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First Move with Julia Chatterley
President Trump Confirms The Trade Deal Is Intact After His Adviser Sparks Fears That It Could Be Off; Boris Johnson Announces Major Reopening In July; The Former Wirecard CEO In Police Custody Over The Missing Billions. Aired 9-10a ET
Aired June 23, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:26]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here's your need to know.
China confusion. President Trump confirms the trade deal is intact after his adviser sparks fears that it could be off.
Lockdown loosening. Boris Johnson announces major reopening in July.
And arrested development. The former Wirecard CEO in police custody over the missing billions.
It's Tuesday. Let's make a move.
Welcome to FIRST MOVE once again. Fantastic to have you with us as always. Yesterday, New York City, today, the U.K. Prime Minister Boris Johnson
further easing COVID-19 lockdown restrictions, as I mentioned, which of course means New Yorkers can now get a haircut, Brits can get that all-
important pint. Details of that coming up.
But first, U.S. futures have been on a trade deal related tumble overnight after headlines, as I mentioned there, that suggested that White House
Trade Adviser Pete Navarro thought the trade deal might be off. The good news is, as you can see, futures have recovered.
Peter Navarro said his comments were taken wildly out of context, and President Trump also weighed in and calmed nerves, too. More context on
this coming right up.
Asian stocks meanwhile recovering their early session losses, too. Hong Kong actually was the outperformer, up as you can see, more than 1.5
percent, thanks in part to a five percent rally in Tencent, which actually hit record highs overnight. The internet and online gaming giant clearly
benefitting from lockdown restrictions, too. Its shares, in fact, up more than 50 percent from the March lows. It's now Asia's most valuable firm.
Sentiment also getting a boost here, too, from factory activity data from all around the world. Australian manufacturing is almost in expansionary
territory once again, and Europe, France and the U.K., are back in expansion mode, too.
Germany almost there as well and a strong performance in the European session, too. Bulls point to encouraging numbers like this to justify the
rally that we've seen in stocks since we hit the three-month lows exactly three months today, in fact.
Taking a look at the U.S. markets here, since then, the S&P has risen by some 40 percent, but it's not just about stocks. Oil prices have trebled.
Copper prices are up 30 percent and if we look at the foreign exchange markets, things like the Norwegian kroner have gained 20 percent against
the dollar. The Aussie dollar, some 18 percent versus the U.S. dollar and that's a lot of gains.
Meanwhile, President Trump is promising the China deal is still on. He stepped in following this exchange on Fox News.
(BEGIN VIDEO CLIP)
MARTHA MACCALLUM, FOX NEWS CHANNEL ANCHOR: Do you think that the President sort of -- I mean, he obviously really wanted to hang on to this trade deal
as much as possible and he wanted them to make good on the promises because there had been progress made on that trade deal. But given everything
that's happened and all the things you just listed, is that over?
PETER NAVARRO, DIRECTOR OF THE OFFICE OF TRADE AND MANUFACTURING POLICY: It's over. Yes. I think that -- here's, I think, the turning point. They
came here on January 15th to sign that trade deal, and that was a full two months after they knew the virus was out and about.
(END VIDEO CLIP)
CHATTERLEY: Christine Romans joins me now. I have to say, Christine, when I watched that interview back, I think he was taken out of context, too, but
the President confirming the trade deal is on.
The reaction in stock markets, though, suggested to me investors are coping quite frankly with as much as they can. The idea that the trade deal might
be off was just a little bit too much last night.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: You know, it just shows you how sensitive, how touchy investors are to any kind of idea
that that Phase 1 Trade Deal could be going in the wrong direction.
And I agree with you, I've listened to that exchange over and over again. You know, she asked him about progress in implementing the trade deal, and
he said, yes, it's over. I think he meant progress is over, and when he gave a statement later, he said, you know, look, he was speaking of the
lack of trust between the United States and the Chinese Communist Party after the lies, he says, that they gave about the origin of the virus.
So, he's trying to clean it up. The President making it very clear that this deal is intact. Robert Lighthizer, who actually inked this deal, of
course last week, in front of Congress, he seemed very optimistic and confident that this was going to get done.
But you know, when you talk to agriculture groups, they're worried. Will the Chinese be able to step up Ag purchases the way they said? Will there
be the enforcement of some of these mechanisms the way they promised in the middle of a pandemic? That's why the market is so nervous because they are
not sure.
[09:05:13]
CHATTERLEY: And of course, it's an election year, and we know whichever political party you look at here, China bashing, criticizing China flies
with the public, and certainly in Congress as well.
Now, speaking of Congress, we also had Larry Kudlow suggesting that we could see, by the end of next month, some deal on Congress to provide
further support. That's good news here.
ROMANS: And that's one thing that the market wants to hear about as well. What does that support look like? The Democrats would like to see state aid
for sure.
