Predictability. Strong winds blanket the bay haze fromdark, thick wildfires throughout the state, rolling blackouts as firefighters prevent more fires from breaking out amid extreme weather conditions. Joining us now in new york city, bloombergs abigail doolittle. I hope you have clearer skies than we do today. I want to talk about the tech rebound, the biggest rebound after the worst stretch since march. Saying you nailed it the only certainty is volatility. That is going to continue, it seems the worst stretch since march, and then today, the best day for the nasdaq 100 going back to april 29. The big question is whether it will last. Will investors continue buying the dip, knowing what they know about options volatility going into august . You jump in that huge down. Apple and tesla, certainly a good day for each. Apple, down 4 , excuse me up 4 today after dropping more than 10 over a few days. Nothing changed in that story. That tells you the degree of hesitancy, uncertainty on the part of investors on what is next. Just because the stock had gone so far, so fast. Change, twos did things in terms of g. M. S Partnership in nichola and also tesla not being in the s p 500. That stock up 11 . You would think that was the best day in years. It is only the best day in about a week, because of the march lows on the recent tie up six hundred percent. So a little more down to earth, but volatility probably still ahead. Today the nasdaq 100 down a little bit. If we look at the twotake charge of apple and tesla twoday chart of apple and tesla, both are still in the hole and dip buyers today continue to today need to continue to keep buying if we are going to see stability ahead. Emily tiktok is now a week away from the president s deadline for the company to sell its u. S. Faceace a ban in the or a band of the United States. Implications for u. S. China relations. How are broader sentiments and broader uncertainty weighing on investors . Interestingt is an question. Very interesting question. If the situation stays very volatile, that could be the impetus for the u. S. Buyers, if they are serious about buying the tiktok u. S. Assets, to get it done before it gets hugely volatile. On the other hand, in terms of the owner, there are stories that he doesnt really need to sell, he has a cash cow anyway and there might be hesitancy. No from a selling standpoint, less of an impact. Today around 3 30, the market while closing higher, closed off of highs and it may have had something to do with the dow jones headline around tiktok, and the idea that the assets that china is looking for a way to have some middle ground, where all tiktok u. S. Assets will be sold. Steepests, we saw the decline for walmart. Microsoft and walmart partnering thatpotential suitor, stock off eyes 3 but into the close, 1 , so a slide. Other suitors, microsoft off its highs as well, but over the last month, down, the big tech stock of the suitors hit the hardest, but oracle on the day taking a leg lower even though finishing higher, and twitter, also. It is hard to see why the u. S. Would compromise if the goal here is to protect security. A partial sale probably wouldnt do that. That is why you saw a leg lower, more uncertainty around the tiktok story. Emily we will continue to k as weevery tik and to get closer to the september deadline. Bloombergs abigail doolittle, thank you. I want to stick with tack and bring in Scott Kessler of third bridge. So much to consider, threethey selloff, rebound, doesnt seem to be any rhyme or reason to the way Investor Sentiment seems to be swaying. What do you think is predictable at this time, anything . Can i say unpredictability . Just getting. A couple of things come to mind. Look, people didnt realize that the markets and nasdaq can actually decline. It seems we went straight up from march 23 lows through we had the s p 500 Information Technology sector up 75 over that period. That is obviously a pretty significant gain. We are looking at a couple of different things, quarterly result and guidance. Ago, whenf weeks companies were providing results and guidance, we saw stocks shooting higher. More recently, even with strong results, we saw some selloffs. And even today, we saw some cloudoriented Companies Report results and provide guidance that were perceived in a mixed fashion. Im thinking about hooopa software as well as black. Those stocks [indiscernible] sold off. Maybe it means those companies are being more discerning in terms of companies and Stock Performance may be indicates people are paying attention to war, or. China tech uncertainty related to the elections, the Macro Economic backdrop that no one seems to know what is going to happen next. End of course, we have an election coming up, as i mentioned, so a lot of things that people are focused on as we get close to closing the Third Quarter and starting the allimportant fourth quarter. Emily slack ending the day down almost 14 on the back of their earnings report. They didnt have a billings forecast. I spoke to ceo stuart butterfiel yesterday and he said the future is still uncertain all the growth is accelerating in terms of paying customers. We have been watching apple and tesla in particular, huge down days yesterday, rebounding today although not fully recovering from yesterday. What are themes you are following . Scott for both of those companies, it seems like there has