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First Move with Julia Chatterley
Street Market Turmoil; Food Crisis Looms as Blocks Ukrainian Grain Exports; Wall Street Opens Lower after Worst Day Since Mid-2020; Russian Soldier's Trial for War Crimes Resumes in Kyiv; Leaders of Finland and Sweden Meet Today with Biden; Any Moment: Biden to Meet with Leaders of Sweden, Finland. Aired 9-10a ET
Aired May 19, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALISON KOSIK, CNN HOST, FRIST MOVE: You're watching CNN. I'm Alison Kosik in New York. Any moment now we are expecting to see the leaders of Sweden
and Finland, arriving at the White House. They're set to meet President Biden after submitting applications to join NATO.
But first, U.S. Stock Futures are pointing to deeper losses a day after a major sell off on Wall Street. DOW Futures are down over 300 points at the
moment. The Index lost more than 1100 points or 3.6 percent yesterday, its biggest one day decline since June of 2020 the S&P 500 dropped 4 percent.
The NASDAQ skidded 4.7 percent investors are increasingly worried about rising inflation, a possible recession as well. After dire earnings reports
from retail giants, like Walmart and Target. European stocks are tracking the U.S. sell off with London's FTSE down as well. And in Asia stocks
mostly tumbled the HANG SENG closed down over 2.5 percent the NIKKEI also fell almost 2 percent.
I want to bring in Christine Romans has been following all the market action for us, Christine, you know what, we had that market meltdown
yesterday? Watching these Futures just fall even farther, you know, even further, what can we expect to happen today?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know it's an old Wall Street cliche that markets hate uncertainty, but it's true. And
there's really a surplus of uncertainty. You saw inflation and supply chain drama in those earnings that you mentioned.
And that really got investors skittish running for the exits really here out of risky assets. And that tone holding into today's U.S. session. It
feels like we'll have to wait and see maybe it attracts and buyers who look at some of those big moves yesterday and think this is a buying opportunity
or whether it just feeds into the fear loop that we're having here.
You haven't seen this they call you know, market parlance capitulation yet, but certainly you've seen some big moves. You know, the DOW down 5300
points since its peak earlier this year. That's 14 percent. It's even worse for the NASDAQ.
The NASDAQ has all the way back to October 2020 levels for blue chip investors. That's what's most likely in your 401K or your retirement
accounts you've lost a year of gains 14 months of gains here so you can see how just fearful people are.
There are so many crosscurrents happening here at once Alison. You've got COVID lockdowns in China that are threatening to snarl those supply chains,
bigger picture, you have supply chains that really need to be more resilient.
So you're going to have to make some investments, longer term, which is going to mean you know, a more period of uncertainty, you've got oil prices
and energy prices moving high. You've got a war, Russia's war right with Ukraine that could be a real problem for food security, and energy
Any one of these storylines would be destabilizing, and you've got half a dozen major, major uncertainties that will not be able to be fixed in just
a day but will take months, if not years, for example, the global energy playbook of that map rather, that'll have to be redrawn because of Russia,
that will take time.
KOSIK: Yes, all of these cross currents that you talk about aside we have to remember that the stock market is not the economy. And some people may
be scratching their heads and saying, OK, my portfolio is down. I feel less wealthy today.
But retail sales numbers are up. People are going on vacation they're going out to eat. Is this going to turn into a sort of self-fulfilling prophecy
where everybody's talking about a recession coming? And then it comes?
ROMANS: Yes, that's fearful, right? When you get - when you start to change the psychology of people? Look, when you talk to airlines, they're
expecting just enormous demand. When you talk about the consumer experience, it's shifting from buying stuff and buying services again,
which is a little healthier, of a balance. The consumer complaints and grumbles about inflation, but the consumer keeps spending.
I think one of the things that need earnings, retail earnings that caught so many people's attention is this mix of what people are buying it
especially low income Americans are shifting away from you know, from kitchen gadgets and electronics and more toward just the basics.
So you're starting to see that inflation biting for some American families. I think what's interesting around the world is the inflation story in some
of these countries in Norway and Canada in most of Europe.
ROMANS: They're paying much more for gasoline and they are in the United States, the U.S. taxpayer, subsidizes the oil and gas industry tremendously
in the U.S. So as a part of disposable income, gas is not as big a deal in the U.S as it is around the world.
But you're right that it feeds into the sentiment. And all this talk from some of these big banks about a recession is more likely, or the risk is
rising, a recession, it does have a dampening effect on consumer sentiment.
