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First Move with Julia Chatterley
U.S. Economy Adds More Jobs than Expected; Pfizer Soars on Hopes for its COVID Pill; Climate Protesters Take to the Streets of Glasgow. Aired 9- 10a ET
Aired November 05, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELENI GIOKOS, CNN BUSINESS ANCHOR: Live from Dubai. I'm Eleni Giokos, I'm in for Julia Chatterley. This is FIRST MOVE and here is your need-to--know.
Back to work. U.S. economy adds more jobs than expected.
Share surge. Pfizer soars on hopes for its COVID pill.
And COP out. Climate protesters take to the streets of Glasgow.
It's Friday. Let's make a move.
A warm welcome to FIRST MOVE. Great to have you with us today for another jobs Friday in America. The U.S. announcing a short time ago that is
stronger than expected 531,000 jobs were added to the economy last month driven by robust gains in manufacturing, as well as the leisure and
hospitality sector. The unemployment rate fell to 4.6 percent, and in another positive sign for workers, wage growth ticked higher as well.
U.S. futures holding on to strong gains as investors pour over the numbers. In addition to jobs, markets also monitoring the action in Washington. The
U.S. House could vote today on President Biden's long delayed stimulus bills. And a COVID treatment breakthrough is giving a lift to reopening
stocks. Details on that just ahead.
And then over in Europe, stocks are at records as well, that despite weak Eurozone retail numbers and disappointing factory data from Germany. German
COVID cases sitting at all-time highs again, as well. So many risks on the horizon.
Asia, meantime, lower across the board. Chinese real estate firms were hard hit amid concerns over the health of another property developer, the Kaiser
Group. Reports say it may be at risk of default.
So lots to get into today. Let's begin our drivers with a closer look at U.S. jobs. We've got Rana Foroohar joining us now. Rana, really good to see
you. Better than anticipated, but I'm still looking at the overall unemployment rate, what stood out for you there?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, as you say, more robust jobs numbers than we were expecting, and really these numbers are closer to
what we saw at the beginning of the year, which is when we really got that first big post COVID pickup.
You know, what this says to me is that the delta variant is ebbing, more people have been vaccinated, and there is a lot of pent up demand in the
system post COVID. You know, we've seen that in some negative ways with supply chain shocks, with shortages, with clogging at ports in LA and Long
Beach. So you know, there are some problems associated with this, but we need to remember that that underlying recovery is there. People want to
spend and people are getting back to work.
GIOKOS: Yes, and they are feeling confident to spend. And that's, I guess one of the most important things. Private payrolls, also looking stronger.
Wage growth looking good as well. And then you're hearing from, you know, many sectors within the economy saying, we need people, we need to hire
more people, and there are just not enough in the jobs market. That's an interesting line to hear as well.
FOROOHAR: Well, it is. And you know that that's always the issue in Anglo- American economies, which tend to fire people quickly in downturns and then try and hire them quickly in upturns, there are these rocky periods where,
you know, you simply can't smooth over the issues, trying to get people back in the labor force, get them retrained.
Interestingly, there has also been, you know, a number of women that have dropped out of the workforce throughout COVID having to balance childcare
issues, and some of the work that is most needed right now in the caring economy, in the service sector really requires women.
So, you know, there's a mismatch there, and I think that you're going to see probably another year of have some ups and downs in the labor market as
those mismatches are worked out.
GIOKOS: Yes. Look, as we start to see better than expected numbers, you know, every single month, does this mean that the U.S. economy right now is
strong enough to warrant a pullback from stimulus?
FOROOHAR: Well, this is the big question, right? The Fed had already said even before these numbers that they were going to pull back on their bond
buying program. You know, they believe that the markets are strong.
Now, whether or not they raise rates, I don't think that's going to happen in the next month or two. The markets are pricing in at least a couple if
not more rate hikes in 2022. But I think you're going to need to see several strong jobs reports before that happens because remember, the Fed
is balancing, really on a very tricky needle here. They don't want the market to crash. They don't want to pull the rug out from under things too
soon. At the same time, they don't want to let inflation get out of hand and wages have been rising, prices have been rising, energy prices have
been rising strongly.
And in both Europe and the U.S., I suspect that rising strongly. And in both Europe and the U.S., I suspect that rising energy prices, in you know,
what may be a long cold winter are going to be a big topic.
GIOKOS: All right, so in terms of the infrastructure bill, and the fact that there has been just so much to infer. There's a big chance today could
be the day where you actually see some voting happening. Are you feeling optimistic about this?
