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FIRST MOVE WITH JULIA CHATTERLEY

The U.S. And Iran Backing Away From Further Conflict; Markets, Meanwhile, Rise; Iranian Hacking Attempts Soar Since The Death Of General Soleimani; The Sussexes Announcing A Split Of Sorts From The Royal Family. Aired 9-10a ET

Aired January 9, 2020 - 09:00:00   ET

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


[09:00:21]

JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from the New York Stock Exchange, I'm Julia Chatterley. This is FIRST MOVE and here's your need to

know.

Tensions eased. The U.S. and Iran backing away from further conflict; markets, meanwhile, rise.

Cyberattack spike. Iranian hacking attempts soar since the death of General Soleimani.

And forget Brexit. It's all about Megexit. The Sussexes announcing a split of sorts from the Royal Family. It Thursday, let's make a move.

A warm welcome once again to the show. Great to have you with us this morning. Calmer heads in both Washington and Tehran seemingly leading to

common markets all across the globe here in what was perhaps another test of the long run the bull market here for stocks.

Take a look at what we're seeing on Wall Street. We're back to pre-crisis levels with stocks set to hit record highs at the open. The NASDAQ in fact

closing at records yesterday in what felt like a classic relief rally.

Now admittedly, sentiment won't have been hurt by some good U.S. jobs numbers, too. Private sector jobs growth coming in at 200,000 numbers last

month. That ahead of payrolls of course, the payroll data in the United States tomorrow, but the relief I'm talking about was a global and across

asset story.

Take a look at what we saw in Asia as well. The Nikkei rising over two percent over in Europe as well for comparison, the DAX up over 1.2 percent.

What about for the oil markets as well? They continue to retrace some of the recent gains we saw taking out that fear premium that was added as a

result of the recent ratcheting up of tensions between the United States and Iran. It's now nearing last week's pre-crisis levels, too.

Gold, also down for just the second time since December 27th. So a bit of a relief here, as you can see all around. The question is, is it justified?

Let's get to the drivers.

The United States Congress voting today on limiting President Trump's military mind just as the U.S. pulls back from the brink with Iran. If

passed, the War Powers Resolution would give Congress a greater say about future military action.

Nick Payton Walsh joins me now. Nick, great to have you with us. We can talk about whether or not that's got any chance of passing. But first, I

want to ask, are we clearer on what the U.S. strategy is with regards to Iran now?

The President said yesterday, he is ready to embrace peace, but at the same time, he did ratchet up the economic sanctions on Iran, too. So what are we

thinking here?

NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: Yes. I mean, essentially, we're right back to where we started with the added fact that

we now know that the Iranian and U.S. military are able and capable of getting into direct military and military confrontations here.

So don't underestimate the impact the last week has had. What is the Trump strategy? Long term, he seems to hope possibly there could be some internal

upheaval in Iran that may unseat the government there that he possibly hopes to strike a deal with Iran, like he's always said he wanted, which

would include their nuclear project, but also ballistic missile programs as well. And yet again, more sanctions.

We don't know the detail of what he announced yesterday. He simply didn't say it. But we do know that, frankly, when they tried that last time after

the Saudi oil field attacks, many analysts said there wasn't much left to sanctions.

So we are essentially back where we started, but do not feel a sense of relief here. This is not a good thing that has occurred over the past week

in terms of regional stability.

Iran hasn't really exacted the blood vengeance, I think many in its command want from the loss of their top military commander. We may see moves to try

and attain that in the weeks and months ahead.

They have many asymmetrical ways of attacking the U.S. military presence in the region using proxies. They have a much more patient timescale when it

comes to pursuing things different to Donald Trump's kind of cable news dots, if it were.

So the big takeaway, I think here, is that while you might make a case to suggest that what President Trump did by taking out the preeminent military

plan, organizing attacks previously and accused of organizing imminent ones of Iran that was not an irrational move.

To some degree, the messaging around it was chaotic and caused many I think, to be terrified as to what may happen next. We are of course now

dealing with an Iran that is quite capable, it seems of launching attacks against U.S. military targets.

The direct military to military confrontation turned out weirdly to be an off ramp because nobody was hurt and so much warning it seems have been

given, the choice of ballistic missile that has a few minutes early warning on radar systems and also, it seems, tip off by Iraq given to the

Americans.

We are in still to a very uncharted waters ahead -- Julia.

[09:05:06]

CHATTERLEY: Yes, and there are those at this moment that say, actually this was a warning shot for Iran to say that actually this administration and

this President won't stand by without taking action.

But there are Members of Congress, and I'm talking about senators on both sides of the aisle here that are saying we simply don't want to see this

again. We want to limit the President's powers.

What chance if any, does this resolution have of passing today, even if the House votes on it today?

