Return to Transcripts main page
First Move with Julia Chatterley
Alibaba Has A Stellar Debut On The Hong Kong Stock Exchange; Several Google Employees Say They've Been Fired For Trying To Organize Fellow Workers, Google Says It Was For Data Security Violations; Elon Musk Accepts Ford's Apples To Apples Challenge Between The F-150 And The Cyber Truck. Aired 9-10a ET
Aired November 26, 2019 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:21]
ALISON, CNN INTERNATIONAL ANCHOR: Live from the New York Stock Exchange, I'm Alison Kosik and here's what you need to know.
The Baba bounce. Alibaba has a stellar debut on the Hong Kong Stock Exchange.
Breaking up a union? Several Google employees say they've been fired for trying to organize fellow workers. Google says it was for data security
violations.
And bring it on. Elon Musk accepts Ford's apples to apples challenge between the F-150 and the Cyber Truck.
It's Tuesday and this is FIRST MOVE.
Welcome to FIRST MOVE. Great to have you with us. Let's begin with a quick check of the markets and it's looking like a flat to modestly higher
open for U.S. stocks after a record close for all the major indices on Monday.
Stocks rallied amid a flurry of multibillion dollar M&A deals and new signs of progress in the U.S.-China trade negotiations.
And there are fresh trade developments today, China says top negotiators held a new round of talks on the phone and resolved core issues.
Fed Chair Jay Powell said in his speech late Monday that trade uncertainties continue to pressure economic growth. He said, the U.S.
Central Bank is committed to hitting its two percent inflation target which suggests the Fed is in no rush to raise interest rates anytime soon.
And it's a mostly flat day of trading over in Europe today as well. Asian stocks, they finished mixed, the Hang Seng finishing modestly lower. That
said, shares of Alibaba rallied over six percent on their first day of Hong Kong trading. It is the largest new listing on the global markets this
year, and Alibaba splashy debut is our main driver today.
(BEGIN VIDEO CLIP)
CROWD: Three, two, one, yes.
(END VIDEO CLIP)
KOSIK: That was the festive scene in Hong Kong as Alibaba officials celebrated that massive listing. The stock sale raised more than $11
billion for the Chinese internet giant.
Sherisse Pham is live for us in Hong Kong with the latest. This is quite a feat here and that's because this is a significant listing because of
what's going on in the Hong Kong market. All of the unrest that's lasted for months.
But walk us through why this is significant that Alibaba took this step at this moment.
SHERISSE PHAM, CNN BUSINESS REPORTER: Hugely significant step, Alison. The secondary listing was highly anticipated, reportedly supposed to happen
in August, and then obviously, these massive protest, these ongoing months of political unrest probably changed things a little bit for the company,
right?
They did push through. They wanted to get this - the secondary listing in before the end of the year, and here they are. They're squeaking it in in
November and they're squeaking it in in a very splashy wave.
This is a secondary listing that could raise up to as much as $12.9 billion if they tap into an overall allotment there that will make it the largest
public debut of the year.
And of course, yes, Alibaba does trade in New York. It's been trading there since 2014 when they had another blockbuster IPO, right? They still
hold the record for the world's largest IPO overall.
But Alibaba's first choice was Hong Kong. This was where they wanted to list in the first place. It is closer to home. It would be closer to
investors and customers who use Alibaba service and could understand the company.
And so CEO Daniel Zhang saying today that this listing, the secondary listing in Hong Kong is a little bit of a homecoming. Have a listen to
what he had to say.
(BEGIN VIDEO CLIP)
DANIEL ZHANG, CEO, ALIBABA (through translator): Because of the innovation in Hong Kong in the past few years and the reform of Hong Kong's capital
market, we fulfilled what we missed out on five years ago. We had done what we said five years ago that if it was allowed, Hong Kong, we would
come back.
(END VIDEO CLIP)
PHAM: And so it is allowed, right? Now, they're allowed to have a dual class listing share and they are here. They are joining the likes of
Meituan and Xiaomi -- other big Chinese tech companies that have IPO'd here in Hong Kong.
And this is also a big win for Beijing, because Alibaba is a tech darling. It is a crown jewel. China doesn't want to be known as the world's factory
anymore. Alibaba plays a huge role in that.
[09:05:08]
PHAM: And also, like we said at the top there, a really big boost of confidence to Hong Kong and the financial markets here, because we have
seen months and months of political protests and political unrest.
And not only a strong listing from a high-profile company like Alibaba, but also the strong debut with a pop of the shares on the open, a real boost of
confidence to the folks here -- Alison.
KOSIK: Yes, very exciting. And I was actually here on the floor of the New York Stock Exchange when Alibaba went public here, which brings this --
which brings the next question, why did, even though Alibaba wanted to list in Hong Kong purely, why did they list in the U.S. first?
