Intends to bring a deal to the white house by september 20, the official deadline date. Joining now to break down the week that was is abigail doolittle. Volatility volatility volatility. Walk us through the week that was and how might next week be different . Volatileeek was very and choppy. Up and down, a real roller coaster. At the end, it was a down week and today was especially choppy. Earlier, it felt as though the bulls were trying to take it away then the bears stepped in. The s p 500 up slightly. The nasdaq down. Continues to be newtons third law what goes up must come down. We are seeing a bit of a reversal. On the day and the week, even though we had the nasdaq down, we also had the nasdaq 100 fix down. Next week, maybe some of this choppiness will leave. You see apple down again on the day. Pointing to the idea that next week maybe in the near term, some of the choppiness will leave. If we go to the terminal, we have a great heart. Over the longterm, this probably suggests there will be a huge bout of volatility ahead. What were looking at here and is the nasdaque 100. Diverged, the white shot higher and stocks dropped. Now we have the nasdaq sharply higher and a big divergence. Suggesting that will come together with stocks dropping. There is reason to think that that is going to taper off next week. I the end of the day, those two will reconnect. Again, big volatility is probably ahead before the end of the year. Hopefully, for the bulls at least, next week will be smoother. Give us an indication of what is happening beneath the surface. If you look at the individual movers, some of these were pretty ugly. Yes they were. I should add another piece of this is a move toward the cyclicals. One sector was higher, materials up 1 followed by industrials. The tech stocks we are looking at now on the week, very rough. The worst week for apple since march. It the worst week for tesla. Since march. Amazon, lululemon down. Stack is not a tech stock but it is in the nasdaq 100. If we were to look at these on the year, huge gains still. Most of these are up by 50 . Investors just taking some chips off the table perhaps putting them into cyclical names. Zoom isight side, outperforming. It was the top stock last week and this week. Stocks one stayathome that is performing in an unbelievable way. Look at that, up 66 over the last month. They recorded a great quarter. Investors one in on zoom. Emily they see more growth ahead. We will continue to follow abigail doolittle. Have a wonderful weekend. Sticking with tech movers, i want to bring in our guest. He covers so many Different Companies across the big tech landscape. Youre looking at facebook, google, netflix, amazon, what is your take on the selloff we have seen over the last few days after such an incredible and unprecedented rise . I think you said it right. Meteoric august and i think this is a healthy correction. Netflix have done phenomenally well this year. Facebook has done reasonably well and google has been in line. That is largely on track with what has happened to fundamentals this year. The yeartodate rally, i largely agree with. We did have a search in august and this pullback is probably healthy were these names. Thiswere medium buys for for us going into this correction and they still arent cheap. We consider them to be grinding stocks to the back half of the year. Emily we have been talking about tiktok every day which has proved a credible threat to facebook and social media. Instagram has come out with its take on tiktok. What is your take on how much of a threat tiktok is to the u. S. Social media giants . Midst of the uncertainty in the china situation . Nominal deska fun phenomenal example of innovation. Algorithmically driven video. Beautiful service, highly addictive. , other little Surprising Companies experimented around this. It is odd that this company did it. Its interesting they did it and youtube was left on the side and now facebook is playing catchup. All that being said, nobody knows whats happening to tiktok. That looks like there is a distinct possibility that it gets derailed if the essay gets sold or the algorithm gets removed. There is a real opportunity for and theywith reelz could be stymied at tictac tiktok. It is facebooks opportunity to come in and take some of that market share. Facebooks app is not better than tiktok, but it is comparable. It is certainly likely that nothing happens to tiktok at all. There is potentially a changeover in the administration and this was a lot of noise. We obviously dont know. We will be seeing what happens as we approach timber 20th deadline. Talking more about facebook, we have talked in the past about the blue app facebook proper, the social network, its just not as cool as it once was. Instagram has carried on the torch and away. What do you think the future of the blue app is as it faces competitive threats from all sides . Im going to give you a differ perspective. Facebook, there have been two major trends across the internet. The dramatic acceleration of online retail. That trend is phenomenal. The other trend is that social media usage really blew up this year. It accelerated and increased materially because in the times of pandemic and social unrest, people reaching out for friends and family and facebook is a way to do that. Facebook has been a bit of a usage beneficiary of the covid crisis. What is great is this new opportunity for facebook which is social commerce. , thel commerce plays out best derivative will be facebook with instagram and there is Something