Global news 24 hours a day, powered by more than 2600 journalists and analysts, in more than 120 countries. Im mark crumpton. Isom bloomberg west, next. Emily im emily chang. This is bloomberg west. Coming up, could brexit cast a shadow over business in the cloud . We sit down with the ceo of box, and how hes preparing for a european split. Plus, one of the Countries Companies pioneering analytics to see how Smart Software is driving up satisfaction. This week, bloomberg is taking a deep dive into the world of pharma. Developing a solution to peanut allergies. First, u. S. Stocks rallying, paring losses post brexit as the market shows signs of regaining footing. Tech stocks were among the winners. Lets bring in remy innocence you in new york, standing by. Basically, stocks rising for a second day in a row, after two days of losses post exit. The nasdaq was the biggest gainer, around 1. 9 . That is higher than the lows in the past six days. It was a broad rally led by energy, similar to what happened yesterday. Rose 3 . Se khalil the Financial Sector was also the secondbest performer. With the gains today, i want to sort of rollback the hands of just before brexit, it. In the past five days, the s p 500 is still in the negative. We are down by 7 10 of a percent since june 23. If we look at the past four days, the snp is down by 2 . By 1. 75 . Down the nasdaq itself is off by about 130 points. Down the most percentagewise, 2. 7 . Emily how about tech stocks, are they making up early losses . Looking at that sector, it looks like pretty much all constituents were down, except for two over the past four days. You are taking a look at the biggest point losers in terms of the past four days. Microsoft is down 9 10 of a percent today, but ever since brexit it is down by 2. 6 . Ibm is actually down nearly 7 ever since brexit. Today, it is down by two point 9 . We also have 2. 9 . We also had the biggest point losers. Network solutions te conductivity down by 9. 5 , just about. We still have a ways to go. Emily thank you. Turning to the world of private tech companies, perhaps the Silver Lining on the cloud of uncertainty over the global market. The Global VentureCapital Community may emerge from the brexit storm relatively unscathed. In 2016, the u. K. Attracted just 3. 5 of venture capital, with europe in its wake. Dynamics,te down the our Bloomberg News reporter. How smallst shocking, a slice of Global Capital that europe gets. How will Brexit Impact that . It will make it harder. Startups are hard. When people are focused, you vcs,at founders and ceos, they are focused on building companies. Rides it is not the first thing on anybodys mind right now brexit is not the first thing on anybodys mind right now. Europe has been a tougher place to grow for the last several decades. I dont think brexit will help any. Emily i wonder if other regions like china and the United States will benefit. I have talked to venture firms who have said that. The u. S. Stands to gain a little more of a higher footing. Maybe before you are thinking about starting your start up in new york or london, now you are just thinking new york. Regulatory issues. It has been a difficult place for u. S. Businesses to operate up to this point. How big a deterrent are these kinds of issues for that . In the technology world, markets are getting flatter. Companies are going global earlier in the lifecycle than ever before. Europe is a big and important economy. Companies want to go to europe, but frankly, it has been really difficult to grow in europe. Have a numberou of small markets that group together. It is not really one economy like in the u. S. Or china. We are actually seeing more companies in the u. S. Go asia first, rather than europe first. I dont think moves like brexit help that at all. I think you will see the same is true with chinese companies. Theyre looking to go global, then they go to the u. S. And other regions of the world before europe, and we can continue to see if a slide. Talkinge are actually to a company later, moving their headquarters to berlin. I citieseuropean cap can benefit. Looklot of people like to to france for engineers. Maybe they are worried it will be more competition to recruit, they may be looking to settle elsewhere. Emily d. C. Any bright spots for u. K. Startups . I dont know if i see right spots for u. K. Startups, but we have to look at the world we live in. We are in a world where Technology Shifts are moving rapidly. And machineg ai learning increasingly becoming important for technology. This is a global trend. The world is getting flatter. Despite what happens with populist movements in the u k and other places even if global free trade, goes down, you will still see technology catapult forward, and new companies and startups taking advantage of trends are going to benefit in one way or another. Emily do you think innovation will take a hit . Innovation is a runaway train, and there isnt anything that can stop it. That being said, Global Growth could slow. The impact innovation could have on society could be curtailed in a world where country stop trading freely with each other. That would be a shame. Emily thank you for joining us. Thank you both. We are watching paypal getting a boost in wednesday trading on the back of takeover rumors. Earlier this year, a report cited mastercard as a possible suitor. Late last year, there was the suggestion of google. But a note said the mastercard proposition was extremely unlikely, adding that a deal did not make sense, strategically. Paypal has an average price 44. T of coming up, here from aco using the data to upgrade your closet, bigtime. Plus, the challenges brexit poses to clad cloud computing. We talked to the ceo about the industry. Emily a new breed of retailers are disrupting the market using big data. The San Francisco startup has an army of thousands of stylists and warehouse workers who sent personalized boxes to customers across the country. You buy what you like, send back what you dont, and pay 