Welcome, Jack Ma. Thank you. Thank you. We've all become very cognizant of Jack and his story. And when Alibaba went public with the largest IPO in history, we knew a lot more about him. So I want to talk about his personal story. I want to talk about how many times he tried and failed and what kept him going. I want to talk about where he is today and how he got here and where he is going and how he expects to get there. And if he gets there, what will it all mean for him and for the people that he wants to inspire? So I began with this question, though, Jack. Why are you back at Davos? It's a long break for seven years. I think my last trip here was year 2008. But I was coming for year 2001 for the Young Global Leader for tomorrow. And I think, remember, I never heard about Davos when I came. But when I came, in the Switzerland, so many young people demonstrated. It was such a horrible thing that I was, and I asked them, why did they do it? They say, anti-globalization. And I said, why globalization is a great thing? Why people don't like it? And then we come all the way for two hours here. There's a machine gun. There's people checking us. Is that a fallen or is that a prison we're going to go inside? But when I joined the fallen at the Young Global Leader, I was thrilled by so many ideas. For the first three, four years, I learned what does the globalization mean? What does the corporate citizenship mean? What about social responsibility mean? All these new ideas, and I see so many great leaders talking about leadership. And I benefit a lot. And in year 2008 and 2009, when the financial crisis came, I think it's better to go back to work. Because we can never win the world by talking. So go back, spend seven years. Now I come back, I think it's time to do something return. Because I learned so much 12 years ago. So why I should not talk into the Young Global Leader of today, shelling with them how we've gone through. So that was the thing. Let's start with where you are today. Just how big is Alibaba? How many people come every day? How many people come in a week? How fast is it growing? We have over 100 million buyers visiting our site, shopping on our site every day. And we created... 100 million every day. We created 14 million jobs for China directly and indirectly. And we grow from 18 people to 30,000 people, 18 people in my apartment to now we have four big campers. Compared to 15 years ago, we were big. But compared to 15 years later, we're still a baby. How big will you be 15 years from now? I think 15 years ago, I told my team that 15 years, in the past 15 years, we grow from nothing to this size. And 15 years later, I want people to see know about Alibaba, know Taobao, because it's already everywhere. I want 15 years ago, when we talk about what is e-commerce, why small business can use e-commerce, those internet can do business across the nation. And I hope 15 years later, people forget about e-commerce because they think it's like electricity. Nobody think it's a high-tech today. This is something that I don't want 15 years later. We still walk on the street talking about why and how e-commerce can help people. Talk about the IPO. Did it exceed your expectations? Well, it's a pretty small IPO, 250... Yes, the largest IPO in the history of Wall Street. Number two was a Chinese bank. Thank you. I remember, year 2001, we went to raise some five-minute, three-minute venture capitalist daughters in the USA and got rejected. And I say we come back raising some a little bit more. But I think what we think more about is for $25 billion, how we can spend the money efficiently, because this is not the money. This is the trust from the world. The trust from those people. They want you to do better jobs to help more people. They want to have a good return. So I think it gives me more pressure because when our market cap is bigger than IBM or suddenly we're bigger than Walmart, we're one of the top 10, 15 largest market cap companies in the world. I told my team and myself, is that true? We're not that good. Because years ago, people say, ah, Alibaba model is terrible. Does not make money, have this and that, all the big bad things because Amazon is better, eBay is better, Google is better. And there's no such model like Alibaba in the USA. So I told myself and people we were better than people thought. But today, when we are that big size, I said no, we are not that good as people thought. We're just a company 15 years old. Average age is 27, 28 years old, young people. We're doing something that human beings have never tried. I want to talk about the future. When you were born in Hangzhou, where the headquarters still are, and your campus is there. Don't move your loot. Your headquarters are there. You found their loot there. You grew up in the 60s. 64. Born in 64. That was the time of the Cultural Revolution. Yeah, it was the end of the Cultural Revolution. Well, my grandfather was a tiny landlord. After liberation, he was considered to be a bad guy. So I know how tough it was when I was a kid. You tried to get into three colleges. Each time they rejected you. No, I tried. There's examination that young people, if you want to go to university, have to take the examinations. So I failed three times. But I failed. Funny thing is that I failed a key primary school test for two times. And I failed three times for the middle school. Middle schools. And you would never believe in Hangzhou, my city, there's only one middle school that lasts only one year. It was changed from primary school to middle school because our graduates of our school no middle school accept us because we were too bad. They would become a middle school. What effect did it have, though, being rejected? Well, I think we have to get used to it. We're not that good. Even today, we still have a lot of people reject us. I think when I graduated from universities, and for three years I tried to fail in the universities, so I applied jobs for 30 times, got rejected. I went for a police. They said, no, you're not good. I went to even the KFC. When KFC came to China, come to my city, 24 people went for the job. 23 people accepted. I was the only one guy. And we went for police. Five people, four of them accepted. I was the only guy that I received it. So, to me, being turned down, rejected. Oh, by the way, I told you that I applied for Harvard for 10 times rejected. I know I'll be rejected. They're sorry now. Ten times you wrote them and said, I'd like to come to Harvard. Yeah. And then I told myself, someday I should go teach there, baby. I think that can be arranged. Richard Nixon came to Hangzhou. And after that, tourists flooded the place. And that's how you learned English. Yeah. I really like the... I don't know why, 12, 13 years or so, that time I suddenly fell in love with the language, the English. And there's no place you can learn English at that time. There's no books, English books. So I went to the Hangzhou Hotel, now called Hangzhou Shangri-La Hotel, because that was the hotel that can receive the foreign visitors. So every morning for nine years, I showed them around as a free guide. And they told me English. And I think that changed me. I'm 100% made in China. I've never got a one-day train outside China. Yeah. And people, when people talk to me, say, Jack, how can you speak English like that? Why sometimes you talk like Western guys? I think that was the nine years. These Western tourists opened my mind. Because everything they told me are so different from the things I learned from the schools and from my parents. So now I have a habit. Whatever I see, whatever I read, I use my mind. Think about it for two minutes. Is that how Ma Jun became Jack Ma? Actually, Jack, the name was given by a lady in tennis. She's a tourist that she came here. And she said, she came to Hangzhou. We become a pen friends. Ma ring is so difficult to pronounce. So she said, do you have an English name? I said, I don't. So can you give me an English name? She said, okay. I said, my father called Jack, my husband called Jack. What do you think about Jack? I said, good. So I've been using that for that many years. First visit to America in 1995? 1995, yeah. I've come here for a project helping the local government to building up a highway. And you tried the internet? I tried the internet in Seattle. And in a building called the US Bank. I don't know whether the US Bank is still there or not. But there's a building. And my friend opened a small office which is only 10% bigger than this room. There are a lot of computers in there. And he said, Jack, this is internet. I asked, what is internet? He said, search whatever you want. At that time, they used Mosaic. Very slow. And I said, I don't use it. I don't want to type because the computer is so expensive in China. If I destroy it, I cannot pay. He said, just search it. So I searched the first word, beer. I don't know why because it's easier to spell, baby. And I see beers from Germany, beers from USA, beers from Japan. But there's no beer from China. And I said, okay, type the second word is China. No data. Nothing. Nothing. 1995. 1995. No data about China. So I talked to my friend. Why not make something about China? So we made a small, very ugly-looking page called China. It's something like I did at translation ages and we listed on there. It was so shocking. We launched at 9.40 in the morning. At 12.30, I got a phone call from my friend. He said, Jack, you know, you got five emails. I said, what is email? And they said, these are the things. People are so excited. Where are you? This is the first time I see a Chinese website on that. How can we kind of, can we do something together? So I think this is something interesting. So we should do it. Why did you call it Alibaba? Alibaba? Well, when I started, I think Internet is global. We should have a global name. And a name that's interesting. At that time, the best name is Yahoo. So I've been thinking for many days, suddenly, Alibaba is a good name. So I was happened to be in San Francisco that day. I did have a launch and a waitress came. I asked her, do you know about Alibaba? She said, yes. I said, what is Alibaba? She said, open sesame. Good. So I went on the street to ask about 10, 20 people. They all know about Alibaba, 40 sieves and open sesame. And I think this is a good name. And started with A, whatever you talk about, Alibaba is always top. You have said before that in creating Alibaba, you had to create trust. Yeah. Because people in China were used to face to face. How did you create trust? I think because we started doing business on the internet, I don't know you, you don't know me. So how can you do things online unless you have trust? So for e-commerce, the most important thing was trust. I think when I first went to USC for raising money, talked to the venture capitalist, a lot of people say, oh, Jack, no, no, no, no, no, no. China doing business by the guanxi. How can you do business on the internet? And I know that without the trust system, the credit system, it's impossible to do business. So we, in the past 14 years, everything we do is trying to build up the trust system, the record system. Well, Charlie, you know, I'm so proud of today when I talk to the young, today in China and in the world, people don't trust each other. The government and people and media and everybody, this guy is cheating. But because of e-commerce, we finish 60 million transactions every day. People don't know each other. I don't know you. I send products to you. You don't know me. You wire the money to me. And I don't know you.  