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First Move with Julia Chatterley
Over 45 Million Americans Claiming Benefits Since March; President Trump's Former National Security Adviser John Bolton Explains Why He Thinks The President Is Unfit For Office; The $3 Trillion Recovery Plan For A Green COVID Recovery. Aired 9-10a ET
Aired June 18, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:03]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I am Julia Chatterley. This is FIRST MOVE and here is your need to know.
The jobs pain persists. Over 45 million Americans claiming benefits since March.
Bolton's bombshells. President Trump's former National Security Adviser explains why he thinks the President is unfit for office.
And continuing the climate comeback. The $3 trillion recovery plan for a green COVID recovery.
It's Thursday, let's make a move.
Welcome once again to our FIRST MOVErs around the globe. Great to be with you, and we're back.
We are watching both the science and the stimulus around the world in today's show. Monitoring the global response to COVID-19. China, India and
the U.K. have pledged fresh support in the last 24 hours.
Fed Chair Jay Powell pushing U.S. Congress once again for more action saying recovery will take years. I think that concern emphasized this
morning by the data as a further 1.5 million Americans filed for jobless benefits last week. The total, as I mentioned, since mid-March, now
standing at more than 45 million workers. That's one in three American workers.
Perhaps more worrying in this number for me, the number of people that are actually collecting benefits versus just asking remain stubbornly above
that 20 million mark.
The hope was that we would see this take a more sizable fall as jobs come back. It's tough to gauge at this stage whether we're now seeing a second
wave of redundancy as the COVID reality catching up. What we know is that cases are rising in almost two dozen U.S. states.
Take a look at the Dow and the S&P this morning set for a weak open. Tech though holding up here a flattish open there. Stocks gave back gains
yesterday, though the NASDAQ remains up 10 percent year-to-date. Wow.
The Asia session was pretty mixed. I can give you a sense of that. The most important takeaway from there, good news it seems from China on the recent
outbreak.
A high ranking health official there says the outbreak is under control following soft lockdown measures, and the nation's Central Bank Governor
assured investors he will keep the liquidity flowing in the months ahead to help support the economy.
The science and the stimulus. It sounds like just about every other Central Bank Governor we know, and that's the economic reality we face around the
world.
Christine Romans joins us now. Christine, I want to hone in, not only the fact that we are continuing to see more than a million works registering
for first-time benefits.
But the point that I made about the stubbornness that we're not seeing the number of people actually getting benefits coming down in any way really at
all.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes. The continuing claims number was really disappointing me, because when we saw
in the May Jobs Report the 2.5 million jobs that were created, you would hope that the overall number of people collecting a check, not just the
first time claims, but the overall number of people would start to come down, and it came down by like 62,000, but still holding there above 20
million, stubborn is exactly the right word to use. You are absolutely correct here.
So that's a disappointment. What I see is I just see a grind of layoffs. A million and a half again. Yes, these number are coming down, but they are
coming down from such a high level. Yes, the trend is the way you want to go, but when you have a trend that is improving from utterly catastrophic,
it's hard to feel like the green chutes are there in the economy.
What we also know here, we know some of the states have really high percentages of their labor market that have filed for unemployment
benefits. Georgia and Kentucky among them.
And in Kentucky in particular, I mean, you have people who went to the statehouse to protest, to demand that they get their checks processed
because there's still such a backlog of layoffs, and every [NO AUDIO] were laying people off or extending furloughs, you know, that's just worrisome.
July 1st will be the fourth month that rent will be due on the first of the month and that just shows you kind of the hardship, I think for American
families.
CHATTERLEY: Yes, I mean, this is such a great point as well, Christine. You know, for me, when I look at the numbers here and I look at the extent
of the challenge, even with 2.5 million jobs coming back, even with that bumper retail sales numbers that we saw and there seemed to be a lot of
optimism about that, the scale of the challenge going forward and the fact that many of the supportive measure, the bump up in unemployment benefits,
they run out come the end of July, the beginning of august, if Congress doesn't do something.
There's just no room for complacency even if we see big bounce backs in the numbers.
[09:05:04]
ROMANS: I have lost my audio, Julia, but when I'm reading your lips. I think what we are talking about is how we continue to support small
businesses and how to continue to support families whether we're going to need another round of stimulus and what it will look like and how the
Central Bank Chief has been talking about what will be necessary.
I think when we saw those good retail sales numbers, relatively good retail sales numbers earlier this week, you know, that was the stimulus checks,
that was enhanced unemployment benefits, that was government support of people who have been dislocated by this crisis.
Where do we go from here? What the next level of stimulus looks like -- anybody's guess.
