Return to Transcripts main page
First Move with Julia Chatterley
Verdict Expected Today in Brittney Griner Trial; Bank of England Raises Rates, Predicts Recession; Malaysia Facing Debt of $234.5 Billion; Verdict Expected today in Trial of WNBA Star Brittney Griner; Booking Predicts Record Summer Despite Travel Chaos; Latest Profits, Data Suggest U.S. Economic Resiliency. Aired 9-10a ET
Aired August 04, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
BRITTNEY GRINER, BASKET BALL PLAYER, UNITED STATES OF AMERICA: Again I want to apologize my teammates and organization - for any damage that I may have
done to them I never intended on hurting them. This is my second home. And all I wanted to do was just win championships and make them proud.
Yes, tax insurance is we need to beat it may eventually become darkness that's a win - Nicola manufacture nobody did him he at the seller mean but
in doom look at all the way up to illegal which normally like especially was just.
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: We were listening there to a live interview with U.S. basketball star Brittney Griner, you were listening to
her apologizing she had no intention of breaking any Russian laws. It comes after days of hearings in her trial for bringing hash oil into Russia.
She's been there since February.
She was apologizing to her colleagues, to the Russians once again saying that she had no intention of breaking any laws. We are waiting, of course
now for a verdict to come in that trial. Prosecutors have asked for 9.5 years a sentence of 9.5 years in prison and of course, the United States
behind the students negotiating. And out loud trying to negotiate to work to get her released once this sentencing takes place.
Amanda Davies joins us now and under obviously, you know her as a sports star in the United States that she was working in Russia as well. And I've
been following this trial very closely. What do you make of what we heard from her there?
AMANDA DAVIES, CNN WORLD SPORT: Yes, Julia, I think it's fair to say it was a very emotional statement addressing the court from Brittney Griner. This,
her 8th hearing and you summed it up very well.
There she began on quite a lengthy statement through a translator went on for a good 7 or 8 minutes or so going back to her childhood talking about
her family life at home in the United States and the moral compass that was instilled by her family saying that her father told her two things to take
ownership and responsibility in life and to work hard.
And she went on to say that is why I pled guilty. I understand the charges, but had no intent to break any Russian law. That was something she brought
up three times within her statement stressing there was never any intention to break the law. It was she is pleading to the court to the judge on the
prosecutors to understand that it was just an honest mistake that after everything with COVID, and the time being stuck, unable to travel in
Russia.
She just wanted to get back home. She said she had no idea that when she moved to Russia to play with this team that she has been part of a good
number of years that they would become such an integral large part of her family. She says that she had no idea, the team, the city; my teammates
would make such a great impression on me. The fact that it had become a second home was another one of those phrases that she brought up on more
than one occasion, she apologized.
She made apologies to her teammates. It's a Yekaterinburg she apologized to her family, her parents and her siblings and to the people of her fellow
players of the WNBA in the United States who have supported her and been doing all they can. As you know to try and take her back to America after
this six months where she has been in prison.
She then brought up what so many people have been discussing with this case that the political ramifications of it she said for all the talk of the
politics. I hope that has no place in this courtroom. She was hoping that the court would take into account the documents and her character
references. And then as she got particularly emotional towards the end, she apologized once again, saying all I wanted to do here was to win
championships and make you as a team proud.
It was a very, very moving statement, Julia, just a mere matter of minutes after hearing the prosecutors call for a 9.5 year prison sentence. And we
do understand that there will be a verdict reached later on Thursday evening in Moscow.
I think not and then of course, we will bring that to our viewers as certainly as soon as it arrives. You quite rightly point out the political
backdrop here that Brittney said she hopes doesn't play into this and that's always been the big fear.
[09:05:00]
CHATTERLEY: The Russians have accused the United States of employing megaphone diplomacy in their requests and broadcasting what they're hoping
for here, which is an exchange, not only have Brittney but of course, another prisoner, Paul Whelan. And Russia has asked for the exchange Whelan
steal evict about. And CNN is reporting that Russia is also asking for the convicted murderer, Vadim Krasikov as well, of course, I'll remind our
viewers that CNN reporting on that story, too.
DAVIES: So this is sort of the backdrop, in addition to what we're waiting for the verdict here. I think, to your point, as well. And this is
something that we've all followed very closely as her family back home and her wife in particular, that's been continually requesting for attention on
Brittney's story as well.
CHATTERLEY: And what sort of brought it home to me was what she said there at the end, which he was, I hope you will not end my life with your ruling,
because that's what in many ways, whether it's career or 9.5 years, if that's indeed what the sentence comes through, as in the prosecutors are
talking about, I mean, that's huge, dramatic life changing.
