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First Move with Julia Chatterley
U.S. Employment Surges as the Hiring Recovery Continues; The Virgin Boss Determined to Win the Billionaire Space Race; One Hundred and Thirty Nations Agree a Global Deal on Tax, Germany's Finance Minister Gives His Take. Aired 9-10a ET
Aired July 02, 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.
Jobs jamboree. U.S. employment surges as the hiring recovery continues.
Branson versus Bezos. The Virgin boss determined to win the billionaire space race.
And tax teamwork. One hundred and thirty nations agree a global deal; Germany's Finance Minister gives his take.
It's Friday. Let's make a move.
Once again to first move this Friday where the fireworks ahead of the July Fourth holiday weekend have already begun. Let's call it a star-spangled
stopping spectacular. Wow. I managed it.
Eight hundred and fifty new jobs created in the United States in June, the first employment report in months to exceed expectations. Gains once again
in leisure and hospitality as Americans continue to flock to reopened bars and restaurants. Education also a hotspot as state and local governments
gear up for a fresh and new school year.
And as the "Help Wanted" sign stack up, so do wages. We saw 0.3 percent rise in average hourly earnings month over month, that came in as expected,
but of course plumper paychecks are great for workers, but less transitory than other inflation components. The inflation -- a very wary Federal
Reserve will be watching.
But at least for the time being, investors applauding these new signs of strong growth. Stocks around the world looking red, white, and green with
the S&P set to push further into record territory. Europe, as you can see also seeing gains, too. A tougher day though, and this is where the red
comes in for Asian investors with China and Hong Kong both falling almost two percent.
There's a natural concern out there now that Beijing will be less forthcoming, I think with stimulus support once the centennial celebrations
are complete. Beijing today also though, delivering a supplies blow to China's leading ride hailing app, DiDi Global, we've been talking about
this a lot this week.
Officials launching a cybersecurity investigation into the firm, which went public in the United States just a few days ago. DiDi won't be able to sign
up with new users in the meantime, shares are down 10 percent premarket, so we have a lot to discuss. As always, we're on the job, and we start with
jobs.
Clare Sebastian joins me now. Clare, a stronger than expected number. Just walk us through some more of the details, and good morning.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Good morning. Yes, this is a very good news, Julia, after a few months of missing expectations, as you
noted. Revisions also pushed the previous two months up slightly.
Good news for the leisure and hospitality sector that was obviously the most beaten down during the pandemic, about 40 percent of the jobs added
came in that sector, 343,000, over half of those were in food and drinking places. That sector though still 12.9 percent below the numbers that we saw
in February of 2020.
Education was also out there, some distortions there because of the usual seasonal patterns of hiring and layoffs being sort of messed up because of
the pandemic. There are some interesting sort of inconclusive news in this as well.
While the numbers of jobs ticked up, the actual unemployment rate also ticked up to 5.9 percent. The number of unemployed people in the economy
was 9.5 million compared to 9.3 million in May, and the number of long term unemployed are also up by 233,000 after coming down significantly in May.
So, it's hard to draw firm conclusions. But overall, very good news.
I want to point to wages, though, because this is really important. Wages were up average hourly earnings up 10 cents month on month, that isn't
quite the numbers that we've seen in April and May, which was a significant acceleration on the first quarter of the year.
But still, if you take the last three months together, this does show a significant increase in wages, and that is something that the Fed will
certainly will be watching.
CHATTERLEY: Yes. It's fascinating, isn't it, as you draw people back into the workforce, as we believe 26 states now have reduced those enhanced
benefits so far quicker, those are supposed to roll off in September, you bring more people in, you risk having a higher unemployment rate.
So to your point, I think that's a very important spot there too, in context of the jobs that were added -- adding. What about the future in
light of what I was just mentioning there? If unemployment benefits were perhaps keeping people out of the workforce, could we see further
acceleration as we push on through the summer and beyond?
SEBASTIAN: Yes, I think the next few months -- at the risk of sounding like a broken record -- the next few months will be crucial. Unemployment
benefits expire in all states in September, some of them have already canceled them because of worries that they are keeping people out of the
workforce.
[09:05:06]
SEBASTIAN: Also, of course, in the autumn, children will start going back, many of them to full time in-person school, which will relieve some of the
childcare issues that people have. And if you look at the data this month, Julia, you do see, interestingly, some of those pandemic effects waning. I
want to pull out some statistics for you.
Among those not in the labor force in June, the report says 1.6 million were prevented from looking for work due to the pandemic, that's down
though, from 2.5 million in May. And one really interesting statistic is about teleworking. In June, 14.4 percent of people who teleworked, that's
down from 16.6 percent in May, but also down from more than 26 percent that we saw last summer.
