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First Move with Julia Chatterley
PCE Price Index Below Fed Projections In November. Aired 9-10a ET
Aired December 23, 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 INTERNATIONAL ANCHOR: A warm welcome to FIRST MOVE. I'm Rahel Solomon and today for Julia Chatterley, great to have you with us.
Among our top stories this hour the weather outside is frightful. The U.S. getting pummeled by a fierce and dangerous pre-Christmas storm. It has left
hundreds of thousands without power and thousands of flights canceled on a crucial travel day. We'll have a live report.
Plus, Sam Bankman-Fried freed before head of collapse crypto trading firm FTX out on $250 million bail, will he plead guilty or not guilty at his
court appearance next month. Details just ahead.
And Tesla turmoil, Elon Musk vowing to stop selling Tesla stock for at least a year and that ascending shares higher pre-market after a 9 percent
fall on Thursday. And then just released U.S. economic news, the Feds preferred measure of inflation that would be the core personal consumption
index, rising two-tenths of a percent month-over-month and 4.7 percent year-over-year, pretty much in line with expectations.
Now one key number here though is overall PCE inflation, which came in lower than Fed projections year-over-year. Let's take a look at market
reaction. Pretty much muted, but still green arrows across the board between the DOW, the NASDAQ and the S&P. U.S. Futures losing earlier gains
and pretty much trading flat. Now all of this though coming after a 1.5 percent drop in the S&P on Thursday.
Now stocks fell on Thursday in that previous session after new data showed continued resiliency and the U.S. economy even as interest rates hit 15-
year highs. Christine Romans joins me now. Christine, great to have you. So, look, this is yet another - yet another inflation report that shows
moderating inflation. I mean, what are some of the other things we're learning from this report? What stood out to you?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, the inflation peaked line to the ledger is getting another piece of evidence here. What
struck me, you mentioned that core rate of 4.7 percent annual PCE Price Index, that number is the slowest since October 2021. So, remember, late
last fall, we really saw inflation start to just sort of boil right up to 40-year highs, and it was a real problem for much of this year, then since
the summer, you've started to see one after another these little hints that the worst of inflation might be behind us. So, this number goes squarely
into that body of evidence.
Looking into this, you can see the gasoline prices are down, gas prices in the U.S. are down $0.50 in a month. I think that's one of the reasons why
this consumer sentiment number we saw earlier this week showed that inflation expectations among consumers is starting to improve as well,
because at the pump, they're feeling a little bit of relief from gas prices that reached record highs this summer. Food costs inside of this PCE Price
Index still up a little bit, but again, moderating. So, I think the word of the day is moderating, prices are moderating for consumers, Rahel,
SOLOMON: Certainly, a step in the right direction. And, Christine, look, you and I talk about this a lot. On the one hand, we've all been watching
inflation. On the other hand, we've been watching very closely consumer spending, what more can you tell us about consumer spending? I mean, are
they still holding on and proving to be resilient as you and I say quite often this year, I mean, what are you seeing?
ROMANS: I'm seeing a savings rate, a personal savings rate that's starting to go down a little bit as people are digging into their big savings that
they amassed during COVID, right, when they weren't spending money like they normally did, when they were saving a lot of money because the economy
was locked down. They're starting to dig into that savings to spend. But the consumer has been pretty resilient and surprisingly resilient by some
For months, the consumer has been saying they feel lousy about the economy. But when you look at spending numbers, you can see that they are still
spending, they're spending on different things, though. I look in here, goods down, services up, and I think that is this shift we're seeing in the
economy overall. People aren't buying couches and TVs, we've seen this again and again and again, those are being marked down, and by the way,
will be marked down in the United States over the next couple of weeks that this holiday shopping season starts to wind to a close, because people are
spending money on air tickets and travel and plane tickets and experiences like that. So, I think you're going to still see that shift between the
goods and the services sides of the economy heading into the new part of the year.
SOLOMON: And I think nowhere is that perhaps more clear than at U.S. airports, which you know, have been very busy for quite some time now.
Christine Romans, great to have you. Merry Christmas, my friend.
ROMANS: Merry Christmas to you.
SOLOMON: All right, now to the latest on the war in Ukraine. Russian President Vladimir Putin who until now insisted on calling the invasion, a
special military operation has now for the first time referred to it publicly as a war.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT: Our goal is not to spin the flywheel of military conflict, but on the contrary to end this war we have been and
will continue to strive for this.
(END VIDEO CLIP)
SOLOMON: Will Ripley is in Kyiv now with more
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Here in Kyiv, they're certainly listening very carefully to those words out of the Kremlin,
including Russian President Vladimir Putin for the first time calling what he did call a special military operation, a war. Now, the question is, was
that a slip of the tongue? Or did he do it deliberately? And that's very important to figure out what the reality is, because if it was an accident,
if Putin essentially broke his own ban on uttering the word war for the last 10 months, and if he actually does believe that what he is doing to
Ukraine is now a war, that would potentially allow him to declare martial law and pour even more resources into his military, which has certainly
been struggling on the front lines.
