Return to Transcripts main page

First Move with Julia Chatterley

The 737 Crisis Cuts Into Boeing's Results As The Jet Remains Grounded; Rep. Gregory Meeks (D-NY) Reacts To Facebook's Mark Zuckerberg Testifying On Capitol Hill; Just Eight Days For Boris Johnson To Find A Way For Britain To Brexit On Halloween. Aired 9-10a ET

Aired October 23, 2019 - 09:00   ET

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

[09:00:56]

ZAIN ASHER, CNN INTERNATIONAL ANCHOR: Coming to you live from the New York Stock Exchange. I'm Zain Asher, in for my colleague, Julia Chatterley and

here is what you need to know.

Boeing pays the price: The 737 crisis cuts into its results as the jet remains grounded.

Ready to rumble - Facebook's Mark Zuckerberg is about to testify on Capitol Hill.

Just eight days for Boris Johnson to find a way for Britain to Brexit on Halloween.

It is Wednesday and this is FIRST MOVE.

All right, welcome to FIRST MOVE. I'm Zain Asher, so glad to have you with us. Let's begin with a check of the U.S. markets. U.S. stocks looks set

for let's see, a mostly flat open this Wednesday. Disappointing results from two trade sensitive socks. I'm talking about Caterpillar and Texas

Instruments, as well has been weighing on sentiment.

Shares of construction equipment giant, Caterpillar have staged a dramatic come by in precut back in premarket trading. They tumbled five percent

often missing earnings and revenue estimate. Shares are now on target for a higher open.

In the meantime, shares of semiconductor firm, Texas Instruments are set to fall almost eight percent after it missed sales estimates and lowered its

guidance as well. Other chip stocks set to fall in sympathy.

Today's results are new evidence that the trade war with China continues to hit major American multi-nationals.

Meantime, European stocks are mixed as E.U. leaders consider the U.K.'s request for a fresh Brexit delay. U.K. stocks are making the biggest

gains.

Let's get right now to the drivers and the latest in terms of quarterly results from Boeing. Boeing is saying that its third quarter revenue fell

by a whopping $5 billion. That's more than one-fifth. It is still hoping regulators will let its bestselling plane, the grounded 737 MAX return to

service by the end of the year. It also says the first of the new 777-X should be delivered in early 2021.

Let's bring in Clare Sebastian. She is joining us right now. So, Clare, these results may not have been overall as dismal as what some people may

have expected, but just set the scene for us in terms of how Boeing is still being financially impacted by the grounding of those 737 MAX.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Zain. This was not far of what was expected. So I think that's one of the reasons why you see the

stock coming back up in premarket today, but overall, not a very pretty set of numbers. The revenues were down, as you say 21 percent net earnings,

down by more than half.

And in particular, I want to home in on the commercial airplanes segment. That is the biggest segment of Boeing, of course, the most impacted by the

grounding of the 737 MAX. They saw a loss of $40 million in the quarter deliveries, they were down 67 percent.

So the company did return to profit - that was expected, but that was really propped up by the other segments, defense and services and things

like that. But crucially, the big question for investors, it was not so much the numbers themselves, but the timeline for bringing the 737 MAX back

into service.

Boeing is saying, as you said that they expect approval to begin in the fourth quarter of this year. That doesn't mean the planes are going to be

back flying in the fourth quarter of this year, Zain. That will take some procedures and a lot of logistics to get that back up for the airlines.

But that is something that is seen as positive by investors because they haven't pushed the timeline out beyond this year -- Zain.

ASHER: And so just putting the 737 MAX to one side, how has Boeing overall been affected by the global trade environment -- Clare?

SEBASTIAN: Yes, so this is U.S.'s biggest exporter. They are very much in the firing line. You know that the stock has been constantly buffeted by

all the headlines around that. And one particular point that the company made in this earnings release was that the 787, the Dreamliner, they are

actually planning to cut production of that plane, they say because of the trade environment. China is a big source of demand for Boeing for its wide

body jets.

So it seems that they are now looking at less demand from China for those planes and that is why they are cutting production there. So that was the

key point when it comes to trade. But of course, Boeing will continue to be vulnerable as these headlines come out.

[09:05:12]

ASHER: All right, Clare Sebastian live for us there. Thank you so much. Okay, so in the next hour so, Facebook CEO Mark Zuckerberg will be

testifying in the U.S. Congress. He is set to defend the company's controversial plans to launch its own cryptocurrency, Libra.

Brian Fung is on Capitol Hill for us. He joins us live now. So Brian, we did get the prepared remarks from Zuckerberg just walk us through what sort

of defense he is expected to give for Libra.

