:00:07. > :00:09.This is Business Live from BBC News with Rachel Horne and Alice Baxter.
:00:10. > :00:16.Amazon founder Jeff Bezos briefly becomes the world's richest person.
:00:17. > :00:19.But Wall Street nerves about the company's massive spending
:00:20. > :00:49.Live from London, that's our top story on Friday the 28th of July.
:00:50. > :00:51.Sales at Amazon rise - but profits plunge -
:00:52. > :00:53.as the e-commerce giant spends big on expansion overseas.
:00:54. > :00:58.Will the latest figures on the US economy bring President Trump
:00:59. > :01:12.In Europe things getting off to a muted start.
:01:13. > :01:14.And chlorinated chickens, the electric Mini and tech titans -
:01:15. > :01:17.we'll be looking at what's been a busy week in
:01:18. > :01:22.Today we want to know does great wealth bring great responsibility?
:01:23. > :01:26.Yesterday Amazon founder Jeff Bezos was, briefly,
:01:27. > :01:30.the richest person in the world - what would you do if it was you?
:01:31. > :01:42.We start with retail giant Amazon - it has seen its shares fall sharply
:01:43. > :01:52.after its latest figures disappointed Wall Street.
:01:53. > :01:55.The good news - it is raking in huge sums of money
:01:56. > :02:00.The bad news - it's spending a fortune on developing its business -
:02:01. > :02:01.and that is making investors nervous.
:02:02. > :02:08.Total sales in the three months to June jumped almost a quarter
:02:09. > :02:13.compared to last year - to just under $38 billion.
:02:14. > :02:16.Unfortunately - they spent almost all of it!
:02:17. > :02:19.Operating expenses surged to well over $37 billion.
:02:20. > :02:28.That means there wasn't much actual profit -
:02:29. > :02:31.a comparatively measly $197 million - and down
:02:32. > :02:35.Amazon is investing massively in everything from TV
:02:36. > :02:37.and movie content - to new warehouses for the global
:02:38. > :02:48.Like this - the deal it announced last month to buy
:02:49. > :02:50.the supermarket chain Whole Foods for over $13 billion.
:02:51. > :02:53.Amazon has been putting increasing pressure on bricks and mortars
:02:54. > :02:57.Optimism about the company's future has helped to push up
:02:58. > :03:02.Since January Amazon shares have risen by more
:03:03. > :03:05.than 40% to a new record - making the company worth
:03:06. > :03:10.Which has proved very lucrative for this person -
:03:11. > :03:13.the firm's founder - Jeff Bezos.
:03:14. > :03:16.On Thursday, he became the richest person in the world -
:03:17. > :03:23.As the share price has come down again, he has dropped
:03:24. > :03:42.Joining me now is Ben Preston. Amazon don't tend to go for big
:03:43. > :03:48.profits, so why were Wall Street disappointed this time? Well, the
:03:49. > :03:53.shares are indicating they will be down a little today. In the context
:03:54. > :03:57.today I think they're still likely to be satisfied with these results.
:03:58. > :04:01.It's the same old Amazon in lots of ways. The amount they sell gets
:04:02. > :04:04.larger but they don't let those profits fall to the bottom line.
:04:05. > :04:15.They prefer to reinvest into the future. It's a formula that's worked
:04:16. > :04:19.well for them. Building an empire is understating it, he is going global,
:04:20. > :04:23.seems to be getting into every aspect of our lives, TV investment,
:04:24. > :04:27.original content, where do you think they're going to go next? That's
:04:28. > :04:30.right t all started with the smartphone which has redefined the
:04:31. > :04:34.way we live a lot of our lives. We connect with people in different
:04:35. > :04:37.ways. We take public transport in different ways and we shop and pay
:04:38. > :04:43.for things now in different ways. The next thing perhaps is the living
:04:44. > :04:49.room, they've been successful with the Amazon echo device, and he is
:04:50. > :04:53.hoping that will force more of us to engage with Amazon and become prime
:04:54. > :04:57.subscribers. Of course also supermarkets, we mentioned the
:04:58. > :05:01.acquisition of Whole Foods and also they're moving into Cloud services,
:05:02. > :05:04.data storage which is proving incredibly profitable already.
