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First Move with Julia Chatterley
President Trump Says He'd Love To Attend His Own Impeachment Trial; Chief Justice John Roberts Tells Impeachment Teams On Both Sides Of The Aisle To Remember Where They Are; Saudi Arabia Denies It Hacked Jeff Bezos' Phone After Reports Leaked It All To The Crown Prince. Aired 9-10a ET
Aired January 22, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
ZAIN ASHER, CNN INTERNATIONAL HOST: Live from New York, I'm Zain Asher, and here is what you need to know.
Front row seats. President Trump says he'd love to attend his own impeachment trial.
And a supreme scolding. Chief Justice John Roberts tells impeachment teams on both sides of the aisle to remember where they are.
And Saudi Arabia denies it hacked Jeff Bezos's phone after reports leaked it all to the Crown Prince.
It is Wednesday. And this is FIRST MOVE.
All right, welcome to FIRST MOVE coming to you live from here in New York and also the World Economic Forum in Davos, Switzerland, where we have
Julia Chatterley. We will be going to her in just a moment, but first let's look at the global markets for you.
U.S. stocks are on track for suddenly higher open after falling from record highs in a previous session, the S&P 500 and the NASDAQ are set to bounce
back into record territory in early trading today. You see the Dow futures up there, 71 points.
Stocks actually fell across the globe on Tuesday amid fears about the spread of the coronavirus in Asia. Airline stocks were actually very hard
hit by all of that.
But Asian stocks, let's see here, bounced back in today's sessions. Hong Kong stocks were the biggest gainers wiping out much of Tuesday's losses.
In the meantime, stocks are trading was lower in Europe.
President Trump said that during his trip to Davos that he is ready to slap tariffs, auto tariffs specifically on European carmakers, if he is unable
to reach a trade agreement with the E.U.
Investors are also focused on earnings. Shares of Netflix and IBM are higher in premarket trading after reporting their latest results. We'll
have more on all of that; specifically, Netflix later on in the show.
But first, let's get right to the drivers and the latest on Davos. President Trump is on his way back to Washington right now after attending
the World Economic Forum in Davos, Switzerland.
He held a series of meetings with world leaders, including Iraq's President today, and just before his departure, just before leaving, the President
held a press conference slamming the impeachment trial against him. He even suggested he might turn up for the hearings in the Senate, at the same
time, rubbishing the proceedings as well. I want you to listen to this.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I'd sort of love to sit right in the front row, and stare at their corrupt faces. I'd love to do
it.
QUESTION: So why not --
TRUMP: I don't know. Don't keep talking because I may -- you may convince me to do it.
And I think the other side has so lied. I watched the lies from Adam Schiff. He'll stand -- he'll look at the microphone and he'll talk like
he's so aggrieved.
These two guys, these major sleaze bags, they're very dishonest people. Very, very dishonest people.
(END VIDEO CLIP)
ASHER: So as expected there, the U.S. President admonishing the impeachment trial against him. Julia Chatterley is in Davos with the
latest, so Julia, just in terms of the economic headlines to come out of that speech, he said the E.U. is actually harder to do business with than
China and he dangled the threat of tariffs, yet again, just walk us through that.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Perhaps even more stubborn, is actually the word he was looking for, Zain. You and I can
debate that at a different time, but there really is a tale of two halves, I think, if you look at the two days that the U.S. President spent here at
the World Economic Forum in Davos.
Yesterday, we had the undercurrents of course of what was going on back home with the impeachment trial, but it did feel like the President was
messaging to the domestic audience about the U.S. economy.
Then take a look at what he was doing today. He met with the Iraqi President, of course. He also threatened them potentially, didn't take
potential tariffs off the table from the Iraqis in light of what we saw over the last few weeks and the threat that they perhaps could push for
U.S. troops to leave more quickly than planned.
Europe of course is a separate issue, fresh from signing that NAFTA mark two and of course the Phase 1 trade deal with China, no real surprise here,
I think that he decides to turn his attention back to Europe and start threatening and positioning ahead of the broader battle with the E.U. here.
You know, we're talking about a number of different nations, not just one. So there's whole different viewpoints to come into play, not an easy
position to negotiate with all against quite frankly, as far as the U.S. President.
But, you know, I think the underlying current here and I think the talk after his leaving Davos is about the U.S. economy and about the relative
strength, so I was on a panel earlier today with Joe Kaeser, the Siemens boss, and he said, look, you know, he was speaking with the U.S. President
last night.
And again, you can only commend him for the strength of the U.S. economy and the kind of growth and conditions that actually most other countries
around the world would boast.
So yes, we can talk about other things like sustainability, about climate change, and again, you can disagree with the person here in the U.S.
President. But when you look at the economic backdrop here, the President does have a hand of cars.
So perhaps, no surprise that he has decided to focus on that, even if he did suggest he might surprise us all and turn up at his own impeachment
trial. I don't think anyone is envious of the situation he finds himself in, deserved or not.
He came, he saw, he spoke and now he has left and he goes back to bigger battles, I think in D.C. -- Zain.
