Cash Crunch Payments Come Due As Moody Says Millions More In The U.S. Out Of Work; A Glimmer Of Hope In Coronavirus Growth Rates From Italy And Spain; Zoom, The Video Conferencing App Under The Pressure Over Privacy.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know. Cash crunch payments come due as Moody says millions more in the U.S. out of work. Slowing infections. A glimmer of hope in coronavirus growth rates from Italy and Spain. And a Zoom bomb. The video conferencing app under the pressure over privacy. It's Tuesday. Let's make a move. A warm welcome as always to our FIRST MOVErs around the globe. We have a jam packed show for you today and I'm glad to say, it's full of innovation in times of crisis. Plus a look at the quarter that was. What a journey the last few months have been, ending of course with the global war against the coronavirus. Let me bring you up to speed because we began through a record top in mid- February and the Dow at 30,000. The NASDAQ, 10,000 within striking distance. Then, we saw the fastest descent into bear market territory on record. Truly, one of the most tumultuous three months in Wall Street and of course health history, too. At the moment, we're looking at a lower open for U.S. stocks after Monday's three percent advance. Europe has turned mostly lower, too, but all eyes on China's data first today as they begin to kick start their economy. Chinese manufacturing survey data bounced from a record low in February. Any number just to give you above 50 means that manufacturing is what we call in expansionary territory. Now, I've read plenty of skepticism about these numbers, primarily because they're from China, but let's just be clear, they don't reflect the level of business activity, simply the direction. So a small rebound from last month will give you this kind of lift. The bottom line is that the rebound that we're hoping to see will take time, but business is resuming, and I do think that's key to recognize here. Now, during the Asia session, Hong Kong and South Korean stocks were the out performers yet on the quarter. The Nikkei fell some 20 percent. The Hang Seng was down 16 percent, and Chinese stocks, in fact with a relative outperformer, down just -- and I say just under 10 percent. China remains a beacon of hope for those elsewhere and they continue to fight the virus. And of course, as we watch the economic costs amount up. Let's get to the drivers as Christine Romans joins me now. Christine, that data from China is one thing, this week, particularly if we hone in on expectations for the claims for unemployment benefits in the United States, some estimates now -- Moody's Analytics saying four and a half million people, an additional to the 3.3 we saw last week.</s>CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Millions and millions of Americans are out of work, are losing their jobs. They are being laid off. They're also being furloughed. You look at some of the companies with furloughs, Gannet, Marriott, Hilton, Hyatt, Macy's and Kohl's. The interesting thing about those furloughs is they keep their healthcare through their company and the government will pay their unemployment benefits as close to their full salary as possible for four months. So the U.S. government has designed a rescue, a Band-Aid package here to keep people, as many people as possible kind of running in place, at least over the next few weeks and months. So those layoffs and those furloughs are just devastating, but the government is trying to get the money out there. Now this week, you're absolutely right. I mean, the money isn't out yet and people are out of work. The bills are due. It's the end of the first quarter, companies have bills at quarter end, and tomorrow is April 1st, rent and mortgage is due.</s>CHATTERLEY: Yes, it's painful. Most of the data though this week is from a parallel universe before we saw the lockdown happen. So it's why I sort of reiterated that claims number, even the payrolls on Friday not really of relevance because the timing period of when the data is collected, it brings to mind the Goldman Sachs report that came out and they've been scrambling to keep up to speed with their predictions here. Their Q3 estimates look incredibly rosy in my mind.</s>ROMANS: IT looks like a V, not a U. I'm hearing a lot of U-shaped recession, you know, a gradual recovery. But Goldman Sachs is saying a nine percent contraction in the first quarter of the economy of the U.S., 34 percent in the second and then a bounce back in the third of some 19 percent or so. And, you know, we've got a really big unemployment rate, too, you know, for the middle of the summer. I think that the unemployment rate targets at this point, Julia, are anybody's guess. They're going to be big. We're going to have a historic summer after a historic quarter, quite frankly, something we've never seen before here. These numbers are going to be ugly in the near term. Stimulus is going to be key here. And I'm sure you're hearing the chatter that this $2.3 trillion, it hasn't even gone out the door yet, there's going to have to be more on top of that.</s>CHATTERLEY: Yes, if this is the stabilization part, this money, this is to try and hold things together, what ultimately kick starts the recovery. Once we get the other side of this, and hopefully we've mitigated too much damage in the interim, whether or not we need more money, I think at the back end is an open question, and as you and I seem to agree here, more will be required.</s>ROMANS: Yes, we are just going to have to beat the virus first and then try to figure out what the new normal is going to be. We don't know what -- the economy that comes out late fall, it will be a different economy than a year ago, don't you think? I mean, you're going to have a reassessment of consumer patterns, and as you've pointed out so many times, confidence is key. We must be competent in the health situation before the economy can come back.