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First Move with Julia Chatterley

The U.S. Gains Almost 1.4 Million Jobs In August, As Unemployment Rates Fall Below 10 Percent; The NASDAQ Heading For Another Down Day After Billions Wiped Off Big Tech In Just A Few Hours; Russia Releases Information On Its Vaccine Trials. Aired 9-10a ET

Aired September 04, 2020 - 09:00   ET

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

[09:00:06]

ALISON KOSIK, CNN ANCHOR: Live from New York, I am Alison Kosik. This is FIRST MOVE and here is your need-to-know.

The U.S. gains almost 1.4 million jobs in August, as unemployment rates fall below 10 percent.

Tech selloff. The NASDAQ heading for another down day after billions wiped off Big Tech in just a few hours.

And getting the data, Russia releases information on its vaccine trials.

It's Friday. Let's make a move.

Welcome to FIRST MOVE. I'm Alison Kosik. So glad you can join us. I'm filling in for my colleague, Julia Chatterley, and it's been a busy Friday

so far on the global markets. Investors are bracing for another rough day for tech, after Thursday's steep selloff, the worst day on Wall Street

since June.

We've also got newly released U.S. employment numbers. The government reporting that 1.4 million non-farm jobs were created in the U.S. last

month that came in pretty much as expected.

A lot of those jobs created were part-time Census workers, so government jobs there.

Also important, about half of the jobs lost in March and April have been recovered so far and no fiscal help for the unemployed is on the horizon

from Washington.

Meantime, the U.S. unemployment rate has dipped below the 10 percent mark for the first time since March. It fell to 8.4 percent.

Wall Street futures looks like they've strengthened since the release of the report. The Dow and S&P are now in the green, but we are keeping an eye

on tech. You see the red arrows there. It is still set to open weaker.

Tech was the big loser in the previous session, falling almost five percent, outpacing losses for the Dow and the S&P. Leading tech names like

Apple, Tesla and Microsoft were hit particularly hard. It's important to note here that the NASDAQ erased a mere one week of gains with yesterday's

drop.

And get this, the NASDAQ is still up 27 percent, despite those losses, it's up 27 percent year-to-date.

European stocks are trading mostly higher right now with German stocks under a bit of pressure. Asia-Pacific stocks fell across the board with

Australian stocks, the biggest losers, down some three percent.

All right let's get right to our drivers now and more on today's jobs numbers and I want to bring in Christine Romans. She joins us live now.

So, I got to look at this report, you know, it sounds good when you hear of the headline, but we are still down 11.5 million jobs since the pandemic

hit.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, I think it's really important to take the whole last six months as one big snapshot,

right? This has been a really terrible time for the American workforce over the past six months and we've added 1.4 million jobs back of those millions

and millions that were lost.

But the pace of that recovery is slowing a little bit, so you saw some brisk job gains at the beginning of the summer and now that's slowing a

little bit.

Also, you're right to point out that some of the hiring was temporary Census jobs, 238,000 temporary census jobs, and when you look within some

of these sectors, you can see they are also temporary help agencies, they had a lot of jobs gained there, so not necessarily permanent jobs.

There were jobs in manufacturing though, 29,000 in manufacturing, important to point out. So you're seeing at that big March and April, 22.2 million

jobs lost, now we've added 10.5 million back and the Labor Department quick to point out here and note that because of the way people were maybe

misclassifying themselves when they are contacted for the survey here, you could have an unemployment rate that's actually seven percentage point

higher, so somewhere in the nine percent range for the unemployment rate.

The lowest we've seen since March, Alison, right, but still in normal times, it would be considered absolutely devastating here.

KOSIK: Absolutely. And, you know, it makes you think about how this recovery is going now and how it's going to go as we get into the winter

time when we have the flu to deal with and the pandemic is still raging.

How much do you think Congress is going to take a look at this report and say you know what, we better get going on this relief bill?

ROMANS: They need to get going on the relief bill. So, this August snapshot here, these are the first month of the pandemic that people didn't get the

$600.00 a week in extra jobless benefits. They had spent their stimulus check money. The PPP has run out.

So there is an urgency here behind Congress to get fiscal relief to people to make sure that we don't have a very fragile recovery turn south here

into the fall, especially as you point out, heading into what is going to be a brutal calendar in terms of the health crisis as we head into the flu

season.

So I think it's important that they do something and I think that they're probably hearing from their constituents about food pantries that are being

overstressed, lines around the block of people who have never gone to a food pantry before who are now food insecure.

You've got millions of people who are still out of work. You have got all of these concerns about evictions and rent coming due. So we have still a

serious job crisis here.

