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QUEST MEANS BUSINESS
Dow Flirt With 22,000 In Record Breaking Session; Ousted Scaramucci Faces Big Tax Bill; Apple To Release Q3 Earnings This Hour; Dow Hits Record High, Flirts With 22,000; U.S. Dollar Tumbles After Initial Trump Bump; Scaramucci Says He'll pay Taxes On Sale Of Company; U.S. Levies Sanctions Against Venezuela President; Maduro: Not Intimidated By "Emperor" Trump; Reports: Two Venezuelan Opposition Leaders Seized; U.S. May Launch New Sanctions Against Chinese Firms. Aired 4-5p ET
Aired August 1, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:13] RICHARD QUEST, CNN ANCHOR: A thousand bell has rung on Wall Street. The Dow Jones Industrials closes at an old-time record. It is up
71 points. But just look, we didn't quite make it to 22,000, tantalizingly close to 21,962.
Trading is over. It is Tuesday. It's the first day of August. The Wall Street winning streak keeps the rolling on and the Dow is just up 22,000
Anthony Scaramucci's week just got worst. The taxman is coming after him on, a tax on the sell of his company.
And in this hour, Apple releases earnings but it's releasing the new iPhone is (INAUDIBLE). I have all the details.
I'm Richard Quest live from the world's financial capital, I mean business.
Good evening. Tonight, it's the story of two markets. One is influenced by Wall Street, the other influenced by Washington.
This is the one that President Trump wants us to see at the moment. It is the stock market, particularly the Dow Jones Industrials, which has just
flares up 71 points which is the fifth straight record close.
And this is I think a fascinating statistic. It is the 31st record close since the inauguration of Donald Trump back on January. The President has
taken credit. He tweeted this morning, stock market could hit all-time high stake 22,000. It was only 18,000 six months ago on Election Day.
Mainstream media seldom mentions.
Now, it's not only the stocks. Moments ago, the President said there's not enough tension now being given to the low unemployment numbers or indeed
the economic growth numbers either.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Together, we're unleashing a new era of American prosperity perhaps like we've never seen before and you
see it day by day. You don't hear it too much from the media, but I think the media is going to actually be forced to cover it pretty soon. They're
going to have no choice.
(END VIDEO CLIP)
QUEST: Now market strategists say investors aren't counting on the President anymore. With the agendas told (ph), investors have pulled out
the so-called Trump trade. And the President tweeter feed, well, if there's one place it is being affected, perhaps it's the dollar. The
dollar is now at the lowest level in more than year. We'll talk about the dollar in just a moment.
Ted Weisberg joins me from the floor in the stock exchange, President of Seaport and Securities.
Look, we're going to do 22,000 sooner possibly rather than later. It's just a question of time.
TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: Well, I guess so Richard. But at the end of the day, it's just a number, perhaps a very, very short-
term icing on the cake but yet just a number, not sure it means anything.
The real -- what really means something is the move the Dow has made from Election Day to where we are now. That is pretty dramatic. There are
another couple of points on the upside. Really, I don't know how significant that really is.
QUEST: OK. So, if you take your comment just then, that move which the President tweeted about this morning, and yet there has be no economic
policies from the administration that would justify that move. Yes, there has been a withdrawal of regulation and bureaucracy. So what has driven
WEISBERG: Well, I think you just told us. It is the reversal of some of the very restrictive, almost putative policies of the previous
administration. You know, I know that President Trump wants to be a cheerleader about the stock market and perhaps it's not too good to pat
yourself on the back, but you don't want to jinx it.
But the fact is, it's a new environment, it's an environment of less government regulation, not more government regulation. It's almost like
taking, if you will, the lid off the treasury booker (ph). And I think a lot of what we've seen in the market is a reflection of a much easier
environment for both corporations here and abroad. You know, because the overall economy, Richard, yes, it's doing better but it's kind of pitch in
start (ph). So the economy certainly hasn't taken off.
WEISBERG: A lot of -- I'm sorry.
QUEST: On that point, though, the significance becomes ever greater now surely of the tax reform package.
[16:05:02] WEISBERG: Right, yes.
QUEST: Having failed with health care, getting a strong tax reform package must be essential.
WEISBERG: Well, you know, it's an interesting point, Richard, and I would simply say this, as long as the prospect of tax relief in any form,
corporate, individual, what have you, is out there, that will candy for the stock market. We're not going to go straight up. Certainly, we'll going
to get some pull backs. But until and if that happens, I think we're going to continue with this positive bias. Of course that's really I think what
the market is looking at, not the actual event itself so much, but the prospect of that event. When it finally happens, it might be a good cake
to sell on the news.
QUEST: Ted, good to see you, sir, as always. Thank you. We appreciate your time tonight.
Now the dollar usually moves in tune with equity, but it's an entirely different story which we see today in Trump administration. This is where
the equities move today.
Now, remember Donald Trump said and has said on numerous occasions that he believes that dollar is overvalued and he's tried to talk the dollar down.
