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First Move with Julia Chatterley
Global COVID Cases Surpassing 200 Million; President Biden Looks to Supercharge EV Adoption; Retail Investors Set their Sights on Robinhood. Aired 9-10a ET
Aired August 05, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need-to-know.
Delta danger. Global COVID cases surpassing 200 million.
Electric edict. President Biden looks to supercharge EV adoption.
And a mean dream. Retail investors set their sights on Robinhood.
It's Thursday. Let's make a move.
A warm welcome once again to FIRST MOVE and a busy day as always. Robinhood rallies, but new stock sales are in store. We're also counting down to
Friday's jobs report while the numbers raw and Biden's EV plans go full bore, and we'll be live in Washington for more.
Market action, meanwhile, hard to ignore. U.S. features, we never do ignore them, pushing higher once again and Europe is at fresh records, a strong
four percent rise in German factory orders helping drive sentiment, I think, too.
Today's rally means that the German DAX is actually up more than 14 percent year-to-date, the French CAC 40, meanwhile, up 22 percent. You can see that
outperformance there, outpacing, in fact all the U.S. majors, c'est magnifique n'est pas.
From stock market heights to inflation frights, meanwhile, Brazil's Central Bank giving global investors a reality check, raising interest rates by a
full percentage point, that's actually the biggest hike in nearly 20 years to cool rising prices and unlike Fed Chair Jay Powell, of course, the
Brazilian officials not so paciencia on prices -- sorry, my Portuguese is even worse than my French this morning -- but that does not hold me back.
How do you say selloff in Mandarin? Don't worry I'm not going to try.
Tencent, Netease, and other Chinese gaming stocks falling as state media removes the joystick once again. The Chinese financial daily suggested the
industry doesn't need tax incentives anymore. If you remember, Chinese media called online gaming spiritual opium earlier in the week before then
reversing that tone.
I think the overall takeaway here is, buyer beware.
The Asia session, meanwhile, once again hurt as you can see, a sea of red there by fears that spreading lockdowns will slow the recovery and that
sadly, is where we begin today's drivers.
The total number of COVID-19 cases worldwide has surpassed the 200 million mark. That according to John Hopkins University. China, also battling to
contain the delta variant has just ordered new quarantine rules for some travelers arriving in Beijing.
In the City of Zhengzhou, people under lockdown have been calling out for help from an apartment building. I should warn you these pictures are
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE (text translation): COVID test.
UNIDENTIFIED MALE (text translation): Help. Help.
UNIDENTIFIED FEMALE (text translation): Is anyone paying attention to us?
UNIDENTIFIED MALE (text translation): Help.
(END VIDEO CLIP)
David Culver joins us now. David, I know you've seen these pictures, too and they are distressing, but it shows you the lengths and the extent to
which Chinese authorities are willing to go to in order to try and suppress this spread.
We've been here before, and they are taking strong measures once again.
DAVID CULVER, CNN CORRESPONDENT: We have been here before, Julia, and I look at those images that you reference there on social media here and they
are troubling to see and they bring us back to where we were, perhaps a year or so ago when we saw what were described as extreme containment
measures, brutal buy some descriptions.
However, they have been effective, though we saw in Wuhan for example, it led to, and you know, after 76 days of lockdown, a crushing economy.
So, there is a byproduct of all of this, and while it may be containing the virus and the spread, it has also led to mental health issues, as well as
Take a step back, though, and let's look at the numbers because we're talking about hundreds of confirmed cases, this link to the delta variant,
and when you look at other countries and compare it with what they're dealing with, it may not even rank, it may seem laughable.
However, here in China, they have this zero tolerance for any cases and they have they've been mostly effective in going forward with it, and so
when you see such extreme measures and the lockdown scenarios in communities like that, that's out of Zhengzhou in Central China, that's not
representative of what is happening everywhere else.
I can say here in Beijing, for example, there are tens of thousands of people in similar lockdowns. They are sealed inside their communities,
drove past some of them yesterday. They are able to get outside to walk around within the restricted zone, take their pets out for a walk, for
example, and receive their food and basic necessities.
They'll likely be in that for several days, perhaps even a couple of weeks.
CULVER: Now, some of the new travel restrictions have also come into place, so as to protect Beijing. We've seen this before. Beijing is a
fortress. It is about protecting the capital.
Officials here have said even just this week that they will protect Beijing at any cost, and that is now coming in the form of keeping people out. And
those who do come in, if they've come from those medium or high risk areas, they will either go into home quarantine or centralized government
Again, these are things that we have not seen for several months. So, it is a shock for a lot of folks, Julia, but it is a reality that's playing out.
And the question that's often asked is, how long is this going to last? How long will this most recent outbreak take before they can contain it?
Because they are confident they can contain it. This is what one official had to say. Take a listen.
(BEGIN VIDEO CLIP)
HE QINGHUA, CHINA NATIONAL HEALTH COMMISSION (through translator): As long as all localities strictly implement prevention and control measures, this
round of the outbreak can be basically controlled within two to three incubation periods.
