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This is Business Live from BBC News with Susannah Streeter
The Americans may be marking Independence Day today,
but does the world's biggest economy have much to celebrate
now that the CEO president is in charge?
Live from London, that's our top story on Tuesday 4th July.
As global leaders prepare to meet later this week as part of the G20,
today we're going to look at whether Donald Trump's
policies are a step forward for the world's biggest economy.
Also in the programme, The billionaire co-founder
of struggling Chinese technology giant LeEco has had
We're live in our Asia business hub with the details.
And we've got the latest from the markets.
And get comfortable, because we'll be getting
It's the product you've probably never heard of that luxury brands
And as the American owner of Shredded Wheat completed
we want to know, what do you love to eat for breakfast?
It's the 4th of July and while Americans will be
taking the day off to mark Independence Day,
the Republicans and Democrats will have differing views
on whether the state of the country's economy gives
The self-styled CEO President wants America to grow by 3% a year -
With growth currently at just 1.6%, how exactly does
Central to his plan is the renegotiation of US trade deals.
The Trump administration now says that it plans
to start talks over the North America Free
Trade Agreement "as soon as practicable".
Similarly, the President has pulled out
of a global climate agreement, saying
he will not be part of a deal that disadvantages US
Mr Trump is also trying to push through a new healthcare deal
which is estimated to bring federal deficits down by $119bn -
but crucially would also leave 23 million people without health
So could these and other aggressive policies give
They have now downgraded growth forecasts to 2.1%.
Emeritus Professor of Gresham College and Chairman
Let's start with that 3% that Donald Trump is aiming for. Can he do it?
It doesn't look likely. Business confidence remains resilient, but
they are still praying for lower taxes and lower regulation. But the
US is a consumer driven economy and consumer confidence remains in the
doldrums. Politics is part of the problem. President Trump was sworn
in on the 20th of January, so it has been five and a half months. His
campaign was very forthright and emotional. He has a majority in the
House. You would think that by now, he should have achieved a lot. What
is your perception of the situation? The striking thing about the Trump
presidency from a policy perspective is the absence of policy. He rode
this populist wave that he could solve America's problems with a few
big solutions, simple solutions that only he was able to do because he
wasn't going to pander to vested interests or the politically
correct. And the absence of anything that has changed anything is a
problem for consumers. He has also been waged by this health care bill.
Failed to get it through the first time. In the meantime, his plans to
tax cuts which would help reinvigorate the economy for
corporate America have been pushed into the long grass. There are two
problems. One is his inability to get things done. Secondly, what he's
trying to get done is not clear. It is not clear that the health care
plan will be good for the economy. The US has a productivity problem
and good health care and good education are important for web
activity. -- for productivity. We have seen a boom from President
Trump's election, but it was deregulation that markets were
looking for that has not happened yet. Well, in the election campaign
we had this delusion that by cutting taxes, somehow the tax revenues
would grow larger because they have incentivised the economy so much. We
have lots of evidence to say that is not the case. The debts are still
quite big. So he is not going to get through a big public spending
campaign through Congress. So he wants 3%. The IMF said it will be
2.1. It will be between 1.5 and 2%. Thank you, Avinash Persaud.
Let's take a look at some of the other stories making the news.
Energy-rich Qatar said on Tuesday it plans to increase natural gas
production by 30% over the next several years, as it faces
pressure from its neighbours in a diplomatic crisis.
A system failure at the Nasdaq stock exchange has caused the share price
of some of the world's biggest companies to be set
This caused Amazon's market value to fall by over 87%,
while Microsoft's share price soared by 79%.
Nasdaq says the glitch was caused by improper use of testing data.
Australia's central bank has kept its benchmark cash rate at 1.5%
The decision by the Reserve Bank of Australia was widely expected
after recent concerns about financial stability.
Chinese technology giant LeEco - that had hoped to topple Tesla -
has had its assets frozen in a row over an unpaid loan.