BRIAN FUNG, CNN TECHNOLOGY REPORTER: Yes, so first off, this is going to be a major test for Facebook as it tries to restore trust with

policymakers.

Facebook is going to face questions on everything from Libra to its impact on the housing market. Now, top lawmakers like Maxine Waters, the

Chairwoman of the House Financial Services Committee, where Zuckerberg will be testifying today has called on Facebook to halt development of Libra and

Zuckerberg is expected to tell the Committee that, you know, Facebook will not be involved in launching Libra worldwide until U.S. policymakers'

concerns have been addressed.

Now, that's not all though. You know, Facebook has faced a lot of concerns about its role in political advertising recently, and lawmakers say that

Zuckerberg should be prepared for pretty much anything.

Speaking to reporters yesterday, Congresswoman Sylvia Garcia said you've got to be prepared to answer whatever questions come. There are serious

concerns in light of the news within the last 24 hours.

Now, the news of course that she is referring to here is Facebook's announcement that the company has suspended dozens of accounts -- fake

accounts -- from Russian-linked and Iranian-linked sources that are seeking to divide Americans ahead of the 2020 election.

Now, Zuckerberg's testimony today will be the first time he is testifying before Congress since 2018. But it's the third time he has visited

Washington in just the last two months. So, all a sign that the company is taking this very, very seriously.

ASHER: Yes, so it's an uphill battle just in terms of repairing Facebook's reputation. But also, you have to look at the fact that you've got Visa,

MasterCard, PayPal all pulling out of the Libra Association as well, which certainly cripples Mark Zuckerberg going into this hearing.

FUNG: Yes, I think there are going to be big questions going forward about the viability of the association as Zuckerberg tries to make the case that

Libra is a tool to help the unbanked and developed countries gain access to banking products.

Now, there are still a number of players still involved in the Libra Association. Coinbase being a major one of them, but there are going to be

tough questions for Zuckerberg on Financial Services and other issues today.

ASHER: All right, Brian Fung live for us there on Capitol Hill. Thank you so much.

Okay, so with just eight days to go before the U.K. is due to leave the European Union, the government has put the brakes on this Brexit deal this

after Parliament -- the Parliament backed-deal -- backed the deal, rather but refused to fast track making an exit by Halloween virtually impossible.

Next move will now have to come from Brussels with European leaders deciding whether or not to grant yet another Brexit extension. Nic

Robertson joins us live now.

So Nic, really in all of this, is the only way to break the impasse simply another general election?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: There is another opportunity for the Prime Minister and the Labour Party reiterated the

offer that the leader of the party gave Boris Johnson yesterday in Parliament. Jeremy Corbyn said that he was willing to negotiate with Boris

Johnson on a different timeline because, of course, that Withdrawal Agreement Bill was put on pause because the Prime Minister was turned down

on his request to Parliament to shorten the length of time to debate it -- he is shortening it down to a couple of days.

The Labour Party has today said that they've gone back to the Conservative Party and said that they are willing to negotiate this timeframe again.

But the criticism that Boris Johnson was laying at the feet of the Leader of the Opposition today in Parliament during Prime Minister's Question Time

was that he just -- he said that the Labour Party just wants a second referendum and that they're just using delaying tactics.

The Labour Party say that is not the case. But they are saying, if the European Union does give an extension for Brexit until the end of January,

which is what Boris Johnson, the Prime Minister asked them for in the letter over the weekend, then the Labour Party would be minded, it appeared

to go for a general election. And those are the choices.

[09:10:03]

ROBERTSON: As you say, a general election, but also the possibility to make some compromises on the Prime Minister's part, continue to negotiate

the Withdrawal Agreement, but recognize he is not going to get it done by his deadline on the 31st of October and maybe have to make some fundamental

compromises in what was actually in that final agreement.

So that's where we are, essentially waiting for the European Union to respond the Ambassadors of the 27 European Union nations meeting this

afternoon in a couple of hours' time, not clear how quickly they'll respond.

Donald Tusk, the European Council President will respond to Boris Johnson with notification about the decision, but this is where the situation

remains. Boris Johnson has left it part with the E.U. at the moment.

ASHER: All right. Nic Robertson live for us there. Thank you so much.

Okay, so these are the stories making headlines around the world. Police in Britain say that 39 bodies have been found in a truck container at an

industrial park near London. A man has been arrested on suspicion of murder. Police say it may take some time to gather details about the

victims.

(BEGIN VIDEO CLIP)

PIPPA MILLS, DEPUTY CHIEF CONSTABLE, ESSEX POLICE: At this stage, we have not identified where the victims are from or their identities, and we

anticipate this could be a lengthy process.

