♪ >> versus european open. it may very so shortly i am guy johnson. matt miller is in berlin. average winning theak is 12 sessions spread octave of march jumped to over 50%. will the president look up to expectations? he will outline his budget plan to congress and he will go big on defense spending. what about the infrastructure

story? a major brexit, the former minister -- the former prime minister is setting expectations too high. we will talk about death you will find out when we speak to the head of the chambers of commerce. >> a half-hour from the open of trading. oner 12 consecutive highs the dow jones industrial average we have futures pointing higher. asian markets rallied overnight and gave up the ghost into the close. you could see little change at the open. as far as the bond trade is going in germany, we are seeing yields rise as traders sell off the debts. this is a to depart, the yield -- 0.203.int yields rising a little bit and get have been up as traders

complacent ahead of the speech. absolutely be critical. the dollar is down versus the end, down versus the swiss franc. and if bit of litmus paper. the british pound is softer. we watch and see how that reads into the sterling story. top.ntioned this at the interest rates possibilities going with a march contract. we have seen a significant meeting. of the march the rate of change was really important. we will talk about that as we

work our way through the program. >> raising defense spending a 10%. the $54 billion boost would be offset by most agencies with the state department and epa hit the hardest. it is the highest level contract between the two biggest economies since the election as concerns over the nuclear program overshadow campaign trade. wilbur ross is being confirmed as u.s. commerce secretary. it clears the way for one of the key trade officials to take office area officially sworn he gives hiss state to congress.

the special coverage begins at 2:00. users can follow the news at bloomberg go. auditors are pulling together a list of policies to unlock the about fun. according to two people familiar. himbtle mental mentor and of understanding from european leaders. kris has asked for memorandum of economic and financial policies as it braces the details. major has attacked theresa may's brexit strategy warning she is making undeliverable promises and should prepare people for the compromises that will come out of her negotiations. a disregard it amounts to contempts.

obstacles brushed aside as if no consequence while opportunities are inflated by any reasonable delivery. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. think you very much. the pound is down on that story. split.ing headlines, a the british chambers of commerce is about to get underway. the release of its report, brexit business principles. good morning. i want to take you back to what john major is saying. obstacles are being brushed

aside as of the consequence. his assessment of what number 10 is doing right now. >> basic propose of -- they see periods of time -- it's not quite that pessimistic. a lot of people getting on with business. looking forward to the opportunities the change has to of those changes into how it may affect the business models. a mixed picture out there. calls for aport focus on practical solutions rather than ideology. are you concerned there is not enough being offered? >> there's too much focus in politics and in the media with the ideological elements of

this. it is the everyday stuff that most care about. who can i hire? can my goods reach their destination etc.. these are the sorts of everyday questions up and down the country. matt: when you're appointed director general of the chamber of commerce, he said he wanted to represent your members from all nations. do you still feel at the european? -- do use -- do you still feel like a european? >> businesses are going to be trading the matter what happens

with politics. we have sure member that businesses trade up governments. i have no doubts that into the future that will be the case. he likes of businesses along the country will happily say yes we are european businesses, we won't be in the you -- we want to be there anymore. >> they will not be trading much if they lose access to the markets. tony blair recently called for another referendum. do you think your members would be for a reversal of the brexit vote? >> our members are very clear that this is happening. what they want is for us to happen on a good terms. they want to those practicalities, customs, the labor market, taxation, future relation and the next. that that is transition can be focused without too much friction.

i don't think there is appetite for the additional uncertainty that more political ups and downs will bring. they want to see this brought to a logical conclusion. is there is sensitive government is focusing too much on brexit and not dealing with the details that affect businesses on a day-to-day basis? one that is certainly affected many businesses. is there too much focus on one side of the page? >> we have been saying that a ambitious domestic agenda is as if not more important than any eventual brexit deal. the high upfront cost of doing business as exemplified by the business rates today is something we need to deal with if we are going to see those investments and strong competitiveness in the future. the fact that we so -- have so many vacancies in our business. they want to hire lots of

people. we need to get our training system rights. guy: do you think the government can pick winners? -- is thatsense that a level playing field for british business? >> we are not essential-based organization. we have 52 chambers of and down the u.k.. what they tell us is they actually want a brexit wheel that focuses on the impact on places and real-world businesses, not necessarily a deal. they want the broadest possible deal that gives them the most frictionless trade possible. they want an ambitious agenda with the rest of the world. they are saying with lower sterling and the prospects of new trade deals they are looking at other markets. the rest of the world is certainly on the horizon for many businesses as well. marshall, joining us

from westminster. barcelona or the ceo is standing by to speak with this program. president trump will lay down the budget plan. how they are positioning themselves ahead of the congressional address and later. starbucks ceo says china will overtake the u.s. in terms of stores. that interview and plenty more to come. this is bloomberg. the open is 18 minutes away.

