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First Move with Julia Chatterley

U.S. Threatens The E.U. With Tariffs On Billions Of Dollars' Worth Of Goods; Anheuser-Busch InBev Is Brewing Up The Year's Biggest IPO; Why A Good Night's Sleep Is Good For The Global Economy. Aired 9-10a ET

Aired July 02, 2019 - 09:00   ET

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

ZAIN ASHER, CNN ANCHOR: Live from the New York Stock Exchange, I am Zain Asher, in for my colleague, Julia Chatterley and here is what you need to

know.

Food fight from pork to pasta, the U.S. threatens the E.U. with tariffs on billions of dollars' worth of goods; and toast of the market, AB InBev is

brewing up the year's biggest IPO; and why a good night's sleep is good for the global economy. This is Tuesday, my friends and this is FIRST MOVE.

All right, welcome, everybody. I am Zain Asher. We have got a jam packed show for you today. It seems as though some of the trade optimism that

pushed the S&P 500 to record highs on Monday has faded just a bit. We'll walk you through.

If you just take a look here, they are pointing to now -- let's see -- a mostly flat open. Right now you see the Dow there is down about one tenth

of one percent.

Stocks began the new month, July 1st and the new quarter with solid gains yesterday with the new concerns over trade when it comes to E.U. tariffs

are contributing to some of the cautious move we're seeing today.

The U.S. is now threatening new tariffs on $4 billion worth of E.U. goods in the ongoing Airbus-Boeing subsidies dispute. It is another reminder

that trade uncertainty is not going away anytime soon even though U.S. and China do have a trade truce in place.

Let's take a look at what's happening elsewhere around the world. European stocks are trading mixed right now. It's a mixed bag there as you can see.

Asian stocks also closed, mix as well. Hong Kong shares rallied over one percent. Stock market was closed on Monday.

Australian stock edged higher after its Central Bank cut interest rates to an all-time low of one percent. Also today, oil prices are down at one

percent after OPEC actually agreed to keep production cuts in place until next month.

Let's get to the drivers right now and the escalation of the trade battles between the U.S. and the E.U. Paul La Monica is joining us live now in the

hot seat. So Paul, this is like a game of whack-a-mole because just as one trade dispute sort of calms down, another one pops up right away.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, exactly, Zain. I mean, we had the market rally yesterday on hopes that the U.S. and China could come to a

deal potentially because of a trade truce.

But now the E.U. is back in the picture, the feud between the U.S. and the European Union, it is mostly about agricultural products with all these new

tariffs on coffee and, you know, whiskey and pasta.

But make no mistake, this is really about Boeing and Airbus. A dispute that goes back decades. In 2004, the E.U. first alleged that Boeing was

getting favorable subsidies from American -- the Federal government here as well as individual states. The U.S. countered, saying, you know what?

You're doing the same thing in Europe with regards to Airbus.

This has gone to the WTO, there have been various rulings for both sides where you know, it could claim victory, but this is still a dispute that is

going on to this day.

And I think these tariffs, that's really what it's about. It's about Boeing versus Airbus, and the battle for the global market share lead in

the aircraft business.

ASHER: And in all of this though, Paul, the E.U. has the most to lose, because they actually export more guys, to the United States than vice

versa.

LA MONICA: Yes, I think that the U.S. feels that it's in a comfortable position, much like it is in that driver's seat with China because it is

the country that is not doing as much exporting. So the tariffs on the U.S. won't be as severe as the tariffs on in this case, the E.U. as well as

on China.

So it's a bit of a dangerous game here, obviously, you know, global markets have been unsettled, to put it mildly by all this trade tension, but to the

American, you know, the White House and the U.S. administration's credit, they've realized that they are probably playing this card game with a

better hand.

ASHER: All right, Paul La Monica, live for us there. I appreciate that. All right, so Anheuser-Busch InBev is looking to make the biggest IPO of

the year, the Asia business of the brewing giant is aiming to raise around $8 billion to $10 billion.

Matt Egan is following the story for us. So Matt, just how significant is this? We're talking about the biggest IPO of the year.

MATT EGAN, CNN BUSINESS LEAD WRITER: That's right, Zain, so move over Uber. Anheuser-Busch could have the biggest IPO of the year. They are

moving forward with a plan to list a minority stake in the Asia-Pacific business in Hong Kong, that as you mentioned, this listing could raise

anywhere between $8.3 billion and $9.8 billion.

Now to put some context around that that would easily exceed what Uber raised when it went public in May when it raised about $8 billion. And not

only that, but Deal Logic says that at the high end of the valuation, it would actually be the largest food and beverage IPO on record around the

world.

[09:05:19] EGAN: That current record is held by Kraft Foods, which raised about $9 billion when it went public in 2001.

