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First Move with Julia Chatterley
Hong Kong's Leading Pro-Democracy Newspaper Forced to Close; From China to Israel, the Delta COVID Variant Impacts Reopening; We are on the One Month Countdown to the Tokyo Olympics. Aired 9-10a ET
Aired June 23, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:20]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here's your need to know.
Forbidden fruit. Hong Kong's leading pro-democracy newspaper forced to close.
Delta force. From China to Israel, the COVID variant impacts reopening.
And going for gold. We are on the one month countdown to the Tokyo Olympics.
It's Wednesday, let's make a move.
Welcome once again to FIRST MOVE. A fascinating week, already tech bulls are back celebrating, cryptos' wild rides are accelerating, while Tinder
thinks mating needs innovating with video dating.
And I have to mention, team England as well, while I'm at it. No need for berating for a change following yesterday's Euro 2020 football win against
the Czech Republic. England, now in the final 16 -- yay, go England. Miracles never cease.
Wall Street meanwhile, eventually, I get there, invigorating. The NASDAQ hitting a fresh record yesterday and stocks not far from records premarket
right now, take a quick look. Thanks to the repetitious nature of the Federal Reserve, Jay Powell, pacifying once again on prices, saying that
the pricing pressures, the inflationary pressures won't last.
Notable gains too for the FAANGs and a Windows wonder, Microsoft shares are at record highs giving the tech giant a $2 trillion market cap for the
first time ever. Amazon close to new records, too, despite reports that regulators will scrutinize its deal to buy MGM Studios. Another battle for
Bezos, the U.S. Congress specifically the House will today consider a whole host of bills to limit the powers of Big Tech.
The real question here is though, do those bills ever see a vote in the Senate and that will be key, of course.
The Bitcoin bungee jump continues, meanwhile, back above $30,000.00 and positive again for the year. Well above $30,000.00 as you can see there,
and other big crypto names are higher today, too.
Europe, meanwhile, stocks, they are softer despite new numbers showing bumper business activity this month. Asia stocks, meanwhile, mixed with
gains in tech giants, Alibaba and Baidu, sparking a nice rally over in Hong Kong
And we'll stay in Hong Kong to begin the drivers. China's tightening grip on Hong Kong claiming a very high profile victim the biggest pro-democracy
newspaper, "Apple Daily" will now cease publishing.
Ivan Watson has more for us from Hong Kong. Ivan, great to have you with us. This paper, long been known for its willingness to challenge and to
criticize power -- no longer.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right. The newspaper, "Apple Daily" and we're here at the entrance to their newsroom,
their offices, has announced that it is effectively shutting down, that its final print edition will be printed and published tonight, ending 26 years
of operation here in Hong Kong.
And the reason being, according to the management is, quote, "Due to difficulties in manpower and scarce resources." And that's because in this
very lobby, last week, you had some 500 Hong Kong Police come through raiding this place, arresting top executives. And there's another arrest of
a journalist at "Apple Daily" reported this morning by the Hong Kong Police, that they are all charged, the suspects, with breaking the national
security law.
They are being accused of inciting foreign governments to impose sanctions on the Hong Kong and Chinese leadership in the articles that they
published. The authorities in Hong Kong insist that this is not targeting a newspaper that criticizes the government because of its journalistic work,
they are accusing the newspaper and its executives of effectively treason.
Take a listen to what Hong Kong's Chief Executive said earlier this week.
(BEGIN VIDEO CLIP)
CARRIE LAM, HONG KONG CHIEF EXECUTIVE: Don't try to accuse Hong Kong authorities for using the national security law as a tool to suppress the
media or to stifle the freedom of expression.
(END VIDEO CLIP)
WATSON: But that's exactly what the British Foreign Secretary has said. It is exactly what the European Union has now accused the Hong Kong
authorities of. It's exactly what press freedoms organizations are saying that this is crushing press freedom in this city, which is already under
fire. And you have to take into the broader picture here, Julia, that in the last couple of months, most of the political opposition, the organized
political opposition in this country has been -- city rather -- special administration zone -- region -- has been charged with a variety of
different charges, including the national security law.
[09:05:26]
WATSON: So, what we are seeing is a pattern of the crushing of forms of dissent in this city, even if the authorities insist that that is not what
they're doing, de facto, when you look at a society and the newspapers are being shut down and the opposition voices are being rounded up, that is a
crackdown, that is the crushing of freedom of expression and dissent, which are supposed to be enshrined in Hong Kong's local Constitution -- Julia.
CHATTERLEY: Yes, Amnesty International, the blackest day for media freedom in Hong Kong's recent history. I think to outsiders, it's very clear what's
going on here, Ivan. Thank you for that report, Ivan Watson in Hong Kong.
