tv BBC Business Live BBC News July 26, 2019 8:30am-9:01am BST
this is business live from bbc news with maryam moshiri and victoria fritz. primed for growth — amazon sales jump as it pours millions into one—day delivery. live from london, that's our top story on friday 26th july. amazon has been spending heavily — $800 million injust three months to get more products to us even faster, but shares have fallen, we'll find out why. also in the programme, getting tough down under — australia tightens the rules for facebook and google‘s advertising products.
european markets, as you can see, have opened, and on the whole pretty flats. and how low can you go? signals of rock—bottom borrowing costs from top central bankers and global growth jitters. its been a busy week in news. we'll get the inside track from our friday editor. today we want to know — fortnite‘s world's cup, $30 million up for grabs, as a 15—year old brit reaches the final, are parents right to tell kids gaming is a waste of time? let us know — just use #bbcbizlive. hello and welcome to business live. we start with online retail giant amazon, because it 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 ofjust over $63 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 ten 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 investigation into whether
amazon is abusing its role as a marketplace provider. victoria. with us now is hussein kanji, a partner at venture capital firm hoxton ventures. thanks very much for coming in. i wonder whether you think amazon is really abusing its market dominance? it isa really abusing its market dominance? it is a hard one. it definitely has a lot of market power, and like most big companies it will exert that power, but in the end consumers benefit from lower prices, so the traditional behaviour sees customers suffering when prices go up, and thatis suffering when prices go up, and that is what we complain about with infrastructure, but in this case eve ryo ne infrastructure, but in this case everyone kind of wins, but amazon really wins in a big way. well, that is eight, it is not a traditional monopoly, so traditional monopolistic regulations do not appear to work with companies like these. do you think it actually can be curbed in any way? even if you
wa nt to be curbed in any way? even if you want to do! it is tough, i don't think we have the intellectual framework or regulators who understand these things, and there isa understand these things, and there is a lot of insecurity. these big companies, the banks are too big to fail, the tech companies are too big to control, and i don't know how you solve these things. do we even have the intellectual capacity to do this? these businesses are run by algorithms, they are run by ai, all sorts of things, this is a very tough one to control for ordinary governments. yes, and as i gets bigger and bigger, it governments. yes, and as i gets biggerand bigger, it gets governments. yes, and as i gets bigger and bigger, it gets more efficient, which lowers prices more. there is work being done in the us, folks who are actively thinking about this, and there is a discussion, but it is only nowjust beginning, may be in the last year. we are still in the early days of the intellectual thinking of what we need to do. and yet we have had yea rs need to do. and yet we have had years in which the tech titans were seen years in which the tech titans were seen as years in which the tech titans were seen as global gods, only now being pulled into the vortex of regulatory
woes. do you think that big tech will come out intact from all of this? i don't think any of us now, and the biggest problem is that ten yea rs and the biggest problem is that ten years from now, these chess pieces might completely change, because there might be something brand—new, so we there might be something brand—new, so we don't know. ten or 15 years ago, we worried about microsoft and intel, we don't worry about intel at all, and we do not know what the future is going to look like. the markets might just regulate themselves, that is what one side and the others are saying, these folks do exert quite a bit of market control, people are suffering from a lack of innovation, but in the end we are all benefiting, we all love amazon, prices are lower. lots of people woodside stifles innovation and put a cap on wages, a lot of wage pressure there as well. if you look more broadly across america, profits are broadly down, is that a concern for global investors? we are seeing a bit of slowdown, cheap money can only go so far to stimulate the economy, i think that
