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First Move with Julia Chatterley
U.S. President Trump Says The Government Is The Quote, "Last Resort" On Testing; The French Prime Minister Announcing That Nation's Reopening Plan At This Hour; Chasing Coronavirus With The Man Known As The Master Virus Hunter. Aired 9-10a ET
Aired April 28, 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]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
State Solution. U.S. President Trump says the government is the quote, "last resort" on testing.
Green France. The French Prime Minister announcing that nation's reopening plan at this hour.
And chasing coronavirus. We speak to the man known as the master virus hunter.
It's Tuesday. Let's make a move.
Welcome, as always, to our FIRST MOVErs around the globe. As always, too, wherever you are, I hope you're staying safe and you are healthy.
I do want to begin today's show by telling you that for all the suffering and the heartache that is still being felt around the world.
More than 900,000 people have now recovered from COVID-19 worldwide. We've successfully flattened the curve in much of the United States and in Europe
following on from Asia, of course, too. And that is a huge milestone in this global battle, and I do think we need to keep reiterating that and
keep focusing on the good news here, too.
Now, at this hour, as I mentioned, France expected to become just the latest country to ease its lockdown measures. We will bring you all the
details on that.
Hopes that governments can reopen economies successfully have certainly helped drive sentiment, I think, in financial markets and stock futures, as
you can see on the screen are green once again.
Key today, though, guidance about the future or lack of it, I have to say. 3M, Xerox and PepsiCo, all withdrawing their 2020 guidance.
Companies simply have no visibility as to what happens next. We'll be talking to PepsiCo live here on FIRST MOVE in just a few moments' time to
get their sense of what they can tell us, even as they withdraw guidance.
Something else to keep an eye on as well, U.S. crude, hugely volatile on low volume once again today, that follows Monday's almost 25 percent drop.
The British oil major BP saw profits plummet in the first quarter. The CEO in fact, calling it a brutal environment of which we've often discussed on
the show.
Here's the global picture as well for stock markets. Europe, as you can see is higher. Asia was a mixed bag. Hong Kong though rising more than one
percent as civil servants there get the go ahead to return to work next week, too. Another positive sign of the global restart.
But as we've discussed many times on the show, testing times require testing measures and more testing capabilities are needed.
That is where we begin today's drivers with the White House saying the Federal government is the "supplier of last resort," quote on COVID-19
testing.
One official telling CNN, the goal is for each state to test at least two percent of its residents.
John Harwood joins us now on this story. John, two percent is interesting. Is that enough? And over what time period I think will be the question, but
what is the White House doing behind the scenes to ensure that all the supplies to the states are required because I think this is a critical
angle hereto?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, I think what the White House is doing, Julia is responding to some of the pressure it has been
getting from governors and from the press coverage of this issue from public health authorities.
Everyone agrees that the key to getting on top of the virus and being able to safely and confidently reopen the economy is a huge ramp up in testing.
The administration has kept its distance so far, indicating that that's a priority for the states, but as the drumbeat for more testing has
increased, so has the Federal and the White House and the administration involvement.
Last week, they said that they were going to invoke the Defense Production Act to increase the production of swabs. Yesterday, the White House came
and talked about a testing blueprint to assist states. The question is, do they get pushed further by Congress to take a more -- to grab the reins
more fully to try to make sure that we have more testing.
Vice President Pence said yesterday, Julia that we're going to be at two million tests per week by May. That is somewhat higher than what we have
right now. But it is way below what public health authorities think is necessary to be able to deter outbreaks if they occur in the fall when the
virus returns. There's a presumption that it will come during the summer.
And as for that two percent goal that you mentioned, the question is two percent how often. We tested nearly two percent of the U.S. population so
far, but that's going to have happen over and over and over again to monitor the spread of this virus.
[09:05:04]
CHATTERLEY: Absolutely. I mean, that's what I was asking about the time period here. Two percent of what and when, quite frankly. What about
ensuring the supply chain here? Because I think this is a critical part of it as well.
We've heard from various experts that it comes down to swab availability, reagent availability, even just the little capsules that you have the
reagent in as well.
Again, we come back to this idea of the reason why it needs to be done at a national level, a Federal level is to ensure that the supply chain is
there, and wherever it needs to be at whatever given moment. It sounds like we're not approaching that kind of strategy.
HARWOOD: We are not. What we're doing is the Federal government is piecemeal, saying we're going to help with this and that. I had mentioned
the swabs last week, but they haven't gone as far as what say Democrats have been insisting upon, a pandemic testing board nationally, something
that indicates a level of mobilization and control at the Federal level to make sure tests get where they need to be.
Congress is pushing, they put $25 billion in the bill for small business assistance that was passed into law, signed into law by the President last
week. They're now pushing for more in the next piece of legislation.
