alix: welcome to bloomberg's commodity adage. we focus on the companies and the hottest commodities with the smartest voices in the business. the top story was the disaster that hurricane ida left in her wake from louisiana to new york and further, from power outages to infrastructure collapse. president biden: everyone has been working through the night and into the morning to get power back. there is a lot of damage and i made clear to the governors that my team at the federal emergency management agency, fema, is on the ground to provide all the assistance that is needed. alix: here is how the devastation played out in commodity markets. the impact drove wti discount to brent to the widest in five months. we are back from that level but rigs in production can ramp up faster versus refineries, which

will be slower to rebound. nearly 2 million barrels of u.s. gulf coast refining capacity is now off-line, so there will be a lot more crude sloshing around with nowhere to go. ida also hit the chlorine industry. it swept through heavy areas of production and the chemical was also in short supply. now it is contending with power outages around baton rouge and louisiana, and that could increase prices further. it is a double whammy for corn. hurricane ida left behind broken grain elevators, widespread outages, and shuttered export terminals in new orleans. export prices trading a little bit heavy. there is worry that could be backed up as we get into the harvest season. on the others is the demand issue.

china demand is rolling over, expecting a bumper crop after farmers ramped up after this year. that is weighing down chinese corn prices, making more expensive imports from the u.s. less attractive. chinese corn purchases in 2021 and 2022 could miss the estimate of 26 million tons. let's get into the ring with european natural gas prices and carbon. both also hit records this week. is it sustainable? here with us now is the team leader for gas power and a new loan in europe. can this record rally continue? >> thank you for having me. can the record rally continue? it depends on the winter. so far, the inventories are at the lowest for this time of year in more than a decade, and it is

in the summer, when demand is not supposed to be high. depending on whether we are able to get more russian gas, or if asia continues to by all of the lng, europe doesn't get any, and prices can go higher. alix: is it a demand or supply store at this point? >> demand is coming back as the economy reopens, people return to the offices. you have more demand. but you also have more supply. a lot of these operators in the north were not able to conduct maintenance last year because of covid, and now they are conducting again. there are problems in the north sea. russia is not sending as much gas as they use to, and asia keeps on buying all of the lng cargo and there is not much arriving in europe. alix: does this make coal more competitive with the price of natural gas? >> it's interesting, we have

seen a comeback in coal generation in some countries. gas is so expensive, so the only way to meet demand is looking at coal. that is why you see the record carbon prices. the market is trying to send a signal, don't burn coal, but there is no gas. alix: i'll interconnected. thank you for joining us. time to commodity in chief. today, it is ncx ceo and founder. carbon offsets are key to the world's decarbonization efforts. nearly 1700 companies have pledged that zero targets, and some are talking about being carbon negative. they can become more efficient and capture their own carbon, but the problem is, for a lot of those companies, those solutions will not get into that zero, at least not right away. in the meantime, they need trees which can offset co2 emissions.

one ton of co2 for one cer. supporters say it reduces greenhouse gas emissions, supports sustainability, and helps with shade to keep places cooler which means less air-conditioning and less power consumed. critics worry about how much offset they will create and there are issues with disease and wildfires that could ravage forests. enter ncx, national capital exchange. it is developing an exchange for these carbon offsets. a company secures an offset for one year. ncx created an ai for us to verify the quality of these credits. so far it represents 670 landowners, 2.30 5 million acres

of land. i recently sat down with the co-founder to ask how that verification process works. >> not all forests are the same. some forests are able to pull out more carbon than others. trees within those forests, some grow faster, some are more carbon dense than others. alix: give me an example of a tree or forest area that does well in sucking up carbon. >> you can think of the redwoods in northern california. those forests can grow extremely dense and hold lots of carbon within them. if we allow them to continue to grow and let them get to greater levels of maturity. you have forests in the u.s. south, while they can also pull out a lot of carbon, they never get to the level of density that we would see in the forests in