What more can you tell us? The company might not be a household
name outside China, but it's an exciting company that was known as
the Netflix of China. Then as you mention, they started drawing
comparisons with the likes of Apple and Tesla when it started branching
out into hardware like smart TV, smartphones and even electric cars.
But just after it started selling devices in the US last year, the
company's cash crunch also started to get attention. Today, assets of
the company's chairman and his wife and three affiliates worth over $180
million have been frozen by a court. The ruling comes after a company
failed to pay interest that was due on bank loans taken out to fund its
smartphone business. The chairman has admitted previously to
shareholders that the financial problems were more severe than
expected. He has not commented on today's latest developments, but it
goes to show how expensive all those new innovations are. Thank you.
Let's look at the financial markets now.
Asian shares turned lower as earlier gains were quashed by tensions
on the Korean peninsula after North Korea fired a missile
A system failure at the Nasdaq stock exchange caused the share price
of some of the world's biggest companies to be set
This caused Amazon's market value to fall by over 87%.
Nasdaq says the glitch was caused by improper use of testing data
and no trades were completed at those prices.
Let's take a look at what's happening in Europe -
there were expectations that Britain's FTSE 100 and Germany's DAX
Joining me is Jane Sydenham, Investment Director,
Let me start with the Nasdaq, that great story. It feels like we are
hearing more stories of fat fingered trades or glitches in the system. Is
it something traders now need to take into consideration? I think it
is, because so much trade is automated and high-speed. So the
technology is important and traders need to be aware that not everything
works perfectly all the time. It is interesting that it is the tech
stocks that have been hit. There is growing unease about technology
stocks in general. It seems that their financial stocks have gone
through torrid times and now the focus is back on tech, do you think
it could be the end of a bubble that we have seen? One of the reasons
technology stocks have done so well is that they are genuinely growing
companies in what has been a relatively low growth environment.
But because it feels as though interest rates are starting to rise
and economies are strong enough to withstand a bit of an increase in
rates, in that environment where banks have been so undervalued for
so long and some people would say they look quite cheap and tech
stocks look expensive, there is a bit of a transition going on. People
are beginning to say, maybe I should dip my toe back into the financial
sector. And do you think with all these regulatory decisions made on
the tech stocks, like the Google decision made by the European
Commission, that big find that it was hit by, do you think that will
have an impact going forward? It may. If we look at what happened to
Microsoft, that was quite a point for them. It is too early to say if
that will be a transition, but it's possible. It is all about news flow.
If we see lots of positive news for sectors, that will support share
prices. If the news becomes negative, the opposite is true.
Let's talk about oil. It has had a good run. Yes, the best run for five
years in terms of eight successive days of rises as a result of
reduction in the rig count of American shale oil and gas, which
now seems to be the thing that oil traders are watching, rather than
the pricing via Opec. It is interesting how quickly they can
ramp up production and an ease off the pedal when the oil price doesn't
look so attractive. Absolutely. It is amazing how technology has made a
difference in that industry both in terms of bringing the costs of
production down, but also the sensitivity to turn off the supply
tap, which used to be a hard thing to do. We were talking about the
American owner of shredded wheat dying Weetabix. What is your
favourite breakfast? I am a measly girl, sorry! -- I am a muesli girl.
Still to come, the luxury product you've probably never heard of.
We're going to be talking about Alcantara and its use
in everything from supercars to private jets.
You're with Business Live from BBC News.
British chip company Imagination Technologies has
announced a 19% increase in revenues.
But the results are overshadowed by its continuing dispute
with its biggest customer, Apple, who announced
in April that they are stopping using the chips?
Theo Leggett is in our business newsroom.
It's been a tough year for the company, hasn't it?