FOROOHAR: Yes. You know, I am feeling optimistic. And frankly, it is do or die for Biden. If the party can't get through an infrastructure bill. I
mean, the President has himself admitted that this would be a major failure of one of his top goals.
All of the wrangling speaks to something that I think overseas viewers sometimes may have a hard time understanding, which is that there's this
existential crisis within the Democratic Party right now about what the future should look like. Should America look more like Europe with a
really, really robust safety net? Should there be socialized medicine? Should there be free childcare? Or should we just be focused on building
the minimum of roads and bridges and maybe broadband and there's a big debate over that right now.
GIOKOS: All right, so hopefully, we get some news on that later today. Thank you so much, Rana. Good to have you on the show.
FOROOHAR: Thank you.
GIOKOS: All right, moving on now and shares of Pfizer are surging premarket. They are up some 11 percent after the company presented interim
results of a trial of a new anti-COVID drug. The company says the experimental pill greatly reduced the risk of hospitalization and death in
high risk patients. It hopes eventually people will be able to take it at home.
Earlier, the Pfizer CEO told CNN, this is a game changer.
(BEGIN VIDEO CLIP)
ALBERT BOURLA, CEO, PFIZER: I think it is great days for humanity. In fact, better news are coming a year almost to the day after we announced
another breakthrough on November 9th. Last year, we announced the COVID-19 vaccine, and today, we are announcing a pill that treats those
unfortunately, they get the disease. It is significant.
That means that instead of having among this group of people, 10 going to hospital, only one will go and likely very few, if any will die.
So the introduction of this pill will save millions and millions of lives.
JOHN BERMAN, CNN ANCHOR: Where does this fit in the battle against COVID? Obviously, you still want people to get vaccinated. People need to get
vaccinated. Vaccinations are hugely important. But what does this pill then do help -- what does it do to help change the pandemic?
BOURLA: There are no words that I can use to emphasize how important it is the use of vaccines, without being current without vaccination, including
the booster, vaccinating all the ages, we will never be able to get rid of this virus.
But of course, vaccines are not effective hundred percent, and not everybody are getting the vaccines. So this is why we are have this
unfortunate situation that our ICUs in hospitals is overcrowded by unfortunate people that they're getting the COVID. Now, we have a solution
for that, and this is exactly what it feels. This is not to prevent, at this stage, COVID. This is to treat those that unfortunately get the
BERMAN: Yes, once you get it, this can really help you.
BERMAN: Adverse effects? Your news release on this, which I had a chance to read through quickly did note there were some adverse effects for some
people who took it. What were they?
BOURLA: In fact, that's the amazing thing. The people who took the medicine had way less adverse events, than the people that took the
placebo. In fact, in terms of serious adverse events, we had 1.7 percent of the people that took the medicine have these events, compared to six
percent of people that took the placebo.
So the adverse events are clearly caused also because there is a disease, right?
BERMAN: What were the adverse events just so we understand it?
BOURLA: What you expect to see to have from COVID. So, the high fevers, high headaches, diarrheas, things that are affecting you because of COVID.
But as I said, it was way less with the treatment than with the placebo.
BERMAN: When do you think this can get approved?
BOURLA: This is something that F.D.A.'s responsibility; so E.M.A., in terms of European authorities, but I can't talk about them. What I can say
is that we plan to submit as soon as possible, hopefully, hopefully we will submit before Thanksgiving.
(END VIDEO CLIP)
GIOKOS: Greta Thunberg is joining young climate activists in Glasgow today to demand greater action from world leaders as the first week of COP 26
comes to a close. Thunberg has been highly critical of the Summit.
Phil Black is in Glasgow and he is walking with the protesters. Phil, what are you hearing? What are the activists telling you?
PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Hey, Eleni. Lots of noise, lots of passion in Central Glasgow. Thousands of people who do not have a
lot of faith in the process that is taking place in the Climate Talk Conference that is only a short distance from here.
This is an overwhelmingly young crowd. These are the people that are going to be living with, living through the consequences of what is and isn't
decided at that corporate center. The conference in its first week has been defined by limited successes, announcements, deals that are heavily
qualified, that have weaknesses and caveats, and they do not represent the sort of bold, drastic action that the science says is necessary, and the
people who are marching here today really want to see as well.
This is only a warm up. There are thousands of people, as I say, but the really big protests will be taking place here in Glasgow over the weekend,
and their purpose is to maintain pressure, to remind those in the negotiating rooms precisely what is at stake, because although progress has
been made, these people and the science says that near enough simply isn't good enough when it comes to avoiding and ensuring the world avoids the
worst impacts of climate change -- Eleni.
