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First Move with Julia Chatterley
Fiat Abandoning Its Tie Up Plans With Renault Blaming The French Government; President Trump Demands More Progress With Mexico And Warns China About More Tariffs, A Tribute To All Those Who Fought For Freedom In Normandy 75 Years Ago. Aired: 9-10a ET
Aired June 06, 2019 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Live from the New York Stock Exchange, I'm Julia Chatterley. This is FIRST MOVE and here's
your need to know.
Fiat walks. The automaker abandoning its tie up plans with Renault blaming the French government. Step up. President Trump demands more progress
with Mexico and warns China about more tariffs, too and remembering our heroes. A tribute to all those who fought for freedom in Normandy 75 years
ago. It's Thursday, let's make a move.
Welcome to FIRST MOVE once again. We will be heading to Normandy in just a few moments' time to take a look at those D-Day commemorations.
But for now here on FIRST MOVE, we have been talking a lot this week about pivots, about pirouettes and about central banker action. Of course,
investors seem to think that central bankers are going to make all the right dance moves. I worry that investors at this moment are a little bit
too optimistic that we won't end up with a few stubbed toes.
But for now, let me give you a look at what we're seeing as far as U.S. futures are concerned. We are losing a bit of steam here pointing to a bit
of a mixed open, though we have risen 3 percent or more this week on rate cut hopes wiping out last week's losses.
European stocks, in the meantime are higher boosted by actions and words from the European Central Bank. They did announce a new round of long-term
loans to the banks to try and help stimulate some lending. I believe there will be plenty more calls for further action.
But for now, the message is that rock bottom interest rates will stay in place until at least the middle of next year. You know, they're not alone
in waving a white flag. India Central Bank cut some rates today that follows Australia of course.
Yesterday, China, also adding over $70 billion of cash to its financial system, one of the largest moves on record, in fact to try and help steady
the economy.
Central Bank is clearly responding to signs of slowing global growth. But both UBS and Goldman Sachs saying today, we need to see a lot more bad data
from the United States before the Federal Reserve actually follows through and cuts rate. So be warned.
Not the only warning today, President Trump as I mentioned threatening Mexico once again, saying he wants to see more progress, also threatening
to raise tariffs on China, too. He tweeted that he is dissatisfied with the progress so far in Mexico. Those talks are resuming today. And we'll
talk through in just a few moments time what that might look like.
In the meantime, Treasury Secretary Steve Mnuchin set to meet this weekend with that representatives of the People's Bank of China, so we'll watch
those talks to close. Can we hope for signs of greater unity? That's the question.
I tell you, there's always hope, especially when you see what's happening in Normandy today. And that's what we're going to start the drivers.
In Normandy, France, a moving tribute to veterans who made the ultimate sacrifice, too, in the fight for freedom. World leaders have spent the day
honoring World War II veterans and those who died on the beaches of Northern France 75 years ago.
U.S. President Donald Trump and his French counterpart Emmanuel Macron attended a service at the American Cemetery paying tribute to the men who
fought in that decisive D-Day battle.
Melissa Bell is in Normandy for us. Melissa, some powerful scenes I think even just looking at the beaches, Gold Beach in particular as it was known
with tanks, with soldiers commemorating simply what took place at that time, talk us through it.
MELISSA BELL, CNN PARIS CORRESPONDENT: That's right, Julia. This is what it's all about. It is from these waters and towards these beaches that all
of those young men so bravely and for so many of them have cost to their lives, stormed their way past the German defenses, securing in the end the
liberation of Europe.
And all along these beaches, hundreds of commemorative events have been held. There are according to local authorities, a million people who've
come out to take part.
Of course, the main event today was at that cemetery. There's extraordinary images, there's world leaders getting together to remember
their shared history and the sacrifices that have allowed them to build that peace and keep it and ensure that it remained for so long.
We heard from the French President who turned at one point very poignantly to speak in English to the American veterans who were there, an ever
dwindling number of course, year after year, and then we heard from the American President, who was remarkably in sync with what his French
counterpart had just said. Have a listen.
(BEGIN VIDEO CLIP)
[09:05:01] DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: To all of our friends and partners, our cherished Alliance was forged in the heat of
battle, tested in the trials of war, and prove it in the blessings of peace. Our bond is unbreakable.
(END VIDEO CLIP)
BELL: Now, the American President also spent a lot of time, Julia speaking to those veterans, speaking of them and singling out a couple of these
extraordinary stories, and they really are exceptional.
Every one that we've heard of these last few days, he turned to Russell Pickett whom he embraced, the last known survivor of that initial storming
of Omaha Beach.
Now, as I was saying, this is Gold Beach. This is where the British troops landed, but further along the coast, you get to Omaha Beach, where the
Americans landed, known as Bloody Omaha were so great, were the losses of the American troops and just imagine, Julia, for a minute, that that first
wave of American soldiers who landed on these beaches, about 90 percent were killed.