I mean, when you think about that hole, 22.2 million jobs is the hole we dug. We're just about halfway climbed out of that hole. That's got a lot of

work to do still.

[09:05:28]

KOSIK: And the data still comes in a little dirty, doesn't it? Because it continues to be adjusted and it's hard to really gauge from one month to

another where the improvement is.

ROMANS: You know, an economist this morning said the American labor market is like a whirlpool and sometimes it can look kind of smooth on top and

have an appearance on the top, but underneath, it can be very turbulent.

And I think that's what we're seeing right now, just the sheer volume of the job loss and the crash in the economy was so severe that everything now

on the way back looks distorted.

You're going to hear a talk about record job gains over the past four months. That's true, but it was record job losses, the two months before

that.

So how this economy recovers is going to be, I think you're right, the data is going to be dirty and we're going to have to really try to take each

little piece and try to figure out what the direction is.

The direction is still the right direction, but at a much slower pace and that's what I'm worried about now that fiscal stimulus is over.

KOSIK: Yes, all right, CNN's chief business correspondent, Christine Romans, thanks for breaking all that down for us.

ROMANS: You're welcome.

KOSIK: U.S. stock futures mostly flat at the moment after Thursday's big selloff. The tech-heavy NASDAQ dropped almost five percent. Apple lost $180

billion in market value yesterday.

Paul La Monica joins us live with more. You know, it felt like this selloff came out of nowhere. Did investors just wake up yesterday and decide stocks

are overvalued, perhaps?

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think that Alison, had many investors finally look ahead and realize, okay, we have a jobs report

coming on Friday, who knows what exactly that's going to look like.

We've got the long weekend looming, a vacation, Labor Day on Monday. So let's take some money off the table. You know, it's the usual kind of

cliche, sell into these big rallies, take profits.

But when you look at how well the NASDAQ and the S&P 500 for that matter which is very tech heavy, they both hit all-time highs as recently as --

when was it? Oh, yes, Wednesday. So it's not as if this is a market in crisis. We've just had a day and a half of selling.

It makes sense for investors to stay, you know what, Apple, Amazon, Microsoft, and Tesla, and these stocks have done really well. Let's sell.

Maybe Tesla is a completely different phenomenon because that stock has just gone bonkers, but you know, you look at Apple and Microsoft, the big

tech giants, they've done really strongly this year and it makes sense that investors would want to pull some money off the table and take some

profits.

KOSIK: So talk to me about what this selloff tells you, because this was not a broad selloff across all sectors. It really was being led the way

down by tech. What does that show?

LA MONICA: Yes, I think what might be encouraging, and we'll have to see what happens after the market opens today, Alison, at last check you did

have the Dow up and the S&P 500 flat to slightly higher, even though the NASDAQ is pointing to another day of losses. What might be happening here

is that investors are doing that classic sector rotation.

The winners can't win forever. Big Tech has to pull back at some point, and you need new market leaders to emerge.

So interestingly, banks, they are rallying premarket. You're seeing the cruise line stocks, which have been obviously decimated because of what's

happened to their business, they're rebounding as well.

So it's partly a continued low interest rate play with the banks, a maybe a return to normalcy for the global economy and that's what's happening, I

think, with the cruise lines.

I don't think that investors are panicking all of a sudden and saying, oh, wow. I don't think people are going to buy as many iPhones or subscribe to

Netflix as much anymore. It's just that Apple and Netflix got bid up way too high and there are better bargains in this market.

KOSIK: We will see if it's going to be a one-day event. The market opens in about 20 minutes. Paul La Monica, great seeing you.

The key model used by the White House Coronavirus Taskforce now projects that more than 410,000 Americans will die from coronavirus by January 1st.

That's more than double the current U.S. death toll.

Scientists partially blame the declining vigilance of Americans. Elizabeth Cohen joins me now live. She's from CNN health. Elizabeth good to see you.

Walk me through how this number came to be, and when we hear that Americans are being less vigilant, what does that exactly mean?

[09:10:07]

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Alison, this number is so disheartening. It shows the incredible climb that they think deaths will

take over the next couple of months.

They attribute it to several factors, but one of them is they say Americans aren't wearing masks the way that they did at one point in the outbreak.

Masks save lives. There is no other way to say it.

Let's take a look at these numbers. So current deaths in the pandemic to date in the U.S., nearly 187,000. Projected by January, if we keep doing

all the things that we're doing, 410,000. So that is more than doubling of the number of deaths in just a matter of months.

Projected by January, if we don't take interventions, in other words, if we do what some have been advocating, which is hey, just let it all go and let

people get infected. Let's sort of see what happens -- 620,000 deaths.

