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First Move with Julia Chatterley
Tech Stocks Soar as the March Market Madness Continues; The Disney Plus Subscriber Story Accelerates; The Royal Family's Interview Response Generates More Questions than Answers. Aired 9-10a ET
Aired March 10, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:15]
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.
Rotation reversal. Tech stocks soar as the March market madness continues.
To 100 million and beyond. The Disney+ subscriber story accelerates.
And Palace privacy. The Royal Family's interview response generates more questions than answers.
It's Wednesday. Let's make a move.
And welcome once again to you to FIRST MOVE. Fantastic to have you with us on a very busy Wednesday where we expect the U.S. House to sign off on more
stimulus. Tech is on the recovery rotation rebound and a meme-worthy gaming stock, no not the one you're thinking of, I know, not GameStop, goes
public. I am talking about online gaming firm, Roblox.
A lockdown lifeline for tens of millions of children this past year, that will be listing today on the New York Stock Exchange, and oh boy, what a
moment to do it after tech's turnaround Tuesday.
The NASDAQ rising 3.6 percent. Its best day in fact in four months, bouncing out of the correction territory with extreme gusto. We saw
recovery stocks in the energy and the financial sector losing ground at the same time.
We're actually up as you can see premarket at the market, too. As we've mentioned, many times over the last several weeks, teem of Treasury yields,
a key to this story as well, the 10-year yield back down to 1.55 percent as you can see there after the Treasury successfully borrowed billions of
dollars yesterday.
But keep an eye on the economic data, too. Bond investors are going to remain highly sensitive to things like today's inflation numbers and no
worries just yet, a rise of 0.4 percent in February, mostly because of higher gas prices. So when we look at core inflation, the number that
strips out energy and food aspects like that was actually softer than expected, a 0.1 percent rise. So no worries there for now.
Good news on growth, too. Morgan Stanley raising its U.S. growth forecast to 7.3 percent in 2021 fueled by fresh stimulus spending and it is coming
soon.
The U.S. House of Representatives debating the $1.9 trillion COVID aid package this hour paving the way for a final vote later today. President
Biden set to sign that bill soon after and that is where we begin the drivers.
John Harwood joins me now. John, great to have you with us. We were calling it a virtual done deal yesterday. It is procedural today.
As important as the politics of who agrees to this and who doesn't is, I actually want to talk about the most important aspect which is when do
people get their hands on the money?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: I think a matter of days, maybe a week or two. This is a situation where when the Treasury department
has bank account information or when the I.R.S. has bank account information for people which they use to receive their refunds, that's
going to be expedited and there are payment information that other government agencies have, bank interactions with other agencies, all of
those are going to speed delivery to those people.
People who have not had those kind of interactions, whose bank information is not residing within government agencies, they will get a physical check
that will take a longer time. But this money is going to get out the door pretty quickly and there's also going to be money for small business, the
Treasury has to stand up a program to expedite some of the funds for small businesses that were not getting previous rounds of relief checks.
So this is something that is going to roll out fairly quickly and have a significant effect on individual households and the overall economy.
CHATTERLEY: Do the politics matter, John? Overwhelmingly popular with the American people when you look at surveys sort of being done and yet, what
we saw in the Senate and likely to see again today, Republican backing non- existent for this package despite many of their constituents and their voters needing support.
HARWOOD: That's right, the Republican Party taken a posture of across the board opposition to Joe Biden. It resembles the posture they took against
Barack Obama in 2009.
It is a little bit different situation now. There's a little bit less intensity to the opposition because this pandemic has ravaged American life
across the board. That is a different circumstance to the Great Recession and financial collapse when there was a lot of resentment against big
corporations and Wall Street getting bailed out.
[09:05:10]
HARWOOD: This is a case where people understand $1,400.00 checks going into their bank accounts so you're going to get a significant amount of
Republican support, but the country is still polarized and the Republican politicians in Washington reflect that polarization, so no Republican votes
for this, and you can expect it is going to be a pitch battle on the next items on the President's agenda which will include big infrastructure and
climate plans.
CHATTERLEY: I guess the question is, will it matter come voting time? And we shall see at the midterms. There is plenty of time until then.
John Harwood, thank you so much for that.
All right, rumors of the recovery rotation vastly over-exaggerated, at least where a tech selloff is concerned and tech turnaround is the name of
the game.
Paul La Monica joins me now. Paul, great to have you with us. Just as we were talking about correction territory for the NASDAQ and for tech stocks.
