apple music is said to be having a makeover. matterfamiliar with the say the $10 per month streaming service hasn't performed as well as expected since the june launch. an apple spokesman declined to comment. and crew 30 passengers members haven't heard on an anti-had flight -- etihad flight. it hit unexpected turbulence. 10 people were taken to the hospital. the others were treated for minor injuries. they said the shaking was violent enough to damage overhead storage bins. that is your bloomberg business flash. anna: thank you very much, three shots along -- thank you very much. a donaldrepare for trump presidency. the money manager says that if trump wins the white house, the ratio of public debt to gdp will rise given he promises to spur job growth and infrastructure spending. the dubai billionaire has described donald trump as "a loose cannon." he said gulf money may leave the u.s. if he wins the election. i recommended donald trump, but unfortunately, he diverged into a different line and he -- he is a loose cannon. i advised him through his daughter by e-mail that he should make a correction. what he is doing is making a mistake. anna: simon french is with us to take a look at where politics and the macro meets, i suppose. really a fascinating story. our investors preparing their portfolios for the possibility of a trump presidency? do you think this is really firmly on international investors radars? q2,n: not at the moment, in but also, as you roll forward, you need more transparency on what a donald trump, or indeed a hillary clinton residency will look like. there is a lot of protectionist rhetoric, particularly on the public inside. clinton isillary being pushed in that direction at a challenge that will not go away from bernie sanders. when you look at physical and monetary policy, i think that what is emerging from a potential donald trump presidency is the idea that fiscal policy will take up more of the slack in demand stimulation and monetary policy. recordtrump has been on saying that he wants to see tighter monetary policy in the u.s.. certainly, that is the kind of rhetoric, and the audit of the federal reserve, which would cause a lot, given that most the basis ofsts on a very gentle path of u.s. interest rates. he references that trump wants to build a wall between mexico and the united states, he wants to support jobs, whatever that means, and he wants to spend on infrastructure. these is that for an argument for what you are referring to there, the increase in spending, possibly debt levels. whoever wins, will we see the battle pass from monetary policy to fiscal policy? is it a question of degree? simon: i think it is. i think a lot of the fiscal policy that is expected in the next presidency will stand or fall based on the quality of that investment. with the public utterances around a wall between the u.s. and the mexican border, but the idea of infrastructure spending to stimulate the economy, to help the u.s. economy leave the zero two low bounded interest rate, and spread growth around the world through a spillover effect -- there is nothing controversial about that. what would be controversial isn't that -- if this represents porkbarrel politics, and for the longer term stability of u.s. public finances, which is the concern. payoff, whether the net present value is positive, and actually improves the u.s. debt picture. the u.s.n you think will make the next step to improve interest rates? i have a chart from deutsche bank research. --shows you the chair price the share price. they are basically making the point that there is an increasing concern about inflation among the investor community in the united states. do you see that? simon: i do, because the weakness of the u.s. dollar starts to bring inflation back onto the table. that all drives the inflationary picture upwards in the near term. but does that change the fed pots response function? i don't think it does. it is very much the narrative we had since the start of the year. they don't see the risks as symmetrical, and would rather sit tight in june. wow markets have been ruffled a little bit in recent days by fed members saying that june is very much a live meeting, it still remains on the balance of probability that they will wait until later in the year. we get a series of mixed economic data. very positive pmi yesterday, but they are looking forward to the farm -- to the nonfarm payroll. we need a consistent picture. were just saying overnight that they will rely on the data. thank you, simon french. up next, more than one half of china's issuers are found potentially wanting. the full story on china, next. ♪ iaae-m" manus: it has gone 6:30 in london, 9:30 in dubai. i am manus cranny in dubai. private services in china slipping slightly in april. pmi down from 52.2 the previous month. the council said more needed to be done to promote private investment growth. it is said chinese authorities are right to tackle the commodities market. they are pushing up prices as well as volumes. the upswing has prompted exchanges to tighten laws, and in some cases, cut trading hours. the aussie dollar jumped more than expected after trade data, thanks to increased exports and rising iron ore prices. they have seen the deficit shrank to 2.2 billion aussie dollar's, down from 3 billion the month before. donald trump is the last man standing. his only republican rival john kasich put the presidency. -- quit the race for the presidency. many republicans have said that they will not support from. kasich: i've always said that the lord has a purpose for me, as he does for everyone. as i suspend my campaign, i have renewed faith, deeper faith that the lord will show me the way forward and fulfill the purpose of my life. brazilian president dilma rousseff has suffered a new blow after a senate committee has