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First Move with Julia Chatterley
The U.S. Accuses China of Masterminding Huge Hack Attacks; Rising COVID Cases and Sponsor Concern Threaten to Undermine Tokyo Games; Jeff Bezos Tell CNN His Historic Launch will Change Him. Aired 9-10a ET
Aired July 19, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:25]
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Live from Dubai, I'm Eleni Giokos, in for Julia Chatterley. This is FIRST MOVE and here is your
need-to-know.
Cyber warning. The U.S. accuses China of masterminding huge hack attacks.
Olympic ordeal. Rising COVID cases and sponsor concern threaten to undermine Tokyo Games.
And heading to space. Jeff Bezos tell CNN his historic launch will change him.
It's Monday. Let's make a move.
Welcome to FIRST MOVE. Great to have you with us.
Let's get right into the market action. It's a risk off Monday for global stocks, rising concerns over the delta variant and its impact on economies
are really hitting the major averages hard.
The Dow is the big U.S. loser, premarket down by some 1.4 percent. The major European exchanges are down by well over two percent as travel
related firms and other reopening stocks sell off. Energy also pulling back sharply, Brent and U.S. crude are tumbling more than three percent, and
major oil stocks are weaker as well.
OPEC+ announced a deal over the weekend to raise supplies by 400 million barrels a day beginning next month with Saudi Arabia and the UAE resolving
their recent disputes. That means more oil is heading to markets and that is at a time when investors fear slowing demand. OPEC doesn't see
production back to pre-COVID levels until later next year.
Hong Kong and Japan down sharply today as well. Tencent, Baidu, and Alibaba all fell more than two and a half percent after Shanghai court blasted Big
Tech for anti-competitive behavior. Fresh cyber tensions between the U.S. and China remain in focus as well, and that is where we begin our drivers.
The U.S. and its allies, well, today accused China of overseeing widespread attempts to extort money in cyberspace. It's a dramatic escalation in the
Biden administration's attempt to stave off further security breaches.
CNN's Alex Marquardt joins -- all right, we've just lost Alex, but we will get back to that story.
And we are now moving on to our next story. And from one of the biggest events on Earth to the biggest events taking place beyond it and when I say
one of the biggest events on Earth, of course, we're talking about the Olympics.
Jeff Bezos is only 24 hours away from touching the edge of space itself as he blasts off with his company Blue Origin, along with three others,
including his brother.
CNN caught up with Bezos and his fellow passengers to ask how they are feeling. Take a listen.
(BEGIN VIDEOTAPE)
RACHEL CRANE, CNN BUSINESS INNOVATIONS AND SPACE CORRESPONDENT: This journey to space is a dream come true for all of you. So, tell me -- and
Jeff, let's kick it off with you. How are you feeling right now?
JEFF BEZOS, FOUNDER, BLUE ORIGIN: Excited. I'm so excited and curious. You know, everybody who has been in space, every astronaut comes back and they
say that it changed them somehow. They see the thin limb of the Earth's atmosphere and realize how fragile the Earth is and see, it's just one
planet.
So I don't know how it's going to change me, but I know it's going to and I'm excited to find out how.
CRANE: And Wally, did you ever think that this day would actually come in? Did you ever imagine that you'd be traveling to space with someone that
can't even buy a beer?
WALLY FUNK, AVIATOR: Actually, someday I thought it would happen. I've waited a long time because I went to see Eileen three times on her
launches. I kept thinking, okay, NASA is going to help me go up. It hasn't happened, but we're going to do it now.
I'm very excited. I want to feel how it's going to be in space and doing everything in that capsule that I can do.
J. BEZOS: Rachel, when Wally was in the Mercury 13, they tested her, all the same tests they gave to the men, she outperformed all of the men, and
because we've been training here for tomorrow's flight, I can assure you that she is still outperforming all the men at 82 years old. She can outrun
all of us.
And she's also just a whirlwind of energy, a role model for determination and resilience and positivity. And you know, she's amazing.
[09:05:03]
CRANE: She's putting you all to shame.
J. BEZOS: For sure.
FUNK: No. Honey, you're teasing.
CRANE: Now, you guys, humans have never flown in this capsule before. So, you guys are essentially guinea pigs here. Does that make any of you guys
nervous at all?
MARK BEZOS, JEFF BEZOS'S BROTHER: No, I'm not nervous. I'm incredibly excited. I've had the opportunity to be down here for a number of the
launches that have happened with this vehicle, and it's performed -- the capsule performed flawlessly 15 times in a row, just, you know, can't wait
to get in there, and you know, go for a ride number 16. It's going to be incredibly exciting.
