Return to Transcripts main page

First Move with Julia Chatterley

Three Killed in Knife Attack At Church in Nice, France; U.S. GDP Bounces Back after Q2s Historic Plunge; France and Germany Announced New COVID-19 Lockdowns. Aired 9-10a ET

Aired October 29, 2020 - 09:00   ET

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

[09:00:16]

ANNOUNCER: This is CNN breaking news.

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Welcome to FIRST MOVE. We begin with breaking news from France. Three people have been killed in a

knife attack at a church in the City of Nice. The Mayor has said that everything points to the attack being an act of terrorism.

France has raised its security alert status to the highest level. Cyril Vanier is live in Paris with the details. Cyril, what more do we know about

what happened?

CYRIL VANIER, CNN CORRESPONDENT: Well, Julia, we are expecting the President to address the nation shortly. He is in Nice or will be shortly

arriving shortly in Nice and we will find out more at that point.

But what we know from the moment is that around 9:00 a.m. local time, an assailant entered the Notre Dame Basilica, that's the Basilica right in the

commercial heart of Nice, this southern city, and he was wielding a knife. He slit the throat of one person, he stabbed a second to death, injured a

third and that person managed to flee the Basilica, but later died of her wounds. So the death toll stands at three.

Three people killed in this horrific knife attack that is now being treated as a terror attack by French authorities.

Law enforcement were quickly alerted. They were, according to witnesses, quickly on the scene and opened fire. They shot the assailant. They did not

kill the assailant, who is now receiving medical care.

The Mayor of Nice who was on the site of the attack shortly after it happened said that the assailant said the words repeatedly, " Allahu

akbar," God is great in Arabic, and that he said those words even as the assailant was receiving medical care.

At this stage, we know precious little about the assailant, both the identity, the motives. As I said, it is being as a terror attack and there

is a very significant context here. This is the third terror attack in just over a month in France, and the first two were connected to the publication

or republication, I should say, of satirical cartoons of the Prophet Mohammed.

Whether or not this third attack is linked is still too early and has not been determined.

CHATTERLEY: No, sir, but you're absolutely right, the context here is critical. Thank you for bringing us up to speed there with the

developments. Cyril Vanier speaking to us there and we will keep you updated on any further developments as we get them.

For now, we will bring it back to business with a quick look at what we are seeing for global stock markets and I can tell you, U.S. futures are

volatile, but turning higher now after more than a three percent pullback yesterday on health and election concerns.

Europe also mostly lower at this moment. Investors still trying to digest news of more stringent lockdown measures in both Germany and in France,

too.

Strong earnings from Royal Dutch Shell, Volkswagen and Credit Suisse also helping lending a little bit of support to Europe earlier, but as you can

see, it is red arrows across the board there, too.

We are also have breaking economic data this morning out of the United States. Third quarter GDP growth in the U.S. coming in at an annualized

rate of 33.1 percent. That is by far the fastest growth recorded. It follows the equally historic drop in GDP for the second quarter, of course,

down by some 31 percent. It's more helpful to look at these numbers, I think, on a quarter by quarter basis.

By that metric, GDP rose some 7.4 percent since the spring lockdowns. The pace of the recovery clearly surprising most analysts, so the reality is

that just to give you some sense of space and context here, the economy remains 3.5 percent smaller than it was at the end of 2019.

It sounds minor, but it is approximately as far below the peak as we were during the worst points of the great recession.

Just to give you a sense as well, of what's going on. Initial jobless claims remain near record highs, too. A further 751,000 people filing fresh

claims for jobless benefits last week. More than 22 million Americans still getting some form of jobless assistance.

So it's a strong growth recovery, but plenty of challenges remain as we push into the fourth quarter. Morgan Stanley's Chief U.S. Economist, Ellen

Zentner joins us now.

Ellen, great to have you on the show with us. Your context, please, and thoughts in light of the data today.

ELLEN ZENTNER, CHIEF U.S. ECONOMIST, MORGAN STANLEY: You know, so GDP coming in about as expected that it was going to be this explosive growth

in the third quarter and as you said, a record drop followed by a record rise.

And so does that mean that we can breathe a sigh of relief and we're just fine? I do take it to heart that this is a much faster recovery than most

people expected, but it's incomplete. So we are about 97 percent of the way back to our pre-COVID levels for the economy, and that's great.

We think we'll get a hundred percent of the way back by the second quarter of next year. That's one of the most rapid recoveries we've had.

[09:05:20]

ZENTNER: But, let's look under the hood of items like in the labor market where yes, the unemployment rate has come down sharply and we expect it to

continue to fall. But women's labor force participation rate has fallen. Many dropping out of the labor market to take care of children. Will they

come back?