And given the way the White House under pressure has retreated, I would expect them to take a greater role, if not the full charge of the situation
that some people are demanding.
CHATTERLEY: Yes, we need more clarity, don't we on what their forecasts are for testing availability, even if they're not controlling the process.
And I think to your point, John, the pressure is only going to build on this White House to be clear about what the gain ground is.
Yes. John Harwood. Thank you so much for that.
All right, so while we're talking about this, let me give you the latest on coronavirus cases worldwide.
There are now more than three million infections. That's according to John Hopkins University. At least 212,000 people have now lost their lives as a
result of COVID-19. However, and I will keep reiterating this. I want to tell you that the total number of COVID recovered patients is now 902,129.
Every person matters.
Countries around the world are taking advantage of the slowing infection rates to restart their economies. New Zealand is into a less restrictive
lockdown. On Tuesday, 75 percent of the economy has reopened and citizens can now buy take-outs, and they can also hold funerals.
In Spain, this morning, the government is discussing the de-escalation of one of Europe's toughest lockdown regimes. Children are only now being
allowed outside for a limited time after being kept indoors for six weeks.
France, too, now unveiling plans to unwind a strict six-week lockdown.
Melissa Bell is in Paris for us. Not a moment too soon, Melissa, I know for the people there, but what exactly are we expecting this restriction
measure release to look like and over what time period?
MELISSA BELL, CNN CORRESPONDENT: Well, it was really the French Prime Minister who has just gone to his feet, Julia, in front of the National
Assembly to outline the plan for the de-confinement as it is known here in France because in many respects, locking a country down is almost the easy
part where you consider it.
It is announcing and figuring out how you're going to unlock it, how you're going to get it back to business as usual and what stages you're going to
follow, what parts of the population are going to be allowed, out how businesses are going to get back to get back to work without compromising
the progress that has been made in terms of fighting the pandemic.
That is the tricky balance, really, the governments are looking at now and the questions that countries like France with the fourth highest death rate
so far from this disease are looking at it, and you mentioned how keen people are to work out how they're going to get back their life as usual.
We've been watching on French media the travels of the French Prime Minister from his base in Paris to the National Assembly, everyone watching
his words, to see what he has to say.
Now, the difficulty is for him, we know that de-confinement at the end or the beginning of the end of this partial lockdown is due on May 11th. The
question is exactly how it's going to happen. We understand it is going to be in stages. We don't know yet whether things like mosques will be
obligatory in public. These are questions that he has yet to answer.
When will schools open? When will businesses open? What parts of the population will be allowed out again? And of course, this is a very
delicate balance that he's had to strike in preparing this speech today and this plan, Julia.
On one hand, you have the fight against COVID-19 that appears to be beginning to bear its fruit here in France with a number of people in
hospitals steadily declining for the last two weeks, and yet that hit the second largest economy in the Eurozone is taking continuing to get worse
and worse.
Already, we know that the French economy is going to be set back eight percent in 2020. We saw the highest rise in unemployment figures in March,
a record was set.
So, there is really that pressure of bringing the economy back online of getting the country back to business is really quite great. So we're
looking to hear what those measures are going to be and exactly how France will get back to business as usual.
But they've been very clear. It's not going to happen quickly. It's not going to happen all at once. It's going to be staggered and it's going to
take a long time for this country, as so many others, Julia, to get back to anything like what they were before.
[09:10:26]
CHATTERLEY: Absolutely. I'm watching live pictures now as those plans begin being given to us in detail. Melissa, I'm just looking at your
backdrop, Paris in springtime, it's so beautiful. People want to get back out there and enjoy it.
But to your point, exactly, we just have to do this slowly and carefully and make sure lives are protected at the same time and that's the delicate
balance.
Melissa Bell, thank you so much for joining us there from Paris.
All right to our next driver, HSBC's first quarter profit falling nearly 50 percent from a year ago. This, as Europe's largest bank sets aside a $3
billion in bad loan provisions. Anna Stewart joins us now with all the details on this.
Anna, I mean, we've heard this from many of the big banks, particularly those that are consumer facing that they're just having to insure against
the damage to consumers wrought by the period that we're going through here.
ANNA STEWART, CNN REPORTER: Yes, and HSBC is such an interesting to look at, given the bulk of its earnings are in Asia and in China, specifically
where the virus began.
You mentioned profit for tax slumping by nearly half for the first quarter and that all important provisions for bad loans, that's the number to
really watch for the banks during the pandemic, up fourfold for the first quarter compared to the last. That's up to $3 billion.
It was interesting when they discussed what that would be for the whole year. The range that they're estimating is between $7 billion and $11
billion. And so that largely depends on the length and depth of recessions around the world. It's very difficult to say.
