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First Move with Julia Chatterley
NYSE Navigates Challenging 2022 Stock Landscape; IPO Market Struggling After Record-Breaking 2021; Deal Reached To Keep Chinese Firms Listed In U.S.; NYSE Monitors NYC Crime Rates; Serena Williams Rang The Opening Bell At The NYSE Friday; Russia Temporarily Shuts Nord Stream 1 Pipeline Again; Bed Bath & Beyond Shares Sink On Plan to Sell Shares; Flying Taxi Firm Prepares For First Test Flight; Goldman Sachs Lifts COVID Vaccine, Testing Mandates. Aired 9-10a ET
Aired August 31, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
[09:00:32]
ALISON KOSIK, CNN ANCHOR: A warm welcome to First Move. I'm Alison Kosik. Great to have you with us.
And lots to get to this Wednesday, including a convoy of international inspectors heading to Ukraine's embattled nuclear power plant amid ongoing
safety fears.
Plus, tributes pouring in from Mikhail Gorbachev, the last leader of the Soviet Union who died yesterday at the age of 91. We're live in Moscow with
the latest.
But first, a look at the markets. U.S. stocks on target for a higher open after a third day of losses for the major averages. Europe however, trading
mostly in the red. Wall Street closing lower Tuesday as new numbers on consumer confidence and job openings showed the U.S. economy still on a
solid footing increasing the chances that the Fed will have to continue to hike rates aggressively.
ECB officials hinting that an aggressive three quarters of a point interest rate hike might be necessary in the Eurozone too. Just released numbers
show inflation they're hitting fresh records and energy supply fears. The ECB hold its next policy meeting next week.
Meantime, mostly lower close in Asia, Chinese shares hitting four week lows as COVID cases spread and factory output weakens. More on the markets later
in the program.
But first, Russia has shut down the Nord Stream 1 pipeline again. Russian state energy giant Gazprom has halted all deliveries for three days in what
it says is a plant shut down for maintenance. The pipeline is Germany's main source of Russian natural gas, piling pressure on the region to find
other supplies from other sources as it stocks up on fuel ahead of winter.
Let's bring in Anna Stewart. She joins us now.
Anna, great to see you. You know, Europe can likely cope with a three day shutdown. But how would it get through winter if Gazprom doesn't restart
supplies?
ANNA STEWART, CNN REPORTER: And that has been the fear, of course, now for many weeks and months that Russia could just simply turn off the gas taps
to Europe. And it's a fear once again.
Now, I just got off the phone with an energy expert from Google (ph), and he said, listen, there's some good news and there's some bad news. The good
news is Europe's actually done very well in terms of filling up at storage facilities as a block on average, they've actually already reached the
target they set for November with storage facilities around 80 percent full when it comes to gas. And for some countries like Germany, which is the
biggest energy importer that actually above that, they're above the 80 percent threshold.
The bad news is in energy, you know, for Europe, they need more than they can actually store. So, according to the E.U., the E.U. normally in a usual
winter, would take about 25 percent to 30 percent of the gas consumed from storage, it continues to need other gas. So if it's not coming from Russia,
it may need more gas from Norway, the Netherlands, LNG from Qatar or the United States, or of course, energy from other alternative sources, whether
we're talking solar or wind or nuclear or even coal.
Speaking to these experts, they've said now for many, many months, the one thing Europe can do and it still has time to do it, to get itself through
winter, potentially without any Russian gas at all, is to reduce its consumption. The E.U. did agree last month to reduce its consumption by 15
percent between August and March next year, it was a voluntary agreement. If it can actually inter -- if it can actually implement that, that sort of
reduction, perhaps it will get through this winter even without Russian gas, although a lot does depend, Alison, on the weather and how milder
winter this will be.
KOSIK: Yes, and how much of, you know, customers are willing to cut back every so slightly, each one of them, which is certainly hard to gauge.
And then there's a new inflation reading, the Eurozone inflation hitting a new record high of 9.1 percent in August. Clearly this is making life
unaffordable, you know, from households to businesses.
STEWART: Yes, that's just it -- it's not just a squeezes on households or businesses, this is actually unaffordable for so many people, inflation as
another record. And we're seeing actually the energy price increase filtering through to other categories like food at this stage.
In terms of energy prices are now up 38 percent over the last 12 months for Europe. And different countries are trying to manage this in different
ways, whether it's Belgium with some power tax cuts to try and reduce energy bills for households and businesses or whether it's like in France,
which is introducing an energy cap.
The problem of course over those policies is it really does just push the cost back onto the state. And who pays the bill? Well, the taxpayers, so it
kind of socializes the cost of energy.
On Monday, the E.U. Commission president, Ursula von der Leyen, did hint that perhaps they will intervene in Europe's power price setting system,
which is really rather complicated but it wants to disconnect the impact of gas prices from the rest of energy, that will take time. So at this stage,
really, the big solution for households and businesses as well, is to reduce their consumption to try and get through this winter. Alison.
