the big events are back. xfinity is your home for the return of live sports. emily: welcome to "bloomberg technology." i'm taylor riggs in for emily chang. u.s. stocks sinking deep in the red today as investors got a long-awaited pullback. mostasdaq tumbled by the since march in the s&p 500 had the worst day since june. and while, the vix briefly jumped over 35. also the highest since june. with more on today's action, let's get straight to it with abigail doolittle.

aigail, it felt like broad-based selloff within the s&p 500 all the way down to tech stocks. abigail: it was a broad selloff. a far more concentrated as you were just mentioning with the mega cap tech stocks. there was weakness for tech. the dow had been higher. that tells you the degree, the dow closing sharply as well. the closing pressure came for tech stocks. the worst day since march. the faang index down. tesla down 9%. the stocks and chips also down 5.7%. and you were mentioning that this was the correction folks were looking for. tesla up out of the march low.

plus the stocks split for tesla and apple. people wondering when the hangover would come. today seems to be the case. perhaps a little bit too far, too fast. we also have bearish action. broadcom put up a beat, but it was narrow. beating sales by less than 1%. one of the tech fires that was really not that great. and doc you sign after a really bearish day. this stock up 227% on the year, 4.6% bearish. another case of too far, too fast. investors all of a sudden taking chips off the table. taylor: tesla confirming the bear market territory. we will push that story forward and we will get more on tesla later. you pointed out that within the

s&p 500 tech sector, all 71 components were down and they were down a lot. what were you noticing? abigail: the degree of the selling action. the baby being thrown out with the bathwater, there is no reprieve. every single tech stock is off. it points to the degree of rally for tech stocks. up 35% contrast. this is where all the money is going. today, not so much. the worst day since march. nvidia, one of this year's darlings up 120% on the year. that stock down sharply. wall street analysts praising it. emily and i have been talking about this chart this week. .his tells the story if apple is so overextended, the

frosty buy, the fundamentals of the company are great but shown by the fact that apple is 55% above the 200 day moving average. it is usually overextended. oversi plunging down overbought territory. there is an uptrend still holding but it could be a shot across the bow that more volatility is ahead. taylor: push the story to tomorrow. a job day is quickly approaching at 8:30 a.m. eastern after the initial high-frequency jobs data that we got this morning. the environment paints a weaker picture and it was the reopening stocks ending up in positive territory today. abigail: i'm glad you are bringing that up because it is interesting in terms of today's selloff. it feels like it was risk off-risk off. look at the winners we had on

the day. carnival, norwegian cruise line. the recovery and reopening stocks. people shopping. if it was really a bad macroeconomic picture, the stocks would've been plunging along with tech stocks. and we are seeing again here. bonds, haven bonds. today, the 10 year yield is barely budging at the end of the day. bonds, it was mild buying. if this was a fearful risk off selloff day, you would've seen a massive rally for bonds. that was not the case. we have to see what comes tomorrow with that. the fact that bonds and the yen are basically flat on the day. amorrow, there could be little bit of a bright spot or some sort of relief after today's big tech wreck. you're always invited back when you mention the bond market.

market pullback today by investors. >> valuations in the technology landscape, we have extraordinary levels. it is not a surprise. latecomers and the craziness in the 2020 summer of love for investors. >> it is not surprising we are getting a bit of a pullback. >> this is the time to start taking a little bit of it off. taylor: joining me is an equity derivative strategist. amy, great to have you on a day like this. underneath the headlines, what

are you noticing about today's action as it relates to derivatives and options? what is it telling you about today? amy: it has been really interesting. and i think the first thing i would say is that we need to see a little bit more because clearly, this was all about tech. we have tested this before. the market options the last few weeks have been extremely nervous, and nervous in particular in tech. stock price in tech continues to go up and their volatility goes up. it is not a normal relationship. it is normally inverse. the fact that we have upended 20 years to 30 years of that relationship at are starting to get that, it made me nervous. we spoke about it with your guys this morning about how when people are continuing to be more

uncertain as tech goes up, this is usually something behind that. a lot of those relationships broke and it will be interesting to see if that continues to break. what is the relationship about participating in this rally via the call option? if i am on the other side of it and selling that option, i'm hedging the trade and buying the underlying stock so that when this starts to unwind, some of that hedging has exacerbated these moves. can you walk us through the hedging underneath that you are noticing in this market? it is a great question. we refer to it by different names. we call it the gamma squeeze, the hammer, what have you. but it is a simple concept at the end of the day. buy one call option, there is somebody on the other side that has told you that call option.