Minorities, unemployment rate rising to astronomical heights after such progress made pre-COVID. And you don't want these people to stay out of the

labor market for long because the probability they re-enter drops sharply the longer they are unemployed.

And so, there is more work to be done especially on the part of fiscal policymakers in order to help quicken the recovery even more.

CHATTERLEY: Yes, I mean, there's two key challenges there, as you point out. The fiscal policy side and the support for people that are out of work

and simply can't get back into the workplace and of course, controlling the virus, too, and we are seeing case rises pop up all over the United States

at this moment.

Ellen, you hoped or at least predicted that we would see around $1.5 trillion to $2 trillion worth of additional financial aid in September of

this year, and clearly, it didn't happen. That assumption allowed you to bring forward when you thought we'd get back to where we were before the

pandemic hit to the second quarter of next year.

In light of the fact that we didn't get that stimulus, how long does it take us now to get back simply to where we started?

ZENTNER: So, believe it or not, still in the second quarter of next year. So the initial thought was, we need more stimulus. That stimulus didn't

come. Obviously, the payback or that fading fiscal impulse would drag on the economy.

Now, growth has slowed sharply in the fourth quarter. We are in the midst of it now. You can't strip that much money out of household pocketbooks

without expecting some kind of slowdown in spending.

But what has happened since September is that when those benefits expired at the end of July, households continued to spend in August. They continue

to spend in September. They continued to spend in October based on the high frequency data that we are getting, not the least of which a big Amazon

Prime Day is helping and some other aggressive tactics from retailers to push sales, but consumer confidence has also risen.

Now, how is that possible when we just took a lot of income away by letting those Federal supplemental benefits expire? And it's because households

built up an incredible cushion of savings when the first CARES Act ran into place, replacing all of that lost income, yet we couldn't spend all of it

because we were in lockdown.

And so that's helped households, especially the lower income households float for a time by drawing down that savings. Now, the further you get

away from that expiration of benefits without putting in further stimulus, the more you're going to weigh on consumer spending.

But spending has been so strong because of that that the tails of the CARES Act -- the first CARES Act has been carrying us through. And so, we are

still on track, and believe me, I was surprised as well.

We are still on track to hit pre-COVID levels in the second quarter of next year, but again, Morgan Stanley has been calling for that rapid more V-

shaped recovery for quite some time, but let's put that aside, all right.

That has come to light. It's come true. We've had a very sharp recovery here.

I'm concerned about what happens beyond that. In order to get into the cracks of underserved areas of the population, of the inequities exposed by

COVID and that's why I want to stress that there is more room for fiscal stimulus here.

CHATTERLEY: Yes, the aggregate does not tell the stories of those that have lost jobs aren't going back necessarily into the workforce and the

suffering that goes on. Yes, I couldn't agree more with you.

Talk to me about what clients are asking you. What are they saying at this moment and how uncertain are they, despite you saying, look, we're still on

track for recovery by the second quarter of next year? How concerned are they, whether it's election, whether it's lack of agreement over further

fiscal stimulus, whether it's the out of control sense as far as the virus is concerned?

ZENTNER: Yes, I think we can look at the volatility in markets and see just how concerned clients are. You know, when elections are close or even

if the polling doesn't -- or probability -- the betting markets suggest that it is not a very close race, normally, that would give people more

confidence in how to invest around the election outcome.

But, you know, the polling results from 2016 having misguided means that people are not willing to trust the betting markets or the polling this

time. So that's made it difficult to plan until you actually get election results, so that's created volatility.

[09:10:19]

ZENTNER: The virus is still the number one risk to the economy, and so any expectation that we get back to pre-COVID levels by the second quarter of

next year, and it is tied to fiscal stimulus as well because there are some election outcomes that suggest we only get further fiscal stimulus if the

economy goes south or financial markets fall apart and that would be related to the virus as well.

So the path of the virus, you know, Matt Harris and our biotech analysts expecting the second wave to accelerate. He is expecting that, you know, as

we get further and further into the winter, we do still seem to be on track for positive developments with vaccine and rolling it out to vulnerable

populations by the end of the year, but we are not looking until June of next year or July before the population gets the second dose which is when

many will assume that we are getting into the more safe levels.

Does that all play out exactly as planned? It's a virus. We don't know how to deal with this. And it could throw us for a loop at any time.

What I am encouraged about is that we have seen households and this is partly why the recovery has been as strong as it has been so far.

Households have found a way to engage in economic activity while still feeling safe and that's allowed that more robust consumer spending and more

jobs to come back faster than expected.

