Power struggle with the president. The market is about to open in istanbul. Things willyou how set up. Half an hour from European Equity trading. Lets take you to the calculations. The ftse 100, a bunch of stocks. Ep the main one to keep an eye on. We need to show you the aussie dollar. Clearly, the change at the rba is one of the talking points. Rates are at a record low. Keep an eye on the lira. That is what is happening. A massive move yesterday. We have a press conference at 11 00. Trading up 2 . The hang seng down. His market, just opening. Ahead of the press conference. We will be covering the story throughout the morning. We will come back to that. Lets get you your news. Juliette optimism still outranks pessimists. Earlier, the China Council meeting said more needed to be done to prevent promote private investment growth. Investorsys have been piling into futures, pushing up prices and volumes. The tightening of rules and in some cases, the cutting of trading hours. The brazilian president has suffered a new blow after Senate Committee recommended impeachment proceedings. Global news 24 hours a day, powered by our journalist in more than 150 news bureaus around the world. You can find more stories. Guy thank you. A couple of things. First, i want to show you what is happening in istanbul. The market down over 2 . We await news later in the day as to what is happening. We have the news we have a new boss. The deputy is going to step up. What do we need to know . What is going on behind the scenes here . Good morning. The change is anticipated. The incumbent will be stepping down at the end of his term in september. His deputy will be stepping up. A couple of things about this change. Beautiful isand the term they wanted to use. It is also what the market would welcome any sense of a clean, orderly secession plan. Expert on Interest Rates in lowinflation environments. An incredible mind. The market rates this man incredibly. Also won the medal for economics at new south wales. A few some intellect. If there is anybody in this type he certainly has all of those markers. Australia, bank of job is wellwritten enumerated. That is certainly what the market is expecting. Business as usual. His insights will take on more weight. Thank you very much indeed. Appreciate it. Joining us out of sydney. Joining us now, patrick armstrong. Sounds like we have the man for the job. A record low environment with us for some time. Reassesshaving to their view of the world and the kind of specialities they have. Continuity, status quo. That is what is going to be put in place. Reporter australia continues to be a bet on china. We saw, driven by Commodity Prices. The economy does well. Guy what kind of job is he going to do . Is too much of an inventory overhang. We have seen a real rally. Speculatively purchasing those. Record inventories. Copper, record inventories. It is hard to see a sustained rally. Guy we need to talk about what is happening with the feds. We are putting a lot of people back to work. Growth overall isnt climbing very fast. That implies we may be in for a Slower Growth time in the future and we dont fully understand why that is. How much is noise in the data. Guy what could change that . Donald could potential he. Jeffrey good whack says we should prepare for a donald Trump Presidency. Said ify manager trouble wins the white house, the ratio of public debt to gdp will rise. Patrickt back to armstrong. Should we be preparing for that . To bek weve got prepared. I dont do get is a likely outcome. The support for trump is 30 percent. Guy six months to go. This time last year, i would have said zero chance. At a riskhave to look premium. Upcoming decisions. The u. S. , youve got donald trump, the fed itching to raise Interest Rates. Selloff, could be a later, those are risks and new leader, those are risks. You are putting a positive thing but that will be more than offset by the negative. Moving away from global trade, you cant offset that. That will only go so far. Guy how far would rates go in a Trump Presidency . Driven, a guy comfortable with that sitting in the white house . He builds of debt and goes bankrupt. It is hard for a but maybe he will try. The fed, i dont know what they are going to think. Guy if the spread between trump closing, what is the signal . A biggerk equity is risk. A risk of higher debts and defaults. Risk premium on volatile statements. The market sells off. A slow, steady guiding hand. Guy checks and balances. Had agendas he wanted to push through. Guy no government is Good Government . You could almost argue that. Having a leader with the house behind him, you can get things done but it would be hard for him to do things except for soundbites. Guy the u. S. Economy, the consumer, they are the drivers. He is building not a literal wall, but figurative walls. Pulling america back. Making statements that isolate china, japan. O, every country basically. Those will hamper global trade. It will deter investment decisions. It is a real risk. At the glassoking half empty side of things. Rather than a consumption boom field by debts. Guy patrick is going to stay with us. Lets get you caught up. Respole russ paul beat analyst estimates. 