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First Move with Julia Chatterley
The U.K. Prime Minister Hunting For Support Ahead Of Saturday's Crucial Vote; Saudi Arabia's Mega Aramco IPOs Delayed Once More; Mick Mulvaney's Admitting A Ukrainian Quid Pro Quo, Then Clarifying That Fact Later. Aired 9-10a ET
Aired October 18, 2019 - 09:00 ET
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[09:00:10]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from London, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Boris's Burden: The U.K. Prime Minister hunting for support ahead of Saturday's crucial vote.
On, off, or on hold. Saudi Arabia's mega Aramco IPOs delayed once more.
And Mick Mulvaney's believe it or not. The White House aid admitting a Ukrainian quid pro quo, then clarifying that fact later.
It's finally Friday. Let's make a move.
Hello and welcome once again to FIRST MOVE. We're coming to you live from London where it's the calm before the potential super Saturday storm when
Parliament votes on Boris's Brexit deal. Boris's burden as I mentioned there to rustle up enough votes between then and now.
Ahead of that, European stocks pretty much treading water this Friday. U.S. stock futures also pretty much are what we're seeing right now -
pretty much unchanged as you can see there at this hour, too.
That said, we are currently up around one percent across the U.S. majors this week in aggregate. After a pretty rocky start to the month, stocks
firmly in the green for October. Earnings season so far has provided few surprises. Though admittedly, as we discussed earlier this week, bank
results were mixed.
However, take a look at Morgan Stanley. They reported their best Q3 revenues in a decade yesterday, thanks to strength in trading and advisory
services.
Something else also that caught my eye yesterday, the Feds' Beige Book out Thursday showing the U.S. economy growing at only a quote, "slight to
modest pace" with some real weakness seen in retail.
Now that seems to track with the latest estimates that show U.S. GDP growth at only 1.8 percent pace and I say only, but watch the consumer related
stocks this earnings season were very sensitive about the consumer. So looking for any further signs of weakness there.
China though, provided the big economic story overnight posting a weaker than expected six percent annual rise in GDP or growth in the third quarter
leading the Shanghai Composite to fall some 1.3 percent in Friday's session.
Now weakening growth is one thing, but perhaps the biggie here for investors is that China seems unwilling or perhaps even unable to launch a
bigger stimulus package to help support the economy.
Let's get to the drivers because that's where we're going to start. Economic growth in China falling to its lowest level in nearly three
decades, thanks in part to trade tensions, of course, with the United States.
GDP growing at six percent in the last quarter -- that's according to official figures. As I've mentioned, the weakest quarterly growth since
1992.
David Culver joins us now from Hong Kong. Fine, David, it's the weakest growth since 1992. But oh, boy, the size of the Chinese economy is
multiple times bigger over those few decades.
So context here, perhaps everything, talk us through the numbers.
DAVID CULVER, CNN CORRESPONDENT: Oh, and they would echo that, Julia. In fact, if you look at state media, and we've been monitoring how they're
portraying is they're spinning this with a headline that essentially says, over the past three quarters, so they combine them, they average them.
China has grown 6.2 percent GDP. So that's how they're portraying this as a positive. They say it suggests that there's consistency and stability
within the economy here.
They also say when you compare it to the rest of the world economies, well, perhaps its high speed movement that they have seen when it comes to
growth. They said, you know, you look back at Chinese growth over the past several years and perhaps it medium to high speed. But still they say it's
growing at a great rate here.
As you point out, this is happening amidst the U.S.-China trade war and economist that I've spoken with over the past 48 hours, they suggest that
there could be this slowdown in growth for China over the next several months to come because when you look at the benefits of phase one, it
perhaps only leans towards the U.S. side of things - that is to say, China, maybe getting a relief and tariffs from going from 25 to 30 percent that
you and I have been talking about, but they're still staying at that 25 percent. So it's not going below that.
Whereas the U.S., as President Trump has been touting is going to get some $40 billion to $50 billion worth of agricultural purchases. So the real
benefit is for the U.S., according to economists, and so that's not likely to really help China going forward in the next few months.
CHATTERLEY: So many great points in there, David, a couple that I'll pull out here. One, state TV over there may be saying one thing. I can tell
you that plenty of analysts here are going there is no way Chinese growth is at six percent right now, it is significantly less and that's one of the
fears here.
CULVER: Right.
[09:05:00]
CHATTERLEY: But to your point, too, we're also talking about the fear that even if China is talking about be making big agricultural purchases as part
of phase one of this trade deal, in order to do that they want to see tariffs removed and there's a real fear here that the White House does not
intend to do that because they want to keep that leverage. And that's a real fear here over the next few weeks of negotiations.
CULVER: Absolutely, yes. So it's sitting that that 25 percent and that's the current tariffs. But as you point out, there's more that's expected to
come, too.
We still have in December, another 15 percent on consumer goods that President Trump has not ruled out for going into effect. And over here,
you're also dealing with crises beyond the immediacy of the economy.
So if you look at the pork crisis, for example, that's something that has been really contributing to a lot of the issues and consumer competence
here is another one.
