Browse content similar to 13/04/2017. Check below for episodes and series from the same categories and more!
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This is Business Live from BBC News with Aaron Heslehurst and Ben Bland. | :00:00. | :00:00. | |
Can America's banking giants back their sky-high share prices | :00:07. | :00:10. | |
Live from London, that's our top story on Thursday the 13th of April. | :00:11. | :00:32. | |
JPMorgan, Wells Fargo and Citi kick off the earnings seasons where we'll | :00:33. | :00:35. | |
get to learn the strength of any Trump bump. | :00:36. | :00:46. | |
Also in the programme: "They're not currency manipulators" - | :00:47. | :00:49. | |
the US President makes a big U-turn on his view of China's | :00:50. | :00:52. | |
And as always we'll give you the latest lowdown on what's | :00:53. | :01:01. | |
happening on the markets all around the world. | :01:02. | :01:06. | |
And we'll be getting the Inside Track on the key | :01:07. | :01:11. | |
The founder of UK high street stalwart Timpson's will be | :01:12. | :01:15. | |
here to explain why he's expanding his key-cutting and shoe | :01:16. | :01:17. | |
repair business overseas, and why Brexit was the right | :01:18. | :01:20. | |
Today, as Burger King launches a new ad that hijacked | :01:21. | :01:30. | |
Google's home assistant, we want to know: Do adverts | :01:31. | :01:33. | |
need to be more creative to get your attention these days? | :01:34. | :01:35. | |
We start on Wall Street, where it's a hugely | :01:36. | :01:52. | |
Now, we know the share prices of banks have soared in the months | :01:53. | :02:13. | |
following President Trump's election, led by America's biggest | :02:14. | :02:15. | |
But in recent weeks, doubts have been creeping in, | :02:16. | :02:18. | |
let me show you what we have put together. | :02:19. | :02:24. | |
Today we get first quarter results from the biggest US bank, | :02:25. | :02:27. | |
JPMorgan Chase, and later from its rival Citigroup. | :02:28. | :02:30. | |
They're the first of a barrage of reports | :02:31. | :02:32. | |
But will they be good enough to justify the Trump rally, | :02:33. | :02:42. | |
or confirm those fears that it's a bubble waiting to burst? | :02:43. | :02:49. | |
President Trump has famously promised to throw out the mass | :02:50. | :02:56. | |
of banking regulation brought in by the Obama administration | :02:57. | :03:01. | |
after the financial crisis - the Dodd-Frank Act of 2010. | :03:02. | :03:03. | |
But he's been struggling to pass other legislation | :03:04. | :03:07. | |
like healthcare reform, so this is all up in the air. | :03:08. | :03:13. | |
Still the banks have had a boost from rising US interest rates, | :03:14. | :03:16. | |
which have now hit 1% and are expected to hit 3% | :03:17. | :03:18. | |
This means more profits, because it helps their lending margins. | :03:19. | :03:31. | |
That's the difference between the interest rate they offer | :03:32. | :03:33. | |
to savers and the rate they charge to borrowers. | :03:34. | :03:41. | |
Professor Thorsten Beck is Professor of Banking and Finance | :03:42. | :03:46. | |
Welcome to Business Live. The banks, big time of the year for them, | :03:47. | :03:59. | |
revealing their profits. Do you think they have already priced in | :04:00. | :04:04. | |
the anticipation of looser regulation, or do you think we are | :04:05. | :04:12. | |
yet to see that affect them? I don't think we will see that in the | :04:13. | :04:15. | |
reports coming out of the next couple of days. What the banks have | :04:16. | :04:19. | |
been benefiting from his healthy credit growth over the last couple | :04:20. | :04:23. | |
of years. The US financial market looks different from the European | :04:24. | :04:26. | |
market. They have come out of the crisis much quicker than we did in | :04:27. | :04:35. | |
Europe. And as Aaron just mentioned, this will drive the only rates. The | :04:36. | :04:40. | |
higher share prices are more driven by the expectation of future | :04:41. | :04:43. | |
deregulation. Do you think that this set of results is going to be the | :04:44. | :04:46. | |
last one where they are really feeling the pressure of the interest | :04:47. | :04:51. | |
