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Quest Means Business

Positive U.S. Jobs Report Stuns Economists; Growing Anger Over U.S. Police Tactics And Behavior; Companies Pledging To Support Black Communities After Protests Across The U.S. Due To George Floyd's Death; U.K. Health Secretary Ask Public Not To Attend Protests Because Of Coronavirus Threat; Black Lives Matter Painted On The Road To White House; U.S. Stocks Boom On Shock 2.5 Million Jobs Gain. Aired 3-4p ET

Aired June 05, 2020 - 15:00   ET

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

[15:00:00]

RICHARD QUEST, CNN BUSINESS ANCHOR: Sixty minutes to the close of business on Wall Street, and what an extraordinary session we have seen on the back

of some remarkable jobs numbers.

The market up over nearly three and a quarter percent, out like a rocket, never looked back, 800 points, who knows how the last hour will go as

people go in and come into the final bits of trading.

The markets and the reasons why, there is but one. Millions of jobs have been added in the United States. It's the biggest shock Jobs Report in

history.

Airline stocks are leading the charge. Boeing is up an extraordinary amount. Schedules are coming back to life.

And in Europe, Spain is moving to the next phase of reopening, to lure back the tourists.

It is Friday, it is June the 5th. I'm Richard Quest, and of course, yes, on this busy day, I mean business.

Good evening. We will of course fully update you on what's happening with the outrages and the valiant policing later in the program in the United

States. We'll have that story for you.

We begin, though, with what has to be the most unbelievable May Jobs Report that we've ever seen.

Investors had braced for the worst. The fear was that unemployment would go to some 20 percent. The reality was the opposite. Two and a half million

jobs were actually added. It shocked the market, surprised beyond belief.

The Dow, as you saw, now over nearly three and a third higher, and to give you a sense of how shocking it was, it's the way in which 20 percent was

forecast for May and it turned out to be 13.3 percent, a fall from 14.7.

So far from going up, it actually went down. Julia Chatterley is the anchor, of course, of "First Move." She joins me now.

Julia, in a moment we'll discuss with Jason Furman why these numbers may not be right, but give me the nuts and bolts of what these numbers said.

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, "FIRST MOVE": Well, it's great to be shocked when it's good news like this, and oh, boy, we take good news where

we can get it. What we actually saw was 7.5 million people getting jobs, five million people losing jobs. So the net result here, Richard, as you

mentioned, 2.5 million jobs gained.

It was a huge surprise. It's great news. The jobs are coming back, I think, quicker than we thought. We always thought that we would see a spike back

in jobs as states reopened. It's just kicking in sooner than expected.

They were in leisure, they were in hospitality, construction, and manufacturing. All some of the sectors that were hardest hit as a result of

the shutdown.

Within this, there's bad news though that the government sector still will shed over 500,000 jobs. They have pointed that state and local governments

still need support here, too.

But you know, the key takeaway for me here, Richard, is that as states reopen, jobs are coming back, whether that's in part due to the support of

the PPP, the loan program for small businesses keeping on their workers. What we don't know now is what the path forward looks like.

How many staff do you need to keep as you get a sense of what pandemic employment looks like and how many customers you get through the door?

There's still lots of unknowns. But we can't take away from the good news in this report.

Jobs are coming back and they're coming back quicker than we thought.

QUEST: Julia, let's do -- I want to delve into that. You alluded to it. Hospitality and leisure added 1.2 million jobs. That's the most of any

sector. Mainly bars and restaurants. It was also construction, education, health services, and the like.

And when you look at those numbers, now, retail, some shops are reopening. Hospitality, bars and restaurants and hotels aren't properly open.

So, how do you square that circle for me that that was one of the better performers?

CHATTERLEY: Well, if you remember, hospitality and leisure were 40 percent of the job losses in the prior months, so you would suggest or expect to

see as things start to reopen some staff being required.

What you've got to remember when we're looking at the bounce back that we are seeing as we see activity pick up and the shutdowns and lockdowns being

reduced, is that you will expect to see people employed. We've still got more than 20 million Americans, Richard, out of work.

If you add in things like discouraged workers, workers that would like to be working more than they are at this stage, we're still talking one in

five American workers impacted. It's called the U-6 unemployment rate, which is still above 21 percent in America.

[15:05:18]

CHATTERLEY: Even the statistics agency that provided this data said, look, if everyone who said they were unemployed actually said that rather than

being absent from the workforce, this statistic would be three percentage points higher. We would be talking around a 16.5 percent unemployment rate.