(END VIDEO CLIP)

ASHER: All right, Scott McLean is in Essex with more details. So Scott, what more do we know specifically about the driver?

SCOTT MCLEAN, CNN CORRESPONDENT: Yes, very little about the driver at this point, Zain. Police did just let us pass the cordon for a minute or two to

get a closer look. And this is clearly a heavy industrial area. You can probably hear some of the machinery behind me and it is difficult to

imagine, even at 1:30 in the morning that a truck like the one that you see there in question here, would have raised any suspicion on its own.

Police will only say at this point that it was the ambulance service, who alerted them to this area. You can imagine the incredibly grim and frankly

horrifying scene the first responders would have encountered inside there, 39 people were killed; one of them, police believe that is a teenager.

The 25-year-old driver from Ireland -- from Northern Ireland that has been arrested. Police say that the truck they believe originated in Bulgaria,

it would have come through here from Northern Wales on Saturday, four days ago, and so that's likely that they would have come through Ireland,

through Dublin in order to get there.

I spoke with an industry expert who said that perhaps if this is indeed people smuggling or human trafficking or something to that effect, that

they may have used that route through Ireland to avoid more stringent checks between Southern England and France where authorities are using

heart rate detectors, dogs, CO2 monitors in order to detect humans who might be smuggled in amongst cargo being taken into this area.

That expert also telling me that he believes that the truck here is a refrigeration truck. Typically, those are held at minus five, minus 10

degrees Celsius, depending on what's being carried. And if that were in fact to be the case, well, then those are not ideal conditions to sustain

human life, Zain, but still a lot of questions at this point.

ASHER: So how did police at this point, Scott, even begin the process of actually trying to identify the victims?

MCLEAN: Yes, that is a great question. It's not clear what type of identification they would have on them, if anything at all. Right now, the

question of national origin is secondary to their simple identities, which they say they don't know either of them at this point, but they're

obviously working through that process.

Priti Patel, the Home Secretary here in the U.K. mentioned people smuggling, not in this particular case, but saying that immigration

authorities are working with police in this investigation to try to ascertain what exactly happened, and so perhaps that's where her mind is

going at this stage, or perhaps she knows something from police that we don't that this is, in fact, people smuggling or human trafficking or

something to that effect -- Zain.

ASHER: All right, Scott McLean in Essex for us. Thank you so much. President Trump just tweeted claiming a big success on the Turkey-Syria

border. He says that the ceasefire in Turkey's assault has held and combat has ended. He also says the Kurds are safe and ISIS prisoners have been

secured. The President says he plans to make a statement later on today.

Hong Kong's government has withdrawn the controversial Extradition Bill that led to five months of seemingly non-stop protest. The bill would have

allowed officials to extradite people arrested in Hong Kong to Mainland China for trial. Protesters said it could be used to silence political

activists. Chief Executive Kerry Lam faced intense criticism for taking so long to withdrawing that bill.

[09:15:10]

ASHER: All right, still to come here on FIRST MOVE. To call it a golden parachute would be an understatement as Softbank rides to the rescue, a

severance for WeWork's founder is raising eyebrows.

And later, the esteemed expert on China invented by President Trump's economic adviser, China reacts to Peter Navarro's alter ego coming up after

the break. You're watching FIRST MOVE.

(COMMERCIAL BREAK)

ASHER: All right, welcome back to FIRST MOVE coming to you live from the New York Stock Exchange. Shares of Softbank fell two and a half percent

after the Japanese company said it is bailing out WeWork, the troubled office space operator.

We're learning more about the agreement that will deliver a jaw dropping payoff to WeWork founder Adam Neumann recently ousted as CEO. Sherisse

Pham joins us live now. So Sherisse, Adam Neumann is going to be riding off into the sunset with about $1.7 billion. Just walk us through what the

financial package is from Softbank overall, and how much control they're going to be having over the company.

SHERISSE PHAM, CNN BUSINESS REPORTER: Yes, this is the bailout package we have all been waiting for. It's been reported for multiple weeks now.

Adam Neumann essentially getting to ride off into the sunset, like you said there with a golden parachute.

This deal includes $975 million for a cap out to buy shares that Neumann owns, $500 million for a loan, and $185 million for a consulting fee that

will be paid by Softbank, and we presume Adam Neumann will consult for Softbank there.

And this will see Adam Neumann step down from the Board. He has already stepped down as CEO after a botched attempt to take the company public. He

is now going to step down from the Board. The company is saying in an announcement that he is going to have a role as a Board observer, but he

will not have any active role and this will see Softbank take 80 percent of this troubled company -- Zain.

