afghan territory being used to target any other country, including the united states. the taliban spokesperson also says the insurgent group is not seeking revenge, saying everyone is forgiven. nato's secretary-general is blaming a failure of afghan leadership for the swift collapse of the country's western-backed armed forces. he says around 800 civilian personnel from nato countries have remained behind in afghanistan in part to keep kabul's airport running safely. >> i am deeply saddened by what i see unfolding in afghanistan. nato's focus right now is to ensure the safe departure of personnel from allied and partner countries, and of the afghans who have helped us. mark: he says parts of the

afghan army fought bravely but "ultimately the afghan political leadership failed to stand up to the taliban." the u.s. government is preparing to offer coronavirus booster shots as soon as next month. bided administration are expected to recommend shots be taken eight months after people received their second vaccine dose. the u.s. is facing a renewed wave of infections fueled by the delta variant. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ matt: it is 7:00 in new york, --

1:00 p.m. in new york 7:00 p.m. , in berlin, and 1:00 a.m. in hong kong. welcome to bloomberg markets. here are the top stories we are following on the bloomberg and from around the world. retail sales dropped, indicating consumers may be growing more price conscious as inflation picks up. we will discuss with anjee solanki, u.s. national retail director at colliers. and what the return to the classroom looks like, with becky pringle, president of the largest teachers union in the nation, the national education association. we will hear from our exclusive conversation from arc investment ceo kathy would on her investment to remove almost all exposure to china. we also saw michael come out with some big shorts. let's take a look at what we are doing in terms of the market. we are at or near session lows depending on which index you look at. s&p 500 down 1.25%.

small caps are falling further. if you look at the russell, you'll see much bigger losses. the 10-year yield at 1.2467. brent crude also off $.54 a barrel. the global benchmark. gold is down beaming u.s. retail sales falling in july by more than forecast with consumers shifting away from e-commerce spending toward services. with more insight is anjee solanki, national retail director at colliers. is this a trend -- we hear one month does not a trend make, but it makes sense, as lockdowns are lifted, people would get away from e-commerce and do more

stuff. anjee: we are seeing a slight change in the month over month. comparing to last year we are seeing spend transferred from buying products such as apparel, groceries, sporting goods, to services and travel. matt: what does the inflation component look like to you? how inflation averse are you was consumers right now? anjee: i would say middle-of-the-road, trying to forecast how things might change with the virus and the variants that are rising. we will see some changes in q3, q4. we are also starting to see, as biden is starting to evaluate how to provide additional benefits to consumers, i think

we will see some change coming closer to the fall and winter of this year. matt: i wonder what consumers, how consumers react to inflation? i seem to recall in econ 101, they would pull purchases, worried that prices may rise in the future. i can also understand people saying i will wait for prices to come down. how do you see consumers reacting? anjee: it depends on the purchase. if you look at high purchase items, cars, jewelry, there will be a little bit of a pause there, and evaluation of where to spend those dollars. i think people are continuing to spend on food, going out to eat. we saw an increase of that by 2% month over month. i don't see that being any different toward the end of the year. we may see an increase when it

comes to the holiday spend. we are already seeing people make some purchases for the holidays coming up in december. there are some benefits in terms of the price point being lower, or hedging bets against inflation. matt: is the fiscal cliff, the fact that we are not getting these big cash outlays from the federal government affecting the picture? anjee: right now we are uncertain about how that will impact overall retail sales. if you look at where there is dominance in sales, we see that in grocery, home goods. mass merchandisers, value-oriented discounters, those retailers will continue to do well when it comes to sales. matt: one thing the biden

administration has talked about is overhauling the food stamp benefit program, boosting that considerably. you are saying that is why we don't see a big hit to groceries, and why we see consumers shifting down to lower ticket item stores? anjee: it is related to that, but at the end of the day, groceries is the number one staple. we will need to continue going to the grocery store. we have seen in terms of foot fall, that segment of the business has seen a 90% return to in-store shopping. even though it has been essential, we continue to go, still the dominant player from the foot fall perspective. department stores seeing about an 80% return. people still have the desire and need to go out. where they are actually spending

