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First Move with Julia Chatterley
Coronavirus Spreads; Coronavirus Cases Triple Among Passengers On Cruise Ship; Jobs Day In The United States. Aired 9-10a ET
Aired February 07, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:06]
ZAIN ASHER, CNN INTERNATIONAL ANCHOR: Coming to you live from New York, I'm Zain Asher, and here is what you need to know.
Virus spreads. 638 people known to have died of coronavirus; over 31,000 people infected.
And in quarantine. Coronavirus cases triple among passengers on a Japanese cruise ship.
And it is Jobs Day here in the United States. We have strong numbers to bring you this Friday, and this is FIRST MOVE.
All right, welcome to FIRST MOVE, everyone. I'm Zain Asher. It's so good to have you with us. It is another jobs Friday.
U.S. stocks are set to fall from record highs and of course, we continue to track the path of the coronavirus. Lots to get to today.
Let's start with the jobs data. U.S. jobs market is entering 2020 with a bang. Look at that. Two hundred and twenty five thousand non-farm jobs were
created in the U.S. last month. Certainly, well above expectations. The expectations were about 160,000. We got 225,000. Analysts were looking for
a rise of significantly less.
Meantime, the unemployment rate ticked higher to three and a half percent or 3.6 percent rather, but still near 50-year lows. Average hourly earnings
also posted gains as well.
U.S. futures have been weaker all morning after Thursday's record setting day. We're expecting losses of about half percent when trading gets
underway in just about 30 minutes from now.
That said, all the major averages are still on track for their best weekly gains in months.
Let's take a look at the action in other markets around the world. The European stocks are pulling back from all-time highs as well. A weak report
on German industrial output is hurting sentiment there.
Asian stocks finished mixed as cases of the coronavirus surpassed 31,000. The coronavirus is, of course our main driver today. That is what we're
looking at in terms of how it's affecting markets, but that has been rare public anger towards the government in China after the death of the
coronavirus whistleblower doctor.
The 34-year-old ophthalmologist who issued an early warning about the virus died after contracting it himself. So far, as I mentioned, over 600 people
have died, most of them in Mainland China.
Meantime, after speaking on the phone with Chinese President Xi Jinping, U.S. President Donald Trump tweeted in part, "He will be successful,
especially as the weather starts to warm and the virus hopefully becomes weaker, and then gone."
David Culver is joining us live now from Beijing with the very latest. So David, just all of this confusion about whether this doctor who was the
whistleblower have died or not died. I mean, what does all of it say about the Chinese authorities handling of this case and their level of
transparency as well.
DAVID CULVER, CNN CORRESPONDENT: And that's right, Zain. I think we were having this conversation some 24 hours ago essentially talking about this
back and forth, and initially the reporting from state media was that he had died.
And then suddenly the hospital comes forward with a statement saying no, he is in critical condition. They're still trying to resuscitate him.
But it's interesting, in between that first report and when the hospital came out, there was a surge of emotion on Chinese social media, not only an
outpouring of grief, but also deep rooted anger.
And then the hospital came forward with that statement, and then the state media started deleting their tweets and started changing their story to
say, well, essentially, he is still alive and they're still trying to resuscitate him.
But then finally overnight, they came forward and acknowledged that he had passed away. And what we have seen since has been the censors essentially
here in China working overtime, trying to get rid of some of the trending topics, which include pushing for freedom of speech and calling on the
Wuhan government to apologize to Dr. Li Wenliang who essentially is considered one of the first whistleblowers in all of this.
And there were several other whistleblowers, who likewise were reprimanded early on for putting out this information, expressing concern that this
virus was bigger than was being portrayed at the time.
Meantime, you mentioned President Xi and President Trump having their conversation. We've heard from both sides here, and there's an economic
tied to this, no question.
China is increasingly isolated. They're feeling the pain because of this. Airlines more and more are either cutting back or cutting off their flights
here altogether.
And we know that President Trump is reassuring President Xi at least publicly via Twitter saying that he is sharp, and that he is powerful and
that he will succeed in this counter attack on the coronavirus.
For his part, President Xi came forward with this. Let me read to you a few of the words that come across and you can listen in here. It says, "The
U.S. could assess the epidemic situation in a calm manner and adjust response measures in a reasonable way."
What is he referring to there? Well, he is referring to the travel restriction that the U.S. was the first country to go forward with.
[09:05:09]
CULVER: That has been followed now by several more countries. And again, Zain, that puts us in a position here of looking at China as increasingly
isolated economically. The crunch is getting more and more. Its pressure on global supply as well.
And so it seems to be that President Xi is perhaps suggesting to President Trump, is there a way that we can work around this? Because the Foreign
Ministry earlier this week, in fact, said that this is like an overreaction on the part of the U.S.
