Another 6.6 Million People Filed For Unemployment Benefits In The United States; Health Of U.K. Prime Minister Boris Johnson Continues To Improve
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: From New York, I'm Julia Chatterley. This is FIRST MOVE, and here's your need to know. Pandemic pain. Another 6.6 million people filed for unemployment benefits in the United States. Continued improvement. The latest on the health of the U.K. Prime Minister Boris Johnson. And pandemic privacy. We speak to the CFO of conference app, Zoom about their new protections. It's Thursday. Let's take a move. Welcome once again to FIRST MOVE. It's so great to be with you as always, and some welcome news first, on the social distancing measures being taken here in the United States and across Europe, it seems that they are helping. We're seeing the curve flatten here in the United States and we appear to be seeing cases peak in parts of Europe, too, however, the economic damage from the self-induced shutdowns deepens. As I mentioned, we now know a further 6.6 million Americans filed for first time unemployment benefits just in the last week. That equates to over 60 million people thrown out of work in the last three weeks alone. What's more, we know there are backlogs, big backlogs in processing these claims. If you remember yesterday, Paul Krugman told us that he expects a 20 percent unemployment rate in the United States by mid-April. Key, of course, to stemming that -- loans to the biggest employers in the nation -- the small businesses. We could see a vote in the Senate on an additional $250 billion worth of lending capacity, just to try and calm things down, but the Democrats are arguing more money for states and healthcare should be added, too. You can't choose between these things. It's time to act. The Fed though -- the Federal Reserve -- not hanging around, taking fresh action today to help get loans out to businesses. Among others, they are offering in total some $2.3 trillion in new lending programs including an additional $600 billion worth of support for medium sized businesses. We'll hear from Jay Powell at 10:00 a.m. Eastern Time to get more detail on what this all means and how quickly, of course, it will work. For now, U.S. futures are higher on the news after a strong session Wednesday. The Dow and the S&P rising more than three percent encouraging medical data as I've mentioned and continued talk about somehow getting the U.S. economy up and running, I think helping sentiment here even the talk worth something. European stocks rising, too, and Asia having as you can see broadly mixed, but the ones that I'm showing you here are positive. I just remain concerned about how we open up the United States economy without some form of mass testing. We saw that in places like South Korea. We see it we think happening in China, too. For now, Europe is key. Discussions underway in France, Germany and Italy, too. Norway, Austria, Denmark and the Czech Republic have already announced gradual reopening, and for the economies, for the people that can't come soon enough. We'll be discussing. For now though, Richard Quest joins us. Richard, I don't know where to start. First on the shocking, the devastating increase that we keep seeing in in those claiming for unemployment benefits in the United States. We know this because it's purposeful, but also the Federal Reserve stepping up here and saying, look, we'll make more money available, whatever it takes.</s>RICHARD QUEST, CNN BUSINESS ANCHOR, "QUEST MEANS BUSINESS": Essentially, what the Fed is doing, is agreeing to use all these loans, these payroll protection loans that the banks are making as collateral for further loans against it. This new Main Street facility is for those companies with more than 500 employees who don't have direct access, those under 500 employees use the PPP, the Payroll Protection. And I've got here, I printed it out this morning, Julia, just a list of all the different plans that the Fed has put in place, and they're all basically the same thing. In some shape or form, the Fed is acting as the backstop, agreeing to take commercial paper from companies, government bonds, and now these payroll protection loans as collateral against further lending.</s>CHATTERLEY: Yes, they'll buy anything. They'll try and keep borrowing costs down for corporates, push money, but to the small and medium-sized enterprises, even the municipalities, I saw that word in this, too, which I do think is critical. Richard, do you remember during the financial crisis where we'd always use this word, transition mechanism, or the phrase, it's OK throwing money at something but you have to actually see the cash get there. And what we're struggling with in the United States is the transition mechanism of agreeing money for people and for businesses, but it's just taking time to get to them and that remains a problem.</s>QUEST: Right. And I'm glad you talked about transmission and the mechanism because if we look at what the Bank of England has done today, the BoE has short circuited the transmission mechanism, normally through the government gilts market, and is now making direct loans to the government its so- called monetary financing. Now, monetary financing is allowed by the BoE because of its Constitution and the way it runs, it is strictly forbidden by the European Central Bank. There can be no direct monetary financing of government expenditures by the Central Bank. And this is a major development as well which shows the size and scale it mounts. On the markets, quickly, Julia, I think the testing. I know you'll caution, and I think you're right with your caution, and bearing in mind your caution, I think they are testing and testing the upper limits of what they believe the appetite for investors is at the moment.