I don't know him. He took something to sow across the ocean, across river and sand. This is the trust. We have at least a 60 million trust happening every day. But you created it by creating an escrow account in the beginning. Yeah. And so you keep the money until they got the product. Yeah. And then you release the money. That's true. I mean, the escrow service is about Ali paid. When I had this idea, I would have loved Davos. Because it was a big decision. Because for the first three years, Alibaba is just like e-market places for information. What do you have? What do I have? We talk a lot of time, but don't do any business. Because there is no payment. I talk to the banks. No banks want to do it. Banks say, oh, no, this thing never worked. So I don't know what to do. Because if I start to launch a payment system, it's against the financial legal laws. Because you have to have a license. But if I don't do it, e-commerce will go nowhere. So then I went to Davos. I listened to a leadership discussion. Leadership is about responsibility. And after I listened to that panel, I gave a call to my friends, my colleagues in my apartment and said, do it now, immediately. If something wrong, the governor happy about that? If one body has to go to the prison, Jack Ma go to the prison. Because it is so important for China, for the world to build up the trust system. And if you did not do it, I said, and do not do it properly, stealing money, money wash, no trust record, I send you to the prison. So that was the thing. And people don't like it. So many people I talked to at that time for Alipay, they say, this is the stupidest idea you have ever got.  Now we have 800 million people using this Alipay. Stupid things if you do it better. But Alipay is a privately held thing. It's not part of Alibaba. Let me talk about money for a second. You have never gotten money from the Chinese government? No. None? I want at the beginning, at least I don't want it, because I think if the company always think about picking money from the government of pockets, that company is rubbish. Think about how can you make money from the customers and market and then help customers succeed. You don't want money from Chinese banks? No. At that time I want, and now they want to give me, I don't want it. Your relationship with the government? Yeah. What's your relationship? Here's what some say, that you have existed in an environment that they have restricted competition for you. And that's a pretty good thing to do for a private company. Yeah. I think the relationship with the government for us is very interesting. For the first five years, because I've been working as a part-time job for a government organizational ministry of foreign trade, 1997 for 14 months. And I learned that you should never rely on government organizations to do e-commerce. And I started business, I told my people and team, I've been in love with the government, but don't marry them. Respect them. And a lot of people say, well, you know, government officers talking to the internet, the censorship and this, that and the worry about, I think it's the opportunity, it's the responsibility, talking to them, tell them how internet can help. So you tell them we create jobs? Oh yeah. I think a lot of people fight and fight against them. And in the first 12 years, anybody come to my office, I sit down talking to them how we can help economy, how we can create jobs, why China will improve by the internet. I think because internet at that time is new to any government. And if you convince somebody, and you have the chance. So today I'm very talkative, probably this is why I talk to so many people. So I mean, the government comes to you and ask you to do something for them. Normally, when government comes say, Jack, can you do this project? I say no. I can introduce some friends who are interested in doing that for you. But if they continue to want me to do it, I say, okay, I do it, but I don't want, I don't charge. I hope next time don't come to me again. But recently, we have some government organizing to do it. For example, every spring festival, the train station, the train ticket is so difficult. Hundreds and thousands of farmers work in the cities, in the spring festival, they go to the hometown. But when they order tickets on the, on the, the other way, the whole system crashed. For five years, so I told my young people, go support them. Don't charge anything because I don't want to see millions of farmers go back to city and they cannot buy the tickets. So it's, it's something that, it's not for money. It's something that, it's not for the government. It's for the millions and millions of people. They can buy tickets in a snowy night and they don't have to wait. They just buy, use mobile phone online, they get ticket. One way stop along the route to where you are and that big IPO was Yahoo. Jerry Yang gave you a, invested a billion dollars. A billion dollars. It turned out to be a pretty good investment for Yahoo. Yeah. But one time after another, you raised this money on your own outside of China with investors. Yeah. I'm very thankful for all the investors because 1999, year 2000, even at the Yahoo time, a lot of people say this Jack is crazy. He's, he's doing something that we don't understand. A lot of venture capitalists give you money because there is such a American model already there. But they say, Alibaba, we don't see this kind of model. Right? They say Jack's crazy. Yeah, this is crazy guy. I mean, I remember my first time in Time Magazine.  And I, I think crazy is good.  We know what we are doing. But if everybody agree with me, if everybody believe my, our idea is good, we have no chance. So that's the money we raised. We are very thankful. So when our investors make a lot of money, I feel proud and honored. As you know in the United States, issues have risen about privacy. Yeah. Google and Apple, and questions of whether the government should have access to files. How do you handle that if the Chinese government says you know a lot about people? Mm-hmm. You have transactional relationships with lots of people. Mm-hmm. And they say, we want to see your files. Well, so far, I don't have this kind of problems of our Chinese government. And I told them, any government if you come here for the national security anti-terrorist, or anywhere anti-terrorist, we work together. It's a criminal. We work. The rest of that? No. I said we are business. The data is so precious. Because we don't know how. Because if we give to anybody, it's going to be a disaster. And also about privacy issues. I think, just like hundreds of years ago, people say, I would rather put money under my pillow rather than putting in the banks. But today banks, especially, they know how to pre-care money much better than you do. Privacy issues, all these kinds of securities, today we may not have the solutions. We don't have the answer. But I believe our young people have the solutions. In the next 10, 20 years, there will be breakthrough on that. And I'm fully confident on that. Your life is a testament to the idea that nothing is impossible. That if somebody says no, you say it's just the beginning. Where does that come from? Well, at the beginning, I never thought, I thought when I was young, I said everything's possible. Now I know, not everything's possible. When you have something, you have to think about, you have to consider about the others. You have to consider about the customer, society, your employees, your shareholders, so there are so many things that I think if you continue to work hard, there's possibility. And I just feel that I'm enthusiastic about what we are doing. At the beginning, for the first five years, I just want to survive. And five years later, I think... That's 2000, from 90 points. But later, I think, wow, so many people's lives changed. I was so excited. For the first three years, we made zero revenue. Zero revenue. But we are so excited to continue to work. You know what happened? I remember many times when I go to a restaurant, I have a dinner. When I was trying to pay the bill, the owner of the restaurant came to say, sir, your bill is paid by someone. And a small note said, hey, Mr. Ma, I'm your customer of Alibaba Group, Alibaba platform. I made a lot of money, and I know you don't make any money. I pay the bill for you. And I remember one thing. One day that I was sitting somewhere in the coffee, somebody's sending me a cigar. I don't smoke cigar. But there's a note that, thank you very much, I'm your customer. And I remember in the top of the days, I was at the Shangri-La Hotel in Beijing when I got on the taxi. A man who opened the door for me, the boy at the gate, he said, Jack, thank you very much. My girlfriend makes more money than I do on your site. And this is something that you know that it's not mission... If you don't do it, nothing's possible. If you try to do it, at least you have the hope. The revenue comes from advertising in a smaller amount from transactional fees. Most of it from advertising. Tiny. Tiny from advertising? Tiny from advertising, tiny from transactions, because we need big mass. Now we have more than 10 million small businesses, power sellers selling our site to everywhere. So the big transactions we have is second after Walmart. So tiny... Second after Walmart. Tiny of the transact, of the money, are really big as big. So, you know, we... second after Walmart, I remember one of the senior management of Walmart, guys came to Hangzhou five years ago. He said, Jack, you know, you did a great job and blah, blah, blah. So I said, maybe in 10 years we'll be bigger than Walmart. He said, young man, you have a good hope. So we said, I'll make a map. I think in 10 years we'll be bigger than Walmart on the sales, because if you want to have 10,000 new customers, you have to build a new warehouse and this, that. For me, two servers. What's your market cap versus Walmart today? I don't know. It's close. I think so. Maybe we should check later. All right. So where are you going? What does Jack want? I think because the name for Alibaba, we are an internet company, happened to be in China. We have the same spirit and entrepreneur spirit like every great entrepreneur in the world. And I remember the day when I said Alibaba, we want to have a mission, helping small business doing easier. So next step is today, so many millions of small business using our platform to sell things and