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First Move with Julia Chatterley
Stocks Surge Premarket After The Worst Day Of Trading Since 1987; Cancellation And Closures Rise In Response To The Coronavirus Outbreak, How Artificial Intelligence And Social Media Is Being Used To Monitor The Virus. Aired 9-10a ET
Aired March 13, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:13]
JULIA CHATTERLEY, CNN ANCHOR: Live from the New York Stock Exchange, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know.
Limit up. Stocks surge premarket after the worst day of trading since 1987.
Mass disruption. Cancellation and closures rise in response to the coronavirus outbreak.
And tracking the spread. How artificial intelligence and social media is being used to monitor the virus.
It's Friday. Let's make them move.
Welcome once again to FIRST MOVE. Guys, we've made it to Friday after a historic week of trading. Seismic pullbacks, global corrections around the
world. Just one more session, we will get there.
And for now, you can see the picture. U.S. futures all well and truly green. The S&P 500 actually hitting its upper limit premarket, so the
opposite of what we were talking about yesterday.
We're taking our cue from Europe. Stocks there bouncing as well after some incredibly beaten up levels in the performance yesterday. So while we have
green arrows rather than the red arrows we were looking at yesterday, I'm reticent to add more.
I have to tell you, the mood is still fragile. It was the worst one-day trading for U.S. markets since the crash of 1987. It was the worst ever
trading session for the European markets as well.
Asia playing catch up today, more ways than one. Like I mentioned, like we saw in the United States twice this week trading was temporarily suspended
in Japan today, South Korea, Indonesia, Thailand, and the Philippines.
The only outlier today, in fact, was Australia, managing a four percent gain, but again, from beaten up levels. What's moving futures higher today?
Well, I can tell you, I've said it a few times, things are just so beaten up here to have the odd pullback; a positive session actually makes sense
at this stage.
But there is -- and this is important -- growing expectations, I think that policymakers are waking up that we are going to see greater stimulus to
support economies around the world.
This hopes that U.S. Congress can agree on stimulus measures today. There's even talk that Europe -- Germany -- might start spending too, but the
monetary side is also crucial.
Central banks like the PBOC in China, the Federal Reserve, all ensuring that financial systems don't seize up. That banks to lend to businesses, to
people. Governments can still borrow ultimately, if they need to.
This is a lesson that we've learned from the Great Financial Crisis. But I have to say, as we've been saying here all week, this is a medical crisis
that's creating an economic crisis, and we need to focus on cases, and perhaps also how quickly the sick get well.
Let's get to the drivers. Christine Romans joins me now. Christine, I don't know what to say about this, incredibly beaten up levels. The shift lower,
the speed of the correction that we've seen here, record breaking as well.
A bit of a pause here on Friday would be welcome, but also brewing expectations that policymakers are waking up.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes. And we heard -- look, we heard from Nancy Pelosi, the House Speaker late last
night that they had resolved almost all their differences with the White House and Treasury Secretary Steven Mnuchin over what kind of -- what kind
of stimulus that the country should be embarking on.
So there's some hope and I don't want to -- I don't want to make too much of it, but there's some hope that maybe they could do something here very,
very soon.
I know the Treasury Secretary should be speaking momentarily on another television network, so we'll listen very carefully to see if there's any
kind of progress that both the White House and Congress can talk about there.
But also, I think you have expectations for just a bounce from these lows. I mean, a snap back here this morning. You know, we've only had, well, this
would be the fourth move higher in three or four weeks, three and a half weeks and those moves have been ferocious when they come. But they've also
been temporary. Right?
They've been found with more -- followed by more selling, so I just think it's such an interesting and maybe dangerous moment here right now, because
we don't have clarity, what kind of damage all of this social distancing and this pause on a strong economy and it is a strong economy.
We hit the pause button on a strong economy. What is that going to do? How long will it take? And will it, you know, help us on the public health
crisis part of this story, but hurt us on the economic side of the story?
CHATTERLEY: It's such a great point. There's no economic model for a systematic shut down of pockets of the economy.
ROMANS: There isn't.
CHATTERLEY: So whatever we've seen in the past, this is something completely different and I think we've been grappling with that now, and to
your point about the fact that we're simply not seen green for so many sessions is why I don't trust it at this stage given the volatility.
[09:05:08]
ROMANS: Me, too.
CHATTERLEY: The Federal Reserve yesterday, I want to mention what they did as well, that provision of cash, at least in the short term, we have
learned lessons that despite what's going on in the medical side, the pullback that we've seen there, the struggle, the financial gap that it's
going to create for businesses and for people as well, you've got to keep the system greased. You've got to get the system working. And we have
learned that lesson at least.
