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First Move with Julia Chatterley

Another 1.3 Million U.S. Workers Filing For Unemployment; In China, Positive Data Pushes The Market Even Higher; Hong Kong Tackling A New Coronavirus Outbreak. Aired 9-10a ET

Aired July 09, 2020 - 09:00   ET

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

[09:00:09]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Live from New York, I'm Richard Quest, sitting in for Julia Chatterley. This is FIRST

MOVE, and here is your need-to-know.

There's little sign of recovery if you look at the job numbers, another 1.3 million U.S. workers filing for unemployment, still well over a million.

In China, a different story, the rally continues. A positive data which is pushing the market even higher. We need to understand exactly what's behind

all of that.

And Hong Kong is tackling a new coronavirus outbreak. Is it a second wave? Is it a third wave? It doesn't really matter. The numbers are going up and

that's something we'll be talking about in this hour.

It is Thursday. Now, let's make a move.

A very good morning to you, good afternoon or good evening, depending where in the world you're joining us. Welcome to FIRST MOVE. Julia is out today.

I'm Richard Quest.

We have, of course, it being a Thursday, fresh U.S. economic numbers on the jobless front that show -- we'll talk about it in detail in a moment. But

those jobless numbers are giving the market the impetus and giving the market the direction as we get under way -- 1.3 million new jobless claims.

It's less than expected, however you've got to put it in the totality, the aggregate.

Nearly 50 million Americans have now sought assistance since mid-March. A number of people still collecting benefits remains elevated -- highly

elevated. That's the so-called continuing claims number. It is down slightly, but it's still 18.1 million. So people are coming back off the

rolls, but some are still staying there longer.

U.S. futures are higher. The tech rally remains the big story. The NASDAQ - - this is extraordinary. The NASDAQ is set to rise to new records, up more than 16 percent year-to-date.

And Europe is mostly higher. Germany the big gainer with the data showing German exports on the rise. Not surprisingly, you take into account what

happened in March, April, but May things are starting to improve again and that's why you're seeing exports on the rise looking at the numbers.

Paris, the XETRA Dax is the best of the session. And the software giant, SAP, rising more than five percent on second quarter results. Business has

snapped back faster than expected, says SAP.

A look at Asia across the board. The Chinese market rose for an eighth straight session. We'll interpret that for you, the reasons why. And if you

look at the difference, the others are going up, the KOSPI and the Hang Seng by a third or a half, but it is one and a third percent for the

Shanghai Composite.

Gold is off just a tad, still above $1,800.00 an ounce, and those are the numbers, we need to get to the drivers.

Christine Romans is with me. I don't know what to make of this particular number. It's still over a million, so it's elevated. It's clearly a trend

in the right direction, but it doesn't fully account for those states that re-imposed lockdowns. So, what do we make of this number?

CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: You know, this number, another week, 16 weeks above a million people filing for the

first time for unemployment benefits -- just that alone shows you we are in the middle of an ugly recession. A lot of people are out of work. The

economist, Chris Rupkey put out a note this morning, don't lose your job, it's bad out there.

He said these numbers really do reinforce the need for more stimulus in this economy when you get over the benefits cliff at the end of September

when a lot of the initial stimulus will run out.

In aggregate, you're right, almost 50 million people have filed for the first time for unemployment benefits since this crisis began 16 weeks ago.

That's 30.6 percent of the pre-pandemic labor market.

Think of that. A third of the people who were working in the beginning of March at some point have now filed for unemployment benefits. It just shows

you the crushing blow of the pandemic on the labor market.

And what's fascinating is it felt like there was hiring. We saw that in the monthly numbers. We saw 4.8 million jobs hired back. Great news. But that

was before these states started rolling back their reopenings because of a resurgence of the virus.

[09:05:05]

QUEST: So, Christine, the thing I want to point out, of course is United Airlines overnight, the letter to employees warning about 36,000 potential

furloughed as a result after the CARES Act comes to an end at the beginning of October.

Now, whatever the reasons why they are doing it, it shows that, firstly, there is another shoe to drop, and secondly, the uncertainty is so great. I

don't know whether we can make any good predictions.

ROMANS: I think you're right. I mean, I think the only prediction that holds is that these airlines are going to be smaller on the other side of

this. They're not going to have the footprint that they had before.

By law, the company has to give employees 60 days announcing these layoffs or furloughs, so there you go. You've got that, again, that benefits cliff

that we're talking about coming undone, the CARES Act financing winding down, and these airlines are trying to figure out what they're going to

look like, detailing their plans for what they're going to look like going forward.