is the general criticism. china has already had a slowdown, so if these markets kind of sneeze, the world does catch cold, and as much as we wa nt does catch cold, and as much as we want the eu to be a big superpower in its own right, america and china really drive the global economy. thank you for coming in, have a lovely weekend. let's take a look at some of the other stories making the news. 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 including artificial intelligence. it says apple and microsoft have already pledged money to vision fund 2, as well as the topjapanese banks. shares of google parent company alphabet surged 9% in after—hours trade on better than expected second—quarter results. revenue for the three months to june jumped i9%, 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 largest coffee chain has been attracting more customers by revamping its menus and expanding the delivery side of the business. in australia, the government has said it is planning to tighten regulation of the likes of facebook and google to address the harm, they say, that large digital platforms can have on businesses, on consumers, and on the media. yes, hywel griffith is in sydney and has been following the story. first of all, australia is the first country, amorite, in doing this? it wa nts to country, amorite, in doing this? it wants to be at the forefront, doesn't it? absolutely, and it is addressing concerns that a lot of governments around the world are grappling with, how to deal with big multinational companies that don't really recognise traditional borders and a changing the way people act
and a changing the way people act and behave and do business. here in australia, 98% of people use google for searches, google and facebook control the vast majority of advertising revenue online, so it is no surprise that smaller companies are complaining about how they are, well, very much down the food chain and dependent on these companies that seem to be beyond regulation. so what practical change can happen? 0ne so what practical change can happen? one of the issues that they are looking at is how people's data is used, suggesting may be the control of data stays with the consumer, so people have to be told every time their data is used by another party, so their data is used by another party, so it is not continually onsold and not taken away from their control. let's ta ke let's take you through what the markets are doing. asian share prices fell on mixed us earnings reports. in particular, tech stocks fell.
tech has been on a bit of a rally over the past week, boosting the broader market, but now the falls have been hitting home, particularly on the neck area. the london market up on the neck area. the london market up ever on the neck area. the london market up ever so on the neck area. the london market up ever so slightly, vodafone, a big player, up around 8% after it laid out plans to separate its infrastructure in ten european markets into a new organisation that it potentially could list. investors like that news. michelle fleury has the latest from wall street. the us commerce department is set to release its gross domestic product report this friday. it will show what is happening with the us economy. wall street economists are forecasting annualised growth of 2% in the second quarter. but a strong gdp number could make the job of the us federal reserve, that's america's central bank, much harder. as things stand, the fed is expected to raise interest rates by 0.25% next week to boost a slowing economy. a strong report, however, would cast doubt over that. also, the earnings parade continues, with mcdonalds likely
to boast a rise in profits, as the fast—food chain's low—priced value meals attracted more customers. and in a busy week for technology earnings, twitter is likely to report a rise in revenue. joining us is simon derrick, chief markets strategist at bank of new york mellon. lovely to see you, you have brought the black background with you, i say! that matches the mood! let's talk about the pound, because it has a turbulent time but it is about to be calm? i think the calm after the storm, which is quite appropriate given the weather in london. yeah, obviously it has been a fairly wild ride over the last few weeks with the uk leadership election, finding out how we were going to go, but typically what you say over the summer typically what you say over the summer months is, in this period between parliament breaking up and coming back again, stirling tends to be very quiet, although given that
we are waiting to see what happens with brexit, there might be a few bumps, but quiet would be good for businesses and for holiday—makers, i suspect. exactly, everyone perhaps thinking about holidays abroad. let's talk about what is going on in the corporate world, an avalanche of corporate news from particularly the united states. it is not all been positive, has it? it is mixed, even those amazon results overnight, they still may swear they were hoping to get to. look, i think there is a very strong get to. look, i think there is a very strong sense get to. look, i think there is a very strong sense globally that we are at the peak of the cycle, the economic cycle. generally, the numbers are slowing down, china has had a sharp slowdown, in the uk growth has pretty much flattened out, and even in the us, which had a huge fiscal boost, starting to get the sense that we are right at the edge. when it really focuses us on what central banks are going to do
