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Early Start with John Berman and Zoraida Sambolin

Blinken Meets With Lavrov Amid Heightened U.S.-Russia Tensions; Russian Forces Blow Up Key Supply Bridge To Bakhmut; Biden's New Cyber Strategy Puts Burden On Big Tech. Aired 5:30-6a ET

Aired March 03, 2023 - 05:30   ET

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

[05:30:00]

(BEGIN VIDEO CLIP)

SERGEY LAVROV, RUSSIAN FOREIGN MINISTER: It's a shame.

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VEDIKA SUD, CNN REPORTER: But on Friday morning, local time here in Delhi, Anthony Blinken went on to say that the talk and the focus is on Ukraine because that's the message to would-be aggressors everywhere.

There is no doubt that this face-off between Russia and the U.S. here in India has cast a shadow on G20 talks. And if this is any indication to go by Christine, we know what is really going to happen during the G20 summit in September. The divide over Ukraine is only getting wider by the day -- Christine.

CHRISTINE ROMANS, CNN ANCHOR: Absolutely. All right, Vedika Sud for us in India. Thank you so much.

Russian forces blowing up a vital supply bridge to Bakhmut overnight as fighting intensifies in that region. Ukrainian officials say a mandatory evacuation order is now in place. About 5,000 people, including dozens of children, remain there.

CNN's Alex Marquardt has more from eastern Ukraine for us.

(BEGIN VIDEOTAPE)

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT (voice- over): In the fierce defense of Bakhmut the neighboring town of Chasiv Yar has become a busy thoroughfare. The main supply route for Ukrainian troops desperately hanging on to the eastern city.

MARQUARDT (on camera): Cars, military vehicles bombing up and down this road going to and from the front. You see this armored vehicle right here. The V sign for victory. We are so close to the front that, as one resident who is still here said, you could walk to the Russian positions.

MARQUARDT (voice-over): In the town center we meet an artillery unit. They've been fighting for two months. Loud booms echoing every few seconds from their Ukrainian colleagues firing on Russian positions.

HOTTABICH, UKRAINIAN ARMY ARTILLERY UNIT: (Speaking foreign language).

MARQUARDT (voice-over): "The problem is not just Russia taking Bakhmut," Hottabich says, "They will not stop and will keep destroying the next cities. We need to wait for reinforcements to come and then kick them out."

Whether Ukrainian reinforcements are indeed coming to save Bakhmut remains to be seen but so far, there is no Ukrainian retreat. Ukraine's military admits they're being battered by Wagner mercenaries that have made gains as they press ahead in and around the city. Ferocious street-to-street fighting has left many dead on both sides as the Wagner troops, along with Russian soldiers, try to encircle Bakhmut.

Chasiv Yar has been regularly hit in recent days as well. Now, fresh trenches are being dug -- fighting positions that Ukraine may soon have to use.

Amid all the blasts some pile into a van to evacuate while others who feel they can't or simply won't leave gather in the center waiting at a bus stop for a water delivery which never comes.

VALENTINA, RESIDENT, CHASIV YAR: (Speaking foreign language).

MARQUARDT (voice-over): "Rockets are flying overhead from both sides," Valentina quietly tells us. "Everywhere is covered with Grad rockets. The house we wanted to move into got bomb."

They walk away with piles of white tarp to protect their homes. They know the war is getting closer but right now it's anyone's guess who will prevail in Bakhmut.

MYKOLA, UKRAINIAN ARMY ARTILLERY UNIT: (Speaking foreign language).

MARQUARDT (voice-over): "Nobody knows that" Mykola says. "We will stand our ground. Defend every meter of our land."

Alex Marquardt, CNN, Chasiv Yar in eastern Ukraine.

(END VIDEOTAPE)

ROMANS: All right, Alex. Thanks for that.

Quick hits around the globe right now.

Angry protesters clashing with police in Greece over rail safety after 57 people died in one of the country's worst train crashes. Another 48 people are injured. And the rail union plans to strike.

A raging fire engulfing a skyscraper being built in Hong Kong's shopping district showering people below with debris and sparks Thursday night. Officials say at least two people were hurt. The U.N. tapping Cindy McCain to lead its World Food Programme. McCain is a diplomat and businesswoman, and widow of Sen. John McCain. She takes over in April when the current director's term ends.