[09:05:19]
KOSIK: OK. Anna Stewart, thanks so much.
In Ukraine, a team from the International Atomic Energy Agency arriving in the city of Zaporizhzhia to inspect the nuclear power plant. Shelling
around the Russian occupied power station has sparked fears of a potential nuclear disaster. We just heard from the IAEA's Rafael Grossi at the plant
about the mission's goal to prevent a nuclear accident. Listen
OK, we're having trouble getting that sound bite on for you.
Let's go ahead and go to Melissa Bell, who's live for us in Kyiv with the details. Melissa?
MELISSA BELL, CNN CORRESPONDENT: Alison, the 14 man strong mission are on its way to Zaporizhzhia plant. What we expect is for that visit to take
place actually tomorrow morning. They've traveled to Zaporizhzhia itself today.
It was before he left, the head of the IAEA mission, Rafael Grossi spoke to journalists about his intention, telling them that he hoped to be able to
carry out the inspection but also to leave behind a permanent mission at the power plant. And that is something that Moscow in the shape of its
representative to the IAEA in Vienna has welcomed. And there had been some question about whether or not that would actually be possible.
So, there is some relief there, I think, that this Russian side accepts the idea. In terms of how long the visit of these inspectors will last, so
beyond the ones that will stay behind and the mission that will stay inside the plant, there's some question about how long it's going to go on. It's
to start tomorrow morning.
There had, as you mentioned a moment ago, been concerns about whether or not the team would actually make it to Zaporizhzhia plant. Yesterday at a
meeting with the Ukrainian president, we heard from President Zelenskyy who said that it was time the whole area were demilitarized because of those
fears that his advisors were talking about yesterday, the fears that Russian forces were using the base as a military base and making those
corridors that the IAEA inspectors would have used to get there inaccessible.
Now, there is more hope today that this will actually go ahead. As I said some question about how long the actual inspection would last, we've been
hearing from one of the leaders of the Russian backed administration in the region now that is -- in which the plant is now occupied by Russian forces.
And he was saying that he expected the inspection to last for a single day. Of course, it's a lot to get through. There are six nuclear reactors on
this site.
And hearing from Rafael Grossi before he left, he said he'd been hoping there -- to be there several days. So a number of questions exactly as to
how long this is going to last ahead of us, Alison, but more hope today than there was yesterday that it will actually go ahead.
KOSIK: Yes. And still a lot of questions as to how much the team can really get through if they only spend one day. We shall see how much time they
spend.
Let me ask you this, as fierce battles are being reported, as Ukraine tries to take back the Russian occupied Kherson Region, what can you tell us
about that?
BELL: Well, this is now day three of that counter offensive, Alison. Crucial, of course, to Ukrainian forces.
Now, they're not giving much access to journalists, either Western Ukrainian to those front lines, nonmilitary journalist that is civilian
journalists are not being allowed through no footage for the time being is provided. But they are speaking of their early success in recapturing some
of those villages around the Kherson Region.
Now, the reason this is as significant as it is, first of all, it's the first time really in six months beyond the initial setbacks of Russian
forces that there's any real hope on the side of the Ukrainians. We heard yesterday an interesting piece of news, which is that the American
administration in his last couple of military aid packages to Kyiv had actually targeted very specifically the kinds of equipment, military
hardware, it was given to the demands of Kyiv with a view to this particular counter offensive. So bits of equipment, artillery, for
instance, ammunitions, specifically targeted at this long planned and much anticipated counter offensive.
Of course, on the Russian side we're hearing more about the idea beyond the acknowledgement that it's happened, that it is for the time being not going
according to Ukraine's plan. But again, from the Ukrainian side, a real sense of hope that there have been some really successes and that some of
those Russian troops are on the right bank of the Dnieper around the city of Kherson itself have been on the back foot, Alison.
KOSIK: OK. CNN's Melissa Bell, thanks for all that great context.
Tributes have been paid to the last leader of the Soviet Union, Mikhail Gorbachev, who died at age 91. At home he was known for policies like
Glasnost and Perestroika meant to reform the Soviet government and the economy. And abroad, he engaged with U.S. and Western leaders, calling for
nuclear disarmament and bringing an end to the Cold War.
[09:10:21]
For more, let's bring in Fred Pleitgen, he joins us from Moscow. So, what's the reaction from Russia about this news?
FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I would say here in Russia, if you look at the Russian leadership, they certainly say
that Mikhail Gorbachev really was a larger than life of politicians, someone who had a huge role in the international stage. In fact, that's
what a condolence telegram by Vladimir Putin that's been made official, that's been published, that's what that says.
However, of course, there are also a lot of critical voices here in Russia. There's a lot of people who believe that with some of the policies that Mr.
Gorbachev conducted, namely of course, bring -- helping bring down the Iron Curtain, that Russia has position was weakened. And some of the
international security order that we see in Europe right now, you know, many people here in Russia aren't very happy with that.
