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First Move with Julia Chatterley

Hong Kong Is Imposing Severe Restrictions On Travel From China Due To Coronavirus Outbreak; U.K. Grants Huawei Limited Role In Building Its 5G Infrastructure, Despite Pleas From President Donald Trump; Trump's Legal Team Ignores John Bolton Revelations. Aired 9-10a ET

Aired January 28, 2020 - 09:00   ET

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

[09:00:00]

ZAIN ASHER, CNN INTERNATIONAL ANCHOR: Coming to you live from the New York Stock Exchange, I'm Zain Asher. Here is what you need to know. The death

poll from the coronavirus rises in China as border restrictions tighten to stop the spread. And the U.K. grants Huawei a limited role in building its

5G infrastructure, despite pleas from President Donald Trump.

And on Capitol Hill, it's the final day of opening arguments in the Trump impeachment trial this Tuesday, and this is FIRST MOVE.

All right, welcome to FIRST MOVE. It's so good to have you with us. It is another tense day when it comes to global markets as investors monitor the

progress of the coronavirus.

But after two days of sharp selling, U.S. and European stocks are actually stabilizing. You finally see green arrows across the screen. U.S. features

are on track for a solidly higher open.

European stocks are higher across the board as well, but investors are still a bit sensitive to the latest coronavirus headlines, but for now,

traders may feel that markets have dropped too far too fast. That is why we're seeing a bit of an uptick right now.

The Dow actually suffered its worst day of trading since October on Monday dropping more than one and a half percent. It has fallen into the negative

territory for 2020 and it has posted losses in five straight sessions.

The NASDAQ suffered its worst day since August on Monday, too. We are also seeing some calm return to the U.S. Treasury market. Ten-year yields

tumbled Monday as traders flocked to safe havens like government bonds. But yields are ticking higher today.

Safe haven, gold is down by about a quarter of one percent right now. Our main drive, though today is still of course the coronavirus.

Hong Kong is imposing severe restrictions on travel from China as the infection rate on the Mainland continues to accelerate. The death toll has

risen above 100 people with more than four and a half thousand cases that had been confirmed so far; 60 million people across the country are on

lockdown.

David Culver is joining us live now from Beijing. So David, I still want to talk about Wuhan because of course, that is the epicenter of this deadly

disease, does Wuhan actually have the healthcare it infrastructure needs to really handle this?

DAVID CULVER, CNN CORRESPONDENT: It seems, Zain, they are being flooded with more than they can handle, and proof of that is coming straight from

the top. President Xi Jinping himself who just speaking a short time ago according to state media with the World Health Organization head and said

that this epidemic is something that he's determined to bring down, he's determined to stop it.

He calls it a demon, and he says it will not hide from him. He also says he's the one personally giving the orders to these deployments. And so to

your question as to the resources down there, well, it seems like they need them badly because we know of at least 6,000 medical personnel, military

and civilian, I'm talking about doctors and nurses who have been deployed to Hubei Province and to the City of Wuhan in particular.

And we also know that they're building two hospitals that will hold about 2,000 plus patients, so they're trying to accommodate even more beds.

Now, we hear that the City of Wuhan itself has 13,000 beds dedicated to those infected with the virus.

The other thing they need, Zain, are resources. We're talking about goggles, masks, and even Hazmat suits, those are crucial right now.

And so part of that is coming not only from the production here, they essentially have restarted the factories, if you will, in the midst of a

holiday to try to meet that demand. But it's also coming from the outside including from Japan and South Korea.

Interesting here how this is working. Okay, because Japan and South Korea are bringing in planes that are eventually going to take citizens out of

the lockdown zone.

So the Japanese citizens who are approved to be on the flight and likewise South Koreans, they will get on that plane, but in exchange at a goodwill

really, South Korea and Japan leaving behind several masks, as well as the Hazmat suits, so those things that are most needed right now.

We know a few hours from now, Zain, an American airplane will be leaving, an aircraft carrying at least 240 Americans, U.S. diplomats, their

families, as well as civilians who were allowed to apply for a select spot that's going to leave and head to the West Coast of the United States and

they will be in quarantine, those passengers for up to 14 days, Zain, upon their arrival.

We're also hearing about some restrictions travel wise, certainly coming out of the territory of Hong Kong. They have put in some very strict travel

regulations with regards to those coming from the Mainland, particularly from Hubei province.

They essentially said if you're from there, or if you have traveled there, you cannot enter Hong Kong within two weeks' time. Singapore is doing

something similar where they say any student or staff member from schools who were anywhere in Mainland China cannot go into those schools for two

weeks. In Australian state, doing something similar.

