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First Move with Julia Chatterley
NASA Scrubs Today's Artemis Launch due to Engine Issue; Sen. Graham Warns of "Riot's in the Street" if Trump Indicted; Powell says Rates will have to Keep Rising to Tame Inflation; Fuel Leak, Engine Trouble Deadly Launch of Artemis Moon Rocket; Rain and Floods in Pakistan have killed 1,033 People; Bitcoin Value Falls Below $20,000 before a Slight Recovery. Aired 9:18-10a ET
Aired August 29, 2022 - 09:18 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN HOST: Hello, everyone, I'm Zain Asher, you've been watching CNN has coverage of the Artemis unmanned rocket launch to the moon liftoff.
As we know has now been scrubbed for today because of issues with one of the rocket engines. We'll have much more on all of this throughout this
But first let's talk about the markets U.S. Investors bracing for a rough start to the trading week Fed Chair Jerome Powell's blunt speech on Friday,
still reverberating throughout the financial markets. Stock futures you can see they're sharply lower after Friday's across the board sell off that saw
the DOW actually for more than 1000 points.
Tech stocks were among the worst performance on Friday falling more than 3 percent Jay Powell warned in his speech that U.S. borrowing costs will have
to rise much further to get inflation under control. So I'm in Washington fear that the feds medicine is a bit too harsh and will lead to hardship
for American households.
SEN. ELIZABETH WARREN (D-MA): Do you know what's worse than high prices and a strong economy. Its high prices and millions of people out of work I'm
very worried that the Fed is going to tip this economy into recession.
ASHER: Joining us live now is Rahel Solomon, who has been covering the story so Rahel, wasn't necessarily what he said, but how he said it. I
mean, the tone really matters here because he didn't really couch the pain that he thought that Americans would be feeling.
RAHEL SOLOMON, CNN CORRESPONDENT: I think that's a great point, Zain. We didn't hear Chairman Powell say anything about a soft landing. We didn't
hear him really couched those comments with a but we think the economy is coming from a very strong place as we tend to hear him say a more often.
This was a very direct message a very narrow message. And to put that fall of the DOW on Friday and perspective Zain. It progressively got worse; we
were at the lows of the session when we close every hour of the day just continue to get worse and to put it in perspective.
SOLOMON: It was the worst day in months; every S&P sector was lower. The NASDAQ was among the hardest hit this, of course, coming, as chairman
Powell will says we must raise rates to lower inflation. There is no other way to the other side of this, and essentially saying that it is for the
good of the larger public that we get inflation under control.
And to put these rate hikes in perspective, Zain, we've already had four so far this year. But there are three more meetings ahead. We have, of course,
that September meeting, and then I believe its November in December. I believe there's a break in October, but we have more meetings ahead this
year. And that, of course, is the concern being felt in the markets.
How much more are we going to see, to put this in perspective, we're at about 2.5 percent for the Feds benchmark interest rate. The expectation is
that we're likely getting closer to four by the end of the year. But every time Zain, the Fed has to deliver one of these supersize rate hikes. It
increases the fear and the threat of a policy misstep.
Some like Senator Elizabeth Warren would say the increases the likelihood of a recession. Others would say a policy misstep, but it increases the
likelihood that we're heading toward some pain as Powell pointed out.
ASHER: Right, Rahel Solomon, live for us that, thank you so much right. John Patrice joins us live. Now he is the Portfolio Manager at Tocquecille
Asset Management. John, thank you so much for being with us.
So it's no surprises that the Fed is going to continue raising interest rates in this country in order to get inflation under control. How much has
the stock market already sort of priced in a lot of these rate hikes do you think?
JOHN PETRIDES, PORTFOLIO MANAGER, TOCQUECILLE ASSET MANAGEMENT: Well, that's a great question. I think that's why Powell took the tone that he
did, you know, I like in Friday's speech to, you know, something that how I used to discipline my kids, when my kids got out of line or we're goofing
off. I would say, you know, I'm going to count the 3, 1, 2.