Well, this is the dollar since the November election. You start at November the 16th when the dollar index reaches a thirteen-year high. By
December the 15th, the dollar has continued to gain ground. The President hasn't taken office yet and Euro parity is ever so close.
But by the time you get to January and you start to see this very sharp falls. January sees the largest fall in the dollar since 1987 when we're
talking all those mover and plus record days in terms of managed decline of the dollar. But actually that worst January since 1987. In those days in
the '80s, there was a managed version where you talked -- where the G7 as it was then, G5 and G7, moved in to actually move the dollar down and
And then it's down 2.6 percent versus a basket of currencies. So you move forward and you see we move on to when -- on May the 17th when James
Comey's memo. Then you saw the dollar drop 1.5 percent versus the Japanese yen. By the time you got the health care bill failing, it's now at its
weakest level in some two years. And then you have Anthony Scaramucci who is fired and it's at 2.5 year low against the Euro. And incidentally, it
has lost about 12.5 percent against the Euro since its recent highs.
Paul Donovan is with me, the Chief Global Economist at UBS Wealth Management.
Paul, you are always looking at the dollar and giving us some thoughts on this. What is the force -- besides when the President has made some
comments, what is the force that has driven that 12, 12.5, 13 percent fall against the Euro?
PAUL DONOVAN, CHIEF GLOBAL ECONOMIST, UBS WEALTH MANAGEMENT: Well, basically what you've got, a three set of things comings together. So the
first is that back in November, December last year, the dollar was dramatically overvalued. President Trump is correct in this point. The
dollar was far too strong. And it's a bit like a piece of elastic, you stretch so far and then it snaps back.
The second factor is that the United States is a current account deficit country. The U.S. imports, on a great deal, it imports commodities, it
imports relief goods, it imports British T.V. anchors and all of these imports mean that there is a need to finance, a need to attract foreign
capital of $2.8 billion a day. That's more than the GDP of the Netherlands.
And then the third factor is international investors were being asked to stump up $2.8 billion a day and looking at the politics of the United
States not really understanding what's going on and saying, "You know what, I'm not sure I want to bet $2.8 billion a day on this."
DONOVAN: And that's forcing the dollars to come down.
QUEST: Now, you take us into heavy waters there, but when you say the financing of the deficit and this requirement of international investors to
invest, of course, this is known as funding the deficit or financing the current accounts and deficit. If they don't come in to the market -- I
mean the U.S. is not short of dollars, people will still have dollars to fund their trade and their businesses. So why is it so significant that
these $2.8 billion comes in thousands of different transactions?
DONOVAN: Because essentially what is happening here is of course that America is not paying dollars. America's got to pay Euros. You want to
buy a BMW, ultimately, BMW are going to demand Euro somewhere along the line. You want to a Burberry jacket or a bottle of scotch, then it's the
pound sterling you've got to come up with end of the day.
[16:09:59] You know, if I walk out at the T.V. studio here in Central London and try and pay a taxi driver in dollar bills, I'm going to get a
very negative reaction. You know, I need sterling. So if you're buying international goods and services, you need that foreign currency. So, what
do you do? You've got to find foreigners who are prepared to buy dollars in exchange for that currency. And there are fewer and fewer foreigners
who are as eager to buy the dollar at prevailing rates.
QUEST: Now, what's fascinating about what you're saying, Paul, is that you have taken us away from what I would describe as the technical argument,
higher interest rate differentials, rising rates in the U.S. versus what they might be in the U.K or audit. You know, you can always justify a
currency on interest rate differentials, but you had taken me away from that. You are now taking me to what I would just describe as strategic
reasons for why this dollar is weak, which is a far more serious reason.
DONOVAN: Indeed. And the thing is interest rate differentials are all very well. They are parts of the explanation. But nowadays really, they
are very small parts. And if we go back to plus and mover, in those days, interest rates drove most of the world's capital flows. That was the big
But that's just not the case anymore. Interest rate related flows are relatively small part of the overall picture. It's about equities, it's
about direct investment, it's about whether or not you're consuming goods. Those are the flows that really dominate currencies these days.
QUEST: So finally, this dollar depreciation, for that's what it is, that, you know, quite a magnitude, this is actually going to call it cost
provider. It doesn't become so quick to call that it becomes dangerous. It couldn't create the virtuous cycle or circle of increased exports. It
makes things -- you're not going to --
DONOVAN: Well --
QUEST: You're not going there, are you?
DONOVAN: We're not going there. We're not going there. What it does is increase the profitability of U.S. exporters which is one of the reasons
why the equity market is going up. The U.S. equity market is made up of global companies, not really U.S. companies anymore. The thing here is --
QUEST: So why will you not take -- why will you not accept that it could actually increase exports? Why we chose then to go for the profitability
of the exports? Because in the.
DONOVAN: Because forty years ago --
QUEST: Go on. Go ahead.
