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First Move with Julia Chatterley
Beijing 2022 Winter Olympics Officially Begin; Kremlin Calls Putin- Xi Meeting "Warm, Constructive"; January Jolt: Massive Upside Surprise for U.S. Jobs Growth; Olympics Begin Amid Controversy, Boycotts, COVID Issues; Amazon Profits Doubled During Q4; Bridge may be Dismantled for Jeff Bezos' Superyacht; Innovation Comes to Japan's Vending Machines. Aired 9-10a ET
Aired February 04, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:40]
JULIA CHATTERLEY, CNNI ANCHOR: Live from New York, I'm Julia Chatterley. This is "FIRST MOVE." And here's your need to know.
Beijing's bonanza. The Olympic games get underway.
Friends and foes. Putin and Xi vow to deepen their relationship amid pressure from the west.
And jobs jolt. The U.S. economy shrugs off Omicron as employment soars.
It's Friday. Let's make a move.
(MUSIC PLAYING)
A warm welcome to all our FIRST MOVErs around the globe for a firework filled Friday as the Winter Olympic Games officially kicks off in Beijing.
A spectacle of multicultural pageantry, strict COVID security and political summitry.
Fireworks in tech land too after a medal worthy earnings performance by Amazon and more explosions.
Once again, the latest U.S. jobs report of Olympic importance too. And a surprise gold medal performance there, I think, a massive 467,000 jobs were
added back net to the economy last month. More than twice what most analysts were expecting. Some, in fact, were bracing for the first net loss
of jobs in two years as COVID cases surged to all-time highs during the collection, the data collection period. Job gains were revised
significantly higher, too, for the past two months. And wage growth ease.
We'll discuss all the details with former New York Fed President Bill Dudley later in the show.
U.S. futures sagging however as investors consider the risk for even swifter Fed monetary policy tightening. Futures actually had been higher.
Helped along by strong earnings from Amazon. That stock up 11 percent premarket.
And you can see the Nasdaq relatively unchanged, so bucking the broader trend lower. Meta's formerly known as Facebook's 26 percent stock price
collapse on Thursday still reverberating through the tech world, too.
For context, these are the moves the Nasdaq this week up more than 3 percent Monday, down 3.5 percent Thursday and net down what 11 percent year
to date.
I tell you what, there is nothing healthy about the Olympic sized tech stock and market moves that we are seeing.
Let's get to the drivers. Much to discuss as always. And let the games begin.
Beijing has fired the starting gun on the 2022 Winter Olympics with a spectacular light-filled opening ceremony. Now 3,000 athletes are literally
off to the races competing in 109 different events over the next two weeks. Those Olympic rings particularly fitting this time around, too. The event
takes place as we've discussed many times within a so-called closed loop COVID bubble.
Selina Wang deserves a gold medal of her own for making it inside that loop. And she joins us live.
Selina, great to have you with us.
Politics aside. I love the Olympic opening ceremonies, a collision I think of culture, a celebration of huge sporting talent, which ultimately is what
the Olympics is about.
Selina, walk us through this opening ceremony. What did we see?
SELINA WANG, CNN CORRESPONDENT: Well, Julia, it was another visually stunning opening ceremony. There was the use of elaborate technology, but,
Julia, it was more subdued, simpler than the games back in 2008. It used 3,000 performers versus the 15,000, 14 years ago. Back then, there was this
immense pressure for China to pull off these extravagant games, covering thousands of years of Chinese history over 4 hours. But this time China has
less to prove.
Back then it was about cementing China as an emerging global power on the world stage. The country now is more confident. And that opening ceremony
as well as the Olympics in general is about using that moment for China to show the world a wealthy and powerful China and one that under Xi Jinping
is more authoritarian and increasingly at odds with the west. And just so many contrasts to the 2008 Games when there was George W. Bush sitting
shoulder to shoulder with Chinese leaders. This time around a very different guest of honor, Vladimir Putin. Julia?
[09:05:03]
CHATTERLEY: Yeah. And I have to say, I mean, I was looking at what the motto of the 2022 Games is. Together for a shared future. But if the
reality is looked at closely for the, what, 21 I believe leaders that will be hosted at these games they do preside over nondemocratic regimes, and
that's the reality.
WANG: Yeah, exactly, Julia. I mean, you look at that list it's full of many autocratic leaders, strong men according to Freedom House. Most of them,
the vast majority are from countries considered not free or just partly free. In addition to Putin, you had the leaders of Egypt, Turkmenistan,
Tajikistan, the Saudi prince, Mohammed bin Salman.
So, a very different set of friends than what we had seen before and that's as you had the U.S. and some of its allies including the UK, Australia and
Canada staging a diplomatic boycott of these games as a statement against allegations of genocide in China's Xinjiang region. Allegations that China
has denied.
Now, back in 2008, again drawing this comparison at that point, China was trying to meet the world's terms. But now for 2022, the message is the
world needs to meet China's terms. Julia?
CHATTERLEY: Yes. And very quickly Selina, we could hear some, what sounded like drums in the background and I think now we can hear a helicopter. Is
that what I'm hearing or was that fireworks?
