nor announced $3.9 billion of write-downs as commodity prices plunge. we will talk to the ceo and just a couple minutes. we will bring you an exclusive interview with the man on top of the biggest cosmetics company. we hear from the l'oreal ceo a little bit later. i am looking at futures markets a little bit higher. dax futures up by 50 points. we could be ending the week on a high. let's check with caroline hyde for the open. >> just 20 seconds into market trade. it's green across the board. ftse 100 similarly trading up 4/10 of a percent. yesterday it was all about the relief of the cease-fire. hope there could be meeting -- moves made driving equities higher.

the imf saying they will be behind ukraine for another four years in terms of an assistance program. maybe some hints germany will give a little bit to greece. barclays says we have to put it in perspective. the cease-fire is only the first step on a likely long bumpy road towards a resolution of the conflict. it is all about gdp data. we are getting eurozone data. germany well ahead. that is why we are seeing the dax up 3/10 of a percent. let's have a look at what happened to the euro. they seem to be liking that germany is accelerating. france is not so pretty. it didn't come into where

expectations were. the euro up three straight days now. three days of gains. the longest winning streak we have seen in two months. let's have a quick check on some of the stocks to watch. l'oreal higher after it beat expectations. the rolls-royce engine maker profits down, sales down, shares down two and a half percent. 2015 is not going to get better, because iron ore is half the price of last year. >> thank you very much. one company we will be watching is the minor anglo american. the stock getting a pop at the open, and i am pleased to say we are joined by the ceo. he joins us right now. great to have you with us this morning. on the plus side, you beat the market estimates. $3.9 billion of write-downs.

let's talk about some of the assets of the business first. you are trying to sell some of these assets. you are ceiling -- seeing many buyers. which ones are the easier ones to dispose of? >> we have seen interest in the assets we talked about. we have identified assets we don't think are part of the portfolio longer-term. we had interest. we will see if we can convert that into real value for shareholders, so it's a tough market, but at the same time the asset of our -- are of interest. >> we have seen so many headlines. commodity markets are still under pressure. which commodity do you expect to recover? >> i would think russia's metals , given we have reduced stocks

-- are in a position to recover but it will rely on sales in europe and other places to give it a further kick. base metals i think are still very strong. the copper movement is more about speculation than fundamentals. i think it is a function of over despite -- oversupply. >> i want to pick up on your point. there has been a lot of debate about what is striving commodities lower. you are pulling it out of the ground. as you look across the commodities space, is it a demand story or a supply story for you? >> i think it is a supply story. it has put pressure. it will be one or two years at least before we see any risk. we have to make sure we are ready and able to handle those conditions.

the mining operations are quite different with some access to supply. supply will be under pressure. we have steady demand. we think demand will be quicker. the same for precious metals -- in particular platinum. demand is muted, but supply is over done. not so much in base metals and precious metals. >> how do you manage supply? it exacerbates the push lower. i am going to ask a question. should there be an opec for ryan -- 4-iron or? should you say, we need to cut supplies and industry? >> no. in my view the market is the market. our job is to be competitive

and that's what we are doing. we look at the market we don't think it is -- the market carefully. we don't think it makes sense to throughout volumes and diminish the property. that will did -- damage the ability to supply in the long-term. in those areas if the resource is not making money, we will stop mining it. we will stop putting it on the market. we think it is important to make returns to shareholders. keep it on the ground and make sure you are preserving shareholder value in the long term. a very different philosophy and one i think that will stand us in good stead. >> just talking about return for shareholders. a lot of questions about how you might be able to maintain the dividend. is that something you are thinking about?

>> our earnings were reported down by 25%. if i take into account platinum supply, our earnings were down. we have made significant improvements across the portfolio. we are making good cost reductions. it is 1.8 billion dollars lower than people were forecasting. that is a function of the good work they have done. we are in good shape. still a lot of work to be done. it's a tough environment. we are going to make sure when the industry comes out of the current tough period we are going to be in good shape. >> is that the end of the write-downs? >> certainly in the current environment. the adjustments we made were well within market range. it was based on prices. our costs have been lower than anticipated.