ROMANS: And we have, and you can see that the Fed is standing ready. That's why there's been some of this criticism that Congress hasn't done more.
There's been criticism on the other side of that this is what is kind of funny and a terrible kind of gallows humor sort of way that Wall Street,
which has been fearing sort of socialism in the name of Bernie Sanders or Elizabeth Warren is now clamoring for stimulus from the Federal government
to try to get out of this mess, which is a little bit ironic.
But that's where we are at this moment where the markets are saying they'd like to see more.
Ken Rogoff, of course, who is a famous crisis economist, says we need more stimulus quickly. Mohamed El-Erian says that you need to have a package
rolled out very quickly with, you know, three different phases really, of stimulus to help people, to help workers, to help people who aren't
working, to help businesses, and then also to manage for what could be, you know, the tail of this when you're trying to restart an economy that has
been stopped.
All of this, really you're right to point out that we just have never seen a crisis quite like this, a public health crisis, trying to make sure it
doesn't turn into a financial crisis.
CHATTERLEY: Yes, absolutely, and if you're going to tell people to be responsible and to stay at home, you have to support them because if they
need to earn money, they're going to go to work no matter what's going on, quite frankly.
So measures required. Christine Romans, great to have you with us. Thank you so much.
ROMANS: You, too.
CHATTERLEY: All right, to Washington now. As Christine mentioned, U.S. House Speaker Nancy Pelosi says congressional negotiators are close to a
deal with the White House on a coronavirus relief package.
Coronavirus cases in the United States have now jumped to around 1,700. Joe Johns is live at the White House for us.
Joe, Nancy Pelosi also said, testing, testing, testing to reporters. In the absence of that, what can Congress do? What are the details of whatever
they can hopefully agree to today that will, at least in the interim, provide some degree of support?
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, we're really watching very closely to try to get some sense as to what they're going to put out
there.
But we do know a little bit about the plan that Nancy Pelosi says has is close to being agreed to, and that sounds like quite a large plan. As you
mentioned, the issue of testing.
What Democrats on Capitol Hill are pushing is the notion of testing for everyone who wants it for the coronavirus, including people who do not have
insurance. So that's the first peg of the plan that she talked about in a letter that she sent out to colleagues just last night.
There's also the enhanced unemployment insurance, paid emergency leave. That's 14 days' worth of emergency leave and some other things thrown in
there.
These are the ideas that Nancy Pelosi is pushing up on Capitol Hill. She has been in contact with Steven Mnuchin, who is the President's Treasury
Secretary. There was a tweet just a little while ago from the Deputy Chief of Staff of Nancy Pelosi saying that Mnuchin and Pelosi spoke on the phone
just an hour and a half or so ago.
So there is hope that something could be passed by the House of Representatives as early as today to try to get the ball moving in the
economy, then it'll be up to the United States Senate. They're out today, but they are expected to come back next week and work on this package.
The President does have some concerns, of course, he even tweeted this morning that the thing he is most interested in is a payroll tax cut. He's
been pushing it again and again. He said that is the thing in his view that will make a real difference.
So we'll see what they come up with. Hopefully, Mnuchin will be out here in a little while and maybe we can get a few questions to him. Back to you.
CHATTERLEY: Yes. Payroll tax cuts sounds great, but how on earth do you quantify the cost of that and it just doesn't have the vote. So keep
tweeting.
JOHNS: Absolutely.
CHATTERLEY: Joe Johns, great to have you with us. Thank you so much for that.
Now, the show won't go on from Broadway to NBA basketball to Disneyland and now football. The Premier League in Europe, or at least in the U.K., no
large scale event, seemingly immune from the coronavirus shut down.
Anna Stewart joins me now. Anna, we are seeing this all over the developed world, mass gatherings as steadily, but surely being cancelled, delayed,
postponed. But I also want to hone in on what isn't being shut down -- the tube in London, the subway here in New York City.
There's a recognition as well that you simply can't stop, and when it's key workers like healthcare workers, they simply have to do their job and we
have to support as well.
[09:10:02]
ANNA STEWART, CNN REPORTER: It's a really important point. All the headlines, of course, are regarding those big events, particularly sporting
events that have been shut down.
Disneyland, we can show you some of those on your screen. But as you say, in many countries, where you are in New York, where I'm in London, not much
has changed, the tube still works.
Most schools, hospitals, nursing homes are all still open and operating, as usual. And what we see here is a really broad spectrum as to how countries
deal with coronavirus.
You've got Italy very much on one end of the spectrum, and of course, it is a very badly impacted country in terms of the virus itself, but it's
essentially under lockdown. Schools, bars, restaurants, shops -- all shut.
