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First Move with Julia Chatterley
Over 33 Million Americans Filing For Unemployment Benefits In Just Seven Weeks; President Trump Ramps Up Criticism Of China, Beijing Hits Back; Vaccine Victories, A Very Small Dose That May Go A Long Way In The Fight Against COVID-19. Aired 9-10a ET
Aired May 07, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:20]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know.
Millions more. Over 33 million Americans filing for unemployment benefits in just seven weeks.
Blame game. President Trump ramps up criticism of China, Beijing hits back.
And vaccine victories. The CEO trialing a very small dose that may go a long way in the fight against COVID-19.
It's Thursday. Let's make a move.
Welcome, as always, to our FIRST MOVErs all around the globe. Great to have you here.
Coming up this hour, as you heard me mention there, we speak to another innovator whose team is hard at work to find a COVID-19 vaccine. We will
have all the details and we need it more than ever today after seeing the latest numbers for those claiming benefits here in the United States.
An additional 3.2 million people, to be more precise, in the U.S. filing for the first time in the last week, the total now more than 33 million
people since mid-March. What's clear is that we're looking at depression level era unemployment.
The crucial question now becomes when and how quickly will these jobs come back? Today's numbers are just our first big data point for May and it
points to another dire month for jobs losses and the jobs market.
Big U.S. companies like Uber, GE, Airbnb have all announced deep layoffs this month. United Airlines said cuts are coming in the fall. MGM Resorts
say that some of its 63,000 furloughed workers could be let go permanently.
And yet, just take a look at this contrast, a look at U.S. futures. We continue to price for perfection in the reopening of U.S. economy, even
before U.S. caseloads of the virus begin to reduce. That's the conundrum here.
Europe. Take a look at this. The focus, I have to say is on what's going on in the United Kingdom. The Bank of England, saying that the economy could
fall some 14 percent this year, its biggest annual decline on record. However, they also forecasting a recovery that seems nothing short of
miraculous, dare we hope. Well, we'll have all the details on that, next.
A quick look at Asia as well where stocks are mixed, though a glimmer of light, perhaps in the rise in exports from China despite a huge drop in
imports. Perhaps no surprise as the services sector there contracted for a third straight month even after lockdowns ended. The challenge of reopening
is clear. It must be done cautiously, and that's even with scaled testing and tracing.
Let's get to the drivers and give you more details on today's job numbers. Christine Romans joins us this morning. Christine, whichever way we look at
this, we are now comparing the job losses, the furloughs, the pay cuts and the damage in this jobs market to what we saw in the Great Depression. It's
out of memory.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: History making, you know, and there are those who would say, this is going to be a
very terrible global recession with an asterisk because, excuse me, because in the United States, at least, we put people out of work sort of on
purpose, right? There's no playbook for this.
We've sidelined the American worker to protect the healthcare system and to protect the health of the country. But we don't know how we're going to
reopen exactly and what it is going to look like coming back.
We don't know, as you rightly point out what percentage of these jobs will very quickly come back and what kind of damage might be done more
permanently to some parts of the labor market and some industries like leisure and travel.
CHATTERLEY: Sting as well in light of this that we are now getting hints at least as far as CNN reporting is concerned that the White House is saying
it's not going to adhere to the C.D.C.'s guidelines for what reopening looks like. It comes as we know, there aren't enough tests to do what other
nations have done. Our caseloads aren't coming down in the same way that other nations have, too.
I can't help but look at this all and be frightened for what reopening looks like and it means to me that recovery will take longer. It has to.
ROMANS: There is so much risk. There is so much risk going forward here. I mean, there could be a new wave of the disease later this fall. There could
be -- I mean, the curve in New York is going down, the rest of the country though it is not.
The new cases are still rising and that is really a big concern, and you have sort of different strategies all over the country.
[09:05:13]
ROMANS: What we'll bring back consumer confidence? When will employees feel safe to go back to work? When will people feel safe shopping again? We just
don't know what is going to happen next.
Again, I go back to this same old, same old. I sound like a broken record. There's no playbook for this. We hope that millions of these jobs can come
back online quickly as the reopening happens.
But there are some jobs that I'm not sure will come back. I think that the sharing economy has been hurt in the near term, the leisure economy, as
well. It could take years to get back to the air travel levels that we saw last year.
So, even as we're talking about reopening, there's still a lot of pain and suffering for individuals in the labor market right now with no clarity on
what a reopening will look -- that a reopening will bring back their jobs - -Julia.