Else we put out a report on this last week, facebook marketplace. Dont tell anyone this, but it is now twice as big as ebay. 12 times bigger than craigslist. It is even better bigger than its competitor in china. This is like another one billion user asset facebook has that is under monetized. Thats another reason why facebook is one of our top picks. We like the shares. Emily i definitely have to agree if you have some cleaning out to do, facebook marketplace is the way to do it. About netflix, i spoke with the coceo of netflix earlier this week. I asked him what netflix is next ask will be. He said more of the same. Were going to double down on scripted content, original content. Can netflix keep growing as it has with thyssenkrupp singler strategy in mind . Yes. In part because they tapped into the dramatic growth in streaming. People are picking netflix versus disney plus or apple tv plus. They are picking up bundle. Two or three services. Netflix is almost certainly part of that bundle. They win as the streaming bundle wins worldwide. The real gain for netflix is local content. Its original content but original International Content. Local language originals that they are producing and acting in spain, argentina, korea, japan. They are doing this globally. Iny are two years ahead terms of internationally produced International Content that they are rolling out. They own it and that will probably cause them to sustain this growth for the next 35 years. Thus the underappreciated element of netflix. The real new wants is International Original content when nobody else is. Emily always good to have you on the show. In with you again in a couple of months. Aning up, we will talk to investor in Information Technology looking at some of the Companies Making a huge impact in Remote Learning and are the gaps are for our children. Thats next. This is bloomberg. Im trying to be honest how angry and frustrated i am at the lack of federal leadership, the dishonesty, plain things down, the lack of resources. A naturalorphed from disaster to a manmade catastrophe. We shouldnt be in the situation. Catastrophe scenario is not that far off. Population30 of the that doesnt have sufficient Internet Access. Schools have done a heroic job getting laptops out. The carriers have done a great job getting them Internet Access. But we are still seeing 52 in percent of the population is not engaged for some reason. There are some things that we can do that are super tactical and immediate. We need to make sure every student has access. Right now, a report just came out the estimates 15 to 16 Million Students lack access to adequate internet and devices. Emily just some of our interviews from the week addressing the concerns associated with moat learning. Where can we do better for our children, educators, future . Our guest i saw you nodding there. We heard our guests calling it a catastrophe. Working in tech for a long time, you have invested in the space for a long time. What is your view on the urgency of this crisis facing our children . Like they said, it is not our off the catastrophe. We know that millions of students across the country during this time do not have access to highspeed internet. They dont have access to devices. A lot of the students are the same ones who already went to school for covid. They were under resourced. They didnt have access to the same resources as much more resourced schools. During this time, what you are seeing more what we expect is we are going to increase the divide that existed between students dont haves schools the resources they need to support their students. This isnt just across lines of income, it is also across lines of race and rural versus suburban. It also crosses lines of if you are a student with disabilities, you are not receiving the support you would normally receive in a School District. Theres a whole bunch of resources that students arent getting another they are at home. Now that they are at home. Emily a huge percentage of kids might have to work on a cell phone or use public wifi. Gaps that need to be filled and are there companies out there lynn these gaps and will they be filled in time . That is a great question. Aroundssing needs are the infrastructure. The internet and the device. If you dont have that, nothing else matters. You have to have the primary tools. In terms of companies that are offering that, its less companies and more workarounds for nonprofits. Some Service Providers are trying to make their axis more affordable and there is some government regulatory work happening to get more access. There are necessarily Companies Going after the infrastructure that is needed. That is the assessment of what ive seen. In terms of a concentrated effort, we have yet to see it across the country. You see it more at the School District level and the local level. Where are the opportunities for investment . We know there has been an explosion and demand for supplemental learning tools, live online classes. How big of an opportunity is that and does that remain once things go back to normal . And people dont necessarily need to supplement their education. Inas someone who has been this sector for several years now, the sector has booms and busts. You have moments where investors are super excited to invest. We are at a time where there is the boom. One of the places where we are seeing excitement is supplemental learning for k12 students. There are massive tailwinds and the market because there is more acceptance that a modality of learning around online live