Markets move higher
Whether Donald Trump was right or not in his comments about the US stock market, there was no denying it was racing ahead today.
Even weaker than expected US fourth quarter GDP figures failed to hold back the Dow, which jumped to another new high of 26,497. Chris Beauchamp, chief market analyst at IG, said:
Fresh highs for US markets come as investors keep a close eye on the US president’s comments in Davos. Someone appears to have carefully written Mr Trump’s remarks with a view to making him more palatable to foreign leaders, reasoning that a more conciliatory tone will produce results.
The dollar recovered from its lowest levels, after being buffeted in the last couple of days by, firstly the US Treasury secretary seeming unconcerned about a weak greenback and then Trump himself talking about wanting a strong dollar. Connor Campbell financial analyst at Spreadex said:
Combined with Donald Trump’s uncontroversial Davos address, and a recalculation of Steven Mnuchin’s ‘weaker dollar’ comments after the very negative (over)reaction on Wednesday, the greenback actually reduced its losses against the pound from 1% to just 0.2%, while chopping down its decline against the euro to 0.3%, a third of what it was earlier in the session.
The recovery in the dollar helped give a lift to European markets, which ended the day (mostly) in positive territory. The final scores showed:
- The FTSE 100 finished up 49.70 points or 0.65% at 7665.54
- Germany’s Dax rose 0.31% to 13,340.17
- France’s Cac climbed 0.88% to 5529.15
- Italy’s FTSE MIB was 0.58% better at 23,856.99
- But Spain’s Ibex ended flat at 10,595.4
On Wall Street the Dow Jones Industrial Average is currently up 89 points or 0.34%.
On that note it’s time to close for the day. Thanks for all your comments, and we’ll be back next week.
Here’s someone happy with Donald Trump’s performance at Davos:
Heading back from a very exciting two days in Davos, Switzerland. Speech on America’s economic revival was well received. Many of the people I met will be investing in the U.S.A.! #MAGA
— Donald J. Trump (@realDonaldTrump) January 26, 2018
Here’s our report of Donald Trump’s appearance at Davos. Larry Elliott writes:
Donald Trump took his battle with the media onto the global stage when he used a speech in Davos declaring that America was open for business to accuse his press and TV critics of being mean, vicious and purveyors of fake news.
Part of the normally respectful audience of business leaders, politicians, academics and media representatives at the World Economic Forum responded to the president’s renewed onslaught on his media critics by hissing.
Speaking to a packed hall, the US president boasted of his record since entering the White House and stressed that there had never been a better time for firms to hire and build in the low tax and red-tape cutting economy he was creating.
Trump made his address as the latest US growth figures showed the economy growing at an annual rate of 2.6% in the final three months of 2017, weaker than the 3% Wall Street had been expecting.
“The world is witnessing the resurgence of a strong and prosperous America”, he said. “I’m here to deliver a simple message. There has never been a better time to hire, to build, to invest and to grow in the United States. America is open for business and we are competitive once again.”
The full report is here:
Here’s the verdict on Trump from the president of the Council on Foreign Relations think tank:
#Davos shows that @EmmanuelMacron and others in Europe have a vision for global efforts to meet common challenges but not the capacity--and @realDonaldTrump's America has the capacity to lead but no longer embraces the vision. The result is bad for Europe, the US, and the world.
— Richard N. Haass (@RichardHaass) January 26, 2018
Updated
The White House claims that Trump’s jibe at the media was received with laughter in the Davos hall:
Here’s their official transcript of the president’s remarks during the Q&A after his speech.
The other thing is, I’ve always seemed to get, for whatever reason, a disproportionate amount of press or media. (Laughter.) Throughout my whole life -- somebody will explain someday why -- but I’ve always gotten a lot. (Laughter.)
And as businessman I was always treated really well by the press. The numbers speak and things happen, but I’ve always really had a very good press. And it wasn’t until I became a politician that I realized how nasty, how mean, how vicious, and how fake the press can be. As the cameras start going off in the background. (Laughter.)
That’s not how we, or many other people in the hall, heard it.
Loud boos and hisses as @POTUS brings up “fake” news from the stage in Davos. He then moved on to another topic.
— Hallie Jackson (@HallieJackson) January 26, 2018
Updated
Back with the global economy panel, and Bank of England governor Mark Carney is asked about the path forward for monetary policy.
He begins by saying the nature of the recovery is stronger, broader and healthier. This is not a consumer boom led recovery.
As you get towards full employment, the pickup [in wages] should be there. There is that aspect pushing towards normalisation of policy.
The second element is investment picking up, savings down.
The third is the stance of policy as a whole of the G4, the members of the G7 practising QE. We’ve shifted collectively between 2013 to 2017 from bonds being taken out, to this year $1tn of net issuance, that should push up on rates.