PATON WALSH: Yes, I mean, a lot more frankly, that has to go through legislatively. And we've seen in the past too where Congress has tried to

prevent military action impeded, at least even if this got through, it would essentially give I think, the presidency about 30 days before it had

to actually have a congressional vote to authorize military action.

And bear in mind as well, the prospect frankly, no matter how poorly managed everyone handles this crisis in the region of a long-term military

conflict between the United States and Iran is exceptionally small.

We're more likely, if this inflames to see airstrikes over a number of days, we're more likely to see the Iran proxies take it out on U.S. allies

there.

That could be true. But just as a broader caveat, you don't normally tend to see conflicts between countries particularly simmering a length like

this unless both side thinks there's a possibility they might get something out of it.

Donald Trump does not need another war in the Middle East, particularly with the frankly farfetched idea of some kind of U.S. ground involvement

against Iran. He does not need that in the months ahead when he's trying to get reelected. It is the opposite of what he promised the American people.

And no matter what bluster you hear from Iran, they simply have too much internal issues, too much internal unrest, too many economic problems, they

are too crippled by sanctions, and frankly, haven't got a strong enough military at this stage to countenance a lengthy war against the United

States or its allies in the region.

So, you know, yes, Congress, I think wants to have its voice felt here. Certainly, they seem to be extremely disappointed in the level of

Intelligence given to them yesterday to justify these attacks about how imminent the threat was; that will be key, but it appears to have gone off

the radar now. Frankly, this crisis has been resolved.

But the abiding feeling I think here is that Trump is often so ramshackle and is making something rational by taking out Qasem Soleimani potentially,

you know, a key threat towards the United States interest in the region gets lost in all of that.

And frankly, it's been a week where a simple administration strategy that was calm, clearly messaged proceeded with diplomacy, and trying to get

everyone together, understanding where the U.S. was going, could have made this so much calmer than it was. Instead, we had a lot frankly, a panic --

Julia.

CHATTERLEY: Nick Paton Walsh, international security editor. Thank you so much for joining us on that.

Now, very much directly related to this, global hacking attempts emanating from Iran has almost tripled since the killing of the country's top

military leader, Qasem Soleimani. That according to cybersecurity experts.

Clare Sebastian joins me now. Claire, great to have you with us. Emphasis on attempts here. How successful have they been overall and talk us through

this pick up, the rise here that we've seen.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, we haven't yet seen any kind of big bang attack, we should be clear on that. What

researchers are observing is really, Iran or Iran-based hackers raising their heads above the parapet.

According to research firm CloudFlare. They saw a 50 percent increase in the wake of the killing of Qasem Soleimani of Iran based attacks on U.S.

government websites.

They also, in terms of global attacks, saw a significant uptick in attempts to hack targets around the world, traced back to IP addresses in Iran in

the wake of that attack. So that is significant according to researchers.

In terms of the types of attacks, this is so far in a fairly small scale. We're seeing website defacements. We saw a picture of President Trump's

bloodied face on a website -- on a website blown to the government publishing officer office over the weekend, similar treatment for the Texas

Department of Agriculture, and Alabama based veterans group.

There's also been according to researchers, some denial of service attacks. We've seen Iran deploy those in the past several years ago against U.S.

banks, and particularly significant, what we call probes. This is where Iran can sort of infiltrate networks and just sit there and watch.

That is significant because, you know, one concern for researchers and frankly, for U.S. government officials is that Iran could use its cyber

capabilities to sort of inform physical attacks, to set up camp and to watch targets and to use that to play into any more potential retaliation

in the physical space. So that is the key component and U.S. officials are watching this very closely.

CHATTERLEY: Clare, fantastic to have you with us. Clare Sebastian, but later in the show, we're going to be talking to the Director of

cybersecurity company, FireEye about the nature of this threat, what they're seeing and what they're looking for.

For now, let's move on. Ukrainian authorities are in Tehran investigating multiple possible causes for Wednesday's deadly plane crash of Ukrainian

Flight 752. Those causes include a possible anti-aircraft missile attack.

[09:10:10]

CHATTERLEY: Iran says, the Boeing plane was on fire before it hit the ground killing all 176 people on board. Scott McLean is in here for us now.

Scott, of course that's just one possible cause and we don't want to speculate at this stage. But what more do we know?

SCOTT MCLEAN, CNN CORRESPONDENT: Hey, Julia. So this is coming from the head of Ukraine's National Security and Defense Council, who is saying that

they're investigating a range of possible reasons why this plane went down.

One of them is that the plane may have hit a drone or another aircraft. One of them is potentially an engine explosion or some sort of catastrophic

engine failure, potentially a terror attack inside the plane or that the plane was hit by an anti-aircraft missile which would have been fired from

the ground.