So perhaps the two world leaders are trying to figure out a different approach to the coronavirus at least and how they're framing it from a
travel security standpoint, and then ultimately, the economic impact.
ASHER: Yes, no doubt that China is getting squeezed economically as a result of all of this.
But when you think about the doctor passing and of course, all of the outrage there, what are we learning about how well healthcare workers are
protected during all of this?
CULVER: This is something that we were digging into early on. My team and I, even over the past two weeks when we ourselves were in quarantine, after
having gone to Wuhan, we were in touch with medical personnel, doctors, nurses who were on the front lines, who were complaining about this dire
situation of not having enough of protective gear, essentially.
Well, fast forward to where we are today, and many of them are still complaining about that. Now, the government has said, they're putting
forward as many supply gear and some of the protective suits and goggles and everything as they can, and they've actually called on other countries
to help out as well.
And we've seen that, whereas the U.S. has brought in now they're evacuation flights on board that plane has been a lot of supplies. Same with South
Korea, same with Japan.
But ultimately, this is a concern that even President Xi Jinping himself has addressed saying that our medical personnel are on the front lines of
this and we've got to make sure that they're going into this fight and that they have the armor they need.
ASHER: David Culver live for us there. Thank you so much.
And the number of confirmed coronavirus cases on board a cruise ship docked in Yokohama, Japan has multiplied bringing the total to 61. Sixty one
people on board that cruise ship have been infected. We know that more than 7,000 passengers and crew are currently under quarantine on two separate
cruise ships in Asia.
The second vessel is docked in Hong Kong. CNN's Will Ripley is in Japan and he spoke to some of the people on board the Diamond Princess.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice-over): Another day on the Diamond Princess under quarantine.
UNIDENTIFIED MALE: It looks like they're unloading additional passengers.
RIPLEY (voice over): Another day confined to their cabins counting the ambulances, counting the number of coronavirus patients as it doubles, then
more than quadruples.
(BEGIN VIDEO CLIP)
KENT FRASURE, OREGON PASSENGER: We're looking out our balcony and there are indeed more ambulances lining up like they were yesterday.
(END VIDEO CLIP)
RIPLEY (voice over): Americans Kent and Rebecca Frasure never thought they would be on one of those ambulances, until a Japanese nurse knocked on the
door.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We need you to get ready. We don't know how long you have to stay in the hospital.
Pack your luggage and go to the bathroom and stay in the room.
(END VIDEO CLIP)
RIPLEY (voice over): Rebecca's throat swab came back positive for coronavirus.
(BEGIN VIDEO CLIP)
REBECCA FRASURE, OREGON PASSENGER: I don't -- yes, I don't really have any symptoms, you know, other than a cough.
(END VIDEO CLIP)
RIPLEY (voice over): The news is a shock to and friends in Oregon.
RIPLEY (on camera): What's the hardest part?
R. FRASURE: I'd say the unknown, like, I don't know what's going to happen an hour from now, tomorrow, like, for all we know, we could stay
quarantined on this ship for a month.
RIPLEY (voice over): Passengers say they can only go outside in small groups under close supervision for less than one hour a day. For them, this
luxury liner is starting to feel like a floating prison.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We're in a contaminated prison possibly.
(END VIDEO CLIP)
RIPLEY (voice over): Florida passengers, Gay and Philip Courter are among the lucky few with a balcony. Many of the 2,600 plus passengers are in
cramped cabins, no windows, breathing air circulated throughout the ship.
(BEGIN VIDEO CLIP)
GAY COURTER, FLORIDA PASSENGER: This is not a safe environment, and we don't think anybody, let alone the Japanese government wants to be
responsible for making a bad decision about quarantining us in an unsafe place.
(END VIDEO CLIP)
RIPLEY (voice over): The Courters are in their mid-70s. They know the vast majority of coronavirus deaths are people older than 60, and she says the
Diamond Princess is packed with retirees.
(BEGIN VIDEO CLIP)
COURTER: We want off this ship and we want to go in health and in dire medical circumstances.
(END VIDEO CLIP)
RIPLEY (voice over): She even has private insurance that covers crisis extraction, but the Japanese government says they can only be extracted
after the 14-day quarantine period.
And no word on whether the 14-days begins from the first reported case on February 1st or the latest. They hope the U.S. government will do something
to intervene and bring more than 400 American passengers home.
(END VIDEOTAPE)
[09:10:05]
ASHER: And Will Ripley joins us live now from Japan. So, Will, just given the fact that it can take some days before symptoms begin to show for this
virus. I imagine that there is a very real fear for people on board, that cruise ship that if they haven't already contracted the virus, they could
do so at any moment.