570 millioned to euros. Worst performing european oil stock over the past year. A fourthquarter profits that beat estimates. Says. K. s former monopoly earnings rose 14 . Includes two months of results from the british Largest Mobile Network which bt acquired. Credit suisse is carrying out a fresh round of cuts. Two people familiar with the innder c jobs are going the trading unit. Another round of cuts is planned for next month. Would suisse said they eliminate jobs. The taz list ceo has set the company the most ambitious automotive timeline something model t ford. They plan to produce 500,000 electric cars in 2018. 10 times the amount they produced last year. That news came as tesla announced a firstquarter loss. The surprise super hero hit dead pool may have saved the quarter for 20 century fox. 751 million in global ticket sales. Businessour bloomberg flash. Guy thank you very much. The turkish Prime Minister is expected to step down within the month. The turmoil has sent markets plunging. Joined in istanbul. The markets have opened. Looks pretty soft. Reporter that is right. A political power struggle by the president and Prime Minister has set markets into a downward spiral. Market has opened a few minutes ago. Down 2 . Headed towards the fifth they of losses. The lira is appreciating against the dollar somewhat after sliding 4 yesterday. 10 yeard on turkeys bond is on the rise. That guy he said he does not see early elections coming through. What does what is the political directory tradeking he look like . What does the political trajectory look like . Meeting, after the there was no official statement. The Prime Minister plans to have a Party Convention in the next 15 days. There, he will not be a candidate. 9 00 a. M. Speaking at london time. He could possibly bow out his plan further then. Who could replace him as the new Prime Minister. Ministerbe the justice or the soninlaw who is the minister. Guy thank you. You look at risk right now, youve got brazil, south africa, turkey. Some ways, these are the times to invest. You see decent returns. Does it work in south africa . What is going on . You need to have a weak u. S. Dollar and Commodity Prices. I dont think that is in the cards right now. I think the dollar begins to strengthen. They are not saying we are staying at zero for ever where is the rest of the world has that few. That translates into a stronger dollar. You dont get demand going into the levels of production right now. Those things are going to come together. Guy we dont know how much pressure he is going to put on the central bank governor. Do you stay away . That reason, i would stay away and would not want to be long. Guy what about brazil . You have had your move in that. If i am wrong on the dollar and commodity, brazil will do well. How easy is it for you to look at your investment portfolio and see how Political Risk gets overlaid . Patrick it is not just where the risks are, where the market is going to punish. It is the narrative pushing the market in one direction or another. It is difficult. There is a range of risks. The real risk for me is policy mistakes. The central bank likely to do that is the u. S. Hiking rates too early. It is very difficult to know when. Guy june is early. Patrick 100 that would be too early. I think it would be unlikely but the narrative is we are keen to raise rates. If we have better than Consensus Economic growth, two might be fine. If that is the narrative, i think the markets can handle that. Be too early. Ould you might get around 200. June, there will be a discussion. The governors are saying june should be on the table. I would be surprised. Is going to stay with us. Up next, expansion in the service sector. How markets reacted. In europe,rket open it is going to be the hottest day of the year in london. 21 degrees. Summer is here. Lets see what is going on in asia. Juliette 21 degrees, we call that winter in hong kong. Comingseeing gains through in the last part of the trade. The shanghai composite positive by zero point 1 . Hong kong still flat but things looking better than they were an hour ago. The pickup coming through. Giving more of a boost to the region. It has been an interesting day. Japan will not reopen in till tomorrow. We had korea closed. Markett a damper on the in terms of the regional benchmark index. Flat at the moment but negative territory. The seventh session of losses, the largest losing streak since december last year. Mining stocks coming under pressure. Financials getting a boost. Consumer goods looking strong all morning, coming through. We have been watching in the currency markets, the story of the dollar, the bloomberg dollar index eating stronger. A rate increase on the cars. Ringgit down by 0. 