francine: we are getting news and the sovereign wealth fund, i know. guy johnson: 5.3% as stocks rallied around the world with the norwegian wealth fund having a nice first quarter. it is the end of the first quarter and 2.3% in real estate. breaking out, asset allocation. francine: the company cut the forecast. >> what a share reaction, losing $6 billion. it tanked.
look at the share price. the company was trending on its own site for the wrong reasons. the numbers were leaked and the investors were aware of the growth. you are not profitable. you are not giving us enough. 74% looks like a nice number. versus the estimate and the company that used to post double the growth remember this is not the membership of facebook. it will be up and they wanted more why only now. we will see growth about 60% for
the whole year. is this a worry that they are not. how can you substantiate? how can you provide that money when you are not seeing profit coming through? he spent no less than seven hours on the phone about new management changes. the notable ones are "while you were away.'" if you don't log in for a few hours coming get the tops -- the top tweets. it is a fifth smaller than facebook.
facebook has 1.4 billion users and twitter has 300 million users. alarm bells are ringing. to add insult to injury and rub salt into lowland, it was leaked. it was a company that got a hold of it. it is a detection platform. there are nuggets and they went to twitter and accessed the numbers. down goes the shares. still this is a $25 million company. >> thank you very much. do not miss that interview.
francine: that brings us to the twitter question. what would you be tweeting this morning? you can tweet us. we had a massive shuffle and they have removed one of the kingpins in all the oil markets. he remains and is no longer a chairman. guy johnson: let's talk about a company with huge links to the energy market. it is a supplier of aluminum and released results for the second quarter. let's talk.
good morning. thank you for taking the time to be with us. energy is obviously a big factor and huge amounts are required huge amounts. >> the energy costs are significant. as for the impacts it is a significant cost on profits. francine: what is your take on china? it is the big concern, in terms of growth. we should not wine about 6.5% growth. >> the concern in the moment is the change on the export tariffs.
it is too early to tell with the import -- the importance of exports will be on china. >> any sense that capacity is coming out of the market? what about the supply side of the equation? how much capacity will there be in the aluminum market next year? >> we think somewhere between 600,000-700,000 pounds coming in . there is a project in canada. we expect some capacities to be curtailed. francine: where do you see them
coming in? you are a bellwether. where will demand come in? >> we see demand on the european side. we are up some 15%. it is between q4 and q1. guy johnson: i mentioned a gap between you making aluminum and a car i driving. what is the lag? if you see the pickup increasing, what is the lag, in terms of the numbers of cars reduced -- produced? >> this is about aluminum and
co2 emissions. when you look from 2015 and 2020, we expect a growth of 20% and we really replace the deal. guy johnson: thank you for talking to us. aluminum is replacing steel. francine: we have the news from saudi arabia and we are hearing about the bloomberg scoop. there is access to euros and any increase of the plo is good for banks. guy johnson: it is good for the
government to buy more t-bills. the greek banking sector, with money being withdrawn, there is the quiddity. there is two sides to the story. francine: we understand the greek takes -- greek banks are thought to have extra liquidity. it is crunch time. this is the week where we are meant to have local authorities transfer money and it plays into whether greece has enough money to raise wages and creditors. guy johnson: let's take you through the news. profits beating estimates at 3.3 billion euros. it comes and --
francine: a traitor was arrested and he -- we are hearing about the they'll. guy johnson: the estimates of gdp in the first quarter of the year. the first quarter data would be released today with the market committee meeting. francine: the shuffle. we will get the latest from the government. guy johnson: we will talk about the estimates and the weak euro. francine: attacked by anarchists , the disappointing dinner date later in the show.
tell is about the significance of the reshuffle. >> good morning, this is something the younger generations had in two instances. you had the deputy crown prince and the interior minister. it now becomes the crown prince and he can rule the country for years to come. prince is the king's son. he was the defense minister. he is the head of the economic council and will receive the sovereign wealth fund. they have a lot of power at the expense of the generation.
francine: -- >> nobody expects immediate change. he says the kingdom policy and chairman works with him. also, the new chairman is the health minister and his appointment and involvement in policy is open until we get more clarity. with regards to policy, possibly, yes. the foreign minister has been serving since the 1970's and is one of the longest-serving ministers. he is replaced ivy ambassador and he has been the face of diplomacy in the campaign since the kingdom led the airstrikes. it also indicates a desire to
have someone who is well-connected and knows the administration. he has been involved in the campaign and we expect that to continue. there could be changes in the policy. francine: thank you. guy johnson: the shuffle comes and, in in an exclusive interview the kingdom now has difficult decisions to make. >> it is a big questions -- a big question what they do when they are back on the market. it seems that the number of addictions on the u.s. -- productions will go down or cut
the rising. all in all, you will have the market supply today and it all depends in my view, of iran cutting back and saudi arabia making a decision. francine: he was speaking to ryan chilcote. ryan chilcote is here. he has a very french name. there are three major players. what is the take on this? >> you look at the oil price and we are down from the peak in june. he does not name a price for -- they do not name a price and do not have an actual forecast they are prepared to communicate with us. they do have determining factors, if you will, that they
presented. look, it is anybody's guess when they will return to the market and the deadline is at the end of june. one of the things they are asking is when they would return to the market. the united states, the shale revolution, that is why the things that is moving the oil price on a daily basis. you take the short-term view and you want to know with the inventory is going to say. but effectively, you heard them say that the long-term view is that they have the lowest number of rigs deployed and it is not as much as a determining factor. interesting conversation we had. our friend is still in charge and he is going to be back.
