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FIRST MOVE WITH JULIA CHATTERLEY

The NASDAQ Index Facing a Third Day of Losses; Global Drug Makers Promise to Put Safety Before Speed; "Mulan" Misfire, Disney Facing Criticism Over its Latest Movie Release. Aired 9-10a ET

Aired September 8, 2020 - 09:00   ET

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


[09:00:13]

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.

Tech tumble. The NASDAQ index facing a third day of losses.

Vaccine vow. Global drug makers promise to put safety before speed.

And a "Mulan" misfire. Disney facing criticism over its latest movie release.

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

Welcome once again to FIRST MOVE. Fantastic to have you with us as we turn the calendar and begin the fall season on Wall Street. Let's call it an

early fall, too, for tech, as the recent selling pressure we've seen in these names accelerates.

I'll give you a look. NASDAQ futures off right now by what -- by almost three percent. Wow, that's moving as I speak. We're pretty much at the

session lows. Apple, Amazon, Microsoft, and Tesla all sharply lower premarket.

There's real disappointment, I think, as you can see there for Tesla investors on news it won't be entering the S&P 500 as soon as many had

hoped.

In the meantime, the so-called NASDAQ whale, Softbank belly-flopped again today, falling more than half a percent after Monday's seven percent

plunge. Investors worrying, I think that Softbank's risky bets on tech were a driving force in the summer rally.

The big question is what remains of those bets and what happens if the tech losses that we're seeing in stocks deepen? Either way, the road ahead looks

more challenging from here.

In Washington, Congress back, but there's insufficient urgency on new aid to the unemployed. Political positions remain entrenched and perhaps

reinforced by recent jobs data, Friday's data.

The fact is, better than expected in these numbers can still mean they're dire. The big hope remains a vaccine.

The biggest biopharma CEOs, as I mentioned there, pledging today to put safety first. All of the details next.

Here's a quick look, in the meantime, of Asia, that finished higher, but the economic outlook there also remains pretty cloudy.

Chinese exports, though, a bright spot, up almost 10 percent from last year's levels. Exports meanwhile to the United States actually soared 20

percent. This coming just as President Trump starts discussing a decoupling of the two great nations. He did that yesterday, not what the data

suggests.

As ever, lots to discuss. Let's get to the drivers. Paul La Monica joins us now. Paul, let's talk about stocks first. Are we seeing a healthy, a

seemingly called healthy consolidation here for some of the tech names that have done so well this year, or is that pillar perhaps wobbling a little

bit more firmly than we'd like?

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, that is the big question, Julia. Has this selloff that has taken place in the past couple of days and

looks like it will continue today, is it just a reset because maybe the expectations got a little too high and the valuations way too ebullient?

Or is this a case where we now need to have more than just a correction. Maybe another bear market? I mean, I think a lot of people are stunned by

how rapid the recovery in the stock market has been since that big selloff in March when COVID-19 really became a major story in the United States.

And all of a sudden, investors started to write off concerns about a second wave and what was going to happen to the economy and just got right back

into the stock market, and now we're seeing evidence that maybe that rally in tech stocks was a little bit, you know, artificial. It was inflated by

Masa Son and Softbank, perhaps.

CHATTERLEY: Yes, fascinating, and of course, stimulus. I think we still underestimate the scale of what the Federal Reserve has done here. They're

going to buy more stuff, more assets, including corporate debt of some of the biggest nations in this country.

More this year than they did in the 12 years following the financial crisis. So, I think this is also something that we have to get a grip on.

It also plays into the recovery, Paul. What kind of recovery are we looking at here and should we be talking about more than one recovery?

The rich are doing okay, the poor are getting crushed.

LA MONICA: Yes, I think you, again, you have to separate the recovery that we have seen in the stock market that may be now stalling from the actual

economic recovery and I think when you look at the economy, this does remind me a lot of 2008 and back then, I coined a term called the barbecue

recovery, that it was going to be a low and slow, very gradual simmer back in the economy.

And that's kind of what happened, and I think even though you're seeing, you know, the Atlanta Fed, some estimates that Q3 GDP is going to be, you

know, kind of skyrocketing back, it's still going to take a long time for the real economy to reset and get back to where it was pre-COVID.

And I think a lot of that has to do with many people are out of jobs permanently. Many people are adjusting to the new reality of working from

home, especially parents with kids trying to juggle school and work.

And without a vaccine, I think you're going to have a certain lack of confidence that will persist, and it's going to take some time before we

have anything resembling normal.

CHATTERLEY: Yes, the stop-start recovery, Paul, just adding to the letters, the alphabet soup of potential recoveries, a B and a Q there.

Thank you for that Paul La Monica.

LA MONICA: Thank you.

CHATTERLEY: Great to have you with us.