WANG: Not drums. It was actually somebody rolling a very large suitcase across. There's been a lot of volunteers. There's a few camera crews around
us. There's been a lot of activity. I mean, here inside the closed loop we are truly confined. And we've seen staff members just trying to get as
close to the action as possible lined up over there back behind me trying to get photos and videos of those fireworks.
So, a lot of activity here. But again, we're completely separate from the general population. Just credentialed Olympic participants in this area and
we're totally fenced off with barricades. There's no leaving this closed loop, Julia.
CHATTERLEY: No. I mean, I'm obviously going to go and get a hearing test after this show. Drums, fireworks --
WANG: It was really loud. I don't blame you for taking through drums.
CHATTERLEY: Luggage being rolled.
Selina Wang, thank you for that.
All right, let's move on.
Warm, constructive and substantive. That's what the Kremlin said after Russian President Vladimir Putin held a meeting with Chinese President Xi
Jinping in Beijing ahead of that Olympic opening ceremony.
Nic Robertson is live in Moscow for more with us.
Nic, great to have you with us.
Clearly, natural compliments between these two nations in their view, their hostility towards liberal democracies, their current tensions with the
United States and more broadly in the west, I think. But there's also economic and other strategic interests between the two. And I think we're
already seeing those strengthened at this moment.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah, we are. And the Kremlin foreshadowed that. They said between maybe 14, 15 business deals
would be tied up. And Rosneft has seem one of those deals landed its lap. Perhaps no surprise there.
The boss of Rosneft, Igor Sechin, traveled with President Putin to China. And that deal worth -- well, is 100 million tons of oil to be supplied by
that big state, Russian state company to the Chinese over the next 10 years. You'll know the figures better than me. But that's got to be $50
billion plus.
And this is what you know President Putin is looking for. He's looking for some outlet to sell his products because he knows that if he invades
Ukraine or causes sanctions to be triggered on him by the west, we're told those sanctions will be huge, they'll be painful. So whatever deals he can
carve out with China, you know, are going to be to his benefit.
China can't offset everything that would be coming his way. And we think back to 2014 when he invaded Crimea, and then he turned to China then for a
big gas deal. He got a big gas deal, $400 billion worth of gas sold to China.
But you know what? President Xi knew President Putin was in a corner, and he got good terms. There were tough, long negotiations and the real details
were never made public. So, it's kind of a similar scenario right now.
But what they're projecting is that this partnership can go forward, can be beneficial to them. And I think look at all those - all those nations
leaders who are present. We're seeing the world sort of become a little bit more polar. And they're possibly going to make it, you know, a fiscal
polarity as well.
You know, they're talking about joining up in hi-tech and green tech in the technologies of the future. That's big help that Russia needs. It's where
China is headed. At the moment, but if they you know can brand themselves together, withstand sanctions of both nations get from the United States,
you know, there's an avenue for them. And that's -- I think that's a big thing for Putin, big thing to be on the stage with Xi, big thing for both
of them to project at this time.
CHATTERLEY: Yeah, the optics as vital as anything else.
Nic Robertson, great to have you with us. Thank you for that.
[09:10:00]
China has an ally in Russia as the 2022 Winter Olympic Games begin. But with tensions still high between the west and Russia over Ukraine, China
could be Russia's only economic option if it were to be cut off from the west perhaps.
Anna Stewart joins me now.
Anna, it's interesting and it ties precisely to what Nic was saying there. Putin may come bearing the gifts of greater gas contracts to China. But how
easy is it in practice really for the Russian to reduce their reliance on European buys, for example?
ANNA STEWART, CNN REPORTER: Yeah. There's just been so much conversation, hasn't there, about an idea that if Russia can export gas to Europe, it
could just simply redirect it to China. And it's not that easy.
First of all, I think we should point out that the pivot from Russia towards China has been going on after some years and with some degree of
success, I have to say. We can bring up a graphic.
China is Russia's biggest trading partner. It cans about 16 percent of its trade value. Last year, bilateral trade reached $146 billion, which is
actually a huge increase from the year before.
Now, we'll get onto the other way around because actually Russia is a tiny trading partner really when it comes to China. Energy, biggest revenue for
Russia, no surprises that we're seeing that Rosneft deal being signed today. It accounts for maybe 1.5 to 2 percent of China's overall oil needs
on an annual basis. But gas, as Nic was saying there, is also a big deal as well.
And it's interesting to see what's already in place. There is a pipeline that we can show you, the power of Siberia that runs from Russia to China.
But currently, it only exports around 10 billion cubic meters a year, just 10. And compared to Europe that's 175 a year.
So, you can just see the difference there. There's an issue with capacity. There's a dotted line you can see on your screen right now. The power of
Siberia too. That's really a pipe dream of Russia. This is potentially a pipeline that would run through the country, through Mongolia and into
China. It would definitely help to ease Russia's reliance on Europe, but it would take years. It would take a lot of investment as with increasing LNG
exports outwards all of their plans. And the issue is, if they're faced with sanctions, that investment, those years is probably not going to
happen.