CHATTERLEY: I know. I want to end on a positive note, but I'm struggling to be honest. My fear is even when we look at the numbers tomorrow for the
payrolls report, it just doesn't capture the percentage of people that have been impacted by this, and then we can reiterate all the challenges that
you just mentioned.
The damage here is wider than we realize.
ROMANS: I can find one positive note sort of --
CHATTERLEY: Thank you.
ROMANS: And that is, if you look at the last five weeks, there have been fewer first time unemployment claims each week. The numbers are staggering.
They're very big, but they're going slightly down.
My hope is that April was this hellish month for the American worker, for American consumers, for American families, and next month will be hard too,
but I'm hoping this is the trough here.
CHATTERLEY: Yes, by the time we start to get the data for next month, the pickup as economies states reopen will have already been in there, but just
not captured in the numbers.
Thank you for the silver lining. Christine Romans, thank you for that.
Meanwhile, the blame game continues. China firing back at the United States as President Trump continues to criticize Beijing, saying the virus could
have been stopped in China.
(BEGIN VIDEO CLIP)
HUA CHUNYING, CHINESE MINISTRY OF FOREIGN AFFAIRS (through translator): We want to urge the U.S. side once again to stop spreading false information,
stop misleading the international community.
Take a good look at its domestic problems and try to find out ways to control the pandemic in its country as soon as possible rather than
continue playing the blame game.
(END VIDEO CLIP)
CHATTERLEY: Ivan Watson live in Hong Kong for us. There's truth on both sides here. Perhaps if the holiday travel, the New Year holiday travel
hadn't have happened, this wouldn't have spread so quickly.
The criticisms are true, as well, perhaps of the United States handling of this. Where does this go -- this rhetoric, Ivan? Does it remain that?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, I saw somebody describe it, and I'm paraphrasing here calling it the Scold War
between Beijing and Washington, and basically you have this rhetoric heating up between the two governments.
President Trump this week, he compared the pandemic to an attack on the U.S., which he said was worse than the attack in World War II against Pearl
Harbor, worse than the 9/11 terror attacks.
The Chinese Foreign Ministry responded to that. Take a listen to what they had to say.
(BEGIN VIDEO CLIP)
CHUNYING (through translator): If they say the pandemic can be compared to Pearl Harbor or 9/11, the enemy the U.S. faces is the novel coronavirus,
when faced with humanity struggle with the same virus, I think the U.S. should fight side by side with China as comrades in arms instead of
enemies.
(END VIDEO CLIP)
WATSON: And as you've heard in that earlier clip, the Chinese Foreign Ministry spokesperson also said hey, the U.S. government seems to be trying
to distract from failures at home and trying to play the blame game against China.
Chinese state media has been far less diplomatic. An anchor for Chinese state television went so far as to claim that the U.S. is the world's
largest exporter of the novel coronavirus. You had other newspapers calling this political blackmail by the U.S., passing the buck.
And the government in Beijing has accused President Trump and the Republican Party of using this scapegoating of China as a political
strategy to help with the upcoming November presidential election.
And given that we're still months and months out from that, if this is the kind of pattern we're going to start to see, I can't even imagine how nasty
the rhetoric could get if things keep going this way in the weeks and months ahead -- Julia.
CHATTERLEY: Yes. I couldn't agree more with you. I think the hope is that it remains a Scold War, as you called it, and rather than seeing any formal
action that impacts economies that are already weakened by fighting this virus, and I think that's one of the critical elements here that we still
don't know.
Ivan, great to have you with us. Ivan Watson joining us there from Hong Kong.
[09:10:07]
CHATTERLEY: Let's see the other dire warning now, this time in the U.K. and from the Bank of England, the country is heading for its worst recession in
300 years.
The Central Bank says GDP will shrink 14 percent this year, unemployment could hit nine percent.
Anna Stewart joins us now on this story. Anna, I can't help, despite how awful these numbers are, and they are truly awful -- compare and contrast
to the unemployment rate that we're talking about potentially in the United States, and the fact that this looks so much lower. Talk us through the
differences here and then we'll talk about the future.
ANNA STEWART, CNN REPORTER: Yes. It's an interesting one because actually, despite there being some really dire numbers from the Bank of England much
to be positive about the second quarter, the U.K.'s economy will shrink by 25 percent, but that is a lot better than some previous forecast, and they
see a very swift recovery in the second half of next year, almost a V- shape, I would say.
Unemployment, you're right. Sharp rise in unemployment for the second quarter up to nine percent. That's expectation. That is high. That is
nowhere near as high as States side, and I know you're waiting for those numbers for April tomorrow.