california. it has to do with the soil, the weather, and also the tree species that have evolved to exist there. alix: how do you come up with the price? >> we have a reverse auction to drive efficiency and transparency. really it is up to the landowners to say at what price they are willing to defer harvest. by doing that, they are foregoing the revenue they would otherwise get, rolling the ir forest longer. alix: have you noticed what price really get this thing going? >> son landowners who didn't clear in the reverse auction, it is a uniform price option. in our first iteration, it cleared at $17. $17 to defer a large harvest this year to get this climate impact we are seeking. in the second iteration, we brought on far more acreage,

additional forest types, and we saw that clear at $12. we are going to see the market price settle, get clarity on what that will be. that will give confidence to landowners to increasingly participate. alix: is there any downside to planting more trees or keeping these trees not cut down? will there be increased tree cover in places where they shouldn't be? >> robin more carbon dense forests does not help with everything. there are some wildlife species that don't benefit from more density. fire risk in the u.s. west doesn't benefit from more dense forests. certainly, water yield in the west doesn't benefit from more forests. trees come in some sense, are like water pumps. when we look at this solution, it is not as simple as grow more trees, more dense trees.

we have to look at the entire system. alix: the offset doesn't work if the trees burned down. >> that has been one of the problems. you have a landowners saying i'm going to hold these trees for 100 years, but forests are ecologies. these are payment on delivery. at the end of that term, we are crediting landowners for what they could accomplish in the year. unfortunately, if the forest is disturbed, there is no credit rewarded, rather than this long-term iou set up which effectively looks like a long term forward-looking contract. alix: how long will it take you to scale? >> i would be disappointed if in one year we were not in mexico, canada, latin america, africa, asia. there is so much potential. alix: that was my interview with the ncx co-founder.

from protecting trees to region wildfires, the caldor blaze grew to more than 200,000 acres, threatening the city of south lake tahoe. the fire, which ripped through wildlands, left crackling drive-by drought, is one of the more than dozen places in california. it is so bad, ski resorts are turning their snowmaking equipment into firefighting tools. also on my radar, taking a look at gasoline prices into labor day weekend. they are high and could get higher. inventories have been drawing a little bit and now you have the refinery issued due to hurricane ida. that does it for bloomberg commodities edge. this is bloomberg. ♪

matt: welcome to bloomberg markets. coming up, we will speak with the ceo of digital banking firm vm technologies about the future of digital banking and fintech. and we will push ahead to tomorrow's jobs data with veronica clark, citigroup global markets economist. first, i want to see what is going on in the market, and we have another all-time record high on the s&p 500. 4538 is where we are at now. up .3%. if we close at another record, i

believe the 55th record high this year. we have never had this many record highs in the s&p 500 in one year. the 10-year yield coming in at 1.2919. the bloomberg dollar index also off a little bit at 1142. wti rising almost 2.5% right now. for more on the markets, let's bring in our cross asset reporter katie gry filled. yet another high end equities. >> this record high is more interesting than some of the other record highs we have seen only because it seems like it is the cyclical sectors leading the push higher today. the top performing sectors are energy, industrials, reflation-esque sectors that have not been getting a lot of

love it is backed up by a lot of money, if you look at the etf flows. yesterday we saw over $1 billion flow into real estate and tips coming into pure treasury tracking fund. it is interesting that you see traders attempting that reflation trade that started at the beginning of the year but has not made money in the past couple of months. matt: it makes you wonder -- first of all, i should point out, we have all seen this pattern. traders run up the futures into the open, sell off, it is down, and then when the european market closes, they start to buy u.s. again. it is almost an everyday thing. but because we have this nonfarm payrolls number tomorrow, what are people expecting? luvleen: i was speaking to --

katie: i was speaking to somebody and they said that the numbers will be pizarro. we know we have jackson hole, the fed september meeting coming up. if we get a weak print tomorrow, that could be good news because it may push off a taper announcement in september. on the other hand, if we get a strong print, some are saying that september could be live. you could see the taper announcement there. you add up those possibilities and you get bizarro. it will be interesting to see how tomorrow plays out. matt: your take on bill gross saying that bonds are trash, like cash? what is the market reaction? katie: it was a little harsh. a lot of people would agree with him. 1.3% on the 10 year treasury is not all that impressive. but if you look at last week's

auctions, we saw a strong international bid come through. for the two-year sale, they got the largest share since 2009. if you looked at the sovereign developed bond market, there is not a lot of yield. 1.3% on the treasury yield. maybe it is worth going for it. matt: you can talk down the paper, but he basically said investment funds that buy then belong in the garbage can. thank you for joining us, katie gry filled -- greifeld. staff that don't want the vaccine should just apply to work from home. laws differing in every country concerning mandates. he believes the solution is to give workers the option to work remotely indefinitely.

