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First Move with Julia Chatterley
U.S. Stocks Fall Further Despite Soothing Noises From Global Policymakers; OECD Calling For Action To Tackle The Economic Cost Of The Coronavirus; Activist Investor Elliot Management Tackling CEO, Jack Dorsey. Aired 9-10a ET
Aired March 02, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:11]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from the New York Stock Exchange, I'm Julia Chatterley. This is FIRST MOVE and here is your need to
know.
Stimulus soon. U.S. stocks fall further despite soothing noises from global policymakers.
Swiftly and forcefully. The OECD calling for action to tackle the economic cost of the coronavirus.
And Twitter's new troll. Activist investor Elliot Management tackling CEO, Jack Dorsey.
It's Monday let's make a move.
A warm welcome once again to FIRST MOVE this Monday. It's a new week. It's also a new month. Of course, what's not new, is the sheer level of
volatility that we're seeing once again in global markets.
I'll give you a look at what we're seeing for U.S. futures at this moment. We are in the red. We were much higher earlier, tracking gains in Europe in
Asia, but Europe also lost steam. All the chatter the weekend focused on government, on Central Bank support, coordinated or otherwise helped along,
of course, by the statement that we got later on, on Friday from the Federal Reserve saying that they stand ready to act. And yet as I
mentioned, we've lost ground here premarket.
Also in Europe, despite more soothing noises as well overnight and this morning from policymakers around the world, nothing guaranteed at this
stage and people are simply nervous.
Let me give you the list. We've had the Bank of England today. Italy, announcing a $4 billion aid package, too. The Bank of Japan Governor also
hinting about further stimulus hereto. Australia, also expected to lower rates tomorrow as well.
It did help sentiment in Asia. Stocks there closing solidly higher. The Shanghai Composite rallied over three percent, that despite Friday's awful
Chinese factory data. The Index Survey there, falling to its lowest levels on record for the month of February. No surprise there, I have to say.
China also announced a bailout for the debt-ridden conglomerate HNA Group which has been badly weakened by the coronavirus. You have to expect more
help along those lines going forward.
The big questions of course for today, big picture, have we seen the lows in stocks not just in the United States but around the world? There's
plenty of bad news now in the price and with U.S. bond yields falling below 1.1 percent for the first time ever. Will the Federal Reserve feel pressure
to cut and will lower rates at this stage even help?
Let's get to the drivers. I want to bring you up to speed with the latest on the coronavirus outbreak.
The OECD, as I mentioned saying coronavirus is the biggest threat to the economy since the financial crisis. Their worst case scenario here sees
global growth slowing to just one and a half percent in 2020.
In the meantime, the United States has confirmed a second coronavirus death as the virus spreads. Florida, New York, Rhode Island have all reported
their first cases.
In the E.U., they've raised the threat level from moderate to high, as the number of cases in Italy jumped 50 percent in a single day over the
weekend.
In Paris, the Louvre Museum in Paris is closed for a second day. And in South Korea, Seoul City government is calling for homicide charges against
the founder of the sect linked to the worst outbreak in the country.
In the meantime, in Japan, the Cherry Blossom Festival has been canceled. Just one of the bans that we're seeing on big gatherings and travel
restrictions around the world.
John Defterios joins us now to tie all the threads here. John, we're seeing a widening spread this outbreak around the world. It's been the same story
for many days here.
But the OECD now stepping up and saying whether its central banks, whether it's governments, more policy support and action here is needed clearly.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Clearly, that is the case, Julia. In fact, I thought it was interesting that always a danger
when you're 10 years into the economic cycle, that you don't have anything else left in the toolbox. So what do I mean by that?
The U.S. has run up a very big budget deficit. It has had this debt rising at the same time. Growth is as slow as in three years, and now the U.S.
Federal Reserve is going to come in and cut interest rates. I think it's already priced into the market.
We heard from the Bank of Japan, which led to that market rally in Asia and that was quickly wiped out in Europe when we saw that OECD report, best
case scenario 2.4 percent. We might as well just call it a recession. Worst case scenario, 1.5 percent.
If I look at that report, Julia, I would suggest the biggest challenge is, they are still factoring growth of China at five percent in 2020. That
looks a little bit ambitious.
I saw Goldman Sachs suggest that we could avoid a recession in the United States this year going into the election cycle, but that we may bottom out
at zero percent in the second quarter.
Extraordinary for me, Julia, is that when I spoke to the IMF Managing Director, she talked about a V-shaped recovery just two weeks ago. Now
they're talking about a U-shaped recovery.
I think that is factoring a lot of great things just to come in together and in alignment.
[09:05:24]
DEFTERIOS: And you talked about all the different Central Banks talking. Where's this G-20 or G-7 coordination that we've been used to over the
years that's not coming into play right now?
CHATTERLEY: John, you and I were talking about this in Davos at the back end of January saying does the G-20 need to be coming together to be
talking about this. So yes, better late than never, but come on, guys get coordinated.