GIOKOS: Well, Phil, I mean, I guess they're looking at previous COP Summits and saying, well, what really happened post those Summits? Here we
have world leaders patting themselves on the back to some extent because of the aggressive commitments that many of them have actually voiced over the
past week or so and even leading up to COP 26.
When the youth and the protesters behind you clearly say they want more, what exactly do they want to see? Because it's easy to say it's not enough,
but you can't just turn off the taps on fossil fuels, because that will have a devastating impact on economic growth.
BLACK: Yes, I mean, there is that endless tension between the idealism of what these young people want, and certain economic realities. But these
people are not interested in half measures. Now, there was a banner here I saw earlier that summed it up pretty well, which just said, "Stop burning
stuff." And that's what they want to see more of.
Obviously, we can't just turn it all off tomorrow, but they firmly believe, as do many other activists and analysts, and some of the high ambition
countries at these talks. They believe that more can be done and more must be done in the near term.
We have seen at these talks, a lot of countries come in certainly signaling a change of direction and focus, a willingness to embrace the necessity of
net zero emissions in the longer term. But what analysts and activists point out regularly is that those long term ambitions have to be backed up
by clear, decisive, credible action in the short term, specifically this decade.
You know, we have been told repeatedly, and the science says this, we've got to roughly halve our emissions in the coming 10 years. And if we don't
do that, then the long-term goal hitting that carbon neutrality by the middle of the century, all of this in order to contain our average global
temperature increase to 1.5 degrees Celsius. That simply isn't achievable. That goal slips away.
So there will always be an economic argument, certainly in some countries more than others for progressing slowly and carefully. But the reality is,
as we have been told, time is running out. If we don't see more ambition in the near future, we simply won't achieve what is needed to be achieved and
that is what is motivating these people here today -- Eleni.
GIOKOS: Thank you so much, Phil, and stop burning stuff. Simple, but absolutely relevant right now. Thank you for that update.
All right, these are the stories making headlines around the world.
Rebel forces in Ethiopia are gaining in numbers as they rapidly advance towards the capital city, Addis Ababa. There are conflicting reports on how
close they actually are. Now after a year of conflict, nine groups opposing the government say they will form an alliance today at an event in
David McKenzie joins us now live from Johannesburg. David, we're hearing the rebel forces are gaining ground towards the capital city. Then you're
hearing about an alliance that is forming in Washington, D.C. What is the state of play right now?
DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Eleni, it's a very difficult time for Prime Minister Abiy. Certainly, the most critical period
I think since he took office and this crisis began around a year ago. The rebel groups or the OLA in the south and east of Addis Ababa and the TDF,
the Tigrayan Defense Forces have moved closer to the capital this week.
It is unclear, and I must be specific on this, it is unclear where exactly they are right now because in part of a blockade of information and
communications. The government for its part is downplaying the threat, of course, to the capital, though just this week, they've reinstated through
Parliament, a state of emergency, which gives them broad powers to arrest and detain people without due process.
MCKENZIE: I must say, right at the moment, the government is giving a briefing with the media with the Attorney General and a member of the Prime
Minister's office, they are again placing this crisis the blame for it squarely on the TPLF, the Tigrayan political group that they've been locked
in conflict with since last year, that has been their sustained narrative on this. But there have been repeated criticisms and allegations against
the government of widespread atrocities and a blockade to stop humanitarian aid getting to that part of Ethiopia, something they deny.
They are calling the reporting on this alarmist, but it certainly is a very challenging period for Abiy and his options appear to be narrowing --
GIOKOS: All right, David, thank you very much for that update. Great to see you.
Now, the funeral for the late U.S. Secretary of State Colin Powell will take place at Washington's National Cathedral today. He died in October
from complications from COVID-19. Colin Powell served in several top roles in Republican administrations and was a retired Army General.
There's full coverage on CNN from 11:00 a.m. Eastern time.
And still to come on FIRST MOVE. Novavax's new hope. A COVID-19 vaccine that could be a game changer for poorer nations. I'll speak to the CEO.
And this isn't over yet. The W.H.O. is warning Europe more COVID trouble lies ahead.
GIOKOS: Welcome back to FIRST MOVE. I'm Eleni Giokos in Dubai.
Now, U.S. stocks set to rise further into record territory after the release of October's better than expected job numbers, 531,000 new jobs
created last month, about 100,000 more than expected. September's weak numbers were revised higher too and unemployment dipped to 4.6 percent.