So these numbers really spell it out. I know there is incredible pandemic fatigue. We've been at this since March, but this advance of the pandemic

is exponential, it is not linear. It is not just going to get worse, it is going to get much worse in the months to come according to this projection

-- Alison.

KOSIK: Those really are stunning numbers to see. How much of a dent would it make in those numbers if everybody just wore a mask?

COHEN: It would definitely make a difference. If people were really vigilant about masks, that would make a difference. And what we saw is if

people aren't, you know, there are some out there advocating for just getting herd immunity naturally.

Let's just let everybody get infected, whoever dies, dies, but then we will have an immune population that may sound sort of reasonable in a way, but

you kill hundreds of thousands of people on the way to doing that.

So these numbers really show how that works.

KOSIK: Yes, they really do. All right, Elizabeth Cohen, great talking with you. Wish it was with better news. Thanks for being with us.

The first peer-reviewed results for Russia's COVID-19 vaccine trials, they've been released. Findings from the scientific community show the

vaccine is effective and revealed no serious side effects. One from Johns Hopkins University called the studies, quote, "encouraging, but small."

CNN's senior international correspondent, Matthew Chance is in Moscow and joins us live. So walk us through what you learned from this data.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it's quite interesting. I mean, first of all, it's the first time that the Russians

have made public any of the clinical data that they've got when testing their vaccine, this so-called Sputnik V vaccine that they approved for use

inside Russia last month.

And so any sort of insight into whether the vaccine is safe or effective, which are what the big concerns are, has been welcomed by the sort of

broader scientific community.

It's important as well that it's been sort of published in "The Lancet," which is one of the world's most prestigious medical journals and so

obviously, they have -- it has been peer-reviewed as it has appeared in that publication as well, and there's some very positive things "The

Lancet" has to say about the Russian vaccine.

As you mentioned, it says that it shows people who have the vaccine show no significant serious adverse effects. There are no big problematic side

effects. There are a few cases of headaches and mild fever, but nothing very serious at all, and so that's really important. It is pretty safe.

They also say that it generates an antibody response in a hundred percent of the participants. Now, there are only 76 people that took part.

Nevertheless, that's a good result. It could have been much worse.

Now, the Russians have seized on this as saying it's a real major positive that vindicates them in their early approval of this vaccine. Kiril

Dimitrov, who is the CEO of the Russian Direct Investment Fund, the sovereign wealth fund here in Russia that's been essentially funding

vaccine research saying, "The trial results confirm the high safety and efficacy of the Russian vaccine."

He also says that, "It is a powerful response to skeptics who unreasonably criticized the Russian vaccine," he said. But there are, you know, some

caveats in that "Lancet" article. Namely that the studies while encouraging are very small. And "Lancet" says the only large-scale sort of Phase 3

style trials involving tens of thousands of people can really decide whether the vaccine is effective when it comes to stopping illness with

COVID-19 -- Alison.

KOSIK: Interesting that it was published in "The Lancet," but still lots of skepticism surrounding this. Matthew Chance, live for us in Moscow. Thanks.

These are the stories making headlines around the world. Beirut is hoping for a miracle after signs of life were detected in a collapsed building one

month after an explosion devastated the Lebanese capital.

Special equipment has picked up a heartbeat and rescuers say they are now less than half a meter away from a possible survivor.

Our Sam Kiley is following all of these developments from Abu Dhabi.

Wow, Sam. This is really amazing.

[09:15:17]

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, an extraordinary series of events that were set in trail by a sniffer dog who arrived from

Chile on Sunday and on Wednesday evening, happened to be picking over this patch of rubble that many of us have walked past in the aftermath of that

explosion 28 days earlier, and picked up a scent, which he signaled was a human scent or possible human scent of a survivor.

The following morning, Thursday morning, the TOPOS Chilean rescue team, with their specialist equipment and scanners were able to pick up what they

suspected were signs of breathing and a heartbeat.

Now, that has been going on -- the rescue efforts were going on last night, but they've got paused to the anger of local people Beirutis who are highly

suspicious of any action taken by the authorities since it is the successive governments whom they blame for this explosion in the first

place that flattened, let's not forget, the homes of 300,000 people, or at least rendered them homeless, killing 200 people, Alison.

So in this context, they are now saying that they're about half a meter away from what they suspect may be a living being, but they are sending out

rather mixed signals because these are highly sensitive pieces of equipment that can be disrupted, of course, by the sounds of other people's breathing

and movement in a highly fragile environment.

