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First Move with Julia Chatterley

Omicron Cases In England; At-Home Test Accuracy; Pro-Democracy Media Outlet Shut Down In Hong Kong; Remembering Desmond Tutu; Aired 9-9:30a ET

Aired December 29, 2021 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:00]

ALISON KOSIK, ANCHOR, CNN FIRST MOVE: Live from New York, I'm Alison Kosik, in for Julia Chatterley. This is FIRST MOVE and here's your "Need to Know".

Obviously milder, Boris Johnson defends plans to keep England opened despite record Omicron cases. Hong Kong crackdown, a pro-democracy media

outlet is shut down. A pop star among those arrested. And remembering Desmond Tutu, memorial service set to pay tribute to the late Arch Bishop.

It's Wednesday, let's "Make a Move". A warm welcome to a special 30-minute edition of FIRST MOVE, let's begin with a check of the global markets. U.S.

stocks are on target for a flat start to the trading session. The S&P remains close to records after pulling back a bit in the previous session

driven by weakness in tech.

Europe is trading mixed. U.K. stocks are up and running for the first time this week and hitting highs not seen since the beginning of the pandemic.

In Asia, Chinese shares fell almost 1 percent amid concern over the economic effects of COVID lockdowns. The Hang Seng fell for the first time

in five sessions.

Global investors weighing a number of year-end challenges including rising Omicron caseloads which will surely impact economic growth; Omicron is once

again our main driver today. The Omicron driven surge is continuing to cause record COVID infections in parts of Europe; France, Italy, Greece,

Portugal and the U.K. all seeing infections rise to new highs. The countries shown in red on this map may - on this map have seen cases rise

by more than 50 percent compared with last week.

Let's go to Melissa Bell, she is in Paris for us. Melissa, you know it is stunning to see the rise in the number of infections but what about the

rise in hospitalizations? Are you - what are you hearing about that?

MELISSA BELL, CNN PARIS CORRESPONDENT: Well for the time being it does appear that when it comes to Omicron fewer people are ending up in

hospital, fewer people are ending up in ICU and yet the World Health Organization has been warning that as a result of the shear rise in the

number of caseload there is going to be tremendous strain on European healthcare system.

So that once again that is the problem the governments are facing hence the restrictions that are being introduced. But just a word on those rising

record numbers, you mentioned France there a moment ago, we've just heard from France's Health Minister the record that was set yesterday, 179,000,

now broken once again; more than 208,000 new cases in a 24-hour period. It's a record. It was another record over the weekend; just 100,000 on

Saturday. That tells you how quickly these numbers are rising shattering records day after day.

Now of course that is going to lead to extra pressure on healthcare systems another part of the world where the number of cases has been rising

staggeringly seeing record rises since the pandemic began (inaudible) have a listen to what Boris Johnson had to say.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, BRITISH PRIME MINISTER: The Omicron variant continues to cause real problems. You're seeing cases rising in hospitals. But it is

obviously milder than the Delta variant. And we're able to proceed in the way that we are but that's one reason and one reason only why we're able to

do that. And that's been such a huge proportion of the British public that have come forward to get vaccinated. And particularly to get boosted.

(END VIDEO CLIP)

BELL: Now of course that will make a difference as well as populations get more vaccinations done here in France. On Monday as a result of these

extraordinary rises, Alison, they announced that they were shortening the length of time between the second dose and the booster to try and get as

many people boosted as they could to face this latest wave.

But take the example of France, I mentioned that massive rise, that new record set once again here today. The French Health Minister, who's just

been speaking in the National Assembly, made the point that here the Delta variant hasn't finished causing the ravages that it's causing. Here it

remains the majority virus that we're seeing in new caseloads and it is continuing to send people to hospital.

Not in the same proportion as we seen in previous waves but still healthcare systems across Europe likely to come under greater strain. And

again that according to the World Health Organization. Alison.

