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First Move with Julia Chatterley

Belgorod Governor: At Least Eight Injured in Shelling; Lawmakers Race to Avert Government Default; Key Month Ahead for Global Markets; JPMorgan CEO Jamie Dimon Denies Meeting, Talking to Jeffrey Epstein; Amazon to pay $25M over Alexa Recordings; Calls to Reassess U.S. Airline Seat Size. Aired 9-10a ET

Aired June 01, 2023 - 09:00:00   ET




JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to all our first movers around the globe great to have you with us for a brand new month on

the show. Coming up over the next hour, Kyiv under attack at least three people have died and more than a dozen injured after fresh Russian missile

strikes overnight the worst loss of life there in weeks.

And Ukrainian President Volodymyr Zelenskyy meeting with European leaders in Moldova today he's emphasized that his country is ready to join NATO.

Even the NATO Secretary General says Ukraine will be a member of course for both sides the question is when?

Also one down one to go the U.S. House approving the debt ceiling bill on Wednesday now it heads to the Senate we're live in Washington for the

latest on that. And on financial markets around the world U.S. stock market futures pointing to a softer open as we wait the timing of that Senate vote

plus of course, tomorrow's important U.S. jobs report.

And ahead of that new data showing private sector firms added a whopping 278,000 jobs net last month. Almost 100,000 more than expected confusing

what slowed down. And over in Europe and inflation and jobs jumped too Eurozone inflation falling to the lowest level in more than a year

unemployment also dropping to record lows.

Stocks, as you can see higher over in Europe. And we have all the details on that as well. Lots to get to today, as always, but we do begin with the

latest from Ukraine. And as mentioned, three people including a child and her mother lost their lives in the Capital Kyiv killed by falling debris

from a missile.

They were actually trying to get into a bomb shelter but found it locked in the meantime, more shelling on the Russian border region of Belgorod. The

Governor there sees that at least eight people were injured in the latest strike.

Sam Kiley joins us now. Sam, I know you've discussed and reported on many tragedies in Ukraine over the last 16 months but specifically this story of

the family trying to get access to that bunker do we know why the door was locked and they couldn't get in?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well Julia, sadly that is the subject of an official investigation now in Kyiv. People were saying

eyewitnesses and indeed survivors of this crash of debris, which followed the downing of an incoming missile, or it was a consequence of the anti-

missile batteries firing over Kyiv said that they would seeking out large numbers of civilians were trying to get into the Soviet -- one of the

Soviet era bunkers that are all over the city and indeed all over the country from the days of the Cold War.

And incredibly after 16 months of war, they found the door locked and soon after that moment when they were trying to get in banging on the door,

trying to find officials with a key that was the descent of this debris and two people killed a mother and child absolutely avoidable tragedy in so

many ways.

And one that clearly the Ukrainians are going to be extremely upset about. But it is also upsetting the Russians that the Ukrainian new campaign is

focused on. There is now according to Russian officials, cross border shelling on a pretty frequent basis of border villages close to the

Ukrainian border inside Russia.

There are claims coming from a Russian dissident group supported by Ukraine, those are the Russians fighting under the banner of Ukraine that

they have crossed into Russia once again. The Russians claiming that they repelled two companies of these fighters we don't have independent

corroboration of either claim as yet.

But this is clearly part of really the beginnings of the counter offensive, I think we could be safely saying this is what is new now in terms of the

tactics and the strategy of the Ukrainians is to try to take the war into the Russian landscape.

The problem with that, of course, as we've seen in Russia is that they -- that means that eight people according to officials, there have been

injured civilians have to evacuate their villages. And that starts to look a bit to like what the Russians have been doing inside Ukraine.

And that's going to be a delicate thing for the Ukrainians to navigate in terms of their tactical approach. Now the Russian fighters going to fight

inside Russia on behalf of Ukraine have been broadcasting on social media trying to get civilians out of the area telling civilians to stay in safety

if they can't do that underground and in bunkers, but also insisting that they are absolutely not intent on targeting civilians, Julia.

CHATTERLEY: Sam Kiley, there, thank you. President Zelenskyy is in Moldova attending the European Political Community Summit with around 50 other



He's again, urging NATO to make Ukraine a member.


VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: Ukraine is ready to be NATO. We're waiting when NATO will be ready to host and to see -- and to have

Ukraine. And I think security guarantees are very important not only for Ukraine, for our neighbor's Moldova, because of the Russia and of their

aggression in Ukraine and potential aggression for them part of Europe.


