tv Business Briefing BBC News October 26, 2018 5:30am-5:46am BST
this is the business briefing. i'm victoria fritz. a disappointing sales forecast for the christmas season sent amazon shares sliding on thursday night. and google‘s parent alphabet‘s results disappointed as well. and brazil faces the second part of its presidential elections this weekend, we look at the economic issues facing the new leader. and on the markets: asian stocks extended their declines at the end of the torrid week. what a difference a day makes. us shares bounced back after suffering massive losses on wednesday. in fact, the nasdaq experienced its best one—day performance since march, partially due
to strong tech earnings from twitter and microsoft. but that may all change today as we have had disappointing results from two of the so called fangs. the big tech companies. amazon — the world's largest online retailer has reported record profits of $2.9 billion, quite a leap from the $256 million it reported for the same period last year. it's benefitting from growth in its cloud computing business amazon web services, which saw revenue almost double to nearly $6.7 billion. that's an increase of close to 46 percent. however, a disappointing sales forecast for the christmas season sent amazon shares down more than 7% in after—hours trading google‘s parent alphabet posted
a 37% rise in third—quarter net profit to $9.19 billion, driven by healthy mobile search traffic and soaring ad sales. but that was also below expectations. also out with earnings: the operator of the snapchat social messaging app. the number of daily active users fell1 percent to 186 million, as it shifts strategies to attract users. snap shares have touched record lows in recent weeks, following some key executive departures. james erskine, director of social circle joins me now. these stocks, they are primed for perfection. any time a ball short of that, we are going to see a tumble. when you are creating a product, you look to various features. you look
the things that satisfy and you look to the basics. what happens after a while is those satisfies and those dividers, they become expected by the audience. they are competing against a really, really tough time with other social platforms. but they are also competing against themselves, their audience and their shareholders are expecting persistent innovation. it's crazy to businesses that are making so much money are having to innovate but they are, because they are focusing on the core product. that is a really interesting point, the competition is competing against themselves. but they are so dominant in these marketplaces. there are big things to look at here. but there
are other things happening. let's look at the wider context. the world's biggest advertising group, wpp. they reported 14% shares on their results. it's almost like amazon and alphabet coming into the world of advertising, completely disrupting that model. where they next turned their attention, that is going to be the really interesting thing but there is also a real pressure to constantly innovate. you will answer beyond favours. they have had a picture up that didn't receive and a social network. it's off our core product. interestingly, where as amazon's cloud business is hugely successful, shareholders in alphabet see the google cloud
business as a disappointment. we are in the middle of earnings season, we have more tech companies to report but the nasdaq, the big us tech stock, is down 7%. it's not looking too great. we've got facebook coming up. ithink too great. we've got facebook coming up. i think the key thing that these various different businesses, the fangs, the other big businesses, they need to focus on innovation. there are green shoots of innovation. in the context of this morning, snapchat and amazon launched a joint product offering. it's about understanding different stakeholders. for example, content creators on the social networks. it's about having in here notjust in the consumer in the shareholders but other communities that can drive them. really interesting. james,
thank you for coming in. china and japan are about to hold their first bilateral meeting in seven years. the last time president xi and prime minister abe met — their relationship was rough to say the least. let's go to our asia business hub where mariko oi is following the story . we are talking about the world's second and third—largest economies. what they could do together is quite amazing, should they be able to ove i’co m e amazing, should they be able to overcome some of those red lines that have in the past. indeed, victoria. not sure if you are the last time the leaders met on the sideline at the apec summitjust about four years ago when they have about four years ago when they have a very awkward handshake. to be honest with you, the issues they had at the time, territorial disputes, none of that has really been
resolved and that the time, we had protests on the streets of china against japan. none of protests on the streets of china againstjapan. none of those protests on the streets of china against japan. none of those issues have been resolved but one thing is chained changed, and that is the united states. now china is locked ina united states. now china is locked in a trade war with the us. japanese officials have said prime minister abe was keen to meet but that it was president xi who wasn't. it seems like beijing are starting to realise it needed a better friend with its neighbour, which of course, it has a very close trade thai with. the japanese prime minister has brought hundreds of business leaders are definitely, trade is topping the agenda. they are really talking about free trade at the time when the us appears to be turning inwards. fascinating stuff. latin america's biggest economy — brazil —
will elect its next president over the weekend. far right politicianjair bolsonaro is the front runner, campaigning against left wing candidate fernando haddad. brazil's economy is still recovering from its worst recession in history. so what are the economic challenges brazil's next the bbc‘s daniel gallas went to manaus — in the north of the country — to find out. for the 2 million people live in xi, the biggest city in northern brazil. state aid has not been able to prevent a huge procession. this factory, where tvs and computers have been reduced —— produced is operating at a third of its capacity. seven years ago, all
factories in manaus at hundreds of thousands of employees. now, less than 80 4000. it means fewerjobs in the local community. today, manaus has the third biggest unemployment rate in brazil, almost 15% of people out of work, barely surviving in the informal economy. manaus is the only is not the only place in brazil with tax breaks tack —— tax breaks. the government was trying to preventjob losses but instead, it ended up creating a huge fiscal mess that is now holding back growth. soon, brazil will choose its new president. the winner will have to plug the $30 billion deficit in the national budget. markets have already chosen their favourite. since bolsonaro started to rise in the polls, stock exchanges soared.