that dealer needs to do a delta hedge or refer to the dynamic hedge. what they are doing is buying stock underlying to do that. the issue is that when you get into the relationship of spot and volatility being positively correlated instead of negatively correlated, that dealer is --ting hit on to elements both elements, the volatility side and stock side. a point i would like to make about that, in the past few weeks, we have seen an extremely large buyer of tech calls for us in the market. that has exacerbated a lot of the single stock moves. we have seen it in salesforce, ,mazon, and today in the market we saw a bullish trade and options of facebook. -- in options of facebook.

this would be one of the first days were the holder of those bullish options really got hit on the position. and secondarily, the choice made there was to reload. we will see what those investors are doing because there is a reactivity that has to happen from the dealer side. what is the theory out there that if you seek racks and some of the big tech names, it has the opportunity to pull down the rest of the market and perhaps maybe we saw pockets of that today? or can the rest of the market hang in there despite some big tech pullback? it -- amy:u know, you know, it becomes a waiting game. 50%, the queue is 50%. it takes eight names to bring down the whole index.

i think is very interesting and i think is part of what is happening, the recent vaccine headlines have full -- hold forward the timeline. we had the view that when the vaccine became really real, you would finally see a break in the momentum trade, the mega cap tech trade against value. by the vaccines are saying november 1, prior to the u.s. election, we might actually get something that's accessible to a portion of the population. it has sort of fast forwarded the recovery. the commentator earlier was saying that a lot of cyclical recovery has been done well. i think the story is really all about tech and not necessary -- necessarily the full market. onlyr: push this to us not

with jobs day but the election. a lot has been written about option plays within the vix where the october contract that plays to the volatility is much more expensive than the first and third month. are you seeing heightened volatility in that october contract that encapsulates the november election much higher than anyone else? any other month? hump is definitely there in the markets. november is pricey as well. and obviously today, things came up with it. what i think is interesting about that is when i actually talk to investors and we speak about hedging their portfolios, a lot of them are actually looking at longer data. looking attually these more in december through

january. and part of what a lot of people have pointed out is that this election is going to be tricky. it's not one where people believe we will have an answer on november 3. there is a lot of mechanics. without theoff premium to see how that plays out. i don't know if people believe it is something. taylor: thank you for those wu silverman. and tech stocks taking a beating this week, is that part of a selloff story? we will discuss it next. this is bloomberg.

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inlor: tesla stopping short his tracks. the electric automakers saw shares fall for three straight days. they are down nearly 20% from monday. are investors questioning the company's rapid growth? is it due to the recent stock offerings? is it part of a broader tech selloff? we are joined by a senior investment analyst. it david, great to have you. walk me through this. tesla in bear market correction territory. david: absolutely. three things are happening with tesla. number one, a couple of days ago, they issued some equity. think it was a good decision. the stock was a little higher

today. they are using that capital to invest in their factories. i think it was a good reason for doing that. what investors have taken it the wrong way. gifford, theyy trimmed their exposure in the tesla position from 6% to 4% or 5%. that is just wealth management. james anderson is one of the pms and is still very bullish on the company. i think it's a combination of that, and people trimming some of their exposure and taking some profits. i think the story looks fundamentally good. taylor: you nailed it. those errors, how to not lose money as part of risk management control. talk to me about the fundamentals that are still intact for you. tesla, you see a lot of value investors saying that

tesla is overvalued. in our opinion, we think the story can grow 50% per year for the next 10 years. inhave a huge opportunity the vehicle market. we think they can sell 10 million to 15 million vehicles. a robotic vehicle would be a self driving vehicle. that will push the valuation of those vehicles higher. ad on the other side, we have huge opportunity as big as the vehicle business. on top of that, you have insurance and older opportunities. in those used applications. you can look 10 years from now and tesla could be growing at a double-digit rate. it is a great opportunity as investors will buy the pullback. taylor: how much is the stock