Now, it's important to point out, these are all just possibilities. One is not necessarily more likely than another one. What we do know at this point

is that according to the initial Iranian investigation, the plane tried to turn back to the airport, presumably after it was lost from radar in order

to find a landing spot after this potential problem or this problem that we don't know what it is yet cropped up.

We also know from that that the plane was on fire before it actually hit the ground. Ukraine has sent a team of about 45 experts and investigators

to go there to try to get some answers. It is likely that the Canadians and the Swedes will also be involved with this investigation.

But one thing is clear, Julia, and that's that the Iranians say that they will not send those two black boxes back to the U.S. manufacturer of this

Boeing 737 under any circumstances, at least that's what they're saying at this stage.

CHATTERLEY: Yes, and that's not against protocol. We have to point that out at this stage, too. But there is a broader worry here, if we don't see any

form of U.S. participation here. No participation, even at this stage from Boeing.

Are we going to have confidence in the report that we ultimately get here about exactly what happened? It's a question here.

MCLEAN: Yes. And I think that it's a fair one. The authorities in Iran working with the Ukrainians, the Canadians, and the Swedes, they should be

able to decode the black boxes, but there's a lot of information on there.

And if they run into any potential issues, what often happens in these cases that they would usually send them back to the manufacturer to have

them try to look at it and try to get that information off of them.

They're saying -- Iran is saying that that won't happen, but obviously they could potentially change their mind down the road, but it does call into

question that potential integrity of this investigation and there are 176 families who are really craving answers here.

Eleven of the victims are Ukrainian. You can see this memorial for nine of them behind me. These are the nine members of the flight crew, and there

was a really powerful scene about an hour ago or so.

The mother of one of the pilots, Captain Volodymyr Gaponenko, was here sobbing uncontrollably. I've rarely seen grief like I saw from this mother.

She was saying over and over in Ukrainian, why have you left me? Who will visit me? Really pleading for any of her son's remains to come back to her

as is the tradition here in Ukraine -- Julia.

CHATTERLEY: Yes, whatever the cause here, devastating for anyone involved and our hearts go out to those people. Scott McLean, great to have you with

us reporting from Kiev there in Ukraine.

All right, let me bring you up to speed now with some of the other stories making headlines around the world.

Prince Harry and Megan, Duchess of Sussex say they intend to step back from their roles as senior members of the Royal Family. The couple say they want

quote, "financial independence," meaning they no longer wish to accept public money. They did not consult other members of the Royal Family about

their decision.

And Max Foster is in London for his on this story. Max, shocked perhaps in terms of the timing, but I think anyone who has watched the tensions within

the Royal Family and this couple would perhaps not be surprised by the decision.

But I can't help feel like they're cherry picking a little bit, not doing the tough jobs here of the Royals, but keeping all of the good things like

the branding that will help them on their way.

MAX FOSTER, CNN ROYAL CORRESPONDENT: Well, if we look at this as a business story, this is a firm, it's an organization, it's also a family, and they

need to find a way to work together. And they're fundamental -- they have a profit motive, of course, but their fundamental reasons for being is to

support the Queen as Head of State and head of the family.

So all the other Royals are there and they carry out engagements on her behalf. All there, working towards the Queen. So that's how the roles

emerge. They emerge in the shadows of the Queen.

What you can't do, well, no one has achieved in the past is to find a new role where you can do a bit of that and also have your own private sector

career.

[09:15:00]

FOSTER: But that's effectively what this couple are proposing. And they did so in a very intricate website that they published last night.

On the face of it, not too bad an idea perhaps. They're trying to get -- make the best of a situation where they're never going to be King and

Queen, but they want to support the Queen as she sits on the throne right now.

But it was the way they handled it. It was the fact that they just published this website, saying this is our new role, without discussing

that with the Queen, with Prince Charles, or with Prince William.

So the rest of the firm were completely in the dark about this, and it can't happen without their support. You can't do it without collaborating

with the other members of the family. So that's why you're hearing words like hurt and deep disappointment, and this is a complex matter coming out

from the Palace today -- Julia.

CHATTERLEY: Yes, it's quite funny, Max. I mean, they also pushed back against some of the coverage and they've done this for many months and

weeks. The coverage that they get, they say at times is very unfair, particularly by the British media here.

And to your point, and I think you raise a great point here, they perhaps should be lauded for the fact that they want to provide a piece of modern

monarchy here and be financially independent the best way they can.

They've both got talents and skills that perhaps they could utilize in that vein. Is it simply the handling of this, as we see again, a pretty fierce,

negative response here for the couple?

FOSTER: Yes, there's a couple of things going on here. So there's this tension within the family, within the households, which has been building.

That's become unbearable.

