this is the business briefing. i'm maryam moshiri. new year nosedive — wall street slumps as fears grow for the health of the world economy. plus, capitol spending freeze — the budget stalemate in washington continues, but how much damage is it doing? taking a look at those markets. the nikkei plunges on its first trading day after the holidays following that 660—point slump on the dow. but news that trade talks will resume between china and the us is lightening the mood a little. we'll have the details for you in a moment. we start on wall street, because after a brief respite over the holiday period, fear has returned. apple's warning about its business in china helped to trigger steep

falls in the main stock market indices. the dow closing down 2.8% and the tech—heavy nasdaq off 3.1%. it's another piece of evidence pointing to a looming slowdown in the world economy, or even a recession, as michelle fleury reports from new york. for wall street investors, thursday was yet another day they would rather forget. the dow jones industrial average fell more than 650 points. the s&p 500 was down more than 2%, and apple suffered its biggest single day loss in six yea rs. stocks have biggest single day loss in six years. stocks have suffered several weeks of dramatic swings, ending their worst year since 2008 on monday. driving this volatility, fears of a global slow down. fears that were given life i2 pieces of that were given life i2 pieces of that news on thursday. a dire

revenue warning from apple, and us manufacturing data that was weaker than expected. given all the speculation about the health of the us economy, many expect the us federal reserve, america's central bank, to take a break from federal reserve, america's central bank, to take a breakfrom hiking rates. this was reflect that in the bond market. demand for government paper retweet pushed the yield on the two year us treasury note below 2.496. the two year us treasury note below 2.4%. that is a big deal because it reached parity with the federal funds, that is the federal reserve's key policy rate, for the first time since 2008. the market is effectively saying that it believes the fed is not only going to have to stop raising rates, it might even have to cut them. that was michelle flory. —— fleury. in the last couple of hours there has been some positive news for investors. china has confirmed that talks will resume with the us next week, aimed at ending the trade war between the two sides. rico hizon is following the story in singapore.

i have a sense of deja vu here. we have been here before. is anything going to come of it? this mightjust be the happy new year's news that we are all waiting for. but of course, keeping ourfingers are all waiting for. but of course, keeping our fingers crossed that there will be genuine progress next week. there is a vice ministerial level meeting hopes to end a dispute which is inflicting increasing pain on the two global economies and dragging global markets lower, and the two nations have been locked in a trade warfor the two nations have been locked in a trade war for most of 2018, disrupting the flow of hundreds of million ‘s worth of goods, and stoking fears of a global economic slow down. —— hundreds of million ‘s of dollars. china's economic ministry says that a working team led via a us representative will be coming to the mainland to have positive and constructive discussions. —— led by. at the summit in argentina late last year,

president trump and president she agreed to a ceasefire, and are holding off on imposing more tariffs for 90 days, starting december one. —— president xi. if neither side meets the march deadline, washington could proceed in a sharp hike in us ta riffs could proceed in a sharp hike in us tariffs on chinese goods, and ageing could retaliate. we are hoping for the best the next week's trade talks. positive and construct it sounds like some ring that we all need more than 2019. —— constructive sounds like something that we all need. thank you, rico. let's go to washington now, where the stalemate over government funding continues. as you've been hearing, the white house is demanding $5 billion for a wall on the border with mexico, which democrats are refusing to include in any budget legislation. the stand—off has led to a shutdown of parts of the us government, now entering its 14th day. but how much damage is being done? for around 800,000 federal employees there's an immediate financial impact. around half, considered "essential," are working without pay. the rest have been ordered to go home unpaid. as for the wider economy, the impact is small at this stage. about a tenth of a percentage point off economic output for each week it drags on, according to some.

but it can quickly add up. as a guide, the 16—day partial shutdown in october 2013 took around 0.6% off economic growth for that quarter, at an estimated cost to the us economy of some $24 billion. markets also rely on the timely release of economic figures, and these are already being disrupted. data on the housing market had to be postponed on thursday, and key trade figures due out early next week could also be hit. president trump, though, insists many americans support the shutdown, because they want the border wall. you can call it a barrier. you can

call it whatever you want. but essentially, we need protection in oui’ essentially, we need protection in our country. we are going to make it good. the people of our country want it. i have never had so much support asi it. i have never had so much support as i have in the last week, over my sta nce as i have in the last week, over my stance for border security, for border control, and for frankly, stance for border security, for border control, and forfrankly, the wall or the barrier. sam fowles is a fellow at the foreign policy centre. sam, thank you forjoining us. first of all, let's talk about the government shutdown. at exactly does that mean in real terms for everyday life in america? well, to begin with, we have to remember this is not a whole government shut down. we are looking at about a quarter of the federal government that is shut down right now. however, that shouldn't be underestimated. it can have impact as simple as rubbish not being collect the dombey national

mall, or as serious as permit not going through for new x—ray machines. —— collected on the. that is the breadth of issues being covered by departments that are currently sharp down. people contacting the bbc, who worked for the federal government, telling a story is. one woman tweeted at us, saying she had been working to jobs just to get by because people are not getting paid. —— twojobs. just to get by because people are not getting paid. -- two jobs. yes, and this will get really serious next week, because that is payday forfederal next week, because that is payday for federal employees. so over the course of the last two weeks, as the shutdown began, it was holiday season. any impact was going to be relatively mild. however, when we get into next week people will be looking for their pay cheques, finding it isn't a there, as it is just federal employees, the number you have quoted, 800,000, outage of the people employed directly by the federal government. about half that number of police began a potentially going to be affected because they