but banks are struggling to get employees back in the office. ubs is rolling out a permit hybrid working model days after deutsche bank said that if you want to get into the offices in new york, you have to have a vaccine. more consumers are making the switch to digital banking. we will get an outlook with luvleen sidhu, ceo of digital banking firm bm technologies. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. since the onset of the pandemic, more consumers have started to embrace digital banking. they have had little other choice. here to discuss the evolution of fintech is luvleen sidhu, ceo of bm technologies. i believe you are the youngest female founder and ceo on the stock exchange. but not without your bona fides. you went to harvard, went to wharton, worked at neuberger berman. what made you branch out into digital banking? luvleen: thank you so much for having me.

what really got me excited, i graduated from harvard in 2008. my first day on the job was the lehman bankruptcy. very early in my professional career, i was able to witness firsthand the fragility of the american financial landscape, and how so many americans were hurt. it really instilled in me this passion that we are in an age where we can use digital means and technology to create strong financial foundations for american. that is really the mission for bm technologies. matt: you took bank mobile technologies public via a spac in january. are you offering services to consumers? are you working with brands to help them do digital banking services? what is your strategy? luvleen: we have definitely

built the technology and end product that is equal or equal to the chimes and other banks that many are familiar with. what is unique about us is the acquisition channel in which we get to that end consumer. we have a banking as a service strategy approach. we enable larger brands like t-mobile, google, 735 colleges and universities that we have partnership with around the country, to offer fully branded banking services to their students, employees, to their customers, to better attract, engage, retain them, create more loyalty and income streams for themselves as well. matt: having worked on the street, knowing the industry like you do, is fintech a threat to the big banks? is fintech going to be bought up

and made part of the wall street that we know and love today? luvleen: i think there is definitely a complementary relationship that is existing. we are seeing an evolution take place. a lot of fintechs are going out and acquiring bank charters. we have seen that with lending club, sofi. at the same time, we are seeing banks really getting into the api, technology space, so they can connect better with fintech's. they often require the charter to lend freely across different states, hold deposits, so you are seeing a mean reversion, where banks are becoming more like fintech, fintech is becoming more like banks, and there is an emergent taking place helping all customers.

matt: are we going to be seeing some molecular tory hiccups -- regulatory hiccups? we are seeing crypto go through that, but it looks like it is coming through fairly well. is it going through this hand-in-hand with fintech as well? luvleen: absolutely. the regulatory framework has been historically a little slow to catch up with innovation, which in some ways creates loopholes for companies that we see and then later they get in trouble for what they have done because they have created a strong user base or brand in the meantime. i think there will be strong respect both ways. the regulations are in place to protect the consumer. fintech is all about creating a mission, strategy that is better for the consumer. so they do support each other. i think that we will see a really good partnership

developing, so that we can better serve customers, whether with faster payments, more innovative products, more crypto and digital asset products in the market, etc. i'm excited to see where things go. matt: we hope to have you back. luvleen sidhu, ceo of bm technologies. coming up, we are looking at shares of chwey. they are following the most by disappointing the street. this is bloomberg. ♪

