tv Business Briefing BBC News July 26, 2019 5:30am-5:46am BST
this is the business briefing. i'm victoria fritz. primed for growth. amazon sales jump as it invests heavily in one—day delivery. but the spending spree weighs on profits. plus — flagging a rate cut. the ecb signals stimulus is on the way — as trade wars and brexit weigh on the economy. and on the markets: us stocks fall back from their record highs amid a torrent of corporate earnings, very much a mixed bag with some weak forecasts from companies raising concerns for investors.
we start with amazon, because the online retail giant has revealed another set of mind—boggling sales figures. ceo jeff bezos says efforts to make one—day delivery the norm for prime customers are paying off — with accelerating sales growth. shares have fallen though as investors were disappointed with how little profit amazon is making on all that business. let's show you the details. amazon made revenues of $63.4 billion in the three months to the end ofjune. that was up 20% on the same period last year. but only around $2.6 billion of that was profit — less than investors were hoping. and it's forecasting profit could be lower in the current quarter. amazon has been spending heavily — $800 million in the past three months alone —
to try and offer one—day delivery on more products. ceo jeff bezos says it's now available on 10 million items — and that is boosting sales. but amazon is facing growing pressure over its sheer size and power. it's facing antitrust investigations in the us — along with the other tech giants. and earlier this month, the european commission also began an antitrust investigation into whether amazon is "abusing" its role as a marketplace provider. from new york — here's michelle fleury. emerson's wave of record profits has crested, the company ‘s second—quarter profit was more than 3.5% from a year ago. but it fell short of wall street ‘s expectations. worse still, the giant warned not to expect much improvement in the next quarter as it ramps up spending. investors have become used to amazon, the record—breaking, money making machine. total profit for 2018, top
$10 million for the first time in the company ‘s history. this is fuelled partly by the success of its cloud computing business but amazon web services as cloud operations are known, posted its lowest growth rate in more than five years was not present questions about its continued dominance of the field. as if that won't enough, the online retailer shipping cost jumped by more than one third because amazon invested $800 million to make one every shipping the standard for prime members. the online retailer share price was quickly punished, falling on news of its results. cyrus mewawalla is head of thematic research at global data joins me now. we understand that more packages went out this quarter than the last, customers seem to be responding to this wonder delivery idea but do you
think that amazon ‘s fulfilment centres think that amazon ‘s fulfilment ce ntres ca n think that amazon ‘s fulfilment centres can keep pace with a lot of this because productivity appears a little off? amazon has been a lead in the commerce market, that's why it has been so successful, drones of the next day delivery, we have regular issues there so we don't know which countries will allow drones first the uk is one of the markets that is trying to open up drones regulation. but i expect suddenly amazon has warehouses that have some of the most advanced robots in the same way that a british company does, amazon is improving all aspects of delivery and also moving into new markets like healthcare, luxury goods, et cetera. google, and amazon, i should say the parent company, they both have their specific set of challenges in both reporting accelerating growth, due think anti—trust probes are going to play anti—trust probes are going to play a big role in the future?” anti—trust probes are going to play a big role in the future? i do. the biggest issue for regulation right
110w biggest issue for regulation right now is data privacy and facebook just got hit with a $5 billion fine a few days ago and itjust drug that. the share price actually went up. the department ofjustice in the west and the eu are now on the case for all techs are amazon, apple, microsoft, google and so on, and there are a number of probes under way. but there are two key issues. the first is, i think is unlikely the us is lucky to break these companies up because amazon, microsoft, apple, they provide the next generation of technology that is going to use the economy versus china. you mention the finder facebook, but that is a drop in the ocean compared to what amazon could be facing. with this your opinion trust probe that's going on the moment. judicially big tech companies like amazon, they have been fined billions of dollars and they have just shrugged it off. the ship rescues rising because they have 70 markets in which they are
dominant. but the issue of regulation today is really, it's not controlled by specific market, but it's control of data. amazon, facebook, google, all these companies control our data, your data and my data. in theory, that belongs to us but these companies use it as belongs to them. if regulators really attack the data model, then this companies could be in trouble. as we have seen, they can shrug off $5 billion fines. but what the shrug of more? thank you so much for coming in, i noticed earlier. can. the european central bank has hinted it could cut interest rates to tackle a slowdown in the eurozone economy. it says a weak manufacturing sector and uncertainty about brexit and trade are threatening to derail growth. it's the latest central bank to signal an easing of monetary policy — with the us federal reserve expected to cut rates next week — as jonathan josephs explains. the global economy is slowing and the eurozone is no exception. trade tensions, such as the us— china trade war,
one of the major reasons why. the european central bank, which sets interest rates for the 19 countries that use the euro, is increasingly worried. it's president mario draghi has said that things were getting worse and worse. the prolonged presence of uncertainties related to geopolitical factors, the rising threat of protectionism, and vulnerabilities in emerging markets, is dampening economic sentiment, notably in the manufacturing sector. interest rates have been kept on hold for now. they have been near zero for years anyway. but mr draghi made clear hints that was something that could change in september, when the next policy meeting happens and another chance to stimulate the eurozone resigning economy. the other option would be quantitative easing the so—called printing of money. nearly $3 billion has been pumped in like this since 2015, when the programme first began. germany's factories are another major worry. industrial production there has been the slipping. factories that make cars and other sorts of machinery are worried
