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First Move with Julia Chatterley
Ex-PM Netanyahu Appears to be on Brink of Victory; Investors Await Fed Policy Decision Today; Maersk Pushes ahead with Renewable Energy Drive; Russia Rejoins Ukrainian Grain Export Deal; Perfect Corp Uses AI to sell Fashion, Beauty; Some Twitter Users have Balked at Verification Fee. Aired 9-10a ET
Aired November 02, 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]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: Welcome to "First Move", great to have you with us. For the next hour, as we ask the question will this be
the day "When Doves Cry" or "When Doves fly"? Investors will keep an eagle eye on Fed Chair Jay Powell's Press Conference later today.
Hoping to hear hints of change in the Central Bank's flight path, will Powell leave the door open for a future dovish policy pivot or will he
parrot his previous hardline on inflation? What Powell says beyond the jumbo and expected of course rate hike today will determine where markets
head from now on in.
JP Morgan say stocks could rally some 10 percent, if there is dovish language in the Fed statements. So what are they going to do in December,
that's the big question? For now, caution is the name of the game in the United States at least starts from choppier than chirpy start.
To November trading, new numbers show stronger than expected reads on U.S. job openings and on private payrolls. This clearly doesn't align with a
more forgiving Federal Reserve on rate hikes also highlighting the ongoing challenges. Economic Bellwether Maersk, warning today "Dark clouds on the
horizon" and signaling shipping cost peak.
We will speak to the CEO of shipping giant Maersk later on, in the program. In the meantime, Snap and Meta shareholders finally getting something to
grow about the two firms that got truly picked this earning season. Moving higher as an FCC official argues for a U.S. ban on rival TikTok citing
national security concerns centering on its Chinese ownership. As you can see both of them getting a boost, there a TikTok ban might help the Twitter
bird too.
Elon Musk has floated the idea of bringing back short form video service vine. Musk now, involved in a separate debate revolving around the number
eight. He says $8 is the right price to pay for getting a blue tick verification status on the site, emphasizing subscription cash over
advertisers and their reliance.
Especially if some of those big advertisers do take flight. We will discuss later in the show and we're going from blue check to the Fed on deck. And
Rahel Solomon joins us now.
Rahel, the Fed could ruffle some feathers today we're keeping those bird analogies going, but I'm done now. It's not really about what they do
today? It's what they say in about December.
RAHEL SOLOMON, CNN CORRESPONDENT: Absolutely, and I think that's what could ruffle the most feathers to keep the bird analogies going, Julia. So you're
right, I mean, 75 basis points, or three quarters of 1 percent is pretty much baked in the Fed. You could argue has sort of telegraphed that pretty
well, at this point.
The question is what they do next in that December meeting. December 13, is when that next meeting kicks off. And Julia, as you know, we have started
to get these comments from certain Fed officials like Mary Daly of the San Francisco Fed saying that at some point, it will be appropriate to consider
slowing rate hikes.
The question is, will that happen in this meeting? Would that start to happen in the next meeting? And so Investors are going to be clued into
every word when we hear from Fed Chairman Jay Powell at 230 Eastern about any signs of that pivot of any signs of that pullback and aggressive rate
hikes.
Of course, if we do in fact, see another three quarters of a percent, which we have not seen in modern history, it would be the fourth in a row. The
Fed has already hiked rates, about three percentage points in just the last seven months. And so this is pretty much baked in.
But to your point, Julia, the question is what is ahead? I think it was Bank of America who put out a note this morning or this week rather, that
said it's not about the destination at this point. It is about the journey, how high our rates going and how do we get there? So all eyes are on what's
ahead for sure.
CHATTERLEY: Yes and how quickly are they going to do? Will they make it five for five in terms of those and three quarters of a point rate hike.
Rahel, we shall see what they have to say today. Great to have you with us, thank you.
And here's well now and what could be a stunning political comeback for Benjamin Netanyahu early results suggest his Likud parties. And its allies
will get enough seats to take control of their Knesset putting Netanyahu on track to lead Israel's most right wing government ever. Hadas Gold is in
Jerusalem for us.
And has been following this story, according to the exit polls, and you can give us the latest. I mean, we're talking about his block having a better
majority in terms of number of seats than I think anyone expected Hadas.
HADAS GOLD, CNN CORRESPONDENT: Right, I mean, when we were looking at the opinion polls leading up to Election Day. The best polls that Netanyahu and
his allies were getting showed them at just barely reaching that 61 seats that they needed to form a majority in the Israeli parliament.
