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First Move with Julia Chatterley
Fears over Chinese Property Company, Evergrande Default Hit Global Market; The U.K. Government Holds Crisis Talks as Europe is Hit by Rising Fuel Costs; France Warns the Dispute over Submarine could Sink E.U.- Australia Talks. Aired 9-10a ET
Aired September 20, 2021 - 09:00 ET
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ALISON KOSIK, CNN BUSINESS ANCHOR: Live from New York, I'm Alison Kosik, in for Julia Chatterley. This is FIRST MOVE and here is your need to know.
Evergrande impact. Fears over Chinese property default hit global market.
Power off. The U.K. government holds crisis talks as Europe is hit by rising fuel costs.
And trade tensions. France warns the dispute over submarine could sink E.U.-Australia talks.
It's Monday. Let's make a move.
Welcome to FIRST MOVE. Great to have you with us this Monday. Let's get right to the financial markets. It looks like it's a classic risk off day
for global stocks.
Wall Street is on track for steep losses, at least in the early going with the Dow set to fall about two percent. The S&P 500 and the NASDAQ futures,
they are sharply lower as well.
In Europe, French and German stocks are down well over two percent. The losses come ahead of a challenging week for global investors as markets
brace for a possible loan default at Chinese property developer, Evergrande.
The company's worsening liquidity crisis triggered big slides in other property related stocks listed in Hong Kong today. The Hang Seng Index
tumbling more than three percent. And Mainland China, markets were closed for a holiday.
And it's not just uncertainty over China, investors also bracing for this week's key meeting of the U.S. Federal Reserve. Policymakers could give
their strongest hints yet that they will begin easing monetary support later this year.
So there's a lot going on for investors to worry about. Let's get right to the drivers and the latest on Evergrande.
Shares of Evergrande falling another 10 percent today in Hong Kong over its massive debt crisis. The company's stock has now shed almost 85 percent
Steven Jiang is in Beijing with the latest.
STEVEN JIANG, CNN SENIOR BUREAU PRODUCER: It's really not surprising to see Evergrande's stock price plummet again in Hong Kong on Monday given the
company was supposed to repay interest on some bank loans on Monday according to Bloomberg, which also said that Chinese authorities had told
major banks that they wouldn't be getting those payments.
But the bad news doesn't stop there for China's most indebted property developer because more interest payments are due later this week on two of
the company's bonds, totaling more than $100 million. It's not clear how much if any of those debt obligations will be met by this company, whose
liabilities are now exceeding $300 billion.
Publicly, the company is still trying to put on a brave face, but has acknowledged its cash flow problems. The worry right now is the company's
debt burden is so large it could spill over into other parts of the Chinese economy.
Mainland Chinese markets are closed on Monday because of a public holiday, but in Hong Kong, we've already seen share prices dropped sharply for
companies associated with Evergrande, including local Hong Kong developers, as well as Chinese banks and insurance companies, even those that claim
they have little or no exposure to Evergrande.
Now, this is really a reflection of how increasingly nervous investor have become about this prospect of a disorderly collapse of Evergrande and its
wide impact on numerous industries and sectors in China.
And this company, of course, employs some 200,000 people and its huge liabilities are widely held not only by financial institutions, but also
retail investors as well as home buyers and suppliers in numerous industries.
And already in the past few weeks, we've seen sporadic protests from retail investors at Evergrande offices throughout China and more protests could
emerge if things don't change or improve quickly.
And social stability, of course, has always been the number one priority for the Chinese government, so that's why all eyes are now on the Beijing
leadership to see if and how they will step in to bail out this once high flying Chinese conglomerate.
Steven Jiang, CNN, Beijing.
KOSIK: And here in the U.S., futures are deep in the red as investors consider the global impact if Evergrande defaults.
Matt Egan now joins us live with more.
Good morning to you, Matt. So you know, we just heard from Steven about the concern of Evergrande you know, the impact of it possibly defaulting and
impacting the Chinese economy. So, why are we seeing U.S. stocks take such a big hit today of all days?
MATT EGAN, CNN REPORTER: Well, Alison, U.S. stocks are taking such a big hit because there is concern that this is going to spill over.
You know, we learned 13 years ago last week how a domino falling in one part of the world -- Lehman Brothers in that case -- can send shockwaves
around the whole planet. That's because the financial system is just so interconnected.
EGAN: So there is some worry that this is Lehman 2.0, and there is reason to keep a very close eye on what happens with Evergrande. I mean, this is a
company that has $300 billion in liabilities. It is the number two real estate company in China. Real estate has been one of the bigger drivers of
growth in China, and China is one of the biggest drivers of global growth.