2 . March. Est level since the aussie dollar, a new head. 75 spots to attain. Guy this is as good as it is going to get. Profits that beat analyst estimates. Performance compensating for low oil prices. I have heard that before. Performing over the last year. Open. Like equities will armstrong, still with us. How worried are you some of dividends will still be there . Patrick they are not sustainable with oil prices the way they are. They should go higher as the higher cost production comes offline. The canadian shale, some of that will cease. Dividends are not sustainable. With 60 oil, i think they are probably sustainable. Guy we are five minutes away from the european open. Weeed to tell you about how are probably going to open. Ofa has had seven days selling, but it looks like europe will bounce back. Futures in london, in terms of featuresee, keep the box. Looks like we are going to be seeing the market this morning. London up 0. 5 . Dax looks like it is going to be opening into positive territory, 0. 7 percent. Looks like europe is going to be on the front foot for plenty of action, still to come. Particularly in turkey. 9 00. A key press conference coming up. Higher. Equities are the warmest date of the year in london. Watchingome, youre on the move. Let me give you your morning brief. There is a new governor of the rba, Glenn Stevens will step aside in september. Are you ready for trump . Investors should prepare for a debt driven donald presidency. He loses hiss power struggle with the president. Themwill be opening hide we have softened up into the open. Maybe just a touch higher as we get into the numbers. Remember, you can to them going dividend in london. Lets find out what this thursday morning is going to bring. Nejra we saw losses in asia, excluding japan. Market still closed. Up and down for a seventh day, its longest losing streak this year. On content of a Global Growth after those adp jobs numbers. Openingdata from china, up in europe, these are the sectors on the stoxx 600. Largely in the grin, that matches with the future markets were showing. We were ahead of the open. If you look at the sectors, a lot of it is pretty much flat. They areooking like the weakest, followed by industrials. Lets move on and look at the currency that is very much in focus today. We have the announcement of a change of governor at the reserve bank of australia. That is not move the currency too much. The games that i have been on retail sales eating estimates. The aussie dollar is the best performing against the greenback, gaining against its peers. Falling off slightly, but so up still up. 5 . Gaining for a second day after u. S. Crude production fell the most in eight months posted lets move to the top stocks we are watching today. This is the worst performing major european oil stock over the past year. Analysts has beat estimate with its firstquarter adjusted net income. This is the performance of the refining and chemicals position. Just waiting for that to open. I will move on to bt group after it reported fourthquarter profit that beat estimates. It was bolstered by the acquisition, it does include results from that which bt acquired at the end of january. Sticking with another u. K. Stock, morrison up 1. 1 percent. It reported a second consecutive quarter of sales growth that signals a change made by the ceo really have stabilized in the business after a fouryear slump. Still waiting for repsol to op en. Guy let me take you to the market open and show you what is happening. The ftse 100 is up i. 5 . 2 . Still waiting for the dax to open. Lets see how europe fully opens for me get that dax price through. The cac is down. Patrick armstrong is still with me. Are long european equities, short the food and beverage companies. Because it is too expensive . Patrick the most crowded part of that is you have risks in europe by the best companies in europe which is nestle, the beer companies. Noncyclical, and analysts have profit margin growing year after year because their Commodity Prices falling for the last five years improving growth margin. I think that has run its course. Any precipitous falls, i dont think it will spike higher. But analysts have consensus seven. Rom 55 to over four times book value, it is a very expensive quality play right now. Guy dax just opened up. 2 . Talk to me help him be this summer will be for europe. What is the story there . Patrick we are short euro stocks righ tnt now. There is risk there. When everyone is hedging one clear risk you have to pay a lot. It is very elevated. Guy where are we . Resident 17 right now, not quite double but it is getting close. Things are pretty good in the u. S. , and pretty terrible in europe. It is not the case if you look at the manufacturing production in europe, it is not different from where we are the u. S. Right now. People take a pessimistic view of europe because invest appointed for so long and an optimistic view of the u. S. Because they out delivered. Guy what will it take for u. S. Investors to wake up and smell that yuan . Higher Interest Rate is probably the clear catalyst. The other area we are short is canadian equities, not very patriotic for me. Timesan banks are 1. 