It's quite interesting, because there was always a mixed relations between Mikhail Gorbachev and Vladimir Putin. Christiane Amanpour, she did an
interview with Mikhail Gorbachev in 2012. That was when Vladimir Putin came back into office after having been Prime Minister in Russia for four years.
And she asked whether Mikhail Gorbachev believed that Vladimir Putin was capable of doing fundamental reforms. Let's listen.
(BEGIN VIDEO CLIP)
CHRISTIANE AMANPOUR, CNN INTERNATIONAL HOST: Do you think that President Putin is committed to any kind of reform, and will the people's voice be
heard under his presidency?
MIKHAIL GORBACHEV, LAST SOVIET UNION PRESIDENT (through translator): I think it will be hard for him given his nature to do this. But there is no
other way for him but to move towards greater democracy in Russia, towards real democracy in Russia, because there is no other way for Russia to find
a way out of its dead end in which it is now.
(END VIDEO CLIP)
PLEITGEN: So as you can see there, somewhat of a critical voice there from Mikhail Gorbachev, that was again in 2012 when Vladimir Putin came back
into the presidency after having been prime minister for four years.
One of the things we do have to point out, though, is that Mikhail Gorbachev did support Vladimir Putin's policies on Crimea, the end -- on
Ukraine, the annexation of Crimea in 2014. And Mikhail Gorbachev also really put a lot of blame towards the west, as he put it for the
confrontational relations that Russia has had over the past couple of years with the Western bloc. So that's certainly something where it seemed as
though at least Mikhail Gorbachev from his position supported what Vladimir Putin was doing.
But if you look at Russia today, and you know, he is still someone who is viewed very critically by a lot of Russians, a lot of them feel that after
the collapse of the Soviet Union, which of course, he's the one who signed that off, basically, that Russia was essentially humiliated on the
international stage, that it was in decline militarily, economically, and of course, socially, as well. And that's certainly something that a lot of
people have not forgotten. A lot of people said that after the Soviet Union collapsed, they felt that their lives became a lot tougher than they were
before, Alison.
KOSIK: OK. Fred Pleitgen, thanks so much.
And these are the stories making headlines around the world. A blockbuster court filing from the U.S. Department of Justice says government documents
were likely concealed and removed from a storage area at Mar-a-Lago in an effort to obstruct the FBI's investigation at Donald Trump's residence.
You're looking here at a photo released by the DOJ of highly classified documents recovered from the search.
Kara Scannell is here with us in New York with the latest.
Kara, great to see you. So how does the DOJ lay out their evidence of obstruction?
KARA SCANNELL, CNN REPORTER: Good morning, Alison.
Well, I mean, in this kind of historic filing we've got from the Department of Justice, they say that they've recovered 320 classified documents from
Mar-a-Lago, that's where the former president now resides. And they say that when they went in and executed the search warrant three weeks ago,
they obtained twice as many classified documents than they had been given by Trump's team when they were subpoenaed. So, saying here that that is,
you know, obviously a significant increase in the number of classified documents from what the Trump team had voluntarily turned over.
And one of the reasons why they argued that they needed to have this search warrant is they said that there was likely concealed and removed documents
from the storage room in the basement at Mar-a-Lago. They say that they found three classified documents in the desk drawers in the office
belonging to the former president. This is clearly, you know, an issue that DOJ is saying that they believe that there were questions here as you can
show on those -- the screen before you, you can see that these are secret and top secret records. In fact, they said that some of the FBI agents and
the DOJ officials who already have security clearances needed to get additional clearances in order to review these records.
Now, all of this has come out because Trump's team wants to get a special master, an independent third person to review these materials for things
such as attorney client privilege or executive privilege. And what DOJ argues here is that there's no need for that, they've completed this review
already. They say that, in fact, these records do not belong to the former president, they are government property, so he doesn't have even standing
in this case to bring this. And they say that part of the issue that they have is they think that there could be significant harm to the government's
position here because they're already conducting both the DOJ and the Intel agencies a review of these classified materials to see if any proactive
steps need to be taken to protect sources and methods.
[09:15:34]
Trump will have until 8:00 p.m. tonight to respond to this filing, and then both sides will be in court tomorrow in West Palm Beach, Florida, will
argue before the judge. And she has indicated that she is leaning toward giving Trump this special master. However, she said that over the weekend
that was well before all of this additional material has now come into the public, Alison.
KOSIK: OK. Kara Scannell, thanks for all your great reporting.
In other headlines, Queen Elizabeth will not travel to London next week to appoint Britain's new prime minister. Instead, a ceremony will be held at
Balmoral, her country residents in Scotland. It's the first time in her seven decades on the throne that the Queen will have overseen a change in
leadership from anywhere other than Buckingham Palace.
A new airstrike has reportedly hit the northern Ethiopian region of Tigray. It comes just days after fighting resumed between Ethiopia's central
government and the Tigray People's Liberation front. They've blamed each other for the renewed conflict which is disrupting deliveries of food aid.