And so a little bit about this Asia-Pacific business, it generated about $8.5 billion of sales last year. It sold everything from, of course,

Budweiser to Stella Artois to Corona, and its main markets, including Australia, China, South Korea, and India. So obviously, some fast growing

markets.

Now obviously, the question is, why are they doing this? And you know, you have to recall that AB InBev took on a lot of debt when it acquired SAB

Miller in 2016. Now, the company has more than $100 billion of debt at the end of 2018.

And not only that, but it's very heavily leveraged. It has got about four and a half times debt to earnings, the goal is to get it down to two. So

it's obviously far from that. And now all of these companies are under pressure to try to clean up their balance sheets, of course, before the

next recession strikes.

ASHER: So Matt, just in terms of what they're going to be doing specifically with the funds raised, is it just about, you know, decreasing

debt load? Or is there more to the story than that?

EGAN: So the company did say in May that it was looking at potentially doing this and that by listing a minority stake in the business, it would

accelerate the de-leveraging plans.

But that's not it. What they want to do is they want to create this regional champion in the consumer goods industry in the Asia-Pacific

region, and they also said that this could be a really good jumping off point for future M&A.

So it's possible that they're going to simultaneously pay down debt and also try to broaden and diversify their portfolio a bit -- Zain.

ASHER: All right. Matt Egan live for us there. Thank you so much. Appreciate that. Okay, so let's do a quick check on Asian markets right

now. Take a look here, as you can see, it is certainly a mixed picture with the HANG SENG making the strongest showing there as investors caught

up with Monday's rally, the Hong Kong market reopened after a holiday that saw violent clashes in the city center.

Chinese leaders condemned protesters who ransacked the city's Legislative Building, describing their behavior as totally intolerable and severely

illegal.

Nic Robertson is joining us live now. So, Nic, I mean, at this point, what happens if Carrie Lam doesn't meet expectations in terms of either

resigning or simply withdrawing the bill entirely?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, the protesters are indicating that they will come back on the streets because they have

their minimum demands. They view her as politically isolated. They view her as untrustworthy.

And this is -- you know, they feel that they've got a long term battle on their hands. So if they don't get what they want, they are indicating

they'll come out on the streets. They are also indicating -- Joshua Wong, who was one of the 2014 Occupy Movement protesters who was sent to jail and

released recently, he said, yes, we accept and understand that there may be a bit of, you know, maybe a bit of pushback, because of the graffiti and

the damage that was done inside the Legislative Council Building.

So they recognize that the public mood may evolve towards them. But I think over the long term, and this is true for all the sort of pro-

democracy legislators and pro-democracy activists here that they think over the long term, the population here wants Carrie Lam to fully step back and

get rid of completely the Extradition Bill.

They believe that their calls will be supported, that the violence here will be seen as a one-off incident. And, you know, this is a crime scene

now, the Legislative Council Building, and we've just seen a number of Fire officers go into the building. They are, we are told, looking at a

suspicious object that was discovered yesterday. It has to be said yesterday after the protesters left the building.

It's an inflammable type object, and that's why the Fire Services have been brought in to deal with it, and they are currently working on that in the

building.

There's also a crime scene that we've seen investigators taking material away from through the day, but the political consequences are really yet to

be fully appreciated. The impact of course is that this building won't be operational for many weeks' time.

The other two Legislative Council meetings that were expected to happen before the July recess, they won't be happening now. So if you will,

government business is on hold until the repairs are done.

But to your point, it is essentially what is going to happen next. You know, the reality is very probably more of the same. We've heard from

China today saying that they see this as an undisguised effort to you know, change the one country two systems style of governance. That they see this

as a challenge to that.

[09:10:13] ROBERTSON: They back the government of Hong Kong, they back them when they call for the rule of law. But the real -- the real dynamic,

it's still playing out. This is only part of it. It hasn't ended here. This is this is part of a continuum.

ASHER: All right. Nic Robertson live for us there, thank you so much.

And the storming on the Legislative Council Building was just the latest incident in a series of protests going back several months. The political

turmoil is raising questions about Hong Kong's status as China's Global Business Gateway.

Tara Joseph is the President of the American Chamber of Commerce in Hong Kong. She joins us live now. So Tara, is Hong Kong status as an

attractive business hub in the region, seriously under threat at this point, in your opinion?

TARA JOSEPH, PRESIDENT, AMERICAN CHAMBER OF COMMERCE IN HONG KONG: Well, it's fair to say that emotions are running high today amongst the business

community after those ugly scenes that we saw over the weekend, even though the business community or at least the international business community

backs the idea of people being able to express themselves, actually, the business community here is quite intact.

