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Quest Means Business
E.U. Officials: Hungary Barring Some E.U. Citizens Is Illegal; U.K. Defends Controversial Candidate For Trade Envoy; U.K. Defends Courting Former Australian PM For Trade Role; Niagara Falls Steps Up Local Staycation Campaign; Wall Street Tumbles From Record Highs; Airbnb To IPO Before The Year Is Out; Biden In Kenosha Two Days After Trump Visit. Aired 3-4p ET
Aired September 03, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BRIANNA KEILAR, CNN HOST: Sara, thank you. Our special coverage continues now with Brooke Baldwin.
[15:00:06]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: In fact, it's me. QUEST MEANS BUSINESS and what a day we've got for you today.
If we take a look at the markets and how they have traded. Everything went into reverse today.
The Dow is off over three percent, a fall of nearly a thousand -- it could be a thousand points before we are finished. The triple stack shows it is
broad base, in fact, tech is worse than Dow.
Tech and NASDAQ is off five percent. There are some serious questions to be asked tonight in which we look at the markets. So, the Big Tech and Big
Markets have fallen back.
We need to understand why. Why has that happened on a random Thursday in September? The cost of the coronavirus grows larger for Uncle Sam.
The U.S. debt will rise to more than a hundred percent of GDP.
And my exclusive interview with the Airbnb chief executive on the pandemic, the IPO and on becoming his very own verb.
We are live from New York on Thursday. It is September the 3rd. I'm Richard Quest and I mean business.
Good evening. Well, the wheels sort of wobbled, if they haven't fully come off the wagon. It begs the question happened today? Why on this random
Thursday in September did the markets, which have seen such good gains in recent days and weeks suddenly go into reverse?
Perhaps that was the reason why they suddenly went in the opposite direction. The NASDAQ off five percent, the biggest points lost since
March. For the Dow and the S&P, worst day since June. And it's tech shares that are dropping sharply.
Recent winners like Apple, Amazon, Facebook, Tesla, even Zoom are well and truly being clobbered today. As we look at these numbers, bring in Art
Hogan, Chief Market Strategy with National Securities from Nantucket.
Art, what happened that certainly turned a market that was extremely bullish in the opposite direction?
ART HOGAN, CHIEF MARKET STRATEGY, NATIONAL SECURITIES: Now, Richard, I think you set that up perfectly. I think if you look at some of the things
that happened coming into September, they were earth-shatteringly large.
I mean, so the month of September, the best month that we have seen for the S&P, the NASDAQ and the Dow in 20 years. Just the mere fact that Apple and
Tesla could announce a split and see their stocks go up 30 and 50 percent after announcing a split showed you that there is some irrational
exuberance in place right now.
So the market has been inadvertently higher and technically got very overbought. Coming into this morning, the RSI for the S&P 500, the large
cap index was at the 80 points and 50 is normal, 70 is overbought, so, 80 was very, very overbought.
The NASDAQ 100 was hitting 30 percent above its 200-day moving average, which is the highest it has ever been.
So we just went too far too fast. We needed a day of reckoning. Sometimes these overbought scenarios work themselves out over time. This one just
happened to do it in a day.
QUEST: Was there a catalyst? Did I miss something that happened that sort of fired the gun and the trigger?
HOGAN: No, as a matter of fact, if you look at most of the things we pay attention to today, the weekly jobless claims, pretty much in line. I think
there is a lot of people talking about seasonal adjustments, but it came in lower than expected, lower than a million, so probably, we are going to do
upfront.
The ISM Services was a little light of expectations, but not enough to really pay attention to.
In other words, I don't think anybody missed a headline that really sent us cascading lower. I think what we missed was how much bullish sentiment had
increased over the course of the month of August. How technically overbought we had gotten and how positioning -- when you think about how
people are positioned in this market, just how few short positions were out there on a net basis, so there's no underlying bid for a day like today
that would actually find those dip buyers.
So when that happen and the momentum shifts, it starts moving in the other direction, you have to wait a couple of days for things to kind of settle
out.
QUEST: You see, now that's where I am going next with this question, because it is obviously a long weekend coming up, a bank holiday for Labor
Day.
So, as this plays out, do you think we are seeing -- don't worry I am not going to ask if we seeing the end of a bull market or anything like that.
Instead, do you think we are seeing the beginning of a series of correction? Are we beginning a corrective process here? Or are we just
having a bit of froth off the top?
[15:05:13]
HOGAN: I think it is a little of both. I think we need a bit of a corrective process. We really haven't had much correction since the month
of June. It was the last time we saw a significant pullback in the sort of three percent to five percent category and those are normal.
We have been uni-directionally higher since then, and I certainly think about the history of September, it is not great for markets, but if you
think about the potential head winds, whether it is U.S. and China, and a technology Cold War or the elections.