But if this does result in a breakthrough, it will be nothing short of miraculous in a city that is desperate for signs of hope after not only

this catastrophic blast, but nearly a year now of increasingly violent protests against excessive government. The government resigned.

There is now a caretaker government after that explosion. There's a new Prime Minister that have been nominated. For many people on the streets in

particular, this represents nothing more than a reshuffling of a very corrupted card in the old dispensation that has ruled Lebanon since the

Civil War for many decades now.

So a deeply depressed city hit very badly indeed by this enormous explosion, now offered a limited glimmer of hope. And of course, there will

be a bit of letdown if, heaven forbid, a dead body emerges having perished in the last few hours of what is at the moment still, a very complex rescue

attempt.

KOSIK: Sam, we know you will be keeping track of this and we will be coming to you if anything changes here. Sam Kiley, thanks so much.

Coming up on FIRST MOVE, making sense of the data. We get more information on Russia's coronavirus vaccine, but does it actually provide any answers

on how effective it is?

Plus, counting on China. Why Hollywood is hoping that Chinese moviegoers could save the summer blockbuster.

(COMMERCIAL BREAK)

KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik and investors are bracing for more pain in tech land today. U.S. Tech stocks tumbled five

percent Thursday and are set to extend those losses in early trading today.

Remember, tech was sitting at a record high just two days ago. Thursday's NASDAQ route was painful to watch, but we've been warned for some time now

that big cap tech was overvalued.

Even after yesterday's losses, Tesla is still up almost 400 percent this year. Amazon and Apple are up more than 60 percent. Microsoft is up a mere

37 percent. These four big NASDAQ names are all lower in premarket trading today, but way off their worst levels.

Before the bell today, the U.S. reported that 1.4 million non-farm jobs were created in the U.S. last month. It's pretty much coming in as

expected. The unemployment rate fell by a greater than expected amount to 8.4 percent.

Today's payroll gains are solid, but it is still the weakest jobs number in the past four months.

Joining me now is Mark Zandi. He is Chief Economist at Moody's Analytics. Great to see you, Mark.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Thanks, Alison.

KOSIK: So the headline sounds great, unemployment rate dropping, more than a million jobs being added last month. What is your reaction?

ZANDI: Well, the good news, Alison is we are recovering. We're making our way back from the worst of the pandemic. But it's a slow recovery and it is

slowing and we've got a long way to go.

Just to give you a couple more numbers, the economy lost 22 million jobs in March and April. We've got about 11 million of those back. So we're halfway

back based on jobs. So yes, progress, but we've got a long way to go here.

KOSIK: You had talked recently about the real tsunami in unemployment is coming. Why do you say that and how bad could it get?

ZANDI: Well, you know, most of the job growth so far, recovery has been in industries that have gotten directly hit by the pandemic -- restaurants and

retail, transportation, leisure, and hospitality. The other parts of the economy, the other industries, job growth has been very lackluster, not so

much, and I think a lot of businesses in those industries remain very, very cautious and nervous and they're not going to make big moves until we're on

the other side of this pandemic.

So I do think those industries are at significant risk. And the thing I really worry about is if Congress and the Trump administration can't get it

together in the next few weeks and put together another fiscal rescue package, because that's going to be really key to helping all of the

unemployed and underemployed and keep the economy moving forward.

If we don't get support, then, I think the economy is going to weaken and we are going to see more job loss.

KOSIK: And let's focus a minute on what Congress can do here. What would you want to see in a Relief Bill to help prop up, you know, the labor

market, prop up the economy?

ZANDI: Well, I think key, most importantly, we need to provide more support to all of those unemployed workers. I mean, 8.4 percent is certainly better

than, you know, the close to 20 percent unemployment rate we had back in April, but 8.4 percent by any other standard is cataclysmic. That's a lot

of unemployed people.

And that doesn't include people who lost hours or people who have maintained their jobs in hours, but have seen their pay cut. So those folks

are under a lot of stress -- financial stress and they need support and help.

If they don't get it, they have no choice but to stop paying bills. They're not going to pay their rent. We're going to have all kinds of problems.

So, that's number one. And I do think we also need to provide help to state and local governments. They've been holding on hoping that the Federal

government will come through with some support.

If that doesn't come through, then they will have no choice but to begin to cut payrolls again and cut programs, and of course a lot of those programs

will go to those folks that are under a lot of stress.

[09:25:18]

ZANDI: So those are two key things and you know, if I had another day to work on this, I would add some more money for small businesses through the

Paycheck Protection Program.

So there's a lot of things we need to do here and hopefully lawmakers get it done pretty fast.