with this, the federal reserve, the us central bank, will probably cut rates, europe, we have already heard about that, and i think we have probably got a race to the bottom on interest rates and ge and things like that. that naim sliti is a power guest later in the programme, andrew walker, we will be talking about monetary policy. —— that nicely tease up our guest. iam going nicely tease up our guest. i am going to devon on holiday, what about you ? a i am going to devon on holiday, what about you? a beta on a girls trip! —— ibiza. still to come — flobal economic growth jitters to signals of rock bottom borrowing costs from top central bankers. it's been a busy week in news. we'll tap our very own economics guru later in the show. you're with business live from bbc news. half—year results are out later today from sport direct. the figures were delayed by the company because of issues
over its purchase of house of fraser and recent uncertainty. you say they will be out later today, but we don't actually know, because they were supposed to be out at seven o'clock this morning, and we have heard nothing from them. furious, i was on the phone to investor relations, where are they, sports direct? we need the results, we are doing an interview on this, but they have not been forthcoming. it is not going to stop us from talking about this company, because around the turn of the, the founder and newcastle united owner mike ashley described trading is unbelievably bad, and the share price has been plummeting as a result. david madden is from cmc markets. talk us through why this delay, what is going on here? essentially, about a week and a half ago we heard from sports direct that the numbers were going to be delayed until i that late july
going to be delayed until i that latejuly or into the middle of august, and then they would be out this morning, and now there is nothing from it, so no confirmation to say what time they will be out or whether they will be delayed again, and essentially delay on delay is not a good look. it suggested a company not a good look. it suggested a com pa ny really not a good look. it suggested a company really doesn't have its act together, and it is not going to instill investor confidence. no, it doesn't look good. shares are falling more than 2% on the fact that there is no news from sports direct, and the markets are under way. they are indeed, as i said, it doesn't reflect confidence in the firm, but especially this comes at a time when the owner, mike ashley, is gobbling up high street assets, most notably house of fraser, and it was cited as the integration of house of fraser figures into the group of sports direct was part of the reasons for the delay. 0n sports direct was part of the reasons for the delay. on top of that, tougher rules in relation to
regulatory and accounting issues, but also this comes at a time when the retail market and particularly the retail market and particularly the high street business is quite fragile, so investors are also concerned, are the numbers being delayed because of integration only or because there is even worse news potentially in the pipeline gemma 0k, david madden, thank you. just a quick update, we believe we will hear from them at nine o'clock, they will be briefing media and investors at nine o'clock. plenty more on the bbc news page. you're watching business live, our top story. amazon beefs up its delivery capacity, spending heavily to get more products to us even faster, but the spending spree weighs on profits. a quick look at how the markets are faring. actually, you know what? not too bad, pretty flat open after falls in asia in the trading session there that was kind of inherited from wall
street, they really caught a bit of a cold, to quote our amazon guest earlier on, about what is going on with america inc. nothing worse than a summer cold! it is worse than a winter cold, because in some out you want to be out enjoying life. from global economic growth risks to interest rate cut signals from europe and us central banks, it's been another busy week in news. we always say this! we are delighted and very lucky to have economics correspondent, privileged, a pleasure and a privilege, to have you, andrew, on the show. shall we start first with what is going on in america, how do you see it faring at the moment? it is ina it is in a period of pretty strong growth, and he did geta it is in a period of pretty strong growth, and he did get a boost from tax cuts, president trump's programme of tax cuts. the general view is that that impact is probably fading somewhat, and we are going to
get some economic growth figures in a few hours' time which are likely to be significantly slower. we had an annualised figure of 3.1% for the first quarter of the air, most people reckoning we will get 2% or a little bit below, which is still perfectly 0k, little bit below, which is still perfectly ok, but slower. partly the filing of the tax cuts, but also impact of the trade conflict which is affecting american exporters. we are also going to probably see a negative contribution from inventory, so companies had relatively strong first quarter in terms of the amount they were building up their inventory is, that kind of impact can't be sustained inevitably, and is likely to be reversed this time, so significantly slower growth. and displays into monetary policy. and indeed we have a meeting of the federal reserve next week, and there is a widespread expectation that they will cut interest rates, partly because of