dependent on a successful battery day? david: it has been going out because there is a little bit of analysts wanting to know a bit more about how powerful those batteries are. especially because they are going to be building more trucks, semi-trucks. in those batteries are going to need more power. as an investor, you need to know what is in the chemistry. there is a little bit to that. and not too much. look at wall street, 75% of analysts are bearish on the stock. don't think it is priced that high. if you have a three year to five your target, if you hold it for that time, i think you will do ok. taylor: david, talk to me more broadly outside of tesla. the theme of a bit of rotation. out of momentum, the timeline

stocks. do you see that trend starting? david: growth stocks have done well for a reason. they are making us more effective, more efficient. i like to say that apple, facebook, amazon, and those guys are becoming consumer staples stocks because we are consuming their technology at a higher rate. that is why they have done so well. i think the pullback is an opportunity to buy those names. the names are not being disrupted. they are ok and i think it is healthy to have those pullbacks. tohink it is an opportunity buy those names that are high quality. david yepez, senior analyst. thank you as always. coming up, an exclusive conversation with bill ackman. how his talk to take airbnb

public happened. and we will hear from nick clegg, facebook vice president of global affairs and commit occasions about the company's new political ad policy ahead of the crucial november election. this after ceo mark zuckerberg talked to cbs this morning. this is bloomberg. what is sensitive is having us be the ultimate deciders of what is right and wrong at a and false. there are a number of cases where we can rely on other authorities. ♪

the u.s. justice department planning to file an antitrust lawsuit against google as soon as this month according to a new york times report. this after attorney general william barr turned down a request by career lawyers that said they need more time to build the case. to garrett who has been covering google for us. how soon do we think the

timeline could be? sure if it isot sooner, but we are seeing, at least according to this report, a little more clarity. known --now, we have there have been various reports about this split in the justice department. career lawyers, people working there for years are saying that we need more time to really get all our ducks in a row before we launch our case against google. barr appointed by president trump says you guys have done enough work and we launch the case now. it raises the question of how mucks -- much politics plays into this. politics plays into all these decisions, but you can be assured that if a case does come before the presidential election, google will be arguing that this case is politically motivated, a witchhunt, and not ready to go.

trumpabout president trying to score some points against big bad tech before the election. taylor: through your research and analysis, what does more time by them if anything? gerrit: i think more time to really sift through the documents that they have requested from google, google's partners and competitors. focusing on cases advertising technology which is an immensely complicated space. even people that work for years often have trouble describing it in plain & turns. -- plain and simple terms. thinkare areas they google is being anticompetitive. and now they have to go through millions of documents to find the emails when a merger discussion with happening. can a google executive slip up and say something to prove the company was doing something anti-competitive?

feel as ifke they they haven't had enough time to do that. taylor: what is the end result in your opinion? what will it look like and what will it be? gerrit: i don't know. i think it's possible google could be forced to sell some of their advertising technology business. it would really shakeup that market. i think it's possible google could just pay a fine if this case will be rushed. paying fines in the european union. but we don't know yet. it is still very much up in the air. taylor: thank you as always. thank you for covering google and that story for us. stay with us. the chip industry could see some major changes. all of that next. and looking at a pretty bad day within the equity markets. a pretty big selloff. tech leading the way. you have the likes of tesla, apple, amazon leaning into the

downside as we wrap up a volatile thursday. stay with us. much more next. this is bloomberg. ♪

