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First Move with Julia Chatterley

Rising Coronavirus Cases And Downbeat Forecasts Hit Markets; Amazon Suspends Sales Of Facial Recognition Technology To Police Forces; Operation Hope - The Man With A Plan For Saving Middle America. Aired 9-10a ET

Aired June 11, 2020 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:05]

CHATTERLEY: Live from New York. I am Julia Chatterley. This is FIRST MOVE and here is your need to know.

Second wave selloff. Rising coronavirus cases and downbeat forecasts hit markets.

Issue recognition. Amazon suspends sales of facial recognition technology to police forces.

And Operation Hope. We speak to the man with a plan for saving Middle America.

It's Thursday. Let's make a move.

A warm welcome once again to FIRST MOVE, where we discuss, as always some of the big challenges and the risks facing the global economy, and here in

America those things are front and center.

Let me give you a look at what we're seeing for global markets at this moment, and you can see it -- red across the board. That's the name of the

game at this moment.

I think global markets reflecting caution. We've got Dow futures off by more than three percent. Tech stocks are in the red. Europe down around

three percent. Asia weaker, too. Japan's Nikkei closing down by almost three percent.

Nothing of course, when you compare to recent gains. The major U.S. averages are up by some 40 percent or more from their March lows. That

dramatic rebound in no way reflects the economic reality being faced for millions of families.

That message underscored by the latest jobless claims data here in the United States. Another 1.5 million American workers filing for first-time

benefits last week. That brings the total to over 44 million people since mid-March. The number of people collecting benefits remains stuck at over

20 million people.

Fed Chair Jay Powell saying yesterday he fears that millions of these jobs may be gone for good, and new Fed projections show rate hikes off the table

until 2023, at the earliest. That gives you an indication of how long recovery might take. A sobering assessment.

Let's get to the drivers. Christine Romans joins us now. Christine, we say it, you and I often, the stock market is not the U.S. economy, and again

when we look at the data that we get today, that reflected well and truly. And I think Jay Powell brought that home again yesterday, too.

CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: I think you're just so right. I mean, Main Street is seeing something it has never

experienced before. Millions of people in a matter of weeks out of a job, and a health crisis at the very same time.

So, this is a really unique situation. There's no playbook for it at all. And the snap back that you've seen in the stock market this early summer

really does not reflect the way people are feeling on Main Street and the uncertainty among so many of those people who have lost their jobs.

When you look at the people who were working in the beginning of March, the pre-pandemic workforce, 27 percent of those people have filed for the first

time for unemployment benefits, and you're so right to point out that continuing claims number, 20.9 million people continuing to get jobless

claims.

We want to see that number start to trend lower. That's probably the better indicator of where we're going in the economy in the jobs market and that's

just stubbornly high here.

When I look at comments from the states, they're allowed to give comments to the Labor Department about what they're seeing. They are seeing fewer

layoffs in places like retail, healthcare, social assistance and manufacturing in some states.

But overall, 1.5 million first-time unemployment benefits filed in one week, that is something I can't even believe -- three months ago I never

thought I would say that sentence and that has become routine now.

CHATTERLEY: Yes, it's routine anguish, I think every Thursday when we see these numbers come through. It's interesting coming into this, though, a

lot of people off the back of the jobs number and the net 2.5 million jobs that were regained in May to the surprise of many, suggesting that actually

these numbers now are sort of backward looking because we have no real sense of how many of these people that filed for first-time claims are

actually going to be reabsorbed back into the jobs market.

And I think actually that's a mild way of looking at this, because this number, when we're talking about more than 44 million people, job insecure

in some way, may have lost a job, lost hours. That gives you an accurate reflection of the scale of this crisis, if nothing else.

ROMANS: And the scale is just enormous. I mean, you know, some of the surveys have found that up to half of American families have suffered some

loss in income over the past three months due to the virus.

I mean, half of American families. That's simply astonishing, and Jay Powell very clearly said until the consumer feels confident and will go out

and spend, that will hold back the recovery.

[09:05:05]

ROMANS: So, you've got less buying power and maybe that's psychological or maybe that's simply because they actually have less money, or they're

afraid to go out and spend or they've changed their behaviors.

Until we get into a more steady rhythm, I think it's the chicken and the egg, right? I mean, can the job market recover if the consumer doesn't feel

good, and can the consumer feel good if the job market doesn't recover.

