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First Move with Julia Chatterley
All Eyes On The U.K. House Speaker John Bercow As He Decides Whether To Put The Prime Minister's Bill On The Table For A Meaningful Vote; Facebook CEO Mark Zuckerberg Has A Media Blitz Ahead Of His Testimony On Capitol Hill; Boeing Share Price Falls Further After Instant Messages About The 737 MAX Were Revealed. Aired 9-10a ET
Aired October 21, 2019 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:06]
MAX FOSTER, CNN INTERNATIONAL ANCHOR: Live from outside the U.K. Houses of Parliament, I am Max Foster.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: And I'm Eleni Giokos live from the New York Stock Exchange and here's what you need to know.
To vote or not to vote. All eyes on the U.K. House Speaker John Bercow as he decides whether to put the Prime Minister's bill on the table for a
meaningful vote.
Getting out in front, Facebook CEO Mark Zuckerberg has a media blitz ahead of his testimony on Capitol Hill.
And Boeing share price falls further after instant messages about the 737 MAX were revealed.
It's Monday and this is FIRST MOVE.
All right, so a very good morning to you and it's all about the art of the deal this Monday. The British Prime Minister is courting votes to get his
Brexit plan through Parliament.
Meanwhile, a conciliatory tone on the US front is pushing stocks futures higher. President Trump thinks a deal will be signed by mid-November.
China's top negotiator said an end to tensions would be good for both sides.
As you can see, we are sitting in the green this Monday against this backdrop, a number of big names deliver earnings this week -- McDonald's,
Boeing and Amazon are among them.
Now the pound is also the big move on the currency market trading near 1.30 to the U.S. dollar and that's very close to a five-month high. So in
business, they are optimistic.
A no-deal Brexit is off the table, but there remains a lot to be done before the deal is actually sealed. So that's why we begin on our drivers
today, and of course, a very decisive day for Brexit -- Max. The question is, any decision going to be made and we thought it was going to happen
over the weekend, but we're almost like back to square one in a sense.
FOSTER: Yes, no one knows, but the British Prime Minister giving it one more try at least calling for a new vote on his Brexit deal to leave the
E.U., a so-called meaningful vote in the coming hours.
The Speaker of the House of Commons, John Bercow Berkeley will have a lot to say about that. It's his decision ultimately, about whether or not this
vote will take place.
The British government is trying to recover from Saturday's stunning loss here in Parliament, which forced the Prime Minister to seek another Brexit
delay from the E.U.
A short while ago, France's E.U. Minister said Mr. Johnson must give a yes or no on his withdrawal agreement before October 31st. Nic Robertson is
with me. What do you make, first of all about those comments coming from Paris?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, we're hearing from the German Foreign Minister as well. Look, all eyes from Europe are
on Parliament and this is what we've been hearing from a number of Ambassadors and Ministers over the weekend and into today because they feel
Boris Johnson has been given the best deal, but this whole -- the consumption of their time and their attention over Brexit, which is
essentially a British affair, they need clarity from the British and it's up to the British Parliament now to say whether or not they support Boris
Johnson's deal
And this will therefore inform the E.U. leaders how they should decide on this three-month extension for Brexit negotiations that Boris Johnson was
forced to hand over, over the weekend.
FOSTER: The Commons Speaker could say, I don't want this vote coming to the floor again because that's against the rules. He probably will allow
it ultimately, presumably, but then we look at what might be attached to it by Parliament, which Boris Johnson isn't going to like.
ROBERTSON: If he was to allow it to go through and the idea is why he may decide not to, he said at the weekend, it was most irregular, but he may
decide that this was something that was voted on before, so you can't vote on the same thing again.
Or in fact the amendment that was voted on over the weekend that passed said you need to allow time for all the legislation that goes into making
the Brexit deal which is an international treaty into domestic legislation which typically takes a long time, that you cannot have a meaningful vote -
- or the meaningful vote doesn't have relevance until the legislation is done. We need time to do that.
So the amendments that we're talking about here that could be attached to this deal if the Speaker gives the green light are an amendment for the
United Kingdom to remain in the European Union Custom Union, and that came to a 276 to 273 vote earlier in the year, so that's the closest one, so
there's a sentiment that believes maybe that could pass now.
FOSTER: Is it leaving the E.U.?
ROBERTSON: You know, it is in some respects, you're still not saying do you remain inside the European Union's single market? For example, it is
not leaving the E.U. as most Brexiteers on the sort of a hard wing of Boris Johnson's Conservative Party can see Brexit and then there's the issue of
maybe an amendment on a second referendum which would come into play once the deal is agreed, it goes back to the British people.
This is what we've got. You voted in 2016. Does this match up with what you were expecting?
[09:05:12]
FOSTER: Even if he gets everything he wants, Boris Johnson, it is really hard to see how he's got enough time to get everything through as well. I
mean, it's vaguely possible, he has to have a lot of success today. It is crucial here.
ROBERTSON: Totally. They would have to have support on the program motion when the program motion says we need -- we can get all this legislation
done, but we need to speed it up, longer sitting, start earlier, finish later work, through the weekend, and we can deliver all this legislation.
But the counter argument is this needs time. It's very important. We need to go through it line by line. You can't rush it through, and typically to
do this transfer of sort of international treaty to domestic legislation is many, many weeks.