So the ones that survived were few and far between and this particular veteran, he was amongst them, Donald Trump paid tribute to him. It's been
all about these extraordinary men all now of course in their 90s, some in their hundreds.
We've seen some very moving ceremonies over the course of the last couple of days, one that was held up at Carentan just beyond the beaches in the
back country there a little bit, one of the crucial strategic positions that the Americans had to parachute in to try and take -- it took many days
of fighting. The parachutists survived, they finished off by taking the town with their bayonets.
Well, last night, we watched the very last few surviving veterans of the 101st Airborne Division rising for those that could still get up off of
their wheelchairs to listen to the Star Spangled Banner and to remember all of their fallen comrades -- Julia.
CHATTERLEY: Yes, I was watching the President's speech live earlier on and my eyes were welling up and I had a frog in my throat.
I mean, we cannot imagine what these individuals went through. But it was so poignant to me, the stories that he was telling about those individuals.
So I'm so glad that you point that out, because I think this was an incredibly powerful image of unity and what was sacrificed in order that we
have the freedom we have today.
One of the big moments as well was the flyover, I just want to show you some of those images and let you see one of the other aspects of that this
commemoration. More powerful images.
And Melissa, I just wanted to talk about what some of the other leaders said as well. I mean, Theresa May, obviously stepping down tomorrow from
her role as Prime Minister. But even her speech I think, was incredibly heartfelt, credibly powerful. All of these leaders stepping up today and
making pretty poignant speeches at this moment in time.
BELL: And I think remembering, Julia, everything that unites them, the recent history, the peace that was built in the rubble of Europe after
World War II, I think that's been a crucial element.
And when you're here on these waters, on boats, like this one, the amphibious trucks that allowed the landings to take place, you're reminded
of how that common peace was built. It was built through this extraordinary coordinated military operation, the likes of which the world
has not seen since I've never seen before, that allowed these many countries to get together and secretly over two years before D-Day
organized this extraordinary operation, logistically.
Just getting the logistics right, all coordinate along this coast, creating artificial ports, like the one that was built here, just off Gold Beach,
and having these trucks when the port was destroyed before the end of June 1944, these trucks bringing up all the supplies that were needed for this
extraordinary operation that by then was moving into the interior of France and taking back the parts of Europe that were still occupied -- Julia.
CHATTERLEY: Absolutely. And you know, I just go to one of the lines that Theresa May said here when she said, "You know, it's incredibly moving to
be here, looking out over beaches where one of the greatest battles for freedom this world has ever known, took place."
And just to go back to what we saw 75 years ago, the combined forces -- air, land, sea -- this operation and how momentous it was, how pivotal it
was as a turning point in World War II.
BELL: And of course, quite rightly, it remains what binds all of these leaders together. So whatever their divisions politically over the course
of the last few years, they come together at moments like this and of course, this one is particularly significant, Julia, the 75th anniversary,
because there simply may not be another big one where there is anyone who was alive at the time who can still take part.
So this was the important one to come together at, and whenever they do come together, those divisions that we hear about so often, that divide
most of the time suddenly disappear and we watched Theresa May for her last official event this morning opening, beginning putting the first brick down
with Emmanuel Macron of a Franco-British Memorial that they'd planned at their very first meeting.
These are the threads that unite these leaders, the leaders of the Western world, and the history that they can continue to build on. And I think
that is that poignancy that gets across political lines, that gets across whatever the controversies of the moments are, that are so spectacular to
hear.
And I think listening to the American President today that was really what we heard, an American President who was very much in keeping with the mood
of his European counterparts, and the other world leaders who gathered today.
It was about the veterans, it was about history, and it was about the peace that continues to prevail, that continues to endure, thank to that
architecture that was created in the wake of World War II.
And that's really what those commemorations were about today, reminding the world and perhaps the younger generations, even more of all the sacrifices
that were made along these beaches 75 years ago today, and in the coming days to ensure that we might all be free today -- Julia.
CHATTERLEY: Absolutely. And actually, I've seen a lot of the coverage as well as suggesting that they've actually never seen President Trump being
more presidential than what we've seen over the last couple of days with these commemorations in particular.
And to your point about unity, particularly at this moment. What next? Because we are going to see President Trump and Emmanuel Macron on of
course meeting after these meetings before the President then leaves of course back to Ireland. What do we expect to be discussed? Because
clearly, at this moment in time, lots to discuss not only what we're seeing in terms of these commemorations.
BELL: I think it'd be really interesting to see what comes out of that bilateral meeting. Because of course, when those doors close, and the two
Presidents find themselves together, there is so much that divides them.