CHATTERLEY: Absolutely and particularly at a time when we're seeing 12 American states seeing an increase in hospitalizations for COVID-19. That

sense and the fear of a second wave filtering in, I think some of the caution, but the accurate caution we're seeing reflected in the stock

market, at least for today.

ROMANS: Yes. Today is going to be kind of an ugly start, I think, in the next 25 minutes or so, but it has been a good run, as you rightly point

out. It's been a 40 percent run since the lows in March. So, you know, these things don't go straight up for sure.

CHATTERLEY: No. V-shape recovery for stock markets feeling very L-shaped at the moment. Down and then across for the real economy, which I think is

the key. Don't mistake the two.

Christine Romans, thank you so much for that.

ROMANS: Nice to see you.

CHATTERLEY: Now, as protests against police brutality in the United States continue, the Trump administration is reportedly considering an Executive

Order on police reform, though it's unclear what that might contain.

John Harwood is at the White House for us and hopefully you can shed some light, John. The President ten hours ago tweeting the simple words "law and

order." We get that part. Everyone wants law and order, but that doesn't mean we can't see reform, too.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: That's right, but that's not where the President's instincts lie, Julia. The President's political

strategy has always been grounded in racial division. It continues to be.

Now, he is going to travel to Dallas today to sit down at a white evangelical church that is the political equivalent of the underground

bunker at the White House. It's a safe space for the President. White evangelicals are his strongest group of supporters, even though he has lost

an altitude with them, still an 80 percent approval kind of situation.

The President may at that session outline some of the reforms that he might accept if Congress passes them. He may indicate what elements of an

Executive Order might be on the same subject.

But we know from the President's summary rejection of even debating the idea of renaming military bases named after Confederate generals that he is

not interested in that reconciliation kind of message.

Conservative institutions like the U.S. Military and NASCAR are trying to - - scrambling to keep up with public opinion and engaging in that debate. The President says no, I don't want to.

He just tweeted a few minutes ago that the protesters that the Federal officers fired on with teargas and rubber bullets last week were anarchists

and agitators and Antifa rather than people peacefully protesting the aftermath of George Floyd's death.

So, the President, who is trailing Joe Biden in the polls by a large margin, clearly sees his political future, as well as his own just natural

instincts, in division rather than unity. And that's what the former Defense Secretary Jim Mattis condemned him for last week.

CHATTERLEY: Absolutely, and so many challenges, just one of many here, to your point, a public consensus now that is pushing for reform and that

shift has happened incredibly quickly.

The economic challenges that the claims data once again underscores today and the final thing, the data on COVID-19, two million cases here in the

United States. But perhaps more importantly, as I mentioned with Christine Romans there, 12 states now where we're seeing rising hospitalizations.

There's multiple things that he needs to address and tackle.

HARWoOD: Well, Julia, that just shows you how deeply the President has gone in on that strategy that I talked about. The economy is a mess, but we

did have some good jobs numbers a week ago. But he has all but forgotten the issue of coronavirus, which of course could throw economic progress

into reverse if we get a sustained spike in the fall.

But the President is not even paying attention to that. His Vice President, Mike Pence, last night tweeted out a picture of his campaign staff all

without masks on, densely packed in, completely heedless, even though Mike Pence heads the Coronavirus Taskforce of the public safety implications of

conveying that message.

So, the White House has got one idea that the President is pushing, and it's one that is at odds with the evolution -- very rapid evolution that

you mentioned of public opinion in the aftermath of George Floyd's death.

[09:10:04]

CHATTERLEY: Yes, three rolling crises, at least, none of which are going away. John Harwood at the White House for us there. Thank you so much for

that.

Amazon, meanwhile, suspending use of its facial recognition technology by the police force for a year. The company is calling on Congress to

strengthen regulation amid criticism that the technology exhibits racial bias.

Clare Sebastian joins us now. Clare, it's not often that a giant tech company like this calls for greater regulation. The ethics surrounding this

technology key, and it's not a new issue, the criticisms of racial bias and the use of this technology, but suddenly Amazon taking a stand.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia. Interesting that they're doing this given that they've faced criticism and backlash

internally. There were several shareholder resolutions last year, and backlash from Civil Rights groups, from academics who published studies

showing that there is inherent bias in these systems, particularly affecting people of color.

But now, they are saying as you say, they are suspending this for one year. They say that the reason is they are advocating that government should put

stronger regulations and they think a year should be enough time for Congress to enact policies around these.

