Benefit Claims In The United States Continue To Soar; China Dismisses Reports The Pandemic Began In A Lab; The Chief Medical Officer Investigating President Trump's Touted Drug.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know. Five million more. Benefit claims in the United States continue to soar. Coronavirus controversy. China dismisses reports the pandemic began in a lab. And trialing treatments. The chief medical officer investigating President Trump's touted drug. It's Thursday. Let's make a move. A warm welcome to all our FIRST MOVErs across the globe, as always, great to have you with us. It's another day where the data and of course the lives behind that data tell the story. It's telling us that cases of coronavirus may be peaking in the United States and in key parts of Europe even as the economic consequences continue to escalate. President Trump is set to unveil his plans for relaxing U.S. stay-at-home restrictions even as multiple governors and business leaders say testing, testing, and more testing is the key. For now, the latest on the U.S. jobs crisis. A further 5.2 million people filing for first time benefits just in the last week. It was in line with expectations and it was actually less than we saw the week before, but it is still an astounding figure and there is more to come. It suggests that the U.S. is now close to losing all the jobs gained since the Great Recession, and it's happened in the space of a month. And it comes of course, too, as the U.S. program to save small businesses and therefore jobs, the so-called PPP, runs out of money with Congress still unable to agree on fresh funding. U.S. futures are modestly higher at this moment. Stocks fell sharply on Wednesday though after new reports showed historic declines in both U.S. factory activity and consumer spending data and more of the banking giants beefed up their loan loss provisions bracing for a historic number of defaults. Morgan Stanley, the last of the big banks to report today setting aside an additional $400 million worth of cash. That is well over $20 billion for the major four banks this week. Consumer credit crunch. That's what that's telling me. The shares are higher in Europe as you can see as Germany announced it will begin easing lockdown restrictions next week. Over in Asia, stocks were mixed. Investors there I think are waiting the release of China's growth numbers for the first quarter. We're expecting the first decline in recorded history. Let's get right to the drivers because Richard Quest joins us now. Richard, there is so much we can talk about, but I do want to hone in on what we're seeing, the mounting numbers of people filing for first time benefits in the United States. Some may have just been furloughed. Some may have just been fearful. But you can't hide from the fact that 22 million people are in that position and they're in it just in the last four weeks.</s>RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Yes, and the numbers will continue in this sort of trend. I think the important thing of course is not the headline number, which is, you know, frightening and worrying, it is these other numbers, which we're getting business inventories, all the other things that we're talking about, retail sales. Because they will indicate how many of those furloughed will be taken back on again when the economy opens. As you and I said at the very beginning of the week, these other numbers tell us what GDP will look like, what economic activity will look like in the second half of the year, and that is the crucial determinator for how many of this horrific number, 17 million, 18 million people who have lost their jobs, will be reemployed. It is not good, Julia. I can tell you, if you look at the numbers, it suggests that the reopening of the economies will be slow and steady and, Julia, it could be 2022, I'm reading this morning before the unemployment numbers get back to where they were.</s>CHATTERLEY: It's the critical point here because this is purposeful. This is what we're doing in shutting down the economy. It's what we can save and protect in the interim to have jobs and businesses in a position where they can rehire. To your point about 2022, last week we spoke to Jason Furman, former adviser to President Obama, and he said half the furloughed, he hopes, can come back quite quickly, but it could take us five years to get back where we started.</s>QUEST: Yes, yes. That's exactly the scenario that is going to play out. Think about it this way. Companies basically furloughed and laid off staff to shift them on to the government payrolls of unemployment. Immediately some will be re-employed. I would say 30 percent to 60 percent of those people will come back almost immediately because the jobs are still there, the companies are still running. But the rest of them, they are going to have to wait for economic activity to pick up again. It's awful. I hate describing people's livelihoods and people's lives as economic activity. But that's the world and that's the business we're in. They are going to have to wait until economies pick up before demand -- because the last thing companies will do -- I'll leave you with this -- the last thing companies will do will be take on workers that they fear they're not going to be able to keep or pay for.</s>CHATTERLEY: Yes, this is the crux of what we're saying and when we bring it back again to the small businesses, it is not just about the United States. It's about other developed in particular economies, too. The small businesses are the lifeblood, they are half of employment here. If you don't protect them, if you don't get money out to them in the short term, and what we know right now is that the money has all but run out, you're exacerbating the damage that's already being done.</s>QUEST: Yes, and that Small Business Administration, that loan program -- by the way, Julia, that loan program was very poorly constructed. First of all, the money is going to run out. But, secondly, small businesses have to apply for the money now because it might run out, but they don't need it. The reality is, small businesses need that money as working capital when they re-open again and they need that as a bridge until business picks up again. Instead, the Federal government constructed it as an all or nothing now so what's going to happen is companies have taken the loans, they'll burn through the money, they'll then layoff the staff, and then those grants will become loans because the staff have been laid off. It was poorly constructed. It was done in a hurry, and it's not enough money.