The U.N. says millions of people in the region desperately need the help. We get more details now from CNN's Larry Madowo.
(BEGIN VIDEO TAPE)
LARRY MADOWO, CNN INTERNATIONAL CORRESPONDENT (voice-over): Queuing at this makeshift aid center in northern Tigray has become a daily task for these
women in the town of Adwa. This video was captured in June and July for the Catholic missionary who runs the small aid distribution center says the
situation has become even more dire since then. The missionary says hundreds arrive daily as early as 3:00 a.m. children in tow, desperately
seeking any food aid.
But every day is the same, only small amounts of a porridge like drink are available here. The United Nations says the civil war in Ethiopia's
northern Tigray region has left more than 90 percent of the region in urgent need of assistance. In March, a fragile humanitarian truce between
Ethiopian troops and Tigrayan fighters finally allowed aids to start flowing in. But with little fuel to distribute supplies, the United Nations
says what has arrived still hasn't put translated into increased humanitarian assistance.
STEPHANE DUJARRIC, UNITED NATIONS SPOKEPERSON: Our colleagues are telling us that the humanitarian situation in northern Ethiopia continues to be
alarming.
MADOWO (voice-over): Much of the aid has been stuck in the capital of the Tigray region, Mekelle, far from the areas where it is needed the most. But
fighting flared again last week raising new concerns about aid distribution.
DUJARRIC: We of course renew our call on the parties to the conflict to immediately facilitate the resumption of rapid and unimpeded passage of
humanitarian workers and supplies into all of Northern Ethiopia in accordance with international humanitarian law.
MADOWO (voice-over): 138-year-old single mother of five told CNN that her kids are now weak and prone to illness without regular meals. Still, they
join this queue early hoping for whatever little nourishment they can get. On days there isn't enough they skip school to back door to door
(INAUDIBLE) why the greens.
The head of the World Health Organization who's also from Tigray called was playing out there the worst disaster on Earth.
TEDROS ADHANOM GHEBREYESUS, W.H.O. DIRECTOR GENERAL: I can tell you that the humanitarian crisis in Tigray is more than Ukraine without any
exaggeration. And I say these many months ago, maybe the reason is the color of the skin of the people in Tigray.
MADOWO: The Ethiopian government lashed out in response calling his comments unethical.
Larry Madowo, CNN.
(END VIDEO TAPE)
KOSIK: Coming up on First Move, from sky high inflation to Russia's war and investors have had a lot on their plates. I'll speak with president of the
New York Stock Exchange about a host of challenges ahead.
Plus, is it a bird, is it a plane? No. It's an electric flying taxi. We've got the latest player in the aerospace market helping to revolutionize
travel. Stay with us.
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[09:22:13]
KOSIK: Welcome back to First Move. I'm Alison Kosik.
U.S. futures are trading higher as we count down to the opening bell at the NYSE. Tech stocks looked like they were the strongest gainers in the
premarket. Tech is on the rise despite disappointing third quarter sales numbers from computer maker Hewlett Packard whose shares are set to fall 6
percent in the early going. Shares of SNAP are sinking too amid reports it will lay off 20 percent of its workforce.
The major U.S. averages are on track to close out August trading with steep losses, with the NASDAQ currently down around 4 percent for the month. That
said, U.S. stocks remain some 8 percent above their 52 week lows, which they hit in June.
The New York Stock Exchange is navigating a challenging 2022 as interest rate uncertainty rattles markets and IPO activity falls dramatically.
Despite the challenges, a surge in trading volumes has benefited the bottom line of the exchange as well as its parent company ICE. A new agreement
between American and Chinese officials could keep a number a big cap Chinese stocks listed on the NYSE as well.
Lynn Martin joins us now. She is the president of the New York Stock Exchange. And she joins us from the NYSE.
Welcome to the show. Glad you can take some time out today.
LYNN MARTIN, PRESIDENT NYSE: Thanks for having me, Alison.
KOSIK: So you have been in your position as the 68th president of the New York Stock Exchange, you've been in that slot less than a year.
Characterize --
MARTIN: Yes.
KOSIK: -- for us how it's been for you.
MARTIN: Well, it's been certainly an interesting time. And you know, if I think about the last eight and a half months that I've been in the seat,
I'm incredibly proud of the way our markets have functioned, the way our technology has functioned and really the way the conversation has continued
to evolve not just with our listed companies, but also with those companies that are looking to enter the public markets when the volatility comes down
in the markets.
KOSIK: Right.
MARTIN: Over this period of time, you know, as you highlighted in your opening remarks, we've seen tremendous volatility. And when I think about
the volatility, our job is the exchange is to ensure that our systems are performing at the highest levels possible, and adding transparency to the
markets. And I'm so proud of what we've been able to achieve over this period of time.
KOSIK: Lynn, I know a big part of your job is to convince private companies to list on the NYSE, but IPO activity this year is certainly shaping up to
be the worst year for IPO volumes in a really long time. But that's coming off a big boom for the IPO space, which 2021 was a record year. When do you
anticipate more listings coming? And I'm also curious to hear what you're hearing from companies themselves.