[09:20:18]

ASHER: And so Sherisse, what does the new CEO actually need to do specifically to turn the company around because its fortunes over the past

several months with that botched IPO has certainly been dire to say the least.

PHAM: Yes, a large part of that botched IPO is that investors took a look at the SEC filings of this company and balked at the massive valuation.

This company just earlier this year, let's not forget was valued at $47 billion. This massive injection of cash that Softbank is pumping into this

company will now value we work at about $8 billion, a person familiar with the deal told us earlier today.

Now, that is troubled times for this company, right? It means that the new CEO or the new chief which will be Marcelo Claure will really need to turn

things around and get the company on a path to profitability that will likely be leading -- that will likely mean a lot of job cuts and we're

already seeing some employees really worried about what this massive payout for Adam Neumann means.

But what's really interesting that we found in all of this, Zain, is that CEO Masayoshi Son of Softbank is almost downplaying this massive debacle

almost normalizing the behavior of this controversial CEO. He said in a statement, "It is not unusual for the world's leading technology disruptors

to experience growth challenges like the one WeWork just faced," -- Zain.

ASHER: All right, Sherisse Pham live for us there. Thank you so much. Okay, so a Brexit delay now seems likely. The E.U. Council President

Donald Tusk says he will advise European leaders to grant Britain the extension it asked for. The question now will be for how long? The answer

may well determine what unfolds next in Westminster.

A long delay could lead to a general election. A shorter one could pressure Parliament to pass the Prime Minister's Brexit deal.

Joining us live now is Liberal Democrat MP, Wera Hobhouse, her party wants to revoke Article 50. So Wera, thank you so much for being with us. I

just want to start by getting your take on the events of the past 24 hours.

Obviously, the Prime Minister had a quasi-victory some would say with the second reading yesterday, but then last on the program motion. What's your

take on those developments?

WERA HOBHOUSE, BRITISH MEMBER OF PARLIAMENT, LIBERAL DEMOCRAT: The problem we have had for months and months is that the Brexiteers amongst themselves

cannot agree what Brexit they want and that's been the difficulty since Theresa May brought back a deal from Europe over a year ago, and she

couldn't bring to get it through the House because some people wanted to leave without a deal and some people wanted to live with her deal, and some

people wanted to leave with a softer deal.

And against all of that, we as Liberal Democrats, an increasing number say, let's stay in the European Union, because actually nobody -- once it comes

to a specific Brexit proposal -- can agree of what that should be. Let's put it back to the people and let the people decide.

ASHER: All right, but in terms of the immediate next steps, with the immediate next steps, given the uncertainty and the polarization that you

mentioned, would the immediate next steps be a general election?

HOBHOUSE: Well, it looks like there's no other way out of this apart from going back to the people and I said before, it could be a referendum, it

could be a general election.

It looks like the Prime Minister is set against a second referendum. There is currently no majority in Parliament for a second referendum. So it

looks more likely that it's going to be a general election. And once the E.U. has granted an extension, most parties will probably go for that.

ASHER: So in terms of a second referendum, obviously, I mean, you've heard what the opponent has said many, many times, you can't simply call another

referendum just because you don't like the results of the first. Obviously, there were 17 million people that voted to leave the E.U. on the

23rd of June 2016, and you have to honor that.

HOBHOUSE: We have said time and time again, unless you actually put a specific proposal forward, then people don't really know what they're asked

to decide upon and that was -- I don't blame the people -- that was the mistake of the politicians who asked the question in the way that they did

it in the first place. It was very unspecific.

And after the referendum, different politicians went away and interpreted the results according to their own views and they never dared to go back to

the people and asked them specifically on a specific deal whether people actually agreed with that specific deal, or whether they'd rather stay in

the European Union.

[09:25:10]

ASHER: So just given, you know, how much polarization there has been and how much mistrust there has been, you mentioned that Brexiteers can't even

decide on which sort of Brexit they want. How much of an opening does that provide to your party, the Liberal Democrats? If there was to be a general

election, do you think?

HOBHOUSE: Well, we have done very well in the last six months in local and European elections. Our poll rating has gone up very high. Because we are

a party that is very clear of what we believe is the right thing to do. Whereas all the other parties, because they are split amongst themselves,

the two main parties -- the Labour and the Conservative -- it is different with the SNP in Scotland, but the Labour the Conservative Party, they're

just split amongst themselves and they're confusing the public of what they actually want.

