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First Move with Julia Chatterley
The O.E.C.D. Says Biden's Bill Would Improve the Global Economic Recovery; A Devastating New Report on China's Treatment of Uighur Muslims; Warnings that the Microsoft E-Mail Hack is Escalating. Aired 9-10a ET
Aired March 09, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
American aid. The O.E.C.D. says Biden's bill would improve the global economic recovery.
Genocide judgment. A devastating new report on China's treatment of Uighur Muslims.
Cyberattack spread. Warnings that the Microsoft e-mail hack is escalating.
[VIDEO CLIP PLAYS]
CHATTERLEY: A picture worth a thousand words. We speak to the CEO behind this new technology.
It's Tuesday, let's make a move.
Welcome once again to FIRST MOVE. Great to have you with us this Tuesday.
Another day of Royal rifts, market shifts and global economic lifts. That's the good news, at least according to the O.E.C.D. this morning. They argue
that President Biden's $1.9 trillion emergency aid plan will not only boost U.S. economic growth, but it will also lift global economic growth, too by
a full percentage point this year. We've got all the details on that report coming up.
It's a recovery story that's playing out in pretty volatile fashion in both the stock and bond markets around the world. Stocks continue to take their
lead from bond markets.
If we talk about here in the United States, when rates hold steady, stocks rise and that's what we're seeing premarket once again today. As you can
see, the U.S. 10-year yield back to around that 1.5 percentage point mark, but there is a bit of story here on Wall Street.
For the year, the blue chip Dow now up four percent year-to-date, while the NASDAQ is down some two percent. Energy stocks and financials are
outperforming while pandemic winners like Apple, Amazon and chip maker, NVIDIA are all deep in correction territory as you can see in front of you
It is a similar story in China, too. The Shanghai composite closed down around some two percent in today's session, despite state backed funds
coming in to buy stocks to stabilize things. The big cap, CSI Index now down 14 percent, in fact, amidst the most recent high.
Investors are worried that the government will ease back on some of the support measures they've provided, that they'll step in perhaps to contain
some of the froth in financial asset prices and it's a concern, I think, fueled, too, by China's surprisingly conservative growth target
announcement last week.
Just to be clear, the O.E.C.D., far more optimistic on China than the Chinese themselves.
Let's get to the drivers. Christine Romans joins us now. Wow, Christine, I am stumbling a little bit this morning. I will hand it over to you.
Thank you, America, I think is the news of the day according to this O.E.C.D. report. It will lift many boats, not just the U.S. boat.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: And certainly, $1.9 trillion is so much money. It's more than double the Obama-
era rescue, not counting all the stimulus already in the pipeline or rescue, really, in the pipeline from last year that Congress and the Fed
were pumping out to try to save the American economy and hence the global economy from ruin because of the coronavirus here.
In terms of the market, with apologies to Bruce Springsteen, I mean, the bond market is boss, right? Every day, when we see bond yields moving, we
see the stock market take its tone in this rotation when yields rise out of those Big Tech high flyers of last year and into the blue chips.
It struck me that yesterday, you had the Dow intraday hit a record high on the same day you had the NASDAQ actually touch and close in official
correction territory. To me, that really crystallizes this rotation out of last year's winners and into the areas of the economy that are expected to
benefit from these bullish forecasts.
With those bullish forecasts of the economy, of course, in the U.S. in particular come risks, but to date, you're still hearing from most
economists the risk of doing too much in the economy still outweighs -- too little in the economy, rather, still outweighs doing too much -- Julia.
CHATTERLEY: Yes, and I get your point, and your point about the markets, as well, I was looking at some of the performances mid-Feb to the current
period in U.S. the European energy, up 20 percent and 11 percent respectively for U.S. and E.U. banks up 12 percent and up near 14 percent.
There is a real recovery rotation taking place in this market, which is great to see, quite frankly, if it can be sustained and if this is the cost
of it, it's a whopping great, cost but to your point, and I think we agree, doing too little here is still the bigger risk.
ROMANS: Yes, and when I look within the contours of this $1.9 trillion package, and to be fair, it goes back to the House today, it still has to
be sort of tweaked and signed by the House of Representatives, and then go to the President's desk for a signature.
ROMANS: And then assuming it's signed, which we all think it will be, there are all kinds of mechanics to work about how to change the child tax
credit so that people get money every month. How do you make sure the first $10,200.00 in unemployment benefits are actually tax-free?
There's a lot of guts that have to be worked out, but I see a big sprawling historic progressive agenda for the year that is going to be embarked on
Everything from food aid to housing aid to a rescue of public pensions to transportation projects, there is so much in here. We'll measure the
consequences intended and unintended, I think, for years to come.