[09:05:00]
GOLD: But so far, the official results now not all of the results are in yet. But the official results that they've counted so far are showing them
having done even better than what those opinion polls showed with a 65 seat majorities. So they've got quite a cushion there.
Now, there are still about 10 percent of the votes left to be counted. These are the absentee ballots; it's about half a million votes. And I'm
sure there is always the possibility that could change the numbers.
But because Benjamin Netanyahu and his allies have that cushion, even if let's say one of these small parties does manage to pass the threshold, get
four seats in the parliament, four seats 65 minus four, and it's still 61. Benjamin Netanyahu would still potentially become Prime Minister. What's
really interesting about all this is the rise of the far right, because the far right joint party of religious Zionism and Jewish power.
They are set to have something like 14 seats in this Parliament that would make them the third largest party in the Israeli parliament. These are
figures who just until recently, were thought to be of the extreme fringe of Israeli politics, who a year ago. Benjamin Netanyahu himself was
essentially saying they wouldn't necessarily should have a place in an Israeli cabinet.
Now, it's not a question of will they have a place but what positions will they have? What kind of ministerial positions will these far right wing
figures have? Now Benjamin Netanyahu is celebrating he has not yet come out.
And done a full celebration because all of the votes are still being counted current Prime Minister, Caretaker Prime Minister Yair Lapid, has
not yet fully conceded. But here's what Netanyahu said late last night to his supporters. Take a listen.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, FORMER ISRAELI PRIME MINISTER: One thing is already clear our way the Likud's way has proven itself. I remind you that from 52
seats in the last election, we are now on the verge of a very big victory.
(END VIDEO CLIP)
GOLD: Now, this could be the most far right government in Israeli history. And that could be of great concern to Israel's allies like the United
States. As well as some of the newer allies like those of the Abraham accords like those the United Arab Emirates, because what will they say
when they have ministers in power, who have in the past have been convicted for inciting racism against Arabs. We'll wait to see exactly how this new
government will shake out, Julia?
CHATTERLEY: Yes, a stunning comeback for Benjamin Netanyahu. But to your point the far right fringe no more. Hadas Gold, thank you so much for that.
OK, let's head to China now, where a fresh COVID lockdown is in place a manufacturing zone that houses Apple supplier Foxconn plant now under a 7-
day lockdown. Social Media Video shows some of the workers fleeing the factory ahead of that measure.
Selina Wang, joins us now she is on, we believe day three of her 10-day quarantine in Beijing. Selina, great to have you with us! And two things
will be one the impact on workers that are now operating within this factory in a closed loop system. But the second thing, what does this mean
for exports of iPhones, smartphones from what the biggest manufacturing facility in the world?
SELINA WANG, CNN CORRESPONDENT: Yes, Julia, I mean, this has the potential to seriously curtail the movement of key things in and out of the biggest
iPhone factory in the world. This 7-day lock down is in the area that houses Foxconn's Zhengzhou iPhone plant. This is the biggest iPhone
assembly factory in China.
The local government said that for the seven days during this lockdown period. They're banning people and vehicles from the streets except for
essential reasons. This potentially means that you're going to be cutting off the flow of key workers and components that they need during this
critical period which is just ahead of that holiday season.
And this as we've been discussing is just the latest disruption to Foxconn. In recent days, there have been workers according to these viral videos
fleeing the campus in mass walking by foot many, many miles across highway some videos even showing the tracking through farm fields in order to
escape these increasing COVID restrictions that they put in place to try and clamp down on this COVID flare up on the campus.
So we don't know how many COVID cases have actually been reported. Now that means that again, this could have a big impact on Apple because this
assembly factory. It accounts for as much as 85 percent of iPhone assembly capacity. And counterpoint research has estimated that it could impact 10
to 30 percent of the Apple iPhone 14.
Jeopardizing that production in the near term if this situation doesn't stabilize now another interesting point about why some of these workers are
fleeing, Julia, is because also not just the concern about subpar living conditions that have been reported, as well as subpar food that they've
been given amid these COVID restrictions but also general fear among these workers, about getting COVID.
[09:10:00]
WANG: And we've spoken to a virologist at the University of Hong Kong, who has said that China's Government's demonization of COVID the exaggeration
of the severity of the virus has meant that ordinary people are scared of getting COVID. And we are seeing these people not just scared about the
environment they have to live in, in the quarantine bubble, but also the fear of the virus spreading.