I mean, they're coming down, many of these state governments right now, I mean, they've got to figure out if they're going to be having massive
furloughs and layoffs on the state level, these state employees. These are -- well, they are voters, right? They're people who work in fire
departments, people who work in police departments, people who work in schools, people who clean the streets. So these are important, important
political considerations to make here.
The Democrats are really pushing that aside. The President would like a payroll tax cut or payroll tax holiday. Republicans would like to get rid
of the $600.00 a week extra in stimulus money for people who are out of work, but maybe replace that with something else.
So, the contours of the discussion are there. Larry Kudlow seems optimistic that they will be able to hammer something out soon. I think the bottom
line for investors and for markets is that more is coming.
CHATTERLEY: Yes. You can't control the health risks, but at least on the stimulus side, if you can see more coming, that will help here too, for
individuals as well, never mind investors. Christine Romans, thank you so much for that.
ROMANS: Nice to see you.
CHATTERLEY: All right, South Korea has been credited with keeping the spread of COVID-19 relatively limited, but now officials say a second wave
of infection is breaking in the capital, Seoul.
Health authorities say that although the numbers are still relatively low, they've been rising since last month after a national holiday. Paula
Hancocks is in Seoul with all the details.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Countries around the world have been warning of a possible second wave of coronavirus in the autumn or
in the winter, but South Korea says that they believe they are currently experiencing their second wave.
Now, Korea's C.D.C. did clarify somewhat this Tuesday, saying that they're using a different standard to that of the World Health Organization, the
W.H.O. They're looking at regions and the flow of spread.
So, what they've said is they believe their first wave was from February to April. That was mostly in the southeast of the country. And then, with mass
testing, with contact tracing, those numbers decreased dramatically. They were experiencing ten or less new infections every day for some time.
But then they say the second wave, they believe, started after the May holiday when social distancing rules were relaxed and that is why we are
seeing an increase now.
Now, there are a number of regional outbreaks, they say, not a large scale infection, but different clusters around the capital. We've seen them in
logistics centers, in schools, in churches, and in many different areas. Officials are struggling to try and stop these clusters.
In fact, we just heard from Seoul's Mayor, saying that he is trying to figure out if strict social distancing needs to be put back in place to try
and stop this second wave.
He has also said, on Monday, that he believes that if there are more than 30 local transmission cases within Seoul itself for three consecutive days,
then strict social distancing does need to be put back in place.
Now, one other cluster to mention as well in South Korea, a Russian flagship docked off the southeastern port of Busan on June 21st. Now, 16 of
21 of the Russian crew have since tested positive for coronavirus, and there's more than 170 South Korean port workers in that area that are now
being tested as well, as they are believed to have come into contact with them.
Paula Hancocks, CNN, Seoul.
(END VIDEOTAPE)
CHATTERLEY: Okay, let's move on. The British Prime Minister has set the end date of a three-month COVID-19 lockdown in the U.K. from July 4th. The two
meter rule will be replaced by one meter plus and people will be able to go to the cinema, get haircuts and this is also key, as we've mentioned, go
out for a pint.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH PRIME MINISTER: Mr. Speaker, I can tell the House that we will also reopen restaurants and pubs.
GROUP: Hallelujah.
JOHNSON: All hospitality indoors will be limited to table service, and our guidance will encourage minimal staff and customer contact. We will ask
businesses to help N.H.S. test increase responds to any local outbreaks by collecting contact details from customers as happens in other countries,
and we will work with the sector to make this manageable.
(END VIDEO CLIP)
CHATTERLEY: Anna Stewart joins us now. Anna, the Prime Minister said the hibernation phase is over. These are pretty dramatic steps and they kick
in, I believe, early July.
[09:10:06]
ANNA STEWART, CNN REPORTER: Fourth of July and most of these measures only apply to England rather than the whole of the U.K., but from the Fourth of
July, a huge reopening for all sorts of businesses, largely in the hospitality sector that have been shut for over three months now.
Now, the list includes things like pubs, hotels, hair salons -- hooray -- and cinemas, all able to reopen, crucially for these businesses and many
others, also the rule on social distancing is being relaxed from two meters to one meter plus.
Now, as you heard there from the Prime Minister, there will be measures that need to be brought into place for many of these businesses to keep
safe for their customers, for their staff, whether that is Plexiglas partitions or facial coverings, and not every business is -- not every
business -- I am sorry, yet able to reopen.
The ones that are still shut -- gyms, swimming pools, nightclubs, anywhere really where it's hard to maintain even one meter of social distance.
Now, in addition to this, Julia, there was also an announcement for socializing in England. Two households can now meet up inside -- inside a
home, overnight stays are allowed, and you don't have to just pick one household. You can have different ones each day. You don't have to pick
your favorite side of the family so that will be very welcome news.
Of course, all of this came with a massive warning from the Prime Minister. Lockdown can be re-imposed at a local or a national level if it is needed,
if there are big flare-ups, if that transmission rate for the virus goes too high -- Julia.
