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Quest Means Business

Stocks and Bitcoin Advance to Fresh All-Time Highs; South Africa to Share One Million AstraZeneca Doses via Africa Union; Texas In Deep Freeze, Millions Without Power; Fitch Projects Continued Negative Trends Downwards; Sharing COVID-19 Production Challenges; Microsoft Backs Australian Proposal For News Model On Big Tech Platforms; Arne Sorenson, Marriott CEO, Dies Aged 62. Aired 3-4p ET.

Aired February 16, 2021 - 15:00   ET


JULIA CHATTERLEY, CNN BUSINESS HOST: Stock markets are managing to close out the session at fresh all-time highs, though sentiment held in check to

some degree by another rise in bond deals today, too. As you can see, the Dow higher by some quarter of one percent.

So those are the markets and these are the main events. Stocks and crypto marching hand in hand to new records with more stimulus maybe on the way.

Rwanda's President tells us Africa could be left behind in the COVID vaccination campaign.

And there are millions of people without power in Texas after a brutal winter storm.

Live from New York, it is Tuesday, February 16th. I'm Julia Chatterley in for Richard Quest, and this is QUEST MEANS BUSINESS.

Good evening and warm welcome once again to QUEST MEANS BUSINESS. Tonight, Joe Biden takes his stimulus pitch to the people. The Dow hitting a new

record high as the White House prepares to boost vaccine supply to more than 13 million doses a week and flood the U.S. economy with nearly $2

trillion in aid.

It's a double boost for markets fueling optimism that the pandemic will end sooner and that American consumers will have plenty of cold, hard cash to


President Biden is about to embark on the first official trip of his presidency to a Town Hall event in Wisconsin hosted right here on CNN.

Ahead of the trip, White House Press Secretary Jen Psaki said Republican lawmakers should keep in mind that the stimulus plan is proving wildly

popular even among their own constituents.


JEN PSAKI, WHITE HOUSE PRESS SECRETARY: This is an opportunity as you noted to go out and have a conversation with the people of Wisconsin,

people who agree with him, people who disagree with him. But if you look at the polls they are very consistent. The vast majority of the American

people like what they see in this package and that should be an indication or should be noted by Members of Congress as they consider whether they're

going to vote for it or not.


CHATTERLEY: Phil Mattingly is in Washington for us. Great to have you with us, Phil. President Biden doesn't have to pitch the people too hard. They

want to see those stimulus checks.

I think among some of the questions he is going to be asked quite frankly is about vaccines. When are the restrictions going to end, when are we

going to be able to get back to life? What's he going to be saying tonight?

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Look, it's the biggest questions the White House has to answer. You can couple schools

into that as well, and those two things comingle with one another and I think, you pointed out at the beginning, the White House announcing today

that more than 13 million doses being delivered on a weekly basis to states. They have increased their vaccine supply almost 57 percent since

they took office, just shy of four weeks ago.

But the reality -- and Julia you know this well, is it is simply not enough given where the demand is. You talk to White House officials and they make

clear, we understand we have a massive supply problem, given how huge the demand is right now.

They believe at this point in time, they are doing a couple of things. They are putting the infrastructure in place for distribution on a wide scale,

they are centralizing it with the Federal government as opposed with the states as the Trump administration did prior to Joe Biden taking office as

President, and also, they believe they have purchased the number of doses they need to have as many doses as necessary to have single American

vaccinated by this summer.

But there are also the issues of can you actually get everybody vaccinated? What about those who are wary of getting vaccinated? And I think, part of

this goes hand in hand with that coronavirus relief package you were talking about. That proposal contains $160 billion for vaccine

distribution, for ramping up on infrastructure, also for testing and tracing.

The Biden administration making clear, and I think you will hear this from the President tonight that they believe if they want to reach their goals

which right now seem to be getting everybody vaccinated that wants to be vaccinated by end of summer, they are going to need this package, this

fiscal aid to go along with it, not just what they put in place and what they have ramped up over the course of the next several weeks.

CHATTERLEY: Yes, I couldn't agree more with you. It is all tied, getting people back into jobs, getting people vaccinated, educating people about

the need to perhaps get vaccinated, just getting the economy back on track here, Phil, very much tied.

It is also about the unity that President Biden began with speaking about attracting and talking to those people that didn't vote for the Democrats

and didn't vote for a future President Biden.

And now, here he is. How are his ratings here, his support holding up and how well is he doing in simply messaging to those people that were perhaps

skeptic about his leadership, too?