We know that they're going to talk about Iran. We know that they're going to talk about the trade disputes that divide the United States from Europe.
Again, we've been talking about the relationship between Emmanuel Macron and Donald Trump for the last couple of years for a reason. They are
diametrically opposed in their world vision, each sort of standing up to the other as an example of everything that separates them, everything that
divides them.
They've had this interesting hot fog that does seem to function on a certain level. And yet the French President has always been very
forthright in telling the American President when he disagrees. How much progress will be made on the very many issues that divide them? And one of
the ones in particular for European leaders are of course, the trade disputes. That's really something that has caused -- put a division
between Emmanuel Macron and Donald Trump about a year ago.
That bromance we talked so much about turned sour partly because the European Union objected to the trade dispute and what the American
President was threatening to do to European imports to the United States.
So that will be at the heart of the discussion. Emmanuel Macron has always said that he feels free to speak mind to the American President. We'll
have to see what comes out of that.
But of course, the mood today here and apart from that bilateral meeting, the mood of that commemorative event, the mood at these many hundreds of
commemorative events that have taken place, all over today have really been of unity.
The number of nationalities that have turned up here, they're Dutch, they are French, they are English, they are Americans, they are Canadians.
They've come an awful long way to remind each other and to remind the younger generations who've been brought along here today of everything that
that unites us and of everything more profoundly perhaps in the immediate political disputes that unites us.
It's been quite an extraordinary day here at the Normandy beaches -- Julia.
CHATTERLEY: Yes, even the handshakes between the two Presidents were lacking the competitiveness that we've seen in the past, Melissa.
I just want to ask as well, if we've got those images, again of the beaches.
BELL: We watch the body language very well.
CHATTERLEY: Yes, I just want to bring back -- go back to what we were saying at the start of this conversation, some of those images of Gold
Beach which was so pivotal in Operation Overlord 75 years ago, and the boats that we can see and some of the tanks that we can see on the beaches.
Melissa, I believe that you actually went aboard one of the boats. Tell me what you were doing there earlier today, too.
BELL: Well, you can see now, I was going to show you the view here of Gold Beach. This is where the British had landed. Now, the tide is right up.
But this morning, it was all the way down. And it's quite a large beach when the tide is low. And there was this extraordinary spectacle, Julia,
250 vehicles have gathered. The people were in costume, they were in uniform -- an extraordinary atmosphere.
They had lined up before dawn to mark this extraordinary moment. And they kept saying, "It is about the history. It is about the sacrifices. We can
never forget." And that is why we have to keep coming back here every year and reenacting as much as we can what's gone on.
You can see one of the amphibious trucks there on the beach, just like the one we're sitting on now. They were also out in full force today. And you
really get a sense when you're out here on the water, especially earlier on when the tide was a little lower of what it must have been like to come
towards these shores on these vehicles.
[09:15:07] BELL: Imagine, we now know that so much of the preparedness have gone wrong. The bombardment of the enemy positions that should have
taken place before these young men landed simply hadn't taken out as much of the German firepower as they'd hoped.
The young men came up and in particular, in the case of Omaha, went straight to their deaths, wave after wave after wave before the first
penetration beyond enemy lines was able to take place, and the operation was able to be announced a success and to continue behind.
There was a point even, Julia, when they had considered abandoning the operation at Omaha Beach. So disastrous was the turn that it had taken.
So you can imagine the chaos of that morning, you can imagine in the darkness, these young men trying to make their way to these beaches. The
others of course parachuted. We've been hearing a lot about the 101st Airborne Division further back, the parachutist trapped, isolated, being
shot at as they landed. I mean, incredible stories of bravery, incredible stories of what would have seemed at first, like an incredibly chaotic and
dangerous operation.
Ultimately, of course, we know that it's secured, the victory that it secured and the peace that has followed and that is why so many people have
turned up to pay their respects to the very few men who continue to represent that extraordinary generation - Julia.
CHATTERLEY: Absolutely. That make the hair on my arms stand up. We remember and will continue to do so. Melissa Bell, thank you so much for
that and we will continue to cover the commemorations over Normandy throughout the programming today on CNN. So stay with us for that.
For now, I'm going to move on and talk about Fiat-Chrysler u-turning on its mega merger with Renault blaming Renault's biggest shareholder, the French
government in fact. Shares in Renault as was you can see down in Europe today.
Anna Stewart has the story for us. Anna, when this story broke, and this potential tie up was announced, my instant response was that governments
here were going to have a problem. And that's exactly what it seems, what do we know?
ANNA STEWART, CNN REPORTER: Definitely, the finger being pointed at the French government here by Fiat in their statement, in which they pulled out
of the merger. They said it's become clear that the political conditions that currently exist in France just don't exist for this combination to be
a success.
