably judge it as a further loss of monetary flexibility and monetary policy control over the monetary affairs of the country. our best case is not currently that the capital controls will impose. we think that the measures of the central bank are not powerless. the interest rates are very high. real rates are high. we think that this might just work out to prevent further capital outflows, which have been at record highs last year. private sector entities have been channeling funds out of russia like they have not done

in many years. almost three times as much as the previous years. we think the interest rate policy will be effective. with the ruble where it is right now, it does not have to come to that. if we have capital controls this would be a further sign that monetary fund's ability is becoming ever less pronounced. >> i would like to get your view on greece in light of the election. we did speak before the election. in light of the election and the finance minister saying they are willing to speak to greece, to syriza, if they drop their needing a debt write-down, how is a compromise going to be reached on greece's massive debt burden?

>> i cannot tell you what the compromise is going to be. they have not started negotiating yet. i do not think syriza has laid out its expectations or demands. we have seen quite some strong reactions. i would not say this is a purely german position on the debt write-down. it is sometimes portrayed like that. my assessment is that is shared by a large number of european countries, if not the majority. what is important to keep in mind is that a debt write-down would not do very much for greece in the short term. what we are seeing currently is that, in the coming years, there is no debt coming from the european union and there is an interest rate holiday until the early 2020's. currently, greece is not paying anything to the european partners. you can cut down the headline rate, theoretically. politically, it does not look likely at all.

even if you do so, it would not save the greek government anything in the short term. this may not actually be, when it comes to the true negotiation phase, the most important element on the table. however, it is true that, in the campaign in particular serena -- syriza has been selling this argument a lot. it might be difficult to go back to their constituency and say we reached an agreement on this but there will not be a debt write-down from the official creditors. it remains to be seen. it is not the only game in town. as negotiations go, you have several issues. tsipras and syriza are unknown entities in terms of how they will negotiate. both parties have to feel their way into this. what we're seeing right now is putting out the first approximation to try to impress the other side. >> we have a minute and i would

love to hear your view very quickly. in light of the ecb announcements last week -- we chatted before the announcements and you did not want to speculate. we now know the details. is it going to be enough to lift the economy to fight off deflation? >> i will tell you what i told you last week. the ecb cannot do this alone. the ecb can provide the foundation and i think they have. there is the question about the burden sharing which has discussed quite a bit among commentators. this is not how a unified monetary policy should work, but i think there have been other positive surprises. i give the easy be big hand for delivering the groundwork, but it is important that the government's have not got a free pass. they need to act as well as request see you soon. moritz kraemer, chief ratings officer at standard & poor's. >> "on the move" is next.

live pictures of snow falling in new york. that is disrupting daily life there. also, keep an eye out for u.k. gdp. that hits at 9:30 u.k. time to -- time. ♪

>> welcome to "on the move." it is time for your morning brief. russia's credit rating is downgraded to below investment grade for the first time in a decade. the ruble it's a six-week low. the euro compromise, the greek elected prime minister begins his first full day in office and the finance ministers said he are ready to support greece. and the election countdown, in 90 minutes time we get growth figures for the u.k. economy.

we are 100 days away from the u.k. election and today the economy starts the political agenda. euro stocks 50, futures off by 1/10 of 1%. manus cranny. >> i was looking forward to say day eight and a big brother kind of voice but it is not, with a seven day rise in equity markets we are seeing a small drawdown in these equities. we have euphoria in terms of knowing the election results. now you know what the complexion of the administration is that you have to do business with. they stand there with their open arms they are all there ready to talk to