are contractors, they are not included in that figure, and they are directly reliant on the federal government for their pay cheques, but will not be seeing it. as we look at these figures, it is bound to affect the economy, possibly not ina to affect the economy, possibly not in a massive way, but cumulatively, it could affect things. yes, if the shutdown is resolved in the next week, then aside from people taking a hit to their pay cheques in the short term, it is likely the economy will rebound fairly quickly. but the longer it goes on, the more the danger increases, and that is an exponential increase. looking ahead, what we are seeing is the deadline for the debt ceiling to be raised in march, and even if that goes perfectly in march, before that, as we get to that, investors are going to start to get worried. 0n we get to that, investors are going to start to get worried. on top of that, you are starting to get to wards a perfect storm of bad economic indicators. we have seen manufacturing going down. we have seen apple and the other fang

companies reporting much worse results than expected. we have seen a trade war, and the top of that, the fundamentals of the american economy weaker than they should be right now because of president trump's tax cuts, which has increased the deficit. so the us economy is less well equipped to respond to a dip than it would otherwise be. so who knows how long it is going to carry on for? well, both sides have an incentive to talk tough, but they've also got an incentive to settle. we will see that fairly soon. so did to have you on. thank you, sam. —— good. now let's brief you on some other business stories. in the first three days of 2019, top uk bosses will have earned more than the typical worker will earn all year, according to a report. research by lobby group the high pay centre claims a ftse 100 chief executive earns an average of £1,020 an hour. by what it calls "fat cat friday," bosses will have earned more than the typical annual uk salary of £29,574. two of the top us drug companies

have announced the pharma industry's biggest ever merger. bristol—myers squibb says it's buying rival celgene in a cash and stock deal valued at about $74 billion, bringing together their portfolios of cancer drugs. both firms have been facing tough times, with bristol—myers's shares down 15% last year and celgene's plunging a0%. apple has been ordered to remove some iphone models from its stores in germany over a patent dispute with chip giant qualcomm. a court ruling in munich on 20 decemberfound apple had infringed patents on power—saving technology. the german case is qualcomm's third attempt at blocking the sale of iphones. the california—based chip maker has made patent infringement claims against apple in the us and china already. that's it for the business briefing this hour, but before we go,

up next, newsbriefing. we'll take you through ther stories making headlines in the global news media today. police believe members of organised criminal gangs are getting jobs in prisons, so they can smuggle drugs and other contra band to inmates. it comes after an "x—ray" body scanner was installed at leeds prison. the prisons minister, rory stewart, says he'll quit if levels of violence don't come down by august. here's our home affairs correspondent, danny shaw. stand up on those marks. spin around and face me. just place one hand on to that. using x-ray technology, making prisons safer. this is the first body scanner to be installed

as part of the government's programme to reduce drugs and violence in ten of the worst affected prisons in england. it can detect packages hidden inside a prison's volley. this is an image of an inmate found with concealed drugs on the first day the device was deployed. you can see the straight edges, which shouldn't be inside the human body. the scanner operates in a similarway to human body. the scanner operates in a similar way to a standard hospital x—ray machine. but the level of radiation is 400 times lower. leeds is one of ten prisons being given in best and to reduce drugtaking and violence by next summer. —— given investment. but it is a difficult task and there is no guarantee it will happen. there is also a concern some of the ten prisons could reduce assaults simply by moving violent offenders to otherjails. that is definitely a risk. i am very, very clear, though, that we need to play this fair. the idea is that i can

look other governments in the face and say, we turned around these ten prisons without cheating. —— governors. the drug trade is controlled by organised crime groups and there is evidence some criminals deliberately get jobs and there is evidence some criminals deliberately getjobs in prisons to bring contra band deliberately getjobs in prisons to bring contraband in. coming up at six o'clock on breakfast, charlie stayt and louise minchin will have all the day's news, business and sport. do stay with us here on bbc news. this is the briefing from bbc news. the latest headlines: the us house of representatives has passed legislation that would re—open the federal government without paying for president trump's wall with mexico — but it's likely to be vetoed by the president. doctors here in the uk say parents should worry less about how much time their children spend using smartphones and computers, as long as that does not replace healthy activities. let's ta ke

let's take a look at what is making headlines across the media today. and let's begin on the other side of the atlantic, where a new political era has begun. the new york times showing a picture of nancy pelosi — returning to her role as speaker of the house of representatives — the democrats having taken control of the lower house of congress. next, we'll take a look at business paper city am. the headline says ‘crunch time'. there are growing concerns about the global economy, with stock markets heading south and poor manufacturing data coming in from america. tech giant apple saw its value plummet by $75 billion. here in the uk, the shadow of brexit continues to loom large. the guardian reports that nearly a thousand police officers from forces in england and wales are to begin training for possible deployment in northern ireland. that's in case there's any disorder following a potential no deal brexit. are children spending too

much time in front of computer screens, or on tablets and smartphones? the times says doctors say there's no firm evidence too much screen time causes harm, but they do suggest children switch off an hour before going to bed. finally, the daily telegraph has a health warning for everyone. the paper says the uk's national institute of health and care excellence, or nice, recommends congestion charges and speed bumps everywhere. the idea is to encourage more people to walk, and improve their physical fitness. with me is iain anderson, who is founder of the international communications agency