their dollars, that is what we are monitoring and researching. matt: how regional, regionally divided is this? i was shocked to see in new york city major stores not just close but emptied out, no longer leasing the space, from h&m, the container store, etc. you see people move out all the time but new york is a specific economy, very much reliant on wall street. do you see a big divergence in the regional outlook for retail? anjee: i would say definitely the hardest hit are those dense cities where they see a tremendous amount of tourism. the other areas, suburban markets, where you have growing communities, migrpopulation, the

well. there are store closures that have occurred in these locations with a variety of reasons, whether it is from the cost, labor coming into the cities, the uncertainty, security, safety of coming into these cities, are all question marks for these retailers, so for them to close down and open up elsewhere is probably the best opportunity for them. we are seeing store openings outpace closings, so that is a positive forecast. what we are seeing now, which i find impressive from a retail --looking at retail, companies are looking at opening four stores per company within the u.s. we have seen somewhere around 22,000 sign leases year to

date. there is still momentum. matt: anjee solanki from colliers, national retail director. we will continue to cover the market for you as we get more data points. more earnings. we have a slew of retail companies lining up their reports. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. time for our stock of the hour. kroger rises to a record as berkshire hathaway's filings show the grocer was the biggest position increased last quarter for warren buffett.

dave also looks at the impact. dave: this is a stock that has actually had a pretty good year. shares up more than 40%. berkshire helping things along, for sure, but you were talking about potentially the biggest gains since 2014. 43% higher. you look back to fiscal first quarter results, earnings and sales that beat estimates, they raise their fiscal year forecast even though they anticipate declines in terms of sales at stores open more than a year. one reason they are moving up in terms of shares, they are figuring out the puzzle in terms of online selling of groceries. 16% increase in the last fiscal quarter was not that much but it showed growth, and it is just recently that kroger started to open up fulfillment centers.

it had a deal to set them up, and now this puts them in a position where they can expand their direct to consumer business. then you take a step back and look at buffett, the second largest increase in holdings. in terms of where they are now on kroger, you are talking about an 8.3% stake, almost 62 million shares. that makes them the third largest holder behind blackrock and vanguard. it certainly shows they have confidence in what kroger is doing, how it is managing the transition into online sales. the business will hold up. let's face it, grocery stores

did benefit from the pandemic because more people were eating at home. can they move forward, deal with higher costs? so far the answer is yes. that explains in large measure what is going on. matt: i cook for myself for a whole year and i enjoyed it, but i don't plan on doing that again. kroger is a $34 billion company. i didn't realize how massive berkshire hathaway has become but it has not grown as much in percentage terms this year. dave: through the first half, berkshire and kroger track each other pretty closely. since the second half began, kroger has taken off while berkshire is running in place, if you look at the class b shares. you could do the same thing with class a, but it would tell you the same thing. kroger has been on a roll in the

stock market. with berkshire buying more shares, that is definitely a plus going forward. matt: class a shares going for $434,000. class b shares are heckuva lot more affordable. dave wilson with our stock of the hour. children across the country are heading back into the classroom. we discuss the risk of the delta variant and the safety measures in place for teachers, students, and bus drivers. the president of the largest teachers union in the u.s., the national education association, becky pringle will join us. this is bloomberg. ♪ ♪

matt: this is bloomberg markets. i'm matt miller.

