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This is Business Live from BBC
News with Rachel Horne
and Ben Bland.
Online retailer Amazon leads
a barrage of tech earnings.
Its sales were up 34%
as the retailing giant
continues its global growth.
Live from London, that's our top
story on Friday the 27th of October.
Google's parent company Alphabet
reported a 24% rise in sales.
We'll find out what's
behind the upward trend.
And it's bye bye bye
to floor trading on the Hong
Kong Stock Exchange.
After more than 30 years,
it's going fully electronic.
The markets in Europe are open. I
should be able to tell you where
they are. The ibex is slightly down.
I'm here, I'm waiting! There you
It's been a big week
for central banks -
we'll round up the week's events
with our business editor
Spending on Halloween is expected
to hit a record $9.1bn
in the US this year.
Today we want to know
is it scary how much
people are spending?
Just use the hashtag #BBCBizLive.
Hello and welcome to Business Live.
Thursday was a huge day
for technology company results.
Four of the big global tech giants
reported their latest earnings.
Alphabet - Google's parent company,
Microsoft and Twitter
all posted their key numbers.
But let's start with
a look at Amazon.
The retailer reported revenues
of almost $44 billion
in the three months
between July and September.
That's a jump of 34% over
the same period last year.
But profits were virtually
unchanged since last year.
That's because this is often
the quarter when Amazon chooses
to pile a bunch of money
into its own projects -
like tech gadgets, streaming
video and warehouses.
The company has operated on this
model for years and it seems
to have served it well.
In fact, analysts now estimate that
Amazon will command about 43.5%
of all commercial online sales this
year - that's nearly half
of all the stuff sold online.
Quite a staggering figure.
James Collier, co-founder
of the data monetisation
firm Prism, is here.
Rachel was talking about the
absolute dominance that Amazon has
online. What is interesting is the
move into bricks and mortar retail
with the acquisition of Whole foods.
Given they have been doing the
online thing so well do you think it
was a sensible decision?
been diverse in other areas, media,
video, bricks and mortar is a
natural transition as they bring
off-line data into the online world.
Alphabets are also doing very, very
well, the parent company of Google.
What are the reasons for that? Where
is the growth coming from?
its coming from an increase in the
volume of clicks. Advertising is
really the big story for Alphabet,
but they have seen growth in other
areas, other bets are starting to
come through. Google cloud services
have seen an increase and it
represents 5% of market share.
talk about Microsoft, often seen as
the grandfather of tech, but they
have reinvented themselves under the
chief Executive and it is all about
They set themselves a
hard goal of $20 billion from cloud
services. They achieved that this
quarter and now they have
transitioned. If you look five years
ago it was 5% of the business, now
it is 20%. That includes services
from 360, the cat marked office
suite, all the way through to the
The other thing
we keep hearing about is how much
they are interested and investing in
artificial intelligence and the
internet of things, home connected
Right, again, it is all
about information. The internet of
things is about your fridge being
connected to the internet, it is
about your car and self driving
things, AI is driving a lot of that
and it helps businesses make better
decisions. For companies like
Microsoft and Amazon, where they
have huge infrastructure to support
AI, it is a massive area of
interest. Self driving cars, moon
shots, it is a big topic for them.
Going back to Alphabet and Google,
the increasing clicks is partly what
has given them the increased
revenue, but what countries are
willing to pay for those clicks has
declined significantly. What can
they do to combat that?
doing deals, so there is a plan for
Siri to be the surge of choice. But
it cost them a huge amount of money.
They have something called TAC,
traffic acquisition costs, and that
has gone up significantly. The cost
per click has gone down by 20%. It
is a transition to mobile, so it is
where they start to compete with
services like Amazon, and how they
bring in things like Google Home,
which they are investing in
massively which is going to
transition that back-up.
Let's take a look at some of
the other stories making the news.
Royal Bank of Scotland has settled
a US criminal investigation that
accused its traders of lying
to clients over investments
between 2008 and 2013.
The US Department of Justice said
RBS will pay $44 million under
the non-prosecution agreement.
RBS said it self-reported the issue
to the US authorities.
Toymaker Mattel is suspending
its quarterly dividend
after being hit by the bankruptcy
of its largest retailer Toys R Us.
Mattel shares fell after the company
announced losses of over
$600 million in its latest results.
