:00:00. > :00:00.This is Business Live from BBC News with Aaron Heslehurst and Ben Bland.
:00:07. > :00:10.Can America's banking giants back their sky-high share prices
:00:11. > :00:32.Live from London, that's our top story on Thursday the 13th of April.
:00:33. > :00:35.JPMorgan, Wells Fargo and Citi kick off the earnings seasons where we'll
:00:36. > :00:46.get to learn the strength of any Trump bump.
:00:47. > :00:49.Also in the programme: "They're not currency manipulators" -
:00:50. > :00:52.the US President makes a big U-turn on his view of China's
:00:53. > :01:01.And as always we'll give you the latest lowdown on what's
:01:02. > :01:06.happening on the markets all around the world.
:01:07. > :01:11.And we'll be getting the Inside Track on the key
:01:12. > :01:15.The founder of UK high street stalwart Timpson's will be
:01:16. > :01:17.here to explain why he's expanding his key-cutting and shoe
:01:18. > :01:20.repair business overseas, and why Brexit was the right
:01:21. > :01:30.Today, as Burger King launches a new ad that hijacked
:01:31. > :01:33.Google's home assistant, we want to know: Do adverts
:01:34. > :01:35.need to be more creative to get your attention these days?
:01:36. > :01:52.We start on Wall Street, where it's a hugely
:01:53. > :02:13.Now, we know the share prices of banks have soared in the months
:02:14. > :02:15.following President Trump's election, led by America's biggest
:02:16. > :02:18.But in recent weeks, doubts have been creeping in,
:02:19. > :02:24.let me show you what we have put together.
:02:25. > :02:27.Today we get first quarter results from the biggest US bank,
:02:28. > :02:30.JPMorgan Chase, and later from its rival Citigroup.
:02:31. > :02:32.They're the first of a barrage of reports
:02:33. > :02:42.But will they be good enough to justify the Trump rally,
:02:43. > :02:49.or confirm those fears that it's a bubble waiting to burst?
:02:50. > :02:56.President Trump has famously promised to throw out the mass
:02:57. > :03:01.of banking regulation brought in by the Obama administration
:03:02. > :03:03.after the financial crisis - the Dodd-Frank Act of 2010.
:03:04. > :03:07.But he's been struggling to pass other legislation
:03:08. > :03:13.like healthcare reform, so this is all up in the air.
:03:14. > :03:16.Still the banks have had a boost from rising US interest rates,
:03:17. > :03:18.which have now hit 1% and are expected to hit 3%
:03:19. > :03:31.This means more profits, because it helps their lending margins.
:03:32. > :03:33.That's the difference between the interest rate they offer
:03:34. > :03:41.to savers and the rate they charge to borrowers.
:03:42. > :03:46.Professor Thorsten Beck is Professor of Banking and Finance
:03:47. > :03:59.Welcome to Business Live. The banks, big time of the year for them,
:04:00. > :04:04.revealing their profits. Do you think they have already priced in
:04:05. > :04:12.the anticipation of looser regulation, or do you think we are
:04:13. > :04:15.yet to see that affect them? I don't think we will see that in the
:04:16. > :04:19.reports coming out of the next couple of days. What the banks have
:04:20. > :04:23.been benefiting from his healthy credit growth over the last couple
:04:24. > :04:26.of years. The US financial market looks different from the European
:04:27. > :04:35.market. They have come out of the crisis much quicker than we did in
:04:36. > :04:40.Europe. And as Aaron just mentioned, this will drive the only rates. The
:04:41. > :04:43.higher share prices are more driven by the expectation of future
:04:44. > :04:46.deregulation. Do you think that this set of results is going to be the
:04:47. > :04:51.last one where they are really feeling the pressure of the interest
:04:52. > :04:53.rates that have been so low for so long that have hit their
:04:54. > :04:59.profit-making ability? Probably, yes. You might see an offsetting
:05:00. > :05:03.effect in the future of the growth slowing, but of course on the
:05:04. > :05:07.investment acting side, there are probably more deals to be had given
:05:08. > :05:13.the general deregulation trend that we see in the US and of course the
:05:14. > :05:16.animal spirits that have been released over the past couple of
:05:17. > :05:24.months, but there is also a high certainty along the way, so it is to
:05:25. > :05:28.be seen. Thorsten, can I ask you this. For the uninitiated out there,
:05:29. > :05:32.these numbers are backward looking. The markets are looking for what is
:05:33. > :05:41.in front. And something we don't touch on with the US banks much is