All right, President Trump blaming Democrats for the stimulus stalemate. In his Labor Day press conference, the President said he doesn't need to meet

with them to simply be turned down.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I have taken the high road. I'm taking the high road by not seeing them. That's the high road.

They don't want to make a deal because they think that if the country does as badly as possible, even though a lot of people are being hurt, that's

good for the Democrats.

But David, that's a bad thing.

(END VIDEO CLIP)

CHATTERLEY: John Harwood is live in Washington. John, I'd argue there's no moral high road here when millions of people are struggling to pay the

bills and feed their families.

But the problem is the data seems to be entrenching the Republicans on their side and the polls, perhaps, the politics here for the Democrats mean

they don't see a reason to negotiate either.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, we haven't so far, Julia, seen the real tough economic impact of the lapsing of fiscal

support. We have seen job growth slow down over the last couple of months. That's an indication of a wobble in that recovery.

The President calls it a Super V, but as Paul was just indicating to you, it's more likely to be a longer, slower, more tepid. But in September and

October, it is possible that we begin to see the pain of the reduction or the elimination of those Federal unemployment benefits, although the

President has taken some limited action to offset that.

And also, the potential for big layoffs in state and local governments, which are -- saw their revenues collapse over the course of the year.

That's the real challenge.

But when that shows up and whether it shows up in enough time for Congress to make a compromise. Of course, the Democrats in May passed a $3 trillion

bill.

Republicans waited. They were thinking that they didn't need to do anything. Then they came up with a bill that was around a trillion, a

little more than a trillion, and the question is, what is the deal space in between there?

Republicans don't want to spend a lot of that money and the question is, when does President Trump feel the economic heat force them to get back and

get closer to the Democratic number? That's when you may get a deal.

CHATTERLEY: Does that happen before the election, John?

HARWOOD: I wouldn't bet on it at this point. We saw comments from Mitch McConnell the other day saying, I'd like to see another bill, but I

wouldn't guarantee one, and that was a sign, to me, I think, that he believe time is running out.

Obviously, shortly, the Congress is going to have to pass a stopgap funding bill to prevent the government from shutting down. I think they will do

that.

But whether or not they can find somewhere in the $1.5 trillion to $2 trillion range, which would be the midpoint between the two parties'

positions is just not clear.

CHATTERLEY: Yes. It means whoever wins the election is going to have a weaker economy to try and pick up the pieces from. John Harwood, thank you

so much for that.

Safety over speed. Nine vaccine developers are making an unusual pledge to uphold what they call high ethical standards when it comes to producing a

COVID-19 vaccine.

Let's get to our senior medical correspondent, Elizabeth Cohen, who has all the details on this. This is basically some of the biggest pharma CEOs in

the world saying we're not going to allow the pressure or the politicization here of regulators because we are not going to ask for

approval until we've got the assurance on the safety and efficacy of these vaccines. Is that right?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Julia, that's right, and actually, it's pretty sad that they feel the need to make this

declaration. It's kind of like farmers pledging not to sell sour milk.

Well, I just sort of assumed that farmers would not sell sour milk. I think we should assume that vaccine makers would not apply to get permission to

market a vaccine that has not been shown to be safe and effective.

So, it is sort of a comment on sort of sorry state of things when they feel compelled to make this pledge. But the reason they do, or one of the

reasons they do, is that at least in the United States, the public is just not so enthusiastic about this vaccine.

There's a lot of hesitation, and these vaccine makers want to sort of buildup confidence in their products.

[09:10:07]

CHATTERLEY: I mean, that's part of it too, and it feeds into the timing here. We're all desperate for a vaccine, but we have to get the Phase 3

trials, the comprehensive trials, done, and we know that simply getting a broad spectrum of people to enroll in these trials has been a real

challenge. And now there's ads focusing on trying to get the minorities on board. Talk us through what we're seeing.

COHEN: That's right. So, these are ads that are going to start running today in the United States on major networks, as well as networks that are

focused on the black and Latino communities, and so what they're trying to do is trying to encourage black people and Latino people to enroll in these

clinical trials.

It's been a real problem. The numbers have not been nearly high enough and they want to encourage more enrollment, because one, you need to test

vaccines out on a diverse group so you can see how different groups respond to it.

But also, Julia, on a more practical level, in order for vaccine trials to work, you have to test the vaccines out in people who are at a high risk

for getting -- for coming into contact with COVID-19, and unfortunately, in the U.S., minorities are more than twice as likely to come in contact with

COVID-19 than white people.

So, let's take a look at what the trials are supposed to be doing and what actually is happening. Dr. Anthony Fauci, the top infectious disease doctor

in the U.S., he wants 64 percent of the trials to be from minorities, whereas when you look at Moderna, it's only 26 percent; Pfizer, it's only

19 percent. So, it's not nearly as high.

Now, Dr. Fauci's number is high. It's really kind of aspirational, but you can see they're not even anywhere close.