CHATTERLEY: Yeah. I mean, gosh, the number of years, the scale of investment, even geography, the size of a pipeline that we're talking about
here matters. But, hey, when you're under pressure in diplomacy and images like that and the discussion about that matters but the contact matters
more.
Anna, great job. Thank you so much for that.
All right. Now to the sports from ice hockey to figure skating. Athletes from around the world have begun their quest for gold and glory.
Coy Wire joins us from Beijing.
Coy, always fantastic to have you on the show.
Figure skating actually one of my favorites, and free scale skiing -- freestyle skiing, my apologies. But let's talk about what we're seeing day
one, figure skating.
COY WIRE, CNN WORLD SPORT ANCHOR: Yeah. Julia, good to see you.
Figure skaters are the most impressive athletes to me on this planet. They're so graceful, their rhythm, their timing, their power, their
flexibility, all combined just make for some really incredible stuff. The short program here at the Olympics saw it earlier today, the first part of
it at least.
And Nathan Chen of Team USA is one of the favorites to win gold. The short program had been his kryptonite, but Superman is back. Incredible
performance by Chen. He recorded his personal best in the short program, second only to Yuzuru Hanyu's world record. He set the place on fire. It
vaulted Team USA into first place currently in the team competition.
Now, Japan's Shoma Uno is also someone to watch, caught my eye during the men's short program at the team event, finishing second. He won silver in
Pyeongchang right behind this fellow countrymen, and two-time Olympic champ Yuzuru Hanyu.
Finally, Julia, we have to talk about host nation China currently in third just behind the Russian Olympic committee. Thanks to a world record
performance in the pairs part of the program.
26-year-old Sui Wenjing and 29-year-old Han Cong skating to the music from "Mission Impossible." They scored 82.83. They've been skating together
since 2007. When they were 11 and 14 years old, Julia, they won silver in Pyeongchang in pairs. But this - this moment, they will remember forever.
Breaking a world record here in Japan - in Beijing in the host nation China.
CHATTERLEY: Yeah. I mean, what a performance like that in front of the home crowd even if it's a dramatically reduced crowd. I'm going to get back and
watch that performance again. Phenomenal.
Coy, I just wanted to get your take for all the concern and the criticism in what we've seen in terms of images of the control measures that the
authorities there have been put into place in the end these measures are to try and protect people and to stop them from getting sick. And I just want
to get your take and your experiences from being there about what people are experiencing and the efforts people are going through to keep you safe.
WIRE: Yeah, look, it's one of the most protected places on the planet right now.
[09:15:02]
I mean, this closed loop system is absolutely going to work. In the end, the COVID factor has been the biggest cloud looming over these athlete's
heads. You know they haven't been able to train as usual, even just getting here to Beijing. Some of them have been stuck away from their home nations
for months because they didn't want to risk getting COVID ahead of the games.
I spoke to one athlete here who chose not to walk in the opening ceremony because of the closed proximity to other athletes. So, certainly, something
they're thinking about. But inside this closed loop, Julia, they should be about as protected as you can be.
Organizers have taken precautions very seriously. You know, they've said all along that they weren't trying to prevent COVID from getting in. They
kind of expected that, but their goal is to stop the spread of the virus once everyone is inside the closed loop. And from what I've seen, and the
precautions that are being taken and seriously as everyone is respecting those protocols, they should be able to pull that off pretty effectively,
Julia.
CHATTERLEY: Yeah. Politics, noise, geopolitics aside. In the end, we just want these athletes to be able to do their best and to stay healthy.
Coy, great to have you with us. Stay healthy, too, please.
WIRE: Thank you.
CHATTERLEY: Coy Wire there from Beijing.
OK. Let me bring you up to speed with some of the other stories making headlines around the world.
A spokesman for the British prime minister says Boris Johnson has not lost control of Downing Street after several of his aides resigned. On Friday, a
special advisor became the fifth person to quit in the past 24 hours. It comes with the prime minister under criticism over a series of scandals
including lockdown defying parties at Downing Street.
U.S. President Joe Biden watched in real-time Wednesday as U.S. commandos carried out an operation in Northwest Syria that led to the death of the
leader of ISIS. During the raid, the Biden administration says, Abu Ibrahim al-Hashimi al-Qurayshi detonated a bomb killing himself and his family.
Qurayshi succeeded ISIS founder Abu Bakr al-Baghdadi who died in a similar U.S. raid in 2019.
NATO's secretary-general says he will become the governor of Norway's Central Bank this December after he leaves his post at NATO. Jen
Stoltenberg has been the alliance's figure head since 2014. His term expires in October. The secretary-general says he will stay focused on his
NATO duties until then.
Still to come here on "FIRST MOVE."
January's jobs jump. The former president of the New York Fed Bill Dudley on that Omicron resistant job surge.
And a bridge too far, the Amazonian proportions of Jeff Bezos' yacht threaten to cause a prime delivery delay.
That's all coming up. Stay with us.
(COMMERCIAL BREAK)
[09:20:15]
CHATTERLEY: Welcome back to "FIRST MOVE."
And global investors surprised, I think, after a U.S. jobs jolt of pretty monumental proportions just released numbers showing U.S. economy adding an
extremely strong net 467,000 jobs last month. To put things into perspective, many were bracing for a significant job loss for the month.