policy has been run by a man who turned 80 this year and he will be back. they have taken steps ahead and they may not change things. for example, they may come back to the market and pump less oil. guy johnson: let's talk about mergers and acquisitions and everybody figuring out who'll take over whom. ryan: it got more energy when they went for 7 billion. the answer is not at the moment. they are waiting for the bargain. have a listen. >> if we look to the transaction, the price of it was high, in our view and we see, also that the oil potential target brings it, in terms of prices and there are expensive
companies that price the share price to the oil prices. >> may be, going forward, the prices drop. >> i would never say never. ryan: it never say number. so, maybe they will jump in the game will stop buyers on the market have become choosier. maybe what they traditionally get with the oil price is not there because people are scrutinizing, despite the fact the investment bankers are knocking on the door. guy johnson: that is what they are paid for. ryan chilcote: bless them. you have a lot of it for sale and they are saying the program and the oil fields are out there
francine: welcome back. guy johnson: a traitor arrested for a flash crash will be appearing in court. he has been in custody for financial crime. we are joined now for more. this is a standard court appearance. what will we learn today? >> what we understand is when you do not pay bail, you come back every week until that has been done. we do not know why they have not paid fail. he had trading accounts and the amount was not paid. whether that has to do with money being in offshore accounts or it taking longer, we don't know. we are discussing what happens
and whether the judges will make any amendments because of the conditions. >> can he bring it to the bail down? >> no. not a negotiating tactic. the initiative is having this come out quickly. there did not seem to be a whole lot of clarification about what they are doing with chasing assets. there may be a revisiting of that if they decide that in some way and the money would be available for bail. that will be revisited and we are waiting to see why the money has not been paid and whether it it would be. guy johnson: thank you very much indeed. francine: results eating
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fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. francine: welcome back to "the pulse". guy: i'm guy johnson. these interest bloomberg top headlines. francine: the greek finance minister has been given another rough night by anarchists. the couple this is him and his wife, they were harassed by anarchists at an athens restaurant. they threw glass objects at him. he was not injured and had a discussion with his harassers
afterward. all i want to say is what a woman. guy: the british bank barclays posted a gain in the first quarter matching analyst estimates. despite setting aside an additional 800 billion pounds that it rigged in the year-on-year period. francine: shares rose as the company says it expects a recovery in the second quarter. samsung is betting on the galaxy s 6. it got positive reviews when it was released this month. guy: let's turn to cars. volkswagen reported earnings this morning. despite the departure of its long time chairman. where did the acceleration come from?
hans: they had reath great quarters from audi and porsche. audi 1.4 billion euros. audi about 9.7%. porsche about 15%. they are basically printing money. at the same time they want to raise profitability at volkswagen and they want to take over toyota. they have fallen short of that goal. in the back of all of this, they have this cost-cutting plan in place at volkswagen at their name sake brand . they want to trim 5 billion. by all accounts, a good win. a good profit increase. but they still don't see massive gains in market share or sales
in the u.s., which is the biggest market, which is why we have this conflict between the two. guys? francine: it is all about the u.s. stay with us. here to dig deeper into v.w.'s numbers let's bring in natalie. thank you so much for joining us. it is all about the u.s. really. after the departure of the chairman, what exactly will be v.w.'s strategy in the u.s.? will it be more aggressive and will it work? >> yes, i think it will definitely be more aggressive. i think they are going to take a lot more qump and focus more on younger buyers and i think volkswagen is lacking that and i think they will be expanding that and a and an important thing is the crossover to the suffer. the u.s. being one of their weakest markets with less than a million units sold they need to
expand on that aggressively. there is a lot more on this there is a lot more happening. not all the decisions will be happening -- there will be a lot more local power enforcement. guy: so we're going to see u.s. -- trucks -- focus on that market? >> yes. definitely. they are going to come out with a lot more crossover s.u.v.'s. francine: let's bring in hans. hans? hans: yes. when we look at some of the vans that have sold great in germany. you don't those volkswagen vans really taking off in the states?
is it regulatory? is it hard to make the troigs have all of the converters set up? >> i think it depends on overbly europe being a lot stronger market for volkswagen in general and they are trying to obviously now they realize there is a shift happening and they need to expand more on that market. in the past they have not done that as much. the brand needs to -- francine: in terms of the biggest challenge, is it going to be for volkswagen? we talked about the u.s. and the more luxury models. we also have a -- do they have to put these differences to one side? is this going to be something with the resignation that we can put behind us o or is it something that will resurface? >> to be honest, it is not over yet. he still holds a major share in the porsche as well.
i think in the future it would have been really, really good if they would have looked for a chairman outside. also to focus -- put it back on efficiency and accelerating what the germans toned do quite well. there needs to be a more fresher take on that. from the annual report that recently came out there is a lot more focus on digitalizeation. he is now resigning. the cost cutting structure can come back into place. it lost about 4.7 million units. now basically volkswagen can come back. to track. guy: ok. talk about being on track or on the road, on the autobonn -- autobahn, i'm interested to know what the experience was like .
