Browse content similar to 08/01/2016. Check below for episodes and series from the same categories and more!
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This is business life. After a tumultuous week, Chinese shares jump | :00:08. | :00:17. | |
and close high but concern now growing about a looming currency | :00:18. | :00:22. | |
war. That is our top story on Friday eighth January. | :00:23. | :00:39. | |
After the week we have had since August it has been a terrible time | :00:40. | :00:45. | |
the markets, Chinese shares ending slightly higher but currency | :00:46. | :00:49. | |
concerns cast a shadow over the week ahead. Copyright laws in China in | :00:50. | :00:54. | |
question is a firm sees its merchandise confiscated in Las Vegas | :00:55. | :01:01. | |
after claims of eight and infringement. The latest from the | :01:02. | :01:05. | |
markets where European shares have edged higher after that rebound in | :01:06. | :01:09. | |
Chinese stocks. And we will be getting the inside track on the US | :01:10. | :01:15. | |
jobs market, it is that time of the month, one of the key barometers of | :01:16. | :01:18. | |
the health of the world biggest economy will be released in a few | :01:19. | :01:24. | |
hours but will it support the American central back? It raised | :01:25. | :01:29. | |
rates last month, will the numbers support that? We will discuss that. | :01:30. | :01:35. | |
And the European Space Agency has announced funds to put humans on the | :01:36. | :01:41. | |
moon again. Would you be interested in signing up? Would it be money | :01:42. | :01:50. | |
well spent? Please reply using the hashtag. | :01:51. | :02:02. | |
Hello and welcome to the programme. So goes January, so goes the year | :02:03. | :02:12. | |
and that is a worrying thought this week. The Chinese market has | :02:13. | :02:18. | |
stabilised today, closing slightly higher but no celebrations yet | :02:19. | :02:21. | |
because concern about growth in the Chinese economy still is alive and | :02:22. | :02:25. | |
kicking and the strength of the Chinese currency is also causing | :02:26. | :02:31. | |
concern and that is something that the Chinese authorities are wanting | :02:32. | :02:39. | |
to change. In fact, the yuan hit a five-year low as the People's Bank | :02:40. | :02:45. | |
look and to weaken the currency in the hope of sparking export growth | :02:46. | :02:48. | |
but it sparked Alnwick and the central bank intervention led to an | :02:49. | :02:57. | |
emerging market currency sell-off. Malaysians and South Korean | :02:58. | :03:01. | |
currencies have both weak and while the South African rand is down more | :03:02. | :03:05. | |
than 3.5%. The falls are not just reserved for emerging markets, the | :03:06. | :03:10. | |
Australian dollar is more than 4% lower this week. But not all | :03:11. | :03:18. | |
currencies are weaker, safe havens like the Japanese yen are moving in | :03:19. | :03:19. | |
the opposite direction. Visit the start of a currency war? | :03:20. | :03:25. | |
All of these central banks looked to be | :03:26. | :03:34. | |
fighting to the bottom. We got our correspondence back from Singapore. | :03:35. | :03:43. | |
Let's talk about that. A couple of days ago, we saw the China Central | :03:44. | :03:50. | |
bank allowing the yuan to devalue. That makes Chinese stuff cheaper but | :03:51. | :03:56. | |
you look at the other Asian manufacturers in the area, | :03:57. | :04:04. | |
commodities, they don't want the currency to be more expensive. They | :04:05. | :04:09. | |
are between a rock and a hard place, especially in the face of what we | :04:10. | :04:12. | |
anticipate to be higher US interest rate this year. When the yuan | :04:13. | :04:19. | |
effectively depreciates as a result of the central bank's movements, | :04:20. | :04:23. | |
forced to make a decision, other forced to make a decision, other | :04:24. | :04:29. | |
central banks, whether they allow their currency to weaken, as some | :04:30. | :04:38. | |
have, for example the ringiit. Or do they strengthen in the face of a | :04:39. | :04:43. | |
weakening yuan? They have to be competitive and remain competitive | :04:44. | :04:48. | |
to try to export their way out of their own slowdown. Can we just | :04:49. | :04:56. | |