So what happens here really matters. Goldman Sachs put out a report yesterday saying that you're the Chinese government needs to manage this
carefully because there are some signs of financing issues that are starting to spread.
But we should be careful to point out that China is very different from the United States as far as how the government reacts to this kind of thing.
Beijing has vast control over the Chinese economy, over the banking system, over the financial markets. I mean, just look at the crackdowns that we've
seen in recent months on casinos and video games and ride-hailing companies.
And so the expectation on Wall Street is that it is going to do everything it needs to do to make sure this doesn't spread, and that's because, you
know, it's just simply not in China's best interest to have this devolve into something that creates instability.
But clearly, Alison, we need to keep a close eye on this.
KOSIK: And Matt, specifically what is the U.S. exposure to Evergrande?
EGAN: Yes, I don't know that we have -- that the United States has that much direct exposure. But, you know, we do know that some U.S. companies
obviously would be hurt if there's an overall slowdown in real estate, if there's kind of a risk off event broadly, then people might start pulling
some of their bets on some of the riskier parts of the U.S. market. So you can see how there could be a whole chain of events there.
But again, the expectation is that even if Evergrande is allowed to collapse, that China is going to try to ring fence the losses there and
make sure that it doesn't spread too far, because they don't want their own economy and their own market to collapse.
KOSIK: Debt ceiling also on investors' minds. I know that Janet Yellen -- Treasury Secretary Janet Yellen writing an op-ed that really caught
EGAN: Yes, Alison, the clock is still ticking on the debt ceiling. We haven't had any action there yet, and the U.S. Treasury Department has said
that, listen, if Congress does not raise this Federal borrowing limit, then at some point in October, the Federal government is going to run out of
cash, and that raises the specter of a default, which obviously would be, you know catastrophic.
And Treasury Secretary Janet Yellen, she wrote an op-ed in "The Wall Street Journal" over the weekend, and let me read to you a key line from Yellen.
She said: "The U.S. has never defaulted, not once. Doing so would likely precipitate a historic financial crisis that would compound the damage of
the continuing public health emergency."
Historic financial crisis, again, that's from Janet Yellen, who is very careful with her words, if not understate it. Again, most people that I
talk to, they do expect that Congress is going to do the right thing; that they're going to raise the debt ceiling, because just not acting here would
be too damaging.
But we still need to see action here of the Republican Senate Minority Leader Mitch McConnell, he said that he wants the Democrats to own this. He
said that Republicans are not going to vote to raise the debt ceiling, even though it's been done in a bipartisan way in the past. And Nancy Pelosi,
the Speaker of the House, she said she does want this to be done bipartisan.
So for now, the two sides continue to play chicken with America's credit worthiness, and you know, this is eventually going to start to matter to
financial markets. I don't think we've seen a lot of evidence yet that investors are that worried. But at a certain point, as we get closer to
October, and if nothing is done, then I do think that's going to start to play out in U.S. markets as well.
KOSIK: Yes, I think you're right, Matt, and you know, she also said widespread economic catastrophe could result if the debt limit is not
Matt, great talking with you.
EGAN: Thank you.
KOSIK: In the U.K., wholesale prices for natural gas have hit record highs. The government is holding crisis talks with leaders in the energy
industry where high prices have driven some suppliers out of business. Household gas bills are expected to soar this winter after market prices
tripled since January.
Anna Stewart joins me live now. Anna, I know the government is trying to reassure Britons that there won't be an energy crisis because of these
rising gas prices, but what can the government do?
ANNA STEWART, CNN REPORTER: Well, we do hope to find out soon following that roundtable. The Business Secretary is due to address Parliament in the
Gas prices are so high right across Europe for a number of reasons, really a perfect storm. There was the very long winter last year. The fact that
coal and solar output has been so low and also of course, like much of the world, they are just transitioning away from coal plants and nuclear
STEWART: In the U.K., that has actually been exacerbated by the fact that gas storage facilities have been drastically reduced in recent years.
Now, at least four energy suppliers have already gone bust. One energy consultancy firm we spoke to you this morning said between 35 and 40 more
are likely to go bust before winter is through that would impact 10 percent of customers.
So the problem for the government here is what you do with those customers who of course, are going to need energy going through winter. The big firms
that remain that are well capitalized and are well hedged for this can't simply afford to take on a huge influx of new customers.
Now, options on the table include the government taking over the administration of some of these failed companies. But of course, that means
the taxpayer foots the bill. Another option could see them just underwriting some debt for those companies that survive that can afford to
take on new customers, or interesting chat about creating some sort of bad bank situation, an energy state company that could take on those customers
while the current crisis rages on until it is resolved.