I talked to folks in Mainland China and that there is a hesitation when it comes to buying big ticket items. So you're starting to see that amongst
everyday folks who are starting to restrain some of their spending, and that's only going to factor into more concern going forward.
CHATTERLEY: Yes, such a great point here and of course, protests on the doorstep over in Hong Kong, too. Plenty of challenges right now. David,
fantastic to have you with us. David Culver there.
All right, let's move on to our next driver does Boris Johnson have the numbers are not? That's the big question. Everyone in Westminster is
pondering and haggling to get the new Brexit deal through is in full swing.
Members of Parliament will vote on it tomorrow, so-called Super Saturday. Nic Robertson is in Downing Street and following this for us. I'll ask the
question straight to you, Nic. Does he have the numbers or not? Because right now it seems incredibly tight.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It does. Downing Street say that they're confident Boris Johnson is going through some of
the possibles one by one. We just saw one quite hard line Brexiteer go in and he said he had some concerns, but he was going to talk to the Prime
Minister and decide what to do Saturday and this seems to be the area of appeal for the Prime Minister -- one to those hard liners in his own party
who never backed Theresa Mays deals.
The second option is the dip into those 21 former Conservatives because he chucked them out of the party for not voting the way he wanted them to last
time, to appeal to them and then there's an indication that some of those more moderate Conservatives or former Conservatives rather now Independents
may come across there. Certainly, some indications of some of them going that way.
And then of course there's the Labour MPs, some of those -- a tiny, tiny handful five -- did back Theresa May's deal last time it was voted on that
he should be able to get them in the bag this time, but he needs more.
There's a pool of a perhaps as many as 20 Labour MPs, he could be hoping to cast around them with to see if he can convince them. The reason that he
will be able to talk to them over, generally speaking, and a lot of this becomes personal, but because their constituencies voted heavily to leave
and it would be in their sort of best interest therefore to back this particular deal.
But, no, it is not in the bag. It really isn't clear at the moment. And some of the indications are that it may slip between his fingers between
now and tomorrow.
CHATTERLEY: Let's talk about the aftermath of that and assume perhaps that this Brexit deal doesn't pass. There were sort of talk, rumors yesterday
that Jean-Claude Juncker perhaps suggested that an extension here would not be considered or given by the E.U. Angela Merkel said today look, it would
probably be inevitable if they didn't manage to get this deal through.
What do we think on that part, too? Because there are those that suggest refusing that extension would be a way to force U.K. Parliament to make a
choice here, no deal or this deal?
ROBERTSON: Sure. And that's I think, the way Boris Johnson we can expect him to present it tomorrow -- this deal or no deal, which is what he has
threatened, despite the fact that he is obligated by law to ask for a three-month extension.
So it was quite surprising we heard back from Jean-Claude Juncker yesterday, and certainly something Boris Johnson wanted. He would have
been happy if they've been stronger.
We also heard from Donald Tusk, of course, the European Commission President indicating that you know that he was more open minded towards an
extension. And I think there were a number of other E.U. leaders who have really indicated, look, if this is what happens, then yes, we're going to
be -- we're willing to give an extension.
So I think the impression is that if it's needed, and it's asked for, it's there, but there may be a bit of legwork to convince some of the E.U.
leaders that it's worth having.
CHATTERLEY: Yes, well, it's going to be an interesting day tomorrow. Nic Robertson, thank you so much for that there.
All right. Let's move on to our next driver. On Thursday, President Trump's Acting Chief of Staff implied that there may have been a quid pro
quo in the decision to freeze U.S. aid Ukraine. This undercuts the White House's defense that there were no strings attached to that foreign aid.
Mulvaney later clarified that there was never any condition attached to the flow of aid.
Lauren Fox joins us now. Lauren, plenty of eyebrows I think raised in astonishment watching this exchange between Mike Mulvaney and the reporter,
talk us through it because this cuts to the heart of the Impeachment Inquiry going on right now.
[09:10:22]
LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER: Well, that's exactly right. Up here on Capitol Hill, Democrats have been trying to connect
those dots basically arguing that they don't need a quid pro quo to move forward with an impeachment. But that obviously that would be very
problematic if they had evidence that one occurred.
Then Mick Mulvaney had this press conference yesterday, and he essentially said that they were tying foreign aid to trying to investigate what
happened in 2016. Now that's different than the underlying issue that Democrats have been investigating whether or not this military aid was tied
to an investigation into Joe Biden's son, Hunter Biden.
But it is still a discussion about trading U.S. military aid that was appropriated by congressional appropriators with an investigation that you
want a country to pursue and that you're going to hold up this money unless they do what you ask. Of course, that's very problematic to Democrats.
And there were even a couple of Republicans who voiced concern about that. Lisa Murkowski said it was problematic and troubling that if this actually
occurred, what Mick Mulvaney was saying, of course, Mick Mulvaney backtracked with that statement right afterward, but a big problem for
Republicans and Democrats alike.
CHATTERLEY: But you make a great point here, Lauren, I do think we need to make the distinction, the idea that if you're concerned about corruption,
you withhold foreign aid. But if it is ultimately withholding foreign aid, because you want a foreign government to dig dirt or investigate a
political rival, then that's a very different thing.