And I never got the 3. And what I mean by that is and the kids corrected what they had to do, but what I mean by that is, you know, this phase has
been saying a very consistent tone here that they're trying to get inflation down to 2 percent.
And that they are going to continue to raise rates to 3.5 to 3.75 percent by December. And the bond market and the stock market was rallying on a
story that was floated around that the Fed was going to cut rates, and they wanted to make sure they give a very, very stern message.
You know, in 2018, former chair fed, Ben Bernanke said that monetary policy is 98 percent words and 2 percent action. And, you know, the Fed really
wanted to throw us into recession now. Why only raise 75 basis points, the upcoming meeting, why not get us to 4 percent now? You're just you're shut
up, just turn the spigot off right now? Why wait? So I think they want to send a very message, very strong message that, hey, we're not cutting rates
anytime soon, because we still got a get to raise rates.
ASHER: Yes, by the way, I use the countdown disappointed with my kids too what one does, actually. So what might what might actually get the Fed to
change its mind here not necessarily change his mind, but change course. You've got the jobs report coming out on Friday. Do you think that yes, we
know that the September rate hike is already sort of set, but just in terms of how many rate hikes we see in the near term? Well, the jobs report this
week actually matter?
PETRIDES: Well, the irony as so yes, it will matter. But I think the irony is that, you know, two hours before Powell made his speech, the personal
consumption expenditure event, which is an inflationary target, the Fed pays a lot of tension to came in better than expected or lower than
expected, which means inflation was rolling over. And then and the market actually turned positive just before his comments.
So I think in terms of Friday's jobs report, I think the Fed probably has very good Intel as to what that number is going to look like. Which is why
Powell said many times the labor market is still too strong in his speech, and we have to get price stability, a notion that he mentioned 7 times
during his speech. So I would assume it's going to be a positive report. But more importantly, wage growth is going to stay above 5 percent. Which
would the Fed is focusing on getting that down.
ASHER: Says the Fed focuses on you know, reducing inflation rather at all costs. So what's going to be the price that ordinary Americans end up
having to pay here? Chair Powell just talked about a lot of pain in the short and long term until inflation is brought under control, just walk us
PETRIDES: Well, it is really a catch 22 situation because mirror inflation is simply the growth rate of money. And what the Fed is trying to do is
slow the growth rate of money. So you know, with the exception of maybe some, you know, your grocery bill will fluctuate, the gasoline prices will
PETRIDES: You know, inflation, it's not common that the note that your everyday cost of living will turn around and in order for it to turn around
or in order for the average American or the average consumer to handle those higher expenses, they have to make more money.
Well guess what if they make more money, it leads to more inflation. So it is really a very tricky situation that we're in, or which of course, is
partly been created by the Fed, because they kept their foot on the gas pedal for way too long last year, in addition of federal spending.
ASHER: And we know that September is not necessarily the best month for stocks in this country is actually quite a dismal month, typically the
stocks, what can we expect in the coming weeks, do you think?
PETRIDES: Yes, I clearly there's lack of clarity, I think most people were expecting 75 basis points for fed to hike interest rates, three weeks from
now. You know, I haven't seen much if there's a 1 percent increase. So I think that's where the traders will be positioning around.
What we what we lose now going into this last month, really is that earnings season is behind us.
And earnings season was weak. I mean, if you exclude the energy sector, earnings on companies in the S&P 500 were down, you know, low single digits
now it was of a very difficult comparison.
But earnings are coming down and I think ultimately for the stock market to find a floor that's healthy, you need earnings to come down you need
estimates to come down valuation multiples have come down to reflect the fact that interest rates are higher and so I think the next three weeks,
you're going to have traders positioning around where the Fed if there is going to be surprised to the 75 basis point rate hike which I think is
consensus at this point.
ASHER: Right, John Petrides live for us that thank you so much. I still to come here on "First Move" the first big step towards U.S. returning to the
moon will have to wait a little bit longer for the Artemis I rocket to launch stay with us for more on that.
ASHER: Right welcome back to 'First Move'! U.S. stocks up and running on this Monday on the start to the trading week. This is going to be a closely
watched market open. Everyone's gonna be watching this very closely after what we saw on Friday, when the DOW was down about thousand points or so a
dismal day in terms of the market.