So serious impact on businesses, not just like Apple, but we've seen other global manufacturers throughout these three years of zero COVID in China
have to deal with serious disruptions to their business because of China's continued adherence to zero COVID, Julia.
CHATTERLEY: Yes, it's a fascinating point not just about the measures though, now also the fear of actually catching the illness and potentially
how sick you get. Selina as I mentioned, day three your shop froze because we had internet issues yesterday. I was going to ask you, because I
remember the last time you had this and we were talking about your chocolate supplies. Do you have enough chocolate supplies to last the next
seven and a half days?
WANG: You know, I learned from my last experience. I have a lot of chocolate supplies a lot of granola bars. Last time it was 21-day, so this
time 10 day seems like a dream. So I'm like I can put up with anything if it's just 10 day.
CHATTERLEY: Double those chocolate rations. Selina, thank you, thank you for that! OK, now just to be clear on actually what we were discussing
there, it is interesting to see a seeming disconnect between what we're seeing in terms of intensifying COVID lockdowns and the action this week in
Asian stock markets.
Just take a look at this and admittedly, we're talking about bounces from multi year lows. But Hong Kong stocks rallying 2 percent in Wednesday
session after Tuesday's monster 5 percent move higher, Shanghai also higher too. This is amid continued speculation at least on social media that
Beijing might soon form a committee to reassess zero COVID policies with the possible easing of restrictions around the corner.
China's Foreign Ministry however, saying "Not aware of any policy change". But interesting to watch what we're seeing, at least as far as investor
action is concerned. Now in the meantime, tensions are rising on the Korean peninsula after both North and South Korea treated a volley of missiles.
South Korean officials say the North fired at least 23 missiles earlier Wednesday and around 100 artillery shots. Seoul responded with three air to
surface missiles of its own, all of the missiles landed in international waters. This latest provocation comes though as the United States conducts
joint military drills with South Korea. Now Will Ripley is insolvencies, it's unusual for South Korea to respond in this manner.
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: It used to be pretty rare that South Korea would respond militarily because the previous
President, President Yoon was all about making peace. This new President, President Yoon is a very hawkish when it comes to North Korea. And so with
the United States, they have been very quickly responding.
And so they fired three air to surface missiles and a precision bombing exercise. And those missiles actually hit close to North Korean territorial
waters. So it's really a tit for tat escalation here.
And this is all on the heels of the Atomic Energy Agency Head warning just last week about this nuclear test coming up. The two Defense Chiefs from
the South Korea and the U.S. will be meeting at the Pentagon tomorrow and they certainly have a lot to talk about.
CHATTERLEY: And staying in South Korea investigators has raided a Police station in Seoul. And seven other offices as they look for answers over the
weekend, deadly crowd crush. Officials say they took documents about emergency calls and internal reports.
More than 150 people were killed in a massive crowd surge during a Halloween celebration on Saturday. Record show Police were warned, hours
before the tragedy about a potentially dangerous situation. OK, we're going to take a break here on "First Move".
But straight ahead dark clouds on the horizon and start warning from economic bellwethers shipping giant Maersk plus, a perfect path to going
public. We speak to the Taiwanese Tech Founder, that's helping some of the world's biggest beauty brands. That's all coming up, stay with us.
(COMMERCIAL BREAK)
[09:15:00]
CHATTERLEY: Welcome back to "First Move"! And on Wall Street muted action pre market as Investors await the big action from the Federal Reserve later
today Jerome Powell and company set to announce another three quarters of a percentage point rate hike which would take borrowing costs to their
highest levels since 2008. It's another big day too for corporate earnings, Investors paying particular attention to concerns over slowing consumer and
business demand.
Amazon's weak consumer outlook continues to weigh on its share price too. The online retail giant falling 5.5 percent in Tuesday's session, it's 5th-
straight session drop Amazon now trading at levels not seen since the start of the 2020 lockdowns its market cap also below $1 trillion.
And warnings two from one of the barometers of global trade shipping giant Maersk fears there are, "Dark clouds on the horizon". Citing a looming
global recession, high inflation and the energy crisis brought on by the Ukraine war. While the company reported total earnings of more than $10
billion in the last quarter.
It does believe demand has now peaked. Or this comes as Maersk increases its focus on renewable energy and offshore wind, saying there's no choice
but to invest in green initiatives. For more let's speak to Maersk CEO Soren Skou, who's in Copenhagen and joins us now.