CHATTERLEY: Yes, I mean, that's a huge gap. Let's hope some of these advertising campaigns work.

Elizabeth, thank you so much for your wisdom as always. Elizabeth Cohen there.

As we were mentioning there, Pfizer, partnering on their vaccine research with a firm called BioNTech, who seem pretty confident that their vaccine

could be ready for approval as early as the middle of October.

Fred Pleitgen joins us live now from Berlin and he's been speaking to the company's CEO and lead scientist.

Fred, great to have you with us. There's a huge difference between getting approval and distributing that vaccine, but these guys seem pretty

confident.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, well, they certainly do, and they do say that they think they could do this or could

get ready for approval by the middle of October, but they also say that there are some unknowns and interestingly, it ties into exactly what

Elizabeth was just saying that obviously right now they are on these very large Phase 3 trials where a lot of people are trying this out -- trying

out the vaccine candidate.

But of course, a lot of people need to be exposed to the coronavirus, and they say they're still collating that data right now and only the moment

they have enough people who have been exposed to it and where the virus has been fought off by their vaccine candidate, only then are they going to be

able to submit it for approval.

Now, they say, obviously, they're not going to cut any corners in doing that, and so they say they are aiming right now for the middle of October

to put it up for emergency approval. It could possibly be the end of October or the beginning of November, but they have big confidence in their

vaccine candidate. Here's what the CEO told me.

(BEGIN VIDEO CLIP)

UGUR SAHIN, CEO, BIONTECH: It has an excellent profile, and I consider this vaccine as a vaccine which is near perfect, which has a near perfect

profile. We have done preclinical experiments. We have shown that this vaccine is able to protect animals from infection in really tough challenge

experiments, and they have, of course, done much more, more testing than we have published so far, and this provides us a lot of confidence in

combination with the understanding of the mode of action, in combination with the safety data coming in from the running trial.

Yes, we believe that we have a safe product and we believe that it will be able to show efficacy.

(END VIDEO CLIP)

PLEITGEN: So, you see there, Ugur Sahin, the CEO of BioNTech, a lot of confidence there in the BNT-162 vaccine candidate that they're working on

right now and they say or he says if everything goes according to their plan, they aim to be able to produce about 100 million doses of BNT-162

this year, which first and foremost, of course, would go to these high-risk groups like, for instance, medical professionals -- Julia.

CHATTERLEY: Yes, and very quickly, Fred, how long until it's widely available?

PLEITGEN: Well, that's the other thing. Obviously, 100 million doses sounds like a lot, but if you look at the world's population, it obviously

isn't that much. So, at first, it would be as we said, medical professionals, perhaps elderly people, as well as high-risk groups.

They say in 2021, they aim to make about 1.3 billion doses and obviously, that's where you're running into some very, very large numbers where this

vaccine, then, beginning of next year to the middle of next year, would become or will become widely available to folks in many countries.

CHATTERLEY: Fingers crossed. Fred, great work. Thank you so much for that.

All right. One of the other stories making headlines around the world. Nearly two dozen wildfires are burning across California as we speak. High

winds forecast in the coming hours are expected to fuel those flames.

[09:15:07]

CHATTERLEY: The most aggressive of those, the Creek Fire remains uncontained. So far, more than 800,000 hectares have been scorched. A

Forestry official calling it an unprecedented disaster. Our hearts go out to all those involved.

There's more FIRST MOVE after this. Stay with us.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE where we are bracing for fresh trouble in tech land this morning. NASDAQ futures now off by over three

percent after a more than six percent drop between Thursday and Friday last week.

Market watchers, many of them, at least insisting that as painful as this selloff is, it is nothing more than a healthy consolidation of some of the

recent gains.

The pain, of course, mostly have been focused so far on the handful of NASDAQ stocks that have outperformed the market since the spring.

One stock, though, bucking the downward trend today, electric truck startup, Nikola. It is soaring almost 30 percent premarket on word that GM

is taking an 11 percent stake and partnering on future production.

All right, the nervousness though spreading elsewhere. Take a look at what we're seeing for the oil markets and for the bond markets too. We've got

sizable losses filtering in for Brent and WTI there and a bit of fright to safety here in some of the U.S. Treasuries, the ten-year and the 30-year

there. You can see the yields coming down as those prices rise, as investors look for safer assets.

Ruchir Sharma is Head of Emerging Markets and Chief Global Strategist at Morgan Stanley Investment Management. He is also the author of "The Ten

Rules behind Successful Nations," and he joins us now from New Delhi.

Ruchir, fantastic to have you on the show as always. What do you make of what we're seeing here in tech, but more specifically across risk assets?

RUCHIR SHARMA, HEAD OF EMERGING MARKETS AND CHIEF GLOBAL STRATEGIST, MORGAN STANLEY INVESTMENT MANAGEMENT: Well, I think that, you know, we have had

this major blow-off in risk assets, as you know, over the last few months, so the fact that we get this sort of period of indigestion is not very

surprising.