And households are looking less at the acceleration in cases, more so at the outcome. Is the outcome better? Is the death rate out of those cases

still falling? Can we at least have some sort of treatment that helps the chances of getting through COVID?

And so that's why we haven't seen as big of a dent in households. It's coming more from investors assuming that this could hit the economy, and so

creating that volatility in markets and again, we look toward Europe, right, to extrapolate what might happen in the U.S. and that's got everyone

concerned here in the U.S.

CHATTERLEY: Yes, a hundred percent and fascinating to hear what you say in terms of consumption behavior and consumers and their expectations as far

as this virus is concerned. You have to wonder whether it plays into the politics that we see five days out from a presidential election.

Great to get your insights. Ellen Zentner, Chief U.S. Economist at Morgan Stanley. Thank you so much for joining us.

Now, exactly as Ellen was talking about there, the U.S. reporting more than 76,000 new coronavirus cases on Wednesday. That's the third highest single

day total. Four of the five worst days since the pandemic began have actually come this week.

Cases are rising in a record 41 states. The Coronavirus Taskforce is warning of, quote, "unrelenting broad community spread" in the Midwest,

Upper Midwest, and West.

Meanwhile in Europe, Germany and France have both announced new four-week lockdowns as coronavirus infections continue to spiral. Let's get to Paris

once again for the latest on this.

Jim Bittermann joins us now. Jim, great to have you with us. The big difference I think between what we have seen announced in France in

particular and what we saw in March and April is trying to find that balance between protecting the economy and balancing the health risks.

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Absolutely, right. In fact, President Macron spotlighted that last night when he was talking

to the nation. He basically said, they are going to try to keep as many businesses as possible open, but that does not include nonessential

business.

It means that bars and restaurants will close. Theaters will close. Any kind of social gathering will be cancelled.

But they will try to keep the schools open. This would be schools up to, through high school. Universities will have to teach at a distance with

teleconferencing. So they are trying to keep the economy rolling over. They are going to keep the construction industry going as much as possible and

they are trying to make exceptions where they can, but for everyone else, it's going to be a real lockdown and you have to stay within a kilometer of

your house. You can only go out for a one hour per day.

Except if you've got a good reason, like medical reasons or visiting your sick or elderly relative or something like that. But in any case, it's

going to be tough and it is going to last at least four weeks. President Macron said they will reevaluate things in about two weeks, but in fact,

this being a country that doesn't lack in pessimism, everybody is saying four weeks, it could be six weeks, and it could be two months. Nobody is

really betting on it coming off in just four weeks' time -- Julia.

CHATTERLEY: We just have to hope and see what happens. Jim Bittermann, thank you so much for the update there.

[09:15:03]

CHATTERLEY: All right, let me bring you up to speed now with some of the other stories making headlines around the world. Tropical Storm Zeta

sweeping through the Southeastern United States after making landfall in Louisiana as a Category Two Hurricane.

The storm knocked down trees and power lines and flooded streets. At least two people have lost their lives, more than two million are without power

across five states.

In Vietnam, rescue workers are scrambling to find survivors buried under landslides triggered by Typhoon Molave. Dozens of people are feared dead.

Molave struck the central coastline on Wednesday.

Taiwan has reached a new milestone in the fight against coronavirus. It's now gone some 200 days without any local transmissions of COVID-19 cases.

Taiwan moved quickly when the pandemic began, shutting down borders with Mainland China and developing a contact tracing system, as we've discussed

on the show.

All right, coming up on FIRST MOVE in these volatile times, Mohamed El- Erian is here to explain the mood and music on Wall Street and Joe Biden's former communications chief, Jay Carney sings the praises of Amazon. Don't

miss it. It is all coming up. Stay with us.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. futures are inching higher. It comes after Wednesday's 3.5 percent

pullback, the worst drop in the S&P 500 since June.

We begin today's session for the S&P 500, some 8.5 percent off record highs, just to give you some context here for what we're seeing. The U.S.

today also reporting a record rise in third quarter growth numbers, 33.1 percent on an annualized basis. This number coming in line with

expectations.

I think investors are more focused at the moment on the economic implications of a COVID second wave and how it will affect growth going

forward. All this, of course, coming just five days before U.S. presidential elections with some 75 million people having already cast

their votes.

Mohamed El-Erian joins us now, he is the Chief Economic adviser at Allianz. He is also the President of Queen's College at Cambridge University.

Mohamed, fantastic to have you on the show. I guess we shouldn't be surprised by what seemingly is a bit of a reality check here for investors

in light of COVID cases and proximity to pivotal elections.