PHAM: They listed in the U.S. first because there was a disagreement over how the shareholding structure would play out. So at the time, back in
2014, Hong Kong wasn't allowing any dual class share listings. That changed very recently, which is why you saw the likes of Chinese tech
companies like Xiaomi, and like Meituan choose to debut in Hong Kong over New York.
So Hong Kong changed its rules specifically to attract some of these big Chinese tech companies that were choosing to go to the New York Stock
Exchange to NASDAQ to list rather than somewhere that was much closer to home.
And again, it would be a place that would be much closer to investors that understand the company and use the company's products.
This would be like Amazon only being available to trade in Hong Kong and not being available to trade in New York. It's a little bit crazy, right?
So Alibaba doesn't need this cash. They've got plenty of cash on the books, but they're saying that they're going to use the money raised in
this IPO to -- to you know, develop a little bit more in other tech ventures that they're doing and plow more money back into the company.
But this really was just a homecoming for the company more than anything else -- Alison.
KOSIK: Great context. Sherisse Pham, thanks so much.
A U.S.-China trade deal could still be on the horizon. That was the message after top negotiators on both sides talked by phone early Tuesday
morning.
Beijing and Washington are working towards a Phase 1 of a deal which was announced by President Trump last month, but it has not yet been finalized.
Christine Romans is following all the comings and goings of these headlines because one day, we're up; one day, we're down. Meaning, one day, it's a
positive headline; one day, it's a negative headline. Where do things stand now especially with this so-called Phase 1 of a deal?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It's like that 1983 Bill Murray movie "Groundhog Day," every day the alarm rings.
KOSIK: It really is.
ROMANS: And we wake up and we say, are we going to get a deal today? We are. We aren't. We are. We aren't.
Look, things look positive again this morning. We're on the positive end of these headlines, and basically, it is what we're hearing from the
Chinese side.
The Finance Ministry -- or the Commerce Ministry rather said that they had come to some conclusions, got some consensus. Others parts of the
government over there in China have been saying that they're talking. There's constructive conversation and communication. So showing that they
are still talking.
My reporting of the last week or so has been that they're really close to either a really skinny deal, which is some soybean purchases, maybe some
intellectual property enhancements. We heard that from the Chinese side last night in exchange for dropping some tariffs.
The Americans have been leery of dropping too many tariffs because the President who calls himself Tariff Man is someone who wants to keep those
tariffs on as many as he can to try to keep the Chinese at the table and talking.
This little tiny skinny deal if it happens, would push the thornier issues forward into 2020 or even after the election, but things this morning are
looking a little bit more positive for a small deal and a small deal that clearly the Chinese want and some on Wall Street really want here.
The other wrinkle though here is you also have the Chinese government very angry about Congress passing the law supporting the protesters -- the Hong
Kong democracy protesters -- and actually warning the United States government, calling in Terry Branstad, the U.S. Ambassador to China and
addressing him down essentially saying that Congress was interfering and meddling in Chinese affairs by passing this law.
China condemns and strongly opposes the U.S. Congress passing the Hong Kong Human Rights and Democracy Act. We urge the U.S. to grasp the situation,
to step back from the edge of the cliff.
KOSIK: Christine, great having you on. I've got to in break in though. We're going to go to some live coverage on CNN.
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: ... an aircraft that has somehow strayed into restricted air space, which has created a situation
certainly around the White House and perhaps up at the Capitol as well, where air defense measures have been put into effect.
So here at the White House what that means is we're on lockdown. Everybody is being kept inside. The United States Secret Service, uniformed officers
and others patrolling outside with the full armed gear.
[09:10:04]
JOHNS: And we're waiting for authorities to give us an all clear sign. This information about this air defense condition reported by Barbara Starr
over at the Pentagon, Suzanne Malveaux up on Capitol Hill.
We here at the White House first heard of this during a brief news conference, if you will, a briefing here with Kellyanne Conway. Last
question was about an evacuation at the Capitol which I don't believe has been confirmed.
However, what we do know is that there has been this situation involving an aircraft that has entered restricted air space.
JIM SCIUTTO, CNN ANCHOR: Okay, Joe, hold that thought there. Because, you know, often security authorities will act with an abundance of caution
here.
We have our Barbara Starr at the Pentagon, I believe, coming up live now. Barbara learning from Defense officials that this aircraft not known to be
hostile at this time.
Barbara, tell us -- tell us what you're hearing.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Jim, a Defense official has just told us they do not believe at this time this unidentified aircraft is
hostile. But nonetheless, Washington is always sensitive to these issues and they immediately engage in their standard procedures.
So often what happens is there are military aircrafts in the National Capital Region on standby at all times and they go up and look at what this
aircraft may be doing.