guy: let's catch up with juliette with the bloomberg class. >> south korea's special for other -- executives. formal charges would mean he stands trial over accusations of involvement in bribes to government figures. samsung will disband the group's strategy office which oversaw long-term planning and coordination and stuff with the government. they have denied wrongdoing. takata has pleaded guilty to one misleading commenters to the safety of the exploding airbags. they enter the formal plea in detroit federal court six weeks after reaching a $1 billion deal with the u.s. justice department.

the product seven links to at least 17 deaths worldwide and subject of the biggest product recall in history, expected to cover more than 100 million airbags. the head of the world's biggest mining company has intensified his warnings that u.s. trade protectionism under president trump will threaten growth and the like against poverty. enter mckenzie spoke to bloomberg. >> the world is probably around 3%. we have to get back to 4% and this will not happen under a protectionist regime. some good, some pretty bloody awful. that is your bloomberg business flash. we see french data that misses the mark here, coming out with inflation year-over-year.

the survey had been for 1.5%. french inflation matching the mark to some extent. let me grab it out so you can see what it looks like. this is a picture of the last five years. there was a big drop at the end of 2014 and we have had a pickup, almost 1.3%. now we have rolled over. very interesting french data. you can be sure they are looking at this very closely as well. let's go down to barcelona. caroline hyde is at the global world congress in spain where she is joined by a special guest. great to see you again. the fastest one of telecom operators, 70 million customers. nine different countries.

digitization is a big struggle. how are you doing? >> we're focused on mobile. able tohe end of being price back in 2012. since then we have been very much focused on ruling out 4g atworks that give customers good experience of streaming video. every time they consume more and spend more time in the network we stimulate demand, services, content from hbo. then we start to trade them up with bigger buckets. we are starting to see more mobile operators. is that something you're looking at? much focused on

partnership with partner creator -- content creators. video consume so much of our network. we help them launch in scandinavia. with them -- as more consume video, the more likely they are to trade up. reporter: you have been investing heavily in 4g. . shift tou approach the 5g which seems -- >> south korea and japan have the best for k availability in the entire world you the next countries lithuania. .weden is way up there greatness about 5g is it is

still on 4g technology. those of us that have great covered 4g networks will be able to build 5g. need foris a consolidation. you bought tbc in sweden, you're able to boost your overall growth and people that you serve there. should m&a be easier? >> we are believers in market consolidation and having the rights number of competitors by markets. there are some markets in europe , and the way you are seeing the markets converge, the guys are in the past has been very focused on for mobile players per markets. a think that is the wrong

segmentation of the markets going forward. make suretor needs to to look at states and mobiles. there are some markets where there are conversions recently. almost 90% of the market. maybe those markets should not have those going forward. you need a strong challenger to fight against the two big players like that. reporter: as a ceo of a e.u. based telecom company, a scottish accent, how are you about the eu in general? the political environment that surrounds at the moment. one of your second-biggest markets, evidence has an election coming up. are you optimistic of >> thereic customer opportunities for many. there is a rising debate between

the haves and the have-nots. it is not affecting me. we are the challenger. we are always focused on getting great productivity as great price. we see ourselves as one of those brands that is gives opportunity to all. >> if you are going to the regulators. his or something that would make your business easier to work in at the moment? what are you calling for when it comes to the next generation? >> we work in a regulated industry but we want regular and to not get in the way of us being able to deliver a return to the shareholders. investors want to invest and as

a result consumers get a great products and great experience. regulators work with us but not against us. so wonderful having you with us. huge player across sweden and the netherlands. exceeds even kazakhstan. matt: caroline hyde at the mobile world congress in barcelona. president donald trump's budget plans will be unveiled when he uses his first speech to congress later tonight. he will spend big on infrastructure. we have gotten nothing more substantial than that. expanding the defense budget by 10% according to his advisors. mark cudmore joins us from singapore without how this is affecting the markets.

the dow jones has its 12 consecutive world records. what do you make of that? >> that is long equity, short treasury come along dollar. some of those have been trimmed though it does not. as you mentioned. number could is still answering this with a lot of hope. it will deliver something they can claim to. you have been worried for a couple of months because of donald trump's behavior before and after he came to the white house. when are you going to be right? a great question.

