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First Move with Julia Chatterley
Biden's Infrastructure Deal Sends Stocks to New Records; Congress Closes in on New Antitrust Measures; Investors Applaud Strong Earnings and a Forecast Upgrade for Nike. Aired 9-10a ET
Aired June 25, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN BERMAN, CNN ANCHOR: Still unaccounted for.
BRIANNA KEILAR, CNN ANCHOR: It's a big number, it's increased, and so we are going to keep an eye on this of course throughout the day, what is
unfolding right now in Surfside, Florida.
CNN's special coverage continues right now.
[09:00:13]
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.
Bipartisan boost. Biden's infrastructure deal sends stocks to new records.
Tech time up. Congress closes in on new antitrust measures.
And Nike-likey. Investors applaud strong earnings and a forecast upgrade.
It's Friday. Let's make a move.
Welcome once again to FIRST MOVE this Friday. U.S. stocks are on track for new records as earnings impress. The Fed says major U.S. banks can handle
economic stress, and President Biden pushes for infrastructure larges, and for anyone sick to death of my rhyming, finesse this week, I'll stop next
week. I promise.
The major averages sitting at record highs and making gains premarket optimism this week helped by progress on those infrastructure talks and
relief that it's not going to mean, potentially mean at least higher taxes.
Strong results from Nike today, too, though. If you can see, there is a sleepy Friday feeling over in Europe. Asia, already hitting the weekend in
fine style, though the South Korean KOSPI closing at record highs. The Hang Seng and the Shanghai Composite finishing higher by some one percent plus
two, and some activist excitement over in Japan. Investors voting to remove Toshiba's chairman, that's a historic leadership change after years of
corporate underperformance and fury over an alleged government collusion scandal.
Shareholder fury on evidence in Europe, too. Credit Suisse higher on reports that executives there are mulling a top to bottom overhaul after
recent scandals, a merger with rival UBS or a breakup is reportedly under discussion, too.
A healthier outlook though, for U.S. banks. Major U.S. financial firms higher after easily passing their Federal Reserve stress test exams paving
the way for stock buybacks and potential dividend hikes. Encouraging news for investors, it seems.
The latest read on U.S. inflation, meanwhile, not so encouraging. The Fed's preferred measure of inflation, up 3.9 percent year-over-year. That's way
above Federal Reserve targets of course of two percent, core PC inflation hitting its highest level since 1992.
More on all of this in our drivers, and Christine Romans joins us now.
Christine, we can talk about infrastructure, but let's talk about those inflation numbers first, not really telling us anything that we aren't
already seeing in the real world in terms of pricing pressures, but I made the point, that is significantly above the Federal Reserve's target.
None of this, of course answers the question about whether it's transitory or not.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: That's right. And at least for right now, when you look at what's happening in the bond
market, this was expected, you know, bond participants exactly expected this kind of number. What everyone wants to know is what these June numbers
are going to look like.
I'll be really eager to see June data when it's finally ready, because you won't have these base effects anymore. We'll have a better sense I think of
just where we really are right here. Because last year, don't forget, I mean, the economy crash actually cratered. So, your comparisons here can
sometimes be a little tough to determine.
At least for now, Julia, it seems as though the market is taking the Fed and a lot of these Fed folks at their word that this will work itself out
eventually. So, these numbers, you know, there's some important superlatives here for these numbers, but the market at least isn't freaking
out.
CHATTERLEY: Yes, you make a great point as well, what was expected and also the base. The point last year upon which we are comparing these
numbers is very tiny. However, in order to bring that average down now, you have to see a number of months and quarters of teeny tiny numbers, which --
ROMANS: Yes.
CHATTERLEY: Not sure we're expecting to see. Now, do not adjust your TV sets or your mobile devices, depending on how you're watching us. You did
here right at the top of the show, and we were talking about this yesterday, a bipartisan breakthrough on the infrastructure and clearly
stock market investors are rejoicing, whether that's because we see an additional $500 billion or $600 billion of spending, or whether or not we
don't see tax rises in order to fund it.
The question is, Christine, do we get it done? Can we agree it?
ROMANS: Yes, as the terrible expression goes, "pigs are flying and hell has frozen over." They actually have some bipartisanship in Washington,
whether they can actually move it forward is the big question here, and how to pay for it as well.
You know, the president started on this mission for infrastructure with tax hikes on the very richest and tax hikes for companies. That seems to be off
the table for now. What we're talking about here is about $973 billion over five years, its investments in the electrical grid, its investments in
infrastructure. The kind of infrastructure that Republicans say they want to focus on bridges and roads, but this could be paired with another big
spending package.
[09:05:07]
ROMANS: The President sees this as part of other spending as well, so that's where the political trickiness comes in going forward.