:05:42. > :05:47.the carload market. -- car loan market. It is very similar to the
:05:48. > :05:56.housing sub-prime market, and we know what happened to that. I would
:05:57. > :06:02.not be as concerned as the sub-prime mortgage market, but yes, it is
:06:03. > :06:09.often hidden from investors' eyes across the banking sector. I don't
:06:10. > :06:13.think it would be as bad as in 2006/7, but yes, care is to be
:06:14. > :06:20.taken. So is it the right time to be talking about deregulation, or if
:06:21. > :06:25.there is a simmering problem in the car loan mar market, isn't this the
:06:26. > :06:34.time when we need that regulation in place to stop that happening? If you
:06:35. > :06:40.tell me that you want to reduce the 1000 pages of Dodd Frank and the
:06:41. > :06:44.regulation that comes with it, that is one way, but it is more about the
:06:45. > :06:49.general regulatory approach that will see change over the next couple
:06:50. > :06:54.of ears potentially. I don't think we are looking at a reform of the
:06:55. > :06:59.Dodd Frank act any time soon, because it is not top of the
:07:00. > :07:03.legislative agenda, and that has kind of stalled over the last couple
:07:04. > :07:09.of weeks. I think what they will look at our two things, number one
:07:10. > :07:15.in the budget appropriation process, the regular treat framework might be
:07:16. > :07:18.starved of funds, such as the financial protection, the equivalent
:07:19. > :07:22.to the FCA, and second, there are three open positions at the Federal
:07:23. > :07:27.reserve board, two more potentially opening up next year, and so five
:07:28. > :07:30.positions out of seven to be filled by the Trump administration, and
:07:31. > :07:34.that can set the tone for a different type of regulatory
:07:35. > :07:37.approach. That is what we will have to keep our eye on. Professor
:07:38. > :07:40.Thorsten Beck, thank you for joining us.
:07:41. > :07:43.Let's take a look at some of the other stories making the news.
:07:44. > :07:45.United Airlines' chief executive has said he will not quit
:07:46. > :07:48.amid an explosive backlash to video of a screaming man being dragged off
:07:49. > :07:51.Oscar Munoz said he felt "shame and embarrassment",
:07:52. > :07:57.Let's take a look at some of the other stories making the news.
:07:58. > :08:00.and vowed it would never happen again to a seated passenger on one
:08:01. > :08:03.The embattled aviation boss said the passenger
:08:04. > :08:04.in question, David Dao, deserved "certainly an apology".
:08:05. > :08:10.A group of shareholders has written to electric car-maker Tesla
:08:11. > :08:12.questioning the independence of its board, warning it's too close
:08:13. > :08:16.They urged it to re-elect members annually and to add two
:08:17. > :08:18.new independent directors to the board.
:08:19. > :08:20.In a tweet Mr Musk said the investors "should buy
:08:21. > :08:39.The French supermarket group Carrefour has posted a strong rise
:08:40. > :08:44.of 6.2% meaning it hit almost $22.7 billion. Its Brazilian business was
:08:45. > :08:48.one of the main reasons why, with 38% growth in turnover, mitigating
:08:49. > :08:53.the impact of its poorly performing French business.
:08:54. > :08:55.US President Trump has said his administration will not
:08:56. > :08:59.The huge U-turn comes despite his campaign promise to do
:09:00. > :09:10.Rob Brandt is in Shanghai and joins us. Good to see you.
:09:11. > :09:16.It is another U-turn, but in general terms, this is good news for all of
:09:17. > :09:22.us? We don't want these countries having a trade battle? You talk to a
:09:23. > :09:28.whole range of people, I interviewed the CEO of Ford a few minutes ago,
:09:29. > :09:31.they also the same, nobody wants a trade war between the United States
:09:32. > :09:36.and China, the world's two biggest economies. It is a substantial
:09:37. > :09:45.U-turn for the president, he spent months on the campaign Trail saying
:09:46. > :09:49.that China was a currency manipulator and had been taking US
:09:50. > :09:55.jobs, but now he says they are not. The figures for the past few years,
:09:56. > :09:59.it has been appreciated in value and growing in strength against the US
:10:00. > :10:03.dollar. Maybe what we are seeing is part of this grand bargain that
:10:04. > :10:06.President Trump appears to be offering China, we saw that detailed
:10:07. > :10:14.in Florida, and at the heart of that is North Korea, trade deals a key
:10:15. > :10:26.part of that. Thank you for the update, Rob.
:10:27. > :10:41.Let's look at the markets kicking off around the world.