8 book value. They sailed through the financial crisis with conservative management. It was in opposition to get to the next crisis because people are worried about bad debt coming from the Energy Sector or depressing valuations. It is the canadian banks that have more exposure. That is more than coming from oil and gas. The canadian banks could be really hit if you do certain see that unwind. That is been placed into european and american banks, but not canadian. Guy it is a tough week for european banks. Were not seeing the light at the end of the tunnel. Patrick in five years time i think they are all 50 higher. The earnings and ram it will change. We love a steeper yield and the interest marginal come back through. It will be a wild to play that out. Guy talk about the Interest Rate curve, talking in new york at think it was yesterday betting against the european bonds being the widow maker trade of the year. Patrick if he short a bond and it costs you. 2 ay ear, it will not kill you. I dont know if that is the right word for it. Guy he talks with the 30 year japanese, being the most overpriced security on the face of the earth. Patrick i dont see how you can say that european debt is a widow maker than japanese debt they are yielding not terribly dissimilar numbers. Overvalued right now. Were in a very risk averse environment. We are rotating towards the safest insurance. At think they will prove as safe. I think you will see a slow grind higher in the coming years. Guy right now, short term, this push toward the back end of the curve, does that carry on . Patrick estimate, there are a lot of artificial forces pushing Interest Rates. It is part of the ecb and the feds policies. Eventually, inflation will we are its head again. Just 12 months ago, the market really moved sharply where yields shot up ever because there were glimmers. There is no inflation priced in anywhere right now. That could start to emerge of these policy start to take effect. Guy for your policy, you need these two steep enough, right . Patrick eventually, they will. There is no earnings. Many people just use the Deutsche Bank model. You cant lend the money out so you buy back your own debt. Cane are ways that they artificially get some earnings right now. It makes entity can borrow money for free and the market saying your bonds are worth a lot less. Much, backyou very with patrick very shortly. Up next, lets talk about the car sector and elon musk. He is working overtime, apparently enough keeps a sleeping bag in the office. What will it take to produce production in two years . Guy lets find out what is going on. We are long european equities this morning. E is climbing as well. E cac just up. 1 . The Energy Sectors on the front foot as well. Italy, italian banks and focus on the downside. I want to check on the dividend. Lancaster holding, Elian Schneider all your losers in europe this morning. Phillip lowe will replace Glenn Stevens for a sevenyear term. Diminished Interest Rates after the central bank told the record lows to push into the end of the Mining Investment boom. Lowe appointed Deputy Governor described ashe is an exceptional economist. The aussie dollar has jumped after a betterthanexpected march trading data. Some of theo deficit go to 2. 2 billion australian dollars from just over 3 billion a month earlier. Exceededles also expectations. Almost trump is a last man standing, as it only republican rival john kasich the race for the presidency. He now must persuade a divided party to unite behind him was that many say they wont support trump. I have always said that the lord has a purpose for me, as he has for everyone. As a suspend my campaign today, i have renewed faith, deeper faith, the lord will show me the theforward and fulfil purpose of my life. Juliette the sicilian president has suffered a new low. The report says there is sufficient evidence to try on allegations he used illegal financing to manage the budget. Global news 24 hours a day powered by more than 2400 journalists around the world. You can find more stories on the. Berg at top about tesla,lk reported a loss of . 57 a share. Elon musk also spread of production, increasing them fivefold in two years. It is a goal he so dedicated to that he has apparently taken up residence in a Conference Room next to the production line. And has been up all night studying the numbers. Patrick armstrong is still with us. You have one of a set here, right . Guy what do you know, what do we not know . Ryan lets start with the target, this was already ambitious. The most ambitious production timeline in the history of automobile since the model t ford, this is pretty spectacular. That was before he jumped on the Conference Call and moved it all opt. The original goal was to produce half a million cars by 2020, last year they made just over 50,000. The new plan, that is not fast enough. He wants to get to 500,000 cars by 2018. 