In spain, new infections slowed slightly but officials are worried about a second wave of covid19, now that the country has emerged from a strict lockdown. In portland, oregon, another night of violent protests. Targeted a u. S. Immigration and Customs Enforcement building, spray painting the building, breaking windows, and shining laser lights on agents. Authorities declared it a ride and used tear gas to break up the crowd. Violence is ripped the city for three months since george floyd died in Police Custody in minneapolis. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie it is 1 00 p. M. In new york, 6 00 p. M. In london, and 1 00 a. M. In hong kong. Im vonnie quinn. Welcome to bloomberg markets. Here are the top stories we are following from around the world. A stumbling block for the u. S. Labor market as applications for Unemployment Benefits increase again to more than 1. 1 million. Re n allen ceo peru cap joins us to discuss peru cap to discuss the american consumer. We will talk to the Miami Dolphins vice chair Matthew Higgins about what is in store for football and how he is using technology to battle the covid19 pandemic. Lets get a quick check on the markets. Up. 6 . Aq the s p just up a 10th of a percent. The dollar weaker once again today. 106. En well below Just One Company im looking at, estee lauder, looking at layoffs. More importantly, not looking to open up beauty counters, closing others, saying the lipstick era is dead. The pandemic has thrown the entire economy a curveball, and even though we saw a boost in next . N july, what happens Companies Like ethan allen bearing . Farooq kathwari joins us now. You had earnings that did not disappoint. There was a range of analyst estimates. Even though that im sure you would have liked to do better, you did well. Is that a one quarter thing while customers were at home improving their home environment, or is this a pattern . Well, considering in march, we had to furlough 70 of our workforce. 200 ofto close almost our Design Centers in north america. And then we come back. While we were closed, our about 1200 we have interior designers. They were able to work with clients online. In the last few years, we have added a lot of technology to personal service. If we had not done that, we would not have this business. In june, our orders were greater than last year with about less than 50 of our workforce at that time working. Today, 70 of our people are back at work. This is a new era. Today, unless youre able to provide a great service, especially at the level of product and design that we are doing, combined with technology, then you are not going to make it. Right now, Companies Like home depot and lowes are doing well because people can go and pick it up, take it home. In our case, we provide service. We have integral designers that make house calls. Limited, but people are starting to go back. We have seen our July Business doing good. August is holding up. Forward, your question is really about the future. Oursnk Enterprises Like are going to benefit with what is taking place. Another thing i must mention is this. Everybody, especially businesses like ours, is challenged with supply. A lot of people went offshore. Productsin 75 of our made in america. They were closed. They are back now. That is why i think we have an opportunity to continue to do well. Vonnie you made a couple of references to things being back, employees coming back, and you also made mention of your supply chain, and that is one of your selling points. More manufacturing is done in the u. S. Compared to other countries impaired with competition. Give us a percentage of who is back, suppliers and employees wise. You furloughed 3000 employees back in april. Farooq yes. Associates of our working in our supplyside, manufacturing in vermont, north carolina, sicko, honduras are back, but with limitations. We had a fairly large operation, but the conditions there and in honduras are tougher. Government requirements are tougher than what we have in the u. S. , interestingly. In our manufacturing and logistics, over 95 of our people are back. We want to be 100 back. Close to 70 are back. And the other 30 , maybe half of them will get back, and the other half may not. We have learned to do things differently than before. Vonnie wholesale sales were down compared to the year earlier. Who was not buying, how do you get that back . You talk about wholesale, that also represents our retail division, so basically wholesale is retail. In addition to our retail network, we do business with the u. S. Government, state department, diplomats. That has held up. When we look at the business being down, it is really of the retail network. Close to 80 of our business. Vonnie you operate in the middle east, asia, a handful in canada as well. Obviously, cobit has impacted the entire world. Some areas have dealt with it better than others. Can you give us an update on whether those stores are closed, if they will reopen . Farooq we have over 100 locations in china, and they were all affected first. They closed earlier. In china, most of the stores are open. Canada, all open. In the case of the middle east, interestingly, they have been much slower in opening. Arabia, dubai,i