[09:25:01]
MARTIN: Yes.
KOSIK: What's holding them back?
MARTIN: Yes. And you know what the viewers actually see is, you know, when a company makes their public market debut. What they don't see is all of
the conversations that we have with those companies that are seeking to enter the public markets. And those conversations haven't really slowed
down.
The public market currency is stronger than ever. People want to come to the public markets. They see the value in being able to reward employees
and being able to use the currency that the deep liquid public markets provide to fund research and development, to fund M&A activity. So, those
conversations have absolutely continued.
So it's really a question of when not if private companies join the public markets. And I can tell you from a conversation that I'm having with CEOs
of private companies, that intent has never been stronger. They're just waiting for the right time.
KOSIK: U.S. and China, the U.S. and China reaching an agreement to share the audits of U.S. listed Chinese companies. So, it averted an outcome that
would have forced some of China's biggest companies to leave American exchanges, including the NYSE. U.S. officials are a little more skeptical
that China is going to follow through with the terms of this deal. I'm curious what your thoughts are on this.
MARTIN: You know, I think that's really the agreement that got announced on Friday. It's a really positive step for the global economy. You know, it
highlights the fact that the U.S. markets are the core of the global economy. We provide the most transparent markets, we provide the biggest
pool of investors, and we provide the security of investor protection.
So, I'm optimistic based on what we heard on Friday that we're going to find a path forward to allow those companies to remain listed in the U.S.
to gain access to the biggest pool of investors, and to balance that with the investor protections that are really the hallmark of our U.S. markets.
KOSIK: I want to ask you about a particularly tricky issue going on in New York City when it comes to crime because of these attacks that have
happened on the city subway system and as everybody kind of comes back to work after Labor Day. And there has been discontent in the business
community both in private and in public about the rise of crime in New York City. I'm curious what your feeling is on this, especially as many
financial firms once again are pushing their workers to return to offices after Labor Day.
MARTIN: You know, we see the value of in person collaboration, it's really what is some of the special sauce that continues to drive the New York
Stock Exchange forward with an entrepreneurial spirit after 230 years. And we do see more and more of our colleagues returning to the office.
I'm a New Yorker through and through, born and bred New Yorker, so I believe New York City. And I know we're in touch very regularly with the
mayor's office. And Mayor Adams has an action plan that he's enacting to keep us safe, to keep us moving forward with that strong New York City
spirit.
KOSIK: You got one minute, because I don't want that bell ringing and hiding what you have to say, it's going to ring right behind you. I want to
ask you about Friday, Serena Williams ringing the opening bell on behalf of her company, Serena Ventures. I know you had a visit with her as well. What
was that like?
MARTIN: It was amazing. I mean, Serena Williams, you know, arguably the greatest tennis player of all time. But the way that I think of Serena is
someone who has carried herself with strength and with grace. And I'm really excited to see what she does in her new chapter, particularly given
that her venture capital firm is focused on providing funding to those founders who may not traditionally get access to capital.
I don't think it's a mistake that because of her efforts already in the venture capital world, she has funded 16 unicorns as part of her mission --
of her new career. So, I'm incredibly excited to celebrate her new chapter. And that's really what Friday was about, celebrating her new chapter and
thanking her for carrying herself with such strength, such grace in the U.S. tennis world.
KOSIK: All right. About 40 seconds from the opening bell at the New York Stock Exchange. I don't wanted to cover anything you have to say because it
is loud. Thank you so much for your time. Lynn Martin, the president of the New York Stock Exchange, great talking with you.
MARTIN: Thanks for having me.
KOSIK: Still to come, Europe's energy crisis is deepening as Russia shuts down a major natural gas pipeline again. How this could impact supplies for
the winter after the break.
(COMMERCIAL BREAK)
[09:33:02]
ALISON KOSIK, CNN ANCHOR: Welcome back to First Move. I'm Alison Kosik. As we reported earlier in the show, Russia has halted natural gas supplies
through the Nord Stream 1 pipeline for three days, deepening an energy crisis that has sent inflation in Europe to a record high of 9%. In recent
months, Gazprom has slashed supplies through the pipeline to just 20% of normal capacity, sending prices for gas and electricity soaring and raising
concerns of shortages this winter. Germany is working to become less dependent on Russian energy, but regulators say reaching a target to have
gas storage 95% full by the beginning of November, that that could be challenging.
Joining me now is Henning Gloystein, Director of Energy, Climate and Resources at Eurasia Group. Thanks for being with us.
HENNING GLOYSTEIN, DIRECTOR OF ENERGY, CLIMATE AND RESOURCES AT EURASIA GROUP: Thank you.
KOSIK: So how much of an impact do you think is this latest shutdown of the Nord Stream 1 having on Europe's ability to refuel ahead of the winter
season, which typically begins in October? Will there be enough for the winter?