KOSIK: Very quickly, Mark, I want to hear what your opinion is about this that unemployment disincentivizes people to go back to work. Do you agree

with that?

ZANDI: No, there's no evidence of that. I mean, actually, we've gotten a number of really good academic studies based on actual data, because you

see these distinctions between states and it gives you a lot of data points to take a real close look at this, and there is no evidence of significant

disincentives.

There may be anecdotes. I am sure there are, but it doesn't add up to anything of macroeconomic consequence.

KOSIK: Well, we will certainly be watching Congress to see what, if anything, comes out of Congress, especially in the wake of seeing the jobs

recovery kind of start stalling out here.

Mark Zandi, great to talk to you. Chief Economist at Moody's Analytics.

And you're watching FIRST MOVE. The market open is next.

(COMMERCIAL BREAK)

[09:30:04]

KOSIK: And there you see it, the opening bell on this Friday, and as expected, we are getting a mixed open for U.S. stocks on this Friday.

The Dow and S&P look like they're bouncing back from their sizable losses yesterday, but the NASDAQ is falling further from record highs after

Thursday's five percent drop. We're going to bring you those numbers once they hit the tape.

Investors seem to be encouraged by today's U.S. employment numbers, which show 1.4 million non-farm jobs created in the U.S. last month, with the

unemployment rate falling below 10 percent for the first time since March.

The big question for investors now is how serious the tech pullback can get? Tech has underperformed the blue chips over the past month and some

believe that rotation out of big cap tech and into value is long overdue.

One other event to watch out for, the upcoming S&P 500 rebalancing, that happens later this month. So this could give the S&P Global the opportunity

to announce Tesla's inclusion in the index.

For more on where tech goes from here, I'm joined by Dan Ives. He is the Managing Director of Equity Research at Wedbush Securities. Great to see

you, Dan.

DAN IVES, MANAGING DIRECTOR OF EQUITY RESEARCH, WEDBUSH SECURITIES: Thanks for having me.

KOSIK: So, did you hold your breath when you were watching the selloff? How much of a surprise did it come for you, but at the same time you're calling

it a speed bump at this point?

IVES: I think it was a healthy pullback. I mean, our view is that tech stocks, FAANG names still go another 20 percent, 25 percent higher. It's

not going to be a straight line.

I think if you look at the core fundamentals, to me in tech that could be a green light to own these names. I can tell you yesterday institutionally,

two to one investors are calling me looking at names to own and do work on, rather than hit the sell button.

So I still think we're in the sixth to seventh inning of this re-rating in tech, despite many people yelling fire in a crowded theatre.

KOSIK: How concerned are you that the selloff was led by tech, though?

IVES: Look, I mean, that's actually been the parabolic move we've seen, especially large cap tech, FAANG names. I think if you look at momentum

names, even like Tesla.

But to me right here, in terms of everything we're seeing, the fundamental stories and the work from home in this COVID backdrop has accelerated a lot

of these tech names from a growth perspective one to two years.

You could call it a bit of a catchup that we're seeing in tech stocks. But to me steadfastly, remain bullish in tech. That continues to really be our

call since March. You're going to have speed bumps and you'll get second wave fears, headline numbers and U.S.-China. Those are opportunities to

look at the secular growth names you want to own.

I would guess, there's an Apple pullback, there's a golden opportunity to own that into a five-year super cycle.

KOSIK: So you don't think it's time to start selling Apple knowing that it split, it fell eight percent. Is it time to take some profit off of Apple?

IVES: Look, it's a great question and my advice to investors, you look at this over the next two to three years, not over the next 24 hours. And of

course investors are going to continue to sort of take profits on the way up, but longer-term, I mean, split adjusted, I believe Apple a year from

now, $150.00; base case, $175.00, bull case which would have been $600.00 and $700.00 pre-split.

So I just -- look, I think, if you take a step back, secular growth, there is an insatiable appetite and so much of those names are intact. And even

though some could have rotation to value, I believe short wave and I think going into fall, tech FAANG names in particular continue to lead this

market higher.

KOSIK: Tesla got hit hard, falling nine percent, you put a price target I think a couple of weeks ago on tesla for $1,900.00 a share. Do you still

stand by that?

IVES: Yes, and our bull case story is $500.00 because if you look at the split adjusted, that's about 380 and 700, respectively.

Look, in EV market right now, I mean, three to four percent penetration. Look what happened in China in terms of almost 150,000 units potentially

the first year right.

Investors know over the long term to try to play the EV theme. Tesla continues to be front and center. The same thing, I view this as more of a

speed bump, a healthy pullback, rather than the start of a structural decline for Tesla in terms of what we're seeing in demand.