rates that have been so low for so long that have hit their | :04:52. | :04:53. | |
profit-making ability? Probably, yes. You might see an offsetting | :04:54. | :04:59. | |
effect in the future of the growth slowing, but of course on the | :05:00. | :05:03. | |
investment acting side, there are probably more deals to be had given | :05:04. | :05:07. | |
the general deregulation trend that we see in the US and of course the | :05:08. | :05:13. | |
animal spirits that have been released over the past couple of | :05:14. | :05:16. | |
months, but there is also a high certainty along the way, so it is to | :05:17. | :05:24. | |
be seen. Thorsten, can I ask you this. For the uninitiated out there, | :05:25. | :05:28. | |
these numbers are backward looking. The markets are looking for what is | :05:29. | :05:32. | |
in front. And something we don't touch on with the US banks much is | :05:33. | :05:41. | |
the carload market. -- car loan market. It is very similar to the | :05:42. | :05:47. | |
housing sub-prime market, and we know what happened to that. I would | :05:48. | :05:56. | |
not be as concerned as the sub-prime mortgage market, but yes, it is | :05:57. | :06:02. | |
often hidden from investors' eyes across the banking sector. I don't | :06:03. | :06:09. | |
think it would be as bad as in 2006/7, but yes, care is to be | :06:10. | :06:13. | |
taken. So is it the right time to be talking about deregulation, or if | :06:14. | :06:20. | |
there is a simmering problem in the car loan mar market, isn't this the | :06:21. | :06:25. | |
time when we need that regulation in place to stop that happening? If you | :06:26. | :06:34. | |
tell me that you want to reduce the 1000 pages of Dodd Frank and the | :06:35. | :06:40. | |
regulation that comes with it, that is one way, but it is more about the | :06:41. | :06:44. | |
general regulatory approach that will see change over the next couple | :06:45. | :06:49. | |
of ears potentially. I don't think we are looking at a reform of the | :06:50. | :06:54. | |
Dodd Frank act any time soon, because it is not top of the | :06:55. | :06:59. | |
legislative agenda, and that has kind of stalled over the last couple | :07:00. | :07:03. | |
of weeks. I think what they will look at our two things, number one | :07:04. | :07:09. | |
in the budget appropriation process, the regular treat framework might be | :07:10. | :07:15. | |
starved of funds, such as the financial protection, the equivalent | :07:16. | :07:18. | |
to the FCA, and second, there are three open positions at the Federal | :07:19. | :07:22. | |
reserve board, two more potentially opening up next year, and so five | :07:23. | :07:27. | |
positions out of seven to be filled by the Trump administration, and | :07:28. | :07:30. | |
that can set the tone for a different type of regulatory | :07:31. | :07:34. | |
approach. That is what we will have to keep our eye on. Professor | :07:35. | :07:37. | |
Thorsten Beck, thank you for joining us. | :07:38. | :07:40. | |
Let's take a look at some of the other stories making the news. | :07:41. | :07:43. | |
United Airlines' chief executive has said he will not quit | :07:44. | :07:45. | |
amid an explosive backlash to video of a screaming man being dragged off | :07:46. | :07:48. | |
Oscar Munoz said he felt "shame and embarrassment", | :07:49. | :07:51. | |
Let's take a look at some of the other stories making the news. | :07:52. | :07:57. | |
and vowed it would never happen again to a seated passenger on one | :07:58. | :08:00. | |
The embattled aviation boss said the passenger | :08:01. | :08:03. | |
in question, David Dao, deserved "certainly an apology". | :08:04. | :08:04. | |
A group of shareholders has written to electric car-maker Tesla | :08:05. | :08:10. | |
questioning the independence of its board, warning it's too close | :08:11. | :08:12. | |
They urged it to re-elect members annually and to add two | :08:13. | :08:16. | |
new independent directors to the board. | :08:17. | :08:18. | |
In a tweet Mr Musk said the investors "should buy | :08:19. | :08:20. | |
The French supermarket group Carrefour has posted a strong rise | :08:21. | :08:39. | |
