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First Move with Julia Chatterley
G-7 Leaders to Pledge Billions of Dollars of Help for Poorer Countries; Global Backlash over Facebook's Block on News in Australia; Texas Faces More Drinking Water Shortages, even as Power Slowly Returns. Aired 9-10a ET.
Aired February 19, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:14]
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Live from New York, I'm Alison Kosik. I am in for Julia Chatterley. This is FIRST MOVE, and here's your
need to know.
Virtual vaccine Summit: G-7 leaders to pledge billions of dollars of help for poorer countries.
Facebook fallout. Global backlash over its block on news in Australia.
And water warning. Texas faces more drinking water shortages, even as power slowly returns.
It's Friday. Let's make a move.
Welcome to FIRST MOVE. Great to have you with us on this busy Friday. Let's begin with a look at the markets.
U.S. stocks look set to bounce after an across the board pullback on Thursday, driven in part by weaker than expected jobless numbers and
concerns about the economic effects of the U.S. winter freeze. Oil and gas companies are slowly restarting production after severe storms knocked out
a significant chunk of their output.
Economic growth and focus in Europe as well. Germany's factory index has just hit three-year highs, but fresh lockdowns are pressuring U.K. retail
with sales falling more than eight percent last month. The pound, however, rising to three-year highs as investors bet on stronger growth later this
year.
Staying in the U.K., the Supreme Court delivering a blow to Uber today, ruling that its drivers must be classified as workers entitled to benefits.
Uber down about two percent in premarket trading, much more on this later in the show.
Shares of car maker Renault are falling, too, after warning that the global chip shortage will impact production and slow its turnaround plans.
There's a lot going on. Let's get straight to the drivers.
Let's get right to today's virtual G-7 meeting where coronavirus and equal access to vaccines is sure to be top of the agenda. Joining me now with all
the details is CNN's diplomatic editor, Nic Robertson.
Nic, great to see you. So what is your thinking here? Do you think there could be a collective message that could come out of this meeting with
these world leaders, even with this being more of a preparatory meeting, the real Summit happening in June?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Absolutely, and I think there's a real need to send that message. Now, the world heard from
the U.N. Secretary General just earlier in the week saying, look, this vaccine rollout around the world is not equitable.
He said, you know, there are 10 countries that have had 75 percent of all the vaccines given to people so far. He said, there are 130 countries that
don't have it yet.
So what we're going to be hearing here is, number one, President Biden sort of stepping back on the world stage for the first time and saying, we're
going to support the World Health Organization. We're going to support their COVAX program, which is to get vaccines to poorer nations.
The idea to get, you know, 20 percent of the need of the 92 poorest nations by the end of this year, and he is going to say, I'm committing $2 billion
to that plus another $2 billion if everyone else steps up and does their thing.
We're going to hear likely from the French President, who is going to say, look, we, the nations that have these vaccines now, we've got big
stockpiles coming, essentially. The U.K., for example, has ordered 420 million doses. It has 66 million people. The United States has 600 million
doses coming on order.
So there's a space here for these richer nations to give a small percentage, Macron is saying, four percent or five percent, tens of
millions of doses to poorer nations.
Part of the thinking here is these western nations are looking over their shoulders at what China and Russia are doing, which is giving away their
vaccines to poorer nations, which is bringing in some, you know, as you would imagine, some credibility around the world.
So, western powers who are very rich, who have the vaccines, have got to look at that and they are.
The other thing that we hear from Boris Johnson today is, look, let's get ready for the next pandemic. Let's get ready for the next variants that may
be coming. We produce these vaccines in just 300 days. The next one, he said, we need to have ready in a hundred days, so it's going to be a
challenge to be better, faster off the mark next time as well -- Alison.
KOSIK: What about a specific message maybe coming from President Biden himself? This is his first step on to the world stage, virtual, albeit, but
his first time stepping on to the world stage after President Trump has been in, many would say who had a more acrimonious bedside manner.
ROBERTSON: There's a lot of patients over here in Europe who would sort or feel or felt that bedside manner. Yes, we're going to hear a couple times
from President Biden. He will be speaking at the G-7 and shortly after, he'll be speaking at what is known as the Munich Security Conference.
Normally, like a gathering of former world leaders, key players, current world leaders, crammed into a tiny hotel in Munich.
[09:05:19]
ROBERTSON: President Biden has been there many times in the past, but it is virtual this year. But he is going to be giving a message there which is
basically, "America is back."
Today, John Kerry will be speaking there as well, the new sort of climate change czar that President Biden appointed and the message from both will
be, "United States is back."
President Biden will be talking about the importance of upholding democracy, the importance of diplomacy to solve the world's problems. This
is the day where not only the United States sort of firms up its real commitment to the W.H.O. with those billions of dollars for COVAX, but also
rejoins the Climate Change Accord that President Biden set out first day in office; that actually physically happens today.
