Well. Geordie joining us is johnson. How much more shakeout do we get from investors having to rebalance . As a bustedsla growth story. The revenues peak in the Fourth Quarter of 18. 690,000 of capacity. If they hit delivery members this year, only 63 of reported capacity. Building two new factories. Completely is mismatched. We think it is coming to the forefront in the stock. What gets us to 19 . Tesla has been unprofitable. Subsidies toed sell credit. People do not need to buy tax credits anymore. You look at the second quarter. Stockbasedthe conversation. Back to they go losses. Right now, it is single digits. In china, a big disappointment. Cars in aover 20,000 month. What gives you the confidence that now was a turning point . This not just that squeeze we are all talking about after call options are out of money. Great point. The numbers have been getting worse. S p inclusion. In 2015, elon musk said in two years, tesla cars are able to do 200 miles it on a single charge. 19, elonrst quarter of musk said they would never need to do another and would never lose money again. Roughly a month later, they lost 7 million. Their biggest shareholder is selling back. Raises capitally on these promises. Thatyear, one million and has not happened. Boost saying they would make ventilators. I think people realize what they own with tesla. I think the numbers are starting to come out. What do you make of the decision to get together, building trucks . That is likely to eat into what tesla wants to do as well. What do you think versus tesla . A hard comparison. It suggests to me that the Business Model was not necessarily what they thought. I think the real issue for tesla is people think they are technology leader. I do nothing the bulk of people looking at this understand that. The batteries, anyone can buy. Consumer reports put out or a last friday. It was a scathingly negative review. You could potentially have a revenue reversal. A lot is out there in addition to, competition. We will start to see that. It there. Eve thank you. Lets carry on and talk more about the tech selloffs and the options playing. We have seen this ramp up. Absolutely. We have seen a huge emergence of Retail Investor activity and small trader activity. When they accumulate shortterm options, it is a very big position that Market Makers have to invest to hedge those positions. Those hedges unwind quickly. Effect as amplified we were seeing through august. Is the unwinding we are seeing softbank or a Retail Investor . The other thing is retail has focused on shortterm options. Softbank accumulated longterm additions. Reducing their risk to equity markets. Few are not that big, a billion dollars of exposure. That is torqued by the scale of the option impact. Lets talk about the time element to all of this. People are talking about shortterm calls being bought. How long are many of these positions on for . And how many, do you get a sense, are out of money . Shortot of this is very term for about two weeks. Rallying in are not those positions are losing exposure. You are talking about one week or two week options. In the delta exposure of those positions when you see nine or 10 nasdaq pullback. What are you watching . We are seeing huge flows in facebook, amazon, microsoft, tesla, eight x increases over historical levels and average daily call volume. This is truly unique. People like to say the retail cannot have an impact on markets. It has not been involved in options in 20 years. People got so burned on the aftermath do you get a sense that they will get an opportunity . Market makers involved are focused on it. Institutional is usually focused missed pricing between securities and opportunities created in this type of environment as opposed to speculation. A great deal of focus. Position. E they can makers how does this end . Done andptions just then they stop selling . What happens . Yes, i think ultimately the level of risk is just too big and it ends up those that. Mid june quick selloff, we keep moving lower. It is certainly the way that it ends is with losses. Coming up, the biggest concern for investors, we will talk about business and Investor Sentiment with the head of America Asset allocation. This is bloomberg. President donald trump ramping up his rhetoric to decouple the u. S. Economy from china. President trump we will end our reliance on china once and for all, whether it is decoupling were putting in massive tariffs like i have already been doing. Companies that dessert america to create jobs in china and other countries. If they cannot do it here, let them pay a big tax to build it someplace else and send it into our country. We prohibit federal contracts to companies that outsource to china. Say president ner trump will be better for the economy. 