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First Move with Julia Chatterley
Putin and Macron Set To Discuss Ukraine Crisis; Satellite Images Show New Russian Buildup In Belarus; Report: Amazon And Nike Exploring Bids For Peloton; Joe Rogan Apologizes For Use Of Racial Slurs; Defending Champion Shiffrin Crashes Out Of Giant Slalom; Peng Shuai Denies Making Sexual Assault Accusation; E.U. Talking To U.S., Others to Secure Gas Supplies; Japan's Changing Work Culture; Plan To Clean Up Litter In Earth's Orbit; "Fight Club" Ending Restored In China After Outcry. Aired 9-10a ET
Aired February 07, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:30]
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.
Macron's mission. The French president heads to Moscow for crucial meeting with Putin.
Racism row. Spotify's CEO condemns Joe Rogan's language but says he won't silence the podcaster.
And Olympic interview. Chinese tennis player Peng Shuai speaks to French media.
It is Monday. Let's make a move.
(MUSIC PLAYING)
A very welcome to "FIRST MOVE." Great to have you with us this Monday.
Another very important week of global diplomacies set to kick off in Moscow. The heads of France and Russia sit down this hour to discuss the
crisis in Ukraine. The very latest on that in just a moment.
But first, let's get you caught up on the markets. U.S. stocks on track for a flat to modestly higher open as a new week of trade gets underway on Wall
Street.
The major U.S. average posted solid gains last week with the Nasdaq rallying almost 2.5 percent. But it was another volatile week of trade
capped by Friday's stunning upside surprise in the January jobs report.
Shares of Amazon rallied 13 percent on Friday after its strong earnings. That was the biggest single day market cap rise for any U.S. stock on
record. That followed Facebook parent company Meta's 26 percent plunge on Thursday. That is the biggest one-day market cap fall in Wall Street
history. Shares of both firms are little change in premarket trading.
Meantime in Asia, Chinese investors were back at their desks after the weeklong Lunar New Year holiday. And in a bullish frame of mind with stocks
there rallying some 2 percent.
All right. Let's get right to the drivers.
This hour, a critical summit for France's President Macron. He's in Moscow to convince Russia's Vladimir Putin to abandon any plan to invade Ukraine.
Tensions continue to simmer as new satellite images show Russian troop movements near the Belarus/Ukraine border.
Alex Marquardt is in Kyiv. John Harwood joins us from Washington.
Alex, let me start with you. How does President Macron hope to deescalate the situation in this meeting he's having with Putin today?
ALEX MARQUARDT, CNN SENIOR U.S. CORRESPONDENT: Well, Alison, this is a critical part of this flurry of diplomacy that we're seeing not just today
but playing out in the coming days. Of course, German Chancellor Scholz is in Washington D.C. meeting with President Biden today. And then, there is
this crucial meeting in Moscow with President Emmanuel Macron of France going to visit his Russian counterpart.
Now, this is especially key because Macron is the western leader who has perhaps had the most contact with President Putin in recent weeks. We've
heard President Putin call President Macron a "quality interlocutor." Those are kinder words that we've heard. Then we've heard about the U.S. side.
And so, the effort by the French president is certainly going to try to get President Putin to continue with these diplomatic talks. France is very
much on the same side as the U.S. and the reset of NATO when it comes to you know refusing out of hand these Russian demands that Ukraine not be
allowed to join NATO and that NATO withdraw from Eastern European countries. But France is going to try to push a sense that there are other
areas that can be agreed upon, that could be discussed in order to try to prevent a Russian invasion of Ukraine.
Alison, of course, every day that talks are happening, and guns are not firing is a good one. But it is still far from clear what President Putin's
intentions actually are. As you noted, we do have evidence from satellite imagery that the Russians continue to move their troops closer to the
Ukrainian borders. Not just on the Russian side of the border but also from the Belarusian side of the border.
We heard from the White House saying on Sunday that this invasion could happen as soon as tomorrow. It is that question of intent that really is
the biggest one. I was speaking with a senior European official who said that what they're getting, what their sense is from the Russian defense
sides, the military side is, they don't understand what President Putin's intent is. And they understand - they do understand however, that if there
were full scale invasion of Ukraine, that it would be extremely costly in terms of the troops and others, civilians included who could really lose
their lives.
[09:05:10]
So, Alison, the hope is, that this - this conversation in Moscow today will help keep the conversations going in the help of you know bring this all to
a diplomatic conclusion. But we should caution that there is no real, you know, major breakthrough expected out of Moscow today. Alison?
KOSIK: OK. Alex, thanks for that.
