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First Move with Julia Chatterley
Israel Warns of More Airstrikes as it Targets Hamas Leaders; Tough New Rules From Beijing, Bitcoin Falls below 40K; The Olympics Boss Insists Tokyo will be Safe for Games. Aired 9-10a ET
Aired May 19, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:14]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley, this is FIRST MOVE and here is what you need to know.
Further conflict. Israel warns of more airstrikes as it targets Hamas leaders.
China clobbers cryptos. Tough new rules from Beijing, Bitcoin falls below $40,000.00.
Games guarantee. The Olympics boss insists Tokyo will be safe.
And wondering about Warhol, Christie's CEO discusses their latest foray into NFT art.
It's Wednesday, let's make a move.
Welcome to the show once again and we begin this morning with the continuing unrest in the Middle East. Hopes of an imminent ceasefire
between Israel and Gaza militants fading as the Israeli Army says it is preparing for more days of conflict.
The Israeli Military says that overnight, it targeted Hamas commanders and infrastructure. Four civilians were killed in the airstrikes according to
the official Palestinian news agency. Cross border rocket attacks from Gaza resumed Wednesday after a day of Palestinian protests across the West Bank
and elsewhere.
Hadas Gold joins us now. Hadas, the strategic priorities, I think of the Israeli Forces becoming ever clearer and that means no end in sight.
HADAS GOLD, CNN CORRESPONDENT: Well, we're definitely getting the indication, Julia, that they plan for another few days of action giving the
impression that they don't quite feel the intense pressure from the international community and especially from the Americans to stop their
military campaign. We're also learning some important new developments today including that the Israeli military tried twice to target and kill
the leader of the Hamas military wing, Muhammad Deif.
He has been on the list of Israel's most wanted for more than 20 years. He has been -- they say he is responsible for several -- for planning and
executing several terrorist attacks within Israel. He's on the U.S. designated list of terrorists and has been there since 2015, but despite
them targeting him twice since this conflict began, he has managed to escape.
But this is part of Israel's objective in this military campaign is try to degrade Hamas not only their actual capabilities by targeting rocket
launchers, by targeting their tunnel system, but also trying to hit Hamas commanders and if they were to get somebody like Muhammad Deif, that would
be for Israel, a big objective in part of this conflict, but we are seeing from them indications that they plan to continue for a few more days.
We obviously don't know how much longer that will be and the airstrikes continue, and as well, the rockets are continuing to fly from Gaza into
Israel today.
I mean just already this morning, there have been several sirens, red alert sirens going off in the south. Our colleagues were down there, have
witnessed some more rocket interceptions by the Iron Dome missile system.
And another important element that we are learning today is we are getting the explanation from the Israelis on why they targeted that building in
Gaza that housed the Associated Press and Al Jazeera offices. It has got a lot of attention over the past few days and the Israeli military warned
everybody in that building to evacuate because they were going to destroy it.
The Israelis had said that Hamas was using that building but had not divulged what they thought that Hamas was using it for. Americans saying
they received that Intelligence and now the Israeli and a senior IDF officer telling CNN that the Hamas military wing was using that building
for research and development of high end capabilities for the most sensitive attacks against Israel.
Now, we know that the Israelis have shared that Intel with the Americans. We don't know exactly how the Americans interpreted that, whether they
accepted that explanation. But of course, that has been a big -- it has received a lot of attention over the past few days about why the Israelis
targeted that building.
So, important development there on their explanation. Of course, the death and destruction and the civilians caught in this crossfire continues.
According to the Palestinian -- the Hamas-run Palestinian Ministry of Health in Gaza, more than 200 people have been killed including more than
60 children. We're getting reports of more civilian deaths also today including a radio journalist. In Israel yesterday, two more civilians were
killed when the agricultural packing facility they were working at was hit by mortar fire.
This goes to show you that although there are plenty of diplomatic efforts going on underway behind the scenes who try to reach some sort of calm in
the situation, it's still very much active and it is still unfortunately very much violent -- Julia.
CHATTERLEY: Yes, and lives are being lost. Hadas Gold, thank you so much for that. Stay safe.
And as always, we will update you on the latest Middle East developments throughout the day here on CNN, so stay with us for that.
For now, we will bring it back to business. It's what I call a risk off day. Most asset classes losing ground including the crypto space which we
will get to in just a moment, but you can see it there, a sea of red.
[09:05:10]
CHATTERLEY: U.S. futures heading for a third losing session. Tech, and some of those recovery play stocks also weighing on the broader markets
here premarket.
We also finished at session lows in Tuesday's market session in the United States with financials and the energy sector falling by well over one
percent. It's again inflationary fears, whether in terms of products or for wages that still dominate.
And on that note, in fact, Bank of America announcing Tuesday that it will raise its minimum wage to $25.00 an hour by 2025. You know, the
announcement is coming ahead of a Senate hearing next week on Big Bank oversight that will include testimony from all the major U.S. financial
heads, including Bank of America's Brian Moynihan -- coincidence? There are no coincidences. I said it.