I will say that we just saw some jobless claims in the U.S. this morning that were a little bit disappointing, showing a rise there. You know, we
have very low unemployment in the U.S. in particular it's really been an engine of growth. There will be a lot of scrutiny on whether that starts to
slow a little bit as the Fed ratchets up interest rates and the economy enters this new period here.
KOSIK: All right, Christine Romans, thanks for all that great context.
ROMANS: You're welcome.
KOSIK: President Biden is meeting the Leaders of Finland and Sweden today after they both applied to join NATO. They're expected to speak later
before Mr. Biden leaves on his first official trip to Asia.
U.S Security Correspondent Kylie Atwood is in New York and Nina Dos Santos is in Stockholm, Sweden. Hello to both of you! Nina, I'm going to start
with you and ask you about Turkey because Turkey really seems to be the biggest hurdle to Finland and Sweden joining the alliance. How does
Turkey's pushback affect their bids for membership in NATO?
NINA DOS SANTOS, CNN CORRESPONDENT: Yes, it's certainly an irritation, as you can see also for big countries like the United States that are throwing
their weight behind these two nations, that, by the way, amply already qualify for the NATO criteria and spent heavily on their defense.
Turkey's President Recep Tayyip Erdogan now today, for a third time in less than a week has reiterated this concept of having some concerns about
Sweden and Finland that he wants aired around the NATO table before he can sign on the dotted line.
Otherwise, it appears as though he's threatening to veto their accession. By the way, you need a unanimous consensus of all 30 member states that are
part of this big alliance before these two countries can join.
Already one has agreed to do so this is an Estonia the government has agreed that they will be welcoming Sweden and Finland into the alliance
that coming just as you said an hour or so before the U.S. President Joe Biden has this big meeting with the leaders of Sweden and also Finland as
What are Turkey's grievances? Well, largely it has a lot to do with their perception of Sweden or Finland alleged support of groups that they deem to
be Kurdish separatist terrorist organization. Sweden has tried to rebuff that.
There are also issues of arms embargoes that have been imposed on Turkey, and the thorny issue of Turkey being frozen out of the fighter jet program
after it bought Russian military defense systems. So these are the types of things that President Erdogan appears to be negotiating, playing tough on,
because this is an opportunity he has now, Alison.
KOSIK: Thanks so much, Nina! Kylie let me ask you this. You know, Russia, obviously not thrilled about this application from Finland and Sweden to
try to get into NATO either Russia's Deputy Foreign Minister saying they're committing a grave mistake. So visuals matter in this what kind of message
do you think President Biden is trying to maybe send to Russia as he meets with the leaders of these countries?
KYLIE ATWOOD, CNN U.S. SECURITY CORRESPONDENT: Yes. Well, it's notable that the President made time today to meet with these leaders before he's
heading to Asia, right? It's very clear that the White House wants to securely signal that they strongly support in President Biden's words, the
addition of Finland and Sweden to NATO.
And it's interesting, however, that as time goes on, as their applications are considered and put forth as they were, this week, this division within
NATO is only growing more pronounced as President Erdogan is coming out and reiterating Turkey's opposition to these countries joining.
And over the last few days of the last few weeks, when you talk to U.S. officials about Turkey's opposition, they sort of try and say, you know,
OK, we understand it, but we're going to get to yes, we are going to get Turkey to agree here.
But as more time goes on, as Turkey kind of digs in its heels, if you will, there is more pronounced division within NATO, which is the exact thing
that NATO allies do not want at this moment. As this Ukraine war rages on, they really want a sense of unity portrayed.
So it is a diplomatic challenge for the Secretary of State he's here this week, he met with the Turkish Foreign Minister just yesterday on this
KOSIK: Kylie, I just want to interrupt for a second and we're going to live pictures now at the White House of President Biden meeting with the Leader
of Finland there taking pictures of both leaders, the leaders of Finland and Sweden just arriving now at the White House.
KOSIK: You see the photo-op there, the red carpet laid out for them ready to have this meeting right before, as you said, the President heading out
on this very important trip to Asia. Talk us through Kylie, maybe what kind of leverage Turkey has in these discussions before, you know, Turkey signs
on the dotted line?
ATWOOD: Yes, I think leverage is the key word here. And Turkey recognizes that first and foremost, all countries in NATO need to agree to admit new
members. So if Turkey says no, the answer ultimately is going to be no.
So that is kind of the basic fact of the matter. And then when you look at their conversations, their frustrations over what they call these Kurdish
terrorist groups in Finland, in Sweden, they are trying to see what they can get in their favor if they're going to turn into a yes on this.