You raise such great points there. The Chinese GDP, nominal GDP, a fifth of the world's growth here. Forty percent of the growth that we see, the
acceleration that we see in growth here. Some understanding that things have to be revised lower, I think makes sense.
The other big question is, do rate cuts at this stage given rates are already so low around the world, even help, particularly in the short term?
It is surely about governments here stepping up and doing more, even if it's just identifying the number of cases out there.
I think you make a fantastic point because I think this crisis will end when we see the cases stop rising. Right? And then we have to have the
second largest economy in the world China start recovering because that PMI Index that came out of China was the worst as you suggested in your lead in
since 2004. How bad was it? Breakeven is 50. This came in at just about 40. So it is terrible.
I've been traveling. I was in Saudi Arabia last week on my way to London, the mood in airports, the consumer spending and sentiment is terrible.
And you had a case with the CERAWeek, which is the very large oil and gas conference taking place next week in Houston has been canceled. That
follows the ITB, the big travel show in Berlin that's been shelved. The Geneva Motor Show.
We heard out of Saudi Arabia, the big construction show where we think this is a big deal with oil prices where they are today, is the construction
sector going to hold up the big five in Jeddah has been cancelled, Julia.
So these things are not incidental. If you tie them all together, how do you see business confidence returning? How do you see consumer confidence?
Then we have to think about Italy and all those cases right now are striking at the core of Europe. When does Germany, France, even the U.K.
across the channel slow down in a big way? The PMI by the way in the U.K. wasn't very strong either.
CHATTERLEY: Yes, John, there's so much in there and we'll come back later on in the show and discuss this with our viewers as well. What's in the
price here? How do you quantify the risks that we're talking about? John Defterios, great to have you with us. Thank you so much for that.
All right, I want to head to South Korea now where the authorities are pioneering a unique way of testing for the coronavirus exactly to the point
John and I were discussing there. Ivan Watson has this report.
(BEGIN VIDEOTAPE)
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: South Korea has more coronavirus cases than any other country in the world outside of Mainland
China.
But the authorities have come up with an innovative way of tackling the challenge. This is drive through coronavirus testing. It's a service that
this city, Goyang, outside of Seoul is offering for free to anybody who comes in here. You drive in with your car, and you go through a series of
stations to get the coronavirus test.
Now the number of cases in this country have surged in just two weeks. The count of coronavirus diagnoses has gone up from 31 to more than 4,200.
Testing is a key way to try to keep control of the disease and South Korea has tested more than 100,000 people thus far. The authorities say the
advantage of this is, it speeds up the testing process and crucially, it limits the exposures of potential carriers to the brave nurses and doctors
who are on the front lines of this public health crisis.
At no time does someone coming in to get tested, at no time do they get out of their vehicle. So there's no risk of them infecting a hospital or a
clinic and other potentially vulnerable patients who may be there. And they never have to wait in a waiting room with other patients. They're not going
to potentially spread the virus to other patients.
Each person gets their temperature checked. They fill out a form. And one of the key questions is, have you been to the City of Daegu? That's the
southern city, where more than 70 percent of all the coronavirus cases in the entire country originate from. It's had a real explosion of coronavirus
and that would put you in a risk category.
If you fall into that, if you have symptoms, then you come to this final station where the nurses do swabs to take samples from your nostrils, from
your throat. That is then sent to a lab and within two to three days, you'll get your results.
[09:10:12]
WATSON: The mayor of the city says he was inspired by the drive-thrus at Starbucks and McDonald's to come up with this idea.
A doctor I have spoken to at the Coronavirus Crisis Center in Daegu says this model could be a help for some countries that are just now beginning
to tackle the epidemic of coronavirus.
Ivan Watson, CNN. Goyang, South Korea.
(END VIDEOTAPE)
CHATTERLEY: All right. Let me bring you up to speed now with some of the other stories that we're following around the world. Several countries are
on high alert following North Korea's latest launch.
The South Korean military says the North fired two short-range projectiles into the sea between the Korean Peninsula and Japan. Tokyo says there's
been no reported damage. South Korea says the launch is likely part of military drills.
In the Philippines, a former security guard is in custody after about 30 people were held hostage at a shopping mall. The gunman claims his company
was rife with corruption and demanded four executives resign.
Before the hostages were released, six directors actually did resign and apologized.
The President of Israel has blasted the country's election campaign as "awful and grubby." Reuven Rivlin's comments come as Israel goes to the
polls for the third time in less than a year. They are choosing between Benjamin Netanyahu and his main rival, Benny Gantz.
Elliott Gotkine joins us now from a polling station in Jerusalem. Take three, here we go again, Elliott, are we any more likely this time around
to break the political deadlock?
ELLIOTT GOTKINE, JOURNALIST: It doesn't seem that way, Julia. Certainly, the opinion polls are suggesting that this political deadlock will
continue.
I should say there are just under six hours to go until polling stations, like the one you can see behind me here in Jerusalem close. After that, we
will get the first exit polls which will give us an indication perhaps of where things are heading, although they have been proved wrong in the past,
and then the actual results will trickle through, so that by sunrise tomorrow in Israel, we should get a pretty good idea of whether those
opinion polls are right and whether that political deadlock will continue.