FOX: Absolutely. And I think, you know, what I have looked into over the past couple of weeks as we've gotten into this Impeachment Inquiry is what
did congressional appropriators know about why this money was withheld?
And every congressional appropriator that I have talked to on both sides of the aisle said, they had seen the green light was ready to go, the money
from the Defense Department was ready to go. The money from the State Department was ready to go. And then all of a sudden, nothing happened.
And then at the end of August, it became very clear that there was a problem here. And so I think that that is one of the issues is that
congressional lawmakers are saying, hey, this was a problem. We didn't know why this money was being held up. Obviously, Mick Mulvaney's
conference yesterday added some light to that -- Julia.
CHATTERLEY: Lauren, fantastic to have you with us. Lauren Fox there. All right, let's bring you up to speed now with some of the stories making
headlines around the world.
Fighting appears to be ongoing in Ras al-Ain, a key border town in Northeast Syria, despite the U.S. brokered ceasefire. The Syrian
Democratic Forces say the situation inside of the hospital there is quote, "catastrophic" with ambulances targeted. It's not clear if the city is
within the safe zone.
President Trump is praising the ceasefire, but Turkey's Foreign Minister is insisting it's just a pause in the operation. Jomana Karadsheh joins us
now from Ankara in Turkey.
So, 120-hour or five-day ceasefire Jomana, but questions, if it's even holding at this stage. Talk us through the implications, because what does
this mean for the Kurds who have now effectively been given five days to leave?
JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Well, look, Julia, we're getting different reports. We're getting reports from around the
town of Ras al-Ain and inside Ras al-Ain, the Syrian Democratic Forces that is the mainly Kurdish fighting force there reporting that there's been
shelling, that there's been an air strike, that there are a number of casualties, and they are blaming Turkey for these attacks.
And on the other hand, you've got the Turkish President a short time ago coming out and denying that there's been any sort of significant clash
saying, This is disinformation.
This was always going to be a very complicated ceasefire, a very fragile ceasefire, as we can see from the history of ceasefires in Syria, Julia,
they're very difficult to monitor when you don't have a neutral force on the ground that is monitoring and enforcing these ceasefires.
So it's very difficult for us to really verify what is going on, on the ground right now. But we also heard from President Erdogan saying that
they are going ahead with this agreement that they have paused their military operation until Tuesday night, and he is saying that they are
waiting for the United States to deliver on their promises that the YPG - these Kurdish Syrian fighters will withdraw from the entire area of the
safe zone that Turkey wants. That 444-kilometer long and 32 to 35 kilometers deep inside Syria zone.
He says there's no exception. They need to withdraw from all these areas and if the United States Does not deliver that by Tuesday night, President
Erdogan is warning that this operation will resume and with even greater resolve, he says.
[09:15:10]
CHATTERLEY: Tuesday is also an interesting day for another reason, it is when the Turkish President is set to meet his Russian counterpart in Sochi,
too, and those talks expected to talk about the size of the buffer zone that we're talking about hereto. Talk about what may come of those talks,
too, because clearly Russia here, a key player in what we're seeing here and what comes afterwards.
KARADSHEH: And the Turkish President also mentioned that today saying that his meetings with President Putin are going to be also another phase of
this agreement, of this deal of what is going to take place on the ground.
And we've been saying this all along, Julia, the United States can have these agreements, they can claim credit for this ceasefire, but the reality
on the ground is that after these five days or what how happens even after that beyond this pause in the operation, what happens next, who is going to
control these different areas?
The United States is going to have very little say in that. It is going to be decided by Turkey and its other ally, the one that really has the
leverage right now and really is calling the shots on the ground and that is Russia, the supporter of the Assad regime.
And we've also heard from President Erdogan today, saying that they could basically accept a scenario where the Syrian regime forces will be in
control of different cities inside this safe zone. He says they just want these Kurdish fighters out of these areas -- Julia.
CHATTERLEY: Yes, that's clearly echoing what the critics of this situation is saying is that the United States well and truly left the table here.
Great to have you with us, Jomana, thank you so much for that report there from Ankara.
All right. Let's move on. Former Secretary of Defense James Mattis reacting to President Trump after he called him quote, "the world's most
overrated General," by laughing.
Mattis resigned last year over the President's plan to withdraw troops from Syria. President Trump made the comments that the White House Wednesday.
This was Mattis' response.
(BEGIN VIDEO CLIP)
GENERAL JAMES MATTIS (RET), FORMER U.S. DEFENSE SECRETARY: I'm not just overrated General, I am the greatest, the world's most overrated.
I'm honored to be considered that by Donald Trump because he also called Meryl Streep an overrated actress. So I guess I'm the Meryl Streep of
Generals.
I earned my spurs on the battlefield, Martin, as you pointed out, and Donald Trump earned his spurs in a letter from a doctor, so --
(END VIDEO CLIP)
CHATTERLEY: General James Mattis there. All right, we're going to take a quick break. Still to come on FIRST MOVE. Ready. Steady. No. Saudi
Aramco delays its long awaited IPO once more saying it wants to reassure investors over the September strikes.