I'm just glad for another terrible metaphor that they're not just still stuck in quicksand, right, that we have shown that Washington can work, at
least that's what the President has been trying to show that Washington can work and you can do the nation's business.
CHATTERLEY: Yes, it is possible. Thank you so much, Christine Romans.
Speaking of bipartisan breakthroughs, maybe on Big Tech, too. U.S. House lawmakers proposing sweeping changes to how big tech is regulated. The
biggest reform of U.S. antitrust law in decades would affect the core business of Amazon, Apple, Google, and Facebook.
Clare Sebastian has all the details. Clare, it's way bigger than just antitrust. Quite frankly, it looks at search power. It looks at harmful
content. It also looks at competition on platforms like Amazon with small businesses, too. The question is: for all the content in these bills, is it
possible to go from here to actually enshrining something in law?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, there a lot of steps left before we get to that point, Julia. It would have to advance to the
House floor, then it would go to the Senate, and then the White House.
But it seems there's a lot of work to be done even before it makes that next step to the House floor. A bipartisan group of California lawmakers
released a statement after the 29-hour mark up yesterday. They said, the bill text that is debated is not close to ready for floor consideration.
They said, the package of legislation poses harm to American consumers and the U.S. economy.
They say there are a lot of unanswered questions. So, it seems that there might be some more sort of discussion and debate even changes that could
happen even before it advances to the House floor. Because of course, as you say, these are very dramatic changes that these bills are talking about
at the moment.
They could prevent companies from acquiring future rivals, of course, Facebook with the acquisitions of the likes of Instagram and WhatsApp. They
could stop companies from favoring their own products and services on their platform. So for example, Google with YouTube appearing in search results,
and the last one, which is the final one to make it through the House Committee is the Ending Platform Monopolies Act, which could, in theory
force a company like Amazon to split its third party, say sellers, its third party sellers on its retail platform from its own retail business,
which really would be a sort of sea change to the way we see it operating at the moment.
But there is a lot of concern, there's a lot of concern that it could impact products and services that consumers rely on at the moment. There's
concern around how it could actually inversely affect competition.
This was a statement from the U.S. Chamber of Commerce, they said, "Antitrust laws should not be rigged against a small number of companies.
Such an approach punishes success and allows the government to pick winners and losers in our free market economy."
So, a lot of controversy still, even though it has made a step forward.
CHATTERLEY: Yes, and you start asking consumers what they want, and if it's going to mean longer delivery times or less choice in terms of the
products that they buy, or don't get Facebook free anymore, and you ask them what they want, and things get a little bit more tricky. We shall see.
Clare, in the interim for some of these Big Tech companies, it's less about watching what the government is doing and more about watching what workers
themselves are doing. One of the biggest unions in the United States passing a resolution yesterday to perhaps one day facilitate Amazon
workers, for example, coming together and forming a union. What more can you tell us on this? You've been speaking to them.
SEBASTIAN: Yes, this is the International Brotherhood of Teamsters, which is a major union, one of the biggest in the U.S., 1.4 million members. They
say that one of their -- actually their key policy priority now for the next five years will be organizing workers at Amazon.
Whether they will be successful is very unclear at this point. We don't exactly know what tactics they're going to take, but they are going to try
to do some kind of nationwide effort using the manpower that they've got, about 1.4 million members in the U.S.
They've also got timing, of course, with all the scrutiny on Amazon around antitrust and workers' rights, and all of that, and this is not just about
Amazon, they say, even with the rhetoric that Amazon has had recently around, you know, the $15.00 starting wage, they say that Amazon is driving
down wages and standards across the delivery and logistics industry.
This is what Randy Korgan, the National Director for Amazon told me about this.
(BEGIN VIDEO CLIP)
RANDY KORGAN, TEAMSTERS NATIONAL DIRECTOR FOR AMAZON: A UPS driver in 1996 was making $20.50 an hour, that's 25 years ago. You would be hard pressed
to find an Amazon driver today making $20.50 an hour. So, there's a gap there that they've created.
They may -- they may have a narrative to say that they are offering something comparative, but comparing themselves to the minimum wage is
irresponsible.
This job is a tough job. It's an important job. And the pandemic has taught us that it's a very important job to our economy.
(END VIDEO CLIP)
SEBASTIAN: Of course, I reached out to Amazon for comment. They have not responded on this vote yesterday that passed this resolution from the
Teamsters.
But of course, Julia, we saw what happened earlier this year at Bessemer, Alabama, that vote on trying to unionize that failed, that went Amazon's
way. This is what the Teamsters are trying to do. They're trying to succeed where so far, everyone else has failed.
[09:10:12]
CHATTERLEY: We shall see. Clare Sebastian, thank you so much for that.