Now, part of this is due to the government furlough scheme. The government pays 80 percent of wages of those people that have been unable to work
through the pandemic due to lockdown and we're actually getting some early data from the Bank of England of just how many companies and workers have
taken this up, 800,000 businesses applied for the furlough scheme that covers some six million workers.
So, that is why there is a lid on unemployment. Of course, getting them back to work will be very difficult.
CHATTERLEY: Yes. How do you wean people off those kinds of benefits, particularly when they've been done directly? It's an interesting question,
and it clearly ties to what you mentioned there which was a V-shaped recovery despite the fact that this has been done to fight the virus and we
didn't see caseloads coming down in the U.K. either. So, how are they getting to this? And what do we make of it -- Anna.
STEWART: Well, it was a very upbeat assessment of the economy for the next year. I'm not sure everyone completely buys it, if I'm honest. A lot will
depend on this jobless number, I think, Julia.
So this furlough scheme, you can't just remove it from businesses. You can't just take away the support of 80 percent of wages because when
restaurants and cafes reopen, when they're allowed to reopen, you will not get customers through the door nearly to the extent that they used to be.
So, revenue just simply will not return for many months to come.
Now, there must be some sort of tapering system for the furlough scheme, keeping those businesses alive, keeping those jobs up, because without
that, that economic recovery that we see in those charts is almost certainly going to fail.
So, there's so much reliance on just how slowly, how gradually, and how targeted lifting lockdown and that furlough scheme is over the coming
weeks. We should hear more on Sunday -- Julia.
CHATTERLEY: Yes, that's the reality for the globe. This is such an important point. We've stabilized economies in the short term, but what
does reigniting them look like under social or physical distancing conditions? Thank you, Anna. Great points. Anna Stewart there.
All right. Let me give you a look at some of the other stories that are making headlines around the world.
A gas leak at a chemical plant in Eastern India has killed at least 11 people. Hundreds more are being treated in hospital. Thousands have to be
evacuated.
The plant is owned by South Korea's LG Chem. Operations were due to restart after the plant had been idle amid the coronavirus lockdown.
Sam Kiley joins us now and has been looking at this story. Sam, what more do we know about what happened here?
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: We understand both from the Indian authorities and indeed from representatives from LG Chem, Julia,
that about 3:30 this morning local time there was some kind of leak that was discovered, the company says by an employee who was taking a look at
the factory ahead of possibly reopening as part of India's very tentative efforts to get the economy back working after many weeks of lock down in
the world's biggest democracy, 1.3 billion people remain largely economically inactive.
But in those small hours, it would appear according to a company spokesman who said that this needs to be investigated, the liquid, styrene, somehow
converted while it was in storage into a gas or vapor and was able to spread through the town, killing 11 people.
Now, Indian authorities say some of those 11 people may have died as a result of motorcycle or car crashes or indeed falling of balconies as they
were rendered unconscious. But clearly, there have been a very large number of people affected by this gas. Some two dozen people still in hospital,
some of them in critical condition.
They must have taken a very heavy dose of this gas, Julia because it's not normally in moderate doses, fatal. It's not as bad as anything like as bad
of course as the Union Carbide explosion in Bhopal in the 1980s that killed three and a half thousand people.
But it is echoes of that that of course reverberate whenever something like this happens in India.
[09:15:21]
KILEY: The Indian authorities have said that they will pay $131,000.00 equivalent in rupees to victims, dead -- or the victims' families of people
who perished in this accident and they say they are wanting to take most of that from the company.
The company is saying that they are going to be conducting alongside the Indians an investigation into what went on here, but it also points really
to the problems of reigniting, you were talking there, reigniting economies.
When you're reigniting factories, getting them back on track when they've been mothballed or left essentially moribund for some time, there are
dangers clearly that are going to be associated, particularly with these complex industrial operations -- Julia.
CHATTERLEY: Yes, uncharted territory in so many ways and this is an example of it. Sam Kiley, thank you so much for that update there.
All right, let's move on now. One of two American ex-soldiers detained earlier this week in Venezuela have appeared on the country state TV. In
the heavily edited video, Luke Denman said his role was to seize control of an airport and bring in a plane to fly Venezuelan President Nicolas Maduro
to the United States. The Venezuelan government says it foiled an attempted coup organized by a U.S. security firm.
All right, we're going to take a break here on FIRST MOVE, but coming up, we hear from a company trialing a treatment it claims can vaccinate
millions against coronavirus in a fraction of the cost of rival drugs.