And I think it's interesting as we look at what they're saying publicly about what they want. We're also wondering what kind of conversations and
requests they may be making quietly. For example the United States and Turkey continue to be in conversations about additional U.S. military
equipment to Turkey.
And so as those conversations are happening in parallel, are they at all involved in what Turkey is doing here? The leverage and then they are
trying to seek in this situation? So it's really a complicated moment. And it's really unclear at this moment how exactly the United States and its
allies are going to get Turkey to change its mind with President Erdogan being very clear that right now it's a no for them?
KOSIK: OK. And as though we break away from this story I'm going to take a one last look at what's happening at the White House? President Biden
taking a picture with Leaders of Finland and Sweden there at the White House lives. Kylie Atwood and Nina Dos Santos thanks so much for all of
your analysis on this.
And as we were saying markets are suffering in Asia the HANG SENG closing down over 2.5 percent, while Tencent, China's largest company listed in
Hong Kong saw its stock sink 7 percent. Meantime authorities in Shanghai say businesses are gradually reopening as severe COVID lockdown
restrictions ease. Let's go to Selina Wang. She joins us from Beijing with the details Selina? Selina, can you hear me?
SELINA WANG, CNN CORRESPONDENT: Alison, the key words here are that this is a very slow reopening process in Shanghai. Yes, I can hear you? Can you
hear me? This is a very slow reopening process in Shanghai.
Very few companies and factories can actually abide by these strict COVID rules that allow them to reopen because these factories and companies have
to follow a closed loop policy meaning that their employees have to live sleep and work within the company grounds that takes a lot of resources.
It's even hard for large companies to have enough resources to do that. So you can imagine how tough this is for those small and medium sized
businesses? But this slight relaxing comes as Shanghai is starting to open some supermarkets and pharmacies.
Authorities have announced a phased reopening approach to return to normalcy by mid-June. For several consecutive days now Shanghai has not
announced any new COVID cases outside of these quarantine centers.
But Alison people in Shanghai they are skeptical about these announcements from the government. Many have lost trust in local authorities because back
when Shanghai announced the city wide lockdown in March the authority said it was only going to last for four days well now it's been nearly two
months and many people are still under strict lockdown.
There's still a flood of complaints on Chinese social media, many of which have been censored or people complaining that they have not been let out of
their homes. While state media is promoting these images that life in Shanghai has returned to normal.
In fact, just earlier today, I interviewed a couple in Shanghai they've been stuck in their home for two months. They haven't been led outside even
once that entire time. And meanwhile across China, you still are seeing these partial or full lockdowns in dozens of cities.
Here in Beijing Alison, authorities are not calling it a city wide lockdown but in large swathes of the city it is a de facto lockdown. I'm technically
allowed outside of this hotel, but really nowhere for me to go, Alison.
KOSIK: Alright, Selina Wang live from Beijing thanks so much. And these are the stories making headlines around the world. North Korea has reported
nearly 2 million cases of an unspecified fever a week after acknowledging a COVID outbreak for the first time.
South Korea says Pyongyang sent three cargo planes to China this week. And according to Reuters, they returned with medical supplies. The health
crisis comes as North Korea appears to be planning another missile test.
The U.S. says it could happen during or before President Biden's trip to Asia and that it is preparing for all contingencies. CNN's Will Ripley
joins us from Taipei with more. Will what more are you learning about this?
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it might on the surface be a little bit surprising that North Korea, which is dealing with
a potentially catastrophic, COVID-19 outbreak because they don't have enough medical equipment they don't have, even basic medicines.
They don't have facilities to handle the influx of patients who might be malnourished, like a huge percentage of the North Korean population, making
them susceptible to severe cases. But anyway, we're talking about North Korea's still going ahead with potential plans for a highly provocative
launch or nuclear tests.
Well, President Biden's in the region. And I guess, you know, the two departments are not connected, but North Korea by announcing their COVID-19
outbreak, and then also now potentially putting a missile test score to the United States intelligence agencies.
It shows that they're really intent on inserting themselves into the conversation. When President Biden is here in the region, they want him to
talk about North Korea they want to know where he stands on North Korea.
He's been very hands off thus far, much like President Obama when Biden was Vice President. And that strategic patience approach led to a number of
nuclear tests and missile launches. North Koreans want something more unconventional, like what the Former U.S. President Donald Trump did.