DONOVAN: Forty years ago, it would have increased the volume of exports because as the currency move, U.S. exporters would have top that foreign
currency prices. But exporters just don't behave like that anymore. For the last 20 years, the dominant process in currency moves has been what we
call pricing to market. American companies don't lower the Euro or the sterling price of their currencies just because some teenage foreign
exchange dealer in London has pressed the wrong button on their computer.
They keep the prices constant, and as a result, they got a better profit margin when they translate the money back into dollars. Companies are
going for profits, not for volumes. That's been pretty clearly established in the last 20 years. So you don't get an export pickup, you do get a
profitability pickup. And so the question for the U.S. economy is what happens to those profits. Are the used productively to encourage growth or
did they go to foreign fair holders?
QUEST: Fascinating. Excellent. Good economics (ph). Thank you, Paul Donovan, putting the dollar. You changed the context. Really glad to have
you tonight, Paul. Thank you.
Now, it's been a rough week for The Mooch as he has known -- well, he calls himself The Mooch. First, Anthony Scaramucci lost his job, now it's a
major tax headache for him as well. Because back in January, Scaramucci sold his stake in the investment company SkyBridge Capital for $118
millions to join the administration, and after a fight he didn't get the job then.
Now, out of the White House, Scaramucci's lawyer says he will pay the tax bill once the sale goes through. What am I talking about here? I'm
talking about the ability to defer tax on a capital gain that you are allowed to do if accepted by the ethics authorities because you're joining
the U.S. government. Now, the entire reason for this was to ensure the people could join the government, the administrations of all complexions
and not worry about suddenly because they've got to sell their companies with all business or houses or whatever it might be because of ethics
"CNNMONEY'S" Cristina Alesci is in Washington and joins me now. This tax deferral, and let's face it before we get into your answer, Rex Tillerson
enjoys it and Wilbur Ross enjoys it, Betsy Devos enjoys it, all of those cabinet members and others joining the administration enjoy it because
that's part of the law. But in Scaramucci's case, what are we talking about?
[16:14:54] CRISTINA ALESCI, CNNMONEY CORRESPONDENT: Well, we're talking about his ability to use that permission or take advantage of that. And at
this point, if he doesn't get another job in government, Scaramucci will actually lose out on taking advantage of that and deferring potentially
millions of dollars in taxes.
Here's the deal, Scaramucci, as you mentioned is in the process of selling his firm SkyBridge. And in some cases, the government does give incoming
officials, again as you mentioned, special permission to defer taxes if they are selling their assets or investments who will void potential
conflicts of interest between their jobs and their financial holdings.
Now before his ouster, Scaramucci's attorney told me that Scaramucci was going to apply for this permission if he hadn't done so already. That's
kind of unmalleable. Now, at this point, it's really moot. His attorney telling me today that he'll pay the full tax at the close of the sale,
Richard. That is something that we did not know before but they are abandoning the request obviously to the special permission and they are
going -- and then going -- and he's going to pay the tax on that bill.
QUEST: Right. Now, if he finds another government job, would he still qualify for the tax benefit, and arguably of course related of course, he's
with the Export-Import Bank, the EXIM Bank which of course might classify but that's unclear. But if he does go for a full throttle of a government
ALESCI: Well, it's unclear. But one thing is clear, Scaramucci was well aware of the benefits associated with the delay in paying taxes. Jeff
Delaney reported last night that people close to Scaramucci, that he's talked about this tax deferral quite frequently. But optically, I think
experts say it's going to be tough for him to apply for this program even with the new government job because it might come across as an abuse of the
program as he is chopping around for a government job just so he can get a tax deferment.
And that's the issue here Richard. It's really optics. I mean, technically, the President could potentially change the law so that it
would apply but it seems like that's not going to be something that's going to happen in this case based on my reporting.
QUEST: Cristina Alesci, thank you. I suppose the point really is he shouldn't have sold his company till he actually have the job. Then the
back (INAUDIBLE), that's a subject -- a different subject for different date. Good to see you, Cristina. Thank you.
ALESCI: Thanks for having me.
QUEST: The U.S. thinks Venezuela is slipping from humanitarian catastrophe into dictatorship. Washington is responding with sanctions. The impact of
those sanctions from the architect of the Obama administrations, Peter Harrell is joining us after this.
QUEST: Game of name calling under a massive economic repercussions. Donald Trump says Venezuela's President Nicolas Maduro is a dictator. The
Washington has levied sanctions against Mr. Maduro and believes the country's election on Sunday. The constitutional reform, my friend, it was
a sham. Mr. Maduro says he will not be intimidated by an emperor.
(BEGIN VIDEO CLIP)
NICOLAS MADURO, PRESIDENT OF VENEZUELA (through translator): Emperor Donald Trump took decisions against me as President of the Republic. They
are decisions which reflect his impotence, his desperation, his hate, the character of a magnate, the emperor of the United States of America.