MATTINGLY: You know, it depends on who you're talking about, right? If you're talking about Republicans on Capitol Hill, not a single Republican

House or Senate has given any possibility voting for their $1.9 trillion COVID Relief Package up to this point, and that is why when you played the

sound from Jen Psaki, the White House Press Secretary, that is what you're hearing from White House officials.

When they look at polling across the country about the plan, it sits somewhere between 60 percent and 70 percent approval for kind of the broad

outlines of what this proposal would entail.

If you look at the President's current support right now, sitting somewhere between 57 percent and 62 percent, so they feel like that's what message is

supposed to be tailored towards. Not Republicans on Capitol Hill which to be frank when you talk to advisers, they more or less say we've given up on

Republicans. We are going to move this Democrats only in the House and in the Senate because they believe they will win the messaging war outside in

the country.

They believe regardless of party, people recognize that there are dual crises this administration is dealing with right now on the public health

front and on the economic front, and something needs to be done.

I think the real question right now is: can that kind of polling advantage as it stands right now, both the President himself and for this proposal,

withstand over the course of the next several weeks and months given Republicans have made very clear here in Washington, they are planning to

savage it and attack it on every level, most notably for that topline price tag of $1.9 trillion.

CHATTERLEY: I was about to say, it's the price tag. It is how much can they get across the line here? Phil, great to have you with us. Phil

Mattingly is in Washington.

Investors betting on it, too in what we're seeing now being hailed as the- everything rally. Just as rising tides lift all boats, flooding the markets with liquidity lifts most, if not all assets.

The Dow hitting fresh records. The broader S&P is up nearly 17 percent since President Joe Biden was elected on the promise of a bigger stimulus

plan. On the other side of the ledger, bond yields are rising, bond prices are falling. The 10-year Treasury note just hit its highest level in a


U.S. oil is back above $60.00 a barrel, a milestone not seen since before the pandemic. Energy prices in fact have been rising since November. Now,

extreme weather in Texas is crippling refineries and drilling sites.

And last but not least, Bitcoin surged past $50,000.00, the marker for the first time today, it has pulled back slightly, but it is still up -- get

this -- about 260 percent since November.

Some economists though are fearing the flood, massive stimulus combined with easy money from the Fed and a surge in economic activity after the

pandemic could finally unleash inflation.

Alicia Levine is the Chief Strategist and Managing Director at BNY Mellon, get the title right. Alicia, great to have you on the show. You called it

the-everything rally, and many other people including myself have adopted it because I like it.

Your appointment was actually not just about different asset classes, but even within stock sectors we are seeing all sectors, it seems rise, and

it's a broad rally including to the point I just made there, energy stocks, too.

One of the most unloved sectors. Talk us through what we're seeing.


time of day. Yes, I have called this the-everything rally particularly within equities, whether it's in the U.S. or overseas because if you look

at the S&P and the Russell 2000, so the large cap and also the small cap indices, they are both trading -- 91 percent of the constituents are

trading above their 200-day moving average.

So that means that everything is working, everything is in an uptrend and that the market is incredibly broad. There's a lot of breadth here, and I'd

like to point out the clients, when you have markets with a lot of breadth, you do not get market tops out of this. You just don't.

So whether you're fearful of price action, I'd say the returns for the next six to 12 months are likely to be very positive given where we are today.

You cannot escape the money raining from heaven, the fiscal stimulus, Wall Street expected $1 trillion in the rescue plan. We're going to get closer

to $1.9 trillion, probably $1.6 trillion or $1.7 trillion and that's trillion out of this, and that's close to nine percent of U.S. GDP. It's

hard not to grow with that.

CHATTERLEY: It is funny, the Bank of America fund manager survey today, I pulled the quote from there. They said: "The only reason to be bearish is

there is no reason to be bearish."

LEVINE: Well, that's also a bit frightening, actually.

CHATTERLEY: A hundred percent.

LEVINE: But I'd say this. I'd say, as you know, look, my two huge risks in this market. We are set up fundamentally very well. We're looking at

earnings for 2020 probably 170 -- 2021 at about 178 and we've already -- the earnings recession is over, and the earnings recession was over as of

this quarter so that is three years early, so that's great.


LEVINE: But the real risk here besides the vaccine rollout is also bond yields and spiking bond yields, and we can't have too many days of this

kind of run up in yields without the market noticing and having some indigestion over it.

So I think that is the big risk here that you get a bond market selloff because there is so much liquidity, so much buying and really, there are

very few ways to express discomfort with this market right now.

CHATTERLEY: I mean, 1.25 percent on that 10-year U.S. yield for the first time since March, and you've said to me in the past, it's not a real level

that we can say, to be blunt there, look, watch this level and then you have to worry about stocks. It is the speed upon which those bond yields

rise that will really make people nervous.