Oh, boy, what a bounce yesterday? Talk us through it.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, so much for all the worries about the FAANGs and Tesla losing some luster and obviously, I think this
is, by no means over. We're going to see investors continue to focus on what's happening in the bond market and we could have more rotation back
into quote-unquote "value stocks," but yesterday, Julia, Tesla really ignited a rally, its shares surging about 20 percent because the company
announced really strong demand in China and that is news that also lifted two big Chinese electric car companies, Nio and Xpeng as well.
So, I think there is this hope that the Chinese economy is recovering. That's good news for Tesla, but also, keep in mind, you know, this stimulus
bill that President Biden is about to sign, it could eventually be inflationary.
So, we might still yet see bond yields pick back up and this rotation into energy and bank stocks continue, but yesterday, welcome news for just about
anyone in the market because it was a broad market rally.
CHATTERLEY: Yes, intrinsically tied. And I am really happy that you made that point ultimately and we keep talking about this. Investors are buying
back into tech stocks or did so yesterday, but at the same time, we saw tamer bond yields as well, so it provided this sort of leeway for people to
gain confidence in order to be able to do that.
But we've try to break the market down into pandemic winners and pandemic losers and what we saw yesterday, Zoom up 10 percent, DocuSign up more than
10 percent, and Peloton -- biking -- get on your exercise bike, up 14.5 percent. So some of these gains were pretty astonishing.
I think, all we can really promise at this stage is volatility. Into that volatility comes a new player, a pandemic winner, Roblox. What do we need
to know about Roblox?
LA MONICA: Yes, I am going to be fascinated to see what this kind of tween focused gaming platform, my 11-year-old is a player, going to see whether
or not this stock can do as well as some other recent IPOs and SPAC transactions.
Granted, this is a direct listing. It's more like what we saw from Palantir and Spotify and Slack. They are listing shares directly on the New York
Stock Exchange. I am going to be talking to their CEO later today, but the growth basically because of this Roblox that they sell, these in-game
transaction currencies is pretty dramatic.
Sales were up more than 80 percent last year and investors like to see that, but Roblox is still not profitable.
CHATTERLEY: Just explain to our viewers who may be listening going, Paul La Monica, always the best person with his children combined to talk about
this kind of stock. What actually is Roblox?
LA MONICA: Yes, it's interesting. It's not as apples to apples as video games that people would play on their phone that are kind of like, or a
console that are you know, just a direct title, if you will. This is something that has a lot of user-created and user-generated worlds
involved. It is more of a platform, as the company describes itself, as opposed to a video game software company.
So, I think it's going to be interesting to see this user-generated content aspect, you know, just how much legs does this have? I mean, to be fair,
the company said that they expect revenue to grow very dramatically again this year, so it continues to be popular, particularly with younger users
and let's face it, we're at a time right now where a lot of kids are still stuck at home, even when they are supposed to be doing their school work
and they might be playing games on their phones, tablets and other devices.
CHATTERLEY: Yes, a game creation platform. I may have spoken in the last 24 hours to a user and they said, Julia, even you could create a game on
this platform. I was like, wow. I must be getting old.
LA MONICA: Yes, I mean, that is the beauty of it, it is all about creating your own content.
[09:10:03]
CHATTERLEY: Paul La Monica, absolutely. Paul La Monica, thank you so much for that.
Now, speaking of age, to infinity and beyond. Well, a hundred million at least, it is a numbers game and that is the number of global subscribers to
Disney's streaming service Disney+ gained in just 16 months fueled by hits like "The Mandalorian" and "Wandavision."
Brian Stelter joins us now. Brian, I am yet to watch "Wandavision" but I hear great things. I didn't think we can underscore enough how monumental
these gains are even for a brand like Disney. It took Netflix what -- 10 years to achieve this number of subscribers and they've done it in what --
just over a year.
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Now Disney is racing down the road that Netflix paved. These numbers do exceed all of the
expectations that Disney publicly announced and frankly, I think the private expectations of management.
They keep raising the bar because they've been able to gain so many subscribers. This is in part due to the worldwide growth of Disney+ in
markets like India and Indonesia where Hotstar and other assets have been combined for this streaming venture.
The issue though for Disney is as they grow around the world, they are lowering the average cost per user, so there are still some challenges for
Disney ahead as they makes this pivot to streaming, but I do think they are showing the rest of the media world how it can be done.
Disney's stock, you're at 52-week high right now and also seeing other media companies that are trying to portray themselves to Wall Street as
streaming pioneers, their stocks also booming. Viacom and Discovery, you know, these companies are all trying to now follow Disney's path, of
course, as we said, a path blazed by Netflix.
CHATTERLEY: Yes, I mean, you raise so many great points there. I was tripping over myself to illustrate. I saw a stat back in November that
said, one quarter of all Disney+ subscribers and one-half of new subscribers are in India and Indonesia. So it gives you a sense to your
point of that international growth that they are managing to achieve and it weaves into everything else, how much content they're going to create and
their ambitions there as well.
