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First Move with Julia Chatterley

Chinese Stocks Are Surging; Coronavirus Cases Are At A New High In Florida, California And Texas; Buffettt Is Buying A Large Deal In Natural Gas. Aired 9-10a ET

Aired July 06, 2020 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:10]

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Richard Quest. A new week begins and this is your need to know.

Chinese stocks are surging. Investors have charged into a bull market on a relentless and renewed optimism. We'll get to grips as to whether this

optimism is justified.

Coronavirus cases are at a new high in Florida, California and Texas. More restrictions, after a long holiday weekend. We'll get numbers that show how

bad it has become.

And Buffettt is buying a large deal in natural gas and it raises investors' questions over thoughts of where is he going next.

It is Monday. We start a new week. This is FIRST MOVE.

As I indicated, a very good day and a warm welcome to FIRST MOVE. Julia is off for the day. I'm at the helm for the moment and full steam ahead.

The market is headed for a strong open after a long weekend. The futures are pointing to a gain of around one percent -- 1.5 percent actually now

for the Dow futures. The S&P is the same and as is the NASDAQ. A positive day overall for equities and it's off the back of what's happening in

China, where there's been a strong rebound. Solid gains in Europe.

U.K. and Germany are taking the lead. Bank and auto shares are amongst the best gainers of the day that is all helping sentiment. The Hong Kong Hang

Seng is up four percent, the Shanghai Composite is over five percent. Both indices have now risen 20 percent from their recent lows.

It is the classic definition, if you like, of a new bull market getting under way, and one of the reasons is the Chinese state media saying that a

healthy bull market is in the best interest of the country right now.

Asian investors have been pricing that in and we're seeing very strong gains around all of the APEC region markets, economic recovery. The

valuation of Asian shares hit a 10.5-year high at the moment. There you have it. Just look at the way the Shanghai has roared back up again.

David Culver is in Beijing. David is with me now.

This is very interesting, David, because even whilst Beijing is dealing with the remnants and some would say a second wave of coronavirus, the

markets are telling a strong story of recovery.

DAVID CULVER, CNN CORRESPONDENT: A massive surge, Richard, when you look at the Shanghai Composite. It's best single-day performance since 2015. And

you're absolutely right, we think about what we're in the midst of right now and these cluster outbreaks that have still been popping up and been

really kind of put out rather quickly.

But you have to look at how they're doing that now, because the big concern going back to mid-March when we saw really some of the lowest points of

this market, were that when you were doing these lockdowns and these closures of society, you were stopping business altogether.

That was a big concern coming from the top. President Xi Jinping, when he would come out would say two things, we've got to stop and contain the

spread of this virus and we've got to stabilize the economy.

Now, what they have started to do, particularly within Beijing as you mentioned, is they do this compartmentalized shutdown, so certain parts of

the city are shut down, but the rest is open and business continues. And that is strategic and it is intentional in keeping the economy going.

But the performance today, certainly signaling that things are looking to be in a positive direction. The question will be, can it sustain itself

here -- Richard.

QUEST: And if we look at the industrial production numbers and if we look at hotel openings, just about all the economic metrics that one looks at,

does suggest that the Chinese economy has reopened relatively successfully and is coming back strongly.

Now, taking the numbers with a pinch of salt, because from where they come, is that the anecdotal evidence, too?

CULVER: It's fascinating to see where the successes are within the economy here because it's domestic related. All the travel that we have seen, and

we have done a lot of travel over the past few months within China, for obvious reasons, essentially the borders are shut down to everyone else as

they are still trying to contain the spread of the virus.

But you are noticing that some of the so-called revenge spending that they were expecting here post-virus is being spent within China and that's

something that seems to be intentional.

State media seems to be quite happy about that as does the government, and you're noticing it certainly within major cities that in the past may not

have seen the spike in tourism from a Mainland Chinese crowd, but now they're getting that because quite frankly, people don't want to leave the

country, so they're spending within.

[09:05:31]

CULVER: The other thing going forward is looking at some of the production and where the supply chains are going to go.

I think the big concern here also, and you hear this anecdotally is that while China may be finding a stabilizing point, are they going to be able

to find that with the consumer? And that is to say, those factories that are producing things, are they going to be able to sustain a customer base

going forward? That's the concern right now.

But all signals from the market today indicate that at least one sector is doing quite well and this is quite interesting, and that is defense here.