So for all of the optimism and the jobs that we're seeing added back here, the complexities, the complications, the challenges here in the American

jobs market remain, and we don't know yet whether we can sustain this pace of job creation and what the future looks like.

And actually what the job market can withstand while keeping cases of COVID down. There are so many unknowns here, but hey, like I said to begin, we'll

take good news where we can get it and today is good news.

QUEST: Julia Chatterley. Julia, thank you. Now, with me is Jason Furman, the Harvard Professor, former Chair of the White House Economic Advisers.

Jason, we'll come to your point that you've been writing about in just a moment in terms of the numbers. But did this morning's number take you by

surprise, too?

JASON FURMAN, FORMER CHAIR OF THE WHITE HOUSE ECONOMIC ADVISERS: It took me by surprise, Richard. I was expecting to see millions of jobs added in the

second half of May, which would have been too late to be captured by this report.

It looks like I might have been off by about two weeks and you saw millions of jobs added in the first half of May.

QUEST: So, you are of the opinion that, as Julia was alluding to, that the number -- the real number -- this doesn't reflect it because of the way the

numbers are counted? Explain.

FURMAN: There's two issues. One is there's a set of people who were not working, not getting paid, but didn't really quite give a reason why that

was the case. There were I think about four million of them. They probably were unemployed, but they weren't counted as unemployed.

Another big issue is just millions of people left the labor force, they gave up looking for jobs because May did not seem like a particularly good

month to be searching for a job. And if you count them as unemployed in the first group, the unemployment rate would have been 17 percent.

Now, that still would have been down from a comparable unemployment rate for April. So no matter how you look at it, May was better than April. But

no matter how you look at it, the economy was still in a very, very depressed state in the month of May.

QUEST: So are you suggesting that all of these numbers -- I say all. It is a good news. It is a good number. But are you suggesting that what this

number is really doing is borrowing or taking from later in the year and bringing it forward, which would be good news, but it doesn't tell us much

about what the hardened level, the elevated hardened level of unemployment is in the United States?

FURMAN: Yes, that's exactly right, Richard. They report the number of people who are on temporary layoff. That number went down 2.7 million in

May relative to the month before.

In some sense, that was bad news because those were people who weren't actually fired from their jobs. They just temporarily weren't at their

jobs. And so all 2.5 million new jobs we got, roughly speaking, were people who were taken off that temporary layoff.

If you look at the number of people who have been fired from their jobs, not just temporarily but permanently, that actually went up in May relative

to where it was before. That's what's worth looking at in terms of the longer-term trajectory that we're on.

QUEST: Jason, we're going to deal with the politics of this in just a moment. But on the sheer economics, somebody hearing this news today would

say, well, it's starting to look like a V-shaped recovery.

Maybe it's a V that's going a little longer, it won't be identical V, but it's starting to look that way. Would we expect that to be reflected next

in GDP? In manufacturing? In PPI?

FURMAN: I think we're going to see that in a wide range of data. You won't see it in GDP until we get the numbers for Q3, which is in October, the GDP

that is still lagged. But absolutely, for the next couple of months, we're going to see, I would expect, very rapid growth in retail sales and

industrial production, in new orders, in housing, and everything, and it will look like we're starting to go up a V.

I'm just worried we're only going to go up half of it because the first half of the climb is the easy part. It's the second half that's much

harder.

[15:10:12]

QUEST: Feel free to steal this. I call it the reverse tick. We sort of come down. You know how a tick goes. It comes down, but just flip it around and

that's what it is. Jason, we will talk more about it. I'm so grateful on a busy day that you found time to talk to us. I appreciate it. Thank you.

FURMAN: Great talking to you, Richard.

QUEST: Now, President Trump, not surprisingly, has called it and I am going to quote, "probably the greatest comeback in American history."

So, let's move from the economics and the numbers to the politics, because nothing this year, nothing at this time, in fact, nothing this year full

stop can fail to be seen other than through the lens of the political election.

This is what the President said about how this number reflected his policy of reopening America.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: When we had a problem, we were able to cut it off, stop it just like this, stop it. Keep everyone

inside, keep them away, keep them together, away, uninfected, and we saved millions of lives.

And now, we're opening and we're opening with a bang and we've been talking about the V. This is better than a V. This is a rocket ship.

(END VIDEO CLIP)

QUEST: Now, the White House correspondent John Harwood is in Washington. We have much ground to cover here, John, and I'm glad that you're with us to

do so.