GLOYSTEIN: So if Nord Stream 1 remains off as scheduled at the moment for just a couple of days, then that should be OK. I mean, OK, it won't be
great. It's another disruption. It's another spanner in the wields to get to those 95% that Germany wants to get to by November 1. But the gym is
actually doing all right at the moment, the inventories are currently filled to about 85%. That is ahead of schedule. And so they are doing OK,
but every little outage at the moment, makes the target more difficult. And of course, filling storage sites will become more difficult quite soon,
because probably in around two to three weeks' time is when heating, demand starts kicking off. And then people will use consume more gas, which means
less will be available to be put in storage.
KOSIK: Yeah, meantime, as Europe is trying to store enough gas for the long winter. Russia is burning it and it's gas that presumably otherwise would
have, you know, been exported to Europe through the pipeline. What kind of statement do you think that Vladimir Putin is making by doing this?
[09:35:05]
GLOYSTEIN: So the flaring, burning the gas in Russia is probably a bit of a technical necessity. It's an awkward situation Russia is in as well,
because all the gas that the Russians are currently not sending to Europe originally was put into storage in Russia. Now, those inventories in Russia
are full as well. So in order to avoid reducing production in Russia as well, which would reduce the revenue, which would mean people have to be
sent home, they are flaring the gas that is associated with oil production instead of putting into storage or selling it. So it's a bit of an awkward
situation for Russia as well.
Cutting the gas supply to your right now what it does is it inflicts economic pain on Europe. But they are still sending some gas via other
pipelines to Europe, which means Gazprom is still making money via the high prices. And we saw today Gazprom has reported record profits. So for
Russia, this is an opportunity to still make money while actually inflicting economic pain on Europe. And that is probably Moscow's policy
here.
KOSIK: How much of a possibility do you think it is that Putin will really weaponize energy exports when the dead of winter comes in Europe? And he'll
just cut off gas supply for an extended period of time to Europe? Is he capable that?
GLOYSTEIN: Certainly he's capable of it, yes. Whether it'll happen, we'll see. Because the remaining gas that is still flowing from Russia to Europe
via Ukraine, interestingly, and also via Turkey, is actually reaching people in Europe. So governments in Europe where there's still some form of
support for Russia may not support but not outright hostility. So some of this gas is going to Hungary, which has been where the President Orban has
been very shy in criticizing Putin. And of course, it also serves Turkey still, and Turkey has not imposed any sanctions on Russia. So we don't
think at this stage, Russia will totally cut off all of Europe. But the fact that they're cutting Nord Stream 1 to Germany and Germany was prior to
the war, Russia's biggest single gas client is a sign that Russia is clearly willing to use gas as an economic weapon ahead of winter, and
probably also during next winter.
KOSIK: What energy alternatives as Europe have if natural gas prices spike even higher than where they are now? Or if supply runs low? Is it possible
to quickly pivot to other sources like nuclear, wind, solar, coal, or is just that's not easily done?
GLOYSTEIN: So most of these things are possible to a certain degree. So the Germans, the Dutch, and the Italians, for instance, are ramping up coal
fired power generation, so that you can replace gas power units. And that means that more gas is available for industry and to put into storage for
heating. Other countries are buying more, virtually everybody in Europe is buying more liquefied natural gas, including from the United States. So
that isn't an option. You can't just ramp up new nuclear power stations are short notice that doesn't work. Wind and solar, if it's windy and sunny,
that definitely works.
So everything helps on the margin, but the key thing will be to reduce consumption. And this is what every government in the E.U. is currently
telling consumers and industries like you must reduce your normal consumption probably about by about 15% to 20% against normal levels in
order to get through winter without severe forced rationing.
KOSIK: Do you think people will reduce their consumption I mean, it's voluntary?
GLOYSTEIN: It's voluntary in most countries, but the first mandatory restrictions on usage have come into place or are about to come into place,
for instance, cooling or heating, minimum maximum levels, banning advertisement after dark, light advertisement, so using light for
advertisements after dark. So this sort of stuff is coming. And of course, for all consumers, whether you're in Britain or in Germany or in Italy,
your retail, your tariffs are going literally going through the roof. So high prices are going to cut consumption almost certainly, but it's going
to be painful and probably at the cost of recession.
KOSIK: Henning Gloystein, Director of Energy, Climate and Resources at Eurasia Group thanks so much.
GLOYSTEIN: Thank you.
KOSIK: Coming up after the break we take to the skies and test flights by a British firm hoping for a slice of the flying taxi market. That's next.
(COMMERCIAL BREAK)
[09:41:40]
KOSIK: Welcome back to First Move. I'm Alison Kosik. U.S. markets are up and running on this last trading day of August. A mostly higher start to
the trading session with some weakness in the Dow. All this is investors get a fresh look at the health of the U.S. jobs market.
Just released numbers show the private sector adding a weaker than expected 132,000 jobs this month. The real test that comes Friday with the
government's August U.S. jobs report.
