Return to Transcripts main page
First Move with Julia Chatterley
World Leaders to Address Climate Crisis Today; Investing for a Net- Zero Future; Inflation, Crime two of the Main Concerns for Midterm Voters; Former NBA Champion helps Bahamas Rebuilt after Doran; Pandora Reports Solid Third Quarter Growth; Twitter Lays Off Africa Staff Four Days after Office Opened. Aired 9-10a ET
Aired November 08, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RAHEL SOLOMON, CNN HOST: Warm welcome to "First Move", I'm Rahel Solomon filling in today for Julia Chatterley. Great to have you with us on this
midterm Election Day in the U.S. American voters are heading to the polls to decide the balance of power in Congress.
All of the 435 seats in the House of Representatives are up for grabs, as well as 35 seats in the Senate. And while Republicans are favored to win
back control of the House, while the race for the Senate that could go either way. Global Markets of course, watching the faceoff between the
Democrats and the GOP very closely.
Investors do tend to like divided government, because it lessens the chances for major policy changes. They'd also like a quick, uncontested and
yes safe outcome to today's contests as well. For now, as you can see, the major U.S. averages are on track for the third straight session of gains
with Dow Futures up about four tenths of a percent.
The NASDAQ closer to seven tenths of a percent in the S&P also about up four tenths of 1 percent and we will have expert analysis of what to expect
later in the show from Greg Valliere. He is the Chief U.S. Policy Strategist at AGF Investments.
The economy, the number one concern for many voters going to the polls today President Biden and Democrats have been largely criticized for not
doing enough to help bring down inflation, which is hovering near 40 year highs. And voting is underway across America amid uncertainty about the
So who better to speak about that, than CNN Chief Business Correspondent, Christine Romans? Christine, good to have you with us! You and I talked
about this, it seems like daily, this tale of two economies you have unemployment very low, job creation still strong.
But inflation remaining near 40 year highs last check about 8.2 percent. And that's really shaping how people feel about this economy today. They're
going to speak with their votes.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: They are and you know voters tend to punish the party in power when they feel dissatisfied. And
the party in power is the Democratic Party. Look, there are a lot of things to point to that are going well in the U.S. economy, U.S. households are
stronger than they've been in years, consumer spending is holding up.
You mentioned the jobs market still near a 50-year low in terms of the unemployment rate. But people feel bad about inflation, inflation at levels
we haven't seen in 40 years. So that is the number one factor, I think.
Punishing the party in power is what many people are going to think is going to happen here when they go into the ballot box. Now, let's be clear,
there are a lot of uncertainties here. You've got a lot of early voting people who are voting on the abortion rights issue in this country and gun
control in this country.
So there are a lot of other things that could be animating voters. We won't know for sure until all the voting is said and done. But certainly 40 year
high inflation is top of the list.
SOLOMON: Absolutely. Christine, do you think anything changes after this election? Of course, we get that key inflation report on Thursday. Does
today just this idea of at least making your voice heard? Does it change sentiment moving forward?
ROMANS: Yes, sort of exercising the demons, right, by going into the polling place, and just you know, voting it fiercely, if you will? Look, I
think it's really important to remind our viewers that in the United States, Congress has the power of the purse strings. So taxing and
spending, raising a debt limit that will be hit sometime next year.
These are all really important functions of this Congress. And so depending on the makeup of Congress, you could see different results. Right now it's
looking like you could be heading into a period of gridlock, which is I think, what the markets traditionally like to see where if you were to have
a Republicans controlling the House and the Senate Democrats in the White House, you could have some form of gridlock here.
That is what markets traditionally like to see. It keeps sort of the uncertainty out of the whole scenario. But the debt ceiling is really
important for next year.
SOLOMON: Yes, and it's an interesting point about the gridlock, you it lessens the chance of major policy changes; it also lessens the chance of
major spending. So it's an interesting point, Christine, thank you. Christine Romans there. And Becky Anderson now picks up the reins at the
COP 27 Climate Summit in Egypt, Becky.
BECKY ANDERSON, CNN ANCHOR, CONNECT THE WORLD: Thank you very much indeed, Rahel and a warm welcome from Sharm el-Sheikh, where the scale of the
climate crisis is being laid bare. There is a somber narrative I have to say here how best to ensure the survival of humanity. It sounds like a tall
But there is work going on day two of COP 27. We're going to hear from an array of world leaders. And among them you can sense grave urgency.
