Arrests In Hong Kong Under The New National Security Law; COVID Uncontrolled: Dr. Fauci Warns The U.S. Could See 100,000 Cases A Day
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need-to-know. Criminal conduct. Arrests in Hong Kong under the new National Security Law. COVID uncontrolled. Dr. Fauci warns the U.S. could see 100,000 cases a day. And Boeing backlash. New reports say the plane maker kept key information from regulators. It's Wednesday. Let's make a move. Welcome once again to FIRST MOVE, as we kick off the second half of 2020 after an extremely challenging start to the year, to say the least. One thing is certain, we'll be right here on FIRST MOVE to help you make sense of it all, if we can. Also here to help us on the path today, former U.N. Secretary General Bang Ki-moon with his views on Hong Kong, on North Korea and what a sustainable recovery from COVID-19 should look like -- lessons learned. But first, as always, a look at U.S. futures were softer after 1.5 percent gains yesterday. A strong finish for the quarter. Investors, I think, taking Dr. Fauci's grim COVID warning in stride, comforted by a reminder from Jay Powell and Secretary Mnuchin yesterday that yet more help for the economy is on the way. On that note, in a surprise move, too, the U.S. Senate voted to extend the Paycheck Protection scheme, loans to small businesses for a further month last night. A smart move, I have to say in my view with a recent survey from the National Federation of Independent Business saying two-thirds of borrowers could have used up all the loan money already, of course the economy, anything but normal, more help for many of those businesses will be required. Speaking of jobs, the private sector added some 2.4 million jobs last month, a hint that payrolls here in the U.S. tomorrow could be strong, too. Remember, we're expecting three million further job gains. Most of the gains, in fact, in that report coming precisely from small businesses. So, that program looking hugely important, as we've discussed in the past. To Germany now, the unemployment rate rising to a five-year high, but manufacturing there moving closer to expansion. In Asia, the stock market performance was mixed. In Japan, the TANKAN survey showed business confidence falling to an 11-year low. Meanwhile, in South Korea, factory activity fell for a sixth straight month. The challenges of export-driven economies in the current slowdown. Now, all eyes remain on Asia, of course, focused on Hong Kong, where a tough new security law has just gone into effect, and that's where we begin today's drivers. Police in Hong Kong making their first arrests under the law, at least nine people were arrested amid protests earlier today on suspicion of violating the law. Anna Coren is live in Hong Kong for us. Anna, we also need to underscore the importance of what July 1st is. Its establishment day, the handover day that's been celebrated since 1997. Talk us through what we saw today in terms of action and those arrests.</s>ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Yes, Julia, it's certainly a day of celebration for the Chinese regaining control of Hong Kong, but it's also typically a day of protests. Well, when protesters asked to have a permit to carry out a march that they've been doing since 1997, they were denied, and I can tell you that, despite that, thousands of people turned out onto the streets today and more than 300 have been arrested. You mentioned the nine under the new National Security Law, some have been arrested behind me and you can probably see just over my shoulder police there with protesters handcuffed on the ground. A few moments ago, a big bus filled with protesters was just taken away, people who had also been arrested. Now, those who have been arrested under this new National Security Law, Julia, some of them were just holding signs. Some of them were handing out fliers that said "Independence for Hong Kong." That is now a criminal offense. If you chant slogans, calling for freedom in Hong Kong, independence in Hong Kong, that is a criminal offense. It is such a stark contrast from what we have been seeing here in Hong Kong over the past year. But now with this new law that came into effect today, China is firmly in charge, and we heard from Hong Kong's Chief Executive, Carrie Lam, she said the new law is going to restore stability to Hong Kong. She is hoping that it will act as a deterrent rather than having to prosecute all of these people. Here is another bus, which will no doubt be taking more of these protesters who have been arrested, taking them away. But protesters have only been out on the streets since 12:00 to 1:00 this afternoon, and they have arrested more than 300 of them is an extraordinary number and it just gives you an idea, Julia, that they are tolerating no protests, no dissent whatsoever.</s>CHATTERLEY: I mean, the message from the Chinese side here has been, look, we are just specifically targeting a few troublemakers and we saw in the protests last year in particular that some of them got violent here. But to your point, now that we understand what this law contains and what it means, it gives the Chinese authorities huge scope here to step in and take very, very controlled and detailed action.