tv On the Move Bloomberg January 8, 2014 3:00am-4:01am EST
gain for one hedge fund in the u.s. last year. pond,g about crossing the the lew is not so kind to europeans. >> he will be in germany. germany.on >> spit your words out. like justin king. >> he doesn't again. 30 six quarters. we see salesyears climbing. we expected to rise five percent this morning. >> we are up three percent. we are really outperforming. the discounters just eat into
the market share. hundreds of thousands of turkeys over christmas. >> i didn't have one. >> are you going to i the new -- product? >> pay-tv, whatever you want to call it, plus on-demand content. those tvmanufacturing sets but also producing content. sony is putting its money where its mouth is. >> what about chinese markets? >> we are going to get busy. hsbc a little bit higher. you have got the cac 40 pushing higher. it is just about in positive territory for the year.
i want to break down a couple of stocks here in london. fall, but sales would you saw sales were up i 3.82%. they have their best christmas ever. 1.5%.is up another company that reported earnings earlier this morning, the u.k.'s third-largest home builder. over 2 billion pounds. they say they have a solid platform for growth. we are going to have a quick look at the euro-dollar. there is plenty going on around the eurozone. eurozone unemployment due in two hours time. expect a record high. over in berlin he tells the
germans to do more. how things are still bad in the eurozone. when you look at those numbers, not great. >> we will catch up later. communication its and value is the name of the game for 2014. .et's welcome the manager well done and congratulations. the trading year from a global perspective, it dropped 10%, rallies 20%. where are you for 2014? in 2013 the stock market in theed the most country where the interest rate was the lowest.
the policy was more accommodating. year wer should be the see growth picking up. able to justify, at least for the u.k. and the u.s. we are seeing the best stock market and the best on market this year. on equitiest focus for the moment. growth is going to trump. >> yes, you have to keep in mind valuation is around 25 times earnings. so far earnings are not going as much as valuation. a catch.t the otherwise we will have surprise later in the year. >> let's talk about the bond market. we have been above three percent.
you said caution was the byword. there is a 10 year yield at the moment. this morning. >> the equity market is still resilient as long as the rate stays under three and a quarter percent. of refinancing, housing, and so on, this rate is very important. we could see further rise in the equity market. >> 2013 was the year of him in a -- of m&a. i am seeing some notes. you say st. mary's, and ubs says saint very is the the target.
sainsbury'sy -- could be the target. >> we see a big gap in china. of sevenit is average point seven times earnings. it is much slower than a different market. because of underperformance, we &a in the him in a -- m emerging companies. it could be the case here. >> they are saying getting ready for another lowering. they are not all equal. >> we are not the most optimistic on energy markets.
nevertheless, we see some exciting company coming from china and other countries. they are suffering from low valuation. name one have to company you think is sexy or good -- >> in china a lot of large companies like baidu and aly baba are extremely interesting. innovation, a lot of times they are ahead of the u.s. in terms of innovation. >> we are going to keep an eye on broader things. here is a look at what is coming up. one grocery is calling it the best ever. we have more figures after the break.
here is one stock on the move. u.k.'s third-he largest housebuilder. the average price at which they sold their houses up. finish to 2013. we have to eat. reported its best christmas ever. sales gaining over the last quarter. more analysis is our business correspondent, caroline hyde. they do it again. >> for the 36 time. it has been nine straight years, back-to-back quarterly gains. the market has been expecting a decline. they are really bucking a trend,
but king estimates as well. some fascinating facts. 100,000 turkeys sold by sainsbury's over christmas. essex,re in at six -- in one million pounds taken in one day. taste the difference, the more upscale range, did particularly well, as did the convenience stores. sainsbury's local, i know one just opened up by me. they ramped up 15%. they are opening one million square feet of new space. raining back their actual scale on the high street. a more just seen polarized market. you have lidl saying it saw its most successful year in history in the u.k..