CHATTERLEY: Absolutely, and if we're talking about 5.6 percent growth for the globe when the American consumer spends, any nation that imports to the
United States benefits in a global lift here, incredibly welcome, too.
Christine romans, thank you so much for that.
ROMANS: Thank you.
CHATTERLEY: All right, let's move on. China, quote, "bears responsibility for the alleged genocide of Uighur Muslims in Xinjiang." That's according
to an independent report by a Washington think tank.
The report accuses China of violating the United Nations Genocide Convention.
Ivan Watson is live in Hong Kong with the all the details. Ivan, we'll talk about the implications for the United Nations as a result of the report
because of course, China, a permanent member, which has a huge importance, but just talk us through further details of this report. Pretty damning.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is, and important to note that the United Nations Genocide Convention defines genocide as not
purely like what the Nazis did in World War II, putting people in gas chambers or the Rwandan genocide carried out with machetes that other
definitions of genocide include forcibly transferring children of a targeted group or imposing measures intended to prevent births within the
What this report by the Washington, D.C. based think tank, Newlines Institute for Strategy and Policy concludes is that based on the evidence
out there, a lot of it, including statements and reports issued by the Chinese government itself, its panel of experts and lawyers and academics
have come to the conclusion that China has matched the Chinese government with its policies in Xinjiang has matched the five definitions of genocide
laid out by the U.N. Convention.
It specifically makes these allegations that these Chinese state policies contribute to that accusation. The government mandated home stays, which is
a much trumpeted Chinese government policy where more than a million Communist Party members are put into the homes without any choice of the
matter, into the homes of ethnic Uighurs and other minorities in Xinjiang.
Mass internment: the U.S. State Department alleging up to two million members of the minorities in Xinjiang rounded up and put into internment
camps. Mass birth prevention policy, forcible transfer of Uighur children to state-run facilities, eradication of Uighur identity, selective
targeting of intellectuals and community leaders.
Now, we've been hearing about these accusations from people from inside Xinjiang who have escaped from relatives on the outside, the Chinese
government has routinely denied and rejected any allegation whatsoever of human rights abuses Homeland Security abuses in Xinjiang and they have also
angrily denounced any suggestion that genocide has been committed there.
Listen to the Foreign Minister of China a few days ago.
(BEGIN VIDEO CLIP)
WANG YI, CHINESE FOREIGN MINISTER (through translator): The claim that there is China in Xinjiang cannot be more preposterous, it is just a rumor,
fabricated with ulterior motives and a thorough lie.
Over the past four decades and more, the Uighur population in Xinjiang has more than doubled from 5.5 million to over 12 million.
(END VIDEO CLIP)
WATSON: Yes, the Uighur and Xinjiang population grew over the last 40-plus years as did the rest of China, but look at these statistics from the last
decade published by the Chinese government, and you will see a startling decrease in the years 2017 to 2019 of the birthrate in Xinjiang, dropping
by almost a half over the course of two years.
And in our reporting on this, the Xinjiang government told us that this was partially a result of enhanced family planning policies such as the offer
of sterilization procedures and contraceptives implanted into people.
The witnesses and the victims that we've interviewed have said that the sterilizations were forced on them and these types of allegations have
contributed to this report -- Julia.
CHATTERLEY: Yes. Ivan, great to have you with us. Thank you so much for that update there.
All right, let's move on. Meanwhile, the Biden administration is warning that the China-linked Microsoft hack is an "active threat," quote, and is
setting up a taskforce to tackle it.
Microsoft revealed last week that Hafnium, a hacking group thought to be state-backed had accessed its e-mail service.
Alex Marquardt joins us now. Alex, the problem is, by raising the flag and saying, look, we have vulnerabilities here, it sent out a signal to other
hackers both domestic and international to say, hey, we've got vulnerabilities, why don't you have a go and that it seems is what's
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: That's right, Julia. Microsoft has said that others are latching on to this attack that
has been carried out by, as you mentioned, a group that the -- that the company is called Hafnium, who are believed to be Chinese government-backed
Now, that warnings from the U.S., from the Biden administration are growing more and more urgent and when you talk to cybersecurity experts, they say
that the extent of this vulnerability cannot be overstated.
We did hear from the main U.S. cyber agency last night. That agency known as C.I.S.A., and they tweeted a rather urgent warning. I want to read it.
They wrote: "C.I.S.A. urges all organizations across all sectors to follow guidance to address the widespread domestic and international exploitation
of Microsoft Exchange Server product vulnerabilities."