>> last night's storm in the northeast is being blamed for more than 20 deaths. the remnants of hurricane ida

cost flooding, thunderstorms, and natives. new york city mayor bill de blasio the massive damage done. >> we are in a whole new world now, let's be blunt about it. we saw a horrifying storm last night, unlike anything we have ever seen before. and this is the reality we have to face. unfortunately, the price paid by some new yorkers was horrible and tragic. >> streets were in dated, traffic was a mess, and transport services were paralyzed. more than three inches of rain fell in one hour. the toughest restrictions on abortion in the u.s. will stay in place for now. a sharply decided supreme court refused to block a texas law that bans most abortions six weeks after conception. providers had asked the law be put on hold by the legal fight goes forward. moderna and its japanese

partners say there is currently no evidence licking the deaths of two men in japan to stay the steel particles found in vials of the moderna vaccine. they say there is an ongoing investigation but that the deaths are not considered coincidental. the u.s. just up at department is preparing a second monopoly lawsuit against google. this involves allegations that the tech giant is abusing its dominance in the digital advertising business. the company is already fighting a suit over web search. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ >> welcome to bloomberg markets. matt: we welcome both our bloomberg and bnn bloomberg

audiences. here are the top stories we are following for you from around the world. we get a preview of the august payrolls report with economist veronica clark of citigroup. plus, growing scrutiny of cryptocurrencies. a look at state regulators on interest earning crypto accounts that they feel are not properly disclosing risk to investors. and we will look at chewy as shares fall the most since december of last year after second-quarter earnings disappointed to the downside. greg is watching the markets. greg: looking pretty good on both sides of the border, record highs on bay street and wall street. i am thinking of it like part one was jackson hole, jay powell was able to calm investors nerves in terms of monetary policy come about tomorrow we have the job market.

in toronto, we had a nice triple digit gain building on yesterday's record close. record toward tory on the -- territory on s&p 500 as well. cyclicals are in favor today, which is not bad if you are looking at the long-term prospects of the recovery. it feels pretty good. we have a big day ahead of us, u.s. jobs. we will be talking about that in a little bit. for what it is worth, we have two gold and shiny towers being put up for sale in toronto. the headquarters for royal bank of canada are being up for sale. it could be worth more than $1 billion. it is interesting, they are looking to use the proceeds to increase their exposure in life sciences and logistics.

you have high office vacancy rates. rbc has 40% of the building least, and they plan on staying, but this will be an interesting reaction. matt: we are starting to see more stories about commercial towers or classes up for sale. the builder of hudson comments in manhattan is also planning to sell newly redeveloped properties for more than a billion dollars east of hudson yards. the idea that commercial real estate is dead may be a little bit overplayed right now. greg: indeed. i don't know if those things look as good as the golden towers but they are actually gold. if you have ever been to toronto, i think they are plated in some sort of gold derivative. that has to be on the flyer for

the open house. matt: i am not personally down with the goal buildings. the soviets had one here in east berlin, and we knocked it down and rebuilt the palace. if you ever come here, i will show you the new digs. online pet supply retailer chewy is falling after posting second-quarter earnings and signaling that pandemic trends may be reversing. dave wilson has been digging through the filing. it is not just because i am a dog lover, but this company i know quite well because the founder is i believe the biggest shareholder in that company that the reddit crew love so much? dave: gamestop. ryan cohen is the chairman of gamestop.

he is trying to transform the company into something closer to chewy. when you look at the pet retailer's second-quarter results, you see they had a loss when analysts were expecting a profit. that is not so unusual because chewy doesn't exactly have a track record of profitability. they made money in the last two quarters but going back not so much. it is all about the top line because it is a fast growing company. it came up just short in the fiscal second quarter. for the third year and -- quarter and the full year, it didn't add up to what analysts were anticipating. they left their full-year forecast unchanged from what it was in june, not what you want to see from a company that is all about growth. then you look at how sales have unfolded since the company went public a little more than two years ago. you have seen a deceleration in the last couple of quarters.