Here in the U.K., there's less focus actually on containment. The country doesn't believe it can self-isolate the whole population. They say they
just want to delay the virus and try and push it further into the year, so when the National Health Service isn't as under pressure from others and
winter related illnesses.
Also, as you were mentioning earlier, the social and economic impact of some containment measures have to be weighed up and measured.
For instance, if you shut down schools, elderly grandparents may end up looking after children. Now, they are an at risk category, and so that
could produce further fatalities, increase fatalities.
Equally, school shut down, parents may have to look after children, and that means a more of an economic fallout, and much sooner than perhaps
needs to be.
And as we're being told, as far as it may last not weeks, but months -- Julia.
CHATTERLEY: This is so critical. I think, as we see more and more leaders trying to analyze and scramble to address how to tackle this, that key
point about what impact school closures have, bringing grandparents in perhaps if you simply don't have the child care, and that subset of the
population at least so far, the data suggests is the most vulnerable. This is so crucial, Anna.
The other thing, and I was just mentioning it briefly with Christine Romans, we have to be responsible as workers. Governments have to support,
if you don't get paid, if you don't go to work, because if you're sick, if you go to the office, this thing multiplies. We have to behave responsibly.
STEWART: We do. Governments can do what they can on the fiscal policy side of things and we're seeing that in many countries, and then it comes down
to you, you know, we're being told wash your hands regularly and thoroughly for a minimum of 20 seconds. You can sing Happy Birthday to yourself twice
a week.
Or I'm using "Wannabe" by the Spice Girls. Don't touch your face. Don't make contact with people if you don't have to. You know, forego the
handshake, try the tap of the foot, it is quite fun.
And if you are on the tube and someone is coughing or sneezing, just simple things, just moving away. And of course, if you are the one that is
coughing or sneezing, take yourself home. Now is not the time to stoicism.
Workers do need to self-isolate and consider the people that they are around, but these measures are really quite simple and effective -- Julia.
CHATTERLEY: Yes, it won't last forever. We've just got to be responsible now. Anna Stewart, thank you so much for that.
All right, in just a few hours, restrictions on European flights coming into the United States take effect.
One of the few countries that is excluded from President Donald Trump's ban is the U.K., of course. Nic Robertson joins us now and is at the London's
Heathrow Airport.
Nic, great to have you with us. I was looking at flight availability, though between the U.K. in the United States overnight and this morning and
quite frankly, there are no flights, so it feels like this system has already stopped.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: There are some people we've spoken to here today who are finding that -- a couple -- an American
couple on holiday in Spain got a call in the middle of the night from their children saying get back home as fast as you can. They got to the airport
in Spain, they found that they couldn't fly directly back to United States, that they flew to London instead.
They said that they were lucky enough to get a ticket here, but are now still trying to figure out how to make that last hop across the Atlantic.
Other people we have been talking to, luckier in the ticket lines, saying that they have been told either by the universities who are on exchange
programs or a couple here on business and pleasure we spoke to who said look, President Trump's message was garbled, we're not sure if he'll put
those restrictions into apply to the United Kingdom coming up, and therefore they were getting home as quickly as possible.
What they all said was, though, that they were paying a lot more for their tickets to do that. The British Prime Minister has really laid out for the
British people, but for all those visitors here in the U.K., as well what is in store coming up and it's not a good picture, this is how he laid it
out.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, U.K. PRIME MINISTER: This is the worst public health crisis for a generation. Some people compare it to seasonal flu. Alas, that is not
right. Owing to the lack of immunity, this disease is more dangerous and it's going to spread further and I must level with you, level with the
British public, more families are many more families are going to lose loved ones before their time.
(END VIDEO CLIP)
CHATTERLEY: Nic, maybe I'm more susceptible to this because I'm a Brit. But when I look at the leadership responses around the world, and I watched his
entire speech, it actually -- it hit me that this was someone who was going, this is the reality of it. This is what we have to deal with. And
this is how we're going to have to deal with it. Do you agree?
[09:15:17]
ROBERTSON: I do. The British government has been trying to sort of bring people along gently, not push them into situations that they don't think
that they can withstand, like the long times that, you know, children being off school, like not going to crowded areas. They've been trying to keep
the message and gently ramping it up here -- the Prime Minister has clearly ramped it up.
But I think what's really interesting here is whatever the leaders are saying, you know, what we're finding here talking to people, people get it.
They get what this is about.
I asked some of those passengers going back to United States, you know, what you're leaving behind here in the U.K.? Do you feel you're going to be
safer from the virus in the United States? They said absolutely not.
And I think you know, people are struck. They've heard what we've heard all heard from the British Chief Scientific Adviser to the Prime Minister today
saying that, you know, it is almost necessary for populations to catch the virus because as populations, we need -- we need sort of immunity and the
only way that you can get that what he called herd immunity is for enough of the population to catch the virus, so we're safe from it next time.
