Return to Transcripts main page

First Move with Julia Chatterley

Israeli Defense Forces say they Targeted Underground Rocket Manufacturing Site Operated by Hamas in Gaza; Israeli Raid Marks Deadliest Day in West Bank in over a Year; Ukraine Pushes for more Military Aid after Russian Strikes; Challenging Week Ahead for Investors; Ottonomy Launches "Ottobot Yeti" Autonomous Delivery Robot; Gautam Adani's Business Loses $50 Billion in Market Value. Aired 9:20-10a ET

Aired January 27, 2023 - 09:20   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:20:00]

(COMMERCIAL BREAK)

RAHEL SOLOMON, CNN HOST, FIRST MOVE: Welcome to "First Move"! I'm Rahel Solomon in New York; you have been watching CNNs continuing coverage of the

death of Tyre Nichols in Memphis, Tennessee. We will have much more on this developing story throughout the day.

But now to some of the other news of the day Israel has unleashed new air strikes on Gaza saying that it targeted a rocket making site belonging to

Hamas. That's after Gaza militants fired several missiles at Israel.

And that was in response to a lethal raid by Israeli forces on a Geneva refugee camp that turned into the deadly estate for Palestinians in the

West Bank in more than a year. CNN's Hadas Gold is in Jerusalem. Hadas, lots of moving parts here. What more are you learning about what actually

happened here?

HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Well, Rahel what we know is yesterday in the morning, in the daytime hours, the Israeli military

conducted what's rather unusual raid for them. First of all, they did it in broad daylight. Normally these military raids take place overnight or in

the early dawn hours and they also entered the Janine refugee camp itself.

That's not something that they typically do. The Israeli military says that they did this because they had Intel about a group of Islamic Jihad

militants who they said were about to carry out attacks on Israelis. And so, they entered the refugee camps surrounded this building and firefight

began.

And we know that at least nine Palestinians were killed in that ensuing firefight including at least one bystander, a woman in her 60s and there

are plenty more injuries including several civilians.

[09:25:00]

GOLD: And then a few hours later another Palestinian was killed in clashes that were sort of prompted by this Jenin raid, in another town in the West

Bank definitely became then the deadliest day for Palestinians in more than a year. The Palestinian authority immediately reacted calling it a massacre

and one of their first moves was to actually cut off the security coordination that they have in place with the Israelis.

This is important because it governs everything from Palestinians getting permits to also sharing information about militant groups. And Israeli sees

this is very important to possibly preventing terror attacks. That got a reaction out of the Americans, the U.S. Assistant Secretary of State;

Barbara Leaf said that she actually doesn't think that was a good idea for the Palestinians to do that.

Then a few hours later during the night, that's when the sirens started in southern Israel and rockets were fired by Gaza militants towards Israel.

And just the last few hours, the Islamic Jihad, which is the same group that Israel says it was targeting in the West Bank, has claimed

responsibility for those missiles being launched.

And Hamas also says that they also launched some missiles against Israeli Aircraft that, as you noted, were targeting these rocket making workshops

in Gaza. Now, so far today, we have seen a few smaller scale clashes in the West Bank. There were some protests here in Jerusalem, but nothing to the

level of what we saw yesterday.

And this is obviously returning what's already been a very violent, intense, you're kind of ratcheting up especially with the Palestinian

authority, cutting off the security coordination. And I should note this is all coming this week very important visit the U.S. Secretary of State

Antony Blinken will be here in the coming days.

This was pre-planned for a long time; he's expected to visit both Israeli officials and officials in the Palestinian authority. And it's very clear

there's going to be a lot to discuss, especially over the security coordination and an attempt from the Americans to try to calm the situation

on the ground Rahel.

SOLOMON: A lot to discuss and perhaps a lot of residents understandably on edge. Hadas Gold, thank you. Live for us there in Jerusalem Ukraine,

meantime making the case for more Western weapons following the latest barrage of Russian missile strikes. Kyiv says that dozens of drones and

missiles were fired on targets across Ukraine on Thursday, killing at least 11 people. President Zelenskyy says that he needs more firepower to combat

Russia.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: This evil this Russian aggression can and should be stopped only with adequate weapons. The terrorists' state

will not understand anything else weapons on the battlefield weapons that protect our skies.

