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QUEST MEANS BUSINESS

Apple Is Largely To Blame For Those Losses; Its Stock Is Having Its Worst Day In Years After Week Earnings; Trump Speaks To Reporters Ahead Of Midterm Rallies; Jobs Numbers, Quarter Of A Million Jobs Created Across All Sectors And Most Importantly, Wages Up By More Than 3 Percent; Mike Pompeo: Eight Oil Importers to Get Exemptions from Iran Sanctions; Trump Rallying Republicans in Two States Friday; Obama Campaigns for Democratic Candidate in Florida; U.K. Police Investigate Claims of Anti-Semitism in Labor Party; Actor Alec Baldwin Arrested for Assault; Trump Confirms Meeting with Chinese President in a Few Weeks Time Over Trade Talks; Democrat in West Virginia Seeks Midterms Upset in the Coal-Producing State; Investors React to Jobs Report, Apple and Trump. Aired: 3-4p ET

Aired November 2, 2018 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


PAULA NEWTON, CORRESPONDENT, CNN: You can see the big board there, it is paring its losses now that the Trump administration says it is willing to

make a deal with China. This is what's driving the day on Friday, November the 2nd. The Friday feel good factor, it slipped away a little bit over

doubts of that US trade deal, but things are clearer that perhaps the Trump administration wants a deal.

Then there was a strong jobs report. It gives Donald Trump a boost right before those all-important midterms. And from trade wars to chip wars,

Beijing and Washington clash over computers. Live from the New York Stock Exchange, I'm Paula Newton, and this is "Quest Means Business."

Okay, it is the last hour of trading and true to form, you cannot keep your eye off of this board. The Dow has come off the lows of the day, but it is

still down, as you can see there triple digits. And the reason was that when the President said that perhaps there was a deal to be made on China,

stocks kind of paired those losses, as I was saying.

The big story today, Apple is largely to blame for those losses; its stock is having its worst day in years after week earnings. Apple's market cap

dipped below that key $1 trillion mark, and that was a pushing on all of those stocks adding a lot of pressure. Now, in the meantime, that strong

jobs report, 250,000 jobs added in October. Stellar no matter which way you slice it. What was key here, though was is it was the strongest wage

growth since 2009. A second note here, this was a classic case of buy the rumor, sell the news. What do I mean?

A report from Bloomberg had said that President Trump had asked Cabinet officials to draft potential terms of a trade deal with China. Then the

President's top economic advisor later said no deal is imminent. Now, that could still be true, but in the meantime, moments ago as I was telling you,

President Trump said he believed a great trade deal with China is likely.

Joining me now is Julia Coronado, she is founder of MacroPolicy Perspectives. You wouldn't blame anyone from not being able to make sense

of these market moves. I want to go first though to those jobs numbers. I mean, absolutely stellar and it has to be said, those numbers really

deserve an exclamation point at the end of them, and yet what's so nagging at this market?

Julia, can you hear me? It's Paula Newton at the New York Stock Exchange.

JULIA CORONADO, FOUNDER, MACRO POLICY PERSPECTIVES: Yes, I can.

NEWTON: Okay, so I was just saying those job numbers are absolutely incredible, but what is still nagging at this jobs market and what is

nagging at global growth?

CORONADO: Well, what's nagging is that we have seen the global economy slow down, and so we've seen increased turbulence in markets and in

economies overseas that is important for US companies who make more than half their profits overseas. So that's one reason for concern.

And of course the trade conflicts that we're seeing only make that worse. The uncertainty is high. It's hard for companies to make decisions about

long-term capital planning and we're starting to see that in the earnings guidance, and I think that's where the markets are starting to finally

internalize that it's not this kind of this "have your cake and eat it, too" scenario with lots of tax cuts and fiscal stimulus, permanently low

interest rates and no impact from trade wars.

That's kind of where we were priced earlier this year, and I think markets are starting to reprice to a more realistic scenario where rates are going

to be a bit higher and there is going to be some kind of an impact from trade conflict either through margins or inflation.

NEWTON: Right.