RIPLEY: It really -- you summed it up, Zain. People are very frightened. They are bored, frankly, because they're spending 23 out of 24 hours of the
day in their cabins.
Many of the cabins are cramped. A lot of them don't even have windows because they're inside the ship. And when you have nothing but time,
minutes feel like hours. And you know, you don't have anybody to talk to because being around other people is what spreads this virus.
So basically, people are not allowed to have contact with the friends they made on the cruise or anybody you know, aside from their own immediate
family or whomever they're traveling within the cabin.
For example, you know, the couple we just spoke with, you know now, the wife is at a quarantine hospital about an hour from here. Her husband is
still sitting in their cabin by himself, checking his temperature wondering if he is going to be the next one infected.
You know, even people who didn't have immediate contact with somebody who now has coronavirus, they are worried about, you know, the air circulating
through the ship, wondering if the air filtration system is going to be enough, you know, to prevent the virus from coming into their room, if it's
even airborne.
I mean, there's so much that we just don't know about coronavirus at this stage. And that lack of knowledge is really frightening and unsettling for
a lot of people.
ASHER: And there's another cruise ship that's really making headlines here in the U.S. and that is the Anthem of the Seas cruise ship that's about to
dock in New Jersey.
What more do we know about the number of potential infections, if any, at this stage on board that ship?
RIPLEY: This is a bit of a different situation, what's unfolding right now near New York City in New Jersey, Zain, because there's actually nobody on
the ship at this point who has tested positive for coronavirus.
But seven passengers do have a travel history that took them into Mainland China, and out of an abundance of caution, obviously, the United States,
you know, U.S. Airlines aren't flying to the Mainland right now. Anybody who has been to China has to undergo a 14-day quarantine.
And so that's what's going to have to happen with these people as well and they're going to sweep the ship and check very intensively to see if, you
know, there are any symptoms or signs of coronavirus on board.
It's also a similar situation of that cruise ship that's in Hong Kong right now in Victoria Harbour, again, no coronavirus patients on the current
group of passengers, but previous passengers did end up testing positive.
So out of an abundance of caution, you have the ship just kind of sitting there. And there's actually another cruise ship, Zain, just off the coast
here of Yokohama that has been denied entry to Japan.
At the moment, they just say they're in a holding pattern because they don't know where to go. No countries will accept cruise ships right now if
there's any chance that they could have a coronavirus outbreak.
ASHER: Yes, you really have to feel for the passengers on board. Certainly, the ones who don't know anything in terms of what's going to
happen and when they're going to be let off.
Will Ripley live for us there. Thank you so much.
All right, let's get to that solid U.S. jobs report. U.S. economy is showing fresh signs of strength already in the New Year.
Economic growth -- employment growth, rather, came in well above expectations.
Let's bring in Paul La Monica to take us through it. So Paul, 225,000 jobs added in January. That's what? At least 75,000 more than everyone had been
expecting. Take us through it.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, these were very solid numbers, Zain, as you pointed out. The jobs gains were better than expected. Wage
growth continues to be pretty steady, which I think is great for Americans looking at their paycheck, 3.1 percent growth in wages more than the rate
of inflation.
And the unemployment rate, which had ticked up ever so slightly, it did so for good reason, and that's because the labor force participation rate is
higher. And that is measuring the number of people that are actually out in the workforce looking for a job again, because the labor market is pretty
strong.
So you have more people that have been on the sidelines, looking for work.
ASHER: And just take us through some of the key areas where we saw growth, particularly in sectors like transportation, obviously manufacturing has
still been bleeding jobs, but transportation was one of several bright spots.
LA MONICA: Yes, you have many bright spots. As you point out, manufacturing was one of the few areas that did post a slight decrease,
which will be unfortunate probably for the President because he likes to you know, talk about the jobs in the American heartland in the
manufacturing sector trying to keep jobs in the United States.
But other than that, you had solid gains in leisure and hospitality, in retail, transportation, business and professional services, which is kind
of like a catch all for white collar jobs.
So very solid growth across the board. There are not that many things to nitpick about in this report.
ASHER: All right, Paul La Monica live for us there. Thank you so much.
[09:15:01]
ASHER: So these are the stories making headlines around the world. In the Iowa caucuses, former Mayor Pete Buttigieg has a fraction, and when I say
fraction, I mean, a tiny percentage point lead over Bernie Sanders.
But CNN's own analysis reveals that there are errors in the count that the Democratic National Committee is calling for a recanvass of some of the
votes.
Mick Mulvaney's role as the acting White House Chief of Staff is now in doubt now that the dust is settled from the President's impeachment
acquittal.
The reshuffle comes as the President heads to North Carolina before attending a fundraising back in Washington tonight.
On Thursday, the President thanked his legal team.