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taylor: this is "bloomberg technology." the chinese government reportedly planning to policies to support its domestic semiconductor industry. one is sparking a million-dollar route among ships stocks in the u.s., but a surgeon semi conductors in companies over in china. surge in semi conductor companies in china. scott joins us. leading up to this, it is that

ever approaching september 15 deadline which bytedance has to sell the u.s. business of tiktok to the u.s. how do you see that playing out? scott: i think, taylor, but the announcement by the chinese -- with the announcement by the chinese that they are going to assert their rights to regulate that technology, it is going to be hard for a deal that is fully consummate by the 15th. will the trump administration be willing to extend their deadline, or are they going to go forward? if they do, we are going to play cat and mouse with users of tiktok and the u.s. government. taylor: he is china doing the right thing by flexing their powers? scott: i think the chinese have been amazingly restrained in responding to the u.s. actions in all these tech spaces. i think what they are trying to trump stormhis

pass them through the fall and see what awaits in january. january is a long time away, so they could do nothing. this is just a way to remind ifks that they exist, but they were to retaliate and go toe to toe with the trump administration, there would be tougher things the chinese would roll out. taylor: talk about how that view folds into the world of wechat. know chat users asked a judge announced -- wechat users asked a judge to announce a -- what would flex this muscle and perhaps lose out on business in the u.s.? scott: good luck with them getting the evidence in court on national security issues.

but they do have some possibilities they are going to be able to slightly slow this down a little. i think at the end of the day, national security justifications, whether purposely defended or not, the real big question on tencent will become, will be trump administration just block we chat in the united states, or will they try to restrict u.s. ininess with wechat china, including airlines and hotels that use wechat to do business in china? it would have big ramifications. either way, we will be looking at this down the road to see how the chinese respond. they are not going to sit passively forever. taylor: today, at least within the chip and memory chip sector, taking out an active approach, doubling down on investments for their own chipmakers to further

isolate u.s. chipmakers over there. they are taking a very active approach in that sector. mid-1990's, the china has wanted to build a semi conductor industry and has thrown hundreds of billions of lotars at it, established a of cooperative relationships with american, european, japanese, korean chip companies, and they have caught up some, but they are still really far behind. there is growing concern that they want to develop that independence. obviously they need to invest fast. will they be able to develop that kind of independence? it is unlikely. therefore, it is a hedge against further decoupling, but china's tech sector is only going to grow in a globalized economy, and the chinese will have to figure out how to repair the relationship with washington and other countries. taylor: i am curious if you see

the tech tensions creating a bifurcated tech cold war, where you have eastern and western tech can they do not coexist together. that is one possible outcome. that would require the u.s. to act in a way that brings other countries along with it, not only to have the same worries about china, but think that is the best solution for them. if you just look at memory in semi conductors, the u.s. is not just the only player, not just micron. ,ou have samsung, sk hynix japanese and european producers as well. if the u.s. wanted to bifurcate the world in semi conductors and memory, they would have to bring along these others. it is not looking like they want the final outcome to be a five created -- to be a bifurcated world. they would like to be able to

stew for peace and get adjustments on how they are treated, not just divide the world in half. taylor: pre-perspective. scott kennedy, thank you. bill ackman confirming he had a very preliminary discussion with airbnb. he says the home rental site has not completely ruled out stacked, though it prefers a traditional ipo. he spoke exclusively with bloomberg's vonnie quinn and discussed where else he sees opportunity. take a listen. >> we have had a very nice dialogue. we got to know number of senior members of the team. they have been on a path to go public. we talked with them about our structure. they have not decided against going this back route, but at this point i think their first choice is to do an ipo. putting aside airbnb, speaking generally, what we offer as a

company is the ability to inject $5 billion of cash, take them public. if we started today, if we opened a due diligence and got access to a data room and got the opportunity to spend time with management by june, in three to four weeks, defending on the nature of business, we nature- depending on the of business, we could negotiate a deal, and we could give them certainty on capital, and they could become a public company after that initial 30 day time. but we give them certainty in those first 30 days. a company like airbnb is filed confidentially. at some point, they will file their prospectus. possibly before the new administration comes in, it is really that last day of the roadshow that they know what price they will get and whether that is a certain transaction and how much capital they have raised. it is a different approach. you are checking behind door

number three as opposed to the bird in hand, so to speak. a stage where to we had access to the information and had the ability to do due diligence on the business or have any opportunity to discuss valuation with airbnb. are true that we have had some discussions, but they were very preliminary. we did not do it deep enough dive to determine whether this is a business we would want to own, and at what price we would want to own and asked. it -- own it at. we do not know enough about the economics of the business. >> let me ask you why you would be so interested if there are problems in a volatile environment. this criticism is leveled against airbnb. they had to raise $2 billion at