FOSTER: Okay. Nic, thank you very much. This is what we have in store then ahead of us. I'll be back with an update at about half past the hour
speaking with former U.K. Ambassador to the U.S. and to France, Peter Westmacott, but until then, Eleni, back to you.
GIOKOS: All right, thanks so much Max, we will speak to you later.
So now Mark Zuckerberg says that Facebook was caught on its back foot when Russia interfered in the 2016 election. Today, the company will unveil its
latest measures in its battle against foreign actors. Live on U.S. television, the CEO has been defending the decision to allow Donald Trump
to post a video from supporters with false claims about his rival Joe Biden.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Do you feel like you're giving a green light to politicians that -- why lay now?
MARK ZUCKERBERG, CEO, FACEBOOK: No. Look, I believe that it is important for people to be able to hear and see what politicians are saying. I think
that when they do that, that speech will be heavily scrutinized by other journalists by other people.
(END VIDEO CLIP)
GIOKOS: All right, so we've got Hadas Gold joining me now. Look, we know Mark Zuckerberg has been saying he is wanting to defend free speech.
Critics are saying these leading ads are a risk.
So we know that ultimately Facebook doesn't want to be in the business of regulating content. But in the lead up to elections, we've got to hear
some kind of messaging on this front. What are we expecting?
HADAS GOLD, CNN BUSINESS REPORTER: Yes, Mark Zuckerberg is being criticized pretty heavily for this stance of saying, listen, we want to be
hands off. We don't want to be the ones being the arbiters of truth.
And Mark Zuckerberg is essentially saying that the he trusts the public and the media to take on the job of deciding what is true and what is not.
The problem is, of course, that so much of people's information now just comes from Facebook, I mean, in some parts of the world, that is people's
portal to the Internet, and it's really interesting to see these sort of forces coming up against basically -- and Elizabeth Warren actually put out
an ad on Facebook that essentially had misinformation on it. It said Mark Zuckerberg had endorsed Trump. That wasn't true, but she was trying to
make a point that a politician can lie in these Facebook ads.
Now it's one thing for Facebook to say, okay, we don't want to be the ones who are deciding what's true, and what's not. It's another thing for them
to allow these ads to be bought and essentially be promoted across Facebook.
This is a question I think that Mark Zuckerberg will continue to see being posed to him over and over again, because of Facebook's power over our
media, Facebook's power in people's hands every single day as they're going to the polls.
It is a question that they will at some point have to answer. We've seen them do this before. So for example, with misinformation and Russian
interference. Mark Zuckerberg before 2016 saying, oh, there's no way that Facebook could be used to influence elections, then they sort of
backtracked, they go on a bit of an apology tour.
Now we're back with Facebook saying standing strong doing all of these interviews, doing a publicity blitz saying we don't want to be the ones
that are deciding what's true or not.
GIOKOS: Yes. And it's interesting because, you know, we've seen people join parallels to censorship in China, but many people say we shouldn't be
looking at that as an example, because there's a fundamental difference in terms of spreading misinformation and false information during a political
campaign.
Is it going to be really difficult for Facebook to strike that kind of balance in a world where people can say what they want on the platform?
GOLD: I definitely think so especially as Facebook is actually making some moves to try to help people parse through what they see on Facebook, in
addition to Facebook is about to announce, as you said, some measures to work with election interference, including labeling media that is state
controlled.
So this is going to be things like Russia today, other media that are completely controlled by the state government, the idea being that it'll
help people understand better where this information is coming from.
So Facebook is willing to take certain steps on things like that, then the question is, okay, how far are you going to go? Why aren't you going to
label something that's misleading?
I've heard from people say that Facebook is essentially creating two Facebook's; one, where if you pay the ads like a politician, you pay for
ads, have them up, you could say whatever you want, but if you're a regular user, there may be different rules for you.
GIOKOS: All right, Hadas, thank you very much for that update. So now, plane maker Boeing is under pressure once again. Instant messages released
Friday suggest employees knew about problems with the 737 MAX in 2016.
[09:10:06]
GIOKOS: On Sunday, the company expressed regret over the messages. Now we've got Clare Sebastian joining me now. Clare, they are expressing
regret over the messages, but you know, what we really need to hear his regrets over the fact that Boeing knew that there was a problem, a
fundamental problem with the plane. Right?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, that is the core issue, Eleni, and this now, you know, in the eighth month of the grounding of the
737 MAX, the allegation, the question as to whether Boeing knew there were problems with the MCAS software, the anti-stall system that's in question
here didn't act on that knowledge.
So these leaked messages were as test pilots described the MCAS software is egregious. They said it was running rampant. Those really are blow to
Boeing's efforts to push back on this.
But we have a statement from the company that they put out on Sunday. I want to read you a portion of that. They are saying, "It is unfortunate
that this document which was provided earlier this year to government regulators," so they are saying they did give it to regulators. The
F.A.A., of course refutes that, " ... could not be released in a manner which would have allowed for meaningful explanation."
"While we have not been able to speak to Mr. Forkner ..." he is the test pilot, "... directly about his understanding of the document. He has
stated through his attorney that his comments reflected a reaction to a simulated program that was not functioning properly and that was still
undergoing testing."