Nike shares meanwhile surging premarket with investors getting a kick after their latest earnings. The company reported record online and North
American sales, and is predicting a post lockdown boom, too.
Paul La Monica joins me now. Plenty of Nike swoosh or tick marks here, whether it's, as I mentioned there, the North American business, but the
growth in digital up 41 percent on the prior year, 140 percent up on 2019. Wow.
PAUL LA MONICA, CNN BUSINESS REPORTER: These are stunning results, Julia, and investors just doing it today. Nike is going to soar and that is going
to be a big reason why the Dow is likely to climb since Nike is a Dow component.
So, I think what investors can take from this is that consumers in the U.S. in particular, but around the world in Europe and Asia also are very
rapidly getting back to normal and they are shopping for sneakers, they are buying athletic apparel and that is good news.
You're seeing Adidas shares in Germany rallying on this as well, and Under Armour stock is up premarket, too. So, I think investors are making the bet
that this is not just about Nike being a very solid company that's doing well. This is probably about the broader category all going to get a lift.
CHATTERLEY: Yes, this is such a great point. And it's the recovery of the wholesale business as well that I took note of. Dick's Sporting Goods,
Footlocker, JD Sports, all the places where we saw contracts canceled in light of the pandemic coming back as well as part of the business.
What about Greater China? I mean, this has been one of the fastest growing markets for Nike, and of course, we went through that period where they
were threatened boycotts from consumers there on concerns, allegations of labor -- forced labor in the Xinjiang region of China. What do they have to
say and what were they seeing in China?
LA MONICA: Yes, definitely. I think it's a bit of good news and bad news with Nike regarding China. The bad news is that revenue growth once you
factor in currency fluctuations was only up about nine percent year-over- year, which made China by far the slowest growing aspect of Nike's business with sales more than doubling in the U.S. and surging in other parts of
Asia, Latin America, and Europe.
But the good news, you talked about all of these boycotts. Sales were still up, even though there are definitely growing concerns about Chinese
consumers and a backlash to the swoosh, they still bought more in dollars or yuan in this last quarter than they did a quarter ago. So, I think Nike
can take some comfort that even though the boycott probably hit growth, they are still growing.
CHATTERLEY: Yes, we're cautious about sales being up just 17 percent to what -- $1.93 billion in the period. It says something.
Paul La Monica, thank you so much for that update there.
All right, let me bring you up to speed now with some of the other stories making headlines around the world. The death toll in Florida has risen to
four people after more bodies are recovered from underneath a building that collapsed on Thursday. Rescue crews have been combing through the rubble
with search dogs hoping to find survivors.
The Mayor of Miami Dade says 159 people are still unaccounted for. CNN's Rosa Flores joins us now from Florida. Rosa, and actually, we just got the
update from authorities that it is 159 people now that they're still looking for. What are authorities saying about hopes of finding those
people alive?
ROSA FLORES, CNN CORRESPONDENT: You know, they say that there is hope. They say that overnight, they heard some noises, which of course is what
family members at the reunification center are hoping for.
As you mentioned, the number of people unaccounted for has increased to 159. The number of people accounted for has also increased to 120. And we
were expecting those numbers to fluctuate.
Here's what we know from the Fire Department. They were asking people to fill out wellness check forms because they're trying to figure out exactly
how many people were in the building that partially collapsed. Now, this is normal because here in South Florida, it's usual for individuals that have
a permanent residence to live in this type of facility, so families, senior citizens, but also individuals who have second homes in South Florida.
So, could be people that are here for portions of the year and then fly back home to, for example, the northern part of the United States.
We're also learning about the challenges that the firefighters faced overnight. We've learned from officials that there were fires that ignited
and then reignited. I was here at about 10 o'clock last night when it started pouring, so the weather has also been a factor.
It's been raining, that of course adds water to the rubble.
[09:15:09]
FLORES: That adds weight, it adds more challenges. There's also been wind gusts, and if you look at the video of this partially collapsed building,
you'll see that there are still pieces of this building that are dangling. There's pieces of debris that are dangling.
And we obtained some photos. My producer, actually, John Cowell got some photos from the Fire Chief, that really show the layering of the collapse.
Officials describe it as a pancake collapse, and you really see those layers. You see how they are one on top of each other like the layers of a
cake.
We're also learning how these firefighters are going into this partially collapsed building looking for life. We've learned is what they do is they
shore up portions of the building. They're working with structural engineers to make sure that it's safe for them to do that and they are
listening for signs of life.
So Julia, this is a 24-hour operation. The firefighters that are working behind me have not stopped overnight. That's how of course we've learned
now that the death count has increased to four. But they haven't stopped despite the fact that this work is grueling, it's painstaking, and
extremely dangerous -- Julia.