students and teachers across the u.s. are heading back into the classroom this fall. the return comes in the shadow of the highly contagious delta variant spread with parents facing fear and confusion. politics, diverging policy approaches and daily changes to safety guidance clouding this reopening. the country's largest teachers union with more than 3 million members, the national education association, recently announced its support for requirements that all educators receive a vaccine or submit to regular testing. president becky pringle joins us now to discuss. the first question is, do we expect the majority of schools to open up for kids to go back into buildings and learn in classrooms? becky: it's good to be with you, matt. let me just remind all of the

viewers that our educators all over the country want nothing more than to be in person with their students. most of them were in person with their students at the end of the school year. we are all looking forward to back to school in person this year. many of our schools have already opened. we have done everything we possibly can, starting in late february, really pushing for prioritizing the vaccination for educators. president biden supported that. the majority of our educators got vaccinated. then we continued that work with the passage of the american rescue plan, so we could have the resources to make our schools safe. that meant ventilation, the ability to distance, having

additional personnel to continuously clean those schools. all of that happened in the spring and summer. we have done the work to make sure all of our students are back to in person learning as they begin their studies this fall. there is no question the delta variant is throwing us a curve but we are trying to work within our belief that if you follow the science, listen to the infectious disease experts, work with parents in the community, and put in place all of the mitigation strategies, we can keep our children safe. matt: you say the majority of your educators are vaccinated. what percentage of holdouts do you have? how many anti-vaxxers do you have? do you see regional clumps of them, mostly in florida, mississippi, etc.? becky: we have 3 million members around the world. our membership is absolutely a

microcosm of this country. but i will tell you -- matt: but they are teachers, so they are smarter than the rest of the country. becky: [laughter] i would agree with that. over 90%, but not only our teachers, our bus drivers, food service professionals, all of them. 90% are vaccinated. that number was over a month ago. i fully expect it is much higher now. certainly, as the fda moves toward that final approval, we know that educators as a profession are the most highly vaccinated adults in our communities. what we are focused on now is actually using our position as trusted voices within our communities to encourage all adults to get vaccinated, and for those same adults to get the

students vaccinated, those who are 12 and up. that is the work we are doing now, partnering with the department of education to position education leaders to go out into the community and encourage more adults to get vaccinated. matt: we have schools that, for a long time, required students to get certain vaccinations -- measles, for example -- before they come back to school. why wouldn't you have the same requirements for kids to have the covid vaccine? becky: we have had that requirement for a long time. nea believes in a school population, the more people that are vaccinated, the safer the school is. that has long been our position. of course, covid is new to us, we don't know everything that we need to know, and now we have yet another variant, talk about others.

there is still so much to learn. i taught middle level learners for over 30 years the wonders of science, so i will continue to say although the science. it is evolving, we are getting more information. as we get more information, we are making better decisions -- at least we should be making better decisions -- to keep our students safe. we know that this is a new virus, vaccine, all of that is true, and as we get more information, we will apply that information to not only keep our students safe now, but to make sure as they continue their learning in person, together, that we are making the kinds of systemic changes we need to make so that all of our students have access and opportunity. matt: i appreciate your service, ms. pringle. i remember all of my science

teachers, frankly, all of my teachers. incredible individuals. i was lucky in my schooling. let me ask you about masking. i am sure for the most part kids will be required to wear masks. how are they dealing with it? becky: our students are so remarkably resilient. i had the opportunity to visit with them -- most of our schools were back to in person learning in the spring. i had the opportunity to visit classrooms across the country. first of all, i am so proud of our educators. what they have done during this pandemic is above and beyond the call of duty. as i looked into the eyes of our students, i could see that sparkle that was always there. i could not see the smiles because of course they had their mask on, but i could see it through their eyes. they were so eager to be back together with their educators,

happy to be learning. i got a chance to see them while they were alerting virtually because my grandson moved in with me during the pandemic, so i had a third grade classroom in my basement. i saw students tapping into that curiosity. so we will continue to do that. but the first thing we need to do is make sure they are safe. wearing a mask -- we already know, there is no excuse for that to be politicized. it is irresponsible that people are trying to prevent it. students and educators know that that is a mitigation strategy that works. we will continue to fight to make sure that our students have everything to be safe. matt: becky pringle, the national education association president.

