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First Move with Julia Chatterley
D.C. Talks Continue, But Too Late for Thousands of Airline Workers; Tokyo Hardware Glitch Spring Stock Trading to a Halt; Golden Week Getaway with China Embracing the Benefits of a Staycation. Aired 9-10a ET
Aired October 01, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:34]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York. I'm Julia Chatterley, this is FIRST MOVE, and here's your need to know.
Stimulus struggles. D.C. talks continue, but too late for thousands of airline workers.
Tokyo takedown. A hardware glitch spring stock trading to a halt.
And Golden Week getaway. China embracing the benefits of a staycation.
It's Thursday, let's make the move.
Welcome once again to FIRST MOVE. Fantastic to be back with you. We are now what? Thirty six hours after the U.S. presidential mudslinging match, and
perhaps the only thing we aren't left debating is the benefits of a mute button. We've got all the latest on that.
Nothing muted, however, about Singapore's efforts to galvanize its tourism sector and big news from South Africa also today. We're going to be taking
you live to both places for the latest.
For now, though, the curtain rising on a new trading month and quarter, the final quarter in fact, of 2020. Wow, we are green as you can see premarket
in the United States a positive handover, too, broadly from Europe as well. While in Asia, China, South Korea and Hong Kong were closed for the
holidays.
Obviously, we had the technical glitch in Japan, too, which we will explain shortly. The big question, of course is, can we add to the Q3 gains that we
saw? Here in the United States, we are talking seven percent plus across on Wall Street. The answer here at least probably lies to a larger extent in
Washington, D.C.
The emergency aid talks continue. The noises are good. The price tag though is high and perhaps still too high for many of the more conservative
Republicans. Washington's inaction is costing jobs today.
The major U.S. airlines have already announced 30,000 job cuts, thousands more are at stake. They were hoping for an extension of the CARES Act aid
money. There is bipartisan agreement and that's the heartbreaking thing.
But it follows Disney's decision to cut 28,000 workers this week. They cited simply a lack of clarity over when life will return to normal in
addition to the impact on their theme parks business. The bounce back recovery is slowing and this is key.
Data this morning showing more than 26 million Americans continue to collect some kind of employment assistance from the government. More than
830,000 more claiming first time benefits in the past week. We're seven months into this crisis.
We'll get the definitive word on jobs tomorrow when the last U.S. payrolls report before the presidential elections is given.
Let's get to the drivers. Christine Romans joins us now. Christine, great to have you with us. I think you used a great word on social media,
dizzying -- a dizzying level of job cuts just in the last 48 hours, and no help insight from Congress.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: No, and look, a job is probably the most important thing in this economy right now.
Everything flows from that: the ability to pay the bills, the ability to keep the household solvent, and the jobs crisis has just been unrelenting.
You look at that 837,000 job cuts. There are layoffs, first time unemployment benefits claims and then you can add on to that another
650,000 people who under the gig worker and self-employed programs that were created for the pandemic have also filed, so that's 1.4 million people
in just a week.
That dizzying list of names. You mentioned Disney, 28,000 there. No clarity on when life will get back to normal. Airlines starting to lay people off
and they are layoffs, they are not furloughs. The airlines say they will hire them back if they get relief from Congress. But for right now, these
are considered job cuts.
Shell, Marathon, Continental, the Tire Company. I mean, you go down this list of names in all of these different spaces that have been hurt so badly
by the pandemic, and there's a long list of companies that have laid off thousands of workers just in the past 24 hours or so.
CHATTERLEY: Yes, and this is also the key, Christine, because we're sensitive to this. But one of the heartbreaking things about that debate
this week was the lack of discussion about a game plan for the economy, recovering the millions of jobs that we've lost since this pandemic began
and what the next four years looks like in terms of addressing some of the inequalities in the American economy.
If we look at the highest paid jobs, we're back to where we were in January. If we look at the lowest paid jobs, employment still down 15
percent. Stimulus is one part of this, but it's not all of it.
[09:05:14]
ROMANS: Yes, I mean, 82 percent of the jobs lost since February, according to the Chamber of Commerce were in, you know, in service sector jobs, eight
out of 10 of those, and many of those have not come back. Many of those have turned into temporary; temporary have turned into permanent job losses
there.
So you'll see that K-shaped recovery, and the bottom leg of that K will be leisure, retail, hospitality, and that is just so scary, because so many of
those are low-wage jobs in the first place. These families don't have a lifeline.
You know, there was a Harvard study that was published just moments ago, really, that showed that 61 percent of families with children under the age
of 18 have suffered financial hardship and it is disproportionately minority families that have suffered the most financial hardship. And those
tend to be more predominantly be people in those service sector jobs that have been hit so badly.
