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First Move with Julia Chatterley
The U.K.'s Opposition Labour Party Now Backing A December General Election; The First FAANG Lacks Bite, Alphabet Earnings Disappoint Investors; Beyond Meat Post Some Juicy Numbers, But The Stock Slumps Premarket.. Aired 9-10a ET
Aired October 29, 2019 - 09:00 ET
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[09:00:12]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Live from London, I'm Julia Chatterley. This is FIRST MOVE and here's your needs know.
Ready, steady, vote. The U.K.'s opposition Labour Party now backing a December general election.
The first FAANG lacks bite. Alphabet earnings disappoint investors.
And not satisfied, Beyond Meat post some juicy numbers, but the stock slumps premarket.
It's Tuesday. Let's make a move.
A warm welcome once again to FIRST MOVE coming to you live from London once again where it seems we can go Beyond Meat, but we just can't get beyond
Brexit.
The latest on Boris Johnson's battle for a general election coming right up. But first Wall Street futures taking a bit of a breather it seems
after a record breaking session; yesterday, the S&P 500 hitting a fresh all-time high.
The NASDAQ also hovering right below record levels. A pause here though, I think makes sense though. If you think about it, the Fed begins its two-
day policy meeting today. We've got a rate cut, almost fully priced. The big question is what does Jay Powell say about the future? If he signals a
pause here in policy, we can expect some disappointment, I think in stocks, particularly.
The Bank of Japan, also meeting this week and it could also decide to hold off on further stimulus, too. We were talking about this yesterday. If a
trade deal between the U.S. and China of some sort is looking ever more likely, then perhaps it makes sense to adopt a wait-and-see strategy here.
Central Banks give you what you need, not necessarily what you want if you're an investor. Earnings season also remains key. Alphabet, as I
mentioned underwhelming last night and we have fellow FAANGs, Facebook and Apple tomorrow.
Now, just take a look at the FAANGs over the past six months. If we exclude Apple, they've been pretty much well, de-FAANG-ed since the spring.
Netflix, as you can see that losing some 24 percent, so have the FAANG's fallen out of favor or do they help create a Santa Claus rally for stocks
into yearend. We'll be discussing that later today.
For now though, does Boris Johnson get his ultimate Christmas wish? Let's get to the drivers. We begin with Brexit.
The U.K. Prime Minister's bid for a December general election has become a very likely prospect; that, after the opposition that Labour Party leader
Jeremy Corbyn said he will back one in a vote in Parliament later today. Nic Robinson joins us on this story.
Nic, the vote yesterday failed. The vote today looking ever more likely particularly if Jeremy Corbyn and the Labour Party are on board. Talk us
through it.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, the vote will be in several hours' time, waiting for the Prime Minister to take his position
at the dispatch box in Parliament to essentially begin the debate.
What we can look forward to during that debate is partially a rerun of yesterday, but because everyone now knows that they're now in election and
campaign mode, you could really expect to hear the manifestos coming out that the Prime Minister will be talking about, the additional 20,000 police
officers, their improvements in National Health Service -- all these sorts of things.
What has happened that is different today to yesterday is that the Leader of the opposition, Jeremy Corbyn, has realized that he was essentially --
and his party was the odd party out; that both the Scottish National Party and the Liberal Democratic Party had decided to side with Boris Johnson in
trying for a December election, and that would have put the Labour Party appearing to be the party that was sort of standing in the way of
democracy.
That was the way that the Prime Minister was casting it. He will be campaigning this election that he is for the people and the Parliament has
been standing in the way of the people.
The things that will emerge during the debate today will probably be a key issue about the date of the election. The government is going for the 12th
of December. Don't be surprised if there's an amendment for the 11th or the 10th, and that the government may go with that.
And there will likely be an amendment tabled by the Scottish National Party to allow voters down to the age of 16 and 17 to be able to get a vote and
European Union citizens living in the U.K. to get a vote as well. That amendment may not be successful, however.
CHATTERLEY: Why does this make a difference, Nic? Because it does come back to the idea of students voting here. The date matters, some
suggestion has been made, that if it is brought a head of that 12th of December date that will allow students still to be at university; therefore
more likely to vote because they're still around and still staying where they're living at this moment, who and why is that so important for which
party?
[09:05:10]
ROBERTSON: Sure, look, it is really important to the Labour Party. They believe that would be a strong student vote for them. The polls, perhaps
not clear on that at the moment, but they could be very valuable in some of those city constituencies that the Labour Party may feel it could slip from
their control.
And if you just move the date, a few days forward, then the students are still on campuses where they're registered to vote, and Labour Party thinks
that that's an important gain for them.
You know, people are talking about needing to campaign where there's very little daylight that some of the polling stations are perhaps not going to
be available because they'll be you know, many of them are often schools. They are being used for Nativity plays that you may end up having sort of
polling stations in caravans. Lighting would be an issue. Heating will be an issue.
And typically, turnouts in the winter months are generally low. And interestingly, the last time there was a December election here was 1923.