half the u.k. population are shopping at the discounters. isertheless, sainsbury's still managing to do well and stealing market shares. about theust talk u.k.. is not that optimistic is it? >> you are right. we get numbers from tesco. shareactually seeing prices climbing on the back of saint very -- of sainsbury's numbers. seemssive promotions don't to be wooing us to send. that is hitting profitability. the consumer has been thought to be week over the christmas period. we know tobacco spending was
down over the likes of december, but is sainsbury's the best of a bad bunch? they feel it will win out tesco's and asda. also worth noting a.insbury's may be on the m& qatari investment fund is one of the biggest shareholders. junta tod be on the take it private. if you are a shareholder you have done well today. it really does beat estimates for its fiscal third quarter. convenience store is right down the street from me. is great with the numbers. >> the execution is perfect.
is one of the supermarkets expanding the most. they are getting a lot higher. are not worried because rates are so low and funding is cheap? >> as long as they can keep growing. qatar could support them if there is a problem. i am not worried about operational leverage. >> we had this conversation about energy, oil, and exploration. gas has been underperforming for many years. why?
kept by a huge amount. nevertheless, the cash flow is lower. see it was down 18%. it is quite low. if they are able to increase cash flow by spending less, we should see better results and better results for the equity because they are more likely to do a bond issue or give back money to shareholders. >> you have a couple of names in mind? lookere is one thing to at. spector is a big company. >> they have a run before christmas. they had a huge oil spill were they gave not as much as we thought they would deliver.
was the biggest oil find since 1974. that, at least in norway because they are such a big layer they are able to squeeze a small minority -- a able toer they are squeeze a small minority. ireland goes to the bond market yesterday. you have portuguese bonds. >> i have been positive on ireland all last year. there might not be a lot of room left. is 4.9% of the debt gdp. therefore, it could be a good candidate. the rate is lower compared to one week ago.
>> welcome back. here are some companies that are on the move. shares of nintendo rose to the highest in two years after china lifted a ban on gaming machines. to protectanned youth from the corrupting influence of video games. unveils chief executive content in las vegas. first keynote speech as yahoo!'s ceo.
ford's chief executive said he is not leaving for microsoft. speculation about his candidacy for the top job at microsoft. withly says he will stay the automaker until 2014. hans, it looks like it has stopped those rumor mills. microsoft'slook at timeline they need someone in 2014. mulally would not be available until the end of the year. mulally is out. he is ready clear about that. he wants to focus on ford. they are deliberating a new --ss cap the ford auto show a new truck at the ford auto show next week. he wants to put it out there he
is not leaving and would not be going to microsoft. plans -- other a list of folks apparently not interested. saw stephen was taken out of the running. and at ebay, donahue maritz. notof these people were interested. is the board having a hard time trying to convince a ceo to run this tech company? >> it is like me saying, i will live in berlin and work between you and david tweed. he has got ill gates and ballmer possibly sitting on the board. i wouldn't like to sit between you. >> the question is who is gains
and who is ballmer. .e have internal candidates those are the three internal candidates we are told are still in the running. the timeline, he needs to have company in to turn this around. the goal was 2013. that has slipped. they have got to do this in a few weeks. they need and name. they need a candidate, and that candidate needs to get along with these board members. >> let's leave it there. the sony ceo is pushing internet-based tv content. we have the latest on the consumer electronics show in lost vegas. step forward. >> sony to a certain extent
putting their money where their mouth is. they are going to be talking to cbs and fox. this, and they are going to roll it out next year -- they don't even have a name. they have got 70 million web connected devices already in people's living rooms. got the tv set. many of them are connected. 25 million playstation threes. those are connected so they can tap right in there. they have got the hardware. this is a crowded space. everybody is trying to get in on it. you have the likes of apple tv trying to get in on it. ofy do produce a lot
content. if you want to innovate you have to be ready for trial and error. >> we zigzag our way to innovation. times we fail. don't recognize or remember any of these products, but don't despair. neither does the rest of the world, so it is ok. making thesebeen tvs for nine years. for nine years they have been losing money on it. they need to look away from that commodity proposition. >> no more commodity products? >> there is no margins. >> who do you watch?