[09:05:18]
ASHER: Yes, certainly touting his economic achievements. Julia Chatterley, live for us there. Thank you so much.
All right, the impeachment trial on President Trump resumes in just a few hours from now. Arguments to set the rules of the trial went well into the
night, Tuesday, with Republicans blocking Democratic amendments.
I want to bring in Lauren Fox who joins us live now. So Lauren, Representative Jarred Nadler actually said something very interesting. He
said the President is on trial in the Senate, but the Senate is on trial with the American people. Just given the level of distrust, division,
partisanship, what does a full and fair impeachment trial here actually look like?
LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER: Well, Zain, yesterday you saw the House Managers, the Democrats making this case that
the President needs to be impeached. The case you saw them making essentially was, look, Senate you have an opportunity here to get more
information, to get more documents, to get more witnesses. You have an opportunity to show the American people what they need to know, and you
should take it.
Now remember, yesterday was all about debating the rules that will govern this trial, and Democrats offered 11 amendments to change the rules, to get
more witnesses, to get more documents from the Office of Management and Budget and the State Department as well as the White House.
And what they saw every time was Republicans blocking their changes. So the case that they were making yesterday was really to those four Republican
moderate senators that they are trying to win over, so when the vote on witnesses comes at the end of the presentations of evidence from both
sides, and at the end of senators questions, perhaps they'll be able to convince some of the Republicans to vote with them.
They know that the outcome of this trial isn't going to remove the President from office. The votes aren't there. So the case that they're
really making, that case you've seen them make on the floor has been one in which they are trying to pressure those four Republican moderates to get on
board with finally approving witnesses like John Bolton, and like Mick Mulvaney, the President's Acting Chief of Staff -- Zain.
ASHER: So Lauren, if there ends up being no witnesses called, no House evidence used, and everyone basically knows that the President is likely
going to be acquitted in all of this, how invested is the average American in the outcome of this trial, given that it does seem to be to some degree
predetermined?
FOX: Well, I think that most Americans watching at home probably weren't tuned in for the entire marathon that we saw yesterday.
Remember, they gaveled in at 1:00 p.m. yesterday afternoon. They didn't leave the chamber until 2:00 a.m. in the morning. Of course, there were a
couple of breaks in there for dinner and using the restroom from some of those senators where actually got to get up out of their seats.
But remember that they were really stuck on the floor for 12-plus hours yesterday. So I think for the average American who is watching back home,
they're tuning in and out of this trial, and I'll tell you that senators started to fade by the end of the night.
You know, some senators were just falling asleep on the Senate floor. You had others who really gave up that no talking rule, and we're moving to the
back corners of the chamber to have quiet conversations with their colleagues. You saw people passing notes.
I think, you know, the American people may not be that invested in every moment of this trial, and I'll tell you, the senators are really trying to
pay attention, but it's very difficult when you are in that chamber for 12 hours, listening to a case that has really been in the public discourse
over the last four months -- Zain.
ASHER: And just in terms of what we're expecting today, it's set to kick off again in about three and a half to four hours from now or so. We're set
to hear Democrats' opening arguments. Just walk us through what the next 12 hours hold?
FOX: Well, there is a deadline at 9:00 a.m. this morning, so just a few minutes ago for both sides to file any new motions that they want as part
of today and Saturday's opening arguments on each side respectively.
You also have another deadline at 11:00 a.m. where each side can respond to the other ones' motions. Expect that to come at 11:00 a.m. and then at one
o'clock, they gavel in again for opening arguments from the House Managers, the Democrats who will make the case that it's time for the President to be
removed from office -- Zain.
ASHER: And Lauren just -- I've just been told that we have run out of time, so I'll save that question for another time. Lauren Fox, live for us
there. Thank you so much.
Saudi Arabia has denied hacking the phone of Amazon CEO, Jeff Bezos. A source says a team working for the billionaire concluded with a "medium to
high probability" that the attack originated from an account controlled by the Crown Prince.
Nina dos Santos joins us live now. So Nina just what more do we know here?
NINA DOS SANTOS, CNN CORRESPONDENT: Well, what we know is, at the top of this hour, the United Nations that a number of months ago, a special team
of rapporteurs to look into this subject to look into this subject, into the killing of Jamal Khashoggi, and why he was targeted, appear to have
confirmed this private intelligence report that Jeff Bezos had commissioned himself into the hacking of his own phone.
[09:10:20]
DOS SANTOS: That was the one that concluded with medium to high probability that Jeff Bezos may have been hacked via a message that was
sent via WhatsApp in the form of a video file from a phone linked to the Crown Prince of Saudi Arabia, Mohammad bin Salman himself.
Well, this dates back to April 2018, when it appears as though the Amazon founder met the Crown Prince of Saudi Arabia in Los Angeles as part of a
charm offensive and potential investment tour that the Saudi Arabian Crown Prince has undertaken at the time in Hollywood, and they exchanged
telephone numbers and then soon after, he began receiving messages from the Crown Prince of Saudi Arabia a number of months afterwards.