In your last story, you were talking about Anheuser-Busch and the biggest IPO of the year that's taking place in Hong Kong. Business is still brisk

here, and there's really a sense that there is a lot more that can be done.

Even though there are U.S.-China trade frictions. There's all of Southeast Asia to think about, and what is really the fastest growing region in the

world. So it's not all bad news.

ASHER: So how pivotal is the outcome of what happens with these protests, just in terms of whether this Extradition Bill ends up being withdrawn

completely, or if it's still on the table? How pivotal is the outcome of all of that to Hong Kong's economic success in the next few years?

JOSEPH: Well, the Extradition Bill itself was and is pivotal. It really was the red line as far as the business community was concerned.

The fact that the government has pulled it off was a huge relief. I mean, pulled it away from happening, that was a sign of big relief for the

business community. Most of us just want to get on with it now. There's no real sense that it's going to reappear.

What is worrying to the business community is the fact that the words "withdrawn" or "dropped" weren't used. That still keeps the risk radar up.

But overall, there is still a huge sense of relief that that bill is not actually going to happen.

ASHER: So at this point, though, just in terms of specifics, in terms of what's happening now, are we seeing people actually pulling their money out

of Hong Kong? I mean, what can you tell me in terms of actual sentiment, beyond the sentiment of real actions on the ground, in terms of people

being nervous?

JOSEPH: People might be a little bit nervous. It is never nice to have protests in the streets where you go to work. But to be honest, people are

not actively pulling their money out.

At the height of the protests before the bill was pulled back, we started to see fund flows actively move out of Hong Kong towards Singapore. That

has actually stopped, at least the momentum of that has stopped and people are thinking about getting back to business.

If you take American companies, just on their own in Hong Kong, there are 1,400 American companies operating on the ground here, employing about

100,000 people.

Many of those companies use Hong Kong as their corporate headquarters for all of Asia. There's still a lot of opportunity here. And while the

protests aren't pleasant and aren't nice, what people would like to see is a stable government that communicates well, so that everyone can get back

to work. That's what is of utmost importance.

ASHER: So Tara, what about small businesses? Small businesses that are on the ground there that you know, are in the midst of it as roads have been

blocked, because of the protests, how are small businesses taking a hit in all of this?

JOSEPH: To be honest, is not that much of a hit. Remember, this is a city that saw the Umbrella Movement just several years ago that blocked roads

right in the central business district for several months. People got used to working around those protests. And once you get out of some of the main

areas, life generally feels like it's moving normally.

So people are aware of what's going on, concerned about what's happening, but if you look in the daylight today, people generally went back to work

as if it were a normal day.

ASHER: All right, just showing that sort of Hong Kong resilience. Tara Joseph live for us there. Thank you.

JOSEPH: Exactly, that's what it is.

[09:15:10] ASHER: I appreciate that. All right, so these are the stories making headlines around the world. The body of a stowaway actually

plummeted to Earth as a Kenya Airways flight made its final approach to Heathrow Airport in London. Police believe the man fell from the landing

gear compartment as the plane lowered its wheels. The victim landed in a garden, narrowly missing a sunbather.

And testing is being carried out for possible Sarin exposure at a Facebook Mail facility in California. The results are due in the next few hours.

Officials said that to employees might have been exposed to the nerve agent. They are still at the facility and being monitored, but they're not

showing any signs of exposure.

And Democratic presidential candidates Kamala Harris and Elizabeth Warren have actually made steep gains after the first 2020 presidential debate.

That's according to a new CNN poll. It says that the former Vice President Joe Biden's lead of the field has now shrunk to five points.

All right. Stay with us on FIRST MOVE. We'll have plenty more ahead including fueling their special relationship, OPEC's event with cooperation

with Russia, but can it really take on the might of U.S. shale?

And we're going to be speaking exclusively to Airbnb's Head of Global Policy about some of the criticism of the how the site is changing our

world. That's next.

(COMMERCIAL BREAK)

ASHER: Welcome back to FIRST MOVE live from the New York Stock Exchange. It is still looking at this point about 10 minutes to go until the markets

open. It still looks like a mostly flat open for U.S. stocks this session. At best, it seems to be taking a breather after yesterday's rally, which by

the way propelled the S&P 500 to record highs again.

Chip stocks were big winners yesterday. But they're set to give back most of those gains, well, some of those gains today, rather.

Semiconductor stocks rose on the hopes that sales to Chinese tech giant, Huawei can resume as part of the trade truce. President Trump said Monday

that U.S. officials have already resumed that trade negotiations with China.

[09:20:11] ASHER: Greg Valliere joins us live now. He is the Chief U.S. Policy Strategist at AGF Investments. So, Greg, thank you so much for

being with us. So there is a lot of serious division within the White House now about President Trump's handling of China trade talks about the

trade truce happening so quickly.