ANDERSON: The problems they must address are not new, but simply put a lack of progress on the major issues high on the list. The hesitant move towards
green energy I challenged the President of Kenya, William Ruto about this so called green energy transition during the summit, he tweeted and a quote
here, developed nations must switch from carbon heavy energy and direct their industrial investments to Kenya and other African countries that are
already producing clean energy. That way, we will save the globe from climate change. I put it to the President that other African nations rely
on and may want to rely on going forward cashing in on fossil fuel exports. So how do we square that circle? Have a listen.
(BEGIN VIDEO CLIP)
WILLIAM RUTO, KENYAN PRESIDENT: Two wrongs never add up to a right. It was not right for us to pollute this world to the extent that we are facing an
existential threat. We have real opportunities.
Let me give you an example. In Kenya, we have huge deposits of coal. We have deposits of carbon we have huge deposits of hydrocarbons.
But we have made the conscious decision that we are going to go green. And today 93 percent of our energy is green. And we pride ourselves that it's
never too late to make the right decision.
(END VIDEO CLIP)
ANDERSON: Let's set ambitious targets realistic. Well, CNN Senior International Correspondent David McKenzie Joining me now. And earlier, the
President described some of the tradeoffs, his government is forced to make as it deals with climate emergency. And we know what's going on in the Horn
We know how many people are close to starving. And so he laid out some real reasons why, you know, a clean energy future is important. What did you
make of what you just heard?
DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the proof is in the actions of the Kenyan government, you know, having been based in
Kenya, Becky, for some time, even then, which was some years ago, you saw the move towards geothermal energy, wind and solar energy quite
aggressively several years ago. But I have to say other nations in Africa are taking a different route.
You look at Mozambique, Angola, Namibia, parts of North Africa, and others all aggressively pursuing natural gas and oil deals with developed nations.
And there's that squeezed right now on Northern Europe and elsewhere, because of the war in Ukraine. And there is a need for many of those
nations to secure energy.
They're looking largely to Africa, not entirely, but largely to Africa. And that means that there's disconnect between the potential gains economically
that Southern African and East African countries can make in selling their oil and natural gas to the west but also the fact that we are trying to
avoid this climate catastrophe.
I actually had an interesting chat with the head of the United Nations Environmental Program. She said that she understands that there will be a
transitionary period. But by fully investing in fossil fuels right now, many activists say that you are really stopping any kind of progress that
we can make towards mitigating emissions in the future, basically exporting the emissions to those countries that haven't caused this issue in the
So while Kenya seems to be going on the right track, other countries are going on the wrong track, but they need financing to stop it you can't
expect countries to just pull the plug on the economic development. And I think that's one of the discussions and the importance of meetings like
here in Sharm el-Sheikh whether they can make any progress. We are yet to see it, Becky.
ANDERSON: David McKenzie here with me in Sharm el-Sheikh. David, thank you. Mobilizing the private sector then, to help the world to net zero is
massively important and has huge financial implications. It demands a change in thinking the China backed Asian Infrastructure Investment Bank or
AIIB is heavily committed to building climate resilient infrastructure and technology.
Their focus on developing and emerging economies and Jin Liqun is the AIIB's President and you heard David and I there discussing the
opportunities that Kenya sees in a world of clean energy.
ANDERSON: David also marking as I did with President Ruto the fact that a number of other African countries, quite frankly, want to see their dirty
fossil fuel resources benefit them effectively. And the criticism is that the first move to phase out fossil fuels is for state owned banks like the
AIIB to stop financing fossil fuel projects overseas, your response?
JIN LIQUN, PRESIDENT, ASIAN INFRASTRUCTURE INVESTMENT BANK: AIIB, Asian Infrastructure Investment Bank, was born to deal with the challenges faced
by members of the international community. And we were born to deal with climate change. And we want to promote infrastructure for tomorrow.
Infrastructure for tomorrow means we have to develop infrastructure for sustainable development in an environmentally benign way. And this new type
infrastructure should help reducing the emissions and deal with the climate change mitigation and adaptation issues.
ANDERSON: So well, let's talk about, you know, implementing on some of what you've just suggested. But before we do that, China backseat, AIIB, it's
worth noting the nation aiming to reach net-zero emissions by 2060. This will require trillions of dollars to be invested in green and low carbon
industries. Are they on track at this point?