You have a very tough judgement about where is the equilibrium rate of interest, which has been very very low and arguably should be raising a bit.
One has a sense of direction towards normalisation but we have to be patient and prudent in making those judgements.
Lastly, the UK is in a relatively unique situation, in that over the course of the next year as negotiations with EU progress, we will find out a lot more about what the supply capacity of the economy is , what right level of the exchange rate is, whether there will be tariff or other trade costs and how all of this effects demand. All those factors together will determinate the appropriate stance for monetary policy.
Carney is asked whether there is an asset bubble [caused by QE etc] which will burst and lead to meltdown. How likely is that on a scale of 1 to 10?
Carney admits the probability for an adjustment in asset prices has gone up [since prices have increased since the financial crisis]. The big question is whether the core of the financial system is in a position to amplify that in negative way. I would put that as quite low. The capital and liquid positions of institutions have been improved [since financial crisis].
Winnie Byanyima, Director of Oxfam International, says:
“President Trump’s boastful sales pitch was a victory lap for the trillions of tax cuts that the wealthy elites and corporations have clamored for. The evidence is clear: these tax cuts are looting the US treasury to enrich the 1%.
“Yes, global markets are breaking records, but gains are overwhelmingly going to the richest, while leaving the rest of the world to fight over crumbs.”
Davide Serra, the chief executive of asset management group Algebris, has welcomed Trump’s speech:
Summing up the broadly positive reaction to the Trump speech among business leaders @davidealgebris says: "I came in extremely short and I came out long; even if he only means half of what he said, it is very positive."
— Martin Arnold (@MAmdorsky) January 26, 2018
Heads-up: I’ve updated my earlier post about the stock market gains under Trump.
If you take the Dow from election night in November 2016 to today, it is up around 44%.
Since the inauguration it’s up 31%, but to be fair to Donald Trump the rally started straight after his election.
Still not 50%, but Trump’s claim isn’t too outlandish.
Donald Trump’s trip to Davos is over.
The White House press pool say that the US had an “uneventful motorcade to the Davos Landing Zone”
The president has boarded Marine One, ready to head back to Zurich.
Beatrice Fihn, Executive Director of ICAN (the international campaign to abolish nuclear weapons) says:
“Donald Trump just said we have to de-nuke North Korea. Rather than trying to threaten them with more nukes and make it more likely to use them, the best way he can make sure North Korea does not have nuclear weapons is to join the Treaty to ban those weapons.
That is how the majority of the world is moving towards nuclear disarmament.”
We instead call on ALL states to add maximum pressure to 'de-nuke' North Korea by signing and ratifying the Treaty on the Prohibition of Nuclear Weapons, not by amassing more nuclear weapons. #EndofNukes #nuclearban #Davos #WEF18 https://t.co/Cem67uThP9
— ICAN (@nuclearban) January 26, 2018
Trump’s right about one thing - the market has gone up a lot since the last election.
By one measure, it’s up by a third:
Trump at #WEF18: Had the Democrat won — the stock market is up almost 50% since my election — had the Democrat won, I believe you would have been down 50%. pic.twitter.com/vpmXK7ogZ0
— Holger Zschaepitz (@Schuldensuehner) January 26, 2018
Benioff: Stock market wouldn't have crashed under Hillary
I just spoke to Marc Benioff, the founder and CEO of Salesforce, about Donald Trump’s speech to the World Economic Outlook.
He says:
I thought it was a great speech. I thought his economic narrative has become greatly enhanced now that the tax cuts have passed.
The most important thing that happened this week is that six out of the G7 country leaders were here and that this multi-stakeholder dialogue that’s so important right now was enhanced by the World Economic Forum.
Q: Does America First really fit with a multi-stakeholder approach?
For the most part, what you see if what you get. Everyone knows what his policy is, and he’s fairly transparent about his positions.
Q: Would the stock market have crashed under Hillary?
No, I don’t think so.
Q: Are the media fake and vicious and mean and nasty?
Aren’t we all sometimes?
Lagarde warns on financial vulnerability, inequality and geopolitical risks
Christine Lagarde is asked what could go wrong, after the IMF forecast improved global growth of 3.9%.
She starts by saying the growth is well spread out, and we should celebrate the policies implemented by central banks.
What could go wrong? There is financial vulnerability, US tax reform will be positive in the short term but might lead to serious risks.
Secondly, the excessive inequalities which are growing in many places.
Thirdly, the lack of international co-operation and the geopolitical risks which could result.
Turning to the Bank of Japan’s Kuroda, he says the Japanese economy is expanding modestly in a well balanced manner. The 2% growth in the last seven quarters is a substantial improvement.