They want President Biden to write a letter. They want to put you know, they want a connection at the top level to start negotiations or restart
negotiations. But of course, the North Koreans have played this game for decades.
You know, they want something in advance just to reward them for sitting down and talking. The United States is saying they'll talk with no
preconditions. North Korean says that's not good enough.
So I think we can - safe to say we can expect some major provocations to come a nuclear test at some point maybe not necessarily when President
Biden's in the region, a missile launch might be more likely a lot of analysts are saying.
KOSIK: And President Biden leaves on his trip to Asia this morning. Will Ripley in Taipei thanks so much! The CDC says it's tracking multiple recent
clusters of monkey pox in several countries, including Portugal, Spain and the United Kingdom.
And now the U.S. is investigating its first case this year of the virus. Monkey pox is similar to the now eradicated smallpox. It spreads through
contact with body fluids, including in a closed setting, the droplets present in someone's breath.
Stay with "First Move" straight ahead war crimes in Ukraine were live in Kyiv, as a Russian soldier returns the court, then how the war is fueling a
global food crisis. We have a special report and I'll speak with the CEO of Impossible Foods.
KOSIK: The trial of a Russian soldier accused of committing a war crime in Ukraine is ongoing today. Vadim Shysimarin already pleaded guilty to
killing an unarmed civilian on the fourth day of Russia's war. Officials had to move the trial to a larger courtroom in Kyiv because of huge media
interest. Our Melissa Bell is outside the courthouse and she joins us live. Melissa, what's been going on in court today?
MELISSA BELL, CNN CORRESPONDENT: Well, this was the first big day of the trial that had begun yesterday was postponed and what we've been seeing has
really been very emotional inside that courthouse. I'm just outside it now.
The sessions just been adjourned up. But what has been going on has been quite extraordinary. As you mentioned the facts of the case their 20 year
old Vadim Shishimarin who's accused of killing that unarmed civilian now Alexander Sharapova (ph) was that civilian. He was a 62 year old Ukrainian
man who'd been on his bicycle in a village, not terribly far from the Russian border in Sumy region in the Northeast of Ukraine.
He'd been on his bicycle, and he was shot by allegedly by Vadim Shishimarin whose now pled guilty to that charge. In the court today Vadim Shishimarin
was questioned by that man's widow have a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Can you please tell me what did you feel when you killed my husband?
VADIM SHISHIMARIN, RUSSIAN SOLDIER PLEADS GUILTY OF WAR CRIME: Shame
UNIDENTIFIED FEMALE: Do you repent?
SHISHIMARIN, Yes, I acknowledge my fault. I understand that you will not be able to forgive me, but I am sorry.
(END VIDEO CLIP)
BELL: Now what emerged after that extraordinary moment, Alison was more it they didn't - we didn't simply hear today from Vadim Shishimarin, we heard
from a second Russian prisoner of war one of the soldiers who had been traveling with him.
To remind you of the bare facts of the case, his tank unit had been a traveling from the Russian border, it hit a mine, he and his men then fled
in a stolen vehicle and found themselves in this village shooting.
That civilian in order that they not be reported in that car was another Russian soldier who also gave testimony today, really giving a sense of the
chaos that they face of the fact that Shishimarin had been given an order to kill that civilian that he'd initially resisted.
But really painting a picture of the sort of mayhem that these young soldiers were facing, as they undertook an invasion that many of them
didn't properly understand so, so much has come out of today's hearing, not just the emotion of the widow.
And the emotion of Ukrainians as they watch this the first war crimes trial to be held, even as the war rages on, and the alleged war crimes continue
to be discovered, hearing from one of those direct victims incredibly powerful.
But also, again, a much better insight from the Russian point of view of what went on in those first few days of the war? So a very powerful hearing
here today. And once again, that's playing out in the context of a war that continues to rage on Alison.
KOSIK: Yes, what an incredible moment in court there? Melissa bell in Kyiv thanks so much. The Ukrainian counter offensive around the Northern City of
Kharkiv has driven Russian troops back to within 10 miles or 16 kilometers of the Russian border. CNN's Nick Paton Walsh is at the front line.
NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR (voice over): Every inch of respite from Russian shelling here comes at grotesque cost. What
once rained down on the second city of Kharkiv now lands here? Ukraine declared here, Ruska Lozova liberated over two weeks ago, but it's never
WALSH (on camera): These tiny villages, which, before the war, were places you wouldn't notice driving through have now become the key battlegrounds
to defend vital cities like Kharkiv.
WALSH (voice over): While the fight to protect Kharkiv still rages with every step fast and cautious because of mines Russia's border is now just
nine miles away.