is exciting. Its not just that it makes it more accessible but in terms of 68anies that connect students, its students meeting students they would never otherwise meet. Orre are a lot more factors positives that come out of that experience, engagement that comes out of that rather than just purely learning itself. A lot of that will continue postcovid because even when you think about School Districts and public schools, a lot of the things that are being cut r enrichment and supplemental learning. The one trend that i am more skeptical about is we are starting to see companies turning targeting learning costs learning pods. Given the parents i talk about want to send their students back to school once covid is over, i am more skeptical about whether learning pods remain. I know you are doing a lot of work on retraining adult workers. Workers who have lost their job. Thats another opportunity. Thank you so much for sharing the work you are doing with us today. Coming up, vmware following twitter and i spoke allowing staff to permanently work from home. You can expect a pay cut if you leave Silicon Valley to a less expensive city. More on that ahead. Now to a developing story. Vmware employees who take up the Companies Offer to become permanent Remote Workers will get a pay cut if they leave Silicon Valley. Us the fine print. Vmware has an interesting scale by which they are determining salaries based on where they move. It vmware employees want to leave Silicon Valley or the surrounding areas, then they have to accept that the company is going to cut their pay should regionve to a geographic with a lower cost of living. For instance, moving from the bay area to denver, colorado, would cost an employee 18 of their salary. If they wanted to go to southern california, maybe los angeles or san diego, they would be giving up 8 of their salary. Workersat a time when are encouraged to find a more Flexible Work from home solution. They may want to escape skyhigh rent and mortgage in big cities. Also in an ideal world, would want to hold onto their bigcity salary. What are other companies doing to address this increasing demand . It sounds like twitter is already doing this and has a local Compensation Program that is guiding the numbers they are giving their employees. Absolutely. Twitter as well as facebook and before now, ad strategy of paying for talent depending on where that is. Vmware calls it the cost of labor in certain places. Whats new here is that companies are at their discretion deciding whether to uphold those preexisting policies from another world in this period. Example, decide not to make any adjustments to compensation at this time. 2021,ok says that as of that is when they will cut someones pay if they move to a less expensive place. The ceo of service now spoke with me today and said they will likely take a similar approach. They havent made a final decision, but it is likely that in 2021, bahai pay that they were giving for the bay area the high pay that they were giving will decline. Emily are employees going to take the opportunity to take the cut . I think that some who want to be closer to family and loved ones and can succeed in the Real Estate Market which is really what this is about will absolutely take the cut and think that its worth it. Others might not. A real interesting story. I know you will continue to follow it. Thank you for bringing us that scoop. If you have left your heart in san francisco, you might want to leave your lungs tomorrow. The bay area is suffering from some of the worst air quality in the world as wildfires rage across northern california. One argument to go to denver or san diego or somewhere else. We will bring you the latest, next. This is bloomberg. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. The big events are back. Xfinity is your home for the return of live sports. Emily this is bloomberg technology. Im emily chang in san francisco. They are quality in northern california, oregon and washington is among the worst in the world. Multiple fires have swept across the region. Joining is never more at what is happening at this moment, sophie alexander. I just looked at my neighborhood this morning, around 320 aqi. It has dropped to a balmy 275. Still horrible. What exactly is the cause of the air in particular being so bad the last three days . The orange haze. The ash rainfall. Sophie yeah, so, across the west coast right now, there have been 70 fires going on up and down california. It depends on where the wind is blowing at any one time. Right now, it seems like the wind is pushing a lot of that smoke towards the bay area which were experiencing this terrible air quality. Emily this has been debilitating for a lot of people. It has been kind of a rough week. It has been hard to get anything done and to focus. How much longer is this going to go on for . Sophie yeah, it is hard to say whether this is going to last through the weekend or when its going to clear up. One of the people i was talking to who runs a restaurant, today, she had to close it yesterday. She was lamenting about the fact you cant really look at what the air quality is going to be at noon today. You cant look at what its going to be like tomorrow like you can with the weather. As for californias fire season, that is really just getting started. We should expect similar conditions for another couple of months. Emily it is a double whammy for businesses who already had to shut down because of covid. Theyve adjusted and now you cannot even be outdoors. How is it impacting the