They say given the momentum in recent days, we know that House Democrats, for example, put forward a Bill on Monday on broader police reform that

included a measure on limits on use of facial recognition technology when it comes to body camera footage. So, there is momentum from Congress on

this.

Amazon though did not say that they were going to do anything themselves in this very short statement to try to improve the accuracy of their product

or test it for bias or anything like that, and this comes -- they're not the only ones, Julia -- after IBM on Monday said that it was exiting facial

recognition products and called on Congress for stronger policies to tackle the issue of bias in this and accountability when it comes to its use in

policing.

So, there's definitely momentum around this. But this is the strongest statement from Amazon yet on what they're going to do to try to tackle this

issue.

CHATTERLEY: It's interesting to look at some of the political response as well, because the House Committee on oversight and reform have obviously

been looking into this.

One of the members, Representative Jimmy Gomez said at the announcement from Amazon, they're saying that we've been asking Congress to put

guardrails on the use of this technology, but every time we tried to get more and more data, they stalled and we had to have hearings to make

movement on the issue.

Amazon clearly not here to defend themselves, but if you want to see regulation and want to work together on regulation, you've got to provide

the information, too.

SEBASTIAN: Yes, Julia. Amazon has a limited list, it is interesting to note, of customers of AWS's Rekognition with a K software and that includes

the Washington County Sheriff's Office in Oregon.

But it's a limited list. We don't know how many other police or law enforcement departments are using this and that same representative, Jimmy

Gomez, says also on Twitter that this is a good start, but there are lots of unanswered questions on who they sold that technology to and how it's

being used.

I think the problem here is that the stable door was left open. The horses already bolted and now Congress is trying to catch it.

Facial recognition is already out there. Amazon's technology is already being used and I think playing catch-up here is going to be extremely

difficult when it comes to regulating this.

CHATTERLEY: That's such a great point, Clare, trust in technology, not necessarily about the technology itself, it is how the technology is used.

Such an important point. Thank you. Clare Sebastian.

All right, on to Japan's richest man now who has told CNN that for all the huge challenges right now, where there's pain, there's also possibility.

Tadashi Yanai is the CEO of Fast Retailing which owns Uniqlo and he spoke exclusive to our Kaori Enjoji about life after COVID-19 and the situation

that the United States faces at this moment.

(BEGIN VIDEOTAPE)

TADASHI YANAI, CEO, FAST RETAILING (through translator): If we kept our stores closed, the whole city will die. It was much worse in China where we

closed 390 stores. But we kept 300 open and it took excellent preventative measures.

Not a single employee was impacted. That's why I was confident we could do it. Someone needs to have the courage to go first.

KAORI ENJOJI, JOURNALIST: But this is a once-in-a-century crisis. What has changed at your company or what needs to change?

YANAI (through translator): We are looking at our performance and why we matter. As a company, we are asking ourselves why we exist. The biggest

crises can be our biggest opportunities.

ENJOJI: Does Fast Retailing need to let go of jobs?

YANAI (through translator): We are a Japanese company, so we value jobs. I think it's the most important thing. Maybe things are different in the

U.S., but I don't think there's a single company that did well over the long run by cutting jobs.

Instead, I think we can overcome this by creating value and working in a way that justifies keeping the jobs we have.

ENJOJI: How much damage -- real damage -- have you suffered from the protests in the United States? And are you concerned this is going to be a

long-term phenomenon?

[09:15:20]

YANAI (through translator): We were hit in a few of them at Denver, L.A., San Francisco and even New York.

It shows how devastated the U.S. spirit is. The whole situation is untenable. It's not working. They should have thought about what would

occur once something like that happened after a long period of keeping everyone locked in.

The very image of America is breaking. I truly hope that this will have a positive impact in the long-term, just like the Civil Rights Movement did.

ENJOJI: Does this mean that you will shift more faster online?

YANAI (through translator): I think that the more we move online, the more we will have to go back to basics and make our physical stores relevant.

Otherwise, we won't sell.

(END VIDEOTAPE)

CHATTERLEY: All right, still ahead on FIRST MOVE, a big meal deal, the takeaway takeover that could be history in the making.

And the future in their hands. We speak to the CEO who has devoted his life to empowering low-income communities through education called. It is

Operation Hope. Stay with us.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE live from New York where we're looking at a sharp pullback at the market open today, adding to the losses

seen for the Dow and the S&P for the last two sessions.

Tech stocks, as you can see, also under pressure after the NASDAQ closed above that 10,000 level for the first time in Wednesday's session. We've

also got pressure on travel-related stocks, too. Those set to tumble after recent sharp gains.

