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First Move with Julia Chatterley
Solid Gains for U.S. Hiring in May, but Still Less than Hoped; The President Restricts U.S. Investment in 59 Chinese Firms; Chinese Tech Giant, Tencent Bans Spanking, Fish Nets, and Politics on WeChat. Aired 9- 10a ET
Aired June 04, 2021 - 09:00 ET
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[09:00:18]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Jobs jumble. Solid gains for U.S. hiring in May, but still less than hoped.
Biden's ban. The President restricts U.S. investment in 59 Chinese firms.
And Tencent taboos. The Chinese tech giant bans spanking, fish nets, oh, and politics on WeChat.
It's that kind of Friday. Let's make a move.
A warm welcome to FIRST MOVE. Great to be with you this Friday. Let's get quickly to the breaking news before I'm taken off air this hour. It is
another disappointing U.S. jobs jolt just released numbers show the U.S. economy adding back 559,000 jobs in May. Let's be clear, that is a very
solid number. It's double what we got the month before. But once again, it's below expectations.
Solid gains in hospitality and leisure jobs, but the retail and construction sectors saw job losses. Wage growth are key for inflation
concerns, of course, took a solid jump higher, too. Good news for workers. But of course higher wage expectations could make inflation less than
transitory.
Let me give you a look at the global stock picture in light of those numbers, and this is the performance. We do see Wall Street is set to open
higher. Europe in the interim, pretty unchanged. Today's numbers not helping solve the seemingly bizarre disconnect between booming U.S.
manufacturing and services growth on the one hand, and a jobs market that's been lacking relative vigor on the other, despite company's desperate need
for workers.
The U.S. economy is still down some six million jobs since the pandemic began, too, so that context is important. It's enough, though to keep the
Federal Reserve and Chair, Jay Powell active for the foreseeable future.
And from patient Powell to bad boyfriend Musk, Bitcoin on another bumpy ride after a fresh series of cryptic Musk tweets. The first one showing an
unhappy couple and a broken heart next to Bitcoin. The next one though, showing they are making up. Lots of talk in the Twitter universe today of
when internet trolling becomes troubling with the CEO of crypto exchange Binance, saying: "Tweets that hurt other people's finances are not funny,
and are downright irresponsible." Remember Binance benefits from this kind of volatility, too.
Anyway, for FIRST MOVE, we will stick to analyzing economic data rather than the mind of Elon Musk because it would take too long.
Matt Egan joins us now with analysis on the jobs numbers. Matt, don't panic. Just walk us through these numbers. I'm calling them solid. It was
hundreds of thousands of jobs added back to the U.S. economy, even if once again, it was disappointing relative to expectations.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes, Julia, I think solid is a good way to put it. Listen, this is more evidence of a rapid recovery, albeit
one that is also a bit choppy and pretty difficult for economists to forecast.
To your point, you know, any other month when you had 559,000 jobs added in just one month, that would be amazing news. But of course, economists were
forecasting a bit more. Same thing happened last month, I think there's a little bit of something for everyone to pick out of this both the bulls and
the bears, Republicans and Democrats.
I think that on the bright side, strong overall job growth, also, the unemployment rate is below six percent for the first time since March of
2020. Of course, that was the month that the pandemic first erupted.
We also know that wage growth continues to accelerate, up two percent. That's a great thing for workers, although CEOs and shareholders might not
be that thrilled about that. After last month's gains, the United States has now added back about two thirds of the jobs lost during the pandemic.
But you know, the bad news is that that means the country is still down about seven and a half million jobs relative to before the pandemic. At the
current pace, it would take more than a year to make up all of those lost jobs.
I think clearly that the jobs market is trying to overcome a number of different challenges. Everything from the rapid recovery to the fact that
some schools are not open yet, childcare issue, elder care issues and those enhanced unemployment benefits. A lot of those issues though, Julia, will
hopefully be going away in the coming weeks and months, and perhaps by September we'll have a better sense for just how strong this jobs market
really is.
CHATTERLEY: Yes, I mean, you say, it is incredibly tough to predict what is going on in this jobs market. And hey, given the down draft that we saw
in jobs last year, the idea that it only takes a year I think at this pace to get back, we would have considered great news just six months ago, but
to your point as well, there are frictions in this market and it's still tough to see whether it is about unemployment benefits that are keeping
people out of the jobs market because when you look at the participation rate, that held relatively steady, too, and you'd hope to be bringing
people back from the sidelines, particularly given we know, there's more than eight million job vacancies.
There are openings as an economy, they are just not finding workers, and that's what businesses are saying.
EGAN: Yes, I mean, we are hearing that from businesses. I mean, I talked to the CEO of Honeywell, the world's most valuable industrial company who
said, we're having a really hard time hiring workers right now. Bank of America had put out a report about how factories are -- they are really
struggling. A lot of people are just -- they're quitting their jobs right now.
So there are problems. We're hearing that from restaurants as well.
I think that, you know, when I talked to economists, they do sort of acknowledge that the unemployment benefits, those extra $300.00. That is
probably a factor. It's hard to say just how much of a factor it is because there's just so much noise going on right now.