Bob Iger finally setting a date to leave. Does that mean that Disney is now perhaps looking at their operations, looking at the timing of the pandemic
and recovery from the pandemic and saying, we have seen the worst and I'm willing to take a step back now, formally take a step back?
STELTER: Right, and they basically treated yesterday's shareholder meeting as a farewell as he continues to hand off to Bob Chapek. There are times
where the old, Bob Iger, has been intimately involved in the past year, but this handoff is under way. And it reminds you of what happened a year ago,
when Iger initially announced his plans. Everybody was confused about it, they wondered what was going to happen as this pandemic took hold around
the world.
Disney's stock collapsed and the theme park closed. And yet, now, the company has mounted this incredible turnaround thanks to streaming.
You know, the parks are still only half online. Disneyland not open yet. This company still has some real struggles for Chapek now to deal with, but
thanks to Disney+, they are going to be able to invest even more money in content and make even more shows.
So if you haven't watched "Wandavision" yet, you'll have time. It will be on the platform, but they said, they are going to try to have a hundred
titles a year. I think we are rapidly reaching the point, Julia, where every single person is going to have a TV show just made for them.
CHATTERLEY: This is very exciting, Brian, and I love your enthusiasm. It is just one of the reasons why we have you on this show. Brian Stelter,
great to have you with us. Thank you so much for that.
STELTER: Thanks.
CHATTERLEY: All right, let me bring you up to speed now with some of the other stories making headlines around the world.
Buckingham Palace breaking its silence on Harry and Meghan's explosive television interview with Oprah Winfrey. The Palace issued a statement on
behalf of Queen Elizabeth II, it says, "The whole family is saddened to learn the full extent of how challenging the last few years have been for
the couple."
The statement says, "The allegations of racism will be taken seriously and addressed privately."
CNN is learning that Meghan Markle lodged a formal complaint with the ITV network following Piers Morgan's on-air comments about her mental health.
Oh boy, there are lots to cover with our Royal correspondent, Max Foster and he joins us now from Windsor. Max, great to have you with us. Let's
talk about the statement, I think, first because people have been waiting and the Palace obviously took its time in response and wanted, I think, the
Brits to see this interview as well and get a sense of what all the talk was about.
Stand out for me, the sadness, I think, the desire to talk about this now in privacy, but also, the quote, " ... while some recollections may vary."
MAX FOSTER, CNN ROYAL CORRESPONDENT: Yes, so it was a grandmother, wasn't it, speaking, a great grandmother, but also a tough sort of boss of the
firm as well. So she is disputing effectively some of Harry's recollections, particularly about the race conversations, but as you say,
she wants to make this a private conversation now. She wants the family to sort it out and not do it on the air waves.
So, the Sussex office aren't now making any more comments about this now. I think that everyone on the Palace side hopes that they can take this
forward, start talking about it and then resolve it and then resolve some of the bigger sort of claims that have been made against the monarchy, now
tarnished, really, by these claims of racism and hypocrisy really about the way they worked with mental health but didn't really consider the mental
health implications of their senior members.
[09:15:22]
FOSTER: So an awful lot for them to unpack at this point, but I think the ball is really in the Sussexes' court. If they go quiet now, take this
offline, then I think that the Palace feels that they can take this forward, but it really does depend on whether or not we hear anything more
from the Sussexes.
It seems for now, they're happy with the statement they've received from the Queen and they respect, of course, they said that in the interview.
CHATTERLEY: Yes, there will people there saying, why couldn't Harry and Meghan have talked to them before? Why didn't they feel capable of having
these conversations with the Royal Family and the need to go so public with the issues that they faced, and how they've had to behave in light of that?
Or how they feel they have had to behave.
It kind of ties to the news that I mentioned with Meghan apparently going to ITV and putting in a complaint about the treatment and the criticism
that she faced about all of these issues from Piers Morgan. What more do we know about that, too?
FOSTER: Well, there's history here, not between them, but certainly Piers Morgan goes on regular tirades against Meghan, not just on his ITV show,
but also on "The Daily Mail" website. So that's nothing new.
I don't think -- well, I am being told that Meghan wasn't responding to the personal attacks that Piers made over the interview, what she is responding
to is the suggestion that she was lying effectively or making up claims about her mental health.
She is concerned about the impact that would have on others and the impact it would have on how seriously people take mental health issues. So that
was the basis of the complaint as I understand it.
There were tens of thousands of other complaints made to Ofcom, which is the British regulator, TV regulator, broadcast regulator in this country.
So how we match this all up is not entirely clear.