Now, the former head of the agency, C.I.S.A., he added on to this saying that this is a crazy huge hack, in his words, and that the sheer scale and
speed of this one is terrifying.
Now as you mentioned, Julia, other groups are believed to be latching on and jumping on to these vulnerabilities.
The White House has said that this is an ongoing threat. Now, it is not believed that the U.S. Federal government is directly affected in any huge
way, but certainly local and State governments are vulnerable as are a number of entities all around the country and all around the world.
One official told us that there were an estimated 30,000 potential victims here in the United States and a quarter million around the world.
We did hear from the National Security adviser, Jake Sullivan who singled out think tanks and defense industrial entities, we've also heard from the
White House Press Secretary who said that academia was vulnerable as well.
Now, we understand that what's called a Unified Coordination Group, U.C.G., is being formed to deal with the fallout from this hack that includes
various national security agencies, including that cyber agency, C.I.S.A., and the F.B.I.
The last time we saw a U.C.G. being created and stood up by the government was earlier this year in the wake of the SolarWinds hack that is being
blamed on Russia.
So now, the Julia, the Biden administration just two weeks in office is having to deal with these two monumental hacks believed to have been
carried out by China and Russia -- Julia.
CHATTERLEY: Yes, monumental issues we are dealing with, all of the things that we have discussed this morning.
Alex, great to have your insights. Thank you so much for that.
All right, let me bring you up to speed now with some of the other stories making headlines around the world.
Prince Charles appeared in public a short time ago for the first time since the explosive Harry and Meghan-Oprah Winfrey interview, but he ducked the
question from a journalist who was asking about it.
Meanwhile, we are learning more than half of people watching television across the U.K. when it was shown were tuned in to the interview.
Max Foster joins us now from Windsor, England.
Max, great to have you with us. Clearly, huge, huge interest in the United Kingdom, as well as across the pond here in the United States as well.
Perhaps no surprise that Prince Charles decided not to respond to that journalist. It feels like deafening silence from Buckingham Palace, but not
unusual to see them take their time and decide how to respond, if at all, to something like this.
MAX FOSTER, CNN ROYAL CORRESPONDENT: Yes. I think, in a way, actually this visit today was a response from the Palace. I have been speaking to people,
I think, the impression I'm getting really from Buckingham Palace is they don't want to be rushed into a formal response.
But what you've got here is Prince Charles, not clearing his diary, carrying on with engagements in place there already, so he is there at the
vaccination center and naturally, one of the reporters threw a question at him about whether or not he'd seen the interview and he didn't respond to
I think what they're doing here is keeping calm and carry on, Julia. I mean, you know the term, this is a thousand-year-old castle. Their story is
a lot longer than this one moment in Oprah's interview history, I think that's probably the view and they will respond.
I think they think, of course, the allegations here, sitting in the interview is very serious. They don't want to really rush into it, they
want to do it in their own time and this visit today was really part of that narrative, actually.
CHATTERLEY: Just looking at Prince Charles there, and I actually think he looks very tired. Incredibly stressful time for the Royal Family as well,
of course with Prince Philip still in hospital. How do they respond, Max and how does this change the monarchy, if at all, in your view as someone
with so much understanding and expertise of how this family operates -- how this institution operates?
FOSTER: Yes, well, they are a brand, aren't they? And I think a brand has values and some of the values that Meghan, particularly, questioned here
are integral, actually, to the brand. They have to be relevant to their entire public and she talked about racism, so that alienates them from some
elements of the public.
And I think that, you know, when you talk about the mental health issues and how she wasn't cared for, she believes, and you've got a brand that
often promotes mental health issues and diversity and the Commonwealth, then she is undermining the brand and there the issues, I think the wider
institution will be concerned about going forward.
And then there's all these other layers of particular details, which perhaps they're thinking about addressing as well, you know, some of the
details about how they left and who was blamed effectively for that.
So I think there is a lot there for them to digest and on the Sussex side, there is just Meghan and Harry, they make all of their own decisions. They
are very firm leaders.
On this side, you've got William and Charles and the Queen and all of the aides around them, so it is much more complex and harder to come up with a
response very quickly, I think.
CHATTERLEY: Yes, we will continue to wait. Max Foster, great to have you with us. Thank you for that.
All right, still to come on FIRST MOVE. The futuristic AI bring history to life. We take a look at the technology offering fresh glimpses into the
And passports out of the pandemic. Israel's road map to leaving the lockdown.
That's all coming up. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. stocks are set to rally in early trade. Tech looks set for a rebound after
falling into 10 percent correction territory yesterday. The Dow set to hit fresh records.
