You are watching live from bloombergs european headquarters. I am caroline hyde. Missing masterpieces. We check out the big business of art theft. Ford is treading lightly. It looks pretty heavy. Lets start with president obama. He is with the president elect in warsaw. This is ahead of the summit in brussels. That is where we find hans nichols. The details. We have the public details and the private details. Is talk ofhere additional sanctions if russia moves the troops back to the border and has another incursion. Publicly, we have William Hague and we will listen to what he has to say. The sanctions are on the table. The have an addendum. They say it is unlikely and the same line is coming out of berlin. The german official is saying. He sanctions are unlikely listen to what William Hague had. O say this is an election with clear results and he has been elected with clear results. Bilateral discussions. This reduces tensions. These are all things we want to press against Vladimir Putin. President obama meets with him and heads here where the g7 will kickoff. Then, everyone is off to normandie. First, it looks like it is likely that president obama and Vladimir Putin will pass each other and we will see if they have a formal meeting. Thank you. Over to our top company stories. The troubles are mounting. The retailer deepens. Investors are bracing for the worst. The chief executive is claiming that they have never been so competitive. We are joined by ryan. Vfl thewhy the sales fell 3. 9 of stock bucks you know the things are tough when your ceo says that he has never seen a sales drop in his 40 years at the company. He has been there for 37. That says a lot. Is, thehing lightfourlike sales was down 3. 8 . The analysts, we talked to 14 of them, were expecting that. I guess we can speculate that that is investors saying it is not as bad as anticipated. We had an analyst on who was talking about the fact that there has been a problem with the stock throughout the year and it is down nine percent since january. The reason for that is because the analysts on a monthly basis keep revising the profit estimates. Specifically, for tesco. If you look at the profit margins, tesco would say they were above six percent. Then, they said they were forecasting five percent and now, they are not saying anything. They are trying to gain loyalty back from the customer. Whats yes. That is the get out of jail card. Slashing prices to help them out in the long run. You do notproblem if understand what the future earnings are going to be. That may be one of the reasons we are seeing investors have a little bit of a selloff. I am going with ryan. It is a slow day on the market. We are waiting for a few things to happen. How much time do we have . They are already counting. Nobody counts. 1000 days. They have been losing market share. And top personnel. Most recently, the cfo. One way to look at it is, crediting them, they have 29 of the market and yesterday, they said that, for the first three months of the year, they will lost 1. 5 of the supermarket market. It does not sound like a lot. It is the biggest loss of market share they have recorded and starting to do this math. It is a big deal and there is a sales decline. Who is picking it up . The four bigof supermarkets that have increased. And started cutting prices they had a great january to march. You have discounters out there and the little guys. Guys who are getting bigger. Aldi has a percent of the market and they are gaining. They are getting it from both directions. You have to do something, right . They keep saying that things are going to improve. It is too early to say when that is going to come. I think that, as charles was saying, if it does not come by the end of the year, people are going to say that they keep saying that. He slashed prices and you do not see an uptick in sales. Thank you very much. We will continue our conversations. To heathrow. Terminal two. T has cost 2. 5 billion pounds is it worth it . Olivia sterns is there. What is the impact for you and i will we travel . Thatu know, i would say terminal two is a destination in and of itself. Blumenthal,rd from he calls that fabulous fast food. Beer, mulberry, barbers. This is a retail, restaurant, and our hub. Hoped to help british airways. The trouble is that this is not going to add any new capacity to the airport. At their peak, they will move 45,000 people through. Without the new runway, the third run right, they will not get people off the ground. Yeah. No. Olivia, they are trying to compete with the glitz and glamour of the middle eastern airports. How do they become more competitive . They are trying to compete with these new splashy how this and i spoke to the head of Heathrow Airport earlier. She said that they are competing to get a third runway and they said that the success that they have had with the second terminal crews that heathrow knows how to spend money well and can deliver on costly infrastructure rockets in a timely manner. Here is what they had to say about building a transit hub. But if we want to capture the growing economies, we need to be connected to the new cities and we can only do that through how the airports. Can only be done with more capacity and building on the strength we have here hat heathrow air work. Heathrow is the natural place to be the worlds best. They spent 2. 5 billion pounds on renovation and it is part of an attempt to overhaul heathrow. They have spent 11 billion pounds over the last decade. They are trying to secure a third runway. The mayor of london is pushing for a third runway. They are hoping to be more competitive to win the third runway. Thank you very much, indeed. Olivia sterns is down at the second terminal of heathrow. We will continue the conversation on londons airport conundrum. The ofeak to commerce and industry. Check out what else is on the radar will stop the chief executive of Goldman Sachs sat down for a conversation. They spoke about what they face. Job, when say that my things are going well, there is nothing more fun and i cannot imagine leaving it. And, when things are going badly , my sense of responsibility takes over and i cannot imagine leaving it. It is a hard thing to do. I either love what i do because it gives exposure to great people andwhen things arey obligation takes over. Lloyd blankfein i here is what had to say about global growth. We will not recover until next year. In that scenario, we have a Different Group in different regions. 