CORONADO: And so there is some (inaudible) about that.

NEWTON: Right. Julia, I'm just going to stop you there. The President was just speaking and we're going to go to that now.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, but we'll let you know on Tuesday night. You'll know before I will, I suspect. I will say we had

tremendous job numbers today. It was just released - 250,000 new jobs created in the month of October. That was shocking for a lot of people.

That was a tremendous number by any standard and that's despite the hurricanes. The hurricanes normally have a big impact, and I'm sure these

hurricanes, they were massive, they had a big impact.

[15:05:01]

TRUMP: But - so the 250,000 new jobs in October was an incredible number. We also had a wage increase of 3.1%. That's like a perfect increase. It's

an incredible number, but it's a perfect increase. So the country is doing, I think maybe you could say better than it's ever done. We have a

lot of new companies moving into the United States, and that's where we're letting people in. We're letting them in based on merit. We need workers.

We need people to come in at 3.7%, which was also announced this morning, 250,000 jobs, 3.7% and 3.1% or so wage increase.

It's like really unbelievable numbers. So that just came out. I'm sure you people know about that.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Sure, I would, sure.

UNIDENTIFIED MALE: Mr. President (inaudible).

TRUMP: They won't have to fire. What I don't want is I don't want these people throwing rocks. It's turned out - in fact, it was just announced by

Homeland Security, you have in just certain areas over 300 people that they know are trouble. What they did to the Mexican military is a disgrace.

They hit them with rocks. Some were very seriously injured, and they were throwing rocks in their face. They do that with us, they're going to be

arrested. There's going to be problems.

I didn't say shoot. I didn't say shoot, but they do that with us, they're going to be arrested for a long time.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: We will arrest them. But ICE and Border Patrol is there with the military.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: Which are you talking about? Who?

UNIDENTIFIED MALE: (Inaudible).

TRUMP: You know who's going to determine that? The Supreme Court of the United States. The Supreme Court will determine that. The Supreme Court

is going to determine that. Many, many people feel that. Yes, go ahead.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: We've had very good discussions with China. We're getting much closer to doing something. They very much want to make a deal. As you

know, their economy went way down since we've been doing this skirmish. I spoke with President Xi yesterday. They very much want to make a deal. I

think we'll make a deal with China and I think it'll be a very fair deal for everybody, but it will be a good deal for the United States.

UNIDENTIFIED MALE: Mr. President (inaudible) ...

TRUMP: Wait, say it.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Well, we're going to meet at the G-20. We're going to have dinner. President Xi and I have agreed to meet at the G-20. We'll be having

dinner. We will be discussing it, but I think a very good deal will be made with China. They want to make it very badly. We want to make a deal

if we can and a lot of progress has been made, a lot of progress.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: And they understand that if a deal isn't made, we're doing very well the way we're doing it right now. You understand that - $250 billion

at 25%, and it could be elevated by another $267 billion at 25% or more. So we're doing very well. But I believe - I know they want to make a deal.

They've been hit very hard. Their economy has been very, very bad. I will say this, if we can make the right deal for this country, and also they're

going to make the right deal for them - if we can open up China and make it fair for the first time ever. This should have been done years ago by

other Presidents, but it wasn't. I am very willing to do it. But China very much wants to make a deal.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Who was arrested?

UNIDENTIFIED MALE: (Inaudible).

TRUMP: What?

UNIDENTIFIED MALE: (Inaudible).

TRUMP: I wish him luck.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: No, no, no. But if our soldiers or border patrollers are going to be hit in the face with rocks, we're going to arrest those people. That

doesn't mean shoot them, but we're going to arrest those people quickly and for a long period of time.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Everything we're doing is totally legal. It's all gone through the courts, but we have one of the few systems where instead of telling people

you can't come in, we take them in and we have to bring them through a court system.

[15:10:07]

TRUMP: It is the most ridiculous system in the world. It's obsolete, but that's not the problem. The problem is it's a stupid system, and it

doesn't work. And the Democrats and the Republicans could change it immediately. We could do it in one day. We could have it fixed, but the

Democrats don't want to do it because they're playing politics and actually I think it's very bad politics because the people of this country know

what's going on better than they do.