500 Business Owners with at least 1 million in annual revenue. Joining us now, head of America Asset allocation. Rhetoricstors here about decoupling from china as we head to the final weeks of the election, what is the reaction . Where does this fall on the scale . Two perspectives. One is the election is telegraphed and so todays comment by President Trump is consistent with that. When we look at polling results we did recently of investors, really this includes Business Owners, first and foremost, the u. S. Economy, jobs, covid and the pandemic. In terms of what they are focused on regard in regards to be election. Does that mean this is not priced . The would not say that stop risk has been telegraphed. I think we need to distinguish between the trade risk, longerterm strategic risk. Regardingen a move conventional trade already down that path. 5g and things of that sort, a separate issue. It is something from a market perspective which is well acknowledged. I do not think it is from a market perspective. I feel the rhetoric has gotten worse in the last few days. Exclusive we were going to ban some of cotton imports from china, 30 of imports. He served big numbers that could affect businesses. At what point do you feel they take this seriously on a different level . It is easy for both sides to make pronouncements to get reaction on the others. Just a couple weeks ago, there was a call between the u. S. And china officials. The takeaway is people are satisfied in both parts, so when it comes to action, we will get heightened rhetoric. Gona would respond as we through that campaign. We separate the noise versus actual actions. It is a greater concern. There seem to be a multitude of factors in u. S. Tech stocks and more broadly. Itbably a small part of coming into play, the election and positioning. What are you advising your clients . Seems to bet related more toward investor positioning. The story from our perspective has not changed. U. S. And thew the Global Economy continued to recover. We might draw parallels but it is important to provide a context that we are in early stages of recovery. It is not excessive in any way. It looks neutral across the board. We have not seen Significant Fund flows into riskier products. There is kind of a more bullish sentiment that we saw last week but the fundamental story has not changed. Our message to investors as we are in the early stages that we think we will continue. Valuation still warranted. That is consistent from what we are hearing, that optimism is quite high. Do we get a skinny stimulus . Not,s, more likely than but the odds are dropping especially with a temporary funding of the government, which takes some of the pressure off getting a deal and the short term. Thank you. We will refer to that skinny deal with an interview with House Speaker nancy pelosi. On thel update us progress toward his stimulus package. I suspect she would like it to be a less skinny package. This is bloomberg. This is bloomberg markets. Companies around the world are considering how long employees should work from home and are shaping their plans. He spoke to emily chang about what his company is doing. We want employees to be productive. We want to get back to the office, have human contact, discussions, and debate. The technology of zoom and google are good. But it is not yet the same as being in person. I am sure we will have more people spending more days from contactt for me, human and interaction you can do trying to understand a challenging topic, it is great to be in person. I think we are Human Company and we want Human Interaction and it would be better to have that in person than only virtual. Catch the full interview coming up. This brings up a broader question of how we get people , the u. S. Andfice the u. K. , and j. P. Morgan is looking to bring back its workforce, doubling it. Talk anecdotally to people who work at the firm and you hear that they are not going back and that they are going back to different offices. It is an aggregation of people coming back, normally packed with people who work in financial services. Rush back to work happening at the moment. Access to onsite nurseries. That is a huge incentive. Childcare is one of the reasons why the parents cant get back to the office. Quite u. K. Schools went back and that will probably take some time to work its way through. Then you return to the office once you have got things settled. A great point. Talk more about the virus. The text selloff maintains here down in the last three days. This is bloomberg. Alix live from new york, im alix steel, with guy johnson in new york. This is bloomberg markets. Now, jim millstein, cochairman of guggenheim associates, along with sonali bostick. How are your with sonali basak. How are your clients looking at that . Jim we are headed into a period of pretty significant volatility. This continuing inability to get the pandemic under control in the United States, uncertainty around election, and frankly, a change in macroeconomic policy at the fed. All of these things have created some significant volatility. Sonali a lot of people have their eyes on the next stimulus plan. What do you see happening here if the stimulus is not as aggressive as some of the democrats have wanted . With 15 Million People still unemployed and real weakness in many sectors of the , the first stimulus bill put a floor under