It ended up with our own Parliament, and just another note for the electorate on that, there was an election 1922, 1923 and 1924. This may
not be the last one in the next couple of years -- Julia.
CHATTERLEY: Every vote counts. Nic Robertson, thank you so much for that. Okay, we could be about to hear the most damaging testimony yet in the
Trump Impeachment Inquiry.
In a stunning move, an active duty military officer, who currently works in the White House will say he reported concerns about President Trump's
infamous call with the Ukrainian leader.
Suzanne Malveaux is on Capitol Hill. Suzanne, My understanding is this is a serving army officer. He is a Purple Heart awardee, tough to dismiss his
statement today as filled with political bias. What should we expect?
SUZANNE MALVEAUX, CNN U.S. CORRESPONDENT: And Julia, he is also defying the President and the White House's order not to testify, but we do expect
that this White House top expert on Ukraine will be testifying momentarily.
CNN has obtained his bombshell opening statement, which suggests that he rang the alarm bells not once, but twice to his superiors saying that he
had concerns about the President's behavior, the President's inner circle's behavior, saying it was inappropriate regarding Ukraine.
(BEGIN VIDEOTAPE)
MALVEAUX (voice over): In just hours, Lieutenant Colonel Alexander Vindman will appear on Capitol Hill and will tell impeachment investigators he was
so troubled by President Trump's July 25th phone call with Ukraine's President that he reported his concerns to the National Security Council's
lead attorney.
(BEGIN VIDEO CLIP)
REP. RAJA KRISHNAMOORTHI (D-IL): This would be the first White House official who would actually be defying the White House's orders not to
cooperate.
(END VIDEO CLIP)
MALVEAUX (voice over): Vindman, an Army veteran who received the Purple Heart after he was wounded in Iraq is the first White House official to
testify who listened in on the phone call at the center of the Impeachment Inquiry, where President Trump repeatedly pressed the Ukrainian President
to investigate former Vice President Joe Biden and his son.
In his opening statement obtained by CNN, Vindman says he reported his concerns out of a, quote, "sense of duty," adding, "I'm a patriot, and it
is my sacred duty and honor to advance and defend our country irrespective of party or politics."
He also affirms details U.S. diplomat Bill Taylor gave in his testimony about a July 10 meeting with Ukrainian officials, contradicting testimony
by U.S. Ambassador to the EU, Gordon Sondland. Vindman in claims, at that encounter, Sondland again pushed Ukraine on delivering specific
investigations to secure a meeting with Trump.
Vindman, who was at a briefing on the meeting says that after this was brought up, Ambassador Bolton cut the meeting short. At that briefing
afterwards, Vindman told Sondland his statements were inappropriate - that the request to investigate Biden his son had nothing to do with National
Security and that such investigations were not something the N.S.C. was going to get involved in or push.
Vindman also says, the President's former top Russia adviser, Fiona Hill, also told Sondland his comments were inappropriate. They both then
reported the interaction to the N.S.C. lead counsel, but Sondland told investigators the opposite in his October 17 testimony, noting, "If
Ambassador Bolton, Dr. Hill or others harbored any misgivings about the propriety of what we were doing, they never shared those misgivings with
me, then or later."
(BEGIN VIDEO CLIP)
REP. GERRY CONNOLLY (D-VA): What they were seeking was to extort the President of Ukraine in exchange for the resumption of military aid.
(END VIDEO CLIP)
MALVEAUX (voice over): Meanwhile, House Speaker Nancy Pelosi has scheduled the first vote on the Impeachment Inquiry for this Thursday, something
Republicans have been demanding for weeks.
(BEGIN VIDEO CLIP)
REP. ERIC SWALWELL (D-CA): This resolution signals that there will be a public hearing. It signals a shift, where people will start to learn what
is so concerned about the President's conduct.
(END VIDEOTAPE)
[09:10:10]
MALVEAUX: And House Democrats will continue their testimony. The witnesses hearing behind closed doors this week and next week, then they
will open up those hearings to the public before Thanksgiving. And then the hope is House Democrats believe that they may bring a vote for Articles
of Impeachment by Christmas -- Julia.
CHATTERLEY: More understanding of the timetable here. Suzanne Malveaux, thank you very much for that.
All right to Saudi now for our next driver. Wall Street's movers and shakers are gathering in Riyadh for Davos in the Desert hosted by Saudi
Arabia. Last year's event, if you remember, boycotted by many of the big names following the murder of Saudi journalist, Jamal Khashoggi. John
Defterios joins us from there.
Now, John, what a difference a year makes. Saudi really trying here to say we're open for business and all the big investment names there and ready
for action it seems.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: It does seem that way, Julia. Let me just give you a sense of place right now. This is
primetime at the Future Investment Initiative, because they're waiting to hear from the King of Jordan, who is a regular here in Riyadh, every single
year. He will be followed in an hour by Jared Kushner, the White House adviser, the son-in-law of Donald Trump, but I don't want to be too glib
here.