And you know what? We could fix our immigration system in one day if we could sit down with them, but they don't want to do it because they want

open borders and open borders mean crime. They want - they want those people coming up by the thousands and, you know, honestly they always have

come up. They want them to pour into our country.

And in the group - and you just saw the report that came out - you have a lot of bad people. You have people that are criminals, you have people

with records, you have people with criminal records. We could fix this system so quickly, so easily, but we need some Democrat votes or vote all

Republican. If we had more Republicans, it would be fixed immediately.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Say it.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: That's right, sanctions start in Iran. They're very serious sanctions. They're very big. They'll be elevated from there, but as you

know sanctions are starting on Iran, and, you know, Iran is taking a very big hit. The country is not the same country as when I started almost two

years ago.

Iran is a much different country since I terminated that deal. That was one of the most ridiculous deals ever made by any country at any time, the

Iran nuclear deal. But sanctions very much are elevated as of you know when, next week.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: The Democrats never had a bipartisan agreement. They're trying to say that. They never had - then tell them to come around and see me. They

had an agreement that was a one-sided agreement that I would never approve. You've got to get rid of catch and release. You've got to get rid of chain

migration. You've got to get rid of the visa lottery. They never agreed to any of that. Ask them if they've agreed. They've never agreed to any

of that.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Well, I hope they won't. We're going to see. I hope they won't. But you know what? We're not going to stand for people doing what they did

to the Mexican military and to the Mexican police. What they did do those people, they were very badly hurt, very badly injured -- military and the

police -- what they did with rocks being thrown in their faces, not going to happen to our soldiers.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: No, no, you know what? You're creating violence by your questions. You are creating, you. And also a lot of the reporters are creating

violence by not writing the truth. The fake news is creating violence. And you know what? The people that support Trump and the people that

support us, which is a lot of people, most people, many people. Those people know when a story is true, and they know when a story is false. And

I'll tell you what, if the media would write correctly and write accurately and write fairly, you'd have a lot less violence in the country.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: Well, we're going to see. I think we're doing very well. Certainly we're doing very well on the Senate, which is obviously very

important. And I think we're going to do also well in the House. We're going to see. I can only say this, the House is a lot of stops.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: That's your next question? How many questions do you have? No more.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: We're doing a perfect executive order and the border is closed to these people. They're not coming in. They will go through the system and

then they'll be shipped back depending on what happens with asylum.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Just so you understand, Honduras, El Salvador - all of these countries they're getting millions and millions of dollars, they're doing

nothing for us. They're doing nothing.

[15:15:10]

TRUMP: They let their people come up and they form their caravans in the country. They are doing nothing. We're paying them hundreds of millions

of dollars. Guess what? That money's going to stop very soon. Thank you all very much.

NEWTON: Okay, you have been listening to President Donald Trump. That was just moments ago on the White House lawn. I'll remind everyone, we are

four days before midterm elections in the United States. The majority of that conversation was actually about immigration. But the President was

actually riding high on some very good jobs numbers as well.

I want to talk to you about those top issues for voters. And as you can imagine, of course, it varies from state to state. Here's what's

interesting, immigration still tops the list in places like Arizona and Texas. For Florida, it's healthcare, the economy and jobs.

Generally, though, do follow close behind. CNN's Mark Preston is here. He is our senior political analyst.

I mean, Mark, look, the Trump administration, these are extraordinary numbers we had today. Jobs numbers, quarter of a million jobs created

across all sectors and most importantly, wages up by more than 3%. First time in almost a decade. People are feeling good, and yet the Trump

administration, they've changed the channel on this haven't they? It's all about immigration?

MARK PRESTON, SENIOR POLITICAL ANALYST, CNN: Yes, they have. And really, I think it's important and was pointed out by your previous guest that as you

have emphasized that that last number is really, really important where you see wage increase here in the United States.

What that does is that it removes the political tool that Democrats use against Republicans when we talk about low unemployment here in the US.