The fear was that Omicron pressures would affect hiring. In fact, we saw strong job gains in leisure, and hospitality, and also retail.
Futures turning lower as a result. So, good news is bad news. Remember good news on the economy is not necessarily good news for markets and for
investors. And these numbers give the Federal Reserve perhaps a further green light to tighten policy and pull economic support sooner rather than
later.
The relentless rise in oils surely a concern for the inflation faring Fed, too. Brent Crude pushing towards $93 a barrel. U.S. Crude at more than
seven-year highs.
Plenty to discuss this morning.
Bill Dudley joins me now. He's the former president of the New York Federal Reserve. He's currently the senior research scholar at Princeton University
Center for Economic Policy Studies and the senior adviser to Bloomberg Economics.
Bill, fantastic to have you with us on the show this morning. We like these kinds of positive surprises where net job gains are concerned. What do you
make of the numbers this morning?
BILL DUDLEY, FORMER NEW YORK FEDERAL RESERVE PRESIDENT: I think it tells you that businesses are trying to find workers desperately because the
number of unfilled jobs is very high relative to the number of people that are actually unemployed. That ratio is at an all-time record. So, if you
can find people, you hire them.
And so, the answer being driven by the ability of people to find workers as opposed to workers looking actively you know for jobs. So, labor market is
very tight. And you can see that in terms of the wage trend. A big increase this month. The year over year increase is well above 5 percent now. And
what it shows you is that you know we do have a bit of inflation problem in the U.S. because wages now are at a level that inconsistent with the Fed's
2 percent inflation objective.
CHATTERLEY: I mean the other thing that we can talk about here is the revisions for the final three months of the year and net 738,000 jobs added
in terms of revision for the back end of last year. I mean, however hot do you this economy is? It seems a lot hotter today.
DUDLEY: Yeah, it does. I mean, some of those upper revisions were just due to changes in how they assign gains through the year. So, I wouldn't put
too much weight on it. But I mean, the bottom line is the labor market in the U.S. is extremely tight.
And what's so extraordinary is that the Federal Reserve is still buying assets. They're still adding accommodation. So, this just underscores the
fact that the Fed is behind the curve. We'll see liftoff in March. And probably go every meeting for a while until they get the federal funds up a
considerable amount.
CHATTERLEY: Do you think there's a risk that they go half a percentage point in March? Because even based on pricing today that would be a shock.
DUDLEY: I think that they won't as long as the market doesn't expect them to. I don't think the Fed is in the habit of trying to shock markets
especially at a time where the market view of what the Feds can do and the Fed's view what the Feds are going to do are not very different. Beside the
gap and expectations are - so, there's not real need to you know shock the markets.
And I just don't think it's also Chair Powell's style. Now, if the markets start to get to a view that, gee, the Fed should do 50 basis points,
that'll now puts the Fed in a more difficult position. Do they want to do what the market wants, or do we want to do what we want?
CHATTERLEY: And then what do they do? I mean, this is a fascinating point. You sort of -- you got there before me, but I was going to say it anyway.
So, what we're saying is if the market starts to price closer and significantly closer to a half a percentage point rise, the Fed will
probably end up doing that.
DUDLEY: Well, or they could just come out and say, no, we want to be gradual. What's interesting about Fed speakers over the last week or two is
a number of them came out and talked about how we want to move in you know sort of gradual way. So, at least there are the number on the Federal Open
Market Committee that don't want to do 50 basis point. They sort of signaled that in their recent commentary.
CHATTERLEY: What do you think they end up doing this year? I mean, I've been looking some of the forecast. I think Goldman Sachs is saying five
quarter of a percent rate hikes, buying for America is now saying seven. Based on what you're seeing in terms of the economy and to the point we
were just making there, what the market, corporates, businesses, small businesses can withstand, is that kind of the ballpark? Rates are very low.
DUDLEY: I think it's five or more. But the key question is going to be how fast does inflation come back down? We know that 7 percent inflation is
really being driven a lot by temporary factors like for example the spike in used car prices. Used car prices are already starting to soften. Though
we know inflation is going to come down in 2022. The question is how much.
It looks like it's settling out in you know the 2.5 to 3 percent range that Federal Reserve can be pretty you know cautious in terms how fast they go.
[09:25:00]
But if it settles out at 3 percent, then the Federal Reserve is going to a lot more quickly. Also, how markets react to the Fed is going to be
important. I mean Chair Powell has talked about the importance of financial market conditions in determining the impulse of monetary policy to the
economy. So, if stocks go down a lot, manuals go up a lot, you know that would mean the Federal Reserve would have to do less rather than more.
CHATTERLEY: Yes. Because what you're saying is effectively investors are doing the work for the Federal Reserve. They're doing the tightening
automatically without requiring the Federal Reserve perhaps to adjust things more.
DUDLEY: Yeah. I mean the obvious thing in the market is the market is still only expecting the beacon of federal funds rate, this cycle to be only
about 2 percent or so. That would be the lowest peak in any economic cycle in the U.S. going back to the mid-1950s. That seems a rather unusual
expectation given that the labor market is extraordinary tightening and inflations is well above the Fed's 2 percent objective.