I think you could call it the Banker's Ball of 2019 because that's exactly what we've seen from the very first panel of the day with the CEOs of
Bridgewater and Blackstone, top level people from Goldman Sachs, the CEO of HSBC and more of the same throughout the morning sessions.
We have to emphasize they're paid to be here, if you will because they have mandates either for the IPO of Aramco or the privatizations, so they have
to be here.
Others are still quite shocked by the death of Jamal Khashoggi, no doubt about it. So those in entertainment from Hollywood, Silicon Valley, they
are absent overall. Another strong showing from the Trump administration, beyond Kushner, we have Mnuchin, the Treasury Secretary coming tomorrow;
Rick Perry, the Energy Secretary roaming the halls, but keeping a lower profile, trying to sell the LNG. He is on a panel tomorrow as well.
I think this is the effort to reboot Mohammed bin Salman, the Crown Prince with the support from the United States. But I spoke to the former White
House Communications Director, Anthony Scaramucci of Sky Bridge Capital, and ask him is that the right move by the United States? And can they
revive the efforts here at the initiative, and also the diversification plan for Saudi Arabia? Let's take a listen.
(BEGIN VIDEO CLIP)
ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: I think it's a tragedy, and certainly I would denounce the event that took place as
the Crown Prince did. One of the things that I would be very cautious of as an American, I think, if we step back and look at the historical context
throughout history, I think it's very, very bad judgment particularly as an American business person to insert myself into the internal politics of
other nations.
And it's also very bad judgment to be sanctimonious about it because you know, every nation has had its ups and downs and its calamities in its
history. And there's things unfortunately in the United States that we all regret with historical perspective and hindsight.
So, again, I'm not apologizing for it. I'm not saying that it was anything other than a tragedy, and I clearly denunciate and denounce what happened.
But I'm just saying that we have to step back and look at it in the context of where we are today and pray for progress and pray for peace and
prosperity.
(END VIDEO CLIP)
DEFTERIOS: And, in fact, Scaramucci was suggesting, if you look back at the Saudi Arabia before the Crown Prince, there were no reforms.
Everything got stalled in a lot of corruption.
But right now, there's still a cloud over the Saudi economy, Julia, flat- lining on growth 0.2 percent in 2019 and foreign direct investment is just a quarter of what it was six years ago.
So all the shocks over the last three or four years even linked to the Riyadh arrest of the 400 Saudi businessmen still having an impact, as well
as Jamal Khashoggi.
CHATTERLEY: Yes, it's come with a price. John Defterios tracking the action there in Saudi Arabia for us. Thank you for that. All right, Let's
move on from A to Zed, Alphabet appears to be spreading itself a little too thinly as profits missed expectations by a pretty wide margin.
Google's parent company reporting a $1.5 billion hit from losses on equity investments, too. Its shares right now down at premarket. Clare Sebastian
joins us on this story. Operating costs rising faster than sales here and I pointed out there, loss on equity investments like Uber and Slack, a bit
of a double whammy here in terms of the numbers, Clare?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Ye, Julie, this was a pretty big miss, as you say in terms of profits. They were down 23 percent year-
on-year. This isn't a revenue problem for Google. Their revenue topped $40 billion and that was up 20 percent year-on-year, but as you mentioned,
costs and expenses, they were 25 percent year-on-year.
Now that is of course, the equity investments. They only started including that in their earnings about a year ago. We don't know which, but of
course they are, as you say invested in Uber and Slack and they have been doing pretty badly since their IPO, so it may be to do with that.
[09:15:14]
SEBASTIAN: There was another legal settlement costs related to a case in France about a fiscal fraud. And, you know, generally looking at those
expenses, one particular thing stands out is hiring. They hired six and a half thousand people in this quarter alone. They say a lot of that was to
do with Cloud. They are very much trying to be a competitor in Cloud to try to compete with the likes of Amazon and Microsoft.
So overall, Julia, the big picture here is that we have this now sprawling empire of Alphabet and we're seeing bits of the business starting to kind
of cannibalize other bits of the business in terms of the earnings.
CHATTERLEY: Yes, but I love what you said about the hiring. That was something that leapt out of me, too, that the Cloud revenues look strong
and we have to remember, when we're talking about Alphabet, Google -- the revenue generation here is advertising, and that also looks strong here.
SEBASTIAN: Right. Absolutely. Advertising is about 84 percent of revenue overall. So this is still the giant of the business. And yes, this is not
a business model issue. They saw traffic acquisition costs, which is a big part of the expenses associated with that advertising business. That
ticked down a little bit and the cost of paid clicks were up 18 percent.
So overall, analysts are pretty bullish on this going forward. One interesting thing to note, though, Julia, about Alphabet's earnings is that
we don't really get a lot of clarity beyond these kind of headline numbers. They don't break out YouTube within the other bets, for example, which is
where they do that kind of moonshot things like self-driving cars. They don't break out Waymo.
And again, we don't know which of those equity investments that are the ones dragging down that that $1.5 billion hit that they took. So there is
something of a lack of clarity, and they're also facing the overhang from these regulatory issues, which is something that did come up on the call.