So the inequality that could be cemented here by whatever this recovery looks like is just terrifying, and Congress is not close -- not close to a
deal we are told right now to try to get aid even a little bit of aid out again, as we head into the fourth quarter.
CHATTERLEY: You know, it's interesting, Christine because you are mentioning, Disney, Dow, Royal Dutch Shell, another one. So for me, these
are giant companies now that are making significant job cuts. And that tells you something about the struggle for much, much smaller and medium-
sized businesses, in order for this to filter up higher, quite frankly.
And to your point, again, now is the time to provide greater support.
ROMANS: I think small business is really going to get hammered in October and in November unless they do something quickly. I mean, waiting until the
next -- the next year after the election here, I just -- I think that small business is going to get really hammered.
There's a foreshadowing of that. The ADP number yesterday that job creation and small businesses has slowed so substantially and the PPP is gone. It's
going to be really an ugly fall unless they can do something here.
CHATTERLEY: Yes, and the sad, the heartbreaking part of all of this is that there is bipartisan agreement on providing support on many of these things.
It's just wrapped up in a broader package.
Compromise, guys, compromise.
ROMANS: Quickly.
CHATTERLEY: Christine, yes. Christine, Romans, thank you for that.
All right, the Tokyo Stock Exchange suffering a major outage, a technical glitch forced the exchange to completely halt trading for the whole day,
the first time ever that that's happened.
Selina Wang has all the details.
SELINA WANG, CNN CORRESPONDENT: Julia, the Tokyo Stock Exchange has halted trading for an entire day because of a hardware failure, an issue switching
to a backup device.
The Exchange said that it is planning to fix the issue and get back to normal trading tomorrow, but this does still mark the worst breakdown the
Tokyo Exchange has ever had.
Previous outages had only impacted part of the trading day with the last major one in 2005 when trading was halted for four and a half hours. That
actually led to the resignation of the Exchange's President at the time.
Now Japan's Stock Market is worth about $6 trillion. It's the third largest in the world after the U.S. and China. What this outage means is that
buying and selling of thousands of shares are frozen. It is however a sigh of relief that this outage may only last one day.
Investors have been on high alert for any glitches after the August cyberattacks in New Zealand that caused multiple days of trading halts.
This outage does also shut down one of the only major exchanges operating in Asia today because of the National Holiday. You have Hong Kong, South
Korea Taiwan and China's markets that are all closed.
In fact, China's markets are shut down for several days for Golden Week. This glitch also comes on the same day that a closely watched report from
the Bank of Japan was released that tracks economic sentiment from Japanese companies and show that the worst may be over for the Japanese economy, but
confidence is still far below pre pandemic levels.
This outage could also dampen investor confidence in the Japanese market and put pressure on stocks when trading restarts -- Julia.
CHATTERLEY: Selina Wang there, thank you for that.
Now, a Golden Week rebound in China, the country's massive tourism industry cranking into high gear the start of the eight-day holiday celebrating the
founding of the People's Republic in 1949. Domestic hotel bookings have already overtaken the level made this time last year.
David Culver is in Beijing with the latest.
(BEGIN VIDEOTAPE)
DAVID CULVER, CNN CORRESPONDENT (voice over): The start of China's Golden Week Holiday celebrating the country's founding leading to crowds like
this, travelers wearing masks but standing shoulder to shoulder at the train station. This marks the first major travel holiday in China since the
coronavirus outbreak began more than eight months ago, which makes this the first major test of COVID-19 containment here.
CULVER (on camera): Going back roughly to April, we've seen significant easing of restrictions across China. Sure, there have been cluster
outbreaks including one here in Beijing back in June, but many here are more worried about the spread in other parts of the world, and so most
Mainland Chinese travelers are staying within China's borders for their holiday, feeling a bit more protected perhaps, but it makes for a crowded
bubble.
[09:10:11]
CULVER (voice over): From October 1st through the 8th, China Tourism Academy estimates there will be some 550 million domestic trips taken. That
is nearly 70 percent of the trips taken at the same time last year.
Hotel bookings, however, are up 50 percent from 2019, and so too, is same- city and short distance travel. Think staycation.
Recent college graduate, Stephy Lu normally prefers to go abroad, but this year, she is among the millions planning a trip to another part of China.
(BEGIN VIDEO CLIP)
STEPHY LU, SHANGHAI RESIDENT (through translator): My main concern is the type of transportation. I want to make sure to stay in a familiar
environment which is safer so as to make sure there's not too many unfamiliar people mix together.
(END VIDEO CLIP)
CULVER (voice over): The last significant travel holiday here was the Chinese New Year, and while Beijing's Tourism Bureau canceled all large
scale celebrations for the holiday, we were at the Beijing train station as people crowded in to head to their hometowns, very few wearing masks, no
immediate worries, so it seemed.