:10:42. > :10:45.expected to follow more of a cautious trading session as it has
:10:46. > :10:48.done in the past, and again, just important to note that the dollar
:10:49. > :10:50.has dipped off the back of President Trump saying that China is not a
:10:51. > :11:01.manipulator. central bank to keep
:11:02. > :11:04.interest rates low - because the dollar is
:11:05. > :11:06.getting too strong... OK - let's turn our
:11:07. > :11:08.attention now to Brazil - one of the world's biggest emerging
:11:09. > :11:11.economies - it's finally cut its main interest rate by 1%
:11:12. > :11:13.but it's still 11.25%. Here's Daniel Gallas
:11:14. > :11:18.in Sao Paulo with the details. We haven't seen interest rates to
:11:19. > :11:26.this fast in Brazil for almost eight years. Back then it was a completely
:11:27. > :11:29.different country, the B in Brics, one of the fastest-growing countries
:11:30. > :11:32.in the world. Now it is mired in corruption scandals and facing one
:11:33. > :11:37.of its worst recessions in history. So there is this drop in interest
:11:38. > :11:41.rates, does that mean Brazil is back on track and back to the good old
:11:42. > :11:46.days? The answer is probably not, at least not so fast. The interest
:11:47. > :11:51.rates drop is partly because Brazilians are unemployed and they
:11:52. > :11:54.have no purchasing power left, so prices are falling, and that means
:11:55. > :11:59.that interest rates can drop as well. The fundamentals of the
:12:00. > :12:02.Brazilian economy are in bad shape. Growth is supposed to be very modest
:12:03. > :12:07.this year, also the Government has high levels of debt. So economists
:12:08. > :12:12.are watching whether the country will keep cutting it interest rates
:12:13. > :12:17.in the next coming months. That could maybe signal that the country
:12:18. > :12:21.is back on track to a very slow recovery.
:12:22. > :12:23.Joining us is Lawrence Gosling who is editor in chief
:12:24. > :12:30.Plenty there to talk about. Let's talk about some of what Daniel was
:12:31. > :12:35.mentioning there and this cut in interest rates in Brazil. As he
:12:36. > :12:38.mentioned, the Brazilian economy is still heavily indebted, and if you
:12:39. > :12:45.are the central bank in any country, you have two weapons at your
:12:46. > :12:53.disposal, they can't pump money into the economy, so they will steadily
:12:54. > :13:00.use this interest rate weapon tool to try to revive the economy. Let's
:13:01. > :13:05.turn our attention closer to Europe. Everybody keep an eye on what is
:13:06. > :13:08.coming up with the elections. The French election around the corner.
:13:09. > :13:13.Turkey's election this weekend coming, an important one because
:13:14. > :13:17.there is still a state of emergency in Turkey and it is a big economy,
:13:18. > :13:21.so that is important. And then the following weekend, the first round
:13:22. > :13:26.of the French elections, it could be all over in wonder if one of the
:13:27. > :13:33.candidates gets 50% of the vote, not expected, it is very tight. So these
:13:34. > :13:38.other two next key elections. And especially the French election, does
:13:39. > :13:41.that affect European market at all? European equity markets have cooled
:13:42. > :13:47.off a little, and the sovereign bonds of France in particular have
:13:48. > :13:52.eased off a little bit as well. So investors are nervous, albeit most
:13:53. > :13:56.people don't expect Marine Le Pen to end up being elected after the
:13:57. > :14:03.second round. And the Turkey referendum rather than an election.
:14:04. > :14:06.That is the key thing about that. Thank you very much, you will be
:14:07. > :14:08.back to go through the papers with us shortly.
:14:09. > :14:16.The inside track on why one of the UK's biggest high-street chains
:14:17. > :14:21.thinks it has the key to success in China. You are watching Business
:14:22. > :14:26.Live on BBC News. Sainsbury's Argos are opening
:14:27. > :14:31.their 50th digital store today. It's part of plans to
:14:32. > :14:32.transform the retailer after Sainsbury's bought
:14:33. > :14:36.the Home Retail Group in 2016. They're also announcing plans
:14:37. > :14:39.to open ten mini Habitat stores in branches of Sainsbury's -
:14:40. > :14:44.and 90 stores will have Argos John Rogers is the CEO
:14:45. > :15:00.of Argos he joins us now. I'm sure some people will be
:15:01. > :15:04.delighted by this, but are you not potentially putting some people off
:15:05. > :15:09.who are not quite so, double, they love that traditional catalogue? I
:15:10. > :15:13.think it is about giving customers choice. Many of them do love the
:15:14. > :15:17.catalogue, but many of them like to be above the shop in-store in an
:15:18. > :15:20.easy and convenient way through the digital tablet, so it is about
:15:21. > :15:24.providing customers with choice, whether it is home delivery, picking
:15:25. > :15:29.up stuff in the supermarket or indeed going into one of our Argos
:15:30. > :15:34.high-street stores and giving customers that choice to grow sales,
:15:35. > :15:40.giving us a successful six-month sales and a winning market share.