CHATTERLEY: Speaking of the call, and I think I probably know the answer to this question -- Fitbit was soaring in the session yesterday on
speculation Google might be in for a cheeky bid here. Was that mentioned on the call? And did they say anything?
SEBASTIAN: Stunningly, it wasn't, Julia. I was very much expecting that it would be mentioned, but not a not a whisper of it. And actually, Fitbit
stock looks like it's coming down a little bit premarket perhaps that's part of it. But we know that Alphabet, the parent company of Google
continues to invest in all kinds of areas and hardware is one of them.
CHATTERLEY: Yes, well, we're honest anyway, even if no one else is. Clare Sebastian, thank you so much for that.
All right. Let me bring you up to speed now with some of the other stories making headlines around the world.
We are keeping our eyes on events in Lebanon. Prime Minister Saad Hariri is due to give a speech within the next hour. There have been almost two
weeks of protests over the country's ongoing economic crisis. We will bring you the very latest as it happens.
Over to California now, hundreds of thousands of people are fleeing as massive wildfires burn across the state. This is a look at what people are
facing out there at this moment.
This fire broke out in Los Angeles near a high-profile area where many celebrities live. Many of them are leaving while they can.
All right, we're going to take a quick break here on FIRST MOVE, but still to come, investors look beyond the profit as Beyond Meat stock take the
hammering despite strong results and a first quarter profit.
And the Boeing CEO appearing on Capitol Hill to talk about the efforts to bring the 737 MAX jets back to the skies.
All of that to come, stay with CNN.
(COMMERCIAL BREAK)
[09:21:40]
CHATTERLEY: Welcome back to FIRST MOVE where we're in the pause before Powell period as far as markets are concerned. I think U.S. speeches
pretty flattish at this stage. The Fed beginning its two-day policy meeting. It is expected to cut rates again tomorrow, the third time this
year.
Stocks began the trading week though in fine style. Yesterday, the NASDAQ in fact the big gainer, rising over one percent, but it was the S&P 500
that stole the spotlight closing at a fresh all-time high. The NASDAQ actually very close to record territory, too. We will point that out if we
get it.
Earnings though continue to come in from the blue chip heavyweights. Drug giants, Pfizer and Merck, posting solid results premarket. Both firms
raising full-year guidance, too and the stock set to rise when the session begins.
As you can see, that's the trading premarket. Let's talk through what we're seeing here in terms of earnings season. Joining me now is Sameer
Samana, he is the Global Equity and Technical Strategist at the Wells Fargo Investment Institute. Sameer, great to have you on the show with us.
We're approaching the halfway point in earnings season for the third quarter. Your main observation at this stage is the cautiousness around
the outlook here. It makes sense surely given the degree of uncertainty out there.
SAMEER SAMANA, GLOBAL EQUITY AND TECHNICAL STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE: Yes, absolutely. We totally agree. And one
additional thing to point out is that the revisions to a lot of the estimates were very heavily lower before the earning season started. So
it's not surprising to see that you know, north of 80 percent of companies are beating those estimates.
And then you mentioned, you know, the guidance is clearly the most important piece of it all is and unfortunately, there are enough
uncertainties out there that companies are still probably being a little bit cautious and you know, if at some point the trade issue were to re-
escalate, that's probably not in the numbers right now.
So all as well for this earnings season, but guidance is pretty tepid.
CHATTERLEY: Yes, I mean, you've pointed out and we've seen it technology, materials, energy, so far this earnings season two have been some of the
underperformers, but I know you like tech, explain why.
SAMANA: A lot of it has to do with just the secular trends that tech sits in the middle of. I mean, they are driving you know, the boat from the
standpoint of the way consumers are consuming. Businesses continue to spend on technology in terms of streamlining their operations, things like
Internet of Things, autonomous cars.
A lot of those kind of feedback into whether it's the semiconductor companies or the software companies. So we feel like, you know, every once
in a while there probably will be a quarter that maybe just is a little bit disappointing. But the secular growth trends are very much intact.
CHATTERLEY: I mean, these are long -- medium to long term stories that you're talking about. So you have to isolate one quarter perhaps and say
look, fine, as actually the Alphabet CFO did on the earnings call last night. Look, we're not focusing on quarter by quarter. This is the medium
to long term game here.
SAMANA: Yes, in this remark, well, you mentioned that, you know, Google grew revenues at 20 percent. I mean, just the fact that a company that
size is growing the top line at 20 percent, you know, gives them a lot of flexibility in terms of again, how much of that flows through into the
earning side.
Now, again, you know, expenditures are taking up for a company like that, and they are in technology more generally. But just the fact that you've
got a company that large growing that quickly gives them a lot of room to maneuver.
CHATTERLEY: You also say you're neutral on the U.S. large caps, on mid- caps and international markets. Now, if I look at the performance of some of the big international markets over the last few months compared even to
the S&P 500. Admittedly, their base is lower than what we've seen in the United States, but they've dramatically outperformed.
Talk to me about your views on international markets here, and do you not expect the outperformance that we've seen for the last three months to
continue?