[09:20:21]

MOHAMED EL-ERIAN, PRESIDENT, QUEENS' COLLEGE, CAMBRIDGE UNIVERSITY: We shouldn't, Julia. I mean, the evidence coming out of Europe, which I think

is a forward indicator for the U.S. is pretty frightening. It tells you that these cases spread very rapidly in the second wave and that the trace

test and tracking gets overwhelming quickly and it is very difficult to have a focused approach.

So you end up with some sort of lockdown and I think that that is a reality check for a lot of investors.

CHATTERLEY: I mean, what we're seeing in Europe, and I was just having the discussion with Jim Bittermann over in France is trying to find this

calibration, really, between managing the health crisis and protecting the economy and perhaps learning from what we saw and did in March, April, and

May of this year. We still haven't found that balance, Mohamed, as far as I'm concerned.

EL-ERIAN: We haven't because it's inherently difficult in itself, but there's a third element. You know, we're trying to find a balance between

public health, normal economic activity, or as normal as can be and personal freedoms. So it's a really complicated thing to solve, and if you

can't deal with one issue and say, I'm not going to follow this, I'm not going to care about this, it's very hard to solve and that's what we're

finding.

And the next story, Julia, is going to be about people pushing back. People feeling that they don't want to go through this again. So we don't have any

silver bullet, unfortunately, to meet all three criteria.

CHATTERLEY: You're expecting potential protests whether in Europe or across states in the United States.

EL-ERIAN: I am, for the simple reason that this is not just a big shock, it is a very uneven shock. It steals opportunity from people and it tends

to take opportunity away from people who are most vulnerable to begin with.

So, people get angry and rightly so. I understand why they get angry.

So, yes, this is a very delicate economic, sociopolitical cocktail that I hope we are going to find our way through it, but I do worry that it is

going to be hard for a while.

CHATTERLEY: Do you think the reaction would have been any different, Mohamed, and we can talk about market volatility, but perhaps more

importantly, far more importantly, actually, the social implications here if Congress would have managed to have gotten its act together and provided

further financial aid to people?

EL-ERIAN: Yes, you can't both take away your income and not support it with something else, right? So people worry about their livelihood and if

you don't provide income support at the same time as their livelihood being taken away by what they see as a government decision, it is not really, it

is a health decision, but they see it as a government decision, it becomes harder, yes.

CHATTERLEY: Asia, nations in Asia manage this. So there is a question to be asked there about the kind of democracy or not, perhaps, in the case of

China that did manage to handle this crisis better, but I just wonder, from an economics point of view, if you've got the United States slowing, if

you've got European nations slowing, as we push through the fourth quarter, is there enough of a counterbalance in terms of the economies across Asia

to support global growth?

EL-ERIAN: Two things. First, Asia has been able to do it better because in their case, their equation is not as complicated. So China can deal with

personal freedom by directive. Taiwan, Korea, Japan have a sense of collective responsibility that allows that to be realigned quickly with

health and economic priority.

So, there is a reason why they do better, but careful. They have sprinted ahead in the growth rate certainly in 2020 and beginning of 2021, but they

still rely on the global economy. So their recovery is also going to become more challenging as you go deeper into 2021 if Europe and the United States

have not recovered.

CHATTERLEY: Yes, it just means more stimulus. When does when the buy on dips mentality kick in? I can imagine volatility in the short term. We have

to wait and see what happens with the election, but particularly in light of what we are sort of indicating here is going to be yet more stimulus

simply to buy the recovery. What does it mean for investors?

EL-ERIAN: That's the big question. It's no longer about fundamentals. Markets have been decoupled from fundamentals for such a long time, it is

about conditioning. It is about three things: buy the dip. There is no alternative to stocks and fear of missing out.

And those three things have driven every single rebound and people are asking the question, how deep is that conditioning? A lot of it depends on

Central Banks, but Julia, no one knows for sure. That is a psychological thing and it is very hard to determine whether this continuing conditioning

is going to prevail as we go forward.

[09:25:23]

CHATTERLEY: How does this conditioning impact what we're going to see over the next who knows, let's call it two weeks into this election? Mohamed,

what is priced in your mind in terms of election results and how should we watch and frame what happens in terms of volatility over the next two

weeks?

EL-ERIAN: You know, I smile because here are three different narratives I've heard about the elections and markets. One, a Trump re-election is a

good thing. He is pro-business. And then when it became lesser that that was going to happen, I have heard a divided government is the best thing

for markets because the government stays out of the way.

Now the narrative is, a blue wave is good for markets because we're going to get a massive stimulus. The reality is, no one knows. This has been

price action led by conditioning that then looks for a narrative, rather than the narrative that pushes price action. The causality has gotten

upside down and it is very difficult.