Tesla, one of the big gainers, up seven percent premarket on news that its China sales rose a strong 18 percent last month. Stocks also higher after
bond yields pulled back from one-year highs, as you can see.
The hedge fund manager, David Tepper, yesterday saying that yields are set to stabilize in his view, but challenges remain. The U.S. is set to auction
off some $120 billion worth of new debt this week.
The fear is that investors will balk just like they did when an auction went bad last month sending rates soaring. So that's one to watch today.
In the meantime, the vaccine rollout continues to pick up pace. It is good news. Israel remains the front-runner. Nearly 58 percent of people have had
at least one dose. Next, the UAE with a rate of 35 percent. The U.K., Chile and Bahrain follow.
The United States meanwhile in sixth place. Almost 18 percent of Americans have had at least one dose. But my next guest says that may not be enough
to protect against a dangerous new wave of infections.
Joining us now, Michael Osterholm, Director for Center for Infectious Disease Research and Policy and the University of Minnesota joins us now.
Michael, fantastic to get you on the show.
I want to start actually with the C.D.C. guidelines that were released yesterday for individuals that have been vaccinated, and there was a lot of
pushback and criticism that they are being far too conservative with what vaccinated people are allowed to do. What's your sense?
MICHAEL OSTERHOLM, DIRECTOR FOR INFECTIOUS DISEASE RESEARCH AND POLICY AT THE UNIVERSITY OF MINNESOTA: Well, I, first of all, want to emphasize the
fact that remember, these guidelines are for people who have been vaccinated. We don't want people who have not been vaccinated to interpret
that we are suggesting they can change their means of protection.
In terms of the recommendations that the C.D.C. has made, first of all, they were very clear that these are interim, meaning that they expect to
update these with some regularity as they get more information.
Number two is, I always find it interesting when you have those from a more conservative approach believing that, in fact, that they should have opened
up much, much more than they did and those who are more progressive side saying, oh, you loosened up way too much. We are going to put people at
risk of more disease.
I kind of feel like the Goldilocks recommendations are working. That they're just about right.
So clearly, we all want, among us who have been vaccinated, to find that we don't have to wear our masks necessarily in as many places, that we can do
other things and I think those will be coming in the days ahead, but I think right now, C.D.C. struck a really good middle position.
CHATTERLEY: I mean, there's an international theme here, too, because around the world, many people are being vaccinated with the Pfizer vaccine,
with the Moderna vaccine, too. So it's just interesting, I think, for everybody to hear what they're saying.
What they are still advising though and there are many people that haven't seen their families, grandparents, parents for what -- more than a year,
they're saying that they recommend against both domestic and international travel even if you've been vaccinated.
There will be people going, hang on a second, I booked a holiday. I booked a trip. I'm going to see my parents.
Michael, is it reasonable to expect people to still not to travel even when they've been vaccinated, particularly if they're going to visit people who
have also been vaccinated?
OSTERHOLM: I think this is a very legitimate point and let me just remind everyone, however though, in most places, very few people have been
vaccinated yet. There are some selected countries that you noted and I think those are important.
But when you go into an area where you might see a substantial transmission of the virus, for example, right here in the United States right now, we
are seeing a surge begin with this B.1.1.7 variant, the one that came from the U.K. originally and this one is, I can tell you in our own state of
Minnesota, spreading rapidly from county to county here and we're beginning to see that in the country.
And so, when we have people who have been recently vaccinated, we do believe that that should protect against those variants and I think you're
going to see over time, as more and more people get vaccinated, that, in fact, these recommendations will relax even more, saying that we now have
enough people vaccinated and that the likelihood of encountering the infection is much lower.
So I understand the issue. I'm a grandfather. I want to spend time with my five grandchildren, which I have just missed largely in the last year of
doing, and so I get that.
And in this case, I can now consider that, but I think travel is one of the next areas you're going to see C.D.C. address and I think that we will see
more travel at least allowed when you're vaccinated.
CHATTERLEY: I will just make the point for the Brits that are watching that are probably hopping up and down, while some of them will be on their
sofas, it was variant identified in the U.K. as opposed to originating in the U.K. at least as far as we know at this stage.
Michael, can we look at the European example of how quickly those variants proliferated and became the majority in certain cases of the virus that was
being identified and tested for. Can we look at what we saw in Europe and look at the United States now as we see those variants take hold in parts
of the country and say, there's a risk actually that what we've seen in Europe is coming to the United States because I know you gave a stern
warning in recent days about the risks?
OSTERHOLM: Right. Well, the B.1.1.7 variant that we are talking about here, when it did spread in the U.K., in any other number of European
countries, when it hit about 35 to 50 percent of all the viruses found, there was a sudden surge in cases and that surge which has been addressed
in part by a vaccine, but most specifically by lockdowns.
