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First Move with Julia Chatterley
U.S. Futures Higher After Monday Sell-Off; UK Unveils $900 Million Support For Hospitality Sector; Germany Planning New Limits On Private Gatherings; Biden To Announce Plan For Free At-Home COVID Tests; Turkish Lira Loses Value After Monday's Surge; Tech Investors Eye Likely Rate Hike In 2022; EU Approves Novavax's COVID-19 Vaccine; China Fines "Live- Streaming Queen" $210 Million For Tax Evasion; HBO Max Releases "Harry Potter" Reunion Trailer; Biden Welcomes New Puppy To White House. Aired 9- 10a ET
Aired December 21, 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]
ALISON KOSIK, CNN ANCHOR: Live from New York, I'm Alison Kosik in for Julia Chatterley. This is FIRST MOVE. And here's your need to know.
Restrictions and rescues. European governments scramble to tackle Omicron.
Holiday hopes. President Biden to tell vaccinated Americans not to cancel holiday plans.
And rollercoaster ride. The Turkish lira surges after President Erdogan introduces new savings plan.
It's Tuesday. Let's make a move.
(MUSIC PLAYING)
And a warm welcome to FIRST MOVE. Great to have you with us this Tuesday.
Let's begin with a look at the markets. And it's an improved tone on Wall Street after Monday's more than 1 percent slump for the major averages.
European stocks bouncing from the previous sessions, losses too. Sentiment looking better today but uncertainty over Omicron's health and economic
impacts leaving markets vulnerable to fresh bouts of volatility especially during this thinly traded holiday season.
Oil bouncing from Monday's more than 2.5 percent losses, too. Oil remains volatile as governments in many parts of the world impose new COVID
restrictions that could weigh on energy demand.
Meantime, higher close in Asia. Chip stocks rallied after a strong profit report from U.S. tech firm Micron Technology.
All right. Let's get more now on today's market picture in our drivers.
And let's turn to Christine Romans. She joins me live.
Christine, great to see you.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi! You, too.
KOSIK: You know what I thought when I looked to futures this morning was what a difference a day makes. But the reality is little has really changed
from what happened yesterday or over the weekend to today. So, what's moving the market today?
ROMANS: You know, there's a little of a bounce back this morning. The tone set really in Asia with a strong close there. But let's remember where we
are for the year.
It has been a strong year for the American stock market and for stock market averages here and S&P 500 up more than 20 percent so far this year.
The Dow has had a 15 percent move this year. So, I don't think it's surprising to see a little volatility heading into the end of the year.
This is the short in trading week as folks try to position and take some money maybe off the table and book some profit. Especially since Omicron is
spreading faster in the U.S. than we thought.
It's got a lot of the big economists, downwardly revising their forecast for GDP growth in the first quarter and second quarter of next year both.
Because of Omicron and also because Build Back Better. The president's signature landmark attempt to remake the American economy, focus toward the
working class, you know paid for by corporations. That looks like it's on the sidelines now because of Senator Joe Manchin. That's another reason why
you are starting to see a little bit of uncertainty about just how strong the economy will be in the beginning of the year.
KOSIK: What do you think is the next catalyst for the market though? Is it earnings, is it the Fed? I mean could the Fed change course even now. Could
it be Build Back Better? I mean could it be split up into parts where pieces of it pass? What do you think?
ROMANS: I think that last point is really important. I think there is a lot of headlined risk and upside potential, frankly, in the market if you start
to see pieces of this bill come back to life. Because remember these investments in the working class are things that would put money into
people's pockets and keep spending going. That's why economists have had about one percentage point higher expectation on earning - or on GDP in the
beginning of the year if you had a Build Back Better there.
I think it's important to talk about profit margins though here too. I mean, is - we kind of flying under the radar. But you know, profit margins
are at record highs. I mean companies have managed so well during COVID that even the real risk of three interest rate hikes in the beginning of
next year hasn't taken that much really off of the market overall.
And I think that's because overall, companies are earning. They have great earnings power and earnings potential. And that's expected to continue into
next year, especially if you start to get a handle on COVID-19.
KOSIK: Yeah. Something we can easily forget about as we see these huge gyrations in the stock market that these companies are actually doing
pretty darn well.
ROMANS: Yeah.
KOSIK: Christine Romans, thank you so much.
ROMANS: Nice to see you.
KOSIK: Good to see you too.
A short while ago, the UK unveiled $900 million worth of financial support for the hospitality sector. It is one of three special measures introduced
as Omicron surge hits the holiday season.
Anna Stewart joins me now.
So, Anna, go through with me, what you heard about this rescue for the hospitality sector.