So Boeing saying the problem was with a simulated program, not with the plane itself. But this does, Eleni, really ramp up pressure on Boeing
management.
They've got earnings out this week. Dennis Muilenburg, the CEO, now stripped of his chairman role is set to testify at the end of the month
before Congress. And of course, the big question is, what does this do to the timeline, to getting the plane reapproved to fly?
GIOKOS: Because this brings up so many issues, right, it is about taking responsibility. It's about consequences, because the world wants to see
consequences with regards to what we saw on the crashes.
And then you've also got the, you know, the shareholder side of things where you've got the share price coming, you know, under a lot of pressure
as well. What do you think the messaging is going to be later this week? And what kind of numbers are we expecting?
SEBASTIAN: Well, they were expected, Eleni, to return to profitability. They posted a big loss in the last quarter taking a $5 billion hit to cover
compensation to the airlines for the grounding of the plane.
But I think as I said, the real question for investors and analysts is the timeline going forward. Boeing has said, it's still targeting approval by
the F.A.A. for the plane to start flying again by the end of this year.
The airlines have pushed out, the American airlines have pushed out flights until January at the earliest. And I think you know, the clear issue is
that the longer the planes remain on the ground, the more expensive this gets, be it customer compensation, bet it the cost of storing the plane.
So Boeing really wants to be able to provide some clarity to investors and analysts about that timeline, but it looks like they might struggle with
that.
GIOKOS: All right, thank you very much for that, Clare Sebastian. All right, so now, let's take a look at stories making headlines around the
world.
U.S. troops in armored vehicles have been pelted with rotten vegetables as they leave Syria. A group of Syrian Kurdish people were filmed shouting
abuse at the convoy as it travels towards Iraq.
Now the troops will be redeployed in Iraq despite President Trump's claim that he is bringing them home.
We've got Jomana Karadsheh joining us now from the Turkish-Syrian border. Great to have you on.
Look, we know that Syrian Kurds have given us a sense that they feel abandoned, that the U.S. is exiting Syria, and basically allowing them, you
know, a change in terms of the power dynamic in that region. Do you think that the pelting of food is symbolic towards what they are feeling right
now?
JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Absolutely, you know, Eleni, you have to just look at these images, you can see and you can feel
the anger of people there in Northeastern Syria are feeling right now.
You know, the United States and its military are not very popular in much of the Middle East. But the Kurds have always been welcoming of the
Americans, whether that was in Iraq or in Syria, they've always been close to the United States. They've always been their reliable ally in this part
of the world.
So you can see now that they feel that they have been left alone. They've been abandoned by the United States, as you mentioned, because it was that
withdrawal of troops from the border area that they say is what paved the ground basically, for that military operation for the Turkish forces to
come in.
So, you know, confronting that the Turkish advance, they felt that they had no choice but to turn to Damascus, to the Syrian regime for their help.
And so you know, a lot of people in that part of Syria, these Syrian Kurds, they feel that they were used by the United States basically, in that fight
against ISIS. They were the ground force. They were the ones on the front lines fighting ISIS.
They say that they have sacrificed more than 11,000 individuals, fighters who lost their lives in that battle and when ISIS was defeated, and we're
talking about territory here, the United States was basically done with them.
But you know, at the same time when you see these images, there were also others circulating on social media of people holding up banners and signs
saying that, you know, they thank the American people. They know that this is not the doing of the American soldiers or the American people, but it is
President Trump, who they blame for this current situation.
[09:15:22]
KARADSHEH: And you know, Eleni, this is not the first time that the Kurds feel abandoned, betrayed by their allies. They say it's happened so many
times over the years. And that is why so many Kurds would remind you now of the saying that they, you know, they would always repeat is that the
only friend they have is the mountains.
GIOKOS: Right, Jomana, thank you very much for that update and your reporting in a critical time at a critical geography. Thank you so much.
So rescue crews now are checking for damage after a tornado swept through Dallas, Texas on Sunday night. No reports of anyone killed or seriously
injured, but a Home Depot got hammered by the storm.
Every family has its ups and downs. The British Royals are no exception. In a new TV interview, Prince Harry acknowledges the relationship between
him and his brother, Prince William has highs and lows, but says that bond will never be broken. Take a listen.
(BEGIN VIDEO CLIP)
PRINCE HARRY, UNITED KINGDOM: Part of this role and part of this job and this family being under the pressure that it is under, inevitably, you
know, stuff -- stuff happens, but look, we're brothers. We will always be brothers.
We're certainly on different paths at the moment, but I will always be there for him and as I know, he'll always be there for me.
You know, we don't see each other as much as we -- as much as we used to, because we're so busy. But you know, I love him dearly. And you know, the
majority of this stuff is probably -- well, the majority of the stuff is created out of nothing.
But you know, it's just as I said, as brothers, you know, you have good days, you have bad days.
(END VIDEO CLIP)
GIOKOS: Okay, so Prince Harry's statements come on the hills of tabloid reports about a rift between the Royal brothers.
Still coming up on FIRST MOVE, all eyes on the U.K. Parliament as the fate of Boris Johnson's Brexit vote rests on one man.
And stubbing it out. One of the world's biggest tobacco giants looks towards a smoke-free future. I'll be speaking to the CEO of Philip Morris
International, stay with CNN.