So, that shows that people are sort of not only going back to work, but also going back to work in-person and you see those effects waning, but I
think it's worth remembering that this isn't just about a recovery. This is about a reassessment. A lot of people are looking for different jobs and
those effects, I think, will continue for longer.
CHATTERLEY: Yes, great analysis. Clare, great to have you with us. Thank you. Clare Sebastian there.
All right now, to my favorite story of the day. The billionaires battling over blast off, Virgin Galactic's Richard Branson wants to beat Amazon's
Jeff Bezos into space. Branson says he will be aboard a Virgin Galactic flight set for July 11 nine days ahead of the Bezos launch.
Rachel Crane joins us now. Rachel, I mean, some part of me laugh because there have been people that aren't astronauts or trained in space. This is
just literally a battle of billionaires and some of my sympathies are with Richard Branson. He has been at this for a long time.
RACHEL CRANE, CNN BUSINESS INNOVATIONS AND SPACE CORRESPONDENT: That's right, Julia. I actually just spoke with Richard Branson moments ago about
this breaking news that he will be on this spaceflight in just a couple of days.
And, you know, he said that it was not -- that this changed him being on this spaceflight, which was not planned. Originally, it was just supposed
to be four mission specialists, and Branson was going to be on the next test flight.
But Bezos announced that he was flying to space on July 20th, which is the 52nd anniversary of the moon landing. So, many people speculating that
Branson was, you know, making this push to be on this spaceflight as a result of Bezos wanting to beat him into space. Branson though, telling me
that that's not what motivated his name being added to the flight manifest, in fact, saying that he would welcome Bezos to be at his historic flight.
Take a listen to what Branson had to say.
(BEGIN VIDEO CLIP)
RICHARD BRANSON, CEO, VIRGIN GALACTIC: I would love Jeff to come and see our flight off whenever it takes place. Now, I would love to go and watch
him go in his flight, and I think both of us will wish each other well. And it really doesn't matter whether one of us goes a few days before the
other.
(END VIDEO CLIP)
CRANE: Now, Julia, this will be the fourth crewed flight of Virgin Galactic's VSS Unity that Branson will be joining. There will be two
additional test flights after this one, before the company starts their commercial operations.
Branson telling me that those commercial operations will begin in the beginning of next year, but you know, there have been over 600 tickets sold
on Virgin Galactic's spacecraft. You know, they're also not cheap, $200,000.00 to $250,000.00 a pop.
Also, though interesting to note that Jeff Bezos and Blue Origin auctioned off a seat on that historic spaceflight that will be happening on July
20th, which I mentioned earlier, and that ticket to be in that capsule went for $28 million.
Now, that auction winner's name has not been released yet, but we're all eager to hear who is the person that has $28 million and who was passionate
enough about space to, you know, to plop it down to be in that capsule -- Julia.
CHATTERLEY: Yes, he could have got a cheaper seat perhaps on Virgin Galactic flight. He is furious now.
I mean, the top case there. What did you say? $250,000.00 -- six hundred, $150 million? Yes. And that's partly reason -- the reason why the share
price is spiking premarket as well.
I wonder if Jeff Bezos is going to take him up on that invitation to be on his flight or at least wave him off? Yes, so I think Jeff Bezos will be
doing a rain dance somewhere.
Rachel Crane, thank you.
CRANE: Yes, we'll have to see.
CHATTERLEY: We will see.
CRANE: Thank you, Julia.
CHATTERLEY: Thank you. Okay.
Let me bring you up to speed with some stories making headlines around the world -- getting over excited. Okay. American troops have left their main
airbase in Afghanistan, bringing the U.S. one step closer to fully withdrawing from the country after 20 years.
The sprawling compound has been handed over to the Afghan military as it continues to fight the Taliban. The militants are celebrating the U.S.
departure as a quote, "positive step."
CNN's Anna Coren is with us from Kabul. Anna, I think a lot of people here, emotional after 20 years for many reasons, some happy as I described there,
some very sad.
[09:10:02]
ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Mixed emotions absolutely, and no doubt about it. So, much blood and treasure has been spent in this
country over the last 20 years, $2 trillion, if you want to put a price tag on it.
When it comes to human life, more than 2,400 U.S. soldiers, 1,200 coalition forces, over 100,000 Afghan civilians have died during this conflict. And
then there's tens of thousands of Afghan soldiers who have died on the battlefield and are still dying on the battlefield.
The withdrawal of U.S. and coalition forces which happened from Bagram Airbase overnight and early this morning, it certainly brings an end to
America's longest war. But here in Afghanistan, people, you know, are feeling a sense of abandonment.
We spoke to Dr. Abdullah Abdullah, who is head of the peace talks between the Afghan government and the Taliban and he said that if it was up to
Afghans, the Americans would not be leaving, but this is the reality and they have to rise to the occasion that the only people who can save this
country are his fellow Afghans.