50,000 last year, hopefully 80,000 this year, 200,000 already next year, and he doubles that and we arrive. Have a sleeping bag if you want to do that. You have to keep on people to produce these cars. He and on investors because needs more money. In terms of the realism, what is going on . A lot ofre are obstacles, even your imagination is one. Clearly, he has to get his energy, his battery factory online. That is still in construction. He needs that. The model 3 he is promising at , he mustf next year deliver that car at the end of next year if he wants to meet these production targets. Yes to have the cost to buy to produce. Withs had trouble production timelines like that in the past. Yes avoid recalls, and has to have a team. Talking about how calling on the best manufacturers in the world to come and join tesla. This is just as the Company Announced his top executives in production are leaving. He talked about europe to being the place where he could recruit the best engineers. It will be interesting to see a many of those engineers come from the side of the pond. Patrick, a. , how achievable is this, and b. , do we have to give him much more credit . I was stunned at how many teslas troth past me. There is demand here. Patrick i have noticed them as well in switzerland. Demand, no question about that. Just from the preorders that you have seen. The demand question is not a question. There is still a negative cash flow. They will probably need an equity issued to finance this expansion of production. Guy would you partake in that . Itrick i would rather play through a traditional company. Bmw gets no credit for the what theyve done. Succeeds, i think bmw competes with it. Not a bit of zaidis priced into bmw, but already into tesla prices. Reckon the majority of investors will be ready when he comes and says i need more money to continue to pay more than 20 a share . Patrick it is definitely at the of where you want to be. I think there is always a buyer for these great growth companies. Lid on going to keep a the share price may short term. Guy what is the short on the other side of this . If you change an industry this dramatic, somebodys going to lose . The traditional players not adapting and piggybacking on what tesla does is what strikes me at think. Maybe the old fashion Auto Companies that arent moving into the electric side of things. , lowers lower margin performance priced into them as well, i suppose. You this,t to show this is incredible. This is a tesla a r, there are no sales, not one single. That in itself should be a sign to sell. This iss is the a r, the sell line, i am getting ahead of myself. If you look at the share price and where it has gone recently, this is the price target of the here. The price target is currently trading at 2. 68. Should analysts be turning more bearish right now . We are getting to the critical phase right now. Patrick how do you get paid . Patrick, i am at a my supper we will say goodbye to you. Thank you very much, indeed. Covering the tesla story. Up next, chinese Commodity Trading volumes plummet. Our chart of the hour is next. There is great interest to getting back to a normal Interest Rate environment. We want to do it where it is sustainable. We dont want to slam the brakes on the economy. We are watching the data, and i think we will see and move in the data allows it. Guy the fed in focus, talking with the federal rate. Do it more clues tomorrow. He rolled data will be out, what will that tell us about where the fed is going . Is june too soon . Lets talk about how the european markets have opened this morning, let me show you some numbers. Wherenning to basically flatlining here. Day was down for a seventh of selling. That like we will follow the trajectory here in europe. Is trading flat, but the cac down. Some of the oil stocks are a much on the move. To be honest, the numbers came as a big surprise. He did well in chemicals, trading looked pretty good. That is one of the stories were watching very carefully this morning. Lets talk about the chart of the hour, and what exactly is going on. yesterday we talked about the fever in chinese commodities. I have a followup chart showing this could be easing off if you look at volume. Trading volumes across the three biggest exchanges, shanghai, rebar, oil or, the blue line is tracking. Those trading volumes are less than half of what they were at the peak on april 22. Back to similar level to a year ago. He might of money changing hands on a daily basis has shrunk to 114 billion. The interesting thing, this follows what we talked about yesterday, while prices have come off their peak, the so havent completely collapse. The open interest, that was the second line of the chart to remain relatively unchanged. It was about traders holding positions for a few hours then cashing out of the end of the day. Guy the regulators have learned their lesson. Nejra they have been calling for an end to this speculation. This is marking a bit of a return to normality. The appetite was weighed after the wave their transaction fees. There were concerns that they could be similar to what happened in the stock market. Guy thank you very much, great chart. Joining us with the chart of the hour. Lets talk about what is happening in turkey. We will see a press conference which could be fascinating in terms of the future trajectory of this economy. The turkish market this morning is trading down by 2. 15 the turkish lira has bounced a little bit. Yesterday, and aggressive round of selling. That is now reversing a little bit. It is not completely unwinding. You can see we are still in negative territory on a two day basis. We are seeing the dollar fading , buttle bit down by 1. 