[16:20:07] They don't intimidate me. The threats and sanctions from the imperialist don't intimidate me one bit in this world.
QUEST: Leyla Santiago is in Caracas. Well, at least too many, never going to get on. And best, they're going to continue shouting at each other.
But the rhetoric has got worse. So how serious is this?
LEYLA SANTIAGO, CNN CORRESPONDENT: Well, you know, they're both pointing their fingers at each other. The White House is calling Maduro a dictator
and threatening in particular in the future possible economic action. So we could see that actually in the future possibly turn to the oil market
here. You know, Venezuela, has the world's largest oil reserve, a big market for that. The United States and President Trump is considering
right now possibly slapping (ph) some sanctions on that.
When I talked to someone from the administration this week, they were telling me that there's a bit of a debate of whether or not, they want to
move forward. But again, this move would come after what has already been sanctioned on 13 individuals associated with President Maduro. In the
meantime, President Maduro is using this as sort of something to back up his claim that this is the United State interfering with what should be
Venezuela's sovereignty at this point.
QUEST: Now, the decision last night to take into custody two opposition leaders for -- -- because according to the Supreme Court they were planning
to flee. What's been the reaction on that today? And how much tougher has that made it for President Maduro to explain why opposition leaders should
SANTIAGO: Well, they're using that as part of the reason to explain. They're saying, "Look, you guys are planning to flee." They are also
saying that they also violated the conditions of their house arrest terms. We're talking about the faces though, some pretty big names in the
opposition Antonio Ledezma, as well Leopoldo Lopez.
And when you see the video of this, Richard, when you see the video of them overnight, taking Ledezma out of his home in pajamas as he's resisting, as
neighbors are yelling dictatorship and alerting other neighbors of what's happening, it certainly has been quite the top today, especially among
other opposition leaders who say, "We vow not to step down. We're going to continue on with this fight."
That said, we haven't seen any major protest today on the street, protest that for days, weeks, months, have taken to the street and become very
violent, in some cases very deadly, in Venezuela.
QUEST: Leyla Santiago in Caracas. Thank you.
It is extremely rare for the United States to talk with the sitting of head of state with sanctions. The Obama administration sanction, the North
Korean leader, Kim Jong-un for the first time in 2016, that was ever his alleged role in human rights abuses against the North Korean people.
George W. Bush imposed economic sanctions against the Zimbabwean President Robert Mugabe, accusing him of undermining democracy that expands within
2008. And the Obama administration issued tough sanctions against the Syrian President Bashar al-Assad in 2011 in an effort to stop the regime's
fierce crackdown on the protestes.
Peter Harrell joins me now from Atlanta. He helped runs the sanctions program against the Russia, Syria, and Iran under the Obama administration.
Now, one can -- one is attempted to say that sanctioning Maduro in this personal capacity is sort of a bit like attacking a straw man in the sense
of it's not going to do any good and it's just -- it's a bit by P.R. exercise.
PETER HARRELL, CENTER FOR A NEW AMERICAN SOCIETY: Well, thank you very much for having me on, Richard. I think that this is -- the action of
sanctioning Maduro personally is clearly a signaling mechanism that Trump administration is using to send more maybe coming. You're right by itself
it's not going to have a huge economic impact. But I do think it sends an important signal about the direction we may be traveling with respect to
sanctions on Venezuela.
QUEST: OK. But the whole question of sanctions, and I want to think more about let's say for example, Russia, and in the post-Crimea, series of
sanctions against named individuals that the U.S. and the E.U. has done against people, you know, business leaders, some people in the
administration, lawmakers in the Russian duma. Do they actually have any effect? I mean, is there evidence that these people sitting there
quivering that the E.U. or the U.S. has sanctioned them?
[16:24:53] HARRELL: So I think that really depends on the person we're talking about. I've heard from friends in the Trump administration that
some of the sanctions announced earlier this year against several of Maduro's henchmen actually did freeze quite a number of assets here in the
United States. You know, these were people who had real estate and other property in Florida and elsewhere in the states.
So I think you can see some bite from these targeted sanctions. But clearly, if you're looking to change the kind of behavior of a government
of someone like Mr. Maduro, you're only going to really do that after you've looked at broader economic sanctions against country's major sources
QUEST: Right. And that means banks doesn't -- it means oil companies in the case of Russia it means for example the sort of restrictions on access
to dollar borrowing or to dollar clearing that the Fed put in place.
HARRELL: If you look at what the Obama administration did with Russia, we prevented Russia from borrowing tens of billions of dollars on
international markets. Within months of those sanctions coming into place, we've seen the Russian government have to provide major bailouts with
number of its large banks and energy companies. There is a huge impact there.
QUEST: Now, you know, the whole question of sanction, and I'm old enough remember the sanctions that were introduced against South Africa during the
apartheid regime. And I think you would agree with me, I need you to agree with me, pretty much ever since the debate has been do sanctions work?