The process of events was, Piers said what he did, tens of thousands of complaints to Ofcom from viewers. Meghan's complaints, Piers goes to the
Chief Executive's office of ITV and then he resigns.
So, we are waiting for him to tie all of that or for ITV to tie all of that up. The only thing we've heard from him since, was this morning, when he
spoke to the cameras gathered outside his home. He says, this is about freedom of speech for him. Forget all the rest of it. He should be able to
say what he wants and is falling on his sod.
CHATTERLEY: Yes, and aside from all of that, anyone facing mental health issues must ask for help, should feel that they can ask for help and will
be listened to. I think that's the underlying message from all of this.
Max, great to have you with us. Thank you for the context there. Max Foster reporting from Windsor.
All right, still to come, blockbuster sales for LEGO as kids play at home. The CEO on creating toys for the online generation, too.
And liftoff. The dose delivering drones. We get an update on Zipline's contribution to the global vaccine rollout.
That's all coming up, stay with us.
(COMMERCIAL BREAK)
[09:21:13]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where the NASDAQ is on track to add to yesterday's big gains after the release of tamer than
expected U.S. inflation numbers which are going to help keep bond yields in check. The buy-on-dip mentality seemingly alive and well after tech's
recent weakness.
Just take a look at some of the big gains we saw in popular tech names yesterday: Apple, Amazon, up around four percent. Tesla spiking almost 20
percent, but still down two percent year-to-date.
One thing is for certain, volatile volatility that's what we're looking at. Volatility has been pretty off the charts. The NASDAQ has had swings of 1.5
percent or more in the past five sessions, and that the debate over which stock sector will have market dominance.
Many believing that the massive new stimulus, the U.S. Congress set to agree today with vaccine rollouts and economic reopenings can lift all
boats.
Joining us now, Dan Ives, the Managing Director of Equity Research at Wedbush Securities. Dan, Great to have you with us. The pullback was fast
and furious. The bounce back is looking almost the same. I'm sure you've been bombarded with questions from clients. What are you telling them, Dan?
DAN IVES, MANAGING DIRECTOR OF EQUITY RESEARCH, WEDBUSH SECURITIES: Look, it's a golden age for tech and EVs. So we're sort of have been pounding the
table buying these dips on the secular winners, the Apples, the Teslas. Some of these software names like Microsoft and I view it as a rotation
white knuckle, but a golden buying opportunity for what I view as a multiyear, bull thesis in tech, which doesn't change with the 40-bit move
and the 10-year.
CHATTERLEY: Interesting, Dan. I think one of the key counterarguments would be, look at valuations. They've broken with underlying fundamentals,
if you can assess them; their valuations are well above historical norms. I guess your argument is, so are the growth opportunities.
IVES: You just nailed it. I mean, if I look back the last five years, $400 billion spent in terms of, quote, "infrastructure technology upgrades." The
next four years, $2 trillion. So the growth is four or 5x and that would be my argument is that valuation is historical.
Of course, that continues to be a big emotional bull-bear thesis, but that's why we're in a secular massive shift from some of these
transformations around 5G Cloud, e-com or cyber security, which is why in my opinion, you continue to be a greenlight on tech.
We think NASDAQ, 16K this year. That's our target.
CHATTERLEY: Wow. So we're looking at, what -- 30 percent upside?
IVES: Yes, and that's why I have just view this pullback as just a massive buying opportunity even though of course, the rotation in 10-year fears
have created this.
CHATTERLEY: You know, it is interesting, and that makes sense to some degree if you look at a tripling of bond yields in isolation over the
period of what -- one year, just over one year. What we have to come back to is remembering that it is half of a percentage point increase in bond
yields and is that enough to derail, as you said, a $2 trillion growth opportunity over the next decade?
There's going to be volatility, but does it completely knock us off kilter? Probably not. That your argument or definitely not.
IVES: Yes, and Julia, you even think about electric vehicles, I mean, we are talking $5 trillion that is going to be spent over the next decade. Of
course, Tesla will be leading the charge. Nio and others, but this is, what we're talking about, you know, one of the biggest transformations from an
auto perspective that we've seen in the last 50 years.
And of course, these stocks are going to have ebbs and flows, but that's why right now, it continues to be a greenlight for Tesla, for Nio, Xpeng
and even some of these battery place like QuantumScape in terms of what is really going to be a transformation, not just in the U.S., but across,
really, a green tidal wave around the globe.
[09:25:13]
CHATTERLEY: Yes, I mean, I guess again, the counter is competition concerns. The shorter term chip supply concerns, even valuation.