And for that reason, the public is actually choosing parties that said provide some clarity, and therefore we are doing very well. We are looking

forward to an election and probably will increase our percentage and our seats in Parliament quite dramatically.

ASHER: So the Liberal Dems, you've obviously been very clear about what you want. You found your voice as the anti-Brexit Party. But when the

U.K. does eventually leave the E.U., which is likely to happen even though people aren't aware of the timeline, what happens to your party's brand

then?

HOBHOUSE: Well, we believe we should stay in the European Union is a passionate belief because it's the right thing to do and there will be

plenty of opportunities in the future to find out why we would have been much better off to stay in the European Union. Look at Scotland and the

Scottish Independence Referendum and they lost the Independence Referendum, but the SNP won a majority in Scotland after they've lost the referendum.

So often, losing a referendum doesn't mean that your appeal and what you're standing up for is losing as a proposal for the future. And I'm sure the

same thing will happen for the Lib Dems, especially because we believe, we don't just say it, we believe leaving the European Union is a massive

mistake.

It's going to lead to loss of prosperity, a loss of international security, the standing of Great Britain and the world. We just shouldn't do it. And

after we've left the European Union, all of this will become much clearer.

Currently people say, oh, that's just project fear. Let's just wait and see what happens. We are pretty sure all the things that we predict are

going to happen are going to happen, if not worse.

ASHER: All right. Wera Hobhouse there. Thank you so much for sharing your thoughts. That's it for this half of FIRST MOVE. We will be right

back after this quick break.

(COMMERCIAL BREAK)

[09:30:54]

ASHER: All right. Welcome back to FIRST MOVE, I am Zain Asher coming to you live from the New York Stock Exchange. The opening bell actually just

rang about 10 seconds ago or so, and as expected we've got a mostly flat open for U.S. stocks this Wednesday.

Investors are pouring over a brand new batch of corporate earnings. Today, we've got some high profile earnings misses from Dow components, Boeing and

Caterpillar spring to mind. Weak results from chipmaker, Texas Instruments are weighing down in the tech sector. That said, the S&P 500 is still only

about one percent or so away from record highs.

After the closing bell today, Microsoft and Tesla report their latest results. Time now -- excuse me -- for a look at the Global Movers. Shares

of Snap, let's see there, a bit higher -- a bit higher in early trading. The parent company of social media firm Snapchat is reporting a narrower

than expected loss of four cents a share. Guidance was a bit light, but it posted its strongest ever quarter of user growth.

Nike, on the other hand, shares of Nike are lower right now. The company says Mark Parker is stepping down as CEO next year. He will be staying on

with the company in the role of Executive Chairman. A former eBay CEO, John Donahoe will take over the top spot at the sportswear giant. He is

currently the CEO at cloud computing firm ServiceNow.

Boeing shares are trading higher. The troubled aerospace giant missed third quarter earnings estimates by a wide margin, but revenue came in a

bit above estimate. Boeing executives say, they still hope to get regulatory approval to fly the 737 MAX again sometime this quarter.

Emirates President Tim Clark says -- expressed his confidence in Boeing describing its approach to safety as uncompromising. However, he fears a

lack of top down engagement within the company may have contributed to the 737 MAX prices as the aircraft remains grounded. He told Julia what needs

to be done to restore confidence in the company. Take a listen.

(BEGIN VIDEOTAPE)

TIM CLARK, CEO, EMIRATES: You've got to be absolutely sure that your corporate governance of an organization such as this are really hardnosed

with regard to doing the right thing and not being sidetracked for other reasons.

This is where they must ask themselves, have we ever allowed this to compromise what we have been doing? And if that is the case, be open and

honest about and fix the problem and get back to where you should be and need to be and where the consumer base require you to be.

So I think this will be a real disruptor for Boeing. It is. I think they will reexamine themselves - that's what they should be doing. Turning

themselves inside out to make sure that everybody is on the message that was used to producing these excellent machines.

JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: At what point when you have a backlog, an order with them do you go, you know what, we can't

wait any longer? It comes down to a question of alternatives, which we all know, unfortunately, Airbus has a backlog of orders, too.

But when you've got the CEO of Boeing saying, look, if these delays continue with the MAX jets, we might have to halt production, even if it's

on a temporary basis.

You as a CEO of a business, how do you go through that process of making a decision that we have to look at alternative options here?

CLARK: Well, you can do that. But as you rightly said earlier, the reality is that the opposition, the competitor cannot meet the obligations,

the requirements rather have the airlines that had the MAX on order, because on both sides, they landed -- they had some 6,000 each of various

backlogs of order.