So we're starting to see these stepped up restrictions coming really worldwide. In the U.S., C.D.C. there has said that they're telling folks to

reconsider travel to China and tell them quite explicitly, Zain, not to travel to Hubei Province.

[09:05:12]

ASHER: And David, just in terms of healthcare workers, how are they being protected in all of this because they are also one of the most vulnerable

here.

CULVER: There is a real struggle there with the healthcare workers, we have spoken to at least half a dozen -- my team and I here in Beijing -- and

they are dealing with not only the lack of resources, and there's a dire need for that, and they say that they feel like they're going into battle

without armor.

And so this explains why now President Xi Jinping is pushing forward with these resources and saying that he's deploying them himself and making

those orders, but also they themselves are in contact with the affected and contracting the illness.

In fact, one nurse tells us that at least 12 of her colleagues have contracted the virus. Some of them are in intensive care, some of them were

sent home with medication, but Zain, either way, they're unable to do their job which is treating for those who are sick because they themselves have

been infected.

ASHER: David Culver, live for us there. Thank you so much.

Coronavirus fears continue to grip Asian markets, Tuesday. South Korean stocks tumbled on their first day of trading this week. Hong Kong markets

are scheduled to begin trading again tomorrow following the Lunar New Year Holiday.

Anna Stewart joins us live now, and Anna, the ones we are really watching closely are Asian travel stocks because they are getting hit hard here.

ANNA STEWART, CNN REPORTER: Yes, they are one of the sectors that are particularly under pressure. But just to give you an idea, we did see the

selloff continue into the Asian trading day, Tuesday.

Of course the Chinese indexes are largely all closed for the holiday. We did have the KOSPI, South Korea's Index opening. Now, that opened three

percent down, so it's playing some catch up there. Nikkei down another day, half a percent that can add to yesterday's two percent drop, and

Singapore's Index, too, down nearly two percent.

I'll bring up those travel stocks. I did want to show you just how badly some of these are faring. Qantas down five percent, Korean Airlines 6.7

percent. So some real big hitters there, and this is largely on containment measures. That's what's putting all this downward pressure on these stocks.

Factories closed, shops closed, travel restrictions. That doesn't bode well for many of those Asian stocks and of course, more globally looking at

those that are exposed to China.

Now, you did mention Hong Kong. We are expecting Hong Kong Stock market to reopen tomorrow, Wednesday. That's in less than 12 hours' time. However, we

do understand the Hong Kong government has told many businesses to close their offices, have people working from home, still unclear whether it will

reopen. If it does, I think you can expect to see some really hefty losses again on that index tomorrow -- Zain.

ASHER: And oil has also been heavily impacted in all of this especially just given that China is the largest consumer of energy in the world.

STEWART: It is and also oil is such a sentiment trade, isn't it? There's this huge fear and mining stocks as well, I should say that if consumption

is hit, so if factories are closed, you're going to see much less demand for raw materials for oil. You can see the prices there. We saw bigger

losses actually yesterday on the oil markets.

Interesting today in Europe. Europe did open higher despite all the big losses yesterday, it was looking more positive. The announcement that Hong

Kong is going to have higher travel restrictions between Hong Kong and the Chinese Mainland - that has seemingly hit European markets. They pared back

the gains they had earlier today.

U.S. futures, pointing higher, so some positivity there. I think it'll be interesting to see what earnings we get out today in the US. Apple,

Starbucks, also LVMH actually in Europe and all of these stocks, of course have exposure to China. So we'll be looking out for any notes on the

outlook for Q1 and see whether the China exposure is being taken into account already -- Zain.

ASHER: All right, Anna Stewart live for us, thank you so much.

Britain has decided to use Huawei as equipment for its 5G network despite pressure from Washington, but the British government says the Chinese

telecom giant will be excluded from security critical core areas.

The U.S. has asked Britain to ban Huawei from the country's network entirely. It clearly has chosen not to go that route.

Hadas Gold is joining us live now from London. So Hadas, is this basically the U.K. essentially trying to please both sides, trying to have its cake

and eat it as well.

HADAS GOLD, CNN BUSINESS REPORTER: Zain, it is an interesting middle ground decision for the U.K. to make, but it is the most important country, the

most important ally to the United States, thus far, to not take the U.S.'s advice on Huawei.

Now, the U.S. wanted the U.K. to completely ban Huawei from its system, but that is clearly not happening. And it's, I think, also an important marker

for where the U.K. standards going forward, especially after Brexit. Where will it stand between Asia and between the United States?

The U.K. Government today has decided that Huawei can be a part of its 5G network, but it can only be limited to 35 percent of that network. It will

be banned from what it calls core security functions.