They look for a tail number so they can identify it. They try and signal the aircraft that it is in restricted air space and it must turn around and
leave immediately.
They can do this, the military pilots, by essentially maneuvering their own aircraft, waving their wings at the unidentified aircraft, flashing lights,
signaling, trying to reach them by radio communications.
Everything they can to ensure that whatever pilot may be up there, civilian pilot, knows they are in the wrong place and they must turn around
immediately.
SCIUTTO: Right.
STARR: What we do know is that a conference call, a high-level interagency conference call under way at this time. They are monitoring the situation
trying to identify the aircraft and trying to find out exactly what is going on.
SCIUTTO: Okay.
STARR: So there's a lot of concern but pretty standard protocols at this time -- Jim.
SCIUTTO: We're learning and we could report this now that military aircraft have scrambled to respond. And we should note and, Barbara, you
know this well, a lot of this is the legacy of 9/11. These protocols are in place to operate out of an abundance of caution so they can react
quickly to this sort of thing.
I just want to be clear, when you say it is not known that the plane is hostile at this time, are you saying that Defense officials have made a
judgment that it is not hostile or they just do not know that there is hostile intent?
STARR: What our understanding is right now, and, of course, this can change, is right now they appear to have no information that would indicate
it is hostile.
SCIUTTO: Okay.
STARR: Most of the time in these incidents, they are small, private planes, civilian pilots who essentially get mixed up about where the
restricted air space is. They may not have read the latest bulletins from the F.A.A., and these small planes often just simply wander in, frankly, to
restricted air space.
Even if they may be trying to test the boundaries of it, even if it's maybe deliberate, they don't see hostile intent but look, that is exactly why the
U.S. military scrambles aircraft and sends them up there to have a look at this.
SCIUTTO: Yes.
STARR: Trying to identify exactly what's happening.
SCIUTTO: And as we learned on 9/11, if they're not up in the air quickly, then they can't react. Oftentimes those planes, you know, on that day were
up too late. Barbara Starr, thanks very much.
We do have news coming out of the White House now. We'll bring our Joe Johns back.
Joe, if you're there, I understand that the lockdown on the White House has now been lifted?
JOHNS: That's right. The lockdown has been lifted. People are being allowed back out on the grounds freely and starting to get back to normal
here.
Obviously, as you said, abundance of caution. I know back during the Ronald Reagan funeral, there was an evacuation of the U.S. capitol and
another lockdown because of a plane flying into restricted airspace. If I remember correctly that was the Governor of Kentucky whose pilot had
strayed too far into restricted air space.
Abundance of caution and it's looking pretty good here from the capitol.
SCIUTTO: Okay. There you have it. Momentary, for minutes, concern at the White House, but now that lockdown is lifted. Again, this appears to be a
case of an abundance of caution.
We have seen, as Joe was saying, cases like this before where pilots make a mistake. They don't know --
KOSIK: All right, you've been watching CNN about this lockdown at the White House. It has now been lifted, and FIRST MOVE. We'll be right back.
(COMMERCIAL BREAK)
[09:17:49]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik. We are live from the New York Stock Exchange and tensions are brewing at Google. The
Internet giant escalated an ongoing dispute with employees by firing four people who are active in organizing a union.
Google says they've violated the company's data security policies. Clare Sebastian joins us now live with details.
Clare, what is different about these firings with how employees have been treated in the past? I know that tensions have certainly been brewing for
months.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, absolutely, Alison. This is a part of a trend that we've seen workers protesting against
various things as it relates to Google.
What we know here, what Google has confirmed is that an e-mail went out to all staff on Monday confirming these firing, saying that they had allegedly
violated the company's security policies, including doing things like accessing other employees' calendars, sharing them with outside sources.
Now, we already knew that two employees had been placed on administrative leave. They had protests outside the company's San Francisco headquarters
on Friday demanding that they be reinstated.
One of those employees, a software engineer, called Rebecca Rivers, she tweeted on Monday saying that she had actually been fired. So this is
playing out in public for Google. As I said, the company hasn't commented beyond confirming that the e-mail went out and that its contents as last
reported by Bloomberg were correct.
But there has been an uproar around this, Alison, a group representing Google workers organizing against the company, so this is classic union
busting, dressed up in tech industry jargon.
Another broader group representing tech injury industry workers, the Tech Workers Coalition, they also tweeted calling this a draconian act saying it
is designed to scare workers. Don't let it and they are calling these the Thanksgiving Four calling on other companies to offer them jobs.
So look, this is something that we're seeing increasingly. Last year, we saw a global walk out by Google workers protesting against sexual
harassment in the workplace -- misconduct, treatment of staff in general.
As these tech companies become more and more powerful, we are increasingly seeing more and more unrest among employees -- Alison.