just been a lot of momentum in terms of both the operating performance in the Stock Performance. Sentiment has been very strong. It is perhaps not a coincidence that you have both of those companies having scheduled events over the course of next week, we have apples time flies sure, where people arent exactly what they are going to announce. Probably some combination of new devices and hardware. People are really looking forward to what they are saying about the iphone. I thinkne accounted for 44 of the latest quarters revenues. Ar is going to be a big thing there, augmented reality. And for tesla a week after that 2, have battery day with a lot of people i think looking forward to battery efficiency and how they are making progress there. So there is news flow to be coming from those two companies, which have been bellwethers for the market in the tech surge of the last few months. Emily any names out there that are reliable that you think will continue to see steady gains, despite the uncertainty and unpredictability, that is the only thing that is certain . I think there needs to be a disconnect between operating and staff performance. We have seen a lot of companies, frankly and perhaps surprisingly if you go back to sentiment from march, where it seems like a company a lot of companies are benefiting from this notion of Digital Transformation moving to the cloud and working from home. A lot of those companies have been real leaders. People question now is, are wondering, number one, how sustainable that performance is from an operating perspective. And then, how much of that potential going out a few years was pulled forward . Much momentum can these companies sustain over the next few quarters . That remains to be seen, but it is fair to say that there are some companies that have a lot of momentum that disappointed investors in some way yesterday. And those stocks sold off today, perhaps indicating it is really not a monolith and really not just straight out. Emily what are you watching as we head into the election . Big tech names have struggled with election issues, facebook with misinformation, for example. We spoke to head of tiktok who said they are working with the government to handle misinformation and foreign election meddling on their platform. Anything in particular that you have your eye on . I wouldore generally, say people are really wondering about, number one, what is going to happen with the election . Not just the president ial election, but the u. S. Senate is in question, in terms of whether it is going to swing to the Democratic Party or remain republican held. That is pretty important as well. It seems that by most accounts come of the race has been tightening. So people are wondering whether we are going to see a contested election, whether we see results on election day or have to wait days or weeks . And then, what is going to happen from that point . People are trying to access exactly what the implications are there. At the markets on the economy, frankly, dont like uncertainty. That is part of what is driving some of the volatility we have been seeing. In terms of companies, its interesting facebook indicated it is interesting facebook indicated they are not court be taking or producing political advertising the final week. Other companies have made pronouncements on that. We will see if anymore more actions are taken. But clearly, they want to step out of the way while perhaps still influencing the outcome of the election. That is something we all should be mindful of. The other thing you talked about that i am watching is tiktok, what is going to happen and how what happens there is going to impact how people think about war, ifchina tech cold you will, that is building. There has been the news recently on semiconductors and Semiconductor Manufacturing inc. Out of china, and the coronavirus and the Semiconductor Supply Chain during coronavirus, that is going to become more of an issue as we get closer to the election. [inaudible] the covid19 pandemic has upended education, not just here but around the world. In our Education Technology series, week to we spoke to Jeff Richards, who invests in Education Technology around the world. I asked him about investments in these companies and how Remote Learning is going so far on both sides of the ocean . Jeff i tell people, if you were a Lab Technician or scientist running a 10year experience, and it all happened in 10 months, that is what we are seeing in categories, ecommerce, telemedicine. Telemedicine has boomed. Doctors are switching to primary care telemedicine, all these companies have suddenly become darlings of investors. Down onsay doubling ecommerce, doubling down on telemedicine, doubling down on tech, and a massive adoption by fortune 500 ceos, accelerating options by hundreds of billions of dollars over the next few years. Emily venture capitalists often say they dont pay much attention to what is going on in Public Markets, but you cant ignore the environment we are in right now. Over the last days, we have seen a massive selloff. That could turn around today. We dont know about tomorrow. How much is happening on the public side that is impacting decisions you are making . Correlated more people would lead on to because we are seeing the same value in Public Markets for those companies in the right categories. The categories i mentioned earlier, you