CHATTERLEY: Christine Romans, thank you so much for that. And I just want to apologize to our viewers if they had trouble hearing you there. We had a
few tech issues, I believe, so all important information. Thank you for that.
All right, the U.S. Justice Department wants to stop the publication of a new tell-all book by President Trump's former National Security Adviser,
John Bolton. Among the claims inside, Bolton accuses the President of asking China to help him win reelection. In response, the President says
Bolton's book contains secrets.
(BEGIN AUDIO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: But he broke the law. Very simple. I mean, as much as it's going to be broken, this is highly
classified. That's the highest stage. It's highly classified information and he did not have approval, but it has come out now, very loud and very
strong.
(END VIDEO CLIP)
CHATTERLEY: John Harwood joins us now from Washington. John, if it's highly classified, does that mean it's true? Because it surely can't be
lies if it's the alternative.
The key for me, though, ultimately is, is there anything that we think that's in this book that might have changed minds, particularly the Senate
Republicans in the Impeachment Inquiry, because surely that this is what it comes down to?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: You know, I'm not sure it would have changed minds in the Impeachment Inquiry. And you were right to
note that in that clip you just played from President Trump at no point in that in that response did he say that things were untrue. He said they were
classified, which in the context of President Trump means they're embarrassing.
There are a couple of specific things of note with respect to impeachment over the interactions with Ukraine. John Bolton said Democrats were too
narrow, that there were other instances of the same and he said, in fact, it was obstruction of justice as a way of life for the administration.
He also recounted an episode where the President interacted at the G-20 meeting with President Xi Jinping of China and was discussing -- President
Xi was explaining he was building concentration camps for the Uyghurs who were Muslim to confine them, and the President said that's exactly the
right thing to do.
But I think we ought to step back and recognize that this is not about a disagreement, a feud, the dust that will get kicked up about specific
episodes.
In 2016, when Donald Trump was running for office, Republicans who ran against him, Ted Cruz, Marco Rubio said he is utterly amoral. He's a
narcissist. He's a pathological liar. He's a con artist. Hillary Clinton said he is unfit for office.
That was in the campaign and people dismissed that as campaign rhetoric. Now we have with John Bolton, with Jim Mattis, with John Kelly, who was the
White House Chief of Staff, the people closest to the President, working in the most senior jobs in his administration saying now, you know what, all
that stuff was true.
He is amoral. He is dishonest. He is focused exclusively on himself rather than the United States. He is unfit for office.
And when you talk about changing minds, I think what's happening now with the American people, when you see his approval ratings go down, when you
see him fall further behind Joe Biden, is that people are connecting those characteristics of the President which have been pretty obvious throughout
his term, to real tangible consequences in their lives.
The economic wreckage that you talked about with Christine Romans, 45 million people filing for unemployment benefits, the public health threat
of the coronavirus pandemic, and now the turmoil that is tearing America apart over race relations, all things that the President has either ignored
or exacerbated with his conduct.
And I think that's where the minds are getting changed now that people look ahead to the election and see, do we really want four more years of this?
CHATTERLEY: Yes, it's an interesting question. I'll have to say those that hate Donald Trump and have done so from the beginning, those that love him,
will love him. It feels no matter what. It's the people in the middle here that truly matter and to your point, many of them right now are suffering.
John Harwood, thank you so much for that.
Now, there haven't been many positives as a result of this pandemic, but a healthier environment is one of them from flamingos flocking to a locked
down Mumbai, to jellyfish swimming in Venice's unusually clean canals. The Earth has taken a breather thanks to lower levels of pollution and a drop
in human activity.
[09:10:07]
CHATTERLEY: Now, the International Energy Agency says it wants to continue that trend. It has announced what it calls a Green Recovery Plan worth $3
trillion.
John Defterios is the anchor of CNN's Global Energy Challenge and he joins us now. John, took me through this because this should be a huge
opportunity if we want to reinforce economic recovery, bring back jobs, they should be good ways to do that and do it more cleanly in terms of
energy, and that's part of this plan.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: I think it's at the core of the plan, Julia, because many of the economies as you know and
investment has been retrenching as a result. So, the IEA led by Fatih Birol saying let's seize the opportunity.
You talked about in your lead-in and we've had a historic drop in oil demand and emissions are dropping. So, this has been a big progress, but
they're one offs. They're not going to solve the challenge to 2050 in the Paris Climate Change targets right now.
At the same time, they're saying this is a historic window to redraw the roadmap here. We can redraw what we're going to be doing in the energy
sector overall. It could preserve -- and we're not talking about long term, Julia, between 2021 and 2023, up to three million jobs of the 40 million in
the overall sector right now.