CHATTERLEY: Yes. Heartbreaking images and heroic work there to try and recover those that are still missing. Rosa, thank you for that update, and
of course our hearts with all those involved and have been impacted.
We're back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks set to head skyward again with fresh records in sight for red hot tech. A rocket trip higher,
too for Virgin Galactic. Shares flying premarket as U.S. officials approve its commercial license to fly paying passengers into space.
And speaking of space shots, Microsoft beginning the session at fresh records, closing Thursday's trading above the milestone $2 trillion market
cap for the very first time after unveiling its latest Windows update.
Another big cap tech names are having breakout moments, too. Facebook, Alphabet, and Amazon, now up more than five percent over the past month,
helped in part, I think by stable bond yields.
[09:20:00]
CHATTERLEY: Okay, the World Bank partnering with the African nations to distribute an additional 400 million COVID-19 vaccines across Africa. But
the bank also wants more. It says the best investment to an early economic recovery is to spend on vaccines now.
Along with the I.M.F., the bank is asking developed nations to provide $50 billion worth of shots for lower income nations that will ensure a global
GDP payoff of $9 trillion in 2025, they say.
Joining us now is David Malpass, President of the World Bank. Sir, fantastic to have you on the show with us. Thank you so much. And I want to
start with that fantastic announcement with regards to the 400 million shots for African nations. Just talk us through this agreement and this
process.
DAVID MALPASS, PRESIDENT, WORLD BANK: Hi, Julia, good to be on.
And yes, it is a big announcement. The challenge from the beginning has been how do you get vaccines to people to the countries that are able to
use that type of vaccine? So there's been a contracting challenge.
The World Bank moved very quickly in October to provide funding, and then the hard work begins of how do you actually match existing doses or yet to
be created doses with countries? What's been achieved in AVAT is they have contracts from Johnson & Johnson that will actually deliver doses in the
near term.
So then the World Bank can finance those doses. We finance countries directly, and the countries buy services from -- in this case, we hope from
UNICEF -- and then that makes possible the vaccines themselves, and the deployment. This is very important to have countries have programs where
they can actually use the vaccines that are arriving.
CHATTERLEY: I mean, the aim here -- and we've spoken to the head of the African C.D.C. to push that vaccination rate to 60 percent by the end of
next year and there is still so much work to be done, David. What did you see as the biggest challenge that you're tackling here? Is it the logistics
of that supply? Is it the supplies, as you mentioned in of themselves, or is vaccine hesitancy across the continent also something that factors in
here?
MALPASS: You named all three that are important. The supply itself, then the logistics to actually match that type of vaccine to the vaccine that
people want in a given country, you know, different continents around the world are having different preferences. So, making that match, and then
overcoming hesitancy.
So, our funding can go to all three, that's important, and we will be making announcements on increased supply, the actual production of doses in
Africa next -- I hope next week. We're in the final stages of that.
And so that gives you -- you need more vaccines, you need the advanced economies to release, to decide as soon as they can, meaning this week,
next week, if they can decide how many doses they're willing to give to the -- or to sell to the poor nations. That way that the developing countries
can plan to receive those vaccines and how they're going to administer them.
Each one is different. Some of the vaccines are single shot, some are two shots. It takes a different system and they have different cold chains. So,
it's really important that the advanced economies free up their doses as soon as they're willing.
CHATTERLEY: Yes, and this is such a great point. The timing of these decisions is critical. The timings and the decision to provide more money
is also critical, too, David, and I mentioned the agreement, the announcement that you made with others, like the I.M.F. and said look,
developed nations stand to benefit most if we get more vaccines all around the world. The recovery will be quicker and developed nations will harness
the benefits of that, too.
You were just at the G7. What were you hearing from those nations who have already provided money, let's be clear, but are providing the additional
money that you're asking for?
MALPASS: I think they're willing and they would like to do that. But that you know, there are limited resources even in the advanced economies. So,
what we can say or what I think is clear, if they're -- in an ideal world, you would vaccinate worldwide all of the people who are most vulnerable,
the elderly, for example, and down to middle age and people that have preexisting conditions, that would be an ideal system, but that's very hard
to achieve.
So, everyone is trying to see how to make the system work. What we've done, the World Bank Group, we've done two things. One is to have sizable money
available to enhance supply; and then second, have a large funding available that countries can use to buy the vaccines and to deploy the
vaccines.
[09:25:05]
MALPASS: So, there's sizable resources. If the countries can get anyone to give them contracts for the actual delivery, that's the breakthrough going
on in Africa. They have gotten a supplier who will supply, we hope, 400 million doses over -- that will extend into 2022.