John, let me go to you and ask you about what's going to happen at the White House later this afternoon. The White House meeting with German
Chancellor Olaf Scholz. He's accused of being soft on Russia. What is the goal here for the chancellor to meet with President Biden?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: I think, Alison, it is to show a united front. You know it is fascinating the way these different leaders
on the western alliance are playing different roles. As Alex was just explaining, Emmanuel Macron of France has been a very energetic
interlocutor trying to sus out that diplomatic off-ramp, someway of reassuring the Russians that their security is not somehow threatened by
NATO without crossing the line and promising that Ukraine won't eventually be a member.
President Biden on the other hand is outlining in very stark terms what the United States thinks Russia may be about to do. In very stark terms, what
the consequences would be in terms of sanctions, unplugging Russia from the global financial system, cutting off that Nord Stream 2 pipeline.
And Olaf Scholz, the new German chancellor has been keeping a very low profile. And I think this is an effort by him to try to elevate that
profile and say we stand with the United States.
Now, there are differences because of course the Germans want that Nord Stream pipeline to go through and when the United States says it is going
to stop if Russia invades, Germany has been pretty ambiguous about it saying, well, we're going to be with the United States, but not specifying
what they're going to do on Nord Stream. I'm sure that the leaders will get questioned about that today at their news conference.
But this is trying to find with each leader playing different roles, away to show the Russians that all of this adds up to a united front in terms of
trying to deter Russian aggression and find that diplomatic off-ramp, because the United States itself even while warning of the serious
sanctions that would befall Russia if they invade, the United States very much wants to have that diplomatic off-ramp taken under no circumstances,
the United States is going to commit troops to Ukraine. And so, very much Joe Biden and his administrations wants to avoid active conflict and
they're working in different ways, all these leaders, to bring that about.
KOSIK: Yeah. You make a good point there, John. And I'm going to ask you this question, Alex.
You know, it's interesting to see, I get it that the -- you know leaders of various countries, they want to show a united front, but it is interesting
to see Emmanuel Macron, the French president, really take the lead and the focus is squarely on him. Kind of the hopes are set on him to try to make a
breakthrough today. Although you know it's tempered with the reality. How much though is the U.S. role being kind of taking a backseat in these
negotiations?
MARQUARDT: I don't think it is taking a backseat, Alison. In fact, you've seen the Russians from the very beginning, let's say in the more heightened
moments of this crisis in the past few weeks, really trying to make the point that it is the Americans who they want to deal with. You remember
earlier in January they had a series of meetings both in Geneva and Brussels and kicked those off with one-on-one discussions with the U.S.
side.
There are - you know there are some very significant things that the Russians want the Americans to do. And that primarily centers around
discussions over missile placement in Europe, specifically you know the question of American missiles - offensive missile in Ukraine which of
course the Russians don't want to see.
So, this isn't Putin pushing the U.S. aside. This is certainly an effort as John was saying by the NATO allies to show that they have a united front.
Admittedly, President Putin it seems to have a closer relationship with President Macron.
So why not try to take advantage of that to convince the Russian leader to take that diplomatic off-ramp. But we are also going to then see the German
chancellor - the new German chancellor Olaf Scholz in Moscow next week having his own meeting with the Russian president. So, he is really, you
know this is a diplomatic effort on all fronts, Alison.
KOSIK: OK. Alex Marquardt, John Harwood, thanks to both of you.
Peloton has been struggling to keep up with its pandemic-fueled growth. So, could a new owner be the answer to its problems? The troubled fitness
phenom has reportedly sparked interest from potential buyers, including Amazon and Nike.
[09:10:00]
CNN's Paul La Monica joins me now with more. You know I saw this coming, Paul. The sharks are now circling though. They smell blood in the water
when it comes to Peloton. Do you think this could turn into a bidding war and have you heard of any other - or are there any other suitors that would
make sense?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yeah, Alison, there has been some chatter as well. Analysts speculating that Apple, which clearly wants to be
a bigger player in fitness with its fitness app and the Apple watch could possibly be a bidder for Peloton as well.
I would you be a little cautious here though, Alison, about the possibility of a bidding war. Yes, Peloton is an attractive asset from the sense of
you've got about 6 million largely affluent consumers that use these services and products, you know particularly the bikes and the treadmills.
But Peloton continues to lose money.
There is a lot of competition from lower priced companies as well with cheaper bikes, cheaper exercise equipment. People are starting to go back
to the gym as well and not work out at home as much because of COVID restrictions being relaxed because of vaccinations, things like that
nature. So, I would be a little skeptical of going all in on this notion that Peloton is going to be an imminent takeover target.
KOSIK: Yeah. It makes me wonder what is so attractive about Peloton that there seems to be all this interest. And then of course there come the
earnings - Peloton's earnings, reports tomorrow. What are we expecting there?