(END VIDEO CLIP)

SOLOMON: And CNN's Sam Kiley is in Kyiv. Sam, more calls for Western weapons as these latest missile strikes, as I understand it caused

significant damage to the power grid there. You're on the ground. What more can you tell us in terms of the power damage, the power structure and just

the latest on the ground there?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the damage was done. The details are pretty complicated. But essentially, the bulk of the

necessary power-gen regenerating capacity was actually up and running by sunset yesterday. That's not to minimize the damage that's been done

because of course, Rahel as you know, it's cumulative.

This is a campaign against the power systems here in Ukraine that's now many months old. And with every time some of these missiles get through,

albeit relatively small in number compared to the numbers fired at Ukraine they do damage and incrementally it makes everything that much harder.

But the Ukrainians have bounced back, but it's once again, giving the opportunity to President Zelenskyy to renew his call for more sophisticated

weaponry. Above all, he wants to be able to protect his people from attacks from the sky from these mass raids of low tech Shahid Iranian made drones

and also the higher tech cruise missiles that the Russians produce themselves.

The latter have a lot more power in terms of the warheads that they can deliver. But and also, they are much more targeted, and they have been very

successful, though in shooting them down using the available air defenses that they have. But with every set of raids, those air defenses are

denuded, inevitably, they need resupply and they need an expansion.

That is something that President Zelenskyy has been saying from day one of this war. And I think what's really significant about this is that he is

once again exposing essentially, what could be described certainly is in Ukraine as the dithering of the West over whether or not they really want

to see the Ukrainians prevail here to actually win this war or whether they just want to see them hold the Russians at bay.

And there are two very different consequences in the calculations as far as NATO is concerned about two different policies there if they were able to

help the Ukrainians crush the Russians here. They're fearful that the Russians may overreact and launch some kind of nuclear attack.

However, if they don't crush that allowed the Ukrainians using the foreign weapons that could be supplied to Ukraine, then that you end up with a

frozen conflict here as we've seen in Georgia and elsewhere.

[09:30:00]

KILEY: And that means that ultimately the Russians have won because they permanently disabled and destabilized one of their neighbors, Rahel.

SOLOMON: A lot to think through Sam Kylie in Kyiv thank you. Well, straight ahead, Chip dip. Intel's weak Q4 caps off a challenging week for U.S.

earnings; we will discuss the market outlook with Jeff Kleintop of Charles Schwab. We'll be right back.

(COMMERCIAL BREAK)

SOLOMON: Welcome back to "First Move". U.S. stocks up and running through the last trading session of the week. Let's take a look red arrows across

the board when the Dow NASDAQ and S&P all lower fractionally investors receiving another encouraging piece of inflation data though before the

bell we'll see if that changes the direction of those arrows.

The feds preferred measure of inflation easing further last month. The core PCE Price Index which of course core excluding food and energy, rising at a

4.4 percent annual rate that is down from 4.7 percent in November. The overall PCE number easing as well from five and a half percent to 5 percent

both data points in line with expectations.

Now another big market story today is the grim outlook from Intel the grim demand outlook the largest U.S. chip from announcing a Q4 loss and warning

of more tough times ahead. You can see shares were off about 10 percent and tells outlook so uncertain that it's being forced to pull its full year

guidance shares down again about 10.4 percent, let's call it in early trading.

Jeff Kleintop joins me now; he is the Managing Director and the Chief Global Investment Strategist at Charles Schwab. Jeff, good to have you on

the program today, welcome!

JEFFREY KLEINTOP, CHIEF GLOBAL INVESTMENT STRATEGIST, CHARLES SCHWAB: Thanks for having me on.

SOLOMON: Let's start with Intel, rough quarter rough year pulling guidance how concerning is something like that to you?

KLEINTOP: This is a son of the earnings recession that we're in, I know there's a debate over whether we're in an economic recession or not. But

clearly the earnings recession has begun, earnings are down year-over-year this quarter for S&P 500 companies' course, Intel suffering as well.

[09:35:00]

KLEINTOP: And that's likely to linger for the next few quarters. But it's different than what we saw back in 2020 or 2008, or 2009. Those were

everything everywhere, all at once recessions where earnings were dropping across the board. This is different Intel and other goods producers,

particularly expensive goods, like PCs, are really seeing a big pullback in demand.

Yet at the same time services business, like airlines, for example, are seeing booming demand. So, it's not happening everywhere, all at once.

We're seeing different pockets of weakness rolling through the earnings picture. And that makes it complicated for investors to assess the overall

picture this earnings season.