And later in the show, as we stay home, social media has been wild with animals that aren't. Well, a game called Animal Crossing is driving up
profits for Nintendo. We've got the details. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE where we see U.S. stock market futures on track for a positive open this morning. We're actually looking
at gains, as you can see, of almost one and a half percent, if not more. The hope here, I think for investors is the worst of the U.S. economic
downturn is now behind us.
All of this as the number of people filing for first time jobless claims since mid-March rises to more than 33 million people -- that's 3.2 million
in the last week alone.
[09:20:24]
CHATTERLEY: There's a real disconnect, I think between the data that we're seeing and what investors are seeing, too, but that's the way markets work.
In earnings news, shares of ride hailing app, Lyft is set to rally over 15 percent. Losses narrowed in ride demand seems to have bottomed in mid-
April.
Meanwhile, FinTech companies Square and PayPal say business also stabilized in April, too. Hilton Hotels, meanwhile, suspending its dividend and share
repurchases.
But, it says it has enough cash to last the next 18 to 24 months as bookings plunge and that's key. How long does it take to return to life as
we know it? Well, key to that we believe, a global vaccine.
San Diego based Arcturus Therapeutics is planning a human clinical trial this summer for their potential offering. The company says a relatively
small amount of the compound could vaccinate millions of people.
I'm excited to say Joseph Payne is the President and CEO of Arcturus Therapeutics, and he joins us now. Joseph, fantastic to have you on the
show. There's something very specific about the vaccine that you are developing and I need you to explain why such a small dose could
potentially be so potent.
JOSEPH PAYNE, PRESIDENT AND CEO, ARCTURUS THERAPEUTICS: Absolutely, Julia, and by the way, it's good to be with you.
CHATTERLEY: Thank you.
PAYNE: Our vaccine -- our vaccine is a messenger RNA vaccine, which puts us into a special subgroup of the many vaccines that the global scientific
community are pursuing. But at Arcturus, we have a special type of messenger RNA vaccine called self-replicating mRNA.
So, it means that once this messenger RNA molecule is ejected, that it not only makes a small amount of the desired antigen or the desired spike
protein, but it continues to do so.
So, because of this technology, it means we can lower the dose substantially, and this is very important, as you can understand.
CHATTERLEY: And it's described as a single shot solution, too.
PAYNE: Yes. Yes, you could -- you know, as we've engaged many, many countries around the world, you can understand the importance of the
logistical distribution of the vaccine as well in a single shot vaccine versus a shot plus booster, or a two or three-shot vaccine over months can
be very challenging.
So, we check all the boxes with this vaccine. Not only is it a potential single shot, and a very low dose, but you combine that with the ease of
manufacturing, the feasibility of manufacturing this vaccine, it means that we can make a significant impact in millions of people.
CHATTERLEY: I mean, just to give people a sense as well, one kilogram could equate to 500 million doses. So, to your point, whether you're talking
about developed economies, or perhaps more importantly, developing economies, these aspects of the science here is so critical.
I mentioned in the introduction, human trials in the summer. Why wait so long? Because I know you've done animal trials already. And clearly, the
whole world is desperately hoping that that we can accelerate the science as quickly as possible.
PAYNE: Absolutely. Our animal trials were very successful. We had 100 percent sero-conversion in the animals we tested at very, very low doses,
so highly encouraging.
We're cautiously excited about the data and we need to get this into human beings as soon as possible.
We're engaged in manufacturing the vaccine as we speak, and we aim to ship that in June. And then as soon as possible, thereafter, we can initiate the
trial.
So, if we can replicate the results that we just saw in animals, this would be a very big deal. And we're excited to move into that potential.
CHATTERLEY: Give us a sense of timing, then, including the time it takes to do the human trials to analyze the data, to decide, get approval, perhaps
to really ramp up the manufacturing of this. When could we see it on the market and being used more widely?
PAYNE: Well, it Julia, that's a great question. It's a fair question. People always want to know when we can get this, you know, to publicly
distribute it, so it's important to -- well, after a human being would be injected, we'd have to measure the antibody titers within a period of time
because again, this is a single shot vaccine that won't take a long time to evaluate efficacy and safety in the clinic.
So, you know within 30 days after we initiate clinical trials, we'll have some very early data to share and hope we'll start to see some of the data
that we expect in to what degree it will match what we've seen in animals, then that doesn't take very long.
Measuring antibodies is an easy thing, and it's not just antibodies. We have to make sure it's the correct antibodies, the neutralizing antibodies,
the antibodies that protect or protect the individual from the COVID-19 virus itself.
So, this does not take a very long time. Our first trial is in 76 people. That's not a large number. We are including the elderly, and we hope to get
a very clear idea of the dose right away. Once we lock in the dose and confirm that it is a very low single shot vaccine, then we just engage in
manufacturing.
