that was sergio ermotti the ceo of ubs. in a recent note by deutsche bank analysts they remain cautious on wealth managers. why? they expect the recovery and transaction margins to remain muted. they have preference for fixed income capital market exposure by the likes of barclays. >> did you get any more indication on the litigation questions? i know there was an additional provision for litigation, but ubs is trying to put this specific question mark behind them. how are they doing in those attempts? >> litigation has always been an issue for ubs. they settled some of the high profile cases like the libor case. we have got credit suisse, deutsche bank now settling with the department of justice in the u.s. ubs still needs to do that. however the total tally for ubs is expected to be a lot lower. this quarter, for example, they only set aside 170 million swiss francs. the total tally for litigation provisions in the u.s. is 3.1 billion swiss francs, compared to ubs. we are still waiting for that issue, we are still waiting

still, sergio ermotti was optimistic.t important thing for me is to see that our clients are optimistic. there is some positive momentum, particularly with u.s. investors and clients. i think this could be a turning point, but it's very important to see the new administration plansuts in action their and to give our investors even more confidence. prosecutors in germany are extending a criminal probe into volkswagen diesel emissions cheating scandal to include the former chief executive martin winterkorn. he is one of 37 people being investigated for fraud and competition violation. he had already been targeted in a separate investigation of market manipulations tied to the scandal. he resigned in september 2015 tesco is making an acquisition. the u.k. supermarket leader has agreed to buy the number one u.k. food wholesaler booker group. the price tag, $4.6 billion. the deal will enable tesco to gain access to the fastest-growing market to supply restaurants and hotels. the bank of japan moves to purchase bonds in five an

sergio ermotti, the she visited, says the closing reflects clients repatriating before the government sharing data with pretax abroad. the securities unit -- the companies putting less money aside for litigation. there is a litigation overhang. barclays, in the, up by 29%. ubs come up by 18. ubs, -- credit suisse down. look at the switch from last year. these banks were down 30% to 50% over that period. at the rising rate environment is boosting all shifts. tesco-booker -- a deal that but -- caught many by surprise. and analysts said it is a game-changing deal. it came completely from left field. andrea will tell us more. love this chart -- love divergence. equity volatility is low. investors are preparing for more turmoil ahead as european elections come to the four. the white line, three months. blue line, looks at euro volatility. futures betting on swings in the euro stocks. trade at a record high relative -month contract. equities are carrying the highest risk premium across asset classes. v i brought that up today in otc, i know i would win, but me and you are judging. vonnie: i

ubs ceo, was the sergio ermotti, speaking to manus cranny.t the thoughts now for piers hillier from royer london asset management. why would i own ubs when i can own one of the big u.s. banks that have big exposure in the bond market, that are generating from the pickup? piers: from our perspective, you've got two very good businesses and ubs. they were early in addressing the post financial crisis issues. in addition to that, they do have a very strong franchise in love management. , oncerket this morning you understand what happened in terms of outflows, the rest of the world management on is actually improved. that is the reason why the shares are down this morning. that slight concern is, what has been happening in asia. if i look at where the returns are in this business, i look at where the capital position is. most of the post financial crisis issues have been addressed. you are then looking at two good businesses. it is a question of delivering on the strategy they've talked about. matt: i wonder if a little bit also is profit taking

with ceo sergio ermotti. missed estimates.habet reporting more than $3 billion in capital spending. shares fell more than 2% in extended trade. microsoft quarterly sales and profit beat as to -- estimates. upe consumers are signing for cloud services and stabilization in the personal computer market. shares gained at -- in after hours. toshiba's board meets today to discuss a range of turnaround options. the sale of part of its chipmaking business will be on the agenda. the company is facing up to $6 billion in right downs. to sheba will hold a press conference at 7:30 a.m. u.k. time on its chip spinoff. zeroresident says terrorists in europe is a must-have. tie-in topositive what he heard from prime minister may. >> i think we are really encourage with what we heard rum the prime minister around her premise of a zero tariff environment. 12 million automotive jobs in europe. we build engines here in the u.k. we export them to europe and we import them back to europe. zero tariff environment is a must-have. juliette: that is yo

