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Quest Means Business
Salesforce, Honeywell &Amgen to Join Dow 30; E-Commerce Giant Ant Group Files For IPO In H.K. And Shanghai; Spain Carries Out Mass COVID-19 Testing as Cases Rise; KPMG: CEOs' Concerns Changing in Wake of COVID-19. Aired 3-4p ET
Aired August 25, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:56]
ZAIN ASHER, CNN INTERNATIONAL HOST: All right. Another day, another record for U.S. stocks. The NASDAQ and the S&P 500 are both at all-time highs.
Those are the markets, and these are the reasons why.
The world's biggest carrier, American Airlines says it plans to cut 19,000 jobs if it doesn't get Federal help.
And the opening night of the Republican National Convention paints a picture of economic prosperity under Donald Trump, and chaos under a Biden
administration.
And CNN gets an inside look into China's race for a coronavirus vaccine.
It is Tuesday, August 25th. I'm Zain Asher, in for my colleague, Richard Quest and this is QUEST MEANS BUSINESS.
Tonight, as U.S. President Donald Trump and his party paint a picture of economic strength at the Republican National Convention, the United States
biggest airlines reveals it is preparing to layoff tens of thousands of workers.
American Airlines says it needs to reduce its workforce by at least 40,000 because of the pandemic, 19,000 of those employees will be laid off or
involuntary furloughed starting October 1st. That is unless there is an extension of Federal help.
CNN's Pete Muntean is in Washington for us with a lot more on this announcement.
So, Pete, what does this tell us about the state of U.S. airlines and what sort of trouble they are in?
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Zain, this really shows that it is a grim forecast of what the fall could be and how bad it could be for
major American airlines.
American Airlines is saying in this new letter that it sent to its employees that it could really need a rallying cry for another extension of
the CARES Act come October 1st, that is when restrictions expires.
Remember that airlines received about $50 billion from the Federal government back in the spring. Now, CEO, Doug Parker is saying that this is
the toughest message he has had to deliver over the pandemic.
He says that the airline will have to shed 19,000 employees, either through furloughs or layoffs come October 1st, that on top of more than 20,000
employees who have already taken early outs or early retirements, meaning that the airline will have to shed more than 40,000 people come this fall.
The world's largest airline about to get one third smaller. But CEO, Doug Parker really taking this a step further is saying that Congress needs to
pass another extension of the CARES Act, a clean extension to protect these jobs and the airline into 2021.
He says, one, the CARES Act was crafted back in March. It was thought that the airlines would reach the demand of what it once was a year ago by
October that is not what they have seen, and he says that Congress can course correct on this.
Congress is still trying to figure out exactly what will be in a new stimulus plan, but the help cannot come soon enough for airlines. It says
that as the virus began to surge across the country around July 4th, demand for travel began to taper off.
We know from T.S.A. data, the number of people passing through security at America's airports is still only about 30 percent of what it was a year ago
-- Zain.
ASHER: So airlines have a long way to go. So, in the meantime, until there is a vaccine, Pete, what is going to happen? Is this is the U.S. government
going to continue to prop up or expected to prop up airlines? Or will there be a reckoning in terms of mass layoffs industry wide?
MUNTEAN: Well, we are already seeing the repercussions of some of the smaller airlines, Express Jet, one of them, a regional airline that supply
smaller routes for United Airlines is laying off all of its employees come September 30th. So, we will see more and more of this.
Airlines have already begun warning employees of impending furloughs. But this is most easily the most starkest message of the pandemic from an
airline saying that it will have to shed about a third of its work force come the end of these CARES Act restrictions.
So, we will see if the Federal government steps up once more.
ASHER: Pete Muntean live for us. Thank you so much.
While many U.S. businesses are struggling, the R.N.C. stuck to a message of prosperity under Mr. Trump on Monday at the Republican National Convention.
[15:05:10]
ASHER: The President has always made economic leadership a central part of his political identity and that was on full display in the promotional
videos by former officials, and the President's son.
(BEGIN VIDEO CLIP)
ANNOUNCER: While others criticize without solutions, President Trump's swift action saved lives, and as leading Democrats want to keep businesses
closed down, our President is leading the way for a full economic recovery.
NIKKI HALEY, FORMER U.S. AMBASSADOR TO THE UNITED NATIONS: They want to ban fracking and kill millions of jobs. They want massive tax hikes on
working families.
Joe Biden and the socialist left would be a disaster for our economy.
DONALD TRUMP, JR., EXECUTIVE VICE PRESIDENT, TRUMP ORGANIZATIONS: Trump's policies have been like rocket fuel to the economy and especially to the
middle class.