there are two different things going on. he is thomas delivering the policies that the market was originally hoping for. going intoot of cash the election and you are seeing a lot of that being bought. heavily might correct but that is not or you should look for the immediate correction tonight even with. will be where's happens first. if we break 2.2% yield, as will feature other markets. there are other things going on. there was money on the sidelines. the rate of change in the repricing over the last 48 hours has been something to pay attention to. what caused the reassessment of the meeting? >> it is causing a lot of

confusion area this morning i was quite surprised. a lot think it over slot slightly. if he suddenly says there will be a big infrastructure plan and gives some details, the market might get excited. of course you have those coming through tomorrow this will get a extra nudge for march. much is still possible but i think this is about risk premium and we will see worse as the expectations gets priced down tomorrow. guy: looking forward to that pce number. a strong pce maybe that changes it as well. check it out as we go to the office. he may be confused, he may be right sometimes as well. go there first thing in the morning and check it out. coming up, the market opens.

you just are pointing to mixed in europe. where slightly positive. is bloomberg. this is the open.

guy: a minute to go until the european equity markets open for the session. is pointing to that on the screen. as you can see, we are expecting, i don't know, 3/10, four tenths of 1% higher. .t will be interesting to see currency markets on the move a little bit. what is interesting is the bund is catching a bid over the last treatment as well. matt: we should see some swings in this market. i have a chart here. #btv.g you can easily find this. you can see future is open

interest. the blue line is at an all-time high. it monthly options volume also very high. traders betting on volatility, so at some point, we should see big swings either to the upside or to the downside. maybe after donald trump's speech. guy. let's find out exactly how that market is opening here in europe. we are expecting a positive story to come through. it is positive. last 15 minutes of trade. stocks marks up a little bit this morning. not a lot. we are seeing some positive performance coming through here, but it is not exactly a blow away performance. caccap hurons -- the opening positive. manus cranny. over to you. manus: guy johnson, thank you very much great european stocks have dropped. the longest losing streak since last year. up .21%.

anna and i caught up with this ceo. be brave, get out of there, get the messagewas from the bank ceo, who noticed a thing or two about selling bad loans. making the point about global growth. what more will donald trump do for that ignition? up, it is a compliment he chose that even though -- it is of course about this raising open interest. that is the blue line. on the other side of the equation is the lowest since 2014, volatility at the lowest since 2014. the open interest number tells us there should be a preparedness. the markets are essentially

underestimating the potential risks in europe, most especially in france. if you are underestimating the risk that you have taken on some security and hedging, this is terms.n european you are seeing a slightly stronger run. this is the highest since september before we go into the election cycle. so, a compliment from you, matt, that you chose exactly the same divine it inspiration. matt: genius minds, manus. the samends are on track. let me show you, breaking news, the bank of japan is out for the first time giving investors a heads up, telling people when it is going to make its monthly jgb purchases. you can pull up a page for almost every major central bank on the bloomberg. o> for this.j

here you can get all the information you need. the boj going to announce dates for monthly jgb purchases for the first time ever. the third, them, eighth, 13th, 21st, 31st. guy: it is interesting to see how they manage the market as well, delegating risks. it is interesting to see how it is working in terms of the clarity they are trying to provide for the market. as you can see, this chart, i stripped out all the noise and this is the change we have seen over the last few days, this rapid repricing of the probability of march delivering. we are north of 50%. it puts march back on the table in the way some people really have to believe it would be. core pce data is out a little

bit later on. you can go to your eco-screen, or as matt likes to do, the other screen. you can see core pce coming out a little bit later on. that is the u.k.. i'm looking at the wrong one. that is what happens on live television. we are going to be paying a lot of attention -- i clicked on it. matt: good, good, good. usually, for me, eco-go defaults to the u.s.. guy: maybe because of your absent. matt: maybe it is, or lack there of, possibly. [laughter] matt: let me show you the dow average, 12rial consecutive record highs for the dow jones industrial average. amazing streak, and it is even more amazing. you can click on max and show the dow over the last, since, 1872, and you can see

the amazing climb here. if i go into chart, i can make this a much prettier line, and bear with me. it will take a little time, but it is worth it. here, you can see the hockey stick. this is like an al gore "inconvenient truth" climb of the dow jones industrial average. this massive climb through the obama administration and here, this pop with donald trump. a toof multi-asset income talk about what is going on. when will it end, john stopford? has: we think it probably got more to do with the macro environment and earnings backdrop than it has particularly specifically with donald trump eerie he can add to the bullish sentiment and we will see what he says later today, but fundamentally, we are seeing a pretty strong rebound