Now to Mainland China, where officials plan to keep pandemic border restrictions in place for another year, that according to "The Wall Street
Journal." Some big events are slated for the next year, the Winter Olympics in Beijing in February, and later on, the Communist Party Congress.
David Culver is live in Shanghai for us. David, and whether the Olympics or not, and we've seen the challenges that Japan has had, of course,
maintaining these Olympics, that transition of power once in a decade, nothing -- nothing challenges that, nor is allowed to.
DAVID CULVER, CNN CORRESPONDENT: And you have to put in context, Julia, what we have experienced in here for the past 12 plus months, and that is
life, basically pre-COVID, near normal. And so to maintain that, I think they're beginning to realize that it's not as easy as opening up the
borders.
In fact, that realization has been in play as they've continued the strict restrictions on the border. Anybody who has a certain visa is limited to
come in, and once they come in, they have to go through at least 14 days of quarantine; in some cities, it's 21 days. They have to provide those
negative tests. They have to have a Chinese vaccine.
There's a lot of red tape they have to go through, and those are likely to stay in place going into 2022. And then you start to look at the
benchmarks, well, if you consider January 2020 have been when the Wuhan lockdown was put in place, now you're looking at more than two years that
this country will have been essentially sealed off from the rest of the world.
And you're right, those are two huge events that they're concerned about. And it's about image, in part, especially if you consider what's happening
in a couple of weeks from now, and that is marking the 100 years of the founding of the Chinese Communist Party. So, they want to make sure that
things stay a certain way, that life here resembles near normality, and to do that, they're going to keep these restrictions according to "The Wall
Street Journal."
And we've been hearing murmurings as well from our diplomatic sources here that this is likely to be the case going into 2022. And so you're talking
about perhaps an Olympics that's going to be pared down a bit when it comes to spectators, or whoever they are going to allow into the country. They
haven't released specifics on that quite yet, Julia, but we do imagine that there will be significant limitations if they are trying to continue these
restrictions and keeping them in place, because you have to imagine a lot of folks aren't going to want to go through that quarantine process, not to
mention all the other requirements that are going to be in place to come into this country.
CHATTERLEY: Yes, I mean, two weeks is prohibitive, and to your point, two years, potentially just mind blowing, what we've been through. Very
quickly, because there were sort of question marks about the speed of the vaccine drive that was taking place in China. I believe that's now
accelerated.
I read this week, Goldman Sachs is saying 80 percent of the population could have at least received one vaccine dose by December of this year.
What are you hearing in terms of potential timing? Because this will play into this, surely, too.
CULVER: Right, and you're obviously looking at a country that has 1.4 billion people. And so, the rollout is significant and to hit a billion
doses has been a major milestone, but they need that 80 percent for herd immunity. At least, that was the initial projection was that, perhaps it
was 70 percent. Now, it's been bumped up to 80 percent, that's likely to happen at the end of the year.
But the real concern is going to be the effectiveness of these vaccines because they are specifically using the Chinese vaccines, the most
predominant here have been Sinovac and Sinopharm, and both of those have rolled out, and while they have been for the most part seemingly effective
within Mainland China, you also have to consider what's been playing out here in Mainland China, and that is the strict contact tracing, the
lockdowns that happened for cluster outbreaks, as well as the mass testing.
So, then you go to other countries and they've had some issues with these vaccines, or at least it seems they are not as effective, but they don't
have those same social circumstances, and even the same attitude towards some of the social distancing in place that has been very much a part of
life here for now, more than a year -- Julia.
[09:10:13]
CHATTERLEY: And will continue. David, thank you so much for that. David Culver, thank you.
All right, the one month countdown begins to the Tokyo Olympics. Organizers in Japan are pushing full speed ahead despite ongoing pressure to delay or
cancel the Summer Games.
Selina Wang is live in Tokyo for us. The one-month countdown begins, Selina and the protests continue. I know, you were again at a protest again today
with people saying this is simply not safe, and it shouldn't go ahead. What were people saying to you today?
SELINA WANG, CNN CORRESPONDENT: Yes, Julia, exactly one month away and organizers actually told me they had the biggest turnout yet, at least 850
people. I'm standing in Central Tokyo, they were just marching along this big street.
And when I was speaking to protesters, they were scared and angry. So, much emotion in their voices. They told me they're scared that these Games will
lead to a rebound in COVID-19 cases. A lot of anger that the government is putting so many resources towards a global sporting event, when they say so
many in Japan and around the world are still struggling.
And right now, the vaccination rate in Japan, while it is picking up, still less than eight percent of the population fully vaccinated. When I spoke to
several protesters who said they still have not been able to get a vaccine, and they're frustrated that the government is prioritizing Olympic
participants ahead of the broader public.