Biden has promised to take that money back out of our pocket and keep it in the swamp.
(BEGIN VIDEO CLIP)
ASHER: Ryan Nobles joins us live now from the White House. So, Ryan, there was a lot of fear mongering I think we can both agree on day one of the
Republican National Convention.
Just tell me, what is at stake for Republicans as we look to the rest of the week, do you think?
RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Well, Zain, I think the big message here, it really plays in well to the segment you just had with Pete
before, and it is really about the anxiety over the American economy.
Up until the coronavirus pandemic hit, President Trump's clear advantage over Joe Biden or any of the Democrats that had emerged from the Democratic
primary was the fact that he had presided over such a successful U.S. economy, and the coronavirus essentially rolled back all the gains that the
American economy had seen over the first three years of President Trump's tutelage.
So now the question is, do Americans trust Donald Trump to be the person in charge if and when the coronavirus pandemic ever gets in the rearview
mirror? And that's the argument that they are essentially making?
That's what you heard in that montage of clips that you played there, that President Trump built the American economy to the greatest that it has ever
been once and he can do it again.
Now Democrats would counter that, you know, the President was really kind of building off the recovery that the Obama administration had instilled
over his eight years, and that, perhaps, their version of it isn't quite as rosy as the Republicans would lead you to believe.
But, still, that's the argument on the table right now, Zain, that if you are someone that's enjoyed record gains in your 401(k), if you have had
advancement in your own personal wealth, you can't risk Joe Biden taking over, regardless of the pandemic.
The question is whether or not Americans are going to believe that argument -- Zain.
ASHER: And a lot of last night, Ryan, was red meat for the base. You know, speakers like the President's son, Donald Trump, Jr., and others, Kimberly
Guilfoyle, as well.
Obviously, they need to expand beyond the base somewhat. Did they succeed in doing that at all last night, do you think?
NOBLES: Well, you saw kind two of sides of this argument by the Trump campaign. Yes, they certainly spent a lot of time kind of ginning up their
base, right, going after, you know, Americans that are concerned about what they see, the violence that has come out of the protests across the country
because of racial inequality, unfair policing in some of these cities. They definitely played into that.
But they tried to counter-balance it by presenting some of the most prominent voice of color in the Republican Party, and there aren't many of
them, but sending out a former United States Ambassador to the U.N., Nikki Haley, who is of course of Indian decent and Senator Tim Scott from South
Carolina who is the only African-American Republican in the United States Senate.
That was a way to show that from the Republican perspective that these are policies that can help every single American. So there was certainly an
effort to kind of make that outreach to that certain sect of Americans, but when you compare to it the Democratic Convention which had so much
diversity each and every night. It is a pretty stark contrast.
And then the other problem they have, Zain, is every time the Republicans attempt to try to do that outreach to a broad demographic base, you still
end up with President Trump, who always retreats back to inflaming his base. That is his number one go-to, and he is a part of this convention
each and every night.
ASHER: Ryan Nobles, live for us there. Thank you so much.
All right. So night two will feature a few big name speakers including First Lady, Melania Trump; two of the President's adult children, and the
parents from Jerusalem by Secretary of State, Mike Pompeo.
CNN political commentator, S.E. Cupp joins us live now from Connecticut.
So, thank you so much for being with us. So, one interesting point that Senator Tim Scott made was he said, do not look at what candidates have
said about what they have done.
[15:10:05]
ASHER: Based on Donald Trump's handling of the pandemic, did the Republicans at all do a good job of explaining last night why the
electorate should give him another four years?
S.E. CUPP, CNN POLITICAL COMMENTATOR: Well, they did repeat a lot that Donald Trump has saved a lot of lives, and they trotted out some anecdotal
guests who you know, have thanked him and said that he did help save their life or the life of someone they knew.
But they did not share the strategy for going forward how Trump will continue to deal with this problem that has yet to be controlled in this
country.
It seemed as if they wanted to just will it to be the case that this problem has been solved and Donald Trump is the reason why.
I don't think a lot of people who watched that would feel very relieved unless they were in his base and just believed sort the rhetoric that is
constantly coming out of the Trump administration, whether it is true or not.
ASHER: The whole sort of, you know, fear mongering, we promise that you that the world is going to end midnight November 3rd if you elect Joe Biden
-- I mean, beyond appealing to his base, will that actually succeed in working to appeal to people beyond his base, moderates, independents,
undecided voters? What are your thoughts?