on a fairly synchronized bases around the world. we are seeing earnings revisions picking up anything that is driving equities, and when will it end? typically equity market, bull markets, and with recession. we see no evidence of recession is anywhere on the horizon. you see no evidence that a recession is anywhere on the horizon, but do we have to have that? if the fed starts to raise rates and they want to do it two or three times this year, and if donald trump's policies, particularly the more protectionist policies, although that term is loaded, kind of scare investors, could that stall is out here, john? does certainly of donald all the bad stuff and none of the good stuff, there is some expectation built in, and i think people are hoping for a pro-business speech this evening without too much emphasis on some of the sort of negative trade and other aspects of his

think thatyeah, i could definitely change expectations. thatss the issue is, it is a turn or the basis for a correction? we have moved a long way. we will get corrections along the way. it is just whether it is the beginning or end of the bull market. calls runs like this. raising rates causes recessions. the last 24 hours, we have seen a repricing. plus 50% on my screen. is the fed line the curve, because the language we are getting from the fed is not being heard by the market, yet it is indicating it is beginning to get worried. john: i think the fed is much closer to a point where its twin mandate is being met, so it is not surprising that maybe they are beginning to feel a little bit uncomfortable with just how accommodative monetary policy

is, so even if you pursue that real interest rates are not going back to where they were precrisis, they had to go higher than where they are today. it is a question of speed and agree, so 25 basis points in march, personally, i think it is quite a good idea to get another rate increase out of the way, create more flexibly for the rest of the year. if you are unsure about whether you are going to do two or three rate increases, get one done early. guy: no fed is going to cause a recession? john: we are moving into an environment where we and a potentially with boom and bust, and economy that overeats, particularly fiscal policy adds ,o the sort of growth picture late in the cycle, and we typically would potentially get a latent cycle tightening from the fed and maybe they are a bit behind the curve and maybe they have to pick up the pace at some point, but i think that is the story may be for late next year or even into 2019, rather than a 2017 story. guy: the thing with a bull market is you don't want to miss

the last bit because it is always quite punchy, that last leg higher can really deliver. john: people have been fairly reticent about this bull market all along. they bought high yield, other areas, which have seen safer equity through the flow into equity markets until recently has been more timid. maybe their scope for the final rotation, ball mark is typically ended euphoria. euphoria. we are beginning to feel more euphoric, but there is a lot of skepticism. matt: john, the fed, let me get basics.the bak joblessness, unemployment, how do they balance that with record highs on the dow on an ever strengthening dollar? how much weight do they give to those letter to issues? -- latter two issues? john: employment and inflation.

they are not that renting. unemployment is clearly down to levels which might be associated with full employment, although wider measures are still suggesting there is fair capacity. inflation is really the thing that has -- headline inflation is higher, but wages and core inflation are not yet particularly threatening. i think they do obviously look at financial market stability. maybe that is their third mandate, but i think it is third andher than front center. we had to pay for during the week from john williams from the san francisco fed, and one of the issues is about where ultimately real interest rates end up. they end up much lower than the past, and the danger is low real interest rates continue to stoke asset bubbles, so they have half and eye on those sorts of things. i think it is hard to say. further, clearly, that might become a bigger consideration for the fed in how they set policy.

john.great stuff, you are going to stick with us. john stopford, head of multi-asset income at investec asset management. major fallout. a former u.k. prime minister flames theresa may's brexit strategy, accusing her promising the undeliverable. is he right? more on that next. the interview with the ceo of starbucks as the company prepares to enter the italian market. we quiz howard schultz on his approach to taxes, a big issue for that company lately. and, it is billed as the world largest private equity venture capital event right here in berlin. we are at the international conference. all that and more to come. this is bloomberg. ♪

guy: welcome back. you're watching the european open. we are 14 minutes into equity market trading in europe. we have totive -- the dow has had 12 sessions, and we keep going. at the moment, a fairly flat open in the states, so it will be interesting to see how that one trades its way through. which stocks are moving the market? i can attest to that. let us go to nejra cehic and find out what is going on. pretty bigre seeing moves in individual stocks, as

you can see, starting with this company. that is probably seating revenue, which was a beat as well. dividend perear share, so it was a beat on the estimates for a lot of those numbers and they also talked about improvement in operating margin and cash conversion by 2021, so that is one of the biggest gainers is not the biggest gain on these stoxx 600 right now. these numbers came through after the market close yesterday, so we are seeing the first reaction now, the biggest movers up 4.5%. the four-year that came in at a miss, but some of the markets were focusing on the ebit number, indicated in the called and the company proposed a 74 euro cents per share dividend, so another gainer here. on the downside, a supermarket -- money supermarket moving