recommended impeachment proceedings. they said there is sufficient evidence to try their on evidence that she used illegal financing to manage the budget. a diamond the size of a tennis ball will go on sale in june, and could smash the record price. it measures more than 1100 carats in its rough form. the second largest diamond ever found, only behind one that forms part of the british crown jewel. day,l news, each journalists in more than 150 bureaus around the world. if you are a bloomberg user, find our top stories, simply type top . manus: let's get into these markets. for theocks dropped seventh day in a row, the longest losing streak in five months. -- , and made a growing >> those concerns coming after we got that adp report on u.s. jobs, actually missing estimates. also, the enticing china services -- the china services pmi coming in a little weaker, though still in the expansion territory. we are seeing asian stocks, excluding japan -- markets in japan are still closed -- asian stocks on their longest losing streak of this year. global equities have also fallen to their lowest level in almost a month. looking at currencies, we saw data in australia. we see the aussie dollar up against all of its g 10 peers. it is one of the best-performing currency against the dollar today, gaining for the first time in three days after the weakness we saw a earlier this week, when the central bank unexpectedly cut rates. bloomberg dollar index pretty much unchanged after tuesday. it is holding near a one-week high. i want to look at fx volatility. for g7 volatility currencies is actually higher than that for emerging-market currencies for the first time in a year. this is looking at j.p. morgan's volatility indexes. the blue line is tracking the indexes, the white line tracking the emerging markets. this is about growing doubts over g7 central banks' ability to stoke growth, inflation. more optimism that emerging markets will actually avoid the widespread economic slowdown. the spread has been increasing as well. finally, i just want to look at oil. gaining for a second day on wti and bread. wti -- and brent. wti just shy of $45 a barrel. wildfires in canada's oilsands region cutting output. u.s. output is at its lowest since 2014. we are seeing that data from yesterday pushed oil higher today. anna: hong kong property stocks have been downgraded by goldman sachs, which critics a 20% decline in home prices as borrowing costs rise. that is our subject for the chart of the hour. guy johnson is here. news if you back are long of hong kong property this morning. guy: goldman sachs is down trading these numbers based on the fact that interest rates are going to rise. the federal reserve reaches beyond the shores of the united states and has a massive impact around the world. i think it will be interesting to see which one they are more interested in. where is the balance lie? he thinks the fed is very data dependent. tomorrow, we get this big piece of data out. i think is goldman sachs story is really interesting in that light, the fact that we are going to see interest rates may be going up and the impact that will have on interest rates around the world, i think that will be something that will be important to monitor the effects of. the: you talk about it in context of the turkish story, how partly that is turkey, and partly it has been very much a fan story. simon french is still with us. i would like to see what dublin house prices look like against the cheapest the borrowing around the world. they spent decision, how quickly it increases interest rates, normalizes policy, said to affect they host of asset classes. not a hong kong trend. you can look at most global cities right now, and their valuations on a price to wages metric have surpassed all to thes peaks prior financial crisis. the real estate is the obvious trade here. you are right that an awful lot of the commodities story right now it's highly linked to dollars sensitivity to this fed policy reaction. that june meeting, although people are probably already tired of talking about it, is really fundamental. , theyworth remembering have only managed to squeeze out one rate rise in the last nine years. don't expect them to go twice within a year. there is a premium on setting, waiting. us,ral bankers keep telling but i think we have a bias toward some action. anna: i think the work function on the bloomberg suggesting only a 10%. good morning. this takes me back to late 2015. ubs call the london market as a bubble. a negative rate environment, a floorhink there is under global property, and therefore it is not the same issue we had in 2007 at 2008, we saw a huge amount of provisioning on the housing front? simon: i don't think you get a redux. you're absolutely right, there isn't a degree of shift in the risk-free rate that we saw in 2007 and 2008. there is a lot of macro prudential action going on from central banks, recognizing the huge increase in valuations that have taken place across multiple geographies and looking at restricting lending ratios, adding stress tests, adding additional parameters to ensure the financial stability of a lot of these banks that are no -- that are highly sensitive to any change in sentiment. guy: have you feel like 100% mortgage, the 1.25 in the u.k.? simon: i think the barclays story from yesterday was more .ymbolic of a previous era let's not forget, barclays still have that constraint that only 50% of their loan book can be .ore than 4.5 times income even if they load up with 50% of their mortgage book, there are followthroughs regarding their risk adjustments, their ability to pass the stress test, and the spc's response function. thatare running a risk attracts regulators who have already been quite active in this space. don't forget, here in the u.k., mark carney is the chair of the financial