[09:05:02]
ANNA STEWART, CNN REPORTER: Well, it's a long-time coming is what I can tell you. And these measures aren't nearly as extensive of course as when
businesses were forced to close their doors. It gives cash to those businesses who need it most, and there is largely in hospitality,
restaurants, bars. Also, some venues like in the arts. So, opera houses, theaters, and so on.
And that's because they are seeing mass cancellations before Christmas, despite there being no lockdown but the public is so concerned about the
spread of Omicron, and not wanting to get it right before Christmas when they want to spend time with their loved ones.
So, here's what the chancellor has announced.
(BEGIN VIDEO CLIP)
RISHI SUNAK, UK CHANCELLOR OF THE EXCHEQUER: Well, I know the current situation is very difficult, especially for those in the hospitality
industry. So today, we're announcing three new measures to help people and businesses.
Firstly, we're announcing a billion pounds in financial grant support which means eligible hospitality companies will be able to claim a cash grant
worth up to 6,000 pounds.
Secondly, we're providing 30 million pounds to top up our successful cultural recovery fund to support institutions like theaters and museums.
And lastly, we're reintroducing our statutory sick pay rebate scheme so that small and medium-size companies can claim compensation for the
government for the costs of sick pay for their employees.
Taken together, I am confident that these measures will help hundreds of thousands of businesses and the millions of people that they employ.
(END VIDEO CLIP)
STEWART: Now, the chancellor for that grant figure for hospitality businesses up to 6,000 pounds, nearly $8,000, to put that into context.
That's sort of level of support they were actually getting during the lockdowns when they couldn't open.
So, that is welcome news particularly by the lobby group, UK hospitality, right before this news came in. They said that over half of the venues they
were speaking to. So, a 40 percent decline in revenue just over the last weekend. And anecdotally, I can tell you, Alison, traveling around London,
it has emptied. Restaurants, bars, shops are looking much, much emptier.
KOSIK: Yeah. It's really -- is incredible how it just feels like a ghost town even here in New York City.
You know if the UK does impose restrictions, do you think the government will have to give more -- even more support? I mean could we see a return
of the furlough scheme?
STEWART: You know, that is a big question that we are all wondering. And particularly given the prime minister said that he's not going to take
restrictions off the table for the future. I think lots of people are worried that will happen and will the furlough scheme make a comeback?
The British (INAUDIBLE) have welcomed this new just in the last hour. But they have said it's a positive starting point, why the support package may
well be needed. And if there are restrictions, you could see a return of the furlough scheme.
But that is a decision that this government will not take lightly. It costs $95 billion between March last year when it was introduced and when it
wrapped up in September this year. And you know, it was really hard to take businesses off that life support that they had gotten used to. They're
going to have to balance that, though, with the economic picture here. Inflation hitting above 5 percent last month. The economy barely growing.
October was the last month GDP data we got. It came in at 0.1 percent. So, there are some big decisions to be made in the coming weeks as everyone
just looking at that data. Does this surge in cases result in a surge in hospitalizations, in deaths and does that mean more restrictions are
coming? In which case, we could see, yeah, a return of all sorts of financial support. Alison?
KOSIK: All right. And that is data that we will be watching along with you.
Anna Stewart, thank you so much for breaking all that down.
European nations are scrambling to contain the threat of the Omicron variant. London, Paris and Rome are among cities canceling New Year events.
As Germany plans to limit private gatherings to up to 10 people from next week.
Fred Pleitgen is in Berlin for us. You know we are just days away, Fred, from the holidays. I know that you are expecting to hear from the German
government about restrictions. France also talking about new measures. Tell me more about what you are hearing.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, Alison. Yeah. So, the Germans are saying that they really want to be
proactive with this. It's quite interesting because obviously, we have a new government here in Germany that just went into office.
And they say they really want to make sure that they act early so that they can try and contain this Omicron variant. Obviously, Olaf Scholz, the new
chancellor, he is meeting with state leaders today.
But he also has a new health minister called Karl Lauterbach and he is someone who is an expert on the coronavirus, who is also a medical doctor
as well, who has actually worked in vaccination centers. And he essentially says that Germany needs to do something before the Omicron virus takes hold
here.
And one of the things that he said time and again over the past couple of days is that he is in very close contact with the authorities in the United
Kingdom to see how things are developing there. And to then therefore in Germany see what measures they need to take in order to try and at least
slow down the Omicron variant.
And one of the things that the Germans said they do want to do is they don't want these measures to take hold during Christmas. So, it looks as
though Christmas, itself, seems to not be affected by these new measures.
[09:10:02]
However, from what we are hearing from the German government, they are set to take hold on the 28th of December. And obviously, therefore, have a
severe impact on New Year's Eve celebration. And we live the core of it is what you've just mentioned, it's those public gatherings being limited to
no more than 10 people, and that counts both indoors and outdoors. But also counts for both vaccinated and unvaccinated people as well, so that's a
general thing. And that certainly will obviously make it very difficult to have any large New Year's celebrations.