Of course, one actual figure that we have had so far today is from the Israeli Central Elections Committee talking about turnout. Turnout at noon,
Israel time, that's about four hours ago was that a 20-year high.
Now, we don't know what that means definitively because overall turnout may not have grown that much, but it could indicate is that people are fed up
with having these incessant elections. They are coming out in greater numbers in order to try to break the impasse that we've seen and to put
into what President Reuven Rivlin described as this never ending instability.
CHATTERLEY: So what happens then? To your point, even if we've seen this spike in attendance, we're not sure what that's going to mean in terms of
where those votes actually end up.
But if we do end up in a situation once again, where we still can't form some kind of coalition government, what next and specifically here for
Benjamin Netanyahu, because given the charges that he faces, it's complicated for him very swiftly anyway.
GOTKINE: Well, Julia, I should say that, you know, you've heard of the "Avengers: Infinity War," we could be just in the beginnings of Israel's
infinity elections, because there's nothing legal or in the Legal Code here to prevent Israel going to fourth elections. They've already penciled in
September, then fifth, sixth, seventh elections and beyond.
And, as you say, against that backdrop, Prime Minister Netanyahu is due in court on corruption charges in just a couple of weeks' time, really quite
amazing to think that that's likely to happen. Of course, he would much prefer to be Israel's Prime Minister still when he goes into court to face
those charges, because at the same time as well, without a fully functioning governments, they are unable to pass a new budget.
They are unable to -- it is difficult to finance new infrastructure or social programs. And according to the Israel Manufacturers Association,
these three elections so far have cost, including the actual cost of election and the cost of overtime and other things, it is a public holiday
every time there's an election hjas come something like $2 billion. That's about half a percent of Israel's GDP.
And the Accountant General here in Israel is saying that if this situation is not resolved soon, then we will really be seeing a real impact on
Israel's economy -- Julia.
CHATTERLEY: Wow, just the wrong time as well, given the broader backdrop here, the infinity election. Elliott, great to have you with us. Thank you
so much for that. We'll watch for the results.
All right, let's move on. The U.S. Democratic presidential candidate Pete Buttigieg has dropped out of the campaign. The announcement comes a day
after he finished fourth in the South Carolina primary and two days before Super Tuesday.
We will have much more analysis on this later on in the show.
[09:15:10]
CHATTERLEY: For now though, we're going to take a break, so grab coming up here on FIRST MOVE, a possible election year shake up at Twitter. Why CEO
Jack Dorsey could be pushed out.
Plus, Democratic hopefuls are gearing up for Super Tuesday. Why tomorrow could put an end to some of their campaigns. It's hard to not. That's next.
Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to the show. Some sad news to bring you now. The death of American executive Jack Welch at the age of 84. This according to
CNBC, who spoke to his wife.
From 1981 until his retirement in 2001, he was the Chairman and CEO of General Electric at a time when the conglomerate saw unprecedented growth
and financial success, a legend certainly in the business world. We'll have more for you on this when we get it.
For now, let me give you a look at what we're seeing in terms of the U.S. markets premarket, and I'll tell you what, the open today is anyone's guess
because having told you that futures were down, we are now higher by almost one percent from the NASDAQ, and there's plenty of time to the open yet, so
we shall see.
But 10 minutes to the open, we are higher for U.S. futures. Assurances from all over the world from Central Banks, the Bank of England; Australia
expected to cut rates, the Federal Reserve's statement of course on Friday, that despite seeing terrible factory activity data from China on Friday,
too, the worst levels on record.
There's plenty to discuss. Brian Levitt joins me now. He is the Global Market Strategist at Invesco. Great to have you with us.
BRIAN LEVITT, GLOBAL MARKET STRATEGIST, INVESCO: Great to be here.
CHATTERLEY: Lots of volatility.
LEVITT: Lots of volatility.
CHATTERLEY: That's the one thing we can guarantee at this stage.
LEVITT: Right.
CHATTERLEY: Talk me through what you think as far as stimulus, whether it's Central Bank action or monetary stimulus perhaps and fiscal stimulus from
governments.
[15:20:04]
LEVITT: Right. So first and foremost, we should expect volatility when there's economic uncertainty.
CHATTERLEY: Yes, there is plenty of that.
LEVITT: So that is where we are and there will be plenty of economic uncertainty. I suspect Central Bankers stand ready to provide support to
the economy. The bigger question is whether interest rate decline is actually going to stimulate economic activity.
I think you'll see a wave of refinancing, I'm probably there, right, rates are so low. But the problem is people need to have a little bit more
optimism that they could go out in public and so you'll see some hit to consumer spending.
It's really more around what the medical community can do to get out ahead of this and whether the Federal Reserve stands ready to provide liquidity
support to businesses that may need it, rather than whether a decline in interest rates can really help to reinvigorate economic activity.