I think all these messages are beginning to take root and whether people's own leaders are telling them, whether you're in Canada and you see your
Prime Minister now in isolation with his wife because she has tested positive. There's enough information out there for everyone to understand
even if they're leaders aren't leveling up or aren't just putting that information out publicly yet.
CHATTERLEY: And that's our job, too. Nic, thank you. It's such an important reality check. It's dawning and we have to accept it and do what we can and
we carry on. Thank you. Nic Robertson there.
Let me bring you up to speed with some of the other stories that are making headlines around the world.
Canada's Prime Minister Justin Trudeau is in self-isolation after his wife tested positive for coronavirus. The measure is a precaution as he is not
currently experiencing symptoms, he will continue to carry out his duties.
Brazilian President Jair Bolsonaro also currently awaiting for the results of a coronavirus test, this after his Press Secretary tested positive for
the virus. Mr. Bolsonaro and the Press Secretary met with President Trump in Florida the past weekend.
U.S. has hit several Iranian backed militia sites in Iraq overnight. The bombing was in response to a rocket attack that killed two Americans and a
British servicemen there Wednesday.
It's the first time an American has been killed in Iraq since December.
All right, we're going to take a break here on FIRST MOVE, but coming up, we've got trading about to start in the United States.
We are counting down to a strong market rebound, bouncing admittedly from pretty beaten up levels. We'll explore the reasons and whether it's
justified after this. We're back in two. Stay with CNN.
(COMMERCIAL BREAK)
[09:21:11]
CHATTERLEY: Welcome back to the New York Stock Exchange and FIRST MOVE. We are counting down to another volatile session. The volatility continues,
but for this session, we are expecting a higher open and that is the picture.
The Dow is set to bounce more than 1,000 points. S&P futures hit their limit up a few hours ago. So once again we use exchange traded funds that
track these markets.
Right now, they're showing a rise of around five and a half percent. Just a further example of the massive swings that we've seen on a daily basis here
with majors. The majors have fallen some 26 percent, just to give you a sense from record highs. It's the swiftest plunge into bear market on
record.
Oil also moving higher for the first time in three days. We've got Brent and WTI up some five percent right now. Yes, we're struggling to show you
what's going on there, a few technical glitches. But that, again is an illustration of the markets.
Oil has been on track for its worst week since 1991. Let's get some context.
Dryden Pence is the Chief Investment Officer for Pence Wealth Management and joins us now. Fantastic to have you on the show, sir. Your perspective.
Is this an understandable reaction, the pullback, the speed, or are we at the stage where we can call this an overreaction?
DRYDEN PENCE, CHIEF INVESTMENT OFFICER, PENCE WEALTH MANAGEMENT: Well, I think it's an overreaction because you have an issue of fear in here and a
little hysteria worked into the market.
You're seeing the big moves in and out, so I think the market overreaction is there, and the thing we have to do is kind of combat that with a little
calmness and taking a look at really what happens here because the period of time that this is going to affect the economy itself is not that long.
This is probably a 60, 90, maybe 120-day phenomenon. But it is not something that's going to wipe the economy out for an entire year. It is
something -- people get over this in about 14 days, and then they're going to be able to go back to doing what they're doing.
So this is -- I think there's an overreaction to this. But we're seeing good, strong policy response, and I think that we'll begin to see that
almost on a daily basis and that's going to help recover from this.
CHATTERLEY: I think a lot of the problem that's been created here is the inability to gauge in terms of numbers, in terms of cases. You said
something there that I think is very interesting. You said actually, we perhaps need to focus less on cases and counting and testing and talk about
how quickly people get well and how many in terms of proportion get well from this.
PENCE: That is exactly right. The most important number here is not how many people get sick, but rather how quickly they get well.
Most -- 80 percent of these cases are mild, and you're over it in 14 days. It's uncomfortable, but it's not the end of the world.
And then you're able to go back and go back to your life and you've built up the antibodies in your system during that period of time.
So the most important number here is how quickly people get well, and that way they can get back to their lives. We can get back to a relatively
normal economic trend that we were on before this started, and that's about 14 days.
CHATTERLEY: So in your view, we're talking about perhaps two quarters, a technical recession, but then a swift pickup. Because a lot of the debate
as well, and I think again, the fear that we're seeing in markets is that inability or willingness to put a time horizon on this, but also whether
it's a V-shaped pickup or a U-shape, because that matters, too.
PENCE: I think the most important thing here is to understand time, time for reaction for governments, time for reaction for people, time for
reaction for markets.
Markets tend to react more quickly, and in this case, they overreacted, we think. But I think that we recognize you've got about 14 days, as people
start getting better.