20. This is called the new normal. Joining us now, the ceo. Thank you for joining us. When in the audience stitch fix was mentioned three times in the annual report. What do you think is the new normal . I absolutely think this is the future. I think the core of what this is, is personalization. In the old days, there was a time when you went to the store and try to find what you want, then you could go to the website and try to find what you want. Now, we are bringing that experience to you in your home. To be able to personalize and understand what peoples preferences are, so you as a consumer do not have to go through the whole world of products to figure out whats going to be best for me, it feels like mixing data science and being able to understand well,t and people really and combining that make it a better Customer Experience. Emily tell me more about the technological aspect of it, and how you are combining the human touch with ai and big data, and Machine Learning to give customers what they want. We have one of the bigger data science teams that we are aware of. Overt 80 data scientists, half have phds. That team is building tools, so as we are buying products, and creating product and sending it to customers, we are doing it in the smartest way. For example, when the stylist is making selections, the stylist has Data Available to her so she better understands what dress is better to work for you. That is because we are able to collect this at of highly actionable data, around attributes of close that really matter. We understand what works for curvier people or tall people. For you as a customer, we understand are you looking for business, or formal type of work where, or more casual things for the weekend. To be able to have this very high quality data, combined with traditional data science, we are able to generate accurate predictions. When stylists are making selections, the stylists can have a high degree of knowledge about what is likely to work. What can you tell us about how many customers you have, and where the customers are . One of the things about stitch fix, i have friends in the middle of the country who are obsessed. It seems to have a broader audience. Absolutely. We have a very broad audience. Today, we are focused in the u. S. , but we ship to all 50 states. What is amazing about the concept is that what a 19yearold will get in her talks would be different from a 60yearold. This level of personalization we are doing to address people on a oneonone level, means we are able to address a much broader swath of customers, then a traditional retailer trying to push anesthetic. Boxy other Subscription Companies have had trouble. How is this sustainable . We dont associate ourselves as a subscription company. You can get it all a card if you like. If you like. Every time youre coming to get clothing with us, we have a stylist building a relationship, maybe making a personalized selection for you. That is very different. We are really focused on what we know matters, and the personalization really matters for us. Said a visitor recently to her profitable, when investor d evan hundred 30 million 730 million for profit. We dont share specifics on the financial side, but we have been focused on building a healthy business. We have not raised money and a couple of years. We are focused on making sure it is a Business Model that scales and works. Employeesndreds of across the country. We are focused on making sure the business of personalization is here to stay. Out andou are working inhouse brands. Im curious about that. You are announcing a line for men. What does the future hold . Is coming inline the fall. We had some brands that we developed inhouse. On the mens side, we are trying to figure out what the service would look like. Right now, we are into data. We have learned a lot. We are excited in the fall to address more customers and be able to outfit the men in the lives of our other customers. Emily what do you think happens to traditional retailers like j. Crew who have not whether this well . Every day im getting emails from them, 50 50 off. That cant be good. There really is a race to the bottom. We have seen so much innovation about getting things cheaper and faster. But at the end of the day, what matters is, people are not saying let me find the cheapest black dress. Thats not the way people shop. Trying to figure out how to personalize retail, and help customers find things they love, it is hard to unlock. You see a lot of traditional retailers struggling with the weight of having investment in stores, and trying to marry stars stores and ecommerce. We have to look at it in a of how our people interacting today, how do people want to receive things today. We are a lot more flexible, because we dont have a store footprint. Emily who do you think of as your competition . When we ask our clients, it is interesting. Clients are switching away from traditional brick and mortar vertical players or Department Stores and shifting more towards us,. I think some of that certainly has to do towards with convenience. Some of it has to do with the personalization. Even shopping online, if you are going through pages and pages of products to find pants that are right for you, being able to have a style and make a selection for you, is a better use of time. We ask our clients where the itlet share is coming from, is actually more traditional players. I dont know that we necessarily think of the newer version of commerce as being competition. It is more about how do we compete with players that are currently dominating the market for our customers. Emily the stitch takes founder founder stitch fix and ceo, thank you for joining me. Coming up, Food Allergies are spiking at alarming rates. We hear from one company with a possible nutty cure. This is bloomberg west. Emily an update from joe bidens socalled cancer moonshot. The President Biden moonshot is carrying the hopes and dreams of millions of people who want us to succeed and make a difference. Not