But then there's the other wider concern, which is the media pressure, and the fact that they feel they have a right to a private life and they're not

getting it.

So what they're -- their counter argument from the tabloids, for example, is always that you get public money, you're public figures, so you don't

actually have a right to a private life or minimal private life and they fundamentally disagree with that.

So what they're trying to do is say, okay, we'll give up the public money, the five percent of our income that comes from the sovereign grants, and

that strengthens our argument that we do have a right to have private life.

I mean, journalists have this issue, they don't know when they have to consider, you know, what sort of relationships they have with brands? Will

it compromise their reporting? You have it from, you know, chief executives as well? How much do you work with other brands in order not to compromise

your primary role?

They've created some murkiness there. It's going to be very difficult to see how they can define this role, which is part public and part private

sector. But you know, they are a very successful, very charismatic, a very powerful couple. They've achieved a huge amount in their career so far,

maybe they can make it work.

But at the moment, they've got this deadlock, because the rest of the family are furious with what they've decided and not they're not going to

collaborate. They're going to have to work through the issues together somehow. So they're going to have to find some compromise somewhere.

CHATTERLEY: Yes, just because you're Royal doesn't mean you aren't human. And I think we're seeing that playing out. Max Foster. Great to have you

with us. Thank you so much for that.

The U.K. House of Commons, meanwhile, will vote on the government's Withdrawal Agreement Bill shortly. Given Prime Minister Boris Johnson's

commanding majority, the Brexit Bill is expected to pass. It will then head to the House of Lords.

To France now and mass demonstrations against President Macron's proposed pension reforms continues, fanned by unions, protests have been going on

for over a month causing power cuts, disrupting transport and forcing schools to shut down. They are the country's longest nationwide strikes in

decades.

All right, we're going to take a quick break here on FIRST MOVE, but coming up, all be damned. President Trump makes some pretty bold claims about

America's energy dominance. We will sort through the details.

And Ghosn on the run, but how far can he go? There are new restrictions on the former boss turned fugitive. All the details, next.

(COMMERCIAL BREAK)

[09:21:52]

CHATTERLEY: Welcome back FIRST MOVE where U.S. stocks are set to hit fresh record highs at the open this morning. Basically what we're seeing here is

an unwinding of some of the safe haven trades made earlier this week.

Take a look at gold. We're pulling back from some seven-year highs. Brent crude is now down around $6.00 a barrel from recent highs. We've got

dollar-yen higher as well, and the 10-year yield also pulling up a little bit hereto.

Jeff Kleintop is Chief Global Investment Strategist at Charles Schwab and joins us now. Jeff, great to have you with us. Is this complacency for

investors, do you think? Or justified given the ratcheting down of tensions, at least, verbally it seems?

JEFFREY KLEINTOP, CHIEF GLOBAL INVESTMENT STRATEGIST, CHARLES SCHWAB: Well, maybe I'd categorize it as classic. This is a classic, almost textbook

response to us airstrikes.

Unfortunately, we have 30 years of history to look at when we see what the market impact of U.S. airstrikes are, and this is exactly what happens. You

get this negative reaction on the first day or positive reaction in the case of safe havens, which then works its way back over the next five days.

That's been the case for stocks, bonds, oil and gold this time. It really is a classic reaction. I think it makes sense in the context of a global

economy, which is showing signs of stabilization. After slowing last year, global leading indicators have ticked up for the first time in two years,

even the manufacturing sector where the world economy has been weakest has shown some signs of stabilization.

I think markets are more responding to that and downplaying those geopolitical flare ups.

CHATTERLEY: Yes, we've done a three, four, five-day round trip, and we're back where we started here. But the big risk of 2019 and you've alluded to

it here was the trade uncertainty that we saw. We got confirmation that the Chinese are coming to sign the Phase 1 trade deal next week. Have we seen

peak uncertainty for trade now as we move into 2020?

KLEINTOP: The market seems convinced to that, I'm not. I think we'll see further trade issues flare up over the course of the year, not just on the

path to maybe some type of Phase 2 deal with China, which seems unlikely, but maybe it changes from broad tariffs, to more focused trade issues on

technology and technological leadership.

We already know there's a struggle with 5G between the U.S. and Chinese leaders. But there's other areas, in AI and robotics, where companies could

butt heads, and so the countries could butt heads over the company's developments.

So I can see this beginning to affect the tech sector, excuse me, which has been a leadership sector for the global stock market. That could begin to

fade a little bit here this year, it could cause troubles for that sector.

CHATTERLEY: Yes, I was just showing on the screen actually a tweet that you sent out earlier about what happens first in 2020, and the majority of

people who voted said "The Mandalorian" Season 2 is going to come first, rather than a Brexit Stage 2 or U.S.-China Phase 2, which actually amused

me this morning.