I don't think much is priced in, honestly. I don't even think uncertainty is priced in.

CHATTERLEY: It goes back to your mentality about conditioning. Stimulus all the way, the fundamentals, the politics perhaps don't matter when

there's an ultimate backstop.

Mohamed, great to get your insight. We shall see -- please go on if you want to comment --

EL-ERIAN: I will just say be careful. I mean, there is a few out there that it doesn't matter when we get the stimulus as long as we get it, but

it matters. If we get the stimulus in January, more companies will go bankrupt between now and January. So, it does matter.

CHATTERLEY: Yes. It does matter. They should have acted before now. Mohamed El-Erian, the Chief Economic adviser at Allianz. Sir, thank you for

joining us. And of course, the President Queen's College, Cambridge University.

The markets open next. Stay with us.

(COMMERCIAL BREAK)

[09:30:11]

CHATTERLEY: Welcome back to FIRST MOVE. U.S. stock markets are up and running this Thursday. Let's take a look. We are seeing a mostly higher

open. Oh, well, we'll see. The major average is attempting a bounce back after Wednesday's 3.5 percent drop. We can see strength for the NASDAQ

already here, up some six-tenths of one percent. A strong read on the third quarter growth numbers, also perhaps lending some support here, showing the

United States economy expanding at a 33.1 percent annual rate, critical after Q2's 31 percent plunge.

I'm sure the White House will be out later today calling it a V-shaped recovery. It is of sorts, but you've got to put context on that, too.

Economic activity remains some $700 billion below its prior peaks and we're talking around 3.5 percent in growth terms.

In corporate earnings news, meanwhile, Samsung Electronics is reporting an almost 60 percent jump in profits, but it is warning of fourth quarter

weakness. Ford, meanwhile, rallying after the car maker reported a stronger than expected $2.4 billion quarterly profit driven by strong demand for

pick-up and SUVs.

We've also got our second mega chip merger of the week, Marvell is buying data chip maker Inphi for some $10 billion. The consolidation in that

sector continues.

Now, as the pandemic hangs over the final five days of a bitterly contentious presidential race, both Joe Biden and President Trump are

heading to the battleground state of Florida.

CNN's Arlette Saenz is in Tampa with more.

(BEGIN VIDEOTAPE)

ARLETTE SAENZ, CNN POLITICAL CORRESPONDENT (voice over): The fight for Florida takes center stage this morning with both President Donald Trump

and former Vice President Joe Biden heading to the Sunshine State.

The presidential candidates will hold competing events in Tampa, just hours apart. Trump, a campaign rally without social distancing. And Biden, a

drive-in event where supporters will show up in their cars.

The contrast in how the candidates are pushing for final votes reflecting their outlooks on combatting the coronavirus pandemic as new cases climb

across most of the United States.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), DEMOCRATIC PRESIDENTIAL NOMINEE: The refusal of the Trump administration to recognize the reality we are living through at a time

when almost a thousand Americans a day are dying every single day is an insult to every single person suffering with COVID-19 and every family who

has lost a loved one.

(END VIDEO CLIP)

SAENZ (voice over): Biden highlighting just that, after a briefing with health experts in his home state of Delaware.

(BEGIN VIDEO CLIP)

BIDEN: I'm not running on the false promise of being able to end this pandemic by flipping a switch, but what I can promise you is this: we will

start on day one doing the right things. We'll let science drive our decisions. We will deal honestly with the American people.

(END VIDEO CLIP)

SAENZ (voice over): Meanwhile, Trump tried to scare supporters in Arizona, some wearing masks but packed together.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: If you vote for Biden, it means no kids in school, no graduations, no weddings, no Thanksgiving,

no Christmas, and no Fourth of July together. Other than that, have a wonderful life.

(END VIDEO CLIP)

SAENZ (voice over): The president also looked to appeal to Nevada voters from an event just across the border due to the state's strict 250 person

limit on outdoor gatherings.

(BEGIN VIDEO CLIP)

TRUMP: Arizona, you're opened up. But Nevada, get your governor to open up your state, please.

(END VIDEO CLIP)

SAENZ (voice over): The Biden campaign also has sights set on the Sunbelt, sending Vice Presidential nominee, Kamala Harris to Phoenix and Tucson

where she condemned Trump's handling of the coronavirus pandemic.

(BEGIN VIDEO CLIP)

SEN. KAMALA HARRIS (D-CA), DEMOCRATIC VICE PRESIDENTIAL NOMINEE: The President of the United States is also the Commander-in-Chief who has then

his highest responsibility to concern himself with the health and safety of the American people and on that count, Donald Trump failed. He failed us.