(BEGIN VIDEO CLIP)
TRUMP: Right at the beginning, they said, sir, you have nothing to worry about. All of the facts are on your side. I said, you don't understand.
That doesn't matter. That doesn't matter. And that was really true.
(END VIDEO CLIP)
ASHER: A Russian passenger plane was forced to make an emergency landing at a Russian operated airbase in Syria after it was targeted by serious
missile defense system.
The Airbus A320 was en route to Tehran from Damascus and may have been fired on because of airstrikes hours earlier near the Syrian capital.
All right, the Queen's granddaughter, Princess Beatrice is getting married in May. Buckingham Palace says that she will wed her fiance, Edoardo Mozzi
on May 29th at St. James's Palace in London, followed by a reception in the gardens of Buckingham Palace. The couple were engaged in Italy last
September.
Still to come here on FIRST MOVE, a spying scandal at Credit Suisse leads to the resignation of its CEO.
And the boss of mattress company, Casper loses no sleep over their company's dramatically reduced IPO price. That's next.
(COMMERCIAL BREAK)
ASHER: Welcome back to FIRST MOVE coming to you live from New York where U.S. futures continue to point to a lower open for U.S. stock.
Stocks finished on record highs at the end of trade yesterday, but coronavirus fears are back in the spotlight.
[09:20:09]
ASHER: Today, Standard and Poor says the Chinese economy could slow to five percent this year, much weaker than the 6.1 percent growth we saw last
year.
That said, the latest news on U.S. employment is certainly a market positive. The U.S. added 225,000 non-farm jobs last month, much stronger
than expected.
The coronavirus outbreak is hitting many businesses hard across the globe. Toyota will not reopen its factories in China for at least another week.
Wynn casinos says its Macau closures are costing it $2.6 million a day -- a day.
And Burberry has temporarily closed 24 of its 64 stores in China.
Anna Stewart is visiting a manufacturing company in the U.K. that imports the majority of its materials from China. She joins us live from Leeds.
So Anna, I mean this really goes to show that there are companies far and wide whose supply chains even small companies in Leeds that are being
impacted by the coronavirus.
ANNA STEWART, CNN REPORTER: Yes, we spent so much time talking about that front line in China, the shops, the restaurants, the manufacturers who have
to close down for a few weeks.
But the ripple effect goes all the way to Leeds, around five and a half thousand miles away from Wuhan.
This is a very niche business, but it is right in the middle of this very integrated global supply chain.
This company makes circuit boards for other businesses. It imports these, and most of the materials are from Asia. And unfortunately for them, part
of this circuit board requires materials that are from one of the provinces hit by the virus in China, the factories have closed down.
So in order to get it to its client on time, it's had to find another supplier which has managed to actually do, but the Managing Director tells
me it's going to cost them three times as much.
Cost that it can just about absorb short term, so it's going to squeeze their margins. It's also going to put loads of pressure on all the guys
here who are going to get very late and have to try and make up the circuit board super fast to get it to their clients before it takes a big hit on
the next part of the supply chain.
And this is the problem with integrated supply chains. Often, the businesses don't even know exactly where all of its components come from,
or how impacted they will be.
And with this virus, we just don't know how long some of those factories will be offline.
ASHER: And just given the fact that Wuhan in China is basically China's Motor City, you're seeing car companies around the world, Anna, that have
been impacted by the coronavirus as well. Excuse me.
STEWART: Yes, all over the world, and also all of the suppliers around, there's car factories, Hyundai having huge problems in Korea. They have had
to close down factories there because they're not getting the right part.
Toyota, as you mentioned earlier now extending their factory closures by another week and that strikes fear in small businesses all over the world
like this one who now where we are.
If Toyota is extending factory closures in China, what does this mean for my suppliers? The factories that I rely on? Does this mean I am going to
have to pay more for the little components that I'm now getting from somewhere else for longer? And if I do, I will have to pass that cost to
the next sort of customer further down the supply chain.
It's like a domino effect that ultimately, if it carries on much longer, will end up hitting the consumer -- Zain.
ASHER: Anna Stewart live for us there, thank you so much.
Now, as we watch this health crisis evolve, businesses and investors around the world attempt to gauge the economic consequences.
Matthew Luzzetti is Chief U.S. economist at Deutsche Bank. He joins us live now. Matthew, thank you so much for being with us. Let's start with the
jobs report -- 225,000 jobs added significantly more than expected. What's your take on it?
MATTHEW LUZZETTI, CHIEF U.S. ECONOMIST, DEUTSCHE BANK: Yes, and I think the key takeaway is that the U.S. labor market is very solid. You no doubt
have got a boost from what was pretty warm winter weather in January. We saw that because construction spending grows.