WALSH (voice over): But Russian troops are even closer.
WALSH (on camera): And it's in the forest across the field over this wall that they say frequently at night's Russian reconnaissance groups try and
move in on the village.
WALSH (voice over): The next tiny hamlet is being fought over and this is where Kharkiv defense cannot fail.
WALSH (on camera): The U.S. his most effective gifts in some of Ukraine's youngest hands.
WALSH (voice over): Anton says he did not expect to be at war age 19 having been scared I asked. Shelling here is a constant, even though everywhere
seems to already have been hit.
WALSH (on camera): This is a homegrown defense volunteer, software engineers, and economists, funded mostly by our guide a farming millionaire
Russia's brief occupation never planned to leave anything of value here - one van full of TVs for looting.
VSEVOLOD KOZHEMYAKO, UKRAINIAN BUSINESSMAN: They see that we live better, and they do not even think that something is wrong with them, not with us.
You know, they think that because America gives us everything for free and they hate us for that. And they rob us and they kill us.
WALSH (voice over): Men and women who have in three months learned courage only comes after knowing fear up close.
IVAN, UKRAINIAN MILITARY MEDIC: The - was on the fifth day of the war. I was at the medical center at one of the posts in Kyiv and all come together
and he told us that Russian Special Forces are going to come and try to attack us from behind. We were not trained to do this. We were not armed to
do this. That was basically the scariest moment for me.
WALSH (on camera): But you survived?
IVAN: Yes, we survived. Everybody made it OK. And I think that is the moment that killed fears me.
WALSH (voice over): Yes, they hold back an enemy that slowly proving as inept as it is immoral by placing incredible value on the smallest patches
of their land. Nick Paton Walsh CNN, Ruska Lozova, Ukraine.
KOSIK: Stay with CNN the market opens his next.
KOSIK: Welcome back. I'm Alison Kosik in New York. Wall Street is making a lower start after its worst day since mid-2020, the DOW, S&P and NASDAQ all
in the red again this morning.
You see the DOW falling 360 points, concerns over soaring inflation continue excuse me, after retail giants Wal-Mart and Target illustrated the
consequences of it for the economy and their earnings reports this week.
Shares of the two companies are under pressure again, target dropped 25 percent, yesterday while Wal-Mart lost 7 percent. You see red arrows for
both of the companies at the moment.
Joining me now is Kristina Hooper. She's the Chief Global Market Strategist at Invesco. Kristina, I know you're watching the market along with me. I'm
curious to hear what you think was the catalyst that set the market off yesterday?
KRISTINA HOOPER, CHIEF GLOBAL MARKET STRATEGIST AT INVESCO: Well, clearly there are growing inflationary concerns in terms of how it impacts
earnings. And what we saw yesterday was just a reminder of how significant role inflation can play in impacting negatively on earnings.
In addition, we have growing recessionary fears in the United States. But to me, the bigger picture is that with rates going up and an expectation of
an aggressive Fed rate hike cycle, we're seeing a rerating of risk assets.
We're seeing a rerating really, of all assets in general. But it's really impacting stocks negatively.
KOSIK: Everybody's asking when capitulation will happen? Are we getting close to it?
HOOPER: I think we're closer to the bottom than we are to the top. But it is very; very hard to divine exactly where the bottom is until we're
looking at it in the rearview mirror.
My opinion is that we've already priced in much of a recession, and I don't believe we're going to see a recession, I think we've already priced in a
very aggressive rate hike cycle. And I don't believe the rate hike cycle is actually going to be that aggressive.
So there is upside potential. Again, we just don't know when we're going to hit bottom until it's in the rearview mirror.
KOSIK: So with you saying that you don't expect a recession, what about stagflation? Is that in your view?
HOOPER: Well, certainly we are going to see a slowing growth. And we are going to see persistently high inflation, although I do believe it's going
to be coming down slowly in the back half of 2022.
So to me that does not create a stagflation airy environment. The 1970s was the quintessential stagflation environment. And that was when we had both
high unemployment and high inflation.
I think we're unlikely to see high unemployment, we have so many job openings in the U.S. and Europe, that what we're likely to see is a
reduction in job openings, which should tamp down wage growth.
But create an environment in which we actually don't see much of an increase in the unemployment rate, which is unlike.
KOSIK: Christina, you say you don't expect the Fed to be very aggressive with its rate hikes is that because a lot of the work is really being done
for them. I mean, you see the stock market tanking, so that that wealth is going away.