:05:05. > :05:10.That's been a very successful story for them. It's a newer business for
:05:11. > :05:17.them than retail but it's been more profitable. It continues to grow
:05:18. > :05:25.rapidly. How do you compare Amazon to other big tech companies,
:05:26. > :05:30.Facebook, Apple, results from Facebook and from Alphabet already
:05:31. > :05:34.this week, it is a very different business, but they do tend to get
:05:35. > :05:38.grouped together. It's amazing how quickly those companies have
:05:39. > :05:42.continued to grow. The share prices this year have reflected that with
:05:43. > :05:45.strong performances. Amazon is slightly different in that the other
:05:46. > :05:48.companies tend to make a greater share of profits today, whereas
:05:49. > :05:52.Amazon insists on reinvesting that for the future. As a group they've
:05:53. > :05:56.all done fantastically well. Our job as investors is to try to judge how
:05:57. > :06:00.much of that future growth is priced into the shares today and make the
:06:01. > :06:05.investment decision accordingly. Ben Preston, thank you very much.
:06:06. > :06:13.Op other stories making the news. The IT failure at British Airways
:06:14. > :06:16.in May that left thousands unable That's according to
:06:17. > :06:19.the airline's owner IAG. About 75,000 passengers faced severe
:06:20. > :06:21.disruption when BA's system failed over the second Bank Holiday
:06:22. > :06:30.weekend in May. BA said it was caused by an engineer
:06:31. > :06:33.who disconnected a power supply. Air France-KLM is buying almost
:06:34. > :06:36.a third of Virgin Atlantic, leaving Sir Richard Branson's parent
:06:37. > :06:38.company, Virgin Group, with a minority stake
:06:39. > :06:44.in the airline he founded. Sir Richard said he would remain
:06:45. > :06:49."very much involved" after the deal. Germany's transport minister has
:06:50. > :06:51.announced a recall of 22,000 Porsche cars to remove what he says
:06:52. > :06:54.is illegal He said that luxury make Porsche
:06:55. > :07:04.would bear the cost of the recalls of the affected 3-litre diesel
:07:05. > :07:13.Cayenne models. We have had figures through from
:07:14. > :07:16.Barclays, millions of customers around the world, they've seen a
:07:17. > :07:22.jump in half-year profits but will have to pay out an extra ?700
:07:23. > :07:25.million to meet compensation claims for mis-selling payment protection
:07:26. > :07:37.insurance, that's PPI. Barclays shares up over 1% on the
:07:38. > :07:40.London markets this morning. Lloyds also having to put aside additional
:07:41. > :07:48.money for claims, as well. Let's cross over to Asia now.
:07:49. > :07:52.Let's go to Asia, where coffee giant Starbucks is splashing out in China.
:07:53. > :07:55.It is buying out its Eastern Chinese partners, spending $1.3 billion
:07:56. > :07:58.on the 50% of the business it doesn't already own.
:07:59. > :08:00.It's the biggest deal Starbucks has ever done.
:08:01. > :08:11.Chase the reaction to this given it's the biggest deal the chain has
:08:12. > :08:17.ever done? Yes, it goes to show how important China has become for the
:08:18. > :08:20.coffee chain, it is in fact the fastest growing market outside the
:08:21. > :08:27.United States. Especially with the number of stores. As you mentioned,
:08:28. > :08:33.they already own 1500 outlets fully but spending 1. 3 billion to buy the
:08:34. > :08:40.rest, 50% stake in 1300 other stores. The goal is to own 5,000
:08:41. > :08:46.stores in mainland China by 2021. But the announcement came just as
:08:47. > :08:49.the company announced a fall in income for the three months to July
:08:50. > :08:53.because its growth in the United States has been somewhat slowing
:08:54. > :08:58.down. So I guess this big announcement in China going to prove
:08:59. > :09:02.to investors how important China is and how it's going to grow even more
:09:03. > :09:10.in the Chinese market. Thanks. Let's stay in the region.