He then appears to have received this video file, and thereafter, according to this Intelligence report commissioned as I said by Bezos, it appears as
though the Amazon founder's phone started sending large amounts of data back to Saudi Arabia.
Now, just to give you some lines from this report, because I'm reading it for the first time in the last couple of minutes, this panel of experts
calls for a full investigation into allegations that the Saudi Crown Prince was involved in the hacking of Jeff Bezos's phone.
They say the information that we received suggests the possible involvement of the Crown Prince in surveillance of Mr. Bezos in an effort to influence
if not silence, "The Washington Post" reporting on Saudi Arabia.
Now, why is this important? Well, because at this very time, Jeff Bezos employed one of the most prominent Saudi Arabian dissenting voices in the
form of Jamal Khashoggi, who then went on to disappear, and eventually it was found that he'd been killed in the Saudi Arabian consulate in Istanbul
in October 2018.
What's also interesting about the story that was first broken by "The Guardian" earlier today in the U.K. is that it, to a certain extent
corroborates findings that we, at CNN have already reported on about a year ago when it was found that Jamal Khashoggi's own messages, about 456 of
them may have been intercepted by Saudi Arabia itself, because they were already hacking the WhatsApp communications of another Saudi Arabian
dissident who'd been given asylum in Canada.
So very worrying situations here in terms of sort of internet security, communication, security and, and very much who could be at risk and where
some of these messages could be coming from.
This is very much the top of the corporate tree, and also the Crown Prince of a sovereign country. I should point out that Saudi Arabia's Embassy in
Washington, D.C. has called these reports earlier in the day absurd and flatly denied this. Of course, that statement was made before the United
Nations threw their weight behind these allegations -- Zain.
ASHER: Nina dos Santos live for us there. Thank you so much.
All right, these are the stories that are making headlines around the world. Venezuela's opposition leader, Juan Guaido has told CNN he won't
take part in talks with embattled President Nicolas Maduro.
He said Mr. Maduro had killed any dialogue by blocking a free election. It's been a year since Juan Guaido declared himself Interim President of
Venezuela, but he hasn't been able to break the Maduro government's grip on power.
The "Monty Python" star Terry Jones has died, age 77, according to PA Media, citing a family statement. He passed away at his London home with
his wife by his side. The comedy icon had been suffering from a rare form of dementia called FTD.
In China, the coronavirus death toll has risen to nine. Beijing has confirmed more than 400 cases. The U.S. reported its first patient on
Tuesday. Cases have also been reported in Japan, Thailand and South Korea. The virus originated in the City of Wuhan. CNN's David Culver is there.
(BEGIN VIDEOTAPE)
DAVID CULVER, CNN CORRESPONDENT (voice over): Behind the police tape, this normally crowded market in the central China city of Wuhan sits eerily
desolate. This is ground zero for the illness sparking global unease.
CULVER (on camera): So this is where authorities believe the source of the coronavirus is. It's the wildlife and seafood market.
And you can perhaps see over there, it's cordoned off. You've got police at all the corners.
CULVER (voice over): It is so sensitive that within minutes of us arriving and recording, security asked us to stop filming. There is an uneasiness
felt throughout Wuhan. We experienced that as soon as we boarded the train from Beijing.
Each car nearly full, most faces covered. Just about everyone traveling home for the Lunar New Year.
Strict screening upon arrival, one by one passenger step through a thermometer check to make sure they are not bringing a fever with them.
Scenes like this playing out in transportation hubs across China.
(BEGIN VIDEO CLIP)
LI BIN, CHINESE VICE MINISTER, NATIONAL HEALTH COMMISSION: The virus was being spread mainly through respiratory transmission and is likely to
mutate, which will increase the risk of epidemics spreading.
In addition, the Spring Festival travel rush saw a mass migration of people, and that has objectively increased the risk of epidemic spreading
and the difficulties in taking effective preventative and control measures.
We should always be on high alert and never take this lightly.
(END VIDEO CLIP)
[09:15:20]
CULVER (on camera): Behind me, this is one of a few hospitals here in the region that's dedicated to treating some of those who are either confirmed
cases or suspected cases of the coronavirus.
Out front, you've got a few staff members who we noticed are all wearing masks. Some of them are even wearing protective gloves just to prevent any
potential exposure.
CULVER (voice over): It's brought the normally festive holiday mood in Wuhan to a halt and it has cut down this vendor's business.
(BEGIN VIDEO CLIP)
XIAO CHUAN'AN, SUGARCANE VENDOR (through translator): This year, the pneumonia situation is getting serious, so there are not so many people
coming here to buy goods.
(END VIDEO CLIP)
CULVER (voice over): She's from a city that's about two hours drive from Wuhan. She's got her mask nearby and she admits she is worried, and so too
is her daughter and other relatives.
(BEGIN VIDEO CLIP)
CHUAN'AN (through translator): They were asking me to go back home, but I can't leave with all my inventory here. I've already bought these goods. I
have no choice and I have to stay here and resign myself to my fate.
