Election day in what could be the most volatile week of the year. But, tech is still lagging. We will preview upcoming earnings. My exclusive interview with snp ceo klein. Could this mean bad news for the rest of tech . First, the earnings parade continues with posting its annual profit forecast with new accounts searching. Net new accounts jumping 55 from a year earlier. We will get to that in a moment. First, Abigail Doolittle has been looking at the broader markets today as we head into the big day. A lot of anxiety going into tomorrow. How are investors digesting it . Abigail anxiety describes it well. More jitters on the part of stock investors. Another wild day. Sharply higher. Afternoon, then finishing up just a little bit after the close. Investors were selling the tech stocks, or some of the tech stocks, and buying up some of the cyclical, growth sectors such as energy, industrial, materials. On the other hand, volatility, still very,0 fix very elevated. The investors are concerned about the overall macro sure, throwing some fire into the the picture. Into bonds were higher. Work, one of the bigger thecs, a big mover around resurgence of the virus. In europe, the u. K. Back under lockdown. Travel and leisure stocks falling. On the other hand, clorox, on their bleach and other cleaning products, they put up a blowout quarter. As is cosco. Rging, wild trading day with all of these macro factors and especially the election. Emily we will get to that with Christian Klein later in the show. Less techut how the heavy indexes climbed. Abigail i think some of it has to do with the week Third Quarter or lessthanperfect Third Quarter that some of these Companies Put up last week. Withigger story has to do too far, too fast, as we have been talking about for weeks, months even. These stocks have gone up in an astronomical fashion on the year. They sold those stocks once again today. Another piece could be the rotation into the cyclical second is where we have some this after hours. Paypal down about 5 in the after hours. It looks like a Profit Guidance that eat. The revenue guidance missing the mark a little bit. Of course, the big headlining event tomorrow, needless to say, the election. Emily absolutely. Abigail doolittle watching all the back and forth for us. Now, to more on how tech investors are bracing for the potential volatility that might follow election results. Portfolio manager at independent Solutions Wealth Management joins us. Going to be an Inflection Point . If so, how . Paul i dont think it will be an Inflection Point, particularly for the tech sector. I think the key issue is the final passage by congress of the fiscal stimulus. That is what i am looking for before i get too excited about going back into particularly tech stocks. Emily you have a similar Market Outlook whether it is biden or house . N the white paul i think there is not going to be that big of a difference. I know that sounds a bit weird. If you take a look over time, no matter who is in the white house, democrat or, if they have control of both houses of congress were not, there is not that much of a difference. This,hink coming out of aggressives will be and as long as we dont have to shut down the usa again and we dont have a repeat of the business closures from march and april, regardless of who wins the election, i think we will be in a pretty good position for a as therket in stocks smoke clears. Tech, talkt comes to to us about what you are buying at not buying. Latewas around in the 1990s. At that time, i ran some tech portfolios for merrill lynch. I dont think that this is a bubble, at least of the same magnitude. Today, the publicly traded companies, even if they are emerging companies, are much more real. Back then, you had a lot being foisted upon investors by investment bankers. I could tell, when they came through our offices, that these companies were not real. We dont have that today. These days, it is much more difficult to have a company that is still needing to be baked, to come through the ipo pipeline. And Interest Rates so low growth forecasts so low, i cannot see tech stocks not outperforming in the future. Growth should outperform value in that scenario and the tech company should do well. Again, this is not a perfect below. Not as worrisome as heading into the top of the internet bubble in the early 2000s. Emily a question coming in from a viewer on the terminal, asking, what do you see as an appropriate hedge for tech and mega cap stocks . Paul what i try to do for my portfolio that i manage for i thinktake all all u. S. Equity investors once the smoke clears should get back to neutral weight. On the 60 side, i do have companies that are nontech. I dont buy them unless they yield 2 . You have a nice balance. Some volatile tech names. Of yield orth 60 companies that still have price appreciation potential but are much less solid and more volatile. Emily when you look ahead, what do you think are the biggest risks or threats to tech stocks . Obviously, we are dealing with regulation. I think it is a couple of things. One of the things you are seeing playing out right now, and that is why i am cautious, you have Companies Like paypal announced results tonight. A covidun in 2020, beneficiary. Wall street will raise those numbers for the rest of the year but the stock will be down 5 tomorrow and has to drop another 5 before i get reinterested. The biggest risk is too far, too fast. Nothing fundamental, just too far, too fast. Then, of course there is the , days if not weeks if not months, and that pushes back my key catalyst, which is congressional passage of the fiscal stimulus. Once we get through that, i am feeling very good about growth over value and stocks. There is probably no asset class. Tot you have to be exposed in that kind of background. Always appreciate your insight on the show. So much forthanks stop by. Coming up German Software maker sap alarming investors with signs of slowing revenue growth. A