(END VIDEO CLIP)
CULVER: Two to three incubation periods. So, what does that translate to? That could be anywhere from 15 days, about a couple of weeks to up to six
weeks, and that puts us near the start of what is a major travel holiday here, that is the October Golden Week Holiday, and that is what a lot of
folks are obviously coming together and will be crowding in the train stations and airports and it is a concerning time.
And so perhaps, this will keep many of those from traveling and lessen the spread -- Julia.
CHATTERLEY: Yes, and that's why, as you said, and it's an appropriate word, I think, the measures that we're seeing now is so brutal in order to
contain it. Very different from what we see elsewhere in the world.
David Culver, thank you so much for that.
Robinhood finally means business, pulled up its shares bounding out of the Sherwood Forest, spiking some 50 percent yesterday after last week's
disappointing IPO launch. But the arrows are back in the quiver today as the firm moves to sell more stock.
Clare Sebastian joins me now, but above $70.00, and remember they priced at $38.00, Clare. There's some irony though, when a stock like this gets
halted three times in a day, of course, admittedly on the upside rather than on the downside given what we've seen in the past.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, there was a lot of chatter about that for sure, Julia, but this is what we're seeing over the
past few days after a very disappointing IPO, as you said, nowhere near the sort of coveted first day pop that they wanted, down eight percent on that
day. We've seen now two days of double digit gains, 24 percent gain on Tuesday, 50 percent gain on Wednesday.
This morning, though, as you said, the stock is down a little premarket, although off its lows of the session because we essentially got a new IPO
prospectus. The company is filing to sell 97.9 million shares.
Now, this is not a capital raise, they are not raising money for the company. They are essentially allowing venture capital, some of their early
investors to sell out. It is not going to be immediate, so it is going to be a gradual process. But that I think, sort of got to some investors
coming so soon after the first IPO, and we saw that little pullback this morning.
But that might also be partly because of the huge gain that we saw yesterday, and there was sort of a lot going on there. But also nothing at
all, because nothing really fundamentally changed with the company. But we saw the start of options trading, we saw Cathie Wood from ARK Invest sort
of loading up on shares over the course of this week. She is seen as something of a sort of trading guru by the retail traders, the Reddit
crowd, and there was a lot of chatter about this stock online, Julia. It was one of the most mentioned stocks on the Reddit group Wall Street Bets.
And it was the most traded stock on retail platform, certainly on Fidelity's retail platform, and it still is this morning, so that is part
of the big picture here.
CHATTERLEY: Yes, and ARK Invest, let's be clear, and Cathie Wood has been on this show. She is seen as a sort of bastion of getting involved in these
high growth stocks, so, we can be clear on that. But I did also see that it was the most mentioned stock on Wall Street Bets, which of course is a
favorite of the of the retail community.
And clearly, that is leading to a lot of discussion that Robinhood is now a so-called meme stock. So, what do we mean by meme, Clare? Just to remind
our viewers -- and is it or isn't it a meme stock?
SEBASTIAN: Yes, I think we have to define the terms. I feel like a meme stock is where you see sort of big moves in a stock that really aren't
justified by the fundamentals or sort of news around the company, combined, of course, with that chatter online -- Twitter, Reddit group, Wall Street
Bets is highly influential, and all of that, is where they -- you know, they publish a lot of memes, that's where all of that comes from.
So look, in terms of yesterday's moves, it very much did smack of a meme stock. There wasn't a lot of news out of the company, nothing really
fundamentally had changed, and yet at one point in the day, we saw an 80 percent gain in the stock, so extraordinary moves there, and of course with
that chatter online.
Today, perhaps less so. We are seeing, you know, news driving it, but a bit, of course, in some ways Robinhood did invite this with their efforts
to democratize the IPO to sort of stream their roadshow online and bring in retail investors. They have brought in that crowd and I think some of that
volatility is that effort coming home to roost.
SEBASTIAN: But of course, on the other hand, this is a very high growth company, and there are many people out there who feel that as they
diversify away from their sort of payment for order flow model to other things, including, for example, crypto, that there is more room to run in
this growth story.
CHATTERLEY: More room to run. Clare Sebastian, thank you so much for that.
In Washington, President Biden is pushing for 50 percent electric vehicle sales by 2030 under voluntary targets. He is also boosting emission
John Howard is live at the White House for us. John, the President wants electric vehicles to make up at least 40 percent, I believe, of U.S. auto
sales by 2030. Clearly, he seems to have a lot of the big car makers on board who have been dramatically bumping up investment in this space.
But what do we make of this? Because it is guidelines rather than rules. Does he have the American public on board?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, that's the challenge of keeping the American public on board. He is trying to use a variety of
tools to make that happen. It's not easy to change the composition of the American fleet, the auto sector is very large. But what the President's
trying to do here is use a combination of goading, exhortation, setting a goal for, as you indicated, 40 to 50 percent of the sales in 2030 to be
Incentives in the infrastructure plan that he is trying to move through Congress, there are billions of dollars for electric charging stations.
There are going to be incentives for changing American manufacturing to accommodate the rise of fuel cell and battery technology, and there is also
going to be some direct investment.