CHATTERLEY: I mean, you also made the point in your first answer about this sort of three in one policy choices that they have here. They've said the
emphasis perhaps is going to be on looking at rate rises, but they're also still buying assets. They have to stop that. They then have to run-down the
balance sheet. How do you think the sort of calculus on that and the discussion on about that is happening at the Federal Reserve now
particularly in light of what we're seeing and the messages that are being sent I think by the data?
DUDLEY: Well, sometime in the summer I would expect them to begin to start to shrink their balance sheet. But they've made it very clear that the
Federal fund rates, short-term interest rates is the primary tool for driving U.S. monetary policy.
And so, the balance sheet tool once it starts to set in motion that they try to shrink the balance sheet, it will sort of run in the background on
auto pilot with the Federal fund rates still being the primary tool. The Fed doesn't want to use both tools actively because it becomes very
difficult to communicate to the market like, why are you today using this tool as opposed to the other tool. Better just to set the balance sheet on
a you know predetermined trajectory and use the Federal funds rate as your primary tool.
CHATTERLEY: We've seen a lot of -- I was going to call it froth but then I'm being subjective. We've seen a lot of value come out of meme stocks,
the crypto sector, tech stocks in particular and some incredible volatility after earnings from the tech stocks in particular. Do you think that's
rationale, sensible behavior perhaps kicking in light of what we're seeing from the Fed?
DUDLEY: Well, it's hard to you know talk about rationality in terms of how some of these meme stocks performed in the first place.
(LAUGHTER)
CHATTERLEY: (INAUDIBLE)
DUDLEY: So, they are retro on that side. It might be rationale on a downside too. I don't have a strong view about you know where these things
should be valued. I just know that if the Federal Reserve is raising short- term interest rates, now you have a little bit more competition from the fixed income markets and that's going to weigh on equity prices.
CHATTERLEY: Is that a good thing? I mean, as you say, we're sort of questioning the rationality of some of the most that we're seeing and some
part of that is liquidity driven.
DUDLEY: I mean, if the Fed needs to slow the economy down at some point, they need to tighten financial conditions of why you do that.
CHATTERLEY: Right.
DUDLEY: As you push up manuals and use - and you push down stock prices. So, you know the fun part of the performance in financial asset part,
markets are probably mostly behind us.
CHATTERLEY: But more volatility to come as a result.
DUDLEY: Absolutely. Because we don't know how much the Federal Reserve is going to do. We don't know where inflation is going to go. I mean we don't
have a lot of experience with post-pandemic recoveries.
So, the amount of uncertainty here is very high. And Federal Reserve is not getting us any guidance. I mean, Chair Powell in a recent press conference
made it very clear, we're going to have to be very nimble. It depends on how things are. So, the Fed hasn't committed to any particular path that
will also increase the volatility in markets.
CHATTERLEY: Yeah. And that's the right move, too. Because you can't guide on something you simply don't know.
DUDLEY: Exactly.
CHATTERLEY: Bill, great to have you with us. Come back again soon, please.
DUDLEY: Thank you.
CHATTERLEY: Bill Dudley there, former president of the New York Fed and a senior research scholar at Princeton University Center for Economic Policy
Studies. Thank you once again.
All right. Up next. Pageantry and politics in Beijing as the Winter Olympics begin. We're live in the Chinese capital once again. Stay with us.
(COMMERCIAL BREAK)
[09:32:10]
CHATTERLEY: Welcome back to "FIRST MOVE."
And the Beijing 2022 Winter Olympics have officially begun. A stunning opening ceremony in the iconic bird's nest stadium. The athletes entering
through an art described as the gate of China, symbolizing the host nation opening its doors to the world.
But the truth is pressure from diplomatic boycotts over human rights was also in evidence in Beijing. Only around 20 countries sent their national
leader to the opening ceremony. And around half of them were heads of authoritarian governments.
As Selina Wang reports.
(BEGIN VIDEOTAPE)
WANG (voice-over): Vladimir Putin bringing the eyes of the world with him to Beijing. Like the Russian president, who has silenced his critics at
home and threatened his enemies abroad, many of the dignitaries at the opening ceremony for the Winter Olympics do not have a glowing record when
it comes to human rights and freedoms. It's a constant charge leveled at host China.
CHRISTINE BRENNAN, CNN SPORTS ANALYST: We should not be here at all.
WANG: While athletes from 91 teams will compete, far fewer will be represented by visiting VIPs at the opening ceremony. And most of those
places are considered either not free or only partly free by U.S. rights group Freedom House. From Saudi Crown Prince Mohammed bin Salman to Egypt's
Abdel Fattah El-Sisi, and the autocratic leaders of countries like Tajikistan and Turkmenistan.
They're all filling a gap left by the United States and like-minded countries who are staging a diplomatic boycott.
Washington says China's rights record, particularly the alleged genocide of its Uyghur Muslim minority, means it cannot contribute to the fanfare of
the games.
Despite mounting evidence, the Chinese government says it's not persecuting the Uyghurs.