Most people in the Americas have no idea what the European and the people in the Middle East have gone through over the course of the past two months
in terms of major lockdowns.
Just this week, England has opened up its schools again after having been closed since Christmastime.
So we have that very same problem ahead of us. I wish more people were vaccinated in the United States. We're making progress, but in the
meantime, as B.1.1.7 grows rapidly in terms of its presence here, we're going to see the surge of cases.
We have seen a number of states where in early January, the B.1.1.7 variant made up only one percent to two percent of all the variants found and
today, it's upwards of 40 percent to 50 percent. That's a bad sign. We are going to be going through, unfortunately, in many ways what the Europeans
and Middle Eastern countries have had to experience.
CHATTERLEY: Have enough people in terms of the elderly population, those most vulnerable, nursing homes been vaccinated in order to prevent the
spike in hospitalizations and deaths potentially? Have enough people been vaccinated in the United States because I guess that's the hope, even if we
see cases rise, there's enough protection out there to prevent the ramp-up in loss of life and hospitalizations following.
OSTERHOLM: Yes, and that's a very important point. We have vaccinated the 1.4 million residents of long-term care facilities in this country, which
is a very important group to vaccinate, in terms of the likelihood of experiencing severe illness or death.
At the same time, we still have upwards of almost 50 percent of those 65 years of age and older in this country who have not yet had a dose of
vaccine, and so that is a group that still remains at very high risk for serious illness.
One of the things also that the B.1.1.7 variant has shown us is not only is it more transmissible, 40 percent to 50 percent more, but it's also causing
more severe disease.
So even in younger individuals who may not have been that ill in the past needing hospitalization or having serious illness and even at the risk of
dying, we expect, as was seen in Europe, to see a higher proportion of younger individuals who have not been vaccinated yet that will be
experiencing this more severe illness.
CHATTERLEY: Yes. No time to relax, I think that's the message. Michael, great to get your insights.
OSTERHOLM: Thank you.
CHATTERLEY: Michael Osterholm, Director of the Center for Infectious Disease Research and Policy at the University of Minnesota. Thank you, sir.
All right, the market opens next. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE where we have a snapback rally in tech stocks after a 2.5 percent drop in to correction territory yesterday.
The Dow also at fresh records, too.
Good news for global investors today, also from the O.E.C.D. saying that new U.S. stimulus will boost global GDP by a full percentage point this
I'll tell you what, markets and investors are in a much better place than they were this time last year when global stocks began plunging as the
extent of the COVID crisis came into view.
We were live at the New York Stock Exchange on March 9, 2020 and I have to tell you, it was pretty ropey that day. Watch this.
(BEGIN VIDEO CLIP)
CHATTERLEY: And the delay we're seeing even, yes, I have to say, this is expected. The delay that we seem to be seeing here, remember, because we
were limit down. There is the picture.
So we are now down more than seven percent for the NASDAQ.
For a lot of investors, they are going, is that what's going to be needed in countries like the United States?
Okay, the reason why we just heard the bell is because now, the S&P 500 is down seven percent, so that's kicked in a halt. We will now be halted for
Yes, it is a sea of red.
The financials, pulling out, Golden Sachs, JPMorgan all down some 10 to 11 percent.
Right now, you can see the Dow off some 7.8 percent and we're holding for at least this moment at these levels.
PETER TUCHMAN, QUATTRO SECURITIES: The markets are in deep panic mode. You know, it is virus, it's oil and it's panic.
(END VIDEO CLIP)
CHATTERLEY: It feels like 10 years ago. That wasn't the end of it. Stocks continued to plunge before bottoming out on March 20th. A V-shaped stock
recovery since, but far from a V-shaped economic recovery.
Joining us now is Savita Subramanian, she is the head of U.S. Equity and Quantitative Strategy and head of ESG Research at Bank of America.
Fantastic to have you on the show.
SAVITA SUBRAMANIAN, HEAD OF U.S. EQUITY AND QUANTITATIVE STRATEGY AND HEAD OF ESG RESEARCH AT BANK OF AMERICA: Great to be here.
CHATTERLEY: I said it felt like it was 10 years ago. Wow. Those were some interesting days.
SUBRAMANIAN: Dark days.
CHATTERLEY: Interesting tests for financial markets, too.
SUBRAMANIAN: Absolutely. Now, those were some dark days. I mean, what's remarkable is that last year, we ended the U.S. equity market at new highs
despite the fact that we were in the worst global shutdown we've ever seen.
So I think it is a really unprecedented year for markets and for the economy.