</s>CHATTERLEY: Absolutely. Christine Romans, great to have you with us. Thank you. All right, now to the latest on the battle against coronavirus, the world's biggest outbreak in the United States is getting worse. The country record its highest daily death count overnight. The total now stands at more than 3,000 lives lost. New York is driving the surge, almost half the country's fatalities are recorded in the state in the scramble to increase hospital capacity. New York City has set up extensive care units in Central Park and that's what you're looking at right now. In Belgium, authorities reported the death of a 12-year-old girl, this amid numerous reports of the virus striking younger people. New Zealand says 26 percent of its patients are in their 20s. As the U.S. and Europe grapple with quickly rising death toll, a glimmer of hope seems to be emerging. New infection rates in Spain and Italy appear to be slowing since the shutdown measures went into place. Spanish health officials say the peak may be close if it's not already here. Elizabeth Cohen joins me now on this. There's so much information there, Elizabeth. Let's hone in to what we're seeing in in the likes of Italy and Spain. Are we suggesting that the growth rate here in the number of cases is slowing?</s>ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right, Julia. That is possible. That is what they're hoping they're seeing. They see the peak maybe soon, but they're not actually sure. And I want to stress here. This is new territory for everyone. And so when you hear these projections, remember that they are projections and that nobody has a crystal ball. But that is certainly what they're thinking. They're thinking that all of this social distancing, all of these rules may be finally paying off.</s>CHATTERLEY: Yes, it's hope. We're just looking for glimmers of hope wherever we can find them. Elizabeth, I want to turn to the number of counts of younger people that we're hearing. It's certainly a topic of conversation here in the United States in particular. And I just -- my mind went back to a discussion that we were having a few months ago about an epidemic of vaping, of use of things like marijuana in this country, is that in any way perhaps connected to what we're seeing among young people? It is a lung disease after all, or are we grasping at straws here?</s>COHEN: You know, Julia, we really just don't know. Is it possible? Yes, it's possible because anything that damages the lungs is going to put you at a higher risk for getting very sick or for dying in this outbreak. Let's look at France, for example, they've had about 30 people under the age of 44 end up in the ICU, about half of those have had underlying conditions and half of them haven't. Underlying conditions are things like obesity or lung problems or heart problems. Now, the interesting question is, why are people ending -- why are young people without underlying conditions ending up in the ICU? And the answer is that we sort of have to turn to, for example, flu. Every flu season, we report on young people, children, people in their teens, their 20s, 30s, 40s, who end up in intensive care or who sadly end up dying. And when you ask Infectious Disease experts, why? Why this person? They were perfectly fine beforehand. They say we don't know. All we know is that some young people do have very robust immune systems, and that it actually comes to hurt them. It's not even so much the virus, in this case, coronavirus that kills them. It's actually their response to it. It becomes sort of overblown and that ends up hurting the body. We're not sure that that's what's happening here with coronavirus because no one has had time to study it. This is so new and happening at such a frantic pace. But that may be what we're seeing here.</s>CHATTERLEY: Yes, it is so hard to study the data when you're so busy trying to save lives. Elizabeth Cohen, great to have you with us. Thank you so much for your insight.</s>COHEN: Thanks.</s>CHATTERLEY: All right, there are signs that the world's second largest economy is restarting its engines. Chinese government data suggests manufacturing activity has rebounded in March. John Defterios has all the details for us.</s>CHATTERLEY: John, I mentioned earlier on the show, what's not captured here is the amount of activity, but the change in direction i.e. a kick start to the economy is captured, and that's crucial.</s>JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: It is for planning and the order books going forward, at least in the domestic economy, I think we have to be careful about what the demand will be in China on the ground there on the Mainland, and then outbound and I'll explain that in a second. But we're coming off their worst performance since they created those figures back in 2005, Julia, so 52 is above the line, a positive nature in terms of purchase orders going forward, but I wouldn't call it a V-shaped recovery. We're expecting a contraction in the first quarter since 1976 when they had the Cultural Revolution that caused some chaos for the economy. Now, my hesitation here is because of export orders, they were down 17 percent in February, we'll get the data in mid-April, but you have to think because of the state of play in the United States and Europe right now, we're going to see a similar contraction for export orders. So I'm not very confident. Xiaomi, the telecom equipment manufacturers suggesting though that they are about 80 to 90 percent of capacity right now in terms of manufacturing. So that is a positive. The one thing I'm surprised by so far, at least, the Central Bank and the Ministry of Finance not announcing anything, in terms of the scale of what we've seen within the G-7 in terms of stimulus, when do they decide to bring out the big guns after they see the data throughout April here and say, look, we need to give it a lift, going into the second quarter and the second half of 2020 or not. We're waiting for that.