explain? Let them all have weaker currency, what would that do? It | :04:57. | :05:02. | |
means it's difficult to buy raw materials and make the stuff you | :05:03. | :05:06. | |
need to in order... Like in US dollars. It makes it difficult to | :05:07. | :05:12. | |
import goods into your country because that becomes more expensive | :05:13. | :05:14. | |
and it puts pressure on ordinary consumers like you and me. Thinking | :05:15. | :05:21. | |
about sending our kids to university, many Asians in the | :05:22. | :05:25. | |
region have those ambitions, a lot of Asian corporates and companies | :05:26. | :05:28. | |
have their debt in US dollars and that gets harder to pay off and | :05:29. | :05:32. | |
becomes troublesome for the economy is on the whole. We have been | :05:33. | :05:37. | |
talking about these so-called currency wars but can we accuse the | :05:38. | :05:42. | |
People's Bank of China of deliberately stoking this? In the | :05:43. | :05:47. | |
last month we have seen money escaping from the Chinese economy. | :05:48. | :05:52. | |
They are just trying to stabilise their own currency. That is very | :05:53. | :05:57. | |
fair. What we have seen in the last week is the Chinese trying to | :05:58. | :06:02. | |
stabilise the yuan as this massive capital outflow you were describing | :06:03. | :06:05. | |
is taking place and that is happening because there is this | :06:06. | :06:10. | |
sense of pessimism and anxiety about the way the economy is going and | :06:11. | :06:15. | |
that is being reflected, a metaphor we have seen in the volatility of | :06:16. | :06:19. | |
the Chinese markets this week. What does the central bank, what | :06:20. | :06:25. | |
mechanism does it have left? This is the only way it can try to stabilise | :06:26. | :06:30. | |
the yuan but it is having a knock-on adverse effect, partly because these | :06:31. | :06:33. | |
actions are not being particularly well communicated to the markets. We | :06:34. | :06:40. | |
are running out of time. Thank you, great to see you. | :06:41. | :06:51. | |
Let's take a look at some other news. Saudi Arabia is considering to | :06:52. | :06:58. | |
sell shares in its vast state oil company. | :06:59. | :07:00. | |
That's according to the kingdom's deputy crown prince Mohammed bin | :07:01. | :07:03. | |
Salman in an interview with the Economist magazine. | :07:04. | :07:06. | |
We will be talking about that at the end of the show. | :07:07. | :07:10. | |
Saudi's public finances have been hit hard by the 70 per cent plunge | :07:11. | :07:13. | |
in the price of crude oil over the last 18 months. | :07:14. | :07:16. | |
Analysts estimate Aramco is worth over a trillion dollars, | :07:17. | :07:18. | |
Saudi's public finances have been hit hard by the 70 per cent plunge | :07:19. | :07:22. | |
even selling off a minority stake of 20 per cent could fund | :07:23. | :07:25. | |
Samsung Electronics says its operating profit is likely | :07:26. | :07:29. | |
The preliminary figures indicate that that sales are likely to be | :07:30. | :07:34. | |
affected by weak demand in China and currency woes. | :07:35. | :07:38. | |
Analysts believe the smartphone market is becoming saturated | :07:39. | :07:40. | |
and the tech giant will face another year of weaker sales as a result. | :07:41. | :07:55. | |
Samsung, Apple, they are all victims of their own success a saturated | :07:56. | :08:05. | |
market! Let's talk about VW. Everybody knows about their problems | :08:06. | :08:09. | |
with the diesel engines. It is suggested they made buy-back cars in | :08:10. | :08:15. | |
the US because they say it will be cheaper to buy back the cars as | :08:16. | :08:21. | |
opposed to fixing them. Around 50,000 cars could be purchased from | :08:22. | :08:25. | |
their owners. I wonder how much that will cost. Let's see what else we | :08:26. | :08:36. | |
have got. Samsung talking about those weaker numbers and the Apple | :08:37. | :08:43. | |
share price, it has lost something like $20 billion of its value | :08:44. | :08:47. | |
because it is cutting back production of the iPhone because | :08:48. | :08:48. | |
everybody has got one! Let's take a look round the world | :08:49. | :08:50. | |
at what's business stories This is an interesting one, a great | :08:51. | :09:06. | |
story. A real controversy going on at CES in Las Vegas. There was quite | :09:07. | :09:11. | |