You know, also, many people were chanting holding the sign saying, cancel the Olympics, put the money towards COVID-19. They are also protesting the
billions of public funds, billions of dollars of public funds being put towards the Olympics. These are set to be the most expensive Summer Games
on record at more than $15 billion.
Now, while some polls show that opposition to these Games in Japan may be slightly weakening, poll after poll still shows that the majority in Japan
do not want the Games to go ahead this summer. They are scared that it is going to cause a spread of more COVID-19 cases in Japan, and again, Julia
just so much emotion from the protesters here today.
CHATTERLEY: Yes, understandable, I think in this case. Warmup countdown begins.
Selina Wang, thank you for that.
All right, let me bring you up to speed now with some of the other stories making headlines around the world. Israel's new Prime Minister is calling
for fresh coronavirus restrictions after a new outbreak of the delta variant.
Naftali Bennett is urging people to avoid nonessential travel, wear masks, and vaccinate their children. He says the country has enough doses for
everyone, but that they are set to expire in July.
In the United States, the delta coronavirus variant now makes up more than 20 percent of all COVID-19 samples tested, that, according to the nation's
top infectious disease expert, Dr. Anthony Fauci.
That proportion has doubled in the past two weeks. CNN senior medical correspondent, Elizabeth Cohen joins us now.
Elizabeth, great to see you with us. What we're clearly seeing here is the delta variant becoming a rising proportion of cases all around the world.
And here in the United States, as I mentioned, what do people need to know about this, whether they're vaccinated or not?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT Julia, you can think of the delta variant -- this is the variant that was first spotted in India --
as sort of the newcomer on the scene that appears to be a little bit smarter than the variants that preceded. These variants, they get smarter
with each new iteration.
And so let's take a look at what the delta variant has done in the United States, and you're seeing similar trends in other countries as well.
If you look at late April, early May, it constituted only 1.2 percent of all the circulating virus. All the virus that was in the United States,
only 1.2 percent with this delta variant. Then by mid-May, it was 2.7 percent. And then by late May, early June, it was almost 10 percent. That
is a huge, huge difference.
And now Dr. Fauci is saying it's actually 20 percent. That is a huge difference. You can see how smart this virus is, you can see how quickly
it's growing. And so what people need to know, as you said, whether they're vaccinated or not, is that the vaccination works against this variant. Does
it work quite as well as it did against previous variants? No, but still, it works in -- you know, in the 90 to even 90 percent up against severe
disease, and that is definitely good news, all the more reason if you can get vaccinated, do.
CHATTERLEY: And we always end up making this same point, I think, and we will continue to do so.
Something that I've been reading about though, in recent days is a delta plus variant. And some of the articles I've read are emanating from India,
which of course, where we see cases dropping, but they've had real challenges with the variant initially identified there, delta. Can you give
us any insight about delta plus?
[09:15:00]
COHEN: Right. Julia, when you hear the "plus," right, delta plus, you make it think oh, it is delta, but even worse. Delta on its own is more
transmissible, about 60 percent more transmissible than the variant that preceded it, the main variant, which is the alpha or U.K. variant. It also
appears to maybe be more virulent, it's more likely to make you land in the hospital.
Delta plus is not necessarily even worse, it's just another version of delta. Could it be worse than delta? Sure. Could it actually be maybe a
little bit tamer? That's also possible. Could it be about the same? Sometimes a variation in the DNA can mean really very little, and sometimes
it can mean a lot.
So, the World Health Organization says they are following it, they're looking at it. There haven't been that many cases reported out of India.
But as we've seen, you can go quickly from having just a few cases or relatively few, to it being dominant. So, everybody is keeping an eye on
this delta plus, to see if it's a variant that really matters.
We know delta variant matters; the plus part, a little bit unclear.
CHATTERLEY: Yes, so we keep an eye on it. In the meantime, if you can't get a vaccine, get vaccinated. That's the bottom line.
COHEN: Amen.
CHATTERLEY: Elizabeth Cohen, thank you so much for that. Amen.
We're back after this. Stay with FIRST MOVE.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. On Wall Street, futures edging higher with the NASDAQ beginning the session at fresh records. Bond yields
are also behaving, too. All this, after perennially patient Jay Powell said once again yesterday that he believes U.S. inflation pressures will pass.
Fed Chair Powell's outlook helping boost reflation names like the banks, they're awaiting results, too, a Fed stress test here in the United States.
Banks are expected to pass with flying color, which could lead to dividend hikes and a rise in share repurchasing, too.
Energy shares on the rise, as well as oil prices gush to more than two-year highs. U.S. crude supplies falling by over seven million barrels last week,
even as demand soars due to reopenings.