CHATTERLEY: Absolutely. I mean, it is important to get the economy restarted and get people back out there, but you have to remain flexible if
we see cases rising and that is happening all around the world, of course.
Anna, I noticed that we give you all the toughest jobs, you're outside a drinking establishment there. Have you been speaking to people who were
going in there and what are they saying about their confidence levels, their willingness, actually, to be inside rather than sitting outside?
STEWART: I know, Julia, once again, in the name of journalism, I have gone to the pub and it's actually my local this one, in London, The Black Lion
Pub, and it's been reopened for a few weeks now, just for takeaway pints. No one is allowed to sit inside or in the beer garden, and it's done really
well.
There's been huge demand because we're right by the riverside where people can walk along with their pints. So, these are the people I thought would
be very keen on some of the reopening measures.
I have just spoken to them, we haven't got the sound in time, but I can tell you, it was actually a really mixed response. Plenty of people saying
they wouldn't mind eating outside a restaurant, they're still not sure about going inside. Plenty of people said absolutely not to a cinema trip.
So, even with these new measures, even though the government says it's okay, the problem for the sector will be the consumer appetite, and
already, we have heard from U.K. hospitality today that even with a relaxing of measures in August, a key month for this sector, they expect
demand to be down at least 65 percent -- Julia.
CHATTERLEY: Wow. Yes, digging themselves out from this steep, steep decline there. Anna, thank you so much for that. We will continue to track
progress. A hairdresser next. What do you think? Maybe.
STEWART: I can't wait, Julia. Get me in there.
CHATTERLEY: Thanks, Anna. All right, let's move on to some new developments in the Wirecard scandal.
This just in, prosecutors in Germany say the former CEO, Markus Braun will be released on bail. He was arrested on suspicion of having inflated the
company's balance sheet.
Fred Pleitgen is in berlin. Fred, extraordinary story, admission, of course, from payments from Wirecard this week that the missing $2 billion
may never have existed at all. We were talking about this on the show yesterday. What more do we know about this arrest?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, we do know that he is going to be released on bail, you're absolutely right. He
apparently has to post five million euros in bond and he has to check in with the police every week.
Now, the prosecutor in Munich where all this is taking place said that they don't believe that there's a flight risk because he, in fact, turned
himself in and apparently that happened last night.
Of course, we only learned about the arrest this morning, but apparently the arrest warrant was issued last night and he also turned himself in last
night. And I mean, of course, this is a gigantic case, as you've noted. This is absolutely extraordinary with almost two billion euros, a little
over $2 billion, apparently simply just not existing somewhere in the financial markets in the Philippines where the authorities there say that
money simply isn't there.
Now, Markus Braun has resigned on Friday as the CEO of that company, the Chief Operating Officer was also sacked over the weekend and the
authorities who are investigating now say they do believe that there could be others involved in this as well, so certainly it's a gigantic issue, and
I think, Julia, you know, we know what a big company this is for Germany, some of our viewers may not.
I mean, this is one of the 30 biggest companies here in this country. It actually replaced Commerzbank on the DAX a couple of years ago. And I can
tell you from just having checked here, the local media and also some of the press conference that the German Economy Minister, for instance, is
absolutely irate, Mr. Altmaier. He is not someone you want to get on the wrong side of.
He said this is something that absolutely needs to be clarified, a huge embarrassment for Germany as a financial center and certainly also for
Germany as far as oversight is concerned.
[09:15:09]
PLEITGEN: In fact, Germany's oversight body, BaFin just issued a statement, also acknowledging that they made big mistakes, apparently, in the
oversight of this company, but they also say that auditors failed and the Supervisory Board failed as well.
So, yes, I mean, this is -- what we're witnessing right now is really almost a financial market earthquake here in this country, trying to deal
with the fallout from what's going on there at Wirecard -- Julia.
CHATTERLEY: Yes, a web of strategic failures here and many questions that still remain unanswered. Fred, great job. Thank you so much for bringing us
up to speed with that story. Fred Pleitgen in berlin there.
All right, we're going to take a break here on FIRST MOVE. Plenty more to come. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York where we're heading for a positive open for stock markets this morning following gains
for stocks yesterday in Monday's session with the NASDAQ, in fact, hitting fresh record highs as you can see, gaining more than one percent yesterday,
it spiked, in fact, more than 50 percent since plunging to multi-year lows three months ago today.
We can chalk it up to the extraordinary, an ongoing crisis support from the Federal Reserve and other global Central Banks since the start of the
global pandemic, at least in part, the Fed's multitrillion dollar asset purchase program has injected crucial liquidity to credit markets, perhaps
even preventing a second economic depression.
Some fear this unprecedented support could fuel asset bubbles and worsen economic inequality. The Fed arguing that its actions have helped a wide
range of Americans.