a stir when a couple of US federal marshals turned up and started | :09:12. | :09:17. | |
removing merchandise and pulling down signs belonging to a Chinese | :09:18. | :09:28. | |
company. A silicon valley start-up called Future Motion accused this | :09:29. | :09:32. | |
Chinese company of copying its design for an electric, board which | :09:33. | :09:36. | |
it invented a couple of years ago. The Chinese version was on display | :09:37. | :09:42. | |
at the show. It is also for sale on Ali Barbour for about a third of the | :09:43. | :09:48. | |
price of the American company. The US start-up is not happy and the | :09:49. | :09:51. | |
case will be in court next week and so far there has been no comment | :09:52. | :09:58. | |
from the Chinese company. Fireworks in Las Vegas, thank you. The markets | :09:59. | :10:04. | |
in China finished eight tumultuous week. -- a tumultuous week. We can | :10:05. | :10:15. | |
see that the Dow Jones fell almost 400 points on Thursday as the | :10:16. | :10:18. | |
Chinese turmoil spilled over to the local markets. But Europe, | :10:19. | :10:24. | |
tentatively positive this morning. Oil prices moved around 1.5% higher. | :10:25. | :10:38. | |
And now Nada can tell us us what will making the headlines | :10:39. | :10:40. | |
in the business world in the United States today. | :10:41. | :10:45. | |
Wall Street will have its eyes on China but the big domestic news is | :10:46. | :10:53. | |
December's jobs report. Those figures will be released before the | :10:54. | :10:57. | |
start of trade in New York and it is expected to show that employers kept | :10:58. | :11:03. | |
hiring with non-farm payrolls increasing 200,004 the month and | :11:04. | :11:08. | |
unemployment unchanged at 5%. That would point to continued strength in | :11:09. | :11:11. | |
the labour market despite the pain being felt by US manufacturers who | :11:12. | :11:16. | |
are suffering off the back of a strong dollar and weak global | :11:17. | :11:20. | |
growth. It is also key data for the Fed to digest while considering | :11:21. | :11:24. | |
future rate hikes. Investors will also get to hear from two federal | :11:25. | :11:29. | |
Conservative committee members. -- Federal reserve. | :11:30. | :11:42. | |
We were talking about this earlier, we have been covering this story all | :11:43. | :11:49. | |
week. People might think that Armageddon is here! So much money | :11:50. | :11:56. | |
off the markets. It is not necessarily that exchange. Give us | :11:57. | :12:05. | |
something positive. It's not. Stock market tend to move quite sharply in | :12:06. | :12:12. | |
short periods to factor in new news but when you stand back and get a | :12:13. | :12:16. | |
broader perspective, the economic background is still pretty | :12:17. | :12:18. | |
reasonable with reasonable growth in the UK, the US, things are improving | :12:19. | :12:25. | |
in Europe and even in China growth is quite positive so when you have | :12:26. | :12:28. | |
settled down and adjusted to this news, the background is pretty | :12:29. | :12:32. | |
reasonable and we should seek market stabilising. I know you want to ask | :12:33. | :12:40. | |
about US jobs, but we mentioned how January typically, set the tone of | :12:41. | :12:46. | |
the market. This can't be the tone for the rest of the year! I hope | :12:47. | :12:52. | |
not! We have to bear in mind, because of how the Chinese have | :12:53. | :12:57. | |
handled the sale of state and companies, the currency and stock | :12:58. | :13:00. | |
market interventions, those are pretty unusual events. I don't think | :13:01. | :13:04. | |
January should necessarily set the tone. However, what if we see US | :13:05. | :13:12. | |
jobs data coming out and disappointing? We have been looking | :13:13. | :13:15. | |
to them to take up some of the slack. It's a fair comment. That | :13:16. | :13:20. | |
data has been a fixed point, we have been quite confident that | :13:21. | :13:23. | |
unemployment is reducing and things are improving in the States so we | :13:24. | :13:28. | |
need that number to be close to what we are expecting otherwise it could | :13:29. | :13:32. | |
upset everybody. We will leave it there, you will be running through | :13:33. | :13:34. | |