All right, a crucial new phase in the clean-up of a toxic train wreck in Ohio could begin in just minutes. And next, how Joe Biden's new cyber strategy puts the burden on big tech.

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[05:38:41]

ROMANS: Here is today's fast-forward lookahead.

A judge will sentence Alex Murdaugh for the murders of his wife and son at 9:30 eastern. Prosecutors want to see him get life in prison without the possibility of parole.

A new phase of the clean-up begins next hour at the site of last month's toxic train disaster in East Palestine, Ohio. Rails will be torn up and contaminated soil removed in a process expected to take up to two months.

President Biden meeting with German Chancellor Olaf Scholz at the White House today. They will discuss the war in Ukraine and potential sanctions if China provides Russia with weapons.

The White House releasing a new national cybersecurity strategy calling for companies to raise their cyber defenses. The Biden administration believes there needs to be better infrastructure to protect the nation from cyber criminals and foreign governments like Russia and China.

Let's bring in Zhanna Malekos Smith, a cyber law and policy fellow of the Army Cyber Institute at West Point. Nice to see you again.

Walk us through this. This new strategy is really a five-pillar plan. How will it influence -- or how does it aim to influence what companies do about cyber security?

ZHANNA MALEKOS SMITH, CYBER LAW AND POLICY FELLOW OF THE ARMY CYBER INSTITUTE AT WEST POINT (via Webex by Cisco): Wonderful to see you as well. Thank you.

A major theme that jumped out to me is that it echoes the theme of no state is an island in cyberspace. Collaboration is paramount. It's at the core of the new national cybersecurity strategy to guide the federal government's approach to I.T. modernization and building cybersecurity resiliency not at the back end but integrated at each phase of development. We're constantly iterating and improving upon our design to build a more perfect system.

[05:40:22]

The new strategy continues the momentum of the 2018 strategy but it departs in two key areas. One, substance in specifically calling out malicious cyber actors in this domain -- notably, China, Russia, Iran, and North Korea -- listing their recent activities here.

And also in terms of design logic, you mentioned the five pillars of this strategy. What's unique about the new strategy is that it has an implementation section as well. The previous strategy did not have that.

ROMANS: We do know that some industries -- and I'm thinking of banking, in particular. When I talk to bank CEOs they already spend a lot of money on this and this is what keeps them up at night -- cyber threats and cybersecurity.

And so far, the Biden administration has imposed cybersecurity requirements on the aviation and the oil sectors. Who could be regulated next, I wonder?

SMITH: There is a discussion ongoing about how this will impact corporate behavior. It's important to note that this strategy is policy; it's not black-letter law.

But in terms of the spirit it is designed to help enhance public- private operational cooperation to disrupt adversaries and improve the cybersecurity posture of both the private sectors, civil society, and the federal government in boosting legacy systems such that they are modernized and supporting both I.T. and O.T. systems.

In regulating corporate behavior, in my reading, the strategy gives a nod and a wink in the direction by stating that the administration supports future legislative efforts here to impose robust, clear limits on the ability to collect personal data and sensitive data, but also legislation to set national requirements to secure data with standards and guidance developed specifically by NIST.

ROMANS: It's so fascinating.

Zhanna Malekos Smith, thank you so much. Nice to see you.

SMITH: Thank you.

ROMANS: All right, the Mavericks getting a historic night from their star duo to beat the 76ers.

Andy Scholes has this morning's Bleacher Report. Hey, Andy.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.

So, since making that trade for Kyrie Irving the Mavs were 1-4 with the Kyrie-Luka combo leading the way, but they broke out in a big way last night against Philly. Luka just dominating this game early on. The NBA's leading scorer had 17 points in the first quarter.

And Kyrie, meanwhile, showing off his incredible handles all game long. He split James Harden and Joel Embiid there and got the bucket to go.

Kyrie would end up with 40 in this one. Luka gets 42. The first time in Mavs' history two teammates scored at least 40 in a game as the Mavs win 133-126.

The Lakers, meanwhile, will have to find a way to stay in the playoff race without LeBron James. The league's all-time leading scorer is expected to miss most of March with an injured tendon in his right foot. Yesterday the Lakers announced LeBron will be reevaluated in approximately three weeks after hurting that foot against the Mavs on Sunday. So if it takes that long he's going to miss 10 of the team's last 19 games.