Three days later, Wuhan, the original epicenter of the pandemic went on lockdown, and the streets of major cities like Shanghai went bare for
weeks.
This was the iconic Bund in February.
But gradually, social life resumed in April, more people venturing out, and just last weekend, the nighttime crowd packed in; most ditching the
facemask.
Major indoor events like this Beijing Auto Show also attracting crowds, a sign that many, who, for weeks were shuttered in their homes now feel
increasingly comfortable that the virus will stay contained.
CULVER (on camera): It is worth noting not everyone in China is traveling freely for this holiday week. For example, there are restrictions in major
cities like Shanghai for students. They're not allowed to leave the city unless they're willing to do two weeks quarantine before returning to the
classroom.
But the real focus is going to be on the days after Golden Week to see if cases rise or if containment is as strong as China's Central Government
portrays.
David Culver, CNN, Beijing.
(END VIDEOTAPE)
CHATTERLEY: All right. Let me bring you up to speed now with some of the other stories making headlines around the world.
In the United States, the Commission on Presidential Debates says it will change the format for the remaining meetups between Donald Trump and Joe
Biden to ensure a more "orderly discussion," quote, after Tuesday night's chaos.
More than 73 million viewers tuned in for what many critics are now calling the worst debate in modern American history.
CNN White House correspondent, John Harwood joins us now from Washington.
John, great to have you with us. I was half and only half joking about the possibility of a mute button being used going forward. Just talk us through
what some of the options are that are being discussed.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: It's striking, Julia, that the Commission on Presidential Debates which has existed for a couple of
decades to try to bring orderly discussions between the two presidential nominees to the American people is on the verge of changing their
procedures and rules for these debates because the incumbent President of the United States can't or won't behave himself on stage. He disrupted that
debate and turned it into a mess.
Now, what do you do about that if the President is determined not to follow rules? Maybe not very much. They're discussing ways in which they can limit
the interruptions by the President on Joe Biden and Joe Biden's back to the President.
One way to do that is to give the moderator the possibility of cutting off the microphone of somebody who is violating the rules.
Now, there's a way to do that, but with the moderator making the decision, there's a way to do it automatically. So you would not have discretion by
the moderator. Because if the moderator used discretion, that would be the subject of an attack from, say, the President and his supporters that
they're trying to mute the President.
We don't know where they're going to come down on this. We know that they have rules about two-minute responses, for example, and if somebody goes
over, you could have the other candidate's muted while the first candidate is taking the two minutes.
But we don't know what they're going to come out with. They haven't said, but it is a remarkable situation after that mess of the debate on Tuesday
night.
CHATTERLEY: Yes, electric shock treatment is another option. Remarkable is one word for it, John.
One of the more serious discussions was the President's perceived unwillingness to denounce white supremacy in America and he was tackled
once again on this yesterday. I just want to play his response for our audience, and then we'll get your views.
(BEGIN VIDEO CLIP)
QUESTION: But do you denounce them? Do you denounce --
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I've always denounced any form -- any form ...
QUESTION: Of white supremacy?
TRUMP: Any form of any of that, you have to denounce, but I also -- and Joe Biden has to say something about Antifa. It's not a philosophy.
These are people that hit people over the head with baseball bats. He's got to come out and he has got to be strong, and he has got to condemn Antifa
and it's very important that he does.
(END VIDEO CLIP)
[09:15:06]
CHATTERLEY: All of that should be announced, John. Does he need to be specific? What do we make of this?
HARWOOD: That was simply, Julia, a reiteration of what he said on Tuesday night at the debate. He said "any of that." He didn't say what it was. He
didn't denounce white supremacy.
He went back to the idea that the problem is Antifa, and violence on the left, even though his own F.B.I. Director and his own Homeland Security
officials have said, the preeminent problem with domestic violence in the United States is from white supremacist groups. The President will not
denounce them. Why? Because they are on his side in the election.
The President and the Republican Party have locked themselves into a strategy of depending almost exclusively on white votes to win election and
almost exclusively appealing to white voters. That inevitably takes them to a position where they rely on more and more of the extreme white voters
now.
It's not working for them right now because the more explicit appeals to racism get, and we saw the President turn back to open racism at his rally
in Minnesota last night, casting Ilhan Omar, a United States citizen who is a Member of Congress as somebody who is not from the United States, even
though she is an American.
The more obvious those appeals are, the more you turn off some of those better educated -- college educated white voters who don't like racism, and
that's a problem for the President, but he and the Republican Party are moving down this path of appealing more and more intensely to white voters
and that's why it leaves us in this position.