what have you been up to? hans: 80 miles per hour. hands off the wheel. feet off the pedal. have lan. have a watch and then we can chat. another day on the autobahn but is this the future of commuting or will it look like this? ♪ so much of the talk of driving is about the safety aspect of it. that is true. i'm driving without my hands and it could be safer. the argument is the time you save on your morning commute. the typical american worker spends about 28 minutes a day commuting. the oecd average is 38 minutes. this translates to almost 150 hours a year. almost 19 eight-hour workdays before you even step foot into the office. your morning commute is the
least enjoyable according to a princeton study of your 19 daily tasks msm let's make its a little more fun. a chance to take care of your personal hygiene or time to prepare your kid's lunch. they are going to get a mayo sandwich this morning. but task is done. fully piloted driving is not scheduled for the public until roughly 2022 the technology is road ready. >> we have two laser scanners. one in the front and one in the back. and we have four additional -- in each corner of the vehicle. this is enough -- for this 360-degree view. hans: and the safety concerns are real. more than 20% of drivers report texting behind the wheel and in
the u.s. the number is more than 30%. but even if or when automouse driving becomes a re-- autonomous driving becomes a reality. >> no drinking. hans: i got the green light to mix an evening martini. hans: so guy you need 10 seconds to be able to finish up your task and get back to driving. the best part about this is the extent to which it changed lanes. if you set it to go 80 miles an hour and you're doing 75 in the left hand lane or 80 miles in the left handly and you to move over to the right because some guy is flashing their lights behind you, this will then move over to the left. this car is so easy to drive that even francine can drive it.
i know you're dying for the rest my -- recipe for the mayonnaise sandwich. francine: cocktail yes. mayonnaise sandwiches just wrong on so many levels. guy: mayonnaise ketchup, i'm up for all of those this they sound good. i spent a lot of my youth experimenting with those. francine: when are we going to see these driverless cars? i want to be making mayonnaise sandwiches on my way to work for guy johnson. hans: audi hopes to have a version available for traffic by 2018 once they get aprufrle for piloted driving which means you can check out for 10 seconds or you can do anything but you need to be able to check back in for
10 seconds. 2022 and 2023, they still need to get the go ahead from the regulators. they have cameras all over this car. it can look backwards and forwards. it takes over and accelerates. the future is coming, francine and you'll will able to fit in the drivers side of the vehicle. francine: that will be amazing because i don't drive of course. that is exactly what i'm doing now, a driverless car. i call a taxi. my husband would beg to differ. this seems like tech companies -- >> obviously now, apple and google entering the playing field, being threatened by nontraditional automotive companies. today is a bit of a conversion happening now between the products and also trying to -- trying to put them all together.
i think there is a lot coming up. guy: would you get into the fast lane at the autobahn in one of those? >> definitely i would, yes. francine: i want to ask you about the mayonnaise sandwich. guy: mayonnaise or ketchup. francine: natalie, thank you. guy: coming up, we'll have more on the reshuffle. will the naming of a new crown prince change the world's biggest exporters and international diplomacy? we'll talk about all of that when we come back. ♪
let's talk about what's happening in the oil and gas market and what's happening with gazprom at the moment. very nice to see you. first up one of the key figures in the oil market. he has had a major impact in the past year on the price of crude. the fact that he is staying as oil minister, it is not going to change any time soon? >> i don't expected any changes in saudi's approach. especially going thu june. i think they will keep their stance. i don't expect material changes as of now. so that change is more rather a formality. we don't expect -- that question
going into june. they still need some time to understand the oil price dynamics particularly in the u.s. i don't think they had enough anecdotal evidence to basically determine and cement the position. francine: what is your take on the situation? we have been talking about the price in oil and shale gas. the over theory of course is the demand for gasoline in china is nearing peak and producers are concerned about this and kind of want to keep oil at a level where it is more affordable. what is your take on what is driving the price or oil and what is the range that you see it from here to year end? >> i think overall demand has been the key surprising element. demand was much higher than expected.
we're not focusing on china. i expect strocker -- slowdown in gasoline and much higher consumption in the u.s. as well. that has actually fueled the prices from the bottom a bit. i'm a bit more constructive on the demand side of the picture. supply is still a concern. although we saw a recount data in u.s. decline but we haven't seen strong responses on the -- it is still pretty high. so again that means we are a bit more constructive. we feel more comfortable about the bottoming of the oil price but it doesn't let us understand the cap clearly now. the range again our personal view is you know could be another $10 on the upside. we could see another $5 $7 on
the downside. i think the focus and the key concern is the volatility that we will face especially going into june before a key decision is made by opec. guy: can we talk a little bit about europe? it looks like it is gaining traction at the moment. what does that do for the supply story and what does that mean for the russians as lie -- they look to export a little bit more to the european market? >> looking at consumption data in europe, actually adjusted for weather. demand has grown by 1.5%. so if we look at key consumers across five countries, the consumption grew by 8%. a lot of it was driven by weather which was colder than last year.