LEVINE: That's right, and so you know, you don't want to have -- you'd like to see seven to 10 basis points per month as growth looks better. But

if you're getting it per day, day after day I think there would be cause for concern.

I think the real number here is probably the 10-year at two percent, hard to find that magic number. But I'd say it's about two percent simply

because inflation expectations are moving faster than the 10-year right now, so you still have negative yields that is why everything is working.

Tech is working. Energy is working. Energy is the pain trade. Energy is what fund managers do not own because their clients don't want it, and when

energy was 2.5 percent of the S&P, there was no cost to not owning energy.

But now, it's the best performing sector with a lot of runway here with oil prices moving higher, and it will be very painful not to own energy.

You may have four spires into this sector going forward the next few months.

CHATTERLEY: The-everything rally also includes crypto assets as well and Bitcoin also fueled in recent days by the announcement that tesla was

swapping out some of the cash on its balance sheet, $1.5 billion worth and putting it into Bitcoin.

Alicia, I wanted to get your take on this because I asked Mohamed El-Erian this week what he thought of whether more companies would look to perhaps

take cash short-term assets like bonds that are sitting on their balance sheets and swap them out for digital assets like Bitcoin and this is what

he had to say.


MOHAMED EL-ERIAN, PRESIDENT, QUEENS' COLLEGE, CAMBRIDGE UNIVERSITY: I think you'll see more companies do that, and it's because they don't know

how else to mitigate risk. So it's part of the distortions of the financial markets.


CHATTERLEY: Alicia, what do you make of that? They don't know how else to mitigate the risks of assets like cash that are not giving them any return

on their balance sheet and putting them to work elsewhere? What do you mean by that?

LEVINE: Yes, so look, I think there is no question that you'll hear from many more corporates who are interested in converting some of their liquid

assets into crypto simply because there is a way to hedge against all the liquidity coming from global central banks led by the Federal Reserve here

in the U.S.

I think you'll be hearing much more of it. It's very hard when you realize that the Fed -- the Fed's policy here is strategic patience.

So given the level of growth we think we have going forward, you wouldn't see a Fed so patient in the past. We're in a new regime, and that means

corporates want to do something with their cash because the cash is earning nothing and will earn nothing for quite a while. That's why crypto is so

interesting, and so we think that the Tesla announcement is just the beginning.

CHATTERLEY: Pandemic patience is infinite, and there's going to be all sorts of consequences.


CHATTERLEY: Alicia Levine, great to chat with you as always. Chief Strategist and Managing Director at BNY Mellon. Got it right the second

time. Thank you.

President Biden's Town Hall moderated by our Anderson Cooper begins at 9:00 p.m. Eastern Time, which is Wednesday morning in Europe and Asia.

We'll also replay the event at times that might be more convenient for you right here on CNN, too.

Now, coming up after this, African officials say the global vaccine race is leaving the continent behind. Now, the continent's C.D.C. Chief and the

President of Rwanda sits down with QUEST MEANS BUSINESS. Those interviews coming up next. Stay with us.



CHATTERLEY: South African officials say they plan to share one million doses of the Oxford-AstraZeneca vaccine with other countries on the

continent. Until eight days ago, those vaccines were to be the main component of South Africa's initial vaccination campaign.

South Africa paused that vaccine rollout citing siting concerns about the level of protection it offers against the country's dominant variant.

Richard Quest has been speaking to the head of Africa's Center for Disease Control, and he joins us now from home here in New York. Richard, great to

have you join us on your own show. I think we should first just make it clear why, of course, because you're in quarantine now and that's the price

you pay for traveling around the world and telling your brilliant stories.

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: You're kind. You're too kind. And thank you for keeping the seat beautifully warm whilst

I am in quarantine. I'm at home because I returned this week from Africa.

I was in Rwanda, came back via Ethiopia and Frankfurt in Germany and that requires me to being quarantined in New York with a test and release coming


But the reason I'm here today is well, Africa needs vaccines. The number of vaccines that have been given by the international agency, COVAX, along

with donations from China or Russia are frankly pathetically small compared to the number that the continent needs.

And I discussed this with the head of the African C.D.C. who joined me this morning, and I pointed to him that at the end of the day, they were dealing

a 100,000 here, couple of hundred thousand there, and what they really needed for Africa was millions.


JOHN NKENGASONG, DIRECTOR, AFRICA CENTRES FOR DISEASE CONTROL AND PREVENTION: Our target is to get to 60 percent in two years, but we've

also set a self-target that requires that we immunize up to about 35 percent to 40 percent of our population in 2021 if we have a chance to be

ahead of the pandemic.