HARRELL: I think that has been a debate. There have been academic studies. There have been plenty of anecdotal studies. What I will say is
that I think from a policymaker's perspective, when you don't have a lot of good options with a place like Russia or place like Venezuela, sanctions
are going to be on the table almost regardless of whether they actually work or not.
QUEST: Beautifully thought, a true moments of real politics in the world of money (ph). Thank you. Good to see you, Peter. We'll have you back.
HARRELL: Thank you.
QUEST: U.S. Secretary of State Rex Tillerson says that the U.S. does not blame China for the crisis in North Korea despite perhaps what the
President may have said. I spoke to the former Australian Prime Minister Kevin Rudd. He told me U.S-China relations could soon begin to spiral
(BEGIN VIDEO CLIP)
KEVIN RUDD, FORMER AUSTRALIAN PRIME MINISTER: I think the first thing we need to confront on the China-U.S. front is the inevitability I think in
the next several days of the U.S. administration announcing what's called secondary sanctions against Chinese firms. The United States will allege
have been assisting directly or indirectly the North Korean regime. And that of itself is actually going to create a whole new dynamic in the U.S-
China relationship which I think could well resolve and retaliate reaction by the Chinese and begin to sparrow in a negative direction itself quite a
apart from the ability to deliver outcomes for North Korea.
For the Chinese or North Korea, it's a complex equation. But at the end of the day, number one, the Chinese do not want a reunified Korean Peninsula
on their borders. Two, that one particular that might be pro-American, and three, the Chinese always ask themselves, will you Americans want us to
engineer one form regime, change or another in Pyongyang to get a better supreme leader? There's one problem with that the Chinese say. We got
what would come after Kim Jung-un and whether a replacement regime would be worst than we've already got. Those are the sort of things in the Chinese
QUEST: Would you say that North Korea at the moment is the single biggest global geostrategic or whatever ratio would use, threat, because of its
intractability and the paucity of options?
RUDD: Yes, and unequivocally so. It's my view since January of this year when I put together my own analysis of the 10 great strategic challenges
facing international community for 2017. And since I published that in January, I -- my analysis of the North Korean dynamic is that it goes from
bad to worse, and essentially, Richard, because it's driven by regime policy on the one hand and a technical timetable which is getting the ICBM
to be effective over a long range. That was achieve on the 28th of July, two or three days ago. Secondly, what we don't know is the pace of the
miniaturization program to put a nuclear warhead on top of that missile.
But the technical community would say this is now a problem of the near- term not the medium or the long-term. So therefore because it's driven by a technical timetable, whether anyone likes to recognize it or not, this is
a real and emerging and present danger. And certainly for the analytical and policy community with whom I speak, it is number one, number one and
number one of all the strategic policy challenges facing international community today.
(END VIDEO CLIP)
[16:30:02] QUEST: Kevin Rudd talking to me earlier. Apples earning are out any seconds from now. Investors looking its all going to be about
this, the iPhone. And just now, what is the iPhone that want the sales numbers of the revenue, what's the prospect for what's going to happen,
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment.
Apples earnings are out and we're looking to see if there are any clues about the iPhone 8 release date. That's their first and final (INAUDIBLE).
The future (INAUDIBLE) relies on more than just one person. This is CNN News Network, the news more with Richard Quest.
In Heart, Afghanistan, a pair of suicide bombers have killed at least 29 people in an attack on Tuesday at a mosque. Dozens of people were wounded.
The attack took place during evening prayers at the Shia mosque in Herat. It's not clear who is responsible for the attack.
(INAUDIBLE) ago, the White House said President Trump did weighed in on Donald Jr.'s stating statement about that not infamous meeting with the
Russian lawyer last year. It comes a day after "Washington Post" reported that Donald Trump dictated those remarks to his son. The White House claim
it's not just (INAUDIBLE).
Venezuelan authorities took two opposition leaders from their homes early on Tuesday after the men publicly opposed the controversial election for
new legislative party. Leopoldo Lopez and Antonio Ledezma were under house arrest. A statement from the Supreme Court says the intelligence officials
determined they were planning to flee.
Pakistan's parliament has chose their new prime minister following the former leader Nawaz Sharif being resigning and having ousted of a
corruption allegation. Shahid Khaqan Abbasi is a former petroleum minister. This is the 10th replacement to -- for Shahbaz Sharif, the
ousted prime minister and his brother. Abbasi denies that (INAUDIBLE) prime minister.
U.S. Secretary of State Rex Tillerson says Washington is willing to sit down for talks with North Korea only if it gives its pursuit of nuclear
power, nuclear weapons. During a press briefing early today, Mr. Tillerson stressed the U.S. was not seeking regime change or looking to send its
military to get involved The interruptions are in his words not attracted in terms to democracy or diplomacy if they fails.
[16:35:06] Apple stock is up roughly about 3.5 percent to 4 percent (INAUDIBLE). The Apple just said earnings came in ahead of expectations.
The iPhone shipments were higher than expected and now we're looking at clues for the future of the iPhone on the business in China.