</s>CHATTERLEY: Yes. It was the best they could do. I have to say though the Small Business Administration, to give them credit, the chief tweeted this morning in less than 14 days, they've processed more than 14 years' worth of loans. That gives you a sense of the scale, the pressure that they were under. But I agree with you, bypassing them would have been the key -- maybe it still is. Richard, thank you so much for that.</s>QUEST: Thank you.</s>CHATTERLEY: Now as U.S. Unemployment claims skyrocket, President Trump will unveil his plan to reopen economy. Multiple governors though say their states are nowhere near that point yet and business leaders say testing for COVID-19 is still inadequate and has to be dramatically increased before people can go back to work. John Harwood joins me from Washington. John, you and I were talking about this yesterday and predicting what that call with business leaders was going to be like, and I think the message was consistent. We need more testing or our people aren't safe. What are we expecting from the President today? Do you think he changes his tune, perhaps, in light of what he is hearing?</s>JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, I think at some point, he is going to have to. I don't know if it will be today. That call was just yesterday and the President has been talking about these guidelines all week. We know as you indicated, governors are ultimately going to make the decision and they're going to make the decision based on public confidence which is based on what public health authorities say we need and what business leaders say we need. They all agree that it's testing and so sooner or later, that issue is going to have to be dealt with whether it is dealt with by governors, in cooperation with the Federal government, or whether it's done by the President of the United States using the Defense Production Act or some other means of ramping up testing. In the meantime, I expect the President is going to be talking about what some of the places with lesser case numbers, the less densely populated states without the big metropolitan areas, things that they might be able to do to ease up and get started again. The problem of course is that most economic activity in the United States is conducted in large metropolitan areas. As a matter of fact, in states governed by Democrats, 24 of the 50 states are home to 58 percent of the economic activity in the United States.</s>HARWOOD: So it is going to be difficult for the President to push this along on the basis of appealing to Republican governors in smaller states because people like Gavin Newsom in California and Andrew Cuomo in New York are ultimately going to be the decision makers.</s>CHATTERLEY: That is such an important point. John, the other point -- and we were just making it, and I was making it there with Richard is getting more funding for the PPP, the Payment Protection Plan. What are we hearing about negotiations between the Democrats and the Republicans? They all -- this had bipartisan support in the beginning and they know more money is needed -- it's just the terms and conditions and what else is required in terms of cash to keep the Democrats happy. Can they agree on this this week?</s>HARWOOD: I think they can. There were talks last night between Speaker Pelosi and Treasury Secretary Mnuchin. Those talks are going to continuing today. I think everyone is committed to getting more money in this program and the fact that it is running out of money already is an indication that however you were talking with Richard about how it was designed, whatever the design issues with the program, there is tremendous appetite for this program. You know, the real question, Julia, as we've talked about in previous settings is, unemployment is now north of 15 percent. We know there is going to be an end point at some point, whether there is vaccine or testing. The question is how much economic damage is incurred between now and the end point and to shorten the end point, we need more testing. I think that the Congress is going to shovel more money out the door to try to sustain some of those businesses so that when we do get to the point we can reopen the economy, businesses are going to be there to employ the workers who are now laid off.</s>CHATTERLEY: Absolutely. They need money now, and at the heart of this is getting on top of the health crisis because we can't do anything without that. John Harwood, thank you so much once again. China dismisses a theory that COVID-19 originated from a Chinese laboratory, saying there is no proof. This comes after multiple sources told CNN that the U.S. government is looking into whether the virus actually came from a lab in Wuhan. David Culver is live in Shanghai with the latest. David, great to have you with us, and the Chinese may be saying, look, there is no truth to this, but quite frankly trust at this moment is in very short supply. What do we know?</s>DAVID CULVER, CNN CORRESPONDENT: There's a lot of skepticism when it comes to how things are being handled here and how they were handled here initially. Now, with regards to the origin of this, we should preface it, Julia, by stating, you know, what most medical experts are saying, and that is it is not believed to have originated in the lab. It is believed to have gone from that animal to human contact and then spread from there -- the initial transition. But what we need to look at is what U.S. officials are investigating as one of many theories. And that is that it originated potentially in a lab in Wuhan. They don't believe it was part of any bioweapon experiment or work and that it likely happened even on accident if that's how it happened. Again, one of many theories they're looking into. As you point out, the Chinese are pushing back against that and they are dismissing it quite quickly. That is coming from the Chinese Foreign Ministry today, and they suggest that they are only focused on the scientific aspect of all this. They're not going to speculate beyond the science in how it started. They of course maintain that it started in a wet market in Wuhan, one that is now shut down. But it is also interesting to note that the same spokesperson, Julia, who was mentioning that they're not going to rely on anything, but science is also an individual who a month ago was tweeting out that it may have been