CRANE: Now, Jeff, there have been a chorus of critics saying that these flights to space are, you know, just joy rides for the wealthy and that you
should be spending your time and your money and energy trying to solve problems here on Earth. So, what do you say to those critics?
J. BEZOS: Well, I see they are largely right, we have to do both. You know, we have their -- we have lots of problems in the here now on Earth,
and we need to work on those, and we always need to look to the future. We've always done that as a species, as a civilization. We have to do both.
And what our job Blue Origin is to do and what this space tourism mission is about, is having a mission where we can practice so much that we get
really good at operational space travel more like a commercial airliner and less like what you think of as traditional space travel.
If we can do that, then we'll be building a road to space for the next generations to do amazing things there, and those amazing things will solve
problems here on Earth. And, by the way, maybe it'll be Oliver. He's 18 years old, maybe that will be -- maybe he'll found a space company that
uses the infrastructure that this generation is building right now.
So, the real answer is yes, we have to do both.
CRANE: And, Jeff, last question. You know, the timing of this flight, about two weeks after you stepped down as CEO of Amazon, is that because of
the inherent risks of this flight?
J. BEZOS: No, I could have done this flight as a CEO of Amazon and it would have been fine. So, first of all, we really believe this fight is
safe. We wouldn't -- you know, people say -- I had friends say to me, how about the second flight or the third flight? Why do you have to go on the
first flight?
And the point is, we know the vehicle safe. If the vehicle is not safe for me, then it's not safe for anyone. And we have never raced, we've never
been -- our motto is "Gradatim Ferociter," step by step ferociously. Our mascot is the tortoise. We have taken this one step at a time. We're ready.
CRANE: Well, we are all ready to watch you take this historic journey. Good luck, you guys. The world will be watching. Thank you so much for your
time.
M. BEZOS: Thank you, Rachel.
FUNK: Thank you.
J. BEZOS: Thank you very much.
(END VIDEOTAPE)
GIOKOS: Well, I will tell you, I would be really nervous. Kristin Fisher is by the launch sites in Van Horn, Texas. Tell me about what people are
thinking and feeling. I'm sure it must be so exciting. But we know the inherent risks, but we also know what this means for space travel.
KRISTIN FISHER, CNN SPACE AND DEFENSE CORRESPONDENT: Yes, and you heard Jeff Bezos talking about those inherent risks, but he feels like this
spacecraft is very safe, and so do the people here in West Texas because look at where we are.
I mean, this desert in West Texas is about as remote as it gets, and that is exactly what you want when you are testing and trying to fly rockets
into space. And all of this land, about 300,000 acres of it is owned by Jeff Bezos. And so Blue Origins, New Shepard Reusable Launch System is what
they're going to be flying on tomorrow.
It has had 15 consecutive successful test flights, but the big deal tomorrow is this is the first time that humans have ever flown on it. And
of course, Jeff Bezos himself, the richest man in the world is going to be one of the four crew members on board.
The other crew members are his brother, Mark. And if all goes according to plan, the youngest person to ever fly in space is also going to be on
board, 18-year-old Oliver Daemen, and then you also have of course, 82- year-old, Wally Funk. She is truly a legend in the aerospace industry, a pilot.
She has taught many students how to fly over the years. And if she flies, if all goes according to plan tomorrow, she will be the oldest person to
ever fly in space, former member of the Mercury 13 Program who trained to fly in space back in the 1950s, but never flew because she is -- because
she is a woman.
So, really just an incredible crew that's going to be launching here tomorrow if all goes according to plan, and as of now, all systems are go
9:00 a.m. Eastern Time tomorrow -- Eleni.
GIOKOS: And she definitely has the most energy out of all of them. So, we'll be keeping a close watch. Thank you so much, Kristin. Great to have
you on.
[09:10:08]
GIOKOS: All right, so we'd like to now return to our top story. And a reminder, the U.S. and its allies, well, today accused China of overseeing
widespread attempts to extort money in cyberspace. It's a dramatic escalation in the Biden administration's attempt to stave off further
security breaches.
CNN's Alex Marquardt now joins us from Washington, D.C. Alex, we know we're going to hear details today, but overall, this just creates more tensions
in an already strained relationship between two world powers, the U.S. and China.
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Yes, Eleni, we're already getting a lot of details. The U.S. is banding together with
some of its closest allies, the European Union, NATO, Japan, Australia, and others to essentially call China out for their misbehavior in cyberspace.
So much of the focus of the Biden administration so far has been on Russia, those government hackers, those criminal hackers, and the attacks that
they've been carrying out. But what the Biden administration is looking to highlight here is really what China has been up to which, frankly, in the
long run, when you speak to Intelligence and National Security officials, it is China that is the much bigger, greater -- the much greater economic
and national security threat in the long run.