And the fight over Bud Light. Two of the world's biggest brewers face off in court. Claims MillerCoors stole beer recipes. We put all the details,
up next. Stay with us.
(COMMERCIAL BREAK)
[09:21:17]
CHATTERLEY: Welcome back to FIRST MOVE, live from London where it is still looking like a pretty flattish open for U.S. stocks despite some market
friendly earnings from Dow components like American Express and Coca-Cola. Well, I call that relatively unchanged.
China though providing the big economic story overnight posting a weaker than expected at six percent annual rise in GDP in the third quarter
according to government statistics leading the Shanghai Composite to fall some 1.3 percent in the session overnight. Let's talk this through.
Chris Watling is the CEO and Chief Market Strategist at Longview Economics and joins us now. Great to have you on the show.
CHRIS WATLING, CEO AND CHIEF MARKET STRATEGIST, LONGVIEW ECONOMICS: Lovely to be here.
CHATTERLEY: What do you make of the Chinese data? They say six percent. Many analysts say it is a lot less than six percent. But it is clearly
slowing.
WATLING: It's clearly slowing. I mean, who knows what the real number is. But I mean, let's call it broadly around six. I think the point is, it is
clearly slowing and Chinese economy is under pressure, there's no two ways about it.
They're trying to de-leverage. They've got the challenges with, of course, the trade war and so on. And the economy has had a lot of pressure. I
think they need more stimulus, really.
CHATTERLEY: And that's the key. I mean, you said they're trying to de- leverage. They're concerned about leverage in the financial sector, in particular, in the shadow banking sector. Where do you find that balance?
Because to your point, they clearly need to stimulate more.
And there's, I think, a real concern out there from investors that they're not going to, to the degree that perhaps they need to here.
WATLING: Yes. Investors are very concerned, because if you think about the sort of big three economic regions of the world -- U.S., Europe and
China -- back in 2016, it was China that did the sort of stimulus heavy lifting. They had the big bazooka of policy that supposedly got the global
economy growing again, and investors are worried that's clearly not coming from China this time.
Having said that, I actually think America is doing the job and Europe is backing them up. But China is clearly under a lot of pressure and it needs
more stimulus.
And as you say, it doesn't want to re-leverage but in a sense, it's almost it's the only way forward for China.
I mean, to us, I say China is -- the theme for China is it is increasingly tapped out.
CHATTERLEY: And then what?
WATLING: Well, which -- you know, it can get away with stimulus whilst the Fed is easing, because you know, the whole world is easing that kind of you
can do that. But as soon as the Fed gets back to tightening, maybe 12 to 18 months' time, if I'm right about economic reacceleration, then the
Chinese economy comes under more pressure, because actually, it's very difficult to ease in China when the Fed is tightening.
CHATTERLEY: Interesting. So what you're saying is actually if the President wanted to ratchet up the pressure on China, then he shouldn't be
arguing or calling for the Federal Reserve to lower rates here, perhaps, it should be asking them to raise it.
WATLING: Well, ironically, that's certainly the case. I mean, I think from a geopolitical point of view, one of the great ways to put pressure on
China would be to raise U.S. interest rates because of that link through the currency, but that doesn't fit of course with where the economy is at.
CHATTERLEY: The silver lining and it's a couch silver lining here perhaps is that when you look at the data and you see it, whether it's the retail
sector, the industrial sector, which feels recessionary in China in particular, when I look at this data, the foreign investment flows, too.
It's an argument for doing some kind of a trade deal and sticking to the terms of it.
Does that give you some degree of comfort in at least phase one of the trade deal here?
WATLING: Yes, it does. I mean, I think both sides want a deal. And many people made that comment, but I think this Chinese data illustrates that
China's economy is weak.
It would suit Xi, I think, to have a deal just to lift the economy a little bit; lift the global industrial sector. It's not the main driving of the
Chinese economy, but it still counts.
And of course, Trump, he wants to get reelected and doing deals is part of that. And he gets the stock market up and it's a nice run into November
next year for him.
CHATTERLEY: Talk about the reflationary call that you just mentioned earlier as well, because we have got Japan recognizing that perhaps they
need to let bond yields rise a bit here. We've got the CB and Europe stimulating as you pointed out as well, stimulus from the Federal Reserve.
What does that mean for investors here and what do they need to be doing in your mind?
[09:25:05]
WATLING: I'm very positive on equities. I think particularly developed market equities. They look great. And I love it when no one likes them.
I think that's terrific.
CHATTERLEY: How is that -- you're probably be getting -- you must be getting some pushback on that?
WATLING: Whenever -- that's good, because positioning your market is one of the most powerful forces, particularly when you add to it liquidity.
And if you look at the trend in the U.S. markets, it is actually trending up. I mean, it really is. You know, we're just off highs. It is a
wonderful trend.
And the Fed is pumping money and it's not just cutting rates. It's not just doing a repo operation. Now, we've got the whole sort of non-QE/QE,
as I like to call it. The 60 billion or whatever it is a month in T-bills.