As expected U.S. stocks are weaker right now across the board. The DOW is down 260 points or so off the S&P 503.3 percent drop as well on Friday the
worst day of trading on Wall Street since the spring investors selling stocks after Fed Chair Jerome Powell vowed to get the job done on inflation
increasing. The possibility the U.S. central bank will be aggressively raising interest rates for several months to come.
Powell is not the only influential set central banker to sound this hawkish on rates and ECB official warned over the weekend that Euro Zone weights
will have to move higher as well even as the economy their weekend is due in part because of Soren energy costs.
U.S. stocks still trading comfortably above the 52 week lows that it hit in June the big question is whether stocks will have to test those lower
levels again, given the tougher stance from policy makers.
A historic launch delayed for another day in NASA announcing it has scrubbed the launch of the Artemis 1 Rocket after engine issues the un-
crewed rocket was meant to be blasting off right about now on a six week flight around the moon and back it is using the most powerful rockets and
Saturn five took the crew of Apollo 17 to the Moon nearly 50 years ago.
The Artemis program is designed to eventually land humans on the unexplored Lunar South Pole and could ultimately serve as a stepping stone for a
journey to Mars as well. NASA Administrator Bill Nelson, who is a Former Astronaut himself, just addressed the launch delay; he said delays are part
of the learning process.
(BEGIN VIDEO CLIP)
BILL NELSON, NASA ADMINISTRATOR: And so you know, it's just part of the space business. And it's part of particularly a test flight. We are
stressing and testing this rocket in the spacecraft in a way that you would never do it with the human crew on board. That's the purpose of a test
(END VIDEO CLIP)
ASHER: Rachel Crane joins us live now from the Kennedy Space Center in Florida. So Rachel, we've known for the past few hours that it really
wasn't looking good today you had issues when it came to lightning, there was hydrogen fuel leak also issues with the engine number three in
particular, and they're still trying to troubleshoot that if they are going to launch instead on Friday, right?
CRANE: That's right Zain. We don't exactly know the nature of today's issue with engine number three. NASA will be holding a press conference in a few
hours, we'll hopefully we will glean some more information.
But you know it really all hinges on what exactly the problem is here. If they be able to fix it out on the pad, they could potentially make that
Friday, launch opportunity. But if it is a serious problem, they may have to roll the vehicle back to the Vehicle Assembly Building and that would be
a much more much longer delay. So it remains to be seen really when they will attempt to launch Artemis I next, depending upon what the issue here
was with engine three.
But as Bill Nelson was just saying, you know, this was a test launch. It's important that people remember that. And so this is really all part of the
learning process. Nobody here and no one in the Space Committee is really all that surprised that today's launch was scrubbed.
In fact, all of the rehearsals, which are called wet dress rehearsals leading up to today, they had significant issues. Three of them were
complete failures, they had major technical issues. The fourth was deemed a success by NASA, but they never got into the countdown to the place that
they were targeting.
They were targeting nine seconds and they only made it to 29 seconds. And I know that doesn't sound like a lot. But in those last, you know, few
seconds of these launches, a ton of stuff happens. So they weren't able to run through quite as much as they had hoped. So today's sort of goes back
into the rehearsal category, and hopefully, whether it's this week, next week, they'll have another launch attempt soon.
And this you know rocket this historic launch will take off and I just want to point out this rocket behind me. It is the most powerful rocket ever
created. I mean the Saturn V that's what powered us to the moon this thing is even more powerful than that. And as you pointed out, there was no crew
on board so today's scrub is not quite as complicated as it would be if there had been crew on board you know we know that they have to de fuel the
CRANE: But they don't have to, you know get the astronauts out of the Orion capsule but what is inside the Orion capsule Zain is pretty cool. There's a
lot of science onboard hitching a ride on this Artemis I mission and Moonikin Campos is one of them.
He's a full size mannequin that sitting in the commander seat and he's wearing the flight suit that astronauts will wear on these missions also
has all kinds of sensors to measure the vibration and the acoustics also radiation send sensors.