Skou, always fantastic to have you with us! It was a strong quarter, let's be clear, but all the focus is honed on your concerns about what the
outlook is. And of course, the challenges that clearly remain.
SOREN SKOU, CEO OF MAERSK: Yes, clearly a very, very strong, the strongest photo ever actually. But also clearly a quarter where we see demand
dropping our volumes in our main business, ocean shipping was down 7.5 percent. So, clearly a sign that the consumer is not spending as much money
as he or she has done in the last few years and probably also a sign that many of our customers have too much inventory.
CHATTERLEY: You were already saying last quarter when we spoke that you expected a slowdown in shipping container demand if we stick with the
oceans part of the business. I know globally now you're seeing a contraction of 2 to 4 percent in 2022, which I think is also caught people
perhaps a little off guard today too. Can you break it down to in more detail on what you were saying there? How much of this is some of the sort
of bottlenecks that we've been talking about now for numerous quarters, easing further versus a pointed drop in consumer demand?
SKOU: I think we see a couple of things play. The first one is that during the pandemic and this we have also talked about on the show. A lot of us
spent money on goods because we couldn't spend it on traveling or going to a restaurant and so on.
And then I think particular for those of our customers that are durable goods, selling durable goods, they see that they sold a lot in 20 or 21 of
TVs and couches and barbecues. And obviously once you buy that you probably don't have that demand again for another few years. So, we see that durable
goods clearly being down.
[09:20:00]
SKOU: But also the general consumption is weighed down by very, very negative sentiments, certainly in Europe where I am right now we have a war
on our doorstep. And also an energy crisis to the point that many people fear whether they can pay for the energy build, the heating bill or the
electricity bill this winter. That's clearly weighing down on consumption, we're seeing a little bit of the same in the U.S. So, both less demand, but
also probably that we took pre-pone, some of the demand to 2021.
CHATTERLEY: Let's hone in on Europe, just briefly, because again, this is a conversation that we were having last month, and you were already at sorry,
last quarter. And you were already saying stockpiles are building up imports, you can see it warehouses are filling up. Are we in your mind
based on what you've seen in the past in cyclical terms to talking about recession?
SKOU: Yes, I've got a macroeconomic economist. But I would be surprised if Europe is not in recession by now. And so I think a chance that it will
also see that in the U.S. sometime next year. I do have to say, though, that while all of this is impacting our shipping business, our ocean
business, we're still growing a lot in logistics.
I mean, we grew 60 percent in this quarter compared to the same quarter last year 26 percent of that was organic. So, we see plenty of, if you will
growth potential in our industry, as our customers are still busy reconfiguring global supply chains after the pandemic.
CHATTERLEY: And where specifically, where do you see investment opportunity, as you look around the world? And where are you willing to
invest? I think based on the challenges that we've already mentioned, because to your point, you have had numerous incredible high performance
quarters and have cash available to spend.
SKOU: Yes, so clearly, online businesses, so fulfillment are an area of investment for us. In general, contractor logistics, so warehousing. But
also, when it comes to supply chain management, which is more of a check play in fall for us in our business, we see plenty of growth opportunities.
People are reconfiguring supply chains, they're moving to several or more suppliers, more geographically spread, that fragments, the supply chains
makes it more complicated, that's an opportunity for us. Our customers are also increasingly you know, having an Omni channel logistics strategies.
They need to be able to, if you will fulfill or deliver goods both to physical stores, and to the consumer store.
That's another complication in the global supply chain that we can help with. And then many of our customers really see how they're looking to see
if they can outsource part of the management of their supply chain. So these are really the areas where we are investing in terms of our logistics
business. And we could expect will continue to grow more than 10 percent organically every year, irrespective of what the global market is doing.
CHATTERLEY: Yes, and that's where your breath and your geographical footprint really comes into play as well. Last month, he wrote an op-ed in
the Financial Times and I loved it. You were talking about creating an environment where we see the equivalent of a space race, but for green
investment and green technologies, and particularly a focus on renewables. And you pointed out that the United States in the inflation Reduction Act,
necessarily called that for political reasons perhaps.
But actually, the focus really was on renewable investment and green technology investment in you. You said they've thrown the gauntlet down,
now for other parts of the world to really focus on investment. Talk me through what you're seeing?
SKOU: Well, clearly the other than the name of the reduction inflation --, then the rest is really impressive. Or the contents are really impressive.
