Congress Says Boeing Management Failings Led to 346 Preventable Deaths in MAX Jet Crashes; Snowflake Starts a Bumper Month for Tech Listings; Instagram Interrupted, Stars Saying Enough to Hate and Misinformation.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I am Julia Chatterley. This is FIRST MOVE and here is your need to know. Boeing blamed. Congress says management failings led to 346 preventable deaths in MAX jet crashes. IPO blizzard. Snowflake starts a bumper month for tech listings. And Instagram interrupted. The stars saying enough to hate and misinformation. It's Wednesday. Let's make a move. Welcome once again, and as always, to FIRST MOVE, great to be with you. Lots of news and analysis coming up, as always, including an apparent calendar confusion on Wall Street. We've got a Snowflake in September. Yes, I mean, Cloud software firm, Snowflake beginning trading on the New York Stock Exchange today. The most expensive U.S. software listing ever in fact, priced at $120.00 a share. All the details and analysis on that valuation coming right up. It's one of a dozen IPOs in the United States this week alone. That's the most since 2014. Is it a sign of pent-up demand or a whiff of irrational exuberance perhaps, too? You decide. We will discuss. Timing is key, too. It looks to be a positive start once again. Our early September swoon seemingly behind us. At least for now, stocks aren't the economy, of course, and the challenges remain. Data this hour showing U.S. retail sales rising by a weaker than expected 0.6 percent last month. The July numbers were revised lower, too. It's a marked slowdown from the gains that we saw in May and June. They, of course, reduced by financial aid, including the enhanced jobless benefits that have subsequently expired. Something I think that the Federal Reserve will no doubt note in their presser today. That global stimulus, too, contributing to the OEC's raised outlook for global growth, it now sees a 2020 contraction of 4.5 percent. It sounds pretty lousy, but the numbers did look a lot worse just a few short months ago. Many emerging market nations they say will continue to struggle, exporting nations, too. Just think of Japan. Japanese exports tumbling almost 15 percent year-on-year; imports falling 20 percent. It's a worry for multinationals that of course, sell to them. Lots for the new Prime Minister to consider, too, and he took over today. Let's get right to the drivers. I want to begin with Boeing. Three hundred and forty six unnecessary deaths, that's the damning assessment of U.S. House lawmakers on Boeing's efforts to conceal faults in its 373 MAX airliner. Their report blasted the plane maker for burying crucial information, resulting in two fatal crashes. Pete Muntean has been pouring over the details of this report. Pete, 18 months in the making. It's still horrifying, galling to read, overlooking issues, concealing information from pilots that could have saved lives in their view.</s>PETE MUNTEAN, CNN AVIATION CORRESPONDENT: So many damning new details in this report, Julia, and what's so interesting is that it doesn't really focus on the actions of the pilots leading up to those two 737 MAX disasters, but rather the years before at Boeing and the F.A.A. You mentioned more than 250 pages which calls into question technical assumptions made by Boeing, management miscalculations made by Boeing and oversight gaps at the F.A.A. In this, two things really came to light that are especially new in this instance. One, that a Boeing test pilot struggled for ten seconds in a simulator with that MCAS system that's been at the heart of all of these investigations and that it ended with catastrophic results. Also, that Boeing engineers e-mailed each other talking about how they wanted to downplay the significance of the MCAS system and get it considered part of an existing system rather than an entirely new one. Samya Stumo who was 24 years old when she died in one of those crashes, I spoke to her father and he says this all shows that Boeing and the F.A.A. failed.</s>MICHAEL STUMO, FATHER OF CRASH VICTIM: They're still hiding the ball like they did before and like they did between the crashes when they kept the plane in the air when they knew the thing was a killer plane between the Lion Air crash and the Ethiopian crash that killed my daughter.</s>MUNTEAN: Boeing continues to stand by the 737 MAX design. It says that when recertification flights end and the plane is okay to carry passengers once more, it will emerge as one of the most scrutinized aircraft in history. Meetings are taking place right now between regulators and Boeing in London. The F.A.A. says that it stands by its numerous mandated design changes to the 737 MAX and that that is not good enough for the House chair of the Transportation Committee, Peter DeFazio. He says that the entire F.A.A. process needs to be revamped -- Julia.</s>CHATTERLEY: Yes, it makes perfect sense to me. Firstly, Pete, what is Boeing saying in light of this? Because to your point, there are fresh details. There's also many things that Boeing have been addressing over this time and these jets are expected to be recertified perhaps even by the end of this year and back up in the skies. Does this change anything?</s>MUNTEAN: Boeing says it's done thousands of hours of testing, thousands -- more than a thousand test flights of this airplane in simulators and in real life. It says that it's done everything it can to prove that the 737 MAX is safe to carry passengers once again and it expects that this process will be done soon, although the process is not being rushed along and the F.A.A. says it will not be rushed along either.</s>CHATTERLEY: Pete Muntean, great to have you with us. Thank you for that. All right, Snowflake begins trading on Wall Street Wednesday in one of the year's most hotly anticipated IPOs and the biggest in the U.S. so far. Shares priced above the target range at $120.00 a share, giving it a valuation of over $30 billion. Cold company name, hot stock, at least as far as evaluation is concerned. Paul La Monica, I think before we get into some of the valuation concerns, let's call them that, let's just talk about what Snowflake actually does, please.</s>PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, definitely. This is a Cloud software firm. They help large Fortune 500 companies analyze data within the Cloud, store data, warehouse it, so it really is all about helping big firms just manage data, which is key, the lifeblood of this digital economy right now and Snowflake has an interesting relationship and partnership with companies like Amazon Web Services, Google Cloud and Microsoft Azure, but they're also competing with them. So it is going to be fascinating to see where Snowflake goes from here, especially now that they've got a big investment from another giant in the software industry, Salesforce and Marc Benioff.