Last week, President Biden announced a Buy American initiative where he is going to try to use the Federal purchasing power to change the Federal
fleet over to electric vehicles as a way of jumpstarting this market, but you've got significant resistance. Just yesterday, Texas Senator John
Cornyn, member of the Republican leadership was attacking the administration, noting that electric vehicles are more expensive, and that
the President's mandates are going to result in higher prices for American consumers.
Obviously, he represents a big oil and gas state, fossil fuels are going to resist to some degree, this shift; although much of industry sees that's
the way the world is going and so, the United States is going to follow. Difficult challenge, but of course, the President's climate change goals
are also integral to this, as well as his goals for the American economy.
CHATTERLEY: Yes, it's funny when I first read this, my first point and concern was charging infrastructure. The relative level of vehicle costs,
for example, John, but to your point, and I think it's a really important one, actually, they are trying to tackle this at the same time in the
infrastructure bill. So, these things inextricably linked, and clearly tackling all. The question is, as we've said, will Americans get on board?
EVs, that is.
John Howard, great to have you with us, sir. Thank you, as always.
All right, let me bring you up to speed now with some of the other stories making headlines around the world. Iran's next President Ebrahim Raisi is
being inaugurated today in Tehran. The ultra-conservative judiciary chief is taking the helm after eight years of a moderate -- relatively moderate
It comes as Iran deals with multiple challenges, including nuclear talks and a struggling economy.
CNN's Fred Pleitgen is with us from Tehran with more. Fred, I was listening to some of the comments that he made in laying out both the domestic plans,
but also the international plans for foreign policy, too. And I've just said, they were brazen, and I'll say it, again, inextricably linked in
terms of trying to re-galvanize and restart and loosening up some of the restrictions on the economy.
Can he do it? And where does he go first?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, first of all, I think you're absolutely right, Julia. I think you're absolutely
right in that there are big domestic plans, especially in the realm of economy, but they are really inextricably linked to Iran's foreign policy,
as well. And I think both of those fears could change considerably.
I mean, one of the things that we saw during the years of the Hassan Rouhani administration is he obviously tried to mend ties with the West, he
tried to mend ties with the United States, to a certain extent tried to get sanctions relief. Of course, the Iran Nuclear Agreement was really the
culmination point of that.
And then all of that, of course, fell apart when President Trump came into office, when he left the nuclear agreement and then when he put in place
that maximum pressure campaign, which of course is hitting this country with massive sanctions and continues to exert a massive toll.
Now, one of the things that Ebrahim Raisi wants to do is he wants to go a completely different way. He wants to do what's called a resistance
economy, which means making the economy less dependent on outside forces. But at the same time, the Iranians are also saying that they want better
ties with regional powers. One of those, of course, Saudi Arabia, a big change for the Iranians to try and mend ties there.
And just this morning, Ebrahim Raisi was quoted as saying that he also wants to improve ties, for instance, with African countries. So Iran,
really looking to new markets, new places, also to try and get around some of those sanctions. But of course, they still want that sanctions relief,
and are still looking to complete those negotiations to try and get the U.S. back into the nuclear agreement -- Julia.
CHATTERLEY: Yes, a fine line to walk. Fred Pleitgen, thank you so much for explaining that to us. We shall see.
CHATTERLEY: Okay, let's move on. A Belarusian Olympian has refused to return to her own country is now taking refuge in Poland. Krystsina
Tsimanouskaya say she is happy to be in Warsaw after receiving a humanitarian visa. The sprinter rejected a flight to Belarus because she
was afraid she would be punished for criticizing sporting officials.
Okay, still to come here on FIRST MOVE, a game of red light-green light for British holidaymakers. We'll hear what the airline industry thinks of all
the new travel rules.
And makeup digital makeover: The CEO of Gen Z, favorite E.L.F. on how to sell cosmetics during a pandemic and beyond. That's all coming up. Stay
CHATTERLEY: Welcome back to FIRST MOVE. Southeast Asia's largest bank, DBS Group says second quarter profits are up 37 percent from a year ago,
Just to give you a sense on a quarterly perspective, that is down some 15 percent on the first quarter's record profits.
This, as DBS is rapidly pushing into new technologies including a blockchain based payment system and a digital exchange for fundraising
through asset tokenization, just for starters.
Joining us now DBS Group, CEO, Piyush Gupta. Piyush, always fantastic to have you on the show. Thank you so much for joining us. It feels like
another solid quarter.
PIYUSH GUPTA, CEO, DBS GROUP: Julia, happy to be here.
CHATTERLEY: Welcome. It feels like another solid quarter where you seem to be able to balance the challenges of low interest rates, which I know is
keenly felt by your bank and of course, the challenges of COVID with growth and performance in other parts of the business.
Just talk us through what you saw during the quarter.
GUPTA: Well, actually, you make a good point, Julia. The overall situation with the virus, the pandemic in Asia has not been great. And certainly in
the last few weeks, the spread into Southeast Asia has actually been quite alarming.
So, in the context, it is quite surprising that business momentum has been very, very solid, and frankly continue to look very good as we go into the
third quarter. Loan growth was very strong, and that was in multiple sectors, the property sector, the TMT sector -- technology sector, shipping
I think the Asia export engines have been strong and that has helped some of the activity, but the property markets have been very strong as well and
this, I think a lot to do with liquidity and low interest rates.