There has been a fair amount of criticism, Alison, with the U.K. government, in terms of have they done enough really to bolster energy
security while trying to transition to cleaner energy?
KOSIK: And, you know with rising energy prices, there's always this domino effect. Right? Can you talk me through here what this means beyond the
STEWART: Yes, it really is a domino effect. We have seen shockwaves through all sorts of sectors, but particularly food and drink supply chains
really in focus at the moment.
The CEO of U.K. supermarket chain, Iceland was speaking to BBC this morning and said, "It's no longer about whether Christmas will be okay, but whether
they can keep the wheels turning, and the lights on to get to Christmas." And this is because supply chains were already under huge pressure,
particularly with food and drink.
A big shortage of truck drivers related to Brexit, also all the pandemic pressures, and part of this is because fertilizer plants, three large ones
have actually shut production in the U.K. as a result of the high gas price. It just didn't make economic sense for them to continue. And the
byproducts of those plants are CO2 and ammonia, which is so important for many, many sectors, but particularly food and drink.
CO2, of course used to stun animals before slaughter, used to carbonate drinks, used to keep food and drink fresh when it goes through storage and
transportation. So this is why they are so under pressure. So add that to the government's to-do list. What are they going to do? Can they persuade
fertilizer companies to open back up again? Can they find another supplier of CO2 and frankly, what are they going to do with all of the other issues
already impacting some of these sectors, like the shortage of drivers as a result of Brexit -- Alison.
KOSIK: Anna Stewart, that is some a domino effect you just went through. Great to have you on the show. Very thorough.
STEWART: Lovely to see you, Alison.
KOSIK: Good to see you.
All right. These are the stories making headlines around the world. A gunman at a Russian University has killed at least six people and left many
others wounded. Officials say he entered the campus Monday morning with a hunting weapon and began firing. He was later injured while resisting
arrest and was taken to the hospital. The attack was the second mass shooting at a Russian school this year.
Russia's ruling party is on track to win parliamentary elections that were widely seen as fraudulent. With most of the ballots counted, United Russia
appears to have won half the votes, securing its majority in Parliament's Lower House.
The Kremlin has hailed the election results as positive, but critics claim there was widespread rigging.
Pfizer has announced that its COVID-19 vaccine generates a robust antibody response in children ages five to 11. These are the first such results
released for this age group for U.S. COVID-19 vaccines. Pfizer says it will request emergency use authorization for children from U.S. drug regulators
Access to COVID-19 vaccines tops the agenda of the 76th U.N. General Assembly session this week in Manhattan. More than 100 world leaders are
attending. Other topics they'll likely discuss include climate change, the fall of Afghanistan, and tensions with nations like Iran and North Korea.
France continues to make waves after being left out of a multi-billion dollar submarine deal between the U.K., U.S., and Australia. Now, it is
warning a trade deal between the European Union and Australia is at risk of collapse, citing a lack of trust. Cyril Vanier is in Paris for us.
Cyril, you know, I know you've been following this very closely and I'm curious after hearing this warning, how much follow through do you think
this has on the part of France?
CYRIL VANIER, CNN CORRESPONDENT: Yes, I think there is very much the potential, Alison, for France to go ahead and pull the plug on this deal.
I'm not saying it will happen, I'm saying it could happen for several reasons.
VANIER: First of all, the domestic audience here, Emmanuel Macron has been criticized by his opposition for France being kicked out of this submarine
deal, multibillion deal. Well, Mr. Macron will not want to appear weak less than a year ahead of the presidential election and a tough reelection
Number two, the language coming out of French officials especially the Foreign Minister who spoke of lies, betrayal, former alliances, and
partnerships, that language has been so strong that if there is no action behind it, it will ring hollow at some point.
Thirdly, this has reawakened a divide between the Anglo-Saxon world and the European continents, and France has a history of being rankled by that and
taking a very strong position.
So I think for all those reasons and also because France plays a central role in Europe, France may decide to pull Europe away from this deal that
will represent $2 billion to $4 billion of the European GDP, only a fraction of what the submarine deal, $65 billion represented for France.
KOSIK: Has France's retaliation stopped with Australia? Or will it move on to the U.S. and then the U.K.?
VANIER: That is currently being assessed right here in France, because it is one thing retaliating at Australia, it is one thing taking action
against the U.K. It is a completely other thing taking action against the U.S.
I think, short term. France has not announced what it would do apart, of course, from recalling its ambassadors, which it has already done. I think
longer term, this plays into the narrative of the French President who believes that the power of European countries, not just France, but the 27
member states of the European Union, their power comes through collective joint action on the world stage.