Additionally, you want to try to redirect to the transition. Oil and gas companies here where they have prices hovering in the oil sector, between
$40.00 to $50.00 a barrel, that's not going to drive huge demand here, but where is the Investment Committee?
And the big concern is and they are earmarking for 2020, is that demand is dropping around nine to ten percent, but we have investment dropping 20
percent and we're talking about serious dollars here, up to $400 billion this year. So, this is that chance.
And by the way, it's the Europeans leading the role here. They have already a Green Fund as you know. They're starting off with a trillion dollars and
the plan is to invest $300 billion each year through 2030. So, this is a chance to get the whole globe -- Asia and the United States -- into that
equation.
CHATTERLEY: Yes, it's fascinating, isn't it? The hope is that people follow through on this. I have to say I'm a bit skeptical. John Defterios,
thank you so much for that update there.
Now shares of the Chinese e-commerce giant JD.com made the debut on the Hong Kong Stock Exchange Thursday. They closed up three and a half percent.
The company raised almost $4 billion in the secondary listing, which comes amid rising tensions between the United States and China.
Sherisse Pham joins us now and has been looking at this. It is being called a homecoming listing, Sherisse. Obviously, they've already got a listing on
the NASDAQ, but the fear here with perhaps forced de-listings in the future given tensions, making I think a lot of these Chinese companies eyeing
alternatives.
SHERISSE PHAM, CNN BUSINESS REPORTER: Yes, absolutely. JD is part of a wave of Chinese companies that have sought secondary listings here in Hong
Kong. JD's listing today is the biggest debut in Hong Kong, the biggest IPO if you will, in Hong Kong so far this year. So, it's a big homecoming for
the Hong Kong Stock Exchange as well.
And I talked to the Vice President of JD retail. We talked about not only the rising U.S.-China tensions, but also the importance of this date. June
18th. It is a big day for JD.com. It's an annual sales blitz they have, and this year it is being closely watched just to see how Chinese consumers are
spending on the back end of this pandemic.
(BEGIN VIDEOTAPE)
LING CHENKAI, VICE PRESIDENT OF RETAIL, JD.COM: This June 18 is very special is there a special, just as you mentioned that we just got recovery
from the virus. So, that this moment is pretty important and this is the first national wide sales event during the recovery of the virus.
But we do see a very good strong momentum. There is a pretty good bump during this period of revenge consumption. And we saw all the categories,
for example, electronic categories, fresh, medical, 3Cs, beauties -- are all just rebounding very well.
PHAM: What were the lessons that you learned from this crisis? This is one of the biggest crisis that any of us have faced in our generation. And I'm
sure it was the same for your company as well.
CHENKAI: During this epidemic, this is a double edged sword, right? For some category, it really -- during the academic period, it really helped us
to grow, but for some of the category that gets the direct impact, for example, home appliance and those big ticket items.
PHAM: You also are at risk, of course of the U.S.-China relationship deteriorating further, what is JD doing to sort of protect its business
from the risk of rising tensions between Beijing and Washington?
CHENKAI: I think we are just accompany a business. A business, right? So I cannot comment on the political side, but for us, we do hope that there
could be a very open and equal environment, global environment and for us to work with the other economies, no matter it's domestic or overseas.
(END VIDEO CLIP)
[09:15:19]
PHAM: So, being able to do business overseas and domestically, very important for JD. So far, they're saying for the June 18th sales event,
they have pulled in 239 billion yuan, Chinese yuan. That is about $33.8 billion, and that's only as of 2:00 p.m. today, so there was still 10 hours
left in the sales blitz -- Julia.
CHATTERLEY: Yes. And I have plenty of investment interest from overseas investors even in the United States, too. So yes, not deterred by the
broader political tensions, it seems.
In any case, Sherisse Pham great to have you with us. Thank you so much for that.
PHAM: Thank you.
CHATTERLEY: All right. Let me bring you up to speed now with some of the other stories making headlines around the world.
The former Atlanta police officer who fatally shot a 27-year-old black man last week has been charged with murder. Rayshard Brooks was killed during a
confrontation outside a Wendy's restaurant.
Prosecutors say Garrett Rolfe kicked Brooks after shooting him and failed to give first aid. The defense attorney say he did give Brooks medical
attention.
France's Emmanuel Macron is visiting the U.K. in his first foreign trip during the coronavirus outbreak. It marks the 80th Anniversary of the
speech the French General Charles de Gaulle gave from London in World War II, calling on his country to resist Nazi occupation.
The French President will hold socially distanced talks with British Prime Minister Boris Johnson.