[09:25:10]
PENCE: Because it's not uniform as how this is affecting the world, it's more of a rolling period. And that's why we're saying it's a 60 to 90-day
event before people are beginning to get back. And government responses are going to kind of bridge people on these two to four-week periods, and
that's going to help take care of the economic risk that people see to the market.
And now what we need to do is focus on -- the markets, taking the emotional risk out of the market, and let people get begin to get back to normal.
Certainly, there's a health risk. This is going to get worse before it gets better. Every day, you're going to see bigger numbers as we do more
testing, but that's kind of a result of what's already out there in the environment as it is.
And so I think the thing is, people don't need to overreact to that. We know that part of it is bad, but again, people get well. We have now
100,000 data points on this illness, and those hundred thousand data points say that the mortality rate is lower than some of the other viruses that
we've seen and that the recovery rate is a reasonable period of time.
CHATTERLEY: Dryden, we're running out of time. So I'm going to finish there with you. But I know this stocks that you've come on to talk to us about
before, the Amazons, the Visa, the MasterCard -- you're arguing are still the right buys.
And these are resilient in this kind of environment. In fact, this environment plays to those stocks. We will get you back on the show to
discuss that, but for now, I think even just the reality check and a different way of thinking about what's going on was incredibly beneficial.
Dryden Pence, thank you so much for joining us.
We are counting down -- we are counting down to the market open this morning. A real shift on what I was here, or at least on this show,
discussing with you yesterday.
Look at that. Strong gains expected at the market open. We'll be here. We'll be covering it. Stay with us. We're back after this.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE live from the New York Stock Exchange. That was the opening bell, and I think the clearest illustration
of what's going on right now, just one individual on that balcony ringing the bell. Social distancing. You have it there, front and center.
Now, we've gone from route to relief, at least for this session, U.S. stocks are bouncing significantly in early trading, a bit of respite from
the fierce selling of the last two sessions.
Stocks fell just shy of a 10 percent drop yesterday, just to once again illustrate what we're talking about there. That was the worst session that
we've seen for U.S. majors since the crash of 1987.
The Dow fell from 2,000 points. I think what's also helping or at least what we're seeing is a significantly firmer 10-year Treasury yield. We're
93 basis points just shy of one percent there, which is pretty important, remember, because we did see the Federal Reserve adding cash, short term
cash to the system just to stabilize what was going on in these markets.
We bounced off all-time lows, perhaps reflecting the need, I think for investors to raise cash as well. We're still pricing in aggressive action
next week by the Federal Reserve.
Goldman Sachs and Deutsche Bank anticipate a rate cut of almost one full percentage point. In fact, Goldman Sachs and Deutsche Bank is saying --
they were saying fact that it could come as early as today.
So they may not even have to wait for the meeting next week. They could simply decide to take some extra actions.
Okay, so the key to controlling the coronavirus outbreak begins with tracking occurrences and seeing the spread and one piece of technology
proved invaluable in the early days of the outbreak.
The team behind the HealthMap was the first to alert the medical experts outside of China about an unidentified pneumonia like case in Wuhan in late
December, cases in Wuhan.
HealthMap tracks the spread using AI that analyzes Google searches, social media posts, blogs, and other data. It is now being used in the early
alerting and Reporting Project, an international collaboration among public health institutions that aims to quickly detect biological threats.
John Brownstein is the founder of HealthMap and the Chief Innovation Officer at Boston Children's Hospital. He's leading the team tracking the
disease in the United States.
John, it's so great to have you on the show. Did I describe what you're doing, you're simply looking at noise on social media in blogs and chat
rooms, just to get a sense of where occurrences are taking place.
JOHN BROWNSTEIN, FOUNDER, HEALTHMAP: Yes, absolutely. I mean, the reality is it's so difficult to get insights about what's happening on the ground.
We know the challenges governments have, even here in the U.S. and across Europe, the challenge of reporting cases, but what we actually can identify
is people that are reporting illness or people that are talking about their own illness through social media, through blogs, and chat rooms, and they
were doing this early on in China well before we were seeing official reporting.
And that's why we were able to identify these events in late December well ahead of what came through official channels.
CHATTERLEY: You know, this, to me is fascinating and I can see some really obvious challenges as you look at what's going on across nations, culture,
language barriers when you're looking at things like social media.
But I think the key one, and it's a challenge that we're talking about on a daily basis, how do you identify the difference between flu, the
coronavirus and a common cold? How are you managing to do that? How did you do that with Wuhan?
BROWNSTEIN: Well, it's very challenging, of course, because, yes, what we're talking about is a respiratory illness that looks very similar to
what we see circulating every year. And so the challenge we have is identifying reports.