CHATTERLEY: Clare Sebastian joins us now. The problem for NATO, of course, is it would have profound implications for consequences for this war and

beyond. Even the Secretary General said Ukraine will be a member Clare the question, particularly for Ukrainians at this moment is when?

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, and I think look it's been clear all along, and was made even more clear today, both by the German Foreign

Minister and by the NATO Secretary General himself that they cannot join while this war is going on.

That is, I think, sort of a part of the structure of NATO. Article Five would be triggered NATO would end up in an all-out war with Russia. Now, of

course, you could argue that had they been able to join earlier, this could have been a deterrent against Russian aggression, we will never know.

But the frustration for Ukraine is that nothing officially really has changed in its sort of political relationship with NATO since 2008, when we

got the Bucharest commitment that the alliance would support its bid for membership. The Secretary of State of the U.S. Antony Blinken saying today,

we all stand by that Bucharest commitment.

But that was 15 years ago. And Ukraine is now looking for some kind of interim concrete steps, something like security guarantees, as you heard

Zelenskyy say. And he elaborated on this even further in Moldova. Take a listen.


ZELENSKYY: This is the sort point I would like to emphasize in summer in Vilnius at the NATO Summit, the clear invitation to membership for Ukraine

is needed. And the security guarantees on the way to NATO membership are needed in fall on our accession to the EU clear positive decision is

needed. And we are also preparing for peace summit, which will guide the world majority to implement the join this formula.


SEBASTIAN: So I think he really got a sense of his frustration in those comments. He said before that, you know how is it that Ukraine is

essentially paying in its blood for freedom in European values and cannot get any concrete decisions either on the EU or NATO?

If we can't, what hope is that he said, for anyone else now the NATO Secretary General has come out again and said that they're looking at sort

of he said credible arrangements to guarantee Ukraine security after this war is over things like upgrading the NATO Ukraine commission to council

status, these sort of interim measures, all of that would be, I think, welcomed by Kyiv. But they are frustrated Julia that they have not seen any

concrete action as of yet.

CHATTERLEY: Interesting Clare, I wanted to get your take on what we were just discussing with Sam Kiley, too. And as you mentioned the noises from

the Germans are interesting, I think in the last week or so, particularly with regards what Sam just said to us about perhaps what we're seeing now

is the beginning of the counter offensive with some of the violence that we're seeing on Moscow, in Moscow and on Russian territory.

The German government spokesperson saying yesterday, Germany says Ukraine has legitimate right to defend itself against Russian attacks under

international law, versus the noises that we're getting from the American side, which is far more cautious, even as Ukraine denies any involvement in

those attacks interesting in light of the noises that we're hearing from the NATO Secretary General and members there and the concerns, ongoing

concerns of the Ukrainians.

SEBASTIAN: You know, I think this is a backdrop for these summits, that does in to some degree complicate matters for Ukraine's allies now that it

looks at least certainly we've seen an escalation in the past days and weeks, like more of this war is now being fought on Russian soil.

And of course, we know, for example, that a lot of the military aid the Western weapons that Ukraine has been given have demanded from Ukraine

assurances that they will not be used on Russian territory. Now, we don't really have evidence that they've done that is as of yet, and Ukraine has

not admitted to being behind any of these cross border attacks, including that drone attack on Moscow that the Russian authorities averted.

But the Secretary General of NATO was actually asked about this earlier today. He was asked is this shifting your stance on Ukraine at all, and he

was not particularly explicit. He said look, we still stand by Ukraine's right to defend it.

This is clearly a Russian war of aggression did not go as far for example, as the German government spokesperson or even the British Foreign Secretary

earlier this week, who said that Ukraine has a right to project force outside of its own borders, which sparked fury in Moscow and essentially

caused the Former Prime Minister to say that the UK was in an undeclared war with Russia so a very delicate situation and Russia is very sensitive

to these comments.

CHATTERLEY: Yes and perfectly put that's the backdrop everybody choosing their words very carefully here I think Clare Sebastian great to have your

context thank you.


OK, let's bring you some good news now. New data this morning shows inflation in Europe falling to its lowest since the war in Ukraine began

consumer prices up by still large annual 6.1 percent last month. But compare that to the 7 percent level we saw back in April, there was a

slowdown in price rises in a whole host of categories.

And speculation now that it could nudge the European Central Bank into pausing its series of interest rate hikes. Anna Stewart joins us now. I

read that but I don't buy it. OK, give me the details. It's not just about inflation, either. It's about a strong growth number, which I admit poses

some problems, but we're still talking about plus 6 percent inflation rate, let's get a grip right.