[09:10:10]

GOLD: It will also be banned from operating in sensitive places like military bases, or national security bases or things like that. So they

will be allowed in some sense, but not entirely, not to be able to sort of take over the network.

Now keep in mind, Huawei technology is already an important part of the 5G and 4G network here in the United Kingdom, so if they were to ban them

entirely, they would have had to strip out all of that technology.

It's an interesting tug of war, though for the United Kingdom, between politics, between economics and between national security, because on the

one hand, Boris Johnson has promised that the entire country will have high speed 5G connectivity by 2025, and Huawei is the leader when it comes to 5G

and they also offer at a better price than some of their competitors.

And, also on the other side, you have the United States which of course, was lobbying very heavily both privately and publicly on Twitter for the

United Kingdom to not go with this plan.

We actually just got a statement from a senior administration official that says that the Trump administration is disappointed in this decision and

that there is no safe option for untrusted vendors to control any part of the 5G network, and the Trump administration says that they will continue

to try to push other countries to completely ban Huawei.

Now, Huawei for its part, I'll pull up their statement right now, they said that they are reassured by the U.K. government's confirmation that we can

continue working with our customers to keep the 5G rollout on track. This evidence based decision will result in a more advanced, more secure and

more cost-effective telecoms infrastructure that is fit for the future, gives the U.K. access to world-leading technology and ensures a competitive

market.

But the United Kingdom clearly thinks it's found some sort of middle ground. They say that they are assured that can protect themselves against

any sort of national security threat that may be posed by China.

Now, Huawei has always denied that the Chinese government can have control over them, but there is a law in China that says essentially any Chinese

company has to help out the Chinese government if requested by the Chinese. But Huawei says they will never acquiesce to such decisions, they're quite

pleased with this.

The U.K. government thinks that this is a proper middle ground that can protect against it. But the real question will be, how will this affect the

U.S. relationship? Thus far, Zain, we've seen no tweet yet from President Donald Trump.

ASHER: Hadas Gold, thank you so much. These are the stories making headlines around the world. Prince Andrew has provided "zero cooperation"

with the investigation into alleged sex trafficker, Jeffrey Epstein. That's according to the U.S. attorney who is in charge of the case. This comes

after the Prince told the BBC in November that he was willing to help any investigation.

New developments in the investigation into Sunday's helicopter crash that killed NBA legend, Kobe Bryant and eight others. Investigators say the

helicopter had been granted special permission to operate in foggy conditions near Los Angeles.

And National Transportation Safety Board says the last communication with traffic control, the pilot said he was climbing to avoid a cloud layer.

In Washington, President Trump's lawyers are set to resume their opening arguments in his impeachment trial in their final day of arguments.

Yesterday, it largely ignored disclosures from former White House adviser, John Bolton that said the President tied aid to Ukraine to the country's

possible investigation of the Bidens.

Suzanne Malveaux joins us live now from Capitol Hill. So, Suzanne, just more specifically, walk us through how Trump's legal team tried to downplay

the John Bolton manuscripts?

SUZANNE MALVEAUX, CNN U.S. CORRESPONDENT: Sure Zain, well, we are just four hours away from the White House defense team. Their final chance to make

the case that the President should not be removed from office. We're told that they're going to take just two hours to do that before wrapping up the

day, and then we might see the next phase of this trial begin in earnest tomorrow with the question -- the 16-hour question period.

I have to tell you, day two yesterday, I talked with many Democrats, including Senator Kamala Harris, who really thought that the Bolton book,

the manuscript was a game changer.

In the meantime, I also talked with Republicans senators like Cornyn who actually played it down. But behind the scenes, a lot of buzz, a lot of

concern, still a big question, Zain as to how this is going to impact the trial.

(BEGIN VIDEOTAPE)

MALVEAUX (voice over): President Trump's defense team spending hours avoiding the elephant in the room, former National Security adviser John

Bolton claims President Trump told him in August, the hold on nearly $400 million in military aid to Ukraine was linked to investigations into his

political rivals, which undermines a key pillar of the President's impeachment defense.

(BEGIN VIDEO CLIP)

MIKE PURPURA, DEPUTY WHITE HOUSE COUNSEL: Anyone who spoke with the President said that the President made clear that there was no linkage

between security assistance and investigations.

(END VIDEO CLIP)

MALVEAUX (voice over): But late into the evening, attorney Alan Dershowitz finally addressing the claims made by Bolton.

(BEGIN VIDEO CLIP)

ALAN DERSHOWITZ, MEMBER OF PRESIDENT TRUMP'S LEGAL TEAM: Nothing in the Bolton revelations, even if true would rise to the level of an abuse of

power or an impeachable offense.