analysts expecting more through the risk of the fiscal year, so it raises the question of what happens as people feel they can go buy their pet food at the store, or they decide they want to spend money on other things that were not so accessible in the pandemic. these are the kinds of issues that chewy is facing. what we are seeing today with shares down 9%, not so unusual by historical standards. it is the sixth time in the past eight quarters that chewy has fallen after results. this stock peaked back in february after surging from its initial public offering price. today is arguably more of the same from the last six months. greg: interesting to think of chewy as a stay-at-home play. we know that more people brought in pets to their homes and even brought them more treats. how are they stacking up against

those other stay-at-home names, suffering the same fate? dave: it depends on your timeframe. chewy shares over time, the last two years, they have done better than an index tracking stay-at-home companies. you consider what is happening in terms of the reaction, quarterly results. last week we had the results from peloton. shares fell more than 8%. yesterday, zuma video down 17% in the wake of that company's results. what we are seeing with chewy is not so at a line from what we have seen from other companies as earnings come out, and the question comes out, in essence, is the stay-at-home binge over? matt: my young one got more walks during the lockout than ever before because there was

nothing else to do and he was my only friend that i was absolutely sure didn't have covid. not quite so stay-at-home but he did get a lot of treats. thank you so much, dave wilson. coming up, a preview of what we can expect in the august payroll report. joining us is economist veronica clark of citigroup. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. with greg bonnell. what can we expect from tomorrow's payroll data?

joining us to discuss is veronica clark, citigroup economist. the whisper number is just above 700,000. what is your outlook? veronica: we have a forecast a little higher, expecting 850,000 jobs added in august. we do see two sided risk around the number. more uncertainty around the august print than the last few months. we could have more labor supply issues or we could also have a return to work as unemployment ends. greg: how important is this number? i think of this as a 1-2 punch, the first one being jay powell, the markets, but a week later you get this key data point which is pretty central to the fed's course. am i putting too much weight behind this number tomorrow? veronica: the fed has really

refocused our attention on every jobs number. always some of the most closely watched today to begin every month. the fed ups the ante for every print. it does matter, but i don't know if any number we change our base case. we are still expecting a taper announcement in september, and the market is expecting it sometime this year. i'm not sure that it will change too much but we will definitely be focused on it. matt: what about inflation? jay powell gave a pretty convincing argument that everything we are seeing is transitory and that none of it would be affected by any fed moves. nonetheless, bloomberg had a great piece pointing out the labor shortages and supply chain issues are driving food inflation to levels that are definitely worrying. veronica: it was a bit surprising to hear powell say that.

it is not different from what we heard from the fed before. they are looking through increases of airfares, used car prices, but we have seen strong wage increases in some of these lower wage industries. we know labor shortages have been an issue or a number of months. uc restaurant worker wages coming up, translating into restaurant prices. i don't think we should be so dismissive that all inflation is transitory. greg: i don't know if jerome powell enjoys the headlines but he sure has been getting them lately. veronica: we are really going to be focused on fiscal policy for the month of september. the bipartisan infrastructure deal still needs to be fully passed into law. the $3.5 trillion package. you have a lot of support from fiscal policy over the last

year. you are getting some questions, if that starts to drop, less consumption from physical. we still have a lot of pent-up savings. unemployment is ending but we still have this child tax credit coming out. we will be focusing more on the fiscal in the next month or so. matt: in terms of tax policies, what are you expecting there? so much news and activity at the beginning of the year, in terms of family business is getting ready to sell in order to avoid a hike in capital gains tax. that seems to have gone quite over the past few months. veronica: on the fiscal side, we hear more about spending intentions rather than how things are paid for. there is not for trillion dollars in fiscal spending on the table right now with infrastructure versus the other plans. our base case is maybe we get half of that. maybe $1 trillion in tax offset. it would be an increase in

corporate taxes and high income earners, too. greg: i don't know if you follow closely, but in canada, we had a pretty disappointing read on a second-quarter gdp. we actually contracted. how do you see the american economy unfolding, more resilient than we saw in canada in the face of the pandemic? veronica: the canada data was interesting. what was may be more surprising and canada was the estimate that july gdp would also decrease. that is kinda related to what we are seeing in the u.s. the underlying story for both countries, demand is still strong but we are getting into this issue of how much supply, how much does that contract activity? in the u.s., one of the most obvious cases where we are seeing that happen is with autos. very strong auto demand, but

supply issues mean that you cannot produce the autos, you cannot sell them. just yesterday, we had auto sales declined even further. that is a more worrisome picture for growth getting into the second half. matt: the job in delta cases, is that looking like less of a concern then maybe the market expected? is this economy learning to live with the virus? veronica: i think that is right. every wave of covid we have seen, economic activity is less responsive to it. we have high frequency data that we follow on people going to restaurants, traveling through airports. there has been some pullback, some data going sideways, but there has not been a huge contraction in activity. we are definitely more resilient to it now.