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mark: i'm mark crumpton with bloomberg first word news. the situation at kabul's airport is said to be kolmar after the

desperate scenes yesterday when large groups of afghans tried to force their way onto planes in the wake of the taliban takeover. a white house official says civilians and military flights have resumed with more than 700 people moved out in the past 24 hours. a u.s. withdraw from afghanistan could shape a part of president biden's domestic economic agenda. some congressional democrats are talking about possible funding for the resettlement of afghan refugees as part of the $3.5 trillion tax and spending package they plan to pass without republican votes. oil prices have fallen for a fourth day and are heading for their longest losing run since march. travel has declined since the delta variant has tightened its grip around the world, and the rising of covid-19 cases across asia is also cloud of the outlook for oil demand. in california, wildfires have burned more than one million

acres this year. that is a record. crews are battling 10 large blazes, including the dixie fire, which is the states second-largest fire ever. the fire had destroyed more than 1000 buildings. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ >> welcome to bloomberg markets. matt: i'm matt miller. we welcome our bloomberg and bnn bloomberg audiences. here are the top stories we are following for you from around the world. moments away from fed chair abate -- jay powell speaking at a town hall with educators.

more on what his remarks could mean for the tapering conversation ahead of jackson hole. and ibm reports its biggest increase in revenue in three years on the back of strong cloud computing demand. we will discuss with howard boville, ibm hybrid cloud senior vice president. and we will hear from our exclusive conversation with cathie wood on her decision to remove almost all of ark's exposure to china. greg: we are pretty much a near the session lows. it seems a lot of the concerns that have dogged us in recent days in which the market has bounced back firmly, yesterday we were talking about the s&p in negative territory, only to be positive by the end of the session. we have seen things be more bogged down.

we talked about the economic recovery, the strength of the u.s. consumer, retail sales coming in softer than expected. we have downward pressure on yields. 1.24% on the 10 year. weakness across the board with that price of oil being in its longest losing slump since march. not good for the american market either. bhp group, the mining giant, has designs on the future of the company and it is some pretty interesting stuff. backing away from oil and gas. the stock was a little bit lower in u.s. sessions. they will sell their oil and gas business to woodside petroleum to build a massive new fertilizer mine here in canada. earlier on, ceo mike henry

discussed the move. >> there's an opportunity to achieve a few things. create more value for the shareholders by merging these companies into a more resilient company and unlock synergies in doing so which are quite material. secondly, we give shareholders choice. recognizing some see opportunity in oil and gas, others less so. this gives them a choice into how they want to allocate their portfolio. greg: potash is big news for canada but backing away from oil and gas, this is a huge part of the canadian economy. we are focusing on the potash side of it, multibillion-dollar commitments, but the oil and gas stuff is intriguing as well. matt: the whole story is. i remember when bhp bought billet and moved into the ftse.

the ticker, blt, always memorable for me. but now they will move out. that is one of the big pieces of the story. of course, they had record free cash flow. it has been a banner year amid sort -- soaring prices for these commodities. they are paying out more than $10 billion. it is amazing how much this company is doing and what mike henry is looking to do in terms of a restructuring. you cannot think of a better time to do what he is doing. they have the money, they will invest it as well as return to shareholders. fascinating story and a real transformation for the company and the ftse 100 as well. let's get to central banks. jerome powell is hosting a town hall with educators following comment yesterday from comments

from bank of boston president eric rosengren. he expects enough employment growth to announce a reduction in bond buying by the september. for more, we bring in olivia. we could see the taper start relatively soon? >> while this speech today is with educators and students, answer questions about monetary policy, tomorrow, we get minutes from the july fomc meeting which could give some indication on when we could see more on tapering. then jackson hole kicks off next week. powell will probably be getting more pointed remarks then. greg: the fed has been singing the same song for quite some time now, don't worry about inflation, it will be transitory. at the same time, we get the read that the consumer is

starting to worry. does powell hope that we all get on board? >> he has been sticking to the same message for the last couple of months, as you say. investors and policymakers are looking at jackson hole next week to see if he changes his tone, especially given the recent pressure from other officials saying they think it is time to start tapering, at least time to start moving that conversation more to the forefront. matt: what are the expectations for another tantrum? is it widely assumed that that will not happen? >> for now, markets have not priced in a taper tantrum. they think powell will do what he said he would do, which is start pulling back and lifting off as soon as they see employment growth. we have seen some strong jobs report in the last couple