CHATTERLEY: Unprecedented levels of stimulus to follow as which has clearly made the difference for financial markets if we separate out what's
going on for the underlying economy here.
Savita, you caught my attention around eight days ago because you put out an article, a report saying that you were collating the average
recommendations for equities and from sell side analysts and it was so incredibly bullish, it had a reverse effect in terms of a counter
indicator, perhaps, for how stocks may perform.
Just talk us through that report on what you were seeing.
SUBRAMANIAN: Yes, absolutely. So, I think what's interesting, we have been tracking this indicator for years now, since the 1980s and what we found is
that when Wall Street gets really, really bullish, that's about when you want to sell and then when Wall Street is really bearish and under the
table and fearful of equities, that's when you want to buy.
And I think the idea here is that it's a contrarian indicator as you point out and it's because when everybody is talking about what's going to go
right for stocks, chances are, all that great information is priced into the market and the market might be more likely to disappoint and then vice
versa when folks are talking about how stocks are -- we're in a bear market, stocks are going to go down forever. That's about when you want to
just sort of hold your breath and buy.
SUBRAMANIAN: But right now, what's interesting is there are no bears out there. There are no bears on Wall Street. In fact, the average allocation
for stocks is about 60 percent. This is the highest we've seen in many, many years and this is the closest to a sell signal that we've seen in the
indicator since 2007, which, as you remember, was the beginning of another kind of a tough time for equities back in the financial crisis.
So I think what this indicator is telling us is that sentiment is bullish. Positioning is already in U.S. stocks, especially large cap tech, growth
stocks and is probably a better time to lighten your exposure, rather than extend that exposure from here.
CHATTERLEY: And that's what you're telling investors. Because you're the ones that said a few weeks ago that the biggest reason to be bullish -- the
reason to be bearish is that there's no reason to be bearish.
SUBRAMANIAN: Exactly. That's exactly right. Everyone is bullish, it is time to be bearish and I think, you know, the economy and the stock market
are two very different things.
SUBRAMANIAN: We are bullish on the economy. We think that, you know, to your point, stimulus is going to drive another four percentage points of
GDP. We've got a great recovery in the economy, great recovery in corporate earnings, but the market kind of anticipated all of that already and I
think that the worrisome problem from here is that maybe the news flow is going to get more negative as the year progresses because, you know, we
kind of heard all the good stuff already.
CHATTERLEY: What about the connection or correlation as we call it between what we're seeing in the bond markets and what we are seeing in the equity
markets because I am at the stage now where I look at where the bond market is and I can probably judge what the premarket performance is of stock.
CHATTERLEY: If interest rates are higher, stocks will probably be lower and vice versa. How closely correlated are those two things and, again,
what are you telling investors about that?
SUBRAMANIAN: Yes, I mean, it's a complicated issue. So rising rates alone aren't necessarily bad for stocks because what they signify is kind of the
growth and an economic pick-up and all of that is generally good for cyclicals and for certain parts of the market like energy and financials
and we've seen those areas do really well over the last few months.
But I think that what rising rates also do is it provides income investors with an alternative to stocks. So one of our arguments for the last 10
years is that the stock market looks great because it actually has that scarce resource of income. It's got dividend yields and in many areas of
the world, interest rates are below zero.
So yield is really the desirable commodity, but now that you're starting to see yields rise in more traditional sources of income, I think the worry is
that income-oriented investors and there are a lot of income-oriented investors that have been forced into U.S. stocks, those investors might go
back to their more traditional asset classes.
And this is what we've seen over time is that there are thresholds of interest rates at which income investors go back to bonds and we are pretty
close to those levels right now.
CHATTERLEY: Lots to watch. Great to get your insight. Savita, fantastic to have you on the show.
SUBRAMANIAN: Lots to watch.
CHATTERLEY: Thank you.
SUBRAMANIAN: Thank you.
CHATTERLEY: The head of U.S. Equity and Quantitative Strategy at Bank of America.
All right, coming up after the break, an AI innovation transforming old photographs into something very different.
Take a look at this. You are seeing my grandmother's face move. It was based on the still photograph hanging on the wall of my parents' house.
It's quite emotional seeing it. She reminds me of my sisters and my father who I miss badly.
Artificial intelligence, generating new insights and nostalgia. The MyHeritage CEO up next to talk us through.
CHATTERLEY: Welcome back to FIRST MOVE. Before the break, you saw how artificial intelligence is generating great feelings of nostalgia, many
other things, too, seeing animated faces of friends and family past and present can be quite an emotional experience.
While the same can be said for historical figures brought back to life, too. Just watch this.
