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First Move with Julia Chatterley

China Imposes New COVID-19 Lockdowns In Two Cities; Hong Kong Tightens COVID Curbs On Fears Of "Fifth Wave"; Sony Set To Launch Company For Electric Vehicles; Protests Erupt In Kazakhstan Over Rising Fuel Prices; Startup Unveils Self-Driving Electric Delivery Vehicle; Consumer Electronics Show Begins Today In Las Vegas; How Automatic Payments Will Let Shoppers Skip The Line; Hong Kong Tightens Vaccination Requirements. Aired 9-10a ET

Aired January 05, 2022 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:40]

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.

COVID clampdown. Hong Kong announces tough new rules including flight bans.

Macron's mandate. French president says he wants to make life tough for the unvaccinated.

And supercharging CES. Electric vehicles take center stage in Las Vegas.

It's Wednesday, let's make a move.

(MUSIC PLAYING)

And a warm welcome to FIRST MOVE. Let's begin with a look at the global markets.

U.S. stocks look set for a flat to modestly lower open this Wednesday. The blue chips are hovering near record highs though, but tech is set to pull

back for a second straight session.

The Nasdaq fell more than 1.75 percent yesterday pressured by rising bond yields.

Europe meantime continues its January jump with the major averages rising for a third straight session as investors look past Omicron's threat.

Asia, however, finishing mostly lower. The Hang Seng tumbling more than 1.5 percent amid new fears over tech crackdowns in China and news of fresh

travel restrictions in Hong Kong.

The global response to the Omicron variant continues to top our drivers today.

China imposed new lockdowns in two cities this week just as a social media outcry by Xi'an residents test Beijing's zero-COVID strategy.

Kristie Lu Stout joins us now.

So, Kristie, I have read the stories from social media about you know what these residents are going through from medical issues to not getting enough

food and we've still got a month to go until the Olympics is expected to happen in Beijing. And we've got these renewed lockdowns. Are these

restrictions expected to get even worse as the next 30 days go on?

KRISTIE LU STOUT, CNN CORRESPONDENT: The restrictions are pretty bad especially in the northern Chinese city of Xi'an.

Look, Alison, it's incredible, two years into this pandemic and the scenes that we're seeing playout, this really harsh lockdown in Xi'an reminiscing

of the early days of the COVID-19 pandemic in Wuhan since December 23rd in this major metropolis. 13 million people have been under a strict lockdown

after only a hand full of COVID-19 cases were detected.

(BEGIN VIDEOTAPE)

STOUT (voice-over): No eye contact from this anti-pandemic worker, as a woman under lockdown pleads for a basic essential and her dignity.

Through tears, she says, "My period came yesterday. I called the hotline, the police, CDC, but no one responded."

CNN can't confirm the authenticity of the video. Residents in the Chinese city of Xi'an, which has seen the largest community outbreak of COVID-19

since Wuhan, say they continue to struggle to get basic supplies and food.

The municipal government concedes that there are some problems and said it's working on improving the situation. Since December the 23rd, this city

of 13 million has been under strict lockdown.

Residents are forbidden from leaving their homes unless it's for a COVID test. There's been public shaming of people accused of breaching COVID-19

safety laws. And a man was beaten by government COVID prevention workers for breaching lockdown. The workers were later punished after this footage

emerged online.

(on camera): In Xi'an, there are instances of people being turned away from hospital because of COVID protocols. In a disturbing video, a pregnant

woman was allegedly turned away because she didn't have a valid COVID-19 test. And according to the post from a Weibo user, who claims to be her

niece, the woman is seen sitting outside the hospital with a pool of blood around her feet. Hours later, she was finally admitted but ultimately

suffered a miscarriage.

A staff member from the hospital told CNN they were investigating the incident and that the hospital had initially turned away the woman in

accordance with the government's COVID-19 rules.

(voice-over): Officials have vowed to achieve community zero-COVID before lifting the lockdown.

[09:05:02]

In many ways, China's zero-COVID policy has been a huge success. It has curbed local outbreaks and saved lives with mass testing and tracing, snap

lockdowns and travel restrictions.

But in Xi'an, patience has been pushed to the limit. The Eurasia Group placed China's zero-COVID policy at the top of its list of global risks for

2022, anticipating a cycle of infections, lockdowns, disruption and discontent that would rock the global economy.