:09:11. > :09:14.Asian stock markets sagged on Friday -
:09:15. > :09:16.that's after US tech shares retreated from recent rallies.
:09:17. > :09:19.In Tokyo, the Nikkei closed lower as the market was dragged down
:09:20. > :09:21.by some disappointing earnings reports and that fall
:09:22. > :09:26.Across the pond, the tech-heavy Nasdaq's streak of all-time high
:09:27. > :09:31.closes ended Thursday with Apple, Google-parent Alphabet and Netflix
:09:32. > :09:37.One bright spot though over in China - with stocks ended higher
:09:38. > :09:40.on with the Shanghai benchmark index recording the sixth consecutive
:09:41. > :09:49.week of gains, bolstered by recent solid economic data.
:09:50. > :09:56.Shares in Europe ending on a muted note.
:09:57. > :09:59.In a few hours, the United States will announce second-quarter
:10:00. > :10:00.Gross Domestic Product numbers, while consumer spending,
:10:01. > :10:03.manufacturing and service-sector data are due next week.
:10:04. > :10:09.Smaira has more now on what's ahead on Wall Street Today.
:10:10. > :10:17.On Friday we get the latest growth figures for the economy. The GDP is
:10:18. > :10:21.expected to have gone up to 2. 6% for the last three months of this
:10:22. > :10:26.year. That would be a big improvement on the previous
:10:27. > :10:33.quarter's GDP, which came in at just 1. 4%. As a candidate for President,
:10:34. > :10:43.Donald Trump campaigned on bringing the GDP to 4-5%. Sips then. Since
:10:44. > :10:50.then they have tempered anticipation. Among companies
:10:51. > :10:56.reporting on Friday is the world's largest publicly traded oil
:10:57. > :11:01.producer, Baker Hughes, the second largest oil fields services
:11:02. > :11:04.provider. Goodyear and American airlines.
:11:05. > :11:06.Joining us is James Bevan, Chief Investment Officer at CCLA
:11:07. > :11:16.Thank you for coming in. Let's pick up talking about US GDP. We had that
:11:17. > :11:21.1. 4% figure for the first three months. President Trump and his
:11:22. > :11:26.advisors hoping for 3% for the second three months of the year. We
:11:27. > :11:29.have had strong data, some strong corporate earnings out, do you think
:11:30. > :11:33.they might do it? Absolutely not. It's great to hope but that is not a
:11:34. > :11:36.number that I can get to. I think if you stretch all the numbers and say
:11:37. > :11:40.let's be optimistic, you could say we get to 2. 9 but actually if you
:11:41. > :11:46.think about the lower case numbers we have also seen, could be as low
:11:47. > :11:50.as 2. 2 but I don't think we are going to see three. The run rate for
:11:51. > :11:59.the US economy is much lower and I think this is going to be a year
:12:00. > :12:03.that looks like 2014, 2015, 2016, no real change, bad luck, Mr Trump.
:12:04. > :12:09.Some analysts saying that number was achievable at the height of the tech
:12:10. > :12:13.bubble. Absolutely, the one - I think probably thought to himself I
:12:14. > :12:18.don't want to asroi the boss and say it's going to go back to where it
:12:19. > :12:22.came from, I am going to have to pitch a number less than the promise
:12:23. > :12:26.made but I guess that's where it came from. I can't get that number
:12:27. > :12:29.myself in terms of the lead indicators and if you look at the
:12:30. > :12:32.structural content of the US economy it doesn't have the capacity to
:12:33. > :12:36.drive that growth right now. What would the US need to do to achieve
:12:37. > :12:40.that number? Invest heavily, it could be a greater output, more
:12:41. > :12:44.productivity improvements. At the moment we have a challenge in that
:12:45. > :12:49.there is not enough investment, companies have been using cash to
:12:50. > :12:55.buy back their own shares. That's great if you are a chief executive,
:12:56. > :12:58.you keep earnings roughly where they are and everything is fine. However
:12:59. > :13:03.in terms of building a bigger economy they have to be investing in
:13:04. > :13:09.plant and machinery, that's not happening. Thank you. You are going
:13:10. > :13:11.to take us through the business papers later.
