During their summit. The Vice President of the European Central bank says it is going to be a complete overhaul of the european banking landscape. Watch for murders and equities. Interesting. Thank you so much. Well get more on the u. S. Budget deal. In corporate news, youre watching and attacks. No big surprise here. Look at profit, look at sales. Significant challenges this year. Stronger euro diluting those earnings. King ofedly, still the fast fashion. We will talk about it later. Those Profit Margins are getting higher. Inditex opening one percent higher. Caroline, youre watching rbs. Set the drag the shares down. They are up by 1. 5 . Nathan bostock is going back to his old employer. Monthsse, it is just six after Stephen Hester, the chief executive tech problems last week. Concerns about pushing their own Small Businesses that they lend to into default. There is a lot to do and a lot to discuss on rbs. We have a lot of corporate news. We have everything that relates to macro. We are on the fed watch. Talk, a wavetaper of risk aversion has swept through the market. I will allow them that. We are waiting for china. We are listing growth targets and inflation targets. That will come through tomorrow. The germans have got a bit of inflation white unlike the rest of europe. When it comes to investing across the map, we had a conversation today with the cio for ubs wealth. He says the real economy is getting better. Europe is going to go through more deleveraging. Get ready for equity market returns of around seven percent to eight percent. That is on a global basis. Still, equities look attractive. This map is about the moment. Paris just opening on the green. Lets see what they have got that the rest of europe havent got. Vivendi up 1. 7 . Lvmh up 0. 5 . Struggling europe for any upward bias in the first opening calls. We will see how the morning trade progresses. John and caroline mentioned a couple of stocks. Rbs, the cfo Nathan Bostock is going back home. Cfo, gone down as the from rbs. , marginsxt inditex are rising. Company in italy, berlusconi family invests. Holding divesting their in the company. We will see how that trade plays out through the rest of the day. By atock is being placed number of institutions. In terms of currency, the overall direction of the dollar we had just halted the decline in the asian trade. We are just nipping back into that overall direction. Euroyen, i am seeing from the analyst they are saying that euroyen is oversold. It still dips a little bit. Technically, that is oversold. Back to you. Thank you so much. Our next guest says equities will continue to offer investors the most attractive longterm returns. For more on his investment strategy, lets welcome the globalcio at allianz investors with more than 300 billion euros in management. Talk to me about what your main concern over the next eight weeks is going to be. We have this budget deal. It is not bad. Nothing to write home about, but at least we have something on the table. Again, slowunion progress, but we are advancing toward something. I dont think necessarily the next eight weeks are going to be critical to determine 2014. The macroeconomic picture aside, some of the biggest risks reside in the political arena whether it is tiredness in the eurozone of austerity, whether it is the u. S. Budget situation or whether it is the Iranian Nuclear situation. On thethat seems to be right track at the moment. Things seem to be aligning well to support the generally benign market outlook. Your main take for 2014 is equities because they are the only ones that still offer an attractive return. Unfortunately i am sending a bit like a broken record. We have been saying that for a number of years. That is still the case. The air is getting thinner but we have seen multiples expand significantly and earnings havent been there. The ecb and the bank of england have been saying, get some risk otherwise we will financially repress you and you will have to make real returns on your cash holdings. Clearly it is going to get more difficult. What about the fed . When will they start tapering . Would it be next week . Are we going to have a correction on the market is to mark x it could be. We might well, but i dont think it is going to be as significant as it was last year. I think the fed will have learned its lesson there. Our view is that the fed will surprise markets on the dollar side and therefore it will always try to gauge market expectations. It will do less than the market anticipated. We have been saying, Central Banks in the west will be loser for longer. Interesting, when do you expect tapering . Even if it doesnt have that much of an impact on the market it is not a timing issue. If you try to time when the tapering happens, it is important to understand what ever they do is going to be on the dollar side. Interesting. Thank you so much for now. Here is a look at what else is coming up on on the move. A budget deal in washington is this the end of political gridlock overspending . Big box, we will dig into the latest earnings from zara owner, inditex. The latest up archer from the rbs sees we. Keep it right here. We are on the move. I am Francine Lacqua in london. This is on the move on bloomberg television. Here is a stock on the move. It is imagination technologies. We have been talking about this a little bit today. The stock is up 13. 