stability board. from a global perspective, look at ireland, australia, new zealand, whoever much tighter rules. anna: thank you very much. guy johnson brings us the chart of the hour and simon french stays with us on the program. more than half of china's rated issuers could face downgrades after the stress test. malcolm, talk us through the stress test. what do they reveal? melco: they took a basket of the companies they rate around the world and they looked at what would happen if china's growth fell in half from the current 6.8%, and extreme scenario, which they don't anticipate happening. this is what the stress test is all about, testing what would happen if this extreme event happened. they also have brent crude hovering at around $30 per barrel. if that were to occur, between 16 and one half of that basket would face ratings downgrade. in 2009, about 20% of their companies that they rated face downgrades. -- it would been not be pretty for global companies. before we start to panic and stash the cash under the bed , how likely is this scenario? do you think the bond market has already priced in this readjustment of the credit line? it is not even part of the doubt case scenario that the snp monitors. thatis the tail risk stuff really bloomberg forecasts and show how unlikely that is. for this year, the median economist forecast is 6.5%. even the most bearish forecasters around 5.9%. even the bears don't think this is possible. we have some data today that sort of added to this picture of stabilization in the economy. the pmi slipped a little bit in april but still remains in positive territory. the march data was quite strong across the board. if anything, the balance of evidence at the moment suggests china's economy is come at a minimum, stabilizing. manus: thank you very much. french, chiefmon ,conomist at penn near gordon back to this conversation. what struck me from your noses that global pmi has slowed down. there is a wall of death coming up for refinancing, and that is what we're going to see. $571 billion in debt. how big a concern is that? simon: the ability to refinance such a stock is, in the current environment, of limited risk where investors are very happy within,to china specifically, the sector that feels like it is underscored by the central administration. if you have central government backing, that also some of the corporate jets, it is fairly low risk because it looks a lot like government debt. we don't know is, through the credit cycle in china, what the peak nonperforming loans default rates actually look like, and therefore how you would price it in the event that the macro conditions deteriorate significantly. with asia andtick africa question about what we have seen with the japanese. we'll referencing a chart here on the bloomberg how wild the yen swings. yen week, the swings in the , tracking to three standard deviations. it is suggesting that we have seen recently in the yen is an incredibly unusual. standout moves in the japanese currency. will that give them support what they have to go to the g-20, g-8, other meetings? are they more likely to get support because they can prove that these moves are out of the ordinary. you are right that when you have such violence swings over such a short horizon, you can make the case for intervention against what is now emerging as a bit of a global consensus. we must not go down the route of competitive devaluation, beggar thy neighbor monetary policy. the japanese have a very strong .ase to say, such is the mood that starts to have negative feedback loops into the real economy in japan, which is expecting the second consecutive quarter of gdp growth. case to saying they need to come to the aid and be part of the abenomics program that has actually supported and hold up over recent years. abe will be speaking a little bit later on in london. it will be fascinating to see what he asked to say about negative rates and what his of a nymex plan looks like. plan looks nymex like. what more do investors want from jack ma's speaker must giant. ♪ manus: welcome back. you are looking at that glorious shot of new york, where u.s. futures are indicated at one corner of 1% higher. london.49 in let's get the bloomberg business flash. credit sweeties carrying a fresh round of cuts to london. about 180 jobs are going this week -- mostlyis in the trading division. will eliminate 6000 positions globally this year. tesla ceo elon musk has said the company's most ambitious production timeline since the model t ford. they plan to produce 10 times the amount of vehicles in 2018 as 2015. that figure is leading to one million cars in 2020. surprised superhero hit. saved 21stmay have century fox. generating $761 million in global ticket sales, over 13 times more than what it cost to make it. appleet to be having a makeover after receiving mixed reviews. month say the $10 per streaming service has performed as expected. they plan to change the interface and integrate it with itunes. that is your bloomberg business flash. anna: thank you. e-commerce giant alibaba reports earnings later today. shares of the company have third by more than one and their 2013 peak, despite profits doubling over the past year. joins us from hong kong with details. what will investors be looking out for when we get the earnings later today? na: investors will be looking for growth in its core e-commerce business. they will want to see a resurgence in revenue growth. they are also going to be looking at key metrics. they want to see how alibaba's acquisition spree and impacted its bottom line. explained it was why the stock has performed well despite positive earnings in the past quarters. >> you are correct that it has not necessarily reflected the positive performance. many see alibaba as a proxy for
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