Putin had a military modernization meeting, saying that the mobilization process needs to be upgraded saying that the military needs to get every
single resource it needs, even send his defense minister supposedly, to the front lines, and a Russian propaganda video that was released this week,
that defense minister telling everybody to keep calm and everything was going to be fine, he said, But of course, Russian troops, according to
intercepted telephone calls don't necessarily think that things are fine.
The Ukrainian military occasionally releases these things. And even though we can't verify their authenticity, they seem to indicate a sense of
frustration among a lot of Russian troops on the ground, fighting against the Ukrainians who have been able to hold the lines despite relentless
bombardment in places like (inaudible).
Of course, there's also been a Russian assault on the liberated southern city of Kherson. And a lot of these frontline cities, people barely have
the basics to survive, they barely have electricity or running water. Sometimes the only way they can get Wi-Fi or heat, or even a hot cup of
coffee is to go to an underground bomb shelter.
Here in the capital Kyiv, the situation is slightly better, but people are still struggling right now. The water service here has been disrupted. And
a lot of people say they have power for maybe an hour a day in the capital city. That's why Ukraine says they're so grateful for these Patriot missile
defense systems from the United States. But of course, there's a lot of training, months of training that has to happen between now and the time
that those systems are actually deployed, which means it could be a very long and difficult winter ahead here in Ukraine. Will Ripley, CNN Kyiv.
SOLOMON: Thanks to Will Ripley there. An update now in some developing news out of Paris, three people have died, four more are injured after a gunman
opened fire in the French capital. That's according to local authorities. France's interior minister says a suspected shooter has been arrested. We
will keep you updated as we get more information.
And to China now, where hundreds of health workers from across the country are making their way to the capital, Beijing, they're trying to help tackle
an unprecedented wave of COVID infections. China's sudden ending of a zero COVID strategy has left hospitals struggling to cope even as Beijing
dismisses U.S. concerns about the need for greater transparency over COVID.
Now, despite what the official numbers may say, CNN is seeing disturbing evidence of a surge in deaths linked to COVID-19. Selina Wang is in Beijing
and visit a crematorium that is dealing with a sharp rise in deaths.
SELINA WANG, CNN CORRESPONDENT: As crematoriums in China fill up, the country shifts the way it counts COVID deaths. Its method of counting
deaths goes against the World Health Organization's guidelines, and experts say it will severely undercount the COVID death toll. By China's count,
less than 10 people have died of COVID this month. It is a shockingly low number, especially considering how fast COVID is spreading in China and the
relatively low vaccination rate of the elderly.
But what we've witnessed on the ground in China at crematoriums and hospitals, it points to a very different situation.
WANG: The burning can't go fast enough. The smoke behind me it's been billowing constantly from all the bodies that are burning and these crates
over here they're all full of yellow body bags. Workers later open those metal containers here at a major Beijing crematorium, revealing loads of
body bags as they load more coffins in the freezing cold temperatures.
Crematoriums in major cities are swamped at COVID sweeps through the country. But China has only reported a small handful of COVID deaths since
reopening late last month. I spoke to a man earlier who said that his close friend passed away from a fever, normally the hospital would hold the body
but the hospital told him that there were too many dead bodies. He said he's been waiting here for hours and he still has no idea if his friend's
body can even get cremated today.
There is a long line of cars that snakes around this whole area waiting to get into that cremation area. I'm in the parking lot right now and it's
completely full of cars. I'm speaking here because there are many, many security guards patrolling this entire area.
Grieving family members clutch photos of the deceased, some tell us off- camera, they know their loved ones died from COVID and have waited for more than a day for cremation. Busy shops nearby sell funerary items with paper
money, clothes, houses, and animals used in burial traditions strewn on the side of the road.
A woman who sells flowers says she's running out of stock. A man selling urns says business has jumped. Even the convenience store and the
crematorium grounds is getting busier. Normally you're so busy, right? I asked the man nods and tells me that normally there's nobody here. And it's
not just in Beijing. Social media video shows crowded crematoriums and funeral homes around the country.
At this funeral home in Xin'An. The man is saying it's going insane. Here it is packed with cars. Vans carrying bodies stretch all the way into the
distance in front of this crematorium in (inaudible). This is a COVID designated hospital in Beijing. There has been a steady stream of elderly
patients in wheelchairs being led into this hospital.