LIQUN: You know ours is a multilateral development bank with 57 funding members now grown to 105. And all of the members are committed to net-zero,
particularly many developing countries, which certainly have lots of issues to deal with. But all of them are committed.
That is why we get support from all of our shareholders to deal with climate change. And I believe they are deeply committed to net-zero. And
I'm sure they will do everything possible to realize that net-zero in a program.
ANDERSON: You are in MDB, as they are known a Multilateral Development Bank. I was with John Kerry, just over the weekend. And he and others are
being very loud about the need for reform of organizations like yours, to ensure that you are fit for purpose in providing support for the
mobilization, and capitalization of financing.
So that countries like Kenya, and those in your region, can effort, a clean energy future. To those critics of MDBs President who wants to see reform,
you say what?
LIQUN: You know we are all for reform. But please keep in mind; this bank was created in the 21st century, on the basis of experience of all the
MDBs, which were created over the last seven decades. So we benefit from experience of the other MDBs.
And we also try to have some innovative features. So this bank could be lean, clean and green. Lean means we will be cost effective. Clean, anti-
corruption, corruption free green, we promote green economy.
And so we have also it's global, it's for growth, it's highlighting governance, and it's green. So as a new institution, we have already
learned from the clear institutions.
ANDERSON: So give me a good example of what the AIIB is doing as organized today.
ANDERSON: Are not without reform. What it's doing to help promote the adoption of clean energy?
LIQUN: First of all, as you see we are only seven years into operation. And we have financed or roughly $56 billion leveraging more money. Already 48
percent of financing is for climate change, mitigation adaptation, already 48.
And our objective is by 2025. At least the 50 percent financing were before climate change and pair Paris alignment. So this is what we do on the
ANDERSON: Before I let you go and thank you, because it's such an it's so important that we understand the employment of Capital through
organizations like you are in. Just one question away from climate change before I leave you've halted lending to Russia and to Belarus in the wake
of the war in Ukraine.
ANDERSON: How long do you plan to continue that policy for?
LIQUN: I declared our policy with regard to this issue. And we indicated very, very well, that all these projects will be for further review. And we
will do that by the very high standards.
ANDERSON: Final answer.
LIQUN: Thank you. Thank you very much.
ANDERSON: Thank you, sir good to have you really good to have you.
ANDERSON: Hold on that Jin Liqun, the President of the Asian Infrastructure Investment Bank joining us today. Rahel, it's so important that at an event
like this, you are talking to all stakeholders; you can get caught up to a degree in the sort of noise that comes from government leaders. And there's
a lot of noise here, and most of it is about climate justice.
And absolutely, rightly so you and I could speak for hours about loss and damage, for example. But it's really key that we sort of reveal the other
stakeholders involved in meetings like these because it's only when everybody is joined up, that you know, any work can be affected with regard
to climate change.
SOLOMON: Absolutely, it is crucial to have these conversations which Becky is why we're going to check back with you shortly. Thank you. And from
Egypt to DOW, China, one of Apple's main suppliers is recruiting again at a plant in China. That's where workers were seen fleeing after a strict
lockdown was imposed.
Foxconn now says that it is offering one off bonuses to staff who've returned to the company. Selina Wang is in Beijing. So Selina, what are
these incentives and do you think they'll work? Will they be enough to lure workers back?
SELINA WANG, CNN CORRESPONDENT: I mean Foxconn is betting that this is going to be enough. Apple and Foxconn, they desperately need more workers
at this facility in central China in Zhengzhou, we are talking about the biggest Apple iPhone assembly facility. And this COVID outbreak there has
put massive strain on Apple right before this key holiday season.
Now Foxconn is saying that living conditions and production it is slowly gradually getting back to normal. But they are still operating in this
closed loop system, which means that staff members they've got to live and work on site that is not an easy setup for these workers who have to be
away. They can't even see their families during this entire time.
Now Foxconn says it's giving a one-time bonus to workers who left and are choosing to come back equivalent to 69 U.S. dollars. That's a one-time
bonus. They're offering an hourly wage equivalent of four U.S. dollars for new workers. The background here of course, is that since there was that
outbreak in the Zhengzhou facility in mid-October.