Also, by the way, this goes hand-in-hand with a ban on fireworks that the Germans have put in place this year as well. But they also say, obviously,
this is a very serious situation. So, therefore, any sort of larger public events, public sports events, for instance, also, will be severely limited.
For instance, the German soccer league and other professional leagues as well will have to play without spectators.
And you know one of the other things that the Germans say they do definitely need to do is speed up their booster vaccination campaign. It's
really twofold thing, trying to restrict contact, speed up the booster campaign. They have said they understand, they're not going to be able to
prevent the Omicron variant from taking hold here. They believe that that next wave of Omicron is probably going to hit in the middle of January.
They say the thing that they can do or try to do at least is slow it down to make sure that the healthcare system in this country does not get
overwhelmed. Alison.
KOSIK: Yeah. This requires self-enforcement, though. I mean you know, it's the holidays, people are getting antsy and limiting these gatherings to 10.
You know, enforcing that is going to be interesting. It's going to have to be self-enforcement, I think.
Fred Pleitgen, thank you so much.
In Washington, President Biden is set to announce major new steps as Omicron becomes the dominant strain here in the U.S. The plans include
distributing free at-home test kits and mobilizing military members to help hospitals.
Jeremy Diamond joins us now live with more.
So, Jeremy, what is expected to be, you know, entailed in these additional steps in this fight against COVID-19?
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Well, listen. President Biden is going to be announcing several new steps to try and show a
stepped-up federal response in the face of this wave of cases that we are seeing on the backs of the Omicron variants. And now accounting for nearly
three-quarters of new cases over the last week.
President Biden is going to announce his first plan to send about a half a billion to purchase first, a half a billion free at-home COVID tests and
send them to any American who requests them via a new website that's going to go online beginning next month.
There is also going to be expanded federally run coronavirus testing sites with the first one being established this week in New York City. One of the
areas that has been the hardest hit by this new wave of coronavirus cases.
Also, already new emergency medical teams are en route to some of the states that have been hardest hit by this latest surge of coronavirus
cases. And also, the president plans to mobilize about 1,000 military service members, including doctors, nurses, and other healthcare
professionals who can be deployed to hospitals that are being overwhelmed by cases over the coming months.
But really, what the president will be doing today in his speech today, other than outlining these new steps is also delivering two distinctive
messages.
One of them to the unvaccinated Americans, warning them of the risks that they face over the coming weeks and months of serious illness and
hospitalizations as cases skyrocket.
And another message to vaccinated Americans, particularly those who have gotten that booster shot, telling them that they can go ahead and continue
with their holiday travel plans as long as they continue to practice safe commonsense public health measures and reassuring them that they are,
according to data we have right now, well protected from serious illness and other serious outcomes from this Omicron variant as long as they have
been fully vaccinated and particularly if, indeed, they have been boosted. So those will be the dualling messages that the president offers. And he
will make very be clear that as of now, the United States is not looking to go into another lockdown, not looking to shut down parts of the economy.
KOSIK: These at-home COVID tests, Jeremy, that will be supplied to Americans? I mean right now, it's hard to just buy one if you go to the
grocery store here or the drug store here in the U.S. What about supply? Is there enough of that to give to Americans?
Yeah. I mean clearly, every public health expert you talk to say that we do not have enough testing here in the United States. It's not accessible
enough. It's not available enough. So, this is going to be an effort to get more tests into the hands of Americans.
The White House also making clear that it will continue to use as necessary the Defense Production Act to ramp up production of those tests. Clearly,
more is needed, if you think about a half a billion tests, that may sound like a lot. But this is a country where the population of 330 million-plus
American. So, it's obviously that testing supply can go very quickly.
[09:15:02]
And beyond that, of course, there is a question of what do Americans do right now? You know these tests aren't going to come online until the
beginning of the next month. There's also this plan to insurance, reimburse Americans for the cost of tests that they purchased themselves, that's also
not going into place until next month. So, there is this gap of the next few weeks that will be difficult for many Americans.
KOSIK: OK. And President Biden's official announcement coming in about five hours. He will speak to the American public.
All right. Jeremy Diamond, thanks very much.
And these are the stories making headlines around the world.
The Turkish lira as the rollercoaster ride continues. A jump more than 20 percent against the dollar after President Erdogan unveiled measures to pop
up the currency yesterday. But it dropped again since then. And it's still close to record lows against the U.S. currency. Right now, trading at about
13 per dollar.
Arwa Damon is live in Istanbul with more.
It's safe to say this is certainly whiplash with the Turkish lira.