I spoke to a man who has been waiting outside for his elderly family member who he said is very sick with a high fever from COVID. But he said this
hospital is running out of bed space. I asked the worker outside of this hospital did a lot of people die here. Yes. Every day, he responds. I
asked, is it all because of COVID? Yes, people with underlying conditions he says.
China is now going through the painful reopening; the rest of the world has already gone through. But it's not sharing the same data. The government
now says it's narrowing the definition of COVID-19 deaths only to patients who died of respiratory failure directly caused by the virus. People we
spoke to at the crematoriums may have said their loved ones died of COVID. But their deaths and so many others won't be counted in the official tally.
WANG: One of the people I spoke to at the crematorium told me that the hospital where his friend passed away was too full to keep the body because
so many people had died there. He told me his friend's body was left on the hospital floor. The vaccination rate in China is still lagging for people
over 60 and only around 42 percent of those over 80 have received a booster shot. And experts say that getting that third dose is necessary to get
enough protection since China is using less effective vaccines compared to mRNA ones used overseas hospitals, they are overwhelmed, fever and cold
medicine is running out.
Health experts say China has not adequately prepared for this reopening despite having years to do so while it was enforcing zero COVID. Selina
Wang, CNN, Beijing.
SOLOMON: South Korea meantime is calling it a serious provocation. It says North Korea launched two short-range ballistic missiles on Friday. They
landed in the waters between the Korean Peninsula and Japan. This marks the 36th day this year that North Korea has launched at least one missile, U.S.
and South Korean experts are warning Pyongyang could be preparing for its first nuclear test in more than five years.
Well, from the Bahamas to house arrest, disgraced FTX founder Sam Bankman- Fried is out on a $250 million bond after his New York court appearance. The former CEO is now required to wear an electronic monitoring bracelet
and will be under house arrest at his parents' home in California. CNN's Kara Scannell joins me now. Kara, great to have you again. It was just 24
hours ago that you said bail was a possibility and he got it. But look, this is causing quite a bit of outrage because SBF said that he was
basically broke. So, what do we know about the funds used to secure this?
KARA SCANNELL, CNN REPORTER: Well, right now, there's not a lot of detail about the funds that are being put up here other than his parents are one
of the co-signers of this bond, and they have to put their house up as a matter of security to secure this bond. In addition, he has some time to
get two other co-signers and one of those has to be someone who is not a family member. So, they've given him a couple of weeks to get this in
And one of the main issues that the judge evaluated when he was looking at this package as he said under the Bail Reform Act in the U.S., there is an
inclination to let someone who is not violent, who's not a flight risk, who's not challenge to safety in the community. The preference is to let
them out on bail. So, he laid that out in court saying that that was one of the reasons why he was leaning toward this. He went through all of these
conditions wanting him to be under house arrest, to have electronic monitoring as factors that he considered to be important.
And one of the things that even the prosecutor said here was because Bankman-Fried had voluntarily come back from the Bahamas to the U.S. They
wanted to give him some credit for that because this could have been a long-drawn-out extradition fight. These contests can sometimes take months
or even years, so that was a benefit that the prosecutor saw in at least his willingness to come back to the U.S. to face these charges, they
believe that he wouldn't be fleeing and then he had many ties to the community.
Interestingly, one of these other conditions was the judge saying, he can't engage in any other business. He can't take - spend any money over $1,000
unless the government approves it, unless it's to pay for his attorneys. The judge said he didn't think that would be a problem. Because Bankman-
Fried right now had - there was sufficient notoriety around him that no one would want to be engaging in any new business deals with him.
SOLOMON: Fair enough, safe to say he is a household name at this point. But Kara, to your point, this case has moved very quickly, even in terms of his
extradition. So, what happens next, in this case,
SCANNELL: Well, for Bankman-Fried, he'll have to return to court, he's due to come back January 3rd, he could be arraigned then on these charges,
those eight federal counts of wire fraud and conspiracy. And at that hearing, he would enter a plea in this case. Now his legal team is still
indicating that he is going to defend himself here. He is though facing a lot of pressure because those two top executives, Gary Wang, who was the
co-founder of FTX, and Caroline Ellison, who was the co-CEO of Alameda research, that hedge fund that was connected to the trading platform.
They have both cooperated with authorities. And we learned a little bit more about this investigation yesterday at the bail hearing. One of the
prosecutors said that they have cooperating witnesses. He said they have witness testimony from dozens of former FTX and Alameda Research employees
and also encrypted messages.
So, we're going to see perhaps more of where the prosecutors have in this case if there are possibly others who are cooperating and if these other
actions come out from under seal, but as a matter of course, the next move for Sam Bankman-Fried is that he will be appearing back in court in New
York in January. And then this court case will play out as it moves forward to trial. Rahel.
SOLOMON: A lot more to come here. Kara Scannell, great to have you. Happy holidays.
SCANNELL: You too.