The Winter Games will pose a big test to China's strategy. Experts say people in China are vulnerable because of their lack of exposure to the

Omicron variant, the lower efficacy of its home-grown vaccines and the limits of zero-COVID.

(on camera): Even in China, will there ever be any zero-COVID?

PROFESSOR JIN DONG-YAN, VIROLOGIST, UNIVERSITY OF HONG KONG: I don't think so. Actually, to live with COVID-19 is actually the direction to go.

STOUT (voice-over): In Xi'an, the number of new cases is decreasing but desperation is growing, as the lockdown enters a third week.

(END VIDEOTAPE)

STOUT (on camera): And, Alison, citizens in China, they are becoming bolder and expressing their frustration, their desperation, their anger about

China's zero-COVID strategy and a number of the posts and videos have gone viral have been taken down but the cracks in China's zero-COVID policy have

been exposed. Back to you.

KOSIK: Kristie, talk to us through about the new restrictions in Hong Kong.

STOUT: That's right. Hong Kong with its fate tied closely to China, there's a zero-COVID policy in place here and authorities here are afraid of a

fifth wave of COVID-19 infections. Some contexts here on Wednesday, Hong Kong reported 38 - just 38 new cases of COVID-19, of which only one was

locally transmitted.

Now, some new measures that were announced include two-week flight ban from eight countries including the U.S. and the UK. And a raft of new social

distancing measures including a ban on dining in services from 6:00 p.m., gyms, cinemas, salons, party rooms will be closed as well. The measures

that kicked in on Friday and they last for about two weeks.

Now, I spoke to an epidemiologist about these measures. He says that the concern is because of these three chains of transmission that are hidden

inside the community. This according to Dr. Jin Dong-Yan of the University of Hong Kong, but he says given these measures that were announced today,

they should be enough to bring any suspected COVID cases or Omicron cases down to zero or as close to zero as possible. Back to you, Alison.

KOSIK: OK. Kristie Lu Stout, thanks for all of your great reporting.

In Europe, France reports more than 270,000 new COVID cases setting its highest yet number in a single day. Meantime, President Emmanuel Macron

saying he wants to annoy unvaccinated people by tightening restrictions further.

Jim Bittermann is live in Paris with the latest.

So, Jim, as France grapples with these record COVID cases, Macron seems to be really digging in here battling the unvaccinated and at the same time

using colorful language to cast their attention.

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Very colorful, Alison. In fact, it was a little bit stronger than annoy. I use a French

verb al merde which is akin to something like piss off.

The unvaccinated because basically, he blames and a lot of other people here - blame the unvaccinated for the rise - meteoric rise in the number of

cases every single day here we seem to be facing a new record as the case load goes up and the hospitals and ICUs get overcrowded. So, he's

frustrated. He expressed it. His spokesman was asked about his language, his most undiplomatic language and the government's news conference this

afternoon.

And basically, the spokesman said look, he said who is screwing up the life in France today? Who is ruining the life of our health care workers for two

years, we're submerged in ICU services to save patients who are today are essentially unvaccinated? And basically, again, blaming the unvaccinated

for the kind of record numbers that we've been seeing here.

Another thing that took place today that the government spokesman talked about was in fact this new health emergency that has been declared in the

French overseas territories - five overseas territories where the incidents rate is over 1,800 for 100,000 people. 1,800 testing positive for over

100,000 in populations.

So, it's a lot that so much in fact that the government declared this health emergency. So, a lot of things happening here that in fact are very

worrying as far as the government is concerned.

KOSIK: What are you seeing elsewhere, you know, for instance in the Netherlands they've been on a strict lockdown since just before Christmas,

but the thing is, the cases just seem to keep going up.

BITTERMANN: Now, that's the interesting thing.

[09:10:00]

Some of these things - some of these numbers are difficult to interpret and especially the mantra among those, the fact is that as you mentioned,

December 19th they were on a strict lockdown. All the essential services were allowed to stay open and that's still the case but they're going to

open up schools next week.

Nonetheless, despite the strict lockdown, which in fact has led to slightly lower number of cases coming in each day, despite that lockdown, 30 percent

of the population is testing positive, 30 percent more each day testing positive than before. So, the question is why is that despite a pretty good

vaccination record in Holland?

Elsewhere, in Europe, it's kind of a dismal picture wherever you look. I mean, Italy, the rise has been something akin to what France has been

seeing. Government may be talking about new restrictions there. And Boris Johnson and the UK said in fact that there are going to be very challenging

times ahead.