Chinese defense stocks doing very well in performance today and that's also in part with what we saw over this past weekend, Richard, down in the South

China Sea and that's increased tensions there.

The U.S. sending two carrier strike groups to do some exercises, the Chinese not happy about that. But certainly, the market is responding

positively.

QUEST: David Culver. There is much there. Thank you, sir. I appreciate it.

Now to the United States where coronavirus cases -- confirmed cases continue to rise at record levels. California has reported a record 11,700.

I do beg your pardon, I seem to have allowed myself to get ahead of myself.

We are of course supposed to be talking about Warren Buffettt at this particular point. My complete mistake.

Warren Buffettt is buying natural gas assets, nearly $10 billion deal. It's the first big investment that Warren Buffettt since the start of the COVID-

19 pandemic.

Clare Sebastian -- Clare, it probably gave you a nasty shock there when you, for one moment probably decided we were going off in a different

direction. My apologies on that. We will be talking about the U.S., but we do need to get to grips far more presciently with Warren Buffettt.

So, this is a very large deal in natural gas. What has he done and why?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard, it is a pretty big deal. The enterprise value is $9.7 billion, of which Buffettt is paying

$4 billion in cash. The rest is in acquisition of debt. This is for the sort of natural gas assets of Dominion Energy.

And it is interesting because it shows that The Oracle of Omaha who already have a very big portfolio in energy, transportation, storage -- all kinds

of things, is looking to expand that betting on fossil fuels, at the same time as Dominion Energy said in the press release announcing this deal that

they are looking now to focus more on clean energy. That is certainly interesting.

But interesting also, because he has been on the sidelines, as you point, throughout the pandemic. He sold all of his shares in U.S. airlines at the

beginning of May. That raised some eyebrows because the stocks have grown.

Since then, he is looking for the long-term on those stocks, we should point out.

And so people have been wondering what he is going to do with this $137 billion in cash that Berkshire Hathaway has, a record for the company. So I

think, waiting until the holiday weekend to do that and really going in big on energy is certainly going to fuel some bullish sentiment out there, not

only on the recovery in the United States, but also perhaps when it comes to commodity prices.

QUEST: Right, but this particular deal, when taken with the fact of what -- he said -- you talked about airline stocks. He was out of them for the time

being.

Everybody watches Buffettt extremely closely. What has he said about where he is going?

SEBASTIAN: Not a huge amount, Richard. He's been sort of cautious when it comes to the pandemic. He said the world has changed. Interesting, I was

comparing what he said in the last few months with what he said in a well- known op-ed back in 2008, because you'll remember in the financial crisis, he went in hard into American stocks.

He wrote this op-ed saying, "Buy American, I am." He said he was putting all of his personal money into American stocks. He said at the time, "Most

major companies will be setting new profit records five, ten, and 20 years from now."

Now, fast forward to February of this year when the coronavirus pandemic was really just starting, we didn't really know the full scale of it, and

he said, "Real question is where these businesses are going to be five, ten and 20 years from now. Some will do sensationally, some will disappear."

So, I think you can say that his thinking has changed not just because of the pandemic, but because if you look at the last ten years and the record

bull run that we've seen, perhaps he felt that was unsustainable so he is being a little more cautious about where to invest.

QUEST: Clare Sebastian. Clare with Warren Buffett, thank you. Now, to the coronavirus cases in the United States, where we saw 11,700, a record

number of cases in California. Similarly, Florida has also had a huge number, the total number there now surpassing 200,000.

Rosa Flores is in Miami Beach. Where do we stand after the long holiday weekend? Just bring me up to date. Are the number of cases in the last 24

hours or so -- where are they?

ROSA FLORES, CNN CORRESPONDENT: You know, the numbers continue to grow. Just this weekend, Florida busted its daily record with more than 11,400

cases, Richard.

About a month ago, we were doing live shots talking about how experts were so worried because there were more than 1,000 cases a day or more than

2,000, and here we are, a month later and there are more than 11,400 cases in just one day this past weekend.

Look, we've been looking at the numbers in Miami-Dade County where I am, which is the epicenter of this crisis in the State of Florida. When you

look at the positivity rate, it is 26 percent, according to county data which was released yesterday.