And so, outside of the balance sheet actually for us, even the non-interest income lines were extremely good. Wealth management activity with strong
GUPTA: Investment banking has been good. It's not a big business line for us, but the year-on-year growth has been quite dramatic as companies are
rushing to get to the debt capital markets, and even the ECM activity, the equity activity in Asia has been a little bit of a beneficiary of the
So, all in all, I can't complain. Business momentum has actually been surprisingly strong.
CHATTERLEY: Yes, I was going to ask you that because I see that, too. Why? Why have consumers in small and medium sized businesses been so resilient?
I see it even in the sort of lack of delinquencies that you've seen and some of the credit sphere as well with loans. Is it government support? Is
it that people perhaps had stronger individual and company balance sheets perhaps than we anticipated?
And to your point about the last two weeks -- and it is alarming -- what are you seeing in terms of behavior even in the last couple of weeks from
GUPTA: Well, I think the resiliency has been a surprise to everybody, including me. We buffered up a lot last year with the results and like many
of our global counterparts, we found ourselves sitting on too much provision. And actually, I've had -- I've been able to reverse some of
I think there are three reasons. Number one, what we talked about was correct. I think government measures and fiscal policies have been in
place, monetary support has been helpful. And in many parts of Asia, moratoriums have been in place, which have been extended out until the tail
end of this year, in fact, in some cases early next year.
Second, I think the inherent resiliency of both the consumer and the small and medium enterprises have been proven, even as some of our clients have
been coming off moratoriums. It's quite interesting that the delinquency rates have been very, very low.
But finally, I think, what's been a big factor in the portfolio quality has just been the sheer low level of interest rate. So, debt servicing capacity
is there just because interest rates are low and therefore, it doesn't take too much to be able to service debt.
The second part of your question, the last two weeks have been concerning. And it is quite interesting that most of the countries in Asia are
reverting to various levels of lockdown.
You know, Asia, in some ways has been hoisted by our own petard because in many of our countries, the social distancing, the masking, the track and
tracing, and the lockdown was so successful that we did not necessarily feel the urgency to go for large scale vaccination. Obviously, part of it
was driven by the fact that they weren't able to procure the vaccines.
Nevertheless, the actual vaccination rate in many of the countries is very, very low. And now that the delta variant is spreading, it is bringing to
sharp realization to people that really have to step up on the vaccination program. But I think, it's going to take a few months.
And so I think projections for consumer spending coming back and the reopening of some important sectors, tourism, travel, et cetera, I think is
going to be pushed back by this quarter or maybe even two.
CHATTERLEY: Do you think it pushes the sort of growth outperformance in favor of the West, rather than what we've got going on in the East and in
Southeast Asia, at least for the next perhaps six to nine months to your point?
GUPTA: Well, Julia, it's all relative because, you know, despite all of the slowdown, China will grow at eight percent, and India will grow at
eight to nine percent and many of -- the rest of Southeast Asia is still forecast to grow four and a half to five.
So, while it'll be slow from the original projections by a couple of percentage points, for India, and maybe you know, half a percentage point
for Southeast Asia, in absolute terms, it is still not bad. Also, remember, everybody is coming off a low base. So, all of these numbers are great in
One thing that is keeping Asia going is just that the demand from the U.S. and Europe has been very strong, and Asia, the export engines are really
chugging along. It is quite interesting that most countries have learned how to keep the factories running even in the face of the pandemic. And so
that's one driver of growth, which is very much in place,
CHATTERLEY: Yes, a core pillar of ongoing growth performance. I could talk to you about this for the rest of the show. But I want to talk about your
digital innovation and what you've got going on because you're a traditional bank in some sense, and not where digital innovation is
And you've been busy. There's a couple of things. You're operating a digital exchange, which I think is quite fascinating, a platform that
allows the issuance of digital tokens for things that are backed by financial assets.
So, the way I see it, it sort of unlocks the value of companies that aren't perhaps listed. It lets -- allows you access to it, so perhaps some of the
upside there, but you're also swapping fiat currency for digital tokens like Bitcoin, XRP, and Ether.
Talk to me about what activity and how much engagement you're seeing with this part of the business?
GUPTA: Well, as I just said, digital exchange actually has got three dimensions to it. One is the tokenization and listing. We've done a fixed
income issuance and we are on the verge of doing a property issuance, and eventually what you said is correct, we hope to be able to list the Series
B, Series C illiquid stock. It is a little bit more tricky, so that might take a few months coming.
The second part of the activity is the exchange activity. So, we converting fiat to the cryptos, but there's not a trading activity on the cryptos. And
finally, we have digital custody activity and the fact in some ways that's the unique selling proposition because it gives bank grade custody, as
opposed to having to customize your coins or your assets on the exchange itself, which obviously have been subject to some degree of challenge in
Now, one thing we've done, though, is we've not gone into the mass market with this offering. It's a member only exchange, and that's because we want
to be very careful about not getting ourselves burned, both with regulatory oversight, but frankly, with the cyber and cyber security issues around it,
also anti-money laundering, et cetera.