are seeing massive appreciation and clean vehicles and electric energy are catching fire, tesla one of the hottest stocks the past few years. But you look at software security, software for learning, you see those impacting market valuate Company Valuations because the markets are like accelerating are by four or five years. That havepanies adopted like 150 percent, even 300 of their plans this year, so you are seeing the valuation of those companies happening in the private space, and investors are thirsty for new names coming to the market. Software ipos have done extremely well in the past four years, and airbnb are names that are coming up. Edly there isnt a single Tech Focused Company worth tens of millions of dollars like you have facebook or google. Do you think that could change because of the transformation that is happening in the Education System right now . And why hasnt that happened yet . Jeff great question. The reason it hasnt happened in the u. S. Was that people originally took the approach of trying to Sell Technology into the existing educational system. The existing system is government run and the government is not necessarily an investor into technology. So in an ideal world, our schools wouldve been prepared for this digitalization, but most got a cold start with onset of the pandemic. But outside the u. S. , and lets remember, there was only three had a 30 Million People in the u. S. And 7 billion outside the u. S. , outside the u. S. , this trend has been happening for some time. We have Portfolio Companies that have tens of millions of users on Digital Learning platforms, they are way ahead of companies in the United States. You will see Companies Worth 10 billion or 15 billion dollars happened outside the u. S. First, probably. Ago, 2010 or 20 years years ago there were only 180 people on the internet. Now you have several billion. That is creating access to not only education, but finance, banking, all these things we have known in the u. S. As a modern economy for a long time. Emily how different the world could be in the next 20 years things to technology, we shall see, Jeff Richards there. At we continue our virtual classroom series all this week. We will hear from a leading researcher in this space later in the show, on how Remote Learning could have lasting, negative impacts. Coming up, the royal battle between apple and epic games continues to escalate, apple striking a major counterblow. The latest on that story next. This is bloomberg. Apple has fired back in hits in its legal battle with fortnite creator epic games. The iphone maker is asking epic to stop using its Payment System for fortnite, saying what epic is trying to do amounts to theft. Bloombergs malathi nayak, who has been following this. Userssays fortnite wont be able to log in using apple entrances. This lawsuit is a significant next move. this is a bold move by apple. The are striking back with countersuit and asking a California Federal Court from blocking epic. Apple wants the court to rule epic violated contractual obligations under its App Store Licensing agreement by setting up its own fortnite marketplace. Some users who had the older version of the app can continue fixg this opposing hot apple put in place to set up its marketplace. So apple is striking back now to talk to prevent any user from epicsto go through direct Payment System. To seeit is interesting apple seeking damages. Apple has piles and piles of cash and is run of the Richest Companies in the world, and also a multibillion dollar company, that apple should become an sated the losses. Malathi it is an interesting move by apple, given that epic isnt seeking damages in the suit it filed. Epic, according to epic it is only looking to fight back against apples market dominance and charging customers a fee. Says and its countersuit it suffered harm because epic usurped its commission and has broken App Store Rules under once damages to compensate for loss of the fees and broken customer relationships. Apple is even asking for punitive damages, which is an elevated fine, to punish epic for its alleged fraudulent conduct in setting up its own marketplace. It is an interesting move. Apple, i think, is trying to strike back with as much force as possible. Next what is the legal move . Athi september 20, the judge overseeing the case has set a hearing in which the judge will decide whether epic should be granted an injunction that would get apple to reinstate fortnite back on the app store. There will be a lot of interesting questions there, especially on some of the antitrust issues epic has brought up in its suit. There will be a lot of discussion potentially on questions around who decides how app stores should pay developers, whether the standard 30 cut is fair and whether s app argument that apple store is a monopoly. Watching forl be the next move in the battle royale, bloombergs malathi nayak, thanks. Secretive seemingly company palantir holding its investor meeting today. From somebody that was in that meeting, we hear about how the company is gearing up to go public. This is bloomberg. Emily this is bloomberg technology. Im emily chang in san francisco. , the seemingly secretive date to company run by peter thiels, is supposed to come up for an initial Public Offering on the new york stock exchange. Palantirs investor meeting was today. Santosh, how did that meeting