Meantime shares of Bed Bath and Beyond are plunging more than 20% in early trading. The struggling U.S. retailer whose stock is popular with momentum
investors says it will raise more cash through stock sales. The company also announcing a turnaround plan today that includes substantial layoffs,
and store closings. Let's get more now with Paul La Monica. He joins us now.
Paul, I guess investors, how are they feeling about this turnaround plan? Is it obvious with the stock tumbling over 20%?
PAUL R. LA MONICA, CNN BUSINESS DIGITAL CORRESPONDENT: Yeah, there's a lot going on here, Alison that we could digest. I mean, for one, it's never a
good sign to see a company that is not profitable and is closing as many stores as they plan to and laying off 20% of their workforce potentially.
That's clearly not great news. I think investors are probably also disheartened by the fact that Bed Bath and Beyond wants to raise more money
by selling new stock which would dilute the value of current shareholders and that's, you know, not insignificant for many of these meme investors on
Reddit that have been Bed Bath and Beyond higher in the hopes that it turned around was going to be real and spectacular to quote a Seinfeld
reference.
Obviously not happening and, you know, concerns as well about management because CEO Mark Tritton, who came in a few years ago from Target was a
much ballyhooed hire about how he would turn them around. He's gone and the company is still looking for a new CEO.
KOSIK: And, you know, what's interesting is investors they're still trading this stock wildly, it's a very heavily traded stock. So investors are busy
with it. But I mean, what's the longevity plan here for Bed Bath and Beyond? I mean, will this store survive?
LA MONICA: Yeah, that's a great question. I think a lot of people are wondering what Bed Bath and Beyond announced this morning, will that be
enough? Will they need to do more? Will they have to cut even more jobs, sell more clothes, more stores, and maybe even sell assets? Because Alison
one of the things that people were sort of expecting was maybe an announcement from Bed Bath and Beyond that they could spin off or sell a
stake in its buybuybaby unit in order to raise cash. But the company announced that after a strategic review, they feel that the Buybuybaby
brand still fits with the broader Bed Bath and Beyond footprint. So they are going to keep it and not make any potential changes to try and monetize
that asset.
And then there's also still all the drama about Ryan Cohen. Remember, he was the GameStop Chairman and Chewy co-founder made a big investment in the
stock and that led to a lot of hope and speculation among meme investors that he had a turnaround plan for the company. But then just a few weeks
ago, he sold his entire stake and that left a lot of investors wondering, what is Cohen seeing that we're not?
[09:45:05]
KOSIK: Yeah, well I think we just need to take a look with our glasses and see really what's going on here. Anyway, Paul La Monica, thanks so much for
breaking all that down.
In the race to get flying taxis into the sky, one British firm says it's ready to test flight this prototype. Vertical aerospace says it has the
biggest preorder book in the business with American Airlines, Virgin Atlantic and others lining up to buy this zero emissions fully electric
aircraft. The company says the five-seater vehicle which lands and takes off vertically is 100 times quieter than a helicopter. It has a top speed
of 202 miles an hour and a range of over 100 miles.
Stephen Fitzpatrick is the CEO of Vertical Aerospace. And he joins us now. Thanks for coming on the show.
STEPHEN FITZPATRICK, VERTICAL AEROSPACE CEO: Good morning, Alison.
KOSIK: Good morning. So I know that you've completed ground tests of the prototype, the VX4. So talk with us how on track you are with these test
flights and what sort of testing you actually need to carry out at this point?
FITZPATRICK: Yeah, so we just finished the build and the commissioning of our export prototype. And we're going to be starting our test flight
campaign in the coming weeks. Unlike a lot of other competitors, we are embarking on a fully crewed test flight program. So we these aircraft are
piloted so uses five seats. It's one pilot four passengers. And we're going to have a fully manned test flight program going up in the weeks to come.
So we're quite far down the development pathway. And I'm really excited to be taken to the skies.
KOSIK: So I understand that you say the VX4 is 100 times safer than a helicopter? How can you justify that without any actual flights though?
FITZPATRICK: So the standard that we are going to certify the aircraft to, we're working with the CAA in the U.K. ourselves (ph) but the equivalent of
the FAA, they require us to meet the same safety standards as an Airbus, Boeing, a conventional aircraft that you'll fly on. So normally, light
aircraft helicopters are certified at a safety rating 100 times less. And so to certify these aircraft at all, they have to be the same standard as
the safest aircraft in the skies.
KOSIK: And so where are you in the certification process, though?
FITZPATRICK: So we've been in working with the EASA/CAA for three years now, I think. We're working through certification with the battery systems,
the aircraft design, all of that. So we're probably three years away from entry into service. One of the things that makes these aircraft so safe is
having multiple battery systems, multiple rotors, and motors. So we've got a lot of what we call redundancy, making these aircraft inherently safe to
fly. And there's still a lot of work to do to prove that out with the regulator, but we're well on track.
KOSIK: OK, you have large preorder bookings with American Airlines and Virgin among your customers. But I'm wondering if they can back out of
these deals are these firm commitments by these partners?