[09:25:20]
SAMANA: We don't. A lot of that was driven by the dollar, which probably got a little bit extended. We've been calling for weakness of the dollar
for some time, and we finally got it. And you know, on the international markets, they tend to benefit from that.
But unfortunately, now, the dollar is probably close to the lower end of its trading range. So some of that, you know, tailwind that the
international markets have experienced is probably gone.
You're also starting to get to a point where you've probably gotten to, you know, a place where you've discounted the detente on trade, and the hard
Brexit being taken off the table probably also is discounted in European equity.
So now, the problem is you're back to a lack of catalyst on the international side, whereas at least on the U.S. side, there is still
pretty good growth.
CHATTERLEY: So if we are talking about a lot of the good news actually being in the price, the benefits -- the relative benefits of the dollar
playing out for international markets, is that also a reason to be underweight small cap stocks then here in the United States, too, perhaps.
SAMANA: It is and you know, other things that also act against small caps is at this point in the cycle, as growth is decelerating, economic growth
is decelerating, profit growth is decelerating. Unfortunately, we haven't really seen expectations come down for small caps either which is a little
bit distressing.
So we feel like large caps are kind of the place to be on a relative basis, so we're unfavorable on smalls. We are neutral on large caps, and we're
tilting into some of those sectors where we feel like they can access those pockets of growth like tech, discretionary and financials.
CHATTERLEY: Got it to. Sameer, fantastic to have you on the show. Sameer Samana there, Global Equity and Technical Strategist at the Wells Fargo
Investment Institute.
We are counting down to the market open for the second session this week. Stay with us. More to come. You're watching FIRST MOVE.
(COMMERCIAL BREAK) [09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE. That was the opening bell at the New York Stock Exchange. Crown Castle there ringing at the opening bell.
They can't create a bit of a lift for the markets here with those cheers, a mostly flat open for U.S. stocks as we expected.
The S&P easing back as you can see from record highs hit in the session yesterday. That said, the NASDAQ and the S&P have both risen for four days
straight. The NASDAQ also sitting just below record levels, too.
In the meantime, let's take a look at the 10-year Treasury yield for the United States, too. A little bit softer here, but we did see that yield
hit six-week highs in yesterday's session, too.
Ten-year yields hitting four-month highs today in Japan as well. Australian bond yields also rose sharply raising fresh questions -- we've
been asking this on the show now for a couple of weeks -- have global bond yields hit bottom because even on bad news days, we do see yields rise.
It's an interesting one to watch.
For now let's bring it back to our global stock movers, Alphabet shares as you can see are trading lower. Profits missing estimates. They fell from
23 percent below last year's levels, rising costs hurting the bottom line, but revenues did come in at some $40.5 billion, a little bit higher than
expected naturally, despite the performance premarket losing just shy of one percent here. So a lot less than it might have been.
GM shares also in focus higher by some at 3.6 percent. The auto giant, easily beating Q3 estimates but earnings fell below last year's levels. GM
also lowering its guidance for 2019 due to the just concluded UAW strike. Right now, up some four percent in the session.
Food delivery firm Grub Hub. Wowsers. Losing just shy of 34 percent. The company definitely not delivering in Q3. Revenues were light and its Q4
guidance came in well below estimates due to increased competition from Uber, DoorDash and other delivery firms.
What about Beyond Meat? Well, their shares also tumbling; right now down just shy of 24 percent. The knives are out for the company -- steak knives
perhaps -- despite the fact that it posted its first ever quarterly profit. Beyond Meat also raising its full year guidance.
To tell us what's cooking, Anna Stewart, it's a rare opportunity. We roll the punts here. I trust, we won't be in the studio together. Well,
actually, there was a lot good news. I mean first quarter profits bumped a rise in net revenues. What's the problem here?
ANNA STEWART, CNN REPORTER: They also upgraded the sales outlook and the call was all about these exciting new partnerships with the likes of
McDonald's talking about expanding abroad. There was a lot of good news in this report.
But let's face it, the share price today is not reacting on that. I do think it's to do with the expiry of the lock up. And also we've seen a
repositioning from short sellers in recent weeks already all gearing up towards this.
The fact of the matter is, this was an IPO at $25.00 a share, it rocketed 300 percent and you look at it today, it's still quadruple where it
started. And you've got to question the fundamentals behind the company.
Chat And this is a great point. A lot of good news and this earnings report, a lot of good news already in the price when you're talking about
that kind of rise post IPO. Talk to me about that then. What about the competition here if we're talking about the fundamentals? Because many of
the analysts that look at this say, we love the story, we love the company, but there's a lot of good news in the price here.
STEWART: It's all you trading on the sentiment or on the fundamentals because the sentiment is great. This is a fantastic trend. We see it in
every supermarket and every restaurant frankly, every dinner party you have, you have another vegan at the table. This is something you can
invest in and you want to cash in on it.
