from bloomberg's will hold good in new york. romaine: let's look at what the markets ended. the dollar gaining. questions were raised about the fed's next move. caroline: optimism with a healthy dose of caution. bucking the overall market. the retailer pushing record sales and profit and emerging as a key winner of the covid-19 era. a message to investors that wall

street has continued to underestimate the strength of the u.s. consumer. in the northeastern sun belt that theigns coronavirus outbreak is continuing to ease. however, the fed remains cautious for the second half of the year. i want your take away. what was the main reason for you with the target report? joe: basically all these gigantic retailers, they are all killing it. you had a little bit of differences between them, whether it is target or walmart or cosco or amazon. all these companies are doing phenomenally well. what was striking about target i think is that unlike walmart, it's not seeing any signs of meaningful deceleration in growth with the expiration of the employment insurance expansion. that is one of the biggest macro questions right now for the economy, for everything. which is ok, we have had this rebound in the economy largely

thanks to the stimulus. what happens a longer we don't have a deal? romaine: there is a question to how much the stimulus paid a factor in target's result. we heard from the ceo, really gave a master class and how to run a business during an economic lockdown effectively. he did say stimulus was a factor, but he said even with that they saw strong sales growth in june and july, and they are off to a very solid start for the current month. caroline: it is interesting to complete the juxtapose that with what walmart's cfo was saying yesterday. ask, the comps were not strong in july because he fears the stimulus dollars were likely to have been spent already. he says consumers are still spending money, but not at the pace they were in the middle of the quarter. it speaks to a slightly different shopper, a slightly different purchaser that goes to target vs. the likes of walmart. but it's perhaps --

joe: it is appropriate now. caroline: they had the right merchandise at the right time. and across seem to be winning. joe: joining us now with more insight into target is bloomberg opinion columnist sarah halzack. let's start with this basic question, to what extent can we ascribe this different trajectory in sales between target and walmart to who is the perceived demographic base, or the social economic base of their shoppers? sarah: i certainly think that is part of it, that target courts a more affluent customer who may not have felt the effects of recession, or may not have been putting their stimulus checks to work right away. i think the other factor you have to consider is walmart does a bigger share of its business from groceries. target liens more heavily on categories like home and apparel.

and a lot of home and apparel stores were closed, deemed non-essential retailers. if you wanted those goods, target was a good destination to get them. i am curious about this trend we saw where people were trying to limit their exposure to the outside world because of covid-19. so they were sort of looking for retailers where they can go and get everything needed without having to make multiple stops at a variety of locations. sarah: that was definitely a pattern we saw among a number of retailers in the quarter, but particularly pronounced in traffic -- in target. traffic was up about 4% but basket size was up about 18%. so when people were going to target, they were really stocking up. that is a sign of a phenomenon of people wanting to reduce their trips to stores to protect their health, and retailers that can be one-stop shops like a target or walmart are going to benefit from that behavior. caroline: you have a great piece

out today talking about how it is no accident. target had itself in the right place to be able to basically make a silver lining amid this ongoing global cloud that is the pandemic. what do they have in place that has served them well? they have done facelifts to some sugar -- stores, which certainly made people feel safer. sarah: the most important thing was drive up and pick up. these are formats of e-commerce they have been investing in for years. suddenly they were in hot demand. nobody wanted to set foot in a store, but if you needed something urgently and did not want to wait for two day shipping. inget saw a 700% increase drive up sales in the quarter. if they did not already have the infrastructure in place refilling those orders in terms theyw you allocate -- would not have been able to meet that customer demand. so target said 10 million people

shopped online with target for the first time in the first half of the year. if they could hang onto even a portion of those customers, that serves them really well going forward. joe: i want to go back to something you said about the fact that for many of these categories of retail, their smaller competitors like a typical clothing store, they might not still be open in some places. when we think of the lasting impacts of this crisis, will this have created a sort of permanent leg up, where the bigger guys who have groceries and pharmacies and basically were allowed to stay open throughout the entire crisis, really have gained a further advantage over smaller retailers were probablyo already having a harder time competing in the first place? sarah: yes. i think it will just enforce that dynamic. so many clothing retailers are going to go out of business because of this time period. i think that will put the health of a lot of malls in danger.