This is the second longest boom in the post war era. The economy is likely to continue its modest expansion.
..The deflationary mindset has been more tenacious than expected, so BoJ will continue to pursue powerful monetary easing with persistence under the quantitative and qualitative monetary easing.
There are various risks but from my perspective they are mostly external.
Updated
There is now a panel on the Global Economic outlook, with Haruhiko Kuroda, the governor of the Bank of Japan, Bank of England governor Mark Carney, Hong Kong chief executive Carrie Lam, IMF managing director Christine Lagarde and Mary Callahan Erdoes, chief executive officer of J.P. Morgan Asset Management. It is chaired by the FT’s Martin Wolf.
Updated
More on the US GDP figures, which came in below expectations in the fourth quarter. Economist James Knightley at ING Bank said:
US fourth quarter GDP has come in at 2.6%, a little below the 3% figure expected by the market, but this masks some real strength in the report.
Consumer spending was up 3.8% while fixed investment was up 7.9% and government spending jumped 3%. However trade was the surprise weak spot, subtracting 1.1% from headline growth after a surge in imports. This will recover and we doubt it will unleash a new wave of protectionist action from President Trump, who is sounding a little more conciliatory in Davos.
Inventories were also heavily run down, which subtracted a further 0.7% from GDP growth. This too will recover given very strong order books as highlighted by very good durable goods orders and bodes well for ongoing job creation.
We continue to forecast 3% full year growth for 2018. Strong domestic momentum will be boosted somewhat by tax cuts, while dollar softness puts the US in a great position to benefit from the global upturn in demand. We also see the growing potential for inflation to hit 3% in the summer as high energy prices, the unwinding of distortions relating to cell phone data plans, rising medical and housing costs and the potential for wage rises add to price pressures. Consequently, our current forecast of three Fed funds rate rises this year may be too conservative.
Dennis de Jong, managing director at UFX.com, said:
President Donald Trump will be disappointed today after the fourth-quarter GDP figures showed his initial targets have fallen short of the mark, but the US is still on a sound financial footing.
The Trump administration had targeted 3% growth but despite the latest figures falling below expectations, the President still has reasons to be bullish.
IHS chief economist: Trump could have been worse
Nariman Behravesh, the chief economist of consultancy firm IHS Global Insight, tells us:
It could have been worse, but he should have stuck to the script.
The prepared comments were fine. It was only when he got into the Q&A....
Not everyone agrees..
No fire, no fury. Trump’s address was one long sales pitch pic.twitter.com/Wq6aPQ07o6
— Joel Hills (@ITVJoel) January 26, 2018
Updated
Mnuchin: I thought it was fabulous.
The speech is over, and attendees are spilling out of the hall.
The US delegation are heading away in a bustle of security.
I grab a word with Stephen Mnuchin, the US Treasury secretary, and ask him what he made of it.
I thought it was fabulous. Great speech.
Some reaction:
No signs of anyone walking out in protest of @realDonaldTrump. If people boycotted, you wouldn’t notice. The room is full. @wef @Davos pic.twitter.com/9h9TRMrdBb
— M. Caruso-Cabrera (@MCaruso_Cabrera) January 26, 2018
So basically Trump just sold US, didn't say anything new. His attack vs "predatory behaviour" in trade relations was already present during Merkel's visit to the White House. His "America First does not mean America alone" was spoiled by his econ advisor Gary Cohn #wef18 #WEF2018
— Jorge Valero (@europressos) January 26, 2018
“The stock market, since my election, is up almost 50%” -Trump, when you take him off a TelePrompTer
— Felix Salmon (@felixsalmon) January 26, 2018
Updated
Trump: the media are nasty, mean, vicious and fake
Trump takes a swipe at the journalists at Davos, saying that until he became president he didn’t realise how nasty, how mean, how vicious and how fake the media are.
This prompts some boos and hisses - something I’ve not heard before.
Trump: "It wasn’t until I became a politician that I realized how nasty, how mean, how vicious and how fake the press can be.” The room boos.
— Niki Blasina (@NikiBlasina) January 26, 2018
The room boos and hisses @realDonaldTrump when he calls the press vicious, mean, and fake. Reaction from crowd instantaneous and robust. @Davos #WEF18
— Steve Clemons (@SCClemons) January 26, 2018
Updated
Updated: Is the stock market really up 50% under president Trump?
It depends how you choose to measure it. By my maths, The Dow Jones industrial average has gained around 44% since election night in November 2016.
Since Trump actually took office a year ago, the Dow is up 31% - but I think the president is right to include the bounce in November and December 2016.
I initially didn’t include that in my maths, so had a lower figure. Apologies.
Updated
Q: What experiences in your past help you to become president?