I mean, how do you evaluate the role of the enhanced unemployment benefits versus the fact that a lot of schools haven't been open? A lot of women
haven't been able to go to work because daycares haven't been open as well. A lot of dads, too.
So I think that it is really hard to really make sense of all that. And, of course, that is the job of the Federal Reserve meeting later this month,
they have to decide whether or not to telegraph if they think it's time to begin talking about, you know, removing some of this emergency stimulus,
and that is going to be a tough call after another noisy jobs report -- Julia.
CHATTERLEY: Patience. That's my guess. We remain patient.
EGAN: Yes, that's a safe -- that's a safe guess.
CHATTERLEY: Yes, safe bet. Thank you very much for your analysis there.
Okay, to London now, where G-7 Finance Ministers are discussing a global corporate minimum tax. The United States has proposed a rate of at least 15
percent to help discourage companies from shifting profits abroad.
Clare Sebastian joins us now with more. Clare, and the talk behind the scenes is they are going to be able to bring the G-7 nations on board, but
there's bound to be a few that dig in their heels there. The U.K., of course, fresh from Brexit wants to set their own rules. And Ireland is
another one that comes to mind with their lucrative 12.5 percent tax rate.
What are we expecting from this meeting?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, Julia, it's worth pointing out that this breakthrough that we got from the U.S. when they
proposed this global minimum tax and a mechanism whereby the world could tax the biggest multinational companies where they make their sales, not
just where they book their profits. That was a huge breakthrough.
This has led to real momentum in these talks, the likes of which we haven't seen over the past decade that the O.E.C.D. has been debating this. So we
are seeing momentum going into these talks that the Finance Ministers of France, Germany, Italy, and Spain wrote a joint letter to "The Guardian" in
which they said, you know, "This is a promising start. We are committed to defining a common position on a new international tax system."
But as you said, there is some sort of reluctance perhaps from the U.K. that we've been hearing. Rishi Sunak, the Chancellor has said that more
work is needed to be done. Today, speaking at this meeting, he said, "We can't continue to rely on a tax system that was largely designed in the
1920s." He said, "The world has noticed, and they have high expectations for what we're going to do over the coming days."
So perhaps, leaning a little bit more positive there, but still keeping his cards close to his chest. The U.K. still has one of the lowest corporate
tax rates in the G-7, around 19 percent. That is expected to go up in the coming years.
But as you say, they have been, you know, more keen to set their own agenda on this, but still going into these talks, Julia, very positive noises, and
that will all push ahead to the Leaders' Summit of the G-20 next week.
CHATTERLEY: Yes, and it's a really important point that timing is everything. You've got a U.S. government that wants to fill the Treasury's
coffers in order to try and finance its infrastructure bill or make that at least more attainable.
And of course, the E.U. that is tackling some of these big tech giants to try and sort out how much tax they are paying or not paying to be specific.
What about the possibility, and to your point of the G-20, perhaps even beyond the O.E.C.D. nations and having parallel discussions there to really
tighten the noose because that then would be potent, if tough to achieve?
SEBASTIAN: Yes, but again, we are closer than we've ever been.
CHATTERLEY: Agree.
SEBASTIAN: There are people who are calling this, you know, a real breakthrough in terms of the U.S. proposal that came in April. We will have
the G-7 Leaders' Summit next week. After that, you know, some more key dates to look forward to.
The O.E.C.D. is expected to meet at the end of June, then we have the G-20 Finance Ministers meeting in July, all of that could lead to some sort of
high level agreements and they could start to sort of flesh out the details there, and then another big date to look forward to in October, Julia, is
the G-20 Leaders' Summit in Italy.
So that is when we might expect to see a high level agreement. But of course after that, the individual countries have to go back and start to
update their laws and legislation. So, it could be a while before we start to see this take effect, but significant in the timing, of course, puts the
wind in the sails of these talks.
As you suggest, countries all need to sort of beef up their tax revenue basis after COVID to pay for the recovery and to, you know, pay down the
debt of what they've already spent on their recovery.
[09:10:15]
CHATTERLEY: Yes, pay up. Clare Sebastian, thank you so much for that.
Let's move on. Olympian, Kaori Yamaguchi declares the Tokyo Games have already "lost meaning," quote. The Olympic Committee Board members says it
is clear, public opinion has no impact on the committee's decision to move ahead with the games as Japan struggles with fourth COVID wave. Yamaguchi
also criticized Japan's slow vaccine rollout.
Meanwhile, the President of Tokyo 2020 says it's impossible to postpone the Olympic Games for a second time given the work that's been done to plan
them.
CNN's Anna Stewart analyzes the cost of cancellation.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice over): After years of preparation, Tokyo 2020 is just weeks away, a year late due to the pandemic, organizers say
the event will now cost $15.4 billion. Some estimates suggest it'll cost much more.
Opinion polls in Japan suggests a majority of the public want it canceled.
STEWART (on camera): Japan has already banned overseas spectators, which the Nomura Research Institute estimates will cost the country over a
billion dollars in lost revenue. Canceling the Games it says would cost more than $16 billion, but the think tank warns that these costs actually
pale in comparison to the economic damage another wave of coronavirus could cause.