2. 3 and japan getting out of deflation and moving towards the two percent growth and inflation levels. Europe is still modest and in the black. Italys finance minister says that growth in the country is weak. Ierre told us he is meeting his counterpart on thursday. The purpose is to put jobs and growth high on the agenda and to be a priority on these issues to give priority to these issues. Tough times at tesco. We have been talking about the retailer trying to find a way out of the trouble they are in. We will discuss all of that on the pulse. Welcome back. Company news. The German Government is using their development aint. The proposal to buy the energy asset could go ahead. Staying in germany, shares this morning paid. Rest deepens a threeway unitnce between the truck and the munichbased company. They are looking to compete. The second largest life isr is providing buying an american insurer. Acquisitionbiggest by a japanese life insurer and will give access to clients across the United States. The japanese have a shrinking population and shrinking domestic demand. The president signaled that any energy cut will not be the final one. Our ecb editor joins us now. Mario draghi has promised that he will cut the rates if he needs to. How credible is it for him to do the other one is already negative and there is going to be further cuts. Walk us through the mathematics of this. The people we are talking to are talking about 10 basis or 15 basis points. The benchmark is currently at 25 basis points and if there is a cut in that, the ecb becomes the first Major Central Bank to having negative rate. Denmark and sweden have done so in the past. Whether or not that is the end is not clear. Forward guidance could be one of Mario Draghis clear strategies. There could be lower levels, if needed. He could maintain that language, even if there is a cut tomorrow. The rates could continue to fall. They could go from a little negative to more negative. He has room to fall. It is important that the markets believe that Forward Guidance does not change in there has not been a change in the ecb strategy. There is no talk of an exit, at this point. The signal is that he could come up with unconventional measures, as well. Government bond trading has been getting pretty exciting. You also have talks of lending to smaller companies. You are right. There has been intense speculation and there will be relief when we hear what the ecb has up their sleeve. The rate cuts the the market is looking closely at something to the bank of englands fundingfourlending scheme. On thended lend conditions. They said they may give five percent of the outstanding loan thatolios on the condition money is lent the two companies that are smaller. Is up for grabs. The executive board met yesterday and the Government Counsel will not make its final decision until tomorrow morning. There will be a formal decision and that is when we will finally hear more in the afternoon. Credibility and the ecb. We are getting to a point where mario draghi has to talk about five or 10 basis points in order to maintain the idea that there is Forward Guidance in place. The pointting to where it becomes incredulous. Will the market believes that the ecb has any credibility left when they are talking about tinkering at the edges . Course, thats, of we get measures from the ecb tomorrow and the market says, what is next . Worsening ine a the meter jim term mediumterm. An optionve easing is there. The ecb says theyre within their mandate. There may be some weakening in the inflation outlook. Not major. Still, potentially, some weakening. If that continues, that may be the next step. It is not expected that the markets will continue to speculate. It could be further down the line. Thank you very much indeed. We will have an update and Mario Draghis news conference. News of the company. Why ford is treading lightly with their truck later on in the polls. Welcome back. Trains, planes, now, automobiles. Ford is advancing this technology. Matt miller went to the. Utomaker massive pickup and theat ford entered terrain of the race is so brutal. We want to pass the durability of the truck. , we didter of impact not want the competitors to see it. This is no ordinary truck. Instead of a Standard Steel body, it was made of aluminum and is 700 pounds lighter. The company proof that light is also tough. There is a lot at stake. This is a technology that will be rolled out in the new version of the bestselling f 150. Makes it stop quicker and accelerate faster. The customers can use that ability. It has always been special. Consistently. This new government standards are pushing the company and all automotive makers to deliver more fuelefficient cars to the masses. An essential part of the sustainability strategy. Enter the concept car. The lightweight vehicle behind this is lighter than the current production vehicle and that is to car sizes smaller. Is a mix of materials and aluminum and carbon fiber. Those materials can come together and create an optimal solution. Advanced materials cost a lot more than traditional steel and bring down the cost of lightweight components may prove difficult. We have not solved all of the challenges yet. This is where we see some of the future going and what we are working on now for our vehicles. Got to love them. Lets talk about a bit more of the truck story. We are seeing that there and i want to talk about volkswagen. Part of this is mechanical. They pushed shares out this morning and it was a receptive market. The stock is trading below that and the european markets are it is trading down. As you can see, a gap lower is the mechanical factor. You see the stocks declining further. The gp gdp data earlier on. This is the projection for it from here and it is not so good. The start of the day is trading up. Another currency pair that i want