even if you adjust for that we saw an uplift in the demand and somewhat driven by gas prices as well as the economist showed some momentum there. which creates a tail wind and an opportunity for gazprom -- market share compared to last year. guy: in terms of the currency you were talking about the fact that gazprom is naturally hedged. if the cost of production is in rubles which have gone down, neverthelessice trades in dollars. >> absolutely. if you look at the revenue -- 2/3 is dollar-based. whetherby most of the costs, particularly cap exis ruble based. it creates a natural hedge for gazprom. so from that, yeah this company
francine: welcome back to "the pulse" live on bloomberg tv, radio and streaming on your tablet and phone. guy: it has been a tough few days for varoufakis, the greek finance minister. he was abused in riga late last week and had his role reduced and fow has been involved in an incident with anarchists. it is not going well at all. how did the night go down? >> yeah there was an incident in a suburb here in athens. a group of radicals with covered faces went to the restaurant that var factorice and his spouse were dining. they threw some glasses at him. thankfully no one got hurt. it was a good that i think his spouse hugged him and turned her
back. the incident ended after the finance minister had a long discussion outside the restaurant and after 15 minute or so, they just left the scene. guy: we're looking at pictures of the restaurant. this is the actual restaurant where the incident took place. francine: the inside or the outside? it seems quite incredible because he goes and issues a statement. right? is this likely? does this happen often? you kind of have an incident and then feel you need to put a press statement out. does this bring him in a light that is closer to people of greece? >> it is -- we have had some -- by when we have process athens if the minister walked down the street and there was a pro
memorandum party and there could be some violence going on, but having this statement from the finance minister is a first. it seems that for a sideline minister, varoufakis is in the spotlight. guy: yeah precisely. does this in any way change the political dynamic? does it give us an insight how much tension in greece? tell us how much trouble is going on in this country right now. >> no, i don't think wushed -- really put a lot of weight on this. it is well known for being a place where radicals or anarchists reside. it is that area of athens where most riots begin. to find a small group of people attacking a finance minister
francine: hashtag failed. twitter funds plunge after release. guy: we're going to take a look at the impact on the oil markets. francine: volings wagen accelerates. -- voblings wagen accelerates. we're going to take a look at the impact of audi and porsche. guy: good morning to our viewers in europe. a warm welcome to those just
waking up in the united states. i'm guy johnson. francine: i'm francine lacqua. this is "the pulse" live from london. we're getting news on economic confidence in the euro area. it has fallen a little. it is coming in at 103.7. not that far behind. it just gives you a nice glimpse of the mood in europe. there are green shoots. very fragile recovery. guy: oil in a major reshuffle the king of saudi arabia has named his nephew as crowned prince. the oiling minister is now longer the chairman of the saudi arabian oil company. better known to me as the he takes on that role. let's get more now with our middle east editor. he is joining us from dubai. walk us through the significance
of all of this. the new generation cementing themselves in power. >> good morning, yes. it is a major generational shift. what it means is after king salman the king of saudi arabia will no longer be the son of the kingdom's founder. there is a significant power consolidation in the hands of two young princes. one was all right deputy crown prince and is now crown prince or is in next line. the king's son, he was defense minister, head to have royal court, head of the economic council. he is now second in line to the throne. a big consolidation of power in the hands of those two young peninsula princes. francine: to what extent will we
see a change in foreign policy and oil policy? >> as far as oil policy is concerned, nobody we spoke with predicts any media change. the oil minister remains. it is the most critical post. he oversees his kingdom's policy with regards to opec. his involvement in oil policy day-to-day is still an open question until get more clarity from saudi officials. there could be -- it could be arked there will be changes in the foreign policy. one of the world's longest serving foreign ministers. they -- the government appointed the kingdom's ambassador to the u.s.
he is a been the facor saudi diplomacy since the kingdom started leaving air strikes in yemen. he also knows washington desires to have someone who knows the u.s. quite well. they are the kingdom's closest ally. you could see, we're already seeing some change to that policy already with a more aggressive saudi stance. guy: to you very much indeed. bloomberg's middle east editor joining us from dubai. francine: we're joined by a man who has been the c.e.o. of many companies and one of the experts in oil. you have met him on a number of occasions. what does this reshuffle mean to you in term of oil policy?
>> i'm expecting no major change. in fact, he has been the real player for opec in the last 15 years. the fact that he is staying there means that saudi arabia will not change its policy which is to sell as much oil as they can. in fact, saudi arabia has been increasing the sale of oil which would push prices down. not expecting any change in the ex-in, say, six months. guy: you know the man. talk us through how he will be seeing this generational shift in saudi arabia. as you say, he has been in opec for such a long time. he has a wealth of experience that he brings to the table. >> yes. he is number two. today he is becoming chairman. i know him very well as well.