over 300 million consumers buy things from our site. Cheapest, efficient. So what I'm thinking about, how we can make Alibaba a platform for global small business, my vision is that if we can help Norway small business can sell things to Argentina and Argentina consumers can buy things online from Switzerland. And we can build up, which I called, I don't know, maybe the not right word, called EWTO. The WTO is a great past century, but WTO have so many big companies to sell things across the nation. Today internet can help small business sell things across the oceans, across the nations. And I hope that we can serve two billion consumers. Two billion consumers. We can help 10 million small business outside China. Outside China. Because we help the American farmers in Washington state almost 300 tons of cherries to China last year. Cherries. When we, before we sell, the ambassador of USC came to me and said, can you help us selling cherries? What's cherries and the fruits? He said, why not? I said, why not, let's try. So that when we order, when we start to sell cherries, the cherries still on the trees. So we started pre-order 80,000 families order cherries online. So we picked up the cherries and shipped them to China. Within 48 hours we sell the cherries. The consumers are so happy. And we got a lot of letters complaining after three days. They say, why only 100 tons? Why we should not get more? So we sell, you know, two months ago we helped the Costco. We sell 300 tons of nuts to China. So I'm thinking about if we can sell, we're also selling Alaska seafood to China. So if we can sell seafood, if we can sell the cherries, why we cannot help American and European small business selling things to China consumers? China needs that. So this is what I want to do, is that two billion consumers, China, Asia, developing nations, how we can let them buy things globally. Alibaba rode with the millions of people that went from poverty to the middle class in China. I mean, you were right there growing as they grew and increased. When you look at the international markets, you're doing well in Russia? Yeah. How well? We do pretty good on Russia. We do also pretty good in Brazil. In Brazil? Russia, I think, if not the number one, we had the number two or number three largest e-commerce. I remember last year, we had a campaign. The campaign is that a lot of Russian girls and boys want to buy things from China. You know how many days a Russian girl put a place in order and received the products from China? Two years ago, four months. Even that, people are so happy about all the things. And lastly, the campaign, within one week, we crashed the whole logistics system of Russia. You were also seen in Hollywood. What are you doing in Hollywood? Well, I like the Hollywood innovation and the digital background. I learned so much about the Hollywood movies, especially the Forrest Gump. I love Forrest Gump. Why do you like him? Simple. Never give up.  And I was very depressed the day, a year 2002 or 2003, in the States. When I, oh no, no, no, we're earlier than that. I could not find a way for the internet. And I watched the movie in my friend's home, Forrest Gump. When I see him, I think, this is the guy we should learn from. Believe what you're doing. Love it. Whether people like it or don't like it, be simple.  You never know what you can get. I never know I would be here talking to you and talking to Charlie Rose. I never know. And I made it. I told my people in my apartment 15 years ago, guys, we have to work hard. Not for ourselves. If we can be successful, 80% of the young people in China can be successful. We don't have a rich father, powerful uncle. We don't have one daughter from bank, one son from government. Just work as a team. So what do you worry about? A lot of young people lose hope, lose vision, and start to complain. We also have the same period. It's not a good feeling being rejected by so many people. We also depressed, but later we find that the world has a lot of opportunity. How you see the world, how you catch the opportunity. In the Hollywood, inspiration. But you're out there for business. You're out there because you want to make movies and sell them. I want to make the movie for business-wise. We are e-commerce company. We have a lot of products that need logistics. But movie, TV, these are things that you don't need a logistics system. And movie probably is the best product that can help you. One thing I told the Chinese people, my friends, in American movie, all the heroes at the beginning they look like a bad guy. Terrible things coming, they become hero. And finally they all survived. China, if you don't move hero, all the hero died. Because only that people become the hero. Nobody wants to be the hero. You want to change the definition of hero? Today we have so many heroes living this world. Are you still writing these kung fu novels or are you just reading them? I read them and I start to write something. I think to find kung fu is something you start to think about something that you cannot do. But if you have some luck, if you continue to practice, if you got a good master, if you're a good team, you're an expert. So at least to make me when I'm busy, when I'm tired, frustrated, I read books. You also travel with a tai chi. Am I saying that right? A trainer. Tai chi. What does that do for you? I love tai chi. Tai chi is a philosophy about in any young. Tai chi is about how you balance how you work, like a competition.  It's a great company. Tai chi is like you fight here, I go over there. You put it on the top, I go to down. It's my balance. You are heavy, I'm small. When I'm small, I can jump. You're heavy, I cannot jump. Tai chi is a better philosophy. I use in tai chi philosophy in the business. Calm down. There's always way out. And keep yourself balanced. And meanwhile, don't try to, business is a competition. Competition is a fun. Business is not like a battlefield.  Business, even if you die, I'm not a win. Right? So it's about fun. So tai chi gives me a lot of inspirations.  And you are changing the world. In fact, you provide a forum for buying and you enable people to earn a living. But also, you believe that Alibaba ought to change the lives of women. So what are you doing? First, I think many years ago I want to change the world. Now, I think if we want to change the world, we change ourselves. Change ourselves is more important and easier than change the world. And second is that I want to improve the world. Because to change the world may be Obama's job. Because my job is to making sure that my team are happy. Because my team are happy, they can make my customers happy. If my customers, they are all small business. When they are happy, we are happy. About women, one of the secret source for Alibaba's success is that we have a lot of women. What percentage of women among Alibaba's boys? I think two or three months before we IPO, there is an American journalist company. She asked me a question. Check, I've seen so many women in your company. I said, what's wrong? We have a leader, we find that, we have 47% of the employees of our company are women. 47% of our company are women. And we actually had a 51% because we acquired some company these days. They have a more man, so balance that. But these are women in top level positions? 33% of the management are women. And 24% of the senior management, very top level are women. We have a women CEO, CFO, CPL chief people officer, and we have everywhere. I'm comfortable working with them because women, in this world, if you want to win in 21st century, you have to making sure that making other people powerful, empower others, making sure the other people better than you are, then you will be successful. So I find the women they think about the others more than they think about themselves. Women think about the kids, husband, parents, much more than the man. This is a friendliness. A couple of things I want to talk about before we go because we have less than a couple of minutes. China today, are you worried the economy slowed down? No, I don't worry about it. I think China is slowing down is much better than keep on 9%. China today is the second, the largest economy in the world. It's impossible to keep 9% of the growth. If China still keeps the 9% of the growth of the economy, there must be something wrong. You will never see the blue sky. You will never see the quality. China should pay attention to the quality of the economy. China should not. So if we have a lot of inference, like Hollywood movies things, and we have sports and these things in the GDP will be much better. So I think just like a human grow, this body can never grow, grow, grow, grow.  I think China is moving to that direction. And you saw Modi in India? Pardon? Did you see Modi in India? Not yet. I'm looking forward to that. You'll go to India. Finally, there's this. You're one of the world's richest people. Your company is one of the world's richest companies. What do you want beyond Alibaba? Well, by richest people I was, I told myself I was really not happy in the past three months when people say Jack Ma is the richest people of China. Global celebrity, they said. No, I'm not. I'm not. When I start the business No, you are. You are. I never thought because how many, yeah, maybe I am, but I think 15 years ago in my apartment my wife was at that time one of the 18 founders. I asked her, do you want your husband to be a rich person? I never said rich person in China.  She said of course respected because she never believed and I don't believe we'll be rich people. We just don't want to survive. I believe we have one million dollars. That's your money. We have 20 million dollars. You start a problem. What about infrashing? Where we should start to buy and this, that's how it comes. When you have one billion dollars, that's not your money. That's the trust society give on you. They believe you can manage the money using the money better than the government and the others. So I think today I have the resources do more things. With the money we have, with the infras we have we should spend more time on the young people and I would say someday I'll go back to teach go back to school spend time with the young people and telling sharing with them what I do. So the money is not mine. I just are happily and having this resources and I want to do a better job. Just tell them your story. Yeah, tell them your story and tell them that if Jack, I don't think in this world a lot of people be rejected more than 30 times.  We don't complain. Whether you are successful or not successful, I find that one person, when they finish the job, if they make the mistake, if they fail, if they always complain this guy will never come back. If the guy only check himself, yeah something wrong with me here, something wrong with me there, this guy has the hope. Jack, on behalf of everybody in this audience and a television audience around the world thank you for taking your time to be with us. Thank you.