revenue point for the business. Bringing you my exclusive conversation with ceo Christian Klein next. This is bloomberg. Emily when German Software maker sap cut its forecast last week, shares plummeted. That it mighted be shortlived. In an exclusive interview, i spoke with sap ceo Christian Klein. He says the pandemic is an Inflection Point as customers move to the cloud. Take a listen. We want to invest in now. We want to invest into our aunt d with our customers because they need us now. To comea key enabler out stronger. Shares have now plummeted, wipe tens of billions of dollars off your market cap. How can investors have confidence after such a massive blow . As i mentioned, we have guidance out there i dont want to trade the success of our customers by forcing them to buy more while they want to move to the cloud. This is why we are now shifting parts of our guidance. We will accelerate the growth in the cloud even more. Numbers,look at our q3 why is revenue 14 . If you exclude our travel and who can blame this crisis for not and their business. This is a time after covid that this business will bounce back. I am extremely confident that we will even accelerate our growth in the cloud for years to come. Emily salesforce Ceo Marc Benioff rejected the idea that this a bad omen for the rest of the industry. He said you are still going through a ceo transition. Do you think Companies Like oracle need to worry about the forecast ahead . Met in davos and we had a friendly conversation. What we are focused on is the success of our customers. Leader andrket skyrocketing. Focused on making the connection work between the front office and the supply chain. This is what we are focused on. Emily do you think this is accelerating a shift away from on premise permanently . Christian absolutely. This is part why we changed the guidance. I also talked to many of the investors. While they were disappointed about the shortterm change of guidance, everyone said this is the right thing to do, because the cloud is the way to go. This is what makes sap successful especially in the midand longterm. Not one single customer reached out to me and complained. Everyone actually reached out and said, thanks for listening to us, thanks for moving us to the cloud. , ande u. S. , we have many now we are going to hire more engineers. There is no other Software Company in the world who can really make this transformation for our customers. Emily speaking of the u. S. , you have an interesting outsiders Vantage Point from germany. We are heading into a president ial election here. How does whether it is biden or trump in the white house impact your outlook . Christian i am a german, so i will be a close observer tomorrow. A great partner for you and also for s. A. P. I wish the country all the best for tomorrow. Can catch the full interview at bloomberg. Com. Coming up, facebook and twitter ramping up to prepare for a potentially chaotic Election Night. But, are there guardrails enough . We will speak to the president and ceo of the Leadership Conference on civil and human rights next. This is bloomberg. Twitter reiterating its policy today that it will flag tweets from certain accounts including those of President Trump and former Vice President joe biden that claim an election victory before at least two authoritative Media Outlets confirm the outcome. Are these actions enough to protect the integrity of the election or should social Media Companies do more . I posed that question to vanita gupta. Vanita i think that they have made significant progress through the summer and even in recent weeks, announcing efforts to protect the legitimacy of the it ison, recognizing that not just to make sure the platforms do not amplify Voter Suppression or efforts to dissuade voters, but recognizing the really Important Role that the platforms will play in making sure that disinformation about results and the like are not are not elevated. Do i think it is too late . Do i wish they had taken these actions up earlier . Yes. We went through a primary season that was infected with disinformation. I think it is important that the platforms have taken the steps they have. We are continuing to push them , but these steps are crucially important, especially amid covid where people are getting their information online, the importance of fighting disinformation on these platforms is as important as ever. Emily facebook did take the dramatic step recently to ban qanon. Do you think that had the impact you want to see and are you still worried about violence on election day . Vanita i am heartened that facebook did that find it was too late. We have been pushing facebook to take action. It is really important that they did take action. Qanon,ill worried about proud boys, other entities that can make people feel scared, regardless of what comes to pass. This is the important message, that we have had a record , even though there is activity,out militia white supremacist activity, voter intimidation at the polls, the fact that we have had tens of millions of americans showing up, casting their ballots in person or absentee has been really heartening and, frankly, wehink the best fight back can have for concerns about the. High turnout could bring a decisive victory. Well have to see how this all plays out. That was my next question, what is your confidence in the integrity of the election . Will this be a Fair Election . Vanita gupta i believe in the vanita i believe in the end that this is a strong democracy. The high voter turnout, we have systems in place, lawyers at the ready, i believe we will do everything we can to safeguard our democracy to make sure that votes are counted. Americans need to be patient. This is an unprecedented election. It is quite possible that on the night of november 3 we will not know the final results. It will be important in states that dont even start counting the ballots until after november 3 that they will have the space to do that and