And he is going to talk probably about Iran as well, where there's sort of diplomatic openings there, where there has been a very tense standoff over
Iran's breaking of the terms of the internationally agreed Nuclear Treaty.
So you know, a lot going on and a lot coming from President Biden. And it will be United States is back, we're a force for good. We're reengaging
where President Trump wasn't, and hopefully, he'll hope that his bedside manner is more palatable now.
KOSIK: Okay, Nic Robertson, great detail about this meeting. Great talking with you. Thanks for joining us.
Facebook's decision to block news on its Australian site has sparked a global backlash. A British lawmaker said the company was trying to bully
the Australian government. That sentiment was echoed by officials in Germany, the U.S., Canada, and France.
Brian Stelter joins me now live with this. You know, Brian, good to see you. You know, Facebook's decision is really being called one of the most
idiotic, but deeply disturbing corporate moves of our lifetimes. Why this backlash against Facebook?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes, and this is not just in Australia now, as you said, it is in the United Kingdom, it's in the United
States. Lawmakers around the world reacting to Facebook's blockade of news in Australia, basically prohibiting publishers from sharing links on
Facebook in Australia.
These lawmakers in the U.S., the U.K. and elsewhere are saying this is proof of Facebook's monopoly power. David Cicilline, a lawmaker here in the
U.S., saying, "Threatening to bring an entire country to its knees to agree to Facebook's terms is the ultimate admission of monopoly power."
There are many regulators watching this case in Australia very carefully, wondering what they should do to hold Facebook accountable.
Of course, all of this is fundamentally about how to finance news gathering around the world. Publishers have been pushing Facebook and Google to pony
up, to help them make up for some of what they lost in the internet age. Rupert Murdoch's news corp and others have been pushing for this.
This morning's "New York Post" here in the U.S. has Mark Zuckerberg's face on the cover with the whole world in this hands calling this a face-off. So
a lot of pressure on Facebook from a lot of different directions but I think what Facebook is trying to do is set a marker in the ground and
saying, we are not going to agree to what Australia is proposing. We don't see the world the same way you do, and now it really is a face-off.
We do know, by the way, Mark Zuckerberg did have a phone call overnight with Australian officials, perhaps some sort of deal in the works, but we
don't know for sure.
KOSIK: Yes, the concern here could be that this could be precedent for other countries.
STELTER: Right. That is the overarching both fear and possibility, and opportunity, depending on what way you look at it.
For Facebook, it is a big fear. For Google, there's real concern as well. Google has been striking some deals with some publishers, trying to back
away from the cliff, trying to avoid the drastic action that Facebook has taken.
But you know, to many tech executives, this has the feel of a shakedown. On the other hand, there are many publishers who feel like Facebook and Google
have robbed them and have been robbing them for many years, and this feels like a reset moment in the relationship between publishers and Big Tech
platforms.
KOSIK: It will be interesting to hear what happens on that call that you talked about. Brian Stelter, great to talk with you.
STELTER: Thanks.
KOSIK: In Washington, the powerful House Financial Services Committee grilling key players in the GameStop frenzy, including the CEO of
Robinhood. Listen.
(BEGIN VIDEO CLIP)`
VLADIMIR TENEV, CEO, ROBINHOOD: I'm sorry for what happened. I apologize, and I'm not going to say that Robinhood did everything perfect and that we
haven't made mistakes in the past, but what I commit to is making sure that we improve from this, we learn from it, and we don't make the same mistakes
in the future.
(END VIDEO CLIP)
KOSIK: And Matt Egan joins us live with more. You know, matt, I was watching this and thinking this is the strangest financial services
committee I have, I think, ever seen.
First we had the TV debut of "Roaring Kitty" chalked with a picture of kitten in the back of him saying, "Hang in there." And then, of course, the
Members of Congress sitting there, seemingly with a lack of understanding about the rules of the road of what they were talking about.
[09:10:13]
MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes. I think that's right. I think, you know, Robinhood in particular was treated like the problem child, and I
think it's clear that Robinhood's business model is under siege right now and we sort of heard a little bit of that clip before when the CEO, Vlad
Tenev was apologizing for some of the communications failures.
I think in particular, there were a lot of questions, Alison, around payment for order flow, which is that controversial practice where
Robinhood and other brokerages, they get paid to send their retail orders to high-speed trading firms like Citadel Securities.
And you know, that practice has made it dirt cheap, even free, to trade, which is a great thing, but some of the lawmakers are worried that it's
actually the Wall Street firms that are getting the better end of this deal, so watch this really interesting exchange between the Robinhood CEO
and Congresswoman Alexandria Ocasio-Cortez.
(BEGIN VIDEO CLIP)
REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): Removing the revenues that you make from a payment for order flow would cause the removal of free commissions.
Doesn't that mean that trading on Robinhood isn't actually free to begin with? Because you're just hiding the cost, the cost in terms of potentially
poor execution or the cost of lost rebates to your customers.