And the British Prime Minister also leading tributes to the entertainer and singer Dame Vera Lynn who has died at the age of 103. With her best known
song, "We'll Meet Again," she was known during World War II as the forces sweetheart.
Boris Johnson said her voice will live on to lift the hearts of generations to come.
(BEGIN VIDEO CLIP)
VERA LYNN, ENTERTAINER AND SINGER (singing): We'll meet again, don't know where, don't know when. But I know we'll meet again some sunny day
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[09:20:21]
CHATTERLEY: Welcome back to FIRST MOVE live from New York, where U.S. stocks are on track for a lower open this morning. The volatile aviation
sector in particular weighing today. You can see that. They are down some one percent at this stage for Dow futures. Boeing is set to fall around
three percent which is one of the big weights on the broader index here.
Investors too are concerned, I think, about the number of people filing for U.S. jobless benefits. A further one and a half million Americans just in
the last week. That brings the total number of claims to more than 45 million people since mid-March.
Now, the number of Americans still collecting benefits fell slightly last week. But that number remains stuck stubbornly above the 20 million mark.
Claims have been trending lower, admittedly for the past 11 weeks, but it's still about as twice as high as when previous records was set back in the
early 1980s.
The U.S. jobs situation would have been even worse, without PPP, the Paycheck Protection Program. It was created by U.S. Congress in March and
its $2 trillion Coronavirus Relief Package, it's been credited with saving jobs during the depths of the lockdown. It allowed businesses to borrow
money with the assistance of a Treasury Guarantee.
Well, now the Consumer Bankers Association which represents the U.S. retail lending industry is calling for loans below $150,000.00 to be automatically
forgiven.
Richard Hunt is the President and CEO of the CBA and he joins us now. Richard, fantastic to have you on the show. You know, I look at these
numbers that we get every day, and it's astonishing to me that the belief is that these numbers would have been far worse without this lending scheme
to small and medium-sized businesses. But that's the truth here.
RICHARD HUNT, PRESIDENT AND CEO, CONSUMER BANKERS ASSOCIATION: Yes, it is. We think we've saved about 30 million jobs in this country. Over 5,000
lenders got together and worked overnight to work with the S.B.A. in the United States Department of Treasury to process over $500 billion in loans.
Now, keep in mind on a regular year, through the 7(a) Program, you would only process about $20 billion in loans. So we've gone from $20 billion to
$500 billion, basically, two decades worth of loans just done in about eight weeks' time.
So we're very proud of the effort we worked with the small businesses to save and retain jobs, create jobs, in some cases; still have got a long way
to go with this coronavirus still hanging around. I'm very, very impressed with the work that the banks did to help small businesses during their time
of need.
CHATTERLEY: It happened incredibly quickly and there was criticism over the contours of this program, how these small businesses managed. It was
tied to them retaining workers, which is the point you're making about how many jobs you think have been saved.
Why now do you think it's so important to see loans that were extended to these small businesses below $150,000.00 to simply be forgiven?
HUNT: Yes, so think about the size of a person who have received $150,000.00 loan. They certainly do not have an accountant or a chief
financial officer employed there. It's time for them to open their businesses and retain people.
The average loan will cost anywhere from $2,000.00 to $5,000.00. The average application fee would cost about $2,000.00 to $5,000.00 and some 20
more hours it would take out of running a business just to perform the application process that is now being asked by the Federal government.
So yes, us, the retailers, the realtors, the National Association of Federal Credit Unions, Bank Policy Institute are all banding together to
ask Congress to give all those loans under $150,000.00 to be automatically forgiven, enough of the paperwork, enough of spending time with the CPA of
the world, and more time to go work with their customer.
CHATTERLEY: And just to give our viewers a sense, this is around 85 percent of the loans that were given. It's around a quarter of the notional
in terms of the billions of dollars that will end. What are you hearing, very quickly, from Congress from the Treasury over the probability or the
possibility of them agreeing to this?
HUNT: So just yesterday, we're very encouraged in the congressional testimony how many Members of Congress raised their hand and say yes, it's
time whether it's $150,000.00 or $350,000.00 or as low as $100,000.00 to automatically forgive these loans.
We expect very soon to have bipartisan legislation introduced in the United States Senate to do just that. Let people who borrowed $150,000.00 or less,
to have those automatically forgiven.
[09:25:25]
HUNT: Maybe there is a one page attachment at the end of the day. But the less paperwork, the better for small businesses can get back to work and
not worry about retribution from the Federal government.
We're in a crisis. This is not every day application. This is application in a time of crisis. So, it's time now for small businesses get back to
work without retribution from the Federal government.