QUEST: So what do you need? COVAX is obviously the principal vehicle through which South Africa is getting their vaccines. What more do you


NKENGASONG: Remember that COVAX is going to supply us with at least 25 percent of the vaccines that we need. We have also as a continent

established what we call the African Vaccine Acquisition Task Team which we are striving to get supplementary doses of vaccines and we have secured

close to about 500 million doses of vaccines.

As I indicated, in the next week or so, we will start the distribution. Let's say if we add the efforts from COVAX and those from the African Union

Initiative, I think that will make us begin to make some very good progress.


QUEST: And we talk about the South African variant now, which is worrying because it seems to be -- the vaccine seem to be less effective. Is the

South African variant the one that you're expecting to be the predominant variant in Africa?

NKENGASONG: The simple answer is we don't know. What we know is what we have documented, which is that the variant that was initially described in

South Africa.

We also now know that the variants from the so-called, the U.K. variant has also been identified in some parts of Africa. Now, we really don't know the

dynamics of how these variants will evolve over time in terms of will there be new variants? We just don't know.

In terms of, will this variant overtake the pandemic in other African countries, we just don't know, but what we've done in the spirit of

providing guidance to other countries is to say that if the variant in South Africa is predominant then the AstraZeneca vaccine should not be

applied. It should be used elsewhere on the continent.

But we remain confident that the AstraZeneca vaccine will play a major role in our vaccination nation program across the continent.

QUEST: The number one problem seems to be a worsening bipolar world, the haves and have-nots is going to get worse.

As Europe and the developed world and the U.S. all reach some form of immunity and life gets something back to normal, Africa to no fault of its

own is going to be hamstrung for some years.

NKENGASONG: That is absolutely one of our greatest concerns that the vaccine situation will continue to exacerbate the gap, the inequality gap

that exists in the world especially the north-south divide.

And my greatest fear also is that once the U.S. and Europe gets their vaccines, they'll begin to impose the need to have a vaccine certificate to

travel, and that will become extremely complicated for Africans to travel across the world, and I think that is why we should as a collective of the

continent and of course, in partnership with the developed world make sure that Africa has timely access to vaccines to make these vaccination



QUEST: Now, the Doctor, Julia, is obviously very concerned at the level of vaccines, but also the question of the variant, and we are going to -- I

mean let me put it bluntly. We are going to end up in a world where those of us in the wealthy northern hemisphere, Europe, U.S., O.E.C.D. will have

been vaccinated and life will return to normal, and elsewhere in the world, the have-nots will still be suffering. It will be a reality.

CHATTERLEY: And it's heart breaking. You know, I spoke to the International Chamber of Commerce recently, and they said it's going to

cost the global economy over $9 trillion.

Vaccine nationalism will cost that much and actually half that cost will be borne by developed nations. So everyone has an incentive to do more here to


But what does it mean -- because you said, you were in Rwanda and I know you spoke to the President there, what is it going to mean? Because they

handled the initial phases of COVID incredibly well here. What's it going to mean for them in vaccinating their citizens?

QUEST: They're getting on with it. They haven't got enough vaccine. They are very annoyed that they are on the British red list, a late addition to

the British red list in terms of their people going up to London.

But for President Paul Kagame, his priority is to get vaccinated because as you'll hear him admit now, he is open about the fact that you can see there

on the charts how the number of cases have come down quite dramatically because of a brisk, brutal lockdown they've had, and yet he knows the

economy is still suffering.


PAUL KAGAME, RWANDAN PRESIDENT: We see the rest of the world vaccinated. We haven't. We haven't had so many, if at all, in Africa. So that means

we're still far behind on the queue and as I can see it, some people are not on the queue at all.

So, we are on the queue. We are waiting. So we will take any vaccines that come that we are told actually works. So whether it is Pfizer, it is

Moderna, we want to have any of those as fast as we can.

QUEST: There is a real risk that Africa becomes the have-nots in a world of have and have-notes in vaccinations, as the developed economies: Europe,

the United States, et cetera, et cetera move forward, Africa lags seriously behind and that will only exacerbate a poverty situation. Do you think so?


KAGAME: I think so. I think so and it is not going to be there fast. We have seen most of the things that happened in the last like 20 or so years

why Africa is lagging behind the rest of the world because of what Africa seems to be.

And in that part of the world we live in that still has a lot of poverty, still is not considered as an integral part of the global economy the way

it should be and has a problem of equity and so on and so forth, so Africa has that problem and we need to work at it and make things better.