There's been absolute chaos at the factory viral videos showing masses of workers walking miles and miles on highways even through farm fields in
order to escape the COVID restrictions at the factory campus. There were many complaints from workers about subpar living conditions about the poor
quality of food. And this has had a huge impact on Apple.
Apple putting out an announcement saying that this is going to temporarily impact their shipments and it will cause a temporary delay because the
capacity at the assembly factory has been significantly reduced. Now what all of this show is that Apple's reliance on China used to be a big reason
for its success? It was low cost efficient manufacturing now it's become a liability.
Apple here is just the latest victim of China's zero COVID policy. This country is stuck in a seemingly endless cycle of lockdowns, quarantines,
and mass testing, taking a huge toll on the economy, businesses, people's lives. All of this has made it China a much harder place for Chinese
businesses and global businesses to operate, Rahel.
SOLOMON: Well, it's a great example, Selina. I think of as you pointed out the delicate balance those foreign companies that operate in China find
themselves in trying to comply with these zero COVID policies, but also maintain business as usual. I think we're seeing that it's really hard to
Selina Wang thank you, live for us there in Beijing and coming up markets and midterms. It's a critical day for U.S. democracy and U.S. stocks. How
Wall Street will interpret today's voter verdict. That's just ahead.
SOLOMON: Welcome back to "First Move". Polls are open across America this Tuesday, as voters cast their ballots in the U.S. midterm elections.
Control of the House and the Senate are up for grabs, as well as the number of State gubernatorial seats.
It has been a hard fought election season with crime and the economy topping the list of voter concerns. Republicans who have attacked the White
House response to those two issues while they are widely expected to win a majority of House seats, less clear, however, who will come out on top in
Lots of concern about how today's vote will play out in whether there will be ballot challenges that could then delay results. In addition to today's
vote lies the very real possibility that Donald Trump the Former President will announce his presidential reelection bid coming soon. Trump who was
endorsed more than 200 candidates running today is teasing a big announcement for November 15, one week from today those comments coming out
Greg Valliere joins me now; he is the Chief U.S. Policy Strategist at AGF Investments. Greg, great to have you on a day like today! What do you think
is the most favorable outcome for Investors?
GREG VALLIERE, CHIEF U.S. POLICY STRATEGIST, AGF INVESTMENTS: Well, nice to see you. I'd say two things. Number one, a sense of predictability on
things like taxes I think, with the house almost certainly going to the Republicans, I think Investors can look at two years 2023 and 24 without
any change in the state tax and capital gains rates, the step up basis, top rates, everything stays the same.
I think that's good. The other thing quickly is Do we have an election free of allegations of fraud? I think that's a --, that will be a dark cloud for
SOLOMON: I'm curious; you sent a note this morning, Greg, that the price of food and gasoline determined this election. I spend a lot of my days
talking about the price of food and gasoline as a business reporter. And you say the White House was slow to react.
But as you know, I think the White House would push back and say those are not necessarily things that we directly control. Was this more so a failure
of messaging from the White House and the Democrats?
VALLIERE: Yes, good point. I think messengering was really crucial and the lesson, perhaps enough empathy. I think the Federal Reserve gets some
blame. You have to concede that there's inflation all around the world. But I think the White House refusal to acknowledge the warnings from people
like Larry Summers will come back to haunt them.
SOLOMON: I'm curious markets do tend to rise in the months after a midterm. But of course, this is a very unusual time for our economy. Do you think
markets will rise this time? I mean, you still have the Fed, which as you just pointed out is still hiking rates.
SOLOMON: I mean, do you think we'll still see that this time, or this is just really a very different economy?
VALLIERE: Well it's been a crazy year as you know, but I think that there will be a sense again or predictability, a sense that the markets won't
have all of this uncertainty to deal with anymore. You know, Trump is a wildcard. I mean, Trump has to be in the limelight, he craves the
publicity. And I think also he's going to announce next week, because he knows he may get indicted soon.
And it might lessen the chances that an Ex-President could be running again could be indicted. So there are a lot of things the markets will have to
worry about. But I think the main story is that by midwinter, the Federal Reserve will make it clear. They're about done with their tightening.
SOLOMON: And I think a lot of people certainly hope so. But I want to circle back to the Former President, President Trump, as you just mentioned
those comments last night. He said, I'm going to be making a very big announcement, very sort of, you know, pretty dramatic teas there.