(END VIDEO CLIP)
CULVER (voice over): Other vendors are hopeful. This woman telling me she does not feel the need to wear a mask.
(BEGIN VIDEO CLIP)
YAN WEIXI, JACKFRUIT VENDOR: Maybe I am having a positive outlook, I have been checking online instructions on Baidu, like drinking more water or
washing your hands more frequently. I think that should be fine.
(END VIDEO CLIP)
CULVER (voice over): The unknown is looming over a city with a rising death toll. Unclear what's next for Wuhan and the 11 million people who
call it home.
David Culver, CNN, Wuhan, China.
(END VIDEOTAPE)
ASHER: All right, Hong Kong is in crisis mode following the coronavirus outbreak. Coming up on FIRST MOVE, how those fears are being heard in
Davos.
And Netflix is feeling the pressure. How the streaming giant is competing against new domestic rivals, Disney and Apple, that's next.
(COMMERCIAL BREAK)
[09:20:35]
CHATTERLEY: Welcome back to Davos, the World Economic Forum, of course live from Switzerland all this week. We're midway through the week. We've
seen a whole host of politicians, world leaders, business leaders gathering here and I think everyone in particular, this time around waiting to hear
from one particular woman.
I'm talking about the Chief Executive of Hong Kong, Carrie Lam. She spoke today, the world watching, I think to hear what next for the region there?
Also, of course, on high alert over the coronavirus.
Four hundred and seventy nine people have been infected worldwide. Hong Kong, just a two hour flight away across from Wuhan.
Let's talk about all of the issues that ongoing. Hong Kong's Commerce Secretary, Edward Yau joins us now. Great to have you with us.
EDWARD YAU, HONG KONG COMMERCE SECRETARY: Thank you. Thank you, Julia.
CHATTERLEY: Let's just talk about the preparations as far as you can that the government is making it this stage?
YAU: Well, I think the whole world is sort of very cautious of this new epidemic and Hong Kong being so close to the Mainland, so we have in fact
put in high alert and there are some contingency plan already put in place to guard against sort of the spreading epidemic.
Well, some people, we remember about some time years ago, we had this, SARS, in which was a bitter experience, but it also gave us some sort of
arrangement, in case similar things right, then -- well, we have a plan there.
So I understand my colleagues, the health officials are already sort of in full gear, sort of gearing up for this case. So we have detection and so
far, cases could be easily detected at all the entry points and they've been dealt and they will be sent to a hospital for checking.
And there are some quarantine arrangement to be put in place if necessary.
CHATTERLEY: So the underlying message here is we're prepared and we're being proactive here.
YAU: Yes, yes. And also the public will also need to be conscious --
CHATTERLEY: Mindful.
YAU: Yes, mindful of the hygiene and also be aware of the development.
CHATTERLEY: Fantastic. I want to move on and talk about Hong Kong's representation here in Davos. The biggest contingent, I believe, for 20
years, an important time. What is the message at this moment because you've said, 2019 was a troubling year, the protest movement, the trade war, of
course, not only one issue here.
Have we seen the worst as far as the economy is concerned?
YAU: I think, well, we are -- well, it has been tough in economic terms, and we have a setback last year, well, which was the worst in the last
decade.
We came from three years positive growth, GDP in 2018, down to sort of minus 1.3 partly because of the U.S.-China trade war, where we suffered
from the collateral damage, and also partly because of our own problem, the social unrest that happened in the last six months.
So it is a double dip. But having said that, I think we are seeing some easing of the signs.
First of all, well, delighted to see at least, the two big power sitting together and sign a piece of paper, and people anxiously looking, well,
whether that will be put into not just full, but also swift implementation that they're going to work to taking away of the tariffs.
But on the other hand, we are also seeing things quiet down at the home front. Hong Kong never, never had any problems with demonstration, which is
-- which are peaceful. But on occasion where people step over the red line and violence, we have to tackle it.
But I'm seeing that well, that part has been -- it sort of subsided a bit.
CHATTERLEY: What we saw is the rating agencies -- Moody's -- coming out and directly suggesting that they were less comfortable than they had been
with your governance, with your institutions.
One, are they right to question in light of what we saw and the handling of what we saw? And two, what of the business community who know Hong Kong
very well, and the importance of it, saying to you about that specific thing?
YAU: I think you're exactly -- you're exactly right. Well, in fact, the people who knows Hong Kong best would be international business in Hong
Kong, where actually there's a very strong presence of international presence. Nine thousand companies, global company use Hong Kong as regional
headquarters, which is a historical fact and despite things happening, we're on the rise.
We also have seen a lot of startups coming to Hong Kong. But of course, well given the things happening in Hong Kong, there will obviously,
naturally will be concern in sentiment.
[09:25:10]
CHATTERLEY: They want to know you're in control.
YAU: Yes.
CHATTERLEY: But I think, well, the different agencies might have different perspectives.
CHATTERLEY: Right.