in terms of oil policy, there is a lot of continuity in saudi arabia. it is a different story about foreign policy because as you know saudi arabia has been extremely active in the last few weeks in foreign policy and all of these changes means to me a lot of attention and this will active foreign policy will continue and we might increase. francine: on the oil policy, what exactly is saudi arabia looking at? is it the shell gas producers that they are trying to stare down? >> in very simple terms saudi arabia has been facing the issue of losing market share, losing market share in the market of oil and in particular shale oil producer the u.s. have been
growing market share. so the fact of bringing prices down to an area of $50, $60 will reduce production in the u.s. and saudi arabia will go back to the level of market share they want to have. this commercial policy matches also another policy which is more political. that is that every decrease in oil price, particularly in iran which is leaving out of the oil -- for iran oil prices at $50 rather than $100 makes a lot of difference. guy: how long can saudi sustain low oil prices? >> forever. for a long time. for a long time. for a long time. guy: ok. fine. so we can expect oil prices to remain kind of sub100 for a very extended period here? >> my forecast, in this area, i'm not expecting oil prices to
go beyond $70, $75 for this decade. from now until 2020 unless we have a political event, we would change completely the scenario. francine: what happens in the next four to five years? longer term. if we realize china is going to consume a lot less -- >> china is not going consume a lot less. it is probably growing a lot less in its consumption but consumption will stay on. china in 2014 has been the bigs market for cars. 20 million cars sold in china. a phenomenal number. i'm not expecting con snudges china to go down. i'm not expecting to grow much. consumption in oil has increased less than 1% in the world which is in fact a very stable market
which doesn't give room to increasing production. guy: thank you so much for now. he stays with us for another 30 minutes. we have so much to talk about. tech evaluations. guy: let's talk about what else is on our radar this wednesday morning. the german automaker volkswagen reported profits that beat estimates. the report comes day a.f.c. the departure of the long r long-term c.e.o. francine: economists survey by bloomberg a 1% rise in g.d.p. for the first quarter compared to 2.2%. it is all about consumption. have we scared the consumer? that's what economists are trying to get to the bottom of. guy: let's talk about twitter.
twitter's failure to reach first quarter revenue estimates. sales up to $485 million, forecast for the second also. well short of average projections. the results call into question the -- of the the credibility of dick costello. francine: we'll be speaking to the twil twitter c.e.o. dick costello later on today. you don't want to miss that interview. i know i'll be tuning in for that. guy: pretty volatile. big question is what should d. costello be tweeting as a result of all of this in what will he treat tweet this morning? ? you were in his shoes, what
rephrase it. >> it has been two years since i left. guy: is it? >> at some point in my life people will describe me as something other -- francine: what do you want to be described as? >> i'm feeling in a silly mood today. i'm chairing the -- anti-microbe ya'll resistance. your view -- google. i was at a tech conference. google for dock task force. forget all of this nonsense about greece. we need to make sure that 10 million people in the world are not dying from anti-might be robe microbeial resistance.
i've kind of been a fan of this u.s. recovery story. this past few months i've started to have more doubts. structural the case for the u.s. was base top weak dollar. a tough year in markets. basically pulling away those two -- the u.s. consumer is already 70% of g.d.p. why is it sustainable anyhow? didn't we get into this mess
because the u.s. consumer is too imbalanced and had too little savings and was depending on savings from the rest of the world? maybe they figured out i don't want to overleverage myself that much any further. comboip your degree of concern is -- >> i'm not convinced that the slowdown in the u.s. is completely weather dominated. in my old life weekly job claims a pretty good leading indicator. 300,000. it is april. is it still snowing all over? i don't know. francine: no. >> that's not weather-related. francine: what is your take on the u.s. in general? we still see it as the end all, be all? >> no, growth is half of what it was. growth for the first quarter is exactly half of what it was. >> europe's growth is going to be stronger than u.s. do we have really good weather in europe?
>> i think the dollar -- makes the whole difference i believe. still, the u.s. are growing. still the u.s. are growing and europe is growing still, less than the u.s., even now. >> is it not because -- italian -- francine: which one? >> mario draghi. >> made q.e. work in a week. >> he is doing his best. francine: is it working? >> we had a big drop in oil prices which is really good for europe and the u.s. coming on top of the decline of the euro. the build-up to q.e. was so long the market priced in a long -- all of those things going on together. a pretty good feel. guy: u.s. stagnation.
seven talking about that. secular stagnation. is this a long-term lack of growth. where is the growth going to come from? >> if you just live in a world where the united states is the only place that matters, yeah. but apple, world's biggest consumer brand the world's most capitalized company, yesterday told you what is going on in the world. it is becoming a chinese consumer company. mass i ever sales. is that secular stagnation? i don't think so. >> not in the world. maybe in europe. maybe in the u.s. not in the world. there is growth everywhere. what i think would be a good -- for me, with this slowing down of the growth in the u.s. economy, mrs. yellen will still have a lot of patience before raising interest rates in america. >> i say september looks
debatable in my opinion now. >> six months ago it was not debatable. it was almost certain that september was the first hike. francine: now, the end of the year -- >> last month's employment softness is repeated, i think the markets will certainly price in their effects. >> i'm not sure why the fed needs emergency rates anymore, anyhow. why don't they just start to raise rates. under yellen's guidance it looks to me the case is declining. guy: u.k. g.d.p. does it get any better from here? i know it was a fluke. what does the u.k. economy look like post the election? >> cyclically, most of the same indicators i have followed for years suggest something still a bit more like .5 .6.
guy: any -- the election? >> how come everybody has been debating it for months on end and the markets don't care? guy: they went straight down and then back up again. francine: i don't know if that is a good thing. >> maybe we're all being really dumb and the greatest opportunity to short u.k. inc. i suppose the markets have figured out whatever comes along is not going to disturb some of the better things that have been helping it. francine: the europeans seem to be more worried about this election than the brits are. >> they look very much like the italian -- many possible -- so i feel perfectly at ease. guy: finally we're becoming european.