For me, the really big rotation will come when we start to see some rise in interest rates. I think that if we begin to see the elongating of the curve

begin to rise, then interest rates begin to rise. That's when I think we will have a big problem because the single most important driver of risk

assets, of these growth and momentum stocks, has been low interest rates.'

Now, interest rates have stopped falling, so therefore, I think they've got the spirit of indigestion, but to really sort of feel a major change in the

market structure, once you begin to get a rise in interest rates, I think that we could see something much more severe than what we're seeing now.

CHATTERLEY: Ruchir, when might that come, just given the sheer scale of the buying that the Federal Reserve is doing this year? They seemingly have

zero intention of raising rates, so we're talking, then, about the sort of front end of the interest rate curve. It could take years before that kind

of threat materializes, surely.

SHARMA: Well, I think there are two sort of points here. One, I think that as when get more information that we have the vaccine, which is going to

lead to sort of mass immunization and herd immunity eventually, I think once we get signs of that and it could -- we have no idea when exactly it

will be, but it could be in the next month or two, I think that could be the first sign that at least long-term interest rates begin to rise from

the very depressed levels they are now.

The second big call, and this, I think, is a much longer discussion, is that I think that inflation comes back more quickly than what the market or

people in general are expecting.

For four decades, betting against or betting in favor of rising inflation has been a losing bet, as you know.

But finally, I think that we will begin to see inflation, given the sheer volume of monetary and fiscal support we're seeing at this time and also

some of the very long-term trends that have kept inflation in check such as globalization are now reversing.

So I think it's a two-step process. Once we seek information on a vaccine, I think the very depressed level of long-term interest rates will snap back

up and that causes, some problem I think for growth and momentum stocks.

And the real churn in the market structure away from this very concentrated rally in growth and momentum and more towards value kind of stocks that

happens once interest rates begin to rise because of high inflation.

And I suspect it is going to happen more quickly than we think, so possibly even as early as next year. So, we could see the reverse of what we're

seeing.

This year, people have been confounded that we have seen such high stock prices even though the economies have been very weak because of the

pandemic and that's really happened because interest rates are very low and liquidity is abundant.

I suspect that next year, we could see the opposite. That the economies come sharply back as the vaccine and the pandemic is behind us, but stocks

struggle just because of the incredible support they have gone from liquidity and interest rates and that support goes away next year.

CHATTERLEY: So, there's still some time between where we are today and, to your point, next year, perhaps, where we see that more dramatic rotation

out of these growth stocks. Is what we see today in terms of pullbacks, then, a buying opportunity?

SHARMA: I think it's very difficult to buy these stocks, especially some of the bigger cap tech stocks just because of the incredible run they have

had. You know, this running momentum in growth stocks, the only parallel we have to this is 1999.

Yes, it is very difficult to know whether we are already in December of '99 or this is still June of '99. That maybe could be the play. That's a very,

very hard game for us to sort of call.

But I don't think that piling on to these stocks at this level is a worthwhile bet. What I think is, yes, there are still opportunities in the

growth universe, you know, I've written extensively about some of the gaming companies and also some of the other tech companies on that space.

But I think, if you had to really start planning for the next three to five years, buying some of the commodity stocks -- and I've been so bearish on

commodities for so long, but for the first time I feel that buying some of the commodity stocks on that end of the barbell, I think is more attractive

at this stage rather than piling on to these very expensively valued stocks that have had a blow-off and they may still have another three months of

spectacular gains to go, but this is very late to be piling on to that corner of the market.

CHATTERLEY: Oh, there's so many questions I could ask you here and I have to be careful about timing.

Gold, then, not a traditional commodity, clearly, but clearly, at the same time, people are investing in gold for many of the things that you have

discussed, whether it's concern about lack of control over monetary policy and the implications.

We've also seen a lot of, particularly Americans, buying into digital assets, cryptocurrencies. What do you make of these two things, Ruchir?

[09:2:09]

SHARMA: It's a generational thing. I think some of the older lots are still buying gold and some of the younger ones are -- the millennials are

buying more of the Bitcoins and the cryptocurrencies as you put it.

But generally, I think, what that's telling you is that there is this lingering feeling out there that given what Central Banks are doing in

terms of printing so much money, there is a search for alternative assets, so I think that these assets could keep doing well.

Gold in particular does very well when interest rates adjusted for inflation are negative. And I see that environment carrying on for a while

because even when inflation comes back, the Central Banks are going to be much, much behind the curve before they do anything about it.

So, yes, gold is a very speculative asset. In the long-term, stocks do much better than gold. In fact, I wrote a recent "New York Times" article about

that, arguing that in the last hundred years, the return on stocks in inflation adjusted terms had been seven percent a year, U.S. stocks that

is, and gold has just given one percent or so a year.