of 6.2% meaning it hit almost $22.7 billion. Its Brazilian business was | :08:40. | :08:44. | |
one of the main reasons why, with 38% growth in turnover, mitigating | :08:45. | :08:48. | |
the impact of its poorly performing French business. | :08:49. | :08:53. | |
US President Trump has said his administration will not | :08:54. | :08:55. | |
The huge U-turn comes despite his campaign promise to do | :08:56. | :08:59. | |
Rob Brandt is in Shanghai and joins us. Good to see you. | :09:00. | :09:10. | |
It is another U-turn, but in general terms, this is good news for all of | :09:11. | :09:16. | |
us? We don't want these countries having a trade battle? You talk to a | :09:17. | :09:22. | |
whole range of people, I interviewed the CEO of Ford a few minutes ago, | :09:23. | :09:28. | |
they also the same, nobody wants a trade war between the United States | :09:29. | :09:31. | |
and China, the world's two biggest economies. It is a substantial | :09:32. | :09:36. | |
U-turn for the president, he spent months on the campaign Trail saying | :09:37. | :09:45. | |
that China was a currency manipulator and had been taking US | :09:46. | :09:49. | |
jobs, but now he says they are not. The figures for the past few years, | :09:50. | :09:55. | |
it has been appreciated in value and growing in strength against the US | :09:56. | :09:59. | |
dollar. Maybe what we are seeing is part of this grand bargain that | :10:00. | :10:03. | |
President Trump appears to be offering China, we saw that detailed | :10:04. | :10:06. | |
in Florida, and at the heart of that is North Korea, trade deals a key | :10:07. | :10:14. | |
part of that. Thank you for the update, Rob. | :10:15. | :10:26. | |
Let's look at the markets kicking off around the world. | :10:27. | :10:41. | |
expected to follow more of a cautious trading session as it has | :10:42. | :10:45. | |
done in the past, and again, just important to note that the dollar | :10:46. | :10:48. | |
has dipped off the back of President Trump saying that China is not a | :10:49. | :10:50. | |
manipulator. central bank to keep | :10:51. | :11:01. | |
interest rates low - because the dollar is | :11:02. | :11:04. | |
getting too strong... OK - let's turn our | :11:05. | :11:06. | |
attention now to Brazil - one of the world's biggest emerging | :11:07. | :11:08. | |
economies - it's finally cut its main interest rate by 1% | :11:09. | :11:11. | |
but it's still 11.25%. Here's Daniel Gallas | :11:12. | :11:13. | |
in Sao Paulo with the details. We haven't seen interest rates to | :11:14. | :11:18. | |
this fast in Brazil for almost eight years. Back then it was a completely | :11:19. | :11:26. | |
different country, the B in Brics, one of the fastest-growing countries | :11:27. | :11:29. | |
in the world. Now it is mired in corruption scandals and facing one | :11:30. | :11:32. | |
of its worst recessions in history. So there is this drop in interest | :11:33. | :11:37. | |
rates, does that mean Brazil is back on track and back to the good old | :11:38. | :11:41. | |
days? The answer is probably not, at least not so fast. The interest | :11:42. | :11:46. | |
rates drop is partly because Brazilians are unemployed and they | :11:47. | :11:51. | |
have no purchasing power left, so prices are falling, and that means | :11:52. | :11:54. | |
that interest rates can drop as well. The fundamentals of the | :11:55. | :11:59. | |
Brazilian economy are in bad shape. Growth is supposed to be very modest | :12:00. | :12:02. | |
this year, also the Government has high levels of debt. So economists | :12:03. | :12:07. | |
are watching whether the country will keep cutting it interest rates | :12:08. | :12:12. | |
in the next coming months. That could maybe signal that the country | :12:13. | :12:17. | |
is back on track to a very slow recovery. | :12:18. | :12:21. | |
Joining us is Lawrence Gosling who is editor in chief | :12:22. | :12:23. | |
Plenty there to talk about. Let's talk about some of what Daniel was | :12:24. | :12:30. | |
mentioning there and this cut in interest rates in Brazil. As he | :12:31. | :12:35. | |
mentioned, the Brazilian economy is still heavily indebted, and if you | :12:36. | :12:38. | |
are the central bank in any country, you have two weapons at your | :12:39. | :12:45. | |
