from bloomberg headquarters in new york i am caroline hyde. .oe: i am joe weisenthal forine: the fastest ascent the s&p 500 giving them away to the fastest closing at a record high. joe: the question is, "what'd you miss?" caroline: the s&p 500 did close out the record high but there are signs that bp's failing to

come up with a forced him is round is having an impact on the markets. walmart senator warren say that the retails sales cut slowed last month as government released ease. barclays is using the recent coin shortage of the gauge of economic reopening. seeing evidence of a recent slowdown. not to be too much of a debbie downer on the record close but is there something to worry about? joe: we got a be really listed. this is an extraordinary market come back we got a be realistic. yes, there is no deal yet in d.c. but people have been warning for a while that this or that was going to end this rally. and it has not happened. so, the second wave in all this stuff. and the failure to get a deal is supposed to kill this rally. has not happened yet. that being said, there are several reasons to be concerned, that people should be wary about including walmart today. for more, joining us now is senior retail analysts jennifer

-- of bloomberg intelligence. thank you very much for joining us. when walmart first came out with its report this morning, the stock immediately surged. rallied 6%. then he gave it back. what was the initial impression people had, and what afterwards did people realize perhaps was not so great? >> thanks for having me. announcedesults were this morning, they had an amazing quarter, which is why the stack rallied -- the stock rallied in premarket. all the numbers were good. e-commerce was through the roof, but as we started to hear from management, really it was they were showing concerns about the sustainability of that place of sales as we move into the 34th quarter. and that really ties back to what you are talking about with stimulus spending. romaine: when we saw these results out of walmart and we've seen this with other retailers,

jennifer, they not only benefited from the rise in sales that we saw but there was considerable margin improvement. was that improvement because of cost controls or was that also tied to the outside gain in sales? >> a lot of that margin improvement was due to the outside gain in sales. they have done a very good job of controlling costs. walmart did some restructuring. other retailers have done the same thing to really keep costs as tightly reined in as possible. but when you have such big sales, it really does provide you with a lot of operating leverage and does benefit margins. caroline: what is next? as we see a struggling of any sort of stimulus deal to be imfed upon in washington, just did as to what can really stimulate the continued growth for walmart -- i am interested to see what can stimulate the continued growth? are people going back? >> back to school is a big

question for walmart right now. i think there will be good spending. it is just it is not going to be the same way we typically think. people are not buying backpacks and school supplies because there is this concern that kids are going to end up learning from home for a lot longer than we thought. but, instead some of that money will go into technology, updated laptops, monitors. things they did not buy at the end of the school year because they thought they were just going to get through through months but now looking at a long semester may decide they need to upgrade their equipment. joe: walmart is a type of money -- company that can thrive in multiple economic cycles, on an upswing and more people are spending and when people want to shop at walmart when things are slowing down because they have low prices. if you walmart itself is seeing impacts of this lag where unemployment insurance has gone away. to assume thate

other retail players may be feeling it even worse, places that do not necessarily benefit from the desire of people to buy at a discount? good point invery that walmart does do well in any economy. the one thing i would say is that even though same-store sales in july decelerated to 4% that is higher than their average around 3%. so, even with the slowdown, they are still running at a higher place. that is what we are looking for it through, the year with walmart, is that they have that cap ability to out peers. to answer your questions there are retailers that may suffer more as the economy, spending slows down, especially on the discretionary side. romaine: what about the shift we saw, jennifer, with regards to buying more stuff online, and pickup in-store? walmart had been invested

heavily in that model prior to the pandemic. we know that amazon was a beneficiary. and we started to see a lot of other retailers make that investment in an effort to keep up with amazon and walmart. is there any real competition therefore those two companies with regards to that model? >> target has to come into the mix and they have their earnings tomorrow. we will see if there is a good read through from walmart with regards to targets results. it is true. the companies that have been investing in the last 12-18 months into and on the channel strategy that are the ones that are able to reap the rewards. other players just starting to invest now may find that they shares that are difficult to regain. with online shopping, once people start up better and it is harder to break that pattern and win them back. that will play an important part of the strategy going forward for these big locks retailers. otherbviously walmart and retailers are doing fantastic