So for Airbus to crank up the manufacturing plant to produce the MAX cancellations is probably not going to be feasible. So in the end, what is

happening, FlyDubai has 14 MAX grounded, but we have that we've got 140 on order and that is compromised its growth.

[09:35:11]

CLARK: For instance by now, the airline should have about 65 aircraft flying -- it has 42 or 45. And over the course of this summer, it is being

severely impacted by the absence of those aircraft. It has had to extend leases, extend aircraft and all. The airline community can manage that.

CHATTERLEY: The 777-X, you've also pushed back the horizon for receiving those and that's a really lumpy order as well.

CLARK: Well, again, we are in the hands of Seattle and Chicago on this. The aircraft was due to be delivered to us in June of next year.

Personally, I do not have visibility as to when it's going to be delivered. We have an engine problem which hopefully is going to be in some sort of

resolution in the next couple of months and the aircraft will start its flight test program.

But at the same time, we had a failure of the static test of the aircraft that was being put through its real high-load situation. And I'm not quite

sure where we are on that and what the F.A.A. view is on that static test failure.

CHATTERLEY: Is Q3 conservative or optimistic for those 777-X in your mind at this moment?

CLARK: I have a sense, it will be optimistic. Q3 of 2020, I would say, my money's on this Q1, if you're going calendar, April 1st, if you're not --

it will be Q2 in the calendar. I think we might be seeing them about then.

CHATTERLEY: And the MAX jets, back up in the sky?

CLARK: I don't see much going on with regard to -- perhaps I'm being a bit disingenuous to Boeing. But it's important that the regulators get this

one sorted out. At the moment, there is a degree of polarity which means that this isn't going to get resolved.

So where are we on the MAX? My view, sometime next year.

CHATTERLEY: First half or second half?

CLARK: I would say sometime in the first quarter of next year calendar -- January, February, March; latest, April.

CHATTERLEY: They can't get this wrong. It's so central to their order book. Would you agree with that? They cannot get this wrong.

CLARK: They will get it right. Okay. What they have to manage now is as a company which is hemorrhaging cash, it must be, simply because the cash

flow for those aircraft being produced is not coming in, they're still producing, so the supply chain for the cost of the 30-odd aircraft they're

producing has got to be met and they don't have all the other problems about getting it back into service.

And so this is a hugely difficult problem for them to manage. It is the cash cow of the company on the civil aerospace side. I can't speak for

military.

But it is vital that this for them, if it does go into the first or second quarter of next year, we may be having a different conversation about it.

But here we are.

(END VIDEOTAPE)

ASHER: All right. Still to come here on FIRST MOVE. When an assist from Shaquille O'Neal isn't enough, China boycotts the NBA's opening game as a

basketball legend weighs in on the Hong Kong row.

(COMMERCIAL BREAK)

[09:41:22]

ASHER: All right. Here is today's "Boardroom Brief." SpaceX boss, Elon Musk has been testing new satellites which will bring broadband internet to

some of the most remote areas of the world sending a test tweet on the network called Starlink, and exclaiming, "Whoa, it worked" when it appeared

to work. Musk plans to deploy thousands of satellites to provide global broadband coverage.

Apple's Tim Cook is defying trade tensions with China and taking on a new role at an elite Chinese University. The Apple CEO becomes top adviser to

Tsinghua University's Business School known as China's Harvard. His appointment comes at a time of criticism and uncertainty for Apple in

China.

Meantime, an awkward political misstep by White House Trade Adviser, Peter Navarro has inflamed tensions between the U.S. and China just as the two

countries inch closer to a deal.

Beijing has lashed out at Navarro for citing a non-existent expert in his books to bolster his arguments about Beijing's threats to the U.S. economy.

In a statement to CNN, Navarro admits he made up Ron Vara, an anagram of his own name for entertainment value. Steven Jiang reports.

(BEGIN VIDEOTAPE)

STEVEN JIANG, CNN SENIOR BUREAU PRODUCER: This is a rather bizarre episode involving Peter Navarro, Mr. Trump's top trade adviser quoting a fictional

character in his books on China, reinforcing the author's notions about the danger of Chinese goods and Chinese policies.

Navarro is not a traditional China expert. He didn't study China. He doesn't speak the Chinese language. He had never visited China until he

became a Trump official. And he has always been viewed here in Beijing as a staunch anti-China figure in the White House.

So not surprisingly, the Chinese government has seized this moment to blast Mr. Navarro's credibility.

(BEGIN VIDEO CLIP)

HUA CHUNYING, CHINESE FOREIGN MINISTRY (through translator): It shows that out of personal or political hidden intentions, certain people in the U.S.

can do whatever they think of to contain and smear China without scruple.