But to your point, what we saw in 2019 was real leadership coming from the technology sector. So if this sort of strategic conflict that we've seen

between the United States then hones in on the tech sector, are you expecting a loss of leadership, perhaps then for the technology sector? Or

is that sort of too blunt away to say it here?

[09:25:00]

KLEINTOP: Well, I think we could see a shift more towards value-oriented leadership. Industrials, on maybe in emerging manufacturing rebound.

Financials which have actually performed pretty well over the last, say, five -- four or five months, particularly in Europe, and maybe energy as

well.

I know energy stocks have pulled back a little bit here tied to the weakness in oil prices, but maybe that firms up a little bit. Those value

parts of the market really have been leaders in a while and could provide maybe a second wind for the overall stock market with the tech sector. It's

maybe going to be a little bit tired after carrying the market for so long.

CHATTERLEY: Yes, we've been through a 15-month downturn in the manufacturing sector I think on a on a global basis. We seem to see a bit

of a pickup, then the December numbers were a bit cautious. The U.S. numbers at the back end of last week again in the manufacturing survey data

worrying. Where are we on manufacturing? And how important is this if the consumer remains strong?

KLEINTOP: This is really important. I mean, this has been the crux of where the weakness is and could extend into job cuts if inventory levels remain

this high.

So we do need to see this -- and demand particularly for autos firm up, and that's really key. So we've come back to around the 50 level globally,

which is the breakeven between growth and contraction in manufacturing.

I think the key thing is to watch products like autos, that's a huge part of the manufacturing supply chain. Demand has been soft. But if we look at

auto registrations in Europe, for example, the trend there has really rebounded pretty well.

So if we can see more consumer interest in some of these large manufacturer big ticket items, we can see a turnaround in manufacturing. That's what I'm

watching most closely.

CHATTERLEY: Yes, it's such a great point. Watch the auto sector. Jeff, fantastic to have you with us. Jeff Kleintop, the Chief Investment

Strategist at Charles Schwab there.

All right, we're counting down to the market open this Thursday morning. We are expecting record highs -- fresh record highs for the U.S. stock market.

Stay with us. The opening bell here at the New York Stock Exchange is next.

(COMMERCIAL BREAK)

[09:30:00]

CHATTERLEY: Welcome back to FIRST MOVE live from the New York Stock Exchange and the opening bell here in New York this Thursday morning. As

expected, a strong open for U.S. stocks this session.

Stocks around the globe in fact in rally mode as the U.S. and Iran appear to pull back from a wider military conflict. We are higher right now as you

can see by four-tenths of one percent here across the board.

We're pretty much back to where we started before the tensions flared last week. The NASDAQ moving further into record territory in early trading.

Actually, S&P 500, too in record territory as well.

It's a global story though, but I have to say new challenges await. Fresh challenges await investors beyond geopolitics. We've got the December jobs

report out tomorrow here in the United States. We've got earning season as well beginning next week. Major U.S. banks are reporting.

And last but not least, China of course announcing, as we've mentioned already on the show that the Vice Premier, Liu He will be in Washington

that next week to sign the first phase of the U.S.-China trade deal.

All right, let me walk you through some of our Global Movers this morning, too. Apple stock hitting refresh record highs. The company has announced

that the App Store customers spent almost $1.5 billion between Christmas and New Year, a 16 percent increase from the same time a year ago. Shares

have now officially doubled over the past year.

Take a look at Tesla, too. Higher by some 1.3 percent moving closer to that $500.00 a share mark, that despite some cautious new comments from two Wall

Street analysts on valuation concerns. Tesla stock has doubled in just the past three months.

Shares of the tech giant, meanwhile, Hewlett Packard are also trading higher by some two tenths of one percent. Report say it's once again

rejected a takeover bid from Xerox.

So we'll just stay though, on that Tesla, the average share price estimates just over $300.00, I think from analysts on the street. We are way ahead of

that right now.

All right, let's move on. Cybersecurity experts are reporting a spike in Iranian hacking attempts since the killing of General Soleimani of Iran.

Denial of service attacks and network probes top the list.

My next guest though says, the most damaging threat though, could be cyber espionage. Joining us now John Hultquist, he is Director of Intelligence

Analysis at FireEye.

John, fantastic to have you with us. Let's just start by talking about what you've seen in terms of scale and numbers since the attack obviously on

that General Soleimani. What do you been seeing?

JOHN HULTQUIST, DIRECTOR OF INTELLIGENCE ANALYSIS, FIREEYE: Well, we are still seeing the adversaries that we track and they still appear to be

mostly focused in the Middle East. That's where they've been traditionally focused.

We are expecting them to move a lot of their operations towards targets in the United States, particularly as they try to understand the dynamic

situation that's unfolding. They'll be carrying out cyber espionage against policymakers, diplomats, military and government.