But I still feel in the next three to five years, gold is relatively okay because there is this feeling out there that the Central Banks are printing

so much money and we want some safety out there.

So yes, to have over five percent or so of your portfolio in gold is not a bad idea and if you're a bit more adventurous and I guess, this is more

about demographics, then obviously, the search for Bitcoin and other cryptocurrencies.

CHATTERLEY: You know, and the other thing, which is there, what's going on in gaming stocks. And I've run out of time, but I am going to get you back

because you do have some really pointed, punchy comments to make on this and it ties to some of the big questions about the Big Tech companies and

whether they're in trouble with regulators going forward.

We shall reconvene, my friend. Great to have you on, as always. Ruchir Sharma of Morgan Stanley.

SHARMA: Thanks, Julia. Always a pleasure.

CHATTERLEY: Likewise. The opening bell is next. Stay with us.

(COMMERCIAL BREAK)

[09:30:03]

CHATTERLEY: Welcome back to FIRST MOVE where U.S. stocks are up and running after the long holiday weekend and there's no post Labor Day leap

on Wall Street. You are looking at pressure here.

Tech stocks, tumbling, and testing the 10 percent correction levels once again, so that's a 10 percent pullback from recent highs. Volatility also

on the rise. The VIX Volatility Index is up more than 14 percent now to its highest levels since mid-June, often called the fear gauge.

It's also the price of options, the price of derivatives here, so you have to be careful with how you describe this at the moment given the NASDAQ

whale talks.

Now, the suddenness of the NASDAQ's fall is what matters here, too, having closed at record highs just last Wednesday. The selloff, however, still

making only a minor dent in the NASDAQ's more than 20 percent rally so far this year.

That chart for context is what matters. Tesla shares, meanwhile, also suffering on word late Friday that they won't be entering the S&P 500 any

time soon. Investors, of course, have been buying into the stock in anticipation that it might make it in and that would then fuel more buying.

So some disappointing news there for Tesla fans.

Disney, meanwhile, facing growing calls for a "Mulan" boycott. The newly released film is stirring controversy again after the end credits revealed

it was partially filmed in Xinjiang, where China has been accused of mass human rights violations.

Selina Wang joins us now from Hong Kong. Selina, it was already under some pressure after comments from the lead actress regarding the crackdown in

Hong Kong and the pro-democracy protests there. Now, they've got more trouble. Talk us through this.

SELINA WANG, CNN CORRESPONDENT: Yet again, and right after its release on Disney Plus, it is facing renewed calls for a boycott. This backlash is

tied to the end credits of the film that thanked several Chinese government entities in the western region of Xinjiang. This is where the U.S. has

accused China for detaining up to two million Uyghurs and other ethnic minorities.

China has repeatedly denied those claims, and on Tuesday, the Foreign Ministry said that they are vocational training centers and they are part

of China's counterterrorism efforts. Now, I did speak to an expert at the Asia Society who said the following to me. It is, quote: " ... deeply

disturbing that Disney thought it was okay to partner with and also thank government departments from a region in China that is complicit with

genocide."

Now, as you referred to earlier, these are not new calls for boycotts. Last year, the lead actress, Liu Yifei had made some comments supporting the

Hong Kong Police during the protests, which led to massive backlash online and from activists.

Now, China is critical, not only to Disney but also to "Mulan." It's an extremely lucrative market for Hollywood, but it also comes with some

compromises including studios having to censor their content, but it was predicted prior to COVID by PwC that China would overtake the U.S. this

year to become the world's largest film market.

When I speak to experts, some of them say that we are coming up against a time where American film studios may need to choose between either

servicing the U.S. or the Chinese market, because it's harder to appease both.

CHATTERLEY: Yes, you simply can't please both sides here. I guess I will make the point that the film's director, Niki Caro was showing pictures on

social media back in 2017 when they were scouting locations and if you think when this was filmed, it was a lot earlier than what we're seeing

today and these subjects of the Uyghur Muslims wasn't so front and center.

I'm not excusing them, but I guess we'll have to make a timing point here. What about people downloading this movie, Selina? What are we seeing? Is

this having any kind of suppressive effect?

WANG: Julia, that is right, but there was evidence when they were scouting these locations that this mass internment was allegedly happening.

And you're right, the production team have also given some interviews where they have mentioned they spent months scouting potential locations. But

there is a little bit of bright news when it comes to those downloads. "Mulan" took this very controversial decision to delay the theatrical

release and go straight to streaming on Disney Plus.

According to research from Sensor Tower, the app downloads from September 4th to the 6th jumped 68 percent from a weekend prior, and if we take a

look at the consumption, consumer spending in the app, that also spiked nearly 200 percent and that can be attributed to customers paying that

$30.00 fee to watch "Mulan."