JEN PSAKI, WHITE HOUSE PRESS SECRETARY: U.S. diplomatic or official representation would treat these games as business as usual in the face of
the PRC's egregious human rights abuses and atrocities in Xinjiang, and we simply can't do that.
WANG: A far cry from 2008, when George W. Bush sat shoulder-to- shoulder with Chinese officials.
BRENNAN: We're saying, basically, to China, we despise your repressive, awful regime. We hate what you're doing with human rights abuses. We are
not going to validate your Olympic Games. And we're not coming, but we're sending our athletes to do what they do. So, it's really the perfect
answer.
WANG (on camera): But to Beijing, the party won't be spoiled by its many notable absentees. The 2008 games were a moment for China to prove to the
world what it was capable of. But this time around, the country isn't asking for approval, and the world is well aware of China's might.
(voice-over): The U.S. believes its diplomatic snub will keep Beijing's rights record in focus. But as the west turns its back on China, Xi Jinping
is finding friends elsewhere, friends who won't be so quick to criticize.
(END VIDEOTAPE)
[09:35:05]
CHATTERLEY: What a difference 14 years makes.
David Culver is live in Beijing for us.
David, fantastic to have you with us.
At the end of that report there, we saw the image of President Xi of China. We saw President Putin of Russia. And I think of all the relationships
among the leaders that we've seen there this is the most fascinating given what we see in terms of the backdrop. The 39th time, I believe, that these
two leaders have met, which says something about the reflection I think of their longevity and this political structure they have back home. But it's
about the optics, too, as much it's about the manifestation of economics and other relationships between them.
DAVID CULVER, CNN CORRESPONDENT: Totally, Julia. Yeah. And I think you're right. You compare those images from 14 years ago and you see George W.
Bush, that president of the U.S. He was here meeting with his counterpart, a then vice president Xi Jinping as well as Putin, he was here.
But the focus has completely shifted. And Selina kind of hit on it there a bit where she said China is now saying, well, we know who our real friends
are. And they're here with us and they're celebrating this moment.
But the optics are not only for the domestic audiences both here in China as well as in Russia. It's really for the rest of the world. And China as
we know, they've repeatedly slammed the U.S. for politicizing these games through the diplomatic boycott over China's human rights record.
And yet, one of the biggest moments ahead of the opening ceremony is this in-person meeting between Putin and Xi who by the way has not left this
country since the start of the pandemic. And then right now, both of them have just wrapped up attending the opening ceremony.
The meeting sending a major geopolitical message, yeah, in part to the west and especially the U.S. But also, and perhaps this is more important here
to nations and democracies that have relied on the U.S. for global stability. The readouts are continuing to come out from state media and
we'll likely see those consistently echoed in the days, week, months to come. But they're saying Putin and Xi have vowed to deepen their strategic
coordination, adding that it's going to have a far-reaching impact on both China and Russia and here's key the world at large.
This meeting coming as the Ukraine crisis amid concerns over a possible Russian invasion, that remains tense. And yet Putin here you saw on some of
the images he was at ease certainly during the ceremony taking it in calmly. As for that diplomatic boycott as you know, Julia, it means
essentially the U.S., UK, Canada, Australia from an official perspective, are not present.
But of course, you've got their respective teams here, and this is also an interesting note from Team USA in particular. They almost seem to be
pushing back on what has been a politicization as the Chinese have portrayed it and almost siding with the Chinese and the Russian rhetoric in
saying that they don't want sports to be politicized.
Now, of course, the motivation from the Chinese and Russians is very different from Team USA. Team USA instead saying let's let our athletes do
what they do best, and that is compete. And there were a record number of American athletes, 177, about 80 percent of all of them who partook in the
opening ceremony just a short time ago. And this is amidst of course incredibly strict COVID restrictions, part of China's zero-COVID policy.
Julia?
CHATTERLEY: Yeah. It's fascinating, isn't it? I mean you make a statement by boycotting these games, but you also allow the athletes in a way just to
get them with what they're doing by staying away. It doesn't become sort of the photograph and the sort of politicized version of events that they're
sort of threatening -- suggesting but perhaps it is at least from the U.S. side. Fascinating.
How far do you think this relationship on the surface we see the diplomacy, the support for Russia's stance in Ukraine, for China's stance in Taiwan as
an example? But I just -- when I look at who holds the cards in this relationship, I do feel like China holds more than Russia, and perhaps
China needs Russia less than Russia needs China.
CULVER: I think you're right in that. And I don't think that's ever going to be echoed publicly here or stated certainly from the top. But if you
just look at the economics of it, I mean China obviously the second largest economy in the world. But Russia and China both have seen some benefit just
in 2021 alone, last year they saw more than 30 percent increase in imports and exports between these two nations.
But to your point it seems that China really doesn't need Russia as much is Russia is going to need China going forward just because of the economic
power here. Nonetheless China is not pushing that all. They're saying you know we are in the midst of mutual trust. We're on equal ground and we
stand together. And we hope the rest of the world joins us.