There are plenty of reasons to be concerned. I think this is a healthy pullback. I don't think it is the ends of anything.
QUEST: And finally, the actual economic situation is not good in the United States. I mean, it is better than elsewhere, but the fundamentals
are not that strong at the moment. Therefore, as you look between now, the election and the end of the year, we should expect volatility.
HOGAN: We should expect a lot of volatility, and I would argue that the sequential improvement we have seen in economic data since the March
timeframe when this started to go bad has been pretty consistently good, and I think that probably flattens out for a bit of time because we have to
sort of figure into that that slow reopening process that we had with the second wave of virus that we saw in the south and southwest.
So, I think we are going to have bumpy economic data in the month of September and the month of October. I think that's going to cause some
volatility in this market and certainly throw the election in there and the fact that we are not get along with the second largest economy in the
world.
And that's probably a good reason for volatility. I still think we are in a long term bull market, but I expect a bumpy road on the way through the end
of this election cycle.
QUEST: Art Hogan with me there as the Chief Market Strategist -- as the market strategist looking at it from a market point of view, Diane Swonk is
with me as well, Chief Economist at Grant Thornton. Diane Swonk is here to talk about the same set of facts from an economic point of view.
Let me go through these facts. Having heard the market view, the economics. We have got initial U.S. jobless. Their claims dipping below one million,
and that's the first time that's happened since August.
At the same time, you have the U.S. Federal debt to exceed value of GDP. All right, that's happened in Italy and that's happened in Japan. It is 200
percent, et cetera et cetera, but it is the first time in the U.S. to have 100 percent of GDP plus, since World War II.
So, Diane Swonk, the economics of this hiccup that we are seeing today, how do you rate it?
DIANE SWONK, CHIEF ECONOMIST, GRANT THORNTON: I actually think what we are seeing is a real slowdown in momentum. We saw it in the Fed's Beige Book.
We saw very little good optimism in the Beige Book, in fact a lot of pessimism.
A lot of companies that thought they would already back to opening up and working from downtown areas are not. Work from home is still the standard
more than the non-standard and the uncertainty about when companies will be able to go back to work, and work in downtown areas which support a whole
periphery of services is still yet unknown. I think that's very important as well.
We have also seen this month, the divergence in CEO versus consumer confidence. CEOs saying they are the most confident since January, but they
are the most confident because -- and the reason consumers are less confident -- they feel they can deal with any secondary downdraft or
weakness related to COVID by cutting jobs or cutting investment.
That's not good news to consumers which took it on the chin if they are unemployed. They lost those extra supplemental benefits in the month of
August, and we are also seeing those -- there was a glitch in how we look at those initial unemployment claims.
Actually, there was a catch up in special pandemic unemployment claims that pushed the numbers up on a week to week basis and the seasonally adjusted
numbers just aren't comparable.
So we are still really in a deep hole, with momentum slowing.
QUEST: The numbers -- what are you looking for? Strip out the second quarter and the third quarter bounce back. When we look to Q4 and Q1 in
'21, what seems to be the average GDP growth -- the normal GDP growth we should look for post pandemic?
SWONK: Well, one of the things we are really concerned about is actually that the fourth quarter will be quite weak after a very robust bounce back
in the second and the third quarter, and that's because of these head winds.
Without the virus -- with it still at a high infection rate and winter coming around, that means that restaurants that have moved to dining
outside can't do that and much of the celebrations that we usually see and the activity we usually see during the holiday season, Halloween is the
second largest holiday here in the States, for retailers that's not going to happen.
And so that could cause a secondary pullback and even a stumble. Nonetheless, no matter how you cut it, it will be a head wind short of a
full-blown vaccine, and even a full-blown vaccine we are being cautioned about how low the uptake is likely to be.
And the faster we try to push it, the more people are leery about taking a vaccine as well.
[15:10:28]
QUEST: A lot of people are getting their economics these days from us, obviously and from yourself, and also from places like TikTok. This one
came to my attention during the week.
It's Austin Hankwitz who has quite a lot of followers. Now, I want you to listen to what he says, and the reason we are doing it today is because he
sort of suggests the market is getting ready for a tumble.
But listen to what he says and we will talk about his pulling together of the facts and whether you think there is something in all of this. Have a
listen.
(BEGIN VIDEO CLIP)
AUSTIN HANKWITZ, TIKTOK TRADER: Evidence that the stock market is currently overvalued. Reason number one: the U.S. total market cap is 182
percent of the U.S. GDP. The last time this metric was this high was right before the tech bubble burst in 2000 of 142 percent.
Reason number two: the Federal Reserve is the biggest investment in the stock market with total holdings of $4.8 trillion in almost 23,000
different securities.
