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Dow Seeks Rebound after Worst Point Drop in History; Businesses Facing Challenge During Pandemic; Spain Closes its Border; France on Lockdown; New Coronavirus Cases in Italy. Aired 9:30-10a
Aired March 17, 2020 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LAUREN FOX, CNN CORRESPONDENT: And that is because last night Steve Mnuchin went and talked to some of the Senate Republicans and he was trying to encourage them to support this piece of legislation because, remember, there was some concern from Senate Republicans that this bill might have been too robust, might have been too Democratic for Republicans to support. We also expect that Steve Mnuchin will unveil and launch today $850 (INAUDIBLE) he wants now.
POPPY HARLOW, CNN ANCHOR: OK, Lauren, appreciate that reporting.
We do have the open on Wall Street. And, look at that, the market is up after such a precipitous decline yesterday.
Christine Romans, our chief business correspondent, is standing by.
Let's begin, though, at the exchange with Alison Kosik.
So, what's the rally for?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, you know what, I think this is sort of a normal function of the markets after -- after stocks got a real beating yesterday. As you said, the Dow plummeting 3,000 points. That drop even stunning some seasoned investors that I've been talking with.
If you look at where the Dow closed yesterday, it was only about -- a few hundred points away from where it was when President Trump was inaugurated. So more than three years of gains essentially wiped out.
I've been talking with traders on the floor today. They say the big problem with this is that they are trading in the dark. They can't get any guidance right now from companies. It's hard for companies to figure out how much of a cost, how much damage the virus is going to do to their businesses, to the U.S. economy, and it's hard to price stocks in this uncertain environment.
Once again, we are seeing green arrows. That is a positive sign. Some of it could be some optimism that measures are moving their way through Congress. But don't be surprised because this market is very fragile. Don't be surprised to see some red arrows during the day. Poppy.
HARLOW: Of course, Alisyn, thank you very much.
Christine, let's talk about all of this.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Sure.
HARLOW: So, when you have an economy that is so reliant on consumer spending, not just on what we need, we were talking about this earlier, but on all of the excess --
HARLOW: And that collapses, as it is right now, then what, long-term? The market may rally a little bit today, but --
ROMANS: Look, this is a really unknown situation. We've hit the pause button on the American economy and we're assuming that when we lift our finger off that button, the economy's just going to come back. But we don't know what that's going to look like.
So you have small business, for example, the tip of the spear.
ROMANS: Think that they're paying their rent, they're paying their vendors, they're paying their employees and no one is coming. All kinds of different small business. So they're on the very front lines. I think workers and small business are on the front lines of this.
And then you've got those bigger companies that have bigger bank accounts, but they're also going to Washington asking for help. We're hearing from big industries who say they need help.
HARLOW: What should people do with their savings? They've got their 529s --
HARLOW: Their 401(k)s, the IRAs. What do they do? Not touch it?
ROMANS: So if you have a kid who's going to college in the fall, you should think about taking money out of your 529 or --
ROMANS: Maybe not taking the money out, but switching the 529 to more neutral, right?
ROMANS: Because you'll take the money out when you're using it to pay for your college tuition.
If you are right at retirement, you shouldn't have all your money in stocks. And it's something we say all the time, and maybe some people have been -- but baby boomers in particular have been lulled into this because of the big gains of the past few years.
But you should think about making sure you have nine months of your bills that you can pay in an emergency. You should take money out of the stock market and have emergency funds if you need to and then make sure that you're rebalancing for how much time you have till retirement and what your risks are.
HARLOW: Let's talk about the bill -- the Family First Bill.
HARLOW: It's expected to pass this week. And the change overnight. Because as I understand it, "The Wall Street Journal" reporting is that now they're looking at limiting that -- what was going to be 12 weeks of paid family or sick leave for anyone who had to be away from work to take care of a kid or to quarantine or any of that is now going to be scaled down and it would only apply to people whose child is home from school sick and not all the first responders.