And from petrol to philanthropy, Warren Buffett announcing today that he is resigning from the Bill and Melinda Gates Foundation, where he was a
trustee. No reason given, but Buffett notes that he has already resigned from all corporate Boards, except for his Berkshire Hathaway.
Okay, let's move on. Regeneron's COVID-19 antibody therapy has been cleared for use in the form of an injection by U.S. regulators. The new
authorization also allows it to be given in lower doses. The drug also provides a glimmer of hope for people with compromised immune systems.
Regeneron says it may trial the use of the drug as a therapy for this group who may fail to get antibody responses from vaccines.
[09:20:10]
CHATTERLEY: Joining us now is George Yancopoulos. He is President and Chief Scientific Officer of Regeneron. Always fantastic, sir to have you on
the show.
I want to start by talking about some of the results that you've had from trials in the U.K. with regards people who haven't produced the kind of
antibodies we were hoping for, and this treatment for those that are hospitalized. Talk me through this because this seems very exciting.
DR. GEORGE YANCOPOULOS, PRESIDENT AND CHIEF SCIENTIFIC OFFICER, REGENERON: Yes, this is the first antibody therapy or antiviral therapy of any kind
that has definitively shown the ability to prevent death in patients who are hospitalized. So, this is a really important result, and the benefit
is, as you said, largely in the people who fail to make antibodies on their own.
We know how important antibodies are to fight the virus. Unfortunately, some people are late in making their antibodies or don't even make them at
all. And this can really substitute it, we're giving you antibodies, we're giving your monoclonal antibody cocktail. And it substitutes it seems like
for the natural antibodies, and it can save lives.
So now, we've shown in large Phase 3 trials, it can prevent COVID-19 very efficiently. It can in early patients who are out of the hospital, can keep
you out of the hospital, keep you from getting very sick. And now, in this collaboration with the U.K. recovery system, we've now shown that it can
prevent death in patients who are advanced stages and hospitalized.
CHATTERLEY: I mean, this is incredible news. I also read that you're potentially talking about entering or providing this antibody cocktail for
research purposes in the United States, too, for the millions of people that are immunocompromised, just to see again, if you can perhaps achieve
what you've seen in these U.K. trials in the United States.
Are you doing that? Can you tell us where you are in terms of perhaps providing this antibody cocktail to test in the United States, too?
YANCOPOULOS: Right, so right now, as you said, there are unfortunately millions of people who are immunocompromised, and they don't make
antibodies when they're given, for example, the vaccine, or if they get the actual infection. That puts them at much, much greater risk.
And all the data right now suggests that our monoclonal antibody cocktail can substitute for these people's inability to make their own antibodies.
So, we are making it available under compassionate use to such immunocompromised individuals. And we think the best way to give it to
these people is to give them in advance, to give it prophylactically, to give it once a month to prevent them from ever getting infected.
So, it's as if they've gotten a great vaccine. They've just gotten these antibodies in a bottle instead of antibodies from a vaccine. You can dose
them once a month, and they should be, all the science would say, as protected as somebody who has gotten a vaccine.
We are hoping -- we are discussing this with the F.D.A. to see if we can make it more broadly available under for example, an authorization for
these immunocompromised people who are not mounting responses to the vaccine.
CHATTERLEY: But at least those trials are taking place right now, so there is hope.
YANCOPOULOS: Yes, there is hope. And right now, it's just a matter of discussions with the F.D.A. to see whether they agree that the data is
supportive, that it should be used more broadly for this population.
We believe the data is there. We believe it should be used broadly in this population to protect them, and now as I said, we're discussing with the
F.D.A. to see whether they will agree that the data is sufficient to make it broadly available to these patients under an authorization.
CHATTERLEY: Now, what's been disappointing is, we've not seen this antibody cocktail used as much as perhaps it could have been for a number
of reasons. And hopefully, and you can tell me, whether you believe now that the relaxation of how this is used, perhaps will help. It can now be
given as an injection, which I assume allows doctors and nurses to give this rather than it being an infusion, and also a lower dose as well. So,
that also maximizes the number of people we can see helped.
YANCOPOULOS: Well, I think it will certainly help that a simple subcutaneous injection, very similar to how you get a vaccine can now be
used to administer this cocktail. So, it's a lot easier to give it, but unfortunately, it really is a true human tragedy.
As you said, it hasn't been used to the extent it should have been used based on the data. This has cost tens of thousands, if not hundreds of
thousands of lives. And what we really have to understand is that many more lives are still at stake even though the levels for example in the United
States of the pandemic they're going down, but still, about 400,000 people a month are still getting infected, about 9,000 or more are dying a month.