STEWART (voice over): The IOC says its priority is to hold Games that are safe and secure. And while pressure mounts for Japan to cancel the Games,
contractually, it can't.
ALEXANDRE MIGUEL MESTRE, SPORTS LAW ATTORNEY, ABREU ADVOGADOS: In practice, the single entity that can cancel the games is the IOC -
International Olympic Committee. Because according to the Olympic Charter, the IOC has an exclusive property of the Games.
STEWART (on camera): So, this means that actually Japan can't unilaterally decide to cancel the Olympic Games.
MESTRE: If Japan, if the Organizing Committee, if Tokyo decides not to go on, on their obligations under the whole city contract, of course, it would
be not possible to undertake the Games. And in that condition, of course, the IOC would be entitled to sue those co-parties in the host city
contract.
STEWART (voice over): The IOC has insurance for Games cancellation and abandonment, which could cover part of its operational costs. But what
about its partners? The sponsors? And the broadcasters?
PATRICK VAJDA, PRESIDENT, XAW SPORTS: The main one in terms of money is the TV rights. These are different contracts now, they are so complicated.
Twenty years ago, it was very easy to answer to your question; today, it's more or less impossible, because the different TV networks both not only
one Games, but several generally speaking, three online, sometimes four, we have to take each contract one by one, and to analyze what is written in
the contract.
Sometimes it is written something about cancellation. They have to reimburse you. If not, it depends on the contract and it is a pure
contractual agreement between two private companies.
STEWART (voice over): Billions of dollars, lawsuits and insurance claims are at stake if the Games are canceled. If they go ahead, the IOC risks
breaching its own charter, which says it will promote safe sport and protect athletes who are already beginning to arrive in Japan.
The ultimate cost could be borne by those at risk from COVID-19 if Tokyo 2020 becomes a super spreader event.
Anna Stewart, CNN, London.
(END VIDEOTAPE)
CHATTERLEY: Fresh pressure on China, the Biden administration expanding the Trump era blacklist of Chinese firms banning Americans from providing
investment to those with alleged ties to the country's military and surveillance efforts.
John Harwood joins us with more. John, the message seems to be: if you thought some of these restrictions would ease under President Biden, you
thought wrong.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Julia, there are many ways in which President Biden wants to break with the behavior and practices of
President Donald Trump, but getting tough on China is not one of those things. You see him adding to the list of firms that are blacklisted from
U.S. investors, subsidiaries of aerospace firms related to the Chinese military to subsidiaries or firms linked to Huawei, who of course, the
telecommunications firm that aroused a tremendous amount of controversy over its potential links to the Chinese government and national security
problems related to that.
So Joe Biden is trying to signal that he is not going to be a patsy or soft on China. He has not lifted trade tariffs against the Chinese either. And
of course, we saw from the beginning of the administration when the Secretary of State National Security Adviser met with their counterparts in
Alaska that they are engaging in tough talk with the Chinese and trying to sort out what their policy is for the long term, but in the meantime,
they're showing a stern hand.
[09:15:23]
CHATTERLEY: But the mood music in terms of the discussion, temperament, as opposed to the content does seem to have improved. I couldn't help but look
at some of the comments that came out of Beijing on Thursday, and they described the trade negotiations or discussions as being normal
communication and the discussions between the Chinese Vice Premier between the U.S. Treasury Secretary and the U.S. Trade Representative as quote,
"professional, frank, and constructive." That does feel different -- John.
HARWOOD: That is different. And of course, President Trump was an impulsive, Chief Executive who would do things rapidly, sometimes without a
whole lot of advanced warning or preparatory work that was done.
So the Joe Biden team is going to be more measured and more considered, but some of the substance at least in the near term is going to be pretty
similar.
CHATTERLEY: Diplomatic, but tough, I think is the bottom line there, John. Thank you so much for joining us. Have a great weekend.
HARWOOD: You bet.
CHATTERLEY: John Harwood there. Okay, let me bring you up to speed now with some of the other stories making headlines around the world.
Police in Hong Kong blocked public access to Victoria Park today. That's a traditional site of vigils marking the anniversary of the 1989 Tiananmen
Square Massacre.
A police spokesperson warns that anyone trying to enter the park without permission could face 12 months in jail.
Speaking at an economic forum in St. Petersburg today, Russian President Vladimir Putin said his country's economy and employment figures are close
to reaching pre-pandemic levels. He also focused on the environment saying it's a myth that Russia is unconcerned about climate change.
Still to come on FIRST MOVE, it is not every day you put a Fintech giant and A$AP Rocky together, but payments company Klarna is welcoming a stylish
new addition to its team, we will speak to Klarna's CEO.
And to infinity and beyond, in just days. The firm that plans to 3D print rockets in record time, the Relativity Space CEO joins FIRST MOVE. Stay
with us.
(COMMERCIAL BREAK)
[09:20:06]
CHATTERLEY: Welcome back to FIRST MOVE on another jobs Friday in America. U.S. stocks set to open higher after a solid, but weaker than expected read
on U.S. jobs growth for the month of May, the great U.S. jobs machine still trying to kick into higher gear.