ANNA STEWART, CNN CORRESPONDENT: Prices are moving in the right direction, but they're still increasing.


STEWART: So people in the Eurozone are going to be feeling much of a benefit here. And they'll be looking at this news and hoping that they soon

do feel a benefit at the shop too. Two elements be concerned about services inflation, it only slow to fell 5 percent from 5.2 percent so actually not

a huge amount of movement there and food inflation, which came down by 1 percent.

That is great, but it's still at 12.5 percent, which is why we have to be concerned I think about wages, people are continuing, understandably, to

chase a higher wage to try and pay for this huge increase in their grocery bill and services, bills and everything else.

And we are seeing high wage growth. The last quarterly data from the Eurozone on their shared wages increasing between 5 and 6 percent from the

year before, I think it's a really important indicator to look at if we're going to consider when will we see inflation really reach a sustainable

level? Well, I think we have to see wage growth starts to slow and you know what the labor market in the Eurozone is tight?

CHATTERLEY: Yes. And that's the key. So I think we're sort of agreeing, but not saying that. The European Central Bank, not going to be pausing anytime


STEWART: I agree with you. I don't think so. But it was interesting today that with a tiny glimmer of good news, a few economists did put their hands

up and say, hmm, maybe this is sooner and to all these rate hikes. I'm not so sure June certainly is baked in.

The big question mark is July maybe they take a pause and wait for another rate hike. The market is still pricing in at least two. And I do wonder if

you can put into the equation, economy's under strain. We were talking last week, of course, about Germany entering into a recession.

All that said ECB President Christine Lagarde did speak today. And she said we still have ground to cover to bring rates to sufficiently restrictive

levels. So I think you're right. I don't think we're going to see much of a mess up here. The ECB, as we all know, was pretty slow to act on inflation.

I think they will take a very cautious approach to ending the rate hikes.

CHATTERLEY: Yes. And even if she thinks she's got the room and the ECB have the room, perhaps suppose they're not going to signal that yet. Let's some

have some of that tightening still priced in to do some of the work for them perhaps. Anna thank you.

OK, now the debt ceiling drama and race to avoid a historic U.S. default now shifts to the U.S. Senate. House lawmakers voted to raise the

government debt ceiling late Wednesday night. President Joe Biden praised the House for passing the deal and urged the Senate now to "Pass it as

quickly as possible".

Rule makers in the Senate want to move ahead with their vote later today, but not yet clear if that will happen. Arlette Saenz joins us now. Arlette

I hate to sound like a child on this. But are we there yet?

ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, the bill has at least made its way through the House. But now there is still the difficult task

of getting this passed in the Senate. But just to take a step back for a moment, that vote last night that took place in the House of

Representatives did occur along bipartisan lines.

There was about a little over half of those votes coming from Democrats and then Republicans supplying the rest. And it really capped off a weeks of

very tense negotiations and very vocal frustrations that were expressed by some in the Republican Party and some within the Democratic Party.

Now, the President praised this for being a bipartisan compromise and he called House Speaker Kevin McCarthy shortly after that vote passed. But now

the difficult task of getting this through the Senate before that Monday, June 5th deadline is what is at hand.

Now both Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell has said that they want to move on this as quickly as

possible. They are hoping that they can hold a vote by the weekend.

There is a possibility they could even vote on it today. But the issue at hand at this moment is that any one Senator can slow down the proceedings

and there have already been a number of Senators who have said that they want to present amendment votes to this process.

Leadership has seemed open to holding these amendments, but there's also a little bit of a snag there because an amendment is actually adopted. Then

they have to send this bill all the way back to the House for another vote.


So all eyes will be on the coming days whether any of those amendments will get any types of votes whether there will be any agreements try to speed up

this timing as they are trying to avert default as June 5th is that date that Treasury Secretary Janet Yellen has outlined that the U.S. could run

out of cash to pay its bills.

CHATTERLEY: Yes. So the answer is not yet to my -- are we there? Arlette great to have you with us thank you Arlette Saenz there! All right,

straight ahead Alexa Angst Amazon's virtual assistant accused of being a pint sized snoop, Amazon, paying the price, but it's a little one that

story coming up.


CHATTERLEY: Welcome back to "First Move". Forget June bugs investors need a round of June hugs I think after a challenging month of trade around the

globe. The NASDAQ the tech heavy sector was the bigger U.S. winner last month rallying almost 6 percent.