lower at the moment. got a flight beat on a number. the company announced a share buyback program, but still, we are seeing this down. it could be because the company said revenues are currently behind last year. guide. -- guy. guy: he has used his first speech to attack theresa may's brexit strategy. john major accused may of being dishonest with the public about what works it will look like. he said, "the british people have been led to be unreal and over optimistic." john stopford is still with us. does theresa may have any choice to say i will make a success of brexit? john: i don't think so. it is going to happen. she has got to do the best deal she can. by going down the route she has politically, she has done very well. she has managed to unite the whole of her party behind her,

and that is winning dividend as we saw last week. politically, it is my. i do not think she has got a choice. i think she has got to try to go for the best deal she can. guy: the reality looks very they have the backing of the most senior political figures in europe. he is likely to drive a very hard bargain, and with the greatest will and the world, i'm not sure that hard bargain is being laid out to the british people at this stage. clearly not going to end up with as good a deal with europe as we had before, and so, that does have some consequences. i think europe would be stupid if it went, you know, and burnt all bridges. it ultimately needs to trade with us, and i guess theresa may is hoping she can do some offsetting deals with other parts of the world. she seems to be having a bit of 11 with donald trump -- of a

with donald trump. that is partly reflected in sterling, in interest-rate expectations, you know. we do not know how it is going to pan out. it will take time for that to become clear. matt: john, is there any chance of this changing? i mean, i was pretty impressed by tony blair's speech asking for a second referendum. is that a possibility? saw an article yesterday where said tony blair and sort of other people, george osborne, to some extent, are fighting last year's war. there is truth in that. clearly, there will be an attempt by the house of lords to try and adjust the deal or address the deal. parliament will have some sort of say, but fundamentally, i think that ship has sailed. i do not think we are going to go back and have another referendum, personally. matt: and so, how detrimental do you think -- i mean, we were talking to adam marshall earlier, general director of the

british chamber of commerce, and he seemed oddly optimistic. i guess you cannot expect a guy in his position to be openly pessimistic, but aren't british business is going to severely suffer due to lack of entry in the single market? said, i thinks i it depends to some extent what deals are done generally around the world. maybe this is the opportunity to strike new deals. i think certainly, it is potentially an opportunity to get rid of some of the restrictions that may be come with european membership, so maybe more deregulation, more business friendly policies. is that enough to offset things? i have my doubts. i think we will have a long period of uncertainty. eventually weaker investment. it will be tough. you know, sterling obviously helps a bit, so the pound is considerably weaker and makes us a bit more competitive, and what is going on in the rest of europe, you know, is not plain

sailing there either. i think it will turn out ok, but i think we have got some difficult times ahead. u.k.would you buy assets train now? i think the-term, story is still pretty good. we are a reasonably business reasonablyace, good of a structure, good business, good people, so yeah, if you are taking a five to 10 year view and you're prepared to ride volatility, why not? particularly if you are buying stuff with dollars or euros given what the pound has done. guy: you are happy? the pound is cheap enough for that to happen? john: medium-term, ultimately, probably the pound eventually recovered somewhat. shorter term, there is still a lot of uncertainty about how we fund our position. guy: is there a better buying opportunity coming up? looksthe pound these days more like an emerging market currencies and a developed

market currently. i would not be surprised if we saw tempers and up, tempers and 10% downhin -- 10% up, within the next year or so. you sell rallies and by dips and ultimately, around these sort of levels, looks sustainable over the medium-term and probably we recover. guy: john stopford, head of income at investec asset management. story after the break. this is bloomberg. ♪

matt: welcome back to the european market open. i'm matt miller in berlin. guy johnson alongside me at our european headquarters in london. china will set lower economic growth targets to monetary expansion targets this year as policymakers look to curb excessive credit growth, according to economists surveyed by bloomberg news. the 2017k it will set gdp growth goal around 6.5%, compared to 6.5 to 7% in the year before. still with us is john stopford, head of multi-acid income at investec asset management. do you think this is due to sort of a wariness of the new u.s. president? john: no, i do not think so.

i think it is realism, but china has been on a slowing path for a while and it is stop and go, so when growth slows too much, they ease and when things get overheated, they cool it down again and i think over time, china's ratcheting down to hopefully more sustainable but ultimately lower growth. they don't want it to happen to quickly, so it is a very managed economy. i'm sure we would love if we .ould say it will be x percent the chinese have enough control that they can just about manage to get things to work as they want. guy: with all the most senior chinese diplomat yesterday having a brief meeting in the white house. a short meeting with the president. my sense is, though, that the chinese-u.s. relationship is not going to be as bleak as maybe we first postulated it might be posed the election. how does that get priced back in? john: i think you are right.