[09:20:00]
KOSIK: You know, this is a company, we're talking about Google, obviously, that really became the standard for the modern workplace, you know, with
its perks and its openness. What's happened here with now even reports that Google is hiring a consulting company to try to quell any efforts to
unionize?
SEBASTIAN: Right, well, this is a far cry. Clearly in 2007, Alison, they were named number one on the "Fortune" magazine list of top places to work.
You're absolutely right. This is where Silicon Valley first got the idea of, you know, kind of bean bags and free food and things like that in the
workplace.
But I think, as I said, as these companies become more and more powerful, as they start doing more things outside their original remit, Google, for
example, has faced unrest among employees for its work with the Pentagon. It didn't renew a contract with the Pentagon last year on it on its Project
Maven, which does things like used AI to make drone strikes more accurate - that caused a lot of concern.
One of these workers that was placed on emergency administrative leave and then fired was apparently protesting against their work with Customs and
Border Protection.
We're seeing similar issues. Companies like Amazon over things like climate change. These are causes that are being taken up by employees and
brought against these companies because of their size, because of that power over the economy and society.
KOSIK: All right, Clare Sebastian, thanks so much. Let's get a quick check of the markets. It is still looking like a mostly flat open for U.S.
stocks, Tuesday.
That said, all the major averages are beginning today's session at record highs. So that means, any slight gain today will propel the major indices
to new heights.
The NASDAQ is now up 30 percent since the beginning of the year. The S&P 500 up 25 percent. The Dow is the relative laggard here rising just a
measly 20 percent, I say that in jest, of course. It is the best year for stocks here on Wall Street since 2013.
Joining me now Binky Chadha, the Chief Global Strategist at Deutsche Bank. You know, rattling through those numbers, I remember we talked endlessly
last year, especially in December how horrific the returns would be this year. What's happened?
BINKY CHADHA, CHIEF GLOBAL STRATEGIST, DEUTSCHE BANK: So what we've basically gotten is, you know, in large part, so you mentioned the 25
percent, a big part of that came -- you know, through the early first half of the year where we were just sort of bouncing back from very overshot
levels to the downside last year.
So I would say a healthier way of looking at what the equity is doing is to take the average return over the last two years, then it looks just sort of
pretty normal. So because we fell a lot, you know, in the fourth quarter of last year. Yes.
KOSIK: All right. Let's talk about how the third quarter has gone so far, earnings season winding down. What's your assessment of how companies have
performed?
CHADHA: So you know, I think the Q3 earnings season has basically something for everybody. If you are bullish, there's something for you.
If you're bearish, there's definitely plenty for you.
And the reason for that is that there is sort of various, you know, strong sort of sharp contrasts within the earnings. So if you look at the
headline earnings number, you know, we are sort of flat to one percent in the very low single digits for the third quarter in a row, and that's not
great earnings by any stretch of the imagination.
You look at the average company, the medium company, the S&P, that's six and a half percent growth. It's pretty steady. It looks pretty good.
So, you know, to the extent that equity is above top down and bottom up asset class, you know, it looks fine.
If you look at manufacturing companies, earnings are down seven percent. If you look at services company's earnings, they are up seven percent. If
you look at, you know, consumer facing companies, earnings are up seven percent. If you look at producer facing companies, earnings are down eight
percent.
So, there's enough for everybody, but I would say it is a pretty, you know, sort of a mixed picture at best.
KOSIK: All right, so if you're going to get the assessment on how the U.S. economy is doing, what would you say about that?
CHADHA: I would say, you know, the latest trade developments are positive and, you know, are you for sort of a bottoming in growth, you know, by sort
of Q1 of next year? And then we start to see, you know, sort of a gradual uptick, but we are still talking about below trend growth in the U.S.
through, you know, late next year and then sort of just basically catching up to trend levels by the third quarter of next year.
So, it is a relatively slow, sluggish, average growth profile is the way that I would put it.
KOSIK: But we are seeing the indices at record highs.
CHADHA: Yes.
KOSIK: How can we -- how can -- how can we just kind of gauge that?
CHADHA: So, you know, the two things to keep in mind basically, are that positioning in equities had, you know, sort of fallen, so if I think about,
you know, a simple indicator of positioning in equities, like the amount of new money coming in sort of into mutual funds and ETFs, for example, you
know, up until a month ago, we were having persistent outflows. Those flows tend to be correlated with growth.
So as U.S. growth was slowing, you know, it continued to have, you know, sustained sort of $250 billion in outflows. And as the markets have run
up, you know, it's not unreasonable to expect that there's some sort of, you know, sort of catch back in type inflow, which is what we're seeing.
So it's really a positioning squeeze. The markets are way, way ahead, basically, of where economic growth is.
[09:25:29]
KOSIK: All right, in September, you sat here and said, we were dangerously close to a recession.