DAVIES: Yes, absolutely, it is, and that there was a very subtle shift wasn't there after the initial, it was initially revealed. What had
happened there was the uncertainty there was a lot of the information kept behind closed doors. It only emerged after the events of the arrest in
February and the family had respected privacy.
And those closest to her had said your please we do not want this to be talked about in the public domain, we do not want her to be used as a
political pawn. And then as things have gone on, and time has elapsed, there has been a general feeling that bringing this story into the public
domain is perhaps the way forwards.
And the statistic that is being talked about all so often in this case is that the number of these cases and these situations where the verdicts that
is overturned and the prisoner is released. Those statistics that are pretty bleak on paper and 9.5 years is a long time having already served 6
years and this is she has a sports star who is at the top of her game as a 2 times Olympic gold medal winner.
We've seen in recent weeks and months that the profile the support that she's had from players in the NBA during the NBA Finals. And a lot of
people are understandably watching with interest and with fingers crossed to see what happens over the coming hours, Julia.
CHATTERLEY: Yes, and we'll just bring that verdict to our viewers the moment it comes through. Amanda, thank you very much for your context there
Amanda Davies.
OK, let's return now to some business news and plenty to come this Thursday, including a major interest rate move by the Bank of England and
strong Alibaba results showing a resilient Chinese consumer that's welcome news.
Let me give you a look on Wall Street as well. U.S. stocks set to build on Wednesday's strong gains the NASDAQ rising more than 2.5 percent investors
appreciating I think new data showing a resilient U.S. economy too with services sector activity actually picking up steam.
Last month some hints of easing inflationary pressures in that data to we'll discuss later on in the show. We've obviously got us jobs numbers out
tomorrow too and they're going to be key. As more corporations announced layoff plans.
Walmart is now saying it plans to cut 300 corporate positions as its profit problems mount. That's cost cutting measures clearly. And in Europe, U.K.
stocks are higher after the Bank of England raise rates by half a percentage point as expected. That's his biggest hike since 1995. When
Wonderwall by Oasis was in the charts, while that feels like a long time ago, no a waste is a tool from inflationary pressures though the Bank of
England expects price rises to top out at more than 13 percent in October. And it's also warning on recession risks.
In the meantime, Germany posting its fifth straight month of declining factory orders too. Across the Asia and you can call it a post Pelosi
Taiwan trip turnaround stock solidly higher, after the house speakers departure and raising some at least of what was lost earlier this week Hong
Kong, the big winner actually more than 2 percent. That said though, tensions do remain high in the waters of Taiwan.
The Chinese military has begun what it says will be days of massive military maneuvers. We'll discuss the ongoing tensions and an escalation
what an escalation might mean for regional trade with the Finance Minister of Malaysia. He's coming up on the show too.
For now though, let's give you the latest video from the Chinese military showing multiple conventional missiles were launched from Mainland, China
in Thursday's live fire exercises targeting areas in the waters of Taiwan's East Coast. The drills prompted Korean Air to cancel flights to Taiwan over
safety concerns. Selina Wang joins us on this now.
[09:10:00]
CHATTERLEY: Selina, good to have you with us. We were asking yesterday what an actual blockade would look like and what it would feel like. And I think
what the strikes into the waters of Taiwan prove is that China has the capabilities to create one if they choose to do so, as these launches now
over what do we know?
SELINA WANG, CNN CORRESPONDENT: Well, Julia, these military drills are going to be continuing over the next few days through Sunday. But I think
you really got that point, right, because the message China is sending here is that it has the ability to choke off Taiwan from the rest of the world.
And one of the biggest impacts of these military drills is psychological. It is inflicting fear in the people of Taiwan of the worst of what could
still come. Because even if we do not see conflict breakout in the short term over the Pelosi visit, the fear is that the visit gives China an
excuse to change the status quo and increase its coercion of Taiwan over the long term.
(BEGIN VIDEOTAPE)
WANG (voice over): Jet scrambling to take off, missiles on the move, and plumes of smoke seen by residents in the Chinese city closest to Taiwan.
The video shows live rockets being fired towards the Taiwan Straits. Moment's later state media confirmed the launch. The woman filming says
wow; we're witnessing history Beijing unleashing a show of force on Taiwan over U.S. House Speaker Nancy Pelosi's visit to the island. China's
military claims it's starting the largest ever drills around the island.
CAO SHAOQING, PILOT, PLA EASTERN THEATER COMMAND: My teammates and I flew our fighter and headed for the air spaces around the Taiwan Island. We are
ready for combat is able to fight at any time.
WANG (voice over): Define Beijing's threats Pelosi met with Taiwan's president and key lawmakers and business leaders. Crowds of supporters in
Taipei welcomed her.
REP. NANCY PELOSI (D-CA): Taiwan has been an island of resilience and now more than ever, America solidarity with Taiwan is crucial. And that is the
message we are bringing here today.