Now, the pandemic has prompted these Hollywood studios to look at different types of unconventional release strategy and while this preliminary data

looks promising, it is still early to say just how successful this strategy is going to be.

CHATTERLEY: Yes. No judgment yet, but plenty of judgment on the location of this movie. Selina, great to have you with us. Selina Wang reporting

there.

[09:35:13]

CHATTERLEY: All right, the U.S. travel industry heavyweights have banded together to reboot tourism and inspire Americans.

Today, they launched a campaign called "Let's Go There," urging us to get on with planning a future trip, even if we don't know when we'll actually

be able to do it.

Joining us now is Roger Dow, President and CEO of the U.S. Travel Association. Roger, great to have you with us. I know this is a culmination

of months of work for the travel industry to really understand what the message should be.

It's a case of balancing safety with survival, really, for the industry. Talk us through it.

ROGER DOW, PRESIDENT AND CEO, U.S. TRAVEL ASSOCIATION: Well, exactly, Julia. The first thing we had to do as an industry is make sure that health

and safety is there.

So everyone in the industry got together and put out guidance for everything they are doing and right now, being on an airplane is probably

safer than being anywhere else. Obviously, more than the grocery store even.

But once we had that in place, then we had to talk about getting people to plan and think about traveling. We've done a lot of research that shows

when people even think about and plan the trip, 97 percent are happier.

We had to make sure we had the right message. We didn't want to be tone deaf so we had to make sure our message is, when it's time for you, we'll

be ready and the whole industry is getting behind this.

CHATTERLEY: I think also Roger, we have to understand the importance of this as a sector for the U.S. economy. It represents one in 10 American

jobs, I believe 35 percent of those have been lost.

Do you have any sense from those that you speak to in the industry how many of those losses could become permanent job losses?

DOW: It's very concerning, because as you said, the travel industry represents one in 10 jobs, which is 16 million jobs, eight million have

been out of work. I think it's going to come back slowly. Hopefully we'll get at least half of them back by the end of the year.

But until travel comes back, the economy will not come back. Everything in the economy is tied to someone going somewhere, either leisure, business,

or a meeting.

CHATTERLEY: And I think a lot of people will be watching this and going, we understand the importance, we understand the importance to the economy

of jobs, but what about for consumers here? We don't really have an industry norm.

If you book a trip at this stage and then you feel happy about it, you've also got the uncertainty of perhaps having to cancel it in future, will I

get my money back? What about insurance? How are you handling that aspect, Roger?

DOW: I think that's very important. I think the U.S. airlines all made a very smart and bold move last week or two when they said they will not

charge change fees anymore. The cruise industry is allowing great flexibility, so therefore, they're seeing bookings for 2021 going way up,

and that's very important.

We can't be tone deaf. We've got to be consumer smart and the consumer has to know, I can book a trip, and if things change, through COVID or my

situation, I can change my trip.

CHATTERLEY: Yes, they do. You have to be flexible. Everybody has to be flexible here or this campaign, as positive as perhaps it can be, it simply

doesn't work. Roger, I mentioned that this is about Americans traveling domestically. How important was the international tourism and travelers

coming to the United States providing the revenues to all of these companies, too? Because that's something that's deeply challenged and will

remain so, perhaps, until we get a vaccine.

DOW: You're absolutely right, Julia. International travel is a huge export for us. When someone buys a trip, it's just like them buying a U.S.

computer. It's $250 billion a year and that's basically ground down to zero.

World Travel and Tourism Council says the U.S. will lose upwards of $200 billion this year, and the reason we like international travel so much is

the international visitor stays longer. They stay 16 nights. They spend more. They spend an average of $4,500.00 per person. The Chinese spend

almost $7,000.00 per person.

And it's also great for global understanding. When you travel somewhere, I don't care where it is around the world, you realize people are just like

each other anywhere in the world. They care about their family. They care about their children doing better, and they care about seeing new things.

CHATTERLEY: That's such a great point. Cultural, better cultural understanding is fostered by international travel, and we lack that right

now.

DOW: Certainly do.

CHATTERLEY: Roger, this is clearly a competitive industry. It's always been a competitive industry, and you're pulling together some of the

biggest names that are saying, look, we want to work together here to foster greater travel and to encourage people to book trips.

Once we get through this, does that level of competition return?

DOW: Absolutely. Right now, the industry is coming together. All the major airlines, American, Delta, and United are on there. The hotel companies,

Marriott, Hyatt, Hilton, Lowes, American Express, Visa, Chase, even Pepsi- Cola and suppliers, visit California.

They're all in this together because once people get traveling again, then they can worry about what airline they fly on, where they go and how they

pay for it and where they stay.

[09:40:16]

CHATTERLEY: So, if you're trying to encourage people to feel happier and to book trips as a result of this ad campaign, what kind of bargains can

they find? How much cheaper are hotel stays, travel in the United States as a result of what we've been through?