The new numbers coming just two days after the U.S. Federal Reserve announced plans to begin slowing stimulus due to the stronger jobs picture,
as well as fears of higher inflation. Now, inflation concerns are growing at the Bank of England as well, although it surprised investors Thursday by
putting off an expected rate hike.
GIOKOS: Meantime oil prices are on the rise after OPEC+ announced that it will boost production only gradually. The White House blasting that
decision saying it imperils the global economic recovery. It wants OPEC+ to open the taps wider and boost supply.
All right, so vaccine maker Novavax reporting a net loss of $322 million as it awaits a broad approval of its COVID-19 shot. On Thursday, Novavax
sought emergency authorization for the vaccine from the W.H.O. and other regulators. Indonesia became the first country to approve the shot earlier
this week. Shares right now are down over 10 percent in premarket trading.
Joining me now is Stanley Erck, the President and CEO of Novavax. Sir, good to have you with us. Look, we mentioned the losses that you've incurred
over this quarter. But looking at your R&D expenditure and seeing that you've spent over $400 million in the quarter versus what you did last
year, this is clearly about, you know, looking at this vaccine that you're trying to put into the markets, and the spending that you've incurred is
actually all about trying to get authorization and looking at agreements as well, which you have signed some as well. Does this mean that these numbers
are as bad as they're going to get?
STANLEY ERCK, PRESIDENT AND CEO, NOVAVAX: Well, you know, these numbers -- what the last reflects, of course, is our investment in this very important
vaccine. And so as you do clinical trials, which we've just -- you know, we've done been doing pivotal clinical trials in three different countries
and that reflects that loss. So, once we start getting revenues, which we are now on the verge of doing, given that we've got authorization, the
numbers will change dramatically.
GIOKOS: Okay, so let's look at your vaccine. It's built on all older technology. It is also different from Johnson & Johnson, of course, vastly
different from mRNA take as well. Tell me a little bit about the vaccine and whether you think that your formulation is going to help the hesitant
to want to get the jab.
ERCK: Well, you know, the data speaks for themselves, we have these clinical trials that we've done show that we have the highest efficacy of
any vaccine. So we had, in some cases 100 percent efficacy against moderate and severe disease. We showed our efficacy that was very high against the
variants that you keep hearing about.
So we have a great vaccine that is -- has a very good safety profile. And on top of all that, the stability shows that we could just keep the vaccine
at refrigerator temperatures. There is no need to freeze during shipment or storage, and it is an ideal candidate for global distribution.
GIOKOS: So, I would like to find out what your global strategy actually is. You are now basically going to be competing against other vaccine
manufacturers that have been, to some extent established in the market right now.
You've already signed some agreements. I know you're looking for authorization. How optimistic are you that you will be able to adequately
compete on the global stage?
ERCK: Well, the competition is -- there are a couple of factors. One is just availability of product. We have a very robust major global
manufacturing strategy. We have partnered a long time ago last year with a company called the Serum Institute of India. And the reason we partnered
with them is for that very reason they are the largest vaccine manufacturer and distributor the entire world. They routinely manufacture 1.5 billion
doses and 65 percent of the world's children get their vaccine on an annual basis, and so this is the right partnership.
We could, as a biotech company get into, you know, the 170 countries that we need to get to and Serum can help us do that.
GIOKOS: I know that you're focusing on emerging markets. You've alluded to the fact that temperatures are actually conducive to try and get this
vaccine to remote areas. Given the profile of COVID-19 changing quite dramatically and Pfizer just announcing that they do have a pill that can
be taken that dramatically reduces hospitalization If you do contract COVID, how does that change your prognosis on, you know how quickly you can
try and distribute the hundreds and millions of vaccines that you've put in your pipeline?
ERCK: Well, it's terrific news that Pfizer has a good pill. That's always -- that's always a good thing if you can take it after you've gotten sick,
but remember, vaccines prevent illness and that's the ultimate goal. And so, I don't think the pill is going to have much impact on our forecasts at
all. I think it will be a helpful tool in a doctor's kit when somebody gets sick, but the best way is prevention, and so that's what our vaccine is
designed to do.
GIOKOS: Yes. So you already applied to the W.H.O., are you looking to work with the F.D.A.? And what timelines are we looking at here?
ERCK: Sure. So you may have noticed, we have filed with nine different regulatory agencies just within the last two weeks and that includes the
W.H.O., and so we have global aspirations. We, of course, are working with the F.D.A. very closely. We are -- we've just sent them a file of data that
will initiate a meeting with them shortly and our expectation is that we'll file our full package with the F.D.A. before the end of this year -- so
GIOKOS: You did mention that the efficacy, which is great, but in terms of issues and side effects, anything you should you know, highlight to us?