WANG YI, CHINESE FOREIGN MINISTER: China's foreign ministry says the trip is a quote outright farce. Taiwan calls this the median line. More than 20
Chinese warplanes crossed the line the day after Pelosi landed an unprecedented number.
DREW THOMPSON, SCHOLAR: They're demonstrating that they don't recognize Taiwan's lives because they don't recognize Taiwan. So this is an act of
political warfare, psychological warfare and information warfare. It's also a very important signal to China's own people to demonstrate its resolve.
WANG (voice over): These boxes encircling the island are where Beijing says their military drills are happening. It's a blockade say both Beijing and
Taipei and to major provocation in the eyes of Taiwan and the U.S. But to a lot of Chinese citizens, it's not enough, especially after officials had
hyped up expectations of an unprecedented military response.
Disappointed wrote one person on China's Twitter like platform Weibo another mocked that its leaders should speak less do more. But far from
speaking fewer officials are issuing one fiery statement after another, all condemning Pelosi's trip. It also banned imports of thousands of food items
from Taiwan and suspended exports of natural sand, a key component in semiconductor chips, all of this rage, just over a two-day visit. Pelosi's
presence in Taiwan, a slap in the face to Beijing, which insists the self- governed Island, is a rebel Chinese province.
Pelosi is out of Taiwan, but she left a crisis behind her. Beijing's retaliation is just getting started.
(END VIDEO CLIP)
WANG: And we've been expecting this muscular show of force because China needs to live up to the expectations it set in all the threats it was
making leading up to this trip. But the reality is, even though these drills increase the risk of a miscalculation, China does not actually want
this to spiral out of control.
When we look at these very striking images, we have to remember that they're also directed at the audience here, because Chinese leaders want to
show their people that they are taking very seriously what they're calling a national humiliation. So we have to watch really closely how far China
actually goes in these military drills. Not how far they say, they will go Julia.
CHATTERLEY: Great point, Selina Wang, thank you for that context. Good to have you with us. OK, let's move on the Bank of England raised rates by the
most in 27 years, as it fights inflation at last seen in the early 80's. But that won't be enough to save the U.K. from a year long recession.
According to the bank, it predicts that inflation will hit 13 percent by year end.
Clare Sebastian joins us on this.
It's just painful reading. I just have been reading through this statement. I think they're going to 2023 with the highest inflation. And the worst
growth of all the G7 nations, Clare, they're raising rates because they have to but the outlooks bleak.
[09:15:00]
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes Julia, their hand was forced; I think with inflation already at 9.4 percent, there was very little that
they could do to sort of get around there so half a percentage point, almost unanimous just one dissenter on the committee. And as you say, this
was forced by inflation.
And the biggest factor in that, according to Andrew Bailey, the Bank of England governor was Russia, the impact of the war in Ukraine and what
that's done to energy prices, he talked about a doubling of wholesale gas prices, since May that is trickling through to retail prices.
So we have a forecast of a recession starting in the fourth quarter that will extend through 2023 inflation set to peak in the fourth quarter as
well over 13 percent.
Bear in mind, their previous forecast for inflation to peak was at 11 percent. So this is a significant uptake just in the last few months. And
he then acknowledged that sort of uncharted, very difficult, very controversial moment that this is for monetary policy, raising rates this
aggressively when the U.K. is essentially already probably contracting. And that U.K., you know, people are facing a historic cost of living crisis,
here how he justified it.
(BEGIN VIDEO CLIP)
ANDREW BAILEY, GOVERNOR, BANK OF ENGLAND: If we don't bring it back to target, and if we get these so called second round effects entry, and it's
going to get worse and it will get worse precisely, I'm afraid for those who are least well off in society.
So while I have huge sympathy, and you know, huge understanding for those who are struggling most with this and I know that they will feel well, you
know, why have you raised interest rates today? Doesn't that make it worse from that perspective in terms of consumption? I'm afraid miles that is it
doesn't because I'm afraid the alternatives are even worse, in terms of persistent inflation.
(END VIDEO CLIP)
SEBASTIAN: Frontloading Julia, in other words, that's exactly what we heard from the ECB with its first rate raised 11 years, just a few weeks ago. He
did also note multiple times throughout that press conference that any forecasts that they're giving today are fraught with uncertainty, not just
what Russia might do.
But also, you know, worth pointing out that there's going to be a new Prime Minister in the U.K., by the time the Bank of England holds its next
meeting. So a lot of uncertainty there, a lot of things could change. Just a quick look at the pound before we go it's actually come down a little bit
and not supported, as you might think, by higher interest rates, but actually down a little bit probably because of that recession forecasted
in.
CHATTERLEY: Yes, I mean, the challenge that every central bank I think in the world is facing at this moment, deep uncertainty beyond anything else.