So the Biden administration and all of their partners today is saying that China was responsible for the massive Microsoft Exchange hack that was
exposed and revealed earlier this year in March that affected tens of thousands of computers around the world.
And then more broadly, they are saying that China does continue to carry out its malicious cyber activities, cyber espionage, but there is a twist.
They have been hiring the Ministry of State Security, which is the civilian Intelligence agency, has been hiring criminal contract hackers who have
also taken to carrying out financial attacks, ransomware, and other types of financial attacks, for profit, for gain.
We have seen, according to the Biden administration and their allies, ransomware attacks demanding millions of dollars in payment, including of
one major U.S. company, which the administration has not revealed. This change, this new tactic, if you will, is something that a senior
administration official called really eye-opening and surprising.
But Eleni, there are no punitive measures per se. There is no punishment. There are no sanctions being rolled out.
What the administration is hoping is that through this collective condemnation by all of these countries that they can try to get China to
change its behavior -- Eleni.
GIOKOS: Thank you so very much, Alex.
All right, we head now to Japan where more athletes have tested positive for COVID-19 in the Olympic Village just days before the summer games
begin. Meanwhile, major Olympic sponsor, Toyota, saying it will not air any ads related to The Games.
We've got Selina Wang live for us in Tokyo with the latest. Let's start off with the sheer numbers that we're talking about here because, I guess, the
question is, what does this do to The Games themselves if you have athletes testing positive?
SELINA WANG, CNN CORRESPONDENT: Well, Eleni, IOC officials are saying that they were expecting this number of positive COVID-19 cases that they can't
guarantee there won't be infections among Olympic participants, but what matters is the response.
And now, we're up to 58 positive COVID-19 cases here in Japan linked to the Tokyo Games. You've got athletes, you've got officials, contractors testing
positive for COVID-19. We've learned that the first U.S. Olympic team member here in Japan has tested positive. We've learned it's an alternate
on the women's U.S. gymnastics team who have tested positive at a pre- training camp in Japan.
Now, within the Olympic Village, however, there have also been a growing number of infections, a Czech beach volleyball player, as well as two
members of the South African soccer team. And now 21 close contacts of those positive cases of the South African soccer team are now also in
isolation.
And Eleni, it is critical that these cases don't spread in the Olympic Village. This is densely populated. A lot of athletes, up to 11,000
athletes will be living there and I took a visit there. There's a lot of social distancing rules, reminders to wear masks. Athletes are asked to
dine alone, not the place for fun and celebration that it usually is.
But officials are repeating that they believe they can keep these cases contained, separate from the Japanese public. But the people here are not
convinced. You've got just 20 percent vaccinations and a lot of skepticism with The Games just days away.
GIOKOS: You know, I mean, looking at what The Olympics actually means, and usually it's about the messaging, it is the marketing, it is about the
sponsorships. It's about social cohesion. This is going to be so fundamentally different.
What's really interesting here is that Toyota is also not going to be playing any ads. So I mean, in terms of what it's going to look like from
the sponsorship perspective, from a marketing perspective, what are you hearing?
[09:15:10]
WANG: Eleni, I've actually been speaking to Olympic partner sponsors, businesses here for weeks for a story that I'm working on about this very
issue. These sponsors are in an incredibly precarious, delicate situation.
Normally, the Olympics are a marketing bonanza. This is a golden opportunity to boost your corporate image. But instead, a lot of Japanese
companies are worried about brand damage for being associated with The Games in which so many Japanese people are fiercely opposed to them.
So you mentioned Toyota, there are many other companies here that have had to scale back, scrapped plans. It's also because of the ban on spectators.
It doesn't make sense for them to have these big promotional events if nobody can go to the events and attend anyways.
I think there's a lot of frustration as well among the sponsors by how last minute a lot of these decisions have been made, whether it's on spectators'
alcohol, so many other things.
And Eleni, these sponsors in Japan have put in a record $3 billion to support these Games, and it is really notable that Toyota is not airing
these Olympic related advertisements because Toyota is the highest tier level of sponsorship. They are a global Olympic top sponsor. They pay big
bucks to be associated with the five rings and what it means -- Eleni.
GIOKOS: Yes. Thank you so much, Selina. Great to see you.
You're watching FIRST MOVE. Still ahead, some are calling it Freedom Day, others are approaching it more with the sense of fear. England relaxes
almost all its COVID restrictions even as infection surge.
And the country whose capital was once known as the Paris of the Middle East is now in economic freefall. We speak to a major player in the
Lebanese finance industry about the challenges gripping the nation.
Stay with us.
(COMMERCIAL BREAK)
GIOKOS: Welcome back to FIRST MOVE. We are live today from Dubai.