We did though get 559,000 jobs added back last month. Much better, of course, than what we saw in April, almost double. But as you can see, still
no real jobs number breakout from the beginning of the year despite the desperate need for workers in Corporate America.
The encouraging numbers come as a crucial time for unemployed workers, too. Enhanced benefits for the unemployed in some 24 U.S. state run out later
this month.
Tom Porcelli, the Chief U.S. Economist at RBC Capital Markets joins us now. Tom, there was all sorts of jumbling over what the jobs forecast were and I
look at your expectations, you were absolutely in line.
Tell us why you were so accurate at predicting these numbers. Where was the caution coming in?
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS: Yes, so I would love to tell you that I'm good at forecasting payrolls every month, but
that's just not the case.
I mean, it's a tricky number to forecast. There's always a lot of moving parts, and I think the challenge this month, which is the same challenge as
it was last month. I mean, we think that there's some sort of technical sort of difficulty that the BLS is having with the payroll report.
You know, like last month, as a great example, 266,000 jobs, in the context of an economy that's gaining a lot of momentum didn't make a lot of sense,
and when you look through the underlying job categories, nearly half of the job categories actually shed workers, but the top line, the 13 top line,
job categories. Again, it didn't make a lot of sense.
Fast forward to this month, we now actually have about 40 percent of the job category shedding workers. You know, retail shed workers, construction
lost workers. I mean, that doesn't, again, in the context of the things that we know about those segments of the economy, you know, this report
just doesn't -- it doesn't really go with a lot of the other labor market data that we've been getting.
So again, just as sort of a great example, ADP printed nearly a million jobs. That was from yesterday. There's a consumer confidence toward the
labor backdrop, it's actually -- you know, it is back to where it was pre- pandemic.
So everything is making a lot of sense with regard to the labor backdrop, except for the payroll report. And so I think that this number is this sort
of a big fade, actually.
CHATTERLEY: There's a few things that confuse me about what we saw this week with the data though. We saw a fall in the first time jobless claims.
We saw an increase in the number of people actually continuing to get benefits, which seemed jarring.
As you said, we've got certain sectors that perhaps could have supply bottlenecks if we are talking about construction perhaps that is shedding
workers, because the work simply isn't there, because they don't have the materials to do it would be my guess.
But we've got a record high level of job openings. So the jobs are available, like what is the friction point? Does it come down to some
degree to unemployment benefits? Or do you sort of push that off to?
PORCELLI: No, I don't. I mean, look, I think anyone that does push it off is being a little bit disingenuous. I think -- I think it is a factor. I
mean, the degree to which it is a factor, that's where I think the debate can sit.
But I don't think that there's a question that, I mean, economically thinking, people are being rational. If you're being paid more to sort of
sit on the sidelines, economically that actually makes a lot of sense.
Again, we can have the conversation and the debate about the degree to which that is happening, but I don't think there is any question that it is
happening. And in fact, the Fed's own research sort of bears that out.
If you look at the Beige Book, from just earlier this week, you know, it was littered with commentary from companies that are saying they're having
a hard time to find qualified workers. And there is sort of a great example from the St. Louis Fed, where they said they had, you know, sort of a dozen
or two restaurant companies that had a job fair, and, you know, for literally, they said for over a hundred jobs that they were trying to hire
for, and they said, less than a dozen people showed up.
So I think, you know, and again, as you read through the Beige Book going through each of the Federal Reserve districts, you get sort of a similar
sense from all of these other districts.
So I don't think there's any question that it's a challenge, you know, again, is that why, you know, we sort of like last month's report, is that
why we missed a mark by a million last month? No, I don't think so. I would be much more sympathetic to, hey, you know, we printed a million jobs, but
should it have been, you know, well, 1.4 million jobs? I think that would have been a more fair argument.
But to miss by these sort of large numbers, I think that there's something more technical going on, as I said earlier.
CHATTERLEY: Or maybe we blame overexcited forecasters as well because it is incredibly tough to predict economic data in a pandemic where we have no
real basis for comparison.
[09:25:05]
PORCELLI: I agree with that, but I would say in terms of the over excitement, but again, I would say, you know, most forecasters, and I will
speak for most forecasters, when we think about forecasting, you know, forecasting is literally built up from all of the underlying data that we
have in hand. And the underlying data that we have in hand would be suggestive of job prints closer to a million.
And so, you know, it's not -- these are not, you know, sort of random -- they're not as random a guess as we all might think. I mean, there is a
construct in place. And if you look at the preponderance of labor market data, it does suggest that you should be seeing very big job gains.
CHATTERLEY: And that's exactly where I was going to go next. Is it coming? It's just going to be back loaded. Because if you -- and I love the word --
if you take out the rational behavior as these unemployment benefits filter off, and as I mentioned in the introduction, we're going to see a lot of
states doing this. These job gains surely will kick in, they are just a few months delayed.
PORCELLI: I think that there's almost no question about that. Look, we are in, again, we're growing in -- the economy is growing at a 10 percent plus
pace as we speak. I mean, that's you know, sort of -- that's cartoonishly high growth. I mean, we've never seen anything like that in the modern day
age of the United States.