And it doesn't really, as you say come as much of a surprise at least that there were going to be some problems to work through. The French
government is a big stakeholder of Renault, the biggest, but 15 percent of shares, we knew there were some problems that they'd raised, but we thought
they could be ironed out.
For instance, French government wants to ensure that jobs and plants in France would be safe. They wanted, even though their stake would have been
reduced to seven and a half percent. They wanted to make sure they had a seat in that Board and they wanted to make sure they had veto control over
executives.
There were rumors they wanted to have operational headquarters in France. And of course, there's this issue over the Nissan-Renault Alliance. We
know that the French government holds great value in Nissan, and Nissan were lukewarm, at best.
Nissan couldn't have vetoed this merger. But they weren't really going for it. They weren't really getting out there and supporting it. And there
were concerns that that Alliance is already under strain with Carlos Ghosn, the former Chairman being arrested, and this could have pushed it even
further.
However, I would say that all those problems, none of them were insurmountable this time yesterday. We thought perhaps this would get
extended, talks would continue. But Fiat pulled the plug, and it's taken us all, myself included by surprise -- Julia.
CHATTERLEY: Yes, we'll see if it sounds salvageable. I feel like everyone is a loser here 5 billion euros worth of synergies up in smoke. And of
course the French government looks anti-business, too. Ouch. We will see.
Anna Stewart, great work. Thank you so much for that. All right. We're going to take a quick break here on FIRST MOVE, but when we come back from
pomp and pageantry to talking trade, we'll take a look at what's next for President Trump after the State Visit in Britain and of course those D-Day
commemorations in Normandy and electric road trip to find out what it takes to drive a Tesla long range. That's coming up. Stay with CNN.
(COMMERCIAL BREAK)
[09:21:42 ] CHATTERLEY: Welcome back to FIRST MOVE live from the floor of the New York Stock Exchange where we're seeing a pretty modest start for
U.S. markets this morning. Investors perhaps on pause after two days of incredibly strong gains.
We've also heard a message from the European Central this morning, too. They are planning to keep rates at rock bottom levels until at least the
middle of next year, too. So all the Central Banks coordinating here to say look, if there is a broader slow down, we will provide support here.
The President also making comments on trade saying that he'll make a decision on further Chinese tariffs at the G-20 meeting this month.
We are also seeing comments coming from President Trump and Emmanuel Macron who are meeting at this moment. If we get more, we will take you to that.
But for now, let me give you a look at what's going on in the bond markets. U.S. 10-year yields under a bit of pressure this morning hovering around
that 2.1 percent. Still above this week's lows, though, and I'll give you a quick look at the oil market, too.
Oil pushing into bear market territory yesterday. So down some 20 percent from its most recent highs on a higher inventory bill, too. Clearly, a lot
going on. Let's talk it through. Joining me now, Alicia Levine, she is Chief Strategist at BNY Mellon Investment Management. Great to have you
with us.
ALICIA LEVINE, CHIEF STRATEGIST, BNY MELLON INVESTMENT MANAGEMENT: Thanks for having me back.
CHATTERLEY: There's a lot going on. What do you make of it right now? What are you telling clients?
LEVINE: So we're telling clients right now that we actually see a range bound market, because we think there's a Fed put and actually a trade put
somewhere around the 2,650-2,700 range, because it looks like the Fed is more likely to cut as a next move on rate.
And on top of that, it's very likely we're going to have some sort of announcement that the meetings will commence with China again. So people
want to be in the market for that. And that's creating a bit of a floor.
And then we kind of see a ceiling just because the growth numbers are coming in because of the trade tensions because of the confidence in the
investment problem. And so for that we see a bit of a ceiling.
CHATTERLEY: What if we don't see a resolution on trade? And what happens if on Monday, if we look at the immediate short term, we see five percent
tariffs on Mexican imports. Is that sort of in the price at this stage, given what we've seen, and in light of what you said the Federal Reserve,
perhaps indicating that the will cut rates in a worst case scenario here?
LEVINE: So I think we -- I think investors should expect that that five percent tariff goes on Monday. It seemed very clear that at least the
initial five percent was going to go on.
The administration thinks that tariffs give them a stronger bargaining position.
CHATTERLEY: Leverage.
LEVINE: Let's leverage and it's something to take away as part of a negotiation. So that should go on. I don't think the market is fully
pricing in the full 25 percent on the next $325 billion on China, nor is the pricing in any possible action against Europe.
So that's the risk here that, you know, that the trade action goes on longer. And the markets haven't priced it in and very interestingly,
earnings have not come down for 2019. And that's your risk because you're really looking at a two to four percent risk on the earning side, just
through the last half of the year.
CHATTERLEY: Why have analysts not done that? Why have analysts not looked at this and gone, okay. It's tough position at this stage. But why
haven't they? Are they just waiting for further indication perhaps, even the G-20 meeting as the President alluded to here? Because for me, that's
quite surprising.