businesses you have been talking to . Covid testing sites, for example, that are also outdoors . Sophie yeah, it is affecting us and a bunch of different ways. Just regular Small Businesses like restaurants that can only really operate for sitdown service right now. Nobody wants to sit down outside when the air quality is so bad. When the sky is orange and you have real apocalyptic conditions. But its also hard for our response to covid19 across the state because we rely on outdoor testing facilities, because thats what is safe to do. Its no longer safe if the air quality is so bad. It is really a catch 22. Will all right, we continue to monitor the situation throughout the weekend. Hope it gets a little better by monday. Sophie alexander, thank you so much for the update. Well, sports this year has faced unprecedented challenges, from the Pandemic Health crisis to players boycotting games as they protest Police Brutality to shorten seasons or no seasons at all. Last night, football returned in kansas city. Trafficking ceo and cofounder Jason Robbins spoke to vonnie quinn about the return means for the future of sports betting. Jason were a mobile app so whether you are sitting in the stands or at home watching it on tv or wherever you are, you can always access our app. I dont think it matters too much. The important thing is sports are played and everybody does it in a safe way and games can continue. What was it like in the early months of the pandemic when people could not bet on sports . Anecdotally, i posted a picture of my teenage sons playing pingpong and my friend said what is the spread . There was obviously appetite. Jason it is funny you mentioned pingpong. Table tennis was at one point our number one betting sport. It was one of the few things going on. Sports lends itself better to social distancing since you are on opposite sides of the table. Esports has been huge for us. People can play esports without having to be near each other, so that helps. There were other things as we kind of got creative. Things we did for politics, tv shows. Not anything where you can major money but free to enter pools and things like that. We did a lot of things. I think the biggest beneficiary overall was esports because even after we started to see traditional sports like the pga tour and basketball and mlb, football come back, esports has continued to maintain a lot of the growth it saw. Esports was tiny going into this whole thing and now it is substantial. Vonnie what are your expectations for volume with no big ten or pac12 games . Jason we were very cautious with our forecasting. When we issued guidance in the last Quarterly Earnings call, we did not actually include College Sports of any kind in our forecast. Gainsl like if there are games that will be played, they can be done safely and that is some upside. We are not counting on it. I think for everybody, the more important thing is just to see sports, whether it is the nfl, college football, anything else to see them successfully manage through this gives everyone confidence or would give everyone confidence that as a country and globally that we figured out how to live in the world of coronavirus. I think it is a very big litmus test. If theres a setback, people will look and say we still havent figured this out. If it goes well, it will inspire a lot of confidence with consumers. The relationship with michael jordan. How do you capitalize on that . Other than having the most famous athlete in the world connected to your brand. Really, as much as michael has accomplished a ton as an athlete, he has perhaps accomplished more as a businessman, a brand marketer. Nobody debates he is one of the preeminent geniuses of the last several generations when it comes to business acumen and brand marketing. A lot of what michael has built in the various brands he has gotten behind, that has really resonated with us. Similar to what we are tried to do when we build our brand and our business. We are looking forward to getting advice from him on how we thought about that and how it applies to what we are doing. I think hes going to be a great addition. Vonnie could you give us anything concrete about plans . Are we going to see him anytime soon . Jason the nature of this was not meant to be marketing or promotion. It was to tap michaels business mind. We are going to hopefully get a lot of great value behind the scenes that will show up in our product and strategy, but right now, there is no plan to have him do anything beyond that. I think that is really the focus. Robbins, the ceo and cofounder of draftkings. Coming up, we talked to the ceo of master class on tips to improve at home learning. Plus, his take on his own personal struggles in education and concerns about other children. That is next. This is bloomberg. Emily we close out our virtual classroom series this week with my conversation with how to improve the athome learning experience with david rogier, the ceo of masterclass. He opens up about his own struggles with education and how urgent it is to make sure no child left get gets left behind. We started about talking about the demand for masterclass amid the pandemic. David we have seen large spikes in demand. There was weeks where it was 1000 up year on year. It has been a huge surge. Emily talk to us about what youve been doing to meet that demand. I know youve raised new funding, you are trying to get more celebrities on the platform. David yeah. Weve been doing tons of things. One is, weve been working to offer free classes that are live, ones