The goal for the county is to have a daily positivity rate of no more than 10 percent. They've busted that for more than 14 days straight. That's why

so many local leaders are very concerned.

When you look at the hospitalizations, for example, the State of Florida only releases the number of hospital beds available in the state. That's 26

percent. But they don't release the number of COVID-19 patients that are hospitalized currently.

That does not stop local leaders from releasing that data. In Miami-Dade, where I am, they are releasing that data and it's staggering, because when

you look at those numbers, it really gives you an idea of how this infection is spreading and progressing.

If you look at hospitalizations yesterday, they were about 1,500 people in hospitals here where I am with COVID-19. On June 23rd, there was about 800

people in hospitals with COVID-19. That's an 88 percent increase in hospital beds.

If you look at ICU beds, there's an increase of 114 percent. If you look at the number of ventilators that are being used during that same time period,

the increase is 119 percent.

Richard, that is why these local leaders are so concerned, and the Mayor of the city where I'm standing right now called out President Trump this

weekend, saying that there are too many mixed messages sent from the Federal, state and local levels, because the local levels are really

focusing on the wearing of masks, the social distancing.

The mayor here, Dan Gelber, said over the weekend when the President doesn't wear a mask and he has rallies and large gatherings that do not

mandate masks, that sends the wrong message -- Richard.

QUEST: Rosa Flores, thank you. In a moment on FIRST MOVE, a sparkling debut for an insurance company with a slight difference. It is called Lemonade.

We'll talk to the CEO of that.

And Hong Kong denies bail to the first person charged under its new security law. Obviously, these are developments, leading activists to flee

the country. We speak to one of those activists in just a moment.

It's FIRST MOVE. Julia is off today.

(COMMERCIAL BREAK)

[09:16:25]

QUEST: Welcome back to FIRST MOVE. These are the stories and the headlines making news around the world.

India has surpassed Russia in overall coronavirus cases. On Monday, the Health Minister reported more than 24,000 new infections in a 24-hour

period. It means nearly 700,000 people in India have been diagnosed with COVID-19. Only the U.S. and Brazil have recorded more cases.

A group of more than 200 scientists is set to release an open letter to the global health officials, they say the role that airborne transmission plays

in the spread isn't talked about enough. Health officials need to do a beter job alerting the public.

CNN's senior medical correspondent, Elizabeth Cohen joins me now. I was reading a little bit about this over the weekend. The W.H.O. will not say

yet, because they don't believe there's scientific evidence that proves general transmission by air from little droplets, as opposed to sort of

being close to somebody with large droplets, correct?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Well, it's a really scary word. Everyone tries to sort of think very, very seriously before

they use the A word, the airborne word.

Let me talk a little bit about what the difference is. Obviously, we know that COVID spreads person-to-person and you don't have to be in contact

with that person, you don't have to kiss them in order to get it. So therefore it does to some extent spread through the air.

The word airborne though has a bit of a different connotation. So what you see authorities emphasizing now is that it spreads through sneezes or

coughs. In other words, you need to be near someone who is actively sneezing or coughing and propelling it through the air.

What these scientists and others are saying is wait a minute, it's more than that. It can just be in droplets when you're talking. It can just

spread through droplets when you're breathing. You don't need the sneezes or coughs. Of course that can - it can spread that way, but you don't

necessarily need that. It might just be breathing and talking.

This is not a secret, Richard, as a matter of fact, the National Academy of Sciences in the U.S. wrote a letter to the White House more than two --

three months ago actually saying just that, it can spread through breathing and talking.

So this has been known, but health authorities and certainly President Trump, you don't see them emphasizing it because it is much scarier to

think that all you need to do is be in the vicinity of someone who is breathing it and that those droplets can hang in the air -- Richard.

QUEST: This obviously is -- I mean, the reality will be much different if it can be transmitted through much easier airborne transmission, but also,

Elizabeth, we're now starting to read that the idea of it being transmitted on surfaces, whilst being a technical possibility; in reality, it's not the

way people have been getting it.

COHEN: Right. That is certainly what experts have been telling me, is that can it happen through a surface? Absolutely. Is that the main way that

people are getting it? Absolutely not.

And so, it sort of depends. If someone who is infected, you know, scratches their nose, puts their hand on a table and you come by right afterwards,

touch that exact spot and then you touch your nose, sure, that might do it.

But probably it's much more indirect usually. So is it possible? Yes. Is it the driver of this outbreak? Probably not.