[09:25:09] LEVINE: Julia, I think you're right. I think the analysts are waiting for what happens at the G-20. So the Finance Ministers are meeting
this weekend.
CHATTERLEY: Yes.
LEVINE: So I'm sure at that point, there will be some announcement that Xi and Trump will meet at the G-20. So then, negotiations will restart
because right now, neither side is negotiating. So we're not negotiating.
I think analysts are waiting to hear what happens at the G-20. We think the base scenario is that if there's a deal, it doesn't happen until the
end of the year.
CHATTERLEY: Yes. So it could be a really long time to wait for a resolution here. If we look at what the global economic outlook is, you
know, we've had all sorts of warnings, the World Bank have known their estimates here, and then I look at the oil market, and we're back in bear
market territory.
And I go, there is really mixed signals between the commodities markets and the bond markets here and still what I see in expertise, how do you account
for that confusion?
LEVINE: Look, you know, in my years doing this, when the bond market and the equity market disagree, the bond market tends to have a better handle
on things. And so we do think there's some asymmetric risk to the downside.
But for the next few months, we see a range bound market here only because we do think there will be some attempt to move things forward with China.
If that doesn't happen, then you've got all downside.
CHATTERLEY: Yes, and all eyes then on Jay Powell, riding to the rescue. Fantastic to have you.
LEVINE: And you know, the market wants this cut by July. And if it doesn't get the cut in July, that's your other risk.
CHATTERLEY: Welcome to another tantrum. Yes, Alicia, fantastic to have you on as always.
LEVINE: Great to see you, Julia. Thank you.
CHATTERLEY: Alicia Levine there. Chief Strategist at BNY Mellon Investment Management. All right, we're counting down to the market open
this morning. Plenty more to come from FIRST MOVE and of course, we will head back to Normandy, too. Stay with us.
(COMMERCIAL BREAK)
[09:30:01] CHATTERLEY: A very vigorous ringing of the opening bell this Thursday here at the New York Stock Exchange. Welcome back to the show.
We're expecting a pretty flattish open at the U.S. markets this morning following two strong days of gains, of course.
Stock futures have been they're pretty high, much higher than we're seeing right now a few hours ago, but we've lost some ground into the open here.
Watch the Fed speak. We've got fed -- New York FedEx Chief John Williams speaking this afternoon, particularly in light of the fact that analysts
like UBS and Goldman Sachs had said today, "Look, don't count on the Federal Reserve cutting rates anytime soon literally," echoing what Alicia
Levine was just telling us a few moments ago.
Also, tomorrow, the U.S. jobs report could also be key in light of the ADP private sector jobs growth numbers, the weaker growth numbers that we saw
earlier this week, too.
All right. Let me walk you through some of the individual movers, our global movers on FIRST MOVE this morning. Uber in focus, it rallied more
than five percent on Wednesday. It is now trading above its $45.00 IPO price for the first time ever, worth noting.
A number of Wall Street firms commenting positively about Uber this week, which have allowed it, I think, to pick up some steam here.
Stitch Fix also in focus. The online fashion company posting a surprise profits of seven cents per share. Analysts were expecting a loss.
Revenues also came in strong and they provided positive guidance, too.
At Home under pressure. Home Decor Superstore missing earnings expectations. They also offered weak guidance, perhaps the key here. They
blamed bad weather in many parts of the United States.
Michaels Companies also again under pressure. The arts and crafts retailer trading now near record lows. The Q1 sales missed expectations, and again,
another company here lowering their profit guidance. Retailer here feeling the heat, I think from both Walmart and Amazon, some pretty stiff
competition.
All right, let's set the markets aside now because I do want to return to the commemorative events taking place as we speak in Normandy, France.
It was exactly 75 years ago today, June 6th that the tide of World War II was turned. Expressed around now as D-Day when wave after wave of Allied
troops landed on the beaches of Normandy, France, and the heavy German gunfire.
Today, at a time when the Transatlantic Alliance is under some considerable strain, the U.S. and the French Presidents met in Normandy to remember that
cooperation and their shared losses.
A short time ago they honored veterans, and those who died at the U.S. Military Cemetery overlooking Omaha Beach. This is where over 9,000
Americans were laid to rest.
Each of the leaders spoke of the sacrifices of two million soldiers who fought in Normandy, and the bond the countries share.
(BEGIN VIDEO CLIP)
EMMANUEL MACRON, FRENCH PRESIDENT (through translator): France has not forgotten the two million soldiers who in the end of the longest day, would
continue fighting for weeks and went through the hell of combat in Normandy countryside.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: To all of our friends and partners, our cherished Alliance was forged in the heat of battle,
tested in the trials of war, and proven in the blessings of peace. Our bond is unbreakable.
