:00:00. > :00:00.Can Germany's economy shrug off the cold winds from China?
:00:00. > :00:00.We look ahead to the latest growth figures
:00:07. > :00:13.Welcome to World Business Report, I'm Sally Bundock.
:00:14. > :00:15.We start on Wall Street where the turmoil
:00:16. > :00:20.After a brief rally this week the selling has returned
:00:21. > :00:22.with a vengeance, with US shares falling sharply
:00:23. > :00:29.Could things be about to below $30 a barrel.
:00:30. > :00:33.Some analysts certainly think so, let's take a look a the numbers.
:00:34. > :00:43.The Dow Jones losing more than 364 points or 2.2% and the S 500
:00:44. > :00:54.Here's the worrying bit for many market watchers.
:00:55. > :00:59.The S is now down 10.4% since its recent high in November.
:01:00. > :01:06.A fall of more than 10% is known as a correction.
:01:07. > :01:09.It can be a big blow to confidence in the markets,
:01:10. > :01:11.and often a signal of bigger falls to come.
:01:12. > :01:13.The Nasdaq also entered correction territory earlier this week
:01:14. > :01:21.The next stage is this, a bear market.
:01:22. > :01:26.That's where stocks fall 20% from their peak and negative
:01:27. > :01:31.Well, as of Wednesday shares of smaller US companies have now
:01:32. > :01:41.We'll be hearing from our correspondent in New York
:01:42. > :01:55.Earlier Thursday it looked like the market would regain some of its
:01:56. > :01:58.losses from its brutal first week of the New Year, but then we saw a
:01:59. > :02:04.broad sell-off that cause they plunge, the Dow closed down 2.2% and
:02:05. > :02:11.the Scottish National Party 500 sub 2.5%. That brought it down 10% from
:02:12. > :02:15.its November peak and that is known as a correction or adjustment for an
:02:16. > :02:20.overvaluation. The last time we saw a plunge that big was in August and
:02:21. > :02:24.that correction, like this one, was sparked by financial turmoil in
:02:25. > :02:29.China. But it continues to show the nervousness over tumbling oil prices
:02:30. > :02:33.and concern over global growth. Investors have been shifting their
:02:34. > :02:38.money to assets seen as safe, like US government bonds. If we look
:02:39. > :02:47.particularly at oil, it's been down roughly 18% so far this year. It
:02:48. > :02:49.also had a brief rally on Thursday before prices fell again. We've
:02:50. > :02:53.heard this could be an issue throughout 2016 really weighing on
:02:54. > :02:59.the markets. One U we heard was from a leading analyst from society they
:03:00. > :03:03.general, Albert Edwards, he said the world could be heading for a
:03:04. > :03:09.financial crisis as severe as 2008 -- society general. That is the more
:03:10. > :03:15.dramatic side of the views out there but it shows the uncertainty.
:03:16. > :03:18.Pessimism is definitely the the word that is relevant today.
:03:19. > :03:20.Let's check how things are looking in Asia now,
:03:21. > :03:22.Sharanjit Leyl is in our Singapore bureau
:03:23. > :03:30.What is happening at the moment, it is definitely following the tone set
:03:31. > :03:33.on Wall Street? That's right, Sally. The King at the markets and seeing
:03:34. > :03:41.how they are trading, they are all tumbling lower after that sell-off
:03:42. > :03:47.on Wall Street -- looking at. Lots of investors nervous about the stock
:03:48. > :03:52.market. There in mind the explosions and gunfire heard in Jakarta, that
:03:53. > :03:58.is rattling a lot of investors in the region -- bearing mind. The
:03:59. > :04:03.Indonesian currency was sold off after that. Then you have the recent
:04:04. > :04:08.rocky ride in Chinese stocks, putting of investors from investing
:04:09. > :04:12.in stocks. Yesterday we were talking about better than expected trade
:04:13. > :04:16.numbers from China, but that has failed to dispel a lot of pessimism
:04:17. > :04:21.among investors here that Asia's largest economy is heading for a
:04:22. > :04:28.hard landing. Today we are seeing the Nikkei falling as much as 4%.