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's whiplash, Alison. And it's actually quite confusing. I mean this morning, take a tabloid,
meet up with friends, meet up colleagues, everyone is literally looking at each other trying to figure out exactly what is happening with their
country's currency. How is it ping ponging all over the place to such a degree?
Look, when most people went to bed last night or at around this time yesterday, the lira was up at 18. Then President Erdogan makes this
announcement. One of many measures that are going to be put into place but one of them particular is that people who will put their lira into fixed
rate interest accounts whether for three, six, or 12 months. If the interest that they get does not offset the loss of lira against the dollar,
the government is somehow going to make up that loss.
And so, due to that, all of a sudden, this morning, we saw the lira all the way down at 11. Now, throughout the course of the day, it has gone back up
to 13, 14, to the dollar. But it's all over the place.
And, frankly, a lot of Turks are trying to figure out exactly what is going on. Because Turkey has been through this sort of economic crisis before in
the `90s and the `80s and even in the 2,000s -- early 2,000s. But what makes this particularly unnerving for the population here is this up and
down fluctuation.
Many people will tell you, well, look if it was just a steady decline, we could begin to adjust to that. But this all over the place really has
people's heads spinning. And it does deal quite a psychological blow to the population who are unsure how to manage their own finances. The government
has also announced a number of other measures to try to ease the burden on businesses and on those who have retirement savings account. But suffice to
say, this is a very confusing time for the Turkish population.
KOSIK: Yeah, with a huge impact on the population.
Arwa Damon, thanks so much.
Still to come on FIRST MOVE.
The EU approved a fifth COVID-19 vaccine. The CEO of Novavax on the breakthrough shot.
And China's live streaming queen is hit by a $200 million fine as Beijing reigns in celebrities.
(COMMERCIAL BREAK)
[09:20:00]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.
And U.S. stocks still look set for a higher open. A turnaround in sentiment after Monday's across the board losses.
The S&P 500 has fallen for three straight sessions. Not only on Omicron concerns, but also because of uncertainty over U.S. fiscal and monetary
stimulus.
The S&P however still up some 20 percent year-to-date. It hit record highs a little over a week ago.
Nike meantime on track for strong gains. Shares set to rise more than 4 percent after the sports apparel giant reported better-than-expected
earnings in sales, driven by strong growth in North America. Nike says it is in a much stronger competitive position now than before the pandemic.
Joining with us her market and economic insight is Kristina Hooper. She's the chief global market strategist at Invesco.
Kristina, great to see.
KRISTINA HOOPER, CHIEF GLOBAL MARKET STRATEGIST, INVESCO: Alison, great to see you, too.
KOSIK: We really have to keep tabs on this market because it literally changes every day. They were by the - you know by the weekend headlines of
the spread of the Omicron variant. Today it's a different story. But there is more uncertainty into play here. Talk with me how investors should
approach the market, one that really just seems to be reacting to these fast-moving COVID headlines.
HOOPER: Well, we always encourage investors to take a long-term perspective, which means not getting rattled by headlines. Clearly, though,
we are going through a rough patch right now, where markets are really re- assessing whether or not the reopening continues and are coming to the realization that we might see some small pause in that reopening. Having
said that, though, I don't think it should change anything that investors with a longer-term Horizon are doing, except perhaps look for opportunities
created by these selloffs.
KOSIK: OK. So, what are some of those opportunities that you see at this point?
HOOPER: Well, we've seen this mass selloff. Stocks arguably indiscriminately have sold off in the last few days. And so, investors
really should be sharpening their pencils and saying, what are stocks that I wanted to own that I view as too richly priced to own. Perhaps this is a
better entry point.
And now, I have to give the caveat though that we are likely to see continued volatility over the next few weeks. Because as you mentioned,
it's not just Omicron, which is likely to continue to spread at a fierce pace. But we, of course, also have concerns about a drop in fiscal stimulus
as we head into the next year. And, of course, a reduction in monetary policy accommodation. None of these things should matter for the long term.
But they could create more volatility in the short run.
KOSIK: Do you see the Fed wavering it all? I know that the Fed kind of made it clear that it's accelerating, it's tapering. It's made it clear that
it's going to go ahead and raise interest rates beginning next year.
But if you look at what's happening in the bond market, bond yields, you know they're back above 1.4 percent. But what is happening there is kind of
a head scratcher because yields are still pretty low.
I guess, do you think there is doubt coming into the mix about the Fed's projection for higher rates? I mean is there thinking that until we get the
pandemic under control, that the U.S. just cannot handle higher rates?
HOOPER: Well, the Fed has always tried to in recent times retain as much flexibility as possible. And really what we've seen the Fed do over the
last few months, in particular, is say that we can go in a variety of different directions.
Yes, right now, we're going to accelerate the taper. But we are going to be very much data dependent and there is no strong correlation between when
tapering ends and rate hikes begin.