6 . They missed sales estimates. It is a Technology Company. They are saying firsthalf sales came in below market expectations. They are also seeing difficulty to grow. They are seeing lower shipment growth for the rest of the year. That is having a big impact on imagination. A breakthrough in the u. S. , congressional budget negotiators announced a deal that takes the threat of Government Shutdown off the table. Yang yang has more from washington. U. S. Budget Conference Committee chairs Paul Martin Ryan and patty merry announced their answer to avoiding another Government Shutdown with a two year budget deal. The deal sets the annual spending cap at approximately 1 trillion a year, higher than the 967 billion under current law. Sequester cuts would be eased by about 40 billion in the first year. 20 billion in the second year. The cost would be made up through the likes of auctioning of government airwaves and increased tension premiums for federal workers. There will be no major changes to taxes or entitlement programs at this time. The deal is not the grand bargain that many had hoped for. It should be enough to thaw congress. It will take some convincing of rankandfile members. German ryan called the deal a chairman step in the right direction and focused his remarks on republican selling points. This bill reduces the deficit by 23 billion. It does not raise taxes. A cuts spending in a smarter way. We knew that if we forced each other to compromise a core principle, we would get nowhere. We decided to focus on where the Common Ground is. Be Common Ground, but there is plenty of room for disagreement. Said the issues of tax increases and entitlement reform cant be avoided forever. We need to acknowledge that our nation has serious longterm physical and economic challenges. Our budget process has been broken. For now, the u. S. Has a shortterm budget deal. Budget negotiators have made the deal with even a few days to spare before their selfimposed friday the 13th deadline. A nice pace here in washington. Aesident obama praised it as good first step and said he would sign it if it reaches his desk. Back to you. Still with us is the global cio at allianz global investors. Thank you so much for staying on. We were talking about finance. It seems that you have been talking about for years. You still think there is more value in equities. Our u. S. Equities now overvalued . Fair general terms, it is to say that equities are more expensive all over the world. Earnings growth hasnt caught up with the rise in equities. More so for the u. S. The u. S. Has got some of the higher valuations. The u. S. Economy has been the most vibrant in terms of recovery. The fed has been most explicit in terms of its Monetary Policy was this looseness. U. S. Equities are necessarily significantly overvalued. More importantly, there is a very interesting sector in the u. S. We have seen dividends across the world. The tech sector is one of the major Growth Drivers globally and of course the u. S. Is a leading power in that. Some of these businesses are really quite exciting. You made the point earlier saying that you were surprised on the dollar side. It is fairly obvious that Global Growth and u. S. Growth is still on the moderate side. We havent seen a really vigorous recovery. The pmi in europe as well, the unemployment rates that said, Labor Participation picking up. Not yet where it was three or four years ago before the crisis started. Overall, it is fair to say that the key concern of Central Banks today is inflation expectation. Despite the recovery, Inflation Expectations are benefiting or pointing down. What is your biggest concern for the u. S. . We talk a lot about the you are cap the markets. We talk about currencies. The u. S. Has benefited from a weak dollar. Is it going to stay that way through 2014 . I cant imagine the dollar is going to weaken that much further. The u. S. Economy is going to be vigorous in its recovery compared to the other developed markets. In terms of policy tapering talk is going to start tightening before the bank of japan or the ecb tightens. The u. S. Dollar is a bit of a conundrum. If you invest in u. S. Securities , you probably expect to lose a little bit on the currency. Thank u so much. We will be talking about europe next. Another company we are watching is zara owner allianz. Inditex. It looks like they were pretty much pretty much in line. Profit margins have grown. The expansion continues. Will go online in south korea and mexico in 2014. There has been plenty of challenges this year. The stronger euro diluting foreign earnings. The weather has not been favorable either. Inditex has remained the king of what they call fast fashion. Inditex does it within weeks. The competitors can take a matter of months. This, the crucial part appeals to the generation of today. The ic see it now, wanted now generation. It is affordable for the customer and it generates solid Profit Margins for the investor. Net income has risen 10 or more in each of the last three years. They may well list that ms. That this year. I think we can probably be in a forgiving mood. I can relate. It is a very bad trait of character. I see it, i want it. I am the same. Thank you for admitting to that. Undress, when you look at inditex, this is almost a microcosm. They are doing very well. This is a company that could probably do a lot better with the euro cheaper. Probably. I am not a big expert on inditex, but you are right to say that consumer stocks are the weather stocks. I am finding it difficult to see how the recovery in 2014 is going to work out and affect these stocks significantly given the continuing high unemployment that we are seeing. 