(END VIDEO CLIP)

[09:15:08]

MALVEAUX (voice over): Democrats need four Republicans to join them in order to subpoena new witnesses like Bolton.

G.O.P. sources tell CNN three senators are almost a certainty at this point.

(BEGIN VIDEO CLIP)

SEN. MITT ROMNEY (R-UT): I think it's increasingly likely that other Republicans will join those of us who think we should hear from John

Bolton.

(END VIDEO CLIP)

MALVEAUX (voice over): President Trump's legal team spent Monday focusing on the process and the Bidens, which they say wasn't part of the plan, but

the Democrats forced their hand.

(BEGIN VIDEO CLIP)

PAM BONDI, MEMBER OF PRESIDENT TRUMP'S LEGAL TEAM: Hunter Biden's decision to join Burisma raised flags almost immediately. We would prefer not to be

talking about this. We would prefer not to be discussing this. But the House Managers have placed this squarely at issue, so we must address it.

(END VIDEO CLIP)

MALVEAUX (voice over): A source telling CNN that Republican Senator Patrick Toomey resurrected the idea of a possible witness swap. But Democrats have

repeatedly said such a trade, say Hunter Biden for John Bolton was off the table.

(BEGIN VIDEO CLIP)

SEN. ED MARKEY (D-MA): Hunter Biden is not on trial. This is clearly an attempt to feed red meat to their base, but also red herrings to take us

away from the central issue.

(END VIDEO CLIP)

MALVEAUX (voice over): This as new details from Bolton's manuscript could further strengthen the case to call Bolton to testify. "The New York Times"

reports Bolton writes that he privately told Attorney General Barr that he had concerns President Trump was effectively granting personal favors to

the autocratic leaders of Turkey and China.

Bolton claims Barr replied he was worried that Mr. Trump had created the appearance that he had undue influence over what would typically be

independent inquiries.

The Justice Department denying the claims in a statement saying the account as related in the times grossly mischaracterize what Attorney General Barr

and Mr. Bolton discussed.

(END VIDEOTAPE)

MALVEAUX: Senator Cornyn and the overwhelming majority of Republicans are telling me that they are not going to make any announcements about

witnesses, any decisions around that until after the process of the White House counsel making their case, the 16 hours of questions and then the

four hours of debate.

So all eyes, Zain, now on the last two hours of the defense, how are they going to handle the Bolton issue? Bolton is a good friend to many of the

Republican senators. The question being, will these White House lawyers actually attack or try to discredit Bolton, as the President would prefer -

- Zain.

ASHER: Suzanne Malveaux, thank you so much.

President Trump is set to unveil his long awaited Middle East peace plan at the White House. He says it can bring peace to the region if the

Palestinians go along with it, but they're already rejecting the plan saying it offers too many concessions to Israel. When President Trump lays

out the Middle East plan, CNN will bring it to you live around 5:00 p.m. London time.

Okay, coming up, we'll have more on how the coronavirus outbreak is impacting the air travel industry when we hear from the CEO of IATA and in

just a few days, Britain will officially -- it's finally here, guys -- officially leave the European Union. How the world is preparing for that

exit, that's next.

(COMMERCIAL BREAK)

[15:21:28]

ASHER: All right, welcome back to FIRST MOVE coming to you live from the New York Stock Exchange where it's still looking like a solidly the higher

open for U.S. stocks this Tuesday.

Dow futures already pointed higher, triple digits. Stocks are set for a bounce after two days of sharp losses on coronavirus fears.

Tech stocks are on track for the best gains. The U.S. Federal Reserve begins its first policy meeting of the year today. The economic effects of

the coronavirus are sure to be a main tool kit and talking point.

For more of the markets, I'm joined now by John Bilton. He is the Head of Global Multi Asset Strategy at JPMorgan Asset Management. Thank you, John,

so much for being with us.

So the FOMC meeting today and tomorrow, discussing balance sheet, short term interest rates as well. They have intimated that they plan to leave

interest rates steady this year, but what are we expecting? Has the global outlook changed somewhat since the beginning of the year?

JOHN BILTON, HEAD OF GLOBAL MULTI ASSET STRATEGY, JPMORGAN ASSET MANAGEMENT: Well, I think that what we've seen is that the initial focus

that we've had at the beginning of the year that was coming from the resolution around Phase 1 of the trade talks between the U.S. and China,

and obviously a year where we've had a significant monetary policy impulse easing across the board the U.S., of course, the ECB as well and others

getting in on the act.

It has turned to a year where, I think investors are quite rightly turning to underlying growth, and while that's perhaps less exciting than evoked

fuzz on monetary policy, ultimately, its earnings that are going to drive returns in our view, and the information so far is relatively good.

