Populist Parties Across Europe Failed To Make Significant Gains, But The Centrists Struggled, Too; President Trump Says The U.S. Isn't Ready For A Deal With China; Renault Set To Tie Up With Fiat-Chrysler.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know. A far-right fizzle. Populist parties across Europe failed to make significant gains, but the centrists struggled, too. "We'll call you," President Trump says the U.S. isn't ready for a deal with China. And a whole new alliance. Renault set to tie up with Fiat-Chrysler. It's Monday. Let's make a move. Welcome to FIRST MOVE once again. I hope you had a great weekend. And if you're still on holiday today, then enjoy it while we bring you up to speed with what's been happening around the world. I'm calling it a populist polls in the European elections with many parties underperforming expectations, but that didn't stop a few fireworks and we've got all the details; and of course, no pause in the war of words between the U.S. and China over trade. Right now U.S. and U.K. stock markets are closed, so global volumes are expected to be a bit muted, but as you can see Europe is making gains, green across the board here. Greek stocks. Look at Athens over there, up by more than 6 percent. Prime Minister Alexis Tsipras called a snap general election following his party's defeat in both E.U. and local elections. Greek bond yields are also significantly lower, too. Is that a measure of perceived riskiness here? We'll take that I think as a positive sign as well on that general election call. Meanwhile, over in Asia, stocks had a mix session. President Trump said in Japan today that he's not yet ready to make a trade deal with China and the tariffs could rise further on Chinese goods. China responded though blasting the U.S. negotiators for not being on the same page as them on trade. Didn't a third of those pages get red lines scribbled all over them? Just saying. The Chinese also saying higher U.S. tariffs will have quote, "very limited impact on their economy." Well, new numbers out today tell a different story. Chinese industrial profits tumbling in April and we've got manufacturing business survey data. Later this week, too, we'll be bringing you that. Some analysts watching for a contraction in activity. Now, we say in FIRST MOVE all the time, that the stock market is not the economy. But I do think this chart speaks volumes and I'll continue to show it to you. At the beginning of this year, if you remember, Chinese stocks with a big winners with the MSCI China index, outperforming the S&P 500. Since President Trump's pivot away from that trade deal, the S&P has outperformed. It slipped 13 percent so far this year with a mere 4 percent higher for the MSCI. So that relative performance, they're important. That said, the U.S. won't escape scot free. Last week's report on U.S. manufacturing was a shocker. It showed factory activity falling to an almost 10-year low this month. JPMorgan thinks that we could see us growth boil to just 1 percent this quarter. The political center, of course took a hit in Europe this weekend. I question whether the economic center can hold on any better during the trade war. All right, let's go to the drivers. People from 28 nations have picked their representatives for the E.U. Parliament and it was a fragmented picture. Centrist groups did poorly, but populist parties didn't perform as well as some polls had suggested. Erin McLaughlin is in Brussels to give us all the details. Political fragmentation, I think that's the phrase following these results. Erin, talk us through it.</s>ERIN MCLAUGHLIN, CNN CORRESPONDENT: Yes, that's absolutely the phrase, Julia. I think it's interesting to look at these results in a context of three camps that exists here inside the European Union. On one camp, you have the status quo, then you have those who want more Europe and then you have those Eurosceptics who want less Europe. What we saw last night evolve is a picture in which the status quo lost ground and the other two camps essentially gain ground. We saw strong gains for the ALDE and martialist, the liberals as well as strong gains for the greens, but we also saw the Eurosceptic camp make gains as well, although not as much as some had originally feared. We saw strong gains for the Eurosceptics in Italy particularly strong performance from the Deputy Prime Minister there, Matteo Salvini. We also saw Marine Le Pen in France have a strong showing come out victorious, though a narrow victory over French President Emmanuel Macron. Although, in total, those who are pro-Europe within this Parliament vastly outnumber those Eurosceptic groups. So we don't expect the Eurosceptics to have too much of an impact on the internal workings that's more seen as a warning shot to the European project in general.</s>MCLAUGHLIN: The other big figure that everyone here is talking about in Brussels is voter turnout. It was particularly strong at almost 51 percent, the strongest it's been since 1994. The first time since the elections were introduced in 1979, voter turnout has actually gone up seen as a very healthy sign here for the E.U. in Brussels -- Julia.</s>CHATTERLEY: Yes, one could argue that Brexit and the difficulties of that challenge have certainly sent a message to voters in regional Parliament's. But to your point, if we break it down in terms of the Eurosceptics and those that are more pro-E.U., how coordinated are the parties on the Eurosceptic side if they want to create tensions and get in the way of voting and decisions in Brussels, how coordinated are they? Because the challenge has always been for me that actually even if they are Eurosceptic, the differences between them are vast.</s>MCLAUGHLIN: Yes, absolutely. The differences are vast by definition, they're nationalists who want to exercise their own national interest. So traditionally, in the past, these nationalist parties, these Eurosceptic parties have not managed to coalesce. We see the likes of Matteo Salvini trying to change that with his new alliance with Marine Le Pen of the National Rally in France. We're going to have to watch that space very carefully to see how successful he is. So far, he has been unable to bring others on board like Viktor Orban's Fidesz Party, have been unable to bring on board the Eurosceptics out of Poland. They all have very different economic as well as foreign policies. So it'll be very interesting to see if they'll be able to come together to make any sort of impact. But regardless, they do not have the majority. In fact, far from it in terms of this Parliament. The pro-European parties still have a majority of the seats in the upcoming European Parliament.