Trump says his business acumen - his ability to make money.
Then he claims that “if the opposing party to me” had won - the stock market wouldn’t be up 50%, it would be down close to 50%
People are listening in silence....
US economic growth disappoints
As Donald Trump is speaking and hailing his economic success, the latest US GDP figures have disappointed.
On an annualised basis the US economy grew by 2.6% in the final quarter rather than the 3% expected, down from 3.2% in the previous three months.
NF
Updated
WEF founder Klaus Schwab asks Donald Trump to expand on his tax reforms.
Trump begins by saying he had an enjoyable meeting with European business leaders last night (I think I have 15 new friends, he brags).
He says the tax cuts were “very tough politically”, but are creating a “brand new United States.
People have a lot more money in their paycheque, says Trump - even earlier than the administration expected.
We have hit 84 stock market record highs since I became president, Trump adds.
Trump says he told Apple’s CEO Tim Cook that he wanted Apple to start building plants in the US. In response, Cook said he’d make a “350” boost - I thought he meant million, not billion.
Trump adds that African American unemployment is at historic low, and women’s unemployment is a 17-year low. It’s ‘very heartwarming to see”.
Updated
Trump: Love and gratitude to the workers
We are all stronger when free, sovereign countries co-operate towards shared goals and shared dreams, says president Trump.
He then challenges Davos delegates, saying:
In this hall are national leaders, industry titans and many of the brightest minds in many fields.
You have an obligation to the people who put you in this position.
He ends with a tribute to the “hard-working people” in countries across the world.
Let us send our love and our gratitude to them, because they make our countries run, they make our country great.
That’s it. Onto questions.
Onto migration, and Trump says America needs a new “merit-based system” based on people’s ability to support themselves financially and help grow the US economy.
Updated
Trump says almost 100% of the land taken by Islamic State has been taken back, and thanks the countries who have helped.
Trump: We need maximum pressure to de-nuke Korea
Onto defence, and Trump challenges world leaders to spend more in defence.
Our common security requires everyone to pay their fair share
On North Korea, he calls for “maximum pressure to de-nuke the Korean peninsula.”...and support to “block Iran’s path to a nuclear weapon.”
Trump says he could negotiate a trade deal with the countries of the Trans-Pacific Partnership as a group - “if it is in the interests of all”
(reminder, he pulled the US out of TPP a year ago)
Otherwise, Trump says, the US will negotiate bilateral agreements with the countries in TPP.
We cannot have free and open trade if some countries exploit the system at the expense of others, Trump says.
Free trade “needs to be fair, and it needs to be reciprocal”
The US “will no longer turn a blind eye” to unfair practices, such as subsidies and pervasive state led economic planning, Trump continues.
big pitch for the US economy
— Chris Giles (@ChrisGiles_) January 26, 2018
But flat delivery. pic.twitter.com/9YOVi4zvpF
#Trump is pretty subdued, and sticking closely to what's on his teleprompter. @wef https://t.co/Ql88VVtxST via @business
— Marc Ostwald (@MOstwald1) January 26, 2018
Updated
I believe in America, Trump continues. I will put it first, just as other world leaders should put their countries first.
Trump is outlining how his tax cuts plan is helping the economy, by spurring investment and giving workers a pay rise.
Now is the perfect time to bring your business, your investment and your jobs to the US, he tells business leaders in the hall.
Trump now lays into ‘unelected bureaucrats’ for imposing anti-business and anti-worker regulations, saying:
Regulation is stealth taxation.
Trump: America is open for business
Trump hails the US economy, saying growth is strong, and the stock market is smashing one record after another. Business, consumer and economic confidence is the highest in decades.
The world is witnessing the resurgence of a strong and prosperous America, says the president.
I’m here to deliver a simple message, Trump continues - there has never been a better time to invest in America.
He says:
America is open for business, and we are competitive once again.
Trump begins his speech, saying I am here to represent the interests of the American people, and affirm our commitment to helping to build a better world, he says.
America wants to help build a world where everyone can prosper, and every child can grow up free from poverty and fear, he says.
Wow. Schwab says that Trump has suffered from misconceptions and biased interpretations - prompting some hissing from the audience.
Updated
Schwab says the world needs to balance the rebuilding of national social contracts, and strengthening the multi-national system to address issues such as terrorism and migration.
Sign up to our email
Guardian Business has launched a daily email covering all the news on Davos, Brexit and more.
Besides the key news headlines that you’d expect, there’s an at-a-glance agenda of the day’s main events, insightful opinion pieces and a quality feature to sink your teeth into each day.
For your morning shot of financial news, sign up here:
WEF founder Klaus Schwab says it is his great pleasure to welcome Donald J Trump to the closing session of this year’s meeting.