But we are watching the Taliban, you know, take their offensive across the country, making, you know, huge gains, particularly in the North. They are
sending out this propaganda video almost on a daily basis, claiming that they're taking over more districts with Afghan forces either retreating or
surrendering.
So, when you have these optics, you know, that while they haven't taken over any provincial capitals, there is a real sense of fear that the
Taliban, you know, could potentially topple the government and a U.S. Intelligence report last week suggested that could happen and Civil War,
perhaps is in the future as well.
Dr. Abdullah Abdullah said that he is certain -- certain that that will not happen, that the 300,000 Afghan forces who have been trained by the
Americans, that they are there to protect the city, that the U.S. is not abandoning Afghanistan, that it has pledged $3.3 billion to provide
security assistance over the coming year.
But whilst this is the end of a chapter for America, certainly for Afghanistan, you know, this war ravaged country, the conflict will just
continue.
CHATTERLEY: Yes, a pivotal moment. Anna Coren, thank you so much for joining us on that.
We're back after this. Stay with FIRST MOVE.
(COMMERCIAL BREAK)
[09:15:16]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. investors are gearing up for a Fourth of July weekend filled with parades, picnics, and hotdog eating
extravaganzas. Investors already stuffed to the gills perhaps from a full plate of important employment data.
Futures are higher on the news that the U.S. economy added a greater than expected 850,000 jobs last month. Oil in the meantime, relatively unchanged
in the session as we await a decision from OPEC+ members on whether to boost crude output. Their second day of discussions after the UAE
reportedly objected to reversing production cuts yesterday.
Meanwhile, 130 countries have agreed to overhaul the global tax system to try and stop companies avoiding taxes by shifting profits around the world.
U.S. Treasury Secretary, Janet Yellen, called it a historic day for economic diplomacy, quote, she said, "We have a chance now to build a
global and domestic tax system that lets American workers and businesses compete and win in the world economy."
The accord still needs to be ratified by individual countries, but Germany's Finance Minister has already described it as a quote, "colossal
progress." And he joins us now.
Olaf Scholz is the Finance Minister and Vice Chancellor of Germany and he actually joins us from Washington, D.C. where he has been for meeting with
the Treasury Secretary, among others.
Finance Minister, fantastic to have you on the show. Welcome to FIRST MOVE.
As you said, I think, everybody would agree this is a huge achievement. How confident are you that this can be agreed and implemented by 2023 without
being watered down?
OLAF SCHOLZ, FINANCE MINISTER AND VICE CHANCELLOR OF GERMANY: I'm absolutely confident. We worked so hard the last years to get this
solution. We worked in many fields where we had meetings of the G7 Finance Ministers in the O.E.C.D. and in the working groups of the G20.
And now, we will make all the progress and the agreements we have worked for so hard at G7. We already did in London, now with the framework of the
O.E.C.D. and 130 countries agreeing, and so it's absolutely sure, I think that we will make it also in G20. And afterwards, we'll do the necessary
text work, which is not too big anymore.
CHATTERLEY: So you think the G20 by 2023, or all nations by 2023? Because that is a lot of legislation to write.
SCHOLZ: I think that enough nations will participate up to them, and this will change the way how we tax corporates in the world. It is ending the
race to the bottom we've seen in the past. And it's also a very important message for our democracies, because it is us now that can again weigh,
what is the right way of taxing corporates? What is the good modeled way to do it? We have not to look at others and what others do who are working
very hard for profiting from tax evasion. This will end.
CHATTERLEY: Yes. Teamwork and a collection of nations doing this together is the answer.
Sir, can I ask you as well about discussions regarding Nord Stream 2, the pipeline of gas from Russia to Germany. Obviously, a contentious subject, I
would call it between European nations, yourselves in particular and the United States. How close are you to reaching some kind of an agreement and
the ability to move ahead on this? I know it is part of the discussions in the United States, currently.
SCHOLZ: We are working very hard to make an agreement feasible, which gives all the necessary certainty for the Ukraine that they will have a
good future -- a good future. And for doing so, we've worked in the past making it feasible that they have a new agreement on that transition in the
Ukraine. And we will work that this will be the case in the next years and decades to come so that the Ukraine will continuously be part of the
business of supporting Europe with gas.
CHATTERLEY: I mean, America is really blunt about this. They say that Russian gas has strings attached and that it compromises European security.
Is part of the answer here diversification of sources because that is something that that you yourselves can control.
SCHOLZ: We all know that we have a lot of transport to Germany and to Europe with gas. It's not just coming from Russia. It's not coming just
from Russia and via different transport lines. It is also coming from Scandinavia, from the Netherlands and from other places and we are not just
relying on gas.