LA MONICA: Yeah, they report tomorrow. They are expected to once again lose money. It will be very interesting to see if CEO John Foley addresses any
of the takeover chatter at all. If the company puts out anything in its earnings statement that talks about the speculation or if they just, you
know, want to go forward and you know try and convince Wall Street that it is all systems go and that their working on figuring out some of the issues
that are you know affecting the company right now. There have you know obviously been talks about production cuts because of demand waning.
So, you know, I think that Peloton faces a tough road ahead. I think that, you know, I'm not going to go so far as to say that it was a fad per se,
because I think people are genuinely interested in working out, being healthier and eating better. It's just the classic case of there is too
much competition. Peloton is not the only game in town. And it is going to be tough for them going forward, I think. Unless they do wind up getting
acquired.
KOSIK: Yeah. This is going to be interesting story to watch.
Paul La Monica, thanks so much for breaking all that down.
More controversy surrounding Joe Rogan.
(BEGIN VIDEO CLIP)
JOE ROGAN, PODCASTER: Because I'm not racist. But whenever you're in a situation where you have to say I'm not racist, you (EXPLETIVE DELETED) up
and I clearly have (EXPLETIVE DELETED) up.
(END VIDEO CLIP)
KOSIK: Rogan apologized over the weekend after a video of him frequently using the n-word on his podcast spread online. Overnight, Spotify's CEO
condemned the podcast host. But said silencing Rogan isn't the answer.
Let's bring in CNN's Brian Stelter.
Brian, good to see you. And this is yet another controversy tor Spotify that popped up. But you know this begs the question, you have to wonder if
Spotify knew about these previous podcasts. I mean, how do they sign a $100 million plus contract with him and never look at his earlier podcasts?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: If they thought he was that valuable. Didn't someone go and listen to the archives, listen to all the
episodes. It is mind-boggling. And I have not received any straight answers from Spotify about this or about that.
I pose that question over the weekend. How could this have been an unknown? But maybe it was known. Maybe Spotify decided that the risk was worth the
financial reward.
If I know one thing about media scandals and tech scandals, is that they're always worse on the inside than they look from the outside. And that is
what is happening at Spotify. You have these employees who are in absolute revolt.
That is why Daniel X letter is so emotional and so intense. His letter overnight to the employees basically saying, I hear you, I know you're
furious with me, I'm going to try to do right but he doesn't have any clear answers. Yes, he says he's going to spend $100 million on new programming
featuring marginalized communities, the same amount that they allegedly spent on Rogan, to bring Rogan into the platform.
But, Alison, when he says we're not going to silence anyone. We're not going to silence Rogan. This is not about silencing. This is not about
cancel culture. This is about a company that made an exclusive distribution deal with a very controversial figure just like any other media company, it
is basically just a media deal that has gone sideways for Spotify.
[09:15:00]
If Rogan could post his podcast by himself from Spotify whenever he wanted to. That is what we do. That's what a lot of people do.
The difference here is this exclusive licensing deal between Spotify and Rogan and that is why employees are furious.
KOSIK: How much, Brian, does this intensify the pressure on Spotify to kind of do something other than this statement that was put out to its employees
and really define what kind of company Spotify wants to be.
STELTER: Right. End up being about values. What are your brand values? What are your employer values? And when you have so many staffers who are upset
with the company's decisions about Rogan, then they end up in a real bind.
So, X is going to announced you know these funding and he says he's going to have medians and bring in more consultants. But the headline from this
weekend is that this n-word controversy erupted on social media. Rogan apologized. But Spotify stood by him.
They can talk about values. They can talk about dignity and transparency and equality. But at the end of the day, they're keeping Joe Rogan. At
least it seems that way for now.
KOSIK: Yes, they are. At least for now.
Brian Stelter, thanks so much.
STELTER: Thanks.
KOSIK: And these are the stories making headlines around the world.
Britain is marking 70 years since Queen Elizabeth took the throne. Troops honored the queen's historic reign with a 41-gun salute in London's Green
Park Monday morning. Another salute takes place later at the Tower of London. The queen has received congratulatory messages from the prime
minister and her son Prince Charles.
After nearly two years of strict travel restrictions, later this month Australia will reopen its borders to international travelers who are double
vaccinated against COVID-19. Prime Minister Scott Morrison stressed that the vaccination rule will apply to everyone citing last month's deportation
of men's tennis number one Novak Djokovic.
Across Canada, chaotic protests over COVID-19 rules are moving into a second week. The capitol city of Ottawa is under a state of emergency.
Demonstrators have blocked roads causing traffic mayhem. As officials in Ottawa investigate more than 60 cases in connection with the protests, many
involving hate crimes.
Still to come on "FIRST MOVE."
Europe moves to secure its energy supplies as tensions with Russia rise. I speak with the EU's internal markets chief.
(COMMERCIAL BREAK)
[09:20:00]
Welcome back to "FIRST MOVE." I'm Alison Kosik.