American Airlines previously had said about 20,000 jobs, but these are frontline jobs. These are the people that we do business with as business

travelers and leisure travelers, right? And we're not doing much business and leisure traveling these days. And I don't know when that's going to

come back.

QUEST: Okay, now, we've sort of speculated what the unemployment rate might be on Election Day. We thought it was going down, bearing in mind the

last numbers on unemployment, eight to nine percent, but I'm wondering if it does hit 10 percent, if it stays up at 10 percent or does it drop back

down to seven percent or eight percent by Election Day in November?

ROMANS: And is there a big difference between eight percent and 10 percent at this point? You have so many people out of work, right, so many people

are trying to find their footing back in this now -- still in the middle of a pandemic economy. That is a tough position to be in.

I always learned sort of back of the envelope math that 10 percent unemployment is when the social fabric of a civilization starts to come

unglued, right, that you want to have an unemployment rate below 10 percent or bad things start happening. And it's incredibly imperative that we get

the job situation worked out.

One of the interesting things about Joe Biden who is running for President, of course, is releasing today his economic strategy and plan and his first

step is get the pandemic under control before you can get the job situation under control.

So a very pandemic-focused economic plan from them.

QUEST: And that, I think, we are out of time, but that of course shows the difference between Biden and the President. Look, there's so much we could

talk about and we'll do it more tomorrow, hopefully when we have Joe Biden's plans. Thank you, Christine Romans, with us this morning.

ROMANS: Thank you to you.

QUEST: China's inflation numbers are out and it's pushed the stock market higher. Unusually, of course, you're hoping to see inflation at the moment.

You don't want the risk of deflation.

Well, now the CPI picked up 2.5 percent from a year ago. The Shanghai market rallied for eight straight days. John Defterios, our emerging market

editor.

John, let's put aside the fact we know that there's an element of manipulation in China's market at the moment that's driven this. The

resurgence of inflation, I never thought we would say it, but it's good news.

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, in this instance it is, Richard, because it's almost Goldilocks inflation. It is

not too hot, not too cold. Right? You want a little bit of inflation to reignite the economy and that's what we're seeing there.

At the same time there's almost an interesting narrative coming forward between the U.S. and China, who has the duel here, who is going to win the

duel of the best performing market? In Asia by far, it is Shanghai. It is on fire, eight days in a row.

But if you look at the year-to-date chart, most of that has been coming here at the end of June and July, up 17 percent over the month and most of

those gains coming in this week alone, better than half of them.

But there's a couple of drivers here, Richard. You talked about the inflation. The economy is on the mend. We had two PMI reports, one from

services and one from manufacturing, and they were up in June. So this is good news for Xi Jinping.

But at the same time, you're talking about manipulation. You had a state equities journal suggesting this is a normal bull run. That's extremely

odd, and then went on to say, and I thought this was an interesting twist, it even helps diplomatically China on the world scene.

And sure enough, today, the Foreign Minister held a press conference, Wang Yi saying that the U.S. needs to change its narrative right now. It's too

negative on its policy, and at the same time U.S.-China relations haven't been this poor for four decades since the reopening of China into the

social capitalist market that they have today.

So you know the challenges. Hong Kong with the security law, Huawei, ZTE, the telecom maker, TikTok right now and the hard line by the Trump White

House, and they're almost playing the victim right now and I'm surprised so far, Richard, it's not spilling into the Shanghai market or on Wall Street

as well with NASDAQ posting that record yesterday.

[09:10:11]

QUEST: NASDAQ set a record and it looks like it will hit another today, and that's just perverse. I mean, it may be justified in terms of the way

the investors see it, but when you've got the other alternatives of seeing the unemployment numbers that we're seeing, it's just weird, somewhat

unseemly.

China, where we're not even sure what the numbers really are, I don't know, John, how far we can take that Shanghai record or that Shanghai number to

the bank.

DEFTERIOS: Well, you know, this is another context, if you have one percent to two percent growth and the rest of the world is not expanding

and actually in a deep recession of anywhere from three percent to six percent this year, they're justifying the rally in itself and it's

definitely being juiced on here by the government.

But let's go back to 2014 and 2015, Richard. This could end very badly. The last time we heard this language coming from Beijing and the financial

center, Shanghai, saying like this is normal. Go into the stock market. Margin loans are available. We had a market double in a year between that

period of time and, bang, just that bubble blew up in China.

They're trying to talk that away right now. But it's starting to feel a lot like 2014 and 2015.

QUEST: John Defterios with China. Thank you, John.

Now, Hong Kong, let's stay in the region. Hong Kong is on high alert, whether we call it a second or a third wave, doesn't really matter. The

number of coronavirus cases has risen sharply and it continues to do so. Dozens of new cases since Sunday. CNN's Will Ripley is in Hong Kong. Now,

what happened? What changed, Will?