SOLOMON: It's an interesting point, because what we're seeing I think you're alluding to this very well here is that companies that physically

make things I mean, PCs are things. But companies that physically make goods and services tend to be doing better in this period rather than the

tech companies that also do cloud and some of the technology geared services.

I want to turn quickly to PCE because we don't have a ton of time, but I want to get in quite a bit of topics here. I want to get to PCE. 5 percent,

not the Feds target of 2 percent. But are we decelerating quickly enough, you think?

KLEINTOP: We have been decelerating pretty well; I'm concerned that begins to not continue at this pace. The reopening of China reintroduces upside

inflation risks to the global economy. We've already seen it in commodities; we're starting to see it in some goods prices. And that could

mitigate the downtrend that we've been starting to see in inflation.

So, I'm afraid it might be a little bit stickier as we look out to the next several months. Of course, we'll have to see this momentum that with regard

to China's inflationary impact on the world, but it appears to be a risk to the upside on inflation.

SOLOMON: But do you also think with China's reopening that it also helps in terms of the supply chain starts starting to and continuing to improve? I

mean, we have the increased demand, as you pointed out, but we also have perhaps supply chains continuing to improve.

KLEINTOP: Yes, but I think China has done a pretty good job of maintaining supply output. I know there have been shortages of iPhones a few other

things. But in general production has been emphasized over consumption; it's really consumption that's pulled back sharply among China's 1.4

billion consumers that is coming back in a big way. So, I think the demand factor will overwhelm the supply factor when it comes to this resurgence.

SOLOMON: Jeffrey, when you're looking at the data, what are you looking at perhaps most closely to get a sense of what's ahead in 2023, you have

retail sales, which are clearly slowing. But on the other hand, you have GDP which impressed to the upside; you have the labor market, which remains

strong. What are you looking at as you try to make sense of all the data?

KLEINTOP: It really comes down to how central banks are seeing all of this data, one in this one maybe positive highlight was yesterday's the Bank of

Canada has been one meeting ahead of the Fed and many other central banks all year. They hiked just by 25 basis points yesterday, told us they were

done on Wednesday; I guess they told us they were done.

That is usually been an indication that the Fed is close to being finished. So while I am concerned about some of the underlying inflationary

pressures, getting central banks to pause, I think is going to be critical to seeing how the markets react here and therefore the outlook for demand

and earnings for the remainder of the year.

SOLOMON: Well, that's a perfect segue. Do you think we hear the same type of dovish language from the Fed when they meet next week? Because, look, I

mean, if we hear some of that language that they're going to pause so that their stop, I mean, the markets will rip, which you would argue perhaps the

Fed doesn't want to see. But do you think it's time that we now start to hear that language from some of these policymakers?

KLEINTOP: I think we'll hear more of a balance from the Fed that we've heard in a while setting us up for just maybe one more 25 basis point hike

after the one we're going to get next week. And that means that the Fed does need to shift its language a little bit how much of the market rallies

on that.

We'll have to see already the market has priced in very, very near the end of Fed rate hikes. So, I think the risk is should they mention something

about the China reopening creating renewed inflation pressure, that could be a risk to the downside. So, there's really definitely a big upside

downside potential here at this meeting next week.

SOLOMON: It's always very interesting listening to Powell is trying to sift through the Fed speak in terms of what he's saying what he actually means

and the vagueness of it all sometimes. Jeffrey Kleintop thank you. He is the managing director and chief global investment strategist at Charles

Schwab.

And still to come on "First Move"! These are the droids who are looking for and they'd like to take your drinks orders. I speak to the CEO of the

company behind them after the break.

(COMMERCIAL BREAK)

[09:40:00]

SOLOMON: Welcome back to "First Move". The Ottobot Yeti may sound like something out of a Transformers movie. And while this autonomous robot does

not fight crime, the company behind it says it could fill in the staffing gaps for companies like Amazon and FedEx.

Earlier this month Ottonomy.io unveiled its Ottobot Yeti, it is the first fully autonomous unattended delivery robot on the market. The robots have

already been in action at two U.S. airports and one in Italy, with more launches planned for this year. Joining me now is Ritukar Vijay; he is the

Co-Founder and CEO of Ottonomy. Great to have you on the program, sir!

RITUKAR VIJAY, CO-FOUNDER & CEO, OTTONOMY.IO: Glad to be on the program. Thanks.

SOLOMON: Absolutely. So, help us understand some of the applications of this, as we've said there at certain airports, you've mentioned some of the

delivery carriers, where might we see one of these robots.