some day, but now. Ibm is donating access to its watson supercomputer to help deliver oncology treatment. Drugmakers will Share Research to get new medicines to market faster. Greg simon is leading the Moonshot Task force, that must get underway before the next administration moves into the white house. Speaking of research developments, bloomberg is presenting what we are calling focus on pharma. We are going deep on the Global Business of pharmaceuticals and biotech, with a range of stories across all of our platforms. Today, we are focusing on peanuts, and the alarming rate at which we cpfl energia pickup in recent decades. According to a food from the cdc allergies among children spikes 50 between 1997 and 2011, costing nearly 25 billion a year. There is no clear answer as to why allergies are on the rise. Many are turning to oral immunotherapy, so it remains controversial. A Biopharmaceutical Company is offering these trials. The ceo joins me in the studio to explain. How does it work . It is essentially taking peanut flour and introducing it into patients in small increments over a long period of time, so they build up immunity. Emily you say it works 80 of the time . The phase two trial shows that the patients actually that make it through this therapy and do not have tolerant issues, essentially 100 of the patients become desensitized. Emily why is this not fda approved . Informallyeen used in the past, but about five years ago the fda, nih advocacy groups got together and said, we need to do something about making it more formal. Emily what does the fda want you to prove . Something about the ratios of the peanut proteins . They want us to formally approve in randomized controlled trials, that if you slowly peanutenough flour flour to patients over time, they are in fact attested from accidental exposure to pants that occur in the environment all the time. Emily your competitor makes a peanut patch. Why is this better . We believe the approach is better because it works faster, and we believe the speed is something extraordinarily important to the patient population. We will see at the end of the day if either therapy ultimately results in something that will be a longterm response. Emily there are new studies out that support tackling Food Allergies early. Getting peanuts or you nuts to your kids, yet parents still dont do it. It can be paralyzing to have conflicting information. What are we really supposed to do . Emily it is kind of a sea change cracks it is kind of a seachange in the approach of how children are introduced to things like peanuts. You need to speak with your physician. The physician is the one that is closest to the health of the child. Like all the other professionals, they are just beginning to pick up on how to manage this in a way that is different than what has been done in the past. Emily your stock is down 40 . Why arent investors buying . Certainly, the global kind of upside down situation we are we are a drugow, company that has one major drug and development. The industry often waits for very specific milestone events, usually tied to the outcome of clinical trials. We expect our outcome took take place sometime in 2017. Emily certainly a fascinating approach to a really difficult problem. Thank you very much. You can find more of the pharma coverage on the bloomberg on bloomberg. Com pharma. Coming up, our Cloud Computers ready for regulatory change . We ask box ceo aaron levie. In the u. S. K us out on serious xm and at bloomberg. Com. This is bloomberg. Mark im mark crumpton. You are watching bloomberg west. The leaders of the United States, canada, and mexico held a summit to reaffirm cooperation on security and trade. President obama advised against shutting off from the world. President obama and the prescription of withdrawing from trade deals, and focusing solely on your local markets, that is the wrong medicine. Mark the three leaders warned against protectionist and isolationist sentiments. Cia director John Brennans warning of an istanbul type attack here in the u. S. He made his comments during an appearance at the council on foreign relations. I dont think we should ever get used to it. What we have to do is redouble our efforts to uncover what they are doing, stopped them in terms of carrying out the attacks, but also go to the source, which is those who are directing and orchestrating these attacks. Mark earlier this month, director brennan told congress the u. S. Battle against the Islamic State has not yet curbed the groups global reach. Eu leaders are calling for an toerly british withdrawal, minimize instability and learn lessons from the uks political earthquake. The government cheese took the historic step of leading today without the u. K. For the first time. Im mark crumpton. Allen, with apaul look at the markets. Good morning. Good morning. Lets start in new zealand as usual, open for 30 minutes. Looking very good indeed, up almost 1 . Another strong lead from the u. S. , as there is speculation the European Union will seek to minimize the impact of britain leaving. I. S. Executors looking positive isx looking positive. To see an increase of 6. 7 on the year. Nikkei futures also showing strength, but take a look at the yen. It has been creeping up for months. It is expected to impact industrial production, due out in a couple of hours time. The main figures are expected to show a. 2 decline from may. A few minutes ago, china released its beige book, showing strength in the second quarter. A sharp reversal from the weakness in the past six months. Services and construction, serving a return to moderate growth in china. Im paul allen for bloomberg tv, from sydney, australia. Emily this is bloomberg west. Im emily chang. Patients surprised though to leave the eu could have an impact on cloud computing. Cloud services concurrently shift data across europe without interference. Operators may need to follow separate regulations from the eu and u. K. Jenny is now, the ceo of joining us now, the ceo of