:04:29. > :04:31.Earlier it did breach the psychologically important 17,000
:04:32. > :04:37.mark, falling just below that, and we saw weak economic data from
:04:38. > :04:40.Japan, that has affected sentiment after core machinery orders, and
:04:41. > :04:49.important gauge of the economy, they are unexpectedly falling, down 14.4%
:04:50. > :04:54.in November from the previous month. You have that drop in oil prices as
:04:55. > :04:57.well, that is adding to a lot of the pessimism. Bearing mind, we've been
:04:58. > :05:03.talking about the rocky ride in the Chinese stocks, but the Shanghai
:05:04. > :05:08.Composite index not down as much as people feared, but it is certainly
:05:09. > :05:13.negative along with South Korean and Australian stocks. Thank you for
:05:14. > :05:18.keeping us up to date, Sharanjit. Financial markets have started the
:05:19. > :05:22.year so poorly, a lot of pessimism and negativity. So how does this
:05:23. > :05:24.translate to economic growth of countries? We are going to focus on
:05:25. > :05:30.Germany. In a few hours time it releases
:05:31. > :05:37.growth figures for 2015, the economy is expected to have
:05:38. > :05:39.grown 1.6% over the year despite the sharp slowdown in one
:05:40. > :05:42.of its major export markets, China. Two thirds of the growth is expected
:05:43. > :05:45.to have come from consumer People out in the streets of Germany
:05:46. > :05:54.in the shops and online. Claus Vistesen is Chief
:05:55. > :05:56.Eurozone Economist at Pantheon Macroeconomics,
:05:57. > :05:58.he joins us from our studios in Newcastle in the
:05:59. > :06:05.North East of England Thanks for being on the show. What
:06:06. > :06:11.are you expecting from Germany in terms of growth for last year? I'm
:06:12. > :06:15.actually expecting slightly less than what the market expects mainly
:06:16. > :06:19.because the fourth quarter, where the statistical office will have to
:06:20. > :06:23.make some assumptions on what happened, because we don't have the
:06:24. > :06:29.full dataset yet, those assumptions will be slightly worse than the
:06:30. > :06:33.market expects. So I think, you said 1.6%, I think perhaps 1.5% or 1.4%,
:06:34. > :06:38.which will go down as a disappointment. But the key story
:06:39. > :06:43.will be the German consumer is very strong. We have seen that through
:06:44. > :06:48.the year. Whereas manufacturing, as a result of headwinds from China, is
:06:49. > :06:51.probably going to be weak. Talk us through some of the challenges
:06:52. > :06:56.facing the German economy at the moment. Of course there's lots of
:06:57. > :07:00.political challenges in terms of events taking place in Germany and
:07:01. > :07:05.the migrant crisis. They took in 1 million migrants. What is the year
:07:06. > :07:09.ahead looking like for this economy? I think the year ahead... As we are
:07:10. > :07:14.standing here it looks very much like the one we have just had. The
:07:15. > :07:19.consumer will have to do the heavy lifting again, at least at the start
:07:20. > :07:23.of the year, because we are still seeing poor data out other emerging
:07:24. > :07:27.markets in China. Then you have manufacturing, which has been doing
:07:28. > :07:35.all right in Germany, but not that well. And exports, which again have
:07:36. > :07:37.been doing all right, but not as as you would expect given a more
:07:38. > :07:43.broad-based cyclical recovery and easy monetary. What we should expect
:07:44. > :07:48.next year, or this year, as it were, from Germany is more of the same.
:07:49. > :07:53.And the key question is whether the German consumer can continue to pull
:07:54. > :07:56.its weight, as we saw last year, because that will really determine
:07:57. > :08:01.whether Germany has a really good year, as I think it had last year,
:08:02. > :08:06.or whether it will have a mediocre or even slightly poor year. Thank
:08:07. > :08:07.you for your time early this morning. Thank you. Some other
:08:08. > :08:12.business stories now. UK luxury brand Burberry gives
:08:13. > :08:15.a quarterly trading update later, investors will be looking to see how
:08:16. > :08:18.the company fared over the crucial Shares have slumped 43%
:08:19. > :08:21.since their peak last February amid the slowdown in China
:08:22. > :08:23.where Burberry makes more than a third of its revenues,
:08:24. > :08:26.piling the pressure on chief Shares of action camera maker GoPro
:08:27. > :08:30.have plunged after it gave a disappointing revenue forecast
:08:31. > :08:32.for the fourth quarter and said GoPro shares fell 28% to $10.50,
:08:33. > :08:38.less than half the price It's being hit by competition
:08:39. > :08:46.from the likes of China's Xiaomi which are offering
:08:47. > :09:00.cheaper rival cameras is bucking the trend,
:09:01. > :09:03.though, its shares have risen after the firm
:09:04. > :09:06.said it would be more profitable and return more money
:09:07. > :09:07.to shareholders. Shares in the biggest US carmaker
:09:08. > :09:10.closed 0.6% up after it raised its 2016 earnings forecast
:09:11. > :09:12.by 25 cents a share. GM also plans to raise its stock
:09:13. > :09:26.buyback programme by 80% to $9bn I have to say, US car-makers are
:09:27. > :09:30.having a pretty good time. A record year in terms of sales last year. We
:09:31. > :09:34.will talk about that in more detail when we look at today's papers
:09:35. > :09:39.because a low oil price is playing its part in boosting the sales of
:09:40. > :09:43.cars in the US. You can see how torrid things are in the markets in
:09:44. > :09:54.response to what happened on Wall Street. I will see you soon.
:09:55. > :09:57.Energy prices have dropped dramatically in the past year
:09:58. > :10:01.and are set to stay low for the next two years,