All right, this is it, isn't it? This is the -- he blames -- the President blames China for the pandemic and he takes the credit for the recovery.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Richard, the President today was like a fighter who has been staggered, punch drunk around the ring by a

series of blows. He lands one punch and all of a sudden he is intoxicated and completely exhilarated by what he has done.

The President of course is exaggerating the situation, claiming victory prematurely, because as Jason Furman said, this was the low-hanging fruit.

This is the easy part of the recovery that when you switch the economy back on, he did that so to that extent, yes, the President by pushing the

reopening of the economy generated these gains.

What we don't know, though, as you alluded to before is, what does the virus have to say about it? Did they reopen too early? Is the virus going

to spike again and cause another downturn of economic activity?

And then secondly, now that you've reconnected people who were temporarily displaced from the workforce, what about all of the others? The businesses

that may have gone under? People who may have left the labor force? We don't know what the continued climb is going to be.

You get a boost in the beginning, but we've got a long, long way to go, which is why economists in both parties who I talked to today were very

cautious in interpreting this data.

QUEST: But we know that the President is nothing, if not a superb salesman and the ability to spin. Now, if you accept he doesn't have to convince

Democrats, hardened Democrats and all of those states that have borne the brunt of the losses, he only has to convince those in the middle and those

on his side. I mean, this is exactly the news he needed.

HARWOOD: It's the news he wanted. I'm not sure it's what he needed, though, Richard. Remember, he's in a very deep political hole right now and just

think back a little while ago before the coronavirus pandemic hit and we shut down the economy.

Think about 2018, for example. The economy was booming in 2018 and Republicans were hammered. The President was trailing Joe Biden in the

polls before the coronavirus pandemic.

A lot of the negative judgments of the President have nothing to do with the state of the economy, they are about his personal behavior and how his

approach to the office is and that's one of the things that people recoiled from this week in his response to the protests in American cities.

So, it is certainly good news for the President. It's better than a much higher number. But 13 percent unemployment is still higher than we have

seen since the Great Depression.

And so the President still has millions and millions and millions of Americans who had jobs a few months ago who do not have jobs now and

there's a political price to pay for that.

It's better, but he needs a lot more than that.

QUEST: John. John Harwood in Washington, thank you. We will talk more, that much I know about. Thank you.

HARWOOD: You bet.

QUEST: As we continue on QUEST MEANS BUSINESS this Friday, we will watch the numbers and we'll watch the market very closely.

The police tactics are now under the microscope in the United States. Police brutality, it's another important part of what is being seen

following the George Floyd death last week.

(COMMERCIAL BREAK)

[15:17:49]

QUEST: So, the question of police brutality is very much, as you know in the United States, consumed by the protests, most of them peaceful, some

have been violent, but the attention is firmly now focused on police brutality, and not because of the killing of George Floyd, but because of

the way some of the protesters have been treated and handled and manhandled by the authorities.

Video over the last couple of days drives this into sharp focus. For instance, take a look at this. Two police officers shove a 75-year-old man

to the ground. It's hard to watch, but here it is. I'm just going to be quiet.

Now, the man clearly hits his head, begins to bleed. Most of the police officers walk past him, then go back later. Officers are directed forward

before calling an EMT, because they're too busy trying to arrest somebody else who seems to be peacefully protesting.

New York's Governor Andrew Cuomo says the video made him sick to his stomach.

(BEGIN VIDEO CLIP)

GOV. ANDREW CUOMO (D-NY): You see that video and it disturbs your basic sense of decency and humanity. Why? Why was that necessary? Where was the

threat? An older gentleman, where was the threat? And then you just walk by the person while you see blood coming from his head. And police officers

walked by. It's just fundamentally offensive.

(END VIDEO CLIP)

QUEST: Also, the police in that case said that the man tripped and fell. One wonders how many people would have believed the story if -- or at least

the man's story if there hadn't been video evidence to prove the point.

And in Minneapolis, the city of course where George Floyd died in police custody, there is an emergency City Council session that voted in favor of

changes to the city's police department.

Miguel Marquez is in Minneapolis in Minnesota. He joins me now.

Miguel, what are they proposing to do to the police? I mean, there have been calls to completely disband it. There have been calls to change it.

What is the proposal that's favored most and consensus?

[15:20:15]

MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: Well, the City Council has passed it. The Mayor has signed it. The state's Human Rights Department has

signed it and there is one more judge that needs to weigh in right now, but it looks like this will become the rule here in Minneapolis.