We are also concerned because of some of the terrorism concerns that they are also tracking people specifically through some of the intrusions

they've carried out against places like telecommunications firms, hospitality, hotels, travel, airlines. These intrusions could allow them to

specifically watch people as they move in and out of countries and find them.

CHATTERLEY: Yes, it's effectively spying. How well protected if we're talking about people like politicians, if we're talking about Congress,

specifically right now, and particularly in the United States, how well protected are individual from this kind of intrusion? This kind of spying?

HULTQUIST: Well, U.S. government networks tend to have very robust security. We see these adversaries consistently target them. It is an

uphill battle for them when that happens. They're often found and the incidents are sort of disrupted.

But what we're talking about with some of the surveillance capability is their ability to go after the places that you might use your regular cell

phone at, the places you might schedule a flight from. Other places like that, where -- these are third parties that we use that are not necessarily

within our control.

CHATTERLEY: Who are we talking about when we say they? You said they've been doing this and we've seen a step up. Are we talking about hackers that

are state sponsored?

Because if I look at some of the data that we've seen just in the last couple of days, we've seen it increase on a global basis. And I just wonder

whether this is more sophisticated hackers that are perhaps masking their whereabouts or it's not just about risks emanating from Iran, but perhaps

they're using others, whether they've come from the dark net or other proxies, for example.

[09:35:16]

HULTQUIST: Great question. So, the Iranian Intelligence Services who are tasked with a lot of this activity are using proxies to carry out a lot of

their activity.

In the wake of the Stuxnet incident where they Iranian nuclear program was disrupted by a tool that probably came from the United States, they

developed a program on the backs of their local talent, which were essentially hacktivists or young criminals who were then sort of -- who

sort of went legit and held out and set out a shingle and set up a website and called themselves penetration testers with government sponsors.

So they're using this talent to carry out these incidents. But we've also seen -- there's a sort of nationalist undercurrent of civil society who is

carrying out some of the less sophisticated actions.

So, you know, when these things light up, that's usually who you first see, and those are not necessarily people who are receiving their orders from

the state.

CHATTERLEY: I just feel like we're a little dismissive perhaps of Iranian capabilities here, particularly if we're comparing them to the likes of the

Russians or the Chinese and to the point that you're making here, if you can hire people, and you can go on the dark net and find people, it's

dangerous, perhaps to underestimate their capabilities. Is that a fair assessment or am I being alarmist here?

HULTQUIST: Well, yes, you know, if you're getting your talent from the marketplace, there's a lot of talented people out there that you can use to

sort of improve your capability.

One of the things the Iranians have used to prove their capability, they're actually using open source tools that penetration testers use to test the

networks for security in places like the United States.

Some of these tools are very sophisticated, very capable and they allow the Iranians to make a step up in sophistication when targeting people like us.

CHATTERLEY: How vulnerable is U.S. infrastructure here? Because a lot of the reports that I've read suggests -- and we've seen it in the past with

Iran tackling or targeting a U.S. dam -- how vulnerable are things like power grids and dams in the United States, utility infrastructure?

HULTQUIST: So our infrastructures is pretty resilient. We've got a lot of experience here, especially for instance, with the grid, with weather

incidents, and we've been preparing for these sorts of things for a long time.

I'm not so concerned that they're going to turn off the lights or bring our economy to its knees. We're more likely to see specific attacks against

individual members of the economy, specific companies. They're going to go after the private sector.

And we know that those sorts of state attacks can have strong repercussions for those specific individuals. So right now, an American company is in

court claiming they took $1.3 billion in damages from a state sponsored cyberattack against them in the last couple of years.

CHATTERLEY: Yes, you raise such a great point that it's the corporate sector here that really has to tighten up security in particular. Just to

wrap it up here, though. We are talking more and more about the threat that Iranian hackers pose here. Is Russia, is China, still a far greater and

more sophisticated threat than Iran poses?

HULTQUIST: So Russia, for instance, has developed some really dangerous capability. We do know that they have the ability to manipulate systems.

They have caused a blackout in the past.

They have manipulated safety systems, which are really the last defense and industrial systems to protect lives and keep things from going in really

dangerous places.

They Iranians haven't necessarily shown that capability. But you know, often what they lack in technical capacity they make up for with their

brash nature and some really creative techniques.

CHATTERLEY: John, fantastic to have you with us. Thank you so much for sharing your expertise this morning. John Hultquist there, the Director of

Cyber Espionage Analysis at FireEye.

We're going to take a quick break here now on FIRST MOVE. But up next, digging into President Trump's claims about shale oil and whether it's the

savior of U.S. energy policy. Stay with us.