So at this stage, we have only about 400 customers on boarded. These are our wealthy customers, active traders. I'm actually quite pleased with how
progress has been in the second quarter. We did about a couple of hundred million bucks in place, assets under custody about 150 million bucks.
So, it's not in the billions yet. But it's step by step and heading in the right direction.
CHATTERLEY: That is fascinating. But you're -- you are effectively using your know-your-customer requirements for existing customers and mapping it
because you want to be incredibly safe and careful about who is engaging in this space.
And are they doing it for investment purposes? The sort of buying and holding?
GUPTA: The buying and holding and trading purposes. Julia, remember, our unique selling proposition, our differentiation if you will, is that this
is an exchange launched by a regulated banking entity. And you know, the custody elements of it are actually indeed regulated.
The exchange elements of it are not directly regulated, but by and large, at the entity level, it means supervising everything. We also, you know,
our focus through the middle of the crisis last year was how do we use the crisis to good effect and try to position ourselves for the future? So, we
were able to do a couple of M&A transactions.
But on the digital front, our focus was trying to see how we take some of the blockchain and AI technologies that we've been able to build for
ourselves and monetize them, take them to market. So, the digital exchange is one. We are also launching a carbon exchange, in partnership with
Standard Chartered, Temasek, and the Stock Exchange that we expect we'll do our first carbon credit trade before the end of the year.
We've launched one more blockchain activity along with JPMorgan, which is - - and Temasek, again, which is a stable coin blockchain based payment system to facilitate and intermediate or disintermediate, the T plus 2
settlement model that we have.
Again, we are building a network of banking partners and hope to get the first page on that done in the next couple of months.
So, a lot of exciting stuff happening a lot of that to do with blockchain.
CHATTERLEY: This is so exciting, and I'm being told I have run out of time. So I'm in this awkward situation where I've got 10 other questions I
want to ask you and I have to thank you and let you go.
Please come back in the next couple of months because this is fascinating, and this could be, I think, revolutionary for foreign exchange flows and
speeding up settlement for trade finance as well.
So, Piyush, we shall reconvene on this conversation. Fascinating to see what you're doing.
GUPTA: All right.
CHATTERLEY: And I know you're coming back as well.
GUPTA: I look forward to it.
CHATTERLEY: The Sovereign Wealth Fund is involved, too. Piyush, great to chat with you.
Piyush Gupta there, the CEO of DBS Group. Always a pleasure to chat, sir. Thank you
The market open is next. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are trading the day before the all-important U.S. jobs report. Of course, we do see a higher
open in the United States, higher by some four tenths of one percent for the Dow as you can see.
U.S. jobless claims in focus once again, remaining below the key 400,000 level continuing claims. So, those people that continue to get benefits
hitting their lowest levels since the lockdowns began, too. New numbers yesterday showing U.S. services sector activity rising to record highs, a
sign that the American recovery at least remains firmly on track.
A number of Federal Reserve officials saying yesterday that they are comfortable with trimming stimulus support as early as this year.
Adidas, the market underperforming, meanwhile, currently down some five percent in German trading. The sports apparel maker raised its full-year
guidance, but the ongoing consumer boycott in China continues to weigh on sales, and that clearly, a concern for investors.
Now from Sunday, the rules are changing for British holiday makers hoping to salvage a summer vacation. Seven more countries have been added to the
so-called green list, meaning Britain is visiting them from England, Scotland or Northern Ireland won't have to quarantine on return. The seven
includes Germany, Austria, and Norway.
Meanwhile, arrivals to England from France also won't have to quarantine if they are fully vaccinated and test negative. However, Mexico is now on the
red list. That means 10 days in a government hotel for those returning.
Airlines U.K., which represents several major carriers is warning the British travel recovery lags behind the E.U.'s. It says bookings in Germany
are now at 60 percent of pre-pandemic levels while in the U.K., it is just 16 percent.
Tim Alderslade is CEO of Airlines U.K. and he joins us now. Tim, great to have you on the show. I mean, that statistic actually says everything. What
do you make of the government's decision and the additions to the green list? Because clearly, I'm sure you were hoping for more nations to be
TIM ALDERSLADE, CEO, AIRLINES U.K.: I mean, it's always positive to get more countries on to the green list. The problem is that we're now into
August and the summer season is almost over. So, we've not had anything like the recovery that we were banking on. We were the first sector to go
into the crisis last March and airlines have taken on billions of pounds of debt and shed tens of thousands of jobs.
We are relying upon getting -- getting back into the full swing of things and having a proper reopening this summer, and we now find a situation
where we are going to have to now try to somehow get through the winter, which is when airlines traditionally lose money. The summer is when they
make their -- their -- their cash and revenue and their balance sheet to replenish. We have to get through to next March-April with very little
revenue coming in.
And I think that's the problem that we've got, the government has been far too slow to reopen, just 16 percent of 2019 levels as compared to other
countries across Europe that has reopened much quicker than we have here, despite the fact that we went into the summer with a vaccination dividend,
and I think the tragedy is that the government has squandered that dividend.
ALDERSLADE: So, I think the government has got some hard questions now as to what they do with aviation and international travel, because we are tens
of thousands of jobs already lost, and the furlough scheme being wound up at the end of September, I think they need to look very carefully about an
extension of that scheme for aviation, which does not have that reopening that we were relying on.