Plenty to discuss this morning and I'm very excited to say we're joined by Mary Daly, the President and CEO of the Federal Reserve Bank of San
Francisco. Mary, fantastic to have you on the show, and a very early good morning to you, too. I appreciate you waking up so early to speak to us
this morning.
MARY DALY, PRESIDENT AND CEO, FEDERAL RESERVE BANK OF SAN FRANCISCO: Of course. Good morning.
CHATTERLEY: Good morning. There's been plenty of column inches dedicated in recent weeks to the rise that we've seen on Wall Street and the criticism,
I'll call it that that actually the Federal Reserve's actions have done more to support Wall Street than Main Street, as we call it, and the real
economy.
What's your view on that? And what context do we need to understand?
[09:20:19]
DALY: Well, that's a great question. The context, the main context, is that we're all interrelated. There really isn't this bright line that separates
Main Street from Wall Street, and let me give you an example.
So, we lowered the funds rate as you know to near zero, but that decrease in the funds rate and the interest rates only gets to mortgage interest
holders, mortgage borrowers, when financial markets work, so if we don't repair the financial markets, ensure they have liquidity, they can't pass
along the interest rate changes to households and businesses that need them the most.
So, in this way, we're really all connected in our support for the economy, supports everyone.
CHATTERLEY: So, it's a case of fixing financial markets first and then the transition mechanism to getting money and the benefits out to ordinary
individuals work better, too.
DALY: Right. I think of it as the plumbing of the financial system. If we fix the plumbing and ensure it works, then people get the resources that
they need, and that's important right now.
CHATTERLEY: You know, added criticism here, though, is that it -- even inadvertently -- fuels inequality, the wealthiest are those that own
stocks, their own financial assets and beyond. It's the weaker that don't, and they're still waiting in many cases for the money and they're going to
continue to struggle, given the amounts of jobs that we've seen lost.
Even inadvertently, does the Federal Reserve and its policies fuel and exacerbate inequality?
DALY: Not in my judgment. The way I see it is, if you go back to right before the crisis started, the health crisis, we were in the longest
expansion in U.S. history, and that expansion was lifting so many people into employment, out of poverty, and allowing them economic mobility, and
that's ultimately the Fed's number one job.
Right now, we're providing emergency support, but our number one goals are to do a mandate goals of full employment and price stability and
ultimately, our job is to ensure that every American who wants a job can get one. So, that's where our eyes are set. That's where our minds are
headed, but right now, of course, we're fighting a global pandemic, and so it's emergency support that we're offering.
CHATTERLEY: It's a great point that you raise as well, the Federal Reserve has one job and you're not alone in providing support. Congress also has to
provide their version of support at this moment, too.
There are those analysts out there that believe if the Congress doesn't step up and do more to support the economy, that we could see some kind of
downturn beyond the initial bounce back, a double dip recession. Do you share that concern?
DALY: Well, what I see out there is just a tremendous amount of uncertainty. The way that we have to live right now is that the virus
determines the speed at which the economy is allowed to recover, so we're seeing some early signs that as we lift restrictions, people go out, and
that's really good news. The momentum of the economy is still there. But we could have to go back in if the virus resurges or we could have to remain
socially distant and that can undermine confidence.
So, right now, there's this uncertainty, and I think both the Federal Reserve and Congress are waiting to see in the next couple of months what
happens, and then, you know, I've been impressed with what Congress has done and I know the Federal Reserve, we're prepared to do whatever we can
to ensure that we build a bridge long enough to get us over the crisis and on to economic growth.
CHATTERLEY: Does doing whatever you can include having discussions about the possibility of buying equities, if necessary? Is that debate being or
has it been had?
DALY: Well, let me talk through how we actually approach this, you know, from my vantage point. So, we, as you noted, we want to make sure that
financial markets work, and we provide liquidity.
So, we started with bond asset purchases and then we go in and we say, okay, what else is not working, and how do we treat those? And so going
into the corporate bond market is really about ensuring that our largest businesses have the liquidity they need to fund themselves so that we don't
lose another group of jobs that we could save simply by providing liquidity, and that's how we think about opening our facilities.
So, the discussions we're having about are where is the plumbing of the financial system still in need of repair? And that's how we decide.
CHATTERLEY: So, if I infer from that, then the last thing you need to be doing right now is buying equities, given the bounce back that we have
seen. It was about making sure that plumbing in the bond market, for example, and to your point, access to liquidity for companies was the
greater issue here. And that's what you tackled.
DALY: That's what we tackled because we have, ultimately, we're the lender of last resort. We have lending powers, not spending powers, so our job is
to ensure the free flow of credit by making sure that financial markets work and that's what we focused all of our attention on and so far, what
you're seeing is the repairs are taking place. The financial system is working in the way that we would hope, and it is getting the money to the
people who need it the most, households and businesses.