these concerns about economic growth, but they have also mentioned, policymakers have mentioned, policymakers have mentioned renewed inflationary pressures . mentioned renewed inflationary pressures. at the ecb mario draghi talking about the economic outlook, making it clear that there could be a rate cut in september. indeed, and the ecb has also been talking about concerns that inflation is simply too low, that the persistent failure of the ecb to get inflation up to its target, which is below but close to 2%, and yes, very strong indications from mario draghi, the ecb president, that interest rates could well be cut. we talked about interest rates, the main rate is currently zero, and the rate on bank deposits is actually below zero. it is going to stay at or below current levels through the first half of next year. they are also looking at
other possibilities, like restarting quantitative easing, so clearly he is genuinely quite concerned about the outlook. and talking about the outlook and what might happen ahead, 2020 looking like a pretty precarious position according to the imf. for the global economy, yes! well covered, andrew! the imf put out a revised forecast earlier in the week, and there was a significant, small but significant downgrade in their expectations for this year and next, so they are now looking at expected growth of 3.2% this year, 3.5% next year. the wea kness this year, 3.5% next year. the weakness has got a lot to do with the trade conflict and technology conflicts between the united states and china, but interestingly they expect a pick up next year. at a large chunk of that is down to what they think will be an improvement in four extremely stressed developing economies — iran, venezuela,
argentina and turkey. and of course that really is pretty precarious, so the imf was saying there are very significant risks that even that pick—up next year. significant risks that even that pick-up next year. got plans for the weekend? starting my annual leave! i am going somewhere cold! provides good for you, enjoy your holiday. thank you. the finals of the fortnite world cup are taking place in new york. andrew walker is going to be a player! a0 million players have attempted to qualify over ten weeks of online competition, but only 100 finalists have a shot at winning the $3 million top prize, the biggest ever for an e—sports event. 0ur cyber reporter joe tidy is there. for two years, fortnite's unique brand of dancing, shooting and looting has brought gamers together online.
now it's time for the cream of the crop to meet in person for the first ever world cup. the prize pool is a record $30 million, or £24 million. the winner takes home $3 million and this trophy. some of the favourites are british, including 14—year—old kyle jackson from london. he's known online as mongraal. it's a lot more serious than people think. it's notjust playing the game for fun or whatever. you have to play, like, consecutive months a lot, every day. you don'tjust get here from chance. and what a stage it is. a0 million players tried to get here, but now less than 200 remain. it's a sell—out here at the arthur ashe stadium, with tens of thousands of fans expected over the weekend — and potentially millions more online. it's also a big moment in the maker of fortnite's history, as they can finally say they're a big player in e—sports. according to analysts, the global e—sports market will exceed the billion—dollar revenue mark this year.
despite fortnite being free to play, epic games makes hundreds of millions a month from in—game purchases. investing in events like this is a new avenue for them. the game has already made plenty of millionaire streamers. but for these players, it's already changed their lives. and with the prizes on offer here, some are dreaming of even bigger things. that's a lot of faces looking back at you, bro. joe tidy, bbc news, new york. we asked you to get in touch and tell us if you think parents are right to tell their kids gaming is a waste of time given the prize money? let's go through a view of your tweets. tim joyce says, absolutely, com plete tweets. tim joyce says, absolutely, complete waste of time. lix says, this is a hard decision, gaming is also an addiction,
is the money worth it in exchange for my childs well being? tried says the best can make money, but most careers are over by the age of 22, reflexes slow down, they will need a back—up plan. i have got to say, i was very into gaming, iused i have got to say, i was very into gaming, i used to play halo and max payne. i had a playstation, xbox and nintendo! what about you, simon? victory mighty mike monopoly was the last gamei mighty mike monopoly was the last game i played! what you make of all this? my son used to play these games all the time. what was your policy? it stopped him causing trouble elsewhere, to be quite honest, no problem at all, i didn't see how it was any different from when i was a teenager, playing records, bland and