KOSIK: Melissa, what's the sentiment you're hearing in the U.K., you know, not having these restrictions put in-place as the case numbers rise?

BELL: Well they really are favoring the idea of increased vaccinations and we have seen that surge in the United Kingdom and in England in particular

these last couple of weeks with the government putting out those figures, congratulating people on going out to get themselves vaccinated,

congratulating them on taking the step of getting boosted if they've been vaccinated in the past.

[09:05:11]

But elsewhere in Europe really what you're seeing are added restrictions as well. Not just in terms of travel from one European country to another. For

instance, Austria restricting those who can come in or the terms under which they can come in to the country to try to limit that Omicron spread.

But other steps that have been taken, for instance, here in France we saw the announcement on Monday the sizes of gatherings, once again, being

restricted, people being encouraged, once again, to work from home.

And it does feel like the more time passes the less - the few freedoms we find ourselves having in Europe, once again, as we face these huge surging

numbers. And again this strain on healthcare systems that nearly two years into this pandemic are frankly in no fit state to bear them. Alison.

KOSIK: OK, Melissa Bell, live for us in Paris. Thanks very much.

Officials in China say COVID outbreaks in the city of Xi'An accounts for almost all locally transmitted cases in the country, 152 infections were

reported Wednesday with only one found outside Xi'An. The city of 13 million has been under a strict lockdown for six days.

Steven Jiang reports.

STEVEN JIANG, CNN BEIJING BUREAU CHIEF: The situation in Xi'An is starting to feel like a deja vu of what we saw in Wuhan some two years ago with a

growing amount of frustration or even anger being vented online by people in Xi'An who say they now have difficulties accessing to food items. That

is in sharp contrast to officials and state media portrayal of orderly deliveries of daily necessity items by the government to households

throughout a city.

Now things have been made worse by tightening regulations because last week each household was still allowed to send out one representative every other

day to do grocery shopping, that quote/unquote "privilege" has been suspended starting this week as the government there tries to further

restrict the movement of people to curve the community spread of the virus because of the Beijing leadership's insistence on its zero COVID policy

especially ahead of the Beijing Winter Olympics.

That's also why authorities in Xi'An are doubling down on their strategy of mass testing, mass quarantine and now harsher lockdown measures. Now the

numbers recorded in the city still pretty grim by Chinese standard, 151 new local cased recorded on Tuesday. But the government there says this is only

to be expected as they keep testing the entire population of 13 million residents. They just started the - a sixth round of citywide testing on

Wednesday.

But they say with the strict lockdown firmly in-place these numbers will stabilize soon and start decreasing with the whole outbreak maybe ending in

a month or so. But that is cult (ph) comfort for millions of residents trying to survive now under increasingly harsh conditions.

Steven Jiang, CNN Beijing.

KOSIK: In the U.S., at-home, antigen tests may be less effective at detecting Omicron than other COVID variants. That's according to the U.S.

Food and Drug Administration. It says studies based on patient samples are needed. It's preliminary findings are based on lab analyses. Abbott, which

makes a popular at-home test says it has seen no change in performance.

Elizabeth Cohen joins me now. Great to see you, Elizabeth. You know it's already incredibly difficult just to get your hands on a test to get tested

for COVID. Now we're hearing the rapid tests may not be as accurate as we like. So should we just skip the rapid test all together and go for the PCR

test that takes a little longer for those results to get back?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know it really depends on what circumstance you're in, how quickly you need this

information? Why you're getting tested? And also what's available to you because different people have different things available to them.

The bottom line here is, and Tony Fauci is going to tell us this in a minute when we listen to him, is that do these - are these perfect,

absolutely not. Are they still useful, yes. Let's take a listen to Dr. Anthony Fauci.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, WHITE HOUSE CHIEF MEDICAL ADVISOR: What the FDA is saying today is that when you look at Omicron and its ability to detect

Omicron some of the tests have a diminution further of the sensitivity. But they still say the tests are useful and should be used.