The Wall Street trading week kicks off in just a few minutes from now. And it's still looking like a flat to modestly higher open for stocks. A bit of
a respite perhaps after last week's wild price swings.
And it is a merger Monday in the U.S. in the aviation sector. Frontier is buying rival budget airways Spirt in a stock and cash deal worth more than
$6.5 billion. The two companies say the deal will lead to even lower fares. But anti-trust officials will surely want to have a look at this one.
Spirit set to rally some 13 percent once that opening bell rings.
Meantime, a strong takeoff Monday for shares of Qantas airlines. They soared more than 4.5 percent on news that Australia will open its borders
to international travelers for the first time since COVID lockdowns.
Now to day three. Highlights of the Beijing Winter Games and who better to bring in but Christina Macfarlane. She joins me now.
You know, I had -- my mind was focused. My eyes were focused on curling, but something tells me you have better drama to focus on today.
CHRISTINA MACFARLANE, CNN WORLD SPORT: Well, I tell you, Alison, there was plenty of it. We're just three days in. And I tell there were a lot of eyes
on the women's skiing on Monday as big hope Mikaela Shiffrin took to the slopes for the first time. She is, of course, one of the greatest Alpine
skiers of all time and is hoping to win the first of a possible five medals in the giant slalom Monday of which she is of course the defending
champion.
But unfortunately, disaster struck for her within seconds of taking to the hills. Skiing out after only turn five. It's a huge blow to her. She said
afterwards that it was a mistake she will never get over. Shiffrin is looking to become the first American to win three golds in a single Winter
Games, but instead of course, in her wake it was Sweden's Sara Hector who took gold. Which isn't really a total surprise. She's the world cup leader
in that discipline and that win for Sweden actually putting them top of the medal tables after that event.
Also, on the slopes, there was an emotional gold medal win for Canada's Max Parrot in the men's snowboard slopestyle. And Alison, what a comeback story
this is. Three years ago, Parrot was diagnosed with Hodgkin's lymphoma. Only 10 months after winning a silver medal in the last games in
PyeongChang. He underwent 12 rounds of chemo. He said he had no muscles, no energy. And yet, on Monday, he laid down a brilliant splintering second
run. The best of his life, he said, with a score of 90.96 to take gold. There wasn't a dry eye in the house.
And finally, of course, we had chance to see the poster child of these games in action. Eileen Gu. Skier, model, musician. I'm sure you've heard
the name already. She's born of course to a Chinese mother and an American father. And Gu was actually raised in California where she learned to ski.
But made the controversial decision at these games to compete for China. These games being her first.
And since making that decision, she has become a household name in China where you can see her face blasted over billboards, magazine covers,
millions of followers on social media. And while some of course have criticized her decision to compete for China, Gu says she's simply been
trying to be a role model in the way she's seen other Chinese American athletes who have inspired her.
She is expected to medal and is predicted to walk away with three pieces of silver ware in Beijing after already winning eight times on the
international circuit. Just 18 years of age, I might add. She was in action in the qualifying of the women's Big Air on Monday where she finished
fifth. Which means she will now go through to compete for her first medal on Tuesday in that event. Now to carry all of that on her shoulders at just
18 years of age is pretty extraordinary.
KOSIK: That certainly is. She's still a teenager.
Christine Macfarlane, thanks very much.
Also, in Beijing. The International Olympic Committee president met with Chinese tennis star Peng Shuai who wasn't seen for a time after making
claims of sexual assault against the former Communist Party leader. She also gave an interview to a French newspaper.
Selina Wang has the details.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice-over): For many, it's the most anticipated meet of the Winter Games, International Olympic Committee
President Thomas Bach and Chinese tennis player, Peng Shuai, at dinner inside the Olympic COVID closed loop. But censorship questions swirl. The
IOC not willing to provide images of the pair's meeting. A degree of transparency came the next day when Peng sat with journalists from French
sports paper "L'Equipe."
The nearly hourlong interview hitting on Peng's emotional accusation of sexual assault and her immediate disappearance from the public eye. It's
all according to Peng, just an enormous misunderstanding. And Chinese Olympic officials playing chaperon. The reporter saying, he knew he would
have to look past the tennis player's words.
[09:10:00]
MARC VENTOUILLAC, SENIOR REPORTER, L'EQUIPE: She was very cautious about our question and her answer. But as I said, I don't speak Chinese.
UNIDENTIFIED MALE: She's done it.
WANG: Peng is, herself, a three-time former Olympian. Last November, the tennis star posted a painful message to social media, accusing this man, a
former Chinese vice premier, once among the country's most powerful, of sexual assault. The post gone from Chinese social media within half an
hour, while Peng fell silent. For more than two weeks, many around the world feared for her safety as the Chinese censors went to work deleting
all traces of her accusation and scrubbing international coverage from Chinese airwaves.