And let's keep in mind, these are crumbs. This is the very beginning of this process. But they have now said no more choke holds across the board,

including that controversial neck restraint that killed George Floyd just a few feet from where I'm standing.

Not only are there no choke holds, but they've said that police officers must intervene in the moment that if that someone is using these

controversial tactics, that they must intervene.

With regard to the nonlethal sort of weapons used during protests, the flashbang grenades, the teargas, the pepper bullets, that sort of stuff,

that has to be signed off at a much higher level, by the Police Chief before they can be used or implemented.

They also want civilian review of body cam footage and they want much quicker disciplinary action taken against officers or decisions on

disciplinary actions taken much more quickly. So, sort of across the board, they are trying to get it.

They also recognize that this is a step, that there is institutional concerns that people have at the Federal, state and local level. So, it

will be a long time before what people want here is fully implemented. But it is a step in the right direction -- Richard.

QUEST: All right. I mean, the lawyers would say it is necessary -- Miguel, you're okay? We can keep talking, can we?

MARQUEZ: Just fine. Just somebody was listening off to the side and was very happy to hear what I was saying, so he was thanking me. But yes, it

does feel celebratory here right now, which is lovely, but they want more.

QUEST: All right, my question was, as the lawyers would say, it is -- these changes are necessary, but they are not sufficient because we're talking

about racial bias and bigotry and you don't really change that overnight with these disciplinary measures and, if you like, the plumbing of how you

go about policing. This requires mindset change.

MARQUEZ: It requires mindset changes and it requires a different way of policing across a patchwork of police agencies across the states, across

the localities and across the Federal government.

It will necessitate the need of the Justice Department and the way the Justice Department treats criminal behavior. If you look at the number of

African Americans in U.S. Prisons, it's far above the percentage of African-Americans who are actually in the country.

So, those sorts of institutional concerns, it will relate to economics and poverty and education, a whole panoply of issues that will have to come

into play here, but today, it is celebratory. Today, it is -- at least, people here feel it is a step in the right direction -- Richard.

QUEST: Miguel Marquez, the celebratory -- how nice to be able to talk about celebration in a story like this. Miguel, thank you, in Minneapolis.

Actually, he is pledging $40 million to support U.S. black communities. The Chief Executive, John Donahoe has called for a lasting change to address

what he describes as the systemic change.

It's that mindset that I was talking about a moment ago. How to actually get people to view things differently. Corporations like Nike rallying.

CNN's Abby Phillip reports.

(BEGIN VIDEOTAPE)

ABBY PHILLIP, CNN POLITICAL CORRESPONDENT (voice-over): It started as a trickle. Silicon Valley companies like Salesforce and Apple speaking out,

days after the killing of George Floyd, but now it has become an avalanche, as corporate America breaks its silence on race amid nationwide protests.

(BEGIN VIDEO CLIP)

PROTESTERS: Don't shoot!

(END VIDEO CLIP)

PHILLIP (voice-over): The leaders of America's most powerful businesses are facing pressure from their customers and employees to act.

(BEGIN VIDEO CLIP)

MARK STEWART, CHIEF OPERATING OFFICER, NORTH AMERICA FIAT CHRYSLER AUTOMOBILES: I say to you today no more. No more. Racism of any kind is

decisive -- divisive, it's ugly and it brings about the worst of humanity.

(END VIDEO CLIP)

PHILLIP (voice-over): Ben & Jerry's, the Vermont-based ice cream company that is no stranger to activism, offering one of the most strongly worded

statements, calling for concrete steps to dismantle white supremacy in all its forms.

(BEGIN VIDEO CLIP)

CHRIS MILLER, BEN & JERRY'S CORPORATE ACTIVISM MANAGER: In order for us to make the kind of progress that we need as a nation and as a society, it

requires us to acknowledge and to embrace some hard truths.

(END VIDEO CLIP)

[15:25:04]

PHILLIP (voice-over): Nike flipping its iconic slogan "Just do it" on its head, now pleading, for once, don't do it. Don't turn your back on racism.

And nine of Detroit's largest businesses including General Motors CEO Mary Barra, now coming together to pledge that they will push for action.

(BEGIN VIDEO CLIP)

MARY BARRA, GENERAL MOTORS CEO: We will stand up against injustice and that means taking the risk of expressing unpopular or polarizing points of view,

because complacency and complicity sit in the shadow of silence.

(END VIDEO CLIP)

PHILLIP (voice-over): It's a dramatic change for predominantly white corporate America. But for some, the outpouring of support for protests

rings hollow.