Reason number three: tech stocks are beginning to really extend past their fair value.
Reason number four: Twenty one percent of small business owners report that they will have to close their doors if current economic conditions do not
improve over the next six months. That's a lot of unemployment.
(END VIDEO CLIP)
QUEST: I listened to the whole thing. It is a bit longer. But individually, his points make sense. Collectively, it left me thinking he
has a point that we are looking at a very shaky recovery and market.
SWONK: We are looking at a shaky recovery overall, and I think the markets are starting to wake up to that and as we get into the reality of, there is
a disconnect between markets. Markets are more concentrated in long tech than the overall U.S. economy is.
And let's face it, many of the companies that are no longer in business anymore never were listed on the stock market, so there is going to be a
natural disconnect with that.
That said, I do think that markets have been overly confident about our ability to reopen and stay reopened regardless of what lockdowns are.
Behavior, we know consumer behavior and fear play a huge role. Having a hot virus at high level of infection rates keeps people away from going to
congregate in ways that we do as a human species.
Everything from going out to restaurants to going to bars to going to large venues. All that can't be done in this kind of environment with a virus
that spreads most viciously inside places with air-conditioning or heat where the air is recirculated. These are really important things to
understand as we go into the fall months.
And we also have no additional aid by Congress. So without that, state and local governments are going to be making draconian cuts in the weeks and
months to come. We know from the previous Great Recession recovery, from the Great Recession that state and local government cuts into that
recession and the recovery were one of the biggest head winds to having a stronger employment recovery. So we are not learning our lessons from the
past.
On the deficit issues, we have a good reason to have high debt right now, so that we don't have no economy to have revenues from going forward. And
unfortunately, Congress has missed that lesson as well.
QUEST: All right. Diane Swonk, thank you for joining us. Much appreciated. Thank you.
As we continue tonight, from Hoover, Xerox, I am old enough to remember that as a noun. Google, well, we are all doing Googling now, it is a
special honor when your company, which is a noun, becomes its very own verb.
For Airbnb, it just the start of the very next chapter as they look to IPO before the year is out. My exclusive interview with the Chief Executive of
Airbnb after the break.
(COMMERCIAL BREAK)
[15:16:36]
QUEST: Okay, now we shouldn't get too excited by one day's fall, I realize that. But after this fall comes following so many days of record-breaking
gains, it is worth noting and that's what we are doing. If you look at the markets, the NASDAQ, the S&P and the Dow all taking a heavy tumble today
and it is a large one, when for seemingly no reason. There was nothing that particularly happened today.
The Dow is off the best part of a thousand. The techs are routed. It is the worst day since June with Apple down eight percent, Zoom is off nearly 11
percent. I know, context is everything. Zoom has been up something like 40 percent yesterday alone, so it is froth off the top.
You may wonder why in the midst of these very strange markets, Airbnb is still planning to go public. It is still planning to IPO and just filed
confidential papers and expects to go public before the end of the year.
The Chief Executive joined me a short while ago and told that if Airbnb can face a pandemic and all of those problems, then it can face everything else
that is likely to come its way during an IPO.
For Airbnb, a turbulent 12 months. For example, in March, the pandemic hit hard. The travel industry which we forget, it is very much part of was
upended with a wave of cancellations and problems in details.
In May, the continued cash burn led to 25 percent of the company being laid off. Then in August a global band on house parties -- because those house
parties were turning into super spreader events.
Brian Chesky is the CEO of Airbnb. In an exclusive interview, he joined me, and I wanted to know how Airbnb was performing in the midst of what is
happening now.
(BEGIN VIDEOTAPE)
BRIAN CHESKY, CEO, AIRBNB: When we started Airbnb, it was pretty hard. I never quite thought 12 years later we would do anything that was quite as
hard as starting Airbnb. But it turns out running a travel company in the middle of a pandemic that loses 80 percent of its revenue in a couple of
months and doing it all remotely via Zoom is quite difficult.
We had to manage other stakeholders. We had to restructure the company. But something pretty remarkable started to happen.
That's that, you know, people are still yearning to travel, but they are traveling differently than they used to. They are not crossing borders.
They are not traveling for business.
But what they are doing is they are getting in a car and they are going 200 or 300 miles to nearby destinations and they are staying in homes, and this
has been that's really huge and welcome surprise for Airbnb and I think for the industry more broadly.
QUEST: The travel industry is being absolutely destroyed at the moment and you are a part of that industry. If you look at destinations -- I had the
Greek Tourism Minister on the program yesterday talking about the difficulties. We have had airlines every day talking about the
difficulties, yourself talking about the difficulties.