(END VIDEO CLIP)
CHATTERLEY: Joining us now is that Tina Fordham, Chief Global Political Analyst at Citi. Tina, I do want us to talk more broadly about what we're
seeing and the future here. But I also want to mark what we're seeing right now in Normandy.
And as I pointed out there, a moment of huge unity among a quite significant amount of disunity outside of this moment.
TINA FORDHAM, CHIEF GLOBAL POLITICAL ANALYST, CITI: Yes, it's very powerful. And you can't help but be moved by these incredible scenes. And
if you've spent any time in France, you know, how seriously they take commemorating the memory of the war dead and the way that the World War II
cemeteries are maintained.
So it is a real focal point for the U.S.-European relationship at a time when, frankly, America's European allies haven't been so sure that
President Trump is very committed to it.
CHATTERLEY: Absolutely. I want to move on and talk about some of the comments that the President made over there, particularly about China.
He said, look, if we don't get progress, or at least a positive breakthrough in talks with China, when they meet, President Xi and
President Trump at the G-20, then he'll then make a decision on more tariffs on the additional $325 billion worth of goods.
[09:35:10] CHATTERLEY: What's your base case here with regards to U.S. and China?
FORDHAM: Well, Julia, we've talked about this a number of times in the past, and I've consistently thought this year that markets have really
gotten too far ahead of the politics, hence the surprise reaction a couple of weeks ago, and then another surprise after the Mexico comments.
Market participants have tended to see these kinds of statements from President Trump as a bluff, as a negotiating tactic. But I say is that
they are a negotiating tactic, for sure. It's increasing the pressure.
But we should take him at his word. He does mean to go further with sanctions and believes that he has the space to do so. I think another
thing that's changed by the way is the extent to which the President may be keeping as close an eye on U.S. equity markets as he has in the past.
The word is that he is being advised not to focus so much on the day-to-day gyrations and to keep his eye on the prize, which is, of course, big
concessions from China.
CHATTERLEY: You know, it's interestingly, politically here in the United States, there's been a very different response to the pressure that the
President has placed on China versus what we're seeing right now with Mexico and using tariffs on the trading relationship to try and tackle
something like immigration.
I don't think anybody believes that immigration isn't something to be tackled here. But what's your base case as far as Mexican tariffs are
concerned because the pressure coming particularly from the Republicans on Trump, at this moment is very different?
FORDHAM: Well, I think it's really important to understand that this President who came to power on the on the back of emphasizing that he
wasn't going to follow, you know, business as usual, that he was prepared to break glass has very much done so in this case when it comes to the
Mexico tariffs whereby immigration has been used as a pretext that is very much outside of the usual protocol. It's safe to say it has blindsided
Mexico.
But the difference between I think the discussions with both Canada and Mexico and Washington, vis-a-vis China is that both of those countries have
rather been more willing to scramble to -- and have I think, believe that they have less leverage in the negotiations.
For China, I think China is a very clearly signaling, it's not willing to substantially undermine its objectives, especially when they come to
technology and where it intersects with national security. So quite different kind of power dynamic.
CHATTERLEY: It almost makes me thin, we're still too complacent about the prospects of this. Tina Fordham, fantastic to get you on FIRST MOVE as
always. Tina Fordham, the Chief Global Political Analyst at Citi joining us there.
All right, we're going to take a quick break here on FIRST MOVE. But coming up, we've heard of startups listing on the stock exchange, but what
about when the stock exchange itself is a startup? My conversation with the CEO of a new innovative Stock Exchange after this.
(COMMERCIAL BREAK)
[09:41:34] CHATTERLEY: Welcome back to FIRST MOVE. There's good news and there's bad news. U.S. President Trump says talks with Mexico are
progressing just not fast enough. He is still threatening that tariffs could hit on Monday. In a tweet late Wednesday, the President said the
higher tariffs go, the higher the number of companies that will move back to the United States.
Paula Newton is in Mexico City for is once again. The talks of course, continuing again. Do we what the United States is asking for specifically
here, Paula, and do we know what the Mexicans are offering?
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: This is the big question, isn't it? A couple things I can point out to you. One is, you know,
what's going to happen in the short term and what is going to happen in the long term.
In the long term, what Mexico wants is more financial aid, both for what they do on that southern border, and also what is done in those Central
American countries. Countries like Guatemala, Honduras, El Salvador, trying to come up with an economic solution so that these people do not
want to or have to flow through Mexico up to the United States.
What's more important here, though, in the day ahead will be what happens in the short term. And that is the problem because the United States
essentially wants Mexico to harden up that southern border, whether with troops or any infrastructure. Something that Mexico really would be at
pains to do both financially and politically. And that is the big problem.