So, I think that can probably be said to most governments all across Europe as we see these case levels rising with Omicron. Alison?

KOSIK: And here in the United States, as well.

Jim Bittermann, thanks so much.

Some encouraging data now from Israel about new booster shots. A study suggests a fourth dose boosts antibodies against COVID fivefold meaning a

drastic increase in the body's ability to fight infection and severe symptoms.

Elliott Gotkine is in Tel Aviv.

(BEGIN VIDEOTAPE)

ELLIOTT GOTKINE, JOURNALIST: A new study has found that a fourth dose of the Pfizer BioNTech vaccine increases a person's antibodies fivefold within

the space of a week. The results which are preliminary and have yet to be peer reviewed were announced by the Prime Minister Naftali Bennett at the

Sheba Medical Center just outside Tel Aviv. And they would seem to support the country's decision to rollout a second booster to people aged over 60,

those with suppressed immune systems and to health care workers and with new COVID-19 cases rising to a record, Prime Minister Bennett hailed the

findings as good news. He said that the fourth dose is safe, the fourth dose works. And his spokesperson said that this increases the likelihood of

a second booster being rolled out to the rest of the population, although, the ultimate decision lies with the health ministry's director general.

Elliot Gotkine, CNN, Tel Aviv.

(END VIDEOTAPE)

KOSIK: Major announcements in the EV world today. Sony says it will launch a subsidiary for electric vehicles this spring. And Chrysler says it will

shift to all electric by 2028.

Paul La Monica joins us now with the details.

Let's start with Sony, Paul. Sony making a big splash at the CES, indicating it is going all-in with its announcement of a new electric

vehicle unit launching -- it's going to launch this spring and it's also unveiling its latest concept car, a seven-seat SUV.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yeah, Alison, it's going to be very fascinating to see whether or not this Sony mobility unit will really shake

up the auto landscape in the same way that Sony did with the video games and consoles. Obviously, PlayStation is a major success for the company,

but Sony has had not as much success in other areas of consumer electronics and gadgets in the past couple of years. You don't have too many people

walking around with Sony music players for example.

So, it's going to be interesting to see if Sony is able to pull this off and whether or not they look to do it by themselves or partner with an

existing legacy auto manufacturer to produce Sony branded vehicles. It's not yet clear, Alison, whether or not this will get off the ground in the

next few years as a Sony product by itself or with a partner. And again, remember, a lot of things didn't get announced at CES stay in the sort of

whiteboard pipe dream phase and never ever actually make it to market.

KOSIK: Yeah, a lot of lofty dreams at CES. It's like the dreamland. I'm just curious, do you think -- can you tell right now if Sony is looking to

mass produce these kinds of vehicles?

LA MONICA: Yeah, you would have to think that if Sony wanted to do something like this, they would want to do it at scale given the type of

company that they are but I struggle to think that Sony can make cars in a mass way without partnering with another company, you know, there are

obviously lots of Japanese and U.S. auto companies that might be eager to partner with Sony but I think it's still a lot of details that we don't

know about just yet.

KOSIK: OK. Paul La Monica, thanks for breaking all of that down for us.

And for more on this, we will speak with the CEO of autonomous delivery vehicle maker, Udelv, in just a few minutes.

And these are the stories making headlines around the world.

[09:15:00]

We're expecting a decision soon from a U.S. judge on whether a sex abuse case against Prince Andrew will be allowed to continue.

Virginia Giuffre says the prince had sex with her when she was underage. Prince Andrew denies her claims. His lawyers argue that a settlement

Giuffre reached with sex offender Jeffrey Epstein exempts the prince from any legal action by her.

Kazakhstan's president vows a tough response to protests after they erupted over a spike in fuel prices. Officials say some of the demonstrators have

attacked the government buildings using stones, sticks and Molotov cocktails.

Our Nic Robertson joins us now in Moscow.

So, Nic, Kazakhstan is actually an exporter of oil and gas so I would imagine that's adding to the frustration of having the cost of fuel spike.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It is. I mean, this is a country that's really crafted a very careful international image. It's

one that is designed -- an image that's designed to attract, you know, tens if not hundreds of billions of dollars of international investment issues,

say a net oil exporter. But what it's been trying to do is wrestle with the issue that a lot of that oil that's used in vehicles, LPG, liquid petroleum

gas, is sold to the population at less than -- at a less than the price that it's commercially produced. And the government over the past couple of

years has been trying to redress that.