SOLOMON: Well, new travel chaos here in the U.S. with thousands more flights canceled today as the nation is practically plunged into the
freezer. record low temperatures were recorded Thursday in the U.S. South and West. Polo Sandoval is in Buffalo; New York where severe cold is
closing. And Polo, great to see you. I wish it was under better circumstances, help our international viewers understand a bit more about
Buffalo. It is certainly not new to snow, help me understand what the conditions are like right now.
POLO SANDOVAL, CNN CORRESPONDENT: Yes, Rahel, well, if our viewers around the world Google Image winter in Buffalo, you'll probably see a picture
like this. And what's interesting is we were standing out here three hours ago, a very light layer, no wind at all, barely any rain. But just like
that conditions really became - began to deteriorate and this is really just the first act of what is going to be a multi-hour, potentially a 30-
hour storm that's just going to be battering the region here in Western New York.
The intersection here if - you are - I certainly are not brave enough. But if you were to walk about a block down the street, you will be at the Lake
Erie lakefront. I mentioned that because that's really the bulk of the concerns for officials here are those lakefront communities because as this
massive winter storm makes its way east over that lake, it will, according to local forecasters here basically push a lot of that water into some of
these communities. And that is why there's at least one community just south of here where they did have a mandatory evacuation in place because
they expect some parts of that lakefront that have never seen floodwaters before to actually potentially see that with this particular storm.
But when you look at this right now and what it's like Rahel, it really gives you an idea. And it makes sense as to why Christmas travel for
millions of people is either on hold or just canceled altogether, because officials are recommending that folks stay indoors because of the blizzard
whiteout conditions. This isn't going to be a massive snow dumper. But the snow that it does down, it's all over the place. It's going to make travel
not only treacherous; it'll make it dangerous. But as Governor Kathy Hochul in New York called it life-threatening. Back to you.
SOLOMON: And you can see that wind really clearly there. All right, Polo, we'll let you get back inside. Thanks for being with us. Be safe.
SANDOVAL: Thanks, Rahel.
SOLOMON: Well, straight ahead. Santa's sleigh may be loading up with toys and goodies for Christmas. But the Port of New York and New Jersey, well
they've been pretty busy themselves. I speak to its executive director after the break. And later, travel chaos again giving thousands the winter
blues, the points guy, he may be able to help stay with us.
SOLOMON: Welcome back to FIRST MOVE. For 22 years, the title of America's busiest port belongs to the Port of Los Angeles. But a shuffling supply
chain has made way for the Port of New York and New Jersey to claim the title and ports into two major West Coast ports have been declining since
August. And that cargo is now flowing into New York and New Jersey handling 20 percent more cargo in November 22 then it moved in November 2019. This
rerouting of the U.S. supply chain is a bid to get goods to consumers faster and cheaper. And for now, the port says it has been able to handle
the extra cargo.
Joining me now is Rick Cotton. He is the executive director of the Port of Authority of New York and New Jersey. Rick, great to have you today. So,
before we get into the new title, congratulations, help our viewers understand all that the port overseas because it is not just the ports and
the cargo, but it's also some of the commercial airports.
RICK COTTON, EXECUTIVE DIRECTOR, NEW YORK AND NEW JERSEY PORT AUTHORITY: That's correct. Good to be with you. The Port Authority of New York and New
Jersey oversees the three major airports in the New York, New Jersey region, JFK Airport, Newark International Airport and LaGuardia, we oversee
four bridges and two tunnels across the Hudson River and connecting New York and New Jersey we oversee the seaport. We have a commuter railroad.
And then we also oversee the 16-acre World Trade Center site in lower Manhattan.
SOLOMON: Quite a bit of territory. So, let's go back to the ports. So again, the Port Authority of New York and New Jersey now the busiest port
in the nation, is this just a reshuffling of the supply chain, companies diversifying their supply chain or is there something else behind it?
COTTON: Well, there are a number of factors. The primary one is what you just suggested, which is diversifying this supply chain having cargo
shippers and carriers able to assure and reduce - reassure consistency and reduce delays. The West Coast ports have suffered from delays. There is a
bit of labor uncertainty hanging over their head and shippers and ocean carriers responding to that have begun to assure that they have multiple
ports of entry. They've been able to count certainly in terms of New York and New Jersey on very consistent performance. Half of our carriers that
call on the port of New York and New Jersey go directly into their berth. Those that do go to anchorage go for very short periods of time
SOLOMON: So, do you think that this reshuffling will be a permanent benefit to the East Coast ports like New York and New Jersey, as I said, or do you
think as you pointed out, some of the West Coast ports are having labor issues. And so, some of the cargo that would have gone there is now making
its way to New York. I mean, do you think this will be a permanent reshuffling?