So do you think it's inevitable that one he runs and then two, it sorts of feels like the clock resets and now we are in for another two year
VALLIERE: Isn't that ironic? We've had two full year of campaigning for this election. Now we're looking at two years of campaigning for the next
presidential election. So you know, I think Trump has to be careful not to overplay his hand, his base loves him.
But I'm often quite outspoken about Trump's nickname for Ron DeSantis. I mean, we really don't go through that again, with childish sophomore
nicknames. If so I think it's going to make people maybe weary of two more years of a Trump campaign.
SOLOMON: Certainly a lot more to watch both today and apparently in the days to come. Greg Valliere, thank you. Good to have you with us. He is the
Chief U.S. Policy Strategist at AGF Investments.
And joins CNN later for in depth special coverage of the crucial U.S. midterm elections that will determine control of Congress that starts at 4
pm Eastern. And next the building blocks of the future we will hear from a former NBA champion who was pioneering a project to prevent climate related
disasters. Stay with us.
ANDERSON: Welcome back to Sharm el-Sheikh! And the race to save the future of the planet that we live on we're at GOP 27th. This is the Climate
Summit, of course here in Sharm el-Sheikh. Germany, Belgium and Scotland are among the countries making new pledges to tackle climate change in
places that are most vulnerable.
The Prime Minister of Antigua and Barbuda says it's vital a loss and damage fund is established to help nurture a system of what he calls climate
diplomacy. Egypt's Foreign Minister tells me it's crucial that wealthy nations make well on their commitments.
Well, I spoke to Sameh Shoukry he spelt out what he thinks leaders need to do and why he is worried about governments backtracking on their promises,
have a look at this.
(BEGIN VIDEO CLIP)
SAMEH SHOUKRY, EGYPTIAN FOREIGN MINISTER: We want to see a clear commitment towards more reduction of greenhouse gases, more reduction of emissions,
more recognition of the importance of adaptation for developing countries, and the provision of the finance to enable developing countries to
undertake the responsibilities.
ANDERSON: Do you worry that the worlds' richest are backtracking?
SHOUKRY: Absolutely. It's a worry for any of the parties of the conference to backtrack, and certainly those in the developed world who have the
resources who have the resilience to be backtracking would send devastating message and would have a very negative impact on the issue of trust.
The issue of trust is an important one where there's a feeling of commonality and that we're all in this together and must shoulder the
responsibilities, differentiated responsibilities.
ANDERSON: You have talked about the pressing issue of funding arrangements specifically for developing nations under what's known as loss and damage.
Now, last year, high income rich countries blocked a proposal for a financing body under that scheme. How can you be sure that that won't
happen again this year?
SHOUKRY: Well, I think what we have achieved after 30 years of discussion of this item, during this COP after very strenuous negotiations that the
presidency team led it to incorporate on the agenda, an item related to loss and damage in itself, and achievement.
But we are not going to limit ourselves to that. But we also have to be practical. This is an issue of sensitivity and of complexity. And we will
be confident to move it ahead in terms of discussion, and within a specific timeframe that the parties can come to an understanding on the finance
mechanisms that would provide the assistance to developing countries when it comes to loss and damage.
(END VIDEO CLIP)
ANDERSON: Sameh Shoukry is the Egyptian Foreign Minister and President of this COP 27. Well, one man is taking the mission to help those most at risk
from climate change into his own hands. Former NBA Champion Rick Fox is the driving force behind a new housing project in the Bahamas, where just three
years ago, lives and livelihoods were torn apart by Hurricane Dorian.
He is now pioneering the use of Partanna, which is a building material that removes carbon dioxide from the atmosphere with that he's working to create
the world's first carbon negative housing community to reduce the likelihood of future disasters.
And I'm absolutely delighted to say that Rick Fox is joining us now. It's good to have you. The project looks amazing. And I want to hear about what
you're doing before that let's just step back and remind ourselves what happened three years ago and why climate crisis is such a risk to an island
RICK FOX, FOUNDER, PARTANNA BAHAMAS: Well, a country that I care deeply about the Bahamas is a home to the climate disaster alley, as I would call
it nearly. We were hit with Hurricane Dorian that misplace displace 30,000 people, destroyed our homes put us further into debt.
And as we move forward, trying to find solutions of innovation we have to find better ways to build and quite frankly whoever building right now is
not strong enough not safe enough not sustainable enough.