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CHATTERLEY: Gilad Japhet is founder and CEO of MyHeritage and joins us now. Wow, it gives me a frog in my throat actually watching those, even
when it's not my own family.
Just talk to me about the science behind this and the kind of reactions you're getting from people using it and great to have you on the show, by
the way. I'm clearly very enthusiastic.
GILAD JAPHET, FOUNDER AND CEO, MYHERITAGE: Hi, Julia. Thank you so much for having me.
I want to give you a bit of context first, myheritage.com is a website and mobile application for family history that allows people to trace their
ancestors, build family tree and discover the unique stories of their family and we've always looked for special ways to allow people to connect
to their ancestors and one of the best ways to do that is through photographs.
We created amazing features using artificial intelligence to colorize black and white photos automatically and enhance focus of blurry photos and now,
by partnering with Israeli startup call the D-ID.
We took deep fake technology that they created and used it to build this new service on MyHeritage called the Deep Nostalgia. It lets you upload any
photo and animate the faces in it, basically converting the photo into a video and bringing the people in the photo back to life.
CHATTERLEY: Have you done it with your own family and family members?
JAPHET: Yes. I've started with myself, but it's been very emotional for me to do this with my late father and have a chance to see him smiling again
back at me and we've received thousands of emotional responses from people all over the world who have done the same, who have uploaded a photo of
someone very meaningful to them and had a wonderful experience reconnecting with that person.
CHATTERLEY: And just to be clear because you mentioned the term deep fake, you decided that these are hard coded animation so you can't add speech
then because you didn't want to risk this technology being used perhaps to create fake videos.
JAPHET: That's correct. The way the technology works is very interesting. Using artificial intelligence to recognize the facial features from a
photograph and then what we have done is we have filmed the set of drivers who are people who are doing a sequence of facial expressions and when you
upload your photo, we automatically select the best driver and we apply it so that we animate the person in your photo in exactly the same way.
And exactly, as you said, this is preventing any abuse because the drivers are silenced, there is intentionally no speech and the moments are hard
coded. So you can't really take a person and have them say what you want or do what you want. It's more of an emotional experience for you to do with
photos of your own family and you're not allowed to upload photos of a living person without their permission.
Thanks to these protections, there has been no abuse.
CHATTERLEY: It's funny. We were just showing videos of people's response to seeing family members and you're seeing a mixture of sort of shock, joy,
emotion, and people crying. It is. It is an incredibly emotional experience.
It is also a way and you sort of raised this with what you do at MyHeritage, it is a way of bringing people to the platform, perhaps go on
to research their family history or order a DNA test for example, as well.
I read that you have 13 billion historical records in terms of data. This is astonishing. Just talk to me about protecting that data. You're going to
carry on there, but just in light of all the conversations we're having about data privacy, about cybersecurity, that's a lot of information to
JAPHET: Yes, actually, the 13 billion historical records on MyHeritage are mostly of deceased people. So the privacy protections are slightly less
important. But we take the privacy of our users very, very seriously and protect their data and we pledge that we don't own the information.
It is only owned by the users and we just host it for them, and privacy is extremely important to us.
CHATTERLEY: Which makes sense. You recently decided to sell the company as opposed to go public. Just, can you explain that decision to me as well?
Because I look at what you're offering and the incredible growth and I know you've been profitable for a long time.
What was the decision in terms of maintaining control of the company and deciding which way you go at this point in time?
JAPHET: So, as you said, we have been going on for many years, actually, 17.5 years, and we are doing very well, but I felt that it is time to
reward the employees and also the long time shareholders, but I wanted to pick a path that would not be the end of the road. I did not want to
retire, but on the contrary, take this company to new heights with our wonderful employees.
So this path of partnering with Francisco Partners, which is a private equity firm, allows us to just keep everything as it is and keep going
strong and aim for the next exit and the next one might be going public. We're not ruling anything out.
CHATTERLEY: So what next? With the money that you raise, what next? Because you clearly made a big impression bringing pictures to life.
JAPHET: So we like to think of ourselves as very innovative. We founded the company on the principle of bringing genealogy back to life with
innovative technology, so we keep looking for new and unique ways to allow people to connect to their family history.
I would hope that people, more people embrace genealogy. It makes people feel closer to their family and to each other and it's a very good thing
that makes, I think, the world a little better place.
CHATTERLEY: Yes, I agree. Look, there's my grandmother again. It just gives me a huge frog in my throat.
Thank you for coming on and talking about what you're doing. Oh, I am getting emotional. Gilad, fantastic to have you on the show, sir, and come
back soon and talk to us please. The founder and CEO of MyHeritage.