What do you all need? Take off your -- put on your industry -- because you are such a fundamental part now of the travel and tourism industry, what
sort of industry-wide mechanisms are now needed to help promote and keep growth going?
[15:20:08]
CHESKY: Well, it really depends on where you are. Let me just say a couple of thing. United States, France, United Kingdom, Germany, these are
countries that have very strong tourism right now because they have domestic markets.
Parts like Greece where travel is more of an import, people aren't crossing borders, so what we need is there's really a tale of two travel economies.
Countries where people travel within the country, and those are actually doing pretty well, and then countries or even states like the United
States, like Hawaii where they are not doing as well because people are afraid to cross borders.
So what we need is we need ways for people to feel comfortable getting on airplanes and feel comfortable crossing borders. If that doesn't happen,
then you're going to have some winners, which are big domestic economies and you're going to have losers which are basically going to be people that
require tourism as an import and that's going to be very important.
QUEST: Thank you. Let's talk about Airbnb, the company, now. Did you -- you filed for an IPO, which was likely to happen before the end of the
year. Haven't you got enough on your plate, Brian?
CHESKY: I was looking for a side project.
QUEST: Why on earth would you choose that? Even today, the NASDAQ is down five percent, which shows the volatility. Now, why would you choose now to
embark on something as difficult and volatile as an IPO?
CHESKY: Well, you know, there is only so much I can say because you know we are in a quiet period. But I can tell you this, when we started this
year, we were planning on going public. Then the pandemic hit and it seemed inconceivable that this company would go public.
But I will say is that, the business is so much more resilient than I think any of us gave ourselves credit for. So we filed. We are going to be ready.
We are not committing what that timeline looks like, but when the market is ready for us, we will be ready.
QUEST: Did you give Bill Ackman's SPAC idea more than five minutes of thought?
CHESKY: I, unfortunately -- again, being in a quiet period can't talk much about these conversations.
QUEST: No, but you can tell me about are you ready for the volatility?
CHESKY: Absolutely.
QUEST: The tech volatility that comes with being in the market?
CHESKY: I mean, listen, I am not sure anything about being a public company CEO or being public will be as crazy as running a travel company
that requires cross border travel in a pandemic and managing all of that via Zoom.
So will it be hard to be a public company? Of course. Will it be like what we've done in the last six months? I doubt it will be and that's the advice
that I have gotten from many public company CEOs who have gone through this and in public companies, they said, you know, we are living through the
largest crisis of our lifetime, and if you can manage through that, I think you can manage through a lot.
QUEST: The competition is strong as well. The competition is growing. How difficult is it to come up with new ideas and stay ahead of -- you invented
this. And now everybody wants to eat your lunch, breakfast, dinner, and petit fours.
CHESKY: Yes, well, I like all of those meals. You know, I think when you create a category, you know, it is going to -- people are going to want to
be a part of that category.
And listen, I -- if you would have told me 10 years ago that big companies want to eat our lunch, no one wanted to even sit with us at lunch 10 years
ago. Okay, they said this idea was totally crazy.
So the fact that someone wants to sit at my lunch table and try to eat our lunch, well at least, they are sitting at the table. That's a lot farther
than I ever thought it would be 10 years ago or 12 years when we were starting the company in our apartment.
I mean, listen, Richard, this is also a company that -- Airbnb is a noun and a verb in pop culture. And I bet you, people watching just asked
themselves do they know somebody staying in an Airbnb right now? They probably do. And they might be probably using it for a use case that didn't
even exist three or four months ago.
QUEST: I love the fact that -- that was going to be my last point. How does it feel -- how does it feel -- starting a company that has become a
noun and a verb? I am just going to Airbnb. No, I am not staying in a hotel, I am just going to Airbnb it.
CHESKY: I feel really lucky. When I remember telling somebody about Airbnb the first week we started it, this person looks at me and he said, "Brian."
I said, "Yes." He said, "I hope that's not the only idea you are working on."
So I am used to and we are used to people thinking that this is kind of a crazy idea, but you know what? It is a crazy idea that worked because it
turns out that strangers living together is not so crazy after all if you create a system of trust to make people feel comfortable. It turns out that
people do want to live around the world, and I think hopefully, Richard what you will see is this is just the beginning.
(END VIDEOTAPE)
[15:25:01]
QUEST: Brian Chesky, refreshing to hear a CEO talk in such blunt terms and such an interesting terms to be frank.
Joe Biden is bringing a message of healing to Kenosha in Wisconsin. It is a community event that the former Vice President and Democratic nominee is
going for.