kuwait, right now almost all of them are open, but in the middle east, very slowly. Vonnie i want to ask you about the acceptance of Kamala Harris for Vice President. You were very vocal at one time on immigration in the u. S. Obviously, that situation has changed over the last couple of years. How do you see immigration being dealt with Going Forward . Farooq america is a land of immigrants. You came from beautiful ireland. I came from the beautiful ashmirins of cashmere k and ended up in brooklyn, running one of the most iconic american brands. That is america. The diversity of america is changing. I think it will continue to change. America is a land of immigrants. Whether it is ethan allen designs we make the american home. We are an american company. But when you look at our designs, they come from all over the world. England, france, china, india, everywhere. Harris,about senator this is an important era. She comes in with a perspective of bringing in a background of south asia and africa. When you bring that to Vice President biden as you know, his family also came from ireland. As we go forward, there will be challenges. There will be some people that dont like it. But the people coming in also have a great responsibility to contribute, make a difference. They should not take it easy. Everyone that comes must contribute. If they do, america will be strong. Vonnie one final question on the stock. 20 , down 25 year to date. The trading multiple is about 20 times earnings which is in line with some peers, not others. Is the stock undervalued . Farooq tremendously. See where we have come from. 40 of ourchased stock back. We have invested a billion dollars since we took the Company Private in capital expenditures. We have paid down half 1 billion of debt. We have one of the Strongest Networks around. Today, we are cash positive, even in this. We ended up with a positive 14 million of cash at a time when business was down in all of our Design Centers and manufacturing was closed. It reflects the strength of our company. I think we are just getting started. Vonnie thank you so much for your time today and good luck in future quarters. Farooq i just want to say, today is the birthday of one of my grandsons. I want to wish him happy birthday because i think he will be watching. Xavier. , happy xavier kathwari birthday. Us, theathwari joining ceo of ethan allen. Some headlines on bayer. They will pay 1. 6 billion to claims. Most u. S. Essure this was a contraceptive. They are not admitting wrongdoing or liability in the settlement but does resolve. S. Claims. F the u it does not impact litigation and other countries. , what would a biden economy look like . We will take a look. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. Polls currently predicting joe biden will win the november election. To prepare for a potential bonded administration, proposals put forward by his campaign suggest higher taxes for individuals and companies. On superdens victory tuesday sent equities soaring, and his election of Kamala Harris as running mate also lifted stocks. Rabbit equity donors are flocking to the campaign, donating 21 million so far, while giving President Trump just 3. 6 million. But parts of bidens policy proposals have investors worried. His campaign has outlined 3. 4 trillion dollars in tax increases funded by rolling back parts of the 2017 gop tax reform plan. This includes a 1 trillion increase in new taxes for corporations, bring the Corporate Tax rate back up to 28 from 21 as a way to provide revenue for health care, climate , infrastructure, and education policies. For individuals, biden wants to restore the top individual tax rate to 39. 6 , up from the current level of 37 . He also wants to impose a tax on Capital Gains and cap tax breaks for the wealthy at 20 . His plan would also reveal the state and local taxes which is unpopular in many high tax states. Bidens tax plan also targets Companies Like amazon through a minimum book tax which imposes a 15 minimum tax on companies that reported more than 100 million in net income in the united states. But paid no federal taxes. Vonnie tune into bloomberg tonight at 9 00 eastern for special coverage of the Democratic National convention. Joe biden will be accepting the partys president ial nomination. Covid tech, investing. Discussing the opportunities in technology that helps businesses reopen safely with Matthew Higgins. We will also be talking about the Miami Dolphins. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn. Coronavirus lockdown being lifted worldwide in various laces, businesses are looking for new ways to avoid exposing their customers and staff to the virus. Rse ventures is investing in the space. The companies ceo joins us. He also has some involvement with the dolphins. Healthy, whatut it is in terms of a coronavirus fighter. Everyone knows about uv light. We are born as kids to put on sunscreen. For a long time we did know that there is a spectrum of uv light that can disinfect spaces like hospitals, but you cannot have other people around. In the last 10 years, scientists have discovered another spectrum of uv light that does not reach the earth atmosphere, so we are not interacting with it day by day, but the wavelength is short enough to be around humans, but it is deadly to pathogens. Influenza, mercer, and coronavirus. The reason why is because the virus is so small, 222 is powerful enough to penetrate the membrane and deactivate the virus. It is a really exciting technology. The applications are endless and indoor spaces. We decided to get involved and back the technology. Vonnie you are using it at the dolphins facility, which says a lot. Also places like magnolia bakery, space needle using this technology. Are there other ways for this technology to get involved . Nowhew the priority right is to build awareness, answer questions. The number one question i get is why isnt this everywhere . The answer is it is new, there is a suspicion around science these days, so you have to separate fad from reality. We are explaining how it is saved, how it deactivates. With recent guidance from w. H. O. Particles, itosol is clear that we need an indoor solution that is continuously cleaning the air and surfaces. I strongly believe 222 is the answer. Anyone can get involved. Other what is to stop companies from getting involved . Is this open source, is there proprietary ip . Frankly, there is ip, patents, but i hope Companies Get involved. I think this is a multi trillion dollar space that has applications around the world. I dont care how many competitors get involved. I assume more will. You cannot patent a spectrum of the sun that has been around for 4 billion years. Healthe has a lot of patents, but i think there will be more competitors as more people and Companies Get comfortable adopting it. Vonnie you have a great track record, investing in digital and a hugeogy companies, so track record in being successful. Is soccer going to be more popular because of the pandemic . Matthew quick background, we started an International Champions cup six years ago to bring the best International Clubs to the united states. The reality is, we love our sports but we also love the best. The best happens to be in europe. It started as a labor of love, invested difficultly, i would say ahead of the interest. But fast forward, the Tipping Point has been more than reached in the u. S. We put these matches on in michigan, we have 100,000 people there. Hosted real madrid and barcelona a few years ago in miami, and it was fantastic. I think there is endless upside for soccer. Vonnie we dont have too long to get somehave dolphins questions in. Who is building up the team, who is going to be quarterback . What do they call them . Is he going to be ok . Matthew say again . Wasie one of your players carted off with a leg injury yesterday. Who will be quarterback to start the season . Matthew i will leave you so frustrated but i dont answer any of the sports related questions. I leave that to the coach. I will say we are really excited about it. Our big focus is keeping and safe solthy that we can have a great season. Vonnie what about fans coming back . Do you see it happening this season, next season . Should College Football go ahead . Matthew frankly, these are all driven by municipalities. It depends on where you are. I happen to live in new york. At the moment, we are on the other side of the pandemic. Florida is really in the midst of it. Our facility is in florida. So while we need to have national policies, we need to take this on a municipality by municipality basis. Our job is to keep our players and coaches safe, put ourselves in a position to welcome back fans when we can, but it will be driven by florida. Vonnie our thanks to you, Matthew Higgins, ceo of healthe. Coming up, initial jobless claims rocket above 1. 1 million. Mark im Mark Crumpton with bloomberg first word news. President trump is reaffirming his plan to pull all u. S. Troops from iraq as quickly as possible. He met at the white house today with iraqs Prime Minister. The two discussed ways to rein in proiran militias in the country and counter residual threats from Islamic State sleeper cells. They are currently more than 5000 american troops in iraq. Leaderia, opposition Alexei Navalny has been hospitalized with suspected poisoning. The antiputin politician is in grave condition. Aides believe that something was put in his tea while he was meeting with activists in siberia. China says trade talks with the u. S. Will resume soon. The sides were expected to talk last weekend on the progress on the phase one trade agreement. President trump says he called off those agreements, saying i dont want to talk with china right now. German chancellor Angela Merkel says the European Union must avoid National Lockdowns on the continent. Spoke alongside Emmanuel Macron and the two discussed how to deal with the resurgence of covid19 across europe. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Greg im greg bonnell in toronto. Welcome to welcome to bloomberg markets. Vonnie im vonnie quinn in new york. We are joined by our bloomberg and Bnn Bloomberg audiences. Here are the top stories we are following from around the world. Another 1. 