Hello, and welcome to this session. This is Professor Farhad. In this session, we would look at actual CPA questions that were released from the AI CPA. The reason I say actual is because the AI CPA is the organization that administered the exam. Therefore, those questions were actual questions appeared on the exam. They may appear in one way or another, but the point is if you know how to approach these questions, you'll be ready to approach the actual questions on the exam day. And the format will be the same format as the actual exam. Specifically, we're gonna be covering BEC questions. As always, I would like to remind you to connect with me only then if you haven't done so. YouTube is where I house all my lectures, 1,600 plus accounting, audit and tax and finance lectures. This is a list of all the courses that I cover, including thousands of CPA questions. If you like my lectures, please like them, share them, put them in playlists. If they benefit you, it means they might benefit other people. On my website, you'll have access to additional resources such as PowerPoint slides, notes, true, false, multiple choice. And if you're studying for your CPA exam, 2,000 plus CPA questions, I strongly suggest you check out my website if you are seriously studying for your CPA exam. Let's take a look at the first question. An analyst expect a company to pay a dividend of $5 with a dividend growth rate of 3%. The inflation rate is expected to fall from 5% per year to 3% per year, okay? As a result of the change in this inflation premium, which is premium going down, the companies will, what happened, what to the company? So notice here, they're even talking about the stock. So two answers has the stock price. Two answer has the cost of equity. Now let me tell you something. You cannot really predict anything about the stock price. So as a result of changes in inflation, you don't know what's gonna happen to the stock price. The stock price could increase. The stock price could remain stable. I would say I would immediately eliminate the two answers about the stock price. Again, because you cannot really make any projection about the stock price, whether it's gonna go down and remain stable because inflation could affect each company differently. For some companies, inflation go down, could benefit the company. Sometimes inflation goes up, could benefit the company. So we cannot say anything about inflation. Now we're down to 50-50. So it must be something to do with cost of equity. Cost of equity. Would the cost of equity likely to remain stable or would the cost of equity likely to decrease? That's the question here. Now, I want you to think about it. When we looked at the interest rate, remember, the interest as inflation goes up, we have to pay more. The cost of money goes up because inflation, the cost of everything goes up and the money is a commodity. So the cost of the money goes up as inflation goes up. What is happening here? What is happening here? Well, what's happening here? Inflation is going down. As the cost of the money goes down, as interest rate goes down, therefore the cost of equity, the cost of the stock will also go down because the premium, let me see if I can kind of show you this on a graph or in some type of format. So you will see this. So let's assume we have inflation of 5%. This is the inflation. Well, guess what? Now, the interest rate, the interest rate, when the cost of debt has to be more, you have to pay, let's say 8%. Why? Why? Because when you borrow money, you have to pay the lenders. This is the debt cost of debt. Debt, the cost of debt is 8%. What does that mean? It's mean you are paying 3% premium over inflation to borrow money. Now, we know for the fact that the cost of equity, now for equity you have to pay an additional premium. So if you want to buy equity, you want to raise money from equity, you might have to pay, let's say 15%. This is the cost of equity and this is 7% above the cost of debt. Now, here's what's gonna happen. If this line, if the inflation goes down as they're saying here goes from 5% to 3%, what's gonna happen? The cost of debt should go down by approximately 2%, which the cost of debt, it means the cost of borrowing money goes down to 6%. Therefore, the cost of equity should also go down by approximately 2%. Now, I'm not saying it should happen percent for a percent dollar for a dollar or the point is if inflation goes down, the cost of debt should goes down. As a result, the cost of equity goes down because the cost of money should go down in general. So the cost of equity would likely decrease. Notice how the answer is written will likely, not for sure, will likely based on the information, but we cannot say anything about the stock price and cost of equity will likely remain stable, not necessary. If the cost of money goes down, the cost of equity is part of the cost of the money. So for the cost of equity will go down. Let's take a look at this question. In which of the following situation would there be an inelastic demand? Okay, now before you read the answers, you need to know what is an inelastic demand. Inelastic demand means if there's any change in the price, specifically an increase in the price, the demand does not change proportionally to that increase. For example, if, think about it, if the price goes up by 10% and demand falls by 10%, well, guess what? It's not inelastic, it's not inelastic. Why? Because as the price goes up, the quantity demand went down by the same price. This is what we expect to see. Inelastic is when the price goes up by 10% and demand only dropped by six or seven or 5%. So the price went up by 10, but the demand did not drop by the same amount. So think of this, I'm gonna give you an example, just gonna make it close to you. For example, the iPhone, if Apple increases their iPhone by 10%, maybe the demand will go down, but not necessarily by 10%. Maybe it will go down by five. Why? Because there is an inelastic demand. The price of the phone kind of, it's not really influenced by the price that much, okay? So let's take a look at the answers. A, a 5% increase, a 5% price increase result in a 3% decrease in the quantity demanded. This looks like an inelastic demand. Why? Because the price went up by five, demand went down only by three, okay? But don't select this answer.  A 5% increase result in a 6% decrease. Hold on a second, this is elastic. Why? Because as the price went up, the demand went down. So this product is price sensitive. It's the opposite of an inelastic. A 5% increase resulted in a 4% decrease. Again, it's elastic. As the price went up, the quantity demanded went down by the same amount. A 3% decrease result in a 5% increase. That's good. This is how we expect things to happen. If the price goes down, we expect most likely this is the law of supply and demand, the quantity demanded to go up. So the answer, as we said, A, the price went up. The demand did not go down as much. So this is inelastic demand. This is an inelastic demand situation. Let's take a look at this question. A company is considering a move to a software as a service. S-A-A-S offering instead of a traditional in-house application, which of the following concerns is unique to software as a service? Now, for one thing, if you don't know what a software as a service is, then you'll be able to, you won't be able to answer the question. But think of that in contrast to traditional in-house application. Traditional in-house application, it means the software is housed and the application is housed at your place of business. Software as a service, think of the cloud. Actually, a software as a service is a form of a cloud. It's when a third party hosts your application. Think of Google document. When you use Google document, what happens is Google hosts your document. It's a software as a service. This is what we're looking at here rather than having like a word, even now Microsoft does it, but think about the old word document where you have it only housed at your computer, which is in-house application. So which of the following concern is unique? Is unique to SAS, unique to that, okay? Disaster recovery capability and documented recovery procedure. I don't think that's unique to SAS. Whether you have an in-house or traditional, you're gonna have to deal with this. User credential setup and control over the action that employee can perform. I don't think that's unique to this because whether you have an in-house or a cloud, you still have to have the credential setup and control over what employees can perform. Allocation of software expense and overhead charge to departments. Again, that's gonna be with both. So with the process of elimination, I would say ownership of process data and cost migration. What happens is once you migrate to a cloud service system, software system, the ownership of the process data, that's a problem that's unique to SAS because it's in-house, you have no problem. You own the stuff and the cost of data migration. Think of just this should give you the answer, the cost of data migration. Well, that's unique. So if you're considering moving, the cost of data migration is a factor that's unique to that situation. So I would say if I don't know anything about software as a service, just knowing that we are moving to the software, the cost of data migration will be a unique challenge to this move. I would say D as a David is the answer. Number four, each of the following is a method to evaluate internal control based on the framework set by committee of sponsoring organization, COSO, except. So we have three correct answers here. So be careful about those three correct answers because we're looking for the incorrect answer. So there's only one incorrect answer. So don't read the first statement. Say, well, that sounds good. That sounds correct. Well, you're not looking for the correct. You're looking for the incorrect. So each of the following is a method to evaluate internal control, except, okay? Let's start from the bottom. Testing to determine whether the control are operating effectively and have prevented loss in the past. Do we do this? Is this a method for evaluating internal control? Sure we do. Part of monitoring, we test to determine whether the control are operating effectively. So this is one of the correct answers, which is except it doesn't apply here, okay? Identifying mitigating control to prevent losses. Well, this is based on risk assessment. When we do risk assessment, based on COSO, we identify and mitigate control to prevent losses. That's also a method to evaluate internal control. Evaluating internal control system that focus first on the risk identification of specific losses. Yes, yes, identifying risk, mitigating risk as part of the control activities. So mitigating risk control activities, evaluating internal control that focus first on risk identification as part of risk assessment. I would say by the process of elimination, A is the answer, but let's take a look at a distinguishing economy risk from industry risk and enterprise risk that has nothing to do with the evaluating internal control based on the COSO, the Committee of Sponsoring Organization. Economy risk and from industry risk, that's something that's macro on the macro economic level. It has nothing to do with COSO. So the answer is A. So again, in this situation and just by, just come, I would say I would use my common sense understanding the control activities, understanding risk assessment and understanding monitoring the five component of internal control. Hopefully it would help you answer a question like this because part of the internal control, it doesn't help us distinguish economy risk from industry risk and enterprise risk, okay? So make sure you understand internal control. That's all what I'm trying to say in COSO. COSO is important for the BEC exam. As of today, I don't have any, I have a lot about internal control in my audit class, but I don't have a COSO lecture on it. That's all, maybe I should do that in the near future. Let's take a look at this question. So I'm gonna go ahead and snip it. So this way we can work with this information. The capital structure of Merritt company is 0.2 or 20% common equity in the debt. Capital structure is 80% debt. So simply put, we have a company that rely 20% on equity, 80% on debt. This is equity and this is debt. The common stock, the common cost of common equity is 10% times 10%. And the pre-tax cost of debt is 0.5 times the cost of debt. Now, we have to remember the debt is tax deductible. The tax rate is 21%. It means we have to find out the after tax cost of debt. To find the after tax cost of debt, we're gonna take 5% times one minus 0.21 the tax rate. So let's do that. So we have one minus, let me, one minus 0.21 is 0.79 times 0.05, 0.0395, 0.0395, 0.0395. So this is the cost of that net of tax, which is good. It means although we pay 5%, but we have a tax deduction because the interest cost is, the interest cost is tax deductible, therefore our net cost of debt is 0.3.95%. I'm gonna make it 3.95%, 3.95 to keep the, so it's three, let me do this, times 3.95%. So this is the cost of that after tax. We don't have to do the same thing for equity because equity is not tax deductible. Now we are ready to multiply, 20% times 10% is 0.02 plus, now we need to multiply, 0.8 times 0.0395, that's 0.316, 0.0316, 0.02 plus 0.0316 is 0.0516, which is 5.16, therefore the cost, the weighted average cost of capital is 5.16. Now here's what I need to tell you, if you took 0.8 times 0.5, 0.05 or 5%, I'll give you 0.04, 0.04 plus 0.02, we'll give you 6%, and this will be the answer, but this will be incorrect. So the answer is therefore a reason to confuse you that 6%. You have to remember the cost of that will have to be factored after tax. After tax means you have to take your cost of that times, one minus the tax rate, whatever that tax rate is, most likely it'll be 0.1 because now the tax rate is flat in the US. Therefore, and it's gonna be lower, so the debt is good. Now, these questions are important, are important for your understanding, but what I suggest you do if you really want to study for the exam, you're gonna invest in your lifetime once for this exam to pass. Go to my website, subscribe, I have many, many, many more resources to help you pass the exam. The subscription is pretty minimal, it's not that much, and it's gonna give you access to thousands of questions, hundreds of lectures, multiple choice through false, and I'm always here to help you. Good luck and study hard.