One thing I should mention in the $50 billion, is clearly COVID is going to be around for one year, two years, maybe three years. And so the amount of
money needed is for boosters for new production, and it extends into the New Year, and so we need to keep pushing on each part of these barriers.
CHATTERLEY: Yes, that's why we keep mentioning it, and we will not stop. I promise you, sir.
But to your point, unfortunately, this isn't an ideal world. It's going to be incredibly challenged, not just this year, but next year and beyond,
particularly in terms of growth. And I was looking at the World Bank report from June of this year and the messages for all the growth gains that we
talk about in China and in the United States.
Lower income nations, emerging market nations are going to recover far more slowly. And actually, they're not going to recoup the losses from the past
year, even by the end of next year. So, we're talking higher debt levels, slower economic recovery and price pressures as well.
David, how worried are you? And where particularly do you have most worry?
MALPASS: Exactly right, Julia. So, I have a substantial worry and that's because the poorer countries are being left behind the most. So, there's
the debt levels, there's also the climate impacts that are unequal going on around the world. And there's also the vaccination programs that what we
want to do is have each country try as hard as it can to adjust to the new economy, that's the post COVID economy.
And as they can contain the COVID itself through vaccines, through distancing, and other techniques, then they begin to have export markets.
One spot of good news is technology is advancing rapidly. Just before I was on, you had the story about people -- tourists going to outer space. So,
that's happening in that sphere, but very importantly, to the poorest countries is the advances on digital technology.
So, we're trying to push those forward, because they bring people together. You can get information, you can get social safety net payments. You can
make digital transactions.
For women in poorer countries, one of the most empowering things is to be able to make a transaction on a cell phone, even a 2G cell phone can make a
transaction and that changes lives.
CHATTERLEY: David, I have to say, you know, I've been looking at what you've been doing on climate financing, too, which is something. You
mentioned two things: climate and then payments, actually, which you're incredibly passionate about, and you've been doing some fantastic work in
your first two years as President.
I read that you provide more than half of all multilateral climate finance for developing countries now and two-thirds of adaption finance, which is
so important, too, because it's okay saying to a country, look, you have to clean up and improve some of these sectors. But what about retraining? What
about the jobs that involves, and the costs of that transition?
Talk to me about that very quickly, if you can, because I know I'm pushed for time, because I have to let you go.
MALPASS: It is a set of complicated issues for the poorest countries. They don't emit that much in greenhouse gases, but they get impacted. And so
two-thirds -- we do two thirds of the world's adaptation, multilateral financing to try to move people away from coastal areas, to try to have
their structures stronger in the face of climate events, and so that's one example of the work.
We just released a new climate change action plan this week, which describes the goal we want to integrate development with climate, climate
with development purposes, so the country can actually advance.
And we also want to spend the money that we do. We will spend at least $100 billion over the next five years on climate related issues. We want to have
as much impact from that spending as possible and that means choosing which things to spend on. Go for the big changers and the countries that can
really have an impact in terms of their incentive structure, for example.
So, that's some of our work.
CHATTERLEY: It's a lot of money, it's nowhere near enough money. So, that's something else we're going to push forward.
Sir, please come back and talk to me about this climate report, because, as I say, we're very passionate about this on that show and that's a whole
another conversation.
David Malpass, President of the World Bank. Sir, thank you for making time for us today. Great to chat with you.
MALPASS: Thanks much, Julia.
CHATTERLEY: Thank you. The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:33:09]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. markets are open for business and we're seeing fresh records for the S&P and NASDAQ with investors taking
that hot read on U.S. inflation in their strides. The Fed's preferred measures of inflation taking its biggest monthly rise. In fact, it's jumped
since 1992.
Nike shares fleet afoot. The apparel giant jumping over 10 percent after reporting record revenues and boosting its guidance. FedEx, meanwhile, as
you can say the opposite, lower. The package delivery firm reporting stronger than expected numbers, but investors are concerned about rising
costs. We know that's the case.
Tesla, meanwhile, fully charged and up more than 10 percent so far this week. Japanese firm Panasonic disclosing today that it sold its entire
Tesla stake in its fiscal year ending March. Panasonic supplies Tesla with batteries. It says the stock sale will not affect its future relationship
with Tesla.
Well, some investors have pulled the plug on Tesla though this year, traditional automakers are surging as they ramp up their EV ambitions. Ford
is up nearly 75 percent as it expects electric vehicles to account for 40 percent of global sales by 2030.
GM is also up more than 40 percent as it plans to spend a whopping $35 billion on electric vehicles by 2025.
Meanwhile, Silicon Valley startup, Lucid Motors is opening another showroom this time here in New York City. Joining us now Lucid Motors CEO and CTO
Peter Rawlinson.
Peter, fantastic to have you on the show. This is a huge moment, another huge stepping stone, I think in Lucid's lifecycle. Talk me through the
customer experience and what we can expect if we come to the showroom.