So yes, I do. I think that there -- I think that there are bigger job gains waiting for us. But again, it depends how you want to look at it, if we're
going to sort of rely solely on the BLS's version of job growth, you know, it might still be many months off.
I think instead, what we're going to have to do is use all these other metrics that I was highlighting a moment ago to sort of really get a sense
for how the backdrop is evolving beyond just this payroll report.
CHATTERLEY: So the New York Fed President, John Williams caught my attention as well, in the last couple of days. He talked about being on a
good trajectory, but he said, "We're quite a way off from reaching the substantial further progress that we're looking for." And, you know, I look
at some of the inflationary pressures, and they're the highest they've been, since the 1970s.
We've got record 8.1 million job openings, and we're quite a way off from substantial further progress. Is the Fed going to come to a crunch point
pretty soon?
PORCELLI: You know, I think substantial further progress is in the eye of the beholder. I mean, that's an unfortunate reality. And this is one of the
reasons why I'm sort of disappointed that the Fed is using that because it just -- it allows for way too much.
You get to embed your own biases into that idea. I mean, it's not a very analytical construct. You know, substantial further progress. How about
this? How about the fact that we actually did have a V-shaped recovery in the United States. If you're just looking at again, I am just talking about
this, from the numbers perspective.
If you just look at it from a GDP perspective, it was a V. I mean, we're back to where we were pre-pandemic from a GDP perspective, you know, here
again, we'll get the official Q2 number in another couple of months. But I think it's very easy to say here on June 4th, that, you know, we're now
back above where we were pre-pandemic.
You know, spending, sort of the same idea. You know, we're back to where we were. Wages and salaries, which have nothing to do with your sort of fiscal
stimulus, you know, it's now north of where we were pre-pandemic.
So I think we've actually made an incredible amount of progress. So again, the Fed wants to, you know, sort of continue to use that idea they can.
But, you know, I think that we just need to find it and I just think we've done a really poor job of that.
CHATTERLEY: Yes, I think that economically to get to the position we're in is absolutely phenomenal, but I agree with you, too much leeway for
interpretation in terms of some of the terminology perhaps being used.
Tom, great to have you on the show. Thank you.
PORCELLI: Yes, exactly.
CHATTERLEY: Tom Porcelli there, Chief U.S. Economist at RBC Capital Markets. Have a great weekend. We're back after this. The market open is
next.
(COMMERCIAL BREAK)
[09:31:56]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. markets are up and running on the last trading day of this holiday shortened week and we've got a higher
open for U.S. stocks as you can see on news that the U.S. employers added a weaker than expected 559,000 jobs last month. It is still a solid number,
let's be clear. Steady rise in net jobs growth could allow the Fed to delay taper talk and that is good news for stocks, but a jump in wage costs could
spell trouble for firms later on down the line, as we were just discussing.
Meanwhile, the leading Reddit names under a bit of pressure, no, well, they are gaining once again. AMC had a stunning day of volatility yesterday with
investors reacting to the company's plans to issue a ton of new stock. Investors are worried about share dilution and may consider that an AMC - A
Major Concern.
GameStop rising some two percent premarket. They were lower. This is the fun and games of talking about these stocks. They literally change in a
moment. Now, don't shed a tear for AMC, however, its shares still up some 90 percent so far this week, and up 2,300 percent year-to-date. Wowsers.
It's also not a friendly Friday for Facebook, the social media giant now facing two separate European antitrust investigations into whether the
deluge of consumer data that it gathers gives an unfair advantage in online advertising.
Facebook says it will cooperate fully with the E.U. and the U.K. probes saying the investigations are, quote, "without merit."
All right, let me take you to Latin America now where countries are facing sluggish vaccine rollouts and limited supplies and now surging numbers of
infections. Stefano Pozzebon reports from Bogota on the growing vaccine divide.
(BEGIN VIDEOTAPE)
STEFANO POZZEBON, JOURNALIST (voice over): Tens of thousands of people staged protests across Brazil this weekend, demanding President Jair
Bolsonaro was removed over his handling of the coronavirus pandemic.
Brazil has recorded the third highest number of cases in the world after the U.S. and India and is now facing a possible third wave of COVID-19.
On Wednesday, Brazil reported its second highest number of new infections in a single day, but the entire region is struggling. The Pan-American
Health Organization sounding the alarm as Central America reported last week, the highest number of COVID-19 deaths to date, and the doubling of
new cases in Belize, El Salvador and Panama.
As Europe and the United States relax international travel restrictions, Latin America is bracing for more cases, and there aren't enough vaccines
to go around.
In Central America, countries like Guatemala and Honduras have only fully vaccinated less than one percent of their population, in sharp contrast
with the millions fully vaccinated up north.
POZZEBON (on camera): What is particularly worrying even with cases numbers rising is that some restrictions are being lifted prematurely, in
some cases, to try to help a battered economy.
But with more people on the move, experts fear the virus could spread even further.
POZZEBON (voice over): Colombia's capital, Bogota, is set to lift most restrictions next week.
CLAUDIA LOPEZ, MAYOR OF BOGOTA, COLOMBIA (through translator): It sounds completely contradictory and frankly from an epidemiologic point of view,
it is completely contradictory to reopen the city when ICUs are at 97 percent, and new cases are growing.