I think the Fed being on hold, perhaps with a slight dovish asymmetry, in certainly their tone will be something that markets will take comfort from.

But I think without doubt, actually it's less about the Fed and more about earnings season that investors are ultimately focused on at the moment

because they want to see evidence that the macro data which is suggesting that the economy is stabilizing from a little bit of weakness last year is

actually following through into earnings and ultimately into corporate confidence.

ASHER: Yes, 2019 was certainly overall for stocks turbulent, it was lackluster when it came to earnings. We've got a very busy earnings week

this week. How do you anticipate earnings season for 2020 comparing to that of last year?

BILTON: Well, I think it's going to be night and day. Last year, we got approximately zero percent earnings growth. Yet, we saw world equities

rally more than 20 percent across the board and a very, very strong performance in the U.S.

And I think this year, we're going to be turning it around, it's going to be less about valuations, less about that monetary policy impulse, pushing

valuations up and much more about looking for those underlying earnings.

And the outlook is relatively reasonable. If we look at where we expect growth globally to be, probably roughly at trend around the globe this

year, gradually improving from, you know, current weakness towards a sort of trend like level of growth by middle year. What does that translate to?

Perhaps around three percent real growth, a couple of percent inflation, add onto that the dividend that one would normally clip from the equity

markets and you're looking at up a single digit returns without actually expecting the multiples to do anything for you.

So already, I think the focus on earnings, the focus on growth is going to be much more palpable this year than it was last year, which was very much

about monetary conditions and about multiples.

ASHER: We've already had the Phase 1 on the U.S.-China trade deal signed, obviously, though there are tariffs that are still in place. How much is

the market really itching and how much does the market desperately need that Phase 2 deal signed sooner rather than later?

[09:25:13]

BILTON: Well, I think the market right now recognizes that -- you know, trade deals take a long time, particularly when there is large, wide and

complex as it would be between the U.S. and China. And I think the expectations that we get further rounds of trade negotiation and deals this

year is relatively low.

I think instead, it's a question of looking for some level of stability in that regard, and recognizing that, globally, we've seen a slowdown in a

number of measures, particularly inventories, capital spending, and consumer sentiment, and that all seems to be bottoming some of the key

leading indicators.

Things like DRAM prices, semiconductor volumes -- all these kind of things, which are good leading indicators for the world economy. We're actually

looking a little bit healthier. We've not yet seen CapEx coming through.

It's not necessarily that we need to see a major improvement in, you know, as in another phase of trade negotiation, but simply stability and that in

itself, I think, with a more stable macro outlook -- a more reasonable macro outlook will actually lead to a little bit more confidence and a

little bit more earnings growth and activity.

ASHER: And it looks like we are running out of time. I wanted to ask you about the coronavirus because, of course that is a risk event that the

market has not been prepared for at all, but we'll have to leave it for another time.

We'll see whether this market is resilient enough to handle those headwinds coming from Asia. Thank you so much, John Bilton from JPMorgan Asset

Management.

BILTON: Thank you.

ASHER: You are watching FIRST MOVE. The opening bell is right up after this short break. Don't go away.

(COMMERCIAL BREAK)

[09:30:00]

ASHER: All right, that was the opening bell here on Wall Street. Welcome back to FIRST MOVE, everyone. I'm Zain Asher, coming to you live from the

New York Stock Exchange.

Let's take a look and see the how the markets are doing. As expected, as I mentioned when I was looking at futures a little bit earlier on the show,

we do have a slightly higher open on Wall Street today.

The Dow is up about 75 points already right out of the gate. Definitely, a sharp turnaround from yesterday where the Dow was down 500 points or so.

However, despite the green arrows on your screen, investors do remain deeply concerned about the spread of the coronavirus in Asia. We now know

that more than 4,500 cases have been confirmed in Mainland China and more than 100 people have died from this disease.

That said, global stocks have fallen sharply since late last week, and stocks may simply have been overdue for a bounce. Investors using the red

arrows we saw yesterday as a buying opportunity.

European stocks, let's take a look here, which have also fallen sharply on virus fears, too, are higher across the board as well today. Hong Kong's

flagship airline, Cathay Pacific is cutting the number of flights to and from Mainland China by at least 50 percent. The measure designed to contain

the coronavirus will be in place until the end of March.

It's just one example of how the outbreak is really hitting the airline industry. For more, I'm joined now by Alexandre de Juniac, CEO of the

International Air Transport Association, Mr. de Juniac, thank you so much for being with us.

So what type of short term, at least disruption is the airline industry bracing for given the rapid spread of this disease?