Democratic Congresswoman Alexandra Ocasio-Cortez blasting companies for releasing bland statements with a hashtag, tweeting, your statement should

include your org's internal commitments to change.

Activists also penning this statement from the National Football League which they noted failed to mention policing or racism at all. And it comes

four years after NFL quarterback Colin Kaepernick's protest against police brutality prompted a threat from the league to punish players who knelt

during the National Anthem.

Today, something has changed, and for the companies like Ben & Jerry's that have long spoken out, it's overdue.

(BEGIN VIDEO CLIP)

MILLER: Typically, what companies do is use that power to advance their own narrow self-interests. There is a cost to that. That if the rest of the

society is burning down around us, we can't have a healthy company in a sick society.

(END VIDEO CLIP)

PHILLIP (on camera): These statements in large part are welcome, but we are starting to hear some criticism increasingly of these companies saying what

are you doing beyond writing a statement to promote diversity within your companies? How diverse is your board? Are you hiring black employees? Are

you promoting them and are you paying them fairly?

There is increasingly a sense that these companies need to match their words with their actions.

(END VIDEOTAPE)

QUEST: No, I'm not going to argue. Abby Phillip reporting there.

Neither pandemic nor protest can seemingly stop this Wall Street rise. Look at the numbers.

Now, we know the reason, it's the jobs, and we can see what's happening. The market is up sharply. But it does beg the question of fear of missing

out. FOMO for profits, after the break.

(COMMERCIAL BREAK)

[15:30:36]

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS for you in just a moment. Look at how the labor market recovery is highly uneven in

those who are actually gaining. African Americans are being left behind. We'll understand exactly -- we'll talk about that and really, the market

may be up but is everybody sharing in the victories?

We answer -- we know pretty much the answer to that is no. As for the airlines, this is bizarre. Passenger numbers are down 85 percent and yet,

airline stocks having their best week in years. But someone say the best week ever. It is from low levels to small gains that we're seeing

impressive performances. We'll discuss that. It all follows of course the news headlines, because this is CNN and on this network the news always

comes first.

The World Health Organization says all countries should encourage their populations to wear face masks in public. They're also insisting that isn't

directed at any individual leader. And that includes President Trump who's been criticized for not wearing a mask in public.

The U.K. Health Secretary Matt Hancock says he's appalled by the death of George Floyd is asking the public not to attend planned anti-racism protest

this weekend. The Secretary says coronavirus remains a health real threat and he's encouraging people not to go to demonstrations of more than six

people. As a clear message on the road to the White House ahead of another weekend of mass protests, the mayor of Washington commissioned painters to

write Black Lives Matter in huge letters spanning two city blocks. She also formally renamed the street Black Lives Matter Plaza.

A new CNN poll of polls shows 51 percent of registered us voters back the former Vice President Joe Biden as his presidential race while 41 percent

support President Trump. The new numbers represent a shift in Biden's favor since April, when a poll of polls found support averaging for Joe Biden,

averaging 48 percent.

U.S. stock surged. You've seen the numbers, we've shown them to you over three percent to check where they are now, just at the moment and you'll

see the economy. The adding of 2-1/2 million jobs gave a boost, 3-1/4 percent seems to be where the market is happy to be at the moment. We're

over 27,000. Bear in mind, the all-time highs only 29,000. The lockdown was 23,000. Now, it's risen seven percent over the past week, despite social

unrest, despite coronavirus and U.S.-China trade tensions.

David Kelly is with me, Chief Global Strategist at J.P. Morgan Asset Management. You join me now. David, now, I know things are looking better.

But this market is what I described. I think I've seen others right but it's FOMO now, isn't it? Fear of missing out. The market is heading back

towards its all-time high, seemingly at a fair old clip. Tell me about it.

DAVID KELLY, CHIEF GLOBAL STRATEGIST, J.P. MORGAN ASSET MANAGEMENT: Well, it does seem to that or you could say it's Tina because there is no

alternative, because what's happening is it's a lot of liquidity in financial markets has been poured into financial markets by the Federal

Reserve. But if you look at long term interest rates at below one percent, that's not really a good long-term investment at this point.

You can't make any money on a savings account. And so that is funneling money towards the equity market. And I think what we're seeing is we're

sort of building a ladder of rationalization around this bounce back in jobs and signs that things might be getting a little bit better. I mean,

they are getting a little bit better and that's good, but it's a little bit. I mean, it's a little bit like you fall off a clip and you land on a

trampoline.

And, you know, the bounce is impressive, but I think the poll is really more important here. And we seem to be missing that.