They also cited oil prices. They also had a huge impairment charge in Singapore. They wouldn't give much detail on that.
It's doing a bit of a whip round of analysts though, despite all those gloomy numbers, many were actually quite impressed that the bank was able
to absorb such a hefty charge onto their balance sheet, which still looks fairly strong.
General consensus, I would say, is that this is a bank that can weather the storm, but that storm will get a lot worse, it's hard to see how much worse
it will get.
Not least if you just consider, you know, low interest rates going forward as all those fixed term rates sort of start to drop off -- Julia.
CHATTERLEY: This is a supertanker of a bank. To your point in particular, we know that coming into this they were looking at a more focused Asia
pivot. They warned back in February that 35,000 people could be losing their jobs.
So, just in light of the new normal that we face ourselves in and I am looking at it through a prism of COVID-19, what are they saying about those
restructuring efforts and of course, the people that they were set to let go?
STEWART: I think it's extraordinary. You and I were talking about this only in February. It feels like a lifetime ago. That big restructuring
plan, those 35,000 jobs that were going to be cut -- that is all on ice now. So that is on hold.
Fantastic news for the employees, of course don't want to be looking for jobs in this environment. Not such good news for the shareholders. Of
course, you were welcoming this big restructuring plan.
Not much good news in here really for shareholders at all, already the suspension of the dividend and being questioned on that on the analyst call
today. Very little visibility as to when there will be a dividend probably not this year.
They may make that decision until much, much later in the year or even next year. So looking ahead, it just doesn't look that good. But as we say, this
is a bank that is a super tanker, as you said, it's got a strong balance sheet. It can weather the storm, but it's not going to be to many
shareholders' liking.
CHATTERLEY: No, but bigger issues to deal with, quite frankly in the short term. Anna Stewart, great analysis. Thank you so much for that.
Now, speaking of supertankers, also reporting a big fall in profits today, BP. It comes as the United States Oil Fund, a popular investment fund
geared to track the price of oil said it would reduce its holdings of short term oil contracts this week.
The move, sending U.S. crude prices plunging, again, as you can see down some 4.6 percent there. John Defterios is with us. John, let's talk about
that fund first, because my understanding was they're shifting out of contracts for June delivery, based on the pressures that we saw in the next
year prices, coming into the end of the prime month's contract and pushing them out. They are just trying to buy themselves some time here.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Yes, they don't want to be in the near and present, and that danger, Julia, if you will, and
they're saying they don't want the front contract, and it sounds very much like a sovereign fund, the U.S. Oil Fund, but of course it is an exchange
traded fund and one that's very powerful. So, this had that shock to the market.
I'll tell you, Julia, this price right now is misleading. Nine hours ago, when I started on the air, we had a drop of 15 percent in Asia for WTI and
five percent for Brent. So, it's starting to feel a little bit like sellers fatigue, right?
But we can't ignore the obvious right now, and this is concern about the glut. There's worries about this drying up in terms of a place to store the
oil in the United States and four to six weeks, even less in Cushing, Oklahoma.
We have some video here offshore of Los Angeles. There is an estimated 80 super tankers. You're talking about the super tankers with Anna right now,
floating around the world holding two million barrels in each hull.
A hundred sixty million floating around the sea. We've never seen that before.
Our Richard Quest spoke to the former CEO of BP, John Browne, who decided to make a comparison to the 1985 and 1986 bust. We talked about it last
week. Here's the reason why. Let's take a listen.
(BEGIN VIDEO CLIP)
JOHN BROWNE, FORMER CEO, BP: I see it, certainly for the period that we can focus on, staying down. Inventories have to be absorbed. Demand has to
go up. And generally, people have to be confident that they can conduct their lives in the way that they did before coronavirus, and the producers
have to be very disciplined.
We never seem to run out of oil. We certainly run out of demand.
(END VIDEO CLIP)
DEFTERIOS: We could run out of demand here in this demand destruction that we've seen so far, and the reason he talked about the 1980s, Julia, and
this is fascinating. It took 15 years to get back to an average price of $30.00 to $40.00 a barrel in today's price.
So, he is saying, if you're not disciplined, this is what could happen if you over invest and try to manipulate the market with only cuts. You have
to be sincere about the cuts and sustain it going forward, also for the IOCs as well.
CHATTERLEY: Yes, absolutely, and then for the big majors as well, they are perhaps in a better position than some of the smallest oil and gas players.
But I mean, the CEO of BP today, calling it a brutal environment. And we're seeing that playing out with these majors' numbers. BP the first today.
DEFTERIOS: Yes, BP the first today, it made a profit of $800 million, but with a special accounting procedure for the cost of supplies, and that's
down 67 percent versus last year, about two and a half billion dollars.