(COMMERCIAL BREAK)
[09:20:27]
GIOKOS: Welcome back to FIRST MOVE live from the New York Stock Exchange. I'm Eleni Giokos. Let check in to see how U.S. futures are pointing right
now. In positive territory, and one of the big things of course, U.S.- China trade talks, we know that the U.S. is hopeful to reach a deal soon.
We've also got a big earnings week. Microsoft, Amazon and even Boeing coming out with numbers later on and to discuss the macro economic
environment, I've got Krishna Memani, Vice Chairman of Investments at Invesco joining me now.
Thank you, sir for joining us.
KRISHNA MEMANI, VICE CHAIRMAN OF INVESTMENTS, INVESCO: Thank you.
GIOKOS: It's good to have you on. I was at the IMF-World Bank meetings last week and we've been hearing about worries about a slowdown globally
and the U.S.-China trade talks are in the middle of that. And of course, that's one of the big culprits. How do you see this playing out?
MEMANI: Well, so you know, the slowdown is real and it's global. Having said that, the U.S. economy continues to do okay.
And from a trade perspective, while it has slowed things down, as long as it doesn't get worse, it doesn't get exacerbated, we'll be able to deal
with it because it's a fiscal consolidation. And we know what the magnitude of that consolidation is.
GIOKOS: Yes. I mean, they're talking about $700 billion being wiped off the global economy, but the reality is here, that you've got accommodative
monetary policy globally. The U.S. is embarking on stimulus. Europe is also sitting in a tight spot.
How many tools are there to actually pull us out of any kind of slowdown?
MEMANI: Well, so I think monetary policy is really the only tool that is getting implemented. There are fiscal tools, we talk a lot about it. But
the place where you can implement it the most is probably Europe. And they don't seem to be very willing to do that at the moment.
So it's really about monetary policy. But I think in the U.S. context anyway, that can work. And if we have the tail risk staved off, Brexit
trade deal, then I think all of the easing of financial conditions can actually help.
GIOKOS: So that's very -- that's a big uncertainty for you. Right? Brexit and the negotiations that are currently on the go. Were you hopeful
that things were going to kind of been bedded down over the weekend?
MEMANI: Oh yes. Oh yes.
GIOKOS: Are you disappointed?
MEMANI: Well, so I think things were going to be bedded down because it's politics, and this is probably going to continue. It's the same thing that
is going on in the U.S., Boris Johnson happens to be a better politician so he can come out of it pretty, pretty well, despite having handed you know,
8/10 defeats so far.
GIOKOS: Yes, survival politically, right, but I mean, to the detriment of the economy. But let's also take a look at earnings out of the U.S.
You've got Microsoft, you've got Boeing. And the reality is this is having a bearing on how the markets are going to be doing down the line. You've
got the Dow and you've got the S&P sitting very close to record highs. Are you hopeful that corporates are going to be doing well?
MEMANI: Well, so third quarter is already baked in. So I think the earnings in the third quarter are probably the bottom of the cycle by the
end of this year, and by the first half of next year, because of the easing of financial conditions.
The economic outlook for the U.S. actually is bottoming out and probably looks good. So earnings growth, they're not going to be double digits, but
they can very easily be five to six percent.
And if you have five to six percent from markets, these levels can go up to 3,300 or something like that by end of 2020.
GIOKOS: So we know that market participants want to hear the right messaging from the Federal Reserve. Right? But that does that really
influence demand on the ground? And how do you see those two dynamics playing out? Markets are telling us one thing, economy might be telling us
something else down the line?
MEMANI: Well, so I think what the economy is telling you or what the markets are telling you is that things are bottoming up. And that's an
important message because while we say that monetary policy is not having have any effect, remember, look at 2018 when they were tightening policy.
Things were going really bad.
So it does have an effect. It just doesn't have as much effect as it needs to have in the past.
I think easing of financial conditions is important. Tightening was a mistake and I think that would certainly bottom the economy out and get the
market --
GIOKOS: So certainly, this coming in a different form. You know, you've got the Fed buying Treasuries and you've got, you know, you can play around
with interest rates, but what do you want to see down the line?
Because remember, we've got about $15 trillion worth of bonds globally sitting with negative yields.
MEMANI: So you know, what I -- what ideally I would like to see is not things getting -- not sand being thrown in the wheels here because that's
what the trade deal was or the trade conflict was.
You know, things were going reasonably well. You know, eliminating those things is what we need for the global economy to recover and stabilize.
Unfortunately, every so often, we run to these situations.
GIOKOS: Okay, so very quickly, are you excited about what you will be seeing down the line globally? Do you think there's going to be resolution
and are we going to be able to avoid a global economic slump?
MEMANI: Absolutely. I think we have bottomed out third quarter of this year. When we look back at things in a year's time, this was the bottom
and markets are going higher.
I think they're going modestly higher in 2019, but meaningfully higher in 2020.
[09:25:19]
GIOKOS: Well, that's pretty optimistic, right?
MEMANI: Yes. Four more years, that's our thought.
GIOKOS: Yes. Absolutely. Okay. So emerging markets, it seems that they're the victims of all the stuff that's happening in developed
economies. Are you putting your money into riskier assets right now, where you can find some yields?