:15:41. > :15:46.One other interesting is, when you look at your rivals, like Amazon,
:15:47. > :15:50.with big warehouses is out of town, if they don't have the same sort of
:15:51. > :15:55.business rate overheads that you inevitably do in stories in towns
:15:56. > :16:08.and city centres, where you concerned by the recent changes? As
:16:09. > :16:11.a business, with, say, Argos, we pay over half ?1 billion in business
:16:12. > :16:19.rate and we would ask the Government to look at reforming the system, and
:16:20. > :16:23.out of date tax clearly focused on property, and with those retailers,
:16:24. > :16:27.in in this digital world, it is becoming less relevant so I think we
:16:28. > :16:29.welcome some of the small changes made to the system and processes are
:16:30. > :16:35.the last 12 months or so but fundamentally we are asking for a
:16:36. > :16:39.major freehold. John, many thanks. John Rogers, Chief Executive of
:16:40. > :16:44.Argos. Don't forget you can find plenty on the Business Live page.
:16:45. > :16:47.Right now, bad news if you're planning to travel over the bank
:16:48. > :16:58.holiday weekend. Virgin's Isco sorry, no, forgive me, it is later
:16:59. > :17:01.in April. Not this weekend. It is later in the month. Just frighten
:17:02. > :17:03.half the country! LAUGHTER
:17:04. > :17:19.Is US burning season kicking off? It kicks off with the big banks over in
:17:20. > :17:27.America and they will tell us how much money have been making -- is US
:17:28. > :17:29.banking season kicking off? A quick look at how
:17:30. > :17:37.markets are faring... This is the start of the trading day
:17:38. > :17:41.in Europe, all down just a shade, very cautious. Now, I want to talk
:17:42. > :17:43.about this... Imagine taking over a family
:17:44. > :17:45.business and then more Timpson was founded
:17:46. > :17:50.in Manchester in 1865 as a shoe store and later expanded
:17:51. > :17:53.into manufacturing and repairs. In 1975 it had 430 stores
:17:54. > :17:56.and a new managing director, with John Timpson taking over
:17:57. > :17:58.the family business. Now the company has
:17:59. > :17:59.almost 1900 stores in the UK and Ireland,
:18:00. > :18:12.and one shop in Beijing. Here to give us the inside
:18:13. > :18:25.track is John Timpson, Welcome to Business Life. Successful
:18:26. > :18:29.business in the UK and Ireland. What tempted you about China? The
:18:30. > :18:37.Chinese! LAUGHTER
:18:38. > :18:41.-- welcome to Business Live. Looking around the world, they wanted a
:18:42. > :18:45.model to copy, they found us, and that is what is happening. Do you
:18:46. > :18:50.think it is the start of more? Not much point just having one. Yes, a
:18:51. > :18:56.silly question. But you have a lot of shoes over there. We have one,
:18:57. > :19:01.there will be more fairly soon. Obviously we have to learn how to do
:19:02. > :19:06.it, we have one or two of our people over there. A long way to go. I'm
:19:07. > :19:11.not getting excited yet, but it is a very interesting new direction for
:19:12. > :19:15.us. Can I ask you this? I know you were watching the interview with
:19:16. > :19:24.John as well from Argos. Their model was very similar... Asking if this
:19:25. > :19:28.is the future, you know, click collect, picking up in supermarkets,
:19:29. > :19:33.and you're opening up a lot of the Timpsons in supermarkets around the
:19:34. > :19:37.UK. Is that the future because it is with the footfall is? We are in
:19:38. > :19:41.pretty much every high street you want to be end, and we are opening
:19:42. > :19:45.lots of shops together with supermarkets, all the big format,
:19:46. > :19:50.particularly Tesco and Sainsbury's. Most of them are little pods in the
:19:51. > :19:54.car parks, near the entrance. You obviously are doing something right
:19:55. > :20:01.with your business, growing and so on. What is interesting is how you
:20:02. > :20:04.draw up your business plans, 15 years in advance? There is this
:20:05. > :20:09.little trick I do every three years as a way of stimulating... You know,
:20:10. > :20:14.we don't have forward planning meetings or anything like that, but
:20:15. > :20:20.I write a chairman's report for 15 years' time. How do you know what is
:20:21. > :20:24.coming up? Of course you don't! But it takes you away from today.