JOHN BERMAN, CNN ANCHOR: China blocked our feed.
WANG: It was too late to stop the global outcry. Some of the biggest names in sport offered their support, fearing she was being held against her
will. While China attempted to stem the criticism. Initially, with a letter that state media said was from Peng, insisting everything is fine.
Then, she reappeared, happy and smiling in videos posted on Twitter. Not seen in China that the Women's Tennis Association said may also be staged.
The WTA took a firm stance, halting all upcoming tournaments in China.
STEVE SIMON, CHIEF EXECUTIVE, WTA: We have to start as a world making decisions that are based on right and wrong, period. This is bigger than
the business.
WANG: But the Beijing Winter Olympics would not be stopped, and Thomas Bach has taken on the task of reassuring the world.
CHRISTINE BRENNAN, CNN SPORTS ANALYST: The IOC treated it as something to basically be swept under the rug. What a sad, sad state of affairs.
WANG: The Chinese propaganda machine in overdrive. Peng shown off by state media at a ski competition in Shanghai in December, alongside basketball
legend, Yao Ming. The Chinese government has not acknowledged the sexual harassment allegations, but its foreign ministry said it hoped that quote,
"malicious speculation about her would stop."
Sunday's L'Equipe report is not the first time Peng has said she never made the accusation of assault, but now in telling a western outlet that she
didn't disappear, she just said she just had too many messages to respond to, that she herself deleted the accusation, but no inquiry has been
announced. And there's still no way of knowing whether Peng has been allowed to speak her own mind.
Selina Wang, CNN, Beijing.
(END VIDEO TAPE)
KOSIK: You're watching "FIRST MOVE." The market open is next.
(COMMERCIAL BREAK)
[09:30:35]
KOSIK: The European Union wants to shore up its energy supplies and a bid to reduce its dependence on Russia. The EU's top officials said it is in
talks about buying more gas from the United States, Norway and others. At the moment, Russia supplies 40 percent of the EU's gas. The head of the
European Commission says the Kremlin is using energy supplies for political leverage.
Joining me is Thierry Breton. He is the EU Internal Market commissioner. He's also in charge of the block's COVID vaccine drive. And welcome back to
the show, thanks for joining us.
THIERRY BRETON, COMMISSIONER, EU INTERNAL MARKET: Thank you very much.
KOSIK: Let's start with what's happening with Ukraine and Russia. You know we see President Macron in Moscow, the German chancellor in D.C. Is the EU
united on Russia?
BRETON: Of course, the EU is extremely united on Russia and we've been always extremely vocal. Of course, now we have many discussions, and you
know, that President Putin was trying to have a discussion with one member state or the other one. But now we are entering into - serious discussion.
And this is why, now, our leader, president of the EU, is now discussing himself in Moscow, by the way, right now, when we speak together. So, we
are entering into the serious discussion now. We will have a long discussion today with him and I think it is timely.
KOSIK: Commissioner, you know, as the conflict between Ukraine and Russia heats up, the Kremlin is using gas supplies as a political weapon. That's
as natural gas prices shoot higher and Europe's energy crisis is deepening. How will Europe cope if Russia cuts off its gas?
BRETON: Well, you know, first, maybe I will cut a little bit of what you said. It is not 40 percent. It is more 30 percent. That we supply from
Russia. So, we can definitely cope with it. We will have all the suppliers. There's a lot of capacity elsewhere.
And, by the way, Russia needs also to export its gas like hell. So, we are on the other hand a very -- we have been very clear on the other hand that
if something happened, and we want to discuss it now, as you know here in Europe. But if something happened, the consequences will be massive. So, I
think everybody now has to be maybe a little bit more cautious. And again, this is why it is good that now we are entering into serious discussion.
KOSIK: And the European Commission is coming under some criticism though after unveiling a long-delayed proposal to designate natural gas and
nuclear power as sustainable sources of energy and this is a plan that's angered climate activists who are calling it green washing and it's
actually one that puts the European Union climate change targets at risk.
I even saw on Twitter, the Austrian chancellor tweeted, I cannot understand the decision of the EU.
Commissioner, can you help us understand this decision?
BRETON: Well, I have been always very clear, if we want to achieve our target, we need nuclear energy. By the way, we will need all sources of
decarbonized energy. So, I've been very -- always very clear, our objective is to reach our target, in other words to be zero CO2 by the end of 2050.
And in order to do this, we may not like it, but we will need nuclear energy. Today we are producing 26 percent of our electricity with nuclear
energy here in Europe. By 2050, when you have everything, it should still be at least 15 percent. But at the same time, we need to multiply by two as
the capacity of -- to produce electricity in Europe.