We spoke to Fisker and Lucid and trying to put some perspective on current valuations is kind of impossible. It is head scratching, even for me when I
look at relative valuations of these stocks. How do you quantify value today when you're talking about a multiyear growth opportunity, Dan?
It is tough for investors to understand whether things are going to go up short-term, medium-term or down. Do you just buy these stocks and you just
sit on them and don't look at them every day?
IVES: You know, I think it's a quagmire for investors because just as you said from a valuation perspective, continues to be a head scratcher, but
then you look out.
The way we do and how we handle investors, you look out the next three or four years, who are the secular winners? Start to put some goal posts
around what numbers could look like as we get into more massive adoption, and what's the cash flow? What's the earnings power?
And when we do that, you know, you look at some of the names. Today, it is three percent adoption globally for EVs. Wait until that goes to 10 percent
in the next three years. It is pointing to the OEMs like a Tesla and Nio, but also, you want to play the whole supply chain across EV and from
batteries to recycling batteries to the power supplies and that's why, especially in the U.S., we see a Biden-driven green tidal wave on the
horizon.
CHATTERLEY: So very quickly, I don't want to steal all your intellectual property, but what stocks are you putting investors into today if you can
name some names for our viewers? What are you putting investors into today? Or what are they already in?
IVES: From a China EV, Nio and Xpeng, I think those are the best pure plays. Tesla right now in EV. It is Tesla's world. Everyone else is paying
rent.
We've got QuantumScape on the battery side. We love that name and Fisker, I think that is a potential real startup, pure play that could be successful
on EVs, and an oldie but goody. I think GM gets re-rated on its EV ambitions.
I think that's really a renaissance of growth happening in Detroit with Mary leading the charge over there.
CHATTERLEY: And on the software side? Just in general tech?
IVES: Software, we love Microsoft's cloud. Cybersecurity names like Zscaler or Palo Alto. And then on core Cloud, names like DocuSign as well.
That stock has been massively sold off.
We love those in terms of just the Cloud cybersecurity transformation that's happened. That's why you said, sometimes the red screens, it's easy
to get nervous.
I think it is forest to the trees in terms of where we see tech.
CHATTERLEY: Fantastic. Dan buy-on-dips Ives, great to have you on the show.
IVES: Thank you.
CHATTERLEY: The Managing Director of Equity Research at Wedbush Securities. Great to have you on.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:14]
CHATTERLEY: Welcome back to FIRST MOVE and U.S. stocks are up and running this Wednesday. And as expected, we are looking at a higher Wall Street
open. The Dow back in record territory once again.
The NASDAQ looking to build on that 3.6 percent gain yesterday. Wow, we are already up 1.3 percent there. Investors applauding that tame consumer
inflation data from the United States, particularly good news for rate sensitive tech sector stocks.
The rally also about a vote of confidence, I think in the U.S. economic recovery, too. We are monitoring action in the U.S. House of
Representatives set to take its final vote on that $1.9 trillion emergency aid bill later today. Two hours of debate on the measure getting under way
this hour.
Final passage though not in question as we've discussed. It's a historic day nonetheless. One of the largest spending measures in U.S. history.
Okay, LEGO sales toys surged more than 20 percent last year, call it the play at home effect of the pandemic, lockdown life, not the full story
however. New toys that straddle the online-offline world also boosted sale as did the company's success in newer markets like China.
Joining us now Niels Christiansen, the CEO of LEGO Group. Sir, fantastic to have you on the show. It was clearly a tough year, I think for many
businesses with retail shutdowns, sporadic manufacturing site closures. I think you must be incredibly pleased with these results.
NIELS CHRISTIANSEN, CEO, LEGO GROUP: Yes, thank you. I am very, very pleased and also pleased by the fact, as you say, that we've gotten our
LEGO sets and play experiences to many more kids around the globe and we've done that on the back of seeing the payoff of some of the long-term
investments we've been doing over the year, so what I will would just say for our organization and for our employees across the globe, it's been a
very tough year dealing with all of the disruptions and challenges that you just talked to and I'm actually very, very grateful of the efforts that
have been put in by everybody on that.
CHATTERLEY: Yes, I think the smile says it all. You're proud of your team members and employees and colleagues. Is a 21 percent jump in sales
sustainable do you think or do we have to acknowledge that perhaps you will see less growth over the next year?
CHRISTIANSEN: Yes, I think don't expect another 21 percent on top, but I do think we can actually grow on top. I don't think it's the sense we had
one good year and then we can't continue the momentum.
We believe that we can continue actually into 2021 outpacing the interest rate, taking market share as we have done consistently over the last three
years.
I don't think that will lead to 21 percent growth, but it probably will lead to a good one-digit growth ahead of the market and that, I think,
would be really strong on top of this excellent year.