Clare Sebastian, thank you for that.
OK, straight ahead, the Malaysian Finance Minister talks challenges, economic growth and supporting the economy with all the challenges the
world is facing today. And travel giant booking holdings expecting a record season, even as canceled flights and COVID challenges continue to wait.
That's all coming up, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". U.S. stocks on track for a mixed open this Thursday boosted though by positive earnings from the likes of
insurance company Cigna and Burger King parent company.
Restaurant Brands tech stocks and are positive for the month of August after July is more than 11 percent Jump. Wow! Earnings news out of Asia to
Alibaba shares set to rise around 5 percent in U.S. trade after posting better than expected results.
China's online retail giant seen flat revenues for the first time ever that said investors were expecting worse given the weakening Chinese economy
expectations are for sales to pick up once again, as lock downs in major Chinese cities is.
Now slowing economic growth out of China just one of the headwinds Malaysia is dealing with on top of lingering global supply chain issues and of
course, the war in Ukraine the country's also still battling like many other nations in the world, the pressure of higher prices.
However, Malaysia has inflation rate of 3.4 percent is among the lowest in Southeast Asia thanks to record government subsidies, they say keeping a
lid on rising prices. Economic growth numbers are also strong and the second quarter looking good.
However, the problem with those record subsidies sky high debt still, Malaysia's Finance Minister says the country is not at risk of any kind of
economic collapse, similar to what's being seen in Sri Lanka at this moment. We have much to discuss.
Joining us now is Malaysian Finance Minister, Tengku Zafrul Aziz. Minister Zafrul, fantastic to have you on the show! Let's start with what you've
been discussing now for many months, which is the challenge for the Malaysian people. And that's pricing pressures, food; fuel across the board
and of course, the challenge of dealing with it. Is that the same today?
TENGKU ZAFRUL AZIZ, MALAYSIAN FINANCE MINISTER: Thank you, thank you, Julia, thank you for having me here. It's good to see you live. On
Malaysia, I think you've summed up quite well, just now; we have inflation under control relative to our neighbors and relative to what we see in the
rest of the world. Inflation is forecasted to be between 2.2 percent to 3.2 percent. In fact, first six months of the year, inflation is around 2.5
percent.
And that's largely due to the large size of subsidy that we have introduced, and we are forecasting it to be around 80 billion ringgit as
close to 20 billion U.S. dollars. So we have kept, especially the essential items, especially fuel is at about 40 cents per liter right as one of the
cheapest in the world.
But the concern is, of course, when you said what the impact to our fiscal is, the fiscal constraint? The answer is actually Julia, we still have
fiscal space, our debt to GDP is at 60 percent, our statutory debt over GDP, we have imposed the ceiling by Parliament at 65 percent. So there's
still room and we're still maintaining our target deficit at 6 percent.
We are obviously a commodity export country, we do benefit from the stronger commodity prices, especially the prices in oil, the budget, for
example, assume all price at $66. Today, as you know, it's much higher than that just slightly below $100. And all the subsidies mean that if we didn't
implement the subsidies. Actually, our Department of Statistics said that our inflation could be around 11 percent.
CHATTERLEY: Wow! I mean, subsidies, as you know, as well as I do, and many will people will be looking introduce other challenges. But to your point,
I think with the pricing pressure issue, this is what you focus on first.
So let's break it down, as you said, near $20 billion worth of subsidies this year. And I believe that is a record. You are also looking at the
efficiency I know of those subsidies as well. Can you just confirm that there will be no cuts even when you look at the efficiencies, as far as the
people are concerned?
You're not going to remove any of those subsidies this year and you will find the money to finance them because by your own admission, the revenues
this year are not going to be enough to finance them. So you are going to have to raise money some other way.
AZIZ: Yes, you're right Julia. We are not planning to reduce the subsidies this year. We are slowly recovering from what we all went through the
pandemic. COVID-19 has really impacted the economy which is slowly opening up the borders of vote and opens up; the economic sectors are open up.
[09:25:00]
AZIZ: And the first quarter GDP growth was a strong one 5 percent and second quarter looks stronger. And we do not want to, you know, pull the
handbrake too soon. So we've seen that subsidies do help the economy. But like I said, it is not sustainable to continue this kind of subsidies in
the longer term.
But in the short term, something that we need to do, by longer term, the subsidy has to be more targeted to this is a blanket subsidy, everyone gets
someone who, you know, freeze, the top 20 percent of the population continues to enjoy the subsidies, same amount of subsidy as the bottom 40
percent of our population, for example. And as you know, the rich consume more so they actually benefit more from the subsidy.
So in the longer term, you're right, it's not sustainable. But in the short to medium term, especially in the short term, in this case, we need to
contain, we need to be responsible what's happening today, in Malaysia. And of course, it's similar to what's happening globally. Having said that, we
are cautious as well, monetary policy is tightening also in Malaysia, right?