>> double-digit growth over the christmas period. we have got a great scheme. of million pounds worth points redeemed over the christmas period. sainsbury's cfo, john rogers speaking on about christmas sales. that was a first right here on bloomberg. as is "on the move" and i am manus cranny in for sam -- for
francine lacqua. let's give you a quick taste of how the markets are. just slightly lower. we are coming off 5.5 year highs . german exports missed estimates. we are waiting for fed reserve minutes. a 5.5 year high here yesterday and we are waiting for the u.s. adp report. that will give us a hint on the jobs report for friday. currencies -- there is one predominant theme and it is dollar strength. but sterling barely up 0.1%. it is really on the yen and the aussie dollar where you see the mortifying moves of dollar strength. trading near a five- year high or the yen near a five-year low. the number of short positions being taken by the market is a form of high. i call this pre-fed nerves. these are the bloomberg top headlines. colder thandetroit,
the poll yesterday as frigidaire clamped down on the u.s.. ofcago recorded a record low -27 degrees celsius. in new york, temperatures smashed a record set in 1896. scores of flights and trains were canceled and the cold snap who stood oil and natural gas prices. china's second-biggest brokerage is warning that record debt and a trigger financial crisis. that is as borrowing costs in china jumped to record highs. -securities says may rise to 150% of gdp. european lawmakers are racing to broker a banking union deal before elections in may. the talks began as u.s. treasury secretary jack lew begins his tour of europe.
lew is pressing european officials to follow the u.s. in adopting tougher banking regulations. for a little bit more on jack lew's european tour, let's get the international flavor. hans nichols joins me now. what do you make of what we have seen so far? the swagger of lew just doesn't diminish. >> i don't know if swagger and lew are used to frequently in the same sentence. what he is talking about our two separate issues. he is talking about stimulating growth and he is nudging germany to do a little more for short- term growth, aggregate demand, what you can do to boost it. the more important issue is what you do on the banking union. clearly jack lew wants to see more progress there and he wants to see a backstop. secret that we
think having backstops in place is very important. we would like to see more action taken. i think you have to look at where things were just a year- and-a-half ago and where things are now. the question really is, what you do, what does that backstop look like and there he is going to meet resistance from the germans. when he arrives in berlin today he will be meeting with -- the financial minister there. it will be drawing on statistics that alter their case that germany should spend more. can drawraw on -- lew on inflation numbers. retail sales are up, imports are down. what he is going to be pushing for is that germany is doing all the right things. in a lot of ways we haven't come that far since 2009. those initial g 20 summit when the obama administration was pressing, pushing, prodding the germans to spend more and spend faster. >> is everybody ganging up on the germans? i just can't see the germans caving in respectfully to
rhetoric coming from a country that can't pay the debt ceiling. >> it is a fair point. you hear a lot rightly in berlin about how dare jack lew come here to lecture us? in some ways the germans have a new ally. the new central banker in latvia and the ecb today. if you think of a central banking battleground for banking regulation taking place in frankfurt and not berlin, it looks like the germans have one more ally. it will take place in brussels as well. what the germans keep saying is that we want to have some sort of way for bondholders to pay first. they want to protect german taxpayers. they are the final word. >> the last word. angst for that. -- thanks for that. lumbered's markets released the ranking of the top performing hedge funds in 2013. jonathan ferro joins us now with more. cracking article, in-
depth reporting. it looks at the people. tell me about the winner. >> the winner, there are 16 of them. that is how many hedge funds beat the s&p 500. you did not hear me wrong. the winner out of all of them, 84% gain last year, the man larry robbins, the fund glenview. he put his money and hospitals. once obamacare overcomes those legal hurdles, he knew that it meant eventually more people got insured in the u.s.. it meant eventually there would be more paying customers turning up at those hospitals. that is where he put his money. once i gain of 45% by october alone. this man saw the gains in equity markets. he had the conviction to go hard. it was in health care. he benefited from big bet on hospitals.