QUEST: On the economic front, COVID has the danger of putting the countries' economic progress back many years. Not just here. I mean, I can

choose many country in the world. But here how concerned are you about that?

KAGAME: We're very much concerned. We're already being affected. We can see it. And where there have been -- we are now into the third lockdown

we've had in the last one year and we see the businesses going down.

We see the growth that we had been used to in our country in 2019, our economy grew 9.2 percent. We expect to do better in 2020, then 2021 also

even better, but that has all gone down. We are around zero or one or two percent.

So we are definitely -- we are already witnessing the consequences of that and we are struggling with it. We are trying to do the best we can here,

what we can do and work with the rest of the world. We have had access to financing to deal with some -- fill some of the gaps that exists. So it's

going to be a hard struggle, but nonetheless we have to be prepared for it.


QUEST: Paul Kagame is ready for what comes along and of course he is still got to decide if he is going to stand for re-election in two years.

You'll hear that side of Kagame, the political side and of course some of the controversies about the Rwandan President and dissent in the country.

We will have that for you tomorrow and later in the week, Julia.

So there's more from my exclusive interview with President Kagame coming up.

By the way, I thought this might -- a little something. I've got plenty of coffee that I brought back, a little something for you. You can take your

pick of which you'd like. A little gift for you from -- that's better -- from Rwanda.

CHATTERLEY: You are so generous. I love the one in your right hand in particular. That's got my name all over it, please.

Richard, you're so kind. And now you've promised so you have to fulfill your promise.

QUEST: Clearly.

CHATTERLEY: Thank you, Richard. Great to have you with us and welcome back.

QUEST: Thank you.

CHATTERLEY: All right, surging demand and restricted supplies of oil pushing prices to highs not seen since January of 2020. We'll look at the

impact of the severe winter storm in the United States, too, just ahead. Stay with us.



CHATTERLEY: Hello, I'm Julia Chatterley. There's more QUEST MEANS BUSINESS in a moment when we'll be live in Texas where rolling black outs have left

thousands without power after a once-in-a-century deep freeze.

And we pay tribute to an icon of the hospitality industry after the death of Marriott CEO, Arne Sorenson.

But before that, these are the headlines on CNN this hour.

Former President Trump and attorney Rudy Giuliani are facing a new lawsuit related to the insurrection of the Capitol. It accuses them of conspiring

with far right groups to incite the January 6th attack.

The civil war suit filed by a Democratic congressman cites a post-Civil War law designed to combat violence by the KKK.

Dr. Anthony Fauci says it could be mid- to late May or early June before vaccines are available to the general population in the United States.

Dr. Fauci tells CNN the timeline is a little later than previous estimates that targeted the end of April.

He says based on that timeline it would be the end of the summer or fall before a large portion of the population is vaccinated.

Some dramatic pictures from Sicily now where Mount Etna has erupted. Local authorities say it began to spew lava and ash a few hours ago. There's no

word of any casualties or property damage.

The Catania airport has been temporarily closed due to the ash cloud.

The U.N. says it's looking into a report that the daughter of Dubai's ruler is being held captive. A BBC documentary is airing what it calls secretly

recorded videos filmed by Princess Latifa. She says she's being held hostage in a "villa converted into a jail," quote, with no access to

medical care. CNN hasn't independently ratified (ph) the videos.

A severe winter storm has plunged the United States state of Texas into a deep freeze and paralyzed much of its energy industry.

Millions of people there are without power. Some of the outages are the results of rolling black outs as utility companies try to keep up with

surging demand.

The extreme weather has caused a spike in oil prices too, with West Texas and Brent Crude both trading around 13 month highs.

Ed Lavandera is in Dallas, Texas, a city shivering in frigid temperatures not seen in decades. Ed, great to have you with us. I hope you're keeping


Just explain what you're seeing there and just how infrequent this kind of weather is.

ED LAVANDERA, CNN U.S. NATIONAL CORRESPONDENT: Well, it's not only infrequent, that's to be expected -- we're used to the heat here in Texas.

But the bottom line is that this is really an unmitigated disaster as the energy production in this state has been hampered, officials say, by this

cold weather blast that has gone through the state and caused about 4 million people to be without power here just in the state of Texas alone.

So there is a great deal of concern of just the toll this is taking on millions of people across this state.

This is one of the power substations. From here, electricity comes in and it's distributed into neighborhoods.

Around this particular substation, services about 17,000 people, and according to the local agency that distributes that power, there's about

1,500 people in this neighborhood, they get their power from this substation, who are without power at this point.


And you're seeing this over and over in situations like this all over the state. But Julia, this is also an extremely deadly situation.

