26/01/2017 World Business Report


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Wall Street puts its doubts aside as the Dow Jones


Can Brexit Britain and Trump's US beat the likes of Ireland


at their own game and lure back the multinationals


We will be checking how markets are doing in Asia in just a moment.


We start in the US where President Trump has been


provoking more controversy over his plans to wall off Mexico.


Meanwhile, traders at the New York Stock Exchange


Here's what they have been celebrating:


the Dow Jones Industrial Average of top US shares ended here,


finally closing above 20,000 points for the first time


It's a huge psychological milestone for traders,


the Dow has now risen some 9.5% since the election in November,


one of its biggest rallies on record.


It got within one point of 20,000 back on January sixth


before nerves caused the rally to fizzle out.


But since President Trump's inauguration, the confidence


Some investors are predicting it could rise a lot further


if he follows through on promises to slash business taxes


and regulations and boost infrastructure spending.


World, they printed the T-shirts and hats weeks ago and on Wednesday


finally after everyone was beginning to wonder if they'd ever get a


chance to wear them, the Dow Jones industrial average finally rose


above 20,000 for the first time. Now, Kellyanne Conway, an adviser to


President Trump, was quick to take credit calling it the Trump Effect.


Now, it is true that Donald Trump's selection has been really good for


shares in the US's leading companies. Since November the night


the Dow has risen by about 8%. President Trump campaigned on things


like rolling back bank regulations and simple find the US tax code.


Now, the recent US damn executive orders signed by the president has


given Wall Street confidence that he will follow through on some of those


promises and that has helped the Dow make it over the 20,000 mark. That


said one cannot talk about these market milestones without making


mention of the strength of the US economy that Mr Trump inherited from


his predecessor, Barack Obama. The unemployment rate is sitting at a


10-year low and the Federal Reserve was engaged in a massive stimulus


programme that's kept interest rates near zero for a very long time. All


of which has helped to bring US markets where they are today.


I remember when it went beyond 10000 and the champagne was popping them


too! So what's happening now


on financial markets. Let's go to our Asia business hub


and join Rico Hizon. I want to see you in one of those


hats with 20,000 on it, one of the baseball hats. Have you got one? You


just mentioned the Dow 10,000, that was aeons ago! Your showing my age,


it was one of my first stories! You're very young. Everyone is


cheering the Trump jump in Asia, Dow, 20,000, stocks are rising here


to 3.5 month highs on hopes that Mr Trump's economic plans will ramp up


growth. This surge is the latest sign in investors are brushing aside


for now worries about Mr Trump's trade protectionism stance and are


instead betting that the White House and the Republican Congress will


implement what's in the era mentioned, tax cuts, spending big on


infrastructure and cut the bureaucracy -- what Samir mentioned.


The Japanese Nikkei 225 is stronger by 1.2%, the Hong Kong Hang Seng has


risen by 1%. If you look at the Chinese stock market, it is


currently flat as investors are set to start their Chinese New Year


holidays. Everyone is migrating to their respective hometowns and


travelling overseas and markets there will be closed from tomorrow


until next Thursday, a very long market holiday for the mainland.


That is the latest on the markets. Sally, back to you.


We are also looking closely at that issue of corporate tax cuts.


It's a central part of President Trump's strategy


to boost the US economy and is on the agenda today


at the Republican Party's annual retreat in Philadelphia.


President Trump will be there to give an address


as will British Prime Minister Theresa May,


Before winning the election, Mr Trump promised he'll


cut the US corporate tax rate from 35% to around 15% to try


He's also targeting the billions that US multinationals,


the likes of Starbucks, Google, and Microsoft make overseas.


Mr Trump says he'll allow them to repatriate those profits


That's what he said anyway before his election.


But the US President is likely to face competition.


UK Prime Minister Theresa May has pledged she will deliver the lowest


corporation rate in the G20 as the UK tries to make itself


attractive to big companies once it leaves the European Union.


And just next door is Ireland, which is in the European Union,


has had big success luring multinationals.


The likes of Apple, Intel and Pfizer are some


of the big American companies based there.


Its controversial arrangements include corporation tax


Here's how Mr Trump made his pitch to business leaders earlier this


week. to companies that do indeed


make their products here. So we've seen it, it is going


to get, it is going to be a wave, And I've always said by the time


you put them in these massive ships or airplanes and fly them,


I think it is going to be cheaper. Now, what we are doing


is we are going to be cutting taxes massively for both the middle


class and for companies We are trying to get it down


to anywhere from 15 to 20% and it is now 35% but it is probably


more 38% than it is 35, Dominic Stuttaford is a senior tax


expert at the law firm Norton Rose


Fulbright. Good to see you. Good morning. This


will be discussed in Phil Duffy and Theresa May is there and the


competition is getting hot globally, but will this become a reality --


Philadelphia. People have always talked about a change in the US tax


system, it's complicated and there's many with vested interests, it may


take time but now there's pressure. It's interesting, in the UK the


government will have a budget and it will make the announcements, it


often comes into effect immediately, in the US the system doesn't work


like that? In the US you need the President and Congress to work in


tandem for anything to happen. That's why it hasn't changed for a


long time? And when you have something that is so, located, what


bits do you change? Radical reform is difficult because there will


always be winners and losers -- is so complicated. That is on the


agenda, firmly on the agenda of President Trump, he's made that


clear in deed. Will it have the impact if he was able to get the 10%


rate on money come back home, from Apple and Google and others, would


it have that effect? Would Apple repatriate the billions it has


overseas? They will always keep some money overseas to fund subsidiaries


but fundamentally yes, because that money has been sitting there, they


need it in their home jurisdictions to pay dividends and money back to


their shareholders so why keep it overseas if you can bring it back


without massive amounts of tax? There in a bizarre situation, big


companies like Apple and Google, where they have this money stashed


overseas because of the money they used bringing it home but they may


borrow in the US to pay things like dividends -- they are in. Yes, but


the problem with the system is the system hasn't incentivised you to


bring your money back to your home jurisdiction. There's a tax charge


if you put it back in the US. That is contrary to every other major tax


administration. Thank you very much, Dominick, for making sense of this


scenario. Of course it is something we will keep you across as it


develops. That is all from World Business Report for now. Thanks for


watching. We'll be back in a moment reviewing all the stories in the


news. See you then. Half of hospitals aren't yet meeting


new Government standards for patients' food,


according to a new report. National standards were introduced


two years ago with ten key


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