ROMANS: Right. Right. So restrictions on paid leave is not something that worker advocates want to see and some Democrats want to see at all because the underlying point of that is that you need to incentivize people to stay home if they are sick and make it easier for them to stay home if they are sick so that we don't spread this thing. It's a public health situation.
ROMANS: Also, it doesn't pertain to future crises or future health pandemics, just this one. And so there are people for years who have been working on getting paid sick leave who are really bitterly disappointed. It's something, but it's not as much as they want.
Some of the analysis was it will cover essentially about 20 percent of workers. But for small businesses, I was talking about how small business is the tip of the spear. I feel for small businesses and you want to make sure that there are exemptions for them so they don't go out of business where they have to lay off their employees and they have to pay for sick pay.
HARLOW: Yes. Right. And there are some exemptions for them here --
ROMANS: There are.
HARLOW: But then who backfills that, right? If they can afford to pay it, who's going to pay it for their employees?
ROMANS: I will say, when you have a crisis like this, it really does sort of reveal the underbelly of what was a very strong American economy.
HARLOW: For sure. For sure.
Christine, thank you very much. Appreciate it. Alison, thank you, at the stock exchange.
We were just talking about these small businesses. This is so horrendous for them. The harsh realities of the coronavirus outbreak. How they're struggling it stay afloat day by day.
Our special live coverage also of Super Tuesday part three. We have that this afternoon. Some key states voting today. It's right here, 4:00 Eastern, on CNN.
HARLOW: Well, a little bit of good news. Some financial relief is on the way for more than 6,000 families in the Seattle area hit so hard by this pandemic. Mayor Jenny Durkan is providing $800 supermarket vouchers to the families most in need, but it's not everyone and most businesses aren't as lucky, especially the small businesses.
CNN's Vanessa Yurkevich is live this morning in Bayonne, New Jersey.
They really are sort of the peak of this, the small businesses feel this bluntly. What can you tell us?
VANESSA YURKEVICH, CNN CORRESPONDENT: That's right, Poppy. Small business are arguably going to be the biggest hit by this really big crisis that we're dealing with right now.
Small business owners looking at their employees and their bank accounts wondering what's next.
We visited with two small business owners just a short ways away from where we are here in New Jersey to find out how they're coping.
LARRY BIRNBAUM, OWNER, EPIC AND THE LIGHTBULB STORE: It's scary. It really is. I wouldn't want anybody to be in this position.
YURKEVICH (voice over): Larry Birnbaum says he's losing $100,000 a month.
BIRNBAUM: I've never seen anything like this where just everything grinds to a halt.
YURKEVICH: The factories in China, where he gets his wholesale lightbulbs, are closed because of coronavirus.
YURKEVICH (on camera): What percentage of your business comes from China?
BIRNBAUM: Ninety-five percent.
YURKEVICH (voice over): President Trump announced low interest small business loans.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: These low interest loans will help small businesses.
YURKEVICH: As part of a $50 billion economic aid package.
YURKEVICH (on camera): Would that be of interest to you?
BIRNBAUM: Possibly, but, again, you just said the magic word, interest. So I'm paying interest on that loan and I'm paying interest on the credit line loan and it just depletes everything.
YURKEVICH (voice over): The National Retail Federation revised its initial assessment of the virus' impact, saying it's, quote, expected to have a longer and larger impact on imports, and major U.S. retail container ports than previously believed.
And a global slowdown will affect small and midsized companies more acutely. Birnbaum worries about his nine employees.
BIRNBAUM: I will take out of my savings and pay them, you know, until the day that there's nothing else to go.
YURKEVICH: Two miles away is MDR Supply, another wholesale business with 35 employees. Down to their last reserves.
YURKEVICH (on camera): How long before this gets sent out?
RON MALKENSON, OWNER, MDR SUPPLY AND ASK WHOLESALE: Forty-five to 60 days is how long this product will last. Yes.
YURKEVICH: And then what happens after that?
MALKENSON: We hopefully get more product or we're in trouble.