Right now, the Lakers in 11th place in the Western Conference standings, one game out of that last spot in the Play-In Tournament.

All right, to the NHL and three-time Stanley Cup champion Patrick Kane making his debut with the New York Rangers just two days after a blockbuster trade from the Chicago Blackhawks. Kane's girlfriend Amanda and his 2 1/2-year-old son watching warmups from the glass. That's pretty cool.

And then Kane getting a huge ovation from the Madison Square Garden crowd. He played 16 seasons in Chicago, winning those three Stanley Cups, and the Rangers are certainly hoping Kane helps get them over the top.

Now, the lost his debut last night to the Senators 5-3.

They've got a huge game on Saturday afternoon against Boston. And the Bruins continuing their historic season. Last night they beat the Sabres 7-1 to become the fastest team ever to reach 100 points.

All right, the NFL Combine is underway in Indianapolis and nobody was more impressive than Georgia edge rusher Nolan Smith. Smith ran an official 4.39 40-yard dash. That's the second-fastest Combine marked by a defensive end since they started keeping track back in 2003. For perspective, that time is faster than what Giants running back Saquon Barkley ran.

Now, Smith hasn't played since October when he suffered a season- ending pectoral tear.

But check out the reaction back on campus in Athens. His teammates -- they were watching that dash and they were celebrating the run like they'd won another national championship.

All right, and finally, it looks like Yankees pitcher Wandy Peralta will have no problem adjusting to baseball's new pitch clock. Look at this. The lefty struck out a Pirates batter on three pitches and he did it in under 20 seconds. Social media was buzzing yesterday that this could be the fastest strikeout in the history of baseball.

[05:45:11]

It's going to be a whole new ballgame this year, Christine. I can't wait. The pitch clock is actually going to make things so much fun and the games are only going to last like 2 1/2 hours, which is even better, right?

ROMANS: Yes, exactly. That's my biggest -- my biggest knock on baseball.

All right, nice to see you. Thanks so much, Andy Scholes.

SCHOLES: All right.

ROMANS: Coming up on "CNN THIS MORNING" a powerful cross-country system slamming the south with tornadoes, and the storm threat is not over yet.

And next right here, American banks haven't seen a year like this since Truman was president. Why plain vanilla bank deposits are down.

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[05:50:00]

ROMANS: Romans' Numeral this morning, 74 years. U.S. bank deposits were down last year for the first time since 1948. Total deposits fell about 2 1/2 percent at the end of last year to $19.2 trillion. Today's higher interest rates are making deposit accounts a lot less attractive since people can get better returns putting their money elsewhere.

All right, looking at markets around the world, Asian markets finished higher. European markets also moving up after their opening. On Wall Street, stock index futures at this hour also leaning higher here. So a positive mood in equities around the world.

Stocks closed higher yesterday. The Dow up 340 points -- the best day in almost a month. Markets rising after one top Fed official said it's likely interest rate hikes could stay at 25 basis points rather than something bigger, although that's just one Fed speaker's view.

All three indices are on their way to a positive week.

Banking giant Citigroup announcing it will cut hundreds of jobs across several divisions. And mortgage rates climbing for the fourth week in a row. An average 30-year fixed coming in at 6.65 percent. Also on inflation watch, gas prices rose two pennies overnight to $3.37 a gallon.

All right, Tesla announcing plans to expand production and build a new plant in Mexico, but shares fell nearly six percent after Elon Musk failed to offer details on a new generation of products during this investor day on Wednesday.

And who was watching that investor day? Our friend Dan Ives, managing director and senior equity analyst at Wedbush Securities.

It's the best performer -- Tesla -- in the S&P 500 this year after having a terrible last year. What's happening here for Tesla investors?

DANIEL IVES, MANAGING DIRECTOR, SENIOR EQUITY ANALYST, WEDBUSH SECURITIES: Well look, 2022 was harsh really because of the Musk- Twitter situation. There was a huge overhang in the stock. But now you're starting to really see Musk from a navigation perspective cut prices. Demand is increasing significantly, especially in China.

And this investor event -- this is sort of the golden goose. It's laying out the vision. But definitely, glass half-full now from a street perspective.