[09:25:04]
So, the Fed has retained that what we call optionality. And that makes a big difference. That means that we could see the Fed easily reverse course
if it views Omicron as a very significant threat to the U.S. economy.
KOSIK: Do you agree with the growth outlook projections that have been dimmed, that have been lowered, not just by Goldman Sachs, but from Moody's
as well, predicting 2022 will see slower growth?
HOOPER: Well, I think as we sit here today, there are a variety of different paths the U.S. economy, and quite frankly, the global economy
could follow. Certainly, the base case would suggest that we see a slight decrease in growth projections assuming that we don't get fiscal stimulus.
And, of course, given that reopenings are being tossed because of Omicron.
But the reality is that there is a best-case scenario as well, where Omicron because it is so incredibly contagious crowds out Delta. And it
truly is as mild as we are seeing could, in fact, bring a premature or a quicker end to the pandemic than many had expected.
So, right now, where we sit, there are a variety of different paths. And that's why the Fed needs to be data dependent. And dependent upon how this
unfolds. Because there really are few different scenarios that could potentially take place in 2022.
KOSIK: OK. Still a lot up in the air but you know we have to remember even with these bouts of selloffs that we have, S&P 500 still up 21 percent.
And Nasdaq, which is at a two-month low still up 16 percent for the year.
Kristina Hooper, thanks so much for your analysis today. The chief global market strategist at Invesco.
And we'll be right back after the break.
(COMMERCIAL BREAK)
[09:30:20]
KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.
And don't adjust your screen. You are seeing a bear ring the opening bell for the New York Stock Exchange. This is a bear from cloud computing firm,
Snowflake, ringing the opening bell and waving his paws everywhere.
U.S. stocks are up and running this Tuesday.
A risk on for markets with the S&P 500 on track for its first positive close in almost a week. Some relief, programs, that President Biden will
not announce more COVID-related restrictive health measures. That expected to happen during a speech happening later today in about five hours.
That said, Omicron now accounts for more than 70 percent of the new cases reported in the U.S., just weeks after being detected. It's a stunning rise
that raises fresh fears about how the new variant will affect reopening.
Concern over how riskier assets might perform in a less accommodative monetary policy environment also weighing on sentiment. The Nasdaq now down
more than 5 percent this past month. A more substantial drop in the S&P.
The Small Cap Russell 2,000 down 8 percent the past month as well.
All right. Let's get more now on what's moving the markets with Dan Ives. He's the managing director of Wedbush Securities.
Great to see you, Dan.
DAN IVES, MANAGING DIRECTOR, WEDBUSH SECURITIES. Great to be here.
KOSIK: You know after hearing from the Fed with you know just the expectation that interest rates will be moving higher next week. You know
we've seen tech get crushed. The Nasdaq, even though it's up 16 percent still for the year, it is at a two-month low. Do you think it was overdue
for a sell-off or are we seeing the Nasdaq oversold at this point?
IVES: Look, I think with the Fed now putting those goal posts out there, you are starting to see that risk off market. You know a lot is the
valuation framework for tech stocks. So, you are starting to see everyone head for the elevator in terms of how this high beta names. I believe this
is a digestion period, not the start of a negative sort of trend going into 2022. It is forth industrial revolution going on across cloud, cyber
security, EV, as well as Artificial Intelligence. We're bullish on tech. This is a buying opportunity. We have a 19,000 Nasdaq target for 2022.
KOSIK: So, you are not claiming that tech is dead just yet. So, talk with me about specifically let's say where in cyber security are some of the
best investments? I know that companies are finally taking cyber security seriously.
IVES: Well, I think that's what you have to separate what's happening on a macro to fundamental. You even want to show it micron from the chip
perspective. You will get the cloud shift to what we're seeing cyber security means like Zscaler, CrowdStrike, CyberArk. You know I think there
are some of the names everything and their benefit as well as palo alto. And I think in terms of cyber security this is just the start of a golden
age, along with CloudWare, Microsoft continues to be our favorite.
KOSIK: What do you see with cyber security this is becoming a golden age? What are the things that are sort of catapulting it into that space?
IVES: It's the threat nature. I mean, if you look at the threats we're seeing, put bad actors and nations stage, it's unlike anything we've ever
seen. Especially as more enterprising governments move to the cloud, more and you're exposed. And that's why you start to see you need to protect
those end points, which is why cyber security and cloud has almost become a perfect storm and demand. And I think you're going to see more and more.
These are the sub sectors, cloud and cyber security that outperform along with our view that Apple remains our favorite FAANG name in terms of ways
to play 5g and this sort of consumer cycle that continues to playout, not just in the U.S. but globally.