CHATTERLEY: John Harwood in Washington for is there. Thank you so much for that.
All right, coming up here on FIRST MOVE, the U.S. airline industry facing a devastating month of job cuts as Federal aid dries up. A major trade group
will explain what all this means.
Plus two major tourist destinations get back on their feet: Singapore and South Africa look to rebuild their brands. We'll take you there to find out
what's going on. Stay with us.
(COMMERCIAL BREAK)
[09:20:02]
CHATTERLEY: Welcome back to FIRST MOVE, live from New York where U.S. stocks are green premarket as investors await new developments in the D.C.
emergency aid talks.
As you can see, the tech stocks are outperforming after what was a pretty rough September for global markets overall. The NASDAQ and the Shanghai
Composite falling some five percent as you can see there.
The German DAX, the relative went down just 1.4 percent. What can the fourth quarter bring?
In the short term, plenty of shares up some three percent premarket following its direct listing debut yesterday. Remember, we were talking
with Scott Galloway earlier this week about that one, the controversial data software firm finished Wednesday's trade up a solid 30 percent.
Meanwhile, major U.S. banks gaining premarket, that despite the Federal Reserve announcing that it will not lift restrictions on stock buybacks and
dividend hikes for the sector until at least January. I think that was clearly expected.
Now, October begins a devastating blow to the airline industry. Tens of thousands of jobs will be lost as the U.S. government's payroll support
program is past today for airline workers. Without further Federal intervention, the axe is falling on 19,000 jobs at American Airlines and
13,000 at United. Add to that, 17,000 other employees throughout the industry who have been told their jobs are also at risk.
Nicholas Calio is President and CEO of Airlines for America, the trade association for leading airlines in the U.S. Nick, great to have you with
us.
I know it's a pretty devastating day for the industry. Just give us some perspective here because for all the thousands of jobs I just mentioned,
you've warned that far more are at risk.
NICHOLAS CALIO, PRESIDENT AND CEO, AIRLINES FOR AMERICA: Far more are at risk. There are so many jobs attached to the airline industry and those
that are inside each individual airline. It is estimated about seven to 14 jobs rely on a single airline job.
More than that, you have other airlines that are looking towards the future and what's going to happen, both with demand and what they're going to do
and some have delayed layoffs hoping for the best, hoping for another package to keep our airline employees on the payroll.
We're a little bit different as an industry because our employees, once they're off the payroll, you can't just bring them back and put them back
on an airplane or put the machinist back under the airplane.
Because of safety regulations, there is a constant process of recertification and retraining that goes on, so you can't just take the
keys and throw them in a pile and say, "Okay, start up the plane" after they've been off for a month or two.
So we're hopeful that they will come to a deal up on Capitol Hill, between Congress and the administration. Today is just the start.
You know, so many people have already taken voluntary leave and voluntary furloughs and it's much better to keep them on the payroll, off the
unemployment line with jobs, with healthcare.
CHATTERLEY: Just explain what you meant by that, because I think this is a very important point. Of the 32,000 layoffs that we've heard from the two
largest airlines today, how many of those if they do reach a deal in in D.C., could then just be called up and said, "Hey, guys come back in to --
come back in and you can start work again." And how many would have a delay of what time are we talking in order to infiltrate them back into the
workplace?
CALIO: Well, both United and American have indicated that if a deal is reached within the next couple of days, they will bring those employees
back. Two things about that, Julia. You have to look at what it means to the employee to be hanging in the balance for this long, and then to be
furloughed today and then brought back, but they have said -- American and United and our other carriers said they will try to put the toothpaste back
in the tube. It's not that easy.
After a day or two, can you do it? Yes, with great difficulty. Longer than that, every single day becomes far more difficult to do it, and so some
Members of Congress tell me that we might reach a deal in two weeks or four weeks or six weeks. That's of very little help to the people because
employees start to move around. They get -- if they're furloughed, they have to be replaced and you start to readjust your employees and your
schedule because this is not just furloughs at stake here today, it is also reductions in service to a whole bunch of different communities -- small,
medium and large, that are going to make flying very different.
CHATTERLEY: Yes, but these are also people who have to worry about paying bills and feeding their families and paying mortgages and things so, too. I
think your point about the uncertainty here is a very valid one.
The heartbreaking part of this is that there is bipartisan agreement in Congress to continue the financial aid, to push this back for another six
months and come back in in March of next year and work out then what to do about the industry.
Nicholas, what's your message? Is there frustration on the part of you and the airlines here with lawmakers that simply can't reach a broader decision
and the cost is jobs.
[09:25:08]
CALIO: There is frustration with the airlines, with me, with our labor partners. Labor and management have been so united here and working on this
for months and months, and giving the message that October 1st was a real date. We need help.