So, it is feasible to have a very pragmatic solution which makes it possible that that a new support line will come, which is linked with the
Nord Stream 2, but also other ways of reaching Germany and Europe will be organized and will be continuously the case in the future.
[09:20:12]
CHATTERLEY: Pragmatism is a great word as well for describing how nations like yourselves have responded to the COVID crisis be it the economy, be it
inflation concerns. I know you're also there as well to meet with Jay Powell, too.
Germany has been lauded, I think -- and you yourself for your response to COVID, the 130 billion spending plan, I think. Is it too early to be
discussing perhaps pulling back support? More prudency?
SCHOLZ: Just looking at Germany, we spend -- we will have spent in the end of the next year more than 400 billion euros extra debt for financing or
activities against COVID-19, and this will have had the economy, we will see that there is a big success in the economic development and that will
be big -- a better growth as anyone expected.
And this is even so with the European Union, where I -- and we worked very hard to make it happen. That common answer of the union is for the first
time feasible to support those countries who have not all the means, for instance, Germany has.
So, I think, we are now at a stage where we have to continue with our effective support for the economy, because it would be a mistake just to
stop it now. But on the longer term, yes, there will be a more normal situation.
CHATTERLEY: But now is not the time to be discussing withdrawing, reducing, or re-establishing the debt break.
SCHOLZ: Now, we are -- we have our constitutional framework and this is the debt break as you say it, but we are flexible enough to do what we do,
and this is what we did last year, this year, and the next year, and it will help us and we have planned a very high investment part of our budgets
for the next years. So, anyone can rely that we will, within our framework, be able to act.
CHATTERLEY: It's a productive spending. I think that's the -- that's the message.
SCHOLZ: It is productive spending, yes.
CHATTERLEY: Let's talk about inflation, too, because I think many nations around the world are concerned. You've said look, you think this is a
temporary thing. It's transitory, but what's your message to people that are seeing rising food prices, rising food costs, the businesses that are
seeing their import prices rising and they are afraid that this isn't temporary? What's your message?
SCHOLZ: I really understand all those people being afraid, and this is why we worked very hard to understand the situation. I discussed not just with
the experts in my country or the European Union, but globally with many other Finance Ministers and with the Central Bankers, and all the
scientists, and there is a broad consensus that the development of inflation we have today is temporary.
We have to look at it, this is our task. But we can be as sure as we can at this time that this is obviously something that is just following the
crisis having some special reasons we can analyze very concretely. But all of this together gives us the idea and the understanding that this is
temporary, and that we will come to a usual situation afterwards.
CHATTERLEY: I'll use your second title as well, which is Vice Chancellor and I'll use it for a purpose. I think part of your leadership response on
the economy in light of what the nation has been through on COVID sees you in the polls right now in a poll position, in a leadership position to be
the next Chancellor of the nation.
Can I ask you, what you think, what you believe would make you a great Chancellor? Why you think you will be the right person for the role?
SCHOLZ: I think that my country has two big tasks for the future that have to be tackled by the next government. One is to work on respect, on the
dignity of work, on cohesion, because I see that all the Western societies have the same task to tackle to bring the society together again.
And the second is how we can invest into our future and how we can make it that we will have a CO2 neutral economy by 2045 as we plan it, without
using this amount of coal, gas, and oil we do today, but being still successful as a very successful industrial nation with new techniques we
are using and with investing into the infrastructure and the production of energy with renewables in our country.
And this is a big task which we are planning to do, which anyone understands there is a future for the middle class people, for all the
people working in our societies, which is as good as they want to have it today and are having it in many cases and they must be not afraid of all
the changes to come. Because we have a plan. These are the two main questions.
[09:25:18]
SCHOLZ: If I might add one more, which is important for us, we want to work very hard to make Europe and the European Union more sovereign in its
action and to have a better integration within the union as we see now fighting against the COVID-19 crisis and its economic outcomes. It was
very, very good to see that for the first time, there is a strong fiscal answer by the union and this should be a step and a message for the future.
CHATTERLEY: Would your plans also involve the continued joint borrowing in the E.U., in light of what you were saying there about unity. Are you
comfortable with joint issuance of debt to continue beyond this crisis?
SCHOLZ: We have decided to do something like this, yet to fight against this crisis. And now, we have to do the next steps, which are important for
us, and the next step is that we are taking the decisions on how we pay back the debt that we took here. And this is about own resources for the
union, as the union already decided, but this work now has to be done and this is what is our task that we are working on now.
CHATTERLEY: Yes, the future remains an open question. I think I can read between the lines on that one.
You know, the challenge here for you actually, on the politics side, is that your party itself, the Social Democrats currently in third place.
Would you be in favor of a grand coalition with the Christian Democrats, if that's what was required?