PETER RAWLINSON, CEO AND CTO, LUCID MOTORS: Indeed, Julia, and here I am in our brand new flagship store here in the meatpacking district of
Manhattan. This is the eighth studio that we've opened now in the U.S.
We've got two in the Bay Area of San Francisco, two in Los Angeles, two in Florida, just opened in Chicago, here in New York, with Boston, and
Scottsdale, Arizona to come very shortly. And this is very much a studio experience. We see the car, this is not a green screen, the car --
beautiful design, really, and that design sensibility is echoed and mirrored in this surrounding, this studio, this boutique experience where
we invite our prospective customers to come in, in a not a high pressure sales environments, but a voyage of discovery, to learn about the car, and
the groundbreaking technology that's going to help mankind transform to a more sustainable method of mobility.
[09:35:52]
CHATTERLEY: Yes, I mean, what we can see behind you looks incredibly beautiful. Among some of the more pertinent updates as well that you've
provided us along with this opening is that reservations now, I believe have topped 10,000. What does that mean, in terms of money to you? And in
terms of commitment, what does it cost to make a reservation?
RAWLINSON: Well, in theory, some people have put up to $7,000.00 or above that, in the case of the Dream Edition, which is sold out. It's possible to
reserve a car now for just a few hundred dollars. But this shows the growing interest and momentum that Lucid is acquiring as we get closer to
customer deliveries in the second half of this year.
And as a result of that confidence, we, this week announced an accelerated plan of investment where we're bringing forward $350 million into our
budget between 2021 and 2023, and bring an additional six to seven percent CapEx into our plan through the next five years.
We're going to accelerate our production capability in our plant in Arizona, in Casa Grande, and add an additional 2.7 million square feet.
This is confidence in our business plan, and we're planning for a very, very bright future.
CHATTERLEY: It's all about delivery, to your point, and you've also talked about how COVID wreaked havoc on the supply chain. I know you've got --
what -- some 250 plus international suppliers, too, and now you're in this quality control part of the production of some of these vehicles.
Peter, how confident are you that you can fulfill those commitments this year? What are we talking about in terms of timing for the second half of
this year, and of course, the next year to, where your ambitions really scale up?
RAWLINSON: Exactly. And we're on track for this year and next year. We're going to have very significant growth as we plow ahead into 2022. And
lately, the company had a red letter day, Julia, just last Friday. We started our quality validation run of cars. These are the production cars
proper, that we started in our plants in Arizona. The car behind me is a pre-production model. We made about 86 of those. That run has been complete
now.
And now, we are making the cars that eventually we will sell to customers once we've got the quality right, and we're on track for that.
CHATTERLEY: Yes, and you certainly can't get it wrong. It's funny, you know, when I look at some of the prices of these, the grand touring of the
Dream. We're talking significantly above $100,000.00, and I was just looking at what Mercedes Benz, which is typically America's best-selling
model that transacts above $100,000.00.
I mean, they've not sold more than 20,000 units in a single year since 2015. I think, and admittedly, these have been some tough years, 6,620 in
2020 and 12,500 in 2019. Peter, who is buying these cars?
RAWLINSON: Well, so many people now in this marketplace are just wanting an electric offering in the luxury space.
I've spoken to so many people who are ready for this. And you know, hats off to Tesla, because they've changed this paradigm. They've change the
perspective of a luxury buyer, but they're looking for a luxury offering to replace their Mercedes Benz S Class, their high end E class. And remember,
when we talk about 20,000 units, we're looking at a world market not necessarily just North America here.
CHATTERLEY: And that's a great point. So, not worried about competition from GM, from Ford, from Mercedes Benz. They're spending huge amounts.
RAWLINSON: Well, yes, I mean, it's a very interesting point. But I don't see that being a market specifically for EVs per se. There's a market for
cars, and the more great EVs along, we'll get more EV penetration into that market for cars which is dominated by internal combustion engines.
And I think you make great points. I'm delighted actually that Mercedes Benz EQS is coming along, because then Lucid then can be compared directly
against the very best that Stuttgart can offer.
[09:40:13]
CHATTERLEY: We shall certainly do it. Peter, great to chat with you. Congrats on the opening. Peter Rawlinson, CEO and CTO of Lucid Motors
there. Thank you.
We are back after this.
(COMMERCIAL BREAK)
CHATTERLEY: Crypto volatility presents a unique challenge for investors looking to stay ahead of the game, especially given the lack of data and
the fact that misinformation is rife.
Enter Chainalysis. It connects information that links real world entities to blockchain transactions. In English, it provides software that enables
government agencies and private sector businesses across the world to detect and prevent cryptocurrency crime and money laundering.