China, also a key sentiment driver overnight. News site POLITICO says the E.U. parliament is set to freeze a key investment agreement with China that
was seven years in the making, I believe, but China also triggering a further crypto crunch, call it Beijing versus Bitcoin and some of the
others. The largest cryptocurrency falling more than 20 percent as you can see. It's actually more than 23 percent right now, to its lowest level
since February, after China banned financial firms from offering crypto services to clients.
Beijing also warned on speculative investment in the crypto space.
Just to give you some context here Bitcoin, now down around 40 percent from all-time highs it hit just one month ago. It's still up 27 percent year-to-
date, that context important.
Let's get more on all of this in the drivers because Clare Sebastian joins me now.
Clare, let's talk about the curbs first. It comes as China targets the operations of its tech giants, particularly those operating in the payment
space, let's be clear. And of course, they continue on the road to test their own Central Bank, digital currency, the CBDC as it is known, which
also feels key.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, all important context, Julia. And it's important to note, given the reaction that we've seen in
the market that this isn't sort of a huge move in the broader context. China has been cracking down on virtual currencies for many years.
This is in many ways, incremental, but I think the reaction shows just how sensitive and how volatile this market continues to be.
This was three Chinese financial watchdogs that are supervised by the People's Bank of China and the China Insurance and Banking Commission and
they have said, as you noted that financial institutions and payment companies shouldn't participate in any transactions related to crypto or
provide crypto related services.
In that joint statement, they also warned about sort of rising speculation in this market saying prices of cryptocurrency have rocketed and plummeted
recently, I think, we just noted that and speculative trading has bounced back. They warned this seriously harms the safety of people's property and
disturbs normal economic and financial order.
So this sort of didn't immediately take off in terms of the market reaction. And then overnight, suddenly, we saw these huge moves. It should
be noted as well that it is not just Bitcoin, other cryptocurrencies are also falling, some of them, in fact, more than Bitcoin.
So this has sent serious waves through this market. But I should as well note that this is, you know, incremental in the broader context of what
China is doing.
CHATTERLEY: Yes, incrementally termed, China terms, but also incremental to the broader volatility that we've been watching in crypto for the last
several weeks as well. I was trying to look for some kind of connection, and I guess, the one that I could make between the broader crypto space and
what China is doing is mining in China and whether or not the Chinese say, hey, we're going to put some limits on mining in China, because that would
have, I think, a broader shakedown effect in the crypto market.
But to my bigger point here, there is more than just what China has done in the last 24 hours on an ongoing basis going on in the crypto market. It's
noisy.
SEBASTIAN: It's very noisy. You know, this is a market that has been hanging on Elon Musk's every tweet for the past few weeks and some of the
big falls that we saw earlier this month were because of his sort of flip flop announcement that Tesla was going to suspend purchases of cars in
Bitcoin while he waits to see if mining can become more sustainable on an energy front.
Then earlier this week, we saw more falls after he sort of suggested that Bitcoin was selling off and that Tesla was selling off some of its Bitcoin.
He later clarified that. He also said Dogecoin, down quite sharply after his jokes about it on "SNL." So this is an extremely volatile market.
But one thing I want to point out to you, Bank of America released its fund managers' survey this week. They said that 43 percent of the fund manager
survey say long Bitcoin is the most crowded trade out there, 75 percent of them say that it's a bubble. And they do know that calling something a
crowded trade is often associated with a peak in the market.
So you could read into that, that there's a sort of a shift in mood from the institutional investors around Bitcoin, but on the other hand, others
will point out to you that we have seen 40 percent drops in Bitcoin before this. This is characteristically a very volatile asset and many believe
that it will bounce back.
Michael Saylor of MicroStrategy added another $10 million to his portfolio this week.
[09:10:04]
CHATTERLEY: Yes, then his share price go down as a result, but your point there is vital. We've seen volatility like this before and a lot in the
crypto space is saying, look, we've been here before and we ultimately end up -- we end up rising.
I'll match you though, with JPMorgan saying that they are seeing institutional clients that are probably looking at this volatility and
going Wowsers, pushing back into the gold investment space, which, quite frankly, doesn't surprise me either.
This is going to be a long road. Clare Sebastian, thank you. It has nothing to do with Tesla.
Clare Sebastian, thank you so much for that.
Okay, let's move on. The Tokyo Olympics will be held in a safe way, that's what the head of the International Olympic Committee said today as public
opposition to the Summer Games grows amid a surge in COVID-19 cases in Japan.
Selina Wang joins us live from Tokyo. Selina, we are going to continue to talk about this one as well, I think for the coming weeks. But what did
catch my eye was the proportion of people that are going to be present in the Olympic Village that will have been vaccinated. And that statistic for
me was key. It doesn't include those that go to watch the Olympic Games, but it is important for those that are competing.