So there's a ton of liquidity hitting these markets, and they're moving higher and I think is a great place to put your money.
CHATTERLEY: One other big questions we were asking, if I go back three months, six months was whether tech leadership could take over again as one
of the drivers that these markets? And we have seen that shifting back into some of the cyclical stocks, too. So is that a confirmation of the
call that you're suggesting?
WATLING: Yes. Look at the semis. The Philly semis this year up 40 percent.
CHATTERLEY: Semiconductors, very much trade leverage.
WATLING: Yes. Exactly. They're great cyclical trade really, but also a leadership within tech and doing -- NVIDIA of course, everyone's favorite
sort of the millennial stock as they call it. All of these shares are doing super, super well.
So yes, I think tech will lead us into the end of this bull market wherever that is 12, 18, 24 months out. But you know, maybe -- and maybe get a bit
of bounce in financials here, bond yields back up.
But yes, a bit of cyclical, a bit of tech. It's going to be -- it's going to be a great run into yearend. It's the cyclicals really and no one is
talking about it.
CHATTERLEY: No, we're not.
WATLING: No one is mentioning it.
CHATTERLEY: We all seem bearish and yet the market has been rising.
WATLING: We're almost in November.
CHATTERLEY: It's interesting, isn't it? Chris, fantastic to have you with us.
WATLING: Thank you.
CHATTERLEY: Chris Watling there. CEO of Longview Economics.
All right. We're counting down to the market open in the United States for the final time this week. Stay with FIRST MOVE. The opening bell is next.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE. I'm Julia Chatterley. You are looking at the opening bell back in New York. The final opening bell of
the week.
U.S. stocks mostly flat in early trading, a touch to the downside there as you can see from those red arrows. We've got Brexit vote uncertainty
coming this weekend and of course, fresh signs of slowing global growth emanating from China overnight, too.
China posting its weakest quarter of economic growth in some 27 years. Stocks begin today's session though near one month highs. The Dow and the
S&P still only around one percent away from record highs and the NASDAQ is on track for its third straight week of gains.
We are wrapping up our first week of earnings season in the United States, too. Some 70 companies in the S&P 500 have reported results so far.
Eighty percent of those firms have beaten expectations -- good expectation management it seems as always from the Wall Street majors.
Let's take a look at the "Global Movers" right now. Coca-Cola shares are higher. The company's earnings only matching expectations. Revenues
though beat estimates by a narrow margin to be clear, but Coke is raising its full year revenue guidance. Sales of Coke Zero Sugar soda are helping
drive growth. Right now, we've got two shares up some two percent in the early few moments of the session.
What about shares in American Express? They're also higher by some four tenths of -- actually, they've just flipped. Down now four tenths of one
percent. The company's Q3 earnings and revenues beating expectations as card members spend more.
AMEC says business trends are positive and still consistent with a growing economy. Key sign of the consumer there. So American Express saying
things look pretty good for now.
What about shares in E-Trade Financial, up four percent right now. The online brokerage posting quarterly earnings that beat estimates by a full
seven cents a share. The company's CEO says he is open to doing an M&A deal that would boost shareholder value, what we'd hope so.
All right, let's move on and talk Saudi Aramco now. The on again, off again, whatever it is listing of Saudi Aramco is off once more, at least
postponed, let's call it that.
A source telling CNN the oil giant wants to wait until after its third quarterly earnings to launch what will likely be the world's largest ever
public offering. Matt Egan joins us now on the story.
It sounds to me like some people that are putting this deal together want a bit more information if they're waiting for the Q3 earnings. Valuation
concerns anyone, she asks?
MATT EGAN, CNN BUSINESS SENIOR WRITER: Well, that's right, Julia. You know, Saudi Arabia really knows how to build the suspense for an IPO. I
mean, I feel like we've been talking about this deal forever.
And it was actually three years ago that Saudi Arabia first announced plans to list Aramco, which really is the country's crown jewel. And I think
this latest delay does show that there really are significant obstacles when you're talking about a company of this size in this kind of an
industry trying to sell shares to the public.
As you mentioned, Aramco is delaying this -- again, they're delaying and that's because they want to publish those third quarter results. They're
hoping that those numbers will ease concerns from investors about the impact of those unprecedented attacks on Aramco's facilities last month.
You'll recall that, about half of the company's oil production was wiped out. We saw oil prices have their biggest one day spike in a decade, and
then everything kind of calmed down because Aramco quickly got its production back online.
But you know, it does really suggest that there are some worries about the valuation. The Kingdom had been seeking $2 trillion. Analysts and
shareholders were kind of balking at that really large valuation just saying it doesn't really add up.
And so it doesn't seem like they'll be able to get that. But to your point, Julia, this could still be a record setting IPO, even if they sell
just a two percent stake at $1.5 trillion valuation - that would still raise $30 billion. That would eclipse the $25 billion record that was set
years ago by Alibaba.
CHATTERLEY: Yes, it's going to be -- it's going to be fascinating to see what they eventually come up with here, when eventually arrives. But Matt,
you spotted a great story on this and it's something actually quite close to my heart because we spoke to the CEO of ING recently and he said, for
many years now they've been looking at their lending to some of the big oil and gas giants and trying to shift away from it simply because they didn't
want to end up on the wrong side of tighter regulation.