And then there's two additional what they call phantoms, which are mannequins, but just from the torso up, and they're modeled after women
because of course, with Artemis III, it's going to be the first woman that landing on the lunar surface.
And women we know are more impacted by space radiation than men. So one of these phantoms is the control and the other one is wearing what's called
The AstroRad vest. This was developed with Germany and Israel, and it's to potentially protect the astronauts that will be flying on these missions
from the deep space radiation from the energetic particles, and solar radiation would have you so it was really to try.
And test that and see how effective this vest could potentially be to shield our astronauts from that dangerous radiation you experience when to
pass the Van Allen belt so a lot of science on board waiting to hitch a ride, whatever this thing eventually takes off. But Zain, as you know,
today is an officially a scrub.
ASHER: Yes, they really do have to get it right, right, because there's so much riding on this not to mention about $100 billion, as well. But just
talk to us about what this sort of new era of space exploration actually signals here, the end goal is to be able to have a permanent base, if you
will, for humans, on the moon, just walk us through that?
CRANE: That's right saying and I just want to point out that be SLS, each flight of this system is going to cost about $1.4 billion. That's an
incredibly high price tag, and has been criticized by many this program, as you pointed out has been incredibly expensive, really, really delayed.
Today's just one of many delays that this program has experience. But as you pointed out, this is all really in the attempt to not just have flags
and footprints like we did in the 60s and 70s on the moon.
But to create a permanent, a permanent presence on the moon to be ordered to run through the paces do all the technological experimentation, the
science experimentation that is needed in order to do you know the Holy Grail mission of SpaceX exploration, which is land a person on Mars.
Now in order to land humans on the moon, NASA is not just relying on that rocket and that space capsule behind me they've also partnered with SpaceX
and a nearly $3 billion contract to create what's called the human landing system.
Now that will be utilizing SpaceX is starship SpaceX has been working on for years now and searchable fly on its super heavy booster.
This is a mega rocket, and it's going to be way more powerful than that rocket behind me the SLS has about over 8 million pounds of thrust. But
when starship eventually flies, they haven't even had an orbital test yet.
So you know, this is gonna be this is a long time in the making. But when it eventually flies, it will have over 17 million pounds of thrust. So that
is going to be a gargantuan rocket there.
But right now SpaceX and NASA, they're not seen as competitors on these lunar missions that are actually as it pointed out, working together, and
we can't put astronauts on the moon as of now without working with SpaceX to create that human landing system.
So you know a lot of moving parts here. And before you know that that's still in development, as I pointed out, starship hasn't even had an orbital
launch yet, so it's going to be considerable amount of time NASA says that they're planning to land humans on the moon in 2025.
If my 10 years covering space has taught me anything, those timelines tend to really slip saying, so I'm not so confident that that's going to happen
in 2025. But there's certainly going to be a lot of very exciting milestones like Artemis 1 between now and then.
ASHER: As you mentioned, you know, delays are just part of the game. Yes, they have to get it right here. Rachel claim life was that always good to
see you my friend. Thank you so much. Stay with us move much more to come after the short break?
ASHER: Is the stories making headlines around the world the g7 and Moscow say they welcome a plan visit from the world's nuclear watchdog to the
Zeppelin's nuclear power plant in Ukraine.
It follows new fighting around the complex with Russian and Ukrainian officials reporting more shelling over the weekend.
It comes as Ukrainian forces have begun shaping operations to prepare for a significant counter offensive. According to U.S. officials, Sam Kiley has
more on what that offensive could mean six months into this brutal war.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: The Ukrainian Ministry of Defense has confirmed that an offensive is currently underway in the
south along the southern battlefields predominantly and Mykolaiv in Kherson provinces.
And this is because clearly their target is going to be the city of Kherson sits not only on the Dnieper, but at the head of a canal supplying water to
Crimea, which the Ukrainians cut in 2014.
Kherson was among the first targets first cities captured by the Russians. So it's clearly a very, very important strategic location. This is also a
very important moment for Ukraine. Just over six months into the war.