SELINA WANG, CNN CORRESPONDENT: Right, Julia. That is an important note that even though vaccines are not mandatory, the President of the IOC said
that he expects more than 80 percent of the people at the Olympic Village to be vaccinated. And the IOC has been reiterating this point that given
the success of test events for the Olympics, they believe that these Games can be held safely with the current COVID restrictions that they will have
in place, which includes regular testing, contact tracing, as well as a contact tracing app that everybody has to download.
In addition to that, however, these athletes are not going to have to quarantine for 14 days. So there are hefty restrictions in place, but they
are not reassuring the broader public, the medical community. You have several groups of doctors, including one association that represents more
than 6,000 doctors in Tokyo, and they are urging the government to cancel these games.
They say that with these restrictions in place, even without any spectators, there is still a risk that these games could turn into a super
spreader event. One that not only spreads more contagious variants throughout Japan, but around the world.
You have a situation, it's not just a small scale test event. You're going to have more than 11,000 athletes from more than 200 countries, plus staff
as well as tens of thousands of volunteers who are most likely going to be unvaccinated. Not to mention the fact that Japan at this point has still
vaccinated -- fully vaccinated less than two percent of its population.
The country is struggling to deal with a fourth wave of COVID cases, and in many large cities, the medical system experts say is at the brink of
collapse -- Julia.
CHATTERLEY: Yes. It's very, very worrying. It almost looks like the only thing that they can cope with here is the athletes themselves and none of
the usual additions to the Olympics.
Selina, great to have you with us. Thank you for that. Selina Wang there.
All right, these are some of the other stories making headlines around the world.
Taiwan tightening COVID-19 restrictions today to try and curb a spike in new cases. The new rules mean some nonessential businesses must close and
there are limits on how many people can gather together.
Meanwhile, Taiwan's presidential office has accused Beijing of blocking access to coronavirus vaccines.
CNN's Will Ripley joins us now from Taipei.
Will, we focused on Taiwan a lot on this show and the early success that they had. What happened in terms of quarantines, contact tracing, testing -
- did they just get complacent?
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: I think complacency is certainly one factor here, Julia; politics, another.
Taiwan, as you will know is a wealthy island that is one of the world's leading manufacturers for semiconductors. They have plenty of cash, but
they have had a very difficult time obtaining vaccines. They placed an order for five million AstraZeneca doses, and up until today, they only had
300,000. They got another 400,000 this afternoon, but still under a million have actually arrived in country.
They were negotiating with BioNTech trying to order millions of doses from them and the deal fell apart. And Taiwan's leaders didn't feel the pressure
that they're feeling now to get doses into the country because for so many months after their very decisive action at the beginning of the pandemic,
to shut down their borders. They had eliminated local transmission.
But now that they're dealing with their most severe outbreak since the start of the pandemic, they are renewing their diplomatic efforts to try to
speed up the arrival of vaccines and they are calling out Mainland China. As you know, a very complicated relationship between this self-governing
island of 23 million people and the Mainland which considers it a renegade province that they could take back at any time and they've been flying
military planes in the Taiwan Strait and South China Sea to prove their point on a regular basis.
There's this tweet that came out from the presidential spokesperson in Taiwan saying: "Taiwan access to vaccines continues to be slowed down by
Chinese interference, while they insist we buy Chinese made ones. If you really want to help, please don't stand in the doorway. Don't block up the
hall."
[09:15:04]
RIPLEY: This comes after a back and forth between the Taiwan affairs office in the Mainland, which put out this message offering to help Taiwan
with this new epidemic. And then Taiwan's Mainland Affairs Office, firing back saying, if your offer was actually genuine, then stop distracting us
with military intimidation and let us focus on the pandemic.
And of course, they're also saying that they're going to try to develop their own vaccines, locally develop vaccines, and Taiwan's President, Tsai
Ing-wen says late July is the target for those to be available to the public. Listen.
(BEGIN VIDEO CLIP)
TSAI ING-WEN, TAIWANESE PRESIDENT (through translator): We will let Taiwan people have access to domestic produced vaccines in the quickest way and
ensure they are in the safest condition in order to protect them.
This will also allow Taiwan to return back to normal as soon as possible.
(END VIDEO CLIP)
RIPLEY: Meanwhile, Taiwan is expanding their level three restrictions. These are the most intensive restrictions that Taiwan has had throughout
the entire pandemic, just one step short of a lockdown.
It was just from this weekend here in Taipei in the New Taipei City, but now Julia, they've expanded those restrictions nationwide. They continue to
have hundreds of new cases confirmed every single day. They are nearing the 1,000 mark just in the last week, and considering that throughout the whole
pandemic, they just had around 2,000, they've now crossed the 2,000 mark, and just 14 deaths in this country.
This high of a case number is very troubling because they have no herd immunity, because fewer than one percent of the population has been
vaccinated, because people weren't really wanting to get vaccinated. There wasn't an urgent need they felt to get vaccinated. But now you have a
population highly susceptible if this outbreak were to really spread.