CUPP: Yes. I mean the rhetoric was apocalyptic. Charlie Kirk, I believe said that this election is a choice between preserving a way of life and
the end of everything that you love.
I mean, those are really high stakes. A bit dramatic.
But, listen, fear is a terrific political motivator, and the Democrats, to be fair, did some fear mongering of their own about the high stakes of
allowing Trump to have another four years. So, yes, I do believe fear is why Trump won in 2016 to begin with. They are banking on that fear again
and you see them ratcheting it is up.
And I think that's really from a position of weakness. If you you've actually made America great again over the past four years and everyone is
as great as Republicans portrayed on night one of the R.N.C., well, then you would have a much more optimistic message.
And instead, they are relying on this fear to say, no, no, no, no, we're not there yet. We need four more years to get this agenda solidified.
ASHER: I did think however that Senator Tim Scott actually did a better job of really delivering a speech that had a softer tone.
One thing that he said was, "You may be asking yourself, how does a poor black kid run and win in a race crowded with Republicans, and the answer is
the evolution of the southern heart."
And then, he talked about the fact that -- I mean, he listed a number of gaffes when it came to race that Joe Biden had made. Do you think that, at
least, Senator Tim Scott did a good job of reaching out to minority voters?
CUPP: He did. I think, the way he described it was his family went and cotton to Congress. I mean, it is a really powerful story. I remember
thinking as I watched it, if only this were the face of the Republican Party, I think the party and the country would be in a much different
place.
I am also reminded, today is the second anniversary of the death of Senator John McCain. And I knew John McCain. I was at his funeral.
I was at the R.N.C. that nominated John McCain in 2008. And just to think about where the party is today versus where it was then, what it looks
like, what it talks about. The principles that supposedly drive it. It is just so jarring and disorienting.
And for Republicans and conservatives like me who are now supporting Joe Biden, this is why, because what happened on that stage last night and what
is likely to happen the next three nights just does to the speak for us anymore. It is not the Republican Party that we knew. It's a shame.
ASHER: You speak about Senator John McCain, and that's somebody who clearly, regardless of what your political viewpoint is, I mean, he
displayed a lot of courage and certainly strength of character.
Tonight, Donald Trump has a significant number of family members speaking. He has got Melania Trump, his wife. He has got Tiffany Trump, his daughter;
Eric Trump, his son, as well.
So, I am assuming that if yesterday was all about red meat for the base, tonight is going to be let's tell but Donald Trump, the man, his character.
What are they actually going to say about his character that's going to appeal to a broad swathe of voters?
CUPP: You know, based on what they said in 2016, I thought the kids were helpful. Usually family members are, right, in humanizing a person who you
might, you know, see in a different light through their voices.
But the bottom line, Zain, is, it doesn't matter. This is the Trump show and it doesn't matter if you have the last name. There is only one Trump
that matters on stage and it's Donald Trump.
[15:15:10]
CUPP: And reportedly, he's going to be making a number of appearances tonight throughout the program. He will figure prominently once again. He's
really the only speaker that matters.
So whatever Tiffany and Eric say, and Melania say, I mean, it's almost irrelevant, not because they are not good advocates for their husband and
dad. It's just such a singular showcase for one guy.
ASHER: All right, S.E. Cupp live for us there. Thank you so much. We will be watching tonight.
And speaking of which, we are full speed ahead into round two of the convention. CNN's special coverage gets going 8:00 tonight, Tuesday in New
York. That's 1:00 a.m. if you are watching Wednesday morning in London, all you political night owls, and 4:00 a.m. if you happen to be in the UAE.
Still ahead, trial and trial again. CNN goes inside a lab racing to find a vaccine against COVID-19. That's next.
(COMMERCIAL BREAK)
ASHER: The COVID vaccine under development by Oxford University and AstraZeneca could go through regulators by the end of the year. The head of
the Oxford vaccine group says that that timeline depends on collecting enough data during Phase 3 clinical trials.
The Trump administration is reportedly considering fast tracking the vaccine ahead of the U.S. election.
And a frantic search to find a vaccine is of course a global one. More than a dozen companies in China are on the case, including SinoVac, which says
it is in late stage trials. David Culver visited the lab to get a firsthand look.
(BEGIN VIDEOTAPE)
DAVID CULVER, CNN CORRESPONDENT (voice over): You feel hopeful just looking at the packaging and small vials. Might this vaccine bring us back
to our lives before coronavirus? The Chinese company behind it believes it might.
(BEGIN VIDEO CLIP)
HELEN YANG, INVESTOR RELATIONS, SINOVAC BIOTECH: SinoVac's goal is to provide a vaccine with good quality, good safety, and good immunogenicity
to the people in the world.