TENEV: So, certainly, Congresswoman, Robinhood is a for-profit business and needs to generate some revenue to pay for the costs of running this
business.
(END VIDEO CLIP)
EGAN: So, clearly, this is going to be something that lawmakers are going to watch carefully. It would be very unpopular to do anything that makes it
expensive to trade. I mean, it's free. How do you take that away?
But I do think that if nothing else, this hearing is going to provide some political cover for the regulators, and remember, there is a new top cop
coming to Wall Street at the end of the Trump administration, which was obviously very deregulatory, has brought President Biden in.
He has tapped Gary Gensler, who was Obama's toughest regulator to lead the S.E.C., and I do think Gary Gensler and the S.E.C. are going to watch this
space very closely.
KOSIK: Now, I know there are still more hearings planned, Matt, but do you see any regulation at all coming out of this? And if so, where do you see
that happening?
EGAN: Well, Alison, there was a really interesting exchange between a Republican congressman and the Robinhood CEO where Robinhood finally
admitted for the first time that they were very close to a disaster here.
They said that they were requested -- the clearinghouse had actually asked Robinhood to put up about $3 billion early on the morning of January 28th
during all of that Reddit turmoil and Robinhood eventually got them to come down to $1.4 billion, they also ended up putting in all of these
restrictions.
But the CEO, Vlad Tenev, he admitted for the first time that they did not have enough capital to meet that $3 billion request had that been the
ultimate request.
And you know, the lawmakers said, listen, this whole episode exposes a vulnerability in your business model and perhaps in the whole industry more
broadly, so to your point, Alison, I think another area to look at for potential legislation or new regulation is around how much capital
brokerages are supposed to and they are required to actually hold.
Because you don't want to see a situation where they don't have enough cash and they're forced to liquidate trades, which is actually, apparently, what
almost happened at the end of January.
KOSIK: And we will see how this unfolds in the next couple of hearings. Matt Egan, great talking with you.
EGAN: Thank you.
KOSIK: And these are the stories making headlines around the world.
After a devastating week of bitter cold temperatures, the lights are back on throughout most of Texas, but millions are now facing an escalating
water crisis.
More than 13 million people have been ordered to boil their drinking water. Others have no water at all and are resorting to desperate measures like
boiling snow.
The Mississippi Governor has called this a slow-moving disaster but it's one that's manmade, and that's causing anger and frustration for so many.
CNN's Natasha Chen joins me now from Houston. Natasha, what are you seeing?
NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Yes, Alison, a lot of frustration and anger as you were saying, and fear from people who don't
really know where to go in situations like this.
As you said, the power is starting to come back on. We are in a building that is a furniture showroom where the owner has allowed people to actually
sleep here for, you know, to stay warm.
In the last several nights, they had several hundred people each night. They were feeding people breakfast, but overnight, we saw fewer than a
hundred people here and that's a good sign that power is coming back on for a lot of folks, but still water is a main issue.
[09:15:10]
(BEGIN VIDEOTAPE)
CHEN (voice over): No power, heat, or water.
UNIDENTIFIED FEMALE: We've got flashlights, we can't recharge the batteries. There's no propane in the area to be found.
CHEN (voice over): Food supplies running low.
UNIDENTIFIED FEMALE: It's all about survival right now until the store get in more.
CHEN (voice over): And homes destroyed.
QIANA ABRAMS, TEXAS STORM VICTIM: It's like complete shock. It's like one of your worst nightmares.
CHEN (voice over): Hundreds of thousands of Texans are waking to a harsh reality this morning.
THOMAS BECK, TEXAS STORM VICTIM: As of now, we're managing, but the gravity of the situation becomes more apparent by the minute.
CHEN (voice over): In Houston, people are waiting in line to fill up buckets of water from a spigot in a park to take home while others here
stay warm within this furniture store, which offered residents a place to eat and sleep.
About 13 million Texans are under a boil water advisory, and nearly 200,000 households are still in the dark. And it could take days for all to get
power back.
LINA HIDALGO, JUDGE, HARRIS COUNTY, TEXAS: We need to figure out what went wrong in the way that the Texas energy grid is run, but right now, there's
still a lot of work to do in response and in recovery.
CHEN (voice over) Texas Governor Greg Abbott promised to reform and investigate the Electric Reliability Council of Texas, which is in charge
of 90 percent of the State's power grid.
GOV. GREG ABBOTT (R-TX): I'm taking responsibility for the current status of ERCOT. Again, I find what has happened unacceptable.
CHEN (voice over): With dangerously cold temperatures still in the region, frustration here is growing. Firefighters need to truck their own water to
this blaze at a San Antonio apartment complex since the hydrants there were frozen.
The conditions delay the delivery of coronavirus vaccines in Texas and other hard-hit states.