about brexit and the ongoing uncertainty there — as is the rest of the eurozone, it should be pointed out — but also there are concerns about us tariffs on cars from the european union. something we still do not know whether or not it is going to happen. now these trade tensions have also caught the attention of the international monetary fund. earlier this week it cut its global forecast for growth. and another body that we'll be looking at them very closely is the us central bank, which meets next week to discuss interest rates and could well cut them for the first time in a decade. let's go to asia now — and japanese tech firm softbank has unveiled a huge new investment fund — which plans to raise more than $100 billion of capital for new cutting edge technologies. sharanjit leyl has been looking at this for us. this is the second fund of this
nature, who else is going to back it and what about you? that is right, i should say it's a whopping 108 early in dollarfund should say it's a whopping 108 early in dollar fund to should say it's a whopping 108 early in dollarfund to be should say it's a whopping 108 early in dollar fund to be precise, should say it's a whopping 108 early in dollarfund to be precise, which they are contributing 38 billion two, they're expecting the rest to come from companies like apple, microsoft, the sovereign wealth fund of kazakhstan, would you believe, amongst others. it is a second fund, it is aimed at investing in tech companies and artificial intelligence. in the first fund you recall had a lot of middle eastern oil money, specifically saudi investment, that is just right there try to move away from that after a backlash following the murder of the journalist which was linked to the kingdom. softbank launched its first fund in may 2012, an attempt by early and a founder to try and transform the group from a telecom centred conglomerate into a global investment powerhouse. there are
essentially the largest private full of money ever raised and a lot of that money was channelled into next—generation firms like buber, china's version of it — metabolic. —— uber. now let's brief you on some other business stories. shares of google parent company alphabet surged 9% in after hours trade on better than expected second—quarter results. revenue for the three months tojune jumped 19% to $38.9 billion, driven by gains in sales of mobile ads, youtube ads and cloud computing services. starbucks has served up the best quarterly sales growth in three years — sending its shares towards a new record high. the world's top coffee chain has been attracting more customers by revamping its menus and expanding the delivery side of the business. the french fashion house sonia rykiel, which symbolised
the spirit of parisian 1960s rebellion, has gone into liquidation. the business will be wound up after the search for a buyer failed. the brands late founder became known as the "queen of knits" — her trademark striped knitwear worn by celebrities including audrey hepburn. the chief executive of a birmingham school, which has been criticised by some parents for teaching about lgbt relationships, has told bbc news that the government pressurised her into suspending its equality programme. hazel pulley said she had felt totally compromised.
the government denies applying pressure, and says it has worked to encourage dialogue. 0ur correspondent sima kotecha reports. parkfield community school, four weeks there were protest outside of pa rents weeks there were protest outside of parents calling of the school to stop teaching children about different relationships. if they tell you when and how they should be taught... it's a quality programme called the outsiders and it involves storybooks of pictures of same—sex couples was not in much the school suspended the programme after protest escalated. now the woman in charge of parkfield says it has been a tough experience. charge of parkfield says it has been a tough experiencelj charge of parkfield says it has been a tough experience. i think there's only one word and from inside school looking out it has been horrendous. i have felt something rather isolated. she accuses the department of education for pressurising her to stop teaching about equality. the government has told me several times that it did not place pressure on parkfield. that is untrue. we
experienced extreme pressure to stop but we agreed on suspend the programme to stop no 0utsiders. we feel it was only with one aim and that was to keep the protest out of the paper and just off the protest. the department of education said nope 0sha had been applied on parkfield to stop teaching about equality. it added any suggestion or dispute should be kept out of the media, it was about bringing an end to the protest and ensuring tensions went further inflamed by sensationalist coverage. the plan is for all in england sensationalist coverage. the plan is forall in england to sensationalist coverage. the plan is for all- in england to teach for all schools in england to teach lg bt co nte nt for all schools in england to teach lg bt content from for all schools in england to teach lgbt content from next year. charlie and naga will have more on that story on breakfast at 6:00. this is the briefing from bbc news. the latest headlines:
leaders have rejected borisjohnson ‘s demand to remove the backstop. in a phone call with the new british prime minister after his first speech to uk mps, the commission president stressed the deal could not be changed. up to 150 migrants are feared to have drowned in a shipwreck off libya. the un refugee agency said that it's the worst loss of life at sea this year. around the same number of migrants were rescued and have been returned to libya. now it's time to look at the stories that are making the headlines in the media across the world. we begin with the heatwave reached its peak point yesterday. all across europe people were suffering under the astronomically high temperatures. the irish times headline proclaimed: you can see all the different countries and their respective temperatures there.
elsewhere, really heating up over in britain. borisjohnson vowed to deliver brexit by the 31st of october, but the eu has already brushed off his demand to re—nogatiate the backstop reached with theresa may. the daily express says: let's stay with the uk's new prime minister. borisjohnson spoke yesterday as pm for the first time in the house of commons. the independent headlines with: we will look into that one in a little. the german faz headlines with: ‘the eu commission is sueing hungary over asylum law'. i don't speak german, i've had that translated for me! the hungarian government is in breach of the eu charter over the so—called ‘stop soros' law that criminalises asylum seekers. the wall streetjournal