the papers with us. It's seen as one of the most | :13:35. | :13:36. | |
important economic releases in the world, | :13:37. | :13:41. | |
but will today's US jobs number verify that the American's central | :13:42. | :13:43. | |
bank did the right thing You're with Business | :13:44. | :13:46. | |
Live from BBC News. And now a look at some | :13:47. | :14:01. | |
of the stories from around Britain. And UK household debt has | :14:02. | :14:04. | |
increased to a record high. Tanya Beckett's here to tell us how | :14:05. | :14:06. | |
worried we should be. What is interesting about this is | :14:07. | :14:16. | |
the fact that debt levels are now above where they were just before | :14:17. | :14:22. | |
the financial crisis. The instability we saw as a result of | :14:23. | :14:27. | |
that did not start because of UK debt but the fact we were heavily | :14:28. | :14:32. | |
indebted as a nation and personally added to the pain of the aftermath. | :14:33. | :14:38. | |
What the TUC is saying, this is a trade organisation, it is | :14:39. | :14:44. | |
complaining that debt levels are high again and they are back to | :14:45. | :14:49. | |
about a quarter of household income, and that is too high and the reason | :14:50. | :14:54. | |
for that, they are saying, is that we are not earning any more fulsome | :14:55. | :14:59. | |
if you adjust for inflation can we are earning less -- we are not | :15:00. | :15:05. | |
earning any more. Full it says the government needs to act. | :15:06. | :15:09. | |
It seems like we are going back to square one, we have people... You | :15:10. | :15:17. | |
can't spend more than you earn or you shouldn't because it will come | :15:18. | :15:18. | |
back and bite you, right? I think that is right, but what the | :15:19. | :15:30. | |
TUC is saying, people are having to run up the debt because the income | :15:31. | :15:34. | |
is not rising as inflation is. Therefore they cannot afford to pay | :15:35. | :15:41. | |
their rent or mortgage is because the property values have gone up as | :15:42. | :15:45. | |
well. That is the argument of the TUC. You are right in saying that | :15:46. | :15:50. | |
maybe also you would have to dissect exactly why people are running up | :15:51. | :15:54. | |
debts. People might be tempted to take out loans because interest | :15:55. | :15:59. | |
rates are so low, and not look at the amount they have to pay back, | :16:00. | :16:02. | |
just look at what they have to pay back every month. Very interesting, | :16:03. | :16:11. | |
thank you. Have a great weekend! This is Games Workshop, fantasy | :16:12. | :16:14. | |
model games were not so high up on the Christmas list this year, it has | :16:15. | :16:20. | |
warned that sales in September were below expectations. It also holds a | :16:21. | :16:30. | |
licence to sell Lord of the rings and the Hobbit battle games. We also | :16:31. | :16:37. | |
had a comment from the biggest and most successful investor in the UK | :16:38. | :16:39. | |
but we have no time to tell you! Chinese markets calm after circuit | :16:40. | :16:41. | |
breakers are scrapped but currency concerns loom over | :16:42. | :16:46. | |
the global economic outlook. And it's a Friday and so time | :16:47. | :16:52. | |
to speak to one of our esteemed With the health of the global | :16:53. | :16:56. | |
economy making headlines this week, investors in Europe and the US | :16:57. | :17:02. | |
are nervously waiting for one of the key barometers | :17:03. | :17:05. | |
of world economic growth, In December, 211,000 | :17:06. | :17:07. | |
new jobs were created. A bumper number that meant America's | :17:08. | :17:16. | |
unemployment rate held at 5%. This month a reading | :17:17. | :17:23. | |
of 200,000 is expected. Andrew Walker, our economics | :17:24. | :17:30. | |
correspondent, joins us now. You know what, this is all over the | :17:31. | :17:40. | |
place! All I know is that, I do not know what that 205 was, 200,000 is | :17:41. | :17:47. | |
what is expected. 211,000 was November. And they had written | :17:48. | :17:52. | |
December, we will take that out later on! Everybody watches these | :17:53. | :17:59. | |
numbers, and the US Fed does as well, if we have got something less | :18:00. | :18:03. | |
than 200,000, apart from being a shock for the markets, with that rub | :18:04. | :18:09. | |