that are free for people that cant afford it. So, tons of stuff there. Weve also been doing a big expansion on the amount of classes we have on the subjects and fields we have. One of the things we found is during this time, what people want to learn about changes. For example, one of the classes that has taken the most right now is actually chris boss class on negotiation. Chris is the former lead fbi hostage negotiator. Why people want to take this class is he has a class on tactical empathy. It is basically how to apply empathy. If you are at home with your kids or husband or your wife, wantou need to help i Internet Access and i want to work in this room, that is a very good skill to have. Emily what are the other classes you are most excited about . Your big push is getting new content, Getting Better and pep better and better people, and creating that desire to log in. Classes that i love are ones that change how i think about the world. I will share one. Zimmer a class by hans who is the film composer. I have a horrible ear. It is hard for me to keep rhythm or to keep a beat. Hans zimmer starts his class by saying every note, either asks the question or answers the question. The first time i heard that, what is he talking about . Then, he starts playing notes and saying this is a nice question, this is a hard question. I could hear it. That completely changed how i hear music. Emily now, obviously, masterclass classes are fun. Do you see the potential for them to truly augment a traditional or serious educational curriculum . David it will never be a substitute for in person learning. Ig oneone of the b of the things that are changing is in the pandemic, one of the things that is occurring in education that will change education is almost everybody on the planet has to ask themselves one question, which is how do i learn online . That is a question that lots of people have never thought of before. One of the impacts of that is theres parts of Online Learning that are better than in person learning. One of those things is Online Learning allows you to pick who in the entire world do you want to learn that thing from . It is not dictated i where i live, what school i go to. So, if you were going to do that, one of the things i want to do is learn from the best in the world. I think that is part of why we have seen such a big su rgrge in the amount of people taking masterclass right now. Emily have you ever thought about giving credit or certificates or somehow formalizing the education . Theres a lot of not so flashy platforms that offer education, but are more focused on the outcome. David yeahm. One of the things we actually judge how we judge our classes our success, we ask our students what they care about most. Its not about grades. It is not about they pass the test or class, it is about the impact they have on their life. One of the ways we judge their success, we ask people is this class to change your life . That is how we measure if it was a success or not. Right now, about one fourth of our members say the masterclass actually changed our life. That is one of the facts i am most proud of. Emily before we started this interview, you said you have struggled with a stutter which has been a topic of conversation with joe biden talking about his struggles. With so many kids remote around the world, one of the things im concerned about is how do you celebrate the individual and deal with the individual challenges that each student has. How concerned are you about that given your own personal journey . David its a really great question. Hard to beis really a kid and to stutter. I still stutter now, right . One of the hardest things is you are teased for it and people spend time to think about how you are saying it compared to what the actual idea is. That is really hard because i want people to think about what im saying and not so much about how. I think one of the nice things about online, and it is not a replacement for everything in person, is that it allows you to go oneonone so you can meet with other people in your classes. You can get a tutor. It is much harder in a full classroom for anyone teacher to be able to spend time with one student. What it allows online, and there are some things on our platform and others, but allows you to get that one on one help. I dont think doing things online takes away from that. I think you just have to work harder to find it. Closing out the virtual classroom series. That was masterclass ceo david rogier. Really appreciate him sharing that with us. Coming up, the next generation apple. Tim cook and his deputies cultivating a new era of leaders. We will take a look at whos who, next. This is bloomberg. Emily as ceo tim cook begins his 10th year at the helm of apple, he and his top deputies focused on the next generation of leaders. Those who will run some of the iphone makers most important divisions, from hardware to marketing. For more, i want to bring in mark gurman who covers apple and Consumer Technology for us. Obviously, tim cook has been upfront. There are some longtime deputies like eddie q, phil shiller. Whos on the bench though, really, to potentially move into position when tim cook gets tired of his job . Mark the biggest question is who is going to be the next ceo of apple . And the answer is quite clear and thats going to be coo Jeff Williams. The only wrinkle that williams is two to three years younger than cook. If we are looking at this from an age perspective, he likely wont be ceo for long or could simply be ceo if cook steps