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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