CHATTERLEY: Richard, I want to ask a question about accountability for the banks here and how the lending took place. I know it happened under speed.
It was about getting the money out there as fast as possible. So, there was a push just to get it to the clients that you had. I understand all of
that.
But do you think that minority businesses in particular that didn't have those established banking relationships were harmed in this process?
Because they simply didn't get access to the money soon enough, if at all?
HUNT: Yes, so we're hoping that's not the case. We're working with several entities to make sure that every single person in this country who runs a
small business has access. We still have $100 billion left in this account, which we believe would find over one million businesses. So, regardless of
the type of small business you have, if you need assistance, please go to the SBA.gov website.
Look at the 5,200 lenders that are still making these loans, and please get to them ASAP. We don't want anybody to be left behind during this crisis.
CHATTERLEY: It's such an important message. Will the banks make money? Will they break even? Or will they lose money on this? And do you see this
as perhaps an opportunity for some of these banks to do their part, perhaps say sorry for what happened back in the financial crisis? Is it being
viewed that way?
HUNT: Look, this is -- sure. Great point. The banks believe this is their, A, patriotic duty to help small businesses out in their time of need.
Period. Banks worked around the clock 24/7, especially those first three weeks to get their operations up and running.
I'm very, very proud of the role the banks played in this Herculean effort to get this program on board. This program normally would have taken over a
year to implement. We got it implemented within about two weeks, when it was all said and done.
Many of our banks have already said, for any dollar they made, they will donate it to their foundation or to charitable organizations. I don't think
at the end of the day, banks will make money and that's okay. It's our patriotic duty to step up in the small business time of need.
Not only are they our customers, they are God fearing Americans who get up every single day trying to provide a good or service in very, very thin
margins. We hope that 100 percent of all the loans will be eventually forgiven, because that means we've created or saved 30 million jobs.
CHATTERLEY: Yes, it's about saving jobs and fighting for businesses and the economy. Richard Hunt, thank you so much for that. Richard Hunt there
of the Consumers Bankers Association. Thank you. The market open is next.
(COMMERCIAL BREAK)
[09:31:38]
CHATTERLEY: Welcome back to FIRST MOVE where your stocks are open for trading this Thursday on another day where the jobs market remains well and
truly, front and center, a further one and a half million Americans filing for first time jobless benefits.
You can see what we're seeing for the market open this morning. The Dow lower by some seven tenths of one percent, a continuation of some of the
weakness that we saw for the Dow and the S&P yesterday.
We were looking slightly weaker up before the open, of course, and then we got those jobless numbers. It's the continuing claims, I think that are the
real worry here, remaining above the $20 million mark. If we're seeing jobs coming back, that should be coming down quicker I think than we're seeing
it.
Stocks falling despite renewed commitments from Central Bankers to stimulate economies. China's Central Bank Governor is pledging to keep the
liquidity support flowing.
Then we've got the Bank of England boosting its bond buying program by an additional $120 billion plus. The Central Banks of Indonesia and Brazil
also announced rate cuts this week, and fresh Indian stimulus also expected soon.
Now, there was one piece of good economic news out today and I want to point it out. A gauge of factory activity in the Philadelphia region jumped
back into positive territory this month for the first time since January. It's a closely watched survey. So, we'll continue to point out these bright
spots among the data, too.
Now as retailers reopen their doors, telling staff and customers that it's safe to come back and to shop was never going to be simple. There has been
a dramatic rethink inside stores which specialize in products that you try before you buy.
Ulta Beauty claims the mantle of being America's biggest beauty retailer, it has reopened 90 percent of its stores based on an abundance of caution
with masks Perspex and social distancing everywhere.
Mary Dillon the CEO of Ulta Beauty and she joins us now from one of her in- store salons in Chicago. Mary is also the head of the Retail Industries Leaders Association. Mary, great to have you on the show and also in stores
that we can get a look and see what's going on there.
Just talk to me about what impact you've seen in terms of sales and changes that you've implemented as a result of the last few months.
MARY DILLON, CEO, ULTA BEAUTY: Thank you, Julia. So great to be here. Yes. So at Ulta Beauty, you know, it's been a journey for all of us in retail.
I'm thrilled to say that we've got 90 percent of our stores open across the country today, at least with curbside pickup, I call that Ulta Beauty to-
go.
And we have about two thirds of our stores or over 800 that are open fully including salons, and so you can imagine, we spent a tremendous amount of
time making sure that what we had ready for our guests was going to be a safe and comfortable experience.
And so that involves everything from you know, making sure that our associates do wellness checks before every shift, social distancing,
certainly, hand sanitizer throughout, facemasks, which our associates are wearing and we encourage our guests to do that as well. And our testers are
only for display right now.