CHATTERLEY: Yes, it is a vote of confidence, certainly. The number of visits to LEGO.com in 2020 was double what we saw in 2019, which is one
piece of the story here. Again, it comes back to what's sustainable.
Do you think some of that demand that you saw for e-commerce dissipates to a post-pandemic environment? Because I can see that you're recruiting in
for digital and tech team members. So you clearly believe this strength could continue. Can it be as strong?
CHRISTIANSEN: It is a good question, but I think what we have seen and what we you are also talking to is the fact that some of the trends that we
have seen come over the last two or three years, one of them being the shift towards e-commerce has actually been accelerated through the
pandemic. So it's not a new trend, it just happened fast.
As all of those doors closed down, consumers migrated very quickly on e-com and the investments we've made actually allowed us, as you say here, to
cope with that rate increase in visitors and actually providing with a good digital experience.
I think many of those consumers had a pretty good experience is what they did, and they really like it and I think we have recruited into the brand
and get very strong feedback also on their experience, so it would be my hope and my expectation that we can keep on adding these people in the
brand and thrill them with experiences also in 2021.
So I do believe that we can sustain a lot of that and when stores open, of course, we will start to see more traffic in stores. We actually see queues
outside stores often when we reopen because our fans have been so much wishing to get into stores and into the LEGO universe and be immersed into
the brand like very few brands have it.
So stores play a vital role for us as well on that brand experience and I do think that between the shifts we have seen, the good experiences in
stores, reopening, we will be able to sustain a good momentum albeit not at 21 percent again, I think.
CHATTERLEY: You know, it's fascinating. We were just showing some pictures there and Super Mario, I know was a huge element of the success over the
past year, the collaboration with Nintendo, but we were also just showing these enormous dinosaurs which is just phenomenal to think that people have
built those, quite frankly.
But it's not just about bricks, it is about, as we mentioned, video games, movies, cartoons, the LEGO amusement parks as well, and China.
Just explain to us the growth that you're seeing in China and for those of us, I think, that grew up with LEGO, so we understand the concept and we
know what this means, what is it that is capturing the imagination of people in China with LEGO?
CHRISTIANSEN: Yes, I would say it's super exciting because we've been on a good journey with strong double-digit growth for quite a while now in China
and as the base increases, of course, it gets more difficult to sustain that, and we did sustain that again in 2021 and I am just saying, like, in
the U.S. and Western Europe. I mean, I played with LEGO as a child -- LEGO bricks as a child, so of course now, when I got children, they actually
were playing with LEGO bricks and I was a good ambassador.
In China, that's not the case. There are many parts of China where the LEGO brand is not that well known and at least, the parents have never played
with LEGO bricks when they were kids.
So we have to build the brand and one of the things that we've done quite successfully in 2021 was actually getting into new cities. These tier three
and tier four cities that are not that large by Chinese standards, but are very large by any other western standards in terms of population.
We are getting in there and we see when we go in and we have brand campaigns and we have access on e-commerce, whatever, the store in the city
that allows kids and families to get in and get their hands on bricks and try it out and see everything in there, that is brand building and that is
giving a huge lift when we build the brand.
So it is a really exciting story and I think it does show the co-existence that we need of e-commerce, digital experiences, platforms where people can
really go on and then creating this physical brand experience where the stores are so crucial.
CHATTERLEY: Yes, and bringing people together and getting them away from screens to a certain extent, as well. I distinctly remember one Christmas
where I got a LEGO car and my sister got My Little Pony. No offense to My Little Pony, but I was very grateful for my LEGO car.
You know, I have about 30 seconds left -- not that I am biased.
We have about 30 seconds. Sustainability. I know you were trying paper bags because packaging, never mind plastic bricks and your sustainability push
is also very important to you. How is that trial going?
CHRISTIANSEN: The trial is going well and it is really important for us that we get out of single-use plastic because there is a difference between
the single-use plastic and the durable plastic in the bricks and we've set ourselves the ambition that by 2025, we will be totally sustainable on all
packaging and I hope we can do it a little bit before.
So the trials are going really well and we are on track to really make all the investments it takes to change our manufacturing setup to really be
sustainable within the time limits we set ourselves.
CHATTERLEY: Yes, and I was just showing your headlines there because that makes a great read. So I advise people to go and have a look at that
because you're doing lots of things.
Niels, great to chat with you. Thank you. Niels Christiansen there, the CEO of LEGO Group.
All right, coming up on FIRST MOVE, drone delivery of COVID-19 vaccines in Africa.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It is worth noting that this is going to be the first of our drone delivery of COVID-19 vaccines in the world, actually.
(END VIDEO CLIP)
CHATTERLEY: Lifeline from the sky for remote communities. The founder and CEO of Zipline, next.