go . Did you get the concrete details you were looking for . Santosh we are investors in palantir, and ive been writing about it for the past four or five years that ive been covering them for my company. A lot of information, clarity on their products, and that was a big strike against them for so long. It is a very opaque company. Nobody knew exactly what they do, the general public does not know, rather. So this was good. They came out and gave us good use cases, gave clarity about where they want to go, their longterm targets. And overall, their positioning in this market, fastmoving market, against their competitors. It was very informative and i convinced that our case is justified. Emily how big is the case though . This Company Raised a 20 billion valuation in a private round a few years ago. Have new companies pegging evaluation closer to 90 million. Do you think the company is receiving a big down round as a result of the listing . Santosh yes. For this company, it has not been an easy ride. It has had its ups and downs. Investors have had to wait a long time for their exit. It has had its share of issues with the products. The last two or three years it has really found the growth. The revenue engine has really fired up with the foundry product. Revenuefaster rollout, recognition is faster, so it is really coming together. Slow,ime, it was pretty and last time it raised money, the market was in a different place. Then it went down because there were a lot of concerns, rumors, this and that, negative pr. So this company has seen everything. At this point, they have it altogether. I would say the valuation you mentioned is probably on the low end. Round, maybeurther 16 billion coming off the gain, considering all their peers around them and their own growth trajectory that we project. So 20 billion looks slightly higher at this point, and i think they go lower and prove themselves. About theaking culture and controversial relationships with the u. S. Government, obviously the government is a Huge Customer of palantir. In fact, their revenue is about half and half split between Government Entities and commercial companies the ceo today at the event was clear that we pick sides and if you dont like who we work with, dont invest in our company. What you make of that . That has been their trademark, pretty independent, they dont care that generally works in Silicon Valley and on wall street. They are pretty focused on what they do. And one thing about this company is that they are not afraid to projectsisky projects, that are not popular, that fall into their mission of being patriotic and doing the right thing by the army, by the government, by our allies. So they werent afraid to do that. And that has been their forte, their strength, and it has similarly had a lot of headwinds in terms of pr. So this company is at the intersection of me too, trump, all the issues playing out, ice and this and that, but under the covers, this is a Strong Software Company Creating products catering to a market that needs it at this point. How concerned are you about governance and the fact that the cofounders, including peter thiel, are going to moan almost half the shares of the company, and voting control, in perpetuity . Santosh yeah, its always a concern. If they want to have that, i would rather they have a sunset clause. I can see them having control in the beginning to shape the company in their vision, so that makes sense. But you have to have a sunset clause to come out and let it flow and let the bond market and the board decide what to do next. So that is a concern, was occurrence earned was a concern and is a concern that is a concern i Companies Like uber and lyft, but those structures have become the norm in startups. Hopefully it will get better, and you will have a sunset clause for everyone as a requirement, so it doesnt really make it bad. Lets see where it goes. But it is definitely not the ideal situation. Emily what are you going to be watching for as we approach wetember 23, the dayish expect this to happen . Santosh its a direct listing, so they dont really have a price that they need to beat or anything like that. So that is good. We will see when they come out if it holds, which i think it will. There will be a little commentary around it. The biggest thing investors are looking for that can be sustained is first half growth because it is solid, the yearoveryear growth is solid and they want that continuation into the first half. Thirdquarter numbers are going to be important on hopefully, they continue from there. It is very important for these startups. Emily santosh rao of manhattan you so partners, thank much for joining us. We are going to be tracking this until the listing. Coming up, we talk to an expert in the virtual classroom world, looking about possible looking at positive negative in impacts fromtive Remote Learning, that is part of our virtual classroom series. This is bloomberg. Toly welcome back bloomberg technology. Im emily chang. Blackoutsand rolling continue to ravage much of california. You are taking a live look from the roof of our camera the roof of our building in san francisco. Most of us woke up to smoky skies this morning. That is a look at the bay bridge, where fires turned daylight into desk. Many are concerned about air quality is the fires continue to ravage california, oregon and washington, all in the midst of a sustained lockdown do to the pandemic to the start of school in the United States for most of us is having is happening remotely, although as soon as educated get used to one thing, everything changes. I spoke today to, dorn, education manager at mckinsey and got her response about how educators can stay nimble, and that we dont know what the future holds. , tough scituate emma tough situation for sure. We need to ensure every student has access. 