(END VIDEO CLIP)
CULVER (voice over): SinoVac is among 13 companies in China working on a COVID-19 vaccine. It is one of just nine that are well into clinical
trials.
The biotech company began developing its vaccine in late January. Construction on this, their newest facility in Beijing, started about two
months later.
CULVER (on camera): One of the things we noticed walking in here is that this space is brand-new. It's not even been used. They started building it
in March, and they did that for two reasons.
One, for regulatory reasons here in China. They need a separate space to produce this vaccine, and the other is because of the demand. They need the
production space to meet it.
[15:20:16]
CULVER (voice over): While its borders remain largely sealed off, life within China has returned to near normal in most places. So much so that
Wuhan has hosted crowded pool parties and in Beijing, no longer are you required to wear a face mask when outside, assuming you're a safe distance
from others. China credits mass testing and strict contact tracing.
But health experts warn those stringent measures impact immunity levels.
(BEGIN VIDEO CLIP)
DR. IVAN HUNG, PROFESSOR, MEDICAL FACULTY, UNIVERSITY OF HONG KONG: In these cases, then, definitely, the way forward is to -- is vaccination.
(END VIDEO CLIP)
CULVER (voice over): In the past two months, the Chinese government has granted two vaccine companies special emergency approval to launch their
vaccines.
Typically, a vaccine takes years to go through trials and reach production.
(BEGIN VIDEO CLIP)
CULVER (on camera): Do you feel confident enough to take the vaccine?
YANG: Yes. I do. Because the vaccine road map we are using is demonstrated and proved technology.
(END VIDEO CLIP)
CULVER (voice over): They estimate they will be able to produce about 300 million vaccines a year. That's why they believe the more vaccines in the
marketplace, the better.
(BEGIN VIDEO CLIP)
YANG: Yes, I think the competition is more like we compete with the virus, right? Our speed should be faster than the transmitting of the virus
instead of competing with others. We like everyone to be successful.
(END VIDEO CLIP)
CULVER (voice over): China has faced sharp criticism from many countries, most notably the U.S., for its initial handling of the outbreak, but some
nations might be willing to look past all of that if China can deliver the solution with a dose of hope.
(END VIDEOTAPE)
CULVER: It was interesting stepping into what is a biotech facility and yet at the same time a construction site. It shows you how quickly things
are having to evolve here where they are even trying to build the infrastructure along with trying to come up with a vaccine.
So you've got folks in lab coats walking past people in hard hats. It is a little bit uneasy at times when you think about how quickly they are moving
with this.
But, as the folk at SinoVac tell me, they do not have the luxury of time.
David Culver, CNN, Beijing.
(END VIDEOTAPE)
ASHER: This time 24 hours ago, we were bringing you news of the first proven reinfection of the coronavirus, and now, we are actually hearing of
two more cases reported in Belgium and the Netherlands.
The first case was in Hong Kong and to clarify exactly what we are talking about, true reinfection requires genetic testing in each instance to see if
the virus differs slightly, which reports say it did in all of three of these patients.
Dr. Tom Frieden is the former director of the U.S. Centers for Disease Control and Prevention and is now President and CEO of Resolve to Save
Lives.
Dr. Frieden, thank you for being with us. So, when you think about these cases of reinfection, the case in Hong Kong, Belgium and the Netherlands,
do you think that these represent an anomaly? Perhaps outliers? Or is it part of a worrying trend? What are your thoughts?
DR. TOM FRIEDEN, FORMER DIRECTOR OF C.D.C.: We are learning more about immunity and about the virus every single day. It is not surprising that
you see some waning of immunity, especially after mild infections, and we are going to have to learn more.
One thing we understand is that you can be PCR positive, but not have the virus that you can grow from your nasal passages many months later.
That's different from true reinfection, which means you are infected with one strain, and then months later with another. There is still so much to
learn, and I think the bottom line here is that we -- it does look like there is some immunity for some people for some time, and that's good news
for the potential of a vaccine.
But we are going to have to go one step at a time, not cut any corners on safety, and figure out what works so we can get back towards the new normal
as quickly as possible.
ASHER: So, if there is, as you say, immunity for some people for some time, what are those factors depend on? I mean, if somebody is going to be
immune from the virus to a certain extent after having been infected in the first place, what does the length of immunity actually depend on?
FRIEDEN: We really don't know yet. On the one hand, there is one type of antibody called neutralizing antibodies, and those seem to correlate with
protection.