There were three -- Houston police reported this morning that a family of four were found suffering from carbon monoxide poisoning. They had been

resting in their car trying to stay warm because their house was so cold. Police say a mother and a young child were found dead in that car.

So this is the kind of concern that state officials have right here. And there is a great deal of finger pointing and anger and frustration going on

with the state electrical grid that runs here in the state.

And the fall out from this politically will last weeks if not months here in this state.

CHATTERLEY: That's a heart-breaking story and, of course, on top of that COVID complicates everything, every emergency here. How are the emergency

services coping with this? That's clearly a tragic case of lives lost.

LAVANDERA: Well, if you look at all of the major cities in Texas, there had been a schedule in a lot of the vaccine distribution facilities that

were administering the vaccine -- have had to postpone and delay the appointments that people were making for their vaccine appointments.

And depending on where you are and just how bad the weather is, there's another weather system expected to come through Texas tomorrow. And that is

delaying for several days the distribution of that vaccine system.

And in Houston, actually there's a situation where it came dangerously close perhaps to losing about 8,000 vaccines.

Officials there, health officials in the Houston area, had to redistribute most of those vaccines quickly to hospitals and universities so they could

be used and then some of them had to be refrozen. Moderna said that that could be done.

So it kind of just captures the scramble some health officials were under during this storm to try to salvage these vaccines and keep them from being

spoiled or lost.

CHATTERLEY: Yes, Ed. What a challenge. Thank you for being there, and stay safe and stay warm, please.

All right, let's move on. An update now on the markets.

The Dow edging up slightly today, set to close this session at all-time highs. Investors, it seems, riding a wave of confidence about the prospect

of more stimulus for the U.S. economy.

We've also mentioned it on the show already, Bitcoin making a new record high earlier today too. Rising above that $50,000 mark for the first time

before pairing some gains throughout the session.

Lots to discuss. Paul Taylor is President and CEO of Fitch Group. And he joins us from London. Paul, fantastic to have you with us.

Ratings are a way that we make a relative judgment over the riskiness of bonds that are issued by both companies, also by nation states. How much of

a challenge is that in this pandemic era when you've got interest rates so low and you've got nation states spending like money to support their


PAUL TAYLOR, PRESIDENT & CEO, FITCH GROUP: So it's certainly challenging, no question about that. Ratings are supposed to look at normal economic

cycles and we're clearly not in a normal economic cycle, we're in a tail risk event.

When the crisis really went from being a local nation crisis to more global back in March of last year we took a quick look at our portfolio and really

took a positioning -- position that tried to look at what we think might happen over the coming couple of years. So we didn't want a knee-jerk

reaction to the crisis that hit so quickly.

So we ended up putting quite lot of the portfolio on negative outlook so we didn't actually change the rating, we put it on negative outlook and

positioned it to be able to see what happened over the coming period of time.

And looking back on that, ten months hence, we're feeling pretty good about what we actually did.

CHATTERLEY: And you didn't take action to actually adjust those ratings, you just said, look, we're cautious now. Because what are you saying -- the

hope now is that with the recovery that we're seeing you can then take those sort of warnings and the watches off some of these corporates and

nation states and we can move on?

TAYLOR: Yes. Well, not quite as straightforward as that. So we did take actually unprecedented negative rating actions but we didn't take as many

downward moves as people perhaps expected us to do given the extent of the crisis.

So we positioned our portfolio where we took immediate action on those credits that were clearly affected and where longer term trends were

accelerated by the events that had been going on.

We still have a large proportion of our portfolio sitting with a negative outlook which is maybe counter to where market signals are telling us in

terms of things passing.


So we did take a lot of negative actions, far fewer than maybe was expected, but really repositioned the portfolio to continue to have a

negative trend downwards, we think, over the coming period of time.

So we still think there's a lot of negative news out there, notwithstanding the huge amount of stimulus which is keeping things afloat at the moment.

CHATTERLEY: And which sectors worry you most?

TAYLOR: Well, the obvious ones. I think it won't come as any surprise to talk about leisure, retail, certain areas of commercial property, oil and

gas sector's been hit by a lot of these developing ESG stories. So none of this comes as a big surprise.

And on top of all of that, of course, is the situation with sovereign credits where we moved more sovereign credits down last year than we've

ever done before because of the burgeoning debt levels that we're seeing globally.

CHATTERLEY: And what worries you most? Is it developed markets and the ramp up in spending that we've seen there or is it emerging markets that

are also trying to recover their economies? And as we've been discussing on the show likely to get vaccines much later --


CHATTERLEY: -- than nations like the U.K., Europe and the United States?