CHATTERLEY: Yes, it's far more about the message that it sends that they are there and ready to support economic activity.
LEVITT: Absolutely.
CHATTERLEY: Versus actually the benefit of lower rates at this stage. Do you think the Federal Reserve does cut rates though, at their March 18th
meeting? Because I believe we've got half a percentage point worth of cuts now priced. We are back into the situation where Central Banks almost get
forced by markets to take action simply because of the pricing here.
LEVITT: Well, that's how it goes. Right? And that's the old James Carville line about wanting to come back in life as the bond markets can bully
everyone and if you look at where the 10-year Treasury rate is, it's significantly below the Fed Funds right now, I mean, significantly below.
CHATTERLEY: Yes.
LEVITT: And so unfortunately, the two-year is not, but I suspect the Federal Reserve will respond. The good news is the yield curve is not
inverted, and the dollar has been relatively stable in here. So that's the good news from the Federal Reserve's perspective, but you really have to
start to watch corporate credit spreads.
CHATTERLEY: This is borrowing cost then for corporates.
LEVITT: Borrowing cost and the more they creep up, the Federal Reserve will try to counteract that. It really comes down to again more about the
medical community getting out ahead of this and people feeling comfortable to get back to activity.
CHATTERLEY: I mean, I don't want to dip into your medical knowledge here, but we were talking earlier on the show about simply the need to identify
the number of cases and the lags with that fueling the degree of uncertainty here, I think for everybody at this stage.
Do you think we are being a little bit alarmist when we see the likes of Goldman Sachs saying a full percentage point of cuts, the OECD saying we
all need to step up and take action versus what's already priced into things like stock markets?
And there's now a lot of weakness for this year globally priced in already.
LEVITT: Yes, I mean, it's incredible.
CHATTERLEY: Have we seen the lows?
LEVITT: I don't know if we've seen the lows. But it's incredible when you look at the 10-year rate where it is. If you look at the copper-gold ratio,
it is now as low as it was during the 2008 financial crisis.
So in essence, you're getting to a point where investors are saying that something is going to happen where something breaks and this permeates
throughout the global financial system.
The way I see it is the banks are better capitalized than they've been. There's no inflation. The Fed stands ready to respond. So I don't think
that this is, you know, a great recession looming and some of the indicators are starting to get there. VIX is at you know, near all-time
highs. These things usually represent buying opportunities.
Because of the fact that this will likely continue to spread and because people are asymptomatic for a while, it may take some time, and that could
keep some pressure on asset prices.
Look, I'm going to sound a little bit of a more optimistic note.
CHATTERLEY: No, and I think this is important.
LEVITT: We know -- we know we ultimately get beyond this, and we've seen it with SARS and MERS and H1N1, and so you have these draw downs and then you
ultimately get beyond this.
Unfortunately, it's going to take a little bit of time and the longer economic uncertainty persists, the more likely markets will be volatile.
CHATTERLEY: But don't panic.
LEVITT: No, no, no. Don't panic.
CHATTERLEY: Is the bottom line. Yes, strong message.
LEVITT: I mean, the one thing we know from history is that you know, that we did --
CHATTERLEY: Things come back.
LEVITT: Things come back.
CHATTERLEY: Brian, great to have you with us.
LEVITT: Thank you.
CHATTERLEY: Brian Levitt there, Global Market Strategist at Invesco.
I want to turn back now to our breaking news this morning and the death of American executive, Jack Welch at the age of 84. Matt Egan joins us now on
this story. Matt, I called him a legend of the business world earlier. Two titles actually come to mind for me, manager of the century and neutron
jack. He wasn't afraid to make cuts over the years where required. A legend, I'll say it again.
MATT EGAN, CNN BUSINESS SENIOR WRITER: That's right. He really was a larger than life figure. He reshaped not just General Electric, but corporate
America and management ideas really kind of broadly.
He is known for really having a laser focus while he was leading General Electric and he helped turn it into not just the United States' most
valuable company, but the world's most valuable company at one point.
Now, Welch actually started his career as a chemical engineer in 1960 at GE, and he quickly rose up the ranks. By 1981, he became the youngest CEO
in GE history, and he really was known for having very reliable shareholder returns, consistently beating expectations on the earnings front end.
As you mentioned, he could be quite ruthless on a cost cutting front he oversaw some very dramatic cost cutting and layoff at GE in an effort again
to really generate those shareholder returns.
[09:25:08]
EGAN: He stepped down in September of 2001, just before 9/11. He turned the company over to Jeff Immelt. Now, just in the last few minutes, I did
receive an e-mail from GE where they are confirming Jack Welch's death, and they also put out a statement from the current CEO, Larry Culp.
And Larry said, "Today is a sad day for the entire GE family." He said, "Jack was larger than life in the heart of GE for half a century. He
reshaped the face of our company and the business world." Certainly a powerful figure -- Julia.
CHATTERLEY: Absolutely, and I think for me, the management style that was adopted by people that worked at GE and went on to other companies, the
vitality curve, where are you on the vitality curve as a performance manager and what do you achieve for your company.