</s>CHATTERLEY: I couldn't agree more to be honest, and you know, when you held up those sheets of paper, I was just running it through in my mind as well, we have seen nothing like this in terms of stimulus -- so financial aid. So at the same time when we're saying and we bring it back to the science that we don't know what reopening the economy looks like. We don't know what the science of Getting on top of the health crisis looks like nor do we have any sense of understanding of how potent throwing this kind of money at the system does, not only for the underlying economy, but for markets, too; and those two things are different.</s>QUEST: And - and - and, that was event a thought. I know this is a long way in the future, and we're not worrying about this now, but it all has to be unwound at some point. I mean, you know, 2021 -- all of this has to be unwound, please God, we get to the position where we have to unwind. Let me leave you with that. Please, can we get to that position?</s>CHATTERLEY: Yes, higher taxes. We still haven't unwound what we did during the financial crisis, Richard. Who knows where this ends? Thank you so much for that. Great discussion as always. Richard Quest. Now as the U.S. faces up to unemployment catastrophe, another crisis -- a jobs crisis. Spain, one of those nations also looking to try and get its country restarted. The Prime Minister, Pedro Sanchez says the pandemic's peak has been reached, and the country will soon start de-escalating lockdown measures. Scott McLean is in Madrid and joins us now. Scott, when I look at Europe, no country, more than Spain needs to protect its economy and get restarted; however, that looks like, but what does that actually mean in practice for Spain?</s>SCOTT MCLEAN, CNN CORRESPONDENT: Sure. So one of the things that Spain has been pushing for is a pan-European solution to their economic problems which have been deep and will likely be long lasting. This is a country that had 13 percent unemployment even before the coronavirus came along. So today, the group of 19 Finance Ministers that use -- the countries that use the euro will be meeting today to try to hash out some kind of a solution on European stimulus to the coronavirus. On a basic level, the divide has been north-south. Countries like Germany and Holland versus countries like Italy and Spain. Germany and Holland, not wanting to take on debt from less affluent countries like Italy or Spain. Spain, though, really wanting things to be done in unison, originally pushing for Europe to issue debt, so called coronabonds, which have been a nonstarter for the Germans. But the Prime Minister, Pedro Sanchez has really been on a lobbying campaign writing in 10 European newspapers just a couple of days ago that, look, you need some cohesion otherwise it will threaten the viability or will badly damage this European project. The Spanish Foreign Minister went even further than that telling a French newspaper that either Europe will kill the coronavirus or the coronavirus will kill Europe.</s>CHATTERLEY: Wow. What a potent statement. Scott, you know, I've spent a lot of time in Spain. I've been in Madrid many times. I'm just looking at the street and I recognize it behind you. And it's utterly empty. And as much as the conversation in Spain is about, look, how are we going to restart? What I'm seeing behind you is a capital city that remains on significant shutdown measures and will continue to be like that for the next month, I believe. What does restart look like? Are they giving us any detail?</s>MCLEAN: Yes, it's a great question. You know, I've spoken to friends in the United States or in the U.K. who have a very different idea of lockdown. Here it means something quite different. As you can see, this is one of the main shopping streets in Madrid. We're just steps away from the physical center of the city, and there's almost nobody here.</s>MCLEAN: People are only allowed out of their homes to go to work, and only if they are essential workers, or to go to the grocery store or the pharmacy or to get essential supplies. And so today, the Spanish Parliament is voting actually, probably as we speak, they are very likely voting on whether to extend the state of emergency until April 26th. That is likely to pass. But the government is promising that nonessential workers which who have had to stay home for about the last two weeks or so will be allowed to go back to their jobs beginning on Monday. This applies to industries like construction and manufacturing, but does not apply to restaurants and bars. So this scene is going to stay as it is for quite some time. In terms of where we are in the death toll and the numbers. You mentioned, the Prime Minister said that this country has reached its peak and now it's sort of on the decline. It's managed to flatten the curve. And that seems to be true. The number of deaths was almost 700, but the number of new active cases or the increase in active cases, I should say, was less than a thousand for the last two days. That's the first time that's happened in almost a month. But Julia, there are some real questions about the accuracy of the numbers here in Spain. A CNN analysis done by my colleagues and I showed that there were 3,000 plus deaths more than average compared to last year in the last half of the month of March that were not attributed to the coronavirus. And so the true number of deaths is likely much higher. Case in point the regional government of Madrid says that thousands of people have died in nursing homes who had coronavirus symptoms, but were never actually tested and thus were not added to the official tally. For its part though, the Spanish government says look, it counts anyone as a coronavirus death if they tested positive for the virus. That they say is in line with European and W.H.O. guidelines.