The U.S. is really going from a position of a little bit of a laggard to actually be out in front in terms of thinking about how to do a green
transition.
It's really important. It half's the cost for producing green hydrogen, half's the cost of wind, and solar in the U.S., it's super significant. And
I wrote this op-ed not so much to the U.S. audience, but most of the European audience saying hey, you guys, you think that European, we're way
ahead here.
But look at what the Americans that and for us, for most cases, truly important because our climate transition is about going to green fuels,
that will be produced with a starting point of renewable energy. And therefore we really clearly want to see people invest in a new energy
system so that we can run out ships without emitting CO2 in the future.
CHATTERLEY: Yes, I mean it has to be about public-private partnerships as well. No one is going to do it alone, no matter how much the private sector
forces it or governments talk about it. This has to be in partnership.
I know you're heading to Egypt as well. And there is going to be a focus on reducing the carbon footprint of the shipping industry in particular. And
how confident are you that we get concrete action and concrete focus, I think, from governments around the world to your point?
SKOU: I do think that there are lots of things going on. Clearly, it was an important step in the U.S. Many countries, Egypt, being one of them,
actually see this energy transition as a huge opportunity of creating new industries. So they, of course, very interested in that.
On our side, you know, we have figured out what our technical pathway to decarbonize our ships is. But equally important, we're also seeing customer
demand for carbon neutral solutions. This past quarter, we reached basically 3 percent of our volumes that we ship on the ocean are being
shipped now on carbon neutral fuels on using biodiesel.
For that this is come out of nowhere and we continue to see increasing demand for solutions. Most of our customers, our large customers, they have
set their own targets for becoming carbon neutral. And they need to be able to buy products that help them to do that.
CHATTERLEY: Yes, and they're turning around to you and saying, hey, you've got to help us achieve those targets. So we need to be focusing on green
fuel. Yes, it should be self-reinforcing. Skou, always great to chat to you, thank you so much, the CEO of Maersk and congrats on a good quarter
challenges ahead.
OK, while we're talking climate join us on Thursday for our second annual quarter Earth Day 24-hour global day of action to raise awareness of
environmental issues and to engage with conservation education. And you can follow along online so special page cnn.com/calltoearthday more to come
after this.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move"! And new developments this morning Russia is rejoining a UN brokered deal, the guarantee safe passage for
Ukrainian green exports in the Black Sea. This comes just days after Moscow pulled out of the agreement blaming Ukraine for a drone attack on its ships
off the coast of annexed Crimea.
Wheat and corn prices are falling following that announcement. As you can see, on the screen there, the United States Ambassador to the United
Nations, Linda Thomas-Greenfield, gave her reaction on CNN this morning.
(BEGIN VIDEO CLIP)
LINDA THOMAS-GREENFIELD, U.S. AMBASSADOR TO THE U.N.: And I was delighted to hear this news and I want to first commend the UN the Secretary General
in particular, for continuing to negotiate this important deal, because it's providing needed food to the world.
So clearly, Russia was finally convinced that they needed to continue this, they can't stand in the way of feeding the entire world. 66 million tons of
grains have been shipped from the Black Sea since this deal started.
And the vast majority of that is going to poor countries in need of wheat. World Food Program, for example gets about 50 percent of the wheat that it
uses for humanitarian assistance from Ukraine and Russia.
(END VIDEO CLIP)
CHATTERLEY: Ukraine's grain exports are down more than 30 percent so far this year from a year ago that according to data from the country's
Agriculture Ministry. And joining us now is Markian Dmytrasevych, Ukraine's Deputy Minister of Agrarian Policy, and Food. Deputy Minister, thank you
for joining us on the show today! The decision by Russia to rejoin this deal must be a huge relief in Ukraine too?
MARKIAN DMYTRASEVYCH, UKRAINIAN DEPUTY MINISTER OF AGRICULTURE POLICY & FOOD: Yes, it is very important for Ukraine to make this grain corridor
stable and operational and to continue to be working. But nevertheless, this latest statements of Russia had some impact on insurance companies,
you may be aware of that a few insurance companies are not providing insurance for vessels and cargoes after the statement of Russia.
CHATTERLEY: Deputy Ministers just to be clear, you're saying that the insurers that were providing insurance to these ships and the cruise to
carry this grain are still saying that they won't provide insurance despite the fact that Russia is saying it's back involved with this deal.