However, the barrier to entry is very, very low. So while they've got you know, first takers rights, they've got some fantastic partnerships. There
are lots of rivals, Impossible Meat in the U.S. You've got the vendor here in Europe. You also have Kellogg's, Nestle -- all the big food
manufacturers that have the resources and a big spend to go in on this.
And frankly, what about white label products? White label factories? They could start getting on this too. How long can Beyond Meat retain the fact
that it was first in there and it's got the brand? How long will McDonald's want to put Beyond Meat on their burgers? That's the big
question.
CHATTERLEY: And isn't the future all about hemp seeds, mung beans and crickets apparently, too? Never mind P-protein.
STEWART: It's going to be ground crickets, apparently, it is great protein, Julia. I look forward to sharing our ground cricket bag with you
soon.
CHATTERLEY: Yes, you might have to catch me first. Well done. Anna Stewart, see, well done, yes. Anyway, moving on quick. We're also keeping
an eye on Boeing stocks today. Thank you for that.
The firm's CEO Dennis Muilenburg will testify in the U.S. Senate in the next half an hour. He is set to admit mistakes Boeing made over its 737
MAX aircraft and talk about the efforts the company is making to make it safe to fly again, exactly a year after the Lion Air Flight 610 crashed.
[09:35:18]
CHATTERLEY: Jim Corridore is the Director of Industrials Equity Research at CFRA Research. Jim, great to have you on the show. What do you want to
hear from Dennis Muilenburg today? Contrition is what some are saying. It's not enough to say look, mistakes were made. We're learning from them.
Actually, they want to hear him say once again, the company is sorry.
JIM CORRIDORE, DIRECTOR OF INDUSTRIALS EQUITY RESEARCH, CFRA RESEARCH: Yes, and he is going to say he is story over and over and over again. I
read through his prepared remarks. The most important things are actually facts about the changes to the software system that are going to make the
plane safer.
But over and over in his comments, he is talking about how much regret and how sorry the company is and the changes that they've made to their safety
culture to make the company better. But I'm guaranteeing that's not going to be enough for congressmen. They're going to look to take him to the
woodshed. They're going to look to blame -- assign blame and vent the public's anger out on him.
CHATTERLEY: He has already left the Chairman role behind and that's now been separated. Do you think he is lucky to remain the CEO? Because I'm
sure he's going to get asked, and it's from both sides of the aisle here -- why he should remain the CEO of the company.
CORRIDORE: Yes, I believe his job is hanging on a thread. The plane needs to come back into service soon. It needs to come back into service safely,
and the company needs to be able to convince all its constituents, airline customers, the flying public, investors that it is safe. If this doesn't
come about, he won't have his job for much longer.
CHATTERLEY: You know, it is interesting, I spoke to the Emirates CEO last week and he said to me, he predicts it will be back up in the air - that
the MAX jets in the first half of 2020, and he was one of the first to say look, it's not happening in 2019, and he said to me, he was booed in a room
when he made that comment. What do you think? First half of 2020?
CORRIDORE: Yes.
CHATTERLEY: And that feels like a worst case scenario for Boeing here.
CORRIDORE: Yes, that does, I would expect the plane to be flying in the first quarter of 2020, at the latest, at least in the U.S. I think the FAA
is going to recertify the plane once the certification flight comes up.
The company has made substantial changes to the plane that has made it much safer. They have made it so that the sensors have to agree with each other
instead of one sensor being able to take down the plane, they made it so that if the pilot turns off the MCAS system, that it stays off unless the
pilot reactivates it.
So the situation of events that happened cannot happen again under the new software system. The plane is going to be safer and it will start flying
again early next year, I think.
CHATTERLEY: And you think people will trust it? Consumers will trust it?
CORRIDORE: Yes, I mean, Muilenburg himself has flown two flights on the plane. There's been hundreds of hours of flights flown. There's been
thousands of hours of simulator flights flown.
F.A.A. will come on board eventually, global regulators will eventually approve the plane. There's going to -- it's going to be the most
scrutinized plane in the history of aviation once it is recertified and there will be of course a PR kick to make the flying public believe that
the plane is safe and it will be.
CHATTERLEY: Representative Peter DeFazio who is the Chair of the House Committee on Transportation and Infrastructure said, this all starts on
Wall Street. Investors pressured Boeing to quickly build its fuel efficient 737 Max planes to top European rival Airbus. What do you make of
that? Investor pressure here to do what they did?
CORRIDORE: I disagree wholeheartedly. I believe investors will always pressure firms to raise profits and revenues faster and faster. It's an
executive's job to combat that pressure. Look out for the long term health of a firm and not think on a quarterly basis.
This is why they make the millions of dollars a year. They are in the position to fight back against investor and analyst pressure. Of course,
we're always going to be looking for more and more and more. We expect the companies to do better every year. But it's the CEOs job to make sure that
that plane is safe.
CHATTERLEY: Would you agree that the only reason why there's value in this stock and I know you're a long stock, Jim, and you said this to us since
the beginning, actually, that there's no alternative because the Emirates CEO sort of admitted that to me. There's no alternative. Airbus,
unfortunately has a huge backlog, too. So if you're looking for alternatives here, you're stuck. You have to stick with Boeing. That
saved Boeing here.