So, secure shell as root user into the computer identified by the IP address for your droplet. Press enter. Are you sure? Yes, I'm sure. You actually have to type yes. Root password should be in the email that you received. It's a long one. And the system automatically says, ah, change your password. So now's a good time to change your password or you must type in the one that was in the email and then select a new root password. Of course, if you're new to Linux, you don't see the password being typed. You don't even get stars or anything, but it's actually being typed. Choose a new one and then you should get the prompt to say you're logged in. How do you choose a password?  So you want them to be secure. You don't want to choose a password that someone can guess, okay? So choose a good password, not one that you will forget and not one that someone else will guess. And don't tell anyone else. Don't even tell me, okay? There's no need to. Okay. What's your email again? Okay. I got it. Okay. I forgot to do yours. I need to create one more droplet for someone else, so bear with me. If you're experienced with Linux, you can do some things here, but otherwise just wait and we'll run the commands together. Just sending now. Okay. I'll just send. So you should get an email in a couple of minutes from Steve.sit. So now we're logged into our droplet. Remember the prompt user name, root, who's like the administrator user at Steve, yours is at your computer name, which is your name, and the prompt hash, you get it? Yep. Okay. Let's do some basic things. If you want to change the password, what do you do? You've already changed it to start. The command to change the password is pass wd. You don't have to do it. And I don't suggest doing it now because you've already set the password once. Don't set it again. But later, if you want to change your password, when you're logged in as that user, pass wd, short for password. What's the name of your computer? Well, mine is Steve. That's called the host name. We can change that. And let's do it now. Let's choose a different name. And some of the commands that I'm doing here are not the only ways to do it, but just easy for us to do for the demo. You can choose a name. So I'm typing echo, and then I choose a new name. Okay? You choose a different one. It doesn't matter. You can keep it the same, but I'll just show you how to choose it. Echo means display the name, the name you want, redirect that into the file name called hostname, which is a special file that stores the name of this computer, the host. Remember, you can copy and paste from the terminal that you see from my screen if you want. And just change. Try not to copy everything I do. You don't have to give it the same name as mine. Okay? Not so important, the hostname. We can update the current hostname. If we reset or reboot the computer, the new one would come, but let's do it now. Let's set the hostname to the new one. That's just a refresh. If we log in and log out again, we should see the new hostname here. We'll see that later. Check your IP address. In Linux, to check your IP address, you can run ifconfig. And the interface that we're using is called eth0. Ifconfig eth0, and it should show some information about your IP address and other stuff. Presenter, ifconfig, a lot of stuff, a lot of information there. The main thing that we want is your INET address, your IP version 4 address. And also, it's nice to know your IPv6 address, INET6 address. There are two INET6 addresses. There are two lines. One of them has a scope of global. That means it's a globally unique IP address. It's a public IP address. We'll need to record that. So if you need to find your IP address, you can find them from ifconfig. But you can also find them in the email that was sent to you. What we're going to do is add these IP addresses, your IPv4, IPv6 address, to a host file, a file that maps that address to your hostname. If you can't remember those values, I can't. You can copy and paste them, or you can find them in the email that was initially sent to you. That may be easier. We want to add them to what's called the hosts file. Nano is our text editor, nano slash etch hosts, clear, so it's at the top. Nano etch hosts, press Enter, and we want to add some lines into that file. No need to change all of them, but we'll add some lines in. You see the format is quite simple. IP address, hostname or hostnames, tab or space separator. Think of it as two columns, really. Sometimes we have two hostnames. We want to add or first change the one that was your name. If you change your hostname, there's no need for two occurrences. Mine was called Steve. I'll change it to, what did I change? FreeTech. We have to do that manually, to the name of your host. And then do it also for your real IP address, this address that was seen in IF Config, or maybe easier that's in the email that was sent to you. If you go back to your email, you'll see the IPv4 address, copy and paste it here, and also your IPv6 address. So in my case, I received an email, I have the IP address, I copy that and I paste it here and tab, also add the name FreeTech. And then do the same for your IPv6 address, that big long one. You don't need to copy that slash 64, doesn't matter if you don't know what the purpose of the address is, especially IPv6. Some of us haven't covered that before, but we'll put it in anyway. Copy that up to the slash, remember, select, middle click to paste, FreeTech, or your name, your hostname, sorry, your hostname. Yell out, put your hand up or make some noise if you have problems, otherwise we'll just keep going. And that's it. We're saying that the mapping from this hostname, this hostname maps to these particular IP addresses. This is a local IP address. These are two global IP addresses or public IP addresses, one IPv4, one IPv6. Not so important, but it's useful. Save the file. Control X, save, press yes, file name to write, ETC host, press enter, don't change anything, and you're done. Just check to see the actual contents of the file again, cat. Make sure the change applied. Cat displays the contents of a file. What's the time? Anyone? To see the time, type date. It's Friday, August 1st, 3 a.m., okay, wrong time zone. So date shows us the date and time by default. Let's set the time zone, all right, so this is the wrong time for us. Well the reason it's wrong is the wrong time zone. So let's set the time zone. And here's a way to set the time zone. We reconfigure the program called time zone data, tz data. D package dash reconfigure tz data. That's going to allow us to reselect the time zone that we want. Press enter, and then choose the time zone you want. And I suggest choosing your, our time zone, Bangkok, okay. Even though our server is in Singapore, I think for you it's easier if you use the time zone on the server as the time zone as to where you currently are. So once you get that, you'll get some nice graphical user interface. Allows you to choose the area and the city, Bangkok. Press enter, and now you see, and if you run date again you'll see the time. It's 2 p.m. Bangkok. You can choose another city if you like. Try it again if you want, Bangkok, enter, Asia, there's somewhere, okay. Okay, time zone, let's keep going. We've got, when we install the operating system some basic software is already installed. But sometimes it's the old version, sometimes there's a newer version. So what we want to do is update the software on our operating system. And in fact we'll install some new software in a moment. So to update in Ubuntu Linux, we use the program called AppGet. AppGet, or APT is what we call the package manager. Software is referred to as packages. On your Android phone you use Google Play to install your software. Well, which has a large repository of software. Here we use AppGet to install and update software. So AppGet, first we update, which updates our list of software. Press Enter, something will scroll through, take a bit of time maybe. Update, get update. It downloads some lists of software and then will upgrade our software. Who has an Apple computer? Yes, where do you get your software from? The Apple store. So that's a repository of software. The same thing in Ubuntu Linux is a repository, like a large database of software. And we can install software from that repository. The update updates our list of software. Downloads from some servers. Some of them take longer than others. Waiting, waiting, okay. No errors. Now we upgrade the software. Upgrade, Presenter. This actually upgrades the current software installed on your computer. AppGet Upgrade, Presenter. And it prompts you, if you scroll, you'll see that what it's really saying is, I'm going to upgrade all of these software packages. Some of them will make sense, some won't. I'm going to upgrade MySQL Client to version 5.5. I'm going to upgrade the language selector common software package. Yes, let's upgrade them all. Press Y and Enter. It downloads the software that it's going to upgrade. Downloading, and now it starts installing the new software. Takes a couple of minutes. Most operating systems now have a repository to manage their software. It's coming. Once we have upgraded, we'll actually install some new software. Just a few things that we may use or you may use based upon what we've done in previous workshops. It's going, it's almost there. After we install some new software, we'll add a new user. Currently, we're logged in as root user, the admin user. It's bad practice to do everything as the administrator. We should create a normal user and log in as that normal user. So we'll set that up before we reboot our droplet, our virtual private server. It's getting there. Some people may be finished. Okay, we're done. I'm done. Now install some new software. And I'm not going to explain the new software we're going to install. We may use it later. We used it in some of the previous workshops. I'm going to copy and paste from the website so I don't get it wrong. Okay, so from the web page, copy and paste the command to install new software. And it's something like this. App to get, same software, same program to update software. Install, and then the whole list of names of software that I want. So I copy and paste that from the website. App to get, install, and then list of software. Press Enter, and that will download and install that software. You don't necessarily need all of this. Some of them are things that we have used in the past. Some may be useful on your server. There's some software to unzip and zip files. There's some software for converting images. There's some network management software. Press Yes. It downloads the software packages, and then it will eventually install them. Okay, done. Let's add a new user. So we're currently logged in as root, as we see in the prompt. Or who am I? I'm root at the moment. Let's add a new user. Add user, and now choose a username. I suggest your name. Don't use my name. Add a user, and it'll prompt you for some information. Choose a password for that user. Different from your root password, preferably. Can everyone remember two passwords? Retype it. If you mistype, it will give you some error. Unsuccessful. Just press something and give the wrong password. See what happens. Press Enter. Enter again. No. We will delete your user. So add the user, and then use DEL user to delete the user. And then add a new one. Okay, you're right. Type in your details. You don't have to give them optional. If I can type. Press Enter if you don't want to give your room number. Is