ensure that every vote is counted. It is taking all of us doing everything we can to ensure that our democracy remains protected. Emily how concerned are you about poll watchers scaring voters away, Election Night and post Election Night chaos and violence . Vanita i am always vigilant around what poll watchers will do. Anecdotal stories have got national attention. As ad large, we always country have dealt with voter intimidation especially against black and brown voters. Local Law Enforcement are making clear that we are not going to be tolerating voter intimidation. That voters need to feel safe, be safe. That platforms have a role to that organizing to scare voters are not amplified and are actually shut down. These are all part of the efforts to ensure that voters feel safe and have confidence in casting their ballot and make sure their ballot will be counted. , president ta gupta and ceo of the Leadership Conference on civil and human rights. Coming up, just a day out from one of the most crucial elections in american history. We lied arizona, one of the key battleground states, to get the latest. This is bloomberg. Emily this is bloomberg technology. On the eve of the election, we look at arizona. A once republican stronghold now and play. Biden has led in the polls by around three point since the summer. Changing demographics and growing suburbs, the pandemic and influx of Median Income workers are a factor in the state that President Trump won in 20176. Joining us to discuss what could turn arizona blue is ed ludlow who is on the ground in chandler, arizona right now. Talk to us about this influx of new workers from Silicon Valley could play in the arizona results. Of massive a story population growth and changing demographics. It applies to arizona statewide. Am, therer where i about 30,000 workers employed in Hightech Industries including semiconductors. Intel employs 12,000 people here. Software, you have the likes of paypal, godaddy. Com. Underpinning all of this as it relates to the election is strategists and policy officials on both sides who feel that collegeeducated, medium income workers and their families are not going to be voting republican or for president in this election. An area of focus for both parties. The democrats made progress in chandler and broadly in arizona in the 2018 midterm. Even in the case of registered republicans and collegeeducated women, they are seeing signs that those types of voters are breaking with the president and the republican party, and moving towards democrats. Almost 50 of the workforce holds a bachelor degree or higher and that is an area of focus from both parties. That the republicans do not feel they can pull back those voters over the next 36 hours and the democrats feel they have made Real Progress this election cycle. 100 Million People have cast ballots early. Talk to us about arizonas early Voting System and the processes there. Ed yeah, so arizona is good at counting votes. They had an early Voting System since the early 1990s. 2. 6 million early votes either by mail or in person have been counted so far. 800,000 that are yet to be counted. That is statewide. The feeling from democrats and republicans i have spoken to his this is going to be a very close race. They will publish a preliminary a result around 10 p. M. Eastern time on tuesday but the feeling is we could still be counting for some time. There is confidence in the security of the Voting System here. Both digitally and in the physical mailin ballots in terms of antitampering technology. Even though biden has led in the polls by about three Percentage Points through the cycle, another nbc poll has him even. The feeling is we will still be counting votes for days to come. And even though there is a swing state status for the first time you much ever here, they will make sure they get it absolutely right this time around. Emily we will talk more about the technology being used to count the votes in a moment, but first you have been on the ground, you have been talking to voters. What are you hearing from them in arizona . Ed yeah, covid is front and center for many voters. The president has been here on a number of occasions. Vice president pence has been here. On covid, they have been saying we brought you ppe, we got the economy open. The president was pressuring the Arizona Governor to reopen. On the democratic side, they are pushing hidard with latino voters, saying the republicans dont have a plan when it comes to covid. We are seeing the recent uptick in cases in recent weeks. They are also targeting latino workers. Especially around the economy, President Trump was promising job creation, promising to support latino owned businesses. You also have the democrats out and they feel they have the strongest Grassroots Movement they have ever had. They are really focused in the last 36 hours on the latino vote, which is 30 of the states population. Particularly because it is a demographic that does not work proportionately high. They are out in the grassroots areas, pushing the vote, pushing people to go out that normally would not. Beyond covid, beyond the economy, education is also an issue. There is a shortage of teachers and they have struggled to get schools reopened. These are all factors top of mind for voters in arizona. Emily ed ludlow on the ground in arizona. Such a critical state. We will be following your reporting. Thank you. Over two thirds of the 2016 vote total have been cast already ahead of election day. Even so, close races and key swing states like arizona suggest deciding a votes are yet to come. Here to talk about counting the vote in the most crucial u. S. Election in years, kathleen hale, the Election Administration initiative and graduate program. Professor at auburn university, thank you for joining us. Looking at these numbers, it is incredible. 