SCHOLZ: As you know, I want to be the next Chancellor, and this is why I work so hard at the polls for my party will become better, as the polls for
myself are very good. So, there is a good chance for having it, and I'm really confident that I will have the request from the people that I should
form a new coalition government as a Chancellor.
CHATTERLEY: Yes, and that you will comply with, sir, I see.
Finally, and this is a critically important thing that I know Germany has also addressed individually as well, but it's the response to vaccines in
order to encourage and ensure the entire world recovers from the COVID crisis.
The I.M.F, the United Nations, the World Bank, they've all said that as much as the G7 nations have pledged in terms of financials and vaccine
support, more is required. Sir, are you in favor of providing more money in order to ensure that some of the poorer nations get vaccines and they get
them quickly?
SCHOLZ: We have to use more money. And as you know, Germany is the second biggest donator for the international programs, giving billions for
financing what is necessary now, and we are willing to do more if we can do it together with others.
And also, we are working very hard that there is a lot of -- that a lot of vaccines are produced and could be sent to all the countries in the global
south, for instance, we have to give them the chance to vaccinate their people. And this is something which is a task we have as humans -- as
humans -- and we have a responsibility not just for our nations, but for the rest of the world.
And it's also important because if we are not doing this, we will have the problem that possibly mutations will come back with this pandemic and then
we will have to start again fighting against the pandemic and so, it is wise and it is something which is important from a moral aspect that we
support all the people in the world that they get vaccinated.
CHATTERLEY: Do all the G7 leaders share your sentiments, Finance Minister?
SCHOLZ: We have discussed this question intensely and anyone is -- all are saying that they want to support this idea. Now, we are looking for the
money and we are looking for the exports.
CHATTERLEY: Chasing -- chasing for the money.
SCHOLZ: Yes, we are asking all that they are doing a bit more for giving the necessary support.
CHATTERLEY: Please keep pushing, sir. Fantastic to have you on the show. Thank you so much for your time.
Olaf Scholz there, German Finance Minister and Vice Chancellor. Great to have you on the show. Thank you.
SCHOLZ: Thank you.
CHATTERLEY: The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:32:45]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Friday, the last day of trade before the long Independence Day weekend
and the rocket's red glare of strong jobs data is pushing Wall Street to fresh records, just getting a peek at them there. Yes, the U.S. reporting a
further 850,000 jobs were added to the economy last month. That's the best of monthly employment gains since last August for context.
Strong wage growth, too, which means no declaration of independence from our concerns about Federal Reserve tightening. The I.M.F. is raising its
forecast for U.S. growth this year now calling for GDP gains of some seven percent if Congress can pass new infrastructure spending and billions in
further social spending. Lots to discuss.
Joining us now is Kristina Hooper, the Chief Global Market Strategist at Invesco. Kristina -- can't get my words out -- thank you so much for
joining us on the show. What do you make of the jobs report, first and foremost?
KRISTINA HOOPER, CHIEF GLOBAL MARKET STRATEGIST, INVESCO: Julia, thanks so much for having me.
A great jobs report, beat expectations by a lot. But keep in mind that we had weak jobs reports in April and May. Now, a lot of that was because
employers had difficulty sourcing employees. We kept hearing that anecdotally over and over again.
So, this is really exciting because it suggests that we knew employers were looking for employees; now, more employees are entering the workforce. So,
that is likely to mean a continuation of the trend towards normalization, that we are going to see less obstacles to employees getting back to work.
And that actually should mean lower inflationary pressures, because a lot of why we've seen such significant wage growth is because employers have
had to offer all these incentives and have had to increase pay to get employees back to work because we've had enhanced unemployment benefits.
Those are rolling off.
And we've had childcare issues. We've had fear of COVID-19. So, there have been a lot of obstacles, but they are slowly working out of the system. And
so this is a real positive.
CHATTERLEY: Yes, it's funny, isn't it? There's something counterintuitive about this. I like the idea of people being paid more for the work that
they are doing as long as it is sustained by the businesses involved.
But your point about, I think, the inflationary pressures is key here, too. You sound very optimistic about the U.S. recovery.
[09:35:06]
HOOPER: Oh, I am. This should be called the Great Boomerang. What we saw was this incredible downturn last year, worse than the global financial
crisis. And now, we are seeing a very strong rebound.
And really the difference, of course, we had vaccines. That was a huge catalyst. This was a unique calamity. And we had, of course, a solution
that came very fast. I would say it's nothing short of a medical miracle.
The other key component was enough fiscal stimulus. We didn't get that the last time with the global financial crisis.
CHATTERLEY: Yes, they balanced it appropriately here. And while inflation and prices will go up, they're not going to be problematic to the point
where the Federal Reserve has to make a dramatic move to catch up.