CHADHA: Yes.
KOSIK: Do you still feel the same way?
CHADHA: I think that characterization is right. But I would say dangerously close to falling into a recession. It's not -- you know, not
been our baseline view that we would fall in, but the point was that the U.S. economy was slowing basically to what I would characterize, as you
know, dangerously close to a stall speed.
And Q4 growth is meant to be lower than Q3 growth, so if you look at things like GDP, so you know, the markets have basically have run ahead. The
markets are pricing in a very, very strong rebound in growth.
I think in the near term, we will continue to squeeze higher, but the challenge for 2020 will be that, you know, we will need to get a strong
rebound, just simply to validate current levels in the market or the levels that we expect, we will get to over the next few weeks.
KOSIK: And certainly, a trade deal will help propel markets as well.
CHADHA: It certainly will.
KOSIK: Okay. All right, Binky Chadha. Thanks so much for your analysis. Appreciate it.
CHADHA: It's a pleasure.
KOSIK: All right, and you're watching FIRST MOVE. The opening bell is next.
(COMMERCIAL BREAK)
[09:30:00]
KOSIK: And welcome back to FIRST MOVE. I'm Alison Kosik live from the New York Stock Exchange. That was the opening bell.
U.S. stocks are mostly flat in early trading, it looks like, but they do remain close to record highs. All the major averages closed at records on
Monday after a flurry of big M&A deals and positive trade developments. We continue to receive positive trade news today as well.
Volume could be lighter than usual as we head towards the Thanksgiving break. U.S. markets are closed on Thursday and it's a half day of trading
on Friday.
Meantime, we continue to see weakness in Bitcoin today. The digital currency has lost about 20 percent against the dollar over the past week
and is trading close to six-month lows.
Okay, we want to take you back to Washington now where the White House was on lockdown early Tuesday morning amid a security alert. Let's bring in
Suzanne Malveaux from Capitol Hill.
Good morning, Suzanne, so do you know yet what plane this was that entered the airspace surrounding the White House?
SUZANNE MALVEAUX, CNN U.S. CORRESPONDENT: Good morning. All we know, Alison, is that there was a plane that veered into restricted airspace.
The whole incident lasted a little bit more than 30 minutes or so causing for the White House as well as here at Capitol Hill to be put on lockdown.
Now, a U.S. Capitol Police source telling me that they got to a heightened state of alert that is Code Orange. If it had reached Code Red, that would
have been an evacuation of the building and sheltering before that sheltering in place.
But what we experienced here was that they allowed us to stay inside the building. We did notice that the streets around the Capitol had been
evacuated and cordoned off to traffic and that, in fact, they were not allowing people inside of the building.
But then they gave us the all clear in about 30 or 40 minutes that this lasted, and just simply this happens from time to time, Alison, but of
course everybody is on high alert when it does happen and the security forces kick in as they always do.
But fortunately, it was not really an incident of great significance, but quite a scare here in Washington just moments ago.
At the same time, Alison, as you know, the Impeachment Inquiry continues. The work and the report being written behind the scenes, and this ruling
from a Federal judge coming yesterday that potentially clears the way for additional witnesses and testimony.
(BEGIN VIDEOTAPE)
MALVEAUX (voice over): A Federal judge ruling former White House Counsel Don McGahn must testify before Congress, delivering a blow to President
Trump's efforts to stonewall the Impeachment Inquiry.
The decision striking down the Trump administration's previous claims that officials are immune from complying with House subpoenas.
In a scathing 118-page decision, U.S. District Judge Ketanji Brown Jackson writing, "Stated simply, Presidents are not kings," adding, " ... absolute
immunity from compelled congressional process simply does not exist."
(BEGIN VIDEO CLIP)
REP. STEVE COHEN (D-TN): We've been defied in our attempts to have proper oversight that the Constitution allows because of this administration's
stonewalling, and so what's good the judge agreed with us. It's the law. It is oversight as American as apple pie.
(END VIDEO CLIP)
MALVEAUX (voice over): The White House says the Justice Department will appeal the decision, adding, they are, " ... confident that the important
constitutional principle advanced by the administration will be vindicated."
Back in May the White House blocked McGahn from complying with the House Judiciary subpoena after the Mueller report revealed he witnessed several
instances of Trump attempting to interfere with the Russia investigation.
Now McGahn's lawyer says he will comply unless a stay is issued. The ruling could factor in House Democrats push to have other Trump officials
like Acting Chief of Staff Mick Mulvaney and former National Security adviser, John Bolton to testify.
(BEGIN VIDEO CLIP)
REP. MIKE QUIGLEY, (D-IL): I think it's a message to all the witnesses who obstructed and the White House for telling them not to appear. It's time
to show up.