this information correct? Yes, and Enter. So this adds a new user to the system. Don't worry about the room number and so on, okay? Now, so we now have two users. We have the root user who's the full administrator. They can do everything they want. Now we have your own normal user. They can only do things in their own account. They are limited in what they can do. They cannot install software. They cannot change system files. But what we'd like to do is never use the root user and give permissions to this new user to do a few admin things. And in Ubuntu and some other Linux systems, in Windows, how do you do it? When you're logged in as a normal user in Windows, some programs need to be run as administrator. And I haven't used Windows for a long time, but there used to be some menu item you can right-click on an application and say run as. That'll run that application as a particular user like the administrator. So there's that feature to, when you're logged in as a normal user, run as the administrator. In Ubuntu Linux, that feature is called sudo. Instead of run as, super user do. Do this as the super user. Super user, in our case, think as the root user, administrator. So there's this thing we see as sudo. What we need to do is allow our new user to do sudo. And the way that we do it is we add our new user, Steve, in my case, to the group called sudo, a special group. Effectively, Steve will become an administrator. That is, they can do everything that the root user can do, but they're not the root user. And there's some benefits of doing it that way. User mod adds to group sudo, Steve, or your username. We'll test that later. Soon we'll test it, not yet. Last thing before we reboot and get back to our normal user. You logged into this machine as the root user, but we now have created a new user, and from now on we're always gonna use that new user, not the root user. We'll never log in as the root user. In fact, what we're gonna do as a security measure is restrict log in so that the root user cannot log in. The benefit is that your server is on the internet. If someone finds your IP address, and there are different ways to do it, then what normally happens is that malicious people out on the internet try to log into your server. They know your username, it's root. All they need to do is guess the password. Well, what do they do? They just make multiple attempts, keep making attempts. Root, username root, password, ABCD. Username root, password, keep trying different passwords. And I know everyone here shows very long, random passwords, but some people don't. And therefore, those people out on the internet, the malicious people will get access to your account. So what we'll do is stop it so that the root user can no longer log in via a remote connection. They cannot secure shell in. Only the normal user can, which makes it a little bit more secure. How do we do it? Well, we need to set up the secure shell server to do it. Again, I'm gonna not explain it, but copy from the website or from the terminal as I type. It makes a change to some config file which was permit root login to yes, it did allow root login, and it changes it to no, so it no longer allows it. Set is just a search and replace type program. Search for this string in this file and replace it with this other string. You can do it otherwise, but it's just a quick way to do it. Press enter. You should see no feedback, which means everything's okay. As long as you're copied and paste correctly. And now we're ready, if everything's correct to reboot and then we'll log in as the new user. So to reboot, type reboot. Really, you should do some further testing to make sure that it's working properly and the new user works, but we will do it quickly and just reboot. It automatically logs you out, so now you're back logged into your computer, you're the terminal of your computer, and it takes, I don't know, a minute or so to restart that virtual machine and then log in as your new user. Instead of as root, same IP address, but new username, secure shell steve at IP address or your username at your IP. And it will prompt for your new user's password. And now we're logged in and you should notice your hostname has changed to what you set it to.


Thank you and welcome to the CMC Markets Monday weekly webinar with myself David Madden market analyst at CMC Markets The time is 12 15 on Monday the 31st of July I'm just going to leave the risk warning to sit here on the screen in front of you You better before I'm sure and if you especially if you are a regular Viewer or a listener to our webinars. It's nothing you haven't seen before but compliance Prefer that we run through the risk warning screen before we actually proceed with the webinar itself So I'll just leave this on screen here for a number of seconds before we kick off the actual webinar So thank you very much for paying it for Already through the risk warning. Let's actually kick off the webinar itself properly now As usual because of long time we go through is similar to what we normally do We live a quick discussion a quick chat about what's happened over the weekend And then more importantly, we have a look at what is due out for the week ahead And then after that we've been the bulk of the webinar looking at the most popular markets and What also what price movements could we see for the next few trading days? So that what taking a look over the weekend what we saw out of China was we had some better than it We had some what we had some manufacturing numbers out of China Which came in slightly below expectations and showed that in July the manufacturing sector in China grew per crew at a slower rate What that means is that the markets are interpreting this as it's not amazing news that they came in slightly Expectations and it's not fantastic news that it showed it showed as the slower growth rate But nonetheless we have seen a push higher in the price of high-grade copper and in the back of that We also seen a positive move in mining companies So you like severe Rio Tinto out of a gas to the Chile the Chilean mining copper mining company Basically building Rio Tinto and the American have all done quite well out of that Also over the and this morning what we witnessed HSBC at some good first-half numbers Major British Bank with a very much a far Eastern focus HSBC posted but better than that posted a rise in first-half profits, which came in ahead of analysts expectations on top of that their common equity tier one ratio rose For the in the last 12 months compared to the first half of 2016 Which basically tells us that the banks of equity is in a better shape now than it was back then granted It wasn't a very good shape back then it's just even in a better shape now and to prove Just how much of a strong financial position HSBC are in they've actually managed to go up and out a Two billion dollar share buyback scheme to hope hope to complete by the end of this year Keeping in mind. This is July is only back in February the HSBC embarked on a one billion dollar HSB Share buyback scheme So close to show you how confident they are that they managed to improve their liquidity ratio Which essentially is a test should we see a major downturn in the economy? Unemployment rises bad loans take up asset falling value How would a major bank hold up under that? hypothetical scenario And HSBC are in such a strong position that only have they increased having proved their liquidity positions They've managed to actually go ahead and actually increase a bring in a share buyback scheme only a few months after and also another one Also this morning. We saw some data out of the of the UK broadly speaking it was mixed in terms of the Number of mortgages the amount of mortgages that were pumped out the money supply and also the actual credit lines to UK consumer confidence to the UK to the UK public By an energy was mixed more wages the number of individual mortgages came in slightly for low expectations, but if you actually take a look at the actually the amount that was actually That was actually put out In the time period it actually did actually increase looking at look taking a look at Eurozone data the CPI numbers The both the CPI and also the core CPI and the unemployment numbers If you want to wonder where you can find economic indicators on a platform go to mark a pulse fourth option down market calendar I'll give you a rundown of the major economic indicators And what I came in that first is what the previous month was and also what versus what they were expected So turning our attention here to the consumer CPI numbers from the Eurozone Give it a 1.3% the headlight number in my expectations unchanged on the month Looking at the unemployment unemployment dropped from 9.3% to 9.1% and bearing in mind I did also see we were expecting a decline to only 9.2 so that given that I expected on that front Turning our attention now to what can we expect for the rest of the trading week? So on our website under the news and analysis section you could see here We get a breakdown you can turn our attention to the weekly earnings calendar start winning week commencing the 31st of July 2017 so what are the big things they would watch out for a week ahead of us well tomorrow We have the third quarter earnings from Apple We've also have the first half update from BP We've we've a reserve Bank of Australia have a rate meeting to be honest We're not really expecting any change in their policy on Thursday. We have the bank of the great decision No change is to be expected but bearing in mind At the last meeting three of the bank of the members voted to raise in to raise interest rates that be adding on top of that Currently Forbes one of one of one of those hawks has now departed So we could see that falling back to on two of the of the members Voting for a raise in interest rates on Friday We have a update from rollback of Scotland and also Friday being the first Friday of the month We will also have the US data of the jobs data the non-farm payrolls So let's have a look at how the markets have been for me major markets have been performing throughout the morning session So starting off with the footsie 100 bearing in mind we did have Quite a poor finish to last week on the on the footsie 100 So you can see now we have pushed higher in early morning trading But we have managed to give up some of those gains yet again So as you can see here after hitting a record high in June for basically the last eight weeks two months pretty much non-stop The footsie has been broadly been pushing lower Now taking a look here We can see that we're off the lows of last week But same time you have to have it managed to kind of have it managed to kind of push back up North of the 50 day moving average at 7,450 if you can look here that we think it's quite clear that the momentum and this upward move here is Actually been waning or we've actually not going to swung to negative territory in terms of momentum So the next level to watch out for for the footsie is going to be to the downside support at 7,295 Which corresponds with the lows from late June Are going to be the levels levels to watch out for to the downside for the footsie 100 And should we move south of that we then be looking towards 7,200 itself Any rallied in the footsie 100 are going to be encountered In around this this place actually here of 7,439 up to the 50 day moving average at 7,450 This area here is going to act as resistance to any rallies I should be but we should be pushed north of that the next level to watch