disposal, they can't pump money into the economy, so they will steadily | :12:46. | :12:53. | |
use this interest rate weapon tool to try to revive the economy. Let's | :12:54. | :13:00. | |
turn our attention closer to Europe. Everybody keep an eye on what is | :13:01. | :13:05. | |
coming up with the elections. The French election around the corner. | :13:06. | :13:08. | |
Turkey's election this weekend coming, an important one because | :13:09. | :13:13. | |
there is still a state of emergency in Turkey and it is a big economy, | :13:14. | :13:17. | |
so that is important. And then the following weekend, the first round | :13:18. | :13:21. | |
of the French elections, it could be all over in wonder if one of the | :13:22. | :13:26. | |
candidates gets 50% of the vote, not expected, it is very tight. So these | :13:27. | :13:33. | |
other two next key elections. And especially the French election, does | :13:34. | :13:38. | |
that affect European market at all? European equity markets have cooled | :13:39. | :13:41. | |
off a little, and the sovereign bonds of France in particular have | :13:42. | :13:47. | |
eased off a little bit as well. So investors are nervous, albeit most | :13:48. | :13:52. | |
people don't expect Marine Le Pen to end up being elected after the | :13:53. | :13:56. | |
second round. And the Turkey referendum rather than an election. | :13:57. | :14:03. | |
That is the key thing about that. Thank you very much, you will be | :14:04. | :14:06. | |
back to go through the papers with us shortly. | :14:07. | :14:08. | |
The inside track on why one of the UK's biggest high-street chains | :14:09. | :14:16. | |
thinks it has the key to success in China. You are watching Business | :14:17. | :14:21. | |
Live on BBC News. Sainsbury's Argos are opening | :14:22. | :14:26. | |
their 50th digital store today. It's part of plans to | :14:27. | :14:31. | |
transform the retailer after Sainsbury's bought | :14:32. | :14:32. | |
the Home Retail Group in 2016. They're also announcing plans | :14:33. | :14:36. | |
to open ten mini Habitat stores in branches of Sainsbury's - | :14:37. | :14:39. | |
and 90 stores will have Argos John Rogers is the CEO | :14:40. | :14:44. | |
of Argos he joins us now. I'm sure some people will be | :14:45. | :15:00. | |
delighted by this, but are you not potentially putting some people off | :15:01. | :15:04. | |
who are not quite so, double, they love that traditional catalogue? I | :15:05. | :15:09. | |
think it is about giving customers choice. Many of them do love the | :15:10. | :15:13. | |
catalogue, but many of them like to be above the shop in-store in an | :15:14. | :15:17. | |
easy and convenient way through the digital tablet, so it is about | :15:18. | :15:20. | |
providing customers with choice, whether it is home delivery, picking | :15:21. | :15:24. | |
up stuff in the supermarket or indeed going into one of our Argos | :15:25. | :15:29. | |
high-street stores and giving customers that choice to grow sales, | :15:30. | :15:34. | |
giving us a successful six-month sales and a winning market share. | :15:35. | :15:40. | |
One other interesting is, when you look at your rivals, like Amazon, | :15:41. | :15:46. | |
with big warehouses is out of town, if they don't have the same sort of | :15:47. | :15:50. | |
business rate overheads that you inevitably do in stories in towns | :15:51. | :15:55. | |
and city centres, where you concerned by the recent changes? As | :15:56. | :16:08. | |
a business, with, say, Argos, we pay over half ?1 billion in business | :16:09. | :16:11. | |
rate and we would ask the Government to look at reforming the system, and | :16:12. | :16:19. | |
out of date tax clearly focused on property, and with those retailers, | :16:20. | :16:23. | |
in in this digital world, it is becoming less relevant so I think we | :16:24. | :16:27. | |
welcome some of the small changes made to the system and processes are | :16:28. | :16:29. | |
the last 12 months or so but fundamentally we are asking for a | :16:30. | :16:35. | |
major freehold. John, many thanks. John Rogers, Chief Executive of | :16:36. | :16:39. | |
Argos. Don't forget you can find plenty on the Business Live page. | :16:40. | :16:44. | |