ANDY SLAVITT, SENIOR ADVISER TO WHITE HOUSE COVID-19 RESPONSE TEAM: We can't have people riding on -- getting on the roads and going into work and
boxing them and delivering them through UPS or FedEx, either to sites like in Texas where they're not open yet.
We're going to keep these vaccines safe and sound and then we're going to get them out to people and catch up as just soon as the weather allows.
CHEN (voice over): A group of protesters welcomed Texas Senator Ted Cruz home returning back to Houston after facing backlash for leaving the crisis
for a family vacation in Cancun. Cruz confirmed the trip after photos emerged on social media Wednesday showing the senator boarding a plane.
SEN. TED CRUZ (R-TX): The plan had been to stay through the weekend with the family. That was the plan.
Look, it was obviously a mistake and in hindsight, I wouldn't have done it.
CHEN (voice over): Some local leaders slammed Cruz.
MAYOR SYLVESTER TURNER (D), HOUSTON, TEXAS: Well, it's certainly much warmer where he's going. Let me just put it like that.
REP. JOAQUIN CASTRO (D-TX): I mean, I think he threw in the towel on Texas. You know, this is a situation where it's all hands on deck.
(END VIDEOTAPE)
CHEN (on camera): Houston is among the parts of the state that are currently under a boil water notice. That's likely to remain through the
weekend, and that's really what people are focused on now, waiting for that water to come back.
In this building, it's just still trickling in and really, that and the burst pipes, this is all going to take quite some time for recovery --
Alison.
KOSIK: Yes, and needing power just to boil that water, that's the irony there. Natasha Chen, thank you so much.
CHEN: Yes.
KOSIK: A major announcement from Prince Harry and Meghan Markle, they have told the Queen they will not return as working members of the British Royal
Family. That's according to Buckingham Palace. The Palace says it is saddened by the decision.
Still to come on FIRST MOVE, the one shot vaccine. Johnson & Johnson is poised for launch. We discuss health equity and vaccine supplies with a
former F.D.A. Commissioner and J&J Board member.
And Perseverance pays off. NASA's rover makes it to Mars.
Stay with us for an update.
(COMMERCIAL BREAK)
[09:21:45]
KOSIK: Welcome back to FIRST MOVE, I'm Alison Kosik live from New York where U.S. stocks remain on track for a higher open.
Tech looks like it is set for the biggest bounce after a more than half a percent decline on Thursday. Economic bellwether Deere is up six percent in
the premarket after a big earnings beat. The heavy machinery maker is raising its full year forecast, too, on expectations for stronger
construction activity.
And the seemingly unstoppable Bitcoin rally continues today. The cryptocurrency closing in on a new milestone, $53,000.00. Its market cap is
fast approaching $1 trillion. JPMorgan is warning that the current Bitcoin price is, quote, "unsustainable."
President Biden is unveiling billions of dollars in aid to boost the World Health Organization's COVAX effort. The vaccine initiative aims to get
doses to low and middle income countries. French President Emmanuel Macron is also voicing concerns about those left behind, telling the "Financial
Times" newspaper that Europe and the U.S. should give five percent of their vaccine supplies to developing countries.
Joining me now on this is Dr. Mark McClellan. He is formerly an F.D.A. Commissioner. He is now Director of the Duke-Margolis Center for Health
Policy at Duke University, and he is an Independent Director on the Board of Johnson & Johnson.
Great to see you.
DR. MARK MCCLELLAN, FORMER F.D.A. COMMISSIONER: Good to be with you, Alison.
KOSIK: So, Doctor, do you think that the French President is right? Should Europe and the U.S. -- should they give five percent of their vaccine
supplies to developing countries?
MCCLELLAN: Well, we're clearly going to need to provide a lot more support for low and middle income countries to get beyond this pandemic. We've got
a long way to go.
You talked about the recent announcements from the Biden administration, $2 billion soon, $2 billion more coming to support the global vaccine purchase
efforts.
Remember, though, Alison, there are a couple of further problems there. One is just the vaccine supply. Some of our colleagues at Duke have been
tracking vaccine availability where doses are being produced, where they are scheduled to go. There's still a big gap.
We're at full capacity operations and trying to recruit more manufacturing capacity is challenging. These vaccines are complex to manufacture.
And the second problem for developing countries is going to be getting those shots in arms. Some of these vaccines are not so easy to use, and we
need an infrastructure support for these countries as well.
The U.S. is going to end up, I think, providing a lot more vaccines. We're purchasing many vaccines now for the U.S. population. My guess is we're not
going to end up needing all of them. That's going to add to the supply, too. But we've got a lot of work ahead to meet those needs.
KOSIK: Yes, and one thing that may help is an announcement saying that Pfizer-BioNTech says it submitted new data to the U.S. Food and Drug
Administration to show that its COVID-19 vaccine can be stored at warmer temperatures, so this ideally could make it easier to distribute the Pfizer
vaccine, right?