And also the fact that the President was sort of a lot easier on Huawei than some people had been anticipating. There are rumors that Peter

Navarro, senior adviser might be on his way out.

GREG VALLIERE, CHIEF U.S. POLICY STRATEGIST AT AGF INVESTMENTS: Well, you're right, Zain, good morning. I think that this is always a sidebar

for this administration, who's up who's down. And I do think that Peter Navarro, the very hawkish trade adviser didn't have his advice listened to

by the President over the last weekend. The same they also apply to John Bolton with Korea.

So these two famous hawks -- Bolton and Navarro -- I think have to be considering whether they want to stay.

ASHER: And also on top of what's happening with China, the markets are also jittery right now, with this sort of tit-for-tat trade war that could

be about to erupt with Europe as well. Just walk us through that.

VALLIERE: Yes, this is one that's been simmering for a while and it begins with subsidies for Airbus, which Trump doesn't like. The U.S. is talking

about some new tariffs.

Trump has infamously proclaimed that he is the tariff man. So I think for any perceived flaw of a U.S. ally, tariffs are an option. And I do think

there's a growing chance we're about to get into a tariff fight with Western Europe.

ASHER: But it wouldn't actually go into effect right away. The WTO needs to rule on it first. Am I correct in saying that?

VALLIERE: Yes, but Trump can unilaterally impose tariffs and it's not necessarily just a fight involving Airbus. There are many products,

European cheese, wine, all sorts of things they could be hit in a tariff war that might erupt later this summer.

ASHER: So Europe though would have, I mean, I'll ask you the question, would Europe have the most to lose in this trade war given that they export

more goods to the U.S. than the other way around?

VALLIERE: Yes, probably they would. Trump lately has shown a pattern of talking very tough, a very bellicose rhetoric, and then backing down,

saying, "Well, now we're going to negotiate."

So the same could apply to Western Europe. But this will be in the news, I guarantee you for the next few weeks -- the threat of tariffs between the

U.S. and Europe.

ASHER: How do you go from just in terms of the U.S. trade war with China - - just walk us through how we go from negotiating with China, the trade truce with China to actually signing a trade deal, and then on top of that

reversing the tariff between the U.S. and China that have already been put in place? Walk us from A to B.

VALLIERE: Well, that's the question, isn't it? I think, you know, Trump said that talks have already resumed. We will see. He's also said there's

only 10 percent to go. Of course, those are the toughest 10 percent of all.

But I think the talks will drag well into the fall, a long debate over Huawei, over the subsidization of state-owned Chinese companies, the

Chinese thievery of our intellectual property, and maybe most importantly, whether they can be a mechanism to enforce a deal. So I think this will

drag on for many more months.

Frankly, I don't think Trump is in any rush, Zain, because if this drags on for a while, it keeps the Federal Reserve accommodated. It increases the

chance we could get more rate cuts until we get this fight resolved.

ASHER: And speaking of rate cuts, I mean, everyone is expecting a rate cut in July. But speaking of the rate cuts that are imminent, I mean, what are

you expecting? Twenty five basis points? Fifty basis points? Walk us through your thoughts.

VALLIERE: I think 50 is really unrealistic. I think the Fed has to save its ammunition. They've only got a certain number of bullets available.

So I think 25 since the markets are counting on 25, at the end of this month, that's a pretty good bet.

Beyond that, we'll see what the economic statistics look like. If we're still growing it two percent, two and a quarter, nothing to write home

about. But if the economy is still growing, I think the Fed may go a little bit slower than the markets are anticipating.

ASHER: And nothing on the immediate horizon could threaten the 25 basis points, and then if we get a stellar jobs report, that's not going to

threaten that.

VALLIERE: Well, I mean, if jobs come out this Friday at 240,000, you know, perhaps it could threaten it, but I think the overwhelming bet is that we

get a move at the end of this month, and then the Fed sits back and sees just how weak or strong the economy is.

But again, as long as the China trade fight persists, it does increase the chances of Fed rate cuts, which makes me think Trump is in no rush.

ASHER: And when you look at this week, I mean, you know, everybody has been talking today about the imminent trade war with Europe and that's why

stocks are pulling back ever so slightly, but it's also a shortened week here in Wall Street. You've got for our international viewers, July 4th on

Thursday, the markets are closed. Also a half day on Wednesday. So there's probably some money that isn't being put into the markets right now

as people sort of sit on their hands and wait for the holiday week to pass as well.

[09:25:28] VALLIERE: Well, I think that's right. And I think within the next couple of weeks, we'll see how earnings look. Earnings have been a

little soft in the last quarter or so. We'll see how earnings look this quarter, but I'm still in the camp, that a recession is not imminent. As

long as that still seems to be the likely scenario, I think the market can drift a little higher.