Hong Kong had been doing so well, so what went wrong?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Arguably it's still doing well, Richard, if you think about the fact it's a densely populated city of

seven million people with just 1,300 and change coronavirus cases, more than 1,200 of them fully recovered and just seven deaths.

But yes, the trend is troubling in the last few days, because as you mentioned, there have been dozens of new cases and, more troubling, they're

not coming in from people traveling from other countries. These are local transmission cases and that's very troubling, because a lot of them,

they're finding they can't do contact tracing. They can't figure out where people are catching the virus from.

Why is that dangerous? That's how it starts spreading and the small numbers can turn big quickly. We are waiting to get some guidance and clarity from

the Hong Kong government as to what steps they plan to take to combat this, because local transmission is far more tricky when you have people

intermingling.

Yes, everyone here in Hong Kong pretty much wears a mask when they go outside, but people are still going to dinner, they're going to the gym,

they're going to a number of different things that are being allowed under these new relaxed restrictions here in Hong Kong that allow for a more

normal sense of life, but could also turn the city into a breeding ground for the virus.

So will they go back to a lockdown scenario like we saw earlier this year? This is reality of life in the pandemic, Richard. You can be given back

these freedoms and then just as easily, they can be taken away, at least in countries and places like this territory that have taken coronavirus very

seriously from the get-go.

QUEST: Yes, now, Will, this testing regime that's in place. Testing on arrival, I know you've actually been through it. But some of the airlines,

United Airlines is postponing returning to Hong Kong because its crew would have to be tested upon arrival. So, what's the problem here?

RIPLEY: Well, this is new, requiring COVID-19 testing for flight crew is one response to this spike in cases that they're seeing here in Hong Kong,

because most people who come in, including myself when I came back from Japan, you have to get tested right at the airport. Then you wait at an

airport or government hotel near the airport, sometimes overnight, for your results to come back.

Then they give you one of these. It's an electronic wrist band. You have to wear it and stay inside your home for 14 days. And apparently, if you do

leave your home, I didn't risk it because this thing would go off supposedly and the police could show up at your door.

Flight crew, diplomats, certain others have been exempt from those rules, now, they're still getting tested at the airport. Because their jobs

require them to travel in and out, they're still allowed to go into the city, go about their normal lives unchecked, and some are wondering if that

is one of the reasons that you're seeing more coronavirus cases here, if there is some lax testing or some loopholes in this.

You know, Hong Kong is considered a hermetically sealed system, shutting off the borders with Mainland China, restricting all travel except for Hong

Kong residents, and requiring this 14-day quarantine.

So we really just have to wait and see what the Hong Kong government decides are the next steps, given that they now do believe there are some

clusters of community spread. Another area of concern, senior centers. There are a lot of people who got sick at senior centers. They're asking,

why aren't more staff members at these retirement homes being tested as well? Like half of the staff instead of just two or three, which is what

they're doing right now.

[09:15:16]

QUEST: Will Ripley who is in Hong Kong. Twelve hours ahead of me there. Will, thank you.

Now, other stories making news around the world to bring to your attention.

President Trump is demanding that schools reopen next month. Now, he blasted his own C.D.C. -- Centers for Disease Control. The guidelines that

are in place for schools. He is calling for measures very tough or he is calling the C.D.C. measures very tough and expensive.

Joe Johns now reports on exactly what the President would prefer.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT (voice over): President Trump's push to reopen schools is going against the advice of some of his

own top health officials and as coronavirus cases surge in at least 33 states.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We're finding out that learning by computer is not as good as learning in the classroom.

We want to learn in the classroom, so our schools -- we want them open in the fall.

(END VIDEO CLIP)

JOHNS (voice over): The President complained about the C.D.C.'s guidance on a safe return to in-person learning this fall in a tweet, writing,

"They're very tough and expensive, and they're asking schools to do very impractical things."

Hours later, the Vice President made this announcement.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The President said today, we just don't want the guidance to be too tough. And that's the reason why

next week, the C.D.C. is going to be issuing a new set of tools.

(END VIDEO CLIP)

JOHNS (voice over): Some of the C.D.C.'s current suggestions include wearing face coverings, keeping desks six feet apart in classes, and

closing communal spaces like playgrounds and lunchrooms.

Trump comparing the U.S. to European countries that are allowing schools to open, like Germany, Denmark, Norway, and Sweden, ignoring the recent record

highs in new cases here while those countries continue to see lows.

C.D.C. Director, Dr. Robert Redfield both defending and downplaying his own guidelines.