MCCLELLAN: That's right. That's going to help in the U.S. as we try to reach more hard to reach communities, more rural areas. It's going to help
hopefully around the world.
I think you're going to see some more innovation in these mRNA vaccines as well. This is a new technology. The first round of these vaccines was
really designed in an effort to get out the vaccines quickly so we could start getting shots in arms.
[09:25:15]
MCCLELLAN: Now that people have more time to look at the technologies for keeping those vaccines stable, I think you're going to see next generation
versions of these vaccines that are easier to store, easier to distribute, easier to use.
KOSIK: Now, Johnson & Johnson specifically has -- is a one-dose vaccine, but we're hearing that it could end up being a two-dose regimen. That's
according to a White House adviser, Andy Slavitt, what do you know about this?
MCCLELLAN: Oh, J&J is doing a study now of a second dose for the vaccine, as you saw, as people have seen in the early results, which the F.D.A. is
reviewing very closely right now. They're going to have a public meeting with their independent expert advisory group in just 10 days or less than
20 days, so that's coming up very soon before the end of the month.
That vaccine showed very good protection, no hospitalizations, very good protection against serious cases, but there are continuing questions as we
see more variants emerge, also about whether another dose could even have a bigger impact on mild cases, although it's not really the focus for these
vaccines.
You know, this is really all about preventing deaths, preventing hospitalizations, preventing the serious consequences that go along with
COVID.
But we'll learn more from the study that's under way now with results coming out in a few months. I still think the most important thing now,
Alison, is trying to get as many shots in arms of these multiple effective vaccines as we can.
KOSIK: Now, Pfizer has begun an international study to evaluate the safety and efficacy of vaccines on pregnant women. It also brings to question when
will, you know, younger people, teenagers and kids, be able to get their vaccines? Any idea there?
MCCLELLAN: Well, the initial studies focused on adults, and some young adults. The early Pfizer studies went down to age 16 and showed very high
levels of safety and effectiveness there.
Now, we're looking at the additional populations, so it's not unusual to delay studies in pregnant women until we've got a really good understanding
of the safety of a medical product.
Now that we do, and there have been a lot of pregnant women who have been vaccinated, who are being tracked right now, not seeing any obvious safety
issues there, so now is the time to do that study in pregnant women.
It's not going to be as large. It's not going to take as long. It's going to let us know for sure whether there are any unusual safety effects and
whether the immune response really benefits the mother and maybe has some protective effects for the unborn baby as well.
And similarly, Alison, there are studies under way now in children, all the way down to age five, now, those are -- kids have a lower risk from COVID,
so again, they weren't in the first round of studies, but we're seeing studies now to help us understand, what is the right dose? Is the vaccine
really safe in that group, too? Did they mount a strong immune response?
The studies won't have to be as big. They probably won't take as long, so we'll have more evidence on all of those populations in the next few months
as well.
KOSIK: And one quick question about crisis management because we're seeing hiccups already with the weather issues that we're seeing here in the U.S.
affecting these vaccines getting into arms.
MCCLELLAN: It has had a big effect this week. Really horrible weather conditions in many parts of the U.S., especially in Texas, so obviously,
not easy to even get the vaccines there, let alone open up vaccination clinics.
That's depressed the amount of vaccines being administered in many parts of the country this week. I think that's going to pick back up next week as
the weather gets better. We've got a little bit of extra supply to put back into those areas now.
We're probably going to get two million or more doses being delivered per day in the United States next week as we continue to increase vaccine
availability and deal with this backlog in some parts of the country.
KOSIK: Dr. Mark McClellan, Director of the Duke-Margolis Center for Health Policy at Duke University, thanks for joining us.
And you're watching FIRST MOVE. The market open is next.
(COMMERCIAL BREAK)
[09:32:26]
KOSIK: Welcome back to FIRST MOVE, I'm Alison Kosik. U.S. stocks are up and running for the last trading day of the week and we've got a higher
open across the board. Strong factory numbers in Japan and parts of Europe are helping boost investor sentiment. But services activity remains subdued
in those regions due to COVID-related restrictions.
Expectations for stronger growth and perhaps higher inflation continue to boost global bond yields. U.S. 10-year yields are on the rise again today
and near one-year highs.
Bond yields in Europe and Japan, those are higher as well.
Brian Belski joins me now. He is the Managing Director and Chief Investment Strategist at BMO Capital Markets. Great to see you, Brian.
BRIAN BELSKI, MANAGING DIRECTOR AND CHIEF INVESTMENT STRATEGIST, BMO CAPITAL MARKETS: Thanks for having us, Alison.
KOSIK: So, it's interesting. You see this market is just running up, running up, and running up. Is the market ignoring inflationary pressures?
BELSKI: It's a great question. It's one that we've been countering, actually the last several weeks.
When we wrote our piece, Alison, in November, detailing our outlook for 2021, we said that as long as 10-year Treasuries stay below 1.5 percent, I
think that all will be contained.