We have increased gradually in phases by 25 basis point to a few months ago, and another 25 basis points month ago so it's about 50 basis point,
but it's still below our rates are still below what it was before, pre pandemic.
CHATTERLEY: You understand, I think that's the most delicate balancing act that many political leaders have been through over the past few years,
which is trying to support your economy, keep your people happy, maintain the confidence of international financial markets as well, which is
something that tends to be forgotten as people are dealing with the ordinary challenges of living, your FDI flows have remained solid, that
trade figures look strong, which is part of the benefit I think of as being a commodity net commodity exporter in in these kind of moments.
But I want to tackle something that I've seen written about in the press, which is comparisons between Malaysia and the economic challenges in Sri
Lanka at this moment, not today in Sri Lanka, but the progression and the economic deterioration. Can you just explain to our viewers, and perhaps
also to your people, why the situation isn't similar? And why you'll continue to maintain the confidence of financial markets in particular?
AZIZ: Thank you, Julia. Well, if you compare the economies of Sri Lanka and Malaysia, it's very different. We have much more diversified. Sri Lanka is
very much focused on tourism. We obviously like you mentioned, we are a net exporter of commodities.
For example, our reserves its 106 billion U.S. dollars compared to Sri Lanka is only $3 billion and if our debt to GDP, as I mentioned just now is
around 60 percent. Whereas Sri Lanka is, you know, above 100 percent.
And more importantly, if we look at where we are today, in terms of our borrowings, our foreign denominated borrowings, only 2.5 percent of our
total debt. So 97.5 percent is actually in ringgit our borrowings. So we are less and then of course, Sri Lanka is facing a twin deficit. And we are
not.
CHATTERLEY: Yes, I mean, there are significant differences in the baseline economics between the two countries. It's the fiscal prudence that I think,
from here on out, that is the key. And as you've said, you maintain eyes on it. Can Malaysia avoid a recession, given that it is such an open economy?
If we do see even a soft recession in the United States, a potentially likely recession, I guess, in the EU, and of course slowing growth in
China, who is your largest trade partner?
AZIZ: Yes, for Malaysia, we are optimistic that this year, we will post a positive growth between 5.3 to 6.3 percent. As I mentioned, we have not we
know our first quarter result that's around 5 percent.
And second quarter even be stronger than that. And our third quarter, by definition, our third quarter last year was actually negative. So the third
quarter this year will continue to be positive. So we are quite optimistic that it will be despite the slowdown in the U.S.
And you're right, we are open economy trade to GDP is wondering 20 percent. But the concern will be 2023, right? 2023 will be a challenge. We need to
see how the world economy performs then. And that's when I think we really need to relook at some of our policies. But what's important is we must be
prepared that the economy, the global economy is slowing down.
CHATTERLEY: I think also what was lost in the past few days was a visit by the U.S. Speaker Nancy Pelosi to Malaysia, as well as other nations in the
region, which I do think is important for us all to note, but obviously the tensions between China between Taiwan in particular, but obviously we can
add in the United States has been very much watched here.
Can I ask how closely you're watching it? And just as a hypothetical, what a blockade of the Taiwan Straits would mean for Malaysia's economy and for
the region in terms of economic outlook, because it's of course a key trade route?
[09:30:00]
AZIZ: Yes. Well, China is very important in Malaysia in terms of trade. This our biggest trading partner, there is risks of slowdown if that
happens.
Me, as finance minister, we're monitoring this very closely from the economic perspective. Like I said, China is a major trading partner to
Malaysia, and we've seen Malaysia's economy performance is also dependent on how China tackles its own COVID policy, it has been very conservative
and is affected our supply chain, for example.
So if, if anything happens with Taiwan, we will definitely have to monitor this very, very closely as it will have impact, you know, regional
stability is crucial for our recovery.
CHATTERLEY: And policy will adjust accordingly, because you'd have to.
AZIZ: We will have to, you're right, Julia, we will have to, everything's very fluid. And we will monitor this closely.
CHATTERLEY: Can I ask you about your personal political ambitions? And I'm sort of smiling as I say it, because again, a lot of has been made of this.
You've been made the treasurer of the political coalition that were well known by Malaysians.
Can I ask what your political ambitions are? And admittedly, you have to focus on the job at hand now, but do you have ambitions, perhaps, maybe to
leave the country one day? I'm smiling by the way, as I ask this question, yes.
AZIZ: --answer that, but I think that's the toughest question today.
CHATTERLEY: I do the best.
AZIZ: Thank you for that question, Julia. Yes, well, my focus is really a service to the nation. I'm a Senator today, and it's a limited term
probably in Parliament. As a senator in parliament in Malaysia, you serve a limited term for six years.