MEMANI: So I think emerging market debt from an income standpoint is probably the best asset class at the moment. Emerging market equities,
that's a punt on whether we'll have a trade deal or not. I think we will, and the dollar will weaken and I think the outlook for emerging market
equities has improved meaningfully.
GIOKOS: Okay, so what's your favorite market right now?
MEMANI: My favorite market remains the U.S. because I think the U.S. recovery is pretty much guaranteed.
GIOKOS: But there are no yields here.
MEMANI: Well, so you know --
GIOKOS: It depends where you put your money.
MEMANI: You know, if I guess if you are used to eight percent yield, there's no yield there. But if you're used to negative yields, four
percent is pretty good.
GIOKOS: That's very true. From an emerging market perspective, I mean, China is slowing as well. Is that a big risk? And would you put your
money in China --
MEMANI: Well, so I think China has been slowing for quite some time and that will probably continue. But I don't think it has a catastrophic
outcome. It's actually a very controlled outcome and they have enough tools to kind of manage that path, that downward path, and that's what they
have been doing.
GIOKOS: I have to say, you're a lot more optimistic than a lot of the policymakers that I've been speaking to. Are you just very confident
they're going to be doing the right thing?
MEMANI: Well, I think the risk for the global economy is really things like trade. And policymakers want to ensure that we kind of resolve this
issue and their defensive posture probably helps in that regard.
GIOKOS: I hope so. Because the last time I was here, we had the same problem, still no resolution on China-U.S. trade war.
Thank you for much, sir, for joining us. Much appreciated.
MEMANI: Thank you.
GIOKOS: We are going to a short break. When we come back, the opening bell here in New York. Stay with us.
(COMMERCIAL BREAK)
[09:30:00]
GIOKOS: Trade has officially kicked off here at the New York Stock Exchange. Welcome back to FIRST MOVE. I'm Eleni Giokos. Let's quickly
take a look to see how markets are faring in the first few seconds of trade and all are sitting in positive territory. Dow, S&P and NASDAQ very close
to record highs. And of course, just a few percentage points away.
One thing that's going to be big as market moving numbers, we've got results expected out of McDonald's, Microsoft, Boeing as well as Amazon.
We will be keeping a close watch on those numbers later on this week.
In the meantime, over the pond, the U.K. Parliament is back in session for what seems like yet another decisive week for Brexit and of course we're
expecting a meaningful vote on the Brexit deal later on today.
They are going to be debating this in the coming hours in the House of Commons. We've got Max Foster and his team standing by and covering all of
the developments for us. Max, the meaningful vote, something we thought we were going to see on the weekend, didn't materialize, and a few more steps
that needed to be taken. What's the update?
FOSTER: Well, we're waiting to hear whether or not it even gets onto the floor, because John Bercow, who is the Speaker of the Commons needs to
decide on that. That's the first thing that we're expecting today.
Expected to announce that decision in just the coming hours and some noted it would break with parliamentary convention to have the same question
being put before lawmakers twice in the same session.
But actually, government side saying it's a different question for the one that was actually presented on Saturday.
Meanwhile, the E.U. getting to grips with the letters Mr. Johnson sent on Saturday regarding a Brexit extension, having failed to get his new Brexit
deal approved.
The PM was legally obliged to request the extension, but he hasn't signed on the letters. The E.U. says it doesn't change anything though they are
accepting that letter as an authoritative letter, even though it wasn't signed.
Peter Westmacott joins me, former British Ambassador to the U.S. and to France. Well, you have to also consider whether or not the Europeans will
allow an extension away from the letter. Do you think that that's likely? They need a reason, don't they?
PETER WESTMACOTT, FORMER BRITISH AMBASSADOR TO THE U.S. AND TO FRANCE: Some of them have said they'll be no problem if that's what the British
government really does want. But one or two others, including President Macron, have said that an extension really isn't very helpful.
But that may have been partly because he'd had a phone call from Boris Johnson beforehand.
So I think we don't know, but the likelihood is that if the Prime Minister gets to the point where he wants to take the extension, the one that he has
formally requested, but doesn't really want to have, then I think the others will not stand in his way.
I doubt if the other European heads of government will want to be the reason why it all falls apart by denying the U.K. an extension, if that's
what the PM wants.
FOSTER: John Bercow may block this today that would cause untold damage to the process presumably because there's so little time left, and this is the
only option on the table. I mean, what's your view?
WESTMACOTT: I'm not sure that if he says no to a vote today that it blocks things or does much more damage to it.
But I think what would happen is that later in the week, that this thing would still be out there, and he would, if he allowed it, give the people
who don't like the package, as it stands, the opportunity to vote on some amendments or to suggest some.
And the two most obvious ones we've heard about is introducing again, the idea of a Customs Union and the other one is well, okay, we'll do this if
there's a confirmatory referendum.
Neither of those two amendments would find favor with the Prime Minister. But if the Speaker allows it - that would allow that discussion to continue
a little bit later in the week.
My hunch is the Prime Minister wouldn't accept either, and will probably then say, you know what, in that case, I'll take the three-month extension,
and guess what? You know, what do I know, but guess what? I think I'll hold a general election.
FOSTER: One suggestion as well, he could agree to the Customs Union for example, and the referendum. Win an election and then undo those
decisions, so not go ahead with them.