these big-box stores that are anchored in a strip center, where you can get all your purchases in one place, and when they tend to win on price because they can flex the most muscle, they will continue to be extremely attractive places to shop and will see a gain of market share. romaine: a lot of changes coming to the retail space. interesting to see how this plays out. we hope to have you back to explain it all to us. caroline: we have a statement coming out. airbnb has confidentially submitted a draft ipo registration to the sec. we expected this would be coming. we knew airbnb was still looking at the second half of the year to come out. we have seen a bit of an improvement over the last month or so. still amazing that the business is still looking to go public post covid-19. romaine: what is interesting is there has been anecdotal metrics that they have been doing well

because a lot of folks are looking for alternatives for vacations that would have normally taken them to hotels and things like that. just renting a house for your own family has been the way to go. joe: one of these companies immediately seen as in trouble, and as things developed quickly, as many other things, a quick change in perception. now could be a relative winner. coming up, a sun belt turnaround improving economic data in the southern states could be a boost for the u.s. overall. we will dig into the details next. this is bloomberg. ♪ this is bloomberg. ♪

joe: today in new york city, the city says positive covid-19 test rate fell to the lowest since the pandemic began in march. romaine: florida and other

states in the so-called sun belt in the u.s. are also showing signs the outbreak is easing. i know that while you were in your cattle ranch in texas you are looking at trends in restaurants. but today i heard you are looking at what is going on in arizona. joe: you can see it all over the place. internationally, even with the virus surge, we continued to see people eating out more. we saw a little bit of a dip, the white line. but as the virus has decreased in arizona, people are once again going straight out to the restaurants. it has not slowed down that much. areline: for more, we joined by connor, who wrote about this in his column this week. your perspective on the resilience that we see in some of the harder hit states and the desire to keep the wheels of the economy greased. romaine: connor?

caroline: i think we have a technical issue. we will go back to him in a moment. romaine: joe, maybe you can chime in here. he had wrote a great piece about this on bloomberg opinion where he looked at the trendlines in these sun belt states. i was kind of surprised at his findings. joe: it really is striking, because we talk about these two waves with the virus. there was the spring wave which was really hard in the northeast, then there was a more summer wave in the sun belt. what the second wave did not have the same economic impact first did. there was a slow down but not a crushing, depression-like decrease in economic activity like we saw in the spring. caroline: does that therefore speak to how governments are going to react to a so-called second wave we might get in the fall? something new york state and new jersey are bracing for.

i think now we can go to conor. there has been resilience in the sun belt states in terms of the economy. what does that potentially read in if we get a second wave in the northeast? will we see such an impact on the economy, for will we see governors and mayors try to keep the economy open more? conor: the difference between the south and northeast as we try to reopen pretty aggressively down here in may and june. so you saw in the opentable dining data that people are going back to restaurants, which led to a second wave. ofwe saw a second wave things closing and people wearing masks. returnhave seen dining to almost the peaks from may and june. it will be a good test if this approach will get us to a better place, or we will repeat what we had to do this summer. joe: the really big question for the economy overall is we have

this positive impulse emerging from more reopening and the general positive trends we are seeing in the virus, and we have this negative impulse is that unemployment insurance has not been renewed and is not clear if any stimulus we are going to get. i guess what i'm wondering is, which one wins out? do we backslide, or does the positive impulse from reopening and virus suppression allow us to continue to grow? conor: it will probably depend on what part of the economy you are talking about. i am getting some deja vu of 12=., 20 we have the same dynamic this time around. dining and traveling will be increasing, but we will probably see state and local layoffs, if not for congress stepping in. my guess is we will probably get slow growth. but growth not as robust as we

could have gotten with a more robust fiscal response. joe: i am curious in your perception when it comes to the activity in the sun belt states, there seems to be a different attitude towards the virus overall. extremely cautious here in the northeast and even here with incredible low percentage testing positive rates pretty very cautious about reopening dining and bars. a more liberal attitude in texas and georgia, arizona towards opening things. from an economic perspective, do we have a sense of which is the better approach? the super cautious or to let people make their own reasoned choices? conor: it seems like economic leak we have all been in the same place. maybe in the south we sort of got more aggressive and then pulled back and now we are moving forward again. our virus positivity rate in georgia is still 8% to 10% versus less than 1% in new york. on a public health level we are doing a lot worse down here. but economically, the verdict

remains to be seen. but to the extent that things ever get normal here, we are going to be more aggressive about forgetting about the virus in getting back to our lives then you will in the northeast. caroline: is it enough to have the service sector back up and running, but how is the rest of the world open to business in the south? have people been continuing to go into offices? that is what we now need to speak to here in the northeast as well. conor: right. i think the office culture is more nationalized. that is one area where local decisions did not matter as much. google office will be close. it is more about consumers and their willingness to go out and consume and take risks, basically. romaine: always has a lot of great columns about the state of the economy and economic trends we should be watching. coming up, we are going to continue to talk about this and

rotor market implications. we were hitting all-time highs yesterday. even though we pulled back today. folks are still bullish. we are going to talk to john stollzfus about his stance on the latest concerned about the market direction. that is next. this is bloomberg. ♪ is bloomberg. ♪