In fact, futures have been sharply lower all morning on new concerns about the economic and the health risks from COVID-19, fears of course

surrounding a potential second wave.

Well, we also saw an additional 1.5 million people filing for first-time benefits last week, continuing claims which measures the amount of people

actually receiving benefits remain stuck at over 20 million individuals.

[09:20:25]

CHATTERLEY: The Fed making it clear once again yesterday that it's a hundred percent committed to getting the jobs market back to full strength.

Jay Powell says rate hikes off the table through 2022. He also noted the suffering of minority workers reliant on service sector jobs that have been

disproportionately hit by COVID-19.

Mark Zandi joins us now. He is Chief Economist at Moody's Analytics. Mark, great to have you with us. Just square what we saw today with the ongoing

escalation in initial jobless claims with the data that we got on Friday showing 2.5 million workers net coming back into the workforce in May.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Sure, Julia. So, the claims for unemployment insurance measure the number of people who are

losing their jobs, getting laid off and then asking for help. That does not account for the folks that are being rehired.

So, as businesses reopen across the country as they did during the month of May, people got hired back.

So, the job number reflects the net of that, the number of people that are getting laid off less the number of people that got hired. Unfortunately,

in the month of May, there were more hires than people who got fired.

So there are still a lot of people losing jobs, but fortunately with businesses reopening, we're getting some hiring and right now, we're

starting to see some improvement in the labor market.

Still, you know, we have a very deep hole here, a long way to dig out, get back to anything anyone would consider normal. But at least we started

digging out.

CHATTERLEY: Right. We're on the first steps on the path to recovery of some sort. But even you were skeptical after this Friday's numbers saying

that, look, given the noise level and the shift and the transition that we're seeing, some of those jobs could be revised away.

Just give us a sense of what and if your view has changed on where we are by yearend. That gives us some time to recover and reopen.

ZANDI: Thank you for the question, Julia. No. My view based on the May job number, which was better than anticipated about the rest of the year has

not changed. All I think that happened was businesses opened a bit faster than anticipated. When I say a bit, I mean a week or two, and that makes

all the difference in these estimates of jobs.

So, it just pulled forward job creation that we would have gotten in June and July. But the total number of jobs that are going to be created here as

businesses reopen hasn't changed in my view.

We're going to get half of the jobs we lost back in March and April, back in the next few months.

And then on the other side of Labor Day, I think things go sideways. I don't think the economy goes anywhere fast until we get on the other side

of the pandemic. And that means unemployment is still going to remain high.

So, the Federal Reserve came out with a forecast yesterday and said by the end of the year, the unemployment rate is going to be just south of 10

percent. That's precisely equal to my forecast. I think that's roughly where we're going to be and that's pretty bad.

I mean, in the very worst of the financial crisis back a little over ten years ago, the unemployment rate peaked at exactly 10 percent. So, we're

just getting back to that pretty ignominiously bad number.

CHATTERLEY: Do you think the biggest danger here is some form of complacency, particularly on the part of Congress here, perhaps thinking

that look, we've seen the worst now, we're regaining jobs. Things will be okay. And Jay Powell seemed to do his best yesterday to deflate that

expectation as best he could.

ZANDI: Yes, I know. Exactly. I do worry about that. You know, I don't think lawmakers, Congress and the administration should take the message

here that the economy is off and running and that they've got this V- shaped, straight line back to where we were kind of economic recovery dead ahead of us. That's not what's going to happen here.

This is going to be a slog. And in fact, I would go so far to say if Congress and the administration can't come up with more support for the

economy, more help to the unemployed workers, more aid to state and local governments to fill their budget holes -- because they are massively laying

off their workforce -- then the odds of going back into a recession are pretty high, even if we don't experience a second wave.

Now, fortunately, we heard some good things coming out of the administration, particularly Secretary of Treasury Mnuchin. He seems to be

coming around to the idea the economy needs more help. And obviously, I'll point out the obvious.

This is a presidential election year and the politics would suggest that they would get it together and pass some more help for the economy.

CHATTERLEY: Yes, that should deflate any skepticism on the Republican side of surely providing more support here, too.

If we just go back to what we saw on Friday as well and the net job gains, is that also an argument that the $600.00 a week bump-up that we've seen in

unemployment benefits is not having a significant disincentive effect of preventing people coming back to the workforce because in many cases, we

believe they are actually better off on unemployment insurance than they might be working.