out for it's going to be the resistance From this level here in July In 21st of July at 7,515 It's a bit of a worst date over in Germany returning our attention now to what's been going on in the DAX The part broadly speaking Europe US equity markets are in better shape than the European markets and Which really now further to that and again The UK markets is in better shape than the calculated European markets The eurozone markets are definitely in a worse shape and especially that the chart is a bit more worrying about what we're seeing here in the UK Similar enough situation to the UK with the the Germany 30 the DAX went on to create a record high In june But has been pushing lower since then creating a lower low a lower high and then we're pushing down to a new lower low We seem to be kind of running out of steam to the downside here But the next level to watch out for on the DAX is going to be to support at 12,095 And then move below that we then bring the support at 11,941 on the cards And then should we move south of that again? Chairs you're looking towards a two-day moving average 11,851 Notice how as the market is falling off here We are seeing an increase in negative momentum as a negative momentum is still very much in the red at the moment But should we see any pushes higher in the germany 30? We could look to we could we could see fresh bought by Fresh bought selling and there's to be keep an eye on for this potential resistance level Is this this low here or from early july at 12,343? and then again also at the 100 a moving average at 12,435 And then you can see the 50 moving average sits in around 12,500 These are all levels to watch out for should we see a bounce back In the DAX bearing in mind the trend for the last number of weeks that's a couple of months has been to the downside Over in the united states equity markets are looking in a far better shape there Record closed for the Dow on Friday. It just seems to be kind of record after record for what's been going on in the united states Looking at the Dow here as you can see here It's been in a very clear upward trend for the last number of months for the Dow Jones And you could have pullbacks could find support in around the 12th 2000 sorry 21,800 region and also 21,700 region We can see that momentum is in a positive way Positive momentum is increasing so it can give us confirmation We can be more confident in the the upward move is going to continue Should we see any declines in the index or should we see any declines in the actual momentum itself? That's when you've got to get slightly worried But for the time being it appears that the we've seen a very popular strategy of buying the dips on the US 30 on the Dow Jones has been very common very popular with some traders Similar situation, but not as rosy for the s&p 500 It's been going on to last week. We saw a series of record highs being created. So that's the It's the same chart yet again. Unfortunately. Let's grab the s&p now Here we have it now Broadly speaking s&p is in quite a good shape Went on to create record highs last week But we did see a slight hailing up in the price of the s&p 500 towards the back end of the week What's also slightly worrying though is how we see a decline in positive momentum And this is when we're seeing prices hitting record highs But while the market is momentum is declining It could be an early indication that we could see a decent size reasonable size pullback When price from prices that are continued to push higher but momentum is going lower That's what's called a divergence And it's almost like if a runner is continuing on Running a 10 kilometer race and they're they're continuing to ratchet up a Increase in their distance from kilometer four to five to six to seven But the rate at which they're running at is actually slowing down So it's like we're seeing that in the s&p 500 the market has gone on to print All-time highs new all-time highs, but yet the rate of which is doing that is slowing down. So This could be an early indication that we could see Uh a reasonable size pullback in the s&p 500 bearing in mind the big picture is very It's very clearly pointing towards a solid upward trend So I would let this this would necessarily negate the big picture upward trend that we've seen It just means we could see a recent a decent size pullback At air is to be watching out for to the downside for the s&p 500 What would be two two thousand four hundred and sixty two thousand four hundred and fifty and two thousand four hundred and forty bearing in mind If we do see this in momentum turn negative We could be looking ahead more down towards the fifth day moving average at two thousand four hundred and forty for the s&p The nasdaq is in a pretty good shape not only last week It was going on a printing record and that's like 100 printing record highs not too uncommon Very kind of in line with what's been going on in the united states Similarish looking chart and really in respect to we can see a going the market is going on to print new all-time highs Be worrying slightly worryingly. We are seeing a decline in in positive momentum So it could be an indication that this bull run is sort of running out of steam Kind of honest last legs not to say the market is going to completely turn over I have a massive crash just that we could see a reasonable size pullback But they can a bigger picture the long-term view is still very much to the upside So the bigger picture is that bulls we've been looking towards kind of 6000 level We should be see pullbacks We could see them in this this this price would be the first one to watch here at 5,848 and then 5,800 self and then we look into words 5,700 should we see a reasonably reasonably large Pullback in the nasdaq 100 Turning attention now to what's been going on in the gold market Gold had a decent finish on friday given what was what has gone on in the us The us growth figures the figure the growth figures for the united states in the second half came in at 2.6 percent buying in line with market expectations But in the first half in the first quarter of the year of the growth was originally Declared to be at 1.4 percent But that was then revised low to 1.2 percent when traders saw that it took the pick their cues out We're we're less likely to see a rate rise from the federal reserve In 2017 another one from the federal reserve in 2017 going into the meeting traders are already We're very much just Undecided whether we're going to see another rate hike from the federal reserve this year on the back of that They're becoming more even in decisive and and and there's actually there's actually now There's actually now kind of a quite large quite large debate Are we going to see another rate rise from the fade this year a lot of traders out there in the market? Don't think we are and that's been reflected in the upward move in the price of gold So as you can see here gold has been in a fairly consistent and steady upward trend For the last about three weeks It's running through this trend line here Which if you if you connect the the low from december with the lows of may we can see here that it was That it the trend line was broken and I was going to run back up into that region here. So Surely you're going to continue to move north of that The next move the next ever to watch out for and gold is going to be 1280 And then we're looking towards the june high which is also the 2017 high of 1296 Any moves lower in the price of gold we could be looking to get support in rather 50 day moving average Which comes into play around the same price as the one-day moving average at 1250 and then below that We'd be looking to we look toward this price here at 1240 three per gold Notice how as the price of gold is pushing higher We can see a fairly steady increase in positive momentum It hasn't it hasn't really made additional gains on the gains it made from The 21st of july 10 days ago, but notice how while the price is moving higher momentum is also going to ever so slightly creeping higher as well That's a gold market covered now. We're keeping with the commodities team We will now have a look over what's going on in the old market bearing in mind on friday The baker who's recount report showed the number of active rigs in the united states increased by two to seven hundred and 66 rigs granted in percentage terms. It's a very very small increase in in in recounts But it's just something to be to be mindful of rigs and and rig counted in the in the in the nights from the baker's use report Three reports of the last in the last month four out of the top four Total of four showed that rig counts has been rising in the united states Given what what has gone on in the price in in relation to opec and Saudi Arabia's pledged to curb their their oil exports Nigeria has come into the fold and and I stated that they would actually volunteer voluntarily comply with the coordinated production cost that opec have Also alongside some non opec members on top of that And there's been a wider call within the opec countries opec members to actually comply with the Coordinated production cost because once after it's announced in late may there wasn't a whole lot of of Um of people of countries and member states complying with it throughout june We saw a major sell-off In in june, but then we see all bounce back and now we see a continuation of the market pushing higher So we keep for looking at price action on on brent here We can see here the next step of the watch off board of the upside is going to be the 53 dollars barrel 53 dollars per barrel mark and north of that we've been looking towards the high from may Which comes at this price here at 54 55 roughly and then north of that again traders are then going to be looking towards april high Well 56 55 Notice how as you can see here We've seen that the price of oil push higher it's managed to take off various oil supports Currently now acting resistance Moves north of the 50th moving average the 100 day moving average is providing support here at 50 dollars and 47 cents And then it's taken it's moved north on friday of the 30 moving average It's obviously quite a bullish indicator in itself any any pushes lower in oil and the uh any uh moves lower We could see support coming to play at the fifth at the 30 moving average at 21 Sorry 51 62 and then below that at the one of the moving average at 50 dollars and 49 cents As you can see here the last few sessions have shown an increase in price and also an increase in momentum So you can more confident of that that the kind of momentum is with the bulls Turning attention now. We're going to see a very similar looking chart for wti Given that the two largely move in step with each other Similar situation here last friday wti the price of west texas intermediate crude went north of the 200 day moving average And now we're still holding above that level so any pullbacks in wti could find support at the 30 moving average at 40 49 dollars and 44 cents Below that we could see here that the one of the moving average provided support Last wednesday at 47 dollars and 74 cents And then of course if you would see quite a large tracement We could see support coming to play at 46 dollars and 34 cents at the 50 day moving average To the upside because seeing as that momentum is clearly to the upside for for uh for wti 50 dollars is probably the big kind of psychological number to watch out for And then we'll be looking towards bulls to be looking then towards the may high of 51 dollars and 66 cents Then of