[09:25:26]
CHATTERLEY: During this pandemic, companies have raised a record amount of debt and again, that's raising questions in certain quarters of the Federal
Reserve fueling a corporate debt bubble. Any concerns about that from the Federal Reserve?
DALY: So, if you think about pre-COVID, we were already watching leverage in the corporate debt market, and so that was something we came into, and
companies that are better positioned and didn't acquire all this debt are going to be better positioned to survive the pandemic and emerge strong
after the pandemic is over.
But of course, right now, I really want to draw our attention back to the idea that we're providing emergency relief to build this bridge and any
time a company fails, any time a business fails, those are jobs that don't come back and that's -- our key priority is try to ensure that every
American has an opportunity to keep a job if it's possible and be bridged over the job loss if we can't keep that business afloat.
So, keeping businesses alive keeps jobs available.
CHATTERLEY: Is the biggest risk to the outlook here the health crisis and the handling of the health crisis? Because to your point, you stand ready
to do more. Congress has surprised you in how quickly and in the scale that they've managed to provide support. Is it the health crisis that is the
biggest risk to the economy today?
DALY: It is absolutely the health crisis, and this puts us in an uncomfortable position we haven't been in, in a hundred years, is that we
don't control this. This is a medical crisis, a health crisis, and so we have to just respond while public health officials manage this and we move
past the virus with either a vaccine or a mitigation strategy.
CHATTERLEY: Yes. One of the big challenges, I think, for all at this moment. Mary, I have seen you make some pretty bold statements in line with
what Jay Powell said last week in Congress when he said there's no room for racism in American society.
I just wanted to get your take, both from an economic standpoint and the uneven recovery that we're already seeing and this racial, social change, I
think, that we're seeing in this country. Where do you stand as President of the Federal Reserve of San Francisco?
DALY: Well, unequivocally, this is a bright line moment in the United States. We have no place for racism. It's not the promise we made. It's not
good for our economy. It's not good for individuals. So, it has this moral suasion. There's a moral reason for us to say no to racism, and there's
also this economic piece.
We are bridling ourselves. We're growing less quickly by not including all of our members. Think of all the talent we leave regularly on the table,
sidelined for no reason other than they don't look like us. This is an issue in the United States we have to tackle.
It's the fair thing to do. It's the best thing to do for our global competitiveness. And ultimately, I think millions of Americans are standing
up and saying, this is what we expect from our country. This is what we promised. Justice for all.
CHATTERLEY: Can business -- yes, justice for all. Can business do better? Particularly in light of the support --
DALY: Yes.
CHATTERLEY: The emergency support. Yes.
DALY: Yes, businesses can do better. We learned this, actually, in the pre- COVID period. We saw businesses reaching out to communities or individuals that they never would have given a second look to, but the labor market was
tight, so they were reaching out and what they learned is that those individuals who they might not have looked at before were valuable, were
dedicated, were loyal, and so we've already learned, and now it's just taking that learning and remembering not to, basically, learn not to
forget.
Learn that those individuals are terrific employees, really valuable community members, and if we want healthy and productive communities, we
have to include everyone, and I think businesses are prepared to do that, and we should hold all of ourselves -- public officials, businesses, our
communities -- accountable for delivering on that promise.
CHATTERLEY: Remember what you have learned and learn not to forget. Mary Daly, fantastic to have you on the show. Thank you for that.
DALY: Thank you so much.
CHATTERLEY: The CEO of the Federal Reserve Bank of San Francisco. Get some coffee and breakfast now, please.
DALY: I will.
CHATTERLEY: Good morning. Thank you. All right, the market open is next. Stay with us.
(COMMERCIAL BREAK)
[09:32:57]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stock markets are open and up and running this morning. As expected, solid gains for U.S. stocks after
some early session concerns, let's call it that, over the future of the U.S.-China Trade Agreement.
President Trump signaling that he is all well with the deal and that that's also helping boost sentiment. It certainly turned futures around overnight.
The NASDAQ once again in record territory, just in terms of the individual sectors, retailers, energy, those stocks -- sectors that will do well as
the economy improves. They're all gaining in the session today, despite those gains there.
There does remain a disconnect between cautious Wall Street firms and some of those retail investors that are enthusiastic about economic reopening or
at least enthusiastic about beaten-up stocks, let's be clear.
JPMorgan says it believes the easy money has been made and that investors should become more selective now in how they invest. Goldman-Sachs says
retail investors have done better than the pros at calling the bottom of the stock market's coronavirus selloff.
They tracked a portfolio of stocks popular with at-home traders, which is, in fact, up 61 percent since late March, while an index of shares widely
held by professional managers is only up 45 percent and the S&P, of course, is up some 36 percent.
Clare Sebastian reports on this entirely new breed of investor.
(BEGIN VIDEOTAPE)
DAVE PORTNOY, FOUNDER, BARSTOOL SPORTS: If I lose half a mil on [bleep] Spirit because they go bankrupt, so be it.