VIJAY: So, what we're focusing on is, you know, autonomous driving technology to do hyper-local deliveries, both for indoor and outdoor

environments. So when we talk about indoor environments, so we can have these robots at multiple airports, where, you know, of course, security,

you can order online and things can be delivered to your gate.

And when we talk about outdoor deliveries, we're talking about curb side deliveries. So, these robots can bring in items from, you know, the store

to the parking lot for the curb side pickups. Or, you know, you know, alternatively, what we are doing right now is last mile delivery, which is

within a radius of one to two miles of radius.

SOLOMON: So how much of your business thus far has been that sort of last mile delivery and targeting those types of customers, the Amazons, the UPS

is of the world.

VIJAY: So right now, at this point in time we are we have, you know, open platform, which can be integrated with multiple logistics players. And we

have, you know, live robots which are running in, you know, U.S., Canada, you know, a couple of countries in Europe and Middle East. So, it's pretty

open platform where, you know, anybody can, you know, plug into the API's and have these delivery robots as a service.

SOLOMON: Help me understand how much does a robot like this cost? Because I know you mentioned that part of the allure is that it can help with some of

the staffing challenges that some of these companies are still experiencing, but give me a sense of how much it costs.

VIJAY: So, you know, the rationale behind it is, you know, the labor shortages, which we're seeing and, you know, because of these labor

shortages, the early wages of people have increased almost 100 percent. So, you know, just before 2021, we had somewhere around nine to $12 per hour as

a human cost.

But at the same time, at this point, we have we are running between 80 to $25 per hour. So, we want to bring - we're bringing these robots to help

enterprises and customers save almost 50 percent of the labor cost. And that is not going to just benefit the enterprises, but also the end

customer.

[09:45:00]

VIJAY: So typically, today, you almost spend like seven to $8 for like $10 burger. So your, bill to be paid is around $22 with the tip. But what we

are trying to bring is bring down the delivery costs for the end customer and, you know, make it viable for the large enterprises to deliver things

without labor shortages. So, broadly if I have to say the cost, instead of the number and say 50 percent of ROI, right from the day one.

SOLOMON: That's so interesting, because I sometimes when I won't say the name of the company, but when I'm thinking about whether to order food, I

look at the service and the delivery charge. And sometimes that makes me change my mind. I have to wonder, though, do you have any concerns about

how to protect these robots from theft from damage? How do you protect against things like that.

VIJAY: So, in that case, you know if anything unusual happens around the robot, so we record an incident, and, you know, these robots are having

enough sensors to capture that incident as well. So, that is one of the, you know, reactive ways to protect, you know, any damages which are done to

the robot.

But apart from that, what we have seen as people, you know, do, you know; feel safe around the robot, so they try not to, you know, harming the robot

or disrupting the operations. So, you know, incident reporting is one of them, and awareness.

So, once the customer starts, you know, realizing that they have to pay less for these deliveries, they are the champions who are going to help us,

you know, to, to, you know, make this technology more adoption, friendly in the neighborhood.

SOLOMON: You know, I don't have much time, but I do want to know, in 10 years, do you think that this will be a real part of our lives, because

sometimes we see with these tech trends, that they seem really interesting, they seem really cool, and they just go away. Do you think this will really

become part of an ingrained in our daily routines?

VIJAY: I think this is one of the most realistic, you know, applications or use cases of autonomous driving. And you know the focus is on the autonomy

part of these robots. So, as long as these robots are, you know, autonomous, there is a real use case, there is a real problem which they

are solving, unlike a lot of you know, long term trends, which are, you know, driverless vehicles and so on.

So, I think this is very real, and this is actually solving problems. So, you know, we foresee a massive adoption next five years and 10 years it is

going to be just a business as usual.

SOLOMON: Were going to be fascinating space to watch apparently, robots may be coming to an airport near us. We'll leave it there. Ritukar Vijay, thank

you for your time today.

VIJAY: Thank you.

SOLOMON: And stay with "First Move". We have more after this.

(COMMERCIAL BREAK)

[09:50:00]

SOLOMON: Welcome back! California's Silicon Valley is widely recognized as a global hub for innovation. The region has seen a rise in high tech

corporations and startups over the decades. And those success stories are now carrying a profound influence in other parts of the world.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE (voice over): Over two decades ago, in what some would say, was a bold move, eBay bought PayPal in a $1.5 billion deal. The move

revealed the existence of several influential individuals, which Fortune magazine referred to as the PayPal Mafia.