months. with a few more of those, the expectation is the fed may start to pull back. greg: i feel like a lot of fed officials, whether they are voting or not this year, are singing the same tune as well, talking about the fact that the time will come, easing us investors into this idea that they will have to start peering those purchases and we should not be stocked -- shocked when it happens. >> some officials are more hawkish than others, coming down more strongly on the idea that tapering needs to happen soon. you did see in a bloomberg interview yesterday, he thinks it is time to start thinking about it but is also waiting on more employment reports. when it comes to the fed, you see action taken somewhere in the middle. you have the hawkish and dovish policymakers and it all converges to that average. matt: thank you very much,

olivia. talking to us about jay powell, right now speaking at that town hall. if you want to follow along in that town hall, just type in live go on your bloomberg terminal. you can follow along and listen in on the comments. as we had to break, we are also getting comments from national security advisor jake sullivan, delivering an update on afghanistan. he says that the u.s. is in touch with the taliban to offer safe passage to the airport. he will give more details. you can follow that as well on your bloomberg terminal. this is bloomberg. ♪ this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. ibm reported its biggest increase in revenue in three years on the back of strong cloud computing demand, showing its pivot to the fast-growing market of cloud is started to pay off. for more, let's bring in howard boville, senior ibm hybrid vice president. it is a pretty exciting business. you guys have shown great success here. is growth going to continue at this level? howard: we have come in as a relatively new entrant in the market segment we are going for, the regulatory industries of government financial services, telco, health.

the reason we focused on those areas, they have a low penetration from the cloud aspect. we expect to see this growth that we now have continue across all the assets we have, software systems, cloud base, consul systems. greg: it seems like one of the biggest prizes out there right now in terms of winning a new contract is what will replace the jedi cloud computing project for the pentagon. you look at the requirements for that business, is there an interest therefrom you? howard: we have capabilities and assets that can meet that need but it needs to fit into the thesis of the company. we believe the world will be hybrid, multi-cloud, as we see with other federal agencies. that plays perfectly to the collaborative nature ibm has a company in terms of working with other companies, cloud service

providers, and for some of the capabilities we have for customers. matt: explain what you mean by hybrid. i would love to know your take on things like the internet computer. is it going to be stored on all of our computers eventually? howard: hybrid is a complex word for his simple premise. customers will still run their applications and data sets in their own physical locations for a range of different reasons, not least of which due to privacy, but they will use multiple cloud providers. if we can provide a to our customers whereby they can draw on our capabilities, we can help them get the innovation from other providers, that puts us

in a position of providing value. when you look at the assets we have in ibm, we can deliver applications on distributed, and we can also do that in our mainframe business, and we also have quantum computer, which is harnessing the power of nature. we can meet a customer irrespective of what formfactor they need. we can deliver that on premise or off premise. we are situated to meet all the needs that customers want and collaborate with other cloud service providers. matt: i find it fascinating. i hope we can get you back on the program in the not-too-distant future. howard boville of ibm coming to us. u.s. national security advisor jake sullivan delivering an update on afghanistan. bill faries leads our security

coverage at bloomberg. from the headlines i have seen across the terminal so far, it seems the overall message is the u.s. is in touch with the taliban. they have lines of communication open and are looking to guarantee safe passage out. what else do we know? bill: that is a big development. we knew that the u.s. was talking to the taliban in qatar about security at the airport in kabul, where we saw that breakdown with crowns flooding the tarmac yesterday. now, jake sullivan saying the u.s. is in touch with taliban commanders around the airport to try and ensure the safe passage of a lot of these afghan allies, translators, allies, people that worked with u.s. and nato forces, so that they could get themselves to the airport for a flight out. there have been a lot of reports that those people are being held

up at some of the checkpoints, some of them have reportedly been beat up. you can imagine, many would be too scared to even try to brave a trip to the airport. they are not saying that everyone is getting through but they are saying they are talking about this with the taliban. matt: it is interesting, we are hearing from jake sullivan that the u.s. was clear eyed on this risk. we heard yesterday from the president himself that the u.s. was prepared for every contingency. does that mean we are expected to believe that what we are watching, that the u.s. was repair for what we are watching in afghanistan right now? bill: it is a pretty hard so. -- sell. even before the chaos of yesterday, it seems like the administration was caught on their back foot when it came to evacuating these translators and other people.