It is absurd and extremely dangerous to make lies, spread lies and even formulate policies based on lies.

(END VIDEO CLIP)

JIANG: So the Chinese government is not only trying to discredit Mr. Navarro, but also the U.S. policies presumably influenced by him or with

direct input from him at the time when the two countries are still engaged in a trade war, even though there's a truce, a ceasefire at the moment.

But if the Chinese government's intention is to a change Mr. Trump's mind or change U.S. policies towards China, they may be in for a disappointment,

because Mr. Navarro's book struck a chord with with Mr. Trump precisely because his ideas matched with what Mr. Trump was already thinking and

dealing with China more forcefully, not only in trade, but in many other areas is one of these rare bipartisan consensus in Washington right now.

And of course, the Chinese government may be trying to score points domestically, trying to highlight the sinister nature of American officials

and politicians, their evil intentions of trying to contain the rising China, thus rallying the public around the government here and President Xi

Jinping at a time when they are facing many domestic issues as well, including a slowing economy.

Steven Jiang, CNN, Beijing.

(END VIDEOTAPE)

ASHER: All right. Meantime, basketball legend, Shaquille O'Neal and Charles Barkley have weighed in on the row between China and the NBA.

Chinese state TV refused to air the opening game of the season, Tuesday. The dispute was ignited by the Houston Rockets manager, Daryl Morey painted

in support of Hong Kong protesters. Here's what he had to say.

[09:45:07]

SHAQUILLE O'NEAL, FORMER NBA PLAYER: Daryl Morey was right, whenever you see something wrong going on anywhere in the world, you should have the

right to say that's not right, and that's what he did.

CHARLES BARKLEY, FORMER NBA PLAYER: Because of Yao Ming, the Rockets are by far and away the most popular team in China. You can't come to my

country and make money and insult me. We don't get to impress our values on other countries.

(END VIDEO CLIP)

ASHER: O'Neal and Barkley spoke on TNT television's "Inside the NBA" show. TNT is owned by At&T Time Warner, which is also CNN's parent company.

All right, we're about 15 minutes away from the start of Facebook CEO's hearing on Capitol Hill. Before that, we will speak so one of the members

of Congress who will have a chance to grill Mark Zuckerberg. Stay with us.

(COMMERCIAL BREAK)

ASHER: All right, welcome back to FIRST MOVE, I'm Zain Asher. Caterpillar shares have been on a wild ride in trading so far today. Shares fell about

five percent in premarket trading after the company missed both earnings and revenue estimates and lowered 2019 guidance as well.

Shares began the session higher, but are down again ever so slightly right now. Matt Egan joins us live now from New York. So, Matt, part of the

problem is a reduction in inventories from dealers. Just walk us through this particular earnings report.

MATT EGAN, CNN BUSINESS SENIOR WRITER: This was a pretty gloomy earnings reports, Zain, from a company that is viewed as a bellwether for the global

economy. Caterpillar is clearly getting hit by this one-two punch of global growth slowing and the trade war and that's not a big surprise

because it's the world's largest maker of construction and mining equipment.

So three really big developments from this earnings report. First, sales and profits were lower in the third quarter that wasn't supposed to happen.

They were both supposed to be about flat or even slightly higher. Caterpillar also lowered its outlook for the full year, they went from

projecting modest sales growth to a modest sales decline. That's never a good thing.

And Caterpillar also said that it is cutting production. And it opened the door to a potential restructuring as they try to keep their costs in line.

As you mentioned, a big problem is that dealers and their customers, they cut back on purchases, dealers really cut back on inventory. And the

company said that it's clear that all of this economic uncertainty is causing people to delay purchases. So that is clearly been an issue.

The CEO during the earnings call, he blamed all of this on economic uncertainty and trade tension. So Zain, this is another real concrete

example of how the trade war and the slowdown are hurting major companies. And you really can't untangle the two of them because the worst the trade

war gets, the worst the global slowdown gets.

ASHER: And just walk us through CEO, Jim Umpleby's strategy going forward then just given that global economic environment that he's in.

[09:50:01]

EGAN: Well, I think Caterpillar is going to be much more cautious. They expected in July, that there'd be a slowdown, but it was worse than they

anticipate. And what's really interesting is that they experienced trouble really all around the world.

Every single geographic segment for Caterpillar, except for Latin America, reported sales declines. And in Latin America, sales were just flat. Not

surprisingly, the biggest decline was in the Asia Pacific region, which is, of course, the epicenter for the trade war.