U.S. stocks remain on target for a sharp pullback with futures currently near session lows. Take a look at these numbers. Lots of concern over
rising COVID cases globally, as well as how Central Banks will react to rising inflation.
Investors flocking today to safe haven assets like U.S. Treasuries, benchmark 10-year yields near five-month lows a little earlier.
Now, the U.S. dollar, another safe haven winner with the dollar index at around four-month highs, a stronger dollar has the potential to pressure
U.S. corporate profits, as well as emerging market economies like Lebanon.
[09:20:20]
GIOKOS: No government and almost unprecedented economic crisis, mass protests, a pandemic, and ongoing consequences of a deadly explosion. Any
one of these would be a significant problem for any country. In Lebanon, all of them are a reality.
People took to the streets in different parts of the country last week after Prime Minister designate, Saad Hariri stepped down having failed to
agree on forming the government with the country's President.
Ten Lebanese soldiers got injured in clashes in Tripoli.
Nasser Saidi is a former Lebanese Economy Minister and now, founder and President of Nasser Saidi and Associates. He joins us via Skype from
Beirut.
Sir, really good to have you with us. Thanks so much for taking the time.
NASSER SAIDI, FORMER LEBANESE ECONOMY MINISTER: Thank you.
GIOKOS: You're in Beirut right now. Could you give me a sense -- could you give me a sense of the situation on the ground? You know, the news of
hyperinflation and prices shooting through the roof, that must be devastating for any person living in Beirut right now and in Lebanon right
now?
SAIDI: It is, and you've got fuel shortages, people are queuing up for two or three hours to get some fuel. There are medicine shortages. Hospitals
are running out of necessary medicine, including in some cases, oxygen.
There is a loss of water, electricity, so all basic utilities are breaking down. And the toll that you mentioned in terms of inflation, we've got
inflation in excess of 160 percent per annum. The pound has lost 90 percent of its value. So in effect, I mean, just so that people understand, along
with all these crises, people have lost 80 percent of their deposits of their financial wealth.
They cannot access their deposits in the banks, they are effectively frozen. They cannot transfer money abroad. They cannot even transfer money
in some cases internally. So, you've now got a cash economy at a time of rising inflation. So, you can imagine what it means for most people trying
to live. People are not living on the streets. They're rummaging through the rubbish.
GIOKOS: I can imagine.
SAIDI: It's devastating. It's devastating.
GIOKOS: It must be really hard for you having been in government before and understanding just the complexities of the Lebanese political
environment. So, let's just touch on that.
You know, we're 20 months into the crisis and you're sitting with a situation where there is a political gridlock, you're in economic freefall.
You know, it seems that Lebanon now is on the path to further chaos.
How would you describe the situation right now? And to what extent does the political environment have to do with all of what we're seeing on the
economic front?
SAIDI: Well, what you're dealing with is totally irresponsible, but also incompetent political class, but also a great deal of corruption, cronyism.
They have effectively captured the state. They are driving Lebanon into a failed state.
So imagine Lebanon, which was a middle income rising towards upper middle income country, now reduced to a Bangladesh. If I look at the salaries say,
of a soldier, that is now around $65.00 per month. That's a massive decline.
Minimum wage is below that in Bangladesh. And in the meantime, the politicians, in terms of the dysfunctional politics, don't really want to
put in place a government. All they are hoping for is that they will be able to tide things over until the next elections. That's what they're
hoping for right now, and they're going to -- they are using in effect --
GIOKOS: So, let's -- yes, so in terms of the elections ...
SAIDI: Lebanon has the --
GIOKOS: ... at the Prime Minister -- the Prime Minister, Saad Hariri resigning. He was trying to put a Cabinet together, it was rejected for the
third time in just a few months. So, who is really in charge here? Because the erosion that you speak of, plunging Lebanon into a level that we've
never seen -- and we know the World Bank is saying, this is one of the top three economic crises that we've experienced since the mid-19th Century. It
kind of shows you just the incredible erosion of wealth and quality of life.
So if there's a political solution here, why hasn't it been put together yet?
[09:25:00]
SAIDI: Because you're talking about a corrupt political class. It's effectively a mafia. They've got their money out, they got their money out
of the country. And so they're sitting pretty, but the rest of the population, of course, is being constantly impoverished and their financial
wealth completely eroded.
I mentioned, an 80 percent haircut. This has not happened anywhere in economic or financial history. The World Bank mentioned, maybe it's the
third biggest financial crisis. In fact, it's the first financial crisis, because real income per capita has declined over 40 percent and still
declining.
I mean, I don't know if people can imagine what that means. But it's a 40 percent real decline in income. So forget the Great Depression, which most
people think of. This is multiple times that.