Listen to what he said -- his visit -- he has been to a prayer setting and been to a church. His visit is in stark contrast to Donald Trump's. The
President didn't even mention the black man who was shot seven times in the back by police. This is Joe Biden.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), DEMOCRATIC PRESIDENTIAL NOMINEE: Think of what has happened. Think of all the people. Who are all of those people? You have
got over 6,000 young "DREAMers" quote-unquote, DREAMers, you know the Hispanic community who in fact are on the frontlines dealing with COVID.
You have all of those folks working the supermarket stacking the shelves making $5.00, $6.00, $7.00 an hour, in fact, they are mostly minorities,
African-Americans, Latinos.
People are beginning to figure out who we are as a country. This is not who we are. This is not who we are. So, the first point I want to make to you
all is, I am not pessimistic.
I am optimistic about the opportunity if we seize it. I am going to respond to what each of you had to say.
(END VIDEO CLIP)
QUEST: Arlette Saenz is with me in Kenosha. By going there and drawing attention to this, you know, I see the purpose, obviously, but it takes the
fight to Donald Trump's territory, doesn't it?
ARLETTE SAENZ, CNN POLITICAL CORRESPONDENT: That's something that Joe Biden has really tried to highlight throughout the course of this campaign.
He launched his campaign in part because of those clashes that were seen in Charlottesville, and he was upset with the way that President Trump
responded to that, calling it -- saying that there were very fine people on both sides.
So he has raised questions about President Trump's character and his handling of the country, the divisiveness that he believes that President
Donald Trump has sown from the start his campaign and that's something that you also heard him talk about that on Monday in Pittsburgh when he himself
condemned violence on all sides and accused President Trump of stoking some of the violence that has been seen in this country.
Now, right now, as you saw inside that church, Joe Biden is kind of diving into listening mode. This is something that we also saw him do after the
death of George Floyd. He met with community back in his home State of Delaware.
He is meeting with community leaders here today trying to hear their concerns. And ahead of the trip, he said that he was here to offer a
message of healing, trying to bring together this city as they are grappling with that police shooting and the protests that came after it.
And from the start of Biden's campaign, he has tried to present himself as this unifying figure, and part of his goal here today is stressing that he
can bring that unity to the country.
QUEST: All right. Okay. So with the -- with Joe Biden and his message of this is not who we are and Donald Trump's message that we are going to hear
repeatedly over the next eight or nine weeks that basically, do you want -- if you don't reelect me, you will have violence on the streets. Where does
Biden's campaign go now? What do they do next?
SAENZ: Well, what you have seen Joe Biden do this week is kind of this balancing act. He addressed the violence. He condemned the violence trying
to push back on the suggestions from President Trump that he would be soft on crime or that Americans won't be safe under his presidency if he were to
become President.
Biden has argued that actually, all of this has occurred under President Trump's watch; that Americans right now are not safe under President Trump,
as you are seeing these protests play out, as you are looking at the coronavirus pandemic.
We have also seen Biden this week trying to turn the focus to coronavirus. Yesterday, he held an event talking about how he believes the President has
failed when it comes to school reopenings and the coronavirus.
Tomorrow, he is expected to deliver remarks about the President's handling of the economy in the middle of coronavirus.
So I think that what we are going to see from Biden and his campaign is this balancing act, trying to push back against the President's message of
law and order that he is trying to make the centerpiece of this campaign.
But also trying to bring the attention back to the coronavirus, which they believe that the President has ethically failed on and that is really what
they have centered much of their campaign on throughout the summer and likely heading into the fall election.
QUEST: Arlette -- Arlette Saenz is with us from Kenosha in Wisconsin. Thank you.
Now QUEST MEANS BUSINESS continues tonight. Hungary is trying to pick and choose which E.U. citizens it's going to allow to cross its borders in
September as a result of COVID.
The E.U. says you cannot do that. We will talk to one of the commissioners after the break.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in just a moment. We'll be talking about Hungary, where the country is trying to pick
and choose which E.U. citizens is going to be allowed to cross the border. E.U. Home Affairs Commissioner is going to be with me in a moment. Britain
is looking to pick the former Australian Prime Minister Tony Abbott as a trade envoy that's causing consternation and controversy. Those stories
will follow in a moment after. Of course, this is CNN, and on this network, the news always comes first.
As you seeing, the U.S. Democratic Presidential Nominee Joe Biden is in Kenosha in Wisconsin, addressing the community event and stressing healing
in the wake of the police shooting of a black man late last month. Earlier, he met the family of that man, Jacob Blake.
Officials in several U.S. states are reminding voters it is illegal to cast to ballots after President Trump appeared to suggest exactly doing that in
North Carolina. Mr. Trump said it will be a test of whether election fraud would be caught. The White House has tried to walk back the comments saying
the President does not condone unlawful voting.
Facebook says it will not accept new political ads on the platform in the week leading up to the U.S. Presidential Election. The move is in response
to concerns misinformation on the site could interfere with the vote. Facebook will also flag candidate posts claiming victory before official
results are published.