Now, it turns out that local news is very good at looking for aberrations, and we saw this mysterious report of a cluster of cases around a seafood
market, and then chat room discussion on Weibo and WeChat. And people are actually pretty tuned at looking for signals and that's what we rely on.
But of course, it's really challenging right now, as we're seeing the global march of this virus and the cases that are accumulating around the
world.
We still have influenza, and we have other viruses that are circulating, and so being able to distinguish is really challenging.
Now, there are different symptom sets and we rely actually on tools even within the U.S. around crowdsourcing, people submitting symptoms and
there's a slightly different set of symptoms people experience with coronavirus and flu. We can separate that.
[09:35:04]
BROWNSTEIN: But ultimately, what we want to do is connect all this data mining and crowdsourcing of people with mild illness with testing data. And
that's really the sort of where this future of these technologies lie. It's not just about capturing --
CHATTERLEY: Don't worry, John, I didn't say anything. I think you're hearing someone in your ear. But no, please continue if you couldn't
remember what you were saying there. You were simply saying it's about building a picture here.
BROWNSTEIN: Yes, exactly. And so the idea is that we're trying to be able to basically build a picture that combines all the social media data, with
the reporting data, the testing data that we so incredibly need right now.
And so when we can merge these datasets, we're going to get the clearest picture of what's happening with this outbreak.
CHATTERLEY: What is the picture that you're building in the United States? Because it ties for me directly to the fear, to the confusion that we're
seeing in financial markets, and for individuals that we simply don't really understand how big the outbreak is around the world, but here in the
United States, in particular, and given the debate over the lack of tests and testing, it always comes down to your artificial intelligence and
science helping us build that picture. And perhaps, then we can best direct resources to.
BROWNSTEIN: Right. It's a real challenge, because what we're faced with is such a broad range of illness, and mostly people are experiencing mild
illness, which means they're not actually headed to the Emergency Department or Urgent Care Clinics. So how do we even know what the real
sort of depth of cases that exists?
We've been working with various tools like chat bots, right, AI-driven conversational assistants that allow people when they search on Google with
a set of symptoms, they might interact with a chat bot, get insights about what they may have, and then from that point, they may decide to self-
quarantine because of the fact that they don't have a test available.
So integrating AI into what we do as a society, which is go online and search for symptoms actually can help us get a little bit faster into
curbing the spread of this disease while we're waiting for these tests to emerge.
CHATTERLEY: What's equally important here, John, for the economy, for individual people, just to keep nations going, cities going as best we can,
while we deal with this, and to not exacerbate that the shock that it's creating is to understand where fear and what the social impact of what
we're seeing here is, too.
And I know this is something else that you look at where are you seeing panic? Can you separate that and what role and responsibility is social
media and traditional media playing here? Are they helping or they hindering in your mind? What can we do better?
BROWNSTEIN: It's a really great question. It's really you sort of have this threading of a needle of the value of social media and the ways in which
people use it in an altruistic way to sort of communicate important science, to actually engage in a conversation to help educate people around
the importance of say, social distancing.
But there's also this sort of negative side, which is injection of rumors and issues around beliefs that may not be grounded in science.
And in fact, part of our work has been tracking sort of not just the spread of disease, but the spread of rumors online. So the idea is on social
media, you'll see a negative sort of viewpoint sprout up and then that will spread like wildfire, faster than anything that is a positive message that
might come out from an agency like the W.H.O. or C.D.C.
And so we're tracking these rumors, trying to mine them because the more that we can collect these sort of misinformation posts, we can try to
counter it with science, but it's really sort of dealing with a flood of these types of things and it's really challenging as a public health
agency, who is also trying to respond to an outbreak to also respond to this sort of social messaging that's happening.
It's sort of a real double edged sword when we look at these social posts.
CHATTERLEY: Yes, we've been reiterating on the show that we also have to look at recoveries and that in 80 percent of cases, so far, the data is
telling us that that people have mild recoveries and we need to remember that as we deal with this, quite frankly, and try and keep some element of
perspective.
John, I know you've been speaking to the C.D.C. here in the United States, the Centers for Disease Control, what are you advising them and what
measures work in your view? Because I know you trained as an epidemiologist as well.
So I want to draw on epidemiology for the 21st Century, which this feels like versus traditional background here as well, because we are seeing
draconian measures in Italy. We've seen the flight cancellations between Europe and the United States. What in your mind works now given the
situation we're dealing with today?
BROWNSTEIN: Well, we're moving to a different phase, right? The containment strategy, while maybe was a thoughtful, you know, at the beginning, we
recognize that with a virus that spreads asymptomatically, it's really challenging to contain it.