It is mystifying. You have broad bipartisan, bicameral support on Capitol Hill. You have the President saying three or four times that he wants
something to happen for the airlines.
We're just asking them to come to a compromise. They are not that far apart.
You know, in previous days, you know, they could stand the differences. The Speaker and Secretary Mnuchin are working on it. It is our fervent hope
that they think about these employees who are losing their jobs, what it means to them on a human level, on a day-to-day basis, and frankly, what it
is going to mean to our economy?
You know, I guess, I'm not that smart. I see both a human imperative, a political imperative, and an economic imperative here. And so we can't
figure out why they just can't come to a deal. And we've said too many people on Capitol Hill and in the administration, we don't need good
intentions. We need a law to pass.
CHATTERLEY: Yes, I don't think you're lacking in smarts. Nick, I think I wish more would listen to you, quite frankly, with the human imperative, if
nothing else.
There will be those watching this though, saying and we've heard it many times over the past few months that when the going was good for these
airlines, they were paying money out to shareholders. They could have kept a fund for rainy days like this, even if they could never have anticipated
a pandemic.
Why should these industries be bailed out or given financial help when many others are struggling? Nick, what's your response to that?
CALIO: Twofold. First, this was not a bailout. All the money that we received was passed through directly to our employees. This was a Jobs
Bill. It is the part of CARES Act 1 that worked absolutely the best.
And in terms of the second, all of our airlines, as of March 1st were considered to have fortress balance sheets. They were designed to withstand
an event three times worse than 9/11. That's pretty big.
It got wiped out in weeks through no fault of our own. This is, we hope, a once in a lifetime pandemic.
And in terms of what they did in terms of dividends and buybacks. Facts matter. Seventy three percent of all the profits we made over the last
decade went to our employees, new airplanes and other product improvements for our customers, 73 percent.
So dividends and buybacks were small. That's a red herring. You have to look at what the airlines actually did over the last decade, 186,000 new
employees were added. Wages and benefits, pensions went up considerably.
We worked with our labor partners and with our employees and created a really good product that started competing better than it ever had before.
So it took -- you know, there was 9/11. There was a 2008 financial crisis. We bounced back.
We are a resilient industry. We will bounce back again.
But for right now, a lifeline to get us through to next March to keep these valuable employees, the infrastructure of getting planes up in the air,
keeping them on the payroll so that as a vaccine comes on, as the desire to travel comes on and as people realize more frankly, about how safe it is to
fly today, with all of the different things that we have done, including, you know, intensified cleaning procedure, facemask requirements, the HEPA
filters.
The ventilation on an airplane gets refreshed -- the air gets refreshed 30 times an hour. In your house, it gets refreshed maybe once every four
hours. Different in a bar and restaurant. You are safer on an airplane than you are anywhere else.
So the combination of all of that leads us to believe that demand will start get come back to the point where we need our employees. We need our
planes to get back up in the air and having this employees all be furloughed for indefinite periods, if not forever, is not a good thing.
CHATTERLEY: Yes, you've got to be in a position to recover when it comes. Nick, great to have you with us. Nicholas Calio there. The President and
CEO of Airlines for America.
CALIO: Thank you.
CHATTERLEY: And so, facts first. Thank you for that.
All right, the market open is next. Stay with us.
(COMMERCIAL BREAK)
[09:32:26]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running on the first trading day of the fourth quarter. Yes, the 2020 home stretch is
in sight. As expected, we're gaining ground with tech in the lead. Stocks are looking pretty resilient here, I have to say, despite the November
election uncertainty, the lack of a D.C. stimulus or financial agreement and of course, the weak U.S. jobs picture -- relatively weak.
Let's be clear, the numbers today showing an additional 837,000 people signing up for first time jobless benefits here in the United States. In
the last reading, 26 million people still needing aid overall. So collecting some form of benefit. And this comes as major American firms, as
we've discussed, announce substantial new job cuts.
To get a bigger picture, the all-important U.S. jobs report is out tomorrow and this comes, of course, as the top political job in the United States
remains up for grabs.
Greg Valliere joins us now. He is the Chief U.S. Policy Strategist at AGF Investments. Greg, always fantastic to have you on the show.
I want to start with the debate, but more the fallout from it. You in your note this week talking about palpable gloom among Republicans you speak to.
GREG VALLIERE, CHIEF U.S. POLICY STRATEGIST, AGF INVESTMENTS: Well, I think so, Julia. Good morning. Nice to see you.
I think a lot of Republicans on Capitol Hill are dismayed that the President would not clarify his remark on white supremacists. I think they
are dismayed that he looked too angry and belligerent in the debate, which was an opportunity for him to get right back in the race again.