(END VIDEO CLIP)
MALVEAUX: While McGahn could be compelled to appear, the judge's ruling making clear he may still be able to refuse to answer questions citing
executive privilege.
Still, House Democrats are working furiously to expedite the impeachment process.
Intelligence Chairman Adam Schiff writing in a statement, "The testimony and documents we have succeeded in requiring reveal a fact pattern that is
overwhelming, unchallenged and damning."
(BEGIN VIDEO CLIP)
REP. ZOE LOFGREN (D-CA): The Intelligence Committee has done the fact finding. We can't be held up for months at a time to frivolous appeals, a
very well-reasoned decisions. We've got to move forward.
(END VIDEOTAPE)
MALVEAUX: And Alison, this is how it's going to play in the days and weeks to come. House Chair Adam Schiff, the Intel Chair Adam Schiff saying that
every day the Committees are learning new information, 15 of those 17 deposition transcripts have been released to the public. There are two
more to go.
[09:35:08]
MALVEAUX: In the meantime, you have House Speaker Nancy Pelosi, she is being charged with just the scope and the scale of what these Articles of
Impeachment would look like whether or not they would fold in articles of obstruction from the Russia investigation, the Mueller probe into the
Ukraine probe.
At the same time you have the House Intel Committee staff, they are writing this report behind the scenes. They will hand it off to the House
Judiciary Committee. That will happen after Thanksgiving. There they say they will have hearings, the exact format not yet set, but they do believe
at the very least that they will have one session in which they talk about the Constitution and its role regarding impeachment.
The second one Democrats making their case for Articles of Impeachment, and the third would be an opportunity for the White House counsel to make its
case for the President -- Alison.
KOSIK: All right, Suzanne Malveaux. Thanks so much for all of that including the timeline, we appreciate it.
Okay Huawei has been under pressure from the Trump administration's broader campaign against it. How the Chinese telecom giant now plans to navigate
through the U.S. challenges? Kristie Lu Stout's exclusive interview with the CEO of Huawei. That's coming up.
(COMMERCIAL BREAK)
KOSIK: Welcome back to FIRST MOVE. Let's take a look at some of today's Global Movers. Shares of electronics retailer, Best Buy solidly higher.
Its third quarter earnings and revenue beating expectations and it is raising its 2019 guidance. Best Buy could be impacted, however, if new
U.S. tariffs against China go into effect next month.
Shares of Dick's Sporting Goods are up about 12 percent. It also released better than expected results today. Same store sales rose six percent --
the company's best showing in six years.
Not all the retail numbers today are good, however, shares of discount retailer, Dollar Tree are falling 15 percent.
[09:40:08]
KOSIK: Its profits missing estimates, and it is lowering fourth quarter estimates because of the impact of higher tariffs.
The CEO and founder of Huawei says his company can still be the world's number one smartphone seller even without Google.
The Chinese telecom giant has been cut off from Google products since the U.S. government put restrictions in place earlier this year.
Kristie Lu Stout joins us live now. I know that you sat down with the CEO of Huawei for an exclusive interview.
KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: Absolutely, Alison. I just returned from Shenzhen where I had a long and wide ranging exclusive
interview with the founder and CEO of Huawei, Ren Zhengfei and he is a straight talker.
We had a very frank discussion about Hong Kong, about growing tensions between the U.S. and China, about his daughter, Huawei CFO, Meng Wanzhou as
we near one year since she was arrested in Canada at the request of the United States.
And of course, we also talked about Huawei's bottom line. On the face of it, its business is doing well, despite the immense U.S. pressure against
it. On the network equipment side, it continues to sign on new customers, new international carriers, and in terms of smartphone sales, they're
growing, but they're only growing in China. And that is because Huawei is on a trade blacklist in the United States.
American companies are banned from doing business with Huawei, which means whenever Huawei brings a new smartphone to market, and new mates to market,
there will be no Uber. There is no Facebook. There are no Google Apps on it.
So when I sat down with Ren Zhengfei, I asked him, what is his Google backup plan? Take a listen.
(BEGIN VIDEOTAPE)
LU STOUT: Are you working on a backup plan because Google is not going to get a license to work with you?
REN ZHENGFEI, CEO AND FOUNDER, HUAWEI (through translator): Yes. And at a very large scale.
LU STOUT: Have you heard definitively, Google did not get a license to work with you? Has Google been denied?
ZHENGFEI (through translator): No.
LU STOUT: Right now, Huawei is the number two smartphone vendor in the world. Can Huawei be number one without Google?
ZHENGFEI (through translator): I don't think that will be a problem. But it just takes time.
LU STOUT: It takes time. How would you be able to crack into the overseas market without Google?
ZHENGFEI (through translator): When I say it takes time, what I am referring to as the overseas market, because we will return to the overseas
market next year, and the year after that. We have full capability and determination.