FITZPATRICK: There's always some flexibility in aircraft order contracts is just the nature of the industry. But we were the first eVTOL manufacturer
to announce pre-delivery payments from American Airlines, they've actually put a down payment against the delivery for their first 50 aircraft. I
think they have orders and options to take them up to 350 VX4s, but they put the delivery slots for the first 50. So that's a really strong sign of
competence in the technology and the market that's to come.
KOSIK: How do you envision this whole thing up and running? You know, let's say, you know, I'm a passenger, and I need to get to the airport from my
office here in New York. How do I go ahead and fly in on one of these, walk me through A to Z?
FITZPATRICK: I mean, to begin with, anywhere that you can see a helicopter flying, you'll be able to see this eVTOL total aircraft flying. So it'll be
possible to book a flight from downtown Manhattan to JFK that the trip time is going to be like six, seven minutes. The cost is the thing that's really
exciting. At $1 per passenger mile, these electric aircraft operate at about a fifth of the price of conventional helicopters. So combined with a
much lower noise footprint, we think this is really going to democratize urban air travel, enabling 1000s and 1000s of passengers every day to use
the air taxis. And not just in cities like New York, but also all over the world. We have orders from Japan Airlines. We've got customers in Sao Paulo
in Brazil all over Europe. So we're going to be seeing these aircraft flying over cities all over the world and just a few years.
KOSIK: Very quick, just want to ask this because I know the skies right now are crowded with aircraft, how is this going to work even just in the New
York City area for instance crowded cities that have crowded airspace?
[09:50:13]
FITZPATRICK: Yeah, so working with air traffic management regulators in the U.S. and Europe, U.K., this is something we're definitely working on right
now. One of the benefits of these aircraft because they're piloted they do fit in with existing air traffic regulation. Over time, as we see more air
taxis in the sky, it's obvious that we're going to need to see some changes to that airspace regulation. But I think the thing that is going to come
between now and then is going to be an increase in things like cargo carrying drones, and automated aircraft. So there's a whole host of
improvements and upgrades that are coming to air traffic management systems. But I think the thing that I would want to point out, whilst this
technology is available today, and this --
KOSIK: Oh, we lost him there. I'll go ahead and post his interview on my Twitter if you missed any of it. That was Stephen Fitzpatrick, CEO of
Vertical Aerospace, our thanks to him. Coming up, a new push by a Wall Street bank to get employees back in the office. That's next.
(COMMERCIAL BREAK)
KOSIK: Welcome back. I'm Alison Kosik. Goldman Sachs lifting its COVID-19 protocols, saying employees can now return to most of its U.S. offices
regardless of their vaccination status. The bank has been pushing to get employees back to the office to go back to work. Rahel Solomon joins us
now.
Rahel, so what are employees saying about this? Are they really excited to start commuting again and come back to the office?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, the company would say I spoke to a company officials yesterday who said look, we had been back in
the office full time since last year. This is an evolution of that. But Goldman Sachs, one of the largest investment banks certainly on Wall
Street, somebody even saved the world a really welcoming back employees with open arms, regardless of vaccination, at most of its U.S. offices, not
the New York City global headquarters but at other locations from Atlanta to Boston to Tampa, and really across the coast, from coast to coast.
So the company is saying that regardless of vaccination status, whether you are vaccinated or not, you will no longer have to be required to wear face
coverings. And you will no longer have to participate in mandatory testing. The company's saying in an internal memo that I was able to obtain that
with many tools including vaccination, improved treatments and testing now available, there is significantly less risk of severe illness.
Look, the banks have been among the most aggressive to get workers back in seats, to get butts back in seats to get people back in the office. Whether
it's for morale, whether it's 14 building, Morgan Stanley also pushing to get people back in the office up front famously. JP Morgan the same. So we
have seen this push certainly from the big investment banks but it remains to be seen, Alison, how employees will feel about this. Because we know
that there is still really strong demand for workers.
[09:55:13]
We got some new data this week, jolts data that suggested there are still more than 11 million job openings right now more broadly, still about to
open jobs for every one person looking. So job seekers still have an advantage here. However, investment banking, of course up famously
competitive, famously lucrative. So we'll have to see if these policies that are coming down really enforcing that we want you back in the office
will be received well, all in all, when it's all said and done, Alison.
KOSIK: Yeah, we will see who really has the leverage now, now that the excuses have been taken off the table. Rahel Solomon, thanks so much.
And finally on First Move, a rare sight of a phantom. This is what's called a phantom galaxy, a spiral of solar systems 32 million light years from
Earth. NASA says the image was made from using data from both of its major space telescopes, Hubble and James Webb. Between them, they're giving
scientists a greater understanding of this galaxy and producing some pretty spectacular images of the cosmos. What do you think?
That's it for the show. I'm Alison Kosik. Follow me on Instagram and Twitter at Alison Kosik. Thanks for joining us. Connect the World is next.
I'll see you tomorrow.
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END