QUEST: Elizabeth Cohen, excellent. Thank you. I appreciate it.

Now, New York City, where of course I am, is entering Phase 3 of reopening. One point though to note about the New York Phase 3, they will not be

allowing in-door seating at restaurants.

[09:20:10]

QUEST: The net effect of that by the way is that the entire Manhattan now starting to look like sort of a Paris wannabe with street cafes bursting

out into the road, into the bus lanes.

Businesses are offering personal care can resume most of their services. One key aspect that Phase 3 that's been delayed, in-door dining. One of the

ways of rethinking, Sweetgreen, a chain of solid restaurants that's had to furlough nearly 2,000 workers. Sweetgreen originally received $10 million

from the Paycheck Protection Program. Now, it returned the money. Instead, it got investment by other means and it's now bringing about three-quarters

of the people who were furloughed.

Jonathan Neman is the CEO of Sweetgreen. He joins me now. Good to see you, Jonathan. Kind of you to join us.

JONATHAN NEMAN, CEO, SWEETGREEN: Thank you.

QUEST: I think one of the most important things is that you have been able to bring back more than 75 percent of your furloughed team workers as the

economy opens up, but you're still a long way from a normal business.

NEMAN: That's right. Our business is not fully back to pre-COVID levels, but we've seen huge increases over the past three months really from a low

in April.

I credit it mostly to the pivoting of the business. We've been able to change our operations into a digital-only model offering pickup and

delivery all through our own mobile app and we've been able to capture a lot of the lost sales that we had.

Of course, as you mentioned, New York City is the hardest hit where we happen to have a lot of restaurants. But overall, not only did we pivot our

operations to digital only, but also introduced a new menu category of hot plates, which has allowed us to meet customers and offer an option to eat

dinner and more homey food in this time.

QUEST: The difficulty is, I mean, I was out and about this weekend in the city, in New York, you know, street dining is fine. The number of tables

available, even with the increased number because of bus lanes and things, is still lower than there would have been.

If you add it all up, can you make up the difference between extra tables, street dining, versus what you had before on -- take-away versus what you

had before? Can you get it even approaching the same sort of numbers?

NEMAN: I think for most restaurants the answer is no. For most restaurants, they depend on their in-door dining to make it. For us, so much of our

business is already take-away and delivery, that we've been able to make it work with those increases.

However, there's certain places where it's tough. We've made the decision due to the resurgence in cases to shut down in-door dining across the

country, and I don't see us opening that up for a while.

We have introduced curbside in certain places. Like I said, our pickup and delivery all on our own app is really what's driving it, and then where

possible, we have some outdoor dining, where possible and where safe.

But what's challenging is not only the safety of our customers, but the safety of our team members and how they feel about coming to work. So we're

very intentional about trying to create a safe space for them.

QUEST: Do you feel a bit aggrieved -- a bit peeved that there was over $160 billion that was left in the PPP money that had to be extended. Now, you

gave your money back and apparently you can't now apply again because it's considered to have been a loan that was repaid and you only get it once. Do

you think now, in hindsight, you should have been allowed to keep it?

NEMAN: You know, I don't, because I still believe that there's good uses for those funds, especially as we see the resurgence in cases. We're

fortunate to have access to capital and have a healthy balance sheet in order to weather this storm and would love for that money to go to

businesses which may not have that same opportunity.

So, I hope it goes to good use. I hope it goes in the spirit of what it was created for, to protect jobs, not to bolster our businesses, and I really

hope that it goes towards those efforts.

QUEST: Jonathan, finally, you talk about your new menu, more homely food, the sort of feel-good foods. What sort of things have you got on the menu

that you think this is a food for our times?

NEMAN: So at Sweetgreen, our food ethos is all about serving local, fresh, delicious, mostly organic food, delivered straight to you.

And so the idea was to maintain that same sort of ethos of fresh, healthy, real food, but expand it beyond the bowl, which is mostly we were serving

salads, into more of a dinner plate style concept.

[09:25:28]

NEMAN: So imagine getting a plate with a half roasted chicken, some wild rice or cauliflower rice and some roasted vegetables with a nice some sort

of sauce to it.

We have a selection of plates and you can make your own. It's the type of food you would want to cook at home if you were trying to eat a delicious

and healthy meal with ingredients straight from the farmer's market.