That is why he wants a joint military for Europe. He wants a more robust foreign policy. And he is going to be making that argument to the 26 other
countries. Now, time -- as timing would have it, France will hold the rotating presidency of the European Union starting in January and that's
going to be a platform for Mr. Macron to make this argument forcefully that if Europe does not want to be snubbed, does not want to be handled by some
of its own partners, the U.S. and the U.K., then it needs to assert itself more forcefully on the global stage.
KOSIK: Oh, the effects of this cancel deal not going away anytime soon. Cyril Vanier, thanks so much for all of your great reporting.
Still to come on FIRST MOVE, Europe's vaccine rollout was once criticized for being too slow, then it hit targets early. Europe's vaccine chief tells
And Amazon add climate goals to the list of things it says it can deliver ahead of schedule. We'll take a look at its net zero pledge.
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.
The big story we're following for you this Monday remains weakness on global financial markets. The major U.S. averages are on track for sizeable
losses when trading gets underway in the next few minutes. We are expecting losses of over one and a half percent for the Dow, S&P, and the NASDAQ.
This follows the weakness we saw in markets on Friday with the S&P and the NASDAQ falling almost one percent. Stocks fell below a key technical level
that is closely watched by investors, too.
The Dow has now fallen for three weeks in a row as investors focusing on Chinese economic uncertainty, the future of U.S. stimulus, and the looming
U.S. debt ceiling deadline. It's creating a risk off sentiment that's hitting crypto as well. Looking at Bitcoin today, it is currently down
about eight percent.
Europe's vaccine rollout was so slow that the World Health Organization branded it unacceptable. But since then, Europe has caught up. By August,
it hit its target of vaccinating 70 percent of adults.
Last week, the bloc said it was donating another 200 million doses to low income countries. That brings the total number of donated doses to over 400
Joining me now is Thierry Breton, he is the E.U. Internal Market Commissioner. He is also in charge of Europe's vaccine strategy.
Grateful for your time today. I know this begins a very busy week for you with all of your top level meetings with the U.N. GA beginning as well.
Thanks for your time today.
THIERRY BRETON, E.U. INTERNAL MARKET COMMISSIONER: Thank you very much, Alison. Thank you for having me.
KOSIK: Now, some of those meetings that you're going to be having will be involving vaccine manufacturing supply. The E.U. has surpassed the U.S. in
terms of vaccinations, as I said, with more than 70 percent of the population vaccinated. Still, though both the U.S. and the E.U. are
struggling with the same question, the question of how to boost vaccination rates even more? I'm curious how you feel about the vaccine rollout after
criticism of a slow start.
BRETON: Well, you know, it's true that we started a little bit slow. But I think it's fair now to recognize that today, Europe is the first continent
-- it is the first continent in terms of vaccination. We are at 73 percent of the population being vaccinated where the U.S. are at 66 percent. I
think we still continue -- need to continue, of course, to convince our fellow citizens. But we are proud to be the first continent not also in
terms of vaccine production.
We produce more than seven million doses per month, and we are also the first continent in terms of sharing and sending outside our vaccines,
because more than half of our production is for other countries.
So that's a triple first, which is important. We need to continue and I'm here also in Washington, D.C. this morning to continue the discussion and
the collaboration with my counterpart, Jeff Zients, we have been, of course in contact ever since the last eight months on a weekly basis to make sure
that we'll be able to work together. That's extremely important.
KOSIK: And I know semiconductors and supply chain issues, that's going to be some of the topics on the table at a bilateral meeting you're going to
be having with the U.S. Commerce Secretary. What do you hope will come out of those discussions?
BRETON: I need to be to be clear and honest with you, Alison. Of course, my trip was planned already for weeks, and I'm extremely happy to be here
in D.C. to be able to continue to engage cooperation with my counterpart.
But it's fair to say that since a few weeks, let's say the feeling in in Europe is growing through the population that something is broken between
our relation in Europe and U.S. I personally regret it, but that's a growing feeling. It's true also with member states.
So of course, it means that we all realize what's extremely important, but when we realize trust is paramount and that is the feeling in Europe that
trust is mutually given, and it is maybe not the way it should be.
So this being said, here I am. We need to continue to discuss because we have a lot of common interest between U.S. and E.U. and when this interest
emerge as the interest of Europe, of course, I'm here to continue to discuss, like in semiconductor.
BRETON: We have a lot to bring to the U.S. By the way, we decided together that within the next 10 years, we need to increase production together from
20 percent together today in global production in the world to 50 percent.
