18/05/2017 World Business Report

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Now it's time for World Business Report.


US markets have their worst day since the presidential election


China's $300 billion e-commerce giant looks to America -


Also in the programme, Japan's economy


grows for the fifth quarter in a row - has Abenomics finally paid off?


But first, we start on Wall Street where for months optimism


about the Trump presidency, the markets have been powering


But late on Wednesday the Trump Bump turned into the Trump Slump -


as US stocks and the Dollar suffered their worst day


Growing concern that the President's promised tax cuts and pro-business


reforms may never materialise, as the White House battles one


The Dow Jones industrial average fell 372 points,


and both the Dow and S 500 suffered their worst falls


The Nasdaq had its biggest loss for almost a year.


In fact the last time the Nasdaq fell this much was on June 24 -


The US dollar has also tumbled to the lowest in six months -


This is the US Dollar against 10 leading currencies over the past


year - as you can see it's lost all its gains since Donald Trump


became President and is now back to where it was in November last


year, around the time of the election.


Some analysts say this correction was inevitable.


I think the Trump trade was largely a group fantasy,


so I don't really know that it was all that deeply


or well-rooted at any point, to be honest...


Part of, a significant part of what's produced the six month


market rally is the notion that we're going to have radical


deregulation particularly, but not exclusively,


around financial issues, and we're going to have massive tax


cuts, particularly, but not exclusively for large companies.


The weaker the president is, the less likely you are to get those


tax cuts, and some of those premiums start coming out of the market.


And I think that's what we're seeing right now.


Jeremy Stretch is market strategist at CIBC World Markets.


Good morning. We have talked about this many times since November. We


knew that some kind of correction would be coming. All the promises


have not materialised, deregulation of banking, tax cuts, bringing back


ports of cash from overseas, they are just not coming through? That's


right. We have seen a lot of promises on the agenda, ultimately


investors have reacted to that. The fact that we have seen this slew of


allegations or uncertainties, not just relating to Russia at the


difficulties that the Trump administration felt, healthcare for


example, that has pushed this reform agenda further back down the


process. Ultimately, it is the case of realisation that the great hopes


and dreams of an enormous fiscal boost to drive the economy on a fast


at trajectory has been postponed. In the last 48 hours, it has become


very intense because of the nature of the controversy surrounding the


Trump administration. Some people out there say that we could see an


impeachment. There is that kind of conversation going on, that does not


bode well for markets around the world? We have seen the same story


in Asia and Europe? Indeed. Political instability is one of the


greatest threats to any market. We have seen in the last 24 hours has


amplified that. The announcement of Robert Mueller does appear to have


provided at least a little bit of temporary calm. Look into the


future, it looks as though they may have found some stability. It is


fascinating, despite this slew of uncertainty that has been emanating


around the White House, market advertisers have been really high.


Volatility trading has been very low. Perhaps it is a temporary blip.


Thank you for coming in and providing an analysis. We will show


you how Asia is staring at the end of the programme. It is being felt


in Asian trading as well. We are also looking at Alibaba -


the Chinese e-commerce giant that has been described as the country's


eBay and Amazon rolled into one. It certainly makes more revenue


than both put together. It's expected to report another jump


in profits later today, its shares have soared since it


floated in New York and it now has a stock market value


of some $300 billion. But the vast majority


of its business is in China - something its billionaire founder


Jack Ma wants to change. A great entrepreneur, one of the


best in the world. For President Trump, the best way to show his love


for this country is to make it easier for Americans to sell their


wares to China. This sneaker shop is an example of that. It has a


physical store, but 90% of its business is done online. Since


August, they have been selling on Alibaba. That has been a big boost


to their Empire. We earned over $100 million this year. They run like a


start-up. That has been really refreshing. We are not dealing with


lots of competition. They treat us like we are a trusted,


multibillion-dollar company. The leader of China's biggest e-commerce


retailer has big ambitions. He wants to bring a million American


businesses to China and 2 billion customers in next decade. There have


been talking about making a big push out of China for the last several


years. Perhaps even prior to that, when they filed to become public a


number of years ago. You look at the revenue, it is almost entirely


contributed by China. They may well have aspirations and they may well


talk about that, but the numbers suggest there is a lot of work to be


done. The chief President is not afraid of a little hard work. He


will be in the US next month to make is pitched directly to the


businesses. -- his pitch. To Japan now where in the few hours


official figures show the economic growth picking up fast -


in fact, much better than expected. Japan's economy grew at an annual


rate of 2.2% in the first three months of the year -


up 0.5% on the last quarter of 2016. It's the fifth quarter in a row that


growth has improved - that's the best run


in more than a decade. So does it mean that


Prime Minister Shinzo Abe's massive stimulus programme has


finally done the trick? Joining us now, Hiro Shirakawa,


Chief Economist, Japan, Thank you for being on the


programme. Good afternoon, in Japan! Give us your take on these numbers


and what you think about how the Japanese economy is faring? First of


all, it is true that the economy is doing quite well. If you look at the


GDP numbers, it is. There are two risks. One is the global outlook,


the US situation is getting messy. Number two, we tend to think that


any fiscal stimulus, it cannot be sustained. Projects are not


necessarily about doing well in stimulating the economy. So we think


those are the two risks. Despite the fact that the economy seems to be


heading in the right direction, there still seems to be concerned


about the Japanese economy. What needs to be done now? I think that


the country has done a massive... They have done a monetary easing. We


have experienced or implemented a large number of fiscal stimulus


packages. Still, economists and others. We now shift our focus to


economic reforms and we tend to think that Labour market reforms


should be the most important thing, because we are now suffering in


their sales industry. We tend to think that Shinzo Abe house to shift


his focus on the Labour market and stimulate productivity. Thank you


for your time today. US and EU officials have decided against a


laptop ban on flights from Europe. That was after a meeting to discuss


the threats to aviation security. They said other measures were still


being considered. A previously said they were looking at extending a


Europewide ban on electronics on flights from eight mostly Muslim


countries. The measure was introduced over fears that a bomb


could be concealed in a device. Looking at the Asian markets now,


nearly all of them are falling. Japan is down, a lot to do with the


fact that the yen has strengthened in value in the last 48 hours. You


are now up-to-date, I will see you soon.


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