And if you want to continue to serve the nation, you need to be actively involved in policy, in politics, right. So my, my focus now is on
continuing to the fiscal reform and to continue in the longer term. I, you know, decided to go into politics and, you know, play a role in, in a
political party.
CHATTERLEY: You know, as you found over the last two years, that responsibility can mean tough decisions. It can mean unpopular decisions.
And I think as we look around the world, we've seen leaders that have decided to perhaps make populous decisions, make promises, perhaps that
they can't keep. How do you avoid those kinds of choices? Maintain truth, even when actually telling the truth may harm you politically? How do you
find that balance?
AZIZ: Well, there is to meet doing the right thing there's, you just have to do it, there's no tradeoff for that. What's important is people
understand why you make a tough decision. Always the problem when making a tough decision is you do not find the time. And the best way is to
communicate this well, right.
You know, we need strongest stakeholder management. And we have done that and we made a lot of tough decisions, especially during the crisis,
pandemic COVID-19 crisis. So I think communication will be key and best to also focus on the nation reform.
CHATTERLEY: Yes, talk to the people, Sir, great to talk to you.
AZIZ: Yes, talk to them.
CHATTERLEY: Come back and talk to us soon please. And we'll track your progress. Militia Finance Minister there, Tengku Zafrul Aziz.
AZIZ: Thank you.
CHATTERLEY: Sir thank you for your time. Thank you, more on "First Move" after the break.
(COMMERCIAL BREAK)
[09:35:00]
CHATTERLEY: Welcome back to "First Move". In the coming hours we expect a verdict in the Brittney Griner case. The U.S. basketball star has admitted
to bring in cannabis into Russia. Moments ago she said it was an honest mistake.
(BEGIN VIDEO CLIP)
GRINER: That's why I pled guilty to my charges. Understand everything that's been said against me the charges that are against me and those will
- guilty, but I had no intent to break any Russian law.
(END VIDEO CLIP)
CHATTERLEY: The prosecutor is seeking a nine and a half year jail time. Griner was arrested in February after vape cartridges with cannabis oil
were found in her luggage. Excuse me; CNN Correspondent Kylie Atwood joins us now.
Kylie parallel, of course to this trial with the negotiations by the United States with Russian officials to try and secure her release. Where will
this announcement of a verdict then leave those negotiations?
KYLIE ATWOOD, CNN U.S. SECURITY CORRESPONDENT: Yes, so the expectation is that today will impact those ongoing conversations to try and get Brittney
Griner home. And here's why because U.S. officials have said that there would probably need to be both admission of guilt from Griner, which we
have seen she pled guilty.
And she reiterated today in court that this was a mistake that she didn't intend to break Russian law and that there would be to be sentencing in her
trial. And that is what we are waiting for today before there could be any sort of actual prisoner swap that would occur here.
Now, the Biden Administration did go to Russia back in June, to try and get the wheels turning on this to try and get a prisoner swap as part of a deal
to get Brittney Griner and Paul Whelan, another American wrongfully detained in Russia home.
And we are told that the Russians didn't come back with really substantive, legitimate response to that. They proposed that there was another Russian
that they wanted included in that that Russian is actually serving a prison sentence in Germany, lifetime prison sentence for murder, in addition to
Viktor Bout, who is a Russian who is serving a 25 year prison sentence here in the United States.
But the Biden Administration said that wasn't a serious counteroffer. So the question now, is that, with this sentencing expected today, will the
Russians engage in more serious counteroffer? We don't know if that's the case.
But the expectation from U.S. officials has long been that the conclusion of this trial is a significant marker as part of these efforts to get
Griner home.
CHATTERLEY: I think you raise a very important point given the political backdrop, as we've already discussed on the show and the fear, perhaps in
the U.S. administration that they're being toyed with.
If we look at some of the comments that the Kremlin spokesman Dmitry Peskov said earlier this week, it was that negotiation should be discreet that
megaphone diplomacy. I think he called it on public exchanges a position won't lead to a result. Kylie, is there a significant fear that despite
these negotiations taking place, Brittney could be spending a significant amount of time remaining in Russia?
ATWOOD: Most definitely there is I mean, in the Russian judicial system, the conviction rate is 99 percent. So we aren't expecting today
unfortunately, that she's going to be let go.
We are suspecting some sort of a prison sentence and the charges that she is facing are punishable with up to 10 years in prison. So there are very
real and legitimate concerns that she could be there for a while.
[09:40:00]
ATWOOD: And that's why the onus is on the U.S. government on the Biden administration to try and get her home. And we should also note that all
families of Americans wrongfully detained abroad really do put pressure on the U.S. government, work with them to try and get their loved one home.
But Brittney Griner is a bit of a different circumstance here, just because she's so high profile. And it's not just her family who is pressuring the
Biden Administration, but it's also her teammates.