FOX: And Partanna is a building material that removes carbon dioxide out of the atmosphere as it cures, and avoids carbon emissions to the process of
creation, also creating carbon credits, which allows us to use for good.
ANDERSON: And you mentioned a couple of things, the loss of lives for an island that is debt burdened. The damage and the loss are huge of course.
We hear a lot about loss and damage here. But it is fantastic.
And it is fantastic to hear you talking about one project which creates a solution, which is sort of multifaceted. How did you come across this and
why? I get the emotional attachment to what's going on what got you involved, specifically?
FOX: Its personal disaster survival, a need for action. There's been a lot of talk, this is my first COP 27 and it's nice to be with likeminded folks
looking for solutions looking to innovate. I'm fortunate to have a partner in Sam Marshall, two of us came together had an experience with us, like,
be impacted by climate change in this way.
We took two ingredients, and we modernize cement. So when you have a need for solutions, and it's immediate, you don't have time to debate any
longer, you'll find solutions come from the most unlikely places.
And so we were able to put our heads down. And it really developed this through some scientific partnerships, some of the best people in the world.
And it's led to a solution that we have here now that can change the world, we believe in the way we built.
ANDERSON: You said this is your first call, and welcome.
FOX: Thank you.
ANDERSON: For most people here, they are not COP. So I guess for our viewers sake, it's really important to understand what you're achieving
here, because as we've said earlier on in this show it's not just about governments getting together and the sort of speeches that we hear, which
are important sort of interviews I get to do with the Egyptian Foreign Minister, which is important and illuminating.
It's actually the work behind the scenes at an event like this, that matters going forward, just explain your experience, if you will?
FOX: Well, beyond the introduction of our company in the technology that we have, there's an opportunities to share with countries with developers, the
technology available, make it available to them to sit and talk about the way they'd like to see that used in their countries.
How they can remove D link, basically, development from pollution is what our mission is. And when you have technology at the forefront of solutions,
it affords opportunities in moments like this and sit down and really get things done and use get structured.
As you mentioned, at the beginning of this, at the Bahamas, they're stepping out, they are on the front line, so they don't have time to find a
solution and innovation. They have to move now, other countries that have desalination plants, where waste product, brine, which is a huge part of
We use that. We can reduce the - waste in the world and increase water supply. So we provide an option in these conversations throughout the week
where we talk to elite world leaders, developing leaders, private sector leaders, who are looking at us as a company that can be a part of the
solution and change.
ANDERSON: One of the issues we know is so important here are the discussions about catalyzing funding? You're experiencing this firsthand,
you're not going cap in hand by any stretch of the imagination.
ANDERSON: But this is about finding innovative solutions and ensuring that they get part of the funding that is available, because is it your
experience that that funding is actually becoming more available at this point?
FOX: It is my first COP as you mentioned. So I'm hoping we can have those conversations where we don't want to be CapEx intensive solution. But it is
a reality of innovation when you're looking to bring technology like this to the world, you need partners, you need individuals that are willing to
join in the financing of these matters.
You talk about loss and damage. Countries are here in some cases - hand asking for help. I believe people are more inclined to help those that help
themselves. And when you're not waiting for others to solve your problems and you're able to get out there and create solutions yourself. I think
you'll find more collaborative conversations in the area of financing.
ANDERSON: You're absolutely right. How scalable is this briefly?
FOX: Very scalable. You can go to partana.com and take a look at it. We tell you everything about the science. We will scale as fast as the world
will call on us. So we invite you this is our invitation. Please reach out.
If you're a country if you're a developer that wants to change the way we build in the world. 38 percent of our emissions come from the construction
industry 9 percent coming from cement and we're an alternative bonding solution to that.
FOX: We provide a way forward that's nature positive regenerative building materials. Can you imagine that? It's all possible.
ANDERSON: You missed the game?
FOX: I do. I know shack - you were - the other day. I miss - and I miss Kobe. I missed the days of living a championship driven purpose life. And
I'm doing it now on this side of the climate world here with so many amazing people like yourself, you know, you take me around the world, all
around the world. I see you every morning, Becky, thank you so much.
ANDERSON: Good stuff. Well, it's a joy to have you on and so important that our viewers get to you know, hear what's going on the ground. And why it is
that events like this are so important.
FOX: Thank you for taking your time.