YAU: And I hope they will -- in the long term, they see Hong Kong in perspective, but it's also worth sort of pointing IMF also doing a more
comprehensive Article 4 review and looking into the entire system.
Their confirmation was Hong Kong is truly a global financial center, and they also gave us positive assessment that we have the capability to handle
cyclical and also structural challenges that we are facing.
So I hope that will create a more comfortable backdrop to confirm the business view in Hong Kong.
CHATTERLEY: Carrie Lam said here that China isn't cracking down, they're not restricting Hong Kong in any way, and someone also said to me, look
this one country two systems, the two sides look at it differently and have different perspectives.
Is it in China's interest to protect why Hong Kong is special for their own financial interests, never mind anything else?
YAU: I think one country two system has to be looked at in its totality. It's not two systems separate, it is also not just one country. I think
this arrangement has been unique for Hong Kong and our neighbor, Macau. It must be looked at in totality.
Because if we're only looking at Hong Kong as if it's Independence Day, sorry, that's not the arrangement. But the same time I think, from the
Chinese leadership in the last 22 years, they have sort of clarified and also, we affirmed that our one country two systems is best for Hong Kong,
and I believe that's exactly what Hong Kong people believe here.
CHATTERLEY: Edward Yau, thank you so much for that. The Commerce Secretary of Hong Kong.
We're counting down to the market open this Wednesday morning. Stay with us. We're back after this.
(COMMERCIAL BREAK)
[09:30:00]
ASHER: All right. We are halfway through the trading week and that was the opening bell. Welcome back to FIRST MOVE. I'm Zain Asher, coming to you
live from New York and also the World Economic Forum in Davos, Switzerland.
We are looking at a higher open across the board for U.S. stocks as today's session gets underway. The NASDAQ and the S&P 500 are closing in on records
again after falling from records yesterday, concern about the spread of the coronavirus in Asia has been weighing on sentiment.
Shares of Delta, United, and American Airlines all fell sharply on Tuesday on virus fears, but they are all higher in early trading today.
Let's take a closer look at the markets now. I'm joined now by Tim Horsburgh, the Investment Strategist at Invesco. Thank you so much for
being with us.
So just in terms of President Trump's speech today in Davos, Switzerland, the impromptu speech he gave before leaving to come back to Washington,
E.U. tariffs were front and center. The President actually talked about the fact that he believes that the European Union is actually harder to do
business with than China. He dangled the threat of tariffs.
How concerned is the market about that right now?
TIM HORSBURGH, INVESTMENT STRATEGIST, INVESCO: You know, I think when we look at the trade stance of the administration, that's certainly been an
overarching concern, really, over the last year or so as this trade war with China has developed.
Now that we've got this Phase 1 deal, and some forward progress even if we don't have all the features in place that we looked for, and the attention
is turning to the E.U., this certainly is a concern for markets.
But so far, we haven't seen a big hit to sentiment obviously as markets are approaching all-time highs. So I think this is still mostly a negotiating
tactic on the part of the Trump administration.
ASHER: And then the President also talked about this idea of him already planning for Phase 2 of the U.S.-China trade deal. What does the market
hope that that trade deal, that second phase of the trade will actually include? Because even though we had Phase 1 signed, there are still many,
many tariffs that are still in place?
HORSBURGH: No, I think you're absolutely right. I think that when we look at Phase 2, first and foremost, it would be lifting of the remaining
tariffs, those that were stated to remain in place through really the end of 2020.
So I think that was a bit of a disappointment in Phase 1, and definitely something that we'd like to see in Phase 2. I think also Phase 2 would have
to tackle some of those harder issues: Intellectual property, forced technology transfer, and some of the more fundamental sticking points in
the trade relationship between the U.S. and China.
So I think, the progress will be slower and harder fought on that second phase.
ASHER: And just in terms of what is casting a shadow over the markets right now, it's interesting because you have massive political turbulence
in Washington. You have the President being involved in this impeachment trial that could last God knows how long.
But at the same time, the market seem to be shrugging that off and really focused on earnings season and the fact that, you know, 2019, we had a
lackluster earnings season and this year appears to be much, much brighter. What are your thoughts on what market is really focused on this year?
HORSBURGH: Oh, absolutely. I think you hit the nail on the head when we're looking at market sentiment. We've got all of these negative headline
risks, things like political turmoil, or any concerns around trade, but at the same time, markets have done quite well. And I think a lot of that is
related to improving fundamentals in the U.S. economy.
We had that growth scare really in August and September of 2019, followed by a reacceleration of U.S. growth back to trend and I think we're seeing
that now as earnings forecasts for 2020 are coming out and saying look, we're projecting this to be more of a mid to high single digits type of
earnings growth year, maybe six to eight percent.
And that's the type of fundamental environment where stocks can power higher, maybe not at to the same degree that you saw in 2019, but I think
that's where that relative optimism is coming from, it is the fundamentals underlying the market.
ASHER: Right. So you've got a strong U.S. consumer, we've got the fact that interest rates are low, we've got receding economic risks.