Now just compare and contrast that with the DOW off by more than 3 percent. It's actually one of the biggest disparities in U.S. stock market

performance in years. There's also some concern about the lack of market breadth only a handful of tech stocks like Nvidia as we've been talking

about the chipmaker paring gains overall Nvidia for its parts up more than 30 percent in the past month.

Then take a look at the Japanese NIKKEI the global winner overall in May that was up by some 7 percent its best month in more than two and a half

years. And take a look at Europe plus is pretty much across the board there.

The question of when next for the stock markets in many ways depends on a whole host of things the debt ceiling agreement in the United States

incoming economic data, including U.S. jobs and inflation numbers plus prospects for a Federal Reserve policy pause. There's also a growing

consensus that the U.S. Central Bank will leave rates where they are this month, but also leave the door open for further tightening should it be


Much to discuss and I'm pleased to say Lisa Shallet joins us now. She's the Chief Investment Officer at Morgan Stanley Wealth Management. Lisa,

fantastic to have you on the show thank you for joining us!

Unfortunately, I want to start with the U.S. debt ceiling debate. It has investors and have investors in the past month come to you at any point and

said look, am I -- is my money safe in U.S. assets and the U.S. dollar or was it never that bad.


LISA SHALLET, CHIEF INVESTMENT OFFICER, MORGAN STANLEY WEALTH MANAGEMENT: It really was never that bad. I mean, you know, one of the things that I

have found amusing over the last three or four days is, you know, some market commentators talking about the fact that, you know, markets seem to,

you know, be having a relief rally, because we settle the debt ceiling, or we seem close to a deal.

I mean, the United States stock market ever discounted fear here. We only saw a fear, really, in the very, very front end of the United States

treasury curve, and we were looking at, you know, yields for one to three month T bills. And, you know, even there, you know, things have rapidly

pulled back.

So, you know, this is not an issue that I think, you know, long term stock investors were particularly concerned about. I think, the broader issue

around, you know, United States overall debt, and you know, our ability to continue to service that debt, if, in fact, interest rates are higher for

longer is a legitimate long term concern for investors.

It calls into question, you know, some of the benefits that the U.S. has had, as the world's reserve currency and the strength of the U.S. dollar

and things of that nature. But I think that's going to be the debate for another day. And yet again, the politicians in Washington have managed to

kick it down the road.

CHATTERLEY: Yes. And just quickly to draw a line to this to the point that you made, which I think is very important. We saw investors that invest in

the very short term debt, we're like, look, I don't want to be holding this and for the most part, if there is some kind of event where interest

payments don't get paid.

Does that have any material impact on the economy? Do you think it's had any material impact on the economy, including, I think, lines from the

media that were pretty alarmist over this period?

SHALLET: Yes, no. I think a lot of what you saw on the very front end of the yield curve was a lot of "Inside Baseball Meaning" --


SHALLET: -- positioning among money market funds, which moved out of ultra- short duration United States treasuries, and kind of secured their deposits with reverse repo. So, you know, again, a lot of inside baseball, pretty

technical stuff. I don't think that this, you know, debt ceiling debate itself, has had a big impact on the market or on the economy.

I think the bigger question, and we've been saying this a lot, which is it wasn't really for us a question of if, but when and how. And so I think

there are two takeaways that investors focused on the debt ceiling need to think about.

The first is the when it now appears that Janet Yellen will probably be able to reenter the treasury issuance market in the second half of June or

if not sooner, that action is going to begin as she sells treasuries to drain liquidity out of the market.

What a lot of folks don't recognize is during this last, you know, six months, Janet Yellen, in her spend down of the treasury general account,

has, in essence, been stimulating the economy because she's been spending money and sending out checks without that spending being diffused with


Now, as we rebuild that general account over the next six months to the tune of about 650 to $700 billion, you know, she's going to be doing the

equivalent liquidity drain, as the Feds been doing right with their QT. So the Feds been, you know, taking 95 billion out.

And, you know, she'll now be probably draining about another 100. So it's going to feel like QT doubled. And I think that's going to be a headwind to

markets as liquidity begins to tighten up here.

I mean, one of the mysteries, I think of this cycle has been that since October, despite the fact that the Fed has, you know, continued hiking

rates is financial conditions have actually eased, and they're significantly looser than they were last October so that that could start

to provide a headwind. I as the treasury rebuilt its general account.


CHATTERLEY: This is such an important point. And just to say that my viewers understand QT Quantitative Tightening. So there's the tightening of

conditions that do make it sort of harder to borrow, for example, in the real economy.