There was a fascinating study, very well done. A fishing boat went out, 120 people on it, three people had neutralizing antibodies. Two of them
definitely did not get infected whereas almost everyone else did.
The third person had very low levels of PCR positivity, not clear if that was persistent infection or a low grade reinfection, but that probably
wouldn't be associated with infectivity or illness.
Still, so much we don't know. But bottom line here, vaccination is likely going to be possible. But we are going to have to learn about it one step
at a time and not cut any corners on safety.
[15:25:11]
ASHER: So vaccination is going to be possible. Will it likely mean that once you have had the vaccine, you will need a booster or is it going to be
like the flu shot where you simply have to get a coronavirus vaccine every single year?
FRIEDEN: We have no idea at this point. Some of the vaccines are single dose, some are two doses three or four weeks apart. Some are lower dose or
higher dose. There are very many different types of vaccines being tried, and I think that's important because some are almost certainly going to
work better than others.
And we have to be careful because immunity is not all good. Sometimes our immune response makes us sick if it overreacts. That's what make some
people with severe COVID very, very ill and that's why the medication dexamethasone, which weakens the immune system appears to help some people
in all likelihood.
That could happen after vaccination or after infection post vaccination. So that is something that we will need to learn, but I am hopeful, we will
have a vaccine or multiple vaccines in the coming months then it is a question of making sure that we prove it works, prove it is safe, make it
in sufficient quantities.
Get people to trust it and get it out there so that people can benefit from it.
ASHER: Prove it works, make it safe, and get people to trust it. As you know, there has been talk in the United States about potentially the
administration expediting the AstraZeneca vaccine to have it in time before the election.
Dr. Fauci has come out and said you know, he would highly recommend against that. What are the consequences of skipping or rushing through the Phase 3
part of the clinical trials?
FRIEDEN: We need science, not politics. What happened over the weekend with convalescent plasma is not reassuring. You had a headline and you had
statistical statements that were not valid. They were not scientifically justified.
Now, plasma therapy may be helpful, but we don't know which patients it is helpful for, which plasma is most helpful, how we can optimize it. We need
to learn that so we can protect people as long as possible.
And if that's a dress rehearsal for what we are going to see with an unproven vaccine, I am really concerned about what that will do to our
ability to gain people's trust not only in the COVID vaccine, but in all vaccines, because vaccines are a great benefit to people everywhere, but we
have to maintain that trust.
ASHER: Dr. Tom Frieden, live for us there. Thank you so much.
The White House says it is making progress with China on the Phase 1 Trade Deal, but you could be forgiven for thinking otherwise watching the
Republican National Convention.
We have more on that dynamic next.
(COMMERCIAL BREAK)
ZAIN ASHER, CNN INTERNATIONAL HOST: Hello, everyone, I'm Zain Asher. There's more QUEST MEANS BUSINESS in a moment when tech is in and energy is
out. The shake up for the Dow Jones Index points to a broader shift in the American economy. And work from home could be here to stay. KPMG survey
says that four in five CEOs are considering downsizing their office space. We'll hear from the company's chief executive. Before that, though these
are the headlines at this hour.
Hurricane Laura is churning in towards the U.S. Gulf Coast as a category 1 storm, prompting mandatory evacuations, the hundreds of thousands of
residents along the Texas and Louisiana coastline. Laura is likely to become in major category 3 storm before making landfall early Thursday.
U.S. Secretary of State Mike Pompeo has responded to the suspected poisoning of the Kremlin's most outspoken critic after days of the White
House being largely silent on the matter. Pompeo says the United States supports the E.U.'s call for thorough investigation if reports of poisoning
proved accurate. Alexei Novalny remains in a coma at a German Hospital, where he was taken after fallen ill last week. And the World Health
Organization says that polio has been eradicated in Africa. The announcement follows four years without any cases reported on the
continent. WHO calls this a historic success. It says the poliovirus is now only found in Afghanistan and Pakistan.
The Dow 30 is getting a massive membership shake up. ExxonMobil, Pfizer and Raytheon are getting booted out while Salesforce, Amgen, and Honeywell are
moving in. The changes are meant to offset apples four for one stock split, which goes into effect August 31st. All this means the Dow is saying
goodbye to its oldest continual member, Exxon has been on the index since 1928. Although at time it was called Standard Oil of New Jersey. Its
departure leaves the Dow with just one energy company, Chevron. Meantime, the list of tech companies is growing. Matt Egan joins us live now from
Haworth, New Jersey. Matt, thank you so much for being with us. Just walk us through why this is taking place after Apple's stock split.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Well, Zain, this is the biggest makeover to the Dow since 2013. And as you alluded to, it is being driven
in part by some of these shifts in the economy. It's no secret that we rely on technology more so today than even just a few years ago. I mean, imagine
how bad this pandemic recession would be if it weren't for the technology services that we rely on from companies like Amazon and Apple and Zoom. And
so, the committee that runs the Dow, they wanted to get more influence from technology. So, they added software giant, Salesforce.