We can keep tens of thousands from getting severe disease or going to the hospital, we could save perhaps a couple of thousand lives if we give this
correctly. Every human life counts, and I really think that this is a shortfall of, you know, at the top levels of government and policymakers,
and those who speak to the public from Tony Fauci to Dr. Walensky from the C.D.C.
[09:25:21]
YANCOPOULOS: I understand they felt the need to push vaccinations very broadly, and maybe they don't quite understand the slightly more
complicated story about therapeutics, but it is costing human suffering and lives.
I mean, the data really says that this has really been a true human tragedy, in that these have not been employed more widely. It has to come
from the top, just like they're pushing vaccinations, they should be pushing these available therapeutics, especially now that we have data and
prevention, to prevent hospitalizations. And now to save lives of those who are in the hospital, we can still save so many.
So, it's really a call to action to all these people who have a voice to the public, that there are lives at stake and they really have to make the
message, you know, much more widely spread and understood that we can save lives. We can keep people out of hospitals, and we can keep people from
dying, we just have to explain how there is an antiviral therapy that's very effective, the data is out there and should be used.
And, and for example, I saw a lot of news last week about investing $3 billion more in trying to get new antivirals, oral antivirals. You know, we
have antivirals right now. This antibody cocktail is a very, very potent antiviral, and it's costing lives that it is not being used more widely.
CHATTERLEY: I mean, we simply don't talk that much about therapeutics versus vaccines, to your exact point. If you remove some of the barriers,
like the ease of delivery, not having to go and fulfill a prescription. You can now as you said, give it by injection, so, it's simple. It's similar to
a vaccine.
Does some of the blockade come down to cost, George? It's far more expensive than vaccine. Do you think that's where some of the resistance
has come from?
YANCOPOULOS: No. Actually, it's to the American public, it's free. And some people have said that's part of the problem. It is because maybe --
CHATTERLEY: Someone, please though.
YANCOPOULOS: Maybe hospitals and doctors are not being reimbursed, and so they're not motivated enough to give this. That would be a true, a true
tragedy.
So right now, it is being made available for free under an arrangement that we made with the U.S. government. So, there should not be a cost barrier
right now.
CHATTERLEY: Talk to me about international use as well, because much of my audience is international and they will be listening to this and thinking,
can we get this too? What about international supplies?
YANCOPOULOS: Well, we have a great partner outside the United States in Roche. They are one of the most -- the largest manufacturers and providers
and distributors. They work very closely, for example, with the Indian government to get very rapid authorization and utilization of the cocktail
now in India during their crisis, and actually, I think it's been used at higher levels in India than it has been actually used in the United States.
So, they are really making a push, they've been a great partner. And they have -- they have substantial amounts of this therapeutic that's now
available for use, and they are working through getting authorizations in the various territories that they are responsible for.
CHATTERLEY: Yes, well, we'll keep talking about therapeutics on this show. George, fantastic to have you with us, as always. George Yancopoulos there,
President and Chief Scientific Officer of Regeneron.
YANCOPOULOS: Thank you.
CHATTERLEY: Thank you, sir. You and your team, as always.
All right, the market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:44]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Wednesday and we're inching higher in early trade with tech at fresh
records. There you can see two-tenths of a percent higher. The NASDAQ now up more than four percent so far this month.
Microsoft also hitting fresh record highs today, too, one day after becoming a member of the $2 trillion market cap club. IPO activities still
red hot, too, on Wall Street with software companies Sprinklr going public on the New York Stock Exchange today. Eyewear retailing giant Warby Parker
confidentially filing for an IPO, too.
And U.S. companies have now raised more than $170 billion on the IPO market this year, well ahead of last year's levels. No surprise of course there,
given we were mid-pandemic. IPOs getting a boost from the unprecedented levels of liquidity still sloshing through the system thanks to ultra-
supportive Fed policy.
And Federal Reserve Chair Jerome Powell assuring Congress yesterday that a strengthening economy will not lead to persistently higher inflation.
Cleveland Fed President, Loretta Mester, meantime, adding her voice to the torrential taper debate, saying a decision on cutting bond purchases should
be put off until the autumn.
Joining us now is Mark Zandi, the Chief Economist at Moody's Analytics. Mark, great to have you on the show. I've lost count of the number of
months, quite frankly, that you've been sounding alarm for on inflation. Do you think the Federal Reserve though, is now up to speed? Or are they still
behind the curve?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Now, they're getting there, Julia. I think, with the last F.O.M.C. meeting, that's the
policymaking committee of the Reserve, they met last week, they updated their forecasts. And I think their forecasts are now more consistent with,
you know, my expectations and the expectations of economists more broadly.
So, I think they're catching up, and I think they'll begin to taper their quantitative easing relatively soon here. So I don't -- I'm not too worried
about it at this point.