(COMMERCIAL BREAK)

[09:42:53]

CHATTERLEY: Welcome back to FIRST MOVE. President Trump made a series of pretty bold claims about the state of U.S. oil market during his comments

on the Iranian crisis, Wednesday.

The President said the Shale Revolution has completely transformed the energy picture for the United States. He suggested that supply shocks from

the Middle East are a thing of the past.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Over the last three years, under my leadership, our economy is stronger than ever before and

America has achieved energy independence.

These historic accomplishment shades our strategic priorities. These are accomplishments that nobody thought were possible.

We are now the number one producer of oil and natural gas anywhere in the world. We are independent and we do not need Middle East oil.

(END VIDEO CLIP)

CHATTERLEY: Trump claims aside, U.S. crude prices are still tied to the global oil market as a whole. West Texas crude recently rose to its highest

level since April as Iranian tensions there this week. Never mind the 14 percent rally that we saw in September of last year, of course.

John Defterios joins me from Abu Dhabi. A bold call, John, not entirely correct though, he did say the United States is now the largest oil

producer in the world, which was correct. But hey, it's far more complicated than that. Talk us through it.

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: He sounds like a bully on the block to me intoxicated by the power of oil and gas, Julia, I

think.

Numero uno indeed, the United States with 13 million barrels a day. That's just crude. If you add all the other products that America produces in the

petroleum sector, it's 18 million barrels. So it is a major player.

By the way, it has nothing to do with Donald Trump. This policy goes back well over a decade to the Obama administration, which deregulated the

market to foster that investment.

The U.S. produces 18 million overall, but there's a gap because the U.S. also consumes 20 million. And yes, there's a role for the U.S. producers

and also the Middle East exporters to the United States.

Let's take a look at the graph. A decade ago, they were importing two and a half million barrels a day from the Middle East. That was as high as one

and a half million in 2018, and it's below a million now.

[09:45:02]

DEFTERIOS: So they are growing more independent, I would say, the United States. They're not there yet. Where they're a major player, and all of a

sudden, as a matter of fact, Julia, is in the natural gas market. They're competing head-to-head with Qatar, Russia, Australia, especially in China,

and also within the European Union.

Donald Trump is so aggressive these days, he's even putting sanctions on the companies in Europe that are building the pipeline from Russia to

Germany.

So I say, welcome to the great game of oil and gas; something Donald Trump seems to like.

CHATTERLEY: Yes, I have to say I just have that memory of President Trump pleading with the Saudis back in 2018 to release more reserves after they

increased the sanctions, of course on Iran and the exit of the nuclear program and they knew they needed the Saudis to bring oil prices down.

But, okay, if the President saying, look, we don't need the Middle East and we don't need the Saudis. What does that mean for policing the choke point

that we always come back to when we talk about Iran? The risks surrounding global oil supplies here, the Strait of Hormuz, talk me through that and

the implications there as well?

DEFTERIOS: Yes, the fabled -- yes, indeed. The fabled Strait of Hormuz is only a four-hour drive from us here in Abu Dhabi, Julia, so you've got to

come and visit it the next time you're in town. Incredible place because at its narrowest point, it is 29 nautical miles, so it can get clogged up

rather easily here.

The President doesn't like to hear it. The world consumes 100 million barrels a day. More than a fifth of that comes from here in the Middle

East, and it has the path through the straight.

The top producers Saudi Arabia, UAE, Kuwait, Iraq, that's not going to change, and if Iran didn't have the sanctions on it, it would be exporting

even more.

Now, the U.S. has a big presence here. It has all the military bases. The U.K. and Japan are in the Strait escorting tankers out. But the President

is now calling on NATO to get more involved.

I don't think that's a bad call by the President, but it boils down to, will it diminish the influence of the United States in the region?

Listen to the tone of Donald Trump in the hardline he took against Iran, even though he didn't want to get in a tit-for-tat with Tehran after the

latest strike.

It sounds like he still wants to have a major presence and whether the Iraqis will still want the troops there is a big question mark at this

juncture as well.

CHATTERLEY: Yes, so unfortunately, unfortunately, everyone needs everyone else at this moment and being the largest producer of oil in the world --

DEFTERIOS: Yes, absolutely, Julia.

CHATTERLEY: Yes, means very little in this regard. So someone has been inhaling gas fumes, John, and it wasn't you or I. Thank you so much for

that -- naughty -- John Defterios from Abu Dhabi. Don't say anything.

All right, after the break, fugitive Carlos Ghosn said freedom is sweet. But what kind of freedom is being locked inside Lebanon now? Richard Quest

has done a great interview with him and he is up next. Stay with us.