Samuel is in London joins me now. Samuel, just quickly as I look at the numbers we've had better look at the amendment. Revenue of 45.4 billion,
that was about 1.5 billion, 2 billion more that have been looking at. But interestingly, guidance for the next quarter between -- revenue between 49
billion and 52 billion with margins of 37.5 percent to 38 percent.
SAMUEL BURKE, CNN TECHNOLOGY AND BUSINESS CORRESPONDENT: The reason that number is so important to guidance really everybody cares about this
earnings report is to give us clues as to when the iPhone will come out. With strong guidance like that, we can infer that the iPhone is likely to
come out in September. Investors like that because that gives people a long time to buy it before Christmas, which means more sales.
And so, we are wondering, could it be October? Will they need more time? And everything that we're seeing right now as we decide for this numbers
would indicate that it's going to be September and, of course, CNN's "Quest Means Business" will be live there. If it isn't September, we'll bring you
all that coverage, but it was all about that.
iPhone numbers are very strong, 41 million instead of just 40.7 million is what people expected. One number that popped out to me, Richard, 11.4
million iPad sold versus expectations of just 9 million. So the iPad actually did well for one quarter and survey says, you know, those are the
things like Apple Music and Apple Pay, which Apple is really doing an incredible job that that's up 20 percent. So if the iPhone doesn't sell
that well, they can rely another category like that that seems pretty solid.
QUEST: Right. And their revenue fails subscription based. It's a bit like Microsoft and the Microsoft Cloud and the new -- and Windows 365.
They are subscription based and they will continue providing.
I see they're paying a dividend again. Apple which didn't paid dividend for the longest time because now being a cash dividend of -- a healthy cash
dividend 63 times per share of the company's stock to those on the folk. So, Apple starting to look like -- well, it is a normal company.
BURKE: Normal -- a very, very healthy normal company. But still the big question is, can they do anything differently to this phone? Remember, in
the previous quarters or the previous launches of the iPhone, I've been there in California and a lot of times they're playing catch up (ph) to
Samsung. They're playing catch up to companies like Huawei and there are lot of hopes that maybe this iPhone 8 because it's the 10-year anniversary
of the iPhone.
Can they make the company even healthier, Richard, if they have some type of sexy new tool that we don't know that we need yet? Some people are
talking infrared face ability so that in the dark you can get into your phone, not even using your thumb print, but rather your face. But do
people really need that? At the end of the day, everybody says to me they just want a battery that last longer.
QUEST: Well, I can agree with that. Tell me Samuel, the whole question about Tim Cook's tenure as CEO of Apple, I mean, he's been there for many
years. I mean, the watch hasn't been a huge success, but I mean, you only see lots and lots of people with them, but it's not been the money spend in
that sense (INAUDIBLE) that members freak (ph) yet. And the iPhone is still there. What's the verdict on Tim?
BURKE: Well, the verdict is innovation, not big. There's been no iPad. The Apple watch is not a success by Apple's own term. They kind of pretend
like it is. But at the end of the day, he is keeping investors happy because he knows how to boost things like services.
So buying companies like this, making sure the Apple Music was able to compete with Spotify, all those services. The ecosystem, which you and I
have talked about so much that Amazon is doing at Huawei, well, Apple really originated it and he's learned how to pull money out of different
parts of the iPhone that other people like Steve Jobs never realized could be profitable. So whatever he's up to, it does seem to be profitable.
QUEST: Samuel Burke as always, thank you.
Now, 50 top executives have spoken out against the so-called bathroom bill in Texas. And those, including the chairman of B.P. America and the
president of the Shell Oil Company. The bathroom bill is passed. It would require people to use restrooms that match the gender on their birth
Well, that was organized by the Greater Houston Partnership says, "We support diversity and inclusion, and we believe that any such bill risks
harming Texas' reputation and impacting the state's economic growth and the ability to create new jobs."
A similar letter was send to businesses just signed by the chief executives of American Airlines, Southwest, and AT&T, which is agreed by CNN's parent
company, in otherwise, (INAUDIBLE).
Joining me now is Bob Harvey, the President and Chief Executive of the Greater Houston Partnership. Mr. Harvey, this bathroom bills and this
opposition towards it, what makes you at all sure that any legislature, any -- is going to take notice, is that to go to change their mind as a result.
[16:40:10] BOB HARVEY, PRESIDENT AND CEO, GREATER HOUSTON PARTNERSHIP: Well, you know, we had over 50 Houston business leaders signed their letter
and these are truly the leading businesses in Houston that run again it from energy to professional firms to manufacturing, a pretty well broad
representation of the Houston economy.
And this is the first time they have spoken out on this issue as a group. We think the business community, you know, still has a voice in our state
capital in Austin and I think that legislatures will be listening to what they have to say.
QUEST: What is your messaging here, though, because as -- you know, the word transgender at such doesn't appear in the letter.