You see the pressures on the consumer through earnings, like Target and Wal-Mart, those are just the beginning. So I guess talk us through why you
think the Fed actually won't be as aggressive as maybe the market thinks?
HOOPER: Well, because the Fed has already done some of the heavy lifting through fed speak, right? We've had a number of - members come out and talk
about how tough they're going to be this year.
And that has already had an impact on financial conditions. They've tightened in the U.S. they're really tightening globally. One example is
mortgage rates and we've seen them go up about 200 basis points since the start of the year.
The Fed hasn't done that much tightening. And this is in anticipation of tightening. So a lot of the heavy lifting has been done.
HOOPER: And I think the Fed hopes to continue that by talking tough, but not necessarily having to carry his biggest stick.
KOSIK: Is there opportunity here, oftentimes there is opportunity when you see the market fall so much.
HOOPER: There is opportunity, but as I said, we don't know exactly where the market bottom is. So this is an opportunity to dollar cost average in
if one has a long time horizon.
At a certain point, this could be a generational investing opportunity, if we see stocks sell off enough, but right now this is certainly an investing
opportunity. But I would advise dollar cost averaging in over coming months.
KOSIK: And you'll have to have a strong stomach as well. Kristina Hooper, Chief Global Market Strategist at Invesco, thanks so much for your
HOOPER: Thank you, Alison.
KOSIK: Coming up impossible is getting its products on more shelves around the world even as consumers seem less hungry for plant based alternatives
to meet. The CEO will be with me in just a moment.
KOSIK: Welcome back. I'm Alison Kosik. Ukraine is one of the world's major grain producers. But Russian warships have blocked Ukrainian ports had cut
off vital shipments of grain to some of the world's most vulnerable populations.
On Wednesday, the U.S. announced an additional $215 million in emergency food aid to deal with the grain crisis. The UN's top food official pleaded
with Russia's leader to end the blockade.
(BEGIN VIDEO CLIP)
DAVID BEASLEY, EXECUTIVE DIRECTOR, U.N. WORLD FOOD PROGRAMME: It is absolutely essential that we allow these ports to open because this is not
just about Ukraine. This is about the poorest of the poor around the world who are on the brink of starvation as we speak. So I asked President Putin
if you have any hard at all, to please open these ports.
(END VIDEO CLIP)
KOSIK: At the same time, Russia is being accused of stealing farm equipment and tons of grain from Ukrainian farmers. CNN's Isa Soares has more.
ISA SOARES, CNN CORRESPONDENT (voice over): Before the war, most of the food produced by Ukraine was exported through ports like this. Now these
key trading docs have ground to a halt blockaded by Russia who According to Ukraine's defense ministry has also pilfered an estimated 400,000 tons of
grain from Ukrainian farmers in Russian occupied territory.
SOARES (voice over): Footage obtained by CNN from Melitopol, Zaporizhzhia shows trucks bearing the white X symbol of the Russian military,
transporting grain to Russian held Crimea, an act that President Zelenskyy's administration is calling food terrorism.
VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: This is not just the strike at Ukraine with our agrarian export dozens of countries in various regions of
the world have found themselves on the brink of food deficit.
SOARES (voice over): Through satellite images, we were able to identify the Russian merchant ship Matros Pozynich, one of three involved in the trade
of stolen grain seen here at the port in Sevastopol, Crimea on April 29.
From there the vessel carrying an estimated 27,000 tons of grain according to maritime tracking site - traveled through the Bosporus to Alexandria in
Egypt, but were denied port. Then it went on to Beirut, in Lebanon, but it was also turned away. Finally, on May 8, it reached Latakia, the principal
port in Syria, according to shipping sources, and Ukrainian officials.
OLEG NIVIEVSKYI, ASSISTANT PROFESSOR, KYIV INSTITUTE OF ECONOMICS: So in this situation, I mean, the countries in the Middle East and in the
Northern Africa, they will be, they don't have choice, OK. And they will import with from anywhere from where it's possible. So I think this is
really state supported theft of Ukrainian assets of Ukrainian grain.
SOARES (on camera): For Russia stealing wheat and other grains during the war could prove lucrative. The price of wheat has skyrocketed so far the
share more than 60 percent or so spiking after the war started on February 24. And how much of a valuable commodity is it, while the price of wheat is
now trading about $400 a ton on the world market.
SOARES (voice over): As supplies run low and as prices continue to rise, there - the war is pushing the world to the brink of a food crisis with the
German Foreign Minister calling Russia's actions a deliberate war of grains.