The new system came into effect at the beginning of the year, it led to that massive spike in prices, which led to protests and the protests do

seem to have been incredibly strong to transcend the issue of that - of the higher gasoline - higher LPG prices which the government has now said, it

will reduce.

It's led the president to say today that really, in the past couple of hours, the situation sounds incredibly volatile with the prime minister --

prime minister replaced, the government resigned, the president take on new powers in terms of national security. His saying such things evocative

things as you know, I will not leave the capital, I will stay here. He's talking about security services who'd been in confrontation with the

protesters actually being wounded, in some cases losing their lives.

The government yet hasn't produced evidence of that but is saying that the organization of these protesters seems to be something from the

government's perspective, at least, that is more than just the combustion of anger over the spike in LPG prices. He says that this is something

that's planned, and the situation is far from clear at the moment. Some parts of the biggest city in the country, Almaty, seem to be with that

(INAUDIBLE). The internet in the country for the most part is completely down.

This is a really developing and evolving situation. In many cases, the confrontations with protesters with security forces, the protesters have

come out in the dominant position.

KOSIK: Yeah, the pictures we're seeing coming out of there are incredible. I know you'll keep following that story and we'll come back to you with any

new developments.

Nic Robertson in Moscow, thank you.

Still to come on FIRST MOVE a spotlight on tomorrow's tech at the consumer electronics show. A Silicon Valley startup says it has the solution to the

global shortage of drivers and an autonomous truck called the Transporter.

And go ahead, skip the checkout line. A new way to pay that allows you to shop without stopping at the cash register.

(COMMERCIAL BREAK)

[09:21:08]

KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.

U.S. stocks remain on track for a mostly lower open. This Wednesday with tech set for early session weakness. A bit of consolidation here for blue

chips too after two straight record highs for the Dow.

Bank stocks have had a particularly strong start to 2022. Investors meantime gearing up for this year's first big U.S. economic report on

Friday. That's the December jobs report.

New data out today shows private sector employers in the U.S. adding more than 800,000 jobs last month. That's almost double what was expected. The

big question, how Omicron-related slowdowns may hurt firms going forward.

"The Washington Post" reports that U.S. lawmakers are considering new fiscal stimulus to help firms impacted by Omicron.

Brian Levitt joins me now. He is the global market strategist at Invesco. Great to see you.

BRIAN LEVITT, GLOBAL MARKET STRATEGIST, INVESCO: Thank you. Great to be here.

KOSIK: So, the stock market looks like it's back around market highs, record highs. What do you think the market though is missing about the

economy?

LEVITT: I don't think the market is necessarily missing anything about the economy. I think that it's been moving as you would have suspected per this

cycle. We had a big recovery phase, last year markets did very well in an expansion, more recently starting to price in a bit of a slowdown in the

economy as we saw tech stocks become the big out performers at the latter part of last year.

The question is now, is this an economy that's going to continue to lose momentum or if the scientists are right about Omicron, does it start to

dissipate over time we all hope. Does that lead to something of a resurgence in economic activity, which is precisely why bank stocks, energy

stocks have done well in the last couple of days.

KOSIK: Inflation is certainly on the radar. Curious how long you see inflation sticking around.

LEVITT: Well, it's going to stick around for some time but what is critical for market participants - what's critical for investors is not whether the

inflation story is good or bad but whether it's getting better or worse. And so, I'll give a couple of reasons why we believe it will start to get

better.

The first is, on the supply side. You're starting to see some early hints, maybe you got to squint a little bit to see them but early hints that the

supply chain challenges are easing. You look at survey data, time for deliveries is coming down a bit. You're seeing freight costs come down a

bit. Semiconductor prices down a bit. And trucking employment up. So, all of that is very positive.

On the demand side, I think this is critical. You survey consumers and ask them, is it a good time to buy durable goods? Is it a good time to buy

vehicles? They're saying no.

And that's not a persistent inflation story. In a persistent inflation story, it's I need to buy today because prices are going to rise tomorrow.

That's not what consumers are telling us. I expect inflation to moderate over time again for investors better or worse, not good or bad.

KOSIK: OK. Now, you say -- switching to the Fed for a minute. You say that the telltale signs of a recession aren't evident but then you throw in the

Fed taking action, tapering bond buys. The Fed could raise rates three times this year. I want to know how concerned you are about the Fed

possibly tightening us into a recession.