CORRIDORE: It is definitely true that there is only two aircraft manufacturers. Boeing is obviously half a share and Airbus is the other
half. There's no alternative. But also they make great planes. They make safe planes.
Boeing is going to say in its comments today that there will be five million people flown today safely every single day without incident. Of
course, these accidents were horrible and the company has made changes to fix it. They are a well-run company that makes very good products, which
is why they are the number one plane maker in the world.
But yes, customers have nowhere else to go. Aerospace demand is going to continue and Boeing is going to continue to sell planes.
CHATTERLEY: A good reminder. Jim, great to have you with us. Jim Corridore at CFRA Research.
CORRIDORE: Thank you, Julia.
[09:40:10]
CHATTERLEY: Thank you for that. Up next, Labour leader Jeremy Corbyn just took us one step closer to a Brexit election -- Brexit related general
election. We will bring you the latest from London. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. It could be four time lucky for the U.K. Prime Minister Boris Johnson who looks set to get the election he
has been pushing for after the opposition Labour Party said it will back his proposal in Parliament.
But my next guest says the vote we need is not a general election, but another Brexit referendum. Hugo Dixon, Deputy Chair of the People's Vote
Campaign joins us now. Here you go. An election is coming, irrespective. Talk me through your views here.
HUGO DIXON, DEPUTY CHAIR, PEOPLE'S VOTE CAMPAIGN: Look, this will be the election of our lifetimes, certainly of my lifetime, and it is going to
determine the country's future and indeed Europe's future for decades to come. Because if Boris Johnson wins the election, then we'll have Brexit
on the terms of his miserable deal that he negotiated with the E.U. a few weeks ago.
If though Johnson loses, then we will have a new Brexit referendum and the people will be able to decide whether they would prefer to stay in the E.U.
or not. And all of the opinion polls I think apart from one, I think cites 73 out of 74 opinion polls this year show that the British people actually
would prefer to stay in the E.U. than leave.
So this is what's at stake -- it is do we get that referendum if Boris loses? Or do we just leave on his terrible sellout deal if he wins?
CHATTERLEY: You're then tactically voting here whether you decide to vote for the Liberal Democrats or the Labour Party or whoever you vote for, all
ends lead to the same conclusion which is a referendum and a decision on some kind of deal versus remaining.
[09:45:10]
DIXON: Well, all roads lead to a referendum provided Boris Johnson doesn't win. If Johnson wins, we don't get a referendum. That's why what we will
be arguing for in this election campaign is vote for the candidate with the best chance of defeating the Conservative in that particular constituency,
that particular region of the United Kingdom.
So in some places, it will be most sensible to vote for the Liberal Democrats. In some places, it will be most sensible to vote for Labour;
and others perhaps the Greens or the SNP in Scotland or Plaid Cymru in Wales. It will vary around the country.
But the key thing is make sure Johnson doesn't win a majority because if he wins the majority, we are leaving the E.U. on a terrible deal. What it
does is it turns Northern Ireland into a colony of the E.U., and it makes the rest of the U.K., Great Britain, which is 98 percent of the population,
far poorer than it otherwise would be, as well as damaging our power on the world stage. So it's a terrible, terrible, terrible deal that Johnson has
started.
CHATTERLEY: We're learning to be skeptical about polls at this stage, but it does look like Boris Johnson could get a majority here.
DIXON: He could. He could. He is -- he is a favorite. Going into this election, he is the favorite. So we are the underdogs. We are going to
have to fight like mad but we've got good arguments. Not only is it the case, but his deal is really, really bad.
But there are the positive arguments of being in the E.U. The most important ones are that we will be more able to fix the key problems at
home if we're not obsessing about Brexit until the cows come home.
CHATTERLEY: We will continue to obsess about Brexit. I do want to stop you there because I believe Jacob Rees-Mogg is speaking in Parliament at
this moment. We're just going to listen in to what he is saying.
JACOB REES-MOGG, LEADER OF THE HOUSE OF COMMONS OF UNITED KINGDOM: ... before the solution to ensure the Northern Ireland Civil Service can access
the funding it needs to deliver public services and proper governance.
The situation facing a number of Northern Ireland departments has become critical, and the bill is needed to allow the Northern Ireland Civil
Service to continue to access the cash needed to deliver public services.
In order to ensure that that bill receives royal assent to allow for dissolution on the 6th of November, and to allow the 25 working days for
the administration with the poll, it needs to proceed quickly.
We have therefore proposed in the business motion that all common stages of the bill happen today. The bill that is before the House is only two
clauses long, so it is a very short bill. It is also simple bill and that it seeks only to set the polling day to 12th of December.
The House should not therefore be disadvantaged by considering all stages of the bill in one day.
Turning to the Honorable Member for both of today's amendment, the government business motion provides for an efficient timetable for the
consideration of this bill, which is a straightforward piece of legislation for an election on the 12th of December.