GIOKOS: So, Mr. Saidi, you know, France is saying that they're looking to sanction individuals in the country.
SAIDI: Yes.
GIOKOS: We know that there's been sanctions being thrown around as an option. What is going to save Lebanon right now to force leaders or
politicians to take the right steps? And can we even see a reversal of the economic demise that we've seen? This is going to take years to reverse.
SAIDI: Yes, of course. Look, the international community, in my view, has to do four things. They've got to provide humanitarian aid to Lebanon. That
is essential. Food, medicines, and the like, education. But they also have to make it accountable so that they cannot give it to government. Second,
they need to make sure that elections happen in 2022 in full integrity, right? So, there is monitoring there.
Third, they need to impose sanctions on politicians and policymakers because they literally destroyed Lebanon. And fourth, I think, to answer
your question, you need to move to a new government as quickly as possible, that will sign and negotiate an agreement with the IMF.
What Lebanon needs is a massive equivalent of a Marshall Plan, something to the tune of about $75 billion. What I would like to say is that the crisis
that has happened over the past 20 months was manmade. This is not a natural disaster.
This is the deliberate policy to impoverish people so they import less, they consume less. What we need to do, and we know how to do it, we know
exactly what the reforms are, and we actually have the people. We have the economists, we have competent people who can actually make this happen.
It's going to take time. So, it's going to take five to 10 years, maybe, basically to recover. But what you need to do is to form a government as
quickly as possible, and that means the international community has got to knock their heads together, impose sanctions and force them to form a
government.
GIOKOS: Mr. Saidi, thank you very much for your insights. And of course, as you say, a lot of pain will come with reforms. And of course, it's going
to take a long time. Thank you very much.
SAIDI: Thank you.
GIOKOS: All right, let's move on now. And we are going to the market open and that is coming up next. Stay with us.
(COMMERCIAL BREAK)
[09:31:14
GIOKOS: Welcome back to FIRST MOVE. I'm Eleni Giokos. We are live from Dubai today.
Let's take a look at the markets, and global market weakness remains a major story this Monday. U.S. stocks have opened sharply lower on rising
fears of COVID variants. As you can see there, the Dow Jones is down one and a half percent.
Airline and cruise industry stocks are getting hit particularly hard. They were big losers in Friday's session as well. Companies in the news today
include the Universal Music Group, a SPAC controlled by billionaire Bill Ackman is pulling its deal to buy 10 percent of the firm because of U.S.
government objections.
Robinhood is one step closer to its expected IPO launch. The popular trading app announcing today that it hopes to price shares at between
$38.00 and $42.00 apiece, raising some $2.3 billion for the firm and valuing it at around $35 billion.
And shares of Zoom are zooming lower after announcing a deal to buy Cloud software firm Five9 for more than $14 billion. This is Zoom's largest
purchase ever. Five9 shares rallying on the back of that news, as you can see, up almost five percent.
All right, let's take a closer look at today's market weakness and everything to do with the market. We've got Brian Levitt joining me now. He
is the Global Market Strategist at Invesco. Brian, great to have you with us.
I mean, look, we know that this is going to be a volatile ride and the cycles are going to be fascinating as we navigate through COVID-19 and what
the pandemic means for the markets. But at the end of the day, we've seen a really positive outcome when it comes to what we're expecting on the growth
front in the U.S. But are there risks at play here that we need to look out for?
BRIAN LEVITT, GLOBAL MARKET STRATEGIST, INVESCO: Yes, of course, there's risks. I mean, I would categorize this as still being early in the cycle.
The reality is, though, we had a recovery phase that was faster than usual. We started to move into an expansion phase and now we're slowing.
And the reason we're slowing is a variety of different reasons. One, delta variant; two, monetary policy that's likely to start normalizing over time;
and three, we may be looking at a slowdown in fiscal spending, although that remains to be seen.
So all of that together has an economy that is slowing the market that had been up a substantial amount. And it's moving as a result of this expected
slowdown. Now, that doesn't mean the cycle lands, that doesn't mean that this is the end of the equity move. It just means that we're recalibrating
for a weaker economic backdrop.
GIOKOS: Yes, I mean, look, I find the inflationary scenarios playing out in the U.S. quite interesting. And here is the thing, right? You've
simulated your way out of this crisis. You've put money in the hands of average people. So that means an increase in money supply. I guess you need
some heat to be able to grow out of this.
What are you expecting in terms of monetary policy? And you're talking about a no normalization of rates. The last time that happened, it wasn't
such a great idea, it happened too soon. It created a lot of fear in the markets.