Absolutely, and the answer to your question is yes. Look at the share
price. This was where it was in March before Apple said it wasn't
going to be using Imagination's intellectual property and its
designs for chips any more. And here is what happened to the share price
afterwards. It has not recovered. Nipped up a bit over the past few
days because there is talk of the company being sold. But this is a
major dispute. Imagination provides the design for chips used in things
like iPhones, iPads, Apple TV 's and watches. It provides a good stream
of revenue through royalty payments. And if Apple stubs using those
designs, that royalty stream also stops that provides problems for the
company. It provides a great deal of uncertainty. Who might want to buy
Imagination Technologies? There are plenty of names in the frame. Apple
is one of them. It owns an 8% stake at the moment. There is talk of a
Chinese company potentially being interested, and Intel as well.
Although it has problems, Imagination has been talked about
for years as one of the UK's leaders in technology and it does still have
useful intellectual property. Thank you.
Sainsbury's is up 2.3%. Their chief executive says the market is
competitive. Big supermarket chains are finding
life to be tough. Could there be another round of takeovers?
Sainsbury's is apparently in talks to buy Imagination Technologies a
wholesaler and Nisa. The drive for cheaper groceries. The discount is
also performing pretty well. Interesting Sainsbury's is not doing
too badly either. A quick look at how
markets are faring.... Look at how they have opened in
Europe. A bit of a sea of red following on from falls in Asia. The
FTSE 100 currently down. Asia falls took place after an uplift earlier
in the session following the news that North Korea have fired a
missile into the waters off Japan. And now let's get the inside track
on a type of material that you may but you may have sat
on it, or even worn it! Alcantara is a synthetic
suede-like material, One of its main selling
points is its durability, alongside its similarity
to real suede. If you're lucky enough to own
a Lamborghini, Porsche, yacht, or even a private jet,
you'll probably have come across their product which is used
as an interior trim. Alcantara is protected by several
patents and is produced by its Italian parent company,
also called Alcantara. Joining us is Andrea Boragno,
chief executive officer Thank you for joining us in the
studio. My pleasure. Let us talk about the product, the type of
material... Very innovative. As a result of proprietary technology.
Very versatile. It can be resented in countless different ways. We
started in the fashion industry, in the 70s, Versace and other important
fashion designers using Alcantara, then we moved into interiors and
then the automotive industry. Nowadays, because of the versatility
of the material and because of the properties of being presented or in
countless different ways, we are expanding more and more in many
business sectors. The last one where we are growing significantly is
consumer electronics and especially information technology.
Headphones... In the earpads, we have glasses here. It is carbon
neutral as well? Your production process? The first Italian company
to be carbon neutral and we have a strong commitment on sustainability
and we believe this trend will grow and grow. And talking about growing
trends, we are positioning the brand at the intersection of
high-performance technology and emotions. The emotion of beauty,
something related to design something related to fashion and
even to art. Which is why you have been at the Festival Of Speed.
Exactly. We are very pleased about this participation with the London
design Festival in partnership with... We wanted to put together
the best of the UK design together with Italian excellence. For several
years, we have had a very intensive and fruitful relationship with the
world of design, of creative people, and even artists, it is a relation
of give and take. For designers, Alcantara becomes the means by which
they express their creativity and very often, Alcantara becomes the
integrating part of the creative process and as they return, we have
a lot of ideas. So important it became an integrated part of the
business. The business proposition, in Italy, do you think that is the
right way to go to luxury products to revitalise the economy? It is a
global trend, not only in Italy. It is an advantage to some extent
compared to other countries. We believe and we have been practising
the positioning of the brand at the intersection between technology and
emotion. We think there is a growing trend of this. And the market once
exclusivity and top quality is not enough -- and the market wants
exclusivity. For me, top quality is boring. You need luxury and emotion.
The motion and luxury. That is what the market wants. We need breakfast.