DOW: Right now, there's some great value out there. Both on airlines, hotels, cruise lines, great bargains. They're not going to last long. But

on the other side, I'm noticing that, like, beach locations are very popular, are still high price because everyone wants to go to the beaches

and the outdoors.

So, my advice to people is, book that trip now. Think about it. You can always change it. But the bottom line, grab those bargains while they're

out there.

CHATTERLEY: We'll see, Roger. Are people actually booking cruises?

DOW: Yes. People are booking cruises for 2021 in great numbers. There's a very loyal group of people who go on cruises, and they understand the

cruise ships are as clean and hygiene-specific as they can be.

Cruise lines have been through many times of things from Legionnaire's disease and things like that and they know what they're doing and they are

going to be even better, and the people who are cruisers are saying, I know they're going to have their act together.

CHATTERLEY: Oh, I think there's plenty of people after what we went through in the early stages of the pandemic that will be skeptical, but the

hope is that we've learned lessons.

Roger Dow, fantastic to have you with us. President and CEO of the U.S. Travel Association.

DOW: Always a pleasure.

CHATTERLEY: Sir, thank you.

All right, after 15 years at the helm of British Airways and IAG, it is Willie Walsh's final day on the job. He will be succeeded by Iberia's

current CEO and Richard Quest, diplomatically suggested to Walsh that he perhaps wasn't the most popular leader the firm's ever had. Listen in.

(BEGIN VIDEO CLIP)

WILLIE WALSH, OUTGOING CEO, IAG: But you don't do this job to be popular, you know? And I've always been clear on that. You know, I've realized very

early on in my career that if you were to run your business to satisfy the press or to be popular with people, you would go out of business because

it's a -- the airline industry is brutally competitive, and to succeed, you have to be prepared to take decisions that are unpopular.

And I think that's what leadership is about, you know? Good leaders will face up to difficult challenges. I've known lots of people who, when it

comes to the crunch, don't like to give bad news and don't like to face difficult decisions.

I've never had a problem with that, and that may come from my training as a pilot, you know, where you don't have the opportunity to put everything on

hold and wait for people to decide what to do. You have to, as a pilot, and particularly as a captain, you have to be ready to make decisions.

And you know, to assess everything quickly, make decisions in the interest of safety and move on.

So, you know, I've never sought to be popular, and you know, I'm popular with my friends, but you know, I probably have fewer than most people.

(END VIDEO CLIP)

CHATTERLEY: Stay with CNN for more of Richard Quest's interview with IAG boss, Willie Walsh. That's coming up on "Quest Means Business" at 3:00 p.m.

Eastern on CNN.

All right, we're going to take a break, but tough talk from Germany over the poisoning of Russian opposition leader, Alexei Navalny. If Russia

doesn't investigate, German officials say work on the Nord Stream gas pipeline may come to a halt. Really? Details after the break.

(COMMERCIAL BREAK)

[09:46:51]

CHATTERLEY: Welcome back to FIRST MOVE. Germany increasing pressure on Russia to investigate the poisoning of the opposition politician, Alexei

Navalny. German officials say a pipeline delivering Russian gas to Germany could be halted if Russia doesn't provide answers.'

The project has been under construction since 2018 and would be very lucrative for Russia, not to mention the German companies have invested in

it, too. CNN's John Defterios joins us from Abu Dhabi with more.

John, what do we make of this? I can't help but feel Angela Merkel, Germany as a nation, too invested this this. It was supposed to be delivering gas

as of early next year. Credible threat?

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: You know, I'm not sure, Julia, to be honest with you. I see Germany as toughening its stance,

right? But whether that translates into a cancellation of the pipeline, I think, is a big stretch.

If you listen to the language carefully, they're talking about, perhaps, suspending the pipeline right now or freezing operations. Even the Economy

Minister today on German radio, Peter Altmaier, was not even supporting sanctions. So this has a long ways to go.

But one consultant who does energy contracts told me, look, don't bet against politics because things can shift. In this case, we have to follow

the project and the money, right? It's better than 90 percent complete, $11 billion on the table. It is being blocked by U.S. sanctions, ironically,

that is why they're not seeing gas flowing until 2021.

But if you look at the five energy companies that are invested in the project, two are German and the others are French, Austrian, and British.

So, do they really want to cut out their partners here for the sake of Alexei Navalny. It sounds cynical, but that's the case.

Then enter Donald Trump into the equation, Julia. He is playing the security card, if you will, NATO, and saying that Russia has way too much

influence over the European Union and Germany. Let's take a listen to him.

(BEGIN VIDEO CLIP)

TRUMP: When I came along, I said, wait a minute, we're protecting Germany from Russia, right? NATO. We're protecting Germany from Russia. Germany is

paying Russia billions and billions of dollars to get their energy, and the real number is probably 60 percent to 70 percent, ultimately, of their

energy is going to come from Russia.