course 52 dollars per barrel and then north of that again bulls will be looking towards 53 dollars and 56 cents Turning our attention now to the major currency pairs The euro versus the u.s. Dollar has been a very solid upward trend for the last all all way throughout 2017 Where we are getting very very close to august august kicks off tomorrow And bearing in mind at the jackson hall symposium mario drake is due to to deliver a speech in which is in late august And it's widely speculated that mario drake the president of the european central bank Is going to talk at very least lay the ground worker to talk about The european central bank potentially may be Reducing the size of their bond buying scheme which currently lasts which is currently at 60 billion euros per month The speculation that mario drake is going to lay the ground work for that to be reduced Not to say that he'll actually call an announcement and a reduction immediately Just he could potentially prep traders in advance The ecb are altering their language of ecb are Contemplating changes to their monetary policy or the bond buying scheme This is our language we need to look out for But the euro versus that the u.s. Dollar has been in a very clear and and consistent upward trend throughout 2017 buying the pullbacks Has been the a very popular strategy with traders on this particular currency pair for the last number of months The 118 level is to the upside is going to be the next big level to watch out for Seeing as it coincides with the 200 day moving average here should be Moved north of the 200 day moving average and beyond that the next big psychological number to watch out for is they're going to be the 120 Mark on the euro versus the u.s. Dollar and any pullbacks we see in this currency pair We keep looking for support at the in at the 117 region and then also below that 116 16 and then south of that again in the 114 79 area Taking a look now at the pound versus the u.s. Dollar bearing on mine It's going to be a big week for the pound versus the u.s. Dollar this week Seeing as as you have an update from the bank of England on thursday And with the non-farm payroll figures on friday amongst other economic data but those are by far If you're trading this currency pair, you do need to be very much aware of what was a of those two big economic events We were comfortably above the kind of 131 level at the moment traders looking towards the the resistance At 131 59 and then north of that we've been looking towards 132 Any pullbacks in the pound versus the greenback could find support in around the 131 region and then 130 47 and then below that again in the 129 77 120 129 region itself It hasn't been in as a as a solid a consistent A solid and consistent upper trend As the euro versus the u.s. Dollar, but what I can say is that it has in broadly been pushing higher throughout 2017 Pound has been gaining ground versus the dollar throughout 2017 Looking at now euro sterling because of all this speculation that the european central bank is going to Look to these talk about potentially tapering the size of the multi bond buying scheme The euro has formed quite well and of course this is the two feed each other feeding each other We have some we have some we've seen a decent recovery in the in the euro zone Which is brought about this increased speculation of the of the european central bank Potentially reducing the size of the bond buying schemes all the way throughout 2017 Particularly from april onwards. We've seen decent economic indicators out of the euro zone And it reflected here in the actual upward move in the currency pair So a similar situation we've been looking towards 90 cents to the upside for the euro versus the versus the british pound Any pullbacks we've been looking for support in this price action here just shy of 89 at 88 91 And then we'll also be looking south of that again at 88 88 Sorry, yes, 88 80 With the next support ever below that again, and then we've been looking towards 88 32 for the euro versus the british pound North north of 90 cents. We will then looking towards the october 2016 high of of 90 basically 90 50 will be the next ever to watch out for beyond 90 cents. Sorry 90 90 pence For the euro versus the british pound having a look now at the US dollar versus the japanese yen For the last basically 12 12 july it's been in a fairly clear it's this is going to downward trend And as you can see the price and a grinding lower here because the perception is the united states isn't going to raise rates again in 2017 That's that's a large portion of traders believe given Especially in light of the lower of the revised gdp numbers for the first quarter of of 2017 So we're pushing lower In the uh in the dollar versus the japanese yen We can see that momentum is clearly in a negative side with no indication That's going to swing positive anytime soon We're currently at 110 55 on the dollar yen So the support here at 110 30 is going to be the next level to watch out for to the downside And then below that we've been looking towards 109 and 108 region here Should we see any kind of pullbacks? In the uh the dollar versus the japanese yen We could be looking for resistance in around this this price action here Where they put the 50 moving average and the 180 moving average sort of coincide with each other Which is in the kind of 111 50 region and then it should be moved north of that We could also see the the 200 a moving average acting as As a stumbling back to any 20 moves higher and the one of the 200 moving average is at 112 18 As I mentioned we have a an update from the reserve bank of australia during the week uh tomorrow We're expecting on interest rates to remain unchanged But given that we've seen positive economic indicators out of the out of the australia and also co at the same time We've also seen some not so hard economic indicators from the united states We have seen the we have seen the uh a tremendous push higher in the ozzie dollar As we can see here looking at the weekly chart we can see here On friday it managed actually to trade north of the 200 200 week moving average Which is obviously something something's obviously in itself is quite a Quite a bullish indicator. We're currently back load below that level at the moment But the trend on the australian dollar versus the u.s. Dollar Basically, what's all all the way throughout 2017 and even beyond that has actually been very much to the upside It's once we kind of turn the corner from december 2016 onwards. It's been in a very kind of clear and concise upward trend Also, what I will point out though is that we are seeing a decline in momentum and it's a bit concerning that when you see Uh markets go out to hit multi month highs and multi year highs, but at the same time momentum is dwindling It could be a sign that the the bulls and the buyers are running running out of steam a bit Uh what we could see is you could see you have a pullback towards again at the 79 region Or we could we could see some support come into play At 78 78 itself or then down toward this price action here up between 78 34 and 77 86 So just be mindful I'll not only be probably aware that We've kind of ran into resistance at the tuner week moving average on the australian dollar But also that momentum is declining so that we could see a bit of a We could see some of the buyers and the bulls taking a bit of a breather And we could see the currency pair hand back some of the some of the ground data has made but Seeing us that we're at multi month highs and you know multi year highs We are the big picture is to the upside for the australian dollar So traders who are who are buyers of this currency pair will first and foremost be looking towards 80 65 to the upside Um and then beyond that we'll be looking towards 81 and then 82 on terms of the actual levels to watch out for The dollar card are the other other big currency commodity as uh has been in play recently given the Given what's been going on in regarding the perception that the united states isn't going to raise rates interest rates again in 2017 It's in a very much bearish move here for the last number of weeks and months All so you can see here that negative momentum is very much increasing So the outlook still remains to be very negative for the us dollar versus the canadian dollar This is not now it's looking at it. I'm a daily chart So we can see that the market is grinding lower And we can see a bit of bright we can see We can see here that there's quite a large positive candle here Um and we can see the market is kind of looking to kind of turn itself around on top of that Negative momentum is slowly but surely decreasing. So the rate of which the market is pushing lower is coming to Is declining? So this could be a sign of that we could like to see a bit of a turnaround in this currency pair I should we see a bit of a bit of a bounce back in this currency pair The initial level to the upside that we've been looking out for will be 125 76 And then we'll be looking towards the 127 region in around here 126 88 127 itself and then traders will then be looking towards this price this price here The uh the the low from the 7th of february at 128 59 But the big picture is still very much to the downside for the us dollar canadian dollar Just after a clock in here at the time it has just gone Uh, it's just gone 12 or 46. Uh, so If you've any markets you'd like me to cover that I haven't mentioned please feel free uh to shout them out I just also want to take this opportunity to kind of point out on our on our trading platform Whereabouts you can find our updates? Um, you could see here that on the chart forum, which if you go in from markup pulse And click on the third option down markup forum myself another analyst Will that will ask uh, we'll post our updates in terms of um, what we think what we think are look to appear to be Interesting charts. This is all going to be here on the chart forum. This is going to be this is updated Uh, several times a day every single day Here on the right hand side is our market insights So some of our news analysis gets put on the inside section. Uh, as you can see here, we got Some this this is the best place to look out for updates in terms of economic indicators So as soon as economic indicators come out here at 10 o'clock heroes on numbers They were then put up on our website on the on this at at um At six minutes past 10 So I just got to show you how fast we are at actually posting numbers In terms of economic indicators not all some of our some of our Our news updates get posted on inside all this one gets shared on the news and analysis section in here Some are actually on both. Uh, so you will see a crossover between the two Also, uh, seeing as you manage to sign up for this webinar Uh, bearing in mind, uh, as I mentioned, it is not the first Friday of the month is coming up Which means it is non-farm payrolls So in terms of what we can look ahead to other webinars, um coming up on Friday the fourth Of august this friday coming. We will be hosting our non-farm payrolls payrolls webinar It kicks off at Quarter past one BST bird of summer time quarter past one london time the number of the set obviously come out at half past the hour So please feel free to sign up for that Seeing as we've had no we've had no comments In relation to Up any markets that you would like me to look at I'm now going to end the webinar here And I would like to thank you for myself and for all of us here at CMC markets Uh, have a good trading week and best of luck