After seeing for him the tons of grain wheat and corn stockpile in Odessa, the President of the European Council Charles Michel vowed the EU with
support from the U.S. will help look for ways to export grain from Ukraine.
Some of it is already being shipped from ports in neighboring Romania, but still only a fraction of Ukraine's total production. More help is needed if
Europe's breadbasket is to continue to feed the world. Isa Soares, CNN.
KOSIK: As grocery prices around the world soar and the war in Ukraine sparked fears of a food crisis, impossible foods is expanding. The maker of
plant based meat alternatives says it wants to make the global food system sustainable.
And it just launched two products in the UK. It comes as some consumers seem to be pulling back from alternatives to meat. Peter McGuinness is CEO
of Impossible Foods, and he joins us now. Thanks so much for coming on the show today.
PETER MCGUINNESS, CEO, IMPOSSIBLE FOODS: Thanks for having me, Alison. Good to be here.
KOSIK: So Wall Street has actually soured a bit on plant based food stocks. I know that you're not publicly listed, but your competitors have gotten
hit. So you know you throw in the competition space that's out there.
In the space, you just throw an inflation and supply chain issues. How is your company faring through all this? Have you had to raise prices? And how
are your sales for your products doing?
MCGUINNESS: So a lot in those questions, Alison. Look, I think Wall Street is not the consumer. We're the target audience. And we're not public, as
you said. Look, I think there's a competitive problem, not a category problem.
I think the category is ripe to grow. We're growing share year over year, we're growing at 65 percent year over year in terms of sales. So we're
doing well. And we're very bullish on the category.
There are some legacy players in the category that kind of bring the category down; they're not as productive on shelf. And I think as that
category gets curated, the math will prevail, right and will be left are the best glory.
So there are some unproductive skews on shelf that are impacting the category from a legacy perspective. And those will come off over time. And
we're continuing to innovate and give people you know, options.
And I think technology now has enabled the food to be very close to the animal product. In fact, many of our products are preferred to the animal
product. So you take better food, and then on top of that it's better for you and on top of that it's better for the planet, you start to get a
pretty robust value proposition.
MCGUINNESS: In terms of pricing, with our growth and our operating leverage and our fixed costs, absorption and a redundancy in our supply chain, we
haven't had to raise prices.
So where animal products, particularly beef has gone up 30, 40 percent in the last year, so we're quite competitive from a price perspective.
KOSIK: You know the global food system is under significant pressure to keep up with the world's growing population. What is the main goal here
where Impossible Foods, a foreign Impossible Foods in this realm?
MCGUINNESS: I think it's to give people options, right, better options, you know, the food industry needs to be disrupted. And there are more bad
options and good options. And so we want to make better options for people and the planet, more available in more places.
So innovation and distribution is a key part of our strategy. And that's why we're in the UK. We have a lot of friends and fans in the UK. And
they're rabid fans, and we hear from them a lot on our social feeds.
And, and in, by the way, in the UK and Europe plant based as a category is way ahead of the U.S. So they're earlier adopters. And they're more open
base options. So we're excited to be in the UK.
KOSIK: Yes, and you're launching your chicken nuggets or sausage patty in the UK, but why not the Impossible Burger?
MCGUINNESS: We will launch the Impossible Burger in time. There are some regulatory administrative things we need to do, which are just formalities.
And we'll get there. But we're going to start with the chicken and the pork, and then the beef.
We're in the UK for the long haul. And so that'll come over time.
KOSIK: And I know you called it a formality. But there is some concern here in the U.S. a lot of you know, health experts have taught us spoken out
about plant based meat, how it's highly processed, it's high in sodium.
And plus the questions about the ingredient that is in question, to get it to get those burgers on the shelf in Europe, you know, the ingredient that
gives the burger that meaty flavor and color.
And so there's talk about, you know, that, that some of these plant based meats aren't much healthier than a meat based burger. What do you say to
MCGUINNESS: Yes, I think there's a lot of myths and misconceptions out there. In the end, end of the day, we have low to no trans-fat, we have
zero cholesterol. And its 100 percent plant based.
So that is better for you that is better for the planet. But all products in the plant based meat category are not created equal. Some do have high
sodium; some are more processed than others.
So to just say that plant based meat alternatives, in general, are not good for you. I don't think it's fair. I think it's a bit lazy. And so and in
terms of processed, that's an interesting word, right?
I think the definition of process is important, right? I view process as artificial. We're not making Twinkies. We're making meat from plants. So if
you want to call that processed, then I guess, we're processed but we feel good about our manufacturing processes.