Rescue workers in Beirut in Lebanon are searching for possible blasts of either still trapped into the bubble under the rubble one month ago. A
search dog first alerted workers to the find, thermal devices then detected the outlines of two bodies lying together. The rescuer says at least one of
them appears to be still breathing.
And a big market sell-off is underway. The Dow briefly fell below 1,000 points. It's still 1,020 now. Tech stocks are off five percent. Markets had
been at record highs.
[15:35:41]
The European Union is showing problems of course, when it comes to COVID. The new COVID -- the level of new cases rises quite sharply in some places.
Countries like Hungary have taken their own action and have stopped and restricted travel to Hungary from other European countries except in
certain cases.
Now, the European Center for Disease Prevention says the number of new cases is almost back to the level that we saw in March. Parts of Europe are
seeing migrant crossings at record levels on Sundays and stretched finances mean E.U. members are at odds of how to divide the responsibilities.
Now, some E.U. officials are saying what one member, Hungary, is acting illegally in closing its border due to what Hungary says are virus fears.
You know, the Ylva Johansson is the E.U. Home Affairs Commissioner joins me from Brussels.
Commissioner, thank you. This is really straightforward. Hungary is trying to say that either Czechs, Polish, and these few other countries can cross
the border, everybody else can't. That is against Freedom of Movement. They must have known that when they made that declaration. What are you going to
do about it?
YLVA JOHANSSON, HOME AFFAIRS COMMISSIONER, E.U.: Yes. Freedom of Movement is a fundamental principle, and of course, also the equal treatment for
people, irrespective of their nationality inside European Union. And that's why I call the Hungarian minister directly after this and we had a very
frank talk two days ago. And I was not 100 percent convinced with his answers. So, we also written a letter and look forward to swift written
reply.
It's important, of course, that all member states apply to these fundamental principles. Even when we have these difficult times with the
COVID pandemic.
QUEST: I don't wish to be disrespectful but Viktor Orban is hardly going to be upset by a letter from the commission. The country is already facing an
article seven proceedings which seems to be going nowhere. I mean, he knew, the minister knew that alignment Czechs, Polish, and a few others in was
against the rules, and they floated it. So, what sanctions can you use?
JOHANSSON: Let me put it like this. When we started with this pandemic, we had a lot of member states taking a lot of actions that was not
appropriate. But they have all applied to the recommendations that we put in place and the coordination that the Commission has been taking.
And I really think that this will also be the case with Hungary in this situation. And we are now preparing for new proposal, hopefully, tomorrow
that will also help citizens to be aware of how they can travel and what kind of coding they should have for different kind of regions in Europe.
But what we can see now is that the pandemic has shifted a bit in some member states. And many member states actually we see a rise in infection
rate again. But now it's more local or regional. It's not all over the whole member states. And that also calls for the kind of measures than
those with that we saw earlier in March and April.
QUEST: The ability of countries to restrict movement from goes against, of course, the treaties. But, you know, we've seen this over the summer, the
Germany -- Germans will suddenly say you have to quarantine for two weeks here. The French will say you've got to quarantine there. I know for
myself, Commissioner, trying to organize filming trips within Europe, it's very difficult. Does the E.U. need to speak with one voice?
JOHANSSON: Yes, perfectly right. And that's why the current government are preparing now for new proposals for tomorrow so that all citizens, all
residents, all businesses should know what kind of a color as a specific region, what kind of criteria base for that color, and that this could not
change frequently so that it can be -- they can predict when there might be a shift in that kind of categorizing of a specific region.
We don't want the kaleidoscope of different kind of measures and different kind of definitions. And that's why we're putting forward new proposals.
[15:40:24]
QUEST: Commissioner, thank you for joining us. I do appreciate it. Thank you. You got your work cut out for you particularly on the Hungary
question. Thank you, ma'am. Now, as we continue tonight, Downing Street is under fire for speaking to a controversial trade envoy candidate. Let's
face it. When one country talks about employing the former prime minister of another to advance their cause, you know, something is going on. We'll
talk about it after the break.
(COMMERCIAL BREAK)
QUEST: The British government is defending its decision to appoint the former Australian Prime Minister Tony Abbott as a trade envoy to join a
panel of trade experts advising the British government in its post-Brexit strategy. Now, the opposition leaders in London say Abbott's past
discriminatory comments, some say misogynistic and homophobic, should disqualify him.
When pushed by Sky News earlier, the U.K. health secretary said he wasn't bothered.
(BEGIN VIDEO CLIP)
MATT HANCOCK, BRITISH HEALTH SECRETARY: And as the former Prime Minister of Australia, obviously, Mr. Abbott has got a huge amount of experience.