12 across the eurozone, continuing austerity in the periphery, i expect the environment to continue to be tough. On the manufacturing side, we are seeing more signs of export growth picking up. Competitiveness is improving fast. Interestingly, they surplus that germany has is starting to come down. These are encouraging signs but i think the consumer will lag behind that. You are worried about germany. You say the macroeconomic policies in place should be skewed more towards europe. I am concerned about that. I think the German Economy benefits from being tied to the eurozone. The stability framework that germany has pretty much ensures area flat. At that means competitiveness improves for germany. There is a price to pay for that. It seems germany is reluctant to play that price. If you are going to have the rest of the eurozone go through a nominal devaluation and really very strong austerity, then i suspect that germany would need to increase its budget deficit. We dont want your money to waste its money so there are plenty of things to do. Invest in infrastructure which wasnt that neglected over the past 20 years. Reduce the tax rate for the lower income groups. They are quite high in germany. People are concerned about any quality rising. That is one way to deal with that. At the same time a, can consumer growth going. Our markets too complacent about europe . Market growth is very shy. A lot of these countries are still not competitive. The euro is high. The ecb has talked the talk but not actually done anything. We have a number of vertical adjustments coming up that the markets have not concern themselves about. We have the case in front of the german supreme court. We have to see how that pans out in january. We have some significant political risks. We have risks around the Free Movement of labor. Europe are the europeans going to get tired . Are we going to see moves in the periphery towards either a new deal or maybe leaving . These are risks. The markets arent pricing that in today. There were concerns a yearand ahalf ago. Now there is too much complacency. Interesting. Thank you so much. We will be back after this short break. He did right here. We are on the move. Welcome back to on the move. I am Francine Lacqua here in london. Here are some companies on the move. Gm will stop making cars in australia by the tiniest of 2017. It is the second automaker after ford to announce an exit because of high production costs and a strong local currency. Nearly 3000 employees will lose their jobs. Foxconn is said to be launching an Investment Fund for startups developing wearable technology. The unit will administer the nearly 7 million for trials. Operations will open by the end of next week. Moncler is planning to price its ipo at 10. 2 euros per share. It is said to be more than 20 times the ipo could raise as much as 681 million euros. Lets get back to the global chief Investment Officer at allianz global investors. The user much for staying on. We talked a lot about macro economies. Talk to me about some of the sectors that you like. Technology, there is so much interest out there. Is 2014 going to be the year of technology . Is there a danger that it is too frothy . Some areas are going to be frothy in the ipo area. The tech sector is a very different animal to what it was with the. Com bubble burst. The valuations are nowhere near those levels. The Business Models are much better tested. There is some real growth going on there. Taking market share from the brickandmortar type of companies, we have Companies Like amazon. This Business Model is very strong. There is cloud technology, they are investing in other areas of their business. They are very competitive. Constantly innovating the way that they distribute. We like Companies Like tesla, some of the early investors really disrupted, really able to wow the buying public. Companies like netflix. There is a lot of stuff going on inditex sector and i think it is one that we will can that will continue to do well. Yesterday we had a big special on ups. They see themselves as a Technology Company with trucks. That is worrying. That does remind me of 15 years ago. Everything was a tech company. Will that be 2014 . A race to be perceived as a tech company because you get higher premiums . It could be, i hope not. I kind of agree. Talk to me about ipos and m a. Is it difficult to Pick Companies that will be taken that may have a successful ipo . I think what were seeing is the pickup in ipo activity which has been significant over the past 18 months continuing into 2014 as well as increasing m a as aity across all sectors direct result of the quantitative easing policies we are seeing. We think that Central Banks in the west will be looser for longer. I think it will be a continuing good market in 2014. We will have to be somewhat selective here. I would suggest that unless you want to play in the casino, make those judgments. Thank u so much for that. We are back in two, talking about the volcker rule. Welcome back to on the move. I am Francine Lacqua at bloombergs European Headquarters in london. These are the Bloomberg Top headlines. U. S. Budget negotiators have unveiled an agreement to avoid another Government Shutdown next week. It eases the automatic spending cuts and reduces the deficit. The house will consider the measure later this week. Rbs chief Financial Officer is stepping down after months on the job. He will return to Banco Santander where he worked prior to joining rbs. His departure comes six months after chief executive Stephen Hester announced his own resignation. 8 stake ining its bank of shanghai. Hsbc did not disclose a price. It paid about 63 million in 2001 for the state. The chief executive has sold at least 50 for businesses since taking the top job in 2011 to boost profitability. On the banks, regulation is a big focus this morning on both sides of the atlantic. Our markets editor manus cranny has more on the volcker rule. David tweed has an update on the eus bank failure plan. Banks . A victory for the did Bank Lobbying actually pay off . I think probably yes. A lot of lobbying and they got a delay through to 2015 in terms of implementing volcker. What is the rule mean . I think it is good for liquidity. It is good for the customer and it brings ceos t