(END VIDEO CLIP)
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice over): At the beginning of May, sports blogger and social media celebrity Dave Portnoy invested a
million dollars in Spirit Airlines. He says at almost the exact same time as this news broke.
(BEGIN VIDEO CLIP)
CHATTERLEY: Taking flight. Warren Buffett reveals Berkshire Hathaway has sold its U.S. airline stocks.
(END VIDEO CLIP)
SEBASTIAN (voice over): Warren Buffett's decision, we should note was based on his view that it would take years for air travel to recover. Still, as
Spirit stock doubled over the next month, Portnoy didn't hold back.
(BEGIN VIDEO CLIP)
PORTNOY: I said Warren Buffett, that old man, he doesn't know what he is talking about. I'm better than he is. It's a fact.
(END VIDEO CLIP)
[09:35:06]
SEBASTIAN (voice over): Before the pandemic, Dave Portnoy, founder of website, Barstool Sports, was better known for being thrown out of the
Super Bowl and harassing female journalists, including a years-long campaign against ESPN host, Samantha Ponder.
He dismisses this, saying his style is to make jokes online.
(BEGIN VIDEO CLIP)
PORTNOY: Have a mil of chewy, ding-ding-ding-ding. I've always been an avid sports gambler and once corona hit and sports kind of stopped, I was
looking for something to do, something to create content with.
(END VIDEO CLIP)
SEBASTIAN (voice over): In March, he put $3 million of his own money into an E-Trade account, and came up with a name for his new trading operation,
Davey Day Trader Global or DDTG and coined a simple mantra.
(BEGIN VIDEO CLIP)
PORTNOY: Stocks always go up.
(END VIDEO CLIP)
SEBASTIAN (voice over): And for several months, the S&P 500 proved him right. As the market surged from its March lows, Portnoy both tapped into
and some believe helped fuel a flood of amateur investors into the stock market.
Commission-free trading platforms like Robinhood, E-Trade and TD Ameritrade reporting big increases in trading volume and account openings.
(BEGIN VIDEO CLIP)
JJ KINAHAN, CHIEF MARKET STRATEGIST, TD AMERITRADE: What Dave Portnoy has done is he has made investing fun. Now, just because it's fun, doesn't
necessarily mean you should take it lightly. It's money. You should take it very, very seriously. It's not gambling.
(END VIDEO CLIP)
SEBASTIAN (voice over): These investors have taken risks, including piling into bankrupt stocks like Hertz. And yet, some experts say the amateurs,
especially younger ones, were quicker to call the bottom.
(BEGIN VIDEO CLIP)
KINAHAN: Way back in March, when this first started, the cruise lines, we saw our millennial clients start to buy Carnival Cruise. The rest of our
population, you know, the more traditional, if you will, population, didn't really start to buy it until mid-April.
(END VIDEO CLIP)
SEBASTIAN (voice over): One of those millennials was Sean Cassity, a 29- year-old employee at a defense contractor, also in the past, a sports gambler. In early April, he took his tax refund and government stimulus
check and put it all into his E-Trade account.
(BEGIN VIDEO CLIP)
SEAN CASSITY, AMATEUR TRADER: A lot of travel stocks, definitely a lot of what Dave Portnoy has talked about, you know, the cruise stocks, the
airline stocks, life is going to get back to normal, like he said. You've got to just hold your half of that and when that happens, people are going
to fly again and people are going to go on cruises again.
(END VIDEO CLIP)
SEBASTIAN (voice over): So far, he is seeing a 50 percent return on his $6,000.00 investment. He follows Dave Portnoy, but says he takes a lot of
his advice with a grain of salt.
(BEGIN VIDEO CLIP)
PORTNOY: You just take a couple of letters, you mush them together, press, buy, buy, buy.
(END VIDEO CLIP)
SEBASTIAN (voice over): And even Portnoy himself admits his winning streak may not last.
(BEGIN VIDEO CLIP)
PORTNOY: If you told me I had a guarantee of the stocks are just going to go up every single day like it does for the next decade, well then, I'd
quit my job and just do this because there's nothing more profitable, but I don't think that's the case. I think eventually it will stop. I just don't
know when.
(END VIDEO CLIP)
SEBASTIAN (voice over): Clare Sebastian, CNN, New York.
(END VIDEOTAPE)
CHATTERLEY: The critical difference there, not quitting the day job versus just being able to trade on the side. When it's a career and it's your life
versus gambling or playing on the stock market, you don't second guess yourself. Perhaps that's the difference here.
All right, let's move on. Six investment groups have signed to the world's biggest energy infrastructure deal this year in the UAE, worth over $20
billion. They're buying 49 percent of a portfolio of gas pipelines leased from the Abu Dhabi National Oil Company. John Defterios spoke with the oil
giant's CEO.