but places like manaus need more than just fiscal adjustment. they need urgent investment in infrastructure. this is the town's main port where tourists leave to explore the amazon. it looks the same as decades ago. brazil's economic recovery is stuck. it will need all the help it can to get it out of the mud. that's it for the business briefing this hour but before we go, here are the markets. asian stocks are extending their declines after a torrid week that dragged the whole region deep into a bear market, falling 20% from their peak. treasuries have been rising after disappointing reports on tech companies. plenty more coming up a little bit later on. see you soon. people living near the seaside
in england haven't faced up to the reality of rising seas and climate change, according to a new report. the committee on climate change is warning sea levels may rise by up to a metre over the next 80 years — within the lifetime of today's children. roger harrabin has the details. in the eye of the storm, devon in 2014, battered by the waves. train tracks destroyed. today's report says more this will happen as sea levels pushed higher by man—made climate change. here is another problem the committee warns will get worse. these homes at hemsby in norfolk slipped into the sea as waves ate away at the clip below. the report says maybe 100,000
properties are at risk like this. the committee says the authorities have to get real with people about which homes are likely to be saved and which will be too expensive to protect. the current approach to protecting the english coastline is just not fit for purpose. and we really do need to wake up to the very significant challenges that we have ahead. the sea level is rising and that's going to mean that we get considerably worse coastal erosion andindeed considerably worse coastal erosion and indeed coastal flooding. powerplants, ports, and indeed coastal flooding. powerpla nts, ports, gas and indeed coastal flooding. powerplants, ports, gas terminals and other infrastructure are also at risk. the report says it in the government need to focus on protecting these assets as well saving people's homes and to take seriously the inevitability of sea level rises. the government says more sea defences are being built. a spokesman says people would be protected from climate change. for that story and more, breakfast will be coming up at six o'clock with charlie stayt
and naga munchetty — they'll have all the day's news, business and sport. this is the briefing from bbc news. the latest headlines: investigators in the united states believe some of the pipe bombs sent to prominent critics of donald trump were posted from florida. they're concentrating their inquiries on a sorting office nearmiami. the police say 10 suspicious packages have now been identified. at least 18 people have been killed by a flash flood nearjordan‘s dead sea. most of those killed were students and teachers travelling in a school bus that was swept away. the incident has prompted a major rescue operation involving troops from both jordan and neighbouring israel. japan's prime minister shinzo abe is holding formal talks with chinese leaders in beijing — as asia's biggest economies seek to boost cooperation in the face of us tariffs. it's the first official visit to the country by a japanese head of government in seven years.
now it's time to look at the stories that are making the headlines in the media across the world. we begin with the telegraph and sir philip green, who now has been named as the uk businessman who obtained an injunction against the paper to prevent it publishing details of sexual harassment allegations. the new york times says brazil is facing a threat from the far right and a storm of populist conservatism as new political candidate and trump admirer, jair bolsonaro, is expected to win the country's presidential election on sunday. the times world section reports saudi arabia has acknowledged for the first time the killing of journalist jamal khashoggi was premeditated, backtracking on its previous claim that he had died accidentally during a fistfight. there's a bloomberg online opinion piece whick looks at us president
donald trump's use of his personal iphone and warns that mr trump's unsecured calls could be a threat to national security, as they may give crucial insight to america's adversaries. and finally, the results from thejury are in. the independent writes how researchers asked more than 2 million people who they thought should be sacrificed in a driverless car accident. according to the study, a majority of the public said animals and old people should be the casualties of such accidents.