COTTON: We do think that the much of the change will stick. The fact is that diversification is becoming a very high value from the point of view
of cargo shippers and ocean carriers, they don't want to be in a situation where they're dependent on a port, which struggles and which causes them
delays. Certainty is a very, very high value in terms of cargo shippers. So, we do expect much of the shift that has taken place to stick. We're
working hard obviously to assure shippers and to assure ocean carriers that they're going to continue to have rapid and dependable access to berth. And
we've been successful.
So far, the other advantage that the Port of New York and New Jersey has is that, over the last decade, huge investments have been made in our
infrastructure so that not only is it attractive for shippers in terms of accessing the region, but that the rail connections both on the actual port
property, but also in terms of arrangements with railroads going into the center of the country have been vastly strengthened. And it provides
confidence in terms of schedules and dependability.
SOLOMON: So, it provides competence as you say, there's that certainty which both of which are obviously very important to doing business. But
there's also cost. Help me understand if you might, is it cheaper to send to the New York ports and New Jersey port or I mean, help me understand the
cost benefit of that?
COTTON: Well, time is money. So, the delays are just frighteningly expensive from the point of view of a shipper or an ocean carrier, simply
to have goods, to have a ship sitting for extended periods of time in an anchorage waiting for berth to be able to come in and either offload or, or
load up. So, the big issue becomes efficiency and dependability. And there are real costs associated with both of those.
SOLOMON: I take your point. I want to get to the airports a bit because you say in November airport passenger volume surpassed pre-pandemic 2019
levels. So, is November a blip? Where do you think that we are now - can we now say that we are post Pandemic in terms of travel?
COTTON: Well, I think the travel is definitely hitting highs. We've seen this building over the entire course of the year 2022. So, earlier in the
year, we had isolated holiday weekends, there were days when we exceeded 2019 volumes. But November was really the first time that an entire month
was above 2019. And we're seeing that trend continue. The fact is there's huge pent-up travel demand. We think that our November numbers which, as
you say exceeded 2019, that trend line is highly likely to continue.
SOLOMON: And Rick, before I let you go, of course this is such a huge travel day. Here in the New York City area, we haven't gotten hit quite
hard, at least not yet. I haven't looked outside in the last 30 minutes or so. But for people who are traveling in or out of New York and the midst of
this winter weather that we're experiencing, what should they be expecting?
COTTON: Well, first of all, everyone should check with their carriers in terms of their individual flights. We are seeing hundreds of cancellations,
but largely due to destinations outside of New York. So, the fact is that airports in the middle of the country have been closed due to the extreme
Our own weather here has been gusty winds have caused challenges. But the big issues in terms of the travel this weekend is in the areas of the
country which are being hit very, very hard by the storm.
SOLOMON: Rick Cotton, great to have you. Thank you. He's the executive director of the Port Authority of New York and New Jersey. Now the busiest
port in the nation. And still ahead we've got holiday gift wrapping and Santa sled tracking, but holiday cheer on Wall Street. Well, that's still
lacking. Can markets turn it around in 2023, we will discuss with Wall Street veteran Sam Stovall coming up next.
SOLOMON: Welcome back to FIRST MOVE. No rest for U.S. investors on the final trading day before Christmas. U.S. stocks have open mostly lower
after Thursday's more than 2 percent drop in the NASDAQ. Stocks losing their pre-market gains. That's despite an encouraging new look at the Feds
preferred measure of inflation. And investors perhaps focusing a bit more on new durable goods numbers which fell more than 2 percent last month.
That was much worse than expected.
Tesla also in the spotlight once again this session shares trading lower. Wow, lower by 9 percent. That's after Elon Musk promised to stop selling
the stock for at least a year look. It has been a rough go for Tesla, Musk of course has sold billions of dollars' worth of Tesla shares to help ride
the ship at Twitter, a move that's contributed to, look at this, a more than 60 percent plunge in Tesla's share price so far this year.
Lots to talk about, a lot more than just Tesla. Sam Stovall is here with a look at the broader market action and what to expect in the new year. He is
the Chief Investment Strategist at CFRA Research. Sam, great to have you with us. Thank you.
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH: My pleasure. Happy Holidays.
SOLOMON: Happy Holidays. So, let's start with this PCE report. Because at least from my - my initial glance, I mean, it looks like a came in softer
than expected. It looks like yet another inflation report that shows moderating inflation, and yet investors don't seem to like it.