ALEXANDRE DE JUNIAC, CEO, INTERNATIONAL AIR TRANSPORT ASSOCIATION: You know, the airline industry, unfortunately or fortunately, as a community

with some experience from previous outbreaks, the MERS, SARS or Ebola, and so we have prepared measures first.

Secondly, we follow the recommendations of the World Health Organization, the WHO or the ICO or the Center of Disease Control of Atlanta, and up to

now, the measures that have been in place we think reasonable, they can evolve, but they are reasonable. So there are no restriction for

international flights from and to China.

There are recommendations to implement temperature control for exiting China and some also temperature control for travelers coming from China

that could be extended to other countries if there is a need for that.

So currently, we think that the measures that are in place are good and effective and efficient. They could evolve, but they are good, effective

and efficient to limit the propagation of the virus.

ASHER: So just in terms of how this is impacting airlines overall, and it's not just the fact that there has been a virus, there's been an outbreak in

China. It's also there have been questions about the delayed response. Who knew, what, when? Could certain measures have been implemented sooner?

Overall, what kind of response -- what kind of improved response is needed from China in order to limit the risks to airlines overall?

DE JUNIAC: First of all, we have to say that the way the Chinese government and the Chinese authorities are dealing with that issue is very rigorous.

They are taking that very seriously. The containment measures looks appropriate. They have been reacting very fast and efficiently.

Now, from an international perspective, we still closely follow the situation, monitor the situation and follow the recommendation of

international organizations.

For us, the key element is to have a coordinated approach following international regulations and international authorities' recommendations,

that's the key issues if we want to limit, you know, the evolution of this outbreak.

ASHER: Okay, so just switching now to Boeing. Obviously, you are head of IATA, so I do have to ask you about Boeing. Given that there is an

expectation that the 737 MAX is going to be recertified by the middle of this year, what needs to happen for there to be much more public confidence

and employee confidence in Boeing? How do they restore that?

[09:35:18]

DE JUNIAC: There are two elements there. You know, first of all, we have always said that the reentry into service of the 737 has to be done in a

coordinated way between the certification authorities. So it will be, we hope that it will be a common decision or common schedule between, you

know, the F.A.A. in the U.S., and an assigned new hub for the Chinese authorities in China, all taking the same decision at the same time.

Because the coordinated approach for certification is a key issue for us, and it has been the best guarantee of safety all over the past of 60 to 70

years, and it has brought that industry in this safety situation which is the best in the world. So we actively advocate in favor of a coordinated

approach.

Secondly, it has to be also very transparent, explaining to the public that everything has been done to identify the causes and the problems of the

aircraft and to implement the right solution and to control and to certify that these solutions are the right ones and working properly.

So, if it's done in that way and in a coordinated manner between the authorities, I think that we will see a good reentry into service of that

aircraft and will restore the confidence of the public in this aircraft which is of course a key issue.

ASHER: Alexandre de Juniac, CEO of IATA. Thank you so much. Appreciate that.

Coming up here on FIRST MOVE, as Britain prepares to Brexit, the former government minister joins us to look ahead at the transition period and

what's next.

(COMMERCIAL BREAK)

[09:40:26]

ASHER: Britain is gearing up for Brexit. In just a few days, the country will formerly leave the European Union setting in motion something that

started almost four years ago with a referendum. The world braces for the breakup.

Joining me now to look ahead is Lord Jim O'Neill, a former British Treasury Minister for the Conservative government. He joins us live now from London.

Sir, what can we expect from the transition period do you think that happens from Friday onwards as the U.K. and the E.U. negotiate over a trade

deal?

LORD JIM O'NEILL, FORMER BRITISH TREASURY MINISTER: So unfortunately, probably more uncertainty. I mean, Friday really is the end of the

beginning, as I'm sure you've discussed and focused on before.

The really challenging parts about trade at least now follows and the U.K. is somehow have got to negotiate a trade deal with the E.U., as well as

pursuing trade deals with many other places, including the States.

And we only have an agreement to do that by the end of this year, which virtually any historical precedent suggests that is close to impossible to

doing.

So there's going to have to be very clever ways of at least coming to an interim deal, otherwise, the dreaded hard Brexit threat will reappear at

some moment.

CHATTERLEY: So how much of a mistake was it for Boris Johnson to rule out any kind of extension?

O'NEILL: So, let's see if it remains the permanent position. I mean, he has certainly made it strongly the case that he has no intention of making an

extension. But at the same time, creating a lot of excitement about what they're going to do to help our economy, which, importantly, markets have

sort of taken on board a little bit.

And at some point, the two have got to square together. So my own hunch is that they will end up with a very sort of loose outlined framework for a

deal with the E.U. that actually will be an extension to the transition period in anything other than word.