1 plus million americans filing Unemployment Benefits, dashing economist oaks for a second week of fewer than a million claims. More on the state of the labor economy, next. Tough conversations at the u. N. Today. President trump said he would call on the u. N. Secretary general to restore all Nuclear Related sanctions on iran in a bid to force them back to the negotiating table. We are getting responses now from iran. And we will hear how adrian de valoisfranklin, the cofounder of castle ridge asset, is delivering alpha in a tough year for quants. Greg interesting move today. We heard from the fed yesterday afternoon, notes of caution in those minutes, had investors thinking about the other reason that body is cheap. Then we saw those jobless claims for the week, a little bit higher than expected. Yet, the markets are moving higher. There is the nasdaq, clearly the winner. Of inms it is a story tech we trust, money moving back to those names. Apple breaking that to trillion dollar valuation. Some weakness in crude. There are the u. S. Jobless claims ticking higher. This is the cause for concern. As we see this, we worry about stumbles in the u. S. Economic recovery. Lets get some insight on the labor market and also some of the upheaval we have had in canada when it comes to the second most powerful job in government. Avery shenfeld is with us. Lets start with u. S. Jobless claims. We watch them carefully in canada because as goes the american economy, clearly goes the canadian economy. Avery certainly. Not great to see this uptick in numbers. I dont pay much attention to the weekly numbers because it is difficult to seasonally adjust one weeks data. If you look at the data, it is only trending down slowly, which suggests the great steps forward we took getting people back to work is now giving way to a sluggish pace. Even if we are still gaining jobs, we have a long way to go to get that Unemployment Rate down. We also saw in continuing claims , that has been trending down. That looked a little better, but remember, some of those people are simply running out of their eligibility for state Unemployment Benefits, may be shifted over to a special pandemic related program. But the two numbers together, it suggests the easy wins in the job market, the things that could be opened up without much fear of ramping up covid are behind us, and now we have the tougher sliding ahead, a longer way to get jobs back in sectors that involve a lot of facetoface contact. Vonnie what happens when people start rolling off unemployment rolls . Will congress let that happen . Avery that is one of the worries, in addition to the fact that congress hasnt been able to get its act together to approve something similar to Unemployment Benefits at the state level. There is a federal program that will give them half of what they were getting, but that is also temporary. It diverts funds from other agencies that will run out quickly. Without that support, we will lose some spending power that we enjoyed who the pandemic. Spending power in the hands of people who will spend every dime they get. We are still hopeful that congress, before the election, will somehow reach a deal. Even if they cannot reach a grand bargain on everything in the stimulus plan, will recognize the urgency of getting more money in peoples pockets who dont have jobs. Greg we know western economies have spent big through the crisis, the same is true in canada. We had a seismic upheaval in the country, the finance minister abruptly resigning. We have a new one. What are the challenges for g7 nations . Avery the reality in the i believe harry truman had said, the buck stops here. That is sitting on the Prime Ministers desk. Whatever would have been done under the former finance minister, whatever the plans may be for the new minister, they have to meet the test of what the Prime Ministers Office wants to see. In the end, i dont think there has been a big change in the broad thrust of policy in the near term. Very much today on the governments agenda is they are announcing what will happen to the people who are rolling off an expired benefit for unemployment for those who do not qualify for regular Unemployment Benefits. So they are going to extend those payments. After september when the government comes back they will Start Talking about longerterm initiatives to spur growth. But by and large, remember a lot of the spending that the canadian government, u. S. Government, and others are doing right now, is emergency spending for unemployed, support for businesses. Over the next two years, we are hopeful that that spending will come dramatically down as the economy recovers. That will leave some room for new initiatives while still allowing budget deficits to decline from here. There is money available for the longerterm plans as long as governments to let the deficit and wind down some of those emergency programs. Candidacy any downgrades, any danger of that happening while the deficits and debt is so high . Avery we did have one agency, fitch, knocked canada off of the mantle. What in terms of the borrowing cost for the government, they have never been lower. The bond market is sort of like an American Idol competition. Even if all of the singers are singing a few sour notes, you have to vote for one of them. That is true in the bond market as well. It is pretty hard to find a government that is not running significant deficits right now. To some extent, whether you are aaa or aa, that is still a safe place to park your money in a world, after all, a lot of bonds have negative yields on them are in are less attractive to investors. Whether there is a downgrade or not, i dont think it is that material. What really counts is government borrowing costs. Vonnie thank you for that, avery shenfeld, chief economist at cibc. Coming up, mike pompeo pushes the Un Security Council for a snapback of crippling sanctions against iran. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. Our stock of the hour is camping world. Our vstoxx showing the difference. Abigail doolittle is here to explain. Not every day that we get to talk about camping world but the shares are plunging, the worst day in three weeks. This is one of the larger shareholders is cashing out of 6 million shares. The reason they are, take a look at the gains on the year. Up 129 . Other similar rv stocks up in a huge way. This has everything to do with the pandemic. This is the year of staycations and camping. Lots of folks are camping this year. You can see air travel is one reason for that, only 25 of last year. Operating athotels 50 occupancy. Of a hotel room is about 25 cheaper but folks are choosing to camp or rv. Sales up 11 in june. Some National Park visits are up sharply from 2019, so this is the trend of 2020. Greg that is huge, makes sense given the shift we have seen in the pandemic, but does it translate to sales, growth for camping world . Abigail sometimes these trends are easy to talk about but they dont show up in the numbers. In this case they are. Sales up sharply. Used rvs also up 11. 8 . Services and other are down. Financing is up. It vote it seems that folks really want to get rvs and hit the road. Basically a traveling home. Where staying at home is happening most, the tristate area. The top state relative to staying at home, new york. Ready to percent are staying at home. Some of it probably has to do with the quarantine. If you travel outofstate, you then have to quarantine for two weeks. Interesting trends because of this pandemic. Camping ,rvs among them. Greg thank you for that, abigail doolittle. The president calling on the Un Security Council to renew sanctions against iran, to force them back to the negotiation table. Key allies say they will not go along with a plan to reimpose sanctions. For more, we bring in bill faries. Where are we at at this hour . This is a fastmoving story. Bill mike pompeo is heading to the United Nations today. He will hand a letter over to the u. N. Secretary general ofling for this snapback sanctions on iran. Basically that starts a 30day clock or the Un Security Council to take up this debate. They will most certainly reject the u. S. Proposal and try to get the Iranian Nuclear deal extended as it is. That will probably get vetoed. Then we enter uncharted territory. The u. S. Claims that will essentially kill off that 2015 nuclear deal. Every other member of that agreement, including americas european allies, say that america does not have that standing. Essentially we have two upcoming deadlines. Then aday period, and 13yearold arms embargo on iran expires. Vonnie the timing of all of this is rather interesting. We literally just had trump and the iraqi Prime Minister issuing a statement on what they are calling a mutual aim for security. Last week, we had the u. S. And the uae come to an agreement about business ties, diplomatic ties in the middle east. Does it feel like the president is trying to change relations in the region such that iran feels very isolated . Bill certainly. Didnter thing that you mention was the electoral calendar. When you talk to the trump administration, the view ira they view iran as a big piece to bringing peace to the middle east. To forcering allies iran back to the negotiating table, the administration hopes to get a stronger nuclear deal that will keep those weapons out of irans hands permanently. Iran says this is blackmail and they will never agree to this. Their side, they are probably keeping their fingers crossed for the november election, hoping President Trump is not reelected. Greg i was going to ask about that because you mentioned the electoral politics, perhaps why President Trump is acting now. For everyone else, do they have the wiggle room to wait for the election . To extend thisre outcome of the Security Council has 30 days for this proposal. That takes us into september. The arms embargo expiring in october. If you see that embargo expire and you have china and russia gaming to get into tehran to start selling weapons, that will trigger a very forceful u. S. Response right before the election. Secretary pompeo says the u. S. Would consider additional sanctions on both russia and china if they tried to do that. All of that would be days or possibly a week or two before the president ial election. Vonnie fantastic stuff as always. In about 13 minutes, the secretary of state meeting with Un Security Council president. 