(END VIDEO CLIP)

COHEN: All right so we reached out to Abbott Labs, they make the rapid test that's - the antigen test that's used very widely in the United States.

This is what they had to say. They say "We've conducted lab analyses and tests on the Omicron variant from live virus, including from the first U.S.

Omicron case, and BinaxNOW detected the virus in all tests we performed at equivalent sensitivity as other variants."

And so that makes you wonder, all right, so with other variants in general how reliable is this test?

[09:10:00]

So here's what they CDC has to say. But first let me say this, if the test says that you have COVID then you almost certainly have COVID. It's

excellent in that regard. If it says you have COVID then almost for sure you have COVID. If it says that you don't have COVID that's where it gets

mushy.

So this is what the CDC says, If you have COVID-19, let's say that we know that you have COVID-19, and you have symptoms the test is going to be wrong

about 35 percent of the time; 35 percent of the time it's going to tell you you don't have COVID when you actually do. If you have COVID-19 and you're

asymptomatic, you feel totally fine, that test is going to be wrong about 64 percent of the time. About 64 percent of the time it's going to give you

a false negative. It's going to tell you you're negative even though you're positive.

Now there's lots of nuances here, as you can imagine Alison, lots to sort of explore and expand on here. But the bottom-line is, if you take this

test and it tells you you have COVID you almost certainly have COVID. If it tells you that you don't have COVID and you're going to let's say visit

someone who's immune compromised you might want to wait and retake it because it is not - all those negative results are not always reliable.

Alison.

KOSIK: Yes, I'm hearing second tests may be the way to go at this point. Elizabeth Cohen, thanks so much for your expertise.

In Hong Kong a worrying development for press freedom. At least seven people associated with pro-democracy media outlet "Stand News" have been

arrested after National Security Police raided its office. The pop star, Denise Ho, was among the people arrested.

Ivan Watson is in Hong Kong for us. So, Ivan, this is yet another media outlet in Hong Kong being targeted by authorities. What's behind it?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it's one of the last remaining independent media outlets and it's now been silenced because

hours after the raids and the arrests "Stand News" says it is shutting down mirroring the pattern that we saw earlier this year with the biggest

circulation tabloid newspaper in the city, "Apple Daily", which got raided, it's assets seized, it's publisher and editors put in jail and then it shut

down.

Among the people who were detained today, as you mentioned, was Denise Ho. This pop singer who has been a proud supporter of the pro-democracy

protests of 2014 and of 2019. The Hong Kong Journalist Association, whose leader is basically also an editor at "Stand News" he was briefly detained

and then released. Putting out a statement saying, I'm free for now and thanks for the support.

But the Hong Kong Journalist Association put out this statement expressing concern that quote, "The police have repeatedly arrested senior members of

the media and search the offices of news organizations containing large quantities of journalistic materials within a year. And it urges the

government to protect press freedom."

Now the number two official here in Hong Kong had some pretty harsh words for the suspects who have been detained and they have not been through

court yet. He called them evil, take a listen.

(BEGIN VIDEO CLIP)

JOHN LEE, HONG KONG CHIEF SECRETARY: Anybody who attempts to make use of media work as a tool to pursue their political purpose or other interests

(inaudible) the law particularly offenses that endanger national security. They are the evil elements that damage press freedom.

(END VIDEO CLIP)

WATSON: Now what's the broader context here? Well there used to be a lot of press freedoms and political freedoms in this city. But since the 2019

protests against the government that turned into often violent riots there has been a significant crack down. In the last year and a half dozens of

opposition politicians are in jail or have fled into exile. The street protests, the peaceful ones that used to be part of the city's culture,

they've been all but banned.

Just in the last week three statutes that used to stand on university campuses here that commemorated the Tiananmen Square Massacre of 1989, they

were all removed including one at Hong Kong University that has stood for more than 20-years, under cover of darkness. And then we have the raids

today in the kind of sleepy days between the Christmas and New Year holidays. It all adds up to a city being far less free than it used to be.