He will be remembered for many things, I think. In addition, as you said, his life than life personality.
EGAN: He will. He will. And you know, as we mentioned, he really did reshape GE which was just a very industrial focused company and he
diversified it for better or worse.
He was in charge when they went out and acquired RCA, which own NBC Universal. So he turned this manufacturing giant known for light bulbs and
jet engines into a media conglomerate.
Now GE has of course, since spun off the NBC Universal business to Comcast. But he also pushed GE into financial services, which of course became a
problem during the financial crisis in 2008.
CHATTERLEY: Yes. Absolutely. The conglomerate model, very challenged, but $12 billion to $410 billion dollars, the market cap of GE in his lifetime.
Wow. Matt Egan, thank you for joining us on that. We're counting down to the market open. Volatility, the name of the game once again. We're
expecting a stronger open but, hey, watch this space. We're back in two. Stay with FIRST MOVE.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE live from the New York Stock Exchange and the opening bell this Monday morning. We are beginning the new
week and the new month here with gains it seems despite some incredible volatility.
I think we've got a thousand point range. I was just calculating on the Dow since last night. It does follow the worst week for stocks, of course,
since the financial crisis, too.
A series of statements coming from Central Bankers around the world, the Japanese, the U.K., the U.S. Central Banks, or helping lend support here
with statements assuring investors that they stand ready to act if necessary.
Tech stocks, the outperformers as well, and just having a look at that, yes, up more than one percent right now for the NASDAQ. That follows 10
percent drop that we saw last week. Of course, the Dow and the S&P falling 12 percent.
I want to give you a look at what we're seeing in terms of the energy markets as well. We're seeing a bit of a bounce in oil after suffering at
its worst week since 2011. We have that OPEC meeting on Thursday, of course, to discuss extending the production cut agreement that expires
later this month. So there's clearly a lot going on.
Clare Sebastian joins us now. Clare, in addition to the soothing words from Central Bankers around the world, the Italian government, adding $4 billion
worth of stimulus here for companies and consumers and the OECD is saying, more needs to happen and sooner rather than later.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, I think it's interesting. Clearly, the coordinated Central Bank action has sort of eased
some pressure on the markets and I think it's interesting to look at those statements. They were very similar in many ways.
Not only did they come out at the same time, but they all used similar wording -- monitoring developments, act as approach, act as needed. So that
certainly did help the banks, although, it was a very volatile premarket session, as you point out.
But there is still a question about, is that enough? Are lower rates going to prompt people to book a trip or to attend an event? Is it going to help
confidence?
And I think that's why governments are coming in. The OECD, of course, urging governments to do more, to really think about how they're going to
support the industries affected, support their healthcare system.
So I think that is something that certainly the governments are going to be taking notice of. And you point out Italy at as well today.
But if you look at the Dow, most of the stocks there are now in the green. I think there's also some value hunting going on at the moment. Several
tech analysts out this morning saying look, all of this doesn't change the fact that these big cap tech stocks, the likes of Apple, Amazon, Netflix
are all sort of on the right side of history here.
It doesn't change the fact that 5G will be important, e-commerce will be important, streaming will continue to be a big deal. So there are some
people who are looking at this and thinking like these are continuing to be very strong market leaders and now might be a time to get in and get some
value here.
CHATTERLEY: It's going to be another interesting session, something tells me. Clare Sebastian, great to have you with us. Thank you for that.
All right shares in HNA, one of China's biggest conglomerates closed up over three percent in the session today. The government has stepped in to
run the company. It was already battling to reduce a massive debt pile even before the coronavirus outbreak made matters worse.
Companies in China, they continue to face a battle returning to normal after all the precautions taken because of the coronavirus outbreak.
Greg Gilligan is the Chairman of the American Chamber of Commerce in China and joins us now. Greg, great to have you with us. Can you just start by
telling us what proportion of the companies that you talk to you and represent are still operating with some form of restriction to their
activity and output at this moment?
GREG GILLIGAN, CHAIRMAN, AMERICAN CHAMBER OF COMMERCE, CHINA: Julia, the answer is almost everyone because we are working on sort of remedial
measures to return to work and increase productivity.
Ninety four percent of our member companies that responded to a recent survey said they are working in large part from home or remotely where they
can. Of course, that's not true for manufacturing entities that need to have people on the ground in their factories. But anybody who can work
remotely overwhelmingly is.
CHATTERLEY: Are they able to quantify the impact that this is going to have on revenues? Even if we just stagger it, if we say that actually the
restrictions that we've seen and the challenges are in place until April and perhaps even if we extend it even further, if we say by the summer, by
August, are they able in some way to get a gauge of just what the damage will be?
GILLIGAN: How able is a good question, but we're all trying. And so many of our members, I think it's around 43 percent expect that revenues will be
impacted if the situation lasts through the end of April. If it goes through the end of August, then the projected impact would be much larger.
And so, you know, we're working along a couple of different scenarios.