QUEST: Well, but that's one of those interesting things. Does it matter that we may be missing it if investors believe -- excuse me, if investors

believe that this is the way forward, does it matter?

KELLY: Yes, it does matter because in the short run markets are driven by emotion, in the long run, they are determined by economic fundamentals.

[15:35:08]

KELLY: And, you know, it's good to see that the bottom of this recession wasn't as bad as it might have been in terms of unemployment. I think

unemployment will slowly come down from here. But our models are still saying we'll probably have double digit unemployment going into next year.

And because, you know, the -- there's a lot of low wage workers and a lot of industries, which are just going to find it hard to come back here in a

fast way.

So we're going to be dealing with a lot of problems for a while here. I think the market is a little bit ahead of itself here. And then you get a

correction. I mean, what's a correction? It's when the market realizes that got ahead of itself. So the fact that the markets going up this much

shouldn't mean that we should -- we shouldn't feel complacent about this. I think it's important to be diversified, important to recognize. So still

some problems out there which could cause a market correction.

QUEST: Right. Yes. Okay. The problems of course of earnings and the strategy for going forward of a diverse portfolio. But as bonds continue to

be in the doldrums, this does hinge. But -- this does hinge as you rightly said on this search for yield. And I wonder whether search for yield

eventually increases risks to unsustainable levels?

KELLY: Well, it does and what, you know, what we're in right now, and we've been in this for a while, but it's pretty extreme right now is we're in a

low interest rate, low inflation environment with high asset prices, you got a portfolio, you're trying to find income, I want to do that. The right

way to do that, I think in many cases is have a total return strategy set a little principle and nothing wrong with it.

So, you know, if you've got some stocks, which have gone up a lot, sell a little bit of that, make your own income but don't just -- don't say you

could only get income from coupons or dividends and then go out on the risk spectrum, trying to find the highest yielding bonds, the highest yielding

stocks. I think that is dangerous. So I think when you've got very low interest rates low inflation, think about a strategy where you sell some

principal to generate income rather than just the highest yields you can find.

QUEST: I understood, understood, but it's very difficult. I mean, look, I found myself in my own sort of portfolio, it's very difficult not to think

hang on this gravy train is leaving the station. accepting all you've said about all the hardships that still exists in the people being left out, but

this gravy train is leaving the station. And I'm at risk of not being on board.

KELLY: Well, you should be on board the train for the long run anyway, and I think it's so important to have a long-term strategy. You know, this has

been a crazy year perhaps the craziest year we can remember, you know, in modern history, and the market has swung pretty wildly and you're not

supposed to be able to time every part of this but ask yourself when you buy an investment, is this a good investment where I look back five years

from now, 10 years from now and say that was a good a good investment.

And one of the problems right now is when you look at long-term bonds, you're given the amount of stimulus to the economy, I think we'll

eventually see somewhat higher inflation. If we do that, we're going to see somewhat higher interest rates. And you can make money on -- in bonds if

you start below one percent and rates rise. So I think that is pushing money towards equities. But I think you've got to be careful here.

Make sure you're being logical about this. It's not about how you feel. It's about how you think, that's how you make money in the long run.

QUEST: Logic, that is a word we don't often hear too often, but I'm grateful you brought a bit of logic to our proceedings today. David, have a

-- have a good weekend. So I appreciate it. As always.

KELLY: You too.

QUEST: Thank you now. The airline stocks, the airline stocks on extraordinary run this week. American Airlines is up nearly 10 percent and

that's on top of a 40 percent jump yesterday. Now the largely because American announced its increased expansion schedule for July. All the other

major stocks are up for the airlines as well and it is scene of rebound for U.S. airlines. The TSA reports gradual uptick and checkpoints still below

pre pandemic levels obviously.

Lufthansa says it expects the flight to 70 percent or something of its destinations from Frankfurt and Munich. Virgin Atlantic said it is going to

be flying again to the United States and starting from July. Our Aviation Correspondent is Pete Muntean. He joins me now. What I found interesting,

Pete, was he -- was I think it was you who e-mailed it to me, was United Airlines pointing out, you know -- in May, they didn't fly -- they didn't

fly (INAUDIBLE) five percent.

In June, they're going to fly 70 percent or not fly -- not fly 70 percent. So they're still not flying vast amounts of the network.

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: That's exactly right. You know, airlines do think that more people are interested in flying and that's the

reason why they're adding flights, you know, United says that it will ramp up to 30 percent of its normal schedule in July. Americans has 55 percent.