ASHER: All right, Greg Valliere from AGF Investments. Thank you so much.

VALLIERE: You bet. Thanks.

ASHER: Stay with us, you guys at home on FIRST MOVE. We will have the market open here in Wall Street next. It's happening in about five minutes

from now. Don't go away.

(COMMERCIAL BREAK)

[09:30:00] ASHER: All right, we've just been watching the tail end there of the opening bell. Welcome back to FIRST MOVE. I am Zain Asher. Let's

take a look and see how the numbers are doing. Pretty much a flat start to the trading day despite the trade truce between the U.S. and China that

went into effect on Saturday. This threat of a new trade spat between the E.U. and the United States has made markets a little bit jittery.

You also have to remember that it is a shortened week here in Wall Street at the New York Stock Exchange. The markets are going to be closed on

Thursday and they also have a half day on Wednesday. So there is some money sitting on the sidelines as well. There you have it.

Dow is down about a third of one percent. The S&P 500 which was by the way at record highs yesterday is down most half of a percent.

And investors will be listening closely the speeches from two Fed officials today. There will be first comments from Fed members since the U.S.-China

trade truce announcement and a weak reading on U.S. factory activity that was released yesterday.

All right. Let's talk about the global movers. Right now, shares of AB InBev are flat. The beer giant announced plans to spin off its Asia-

Pacific business and list it in Hong Kong hoping to raise almost $10 billion. That would be the largest global IPO so far this year, even

bigger than Uber's. You see there, Anheuser-Busch pretty much almost exactly flat.

Tesla shares up about half of one percent or rather one tenth of one percent. Investors are awaiting the company's second quarter delivery

numbers. Some analysts believe it will be a new record that would mean 91,000 cars delivered. Also today reports say the head of Tesla's European

operations have left the company as well.

Roku shares are down two and a third percent. The maker of streaming devices was downgraded today. RBC Capital market shares have risen almost

200 percent this year. RBC says the stock has risen too far too fast.

And Nordstrom shares that down about one and a half percent. UBS downgraded the retailing giant from sell to neutral. It says the company's

competitive position has weakened.

And OPEC is making its cooperation with Russia and other partners more formal. The cartel of oil-producing countries has agreed in principle in a

charter with non-member producers despite objections from Iran.

They also agreed to extend oil supply cuts by nine months. It appears investors have already priced the cuts in. Brent crude is trading lower

just down ever so slightly, but still up almost $65.00 a barrel.

Let's bring in John Defterios who joins us in Vienna. So John, walk us through this because -- just talk to us about the internal politics within

OPEC. You've got Saudi Arabia siding with Russia, you've also got Iran sort of very unhappily -- unhappy about that. Just talk to us about the

internal politics.

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, we had a lot of resistance from Iran, Zain, to the whole process here, not about the

nine-month extension which actually stabilize the market because it gives predictability. But this concept that there's going to be a charter going

forward led by Saudi Arabia and Russia and all 24 members.

Iran thought it was going to bring the "in" to the influence of OPEC. It's a founding member back in 1960 along with Saudi Arabia, so it had those

concerns. They were addressed. They have to be signed off by national parliaments going forward.

But at the end of the day, OPEC will still have the voice and the right to continue to put forward its policy and get the support from its non-OPEC

counterparts.

But the Iranians are in a box right now because their exports have dropped by two and a half million barrels a day over the last year. It's costing

them $50 billion a year. So it was the last stance by Bijan Zangeneh, the Petroleum Minister and he told me whether it's the IAEA or here at Vienna

headquarters in OPEC, they are going to resist the sanctions by the United States, no matter the cost that they're seeing today. Let's take a listen

to the interview I did last night, right after the meeting broke.

(BEGIN VIDEO CLIP)

BIJAN NAMDAR ZANGENEH, IRANIAN PETROLEUM MINISTER: We agreed. We emphasized the mechanism of decision making and the OPEC as OPEC is in

place and this new regulation has no negative impact on these issues.

DEFTERIOS: You're suffering a lot right now. You're losing up to $50 billion dollars in export revenues today. Can the Iranian people really

stand by you, as you've seen that lost revenue, and with the United States perhaps pushing for a regime change, what's going on?

[09:35:05] ZANGENEH: They cannot change the regime, if they could, now, I am not here. They cannot change. Forty years they are trying to change

the regime, but they cannot do that and this situation they cannot do. I'm sure. I recommend them not to go ahead in this way.

DEFTERIOS: How do you get the sanctions lifted against you then, to take the pressure off? Do you see the sanctions getting lifted at all?