(COMMERCIAL BREAK)
[09:42:52]
CHATTERLEY: Welcome back to FIRST MOVE. Now, this show has been tracking the progress of the delivery firm, Zipline which uses drones to bring
medical supplies for hard to reach towns in Ghana. Well, now, the company is working with UPS and the government to deliver COVID vaccines the same
way.
The drones which look like small planes have already dropped 4,500 doses in Southern Ghana by parachute. The drugs are insulated, but don't need to be
cold-stored because of the sheer speed of the operation. It is hoped that 2.5 million doses will be distributed the same way.
Keller Rinaudo is Zipline's co-founder and CEO and joins us once again. Keller, great to have you on the show. I feel like the last few years has
made you so ready for this moment and able to get these vaccines to hard to reach places. Just talk us through how it's all going.
KELLER RINAUDO, CO-FOUNDER AND CEO, ZIPLINE: Yes, I mean, obviously, we're really lucky in that we've now had five years of experience operating at
national scale delivering other similar kinds of products including traditional vaccine.
So we really see, you know, as this pandemic has moved through these different stages, today, obviously, we've made great progress on
development of the vaccine, manufacturing of the vaccine. Now, the challenge is distribution and almost every country in the world is trying
to figure out how to do distribution safely, rapidly and most importantly, equitably.
But the challenge is because the vaccine has cold-chain requirements, in a lot of countries, it's not clear how it's going to be possible to make sure
that people who live in rural areas are going to get the same level of access as people who live in cities.
This is really, really important for every country and I know that this is fundamentally the problem and Zipline is making it possible to solve.
CHATTERLEY: Yes, I mean, there are so many problems being solved here. I believe half the population in Ghana don't live in the big cities, so it is
how you do distribute the vaccines to those places -- and we mentioned it.
But to your point, again, you do this so quickly with these drones and you parachute the supplies in that once they leave their cold storage in the
warehouse, you don't need the cold storage because you get the vaccines to people in these places to the healthcare facilities really quickly.
[09:45:06]
RINAUDO: Yes, it is a fundamental re-imagination of how healthcare supply chains work. Because before, we used to use a really big heavy truck to
make a delivery of goods every week or every month. Now you actually have thousands of hospitals and health facilities getting deliveries every day
or even multiple times a day.
So this actually totally changes the way that health systems can plan and treat and vaccinate patients when they don't have to plan ahead and they
can get just the right amount that they need in any given hour.
CHATTERLEY: And just to be clear, there is an app, a Zipline app and the doctors put in the request for what they need. You get that message and
then you parachute the supplies in.
RINAUDO: Yes, I mean, to be really, to make it simple, we have distribution centers across the country that allow us to reach almost every
hospital and health facility nationally. And we do this in Rwanda, Ghana and now, the United States today.
Ghana is where we, just last week, begun delivering COVID-19 vaccine although, we hope and expect to be doing that in many countries over the
coming months.
It is super simple: when a doctor or nurse needs a product, they can essentially push a button on a phone and then the delivery will instantly
be done to that GPS coordinate. Use a small autonomous vehicle that's fully electric and flies from our distribution center to that GPS coordinate,
delivers a package from about 30 feet up.
We use a simple paper parachute that isn't that different than the packaging you'd get in an Amazon package and then that doctor or nurse
immediately has what they need to treat a patient. In this case, when they need to vaccinate a patient.
CHATTERLEY: Have you ever lost a drone or lost a package or had a situation where weather, perhaps, interfered?
RINAUDO: You know, on weather, it's not enough to say that we will treat patients or patients can depend on us with their lives when the weather is
good. For a system that can operate at national scale integrated with the national healthcare system, you have to be able to operate all the time,
and so Zipline has actually spent the last five years developing technology and flight control algorithms and the hardware necessary to be able to fly
through extreme wind, extreme rain, crazy storms.
We have to -- there are 25 million people who depend on us with their live and the lives of their kids today. So, we always have to be there for them
no matter what the weather is doing.
Zipline has never lost a vehicle. We build safety systems into everything that we do, so that even if a vehicle for technical reasons can't make it
back to the distribution center, it can bring itself safely to the ground and we can go basically pick it up and have it ready to deliver a couple of
hours later.
CHATTERLEY: Yes, I mean, you're working with the government and you've long been working with the government in Ghana and as you said, in the
United States and Rwanda.
You hinted at expansion plans a couple of minutes ago. Tell me what you can about expansion plans, because clearly, there are governments, there are
regulators involved when we are talking about drones. How quickly can you ramp up and where are you looking?