Given all of that, obviously, the environment is very ripe for stocks to continue going higher, but given all of that, what would you say was the
major headwind, the major sort of cause for concern going into 2020 for the markets?
HORSBURGH: Well, I think, to take a step back and look at what was a big cause for concern at the start of last year, it was Fed policy, and I think
one of the big shifts throughout 2019, that's really put a more positive tone on risk sentiment is around the Fed shift in stance, both being
patient at the beginning of 2019, and then ultimately cutting rates to bring them more in line with what the potential for growth was in the U.S.
economy.
So I think, if there's one big risk in my mind, it would be a policy mistake from the Fed.
[09:35:09]
HORSBURGH: If, for instance, we start hearing more hawkish pronouncements from Fed policymakers or Chairman Powell about either keeping rates on hold
or even raising rates, I think that's the type of environment where you could see a deterioration in sentiment.
But other than that, again, when we look at those underlying fundamentals, as you pointed out, whether it's home building or manufacturing or
employment or consumption here, all of those outlooks look quite strong at this point for the U.S.
ASHER: All right, Tim Horsburgh live for us there. Thank you so much.
Time now for a look at our Global Movers. IBM shares are higher. The tech giant is reporting better than expected earnings and revenues and raising
its 2020 guidance. Revenues grew for the first time in six quarters, thanks to solid results from its Cloud software divisions.
Johnson & Johnson shares are lower, down about one percent or so. The pharmaceutical and consumer products company is reporting stronger than
expected profits, but revenues missed expectations.
And Netflix shares at the bottom of your screen there have turned lower, down about two percent. Now, the streaming giant actually reported
disappointing U.S. subscription growth in the fourth quarter. Its forward guidance was weak, but earnings and revenue beat expectations and
international growth was strong.
Netflix admits that Disney Plus and Apple TV and other streaming services are beginning to impact U.S. results. The big question is, how serious
could it get?
Frank Pallotta joins us live now. So Frank, just walk us through this because even though international subscribers for Netflix are growing
pretty well, it's U.S. subscribers, that's where the trouble really is for them. It's not growing as quickly as they might hope.
Just how strong is the competition from the likes of Disney and other streaming services?
FRANK PALLOTTA, CNN MEDIA REPORTER: I think it's strong, but it could potentially get stronger. Like look at it this way, last night, they said
they brought in about 420,000 U.S. subscribers. That's about 180,000 less than the 600,000 they were projecting. That's an issue.
But look at it this way, most of those services -- Apple, Disney Plus -- they launched right in the middle of the quarter right in November. So next
quarter is going to be really, really interesting to not just look at the international and global growth, but really looking at that U.S. growth.
Are they going to lose subscribers? Are they going to have even more sluggish type of growth?
And the other thing that's being kind of lost in translation here as well is they didn't just blame competition, they also blamed recent price
changes. So it's a mixture of many things.
The last three quarters have not been great for Netflix in the U.S. and it kind of continued last night. And we'll see if that kind of continues as
more -- as Disney gets more of a stranglehold on the market.
ASHER: And Netflix has also changed the way or defined the way that they claim viewership as in how do they measure whether or not someone has
actually viewed an episode of a particular series and that is if they have viewed it for longer than two minutes. Doesn't not inflate the numbers for
them ever so slightly?
PALLOTTA: I mean, it's not great. I mean, before, it was they had to watch about 70 percent of the show to be counted. Now, they have something called
Choose to Watch, which all means, as you said, you have to watch for about two minutes.
It's a show that -- you actually made a conscious choice to watch that show. And we'll see if they continually really pump that up. They've really
pumped those numbers up in the earnings last night with the two minute only.
But that being said, we kind of need to figure out how viewership and transparency with viewership numbers is going to work. It doesn't
necessarily correlate between viewership and subscribers, so it doesn't really totally impact their stock, but it does matter.
ASHER: All right, Frank Pallotta live for us there, thank you so much.
All right, you're watching FIRST MOVE. Coming up, airports around the world step up health screenings, amid fears the corona virus will continue to
spread.
(COMMERCIAL BREAK)
[09:42:00]
ASHER: In China, authorities have confirmed the ninth coronavirus death and they are reporting well over 400 patients. Cases have also been
reported in Thailand, South Korea, Japan and the United States. Chinese experts established this week that the virus could be spread by human to
human transmission.
A short time ago, Hong Kong's chief top executive confirmed the first case of coronavirus. Speaking in Davos, she said the territory was implementing
lessons learned during the SARS outbreak.
(BEGIN VIDEO CLIP)
CARRIE LAM, HONG KONG CHIEF EXECUTIVE: We have been putting ourselves on a very highly vigilant system because we learned from the past. I'm sure you
still remember Hong Kong handling the SARS.
Now a couple of hours ago, Hong Kong health authorities have just announced that we have the first case of highly suspicious infection in Hong Kong
from a passenger, from Wuhan, or from Wuhan via another city coming to Hong Kong.
So this system which has been put in place for almost three weeks now will be put into actual action. I have asked my health colleagues to be really
on the guard because public health is so very important to the community, and with this rapid flow of people across the border, it makes Hong Kong
even more vulnerable should this disease spread.