TAYLOR: Well, certainly vaccinations are a big part of this story and how quickly economies can recover from the problems that we've seen over the

past 10 or 12 months.

We shouldn't also lose sight of the -- there was pressure on sovereign credit ratings before we hit this pandemic so things had been drifting down

for some time because governments have been piling on debt for quite some time. The U.S. is an obvious example of that.

And the crisis we're going through, we're still very much going through this crisis, has exacerbated the problems that we were seeing developing.

So debt levels are extremely high.

They've been helped enormously by the level of interest rates so debt affordability is fine at the moment which, why again, we delayed action.

What happens -- the outcome of the various stimulus packages that are being talked about, whether that does lead to more economic growth or just more

debt on top of the existing high levels is to be seen. And that's clearly the big debate in the coming few years.

CHATTERLEY: So we will continue to debate it. Paul, great to get your insights today. Paul Taylor, President and CEO of credit rating agency,

Fitch Group.

And as Paul was saying there, vaccinating people against COVID-19 key to the economic recovery. But it could take years to make enough doses for

everyone. Anna Stewart looks at some of the production challenges.


ANNA STEWART, CNN CORRESPONDENT: This lab is making lipid nano-particles. The genetic code in MRNA vaccines are transported into human cells by these

little, fatty bubbles. Around a thousandth of the width of a single hair, they're incredibly small, critical to the COVID-19 vaccine rollout and

there aren't nearly enough.

Acuitas Therapeutics is one of the biotech firms making the lipid component in the Pfizer BioNTech vaccine. They're also supporting CureVac and

Imperial College London who have vaccine candidates in the pipeline but they can't make enough by themselves.

TOM MADDEN, PRESIDENT & CEO, ACUITAS THERAPEUTICS: We don't try and do it all ourselves. We try to enable others around the globe to be able to

contribute to this effort.

Whenever we reach out to other companies to ask them whether they could support manufacturing of the lipid components, for example, as soon as they

hear it's to support a COVID-19 vaccine, they're completely engaged.

STEWART: Powerful alliances are being forged in the private sector. There are calls, though, for more cooperation at government level.

PRASHANT YADAV, SENIOR FELLOW, CENTER FOR GLOBAL DEVELOPMENT: Now we are facing a situation overall capacity whether it's for the first steps of

manufacturing or whether it's for fill and finish, they are scarce.

And, as a result, we need public agencies -- so governments nationally or regionally -- they have to come together and ask a question if I have

scarce capacity for something, how do I ensure that it remains coordinated between multiple vaccine manufacturers?

STEWART: Green Light Biosciences, a biotech firm in Boston, has delayed the development of their MRNA vaccine candidate so they can tailor it to

the newer variants of coronavirus. It'll also allow them more time to increase capacity.

ANDREY ZARUR, CEO, GREENLIGHT BIOSCIENCES: GreenLight has been looking for multiple facilities. We are in conversations with multiple regional

partners in South Asia, Southeast Asia, Africa, North America, South America, to implement those facilities.

Those facilities will take roughly six to nine months to construct and then they need to be validated by local regulatory which adds anywhere between a

month and three months or whatever. But once each one of those facilities is up and running, they will be able to produce billions of doses of COVID-

19 vaccine locally.


STEWART: If you see other vaccine makers fail to make a vaccine, fall out of the vaccine race, are you looking to buy up their facilities as well to

ensure that you can make as much as possible?

ZARUR: We're looking for a GMP facility, we're looking for local partners. So that's my wanted ad on CNN. Can we please -- if you have spare capacity

or you want to participate in getting local production up and running, please give us a call.

STEWART: Vaccine factories and lipid nano-particles are just some of the bottlenecks to vaccinating the world. There will be more.

Not least is new variants of coronavirus require modifying vaccine. And perhaps for years to come.

STEWART (Voice Over): Anna Stewart, CNN, London.


CHATTERLEY: Anna Stewart there. Australia's fight with big tech over the use of news content has also found a big tech backer.

Why Microsoft is siding with Australia on this regulatory move.

That's next.



Australia wants to make Google and Facebook pay news companies for their content. Both tech companies are opposed to a draft law under consideration


Microsoft, however, is backing the proposal and thinks other countries should follow Australia's example.

I spoke with Microsoft president, Brad Smith, earlier and he says paying for journalism is key to healthy democracies.

BRAD SMITH, PRESIDENT, MICROSOFT: You cannot have a healthy democracy without healthy journalism, and we all depend on having a healthy

democracy. That means we all depend on having healthy journalism.