But from a social and economic point of view, with unemployment disproportionately affecting youngsters and women, it is the right thing to
do.
[09:35:18]
POZZEBON (voice over): Brazil is now preparing to host a major football tournament, the Copa America, which could become another super spreader
event in a country where the situation is far from under control.
The only solution, experts say, is to boost vaccinations.
The Biden administration on Thursday announcing plans to share at least 80 million COVID-19 vaccine doses globally, making Latin America a priority.
JAKE SULLIVAN, U.S. NATIONAL SECURITY ADVISER: Finally, I want to talk a little bit about where we are sharing these first 25 million doses. We're
sharing them in a wide range of countries within Latin America and the Caribbean, South and Southeast Asia, and across Africa in coordination with
the African Union.
This includes prioritizing our neighbors here in our hemisphere, including countries like Guatemala, and Colombia, Peru, and Ecuador, and many others.
POZZEBON (voice over): But with just six million doses allocated so far across more than a dozen different countries in the region, even that
effort is just a drop in the ocean, and the case is only destined to keep piling up.
Stefano Pozzebon, CNN, Bogota.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHATTERLEY: Building the future of humanity in space -- I am getting excited already. That's the mission statement of Relativity Space, which
says it is disrupting 60 years of aerospace by building a factory that can make rockets in days rather than years. How? Well, believe it or not, with
a 3D printer.
Relativity Space's cofounder and CEO, Tim Ellis joins us now. Tim, fantastic to have you on the show.
I know Relativity is about way more than just rockets, but this is very exciting. Just explain the capabilities that you have.
TIM ELLIS, COFOUNDER AND CEO, RELATIVITY SPACE: Yes, of course. Well, glad to be on and share more. So Relativity was founded five years ago to 3D
print entire rockets.
So not only are we designing and building the world's first fully 3D printed rocket, we've actually had to build the world's largest metal 3D
printers. So these are machines that can print up to 30 feet tall today, over 16 feet wide. They're really huge.
It is software defined manufacturing, and that is really what we see 3D printing as. We see it as an automation technology that transforms
traditional aerospace factories that have really not changed over the last 60 years with fixed tooling and hands-on labor building products one at a
time with hundreds of thousands to millions of parts and we're 3D printing our rockets, which really transforms that into a totally new tech stack,
much like electric vehicles underwent with gas internal combustion, to electric.
[09:40:18]
CHATTERLEY: I mean, this is astonishing, I'm just mesmerized because we're showing pictures, video of the rocket being built here. And as you said, I
think, 32 foot tall, 16 foot wide, what does the 3D printer like that cost and then you can talk to me about how it streamlines and reduces the cost
of creating a rocket in the first place relative to what we've always had to use in the past.
ELLIS: Yes, of course, so the 3D printers themselves actually don't cost very much. There's a lot of know-how that goes into it. At Relativity,
we've actually had to invent our own custom materials as we have a material science team that developed these alloys for 3D printing.
We develop our own software. We use machine learning and statistical data correlation to actually make sure we can 3D print a rocket and it works.
We've done over 500, fully 3D printed rocket engine tests to date, as well as actually building our first orbital flight rocket this year.
So the launch vehicles we're building have a hundred times fewer parts than a traditional rocket. And we're actually able to build that from raw
material coming in the door to fully complete in only 60 days once we're fully operational with the factory.
So it really is a totally different way of building and I was originally inspired. I came from Blue Origin, a cofounder came from SpaceX. And we
actually want to 3D print the industrial base of humanity on Mars that's why we founded the company, as we really see 3D printing as an inevitable
technology, not just for rockets and aerospace on Earth, but will actually build the future of humanity in space and on Mars.
CHATTERLEY: Just minor ambitions there. But are you saying you're at the point where you can build these in 60 days, that you have the capabilities
now? Because to your point, if you do go to another planet and want to build infrastructure, then you are going to have to do it incredibly
quickly. So I guess your ultimate ambition, you're definitely heading in that direction with this kind of technology.
ELLIS: Yes, that's right. So today, for this first rocket, we're at about three or four months. So we really don't have that far to go to get to 60
days. In a traditional rocket, a lot of people don't know this, but it actually takes on the order of 12 to 18 months traditionally, and normally
rocket has hundreds of thousands of individual piece parts, all assembled by hand.
So actually, that's where 3D printing is an automation technology, and Relativity, which we've raised more than $700 million to date, and we have
a team of 400 people making this happen in launch sites at Cape Canaveral Air Force Base in Florida, we're only the fourth company to ever get a
launch site at Cape Canaveral. We also control about a third of NASA's Stennis Space Center exclusively for the next 20 years where we do all of
our rocket engine and vehicle testing.
And so it's really been a pretty amazing journey over the last five years, and we are also the most pre-sold rocket company in history before ever
launching a rocket. So not only are we 3D printing rockets, we've really rallied key customers in presales ahead of ever launching, as well as
recruited most of the team that actually built the first wave of private space companies over the last two decades to really, across our whole team
of 400 people that actually launched well over 10,000 rockets to date across all of the individuals.