STOVALL: Well, that's right, the PCE or personal consumption expenditure, another measure of inflation that the Fed tends to favor does show like the
Consumer Price Index, the Producer Price Index, that the inflation trend is heading in the right direction, but it does seem as if it'll be a while
until that PCE does get down to the 2 percent level that the Fed would like and the Durable Goods Orders that came in much weaker than expected. Also,
later this morning, we're going to get the whole new home sales which are likely to slip as well. So, I think investors are now worried about how
deep the recession will eventually be
SOLOMON: We know the housing industry for sure has taken quite a nosedive this year as the Fed has been raising rates. Sam, let me ask yesterday when
we got the final revision for Q3, and it was revised that we saw stronger consumer spending, which again is some more encouraging news and yet
investors didn't like that. And so, I have to wonder, are you in the camp that encouraging news means a more aggressive Fed? And you know, you're a
bit concerned about that? Or are you in the camp that good news is good news?
STOVALL: No, I think right now, good news is bad news, because the Fed has told us that they plan on raising rates longer and higher than most on Wall
Street are anticipating. And so, the worry is that the Fed in its quest to be Paul Volcker all over again, and to strangle inflation could end up
strangling the economy as well. So, I think investors are worried that we do end up hiking rates beyond the first quarter, as most people are
anticipating. Our belief is that the Fed will stop at the end of the first quarter. And we're heartened by history in that the Fed has typically
started to cut interest rates less than nine months later. And so that would point to a December cut in interest rates,
SOLOMON: I'd say and they've already done so much this year. 425 basis points, I believe. So, we'll have to wait to see when exactly they do start
to pull back. So, Sam, what are your forecasts for 2023 beyond just the Fed starting to pull back on those rate hikes? What else are you expecting?
STOVALL: Well, I think we're going to see heightened volatility in the first quarter, as investors continue to play tug-of-war between the bulls
and the bears. But I think by the end of the year, investors will have begun to look across the valley and look toward brighter skies. And so, our
forecast is for a positive 2023. Our exact target is 4575 on the S&P 500, which is currently below the 3600 level. So, I believe that things will
start to improve in the second half as we look to 2024. And also feel that the worst is behind us.
SOLOMON: Well, look, I think that will be music to many Investors ears that the worst is behind us, and that you're expecting a positive 2023. So,
where then to find opportunities, where are you shopping? What are you buying?
STOVALL: Well, the interesting thing is that history tells us that when the bear market has ended, when the worst is behind us, you want to go from
worst to first, meaning that the worst performing sectors during the market decline, or during a down year, tend to be the outperformers in the
subsequent year. So, areas like technology, consumer discretionary, real estate and communication services, as a group might end up outperforming
the market in 2023.
SOLOMON: I see. How important do you think fundamentals are going into 2023?
STOVALL: Well, fundamentals are important, but I like to say that prices lead fundamentals. And while fundamentals tell you what, technicals or
price movement tells you when and how far, so investors are anticipators, they're not going to wait for the fundamentals to prove them correct before
they buy into stocks once again, they're really going to make assumptions and you watch the prices in order to see whether the fundamentals are
expected to improve.
SOLOMON: And then final question, what are your thoughts about a potential recession for 2023? Do you believe it will be mild? When do we start to see
STOVALL: Well, I believe that it will be mild, but I definitely believe one is on the way. Again, I look to history anytime that CPI, Consumer Price
Index has been up by more than 6 percent year-on-year, we have fallen into a bear market and a recession. Anytime leading economic indicators are down
year-on-year, we've fallen into recession. And I think the next three quarters are expected to show profit declines for the S&P 500, which
equates to a profit's recession.
And again, that ends up being fairly coincident. So, it could end up being a relatively short and mild recession. And once that occurs, then I think
investors will be looking forward to better returns
SOLOMON: Short and mild. does that also mean a limited impact to unemployment?
STOVALL: Yes, because our belief is that while the unemployment rate is likely to rise above the 4 percent level, we think it's going to hit about
4.3 percent. So, just marginally above that important 4 percent level. Of course, our data is just like the Feds. It's subject to revision, but right
now, we believe that the recession could end up being fairly mild.
SOLOMON: I think that's interesting. And that's actually if I remember correctly, that's a more encouraging forecasts than the Fed, because the
Feds prediction has unemployment going up to about 4.6 percent. So, Sam Stovall, great to have you. Happy Holidays. Thank you.
STOVALL: Thank you.
SOLOMON: And coming up on FIRST MOVE, travel nightmare. How a massive winter storm is disrupting holiday travel across the U.S., coming up next.
SOLOMON: Welcome back to FIRST MOVE. And the winter travel chaos. More than 3400 flights have been canceled here in the U.S. so far today. That says a
powerful winter storm that we've been talking about slams much of the country during one of the busiest times of the year. Pete Muntean is at
Chicago's O'Hare Airport with the latest.