You can’t imagine how much we are looking forward to your speech, says Schwab (oh I suspect Trump can!).
Schwab congratulates Trump on his “historic” tax reforms, saying it will foster job creation and stimulate economic growth in the US, and a tremendous boost to the global economy. [no mention of concerns that the richest Americans will benefit the most]
OK, that was a bit weird. The band are marching off now, and trump is taking a seat.
Trump and Schwab are standing to attention on the stage as the band plays on....
Update: it looks like Trump might sit down with WEF founder Klaus Schwab for a chat after all.
Donald Trump really is getting the red carpet treatment.
A military band with trombones, clarinets, a tube and a really impressive drum have marched onto the stage, to serenade Trump on his arrival.
arriva #trump
— tonia mastrobuoni (@mastrobradipo) January 26, 2018
sorpresina! la banda
ehm
risatine nella sala strapiena del #WEF2018 pic.twitter.com/W9gFJZ2rBD
Ukraine’s president takes his seat....
Poroshenko getting a front row seat.
— Katie Martin (@katie_martin_fx) January 26, 2018
Donald Trump has emerged into the public area at Davos, down the staircase to a MASSIVE crowd of TV camera and reporters.
This Trump speech is the hottest ticket since Nelson Mandela (a very different world leader) visited Davos in 1992.
WEF’s cavernous hall, which holds 1,800 people, is full to bursting point.
No sign of president Trump, though. He’s still in a meeting room in a secure area of the complex.
I’ve been coming to WEF for six years, and this is the biggest crowd I remember seeing for a single talk.
Biggest crowd ever wants to see @realDonaldTrump in #Davos: pic.twitter.com/OAW1LlUgLG
— Stefan Leifert (@StefanLeifert) January 26, 2018
Of course, Trump is the first US president to visit WEF since Bill Clinton in 2000.
Had things turned out differently, Hillary would now be pulling a massive crowd - and probably being welcomed with warmer applause.
Earlier, the UK shadow chancellor, John McDonnell was pulling no punches. Larry Elliott writes:
[McDonnell] has used his debut appearance at the World Economic Forum to warn leaders of global businesses that they are held in contempt by ordinary voters who have struggled through a decade of austerity.
Interviewed by the Guardian in Davos, McDonnell said he found the euphoria in Davos about the modest pick-up in world growth shocking, adding that those running big corporations were guilty of complacency.
“You get the feeling that they are cut off in their compound from what people on the outside are feeling,” he said. “There is an ecstatic reaction to a turn in the economic cycle that was inevitable. They don’t understand the deep alienation.”
The full story is here:
Several rows at the front of the hall have been reserved for VIPs (or VVIPs, given this is Davos).
There’s a podium for Trump to speak from, but no comfy chairs on the stage. That’s a strong sign that he won’t be taking any questions.
Getting to watch Trump’s speech is like visiting a Premier League football match.
There’s lot of pushing and queue-jumping, plus an extra bag search before you’re allowed into the hall.
The bad news for those the back is that the hall is already two-thirds full.....
Davos delegates are splitting into two camps - those who are trying to bag a plum seat (any seat!) for the Trump speech, and those who are more concerned about lunch.
The queue to get into the hall is already massive, and the doors aren’t even open yet (media are being let in early).
At the other end of the hall, delegates are tucking into a spread of Middle Eastern food
The food is provided by the Saudi delegation, who are obviously most welcome at WEF despite their record on human rights and gender equality.
Strange symbolism at @wef. Saudi Arabia is hosting a lunch right before @realDonaldTrump speaks in @Davos. The country that produced fifteen of the nineteen 9/11-hijackers is serving kabsa, saleeq, jaresh and moufalq. #NeverForget pic.twitter.com/SCrLemdbhG
— Peter Hossli (@phossli) January 26, 2018
Looking ahead to Trump’s actual speech, Oanda market analyst Craig Erlam said:
[It] promises to be eventful. Trump is widely expected to push his America first agenda while making the argument for fair and reciprocal trade and claiming the country is now open for business.
The visit is clearly an attempt to pitch the country to business leaders following the recent tax overhaul while at the same time reaffirming the US’ position in the world and even perhaps clearing up some of the damage caused by recent unsavoury leaks.
1.5 hours to go until Trump speaks at #Davos people are already going in.
— Heather Long (@byHeatherLong) January 26, 2018
(That didn’t happen for any of the other speakers or world leaders) pic.twitter.com/8AQ8l7C7ky
Trump: NAFTA is a horrible deal
Just in: Donald Trump has given an interview to CNBC.