WESTMACOTT: He could, but that would strike me as an act of, you know, some sort of political insincerity. He is already under a certain amount
of attack for changing his mind and doing one thing one day and something else the next. He could.
But I would have thought it would be more straightforward and in closer keeping with the principles that he spelled out if he said, I'm not going
to have my hands tied in that way, I will go and ask the people in a general election. But we don't know.
FOSTER: We are very up against it then, won't we? If we consider this, effectively this process in one bill effectively enshrining E.U. law into
U.K. law, a mammoth task.
WESTMACOTT: Yes.
FOSTER: And we've only got a matter of weeks.
WESTMACOTT: Exactly. And most people who understand the detail of the legislative process that we have to go through in order to leave the
European Union are saying, you know what, unless you work 20 hours a day, and the Lordships never mind, the Commons might not wish to do that. This
simply can't be done by the 31st October.
The Prime Minister and Michael Gove and others keep saying will be out on the 31st of October. I would assume that even if everything went
swimmingly for the PM, it's going to take at least a few days longer than that to get the various ducks in a row legislatively, so that that can
happen.
FOSTER: In terms of what you expect to happen today then, is there something that will be useful to our viewers or will it be more of the same
in terms of you know, okay, we're making one little step, one little step. At what point do we know what's actually going to unfold at the end of the
month?
WESTMACOTT: I think the main decision we get today is Speaker John Bercow saying at around half past three, whether or not he is going to allow the
vote to be taken that wasn't taken on Saturday, after the passage of the Oliver Letwin amendment.
So the expectation is that he is going to say no because it's too close to the last one.
On the other hand, the last one wasn't voted upon and defeated. It was pulled. So there are arguments both ways. But the buzz around Westminster
just here seems to be that Bercow will say no to a vote today.
And so I think it'll be voted upon with or without amendments, probably in the next couple of days.
FOSTER: Okay, so Peter, thank you very much as ever. Eleni, we're expecting to hear from the Speaker in the next hour. So I think Richard
will be bringing you that.
GIOKOS: Fantastic. Thanks so very much, Max. So we're covering two different protests in two countries and it's all about raising taxes and of
course the economic situation there.
We start off with Chile. Now schools are closed in the capital and the government has extended a state of emergency, a week of violent protests
have lived. At least 10 people dead.
A proposed hike in public transportation fees sparked the angry demonstrations. The President has now suspended the fair increase and the
Senate is expected to hold a special session today to discuss terminating it.
And developments now outside of Lebanon, the embattled government has just announced reforms including slashing the salaries of top politicians. This
after hundreds of thousands of demonstrators gathered for a fourth day, protesting what they see as a corrupt and elitist ruling class.
So Lebanon's economy has been faltering for a while, The Prime Minister says, they'll be no new austerity measures plus a panel to combat
corruption is also being put together to clean up.
Now, the mood is beginning to change in the country. Hither Lebanese people of all ages, backgrounds and religion promise to keep fighting. Ben
Wedeman filed this report.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): It's the drumbeat of revolution banging in Beirut and across Lebanon. For the
fourth straight day, the protest continued, each day bigger than the day before.
The atmosphere is jubilant, but the underlying grievances are real, anger over a faltering economy, official corruption and barely functioning basic
services.
Five-year-old Yoseff (ph) suffers from a hereditary disease. His father, Ibrahim (ph), an ex-soldier, can't find work, can't afford his treatment.
Along with his wife, Fara (ph), they tried to leave the country by boat with Syrian refugees to Turkey.
We paid 8,000, says Ibrahim (ph). We sold our car, my motorbike, hoping he would find something better outside. The boat sank. They barely survived.
We almost drowned when he was eight months old, Ibrahim (ph) says. We risked his life to escape this disgusting country. It's all politics,
sectarianism, theft and looting.
Beyond the specifics of the economy, there is a deep resentment towards Lebanon's political business elite often one and the same.
(BEGIN VIDEO CLIP)
MABEL KHOURY, PROTESTER: They have been taking a lot of money since years to their, here, to their pocket.
YUSRA ITANI, PROTESTER: They are considering us as slaves, as dumb people. They are stealing and stealing and stealing. But at the end, people will
say no.
(END VIDEO CLIP)
WEDEMAN (voice over): For now, the fabric that is Lebanon appears one. The protesters united in anger and outrage at a political system that for
nearly 80 years use sectarian divisions to pull it apart.
The pressure from the street is mounting and in just days has yielded the results.
WEDEMAN (on camera): Repeatedly, the government here is retreating. It scrapped the WhatsApp tax, it promised no more taxes on ordinary citizens,
and it's dropped the idea of an austerity budget. None of those steps, however, has had much impact on these protests.
WEDEMAN (voice over): As the sun sets over Beirut, the streets remain full. This long, suffering country has seen flashes of hope.
Ben Wedeman, CNN, Beirut.
(END VIDEOTAPE)
GIOKOS: All right, there are an estimated one billion smokers in the world and that's according to tobacco giant, Philip Morris International, the CEO
of the company tells me why he wants to everyone to kick the cigarettes habit. Coming up after the break.