(END VIDEO CLIP)
ASHER: Airports across the globe have increased screening for the virus as officials race to contain it. The Lunar New Year holiday is complicating
efforts in China. It is the largest human migration on earth.
Paula Newton joins us live now, so Paula, we know that there are airports around the globe that now have more health screenings, quarantine
procedures as well because of the coronavirus and the fears about it spreading.
What can passengers leaving Wuhan, traveling to other parts of the world, particularly the United States, expect once they get to airports in this
country?
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Yes, and not just the United States, Zain, although in the U.S., the CDC has confirmed the one
case, I mean, look, whether it's here in Canada, in the United States, in Europe, they will be asked questions about how they're feeling. Temperature
is going to be a big deal.
And it's a very pertinent point, because when we talk about the Lunar New Year, Zain, we're talking about, you know, imagine a Christmas holiday in
Europe or North America and all those travelers that will be taking those trips not just throughout Asia, of course, but also to Europe and North
America.
So you're talking about really taking a close look at your temperature. How are you feeling? The other complicating factors -- flu season, right? It's
hard. Sometimes you have the flu, it can be masked as the coronavirus.
The issue here is that it is much different than it was in SARS in 2003. Health officials I've spoken to are saying look, immediately this time,
Zain, China published the genetic sequence of this. They can see it in their labs, and that is a good thing in terms of trying to identify it.
You are traveling, what they want travelers to do is again pay attention. Where have you been? What is also key, Zain, of course is that human to
human transmission.
The chief public health officer here in Canada -- and I'll remind everyone, Canada was ground zero outside of Asia for SARS. There were many lessons
learned here. What is key? How extensive is that human to human transmission? That is going to be a key question for the World Health
Organization as they meet right now to try and determine whether or not this does lead to some kind of international concern in terms of health.
[09:45:34]
NEWTON: And Zain, to put a fine point on it. You know, when we have Lunar New Year, obviously, it will impact businesses as well. Certainly hotels,
airlines, keeping a close eye on this. Again, SARS did impact GDP throughout several countries, including Canada, and that is what officials
are looking at very closely, not just people's health, but also to not spread panic, right?
And that's why it's a very tough decision right now and the WHO to look at this virus and see if they really do need to declare that health emergency.
ASHER: Paula Newton live for us there. Thank you so much.
A programming note for you, Prince Charles is speaking exclusively to our Max Foster at the World Economic Forum in Davos. That will air next hour at
10:00 a.m. New York time; 3:00 p.m. London time right here on CNN.
Also in Davos, President Trump called Boeing a very disappointing company after its troubles with the 737 MAX airliner. The President was speaking on
CNBC later; in a news conference, he had this to say.
(BEGIN VIDEO CLIP)
TRUMP: Boeing has not had a good time of it. They have -- they better start recovering fast. I hope they do. They have some good people in there.
Now, they have great people in the company, but they have some good people leading it now. So hopefully that'll be taken care of.
(END VIDEO CLIP)
ASHER: The President's comments come as Boeing executives now expect the MAX won't be approved to fly until the middle of this year. Clare Sebastian
joins us live now. So Clare, just walk us through some of the trouble that Boeing has had over the past several months, in addition to obviously those
crashes over a year ago.
But just walk us through why the recertification process is taking much longer than anticipated?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Zain, it now looks like it'll stretch beyond 15 months, far longer than anyone had expected when
this plane was first grounded.
It all started of course, with the MCAS anti-stall software system and that has been widely linked to the two crashes which killed some 346 people.
That fix has taken longer than expected and while they've been scrutinizing the plane, Zain, other issues have come to light.
There was another problem revealed with the computer system. "The New York Times" revealed a potential problem with the wiring affecting the tail of
the 737 MAX earlier this month. So there are other issues beyond that software fix that they are now grappling with.
Don't forget, of course, that also means that the manual has to be updated. Flight training has to be updated. Boeing has now recommended that all
pilots need to go through the simulator, a big turnaround for the company that also affects the timeline.
And this isn't just about Boeing, this is about the Federal Aviation Administration, the U.S. regulator charged with certifying this plane,
their reputation is at stake here, too. They need to be seen not to be rushing this, but this delay is a big deal for the airlines. This could
mean that they now go through the peak summer flying season without these planes.
And it raises questions as well for Boeing about the production stoppage of the 737 MAX, which began this month, will they then have to extend that --
Zain.
ASHER: So just walk us through obviously, Boeing now has a new CEO, David Calhoun. Just walk us through what his strategy is going forward.
SEBASTIAN: Yes, David Calhoun, barely 10 days into the job, Zain. He has already been to the White House and been thanked by the President. He is
now been criticized, well, his company by the President.
He has seen the stock halted yesterday on this news, but clearly, this is him trying to prove that this is a new era of transparency for Boeing and
that he is the man to repair the relationship with the Federal Aviation Administration, which is widely believed to have broken down towards the
end of last year because of Boeing's overly optimistic estimates of when the plane would be recertified.