So really, very experienced team now actually doing things in a completely disruptive, new way after having had so much experience landing and
launching rockets and docking at the space station over the last two decades.
CHATTERLEY: Are you disrupting the disruptors? As you said, you came from Jeff Bezos's Blue Origin. You also have SpaceX expertise. How healthy is
the competition with your former employers, particularly in areas where you cross and you do compete, which you clearly do?
ELLIS: Yes, well, it's been fantastic. I've remained close with Jeff through the years ever since working for him at Blue Origin. And of course,
I think SpaceX's mission of going to Mars and making humanity multi- planetary was one of the original inspirations behind founding Relativity.
So I actually think there needs to be dozens to hundreds of companies working to make Mars possible in our lifetime. But really, it was, for the
first 13 years of SpaceX's existence, it was really just them. And so that was the inspiration, it is seeing them land rockets and dock with the Space
Station, but realizing that they were the only company in the world that wanted to go to Mars and make humanity a multi-planetary even after all of
that progress.
So I felt 3D printing was inevitably required to actually make that future happen. And Relativity could be the company that actually does that in our
lifetime, and so that was a big part of the inspiration, it was actually joining them on the mission, not just competing against them.
CHATTERLEY: Tim, there are people working in other industries? What do they need to come and work for a company like you or there are students at
University who are thinking about going to University? What do you need to be studying, very quickly, today in order to come and work for you guys?
Not that I'm thinking about it? Maybe I am.
[09:45:13]
ELLIS: Yes. Of course.
CHATTERLEY: What should I be studying?
ELLIS: Yes, of course. So it's not just engineering skills, although that's extremely important. It's really finding people that are brilliant,
and also have high EQ. So we care a lot about people that learn really, really quickly. They have drive. They really are mission focused and care
about the mission.
And I think ultimately, having that kind of attitude of willing to learn, super curious, really, really smart, we can actually train you on how to
design rockets and the 3D printing, no one has ever done in the world. So we're already pioneering that in a way that really, we just need the raw
ingredients to be successful. And then we have enough experience on the team that you can learn very quickly by joining Relativity.
CHATTERLEY: Literally, be prepared to be on the frontier of technology and science, which is awesome.
Tim, great to have you with us. Thank you for explaining what you're doing and come and speak to us soon.
Tim Ellis, Thank you very much.
All right, we're back after this. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. It's not enough that Sweden disrupted buying furniture and clothes with IKEA and H&M, another
Scandinavian export has taken aim at how we pay for them.
Shopping app, Klarna allows users to buy items and pay later in installments. Now, when we last spoke with the CEO in December, it was
already Europe's most valuable Fintech worth $10 billion. Now, it could be up to three times more. It can count rapper, A$AP Rocky as its newest
investor, but rumor has it, a certain Japanese tech giant could soon push the valuation even higher.
The CEO of Klarna, Sebastian Siemiatkowski is once again with us. Sebastian, fantastic to have you on the show, much to talk about, but we
have to ask the burning question first. Is Softbank, a new investor in Klarna?
SEBASTIAN SIEMIATKOWSKI, CEO, KLARNA: Well, it is official that they are an investor in Klarna. Yes.
CHATTERLEY: A bigger investor.
SIEMIATKOWSKI: Well, we will find out.
CHATTERLEY: You're not going to be pushed on that. But you are in growth mode and you are open for more investment. Can we ascertain that?
SIEMIATKOWSKI: Well, yes, look, I strongly believe that this decade is going to be the disruptor of retail banking. I think, it is, you know, we
are seeing consumer starting to adopt neobanks. We're starting to see the early signs.
It reminds me a lot -- you know, I've been doing this for 16 years, and I was at the early days of e-commerce, and I remember those early signs when
people were still like, nobody is going to buy clothes online. But those early signs, I see the same things happening now in retail banking.
So obviously with that in context, for Klarna, who wants to be one of those global retail banks that you know, we will emerge out of this as the global
supplier for these types of services to consumers and wants to be part of disrupting this industry. It makes a lot of sense right now to raise money
and invest further in expansion and kind of for this opportunity that is there.
[09:50:03]
CHATTERLEY: Yes. I mean, it makes me laugh when we talk about startups and you're like, yes, we're a virtual overnight success that's been going for
16 years, and we've been growing this business for a long time.
But I did see in some of your advertising work in the U.K., and we can talk about that. You described yourself is the fifth largest bank and that
raised some eyebrows. Just talk to me about how you're calculating that because clearly, that ties right to your bigger ambitions here, which is
disrupting the banking model that is still prevalent in Europe and obviously beyond?
SIEMIATKOWSKI: Sure, I mean, we think that like, if you look at it, we have about 250,000 merchants worldwide currently that promote the
availability of Klarna as a way to pay, as a better way to pay, and you know, other options. And what that allows us to do is to create a kind of a
first relationship with a customer. They try us out, they do it for a single payment online, they like the services.
But what we've seen in Europe is that, once they, you know, have been trying for an hour, then like the service, and they see the value of it,
things like they can see, for example, digital receipts, the images of purchases that they bought, you don't see that on a credit card statement,
you barely understand what you purchased.