(BEGIN VIDEOTAPE)
SULTAN AL JABER, GROUP CEO, ADNOC: This deal, as you know will deliver over $10 billion of FTI in the UAE, and if it wasn't for the differentiated
value proposition provided by the UAE, by Abu Dhabi, and by ADNOC to such strategic and important investors, they would not have taken such a bold
decision to move ahead and to proceed with this very important transaction.
In our view, it is a big achievement given, of course, the current economic climate, and it is a true validation, also, of the world class nature of
our portfolio of assets.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: This is quite different in a sense that your investment pool ranges from those in the
United States and Canada and Europe and even stretching to Asia. Even in a low-price gas environment, they're still willing to proceed. But what is
the potential return for them, putting this sort of money on the table?
AL JABER: This is an investment into a selection or a group of gas pipelines for a 49 percent into the gas pipelines against a $10.1 billion
valuation of $20.7 billion. This is simply built on the framework of partnerships that we have been working on since the beginning of the
transformation of ADNOC in 2016, and as part of our value maximization strategy launched in 2017.
And like the UAE, we like to build bridges between countries and nations and cultures.
[09:40:14]
DEFTERIOS: You know, many of the IOCs are cutting 15 percent to 25 percent of their workforce. It's the opposite with ADNOC right now. You're not
retrenching. You're actually building by going into oil, new facilities, and gas facilities at the same time.
AL JABER: We are very much focused on what we can control, and that creates our cost, and regardless of the situation, this focus on cost will not
change regardless of the circumstance or the environment.
And our strategic aim is to always be one of the lowest cost producers in the world, and that hasn't in any way impacted our business plans as far as
our strategic projects are concerned.
(END VIDEOTAPE)
CHATTERLEY: All right, we're going to take a break here on FIRST MOVE. But coming up, from an NBA superstar to a super successful investor, David
Robinson joins us to discuss racism, education, and giving back. That's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. David Robinson, an NBA legend, and now a successful businessman is using his skills to give back to minority
communities, mainly via the route of education.
The former basketball pro is a two-time NBA champion, basketball hall of famer, and the winner of two Olympic gold medals. Wowsers.
Robinson also known as the Admiral, cofounded private equity firm Admiral Capital Group and I'm very excited to say he joins us now on the show.
David, wow, that's one heck of a CV, I have to say. I think everyone watching is intimidated. Great to have you on the show.
Talk to me about how you decided this was the way that you wanted to tackle the next stage of your career and give back to minority communities.
[09:45:08]
DAVID ROBINSON, CO-FOUNDER, ADMIRAL CAPITAL GROUP: Yes, well, as a basketball player, it was an incredible platform. Obviously, everyone knows
the popularity of the NBA, so it was an incredible platform not just to obviously go play basketball and be fantastic. San Antonio has been a great
team for a long time, but also to impact the people in the communities where we're playing.
So we started in education about 20-something years ago, building schools and now in San Antonio, we have 26 schools and through IDEA Public Schools
Network, we have 98 schools across Texas and Louisiana, and we're sending kids to college.
So, it was a great platform to start doing some positive things, and that led into business, which I felt like was another fantastic platform.
CHATTERLEY: It's just amazing. I want to talk about what you're seeing in those schools and how you've grown that first. But just, explain to me how
you're doing it because you're giving away a chunk of the profits from your investments in the fund and using that to build these schools.
ROBINSON: Right. We have built our firm saying 10 percent of our profits are going to go back into the communities where we're investing and we're
going to build that over time.
We've been at it now for about 13 or 14 years and we've been able to do a few little things here and there, but we've built on the education
foundation which I started in the NBA. And as we grow our pool of cash, we're able to do even more things.
CHATTERLEY: Talk about what you're seeing in terms of performance, of education of these children, how well they're doing and thriving in these
schools.
ROBINSON: Yes. No, we built all of our schools in low income areas. It's the IDEA Public Schools Network, fastest growing charter school system in
the United States. I think in the last study, it was the third highest performing charter school system. So, doing incredibly well.
We're sending 100 percent of our kids to college over the last 14 years as we grow, so growing at an incredible rate and getting kids to college. So
you know, our big thing is starting them really early and getting them focused so that by the time they graduate from high school, they're a grade
and a half above grade level and they've taken between 10 and 12 A.P. courses, so they're college prepared. And that's the biggest thing.
We get them confident and understanding that they belong in those colleges, so if we send them to a Notre Dame or Navy or Harvard, that they feel like
they're prepared to do the work.
CHATTERLEY: For me, this is at the root of the challenges in inequality and the gap that we see in the United States at this moment. It comes down to
education. Why can't we do what you are doing in these charter schools more broadly in the United States? What's the block? What's the gap?
ROBINSON: Well, there's a lot of blocks, and I think there's a lot of, you know, unfortunately, in the United States, I think we've had a lot of
institutional blocks. That's why people are talking about the institutional racism. I think it's difficult.
