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tv   BBC Business Live  BBC News  July 27, 2018 8:30am-9:01am BST

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this is business live from bbc news with ben bland and susannah streeter. closing in on a trillion dollar valuation. amazon sales surge again as the internet giant rakes in $53 billion in revenue. live from london, that's our top story on friday the 27th ofjuly. as shares in the company surge — the stonkingly wealthy boss jeff bezos gets even richer — with his net worth reaching $150bn. also in the programme... us gdp figures out later could be over 4% — so is it a triumph for trump or the beginning of a bubble about to burst? we keep an eye across the markets and this is the picture across europe at the start of trading. all
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in positive territory. we will get an expert take on those. and more technology on the way as we wrap up the latest on facebook and google with our tech guru rory cellan—jones later in the programme. and as eurotunnel announces cancellations because of the exteme heat in the uk — we want to know how are you staying cool. has the record—breaking weather disrupted your travel plans? let us know — just use the hashtag bbcbizlive. we are getting your tweets. the personal one is ice cream in the park they are today. we start with amazon. from online book store to retail, media and data giant — and all — round titan of the internet — its march towards becoming a trillion—dollar company continues after another huge quarter of earnings. amazon made revenues of almost $53 billion in the three months to the end ofjune — up 39% on the
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same time last year. 2.5 billion of that was profit — the most it's ever made in a quarter as it normally reinvests most of what it makes. shares have surged in recent months. they are up 58% this year and 500% since 2015. that's pushed up amazon's stock market value by $300bn since the beginning of the year to $890 billion now — second only to apple as the most valuable company. they are both closing in on that magic trillion—dollar valuation and it's made founder and boss jeff bezos far and away the richest person on the planet, with a net worth of $150bn. that's almost twice as rich as number two, warren buffett. cyrus mewawalla is head of thematic research at global data. it does not surprise you, the latest
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results, because you have said for awhile, amazon is the one to watch. do you expect the growth to continue and do you think regulatory hurdles could be put in its path? these are conflicting themes in the big tech companies and amazon in particular. amazon has reached the $900 billion mark because it is investing in the right technology, artificial intelligence, internet tv, augmented reality, block chain. especially cloud, the operating system for the next generation of technology but some people are concerned the company is getting too big. president trump is concerned it is getting too big but the traditional
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anti—competitive regulators, they are using historical remedies for a next—generation company and the traditional remedy is to break up amazon but what makes them strong is the day to day hold on customers. will we see change with the data? that is where it could benefit possible newcomers? at the moment it is very difficult. if regulators split the data amazon holds and gives it back to the true owners of the data, the customers, you and me, had customers can decide whether amazon has access, that would create competition. a really interesting thing they seem to have succeeded in doing is getting people to pay for the premium service and actually feeling they are getting a good deal and being happy about it. that is the dilemma regulators face. if the consumer is happy why break up the company? the traditional remedy of breaking upa company? the traditional remedy of breaking up a company, you make it smaller and they compete but the
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reason these internet ecosystems are strong, amazon, facebook, they have collected this data and it belongs to us but they behave as if it belongs to them. these things like the eu fine on google, the remedies are historic remedies. if we look to the future we must separate data that belongs to the consumer from the internet ecosystems that run the data. will we see a change in competition law? amazon dominates e—commerce but when you look at and —— anti—trust law, there is another share. the online market, that is whether growth is coming from and anti—trust regulators need to defy what markets they are looking at.- cents in every dollar spent online in the us is spent through amazon which gives you a sense of how well
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they are. thank you. let's take a look at some of the other stories making the news. eu chief negotiator michel barnier has ruled out allowing the uk to collect customs duties on its behalf, a key uk proposal for post—brexit trade. both he and uk brexit secretary dominic raab said progress had been made in talks but "obstacles" remained before reaching a deal on trade in october. the founder and former chairman of papa john's has taken the company to court seeking access to documents related to his exit from the pizza chain. john schnatter resigned earlier this month after apologising for using a racial slur in a conference call. mr schnatter will no longer appear on papa john's pizza boxes and other marketing material. uk road hauliers found to have colluded in a price—fixing cartel could be in line for $6.5 billion in compensation. the move comes two years
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after the european commission fined a number of truckmakers for inflating prices. if the claim succeeds more than 600,000 uk trucks could be covered. we were talking about amazon. another online retailer has made an impressive debut on the stock market. chinese firm pinduoduo hit the new york stock market for the first time yesterday — monica miller is in singapore for us now. this is another big valuation. name many would not have heard. the company is three years old and already worth roughly $30 billion. pinduoduo's shares up as much as 3% on its opening day on the nasdaq. the company has been compared to groupon with chinese customers looking for a bargain but what sets it apart, from competitors such as ali baba,
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it apart, from competitors such as ali ba ba, it it apart, from competitors such as ali baba, it uses something that has a billion users and customers call on friends and as a reward they get a bargain. its founder is a wealthy man, one of china's... he has become the 12th richest person in china because of the deal. the markets. a mixed picture in asia, digestive results from the american tech companies. facebook slump putting sentiment into tech stocks around the world and that will drag the nasdaq down in the us. the picture in europe looks more rosy at the start of trading. looking across the atlantic, the big story in the us will be the release of the latest gdp figures. for the three months tojune.