No surprise, Julia, we started the year at $70.00 a barrel and we're trading at Brent at least just around $20.00 a barrel. You talked about
guidance at the top of your program here.
Bernard Looney, the new CEO gave some guidance on demand destruction saying in the second quarter, he thinks that's going to average negative 16
million barrels, about half of where we are today, negative 29, negative 30.
So, he is thinking it could be even spilling into the third quarter. They preserve the dividend 10 and a half cents a share. Many were worried about
that because of the news from Norway's Equinor last week, the first major to do so.
And another COVID-19 kind of spill off here, you know, BP had this target for net zero emissions by 2050, he said even with this price of oil, there
is no reason not to accelerate that push and even hit it earlier that the investments and demand from the public require us to diversify the
portfolio into renewables at a more aggressive pace.
CHATTERLEY: Yes, it's interesting, isn't it? Because for some of the other big nations, right now, the need to diversify. Look, it is very low given
how cheap oil prices are, but John Defterios, thank you so much for that.
DEFTERIOS: Yes.
CHATTERLEY: Now, speaking of guidance, the head of the Tokyo Olympic Games is warning the event may be canceled if the pandemic is not over by next
summer. Tokyo 2020 President, Yoshiro Mori made the remarks in an interview. It's the strongest indicator yet that the future of the games
which have been postponed of course to July 2021, may also have to be postponed again.
However, Mori says they're still working towards holding the event next year. The uncertainty of course, is key.
Coming up on FIRST MOVE, the Vice Chairman of PepsiCo is next to see how staying at home is affecting consumption, and of course another company
that pulled their guidance as well.
And later, how to bring about a retail revival? What needs to be changed about the way we shop? How do you protect both your workers and your
consumers in the post-coronavirus era? That's next. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York. We are on track for a higher open for U.S. stock markets this morning. The major averages
set to rise for a third straight session, in fact. That even as more corporate heavyweights withdraw their 2020 guidance.
Financial stocks, once again set to rally. They were the outperformers yesterday and so, helping these premarket gains. Just to give you a stock
check of where we are after Monday's advance. The NASDAQ, the tech heavy sector now down less than three percent year-to-date. The S&P is at levels
not seen since March 10th, and the Dow is once again above 24,000.
The wall of liquidity provided by Central Banks, I think a direct contrast to what we're hearing about the fundamentals.
PepsiCo, one of the corporate giants withdrawing its 2020 guidance today. That due to the uncertainties posed by COVID-19. But there's good news,
too.
First quarter revenues beat estimates as consumers stocked up for weeks of lockdown. Joining us now Hugh Johnston. He's Vice Chairman and Chief
Financial Officer at PepsiCo. Sir, fantastic to have you with us.
It is a terribly uncertain situation that many are facing right now. But the benefits to your business, we have seen consumers stocking up on both
beverages and snacks around the world.
HUGH JOHNSTON, CHAIRMAN AND CHIEF FINANCIAL OFFICER AT PEPSICO (via phone): Yes, good morning, Julia. It's nice to be with you all as well. Yes, it was
a very strong first quarter for us. Revenue was up 7.9 percent. But even as we've estimated out the impact of COVID, our revenue growth was in excess
of five percent, so we continue to see an acceleration in our business performance.
Really a couple of big consumer trends going on, as people are sheltering in place. Number one, they're eating more breakfast and they're eating more
substantial breakfast at home and that's been terrific for our Quaker oatmeal business and for our Aunt Jemima pancake business.
And the second is, as they graze during the day, they tend to snack on Frito Lay products more than others. So, it's really lifted that business.
We see those trends sustaining for a good period of time.
Beverages also experienced a benefit in the first quarter, but those were more stocking up with things like Gatorade and water, and while we did see
a nice benefit in the first quarter, we expect and have already seen that to some degree, tailing off in the second quarter.
So, a bit of a tale of two cities, but overall a good story for PepsiCo.
CHATTERLEY: Yes, talk to me about the challenges of predicting what happens next. It's a problem for all businesses, but to your point, you are
seeing shifts in consumer behavior. There are other challenges where your products are sold perhaps in restaurants, in stores, in cinemas, too, and
we lack clarity on what reopening for economies around the world actually looks like in practice where the consumer is concerned.
[09:25:16]
JOHNSTON: Yes, you're exactly right. It is very difficult to predict and that's part of why we suspended our guidance for the year. As we evaluated,
we realized there were just so many scenarios and so many things that were far out of our control that it was impossible to give good guidance for the
year.
Now, as you might expect, we have an enormous number of scenarios inside the company anywhere from a V-shape recovery to checkmark recovery to a U-
shape recovery to an L recovery.