billion in the last quarter and profitability of the wealth management business declined, but sergio ermottitimistic. sergio: the most important thing for me is to see how clients are optimistic, particular with our u.s. investors and clients. i think this could be a turning point, but it is very important to see the new administration also puts in action their plans, and gives investors even more confident. mark: prosecutors in germany are extending a criminal probe into volkswagen diesel emissions cheating scandal to include the former chief executive. he is now one of 37 people being investigated for fraud and competition violations. he had already been targeted in a separate investigation of market manipulation tied to the scandal. he resigned from the automaker in september, 2015. hasu.k. supermarket leader agreed to buy the number one u.k. food wholesaler, booker group. esco tol will enable t gain access to the fast-growing market to supply restaurants and hotels. the bank of japan boosted purchases of bonds into in five and 10 years after benchmark yields climbed, confirming the marke

speaking to cnbc earlier today, sergio ermotti says that could be a sign clients are ready to get offhe sidelines. >> we are realistic, we have data points pointing at clients and investors being more optimists and ready to be constructive about the situation. they are really looking for concrete actions by the new administration in the u.s. >> ermotti says there could be momentous changes for the financial services sector if there's a hard brexit in the uk. >>> when we come back, how will trumponomics play out for stocks? we dig deeper with lindsay piexta. >>> first, a look at how the dow transports performed yesterday. the index hit all-time highs on the back of southwest having the best day in eight years. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can

now speaking to cnbc earlier today, ceo sergio ermotti talked about the path going forward. >> our continued option is to grow organically and stay very clear and focused with our current strategy that has been paying off. >> that current strategy, again, focusing more on asset and wealth management. ubs a big reason why you're seeing weakness in other lenders. cred credit suisse on the down and out and deutsche bank. they have rallied really strongly off of their lows last summer and early fall. still well below where these big guys were two to three years ago. so, yes, it was a big bad trade, some record lows for some of these names just about a few months ago. they were up but a long time to go to get back to where they were in 2014 and '15, guys. >> mike, you can see these results. ubs takes out some of the other european banks but meanwhile you have guest after guest telling us the u.s. financials are a bit of a trade. >> there's a dichotomy here. as dom said, ubs is a wealth manager. look at what morgan stanley's done, the retail banks and brokers have been doing well. i think it's an

speaking to cnbc earlier today, ceo sergio ermotti says that could be a sign clients are ready to ged ot off the sidelin. >> we are realistic because we have data points pointing at clients and investors being more optimists and ready to be constructive about the situation. they are really looking for concrete actions by the new administration in the u.s. >> he said there could be mom t momentous changes for the financial sector if there is a hard brexit. today we get results from chevron, honeywell, american airlines, general dynamics and abbvie. and key economic data as well. a first read on fourth quarter gdp at read on fourth quarter gdp at 8:30, durable goods at that time, and 10:00, consumer sentiment. >>> stocks to watch today. we mentioned alphabet, google. the parent of google missing analyst estimates, but revenue beat expectations, soaring 22% on strength in mobile search and video advertising. the stock is getting -- it's 2%, but such a high price, down $17. the journal in the -- what is this thing called? the journal points out -- remember, we always wanted revenue growth

ermotti: sergio speaking there earlier about his plans for the ubs bank.et worth individual in asia. we are here in davos. panel to panel, people are saying we have to get simpler. everywhere. francine: we have to get simpler. when we look at the troubles of the world facing this globalization, the answers are not that simple. there are big thinkers here, and they cannot seem to agree. tom: the other idea on this wednesday, the inauguration is here. two days away. francine: let's get straight to "bloomberg first word news." taylor: in south korea, a special prosecutor argued why the samsung group's era parent should be arrested. lee is being investigated for bribery, embezzlement, and perjury, from the scandal that led to the impeachment of south korea past president. hong kong's chief executive give his final policy address. he said that hong kong is an inalienable part of china, and there is no room for any part of separation. he surprised hong kong last month by deciding not to run for a second term. a republican is making an offer to democrats he hopes