ERCK: No. We have a very benign side effect profile, and I think that is the highlight of our vaccine.
GIOKOS: All right, thank you very much, Stanley. Good to have you on the show. Much appreciates it.
All right, the market opens next. Stay with us.
GIOKOS: All right, so welcome back to FIRST MOVE. Actually, I had to turn my coms down, it was so loud. Excitements at the New York Stock Exchange
U.S. stocks are up and running for the final trading day of the week, and as expected, Wall Street is hitting fresh record highs after the release of
October's better than expected jobs report. The major averages all on track to finish the week higher. Take a look at that, it is green across the
The NASDAQ looking at its 10th straight winning session. Pfizer is soaring in early trading. The COVID vaccine maker is out with an encouraging data
on its experimental COVID antiviral pill. It says the treatment can cut risks of hospitalization and death by almost 90 percent.
Merck which is developing an antiviral pill of its own is trading lower on the news. Now, the U.K. approved emergency use of the Merck pill earlier
All right, reopening stocks like airlines and hotels are among the best performers today amid expectations that COVID pills will help boost
profits. Let's return to our top business stories.
A big rebound for the jobs market in the U.S., 531,000 net new hires in October. That's far above economist predictions of 450,000. And the
employment rate fell last month to 4.6 percent.
Mark Zandi is the Chief Economist at Moody's Analytics and joins us now. Mark, great to see you. So, this number is clearly far better than
expected, just adding a little bit more optimism that perhaps we're getting closer to a normalization within the jobs market. But again, I'm looking at
this overall unemployment rates at 4.6 percent. It's encouraging, but it's still not good enough.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yes, exactly. I mean, it was a great report. I mean, it shows that the economy still remains very
tethered to the pandemic. You know, the delta wave hit hard back beginning in July, August, and September, did a lot of damage, growth slowed, but the
delta wave has been fading over the last four to six weeks and the economy is rubbing right back up, and that's what we saw in today's jobs numbers.
But you're right, we've got a ways to go here. You know, 4.6 percent unemployment is still well above what I think people would consider to be
full employment. So a lot more work to do. Hopefully, this pandemic continues to wind down, and the economy continues to improve. It feels like
it should, but we've got to see that happen.
GIOKOS: Yes. I mean, in some of the sub-sectors within the report is talking about leisure doing better as well, which again, is encouraging. It
means people are feeling comfortable to spend, they're going out. And importantly, they're leaving their home markets, as well.
You know, the variant issue is obviously still a risk, an unknown risk. But right now, it seems that things are getting slowly back on track.
ZANDI: Yes, that's right. You know, one of the, I think, most impressive things about today's numbers, was the broad based increase in jobs across,
I think, every private sector industry. You mentioned leisure and hospitality, that's where obviously, we saw some really big gains. But you
know, construction, manufacturing, professional services, healthcare all added very significantly, so all very encouraging.
Really, the only part of the economy that didn't add to jobs was government, and that was public education. And that just goes to some
measurement issues related to the timing of schools reopening for in-person learning. So really good job growth, pretty much across the board.
GIOKOS: So let's talk about the politics right now with regards to a bipartisan infrastructure bill that's going to be really important to pump
even more money into the economy to focus on various sectors. It is going to cut across so many things. How important do you think this is, firstly,
to get a deal as quickly as possible and to put this money to work?
ZANDI: Yes. I think, it's important, you know, particularly about this time next year. I mean, this legislation hopefully gets passed in the next
week or two or three, then it becomes -- it starts to be implemented at the start of 2022, and then for it to really kick into gear, it'll take about
until this time next year, but the economy, I think we'll need it, and just about the time to get the economy across the finish line back to full
employment, you know, back to an unemployment rate that's in the mid threes.
The other important thing about this legislation, though, is about longer term economic growth. It's about you know, lifting productivity growth. The
increased spending on public infrastructure should make us all more productive and make our economy bigger, and the spending on very social
programs should help in terms of labor force participation.
We need to get people into the workforce and this will help do it by, you know, helping with people's childcare and elder care housing, things that
are -- you know, keeping people from taking jobs and that also improve long term economic growth.
So, it's not only about getting across the finish line here, back to full employment, it's about making sure that our economy is growing us more
strongly in the longer run.