(COMMERCIAL BREAK)
[09:43:07]
GIOKOS: The cigarette industry continues to decline according to the latest earnings from the tobacco giant, Philip Morris. The company is
investing heavily in its heated tobacco products. This comes at a time when vaping continues to be linked to serious lung problems.
Philip Morris says its IQOS system burns tobacco at a lower temperature and leads to a 90 to 95 percent reduction in chemicals compared to regular
cigarettes.
In the third quarter, cigarette shipment volumes fell by nearly six percent while sales of heated tobacco units rose by nearly 85 percent.
We've got Andre Calantzopoulos, the CEO of Philip Morris International joining me now and Andre, great to have you with me. Thank you.
ANDRE CALANTZOPOULOS, CEO, PHILIP MORRIS INTERNATIONAL: Thank you for having me.
GIOKOS: Yes, really good to have you. So, I know that you want people to kick the cigarette habit. That's one of the big messages that you're
sending, which is so different to what we've been hearing from tobacco companies for decades and decades.
Is your IQOS system a viable solution for those that don't really want to vape, but yet still want the tobacco experience?
CALANTZOPOULOS: Well, IQOS is designed to convince people who smoke and will otherwise continue to smoke to switch to this product because it
contains tobacco that is heated to low temperatures.
GIOKOS: So it's different to vaping basically. You've got to draw that distinction.
CALANTZOPOULOS: It is different to vaping because it heats tobacco, vaping is a liquid and evaporates a liquid. But the taste and satisfaction of a
tobacco product is much closer to cigarettes although still different.
GIOKOS: So you've got F.D.A. approval which is very different to what we've seen in the vaping industry, but yet, are you then bundled into a
vaping product that has received the bad rap recently because I mean, in the U.S. alone, 1,500 people have been linked to -- deaths have been linked
to vaping.
CALANTZOPOULOS: Well, let's look at things one after the other. There is an authorization of the F.D.A. for IQOS and is the only product that
contains tobacco. This in fact has been through the F.D.A. process.
It is now -- e-vapor products have also to go as of May next year through the same process.
[09:45:10]
CALANTZOPOULOS: And I think there will be some that probably will not pass and others that will eventually be authorized.
Now, as we said, the product is slightly different, but they have one characteristic -- all of them, they don't burn tobacco, so they are smoke
free. And that's where you start seeing the difference in terms of being a better alternative than cigarettes for the people who smoke.
There is a lot of controversy, as we said around the vapor products in the U.S. and you're observing from the outside. I think there is a lot of
confusion.
Sometimes, yes, there are very regretful losses of life and illness related to lungs. But as the investigation by the F.D.A. and the C.D.C. goes on,
we see that they are related much more to the use of oils or the oil use and not the traditional nicotine-containing product.
GIOKOS: I get you.
CALANTZOPOULOS: And we should stop this confusion for the one, you know, for this very many people.
GIOKOS: But when you don't have regulation and policy over these products, you can't eliminate the fact that there might be an issue with all vaping
products and that that's the problem. And you've got 50 percent of Americans that don't trust vaping products at the moment.
CALANTZOPOULOS: Well, first of all, this is an issue because properly manufactured e-vapor products and closed systems so we cannot alter the
temperature or the liquids used -- are better than cigarettes, and I'm sure that the MTA process to the F.D.A. will eventually approve this.
We have to be very careful when we have all these inflammatory trials, you know, titles and conflation because there are more than 12 million people
in the U.S. and many around the world that use vapor products and giving the impression that they are worse than cigarettes or equally bad like the
cigarettes. I think it's a very, very bad thing.
GIOKOS: So I mean, look, Altria deal that fell through. And it happened during the height of the issues with Juul as well. Are you -- are you
almost relieved that the deal didn't happen? Because you would have been on the inside? You were saying you were watching on the outside, but you
would have been on the inside if the deal had happened?
CALANTZOPOULOS: The issue remains the same and it's an important issue to be addressed. As I said, for us, meeting the U.S. or internationally, what
we need from a consumer perspective where people smoke and one billion people smoke, we absolutely need to eliminate confusion because otherwise,
people will stay with cigarettes and what is going to happen to people that got temporarily confused here, they go back to cigarettes, is that the
public health's desire?
GIOKOS: But my question was, I mean, you would have been on the inside and if a deal happened with Altria --
CALANTZOPOULOS: But we are, because --
GIOKOS: Yes, absolutely. But I mean, you would have been a lot closer to it. Do you want the partnership, the deal to happen with Altria and now
you just have a partnership in terms of distribution?
CALANTZOPOULOS: Okay, but you know, as a participant in the new categories, alternatives to cigarettes, we are, a participant in the
category. I think what you said previously is an important point.
All of these products that contain nicotine must be regulated and I think as we go through the process with the F.D.A., clarity will prevail and I
think that will be for the benefit of the people smoke and public health.
GIOKOS: Very quickly, is it difficult to convince the consumer that smoke cigarettes to move to your IQOS system? Because a lot of people, it's a
cultural thing, it's an enjoyment, it's about, you know, having a cigarette with a cup of coffee.
CALANTZOPOULOS: It's not easy. And that's why we've put all the resources we can, shifted the resources from cigarettes completely almost, put
additional money behind, took a very different approach along the consumer journey, but I think we are --
GIOKOS: So you think, I mean, look at this graph, you are a Greek, right? So am I and I know everyone in Greece smokes. Look at that number, high
smoking rates in the world sitting at 43 percent. How do you convince people like that?