[09:40:03]
BROWNSTEIN: And so now we're in a mitigation phase. And so while you know, there's debate around travel bans, the reality is this virus is already
here locally in the U.S., and many, many parts of the globe, most parts of the globe.
And so now we're into sort of the old traditional epidemiology, which is social distancing, closures, various ways that we can limit our interaction
with people.
Unfortunately, you know, this is not high tech, this is low tech interventions, but they work. They work, you know, as we heard to flatten
the curve, keep the spread of the virus slowing down to the point we don't overwhelm our health systems. I mean, that's the real big challenge.
I mean, technology can help in many ways, because people can go to the web to learn more to help decide whether they might be at risk, or they can use
social technology to engage with people while they're in isolation.
So technology has a role. Data Science has a role here, but when it comes to actually limiting the spread, unfortunately, technology is not going to
do too much to keep you from interacting with other people.
And so that's really what people need to be remembering is that you know, basic shoe leather epidemiology and public health is all about trying to
limit sort of your contact with those that might have the virus.
CHATTERLEY: John, incredibly quickly. On March 5th, you said that you didn't think this was a pandemic, just based on what you were seeing. The
World Health Organization decided to denote it a pandemic. Is this now a pandemic, in your mind based on the data that you are collecting? And is it
important to distinguish this? Because I do think that also made people go whoa.
BROWNSTEIN: Yes, I mean, in some ways, it's somewhat semantics. We were seeing transmission happening in many parts of the globe. But now at this
point, with this amount of sustained transmission in so many different countries and the expectation that this virus is really going to traverse,
you know, the globe and no particular population will be unlikely to be exposed. It's really, you know, we're in a pandemic phase, absolutely.
And you know how that changes our sort of outlook? I mean, hopefully this means that people really will take these events seriously and will follow
the sort of recommendations of the public health agencies that are really working night and day to try to figure out how to slow the spread of this
virus.
CHATTERLEY: Yes, if it was only useful to galvanize leadership and action from nation's leadership than necessary, otherwise, semantics. John, such a
pleasure. Thank you so much for joining us. John Browstein there, the founder of HealthMap.
All right, let me give you a quick look of what we're seeing for U.S. markets at this moment. We've lost a bit of steam here. We're still up
three, three and a half percent, but not the five and five and a half percent at the open. More analysis to come. Stay with us.
(COMMERCIAL BREAK)
[09:45:51]
CHATTERLEY: Welcome back to FIRST MOVE. We do see U.S. markets up around three percent right now, so losing a little bit of steam.
In the last two minutes, we're now above four percent. These markets. Brian Belski joins me now. Chief Investment Strategist at BMO Capital Markets.
Brian, I can't blink without losing or gaining one percent at this moment. Has fear overtaken any fundamental analysis here? And does that matter at
this moment?
BRIAN BELSKI, CHIEF INVESTMENT STRATEGIST, BMO CAPITAL MARKETS: Great question. Honored to be on with you and to speak to your crew today around
the world.
I would say this, we authored a piece, February 27th entitled "Epidemic and Fear." We also authored a piece the same day "Panic is not an Investment
Strategy."
Clearly, in the two weeks that have followed, both of those reports unfortunately have been correct. Fear continues to engulf, let's say
investors, the market, mom and pop locking down Main Street.
This is nothing to do with fundamentals and we wrote another piece last night in terms of -- our conviction is resolute. But the template
notwithstanding. So what does that mean, Julia?
It means that there is no "magic bullet" that's going to stop the markets from receding, unfortunately, because this is all about fear and rhetoric,
quite frankly and we're dealing with the unknown.
We are in a society that can't help itself from watching its iPhone device every three seconds and reading bullet points and not saying that the
information is bad, Julia, but we're reacting to that information instead of what I like to what I like to call the 3P's of investments, which are
perspective, poise, and process.
Now is not the time to be making binary decisions, meaning buy or sell; now is the time to be speaking to your financial advisor, your asset allocator,
your relationship manager in terms of positioning yourself to make sure that coming out of this, you are going to be owning the best equities in
the world, which we believe most of them are in the United States or some in Canada as well.
So we think now is the time to be shoring up your positions and be much more diligent in terms of what you're doing with respect to your portfolio.
CHATTERLEY: You know, perspective and poise is tough investment, I think we need to incorporate that in our real lives as best we can, Brian, quite
frankly.
And to your other point, I do have the best team in the world who are awesome. Have you sold anything in the pullback --
BELSKI: I have not --
CHATTERLEY: Wow, okay.
BELSKI: It's a great -- it's a great question. So we run seven equity portfolios, five for our clients in Canada and two in the United States.