That's of course the perspective they want to project and even from a military perspective, you see the U.S., the UK, Australia joining in
August. China has rejected that, though they themselves have already took in military exercises with the Russians, but they say we don't need to
label that. That's not an actual alliance or an allegiance militarily. It's rather just two neighboring countries trying to protect their sovereign
territory.
[09:40:03]
CHATTERLEY: Yes. It's certainly frosty out there and that has nothing to do with the snow.
David, thank you so much for joining us. Great to have you with us.
CULVER: Sure.
CHATTERLEY: David Culver there.
All right. Coming up on "FIRST MOVE."
Pumped up profit and prices at Amazon. The retail giant blowing past earnings expectations but it also raising prices for members. More on the
prime bump up after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "FIRST MOVE."
U.S. stocks are up and running for the last trading day of the week. And we've got a volatile first few minutes of trade. Tech trying to move higher
after Thursday's sizable 3.7 percent drop. Poor earnings from Facebook's parent company Meta triggered the downward drop in the previous session. We
are holding in the green for now.
Today it's all about a huge upward economic surprise. The U.S. adding a much stronger than expected 467,000 jobs last month. The Fed insisting for
months that the jobs market remains extremely tight, and today's numbers definitely support that. All this pushing U.S. bond yields higher. The 10-
year U.S. government bond currently has a rate of 1.9 percent.
But it's not all good news. Disappointing results from car giant Ford putting pressure on some of the blue chips. Ford reporting weaker than
expected Q4 numbers as supply chain issues weigh on production.
Meanwhile, Amazon spiking higher after its earnings beat. Snap surging after its first ever quarterly profit. But Meta adding it seems to its
stunning 26 percent losses from yesterday.
Paul La Monica joins me now. Wow. Paul, we've got a lot to discuss.
Let's start with Amazon. Great news from them. The price of prime in the United States is rising and you can thank Rivian for the dramatic profit
beat versus expectations. There's a lot in this one, Paul. What do you make of it?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yeah. We've got a lot to unpack, Julia.
Let's start with that prime price hike. Clearly not something that many subscribers will be happy with, yet another sign of inflation, perhaps. But
I think that many Amazon loyal Prime users will continue to probably pay it begrudgingly because of the services, the shipping, the content that they
get. And Prime Video that all that comes with that.
[09:45:00]
So, I think it's going to be fascinating to see how Amazon navigates this price hike and any potential consumer backlash.
But one thing Rivian also you know definitely a big gain from its investment in that electric truck company, but the thing that I found
really most telling in this Amazon earnings report, Julia, the core business is still not making money. That is losing money. Retail is a
notoriously tough business. Amazon web services, huge operating profits for this unit. The cloud is what powers Amazon. If there was any question when
Jeff Bezos passed the reins to Andy Jassy who used to be the AWS head, why is it going to be this guy? That's why because AWS is a beast.
CHATTERLEY: Yeah. I couldn't agree more. And actually, there's a great comparison here with Facebook where what 99.5 percent of the money that
they're making is in advertising whereas you look at Amazon's business modeling, yeah, the retail business is one thing, but you've got the web
service, you've got the interest in electric cars. You got a number of different things that diversifies the business in terms of growth going
forward.
And that sort of ties me to the next point because I wanted to get your take on what we're seeing in terms of the share price moves after some of
these earnings. I mean Netflix was down 20 percent. We've got Snap. Fine, it made its first ever profit, but that leaping what 44 percent. We can
check that. Amazon, you know, I take a step back to my time in finance and I look at some of these moves and I say these aren't healthy markets. These
are bonkers market moves.
LA MONICA: Yeah. I think there's two points I would make. First, I totally agree with you, Julia, it is completely bonkers to see these large cap
stocks having these ginormous price moves on earnings. I don't think that is necessarily healthy, but I think a bigger point -- and this is something
that we in the financial media can probably do a better job at with the investing community -- we sometimes lump all of these tech companies in
together as FANG, this amorphous blob of big tech, but as wave seen with the results there's a big difference between Meta and Amazon. There's a big
difference between Apple and Alphabet. There are going to be winners and losers within FANG. You can't just say all the FANGs are going to rise on
the same tide. There are definitely fundamental differences and competition that comes into play, which is a reason why it's still a stock pickers
market maybe not a sectors pickers market.
Yeah, couldn't agree more. So, we're banning FANG. We're banning FANG on this show, is that the message here? We're no longer lumping these together
even just tech stocks because they're so fundamentally different, I think you raised such a good point and then we have sort between them better. We
take responsibility.
Paul La Monica, thank you for that. Have a great weekend.
Now, Amazon's profits might float investors boats, but Jeff Bezos is also thinking about his own. He's commissioned as superyacht being built in
Rotterdam that it would require part of an iconic bridge to be dismantled so that it can pass beneath it. Yes, it's reported Bezos and the shipyard
would foot the bill but not everybody is so happy about it.
And Nada Bashir joins us now. Great to have you with us.
So, I'm confused here. Either the city did or did not agree to allow this beautiful bridge to be dismantled temporarily to allow this boat to escape,
so it was perhaps a bridge too far to get this in writing beforehand?