CHATTERLEY: You know, if I look at their forecast for inflation, for unemployment, for the economy, I agree with you. They are pretty
consistent. They are certainly consistent with your forecast.
And yet, when I look at the amount of rate rises they are expecting to do in 2023, they're expecting to do two. And your forecast say they're going
to do double that, that they're going to do four. So, I see a whopping great inconsistency in how much action they think they're going to have to
take, and that for me is a problem.
ZANDI: Yes, we'll see. I mean, there are lot of scripts to be written -- lots of scripts to be written here between now and then. And I think their
forecasts will change. And of course, you know, certainly I could be wrong. I don't think so, but I could be wrong. The economy could be --
CHATTERLEY: No.
ZANDI: No, no. But, you know, 2023 is a long way off and a lot of things can go on here between now and then.
CHATTERLEY: Water under the bridge.
ZANDI: So, I suspect -- yes, I suspect when we get to 2023, we're going to have an economy that's, you know, low unemployment, tight labor markets,
inflationary pressures developing. There will be a lot of pressure on the Federal Reserve to raise interest rates more quickly, normalize interest
rates.
And you know, and I think you have to put it into context, right? I mean, interest rates -- short term interest rates, rates that they control, they
are at zero. So, you know, they've got a long way to go to get them back to something that would be considered more normal, more consistent with a
well-functioning economy.
So, I think they'll get there. It's just going to take a little bit of time.
[09:35:07]
CHATTERLEY: I was just trying to explain or at least justify some of the market concern that we saw last week that now, I'm talking about record
highs in markets. And I saw some comments that you made concerned about the level of prices in commodities, some of the shakedown that we've seen in
crypto, even talking about the risk, and it might not be the most probable case, but the risk of a more significant correction in stock prices.
Talk me through your concerns there, and perhaps what you are potentially seeing.
ZANDI: Yes, sure, you know, asset prices, stock prices, housing values, and crypto prices, they're all very, very high. They've come a long way in
a very short period of time, and it is understandable. Interest rates are very, very low, zero percent short term interest rates. So when you
mentioned all the liquidity sloshing around, it has to go somewhere. So, it's been flowing into all of these different types of assets.
But valuations are high and it feels a bit frothy, right? I mean, think about the stock market, all the things that have been going on over the
past few months. There's GameStop, and other meme stocks, and Archegos and SPACs, and these things don't mean a lot to most people, but there are
signs of froth speculation and overvaluation.
And in that kind of a market, if anything doesn't stick too script, if everything -- if anything goes off with just a little bit, if interest
rates start to rise a little bit more than anticipated, you know, those markets are vulnerable. And I think that is a risk. Not that this is
atypical, this is kind of sort of what happens when you come out of recessions, so this isn't atypical, but it's still a threat to markets, to
investors, and ultimately, potentially to the broader economy.
CHATTERLEY: So, just be on your guard.
ZANDI: Yes. You know, cautious. I mean, most people, you know, they've got long term horizons, they need to look through these ups and downs and all-
arounds. You know, don't pay any attention. Obviously, if you're like me, and you're approaching retirement or you've got other, you know, concerns
where you know, your horizons are shorter in terms of your investments, then you need to be more cautious.
CHATTERLEY: Yes. Mark, great to have you with us, as always. Mark Zandi, Chief Economist at Moody's Analytics.
All right, coming up next on FIRST MOVE, dig up those sneakers you stored in a closet. They may be worth something. Sneaker reseller StockX grows its
footprint as new buyers flock to the online market. We've got the CEO, next.
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[09:40:06]
CHATTERLEY: We talk about traditional investments such as stocks and bonds, some less so, like cryptocurrencies. But how about sneakers or
trainers? It's a bigger business than you might think.
The industry is worth $80 billion globally as of last year with a projected 50 percent growth over the next five years. And a company called StockX is
at the center of it. It's an online marketplace for limited edition collectible items with a valuation of nearly $4 billion. It acts as the
middleman between buyers and sellers by authenticating the stock.
And joining us now is Scott Cutler, the CEO of StockX and who also spent some time at the New York Stock Exchange, was the President of StubHub and
led the Americas Business Unit at eBay.
Scott, great to have you with us. It's not often I reiterate someone's CV as an introduction to the show. But it does perfectly positioned you, I
think, for what you've got going on at StockX, and it's not just about sneakers or trainers. You've expanded the products beyond. Talk us through
what you're doing.
SCOTT CUTLER, CEO, STOCKX: Thanks, Julia. And yes, it would be a little bit odd just to talk about my resume. But it does reflect what we're trying
to accomplish as a company and what we see with this generation of consumers is the convergence of this idea that not only do you want limited
release high demand items that you can't get anywhere else from the leading brands, but increasingly, these consumers are looking at these assets as
alternative assets.