(BEGIN VIDEO CLIP)

DR. ROBERT REDFIELD, DIRECTOR, CENTERS FOR DISEASE CONTROL AND PREVENTION: We want to make it very clear that what is not the intent of C.D.C.'s

guidelines is to be used as a rationale to keep schools closed. Remember, it's guidance; it's not requirements.

(END VIDEO CLIP)

JOHNS (voice over): Pence also making this claim.

(BEGIN VIDEO CLIP)

PENCE: We're actually seeing early indications of a percent of positive testing flattening in Arizona and Florida and Texas.

(END VIDEO CLIP)

JOHNS (voice over): But the positivity rates of all three states have been steadily increasing since June and are currently well above 10 percent.

Even with pressure from the White House, some state leaders say they'll only open schools when it's safe to do so.

(BEGIN VIDEO CLIP)

GOV. GRETCHEN WHITMER (D-MI): I'm not sending kids and our education workforce into our schools unless it's safe. It's that simple, so we're

listening to scientists. Not threats, not politicians.

(END VIDEO CLIP)

JOHNS (voice over): Meantime, Dr. Anthony Fauci telling "The Wall Street Journal" that public health and economic freedom don't have to be at odds.

(BEGIN AUDIO CLIP)

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: We shouldn't think of it as one against the other. Because once

you start thinking there's public health, and then there's the economy opening, it looks like they're opposing forces.

So what we're trying to do is to get the public health message, if heard and implemented, be actually a gateway to facilitate opening in an easier

way.

(END VIDEOTAPE)

QUEST: China is hitting out at Australia's move to suspend its extradition agreement with Hong Kong. Australia says it's in response to the new Hong

Kong security law imposed by China. It's also extending visa privileges for Hong Kong citizens.

Beijing said Australia's actions were gross interference in China's domestic affairs.

Coming up, the world waits for a vaccine. The issue, of course, is who gets it first? It's an issue of equitable distribution.

Also, mass graves in Brazil. President Bolsonaro is still upbeat, even with the virus. We'll hear from the Governor of Sao Paulo in this hour.

(COMMERCIAL BREAK)

[09:22:12]

QUEST: A warm welcome back to FIRST MOVE. This is a Thursday. We'll be looking at the futures in just a moment.

The market is due to open eight minutes from now. It could be another strong-ish day. In fact, the futures are mostly higher. The NASDAQ is set

for fresh records in itself. The Dow, look at it, it has barely changed.

The jobless claims rose by 1.3 million last week. They're trending lower, but it is a slow pace. New pressure on global businesses, the kitchen wear

retailer, Sur La Table is filing for Chapter 11, another retailer. Remember, Brooks Brothers went yesterday.

The U.K. drugstore chain Boots -- Boots the chemist, is to cut 4,000 jobs. That's around seven percent of the workforce. And the U.K. department store

chain John Lewis is closing several stores. Hundreds of jobs are at risk.

Meanwhile, the Japanese retail giant, Fast Retailing is cutting its full year forecast.

Contrast that depressing level of job losses, markets under pressure, with what we're seeing and hearing out of Asia at the moment, where we're seeing

strong gains for Chinese stocks. The Shanghai Composite is up more than 13 percent year-to-date, easily outpacing the S&P, just down two percent.

China today reporting inflation. Wholesale prices down three percent from a year ago. Consumer inflation rose, and food prices were up 11 percent year-

on-year, and the U.S.-China tensions persist. The White House could issue new Executive Orders against China soon amid growing anger over the Hong

Kong security law.

Leland Miller joins me, the CEO of the China Beige Book. We are trying -- good to see you, Leland. We are trying to understand, trying to fathom in

this strong reaction in China, the market in China, which bearing in mind in all of the Chinese markets for exports are in deep trouble. So what is

powering this market?

LELAND MILLER, CEO, CHINA BEIGE BOOK: Well, the first thing to keep in mind is that in China, the stock market has absolutely nothing to do with

the real economy. There is zero correlation. The reason there's a bull market rally in China is because the state media came out with a front page

editorial telling people to invest in the healthy bull market.

This is being done, of course, to prep everybody for a much better second quarter numbers, which the Chinese government was always going to announce

simply because they claimed victory over the virus, they claimed that there was a strong recovery, so now they have to release economic data.

So, these are all intertwined. But the reality is, what happens in the stock market is being dictated out of a megaphone in Beijing. It has

nothing to do with economic fundamentals either way.

[09:25:10]

QUEST: Okay, so let's assume to some extent they are attempting to create their own virtuous circle. Get people to buy, they buy. The market goes up.

Economic activity looks better.