YURKEVICH (voice over): Ron Malkenson sells to construction companies and contractors. He's ordering as much additional product as he can before it's too late, to the tune of $70,000 and climbing.
MALKENSON: I'm ordering ahead of myself, having to stretch myself, and just order from as many different vendors as I can knowing that in the future I may not be able to get goods for a period of time.
YURKEVICH: Malkenson is hopeful coronavirus won't mean an end to his business. Birnbaum is not as sure.
BIRNBAUM: There's no light, like I said, at the end of the tunnel.
YURKEVICH: Now, small businesses do not have rainy day funds. They don't have contingency plans like some of the bigger corporations that can maybe weather this a little bit more. But, Poppy, those two business owners right there, combined in
business over -- almost over 100 years and they are not alone. Hundreds if not thousands of small businesses, Poppy, facing this same reality of what to do next.
HARLOW: Yes. And the trickledown of that to their families and everyone that relies on the income from those businesses, their employees.
What about the supply chain, because there's been so much concern over the strength of the supply chain. What are you seeing?
YURKEVICH: Well, for those two business owners, the supply chain has kind of stopped in China because they can't get stuff out of their factories.
YURKEVICH: But where we are here today, we're at a food distribution center. So this is the middle man between the producer of the food and the grocery stores. What we're seeing here is a 50 percent increase in demand. You're going to see these trucks going in and out of here all day.
The owner of this distribution center says that they can meet the demand, but they're just asking people to be patient. It's a little bit slow, they're trying to catch up, but they don't want to worry people. When you're seeing baron shelves, it just means that they're catching up with this incredible demand, especially in food that we're seeing right now, Poppy.
HARLOW: Vanessa Yurkevich, thank you for that reporting all around.
Just ahead, more disruption in Europe from the coronavirus pandemic. Borders now closed in Spain and France is requiring people to have a form to even leave their homes.
HARLOW: This just in to CNN, doctors in Europe say they are experiencing, quote, critical shortages in medical supplies amid the coronavirus pandemic. This is according to an official this morning at the World Health Organization. This is pretty drastic new measures that are being undertaken to fight the virus all around the world.
The European Union is voting today on a proposal to close all of their borders. Spain, of course, shut its borders late last night. There are some exemptions, including Spanish nationals trying to get home.
In France, a national lockdown has taken effect. Just about two hours ago, President Macron declaring war on this virus, telling people they have to stay in their homes for at least 15 days. And Italy reporting more than 3,000 new cases yesterday. Three thousand new cases yesterday in Italy alone. The total confirmed cases number there, 27,900.
Let's begin with our journalist Al Goodman. He is in Madrid.
So the border is closed now.
AL GOODMAN, CNN MADRID CORRESPONDENT: Hi, Poppy.
That is correct. And what you have -- and one -- another one of the exceptions is that there can be movement of goods across the borders. But for Spain, this is a huge thing, the closing of these two borders, because 22 percent of its exports, $65 billion worth of goods, goes from Spain to France, its top export destination, and Spain to Portugal, its number three export destination.
So you have transport of goods getting through these borders, but it takes longer because now there's border police and military people, so that's a higher cost. And the worst thing for the Spanish market and the French now and the others is the dampening of consumption because although you can go to buy food and medicine and a few other items that are deemed to be essential, basically the general consumption market is way down. So that is what is a major hit on not just the Spanish economy but these two borders of its neighbors.
But what we're starting to see spreading right across the European Union. The same kind of situation in Italy and in Spain, now what you've just mentioned, France. Portugal also very worried.
Now, I'm here on the Grand Via (ph), which is one of the principal arteries of Madrid. You can see the traffic, which would normally at this hour be thick, and there -- this is like Times Square practically in New York, OK?
You'd have just a sea of people basically everybody down. We're expecting word from the Spanish prime minister here at the top of the hour to announce what's expected to be some economic relief for the Spaniards who are hit by the coronavirus, which might include, according to reports, a suspension on mortgage payments.
Back to you, Poppy.