Democrats will say that's true, sure, that's true, you have low unemployment, but why you have that is because you are creating low level

paying jobs. And people need any kind of job that they can get.

In addition, too, it's interesting to see what the President did right there. He goes out on a day, Paula, as you so accurately noted, really

important big day, big exclamation point day for President Trump and his administration, and he takes it off-message and he goes right back to the

one tool that he really knows how to use effectively, and that is to create a lot of chaos and also to create a lot of controversy. That's his tool.

And the issue is immigration. And that's what we've seen him pound for the last few days. He's going to do it in these closing days heading into

Tuesday's election.

NEWTON: And Mark, we do have to talk more about just kind of some of the jobs numbers and we'll talk about China trade. But I cannot let the

immigration thing go. To have the President on the White House lawn say, "No, we're not going to shoot them," period, but we are -go ahead.

PRESTON: No, no, as you say. No, we're not going to shoot them, we're going arrest them. Except yesterday he said, "We're going to shoot them."

So the idea that he's actually playing with the truthful facts even on this issue when it's pretty plain what he said yesterday is that in itself is

astounding. I'm sorry, Paula, to interrupt, but it just is astounding and then he goes on to criticize the news media and say that we're the ones who

are inciting violence. I mean, what a weird world we're in right now.

NEWTON: Yes, I just couldn't let that go. I mean, really in terms of what we're talking about especially when he thinks these people have a legal

right to enter and claim asylum and obviously, goes to the justices in that way.

Okay, back to those jobs numbers and the issue also with China. The President did talk quite a bit about trying to make a deal with China.

It's interesting, Mark, if you were here with me, you would see the market goes up, the market goes down, the market goes up - all based on what

they're saying about China. Do you think at the end of the day, after midterms that they will look for that opening with China to make a deal?

Because they have still continued that tough talk with China. He does have a meeting with Xi Jinping, he confirmed in just a few weeks at the G-20.

PRESTON: Listen, China is one of these issues where the President loves to talk tough. But he does all of a sudden, and we've seen this happening

many times come back and say, "Oh, we're going to get along. They're helping us with North Korea and we're going to get a good trade deal in

place."

I think in the end, we will see a trade deal in place and it is interesting to your point when you're sitting there and you're seeing the market move

based upon the President's words, I don't think there's been a President who has created more uncertainty, although it has been good uncertainty as

of late for the market, in the market than any other President than Donald Trump.

I mean, whatever he says, he may act upon it, he may actually do it, and that in itself can move the markets, so that's just been astounding.

NEWTON: It's astounding and of course, the Trump administration maintains that it's actually good negotiations as well. We see where it will lead

especially in two or three weeks with the midterms behind him and he'll be heading to that meeting in Argentina. Mark Preston, standing by for us.

We appreciate it. Thank you so much.

PRESTON: Thanks, Paula.

NEWTON: Now, it has not been a happy Friday as we've been saying for those US markets. All three indices are still slipping into the red as hopes for

that deal with China were rising and falling. We will have much more on all the market action when we return.

[15:20:01]

NEWTON: Okay, shares on Wall Street have now pared those losses after President Trump said, you know, there could be a trade deal with China.

You heard Donald Trump just earlier say he expected the US to reach some kind of trade deal. Now, we've got to tell you this is quite a seesaw day.

First rising on trade optimism and then falling around lunchtime after the top White House economic advisor denied any progress on drafting a trade

deal with China. Take a listen.

(BEGIN VIDEO CLIP)

LARRY KUDLWO, SENIOR ECONOMIC ADVISER: There's no mass movement, there's no huge thing. We're not on the cusp of a deal. As the President said,

you know, we'd like to talk to them about it, but they may not be ready. I mean, that's been the unsatisfactory response from China.

(END VIDEO CLIP)

NEWTON: Okay, apparently now we're dealing with a different story. Dutch Ruppersberger is a Democratic running for reelection on Tuesday in

Maryland, he sits on the House Appropriations Committee and called on the Trump administration to just go a little harder on China and not go easy on

companies like ZTE. It says on your Twitter handle that o can call you Dutch, so I'm going to call you Dutch, okay, Congressman.