And thankfully, our process is very scalable. We've engaged Catalent recently and did a press release on that. They're one of the world's
largest, most efficient manufacturers, and they will help us in the ability to get hundreds of millions of doses annually, is what we're hoping to live
into with them.
And so, I believe, I addressed your question, though. It will take, you know, approximately 30 days after initiating the trial to start to see
early data in the very first people that are injected with our vaccine.
CHATTERLEY: I was just thinking there because the missing piece of this is that it was the Singaporeans that came to you in January and said, look, we
like what you're doing. We want you to scale up. They gave you investment and if you succeed, the Singaporean population get the first batch of
doses, but when we're talking about hundreds of millions potentially of manufacturing. That's fine because it's actually a relatively small
country.
Are you free to sign manufacturing deals with the likes of Pfizer, Merck, potentially here in the United States that have got real manufacturing
capacity? Because the global population clearly is billions.
PAYNE: Yes, absolutely. Absolutely. A lot of good thoughts there. The Singapore government and Duke NUS Medical School in Singapore, approached
us in January of this year, and we've made great progress with them.
And you're right, Singapore is a small country, there's only about five or six million people in that country. And so we can -- we're definitely
looking to make more impact outside of Singapore with this vaccine.
And with respect to partnerships, we're engaged in discussions with multiple government entities here and abroad and also strategic
partnerships in some of the largest pharmaceutical companies in the world. And we have to evaluate all of these opportunities.
There's fantastic foundations as well that are looking to help the developing countries, and we're in conversations with them as you can
appreciate.
You take this all together, we're going to learn to -- you and I are going to learn together, you know, the -- you know, which partnerships are going
to help us globally distribute this vaccine.
But in the initial phase, this is an important distinction, in 2020, we don't -- the purchasers of the vaccines are countries. This is an unusual
commercial business model. Our customers are few and you have a small number of countries that can afford to stockpile a vaccine and initiate
this process early. And the distributors are going to be the military for example.
So countries are the buyers and the military are the distributors, and that's an unusual model and that's what we're heading into for this year.
But next year or in 2022, having a partnership with a global distributor in a more traditional sense is more likely at that time.
But in terms of right now, you know, we need to address the needs of countries that want to gain access and rights to our vaccine as soon as
possible, and help us with funding the stockpiling initiatives for these countries, and then we can provide a very simple single shot vaccine that
is readily distributed and easily, you know, logistically easy to distribute to distribute for these relative countries.
So that we're headed in the near term to make sense.
CHATTERLEY: And at relatively lower cost. Yes. I mean, you've just pointed out how many barriers have been broken here in terms of innovation, speed,
business model, who's buying, who's distributing.
Joseph, keep in touch, please, because we'd love to check back in with you and with your progress.
Thank you for all your work and for your team's work, too.
Joseph Payne there. Great to chat with you and hear what you're doing.
PAYNE: Thank you, Julia.
CHATTERLEY: Thank you. We'll keep our fingers crossed.
PAYNE: Appreciate it.
CHATTERLEY: All right. Stay with us. We're back after this.
(COMMERCIAL BREAK)
[09:33:25]
CHATTERLEY: Welcome back to FIRST MOVE where U.S. stocks are up and running this Thursday. Tech is certainly leading the United States, higher this
morning as you can see. The NASDAQ is up some one and a half percent, I think an unexpected bounce, too, in Chinese exports, as we mentioned
earlier, last month helping sentiment. The suggestion perhaps that the world's second largest economy may be seeing green shoots of growth and
recovery.
Those numbers similarly helping oil move higher, too. U.S. crude currently up around 10 percent. Chinese growth will at least help boost oil demand,
despite the broader supply issues.
But of course, U.S. unemployment remains a huge headwind. There were a further 3.2 million people filing for new jobless claims in the last week
bringing the total since mid-March to more than 33 million people.
Harvard University Professor Kenneth Rogoff joins us now for more on this set.
Professor Rogoff, always fantastic to have you on FIRST MOVE, sir. Your thoughts about the current state of the jobs market in the United States,
and perhaps what some of these numbers and percentages aren't telling us about the damage wrought here?
KENNETH ROGOFF, PROFESSOR, HARVARD UNIVERSITY: Well, I mean, it's just horrific how much joblessness have come up in the United States. I would
not contrast the U.S. and Europe that much. It depends on how much this goes up and if we snap back quickly, if a vaccine comes, if things go back
to normal, a lot of these people will come back.