online, but that means they have to pay the companies who deliver goods, and we are seeing delivery companies on the whole are starting to flex their pricing power. last week we had ups talk about surcharges, today we had fedex. is there going to be some margin erosion as the entities that do the delivery really and not just for walmart but in general, really realize they can take a bite out of some of those profits? >> that is a great question, and --is true the should be cost as the shipping costs rise for companies like walmart and target who played to value customers and they cannot raise their prices much higher to compensate for that, but should generate some margin compression. margin forough gross walmart was up this quarter we do not think that is sustainable. for will come back down,, one of the reasons you mentioned, the increase in e-commerce. caroline: thank you so much. all things retail. bloomberg intelligence. coming up, prime minister justin

trudeau names canada's next finance minister. what this signals about that country stands on stimulus. this is bloomberg. ♪

romaine: big news out of canada. justin trudeau naming chrystia freeland as canada's new finance minister, and joe, if anyone knows chrystia freeland's her background, it has been quite a ride for her. joe: we should all be really excited. named theas been finance minister because, of course, she has a background in media, having been at reuters,

the financial times. anyone of us three probably can be -- could be a g7 finance minister one day. how can we not be very excited about what this means for our career prospects? [laughter] caroline: i am seeing the next job opportunities come pouring in. meanwhile, let's see what she is doing on the ground, because she has been away from journalism and spending a lot of stimulus -- a lot of cash. stimulus in the picture compared to the u.s. with all the infighting. while canada get money faster? your perspective to the trusted confidant of justin trudeau. from a foreign perspective, what do she mean for actual stimulus to the canadian economy right now? essentiallyxt is that the previous finance minister who resigned last night resigned amid some divisions

over policy. it is not about what has been already unleashed in terms of stimulus. the canadian government has already announced plans to run a kind ofof 16% of gdp to get the economy, you know, out of recession. the question now in canada, the debate is what do we do next? does the government continue to spend, continue to run historically large deficits to support recovery? and, also, as the prime minister said in the press conference that ended a few minutes ago to make a historic investments. to use the pandemic as an opportunity to make transformative change. it is a very ambitious plan. it sounds like they are willing to continue to spend going forward. like theso sounded previous finance minister may have wanted may be a less

ambitious plan. nd ist sounds like freela more supportive of these longer-term objectives. with trudeau on that. romaine: i am interested in some of the behind the scenes maneuvering. of mark carney, of course, who ran the bank of england, as a canadian once at the bank of canada. thiswas his involvement in relationship and potentially, i guess, in the switch in finance ministers? >> essentially, the whole kind of dispute with the previous finance minister began with news that mark carney was advising justin trudeau on the economic recovery plan. that came as a surprise to the current finance minister. he was a little bit embarrassed by it. it felt like the prime minister may have been undermining his advice.

and, ones that story came out, there was a whole slew of reports of tensions between the two and that led to his resignation money -- on monday. mark carney is a superstar in this country, has been the most influential public servant on economics in a generation. he has had positions in finance and positions that the bank of canada. has, in a political ambitions as well. so, the speculation at the time was that he may have been interested in the finance job. obviously, that turned out not to be true. but there is still a lot of speculation here that at one point mark carney will jump into the political scene. joe: in the u.s., are stimulus basically, the big programs we let them run out.

ppp is done. basically the unemployment insurance expansion for workers who lost their jobs is expired. unclear if it is going to be renewed. what was the structure of the canadian stimulus, and what is a potential offramp? theare already mentioned size of 16% of gdp but structurally, what is being discussed as how it could look going forward? >> the government has introduced in income support measure during the pandemic, a brand-new program essentially giving , more than 30% or 40% of canada's labor force got one of these, at least one of these checks in recent months. and now they are moving these people out into the employment insurance program but making it very easy to get employment insurance. so, the government is working

very hard for there not to be a fiscal cliff and seems to be willing to continue supporting canadian households throughout the recovery. and, in canada, another isference is that the debate really on the left of the political spectrum rather the right of the political spectrum. justin trudeau has a minority in parliament. supportns he has to get from the opposition parties to pass legislation. and there is a party to the left of the liberals, it is called the new democratic party. letters tohe has the to remain iners power and move ahead with a high spending agenda because he can rely on support on the social democrats. joe: great explanation. our thanks. with the drama in canada.