You have to remember that we have been waiting for 39 years for inflation to come back. It's really been since 1982 when that was squashed, and a
little over one percent print in PPI and a plus five percent print in retail sales from a longer term perspective is not that big of a deal.
It's just, I think, the relative side of things in how you introduced it with respect to year highs, of course, year highs, you think about what was
happening 12 months ago.
So we're not concerned about inflation. I think the Fed is going to be on hold for several more quarters, if not years. And I think much of this has
been overplayed.
KOSIK: But is the stock market in a bubble?
BELSKI: No. And I think that's a scary term and full of rhetoric and fear. I think there are certain stocks or asset classes that are in bubbles, but
the stock market is not.
And in fact, we've published a report this week that talks about the broadening out of performance, really, the last several months, which is
very positive.
Intra-stock correlations, meaning how the stocks are related to each other, are very low, meaning you want to buy stocks, not ETFs and sectors. And so,
we continue to believe that we're ushering in to a stock picking phase like we haven't seen since the mid '90s.
KOSIK: Okay, what are the biggest risks to the rally, then?
[09:35:04]
BELSKI: I think biggest risk to the rally are everybody becoming super bullish and I don't see that, Alison, because the media is negative.
We love to talk about bubbles. We love to talk about corrections. We love to get hedge funds on the air and talk about how smart they are. But how
much money they've lost, people don't really want to talk about that and how they've underperformed, people don't really want to talk about that.
So I don't think people are bullish, Alison, and I do believe that investors are underinvested in U.S. stocks. And so that's why we like
financials, industrials, consumer discretionary and materials in the U.S. for the next 12 to 18 months, but we would still maintain those Big Tech
and Big Communication services positions for the next three to five years.
KOSIK: Okay, about six months ago, you had reportedly said Bitcoin is the sexy thing to go to and that you don't base your investments on sex appeal.
Bitcoin hitting that $53,000.00 mark. Do you still feel the same way?
BELSKI: Yes, we'd much rather base our decisions on process and discipline versus sex appeal and sizzle. This is an instrument. I'm not even going to
call it an asset because I don't think it has any kind of intrinsic value. That's all about supply and demand and all you have to do is go back and
look to 2018 and 2019 when the demand went away and saw how fast that dropped.
Now, again, it's sexy, it's exciting. Bitcoin is in a bubble. I can say that. I think that's very clear.
KOSIK: Wait, wait, wait.
BELSKI: And the more people that chase it, the more of a bubble it gets.
KOSIK: That's rhetoric -- you're using rhetoric. Hold on, Brian. You accused me of saying bubble as rhetoric. You're doing the same thing.
And let me just say, it's becoming more acceptable, okay. Look at BNY Mellon, look at MasterCard, even Tesla. Who say you to that? Legitimizing
the currency.
BELSKI: Well, I'll use it -- you can use a bubble on individual assets, not just the market, Alison, so one bubble talking to another bubble in
terms of Tesla and Bitcoin, they're good bedfellows, let's just say that.
KOSIK: Okay, Brian Belski, great talking with you today. We'll see if we can move the needle on Bitcoin the next time I talk with you.
BELSKI: Thanks, Alison.
KOSIK: Thank you.
A major blow to Uber. The U.K. Supreme Court ruling that Uber must classify its drivers as workers, not independent contractors. Uber now may be forced
to give benefits to its drivers, including a minimum wage and paid time off.
Scott McLean is live outside the British Supreme Court with this one. Great to see you. You know, some may say this is finally happening for these
workers at Uber, but you look at what this means for the company, the U.K. is one of Uber's most important markets, so you know, what does this
decision do to the company's business model?
SCOTT MCLEAN, CNN CORRESPONDENT: Yes, and Alison, the U.K. is important to Uber because it's one of the few markets where it is actually profitable.
So, immediately, this ruling only applies to the 20 or so plaintiffs who originally brought the claim, but it also likely will quickly apply to
thousands of other drivers who were on the app in 2016 when the case was actually brought.
And beyond that, it is also likely to fundamentally change Uber's business model in this country. Being classed as a worker rather than an independent
contractor will entitle these drivers to things like minimum wage and paid time off.
The Court's unanimous ruling ultimately came down to its determination that Uber was not merely a booking agent between a driver and a rider, but it
was tightly controlling the terms of the transactions, not allowing drivers any room to negotiate their own terms or their own prices like you would
expect an independent contractor to do.
The Supreme Court also ruled, Alison, that workers should be paid so long as they are logged on to the app and willing and able to accept any fares
that come their way. That means that Uber and other companies who operate in similar ways are likely going to have to pay these drivers even for the
time that they are sitting in their cars in between rides.
The Supreme Court is the final word on this case, but Uber says that it's going to wait and see how the Employment Tribunal, where this case was
originally brought, actually applies the case before it makes any changes, so don't expect anything today.