</s>CHATTERLEY: Yes, we were just showing the smiling face of Matteo Salvini, one of the other big winners of the E.U. elections as well. Erin McLaughlin, thank you so much for breaking that down. Brexit one word and the one issue that dominated voting for the U.K. Nigel Farage's Brexit Party storming to victory with nearly 32 percent of the vote. There were also small but strong gains for parties to back remain, including the Liberal Democrats and the Green Party. Phil Black is at Downing Street for us and have been following these results. Phil, for me, the key takeaway for the U.K.'s voting was here. If you have a firm view on Brexit, whether you're a Brexiteer, or you're a remainer, you actually won votes. If you're an established party here, you got crushed.</s>PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Yes, that's precisely right, Julia. Parties that took a clear unequivocal view on Brexit one way or the other, were rewarded by the electorate. The clearest example of that, as you touched on is the Brexit Party, this new Nigel Farage single issue vehicle that was only formed a month ago last month, and yet now has emerged to capture a third of the vote and come in at first place, which really is an extraordinary result. But what it's been very good at doing is sweeping up the discontent that exists across pro-Brexit areas around the country. People who voted for Brexit, three years ago and who to this day simply cannot understand that what they voted for has not yet been delivered. On the other side, the Liberal Democrats, as you mentioned, up until pretty recently, something very akin to a political courts in this country, they have been incredibly effective at capturing the remain vote by say definitively unequivocally that they want to stop Brexit, they want a second or a third referendum in order to do that. And then there were the main parties which were punished. Labour lost a lot of its votes to the Lib-Dems, punished for that consistently murky policy of theirs saying, "We respect Brexit but at the same time, maybe we might back a further referendum," and that Conservatives, they knew they were going to take a hit on all this. They could see this coming. For many conservatives, it was one of the reasons why they push to force out Theresa May last week, but even still, they came in at fifth place, historically terrible. It will be a shock to the party, and it will very much likely inflame passions during the coming conservative leadership contest -- Julia.</s>CHATTERLEY: Yes, it's such a huge illustration, I think of the polarization of public opinion is, as you quite rightly point out. But let's move this forward then, what does this ultimately mean in the win for the Brexit Party here? Does it mean that the conservatives have no choice but to go for a hard Brexiteer, when you've got Nigel Farage saying, "Look, I want to be party to the next talks and the next Brexit negotiations." The challenge remains and it's still a huge challenge to get something that works for all here.</s>BLACK: Indeed, but it's difficult to see how this will not frame the coming discussion within the Conservative Party.</s>BLACK: Really, they are already feeling the pressure, the need to elevate someone to the leadership who is a dedicated Brexiteer, someone who promises to take a tough line with Brussels, someone who if necessary, is willing to accept and perhaps enthusiastically embrace the idea of a no deal Brexit scenario. Even before this result, much of the conversation about who the leader should be was through that paradigm, if you like, and it is very difficult to see how with this result in, the clear threat that many feel from the rise of the Brexit Party, how that will not further influence the discussion that is taking place in the Conservative Party over the coming six to eight weeks or so as they go about the process of not just choosing their new leader, but of course, choosing Britain's next Prime Minister as well.</s>CHATTERLEY: Absolutely. And we will continue this discussion later on in the show, but for now, Phil Black, thank you so much for that. All right, let's move on to our next driver and we go over to Tokyo now where President Trump had some choice words for China. During a Summit with Prime Minister Shinzo Abe, President Trump says the U.S. is quote, "not ready to strike a deal with Beijing."</s>DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: So as far as China is concerned, they want to make a deal. I think they probably wish they made the deal that they had on the table before they tried to renegotiate it. They would like to make a deal. We're not ready to make a deal and we're taking in tens of billions of dollars of tariffs. And that number could go up very, very substantially very easily. But I think sometime in the future, China and the United States will absolutely have a great trade deal.</s>CHATTERLEY: U.S. companies are paying those tariffs just to be clear, but White House correspondent Boris Sanchez is in Tokyo for us to give us the latest. Lots of pomp and ceremony here and a few Sumo wrestlers as well Boris, but it was the President's comments about North Korea and China, too that I think perhaps garnered most attention. Talk us through it.