They've been talking a lot about a counter offensive. My colleague, Jim Sciutto, says that his sources are describing these early stages as what
they call the shaping operations going after command and control systems, air defenses and so on.
But we're also hearing anecdotally on the ground from soldiers that a number of small villages may already have been captured as the Ukrainians
tried to get on the front foot in this war and all that is coming at a time when the Zaporizhzhia region nuclear power station remains itself on the
front line of the United Nations saying that it is hoping to get inspectors into that location with the agreement of the Russians and the Ukrainians in
the next few days, Sam Kiley, CNN in Zaporizhzhia region.
ASHER: Pakistan's army is conducting rescue operations in areas devastated by severe floods officials say the unprecedented climate disaster has now
killed more than thousand people since mid-June.
The government is appealing for help from abroad saying a third of the country could be underwater by the end of the monsoon season, CNN Anna
Coren has more.
ANNA COREN, CNN CORRESPONDENT: A young life hanging in the balance winched across rushing water in Pakistan's floods soaked Cinder province safely off
the bed frame it's an older man's term. Lucky for some, but these floods have killed over thousand people since mid-June including Over 350 Children
According to UNICEF
ABDULLAH FADIL, UNICEF REPRESENTATIVE IN PAKISTAN: This is a calamity of proportions I think Pakistan has not seen. Some of the areas hit are also
some of the most vulnerable areas of the country.
COREN: That normally goes through three to four monsoon rain cycles each year. It has had eight in that time, and the wet season will drag on
Extreme heat has baked the earth. The rain can't soak in flash flooding comes next. The satellite images show the Indus River swelling, nowhere for
the water to go and few routes to escape it.
Highways through central Pakistan have been cut off, bridges broken as villages wash away in the northwest of the country. Army choppers rescue
desperate people, another person saved others scramble for the next helicopter.
FADIL: This is a climate crisis, Climate that has been mostly done by richer countries contributing to the crisis. And I think it's time that the
world responded to support Pakistan in this time of need.
COREN: As Pakistan and NGOs appeal for international aid. The weather forecast is finally brightening all a hopeful for a break in the rain, a
chance to further assess the damage.
What is immediately obvious the toll that climate change is taking Pakistan's relatively low carbon footprint not enough to save it from the
dangers of our warming world. Anna Coren, CNN, Hong Kong.
ASHER: In Iraq, supporters of an influential Shia cleric have stormed the Republican palace in Baghdad's green zone it comes after Muqtada Al Sadr
announced he would withdraw from politics after tensions over a political deadlock.
The demonstrators have forced the Prime Minister to suspend all meetings until further notice. Air France that suspended two pilots of fighting
while at the controls during a flight the airline said the altercation in the cockpit was quickly resolved.
Without affecting the plane safety Air France only acknowledged the incident which happened in June after it was reported in a Swiss newspaper.
Let's get more now from CNN, Scott McLean.
SCOTT MCLEAN, CNN CORRESPONDENT: This actually happened back in June. This was a flight from Geneva, Switzerland to Paris, France a little over an
hour flight time, and there was some kind of a disagreement in the cockpit which flared up into a physical altercation.
We don't know what kind of physical altercation but in a written statement, the airline described it in a much more benign way saying that the pilots
exchanged inappropriate gestures though they have also confirmed that the pilots were not giving each other the finger this was something that turned
Now the airline Air France says that the flight continued on normally that the issue was resolved. It's not clear when or how Air France actually
found out about what had happened but it has gone ahead and suspended the two pilots while it looks into it.
This is not the only safety mishap for Air France in the news lately. Last week, the French Air Safety investigative agency called BTA released a
report on an incident that happened back in December 2020 on a flight from the Republic of Congo to Paris, France.
In that case, a few there was a fuel leak and safety procedure dictated that the pilot should have shut down the engine with the leak. But that
didn't happen. And according to the report, that created a fire hazard. Now this was not an isolated case.
The report detailed other incidents where pilots haven't followed the proper safety procedures and taken together. It suggested there is a
certain culture among some Air France crews which encourages a propensity to underestimate the extent to which strict compliance with procedures
contributes to safety.