we expected in our case but you never know which way the market is going to go. we have done all the right things. >> you were quoted last year as being open to a takeover. are you still open to that? have you had anyone approach you? >> i did not say we were open to a takeover. we are doing all the right things. we are not particularly interested in doing anything else. we are into creating the best mining company, and we are on track. we think the best mining company in the world. >> it was not mean that misquoted quoted. it was another operator. has anyone knocked at the door? >> no. >> thank you very much. earnings beating this morning. let's get the investment

perspective. jerry, you listened to all of that. it's a tough environment, not just for energy majors but for these guys as well. >> it is probably a harder job than most companies. these guys have to manage their costs aggressively because they don't know what the revenue line is going to look like. i think there is still a supply problem, but if you look at the cash flow, they start to look very good if they are in the competitively powerful position. i think the word is dispersion. >> how important is it. i huge iron ore project in brazil came online at exactly the wrong time. if you look at the value right now, how long do you have to hold these companies for? >> i think you have to be very

patient, not just because there is a supply problem. they have the largest copper supply in mongolia that they haven't started mining, but these stocks are naturally volatile. a little it he is not what equity investors are looking for. they are looking for the opposite. it is going to be quite a while. >> a final question. if i gave you the choice, energy companies or the minors? >> at the moment minors. energy companies are still adjusting to the lower oil prices. >> jerry is going to stay right here with us. up next, the german chancellor meets for the first time with the great prime minister as he pushes for a contract. is there a compromise on the horizon? futures were higher. equities in london falling by a half of 1%.

getting a nice lift as gdp figures come in in germany, crushing estimates growing .7%. france pretty much does nothing, growing 0.1%. we will bring you the numbers from italy after the break. stay with us.

>> live from the city of london.

we haven't really talked about greece yet. here it is. they will have to continue the bailout. joining us for more is hans nichols. a weeks worth of meetings. you can guarantee they will agree on something. what have they agreed on besides that? >> they have these technical advisors working with greek counterparts on figuring out what the numbers are, what the need maybe if they extend the current bailout program. angela merkel and see this -- alexis see this had their first meeting. merkel seemed willing to work with her new partner. have a listen. >> we gave each other a friendly

greeting. i said from my side there is full range to work together. now we will take a look at the different points we will find common ground. it was very friendly. >> here is what we're looking at in terms of a potential climbdown from both sides. the germans would not insist the entire bailout program would be implemented. remember, the finance minister said he can abide by 70% of that. the greeks seem to be backing away saying as a percentage of gdp it can come down from 4% but it will stay in positive territory. they want to run current account surpluses. we will see the hard work continue on monday. there is another euro finance meeting here in brussels. >> you will be a busy man.

joining us is the head of derivatives strategy. a meeting monday. talk of the compromise. we are here before. we are up. we are down. what are we going to see? >> i think the result is likely to be some version of the package. every politician has the interest of their electorate at heart. we want to do the best for the most people. the greek government thinks that is going to be best achieved by expanding the role of government in society. they need the role of governments to support that. if they decide to allow the banking system to exit the euro it is going to be difficult to expand the role because they won't have the funding. >> contagion has been thrown about. this time around, where could the contagion come from?

>> iraq my brain around this. i think a lot -- i racked my brain on it. there is probably not a particularly strong interconnectedness the twin the greek banking system and the rest of the international banking system. the one area there may be concern and we just don't know is whether there is a lot of standing derivative contracts. we just don't know whether that is sitting in an important financial center, and perhaps they are on the losing side. i have a feeling those positions have come down significantly, given we are five years into the crisis. >> the best case scenario is you get some sort of extension at the end of the month. where am i looking to get some value? >> the important thing is if you are investing in europe it is likely to be volatile. you still have russia and ukraine, which perhaps is a truth that might last, but what you do have is more than 20%

just lying in the euro, which is helping exporters. you have a very large qe program that is going to force people who would prefer to buy bonds to push out and buy equities. when you look at it it is about 16 times. you have to bring down the risk of equities because they are volatile. you invest in the ones that pay dividends anyway. we saw in the u.s. the quality companies outperformed. even that is not enough. you need to add option overlays. particularly the insurance companies, where this is almost a requirement. you need to have overlays that limit downsize risk. you can still pay a 4% to 5% yield. there is a variety around the

market. basically, it is high quality consistent evidence with an option overlays to increase portfolio risk. >> for the guys at home they just want to buy straight equities. do they head to germany for that? >> these exist in funds, so it is possible for everyone to invest in these products. if you're looking at your investment, your money is the sweet spot. it is the companies that don't need a weak currency but could benefit from it. if you had to choose a country index that most reflected that it is probably the dax. forward price to earnings is only about 14 times. it looks like there is good value. >> how much upside for the rest of the year? >> for europe? i think from current levels you can probably see 10% or 20%. >> thank you very much for

joining us. i have a special one for you. we will have an exclusive conversation with the ceo of one of the largest cosmetic maker. more on why l'oreal should give a nod to mario draghi when "on the move" returns. stay tuned for that. ♪