down sooner than we anticipate which i dont think is going to happen. Ibn our story, we talk about who will be the Different Division heads for the other big groups like marketing and software and hardware and all that. Emily tell us more about Jeff Williams. Why Jeff Williams and not some of the longer term deputies who were there going as far back as steve jobs . Mark Jeff Williams has been at the company for quite a while, but he was named ceo back in 2015 coo back in 2015. He runs all the companys operations, so that the entire supply chain. They have been positioning him for this role given they gave him her response ability over hardware and Software Design last year. Which means this person is not just an operations guy like tim, but hes also in charge of product development. For all intents and purposes, he has been a good job of being at the head of the apple watch and health care initiatives. Dont get me wrong, Jeff Williams is an Operations Executive first, but he does have some of that leadership expertise that cook has not displayed as much. Emily what about on the diversity front . How well is apple doing in terms of promoting and advancing folks who dont look tim cook and Jeff Williams . Mark right. If you look at the numbers, the percentages of diversity the company has by the way, they have not released numbers this year yet it is not particularly great. If im looking at the list of people we believe they are targeting to be the next generation of executives if you look at marketing, two of the people in line to potentially take over for marketing, Susan Prescott who runs the app marketing both women. The person in line to eventually become the head of operations is a woman. We have someone who is going to probably be the next person in charge of chips. He is from india. Theres a bit of a differentiation. On the executive level, the current retail chief and the previous retail head, in july ahrens, both obviously women. Undercooked, they have put women in charge of two major divisions, retail and general counsel. I think theres clearly more to come in the coming years. Emily all right, mark gurman, you will be all over it. Thank you so much for giving us that update. Really fascinating story on the next generation of leaders at apple. You can see that at bloomberg. Com. As we have been covering, epic games has been embroiled in a royal battle with apple over an app dispute. The iphone maker filed a counter suit to stop epic from using its own Payment System for the games. As part of my interview with Ceo Tim Sweeney in late july before the legal spat, we talked about fortnites success since its creation. Take a listen. Tim it is not just a game. It is a place where you can bring together friends, performers, artists and musicians and different people to create really exciting events. The longterm future for fortnite will be opening up more and more to Community Creation so you dont need to do it the old way to bring contents of fortnite. The environment we have using the unreal engine tools and bring their experiences the fortnite. Whether it is an event, a concert, a movie anything like that. Tim lets talk about the movies. You are working with Hollywood Studios on content creation while content has been stalled in the middle of the pandemic. Emily talk to us about how your technology is being used to create a movie like mea ndelorian. Tim the Unreal Technology that is powering all of this had a. 5 there are scenes that are impossible to distinguish from reality. At that point, everybody else in the Game Industry became interested in it. Virtual production of movies, architecture, design visualization, if you are designing a car or any consumer product. Ins brought a lot of growth bringing the technology outside the Game Industry. Emily fortnite came out in 2017, but you started developing it in 2011. What happened in between . I believe there were some peaks and valleys. Tim yeah, at the time, epic was developing the gears of war games for Microsoft Xbox as the primary effort. Fortnite started out with a team of 10 people that got together over the course of the weekend built this experiment. We spent about seven years trying different variations of it to try to find the magic of it. At the end of the exterior, after we built a cooperative multiplayer game, Battle Royale became the hot thing in the industry. We built fortnite better royale and that turned out to drive big financial growth. Something weve never seen at epic for the Game Industry early reached 350 million players worldwide in just course of a few years. Emily tim sweeney, the ceo of epic games. You can catch the full episode 1. 0 thiserg studio weekend starting 7 30 p. M. Eastern time tonight. That is it for this edition of lumbar technology. Im emily chang. Happy friday. Have a wonderful weekend. Hopefully you can breathe better as the weekend continues. Wall street week is next. Dont miss it. 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. David dont rock the boat. California wildfires, the return of no deal brexit, and an explosive book about President Trump set to put the market on edge. This is bloomberg wall street week. This week, speaker of the house nancy pelosi. We need a stimulus in terms of job creation. David contributors larry sommer of harvard. Afsaneh beschloss of rock creek group. And Stephanie Flanders of bloomberg. Stephanie many people in the Financial Markets are expecting them to do more to stimulate the economy before the end of the year. David ross gerber of gerber kawasaki. Dan chon of