LEVITT: Yes, I'm in that same camp. I mean, all of this, if you look at the 10-year move, which had gotten up to around 175 and has moved down
closer to 120, has all really coincided with the Federal Reserve starting to talk about tapering asset purchases and bringing forward interest rate
hikes.
So, I think the market called the Fed out on this as a policy mistake and you astutely mentioned the past years like 2015 or 2018 when the Federal
Reserve tried to raise interest rates and it just didn't work and this time is probably likely to be no different.
[09:35:04]
LEVITT: So, any type of drawdown in the market here is the result of policy uncertainty or some type of uncertainty around the delta variant. In
my opinion, ultimately, the Federal Reserve is going to have to back off its tightening stance in order to once again steep in the yield curve some
-- alleviate some of the strength of the dollar. I think that's coming, and I think that that extends the cycle.
But right now, what we're dealing with is a market that has a lot of uncertainty around monetary policy and uncertainty around this delta
variant.
GIOKOS: So where do you go? Do you go where it's safe? Do you look for the next big thing?
I know that tech stocks were sort of the shining stars of the pandemic. So, what are you doing right now in terms of sector?
LEVITT: Yes, I would say you start to move a bit away. I mean, if you were overweight, this recovery deep-value oriented trade, then then I think you
start to move away from that. I suspect we're heading back into another slow economic backdrop that can go on for a long time. And in that
environment with a relatively flat yield curve, the growth of your parts of the market tends to outperform.
Now, don't get me wrong, if we have days like this that persists for a little or this is the start of, you know, garden variety drawdown or even
market correction, then you know, if you're that tactical, you'd want to be more defensive, oriented.
But if you're looking out over the next couple of years for an economy that's probably going to move more into a slowdown regime, then that's
going to be more of the growth stocks and the tech-oriented companies that had outperformed largely from the middle of 2011 through 2019.
GIOKOS: Thank you so much, Brian. Great to see you.
LEVITT: Thank you.
GIOKOS: That was Brian Levitt, the Global Market Strategist at Invesco.
All right, so oil prices are falling after a resolution is found to a dispute that threatened the future of OPEC. The UAE has agreed to the OPEC+
proposal to increase the supply of oil.
Matt Egan has the details on this. Great to see you, Matt.
Here's the thing, you're increasing supply at a time where demand is still kind of not back where it should be. So, what does this mean for oil
prices?
MATT EGAN, CNN BUSINESS SENIOR WRITER: Well, Eleni, I do think the oil market is a bit concerned. Obviously, financial markets are down across the
board this morning, but oil is taking a pretty big hit, and I do think there are some concerns that perhaps OPEC+ is moving too quickly to add
back supply, given these elevated concerns in recent days about the delta variant, which of course could hurt demand for gasoline and for jet fuel
and diesel.
But big picture, I do think that this is good news for drivers and really anyone who is hurt by higher energy prices. I mean, OPEC+ has finally
agreed after a bit of drama to add supply that a lot of analysts were saying was really needed here.
This surprise Sunday meeting by OPEC+, they agreed to add 400,000 barrels per day each month beginning in August. The group is going to keep adding
barrels until it fully unwinds those unprecedented cuts that were implemented last spring when oil went negative.
OPEC+ expects to get back to pre-COVID levels by September of 2022. The other key here is that the overall agreement is going to be extended until
the end of next year, and this was really a hard fought deal.
As you mentioned, the UAE and Saudi Arabia, they had to overcome some differences here. They had to allow the UAE to boost its baseline level,
and they also said that Saudi Arabia, Russia, Kuwait, and Iraq are also going to increase those so-called reference levels.
The last point here, Eleni is that you know, this is a big deal for OPEC+ as a group. There were some concerns that this infighting could lead to
chaos where basically, it was every man for themselves and they would have, you know, started pumping whatever they wanted to, and I do think that the
fact that they reached a deal removes the risk of an all-out price war.
GIOKOS: All right, Matt, thank you very much. And Brent crude right now down over three percent. Appreciate your insights.
All right, still coming up on FIRST MOVE. Some are calling it Freedom Day in England. What it means for the country's economy as COVID-19 cases
continue to surge. That's up next.
(COMMERCIAL BREAK)
[09:42:10]
GIOKOS: The British government calls it Freedom Day in England. Prime Minister Boris Johnson ending most mandatory COVID-related restrictions,
but the mood is cautious as COVID-19 cases spike there.
The Prime Minister himself forced into isolation because of contact with a COVID carrier after initially trying to claim an exemption from the rules.
Phil Black is live in London for us with a little bit more.
Listen, Boris Johnson, a couple of weeks ago said that it will be left up to pubs and restaurants to make a decision about whether they're going to
be using the app, whether they're going to try and mandate mask wearing. But I can see you in the streets of London.