Otherwise, he will end up asking for a formal extension, but the idea that you're going to be able to fully renegotiate for all different sectors,

something to compensate for what the U.K. is leaving, it's just not practical in my view.

ASHER: So how much pressure is there on businesses during this transition period, which obviously, as you talk about has so much uncertainty for

companies to really analyze their supply chains, analyze costs, think about potentially relocating certain operations? What does this mean for

businesses?

O'NEILL: So I think it really depends on the degree of competitiveness of the individual business. For the auto industry, it is close to being a

nightmare given the fine price margins and the important sort of global assembly point the U.K. has successfully played in the past 40 years.

But you can see the fallout of that in advance of this week. I think yesterday we had some data about the weakest U.K. auto production since

2008. So a lot of those companies are already making decisions, but the other extreme, some of the few really luxury goods companies, for example,

some of the high end clothing or luxury goods firms that sell into the likes of China and beyond, they probably don't have to worry as much,

although it's an issue for everybody.

That's just in terms of how to approach the pricing issue, then of course, it's the whole regulatory regime that comes with it, too. So this is partly

why the U.K. economy has grown probably half its potential the past three years because no real big businesses or for that matter, small ones either

want to or know how to invest with this uncertainty persisting.

ASHER: I want to pivot now to what made headlines just a few hours ago and that is the U.K.'s decision to allow Huawei a limited role in building out

its 5G networks. I just want to get your take on that decision because a lot of people are saying it seems as though the U.K. is sort of trying to

have its cake and eat it and trying to please both China and the U.S. as it negotiates these trade deals after leaving the E.U.

[09:45:00]

O'NEILL: So here I'd be a lot more sympathetic to the government. I think the U.K. is trying to have his cake and eat it, but it's trying to do what

is sensible for the U.K. as the U.K. develops a post Brexit global Britain narrative.

You know, we shouldn't be overly pressurized by anybody, whether it's the U.S. or anybody else, and we need to do what is in the strategic,

commercial and otherwise interests of the U.K. and we've had plenty of security experts, which according to my knowledge, is regarded by U.S.

Intelligence as being at least as good as the U.S., if not better, saying that we can do as the U.K. has now publicly indicated it is going to do.

So why should we just bounce the pressure on the U.S. about this issue? You know, because it is probably because of the U.S. own tactical or strategic

businesses or plans with China and they perhaps want us to be part of it.

But the U.K. has to explore its future independently with the U.S. as it does with China. And I think however, it seems, this is the right decision

in my view.

ASHER: All right, Lord Jim O'Neill, thank you so much for being with us. Lord Jim O'Neill, former British Treasury Minister, thank you so much for

joining us.

O'NEILL: Thank you.

ASHER: All right, now to West Africa. In Ghana, one Academy is on a mission to spread interest in robotics and science amongst the youth. Julia

Chatterley has that story.

(BEGIN VIDEOTAPE)

JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE (voice over): Ghana's capital city of Accra is home to the Ghana Robotics Academy

Foundation, which aims to bridge the gap between scientific theory and practice for children of all ages.

(BEGIN VIDEO CLIP)

YASMINE, GRAF STUDENT: I have built a robot, a robot that's designed to pick up items and then to navigate through lines.

(END VIDEO CLIP)

CHATTERLEY (voice over): Led by Yaw Okraku-Yirenki, the Academy has taught over 7,000 students how to code using LEGO Robotics as part of their

robotics inspired science education program, RISE.

(BEGIN VIDEO CLIP)

YAW OKRAKU-YIRENKI, DIRECTOR, GHANA ROBOTICS ACADEMY FOUNDATION: The Ghana Robotics Academy Foundation is an organization set up to give young people

opportunities so that they can become problem solvers.

The 2019 Robo-Fest World Championship was won by the Methodist Girls Senior High School. We are very happy. I mean, it just put us in the spotlight all

over the world.

(END VIDEO CLIP)

CHATTERLEY (voice over): Since the all-girls team's triumphant when Ghana's Ministry of Education has announced that robotics will soon be taught from

the basic level of education in schools.

(BEGIN VIDEO CLIP)

OKRAKU-YIRENKI: We should see robotics introduced at least at the junior high level and the senior high level and that will be very, very good.

(END VIDEO CLIP)

CHATTERLEY (voice over): The Academy's founder, Ashitey Trebi-Ollennu is a robotics engineer for NASA, currently leading a mission to discover the

makeup of Mars. Hoping to inspire children, he set up the school in 2011, in his home city of Accra.

(BEGIN VIDEO CLIP)

ASHITEY TREBI-OLLENNU, FOUNDER, GHANA ROBOTICS ACADEMY FOUNDATION: I am a strong believer in what we call STEM education -- Science, Technology,

Engineering and Math. And I personally believe that every kid has the capability to do science.