And this continues to be, you're seeing other players, we're talking about a trillion dollar market in the next decade.

KOSIK: But, one last question here for the broader market, though. Where are the fundamentals at play? You know, when you talk about valuations as

opposed to this irrational exuberance that's persisted in the market, specifically tech?

[09:35:10]

IVES: Well, I mean, some will point to its valuations, whether it's S&P 500 or even some of these tech names on NASDAQ, but growth rates are 2X what

they were because of the COVID backdrop and because the next 12 to 18 months, in terms of a work from home environment, the one thing I would

point out is most investors that I talk to, if you look at the other side of the dark valley, what do normalized numbers look like for 2021?

And to me, I think numbers still go higher and the re-rating continues to be there in tech, despite many of the skeptics. That continues to be our

thesis here.

KOSIK: Okay, Dan Ives of Wedbush Securities. Great getting your perspective today. Thanks for joining us.

IVES: Thank you.

KOSIK: Despite yesterday's sharp fall in the tech sector, shares of CrowdStrike are still up about 150 percent so far this year. The

cybersecurity company's second quarter revenue beat expectations, helped by demand for Cloud-based security solutions.

Joining us now is CEO of CrowdStrike, George Kurtz. Great to see you.

GEORGE KURTZ, CEO, CROWDSTRIKE: Great to be here, thank you.

KOSIK: So we are watching CrowdStrike benefitting from the stay at home workplace as we saw in your revenue up in the latest quarter.

Company shares though, they are down three percent since your latest earnings, but up 187 percent for the year. What do you think happened there

for investors?

KURTZ: Well, I think you have to look at the broader market and there was a broader market selloff. When you look at our execution, I think it was

flawless.

We had one of the best quarters in company history. We had record net new annual recurring revenue and 84 percent revenue growth, so some really big

numbers.

So you know, it's a testament to the durability of the model that we've built at CrowdStrike and it's really a function of the fact that security

is a must-have in today's environment.

KOSIK: And we talk about security here. How has CrowdStrike benefitted from the need for more dynamic security measures in terms of hackers? I

understand there's been -- there have been many huge attempts for breaches just this year.

KURTZ: Yes, this year, the amount of attempted breaches that we've seen is up 154 percent year-over-year. It's been a very active year.

In particular, we've seen nation state activities, as you might guess, but also e-crime. We've seen a tremendous uptick in the e-crime actors and what

they're focused on and really how much money they're able to make in this current environment.

So the threat landscape continues to get worse. It makes it more challenging for companies that have all their employees at home working

remotely, not necessarily behind the corporate firewall, and that's where technology in a platform like CrowdStrike can come in and help protect

those critical end points and workers that are at home.

KOSIK: You announced a partnership with Zoom three months after it was reported that Zoom was actually in advanced talks with Google Cloud for the

use of a Google security service that alerts users to the dangers of clicking on links associated with malicious websites.

Do you know if Zoom is still going through with that?

KURTZ: That would be a question for Eric at Zoom, but what I did announce in the last earnings call is that Zoom is a customer and they chose our

technology because of its maturity and our ability to protect critical Cloud workloads. So, we're definitely excited about that customer win.

KOSIK: Okay, CrowdStrike gained a lot of notoriety when President Trump mentioned your company at a call with Ukraine's President and we later

learned your company did work for the Democratic National Committee in 2016 and also did work for the National Republican Congressional Committee

related to a suspected breach.

Is your company still doing work with both of them?

KURTZ: Well, the thing about security is it is bipartisan. We do work with both sides of the aisle in today's environment, and with the elections

coming up, it's absolutely critical that cybersecurity is a foundational element and we're working with Federal, state, local organizations, both

internationally and certainly in the U.S., and we're excited to protect both sides of the aisle.

KOSIK: All right, George Kurtz, great to have you on today. Thanks for being with us.

KURTZ: Thank you very much. Thank you.

KOSIK: The vaccine Russia pushed through early trials gets its first report card. Why scientists say they have more questions. We'll speak to one after

the break.

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[09:42:37]

KOSIK: Russia's coronavirus vaccine scoring well in its first peer-reviewed studies. The respected "Lancet" medical journal all giving promising marks

for both immunology and safety. But the scientific community says it still needs to know more. Peter Hotez is Professor and Dean of Tropical Medicine

at Baylor University's College of Medicine and Dr. Hotez joins us live now from Houston via Skype. Great to see you.

DR. PETER HOTEZ, DEAN OF THE SCHOOL OF TROPICAL MEDICINE, BAYLOR COLLEGE OF MEDICINE: Great to see you.