So they're really hunkering down here and hoping that they can get more vaccine doses in arms as soon as possible.
CHATTERLEY: Yes, a fraction of the numbers that we've seen elsewhere, but to your broader point, circuit breakers and key restrictions worked in the
past and they are going to try it again.
Will Ripley in Taipei, Taiwan. Thank you for that.
All right, still to come here on FIRST MOVE, once you pop, you just can't stop. How Christie's is continuing the NFT trend with the help of Andy
Warhol.
And vaccinated visitors welcome, Europe reopening its borders to travelers.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. A soft picture for U.S. majors premarket with Bitcoin blues helping contribute to today's negative
sentiment. Another check of Bitcoin plunging by some 22 percent right now. I'm going to check the screen when it comes. Yes, it hasn't moved too much
more, and testing at $30,000.00 levels once again after new moves by China to rein in the broader crypto space.
[09:20:07]
CHATTERLEY: Tesla shares falling more than five percent premarket amid continued uncertainty over how much Bitcoin the company still has on its
balance sheet perhaps.
MicroStrategy, which announced just yesterday that it's added another $10 million to its Bitcoin holdings is on track to fall more than 15 percent.
Michael Saylor, the CEO of the Cloud software firm says in a tweet yesterday that MicroStrategy now holds more than 92,000 Bitcoin acquired
for an average price of $24,450.00.
Okay, let's take a closer look at China's crypto crackdown. Three of the nation's regulatory agencies have banned banks and online payment firms
from offering any services related to cryptocurrencies. In a statement, they said speculative trading in cryptocurrencies, quote, " ... harms the
safety of people's property and disturbs normal economic and financial orders."
Joining us now is Scott Galloway, Professor of Marketing at NYU Stern School of Business. He's also the author of "Post Corona: From Crisis to
Opportunity."
Scott, great to have you with us. That's an interesting quote. It disturbs normal economic and financial orders. Some might say that's happening in
the west, too, and others might say that's the whole point. What do you make of what's going on?
SCOTT GALLOWAY, PROFESSOR OF MARKETING, NYU STERN SCHOOL OF BUSINESS: Yes, well, it's interesting. We now have two entities competing for who has the
most influence or more influence over the markets and that is the second largest economy in the world, and the regulators or Elon Musk, who is
literally making and destroying small fortunes 280 characters at a time.
I wonder if this goes to the S.E.C. or not just the S.E.C. into actually clarifying their viewpoint on what feels like -- you don't call it market
manipulation -- market shaping, influence from individuals specifically, specifically, Elon, but this is -- I mean, it's still up for the year, but
there's no doubt about it. This is going to draw additional scrutiny.
Everybody -- nobody minds, market manipulation as long as the manipulator is manipulating the price of the underlying asset in their favor. That is
no longer happening. It's going up and it's going down. But it's going to get interesting here, Julia, that's all I can say from our regulators.
CHATTERLEY: The danger is, it's manipulating it in his favor. I mean, to your point, if you -- can you have an asset class where one tweet or even
one word in the case of "indeed" over the weekend with Elon Musk can send a market or an asset like Bitcoin or Dogecoin up 20 percent one day, down 10
percent another. I mean, it's a sort of manipulator's dream. It's a regulators nightmare.
GALLOWAY: Yes. So imagine, Matt Levine from Bloomberg had a great analogy and that is imagine you found a bottle and you rub the bottle and a genie
comes out of it. And you could say to the genie, all right, I can buy an asset and then I can take that asset up 10 percent and sell. And then with
tweets, take it down 10 percent and buy more. How much would someone be willing to pay for that bottle?
And the wonderful thing about the markets, it creates confidence for numerous people to invest in the markets is that no one individual has been
able to control any sector of the market for very long. That is a key component of rational markets that create confidence for a bunch of players
to come in. There is no one individual or company controls that market.
And we are seeing that, in fact, one individual does have incredible influence over the market, and at some point, the S.E.C., I think it feels
like Elon Musk is kind of waving -- thumbing his nose in their face. And I think at some point, they're going to respond. But yes, it doesn't feel
like a healthy market.
CHATTERLEY: How long do they take to respond, Scott? Because I think that's the point. I mean, we keep talking about the S.E.C., but these are
not securities. And that's the point like, is there any regulator that knows whether it's their responsibility to react and how to react? Quite
frankly, that's part of the problem here.
GALLOWAY: Yes, it is. It's technically not a security. So there's some question around whether it's even under the domain of the S.E.C. because it
doesn't represent underlying ownership in a company, so it's technically not a security, but it has been classified as a type of a commodity, but
when markets seem to be getting destabilized, and I think these actions over the last seven days, where you see $200 billion wiped off an asset
class because of a tweet, it is going to inspire some people to reach out to the regulatory agencies and say, you need to do something, even if it's
clarifying their language on market manipulation.