JAPHET: I invite everyone to come to MyHeritage and try it free for themselves. Thank you.
CHATTERLEY: Thank you for that. There you go. You teased it rather than me and you stopped me crying. Thank you, sir. Great to have you on.
All right, coming up, get a vaccine, get more freedoms. New changes for Israel's green pass holders, next. Stay with us.
CHATTERLEY: Israel easing more COVID restrictions with its vaccination program moving at lightning speed. The country now issue so-called green
passes giving vaccinated citizens more freedoms.
Sam Kiley joins us live from Jerusalem. Really, trailblazing on the vaccination program, Sam, and now, on passports, too.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Julia, it has been an exciting few days since Sunday, really, when the Israelis and of course,
the Palestinians whom the Israelis are responsible for according to U.N. experts and the Palestinian authority have been excluded from this, apart
from a hundred thousand odd workers who are being inoculated.
But aside from that, inside Israel itself, Israeli citizens now passed the five million mark, the number of people who have had one shot and 40
percent of the population that have had two and that 40 percent can use their new green passes from Sunday onwards to get into bars, restaurants,
even make hotel bookings and this is what it looked like when it was starting to roll out on Sunday.
KILEY (voice over): An hour before reopening, Israeli celebrity chef, Assaf Granit is on site for the renaissance of the kitchen at the center of
his restaurant empire.
ASSAF GRANIT, ISRAELI CELEBRITY CHEF: It's like a re-brand. Exactly. It's like opening all over again. That's it. I think the lunch will be slowly
picking up and then, you know, we're already booked. So it's going to be a long and happy day.
KILEY (on camera): It's no surprise, really, that there's a party atmosphere here in Machneyuda. It's perhaps the most famous restaurant in
the city, famous for its high-energy music, high-energy food, high- energy chef.
But also, it's going to be working at 75 percent capacity. Patrons have to be six feet, two meters apart. That's going to be policed and vigilated by
an extra member of staff.
And this is all going to be a result of the introduction of the Israeli green passport, the vaccination certificates that mean that slowly at
least, this economy can start to recover.
KILEY (voice over): First in line, 30 minutes ahead of their booking, a couple from Tel Aviv, proud of their vaccine passes.
UNIDENTIFIED FEMALE: We have it on the phone but here, look, you can see. Please
UNIDENTIFIED FEMALE: Wonderful!
KILEY (on camera): Why are you so excited?
UNIDENTIFIED FEMALE: After a year.
UNIDENTIFIED MALE: Because it's a new day, after a year.
KILEY (voice-over): Forty percent of Israelis have had both vaccine shots and can now enjoy new freedoms to attend concerts, hotels, restaurants,
bars, even universities, with some limits on total numbers.
But the fears of another lockdown loom over even the most optimistic. Renewed restrictions would be ruinous.
UNIDENTIFIED MALE (text): Let's hope they don't clos us.
UNIDENTIFIED MALE (text): They won't close us.
UNIDENTIFIED MALE (text): They won't close us. They won't close us again.
UNIDENTIFIED MALE (text): God willing.
KILEY (voice over): About five million Israelis have had a first dose of the vaccine, a world-leading level of take-up, even though ultra-Orthodox
Jews and Israeli Arabs are lagging behind.
It's an achievement that Prime Minister Benjamin Netanyahu's Likud Party will trumpet in the couple of weeks remaining before elections, here.
KILEY (on camera): How does it feel to be opening?
ETHAN PADNOS, MANAGER, HATCH BREWERY: A little scary and very exciting.
KILEY: Why is it scary?
PADNOS: First of all, opening up, just seeing customers again, it's been a year.
KILEY (voice-over): He is screening customers for vaccine certificates.
KILEY (on camera): And what if people don't have it?
PADNOS: Then they can sit outside.
KILEY (voice-over): Not a bad option. After all, spring is in the air.
KILEY (on camera): Now, Julia, this has been very good news indeed for Israel. They are hoping that by the end of next month, they'll have reached
something approaching herd immunity.
They are not inoculating children under 16 years of age, but they beginning to inch forward to opening up their airspace and trying to get the economy
going again and I am very grateful, I've got my green passport now, too.
Let's hope I can use it somewhere else in the world -- Julia.
CHATTERLEY: Yes, I was going to say, it's like a parallel universe, quite frankly, and I understand that sort of combination of excitement and fear,
too, but nice to see your passport there and fingers crossed, you do get to use it as well, Sam, and we'll see you soon. Thank you so much for that
All right, that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages as always. Search
And that's it for me. Stay safe.
"Connect the World" with Becky Anderson is next and we'll see you tomorrow.