QUEST: Excellent. It's half past 9:00 in New York. I'm hungry already. That's what I am having. Thank you, Jonathan. Good to see you.

NEMAN: Great to see you.

QUEST: I've got the app somewhere. Probably knowing the speed of these things, I'll probably get it before we are off air. Thank you, sir. I

appreciate it.

Now, when we come back in just a moment, the market opens. We will obviously show you where we're standing on that. First of all, it is FIRST

MOVE. I'm Richard Quest sitting in for Julia.

(COMMERCIAL BREAK)

QUEST: And a very good day after a long holiday weekend, the market is just seconds away from getting underway and back into business.

U.S. stocks begin trading after the long holiday weekend, expecting a positive week for stocks. It's a case of risk on across the world. Global

stocks are at a four-week high on hopes of a strong economic rebound. Uber shares are rallying, having bought the delivery firm Postmates. Pause for

the bell.

[09:30:07]

QUEST: It is 9:30 on the East Coast of the United States. Where was I?

Uber shares rallying after buying the food delivery firm, Postmates. Remember, they lost out on Grubhub amid antitrust concerns. So instead they

decided to go for Postmates. It is a $2.5 billion deal and the market likes it. It's up eight percent, the best part of.

Now, the insurance startup, Lemonade has logged one of 2020's best IPOs in history. The company's valued more than double to nearly $4 billion after

its surge, 140 percent on its first day of trading.

Lemonade uses artificial intelligence, flat fees to give its mainly millennial customers fast, fuss free insurance at home or home insurance.

The IPO is a much needed win for Softbank which owns 22 percent stake.

Joining me now, Lemonade CEO and co-founder, Dan Schreiber. Dan, good to have you with us. Dan, I am just going to get the first one straight out of

the way. Whenever we have an IPO that goes up by -- you end up 140 percent. It begs the question that your brokers and your advisers and your

investment bankers mispriced and you left good money behind.

DANIEL SCHREIBER, CEO AND CO-FOUNDER, LEMONADE: Good morning. Could be. Time will tell. I think the state council of Benjamin Graham, in the short

term the stock markets are voting machines rather than weighing machines as they are in the long term kind of rings true here as well.

We've been trading for less than one day, so I don't think I would read too much into what happens to a stock in just a matter of hours. This is an

early IPO for a young company with many years, hopefully decades of growth ahead of it. We're going to need the perspective of years in order to

really answer that question more fully.

QUEST: Now, Dan, I don't know whether I am your typical potential customer. I'm a long way from being millennial by any stretch of definition. But I

did get a quote from Lemonade this morning from my living room in my home here in New York.

I went online and I got a quote and it is lower than my existing insurance. Of course, I've got to read the small print to see if the coverage is all

the same. But am I the sort of person you're after who has got one or two more complicated aspects to insurance, or from you -- from what I look

online, you seem to want renters, quick and easy, high volume?

SCHREIBER: Richard, we would absolutely love to have you as a customer and it looks like you can save some money by switching to Lemonade, so please

do.

Lemonade tries to bring together three things, a seamless user experience. Hopefully, you had fun with the whole purchasing. It takes about 90

seconds. The median time to get a quote from Lemonade is 90 seconds. It takes twice as long to get a Starbucks coffee.

So we're talking about a seamless experience. Aligned values, underwriting profits often go to nonprofits or a public benefit corporation and

everybody wants to work with companies with whom they have aligned values and an instant experience.

So not only is purchasing quick, but we pay claims in as little as three seconds. I think that cocktail of value, values, and experience appeal to

people of all ages. Certainly, it skews younger because who grew up on --

QUEST: But, Dan --

SCHREIBER: Yes.

QUEST: Dan, there's two aspects on that. First of all, the social aspect. I want to go towards that. Great that you do all that social aspect and

retained -- money is put in, and claims that are not -- all of that is excellent.

But when you have social values as part of your core as most companies do, you have to choose which social values you're going to follow. And at the

moment, that is not easy when there can be disagreements, things like, for example, freedom of choice on say for example, on abortion rights. Where

are you going to draw the line when it comes to your social values?

SCHREIBER: That's a great question and we do offer a wide array of charities that customers choose for their give-back. But we've also taken

stances that some might consider controversial.