</s>COREN: Yes, we do know what the law is about. It's banning sedition, subversion, terrorism, as well as colluding with foreign forces. Terrorism, Julia, is vandalizing public property. That has now been the definition of what terrorism here is in Hong Kong. As for sedition and subversion, I mean, they are extremely vague and broad terms. So really, it's up to interpretation; and no doubt, Mainland interpretation. Here we can see, police taking away more of the protesters that they have arrested and we've seen their faces. I mean, you're talking about young students, young Hong Kongers who are calling for greater freedom, something that they have been doing for the past year. But now, Julia, that is a criminal offense. Now, the maximum penalty, I should note, for this National Security Law, being in breach of this National Security Law, is life in prison. And whilst most of the cases will come under Hong Kong jurisdiction, the exceptional cases will be handed over to the Chinese and the Chinese will also be operating a security agency now in Hong Kong. So, it won't be just Hong Kong Police making these arrests for those exceptional cases, it will be Mainland Secret Police who are now allowed to operate here in Hong Kong. So for protesters, it is absolutely terrifying, and those exceptional cases will be taken to the Mainland where they will be tried, and if convicted, they will spend time in Mainland jails. And it's just ironic to think that this was what people in Hong Kong were fighting for this time last year over their Extradition Bill that had been proposed. Well, the fears of Hong Kongers have truly been realized, because China doesn't just have the Extradition Bill, they have so much more. You cannot speak out against the CCP. You cannot oppose them, and that is terrifying people here. If the aim is to fear and intimidate, it certainly is achieving that goal, except for the few that have taken to the streets today to protest about this new law -- Julia.</s>CHATTERLEY: Incredibly brave, and we were just seeing them there being put onto the bus, and it was, to your point, young people. There were girls. There were all sorts of very young individuals here that have taken a stand, despite the risks and the potential high costs. Anna Coren, great to have you with us. Thank you so much for that. All right, let's move on. A stark warning from a leading member of the U.S. Coronavirus Taskforce. Dr. Anthony Fauci says if the current trends continue, he wouldn't be surprised if the country goes up to 100,000 cases a day. He spoke at a Senate hearing on Tuesday.</s>DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: I have to say, the numbers speak for themselves. I'm very concerned and I'm not satisfied with what's going on, because we're going in the wrong direction. If you look at the curves of the new cases, clearly we are not in total control right now.</s>CHATTERLEY: Senior medical correspondent, Elizabeth Cohen is with us. Elizabeth, we've talked about this nowadays after days, but this was, I think, Dr. Anthony Fauci being as alarmist as he felt he could be at this stage and saying, the situation isn't under control and actually, more action is needed now.</s>ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Yes, absolutely, Julia. You know, in a way when you hear Dr. Fauci's tone, he sounds very calm. I know Dr. Fauci well and I know that he always tries to put out a tone of calm, but when you actually just listen to the words, this is quite serious and his words are actually quite severe. He went on to say that right now, we've got about 40,000 plus cases a day in the United States, and he's thinking that we could go up to 100,000. That is a huge jump.</s>COHEN: He is not saying this lightly. He is saying this looking at the numbers as they grow. In the United States, we now have 36 states, 36 out of 50 states that are seeing spikes this week. Last week, it was only 23 states that were seeing spikes. That's an enormous jump in one week. So when Dr. Fauci says something, he is not being hyperbolic, he is doing it based on the data -- Julia.</s>CHATTERLEY: Yes. Based on sheer concern. The Surgeon General also had some advice for Americans as well. I just want to play that for our viewers.</s>DR. JEROME ADAMS, U.S. SURGEON GENERAL: Please, please, please, wear a face covering when you go out in public. It is not an inconvenience. It is not a suppression of your freedom. It actually is a vehicle to achieve our goals.</s>CHATTERLEY: Elizabeth, even Goldman-Sachs weighing in yesterday saying, look, you can help with the health crisis and you can perhaps help with the economy, too, and avoid shutdown if you just wear a mask. This has become so politicized and it's so nonsensical, too.