The California-based company
was also hurt by weak demand
for products like Barbie,
Hot Wheels and Thomas & Friends.
Strong pickup truck and SUV
sales in the US boosted
Ford's bottom line.
The carmaker saw profits jump 60%
compared to the same period last
year when it faced a recall.
However, it still faces
an uphill battle in China,
where sales have been
have been lower.
More revelations about
Nissan reportedly carrying out
faulty checks on vehicles sold
in Japan since 1979.
And reports Subaru carried out
illegal inspections on its vehicles.
Leisha Santorelli is in Singapore.
What more can you tell us about the
latest reports about Subaru?
Rachel, shares in Subaru took a
tumble on these reports that an
certified technicians were allowed
to conduct a vital vehicle
inspections at one of the factories
north of Tokyo. If confirmed, Subaru
might have to conduct a major
recall. One report put it at about
300,000 cars. Subaru is scheduled to
hold a press conference at 8am GMT.
If the situation sounds familiar, it
is. Subaru is facing the same
problem that Nissan admitted to.
Bloomberg is reporting that Nissan's
certification scandal might have
stretched back to 1979, nearly 40
years. It was actually because of
Nissan's for the inspection process
that Japan's transport Ministry
ordered all domestic car-makers to
conduct internal investigations.
That is why we are seeing these
revelations and reports coming out
about Subaru facing the same
OK, thank you for the
update. Let's see how the markets
have been going on. We have the
Australian all ordinaries up.
A court has ruled that the Deputy PM
Barnaby Joyce and four other
politicians were wrongly elected
because they held dual citizenship.
Spinnaker that has stripped the
government of the one seat majority.
In Hong Kong, you can see that
stocks were up overnight, inspired
by strength and Wall Street. You can
see the Dow Jones up after strong
And what about Europe -
yesterday the European Central Bank
said they will extend their stimulus
programme although they will
start the cut the levels of bond
buying from January.
And we've got the Spanish stock
exchange up - the Ibex -
because today the Spanish Senate may
approve the take-over of Catalonia's
institutions and police,
Barcelona could respond
by declaring independence.
Let's go to Wall Street.
On Friday we will see just how
fast the US economy grew
in the last three months.
In the previous quarter,
between April and June,
the US economy grew 3.1%.
For this quarter, however,
many are expecting to see a bit
of a slowdown and estimate that
gross domestic product, or GDP,
will be coming in at about 2.5%.
Two oil companies will be
reporting earnings on Friday.
Exxon Mobile, the world's largest
publicly traded oil producer,
is expected to show a rise
in profit, while cost-cutting
is likely to help Chevron also
report a jump in profit
for the quarter.
Finally, the pharmaceutical giant
Merck will be reporting earnings.
Investors will be on the lookout
for information on the sales
of its cancer drug Keytruda.
Updates on a cyber security attack
that Merck said last quarter
would likely impact its profits
will also be of interest.
Joining us is James Bevan,
Chief Investment Officer at CCLA
The last time we had growth figures,
pretty robust, 3.1%. What do we
think this time?
Definitely a slow
number, the Fed's own numbers
suggest 2.7. There are some people
expecting a higher number on the
back of hurricane interest, leading
to faster car sales. Better numbers
coming out of China, international
dimension is as well.
At the top of
the programme we were talking about
the tech titans.
How dependent is Wall Street on the
big tech stocks?
They have been the principal driver
of market progress to date. It is
not surprising because the numbers
are sparkling and people are really
betting on the long-term future.
There are companies like Twitter who
are yet to report a profit.
looking at President Trump and his
plans for tax reforms in the US,
what impact could it have on tech
companies? In his election campaign
we heard a lot about him saying he
wanted to reduce tax for the big
tech company is to bring profits
back to the US. Do you think that
could still happen?
There is a bi- location of issues
for Trump on tech companies. He
would dearly love to see the money
off shored backs The Backed the
United States, providing the push
for growth. The second issue is at
what point does he get bored of
these companies really driving the
shape of the US economy? Think he
has real reservations that Amazon,
example, in purchasing Wholefoods
was more about getting market share
than driving profit.
I suppose that
is the other concern, traders and
investors will lose patience with
the promised tax reforms. They had
been promised them for a long time.