It's not only equities or digital currencies, alternative assets that includes sneakers, include items and collectibles. This is part of a
converging trend for this next generation of consumers, and we're a platform that caters to that trend.
CHATTERLEY: Yes, you're right at the heart of some growth in the resale market that we've seen explode in the last 12 to 18 months, in particular,
and a passion for younger investors. To your point, who are your customers, Scott?
CUTLER: So, our customers generally, 70 percent are the millennial Gen Z and now, increasingly, the Gen Alpha customer. So, it's a younger
generation of consumer. These consumers have a very different expectation from those from my generation and expectation of being able to get access
to anything that they see out there inspired.
And it could be something that's worn by an athlete, promoted by an influencer or released in collaboration with a brand. They want access to
that product. The challenge for these consumers is that in a limited release environment, they just can't get access to that product, and so our
platform has really been designed to give access, but in a transparent stock market like experience,
CHATTERLEY: And what's the average spend that people are making -- just to give us a sense -- whether it's trainers or sneakers or beyond? Because I
know you've opened up to video consoles to, a far greater range of products that obviously appeal to this consumer base.
CUTLER: So, obviously, across, we have over 100,000 product pages on our platform. If you looked at the average across the platform, it's around mid
$200.00. But actually, it varies from, you know, $100.00 sneaker to a sneaker they could trade for thousands, up to tens of thousands of dollars
or a gaming console, they could trade for $800.00.
So, it really depends on the product. But generally speaking, these are high demand products that these consumers essentially have great desire to
get.
CHATTERLEY: Talk about international expansion as well, because I know you just raised a whole host more money. You've opened up, I believe your 11th
authentication center in Australia, too. So, it really is appealing to global customers as well.
CUTLER: So, we serve customers in over 200 countries and territories around the world where we've been a U.S.-based e-commerce company. But as
we continue to expand the access to these products to these consumers in all these different places around the world, we've had to expand our supply
chain, our logistics, our ability to service that customer, and deliver a consistent experience.
So last year, we expanded our authentication centers, which kind of serves at the middle of the experience to authenticate every product. We expanded
that by almost 70 percent. We added in international locations Toronto, Hong Kong, Tokyo, recently Melbourne, Australia, and so we continue to
expand our offering to customers around the world and that's been a key aspect of our growth is growing our business serving an international
customer base, which has been growing well over a hundred percent, and then also expanding into other categories outside of sneakers, which has been
also very exciting for us.
CHATTERLEY: Whenever I see the word "collectibles" now, I think of what we're seeing in terms of NFTs or non-fungible tokens and the opportunity in
perhaps digital products as well. I'm sure you're already laughing at me or even just when we're talking about something like this, the underlying
blockchain technology where you can enshrine the ownership, which is such a crucial part of this.
Scott, how are you viewing this and do you see this perhaps as a part of the business going forward?
[09:45:10]
CUTLER: Well, when you look at the things that trade on StockX, as an investment, you'll see that many of these products and categories of
products has outperformed other traditional investment areas.
CHATTERLEY: Right.
CUTLER: And so for that next generation of consumer, it might be a sneaker, but many of those consumers look at that value of the sneaker that
they might have purchased in a retail environment for $170.00 and it's actually worth $500.00 or $1,000.00. And so many of our sellers, for
example will buy these products, hold them in inventory, and wait for the market to come around and realize the economic opportunity associated with
it.
And so, it's this idea that it's not just the idea that it's a digital asset, but it's an asset that can appreciate quite significantly in value.
And a lot of times, that appreciation happens on the day of release, because these products are generally released in a scarce model. And if you
happen to be able to get the golden ticket and get access to that product, there's tremendous resale value should you want to realize the economic
opportunity associated with it.
And so it's a really dynamic marketplace for this next generation of consumer that again, looks at you know, a thing like a sneaker or a trading
card, or a figurine and says there's actual value to this asset.
CHATTERLEY: Almost like when a company IPOs, for example. So, I guess there's two sort of quick questions there that I will follow up with. One,
are we bringing bubbles potentially when you said -- when you talked about sort of outsized returns relative to other assets? And what about a StockX
IPO at some point soon, Scott?
CUTLER: So yes, a lot of people talk about asset bubbles. I think when we looked at our business a year ago, I don't think we would have expected our
business to just have exploded over the course of the last year during the pandemic. This is a discretionary consumer purchase.
But I think what we saw is not only, you know, the trend to be able to buy on e-commerce, but the trend, this idea that, boy, there's value in this
underlying asset. So, it not only became a place that you spent your money, but you also had great returns.