LEVITT: Well, I'm not. You know, this isn't 2015. This is a Fed that's going to be raising rates with inflation elevated and with the job market

quite tight. So, the market is not going to react to tightening the way it did in 2015, which was to say a flattening -- a significant flattening of

the yield for the strengthening dollar. That to me is not the cards. The Fed is doing what I believe is appropriate in what is a very strong

economy.

[09:25:00]

Now, if the Federal Reserve makes a move and the market responds in a way that they didn't suspect again, meaning for flattening in the all-curb

stronger dollar, then the Federal Reserve would back off much like they did at the end of 2018.

So, you're right when thinking about a recession, what are the telltale signs, high in rising inflation, flattening yield curve, credit spreads

falling out stronger dollar. What do we have right now? High in rising inflation. It's a unique moment in time that's causing it. We think it's

moderate. Yield curve is relatively steep. Credits and spreads are behaving very well. The dollar has been ranged down. None of that points to a

recession in my mind.

KOSIK: Let's go to bonds for a minute because the 10-year yield is important since it influences lending rates for mortgages and many other

businesses and consumer loans. How high do you see the 10-year treasury notarizing and how does that change your investing strategy? I mean, what

does well in a rising rate environment?

LEVITT: Well, let's remember, rates started at 182 before any of us heard of COVID. They fell to 135 last year or so amid expectations of slowing

economic activity. Now we're seeing what I could categorize as a normalization rate back to a more reasonable level given that this is an

economy that in real terms over time could probably sustain 2 percent growth. So, to have 135 it seems like an overbought environment.

So, rates are moving up amid, in my opinion, good science. It's been a good economic backdrop. Now, in a rising rate environment, if you think rates

are going to rise meaningfully and on a sustained basis, then you want to be very cyclical in your portfolio, very value oriented in your portfolio.

If you're like me and you believe that this is a rate environment where we are normalizing the 10-year, then you have a period in here where things

like financials and energy can do well. But ultimately, I suspect we get back to a more sustainable level which takes us back to favoring what I

believe would be the more structural growth stories in the market.

KOSIK: Very quickly to politics, do you see policy impacting what we see in the market first Build Back Better and now we're hearing reports from "The

Washington Post" that there could be new stimulus, a new round of relief targeting businesses. Is this something the market is counting on?

LEVITT: Well, not yet. And so, the Build Back Better, I never thought that was a significant market mover because that was money that was going to be

spent over a decade and was likely to be paid for. If you get additional fiscal support here, then obviously, that removes what had been a potential

headwind to growth and could be another accelerator.

So, we've been capturing what we've viewed as a slowdown in economic activity. That's when rates fell. That's what growth stocks did very well.

What we're looking for now is signs that is this an economy that's going to start to pick up again, move back into a more expansion environment. If

that's the case, then you know we want to be very cyclical in our portfolios and expect rates to move higher, not meaningfully higher, but

for rates to move higher.

KOSIK: OK. Thank you so much, Brian Levitt. The global market strategist at Invesco. Great having you on the show today.

LEVITT: Thank you. My pleasure.

KOSIK: And we'll be back right after this.

(COMMERCIAL BREAK)

[09:31:20]

KOSIK: Welcome back to FIRST MOVE. I'm Alison Kosik.

U.S. stocks are up and running this Wednesday and it's a mostly lower open for the major averages. Value stocks look to be holding up well but a

second day of weakness for tech.

Little market reaction today to a strong private sector employment report. ADP saying U.S. employers added more than 800,000 jobs last month. That's

almost double the expectations. The numbers suggest that Friday's all- encompassing U.S. jobs report may also come in strong.

As you heard earlier in this show, the buzz around electric vehicles is only getting louder in 2022. Chrysler and Sony have just announced new EV

plans. Ford is ramping up its e-truck production and Tesla charged into the year on the back of record sales. But it's not just about the big brands.

Startup Udelv has unveiled a self-driving electric delivery vehicle.

There it is. It says, the Transporter will be on the roads by 2023.

Joining me now is Daniel Laury, the CEO of Udelv. Great to have you on the show today.

DANIEL LAURY, CEO, UDELV: Thank you, Alison. Thanks for having me.

KOSIK: So, let talk about sort of some details about the Transporter. How does this thing work? There is no steering wheel. There are no brake pads

and there are no people in it to drive it, it seems there is no room for anyone anyway.