21 plenty of coverage coming up. We have this rift at the center of turkish politics spilling out into the open. The Prime Minister, and this man on the other come he wants to have an executive presidency. He is looking to cement his grip on power. How will it actually work . It is unnerving markets. When we come back, talking to an economist on his take of what happened here. Member, they have considerable pressure from the president to cut rates. That is not been his view of the world. He is not entirely convinced. Nevertheless, the story could change. The ftse 100 is up, trading at 61. 23. Welcome back, 30 minutes into the trading day how are things shaping up . Foot, back on the front forming a little bit. Try to figure which director and it should be going in this morning. With a fullscreen of green, even the cac is up. Which stocks are moving . Lets find out. Nejra this is the worstperforming major oil stock in europe. But, it is up today after its First Quarter adjusted net income came in as a beat. It was refining Petrochemicals Division that compensated for low oil prices in these earnings. Like most of the industry, repsol is cutting cost and looking to divest. It is up today on that beat. Is heading higher two, Fourth Quarter profit was also a beat. It did include two month our results from ee, which bt acquired at the end of january. The worst performer on the stoxx whichday is centrica, will sell about 350 million shares to institutional investors. This is to reduce its debt. Guy thank you for much, indeed. The turkish Prime Minister is set to step down, the increasingly public power struggle between the president is taking its toll on local market. Turning us now with more is william jackson, senior emerging markets capitalists. Investor, how should i read this situation . We know that the president wants an executive presidency. Our people surprise that it happened as quickly as it has . With politics, things can always unfold quickly. Political concerns have died down a little bit, but with hindsight this cant be too much of a surprise. The much of last year, investors were concerned the president wanted a new constitution to strengthen his position and allow him to implement some of his more populist policies. Guy is democracy effectively over in turkey . It feels like it is moving in that direction. William if you like that is a bit of a strong statement. We saw from the elections last year, the resulted in a hung parliament. That demonstrated the strength of turkeys democratic institution. Guy let me put it in a lower, checks and balances, where are they . William those seem likely to be eroded if he gets his way. Which is the most important factor for the markets right now . What the fed does, or what happened politically in turkey . William that is a good question. I think, in the near term, Political Uncertainty will weigh on the turkish economy but the fed may be more important. There was significant concerns about Political Uncertainty, was a big moves in the market today after the election that resulted in a hung parliament. The economy did remarkably well. Perhapsthe bigger risk lies in the turkish dependent on for a capital foreign capital flow. Then turkey could face problems. Guy i talked about the Central Banks earlier. Could we now see rates moving . Already they have started moving in that direction. Inflation has now fallen within the target range. The president and his of fighters 90 his advisers may be putting more pressure on the Central Banks. Guy defined that for me, what are we talking about . Foriam given the outlook turkish inflation is pretty bad. That is the starting point. 6 only onesunder in the past five years. That backdrop,t Interest Rates should be run a percent or 9 , anything below that would be seen as perhaps a bit too aggressive or a submission to political pressures. Betteres the relationship, im not sure it is, but the more pragmatic relationship from both sides the relationship with the eu . Does that change the investment narrative . William i think the eu talks have been rather positive. Actual point of has been a long way off. To become a member, turkey has to pass reforms that previous regimes that is all encouraging for investors. They benefited tremendously when others have done this. The capital flows, and the investment that arrived because of that. That could be a positive step for investors. I think this process is being tied up with that. If he than the process may start to reverse. I think that would be worrying. Guy does it matter who replaces him . It is still very early to say. We may see more details over the next few weeks. That is something we will be keeping an eye on. His recentiving tendencies is reducing someone was more malleable. There are reports that it could be his soninlaw that is put in a Prime Minister. Guy we will leave it there, thank you very much. , theve this meeting turkish Prime Minister is meeting with the akp, the governing Party Central executive board. With a that is happening at 9 00 , or 11 00 over in turkey. We then think that there will be a press conference which will follow that. We understand there will be that weely a feed of can take