Right now, bad news if you're planning to travel over the bank | :16:45. | :16:47. | |
holiday weekend. Virgin's Isco sorry, no, forgive me, it is later | :16:48. | :16:58. | |
in April. Not this weekend. It is later in the month. Just frighten | :16:59. | :17:01. | |
half the country! LAUGHTER | :17:02. | :17:03. | |
Is US burning season kicking off? It kicks off with the big banks over in | :17:04. | :17:19. | |
America and they will tell us how much money have been making -- is US | :17:20. | :17:27. | |
banking season kicking off? A quick look at how | :17:28. | :17:29. | |
markets are faring... This is the start of the trading day | :17:30. | :17:37. | |
in Europe, all down just a shade, very cautious. Now, I want to talk | :17:38. | :17:41. | |
about this... Imagine taking over a family | :17:42. | :17:43. | |
business and then more Timpson was founded | :17:44. | :17:45. | |
in Manchester in 1865 as a shoe store and later expanded | :17:46. | :17:50. | |
into manufacturing and repairs. In 1975 it had 430 stores | :17:51. | :17:53. | |
and a new managing director, with John Timpson taking over | :17:54. | :17:56. | |
the family business. Now the company has | :17:57. | :17:58. | |
almost 1900 stores in the UK and Ireland, | :17:59. | :17:59. | |
and one shop in Beijing. Here to give us the inside | :18:00. | :18:12. | |
track is John Timpson, Welcome to Business Life. Successful | :18:13. | :18:25. | |
business in the UK and Ireland. What tempted you about China? The | :18:26. | :18:29. | |
Chinese! LAUGHTER | :18:30. | :18:37. | |
-- welcome to Business Live. Looking around the world, they wanted a | :18:38. | :18:41. | |
model to copy, they found us, and that is what is happening. Do you | :18:42. | :18:45. | |
think it is the start of more? Not much point just having one. Yes, a | :18:46. | :18:50. | |
silly question. But you have a lot of shoes over there. We have one, | :18:51. | :18:56. | |
there will be more fairly soon. Obviously we have to learn how to do | :18:57. | :19:01. | |
it, we have one or two of our people over there. A long way to go. I'm | :19:02. | :19:06. | |
not getting excited yet, but it is a very interesting new direction for | :19:07. | :19:11. | |
us. Can I ask you this? I know you were watching the interview with | :19:12. | :19:15. | |
John as well from Argos. Their model was very similar... Asking if this | :19:16. | :19:24. | |
is the future, you know, click collect, picking up in supermarkets, | :19:25. | :19:28. | |
and you're opening up a lot of the Timpsons in supermarkets around the | :19:29. | :19:33. | |
UK. Is that the future because it is with the footfall is? We are in | :19:34. | :19:37. | |
pretty much every high street you want to be end, and we are opening | :19:38. | :19:41. | |
lots of shops together with supermarkets, all the big format, | :19:42. | :19:45. | |
particularly Tesco and Sainsbury's. Most of them are little pods in the | :19:46. | :19:50. | |
car parks, near the entrance. You obviously are doing something right | :19:51. | :19:54. | |
with your business, growing and so on. What is interesting is how you | :19:55. | :20:01. | |
draw up your business plans, 15 years in advance? There is this | :20:02. | :20:04. | |
little trick I do every three years as a way of stimulating... You know, | :20:05. | :20:09. | |
we don't have forward planning meetings or anything like that, but | :20:10. | :20:14. | |
I write a chairman's report for 15 years' time. How do you know what is | :20:15. | :20:20. | |
coming up? Of course you don't! But it takes you away from today. | :20:21. | :20:24. | |
Instead of writing a forward plan, most people for word -- people's/ is | :20:25. | :20:32. | |
just from today, and they say the sales will go faster than costs so | :20:33. | :20:35. | |
they make more money, so they can put that to bed and so on, but my | :20:36. | :20:41. | |
forward plan, my annual report for 2032, which I have just written... | :20:42. | :20:44. | |
LAUGHTER It is trying to guess what will | :20:45. | :20:48. | |
happen. Actually, do you know what? The most interesting thing about it | :20:49. | :20:53. | |
is the thing is that absolutely don't change. And the thing that | :20:54. | :20:59. | |