Now the report also tries to put things into context, and that Air France literally flies thousands of routes every day. And so the number of flights
the number of crews being investigated, in the grand scheme of things is very small. Scott McLean, CNN London.
ASHER: Right the battle for the presidency in Brazil is heating up with the candidates clashing in a bad tempered debate on Sunday current president
Jair Bolsonaro traded insults with his main rival Luiz Inacio Lula da Silva and made a personal attack on a journalist who questioned him on his
response to the Pandemic calling her a disgrace. Stefano Pozzebon has more.
STEFANO POZZEBON, JOURNALIST: It was a debate that almost didn't happen with Brazilian President Jair Bolsonaro, confirming his presence only hours
before the broadcast began.
Bolsonaro and former President Luiz Inacio Lula da Silva were joined by four other candidates to discuss the economy the response to the COVID-19
Pandemic and the environment.
Lula was questioned about the series of corruption scandals that took place while he was president between 2003 and 2010.
POZZEBON: And he defended his record in power saying that millions are so their living conditions improve while he was president.
(BEGIN VIDEO CLIP)
LULA DA SILVA, FORMER BRAZILIAN PRESIDENT: You say you didn't see those changes I'm talking of, well, your driver saw them. Your gardener saw them.
Your cleaning lady saw them. Go ask her. She saw this country doing better. She saw her child could enter a university.
(END VIDEO CLIP)
POZZEBON: Bolsonaro instead went on the attack, saying that the Brazilian economy is faring much better than other countries in the region and
personally attacking local journalists the Virag Magali Aisha, after she asked him a question about vaccination rates.
All the other candidates expressed solidarity with the journalist and negotiation. But with little over a month before the first round of the
Brazilian election on October the second, the race already seems a two way affair between Lula and Bolsonaro for CNN, this is Stefano Pozzebon.
ASHER: Right you're watching 'First Move' stay with us we'll have much more after this short break.
ASHER: Right U.S. markets have opened lower a second day of losses following Fed Chair Jerome Powell's hawkish policy speech on Friday, all
the major averages falling and other trading or the tech stocks are off their worst levels of the session.
Stocks up certainly under pressure after impel warning on Friday that the U.S. central bank will have to keep raising rates to get inflation under
control. You can see the DOW they're only been trading for about half an hour.
So the DOW is down about two hundred points. Let's bring in Paul R. La Monica to break it all down. So with Fed Chair Jerome Powell has comments
on Friday, what does that mean, for tech stocks, growth stocks, like especially the NASDAQ just walk us through that?
PAUL R. LA MONICA, CNN REPORTER: Yes, that's a great question, saying I think there had been a lot of hope that if the Fed were to slow down the
magnitude of its rate hikes that would lead to an environment where Investors would once again embrace riskier assets.
Growth stocks, like tech crypto currencies, but you're seeing Bitcoin plunging today below 20,000. Again, really, what's happened is that
Investors now have this rude awakening that the Fed is still very concerned about inflation?
They're not going to relax anytime soon. So we're likely to see if the data justifies it. Another three quarters of a point hike in September and I
think the Fed is just going to have to take every future rate decision meeting by meeting depending on what's happening with the jobs market and
ASHER: How much have Investors how much of the markets already priced in a lot of these rate hikes?
MONICA: Now all of a sudden they are once again starting to price and more aggressive rate hikes that just a month ago we were down to less than a 30
percent chance of a another three quarters of a point hike.
At the September meeting, people were really hoping that the Fed could start to slow the pace, half point hikes, then maybe quarter point hikes
down the road that's not in the cards anymore.
Now you're looking at 65 percent Probability of another three quarter of a point hike in September and that would be the third consecutive 75 basis
point increase. So the Fed very aggressive unprecedented type inflation fighting moves really not seen since the days of Paul Volcker.
ASHER: Right Paul R. La Monica live for us that we'll see what happens to the market over the course of the rest of the day. And that is it for the
show. I'll be back in a couple of hours with my show 'One World' 'Connect the World' with Becky Anderson is up next you're watching.