Just before Christmas the Chinese leader Xi Jinping met with the Hong Kong Chief Executive, Carrie Lam, and he congratulated her on, as he put it,

bringing order back to this city.

[09:15:01]

Back to you.

KOSIK: That is certainly a disturbing trend we are seeing there. Ivan Watson, thanks so much. Coming up after the break, honoring a national

icon. A memorial service for Arch Bishop Desmond Tutu will begin in the next two hours as we get new details about his funeral this weekend.

(COMMERCIAL BREAK)

KOSIK: And more stories we're following today; U.S. and Russian officials are set to hold security talks on January 10th. Tensions between Washington

and Moscow have been rising after Russia moved thousands of troops to its border with Ukraine. The Kremlin says 10,000 have now returned to their

permanent bases.

In Bolivia dozens left stranded by massive flooding. They have been airlifted to safety. Heavy downpours across the country have left at least

13 people dead in the past month. A defense official described the situation as critical with rivers in many areas spilling over their banks.

All right in a couple hours from now a memorial service will be held for South African Arch Bishop Desmond Tutu. The much loved anti-apartheid

activist died over the weekend at the age of 90. He will lie in state until his funeral on New Year's Day to allow as many people as possible to pay

their respects.

Let's bring in CNN's Larry Madowo, he will be covering the funeral for CNN and Larry I noticed that two of Desmond Tutu's foundations, they actually

released this statement saying his wish was for a simple funeral.

LARRY MADOWO, CNN CORRESPONDENT: That's right, Alison, they say he had very specific instructions about his funeral. He did not want any lavish or

ostentatious spending. At his funeral he asked that only a bouquet of carnations from his family be the only flowers at his funeral. And that if

anybody else wanted to give flowers they should donate to the Tutu Legacy Foundation instead.

He will be cremated in a private ceremony and then ashes will be interred at St. Joseph's Cathedral in Cape Town. That is where he preached for

decades. And during the apartheid years, when it was in the struggle against apartheid, this has been known as the people's cathedral and that

is where his body will also lie in state on Thursday and Friday to allow as many people as possible to pay their respects.

There are also memorials being held all around South Africa in Pretoria, in Johannesburg, in other parts of the country to allow people to pay their

respects in local parishes and communities instead of traveling to Cape Town. Because the actually funeral service on New Year's Day will only have

100 people. So close friends, family and the clergy in line with current regulations by the South African government around COVID-19.

KOSIK: OK, Larry Madowo, thanks very much.

[09:20:00]

And we'll have more FIRST MOVE after the break.

(COMMERCIAL BREAK)

KOSIK: Welcome back to FIRST MOVE, I'm Alison Kosik. U.S. stocks now on- track for a modestly higher open this Wednesday. Just three more trading sessions left in 2021. And all the major averages are holding on to strong

gains for the year with the broader market S&P 500 firmly in the lead, as you can see there.

Powerful fiscal and monetary support has helped stocks advance throughout the year. A strengthening U.S. economy has helped the bullish case as well,

2022 could be a different story though as the Fed sets the stage for rate hikes to tame inflation. One major wild card remains, the economic effects

of the Omicron variant.

Joining us with his thoughts on what's ahead in the New Year, John Petrides, the Portfolio Manager at Tocqueville Asset Management. John,

great to see you.

JOHN PETRIDES; PORTFOLIO MANAGER, TOCQUEVILLE ASSET MANAGEMENT: Thanks for having me on.

KOSIK: Glad to have you on. So let's start with this, what the heck is behind the stock surge? There's a lot going on right now especially with

the Omicron variant. The question is can this - can this hold - can the momentum hold into 2022? The reality is the Omicron threat is disrupting

the economy, you know, from travel to restaurants.