ANDERSON: Thank you, Rick Fox in the house. Rahel, we will be back with more after this.
SOLOMON: Welcome back to "First Move"! And the midterm vote is on across America voters heading to the polls to decide the balance of power in
Congress. As Americans cast their ballots we've got a cautious market open.
You can see the DOW is up about three tenths of a percent. The NASDAQ is just slightly lower and the S&P is just about flat. Now Wall Street does
tend to do well after midterm votes, especially when the outcome is a divided government.
That said this has been an unpredictable year to say the least for U.S. stocks the Fed's ongoing rate hike campaign that's weighed on markets for
months while that could ultimately be more critical for investors going forward.
Also today social media sites like Facebook, Twitter and YouTube will all face intense pressure to police any Election Day misinformation on their
sites. Now Facebook's parent company Meta has banned all new ads from the platform in the past week, and says that it will also remove posts intended
to suppress voter turnout or question election legitimacy.
More than 40 million Americans have already cast their votes in early voting in some 47 states including yours truly. That said experts say it
could take days or longer for all the results to be finalized. And investors are not just watching how the midterm elections shake out but
also it is earning season that's also well underway.
And Jewelry Maker Pandora known for its signature charm bracelet, well they're up just a bit more than 8 percent. That's after reporting solid
growth in the third quarter. However, sales in the U.S. fell for the quarter and in China sales and revenue both fell sharply and that's due to
the country's strict zero COVID policy.
SOLOMON: So it's CEO says that the shopping patterns of its customers are strong. So let's discuss. Joining me now is Alexander Lacik. He is the CEO
of Pandora. Alexander thanks for being with us today! Congratulations on the quarter. Investors seem to like it although it seems like it was a bit
of a mixed picture on the sales front sales appeared a bit more challenging, in the U.S. and China walk us through?
ALEXANDER LACIK, CEO, PANDORA: Well, I mean, if you go back a few years, it was like you had one movement, because the conditions across the globe, the
macro was kind of similar across the globe. What's happening now is we have, let's say, a challenge situation across the globe.
But they're very different drivers and very different timings on this which means that kind of you really have to peel the onion to understand if a
business is doing well or not in general our businesses in a very good place.
Now, if we talk specifically about China, we have to bear in mind that China's mainly 3 percent of our revenue in quarter three. So yes, of
course, I wish that the government there had a slightly more lenient approach to the regulations, because our traffic is down 60 odd percent. So
it's very difficult to trade under those conditions.
So we have to kind of wait for the Chinese government to start easing up a little bit in order to see different numbers coming out of China. Then we
look at the U.S. our organic growth is down three points in the quarter which I think we will have to be very satisfied with given last year with
the stimulus checks this whole jewelry market rose by almost 50 percent.
We grew a little bit faster than that. But what I kept saying to my shareholders, and the analysts, like, throughout the whole year last year
was like, this is unnatural. These will kind of reset during 22 and that's pretty much what's happening? So in that context, we'll be down only three
points. We feel actually quite strong about that.
SOLOMON: And let's stick now with the consumer, the U.S. perhaps, as well, but also more globally. I mean, what are you seeing with consumer spending?
Because you know, I spend practically every day listening to these warnings about recession, but what are you seeing with consumer spending?
LACIK: So we get this question a lot. And the approach I've taken is to say, OK, rather than speculate, let's look at the metrics that can somehow
paint the picture. And the typical metrics that we look at to kind of diagnose the situation is things like traffic, the basket size the
conversion rates, the transaction volume, and the units per transaction.
Across the globe, let's park China for two seconds. But across the globe, those metrics are actually very strong, only odd one, the only soft one, I
should say, is in Italy, where we can now see that the macro is starting to influence. So we're down I believe it was five points in terms of organic
But I think that's unfortunately the situation in Italy. Otherwise, across both quarter three, and October, in fact, those metrics remain intact, so
they remain strong traffic is good.
SOLOMON: I think that's interesting. So remain strong now. But is Pandora preparing for the potential of that changing?
LACIK: Listen, any good management team needs to be two steps ahead of the market in my view. So it means that you need to play with different
scenarios. Of course, the sunny side scenarios is the world goes back into kind of a Highlife mode, again, likelihood of that right now probably most
people would say is low.