UNIDENTIFIED FEMALE: Even if it's a homophobic misogynist?
HANCOCK: Well, I think that is -- I don't think that's true. I don't -- I haven't seen --
UNIDENTIFIED FEMALE: I just told you what he said. I'm sure you don't support some of his comments. He's a homophobe and he's a misogynist.
HANCOCK: Well, he's also an expert in trade.
(END VIDEO CLIP)
QUEST: Nic Robertson is with me, International Diplomatic Editor. It's not funny, but it is, in a sense as you couldn't make this up. They appoint a
former prime minister of another country, who is one of the most controversial prime ministers that country, Australia, has ever had.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, and perhaps that was just the -- you know, the Conservative Party right now is desperate to
get a trade deal with Australia and others when it leaves the European Union, and then negotiations on that for Brexit which have deadlines coming
up real soon, a couple of months, not looking good. So, there's a level of pressure there.
[15:45:07]
I think in fairness to Hancock to play my role as diplomatic editor, if you will, Hancock had been out during the media circuit early in the day
pushing, you know, his health agenda and the new half a million tests a day the government wants to try to achieve for Coronavirus.
So, you know, has a comment sound a little bit like someone's speaking what is pushed at the end of a very long day. But the reality is, and it's not
just in London, you've had Nicola Sturgeon, First Minister of Scotland saying, look, you cannot separate out trade from the values and respect of
the country. She called him also, you know, misogynist, sexist, they're climate change denier. And that's what we've heard from the deputy leader
of the Labour Party as well as the leader of the Labour Party saying is not the man for the job.
So yes, the government really seems to have walked into this. They're in -- the government, is having a very tough time, U-turns, criticisms over his
handling of COVID, and this just seems that add to the weight of things that they may have completely misjudged and may have to do another U-turn.
Although, Greg Hands, the trade minister said no decision yet had been taken on Abbott.
QUEST: Just since we have a second, Brexit, they still intend to enter the transitional agreement at the end of the year, even though there's no deal
in place and it looks very unlikely that there will be a deal in place and the Prime Minister boxed himself in.
ROBERTSON: Yes, and you know, listening -- you know, Tony Abbott today was appearing with -- in front of the Foreign Affairs Committee, listening
today as I did to the Home Affairs Committee about, for example, immigration. Britain had the biggest influx of migrants crossing, the
channel from France in any single day yesterday, over 400.
They were admitting, officials were admitting in that meeting that when Brexit happens without a deal at the end of the year, the government is
going to be even more hamstrung in stopping the migrants and indeed sending them back at every level. You have Michel Barnier, the EU's chief
negotiator, had informal talks with his British counterpart at the beginning of the week saying the British position doesn't seem to be
shifting.
They seem to be wanting to, you know, hold out on the fisheries issue with Europe for the gain of other things that the position hasn't changed. This
won't stand. And he is definitely talking down the possibilities of getting something through by the end of October. At the end of October because it's
going to take that long, two months, to ratify the decision if it's made.
Yes, this government is staring down a double-barrel shotgun right now, COVID in one chamber and Brexit in the other, and none of it looks good.
QUEST: Nic Robertson, plenty that for us to digest. Thank you, sir. Nic Robinson joining us. We will take profitable -- we'll take a break and then
we'll be profitable moment later. That much, I promise you. All of it because the markets are down very sharply today and the wind has changed.
We need to understand if it's permanent.
[15:50:00]
(COMMERCIAL BREAK)
QUEST: Niagara Falls, without doubt, one of the world's most famous waterfalls are now looking to boost tourism by appealing to New Yorkers for
a staycation. Why not visit the oldest national park, America's oldest national park -- state park, I beg your pardon? It's in your own backyard.
Now, interestingly, it sits on the U.S.-Canadian border. That remains closed because of the pandemic. John Percy is president and CEO of
Destination Niagara USA. He joins me from Niagara Falls via Skype. And so, staycations go low, but -- and we know travelers don't want to get on
planes, what's your best argument for visiting you?
Can you hear me, John Percy?
JOHN PERCY, PRESIDENT AND CEO, DESTINATION NIAGARA USA: I can, Mr. Quest. I truly --
QUEST: Oh, there you are. There you are. Good. What -- so tell me about this idea to appeal to New Yorkers to come on a staycation, to come and
visit Niagara Falls.
PERCY: Well, and thank you for your ambassadorship for tourism. You've always been a big proponent of tourism around the world. And we thank you
for all that you do for New York City and New York State. Niagara Falls USA, you know, appeals to a world audience, of course, but in this time of
sheltering and quarantining, and everything else involved in this pandemic, we are targeting an audience that's close to home, is six to eight hours,
and that, of course, includes New York State.