the economy. [indiscernible] so we are headed into an election in washington. [indiscernible] washington setting the pace right now. We are going to be talking to nancy pelosi a little later on. The president is talking about decoupling the u. S. Economy from china. Is that possible . If it is, what impact will it have on investors . Beenthe china story has with the20 years growth of the world economy. If the president is serious about really decoupling the United States and the chinese economy from a culture from each other, this is going to cause massive dislocation. Hope, led bys his his trade advisor, that they could bring production back to states. Ed maybe over the next 20 years. The trade deficit today is larger. In the last 20 years [indiscernible] sonali jim, how are your your clientsw are preparing for this election season ahead, given that there is so much volatility coming into the market . Think we all have to fasten your seatbelts. It is going to be a bumpy ride. We have a president who [indiscernible] i mean, weve never seen this in my lifetime in american history. I think given the mailin ballot balloting, wein probably wont know the results of the election for at least a week, and it will be litigated thereafter, so the election itself is going to prove to be a very significant source of volatility as we near november 3. Ika so guy so guy guy so buy volatility, is that the way to play it . Jim well i am definitely not giving advice. [laughter] i think it is obvious that there is a bubble in Technology Stocks that has doubled during the pandemic. Part of that is driven by demand , and part ofducts that is the bubble that resulted. Rom low Interest Rates you should have expected a correction in Technology Stocks trading at 50 times earnings. So i think we will have a reset on the technology sector. I think the continuing pandemic and our inability to get it , that is anl outside risk. Sonali speaking of the pandemic and how bad things can get, i want you to wear your hat is a restructuring advisor. What are we thinking for the second half of the year as we move on . We would, i had hoped see a National Policy of ,esting, tracing, and isolation but we are not doing that. That is thatce of we are going to have states opening up and closing down, partially or not, and we are going to continue to have high , and that is going some froth around the commercial real estate markets. Youve got a decline in cash and someandlords, businesses that are hanging on are not paying their rents. You are going to see landlords having an increasingly hard time. Now that we are six months into , they are predicting a spike in default by the yearend near 10 , which is a significant hit. Sonali the first half of this crisis, the banks were playing really nice. There was readily available credit. Investors were coming to the floor. What about the next wave . Do you think the banks will be as forgiving . Jim theres been regulatory and fed, but the the while the banks are , socalled shadow high. G is now at a we are seeing the reality of feds extraordinary ability to do direct lending. [indiscernible] so while the banks maybe have en Regulatory Guidance [indiscernible] with their borrowers. Recognize we have to [indiscernible] jim, great to speak with you. Thank you very much for sharing your time with us today. We really appreciate it. Jim millstein, Guggenheim Securities cochairman. And of course, our thanks to bloombergs sonali basak. The ceo of prezi is going to be joining us on the way that teachers will be influencing the tech sector developing. It will certainly be one to watch. Teachers certainly have played catch up in a pretty meaningful way. Now they will start maybe leading. We will see whether that is going to be possible. This is bloomberg. Karina im karina mitchell. This is bloomberg markets. Coming up, we will hear from impossible foods ceo david lee. In on the bloomberg first word news. Loomberg has learned that President Trump is spending 100 million of his own fortune on his reelection campaign. It would be unprecedented for a president to put his and money towards a second term. Democratic entities have been out raising the trump recent months. Meanwhile, the Trump Administration wants to crack down on china for its alleged ighurssion of the u Muslim Minority group. There is concern that some Chinese Companies rely on forced labor by uighurs. Producepanies racing to coronavirus vaccines have come up with an unusual letter. Avoid shortcuts on science. Among them, but theyre not, among them, moderna, mark, pfizer, and sanofi. In california, the electra city crisis has gotten worse. The state the electricity crisis has gotten worse. Biggest utility has had shutoffs to avoid sparking wildfires. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Guy thank you very much, indeed. Lets stick with the tech space as we cover the selloff in the sector. Students are heading back to school this autumn, and Digital Learning is becoming the norm. Teachers are having to shift the way that they share information. Prezi, aanski, ceo of software presentation service, says teachers are going to be techey influencers as builds. Just speaking from ended totally, just speaking anecdotally, teachers were struggling at the beginning of this process. Our use adjusting they have now caught up to this process . Jim yes i am, and getting out in front of it anyway where i believe teachers are going to start shaping the future of even. You mentioned that it was a tough struggle in the beginning, and they had such acute need, and no Business Tools in place. Most businesses have remote workers, so they were able to have some tools in place. What we are seeing now is teachers catching up quickly and leapfrogging a little bit on the technology cap abilities of doing business learning. One of the things we believe in that we are seeing really fast, we saw this in over 175 countries in april when the letdown started, and we are seeing it come back really fast right now, this idea that teachers are going to mainstream things like recorded video in the classroom. We believe those benefits of letting students learn at their own pace were make their way into the business and office environment. Alix we are currently looking at a video from your website has someone talking while graphics is popping up next to them. That was definitely not my experience with my daughter when she did remote learning. What is it going to look like this year my daughter goes back to school . To i think you are going see that interacting with your content that you are seeing on our website right now, where essentially, teachers are experts in communicating and teaching. What they normally have is they have information on a whiteboard next to them. They are speaking. What prezi video allows teachers to do is basically have their content with them on the screen, essentially just like berg, like a newscaster, but taking it a step further where you are able to interact live with the content you have on your screen, whether you are in a zoom call or any other video conference. What we have seen over the years is when you use space well, your content and yourself and you interact with it, theres a much higher retention and understanding. Student Technology Companies broadly are aware of what is happening education. It is in some ways seen as a back water, almost certainly wrongly, but how attuned our Technology Companies to what is happening in this space . Jim i think they are becoming attuned. There are certainly some folks that have been leading in this market. In our School District for my children, google classroom is used significantly. We have seen microsoft a lot. I think they have become attuned, and even more so as folks like zoom come into the market. What we are seeing is Something Like prezi, our video product which we released last year has now been welcomed into microsofts marketplace, zooms marketplace, google now. One of the ways in which they are becoming attuned is there are other tools out there that are not even necessarily part of their platforms, but they are welcoming them into their market places so that their users can enhance the capabilities. Alix it seems like you are making a distinct and between live teaching and recorded messages and videos. How to set interaction wind up playing in a School Environment . Jim what we are seeing is both. Definitely the highest usage we are seeing is in recorded videos , where you have more flex ability. They can be taken home, use offline, but also, as you have mentioned, prezi video can also bring the video graphics right into the screen live. What we are seeing is a hybrid 1 3l, where there is about of the usage is live video streaming with the content, and then the majority is the recorded case. I mentioned earlier, i think both have their place. Live is really good for keeping a pace and staying connected throughout the day. But the recorded, it is called a flipped classroom where you allow the students to learn at their own pace, whether it is fast or slow. I believe that is something that is here to stay, even as we saw all hopefully soon head back into the classroom. Guy what do budgets look like in this space . Jim i dont have a macro view, but from our standpoint, we havent seen budgets be a problem as far as teachers being able to adopt new technology. Our technology is available for free to any user in the world, and then even the teachers and administrators can have our business packages that we charge for for free. They do upgrade for tools for advanced features if they need them, but our approach right now is to not have budgets be a huge problem. We havent seen it particularly be a problem for prezi video, when he invents features are needed. The schools are finding they ways to pay for them. Alix can you fastforward five years . How will teaching wind up being affected . You mentioned the recording, learning at your own pace, etc. What more do you see . Jim i think if we stay on those trends where you have more video in use, what i can happening is essentially, the geographic boundaries of the school potentially could expand. So while the classroom is