It's the WNBA, where she has been a basketball star, all of these different groups putting pressure on the Biden Administration. And that makes this an
even more challenging and high profile situation more challenging for the Biden Administration. And of course, the Kremlin might be pleased by that.
CHATTERLEY: Yes. And we await that verdict in the next hour. For now, Kylie Atwood, thank you for that. Well "First Move" after the break, stay with
CNN.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". Travel giant booking holdings declared a milestone quarters overnight stays returned to pre pandemic
levels. But a full recovery still some way off the parent company of brands including Kayak, Priceline, and Booking.com reported second quarter revenue
that came in slightly below estimates.
In addition, airport lines and cancellations hurt growth in July. But its CEO remains optimistic he's predicting a record summit season and joining
us now here is Glenn Fogel, CEO and President of Booking Holdings, Glenn always great to have you on the show, congrats.
This does feel like a milestone in terms of recovery. But I have to ask you what you think exactly happened in July, and why it won't continue.
GLENN FOGEL, CEO & PRESIDENT, BOOKING HOLDINGS: Well, thanks for having me, Julia. And you're right. That is what everybody looks at. We had a
fantastic second quarter. And of course the first thing --that's great. Tell me about July and what's going to happen.
It's like we are very happy how we progress. This has been a long two and a half year recovery from the pandemic, either ups and downs always. There's
no linear recovery. Certainly there are a lot of hypothesis about Gee, is this something macro?
Did people all of a sudden book in May because when Omicron went down, so we pulled bookings forward so to speak or is there something else
happening. People seeing all the news, apparently, there are a lot of news articles about crowds and airports.
[09:45:00]
FOGEL: And delays and cancellations are maybe feeling backed off a little bit. The one thing I am certain is that the long term view of travel is
very good. We're getting out of this pandemic, people are traveling through enjoying seeing their families enjoying life again, and we're going to be
part of it.
CHATTERLEY: Yes, I'm fascinated actually, by how consumer behavior is adjusted in this period, whether people are booking shorter stays, they're
aware of pricing pressures, or to point they're aware of sort of the media's coverage of pricing pressures, but also, some of the disruptions
and the frictions that we're seeing, or even whether they're just leaving it late to book.
I sort of wonder how, how much clarity you have on the third quarter really in into the fourth quarter, if people are sort of waiting to see what COVID
looks like, what the logistics looks like, and what that what prices look like, because I'm certainly having anecdotally those discussions, yes.
FOGEL: All those things come into play. And it's interesting, we talked last night in our earnings call, how we see for the third quarter, the
current quarter, how we are above where we were at the same time in 2019, which is great.
And we talked a little bit about the fourth quarter, and we said that we are 15 percent above where we were in 2019 albeit that 15 percent is based
on constant currency, Euros changed significantly.
And that would have a negative impact dollar basis; it would bring it down from 15, maybe a 5 percent increase. But here's the important thing, that's
still a small portion of what the total amount of bookings that will occur in the fourth quarter, because the window right now, we talked about this
booking window, how far people booked in front of when they're going to go, is less, though, is less than it was in 2019.
So you don't have as much visibility into what's happening. And I think there is some uncertainty, people are concerned, they listen to the shows
on the news. And they say, Gee, maybe I'm going to delay a little bit.
So we don't know, really fourth quarter, we don't really have a great view into it. But I do have a great view into the long term. And I'll say it
again; the long term is travel will continue to increase as GDP goes up over the long run, so does travel.
CHATTERLEY: Yes, I know, so people just want to get back out there. It's interesting what you say about confidence, and also, what I heard on your
earnings call about the uneven recovery, because Asia in particular, Southeast Asia has lagged in terms of COVID recovery and getting back
moving again.
You provide a survey of Asia Pacific region, I think it's 11,000, travelers across 11 nations, and looked at the level of confidence over the next 12
months. And topping that list, the Indians are most confident than the Vietnamese.
And then the Chinese, which actually surprised me, given what we've seen, particularly over the last couple of quarters, can you give us some context
on there, and whether that's translating to what you're seeing in terms of booking, bearing in mind, everything that we just discussed?
FOGEL: Well, look, it definitely is different in different countries. Absolutely, and one of the things we noticed, then the recovery, looking at
the second quarter is how Asian travel in general, is still below where it was in 2019 versus say the U.S. for which is 30 percent ahead for us versus
2019.
So different countries have different levels of competence and look, the rules in terms of travel are very different in China than they are in other
parts of Asia and other parts of the world.
And there are still some other Asian countries that have different restrictions on travel and that impact somebody's confidence in travel. So
those are the factors that come in, again, well, we all hope is the same thing, which is that the pandemic goes away.
And we do end up back the way it used to be, where travel was much easier than it has been over the last two and a half years.