</s>COHEN: It is, Julia. I will have to say that I have tried to explain the reluctance to wear a mask to friends of mine who are not from the United States, and they are completely confused. It is as if I am trying to explain something preposterous to them. They say why aren't -- why is that such a significant proportion of Americans resisting this? And so part of it is, as you said, it's really a political statement. It's as if wearing a mask is admitting that somehow you are wrong or Trump is wrong, that there's something in your soul that is wrong. And of course that's not the case. We wear masks to protect the people we love and to protect the people we don't know. You wear a mask because if you're infected and you don't know it, and there's a reasonably good chance that you could be infected and not know it, you could get someone sick who gets someone sick who gets a child with leukemia sick and kills that child. Who would want to kill a child? No one would. But this has become so politically and emotionally charged, it is as if we are telling people you're wrong, you're a bad person, wear a mask. Of course, that's not what we're saying, but that is unfortunately how people are taking it. This has become very personal and very emotional.</s>CHATTERLEY: Yes, we have to take the emotion out of it, just wear a mask. Elizabeth Cohen, thank you so much. We'll keep repeating it back and forth to each other, and know at least, we're listening. All right, for all the fears, investors continue to look at the positives, it seems, setting aside rising health concerns in view of the enormous scale of stimulus that's been provided and perhaps more to come, too. With now that the NASDAQ is just one percent off record highs, the question is what comes next in the second half of this year? Richard Quest joins me now. Richard, you've been too polite so far to call me out on this, because you called it. You called the lows of the market and I remained incredibly nervous and remain so. But what do we think happens next? And it is a balance between stimulus and science, I think, as we've discussed all along.</s>RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: It's more of the same. And the reason is the Fed put. The Fed -- as long as the Fed is fueling the market with cheap money, it continues to rise because two reasons, Julia. Firstly, search for yield. There's no yield in money markets, there's no yield really in bonds, there's no yield -- if you need to make yield, the only place to do it is in the market, in the stock market. And when you maybe get three percent, five percent, seven percent there, you could do even better. So that's going to push the risk premium up quite sharply. The second reason, of course, is that technology stocks are going to still be the future. Technology stocks are the way in which working from home, greater digitization, they are driving economic growth. You're seeing it as you see the NASDAQ powering forward. Everything else comes along in its wake. So I do think you're going to have a slow trudge in Q3, election time, no one wants to wake waves. I do think Q4 gets very difficult because you're based on earnings. And so I think more of the same. Now, can I just take a second, if I may, Miss Chatterley. Masks, masks, masks.</s>CHATTERLEY: Oh, you got there before me. Go for it. Yes.</s>QUEST: Goldman-Sachs -- go on, you tell the story.</s>CHATTERLEY: No, no, you tell the story. I'll just sit comfortably in my chair. This, for me, is critical.</s>QUEST: All right. Goldman has pointed out that masks can actually save five percent of GDP if used, and the way they've done it is, they've looked at different metrics and they've worked out that if we don't use masks, there will, de facto, inevitably be lockdowns. Therefore, the price of not having those lockdowns is about five percent -- or the benefit, I should say, of not having more lockdowns is around five percent of GDP. It's a long 13-page report with formula that you would understand that I don't. But that's the nub of it.</s>CHATTERLEY: You're just being kind. The key, the ultimate key for me here is a national mandate on wearing masks.</s>QUEST: Yes, yes.</s>CHATTERLEY: It has to come from the top. Fifteen percent rise or increase in the number of people wearing masks. Yes, I don't like to make it political, but this is --</s>QUEST: I think that staggering statistic of five percent GDP is saved, because there will be lockdowns otherwise by a national mandate. It's not going to happen. But any rightwing conservative who likes to live their life by the fiscal nature of probity can't ignore that particular fact.</s>CHATTERLEY: The fiscal nature of probity, I agree. Help on the crisis and help the economy at the same time. No brainer. Richard Quest, a pleasure, always. All right, coming up later on in the show as Hong Kong faces a new Chinese reality, the former U.N. Secretary General, Ban Ki-moon is here and we've got a pro-democracy campaigner on the ground to talk through their thoughts, and what next, too. And the CEO of the arts and crafts super site, Etsy is on a tear right now as sales face higher charges, though -- can we ask -- and we will ask, is it a stitch-up? That's next. Stay with us.