And I must say, I think a lot of Republicans are increasingly resigned to him losing.
CHATTERLEY: What do you think, Greg? You've resisted making a call so far. Are you ready to make one?
VALLIERE: I finally made a call this morning in my morning piece. Yes, I think Biden wins narrowly. I would not at all be surprised if it takes days
or weeks after the election before we know for sure who won.
But there's one big thing that Biden has that Hillary Clinton did not have in 2016, and that is a really huge margin among women, college-educated
women, professional women. Women pretty much across the board favor Biden more than they favored Hillary.
CHATTERLEY: Can Trump make a comeback? Because I think this was one of the things that we were focused on in this debate was whether Trump could make
an outreach to specific segments of the American population and I know a lot of people looking at that performance and saying, if anything, it is
perhaps pushed them the other way.
VALLIERE: I think he can, Julia. I think two things that are going for him are number one, he has a tremendous energy level. He'll out work just about
anyone.
And number two, I think that he controls the news cycle, whether it's geopolitics, making announcements from the White House talking about the
vaccine, so he has the ability to control the news spin, and that's a real advantage.
[09:35:26]
CHATTERLEY: You made the point that you think it could be close, even if Biden wins, and what the President didn't roll out was fighting if he
thinks there was fraud. And clearly, if it's a narrow election win for Joe Biden. Are you thinking we could see a kind of Bush-Gore type scenario
where it pushes back into -- I mean, that took until December, didn't it, I think into it in 2000?
VALLIERE: It took until December 12th. So December 12th is obviously a long way after the election. So I do think that is a possibility. I do think
it'll be close, and I think the other story that's really crucial for the markets is what happens to the Senate.
Right now, I'd say the Senate probably winds up a tie, which would give the Democrats in all likelihood control of the Senate.
CHATTERLEY: Let's go there then. For investors, what are you saying? Because we actually have very little clarity, quite frankly, on what policy
looks like for either party beyond this election. But are you suggesting that the markets perhaps split government? So perhaps the Democrats take
the House, the Republicans take the Senate would be a more stable outcome, and perhaps we don't get that.
VALLIERE: Yes, most of the investors I talk to would prefer divided government. They all say it means that Washington would do less harm if
there's divided government. But I think there's an increasingly plausible scenario for the blue wave with the Democrats taking everything. That
raises two big concerns for the markets.
Number one, you could see significant new taxes at some point in 2021, and number two, a lot of key sectors: defense, fossil fuels, things like that
and healthcare, could be negatively affected. I think the regulatory environment would get more strict than the very laissez faire climate we
have right now.
CHATTERLEY: What about D.C. in the interim? Because I thought it was uncanny how suddenly, in the hours following that debate, Nancy Pelosi,
Stephen Mnuchin, coming back together one last gasp chance to get an agreement on stimulus before this election.
VALLIERE: Yes, you know, I'm a cynic, and I think cynically that Pelosi wants to give cover to her members who are going home in the next few days
to campaign. She can say, hey, we passed a bill, the Republicans wouldn't agree to it. Even the White House with Mnuchin talking about much more
money just in the last 24 hours, they can say also, we were willing to spend more.
The problem is even if Pelosi and Mnuchin agree, I don't think the Republicans in Congress, Mitch McConnell would agree to a bill that would
be $1.6 trillion or $1.7 trillion. That's just too big a number for them to swallow.
CHATTERLEY: You know, so your likelihood is we don't get a deal.
VALLIERE: We don't get a deal. I think by the end of the year, especially if Biden wins, we will get a deal, but I think it comes later rather than
sooner.
CHATTERLEY: In this election, and I've watched it now, we've all watched it, I think for years, but particularly in the last year, it feels like
Trump is fighting this election. But Trump is also fighting Trump in order to win this election. So what does President Trump have to do between now
and Election Day to hang on to this in your mind?
VALLIERE: Stay on message. I think that sometimes he steps on his own message with great frequency and don't overhype or over promise a vaccine.
I think it's pretty clear from listening to the medical experts, we are not going to have a vaccine by Election Day on November 3rd. We might have a
vaccine by late winter. That's plausible.
But I think Trump has to be realistic with expectations or people will think he is just, you know, he's hyping them.
CHATTERLEY: Yes, don't over promise. Greg, thank you so much for that. Greg Valliere, Chief U.S. Policy Strategist at AGF Investments there and my
apologies for the connection issues at the end of that interview.
All right, up next, with international travel under pressure, Singapore is relying on locals to revive the tourism industry. The head of the Tourist
Board joins us next.
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[09:42:36]
CHATTERLEY: Welcome back to FIRST MOVE.