(END VIDEOTAPE)

CHATTERLEY: All right. I just want to show you some live pictures as we're seeing them now. Emmanuel Macron has now arrived in Nice. You can see him

talking to those outside where we saw the Mayor has called an act of terrorism this morning just talking to people there in light of the killing

of three people earlier today in Nice. He has traveled back there just in the last hour or so.

We'll continue to keep you abreast of any further developments on that story, of course, but just once again, you're seeing French President

Emmanuel Macron on the scene now outside the church where three people lost their lives this morning.

[09:35:13]

CHATTERLEY: All right, let's bring it back to the presidential election. John Harwood now joins us from Washington. John, clearly it is all about

the battleground states in these last few days. Florida, Joe Biden; President Trump as well.

Also President Trump, I was just looking at his schedule heading to the Midwest on Friday. Wisconsin and Minnesota. These states were so pivotal to

his election win in 2016. They are also facing skyrocketing COVID cases, too. How do we see these two things playing out?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, we think the skyrocketing COVID cases are hurting President's prospects. Look at the

State of Wisconsin, which is one that Democrats initially thought was going to be difficult to win back this year. President Trump won it narrowly over

Hillary Clinton in 2016 that helped put him in the White House.

They now have an extreme hot spot situation in Wisconsin. Big college football game involving the University of Wisconsin was postponed yesterday

and we had a poll that came out yesterday that showed President Trump trailing by double digits.

He is on the defensive and that's really the theme of his campaign in the closing days in Florida and North Carolina where he will be today. He is

trying to defend states that he won in 2016, but where polls show him narrowly trailing Joe Biden, that is also the case in not just Wisconsin,

but Michigan and Pennsylvania.

Minnesota, which you mentioned is one state that Hillary Clinton barely carried. The President had once thought that he had a significant chance of

winning that back, but he is far behind in the polls. So he is facing a very difficult situation nationally. He looks to be in a deficit of eight

to 10 points. That's very large in the context of American presidential politics, so he has got only a few days to close the gap and not great

options for doing it.

CHATTERLEY: And John, we heard Dr. Fauci for the first time start in the last 24 hours start talking about the prospect of a mask mandate. In the

face of everything the United States has been through and likely to go through in the coming months, what's the likelihood that if Joe Biden wins

this election, he follows through on that?

HARWOOD: Joe Biden has said that he does not know if he has the authority as President to impose a nationwide mask mandate. He would explore that

issue and do it if he felt he had the authority, but in the meantime, he would appeal to governors to implement a mask mandate.

Whether he could get governors in Republican states who have been following the lead of President Trump in resisting that step is unclear, but if he

wins a resounding victory, which is what the polls would point to at the moment, and COVID continues to spike, you would think that he would have

some wind in his back in trying to persuade a larger chunk of the country than is now adhering to mask wearing to do so.

CHATTERLEY: Yes, we shall see. John Harwood in Washington for us there. Thank you.

All right. Up next, primed. Is amazon ready for the first holiday season since the pandemic began? We speak to Jay Carney, the company's senior vice

president. Stay with us. That's next.

(COMMERCIAL BREAK)

[09:41:31]

CHATTERLEY: Welcome back to FIRST MOVE. The European Union's two largest economies returning to lockdowns as the coronavirus cases surge across the

continent. Germany and France plan to enact their new measures in the upcoming days.

The second wave and the restrictions are a one-two punch for companies heading into the holiday season, too, and one of those is Amazon which

reported a record profit during the second quarter as online shopping soared. It also faces fresh challenges, too, such as keeping workers safe

and its supply chains intact.

Joining us now, Jay Carney, Senior Vice President at Amazon and the former White House Press Secretary to President Obama. Jay, always great to have

you on the show.

Let's start with Europe and what we are seeing there. How are you preparing in terms of, as we mentioned there, both supply chains, but also worker

protections?

JAY CARNEY, SENIOR VICE PRESIDENT, AMAZON: Well, Julia, as you know, since March, we've taken extraordinary measures at Amazon across our sites around

the world to ensure that our employees are safe.

We have changed over 150 processes within our fulfillment centers and our warehouses to allow for social distancing, to reduce the amount of density

we have in our sites, to make sure our facilities are clean and that our employees have all access to protected equipment they need: masks and

gloves and sanitizers and the like.

And what we've seen is that as we've put all those processes in place and those changes in place, while they've cost a lot of money, of course,

because of the expense involved while we're ensuring that we get packages to our customers, and essential items to our customer customers, they have

enhanced safety tremendously.