</s>CHATTERLEY: It's quite fascinating, isn't it, because there are lots of Clouds floating around now whether it is the Amazons or the Googles, and the utility value of Snowflake is that you can analyze data using this company from all of these Clouds. So even though they have their competing products, this allows you to branch every single one of them and it's a one-stop shop -- Paul. Talk to me -- or go on.</s>LA MONICA: Exactly. Yes, I was going to say, I think that's the appeal of this company and it's probably the reason why Salesforce invested in it. They're going to be getting a private placement of stock following the IPO. But interestingly, Julia, Berkshire Hathaway, which despite the fact that it's now the top investors in Apple or one of the top investors in Apple, not known for being the most tech savvy of investors, especially not with unprofitable startups. Berkshire Hathaway is also getting a placement of shares as well. So it really just shows how even Warren Buffett has evolved and Berkshire Hathaway has evolved with its investing strategy in 2020.</s>CHATTERLEY: We're of two minds, Paul -- one mind, two together. That's exactly where I was going to go. When someone tells the story and then leads us on to the fact that the valuation on this one is eye-watering. This is an eight-year-old company. It is now worth more than $30 billion, as you pointed out. It is loss making. The net revenue retention rate is the highest, I believe of any IPO. It's whopping, so customers are lulled and they spending more money, but really?</s>LA MONICA: Yes, I mean, it is -- I know I've mentioned this several times with you on the show before, and not to point out the rapidly graying of my hair, I covered the tech bubble of 2000. I remember when all these dot-coms went public and then flamed spectacularly. I am a little nervous about the valuations with a company like Snowflake because again, it is not yet profitable. Their losses that they posted in their past six months of this fiscal year was lower than the previous year, so they're heading in the right direction and revenue has more than doubled, but they're still posting red ink, so that I think has got to be worrisome to investors when you look at the eye-popping valuation here. But, hey, if it's good enough for Warren Buffett, maybe, again, that is a key difference between now and 2000. I mean, granted, Buffett just invested in Amazon last year. He didn't invest in Amazon during the height of the dot-com bubble, but he is not waiting 20 years to invest in Snowflake, I find that telling.</s>CHATTERLEY: Yes, me, too. Paul La Monica, thank you so much for that. All right, let me bring you up to speed now with some of the other stories making headlines around the world. A slow-moving hurricane is unleashing widespread flash flooding that could reach historic levels along parts of the U.S. Gulf Coast. Sally came ashore just before day break in Alabama. Ed Lavandera is the port city of Mobile. He is there for us now and Ed, I've been watching all morning. You were getting absolutely pummeled by rain earlier. Talk us through it and what you're expecting in the coming hours. More, I believe.</s>ED LAVANDERA, CNN CORRESPONDENT: Yes, Hurricane Sally has officially come on shore. We are in the town of Mobile, Alabama, which is just west of Florida and this is a section of the Gulf Coast here in the United States that is just being hammered by relentless rainfall and intense winds. The storm came ashore as a Category 2 Hurricane and it is a deceiving Category 2, and what makes this particular storm very bad for this region is just how slow it is moving. If this were moving a little bit faster and coming ashore inland and then losing power and strength, that would be one thing, but this storm is just creeping across the land here and that means that this region is going to be exposed to these dangerous winds and intense rainfall for much longer than we would hope, and that is going to be the story here throughout the day as the eye of this storm might be on shore already, but it is just creeping along and that is making the situation very intense. Emergency officials are urging people to stay indoors and to remain patient. There is a great deal of concern, obviously, that people would want to get out now that the sun has come up and it is daylight just to begin surveying the damage, but it is far too early to tell. We do know that there is going to be extensive damage in many parts of this region, but we just don't have a full sense of all of that, the scale of this because we really haven't been able to get out and about to survey exactly just how extensive this is going to be. But the winds have been intense. We are close to just on the edge of the eye wall of this storm as it is coming inland and it will remain like this for the next few hours, and hopefully soon, we can get on the back side of this storm and have these conditions improve and weaken a little bit and that will make it a much better situation. But until then, it remains a very dangerous situation here on the Gulf Coast in Alabama and Southwest Florida -- Julia.</s>CHATTERLEY: Thank you so much. Ed, thanks for being there and giving us that report. Get some cover, please, now and try and get warm. Ed Lavandera there in Alabama for us. All right, as the U.S. approaches 200,000 coronavirus deaths, President Trump, again, contradicting his administration's top health advisers. Here is how he responded to a question at an ABC News Town Hall in Philadelphia last night about why he hadn't supported a mask mandate.</s>DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Now, there is -- by the way, a lot of people don't want to wear masks. There are a lot of people who think that masks are not good and there are a lot of people that -- as an example you have --</s>QUESTION: Who are those people?</s>TRUMP: I'll tell you who those people are. Waiters, they come over and serve you and they have a mask. I saw it the other day where they where they were serving me and they're playing with the mask. I'm not blaming them, I'm just saying what happens. They are playing with a mask so the mask is over -- and they're touching it and then they're touching the plate. That can't be good.</s>CHATTERLEY: The White House says it is looking forward to working with Japan's new Prime Minister. Yoshihide Suga was sworn in earlier after a Parliamentary vote. The 71-year-old leader replaces Shinzo Abe who stepped down due to health issues. All right, still to come here on FIRST MOVE, Apple's latest reveal, two new watches, two new iPads for its subscription bundle, the real game-changer. What about the iPhone 12? Come on, guys. And Uber's, I believe, their units with Careem on COVID proofing its cars and its business. Stay with us, that's next.