How worried about that are you and how do you get around that issue if it exists?

[09:25:21]

ZANDI: Yes.Great point. There's no evidence, at least not in the jobs numbers, that the $600.00 bump in UI benefits is having any significant

disincentive effects.

I mean, I'm sure you can come up with anecdotes and examples. I'm sure there are some folks out there that aren't going to go back to work because

they're going to get paid more for a month or two on UI, but I don't think that adds up to anything that has a broader macroeconomic effect.

So, I think that is a stretch. I don't really think that's an argument.

Now, having said that, I do think going forward, as the economy begins to improve, we do want to reduce those amount of benefits to make sure that

people do go back to work as jobs become more available.

So, I don't think it's a problem at this point, but we do need to think about that as we move forward and as the economy continues to improve.

CHATTERLEY: Yes, I'm clearly showing my bias here. All politics aside, that more support is required and there are no excuses here because this is

a long story of recovery.

ZANDI: Yes.

CHATTERLEY: Mark, great to have you with us, as always. Mark Zandi, Chief Economist for Moody's Analytics.

ZANDI: Thanks so much.

CHATTERLEY: Great to have you with us. A quick look once again as we head toward the market open. We are seeing some significant red across the board

as you can see. The Dow approaching losses of some 3.5 percent premarket.

It doesn't counteract the 40 percent plus gains that we've seen since the lows, but some concern here about the economics, but also about the risk, I

think, of a second wave.

Plenty more discussion to come after this. Stay with us. The opening bell next.

(COMMERCIAL BREAK)

[09:30:00]

CHATTERLEY: Welcome back to FIRST MOVE." I'm Julia Chatterley. That is the opening bell this morning and I have to say, I see red across the board.

The focus, for today at least, the health and economic uncertainties facing global economies. Fed Chair Jay Powell said yesterday that he is cautiously

optimistic that the jobs market has hit a bottom here in the United States, but the latest jobless claims numbers show continued pain and uncertainty

for U.S. workers at the very least.

An additional 1.5 million people making fresh claims for jobless benefits last week, continuing claims. Those that are already getting benefits,

still stuck above 20 million workers.

Today's sell-off pushing the NASDAQ below that 10,000 level once again. Amazon and Apple are falling from record highs. Tesla, which rallied to

more than $1,000.00 a share yesterday is pulling back from record levels, too. Though those shares are still up some 140 percent this year, most

recently on hopes for mass production of its new electric truck.

Paul La Monica is here with more on the market reaction. Paul, great to see you. Not discounting the 40 percentage point plus gains from the lows here,

some of the uncertainties here taking a bit of a shine off what is being priced by stock market investors and that's a V-shape recovery -- dramatic

recovery.

PAUL LA MONICA, CNN BUSINESS REPORTER: Exactly. Yes, I think investors had maybe gotten ahead of themselves, expecting this V-shaped recovery based on

the notion that we have all this stimulus coming from the Fed, as well as Congress and that maybe the COVID-19 pandemic, things would start to

diminish as we head into the latter part of the year and so many states reopening.

But now, with reports of all of these new cases in a lot of states, you do have these worries about a second wave and I think, given how rapidly the

market has run, the V-shaped recovery, I hate to say it, but I think it's a myth.

A lot of people I talk to have talked about the so-called Nike shaped recovery, where it's going to be a more gradual move up, kind of like a U-

shape instead of a V. And now we have to worry about the W shape. Are we going to double dip?

CHATTERLEY: I think the key point for investors though is that Jay Powell stands ready and he reiterated that yesterday. So, if it's a stronger than

expected recovery, it is good. If it is a worse than expected recovery, you've got a backstop in the form of Jay Powell.

So I'm still skeptical about what kind of pullback we can see for stock market investors and my big concern is the underlying economy here. But

we'll reconvene on that conversation because I want to talk to you about Grubhub. There's deal making going on despite the concerns.

LA MONICA: Yes, Grubhub had been rumored to be in talks with Uber, which the ride sharing giant also owns Uber Eats. But that deal didn't happen.

Instead, Grubhub, which also owns Seamless, popular in New York City is merging with a company called Just Eat Takeaway based in Europe. So, this

is just the Takeaway's first foray into the U.S.

The good news for Grubhub is that they remain semi-independent. They are not part of the Uber juggernaut, but the problem I think for Uber investors

is that competition doesn't decrease in the food delivery business, because Just Eat Takeaway didn't have a U.S. presence.