(END VIDEOTAPE)
LU STOUT: And that is a very bold statement there from the founder and CEO of Huawei saying that he does have a Google backup plan. It's a quote,
"large scale plan." It's already in motion and that right now, Huawei is the number two smartphone vendor in the world. Samsung, he is saying that
they can overtake Samsung to become the number one smartphone vendor in the world with or without Google. Very bold indeed.
Now, this is what we know about the backup plan that they have in place. They have already been working on their own operating system, it is called
Harmony. They also have their own alternative to Google Play.
And for example, on a Huawei phone like this, it will have its own App Store where there's some 25,000 apps available that really pales in
comparison to -- rather 45,000 apps available, pales in comparison to 2.8 million apps that you would find in the Google Play Store.
So still, you know, a lot of challenges for them just about. Ren Zhengfei did concede that America is still the world leader in terms of innovations.
It says that the United States is still decades ahead of other countries, including China, but he did add if these restrictions remain in place,
Huawei has no other alternative, but to find other alternatives and if they do become viable, if they do become as he says mature, then he is not going
to switch back -- Alison.
KOSIK: Well, lots of Plan Bs, lots of optimism there. Kristie Lu Stout, thanks so much.
Hong Kong's Chief Executive is acknowledging that last weekend's local election results show voters are far from happy. Carrie Lam said people
clearly think there are what she called deficiencies in governance.
Pro-democracy candidates won big in the elections taking 90 percent of the seats. Hong Kong has seen a lull in the violence for the past week, and
all but a small number of activists now seem to have left the Polytechnic University which demonstrators had earlier turned into a fortress.
Joining me now is Tara Joseph, the President of the American Chamber of Commerce in Hong Kong. So great to have you with us.
TARA JOSEPH, PRESIDENT, AMERICAN CHAMBER OF COMMERCE IN HONG KONG: Thanks.
KOSIK: So for many democracy advocates, the elections Sunday were a real turning point here, but there's also the reality that district councils
traditionally have little power. So how do you see the tide changing despite that?
JOSEPH: Well, it was definitely a shot in the arm for Hong Kong which has faced months of violence and uncertainty. The fact that pro-democracy
people in the city had a moment to speak out and that the results were clear, definitely led to a feel good factor.
[09:45:16]
JOSEPH: But once we digest that, we have to wonder what's next. What is the government really going to do with this? How is Beijing really going
to react? And how are these new district councilors really going to affect change in Hong Kong?
So it's a nice feeling for the moment, but it doesn't change the underlying worry about how Hong Kong can reset itself and move forward in this
environment.
KOSIK: If you can give your advice to them, what would you tell them they should do next? What steps should come next?
JOSEPH: Well, it's really important that we see a peaceful movement in Hong Kong. This is such an important business capital. It's a dynamic
international center that has had so much exposure to the world recently with violence and teargas and difficult times.
So it's important that if people feel strongly about the pro-democracy movement or about changing the way in which Hong Kong operates, that
they're out there peacefully making their demands, but in a way that shows the world how advanced Hong Kong really is.
KOSIK: With the outcome of these elections, though, do you think Beijing will wind up trying to interfere even more, because the Mainland senses it
is losing its grip on Hong Kong?
JOSEPH: Well, that's a really big question. Beijing has said to me, has said to people all around the world that it wants to maintain one country
two systems -- that it has no intention of taking that away, at least not until 2047.
So the question is, what is their interpretation of one country two systems? Would they allow a large pro-democracy majority to be in place if
local elections allow for it? And the real significance of these local elections is it could lead to the election of a Chief Executive by a
limited group, but because of these local elections, a limited group that is more pro-democracy leaning.
So if that is allowed to continue without any sort of stunts or anything hurting it, then we actually could see the voice of the people be heard.
KOSIK: Very quickly. I know that Hong Kong plunged into a recession in the third quarter, how do you think Hong Kong can dig itself out of that?
JOSEPH: It's going to be hard for a few months, there's no question about it. Every day, we're getting a fresh set of data that shows exports have
fallen, retail sales are tanking.
We know that we're in recession here and it's going to be a hard few months. The important thing is to look at this as a financial services
hub.
If you think about the Alibaba IPO, for example, or you look at how the financial markets are faring, or how many financial services firms are
maintaining firm here, this really is the world's third largest financial center that hasn't been interrupted.
It could be hurt if things don't improve, but there really is hope that Hong Kong can continue this way and return to maintain that role and also
as a crown of an IPO center for the world.
KOSIK: All right, Tara Joseph from the American Chamber of Commerce in Hong Kong, thanks so much for joining us.
And Ford is now coming after Tesla after Elon Musk picked a fight as he unveiled his electric pickup truck. A new battle on the road is straight
ahead.