And the important point for us is we're really just prepared for any of those. So, when we start to see people exit from their homes, when we see
them come back into the outlets that right now are either reduced or shut down, we're going to be in a great position to serve those customers and
serve those consumers with products.
Until that time, clearly it's going to be more at home consumption. The good news, as I said for us is our portfolio is relatively balanced, where
the food business is quite resilient through this. It's the beverage business that tends to be a bit larger in restaurants and larger gatherings
like movie theaters and entertainment venues.
And, obviously, those businesses are operating at low capacity if operating at all.
CHATTERLEY: Yes, it's interesting as far as investors are concerned to point as you sort of map out the different options here in terms of what
kind of recovery we look like, you're still confident enough to maintain the dividend to keep going with a multibillion dollar buyback program as
well.
That's a strong message, I think, that you're sending to investors today about the health of the company.
JOHNSTON: It is and we were fortunate to be in a position where we have a very strong balance sheet. We manage very conservatively and very
prudently.
We've been in the debt markets now, a couple of times, both the long term debt, as well as the commercial paper market, and we're able to secure
secured debt funding at quite attractive rates and for extended maturity.
So, I think that speaks to the confidence that investors have in the management of PepsiCo, and also when the strong, strong cash flows of the
company.
So, given we do have very strong liquidity, we made the decision that we are maintaining our share repurchase and we think that's an important
message to investors.
CHATTERLEY: Talk to me about workers, because we've heard concerns about supply chains, about the sheer ability to protect workers that are working
in factories and making sure that we, as consumers get the supplies and the groceries that we want.
How are you going about protecting your workers?
JOHNSTON: Yes, we're doing a lot candidly and at considerable expense, but absolutely the best money that we can spend is to protect our workers.
And that's true, both of the people who bring the product to the grocery stores as well as those who work in our manufacturing plants and who work
in our warehouses.
We're all of course, practicing social distancing. We are using PPE in order to enable people to work safely as they as they can, and we've taken
considerable other steps in terms of protecting people if they need to be out either for personal health reasons or for family reasons as well.
So, you know, a company like PepsiCo, the real strength of the company is our frontline workers, the people who make, move and sell our products, and
they're an important part of the food supply chain.
So, we're doing basically everything we can think of to make sure we keep those workers safe.
CHATTERLEY: Yes, it's another frontline. They are essentials. Hugh, great to chat with you. Thank you so much, and I wish you and your workforce well
at this moment. Hugh Johnston, Vice Chairman and Chief Financial Officer at PepsiCo there.
All right, coming up on FIRST MOVE, how retail stores -- exactly tied to what we were just discussing -- across the United States are preparing to
reopen. The head of the National Retail Federation, joins us next.
(COMMERCIAL BREAK)
[09:32:21]
CHATTERLEY: Welcome back to FIRST MOVE where U.S. stock markets are open, up and running for trading this Tuesday. As expected, a higher open for
stock markets despite that sell off and the volatility that we've seen in the energy market specifically U.S. crude and of course, as I've mentioned
new signs that companies have little idea where profits and sales are likely headed this year as nations around the world begin the process of
reopening, and gauging what consumer behavior looks like.
For now though, I think Central Bank cash continues to be all that really matters here and we are seeing gains across the board.
PepsiCo, Xerox and manufacturing giant, 3M or withdrawing their 2020 guidance today. Caterpillar withdrew its guidance earlier this year. It
missed earnings expectations by a wide margin. Clare Sebastian joins us now to discuss some of these important changes.
Let's start with 3M manufacturing giant. Also, our viewers may have heard of this one because they let's say, tangled with the White House earlier
this year in the Defense Production Act over the manufacture of those N-95 masks. What was 3M saying about their numbers today?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, so not as bad as it could have been for 3M, Julia. Sales were up 2.7 percent. Profits were down
by the same amount. But this isn't just about the masks that we've been hearing about,
This company is a sprawling conglomerate. It makes everything from the sort of Post-It notes that you find on your desk to equipment to repair cars, to
tools used in mining all across the board and some of their segments were up and some of their segments were down.
I think it's interesting, sort of to look at that a bit given the times we are in. Things like personal safety, of course were up. Drug delivery, food
safety, home Improvement, interestingly was up, but they saw declines in obviously automotive, transportation, oral care, interestingly -- aerospace
and stationery and office supplies. Again, the humble Post-It note.
But they are -- this is another of the themes that we're seeing across companies. They are preserving cash. They have suspended share buybacks.
They're doing things like a global hiring freeze, reducing CapEx, and they are raising cash as well to sort of preserve their liquidity going forward.
Because of course, they are one of the companies as you said that's withdrawn guidance. They don't know how this is going to go, how this is
affecting their company.