So, in other words, yes, we will need probably to achieve our CO2 target to invest around 500 billion euros in nuclear plans. But of course, fully
secured by the end of 2050. And this is, by the way, what will be a load with the so-called taxonomy.
[09:35:10]
KOSIK: All right. Turning to other issues. The EU Chips Act, specifically the EU Chips Act and semiconductor package that is expected to be unveiled
tomorrow. Ultimately, this is really going to come down to money. I'm curious how much will the EU invest in this? Will they get outspent by
China and the U.S.?
BRETON: Oh, that is a very important subject. Because you know everybody knows that we are today in Europe the leader in R&D in semiconductors,
above everyone. But it is true that like the U.S., we are manufacturing too much. Our semiconductors in Asia, U.S. and Europe produce 10 percent both
of what is needed in semiconductors worldwide.
We have decided, us in Europe, to multiply it by four, by four. The prediction of semiconductors by the end of this decade. So, in order to do
this, we will have three packages.
First, we'll invest 12 billion euros - 12 billion euros in pure R&D to continue to lead the rest in R&D. And by the way, with cutting-edge
technologies, below two nanometers or one nanometer which is extremely advanced technology.
The second pillar will be to support fab and mega fab. And that is extremely important because of course we know that as a demand is here. So,
it is extremely important to support this investment and this is what we will do with the - roughly with 30 billion euros.
And the third pillar will be to support start-ups. That is extremely important. To low our innovative start-ups, to be able to develop not only
new technology and services but also to have the funds, so we will have a specific fund between 2 to 4 billion euros to support this.
So altogether, it will be above $50 billion to support, again, our semiconductor industry. And by the way, I think it is pretty comparable
with what you might find Gina Raimondo is doing with the U.S. Chips Act.
KOSIK: Let me quickly ask you this. You know as we hold our breath for a possible next variant of the coronavirus, is it even going to be possible
to adapt vaccines to target those variants which will mean those vaccines will have to be developed and distributed very quickly?
BRETON: No, that is a very good question. Because you know, Europe now is a world leader in producing mRNA vaccine. So, we have a lot of capacity in
Europe to do this. And it is true that what is probably better than for other vaccines with mRNA vaccines, is that we can adapt pretty quickly. A
new vaccine within roughly something like three months, when we see a new aggressive variant.
The answer to the question is yes, we will be able to do this and we will have also the capacity to produce this new vaccine very quickly for us. But
as you know, the philosophy of Europe is also for the rest of the world because we are a world leader in export of mRNA vaccine. And we intend to
continue to do this for our friends and partners.
KOSIK: All right. Thierry Breton, European commissioner for Internal Market. Grateful for your time today. Thank you.
BRETON: Thank you.
KOSIK: You're watching "FIRST MOVE." More to come.
(COMMERCIAL BREAK)
[09:41:15]
KOSIK: Welcome back to "FIRST MOVE." I'm Alison Kosik.
A new trading week is underway on Wall Street. U.S. stocks are mostly higher in the early going as investors await fresh earnings from the likes
of Disney, Coca-Cola and Twitter. More than 80 S&P 500 companies will be reporting over the next few days.
Meantime, U.S. bond yields are pulling back a bit. The bit of relief for investors after benchmark 10-year yields pushed through 1.9 percent on
Friday following that strong U.S. jobs report.
A lot will be riding on U.S. inflation numbers that come out on Thursday. U.S. consumer prices are expected to hit new 40-year highs putting new
pressures on the Fed to tighten policy.
European bond yields are on the rise as well. On rising speculation that the ECB will begin raising rates later this year.
Art Hogan is managing director and chief market strategist at the National Securities Corporation and he joins us live. Great to have you on the show.
ART HOGAN, MANAGING DIRECTOR, NATIONAL SECURITIES CORPORATION: Thanks so much for having me.
KOSIK: So, we have a slew of earnings this week, inflation data coming out. My guess is that the focus is more going to be on the inflation data. What
do you think investors should be expecting this week and do you anticipate inflation data that we're going to get? Is it going to be better or worse
or maybe even the same?
HOGAN: Yeah. You know you get point. So, we just had a terrific jobs number last Friday and in a real sense, for a number that surprised so much not
just on the actual print and the revision from the month before. It wasn't that much of a market mover. Of course, you saw yields sneak above 1.9
percent for a bit and they're backing down again today.
But I think that the most important piece of economic data now in the current situation is that it gives a read on inflation. So, the CPI
certainly falls right into that neighborhood. It comes out on Thursday. And the year-over-year numbers which are still compared to a very low base 12
months ago are going to be eye-popping large. But we suspect that the sequential increase is going to be down on a month over month basis.