HOOPER: Well, I don't think we should be worried about GDP growth, because the Fed is not looking at GDP growth. All we have to be worried about is
employment and inflation, because those are the two areas they are focused on.
And so GDP growth can be strong, but if they view inflation to be transitory, then that's okay. And if they anticipate it -- you know, if
they think that we are not anywhere near where we should be in terms of jobs, then we have a ways to go in terms of them being very accommodative.
So, this is an attractive picture. That doesn't mean the Fed isn't going to start to normalize this year. I think they will announce tapering, probably
at Jackson Hole and started in the fall, but this is going to be ever so gently and slowly that we normalize monetary policy.
CHATTERLEY: We often use this term in the financial markets, which is Goldilocks, which means everything is going swimmingly. I guess, for an
investor at this moment, then it's make hay while the sun shines.
HOOPER: Well, I think it's all about what areas of the market focus on. I think this is definitely a risk on market, I think stocks will outperform,
and I think in the shorter term, we're likely to see cyclicals and smaller caps perform better.
Certainly in the U.S., I think there are longer legs probably in Europe and other parts of the world. At some point in the U.S., we are likely to see
that rotation to growth and larger cap, as in as the market starts to discount a slowing of this strong recovery, which is inevitable because
this is a real burst of growth. That's unlikely to be sustainable.
CHATTERLEY: Yes. And one of the interesting things as well, that you point out is that you favor Europe and you favor emerging markets, too, which I
feel is good at the moment as we see some form of catch up relative to nations like the United States that managed to get the vaccines out there
quicker, perhaps.
But those guys perhaps, if we see an increase in variants, if we see inflationary pressures in particular, then emerging markets become an area
to be very cautious about. So, how do you find that balance? You have to be very watchful.
HOOPER: Well, I think you want to be very watchful. And of course, you have to look at more metrics, because it's not just strictly about the
economy. It is, as you rightly pointed out about the virus. It is about vaccine distribution, and it is about the creation of variants.
So, it certainly is a situation where we want to be discerning, especially when it comes to emerging markets, where they have been left behind in
terms of vaccine distribution.
CHATTERLEY: Yes. Kristina Hooper, fantastic to have you and your optimism on this show this morning. The Chief Global Market Strategist at Invesco.
Have a great long weekend, and we'll see you soon.
HOOPER: Thank you, Julia.
CHATTERLEY: Thank you. Shares in the Chinese ride hailing giant, DiDi are sharply lower.
Earlier, Beijing said the company is under investigation by the National Cyber Security Agency, under their review is complete -- until the review
is complete, DiDi is barred from registering new users.
Paul La Monica joins me now. I mean, wow, actually was my response when I saw this release, not even 24 hours after the company IPOs, and they've got
regulatory issues -- big ones.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it is a stunning turn of events, Julia, for the ride sharing giant, the rival to Uber in China. I
think that the stock plunging so far this morning is a reflection that investors in the U.S. are now remembering that oh, yes, DiDi is a Chinese
company that is operating in an environment where Beijing really seems to be increasingly willing to try and show all of these big tech entrepreneurs
in China who is boss so to speak.
We've seen it with Alibaba and Jack Ma, and Ant Financial. We've seen it with TikTok owner, ByteDance. We've seen it with Tencent. So, I don't think
this is in many respects, a huge surprise. But the timing is clearly a shock since we had all this fanfare about the big IPO just a couple of days
ago here in the United States, and now all of a sudden, the stock is plunging after, you know, pretty sharp debut.
CHATTERLEY: Yes, it just shows you though, I mean, if I had to have picked from a handful of different regulators that may have stepped in here and
said, hey, we've got a problem with this -- whether it's anti-competitive behavior or monopolistic behavior, cybersecurity risk, though, perhaps I
should have been aware of it, I most definitely wouldn't have had in my top three.
But yes, we're going to see.
[09:40:18]
LA MONICA: Yes.
CHATTERLEY: Because they're going to carry out this review. And you're agreeing with me, Paul, I like it when you do that.
We'll move on to Robinhood and see if you agree with me on this one. Because they've also applied to IBM for the first time ever, we have a
sense of the numbers.
LA MONICA: Yes, Robinhood is growing very dramatically. They have, you know, lots of users, they are managing a ton of money. But even though they
were profitable, they eked out a little bit of net income last year. I think there are concerns about whether or not legal costs and other issues
related to, you know, options eat into profits this year, and I think the biggest red flags that jumped out at me, Julia, in reading the S-1,
Robinhood is clearly cognizant of the risks that could be coming from negative headlines associated with all of the bad stories that we've seen
about the casino-like atmosphere that Robinhood, you know, their opponents would argue they help engender in the market with younger traders, not
necessarily knowing exactly what they're doing.