NADA BASHIR, CNN PRODUCER: Well, Julia, it's certainly raising numerous questions particularly how they didn't think of this before. But if you do
have a boat that's too big to fit under a bridge, what do you do? If you're Jeff Bezos one of the world's richest men, you could just pay a large sum
and ask the local authorities to take the bridge down. That is what we're seeing and hearing now from Rotterdam.
Let me just give you a sense of what we know so far. This superyacht being commissioned by Jeff Bezos is currently in the process of being built in
Rotterdam. And it is as we understand it nearing completion. But in order to get to the ocean, in order to the get the superyacht to Jeff Bezos it
will have to pass through an iconic and historic steel bridge in Rotterdam known as the De Hef bridge.
But as you mentioned, the yacht is simply too big to do that. So, now, the ship building company Oceanco and Jeff Bezos are requesting from local
authorities for the bridge to be dismantled.
And as you can imagine, it has proved to be quite a divisive request amongst the locals. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The more money you have, the more power you get even though it goes against the principles of the city. The city says we're not
going to do it.
UNIDENTIFIED MALE (through translator): What can I say, I guess big money wins again as always but it will also create some employment, of course.
And I think that's important for this region as well.
(END VIDEO CLIP)
[09:50:04]
BASHIR: Now, we've heard from members of the local authorities. They said that it is of course an important and significant project for Rotterdam. It
is of course Europe's maritime capital and it has generated some employment.
And it's important to note the ship building company and Jeff Bezos have said they'll cover the cost of dismantling and putting the bridge back
together again, but it has caused debate not only in the Dutch city but also further afield.
Let me quickly read this tweet from U.S. House of Representative Adam Schiff. "If Jeff Bezos can pay to dismantle a bridge in the Netherlands to
fit his super yacht. Then his company should have no trouble paying its fair share in taxes so we can build bridges in America."
So, clearly, a lot of debate there. But well, this request is still under consideration. Jeff Bezos might not be getting his superyacht as quickly as
he had anticipated. Julia?
CHATTERLEY: Yes. Dutch GDP $950 billion this year expected. Bezos worth $160 billion. He can most definitely afford it.
It is a bridge over water. I wonder if they can bridge the divide. And what's the captain's name. Bridgette, maybe?
Nada, great to have you with us. Thank you.
Still to come more with "FIRST MOVE." Stay with us.
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
BLAKE ESSIG, CNN CORRESPONDENT (voice-over): When COVID first hit Japan, this vending machine helped Sugako Matsuno shop Mousseline stay afloat, one
chiffon cake at a time. Customers could buy her product without human interaction whenever they wanted. After installing the machine, sales
eventually increased 20 percent.
SUGAKO MATSUNO, FOUNDER, MOUSSELINE (through translator): If I had spent my life just waiting for customers, I would have lost my mind and not been
able to continue this business. The vending machine relieved that stress.
ESSIG: Vending machines are a staple in Japan. There are over 5.5 million of them in the country. One for every 23 people. The highest ratio in the
world and while it helped Matsuno's shop, experts say the overall industry took a hit during the pandemic.
DOMINIK STEINER, FOUNDER AND CEO, VPC ASIA: People started working from home and the commuter traffic collapsed and hence there's nobody walking by
the vending machines.
ESSIG: Tech firm VPC Asia has been working in the vending machine industry for five years. It developed this device that helps upgrade older machines
by connecting them to the Internet, allowing access to the machines without having to touch or be near it. The customers can buy his products and check
what's for sale using their Smartphones, while operators can find out when and what products are out of stock allowing them to route trucks more
efficiently. Beyond these uses, Steiner says there's even more potential for innovation opting to look at the machines as real estate.
STEINER: There are so many and they're in prime locations and so what else can they do other than just selling the drinks or other food.
ESSIG: Including additional sensors, cameras and other types of tech, Steiner says the machines could serve various purposes from marketing, data
storage, weather forecasting, noise analysis for crime prevention to earthquake monitoring.
[09:55:05]
STEINER: The vibration we can monitor earthquakes. We cannot predict the earthquake, but we can warn. We have millions of spots in Japan that we can
see where the earthquake comes from and maybe gain 10-20 seconds. The platform is ready for all of these, meaning we've built it. We've tested
it. We've designed it. It's all there.
ESSIG: While the tech may be ready, there's still a way to go before we can see it on the market. Steiner says it still need buy in from all the
different stakeholders.
STEINER: The issues is how to integrate into the existing systems into the society. Are they ready to use that data for earthquake or crime
prevention? That is something that will take, not months but years until everybody adapt.
ESSIG: Still with millions of vending machines operating across Japan it provides room for creative innovation and competition. VPC Asia hopes to
create a new blueprint for the future of these iconic machines. And as for chiffon cake maker Matsuno, she's looking ahead to her future.
MATSUNO (through translator): I'll continue to use a vending machine even after the pandemic ends. There are many customers who come at all hours of
the day, so I want to keep providing my cakes for them.
(END VIDEOTAPE)
CHATTERLEY: Thank you very much for watching. "Connect the World" with Becky Anderson is next, and I'll see you on Monday.
(COMMERCIAL BREAK)
[10:00:00]
END