HARVEY: No, but the bill requires individuals to go to the bathroom base on the sex on their birth certificate. So it's clearly directed at the
transgender community --.
QUEST: Hang on. Hang on. Why not say that? Why you'd actually say, listen, this is a bill about transgender and therefore picking up we
support diversity and inclusion and believe it and he said to bill. It seems like you pull back at the last second.
HARVEY: Well, only because the legislation doesn't say transgender. We say that the bill is blatantly discriminatory, so we're acknowledging that
and we're prepared to say that every group in Houston and in Texas deserves our respect, including the transgender community. So we're not bashing on
saying that at all.
QUEST: Good. Let's talk about how -- what happens if this bill does go forward? I mean, at some point I guess your members and Lord Companies
(ph) have to show that there is a real threat on the other side or rather a promise on the other side of the threat.
HARVEY: Well, what we're saying is that this is going to affect our ability to recruit talented individuals from around the U.S. and around the
world to Houston. We're not threatening the move out of Houston. We're simply saying that to be competitive we have to be innovative. And to be
innovative, we have to attract young talents.
So our statement is, if Texas and Houston has a great reputation as being welcoming, diverse, and inclusive, don't undercut that by doing something
that is discriminatory and we'll change that imagery in the world.
QUEST: You don't feel there might need to be some form of (INAUDIBLE) or implicit threat, you better not do this or we will come after you.
HARVEY: No. I don't think that's necessary. I mean, the standing of this companies were such that I think when they say that it will affect their
business and it will affect the Texas economy, it will affect businesses choosing to move here. It will affect businesses deciding whether to
expand in Texas or expand elsewhere. I don't think we have to make that a threat, but I think that's part of the discussion.
QUEST: Bob Harvey, thank you for joining us. Thank you very much.
HARVEY: Thank you, Richard.
QUEST: As we continue tonight, the large numbers of Brexit voters say they will be happy to lose their job. Also, a family member out of work as long
as it means leaving the European Union.
[16:45:23] QUEST: Now, apparently, Brexit voters think leaving the E.U. is an economic hunt while we're taken regardless of the bloody nose that you
might get in the process.
A new process 61 percent, 61 percent that significant economic damage is worthy, 20 percent say no, it's not worthy, 19 percent, didn't know
anything about it or decent comment on it. But what's also fascinating about this is that the way in which the age differential, those who are
older are quite prepared to take that.
Joe Twyman is the director of Political Polling at YouGov joins me now from London. And, I mean, Turkey is voting for Christmas lemmings over the
cliff is an entire rough of metaphors and similes that we can use to describe a bunch of people who say they will due themselves economic calm
on this matter of principle.
JOE TWYMAN, DIRECTOR OF POLITICAL POLLING, YOUGOV: Well it's not the only case in British politics or indeed well politics that people are being
convinced to vote in spite to go in economic circumstances.
And this is really just repeating what we saw at the time of the E.U. referendum last year where sizable proportion of people said that they felt
that voting to leave the E.U. would mean that Britain's economic situation won't be damage and yet they still did it. And even in most cases where
people thought their own economic situation won't be damage, they still did it, because its -- for a lot of people its not just about economic issues
or cultural or social, its about all of these things and Brexit jumps all of them.
QUEST: Right. And I think the important thing to make clear there is that they voted on a matter of principle in that sense on the idea of leaving
the union come what may.
TWYMAN: Yes, that's right. What was most important for people at least in the survey and of course it is just a hypothetical survey experiment on
what's most important to people was that Britain did leave so that we could turn the arguments that were made by the lead voters were, yes, economic
trouble may arrive but it will be our responsibility and we could take that control. That was what we heard time and again during the campaign. And
so perhaps those prices are being resonate to the results.
QUEST: Now, I realize you didn't do a survey on my next question to you, but from what you know of those who have done a survey, because the common
view is always and if the referendum was held tomorrow the Britain would vote in the opposite direction and that they'll be able a quite large
majority in favor of say -- of staying in E.U. Do you by that?
TWYMAN: Well, I'm delight to say we have done a survey on that.
TWYMAN: And what it shows is that actually the biggest have move virtually not at all since the referendum move last time. It was very close, 52-48
back in June of 2016. And if it so -- if the referendum will hold today, it would most likely to be very close to that.
It may sneak in favor of staying. It may sneak in favor of leaving. But it certainly wouldn't be overwhelming in either direction because they've
really hasn't been that much change in either direction with people moving from leave to remain or remain to leave. And what it has been happening,
they've cancelled each out. The reason for that is very little has actually happened.
Yes, we have the negotiations over Brexit, we have the debate and the -- and things have started. But we still remain members of the European Union
and very little has actually changed. And so what happens, it's unlikely that we see much movement.
QUEST: Joe, excellent to have you on tonight. Thank you. Much appreciated. Thank you.
QUEST: As we continue tonight, Usain Bolt runs his final race on Sunday. The racing icon speaks to CNN and tells us the sport world perish if it
realize on one man.