The US president says he came to the World Economic Forum to encourage firms to invest in America:
So when I decided to come to Davos I didn’t think in terms of elitists or globalists. I think I thought in terms of lots of people that want to invest lots of money, and they’re all coming back to the United States, they’re coming back to America. And I thought of it much more in those terms. After I said that I was going there were massive stories about the elite, and the globalists, and the planes flying in, and everything else. It’s not about that. It’s about coming to America, investing your money, creating jobs, companies coming in.
And on trade, Trump slammed the NAFTA pact:
I like bilateral because if you have a problem, you terminate. When you’re in with many countries, like with TPP— so you have 12 if we were in— you don’t have that same, you know, you don’t have that same option. But somebody asked me other day would I do TPP. Here’s my answer. I’ll give you a big story. I would do TPP if we made a much better deal than we had. We had a horrible deal. The deal was a horrible deal. NAFTA’s a horrible deal, we’re renegotiating it. I may terminate NAFTA, I may not. We’ll see what happens. But NAFTA was and I went around and I’d tell stadiums full of people, “I’ll terminate it or renegotiate it.”
"NAFTA's a horrible deal, we're renegotiating it. I may terminate NAFTA, I may not. We'll see what happens." - President @realDonaldTrump on NAFTA at #wef18 https://t.co/DJKhrpEg97 pic.twitter.com/zrA3jASiVe
— CNBC International (@CNBCi) January 26, 2018
Trump himself is continuing to hold meetings at Davos, as delegates wait for his speech in around 90 minutes.
On the fluctuations in the dollar, analyst Fawad Razaqzada at Forex.com said:
The dollar had been falling sharply in recent days until a sharp turn-around late in the day yesterday after US President Donald Trump said he wanted the currency to rise, as this would be a sign of strength in the US economy. [But the dollar] has now given up most of its gains again as market participants made a more sober assessment of Trump’s comments...Today, the dollar will have a chance to potentially make a comeback in the event US GDP also beats expectations... Even if the data disappoints, one could argue that the downside could be limited for the severely oversold dollar.
Here are more quotes from the UK’s shadow chancellor, John McDonnell, on why he’s ‘deeply interested’ in basic income (the idea that each citizen gets a minimum payment from the state).
“We’re considering it, we’ve got a working group....that will bring forward reports for consultation
“There’s a big debate around basic income or basic services and we’ll encourage that debate.”
Having a basic income would give people security, but also even in transitional phases in their life, would give them security as well.
“So I think it is worth examining.
Pound rises after UK GDP data
Sterling has moved higher following the stronger than expected UK growth figures.
The pound is now up 0.69% against the dollar at $1.4244, and is 0.22% better against the euro at €1.1432.
The dollar has been on a bit of a wild ride in the last couple of days, mainly due to comments from Davos. Treasury secretary Steve Mnuchin sent it lower after suggesting he was not really worried about a weak dollar, only for President Trump to express his desire for a strong dollar. That gave some respite to the greenback but it was fairly short lived. Investors are concerned about whether the US tax reforms will add to the country’s already hefty deficit, as well as the prospect of a trade war after Trump’s latest sanctions against South Korea and China on washing machines and solar panels.
The latest US GDP figures, due around the time Trump addresses the Davos audience, area likely to cause more fluctuations in the dollar. A slight fall from an annualised growth rate of 3.2% to 3% is expected.
NF
Updated
Trump has apparently been boasting to the White House press pack about his reception at Davos:
Trump bragged to reporters this am about his crowds, per pool: "We have a tremendous crowd, and a crowd like they've never had before...It's a crowd like they've never had before at Davos."
— Abby D. Phillip (@abbydphillip) January 26, 2018
POTUS is "very pleased" with his Davos reception, according to a senior admin official.
Trump’s got a point. There’s usually a flicker of interest as a world leader appears in the Davos congress centre (they’re usually flanked by aides, and whisked between meetings). But no-one else gets delegates crowding around for a glimpse - which I’m sure Trump absolutely loves.
John McDonnell also warned Davos that an ‘avalanche’ of public anger is building.
McDonnell says:
There needs to be a more thorough understanding of the past and what our people have gone through in the last 10 years, and the reaction to that.
Look at Brexit. There is an avalanche of discontent and resentment out there.
McDonnell also said he was “deeply interested in the concept of a basic income”, and that Labour was considering it.
McDonnell: People feel markets are rigged against them.
Labour’s shadow chancellor, John McDonnell, has criticised the Davos elite for their “extraordinary” optimism.
He told a debate on free markets that there is “Almost a sense of euphoria” at the World Economic Forum. He fears it’s also complacency.
I’ve come to Davos with a warning, McDonnell says, pointing out that many people aren’t feeling the benefits of the pick-up in global growth.
Out there, beyond the Davos compound, many people feel the markets are rigged against them, not for them.