Whereas if at last, I think again, if you look at Europe, a lot of the people that they're holding on to will be let go. It's a very difficult
situation. I'm afraid, I think that this is going to last for quite a while, and many of these jobs won't come back, and the short-term
joblessness, will turn into long term joblessness, at least for maybe a quarter in these people or more.
CHATTERLEY: If we had to predict, I know, it's incredibly tough about specifically the U.S. unemployment rate at yearend, based on what you were
seeing, an initial bounce back, but then a struggle to add more of these jobs. What unemployment rate do you think we're looking at by the end of
this year?
ROGOFF: By the end of this year, I think we'll still be over 10 percent at the end of this year, and again, the long term unemployment will be at a
post war high, at least since they've been measuring it.
CHATTERLEY: You made an interesting point there about how Europe has managed to stem short term job losses with the measures that they've done.
But then we could actually see more jobs being cut, depending on what the recovery looks like.
Just explain your thinking on that, because this is a very important point, I think, too.
ROGOFF: Yes, well, I mean, a lot of European countries have basically paid firms to keep their work. They pay their salaries. But they're not going to
be able to do this forever. They're going to do it longer, but not forever.
And if, you know, we go through a big restructuring after this, there are less restaurants. There are less all kinds of businesses. Eventually, those
employees are going to get let go. And conversely, if we snap back, the ones in the U.S. will be brought back.
So, the differences are somewhat exaggerated. They're very bad in both places.
CHATTERLEY: Ken, it's one of the reasons why you've suggested that perhaps we need to be looking and we'll hone in on the United States at negative
interest rates. So, banks get penalized for depositing money with the Central Bank. They are effectively incentivized or forced, let's say, to
push money out to the real economy, is this really where the United States is headed?
ROGOFF: Well, markets put something like a 20 percent chance on that over the next couple of years. But right now, the U.S. or Europe, nor Europe nor
Japan are really positioned to do this. Well, they didn't prepare for it.
But I think if interest rates stay this low, we are going to need a tool like that in order to boost the economy.
But let's look at what the U.S. Federal Reserve has done. They've essentially backstopped every private and municipal debt in the economy and
that's not sustainable. Again, because the economy may not come back. If it does, they'll look like fantastic. And by the way, I don't think I could
have thought of anything better to do given their instruments.
But --
CHATTERLEY: Oh, we've just lost him, Professor Rogoff there. No, we've definitely lost him. Well, you heard him there, Professor Ken Rogoff with a
bleak outlook, I think, not only for the United States, but across in Europe as well. Thank you, sir, for that.
All right, up next, if Google is the King of global search, Yandex is the star. We speak to the Russian tech giant as it takes on the country's
escalating Coronavirus crisis, czar, I meant, not star. That's after this.
(COMMERCIAL BREAK)
[09:41:38]
CHATTERLEY: Welcome back to FIRST MOVE. In to Russia now where the COVID-19 outbreak is the world's fifth largest and growing. The country reported a
record 11,000 new cases in the last 24 hours. The country's biggest tech company, Yandex is marshaling its array of services to help.
To call Yandex Russia's Google doesn't do it justice. It's more like Google, Uber, Spotify and Amazon all rolled into one. And now Yandex has
launched a COVID-19 project that does everything from provide free tests to track compliance with lockdown.
And joining us now is Greg Abovsky. He is CFO and CEO of Yandex. Greg, great to have you on the show. I want to hone in to the tracking system
first, and then we'll talk more broadly about the business. What are you seeing in terms of adherence to the lockdown? Are people complying?
GREG ABOVSKY, CFO AND CEO, YANDEX: Sure. Hi, Julia. Thanks for having me.
CHATTERLEY: Hi.
ABOVSKY: So, actually, what we've done is we've provided this index which is available on our site and in our app for any of our users, you're
welcome to, you know, go to our homepage and type it in and see what that index says about just about every city in Russia that we track and it
ranges from a scale of zero to five, and five is sort of the highest you can get in terms of self-isolation.
What we're seeing is that people are definitely trying to stay home more. They're self-isolating more, social distance is definitely working if you
compare it to sort of the pre-lockdown days, and we see that certain cities are certainly ahead of that.
Places like Moscow have done quite a lot to actually go in a lockdown mode and try to enforce the social distancing rules.
CHATTERLEY: Just what percentage of the population are you connected to in some way? I just described what your business does, and it's such a huge
array of things. What proportion of the population do you touch in some way? And is there perhaps a way for you to be able to run a tracing scheme
or other privacy concerns, sort of prohibitive for doing something like that?