CHATTERLEY: They had the vaccine dividend, of course, but they also had rising cases. Tim, do you have some sympathy for the government that they
are still trying to balance the two things?
ALDERSLADE: Yes, absolutely. I mean, it is a global pandemic, and we always knew that this summer was not going to be a normal summer. It wasn't
going to be 2019. But I think if you look at the vaccination rate here in the U.K., and the fact that we've got off to such a quick start, we've now
got case numbers relatively under control and the rest of the -- the rest of Europe and the U.S., for example, have caught up with us in terms of
So, we were hoping, looking at those stats that we could reopen quicker, we could open some of the big volume markets across Europe. If you look at the
countries announced yesterday, Germany, Slovenia, et cetera, these are not traditionally the countries that people want to go to during mid-summer.
You know, if you look at the impacts of the last 12 hours or so, the big spike in bookings is to Spain, to Portugal, to the Spanish Islands, to
Greece, that's where people are really looking to go to, but we've still got restrictions to those countries. We've still got very expensive testing
Everyone coming into the country needs to take the PCR test at day two. So you know, that -- that is the kind of restrictions that I think is just
frustrating everybody, alongside the constant changes to the list, if you look what happened with France, and now France is on the amber plus list,
and people just don't know if they're coming or going, frankly.
CHATTERLEY: Yes, I have to say, as I was reading, and trying to make it easy for my viewers to understand what's going on, and the changes, I was
just sort of bewildered myself with it. It's tough to keep up. And it's tough if you're trying to book a holiday.
I guess, some people would say the message is you just have to perhaps travel less. But that doesn't help the industry and those that you
represent. What's the greater burden here though? The quarantine? The constant changes? Or -- and you highlighted there, the cost of testing,
because for some families actually trying to get everybody tested on the way in and perhaps on the way out, too, depending on where you're going is
prohibitive as well.
ALDERSLADE: Yes, and the government is now all of a sudden advising that travel from Spain, you have to take a PCR test pre-departure as well as on
arrival, which is just not something that other countries across Europe are doing and on average is around a hundred pounds. It adds to the cost of a
flight, which, you know, we don't want to go back to a situation where air travel was the concern of the wealthy. We somehow have to, for double
jabbed passengers and those coming in from green countries, can we move to lateral flow testing on a daily basis, or even no testing at all?
There are countries across Europe that do not require a test on arrival if you are fully vaccinated. And I think people are really frustrated, they
are desperate to get away, but they just don't know with this constant, you know, changes on a weekly basis, I think the government yesterday was
saying, look, we've now got three weeks until the next review. Grant Shapps, Saturday, we don't want people looking over their shoulder.
But I think it might be too late. People are either saying, we don't want to book a holiday this year, we will go in the winter, or they've booked a
staycation here in the U.K., and that doesn't help the aviation sector and it doesn't help with tens of thousands of jobs that rely upon aviation and
travel. Direct jobs for aviation is over 500,000 here in the U.K. We've already lost just in the airline sector, 30,000 jobs.
And with that furlough scheme coming to an end in September, we are looking without government support a significant number of redundancies, which
would be a tragedy for a sector that came into this pandemic as the third largest aviation network anywhere in the world. It's traditionally been
something we are very good at.
And the worry is that we get really deep, permanent scarring because of the inability to reopen and the reluctance of the U.K. Treasury to provide the
support that perhaps we needed to get through this pandemic.
CHATTERLEY: Yes, and I think -- I think, you highlighted the key point here, people can actually do without holidays, but the jobs need
protecting, so if they can't handle and make this simpler in terms of the arrangements, then they have to take a very close look at that furlough
scheme and very quickly to give people some assurances that the jobs will remain.
Tim, great to have you with us and I'm sorry, you guys are so challenged. Our thoughts are with you.
Tim Alderslade, the CEO of Airlines U.K. there.
ALDERSLADE: You're right.
CHATTERLEY: Okay, up next, the Gen Z beauty brands that bucked the trend during the pandemic to prove that makeup sales and mask mandates can be
mixed. I speak to the CEO of E.L.F. beauty, next.
CHATTERLEY: Welcome back to FIRST MOVE. Meet E.L.F. Beauty, a digitally native cosmetics company that is one of Gen Z's favorite brands. E.L.F.
stands for eyes, lips, and face and the company stands for affordable, cruelty-free, and eco-friendly products. Its makeup is sold online and its
stores across the United States and internationally at an average cost of $5 for its flagship brand.
The company's sales surged during the pandemic, partly due to some savvy marketing that embraced TikTok early.
Joining us now is Tarang Amin. He is the CEO of E.L.F. Beauty.
Tarang, fantastic to have you on the show. Give it to us in a nutshell or a compact, perhaps I should say, how do you continue to produce growth that
is outpacing dramatically actually the broader industry?