Although many of our members that responded to the survey think that we should be back to work in a very vigorous way by the end of March. There's
only a smaller number, which would be 12 percent in this case, that was anticipating something more severe.
[09:35:43]
CHATTERLEY: You know, it all happened incredibly quickly, and the assumption that we make from outside of China is that targeted support,
stimulus, credit, whatever is required will be pushed through to companies there. What are they saying about the measures in place to perhaps ease
some of the financial conditions for companies? And are you having conversations with those that say if this carries on, we might not survive
it -- a liquidity crunch?
GILLIGAN: Well, so AmCham China has been extremely active with our member companies and then taking everything they tell us and relating it to both
U.S. government and to the China government.
We've had a great deal of meetings, some in person, where I've gone to the Ministries or I've gone to the U.S. Embassy. I, in the last week, I've
interacted with Ambassador Terry Branstad with the Ministry of Foreign Affairs, Vice Minister Zheng Zeguang, Vice Minister of Commerce, Wang
Shouwen et cetera. I could read you a long list of Ministries that we engage with on a daily basis.
So what we're doing is we're taking all of this, the needs and the issues and proposed solutions of our member companies, and then we're in very
close proximity with the government to work through these things with them.
Naturally, many companies are looking maybe for alleviation of tax and some other measures that will help them get through this difficult time.
CHATTERLEY: Greg, I just want to ask you a question about the level of pollution there. For anyone who has been to Beijing, we've seen it in
various degrees of mist and smog, depending on the time of year in particular, but we've also been on social media seeing satellite images of
far cleaner air space, it seems. Is it far cleaner there as a result of the suppression of factory activity?
GILLIGAN: It has definitely dropped off. Sparkling, no, because we've all - - many of us have been self-quarantined. That would include my wife and our children at home, and there's been periods where it's been difficult to go
outside to stretch our legs and such because of the pollution.
But of late, it has certainly gotten much lower, which is a nice thing. Because if you have to limit your activities, at least, you can still get
outside, get a breath of air, see a little sunshine.
CHATTERLEY: Yes. Thank you so much for joining us, Greg. It's so great to chat to you and the best wishes to your wife and children as well. The
Chairman there of the American Chamber of Commerce in China.
All right, we're going to take a quick break here on FIRST MOVE, but when we come back, Pete Buttigieg quitting his White House race just ahead of
Super Tuesday. What his exit though means for the remaining contenders. Analysis, straight ahead.
(COMMERCIAL BREAK) [09:41:43]
CHATTERLEY: Welcome back to FIRST MOVE. Democrat, Pete Buttigieg has given up his campaign to win the party's presidential nomination.
(BEGIN VIDEO CLIP)
PETE BUTTIGIEG (D), FORMER PRESIDENTIAL CANDIDATE: I will no longer seek to be the 2020 Democratic nominee for President, but I will do everything in
my power to ensure that we have a new Democratic President come January.
[APPLAUSE]
(END VIDEO CLIP)
CHATTERLEY: His announcement came a day after former Vice President Joe Biden won the South Carolina primary. Buttigieg finished fourth in the
state after having a hard time winning support among black voters.
Billionaire, Mike Bloomberg did not contest the first four nominating states including South Carolina. The former New York City mayor has focused
on Super Tuesday, the biggest day of the Democratic presidential race when 14 states hold primary. Super Tuesday of course is tomorrow.
Bradley Tusk joins us now. He's the founder and CEO of Tusk Ventures and also an informal adviser to the Bloomberg campaign. Great to have you with
us.
BRADLEY TUSK, FOUNDER AND CEO, TUSK VENTURES: Thanks for having me.
CHATTERLEY: You've been busy.
TUSK: I have.
CHATTERLEY: We'll come back to Mr. Bloomberg. Let's talk about Joe Biden. Is Joe Biden back because I look at Super Tuesday. I look at California in
particular, and he could get whacked there by Bernie Sanders.
TUSK: Yes, I mean, the answer to which is an unsatisfying one for you, but it's made right, so if there is bump from South Carolina, clearly, that
would help him a lot.
But for example, take California as a good example. Early voting has been going on for weeks, in which case in all those elections, Iowa, New
Hampshire, and Nevada, Biden wasn't doing particularly well at all.
So, you know, hopefully for his sake, there is a bump in California and then look at states like Texas and North Carolina, some of the more
moderate states, he really needs to do pretty well to be within spitting distance of a Bernie.
CHATTERLEY: And he was expected to win South Carolina. Let's be clear, to your point, there was a lot of groundwork, wasn't there?
TUSK: For sure. There is no surprise there. An upset. It was a good state for him. But South Carolina finished Biden for George Bush in 2000, and for
Obama in 2008. It has been a firewall for other candidates.
CHATTERLEY: Pete Buttigieg, do you think he'll back Joe Biden here?
TUSK: I don't know. I mean, I think that he has a much more moderate view of the country than Bernie Sanders does. But it probably depends on what's
realistic or not. It may be that after tomorrow night, other candidates whether it's Biden or Bloomberg are still within striking distance of
Bernie or maybe that that's just something that you know, media and pundits like me like to talk about, because it's fun. But their math is the math,
in which case, Pete Buttigieg won't.