I just warn the Davos establishment, there is an anger building that you have to deal with, McDonnell adds.
Trump: Mueller report is 'fake news'
As he arrived at Davos, Trump was also asked about the report he tried to sack special prosecutor Robert Mueller last year.
He responded by dismissing it as ‘fake news’, before heading into his secure meeting area, wishing ‘good morning’ to the throng.
DAVOS, Switzerland (AP) — Trump calls New York Times report that he ordered firing of special counsel Robert Mueller 'fake news' pic.twitter.com/HbRmohpxoA
— Meg Kinnard (@MegKinnardAP) January 26, 2018
Just in: Pres Trump responds to NYT report that he tried to fire special counsel Robert Mueller last summer. Trump: "Fake new folks. Fake news. Typical New York Times fake stories." The president delivers a major speech today at the World Economic Forum in Davos, Switzerland @ABC
— Kenneth Moton (@KennethMoton) January 26, 2018
Trump in Davos on NYT story that he wanted to fire Mueller: “Fake news folks, fake news.”
— Jim Acosta (@Acosta) January 26, 2018
DAVOS, Switzerland (AP) _ Trump calls New York Times report that he ordered firing of special counsel Robert Mueller `fake news'
— Ken Thomas (@KThomasDC) January 26, 2018
Updated
Here’s our story on the UK GDP figures.
In 2017 as a whole, the UK’s economy grew by 1.8% compared with 1.9% in 2016, the slowest since 2012.
Britain lagged other leading nations due to the impact of the Brexit vote pushing up inflation and businesses turning cautious on investment.
Updated
Donald Trump has arrived back at the World Economic Forum.
As yesterday, scores of curious delegates gathered on the balcony as the Trump team emerged from a secure entrance, and headed up the main staircase.
Reporters shouted a few questions -
The Donald #Trump urla alla sala del #WEF18 a Davos: “Billions of dollars are coming back to the US, we will just continue! Thank you everybody” pic.twitter.com/mfbYtgxmMY
— federico fubini (@federicofubini) January 26, 2018
Trump has now headed into a secure room at the congress centre (the same one he used yesterday to meet Theresa May).
@realDonaldTrump starts his Davos day with reporters pointing madly and the Donald giving the regal wave #WEF18 #he’sinside pic.twitter.com/p79R8APiFy
— Richard Griffiths (@richardgriffo) January 26, 2018
Year on year, the UK economy grew by 1.5%, compared to expectations of a figure of 1.4% and an annualised third quarter figure of 1.7%.
This was still the slowest growth since the first quarter of the 2013, however.
The Office for National Statistics said the underlying picture was of slower and uneven growth across the UK economy.
The boost to growth in the fourth quarter came from services and manufacturing, but consumer related sectors showed much slower growth.
NF
Updated
Davos has been tackling an significant issue this morning -- depression.
The session was organised with students of the Davos secondary school.
William Smith Stubbs a mental health campaigner and co-Founder of Spur:Labs in Australia, told the panel:
“My personal opinion is that no-one gets out of depression alone. We’ve created an artificial culture of ‘don’t talk about that’.
For me it was support of the family - had they not been here then I would not be here, but I didn’t talk about it.”
UK economic growth stronger than expected
Britain’s economy grew by a better than forecast 0.5%. in the fourth quarter compared to the previous three months.
Analysts had been expecting a similar figure to 0.4% growth recorded in the previous quarter, although there was a range from 0.2% to 0.6%.
NF
Updated
Security around Donald Trump’s speech will be ultra-tight today.
Journalists have been told that “no water will be allowed” inside the Congress Hall, and there’ll be extra checks on the door too.
Anyone who gets that far has already gone through one airport-style security check, but clearly they’re not taking any chances.
Carney: UK may 'recouple' with the world economy this year
Back in the UK, the governor of the Bank of England has said Britain’s economy might speed up this year - if we get some Brexit clarity.
The UK lagged behind other advanced nations last year, and the IMF predicts this will continue in 2018.
But Mark Carney (who is appearing on a Davos panel later today), suggested the UK could catch up with Europe’s growth rate this year.
He told Radio 4’s Today Programme:
“The world economy is accelerating, and we haven’t seen that yet.
“There is the prospect this year, as there is greater clarity about the relationship with Europe and subsequently with the rest of the word, for a recoupling – if I can use that term borrowed from Gwyneth Paltrow - a conscious recoupling of the UK economy with the global economy.”
With a nod to Gwyneth Paltrow, Bank of England governor Mark Carney says there will be a "recoupling" between growth in the UK and rest of the world later this year
— Fiona Walsh (@_fionawalsh) January 26, 2018
Carney has been pushing to get more women into senior positions at the BoE - maybe the founder of Goop is the answer....