And meanwhile, of course, Julia, they reiterated that they are ramping up the production of those respirator masks. They've already reached a hundred
million a month. They're investing to double that. They're going to be up to 50 million a month in the U.S. by June and they are saying that they're
not just doing this on a supply demand basis. They are prioritizing 90 percent of those supplies to healthcare.
But they did, given the tangle with the White House earlier this year, say that they thanked them for their help, especially when it comes to
importing some of those products from China.
[09:35:10]
CHATTERLEY: Yes, absolutely. And you know what people are really listening out for, but to your point, and it's a very good one, this is a far bigger
business than just producing masks at this moment in time.
Clare, let's talk about Caterpillar because as I look around the world, the construction industry is one of those that governments seemingly think they
can get started pretty early, but I just wonder what the prospects are going forward for construction and commercial real estate in particular,.
It's sort of challenging times for these guys.
SEBASTIAN: Really challenging. Caterpillar, in a way, sort of a heavier industrial conglomerate, if you can put it that way, than 3M. They are
exposed heavily to construction, things like oil and gas, all of these industries that are under stress.
And Caterpillar saying today that they had sales that are down 21 percent, profits down 39 percent. They have also said that they obviously, withdrew
their guidance in March. They didn't issue anymore today. Things are just too uncertain.
But they did say, they expect things to be worse in the second quarter than they were in the first quarter. Again, the same themes -- preserving cash,
cutting costs. They are trying to sort of stabilize the business through this.
And don't forget, this is a company heavily reliant on Asia (AUDIO DISTORTION) we see a construction boom. That was a particular weak spot for
this company.
CHATTERLEY: Yes, and I apologize to our viewers because we lost you a little bit there, in particular, but you raise a great point that the
shutdowns didn't happen until the back end of March, and this is the real quarter I think that we have to worry about and of course, we lack guidance
on what that looks like.
Clare Sebastian, thank you so much for that.
Now, speaking of reopening and getting back to work, and to consuming, the National Retail Federation unveiled new guidelines for reopening stores
across the United States.
The plan suggests stores enact social distancing and hygiene measures. The NRF also urges governors to issue uniform and statewide protocols.
The group says the retail sector supports one in four U.S. jobs with more than 50 million workers, and this is key. Matthew Shay is the President and
CEO of the National Retail Federation, and he joins us now.
Matthew, great to have you with us and good to see you this morning. It's a phased blueprint, a phased protocol of what you think works over what time
horizon.
For many grocers around the country, they're already in sort of Phase 2 of having to deal with customers and protect workers. How quickly can we see
this implemented in your view?
MATTHEW SHAY, PRESIDENT AND CEO, NATIONAL RETAIL FEDERATION: Well, Julia, you know, if you think back over the last six to eight weeks in the United
States, many retailers have really been the economic first responders. They've kept their doors open. They've been serving consumers.
They've been doing it safely, protecting their employees, operating their supply chains, their distribution centers, and that really gives us a
roadmap for how we can help the rest of the economy the parts of the economy that have not been able to remain open during these last eight
weeks in the U.S.
And we really have learned a lot from those companies that were on the leading edge of this, and so that's really the basis for the NRF's
Operation Open Doors was to take the things that we learned and the experiences of those many companies that served customers, and help apply
that to those other companies as they begin to face some of those same challenges and opportunities.
CHATTERLEY: What are you hearing from retailers in some of the states that are in the process of reopening? Some of our surveys at CNN show that
consumers are worried. They're afraid that there isn't appropriate testing. That they're not sure about their safety. Are the retailers that you
represent equally afraid for their workers and protecting consumers, too?
SHAY: I think the number one concern that all retailers share is concern both for their associates and for the customers that they have the
privilege of serving every day, and that's why they've developed protocols, procedures that have allowed them in many cases to remain open during the
coronavirus challenge.
And those are the kinds of experiences the lessons that can be applied in other settings as we see the United States begin to reopen. And of course,
with the diversity of this economy, with the diversity of our population and demographic centers, they're going to be many factors that are going to
affect different regions of the country in different ways.
And so that's why what we created with Operation Open Doors is really a set of guidelines that individual companies can decide to choose and use as
they fit for their business and for their customers.
CHATTERLEY: What about legal risk care, Matthew? Is that being discussed in how you go about perhaps talking to Congress and saying we need to be
protected in some way from class action lawsuits potentially if people get sick and accuse businesses that they caught the virus while they were in
their retail establishment or in their hotel or whatever it is? It's going to be a challenge surely going forward.
[09:40:03]
SHAY: Yes. Julia, I was invited to be a member of the President's Committee on reopening the economy and was on a call with the President the
other day and members of the retail industry working group and that issue has been discussed, and that's an issue that I think has implications for
many businesses across the United States and in other parts of the world.