ROMANS: Where does Tesla sit in this race to -- for EV's? I mean, this is a big year, I feel like, in the adoption of EVs. And I mean, we're several years into this. Where is Tesla in that pecking order?

IVES: Well, it's a green tidal wave that's --

ROMANS: Right.

IVES: -- (INAUDIBLE). And right now it's Tesla's world. Everyone else is paying rent.

From an EV perspective, you have GM. You have a lot of competition coming -- Detroit, Europe, and especially in China. But that's really the goal here is that they're miles ahead of the competition putting an iron fence around their install base.

But the big question in terms of why the stock sold off, they didn't have a SUV 30,000 vehicle introduced. It hit the masses. The street was looking for more meat on the bone.

ROMANS: Let's talk about these layoffs in the tech industry. Thirty- six thousand tech layoffs since the beginning -- in the month of February. Meta has plans for more.

Meantime, the Nasdaq is up 10 percent as people are moving back into the tech sector. It almost feels like the more we hear about tech layoffs the more investors like these companies because they're getting lean.

IVES: Well, it was 2009 and 2010. I mean, as someone who has covered tech for a decade these tech firms were spending money like 1980s rockstars and now you're starting to see the layoffs. And that's really good in terms of preserving the bottom line. It starts the next cycle and also it's better than fear. Earnings season has really been better than feared for tech and that's why you're starting to see a risk on here.

ROMANS: The tech layoffs -- I think we have to put them in perspective. Some of these companies added tens of thousands of workers over the past few years and now they're kind of recalibrating. It's not as if they're cutting a whole bunch of meat on the bone. They're cutting the jobs that they -- some of the jobs that they had added.

IVES: Well, to give you a perspective -- I mean, Microsoft, since 2019, added 75,000 employees. They cut 10,000 in terms of their recent layoffs.

So to put it in perspective because these companies -- a lot of them have more cash than some countries and you're seeing what's really just a massive growth despite the macros. ROMANS: More cash than some countries. That's a good way to put it.

With more fears about inflation, a potential recession, the Fed continuing to keep interest rates higher, what is somebody investing in tech supposed to -- how do you position for this year?

IVES: Look, I think going into this year, I think the New York City cab driver was bearish on tech. And I think really, I view it as really the growth continues to be in tech despite the macro.

In my opinion, it's the time to own high-quality tech. I think a lot of tech is underinvested because I've seen some 2009 --

ROMANS: Really?

IVES: -- and 2010. And that's why when you look at names like Microsoft, Apple -- when you look at semis that I think start at the bottom -- in our opinion, despite the Fed and some of the white knuckles, we are buying tech stocks here.

ROMANS: Yes. You're talking about names that are in the S&P 500. So people who are passive investors in their 401(k) -- what he's telling you is probably good news.

Dan Ives, nice to see you.

IVES: It's nice to be here.

ROMANS: All right, just hours from now, Alex Murdaugh is facing sentencing for the murder of his wife and son. Full coverage, just ahead, of that. And tornadoes, damaging winds, heavy rain destroying homes in the south. The areas still in harm's way coming up on "CNN THIS MORNING."

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[05:59:12]

ROMANS: All right, our top of the morning this Friday, the top Shazamed songs in the world.

Here is number one.

(BEGIN VIDEO CLIP)

JIN, SINGER: Singing "The Astronaut."

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ROMANS: That's Jin from BTS with his solo single "The Astronaut."

Number two.

(BEGIN VIDEO CLIP)

MILEY CYRUS, SINGER-SONGWRITER: Singing "Flowers." (END VIDEO CLIP)

ROMANS: Boy, she's everywhere. "Flowers" by Miley Cyrus.

And number three.

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REMA AND SELENA GOMEZ, SINGERS-SONGWRITERS: Singing "Calm Down."

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ROMANS: Rema with Selena Gomez -- "Calm Down."

(END VIDEO CLIP)

All right, iconic sax player and innovative jazz composer Wayne Shorter has died. He played with the likes of Miles Davis and Art Blakey.

(BEGIN VIDEO CLIP)

WAYNE SHORTER, SAXOPHONIST: Playing with Santana.

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ROMANS: That's Shorter on stage with Santana in the late 1980s.