These communities have been built a certain way for a reason, right? If you have a highway that you build through a community, you can block commerce
from going across that highway, so we have these incredible disparities in statistics. So if you say -- if I live on the south side of I-35, then I'm
-- I have a 10 percent chance for my child to go to college.
But if I live on the north side, then I have a 77 percent chance for my child to go to college. If I live on the south side, then I'm going to cost
-- every person is going to cost the government $150,000.00 a year, whereas on the other side, you're going to contribute $200,000.00 to the economy.
So, those statistics are consistent across cities and states across the United States. I mean, we've built these communities intentionally the way
we have, and now it's our job to tap into this resource, our children, and begin to give them the opportunity to excel and contribute to our society.
CHATTERLEY: So it's education, it's geography, and the set-up of cities. There's so many things that need to be combined here to tackle some of
these challenges.
David, there is a wake-up call, I think, going on in the United States. It's been long overdue. How do we make sure that the movement that we're
seeing now, the focus isn't just on the surface but actually, it results in fundamental change? And I'm not just talking about judicial change and
changes to police forces, but something more fundamental that allows a more inclusive society.
ROBINSON: Yes, no, that's a great question. You know, I think changing the laws are important in making sure that, you know, you're giving people
opportunity, but changing hearts is the number one thing.
I always -- I wake up in the morning and I read the Bible, but, I think about the story of the Good Samaritan, right? I think it's our heart's
understanding that if people are hurting on the other side of town, then eventually that's going to get to us, right? But we need to go out of our
way to go help people who are hurting and in the United States, I think we've been really good at that for the most part.
We have a very generous nation, but I think we can't ignore racism. We can't ignore some of the things that we've done wrong as a country so that
we can learn from those and grow and go forward. I've gotten a chance to serve in the military, play in the Olympics, wear USA across my chest. I
love the United States, but there are a lot of things we do wrong.
[09:50:24]
ROBINSON: So, I think the biggest thing is changing hearts. Getting people to understand the systems that we have in place, the answers aren't to
build more police, you know, build more jails and add more police to the streets. The answers are to educate and give opportunities and then provide
that opportunity for those kids to grow.
Two generations ago, my grandfather grew up in the segregated Little Rock, Arkansas, and my mother grew up in a segregated Columbia, South Carolina,
and you know, now I have the opportunity to do well financially, to help my community. My children believe that they can go and be the next President
of the United States.
So, a lot has changed in two generations, and it shows the resilience of our country, and I think we'll continue to grow and learn.
CHATTERLEY: Awesome. We'll watch the name for the -- one of the next Presidents, at least. David, fantastic to have you with us. You clearly
have a huge heart too, sir. Come back and speak to us soon, please. Great to have you on the show.
ROBINSON: Well, thank you. I appreciate being on. Thank you.
CHATTERLEY: Thank you. David Robinson, an honor, sir. Thank you. All right, coming up after the break, the U.S. tech sector criticizes new restrictions
on visas for foreign workers, saying they'll make America less competitive. We'll discuss. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Twitter, Google, Amazon, and other tech firms are posing new restrictions on U.S. skilled migration. The Trump
administration says around half a million unemployed Americans will benefit from the suspension of several foreign visa categories, including
intracompany transfers.
The move affects professions ranging from scientists to journalists to au pairs. Brian Fung joins us now. Brian, the challenge I think coming from
the tech sector specifically is look, we've got a talent shortage. This makes no sense. Talk us through it.
BRIAN FUNG, CNN TECHNOLOGY REPORTER: Yes, the tech industry is not happy with the White House this morning. The president's policy here is to
restrict visas in key categories, including the H-1B visa for skilled workers, the L-1 visa for overseas workers that tech companies want to
migrate to the United States and thousands of these visas are given out every year.
But the President is saying that this order extending these restrictions is about preserving U.S. jobs.
Now, obviously, tech companies are expressing deep concerns over this approach, and here's a taste of some of the reactions we've been getting
from Amazon. The company said, "Preventing high-skilled professionals from entering the country and contributing to America's economic recovery puts
Americans' global competitiveness at risk."
[09:55:10]
FUNG: Now, Google also saying, "America's continued success depends on companies having access to the best talent from around the world,
particularly now, we need that talent to help contribute to America's economic recovery."
Obviously, this highlights deep tensions between Silicon Valley and Washington as the two remain at loggerheads over not just immigration, but
also issues including competition and antitrust -- Julia.
CHATTERLEY: Yes, absolutely. Brian, great to have you with us. Brian Fung, not the only nation, of course, that's trying to protect home talent and
home voters, of course, but the timing here, of course, key. Brian, thank you for that.
All right, that just about wraps up the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe, and I'll see you tomorrow as always.
(COMMERCIAL BREAK)
[10:00:00]
END