CALANTZOPOULOS: Well, actually, IQOS is progressing very well in Greece. If look at the world, we have already close to 13 million people that moved
out of cigarettes and switched to IQOS. In Greece, we're reaching about 10 to 11 percent of total consumption combined cigarettes and IQOS. So I
think that's pretty successful in just a few years.
GIOKOS: Yes.
CALANTZOPOULOS: It is complicated. But you know, the heart and the money is there. So I think we'll continue progressing with this product.
GIOKOS: And you're making more money from IQOS than what you make in cigarettes, yes?
CALANTZOPOULOS: The margins are a bit better. Of course, there is a lot of investment up front. But you know, IQOS for the first three quarters of
the years is $4.1 billion revenue.
GIOKOS: Thank you very, Andre. Much appreciated for your time. What an interesting transition in industry that's been going on for decades.
So coming up on FIRST MOVE next, a meaningful Monday, U.K. Prime Minister Boris Johnson is pushing lawmakers to vote on his Brexit deal, the fate of
which lies on House Speaker John Bercow. Stay with us.
(COMMERCIAL BREAK)
[09:50:51]
GIOKOS: Welcome back. Now here's today's "Boardroom Brief." Halliburton fell short of Wall Street forecast reporting a 32 percent slump in profits
for the third quarter. The company's revenue was hit by weak demand in North America shale drilling, its biggest market.
A weak oil price environment has placed increased pressure on Halliburton and competitors' bottom line.
And to a Brexit of a different kind, Chick-Fil-A has decided to close its first and only outlet in Britain after opening it around 11 days ago. A
mall in Redding, England has decided not to renew its six-month lease following a storm of protests from LGBTQ campaigners which accused the
chain's owners of being anti-gay.
Now back to Brexit developments in the U.K. The Speaker of the House of Commons, John Bercow is set to make a decision on whether lawmakers will
vote on Boris Johnson's Brexit deal.
Max Foster is following it all outside Houses of Parliament in London. Max, I mean the big question is what is going to play out in the next half
hour, I guess?
FOSTER: Well, the House of Commons Speaker set to make his decision in the next hour, but let's assume John Bercow allows the vote to go ahead.
The magic number for Boris Johnson's government 320 MPs to back the deal. That's what he needs it to pass. Foreign Secretary Dominic Raab says they
do have the numbers. But Anna, are you sure? I mean, it's so tight.
ANNA STEWART, CNN REPORTER: It is so tight. And actually last week, I would have said no, I don't think he does have the numbers.
But over the weekend, we had a few developments because we thought it was going to happen on Saturday, so we all got ahead of ourselves.
The Brexiteer -- hardline Brexiteers within the Conservative Party seem to be on board with Boris's deal, but this is crucial. This could take it
over the line.
So we heard from the Chairman of the ERG, the European Research Group, within that party, he said all MPs should back this deal.
Also interesting on Saturday, we did get that amendment vote, but then we looked at some of the Labour voters who voted against the Letwin Amendment,
some who abstained. So I think we can also see it little growth maybe in the Labour rebels who could also back Boris's deal or abstain.
FOSTER: And Letwin when he brought this amendment in, said that now that it has been passed, he will now support the government. So you would
assume that the MPs that he was working with on that amendment are all of the same mind.
STEWART: This is the really interesting thing. We looked at the Letwin vote and we'd be wrong to assume that anyone that voted for it i.e. against
the government would therefore not vote for this deal. It's just not that simple.
Oliver Letwin always said he wants Boris's deal. He just wanted an insurance policy to ensure that no deal was crossed off the list.
Some MPs who backed it just want to frustrate the process and will not vote the deal. So it is nice and complicated.
FOSTER: Anna is going to do a lot of counting in the next hour for you and she'll tell you whether or not it passes or the next day -- or week we're
going to have amendments to break down for you.
This isn't the end of our coverage, of course, watching that House of Commons Speaker, John Bercow and his announcement in the coming hour.
We've got a lot more insight from outside of House of Parliament here in Westminster.
[09:55:00]
FOSTER: Richard will be here with the breakdown with Anna and Bianca -- am I correct? Yes, but for now back to you, Eleni.
GIOKOS: Yes, Max and you've got a full crew there. I mean look, at the end of the day, there was so much optimism leading up to the weekend.
That's changed, but do you think that the door has been shut for a no deal Brexit? Or is there still a risk?
FOSTER: Well, the reality is that the no deal Brexit is still there and that's the default, so all of this, you know, is to find an alternative to
leaving without a deal.
So Boris Johnson is currently heading towards that so the ball very much in Parliament's court.
GIOKOS: Max, thanks so very much. We know how much uncertainty it is creating for global markets. We will be keeping a close watch on that.
In the meantime, U.S. stocks are sitting in positive territory. We are close to record highs, but of course lots of earnings to look out for this
week and that's definitely going to be market moving.
Well, that's it for FIRST MOVE. Thanks very much for watching. I'm Eleni Giokos. "Connect the World" starts right after this short break.
(COMMERCIAL BREAK)
[10:00:00]
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