francine: becoming italian. >> the good news is that in a country like the u.k., you can live very well without a government for a while. you do not have to change every four years your health system. you can stay quiet. possibly the economy would improve. guy: we could become belgium. >> yes, with very little government. >> this coalition which itself it was a bit of a culture shock for the u.k. to deal with. that functioned pretty well. maybe it is -- maybe more seriously, it is part of the beginning of yet another way to use the phrase new normal. guy: have i francine drinking tea. and english politics is becoming more italian. francine: guys, thank you so
much. we'll talk a little bit more about tech evaluation and m&a. guy: let's move on. a major transatlantic tie-up. u.s. based logistics agreed to buy its european counterpart. we're joined on the phone by the c.e.o. thank you for joining us. talk me through the industrial logic behind this deal. why are you buying a european company at a time when the european economy is not exactly generating great growth. >> because it makes us a truly global supply chain provider. we're able to meet customers' needs better by having a global footprint. so we're building a leading independent player in this industry benefiting from the contract logistics dominance that they have here. the operations they have here. putting the two companies they
have they have here, one plus one equals two. you mentioned europe. it looks like it is starting to rebound. we would like to get into markets when they are on the down going up, not on the up going down. for us, this looks like a good entry time from a long time point of view. plus the exchange rate with the euro and the dollar makes this company 20% cheaper than it was a year ago. francine: i was going to ask you, how much of the decision to buy it was due to the weak euro? is it 60% of your thinking or was it much less? >> no, much less than that. that was the icing to be cake. it facilitating being able to come one a price that made sense for both parties. the real reason is there are hundreds of millions of people here in europe. we want x.p.o. to be positioned to serve their needs and to get their business. guy: when you do the due
diligence on this, your sense of what's happening in the european economy now logistics companies are great indicators of how much trade is being done. how much business is happening. what is your view? >> our view is that it is not robust. but it is getting better. and you see england's economy starting to come back. spain's starting to come back. france is stabilized. italy is doing pretty well. it feels having spent some time over here the last few months and couple of weeks, it does feel that it has turned the corner. will it be a meteoric high tra screctry? i doubt it but it seem like the direction is up, not down anymore. francine: what is your take on m&a? we're seeing so much m&a. overall do you see more m&a happening when you were shopping around for this?
did you look at some asian competitors because of the growth in europe or the future growth that you hoping that we'll see? >> i think there will be more m&a here in europe. i can speak for ourselves that we do have our eye on a handful of other european acquisition targets. it is the right time for european acquisitions. francine: thank you so much. guy: are you expecting more u.s. companies to be shopping in europe? is now the right time to be doing that? the currency seems to work. the economy has started to pick back up a little bit. >> all of these reasons are pushing companies to growth. europe is certainly the media target for american companies.
we will see much more of that. francine: is there a danger that we have too many megamergers that don't work out? they are too difficult to excuse. what would be your piece ofed a voice? >> you to know how to make a megamerger. for example, to make a megamerger between shale and b-g., in the history of shale there has never been such a large merger. i'm sure shell has been preparing everything, but it takes a lot of people, a lot of exports, a lot of experience, sometimes in order to get the benefits that you're supposed to get through the merger. now other companies are more experienced. staying with the oil sector for example. exxon. they have got a lot of -- with mobile and also b.p. with -- >> you mentioned b.p. and exxon. >> i don't think so, frankly. the government wouldn't like it very much. francine: it depends on who you
pean headquarters here in london. i'm francine lacqua. comboip i'm guy johnson. these are the top headlines. francine: seven foreigners including two australians were executed by a firing squad for drug smuggling. the executions went ahead despite more than 60 appeals for clemensy by the australian government. guy: a new crown prince has been
named. the oil minister has been replaced as chairman. francine: the greek finance minister varoufakis has been given another rough ride. according to a statement he released through the finance ministry he and his wife were harassed by anarchists at a greek restaurant yesterday. his wife shielded him when the anarchists threw glasses at them. he wasn't injured and had a discussion with the anarchists after the incident. nothing like having a strong woman by your side, guy johnson. guy: right. ok. let's talk about the markets. over to you. jonathan: thank you very much. so this is the equity scene. i'm not going to spend too much time on it. equity pretty much flat across
europe. you don't i want to spend much time talking about stocks? because i want to spend all of my time talking about bonds. look at these moves in the bond market across europe now. the yield on the german 10-year up almost seven basis points. it is not just a german play. it is across europe. spanish yields up six basis points. italian yields up almost six basis points. three things to talk about. supplies, sentiment and data. supply germany, italy. 2.5 billion euros today. that is the supply story. maybe you don't have to read too much into this. the sentiment story, something, thinking about considering a bet against german debt. maybe that will spook some people. perhaps. to me, the data. that is something you can't argue with. for the first time in three years, euro-zone private sector
lending actually rose. it has been declining since the front half of 2012. o 0.1% higher according to the e.c.b.. that is a leading indicator as well that maybe credit conditions are starting to turn. maybe demand is starting to build in the economy again and perhaps the q.e. plan is working. maybe i'm getting a step ahead of moist but that is certainly the discussion this morning. in the world of fx, injuryo/dollar is stronger. breaking 1.10 this morning. the bond market does something interesting, maybe it is worth a look. guy: it is. i think that is probably one of the really positive signs coming out of the story this morning. francine: thank you so much for the update. the u.k. votes in the general election a week from tomorrow. the election campaign is heating up in in the coming day.