And some environmental groups are urging the banks involved on this deal, not to be involved with it. For that reason, too. Quiet fascinating.
Talk us through the details here.
[09:35:10]
EGAN: You know, it's another obstacle. We think about just oil prices and oil reserves and just the math on an IPO like this. But there's also these
environmental challenges as well. And these environmental groups, including the Sierra Club, they're warning that the Aramco IPO is going to
help destroy the planet.
They sent a letter to some of the leading Wall Street banks, including Bank of America and Goldman Sachs and Citigroup -- the investment banks that are
reportedly bringing Aramco public and they're urging them not to do that.
They're sort of suggesting that there's some hypocrisy here because this Aramco IPO would actually be the biggest capital infusion into fossil fuels
since the Paris Agreement.
And a lot of these Wall Street firms say they support it, so they're suggesting that there is a little bit of a conflict there.
CHATTERLEY: Imagine the millions of dollars of fees one would have to give up by not working on this.
EGAN: Right. Not likely.
CHATTERLEY: Yes. Matt Egan. Thank you so much for that. All right, you're watching FIRST MOVE. We will be right back.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Let's return now to one of our top stories. The vote on Boris Johnson's new Brexit deal - it will take
place in the British Parliament tomorrow. At the moment, it looks like the outcome is too close to call. A potential key ally, Northern Ireland's
Democratic Unionist Party says it will instruct its MPs to reject the deal.
Sources say the Prime Minister it remains optimistic, however. Lord Lamont is former British Chancellor of the Exchequer aka Finance Minister here in
the U.K. and he joins me now. Fantastic to have you with us, sir.
Lord Lamont, can Boris get the votes? What's your sense here?
LORD NORMAN LAMONT, FORMER BRITISH CHANCELLOR OF THE EXCHEQUER: Well, I think it is extremely tight. The government doesn't have a majority even
without -- even with the DUP, you probably wouldn't have a majority. So it will be extremely tight. It will depend on getting some Labour MPs to come
across.
There are quite a number of former Labour MPs, I say former Labour MPs. They have resigned the whip for this reason or that, practically
Independent. He might try to get some of them, but it is going to be extremely close.
CHATTERLEY: The Democratic Unionist Party is scene, even though they're only 10 votes, the scene is quite key for unlocking perhaps some of those
other votes, particularly Labour MPs that perhaps will go look at their on board. We may be remainer ourselves, but our constituents are leavers and
therefore will vote for this.
Do you think he can convince them? Is there anything that he can do to bring them on board between now and the vote tomorrow? There are people
who are suggesting perhaps even throwing money at them here might convince them?
LAMONT: Well, I think that would increase cynicism, it almost would if he just threw money at them. The two things they object to are one, the so-
called border in the Irish Sea. That seems to be an integral part of the deal.
The other thing they object to is the consent mechanism, which they feel really gives Sinn Fein more power than they would like, and it's difficult
to see how the government could give away on that because Ireland and the other E.U. countries are saying no one should have a veto.
CHATTERLEY: Do you think the deal could pass if he can't acquire enough votes by attaching a referendum to it? So we make a referendum based on
this Brexit deal as Brexit. I know it opens huge questions about what the ultimate question would be in that referendum. But do you think it could
pass tomorrow in that form?
LAMONT: I don't think the Prime Minister would do that. Firstly, he is very strongly opposed to a second referendum and a huge part of the
Conservative would regard that as thoroughly dishonorable and immoral thing to do, because you call it a second -- now, with their weasel words, they
call it a confirmatory referendum. A confirmatory one, when it's presumably the sentiment of one answer.
So I think you would not get Conservative support for that. I think that's highly unlikely. I don't think it will happen.
CHATTERLEY: There are those that would argue that's undemocratic. There are others that would argue we finally know what Brexit is now. And we
didn't know in 2016.
Martin Wolf actually wrote an article about this in "The Financial Times" today, and there was some logic there to suggest that it's only right, to
be able to allow the people to vote based on facts and knowledge, particularly if this deal is detrimental to the future of the U.K. economy.
Would you agree with that? It is relevant?
LAMONT: Well, I don't think the deal is detrimental. I wouldn't be supporting Brexit if I thought it was detrimental. But I think this idea
of now we know more about it than we did before. We never have perfect knowledge. Elections have faulted imperfect knowledge.
But when you vote on a single issue referendum, inevitably, there's a degree of imperfection in people's knowledge.
Yes, you know more, but you've had more misleading claims here and misleading claims there. You will never have a perfect state or knowledge,
but it is --
CHATTERLEY: But when you vote in a general election, you make a decision on leadership for the country, for a specific number of years. This is a
generational decision. It's not like a general election. Surely that's not a fair pushback or an argument. This is a far bigger decision than
just voting in a general election.
LAMONT: Look, the whole history of the European Union has been whenever there have been referenda, where the result has gone against integration,
whether it's been in Ireland, whether it's been in Denmark, whether it's been in Holland, it's always, let's have a second referendum.