ABOVSKY: Sure. Sure. So, you're absolutely right in the sense that we have just such a wide array of services that I would imagine we pretty much
touch just about every online citizen in Russia on a monthly basis, right?
Whether it's search, where we're the dominant player with about 60 percent share or in streaming video, or e-commerce or ride hailing, or whatever the
case may be. We do interact with quite a lot.
We take privacy very seriously. The self-isolation index that I just talked about was entirely based on anonymized data, so that privacy is paramount.
And, you know, it's just one of the things that we're doing. But there's a lot more as you can imagine, that we're trying to do to help the country
manage through the COVID pandemic.
CHATTERLEY: Yes, and I do want to talk about that. But on that point about data, there have been some questions about ranking on the search function,
to what extent the government has access to your data.
When I look at a big Russian tech company like yourselves and I wonder how you've remained independent, what role does the government play, if any, in
your business?
[09:45:10]
ABOVSKY: So, I think just like every other technology company in the world, we have to abide by the laws of the countries in which we operate.
And so if there are things that are illegal for us to show in our search results, whether that's things like child pornography or information about
suicides, or illicit drugs, then that's the things that are filtered out.
But I have to stress that what's extremely important to us is our independence. We do not in any way alter our search algorithms or ranking
algorithms on anybody's request.
And I think that's an important function that we play, that we're viewed as an independent party, right. And somebody that is apolitical and really
trying to help everybody kind of get through this very difficult time that I think we're all faced with, right, in the face of the coronavirus
pandemic.
CHATTERLEY: Yes, I couldn't agree more. I think the belief that your data is safe at this moment as well is of vital importance for people, too.
Greg, I think one of the big questions we're asking at the moment is the sharing economy. Something that was so useful to us pre-pandemic is now
something that perhaps is more frightening, if you're interacting with strangers.
You've said that your taxi business can be profitable in the second half of this year. How do you make this work? What is the future of ride hailing
and the gig economy in your mind?
ABOVSKY: Sure. So, our ride hailing business has been profitable for the last five or six quarters, I would say, and I think it's one of the first
ride hailing businesses in the world that is profitable for this long.
Clearly, when your rides drop as much as they do, you will come to a point where you will start to lose money just because you have a certain fixed
cost base that you're carrying, while the number of trips has declined quite a lot.
And I'd say Russia is no exception. In Moscow, obviously, the statistics that people cite is that rides are kind of down, you know, 40 to 50
percent, year-on-year, right, and what we've actually seen is we've seen an improvement in those trends, kind of starting with the first week of April
or so.
But I would say that what we've been able to do is we've been able to take some of the spare capacity that we now have with our drivers and repurpose
some of them to other uses.
For example, we've launched a platform to deliver e-commerce packages and other things for offline retailers. So, if you're an offline retailer,
you're all of a sudden faced with a problem that consumers don't want to or can't get to the store, and so what we're offering to them is, hey, we can
be your last mile, your transportation logistics provider. Come to us and we'll walk the last mile for you guys.
We've also recently launched an online grocery delivery service called Yandex Lavka, and now that the volumes there, up six times in the last four
months alone.
So, we're also trying to take all of these people that were part of the sharing economy, and try to still provide a living wage for them, if you
will, a way for them to earn money still just doing other things other than ride sharing, because that's obviously impacted.
CHATTERLEY: Yes, absolutely. And I know you've been offering free taxi services to doctors as well, which is critical at this moment in time.
Greg, we've run out of time, but please come back very soon, because there's so many parts of your business that are interesting to talk about.
This is just an introduction. Thank you for what you're doing.
ABOVKSY: Thank you so much, Julia, for having me.
CHATTERLEY: Thank you for joining us. Thank you. Greg Abovsky there, the CFO and CEO of Yandex.
All right, let's move on. The German Football League has just announced it will restart on May 16th, though with some restrictions.
World Sports, Amanda Davies joins us now. Wow. This is incredible, Amanda. What do we know? How are they going to restart? And what will it look like?
AMANDA DAVIES, CNN WORLD SPORT: Yes, Julia, let's not, you know, beat around the bush.
CHATTERLEY: Curb your enthusiasm.
DAVIES: This is a big decision. You know, we've already had France and the Netherlands drawing a line under this season. This is the first European
major Football League to announce it is coming back.
We'd had that indication yesterday, Wednesday, from the comments from Angela Merkel, but it has now been confirmed by the Chief Executive of the
German Football League, Christian Seifert that May the 16th is the date, less than two weeks away, football is coming back.
But as you mentioned, there is a caveat. It isn't football as we know it, as you would expect in these times. There are lots of protocols and
restrictions that have been put in place.