But in addition to that, the unemployment rate remains low. It's at 3.6 percent. Wage growth actually picked up a little bit. And maybe the most
important thing from you know, the Fed and the economy perspective is that if you look at the prime age labor force participation rate, those 25 to
54, who are actively participating in the labor force, that was the highest since 2008.
So you've seen people come back into the labor force, as the economy has continued to be resilient and as the labor market has been strong.
ASHER: Explain to me the market reaction here because all of this week, we've had a lot of coronavirus fears, and yet, the market has shown sort of
record high after record high.
And then today, we get this solid sort of stellar jobs numbers, 225,000 jobs added in January, and futures are down a hundred points this time.
What gives?
LUZZETTI: Yes, and I think you see the market trading significantly off of the news day-to-day on the coronavirus.
You know, as was noted, there's going to be significant economic disruptions in the near term that comes from trade flows, disruptions to
supply chains, uncertainty that's being created, impacts on commodity prices.
And the latest data you know, just marginally or the news is probably marginally more worrying on the potential spread of the coronavirus. And so
I think the market is reacting to that.
[09:25:06]
LUZZETTI: Ultimately, we think that production should come back online in China beginning in April, at least normalizing in April, and that should
help to limit the economic impact over this year.
But no doubt, I think the first quarter global economic activity is going to be significantly hit.
ASHER: We also got important trade news yesterday that China is cutting in half tariffs on $75 billion worth of American goods. How much is the market
focused on that at all, do you think?
LUZZETTI: I think very little at this point. I think, in part, what was baked into the Phase 1 trade deal as we saw the U.S. scale back on some of
the most recent tariffs, you do see Chinese officials looking to provide some support to the economy through monetary measures by cutting interest
rates. So I think that was not a big driver of the market.
Right now, I think it is looking at economic activity which was very strong entering before at least we've seen the spread of the coronavirus.
Now, I think that's created a lot of uncertainty and so the market is mostly trading off of the day-to-day news flow.
ASHER: And just given all of the economic impact we're likely to see from the coronavirus continuing, does it weaken Xi Jinping's hand when it comes
to negotiating Phase 2 trade deal?
LUZZETTI: You know, we don't really expect much out of a Phase 2 negotiations this year. We think we got the Phase 1 trade deal passed, that
should help boost economic activity in the U.S. through exports in the second half of the year.
But I think it's unlikely that you see material progress on a Phase 2 trade deal before the presidential election.
So for that reason, as long as this coronavirus spread is a temporary story, the Chinese economy bounces back, that indication have much of an
effect.
ASHER: Matthew, we're running out of time. Thank you so much. Appreciate it.
LUZZETTI: Thank you.
ASHER: Opening bell is coming up after this break.
(COMMERCIAL BREAK)
[09:30:00]
ASHER: Last day of trading for the first week of February. That was the opening bell. I'm Zain Asher coming to you live from New York, and as we've
been talking about, we do have a lower opening session for stocks.
The Dow is already down 111 points, 126 points excuse me, right out of the gates pulling back from those record highs we saw Thursday after China
slashed tariffs on some $75 billion worth of U.S. goods.
But we are seeing a bit of a consolidation today, perhaps not surprising after Wall Street's recent run up, concern that the coronavirus will
trigger a greater than expected decline in Chinese growth is weighing on sentiment.
The S&P rather says that Chinese GDP could rise only five percent this year. That's much weaker than the 5.7 percent growth that the S&P had been
expecting earlier.
Jobs gains in the U.S., however was solid, 225,000 non-farm jobs were created in the U.S. last month, well above expectations.
All right, another major story we are following. Shares of Credit Suisse are falling after the CEO resigned over two -- not one but two -- spying
scandals.
Hadas Gold joins us live now with the details. So Hadas, there's no evidence at this point that the former, now former CEO, Tidjane Thiam knew
anything about these spying scandals, but the consensus is, he has had to take one for the team. Just walk us through what you know.
HADAS GOLD, CNN BUSINESS REPORTER: Right. So Tidjane Thiam had been CEO of Credit Suisse for just over five years, but it's been a rough few months
for him ever since last fall when the first story started emerging about this kind of incredible spying scandal at the bank where essentially two of
the highest executives there were being tailed by private detectives and in some cases in scenes out of a "James Bond" novel -- car chases in Zurich,
confrontations on the street.
Pretty much what ended up happening was that it was revealed that the former COO of the bank was the one who was orchestrating all of this. But
the problem is that COO was very closely linked to the now former CEO, Tidjane Thiam.
They had pretty much had linked careers for quite a long time. Now, although the bank cleared the now former CEO of any involvement in this,
it's still sort of a bad look.
If the person who you are so closely linked to is doing this under your nose, and you did not know that doesn't look good.
And of course, if you knew this was going on, that doesn't look good as well.