There really are a couple things that we're concerned about, obviously, as we see other parts of the economy reopen and come back to business, you
know, in the new normal.
One of those is avoiding the kinds of challenges we faced as the economy closed, with the inconsistent application by states, by counties, by
jurisdictions and cities that impacted companies that are trying to do business in multiple locations.
So as we reopen, we don't want to face those same kinds of inconsistencies, and then similarly, the issue that you mentioned about litigation
liability, there ought to be protection for companies that are following appropriate guidelines that are taking their direction from medical
professionals that can demonstrate that they're complying with and regularly auditing the behavioral practices and procedures that will
prevent them from the kind of frivolous sorts of litigation that could really paralyze the economy and have a real chilling effect as we try to
reopen things here in the U.S.
CHATTERLEY: We mentioned and it is a challenge in the introduction that this is millions of jobs. This sector represents millions of jobs in the
United States. How many of those jobs do you think don't come back at the end of this because consumer behavior has changed? We are reticent. We go
more online, perhaps than visiting stores?
How many of those jobs are at risk, Matthew, in your mind?
SHAY: Well, you know, Julia, as you mentioned on the way in, the retail industry of the United States is responsible for creating one in four jobs,
more than 52 million throughout the retail ecosystem and the supply chain, and we've seen consumer behavior, and you and I have discussed this before,
see consumer behavior patterns evolving pretty rapidly over the last five years as we went to mobile, as companies have put out new methods of
fulfillment, distribution, and serving customers digitally.
And so I think as we come out of this, you're going to see those kinds of trends really accelerate. You're going to see customers becoming more
comfortable with different kinds of fulfillment options, shopping and behaving much more digitally fluently than they were previously.
And that will have implications as we see the evolution in the next phase of our economy and there will be winners and losers from that as there
always are.
And I think that puts a premium on those companies that are really thinking digitally, that have very creative fulfillment options that have a
sophisticated supply chain and they are really serving customers with a high level of engagement and a real brand commitment.
CHATTERLEY: Yes, great for Amazon, the death knell perhaps for the shopping mall.
SHAY: Well, we'll see. I think that's going to continue to evolve and you know, we are social creatures. I think all of us that have been locked down
for a while, many of us are very fortunate and very blessed relative to some of the real tragedies that have occurred across this country and
around the world.
But many of us will want to get back out and socialize. So, I think we're going to see that come back and I think that'll take different forms. But
we're all looking forward to the next phase and getting there safely and we hope Operation Open Doors can help us do that.
CHATTERLEY: Yes, I am one of those that is very much looking forward to getting back to life. Matthew Shay, thank you so much for joining us.
SHAY: Nice to see you, Julia. Thank you.
CHATTERLEY: Likewise, as always.
SHAY: Thanks.
CHATTERLEY: Thank you. All right. Still to come here on FIRST MOVE. As the origins of the novel coronavirus remain unclear, a U.S. scientists known as
the Master Virus Hunter is teaming up with Chinese colleagues to try and trace it. We speak to him, next.
(COMMERCIAL BREAK)
[09:46:52]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. and Chinese researchers are working together to trace the origins of the coronavirus that causes COVID-
19. One of those team members is world renowned Dr. Ian Lipkin, who helped develop rapid testing for SARS back in 2003.
His team at Columbia University have also just received approval from U.S. regulators for a clinical trial to determine whether the plasma collected
from COVID-19 survivors can help protect healthcare workers and others.
Dr. Ian Lipkin, the Director of the Center for Infection and Immunity at Columbia University, also known as the Master Virus Hunter now joins us.
Dr. Lipkin, great to have you with us. That is some title, but from what I've read from your CV, oh, boy, have you earned it. Talk to me about the
work that you're doing just to try and understand first the origins of this virus.
There's been speculation about a wet market in Wuhan, whether it came from a lab, what have you discovered so far? What can you tell us?
DR. W. IAN LIPKIN, DIRECTOR, CENTER FOR INFECTION AND IMMUNITY - COLUMBIA UNIVERSITY: Well, I first heard about this unusual pneumonia mid-December,
and the agent was identified at the very end of December, I learned about a really on the 31st, and as people know, the first sequences came out on the
10th of January.
And rapidly we got to diagnostics and thinking about vaccines and a whole range of interventions. Nobody really knows where it came from.
Initially, the thought was that it came from this wet market, and by analogy to SARS, the prediction was we would find an animal reservoir for
this virus that would be present in this market. This was never found, however.
And indeed, when people went looking for footprints of the virus, what they found was that there were some areas where actually in a site of the market
where there weren't any mammals, which made it unlikely that that was the original source.