Therefore what we have done, we've planned for a scenario where actually numbers could look a little bit different. But just to give you a flavor of
that when we are in the midst of the COVID pandemic.
Our business was down 11 points that year we managed to deliver an EBIT of 20 percent and return almost 5 billion Danish Kroner to our shareholders.
So actually, our business model is extremely resilient.
SOLOMON: I see. So but I just want to get a bit more specific. So what does that preparing for potential downturn look like? Is that closing stores? Is
that potentially layoffs? What does that scenario look like for Pandora?
LACIK: Fair question. So the first one is to look at is when interest rate goes up, the silver price goes down. I mean, silver isn't my biggest raw
material. So actually, I'll get tailwind coming into next year because we have a hedging policy in place.
So we actually have a quite good tailwind coming in next year on roll, then if you look at pricing, we've just made a pricing move. So on average,
we've raised our prices by 4 percent. So that's going to give us a little bit of a cushion.
And then the final point, which we've looked at, is the number of projects that I have, because each project you start up typically the way we've run
it was to add people and add funding. So what we've said is we've kind of streamlined the portfolio of initiatives and say we have to make do with
the people we have on board today.
And then we just have to sequence all these initiatives. So those are kind of the three main parameters which are going to protect the profitability
structure of the company.
SOLOMON: Here's hoping. And I have to let you go but very quickly if you can, Alexander, I'm so curious to know, how is the global launch of the lab
created diamonds going? Is that catching on? Are people really buying into that?
LACIK: Yes. I mean, in fact, we only launched in last year in the UK and the second country to come on stream has been North America, we use it and
initial results actually very promising. It's in the stores where it's trading its making up roughly 5 percent of the business.
I have stores doing more than 10 percent of the business and I have stores that are roughly about two but on average, it's 5 percent share business
after only seven, eight weeks, so we're very pleased so far.
SOLOMON: And it is one to watch for sure. Alright, Alexander Lacik, the CEO of Pandora thank you.
LACIK: Thank you.
SOLOMON: And coming up after the break, the Elon effect. Twitter is still the talk of tech town. The new owner says it's more popular than ever.
We'll take a look coming up next.
SOLOMON: Welcome back! Elon Musk says that he hopes that Twitter's servers don't melt because he claims in this tweet that Twitter usage is at an all-
time high lol! Paul R. LA. Monica joins me now for the latest twist and turn in this saga.
Paul another morning another Twitter headlines we do know that Elon can be very tongue in cheek. What do we know about this statement? What is he
basing this off of?
PAUL R. LA. MONICA, CNN REPORTER: Yes, he's very tongue in cheek very bombastic as we know. One of the problems now that Twitter is no longer a
publicly traded company is that there are certain things that they don't really have to disclose to regulators as often or to investors for that
He did in a follow up tweet show a stat that looked like it was the spike in daily active users global and U.S. over the past week or so. But it's
hard to really know if you know the users and traffic is at an all-time high as he claims.
And again Rahel I mean, this is a man who is often made very bold claims about when he's going to meet certain deadlines for Tesla that wind up
coming in passing. And he has to extend them so not to say that he's not telling the truth, but it's hard to know if he really is?
SOLOMON: Yes. And it sort of reminds me of that expression. There is no bad thing is - there's no such thing as bad publicity, which Elon seems to be
running with. Paul, we do know that we are getting some reports that Twitter is also closing down operations in Africa just four days after
launching. Walk us through what do you know?
MONICA: Yes, I mean, we have reports from CNN that unfortunately, it looks like the offices in Ghana for Africa that were just recently opened are now
shutting down and obviously Elon Musk is taking a hatchet to all of Twitter's operations globally.
MONICA: There have been massive layoffs. We have seen the reports of that people at Twitter talking about how they've been let go. And it just begs
the question of what is Elon Musk's commitment to Twitter going to be as a global company if you are shutting down the operations in Africa?
So I do wonder, what does come next are there? Is this going to be a company that focuses almost entirely on the U.S. and other developed
markets at the expense of developing emerging markets? We don't know yet. But this isn't a great sign.
SOLOMON: Absolutely. And more to Paul, I'm sure we will be talking about it very shortly, if not here in the hallways here at CNN. So thank you, Paul R
LA. Monica. And that is it for the show. I'm Rahel Solomon in New York. Thanks for watching. Becky Anderson will be back with "Connect the World"
from COP 27 right after this.