In that region, they experienced the double digit sales decline, and they pointed specifically to declines in China.

ASHER: All right, Matt Egan, thank you so much. Okay, so let's return now to one of our top stories. The Facebook CEO's hearing before the U.S.

Congress. We are just minutes away, about 10 minutes away in fact, from Mark Zuckerberg's testimony.

He has arrived on Capitol Hill, where he is set to defend Facebook's controversial plans for his own cryptocurrency, Libra.

So among the people who will be grilling Zuckerberg is Gregory Meeks. He is a Democrat and a senior member of the House Financial Services

Committee. He joins us live now.

Congressman, thank you so much for being with us.

REP. GREGORY MEEKS (D-NY): Good being with you.

ASHER: So given Facebook's poor reputation when it comes to handling data, when it comes to privacy, there's obviously a lot of concern about the

company launching a digital currency. Is there anything that Mark Zuckerberg can say today to calm your fears, to assuage your concerns at

this point?

MEEKS: I don't know if there's anything that he can say today. I will be listening to hear what he's saying. But it's going to be also important

for me to watch what he does when he leaves here today.

As you've indicated, he has clearly a credibility problem and a trust factor, that one -- or the lack of trust, that one is starting to develop

with reference to Facebook and what they do, what their actions will be is going to be observed.

So they are serious concerns and I think that that has been seen also by the number of companies and firm that are moving out of the Libra

situation.

And so, you know, we've got a scenario that we're looking. We don't want to hold back the future. But we're going to be very careful on how we move

forward.

And so I think that I, as a legislator, will be looking at it in a very careful manner, listening and trying to follow up. And there's been some

speculation that Facebook may want to cooperate with regulators.

So you know, when we talk about the financial services system, we are very well-regulated for the safety and security of people. Well, we've got to

look at it in this scenario also. So we'll see how serious they are.

ASHER: All right, so Congressman, you mentioned that of course, we all know that actions are more important than and we're going to be looking to

see what Facebook does after the testimony.

However, if you are not satisfied with what you hear from Mark Zuckerberg today, does that mean that your party, that the House Financial Services

Committee will move to block Libra going forward?

MEEKS: Look, we're going to look at it. As I said, we are a government of laws and rules and regulations and we regulate our financial services

industry. And by going into Libra, now you're going into financial services, which is why he is testifying before our Committee.

And so we will then have to review what we should do to make sure that those that invest in Libra are protected. You know, we have, you know,

various subcommittees, for example, Consumer Protection, Investor Protection, so we've got to make sure that people who are invested in it is

protected and not allow something that may be not trustworthy, that could cause a calamity around the globe, quite frankly.

I was involved in 2008 when we had the financial crisis here in the United States. I don't want to have any opportunities for that to reoccur with

this contagion and it can flood the market and people are damaged in a very big way.

So that is what, you know, I'll be listening for and looking for. People still from the 2008 financial services and because of some of the bots and

et cetera that has been on Facebook, people have lost money.

And so I'm going to be looking at it and figure out what rules and what regulations may be necessary to put in place to make sure that we are

securing and protecting investors and consumers.

ASHER: Congressman, just switching gears quickly to impeachment, we had Bill Taylor's bombshell testimony, the fact that he intimated that there

was a quid pro quo in terms of exchanging aid for Kiev with investigating Joe Biden.

I mean, just walk us through how consequential do you think Bill Taylor's testimony is going to be in the Impeachment Inquiry.

MEEKS: Well, I think that if you take, for example, who he is -- Bill Taylor is a patriot. He is an individual that went back into the State

Department only because he wanted to help his country. That's in his opening statement.

He was, you know, not sure of what he wanted to do, but taking the advice of a friend, if you can help your country, you do it.

[09:55:10]

MEEKS: That's who he is. That's who he is. And to listen to that testimony, and listen to him talk about this second wing of individuals who

was involved, led by Mr. Giuliani talking directly to the President, I think that you know, for me, it was absolutely shocking to hear in that

room.

And I think that as more Americans get to see and hear and listen to Mr. Taylor, and as the evidence continues to mount, you'll see the clear abuse

of power of this President. You'll see that he has violated the Constitution of America and the integrity of the Office of Presidency and

it will have -- it may play a major role in what happens next.

ASHER: All right. I know that you are about to go into the testimony -- the hearing -- with Mark Zuckerberg. Congressman Gregory Meeks in

Washington. Thank you so much.

And that is it for the show. Thank you so much for watching FIRST MOVE. I'm Zain Asher. "Connect the World" starts after this short break.

(COMMERCIAL BREAK)

[10:00:00]

END

END