50 million to 60 Million Students lack access to adequate internet on devices. Is nott to fix that enormous. It is 6 billion to 11 billion across the whole of the United States. We are focused on some login numbers that we shared. 90 of high income students are logging in, and only 60 of lowincome students are. That is a problem we can fix. The Education System is based on a centuriesold model. Do you see what is happening now potentially changing the Education System as we know it . That perhaps innovation or something good will come out of this crisis . Emma there is the old adage, never waste a good crisis. But we have to be careful not to throughout the baby with the bathwater. There is a lot of research about what works in education and we dont want to throw that out. Thehat works in terms of criticality of getting good teachers and supporting those teachers. And the importance of good, formative assessments to understand what students are learning. That said, i think the technology has advanced. We need to be thinking about new ways of using that as we go forward. And i can give you examples. Emily like what . Adaptive learning software, for example, can really help students master one topic, especially about medics, before moving into the next. But technology also doesnt do some things well. On the relationship side, for example, we did analysis of the 2018 assessment results across 50 countries. At what we found was that students who use a tablet in their classrooms perform half a grade below students who dont, in math, reading and science. Emily interesting. Emma so it is important to integrate what the best we know about what works with tech, but not just uncritically adopt a bunch of devices into the classroom. Isly meantime, education looking at making dramatic changes, like some schools in cleveland thinking about throwing out grade levels altogether. Is that something good that should stay . Emma we are in the midst of a vast experiment. We have just not had Remote Learning across the nation. Those experiments are important. I think what we really need is data, to understand which of these are working well and which are not working well. Scrapping grade levels is one example. Moving to a masterybased learning approach more broadly is another example. But what is really important is, as we do these experiment, we gather the data we need to assess them to see whether they are really delivering. Emily you talked about the importance of relationships, students fostering relationships with teachers, teachers with parents, parents with their children, at this time. Emma that is critical. We have heard from teachers that students are coming back into the classroom and are traumatized by all the trends you have been talking about. And if we think about removing improving Remote Learning, those relationships are critical. Ill give you couple of examples teachers are doing. One is Health Checks at the beginning of every day, how students are doing. Another is checking oneonone with every Single Family and every single student. Some schools are doing an assessment, so it almost critically important to work out at the beginning of the year much learning these kids have lost. The last thing you want to do is bring kids back in and sit them down for a fourhour test when they are already had an emotional state that is slightly traumatized. Instead of that, districts are actually scheduling time oneonone between teacher and student to do reading assessments. Kill two birdsou with one stone and start to rebuild the studentteacher relationship, but you also understand exactly where that student is, so that you can design curriculum to help them catch up on whatever they missed. Emily you mentioned they impact earningn potential, what about the gdp of the economy as a whole . Emma exactly. In the report we look to potential gdp loss and estimated gdp loss would be up to 270 million per year. Only a 1 loss of gdp. And we can avoid that loss by putting in really strong programs now to help kids catch up on lost learning, make sure they are still exposed to greatlevel learning, but that that is matched with highintensity tutoring so they can fill those gaps. Hmpacked segment full of information, emma dorn of mckenzie and company. Breaking news. Jp morgan has found some of its employees improperly applied for and received relief funds intended for Small Businesses hurt by the pandemic. Emailnk sent a vague yesterday. We have continued to follow the story and indeed, they have learned some of these employees had money improperly deposited into their accounts, all these funds tied to the Economic Injury disaster program, which is separate from the paycheck protection program. But it is something jp morgan is now continuing to investigate and we will be following what actions they take. We will have more of bloomberg technology, after this quick break. Street tom wall capitol hill, big