caroline: in a year marked by disruptions caused by a global pandemic and an election around the corner, markets continue to reach ever new heights. even if they pulled back a little bit today. joe: it is pretty striking. today aside, we have had this extraordinary rally. one of the things i thought was pretty fun it was yesterday bank of america came out with their monthly fund manager survey. and suddenly, people were getting bullish and suddenly they are not saying this is a bear market rally. it is funny what hitting all-time highs will do to sentiment. maybe it is time to buy stocks. you can see the data, clearly a very big increase in optimism as the market has powered higher. romaine: a lot of this he talked

about the general fear of missing out. a lot of people are going to take that fomo and chase the trends in momentum. but some folks remain structurally bullish. let's welcome oppenheimer chief executive strategist john stollzfus to get his case on the direction of the market and less the direction in more just your general sentiment of where we stand right now. this all-time high we hit yesterday, is that a signal to you that there is some momentum here to continue paring this market? john: i think there is, romaine. i think when we look at it, the market has a goal that is beyond the near term. it reminds me a lot of 2009, after we got beyond the bottom on march 9. through that whole year, there were many people who thought the fed was pushing on a string, they thought the rallies would fail. 2009n fact by the fall of

as i recall, there were people looking for a death crawl in the s&p, and a hindenburg affect. we have not had that yet, but i have to say that things are looking better instead of worse. caroline: it is really interesting, talking of looking better. it is a sign of the times that a company built out of the ashes of 2008 that came from that first recession was airbnb. publicly announced its confidential filing to go public, which -- nevertheless we are given information airbnb will be looking to come to the public market. your perspective as to whether it will remain the right time to come to the public market for the next few months? will we continue with these lofty valuations? john: i think the lofty valuations are really the result of interest rates being where they are. and thelly with the fed

magnanimous policy to not just accommodate them. significant rescue efforts that we have seen by both congress, the administration. there's a lot of liquidity out there. but fundamentally what is happening is you are seeing the difference between winners and losers. whether it is big-box retailers, home depot or target. of are seeing the potential a differentiation between winners and losers, companies mix the digital sales with brick-and-mortar are doing really well. people want to shop, they want to get after normal. but the risk of covid has not left and that is what is holding us back. joe: you mentioned target and the fed, and obviously as target

showed, wall street and many economists underestimated the pure strength of the consumer. that is something that powered us higher. looking at the fed today, maybe they did not quite deliver in the minutes. granted it is just the minutes, but perhaps they are not quite as ready to clarify a forward guidance strategy as investors had anticipated. riskcurious if there is a that the news is really baked in. the economy has already surpassed economist's expectations, and the fed has already done a lot and is maybe not quite ready to do as much as markets had hoped. is there a risk that all the good news is basically baked in here? john: i would say there is always a risk that the news is already baked in, and this thing could rollover. that said, i do not think that is the case. if anything, the fed is essentially acknowledging the fact that there are risks out there.

the fed has essentially become more communicative of length. initially as we know, jerome powell is not the greatest communicator, but he has gotten a heck of a lot better in the last six months, perhaps by necessity. i think what they are trying to do is guide down expectations in investors not letting or main street get ahead of itself. i think the big thing is to recognize the covid remains for now. it is like whack-a-mole. you get it down in one place and it pops up in another place, these resurgence is that occur. and of course a risk of a second wave in the fall as well. but the idea is people are beginning to have a sense, as the market has had for quite a while, that we indeed will get by, not just get by, but get through this as a result of advanced technology, the ability

of companies across the s&p as well as in development and health care, to deal with the situation. romaine: politics are front and dncer this week with the this weekend the rnc next week, and they will be front and center until the november 3 election. is there really election risk out there for investors? we seem to put a lot of importance on who was in office, but data over time has shown it doesn't really matter. investors seem to find a way to get things higher. john: i agree with you on that very much. historically, i think the democrats have actually been better than the republicans over time when they are in the white house for the markets. it does not happen every time, but i think in the case of donald trump, it showed we could go from a democratic administration to a republican administration and do well.

and i think of that reverses in the next election, just as you said, what it is is that essentially the underlying asset which is a itself underneath stocks, business is like water. it finds the point of least resistance to work around as things develop. you just have to look back to the 1950's and 1960's. a lot of democratic administrations and those periods. great time for stocks, taxes were a lot higher. it is a matter of adapting. bumps ina lot of speed the market could get concerned. but it looks like this market continues to be capable. capable predecessor, be of climbing a wall of lori. -- of worry. caroline: i like that analogy. joe: bloomberg technology is up next. romaine: have a great evening, everyone. this is bloomberg. ♪ his is bloomberg. ♪

emily: welcome to "bloomberg technology." stocks are raising their gains today. comments from the fed that the pandemic will weigh heavily on growth in the second half of the year, dampening investor optimism. but apple defying the odds. the company soaring past $2 trillion, a record for a u.s. company. minutes a