CHARLES ALBERT "DUTCH" RUPPERSBERGER, US REPRESENTATIVE, MARYLAND, DEMOCRAT: Yes, everybody calls me - where they like Ruppersberger, they go

Dutch. You pay, too, if you go Dutch. Go ahead.

NEWTON: Sounds good. And right now, we are going to go all in on China. We've had a lot of back and forth maneuvering here. You know as well as I

do what's hanging in the balance here and that's intellectual property and whether or not the Trump administration is going to get what they want.

They kind of caved on companies, the telecommunications company like ZTE, the Chinese one earlier. What do you expect the Trump administration to do

here and what do you want them to do?

RUPPERSBERGER: Well, what I want them to do, remember my background is national security. I was the Ranking Member in the Intelligence Committee

and now, I'm on Defense Appropriations Committee. And my priority is clearly national security. And the way I see it companies like ZTE and

Fujian Jinhua could affect our national security. They can steal billions of dollars of information. But more importantly with their technology in

our country, they can also deal with our national security and steal information, our security information.

And they've been doing that as an example in Europe. Great Britain is having a serious problem with Huawei and ZTE in their own countries. As

far as the Chinese government being able to get information because their infrastructure is legally in their country.

[15:25:02]

NEWTON: Now, the Trump administration is talking a tough game with China. Are you saying that it's all talk and that you do not believe that when

push comes to shove, that there will actually be those intellectual property protections, national security protections in any trade deal with

China.

RUPPERSBERGER: Well, first thing, I think Trump has a different focus. His focus does not seem to be the national security as much as he's trying

to do a deal. And I think that he's doing some of the right things with China because China has taken advantage of us in a lot of different areas.

But the highest priority for our country and our constituents and our allies is national security. When the Chinese government can control

Huawei and ZTE and these companies, they fund them, and they're looking to get their networks all over the world so they can gain information.

It's been said by our trade representative just last year that China has stolen over $600 billion, not thousands or millions, billion dollars. Even

fertilizer companies that they are getting information because they compete with us with fertilizer. But my focus clearly here is national security

and to make sure we stop them. That's why I went over to Hong Kong, I met with the representatives of ZTE. And I said if you want to do business in

our country, then you do it our way and just like other countries do, you create an independent board of Americans so that we know we can protect our

country.

NEWTON: In terms of doing that though, and as you just said yourself, the Trump administration in good faith is trying to get out there and do

something where the Obama administration did not. But what does a good deal look like on intellectual property? Does this just outright saying

Chinese companies especially government sponsored ones can't do business in those sensitive areas in the United States?

RUPPERSBERGER: Let me give you an example, ZTE. Now, ZTE, we gave them sanctions because they were selling American components to other countries

and we found out they were actually selling some of our technology with our technology there to North Korea. So we put sanctions.

The Obama administration put sanctions on, and when Trump came in, he also continued with those sanctions. All of a sudden Trump, withdraws these

sanctions and the deal was that we, the United States, would get a billion dollars. That's not allowed for China. And coincidently, and I'm not

including or criticizing him completely, but as soon as he does this, his daughter ends up getting seven trademarks from China. And we have to be

concerned about conflicts of interest as it relates to international dealings with our country.

NEWTON: Okay. Before I let you go, and I don't think I'm being a savant by saying you are going to reelection on Tuesday and the polls show your

chances are pretty good, but if you could get to 35,000 feet for us, as a Democrat and say what is the hurdle there to really get to winning that

House, the Democrats getting back control of the House and I leave you with this - but you've got to explain - look, we've just had a day on Wall

Street like no other not because the market has gone up and down, but because of the stellar jobs number. If you're a voter going into that

booth on Tuesday, what tells you, "Yes, the Democrats are going to secure my economic future even though the Trump administration ..." Go ahead.