GIOKOS: Absolutely. I want to talk about inflation risks here, because it seems that inflation is kind of rearing its head. And that, of course, is
problematic, because then it gives, you know, the Federal Reserve a big dilemma. Do you then start increasing rates, spook the markets? Do you tame
inflation? Or do you say, look, the dollar is the reserve currency of the world and it is going to hold its own, just like it did during the
financial crisis in 2008?
ZANDI: Yes, well, in my view, the weaker growth we were getting back in the fall is related to the delta wave of the pandemic. And the higher
inflation is also related to the delta wave of the pandemic. You know, delta hit the U.S. really hard, it hit the rest of the world, in many parts
of the world much harder, particularly in Asia, particularly in Southeast Asia where a lot of global supply chains begin.
And so because the supply chains have been so badly disrupted by the pandemic, and people, you know, Malaysian chip plants shut down, China
shuts down its ports because of its zero COVID policy. That has caused shortages for all kinds of products here, from vehicles to furniture, and
that sent prices higher.
So if that diagnosis is correct, as the delta wave winds down, we are already seeing stronger growth, I would expect supply chains to start
ironing themselves out and some of these shortages abating and inflationary pressure starting to come down as well.
It's not -- it's not going to be next month or next quarter, but over the next year, I would expect to see much more moderate inflation. But you're
right, if I'm wrong, and inflation remains very elevated that puts the Federal Reserve in a pretty difficult spot. Do I -- you know, do I keep
rates slow to try to keep the economy strong? Or do I raise rates to try to weigh against the inflation? It's a pretty tough spot to be in.
GIOKOS: So, another thing that you flagged and Moody's has flagged is you're worried about the housing markets, and it could be in for a hard
landing, explain how that thing changes the outlook and the prognosis of a stronger U.S. economy.
ZANDI: Yes, the housing market in the U.S. is kind of "Alice in Wonderland," lots of things that are just kind of really weird. I mean, for
example, we've got a very severe shortage of affordable housing, just not enough homes for all the households in America. And that's a real problem.
But the other thing that I'm referring to when I think about a hard landing in housing is about house prices. I think most Americans realize that
housing values have gone skyward. You know, take Phoenix -- Phoenix House prices are up by one-third over the past year. Can you imagine that? That
those prices are very vulnerable when interest rates rise.
So as the Fed -- the Federal Reserve normalizes interest rates, get you rates off to zero, lower balance, starts raising rates as the economy gets
back to normal, that's going to -- those higher mortgage rates are going to conflate with the higher house prices and make housing very unaffordable,
hurt demand, and we could see some real weakness in pricing, particularly in those markets that have really have gotten juiced up.
So that that's a -- you know, I don't think it's going to derail the economy going forward, but it is certainly a risk. And you know, we could
see some price declines in some markets that could be, you know, obviously painful for those homeowners in those markets.
GIOKOS: Yes. Something we've seen before, so a cautionary tale. Thank you very much, Mark Zandi, much appreciated for your time.
GIOKOS: All right, meanwhile, the U.S. is reopening, it is turning the tide on some of Corporate America's biggest pandemic winners. Shares in
Peloton which offers home workouts and equipment plunging. 30 percent this morning. This after its slashed a billion dollars off its full-year
forecast. Paul La Monica joins me now.
I think we've had this conversation sort of mid last year, you know everyone was trying to figure out how they would stay fit and healthy at
home. Now, everyone is heading back and there is no greater barometer it seems than Peloton and its share price.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, Peloton losing about a third of its value this morning, Eleni, it really was shocking how quickly this
fad seems to have fallen off really. I think a lot of people that had been working out at home because of COVID are starting to recognize that because
of vaccines, because of safety protocols, they can go back to the gym. And you had one of the publicly traded gym companies, Planet Fitness, report
some pretty solid results earlier this week and its stock was up on that.
So, I think it really does show that maybe people were tired of just working out at home and having some instructor constantly yelling at them
to go Peloton at them and they wanted a little bit more of a real-life social interaction.
GIOKOS: Yes, exactly. I mean, looking at the fact that they are coming under pressure, shocking the markets with posting a wider loss than
expected. You know, there was always a question about how they would value themselves. Some people say, it's just a spinning bike with an iPad on its
and then they kind of pivoted into other gym equipment, and then importantly, the subscription based, you know, theme was also quite a vital
part of their business model.
Is this a more realistic view of what Peloton can achieve in terms of growth rates?
LA MONICA: Yes, I think that Peloton, Eleni, is going to face the major challenge going forward of just trying to figure out what the right price
point for its equipment is. They did cut prices on some of the exercise bikes. They do have newer products like a treadmill, although there were
some issues regarding safety and the recall there.