We have a lot to share also in R&D, but we will discuss this in a balanced way, of course, sensing of course, for supply chains, sensing for space. We
have a lot of cooperation. And, of course, also in what we do on the platforms.
KOSIK: Let's go back to a little bit of what you talked about at the beginning of your answer there about a breach of trust. You are referring
I'm assuming to the submarine deal.
BRETON: Not only, unfortunately, I refer again with this sentiment that I'm sharing with you today. And by the way, it started with, of course, the
previous administration, needless to say, but it was a big hope that we will be able to come back under normal operation, but it's true that what
happened, let's say over the past few weeks, and especially in Afghanistan, I've really seen, let's say a lack of trust and confidence between allies.
We are allies, we know what it means to be allies. Allies means that we need to speak, that we need to share, and by the way, on this planet,
nobody could be the center of this planet.
We need to have alliance and partnership.
I'm here again, to make sure that we'll be able rebuild this partnership, even if, in some areas, we may need to pause and to reset it, but I will
discuss this with my counterpart.
KOSIK: You know, President Biden had campaigned about getting the United States back in the good graces of its allies after the previous
administration, the Trump administration. Do you think that President Biden is not doing that because of what happened with his submarine deal? And
BRETON: Again, I'm speaking to you as a European Commissioner, and I'm sharing with you the growing feeling in the U.S. I've spent all my life
working with you guys. I have so many friends here. I know the strength of our partnership.
We know exactly, by the way, our allies, U.S., our allies. But again, allies means trust.
China is definitely our systemic rival. So we share the same view of the world. But believe me, believe me, U.S. plus E.U., we represent 10 percent
of the population of this planet. We cannot -- we will not be able to afford to go on our own.
So, that's why we have some tracks for example, in vaccines, yes, we need to continue to speed up and I'm preparing again the meeting that Ursula von
der Leyen will have probably with President Biden on this.
But we have also other things fight against, the CO2, we need to be together here. And I'm here to talk about this including in other topics,
like for example, cybersecurity.
KOSIK: Okay, Thierry Breton, E.U. Commissioner. Thanks so much for your time today.
BRETON: Thank you very much, Alison.
KOSIK: You're watching FIRST MOVE. The market open is next.
KOSIK: Welcome back to first move. I'm Alison Kosik.
And U.S. markets are up and running this Monday, and as expected, stocks are kicking off the trading week with some pretty sizable losses here. The
blue chips among the biggest losers in early trading with the Dow coming off its third straight weekly drop.
Even before today's selloff, Bank of America, Deutsche Bank, and Morgan Stanley all warning that a 10 percent market correction is looking more
likely. Fears of market contagion from China's property developer crisis that is helping to contribute to today's stock downdraft. It's also
triggering a flight to safe haven U.S. bonds. Bond prices are rising and yield are falling. The safe haven U.S. dollar is also is on the rise today
All this comes as the U.S. House returns to work today with the future of trillions in fiscal stimulus hanging in the balance. The fierce
partisanship on Capitol Hill is all but assuring a down to the wire battle to raise the debt ceiling, too.
Greg Valliere joins me live now. He is the Chief U.S. Policy Strategist at AGF Investments. Great to see you.
GREG VALLIERE, CHIEF U.S. POLICY STRATEGIST, AGF INVESTMENTS: You bet. Nice to see you.
KOSIK: And there is so much to talk about. But let's begin with President Biden's sweeping tax and spending proposals. They face a bruising fight.
So let's take one at a time here, if you wouldn't mind. What do you see happening with the initial $1 trillion infrastructure bill and then the
$3.5 trillion package of social spending and tax hikes. Talk about the timing of all this. How is this going to play out?
VALLIERE: Well, it's confusing like I think everything we'll talk about this morning. I do think there's still a chance for the $1 trillion,
Alison, which is basic infrastructure -- bridges, highways dams, water, WiFi.
The second bill, the $3.5 trillion bill seems to be encountering even more opposition, not just from Joe Manchin of West Virginia, but there are House
members who are having problems with the Medicare drug negotiations, with the timing, on and on and on.
And maybe more importantly the deadline that Nancy Pelosi set for next Monday, the 27th apparently will be missed.
KOSIK: Okay, so that -- what does that mean? Missing that deadline for this legislation?
VALLIERE: Well, I think they'll have to put that on the shelf for a while and then do a continuing resolution to keep the government afloat on
October 1. So that means that the second huge infrastructure bill I think could drag well into the fall, maybe even into December.
KOSIK: How does all this -- how does immigration fit into this? You know, it's all about negotiation. It's all about you give me this, I'll give you
that. Immigration has been a key part of President Biden's build back better agenda and his pledge for reform with immigration. Where does that
fit into all this?