OK, so let's tie this and the importance of that now, to what we've seen in the stock market because if you look at the numbers overall, and I

mentioned it, particularly for the S&P 500, and the NASDAQ, the performance has been pretty great.

But you look beneath the surface, and you realize it's a bunch of tech stocks and a very narrow bunch of them that are sort of lifting all votes,

and then you compare it to some of the smaller cap stocks and the banks, for example, the regional banks in this situation looks pretty bleak. So

what's going on? And how long can the broader market be sustained by a sort of bunch of tech stocks as excited as we are by AI?

SHALLET: Yes, I mean, Julia, unfortunately, you and I've seen this movie before.

CHATTERLEY: Many times.

SHALLET: Yes, it doesn't end well. And what I mean by that, is that look, we can all, you know, garner a bunch of enthusiasm for new technologies.

And that was certainly, you know, the case in 1999 2000, around the build out of the internet, et cetera, et cetera.

But when markets become extraordinarily narrow as they are now, when the investment themes become extraordinarily narrow, when a handful of mega cap

tech stocks that are already dominant in terms of their share of the market capitalization of the indices, it's very hard to kind of, you know, form

ahead esteem for a new bull market.

And what you tend to get is increasing fragility, because the expectations of the market get concentrated in a handful of stocks, which, as we've

begun to see, every, you know, one of those stocks isn't going to meet and beat every one of those. It's, you know, ever increasingly exuberant



SHALLET: And so, so what happens is, as valuations get richer and richer, those stocks become more and more dependent on low interest rates to

support high PE multiples. And so, you know, the question that I've posed, you know, to some of these, the investors who are built up around this

theme, is, look what happens, you know, AI is great.

But what happens, if, in fact, the Fed either hikes rates again this year as opposed to cutting them, and or inflation remains persistent and rates

are higher for longer in this four to 5 percent zip codes can you really signify, you know, a 30 or a 40 times forward multiple on some of these

tech stocks? And do it, you know, in good faith, and you know, that's where these things start to get dicey is that the valuations just disconnect.

CHATTERLEY: Yes, particularly when we have like we had today, this morning in the United States an incredibly strong jobs report. It sort of buys the

Federal Reserve that little bit more room perhaps to say, look, we still need to do a bit more work. Can I use your pan?

SHALLET: Exactly.

CHATTERLEY: Can I ask you about Japan, because this was like the chart of the week and everybody's talking about this the 33 year high for the stock

market, record buybacks, so companies buying back their own stocks. And the other thing that's exciting, in contrast to what we were just discussing,

in valuation terms, you know, there's still opportunity, arguably, what do we think of this?

SHALLET: So we're actually pretty excited about the position that Japan is in right now. Not only do we finally have the fruits of Abenomics, which,

as you know, we can remind everyone was really kind of planted as a as a philosophical, you know, tenant of, you know, of Ave, that the corporations

in Japan should become more shareholder friendly, that they should make less complex, some of their corporate organizations, they should, you know,

focus on improving their return on equity.

Now, it's taken quite a long time. It's taken time for the Bank of Japan to actually generate real growth and, you know, positive inflation metrics for

the Japanese economy. They've achieved that now.


And, you know, as well, we're in a position where the geopolitics between the U.S. and China has obviously changed profoundly. And they've changed in

a way that increases Japan's importance to both players. Japan is obviously extraordinarily well positioned as an exporter, throughout Southeast Asia

to China directly, and obviously, you know, has a long standing allied trade relationship with the United States.

And all of this is coming at a time when the Japanese yen has weakened not only against the United States dollar. I mean we're back to about 140. Just

to put that in perspective for investors, you know, to only two years ago, the yen was about, you know, 40 percent stronger.

And so that's a huge competitive advantage for Japanese manufacturers and exporters and that weakness, that currency weakness has been true against

the United States dollar and now increasingly, against even the -- and so Japan's in a very interesting time in history. And do think that this most

recent move, to your point, Julia may have legs here, you know, for another 6 to 12 months.

CHATTERLEY: Yes, and I love your point about seeing if we do see further disengagement by the United States and China then Japan's in this perfectly

positioned to perhaps service both countries and benefit. Lisa, fascinating to have you on, great conversation thank, you so much for your time. Lisa

Shalett there, the Chief Investment Officer at Morgan Stanley Wealth Management. Thank you.

SHALETT: Good to chat, Julia.

CHATTERLEY: Thank you. We'll back after this.