The S.E.C.'s language around market manipulation is purposely vague. I wouldn't be surprised if they come out and clarify it and don't even
mention Mr. Musk's name, but it'll be clear who they're talking about.
Something is going to happen here, I think in the next 30 days, Julia.
CHATTERLEY: Do you?
GALLOWAY: Oh, and even if it just clarification of what market -- the definition of market manipulation or something-- something more aggressive,
but I'll tell you, you know what, I think is, I think about second order effectually. I think what this reflects is just how weak Tesla's Board is.
If you think about Elon Musk, this is an individual potentially putting people on Mars, putting cargo into space, perhaps converting us from
internal combustion engines to electric engines. This is important work. It is tremendously lucrative.
[09:25:11]
GALLOWAY: The automobile market is now a $800 billion market on the backs of Tesla's ascent. And the question I'd be asking the Board is, is this
really a worthwhile distraction from your good work? And our responsibility as fiduciary is to look out for Tesla and SpaceX shareholders. To me, this
is really, I mean, it says a lot of things, but it says how weak the corporate governance is at Tesla who doesn't have a Board member who can
reach out to the CEO and say, simply put, what are you doing?
So this says, this is a weakness, an example of a weakness in governance, and how one individual is now more powerful, maybe even the Chinese
government. It is going to be -- I think, in the next 30 days, we're going to see some sort of statement of clarification or action.
CHATTERLEY: Is Bitcoin bigger than what we're seeing here? I mean, the valuation is moving around, let's call it a $1 trillion market. Let's call
the crypto space a $2 trillion market. Is it bigger than what we're seeing at this moment? And actually, will it be helped by some clarification from
the regulators? Or are we at risk of one individual here, particularly as far as some of the institutional interests that we've seen in recent
months, perhaps walking away and saying, actually, it's not for us at this time?
GALLOWAY: Well, you see a pattern, whether it's junk bonds, or the internet, they're sort of the Wild West, a ton of innovation. Typically,
the markets get out over its skis in terms of valuation. There is a correction or even a collapse some time. There's some regulation and it
creates a healthier market where giants emerge.
So you could see that same pattern being followed here. I again, think the underlying kind of thing that's driving the feeling of cryptocurrencies is
that at the end of the day, a younger generation in America and Europe and around the world isn't doing as well as previous generations for the first
time in history in the U.S.
And when they don't have the volatility, or they feel that the markets are rigged, when they see their wealth go from 19 percent of the economy to
nine percent over the last 30 years, which is what has happened to people under the age of 40, they are going to create their own asset classes, and
they're going to create their own volatility.
So to a certain extent, this is a generation of younger people saying, look, the current system is rigged towards you baby boomers, so we're going
to create our own asset classes, and we're going to create our own volatility.
I think at the end of the day, the underlying driver here is income inequality, and the fact that we have transferred so much wealth from
younger to older people, and they no longer have the same opportunities in the same markets that our generation enjoyed.
CHATTERLEY: And that's not going away anytime soon.
You've cited in blogs, two of the driving forces here as well, trust to your bigger point, I think there and also scarcity. In the case of Bitcoin,
the limited supply of a Bitcoin out there. One of your other bold predictions was in the next two to five years, Tesla produces a coin of its
own. Do you still believe that? For what purpose and to the point about trust in light of everything that we're seeing? Do you trust that coin
enough for it to be a success?
GALLOWAY: Well, there are a lot of coins. So, I would say that trust isn't a key component or credibility or trust by traditional metrics hasn't
gotten in the way of them being worth $50 billion or $60 billion, and I did realize last week, Dogecoin was worth more than Moderna. So I believe that
Elon Musk was absolutely, absolutely setting up a Tesla coin or a Musk coin.
And the reason why is despite how much money these individuals have, I think every morning they wake up and look in the mirror and say, hello,
wealthiest person in the world. And quite frankly, I think Elon Musk could probably produce a coin right now and increase his wealth by $50 billion to
$100 billion, which is a pretty large incentive.
Much less credible coins have -- or less famous or coins that don't have the same sort of megaphone that Elon Musk has have achieved multibillion
dollar valuations, and what was telling is a tweet last week where he said, I would not do a coin and less Dogecoin couldn't figure out more efficient
-- more efficient means of producing coins, which I read as, stay tuned, coming soon.
CHATTERLEY: Yes, you put nothing past Elon Musk. Scott, do you own cryptocurrency?
GALLOWAY: I don't have a single coin, Julia and I wish I had. Call me a boomer. I can't wrap my arms around it. I understand Bitcoin better, I
think than 99 percent of the general public and I still don't understand cryptocurrencies.
I just have a difficult time wrapping my arms around this. I am going to invest in the picks and the shovels. I'm going to invest in a company
called Ledger, which is cold storage wallet that owns supposedly or is storing about 10 percent of all crypto.
I think this is a phenomena. I don't think it's going anywhere. But I do think we're in the stage where we're going to see a decent amount of
fallout, some regulatory intervention, which I think will make for a healthier market because there's a ton of innovation around this.