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the predictions are for growth numbers not seen in years — which has been a key issue for president trump. paul blake has more from new york. right now our country is dying out 196 right now our country is dying out i% gdp. so at 3.3% gdp, i see no reason why we don't go to four, five, and even 6%. we already hit a 3.2 and i think we're going to be seeing fours. i think we're going to see fives, too. economic growth has been central to donald trump's message both on the campaign trail and in the white house. gdp numbers will be announced tomorrow sometime. i don't know what they are, but i think they're going to be terrific. and on friday, he may see a milestone he has long been waiting for. we're growing rapidly. i mean, you're going to get a gdp number on friday that's going to be a very impressive number. some people are in the 4—5% zone. mr kudlow isn't necessarily wrong. many economists here expect gdp growth to top 4% for the first time since 2014 and while wall street loves positive economic news, many here are sceptical
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it is built to last. lucy mcdonald is chief investment officer at global equities at allianz global investors. what do you think, is it built to last? do you think as far as gdp numbers, this is the rise before the fall? the underlying number is free, even four. four is very strong but there is an impact from trade and building and that looks like it could reverse in the next quarter. even so, three is strong. you have got the impact of tax reform. that is helping the consumption. final demand is still robust in the us so there is something to be pleased about, but the headline number is not as strong. is it because people
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are making purchases, sorting out business before the tariffs come in and before there is a real change to tax, for example? bringing it forward rather than waiting till next year? it looks like the infa ntry next year? it looks like the infantry build could be associated with that but we do not know yet. looking at the european markets, they are in positive territory. there is a story in the news about brexit talks and yet again not getting any further forward. why are we not seeing the markets respond in a negative way? it has been going on a negative way? it has been going on a long time. markets get bored. you have seen the slowdown in uk growth, which you would think is associated with some confidence to do with brexit. and it is lacking with the rest of europe. we can see that had
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affected the market but the stock market has recovered slightly, mostly because of the strength of oil and that is a large part of the uk. the uk market and economy are quite different and the market is more international. it is the same for the dax. but in paris the stock exchange has done well why is that in the past year? luxury companies have been doing well and that is because recovery is china, they have been recovering nicely the last two yea rs been recovering nicely the last two years and those companies have been strong and are now concerned whether they will get backlash in china as a result. that is the concern of luxury companies. tech is dominating. a big story in the
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markets and we will talk about it later. thank you. you will come back to talk to us about some of the other stories making these today. tweet as to how you are keeping cool in the heatwave. still to come... tech companies dominating the headlines this week we wrap up the biggest stories — including facebook‘s disappointing results — with our top tech expert rory cellan—jones in a few minutes. you're with business live from bbc news. customers of tsb have faced technical problems with their bank in recent months and they've had a knock—on effect for the bank's spanish owner, banco sa badell. they've reported a loss of more than £120 million. michael hewson is chief market analyst at cmc markets. is this what people might have expected? it is this what people might have expected ? it is is this what people might have expected? it is much worse than people expected. the bank set aside
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£175 million in respect of these it problems and that is before you start to address the fact that the reputational damage is likely to hang over the bank the next 12 months and not for nothing did an awful lot of people change the initials dsp to mean total shambles bank. the parent company —— tsb. in respect of playing down the bad loa ns, respect of playing down the bad loans, selling off bad loans this month alone and it has impacted on its core ratio, which is why you will see shares down 6% so far today. what do they say about technical problems customers have experienced? have a sort the mac? there is an acknowledgement that they are well ahead of the game in terms of sorting them out but some customers i think still have residual problems
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with logging on and that is the concern. these it problems surfaced in april and that is a concern and it is the slowness of response which has influenced a lot of customers to move accounts away and that is the biggest problem, the mortgage market is slowing in the uk and it will be difficult for tsb to grow the business and get customers back as we head to the end of the year. many thanks. there is more coverage of business stories on the bbc business web page. the profits in renault slide, tumbling 16%. you can read more about why online. if you are not at about why online. if you are not at a computer, you can find out what is