So, we have really tried to bring the fun back, but also do it as safely as possible for our guests.
CHATTERLEY: Yes, it is a huge challenge. Throughout that period, what proportion of the sales that you've lost because your stores and salons
were shut? Did you actually manage to transfer online? Because I think of myself, I would buy something online that I've already used, but for beauty
products, you want to test them. You want to actually engage with the products in store. That's kind of an ongoing challenge for you guys.
[09:35:17]
DILLON: Yes, absolutely. But on the other hand, it's been also a great opportunity, right? Because we became an online only business there for
several weeks when we made the decision to close our stores for the safety of our guests, and our associates.
So our e-commerce business ulta.com demand really, really shot up quickly. And then when we opened up the curbside pickup, same thing. We found guests
really wanting to come back and engage, and as we're opening stores, we see a lot of folks coming into the physical store as well.
So, we love it when guests engage across all channels, and you know, you're right. Trial and discovery is a huge part of the beauty business, and so we
know that's going to continue to be the case and we're ready to innovate to make that happen for folks as well.
CHATTERLEY: What kind of growth in online did you see?
DILLON: We were up over 100 percent in the first quarter of this year, and we know that a lot of that adoption of new digital behaviors for everybody
is going to continue to be the case.
You know, one cool thing is that we have something called Glam Lab on the Ultra Beauty app, and I'm so thrilled we've been investing in this
capability. You can try on virtually thousands and thousands of shades of products and get a sense of what a lip color and eye color, even lashes or
a new hair color would look like on you, and we saw a five X increase in the amount of people that are engaging in Glam Lab during that time as
well.
So when people come to our stores, our associates will show you how to download the app and how to Glam Lab. You can do it in the store or at
home.
CHATTERLEY: Sounds good. Talk to me about workers. How many of the workers that you had before have you bought back? And how many have you, perhaps
had to make a decision to furlough or to let go?
DILLON: Yes, so stepping back, you know, you mentioned RILA. So, RILA is a group of leading retailers across the U.S. and I'm the Chair of that this
year. Forty two million people are employed in retail in the U.S., and so it's really critical for their livelihoods as well as to the economy that
we bring retail back and that it opens up again, right?
And Americans are coming back to shop. I mean, you probably saw that the numbers that came up for May sales in retail were up 70 percent versus
April. They're still down a bit versus year ago, but it's moving in the right direction.
At Ulta Beauty, we had to make the tough decision to furlough a lot of our sources associates. But guess what, they're coming back. We're bringing
folks back as we're starting to reopen. And I can tell you that Ulta Beauty associates are thrilled to come back to work and serve our guests.
CHATTERLEY: I mean, you've sustained strong growth for the last 10 years. And I know the analysts that look at what you're doing, and they're very
optimistic about how you progress even from here.
Do you think you can bring all those workers back? Just based on what you see for the retail industry in general?
DILLON: Yes, I guess, we'll see. You know, as we go through the summer, we expect to have all of our stores opened up by the end of July. So, I'd say
majority of the case, that'll be, that people are going to be coming back.
But you know, as I said, retail together is working to do this in the safest possible way and also to bring people back as well as to help the
economy by simulating retail demand.
So, we'll see as it continues to go. I love the innovation that's happening in the industry and finding new ways to meet guest needs.
CHATTERLEY: You know, it's interesting, I want your retail, the broader sector hat on right now to answer this question. We're seeing a social
shift, a far greater focus on minorities, whether it's in terms of workers, and the conditions that they have and the opportunities that they have, but
also just in terms of products and approach from brands and businesses on how they represent themselves and their values.
What's the most important thing do you think for the retail industry now and the message that they need to be sending?
DILLON: Well, I would say, it's all about listening and learning and evolving on the journey. I can speak to -- I mean, retail, I know of retail
CEOs across the country who are dedicated to making sure that their associates and their guests feel included and see themselves.
If I think about Ulta Beauty, our mission is making sure that everybody sees the possibilities of beauty for themselves at Ulta. And so, you know,
we have been on that mission for a long period of time, in fact, so what we're doing is trying to play a role here and have a voice amplifying black
voices on our social channels, Black Beauty, we have a great number of black owned brands that we've launched in the last few years like Uoma,
like Beauty Bakery, like Pattern by Tracee Ellis Ross. It will continue to add to that roster.
I think probably, also, the most important thing is to listen to your own associates. Really understand their journey, and I feel proud about the
diversity and inclusion values and how we brought those to life at Ulta.