LAURY: Absolutely. We are reinventing delivery and revolutionizing automotive, reinventing delivery by creating the first combination of

hardware and software to automate the multi stub delivery route and revolutionizing automotive by creating the world's first vehicle without a

cabin and without occupants capable of driving at highway speeds.

So, the Transporter is trail blazing the transportation industry and it works with a comprehensive and redundant sweet of sensors, a powerful

computer, high resolution maps and perception and planning algorithms. The entire system is a redundant system to ensure safety of the vehicle, it's

surroundings and the other road agents.

KOSIK: And so, let's say something -- so, OK, so it's a delivery vehicle. So then, walk me through how much stuff this thing can carry and how --

just how the delivery process works.

LAURY: Yes, this vehicle is the largest vehicle of its kind to date for the last and middle mile multi stub delivery route. It can carry up to 2,000

pounds of cargo with what we call the uPod, which is the automated container on the flat bed of the vehicle and 5,000 pounds of cargo without.

So, this vehicle is capable of making up to 80 stubs per run and there is sensors in its cargo space that allow for logic control of all the delivery

tasks.

KOSIK: All right. So, who is signing up to buy the Transporter? Who is your typical client, and what does one Transporter cost?

LAURY: There are essentially three types of clients. The first type of client is what we call the FMCs, the fleet management companies. They

essentially are the equivalent of Hertz or Avis but for commercial fleets. They purchase vehicles in bulk and lease them back to large or small fleet

operators. The second type of client are all the courier companies or the logistics companies and carriers, et cetera, such as FedEx, OnTrac

leadership, et cetera. And the third type of client are the large and small fleet operators.

[09:35:09]

KOSIK: When are we going to see these things all over the place?

LAURY: We are going to be starting with the first pilot units towards the end of this year, 2022. And then the start of production at the end of

2023. And wrapping up from there.

KOSIK: How competitive is this environment? Who are some of the competitors that come to mind?

LAURY: You know, the environment is not being too competitive so far for a historical reason, which is that most of the industry in the autonomous

vehicle space has been historically focused on Robotaxis, passenger vehicles. And they sort of left delivery on the side as they were really

focused on carrying passengers. So as a result, we do not have competition at this point and namely, not competition directly on the multi stub

delivery route.

KOSIK: Do you find that there are challenges with the Transporter with city driving like in places like New York City, Chicago and San Francisco as

opposed to let say Arizona or Florida? Here in the United States.

LAURY: Yes. No, those environments are much, much harder to tackle and the good thing about delivery vehicles is that it can operate in less dense

environments, such as suburban areas as you were mentioning in Arizona, Texas, Florida, and some of those places, which are easier to handle.

Then I think that as delivery or autonomous vehicles in general tackle those areas first. They can gradually upgrade to more complex scenes such

as New York City or San Francisco. And as a matter of fact, I think that delivery vehicles are going to be the first large scale application of

autonomous vehicles in general. It's going to make the public, I understand, what autonomous vehicles are, and it will pave the way to the

expansion of autonomous vehicles in general.

KOSIK: Yeah, as we see more autonomous vehicles on the road, you know we're getting safety advocates coming out and saying as we have this shared

space, some are saying, you know, these companies like yours, not yours specifically but autonomous vehicle companies are using the public streets

like a lab for self-driving experiments. I'm curious what the regulatory environment is for autonomous vehicles and what your thoughts are about

more transparency about crash data.

LAURY: I think that the industry in general is remarkably cautious about being safe, operating in a safe environment and taking care of the public

in general. I think that we all have a very high - a very high level of integrity as far as that's concerned and are very, very careful about not

hurting people. Over time, autonomous vehicles, the premise here is that it's going to make our roads much, much safer and improve the -- or lower

the number of incidents on the road by probably two orders of magnitude.

And I think that the regulators understand that. We are working towards, you know, getting favorable legislation in the United States as well as

other places in the world. You do have states in the United States that are -- have different legislations in that respect, some are more sort of

liberal in that respect such as some southern states like Arizona and Texas and some others have more regulatory environment like California but it's

getting there and the rest of the world Germany is the first country in the world that adapted a nationwide - what we call L4, level 4 autonomy

legislation.

KOSIK: OK. All right, Daniel Laury, CEO of Udelv. Thanks so much for coming on the show today.

LAURY: Thank you, Alison.

KOSIK: And we're staying with the future of tech next on FIRST MOVE. And we'll meet the man behind the company that wants to let you walk out of the

grocery store by skipping the line entirely.