Of course, the government recognizes that the selection of amendments is a matter for the Speaker or the Chairman of Ways and Means, however, it is
entirely standard practice for this House for amendments not to be taken from backbench MPs on bills as simple as this one where an expedited
timetable is required.
While it may not be a wrecking amendment in itself, there is no doubt that it is a gateway to amendments that could seek to obstruct the bill. The
bill is simply designed to give effect -- to give effect to what all four, all four of the biggest parties in this House have now said they support --
that is the December general election, nothing more and nothing less.
We will have over six weeks -- I will kiosk away for the Honorable Lady.
JOHN BERCOW, SPEAKER, HOUSE OF COMMONS: Helen Goodman.
HELEN GOODMAN, BRITISH MEMBER OF PARLIAMENT, LABOUR PARTY: I am most grateful to the Leader of the House who once upon a time was a champion of
this House, but since he became leader, he seems to be trying to curtail debate on every government bill.
I know he has had a long running if polite dispute with the Speaker. But could you explain to us, Paragraph 3B and why he felt it was necessary to
say the Speaker shall leave the chair whether or not notice of an instruction has been given. The Speaker is never in the chair when we're
in Committee stage. Why does the Leader of the House feel it's necessary to say that this afternoon?
REES-MOGG: Mr. Speaker, the Honorable Lady and I served on the Procedure Committee together and the Honorable Lady must be aware that is completely
standard whenever the Speaker leaves the Chair to go into committee. It has been standard for decades, if not for centuries, there is nothing
unusual in that and if anyone thinks, Mr. Speaker, that in any way it is a dig at you, they simply don't understand the procedures of this House.
[09:50:07]
REES-MOGG: And I notice the Speaker is indicating that he has an accent with what I'm saying. So, I am frankly surprised that the Honorable Lady,
who is a member of the Procedure Committee, isn't aware of that basic procedure.
So it is just a December general election, nothing more, nothing less. There will be six weeks to discuss all of the great political questions
facing our question -- facing our country before the people are given the chance to give their verdict.
But the debate today is not about those great issues. It is simply about setting the 12th of December as the date for general election.
CHATTERLEY: We will leave the Leader of the House of Commons there Jacob Rees-Mogg. Hugo Dixon still with me. You got lost count of the number of
remainer voters in the referendum in 2016 who are so sick of Brexit, they're saying we just want to leave now to get it out of the way, so 30
seconds, the argument for the U.K. remaining in the E.U. from your perspective.
DIXON: Okay, its, first of all, we're more likely to fix the problems at home if we're not obsessing about Brexit, and we have a more healthy
economy that can afford to pay for things.
And secondly, we will be more able to help fix the global problems, things like the climate crisis, if we are working with 27 other like-minded
nations rather than flying solo.
CHATTERLEY: That's it.
HUGO: Yes, you gave me only 30 seconds. How many did I use? Twenty eight?
CHATTERLEY: The U.K. will be okay either way. Can we make that -- can we make that argument, too? The Brits are resilient, they will get on with it
whatever the result.
HUGO: We're going to survive. The question is not whether we survive. The question is whether we thrive and it's also whether our region of the
world, whether Europe thrives and Britain plays a really important role in Europe. And it would be a tragedy not just for Britain, but also Europe.
And I would say the world if we leave the E.U.
So that's why we're fighting. That's what we're fighting every inch of the way, and that's why although we are the underdogs going into this election,
I think we've got a bloody good chance.
CHATTERLEY: There we go. Brave British there. I'll apologize to anyone who thinks that's a swear word. Hugo Dixon, Deputy Chair of the People's
Campaign. Thank you for that.
All right, you're watching FIRST MOVE. We'll be right back.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE with a look at today's "Boardroom Brief." U.S. regulators are planning to further restrict the operations of
Chinese telecom's firm, Huawei and ZTE.
The Federal regulators will vote next month on a proposal to bar companies that receive government money from doing business with the two firms.
We will learn more about the next contender in the streaming wars later when Warner Media hosts an event headlining HBO MAX. The service was a
keystone in AT&T's $85 billion deal for Time Warner, CNN's parent company.
AT&T says it intends to spend around $2 billion on the project over the next two years.
[09:55:06]
CHATTERLEY: All right, that's it for the show. I'm Julia Chatterley. You can listen to our podcast at cnn.com/podcast. But for now, you've been
watching the FIRST MOVE, time to go make yours.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN Breaking News.
BECKY ANDERSON, CNN INTERNATIONAL ANCHOR: Hello and welcome to "Connect the World." I'm Becky Addison coming to you live from a tremendously busy
Beirut in Lebanon where we are tracking some breaking news.
Any minute now we are expecting to hear from the country's Prime Minister, as protests continue to grip this country for a second week.
The embattled Prime Minister has been trying to appease protesters' demands that his entire government resign by announcing this time last week a new
budget that he said would address protesters' concerns after demonstrators had been saying for weeks that this sectarian political oligarchy as they
call him is responsible for endemic state corruption, which is --
[10:00:10]
END