TARANG P. AMIN, CEO, E.L.F. BEAUTY: Well, you know, I'm really proud of the team. This is our 10th consecutive quarter of growth, we just announced
earnings yesterday with our sales up 50 percent the highest quarter we've ever had as a company. And what I really attribute it to is our fundamental
value equation. We make the best of beauty accessible to every eye, lip, and face. And I think in these times, that really resonates, as well as the
strategy we've been implementing for a few years now that gave us strength going into the pandemic, throughout the pandemic and even stronger now.
So, really proud of the team in what we've been able to accomplish in a very difficult environment.
CHATTERLEY: I mean, part of what's driving this as well is that you guys are marketing and PR digital gurus, quite frankly, whoever is running that
needs a raise. I was looking at the quarter before last, I think that the budget that you were spending was around 15 percent of net sales. You can
tell me for the most recent quarter, you are pumping money into the digital strategy and into marketing your products wherever they are around the
world, and surely this is crucial, too.
People are aware of what you're doing, and the price point works.
AMIN: No, absolutely. And you know, I'm so proud of our team on the level of consumer engagement we get. In a recent survey, we were the second most
favorite brand amongst Gen Z, up from the ninth position just a couple of years ago. And I think it really talks about our marketing and digital
We have very strong ROI behind them, and so we continue to invest more. We just took up our marketing and digital investments to 15 to 17 percent of
net sales and that's up quite significantly from just even a couple of years ago. And we're doing that because it is working, consumers are really
responding and it has continued to drive great sales.
CHATTERLEY: I mean, I think it was 12 percent last year because I was looking at that as well. I mean, you are, as we've both discussed ramping
CHATTERLEY: But you're also being sort of quite innovative as well. I mean, we talk about NFTs, non-fungible tokens on this show, and I know you
launched N.E.L.F.T., you've got the E in there with the F-T and the E-L, into crypto cosmetics, which you can talk about.
But you also surveyed your users or what you call fans, and I believe, around 70 percent of them are fans of video games, 65 percent like to watch
video gaming. So, you launched a Twitch Channel, too. I mean, again, these are sort of smart moves outside of the products themselves.
Can this kind of move sustain the growth that you're seeing, though? So it's sort of a positive, but is it a drawback at some point?
AMIN: Well, we've been disrupting the beauty industry for 17 years ever since we were created cosmetics online, you know, incredible values. People
thought we were crazy. And so we continue, it's in our DNA to continue to disrupt. Our campaigns on TikTok, our latest campaign, TikTok Gamers Got
Talent had over 17 billion views.
As you mentioned, we got into Twitch and live streaming, mainly because we always follow our consumers and where are they and what do they want to
see? And a number of them are active gamers. They watch video games on Twitch and YouTube. NFTs, we call them N.E.L.F.T.'s getting into the non-
fungible tokens by taking three of our beloved products, dipping them in digital gold and having them sell out in nine minutes.
So, we're always looking for different ways of engaging with our community, how they respond, they love our new products and we're having a lot of fun
CHATTERLEY: I know, Poreless Putty Primer was one of them. But clearly, you're not doing anything with that in digital form, but you could admire
it and I did see they sold out incredibly quickly.
I think, obviously towards the pandemic as well, and I made the point as we were sort of teasing the interview that people were wearing masks. So for
other brands, it meant, you know, you're not going to buy -- you're not going to buy as many makeup products. You're probably not going to buy
expensive products online in case you get it wrong as well, because these are things that you need to test in practice, which again, I think in some
way plays to your business model with the cheaper price point, too.
What proportion of your sales today are online versus in store, and where do you see that going?
AMIN: Yes, so Julia, online in the latest quarter was about -- our digital business was about 13 percent of our sales, partly because we have very
strong distribution around the world, particularly in the U.S., and you know, that group, it was only nine percent, eight percent really a couple
of years ago. So we continue to see strength digitally, it goes back to our roots.
And then I'd say you know, our portfolio continues to expand and grow. So not only is E.L.F. cosmetics, a very strong brand, but we've had real
success in skincare with E.L.F. skin. In our growing portfolio, we acquired W3ll People, the plant powered clean beauty brand in early 2020. We
launched Keys Soulcare with Alicia Keys, a groundbreaking lifestyle beauty brand, really in the beginning of this year.
So we continue to innovate, continue to expand the portfolio, and we find the unifying theme of all of our brands. It's absolutely the best of
beauty, but made accessible relative to its competitive set, and that goes all the way from kind of average of $5.00 for E.L.F. Beauty up to the
$20.00 to $30.00 range on Keys Soulcare, and all these brands are resonating, we're having great momentum across each.
CHATTERLEY: I mean, you're all over the place, the United States and the U.K., and in Canada or in China or in India. Where do you see the greatest
growth opportunity that perhaps hasn't really tapped into, sort of what you're providing here? And can you expand beyond that Gen Z reach? And how
do you do it?
Is that part of the plan? Are you happy with the clientele that you have?
AMIN: No, absolutely. And I think you know, we have immense whitespace everywhere, including our own market of the U.S. You know, I would say, one
of our biggest opportunities is any customer we're in. We end up being the most productive brand they'll carry, and yet our footprint is still
significantly smaller than some of the large legacy players.
Internationally. I'd say there's tremendous whitespace. We have a very good business in the U.K. We're now starting to expand across Western Europe.