UNIDENTIFIED MALE: It's really new entrants that drive innovation more than anything.

UNIDENTIFIED FEMALE (voice over): This group of PayPal's founders and former employees, including industry leaders, like Tesla's CEO Elon Musk,

LinkedIn Co-Founder Reed Hoffman, and Peter Thiel, Facebook's first outside investor. Their contributions helped to transform Silicon Valley into a

global hub for innovation. And now thousands of miles away from America's Golden State a similar trend is taking place in the Middle East.

SAMMY HASSAN, CO-FOUNDER, NOLEMONS: I think Dubai and in the region, we are seeing a similar effect to the PayPal Mafia.

UNIDENTIFIED FEMALE (voice over): 30 year old Sammy Hassan was an Assistant General Manager at ride hailing startup Careem in 2016. He was among the

youngest at the company to take on such a role. And when Careem was bought by Uber for $3.1 billion in 2020, the resources he acquired gave him the

tools to launch his own company.

HASSAN: The Careem alumni are out and about setting up new ventures, and really encouraging everyone in the ecosystem to hop on.

UNIDENTIFIED FEMALE (voice over): Aside from providing its alumni with a financial push for their own ventures Careem's symbolic exit also build

confidence across the region's entire startup ecosystem.

MUDASSIR SHEIKHA, CEO & CO-FOUNDER, CAREEM: All of a sudden, everyone saw this validation and started focusing on it. And hence we saw this amazing,

positive tsunami of impact that's happened last couple of years.

UNIDENTIFIED FEMALE (voice over): Careem's alumni have launched over 100 startups in countries such as the UAE, Pakistan, Egypt, Saudi Arabia,

Jordan, and many others. Some are even giving back to the wider startup community, like Danny Laczo who started his career with Careem as their

Head of Sales and Partnerships.

DANNY LACZO, CO-FOUNDER, SWAPP: And get a lot of reach outs for advising businesses on business development. This is something I genuinely enjoy

doing. I tried to give back from this experience as much as possible to help and inspire other people.

UNIDENTIFIED FEMALE (voice over): According to magnet, the region's leading venture data platform, what happened with Careem created a ripple effect

across the Middle East startup ecosystem.

LACZO: And it's the success of Careem that really inspires others to see that there really is light at the end of the tunnel.

UNIDENTIFIED FEMALE (voice over): From PayPal to Careem homegrown success stories in the startup world have now set the stage as they continue to

provide a source of inspiration for other entrepreneurs, who are driving the future of innovation.

(END VIDEOTAPE)

SOLOMON: India's Adani Group has lost about $50 billion in market value this week after fraud allegations by a major U.S. short selling firm.

Shares of Gautam Adani's business and buyer continue to plunge after Hindenburg research accused of stock manipulation and an accounting fraud

scheme.

Adani is calling the allegations baseless and malicious. Marc Stewart joins me with the latest. Marc look, the investors in the market appear to be

taking these accusations seriously walk us through the market reaction.

MARC STEWART, CNN CORRESPONDENT: Right Rahel, so this is a $50 billion decline in market value, very significant. It started on Wednesday,

Thursday, the stock market in India was closed and then on Friday today, it really continued this acceleration over the last few days.

It really got some fuel when Bill Ackman he's a hedge fund player. He's a billionaire. He made some statements that he felt gave this report critical

of Adani some teeth and investors followed. This is really stunning. This is a business empire that at one point saw its value. I'm just checking my

notes here. Its values its such shares go up by more than by 500 percent in recent years, and now we are here today, Rahel.

SOLOMON: Marc, are we hearing from Adani additionally, after what we said earlier? What's next here?

STEWART: Right. So I just was looking at some of the language that the Adani Group has been using and again had been pretty firm in their denials

from the start calling these baseless and malicious accusations. But what is new in this realm was that he is considering legal action.

With all that said he still remains the wealthiest man in Asia. He's still top on the Billionaires Index by Bloomberg but it will be interesting to

see if this takes on a whole new chapter through litigation?

[09:55:00]

SOLOMON: Especially because litigation might mean discovery, which might mean more information and depending on which side you are, maybe that's a

good thing. Marc Stewart, thank you. We appreciate that.

STEWART: OK, take care.

SOLOMON: And that is it for the show. I'm Rahel Solomon, have a good weekend. "Connect the World" is coming up next.

(COMMERCIAL BREAK)

END