>> tell me more about the man. there are some wonderful quotes in here about what it takes to get on in hedge funds. >> i think any hedge fund manager has to be two words, over smart. this man is over smart. he said he did not want anybody to "talk over my head pico a working-class -- over my head ad." -- over my he he doesn't subscribe to the investor activism. he cause it suggested his him. a little bit more classy. a man's performance last year. >> he doesn't hold any energy or any mining stocks and once to stick to those stocks that have cyclical growth. that is the americans. good for them. how are we doing in europe? >> not bad. i will give you two words again,
royal mail. two funds that had some stakes in the company did pretty darn well. lansdownek at the developed markets fund, use i gain of 44.5%. tci, just under 40%. the gains here in london. when you see games like 25%, that means they pressure for these guys to deliver. not many of them did. larry robbins was certainly at the top of that list. staying there is the problem. thanks for that. coming up, a bad week for two goodyear executives after being taken hostage by french workers. more on boss tapping -- ♪
for both hours. >> excuse me. >> let's talk about what we've got. we are going to be talking about tech. it is a big story dominating the headlines at the moment. about sensors, wearable tech area -- tech. who is going to be the winner in this space? who are the companies that the smartphone cycle dominated by apple and samsung. who is going to dominate this next cycle? jack lew is in europe. today he is in germany. this is the main event. day that we have seen a slightly embarrassingly strong number in terms of germany's current accounts, he's giving them advice on maybe pumping up the domestic demand story. that is the french finance minister you are looking at their with jack lew. we are covering that angle.
basketball, business and north korea. three things that don't normally go together. but we have got a special birthday it seems in north korea. dennis rodman is going to be there to play a special game of basketball. what is the business angle on this? is there a business angle on this? we are going to talk about that later as well. anna and i up for a couple of hours. see you in a couple of minutes. reactiong me now or a to the latest sales from sainsbury's, let's welcome david gray, a retail analyst. surprised on the numbers? >> i think the numbers really show a general slowdown if we look at the previous quarters. they are now flat. slight concern for the future. i think they reflect a convergence among the big four.
we are expecting tesco to the negative, sainsbury's at the upper end. >> once you've read out the fuel, it was again a consecutive growth. that is nine years. veryare doing something correct. >> absolutely. strongally they had a focus on expansion of convenience stores. the convenience business is doing very well. their online grocery business is also doing very well. i think one of the think they have done really well is a focus on their own label ranges, good quality within their own label ranges. focus on that quality within those ranges. >> talk to me about this. every time we cover retail, no othersere but with around for quite some time, they are the disruptors.
where does retail go? take me forward in time. is it still just slugging it out on price? how does it evolve? >> i think the discounts are becoming more mainstream. the discounters, the hard discounters are moving to introduce more fresh food into their stores, more high street locations. they are becoming more of a challenge. >> so that is going to continue to grow? >> exactly. the discounters still hold a very small share of overall market within the u.k. so they are still a very small proportion. >> in terms of growing their market share, how exponentially could that happen? >> they are growing very rapidly. going to be a very small percentage of the overall market. >> we caught up with the cfo this morning and he talked a lot about the other sides of things apart from food, technology and
banking. again, these add-ons, are we just getting distracted? >> i think sainsbury is diversifying. these areas are going strongly for them. , it isnt to make is still a small percentage of their sales, smaller than tesco. they are now suffering from the fact. >> you say that the online proposition is going to be the winning proposition. discounting on the nonfood side. more priceg to see wars come through in 2014? >> i think so. around ande key that has been for a long time. mccain and prices, being competitive. takeout target?