guy: to the prime minister has been speaking. what has mr. cameron been saying? >> good morning. it was a kind of getting things off my chest kind of speech. and another thing kind of speech. these were the types of phrases he was using this morning. he gave us a little bit more detail on sol -- some of the pledges he has been making, such as a new law that stops the government from raising tacks. why is there a law needed? why is your word not good enough? he also talked about welfare, there, taking on some of the criticisms around welfare cuts saying that the welfare reforms this government has brought through are working. they have made work pay. he said it is important to stick with that plan and got go back
to the bad old days where they had unlimited welfare. very much in contrast ed miliband who has been speaking this morning, flanked on either side by two of his senior colleagues. all three of them on a stage behind lecterns. guy: right. miliband. what is he accusing the toris of? >> anna: he had some slides prepared. ed ball had some slides prepared. he talked the journalists through all of these slides. if you look at how big the cuts will be to the police, to social care, they will be very big in the eyes of labor and concluding that the toris will also have to cut other areas of spending they said they won't cut and suggesting that they will
increase the a.t. i'm not sure anyone needs -- as a result of that particular deck declaration. eight days to go until election. guy: very exciting. definitely getting exciting. the sleeves rolled up, the tie is off. the passion is on. we have been become manager italian in politics. francine: that's what our guest thinks he is still with us. you have been at the helm of numerous businesses and you always had a fight in you. what kind of advice would you give to a politician today? do politicians have to be more like coast? looking at cost cutting and leading with not with words but with action? >> in the u.k. certainly yes. there is still a cost-cutting exercise to be done. even if if the conservative government has been cutting costs in the last few years. still a lot to go for.
in other countries, in europe, this is not the case. we need more spending. it is a recipe. it is not clear which coalition. not necessarily coalition. which is something to which brits are not used to. the negative. quite the opposite. i believe that a coalition puts together sentiments of the people and maybe it is a better place to interpret what the people really want. this system of the u.k., the first -- is not anymore the system that is needed for a country like to u.k.. guy: we have talked a lot in this country about our membership of the e.u. when you go around europe and you hear what people are saying
about us, what are they saying? what is the business community saying about us? >> the business community thinks that even the most -- european europe, very different than what europeans think. the most pro europeans of all the brits think this is a common market. they never even dream of a united states of europe. this is out of question. while in europe there are many citizens who believe in building a united states of europe, which giving up political power to europe, which is something that nobody thinks about in the u.k. so i don't know what would be the outcome of a potential referendum here. no doubt if the u.k. stays in europe this will slow down any process of further integration within europe.
francine: thank you so much for joining us today. we have covered quite a lot of ground. the rothschild deputy chairman there in a nice bloomberg exclusive. jonathan: guy: still to come we're going to talk twitter. disappointing results. what does the company need to do to regain the confidence of investors? we'll discuss that later in the program. ♪
francine: welcome back to "the pulse" live from london on bloomberg tv. guy: the british bank barclays has posted a gain in the first quarter matching analyst estimates. despite claims that the bank rigged currency benchmarks. they raised 1.8 billion pounds year-on-year. francine: samsung is betting on the new galaxy s 6 smart phones. it got positive reviews when it was released this month. guy: goldman sachs' regulatory filing has revealed it gave up its highest ranks since august of last year new partners are -- every other year. the most recent 78 joined in
november. francine: twitter tanks. shares plunged after the company's results were leaked early on from the social network. join us now is ben wagner. -- dan, i guess this proves -- good morning to you. it proves a vuct of a lot of these tech evaluations. this is what coast have been warning us. does this worry you? >> well, i think we need to make a big distinction between the utility applications, which are necessary for us as consumers and applications like twitter which i still think is somewhat faddish. it is one of those services that tomorrow could be replaced by something that is better or more convenient. we have seen this before with things like flicker and then i.n.s. gram and snap chat and messaging app sanched myspace
being replaced by facebook and even now with facebook there have been some changes in the way of which consumers are engageing with that. the younger consumer is moving away to other social engagement platforms. we have to be conscious of that and then we can recognize its utility as a platform going forward. guy: is this the fact that twitter has yet to get right its advertising strategy. i look to the facebook numbers. they are startling in the eight to leverage advertising. maybe twitter is six months further down the road or 12 months further down the road from facebook. once they seem to be able to get the advertising story right, doesn't this company start to generate decent top line? >> yes, i think it does. it has a fantastic leverage across its user base which is huge. as you know, we have a mobile
engagement platform that leverages social media like twitter. allowing who tweet to thank you, your honor into an instant transaction. you suddenly raise the utility of twitter to both brands consumers, alike. i think, you know, it has enormous potential because of its reach and now it is about monetizing that reach and it is maybe a bit early for that company to be listed because it is going to be measured quarterly when it is still in a growth and development phase. francine: the danger that it could be replaced by something else at the moment. is there anything else that you see it replacing? >> no, i don't think so in the case of twitter. i have nothing that i can refer to today. the point i was making is that essentially, it is just -- it is a -- it is a style-driven and
faddish-driven engagement environment which can be replaced by that could do the job better or more efficiently or more elegantly. we don't know that until it appears. consumers are very quick to drop these things and move on to the next thing. the engagement, the commitment to it is low. at the moment, it is the one and it certainly that is potential to maintain its position but all i'm pointing out is that you know, it is vulnerable in that it is easily replaced. i think we have seen that before with other example what'sap. francine: we're joined by a partner of passion capital with more. when you talk about twitter, actually when you look at the figures as you were mentioning in your notes, revenue grew 74% in the quarter.