the beginning of the pandemic. brian chesky was called to step down. why are you so interested in this business if it is such a volatile business? you know a lot about tourism and travels and hotels, but what would be your confidence in this business? >> we have not done the work on airbnb. we do not have access to inside information. our favorite businesses in the world are at annuity-like businesses that can grow at a high rate over a long period of durability. -- over a long period of time and durability. it is as cash flow, business that meets our criteria. if not, it is not a business that meets our criteria. the companies we are looking for our durable growth companies. we will accept a degree of volatility. we were buying hilton stocks in

the depths of the market in march, even though the hotel industry is really on its knees because we've got a long-term view on the industry, and weight have -- we sold a share of hilton that we acquired. businesses that have a royalty on future growth and travel, but there are other kinds of businesses we are looking at in the fintech space as well as some consumer b2b companies,e a full spectrum of different businesses. what --g of value and something of value to a counterparty. taylor: coming, facebook making new calls on its political ad policy exactly two months before election day. we will hear about that

development from facebook's vice president of global affairs and communications, next. ♪

u.s. presidential election is upon us exactly two months from today, and today facebook revealed new policies to guard against voter suppression and misleading posts. that includes a blocking of all new campaign ads one week before election day. mark zuckerberg spoke to cbs this morning about some of the new updates in an effort to prevent election night uncertainty. >> if someone tries to prematurely declaring victory in a presidential election, before there is a consensus on who won,

we are going to add context and a label to that post saying there are no official results on the selection, directing people to a voting information center, where we will have a list of all the official results. taylor: emily chang spoke with nick clegg, facebook's vice president of global affairs and earlier.tions, he outlined the new strategy. unprecedented step, but this is an unprecedented election taking place in an extraordinary time. unprecedented times require unprecedented measures. it is the very tail end of the campaign. if ads are run which are particularly false or misleading or polarizing, you don't have for opposing campaigns to scrutinize or challenge or contest what is said in the ad.

we are trying to create a guard rail in the final week of the campaign so that any as that are run -- and the targeting arrangements could be adjusted by the campaigns -- but they can't run new ads. if they were in the final minutes, hours, or days of the campaign, it simply would not be the time for them to be properly scrutinized. that is why we have put in this measure. it is important for your viewers to appreciate that all the ads that run on facebook now are launched in and add language, legably the most -- an ad which, probably the most transparent of any kind anywhere -- language, probably one of them is spirit of any kind anywhere, to see who is directing the messages -- the most transparent of any kind anywhere, to see who is directing the messages.

that said, mark zuckerberg made no indication rules on content of political ads is changing. what about critics who say this meal, that facebook allows lies to persist? nick: no major operation in silicon valley seeks to try and adjudicate all the exaggerations, half-truths, and characterizations that politicians say about each other, but political speech is with onellowed candidate exaggerating their virtues, another exaggerating the vices of the opponent. there is a reason why no major player in silicon valley is trying to enter into that and somehow be the arbiter of complete accuracy and truth. standardsmmunity against violence, hate, and all things on our platform,

, fore act to remove posts instance, from the president in recent weeks and months. but on the whole, we believe politicians in an open democracy should be able to say what they want to voters, and they should be able to say what they want about each other within those guardrails. one of the significant announcements we have made today, which is actually in the , on a post posted by president trump, is that we are going to apply much more aggressive, visible labels to posts, whether there is any question about the casting of doubt on the legitimacy and efficacy of voting methods. we are researching it very clearly for our users through these labels -- asserting it very quickly for our users through these labels. emily: how concerned are you

about election night itself, that results could be contested? how much of a risk does facebook face there? nick: i think it is a very real more partly because many people are likely in a pandemic to vote by mail, and mail-in ballots tend to be counted later than in person votes. there is likely to be a discrepancy between the immediate picture that emerges on election day and the hours afterward, and what happens in the days and weeks following it. for that reason, we will be starting very soon using our voting information center very actively, in people's feeds, on instagramming facebook, where we are constantly repeating to people that this time they should not expect an immediate result, and people should be attuned and accustomed to the idea that it should take quite longer this time and could be contentious. crucially, where candidates