donald trump negotiating style a sort of the both story and then work towards a compromise, so he puts people on the wrong foot. i mean, i think in terms of market, anything that ends up being less bad on trade them people fear, and more positive maybe on other things like stimulus, you know, ultimately, that is just going to be grist in the mill for financial markets, so you know, if you are right, that is pretty good news for a continued bull market in equities, pretty good news for the sort of relatively benign backdrop that we have got. john, you aret, going to stick with us. john stopford, head of multi-asset income at investec asset management. francine lacqua has been speaking with the ceo of starbucks in milan.

hear what he has to say about the company's tax policies as it enters the italian market, next. this is bloomberg. ♪

matt: donald and the dow, the industrial average's winning streak hits 12 -- the odds of an interest rate hike in march jumped more than 50%. will the president live up to expectations? tonight, he will outline his budget plans to congress. we now know he's going to go big on defense spending, but what about infrastructure? brexit, the former prime minister warns may that toois setting expectations high. good morning and welcome to bloomberg markets, the european open. i'm matt miller in berlin alongside guy johnson at bloomberg european headquarters in london. tradingminutes into the

session, matt. let us see how things are shaping up. european equity markets going nowhere fast. the action is below the surface. europeans are at least positive, but only just. wait and see what core pce delivers later out of the united states. that is the biggest piece of data we are taking today. we find out what happened on the hill and what exactly the president has to say. let us talk about the big, the great white whale. starbucks is a up shop in italy for the first time in milan. up with lacqua caught howard schultz, ceo starbucks. she asks him about the company's tax policy. m, withoutthink, u criticizing any particular person or municipality, sometimes, a company that is as iconic as starbucks gets pulled into things that the whole story is not really told. we take 18 million pounds of tax

last year in the u.k. i think that is a mimetic of our commitment to do things the right way. i believe 100% in transparency and want to do everything we can to make sure there is trust in everything we do, and we are an open book. it impact your customers, the perception of taxes, refugees? do you do it as a ceo, no matter what? howard: we want to pay fair and equitable taxes. 100% of the time. never do anything else that would even remotely be inconsistent with being ethical and doing the right thing. with regard to the decision about refugees or things of that nature, i think it is important to embrace your core purpose and your reason for being in all aspects of the business, and leadership and being a strong leader cannot be when it is

convenient. it is easy to be a great leader when you have the wind at your back. it is harder when you have the wind at your face, and i think leadership is defined many, many times when you have to make a tough but just decision. guy: boss of starbucks. taxes have been a subject that has been close to starbucks's heart, probably not the way it would want, but nevertheless, it has been there. big multinationals -- how bht works, how a border tax could potentially work. still with us, john stopford. with the u.s. moving to a border tax -- without the ability of? john: i think you would be raising taxes at a point when people are beginning to worry about inflation and it would squeeze consumer incomes. i think it would lead to

retaliation potentially because it is not clear that it is within the wto rules, so you end up with risk of broader trade wars. i think there may be other solutions which are less damaging. guy: you just have to make it into a b.a.t. system. john: it would potentially be complicated as they are levied out of a state level, so i'm not but that is a fire either, it would be a neater way of doing it. matt: john, german chancellor , christian caron, the chancellor of austria, have both attacked starbucks or it also, both trying to get more money from the googles and facebook of the world as well as apple. as the european union kind of tighten the vise on corporations , is this kind of a silver lining for the u.k.? can the u.k. attract more business by becoming a tax haven? john: i guess so. that is one of the things may be

fears and one of the bargaining ofps they have with the rest europe. if you do not do a good deal with us, we go our own way and go for the sort of, you know, low tax, low regulation environment which europe would struggle with. think it is a negotiating position. i think it may happen. it might be more in keeping maybe with the traditional conservative mindset, although as we have seen, maybe theresa particularly traditional conservative. of is more with the boom recent years, and that it's fair enough, so it is possible, but i'm not sure it is necessarily the way the u.k. is going to go. guy: do you feel like, john, the e.u. quds force other countries out -- matt: the e.u. could force other countries out? ireland and the stripping of irish sovereignty that seems to

present? john: i think europe has got a major problem. the issue of sovereignty and control is something that electorate are clearly uncomfortable with, and we have not got the sort of harmonization and lots of areas you would hope for if this was a union that was built for the cracks areand the there, so i'm very skeptical if we carry on down the current course, that europe will exist -- that the e.u. will exist in its current set of five to 10 years down the line, so i think they need to do a lot if they want to keep it together. you for yourank time here on bloomberg television this morning. we are not letting him go just yet, but we will be going over to dab digital radio shortly and we will take john with us and carry on the conversation there and talking about what is going on later today in terms of the data. some of the important things you need to be ready for pure breaking news, you can see this