So, what are you seeing right now? We're talking about a full on opening of the economy, and no one adhering to any kind of rules because there aren't
any, right?
PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Yes, in theory, there are no rules. There's now just guidance, it comes down to personal responsibility.
What that means in practice, Eleni, is that it is up to employers, to organizations, to individuals themselves to decide what is right.
In the sense of business and employers, it's a difficult job. They now have to determine what is best for their employees, for their customers, and
they have to try and enforce that without the weight of law behind them.
So in a sense, freedom, but also a lot more responsibility. But that's the idea. The idea behind this is to do away with the rules, allow people to
choose for themselves. And so hopefully, create an opportunity where there can be more economic activity, as well.
All of these things are wanted. The question is whether or not now is the right time? Because there is also a further complication for business in
particular, and that is, the circumstances that the U.K. and England finds itself in is one where the virus is running hot, where infection rates are
very, very high.
What that also means is increased absenteeism, particularly at the moment when there remains a policy of people who are identified as contacts --
close contacts of those who test positive. Well, they also have to isolate as well. This is the so-called ping-demic that has been described in the
British press at the moment. And it is said to be hitting some businesses, some industries, particularly hard with hundreds of thousands of people
being contacted by the track and trace system here and told to isolate even though they themselves may not believe that they are infected, even though
they may be for example, fully vaccinated.
This policy remains in place for another month or so. And the fear is this could be a real dent towards economic activity here. So, as with so much
about the current situation in England and the U.K., nothing is straightforward. There is no clear good news, but the government has
decided to persist with this policy to drive into Freedom Day if you like, even though it is doing so in circumstances that are very different to that
which it initially predicted doing so.
[09:45:10]
BLACK: The infection rates are incredibly high. That's not how it was supposed to be, and that what that also means is that the outcomes are
really uncertain -- Eleni.
GIOKOS: Thank you so very much, Phil.
All right, next on FIRST MOVE, from shaking up the retail space to shaking up travel into space itself. Jeff Bezos is just a day away from the journey
of a lifetime. What it means for the future of space exploration, next.
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[09:47:42]
GIOKOS: Countdown to launch. In less than 24 hours, Jeff Bezos will join a very exclusive club of billionaires by blasting off into space. He is
scheduled to rocket to the edge of space with his company, Blue Origin. Also on board will be his brother, Mark, as well as 18-year-old Oliver
Daemen, and 82-year-old aviator, Wally Funk. They will be the youngest and oldest people ever to travel into space. It will come just nine days after
Richard Branson lifted off with Virgin Galactic.
Rachel Crane has more.
(BEGIN VIDEOTAPE)
CRANE (voice over): Preparing for a rocket powered 2,300-mile-per-hour excursion to the edge of space. Amazon founder, Jeff Bezos will take his
astral journey on the New Shepard, a reusable rocket developed by his company, Blue Origin.
BEZOS: I want to go on this flight because it's the thing I've wanted to do all my life. It's an adventure. It's a big deal for me.
CRANE (voice over): But more than just an adventure, New Shepard was designed to shuttle up to six paying customers more than 62 miles above the
Earth's surface for a few moments of weightlessness and panoramic views, earning the fliers their astronaut wings.
While the rocket which is fully autonomous has flown 15 test flights, none of them have had humans on board, until now.
Bezos's brother, Mark Bezos will accompany him, and 82-year-old, Wally Funk.
M. BEZOS: Wally, good to see you.
FUNK: You have a hat on.
M. BEZOS: I know.
FUNK: Do not take it off.
M. BEZOS: And I brought you one.
CRANE (voice over): Funk, a pilot who trained for NASA's Mercury Program, but was denied the opportunity to go to space because of her gender.
UNIDENTIFIED MALE: Right for you right here, $28 million, looking for $29 million.
CRANE (voice over): An additional seat was auctioned off with the winning bid ringing in at $28 million. The winner has since had scheduling
conflicts according to Blue Origin. So, 18-year-old, Oliver Daemen is now filling that seat, kicking off the company's commercial operations. So, if
all goes to plan, both the oldest and youngest person ever to travel to space will be on this flight.
The astronauts have been going through their training at Launch Site One, which includes a flight simulator that we got to experience. The company
says they have two additional crewed flights scheduled for 2021.
[09:50:02]
CRANE (on camera): Oh wow. That's a thud. Seventy-five people participated in the auction. What does that tell you guys about the market for these
flights?
ARIANE CORNELL, DIRECTOR OF ASTRONAUT AND ORBITAL SALES, BLUE ORIGIN: People have global interest in coming to fly to space. I think it is part
of the human experience of wanting to explore, wanting to see new perspectives. And so, we think that our flight on Tuesday is really the
next step.