aty have 25% of the company the moment. du think there might be m&a in this area? >> it is possible. there has been speculation for a number of years. anything is possible. >> marks and spencer is, what is your call? >> improving numbers especially on the food side of the business. we are looking at growth, possibly growth in marks & spencer's. big focus on innovation within the product ranges. in terms of clothing, not quite so good. likely to see declines. overall the food business did really well. i think that reflects the premium end of the market doing really well over christmas. >> great to have you here. analyst at retail planet retail. here are some comedies that are on the move. according to the china business
news. citing the vice president of l'oreal china, it will be the first time l'oreal has put a brand out of the country. will ban the sale of bitcoin and other virtual currencies after china's central-bank tightened relations in september. the company says the move will help protect users. alibaba is china's largest e- commerce website. gap h&m andcluding into tax -- inditex are urging talks to end deadly clashes in cambodia over workers' pay. the retailers called on the government, the garment industry and the unions to begin negotiations. now, it has been a pretty tough week for executives who were
held hostage in the north of france. here with more about the whytice of boss-napping and it happens so often in france is caroline hyde. when thesey shocking executives are being kidnapped. sort of very normal and france. >> pretty by the by. let's go back in history. goodyear, year ago they said we're going to close the factory in northern france. after five years of talks broke down, demonstrations were sparked. later they turned violent. protesters were wounding police. two executives being held. they were allowed to keep their phones, not too awful. it was all about demanding negotiations on bonuses, negotiations on severance packages as this plant gets wound down.
let out after today's. the union still talking tough -- >> these protests do work. >> they have. they're not letting go. the show is only just beginning according to the union. why do they cap using this? it works. caterpillar, 3m, sony, look at those companies on the board right now. phenomenally huge companies managing to eat out more money from them when they hold them hostage. caterpillar back in march, for executives held hostage. they upped their severance pay by 3%. 50 million euros is what they gave out. manager held hostage, i love this. he was given muscles and chips. it was a takeaway. they are not treated too badly. it is just trying to make a precedent.
what they backed down, they are free to go. the appeals court ruled in favor of the workers. despite this tactic, they were given more money after the court ruled in their favor. sony's chief executive was held overnight demanding an increase in severance pay. this tactic can get pretty extreme. a bankrupt auto parts factory back in 2009 booby-trapped the building and threatens to blow it up. it is pretty scary stuff. it does seem to work. i am told that some french executives actually go into work with more underwear just in case this might happen. [laughter] there is a serious note. manufacturing pmi is worsening in france. -- whywould you invest would you look at france as a definition -- destination for investment? safe to go.
two executives have been given free to leave. the unions saying the show is only just beginning. they now plan to occupy that plan. >> caroline, thank you. as we had to break, a ceo is shown the door quite literally. letterobile chief john was kicked out of and at&t event at the consumer electronics show and must biggest. the latest in a mighty rivalry between the wireless carriers. they said he went to see the party, to see the rapper macklemore perform. stay with "on the move." final thoughts with our markets team. what a shot. ♪
>> welcome back to "on the move ." i am manus cranny in london. this is a stock that is more than moving. everything that you want for young kids, 31%. the problem is with this retailer, u.k. retail sales are own in the u.k. full-year profit will be below target. j.p. morgan cuts the stock to neutral and slashes the price ofget down 26% to a level 335 pence. let's check in with the team. a few other interesting moves.
sainsbury's started the day on the up. >> now the stock is down. we have the chief financial officer on the conference call saying, our sales aren't going to be quite where we anticipated for the full year. we are expecting sales to be 1% to 1.5% higher. he is showing -- saying they will be just shy of 1%. that mother care news shows the diversity we are getting on the high street. people are not coming in and buying. -- nine yearsns of sales on the up. >> let's talk about these markets. they are giving back a little value but i am noticing some of themopping up again. , youming back a little bit see the ftse down by 0.3%. we are a vent heavy this week. we have the ecb, the bank of england, a rose friday. >> for me, i think they're going
>> giving the germans a hard time. the u.s. treasury secretary, jack lew, pushes berlin to reverse the country's widening trade surplus. >> alan mulally bows out of the race to run microsoft. >> and another big unveiling at the consumer electronics show. sony takes on netflix with its own internet-based tv service. good morning, everybody. you are watching "the pulse." we are live from bloomberg's europeea