But I'm embarrassed to say, Julia, I am a no coiner.
[09:30:03]
CHATTERLEY: No coiner. That's the technical term. I was going to ask you, now we don't have enough time -- what kind of world we're in when Dogecoin
is worth more than Moderna, which is, you know, vaccinating the world.
But I don't think there's one word for it. Scott, great to have you with us, bonkers, perhaps is the word.
Scott Galloway, Professor of Marketing at NYU Stern School of Business.
I answered my own questions now. Thank you, sir. We're back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE, and I can tell you Wall Street is a sea of red this morning. Weak open across the board for the U.S. majors.
As you can see, we are down more than one percent with the most pronounced losses happening at this stage in the NASDAQ, the tech heavy sector, down
some one and a half percent. But we've got weakness across most asset classes, in fact, including as we've discussed a broad based decline in
cryptocurrencies as Beijing announces new measures to control the rise of alternative currencies there. Bitcoin losing almost a quarter of its value
today alone, though it's paring back on some of those losses, still down near 20 percent.
The red hot rally in commodities pausing for breath here, too, with crude, lumber and copper all pulling back this session. Gold, which is benefiting
from renewed institutional investor interest at the expense of Bitcoin according to JPMorgan is up a little right now. We'll call that relatively
unchanged, but outperforming.
Okay, let's get back to today's top story and more breaking news from Israel where the conflict is in its 10th day.
In the last few minutes, sirens have sounded in northern Israel near the Lebanese border. The Israeli military says it is preparing for hostilities
to continue for days more as Hamas militants continue to fire rockets into Israel. Two hundred nineteen people have been killed by Israeli airstrikes
in Gaza. That's according to Hamas run Health Ministry there.
And Ben Wedeman joins us live from Jerusalem. Ben, the bottom line is, it looks like neither side backing down at this moment.
[09:35:00]
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, we understand that Hamas is sending messages that they actually would like a ceasefire,
but what we've heard specifically from Israeli Prime Minister Benjamin Netanyahu is that they're going to continue the operation.
Having said that, Julia, there are some interesting articles in the Israeli media today, suggesting that the security and military leadership feel that
they've essentially reached their objectives within the last two days, and then it's time to stop.
But they need a decision from the executive, from the Prime Minister, who according to these articles, for one thing, is very worried about these
corruption charges. And another is that he wants to ensure that in this current round of horse trading, that's following yet another Israeli
election, that he wants to come out on top and be able to present the Israeli public with a clear victory rather than a ceasefire in which Hamas
is crippled, but is not crushed.
And therefore, I think we've sort of reached the point where militarily, there's not that much more that the Israelis can achieve and there's a lot
they can lose with mistakes or things that could lead to large civilian casualties -- larger civilian casualties.
And the expectation is that within the coming days, somehow, perhaps with Egyptian mediation, with perhaps with Qatari mediation that some halt to
the hostilities will be reached -- Julia.
CHATTERLEY: And it has to come from the region, Ben, perhaps rather than the United States. President Biden asked once again what he thinks of the
current situation and he actually avoided answering the question.
WEDEMAN: Well, yes, the Americans, even though they hold so many of the cards, they provide Israel with $3.8 billion annually with military aid,
and they, of course, are providing constant diplomatic cover for Israel. They don't seem to be willing to play those cards, so to speak, and
therefore it is up to the Egyptians who have a lot of experience dealing with Hamas, because of course, Gaza shares a border with Egypt and the
Qataris who over the years have provided financial sustenance to the Gaza Strip with the approval of the Israelis, it must be pointed out and
financial sustenance to Hamas, as well, perhaps they might be able to work something out.
But the Americans seem like a giant with their hands tied when it comes to trying to actually make the fighting stop. They seem to be leaving it to
others to actually do that essential job -- Julia.
CHATTERLEY: Ben Wedeman, great to get your perspective as always. Ben Wedeman there. Thank you.
You're watching FIRST MOVE. More to come.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to the show. In a FIRST MOVE exclusive from the last word in fine art, Christie's is opening the bidding on the sale of
five NFTs or non-fungible tokens created from art made by Andy Warhol in the 1980s. Believe it or not, Warhol created these pictures on a paint
program on a Commodore Amiga. They were discovered on floppy disks a few years ago by computer engineers working with the Andy Warhol Foundation.
The CEO of Christie's Guillaume Cerutti joins us now again. Guillaume, fantastic to have you on the show. This is so much fun. And for me, Andy is
at the intersection of an established commercial pop artist and then the digital art world in what we're seeing there. What does this represent for
Christie's and for Andy Warhol as an artist?