As Juncker once put it, they must carry on voting until they get it right. That's all this is about, carrying on until you get a different result.
If you are saying we can have a second referendum, and then we'll have a third one if it goes the wrong way.
CHATTERLEY: Best of five.
LAMONT: Yes.
CHATTERLEY: I know. I appreciate that sentiment, too. And of course, a democratic referendum suggested, the U.K. needs to leave the E.U.
You said Boris Johnson won't go for that. He won't allow a second referendum. So if he says fine, he'll go back to what he said before. We
need an election. I need a mandate, a stronger mandate. Jeremy Corbyn perhaps sticks to his line, which has been the whole way through. He
doesn't want a general election. Then what?
LAMONT: Well, I think this is a problem for the government. I suspect that the Labour Party is seeing itself behind in the opinion polls and not
wanting to have an election when the Prime Minister is probably perceived by the country to have done rather a good job on this. They will not want
to hold an election.
And it is not within the Prime Minister's power to force an election because of the new Fixed Term Parliament Act. So that is awkward for the
government. I would think the Labour Party are going to play it long and try to have the election next year in the early spring.
CHATTERLEY: So Boris has to get this deal passed on Saturday or we're in checkmate situation once again.
LAMONT: The government would be in a weak position if it fails to get this passed and can't hold an election. Although, ironically, it would then be
a huge pressure on the Labour Party. This is totally wrong. You frustrate the government from doing what it wants to do on Brexit and you won't have
an election. You've got to do one or the other.
[09:45:11]
CHATTERLEY: Can I just very quickly ask you one final question. You said you don't believe that this is bad for the U.K. economy and you would not
have been pushing for Brexit if you thought it were. How can you be so sure?
LAMONT: Well, one is never certain about everything. Obviously, there's an element of guesswork and hunch about things. But I look at, let's say
Switzerland. Switzerland is far more integrated with the E.U. economy than ours is. Switzerland is also the most prosperous country in Europe.
If Switzerland as a very integrated country, can be very integrated with the E.U. and not a member of the E.U. I don't see why we shouldn't be,
too.
Economic integration and trade happen regardless of political circumstances. I think economists and businessmen place far too much
emphasis on the political framework. Trade happens.
CHATTERLEY: Great to have you with us. Lord Lamont, former Chancellor of the U.K. Great to have you with us.
All right. Brexit is just one of the many challenges for global Finance Ministers as they gather for the IMF and World Bank annual meetings in
Washington. The key phrase at this year's meeting -- synchronized slowdown.
Eleni Giokos is there and following all the action for us. Eleni, certainly got lots to get their teeth into here. What are you hearing so
far?
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Yes, I mean, look, that's the point, right? Synchronized global slowdown. The worst economic growth
rate of three percent since the financial crisis and there's no room for mistakes.
Of course, you've got accommodative monetary policy, which means that if there's a further deterioration in the global growth outlook - that means
what kind of tools can you bring into play when you're already using most of the stimulus that is available? So that's the big red flag.
And of course, the culprits. You're talking about this Brexit. There is optimism that there's going to be a resolution. In fact, we heard that
from the Managing Director, Kristalina Georgieva yesterday saying that she is really hopeful that there's going to be some kind of outcome in the next
couple of days.
But the reality is that the U.K. faces a crisis and that is going to spill over and it already has been spilling over into the rest of the world in
terms of uncertainty.
And the best case scenario here is if there isn't a smooth transition, Julia, you're looking at an impact of between three and five percent being
wiped off the U.K. GDP.
And then of course, the other big thing is the global trade war. And remember, this is now global, it's not just between the U.S. and China.
Naught point eight percent of global GDP is going to be wiped off by 2020 once all of the tariffs are implemented by the end of the year, and we know
that there's a conversation happening, but again, the reality is that it has created so much uncertainty.
And the risk factor here is that you just don't have much room to play with. The G20 Finance Ministers are going to be discussing things later on
today, and remember, when we're talking about a synchronized slowdown, the IMF was says, well, we need to have coordinated action to ensure that we
work together to get out of this situation.
And it comes at a time when people are taking protectionist views and of course, they're becoming isolationists. So I wonder how that's going to go
down.
CHATTERLEY: Yes, just laying out some of the challenges for them. Eleni Giokos, thank you so much for that.
All right, the world of hacking is seen as a crime committed by a keyboard. But after the break, we prove how an old fashioned phone call can do just
as much damage. Stay with us. That's coming up.
(COMMERCIAL BREAK)
[09:50:34]
CHATTERLEY: Welcome back to FIRST MOVE. You would have thought that a tech reporter at CNN might know a thing or two about staying secure online.
Well, we put that to the test by using what's called an ethical hacker to reveal just how exposed we all are.
And I'll tell you what? You wouldn't believe the mischief she caused. Take it away Donie O'Sullivan.
(BEGIN VIDEOTAPE)
RACHEL TOBAC, CO-FOUNDER AND CEO, SOCIALPROOF SECURITY: You want to assume that everything that you put on social media is public. The information
that can be found in places like this can be used to authenticate you with different companies.