HARLOW: Wow, Al, appreciate the reporting from Madrid.
Our Jim Bittermann is live for us in Gilles, France, where residents have to fill out a document to go outside. Is that -- is that the same across France, in Paris, for example, they can't leave their home without a form?
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: : All across France you have to fill out this form, a little form that you can download from the Internet. And basically you could go out for like, the same way in Spain, for food and for medicine. And if you have an essential job, it basically says if you are testing, the fact that you have some kind of reason to be out. And you have to be out alone. Now, you can go out and you can walk your dog, for example, but you
can't go out with other people walking the dog. So you can't play football. You can't do those type of things. You can get together with your animals, your pets and your wife, but basically you're not supposed to get together with any other people.
We've seen here, in my little village where I'm self-isolated outside of Paris, cars -- there's one now going by a little bit today, but basically it's usually a solo driver. They're usually going to food store or something. You've got to drive about five miles from here to get to the closest food store. So people are out and about because they have to be, but they have to prove it to police.
Now, they've mobilized 100,000 police across the country to make sure that people obey this. There's 150 checkpoints in Paris alone, Poppy.
HARLOW: Checkpoints. I mean we're looking, Jim, at pictures of Paris from yesterday and the city of lights is dark. It is -- it is unbelievable.
Thank you very much, Jim.
Let's go to our CNN contributor Barbie Nadeau. She joins us in Rome.
Barbie, I cannot believe those numbers. More than 3,000 new cases in Italy overnight.
BARBIE NADEAU, CNN CONTRIBUTOR: That's right. And, you know, we're going into our second week of lockdown here and it's dire. The people are getting very, very frustrated. People can go out, as Jim was just mentioning, to get their groceries, to walk their dog, to go, you know, to the pharmacy.
But the novelty has pretty much worn off and people are tense. You know, we saw early on people singing from their windows and things like that. That's decreasing a little built because the numbers are going up and people are wondering if this lockdown is worth it.
And now, you know, the authorities are saying we may not see the peak for another two weeks. We may not see those numbers stabilize and go down. So every single day, the more they go up, the bigger sacrifices that everyone living here, including our crew, you know, you've got to think, I hope this is worth it because the people are starting to really, really, really feel it here, Poppy.
HARLOW: My good. Barbie, thank you very much.
Also, America all but shut down. Bars, restaurants, stores, gyms in cities across the country are closed. Some leaders going so far as telling residents to shelter in place. Stay with us for the latest.
HARLOW: Good morning, everyone. It is the top of the hour, 10:00 Eastern, 7:00 a.m. out west. I'm Poppy Harlow. Jim Sciutto is off today.
And a major shift in the tone of the president -- major moves also by state and local officials overnight, cracking down as this coronavirus case and crisis grows. The president moving away from playing down the virus and closer to the reality that it could put millions of American lives at risk, it could drag out for months and it could spark a deep recession. The president is now backing the guideline that Americans steer clear of groups larger than ten people at all times.
In northern California this morning, it is now an order. Seven million people, San Francisco included, being told to shelter in place, told to stay home except for essential trips. And New York City's mayor tells CNN he is thinking about doing just the same.
This as Ohio's governor has defied a court order and canceled the state's primary altogether today, moving it to June after the Ohio health director ordered the polls closed over the pandemic threat.
The growing number of crackdowns is coming as U.S. health officials warn, and this is a stark warning, that the federal stockpile of medical supplies is not adequate. That means the U.S. doesn't have enough masks or gowns or gloves for what is coming.
Let's begin this hour with our chief medical correspondent, Dr. Sanjay Gupta, who has more on how prepared or are or are not.
DR. JEROME ADAMS, SURGEON GENERAL: We're at a critical inflection point. We have the same number of cases now that Italy had two weeks ago, and we have a choice to make.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice over): This is the era of coronavirus. Hospitals overcrowded in places like China and Italy, stretching resources thin and putting patients at risk. And the concern is that in a matter of weeks that could become the United States.