KOSIK: 5G, we haven't talked about 5G in forever. So, let's talk about 5G. Where do you see it going in 2022?
IVES: I think when you look at 5G, I think that you can play the carrier in terms of the likes of Verizon, and AT&T. And then you look at the
facilitators of this. I think Apple continues to be is the best 5G play along with Qualcomm. Because I think there is a chip way to play it. Also,
Marvell or other ways to play 5G.
And I think it all comes down to like look at the fundamental stories that are starting to play out. Look at Micron's numbers last night. I think it
indicated to us just bullishness for chips. We think chips shortage starts to alleviate in the first half of 2022. There is almost a dark storm for
tech stocks. And I think 5G, another way to play the international play would be names like Samsung. I think that's going to be front and center at
CES in early January.
[09:35:05]
KOSIK: You also mentioned Apple. And Apple has really become sort the safety stock for so many investors. But some are predicting this is a stock
that could be a bubble that's expected to pop next year. Do you agree with that?
IVES: Look, I mean, they're haters. They hated 1 trillion. At 2 trillion, they despise it. And at 3 trillion, they'll be screaming you know into the
empty forest. Because look, to me, it's about a re-reading in tech stock. Look at Apple, not just because iPhone cycle that continues to play out.
You look at services, that's a big part of the re-rating. We believe Apple as well as Microsoft are both $3 trillion market caps in 2022. The haters
will hate. We continue to be -- this is a buying opportunity.
KOSIK: Where do you see the biggest opportunity for 2022? Is it - is it with EVs, even with the Build Back Better plan being shelved, meaning those
incentives to buy electric vehicles not being given to Americans? Is the EV space one of the trends that you are seeing really, really get stronger
next year?
IVES: I think EV is the biggest transformation to the auto industry since 1950. And it's not just pass-over, it continues to be our favorite way to
play it. You look at names like GM and Ford. I think those are re-ratings stocks as they start to become more successful on EVs. You can pureplay
names like Rivian, in terms of ways to play it. And all seem in supply chain.
I mean we view this as a $5 trillion market over the next decade. EVs, even though it's kind of a glass at that view right now. I think we've looked
back at this period of the year from now and a lot of these stocks have really been some of the biggest outperformers of the overall disruptive
tech ecosystem.
KOSIK: What's the way to play these EVs though? Should you buy an ETF that includes you know lithium batteries and just sort of runs the gamut? You
know how do you separate the winners from the losers? Or you just kind of do you buy a group?
IVES: I think that's a great point. I think you have to play the supply chain plays. Those are names like Glide, Cycle, ChargePoint. EVgo. I think
you want to play some of the infrastructure. You want to play some of the installer, names like GM and Ford in terms of a re-rating. And then you can
- you then there's pure-play names like Tesla and Rivian. You can then see they are called like expensive stocks in the eyes of many, those are really
some of the core ways to play in terms of this transformation that we are seeing, especially given Tesla, that stranglehold that they have on EV
market share.
KOSIK: OK. Looking back at 2021, before we leave this year behind, what tech trends do you think will go down in history this year?
IVES: I think it's about cloud. I mean if you look at the cloud shift, now over 40 percent enterprise moved to cloud. COVID clearly accelerated that.
But we're talking about what's really been one of the biggest you know changes to the IT infrastructure in the last 30 years, it's all about
cloud. That's why Microsoft is where it is.
KOSIK: OK, Dan. I feel so much more tech savvy after talking with you this morning. Thanks for your time.
IVES: Thank you.
KOSIK: Up next, the EU approves Novavax's COVID-19 vaccine. I will be talking with the CEO.
(COMMERCIAL BREAK)
[09:40:00]
KOSIK: The European Union has approved Novavax's COVID-19 vaccine. This is the fifth shot the block has authorized. But it is the first that is
protein-based. Novavax says that technology is older and easier to produce and ship than the mRNA vaccines. The first shots are expected to be
delivered in January.
Joining me is Stanley Erck. President and CEO of Novavax.
Stan, great to see you.
STANLEY ERCK, PRESIDENT AND CEO, NOVAVAX: Thanks. Thanks for having me on.
KOSIK: And congratulations. I know this has been a long time coming. Vaccine being dispersed in January.
But the question I have is that Novavax received you know some of the biggest funding from the Trump administration. In the early stages of the
pandemic. Talk us through why it took so long just to get to this point.
ERCK: Well, we started this journey a year-and-a-half ago with no manufacturing capacity and no product available and assay development
assets. And we have been building that internally all the way along. And so, we've done it at Warp Speed, which is what the administration's name
for the project was. And we've gotten there and now we can produce product on a global scale.
KOSIK: You know there is a reluctance to get the COVID-19 vaccine because there is mistrust in mRNA vaccines, we are especially seeing this in
Germany.