Because we made some positional changes in terms of our strategy, we are going to be publishing some changes, but not until after the close today,
principally because we want to see how things shape up.
We are longer term investors, we still believe by the way that we are in a 20-year secular bull market. Yes, you cannot deny that a cyclical bear,
meaning a very short term bear market has occurred because we are now down more than 20 percent from our recent peak in the S&P 500. That's the
"textbook definition," Julia.
But given the fact of the duration and accelerated duration in terms of move that we've seen from the upside, I think -- from the highs, I'm sorry
-- I think we're going to see the same thing going back.
So I believe that this is something we've never seen in my career over 30 years, and I think the recovery because it's been so fear-led, that I
believe that fundamentals will ultimately reign supreme, and investors will come back to equities and the recovery that we're going to see in the
coming months is going to be one for the record books, just like the selloff has been.
CHATTERLEY: Yes, it's fascinating. As you said, there is no template. You used the template word. There is no model for what we're seeing here and
the pockets have shut down.
Brian, very quickly. You said also that you're waiting to see how today plays out. What are you watching? Just in the short term. What do you want
to see and how will you be guided by this session today?
BELSKI: Well, let's see how we respond. Again, nothing from monetary policy or fiscal policy is going to change this. We just need the markets to
settle down. We need emotions to settle down.
But most importantly, we need to start to employ the law of diminishing returns in terms of headlines. We need to see less headlines on coronavirus
or COVID-19 and we need to see people settling down and doing what Americans do best. Remain resolute, strong and convicted.
CHATTERLEY: I feel so much better speaking to you. Brian Belski, a pleasure to have you on. The Chief Investment Strategist at BMO Capital Markets.
Thank you so much.
And again, big heart to my team, you are awesome. We're back after this. We are higher by three percent. More analysis to follow.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Another day, another stock market swing. We are up this time. I don't want to make light of it, but we are
higher by some 2.7 percent on the Dow, 3.2 percent on the NASDAQ as you can see there.
Clare Sebastian joins me. Clare, I made the point earlier and I'll reiterate, building expectations that policymakers are waking up here, but
also simply bouncing from incredibly beaten up levels.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, the extraordinary thing about what we've seen recently is that it took just 16 trading
sessions for the S&P 500 to go from record highs into a bear market. So it's a very much a bounce to be expected off the back of that.
And there has been some better news overnight. We now know that the Senate is going to be in session next week despite a planned recess. We've had
Secretary Mnuchin on television this morning saying that the negotiations are going well. A very sort of strong, you know, manifesto and we'll do
whatever it takes.
He kept saying there will be liquidity. This is not like the financial crisis and things will bounce back.
So that is sort of helping to lift sentiment as well. I think the Fed's move yesterday, adding, you know, one and a half trillion in liquidity to
the financial system over the course of two days is sort of playing in late as well.
But we are off the highs quite significantly now, Julia, and I think this is still as you made the point at the top of the show, this is still very
fragile, A, because of the emotion, and B, because a growing number of economists are now coming out and saying, we do expect there to be a
recession. That's defined as two quarters of contraction. So that is really what investors are now grappling with.
CHATTERLEY: Yes, it's the length of that recession that we simply don't know at this stage, and all we're trying to do throughout this house is
perhaps take some of the fear out of it and bring it some calm.
The problem is the markets don't have that right now. We can't predict whether we'll even finish this session in the green, Clare. Expectations
for stimulus potentially even a one percentage point rate cut, the Fed acted yesterday to calm the bond markets, too.
We are seeing greater coordination, even if that's accidental.
[09:55:01]
SEBASTIAN: Yes, that certainly is what the markets have been looking for as well. Coordination both between governments and Central Banks and
coordination internationally as well.
Secretary Mnuchin did say, when he did this interview this morning that he has been talking on the phone to the leaders of the G-7, so that is
something certainly positive.
But look, as yet the Trump administration has yet to unveil this new stimulus bill. So I think people are still waiting. There is some
frustration out there that while other governments have acted, they have yet to do so, but overall, Julia, this market does seem to have more of an
impetus to sell right now than to buy.
I think we really saw a shift in tone yesterday, which is an extraordinary day down at the Exchange where we tipped into a bear market. People were
genuinely, you know, sort of concerned about how this is going to go and how the uncertainty is going to play out.
CHATTERLEY: Shell shocked. We don't have a model for this. Great expectations on D.C. what can they come up with? That was a great point,
too, Clare. Great to have you with us. Thank you for that.
All right. We are higher at this moment by some two and a half to three percent. We'll be back in a couple of hours' time with "The Express," but
for now, that's it for the show. You've been watching FIRST MOVE, try and get some rest this weekend. It's great to have you with us.
(COMMERCIAL BREAK)
[10:00:00]
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