CHATTERLEY: You know it's fascinating when I was looking through the results as well; there are two things that catch my attention. Because
you're not just about travel. It's also about restaurant booking.
So you have a great sense of how the consumer is behaving amid pricing pressures, and perhaps trying to be a little bit more cautious about
budgets. But also the alternative bookings, the rentals of homes are a huge chunk of the business to and that obviously did incredibly well during the
pandemic.
But that continues to be a real pillar of strength too, which actually surprises me. Are you surprised by that? Or is that sort of part of what
you were expecting as well?
FOGEL: I'm really not surprised because that alternative accommodations, as we call it, the non-hotels, once people have tried it, and they liked it,
they'll look at it again, when they're thinking about should I use a hotel or not?
And what's really the best place to stay for the type of hall that they want to take. So there are different use cases for different types of
properties. But once somebody is trying to they're less concerned about Gee, is this going to good or not. And we are pleased to see that almost a
third of our business 32 percent of our business in second quarter was this alternative combination.
CHATTERLEY: Right.
FOGEL: And that's a couple of percentage points above where it was 2019. So I think this is a trend that's going to continue.
[09:50:00]
CHATTERLEY: Yes, I mean that was this sort of stellar standout for me. It was the sort of ongoing strength but of course, you knew it already. Glenn,
great to chat to you! Congrats again on the quarter and we look forward to speaking to you again soon.
Glenn Fogel, CEO and President of Booking Holdings there, thank you. OK, coming up after the break a balancing act for investors weighing up strong
earnings outlooks on the one side and recession fears on the other. Who's right, we'll find out next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". With a look at the U.S. market price action and it's been a volatile start to the trading day on Wall
Street a bit of consolidation we're seeing after the strong gains in the previous session as investors brace of course to for Friday's U.S. jobs
report.
The jobs market is expected to see continued gains albeit weaker levels than in previous months. Or this is the latest batch of corporate earnings
results have come in strong and a new read on the health of the U.S. services sector also coming in positive too.
Rahel Solomon joins us now. One data point does not a trend make. However, we're poring over every single one to try and get a glimpse of whether
we're using the R word or not using the R word and this, this is a reason to be optimistic.
RAHEL SOLOMON, CNN CORRESPONDENT: We sure are, we you know Jason Furman recently said on Twitter Julia, that if you're not a little confused about
the economy right now, you're not paying attention. So I'm going to try to provide a bit of clarity here.
So yes, so your point, we got some strong data in terms of the services industry from the ISI report yesterday showing that not only did we
continue to see growth for the services sector in the services industry, but it was really broad based when you look at the industry's 13 services
reported growth in July.
In terms of earnings, Julia, we're about halfway through according to FactSet. About 56 percent of the S&P 500 has already reported. And of that
group, well about three quarters have actually surprised on the upside in terms of earnings.
About two thirds of surprise to the upside in terms of revenue, obviously welcome news, I should say, however, a FactSet pointing out that that's
lower than the five year average in terms of the number of surprises and the magnitude.
And then anecdotally, Julia, because we do sort of pour over every report and every data point, we're hearing from some CEO, certainly, like Uber
CEO, Dara Khosrowshahi and some of the banks that they're still seeing a strong consumer that they're not seeing signs of a recession just yet.
That said we got initial jobless claims this morning. A more real time, look at the employment picture here in the U.S. how many Americans are
filing for unemployment, slightly hotter than expected.
And then tomorrow, we will get the jobs report. So lots of data points, lots of reports. But as Jason said, if you're not a little confused about
all of these conflicting reports, you're not paying attention. Hopefully, that helped, that clear to that.
CHATTERLEY: If you deeply confuse and you're paying lots of attention clearly. So that's me you of course are never confused. And it's a great
point to watch by sectors as well just to get a sense of the different parts of the economy because clearly not all sectors move at the same time.
[09:55:00]
CHATTERLEY: And the consumer angles seem to be continuing, showing continuing resilience and I'll get my teeth back in. The show's over. Thank
goodness for that, Rahel Solomon, thank you and finally almost over.
Did you know dogs use their sense of smell to help them see? Researchers at Cornell University examined two dozen dogs and notice direct connections or
pathways in the brain that controls smell and vision.
They say that suggests the dog's sense of smell is more important than we thought. I have to say little Romeo has nose for trouble let alone eyesight
once he got his little snout jammed in some Tupperware. Yes, he did.
He was fine. But that's a story for another day. I do have the photographic evidence so but look, that's a good shot of his nose and his smile, any
opportunity? That's it for the show. If you've missed any part of news today, they will be on my Twitter and Instagram pages, search for
@jchatterleycnn. "Connect the World" is up next, stay with us.
(COMMERCIAL BREAK)
END