So there's a lot of these nice features to it. And then when you start discovering that, we actually move them from just being a single payments
user to actually being a full bank account user. So we have over half a million plastic card issues. We had salary accounts, bank accounts in our
European business that is doing extremely well.
So that's kind of like a very different -- if you think about like how you and I first got our first bank account, we went into the bank, we put a
suit on maybe or something, looked -- tried to look a little bit professional and grownup. And then we were like, please, please, please,
can I become a customer. This is different.
Like customers try us out, they like it. And then we offer them the ability to use more and more of our services. And so with 90 million users
globally, that makes us one of the largest banks.
Now obviously, currently, not all of these users still use all of our products, but hopefully, we want them to do that and we want them to
discover the value that we can bring to them.
CHATTERLEY: How quickly is that growing, by the way, where they go from using the buy now pay later function to actually adopting more of the
capabilities that you're providing?
SIEMIATKOWSKI: I mean, that's growing at a very rapid paced. So we've seen that, you know, once people find out that they like this product and want
to use it, for example, you know, as an example, we have 34 million app downloads, right, which is good representation. So 90 million using it
active, 34 million are actually using the app for all of their online purchases. So that transformation happens quite quickly.
CHATTERLEY: You had tech issues in in recent days. And you came out and said, look, it was a self-inflicted issue and we're addressing it really
quickly and we can talk about that.
But what I'd also like to talk to you about more, perhaps is some of the cyberattacks that we've seen, and whether it's the handling of data or
privacy or just being an increasingly large Fintech across the world.
How do you view cyber risks? And how do you protect the company from those external threats? Because the bigger you get, the more alluring perhaps
locking up the data is and charging you for it?
SIEMIATKOWSKI: For sure. And I think that look, it's obviously a growing threat and we invest heavily both in people in confidence in having, you
know, the right people on board and the technologies and so forth. But it is an issue, right.
And I think all large companies are, you know, challenged by the development of this. And the only thing you can do is, you know, try to
make sure that you're one step ahead of the bad people.
CHATTERLEY: Yeah, and I very quickly want to mention A$AP Rocky, rapper, designer, producer, became a shareholder. And he took over the role of CEO
for a day, how was your day off, Sebastian?
SIEMIATKOWSKI: It was amazing. I was -- I haven't been off for 16 years, so it was quite nice. And there is nobody I can imagine better to take over
for a day.
CHATTERLEY: Is he making big changes?
SIEMIATKOWSKI: Yes, I think look, I think what was really nice when I spoke to him, it was also about we really align on one thing, right? And
that is that if you look at this credit card industry, it is actually one of the most effective redistribution of wealth that exists in the U.S. It
takes $70.00 out of the pockets of low income households, and puts $700 to loyalty points into the pockets of high net worth individual households.
And so, you know, giving an alternative to that and buy now pay later presents an alternative to that where it is paying for and it is equal for
everyone, it doesn't do the same thing. I think that that was something that he really, you know, connected to and that we saw an equal interest
in.
CHATTERLEY: Resonated with him. Sebastian, great to have you on. Come back soon, please and we'll take more time. Sebastian, the CEO of Klarna there.
SIEMIATKOWSKI: Thank you.
CHATTERLEY: Thank you so much.
Okay, let's move on. Not a question we ask every day, but what do fortune telling and placing undergarments on one's head have in common? Well,
thankfully, thankfully, Paul La Monica is here to answer this one, Paul, also fishnet tights. They're also banned. Talk us through this story. This
is WeChat making some changes.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes. Exactly, Julia, those examples you just gave are some of the many things that WeChat owned by Tencent now
is saying you cannot do on their live streaming video platform, cracking down on content that could be considered vulgar, offensive or low quality
in their words, which obviously, this program would not violate any of those standards for WeChat.
[09:55:18]
LA MONICA: But it is very fascinating because I think, there are a lot of concerns about the quality of user-generated content, not just in China
with WeChat, but also on TikTok, google owned YouTube. So it is going to be interesting to see whether or not U.S. social media companies enact similar
policies or if this is something we're seeing in China, which is clearly more restrictive when it comes to managing social media and what users can
do.
CHATTERLEY: Yes, no spanking, steady on. No nose picking, no wearing underpants on your head, no appearing in a wrapped towel. No wrapping
yourself up in a towel and appearing.
There is an important side to this though, as funny as that was, and that is, there were other things that were being cracked down on and every
social media giant is trying to police content to some degree, but here discussions of things like politics where maybe this was a forum for
discussion of those kind of things also being cracked down on.
LA MONICA: yes. I think it's going to be very interesting to see what WeChat really cracks down on more aggressively with regards to this new
policy. It's one thing to say, yes, you can't pick your nose on camera because at the end of the day, private companies that want to generate ad
revenue realize that low bar is not necessarily going to get you revenue, but if you are going to crack down on political speech, that is not good.
CHATTERLEY: Yes. In the interim, Paul, no more fish net tights. Shame.
Paul La Monica, thank you so much. I know, you're going to suffer with that one.
Have a great weekend, Paul. Thank you.
That's it for the show. Stay safe. Have a great weekend.
And "Connect the World" with Becky Anderson is next.
(COMMERCIAL BREAK)
[10:00:00]
END