But if it's smoke and mirrors, eventually that will become clear, and John Defterios earlier in the program was specifically saying let's remember

previous times when the market collapsed in Shanghai. Are we at risk of that?

MILLER: Certainly. If the stock market doesn't reflect the economic fundamentals, some people will be in for a rude awakening.

I think what's confusing people right now is that there is improvement in China. When you look at the PMIs and you see month-on-month improvement or

you look at our data, you see quarter-on-quarter improvement. There is an improvement from an economy that was shut down a few months ago.

But the problem is, Chinese official data is claiming improvement year-on- year and that's not only a fallacy, it is ridiculous. There's no way that there's any way that the economy is anywhere close to where it was a year

ago.

You're not seeing a job market. You're not seeing growth numbers. You're not seeing any part of this economy broken down big or small that looks as

good as it did even a year ago.

So it's about having a very modest expectations on how this growth will improve. The Chinese problem right now is that they're hyping this up to be

a V-shape recovery and what we're seeing right now, we can see clearly the data, it is most definitely not a V-shaped recovery.

QUEST: So the trade sanctions, the tariffs, so to speak, are still in place, most of them from the U.S. I can't see realistically them being

removed between now and the election. It doesn't serve President Trump to so do.

So China has clearly learned to live with them. Who currently holds the whip hand between China and the U.S.?

MILLER: Well, they're in sort of this non-virtuous circle right now whereas President Trump wants to ramp up the anti-China rhetoric in the

run-up to the November election, but if he is hamstrung by the fact that if he goes too far, he's going to lose his Phase 1 Trade Deal.

I think that things are moving in that direction, anyways. Congress is agitating national fervor, agitating for a stronger response against China

across the board. It's going to be very difficult for President Trump to hold back the tide on this and to continue to defend a deal, which

particularly because of COVID, but also because of its extremely ambitious targets to start with, the Chinese are not even coming close to living up

to.

So you've got a real problem there and it's probably going to fall apart in the fall.

QUEST: Okay, fall apart in the fall just before the election, perhaps. But you've got the Chinese Minister saying today in a very blunt set of

comments that Chinese-U.S. relation are the worst they've been since the 1970s.

Now, bearing in mind the recent election in the U.S. just four months away, does it matter that the relations are bad? I know that might sound really

simplistic, but at the end of the day, if everybody muddles through, does it matter?

MILLER: Well, it wouldn't matter if this was all for election, electioneering, electoral purposes and things were going to go back to sort

of a nice, neutral relationship in the aftermath.

But the reality is that no matter who wins this election, the relationship with China is going to continue to deteriorate, not just for months, but

for years.

This is a relationship that's been on a collision course for a while and whether you see a President Biden, or whether you see a second term for

President Trump, you're going to see extreme pressure from Congress, from the States pushing for there to be a stronger response against China for

Hong Kong, for South China Sea, on trade. Just across the board.

So I think that this is not going to improve any time soon. I don't think it's a three-month blip.

QUEST: Leland, very grateful to have had your perspective this morning. We'll talk more about this obviously before the election, but thank you,

sir. I appreciate you joining us this morning.

Now, in just a moment, most of us are asking the core question, when will a vaccine be ready for COVID-19? Our next guest asks a very different

question. Who will get the vaccine when it is ready? Who will be first and how will the rest of the world get it? It's FIRST MOVE. I'm Richard Quest.

(COMMERCIAL BREAK)

[09:32:42]

QUEST: The markets are open. Welcome to FIRST MOVE. We are off to the races, and an early indication -- very early-- just a couple of moments

into the trading day, but they are higher. There we go.

Well, the Dow isn't, but let's not worry about that. That was actually lower in futures. So I guess, we should -- there we go. The Dow is having a

bit of a wobble.

The NASDAQ powers ahead, hitting a fresh record high. Apple is at a record after the latest jobs data. It's extraordinary. It is particularly on the

back of China. And the economics are not bad, but they're not good.

Now, 1.3 million Americans filed new claims for jobless benefits last week. The continuing claims number is above 18 million. Rising COVID cases is

what everybody is concerned about, more than 12 million confirmed cases worldwide. And the U.S. accounts for a quarter of all cases.

In the United States, more than 58,000 new cases were reported in the U.S. on Wednesday. I think it may have even hit 60,000 cases.

Dr. Anthony Fauci today saying that states with rising cases should consider shutting down again. We will talk COVID in a moment, after we have

considered the Supreme Court.

The Supreme Court is due to rule in the next hour or so on Donald Trump's tax returns, on whether they should be released. Jessica Schneider is our

justice correspondent and with me.