so great we want to all go back to it, you could see where maybe some schools could specialize a little bit more. You could patch into streaming of a particular topic that a school does better than others. We could see specialization starting to occur because of the technology leapfrog that is happening, and also for me, the thing that i think is most important is teaching at the right pace for students. I think that is where all of this kind of technology that we are seeing right now being deployed, some good, some stressful, i think it is going to allow us to meet the needs of the students and teach at their pace. Alix jim, thank a lot. We really appreciate it. Be sure to tune into Bloomberg Technology this week for their series of virtual classroom, coming up at 5 a. M. New york all week long at 5 00 p. M. New york all week long. This is bloomberg. Alix live from new york, im alix steel, with guy johnson in london. This is bloomberg markets. The selloff picking up steam in the commodity markets. Wti off by almost 9 . Its get the futures in focus. Mike mcglone joins us now. This is like a multiplechoice. You have the dollar stopping the slide we have seen. We have demand weakness, lower official selling prices from saudi arabia, or just a regular old selloff. What is leading oil down . Mike all of the above. He thing as ae is commodity strategist, it went up to above 40 and could not go any higher. The probability of getting above 40, it needs a higher stockmarket, and it might not get that. Guy what is the market telling us in terms of the greater dynamics of demand and supply . It looks like things are getting quite stretched. Is the market beginning to price and the ability that post labor day, we are going to see demand, particularly in the United States, falling off . Mike contango is generally bad, and the market is just oversupplied we know it needs opec to cut, and its been a little bit of time. Bloomberg had a great story a few weeks ago about kuwait running low on cash. They all just need honey, and demand is really not coming back area i think it is going to flatline, and unless the stock market can really pull things higher, crude oil is going to stick with the bear market trend it has been in for a long time. Alix what kind of headwinds that put on oil . Mike the stock market oil is. Ood for the dollar we have to get past this mean reversion of the stock market. Right now that is pulling everything lower. Guy talking of the stock selloff we are seann, everybody is trying to find out exactly what caused it, what is the catalyst. Some people pointed the finger towards bitcoin rather than the buying that hit the brick wall. Was there any evidence in the price action last week . Bitcoin was certainly selling off. That may have caused a followon effect for robinhood traders in the equity market. Mike im impressed that it seems like you know what i am thinking. Alix you are always thinking bitcoin. [laughter] mike the unique thing is it started in is here you in ethereum. This was getting a little bit expensive, and they started rolling over, but it is altogether now. We were all in the same tide. The tide got way too high, and is coming back a little. What is the s p goes back to around 3000 . That would mean a lot for things like commodities area what i see is bitcoin hovering around in thousand support, and even gold around 1900 support. These because i currencies should come out these quasicurrencies should come out ahead. Guy mike, always a pleasure. Thank you for sharing with us. Mike mcglone a bloomberg intelligence. What have we got coming up . We are going to become you down to the european close. Today, we are tracking lower. We are also talking to this gentleman, who has a new habtoor today. The newombrovskis now designated eu trade commissioner. We will talk about how he fixes the elation ship across the atlantic, where we go next in terms of the relationship with china, and what the eus economic trajectory looks like. We will be asking all of those questions, hopefully getting answers, coming up next hour. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. If i could, baby id how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Guy live from london, im guy johnson, with alix steel in new york. We are counting you down to the european here on bloomberg markets. Heres what you need to know about what is happening in europe this hour. Stocks slide around the world. The markets were turning the u. S. With a bang. The travel sector also hitting turbulence. Easyjet withdrawing guidance. Morgan stanley turning positive on the outlook for u. S. Airlines. And valdis tom brodskys gets yet another Valdis Dombrovskis gets yet another hat as he becomes the eu trade commissioner. He will be joining us to talk about the u. S. , china, and the economic outlook. We are certainly seeing this tech selloff continuing. We did see a little rally in the nasdaq over the last hour or so. That is beginning to fade now. We are going to continue to see how this one turns out. A multitude of factors coming together. The nasdaq is down by