PETE MUNTEAN, CNN CORRESPONDENT: This bad weather is really coming at a bad time for travelers. We're trying to make this exit as what was supposed to
be one of the busiest pre-Christmas travel days. FlightAware says the number of cancellations in the U.S. has already dwarfed the number we saw
yesterday, 2600 in the U.S. according to FlightAware. That's going to have a nationwide and a worldwide ripple effect because the storm is really
hitting some major hubs for the airlines. And now as it's moving east, there will be more and more cancellations at places that were not affected
LaGuardia tops the list as well as Detroit, which is a major hub for Delta Airlines. More than 40 percent of flights have been canceled there. Here at
Chicago O'Hare is the biggest hub for United Airlines. United Airlines tells me that the big issue is not necessarily the snow but really the
biting cold on Friday. The forecast high temperature here is one degree Fahrenheit, that's not taking into account the wind chill that makes it
especially hard, United says for ground crews to work to marshal the plan, to load banks, to move the gate. It's going to be really tough for them.
I want you to listen now to Joe Heins, United's VP of Network Operations, who says that will really drive delays
(BEGIN VIDEO CLIP)
JOE HEINS, VICE PRESIDENT, NETWORK OPERATIONS, UNITED AIRLINES: Winter operations like this temperature wind snow, it's going to drive delays. We
know the challenge. We have experienced around the winter storms. There's only so much you can do. We'll operate, we'll operate slowly but we will
(END VIDEO CLIP)
MUNTEAN: The Federal Aviation Administration says it's now a ground game for airports about whether or not they can clear snow and ice off of planes
quickly. One other factor to consider here is that packages so often fly on planes, UPS, FedEx, and the United States Postal Service all tell us they
have contingency plans in place, but some Christmas shipments may be delayed. Pete Muntean, CNN Chicago
SOLOMON: And so many travelers may need some tips from The Points Guy. The travel website says it now has about 10 million visitors a month, 12 years
after it launched (inaudible) points and miles blog. Joining us now the founder of The Points Guy, Brian Kelly. Brian, great to have you. Thank
BRIAN KELLY, FOUNDER, THE POINTS GUY: Thanks for having me.
SOLOMON: So, a lot of our viewers are frequent fliers. If it is the Friday before Christmas, you weren't able to get out early. What do you do now?
KELLY: Well, first thing, just pack your patience, there are going to be delays even if you're in sunny Los Angeles, the chances are your flights
probably coming from somewhere impacted. So, I always recommend everyone traveling go into your reservation right now, even if you're traveling in a
couple of days, make sure your flight hasn't been changed, sign up for alerts from the airline, but also sign up on FlightAware, which will
actually update you if the flights delayed or canceled, generally before the airline does. And everything is about getting that information so you
can rebook yourself before everyone else on your flight finds out the flights canceled.
SOLOMON: So, then what to do if it has been delayed? Or if it has been gasp canceled? I mean, what's the next best step? Because I would imagine time
is of the essence at that point.
KELLY: Absolutely. So, I mean, the first thing everyone needs to know is that you can get your full refund if your flights extremely delayed or
canceled. So, people should have the backup plan do we just cancel the trip and go another time, because it's going to be a nasty travel weekend no
matter what. So, if you really need to get to where you're going, this is what I do. For frequent travelers, if you're booked on a certain airline,
you must get to where you're going. I always have a second reservation on another airline using my frequent flyer miles for later in the day. So, if
my original flight is canceled or delayed, I've got a backup reservation.
If you wait until your flights canceled, often all the other options will be sold out. So, you've got to be really savvy. And if your flight doesn't
go out on time, you can always cancel your frequent flyer trip, for later in the day.
SOLOMON: I see. So go in with a plan. You have a plan A, you have a plan B, but you've got to start off that way. Let's say your flight is canceled. I
think the tendency understandably, is to rely on the customer service reps to help reseat you. Is that the best option? Or is that the time to start
to take things into your own hands?
KELLY: You've got to take it into your own hands, don't just wait in that long line in the airport. So, I recommend go into the airline lounge if you
can, sometimes you can pay or your credit card can get you in, those lounge agents are generally the best at the airline and they can rebook you. And
they're really good. The general agents in the airport are overwhelmed and they're just going to look at the next nonstop flights your destination.
You can take things into your own hands, see if you can connect to a different airport to get to where you're going. But you shouldn't just rely
on the agent to think creatively for you. And if at the worst case that airlines get you there, you know rebook yourself on another airline.
SOLOMON: How important do you think social media is? I mean, I feel like every time I open my social media, someone is complaining and tagging the
company on social media, is that actually impactful? Does that work?
KELLY: 100 percent. I don't recommend the huge rants, but be precise to the point DM the airline, a lot of them have customer service teams that if you
tell them exactly what you need, they can - so when you're in the line for - to get rebooked, DM the airline as well. Also, a lot of airlines now have
chat bots, where you can chat in the app. And also, if you ever lose your bag, you know and you're not getting any help from the airline, go on
LinkedIn, the customer service managers, the baggage managers for the airline, send them a message on LinkedIn, you'd be shocked at how quickly
they can message the people at the airport to find your bag.