But the other big factor is that stock split by Apple, the four for one stock split. Now, we know that that is largely a cosmetic change. But we've
got to remember, the Dow is a price-weighted index. It's not based on how big companies are, but how expensive their share price is. And so, if they
hadn't taken any action, Apple's shrinking share price actually would have meant that tech played a smaller role in the Dow.
And what's interesting, Zain, is that after all of these moves, the most influential stock in the Dow won't be the $2 trillion Apple, it won't be
the $1.6 trillion Microsoft, it's actually going to be a healthcare company, United Health, which is smaller than all those companies, but
it'll have the highest stock price at about $300 apiece. It's another reminder, Zain, of the quirky structure of the world's most-followed stock
market index.
[15:34:58]
ASHER: And it's so interesting because we're seeing this shift in power on the Dow, if you will, between energy companies and tech companies.
ExxonMobil was the most valuable company in the world back in 2013. And now, it's not even on the Dow anymore, partly because oil played a much
bigger role in the economy 30, 40, 50 years ago than it does now. Just walk us through the shifting landscape between energy and tech on the Dow.
EGAN: Well, the decline of ExxonMobil is really, really staggering. This is a company that has lost $267 billion in market value in just the last six
years. To give you some context, that is the market value of McDonald's and Boeing combined. That's how much value they've lost. And as you mentioned,
part of that is because oil prices are muted right now. They even went briefly negative in the United States earlier this year, which was pretty
wild. While tech is thriving during the pandemic, energy most definitely is not. ExxonMobil is losing money as are other oil companies.
But, you know, these are -- some of these issues are Exxon specific. When you take a step back and look at what they've done over the last decade or
so, they've made some strategic blunders. A decade ago, they went out and acquired XTO Energy, a natural gas company for $41 billion. That turned out
to be a deal that was done at the top of the market. Natural gas prices have never rebounded, they spent a lot of money on ventures in Russia and
Canada that never really panned out. And they were late to the U.S. shale boom, even though it took place in their own backyard. And so, for all
these reasons, we're seeing Exxon come out of the Dow, technology come in.
But, Zain, I think one last point is Exxon and all of the big oil companies, they have a climate change problem. Investors would much rather
be betting on companies that are viewed as the solution like Tesla than on fossil fuels. And that is not a problem that is going away anytime soon for
Exxon
ASHER: Matt Egan live for us there. Thank you so much.
EGAN: Thank you, Zain.
ASHER: China's top mobile payments firm has filed for what could be the world's biggest IPO. Alibaba spin off and group plans to list its shares in
Shanghai and Hong Kong. CNN's Selina Wang looks at the numbers.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: Ant Group the FinTech arm of e-commerce giant Alibaba has filed for an initial public offering in Hong
Kong and on Shanghai's NASDAQ-style Star Market. In its more than 600-page preliminary prospectus, the company did redact key information, it did not
disclose the size or the timetable of the offering. But according to reports from Reuters and the Financial Times, the offering could be raising
$30 billion at a $200-billion valuation. That would make it the world's largest IPO, surpassing Saudi Aramco's last year. It would also make it
more valuable than some of America's largest banks.
This would also be the first simultaneous listing in Hong Kong and on the Star Market. This is a major win for both of those listing venues,
especially at a time of rising U.S.-China tensions, as well as growing calls for financial decoupling between the U.S. and China from the Trump
administration. For some context here, Ant is China's largest, most dominant mobile payments company, but it's also much more than that. It
also offers online banking services, insurance as well as lending.
And I want to point out some key metrics, as well, from this prospectus. Revenue for the first half of the year was $10.5 billion, up 40 percent
from a year earlier. Its payments volumes were worth around $17 trillion last year. App-based payments are far more ubiquitous in China than in the
West. Partly because at the time when internet services were taking off in China, there was relatively low penetration of credit card use. That gave a
window for app-based payments to really take off.
I also want to underscore that in China in addition to Ant Group's Alipay, Tencent's WeChat. These are the two possibly most dominant, most important
apps for consumers in China. Alipay reaches more than 1 billion consumers in China. Selina Wang, CNN, Hong Kong.