Now the CEO, Thiam said, "I had no knowledge of the observation of two former colleagues. It has undoubtedly disturbed Credit Suisse and caused
anxiety and hurt. I regret that this happened and it should never have taken place."
So obviously, this has been a rough few months for Credit Suisse. And in addition to this, there are some reports that the personal relationship
between Thiam and the chair of the Board, Urs Rohner had deteriorated over time and this essentially, according to reports had turned into sort of a
battle between the Chair of the Board and the CEO.
And despite the fact that several key shareholders of Credit Suisse had come up publicly in support of Thiam, that clearly was not enough because
the Board made the unanimous decision that Thiam should go.
And as you can see, the shares are down. Now, they went down quite significantly earlier today, when the news first broke, but ultimately,
Rohner has said, this is all about the trust credibility of the bank.
And the new CEO, who has just been named is giving us a signal of kind of where they're headed. This is -- the new CEO is Thomas Gottstein. He is a
company veteran, a current head of the bank's Swiss business.
They're kind of turning back inwards. Thiam was seen as an outsider. They are now turning back inwards for their new CEO that could give us an
indication of where the bank plans to head next.
ASHER: And how much reputational damage has Credit Suisse suffered after all of this?
GOLD: Listen, it's just -- it's not a good look at all and there has been -- it's been some tough times for these banks.
I mean, Credit Suisse over the past five years, it's lost a huge chunk of its share value. Now granted, a lot of banks have run into trouble, and
Thiam did manage to turn a profit for the first time in four years in 2018.
But when it comes down to a bank, to a bank that's known as sort of one of the faces of Swiss banking, this spy scandal and the fact that it wasn't
just one incident, that it was a second incident and that it was happening to somebody under the eyes of somebody who was so close to the CEO, who is
ultimately fired for this -- that's just not really something that's sustainable for a bank like this.
ASHER: Hadas Gold live for us there. Thank you so much.
Now, it's time for a quick check of the Global Movers. Uber shares are -- let's see -- rallying seven and a quarter percent after posting better than
expected fourth quarter results.
The company is reporting a narrower than expected quarterly loss. It also hopes to become more profitable by the end of the year, one year earlier
than previous expectations.
Pinterest next on the list is also a rallying, 13 and a half percent. The social media site is reporting better than expected fourth quarter results.
It is also raising its 2020 guidance as well.
And on the bottom of your screen there, Tesla shares bouncing back after two days of losses, they're up two percent.
[09:35:09]
ASHER: That is as capping a volatile week of trading for the electric car maker. A report out today from the Financial Crisis Observatory says that
Tesla's recent rally has the characteristics of, "a typical dot com bubble."
And Casper shares are higher on their second day of trading. The online mattress retailer went public on Thursday and finished the session up a
solid 12 percent of the pricing at the low end of its IPO range.
Casper cut the amount of money it raised amid concerns about his path to profitability. Julia Chatterley asked the CEO, Philip Krim about the
decision to press shares conservatively.
(BEGIN VIDEO CLIP)
PHILIP KRIM, CEO, CASPER: Whenever you're raising capital, it's a moment in time around valuation. And so that's interesting, but it's really not
what our focus is.
We're focused on building a long term business, building a brand that stands for the best night of sleep possible, and that continues to be what
drives us every day.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: How much was it to do with company sensitivity versus market conditions right now? Because we are
coming off a period where we have the WeWork situation, a greater sensitivity, perhaps to profitability.
KRIM: You know, there is -- you know what investors are thinking about today, but for us again, this is just one moment in time, and it doesn't
change what we're building with Casper.
So we think we have the right plan and the right strategy. We're going to continue to be really focused and rigorous around executing that and that's
going to lead us to building the world's first sleep brand.
CHATTERLEY: Is the market saturated? The number of times when I've looked at the speculation coming into this IPO and people have said, look, the
market is saturated. The competition is fierce. Even if Casper has a great product, it It only takes you so far. Your response?
KRIM: Disagree. I think people turn to the best when it comes to sleep. People know that getting a great night's sleep is really important for
their overall wellness, and so they want the best.
They're investing more and more dollars into sleep as part of their overall approach to the best wellness equation possible, and that's where Casper
comes in.
The reason we're the number one rated mattress on consumer reports, the reason we're able to launch innovative products like our Glow Light, or
because we really focus on elevating sleep quality with everything that we do, and that's something that we're maniacal about.
And so we're going to continue to help the world sleep better through our innovative products, very different than how the industry has operated.
(END VIDEO CLIP)
ASHER: All right, still to come here on FIRST MOVE, Hong Kong's besieged economy after the trade war and protest, and now the coronavirus take their
toll. We look at how its businesses are coping.