ZANGENEH: This is pressure on us. But it doesn't mean that we will accept the pressure. Under pressure, we start to negotiate with United States.

If the United States was to change the situation, I believe they should leave the sanction. And then, as I told today, several times they will

witness many changes in the environment.

(END VIDEO CLIP)

DEFTERIOS: So you can hear that the Gulf is extremely wide between the United States and Iran. I would add Saudi Arabia to that as well. I just

got done speaking to Khalid Al-Falih, the Minister of Energy for Saudi Arabia in an exclusive interview we have for "Quest Means Business" later,

he said the Iranians know what they need to do outside of the oil business right now to get those sanctions lifted, and that's the encroachment into

other territories, particularly in Arab states.

He has some fascinating things to say about the security in the Straits of Hormuz, and the role of the Gulf community protecting oil supplies coming

out of the strait as well. It can't be just the United States, Saudi Arabia in the UAE is his view. We'll have more of that later. Back to you

Zain.

ASHER: All right, John Defterios live for us there in Vienna, thank you so much. And one of the key factors that OPEC has to deal with is complicated

geopolitics, such as the fact that two OPEC members, Iran and Saudi Arabia are complete rivals. There's also a competition in the energy sector

between the Saudis and the United States otherwise political allies.

Let's bring in Kevin Book. He is the Managing Director at ClearView Energy Partners. He joins us live now from Washington. So Kevin, thank you so

much for being with us. So this collaboration between OPEC, non-OPEC members, Saudi Arabia and Russia, it's an attempt, of course, to balance

the market, when you have the United States pumping out 12 million barrels of oil a day. How does that complicate things for OPEC going forward?

KEVIN BOOK, MANAGING DIRECTOR, CLEARVIEW ENERGY PARTNERS: Well, the problem is one of supply and demand, right? So when you look at the demand

side of the story, it is weakening. It is weakening not just because of China, but because of also, as your previous guest mentioned, E.U. trade

tensions in the air.

Generally speaking, that that weak demand environment creates the context for rapid production growth in the U.S. to undercut OPEC's market power.

So they really do need Russia principally, but also the other cooperating parties, many of them very small in their cooperation to come together and

try to offset the significant growth. Really a million barrels per day, outstripping essentially the demand growth right now based on global supply

trends. But tight probably going into the third quarter, which creates separate risks of its own. High prices can be OPEC's enemy also.

ASHER: But the division within OPEC is a problem, of course. I mean, having Saudi Arabia, Russia working together and having Iran so upset about

that that certainly has to cause problems for the group.

BOOK: Oh, yes, Zain, on the world stage having Prince Mohammad bin Salman with Vladimir Putin in Osaka and have a decision taken, you know, outside

of the auspices of the OPEC meeting in Vienna, essentially, for the whole world to see, Iran wasn't at all happy about that, particularly when they

can't capitalize on the value retentive result of constraining supply through the action.

So that this was their chance to play the spoiler. But in the end, you know, stability helps Iran, too. Even gray market barrels benefit from a

higher price.

ASHER: So all of this comes at an interesting time for Iran, because they are continuing to renege on their JCPOA obligations, we're seeing the

headlines of them continuing to enrich uranium. They want to be allowed -- for their oil to be allowed to be exported again? A lot of people are

saying this is a negotiating strategy by Iran. But is it a smart one, do you think?

BOOK: Well, they're taking a big risk, and part of the problem is that I think that not just Iran, but also the market is probably over counting

American patients.

There's political seasons here in the United States, where tolerance for risk tends to diminish. Among other things, we're also expecting that all

is going to go well, you know, the Gulf between the U.S. and Iran may be wide, but the Strait of Hormuz is extremely narrow.

And so there's plenty of room for shipping accidents to happen, not necessarily as a deliberate result of malfeasance, but simply because it's

a tight space. Add to that the fact that Iran is looking for subcritical sort of asymmetrical actions to try to poke not just the U.S., but also

Europe and you have a potent brew for geopolitical risk that could go awry.

ASHER: So let's talk about oil prices. Right now, they are hovering around $65.00 a barrel, not too hot, not too cold. But when you think

about production cuts, another nine months of production cuts, where do you see oil prices going, especially when you consider U.S. supply?

BOOK: Well, so we're looking at some brief seasonal tightness basically before the U.S. supply gets unleashed with uncorking of the Permian Basin

in the fourth quarter of 2019.

So we're probably going to see probably a $65.00 to $70.00 range is our expectation for the balance of 2019. But going into 2020, probably closer

to $60.00 to $65.00 falling a little bit essentially from where we are right now, because of that U.S. supply coming on to the open water and

again, doing it in a context where demand remains somewhat weaker than expected.