</s>CHATTERLEY: Yes, it's just worrying isn't it? We really are at the beginning of this. Scott, great to have you with us. Scott McLean there. Stay safe. All right, the British Prime Minister is in good spirits and his condition is improving says his spokesman. Boris Johnson spent a third night in intensive care fighting COVID-19 symptoms. Nick Paton Walsh joins us now. Nick, well, improvement we take that. That's good news.</s>NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: Absolutely, yes. But it is I think the first day, it's fair to say that we've had the suggestion that he is getting better. Yesterday, we're being told that he was stable and responding to treatment. Today, as you said, they go on to point out, he has had a good night and continues to improve. He is still receiving "standard oxygen treatment," the suggestion clearly being from his adviser that he is not on a ventilator, and I think it is fair to say now that the British public are getting a slow drip of good news about his condition. Certainly, no bad news is good news by definition itself, Julia. So yes, that notion I think that the top medical care that he is able to get in the United Kingdom seems certainly to be paying off at this point -- Julia.</s>CHATTERLEY: Great news. Nick Paton Walsh, thank you so much for that update there. All right, in the next hour, OPEC will have a virtual meeting with its partners to discuss cutting oil supply, the price war between Saudi Arabia and Russia and a lack of demand. Of course, Brent crude to plummet 50 percent year-to-date. Prices today, as you can see, are a little bit higher. Clearly some optimism there. John Defterios joins us now. John, what are you hearing heading into this meeting about what kind of deal may be struck -- my apologies -- and who may be involved in that deal, because that's key, too.</s>JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: It is very key, Julia. We've heard a lot in the last 45 minutes. Tough times require tough measures, and that's what we're hearing, particularly because the demand side of the equation is dropping so fast. A week ago when we talked, there was maybe a drop of 20 million barrels a day. Now, we're looking at 30 to 35. So there is no choice. Again, it goes back to the big three -- the United States, Saudi Arabia and Russia. Donald Trump brought the latter two back together again and we're hearing in the last hour that Saudi Arabia is now willing to cut four million barrels a day. These are being leaked out regionally. That would be though from a base in April, when they ramped up their productions going from 12 million barrels a day to above eight million barrels a day. Russia now, get this, Julia, going to 1.6 million barrels a day of a cut. That is equal to or slightly higher than what they walked out of for the entire group just a month ago. That's how much things have changed. Now, Vladimir Putin is holding a very tough line on the United States and other G-20 members saying, it cannot come in with a practical or automatic cut to the table. That automatic is that the Energy Information Administration saying the U.S. will lose a million barrels a day in 2020 and another million in 2021, which by the way, I think is low. Putin said you have to be firm on that, and they've invited 12 other players beyond the United States and Canada. Alberta is showing cooperation here, so is Brazil, even Norway. But by this time tomorrow at the G-20, they have to say what is hard and fast. If you can't deliver that, don't ask us to put up better than 10 million barrels on the table at this stage.</s>CHATTERLEY: You know, it's fascinating, John, when we spoke to the American Petroleum Institute chief last week, he said, look, it's happening organically in the United States, up to a third of our capacities gone, or at least has been switched off due to low prices anyway. Does that matter in these discussions if that's what the message from the United States is? It's happening organically.</s>DEFTERIOS: Well, it doesn't matter, and I'll tell you why. It's because of the flexibility of the U.S. shale producers, Julia. They can go on and go off and they're owned by the majors by and large, all the acquisitions in the last 18 months. So it's interesting the narrative from Donald Trump now when it comes to OPEC. He hated them before and says that has now broken, and we know the threshold pain here. $70.00 on the top where we were in January, $20.00 to $25.00 on the bottom. So can this collective group, 23 from OPEC Plus, a dozen other players that are around the table and on the phone conference today, come with a package that gets you to between $40.00 and $45.00 to $50.00 for the rest of 2020. The other surprise I think here, Julia would be the G-20 tomorrow would say look, on our side, we're going to start filling our strategic reserves and boost demand to stabilize the market. That would be a big win. The final point here, Saudi Arabia is under intense pressure, yet another letter from nearly 50 congressmen and women to the Crown Prince of Saudi Arabia saying you're the G-20. Chair, you're an ally of the United States. You buy weapons. We back who on Iran. Do the right thing. They're not saying that to Vladimir Putin or anyone else, but clearly to Riyadh.</s>CHATTERLEY: Yes, there's no cushion on that G-20 chair at this moment. John Defterios, thank you as always. All right, we're going to take a quick break here on FIRST MOVE, but coming up in our segment, a time to act. What Colgate-Palmolive is doing at a time when we need health and hygiene products more than ever? And also keeping it clean, important advice to ensure your Zoom chat doesn't get some unwanted visitors. That's coming up. Stay with us.