coming up, we continue to dig into possible we points in the economy -- weak points in the economy and why you should watch the u.s. coin shortage. we will speak with joe debate. this is bloomberg. ♪

joe: welcome back. joe weisenthal -- romaine: joe weisenthal owes me 75 centss and refuses to pay it back because there is a coin shortage in the u.s. you can tell something about the pace of the economic recovery with those coins. we have looked at the data. there has been a significant drop in the number of available coins. why does that matter? what does it tell us about the pace of the economy right now? joe a.: so, one of the things it is telling us is that when the economy went into the shutdown,

a lot of the coins that would normally be circulating in the economy and through transactions ended up being locked up in cash register and cash drawers. and so, when the economy started to reopen again, this cash was least, wasle, or at not immediately available for transactions. so there was a shortage of coins that cropped up in june, and that the fed and the treasurer are trying to resolve at the moment. what it tells us about the economy is that the unevenness of the recovery, which is that, you know, certain businesses have been able to sort of come online quicker than others, both in region and type of business, and also, it tells us that, at least if we look at the current data, that the pace of the recovery seems to have kind of

stabilized or flatlined. that is, that the number of coins circulating in the economy, or rather being shipped from the federal reserve, has kind of stabilized since the middle of july. joe: let's talk about this little bit more specifically. we have a chart showing coin shipments picking up and flatlining. at first the short it seemed like an annoying aspect of this crisis. but you are actually able to look at coin velocity data or coin shipment data and tell us something specific to so, what is the data you are looking at. what exactly are you measuring and what have you seen lately? measuring --hat we what we are measuring is the number of coins in inventory at the federal reserve. and, specifically, what we're doing is we are comparing that ly index of economic activity.

anaren number of different indices you can look at but we find that there is a correlation of coinsween the flow circulating in the economy and the volume of transactions or the level of business activity in the economy. what we have seen, as you pointed out, the shipments in the last few weeks, since the middle of july. and that occurred at the same time the weekly activity indices have flattened out. it brings up an important point, which is that nobody for its ardeses -- nobody ho pennies. the only purpose for coins is to make change and change is correlated with transactions in the economy. that, if those transactions are not occurring or rather they are slowing, than the demand for coins is going to go down. so that is one of the reasons why we are looking at coins in circulation. caroline: how good a tell is a

going to be going forward? when i was in new zealand, they stopped cash being used because of the pandemic. will there be a sea change shift away from coins, even from paper and cash towards credit cards, towards plastic more in the longer term, and how long can you depend on coin velocity to be a tell on the economy? joe a.: i definitely agree on that. if you look at shipments of coins declining over a decade. i think, you know, obviously, we are moving towards a cashless or e society in terms of transactions. certainly if you look at the preferred means of payment, it is a debit card. at this point. you know, coins as an economic not, you know, is

not going to be useful in the future, but how much, how long into the future that, you know, is unclear. brought up, which was also interesting is currency, right, paper money. one of the things that we saw was that in covid the fastest-growing denominations were 20's and 50's rather than $100 bills, which is counterintuitive because, if you are thinking about a financial crisis or a crisis more generally you would think about hoardimg hundred dollar bills and instead what we saw was atm money being hoarded. about newint zealand's concerned about covid-19, my suspicion was a lot of people decided they did not

want to make as many trips to the atm and figured that they extra few out an hundred dollars or the 20's or 50's and spend that balance down rather than making multiple trips to multiple places to get currency. currency is still being used in the economy. and i do think that that is an important distinction to make, , first small value transactions, it is largely dominated by low denomination bills and coins. joe: romaine: does this have any practical effect on monetary policies? i am talking about the shift from physical currency towards electronic payments? joe a.: well, it does, in the sense that when you look at the fed balance sheet, the currency and circulation is a liability of the central bank. so the faster that currency grows, assuming no other changes

fed's asset side of the balance sheet, the faster reserves decline. and the way to think about this physicalanks or pallets of currency and the fed bits the reserve account. if currency grows faster reserves decline. in an environment where the fed's balance sheet is expanding rapidly, currency growing at coming you know, a 5% or 6% rate is probably not going to make too much of a difference in the level of bank reserves for the time being. caroline: thank you so much for coming on. barclays energy director of strategy, all things coins. meanwhile, that is all from "what'd you miss?" joe: "bloomberg technology joe: is next. romaine: have a great evening. this is bloomberg. ♪ you doing okay?

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with the xfinity sports zone everybody wins. now that's simple, easy, awesome. say xfinity sports zone into your voice remote today. emily: welcome to "bloomberg technology." i'm emily chang in san francisco. the s&p climbing to a record high with tech shares driving the rally, and especially amazon. of covid-19 and hospitalization rates seem to be improving. is still no deal on more stimulus. the second