Novavax's vaccine is expected to change that because of the kind of vaccine it is. So, describe why your vaccine is different and do you think that
your vaccine because of the technology, will it be enough to convince those that otherwise wouldn't get the shot? Is it enough to convince them to go
ahead and get the shot?
ERCK: Well, I hope so. I mean you always have -- all vaccines have a safety database which you build up before you go into humans. We have done that.
We use a simple protein that's injected into the muscle, which is what many vaccines historically have been. And it's got a very good efficacy and
safety profile that we've developed over the years. And we've used it in other vaccines for influenza and other vaccines as well.
So, we think it's going to be widely accepted. Another aspect of our vaccine is that it's very stable. So, we can ship it at several
refrigerated temperatures and leave it at room temperature for several hours and that allows us to get the vaccine distributed throughout the
world.
Stan, you know so many of the studies of the data done with your vaccine to show efficacy. They happen when Alpha and Beta variants that when they were
prevalent. Now it's all about Delta and really Omicron. How effective is the Novavax vaccine against the Omicron variant?
ERCK: Well, we don't know for sure yet. But based upon the data we have against Alpha, Beta and Delta, we generate very broadly neutralizing
antibodies. So, you should get a protective response against a lot of the variants and we hope including the Omicron.
We will know soon. We are doing measurements of Omicron antibody activity now that for produced vaccinations. And so, we'll know that that will guide
us toward the development of an Omicron vaccine or the determination that our current vaccine is sufficiently efficacious against Omicron.
KOSIK: Did you see Omicron coming?
ERCK: No. I think you know I think everybody now understands that there's going to be variants for a long time. And we have to have vaccines that are
broadly protecting.
KOSIK: How do you keep up as a vaccine maker? How do you keep up with the rapidly changing variants?
ERCK: Well, it's a great question. But we have some experience in that. We have developed a flu vaccine and specifically to show that our vaccine
works against flu variants.
[09:45:00]
As you know the vaccine changes every year for flu because the flu has variants every year. And so, our platform allows us to be confident. There
are vaccines that work against the various variants.
KOSIK: Is this a situation where you think we're just going to need shots forever that we are going -- just like the flu shot we need every year.
We're going to need a coronavirus vaccine every single year.
ERCK: Great question. Could be. In fact, we are in clinical testing now in human testing of a vaccine that has both flu and COVID. And our expectation
is that we'll have data that shows that it's effective against both. It could be that you take a flu COVID combination vaccine every year.
KOSIK: And as far as the - your vaccine goes right now. You know Moderna, Pfizer, getting boosters right now, and there's sort of a realization that
fully vaccinated means three shots. Are you seeing that with your vaccine?
ERCK: We are. We see good protection and we demonstrated up to 100 percent efficacy particularly in older adults against severe - modern severe
disease. And we expect that - we expect to have this level of efficacy in - - sorry, we expect to have this level of efficacy across the board.
KOSIK: OK. And what about possible authorization in the U.S. for the Novavax vaccine?
ERCK: Well, we are preparing our filing in the U.S. We have filed with seven or eight different regulatory agencies now. We have gotten the W.H.O.
approval, we've got EU. And our expectations will file in the United States within the next week or two. And they will evaluate it the same basis that
everybody else does.
KOSIK: OK. Stan Erck, president and CEO of Novavax, great talking with you today.
ERCK: Thank you.
KOSIK: Denmark was among the first European countries to impose a strict COVID lockdown last year. It was also among the first to begin reopening
last spring. But a proactive approach and high vaccination rate may not be enough to stop Omicron.
As CNN's Scott McLean reports.
(BEGIN VIDEOTAPE)
SCOTT MCLEAN, CNN CORRESPONDENT (voice-over): The gates of the famous Christmas festival at the Tivoli Amusement Park are closed for the season.
The rides are shut down and the staff have all gone home. It's all thanks to a massive surge in COVID infections that has already dwarfed the
previous peak.
New modeling published this weekend shows that if left unchecked, infections in Denmark could be 10 times that number, followed by record
high hospital admissions by Christmas and well beyond in the New Year.
Troels Lillebaek is the epidemiologist in charge of managing the risk of new variants in Denmark, a country blessed with more than three quarters of
its population double vaccinated. But Danes are quickly discovering that two shots are no match for the new more infectious variant. And the booster
shot program simply cannot keep up.
Denmark has among the highest rates of testing and sequencing in the world. And has reams of data at its fingertips. And while there are some early
indications that the Omicron variant could be less severe than Delta, they don't know how much less severe.
TROELS LILLEBAEK, EPIDEMIOLOGIST, DANISH STATE SERUM INSTITUTE: It doesn't really matter whether Omicron is half as dangerous as Delta or else
dangerous as Delta because if many, many thousand or tens of thousands are testing positive the same day, then the strain or the hospital system would
be high anyway.