The company has just announced a new funding round that values it at $4.2 billion.
And joining us now is co-founder and CEO of Chainalysis, Michael Gronager. Michael, fantastic to have you on the show. I know you have a lot more
going on than just that. And your background, was a founder of one of the biggest exchanges out there, Kraken. Explain to me why you recognized the
need for data.
MICHAEL GRONAGER, CO-FOUNDER AND CEO, CHAINALYSIS: The data is needed in many, many ways in crypto. So, I would say, the first early days of
cryptocurrencies, it was considered anonymous, untraceable, and so on.
And if you have a completely untraceable economy, no one is going to trust it. So, to generate the trust, you need a data layer on top of crypto, and
that's what we build in Chainalysis today. We have a data platform there. And the use cases for that is like anything from enabling regulators to
have an understanding of where the fund goes, enabling law enforcement to follow the money and find the bad guys as you would put it.
And furthermore, it enables and empowers everyone investing in cryptocurrencies to understand like, what are the risks, what are the
potentials, the opportunities, and so on in crypto, and that's all fed by data.
CHATTERLEY: There's so much in there. I'm already super excited. Okay, let's myth bust.
Some high profile leaders, Janet Yellen, Jay Powell, for example, and some of them have clarified some of the comments that they've made. They've
raised questions about the extent to which digital assets, cryptocurrencies are used for nefarious purposes. What does your data say? What percentage
of transactions are naughty?
[09:45:02]
GRONAGER: Yes. So, the transactions that are considered illicit activity is less than one percent today. So, it's a very, very small part of the
cryptocurrency economy that's considered illicit activity. So, I think that's the biggest misconception.
Further on, I think it's extremely important to understand that this one percent of illicit activity, the fact that we even know about it, the fact
that we can see where it flows, where it goes, what kind of categories that it entails, that basically tells the story that cryptocurrency is extremely
transparent, and the big wins we have seen for law enforcement over the last couple of years, in cases involving cryptocurrencies, also shows the
great transparency, and why you shouldn't be so concerned about cryptocurrencies.
CHATTERLEY: You know, the pushback here will be, hang on a second, but look at the statistics I'm showing on the screen here. It's the currency of
choice from ransomware attacks. We've seen enormous growth over the past year, 337 percent increase in in payments to attackers.
Why, to your point, is this being used for ransomware purposes? Is it because it's secret and this sophisticated way of hiding what you're doing?
Or perhaps, because it facilitates easy transfer of payments especially across borders?
GRONAGER: Yes. I think that you hit the point in your last soundbite there, because, yes, it does. It's like -- it's actually a really, really
easy way to transfer money. And it's also -- we have seen cryptocurrencies pick up in usage. We've seen a lot of people entering the space in terms of
investments, and so on.
And it also means that if I send a request to someone for ransomware, I've locked down their computer and they don't even know what Bitcoin is. The
likelihood that I'm getting any rewards there is very, very small. That's changed completely today.
Everyone knows what Bitcoin is and everyone knows how to use it. So, it also means that it has increased in popularity. It's also increased in
popularity for ransomware and that's one of the reasons why we see it in color. The fact that or like the presumption that it's anonymous and can't
be traced, that's definitely not the case. But yes, it facilitates cross border transfers.
And in the world, to the jurisdictions we have today, if you move the money to Russia, whether it's Bitcoin or whether it's a wire transfer, they'll be
gone for all practical purposes.
CHATTERLEY: It's the practicalities of this, I think that are so important. The benefits of this in the real world also benefit those that
are doing this for illicit purposes, too. The question -- and you raised it there was, hypothetically speaking, we saw this in the Colonial Pipeline
case, the money was recovered. And this is something that you understand very well. How easy is it to recover a payment, a ransomware payment that's
made in a digital currency like Bitcoin, for example?
GRONAGER: Yes, I think it's the best way to explain this is really true to use a completely simple analogue analogy here. So, if you imagine that you
took a ransomware for a painting, and now you're trying to recoup the funds there, if you're a law enforcement.
So, first of all, you hand over the big bag of money to someone, and now you're going to follow the money. You'll drive after the car. You might
have put a tracking device in it. And then at some point in time, they're handed over to someone else. And that someone else is going to cash out
using some service, and now they are into the door of that bank, and they do that in the belief that no one knows that they went into that door.
But on the other side of that, you've got your painting. And on the other side of that, you have a law enforcement officer ready to seize the funds.
In a digital world, it is exactly the same. The ability to follow the flow of funds, you're basically tracking where does the fund go? And at a point
in time, where they move into a service, where you have some level of control or some level of access, where you can either hack into something,
get access to a password, ask an administrator to lock down the account, and so, you have an opportunity to seize the funds.