RUPPERSBERGER: The Democrats are going to get back to the basics. You look at Clinton. When Clinton raised the minimum wage, America did well,

middle class did well, they spent, and as a result of that, we had an actual surplus. I don't know if we'll ever have that again.

We need to look at the issues of -- the health issues, about pre-existing conditions. Again, when middle class does well, we all do well. I don't

have a problem with the tax break for business, but it needs to be more fair, not 81%. These are things we have to talk about the basics. Let

Trump - Trump is out there, the media is talking about him, and we have to talk about what we're going to do for our constituents.

And that's why we're doing so well at this point because of the actions that have occurred don't help middle class and it doesn't help our country.

Our country is doing okay, but the middle class is hurting and once they do well, the country does well.

NEWTON: Okay, and we will wait the votes on Tuesday with everyone else. Dutch, thanks so much.

RUPPERSBERGER: Okay.

NEWTON: Appreciate it.

RUPPERSBERGER: Good. Take care. Bye.

NEWTON: And we will be right back in a moment with the headlines.

(COMMERCIAL BREAK)

[15:30:00] NEWTON: Hello, I'm Paula Newton, and these are the headlines on CNN this hour. The U.S. Secretary of State says eight oil importers

will get temporary exemptions from Iranian sanctions. The EU as a whole though will not receive that exemption.

Mike Pompeo said the eight jurisdictions will be named Monday when the U.S. reimposes the sanctions on Iran. With just four days left until high

stakes elections that could shake up Congress, U.S. President Donald Trump is hitting the campaign trail in two states today to rally Republican

voters. Now, he's due to land in West Virginia any moment now, then later he heads to Indiana.

Barack Obama meantime is also on the campaign trail, the former U.S. president appeared at a rally for the Democratic candidate in the Florida

governor's race. Mr. Obama said next week's vote is a chance to end division.

(BEGIN VIDEO CLIP)

BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: In four days, you can be a check on that kind of behavior. In four days you can choose a bigger,

more prosperous, more generous vision of America.

(END VIDEO CLIP)

NEWTON: A bus crash in China that killed all 15 people onboard is being blamed on a fight. Police released this video of a woman hitting the

driver apparently after she missed her stop. The driver hit back before abruptly swerving into oncoming traffic and plunging over the side of the

bridge.

British police have opened an investigation into allegations of anti- Semitic hate crimes within the Labor Party. It comes after a dossier containing 45 different cases of alleged anti-Semitism was handed to

authorities. London's police commissioner says the Labor Party itself is not under investigation, but some cases within the dossier are being

examined.

New figures show the U.S. economy added 250,000 jobs in October, wages grew at a fast face since 2009. President Trump says if Americans want to keep

the momentum going, they need to vote Republican in next week's mid-term elections.

Actor Alec Baldwin has been arrested in Manhattan for assault according to the New York Police Department. Authorities say it was related to a

dispute over a parking spot. Baldwin is well-known for a number of starring roles, recently he has parodied President Donald Trump on late

night television "Saturday Night Live".

OK, returning to our top story now, we've heard conflicting messages from the president and his top economic adviser on the status trade talks with

China. Cnn's Sarah Westwood is at the White House, and perhaps you can clear some of this up. We're not exactly sure what the message that the

White House wanted to send on China trade talks today, but you know, the president confirmed he is meeting with the president of China in just a few

weeks.

[15:35:00] SARAH WESTWOOD, CNN WHITE HOUSE CORRESPONDENT: That's right, and President Trump today was trying to project optimism that there could

be some kind of breakthrough in trade talks with China. Obviously, those have stalled in recent months as both sides have imposed escalating tariffs

on each other's exports.

President Trump suggesting that perhaps if China and the U.S. could come to some kind of trade agreement, it would be extremely beneficial to the U.S.

economy, but he gave no details about what that kind of deal might look like. What kind of concessions he might be willing to make in exchange for

China's cooperation when it comes to trade terms. And the administration has continued its threats to impose additional sanctions against China if

Chinese negotiators don't come to the table.