There's also a lot of international law work here, Julia. I know, you know, in terms of trying to claim asylum in the United States, the United
States wants to turn back all those things Central American migrants and leave them in Mexico. They believe that they want Mexico to sign up to
what's called a Third Party Safe Country Agreement. And that means they would be turned back at the United States and remain in Mexico.
Again, something that is a tall order from Mexico. I can tell you that President Lopez-Obrador just spoke a few moments ago saying that he indeed
is optimistic, but then leaving the door open to retaliation that he says he will not discuss.
Julia, as this is a business show. Let's backtrack, right, big picture. I also have to tell you that Fitch and Moody's are not so keen on Mexico's
credit rating of the Mexican peso, while it has firmed up in the last few hours, is taking more hits.
Those five percent tariffs may go into place on Monday, but that Mexican peso may absorb some of the shock of that. The Mexican government though,
saying they're still optimistic.
CHATTERLEY: Yes. I think it's likely then the said tariffs hit. The question is what can they do in 30 days -- the following 30 days to prevent
a further rise? Paula Newton, thank you so much that update there.
All right, let's move on. First, there was the New York Stock Exchange, then the NASDAQ and now the LTSE, which stands for Long Term Stock
Exchange.
The SEC last month officially approved the LTSE's position as the 14 listed exchange here in the United States. It is seeking to make more focused on
the long term ease for the next generation of public companies.
The LTSE is now working to get regulatory approval for listing standards like long term voting rights, executive compensation, disclosure, and
shifting governance.
I spoke with the company's CEO and asked him what he thinks will draw companies to his alternative exchange. Listen in.
(BEGIN VIDEOTAPE)
ERIC RIES, CEO, LTSE: We have nothing against the legacy exchanges. They have played an important role in the economy for a long time. And legacy
companies need a place to list so Philip Morris has to be listed somewhere.
We don't -- we're not opposed to the legacy exchanges. We don't even really view them as competitors. We encourage and allow companies to dual
list if they'd like to have an NYSE as well as LTSE. Our rules are compatible with that.
[09:45:02] RIES: And if you look at what this next generation of companies wants, they would like a way to show their investors, to pledge to their
investors and to all their stakeholders that they're serious about building products that are good for their customers and good for the world.
So that's actually a very simple idea, and it's something this next generation of founders is really hungry for. So I built, you know, deep,
long term relationships with a lot of these business leaders, so I know them well, personally.
And it's not so much about their relationship with me, it's that we've been able to build a brand and a company and a value proposition and standards
that really resonates with their values.
So compared to the incumbent exchanges, we have a different philosophy, a different business model, where the companies and their long term
investors, they are the customers of LTSE, not traders, and we have nothing against stock trading, stock trading has a very important part. But stock
traders are extremely well served as customers by a whole range of financial services companies.
We'd like there to be at least one whose primary purpose is to serve long term companies and their investors.
CHATTERLEY: Yes, it's interesting. I mean, there is an increasing focus on ESG investing, and particularly for younger investors here, millennials,
something that's very much focused on right now.
If I take Tesla as an example, it has a huge weighting in some of these funds simply because of the climate focus, the electric cars, and yet, you
look at the share price volatility and the behavior at times of the CEO and it sort of raises eyebrows, with that kind of company, with those kind of
metrics, but a CEO that can create waves, to put it politely be welcome on the LTSE?
RIES: Well, I shouldn't speak about any specific CEO or company.
CHATTERLEY: But it's an important question.
RIES: But certainly, yes, certainly. If you look at the next generation of employees, if you think about younger employees who interact with these
companies as customers, as shareholders, as the critical knowledge workers that make these companies go, you see the rise of employee activism, like
the values of that next generation are very strong, and they don't want to invest in, work for or buy products from an old fashioned company.
So if we're going to have capitalism 2.0, if we're going to actually redeem the system in the light of the challenges that it faces, it's going to need
a stock exchange.
(END VIDEOTAPE)
CHATTERLEY: The truth is fewer and fewer companies are even going public. There were just 190 IPOs in the United States in 2018, half the number from
20 years ago. Many firms have been staying private longer, which means ordinary stock investors never actually get the chance to benefit from an
increase in the company's valuation. Ries told me he hopes his stock exchange can change that.
(BEGIN VIDEO CLIP)
RIES: There's no question to me that part of the backlash that we're seeing is people's really deep sense that they're being left out of
something valuable. And the people who are upset about that are right.
They legally cannot invest in the highest growth part of our economy. And I don't think that's right. So somebody has to figure out a way to get
those companies to public again. I mean, it was not that long ago.
Amazon went public after three years of operations. So you could have bought the IPO of Amazon, and if you really had the courage, you could have
held it this whole time.
One of our investors is the founder of AOL, Steve Case, and he told me a story once that really stuck with me, he said, even to this day, people
still come up to him on the street sometimes and thank him for putting their kids through college, because they bought into the AOL IPO and they
were able to hold it through that crazy run up in the 90s.