CHATTERLEY: Welcome back to "First Move". Wall Street is back and open for business on Thursday. U.S. investors getting into on the first day of June

but in early trade at least the bulls are not yet in the room and mostly lower open for U.S. stocks with the debt ceiling vote and of course,

tomorrow's jobs data firmly in focus.

MACY's isn't early session loser. The U.S. retailer fees sales have been weakening this spring it's also cutting its full year outlook fresh concern

that U.S. consumers are turning cautious as inflation remains high. This is part of the dichotomy of the U.S. economy as we were just discussing.

Now the longtime Chief Executive of JPMorgan Chase says he had little first-hand knowledge of the bank's relationship with Jeffrey Epstein. This

comes from the newly released transcript of Jamie Dimon's deposition related to lawsuits against JPMorgan. During the eight hour interview Dimon

denies having ever met or talked to Epstein.

Epstein held accounts with JPMorgan for 15 years with the bank eventually severing ties with him back in 2013. Or now the bank is facing lawsuits

brought by a victim of Epstein and by the Attorney General of the U.S. Virgin Islands, allegedly JPMorgan ignored multiple warnings that Epstein

was using money to finance sex crimes. Christine Romans joins us on this now. Christine, what more do we know?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know Epstein was a JPMorgan client, Julia, from 1998 to 2013. And during that time, Epstein

was indicted on a prostitution charge in 2006 involving a minor pleaded guilty in 2008. Then in 2019, Epstein was arrested on Federal sex

trafficking charges and he died by suicide while detained.

Now Dimon says he was not really aware of Epstein's criminal history and relationship with his bank until after that 2019 News broke. Now the suits

alleged people at Chase knew about the sex trafficking allegations against Epstein, but they still did business with him.

In a statement to CNN a spokesperson JPMorgan's spokesperson told us that, had the firm believed he wasn't engaged in ongoing sex trafficking

operation, Epstein would not have been retained as a client. In hindsight, we regret he was a client. Dimon did acknowledge that he is now aware that

some JPMorgan employees knew Epstein was charged with sex crimes involving cash and that he was moving large amounts of cash in his accounts and in


And JPMorgan has sued a Former Banker there Jes Staley known to be a friend of Epstein alleging he is to blame for that long 15 year relationship

between the bank and Epstein and Staley, Julia, for his part has denied all wrongdoing, Julia.

CHATTERLEY: Christine Romans there. Thank you so much for that. Now, fears are growing of another religious crackdown in Southern China, members of a

Muslim ethnic minority have been defined the government's attempts to demolish the dome of their mosque. They say they're the latest victims of

Beijing's campaign to remove religious symbols from places of worship. Ivan Watson has the details.


IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT (voice over): A rare confrontation between law enforcement and the faithful. Chinese Muslims

clashed with police outside a mosque in Southwestern China. For two days last weekend, residents of the village of Najiaying tried to protect their

mosque from a Chinese government reconstruction plan.

They want to demolish the roof of our mosques and emotional local protester tells CNN speaking on condition of anonymity. This is our last bit of

dignity, the protester says. It's like someone going to your house and demolishing it. CNN reached out to Chinese authorities for comment but the

only official acknowledgement of the incident comes from this local government statement urging protesters to turn themselves in after

disrupting social order and causing severe adverse impact.

WATSON (on camera): Is it safe to be a Muslim in China today?


WATSON (voice over): Ma Ju is an Imam and activist from the Hui Muslim ethnic minority living in exile in the U.S.

JU: No Muslim is safe in China. My people, the Hui people, everyone is trembling, scared and living in fear.

WATSON (voice over): He claims the Chinese government has targeted hundreds of Hui mosques across the country, demolishing their Arabic inspired domes

and minarets, and replacing them with Chinese styled architecture. CNN has independently verified before and after images of several of these cases.

Part of Chinese Leader Xi Jinping's policy of sinicization, instructing religions to basically look more Chinese.

JAMES LEIBOLD, PROFESSOR OF CHINA STUDIES AT LA TROBE UNIVERSITY: The logic of what China is trying to do is about social reengineering. It's by

remolding people.


WATSON (voice over): Academics and activists say since Xi came to power, there have been crackdowns on expressions of religious, ethnic and

linguistic identity.

JU: Xi Jinping's policies are aimed at all socially organized groups, including Christians, Buddhists, and even some civil organizations,

including LGBTQ.