:13:12. > :13:18.We will look at a busy week in the world of business.
:13:19. > :13:28.You're with Business Live from BBC News.
:13:29. > :13:30.Barclays has reported a heavy loss in the second quarter,
:13:31. > :13:34.hit by the one-off costs of a big disposal in Africa and a further
:13:35. > :13:35.knock from mis-selling payment protection
:13:36. > :13:40.Theo Leggett joins us from the Business Newsroom with more.
:13:41. > :13:50.They're pretty significant but you have to move away a little bit from
:13:51. > :13:54.that headline figure, if you look at the day-to-day operations of the
:13:55. > :14:00.bank and operating profit, and that was ?2. 3 billion, that's up from ?2
:14:01. > :14:04.billion last year, an increase of about 13%, not bad but less than
:14:05. > :14:09.analysts were expecting. Operating costs have gone up quite a bit.
:14:10. > :14:13.There are a lot of reasons for that. One of them being increased security
:14:14. > :14:18.to protect against cyber attack. But of course those headline figures
:14:19. > :14:23.will be dominating and the story of the bank's restructuring is also a
:14:24. > :14:28.big story today. That is where the Africa business comes in. Barclays
:14:29. > :14:34.has had to write off a significant amount of money, it lost ?1. 4
:14:35. > :14:40.billion on the sale of a 33% stake in Barclays Africa group and it also
:14:41. > :14:44.lost another billion on the value of its remaining 15% stake but this
:14:45. > :14:49.kind of brings to an end the process the chief executive had implemented
:14:50. > :14:54.of trying to narrow Barclays focus, focus and zoom in on core businesses
:14:55. > :14:57.and increase profitable. He says that process is at an end and
:14:58. > :15:03.shareholders are going to start to benefit. Barclays has announced it's
:15:04. > :15:08.to pay out more for the mis-selling payment protection insurance to UK
:15:09. > :15:14.customers. It has, this goes on and on. It is going to pay out another
:15:15. > :15:18.?700 million or at least provide another ?700 million against future
:15:19. > :15:24.claims. Barclays had already set aside more than ?9 billion for this
:15:25. > :15:29.kind of thing, it has used ?7 billion of it, so still ?2 billion
:15:30. > :15:33.in the Kitty. The pace of claims has been accelerating, it's up since the
:15:34. > :15:37.same period last year so it is setting aside another ?700 million
:15:38. > :15:41.to make sure there is enough in the cupboard to meet future claims which
:15:42. > :15:44.it expects will go up. Incidentally, Barclays isn't the only bank doing
:15:45. > :15:48.this. Yesterday we had Lloyds saying much the same thing, also setting
:15:49. > :15:49.aside a further ?700 million against PPI claims.