They cleared a hurdle in the last
day or so. The hope must be that
there isn't a market correction
before the tax changes come in?
think a correction would be fine. A
descent into a bear market would be
a different proposition and we are a
long way from that. We are a long
way from having a US recession. As
perverse as it might seem, if we got
a rapid growth, followed by a
clamp-down by the Federal Reserve,
if Professor Taylor were to become
chairman, the market would be
We will delve into
that with Simon Jeff later in the
programme. Thanks for coming in.
Lots of speculation over who'll be
the next Fed Chair -
and we'll get some more
from our business editor Simon Jack
as he wraps up the week's
biggest economic stories.
You're with Business
Live from BBC News.
IAG, the parent company
of British Airways, has
reported passenger and cargo
revenue growth today.
Passenger revenue rose by 1.6%
to £5.15 billion between July
and September while cargo grew
by 7.9% to £213 million.
Our Economics Correspondent,
Andrew Walker, joins us now
from our Business Newsroom.
How have they managed to achieve
Well, it is a
striking performance. In one sense
they managed quite an increase in
profits for the first nine months of
the year of 11%. That goes up to 1.9
billion euros, and as you indicated
a significant part of that is down
to what has been going on on the
revenue side. Passenger numbers were
up. They took an extra 2.5 million
people in that period, just over 80
million passengers all told. There
was actually a slight fall in the
weight of cargo that they took. They
seem to have taken it further and
they actually increased revenue from
that as well. The company says that
there were particularly strong
performances on the passenger side
in East Asia, Latin America,
especially Latin America, and the
Caribbean, although they say that
the biggest markets, Europe and
North America, also did well with
British Airways in particular making
good sales of some of its premium
fares, business class and so fourth.
What about the cost?
have been in the right direction
from the company perspective. Total
costs down by 1.8%. Fuel in
particular is down by 8.4%. This is
reflecting what is going on in
markets. There is also hedging
activity going on which does tend to
dampen the impact that market moves
have on the cost that airlines
faced. But overall, encouraging
performance and cost side as well.
You know when you look at hotel
rooms online, you get that message
saying that six other people are
trying to book a? The authorities
are looking into that to see if
you're getting the best deal or not.
They are worried about the clarity
and accuracy of information given to
consumers. If you think you're not
getting the best deal, you may not
be, and you can read more on that on
You're watching Business Live.
Our top story: Online
retailer Amazon leads
a barrage of tech earnings.
It's sales were up 34%
in July to September,
while Google's parent company
Alphabet also reported bumper
sales for the period.
Now, it's been a big
week for central banks -
with speculation about who will be
the next head of the Fed.
While in Europe, the ECB indicated
it'll start slowing down key
bond-buying stimulus measures
And there's been movement
on Trump's tax policy.
Simon Jack is our business
editor and joins us now.
Thanks for coming in.
Let's start with the new head of the
Federal Reserve - who do we think it
Janet Yellen, the
incumbent, her term expires in
February. She has been comfortable
with unconventional monetary policy,
quantitative easing. The big task
for the next person will be
reversing some of that. Donald Trump
was critical of her in his election
campaign. Having said that, last
week, he said she was to rhetoric.
He said the stock market was going
fine and warmed up to her. The two
front runners are John Taylor, an
academic from Stanford University. A
hawk, meaning he likes to put
Upminster -- interest rates faster
than other people -- put up interest
rates. The other candidate has
talked about easing the stress tests
that have been put on the banks.
That chimes with Donald Trump.
Whoever gets the job, it will be
interesting because they have two
reverse the biggest monetary policy
experiment of all time, when the
Federal Reserve bot $4.5 trillion
worth of assets. -- bought $4.5
trillion worth of assets.
track of how long we have been
talking about the promised tax
reforms. Finally, some progress?
They seem to be inching towards it,
passing a bill last week which got
it to the next stage. Everyone
agrees in the US that corporate tax
is too high, 35% in the US, whereas
it is only 20% in the UK. The big
debate is about how you pay for it.
A lot of people are saying, we could
take away some pension relief,
reduce the tax thresholds, so you
would raise some money from them.
Some people worry that that is a tax
on the middle classes, not what
Donald Trump promise. The question
everyone agrees on is that it should
happen, it is how it should be paid
for. The Ronald Reagan economics
that Donald Trump is talking about,
the bet is that economy grows
faster, so the tax take goes up,
even though you reduce the rate.