DMYTRASEVYCH: Not exactly that statement from insurance company about made after the statements of exiting Russia from this agreement, but in - at the
moment, we expect to be as this insurance provided to continue to be provided.
CHATTERLEY: OK. So they'll come back now that they believe that that Russia is back on board. Do you expect them to charge more perhaps?
DMYTRASEVYCH: We don't - we don't want this situation to happen because logistics prices for our farmers in Ukraine are already pretty high in
comparison with the period before 21st of February.
CHATTERLEY: I'll talk about that in a moment. Something else that the Russian Defense Ministry said today was that they'd been provided with
sufficient guarantees. Can I ask if you have any understanding or knowledge of what those guarantees to Russia are?
DMYTRASEVYCH: Unfortunately, I have no details and I cannot provide you. But I can say that we were completely in line with grain initiative
agreement we - obligations on the Ukraine were completed?
CHATTERLEY: Can I ask you? I understand that you may not have information on this, how confident you are that the existing deal can be extended
beyond the middle of November when it was set to expire anyway? Can it be extended in light of recent challenges?
DMYTRASEVYCH: We expect this agreement to be continued because it's stipulated in the agreement that it continues automatically for the next
period.
CHATTERLEY: Well, that would be good news certainly for many countries around the world including in Ukraine and Russia of course that has its own
grain to export.
[09:35:00]
CHATTERLEY: Can I just confirm the statistic that I mentioned when I introduced you that exports from Ukraine are down just over 30 percent this
year compared to last year?
DMYTRASEVYCH: Yes, that's right, because you understand the situation after 24th of February, for example, in March we exported about 300,000 tonnes in
comparison with previous year when we exported 5 or 6 million tonnes per month.
CHATTERLEY: I think the fears though, initially were that actually exports might be a lot lower. So it's incredible, actually, that your farmers and
the ship providers and the exporters have managed to do so much. Part of the challenge was that farmers didn't know what they'd be able to export.
So prices in Ukraine fell, which is a concern for farmers deciding how and when to plant if they could. And obviously, the costs of doing that,
through things like energy prices got higher. So the government and yourself had to provide more money to the farmers to support them. Where
are we today in terms of the challenges of planting and the gap, the financial gap and being able to do so?
DMYTRASEVYCH: Partially this problem of lack of working capital was solved by soft loans from our Ukrainian banks under the governmental guarantees.
So our farmers had enough funds for this year sowing and harvesting campaign. But obviously, high prices for fuel, fertilizers and for seeds.
They have negative impact on other farmers, and we already considered reduction of soil areas for winter crops for about 30 percent to 40
percent.
CHATTERLEY: Wow!
DMYTRASEVYCH: Unfortunately.
CHATTERLEY: Wow! So for next year, we're saying that the crops even if everything go well, they're going to be down 30 percent to 40 percent?
DMYTRASEVYCH: I talked about this year's winter crops campaign.
CHATTERLEY: Right.
DMYTRASEVYCH: It's an ongoing campaign. If we talk about next year spring sowing campaign, we expect deduction of sowing areas for additional 20
percent minus in comparison with this year, and in 2022, we had deduction of sowing areas in spring, sowing campaign, also for 20 percent. So this
situation is not very good and stable in terms of global food security.
CHATTERLEY: No it's not at all. Quite frightening, to be honest, I think is the word I'd use. Deputy Minister, thank you so much for your time today.
Thank you for the work that you're doing and we appreciate you joining us today Ukraine's Deputy Minister of Agrarian Policy and Food.
DMYTRASEVYCH: Thank you.
CHATTERLEY: OK, after the break, a virtual reality check through those sharp testers in the burn up next, the Founder of Perfect Corp, the brand
that's redefining try before you buy in beauty and beyond.
(COMMERCIAL BREAK)
[09:40:00]
CHATTERLEY: Welcome back to "First Move"! And it's a U.S. Federal Reserve releasing its interest rate decision in a little over four hours from now
with a Jay Powell presser coming soon after. And as we've discussed, the three quarters of a percent hike in borrowing costs is a virtual certainty.
Lots of hopes too for some kind of Fed policy pivot in the Fed's messaging. But new numbers out today show U.S. private payrolls rising by a higher
than expected amount last month, the U.S. labor market clearly not slowing as much as the Fed might like and that will only make its inflation fight
harder.
All this as political pressure builds on the Federal Reserve too. Democratic Senators sending a letter to Jay Powell on Monday warning that
these raising rates at a "Alarming pace" who ever said that the Federal Reserve's job was easy no one right now.