</s>BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Yes, well, specifically on China. It's a big part of the reason that the President is here and bringing up key talking points with Japanese Prime Minister Shinzo Abe. The main reason the President wants to open up agricultural markets to American businesses is because a lot of American farmers are suffering because of the trade war with China and the impact that tariffs have had on them. So that was news there. The President saying that the United States is not ready to get back to the negotiating table. But you're right. Some of the most surprising comments from President Trump were about North Korea. The President apparently taking the side of Kim Jong-un when it comes to the short range ballistic missile tests that North Korea launched last month that going against the outlook of his own National Security adviser, Ambassador John Bolton and even Japanese Prime Minister Shinzo Abe who was standing just a few feet away from him when the President basically said that he wasn't working worried about these missile test. Abe, however, said that he believes that these tests are regrettable. The Japanese Prime Minister has to walk a fine line here. He needs to sort of charm the President, engender his support for a bilateral meeting between Shinzo Abe and Chairman Kim, something that Abe is still seeking. And yet he also wants to condemn Kim and confront him with, in his words, some harsh truths. We should point out the President and Abe just departed from a banquet held in the President's honor by the new Japanese Emperor, Emperor Naruhito. The President and the First Lady are turning in for the evening. A big day ahead tomorrow. They're scheduled to tour joint Japanese and American Naval facility before the President ultimately has back to Washington tomorrow afternoon -- Julia.</s>CHATTERLEY: Yes, I mean, you raise some really important points, strategic partners in many respects, whether it's trade, whether it's security, whether it's tackling things like North Korea and China. Can we call this a successful few days between the two nations?</s>SANCHEZ: Well, it depends what the expectations were. White House officials before we even got to Japan had told us that this was largely going to be a symbolic visit. That it was meant to strengthen ties between the two nations and show the strength of the Alliance as well. But there really hasn't been a tremendous amount of progress to tout on a trade deal, or on some sort of joint coordination regarding North Korea. Perhaps, the biggest thing that came from that press conference in terms of any deal or coordination between the two countries was this announcement that Japan and the U.S. would work closer together on an effort to explore space. President Trump talking about soon going to Mars. But again, this is more about diplomacy. This is more about showing a united front than it is about actually getting something on paper and accomplish. President Trump telling the press and the world on Twitter that we could expect some kind of deal after elections are held here in Japan in July -- Julia.</s>CHATTERLEY: Yes, it's such an important point. The symbolism here perhaps front and center and Melania Trump wins, her face at that sumo wrestling match was just a picture and that was all over social media at the weekend, it did make me laugh. Boris Sanchez. Thank you so much for that over in Tokyo for us.</s>CHATTERLEY: All right, two big carmakers are on the road to a potential merger and investors are loving it. Renault's Board says it will study a quote, "friendly proposal" for a 50/50 merger it received from Fiat-Chrysler. Shares of both companies are rallying in Europe and Peter Valdes-Dapena joins us now and has been looking into the details. Talk us through what this combined entity would look like? The world's third largest carmaker here, what will that mean? And also what will it mean for the Renault-Nissan Alliance as well going forward?</s>PETER VALDES-DAPENA, CNN BUSINESS SENIOR AUTO WRITER: Well, that's something that's really going to be a lot of discussion. By the way, if you include the Alliance partners in this, this would be the total package, the largest automaker in the world, including Nissan and Mitsubishi with Fiat-Chrysler and Renault. Obviously a very, very big deal for the industry. So far, Nissan is not commenting publicly on this arrangement. It hasn't said anything about it. There are reasons Nissan might be happy about this, because, of course, Renault has been pressuring Nissan looking to do a full merger and Nissan has been resistant to that. And now Nissan could say, "Well, there. You have your merger. You're happy, and we can maintain our independence in this."</s>CHATTERLEY: You know, it's interesting, I was looking at some of the synergies that come from the Nissan-Renault-Mitsubishi partnership here. It was 5.7 billion euros in 2017. So we're talking if this alliance only generated half of the synergies that that Alliance does, we're talking some two and a half billion euros a year, which would be lovely. The challenge that I see here is Europe, Italy, where there is greatest crossover between these two things, try telling France or Italy that we're going to be cost cutting and closing factories and things. Huge challenge.</s>DAPENA: Of course, now officially speaking in this announcement, Fiat Chrysler said it would not have to close any plants. That this would all be through other sorts of synergies. But in the long term, who knows? It can be tough in this industry to cut costs without closing factories, but so far, they say they're not going to. But clearly Europe is the biggest challenger. It's a very -- it's a very challenging market to begin with and one where both these companies do have a lot of overlap. The benefits -- the big benefit -- for them is going to be in the U.S. where of course Fiat Chrysler has deep dive big pickup trucks and lots of profits.</s>CHATTERLEY: Yes. And the future is technology, of course. I have an eyebrow raised. We shall see. Peter Valdes-Dapena, 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. The Austrian Parliament looks set to sack Chancellor Sebastian Kurz's caretaker government in a vote of no confidence. In a few hours' time, the crisis began after a video sting scandal which took down the Vice Chancellor and dissolved the coalition between the Chancellor's Conservatives and the far-right Freedom Party. A climber who died on Mount Everest over the weekend had warned of overcrowding at the summit in his last post on social media. Robin Haynes Fisher one of nine people killed on Everest this year. Experts say conditions this season have become increasingly dangerous and some mountaineers lacked experience. All right, we're going to take a quick break. But still ahead, what the E.U.'s fractured Parliamentary elections mean for global business and the centrists; and don't wave goodbye to the populist wave just yet. Plenty more to come on the show. Stay with us. You're watching FIRST MOVE.