Thank you. Let's talk about gender equality
because a new report from the Wharton Business School
says venture capitalists who provide funding for start-ups
have an inbuilt bias From New York,
Samira Hussain reports. It is loud, dark and it is popular
with women. That popularity has propelled this brand of stationary
cycling from a single studio to a national phenomenon and soon it will
debut on the public stock exchange. But does its dependence on women
speak to the wider trend of women starting female focused companies? I
believe ultimately what investors are looking for businesses with
sound fundamentals, have you proven you are able to consistently grow
your business and are you making returns on your capital? Studies
have shown women are more reluctant to get into business. And a good inn
is solving a problem you face personally. That was how the camp
and alternative was born. -- tampon. I was terrified of becoming an
entrepreneur. The chance of success is slim to none but I was facing a
deep personal problem and I knew I had to solve it. But if female
entrepreneurs only focus on solving their own problems, or catering to
women, they risk reinforcing the same stereotypes that have plagued
women in business for years. The stereotypes and preconceptions about
what men and women are good at and the traits they possess more
exaggerated than reality. I think in most businesses, in reality, men and
women are relatively create likely to have the traits needed to be
successful but it is the perception. Less than 5% of Fortune 500
companies have female CEOs and while more women than ever are starting
businesses, it is still far less than men. If the economy is ever
going to receive the full benefits of gender equality, everyone will
need to rethink what businesses women can succeed in. Time to look
to see what other stories have been making the news today. Dominic
O'Connell joins us. Starting with the story in the Financial Times
come UK ministers calling for post-Brexit cooperation with the EU.
Quite an extraordinary story. When was the last time you can recall two
Cabinet ministers writing an open letter to the Financial Times that
was not a response to anything, lead letter, it is all about the
relationship between Britain and Europe when it comes to approving
drugs? They are saying, giving assurances the drug companies, big
industry in Britain, worth about ?60 billion a year to the UK, assurances
the old way of approving medicines, done in collaboration with European
regulatory authorities, it will not be damaged by Brexit talks. How can
they say this? The ECJ, the European courts, they are part of the whole
regulatory apparatus and one of the points of Brexit is we do not want
European courts to have any say in European chilly UK affairs. If we
did go down that road, the UK might become yet another international
market and not part of the centre of the drugs world and it is a careful
line. This will appeal to those after a hard Brexit, blue --
complete absence of control of the ECJ? It talks about prioritising
patients and the best possible way of approving medicines without
saying, yes, we will still be in Europe when it comes to approving
drugs. If you make that concession, the European regulators will still
hold sway over the pharmaceutical industry, in the car industry, the
aerospace industry, the City of London, they will say, why can't we
have that too? It is a very tricky can of worms, if I can mix in
metaphor. A can of worms, that is not what you want for breakfast.
What did you have? Porridge. I had porridge at 2am. You are virtuous. I
had a piece of Victoria sandwich sponge cake. A sneaky slice. A story
in the Times about an American company which has just bought
Weetibix. Amanda says on Twitter, a full English, would be her favourite
breakfast, but the reality is porridge. Nothing beats a sausage
sandwich! It is either Victoria sponge or a bacon Sahni! The reason
the Americans are buying it because the Chinese bought Weetibix thinking
the Chinese diet would change to more Western-style processed
carbohydrates like Weetibix but it did not work. The Chinese company
has sold it to the Americans who of course have tastes which are much
more in line with British tastes, eating breakfast there are real. The
Chinese have proved quite stubborn, they have not adopted Weetibix, as
they thought they would do. Is this any more concern in terms of
takeovers for the UK? It already was in Chinese hands, it had fallen to
foreign companies already and given we have sold our ports, airports,
power companies, we not that bothered about a breakfast is a real
maker! This is a picture of a viewer's breakfast cereal. Oh, dear!
They have obviously got a hard day coming up. Or they have been on a
night shift. Anyway... I think it has to go to porridge. It seems as
Weetibix. Interestingly, some Weetibix. Interestingly, some
Weetibix was impounded in New Zealand. Slip of the time, I grew up
in New Zealand and I said Weetbix. Weetibix was impounded, brought in
by British rugby supporter. We will have to leave it there. Bye-bye.
Good morning. A North- south split in the weather over the next couple
of days. Northern areas, it will be quite cool at times. But it is going
to turn much