Now as we await the Federal Reserve's action and decision U.S. stocks as you can see opening lower. Today's Central Bank decision is crucial for
direction if nothing else, Powell truly needs to be perfect in his messaging.
And speaking of perfect, could this be the perfect IPO? Well, for the beauty and fashion industry and their consumers it might just be. Ringing
the opening bell at the New York Stock Exchange this week the Founder and CEO of Tech Unicorn Perfect Corp Alice Chang.
Perfect raised $190 million in the now challenged reverse merger or SPAC Special Purpose Acquisition Company Space. The firm says it utilizes
artificial intelligence and augmented reality to help big brands like Estee Lauder, Clinique, Meta and Google provide 3D facial modeling diagnostics
and product testing.
Perfect also owns "You can make up" an app for virtual testing of makeup, skincare and hairstyles and provides product recommendations too. And I'm
pleased to say Alice Chang is the Founder and CEO and joins us now.
Alice, fantastic to have you with us on the show! I have to say it's a tough time I think broadly to go public, it's perhaps a tough way of going
public and it's also a huge moment for you and the brand. How does this moment feel first and foremost?
ALICE CHANG, FOUNDER & CEO, PERFECT CORP: This is incredible and significant moment for a great milestone for Perfect Corp. After seven
years, we started in 2015. And you know how up and down the market is the duration of the market is? We are so comforting to know our business model
is so viable, very robust. Other beauty brands can leverage our AIAR technologies to improve their user retention rates to engagement and also
decrease their operating costs.
So this is a market up and down and IPO can let us get access to the public capital markets give us more opportunity to accelerate our business
globally and also increase our research in R&D in AIAR. We will heavily - we can note there to increase more AI and AR since this is just the
beginning, using AIAR to help the beauty and the fashion and more. All the virtual tie arm or the personal recommendation I believe this is the future
for all the AR commerce.
CHATTERLEY: I feel like the pandemic was perhaps your moment because traditionally, whether it's luxury goods like watches, make up for example,
you wanted to physically try something. The pandemic became a moment where suddenly combined with the kind of technology that you're talking about you
can do all of these things online.
You can have a picture of yourself you can see what you look like with pink hair or wearing a new watch.
[09:45:00]
CHATTERLEY: And I think that's, for me, at least what these big brands see in your potential, it's about not necessarily having to be physically
present but to try a whole range of products. In terms of the financials of your business, is it those client relationships and providing the software
that is the sort of financial underpinning versus consumers going on an app and sort of playing for themselves? What's the balance right now?
CHANG: Yes. You know, the shoppers, beauty shoppers, fashion shoppers are everywhere now. They don't just go to the store. They go to brand.com and
retailer.com. They watch your video like YouTube, they search, they chat, on Snapchat.
So we create a platform for all the beauty shoppers, beauty lovers can take the virtual trial anytime, anyplace. So there's no limitation for the brand
to reach out to their customer. Exactly the customer can try - the shoppers can try on their own face on their own hands before they decide to buy or
not.
This is the first time because using AIAR, then the user they don't need to go to the shop to try. They can try before they buy. And I believe that
more trial, more sales, for consumer more trial more buys because they know if that product - the color fits their own face, or if this watch cannot be
good on their own hands?
CHATTERLEY: So you can - you can buy online potentially without actually having to be in store to try it. But are you profitable? I know you're in a
growth phase. But is the business profitable?
CHANG: Yes. The adjusted EBITDA is positive. So we keep on growing and this is to the enterprise and then we are trying to expand. And this is more to
beauty and the fashion of bitten sight. And also, and the end user may try on the app may try on the web may try in the store even go to the store.
You can free trial. Yes, the adjusted EBITDA right now is already positive. So this is quite good to have a growth of the revenue and also positive
adjusted EBITDA.
CHATTERLEY: Yes, I think it's important for investors to know that at this moment. I think the other thing that we should mention is that the company
was founded born in Taiwan, it's a huge moment for Taiwan too to have created a unicorn not only for you and to have now seen you, you go public.
I think there's a huge growth opportunity in Asia, you've mentioned that. There's clearly a growth opportunity in China too, should you choose it?
It's also a difficult time in terms of the geopolitics. How do you navigate that as a business leader at this moment, at a time of - well, I think
everyone in the world is looking at Taiwan, and I'm wondering what happens next? How do you navigate that?