But beyond that, it may also, it says, try to find some other legal avenue in order to fight this out, even longer. At least that part of the ruling.
In a statement, the company said, quote: "We respect the Court's decision, which focused on a small number of drivers who used the app in 2016. Since
then, we have made some significant changes to our business, guided by drivers every step of the way." The plaintiff in this case, one of the lead
ones, Yaseen Aslam, though, urged the company to simply follow the law. Listen.
(BEGIN VIDEO CLIP)
YASEEN ASLAM, PLAINTIFF AND FORMER UBER DRIVER: You would get people that are in a situation, they're so desperate, they'll work for two pounds an
hour. They will work for three pounds on an hour, but that doesn't mean it is right.
We're not here to tell Uber to shut down. We're not here against technology. The point is, the law needs to be obeyed, and someone like the
government needs to do a better job in enforcing these laws.
(END VIDEO CLIP)
MCLEAN: So, as I mentioned, don't expect any overnight changes to how the app actually operates in this country. It may take some further legal
action to actually force the company to comply fully.
Now, the most likely scenario is that Uber will eventually in the future have to severely cut down the number of drivers it actually allows on the
app to make sure that there's sufficient demand so that each of them can be ensured that they make at least the minimum wage after their costs are
taken into account.
Meanwhile, for the plaintiffs in this case, they expect to make about $14,000.00 each from the ruling, but after six years, the primary
plaintiffs say this was not about money. This was purely about the principle -- Alison.
KOSIK: Scott, and I realize that there are still more legal turns to go on this, but how precedent setting is this for other countries? Let's say the
U.S., for example?
MCLEAN: Yes, well, I mean, obviously the laws are going to be different everywhere. In California, for instance, they just had a referendum on this
issue, which basically allowed these companies to be exempted from laws that California had made.
So legally, it probably doesn't make that big of a different, but it certainly has a lot of momentum for these unions of drivers or these groups
of drivers who have been pushing for changes to the gig economy to make sure that they are protected in some way.
And so, when it comes to some momentum and having some energy in your corner, well, these drivers certainly have that at this point and perhaps
other countries, we may see similar challenges in other countries as a result -- Alison.
KOSIK: Okay, Scott McLean, great reporting, thank you.
Twilio wants to help with vaccine rollout. I'm going to speak with the CEO of the Cloud communications company, next.
(COMMERCIAL BREAK)
[09:45:12]
KOSIK: Welcome back, I'm Alison Kosik. Stock in Twilio hit an all-time high on Thursday after the Cloud communications company reported a 65
percent surge in revenue last quarter. Customers use the platform to place phone calls, send and receive texts, and facilitate other forms of digital
engagement.
As U.S. states and healthcare providers grapple with mass vaccine rollouts, Twilio says its tools can help and are already in use in Texas, Maine, and
Michigan.
Joining me now is Khozema Shipchandler, he is Chief Financial Officer at Twilio. Great to see you.
KHOZEMA SHIPCHANDLER, CHIEF FINANCIAL OFFICER, TWILIO: Great to be here. Thank you.
KOSIK: So, I know you reported blowout earnings and we'll get to that in just a minute because I want to talk about vaccines first of all.
I want to hear how Twilio is helping getting the vaccine into arms as it is partnering across the global health ecosystem to get these vaccines to
people, especially with, you know, scheduling issues, never mind the cancellations because of weather, especially with what's, let's say,
happening in Texas.
SHIPCHANDLER: Well, I think Texas is actually a great example, because more than ever, having robust communications and ensuring that citizens
have an opportunity for outreach from various stake owners like State and local officials to make sure that they're okay, on the one hand, especially
with what citizens are going through right now and our hearts certainly go out to them.
But more specific to your question as it relates to vaccines, what we're doing right now for the State of Texas is helping ensure that citizens are
aware of when vaccines are available, that they can schedule their appointments appropriately, and that they're getting the appropriate alerts
to make sure that they take their vaccines on time.
KOSIK: Okay. Your earnings came out a couple days ago. Jaws dropped because they were so good. It really shows how your company has been able
to flourish during the pandemic.
SHIPCHANDLER: Yes, we are excited about our earnings, obviously. It was off of the back, a broad-based strength across our customer base. I would
say, certainly, we saw tremendous amounts of digital acceleration in a variety of industries that I think had really been wanting to digitally
transform.
I specifically point to areas like healthcare and vaccines are certainly a part of that, but so is, you know, things like contact tracing and even
just being able to contact your physician through primary care, e-commerce certainly, you know, every one of us in our daily lives is encountering
various kinds of e-commerce experiences every day.
But even education and philanthropy even, are among the use cases that really accelerated some of our results last year.
KOSIK: How permanent do you think is this shift to digital engagement?
SHIPCHANDLER: I think it's quite permanent. I think what we saw during the midst of the pandemic was that effectively, there was an acceleration of
about six or so years of digital transformation initiatives, but now that we're here, our research and I think a lot of external research is showing
that, in fact, consumers are probably not going to go back.