I think that's going to be the pattern for the first quarter where we see the month over month changes decreasing in order of magnitude and likely
start flattening out. I think we've reached - we're at or about peak inflation right now, I think. And I think those numbers start to get better
as we work our way through the first quarter and into the second quarter.
So, I think the trepidation over how aggressive or how hawkish this Federal Reserve is going to be this year, likely pulls back a bit and we start
paying attention to things like the other pieces of the puzzle, better earnings and certainly better economic data across the board.
KOSIK: But it is hard to not focus on what the Fed is doing at least at the moment. You look at these aggressive takes on what could happen. Bank of
America calling for seven rate hikes this year. You know the market really seems to be searching for clarity with these rate hikes. Bank analysts
though they seem to be the ones making the calls. It feels like the Fed kind of has lost control of the conversation here and is letting banks
drive the story here and set the tone. How much of a mistake is that?
HOGAN: Well, if there is a mistake being made, it is like being made by the folks on the street like myself versus the Federal Reserve. Who likely
doesn't know how many times they have to raise rate this is year? I think they're going to raise rates 25 basis points in March. That seems to be the
only certainty that we have.
Right now, on their dot plots and the summer economic projections, they've told us that there is likely three and maybe there's four. But the
difference between where the Fed is and what they've told us so far, it is a very transparent Fed. And the street is, as the street is sort of playing
this game of leapfrog and everyone wants to be a little more hawkish than the next person.
So, Goldman comes out with five. And Morgan Stanley comes out with 6. And Bank of America comes out with seven.
So, I think that -- where the mistake is going to be made is the street rushing to a place in a linear fashion that is far askew from what with the
Fed might actually do.
[09:45:02]
And I think that as we start to see some of the data coming in, and this is going to be a very data-dependent Fed. They'll likely let us know and if
they're going more than three or four times, they'll let us know along the way during the process. And I think, right now, we're just in a sort of
anticipation phase. And I think that causes so much concern and wild actions certainly in equity markets that we've seen so far this year.
KOSIK: What would you tell someone who has some cash on the sideline, how to invest in this volatile times? Is the opportunity really in tech? Where
do you see the most opportunity?
HOGAN: Interestingly, if you go back and look at the four rate hike cycles that we've seen over the last 30 years. What's happened in the first year
has been the S&P 500 actually does OK. It typically does about half of what it had done the year before. So that points to an S&P 500 having high
single-digit or low double-digits total return.
But the sector moves typically tend to be on the front end of that first year is the economically sensitive cyclicals to think about banks,
industrials, materials. And they tend to outperform and the front part of this. And then, it sorts of the back half of that first year of rate hikes,
you tend to see growth come back into favor, especially if rates are going up for the right reasons.
But it is kind of growth names that are measured by a price to earnings, not a price to revenue or a price to sales. You want to make sure you're
looking at growth but growth that actually is measured on a P/E basis. So, I think that if you had a barbell approach this year, you're going to
likely going to outperform this market. Meaning you want to have exposure to both economically sensitive cyclicals and growth and make sure your
growth side is anchored to companies that have cash flows and throw off earnings.
KOSIK: OK. Art Hogan live from Nantucket, Massachusetts. It looks pretty there. Thanks for joining us.
HOGAN: Thank you.
KOSIK: Coming up after the break. Why space needs a sweep? The White House wants rid earth's orbit of space junk. We'll show you how, next.
(COMMERCIAL BREAK)
KOSIK: Welcome back to "FIRST MOVE."
We've been exploring how people, communities, businesses and industries in Japan are innovating and preparing for a world beyond the pandemic.
Today, CNN's Blake Essig looks at how a tech giant formed in 1935 is hoping to transform Japan's traditional work culture.
(BEGIN VIDEOTAPE)
BLAKE ESSIG, CNN INTERNATIONAL CORRESPONDENT (voice-over): For many people living in cities across Japan, this is a familiar scene -- salary men and
women heading to work on their morning commute.
For decades, these crowds have been a symbol of the country's workforce, and a reminder of its notoriously rigid work environment. The long hours,
strict hierarchical structures, entire lives revolved around jobs.
(on camera): Well, in the last few years, there have been moves by the government and companies to help address work-life balance. The pandemic
has accelerated that movement. And although it might not look like much has changed on the surface, experts say Japan's workplace culture is evolving.
[09:50:07]
CHINATSU KANEKO, SENIOR DIRECTOR, CBRE: Yes, it's a massive change. It's almost dramatic, but it's definitely the way we need to go if Japan or any
corporation wants to continue to be innovative and be competitive in the market.
ESSIG (voice-over): Meet Hiroki Hiramatsu, Chief Human Resources Officer for Japanese tech giant, Fujitsu. He is the architect of its Work-Life
Shift Initiative set up to help employees balance their personal and work lives.
Fujitsu says it incorporates remote working, hybrid work styles, new digital tools, even working vacations to help boost productivity and
wellbeing.