You mentioned the app as well for people that maybe want to do workouts, but don't want to have pricy exercise equipment in their house. But the big
issue, we talk about people going back to the gym. Also, there is another problem for Peloton namely that it's not that difficult to make an exercise
bike or rowing machine. You know, it is not like Peloton inventing home workouts. So, they have to keep prices competitive because there are a lot
of other companies with cheaper equipment that works.
GIOKOS: Yes. Exactly. Or just disrupt the market. All right, Paul, great to see you. We didn't get to touch on Uber. That was also interesting
numbers coming out. They posted their first profit in a quarter since they launched 10 years ago. So interesting times there as well. Thank you so
Well, still to come on FIRST MOVE, an epicenter once again. Hear what region is looking at a difficult winter as COVID-19 cases reach record
highs. Details, up next.
GIOKOS: In Europe, a stark warning about the dangerous surge in COVID infections. The World Health Organization says the virus could kill half a
million people in Europe and Central Asia by February.
Already, some countries are reporting record numbers of new COVID cases. Nina dos Santos joins us now from London. Nina, tell me about the biggest
hotspots, the worst places right now that are emerging in Europe.
NINA DOS SANTOS, CNN CORRESPONDENT: Well, one of the countries that's extremely worried is Germany. Jens Spahn, the German Health Minister has
just emerged from a two-day meeting with various local health officials of the different parts of Germany to discuss the seriousness of the situation
in some parts of Germany where they're seeing rapidly rising levels of infections. It has already meant that people have had to be moved from one
part of the country because hospitals are starting to get overwhelmed to other parts of the country where there is lower infection rates that people
-- they are able to accommodate people in beds.
Germany, other countries like Slovakia, Greece, also seeing the spike of infections in the fourth wave that Germany has called massive. Countries
like Greece and Slovakia back up to record levels of over 6,000 infections for a few days in a row and this is what is really worrying people up in
Latvia has had to declare a state of emergency and that comes with all the COVID restrictions that you can imagine we've seen since the start of the
pandemic. Even The Netherlands is starting to consider reintroducing face masks and so on and so forth.
If you look at the numbers, they appear to be, according to the W.H.O. rising all over this region, and it is now responsible for 1.8 million new
cases of COVID just last week. That's about nearly 60 percent of the new world total of recent fresh infections of the coronavirus. So you can see
why authorities are starting to become concerned.
Why is this happening? Well, the W.H.O. says it's because not enough people are getting vaccinated. In some parts of Europe, the coverage isn't
complete, and also, people have been relaxing the rules, but they are spending an awful lot more time indoors these days, and that means that
there's no room for being complacent about preventing infection -- Eleni.
GIOKOS: Yes. Absolutely, Nina. I mean, look, you mentioned exactly what the big issue is here. It's vaccine hesitancy in some of these countries
that are experiencing a spike in cases. And I guess the question is, are we heading towards another unmanageable situation? And is there a concern
about new variants emerging? Because that has always been the risk.
DOS SANTOS: Well, yes, exactly. This has been the theory that epidemiologists have been talking about for the last couple of years. In
fact, since vaccines were in their infancy for COVID-19, even before they'd been rolled out, they said, it's imperative that everybody, or at least as
many people as possible get vaccinated against this virus, so it can't keep circulating in parts of the population that haven't yet been vaccinated to
then mutate and evade the current vaccines, re-infect people in this part of the world.
Yes, that's something obviously health authorities are very, very concerned about. They are still saying among these fresh infection waves, that the
delta variant appears to be a particularly dominant, but they are also worried about the potential for twin-demic as they put it, which is the flu
season cropping up right now at the same time as COVID-19 starts its fourth wave.
Last year, obviously, people were social distancing. They were wearing masks, so there wasn't this confluence of the two diseases at once, but
they are worried now with, of course, the relaxation of those rules that this could happen this year -- Eleni.
GIOKOS: Nina dos Santos, thank you very much for that update.
All right, we head to Mexico now where the rising cost of fuel is bringing hardship to gas consumers, and the President is taking controversial action
to try and control those prices. CNN's Rafael Romo has those details.
RAFAEL ROMO, CNN CORRESPONDENT (voice over): On a recent morning in Mexico City, people lined up for what has long been a monthly ritual, filling up
their LP gas tanks.
Like many Mexicans, Alejandra Navarrete complains about how expensive LP gas has become.
"It affects all of us Mexicans. LP gas is very expensive, but we still need to buy it," she says.