you to. Plenty more of that coming up was to we understand the president will not be there. Up next, we will carry on the conversations rounding china. Bet. E soros is wrong on a we will get a view from our guest. Guy welcome, lets talk about some of the stock movers were paying attention to. Restarting operations in the jubilee division which has been a bit of a handicap. Repsol numbers out looking very solid. Did well in chemicals and some downstream operations. Downside, with its placing, is the big loser. This is an the move, Bloomberg Business flash. Juliette just talking about repsol, it did beat analysts estimates. The First Quarter adjusted net income dropped to 572 million euros, shares are higher this morning although repsol is the worstperforming major oil test european oil stock over the past year. Reported fourthquarter profit beat analysts estimates, the uks former telecommunications monopoly said 14 ,ngs and taxes rose those figures were vaulted by the acquisition of mobile operator ee, britains Largest Mobile Network which bt acquired at the end of january. We are told this morning it is investing in higherspeed broadband. A unless we have a degree of literary uncertainty, we cant with the span that sort of money. Cant say we will invest, but not guaranteed a relation to the root return in the migratory outcomes. What were looking to do here is spend in the infrastructure. By that, we will improve the quality of the net worth. Juliette Credit Suisse is carrying out another round of cuts. Most of them in the trading unit. We have been told a third round of cuts is planned for next month. Willt suisse has said he eliminate 6000 positions globally this year, with half already cut. Elon musk has of the company in the most ambitious automotive production timeline since the model t ford. Times the number it produced last year. That figure will go to one million vehicles by 2020. The news came as tesla announcing firstquarter loss excluding certain items. Deadpooluperhero hit may have saved the quarter for 21st century fox. Analysts estimate in the three months of april. L cut over deadpoo 13 times more than what it costs to make. Fox also benefited from higher ad sales from its news channel. Apple music will have a makeover after receiving mixed reviews in losing out to spotify. People familiar say the 10 a Month Streaming Service has not performed as expected. There are plans to change the betterterface, and integration with itunes. An apple spokesperson declined to comment on this story. Guy lets stay in asia. Alibaba earnings will be released in over an hour. Profits more than doubled in the last year, but the stock has not reflected that with investors treating it as a proxy for the slowing chinese economy. When i get the guest says those fears are overblown. Lets join sean ryan, the managing of the Market Research group as to why is alibaba not synonymous with china . You could argue they are healthily correlated . Alibaba and the economy is fairly synonymous post about but what people like george soros is taking is being overly scared about the economy. We need to break it into two parts, the first would be industrial. The consumer side is really strong. The ecommerce sales are still growing 25 or 30 . Willpect that alibaba outperform Market Expectations for two reasons, the first is they have done a good job spurting out there Logistics Supply chain. The tumors over there are still having rising incomes, starting to shop a lot more. The second thing is, the last six weeks, the state media has not criticized alibaba as much for counterfeit issues. Consumers are starting to trust alibaba a lot more. Those are the specific issues come also ecommerce will do well with some of the tax changes coming to the last couple of weeks. Mistake,n, you saw my if i go to the a r function, baba has not a single sell rating, that the right call . Shaun it is the right call now. I have been very negative on alibaba in the last year. The reason ive been more on to jd. Com, is better trust with wealthier consumers in tier 1 cities. There are more higherpriced purchases being made on jd. Com. But what we found the post chinese new year. Because of period, the fears and the real estate sector, consumers are cutting back on their spending. But theres the third and fourth year tier consumers got their bonuses, not eating fired, thats why they are buying on alibaba. That is why i think they will outperform and do better in the next 36 months. The most positive i have been on them in the last 12 months. Aggregate price target is 96, just shy of 100, is that realistic . Shaun yeah, i do think it is. I am more of a consumer guy. When i have been meeting with hedge funds, i met them in new york, hong kong, to give us too much negativity on alibaba. Up,ink it will be pop expectations for them are far too low. Importantly, because of the new tariffs and taxes, the government is shifting more domestic consumption into china. A lot of consumers are moving away from the vertical ecommerce players and going to jd because they wanted bigger ones. It let better relationships the government to bring in more products taxfree. Or, it will be a much more streamlined process. 