(END VIDEO CLIP)

DEFTERIOS: So, Donald Trump throws out a lot of numbers, as you know, Julia. This time, they're pretty accurate, 30 percent to 40 percent now,

although there's no official figures published anymore because of the sensitivities rising to 60 percent to 70 percent.

What he did leave out here is the primary motivation of the United States, and that is to export U.S. LNG to Europe, coming out of the Gulf of Mexico

around Corpus Christi and the Sabine Pass. They have spent billions of dollars building and he is looking for new markets.

Now, to prevent that penetration by the U.S., gas prong has been cutting prices since 2018 and 2019 to hold on to its market share because Europe is

its biggest market, despite the inroads it's made into China.

CHATTERLEY: Yes, and of course this pipeline also split opinions in the E.U., too, with nations like Poland saying, why on Earth are we increasing

our energy reliance on Russia at a terribly difficult moment?

But there's more than one pipeline, John, and I need you to explain this. We're talking about Nord Stream 2. What about Nord Stream 1? Because this

is what? Ten to fifteen years of history we're talking about between Russia and Germany.

[09:50:15]

DEFTERIOS: Yes, great question you're bringing up because it does stretch back to 2005. So, mark that as your suggestion here, 15 years, signed by

the predecessor of Angela Merkel, Gerhard Schroder. He's on the Board of Nord Stream. He runs the supervisory board committee as well for

shareholders, Julia.

This is very tightly knit. Even though Angela Merkel has had strained relations with Vladimir Putin, 2015, chaired a panel with them in St.

Petersburg in Russia despite those tensions, despite the sanctions by Germany, they still signed Nord Stream 2 at the same time. That's

geopolitics.

CHATTERLEY: Yes. Contentious as it may be. John, very quickly, what do you think we're seeing in oil?

DEFTERIOS: We're seeing prices down, Julia, looking now with 6.25 percent, 7.5 percent on WTI. It's not complicated. This is the second wave biting

into demand, the fears of it. Already over the weekend, we saw Saudi Aramco cut prices. I have seen in the last hour that Abu Dhabi, ADNOC, the state

operator is doing the same. There's real concerns again that the downturn in oil demand is going to continue well through 2021.

CHATTERLEY: Yes, that's the message from the markets today. Always simple when you explain it, John. Thank you. John Defterios in Abu Dhabi for us

there. Thank you.

All right. After the break, a healthy pullback or a sign of more trouble to come? The latest on the tech turbulence coming up. Stay with us.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE. What a difference a few days can make, at least on Wall Street. The NASDAQ was sitting at record highs less

than a week ago. Today, it's down more than three percent and nearing 10 percent correction levels.

Paul La Monica is back with us. Paul, yes, that's happened very swiftly, but then if I show the chart, year-to-date, context is everything in the

grand scheme of things. This index has had a bumpy year.

LA MONICA: Yes, without question. I mean, Julia, we have had the NASDAQ plunge along with the rest of the market in March when coronavirus really

became reality in the United States, but then we had this rapid recovery.

You mentioned earlier on the show that the Federal Reserve has come to the rescue many times and I think that coupled with some of the stimulus that

we got from Congress and the White House obviously helped restore some confidence in the U.S. economy as well.

And tech stocks, earnings had been fantastic for the likes of Apple, Amazon, the FAANG companies plus Microsoft and Tesla, and I think that is a

reason why techs rallied to the extent they did, but now, you have worries that they went too far too fast, and Masa Son at Softbank is perhaps

getting burned and that is a big problem, I think, for the broader market right now.

[09:55:06]

CHATTERLEY: Yes, it's a reality check or an unreality check. Before the stock split and I think the reactions to Tesla and Apple there which is

completely bonkers, Apple was worth the entire market cap of the Russell 2000. We had Tesla worth the equivalent of Ford, GM, BMW, Volkswagen, Fiat-

Chrysler, Toyota, and Honda, and sells less than 10 percent of the cars. Really?

LA MONICA: Yes, clearly, the valuations were stretched -- very, very stretched, and I think you can make the reasonable argument that this isn't

2000 all over again because the companies that have led the way up are healthy companies with strong balance sheets for the most part.

But that still doesn't mean that valuations can't become exorbitant and irrational, which they were.

CHATTERLEY: Yes. I also think that the Fed's move here means that no company is too big to fail here. Every company is too big to fail.

Everything will be supported. The question is, can we do the same for consumers?

Back to our earlier point. Paul, always great to chat to you, thank you so much for that.

LA MONICA: Thank you.

CHATTERLEY: That's it for the show. You've been watching FIRST MOVE. Stay safe, and we'll see you tomorrow.

(COMMERCIAL BREAK)

[10:00:00]

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