:15:50. > :15:59.Thank you. Check out the tablet to all the
:16:00. > :16:19.latest headlines. Sales at Amazon rose in the three
:16:20. > :16:28.months to June but profits plunged as the company invested in global
:16:29. > :16:35.expansion. The boss briefly became the world's chip man but went back
:16:36. > :16:38.to second place. -- richest man. A quick look at how
:16:39. > :16:43.markets are faring. And now let's get the inside
:16:44. > :16:59.track on the other big Philip Hammond has told business
:17:00. > :17:04.leaders he wants companies to have full access to the single market and
:17:05. > :17:09.Customs union for two years after Brexit. The Chancellor of fixture
:17:10. > :17:13.has been talking to the BBC and emphasise the importance of the
:17:14. > :17:18.transition day. My view on transition is well known. I believe
:17:19. > :17:22.it will be in the interests of Britain and the EU if, after we
:17:23. > :17:29.leave the European Union and the single market, and the customs
:17:30. > :17:37.union, on 29th of March, 2019, there is then a period, call it
:17:38. > :17:39.transitional interim period, during which we will allow our economies to
:17:40. > :17:44.adjust to the new situation rather than having a cliff edge in March,
:17:45. > :17:52.2019, which will cause immense disruption to businesses and
:17:53. > :17:58.citizens. How significant is this? It is quite a move. There has been a
:17:59. > :18:04.two stage process in the past was that you get March and then you have
:18:05. > :18:10.a transitional period. Then the next period, the full deal you do
:18:11. > :18:13.overtime. What he is saying is, on the day after the 29th of March,
:18:14. > :18:20.everything stays pretty much the same. If you were going through the
:18:21. > :18:25.borders he would not notice. You stay in the single market and the
:18:26. > :18:30.customs union. He is saying you come out of those you behave as if it has
:18:31. > :18:34.not happened. Some people say it looks like a duck and it sounds like
:18:35. > :18:41.a duck, it is still a duck. What you don't want our hold-up at the port.
:18:42. > :18:48.He said this is the easiest way he was saying this morning to the BBC
:18:49. > :18:56.he has indicated he thinks he has Cabinet support for this. There have
:18:57. > :18:58.been split between Liam Fox, Boris Johnson, David Davis, the minister
:18:59. > :19:04.responsible for getting us out of the European Union. They have always
:19:05. > :19:09.been a bit reluctant. It looks as if he is beginning to win the argument
:19:10. > :19:13.with the help of business leaders. Is this his version of the
:19:14. > :19:20.transition deal? This is his deal. In a way you would not notice what
:19:21. > :19:26.has changed. The fact he has managed to win over... If he has managed to
:19:27. > :19:31.unite the Entire Cabinet behind his version of a Brexit deal, this is a
:19:32. > :19:41.real achievement for him. Liam Fox is in Washington and to reason me is
:19:42. > :19:48.out of the country. -- chorizo me. It looks like business leaders are
:19:49. > :19:55.feeling a bit more relieved that the least disruptive path is the one the
:19:56. > :19:58.Chancellor wants to find. When it comes to negotiating post-Brexit
:19:59. > :20:04.trade deals, you have mentioned things like chlorinated chicken, all
:20:05. > :20:12.of which we have highlighted in how compensated all of this will be. The
:20:13. > :20:20.chlorinated chicken and the hGH powers, this has shown how difficult
:20:21. > :20:23.it is to do. -- cows. Sometimes it is Corine and sometimes something
:20:24. > :20:33.else that you do not get all the problems you can. -- chlorine. There
:20:34. > :20:38.will be some harsh truths. What I would point out is we already export
:20:39. > :20:44.25% of all about goods and services to the US. This is not the trade
:20:45. > :20:50.relationship which is broken. It does work pretty well. There will be
:20:51. > :20:54.trade off. If we want to export our beef, will we have to take their
:20:55. > :20:59.chicken? 40 years worth of relationship with the EU which has
:21:00. > :21:05.the own standards which we have been beholden to, it will be very
:21:06. > :21:12.difficult. When you say we can get a trade deal done, I am sceptical.
:21:13. > :21:17.Let's talk about Amazon. It is now worth half $1 trillion. What is your
:21:18. > :21:25.reaction? Everybody says their shares went down to is that this is
:21:26. > :21:31.part for the course for Amazon. -- their shares went down as well.
:21:32. > :21:37.Amazon has been able to say quick you just wait for your money. I will
:21:38. > :21:40.reinvest. When they have made a profit, in the first ten or 20
:21:41. > :21:47.years, they have sunk everything back in. Now it is coming at us as a
:21:48. > :21:52.company from all sides. I expect the boss will not have to wait very long
:21:53. > :21:55.before he is the richest man in the world again.