at your tv page and you can get onto the tv stream, bloomberg radio stream, get out and deal with the major events are. coming up later on today, jp morgan investors, mr. harper speaking, and of course, president of the united states addressing a joint session of congress. let us know how we are doing. let us know the questions you would like asked. we will speak with the ceo of the automaker about the cars, the future of the car, how it is going to work and change. we are going to do that at the mobile world congress in barcelona. we will be talking to a car company at a mobile convention. ♪

matt: welcome back to the european market open. the mobile world congress is underway in barcelona, an annual gathering of the big movers and shakers in technology. it is not just electronics makers and focus. leaders on the auto industry are also at the event, a man -- cariling the latest in connection technology. caroline hyde by with a guest. caroline? >> this is the chief executive uca.iat, look at a male -- l owned by volkswagen, the german giant.

a mobile event. why? >> it makes a lot of sense to be in the mobile and obviously, we are the brand of barcelona, so i think the natural, especially because we are investing a lot in connective cars and you know, the big frames, and we would like to be a front-runner, so i think it is a great fit, and the reaction is very good. luca: i mean, we do not know until the wall thing will developed, but it will be one of the field will be specialized because our customers are very young, asking not to interrupt the digital experience. connective cars will be the next big platform for mobile together with the house. caroline: you have been writing in the u.k. press. article saying you want

to compete also collaborate with technology. you are working with apple, samsung, as well as google. are you really going to collaborate? don't you really want to own the whole ecosystem? you don't want to give it away to the tech giants? luca: i think the digital world is completely different from the traditional. we are used to work sequentially and emerging with the production. i think we have to learn to be open and be able to cooperate, and so, it will be some kind of formal, i don't know, i don't want to invent a new english word. petition. caroline: what about the way in which we see sales progressing? aboutryone is talking automated vehicles, sharing vehicles, you will not just on yours but be able to pass it around and the minute it drops you off at work, it can pick up another passenger, doesn't that theoretically reduce demand for cars for 2020, 2030? luca: potentially, but right now

in the city, there is a lot of car sharing activities and companies. the car sharing -- nobody knows if this thing will be 5%, 15%, 20%, or 30%. 50 years ago, there was no rent a car, and now people are using it. i think we need to get used to say,new form of, let's mobility, and get organized to be able to offer this as a as any or let's say provider to some brokers that would offer the service. i do not think it is just -- we are used to it. caroline: you spoke about how your buyers are very young. you feel you have got the youngest car purchasers out there compared to any other car company. how do you feel growth is at the moment? what is demand like? how does 2017 shape up for fiat? luca: we started very well.

in general, 16% growth, in a double-digit growth period. we see 2017 as our year especially because we will be launching next week the big products for us. caroline: [indiscernible] luca: and then in september, we will have another, you know, so the suv coming, product cycle for us is very favorable, and we see some light spain and italy growing as they are rebounding from a difficult time, so this is the center of gravity from a commercial point of view of sales, so we look at 2017 with optimism. caroline: fascinating company because you are based in catalonia, owned by a german giant, prevalent across europe. what does the e.u. in its political situation, how does it affect you? luca: uncertainty is always

present. you need to have a little bit of authority and perspective. we are an international company and we have to adapt to what is the outcome of our elections or happening, that are so our job is just to adopt and find the best solution to respond to what is, you know, the markets are saying, at the authorities are saying. we feel uncertainty, but right now in the numbers, we actually see the opposite. see how: we'll technology continues to affect your business model. thank you very much. de meo, ceo ofca fiat. guy: what else is happening in the stocks story? find out. here is nejra cehic. nejra: i showed you some of the biggest movers in terms of percentage moves just about half

an hour ago, but there were interesting stories to hone in on. management succession. bellamy's tovid step down and another will succeed him. a record high because of record fund inflows in the fourth quarter, but today's drop, down 2.9% right now, the shares have dropped as much as evan .2%, and that is not only the biggest job since brexit, it is also a 2017 low for st. james's place. moving on to one of the gainers, les up 1%. the company sees profit rising again in 2017. it is also proposing a dividend anone euro 60 per share, increase of 18%. i wanted to show you for his fresnillo. we are seeing the shares lower today.