So, all the concerns about Grubhub dealing with Uber, as well as Door Dash and Post Mates -- that doesn't go away because you're not removing a

competitor from the market the way you would have if Uber and Grubhub had consolidated.

CHATTERLEY: Yes. No diversification of income here for Uber. But the challenge, of course is that, when you're talking about this cross Atlantic

deal, the competition authorities will be calmer about this deal and that's the challenge.

Paul La Monica --

LA MONICA: Regulators are all happy at this point.

CHATTERLEY: Yes. Exactly. Paul La Monica, thank you so much for that.

All right, let's move on. Silence is violence -- it is one of the slogans of the Black Lives Matter protests and now it looks like U.S. shoppers

agree.

An Edelman survey found that 60 percent of Americans will buy or boycott a brand depending on how it responds to the protests. It also found that

Americans want brands to act. Sixty three percent of Americans say a statement on equality that is not followed by concrete action is

exploitative.

Richard Edelman is the CEO of Edelman and joins us now. Richard, great to have you on the show. I shouldn't be surprised by those statistics, but

actually I am.

The idea that people will actually take time to look at a brand and look at what their message is and their equality stats are and put their money

where their mouth is, is good news to me.

RICHARD EDELMAN, CEO, EDELMAN: Look, Julia, the key change here is that the risk-reward for brands has fundamentally shifted.

[09:35:09]

EDELMAN: That raises the third rail for marketers, never talk about it. Now by four to one, Americans say that they will put more trust in a brand

maybe than lose trust in a brand if the brand acts. And that's the key point.

We can't just communicate. We can't just put up ads. We have to have brands that do something. For example, Ben & Jerry's is employing people who have

had misdemeanors and spent time in prison, and that's an action.

And similarly, Shea Moisture is putting money towards Lancome small business in a foundation. That's an action. We want brands to do something,

not just talk about it.

CHATTERLEY: That hits the bottom line in terms of consumer behavior. What about workers? Because there's also a significant proportion in this survey

of workers that are saying, look, if I don't agree with the ethics and the morals and the approach of a business, I'm not going to work for them.

This is critical, too. These are other stakeholders.

EDELMAN: So, actually, the pyramid has flipped upside down, meaning that if you see the pyramid of the elite, and now the people who work at the

company have a voice and are using it.

And in fact, they're voting with their feet. They're not going to work for companies that don't stand up and speak up on this all-important issue.

And it's more than 50 percent, whether you're white, whether you're black, whether you're Hispanic. Everyone wants to work for a decent company that

educates, advocates and inspires on racism.

CHATTERLEY: What about politics here? We can't escape the fact that it's an election year, that the President is potentially looking at an Executive

Order to tackle some of these racial issues. What do the politics mean in terms of views on this?

EDELMAN: So, by two to one, Republicans say that they'll put more trust in a brand that acts on racism, by seven to one for Democrats. So, it seems to

me a fairly across-the-board signal to brands that it's time that they take the torch.

It used to be that CEOs would speak up, talk to their employees, and that was it. Now, we need brands, because brands have a special relationship

with consumers. They inspire us. They show us the future. They give us hope, and that's the difference.

It is a repetition that we have to have. It's not just a one-time statement and then I also want brands to recognize their power in using small

business supply chain, in making sure that they do things.

Example Unilever is actually putting goods into a drugstore. A lot of the drugstores were affected in the protests a week ago, and so for July 4th,

Unilever is putting a drugstore to reopen with its products. That's smart. That's good business.

CHATTERLEY: Does it reach the Boardroom? Does it touch efforts to raise some of the lowest-paid workers for some of these businesses? Because what

I still hear and read is deep skepticism that for all the push, all the change, all the action that we appear to be beginning to see, it doesn't

reach those two extremes of where the inequality exists.

EDELMAN; Julia, I think that this is a change moment because of COVID, because of unemployment, because of George Floyd, that abhorrent act, and

because we have political strife.

And so this is the turning point. And I think Boards recognize that this is a major risk factor for companies and their brands if they don't act.

You are starting to see Boards push CEOs to take the chance, and in fact, the risk is much less of acting than not acting. That's the big shift.

That's why our research is so profound. We need to persuade the CEOs that they must move forward on this issue.

They have to fix their own house. They have to inspire, and they also have to fix their communities. And they have to pay real attention to that last

point of building community capacity, putting their top execs into seats on the Boards of local NGOs so that they can help deliver that last mile.