:21:56. > :21:58.Now, it hasn't been the easiest of summers for British Airways.
:21:59. > :22:00.You'll probably remember the chaos at Heathrow back in May
:22:01. > :22:03.when thousands of people were stranded because of a big
:22:04. > :22:07.They've also had several walkouts from cabin crew staff over pay.
:22:08. > :22:15.But this morning, the company that owns them -
:22:16. > :22:25.IAG or International Airlines Group - has said it made a profit
:22:26. > :22:31.of around a billion dollars in the first half of the year.
:22:32. > :22:35.The problem was caused by disconnection of power and the
:22:36. > :22:40.unauthorised and reapplication of the power which caused a power surge
:22:41. > :22:44.and damaged the physical infrastructure of the data centre.
:22:45. > :22:49.We have addressed the issue. We clearly apologise to all our
:22:50. > :22:53.customers who were disrupted. The results we have released today show
:22:54. > :22:57.the underlying performance of the airline is excellent. Passenger
:22:58. > :23:02.numbers continue to grow well in excess of the capacity we are
:23:03. > :23:07.adding. The airline has strengthened its financial performance and its
:23:08. > :23:11.competitive performance. The airline has taken a hit. We have also seen
:23:12. > :23:16.some very strong competition. There are issues we need to address. Some
:23:17. > :23:21.of these have been handled well and some of them we could have handled
:23:22. > :23:26.much better. We will get better going forward. The measure of
:23:27. > :23:30.success is how it can sustain increase in competition and
:23:31. > :23:35.challenges over a long period of time. Five years from now I would
:23:36. > :23:44.expect British Airways to be in the top ten of airlines worldwide. We
:23:45. > :23:45.can be confident that we will be one that is performing well. That was
:23:46. > :23:47.the chief Executive of IAG. What other business
:23:48. > :23:56.stories has the media been James is back to talk this through
:23:57. > :24:02.the business pages. This headline from the Seattle Times. A lot of the
:24:03. > :24:06.newspapers are covering this story that the boss of hours and briefly
:24:07. > :24:14.became the world's richest man before slumping back down to number
:24:15. > :24:21.two. Do great riches come with great responsibility? What should we be
:24:22. > :24:28.doing with these levels of wealth? If I were him I would use my money
:24:29. > :24:32.in scientific research to help find a cure of AIDS. A couple of other
:24:33. > :24:39.tweets have also suggested a similar tack. That is interesting. Amongst
:24:40. > :24:44.the world of the super rich here is unique in his lack of philanthropy.
:24:45. > :24:51.I'm not sure that is necessarily true. We should acknowledge that
:24:52. > :24:54.people like Mr Gates has given around 30 billion, he has made a
:24:55. > :25:00.vast contribution to philanthropy. There is a history in the United
:25:01. > :25:08.States of leading players providing large sums of money. He is spending
:25:09. > :25:11.around $1 billion a year on his rocket business. It is all very well
:25:12. > :25:16.saying he should give the money away. He would have to sell the
:25:17. > :25:22.shares. Why should he want to do that when he is still building the
:25:23. > :25:26.business? If you were to say what is the real motivation of Jeff Bezos,
:25:27. > :25:30.it would be to build a ghastly successful business. Amazon has
:25:31. > :25:38.changed Varsity over the years. It started selling books online. --
:25:39. > :25:41.boss glee. The business is transformational. They will sell
:25:42. > :25:47.more close this year than Macy's. I think he will do this he did tweak
:25:48. > :25:51.it, what should my stance be on philanthropy question I think he
:25:52. > :25:57.will do a lot more. I do not think we should criticise him for lack of
:25:58. > :26:15.progress. We will have to leave it there.
:26:16. > :26:16.Still no signs of hot, summery weather on the