Delta says 40 percent.

[15:40:08]

MUNTEAN: You know, this is typically at the start of busy summer travel season. And Airlines, Richard, are only seeing a miniaturized version of

that. They do say though, that people are telling them that they're interested in going to places like national parks, places that where it's

easy to social distance. United says it will add 140 nonstop routes in the month of July. So good headlines, although not necessarily perfect.

QUEST: So away from the stocks which are reacting to the fact they were beaten up so badly, if you look just at the root structures because you've

still got issues of quarantines and border issues in NAFTA, you've still got issues of quarantines and border issues for transatlantic flights. And

when did -- what's the forecast for the end of the year?

MUNTEAN: Well, we know that airlines are interested in adding flights later on in the end of the year, at least here in the States, we know that many

areas are starting to open back up. So that's why you're seeing a lot of these domestic airlines start to add routes because simply they say that

people are ready. They say they've heard from passengers who are ready to get back to flying in spite of all of the policies that they've put in

place, you know, requiring that folks wear mask, making sure that people stay clean and healthy on the airplane.

Handing them little hand towels and wipes as they get on board. So, in the United States, we're just seeing a microcosm of things opening back up.

People are ready to travel again to a small degree, although it definitely pales in comparison to just a year ago.

QUEST: Pete, good to see you, sir. Thank you. You'll work closely for us. That I'm sure. In just a moment, we're talking about transatlantic travels,

Spain is hoping to open up its travel industry. Travel and tourism by July. We'll look at what that means. After the break.

(COMMERCIAL BREAK)

QUEST: Such as Spain where the government is aiming to reopen the tourism industry in July. Now if you look at the way they've done the reopening in

Spain, around half the population will enter third and final phase of de- escalation on Monday as mostly on the coasts on the islands. Beach is crucial to tourism industry. The major cities they will have to wait a bit

longer. Madrid and Barcelona is in phase two.

[15:45:09]

QUEST: Simon Calder is the travel editor for the independent and is with me from London. Good evening to you, Simon. So Spain reopens. This is going to

be incredibly important providing there are travel availability, even corridors and bubbles from the main countries of say, Germany, Nordics,

Scandinavians in the U.K.

SIMON CALDER, SENIOR TRAVEL EDITOR, THE INDEPENDENT: Yes, and in fact the U.K. is the odd one out which I'll explain in just one moment. But Europe

is now after having months of complete disorganization. The European Union, the Schengen Area are basically agreeing that all the barriers that they

put up in the early stages of the coronavirus pandemic all going to come down relatively synchronized on the 15th of June in 10 days from now.

They will then find that on the first of July that's kind of unofficially been decided is the day that Europe formally reopens and Spain the most

important destination for summer beach tourism will certainly be opening on that day. But it's also turned into something of an arms race in the

Mediterranean. So Croatia, actually for two weeks has been saying, hey, we're open, now why don't you come to the beautiful Adriatic coast?

Italy has just been opening up, tomorrow, Portugal's beaches come back into play and you had the same pattern rippling along the Mediterranean.

QUEST: Would you expect it to be a price war? I mean, are we going to say the (INAUDIBLE) easy jets bucket shot prices down in the basement and

hotels to be had for a song?

CALDER: Yes, I most certainly am seeing that initially, but that is really just to stimulate the market. And there's plenty of fairs around for about

$100. I will take you from Germany or from the U.K. down to Spain for a round trip in July and August which is simply unheard of. But there's a

really big problem in the shape of the quarantine rules that in just over 48 hours from now will mean that anybody flying into the United Kingdom is

going to be quarantined.

And that includes returning people coming back from their vacations. As a result, effectively, U.K. outbound tourism is simply being killed off at

least for the month of June.

QUEST: So, let us get to that. One assumes and that the government are not completed yet in that sense. So, it begs the question the quarantine in the

U.K. has a health purpose but it is going to destroy the outbound and inbound tourism industry. What's the justification?

CALDER: Well, there isn't really, it is a purely political maneuver. They're doing their very best to try to find some scientific justification

but I'm afraid it's full of holes. It's really just stems to a domestic political decision that was taken about a month ago. And ever since then,

the government's been desperately trying to find ways to justify it. The -- I've never seen the travel industry in the U.K. so united nor so angry or

what they see is just a wanton as you say, destructive act, which is effectively going to kill off an awful lot of businesses.