KOSIK: So as we know, there has been a lot of skepticism over the vaccine. Russia says it's produced in a matter of weeks; something that takes months

or even years, and even before Phase 3 trials were finished. After hearing about the data about this vaccine this morning, how convinced are you?

HOTEZ: Yes, Alison, you're right. A number of us, including myself, were very critical of the Russians because there was no transparency. There was

no published data to look at. They claimed they had registered the vaccine.

And the reason as we have been pointing out that's the scientific hurdles around making a COVID-19 vaccine is not that -- are really not that high.

The hard part is the quality control, quality assurance, and all of the testing showing that the vaccine that is actually working are safe and

transparency results.

That's the hard part and it looked as though that was the part the Russians were skipping over.

So the fact that they're publishing their Phase 1/Phase 2 clinical trial data is an important first step and it's a step that I welcome, and with

some potentially interesting results.

KOSIK: There was a peer review in "The Lancet" that called this encouraging, but small data, citing that, you know, immune response could

be demonstrated in older groups. The efficacy of the vaccine hasn't yet been shown in a clinical setting. Studies are too small.

Where does Russia go from here to prove that it does have a valid vaccine here? What does it have to do to prove to scientists like yourself?

HOTEZ: Well, like any other vaccine, it has to go through larger what we call Phase 3 or pivotal trials, and my understanding is that's what the

Russians plan.

You know, when I look at this paper coming out of "The Lancet," I see some advantages of the Russian vaccine and some disadvantages.

So one of the advantage is the fact that they, unlike some of the others who haven't reported on it, the Russians are able to freeze dry the

vaccine. What we call the lyophilization. You might say well, why is that important?

Well, one of the reasons we are able to eradicate small pox was the Russians figured out how freeze dry the small pox vaccine and that allows

you to carry it into remote areas, rural areas where the temperatures are high without a cold chain, meaning refrigeration. So that potentially is an

important advantage for accessibility.

[09:45:34]

HOTEZ: Some of the disadvantages, first of all, the immune responses were okay. They were not screaming high in terms of the level of virus

neutralizing antibody, which some feel is a predictor of efficacy roughly in line with some of the other adenovirus vaccines like the AstraZeneca-

Oxford vaccine, maybe not as high as we would like.

The other disadvantage is that it's a two-component vaccine, meaning that there is -- there's actually two different vaccines that have to be given

in succession. You give one and then the other. And the logistics of that are a bit more complicated, especially in resource poor environments.

So it's certainly a viable player and one we'll have to look at with interest in Phase 3 trials, and all I can say is I just hope the Russians

continue along those lines of transparency, because the way they started with this line of boasting and calling it Sputnik V, which was ridiculous

and not having any published data and saying that they have a vaccine without showing any clinical trial data, that was totally unacceptable.

It looks like they're kind of trying to take steps in that direction and it would be more in line with the mainstream scientific community. So you have

to give them some points for that and hope that this continues.

KOSIK: Right. Let me ask you, just switching gears to the U.S. in an attempt to make a vaccine, the U.S. government has pretty much told states

to prepare for a coronavirus vaccine to be ready to be distributed by November 1st.

But how concerned are you that the F.D.A., you know, still has to approve this before knowing whether it works and is safe? What are your concerns

about this political pressure for a vaccine and public trust once one is available?

HOTEZ: Yes, what we're seeing, you know, in my opinion is quite a bit of chaos. You have that letter sent out by the C.D.C. Director saying, get

ready, the vaccine is coming maybe by November 1st, two days before the election, which has the appearance of a political stunt.

And then Francis Collins, the N.I.H. Director walked it back in an interview saying, no, no, we're not going to have the Phase 3 data until

the end of the year.

So you're seeing quite a bit of confusion, and that's not good for the American public because we have such an aggressive anti-vaccine movement

and what you really need is consistent public health messaging coming out of the White House and the agencies.

So I think they're trying to regroup and try to fix those things. One of the flaws in Operation Warp Speed, which is the name of the U.S. Vaccine

Program, is there never really was a communications strategy. It was left to the companies, the pharma companies, to provide that. That was a

mistake, I think.

So I think trying to find a voice in the U.S. government that's going to be out there on a weekly basis providing consistent messaging, answering

questions from the American public is going to be absolutely important because we are already seeing up to half of Americans who are now saying

they'll refuse COVID-19 vaccines, even if made available, because the Federal government has been tone deaf to this very aggressive anti-vaccine

lobby that we have in the U.S. and now it's globalizing. They held demonstrations in Berlin, Germany last weekend, so that's really ominous so

we're going to have to fix this as a country.