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happening by downloading the bbc news app. it is all there for you. you're watching business live — our top story — amazon sales surge again meaning the internet giant is closing in on a trillion—dollar valuation. and the wealth of the company's boss gets a bump though he's already far and away the richest person on the planet. $150 billion. now let's get the inside track on the week in tech — we've had the results from the big players including facebook and google. here's our technology editor, rory cellan—jones. the most interesting elements this week. facebook, obviously. we have had a four month period in which we have seen facebook, amazon, netflix
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and google. , fangs. they have gone up and google. , fangs. they have gone up in unison. an extraordinary accumulation of value in the market and then we have had two stumble. netflix with slightly disappointing results and facebook with that 20% drop yesterday. both of those are cases of extraordinarily inflated expectations. facebook, the day of its announcement of results, shares hit a record high. we have the trouble earlier in the year when shares dived on concern of cambridge analytica and they recovered from that and were scaling new heights so it isa that and were scaling new heights so it is a case of vertigo. more than 2.2 billion active users around the world and an increase in user numbers of 11% in 2017. for others
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that would be incredible. 42% increase that would be incredible. 4296 increase in revenues, 11% increase in users and the markets is terrible. because they expected more. what is interesting, facebook has said for months, listen, things will get sticky over the coming months because we are spending so much on moderators, dealing with privacy scandals. it will have on effect on growth. they reinforced that message the other night and the market said what, you never told us! and we saw the impact. looking at google, it has shrugged off the regulatory fine. it came up with good results again. it did not seem to affect it. it did not disappoint the market. it is still growing. but growing less than facebook, but a
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better reaction from the basket. the point is the market was looking at facebook as a young, fast growth business, rather than a mutual business. when you have to one quarter billion people on board, at least in the us and europe, you have got everybody who wants to be facebook facebook. and also there is instagram for people who do not want to be on facebook. great growth in instagram. but there is a question about whether instagram is a more fla ky about whether instagram is a more flaky platform in terms of commitment of users and whether they are commitment of users and whether they a re less loyal. commitment of users and whether they are less loyal. facebook has stumbled again going into china? we had an announcement about opening up a research centre in china one day and that was yes, they are getting
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into china in a big way and the next day came news they had not been given permission and it may not be happening. the general backdrop is all of these companies have experienced extraordinary growth in terms of stock market valuations and there are bound to be stumbles when people look at the facts and worry whether that kind of growth is sustainable. twitter results out later. that will be interesting when we get the picture from that social media company. i want to talk about home robots. i def really want to talk about that. this week bosch has announced its cute home robot is going nowhere. a lovely device that ran around your home and talk to you, you would have a relationship with it. it is interesting because i have seen a rash of these things, a
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lot of them launched at tech fares and they look fun and i think people are asking, but what are they for?” do like the robot vacuum cleaner. that is a good example. that is something with a function. it does what it says, it does vacuum. whether you want a relationship with a chatty robot is another matter. we are putting robots in our homes and they are called amazon echos and google homes, so they are in different forms. there is talk of an amazon echo on wheels that would move around. i was at a tech fair and they showed a robot to replace the shop assistant. i said but, what if your shop has stairs? they could not answer. very popular injapan. not clear if there is such a cce pta nce not clear if there is such acceptance in other parts of the