But we all have work to do and so I'm very committed to listening and learning that and I know that's true of everybody I know in retail.
CHATTERLEY: Yes. Listen to the people voice. Mary Dillon, great to chat with you. Come back and talk to us soon.
DILLON: Thank you.
CHATTERLEY: I want to hear your progress. The CEO of Ulta Beauty there.
All right, up next, as India grapples with a brutal border conflict, Fitch, the rating agency downgrading the country's outlook over the COVID-19
fallout. We've got analysis, next.
(COMMERCIAL BREAK)
[09:43:20]
CHATTERLEY: Welcome back to FIRST MOVE. In India, funerals are being held because some of the 20 soldiers India says were killed in a border clash
with China. The conflict comes as India faces ongoing challenges from COVID-19.
Rating agency, Fitch, cut the country's outlook to negative citing the lockdowns impact on economic growth. Joining us now Ruchir Sharma. He is
the author of the book "Rules of Successful Nations." He is also Chief Global Strategist at Morgan Stanley Investment Management and joins us from
New Delhi.
Ruchir, always great to have you on the show. It's fascinating to see that India followed through with many of these lockdown measures that we've seen
other nations, particularly in the West enact, but with far greater firepower to try and offset some of the economic consequences as a result.
How bad is the fallout from that COVID-19 first?
RUCHIR SHARMA, CHIEF GLOBAL STRATEGIST, MORGAN STANLEY INVESTMENT MANAGEMENT (via Skype): Well, as you know, Julia, there is a pretty
straight relationship in terms of the severity of a lockdown and the severity of the economic contraction.
So because India decided to enact what was possibly the most draconian lockdown in the world, at least in the month of April, economic activity
has taken a huge hit here. By most estimates now, this is likely to be the worst economic contraction that India has suffered in its post-independence
history. So that's what we're looking at in terms of the outlook for the next few months.
The more disturbing part has been that despite having such a draconian lockdown, the success in controlling the virus so far has been quite mixed.
Now, the fatality rates are pretty low, but the case growth is still exploding.
[09:45:10]
SHARMA: So in a way, this has really not turned out to be an ideal scenario for India, because you are -- and again, of having these two
outcomes where a very draconian lockdown was enacted, and now you've been forced to open the economy up because the government is broke or nearly
broke, and that's why these rating agencies are obviously issuing these kind of warnings now.
CHATTERLEY: What are we looking at in terms of workers displaced? You've pointed out 140 million migrant workers, but the unemployment rate isn't
even given by India. It's very complicated to calculate. What's your estimate here?
SHARMA: I just said that, you know, it's very hard to have estimates in India. It's these think tanks which try and put out some estimates and the
number that I quoted in "The New York Times" piece that you're referring to, which I wrote, was in the region of somewhere around 25 percent or so
as far as the unemployment rate is concerned.
So, it's that kind of situation. But, you know, this is the issue with data or analyzing economies like India that using developed country concepts
like unemployment rates, or how will the lockdown affect these economies is so hard to do, because data and other metrics are so much harder to come by
in these countries.
CHATTERLEY: You also made two astonishing comparisons as well. India having one twentieth of the average income of the United States, to your
point about the difficulty of adding further support -- support to the tune of two percent of gross domestic product versus the United States that's 12
percent plus, it depends how you choose to calculate that. What's this going to mean?
SHARMA: As I said, India is likely to face its worst economic contraction in its post-independence history and that goes back to 1947. So, that's
what it is going to mean.
Now, of course, the positive aspect here is that the economy is opening up. If you look at the mobility data, things are limping back to normal. So at
least that rethink has happened at the government level that its lockdown was very much a temporary strategy and India just has to get back to work
because it can't afford any extended lockdown strategy.
So, at the margin, things are -- on the economic front -- are improving, but as long as the case growth remains high in places like Delhi and
Mumbai, consumer behavior will still be very much affected by it.
But I want to focus here at least at the margin on the positive that economic activity is returning, if not to normal at least coming back from
the very draconian lockdown hits that it took in April and May.
CHATTERLEY: Yes, we should focus on the positives, too, and look for those green shoots. Ruchir, I should have calibrated my question there in terms
of the social aspect, because if I look around the world, and you're so great at connecting the dots on these things, there is anger being directed
towards China for their initial handling of this.
Obviously, I introduced you by mentioning the tensions that we've seen on the border between India and China, too. How do you see that playing out
particularly for Prime Minister Modi, who came to power last year on this sort of stance of national security? This is a sort of pivotal moment,
whether it's the economy or whether it's politics here, surely.