(END VIDEO CLIP)

CHATTERLEY (voice over): Thanks to the skills acquired at the Academy, many of their alumni and are working professionally in aerospace, mechanical,

and electronic fields.

(BEGIN VIDEO CLIP)

OKRAKU-YIRENKI: I'm happy to report that some of our young people through hard work by the team that I work with, and the kids on hard work have

gained admission into top universities around the world.

And I think that if we keep up this with, the numbers that you've seen, it can only multiply and then we can begin to solve the problems that have

remained unsolved for so, so long.

I think Ghana is in a hold position to be a leader in this space. There's no question about that.

(END VIDEOTAPE)

ASHER: You are watching FIRST MOVE. We'll be right back.

(COMMERCIAL BREAK)

ASHER: All right, this just in to CNN. Firefighters are facing off with police in Paris as they demonstrate for better working conditions and an

increase in pay as well. You see firefighters marching the streets there and obviously, police trying to contain it.

Demonstrations have gotten pretty heated at times. We've seen some crashes and smoke bombs going off as well. We'll keep an eye on these protests

happening in Paris as firefighters are demanding higher pay, better working conditions as well.

Okay, so here's today's Boardroom Brief. Airbus has reached a tentative deal with French, British and U.S. authorities after a four-year

investigation into allegations of corruption.

The European plane maker is accused of using middlemen and bribes to sell their jets. The exact supplement has not been revealed, but the aerospace

group is expected to pay billions of dollars in penalties.

And Mackenzie Bezos, the former wife of Amazon founder, Jeff Bezos is selling $400 million worth of her Amazon stock. According to a report, she

now has around 19.5 million shares.

Some high profile profit disappointments top our Global Movers today. Let's take a look here. 3M shares are down about over four percent. The Dow

component is reporting weaker than expected earnings due in part to weak Chinese sales. The manufacturing giant says it will cut some 1,500 jobs as

part of a top to bottom restructuring effort.

Next on our list is Pfizer, another Dow component there, falling as well, down about three and a half percent. The drug firm's earnings missed

expectations as well.

Finally, bottom of your screen, Harley-Davidson down about two and a half percent on weaker than expected earnings and sales. The company says

motorcycle demand in the U.S. continues to weaken as the population gets older. U.S. sales fell for the 12th consecutive quarter.

Apple is set to reveal quarterly results after the closing bell today covering a highly lucrative holiday shopping season. These results come

just after Apple shares dip on fears the coronavirus could impact manufacturing in China.

Let's get a look with our Paul La Monica. So Paul, a lot of U.S. companies who are heavily exposed to China are really getting hammered right now,

hammered so far this week. Just walk us through it. I mean, it is companies like Apple for example, companies like LVMH and various sort of luxury

goods items as well.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, LVMH which is buying Tiffany. Clearly, there are concerns there about a consumer slump in China because

of coronavirus fears. Apple which has had and is expected to show a rebound in China sales in this most recent quarter, everyone is going to be wanting

to see what Tim Cook has to say about demand going forward.

Because remember, it was about a year ago that Apple stunned the world and Wall Street when it warned that China's sales were going to weaken and that

was going to bring its overall profits down. So hopefully we won't get a repeat of that scenario there.

But there are many other U.S. companies with exposure to China that could be hit. Starbucks, for example, Yum Brands, which has, you know, big

presence with KFC and Taco Bell and Pizza Hut in China.

And then a lot of the American casino companies have exposure because of their properties in Macau. So if you look at companies like Wynn Resorts,

Las Vegas Sands, MGM, anything that keeps consumers at home, and not spending could be a problem for all these firms.

ASHER: So about 3M because they reported earnings. Their share is down about four percent or so. They're suffering because of weak China sales,

and they're also laying off about 1,500 workers.

LA MONICA: Yes, unfortunately 3M laying off about one and a half percent of its global workforce. This comes on the heels of layoffs that were

announced last year.

[09:55:07]

LA MONICA: 3M has been one of the biggest companies that has been hit by trade tension and the global slowdown that has been concerning many

investors lately about you know, weakness in the Chinese economy and whether or not that spills over to other emerging markets and perhaps even

Europe.

So 3M, most known for Post-Its and Scotch Tape, they really need to get their organization kind of right-sized for a global economy that isn't as

strong as many at hoped it would be.

ASHER: All right, Paul La Monica, live for us there. Thank you so much.

That's it for the show. Thank you so much for watching.

I'm Zain Asher. "CONNECT THE WORLD" starts right after this short break. You're watching CNN.

(COMMERCIAL BREAK)

[10:00:00]

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