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world, interacting with a robot. thank you. in a moment, we'll take a look through the business pages but first here's a quick reminder of how to get in touch with us. stay up—to—date with all the day's business news as it happens on the bbc‘s business live page. there's insight and analysis from our team of editors right around the globe. and we want to hear from you. get involved on the bbc‘s business live web page — on twitter we are @bbcbusiness. and you can find us on facebook at bbc money. business live on tv and online. what you need to know when you need to know. lucy is back to look through some of the paper stories. the uk heatwave, hot in many places but apparently england is the hottest country europe and it has caused eurotunnel to cancel hundreds if not thousands of tickets because the rails are buckling. the
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infrastructure facing problems. we are seeing the impact of extreme weather and if you think of back to the beast from the east in the first quarter, which had a negative impact on growth and paul —— productivity, you have this negative impact with the extreme heat. interesting, of the extreme heat. interesting, of the countries are used to extreme heat and officers are air—conditioned, in the uk, we are really not used to such a prolonged period of heat. productivity is suffering. apparently you are allowed to take off yourjacket suffering. apparently you are allowed to take off your jacket at lord's for the cricket. we have had some tweets. some people say, i have to move more slowly. they cannot get
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to move more slowly. they cannot get to work in time. everything is delayed. martin tweeted to say, when i was a kid we did not call it a heatwave, we called it summer. neal said we love the sunshine but could do with less heat. i travel early morning which is not too bad but the evening commute is so uncomfortable. chelsea flower says stay away from work, but the telly on and have a cold beer. alice baxter cannot do that because she says this is not a time to be eight months pregnant. another story making the news all the way around the world today, the fa ct the way around the world today, the fact that barcelona seem to have scored an own goal on gender equality. that is because, you can see the picture, a male and female football tea m see the picture, a male and female football team went on tour together but the women were put in economy while the men sat in business.
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it is astonishing to think it is 2018. it is like something out of the 50s. it is encouraging it is big news because it shows these symbolic gender acts are under the microscope and we notice them. people have to be more... more careful. apparently the women's team joined the tour later in the day and there were not enough seats. do it by ballot. lucky dip. encouraging there is a focus on this. it is in the sydney morning herald. thank you for coming to talk to us. great to have you on the programme. keep cool where ever you are. enjoy the heatwave over the weekend, if you can. goodbye. hello, yesterday was the warmest day
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of the year. wisley in surrey reaching 35.1 celsius. in the southeast 33—34dc today. we have something fresher at the weekend. this is driven by this area of low pressure out to the west. sending in fresher air. of low pressure out to the west. sending infresherair. in of low pressure out to the west. sending in fresher air. in eastern england and scotland there is potential for disruption from thunderstorms. not everybody seeing a thunderstorm. in the westmoor cloud and showers, some of which could be heavy. temperatures reaching a maximum of 33—34dc. this
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evening and overnight, the chance of intense thunderstorms, particularly in the east and we will see prolonged spells of rain through the night, gradually working north and the breeze will pick up, not as warm as last night. if you are hoping to see the lunar eclipse, it is not totally out of the question. at the weekend, more prolonged spells of rain in northern scotland, working north east. rain working up from the south—west. showers in the afternoon. drier in the south—east in the afternoon with sunny spells but the temperatures significantly cooler. the maximum around 23, perhaps 24 celsius. this is the pressure chart overnight into sunday. the next weatherfront waiting in the wings. bringing with it cloud and rain and that will work
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north—east through the day, becoming showery in the afternoon. the further east you are, the greater chance of drier weather and brighter intervals. the wind higher than saturday but temperatures fairly similar. hello, it's friday, it's nine o'clock. i'm martine croxall, welcome to the programme. "no amount of apologies will bring her back" — the husband of a pregnant women who died of sepsis tell us he and their two young children are struggling to cope with the loss. reeta sadhia was 15 weeks pregnant when she died. her husband, bhooshan, says it's been so difficult watching his children cry for their mummy. medicines derived from cannabis will become available on prescription, says the government — parents say they're delighted. this announcement today gives every person in that situation hope. that they can try this medication and that itjust might work. i've always been clear that it doesn't always work for everyone
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but when it does work it works like a miracle and every person should have the chance to try it.
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