it into the American central bank saying, you should not have done | :18:10. | :18:15. | |
that weight rise? -- rate rise? I doubt they would say it was a | :18:16. | :18:22. | |
mistake to raise that rate the small amount we saw in December. It is | :18:23. | :18:25. | |
more how it would affect their rate rise plans in the course of the | :18:26. | :18:29. | |
year. Weak numbers could lead to them thinking carefully about | :18:30. | :18:34. | |
whether or not to pull the trigger a second time. We know from the | :18:35. | :18:37. | |
minutes of that December meeting, the one where they did make the | :18:38. | :18:44. | |
decision to make the first rate rise, we know every member of the | :18:45. | :18:47. | |
committee involved expects there to be a further rise of interest rate | :18:48. | :18:52. | |
of at least three quarters of a percent by the end of the year. That | :18:53. | :18:56. | |
is not a commitment, that is the expectation. If the data, including | :18:57. | :19:02. | |
most notably the jobs figures, where to disappoint, then of course they | :19:03. | :19:06. | |
would be willing and very keen to restrain themselves a little bit and | :19:07. | :19:10. | |
wait longer than they have been expecting to before they make these | :19:11. | :19:15. | |
further rises. Can I jumped in, and asks, we were talking about the | :19:16. | :19:19. | |
currency depreciation at the beginning of the show. Could this | :19:20. | :19:23. | |
disrupt the Federal reserve's plans for this year when it comes to | :19:24. | :19:27. | |
deflationary pressure and what that means for us? Yes, and going back to | :19:28. | :19:34. | |
those minutes, the committee did agree that there is likely to be | :19:35. | :19:38. | |
some sort of restraining effect on exports from the US as a result of | :19:39. | :19:44. | |
the weakness in emerging economies and I guess all tied up within that | :19:45. | :19:47. | |
very much is what is happening to the dollar, the strength of the | :19:48. | :19:51. | |
dollar which apart from affecting American exports does ring | :19:52. | :19:57. | |
deflationary pressures into the US. They do not expect their target of | :19:58. | :20:01. | |
2% is going to happen very quickly for inflation, they think it will be | :20:02. | :20:05. | |
a couple of years, but there is certainly a possibility of weakness | :20:06. | :20:10. | |
overseas leading to them pushing back the expectations of when the | :20:11. | :20:16. | |
rates will move. Let's talk closer to home. Do you think 2016, are we | :20:17. | :20:21. | |
going to continue seeing those two very different tales, the US and its | :20:22. | :20:29. | |
gross, -- the growth, raising interest rates and a lag in the | :20:30. | :20:35. | |
Eurozone? Is the recovery on track for jobs? There was certainly | :20:36. | :20:37. | |
encouraging stuff in these jobs figures. If you look at the company | :20:38. | :20:43. | |
's most exposed to Financial Times, Italy, Spain, Greece even, set in | :20:44. | :20:48. | |
and Portugal, -- exposed to the financial strain, there have been | :20:49. | :20:53. | |
quite substantial increases in employment. There is concern about | :20:54. | :20:59. | |
the low inflation, it has come up from negative levels we have had in | :21:00. | :21:03. | |
some stages, but the ECB is still concerned about that. They will not | :21:04. | :21:06. | |
be in a hurry to raise rates. There is a striking contrast in the | :21:07. | :21:12. | |
employment figures, we had encouraging news in the crisis | :21:13. | :21:16. | |
countries, but if you look at Finland, they are moving in the | :21:17. | :21:18. | |
opposite direction and there is a distinctive story there, partly to | :21:19. | :21:22. | |
do with the import and export market in Russia, so they have got some | :21:23. | :21:27. | |
real problems in Finland. Also the decline of Nokia, so they have got | :21:28. | :21:33. | |
real problems. Thank you very much. He is esteemed! Not just ordinary | :21:34. | :21:36. | |
editors on this show! Let's take you back now | :21:37. | :21:39. | |
quickly to our top story. Following a torrid week | :21:40. | :21:42. | |
on the markets in Asia, Chinese stocks have closed the day | :21:43. | :21:44. | |
slightly higher after regulators removed their new circuit | :21:45. | :21:47. | |