>> welcome back. happy friday. l'oreal's quarterly sales topped

estimates. it says it is confident of 2015. the stock it's a nice lift. in paris caroline has been speaking exclusively to the chairman and ceo of the company. here is what he said about currency volatility. >> it is going to be very helpful. i am pretty happy about that. for 10 years it was negative. for 10 years european companies have suffered from an overvalued euro. now the euro is below its level when it was introduced. that is very good news. it will help, but it will also help the translation worldwide.

it is very good news and we will make the most of it. >> does that mean you might lower prices of your product? >> know, we will strengthen the support to our brands. -- no we will strengthen the support of our brands. it will help. >> wouldn't there be currency volatility in emerging markets. tell us the picture and the outlook for asia. >> in terms of currency, the situation is stabilized now. after last year when we saw some instability in different parts of the world. now the situation seems to be more stable with one exception which is russia where the ruble decreased a lot.

we think this should be pretty stable for next year and pretty ok for us. we want in 2015 to continue a stronger market conquest we have been starting 20 years ago where we double every 15 years. now we keep increasing. it is 41% of our sales and growing. >> are bloomberg reporter joins us now from paris. we will have more throughout the morning. a fantastic interview. the beneficiary of the weaker euro. what else did he have to say? >> l'oreal is the world's

biggest cosmetic maker. a very important company. the ceo told me he is optimistic 2015 will be a better year than 2014. in 2014 there was weak demand from north america, china, and europe. he is saying these will be stronger coming in 2015. he is also very big in the french market. he is saying the french economic reforms from the government are going in the right direction and he will keep trying to gain market share. he made a lot of egg acquisitions -- big acquisitions . that will also contribute to growth. 2015 should be a better year for the cosmetic industry.

>> we will hear from you through the morning. next we are going to talk brent. oil trading a little lower. the blackrock managing director. stay tuned for that. ♪

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with a guaranteed 2 hour appointment window and a 97% on-time rate xfinity is perfect for people with a busy life. >> welcome back, good morning. 30 minutes into the trading session. trading higher across the board. the ftse 100 up, the dax up by 0.5%. it looks like we are moving toward peace in eastern ukraine. and then greece, it will be a long month before we get a deal. great equity markets opening up later, but the euro up by .25% today. that is on course for a third straight week of gains. that is the longest weekly winning strake -- streak since

march 2013. the big stocks to watch, with caroline hyde. >> focusing on some big losers talking oil, up by 13% bang on the nose. all to do with petrobas. they worked with them and some projects they have. they say the contracts will the longer be concluded in the timeframe or the commercial terms previously agreed. more than $1 billion will be scrapped off of their backlog in the next financial. they say we are trying to work with petrobras to find a mutually agreeable conclusion. analysts are cutting this stock and we know who is behind media set, none other than the former italian prime minister and his

body owns the shares and they are selling a stake, worth 392 million euros. selling it as they are looking to strengthen the financial structure. they're reducing their stake and they will only house about one third overall. i will end on a high note. it's talk about bulletin -- boliden talking zinc and copper. fourth quarter estimates beat analyst -- fourth-quarter profits beat analyst estimates. >> you and on a high note, i will take it back to the low note crude, 60% of its value gone in six months. american oil production jumped to a record 9.2 3 million barrels a day last week -- 9.23

million barrels a day last week. let's look at the interview with the global chief strategist of blackrock concentrated pain, widespread gain, optimistic and slightly bullish, tell me why. >> you can't have a $1.75 trillion transfer without there being a benefit to all economies. a simplistic point. consumers consume and spenders spend. >> but things break. >> there are casualties all over. we just heard about german oil services there are broken bodies all over the playing field but the price has been way higher than the marginal break even. when we say about it, we are talking about pain first, again

next. -- gain next. >> i was reading your bar chart talking about concentrated employment in the united states and a big one is credit, high yield. energy issued a junk debt. you can see it there. can they ride this out? >> i think they can, we just had our first energy high-yield deal come to the market about a week ago. they have hedged a lot of the production for this year. number two, the banks that provide the bridging are taking a look through the current price. number three, they are furiously cutting their capital expenditure. number four, they have to keep pumping. they have to see some cash flow.