tech continues to make headlines. Republican lawmakers have introduced legislation that would prevent Tech Companies from taking down conservative speech on their platforms. Marshall black burn, chairman of the task force, talked about the bell with kevin cirilli. Blackburn we know that you are not going to have alternatives to these platforms until you deal with section 230. There is not going to be accountability for bias until you reform section 230. Is come tohave done agreement on how you reshape you and reform it, so that preserve the competitive marketplace, so that you dont overreach, but you have that accountability that is necessary. Now, one of the things that we are doing is removing that otherwiseobjectionable language. Where people would say, well, they are subjective because they can hide behind this as a shield. We have done is to specify that that shield applies to platforms that have restricted certain content. So there is a little clarity brought their. We have the content moderation. You have a reasonableness standard that comes into play there, objectively reasonable standard we would put in place, and then defining information content developer and provider, so that you know who that standard is going to be applied to, your content creators, individuals, companies, people who are editorializing. Kevin 1920 wasnt designed for the internet. andor blackburn censorship and how you got into those thirdparty content. It is important to bring clarity to bear. Kevin i know it is a battle with democrats, but how significant is it that three cosponsors of the legislation coming together in the Republican Senate to say this is where the party is on the issue . Senator blackburn not only is and notarty only the senate, this is going to be filed in the house and we think we can get bipartisan support. Everyone agrees big tech is overreaching. Everyone agrees big tech brings their bias to bear. That is what you want to have this standard and put it in place, and why you want to be are goingy, look, we to take out nebulous language and bring specificity to it. Selfharm, ifting it is promoting terrorism, putting those definitions in place and getting that on paper is important to do. Kevin President Trump tweeted about this the other day directly at senator mitch mcconnell, paraphrasing sec tion 230. Senator blackburn you want to modify it so it meets todays marketplace. When these companies were in their infancy, they needed those protections. Now, they are using that liability shield, cut out kind of hiding behind the skirts, if you will. And they are saying, you cant come and get us. We decided we think that this is objectionable. So therefore, you put in the specificity. Away that you take nebulous language and you begin to say no, this is going to be a content creator, this is going to be content moderation, this is going to be who has liability protection. Emily senator marsha blackburn, cochair of the Senate Judiciary task force with bloombergs kevin cirilli. Stirring uppany not debate so far and capitol hill is netflix. Even as other Companies Enter the crowded streaming market, netflix says it is focused solely on entertainment, not news, not sports. In a conversation with David Netflix cofounder and Ceo Reed Hastings explains. Need to havee original programming. Was familiar with the history of Cable Television and educated us on hbos path, the first 20 years in the 1980s and 1990s, they had recycled programming, and with shows like the sopranos and the wire, they moved into original programming read what a difference it made for them. So we were aware of the history. It was just a matter of biding time. David today, the original programming you have, is that more popular than the nonoriginal you are renting . Thats right, the original programming driving the old guard, our newest movie, an amazing movie, our series like india matchmaking or Railroad Academy are all driving both the viewing and the membership growth. We are fundamentally in original content business that supplements with licensed content around the world. Contentn netflix your is popular, but you dont do things like news or sports. Rea ca great areas but they are covered by other companies that we have so much we want to do, animation, series, we have done well with unscripted reality programming like india matchmaking, tiger king. Our hands are full, and other companies are doing other things. We want to focus on entertainment. Netflix cofounder and coCeo Reed Hastings on the latest episode of the David Rubenstein show, peer to peer conversations. Catch the full interview tonight on bloomberg television. Consolethis switch being boosted to as much as 30 Million Units for the fiscal year. Nintendo has been struggling to keep up with switch into thousand 20. Switch production was in 2020. Console production was stifled virus, because of the and the game animal crossings helping with more people stuck inside during the pandemic. That is going to do it for bloomberg technology. Follow quick take on twitter. Im emily chang in san francisco. Bloombergfor daybreak australia next. This is bloomberg. Give you my world 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. Good morning and welcome to bloomberg daybreak australia. Im shery ahn. These are our top stories. Text rallies the most since april. Treasuries retreating. The dollar turning lower. Tiktoks parent c