There may still be some sort of connection with the market. We can't exclude the possibility that people are engaged in wild animal trade, who
also, you know, were exposed outside somehow, came into the market and exchanged this virus with some of their counterparts. So, there may be a
link, it's not clear that it's a direct link.
We also don't know when this virus first moved from the Animal Kingdom into people, and that's what we're trying to do. That's what we're trying to
focus on at present.
So, this is a collaboration that started really with a grant from the Chinese Academy of Sciences by Professor Junqiang Liu (ph) at Sun Yat-Sen
University who is an expert in one health, that is to say, you know, things have moved from animals into people, and he has been joined on this by Gao
Fu, George Gao, who's the Director of the National C.D.C. there, and Chen Zhu, the former Minister of Health, and we're very eager to see what we can
learn by studying blood samples that were collected at earlier time points, looking at samples from bats to see if we can find sequences that are even
closer than what's already been described.
[09:50:07]
LIPKIN: And my thought is probably going to find that this virus were circulating well before we became aware of it.
CHATTERLEY: Wow. So, it may not have even originated in Wuhan itself.
LIPKIN: We don't know. I mean, this is something that we're just beginning to study.
CHATTERLEY: But just very quickly on this, because I do want to talk to you about the plasma studies. Do you believe that the Chinese are being
open with you? I called it a collaborative project, but do you believe that they're being open about the information that you're getting?
LIPKIN: I've been working with these people for 17 years. That's a long time, and I trust them and they trust me, which is why we continue to work
together.
Now, is it possible that there's something that may have happened that some people knew about, that they didn't share with other people, never made it
to my attention? Sure. It is a very large country with 1.6 billion people.
But when you compare this with 2000 to 2003, you know, it's dramatically different.
Now, you wanted to talk a little bit about plasma therapy.
CHATTERLEY: I do, tell me, please.
LIPKIN: Yes, so the idea is that when you recover from an infection, you have an immune response, which is how you clear that viral infection and if
you can take antibodies from people who've recovered and give those to people who are at risk or have disease, you may be able to change the
course of the disease, or even prevent infection in the first place.
So, it's a stopgap measure until we have drugs, and until we have a vaccine. We've enrolled 17 patients thus far at Columbia and we're very
eager to see the results. We'll find out.
CHATTERLEY: It's already been used, though, very quickly, isn't it? I mean, plasma from those that have recovered is being used right now for
infected patients.
LIPKIN: Yes, but it's being used primarily in what we call a compassionate basis.
CHATTERLEY: Right.
LIPKIN: And when we do something on that basis, you don't really know if it works, you can try to historically look back and say, here's a patient
who was in similar straits. This one improved, and this one didn't.
But that's not the same thing as conducting a randomized trial where you don't make a decision as to who's going to get plasma and who's going to
get the alternative. That's what's really required to sort out what's meaningful.
We have to do that with everything -- drugs, with devices, and plasma therapy is no different.
So, I understand the eagerness to sort of do everything you can but sometimes we wind up doing the harm. So, we have to be very careful when we
introduce new drugs and new therapies. It has to be done in a controlled fashion.
CHATTERLEY: Yes, we need that control group. Dr. Ian Lipkin, so great to have your wisdom on the show today. Please keep in touch because we'd love
to speak to you again about your progress and I'm glad to know you're looking so much better as well because I know you suffered with COVID-19
yourself. So, keep well, sir. Keep recovering.
LIPKIN: Thank you.
CHATTERLEY: Good to see you. Thank you, sir. Stay in touch.
All right, we're going to take a break. A birthday to remember for this man. Britain salutes Captain Tom Moore for the millions he raised to help
support healthcare workers. That's next.
(COMMERCIAL BREAK)
[09:55:22]
CHATTERLEY: Welcome back. Earlier today, Britain fell silent to remember frontline healthcare heroes who have lost their lives saving others in this
pandemic.
[VIDEO CLIP PLAYS]
CHATTERLEY: Prime Minister Boris Johnson, who was himself treated for coronavirus, led the nation in a mark of respect, 82 N.H.S. workers and 16
who worked in social care are known to have lost their lives.
Again, FIRST MOVE, thanks all those frontline workers, our healthcare heroes all around the world.
Now, do you remember the Second World War veteran who raised millions of dollars for Britain's National Health Service? People from all over the
world wanted to thank him for his efforts, so, they sent him more than 100,000 birthday cards. Wow, look at this.
Tom Moore celebrated his 100th birthday by walking a hundred laps in his garden. In all, he raised more than $36 million. And by the way, that's
nearly 6,000 percent over his target.
Yes, we calculated it. To Captain Tom, and to everyone out there raising money or fighting to save lives, we salute you.
Thank you for watching. Stay safe. Take care, and we'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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