And also, use their advertising power so that there are black and Hispanic faces in the ads and that they are not just actors or athletes, that they

are normal people living good lives and showing us that, in fact, we do have an America that we can believe in.

[09:40:03]

CHATTERLEY: Something to aspire to. Hope. Richard Edelman, CEO of Edelman. Sir, I hope you're right. Great to have you with us, and thank you so much.

It was a pivotal survey.

All right, still to come on FIRST MOVE, and speaking of hope, financial education as a way to provide equal opportunities for everyone.

We speak to the CEO of Operation Hope. That's next. Stay with us.

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CHATTERLEY: Welcome back to FIRST MOVE. Changing the system starts with providing equal opportunities early on.

Operation Hope is the largest nonprofit organization that supports financial inclusion here in the United States. It provides free services to

young people on low and moderate income, like helping them start and grow a business, raise their credit score, even help buying a home.

And it has big partners such as Bank of America and JPMorgan.

John Hope Bryant is founder and CEO of Operation Hope. He has advised numerous White House administrations. He is calling now for both parties in

Congress to step up, boost low income families. Introduce incentives to firms that provide work opportunities for young people from underserved

communities among many other things, and I am excited to say John is now with us.

John, fantastic to have you on the show. You are a busy man. That just scratches the surface of what you've got going on. Put Operation Hope and

your ambitions in your own words, please.

JOHN HOPE BRYANT, FOUNDER AND CEO, OPERATION HOPE: Our mission is to change the world and eradicate poverty as we know it in our lifetime that's

why were founded after the Rodney King riots in 1992.

Our mission is much more practical now in the backdrop of COVID-19 and the national civil unrest. We desire to be and we will be America's financial

coach, the Starbucks of financial inclusion, the Walmart of economic empowerment, the private banker for the working class and the struggling

middle class.

[09:45:08]

BRYANT: Many of those, as you know, with too much month at the end of their money, which is most Americans. Seventy percent of all Americans live

from paycheck to paycheck before COVID-19.

And so now, everybody is feeling the pain, increasingly the color -- as I keep saying, it is not black or white as in race or red or blue as in

political party, but the color green and we all want more of that.

A lot of our frustrations right now is because people don't have enough of it and they're stressed out about it. And this is a problem we can actually

solve.

CHATTERLEY: I love that phrase, this is not about black or white, this is about green. I'm assuming you mean the color of U.S. dollars and money and

how can people accumulate wealth.

But this is such an important point, because poverty in this country is vast and it's been exacerbated by COVID-19 and in many ways it's

colorblind. There are a lot of poor people in this country of all colors.

BRYANT: There are more poor white people in this country, Julia, than poor anybody else. The biggest recipient of transfer payments in this country,

call it welfare and other things, are my white brothers and sisters, not African-Americans, which is the perception in minorities.

And this goes back to the Civil War when poor whites were brought here from Europe and they were treated just like blacks as indentured servants, just

that whites were able to buy themselves out of servitude and blacks were essentially indentured servants for life, and this created the wealth gap

we have today where 40 years ago, I worked my tail off, my ancestors did, and somebody else got the fruits of their labor, a reverse transfer of

wealth.

I worked hard and the big man's house got bigger. So, now you have less than 10 percent -- African-Americans have less than 10 percent of their

worth than their white counterparts working just as hard.

And we also didn't get the memo on money. The Freedman's Bank of 1865 which Abraham Lincoln created after the Civil War to teach freed slaves about

money. We call it financial literacy today.

So the reason I love Math is it doesn't have an opinion and what we're talking about now is just Math. It's just what happened and we can again

reverse that.

CHATTERLEY: Okay, there's so much in there. Let's talk about your plan for reversing that. It is a Marshall Plan. You're saying it's something that's

needed on broad scale to raise the lowest income earners in this country and just give them a working wage effectively.

But it goes way beyond that to incentivize getting workers into the workforce. Talk me through this because I know you've presented this to

politicians on both sides here.

BRYANT: Yes, and I've also presented it to the White House and there's some traction for it broadly in the private sector.

Look, America has not had a middle class wage increase or a working class wage increase effectively since the '70s. And so, this is a way that a

living wage for all is one of the attributes of -- take the earned income tax credit and basically let Main Street get a bonus for working just like

Wall Street.

You work hard -- not a giveaway program -- you work hard, you play by the rules, you do the right things, and you get a 20 percent boost in your

annual wage. So, that takes the poor and makes them the working class. It takes the working class and makes them the working middle class. It makes

the middle class and makes them the real middle class with one parent working and one parent to actually raise children at home.