:20:25. > :20:32.Instead of writing a forward plan, most people for word -- people's/ is
:20:33. > :20:35.just from today, and they say the sales will go faster than costs so
:20:36. > :20:41.they make more money, so they can put that to bed and so on, but my
:20:42. > :20:44.forward plan, my annual report for 2032, which I have just written...
:20:45. > :20:48.LAUGHTER It is trying to guess what will
:20:49. > :20:53.happen. Actually, do you know what? The most interesting thing about it
:20:54. > :20:59.is the thing is that absolutely don't change. And the thing that
:21:00. > :21:04.matters most to me is the fact that in 2032 one of the bits of our
:21:05. > :21:09.culture we have to keep, and we will still be making sure we take great
:21:10. > :21:12.people and let them get on with it, what I call upside-down management,
:21:13. > :21:21.it'll still be how we run our business. Which is in your book?
:21:22. > :21:26.Absolutely. We have to wrap it up, but upside-down management... The
:21:27. > :21:33.book is cold Keys To Success and it is 50 different quirky things we do
:21:34. > :21:37.to make a difference, and the way to give great service in shops, part of
:21:38. > :21:40.the secret to our success, we allow the people who sell to our customers
:21:41. > :21:49.to do it how they want, and they do it as long as we pick great people.
:21:50. > :21:53.OK, thank you. Upside-down management. I wonder if we can apply
:21:54. > :21:58.that to presenting? Could do, I don't know!
:21:59. > :22:00.Now, are you happy to have your food delivered...
:22:01. > :22:03.That's the question being asked of take-out food
:22:04. > :22:10.It's the first full scale roll-out of technology that could mean
:22:11. > :22:13.the end of the road for scooter delivery riders.
:22:14. > :22:40.We think the best approach for this kind of system is one where,
:22:41. > :22:44.you know, there's constant human oversight of the robots.
:22:45. > :22:47.The architecture we've chosen is one where a person is capable
:22:48. > :22:51.of controlling one or two robots, and over time it would build
:22:52. > :22:59.into more and more autonomous operation so that there is one
:23:00. > :23:02.person then controlling five, and then ten and so on, so effectively
:23:03. > :23:04.multiplying the ability of a given person to do more work
:23:05. > :23:53.over the set of robots that they're overseeing.
:23:54. > :23:55.What other business stories has the media been
:23:56. > :24:01.Laurence Gosling is joining us again to discuss.
:24:02. > :24:10.Burger King, new TV at, designed to interact with your device, and
:24:11. > :24:14.Google don't seem to like it? No, because it was only running for
:24:15. > :24:19.three hours and they disallowed the software that allowed this app to
:24:20. > :24:26.pop up on your phone or Google bomb device. Saw the commercial on the TV
:24:27. > :24:32.use the trigger words to activate -- Google device. The yes, it would
:24:33. > :24:35.tell you where to get it, pay it back, so it is kind of stealth
:24:36. > :24:40.marketing and I am sure somebody thought it was a clever idea. I'm
:24:41. > :24:44.sure it got a bit of coverage. We asked whether people like the idea
:24:45. > :24:53.or if it was too invasive. The two best responses - advertising just
:24:54. > :24:56.needs to be targeted. Tom says simply for something I want to own
:24:57. > :25:05.or desire, and those things don't matter to me. Look at this picture.
:25:06. > :25:08.What is going on with Swiss chocolate and appLindt? They are
:25:09. > :25:17.suffering because we all are getting more healthy -- what is going on
:25:18. > :25:21.with Lindt? But the cost is going up because of the cocoa beans... Yes,
:25:22. > :25:25.clearly this with cannot draw their own Kauko. The other thing,
:25:26. > :25:32.interestingly enough... Why not? They are very good at Cowes for the
:25:33. > :25:36.milk, but... You know, this is a luxury item. It is expensive and
:25:37. > :25:41.that is how they position themselves. It is Easter now so we
:25:42. > :25:44.will all go and buy some chocolate and we will just buy the cheapest
:25:45. > :25:50.chocolate and consume it quickly. But what about the chocolate? It is
:25:51. > :25:54.higher quality because it is only manufactured to be on the shelves
:25:55. > :25:59.for short time so can eat it and it is not quite as unhealthy for you.
:26:00. > :26:03.Ah! OK, see you soon. Happy Easter.