VALLIERE: It looks like it probably will not fit into it, Alison. The parliamentarian of the Senate ruled over the weekend that it was not
germane to the $3.5 trillion bill. So, I think immigration is probably not going to be addressed as we see all of these horrible videos of people in
Texas living under a bridge.
KOSIK: And so as we see, you know, each of these pieces of legislation being used as sort of a bargaining chip, now competing for the attention
are what you mentioned are the two massive tasks that Congress still faces, A, funding the U.S. government and B, increasing the debt ceiling. What do
you see happening there?
VALLIERE: Well, unfortunately, nothing right away. I'm not sure who to believe in terms of when we have to get it done. My sense is we probably
can wait until late October before Janet Yellen and the Treasury Department run out of money. But she was quite alarmist over the weekend and an op-ed
in "The Wall Street Journal" saying we could have a catastrophe if we don't deal with it.
I think she wants to get pressure on Mitch McConnell, maybe have the markets put pressure on Mitch McConnell to try to get this thing done. But
as of now, the Republicans have no interest in doing anything on this. And as we go well into the fall, the debt ceiling may be the most ominous of
all of these stories.
KOSIK: How dangerous is it that we've got two large pieces of legislation that are really key pieces of the Biden administration, along with the debt
ceiling, along with, you know, on the table, keeping the government running -- how dangerous is this that everything is culminating at once?
VALLIERE: It sure doesn't help things. It makes it very confusing, and I'd say a complicating factor you've got to concede is that Biden has lost some
political capital over the withdrawal in Afghanistan, over confusion on shots, over immigration, over crime.
So the President himself does not have the political clout, the political capital, now that he had, let's say, in the spring.
KOSIK: All right, looking at the market today, we are seeing a big selloff. Do you think this is the beginning of a correction?
VALLIERE: Oh, yes. You know, a lot of it is not entirely Washington. It's Chinese. There are Chinese issues, of course. But I think the confusion
over taxes, over spending, over the debt ceiling, that confusion is going to persist for weeks and weeks to come.
KOSIK: The Fed is having its meeting on Wednesday, going to make an announcement, going to have a press conference. What do you expect to hear
from Fed Chief Jay Powell?
VALLIERE: I think they'll make it clear that the Fed will begin tapering its asset purchases later in the phone, not at the meeting this week. I
don't think that's going to happen. But there's a problem with the Fed now.
There's controversy over Fed or Regional Bank Presidents trading, being active traders. They're saying they didn't violate any rules. I would say
there may be something wrong with the rules, if Fed officials are active traders. So that puts the Fed in a difficult spot.
It seems like everywhere you look, Alison, there's controversy.
KOSIK: Do you think that will impact Jay Powell staying in his seat?
VALLIERE: I don't think so. I think he still is the favorite, but it sure gives Elizabeth Warren and the Fed's critics something else to complain
about when you've got Fed officials who are active traders. I don't think it looks good. I think it's embarrassing for the Fed.
KOSIK: Okay, thanks for your time. Greg Valliere, the Chief U.S. Policy Strategist at AGF Investments. Great to see you.
VALLIERE: You bet.
KOSIK: Coming up, Amazon's bold promises to cut carbon emissions. That's all great. So what's it doing about all those little boxes? I'll deliver
that story to you in two and a half minutes.
KOSIK: Welcome back. As world leaders gather for this week's United Nations General Assembly, expect to hear a lot about a post-pandemic world,
which is kinder to the environment. The U.N. says this is a pivotal moment for the future of the planet.
At the same time, some of the world's biggest brands are joining forces with Amazon and a promise to cut carbon emissions. Two hundred two
organizations have signed the Climate Pledge to achieve net zero carbon by 2040 or sooner.
Kara Hurst is Vice President of Worldwide Sustainability at Amazon, and she joins me live. Great to see you.
KARA HURST, VICE PRESIDENT OF WORLDWIDE SUSTAINABILITY, AMAZON: Great to see you. Thanks for having me today.
KOSIK: Glad to have you with us to talk about this announcement of who is signing on today to this pledge. Talk with me about how many companies? Why
this is significant in the broader text of climate change?
HURST: Absolutely. Well, we're really excited. We committed to the climate pledge in 2019, cofounded it with a group called Global Optimism which is
run by Christiana Figueres, who was an architect of the original Paris Agreement.
And the Climate Pledge asked companies to commit to net zero carbon by 2040, ten years ahead of the Paris Agreement. So, it's a really urgent
action around climate. And today, we're hearing that over 200 companies have already committed to this.