WATSON (voice over): CNN extensively reported on the detention of more than a million ethnic Uyghurs and other minorities in China's Xinjiang region in

internment camps. And CNN reported on clashes around churches in Eastern China, where authorities chopped the crosses off the top of Christian

places of worship those scenes in 2015 remarkably similar to the images of protesters trying to protect their mosques today in Najiaying.

Today they'll change our mosque tomorrow they'll ban us from going to mosques the local protester tells CNN. A last ditch effort to protect

deeply personal concepts of faith and identity from being defined by the Chinese state. Ivan Watson CNN, Hong Kong.


CHATTERLEY: Coming up after the break, Alexa, are you listening Amazon accused of breaching privacy laws by keeping recordings of young users

voices that he tells, next.


CHATTERLEY: Welcome back to "First Move". Amazon has agreed to pay $25 million fine after the U.S. government found its Alexa service breached

privacy rules. According to the Federal Trade Commission, Amazon indefinitely kept Alexa voice recordings of children using the service in

violation of a U.S. law on privacy for youngsters.

Clare Duffy has more on this. Clare, the first thing I looked at was the annual revenues of Amazon which I believe last year were at $514 billion.

So this fine is a grain of salt on a peanut in several bags but separately put that aside what laws were breached? How long were these recordings kept

and now what?

CLARE DUFFY, CNN BUSINESS WRITER: So, Julia, This was actually part of twin settlements that Amazon agreed to yesterday related to privacy violations

from as you said it's Alexa smart recording device but also its ring home doorbell device. Now Amazon the FTC claimed violated a law that requires

company, restricts companies rather than from keeping the recordings of children or personal information of children without parental consent.


The FTC claimed that Amazon retained recordings of children from these Alexa devices indefinitely and in some cases, Julia, even failed to delete

these recordings even when parents specifically requested it.

CHATTERLEY: OK, so it's an interesting one, isn't it, because everyone who uses Alexa knows that you can go back in history, and you can look at every

single command that you've given to it music, for example? So I guess as a parent, you could go back and see what your children have been listening


My concern today, and why I think this question needs to be asked is the ability to perhaps using artificial intelligence and tools like this going

forward to manipulate voices to perhaps weaponize voices be a child or otherwise? I guess that's the danger and part of the deeper sensitivity

today than ever before.

DUFFY: Right that was one of the concerns the FTC raised here is that parents might not be aware of all the ways that their children's data is

being used by these companies that also raise concerns that too many employees within Amazon had access to these kinds of recordings in this

kind of personal information.

And those parents might not realize that their children's voices are being used to train and improve Amazon's AI systems. Now, this settlement will

require Amazon not to use geo-location data or recordings of children to train an AI going forward. It also will require the company to delete

recordings and other personal information when users specifically request it and to go back and delete.

In accordance with past requests that the FTC said Amazon had failed to honor. It's worth noting, the Amazon said that it didn't violate any laws,

and that these settlements will only add to its already strong privacy practices. But this does seem like a really symbolic and important sort of

gesture from the FTC in terms of holding Amazon accountable for those promises.

CHATTERLEY: Yes, I mean, they hold a lot of data, don't they? It's just a case of ciphering sifting through it and deciding what needs to be deleted

when? Interesting comments from Amazon there too I think. Clare, great to have you thank you. OK, many Latino businesses in several U.S. states

temporarily closing their doors holding a protest under the banner A Day without Immigrants.

It's in response to a Florida Governor Ron DeSantis's hardline anti- immigration law that targets undocumented workers. Carlos Suarez joins us now. Carlos, give us the context on this. What was the decision in the rule

change by the Florida Governor? And clearly it's having an impact on some businesses you kind of see both sides of this.

CARLOS SUAREZ, CNN CORRESPONDENT: That's exactly right, Julia. So immigrants across the State of Florida, they're trying to highlight the

economic impact that they have on Florida's economy by this work stoppage aware in Immokalee, Florida, that's a farming community, to the east of

Fort Myers, where several businesses, restaurants, even the Catholic Church, have told us that they are going to close today, in support of

immigrants across the State of Florida.

There's a new law that's going to go into effect in July here in Florida that does a number of things, it is going to require that some businesses

expand the use of a federal database, that's called e-verify, to make sure that all of the workers that they're hiring are in the U.S. legally.

It's also going to require that some hospitals ask their patients about their immigration status. And it is going to make it a crime a third degree

felony for someone to bring someone that is in the U.S. illegally into the state of Florida. Now, yesterday, we were at a restaurant in West Palm

Beach on the other side of the coast of Florida, where a restaurant owner told us that a third of his staff, a third of his workers have quit.