MCLEAN (voiceover): Danish lawmakers weren't willing to wait and see. Instead, they've shut elementary schools, museums and theaters, put curfews
on bars and restaurants, mandated masked indoors and COVID passports on some public transit. The ghosts of lockdowns pasts now the Christmas
present. But Lillebaek is optimistic that decision has helped avert the worst-case scenario.
(on camera): It sounds to me like without the restrictions it would be absolute chaos.
LILLEBAEK: I think that's a high risk that if we were just, you know, leaving everything open, doing nothing, I think that would be extremely
difficult and a situation, yes.
MCLEAN: You wouldn't advise any country to do nothing?
LILLEBAEK: You don't want to end up in a situation where you are too late at doing what's necessary.
MCLEAN (voice-over): And while many European governments are facing protests over tightening restrictions, in Denmark, they've been so broadly
accepted that some Danes support even tighter rules according to this researcher.
MICHAEL BANG PETERSEN, POLITICAL SCIENCE PROFESSOR, AARHUS UNIVERSITY: When we directly ask citizens whether they cannot cope with any more
restrictions, there's only 10 percent who says that they cannot do that. So, there is, there is no real sign of fatigue yet.
MCLEAN (ON CAMERA): It sounds like Danes are rule followers.
PETERSEN: To a large extent, we are rule followers, but it is not set up blind obedience.
[09:50:00]
It is because we feel that we are being explained why we need to do it and what we need to do.
MCLEAN (voice-over): His research found Americans followed COVID rules to a lesser extent than Danes. But Omicron won't hit the U.S. any less hard.
PETERSEN: I think that we will be facing the very tough times across the world with Omicron. And the only thing that we can hope of is then that the
severity of the disease will be mild enough that the health systems are not being overwhelmed.
MCLEAN: Scott McLean, CNN, London.
(END VIDEOTAPE)
KOSIK: Next, why a Chinese social media influencer has been fined $200 million. That story in two minutes.
(COMMERCIAL BREAK)
KOSIK: She's known as the "Queen of Live-Streaming" in China. But now influencer Via has been taken off social media. In order to pay the
equivalent of $210 million fox tax evasion. It's a sign that ongoing pressure, Beijing is putting on Internet celebrities.
As Selina Wang reports.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN REPORTER: China has fined its top live streaming shopping influencer a whopping $210 million for tax evasion. Huang Wei, known as
Viya and the live-streaming queen in China is getting the largest fine ever imposed on a live-streamer, according to Chinese state media. She's
becoming major Internet celebrity in China.
Selling goods worth billions of yuan from 2019 to 2020. She evaded more than 640 million yuan in taxes "by falsely reporting the commission income
she earned from live-streaming platforms," according to authorities. Huang had millions of followers on Chinese major social media and shopping
platforms. All of her accounts have been removed. But in a Weibo post reviewed by CNN before her account was taken Down, Huang said she was
quote, "deeply guilty."
It is not clear when Huang will be back up online. In November, tax authorities had slapped smaller fines on two other top shopping
influencers, whose accounts have still not been restored.
This is part of the broader crackdown in China. That has targeted tech giants, social media platforms, and celebrity culture.
Under Xi Jinping, the party has become more obsessed with ideological and cultural control. The party sees the extravagant lifestyle of some
celebrities as a sign of moral decay. And the sky-high income of some celebrities is a glaring reminder of China's wealth gap.
The crackdown on some celebrities and social media stars comes at a time when Xi Jinping is determined to redistribute wealth as part of his
campaign from common prosperity. So, that means more pressure on the wealthiest citizens and businesses.
Selina Wang, CNN, Tokyo.
(END VIDEOTAPE)
[09:55:00]
KOSIK: Harry Potter fans, magic is in the air. HBO Max, which is part of CNN's parent company, Warner Media, just dropped the official trailer for
its upcoming reunion special, "Return to Hogwarts." Take a look.
(VIDEO PLAYS HBO MAX "HARRY POTTER" REUNION TRAILER)
KOSIK: The original trio are just some of the stars featured in the upcoming special, which celebrates 20 years since the first "Potter" film
was released. The special is set to premier January 1st.
A young new member of President Biden's family has taken a up residence at the White House. A puppy named Commander was spotted playing on the south
lawn on Monday. The German Shepherd was a birthday gift to the president from his brother. The Bidens beloved Champ died in June at the age of 13.
He looks adorable.
That's it for the show. I'm Alison Kosik. Feel free to connect with me on social media at Twitter and Instagram @alisonkosik.
And "CONNECT THE WORLD" with Becky Anderson is next. I'll see you soon.
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END