[16:51:18] QUEST: Within the definition of Year-End Devenir, professional athletic Usain Bolt, known as the fastest man in the world, he's confident
of winning his final competition race on Sunday.
The Lightning Bolt is a tracking field icon. Eight Olympic gold medals. The world that caught in the 100 and 200 meters sprints. He's also been a
vast businessman by making one of the richest celebrities of the world.
The Jamaican has (INAUDIBLE) sponsorship deals, drinks came often, and the cherry (ph) on the top he even has his own emoji. I got spoke to Amanda
Davies a short time ago ahead of the IWF World Championships in London.
USAIN BOLT, EIGHT TIMES OLYMPIAN GOLD CHAMPION: I never want at any point anyone want to lose on (INAUDIBLE). They never -- always help you in --
the moment you start to doubt yourself, so that's when you actually lose. I never doubt myself and my ability and the ability of my coach. So, for
me I'm confident on running.
AMANDA DAVIES, CNN INTERNATIONAL CORRESPONDENT: Are you feeling more or less pressure? Is there a little bit of you that -- which you haven't
announce that this is going to be the farewell?
BOLT: No. No. Listen, I look at it just like any other championship. I'm here to compete. I'm here to win as always. I'm coming in to this
championship prepared and then I have to go. So, I'm going to stick with that.
DAVIES: A little bit risky, doesn't it? Aiming for --
BOLT: Risky if you have no confident. If you have no confident and so then it's risky.
DAVIES: What is the moment that in your mind you're picturing of the end of your career?
BOLT: I'm here. I don't know the picture in my mind. It's just going on when claiming my best. I sort of realizing that this is it. I don't have
to train one more day if I don't want to, you know what I mean? So, I think that's the moment -- that's the thing I'm thinking. Just laying in
bed looking at the ceiling and saying this is it, you know, I mean, so, yes.
DAVIES: Would that be fair, do you think?
BOLT: It's all depends on all the crowd reaction, you know what I mean? If they cheer a lot then they want me to, so I'll be happy. What if they
react in different way? Then, it might be a little bit emotional. But, I don't think I get emotional with that kind. To some reason I'm not that
kind of person.
DAVIES: Given we know your love about that, the commitment is so, so confidently, you know, with such love about the sport that has given you so
much. How confidence are you that it can carry on without this?
BOLT: I think it's all about the athletes as I have said it. The athletes really on the sun where, you know, the sport is at and what they need to do
then it will be fine, you know what I mean?
I think weight is really, weight of an acre (ph) could really pick up. Wayde is breaking more records. He is running fast. He's doing a lot of
sports, at first at young age also. He's 28 -- he's just 24, I think. So, for me I think he will take over without a doubt. He's basically wants to
be a sprinter, so, everyone wants to hopefully give him some fast time and get some energy back. And hopefully all that it sees -- see where they can
And one thing I hope is that at least understand that we have adulating problem. And if they consider in that way then sports will die. So,
hopefully they will understand that. Let us move forward and work hard and just be quick into it as much as possible.
DAVIES: Do you think one person can do it on their own?
BOLT: One person can help this kid scores up. But the kid score is alive. One person cannot do that. You know what I mean? We'll need still those,
of course everybody in the sports on this time that if they don't stop, then sports will go, you know what I mean? Because now we're in the
transition phase, you know what I mean, when sports actually looking for somebody else.
And if they don't understand that and they start going backwards, then good thing sports will be in terms of trouble. But, if they will go forward and
with performance and they keep enjoying watching than the last one then, sports will developing it better and then more and more athletes will start
producing that value and then transfer.
[16:55:07] QUEST: Usain Bolt, fascinating to me. The man as I was able to do. And, of course, we'll have joy, yes. It was (INAUDIBLE). Anyway,
whichever way it was, fascinating to watch to get a chance to do that.
Join me at the podcast. You can now download our show as a podcast and it's entirety with all the domain (ph) provided. And you can also see it
through CNN.com/podcast. We have our "Profitable Moment" after break
QUEST: Tonight's "Profitable Moment," S&P and Dow Jones has announced that companies like SNAP would no longer be eligible for their major market
indexes, because SNAP has a multiple class of voting rights and in that case it doesn't give any voting rights at all. None of this is to be
applauded, if companies aren't prepared to give Shell those voting rights, they'll make sure it wouldn't be allowed to be in the major industries.
However, what I found odd was that S&P has grand fall but in to the S&P 500 Alphabet, Facebook, VICOM, 21st Century Fox, all those that have multiple
voting classes. It seems a bit hypocritical to say. If you're already on the inside you can stay, but no new ones can arrive.
After all, it's really very simple. It's a matter of principle. And if the principle is good enough for the new comers, then they should have
kicked out. However disruptive it might have been, there isn't that already there. Except they'll never do that, the things like Alphabet and
And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you up to hours ahead, I hope quick drop for devil. See