And we only pay for this versus being on the back of small businesses. The businesses have been pushed back on increase of wages because they say I

can't afford it.

This would be burdened by all Americans, small tax increase raising all wages. Education for all are due. I mean, you cannot have a world-class

nation that has a high school education. I mean, it just doesn't work. Half of this country is high school educated. No wonder we have bias and racism

and ignorance.

Education banishes ignorance and discrimination in many places. A rubber band once expanded never returns to its original size. You know that being

an international correspondent.

So, we have got to have K through college education, not K through 12. Financial literacy for all. How can you be the largest economy in the world

and not give people the memo on money? Julia, people don't hate rich people, they hate a game system.

How did the rich people today become rich? So, we need to give everybody once again, a shot, if you will.

CHATTERLEY: We see a lot of anger today. I mean, some would argue that anger got us to the point of seeing Donald Trump elected, it was a certain

subset of angry people that felt like they didn't have a chance and they didn't have hope and we see another subset there of angry people today.

And I think we have to separate 400 years of racial injustice from an underlying inequality problem that's creating anger. What do you make of

what's going on today and the anger that we see? How does that need to be channeled?

[09:50:10]

BRYANT: It's a tipping point, Julia, and anger is not a strategy. And frustration is not a business plan. You can't be angry for a living. Anger

doesn't pay a bill.

So, if you look at this from the lens you just brilliantly articulated, really my white brothers and sisters, the poor whites in the rural areas,

the Industrial Revolution walked away from them 60 years ago.

We paid them no attention, including African-Americans. Dr. King was the only leader trying to get everybody together and he was killed in '68

before his first march that was important to his campaign.

So, in many ways, three and a half years ago, my poor white friends were really rioting at the ballot box. Civil unrest with the ballot box. They

were bummed out. Get somebody in there who will shake them up. They didn't even know who he was -- just hire them, okay.

It was frustration with anger. It wasn't a strategy. I'm not saying that we could have had the same reaction, not a response. African-Americans and

others really had civil unrest and rioting in the streets.

We respond differently, but it's the same thing. It's frustration. We can't handle another one of these moments, Julia. We're at a tipping point, an

inflection point, and America is better than that. We reinvent ourselves every hundred years. It is about time for a social upgrade.

I believe in a Marshall Plan very much like after World War II where we channel all of this frustration and negative energy into something

positive, into something productive. And that's what my new Marshall Plan suggests, what Operation Hope is doing on the ground.

Our website crashed three weeks ago because of all of the people trying to get our resources in 22 states and growing. But we are now expanding

resources with additional support.

So I believe in rainbows after storms, and this can be the rainbow after the storm.

CHATTERLEY: I think you're aptly named. Hope is what people need at this moment and an action plan, to your point.

I have about 20 seconds. Very quickly, what response have you had from the White House? Because I agree with you, change needs to happen now. Are you

getting positive noises?

BRYANT: I am getting positive noises, but the White House can only deal with three to five things at a time and I'm trying to get my proposal up to

one of those three to five things.

So, we need the public to sort of rally in the White House and say listen to what John Bryant is doing. I am getting traction. I am getting support

amongst staff. There's no one who disagrees with this. We just need to get this to the top of the inbox. This is on the urgent. We've got to make the

important feel urgent. That's the key here.

CHATTERLEY: We'll keep reiterating the message. Come back in a few weeks and we'll talk about progress. John, amazing to speak to you. John Hope

Bryant of Operation Hope. Sir, you're the best. Thank you.

All right, more to come. Stay with us. We're back after this.

[09:55:02]

CHATTERLEY: Welcome back to FIRST MOVE. One more look at what we're seeing in terms of price action here for U.S. markets.

All the major averages suffering losses of over two percent as you can see, taking back some of the recent month gains over the past few months.

Boeing is actually the big loser in the Dow, right now, down some seven percent. Some of the travel stocks that also have been rallying over recent

weeks losing a bit of steam here, too. Economic damage caused by COVID-19. The leading concern here and of course, we've had U.S. jobless claims data

rising by a further 1.5 million people.

The number of people getting benefits stubbornly over that 20 million people level.

That said, Treasury Secretary Mnuchin saying today that the U.S. cannot afford to shut the economy down once again. So, we have to manage these

rising cases as best we can.

That's it for the show. I'm Julia Chatterley. Stay safe and I'll see you tomorrow.

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