(COMMERCIAL BREAK)
[09:40:34]
ASHER: Hong Kong has been hit by months of violent protests and a damaging U.S.-China trade war. They have gone through a recession last quarter for
the first time in a decade.
And now new threat looms. The city has confirmed over 20 cases of the coronavirus. Tara Joseph is the President of the American Chamber of
Commerce - Hong Kong joins me live now via Skype.
So Tara, clearly, this is the last thing that Hong Kong needs. You've had months of protests. Now, the coronavirus. What is going to be the economic
fallout of all of this, do you think?
TARA JOSEPH, President, AMERICAN CHAMBER OF COMMERCE - HONG KONG (via Skype): Well, we're already feeling the economic fallout as the
coronavirus continues to worry people in the city.
The operating environment, the work environment here right now is anything but normal. Many people, including myself are working from home. This has
gone on for several weeks. Productivity is plummeting.
People who are planning to visit Hong Kong or business people in Hong Kong, who usually travel around the region are not budging. So we're starting to
feel a real sense that Hong Kong, which is one of the world's most dynamic cities, is barely moving at all right now.
And of course sectors like retail and hospitality, just to name a few which have already been badly hit by the protests of the last quarter of 2019 are
now really starting to feel that extra kick in the teeth.
ASHER: And also tourism, I mean, the lucrative sort of tourism business with tourists coming from Mainland China, that's now starting to fall away
as well. What sort of impact do you think that's having?
JOSEPH: Well, as I mentioned, we've already seen that when we had the protests here in 2019, and the tourism and the number of people who came
over the border, or who came from Mainland China to shop, to eat, to go to amusement parks, and even to go to universities and schools, those numbers
have dropped off significantly.
And those numbers and those tourists were very, very important for Hong Kong's economy. We're now just getting used to not having that around.
We're talking about millions of people who are coming to Hong Kong.
The shops that cater to them are really just empty right now and trying to stay open or actually shutting down.
ASHER: I mean, obviously, China's role -- Mainland China's role in sort of global economy is very different now than it was 20 years ago. But what can
we learn from how Hong Kong recovered in the wake of SARS and its effect on the region? What can we learn from that when we're comparing it to what's
happening now with the coronavirus?
JOSEPH: Yes, it is something important to compare. When we had SARS here, and I had lived here during the time of SARS, we saw what was really a V-
shaped recovery, a very sharp drop in business and in the economy. But then a very quick upsurge after it finished.
Many people think we could see something similar, but already there's some differences. The coronavirus has lasted longer than SARS has. There are
already other very, very difficult issues right now within the economy, and that is a slowdown in China, the U.S.-China trade war and other things that
are making it more difficult to really think through how long the recovery will take.
And of course, China and it slowdown and the difficulties that it is facing with this virus could lead us into a much longer period of difficulty.
Travel to China, it may take a while for people to get back traveling there and feel comfortable. So we could see this drag out for quite some time, at
least through the first half of the year.
ASHER: I want to talk about just the level of fear because we know that there are healthcare workers in Hong Kong that are calling for the border
with Mainland China to be sealed.
You are obviously at home, you know, you're doing this as a Skype interview, not at our Bureau there in Hong Kong, not at our studios. Just
walk us through what it's been like personally and that sort of level of fear that you're seeing that is very pervasive in the area.
JOSEPH: Well, with these types of public health events, I think people have very different reactions. Some people actually are fearful and they
really do not want to be outside. They do want to be in public areas.
If you go down to the Central Business District, there are more people walking around now, many, many, maybe the majority are in masks.
[09:45:09]
JOSEPH: But a few days ago, you barely saw anyone there, because people just didn't feel comfortable being out. That's starting to wear off a
little bit.
But also we are noticing that people are starting to hoard things -- toilet paper, tissues and rice. They're selling out of the markets every single
day. People are trying to get their hands on things. And that's a reaction to fear or a worry of the unknown and not knowing how long this is going to
last.
So day by day, people go through sort of mood swings, I would say including myself, where you feel energetic and everything is fine, and then you start
to wonder how long this is going to go on. And whether this is kind of an uneasy place to be.
So the more reassurance that we get, the more connectivity we have with the world. The better understanding we have of how this virus can be beat will
help. But the longer it drags on, the more difficult it becomes.
ASHER: And obviously Hong Kong has a reputation of being, you know, the financial capital for the region. With the impact from the protests, and
now this is, are there other areas in the region where you sort of think that business investment will flood to instead.
JOSEPH: Well, some of these things, we're already starting to see the trends of, so this could just add to the trend.
Singapore has become a bigger hub, and during the protests, we saw and heard of companies that were thinking of moving, if not their entire
operation to Singapore, parts of their operation to Singapore, and that's especially in the services sector and in the technology sector.