ASHER: All right, Kevin Book, Managing Director at ClearView Energy Partners, thank you so much for your insight. Appreciate that.

All right, coming up here on FIRST MOVE, the Lionesses are up against the tournament favorite. It's England versus the United States on July 4th

week by the way. We will be live in Lyon ahead of the semifinals, next.

(COMMERCIAL BREAK)

ASHER: All right, so England is one match away from reaching the first ever Women's World Cup Final. Although tonight, in the French city of

Lyon, they face defending champions, and competition favorite, United States.

The tournament continues to smash viewing records around the globe and Nike says demand for the U.S. women's team jersey has actually outstripped sales

of any previous football shirt on its website in a single season.

Let's bring in Amanda Davies who is in Lyon for us. So, Amanda, my question to you is who is going to win this? This is an amazing matchup

because you have England versus the United States playing on the week of July 4th here in America. Obviously, the United States, world champions

but they face a strong opponent in the Lionesses, don't they?

AMANDA DAVIES, CNN WORLD SPORT: They absolutely do, Zain. There are big games and then there's this and you know, all bets are off. I could

pretend to be neutral, but I'm not really sure.

There is very much point you have to enjoy these moments particularly as an England fan in England in a World Cup Semifinal is pretty special, but it

is the biggest game for both of these sides in the tournament up to this point.

The USA are definitely the favorites as you said, the defending champions. Then there's the England side hoping to get to the final for the first

time.

[09:45:07] DAVIES: The firepower across this pitch has been Megan Rapinoe who started for the USA in the last two games. But you wonder if this

might be Alex Morgan's moment.

She is back here in Lyon, where she is actually used to winning. When she played here in 2016, she helped them to a treble of trophies and on Sunday,

we saw her inside the stadium having a wander around on the pitch barefoot on her own very much taking it all in and she has got the added incentive

today. It is her 30th birthday. And she's going head to head with her teammate Rapinoe for the tournament's top scorer award.

(BEGIN VIDEO CLIP)

ALEX MORGAN, U.S. WOMEN's NATIONAL SOCCER TEAM: My goal is to help this team win a World Cup so as long as the goals continue to come, then I'm

happy and that's not goals continuing to come from me, but that's this team and right now, Megan Rapinoe has put this team on her back from Spain to

France and it's going to take players like that and a couple of individuals each game to step up and really help carry this team, and Pino has done

that in great fashion in the last few games.

(END VIDEO CLIP)

DAVIES: Zain, England has their own star aiming for the Golden Boot award in Ellen White who has also scored five goals so far this tournament.

Their boss, Phil Neville told me there's no doubt the USA are still the benchmark for the rest in terms of the women's game. But despite their

underdog tag, he made it clear to me that his side are confident.

(BEGIN VIDEO CLIP)

PHIL NEVILLE, MANAGER, ENGLAND WOMEN'S NATIONAL SOCCER TEAM: Life is about winning. Nobody cares about the loser, and we are going to go for it. The

one promise I always say before games to my players, we are -- we are going to go for it. And if we're going to die, we're going to die trying.

(END VIDEO CLIP)

DAVIES: Zain, I know you mentioned those record TV audiences. We've had them in the U.K. for the games up to this point, because the games have

been taking place in the evening, but I'm really fascinated to know how many people in the U.S. are actually going to work today because the game

is kicking off mid-afternoon and fans have been given a little help from a couple of their players, Kelley O'Hara and Allie Long.

They've drafted a note to give to their bosses where it says, "Surprise. Us again. Do you want to be boss of the year? You're a stone cold lock if

you could give them Tuesday July, the 2nd off."

As you said, also America's birthday week. They say it is the right thing to do. You've got a feel for any boss, Zain, who got given that letter,

how can you refuse that?

ASHER: I agree with them. It is the right thing to do. Amanda Davies, we shall see who wins. Thank you so much. Appreciate that.

All right to India now, as the summer heat swells, millions of people in rural areas are still left without electricity. The startup Frontier

Market is aiming to change that bringing clean energy to households and employing women along the way. John Defterios has this report.

(BEGIN VIDEO CLIP)

DEFTERIOS (voice over): Savitri is on her way to her first appointment. She is a solar saheli, a solar product sales woman recruited by company,

Frontier Market.

Her customers are some of the millions who live off-grid in rural Rajasthan.

(BEGIN VIDEO CLIP)

SAVITRI, SOLAR SAHELI (through translator): It's extremely difficult to live without electricity. When I visit these homes, women tell me that

during the summer, power cuts happen often. Solar powered products make life much easier.

(END VIDEO CLIP)

DEFTERIOS (voice over): Founder Ajaita Shah solar saheli project has been a key success driver.