Many of them are undocumented workers. They told him look, we don't feel safe in Florida we don't want to be here anymore. And so they are moving

out. He was pretty emotional in our conversation telling us the impact that this is really having on his business. Here's a bit of that conversation.


VICTOR PRADO, OWNER OF EL MARIACHI MEXICAN RESTAURANT: I have been in the country for 23 years. Working hard, fortunately, I had the opportunity to

open the restaurant with my partners. We are not criminals. I feel bad because I opened the restaurant five years ago. And I am losing my business

for one law. It's not fair.


SUAREZ: And so that owner there told us he is closing his restaurant today in support of immigrants across the State of Florida today. Again, this law

does not go into effect until July. But there is a great deal of anxiety right now among a farming communities as well as just immigrants really no

matter of their status, because they're not sure exactly how this law is going to impact them.

Again, some of these changes are going to be felt more on the business side of things. But then you start talking about some questions that are going

to be asked of folks in hospitals and as you can understand, Julia, that makes a good deal of these immigrants very uncomfortable.


CHATTERLEY: Yes, very understandable. Carlos, you can understand the authorities desire to not encourage illegal immigration but at the same

time I know a lot of these businesses particularly in the farming industry are saying they're doing jobs that the others don't want to do.

So what do you want us to do? Carlos, great to have you thank you, Carlos Suarez there. OK coming up after the break in the hot seat over airline

seats, U.S. regulators under pressure to look at safety as airlines go for more seats, more money too and less space.


CHATTERLEY: Welcome back to "First Move", if you regularly fly economy and you feel airlines are getting just a little bit more cramped. Well, two

Democratic Senators are on your side. For starters, they say us airline regulator the FAA should take safety more seriously, and carry out

realistic evacuation tests.

CNN's Aviation Correspondent Pete Muntean joins us now. Pete, you know what blew me away actually about this story was that I believe the safety

regulations were written back in the 1960s. If nothing else, as a society we are more rotund. Can I use that word -- taller -- suit? Yes.

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: That's true. You know, I think maybe passengers are a little bit quicker to complain now.

CHATTERLEY: That's true -- .

MUNTEAN: There's a bit -- but, you know, think about this, like more seats on an airplane. The airlines have to make this seat smaller, but more seats

make it harder to evacuate an airplane in an emergency. So Senator Tammy Duckworth is proposing this. And she says this is really all about safety

even though the unintended outcome here could be a regulation that makes it so that the airlines can't make seats any smaller.

Let's talk about this over time, back in 1960, the pitch of a seat that's the distance between the back of your seat and your knee. Essentially, the

legroom was about 35 inches on average, according to flyers rights. But nowadays, the average is about 31 inches as people have gotten bigger.

As you mentioned, the CDC here in the U.S. says Americans, at least man have gained about 30 pounds in that period of time and I've gotten an inch

taller. So Duckworth says these FAA tests that took place back in 2019, where they did a mock evacuation of an airplane. It was really skewed.

There weren't folks under 18 nobody over the age of 60 no carryon bags, no car seats, no kids. And so she says that this is really long overdue to

redo these tests. I want you to listen now here because she says to me, that they could really force the FAA's hand here by having them redo these

tests and then putting in a regulation. Listen.


SEN. TAMMY DUCKWORTH (D-IL): It is very much long overdue. The standard that the FAA is using was set in the 1960s.


And fact of the matter is Air travel has changed a lot since the 60s; there are a lot of folks on board for example with carryon luggage because many

people can't check their luggage anymore because it's additional fees. The FAA doesn't test do these tests where they include carryon luggage.


MUNTEAN: Can you hear the size of relief from passengers may want this, you know, airlines, of course would chafe at this, Julia, because they would

say that can't have more seats on a plane, it makes it more expensive could cause fares to go up. But what's so interesting here is that the FAA really

answers to Congress in a lot of ways.

And the Federal Aviation Administration gets its budget from them. And they're going through reauthorization right now. So there could be a chance

here, this could be the moment for a seat size regulation. We'll see.

CHATTERLEY: Yes, there's a size issue here. There's a money issue here. But to back to my original point, 30 pounds and one inch, there's a high weight

with thing going on there. That's a bit out of whack. Pete, great to have you with us, we shall see. I'm -- space price -- .


CHATTERLEY: OK, that's it for the show. If you've missed any of our interviews, today, there'll be on my Twitter and Instagram pages you can

search for @jchatterleycnn. And "Connect the World" is up next.