The supply chain, we're seeing disruptions in the supply chain, but in terms of manufacturing, we (AUDIO GAP) of companies that were manufacturing
in the mainland move towards spots like Vietnam, to Cambodia and Indonesia. And this may add to that.
It may see things move faster in that direction, so all sorts of disruptions are taking place, and also the question is, how quickly can the
U.S. and China get back to business with already a trade war as a big problem in between.
ASHER: All right, Tara Joseph -- Tara, we have to leave it there. Thank you so, so much, and I hope this doesn't drag on too long. Thank you so
much for being with us.
All right, after the break, if you feel bad after buying something to cheer yourself up, you're certainly not alone.
Up next, Arianna Huffington tells me how we could all brush up on our financial literacy skills, and how money really actually can bring you
happiness of a sort, that's next.
(COMMERCIAL BREAK)
[09:50:49]
ASHER: They say money cannot buy happiness, but a lack of it can cause a whole lot of stress.
In one survey, nearly 90 percent of people said that financial considerations had an impact on their stress levels.
Arianna Huffington's tech firm, Thrive Global is behind that poll, and it's offering you advice about managing money.
(BEGIN VIDEOTAPE)
ARIANNA HUFFINGTON, FOUNDER AND CEO, THRIVE GLOBAL: We want to give people awareness, information and practical little steps that we call micro steps
that can help them create better habits and reduce that stress which immediately affects their wellbeing.
ASHER: So how hard is it to have a sort of one size fits all approach when all of us are coming from very different places when it comes to money?
For example, there are well over 30 million Americans that live below the poverty line. There are some people who are dealing with the loss of a
spouse, divorce, perhaps, the loss of a job as well.
So we're all coming from our financial issues, from very different places. So is it possible to individualize someone with the micro steps as well?
HUFFINGTON: Absolutely. First of all, we need to acknowledge, you know, systemic problems that need to be addressed at a political and
institutional level, including things like crippling student debt.
But even within this context, there is a lot individuals can do because they can't wait for all these problems to be solved.
And let me give you just a few examples. In our research that Thrive Science has produced, we found that 25 percent of people regret the
purchases they make.
ASHER: OK. Wow. I am sure I am one of those.
HUFFINGTON: So if we can help people identify what is it that makes us buy that bag that we couldn't afford, but somehow felt essential for our
survival at that moment, and how can we take a moment before we make the purchase.
And every micro step is really small, like taking a moment is literal. And in the same way, if we're worried about a bill or having to pay something,
a micro step we recommend is write it down, capture it in a place, whether it's a financial journal, a place on your phone somewhere and go back to it
when you're ready to take action.
But don't let it dominate --
ASHER: Disturb.
HUFFINGTON: Exactly -- your mental state and fester -- exactly. And there is another way other partnerships discover, because they too, are very
focused on actionable steps, not just information, like the work they did around credit scores.
It's not just about giving people greater awareness, but helping them take these steps and again, in our research, we found that 35 percent of people
want to have a clean financial start, but they don't know where to begin?
ASHER: So much of it is based on knowledge, isn't it?
HUFFINGTON: Exactly.
ASHER: I mean, just in terms of one person I was having a conversation with today -- a woman in her mid-20s. She told me that she felt as though
she was thrust into the workplace, into the workforce without a real clear understanding of real financial literacy.
She told me that she only learned how to balance a check or write a check rather just last year. So financial literacy is something that some of us
might take for granted. But it is a real issue, especially for Generation Z.
HUFFINGTON: Absolutely. It's kind of amazing that we learn so many things in high school --
ASHER: Pythagorean's theorem.
HUFFINGTON: And college.
ASHER: Right.
HUFFINGTON: Or how to put on makeup. But we don't learn some basic financial truths. And that's really what we're trying to address and also
help people not have that financial stress spill into every aspect of their lives because that's the other thing we found.
[09:55:07]
HUFFINGTON: That it makes them stressful about the rest of their lives. It drains their energy. It makes them more fatigued.
So if we can give them these tools --
ASHER: Yes, to eliminate that stress.
HUFFINGTON: To eliminate that area, as well as the better habits, both around spending and around saving, it can be game changing.
(END VIDEOTAPE)
ASHER: And for more information on Arianna Huffington's thriving wallets, go to the Thrive Global website at thriveglobal.com.
Before we go, an executive shake up at Ford. Longtime President and automotive Jim Heinrich is retiring. Business and Technology chief, Jim
Farley will become the company's new Chief Operating Officer.
Ford reported an almost 99 percent drop in 2019 profits this week.
All right, that's it for the show. I'm Zain Asher. You've been watching FIRST MOVE. I will see you next week.
(COMMERCIAL BREAK)
[10:00:00]
END