So for example, after the massacre in Las Vegas, we decided to put a limit on how many guns we would ensure and entirely to exclude assault rifles and

we also are the only insurance company in America who say we won't invest in coal or polluting industries.

We don't need to appeal to everybody. We want people who feel aligned with Lemonade to really feel passionate about it.

QUEST: And I should know the answer to this. The name Lemonade. Remind me. I've seen it before, but remind me again for those that aren't familiar.

SCHREIBER: So, it's not a three-letter acronym and it doesn't have the word state or farm in it as most insurance companies in America seem to.

So A, it just sticks out. But really, it's about when life gives you lemons, make lemonade, and that's really what insurance is about. Bad

things happen, use Lemonade to make them sweet.

[09:35:28]

QUEST: And I've got a lovely jar of lemonade in the fridge, which I shall be having a swill of after the break. Thank you, Dan. Good to see you. And

you might even get my business -- might -- I'll be cavalier. I'm not promoting anything. Thank you very much.

We've talked a lot about what's happening with aviation. The pandemic has wreaked havoc. Every continent, every airline. Arguably, the U.S. hasn't

done too bad in the sense that it's had lots of government support. Same in Europe.

But in Latin America, it's a very different story. A lack of government support, coupled with vanishing bouts of business has led airlines into

bankruptcy.

Stefano Pozzebon reports.

(BEGIN VIDEOTAPE)

STEFANO POZZEBON, REPORTER (voice over): Leeslie Barragan is folding her uniform for the last time. Like hundreds of other Colombian workers in the

flight industry, she lost her job because of COVID-19.

(BEGIN VIDEO CLIP)

LEESLIE BARRAGAN, FORMER FLIGHT ASSISTANT (through translator): It has been my whole life's dream to be a flight attendant for Avianca. And now, I have

to say goodbye to that dream, not because I didn't do my job, but because of coronavirus.

(END VIDEO CLIP)

POZZEBON (voice over): The future is frightening for the single mother and her family who are moving because they can no longer afford their flat.

Leeslie's story is not unique. Across Latin America, businesses are scaling down as the International Monetary Fund predicts this pandemic will trigger

the harshest economic recession in decades.

Airlines in particular are taking a hit as people stopped traveling for work and for pleasure.

LATAM, Avianca and AeroMexico, three of Latin America's major carriers having filed for bankruptcy since May. Normally, one of the biggest hubs in

the region, Bogota's airport is all but closed.

This vending machine used to sell snacks, it has now been reequipped to sell face masks, but there is nobody here to buy them

POZZEBON (on camera): You can almost feel an eerie atmosphere walking around these halls that are now complete empty. This airport is working

hard to provide increased safety measures for when the flights will finally resume.

POZZEBON (voice over): The International Air Transport Association thinks the air industry won't recover until 2023. So the impact on jobs like

Leeslie's could be long standing.

(BEGIN VIDEO CLIP)

BARRAGAN (through translator): Both my mother and my daughter depend on me. Mine was our only salary. We have no other income and we have to pay rent,

food and school fees now.

(END VIDEO CLIP)

POZZEBON (voice over): In a statement to CNN, Avianca said, dismissals like Leeslie's case, "reflect that post-COVID operations will be much more

reduced once we will be allowed to fly again."

With limited road infrastructure, traveling by air is often the only way of connecting cities and businesses. To avoid further layoffs, some workers

are coming up with preventive solutions.

The Colombian Pilots Union say they have proposed a voluntary pay cut across the board as long as Avianca doesn't release a single pilot in the

next two years.

(BEGIN VIDEO CLIP)

CAPT. JULIA PINZON, AVIANCA PILOT (through translator): Our proposal is simple, don't fire anyone. We supplement our own wages and when you'll need

pilots, they are already part of the company and trained.

(END VIDEO CLIP)

POZZEBON (voice over): While Captain Pinzon waits for Avianca's response to the offer, he and thousands of other flight crew members are flying blind,

searching for hope on the horizon.

Stefano Pozzebon, CNN, Bogota.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

[09:41:47]

QUEST: The first person to be charged under Hong Kong's new security law imposed by Beijing has been denied bail at a court hearing earlier today.

CNN's Anna Coren has the details.

(BEGIN VIDEOTAPE)

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: The first person to be charged under Hong Kong's new sweeping National Security Law that came into effect

less than a week ago creating a climate of fear and uncertainty in this city, has been denied bail and will remain behind bars.