matters most to me is the fact that in 2032 one of the bits of our | :21:00. | :21:04. | |
culture we have to keep, and we will still be making sure we take great | :21:05. | :21:09. | |
people and let them get on with it, what I call upside-down management, | :21:10. | :21:12. | |
it'll still be how we run our business. Which is in your book? | :21:13. | :21:21. | |
Absolutely. We have to wrap it up, but upside-down management... The | :21:22. | :21:26. | |
book is cold Keys To Success and it is 50 different quirky things we do | :21:27. | :21:33. | |
to make a difference, and the way to give great service in shops, part of | :21:34. | :21:37. | |
the secret to our success, we allow the people who sell to our customers | :21:38. | :21:40. | |
to do it how they want, and they do it as long as we pick great people. | :21:41. | :21:49. | |
OK, thank you. Upside-down management. I wonder if we can apply | :21:50. | :21:53. | |
that to presenting? Could do, I don't know! | :21:54. | :21:58. | |
Now, are you happy to have your food delivered... | :21:59. | :22:00. | |
That's the question being asked of take-out food | :22:01. | :22:03. | |
It's the first full scale roll-out of technology that could mean | :22:04. | :22:10. | |
the end of the road for scooter delivery riders. | :22:11. | :22:13. | |
We think the best approach for this kind of system is one where, | :22:14. | :22:40. | |
you know, there's constant human oversight of the robots. | :22:41. | :22:44. | |
The architecture we've chosen is one where a person is capable | :22:45. | :22:47. | |
of controlling one or two robots, and over time it would build | :22:48. | :22:51. | |
into more and more autonomous operation so that there is one | :22:52. | :22:59. | |
person then controlling five, and then ten and so on, so effectively | :23:00. | :23:02. | |
multiplying the ability of a given person to do more work | :23:03. | :23:04. | |
over the set of robots that they're overseeing. | :23:05. | :23:53. | |
What other business stories has the media been | :23:54. | :23:55. | |
Laurence Gosling is joining us again to discuss. | :23:56. | :24:01. | |
Burger King, new TV at, designed to interact with your device, and | :24:02. | :24:10. | |
Google don't seem to like it? No, because it was only running for | :24:11. | :24:14. | |
three hours and they disallowed the software that allowed this app to | :24:15. | :24:19. | |
pop up on your phone or Google bomb device. Saw the commercial on the TV | :24:20. | :24:26. | |
use the trigger words to activate -- Google device. The yes, it would | :24:27. | :24:32. | |
tell you where to get it, pay it back, so it is kind of stealth | :24:33. | :24:35. | |
marketing and I am sure somebody thought it was a clever idea. I'm | :24:36. | :24:40. | |
sure it got a bit of coverage. We asked whether people like the idea | :24:41. | :24:44. | |
or if it was too invasive. The two best responses - advertising just | :24:45. | :24:53. | |
needs to be targeted. Tom says simply for something I want to own | :24:54. | :24:56. | |
or desire, and those things don't matter to me. Look at this picture. | :24:57. | :25:05. | |
What is going on with Swiss chocolate and appLindt? They are | :25:06. | :25:08. | |
suffering because we all are getting more healthy -- what is going on | :25:09. | :25:17. | |
with Lindt? But the cost is going up because of the cocoa beans... Yes, | :25:18. | :25:21. | |
clearly this with cannot draw their own Kauko. The other thing, | :25:22. | :25:25. | |
interestingly enough... Why not? They are very good at Cowes for the | :25:26. | :25:32. | |
milk, but... You know, this is a luxury item. It is expensive and | :25:33. | :25:36. | |
that is how they position themselves. It is Easter now so we | :25:37. | :25:41. | |
will all go and buy some chocolate and we will just buy the cheapest | :25:42. | :25:44. | |
chocolate and consume it quickly. But what about the chocolate? It is | :25:45. | :25:50. | |
higher quality because it is only manufactured to be on the shelves | :25:51. | :25:54. | |
for short time so can eat it and it is not quite as unhealthy for you. | :25:55. | :25:59. | |
Ah! OK, see you soon. Happy Easter. | :26:00. | :26:03. |