KOSIK: Oh, yes. Trust and confidence matter. Dr. Peter Hotez from Baylor University's College of Medicine, thanks for your perspective.

And after the break, Hollywood needs a blockbuster hit in China where life is slowly returning to normal. We'll look at one potential golden ticket

for box office sales.

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[09:51:11]

KOSIK: Welcome back. With movie theatres still closed here in New York and elsewhere, Hollywood is hoping China can bring in the big bucks this fall.

The release of the time-travel blockbuster "Tenet" in China will be closely watched as a barometer of the industry's health.

David Culver joins me live from Beijing. David, great to see you. You know, usually blockbusters open in the U.S. This time, though, the blockbuster

has opened in China. China got it first.

DAVID CULVER, CNN CORRESPONDENT: And Alison, it seems like China is going to have the crowds, at least, to really meet the demand here as well.

I mean, what you look at is where things have gone recently in China as far as returning to what is near normal. I mean, you have restaurants and bars

and gyms that have been open for several weeks, if not months now, and really life is coming back to normal.

What's last coming back online has been the movie theatres. And now we have learned that the vast majority, some 9,600 have come back online, 1,600

still not open, and they are doing it in the same timeframe as this major Hollywood film is coming here to the People's Republic of China.

(BEGIN VIDEOTAPE)

CULVER (voice over): Tickets in hand, moviegoers in Beijing prepare for their brief departure from reality.

"I really miss it. Before the pandemic, almost every time there was a good movie, I would go to the theater to watch it." Bow Tze tells me.

She is among the fans here to see "Tenet," Christopher Nolan's highly anticipated sci-fi thriller, produced by Warner Brothers, which like CNN is

owned by WarnerMedia.

This is the first major Hollywood theatre released in China since the COVID-19 outbreak that is expected to attract large audiences.

CULVER (on camera): China is allowing theaters like this one here in Beijing to reopen at 50 percent capacity. They've also got several seats as

you can see blocked off, allowing for some social distancing.

And once you're here for an actual film, you've got to wear a mask the whole time. If you say can I at least take it off for some popcorn, it's

not an option. Concessions are not being sold.

"I think it is okay. It is worth it." Bow says.

China shuttered theaters countrywide in late January as the virus spread, only to begin to reopen them with limited capacity and many film reruns in

July.

(BEGIN VIDEO CLIP)

CULVER: So we're talking about roughly six months of closer. How devastating is that for the industry here?

YING LOU, INDEPENDENT FILM PRODUCER: It is definitely devastating. That means sort of lower investment for future projects. So that's actually a

pretty worrying trend, not just for this year.

(END VIDEO CLIP)

CULVER (voice over): It comes off that was a $9.2 billion year for China's box office in 2019, which was up more than five percent from the year

before that. Still less than North America's $11.4 billion, according to the Motion Picture Association, but rapidly narrowing the gap.

Experts expected China to have overtaken the U.S. and Canada box office sales by this year. That was before the outbreak, of course. Now with the

vast majority of theaters here back open and customers feeling more comfortable to venture out, China could very well become the most

profitable.

Though there have been controversial cuts from Western films here in the past, including censoring LGBTQ content from the Oscar-winning movie,

"Bohemian Rhapsody," Chinese film producer, Ying Lou does not believe U.S. filmmakers will self-censor only to reach Chinese moviegoers. Rather, she

thinks producers and studios aim to appeal to the global audience.

(BEGIN VIDEO CLIP)

LOU: I think they sort of understand what can or cannot be shown in Chinese theaters.

(END VIDEO CLIP)

CULVER (voice over): "Tenet" made the cut. So, too, Disney's live action adaptation of "Mulan," releasing in Chinese theatres September 11th.

Moviegoers adjusting to this very different movie-watching experience post- outbreak, perhaps making the escape into another plot all the more alluring.

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[09:55:10]

CULVER: And Alison, one thing that was pointed out to me by that film producer, is that not only the box office sales that they're concerned

about here, it's also the production of new films.

So, for several months it was halted here in China in particular and obviously in the U.S. as well. Going forward, they worry that they then

won't have the surplus in content to provide for consumers and perhaps people, they fear, could fall out of comfort in going to the theaters

altogether.

So it is something they're really worried about and they are focused on and they're trying to figure out how they can keep that confidence in people

coming to the theater and perhaps also provide the content.

KOSIK: Right. It is a double-edged sword, right? It's the blockbusters that draw the crowds to the theatre and they have to feel comfortable once

they're there.

All right, David Culver from Beijing, thanks so much.

And that's it for the show. I'm Alison Kosik. Thanks for watching. See you next time.

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