Okay, so just remind us so that we are well briefed for when this result comes. Who was seeking the tax returns and where do we stand so far?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: So, Richard, these are two different cases and in one case, three congressional committees, of course,

led by the Democrats, they are seeking the President's financial records. Then there's another case out of New York City, the Manhattan District

Attorney is seeking not only tax records and financial documents, but also crucially, eight years of the President's personal and business tax

returns.

Of course that's a biggy, because the President has refused to release any of his tax returns, sort of bucking the trend of all previous Presidents

here.

So there are two different cases. What's interesting here is that every single lower court has overruled the President essentially saying that the

President cannot block these subpoenas, and crucially, that's because these subpoenas are not even to the President. They are to his financial

institutions, a number of institutions.

[09:35:19]

SCHNEIDER: And Richard, these institutions have said that if the court orders them to release these documents, they will comply. So these

documents will be out there.

However, the House Committees are only seeking financial documents, financial records and not the tax returns. It's the District Attorney case,

the prosecutors in New York who are seeking those eight years of tax returns, but if they in fact get them, if the Supreme Court rules in their

favor, the public likely won't see the tax returns after all, even though they've been clamoring for them for the past four years or so, because

that's because it's for a grand jury investigation.

Grand jury secrecy rules require that any evidence be kept secret. So unless there's some kind of leak, we might not even see the tax returns,

even if the Supreme Court rules to release them.

QUEST: Jessica, the result is -- the decision -- it is not a contest in that sense. The decision is just after 10 o'clock. We will have live

coverage of it. You will be there and you will bring us it when it happens. I'm grateful to you. Jessica Schneider who is in Washington.

SCHNEIDER: Thank you.

QUEST: The race for a COVID-19 vaccine is intense. The U.S. government gave $1.6 billion to Novavax, which is a company here in the United States

that is developing a vaccine. It's one of several companies that's received large sums of money from the U.S. government, hoping to be the first.

Novavax CEO explained the process.

(BEGIN VIDEO CLIP)

STANLEY ERCK, CEO, NOVAVAX: ... and it's stable and we do that throughout the process. The other thing we have to do is show that we can scale up

production and that's the other half of what we bring to the table.

We have a vaccine whose platform is based upon simple recombinant proteins that are stable at room temperature for some period of time and would be

shipped and stored in four to eight degrees, refrigerated temperatures, over a long period of time.

And so if we could do that and we can scale up, which is what we're planning on doing not just in the U.S., but globally, we just bought a very

large manufacturing facility in the Czech Republic a couple of months ago, and we can scale and we can produce at the levels of hundreds of millions

of doses a month, starting next year.

(END VIDEO CLIP)

QUEST: Dr. Seth Berkley is with me. He is the CEO of Gavi, The Vaccine Alliance, which is there to focus on providing vaccines for the poor. Well,

we've got an enormous number of companies receiving vast sums of money. The E.U. has given money. The U.K. has given money. The U.S. government has

given at least $4.5 billion.

They say that they are doing it to get the vaccine done, but your fear is they are hoarding. They're buying stocks in advance.

DR. SETH BERKLEY, CEO, GAVI, THE VACCINE ALLIANCE: So, first of all, Richard, nice to see you again, I am glad you survived COVID tornado. In

terms of what you're saying, you just talked about Novavax.

Novavax also received finance for CEPI, who is our partner in this effort. What we are trying to do is to put together a global buying consortium.

Why is that important? Normally, we focus on the developing countries, but we realized if we just focused on the poorest countries, there would be no

vaccine to distribute to those countries.

So what we're trying to do is put together a facility that will allow purchase of a full range of vaccines, a large portfolio, 10 to 15 vaccines

that will maximize the chances for success and also work to scale up, as you've heard from the other manufacturers, in multiple sites around the

world at risk.

So as soon as we know a vaccine works, we can make it available in developed and developing countries simultaneously, because we are only safe

if we're all safe. If we have big reservoirs of virus that are circulating and even if a country is fully vaccinated, you will be unable to go back to

a normal economy, you won't be able to travel, trade, move around, and do commerce. So we really need to think about this globally.

QUEST: But, once a vaccine is available, and it seems highly likely there will be several that will work in some shape or form, how are you going to

hold these governments to account and remind them, yes, all right, your people may be towards the front of the queue, but we need to make sure

other countries in the developing world get it. How do you hold their feet to the fire on that?

BERKLEY: Well, of course we are making agreements with companies as well, and of course they may be through different manufacturing facilities that

are being used right now.

So we've already announced, for example, AstraZeneca, that we also have an agreement for 300 million doses. That's not going to be in the same

facility that other doses are being made. But the idea is to try to get a diversity of producers to make vaccines.