(BEGIN VIDEO CLIP)

AJAITA SHAH, CEO, FRONTIER MARKETS: Today, our 3000 solar sahelis are actually addressing over half a million households needs when it comes to

clean energy challenges. They're not only communicating the benefits of clean energy, but they're actually now helping us understand what are the

next new innovations that are required to bring in for that rural household to help bridge the gap when it comes to their life challenges.

(END VIDEO CLIP)

DEFTERIOS (voice over): At their headquarters in Jaipur, Frontier Markets manufactures a wide range of solar goods locally. After eight years of

hard work, marrying their products with job creation has finally turned into profits.

(BEGIN VIDEO CLIP)

SHAH: The day that people are chasing the rural customer because they want to give them products and services and they're happily living in that

village without having to move to an urban slum is the day that you've achieved success.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[09:51:54] ASHER: Welcome back. Airbnb has had a dramatic impact on tourism helping find affordable holiday accommodations. Airbnb now

estimates users made a direct contribution of $100 billion in 2018. The firm has faced criticism. Here is our Alison Kosik with more speaking with

their Head of Global Policy.

(BEGIN VIDEOTAPE)

CHRIS LEHANE: HEAD OF GLOBAL POLICY, AIRBNB: What it really shows is that well, our travelers are global. We're in 100,000 cities, 191 countries,

they've really spend locally and the report that we're releasing documents, $100 billion of economic impact in roughly the 30 countries that we took a

look at. And obviously that's a pretty significant number.

But when you look behind that number, what is that speaking to? It is speaking to our travelers who spend money at local coffee shops. They

spend money at family-owned restaurants. They're spending money at local boutiques.

And so ultimately, what we're really talking about here is whether Airbnb is driving a healthy form of travel, tourism and travel that's local,

that's authentic, and that's unique.

And so while this is a pretty significant number that speaks to the economic impact that we're directly having, in these 30 countries, that

actually is having a real impact on real people in an everyday way.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: So are you saying that Airbnb is actually enhancing communities?

LEHANE: Yes, well, you know, I think there's been a big question when you think about travel and tourism. Historically, travel has been dominated by

major corporations, oftentimes pulling the money out of the communities.

The way the Airbnb model works, its people to people travel, and we like to talk about the fact that it's a healthy form of travel and tourism.

Ultimately, the money is staying at the local level, 97 percent of the money that a host list their home for stays with that host; 40 percent of

the spending that a guest spends when they travel actually stays in the very community in which they are resting their head in an Airbnb home.

KOSIK: Well, of course, there are critics who've done their own analyses on some showing that Airbnb actually hurts local residents by raising

housing costs because of the reduced supply of housing as we see property shift from serving local residents to serving Airbnb travelers, which in

turn hurt -- once again hurts local residents because of these rising housing costs, what do you have to say to that?

LEHANE: First of all, I think if you take an objective look at the data out there, it really does not show that. Airbnb is not having a material

impact on housing.

In fact, if you actually look at the data, over half of our hosts, the people who are making their homes available, actually depend on the

economics that they're generating from hosting an Airbnb, to be able to stay in their homes, to be able to address their basic costs.

Now, over the last couple years, we have committed really working with governments and communities all over the world and have put in place more

than 500 regulatory partnerships. Sometimes they're tax partnerships. Sometimes they're full-on regulatory partnerships.

But ultimately, we do fundamentally believe that we have a responsibility to work with local governments to making sure that the Airbnb platform is

working as well as possible for as many people as possible.

KOSIK: What about Airbnb paying its fair share in taxes. Some critics are saying that Airbnb lodging leads to less reliable tax payments to cities.

One study finding that voluntary agreements that Airbnb has struck with state and local governments undermines tax fairness, tax transparency, and

the rule of law.

[09:55:15] LEHANE: I think this is a great example of where we have really sought to work with local governments. Back in 2015, we actually gave a

speech at the U.S. Conference of Mayors where I stood up and said something that probably no private sector entity has ever said before, which is,

"Read my lips, we want to pay our taxes."

We actually created a tool because Airbnb does not have the legal authority to bill and collect and remit taxes unless we're given that authority by

the relevant government. We created something called a Voluntary Collection Agreement where governments do give us the authority to collect.

Since then, we've collected over a billion dollars in taxes. Here in the United States, over 60 percent of the markets that Airbnb is in is covered

by those Voluntary Collection Agreements. And they're generating an enormous economics for communities on an ongoing basis.

It's a commitment that we made. It's a commitment that we've made good on, and as a commitment, we're going to continue to work on.

(END VIDEOTAPE)

ASHER: That's it for FIRST MOVE. Thanks for watching.

(COMMERCIAL BREAK)

[10:00:00]

END