Updated
UK journalist Piers Morgan seems to have secured an apology from Donald Trump, for retweeting several anti-Muslim videos last year.
There was widespread outrage in the UK last November when Trump shared tweets from the deputy leader of the far-right Britain First group.
Pressed on the issue by Morgan, Trump says:
“Perhaps it was a big story in Britain , perhaps it was a big story in the UK, but in the United States it wasn’t a big story.
If you are telling me they’re horrible people, horrible racist people, I would certainly apologise if you’d like me to do that.”
BREAKING NEWS:
— Piers Morgan (@piersmorgan) January 26, 2018
President Trump has publicly apologised for retweeting far-right group Britain First.
Says he didn't know who they were. 'I don't want to be involved with these people. If you're telling me they're horrible racist people. I certainly apologise.' pic.twitter.com/S1apSWC7rR
Trump: Why can't we grow as fast as India?
Last night, Trump met with the bosses of some of Europe’s biggest firms - including HSBC, SAP, Bayer and Nestle.
The group devoured salads, grilled beef tenderloin and fried Swiss pikeperch washed down with wine and water.
According to those in attendance, the group discussed Kanye West’s role in designing Adidas shoes, Volvo’s US-based Mack Trucks division, and Nestlé’s non-chocolate business portfolio.
A certain amount of false modesty may have been on display. At one stage, Trump remarked:
“When he says he works for Siemens, he’s the president of Siemens!...Wow, that’s big!....Good luck with the G.E. purchase.”
Trump also made some surprising comments about the US economy - suggesting it could be matching India’s growth rate (of around 9%).
“How can it be that the US is too big to grow at the same pace?” he pondered.
At tonight’s reception at Davos w/global corporate executives; Trump said he had spoken w/Indian PM Modi, who told him India’s economy was growing at 7%. Trump told the executives that if elected to a second term, he could deliver the same economic growth. https://t.co/hV91x2PfdE pic.twitter.com/I7567DrNfw
— Rebecca Ballhaus (@rebeccaballhaus) January 25, 2018
Despite his attacks on the world elite, Donald Trump and his top team have been enjoying their time in Davos.
The FT reports that two top Trump advisors sashayed into the Salesforce party (a hot WEF ticket).
Gary Cohn, Donald Trump’s chief economic adviser, and HR McMaster, the president’s national security adviser, were among the very small group of Davos merrymakers able to cut the line outside the Cabana nightclub where the Hawaiian-themed party was held.
It was par for the course for the Trump team in Davos. Moving and grooving with the global elite that Mr Trump railed against on the campaign trail, the president and his travelling party seemed to be getting their way. “He was exuberant,” the chairman of a large European bank said of Mr Trump.
More here: Team Trump cuts the line at coolest party in Davos
Inequality campaigners have brought their message to Davos:
Swiss allies disturb the night by literally shining a spotlight of truth to power on the #Davos mountain. “End the Age of Greed #FightInequality” pic.twitter.com/hKiGAayjeV
— #FightInequality (@FightInequalit1) January 26, 2018
The agenda: Trump to address Davos
Good morning from Davos.
It’s the final day of the World Economic Forum, and one man dominates the agenda.
President Trump will become the first US president to address Davos in almost 20 years this afternoon.
But what will Trump say? He could use the Davos spotlight to attack globalisation and promote his America First economic policies.
Alternatively, he could take a conciliatory approach, and try to repair relations with some of the many people he has offended since entering the White House.
There’s even talk that some delegates could stage a walkout during his speech.
Quartz: Davos attendees are quietly planning to walk out of Trump’s speech
Trump may have a lot on his mind; overnight, the New York Times has reported that he ordered the firing of special counsel Robert Mueller last June, but was dissuaded after the White House counsel threatened to resign:
Trump isn’t the only item on the menu, though. There are also debates on the state of the economy, free markets.
Here are some highlights
- 10.15am Davos (9.15am GMT): Will Free Markets Make a Comeback?, including Labour’s John McDonnell and business leader Katherine Garrett-Cox
- 11am Davos: A debate on central bank policy, including Benoît Coeuré, Ray Dalio, Cecilia Skingsley, Min Zhu and Axel A. Weber
- 2pm Davos: Special address by Donald Trump
- 3pm Davos: Debate on the global economic outlook, with Haruhiko Kuroda, Mark Carney, Carrie Lam, Christine Lagarde, Mary Callahan Erdoes
In addition, new growth figures are being released today, showing how Britain and America’s economies performed in October-December last year.
- 10.30am Davos (9.30am GMT): First estimate of UK GDP for the fourth quarter of 2017
- 2.30pm Davos (1.30pm GMT): First estimate of US GDP for the fourth quarter of 2017
Updated