In many of these areas, I wouldn't call it bubble-like inflation in terms of the value that we've seen in terms of appreciation. But if you were to
invest it in the Jordan index, or bought all the Jordans over the last number of years, you would have you would have seen over a hundred percent
return on that portfolio.
For us as a company, when we when we think about our future, we certainly have an eye towards the public markets. We've been well-funded as a
company, great growth, and great opportunity. We've been focused on expanding our business around the world, as well as expanding into other
categories. And that really is our focus. And if we deliver on that, we think we've got lots of opportunities ahead of us as a great consumer
brand.
CHATTERLEY: Fantastic. Final random question, what is the trainer/sneaker that's twirling over your left shoulder? I was trying to concentrate on
what you were saying, but I was -- I have to admit, I was watching the shoe.
CUTLER: Yes. So, it's actually a good example. This is a collaboration between two brands, Nike and Supreme for a Supreme dunk Nike in it. It
floats magically behind me.
CHATTERLEY: But there is a piece of string or something above?
CUTLER: No, it's actually a magnet. It rotates. It is very mesmerizing, but it does say that my bandwidth is working. But yes, it's actually
levitating and floating.
CHATTERLEY: Okay, I want a floating shoe of my own somewhere.
CUTLER: It could be yours.
CHATTERLEY: Thank you. I have to pay for it, though. We're not creating bubbles on this show. Scott Cutler, great to have you with us, sir. Thank
you so much and fascinating to hear what you've got going on.
Scott Cutler there.
CUTLER: Thank you so much.
CHATTERLEY: Thank you. All right, you're watching FIRST MOVE.
More to come. Stay with us.
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[09:51:46]
CHATTERLEY: Welcome back to FIRST MOVE. South American energy and chemical giant, Sasol is investing in sustainable technology to address the impact
of climate change. Our Eleni Giokos talked to the firm's CEO about their plans.
(BEGIN VIDEOTAPE)
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Sasol is such an amazing example of taking a raw material like coal and gas and then completely
processing it and producing a final product, essentially, that can be then used. How do we replicate this kind of model in other African countries
where they have oil and gas and coal finds so that they can truly expand on the value chains?
FLEETWOOD GROBLER, CEO, SASOL: Yes. So, I think we also need to bring in the sustainability links on this specific question you ask. And the reason
for that is that today, we will not invest in a coal to liquids facility just because of its carbon footprint.
But what we can foresee is that the technology enables us also to use different type of feed stocks that will be sustainable in the future. So,
we've sharpened our focus on sustainability and climate change. It is a cornerstone of our strategy because we know it is an item that we can't
wish away, walk away, run away from, we have to address it head on. And that is the crux of the matter.
And so we are preparing ourselves to travel a pathway where we can have significant steps in our de-carbonization of our processes, in terms of
using different feed stocks, and eventually through renewables.
GIOKOS: So, when we talk about your transition, what are you thinking in terms of renewables and your hydrogen plays? I mean, how important is that?
GROBLER: So green hydrogen, of course, has to be made from renewable electricity. So, the cost of renewable electricity is still in a downward
trend, the low cost that they are now installing solar performs in other parts of the world, I see no reason why that can't be the case also in
South Africa.
GIOKOS: Do you think there's a chance that we could see infrastructure like this, that Sasol has, in other African countries? What is it going to
take to both -- you know, this is a second view decades, right? Is it something that countries should be targeting and aiming for?
GROBLER: I think when we look at the sustainability agenda globally, the imperative that all of us need to address is how do we get products
developed, made, and used with a lower carbon footprint, so that would be for me, the crux. Now, if we can use technologies and renewables and
sources of carbon that is sustainable, those would be the long term areas that we should focus on to unlock value in Africa.
(END VIDEOTAPE)
CHATTERLEY: After more than a decade, pop sensation, Britney Spears is expected to break her silence regarding her court ordered conservatorship.
Spears is expected to virtually address a Los Angeles Court on Wednesday.
It comes almost a year after Spear's attorney filed to suspend her father as the conservative of her $60 million estate. He has been overseeing her
finances for the past 13 years.
[09:55:06]
CHATTERLEY: The controversial agreement has led some fans to create a quote, "Free Britney" movement.
And on Monday, Carl Nassib of the Las Vegas Raiders came out as gay. The first active NFL player ever to do so.
In the 24 hours since, his jersey has been the top-selling item across the league. Nassib took to Instagram and said, quote, "I'm a pretty private
person, so I hope you guys know that I am really not doing this for attention. I just think that representation and visibility are so
important."
And if those sales are anything to go by, it looks like very many fans agree with him, too.
That's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
@jchatterleyCNN.
In the meantime, stay safe. "Connect the World" with Becky Anderson is next, and I'll see you tomorrow.
Have a great day.
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