We feel good about our ingredient list. We're always going to improve them with technology. But we feel great about our products in taste, flavor and
nutrition profile, and how they help the planet particularly climb.
KOSIK: Peter, quickly, I want to ask you about this. I know that an IPO for Impossible Foods was expected to happen before April. It hasn't happened
yet. Why not? And what is the timing of an IPO if that's even going to happen?
MCGUINNESS: Yes, I don't - I don't know anything about the April date, six weeks into being CEO. Look, I think everything's on the table. We're in a
fortunate position to have a strong balance sheet and our cash position strong, so we don't have to go public or need to go public.
And so we'll go public, when we're ready to go public, but I wouldn't, I wouldn't, you know, it's on the table. And the timing is really up to us.
KOSIK: OK, Peter McGuinness, CEO of Impossible Foods. Thanks so much for being here today.
MCGUINNESS: Thank you, Alison. Thanks for having me.
KOSIK: You got it. Coming up, another tough day on Wall Street, stocks are down right now after a heavy sell off yesterday. More market analysis,
coming up next.
KOSIK: Welcome back. I'm Alison Kosik. U.S. stocks are trading lower again after a major sell off on Wednesday, the worst on Wall Street in about two
years. The Dow is falling right now 445 points.
It's down by almost 15 percent this year. Paul R. La Monica joins us now. You know and you're looking at even the NASDAQ it's even worse, it's down
about 30 percent for the year.
And these numbers are really just shocking. And what setting this off is those earnings from yesterday we're getting, you know, a bird's eye view of
how the supply shocks are really hurting and impacting consumers.
PAUL R. LA MONICA, CNN REPORTER: Yes, definitely Alison. We had really poor results and guidance from Wal-Mart and Target in the past few days that
have spooked investors. Clearly, these companies are hurting because of those supply chain constraints that you mentioned.
And I think we're also seeing that consumers are starting to really just hunker down again and they're spending on essentials, but maybe not on big
ticket items that would really help these retailers Kohl's another retailer, big department store chain that's been struggling.
Their numbers were not very good this morning. But what's troubling too Alison is this sell off is starting to spread. We're seeing earnings
weakness in other sectors as well. Cisco Dow component, Big Tech giant, their stock is getting crushed today because of their guidance. And that is
leading to a broader tech market selloff.
KOSIK: So this is kind of the work that the Fed wants to kind of see done. It wants to see the consumer pulling back. It wants to see sort of this
shell shocked situation I'm thinking. So does this mean that we can expect fewer, fewer aggressive rate hikes in the future?
LA MONICA: I'm not so sure yet. I mean, I think you're right that the Fed wants to see the economy cool a little bit, but maybe not so drastically
that you're going to start hearing more talk about a hard landing for the economy as opposed to a soft landing.
The Fed definitely wants inflation to cool because it can't go at this pace indefinitely without hurting the economy for the longer term. So the Fed is
really trying to rein in those inflation pressures.
The problem, of course, Alison is if you aggressively raise rates too many times, that could hurt corporate profits that could hurt consumer spending.
And I don't think the Fed wants a long bear market and another great recession.
Yes, recessions are inevitable and necessary, but hopefully we get a shallow downturn and not something really dramatic that spooks, investors
and consumers for a long period of time.
KOSIK: How far are we from the bottom very quickly?
LA MONICA: I don't think we're there yet. I think we have some downside still because earnings are coming in and the guidance is pretty weak and
investors look ahead.
LA MONICA: And if they're looking ahead to weak results for the rest of the year in 2023, stocks could tumble a little bit more.
KOSIK: All right, Paul R. LA Monica thanks so much. And for those of us old enough to remember George W. Bush making slip ups in speeches as president,
last night, we had a reminder of the old days.
Bush, who sent U.S., forces into Iraq to overthrow Saddam Hussein, seem to get a little confused while condemning Russia for invading Ukraine. Listen
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, 43RD U.S. PRESIDENT: The result is an absence of checks and balances in Russia and the decision of one man to launch a wholly
unjustified and brutal invasion of Iraq. I mean, of Ukraine. Correct anyway. 75.
(END VIDEO CLIP)
KOSIK: OK, but a reminder as well, even President Biden at his age gets slipped up there as well. That's it for the show. I'm Alison Kosik. Follow
me on Instagram and Twitter at Alison Kosik. Thanks for joining us. "Connect the World" with Eleni Giokos is next, I'll see you tomorrow