we did speak to the ceo earlier this morning, 8vo, -- octavio. >> we are bullish on the long-term, but of course, we focus on what we can control. control,cused on cost cost reduction, efficiency, cooperation, and with that, we go to the cycles of our industry. nejra: a pretty good run recently up 15% year-to-date. something like nine weekly gains in a row. guy: bloomberg first word is. sebastian: in the u.s., president trump will raise defense spending by 10% in his first budget for the $54 billion boost will be offset by cuts to most federal agencies in the state department and epa, hit the hardest. met thetop diplomat u.s. president last night, the

highest level contact between the world's two biggest economies since the election as concerns over north korea's nuclear program overshadow campaign tensions over trade. it clears away for one of donald trump's key trade officials to take office. he is slated to be sworn in later today as the president pairs for his first address to congress. you can watch president trump's here ono congress live bloomberg tv. our special coverage begins at 2:00 a.m. u.k. time. greece pulling together a list of policies the country needs to pull together. the country has requested a draft of the memorandum. economic said greece's and financial policies brace for details of demand. minister johnime

major has attacked theresa may's brexit strategy, warning she is making undeliverable promises as she prepares for the comprises that will come out of negotiation. accused brexiteers of treating the losers with "a contempt."nd the british people have been led to expect a future that seems to be unreal and overoptimistic. obstacles are brushed aside as no consequence while opportunities are inflated expectation ofle delivery. powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. matt: thanks very much. up next, the world largest private equity and venture and it is right around the corner from here. we are heading to the international conference in the german capital of berlin. this is bloomberg. ♪

matt: welcome back to the european market open. it is super week, the week of the super return international conference, billed as the world largest private equity and venture capital event, right down the street from me here in the capital of germany in berlin , and one of the speakers at the event joins us live. it is bloomberg executive editor jason kelly.

great to have you in germany. jason: it is great to be down the street from you. and: why don't you go ahead -- [crosstalk] jason: go ahead, matt. matt: no, i was just saying, you are there with alec macpherson. jason: i am here without macpherson. it is great to be with you. super busy day here in berlin, and a lot of talk about venture capital. the appetite for venture as part of this broader private equity class seems to be really robust right now. what is going on? alec: i think you see this from last year when they did that first venture day here, and this year, they have extended it out to a wider program with two full days on the monday and tuesday, the impacttion of that particular lead the european venture is having in

the asset class. guys have been making quite a bit of money over the last nine to 10 years you have been doing this and especially of late, even in a pretty rugged world from a geopolitical perspective, do you see any worries around that going forward? alex: what we are seeing is this change in the way, actually, entrepreneurialism, is viewed in the u k and europe, and that has provided us the opportunity to raise funds and back some really extraordinarily talented entrepreneurs who are looking to build big global businesses and it is a result of that that we have had the opportunity to deploy that capital to those individuals. jason: you cannot talk about the u.k. these days without talking about brexit, obviously. how does that play through from a fund-raising perspective and from a dealmaking perspective? is it flowing anything down at all? alex: immediately post the brexit vote, there was a sort

upon, and really, people trying to work out always happening, but i talked about that groundswell of entrepreneurialism that is coming through in the u k and europe, and these entrepreneurs face huge challenges everything will day, and brexit is just one more challenge they had to overcome. guys are agile, so when they are entering new markets and creating change, that provides them almost with an opportunity. do you worry about losing entrepreneurs from london? they have bolstered the tech presence, as you mentioned. berlin, where we are, they have a robust presence as well. do you worry about brain drain at all was brexit alex: if you -- brexit? alex: if you look at where the markets are and what you are addressing, let me take an

example of artificial intelligence. over the last couple of years, you have seen google searches you have seen twitter's purchase of magic pony. remaining,eams are actually, in london and that creates a center of excellence, draws talent. clearly, if you are looking to have talent come to the u.k., there is a big issue with regard to immigration, but there is a willing look at that and make sure the u.k. can continue to attract great talent. jason: great. great to be with you. good look at the rest of the conference, out mcpherson -- alex macpherson. guy: jason kelly joining us from berlin. now, bloomberg has 20 more coming up. great events. we are going to be speaking with david rubenstein, co-ceo of a group from the same conference we have just been that. up next, it is "surveillance."

francine lacqua and then tom keene. matt miller and i are going to bloomberg dab radio. ♪

francine: great expectations. the dow rally hits 12 straight sessions, the longest in 30 years, as the world awaits president trump's spending plan. the market wakes up and smell the coffee about a march rate hike. the odds job. adding value to humanity. the starbucks ceo tells me why companies and see -- companies and individuals need to come together for the greater good. a time when private citizens and business people need to build bridges, not