And you can see this in the statement, it begins -- you know, he says, the F.A.A. and other global regulators, it's up to them to determine when the
plane will return to the skies. And he says that they are basing this estimate now, the middle of 2020 on their experience with this
certification process so far.
So there's a lot of humility in the statement, a lot of reverence towards the regulators. So I think that is what he's trying to prove today.
Calhoun is also going to be holding a call later with reporters. So I think all of this sort of smacks with this new era of transparency from Boeing.
ASHER: Clare Sebastian, thank you. All right, coming up here on FIRST MOVE, we'll have all the latest from Davos as President Trump head heads
back to Washington.
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[09:51:53]
ASHER: President Trump has left Davos. He is heading back to Washington after using the platform at the World Economic Forum to attack the
impeachment trial and tout the U.S. economy and potential trade deals.
Julia Chatterley is joining us live now from Davos. The President also talked about reforming the W.T.O. and also slapping tariffs on the E.U. as
well. Take it away -- Julia.
CHATTERLEY: I know, we've heard it all before those, Zain, haven't we? I'm joined by Richard Quest as well. I want to bring him.
Zain was just saying, he has talked -- Mr. President Trump has talked about slapping Europe with tariffs. He would also tariff --
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: He is itching to do it.
CHATTERLEY: And reform of the W.T.O., let's not forget that one as well.
QUEST: That was interesting because he had managed to get the DG on board. Now look, Roberto Azevedo clearly knows that there needs to be reform.
CHATTERLEY: I was about to say --
QUEST: He knows there needs to be reform.
CHATTERLEY: Preaching to the choir.
QUEST: But for him to be standing next to the President wrapping himself, there will be critics in the W.T.O. who will say, why are you giving sucker
to the man who has been so rude and so destructive to the W.T.O.?
CHATTERLEY: Now, we could use other examples of the W.T.O. We could use NATO, they all end up agreeing with him that people aren't paying enough
money over reforms required quite frankly.
QUEST: Yes, yes, and that is the genius of the President.
CHATTERLEY: Yes, China. Look at all of these things.
QUEST: Yes. He managed to get the DG to wrap himself in the same thing. I think, by the way that President Trump cannot wait to put some sort of
tariffs on Europe in some shape or form. He is waiting for the excuse.
CHATTERLEY: Does it achieve a deal of sorts in some form, some degree of better or less asymmetry, quite frankly, because that was the word we've
used with China, no one else tackled China and look what he's achieved? Like it or not, it is a move forward.
QUEST: It's a move forward, but come on, let's not over egg that pudding on the Phase 1. Come on. Surely, you've still got -- you haven't taken your
blinkers off completely on that one.
CHATTERLEY: I'll probably get a ride.
QUEST: Yes, you've succeeded. You've succeeded. Now, I think, look, I think the really interesting issue here is going to be how far Europe will
accommodate to avoid auto tariffs.
CHATTERLEY: Right.
QUEST: But my gut is he loves tariffs. He talks about them. He talks about the benefit of them. He talks about how much money he's making off of them.
He would love to do the same with Europe.
CHATTERLEY: Absolutely, and he didn't take potential Iraqi tariffs off the table as well. Sanctions on Iraq. The Iraqis as well.
QUEST: I don't see that he has actually reversed much on anything.
CHATTERLEY: No.
QUEST: The only tariffs he has reversed are those very small ones that were coming in just now by 50 percent, but the bulk of China tariffs
remain, and the average is 19 to 20 percent.
CHATTERLEY: And what's quite fascinating, just to wrap this all up is that the collateral damage of those tariffs on the global economy is not being
spoken about this time around.
QUEST: Because it may not be as bad as we first thought. The numbers may not be as dramatic.
I'll tell you why I'm much more concerned about is this snow, which is a lot more dangerous than it looks.
CHATTERLEY: If I slide, I'll slide to you.
QUEST: I know and I'll go -- and if I slide, we'll down in the trees before you know it. I've got to tell you.
[09:55:03]
QUEST: I'm exhausted.
CHATTERLEY: I know, it is exhausting. You can catch me and then we'll just both make snowmen down there.
QUEST: Snow angels.
CHATTERLEY: We're off.
QUEST: I'll pay good money to see ma'am do a snow angel.
CHATTERLEY: Yes, you haven't got enough money for that, my friend. Back to you, Zain.
ASHER: Go on, Julia. Do it. Do it. Go on, Julia. You first.
CHATTERLEY: I'll just save it for Friday.
ASHER: All right, Julia Chatterley and Richard Quest, thank you both so much for that entertaining four minutes.
QUEST: To charity.
All right, stay with CNN. Prince Charles is speaking exclusively to our Max Foster at the World Economic Forum in Davos. That will air next hour, 10:00
a.m., New York time, 3:00 p.m. London time right here on CNN.
That is it for this show. I am Zain Asher. "CONNECT THE WORLD" with our Lynda Kinkaid starts right after this short break.
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[10:00:00]
END