(END VIDEOTAPE)
ASHER: Cases of COVID-19 are spiking in parts of Spain, and the public is lining up behind new government measures to stop a second wave. We'll have
all that and more after the break.
(COMMERCIAL BREAK)
[15:40:00]
ASHER: Spain's Prime Minister is calling on the military to help address the country's troubling rise in coronavirus cases. On Tuesday, he said
2,000 troops will be available to help with contact tracing in local hotspots. Atika Shubert reports from Madrid where a massive testing effort
is underway.
(BEGIN VIDEOTAPE)
ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Temperature check, hands cleaned, mouth swabbed. Next, this is the new frontline against
COVID-19 in the Spanish capital. The (INAUDIBLE) neighborhood in Madrid has one of the highest rates of COVID-19 infections anywhere in Spain. It's now
part of a campaign to test as many as 6,000 randomly selected people, along with hundreds more volunteers lining up for free PCR tests.
Madrid's Deputy health Secretary says he wants to get an epidemiological snapshot of how the virus is spreading.
ANTONIO ZAPATERO, MADRID DEPUTY HEALTH SECRETARY: The main reason for doing this is that these are the areas in Madrid that had a greater incidence of
cases, of new cases. We also know that the incidence is getting bigger in ages between 15 and 49 years.
SHUBERT: The latest data shows COVID-19 cases and Spain are now much younger at an average age of 38, with as many as 60 percent of cases
exhibiting little or no symptoms. That may be why hospitalizations and deaths are still low, despite the rising number of infections. But it's
scary enough that Marco Mollica (PH), the father of three teenagers came on his own to get tested.
MARCUS MALAGA, VOLUNTEERING FOR COVID-19 TEST: So, I decided and volunteer because I'm quite afraid about the COVID. So, I don't know for -- about the
situation.
SHUBERT: Now, this testing is moving like clockwork. They are processing hundreds of people in just a few hours. And when they come out, volunteers
will get this. It's a QR code that they're able to scan, and this is where they will get their results in 48 hours.
As we film, lab technician sweep passed with another batch of fresh samples bound for analysis at a diagnostic lab. This is what test results across
Spain show so far. An alarming rise in cases similar to the peak of the pandemic.
EDOUARD MATHIEU, DATA MANAGER, OUR WORLD IN DATA: It's this kind of like U- shape which is quite worrying. In some countries are just like at the beginning of the sort of second bow of the U, but for France and Spain,
that U is almost complete. And that's kind of what worries us, and it's happened extremely quickly.
SHUBERT: Nobody wants to return to this. Hospitals so crowded, patients sleep on the floor. A group of Spanish doctors and epidemiologists have
urged the government to invest more now into detecting cases, tracing contacts, and isolating regional outbreaks before it is too late.
MANUEL FRANCO, EPIDEMIOLOGIST: We need to have better data than we had before. We need to have a tracing capacity that we haven't had so far, and
we're going to need it for many months, if not, years. And the sooner we get this in place, the better.
[15:45:13]
SHUBERT: Back at the clinic, Marcus Malaga is so happy with his experience. He called his entire family over to get tested, so they can visit the
grandparents over the weekend.
ANA MANUELA MALAGA, VOLUNTEERING FOR COVID-19 TEST: We want to make sure that we don't have the virus and then visit them.
MALAGA: We are especially afraid about the grandparents because they are old.
SHUBERT: Echoing the hopes and fears of many here, in Spain. Atika Shubert, CNN, Madrid.
(END VIDEOTAPE)
ASHER: Still ahead, back to the boardroom or back to the drawing board, what corporate executives are saying about the future of workspaces.
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ASHER: As summer heads into fall, workers are preparing to return to Wall Street. JPMorgan Chase says it will follow a hybrid plan in which employees
rotate in and out of the office. Across the board, CEOs say that concerns have changed since the start of the pandemic, according to a global survey
by KPMG. Executives say that talent risk is the biggest threat to growth, 69 percent also plan to downsize their office space as well. And 71 percent
want to accelerate the flight -- the fight against climate change.
Bill Thomas is Global Chairman and CEO of KPMG International. He joins us live now from Toronto, via Skype. So, Bill, thank you so much for being
with us. So, CEOs right now are saying that talent risk is their biggest threat in terms of challenges that have occurred since the pandemic. What
do they mean by that?