RINAUDO: Well, obviously, the countries where Zipline already operates, Rwanda and Ghana, are top of mind. The reality is that almost every state
government and private healthcare system that we talk to is trying to solve this same problem, which is how do we make sure that people who live in
rural areas are not going to be left behind and these are typically vulnerable populations in any country, these are populations who might live
in pharmacy deserts, so areas where you're not within 30 minutes of a pharmacy where you can easily get this kind of a medical product.
And you know, the demand is extremely high and we also look -- and when you're facing an unprecedented challenge, we also need unprecedented
technology to solve it. The great news is that this technology is ready to serve. It was tested over the last five years. We know it can operate at
national scale. In many countries, the infrastructure is already built, just relying on health systems and government pushing the on button.
CHATTERLEY: Yes. Well, it's fascinating to watch you work. Thank you to you and your team. It is brilliant problems being solved here. Brilliant
solutions to tough problems. Keller Rinaudo, great to have you on the show once again.
RINAUDO: Thanks, Julia.
CHATTERLEY: We will talk soon. Zipline's co-founder and CEO there.
All right, you're watching FIRST MOVE. More to come. Stay with us.
(COMMERCIAL BREAK)
[09:51:37]
CHATTERLEY: It may be 2021, but Dubai's Expo 2020 is set to open in October after a one-year pandemic delay. In today's "Road to Expo," John
Defterios takes you on a tour of the city's new intelligent traffic system.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR (voice over): With clear concise messages, the signs that direct Dubai's millions of drivers
look simple, but the place that manages these alerts is one of the world's most advanced traffic control centers.
SALAH AL MARZOUQI, DIRECTOR, DUBAI INTELLIGENT TRAFFIC SYSTEM, RTA: The uniqueness of this building and the system itself is like we customize the
platform which we call the iTraffic -- intelligent traffic -- to fit the need of Dubai.
DEFTERIOS (voice over): From roads to rails, Dubai is spending over $6.8 billion on infrastructure in preparation for the COVID-19 postponed Expo
2020.
With tens of millions of visitors expected to attend, transit officials hope to make travel as easy as possible.
MARZOUQI: Expo is one of the events -- major events that will affect not only Expo area, it will affect even the whole city.
DEFTERIOS (voice over): To ensure smooth journeys, the Intelligent Traffic System Center opened in November. Here, about 60 employees monitor 60
percent of the city's roads.
A network of 245 ITS cameras, feedback information to artificial intelligence software which help engineers respond to traffic incidents in
real time.
MARZOUQI: The project is one of the main goals to a safe and sustainable transport.
DEFTERIOS (voice over): Cars, however, won't be the only option for Expo attendees.
ADULMUHSEN IBRAHIM YOUNES, CEO, RAIL AGENCY, RTA: We believe that more than 29 percent of the visitors daily will use Dubai Metro to reach Expo
site.
DEFTERIOS (voice over): Anticipating this ridership, Dubai built an entirely new metro line fittingly called Route 2020. In 2016, construction
began on seven stations which today house smart gates, wider platforms and bigger trains.
YOUNES: Currently on our Dubai Metro, red and green line, more than 800,000 passenger capacity on the network. Route 2020 will add to that by
more than 250,000 passengers every day.
DEFTERIOS (voice over): Expo 2020 will only last six months. The transit leaders believe this infrastructure will serve Dubai for decades to come.
YOUNES: This line will stay active because it will be used by so many passengers who are living on the areas around the stations.
MARZOUQI: The scope of Expo is one of the scope that we really planned for, not only that one, we are also ready for beyond Expo with the coverage
that we are planning for.
DEFTERIOS (voice over): That plan coverage includes monitoring 100 percent of Dubai's roads by 2023. Meaning messages like these will long outlast a
single event.
John Defterios, CNN, Dubai.
(END VIDEOTAPE)
[09:55:00]
CHATTERLEY: All right, that was John Defterios there.
One final look at the markets as we wrap up the show. The majors holding on to early session gains. Tech, well and truly leading the advance.
As you can see, the NASDAQ up around 1.5 percent. That is up now up around five percent over the past two days. Key to watch though today.
Investors are hoping that a key auction of 10-year Treasuries go smoothly as the auctions yesterday, and does not lead to a rise in yields. Remember,
the markets, the stock market investors very sensitive to bond yields at this moment.
In trading today, the energy and the consumer-driven sectors are the best gainers, so it is broad-based gains in the session, at least for now but
watch those auctions.
And that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. Search for @jchatterleyCNN.
And in the meantime, stay safe.
"Connect the World" with Becky Anderson is next, and we will be back tomorrow.
Have a good day or evening, wherever you are in the world.
(COMMERCIAL BREAK)
[10:00:00]
END