COVID-19 restrictions devastated Singapore's tourism industry. Last year, 19 million travelers visited the city state, that's three times Singapore's
population. With arrivals down 90 percent in the first half of 2020, the country's Tourism Board has a plan to salvage the sector and it involves
staycations.
Joining us now, Keith Tan, CEO of the Singapore Tourism Board. Keith, fantastic to have you on the show. Those numbers are stark and they tell
the story. How long are you anticipating it takes to see recovery? Because that gives us a sense of how long you have to be thinking here.
KEITH TAN, CEO, SINGAPORE TOURISM BOARD: Well, that's the multimillion dollar question, isn't it? The multibillion dollar question -- but what
we've told the industry here in Singapore is to be prepared for a long winter.
We don't expect a quick recovery back to 2019 levels, which was a record year for us. It will take many years for confidence to come back for people
to come back and for the airlines to come back as well.
So we need to be prepared for a long prolonged slump.
CHATTERLEY: So it requires a short term plan. It also requires a medium to longer term plan as well, and part of that is Singapore Rediscover. What
does that involve?
TAN: Well, ultimately, we care about helping our locals understand and learn a little bit more about Singapore.
In any given year, lots and lots of Singaporeans and locals travel abroad, because it's so easy to travel to our region to the countries around us and
they barely spend any time exploring different precincts, different attractions here in Singapore.
We now have an opportunity to help our locals learn more about places and districts in Singapore that perhaps the last time they visited as a young
child. So that's our hope. That's why we are trying to work with our hotels, our attractions, our tour operators to come up with bundled
packages that encourage not just a plain vanilla staycation, but really encourage exploration of the different precincts in Singapore.
CHATTERLEY: Yes, sometimes you are just too busy to appreciate what's going on around you.
TAN: Yes.
CHATTERLEY: How much investment are you putting into this? Are you subsidizing some of the visits that people can take to local attractions,
too?
TAN: Well, we are putting the finishing touches to a 320 million Singapore dollar campaign, which is essentially an effort to provide vouchers and
credits to Singaporeans. It will be approximately 100 Singapore dollars for every adult, and then a subsidized amount for minor children tickets to
attractions and so on. So that is meant to incentivize our locals to go out. This will be a at least a seven-month long campaign starting in
December, stretching over to next June because that coincides with the major school holidays here in Singapore.
[09:45:39]
CHATTERLEY: We're also seeing reports of flights to nowhere, even if cruises to nowhere. Keith, what can you tell me about those? Because I
think for people around the world, there was a lot of fear induced at the beginning of the COVID-19 crisis by what we saw happen on cruises, is this
really something that Singapore is looking at?
TAN: Well, our starting point is that we believe cruise demand will eventually return. When we look at our market research and we talk to our
partners in the region, we believe that there is still an inherently strong underlying demand for cruise, maybe not now, but perhaps in a year or two
or a little bit beyond that as well.
Actually, the penetration of cruise in Singapore and in Southeast Asia is very -- we have barely scratched the surface -- middle class here in
Southeast Asia, unlike, say, Europe, or America, which has a lot more developed cruise markets.
So we believe that the long term prospects of the cruise industry is strong. Now if that is so, then what can we do in their short term, right,
to sustain the cruise industry, and to help them continue to have some business in the region?
So what we've tried to do is to look at a very scientific risk based approach to see whether we can restart cruise, which we stopped several
months ago. How can we do this in a safe way? We are looking at all sorts of protocols. We have worked with cruise lines. We have engaged -- we are
engaging a certification company who have come work with us to determine the protocols that need to be in place onboard a cruise before we can
resume safe cruising.
CHATTERLEY: Yes, I mean, at the core of this is health and safety. What about pressure from the tourism industry itself on the government? What are
you hearing from them to say, look, perhaps we need to loosen some of the restrictions and allow some degree of foreign tourism into the country to
help support us?
TAN: Well, there have been two main asks from the tourism industry. Number one is helping them address the costs, right? Because even when there's no
revenue, there are still costs that they incur. And over the past several months, the Singapore government has put in over 100 billion dollars --
Singapore dollars to support our businesses and helping them deal with their costs, primarily manpower costs, but rental costs, utilities costs
and other sorts of costs as well.
Number two, obviously, as what you've mentioned, is really how can we stimulate demand, especially from foreigners coming into Singapore at a
time when borders are closed? That's a major issue. And Singapore has slowly started to reopen our borders.
We've unilaterally opened up our borders to New Zealand, to Brunei, to Australia and Vietnam, and we hope to be able to do so to more countries
that are safe that have gotten the COVID situation well under control.
But even if we do so unilaterally, the other countries as long as they have their own restrictions for outbound travelers, then then the traffic will
be very thin.