the U.S. Army that brought the virus to Wuhan. So there is a back and forth between the two countries that we see playing out quite strongly. Now, I want to go to the other big story that is really getting a lot of attention here and that has to come from the Associated Press in particular. Now, they have a report that's based on what they characterize as a leaked memo from a confidential teleconference involving the head of China's National Health Commission. CNN has gone through the government's public report of that teleconference, which highlights the worries expressed by health officials to other leaders six days before officials here alerted the public. So here's what we know of what China knew and when. I can show you some timeline graphics. Starting back on December 8th, the Wuhan government notes the first patient symptoms of the then unknown virus. Nearly a month later, on January 3rd, Wuhan health officials stressed there is no obvious human-to-human transmission. On the same day, China notified the U.S. of the virus. Now, on January 7th, President Xi Jinping's first public awareness is made known and he ordered actions to be taken. A week later, on January 14th, going back to the teleconference, the government release says a sober understanding of the situation was made known to top government officials. They added that clustered cases suggest that human-to-human transmission is possible. That was the 14th. Here's the concern. Publicly, as late as January 19th, the Wuhan Health Commission said the outbreak was controllable and preventable, not contagious. The next day a very different narrative, leading health officials acknowledged cases of human-to-human transmission and even stressed that medical personnel had gotten infected. And of course, three days after that, Wuhan goes on lockdown.</s>CULVER: Now, China's Foreign Ministry states that -- in an open and transparent and responsible manner, China has kept the W.H.O. and relevant countries updated on the outbreak but, Julia, you have got to look at the timeline, and the six days in particular may not seem like a lot, but it was six days during what is the largest human migration each year. The Lunar New Year travel when people are coming together and the potential for exposure is massive.</s>CHATTERLEY: Yes. Those days were absolutely critical. Never mind what's happened since.</s>CULVER: Right.</s>CHATTERLEY: David, great work. Thank you so much for that. David Culver there. Now, the U.K. government is set to extend its lockdown curbs by weeks when the emergency committee meets later today. This, as Downing Street comes under increasing pressure to outline its exit strategy from these emergency measures. Nick Paton Walsh is in London for us. Nick, great to have you with us. It is not what people want to hear, but the health crisis dictates at the same time an exit strategy of some sort is also required. What do we expect?</s>NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: Today, we expect to some degree the measures to be continued for probably another three weeks. I have to say, that would conflict to some degree with what officials refer to as the green shoots, the numbers we've been hearing over the past days. And I think the government here in a slight dichotomy in that they need to try and suggest to people that the measures so far have had success and now indeed are seeing. We heard yesterday, 2,000 spare capacity plus hospital beds. So the free U.K. health service say, the N.H.S. is not actually over capacity as many feared would be the case when we started to see a loss of life. We are still sadly seeing over 700 reported dead every day at this point. But at the same time officials, too, need to get people to stay at home for the next two to three weeks, certainly, and the weather is improving and, frankly, here in Central London, we've seen bustling streets that haven't been that way for the last fortnight or so. So we are likely to hear some specifics, certainly people will be looking to see when the end date of the renewed measures are. It was initially three weeks. Will it be three weeks again, or reviewed during that three- week period -- unclear? But also, too yes, you say an exit strategy as well. There isn't one frankly at this point. There have been some indications from a Junior Health Minister that maybe a vaccine is required before social distancing can stop here, but at the same time, too, epidemiologists have repeated that idea. We're missing a key voice of the leader of the government, Boris Johnson, the Prime Minister who is still recuperating from the disease himself and not it seems involved in the decisions being made behind me, a key Cabinet meeting due in just over an hour, Julia. So a very important day for the United Kingdom in terms of how it handles this, but it knows economic damage is accruing very fast and they do need to tell the population exactly how they plan to get them back to normal, however slow that process may be, Julia.</s>CHATTERLEY: Yes, just some degree of clarity, I think would help just mentally for people -- never mind anything else. Nick, very quickly, testing. Where is the U.K. on testing and tracing?</s>PATON WALSH: Very far behind where it needs to be, and by its own declaration it has just under a fortnight to reach a hundred thousand tests a day. It seems to be somewhere in the region of about 20,000 a day or so. But it's a large leap and still, I think even if you are able to test a hundred thousand on a daily basis -- that doesn't get you to the point where you know who has had it, who has it currently, and therefore which part of the population you can put back to work. A massive challenge here because at the start, the U.K. government was less focused on testing and more focused on how much population could safely get this before they started to lock it down and they are, I think reeling from the consequences of that right now -- Julia.</s>CHATTERLEY: Yes, and much of the world. Nick Paton Walsh, great to have you with us. Thank you. All right. We're going to take a break here on FIRST MOVE, but up next, a huge problem for small businesses as the emergency loan program, the PPP, runs out of cash. We speak to the CEO of Intuit, one of the FinTech firms set to distribute the funds. And putting President Trump's game changer to the test, we speak to the doctor leading one of the first clinical trials of the drug touted by the President as a potential cure. Stay with us. That's coming up.