I called like pretty much every business that he ever listed that he used on his Twitter, Instagram. I got your current address. I got your
birthday and that's how I also got your phone number.
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: They gave you my phone number?
TOBAC: Yes. So I'm going to be doing these phone calls. I'm going to be actually live hacking. So when I call your phone number, it's going to
display on their caller ID.
TOBAC: This is Donie O'Sullivan. And I can tell you my address, phone number, date of birth, whatever you need to know to verify that that's
really me.
I am on the road right now and I'm having trouble getting access to my internet. But I need to transfer points to my friend for a bridal shower.
Hopefully, you can help me out over the phone. I have all the information.
I have 90,000, is that correct? Oh, they've been transferred. Okay, fantastic.
Are your points gone?
O'SULLIVAN: They're gone.
As you know, I have a flight leaving Vegas.
TOBAC: I'll put you in the middle.
I'm trying to do this like personal essay thing. So can you move me to a middle seat kind of in the back of the plane? I know, you probably don't
get that request a lot. You're in the back of the plane middle seat.
O'SULLIVAN: I had an exit aisle.
TOBAC: Until these companies learn to change their authentication protocols, there are certain things you can do to help protect yourself.
Remove your geolocation tagging. Products that you buy, services that you've purchased help that you try and get online like on Twitter that
you're probably going to want to do privately.
(END VIDEOTAPE)
CHATTERLEY: And turn to CNN Business, "Unhackable" to see more from Donie on this and more stories on privacy laws and data breaches.
There's plenty of useful advice to be found, too. I call that sheepish face, I think. All right. Let's take a quick look at today's "Boardroom
Brief."
Facebook CEO Mark Zuckerberg says it's wrong to ban President Trump from Twitter. It follows calls by Democratic presidential candidate Kamala
Harris to suspend the President from the service. Zuckerberg said, in a democracy, private company shouldn't censor politicians and the news.
Shares of Renault have plunged 12 percent in Paris. The French carmaker told investors to expect weaker sales this year. The warning is raising
fresh concerns about the health of the company after it ousted its second CEO in less than a year.
Shares in French food company, Danone down nearly eight percent of the reported earnings that missed expectations for sales growth.
The world's biggest yogurt maker said cold weather in August hit water sales in Europe and a weak growth in the U.S. and Russia offset a strong
performance in China.
All right, let's turn to the battle over beer. The maker of Budweiser has accused MillerCoors of stealing its recipes.
The brewing fight has turned into a war and now the two are set to meet in court. Clare Sebastian joins me now. It actually dates back to the Super
Bowl ad. Clare, talk us through what the latest iteration of this battle is.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia. I think to understand what this latest twist is you have to look back at where this
all stemmed from. This was an advert by AB InBev, the makers of Bud Light at the Super Bowl, of course, one of the biggest forums for advertising
watched by almost a hundred million people. Take a quick look at that ad.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And that's how you brew it.
UNIDENTIFIED FEMALE: My King, this corn syrup was just delivered.
UNIDENTIFIED MALE: That's not ours. We don't brew Bud Light with corn syrup.
UNIDENTIFIED FEMALE: Miller Lite uses corn syrup.
UNIDENTIFIED MALE: Let us take it to them at once.
(END VIDEO CLIP)
SEBASTIAN: There as you see, Julia, advert implying that Miller Lite and Coors Light use corn syrup in their beer. Bud Light proceeded with that
campaign with billboards and various other TV adverts and in March, they was sued by MillerCoors, the makers of Miller Lite and Coors Light. They
say that they don't have corn syrup in the final product. It is just used in the brewing process.
And they say that this was misleading because it makes consumers think of high fructose corn syrup, which is of course linked to obesity.
So the latest twist in this, Julia, AB InBev has now filed a counterclaim. They say that MillerCoors actually tried to steal the recipe for Bud Light
and another of their beers, Michelob Ultra in the days before and after the Super Bowl.
[09:55:07]
SEBASTIAN: The complaint contains text messages from an employee of MillerCoors, formerly an employee of AB InBev and one of them particular,
just the day after the Super Bowl says, I got a few calls already from Coor folks asking about Bud Light. We must be prepping a retaliation.
So you can see what AB InBev is alleging was behind this. The statement though from MillerCoors today, they say, "MillerCoors respects confidential
information and takes any contrary allegation seriously, but if the ingredients are a secret, why did they spend tens of million dollars
telling the entire world what's in Bud Light? Why are the ingredients printed on Bud Light's packaging in giant letters?"
So they are talking tough. I don't think that statement smacks of an imminent settlement in this -- Julia.
CHATTERLEY: No, I was about to say that statement jumped out at me as well. And yes, harking back to the Super Bowl, I'll add, ouch. Clare
Sebastian, good job. That's a complicated story, too.
All right, that just about wraps up the show. I'm Julia Chatterley. You can listen to our podcast, too, cnn.com/podcast.
But for now, you've been watching FIRST MOVE. Time to go make yours. Have a great Friday.
(COMMERCIAL BREAK)
[10:00:00]
END