obnoxious and your parents hated it, thatis obnoxious and your parents hated it, that is the whole point. isn't it a bit dangerous when you are talking about the monetisation in this, a bunch of children thinking that they are going to make millions from this? most i2—year—olds, they all know what this is about, they all wa nt to know what this is about, they all want to be part of this final. 0k, soido want to be part of this final. 0k, so i do understand that there is the issue of it being monetised, but the idea of people playing the games and enjoying them, i don't see what the issue is. i think that is what it comes down to. if you are offering monetary gains to minors, it becomes a little different, but the overall concept of kids wasting their time or enjoying themselves playing the game? 0therwise or enjoying themselves playing the game? otherwise i will invite you around to my hosting ten years' time! the story in the guardian business pages, unilever, interestingly, assign, listen, we wa nt to interestingly, assign, listen, we want to show that we are sustainable and are helping the planet, and it
could mean that we will lose some of our bestselling brands because they hurt the planet. we are talking about things like marmite and magnums. how do they hurt the planet? i think this is the big story of the day! i understand that they are talking about wanting their brands to be sustainable, quite right that is the case. they were talking about brands having to have a raison d'etre, well, for marmite, it is fantastic! what do you like about it? toast! what about with banana ? about it? toast! what about with banana? no, no... those rice crackers. other brands are clearly available! thank you very much indeed! wow! you never know where this programme is going to go, do you? that is the joy of your friday edition of business life. happy friday,
good morning. i'm sure you would've seen in the news that yesterday it was the hottestjuly day on record in the uk, the second highest recorded temperature, with 38.1 degrees celsius. now if you didn't like the heat, today it's going to feel much fresher. we've got a cold front which is moving its way in from the west, and that's just changing the direction of the wind, now coming from the southwest, bringing that cooler atlantic air, rather than the southeast, bringing in the hot air from the near continent. this morning, some heavy showers and thunderstorms across the south east of england. those mostly clearing away, but of course eastern areas of england up into scotland, there'll be a few showers, still this afternoon quite a bit of cloud. some bright, some sunny spells, and temperatures, 21 to 25 degrees celsius for many, but 27 to 30 celsius
in the south east. nothing quite as extreme as yesterday. now through tonight, we'll continue with some showers, and then spells of rain across these central eastern and northern parts into saturday morning. probably a more comfortable night for sleeping for many of us. temperatures about 13 to 17 degrees into the start of the weekend. so how about the weekend? well, we've got this weather front stretching from scotland down to the eastern side of england. that's going to stick around for much of the weekend, it's going to bring some outbreaks of rain for northern and eastern areas. that will also be around during sunday. it's going to feel much cooler as well over the weekend. temperatures down to about the high teens and 20s here saturday. that rain will continue on and off for much of the day. some of it could be quite heavy across scotland. best of the dry weather will be for northern ireland with some sunshine here. sunny spells too for wales, the west midlands
and the south west of england. the north—east of scotland also having a drier and brighter day. temperatures, though, about 17—21 degrees. the pressure chart into sunday shows that this weather front doesn't move very far. it's still there across the northwest of scotland down to the southeast of england, so again some heavy rain at times. north—east scotland again some dry weather. dry too for northern ireland, wales and increasingly sunny across the midlands, central, southern england and the southwest of england during sunday. temperatures of 17—23 degrees. these are more like the temperatures we'd expect to see this sort of that time of year, so not those extreme temperatures of yesterday. bye— bye.
you're watching bbc news at 9am, with me, annita mcveigh. the headlines. more pain for rail and air passengers this morning, as the extreme heat continues to cause disruption. plans to recruit an extra 20,000 police officers over the next three years. one of the most prominent tory brexiteers, steve baker, turns down a job in boris johnson's government. a game—changer — treatment for women with the hereditary form of ovarian cancer will be made more widely available on the nhs. tens of thousands of gamers gather in new york for the world championship of fortnite — with more prize money on offer to the winners than wimbledon. in sport, ireland's cricketers are within sight