Of course, our employees live in the communities around world where they work, so they are not immune from the coronavirus, but we have seen that

our infection rates and we have looked at this closely in the United States, our infection rates tend to be significantly lower in the

communities where our employees work than the surrounding communities, i.e. the Amazon employees are infected far less frequently than those in their

surrounding communities.

CHATTERLEY: It makes sense. Bring it to the United States because there is a lot of people too, saying, look, go back to what we saw in March and

April, what we saw in Europe was a prelude to then what happened in the United States and clearly, in certain states, we have got record number of

cases hereto, Jay, what about the U.S., particularly ahead of Thanksgiving?

CARNEY: Sure, what we've, as you know, just been through almost a test run of what the Holiday Season will look like because we had Prime Day instead

of the middle of the year just in October, just a couple of weeks ago, which creates enormous demand and it went extraordinarily smoothly.

We are monitoring the coronavirus pandemic situation in the United States, of course, very closely. We are taking extra measures to ensure that our

employees are safe. One piece of data that we find super important when we look at this is, when we have an employee that tests positive or is

presumed to be positive, that person is obviously -- self-quarantines and we make sure that he or she has the healthcare that they need, and then we

do contact tracing.

And in the beginning, in March, when we were doing this, we had -- for everyone one employee who tested positive, four employees that would have

to be quarantined because of that contact. Now, we are down to a fraction of a person per positive test, which is a reflection of the kind of

measures we are taking, so that that we are ensuring within our facilities, employees are not exposed in the way that they were prior to the pandemic.

[09:45:16]

CHATTERLEY: Yes, it is brilliant to hear. It is also heartbreaking for me, benefits of contact tracing perspective. I hope you're speaking to our

local authorities about this. Talk to me about Project Ultraviolet.

CARNEY: Yes.

CHATTERLEY: If that is what is called.

CARNEY: Sure.

CHATTERLEY: There are rumors that you've got your own testing capabilities now set up. Labs that you use specifically. I know we talked about this

last time. Jay, how advanced are you on this front?

CARNEY: Well, we recognized -- and Jeff Bezos, our CEO recognized very early in this process that one key for ensuring the security and safety of

our employees was the same as it would be for people around this country and the globe, which is mass testing and testing of asymptomatic people.

So, that includes -- well, we have now set up testing processes, which is additional to anything that already exists, so we're not taking testing

capacity from other sources. And we are running about 50,000 tests a day primarily in the United States, but we have also launched a pilot program

in the U.K. We have a lab in Manchester, I believe, and we've done thousands of tests so far in the U.K. and continue to hope to expand the

program in the U.K. and around the E.U.

CHATTERLEY: Yes, I mean, 50,000 tests a day is certainly something. You are, I believe now, the second largest --

CARNEY: It's getting there. We have -- our goal is to obviously increase that substantially.

CHATTERLEY: By how much? How much do you think you can reasonably do?

CARNEY: Well, we have as you know, a million plus employees globally, so it is going to vary -- what we can do in other countries depends on real

circumstances in those countries. There are reporting processes in those countries, but just, if you look at the U.S. for example, we hope to -- I

don't have a firm figure for you, but we hope to expand that number substantially to a point where our employees are getting -- our

asymptomatic employees are being tested regularly across our system.

CHATTERLEY: You are, I believe, the second largest employer in the United States, and I've seen a petition pop up, several thousand people signing it

saying we want paid time off to vote. It is a critically important election as they all are.

Jay, what about that? Can Amazon provide paid time for people to go up and queue? I mean, I've heard cases of four, five, six, seven, eight hours.

People can't afford to take that time off work. Can you do something here?

CARNEY: Well, what we are doing, Julia, is ensuring that all of our employees have all the information they need to find out how to vote and

how to vote most efficiently. One, notwithstanding the efforts in this country to make this difficult as possible, which I think are tragic and

unfortunate, and I oppose strongly.

There has been a great increase in the United States in mail-in balloting, in early voting, which means you don't have to wait until Election Day to

stand in line. You can go early, you can go at times that work for you. So, there are only about six states in the country where that is not possible,

out of 50 and what we have said to our employees is, if you can't find a way to vote, otherwise, we will work with you to ensure that you have the

time off you need to vote.

CHATTERLEY: Walmart, Starbucks, Twitter have all announced they will give workers some additional paid time off. I know they don't have as many

employees as you, but does Amazon look bad in this situation, not providing the support?

CARNEY: We are doing -- well, we are providing support and we are working with our employees. If they are in a circumstance where they need time off

to vote, we're making that happen.

