22/12/2016 World Business Report

No early Christmas present on Wall Street as the Dow's rally

Plus, an expensive day in court - a Brazilian firm agrees to pay

around $3 billion to settle corruption charges, the biggest

we look at the man who will head a newly formed White House National

Trade Council and what that means for China.

But first, we start on Wall Street, where it

seems this chap has made an appearance.

temporarily at least, stolen Christmas.

a 'Santa Rally,' and after a week of record closes investors

were expecting to celebrate the Dow Jones Industrial Average

hitting 20,000 points for the first time on Wednesday.

Instead they got this - the Dow closed down 32

It got within 15 points of 20,000 before falling back.

Market watchers say investors have been cashing in their profits

after what has been the biggest post-election rally in more

And the price of oil has rebounded massively -

gains for Brent Crude this year are close to 50%.

The US dollar has also been soaring against major currencies. It is that

a 14 year high against the British pound. It is up over 16%.

Some experts are warning though that the US stock market

in particular is getting ahead of itself

Valuations are looking stretched and stretched with each passing day.

We've been thinking for some months that valuations in the US

are unattractive, and the rally we've seen since election day

So, it's not a negative call, it's not necessarily a bear-ish,

look-out-below call, but we think there is going to be

tougher yards in 2017 than many people might suspect.

Staying in New York, where a Brazilian firm has been hit

Job ace Williams is managing director of Milton Asset Management.

-- Job ace. So, they didn't get the gift of the 20,000 celebration

yesterday on the Dow Jones. Will it come soon? I think there is put your

momentum in the markets but we have seen the bond markets beginning to

back up, the yields are rising and investors are looking for other

assets which might be rising. It is quite an expensive market now

because you have the strong dollar, in common nation with the strong

market. The combination of those rises together means the rise has

been quite significant already. You are quite concerned about the ahead,

something you have been focusing on. Give us your take on the sort of

rally we have been experiencing, and what might burst the bubble. The

whole point is that this is actually about hope, and when we get to the

arrival of trumpets may be that reality is more difficult. In

particular, evaluations are very high and some companies may be

caught out, losing out due to the strong dollar and due to the fact

that the overseas companies are actually competing pretty hard at

the moment. It is quite interesting, one we look at what the top has been

up to, the people he has appointed and the people behind him. Peter

Navarro was the latest added to the list. Give us your take on those he

is choosing to work with, and the impact that might have? A bit

unknown. They look quite combative, and we do not know how that will go.

There may be more trade restrictions going forward, which might undermine

the valuation of the markets. In terms of what that means for the

United States in China, it is quite interesting. Because of course he

has had lots of things about naming them as a currency manipulator on

day one, unravelling the transpacific partnership, and yet

China eight has so far been quite quiet, and is listening. Yes, the

Chinese economy has taken world trade from about 4% of world trade

to about 12% of world trade over the last 15- 20 years. That has had a

big effect on jobs. Jobs going forward will be a big issue for the

Donald Trump. What we are seeing is that the Chinese currency is

weakening at the moment. The economy is overheating, we're already

inflation building up in China. That may be a big issue next year. Sir as

we run into the New Year, there are few trading days in between

Christmas and New Year. It has historically been called a Santa

rally, where we see equity markets going up during that time. But it is

quite dangerous, isn't it? It is thin trade, volumes are light, and

there could be serious moves on the markets. It is quite interesting,

when you look back on the past, the peaking of markets, perhaps in 1990

when Japan peaked, it was actually the last day of the year. So you

often see this peak towards the end of the year, and the new you can

start on a flat in more difficult load. Thank you for your time today.

Of course, we will be watching the US today is welcome if they do hit

20,000, it could happen later, we will fill you in.

Staying in New York, where a Brazilian firm has been hit

by the biggest bribery fine in history.

Odebrecht, which is the largest engineering firm in Latin America,

and its affiliate Braskem, were before a court

These are their lawyers, who agreed to pay more than $3

billion to settle charges under the US

They have admitted paying out hundreds of millions of dollars

to Brazilian state oil firm Petrobras and others to secure

From New York, here's Samira Hussain.

In a New York court on Wednesday, Odebrecht agreed to pay at least

$2.6 billion to US, Swiss and Brazilian authorities, making this

the largest foreign bribery case in history. But this is a Brazilian

company, so why is this case happening here in the United States?

Well, it is because the company was found guilty of violating the US

foreign corrupt practices act. American laws are so vast and wide

sweeping that as soon as a company has any dealings that tie it to the

United States, they are subject to these rules. The trouble. Brazilian

firms may not end here. The sources that I have here in Brazil, who were

directly involved in the negotiations for this, this leniency

for this plea deal that we saw play out today, they have told me that

literally up to 100 new investigations could come from this,

still. The reason for that is because Odebrecht agreeing to pay

this enormous fine, a historic fine, the flipside of that is that of

their executives have turned state witness and they are now giving

testimony to Brazilian prosecutors about, well, it is anybody's yes as

to what other crimes they have committed. It is expected that up to

200 Brazilian politicians could be duplicated in the case. Earlier in

the year, the Odebrecht chief executive was jailed in Brazil for

paying bribes to executives at Brazil's state-run oil firm,

Petrobras, which has been under investigation for corruption and

bribery that has entangled Brazil's Vidigal officials.

Staying in the US, and as you have been hearing,

US President-elect Donald Trump has named this man,

Peter Navarro, to head a newly formed White House National Trade

He's an academic and former investment adviser.

He's also the author of a book called Death by China,

about what he sees as the Chinese threat to the US economy.

So how is this going to go down in Asia?

Let's go to Rico Hizon, in our Asia business hub. Nice to see you. Just

tell us your thoughts on this Peter Navarro appointment, and how that

will be received in Asia? Well, Navarro's appointment may not go

down positively in the region in 2017, Sally. Mr Trump made trade ace

-- made trade centrepiece of his positional campaign and railed

against what he called bad deals the US had made with other countries,

particularly, he threatens to hit Mexico and China with high tariffs

once he takes office on January 20. He could also, potentially, brand

the mainland as a currency manipulator. If Navarro years, as a

-- if Navarro is as advertised, this could send a serious signal that the

trumpet administration means business and will engage Beijing on

trade and politics. Navarro has described what it calls America's

losing economic war with the mainland, and has also brought

attention to concerns over in by mental issues with China's imports

and intellectual policies. Navarro would develop policies which would

shrink the trade deficit and help stop the exodus of jobs from US

shores full top thank you, Rico Hizon.

Billionaire investor Carl Icahn will serve as a special adviser

to president-elect Donald Trump, focusing on regulatory reform.

Mr Icahn has criticized what he called "excessive

He is a major shareholder in companies including insurer

American International Group and oil refiner CVR Energy.

Chinese e-commerce giant Alibaba is back on the US's "notorious

markets" list over counterfeit goods sales.

Alibaba was taken off the list four years ago,

but US authorities say the firm's online platform Taobao is used

The company has rejected the allegations, insisting it

polices its market place better than in the past.

While we are talking markets, here is how things are going in Asia.

Interesting trade as we head towards the end of the year. Japan is down

by 0.5%. In the United States, and reminder of how the Dow ended.

Whether we are going to hit that 20,000 today, we will see later.

That is all from me for now. See you later.