CRANE (voice over): Bezos's flight comes just nine days after Virgin Galactic founder, Richard Branson took his trip to space. And with the
future at the forefront, Bezos's ideas go much deeper than space tourism.
J. BEZOS: This is the Blue Planet and this is the planet that we have to save. This is the good planet. We will move all heavy industry off Earth,
all polluting industry will move off Earth and Earth will end up Zone Residential.
CRANE (voice over): But for now, Bezos will experience his ultimate adventure, while helping propel us into the future of space travel.
(END VIDEOTAPE)
GIOKOS: Our next guest knows the value of space all too well. Chad Anderson is the Managing Partner of Space Capital, an early stage venture
capital firm that invests exclusively in space-based technologies.
Chad, thank you very much for joining us. Look, I get it, it's going to be about the human experience, getting to the edge of space. But it's actually
more than that. It's about the infrastructure. It's about the data collection.
Branson was the first to get there, but who is going to have the longer -- long-term impact, would you say or the biggest long term impact?
CHAD ANDERSON, MANAGING PARTNER, SPACE CAPITAL: Yes, this is certainly a very important step. I mean, we now have two suborbital vehicles that have
been privately funded and privately developed that are taking humans to suborbital space, and they're joining SpaceX, which is taking, you know --
has taken NASA to orbit twice now and is launching fully commercial missions -- multiple fully commercial missions later this year.
So, there has been a lot of comparison between Blue Origin and Virgin Galactic given that they're both launching within nine days of each other.
But I think, you know, Blue Origin's ambitions are much more aligned with SpaceX. Although progress is a bit of a different story.
You know, Blue Origin is, this is one step for them. But they're also looking into developing larger rockets, orbital habitats. As Bezos just
said in your interview, you know, he's really focused on moving heavy industry off Earth, which is much more aligned with SpaceX in terms of
their greater ambitions, larger vehicles with Starship, Starlink going to the moon and Mars.
GIOKOS: That's exciting, right? Taking heavy industry off Earth. What a thought.
I want to talk numbers here. So we know, huge spending on R&D, on infrastructure, building the ships. So when you saying you're an early
investor in this, what kind of margins are we talking about here? And you know, and the one number that I came across is that, you know, it costs
around $2,500.00 per kilogram in terms of to get a ride into orbit.
And when we were talking about this a few years ago, we were talking about $20,000.00 per kilogram. So it seems that prices are coming down. But
reality is, yes, you need to spend big to be able to get there.
ANDERSON: Yes, prices have fallen precipitously and that's really been driven by SpaceX. They lowered the cost to get the orbit, but they also
brought transparency to the market through basically just publishing their pricing, which was unheard of before.
So most of the activity, I mean, we've been operating in space for decades, but really, it's a new category for investors that's really emerged over
the last 10 years based on this increased accessibility, and so the rockets and the satellite hardware, all of this is very important infrastructure,
but the real opportunity for investors is in the data that's coming from those satellites.
And so that, as early stage investors, that's really what we're focused on. Starlink, OneWeb; Amazon's project, Kuiper, these low Earth orbit
satellites that are connecting the planet, the people who don't have access to broadband internet, we're not investing in those multibillion dollar
capital expenditure products and projects, but we are looking for the types of data plays that are going to be built on top of that infrastructure.
GIOKOS: Okay, so let's talk about the fact that we've seen in terms of investment into space. The quarterly report that you've just come up with
showing that Q2 was the fourth largest quarter on record for total investment into the space economy and then does that then cut across the
travel element, the data element, and all the other you know, branches of what we're looking at when it comes to the space economy?
[09:55:01]
ANDERSON: Yes, absolutely. I mean, the way that we view the world is in terms of the infrastructure, the distribution, and the applications that
are built on top of that infrastructure, and this is the fourth largest quarter in record in terms of private equity investment into the space
economy, but the largest overall for infrastructure investment.
And so, we are monitoring closely to see the types of applications that are going to be built on top of this unprecedented new infrastructure, and that
includes, you know, the human spaceflight element which is really important in terms of helping the public to understand the progress that is being
made here and the level of progress.
But we're really interested in Earth observation, for example, and the data that is being collected by satellites developing, unprecedented amounts of
data about our planet that is allowing us to do business over the horizon and is the invisible backbone of our global economy.
GIOKOS: All right, chad, thank you very much. We will catch up very soon. Thank you for your insights.
All right, so CNN will have full coverage of the launch scheduled for 9:00 a.m. on Tuesday if you are watching in New York, and that would be 5:00
p.m. here in Dubai.
That is it for the show. Thank you so very much for joining us.
I'm Eleni Giokos. "Connect the World" with Becky Anderson, up next.
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