HIROKI HIRAMATSU, CHIEF HUMAN RESOURCES OFFICER, FUJITSU (through translator): The purpose of the Work-Life Shift Initiative is for employees
to proactively choose when and where to work. To achieve this, we wanted to create an environment where remote work can be done comfortably. In the
office, we needed to change the layout to make it more comfortable for real communication.
I used to think the Japanese companies could not change that easily. However, when all our employees in Japan were required to telework because
of COVID, everyone adapted to it. Around 80 percent of our employees said they wanted to make their own choices.
ESSIG: Fujitsu first created the initiative so its Tokyo-based staff could work from home during the Olympic Games. But the company launched the plan
early nationwide in July 2020.
While Fujitsu says a majority of their employees are happy with their new normal, experts say there are challenges.
KANEKO: So, it's a huge shift in communication between managers and employees. Managers have to go through this transformation of mindset and
start to trust their employees.
Now on the employee side, they need to earn the trust of the management, so they have to be more proactive.
ESSIG: It's a challenge Hiramatsu is hoping to take on by creating more structured opportunities for communication.
HIRAMATSU (through translator): Originally, Japanese culture does not allow for frequent feedback. So now we've put together a system where supervisors
and subordinates have one-on-one meetings.
ESSIG (on camera): What does the future hold? How do you improve upon this initiative?
HIRAMATSU (through translator): We've seen productivity increase. I think the next goal is to be able to produce more innovative and creative output
through collaboration.
(END VIDEOTAPE)
KOSIK: The final frontier it turns out is a junkyard. Earth's orbit is littered with debris that has accumulated since the start of the space
race. Now the White House is taking steps to clean it up.
CNN's Kristin Fisher reports.
(BEGIN VIDEOTAPE)
KRISTIN FISHER, CNN SPACE AND DEFENSE CORRESPONDENT (voice-over): In space, what goes up does not always come down.
After decades of launches since the dawn of the space age, earth's orbit has become a junkyard of dead satellites and abandoned rocket bodies, and
anytime two objects traveling at about five miles a second collide, the impact could look like a scene straight out of the movie "Gravity."
In real life, no people in space have ever been hit but the International Space Station has. In 2016 a small piece of debris cracked a window on the
orbiting outpost. And in December, its crew prepared for an emergency evacuation after a Russian antisatellite missile test created a massive
debris cloud.
UNIDENTIFIED FEMALE: We will need to activate Dragon's safe haven.
FISHER: Today, U.S. Space Command is tracking more than 40,000 objects in space and only about 5,000 of them are active satellites. The vast majority
of space junks still in orbit is from the two major players in the first space race. Russia and the United States.
DOUG LOVERRO, FORMER U.S. DEPUTY ASSISTANT DEFENSE SECRETARY: If this spacecraft were left there by the U.S. government and in general, they
were, then that becomes their responsibility to clean it up in the same way that the military would not leave a broken-down tank on the battlefield nor
would it go ahead and leave a ship, a derelict ship at sea.
FISHER: But so far, the effort to clean up space has been led by Japan and the European Space Agency, and private companies. Some companies like
ClearSpace are trying to grab debris with robotic tentacles. Others are trying to catch it with a massive fishing net. And in August, a company
called Astroscale successfully tested capturing a small satellite with a magnetic arm.
RON LOPEZ, ASTROSCALE: We use a robotic arm that extends and attaches to the metallic plate. That allows us then to basically perform a tow truck or
a tug service, bringing that satellite down to a safe distance and then we can release it to naturally and safely burn up in the atmosphere.
FISHER: Astroscale caught the attention of Prince of Wales who visited its U.K. based mission control last week. The company now has debris removal
contracts with the U.K., the European Union and Japan.
[09:55:09]
LOPEZ: And U.S., unfortunately, we haven't seen, and we haven't gotten as much traction from the U.S. government.
FISHER: But the Biden administration is starting to change that. In January, the White House held meetings with experts about how to clean up
space and the Space Force is launching a program called Orbital Prime that will give companies the seed funding to do it.
GEN. DAVID THOMPSON, U.S. SPACE FORCE: Our vision in this partnership is to aggressively explore those capabilities with you today in the hope that we
and others can purchase them as a service in the future.
(END VIDEOTAPE)
KOSIK: And finally, on "FIRST MOVE."
You may remember we reported last week that Chinese authorities had changed the ending of the 1999 Brad Pitt movie "Fight Club." One of my favorites.
They deleted the final scene and added a caption saying the police saved the day. Well, that did not go down too well. Even in a country used to
censorship. After an outcry, the original ending where death records were destroyed as skyscrapers were blown up, that has now been restored.
And that's it for the show. I'm Alison Kosik. Feel free to reach out to 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