The 23-year-old Ying-kit Tong who appeared here in West Kowloon Magistrate's Court arrived in a wheelchair after he rode a motorbike

through the streets of the city on the 1st of July, holding a flag with the slogan, "Liberate Hong Kong: A Revolution Of Our Time." Shortly after, he

crashed into police, injuring himself and three police officers.

The prosecution said that because the crowds were cheering as he drove past, holding the now illegal flag, he was inciting secession. He is also

being charged with terrorist activities because of injuring police.

Nine other people were also arrested that day under the National Security Law, but were all released on bail. A total of 370 people were arrested on

the 1st of July, mostly for unlawful assembly.

When I spoke to Tong's lawyer, Laurence Lau after the court appearance, he said that his client was in good spirits both mentally and physically. But

due to the highly sensitive nature of this National Security Law to ban sedition, subversion, terrorism and colluding with foreign forces, he would

not divulge any information about the case, instead saying, quote, "These are challenging times for Hong Kong. The city is facing its darkest hour."

With China now firmly in control by implementing this new National Security Law, there are grave fears as to what this will mean for the city's

freedoms, especially the freedom of speech, the freedom of the press and freedom of assembly.

Over the weekend, books by pro-democracy activists were removed from public libraries, including one from high-profile activist, Joshua Wong.

The 23-year-old who quit his party, Demosisto, which then disbanded a day before the National Security Law was implemented, appeared in a different

court today on three charges for organizing and inciting protests last year, wearing a black t-shirt that read "They Can't Kill Us All" he pleaded

not guilty to the charges.

Anna Coren, CNN, Hong Kong.

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QUEST: Nathan Law is the former Hong Kong legislator. He is the Founding Chair of Demosisto and joins me now. So, the first cases are moving

forward, and to the extent that this new law has had its desired effect of squashing dissent and protests, it would seem at the beginning, at least,

to be working, however unpleasant that might be for you to have to recognize.

[09:45:10]

NATHAN LAW, FOUNDING CHAIR, DEMOSISTO: Well, you see how Hong Kong people respond, you can still see a little hope out of it.

Of course, this law is so draconian that you basically squash the freedom of expression of Hong Kong people. But people here will see. We are seeing

more than 100,000 people marching down through the street on the 1st of July and subsequently, more and more people protesting online.

So I could see that Hong Kong resistance movement has the tenacity and perseverance inside it.

QUEST: What do you see now as your role? What do you believe you can now -- in terms of leading a movement that opposes the law, how do you move

forward? And what is your role?

LAW: International support has always been a crucial factor for Hong Kong's democratic movement. Under the National Security Law, all the international

efforts we have worked -- we have been doing could be considered as a bridge of the law and to be framed or predicated as colluding with foreign

forces.

So for me, coming to the international stage, I can continue my work international advocacy work without these restrictions.

QUEST: You know, the very nature of this law and its extra territorial aspect means that my questions have to be exceptionally carefully thought

through in the sense that I don't commit an offense, and also that I don't lead you in doing so to commit an offense in your answers.

The mere fact we're both having to do this dance with this law shows it's difficulty and extremity.

LAW: Yes, definitely. There has been wide terror and politics fear imposed in Hong Kong with how draconian and how disruptive this law is to Hong

Kong's freedom.

QUEST: The problem is that large businesses have signed on. The major banks, even without knowing what the law said, said they supported it. And

there is a sector of belief that as long as the major employers sign onto this -- HSBC, Standard Chartered, Cathay Pacific -- as long as they sign on

to this law, you're very much on the back foot.

LAW: Well, it's a disgrace to see big companies like those you named kowtow to Beijing. They are basically a bunch of salesmen, selling products they

haven't seen it. This is the problem, Beijing wants everyone to stand in line with them without knowing what they will face, and that's disgraceful.

QUEST: Nathan, there is an argument which is not easy to put to you, but that the protesters brought the house down around their heads. The protests

were so long and in some cases so violent, and in many cases lost the support of people in Hong Kong that Beijing acted and now it's a case of

you are back to square one. In fact, beyond that. You're not even on the board of game.

LAW: Well, the movement, according to the latest data, is still enjoying major support in society. And if you look at the demands of the people,

these are all very humble. These are the demands that Beijing should have given Hong Kong people for long -- democracy and freedom and autonomy and

that's it.