Talking about the corporate tax
rate, we were discussing it with
James Bevan in relation to the big
tech companies who have had results
in the last 24 hours. Do you think
they would bring their money home if
the rate was reduced?
It is more
about the money that is already
sloshing over there. Apple has $250
million sloshing around in various
places. The boss of Apple has said
he would be happy to bring it back.
There are a lot of people who think
that companies will buy back their
own shares and reduce the number of
slices of the pie so that each
shareholder gets a bit richer.
People say that is not real
investment in the economy. Jamie
Diamond, the boss of JP Morgan, says
even if they do use it for share
buy-backs, so what? It's all money
and money coming back to the US. I
don't think we are there yet, but
that flood of cash coming back to
the US would have a big effect on
the dollar. It would be an
interesting thing to witness. You
would probably see the dollar go up,
reducing inflation in the US, which
might be a problem for the Federal
Reserve. When it comes to tax
reform, it gets everywhere.
talking about bond buying.
reducing it. Downsizing is the word
emerging. Every time you take away
stimulus, people get a bit sweaty
about it, so Mario druggie yesterday
managed to say he was going to
reduce bond buying the 30 billion a
month until September 20 18th, but
decided to leave it open ended.
There was no one facing the threat.
He said it could be done for longer
and that interest rates won't be
increased until the bond buying is
over. He's taking it down a bit but
leaving it open ended in order to
withdraw stimulus, some of it,
without giving people the shakes.
But the euro takes a hit as a
Yes, because we were gearing
ourselves up for a bit more of a
tightening, saying this was when it
was going to be over. When you make
interest rates go up a bit, that
makes deposits in those currencies
more valuable. They will downsize it
but keep it open ended, and that
will loosen money policy, which
brings the currency down, so the
euro took a hit.
Simon Jack, thank
you very much.
The Hong Kong stock exchange
will close its trading floor,
after 31 years, on Friday.
In its heyday, the floor was home to
more than a thousand stockbrokers.
But the rise of electronic
and Internet trading has changed
the industry permanently.
The world is changing.
Financial technology is developing.
We should get with the Times, even
if we don't want to go.
I started as a broker
after finishing school. It has been
over 40 years. There used to be four
exchanges. Then they combined to
become one exchange in 1986, and we
moved into this hole. We started out
as a small, regional stock exchange,
but then Hong Kong became an
international financial centre. I
think stockbrokers working here
contributed a lot. We have gone
through countless financial crises,
and we persevered. Stockbrokers made
great contributions. This is
something we are very proud of.
with that, the lights fade on the
Hong Kong stock exchange floor.
James is back to look
through the papers.
Have you been in the Hong Kong stock
exchange itself on the trading
Twice. I went in 1994, when
it was the only way you could trade
shares. There were 1000 people and
it was exciting. A bit like a
football match - lots of shouting
and lots of red jackets. A poster
child for the capitalist system. I
went again in 2000, and it was
nearly empty, such change in such a
Is it New York and
If you go to New
York, you will do it as a Taurus
rather than because of a genuine
interest in trading. It is a
marketing tool for the stock
exchange rather than a principal
Do you think that losing the
trading floor and that atmosphere is
It is absolute reality. As
soon as light becomes digital,
everything will be on the screen.
Did you enjoy the trading floor?
That was all too
frenetic, lots of shouting. It was a
bit like going to an auction.
like you transported us there! I
also want to talk about Halloween.
It is creeping up upon us, and the
latest figures suggest that the US
will spend $9 billion and more on
Halloween this year. We have been
asking for your comments on this.
Does that thought scare you? Luca
Thorne says: It is frightening but
it shows how popular Halloween is in
America. Kyle says: Dentists must be
thrilled, all those sweets being
eaten. Are you spending any money on
There are people buying things they
don't really want with money they
haven't really got, very often to
impress people they don't really
like. And it's a bad cocktail.
What are you
spending on Halloween?
want to dress up as zombies, which
means getting old clothes and
covering them in ketchup.
States, 16% of households spend
money on dressing up their dogs.
That's true, pet Halloween.
popular ones are hotdogs, for pets.
I thought you meant
dressing up hotdogs.
That's it from Business Live today.
There will be more business news
throughout the day on the BBC Live
webpage and on World Business