(COMMERCIAL BREAK)

[09:42:05]

KOSIK: Welcome back.

From the promise of the perfect bath to a cinema style experience at home. The Consumer Electronics Show kicks off in Las Vegas today offering a front

row view of the technology of the future.

Samsung is unveiling its newest TVs saying they deliver life-like picture quality and immersive sound.

LG wants to bring the movie theater to you with its new media chair incorporating a curved screen and cinematic sound.

And when the film is over, you could fill up the bathtub with a simple voice command using Kohler's PerfectFill technology. That sounds glorious.

Another company aiming to be at the forefront of tomorrow's tech is called WalkOut. It created an automatic payment system that lets you walk straight

out of the grocery store without stopping at the cash register.

WalkOut's CEO and co-founder Assaf Gedalia joins us now.

Hi there, great to have you on the show.

ASSAF GEDALIA, CEO AND CO-FOUNDER, WALKOUT: Hi, it's a pleasure to join.

KOSIK: All right. So, talk us through how does the WalkOut system work?

GEDALIA: Well, WalkOut is a developer of an autonomous and frictionless shopping solution. We allow shoppers to go into the grocery store, grab

whatever items they want, and when they're done, simply walk out of the store. We eliminate the need to scan any items and go through the checkout

lines and we do that using cameras mounted on top of the normal shopping cart and highly accurate computer vision that registered everything

inserted into the cart or removed.

KOSIK: OK. So, it's something that is put on to a shopping cart and with high tech everything to see if anything is going on, anything funny is

going on but the reality is, thieves always find a way around a system. How secure is your system truly?

GEDALIA: So, the system is above 99 percent accuracy. So, everything you toss in the cart is captured. You can grab a small bubble gum off the

shelf, toss it inside, and it's captured. And you'll see presented on a large touch screen that walks you through your shopping journey and shows

you everything you've bought. And of course, communicates with you for promotions and suggestions, as well. But it's -- you know, thieves are

there, and they'll always be there and we're not here to stop thieves, we're here to improve the shopping experience.

KOSIK: And also, improving the shopping experience there is a health benefit to this, as well. Can you tell us about that?

[09:45:00]

GEDALIA: Yeah, sure. So, imagine that you walk in the store, you grab our cart, and you log in with your profile and we can customize the shopping

journey for your needs. So, if you're allergic to anything, if you're on a specific diet, we can really help you maintain a healthy shopping journey

according to your preferences.

KOSIK: Who are some of your biggest buyers? Who has purchased this device and what is the cost of the WalkOut system that is retro fitted on to these

carts?

GEDALIA: So, our customers are the major retailers, we're targeting the largest grocery retailers in the world. We're going into several major

retailers these days in Europe and Israel and also in the U.S. We're deploying for example one of the largest Israel retailers called Mshuk

which will deploy the entire chain the next couple of years.

KOSIK: Your company recently completed a $2 million funding round. I'm curious where you see opportunity for growth? Additionally, what about

expansion plans here in the United States?

GEDALIA: Yes, there are a lot of opportunities for growth. You know, the grocery industry is the largest retail segment in the world so there is an

endless way to grow. And we are also growing in the U.S. We have first partners there and we plan to grow in 2022.

KOSIK: I'm curious how customers are receiving this device. Is it difficult to work when you initially see it?

GEDALIA: So, customers love it. We're doing focus groups across the world and across all ages. And people really love it because it's very non-

intimidating. Just imagine a normal shopping cart, which is what we use but has a couple cameras, which are barely noticeable and a screen. So even if

you ignore the system and you just, you know, you just want to shop, everything you put in the cart is registered and presented on the screen

and you get promotions and suggestions so you get more benefit as you shop and when you're done, you can pay with any normal payments in a self-

checkout or even in a manned checked out and we still save all the time that was usually spent on scanning all the items. So, people react very

well to this system.

KOSIK: So, we are seeing more and more contactless shopping experiences with the advent of the pandemic. The most recognizable until now has been

Amazon with its Go stores. What does WalkOut do differently from Amazon?

GEDALIA: So, Amazon Go is a very cool concept. It's very expensive, though. OK? And Amazon Go stores that you'll see they're usually smaller convenient

stores and at WalkOut, we target the larger format, the supermarkets. We want to bring the same level of frictionless journey to the larger store

formats where you go, and you fill your cart and that's where we're focusing.