PETRIDES: Well I think when you look back at 2021 it really was the first nine months of the year were all about the recovery rally that the vaccine

was being administered and distributed and that we had a reopening trade within the United States and globally and that company corporate earnings

fundamentals were quite strong. I mean I think on average the companies in the S&P 500, 80 percent of them beat Wall Street analyst's expectations

every quarter this year.

And that's amazing given the environment that we're in. And I think that all lasted up until about the end of September and then we've had a really

a strong patch of choppiness in terms of volatility where we've had big rallies followed by big sell-offs. And I think that's going to be the trend

going into 2022 as we're dealing with the Fed taking the punchbowl away from a monetary policy standpoint, inflation rising, which is going to most

likely impact company profit margins.

And then of course you have the uncertainty of, within the U.S., the mid- term elections in November at the end of the year. So I would expect more volatility in 2022 for at least domestic stocks.

KOSIK: OK so with a potentially volatile 2022 tell us where investors can hide out? Where is the best safe haven?

PETRIDES: Yes, well the irony is that despite I think what will be potential volatility in the U.S. stock market, the bond market really looks

treacherous to be (ph) because you have the Fed already saying that they're going to raise rates three times in 2022 and yet the U.S. 10-year treasury,

if you look at long dated bonds, are really not moving at all. The U.S. 10- year's about 1.45, 1.5 percent.

And if you have, right now we have a 5, 6 percent annualized rate of inflation that basically guarantees every bond that you buy you're locking

in a negative rate of return. So I think - and also to couple that you have about $4.5 trillion of cash sitting on the sidelines in money market funds.

So I do think that domestic stocks will still outperform particularly bonds and cash.

[09:25:00]

But it's more of a buy (ph) mentality for stocks. Now specifically I think income oriented and yield plays are the great - are a great place to be

because investors cannot get any income in the fixed income markets. So despite having a historic year in the REIT market I think - still think

real estate investment trusts are a great place to be for '22.

KOSIK: OK. Quickly, what is your view, you know, how long inflation is going to stick around?

PETRIDES: Yes, my team specifically at Tocqueville thinks that inflation will moderate around 3 percent over time. We just have to get through a lot

of supply chain issues. If the Chinese economy does continue to slow that should take some of the momentum out of the energy market, maybe out of the

commodity market. So, you know, we think that we have to get through the supply chain lock up which is - which is forcing companies to raise prices

faster and get through some of these transitional issues on the commodity side.

So by the end of the year we should still see - we should see inflation come off. But it's going to be higher than the Fed's initial target of 2 to

2.5 percent, that's for sure.

KOSIK: OK. Quickly, what are the wild cards you see for 2022?

PETRIDES: So a wild card for '22 I think is going to be how, from a macro standpoint, how is the Fed going to react around the mid-term election. So

the Fed has always tried to stay independent during - going into a election year. And the Fed is going to raise interest rates three times, when are

they going to do it? Is it going to be in March when they're going to finish the Taper Program?

June, OK fine, but if you do it in the September meeting that's right on the eve of the election and that leaves December. So I think the outcome of

the election and how the Fed navigates around that is going to be telling for investments as least from a macro standpoint.

KOSIK: The theme buckle up, let's get ready for 2022. Thank you, John Petrides, --

(CROSSTALK)

PETRIDES: That's right.

KOSIK: -- for your great analysis. You are the Portfolio Manager at Tocqueville Asset Management.

And finally on FIRST MOVE, Egyptian scientists are peeling back another layer of history with new information on Pharaoh Amanhotop I. Using non-

invasive digital scanning they've been able to get a glimpse beneath the bandages of the 3,500-year old mummy. So fragile that experts have been

keen to avoid unwrapping it.

They found no injuries pointing to how the Pharaoh died but hieroglyphics suggest the mummy may have been repaired in ancient times by priests and

embalmers after it was damaged by tomb raiders.

That's water cooler talk right there. That's it for this show. I'm Alison Kosik, go ahead and follow me on Instagram and Twitter @AlisonKosik.

GENERATION NEXT is next.

(COMMERCIAL BREAK)

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END