greg: nice to get your thoughts, veronica clark from citigroup global markets. when we come back, we will talk about the crypto space. some accounts yielding 7% returns, and that is spurring some scrutiny. this is bloomberg. ♪

greg: this is bloomberg markets. i'm greg bonnell. cryptocurrencies grab a lot of headlines but state regulators issuing some mornings. interest-bearing crypto accounts appeared to be on registered securities not disclosing their risks to investors. i know that you are a crypto enthusiast, at least being

interested in the space. it is interesting whenever we have something new and shiny, there will always be these concerns about whether people are dealing fairly in the space. matt: i am not invested in it because i lack the courage of my conviction, but i also thought it might be unethical to report on something like that. i have been following certainly bitcoin for over a decade now. the new products that we are starting to see are more complex, may be a little bit more worthy are regulation then bitcoin was to begin with. now that you are getting things like stable coins -- that is where we have these investment accounts that offer reportedly 7% returns. also thede-fi space where watchdogs need to come in because every couple of weeks

you hear about a story of somebody getting ripped off. i think it is even more fascinating. regulation is like, the wild west, somebody has sent the militia out there and they are starting to get a handle on things. eventually, we will have a nice, safe, and law-abiding public in crypto, just like we do in las vegas. greg: [laughter] nice way to get to the conversation. bloomberg news joe light joins us now. what exactly are the concerns here? basically, to matt's point, this is a way for companies to cater to investors for what appears to be safer returns.

these are people investing into cryptocurrencies with companies, but putting them on deposit, getting paid on interest rates. your average investor who is just learning about this space, that looks a lot like a savings account. a lot of these companies compare their rates to bank savings accounts. you can earn 100 times the average national saving rate, when in fact, these accounts are not insured by the federal government. the funds are being re-lent out to institutional investors to do all of those things that they do, buy cryptocurrencies on margins, short others. regulators are concerned investors are not being told enough about those risks. they think they are invested in something that is much safer than it really is. matt: what do you think we will see here? the old adage of it is too good to be true, it must be, that has

to hold when you are looking at 7% return in an age where we have the 10-year yield at 1.3%. on the other hand, i've been seeing these 6%, 8% returns on crypto accounts for years now. joe: right. one of the main problems we have here -- if you don't know -- what economic circumstances would have to happen for these accounts to crash and not make good on the funds they deposit to investors. when you invest in a high-yield bond, that comes with bond documents, explicit disclosures of the safety of the company, what it is using the funds for, everything like that. some of these accounts do make that kind of disclosure. they say it is being sent back

out to institutional investors who are using the money, but you don't know which institutional investors are getting the funds. you have to trust these crypto savings firms to do their due diligence to make sure the institutional investors can pay the money back. when you see the crypto market that we saw several years ago, where the price of bitcoin absolutely crashed, you don't know who will survive. matt: thanks very much for joining us. joe light covers crypto for us. some breaking headlines on virgin galactic, which just came out with news that it will have its first commercial research mission. the faa will not allow virgin galactic to fly pending a probe, according to reuters. we will bring you more on this developing story. this is bloomberg. ♪ ♪

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♪ >> i'm karina mitchell with the first word news. president biden is responding to the supreme court's decision not

to stand in the way of an abortion law in texas bands most abortions six weeks after conception and laws -- allows private parties to sue to enforce it. last night's storm in the northeast is being blamed for more than 20 deaths. the remnants of ida caused flooding, thunderstorms, and tornadoes. the new york state governor talked about the new normal. >> the records were broke in central park. 3.15 inches in one hour. it broke a record set one week earlier. >> that says to me that there are more cataclysmic foreseeable events. we need to for the disease in advance and be prepared. >> traffic was a mess and train services were suspended. in new york, lawmakers extended the states freeze on ev