And of course, the weekend that players such as EasyJet or British Airways become, the more delighted their foreign competitors will be. And

meanwhile, of course, Britain is not going to do brilliantly well with inbound tourism because who would fly the Atlantic and go to U.K. if you

have to spend two weeks stuck inside a hotel room before you're allowed to -- outside to enjoy the wonders of the United Kingdom.

QUEST: We need to talk more about that in the future. Simon Calder, thank you. When we come back in just a moment, the U.S. job numbers showed

remarkable improvement, but the gains were not shared equally. Black Americans have suffered considerably and they are not recovering by

anywhere near the same levels. We'll talk about that after the break. It's QUEST MEANS BUSINESS. It's a Friday (INAUDIBLE) we'll talk about it.

(COMMERCIAL BREAK)

[15:52:25]

QUEST: And so, Donald Trump has been touting the strong U.S. employment numbers. And in somewhat of a remarkable statement, he managed to tie the

learning number of unemployed on the market with George Floyd. He actually said George Floyd would be happy with the situation today.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Hopefully George is looking down right now and say this is a great thing that's happening for a

country. This is a great day for him. It's a great day for everybody. This is great for everybody, it is a great, great day in terms of equality.

(END VIDEO CLIP)

QUEST: But it wasn't because the numbers show that the difference between white and Hispanic workers which was particularly strong versus black

workers. Clare Sebastian is with me to explain. Clare, let's gloss over the crassness of the comment of George Floyd looking down and approval or

otherwise, just get to the actual numbers and what it showed.

CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Yes, Richard. Bottom line, this is not an equal recovery at least so far, it's still early days,

as you've been pointing out throughout the program, but the rate overall declined by 1.4 percentage points, that's in a single month. That's

staggering in itself. But for blacks, it went up slightly naught point one percentage points. Now that, you know, more or less flat because these

numbers are subject to revisions and it's a small sample.

But basically, it did not really improve the situation for black Americans. And this is concerning one because we know they've been disproportionately

affected by the health impacts of COVID-19. And two, because that's extremely sad because in the decade leading up to this, we've always seen

that black unemployment and in decades leading up to this has been greater than white unemployment.

But the gap had started to narrow. You heard Jerome Powell repeatedly the Fed Chair in press conferences, saying that the strong labor market is

bringing back in those who had been marginalized for years. Now we see that being undone. The gap is re widening again, and I think the question is,

will we start to see it now it narrow as we get more results out in June and beyond or will this be another unequal recovery, the likes of which we

have seen in history before?

QUEST: The reasons of course, are systemic, and they're not cyclical. They go to all sorts of issues of health, poverty, education and things. But,

you know, let me -- let me put to you the question I put to Miguel Marquez at the beginning. To change this is going to take more than just fiddling

around at the margins.

[15:55:10]

SEBASTIAN: Yes. I think in the short term, Richard, it may mean more stimulus. We heard from the President that he -- he's willing to do that

today. And if you look at where the jobs will last this month, this is particularly telling because we saw a lot of gains, for example, in

hospitality and restaurants and things like that. The big losses in government jobs and that is where black workers typically are

overrepresented and particularly in education where we've seen school closures.

And you may say, look, schools haven't opened yet. When they do, we'll see these jobs bounce back. But that all depends on the state budgets, a lot of

states are warning about huge deficits and the need to cut jobs including in education. And I think if we don't see more aid to the States, this

problem could become permanent. But of course, the thing you pointed out as well is that black Americans because of the systemic poverty, because of

the decades of higher unemployment rates compared to whites are less resilient when it comes to these job losses.

According to the economic policies today, they've been adding 73 cents on the dollar compared to whites one and five live below the poverty line. So

this will lead to increased poverty rates overall this this inequality of the recovery is not good for anyone Richard.

QUEST: Clare Sebastian. Clare, thank you. Markets giving up a few of its gains, but frankly, not much, but still up over three percent. We will take

a profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: So the employment numbers and unemployment numbers all very good news, indeed. But as Jason Furman on this program tonight told us, you have

to take it with a pinch of salt. Today's profitable moment reminds us that there are better -- there are games that are taking place, things are

getting better, but they're not as good as they might be. And they're still got a long way to go.

Now the market is discounted that and I really believe it is about fear of missing out. The search for risk, which you heard talked about earlier in

the program, the way in which investors are determined to get risk on the table to make gains in a low interest rate environment. It could be

stirring up trouble for tomorrow. But at least for the time being, it does make for an ambulant end to the week.

And that's QUESTS MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're doing the ads ahead, I hope it is profitable.

[16:00:03]

QUEST: The market is up. The closing bell is ringing. The week is done.

END