I will say, as always, his timing was good and he handled things well, by kind of over performing in the first few primaries, and then getting out
when he did. He looks really good. And he kind of over performed even though he didn't win the election itself.
CHATTERLEY: What does this mean for Mike Bloomberg? Because the analysis instantly turned to the idea of the centrist then splitting the vote and
Mike Bloomberg suddenly becoming a problem.
TUSK: Yes, well, let's see how tomorrow goes. There's a world where Mike does much better than Biden in California. He does really well in Texas,
North Carolina, and other states, and is the best person to take on Bernie, or there's a world where that's Bideen and Mike will have to make a hard
decision.
But having worked with him, for Mike, for the last 20 years in one form or another, I know for a fact that he is going to put what's best for the
country ahead of anything else. That's what makes him different than with other politicians, and that's why he's not really a politician.
CHATTERLEY: Yes. It feels like a low probability world at this stage.
TUSK: Yes, I mean, who knows? The one thing I know about politics is nobody knows anything, right? So you and I can sit here and sound smart and at the
end of the day, everyone is making it all up. So that's one thing I'm certain of.
[09:45:10]
CHATTERLEY: But your point though, I think was important, which was Mike has always wanted to be President. I don't think there's any secret to
that.
TUSK: Yes, sure.
CHATTERLEY: And whoever has known and spoken to him knows that. But at the same time, this was about perhaps, the belief is that it was about being
concerned that Joe Biden couldn't win this.
TUSK: Right. If it turns out that Biden truly has rebounded, then I think Mike would say, that's not a bad thing. Mike got into the race, because at
least at the time, Biden's campaign was imploding, Sanders and Warren were both surging. And Mike's clear view was that would be very hard for Sanders
or Warren to beat Trump in the General Election.
But if Biden turns out is viable, I think Mike would still think he'd be a better President and a better candidate. But certainly Biden is better than
Sanders or Warren.
CHATTERLEY: Can anyone beat Trump here?
TUSK: A lot of it depends on the coronavirus, right? So there are a lot of voters who say, I don't like the way he behaves, but the economy is pretty
good. We're not at war and therefore keep things going.
And keep in mind, no incumbent President in history presiding over a good economy, not been in a ground war has ever lost.
CHATTERLEY: I know. I know.
TUSK: Because the idea is of things are okay, there's no reason to change, you know, captain on the ship. But if the economy is already plunging
because of the coronavirus, and all of a sudden a lot of voters might say, I don't like him and the economy is now failing.
And then it depends on the alternative, right? So alternative is Bloomberg or Biden. Yes, I think they can definitely win. If it Sanders, it still may
not be enough.
CHATTERLEY: So that's an interesting point. Do you think Mike has regrets? He came under fierce criticism after that first debate that he was sort of
lost and he was being beaten up by Elizabeth Warren and there were many ways that he could have tackled her and her background in history and
didn't.
TUSK: Absolutely. Look, so as the person who prepared him for both debates and I take responsibility for the fact the first one didn't go as well as
it should, you know, a few things.
One is, Mike is just not a politician, so it doesn't come naturally to him to go after people and attack or to be talking about healthcare and then
pivot to the NRA or something. That's just not how his mind works.
Second is, no matter how much you prepare, there's nothing in the world like a presidential debate and it moves at an incredible speed and until
you do a couple and get them under your belt, it's very hard to be good at it.
Mike's skill is not debating, talking and campaigning. His skill is running things, whether it's Bloomberg LP or the City of New York. Warren is an
amazing debater. That is her greatest skill. She doesn't really run much of anything, neither has Bernie.
So it really depends on ultimately what the voters want. They want someone who can get things done, Mike is still a great choice for them.
But if they want someone who exceeds the politics, then you know some like Warren is very good.
CHATTERLEY: Reality TV, we focus perhaps too much in the United States on the reality TV aspect of running a country.
TUSK: Yes. Look at what it just got us.
CHATTERLEY: Versus perhaps leadership credentials.
TUSK: And it is funny, a couple of touch points with my preparing for the debate, he and I spent more time talking about what it would be like to run
the Federal government, deal with the bureaucracy, personnel, budget, the actual operation of a four million person business than probably all the
other candidates combined.
CHATTERLEY: But I think one of the big criticisms, and it's a fair one, and you can perhaps address this better than anybody is that none of the
questions there seemed out of what we were expecting. They were all pretty obvious. I think the ones like non-disclosure agreements. It was like, why
weren't you prepared to --
TUSK: You know, he was in the sense that he knew what to say, but the truth is running a Democratic primary, you have certain vulnerabilities if you're
Mike Bloomberg, and if all the candidates are going to spend the first hour attacking you, you're just going to look pretty bad no matter what you do.
CHATTERLEY: And yelling at each other.