136 million ballots counted in 2016. We are at almost 100 million. I may be dropping off my ballot after this show. What do those numbers tell you . Kathleen well, first and foremost, they speak to tremendous enthusiasm among the voting public to have their voices heard. There are more options than ever before. Voters are taking advantage of things like early voting and catching a ballot casting their ballot by mail. Orange county, california, there is a drive up option as there are in other locations. The more, the merrier. Of, sort of a lot speculation about whether this is a good thing or a bad thing, but this is democracy and voting is how we measure that. More is better. Emily democracy in action. We have talked a lot on this show about the role of technology and counting the vote, whether it is Voting Machines or websites that are tallying election results. In many ways, tech can be helpful but can also undermine the process if it does not work the way it is supposed to. What are some things you are watching . Kathleen i think one of the things we are watching is sort of the absence of bad news. Of highspeed scanners out there working to count votes. Some states use those exclusively, some match those up with human interactions to determine signature verifications and different sorts of things. Not all states have begun counting get. I think one of the overarching pieces to think about with technology in this election cycle especially is that with the volume that we have, we can expect that things will take longer, counting will take longer to occur. These machines run at a particular rate and the volume has to be processed. Having the and patience to wait for every state to follow its counting process is critical. I think it is important to note that these counting processes have been in place for a long time. They are not brandnew, they are not brandnew for the 2020 election. And Election Officials, local Election Officials on the ground are exceptionally experienced in doing this work. Emily technology is also involved in shining a light into the process. For example, livestreaming polling places, mobile apps with inltime wait times to get and place your vote. Obviously, technology has advanced in the last four years. How will this election be different than in 2016 from that perspective . Kathleen i think in a couple of the ways that you indicated, technology is allowing us now to take advantage in a popularly acceptable way to look in real time through livestream. This is not different than it is technologically more advanced. It is not different than the transparency local election offices have always provided with physical viewing possible, through very low tech plate glass windows. The process has always been transparent with the use of voting equipment. So, technology is making that realtime experience. Whether it is watching the accounting process. Whether it is watching an audit. Usingt is watching a a look up app to find out where your poll site is or where the wait times might be the shortest to speed up the voting process. All the ways we are using technology in our regular lives, those apps and processes are coming to the voting process. Emily we talked a lot about how social media has potentially undermined the process in 2016. But this morning, i woke up to a tweet with a father talking about how his daughter tracked her ballot, it got lost along the way. She was getting in the car for a 4 hour drive to vote in person. Talk to us about how these platforms can help, can step up to the plate on this, one of the biggest tests in facebook and twitters history. Kathleen i think the idea of tracing your ballot is something all of us can we know when we order from amazon or our favorite retailer now, we can track our packages. And tracking your ballot is really no different. Varietythe real big of methods of voting in 2020, there are also now these newer apps in some places to help voters do things. Theres a huge learning curve for the voter right now. The illustration of tracking your ballot and realizing where it is, and then being able to making different decisions based on that and your own personal choices, i think thats what voters expect. Emily it is a good reminder that if you voted early, pleae also track your ballo to make sure it gets there. Thank you for joining us on the 11th hour. Really appreciate your insight. Coming up, big techs relationship with washington also at stake this election. We will speak to a veteran Silicon Valley lawyer who has fought big antitrust battles against microsoft, google and oracle about what he thinks the future will look like for tech giants. Thats next. This is bloomberg. Emily in a report, lawmakers set amazon, apple, google and facebook need to be checked. Last month, that report issued they be restructured and entry trust loss be reformed. What might these antitrust laws look like . Big silicons a valley lawyer who fought big battles against microsoft and more back in the day, gary reback. First of all, the doj has a big antitrust suit against google. Does it matter whether trump or biden is in office, and how does that change things . Gary i dont think it will be a change in the lawsuit itself. Obviously, if mr. Trump is reelected, he brought the suit in the first place. Even if mr. Biden is elected, i think the way these things work, we can expect the cases to continue. Emily what is your take on the google suit in general. Some critics said it is too narrow and didnt cover things like search manipulation and many other issues. Gary yeah, there was a lot of confusion when the suit was filed because it was intentionally drafted by the government to go after contractual issues and default settings. But, that is only the charging element of the complaint. Elsewhere in the complaint, they list search manipulation. In the potential remedies, they list structural relief. So what the government has done is they set themselves up to have a lot of flexibility down the line if they can win the liability phase of the case which i think they will. Emily why do you think they will win . Gary well, they have pled the case based on what contracts say. They must have those contracts, right . So, i think they will be able to do what the contracts say. They will be able to prove that google is a monopoly. I dont think that is debatable. The only issue will be what to do about all of that. That is going to be a big issue. That is where the big fight will be. Not so much at the liability stage, but at the remedy space. Emily lets talk about the remedy space. We obviously have this report from the House Antitrust Committee singling out not just google, but amazon, apple and facebook. Paving the way for what could be a breakup of these companies years down the line. What does the remedy look like . Gary no one knows. Those are good questions. What does the remedy look like . One thing we know for certain, they cant do just contractual remedies. In other words, they cant limit the remedy to the charging elements of the complaint. We know that because europe tried that and it was a total failure. They found google liable. They set up mechanisms that obviated the effect of some of the contracts. It didnt matter. You are going to need some bigger relief in order to change whats going on. They are leaving themselves the option of structural relief. Usually what happens in antitrust is, in these big cases, if the defendant loses the liability phase, they will negotiate a restructuring themselves. Thats what happened in the at t case. Withoutructured itself even forcing the government to go to trial. So im sure thats what the government is hoping for. Otherwise, the remedy space will be long blemished. We believe the ftc is preparing a case against facebook. Do you think that will happen and will there be a case against apple and amazon . Gary you know, theres a lot of speculation about the ftc along with a large number of states is prepared to file a lawsuit against facebook by the end of the year. However, speculating about what happens after the election and before the new administration is kind of tough to do. Wins,mp loses and biden is there anyone in the administration who will have enough interest in this to purs ue it, knowing that the administration will go out of the office in january . The facebook case has been delayed again and again and again, so i dont think anybody ever has as much confidence that it will be brought as people have in the google case. I think we are still waiting on that one. On the other big companies, i dont think we are going to see action immediately. I think there will be a big fight about legislation and the legislation that is being proposed would cover them. I think thats where the action is going to be. Right, gary reback, Silicon Valley antitrust lawyer. Gary,really appreciate really appreciate all your veteran perspective on these issues. We will continue to cover them every step of the way. Trumpahead, would donald have been elected in 2016 if social media did not exist . Our interview with some Silicon Valley veterans and the stars of netflixs hit documentary the social dilemma. This is bloomberg. Emily twitter Ceo Jack Dorsey told senator ted cruz last week that the platform has no ability to influence the election. Some of the guests on netflixs recent hit film the social dilemma was also featured in our latest episode of studio 1. 0 think the opposite. Take a listen to the Silicon Valley veterans who believe there would be no President Trump if it werent for social media. Evidence thatear social media has contributed significantly around the world to the collapse of democracy and to the rise of authoritarian regimes not just in the united states. I think there is unequivocal evidence of that. A weirdewsfeed had pattern that one post that had a word and it would always get shared and liked. What was that one word . It was trump. That word was a pattern matching signal to the newsfeed that this is a guaranteed way to get engagement. Whether it is a positive story or a negative, his name, his variability to say outrageous things became a self reinforcing phenomenon in 2016. Every single story you would scroll through was a trump story. I think when you look at how central that was to him even holding the spotlight of attention, you think about your own life. Do you ever vote for someone who you dont put any of your attention on . No. Perceivesion economy every election. Those who can say the most outrageous thing are going to win which is why i agree with what has been said, this is why we are seeing digital authoritarianism rise. Emily how concerned are you about the integrity of our elections . Our democracy . Very concerned. I think that for all the points that were made, i just think these platforms have this distorting effect on our world, ir sense of what is true, and think the platforms themselves are acknowledging in the case of an ambiguous outcome for an election, they can have very negative effects. The fact that head of Global Affairs said we have some glass breaking options if things get really ugly. They have a whole set of fontingency plans in place i democracy starts to erode. They are game theory it out because they know that is a real risk factor in a month. To me, that reality is scary and alarming. Emily you can catch that full conversation on the latest episode of bloomberg studio 1. 0. Very timely ahead of whats happening tomorrow. That does it for this edition of bloomberg technology. Radioow, bloomberg tv had will be bringing you special coverage of the election. David westin will be leading the coverage starting at 7 p. M. Eastern time. You dont want to miss it. Bloomberg daybreak australia coming up next. This is bloomberg. Welcome to daybreak asia. Haidi im haidi stroudwatts in sydney. Our top stories this hour wall street recovers from its worst week since march on the eve of the u. S. Election. Oil rising for the most in three weeks. The campaign is in the home stretch. The two candidates searching for votes in key swing states, that of a poll th