So the broad public was able to profit directly from this innovation and disruption. And given that our whole society is affected by the products
these companies make, we have to allow everybody to benefit from the prosperity they generate.
(END VIDEO CLIP)
CHATTERLEY: When he first came up with the idea, he actually wanted someone else to launch it. But when he pitched it to people, he said, they
simply laughed at him. I asked him whether that was what prompted him to go it alone and do it himself.
(BEGIN VIDEO CLIP)
RIES: I understand that skepticism. I didn't mind being laughed at. I'm used to it. But to me, the kind of defining characteristic was of an
entrepreneur, it's actually people who think entrepreneurs are great risk takers, and that they, you know, they want to take crazy risks. But that's
actually not true.
As an entrepreneur, when you have a vision, when you see that something must be fixed. It actually feels like the least risky thing you can do,
because somebody's got to do it, or these problems are going to persist forever.
So to me, it felt like it just was what I had to do. And look, it might have turned out to be impossible. Like everybody said, it might have
turned out to be a bad idea that people said, but the more I learned about how the system actually works, the more I realized that stock exchanges
were not handed down on stone tablets. They're built by human beings, and so we can build new ones.
(END VIDEO CLIP)
CHATTERLEY: He came up with the idea for LTSE almost 10 years ago and said that there's nothing quite like speaking an idea out loud for the first
time and then seeing it later become a reality. Interesting thing to watch.
All right, coming up, 600 kilometers on a single charge. CNN takes a long range Tesla. First spin. We will be back with all the details. Stay with
us.
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[09:52:15] CHATTERLEY: Welcome back to FIRST MOVE with a look at today's "Boardroom Brief" and news just in. Google says it has agreed to by the
big data analytics firm Looker in a deal with $2.6 billion. It says the agreement built on an existing partnership where the two firms share more
than 350 customers including the likes of BuzzFeed and Yahoo. Looker will join Google Cloud.
Walmart's CEO says America's minimum wage is too low. At the retailer's annual shareholder meeting, Wednesday, Doug McMillan said $7.25 an hour is
simply not enough and called on Congress to act. U.S. presidential hopeful, Bernie Sanders also attended that meeting and pressed Walmart to
raise its pay.
Tesla is launching a long range version of its sedan that can travel 600 kilometers on a single charge. CNN's Peter Valdes-Dapena was one of the
first journalists to get behind the wheel on a road trip down the U.S. East Coast. How exciting. Peter, fantastic to have you with us. What was it
like to drive?
PETER VALDES-DAPENA, CNN BUSINESS SENIOR AUTO WRITER: Surprisingly nice to drive. Well, the Model S is just basically, I have to say a very good car
to drive. And I used autopilot a lot of the way down here. It was a very enjoyable drive, maybe with a little bit less flexibility since I had to
stop at Tesla chargers along the way that I might have had in a gasoline car.
But on the other hand, a lot less noise, and I only had to stop three times the whole way down here.
CHATTERLEY: Wow. How much of the time did you use on autopilot? And did you keep your hands on the wheel, Peter?
VALDES-DAPENA: Absolutely. I kept my hands on the wheel and my eyes on the road. It's very important to remember this is not a self-driving car.
So I did keep my hands on the wheel. And I actually used autopilot and/or navigate on autopilot, the more advanced feature pretty much the whole way.
And actually, it was quite helpful and I felt quite safe with it. But I felt safe with it again, as long as I kept my hands on the wheel and my
eyes on the road.
CHATTERLEY: Absolutely a secondary reiteration of the warning there. Peter, thank you and 600 kilometers though, how long did that take? And
the critical point here is a single charge? Because this feels like a real game changer here.
VALDES-DAPENA: It's quite good. To be honest with you, though. I think even more important is the advancement that Tesla has made in this software
in the car for predicting so when I put in a route, let's say from New York City to Richmond, which was my first day or from Richmond to Atlanta, on my
second day, it actually built into the route charging stops along the way, roughly 25 to 40 minutes each time to stop and charge the battery to about
80 percent so that I could keep going. I think that made an even bigger difference.
[09:55:01] CHATTERLEY: Fantastic. Peter Valdes-Dapena. Great job, very exciting and we'll continue this conversation on "The Express," and of
course QMB later on this evening. Thank you very much for that.
All right, that just about wraps up the show. Let me give you a quick look at what we're seeing for markets. We've lost a bit of steam versus the
rally that we've seen for the last two days.
As you can see tilting to the downside here for the NASDAQ, so we'll be watching that, too. But for now I want to wrap up the show.
You've been watching FIRST MOVE, as always and make your FIRST MOVE today and look at some of these images at the commemorations of course, going on
right now in Normandy.
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