3 00 hour, they will deliver remarks to the press. Our thanks to bill faries. Coming up, castle ridge develops an a. I. Platform that is starting to outperform the competition. We will speak to the ceo, next. This is bloomberg. Greg im greg bonnell in toronto. This is bloomberg markets. Welcome back. Lets talk about not only quant investing, but actual Artificial Intelligence when it comes to investing. One of the best out there run by a robot. Lets bring in castle ridge ceo adrian de valoisfranklin. We are moving beyond quants. These are people that write the algorithms, but Artificial Intelligence is doing better than the quants. Absolutely. The traditional quant market was human driven. Portfolio managers would design the recipe to beat the market and turn it into an automated system. But it is still full of human bias, and they tend to be static. When market regimes change quickly, those strategies are prone to falling down. At castle ridge, we are focused on self evolving powered intelligence strategies that are constantly evolving, adapting to changing market regimes. Over the past several years, we have been working on a proprietary ai, the brainchild of our chief scientist. Presents a brandnew type of ai that allows the system to constantly learn and adapt every day to the changing regimes. That has worked out quite well for us this year with our Market Neutral strategy, low volatility, and produces all the returns while the markets were crashing around it, others caught up in the quant crash. Vonnie it is fascinating. Wallace shifted from long to Short Airlines and cruises and went long biotech and pharma in february. That isthat happen, if an ai platform and it is not taking macro into account . Adrian the system is just able to see much farther than the average human. Sevend i can maybe juggle variables in our mind at any given time. The system is analyzing thousands of securities in the market each day from 42 dimension simultaneously. Both today and over their histories. It is looking at the interrelationship of securities. Look at the market like a flock of birds flying in different directions. All of a sudden, individual birds fly away from the flock. Wallace zeros in on those and begins to ask why is this stock hitting differently from its peers . How was it reacting to news, social media sentiment . That is often indicative of information that is imprinted on the security that is not widely known yet. Plays, could make macro shifting between a and short positions, like shorting airlines and cruise lines at the right time in february and march, but also starting to pick up on events before they are publicly announced. Just yesterday, the system was building positions for pharmaceuticals ahead of the announcement of a j j acquisition. Last month, the system was picking up positions in mode during before they announced positive news around their potential Covid Vaccine trials. When youm curious, talk about ai powering these traits, what are your controls over it . A couple years ago there was a story about two Artificial Intelligence programs who were supposed to communicate in english but they decided that it was not efficient, so they pulled the plug. Adrian absolutely. A lot of ai these days is traditional methods like neural networks, deep learning, which has their place. It is great for things like teaching your sulfone to know when it sees your face, or teaching your computer to play chess. But the question becomes, what happens if the rules of chess change . You need a system that can adapt. When we created this algorithm, we knew it had to be transparent, able to explain to us and the client why it is making every single decision it is making. It is no good if the decisions are good but it is a black box. We have to have transparency and we have to have something that is truly differentiated. There is no point getting into the same crowded trades and strategies that others are trying to do. Instead, the system developed its ai strategies from the bottom up, instead of top down. We didnt design with a strategy was. We gave the system limits. On its own, it determined what the proper signal to noise ratio was, a oneweek outlook, what types of information was important to it. So we avoid those risks of having the computer being a black box. Vonnie briefly, fundamentals have been deteriorating as a driver. Does it matter if they start becoming important . Adrian the system is dynamic, so it changes the weighting of patterns depending on what is going on in the market. We saw that last week with sector rotation out of technology. The system is definitely picking up on that, it understands market sentiment, when it is time to shift dynamics. Every night, the system is running through many iterations of itself. Vonnie a fascinating development. We will chat with you again soon. Adrian de valoisfranklin, cofounder of castle ridge asset management. This is bloomberg. It is 2 00 p. M. In new york, 7 00 p. M. In london. This is bloomberg markets. A new day and the same story. Carolyn tech is in charge and a new record. Tesla touches 2000. Nagglobal woes continue to sending havens and treasuries higher. There is an unexpected uptick in increasing back towards the one million mark signaling a long road ahead. And this Ridesharing Company announced it is suspending operations in california on on itst, making good promise to stop business rather than reclassify employees as employees share stumbled, that and much more coming up. Romain