The teams are now all in a club by club quarantine training camp. They're staying in separate hotels, training separately. We know all the players,
all the officials, all the administrators who will be present at these matches will have to undergo COVID-19 tests.
[09:50:15]
DAVIES: We expect there's only going to be 300 personnel at each game. That means no spectators, no fans. We know that clubs like Borussia
Monchengladbach have already been selling cardboard cutouts.
Julia, you and I could be there in cardboard cutout form in the stands watching these opening games of the new resumed season. But there are going
to be all eyes on what happens on that first weekend, the 16th and 17th of May, not least from the other leagues around Europe.
We know there's the talks going on in Sarratt today what they're going to do here in England.
Project Restart, the Premier League, are having a big meeting on Friday. They've been lobbying the government to get underway again. But of course,
are waiting on Boris Johnson's new announcement what he is going to put in place or maybe restrictions he is going to lift here on Sunday.
It is very interesting what Christian Seifert said whilst he said in his opinion, it is crucial the football in Germany resumes, he understands that
all eyes will be on them.
As he has put it, this is a very fragile situation. It's a probation period for German football. There's nine games of this season, nine rounds of
fixtures left to play.
CHATTERLEY: And we'll see.
DAVIES: But I think as things stand, people, yes, are very much looking at this first weekend to see what happens.
CHATTERLEY: Yes, we'll be there in spirit as well, I think global sports fans, but keeping everybody safe, I think is the key. Amanda, great to have
you with us. Thank you so much for that. Amanda Davies there. All right, FIRST MOVE is back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. The global lockdown has done wonders for the financial physique of exercise bike maker Peloton.
Peloton is pedaling into high gear this session after reporting a more than 60 percent jump in sales were above estimates. It is also raising its
subscription growth targets.
Peloton getting the last laugh after being the target of withering criticism if you remember for a holiday ad, that many called cringe worthy.
That is long forgotten that we all stay at home and try to stay healthy.
In the meantime, speaking of stay-at-home stocks, Nintendo says profit jumped more than 40 percent in the latest financial year. That's a nine-
year high. It got a lot to do with the newest version of the hit game Animal Crossing.
Anna Stewart has the details.
[09:55:06]
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Welcome to your very own deserted island.
STEWART (voice over): For millions under lockdown, Nintendo's Animal Crossing is a welcome escape from the headlines.
A lighthearted game transports users to their own island, where they can fish, farm and befriend a whole host of talking animals. They can even hop
over to other player's islands, a safe way to socialize in a time of social distancing.
Animal Crossing: New Horizons sold five million digital copies in March, the most of any console title in a single month according to Nielsen's
Super Data, and its platform, the Nintendo Switch has sold out across multiple websites.
(BEGIN VIDEO CLIP)
MAT PISCATELLA, VIDEO GAME INDUSTRY ANALYST, NPD GROUP: Just a relief and a fun box of imagination and trying to build the island that you want to
build, while allowing your friends and family to have fun with you. So, it's a game all about community and connecting and it's really hitting a --
striking a nerve with the current audiences.
(END VIDEO CLIP)
STEWART (voice over): The game has found fans and celebrities such as Chrissy Teigen and T-Pain. Bobby Berk from Queer Eye is offering design
tips to help people upgrade their Animal Crossing homes, and actor Elijah Wood surprised one player on her own island, she tweeted.
Wood came to play the game stock market where buying and selling turnips can earn you a profit. Economics are central to gaming the system. Animal
Crossing has its own currency called bells, and its own central banker, a raccoon named Tom Nook.
Like in the real world, savers are having a tough time in the Animal Crossing economy. Nook recently followed in the footsteps of Jerome Powell
and Andrew Bailey slashing interest rates on all deposits.
Nintendo fans who decided the company was a better investment than its virtual bells are faring somewhat better.
With the success of Animal Crossing and the Switch, Nintendo shares are a rare winner in this year's dismal stock markets.
Anna Stewart, CNN.
(END VIDEOTAPE)
CHATTERLEY: And finally, the secretive street artist, Banksy has given medical staff in Britain an inspirational new work. It shows a little boy
who has dumped his Batman and Spider Man action figures, as you can see, instead, he is playing with a different kind of superhero, a nurse complete
with facemask and flowing cape.
The picture was left at a hospital in Southampton where staff have named the piece painting for saints, a reference perhaps to the city's Premier
League football team, nicknamed the Saints.
I think it's our medical heroes that are our version of saints today, I think. And we thank them all.
That's it for the show. I'm Julia Chatterley. Stay safe, and we'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