So that is $1.8 trillion in revenue from those companies, over seven million employees worldwide. It's across 26 different industries and in 21
different countries. So, it's a really huge effort that a number of very large and some small companies are making around a commitment to urgent
KOSIK: And I know, you know, Amazon has -- was the first one to sign on to this pledge. What kind of progress has Amazon made?
HURST: Absolutely. So we knew that with our size and our scale, and looking at the science, the IPCC reporting and thinking about kind of what
we were seeing in the world that if we could commit to this urgent action on climate that we would hope to inspire others to take that action as
And so we're making large operational changes. We're looking at our carbon footprint, and looking at our transportation, our fleet, our logistics, and
our building. And thinking about how do we transform our operations to act, you know, more urgently on climate? So we're looking at things like
electrification of our fleet.
We've ordered over 100,000 electric vehicles from a company called Rivian, but we've also partnered with others around the world. And we've purchased
a large amount of renewable energy. So, we're the largest global purchaser of renewable energy. And we're now operating with 65 percent of our global
operations powered by renewables. So, those big changes can make quite a difference.
KOSIK: And speaking of changes, you know, I'm a huge customer of Amazon, full disclosure, and I get lots of boxes and packages sent to me every day
and I'm wondering, am I contributing to harming the environment with all of those packages coming to my house as I multiply them. I see them piling up
on the streets of New York City for them to be delivered?
HURST: Well, thanks for being a customer, Alison. I also am an Amazon customer and I watch those packages coming in my house every day and one of
the things I've been doing with my kids is looking at that packaging and we've been really investing in better packaging for well over a decade.
Over 10 years ago, we launched a program called Frustration Free Packaging, which was about really converting packaging to hundred percent recyclable
to eliminating things like clam shells and twist ties and to right sizing packaging.
We also have an effort called ship to known container, which is when you order a product and comes without Amazon over boxing. And we also launched
a program related to the pledge called Climate Pledge Friendly and that program is around certifications where customers make it easy for customers
to shop for more climate friendly products that reduce carbon and preserve the natural world.
HURST: So all of those things really have added up to huge numbers. We've reduced the amount of the weight of the outbound packaging by 36 percent
since 2015, and that is a -- you know, a savings of over two billion boxes. We've also introduced recycled options. So like a padded paper mailer,
that's fully recyclable.
So hopefully, you're seeing those changes, you're seeing more right-sized boxes, and we're sharing that with all kinds of companies that sell their
products on Amazon, and those in general that sell, but we also know that e-commerce is actually more sustainable, it's a more sustainable way to
So there's a lot of things where those changes are happening, and we can make customers feel good about the choices that they're making.
KOSIK: One more question about the overall climate pledge that you're backing here. Is there a watchdog watching over these companies? I mean, I
know they are self-reporting what they're doing, but you look at Nespresso's parent company, Nestle, it was actually one of several
companies last month that were called out for greenwashing, meaning touting themselves as being eco champions, but instead, not following through.
And Nestle was actually one of the world's top plastic polluters for the third year in a row, and I noticed its name on the list.
HURST: Well, I think one of the really important things that companies need to do is to commit to sharing progress. And so that is the absolute --
the first tenet of the Climate Pledge is to report and share progress towards climate and carbon emission reduction.
So we have a number of different partners we work with, not only Global Optimism that I mentioned, but also we mean business that includes
organizations like CDP, and the science based Targets Initiative, that are those science led organizations and reporting organizations that really are
helping companies commit to very rigorous standardized ways of reporting on carbon emissions, carbon intensity reduction, and so those are important
things for companies to lean into and to follow that guidance.
KOSIK: Okay, Kara Hurst, Vice President of Worldwide Sustainability at Amazon, great talking with you. Thank you.
HURST: Thank you so much.
KOSIK: After the break, it's the Emmys on TVs night of nights. This pair had a lot to smile about.
KOSIK: News just coming in to CNN. The United States is ready to relax travel restrictions for passengers coming in from the European Union and
the U.K. according to a person familiar with the matter.
It is reported the new policy which begins in November applies to vaccinated passengers only and it's a major victory for airlines and travel
Transatlantic travel has been severely restricted since March 2020.
KOSIK: Okay, let's take another check of the markets. It looks like U.S. stocks are coming off their worst levels of the session. The NASDAQ seeing
the biggest pullback down only about one and a half percent. Not a great way to begin the trading week though, Clare Sebastian joins me live now.
Clare, you know, I was looking at those numbers. We're seeing a little bit of a seesaw action. Do you expect the selloff to continue to the closing
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, Alison, I think one thing to bear in mind is the context of all of this in terms of what the
markets have been doing for the last year or so.'