the longer you have the lower price, the greater the pain he comes. i think -- becomes. i think they can sweat it out for a year. >> everyone becomes a financial expert and now the big conversation is the recount. it doesn't catch up, doesn't mean anything anymore? >> what you get is this weekly stream of news. recaps on wednesday, production numbers on friday, so that is the bull-bear day. horizontal drilling is three times more productive than vertical. this is a disruptive technology story. a lot of the rates that are idled are the higher cost, less productive wells. the stream of building output is overwhelming. >> we have seen this movie three

times now since the end of the second world war. >> yeah. >> in the 1980's just after the nieman brothers collapsed what is a difference between now and the 80's in terms of production capacity? >> there is far less. in 9086, it was 15 plus. -- in 1986, it was 15 plus. the supply is cutting at the margin. it probably doesn't take as long as a period of time as it would have done in the 80's. >> when you look at the 80's, was there an investment opportunity you wish you had made but at the time you were too scared? >> >> there are so many i remember from the 80's and none of which i would repeat. [laughter] supply and demand drives things

down and supply and demand creates recovery but there are casualties along the way. there are also beneficiaries. if you're in japan or india this is wonderful. if you are selling low and goods through gas stations, you have people coming in paying $50 to fill their tank and having seven dollars left over and buying doritos and soft drinks. diabetes might be on the rise. [laughter] that is a little bit facetious, but it creates winners. it tends to create winners in the lower income areas of consumption because that is for whom the lower price means the most. >> as you look at the market right now and investment opportunities, where are they? >> geographically, it is happening. the last time we were together we talked about europe.

there is no doubt there is a following wind. we are seeing some money start to come back into some of the beaten up commodities. i think there is still a strong story about japan from the point of view of monetary policy and investor preference. sanctity wise it is a bit more mixed. but we -- the financial yields are really hurting them hard. >> i asked my last guest whether they would prefer energy companies or miners. he said miners. if i'm home right now and don't have access to the bloomberg terminal and i want advice for my pension, is it worth putting the big oil majors in the portfolio and sitting on them for a decade? >> i think it is, oil is unlike some of the metals in that it is

a daily consumable. where is metals are more links to capital investment cycles. if you can work out that in a years time, the price is in the 60's for brent on a consistent basis, oil majors are selling at priced books way below the historic average. they are going to have some rough waters, you have to be a contrarian to do it now because you will have that nights between here and there but fundamental value is very low. >> after the break, we will talk about a year of easing as sweden joins the round of central banks that have eased monetary policy this year. there are a lot of them. not everyone will be a winner. we will talk about that in two minutes. greek stocks are 10 minutes into the open. up by 7.5%, government bond

yields, a three-year low. 244 basis points lower. just a couple of days ago, the yield on that note was through 24%. back in two. ♪

>> welcome back, good morning. happy friday morning. let's bring up the german equity market. we go through 11,000 points for

the first time ever. we come back a little bit but we are up 0.7%. three headwinds i can think of, the compromise with central greece, a truce in eastern ukraine, but three, the ecb and monetary policy has been giving european equities a lift. january the best stocks of the year since 1989. it is officially the year of easing. not just the ecb. yesterday sweden joined the club cutting rates and announcing the bond buying program. this could just be the beginning for the next bank -- for the ricks bank. >> we talked about it in december and said in the next meeting we needed a system in place and to be ready to buy bonds if we found that necessary, what we have done

this time is gone a little bit beyond that thing if you consider the amount of bonds out there. we are also clearly stated that if we need to do more, we're also ready to do a lot more if we have to to get the rate up. >> still with us is the blackrock global chief investment strategist. even more easing, denmark expected to respond as well. speaking to him, all intentions are, this could get bigger. >> what seems to be happening is a race to the bottom. it is interesting this time around the cause, how far down can you go negative rates before you have gone too far. and the danes really surprised yesterday when people expected them to go from -75 to -100.

you have liquidity traps on one side and the bank for the other side saying we are worried about deflation. >> the interesting thing to me is i put that question to him, what is the floor for sweden. he wouldn't give me answer answer. he said there is no floor. obviously, we cannot go to -5%. what is the risk here? i put that question to him as well? what do we summon the seas for? >> the more you have negative rates the more you have pressure on the financial system profitability. as was stated yesterday when they talk about the 50 basis point bank rate, he said we think the banks are strong enough in capital terms to be able to cut that if we needed to. i think we are seeing the swiss and the danes in the aftermath

or in defense of their flaws, cutting rates materially. i think, two people sit on cash at home or do they make decisions based on massive amounts of leverage because of negative rates? in the long, long run, there is miss pricing or a great fear because in the short short-term is a concern of nominal growth. >> you and i spent the last minutes talking about equity markets on the back of commodities, but what i want to talk about is the chase for inflation and the huge bond market rally. we been talking about a bubble in the equity market. not so much core government bonds. >> the short answer is prices are distorted, particularly in short duration bonds. realistically, because there is a shortage of bonds relative to demand.