TUSK: Yes. And I think in the second debate, where he had his legs under him a little more, he performed much better. So you know, it's not that he
wasn't prepared for these issues. It's that, if you're under attack for an hour, the narrative is so and so got beat up in the debate and that was
invariable.
And look, he's not a traditional Democrat. He's not traditional anything. He's Mike Bloomberg. If the country wants the best possible person to run
the nation, he is your choice, but if you care about traditional politics, then he is probably not.
CHATTERLEY: Yes, his way or the highway perhaps.
TUSK: Yes. Sometimes.
CHATTERLEY: Will he make a decision this week, very quickly.
TUSK: I don't know. I think it really depends on what happens tomorrow. But then keep in mind, on March 10th, there is a whole another slate of really
big states which he has invested a lot of money in both field operations, digital and had been on the air.
And so the data may show that he has a good chance in those states, in which case he might stay in. Look, he has the freedom to do what he wants,
because he doesn't have to rely on with his money, but he also has the integrity to do what's right for the country.
And so I think whatever the best thing is, for the country itself is what holds him.
CHATTERLEY: Great to have you with us.
TUSK: Thanks for having me.
CHATTERLEY: Thank you so much. Bradley Tusk there. All right, after the break, two CEOs are out the door and a third might be headed that way if
recent reports are to be believed. The latest twist with the bearded one with Twitter, next.
(COMMERCIAL BREAK)
[09:51:48]
CHATTERLEY: Welcome back to FIRST MOVE with a look at today's a Boardroom Brief. Motor bike maker, Harley-Davidson looking for a new boss. CEO Max
Levatich is stepping down after the company said its U.S. sales fell last year for the fifth year running. Harley has seen its customer base growing
steadily older and struggling to win younger customers.
Nokia CEO Rajeev Suri seen here on the right to step down after six years at the helm of the telecom equipment company. The Finnish firm has
struggled to compete against Sweden's Ericsson and China's Huawei in the race to deliver 5G networks. Suri will stay on as adviser until next year.
From a CEO that's out to one that might be forced out, Twitter's stock soaring after hedge fund Elliott Management has bought a stake and one
source says they want CEO Jack Dorsey replaced.
Take a look at what we're seeing for Twitter stock at this moment. Wowsers. High up by almost eight percent. Paul La Monica, are the shareholders
telling us something here, Paul?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think what's interesting, Julia is that, you know, Twitter to be fair has had a pretty good run as of
late. I think that investors are pleased with some of the initiatives that Dorsey has taken, you know, the move to not have political advertising, for
example, you know, to try and make the platform a little less toxic than it has been.
But that being said, Twitter suffers from a somewhat unique problem in that Jack Dorsey is not just the CEO of Twitter, he is also the CEO of the very-
well performing payments technology company, Square, and there has been tension there where people wonder, can Dorsey effectively run two companies
at the same time when he is also often in Africa for a large stretch of the year. He is, you know, trotting around the globe doing a lot of different
things.
He is similar to Elon Musk in some respects that he is juggling a lot of balls in the air and eventually, some of them drop.
CHATTERLEY: Yes, and also switching his phone off for several days on a meditation retreat over his birthday. It's like you're either a CEO or
you're not. It's tough.
Perhaps some of the bounce that we're seeing today, though, is about the broader market rally, a bit of a bounce back after the worst week since the
financial crisis last week. Global stimulus hopes, I think feeding in here, Paul.
LA MONICA: Yes, I think that one of the things that I'd be a little worried about here is that yes, we are seeing stocks rebound because now I think,
you know, everyone expects the Fed at their next meeting in a few weeks will cut rates and possibly by a half point to, you know, address the
coronavirus fears.
But as many people have written and I did in a column on Friday, rate cuts aren't necessarily the solution for a biological problem that is plaguing
the world right now and has a lot of people worried and shutting down factories and you know, putting in travel restrictions.
So Central Bankers should obviously do what they can to try and restore confidence, but I'm not so sure how well these plans will work.
CHATTERLEY: I'm firmly with you, Paul. But it's just the symbol it sends, I think perhaps more than anything.
Final question Jack Welch, titan that he is, and of course we heard that we lost him today.
[09:55:10]
LA MONICA: Yes. The news that he passed away. He was one of the top CEOs of the 20th century. Clearly, he did a great job of building GE into the
conglomerate that eventually became, of course, to be fair, some would lay some of the blame for GE's eventual bloated structure at Welch's feet as
well.
And you know, we're now seeing Larry Culp trying to unwind a lot that Welch and other CEOs at GE did to build that up. But to Welch's credit, the
mantra of GE when he was running it was that you needed to either be in first or second. You needed to be a market leader or we're going to get out
of the business and at the time, they were a market leader in just about everything that they were in.
CHATTERLEY: Yes, the legend that was, Jack Welch. Paul La Monica, thank you so much for joining us.
All right, that's it for the show. We have a market rally right now. We'll be back in a couple of hours' time with "The Express," but for now, you've
been watching FIRST MOVE, time to make yours.
(COMMERCIAL BREAK)
[10:00:00]
END