CHANG: Yes, for political situation that we are embracing it. And at the same time, you can know Taiwan is the best place to have our R&D, R&D
Headquarter in Taiwan, we got a lot of talented engineers, not only in semiconductor, but also software.
And we have, like 12 cities around the world to meet overall beauty and fashion brands that's our business from this global business but all the
engineers can develop the best cutting edge technology AIAR technology from Taipei from Taiwan. So I think it's a very good combination of doing a
heavy development in Taiwan, Taipei and then doing the global business everywhere. Everywhere like I'm in New York City now. Last week in Tokyo -
beauty--
CHATTERLEY: Yes, I was going to say I tell you what, you're a great ambassador for Taiwan, and in particular, the tech space, as you said, it's
not just about semiconductors there are other technologies being developed there too, Alice, we have to leave it there but congratulations. Great to
have you on the show and I look forward to tracking your progress. Alice Chang, there Founder and CEO of Perfect Corp great to have you with us!
OK, coming up Elon Musk's figure of eight. Twitter's new owner saying $8 is great for a blue tick rate some users though remain a little irate that's
next.
(COMMERCIAL BREAK)
[09:50:00]
CHATTERLEY: Welcome back to "First Move"! Elon Musk's critical revenue seeking mission for Twitter is already running into some slight resistance.
Users are seeing red over his plans to charge a monthly fee for blue verification status. Musk acknowledging the fast saying in a Tweet "To all
the complainers please continue complaining, but it will cost $8".
There was a fun reference to Monty Python in that tweet as well. All this is as Musk says suspended accounts from figures like Donald Trump won't be
reinstated immediately. And Paul R LA Monica joins us now. For everyone who didn't see that tweet he references a Monty Python Skit, which everyone
should watch, because it's really funny. Paul, are you going to pay the $8?
PAUL R. LA. MONICA, CNN BUSINESS DIGITAL CORRESPONDENT: I am not going to pay the $8 to be honest. I don't think that the blue checkmark is worth it
or for my money to be honest. But you know it'll be interesting to see Julia, whether or not there are corporations that will pay for their
employees to keep the blue checkmark.
I just wonder in an environment that we're in right now where there are all these concerns about people cutting streaming subscriptions because of
recession worries. Is Musk miscalculating the demand for the blue checkmark will people really pay at the same time that they are scrapping Netflix and
Disney Plus and even Warner Brothers Discovery on HBO Max and other streaming services? Maybe Musk isn't really reading the room, so to speak.
CHATTERLEY: So this is why or just one of the reasons actually why I love your brain because I went the same route. And I was doing a mental
calculation in my head actually how much time and I have a whole host of subscriptions that I actually spend watching streaming services versus how
much time I get information, listen to what's being done, read on Twitter?
And I made the mental calculation that actually I would pay it and I will pay it and I think he's perhaps he is doing that too sound interesting.
It's interesting that you said you wouldn't. But that doesn't stop the wringing?
Paul do you think this is a viable way to monetize for me the critical juncture here? And he's already hit upon it is to remove the bots. I'm not
saying you clean up the content and people can be verified if they pay and they still could put fake information or misinformation on the internet?
But even just establishing that everybody who uses this is real and if the blue tick assessment and paying does that perhaps is that not one benefit?
MONICA: Yes, I think you are correct Julia that clearly Twitter under Elon Musk just like Twitter before Musk owned it had a problem with content
moderation and that is why they will need and it looks like Musk has suggested there will be a Content Moderation Board that is going to take
several months to make some decisions about people, including some with blue checkmarks, most notably Former President Donald Trump, who have been
kicked off the platform.
[09:55:00]
MONICA: And I think that just because someone gets verified, that doesn't mean that they have to follow that. They have to follow all the right rules
for moderation of content.
CHATTERLEY: Yes, I do have to say, though, and just being on social media, you get abuse you do because people are like that. I would actually love to
know if I'm being abused by a real person versus a bot because then I would be less hurt. So just making sure that everyone who's using it--
MONICA: A person created the bot, it's still hurtful.
CHATTERLEY: Yes, you're right that's true. Yes. In which case, I'll just shut up. Paul R LA Monica thank you so much. I rarely do that. Paul R LA
Monica, thank you! And that's it for the show. If you've missed any of our interviews today, they will be on my Twitter and Instagram pages search for
@jchatterleycnn. In the meantime, "Connect the World" with Becky Anderson is up next, and I'll see you tomorrow.
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[10:00:00]
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