We had that awful story about the 20 year old who saw that huge negative balance and committed suicide, Robinhood admitted in the S-1 that they have
settled with his family. That is not something that I think is going to go away anytime soon. There will be continued criticism of Robinhood by larger
financial institutions as well as regulators.
So, I think that is going to be a risk even though the company is supposedly looking at a $40 billion valuation once they go public.
CHATTERLEY: Yes, I mean, this is the context here. It's the size of the fines. I mean, $70 million was the settlement with FINRA that they made
just before this IPO was announced. But it obviously doesn't refer to some of the more frothy behavior, the meme stocks and the challenges of the
lawsuits that they've got to play with there.
I guess, one of the other things that leapt out at me, Dogecoin was 34 percent of cryptocurrency revenues in the first quarter. So, that tells you
something about what's going on in the crypto space, too.
We've got plenty to discuss on this. But we're out of time, Paul, so we shall reconvene on this. Also, please have a lovely weekend. Paul La
Monica, thank you.
LA MONICA: Thank you. You, too.
CHATTERLEY: All right. Coming up on FIRST MOVE, a terrifying scenario of a major cyber war. We will take you to Taiwan where the threat from China is
intensifying. Stay with us.
(COMMERCIAL BREAK)
[09:45:36]
CHATTERLEY: Welcome back to FIRST MOVE. Rising tensions between Taiwan and China, Taiwan vowing to safeguard its sovereignty after Chinese President
Xi Jinping claimed that reunification with the Mainland is quote, "inevitable."
It comes as Taipei accuses Beijing of carrying out large scale cyberattacks as Will Ripley reports.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice over): Prepare for war, the menacing message of Mainland Chinese propaganda aimed at the
islands of Taiwan.
Military intimidation in real time, 28 Chinese warplanes entered Taiwan's Air Defense Identification Zone. Taiwan calls it the largest air incursion
ever recorded.
In this exclusive interview, Taiwan's Foreign Minister, Joseph Wu tells CNN, China is engaging in psychological warfare.
JOSEPH WU, TAIWAN'S FOREIGN MINISTER: They want to shape Taiwanese people's cognition that Taiwan is very dangerous and Taiwan cannot do
without China.
RIPLEY (voice over): More than 23 million people caught in the crossfire, a battle between Beijing and Taipei, a fight for their hearts and minds.
I'm flying to the frontlines across the Taiwan Strait to the small island of Kinmen more than 200 miles from the Taiwanese Capitol, just six miles
from Mainland China. Kinmen is the only place in Taiwan that saw actual combat during China's Civil War ending in 1949.
Many buildings bear the scars, the fighting, ferocious Nationalist Forces fended off communist troops, effectively shielding Taiwan's main island,
warding off a Chinese invasion.
ANDY YANG, MAGISTRATE OF KINMEN COUNTY (through translator): Kinmen people often say only those who experienced war can understand its horror. We have
the right to say loudly we want peace.
Longtime tour guide, Robin Young takes me underground to one of the islands massive military bunkers, once top secret, now abandoned.
He also shows me how China's relentless artillery barrage left the island with mountains of old shells.
RIPLEY (on camera): When the battle ended, the shells kept flying. Local historians say half a million of these landed on Kinmen between 1958 and
1978. But this was not artillery, these shells were full of communist propaganda.
RIPLEY (voice over): The beginning of what experts call a decade's long disinformation war, a war supercharged by social media.
RIPLEY (on camera): How dangerous is disinformation.
PUMA SHEN, ASSISTANT PROFESSOR OF CRIMINOLOGY, NATIONAL TAIPEI UNIVERSITY: The danger here is that because that has been the main goal of all this
disinformation campaigns is to create chaos and create distrust.
RIPLEY: Is trying to doing this exact same thing in the United States?
SHEN: Yes, definitely. And also in Australia, Canada, also Europe.
RIPLEY (voice over): Beijing denies this information warfare. China's Taiwan Affairs Office has previously called Taipei's accusations,
imaginary. Experts say the threat goes well beyond disinformation.
The Taiwanese government says it is hit by 20 million cyberattacks every month. Targets include defense computer systems, finance, communications,
and even critical infrastructure.
ALLEN OWN, CO-FOUNDER, DEVCORE: In information security, we believe World War III will happen over the internet.
RIPLEY (on camera): Basically, every aspect of our life from which we rely on computers could immediately be turned off.
OWN: Yes.
RIPLEY (voice over): Taiwan's major gas company, CPC, was hit by a major malware attack. A ransomware attack on the Colonial Pipeline, which U.S.
Intel believes came from Russia paralyzed the U.S. East Coast.
TSAI SUNG-TING, FOUNDER, TEAM T5: Just imagine what just happened in the United States, you could do nothing.
RIPLEY (on camera): Cyber is a bigger threat than nuclear weapons.