We've really seen a very sustained rise in the S&P 500. There hasn't been a five percent pullback or more for about 11 months now, that according to
CFRA. It is triple the average that you usually get since World War II.
So I think in many ways, while we do see this confluence of events, the issues around Evergrande in China, the jockeying in Washington over the
debt ceiling and spending, the Fed meeting this week, I think, in many ways investors, were looking for a reason to pull back, many felt that the sort
of the run up had been going on for too long, and they needed to take a breather here. So, that might be part of what we're seeing at the moment.
KOSIK: Could we see Wednesday as another down day or volatile day for the market, because we are going to be listening to the Fed.
SEBASTIAN: I think the volatility is certainly going to continue. If you look at the VIX Index, which shows sort of implied volatility or expected
volatility in the market over the next month that has come up significantly today. It's back up at levels that we saw in May when we got the last
period of significant volatility in the market that was driven by concerns around inflation.
So perhaps this is a sell the rumor buy the new scenario, but it just depends on what the Fed says and how they signal this. We know that they
are they -- that there is sort of a consensus building around the idea that tapering is going to be necessary and that there's no reason to really
But we also get economic projections as well. So that will be closely watched for how the Fed thinks that the delta variant and other concerns
are going to impact growth into this year and next -- Alison.
KOSIK: Okay, Clare Sebastian, thanks for keeping an eye on the markets for us.
And there were plenty of name checks for "Ted Lasso" stars at the Emmys last night.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Emmy goes to Hannah Waddingham for "Ted Lasso."
UNIDENTIFIED FEMALE: Brett Goldstein, "Ted Lasso."
UNIDENTIFIED FEMALE: Jason Sudeikis, "Ted Lasso."
UNIDENTIFIED FEMALE: And the Emmy for Outstanding Comedy Series goes to "Ted Lasso."
(END VIDEO CLIP)
KOSIK: The Apple TV plus comedy dominated the top prizes, after three previous tries, "The Crown" finally won Best Drama. Just one of the awards
it took in a seven-trophy haul.
Netflix had 10 wins last night and HBO, which like CNN is part of WarnerMedia won nine.
Frank Pallotta joins me on this sweep for streaming services. Frank, tell me more. I had to go to sleep and wake up to you know, get ready for this
show, so give me the lowdown.
FRANK PALLOTTA, CNN MEDIA WRITER: What's really interesting is that the Emmys have always been about TV's biggest night, but last night, it was
really about streaming's biggest night.
So what's been really interesting is that when you look at Netflix, you look at you know "Ted Lasso" was, so all that stuff is happening while
KOSIK: Are you able to tell so far, Frank, if -- how the ratings were because I know last year's Emmys were a ratings low. Can you tell so far
how they did?
PALLOTTA: Well, we don't have the numbers yet. But I'm actually kind of curious to see if it's (INAUDIBLE) last night was to last year because
basically what we're really noticing is that we had to go up against a big football game last night, which was the Ravens taking on the Chiefs, so the
NFL probably took a lot of its audience away.
But the bigger problem is, is that you know we have this fragmented audience now where people aren't watching all the same thing, so they're --
you know, even though "Ted Lasso" had this huge sweep last night, you know, many people may not even know what "Ted Lasso" is because they don't have
Apple TV plus.
So that might hurt the ratings in the long run.
KOSIK: So what should we be watching for now? What are the shows we should be binge watching?
PALLOTTA: I mean, I'm a huge fan of "Ted Lasso" so I wouldn't go up against the Emmys right now. But I mean that's what I would say is probably
the best show out there. (INAUDIBLE) that was really interesting too.
KOSIK: Are we ever -- you know what comes to mind? I'm thinking of "Ozark." When are we going to see another "Ozark"?
PALLOTTA: Yes, I don't know when we're going to see the next season (INAUDIBLE) next year, but we will see soon. Netflix has just a ton of
content coming out at all times.
KOSIK: Well, I can't wait to watch the next season of "Ozark." Frank Pallotta, thanks for running down everything with the Emmys last night.
PALLOTTA: Thank you.
KOSIK: Before we go, I want to take a quick check on the market and see if they're recovering at all from the big sell off we saw earlier. We're
seeing markets off the lows of the session seeing the Dow down about 382 points, only one -- a little over one percent.
Keep in mind, we've been seeing these big numbers, markets are still sitting close to record highs.
Thanks for watching. Be sure to connect with me on Instagram and Twitter @AlisonKosik.
"Connect the World" with Becky Anderson is next. I'll see you next time.