CHATTERLEY: Yes, I mean, this is key, isn't it? And it's the quarantine -- the challenges of quarantine, never mind just the safety on flights.
You can't have an industry that drops 90 percent for the foreseeable future, Keith, as you've pointed out without losing jobs. What about your
approach for perhaps providing retraining, looking at other options for some of these people that simply can't be employed in a sector that's been
so pummeled by this crisis?
TAN: Absolutely. But that's been a major priority even before COVID. So skills upgrading is a major preoccupation of the Singapore government and
the Singapore economy because we know that there will be disruptions to the economy, COVID pandemic or other forms of disruptions along the way.
So even before COVID, we've been embarking on major efforts to retrain, to upgrade so that people in the tourism sector learn new skills that could be
applicable to other sectors.
Now, of course, we have to really double down on those efforts so that some of the displaced workers from the tourism industry can segue into other
sectors of the economy that still require workers. That will be a major priority for the Tourism Board.
CHATTERLEY: It makes perfect sense. I have to say, obviously, I was in Singapore at the back end of last year and I'm a huge fan of Changi
Airport. I wouldn't even need to see anything else. Just that water feature is just phenomenal. So, yes --
TAN: Beautiful.
CHATTERLEY: Yes, Keith, it just astonishing. Keith, great to have you.
TAN: Thank you.
CHATTERLEY: Thank you so much. We'll speak soon, Keith Tan, the CEO of the Singapore Tourism Board there. Thank you.
All right, up next, to South Africa now, also looking to give its tourism industry a boost, but where Singapore is betting on domestic travel, South
Africa is reopening its borders.
We've got the latest, next.
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[09:52:29]
CHATTERLEY: Welcome back to FIRST MOVE. South Africa reopening its borders Thursday as it is easing COVID-19 restrictions, but not all travelers will
be allowed in. People from high risk countries remain blacklisted, and they include the United States, the U.K., France and Russia.
Eleni Giokos joins us now. Eleni, great to have you with us on the show. So a hugely important step to help re-galvanize the economy, but not without
some limits, at least.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Absolutely. So if you're in a high risk country, that basically means if your infection rates and
death rates are higher than that of South Africa, then that means you're in high risk countries. It is 57 countries in total, including the United
States, and as you mentioned, the likes of the U.K., France, emerging market peers, Russia, India, the likes of Brazil, as well. Travel to and
from those countries would be strictly for business, for diplomats and for repatriation.
Now, of course, this has many caveats in place. All travelers coming into the country needs to prove their COVID-19 negative status with a medical
certificate no older than 72 hours. The medium and low risk countries include China, the UAE and most African countries, as well. So we're going
to see leisure and business travel finally resuming.
Julia, I have to say, look, air travel was reason that we got cases in South Africa and of course, the big reason that we actually saw this very
aggressive approach and reaction to the pandemic that included the dropping of domestic travel as a whole for many months. And now finally, the
resumption of international travel. It is the reason that we've seen a relatively manageable pandemic in the country.
And importantly, the cases now is starting to drop. The question now is, are more cases going to be coming through the borders? And that is going to
be a really important factor the government will be looking at.
CHATTERLEY: Yes, they're going to have to watch incredibly closely. But your point about the testing within 72 hours are coming in so important
here as well. What about given what you said about domestic travel shutdowns, and for so long. What impact has that had on local airlines and
the industry in the associated businesses? Pretty devastating, I'm assuming.
GIOKOS: Yes, absolutely. I mean, such a vital question. And it's not just the airlines. We know that South African Airways was in trouble before the
pandemic, but other airlines had to file for business rescue.
We've seen job losses within the airline industry in South Africa. Hoteliers, the bed and breakfasts, the small business owners, the value
chain that feeds into the hospitality industry has really been decimated and of course, you've seen incredible pain coming through on all fronts.
[09:55:12]
GIOKOS: It's an industry that accounts for 10 percent of the country's GDP. Tourism is a vital force in the country, and the most important spenders,
the big spenders are from the U.S. and the U.K., and Europe. And of course, they are high risk countries at the moment.
So the resumption and the recovery of tourism is still something that is very far away. But this is one step in kind of bringing back normality.
I've spoken to so many CEOs, Julia, and they say that business travel is something they're going to be really looking at whether it's really
necessary. They've been able to operate remotely just fine over the past few months. But it's going to be interesting to see if there's pent up
demand, whether we've actually seen demand destruction, and what kind of numbers we will truly see coming through our borders on the international
air travel front.
CHATTERLEY: Yes, hugely important questions to raise, but a small start, but a start, and we'll see how it goes.
Eleni Giokos, great to have you with us. Thank you for that.
And that's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe and we'll see you tomorrow.
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[10:00:00]
END