Now, of course we believe that you need a global response, but if the U.S. government, for example, pays large amounts to make vaccines and push the

science forward, that's great, because then we can work with those companies to take those vaccines forward.

[09:40:53]

QUEST: Seth, are you -- you know, I'm looking at you sort of as an honest broker here. Are you satisfied that the governments and the pharmaceutical

companies working together with that money, billions and billions, appreciate that when it's available, the developing world has to have doses

at the same time?

BERKLEY: Well, I know certainly that the companies understand that, because they realize that having a few countries get vaccinated and

everybody be without is not good for their business, not good for their PR. Obviously, we're trying to convince governments the same.

If we could vaccinate 20 percent of the populations of all countries, we would be likely to end the acute phase of the pandemic. That's much more

efficient than having a few countries vaccinated and the pandemic continuing to spread in the other parts of the world. But that's going to

require a mind shift.

QUEST: Right. That mind shift, we will follow closely and you hopefully will help us. Always good to see you, Seth, and thank you for the good

wishes. I appreciate you coming on the program this morning.

BERKLEY: Good to see you, Richard.

QUEST: In a moment, the Governor of Sao Paulo is not only fighting coronavirus as the pandemic, he has other issues on his agenda, too related

to how coronavirus is being treated.

In a moment he'll be with us live on the program. FIRST MOVE.

(COMMERCIAL BREAK)

[09:45:24]

QUEST: Brazil's Health Ministry has reported nearly 45,000 new coronavirus cases just in the past day. Brazil now of course has one of the highest

infection rates and positivity rates anywhere in the world.

Over 1.7 million cases, just behind the United States, frankly. Nearly 68,000 deaths in total. Again, just behind the United States; 1,200 deaths

in one day. And yet, despite this, the President, Jair Bolsonaro, who himself has just tested positive, took his mask off at a press conference.

Now, he did take a few steps back, but he then went on to say, if you are affected by the virus, the possibility of something more serious is close

to zero, which of course is arguably offensive to those families of victims who are buried in the mass graves that we've seen in Sao Paulo.

The Governor of Sao Paulo, the City Governor is Joao Doria who says Brazil is also fighting the Bolsonaro virus. The governor is with me. Now, sir, I

appreciate it. Thank you for joining.

The reality is that the challenge now -- I mean, I hope the President makes a good recovery, but if he does, without symptoms, he simply turns around

and says to you and everybody else, look, this is nothing. It is just barely the flu.

JOAO DORIA, GOVERNOR, SAO PAULO, BRAZIL: Well, Richard, it's a pleasure to be with you. It's not a cold. I'm sorry, and I hope that President

Bolsonaro gets better soon, obeying the health guideline as a part of recovery from the COVID.

But he gives, I have to tell you, he gives the wrong example to people in Brazil, going into the streets without a mask, for example. It's very hard

to keep people home, respecting the health organization when you have a President who turns our world weaker. It's very difficult. We have to

combat -- it's a case where we have to combat two virus -- the coronavirus and the Bolsonaro virus.

QUEST: There's not a lot you can do about this though, is there? I mean, you end up with dueling messages, the President says one thing, the

Governor of the most populous city says another?

DORIA: Well, Richard, we are doing the right thing in Sao Paulo and also, in most of the states of Brazil. We are a federation and we have very good

governors in Brazil, working together with the health organization.

Brazil needs peace right now to combat the terrible crisis. Leaders must be united to save lives. I'm asking President Bolsonaro to come to the health

organization suggestions and recommendations all the time. It is very difficult, because he has different position, and I have to tell you, I

learned to respect Medicine and Health faced with the pandemic. Determining the steps of government officials is Science. It's Medicine. It's Health.

It's not politics. It's not the economy nor pressures.

We cannot waste time when it comes to people's lives, Richard.

QUEST: Can I just ask you, Governor, there is the story, of course, that the alleged corruption in terms of the purchase of ventilators, and I

understand -- of course, I understand that the principal goal now is to deal with the health pandemic and to deal with the crisis, and that means

vast sums of money sloshing around, aiming to buy as much PPE, ventilators and medical equipment. Do you worry that some of this is being misused?

DORIA: Well, Richard, this is another big problem that we have in Brazil.

Of course, the correct way was the Federal government make the structure and buy respirators and buy medicines and buy masks and everything, and

then distribute to the states in Brazil and also to the cities and not leave each state -- we have 27 states in Brazil, and thousands of cities,

buying around the world respirators and buying masks and buying medicine.

But it's very difficult to do that in a good way, and of course, in the right way, the correct position was government -- the federal government to

concentrate all buying around the world and then distribute this to Brazil.