</s>CHATTERLEY: You raise such a great point there as well though, about who they ultimately sell to, if their production internally is for others internally, then that growth is reinforcing, but with the rest of the world seemingly struggling still with the virus and in lockdown, who can they sell to, at least in the short term, which is such an important point. The other issue here for nations around China is when China slows down, everyone feels that they have a voracious appetite for all sorts of things, including commodities and some very stark warnings from the World Bank today about the poverty risk in other nations as a result of China slowing.</s>DEFTERIOS: Well, it's a great point to bring up here because the World Bank is putting into paper what we were talking about for the last couple of weeks, Julia. The slowdown in China, the impact of the coronavirus showing up in the numbers that they're outlining for all of 2020. We had an East Asia growth of better than six percent in 2019. The base case scenario for the World Bank is just over two percent. They're saying the worst case -- get this -- 0.1 percent or a contraction. So a swing of six percent. No surprise it is going to have an impact on poverty going forward. And quite a swing here, Julia, 46 million, see if I can explain it correctly. They're expected to see 35 million come out of poverty in 2020. As a result of the coronavirus, that could expand the poverty, it will grow by 11 million. So that's the swing of 46 million right now. Let's not bury the headline here. They had an outlook on China, which grew just over six percent in 2019. They're expecting above two percent, which is awful to say, and worst case scenario 0.1 percent for 2020. And they're saying and I think this is very difficult for the developing countries like Indonesia and Philippines, step on the healthcare, move into urgent action. That's very hard to do when the crisis is in your face already.</s>CHATTERLEY: Yes, but John, to your point as well about China, we're always a bit cautious about them over stimulating the economy. Now is not a time to be shy, particularly in targeted areas like that, for example. John Defterios, great to have you with us. Thank you so much. Now from G-20 world leaders reportedly using it to kindergarten kids, it seems. Just about everyone is using the video conferencing app, Zoom to bridge the gap in our social distancing age. But as a previously unknown company becomes a household name, some say we may be forgetting the privacy risks familiar for more traditional social media. Clare Sebastian joins me now. Clare, what are you hearing about the potential privacy risks here associated with Zoom?</s>CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia. An increasing number of questions are being asked as this app surges in popularity. The stock price by the way, up some 120 percent this year, even as the rest of the market as you know, has cratered. Right now, you know, there's a class action suit that was launched Monday in California where an individual alleges that Zoom, as it has grown in popularity is failing to safeguard the personal data of its customers. It says that when you log in, it discloses certain information to third parties like Facebook. Now, this is something that Zoom has addressed. They put out a blog post last week where they admitted that if you log into Zoom via Facebook, it does share some personal information, things like your device model, your IP address. But they released an update, they say they patched it. They encourage users to download that update. The class action, though says the damage is already done to people and to their trust. So this is something that zoom is increasingly facing. They are at a sort of a defining moment for the company, as you say the G-20, things like U.K. Cabinet meetings are being held on it. They've made it available to a lot of different schools.</s>CHATTERLEY: And meanwhile, we've seen security issues, a phenomenon known as Zoom Bombing, where hackers have sort of dropped in uninvited to meetings and displayed graphic content and things like that. So even as Zoom increases in popularity, they are under increasing pressure to try to deal with these issues that come out of this popularity -- Julia.</s>CHATTERLEY: Yes, so not necessarily as we're showing you pictures there of the G-20 meetings, not necessarily dropping bombs in those G-20 meetings all reportedly there of course on the use there. Interesting times, and of course, very much tied to the fact that so many people are working from home now including big corporations, and a vast majority of their staff. Clare Sebastian, thank you so much for that. All right, Amazon has fired the employee behind Monday's walkout at a New York fulfillment center. Amazon say Christian Smalls was supposed to be at home under quarantine with pay after he was in close contact with another employee that had tested positive for coronavirus. Smalls had demanded the facility be closed and sanitized. He says he is being punished by Amazon and that it reflects the company's culture. Much more ahead on FIRST MOVE. Coming up, a race to make ventilators. A growing number of companies joining the effort, including an aerospace firm. Plus, one of the largest 3D printing companies in the United States is now helping to make medical supplies. Innovation in times of crisis, coming up.