breaker mechanism. Earlier our UK team spoke | :21:48. | :21:51. | |
with Neil Woodford, one of Britain's most | :21:52. | :21:53. | |
successful investors. He thinks the real issues in China | :21:54. | :21:55. | |
are only just starting to emerge. What is in stark relief is that the | :21:56. | :22:10. | |
problems in China are beginning to surface. The Chinese | :22:11. | :22:14. | |
administration's ability to suppress all of that is getting more | :22:15. | :22:19. | |
difficult. I think it is becoming much more obvious globally and | :22:20. | :22:24. | |
domestic league, within China, that the economy is weaker than they | :22:25. | :22:29. | |
admit to, there is probably a banking crisis around the corner. I | :22:30. | :22:32. | |
have been saying for some time that I think that China's economy will | :22:33. | :22:36. | |
have a hard landing. Much of what we are panicking about now is what we | :22:37. | :22:40. | |
have been talking about as an investing institution for some time. | :22:41. | :22:50. | |
You have been on twitter today, thank you! This one says, fixed the | :22:51. | :22:56. | |
economic problems in Europe before we worry about the moon. This one | :22:57. | :23:04. | |
says, I would like to see people, it is lonely on the moon. This one | :23:05. | :23:12. | |
says, there should be a rescue mission bringing back that lonely | :23:13. | :23:16. | |
old man. There was a UK advert at Christmas about the moon. James | :23:17. | :23:24. | |
says, the mood has been done, let's go to another planet. And Ben | :23:25. | :23:30. | |
Thomson, our own Ben Johnson says, can we send our into the moon! Very | :23:31. | :23:32. | |
naughty! -- can we send Aaron! Let's start with this story in the | :23:33. | :23:44. | |
Economist, this was the news that Saudi Arabia is considering selling | :23:45. | :23:55. | |
to the public Aramco, possibly the world's most valuable company, but | :23:56. | :24:00. | |
it is the secret that we know nothing about it. We can assume it | :24:01. | :24:04. | |
is huge, because Saudi Arabia is the world's largest oil producer. The | :24:05. | :24:10. | |
estimate is that ten times the reserve that Exxon Mobile have, so | :24:11. | :24:17. | |
that is an enormous company. The Saudis need to improve their | :24:18. | :24:19. | |
finances and this gives them an opportunity to do that. The price at | :24:20. | :24:23. | |
which they sell the shares, if they do, will have to be something which | :24:24. | :24:25. | |
is carefully thought through given the pressure that oil markets are | :24:26. | :24:30. | |
currently under. Isn't this a sign of what is happening at the moment? | :24:31. | :24:36. | |
The Saudi is having to sell some of the family silverware at the worst | :24:37. | :24:41. | |
possible time. Exactly. They have got a lot of US Treasury bonds which | :24:42. | :24:44. | |
they have already had to redeem, they will want to balance up where | :24:45. | :24:48. | |
they are realising funds from this is of that process. This story, from | :24:49. | :24:55. | |
the Financial Times, another Chinese billionaire has gone missing. Where | :24:56. | :25:01. | |
are they going, Jane? We do not know where they are going and we do not | :25:02. | :25:04. | |
know why. I think we can assume it is all part of the government's | :25:05. | :25:08. | |
anti-corruption process. We do not know any more detail than that. I | :25:09. | :25:13. | |
just want to tell you this, this is the guy who has gone missing, he | :25:14. | :25:17. | |
went bankrupt twice before the age of 18. He cracked relaunching | :25:18. | :25:20. | |
businesses until they were successful. He has not forgotten his | :25:21. | :25:26. | |
roots, he has recreated part of his village inside the headquarters of | :25:27. | :25:31. | |
his Shanghai business, complete with vegetable fields which are tilled by | :25:32. | :25:34. | |
his farmer. Extraordinaire, only in China. This Powerball lottery, $75 | :25:35. | :25:44. | |
million in the US. I will get my tickets later! Always a pleasure, | :25:45. | :25:50. | |
have a great weekend. That is it from us, plenty more | :25:51. | :25:54. | |
business News throughout the day and on the BBC website. | :25:55. | :26:10. | |
Good morning. After a week of continuous rain, | :26:11. | :26:13. |