So, it's very much the same as in a bank real world.
CHATTERLEY: Michael, I have about another minute. When regulators come to you, because I'm sure they do, and not only they ask you for information,
but they ask you for analysis, too. Do they walk away smarter? Do they walk away more confident that actually this is something that's here to stay and
can benefit society? Or do they walk away going, okay, we have to kill this.
GRONAGER: They definitely walk away smarter. I've been amazed and really, really, like really enjoyed to work with our government colleagues and
seeing how they, over the years, have become extremely smart on crypto and also some of the, I would say biggest proponents -- so if you talk to a lot
of people within various public sector institutions, they are huge proponents of crypto, and sometimes, you will hear more like from political
sides, various concerns being raised.
But I would say we have a very well-educated staff in a lot of the regulatory institutions today.
CHATTERLEY: Yes, we shall see. Regulation coming -- for better, I think hopefully, too.
Michael Gronager, CEO of Chainalysis. Come back and speak to us soon, please. Great to chat. Thank you.
GRONAGER: Thank you.
CARLSON: We're back after this.
(COMMERCIAL BREAK)
[09:52:08]
CHATTERLEY: Welcome back to FIRST MOVE. The impact of blockchain technology and artificial intelligence is having on our daily lives is
increasingly evident, I think, but now companies are combining the two concepts to try and open new business opportunities.
We explain how in the latest edition of Think Big.
(BEGIN VIDEOTAPE)
KIM KELAITA, CNN PRODUCER (voice over): Artificial intelligence, blockchain, cryptocurrencies can be difficult terms to understand, but
these buzzwords brought together thousands of crypto enthusiasts in Dubai.
Marcello Mari was one of them. He believes combining AI and blockchain will revolutionize the financial services sector.
MARCELLO MARI, CEO, SINGULARITYDAO: The big idea behind AI and blockchain is democratizing access to this incredibly powerful technology.
KELAITA (voice over): It's a big idea of potentially saving financial companies up to $12 billion a year. So, what exactly is AI blockchain?
If I'm going to ask anyone about these technologies, it's going to be Tech Scientist Professor Scott Stornetta.
SCOTT STORNETTA, TECH SCIENTIST PROFESSOR: My friends call me "Your Majesty." For the record that that Your Majesty thing was joking.
KELAITA (voice over): But he's commonly known as the Godfather of Blockchain.
STORNETTA: We felt that it could be a great leveling force, a great equalizing force.
KELAITA (voice over): Blockchain is essentially a chain of tiny bits of information called blocks stored on different servers. Experts say those
tiny blocks improve the transparency, security and traceability of digital transactions.
So, how does AI fit into all of this? AI is the human-like intelligence used by machines to automate problem solving and data analysis.
STORNETTA: Having all the data standardized due to the use of blockchain to make it interoperable, it's just like a feast for AI.
KELAITA (voice over): We have blockchain that stores an ocean of information and AI which selects only the drops necessary to make informed
decisions based on that ocean of massive data sets.
MARI: With over 10,000 cryptocurrencies out there in the market, it is very difficult for anybody to make educated decisions.
KELAITA (voice over): By combining blockchain and AI to predict cryptocurrency performance, if prices are set to go down, Marcello's
company will advise customers to sell or buy if they're predicted to rise.
MARI: The average user can just go chase the DynaSet token, and that's it. There's not much more than they need to do, and the AI will do everything
else automatically.
KELAITA (voice over): Now, that sounds amazing, right? But critics say this tech is still developing, and could take years to truly make an
impact. But as companies continue experimenting, businesses won't be deciding between AI or blockchain, but rather a combination of the two.
Kim Kelaita, CNN, Dubai.
(END VIDEOTAPE)
[09:55:10]
CHATTERLEY: And now, finally this Friday, this -- have you ever tried to stack M&Ms?
(BEGIN VIDEO CLIP)
WILL CUTBILL, GUINNESS RECORD HOLDER: When I tell them it's a whopping five, I think they're a bit shocked that they want to give it a go straight
away and try and beat me. It is a little harder than it looks.
(END VIDEO CLIP)
CHATTERLEY: After hundreds of failures, a British civil engineer broke the Guinness World Record for stacking M&Ms with a grand total of five.
[VIDEO CLIP PLAYS]
CHATTERLEY: And, yes, as soon as the record was broken, he did eat them all. He's perhaps got too much time on his hands. But look, here's four I
ate earlier. If you look really closely, you can see a crack because I squished them beforehand and astonished my team. Genius.
Well, that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages. Search for @jchatterleyCNN.
Stay safe.
"Connect the World" with Becky Anderson is next.
And have a great weekend. I'm off to eat the rest.
(COMMERCIAL BREAK)
[10:00:00]
END