GUILLAUME CERUTTI, CEO, CHRISTIE'S: I think it's, I think it's the logical next step after what we have done in March selling the NFT for $69 million
from a crypto artist, Beeple. What we have done last week, for the first time, we are presenting in our major auction sell in New York, an NFT
CryptoPunks have achieved $17 million. And now, what's next is, you know, reconciling the past and the present. This digital art was invented, was
created, conceived by Andy Warhol, retrieved a few years ago, and now back to life through the NFT and the possibility to secure the uniqueness and
the authenticity of this work on the blockchain.
CHATTERLEY: How much competition did you face getting hold of these prints and being able to sell them? Because I do see, if I compare you to what we
see going on at Phillips and Sotheby's, your competitors, you're diving in with both feet in terms of digital transformation, but also, I think, with
the NFT space.
CERUTTI: Well, you know, a few months ago, it was Christie's that really rediscovered or revealed this existing reality of the crypto market when we
presented for the first time for a major auction house this work by Beeple, it is great that now the whole art market is embracing this category.
At Christie's, we just want to continue to innovate and do things we believe are right at the right moment. That's exactly what's happening now
with these works by Andy Warhol with the Andy Warhol Foundation with which we are partnering.
And please stay tuned, because we will continue to innovate in this field.
CHATTERLEY: I mean, you proved last week with the sheer quantity and the amount I think of sales, that you can have a success in the traditional art
market, but you're also managing to break ground in this NFT space.
To your point, is it in the interest of artists and of the market to bring these two things together? Are you talking to other living artists and
saying to them, look, how about when you sell your physical art, you mint an NFT to go with it, you sell both. And then actually the economics are
reset, because if you resell that digital portion, even if the artwork itself resells and you don't get value, as the artist, you make money on
the NFT. Are you having those conversations with current live artists today?
CERUTTI: Well, I can say that there is a lot of curiosity and interest for the NFTs and for these new category, this new, you know, sector of the art
market. We have seen recently great traditional artists like Damien Hirst, you know, minting his own NFT with great success. So that's great.
I think, you know, for us, he is just exploring a new frontier, opening new possibilities and that's what we do. Last week, you're right to say that it
was a defining moment for the art market. You remember that last year, the market was just resilient. The demand was very strong, but supply was more
of a challenge.
This year, the market is resurging. What we've seen last year is a very strong demand with great artworks to be presented and sold for record
price, Picasso, Monet, Basquiat and in the same sale, NFT. That's the new reality of the art market today.
CHATTERLEY: Do you think you can bring David Hockney on board? And I use him as an example because he is one of only two live artists of course that
still manage to outsell Beeple with that auction and he said, I think it is ICS. He meant it's for international crooks and swindlers, that's what he
was talking about in terms of the NFT market.
Guillaume, I'm throwing the gauntlet down. Can you bring him on board in this space?
[09:45:24]
CERUTTI: Well, you know, I have much respect for David Hockney. He is a great artist. Himself, he is an innovator in the digital space. He has
created some of his works on iPads, you know, so he is an innovator. I read that he has expressed some doubts about the crypto art market. Maybe he
will be convinced seeing that this movement and the result we have will continue.
CHATTERLEY: You know, I think one of the other questions about Andy Warhol specifically is there's so much supply out there. He was a sort of classic
mass production artist. I mean, the shop was called "The Factory" that gives our viewers an illustration. What's the benefit to him of adding more
supply? What's the benefit to his legacy, and to the foundation of doing this, if it means more supply?
CERUTTI: He was incredibly creative, that's true. But look, he is one of the most sought after artists on the art market. Last week in New York, we
saw several artworks by Andy Warhol for great prices. The five NFTs we are going to sell are unique. They are authentic. They are new to the market.
They are featuring well-known images by Warhol, self-portraits, banana, and the Campbell Soup can. So we really expect these works be offered for a
very low price of $10,000.00 to work very well and to appeal to many collectors, traditional collectors and of course, crypto collectors.
CHATTERLEY: Yes, so you've got two completely separate sets of audience and potential collectors and that's a good thing if you're broadening out
the market.
CERUTTI: They are progressively overlapping. They are progressively overlapping.
CHATTERLEY: And that's what you're seeing.
CERUTTI: Absolutely. Well, you know, one of the under bidders in the Beeple sale two months ago, two weeks later, was one of the major buyers in
our modern art sale buying a work by Picasso. So you know, the two worlds are overlapping.
And you know, that's the future as I told you.
CHATTERLEY: You see, this is such an exciting part. You know, what I think we've established as far as you're concerned, and based on the sales last
week and that fact I think that the art market, certainly not in a bear market but Guillaume, there is a bear in the market. Talk to me about the
bear.
CERUTTI: Well, it's the most famous one. It's a bear by Leonardo da Vinci that we will present in our sale in London. After New York, the market is
moving. Next week, we have sales in Hong Kong, and later in June and July, in London, and we will present the eighth of July, a head of a bear by
Leonardo da Vinci. One of the eight drawings by the Masters, only in private hands.
So we really believe that will be another major event on the art market in July in London.
CHATTERLEY: Yes, I believe the estimate here 12 million to 18 million pounds, so you can do the conversion to dollars yourself for the audience.