And so we saw this Australian proposal as an opportunity to step in and stand up for what we think is not just good business for Microsoft but

really a good cause for Australia and the world.

CHATTERLEY: There were two things here, Brad, when you're looking -- and we'll keep it specific to the Australian situation. There is people just

simply going online and searching for news and then there's where these social media platforms actually get the news from. And to your point they

effectively borrow the news from local news outlets.

They attract all the advertising money, these big platforms and it leaves the smaller guys out in the cold.


Talk to me about the model that --

SMITH: And that's why we've seen --

CHATTERLEY: Go -- no, please.

SMITH: I was going to say that's why we've seen sort of the spread of this notion of news deserts --


SMITH: -- where local communities are literally losing their local newspaper. So we have to find some way I think to build a better model to

support them.

And that's what Australian Prime Minister Scott Morrison has done.

His legislation would require that services like Google and Facebook or Microsoft with Bing if we can grow it to a certain size would compensate

independent journalists, newspapers, for the benefits derived from having their news content on these sites. And it would back this with an

arbitration mechanism.

So it struck us as actually a big step in the right direction.

CHATTERLEY: Very quickly, while I've got you. It would be highly remiss of me to have the president of Microsoft on the show and not ask him his views

of bitcoin on the balance sheet in light of what Tesla has decided to do.

And so is this having an impact on your board? Are you potentially discussing crypto diversification, Brad -- she says with a smile.

SMITH: Well, I haven't heard any new conversation about bitcoin. But let me just say if we change our investment policy on bitcoin, Julia, you'll be

the first --


SMITH: -- well, at least the second to know.

CHATTERLEY: You being the first. Thank you.

SMITH: I'll let you know right away.

CHATTERLEY: I'm going to hold you to that. Something tells me I could be waiting a while.

All right, tributes around the world are pouring in for Arne Sorenson. The much loved CEO of Marriott died on Monday after a nearly two-year battle

with cancer.

We remember his life and legacy next.



CHATTERLEY: The hotel industry is mourning one of its most beloved leaders. Arne Sorenson who turned Marriott International into the world's

largest hotel chain died on Monday after a nearly two-year battle with pancreatic cancer. He was just 62 years old.

Sorenson was Marriott's third CEO and the first person to lead the company outside the founding family.

Before taking over in 2012 he shared his vision for Marriott with Richard.



ARNE SORENSON, CEO ELECT, MARRIOTT INTERNATIONAL: What we see as the future of the core Marriott full service hotel is a place that obviously

provides a great night sleep and it provides a comfortable room but it also provides public space which can welcome people and which can invite them to

re-inhabit the lobby.

Customers are saying it's no longer enough for me to have a great nights sleep in a big room and in a clean room. I want my senses excited in some



CHATTERLEY: Over the next several years, Sorenson dramatically expanded Marriott's reach and ramped up its sustainability efforts too.

In 2016, he oversaw a $12 billion merger which Starboard Hotels & Resorts which includes the Western and St. Regis.

That year he told Richard leadership doesn't come from the top down.


SORENSON: What I think we've learned, particularly over the last decade or so, is you've got to empower your people.

You can't make these decisions from the center, you can't be trying to control all the levers yourself, whether it's me as CEO or my predecessor,

Bill Marriott, as CEO or even a corporate leadership team.

You've got to basically to say to the general manager you're responsible for creating the community of associates who are proud about their work,

who because they're proud about their work are going to deliver great experiences to their guests. And those guests are going to say, you know

what, I love coming to this place.

CHATTERLEY: Tributes have been pouring in for Sorenson. The Nasdaq put up a special banner honoring him, too.

The president of the Human Rights Campaign and the CEOs of Airbnb and Microsoft all tweeted messages of support.

In a statement, Marriott's executive chairman said Sorenson was, quote, "an exceptional executive but more that, he was an exceptional human being. We

will miss Arne deeply."

CHATTERLEY: And of course our thoughts are with his family and friends at this difficult time.


CHATTERLEY: Welcome back to QUEST MEANS BUSINESS. With just moments left of trading on Wall Street and the Dow is on track for a record high.

Investors optimistic about the odds of a recovery with U.S. boosting vaccine supplies to the states and, of course, President Joe Biden pushing

ahead on his stimulus plan.

A quick look at the Dow component. Salesforce heading the pack up more than 3 percent. A strong day for banks. They, of course, make more minute when

bond yields rise. JP Morgan, Goldman Sachs and American Express all trading higher. Walgreens down by more than two percent.

That's QUEST MEANS BUSINESS. I'm Julia Chatterley in New York.

THE LEAD with Jake Tapper is next.