The root cause of that is definitely the autocratic nature of the regime which people are resisting.

QUEST: Nathan Law, thank you. Appreciate it.

LAW: Thank you so much.

QUEST: In a moment, the U.K. opened over the weekend. It was a case of lively scenes in SoHo. After the break.

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[09:51:32]

QUEST: The U.K. government has announced more financial support for cultural organizations amounting to some today's $2 billion. Now, many

remain closed, perhaps they are -- the only things that aren't had large big reopening in England over the weekend. England, not Scotland or Wales.

Pubs, restaurants and cinemas welcomed people indoors for the first time in months and there were scenes of large numbers of people in London's

fashionable SoHo.

You can see the Plexiglas being used by pubs to keep staff safe. Anna Stewart is in London. Anna, I know that the rest of the country wasn't

quite as gregarious in terms of its opening, but there were some wild scenes in SoHo.

ANNA STEWART, CNN REPORTER: There really were. I was actually reporting on the pubs' reopening here in England on Saturday and for the large part,

people in England behaved fairly responsibly as they celebrated the end of lockdown, but that was not the case in a very small part of SoHo in Central

London.

Actually, really speaking to people there today, only around three streets, but it felt like a street party or a festival. Very quiet inside

restaurants and pubs, though, along the very road, because you have limited seating.

All the safety precautions are now in place at these restaurants and these bars, but the streets were crowded. People weren't wearing facial

coverings. Huge queues outside one of the bars until they were told to close by the police early to try and limit how much people were drinking

and that is thought to be what really fueled the night.

Too much alcohol, too much excitement, hopefully really a one-off as people just over celebrated and overdid it and forgot about social distancing

measures on day one.

Hopefully that's the last we'll see of that -- Richard.

QUEST: Right, but the reopening is now under way. What is the next stage?

STEWART: Well, I was just talking about this arts package, Richard, which is very interesting because while much of England has reopened, here in the

west end you can see the pubs behind me, the doors are shut and the curtains are still down and they will be for some time to come. No date yet

as to how some of these businesses can reopen.

So the U.K. government has announced an aid package of nearly $2 billion. The vast majority of which will be grants to these businesses to keep them

afloat for the months to come. Many don't expect to reopen until next year.

And theatres actually like this one had a play, "Les Miserables" have already started looking at redundancies. Perhaps this package has come in

the nick of time, perhaps, they can pause the process. But very worrying, it does put a precedent, though, doesn't it?

A huge aid package for this industry. What about aviation? What about even hospitality, which can reopen, but may really struggle to make money in the

months to come -- Richard.

QUEST: Right, but Ana, what about on that idea? I mean, the U.K. is now open for tourism. There's about 14 -- it's quite a smaller number of

countries, never mind the 75 on the list. Actually, those number of countries that you can come from where there is reciprocity is really

basically Europe and the E.U.

When do we expect to know if it's working?

STEWART: Oh, that will be very interesting to see whether we are actually going to get tourists in. Many people think that we've actually really

missed the boat. The government really has missed the boat in terms of easing up on the blanket quarantine.

It's already July and the summer season is such a big one for the U.K. and there is a degree of confusion, particularly for Brits wanting to travel

abroad, where can they travel to?

[09:55:05]

STEWART: This big list that was unveiled where you could go to, supposedly, but not have to quarantine when you return, some of those countries like

Australia and New Zealand don't frankly want the Brits just yet. There are lots of restrictions in place.

So, yes, lots of confusion here. Hopefully, we will get tourism back, but I suspect not immediately.

QUEST: Thank you, Anna. Finally to the arts and the Mona Lisa. After four months of shutdown, she is back. The Mona Lisa returns proudly back on

display, gazed on by the socially distanced visitors.

One does wonder what the Mona Lisa has been doing during the lockdown and what she's been thinking as she's been there. But there she is now, back.

We can all be assured she was doing the right thing all along, as you can see from the various memes and articles -- behind a mask.

That's it. That's FIRST MOVE for today. I'm Richard Quest. Julia will be back bringing peace, calm and sanity to all she surveys.

I will have "QUEST MEANS BUSINESS" at three o'clock Eastern. It is eight and nine in Europe. And so, whatever you're up to between now and then, I

hope it's profitable.

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[10:00:00]

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