And on a more personal note, we have to talk about --
CERUTTI: Yes, it is 11 million to 15 million pounds.
CHATTERLEY: Okay, thank you. And on a more personal note now, we have to talk about the Sakura. I want to ask you if I bid on it. Can I get a
discount on the hammer price? We have pictures of this?
CERUTTI: Well, I was sure you will ask the question. It's very rare. It's very rare and extraordinary diamond ring, whereby, you know, its
transparency, it's a vivid diamond ring. So I'm afraid that it will be much you know, disputed by many bidders and Julia, I like you very much, but I'm
afraid I will not be able to give you a discount this time.
CHATTERLEY: Shame. I'm thinking I have to save for about 5,000 years -- not just even a broach. Guillaume, thank you though for even considering
it.
CERUTTI: Thank you.
CHATTERLEY: And great to chat with you. Good luck with the Andy Warhol sale. Guillaume Cerutti there, the CEO of Christie's.
CERUTTI: Thank you so much.
CHATTERLEY: Thank you. Okay, and from sharing art online to see in-person museums, cafes, bars and restaurants reopened in France. We are live in
Paris to take a look.
(COMMERCIAL BREAK)
[09:51:43]
CHATTERLEY: Welcome back to FIRST MOVE with a little look at what's going on in terms of the price action across financial markets.
It is a volatile day on Wall Street. That's the message.
As you can see losses for the U.S. majors. We are sitting quite close to session lows, the biggest losses being felt actually in the S&P 500.
Bitcoin, meanwhile, in the crypto space paring some of its losses. We are down some 17 percent. It had been down more than 20 percent at its worst
levels around an hour ago. Reports say crypto exchanges like Coinbase are having trouble processing trades amidst today's extreme volatility.
Coinbase shares currently down some 10 percent today, too.
Now in the past couple of hours, the E.U. has announced it will ease travel restrictions for fully vaccinated visitors from outside the E.U. It comes
on the day France is reopening nonessential businesses. And Melissa Bell is in Paris with more.
Melissa, I have to say, I do love your apartment. But there's nothing better than Paris in the springtime. The E.U. is relaxing restrictions.
Paris is ready.
MELISSA BELL, CNN CORRESPONDENT: Julia, I cannot tell you how good it is to speak to you from outside my apartment. This is the Latin Quarter and
this is what it looks like today. For the first time since late October, people have been able to the terraces, have lunches served by restaurants
that can serve them outdoors, cinemas are open. Bars, restaurants, museums, in a sense, really Paris is back and it's just almost the fact of being
outdoors, and of course in the nick of time.
We've seen these two catastrophic closures for Europe for those reasons, the particularly tight restrictions that have been here, as a result has
been the recession that Europe now finds itself in.
It was high time that this long, long winter came to an end -- Julia.
CHATTERLEY: I was just trying to cool myself, those people have clearly been cooped up too long and even the dog was joining in now, which I think
was just absolutely fantastic.
BELL: There is a lot of excitement.
CHATTERLEY: Melissa, what protections are in place, though, for those perhaps that are looking to come to France, coming to Paris? What are they
going to feel in terms of differences, because obviously, we have to be careful of a pickup in virus particularly with variants out there, too?
BELL: Of course, that is the one big difference with Paris essentially reopening today is that it is missing one of its crucial ingredients, Julia
and that is the tourists. It is the most visited city in the world and it does feel pretty empty.
Once again, its monuments, its museums open, it is bars and it is restaurants. And now the crucial question is how those certificates are
going to work that will allow non-E.U. residents to come once again to visit Paris? So the idea is of the European Union is looking at a system of
reciprocity. That is countries that are -- Europeans who can prove they've been vaccinated to travel there will find some way of finding a certificate
that allows them to be vaccinated elsewhere once again to come here.
The timescale we're looking at, Julia, is around the ninth of June. So there's hope that Americans and citizens of other countries in the world
will once again be able to return to Paris fairly quickly -- Julia.
CHATTERLEY: Yes, we join you in that hope. Thank you to Melissa Bell there. Thank you for the dog. Thank you to the two excited Frenchmen. You
all contributed to the production.
Melissa, enjoy the sunshine. Thank you.
Okay, finally, as cruise liners go, they guy didn't have the best luck, but it did capture people's hearts and guess what? Those hearts will go on.
[09:55:06]
CHATTERLEY: China is pushing ahead with a replica of the Titanic which will form the center piece of a theme park in the Sichuan Province. It is
called the Unsinkable Titanic and don't worry, icebergs shouldn't be a problem. The ship will be permanently docked on a reservoir hundreds of
miles from the sea. No opening date has been set yet, but you can bet the first visitors will feel like Kings and Queens of the world.
Yes, that's my kind of Titanic, one that is land based.
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.
In the meantime, stay safe. "Connect the World" with Becky Anderson is next and I'll see you tomorrow.
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[10:00:00]
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