they need price incentive, whether it be insurers rolling over portfolios or angst accumulating capital -- banks regulating capital or pension fund holders although a lot of those are on hold. there is a surprise the cousin europe and america the deficits are lower -- there is a surprise because in europe and america, the deficits are lower. so will the ecb have to go lower? >> they are not the only central bank buying european debt. this is going to get very difficult. the big question for you -- >> a duration drought is the way to put it. >> when i look at the germany bond and see a 1%, what are the

consequences of 81% on a german 30 year? >> one has no idea. [laughter] you have no idea, really, of what a nominal growth you are discounting. a long life government bond should answer a yield similar to the trend growth of the country. if it is way below, which it is now then that is artificial. how long it takes to revert to me, who knows? if it is right -- that is to say the nominal long-term growth of germany is 1%, there is a lot of pain to calm at the end of the day in risky assets. >> if you sit on that to maturity fine. aren't there going to be big losses as well? >> what we are seeing, the people -- who knows if they are,

you've could say yes or no and revisit it. what is definitely happening is there is huge competition for duration. that is pushing people into illiquid fixed income strategies. are you confident that illiquidity is something you can bear? >> and can you get out when you need to? >> that is a good way of putting it. if you are buying this stuff, by definition you're holding it until maturity. >> fantastic insight, thank you for joining us. a quick check at the equity markets. the dax goes from 11,000 points for the first time ever, german gdp crushing estimates this morning. over double the estimate of 0.3%. the good news for german equities keeps coming through. more about this after the break.

>> welcome back, it has been a busy few days. greece has taken the spotlight for much of this week. we caught up with the terra firma founder and chairman guy hans who says though greek leadership is becoming more reasonable, an exit is still on the table. >> you even heard the greek

prime minister almost say, i don't feel this is what we should do, but i have got no choice because it is a democracy. therefore i have no choice. it is a clever way of arguing. you can blame it all on democracy. we have to be unreasonable because we were elected to be unreasonable. >> how unreasonable do you think he will get? >> more and more by the day. >> you think it will not be a problem? >> i think there could well be a greek exit. >> when you state reasonable, you mean rational or reasonable vis-a-vis enter exit? >> i don't think he wants an exit. the vast when of greeks are happier with europe than the vast majority of brits. what they don't like is austerity and they want to effectively have their cake and eat it. they want the protection and

support but don't want to pay for it. the germans have reached a point with a feel they need to put a line in the sand. a lot of northern europeans generally feel that way. i think for the good of europe there probably is a need for the line in the sand. otherwise the risk is, if every country says if the greeks can get away with it, so can we. when you look at the irish and the spanish to go for austerity programs, and what it has meant to growth rates in those countries -- they deserve their reward, they worked for it and why should the greeks be given a free pass when the irish and the spanish have taken just as much pain? >> guy johnson joins us now i got to listen to a lot of the interview, fascinating stuff. we had a lot to say. >> he talked a lot about

bouncing back from the mi putting his own money to work. whether or not that is a response that he struggles to raise money because he is in the penalty box with emi, he is not convinced, he says he just needs to get back to basics. he is working on deals that are 10 years plus, he says he will be around for a long time. most private equity guys are out of the business by 60 and he sees himself working to 70. he says he has plenty miles to go yet. he talked about what is happening with the u.k. political story and he talks about a way that maybe the labour party and finance need to find common ground. he understands why labour party feel so burned by finance. when they were in power, they fell incredibly burnt they

invested so much in the city in the idea it was a huge driver for the economy and they got so burned, there needs to be some sort of -- he talked a lot about by the equity and a lot about terra firma and the british political story, he is invested in all of them. >> that is almost it for "on the move" but the dax going through 11,000 points for the first time ever. up by 6/10 of 1%, we have come back a little bit. the euro is actually up by .25%. it is the longest weekly winning streak for the single currency since march 2014. it has been a while. if you want to continue the conversation, i am on twitter. it is a very happy friday.

as we cut to break, i will leave you with the beautiful city of london. i am going outside. why is it gray, the sun was out 30 minutes ago? have a great weekend. ♪

>> compromise on greece, maybe. bailout talks in brussels as germany shows signs of softening. >> bouncing back. how guy hands recovered. we will bring you an exclusive interview. >> and, worth it. in another bloomberg exclusive, we speak to l'oreal's ceo to find out why the strong dollar is good for the world's biggest cosmetic maker. good morning. you are watching "the pulse."