Key Soulcare, we're expanding in eight countries with --
CHATTERLEY: Oh, what a shame. But I think you got the gist there. Clearly, I have an interest in makeup. Tarang Amin, the CEO of E.L.F. Group. Oh,
Tarang, are you there?
AMIN: I'm here.
CHATTERLEY: You're back. You can just finish what you were saying there quickly. We have about 35 seconds left.
AMIN: Yes, so what I was saying is that we have tremendous whitespace. I'm proud of the work the team has done and I just see a long road ahead of us
as we continue to make progress and continue to engage consumers, not only Gen Z, but well beyond that with our brand portfolio.
CHATTERLEY: Perfect, and don't forget the pay rise for your digital team as well. Tarang, great to have you with us. The CEO of E.L.F. Beauty -- no
comment. I can see that there. We will speak to you again soon, sir. Thank you, and congrats on the earnings.
All right, up next, vaccines usher in a Summer of Love, not just for daters, but for jewelers and wedding planners, too. We take a look at the
business of post vaxx romance, next.
CHATTERLEY: Thanks to vaccines, business is booming, and love is blossoming across the United States this summer and wedding planners,
jewelers, and dating apps certainly know it as CNN's Clare Sebastian reports.
SEBASTIAN (voice over): For Shane Williams, months of COVID restrictions had been leading to this moment, and it didn't disappoint.
SHANE WILLIAMS, PROPOSED TO FIANCEE: I originally had it planned for actually December of 2020 in Quebec.
SEBASTIAN (voice over): When the pandemic prevented them from traveling, the lawyer from New Jersey used that setback to save up. He hired a
proposal planning company and even added a few more diamonds to the ring
WILLIAMS: COVID that was such a rough year. It was just -- we were locked in the apartment the whole time and I really wanted to spend some time and
make it special. So, I decided to wait until we could come to New York
SEBASTIAN: Did he exceeded your expectation?
UNIDENTIFIED FEMALE: He did.
SEBASTIAN (voice over): For professional proposal planner, Tatiana Caicedo, it has been a busy summer and an emotional one.
TATIANA CAICEDO, PROFESSIONAL PROPOSAL PLANNER: Very often, clients are saying that his partner went through a lot this year and they want to do
something nice for them, so yes.
SEBASTIAN (on camera): Nice of you to be able to cry along.
SEBASTIAN (voice over): After months of fear and isolation, love, it seems his back. Jewelers report engagement ring sales are soaring, and Google
says search interest in dating hit a five year high in July.
SEBASTIAN (on camera): Here in New York, around two thirds of adults are now fully vaccinated, so despite concerns about new variants, sunset brings
daters flocking to Manhattan's waterfront.
SEBASTIAN (voice over): Many who we spoke to, couples who got together during the pandemic.
UNIDENTIFIED FEMALE: It feels like we're just starting to date because we're just now getting to get out and get to know each other in other
UNIDENTIFIED MALE: Yes, we still have not yet seen our first maybe together.
UNIDENTIFIED FEMALE: We met on Hinge in the middle of -- or beginning of May last year, so right in the middle of it all.
UNIDENTIFIED MALE: She swiped left, I swiped right. We've been locked out for so many -- for so many months now, now you can actually enjoy love.
SEBASTIAN (voice over): And so the dating apps that made this possible, the summer brings new marketing opportunities. Dating app BLK, which caters
to the black community --
UNIDENTIFIED MALE: Open up BLM. Yes, okay, yes. Put a picture looking tight ---
SEBASTIAN (voice over): Releasing this remake of a previous hit on record, Juvenile.
UNIDENTIFIED MALE: But before you find a date, yes, you've got to wait, yes. Got to go vaccinated, yes. Get it straight, yes.
JONATHAN KIRKLAND, HEAD OF MARKETING AND BRAND, BLK: I will say since the release of "Vax that thing up," we've definitely seen a spike in
registrations like 30 percent more registrations than like four week prior trends.
SEBASTIAN (voice over): And like many dating apps, BLK, now lets you filter for vaccination status with its vaxified badge.
KIRKLAND: To date, we've had over 180,000 BLK users add the badge to their profile. And we found that over half of our users they want to know if
their match is vaccinated or not.
SEBASTIAN (voice over): So while it is clear COVID changed the way people date, it also helped many realize what really matters is the people you
Clare Sebastian, CNN, New York.
CHATTERLEY: Okay, and finally on FIRST MOVE, I have a really rubbish story for you. A family from Ohio are breathing a sigh of release after a
disastrous cleaning mistake when they threw in -- accidently threw out an envelope containing $25,000.00 in cash. It was destined for landfill, but
they called the waste collection company just in time.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I couldn't believe it, it took 10 minutes and I actually, I've seen that. Man, it looks just like that. Pulled it up,
opened it up, and there was the package inside with the money in it.
They were so happy. They were tearing up.
(END VIDEO CLIP)
CHATTERLEY: The company says, it is rare to find something a customer has mistakenly thrown away.
And of course, we salute the honesty of the workers who found it. Big sigh of relief.
That's it for the show. Stay safe. I'll see you tomorrow.
"Connect the World" with Becky Anderson is next.