BILL THOMAS, GLOBAL CHAIRMAN AND CEO, KPMG INTERNATIONAL (via Skype): Well, I think it's been fascinating, Zain, you know, we did the survey in January
and talent was number 11, as an identified risk. And by the time we got to July, it was number one. And I -- and it's not surprising, I think, when
you think about, you know, how --
[15:50:03]
THOMAS: Retaining talent, sort of, getting the most out of talent in terms of the productivity, the health and wellbeing of your teams and not just
physical health, but your mental and emotional wellbeing as well. That's number one on the priority list for the CEOs that we surveyed.
ASHER: And also, beyond mental health issues that may arise out of isolation because of the pandemic, which is hugely important. There is also
the question of how do you groom and nurture talent, in terms of promotions, et cetera, without that face to face interaction as well?
THOMAS: Yes, I think that's a really important topic. And one, I think that certainly, all the conversations that I'm having in the survey that we had,
it is high on the agenda. And you saw that in, you know, are we going to stay working like we are today. And I think the fact of the matter is, is
we're not going to go back exactly to the way it was. But I don't think either we are certainly going to stay, sort of, like consistent with today,
I think you're going to end up in a hybrid model.
And that has a very big reason why, is because of that need to, you know, to interact with each other, collaborate, innovate, and frankly, for
people's mental and physical wellbeing.
ASHER: So, there is obviously a need to interact. And as you mentioned, you know, we will probably see a hybrid model, but in the meantime, in the
short term, what is the future of the office space in a pandemic?
THOMAS: Well, look, I think around the world, certainly, I think people are experimenting right now with what does that look like going back to the
office, people are going back, some people are going back in, you know, in intervals, whether it's whole teams going back for a whole week and other
teams for the next week. So, I think there is a role to be played here by an office environment after the reasons we've described. But as far as the
long-term implications, I think people are still trying to figure that out.
ASHER: And so, is working from home, since you mentioned, you know, different sort of different parts of the world and different, you know,
different levels of success with all of this, is working from home working better in some parts of the world than others?
THOMAS: You know, I think, certainly, what we've -- what we've heard is, people are surprised by the success and the ability for organizations to
move, and that -- and that very much has been dependent on digitization and the digital investments that companies have made. But there's no doubt that
depending upon the business that you're in, or in some environments, the country that you're in, it has been more successful than others. And I
think we just have to work through that.
ASHER: And since you touched on digitization, what sort of digital changes are companies investing in right now?
THOMAS: Well, the -- I think the obvious digital investments have been around how to connect to people, how to get the most out of people, how to
try and collaborate in a way that is, you know, that's virtual as opposed to in person, for all the reasons that we -- that we touched on. But the
other thing, frankly saying, that you're seeing is the incredible efforts that digital technologies are you -- are being used to help with a pandemic
itself, whether that's cashless payments, you know, remote medical advice, whether that's, you know, virtual working as I described.
I mean, there's all sorts of different aspects that people are telling us. They're using digital investments for to cope with what we're all going
through.
ASHER: And, you know, given that a lot of companies are bleeding money right now in the middle of pandemic, partly because people might not be
leaving their house, they're not shopping as often, that sort of thing. What are companies and what are CEOs saying about their belief in the
resilience of their individual companies and also the resilience of the American economy?
THOMAS: Yes, you know, it is interesting. The closer you get to home, the more comfortable and the more confident they are. So, in our survey, you
know, if you asked people about the global economy, about a third of them had confidence in the global economy and from a growth perspective. If you
look at the local country, it was even better still. So, about 50 percent.
And by the time you got to their own prospects for growth, CEOs that we surveyed were most sort of optimistic. And so, that age old adage of you
know, everybody's got a challenge, but we don't have our part of that challenge. You know, that's playing out a little bit here as well.
ASHER: Yes, interesting that people were optimistic, especially when you think about what's happening in the economy right now. Bill Thomas, CEO of
KPMG International, we have to leave it there. Thank you so much.
THOMAS: Thank you.
ASHER: All right.
THOMAS: Thank you very much.
ASHER: Last few minutes of trade on Wall Street, just about five minutes to go. The Dow Jones actually fell today, while the S&P 500 -- SP 100 and the
NASDAQ set fresh all-time highs.
[15:55:10]
There's quite a lot of red on the Dow 30. Most of the stocks there in the red, including a rare loss for Apple lately. They're closing in on their
four for one stock split next week, which will reshuffle the names in this index. So, it will look very, very different very soon. In the three firms
getting the boot, Pfizer, Raytheon and Exxon Mobil are all trailing the average day in the green. We have Microsoft followed by United Health Group
and Visa. All right. That is QUEST MEANS BUSINESS. I'm Zain Asher in New York. The news continues right here on CNN.
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