And if you look at certain industries and just how good and robust the experiences have been from a consumer perspective, things like an online e-
commerce engagement or things like an online healthcare engagement are very much here to stay and are, in fact, really high return experiences for
consumers.
KOSIK: And from the business side, do you think that there's enough money on the business side for them to go ahead and make this digital
transformation that they're sort of being forced into at this point?
SHIPCHANDLER: Yes, I definitely do. I mean, obviously, the pandemic accelerated a lot of these things. I mean, as soon as every one of us was
working from home, obviously these things had to be turned on, but with a certain amount of urgency.
But I think now that we're here, the dollars are there. And I think CTOs and CIOs are seeing more funding than ever from the C-suite and digital
transformation was always a top of mind initiative and now all of the dollars are there to fund it and make sure that companies are able to
thrive.
KOSIK: All right. Khozema Shipchandler, Chief Financial Officer at Twilio, thanks for your time today.
SHIPCHANDLER: Pleasure to be here. Thank you.
KOSIK: NASA's Mars rover safely landing on the Red Planet after seven minutes of terror. That story coming up next.
(COMMERCIAL BREAK)
[09:51:40]
KOSIK: Those who don't want to receive a vaccine who work in the Vatican may want to think twice. The City State's Governor says everyone must be
inoculated or risk losing their jobs. CNN's Delia Gallagher explains.
DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: The Vatican has told its employees if they don't get vaccinated for COVID-19, they risk losing their
jobs. A decree from the Governor of the Vatican City State, Cardinal Giuseppe Bertello calls vaccinations a responsible decision and says that
those employees who refuse without a legitimate health reason may be transferred or have their contract terminated.
Pope Francis is a big proponent of vaccinations for COVID-19. He himself has been vaccinated, and he has called it an ethical choice.
The Vatican has about 4,500 employees and they began vaccinations for employees and their families on January 13th. And since the beginning of
the pandemic, the Vatican has reported 27 cases of coronavirus, most of those occurred amongst the Swiss Guards who live together in barracks
inside the Vatican walls.
Delia Gallagher, CNN, Rome.
KOSIK: You have to hand it to Percy. I know what you're thinking. Who's Percy? Well, that's the nickname NASA scientists have given Perseverance,
the rover that just wowed the world with its nail-biting arrival on mars.
Percy is bristling with instruments other rovers never had as it tries to tell us whether life once existed on our closest planetary neighbor. Our
Michael Holmes has more.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Touchdown confirmed. Perseverance safely on the surface of Mars.
MICHAEL HOLMES, CNN CORRESPONDENT (voice over): Cheers from NASA's control room as the U.S. space agency lands its most daring mission yet on the Red
Planet.
STEVE JURCZYK, ACTING NASA ADMINISTRATOR: What an amazing day. What an amazing team. To work through all the adversity that goes and all the
challenges that go with landing a rover on Mars, plus the challenges of COVID and -- just an amazing accomplishment.
HOLMES (voice over): Moments after touchdown, the Perseverance rover transmits its first images from the landing site, Jezero Crater, once a
Martian lake nearly four billion years ago.
Perseverance now embarks on a mission with a packed agenda for the next few years. The rover will be searching for signs of ancient life on Mars while
also preparing for human life to one day arrive.
It will also collect rock samples that hopefully return to Earth for the very first time. This two-year mission, unlike any other, made possible by
discoveries from NASA's four other rovers on Mars.
THOMAS ZURBUCHEN, NASA ASSOCIATE ADMINISTRATOR FOR SCIENCE: Our journey has been from following the water to seeing whether this planet was
habitable, to finding complex chemicals, and now we're at the advent of an entirely new phase: returning samples, an aspirational goal that has been
with the science community for decades.
HOLMES (voice over): Perseverance also promises new perspectives on the Red Planet. The rover's microphones can share the first recordings of sound
on Mars and its 23 cameras offer better views of the surface than ever seen before.
[09:55:03]
HOLMES (voice over): Also along for the ride, a drone-sized helicopter named Ingenuity will be the first to attempt flight on another planet.
The new technology may help direct the Perseverance rover or even be a scout for future probes. As NASA's latest mission explores new frontiers on
Mars, an unprecedented quest begins.
Michael Holmes, CNN.
(END VIDEOTAPE)
KOSIK: Can't wait to see what Percy discovers. And Perseverance pays off in the stock market, too. U.S. stocks have opened higher this Friday and
remain near records despite rising bond yields and concerns that stocks are overvalued.
Financials are the best performers on the S&P right now. Chip equipment maker Applied Materials is the biggest gainer on the NASDAQ, up more than
seven percent after posting strong fourth quarter results.
And that's it for the show, I'm Alison Kosik. Stay safe and have a great weekend. See you soon.
(COMMERCIAL BREAK)
[10:00:00]
END