75 of chinas Online Shopping with a capital by of alibaba, that is an amazing number. Is it just a perimeter thing . Theres the aggregate number just get bigger and bigger . You look at growth rates versus wonder, if you think about the people they will be serving, with that number just get bigger and bigger . Be spendingu will quite as much as the high and the guys, but it gets larger. Shaun yes, the overall market is going to get bigger with more population buying online, and more people getting smartphones. Chinese consumers are scared about buying products made in china. They dont trust it, theyre worried about bad quality. Theyre looking at buying at blackmoors, which is a company incal australia. So they are trusting the big overseas platforms like jd, and alibaba, to ship in the best products of the best rate. It is a mix of the overall population getting bigger, and people feeling more confident buying online. Just a final question, you are a consumer guy, nevertheless, how do you see the yahoo story resolving itself . You think that baba can just go out and buy that stake . Shaun i dont see alibaba buying yahoo , they are a messenger to fired Melissa Meyer years ago. I think there are a lot of regulatory issues in the United States about whether the American Government would want alibaba to control that. Im not sure how they will split that, but im pretty sure alib aba is not going to buy it. Look moreey need to at selling into southeast asia, which is why this made billion dollar acquisitions in india. The u. S. Government Just Announced their increasingly dutyfree amount that americans buy from overseas from 200 to 800. That could jumpstart sales from alibaba to americans. Yahoo is just a mess right now. Alibaba is too smart to buy into that. Guy thank you very much, indeed. Next, the Growth Prediction the billionaire bond investor says the fed may launch in a year or two. Some investors agree. Guy welcome back, you are watching on the move. polls are open for the london mayoral elections. Jobless claims it out of the United States in half an hour, after that discussing japanese european relations at a News Conference in london. Lets talk now about the fed, speaking last night in minneapolis, warning the might be in a new normal. Of slowingeriod growth. Overallconomic growth isnt climbing very fast. That implies that we maybe in for a Slower Growth period in the future, and we dont fully understand why that is. Guy fed has a lot to think about right now. A donald trump residency, speaking at a conference he said if trump wins the white house, the ratio of debt to gdp will arise. Reagan is paying attention. Where does this leave us right now . We are joined by richard jones, that conference has generated a lot of headlines. The market is all over the place right now. Seemsd ther eie is there to be a slow evolution. Investors have always been a little more cautious about u. S. Growth, because with cnet in market pricing. Now with a rate hike by the end of the year it is pretty much a coin toss. I think you will see more and more investors thinking about the next move. Mike it more additional quantitative easing. Citigroup has mentioned there talking about that. Thates in with europe said are very defensive, and very cautious. I think that is not just outside the u. S. , were seeing that. What to do,nt know so theyre sitting on their hands right now. You wonder how long that carries on for. It is hard to make big investment conclusions. Guy investors look at the whole we have had someone he false start only to be knocked back by political considerations, slower Economic Growth than we thought. I think looking ahead now they see that environment is still the same. I think, as a result, their cautious at looking towards easier Monetary Policy rather than tightening. Guy given that, adam fisher from commonwealth saying he 30 year japanese bond may be the most overpriced security in the face of the earth. He is saying that is massively saying it unwinds tomorrow, just saying overpriced relative to reality. The reality is a weird right now. Inhard its a represent real terms, a 10 year is low by any standard. If you look at other bond market it is to going to be attractive. That will cap u. S. Yields as well. I think it is consistent with what we have seen. It is solid, it is unspectacular. Should bege growth hired them what it is right now. That will only be welcomed by the fed. Richard jones, thank you very much joining us from bloomberg first word. The pulse is coming up next. With at this meeting taking place in turkey. And the Prime Minister is having a meeting with the party this morning. There will be a press conference after that. Ferro and i will be on Bloomberg Radio very shortly. Well kick around this story, and what is happening with the fed. All that coming up. Francine turkeys tournaments. The Prime Minister is expected to step down after losing a power struggle with the president. Trump. T of kasich quits. As thed for billionaire takes the reins of the republican party. Has alibaba hit the brakes . China . H of a proxy is in francine welcome to the pulse