So, you know, we do want New Yorkers for New York. I think New Yorkers have truly experienced this pandemic from the onslaught in its highest form,
being the epicenter, and I think we're strong and resilient. And so, it's easy to invite them to come. And I think it's nice -- many New Yorkers may
travel elsewhere if it was in a normal time, but not, and so we can now capture those guests that might be able to come in and check Niagara Falls
USA off their bucket list.
QUEST: And of course, one of the issues has always been excited the falls one visits and all those sorts of things. And can you -- can you cope with
a larger number of visitors and do so safely?
PERCY: Very much. We've instituted a program called unified and safety asking our partners across the lines here of hotels and restaurant tours
and attractions and everything to really make a solid in full commitment to health and safety. That's first and foremost in our visitors' minds when
they are choosing a destination to go visit right now, that health and safety is first and foremost.
And so, we want to ensure that the guidelines that are being set that we're following them, again, to ensure that the guest that does arrive feels very
comfortable. We have a lot of what -- our campaign right now is called Wide Open Spaces now open for adventure. And so, Niagara Falls USA and our
county, very rural, very beautiful. And we really do have a lot of wide- open space for people to enjoy outdoor activities during this time.
QUEST: John, thank you. I appreciate it. Beautiful parts of the world. Absolutely glorious and grateful that you came on today to talk to us now.
Thank you. Now, before we leave you, and we have a profitable moment, let's take a look at the markets because it has been an extraordinary day, one
way or another. And for some reason, the market fell sharply this morning.
The market was down the best part of -- it's been down over 1,000 points. This is of course a swift turnaround having gone across 29,000 yesterday.
It's a sell-off in full force. Look at the Dow. I want to show you the Dow 30, and you'll see the way in which it breaks out amongst the stocks.
[15:55:00]
Go to the bottom of the chart. You know it's a bad day when Verizon is the best performing stock, because that's the one that's your utility type. But
Apple down seven, Microsoft off six, even Home Depot, Honeywell, they're all off quite sharply. And that's the latest, but they've all had good
gains perhaps. It's just a bit of rebalancing. Matt Egan is with me, Matt. Well, what do you make of it?
MATT EGAN, CNN BUSINESS SENIOR WRITER: Well, Richard, this was long overdue. All summer, there were signs that this really epic rally in the
Stock Market was unsustainable. I mean, think about where we are. We're at a point right now where Apple is worth more than all 2,000 stocks and the
Russell 2000. Tesla's market valuation was equal to that of Citi and JP Morgan combined. DraftKings worth $14 billion. I mean, clearly euphoria had
taken over.
So, I actually think it's easier to understand why the market has taken a pause. It's an easy argument to make that that was actually the rational
thing here than for the market to keep going straight up. So, clearly, we've seen investors, they've taken some chips off the table. They're
selling some of the Big State Home winners.
You look at stocks, like Zoom, and Peloton, DocuSign, et CIE, they're all getting crushed today. And that's because these have been some of the big
winners. But Richard, what is so telling is even though those four stocks have all sold off very sharply today, they're all up still more than 100
percent on the year. Zoom is that more than 400 percent. I mean, these are monster gains, and they were never going to last forever, Richard.
QUEST: So, in a word, there will be those looking to say these are the stocks that are growing stocks that what the -- that the volatile ones.
Buying opportunity yet, that's what people are asking. Is this a buying opportunity yet?
EGAN: Betting against this market has been really a very unwise move. On few occasions, with the exception of a daylight today, people have gotten
run over when they bet against the market. But one thing to keep an eye on, Richard, is the VIX volatility index. Some of the market analysts that I've
been talking to, they've been sort of alarmed because normally the VIX goes down when stocks go up. But that relationship is broken down and that
could, Richard, be a signal that some more turmoil could be to come.
QUEST: Matt Egan, the VIX volatility index is never far from my bedtime reading. Thank you, sir.
EGAN: Of course.
QUEST: We'll have a "PROFITABLE MOMENT" -- we'll have a "PROFITABLE MOMENT" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT," we talk about traveling quarantines and all that sort of stuff. Well, I won't be with you tomorrow night on the
program because I'm going to London, where I'm about to start another two- week quarantine. It will be my third quarantine of the crisis so far before going off filming elsewhere in the United Kingdom, and then there'll be
another quarantine when I come back to New York.
So, I'll see you next week. I'll be in the living room in London and very much looking forward to your company. Then, Zain is with you tomorrow
evening for QUEST MEANS BUSINESS. As always, the markets are down today, but it is just one day. Let's not get too excited.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York, shortly to be in London. Whatever you're up to in the hours ahead, I
hope it's profitable. I'll see you on Monday.
END