CHATTERLEY: Okay. Case by case basis. Jay, great to have you with us. Thank you so much as always. Jay Carney there, Senior Vice President at

Amazon. Thank you.

All right, after the break, Senator Ted Cruz holds the CEO of Twitter to the flame. Just watch this.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R-TX): Mr. Dorsey, who the [bleep] elected you?

(END VIDEO CLIP)

CHATTERLEY: Raised temperatures in the debate about policing content on the web. Dorsey's defense after the break.

(COMMERCIAL BREAK)

[09:51:30]

CHATTERLEY: Readers of comments on social media know the discussion usually flies off topic. Well, that pretty much sums up Wednesday's Big

Tech hearing in the Senate. The hearing was supposed to be about changing a law: offering the legal protection in content moderation.

Donie O'Sullivan joins me now. Talk to me about defense. Did they stay on subject?

DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Hey, Julia. Yes, I don't want to say I told you so, but I told you so.

CHATTERLEY: You can, my friend.

O'SULLIVAN: This hearing coming six days before the election was always going to be a bit of a mess. I mean, it was about a really important

fundamental law to the internet and how people communicate online, but of course, it really was just hijacked on a sort of a partisan issue. There

were some interesting aspects of it.

I mean, Senator Ted Cruz, who did do a lot of grandstanding and really tried to make, I guess, a name for himself yesterday, as it comes to all of

this, did push Twitter CEO, Jack Dorsey, on his company's temporarily blocking of an unsubstantiated story from "The New York Post" about Hunter

Biden, Joe Biden's son.

And then he also asked a sort of interesting question. He pointed out to Dorsey that Twitter does label misinformation about the election from

President Trump and from anybody. Cruz asked if you're labeling this sort of information, if you are making judgment calls on this, why aren't you

also removing or fact checking people who deny the Holocaust happened, people who pushed that ridiculous conspiracy theory and Dorsey didn't

really have a good answer for that.

I think it was sort of emblematic of the slippery slope that these platforms find themselves and why they so desperately don't want to get

into the fact checking business because they know once they have started now saying, look, we are going to call out COVID misinformation, we are

going to call out election misinformation, questions will come, very good questions, too, in terms of why aren't they taking action on other

ridiculous, and sometimes, dangerous misinformation.

So there were some interesting parts of it, but for the most part, it was very, very political yesterday which is a shame, really, because these

senators have an opportunity that most of us don't have: the opportunity to hold these executives to account and ask them questions directly -- Julia.

CHATTERLEY: The problem is, they let politics get in the way. And if you are going to remove the liability issue, you have to give them rules over

what can be allowed and what can't be, quite frankly, so it opens Pandora's Box.

Donie, you and I both have both spoken to Matthew Benassi. He was on our show yesterday. He is a victim of a conspiracy theory related to COVID and

faced death threats. This is what he had to say to us yesterday.

(BEGIN VIDEO CLIP)

MATTHEW BENASSI, BASELESS CONSPIRACY THEORY VICTIM: If social media companies can't be good stewards and they refuse to take action when

victims let them know about it, then we as victims should be able to hold those companies liable for the content that's on their platforms.

(END VIDEO CLIP)

CHATTERLEY: The victims should be able to hold them accountable. I tweeted that interview out, and Matthew has got 29 Twitter followers and then I

looked at George Webb, one of the conspiracy theorists, so-called that was spreading this information and he has got tens of thousands.

The most subjective voices have the loudest and furthest reach and that's part of the problem, too.

O'SULLIVAN: Yes, I mean, look, we spend a lot of time talking about how all of social media and these platforms do, however it plays out in terms

of context, but you know, somebody like Matt Benassi there, whose family has been a victim of a totally baseless conspiracy theory that has led

their family to get death threats, these are sort of real victims of the social media platforms.

[09:55:26]

O'SULLIVAN: And, you know, Matt, as he mentioned there was reporting videos that were harassing his family, mentioning his family over and over

again to these social media platforms and YouTube for the most part, didn't do a lot about it until one, CNN contacted them, and even after that,

YouTube left off a lot of these videos until a U.S. Senator read our story and contacted them.

So that's the sort of levels, that if you're just a regular person who finds yourself the victim of a cyber-harassment campaign, unless a major

media outlet picks this up, picks up your story or a U.S. Senator, you're really up against it with these platforms.

CHATTERLEY: Yes, you are. David and Goliath. Something has to change. Donie O'Sullivan, great job on that. Promoting victim's voices.

O'SULLIVAN: Thanks.

CHATTERLEY: All right, that's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe. We'll see you tomorrow.

(COMMERCIAL BREAK)

[10:00:00]

END