that is something that you heard members of congress from both parties raising alarms about over the summer. it seems like that process got started very late. we are talking about tens of thousands of people that the u.s. resume will he would get out. two weeks until the u.s. says it will complete its withdrawal from the country. how are they going to get that many people out in that time was still limited flights out of kabul airport? it is hard to imagine. greg: in canada, we said we would not recognize the taliban as a legitimate government, but these are the people that need to be negotiated with at this point to facilitate the move of people out of the country. any sense going forward with that relationship looks like? bill: it's a big question of what the u.s. will do when the taliban officially declares a government, whether it is just a taliban government or between these talks happening between

officials from the former afghan government, whether it is a joint government. president biden has said the u.s. will continue support -- to support afghan civilians. how do you do that if you don't recognize the government effectively in control? greg: great to get your insights on that, bill faries. when we come back, we will talk about cathie wood and the ark investment fund. getting cautious on china. this is bloomberg. ♪

greg: this is bloomberg markets. i am greg but now with matt miller. we are keeping our eyes on chair powell.

unclear, he says, that the delta very well have an economic effect. the labor market recovery have been put front and center for many central banks, including the federal reserve, including the reason why they are giving us all of this extraordinary monetary policy. the recovery is lower among those who are in public interaction jobs. they want to see people in those service industry jobs find more strength. that will be the support for the workforce return. but the question a lot of us have, the delta variant. he is saying that he is unclear if the delta variable have important economic effects. we have been watching the story of ark investment and cathie wood selling off ties to investments in china. she says the country seems to be in a state of retreat.

and extrusive conversation with shelly bassett, she discussed the pullback from china and discussed the outlook for stocks. >> they are sending a strong message when they use expressions, as they did with the online education companies, they said that it had been hijacked by capital. that sounds a little rough on capital. i think the valuation of a market is going to stay down for a long time, until they become more inviting to foreign capital again, maybe want to integrate more into the world than they seem to right now. greg: joining us for more on this is chanel nebraska. -- sonali basik.

what really struck you? >> a lot of meta things going on today. cathie wood says there is a long-term valuation pressure and that the ark flagship fund, they sold out of chinese companies but are still exposed to tesla, the largest holding in that fund. exposed to china. something interesting happening at the same time, you see michael burry having too short positions against ark's flagship fund but also shorting tesla. there is a lot going on at the same time against all of these trades. these two mega money managers fighting each other on valuations versus understanding innovation. as far as cathie wood's stance on china, you see it in the filings. a lot of hedge funds following her out of china but there is a lot of exposure out there. matt: she gave michael props on

his house and call but says he doesn't understand what he is talking about when it comes to innovation and growth. >> she has defended all of these bets over the longer-term, so what will stick in the portfolio over the next five years is worth watching. it is interesting, the reversal of her call on china. she acknowledged that china was ahead in many innovations in financial services. something else happening in the market is the big bet on the banks. sofi was one of the most bought. matt: always bring us the best interviews. sonali basak. for greg pennell, i am matt miller. this is bloomberg. ♪ bloomberg. ♪

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news. a taliban spokesman has pledged

security enough kingston. -- security in afghanistan. pledging that all media will be free and independent. the spokesman also vowed that the taliban would not discriminate against women and the insurgent group has pardoned all who fought against it. and the nato secretary-general is blaming a failure of afghan leadership for the swift collapse of the country's western backed armed forces but concedes the alliance must also address flaws in its military training program >> the secretary says around 800 military personnel will remain behind in afghanistan in part to keep cobbles airport running safely >> northface timberland ending our military mission was not easy >> -- easy.