(COMMERCIAL BREAK)
[09:50:48]
KOSIK: Welcome back. The United Nations has a warning, if the world doesn't do more, much more to curb greenhouse gas emissionsm we can expect
global temperatures to rise by 3.2 degrees this century. That's more than twice the goal contained in the 2016 Paris Climate Accord of limiting the
rise in temperature to 1.5 degrees Celsius.
Industry is one of the biggest sources of global emissions, but technology to revolutionize our power sources could be within reach.
A startup backed by Bill Gates says it has figured out how to harness the power of the sun to generate the temperatures needed for crucial industrial
processes. Matt Egan joins me live.
So this is a real interesting one, Matt, because I know other companies have really tried to do this, and they fail. What has Heliogen done right
here?
MATT EGAN, CNN BUSINESS SENIOR WRITER: That's right. That's -- you know, that's what makes this company so intriguing. As you mentioned, it's
backed by Bill Gates and also backed by Patrick Soon-Shiong, who is the owner of the "LA Times" and Heliogen says that they've figured out a way to
get extreme heat from the sun, above a thousand degrees Celsius.
Just to put that in context, that's about a quarter of the temperature of what you find on the surface of the sun. And it's really important because
that means that solar energy could actually be used in these industrial processes like making cement and glass and steel.
Normally, they use fossil fuels. But if they switched over to carbon free sunlight that could really reduce the carbon emissions.
So I interviewed both the CEO of this company, Bill Gross, and also Patrick Soon-Shiong, and I asked them exactly how they were able to do this.
Here's what they said.
(BEGIN VIDEO CLIP)
BILL GROSS, CEO, HELIOGEN: Essentially, we take mirrors, and we have a mirror that is reflecting sunlight, but we have a thousand of them. So
imagine the mirrors like this all in the field, but all precisely tuned with software to reflect their solar beam to one single spot.
Now if you take one mirror and reflect light to a spot, it will get warm. But if you take a thousand mirrors and have them align exactly to a single
point, you can achieve extremely, extremely high temperatures, again above a thousand degrees.
So our breakthrough was a technology to computer align all those mirrors using computer vision software, using automatic edge detection, using a
whole bunch of sophisticated technologies. That's what a real breakthrough is.
(END VIDEO CLIP)
EGAN: So Alison, there you have it, they're using artificial intelligence to try to solve the climate crisis. We need to keep a close eye on this
company. They plan to rapidly scale out, prove that they can use this in making cement or other industrial processes and you never know, we could
see this company eventually going public.
KOSIK: Love this story. Matt Egan, thanks so much. A Ford executive is challenging Tesla's claims about its new Cyber Truck after Tesla's CEO Elon
Musk released a video showing the cyber truck beating an F-150 in a tug of war.
The Vice President of Ford X, the company's mobility ventures lab implied that wasn't a fair fight. He tweeted this saying, "Hey, Elon Musk, send us
a Cyber Truck and will do the apples to apples test for you." Hmm, Musk replied, "Bring it on."
CNN business senior auto writer Peter Valdes-Dapena joins me now. So could we actually see a show down here? And if so, when?
PETER VALDES-DAPENA, CNN BUSINESS SENIOR AUTO WRITER: Okay, well, if you do see it, it will be run by Elon Musk. Ford's official response outside
of Twitter when I asked them about this, they just tweeted me that basically, we're very proud of our trucks. Nothing about the Cyber Truck.
And remember, the gentleman who tweeted this, as you mentioned was not from the vehicle side of Ford or the truck side of Ford. He was responding to
an article on the blog, Motor1, which pointed out that this was an essentially, base model F-150 going up against this prototype, Cyber Truck,
maybe not exactly a fair fight.
But it's far from clear that Ford actually wants this or is it just one employee, just kind of throwing a tweet out there.
KOSIK: That would be so interesting though, wouldn't it?
VALDES-DAPENA: It would be exactly --
KOSIK: Almost better video than seeing the windows smashed.
[09:55:10]
VALDES-DAPENA: Oh yes, that would be a fun video to watch. I want to see if Elon Musk can actually -- in fact, if Elon Musk actually does this, but
again for Ford, it's almost a no win because either they lose this fight which is embarrassing or the Ford truck wins it and Ford could come off
looking like they're dumping on electric trucks.
And remember, Ford is actually working on their own electric F-150. And the N Ford just unveiled the Mustang Mach-E electric SUV. So Ford doesn't
want to come off looking like they're down on electric vehicles.
KOSIK: All right, I'm wondering if the Vice President of Ford X got a talking to here. Peter Valdes-Dapena, thanks so much.
And that's it for the show. Thanks for watching. I'm Alison Kosik. "CONNECT THE WORLD" starts after this short break.
(COMMERCIAL BREAK)
[10:00:00]
END