(COMMERCIAL BREAK)

[09:45:00]

CHATTERLEY: Welcome back to FIRST MOVE and a look at today's Boardroom Brief. Turmoil more continues at Bed, Bath and Beyond. The home goods chain

is abandoning its financial targets after it reported a quarterly loss of $29 million.

Sales for the period slumped more than eight percent. Its new CEO says a turnaround plan is in the works.

The Chief Executive of British Airways parent company, IAG will step down later this year. Willie Walsh helped create the airlines group back in

2011, overseeing the original merger between BA and Spain's Iberia. He will be replaced by Luis Gallego who currently runs Iberia.

Board change at the top, this time at British retailer, John Lewis. The managing director of its department stores is to leave. The exit by Paula

Nickolds come was after John Lewis cut its profit forecast and warned it may be unable to pay staff bonuses for the first time in 67 years.

To Lebanon now, and the country has imposed a travel ban on the fugitive former auto boss, Carlos Ghosn. It follows the request from Interpol and of

course, yesterday's public appearance in Beirut.

Ghosn fled Japan where he was facing charges of financial misconduct and was then smuggled into Beirut, and that is where we find Richard Quest.

Richard, great to have you with us. This actually goes directly to the question that you asked him in that press conference, so the sense that he

has effectively swapped one jail for another, unable to move even though he has made it to Beirut here. What are your thoughts on this?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Well, I think, you know, today, he was called to the state prosecutor's office and he was told that

a travel ban had been imposed upon him from Lebanon, and the reason for that was because of the red notice that Interpol has put out.

Even though he can't be or is not customarily Lebanese, the Lebanon government doesn't extradite their citizens. There is now this red notice

by Interpol requiring national members to arrest and detain those people.

And so they put in place this red notice, and now the government here has said, there is a travel ban. For Carlos Ghosn, of course, as he told me

yesterday that this whole thing meant, basically Lebanon is not a prison for him. It's somewhere he wants to be.

(BEGIN VIDEO CLIP)

CARLOS GHOSN, FORMER NISSAN CEO: I didn't leave Japan to hide somewhere. I left Japan, because I'm looking for justice and I want to clear my name,

which means I'll be looking for a country where I could have this case tried, but with the trial respecting the rights of the defense.

QUEST: One thing seems clear is that you are regarded as a fugitive by others in the world, and that's not going to change, is it?

GHOSN: You know, people don't like fugitive when the fugitive is escaping justice. It is a different opinion when a fugitive is escaping injustice.

You know, I don't think that people look at people who are from North Korea, or from Vietnam, or from Russia under the communist regime, as

people are running from justice.

Well, frankly, I can tell you that in the system in which I've been through, I consider that there was practically zero chance I would get a

fair trial. With zero chance of getting a fair trial, I don't think that is justice and I was not running from justice. I was looking for justice.

QUEST: I know you're not going to give me any details, but can you -- can you say if the rumors and suggestions are substantially true. The rumor and

suggestion I'm talking about involves a train trip to Osaka, a hotel, a box and a flight and of two private jets via Turkey. Is that substantially

accurate?

GHOSN: I would make no comment on this. I'm going to tell you why, Richard, because obviously, I was lucky to have people who supported me in this

because you know, when you are in a situation where you're in trouble with justice, you don't have too much candidate to help you.

I was lucky and I need to as much as possible, protect them.

QUEST: Did you fear it was going to go wrong?

GHOSN: I was anxious, but I was not afraid for a very simple reason. It is frankly, I had nothing to lose in the situation. For me in Japan was so

bad. My perspective was so dark, and the fact that I lost any face of having a fair trial, that this encouraged me to decide to leave Japan.

QUEST: I'm just going to go for this and hope that you'll give me an answer. What was it like in the packing case?

GHOSN: No comment. Look, freedom -- freedom no matter the way it happens is always sweet.

(END VIDEOTAPE)

[09:55:05]

QUEST: Freedom maybe sweet, but his legal problems are far from over, Julia, not only here in Lebanon as you know, under a travel ban, but there

are people making mischief by trying to get him prosecuted because when he was CEO of Renault and Nissan, he visited Israel, which is something

Lebanese citizens are not allowed to do.

He says he did so on one of his other passports. He wasn't a Lebanese citizen as such when he did so, and he went as the CEO of Nissan, but he

apologizes for doing so. His legal problems will be going on for years.

CHATTERLEY: Absolutely. Another battle begins to prove his innocence. Richard, I've got so many questions for you. We should reconvene in a

couple of hours' time on "The Express," but thank you so much for that, and great interview once again.

All right, a quick look, if we've got time -- no, we don't. I have got to wrap it up. That's it for the show. I'm Julia Chatterley. You've been

watching FIRST MOVE, time to go make yours, and market right now are record highs. See you in a couple of hours.

(COMMERCIAL BREAK)

[10:00:00]

END