SUNG-TING: Yes, from my point of view, because it is happening every day.
RIPLEY (voice over): Taiwan's President Tsai Ing-wen named cyberattacks a matter of national security. Back on Kinmen Island, this 30-foot
loudspeakers spent decades, blasting anti-communist propaganda to the Mainland, a supersized reminder of how much things have changed.
Will Ripley, CNN, Kinmen, Taiwan.
(END VIDEOTAPE)
CHATTERLEY: We've requested a response from China's Taiwan Affairs Office and Ministry of Foreign Affairs, but have not yet received a reply.
Okay, coming up on FIRST MOVE, we take you to Thailand where the nation's most popular island is finally reopening to international travelers. That's
next.
(COMMERCIAL BREAK)
[09:50:23]
CHATTERLEY: Welcome back into one of the most popular travel destinations in Asia, Phuket, and it's now reopening.
Thailand welcoming its first vaccinated international tourists in more than 15 months, and the best part is, people don't need to quarantine. Paula
Hancocks reports.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice over): A big gamble for Thailand's biggest island, Phuket.
The Prime Minister himself rolled out the red carpet for vaccinated international tourists that leads straight to the picturesque sandy beaches
without any quarantine restrictions.
In a surreal contrast to the year that's been and to the rest of Thailand that's mostly shut down due to rising cases and three days of record
deaths, nearly 400 tourists from the Middle East and Singapore arrived under an experiment called the Phuket Sandbox, ready to hit the beach armed
with sunscreen and COVID antibodies.
QUESTION: What's the first thing you want to do?
UNIDENTIFIED MALE: Eat some nice Thai food.
QUESTION: How do you feel now?
UNIDENTIFIED MALE: Very happy.
HANCOCKS (voice over): There's a lot riding on their return and the island has been preparing. More than 80 percent of its population have been
vaccinated with at least one dose, about 65 percent are fully vaccinated.
ANTHONY LARK, PRESIDENT, PHUKET HOTELS ASSOCIATION: I am quietly confident that the industry and the government has done all it can to make this
sandbox scheme both safe and effective.
HANCOCKS (voice over): An assurance echoed by Thailand's Tourism Minister.
PHIPHAT RATCHAKITPRAKARN, THAILAND'S MINISTER OF TOURISM AND SPORTS: Looking at the nationwide coronavirus infection rate, we would say we are
not ready. But if you focus only on Phuket, we've laid out groundwork for more than three months, we are a hundred percent ready.
HANCOCKS (voice over): The government estimates at least 100,000 tourists will arrive over the next three months, bringing in nearly $300 million in
revenues desperately needed on an island that relies on tourism. Still, some are not convinced that this is the right time.
DR. WAYO ASSAWARUNGRUANG, MEDICAL DOCTOR AND OPPOSITION MEMBER OF PARLIAMENT, THAILAND: We are still and very concerned among the people of
Thailand that that the delta strain will spread in Thailand.
HANCOCKS (voice over): But the sun seekers aren't complaining, neither are the local business owners like Susanne who describes the past year and a
half.
SUSANNE ULTMANN, EXECUTIVE MANAGER, BAAN RIM PA: Horrid. We didn't expect the last wave to hit us the way it's hit us.
HANCOCKS (voice over): Tourism accounts for 20 percent of Thailand's GDP; for Phuket, it is 95 percent of its economy, which is why the Thai Minister
of Tourism says it is a calculated risk worth taking.
RATCHAKITPRAKARN (through translator): In 2019, revenue from both domestic and international tourism stood at about $95 billion, that shrank to near
$20 billion in 2020, a huge drop.
[09:55:10]
HANCOCKS (voice over): So, while it may seem like a parallel universe, for now, Thailand is pinning its hopes on Phuket while the world watches.
Paula Hancocks, CNN, South Wales.
(END VIDEOTAPE)
CHATTERLEY: And finally on FIRST MOVE this Friday, what better way to end the week than with dancing dogs.
[VIDEO CLIP PLAYS]
CHATTERLEY: Okay, so if you were expecting a bit of my little pooch, Romeo, I am sorry to disappoint you, but these are seven Boston Dynamics
robot dogs who teamed up with the Korean boy band BTS for a dance-off.
And as you can see, boys are thinking their robo-dogs are pretty cool and not in the slightest bit creepy or a little bit terrifying.
Now in case you're wondering, Hyundai now owns Boston Dynamics, and it is all part of their promotion for their electric cars.
Romeo, where fore art thou?
That's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
@jchatterleyCNN. I've been dying to say that since I bought my dog.
Stay safe. "Connect the World" with Lynda Kinkade is next.
Have a great weekend and Romeo, take it away.
(COMMERCIAL BREAK)
[10:00:00]
END