declare victory before the results of the elections are officially certified, we will label that to make sure users of know that those declarations are premature. meanwhile, markets selling out today, especially tech, facebook down 4%. what is your take on how big of a concern it is? nick: i am not a great market commentator. i don't know if it would help remotely if i started passing comments on the ups and downs of the markets. we just concentrate, particularly in this election season, to make sure our viewers continue to derive benefit, joy, and utility from our apps. they do so in huge and growing numbers around the world. we are also playing a role in safeguarding the election integrity in the u.s. and around the world. emily: joy may be hard-to-find in his current environment. we have a pandemic at a frosting

a u.s.-china relations. how are these events impacting your position on regulation, specifically tech regulation? nick: we at facebook feel there needs to be new rules for the internet. old,ook is only 15 years some new technology which has erupted in recent years, and like all new technological evolutions or revolutions, they need to be framed within rules which are adopted through democratic debate by lawmakers accountable to the -- in areas like privacy and what kind of speech is at is not acceptable, and crucially on some of the things we just discussed. what role should social media play in elections? areas where wee believe, in the long run, it should not be private companies making those decisions.

that is not, in the long run, right. the rules need to be made by the rule makers. there are people democratically elected by people in this country and others around the world. taylor: that was nick clay with facebook -- nick clegg with facebook. coming up, we are going to look at that big tex selloff, that was since june -- the worst since june. ♪

theor: equities tumbling by most in almost three months as they were taken away from the highflying tech stocks. now, the senior vice president of strategy at global x etf. to me about the unwind we -- tell me about the online we have seen in big tex today. -- unwind we have seen in big tech today. can you hear me?

we will get back to him. try to reestablish the line as we -- let's try to reestablish the line as we talked to him. a really rough day in the equity markets today, big tech having some of its worst -- one of its worst days since june. up a littleing better than the s&p. ruffleap stocks that 2000, the big underperformer as well, certainly not selling off as quickly as we can, so you are getting a bigger selloff today. the nasdaq the worst performer, which was off about 5%. you did see a bit of elevation points.ix, up seven earlier in the day, the vix was up about nine points. back on theave jay

phone. can you hear me? >> yes. taylor: perfect timing. talk to me about the selloff today and those highflying tech stocks that saw some pressure. >> frankly, i think this was a healthy selloff. we have seen the nasdaq up over 75% since stay-at-home orders were implemented. drivens been a very market. the selloff like the one today will really shake out. are the people long-term investors who want to stick with this market, or are they popping on a fast-moving train? i think it is healthy overall. taylor: i am curious of some of the structural changes you have seen in tech, as the consumer is a more permanently changed consumer. jay: that is correct. it is hard for people to change habits. people get used to going to the

grocery market and picking out their food, going to the office and commuting every day. now people are getting used to a different lifestyle. they are used to ordering things online, logging in remotely to their computers, and that what is going to be hard to go back -- now it is going to be hard to go back. we are seeing it in the cloud computing company with 190% earnings surprise. it is truly fantastic results as we see the stay-at-home economy coming out to play. taylor: we only have 20 seconds left. i am curious if you see a healthy pullback, meaning there are more buying opportunities on the horizon. no, we see it as a buying opportunity. going back to cloud computing companies, we think it is going to be a huge cycle of profitability going forward. they are going to have a lot of pricing power. taylor: thank you as always.

we always need more time. global x etf.th stay tuned. daybreak: australia is next. ♪ [ sigh ] not gonna happen.

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a kohler walk-in bath provides independence with peace of mind. call... for one thousand dollas off your walk-in bath plus a free kohler bidet seat with purchase. good morning, and welcome to "daybreak: australia." we are counting down to asia's major market opens. stumbles, tech rally handed u.s. equities their biggest fall in three months. the s&p 500 seeing its biggest decline since early june. tesla a big loser with ar