advertising dollars almost doubled from a year ago. is it just that they disappointed analysts? >> i think it is. if you look at the numbers, half a billion dollars a quarter that they are making. that is not so bad. i would argue that it was appropriate for them to go public. i think that is healthy revenue growth. the question is when can they get to profitability? they would not be the only company that has those issues. guy: when i look at the facebook numbers, they are amazing. the direct story straight to the advertisers. what does twitter have to do? once you start cracking that, you can start monetizing the stuff and start making money. >> i think the key would be tight. face book went public years ago. twitter is trying to work it out. twitter is going to have to do the same thing. they are testing promoted
tweets. they do testing on everybody. they know exactly what you click on and what you don't click on. they will refine it until they get it right. francine: you think given all of this, the c.e.o.'s job is not at risk? we had a fun question of the day. what are they tweeting today? >> they are always at risk. their head is always being called for by somebody but i think dick costello is doing a very, very good job. i think the growth year-on-year is great, being compared to facebook and apple. people are sort of like come on. let's see more. but actually i think he is navigating the course pretty well. guy: how much would you give dick costello so far? >> i would give him 10 out of 10 he is doing a fantastic scrob. the revenue speaks for itself.
it is obvious that the impact of the share price is purely down to expectations not being met. again, as i mentioned before, this is a company in its growth phase, in its early stages of development as company. it is being evaluated differently. it is early days for the company. it has tremendous potential. it is also vulnerable as i said before. i think that is part of the attraction of something that has such a potential upside to investors. guy: does dick costello have to deliver in the next six months or does he have longer? when you're at the top of the company, you always get some flak from somewhere. is the window more narrow than two days ago? >> some might say so. i think that dick should have more time to stay the course. i think he is doing a very fine job. i don't know that anyone could do it better. i think shareholders should give him a confidence to do that.
you're watching "the pulse." the u.s. economy has made a significant comeback since the great recession but one area that remains disappointing is wage growth. that is one thing the markets will be watching. americans are making more money. >> as the unemployment rate continues to drop and the labor market get tighter, people are looking out for any sign that wages are starting to pick up. rising wages could pressure the fed to move forward on hiking rates. thursday we get the quarterly look at the employment index report. it captures employer costs of wages and benefits. analysts except a 0.6 rise from last quarter. if the number comes in any hotter watch out. that could spark market volatility on the fears that the fed could raise rates even faster.
g.d.p. has rebounded. the unemployment rate has dropped a lot and measures of consumer confidence have grown significant. wage growth remains a disappointment. thursday we'll learn if the story is changing at all. francine: for a look at what we're watching the rest of the day, hans nichols is looking ahead to the u.s. g.d.p. figures. g.d.p., hans? hans: the expectation was at the beginning ott year for 2.8% growth. now 1%. the trend for the last couple of years in the states, if you had a first quarter that was disappointing, then the economy has grown above trend. the question is there is something funky going on with first quarter numbers or did the first quarter just have a natural amount of slowdown? if so, why don't you have that seasonal adjustment? expectations for one, but fourth quarter last year, 4.4% growth. it looks like we're going to get a slowdown. i guy? guy: jon, let's talk about the
bond market. i'm looking at the german curve. jonathan: it is a reversal of the trend we had seen. we have seen a little bit of a steeper curve. a nine-10 basis point move on the 30-year and a move on the 10-year. eight basis points higher. that is higher than the yield was. you a supply issue as well. more debt coming. more auctions. italy, germany totaling about 12.5 billion euros. the german auction fell short of target. that is one thing. then there is the lending data in europe that has improved as well. thinking about a monster bet against german debt. the direction of travel has been -- guy: who was it the other day that said this is the short of a lifetime? francine: bill gross.
it will be interesting to have him on actually. jonathan: he puts the bet on though. francine: he isn't say a timeline. -- didn't say a timeline. there is also an interesting note about gilts. jonathan: it is not clear what it means, the u.k. election. is it bad for gilt? is it good for gilt? could it push you toward u.k. government bonds? are they likely to raise rates? it is not clear to me what it means for guilts. -- gilts. francine: thank you. jonathan ferro. guy: and hans nichols. thank you for you as well. "surveillance" is up next live from new york with tom keane. francine: i'm quite excited. we'll be talking about twitter.
year. twitter is not football. and it is timeless a new generation of saudi royalty bushes the old out the door. good morning everyone. this is sursur. we're live from our world headquarters in new york. it is wednesday, april 29. where did the month employ? i'm tom teen. joining me brendan greeley. let's get straight to our top headlines. brendan? brendan: in baltimore, police used tear gas overnight to disperse a crowd that ignored a 10:00 curfew. it was relatively peaceful a day after the city was rocked by looting and violence. violence erupted in the wake of the funeral of a black man who died in plus custody. president obama: there's no excuse for the kind of violence we saw yesterday. it is counterproductive. when individuals get crowbars and start prying open