SOLOMON: LinkedIn apparently not just for finding a new job, but also for helping to find your lost baggage. Brian Kelly, great to have you. Thank
you. He is the founder of The Points Guy. All right, check this out, CNN affiliate KWWL sent their sports reporter to cover the winter storm. And he
did have a memorable, but not necessarily fun time outdoors. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Mark, how you feeling out there?
MARK WOODLEY, KWWL REPORTER: Again, the same way I felt about eight minutes ago when you asked me that same question. I normally do sports; everything
is canceled here for the next couple of days. So, what better time to ask the sports guy to come in about five hours normally - earlier than he would
normally wake up, go stand out in the wind and the snow and the cold and tell other people not to do the same. It's absolutely fantastic, Ryan (ph),
I'm used to these evening shows that are only 30 minutes long and generally on those shows I am inside. So, this is a really long show. Tune in for the
next couple hours to watch me progressively get crankier and crankier.
Can I go back to my regular job. I'm pretty sure Ryan (ph) that you guys added an extra hour to this show just because somebody likes torturing me,
because compared to the two and a half hour hours ago it is just getting colder and colder. Live in Waterloo for the last time this morning,
thankfully. I'm Mark Woodley, News 7 KWWL
(END VIDEO CLIP)
SOLOMON: He's just saying what every reporter who has stood out in the snow including this gal is thinking. Somebody get that man a raise, or at least
hot cocoa, I don't know, good stuff. Coming up on FIRST MOVE, the young athletes who are using their agility to save energy, we'll take you to
Paris, coming up next.
SOLOMON: Welcome back. And it's not just Superman, who can leap tall buildings in a single bound, parkour athletes in Paris climb walls and jump
over staircases all to keep businesses from wasting energy. The goal is to save electricity across the City of Light during an unprecedented energy
crisis. Saskya Vandoorne reports.
SASKYA VANDOORNE, CNN REPORTER: Once a month, Kevin Ha and his friends take small steps to save energy in France through the unusual sport of parkour.
By day, you'll find them jumping, running, climbing and somersaulting over obstacles across Paris. So, they're by night using the wall run technique,
they turn off outdoor lights that have been left on.
KEVIN HA, PARKOUS ATHLETE: Seeing those lights turned on all the night is such an absurdity in a world with limited resources. So, the best way to
save energy is actually to consume less.
VANDOORNE: The lights off movement, started about two years ago went viral and has been spreading beyond Paris to cities including Massy (inaudible).
The group can get through 60 lights a night. They say they're just enforcing a long-forgotten law that stores should turn off window displays
between 1 AM and 6 AM or face a fine of up to $1,600.
HA: But the real question is what we can leave for the next generations, we can just send a larger message and tell them to be careful. We need
everyone to take part of the movement in order to have a real impact.
VANDOORNE: Their actions have also caught the public's imagination because of Europe's energy crisis. With the French government asking households and
businesses to make real changes this winter.
EMANNUEL MACRON, FRANCE PRESIDENT: Don't be afraid of the times we live in. They are tough. I don't know what will happen in the next few weeks. So, we
have to be prepared for anything. But we are a strong nation and we are here. But it is in this moment that the most daring win.
VANDOORNE: Across Europe, Christmas lights will be dimmed this year to send a message of energy conservation and solidarity with the people already
feeling the pinch of high utility bills and inflation. What people think of Christmas lights in Paris, they picture the (inaudible), but this year in a
bid to save electricity the lights wrapped around these 400 trees will be switched off two hours early
UNIDENTIFIED MALE: Our goal is to reduce energy consumption by 10 percent this winter, and we're going to take several measures to achieve that. We
are going to lower the temperature in our schools, our municipal facilities, our gymnasiums and colleges by one degree. We will also lower
the temperature in our municipal swimming pools.
VANDOORNE: Despite these energy saving measures, the threat of blackouts loom, as does the prospect that even the City of Light may have to go dark.
Saskya Vandoorne, CNN Paris.
SOLOMON: And finally, you better watch out because in case you haven't heard Santa Claus is coming to town, it is the busiest time of the year for
Father Christmas. And while the U.S. is experiencing severe blizzards, not to worry, Santa apparently remains on track thanks to his amazing reindeer
who are equipped for practically all conditions. If you don't believe us, you can track Santa's journey using NORAD Santa Tracker. It's not online
yet instead for now you'll have to do with this picture of the man himself getting ready for a very busy weekend. And that is it for the show. I'm
Rahel Solomon. Thanks for joining us wherever you are, have a very Merry Christmas and Happy Holidays. Connect the World is next.