"I'm spending twice as much as before," this man says.
"How far is this going to go?" This woman wonders.
ROMO (on camera): According to figures by the Mexican government, LP gas increased by more than 20 percent From September of 2020 to the same month
this year. By comparison, inflation went up by six percent. In fact, analysts with the country's Central Bank say a typical price increase
observed in some products may be explained by global factors, including the price hike in this fuel.
ROMO (voice over): President Andres Manuel Lopez Obrador acknowledged over the summer, the price of LP gas has risen well above inflation, which
breaks a campaign promise. His solution has been controversial.
The President created Gas Bienestar or welfare gas, a new LP gas company under Pemex, Mexico's government run oil company.
He says, there are only five big companies that supply LP gas to almost half the country, companies that according to the President operate with
very high profit margins.
ROMO (voice over): But analysts say the problem is that lack of competition, but a high global demand that has caused prices to spike
ADRIAN CALCANEO, MIDSTREAM & NGL IHS MARKIT: All the increase is a consequence, are direct consequences of the global situation with supply
ROMO (voice over): At the end of August, the Mexican government announced with great fanfare, the first Gas Bienestar trucks had begun delivering the
fuel in a lower middle class neighborhood in Mexico City.
But as if to prove President Lopez Obrador wrong, LP gas sold by the government's company went up 11 percent in its first month of operation,
even higher than some private providers. And the problem is the ripple effect that high LP gas prices are having throughout the Mexican economy,
even in staples like tortillas.
Back at the LP gas tank exchange depot, Alejandra Navarrete hopes the President's idea can make a difference, but has some wait and see attitude.
"There is a lot of talk, but no results," she says. As she puts the full tank in her car to go back home, she says all she hopes is that next
month's trip for a refill won't leave her again with an empty pocket.
Rafael Romo CNN, Mexico City.
GIOKOS: More FIRST MOVE right after this break. Stay with us.
GIOKOS: Welcome back to FIRST MOVE. Now, air quality in New Delhi has dropped to hazardous levels on Friday morning after the first day of Diwali
celebrations. The Hindu Festival of Lights as Kristie Lu Stout reports, India is making up for a quiet Festival in 2020.
KRISTIE LU STOUT, CNN CORRESPONDENT (voice over): Sounds a praying and chanting as India celebrates Diwali, the Festival of Lights amid the
UNIDENTIFIED MALE: This Diwali, as you say is much joyous as it used to be pre-COVID. Last year, we could not celebrate Diwali because of the COVID.
But this year, again, the crowd is back on the street. We are buying crackers for our kids.
We do hope to enjoy the festival as we used to enjoy pre-COVID.
STOUT (voice over): After a quiet Diwali in 2020, because of the COVID-19 pandemic, this year, Indians are celebrating in full force, undeterred by
the virus and the deadly second wave that gripped the country earlier this year. Markets were crowded as people stepped out to buy fireworks, flowers,
and new clothes ahead of the festival.
But with poor air quality in the capital, New Delhi and elsewhere, some states and territories banned firecrackers to curb air pollution.
And families marked the day by lighting earthen lamps and making colorful rangolis gathering together after being apart due to the pandemic.
In Kolkata, the streets were lit up with colored lights as Hindu celebrated both Diwali and Kali Puja marking the goddess Kali's victory over evil.
STOUT (voice over): And in Punjab, people gathered at the Illuminated Golden Temple in Amritsar to pray and watch the fireworks.
UNIDENTIFIED FEMALE (through translator): I am feeling very happy after witnessing the fireworks here on Diwali. It's a heavenly view. I pray that
peace should prevail in the world.
STOUT (voice over): Indian Prime Minister Narendra Modi celebrating Diwali with troops near the country's border in Kashmir, paying tribute to fallen
And although the shadow of the coronavirus pandemic has not yet lifted, Indians are praying this Diwali for better times ahead.
UNIDENTIFIED FEMALE (through translator): It feels very good because people have started stepping out. People who were scared earlier due to
corona have stepped out now for shopping. It is very good. This Diwali is much better than last year.
STOUT (voice over): Kristie Lu Stout, CNN.
GIOKOS: And finally on FIRST MOVE, fancy owning an iconic piece of Los Vegas, that is, if you have deep pocks. MGM Resorts is putting the Mirage
Resorts and Casino up for sale after owning it for 21 years. The company has about a dozen properties in the city and said we have enough of Los
Vegas. No idea yet on any buyer or price.
That's it for the show. I'm Eleni Giokos in Dubai. Becky Anderson is up next.