And also, Amazon serves Amazon because they have their own brands and we're serving Amazon's competitors. Our customers are Amazon's competitors.

KOSIK: OK. Assaf Gedalia with WalkOut. Great talking with you and I can't wait to see this at my local grocery store at some point. Thanks.

GEDALIA: You'll see that soon enough. Thank you.

KOSIK: More FIRST MOVE after the break.

(COMMERCIAL BREAK)

[09:51:25]

KOSIK: Welcome back. I'm Alison Kosik.

Let's get one last look at the market and checking out the action on Wall Street. It looks like U.S. stocks are the mostly lower in the early going

this Wednesday. Some early session weakness for tech but energy stocks, they seem to be pushing higher along with health care and financials. The

Dow has been popping in and out of record territory in the early action, too. We'll keep our eye on all of it.

Throughout the pandemic, some countries have pursued what they call a zero- COVID strategy. Mainland China and Hong Kong are committed to keeping their lines on this chart from spiking.

Hong Kong is set to tighten its vaccine requirements even further. Chief executive Kerry Lamb says from February 24th, only people who are

vaccinated can enter venues such as museums, libraries and schools. This is on top of strict rules on visitors entering Hong Kong. So, what kind of

toll are all these restrictions taking?

Will Ripley looks at the impact of long-term travel quarantines.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN CORRESPONDENT (voice-over): In zero-COVID Hong Kong, pandemic protocols have paralyzed this once busy travel hub. The arrival

process that used to take minutes now drags on for hours. Mandatory testing at the airport, waiting hours for the results. The lucky ones test negative

and spend up to 21 days in self-paid hotel quarantine. Darryl Chan is not one of the lucky ones.

DARRYL CHAN, TESTED POSITIVE FOR OMICRON IN HONG KONG: I had both of my jabs. I have been boosted. I -- like didn't think -- didn't ever think that

I'll be -- actually test positive on arrival.

RIPLEY: Thirteen hours after landing in Hong Kong, Chan was in an ambulance. His luggage left at the airport. He tested positive for the

Omicron variant. Even without symptoms, his minimum hospital stay is nearly a month.

(on camera): Do you worry about your mental health as these days turn into weeks?

CHAN: Yes, absolutely, because I have never been in a situation like this before.

DR. ELISABETH WONG, PSYCHIATRIST: In general, there is increased sense of isolation, anxiety, and in some severe cases even post-traumatic stress.

RIPLEY (voice-over): Hong Kong psychiatrist Dr. Elisabeth Wong says longer quarantines can be more traumatic.

WONG: And then we have a lot of changes between the 7 days and the 14 days and the 21 days, and that was when people reported more stress, especially

with the longer period of quarantine.

RIPLEY: Darryl's day begins with a wakeup jingle.

UNIDENTIFIED MALE: Attention, please.

RIPLEY: He takes his own vitals, calls and messages with friends and family help pass the time.

CHAN: Social media has really helped actually. It definitely makes you feel less alone.

RIPLEY: One of his greatest struggles, sharing a room and a bathroom with two strangers.

CHAN: But I think what has definitely impacted me the most so far is the feeling of just, you know, not having the freedom and regressing into

almost feeling like you're back at school, you know, with some controlled wake-up and bedtimes, not being able to control what you can eat.

RIPLEY: Hospital meals often consist of mystery meat. The bigger mystery? Chan's release date. He's supposed to start a new job, a new life in Hong

Kong.

(on camera): What's the worst part of this?

[09:55:03]

CHAN: I think the worst part is not knowing when I will be able to get out.

RIPLEY (voice-over): For now, all he can do is wait. From his hospital bed, freedom feels like a lifetime away.

Will Ripley, CNN, Hong Kong.

(END VIDEOTAPE)

KOSIK: The most advanced telescope in history got some new sunscreen on Tuesday. The James Webb Telescope is deploying its tennis court sized sun

shields. There is no video camera on board to show us that happening but here is what a test run on earth looks like. Eventually, five layers of

these reflective sheets will protect the telescope from solar heat and light. That's crucial because unlike Hubble that orbits earth, the James

Webb will orbit the sun.

And that's it for the show. I'm Alison Kosik. Go ahead and follow me on Instagram and Twitter @alisonkosik.

Thanks for joining us. "CONNECT THE WORLD" with Becky Anderson is next. I'll see you tomorrow.

(COMMERCIAL BREAK)

[10:00:00]

END