to show you is this. We have seen a bunch of pmi data coming through. One of those that came out came from sweden and, as a result of this, we saw the stock move lower this morning. It is down. 3 . Those are the assets we are talking about. Missing masterpieces. When we come back. Good morning. Welcome back. I am guy johnson. I am caroline hyde. Voting has ended in the syrian election and it will return aside to the presidency. Assad to the presidency. International leaders called doubt in the support. He spoke exclusively to me yesterday. Is a sham election. It is not election that means anything to most of the world. You cannot conduct a meaningful election in a country that is torn by war with so many people displaced, without opposition having any proper opportunity. The selection carries no credibility. Election carries no credibility. Romeeaking to reporters in. He told us that he is meeting his german counterpart in berlin on thursday. Well, the purpose of the presidency is to put jobs and growth high on the agenda and to give priority to these issues. Thousands of demonstrators to mark the anniversary of tnm and square ananman square. Hundreds were killed. More on this. Lets talk to william pesek. He is a Bloomberg View columnist and his opinions are his own. Talk to us about the amen andship with tian the administration. The deal of the people is that they will make them richer if they do not protest. In many ways, it is about social stability. When china wants to maintain growth at seven percent10 , it is about people staying away from the square with protest banners. The president is talking about reforming the economy and turning it upside down to make it not reliant on investment and exports. Doing that is destabilizing and will put people out of work. Any time growth goes towards seven percent, you see an active attempt in beijing to stimulate the economy and that shows a lack of resolve and confidence. It is all about the concerns of growth slowing and if the natives will get restless. The longer the growth stays near 7. 5 , the less reform takes place. The events of 25 years ago still remain a presence in the room. About talked at length what the president has gone to. It is a difficult balancing act he is trying to get. What is he doing to hit that 7. 5 target . 7. 3 is what the economist forecasts. Spent 10ime minister years doing nothing to reform the economy and it is a big task. We all agreed that the economy has to slow drastically in order to rein in the economy. In many ways, the problem is too much credit creation. When credit creation slows, there is a domino effect. The president is looking around and try to figure out what he can do. The downshift has not begun and, the more we see beijing take steps to avoid the downshift, we have to say a reform is taking place. I consider this like abenomic. Prime minister abe has accomplished none of his domestic reforms. Will the chinese president do better . Whats thank you very much. William pesek joined us from Bloomberg View. That is an amazing piece, if you get a chance to look at it. Lets go back to heathrow and a new terminal opening their. Is opening. Erminal lets find out how staggering this is. Lets go to Olivia Sterns. Thank you. This is smooth sailing at terminal two. It is unlike the launch of terminal five that cost billions of pounds and they lost thousands of bags, while canceling hundreds of flights. He wanted to have a soft launch and ensure that it went well. It does appear to be going well. They are stress testing the banking system. It all appears to be working. Lots of new bells and whistles to look forward to. Restaurants, blumenthal restaurant and i spoke with him earlier. He describes some of the food. It is pretty exciting. And liquidg pizzas nitrogen frozen ice cream that is frozen instantly with compressed gas. This is the first time that an airport has allowed a wood burning fire inside a terminal. What is happening at terminal two, will it be enough . As beautiful as this terminal is, it does not add any new capacity. What they want is a third runway. Back to you. Thank you. Lets get to the next guest. Colin is a chief executive at the London Chamber of commerce and industry. There is glitz, lamb or, and no more capacity. Well, it has been disappointing and we do not have extra capacity in the southeast. Wherever. I think that what we want, from now on, is what we need to remember is the report after the election. We have no commitment from either Political Party that they. Ill for phil fulfill this what business wants a certainty. We want government, whoever that is. Whatever theyand say, they will do. There is another runway at heathrow. Whatever it is, what we need is certainty and we need clinical agreement. We need people from Political Parties to stand up and stop messing around about minor election all advances in london and say that this is what the country needs. We talk about the need for one more. He started coming out with his First Tranche of the report and he said that we needed one more runway. Have we been conservative here . Yeah, howard is a politician with a small pe who is been around for a long time and knows the problems of even one more runway. What i would say, not that i am an expert, but as a trade mission, business organizations will do this this year and we need to know. We know that it is not about run one way one runway. Is there anything that can be done right now . What happened today, i have been around the second terminal and they have been working incredibly hard to make sure that we get what we need to get. A smooth runway. Who are these people . They were volunteers from moves across country who are testing the airport and there were lines of old cases that were being sent through. This is an effort. This is very good stuff everyone has been to terminal five. For three years running, the best running terminal in the world. In terminal two, it looks very similar to terminal five and has a wonderful feeling of spaciousness and that will be great. Without extra capacity on the runway, we are not going to be able to keep up in the trade wastes race. We have seen the number of routes red