[09:50:44]

QUEST: Mr. Governor, thank you so much, sir. I've always loved my visits to your superb city. Such an exciting, vibrant, economically active place.

Sir, I look forward to my next visit, hopefully under happier circumstances we can talk face to face without masks. I'm grateful for your time, sir.

Thank you.

DORIA: Richard, it would be a great pleasure. You'll be quite welcomed here in Sao Paulo, Brazil. But if you come during the pandemic, please use

mask.

QUEST: I will. Absolutely. Masks at the ready. Thank you. The Governor there joining me. It is worth mentioning to the viewers that I saw the

Governor there, of course, wearing his mask, quite properly wearing his mask, and of course I'm not wearing a mask.

But you need to know I'm in a room on my own. Yes, it's all here in my living room. That's the sofa. It really is, and so that is why.

Now, when we come back in just a moment, many U.S. states have paused the reopening. Well, it sounds straightforward when I say it like that, but

you'll realize, of course, that if you pause the reopening, the staff that you took back on have to be furloughed again.

It is FIRST MOVE and you're very welcome.

(COMMERCIAL BREAK)

QUEST: It's really simple. When the states reopened, people went back to work. Now with the surge, bar workers and the like are being furloughed yet

again. Vanessa Yurkevich has that story.

(BEGIN VIDEOTAPE)

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS REPORTER (voice over): For over two weeks Warren Koguc battled Covid- 19, isolated in his apartment in

Fort Worth, Texas.

(BEGIN VIDEO CLIP)

WARREN KOGUC, BAR MANAGER, FURLOUGHED TWICE: It was brutal. It was a constant beating on your body.

(END VIDEO CLIP)

YURKEVICH (voice over): He believes he got the virus when he went back to work mid-May, when bars in the state reopened nearly two months after being

shut down.

(BEGIN VIDEO CLIP)

KOGUC: I really thought we should have waited a couple more weeks. You have to make that constant choice when you're -- when you're in this type

of business between your health and safety and working.

(END VIDEO CLIP)

YURKEVICH (voice over): Now, bars in Texas are closed again and Koguc, who is symptom free, is out of a job again. He was one of two million Texans

who applied for unemployment from mid-March to mid-May. Weekly claims started to drop when bars and restaurants reopened.

But now, like COVID-19 cases in the state, unemployment claims are on the rise again.

[09:55:17]

(BEGIN VIDEO CLIP)

KOGUC: I don't know if or when I'll be able to go back to work. I've got about a month and a half, maybe two months, before it gets super tight.

(END VIDEO CLIP)

YURKEVICH (voice over): It's also getting tight for bartender Randee Heitzmann. She bought a brand-new car in February and was just furloughed

for a second time.

(BEGIN VIDEO CLIP)

RANDEE HEITZMANN, BARTENDER, FURLOUGHED TWICE: Not what I would have done if I would have known I was going to go on unemployment and not have to

work.

(END VIDEO CLIP)

YURKEVICH (voice over): The extra $600 a week in enhanced unemployment expires at the end of this month, leaving her financial future in jeopardy.

(BEGIN VIDEO CLIP)

HEITZMANN: If that $600 goes away, that is gone. Like I don't -- that doesn't even cover my rent. That's $200.00 to $300.00 a week. That's not --

that's not livable for anybody at all, let alone somebody that has bills that are for somebody that's used to making twice that in a day.

(END VIDEO CLIP)

YURKEVICH (voice over): Omar Yeefoon reopened for just four days before closing Shoals Sound and Service.

(BEGIN VIDEO CLIP)

OMAR YEEFOON, OWNER, SHOALS SOUND AND SERVICE: I knew that the flood was coming.

(END VIDEO CLIP)

YURKEVICH: The risk of staying open as cases surged was too great, forcing him to lay off his employees for a second time.

(BEGIN VIDEO CLIP)

YEEFOON: How do you turn around and -- and ask for someone -- you know, here we go again. Like, I swear we're going to make it this time. You know,

it's -- it's -- it's really humbling.

(END VIDEO CLIP)

YURKEVICH (voice over): Americans out of work have nothing but time. For Heitzmann, she's using it to watch how elected officials are responding to

the health and unemployment crisis.

(BEGIN VIDEO CLIP)

HEITZMANN: We're sitting at home. So the only thing that we have to do is to watch you. So the decisions that you're making might not have

repercussions for you right now, but they will in November. And they will the next time we vote after that.

(END VIDEOTAPE)

QUEST: That's FIRST MOVE. I'm Richard Quest. Have a good day.

(COMMERCIAL BREAK)

[10:00:00]

END