SHARMA: Yes, I think that as far as the Prime Minister is concerned, the biggest advantage he has in India today is that there isn't much of an
opposition. So therefore, he has an enormous amount of political capital and he is able to get away with a lot and I'd say that even in these kind
of situations, you know what happens, Julia, is that the nation tends to rally behind its leader, and this is true across the world.
I think that putting back my global hat here, which is the fact that the approval ratings of many leaders around the world have gone up
significantly over the past couple of months as they have suffered through this crisis. The issue is that now once that sort of high comes from
rallying behind your leader, in the end, people care about basic things like jobs and inflation.
So the focus may go into that, but in India's case, as I say that people seem to be rallying behind the Prime Minister or they have done so for the
last two or three months. But if the economy does not come back to normal, and these migrant labor is -- we just get to hear a lot of anecdotal
evidence at least that there's a lot of anger at the way that they've been displaced. That'll obviously be a political challenge for the Prime
Minister.
But currently, he remains unchallenged and I think that as far as this crisis with China is concerned, very hard to know what it means for him
politically.
But I think that we are all hoping here that this deescalates because the stakes are so high for both these countries to let this really spin out of
control.
[09:50:15]
CHATTERLEY: Yes. Find a peaceful path here. Ruchir, this is why it's always great to have you on the show. Always a different perspective.
Ruchir Sharma, Chief Global Strategist at Morgan Stanley Investment Management. Always great to chat with you.
All right, we're going to take a break here on FIRST MOVE, but coming up, the Premier League is back with a delayed kickoff in support of the Black
Lives Matter Movement. That's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. The English Premier League, the world's richest football league kicked off on Wednesday after a three-month
halt and players made a very visible gesture of solidarity with the Black Lives Matter Movement.
Alex Thomas is live in Manchester with all the details. Alex, a few technical issues, a disallowed goal that was clearly a goal, I believe, the
kneeling in show of support. It had everything for the fans. How did it go down?
ALEX THOMAS, CNN SPORT: It did. Hello again, Julia. Yes, on your show yesterday we talked about having to wait more than three months for the
return of England's globally popular, Premier League. We've now seen action back here again, including in the stadium behind me, the Etihad Stadium
where Manchester City beat Arsenal three nil.
But what was the standout moment of the whole evening was this astonishing display of solidarity after both of Wednesday's Premier League games kicked
off, so the match was actually underway. The first thing that every single player from both teams in both games did and the referee and the coaches
was take a knee.
All of the players have agreed for the first dozen or games to where Black Lives Matter on the back of their shirts instead of their names, and here
you saw the game suspended with the players taking a knee.
And that certainly was something that was a talking point after the game, and this is what the City boss, Pep Guardiola had to say.
(BEGIN VIDEO CLIP)
PEP GUARDIOLA, MANAGER, MANCHESTER CITY: Here, people has apologized and say sorry for the way we treat the black people in the last 400 years or
four centuries, so, I feel ashamed of what we have done for this marvelous black people around the world. It is not a problem with the USA, in the
United States of America, with what happened with Mr. Floyd, I think it's a problem of racism that's everywhere.
(END VIDEO CLIP)
THOMAS: It was also fitting to see Raheem Sterling, the England star and a vocal critic of racism in football scored the opening goal for City in
their victory here over Arsenal, something for his fans to cheer about although there were none doing that in the stadium, of course, because
spectators are still locked out because of the coronavirus fears.
Nonetheless, no spectators didn't mean no excitement because in Wednesday's earlier game, after the BLM gestures, it was sort of nil-nil draw between
Aston Villa and Sheffield United.
[09:55:08]
THOMAS: But we also saw this astonishing technical glitch where the ball crossed the line, but the goal line technology system run by Hawkeye didn't
register it.
Hawkeye later releasing a statement apologizing saying it was an error and that none of their cameras in the stadium were able to see clearly that the
ball had crossed the line and that hadn't happened before in more than 9,000 games previously.
So for the sports fans, plenty of excitement and interest, Julia, but it does now mean City win but Liverpool will have to wait longer to clinch
that title they've been waiting for, for 30 years.
CHATTERLEY: Oh, Hawkeye needs some glasses and I have to wait for Liverpool's championship win. How exciting. I was going to show our viewers
the league table just to illustrate the lead that we have right now.
But I don't want to crow too, loudly, Alex. Oh look, we've done it anyway. Yay.
Go Liverpool.
THOMAS: Plenty of time.
CHATTERLEY: Yes. Alex Thomas, thank you so much for that.
All right, that's it for the show. You've been watching FIRST MOVE. Stay safe and I'll see you tomorrow, Friday.
(COMMERCIAL BREAK)
[10:00:00]
END