So it's unclear exactly what is driving this supposed thaw in trade relations between the U.S. and China, and how much of that is being driven

by actual progress in those negotiations or by the president's desire to show some kind of evidence of progress ahead of us as you mentioned those

crucial midterm elections on Tuesday.

NEWTON: Yes, and that is key, certainly wants to see him optimistic, likely going into those midterms, Sarah, thanks so much, appreciate it.

Now, as we were just saying, the Trump administration continues to target China's trade practices. New indicts announced Thursday accused a state-

backed Chinese firm Fujian Jinhua of stealing trade secrets from U.S. chip maker Micron.

Now in a press statement on Thursday, Attorney General Jeff Sessions did not hold back.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL, UNITED STATES: We are here today to say enough is enough. We're not going to take it anymore. It's unacceptable.

It's time for China to join the community of lawful nations.

(END VIDEO CLIP)

NEWTON: Linley Gwennap is the president of the Linley Group, he joins me now live from Mountain View, California. And obviously, you've been

following us for quite some time. These were indictments that were unsealed and likely didn't come as a surprise to you.

But give us some insight because there are two schools of thought on this. One is that this about pure economic competition. At the end of the day,

the United States has leadership in this area, and they do not want China to overtake them or develop this kind of an industry.

And two, that no, this is about national security and that they cannot allow China for many different reasons to get in-roads in these businesses.

LINLEY GWENNAP, PRESIDENT, LINLEY GROUP: Yes, I think it is more an issue of economics. The product that Fujian Jinhua makes is memory chip D-RAM,

which just basically stores information. So it's not going to be something that could be used in and of itself to create a national security threat to

steal information from American companies.

But it's more an issue that this company and China could eventually become big enough to threaten micron as a U.S. D-RAM supplier.

NEWTON: Try to explain though to us exactly what's at stake here, because you know, it is an incredibly large industry even though it isn't that

visible.

GWENNAP: Yes, I mean, D-RAM industry worldwide is expected to reach $100 billion in revenue this year. So this is very big portion of the

semiconductor industry, and China has basically no share in that market today.

So China would very much like to be able to supply its own internal needs for D-RAM memory chips as well as potentially compete on the world stage.

NEWTON: And what's the U.S.' best hope though, in the sense of what do these indictments prove, and will China just not come up with a better,

stronger perhaps even more devious plan? Because it doesn't seem like they're letting up.

And all of the rhetoric that I'm sure that you've seen as well from the Chinese government, they say they intend to get into this industry no

matter what the United States does or says.

GWENNAP: Well, semiconductor technology is a very advanced technology, and even the efforts that China is making today and in this company Fujian

Jinhua is based on some very older versions of the technology.

Things that Micron was using perhaps eight to ten years ago. So it's going to take a lot of effort for China to become competitive in this market, and

they will be relying on U.S. companies to supply the machinery that makes those chips.

NEWTON: In terms of that, though, you know, China has been as I said very blatant about many things including artificial intelligence. You know,

they say that they want to control artificial intelligence and make it securely kept in our own hands.

That's completely different than the very mature industry that you just described. But if you're the Trump administration at this point, what can

you get? What can you negotiate at the table? They have these indictments, that's something that's handled obviously is with the Attorney General

there.

[15:40:00] But when you get then down to trade negotiations, is there anything that you can do that will wholeheartedly protect that industry

where the United States has leadership?

GWENNAP: I think the main thing that the U.S. needs to accomplish is to create a level playing field. If China can develop their own AI technology

or their own semiconductor technology, that's good for them. But what we don't want is for china to be stealing our intellectual property, to be

taking information from Micron as they're said to have done, and use that information to build their own factories.

So I think that's the critical thing that needs to be accomplished in these trade negotiations is to stop the stealing of intellectual property and

allow a level playing field between the two countries.

NEWTON: And as your best educated guess, do you think China is up for that in these negotiations?

GWENNAP: They are certainly resisting it as much as they can. But I think that in order to really become a player in the world economy, they need to

at least concede some amount of protection for intellectual property.

NEWTON: And I guess that that is the issue in terms of what these trade talks will boil down to. Really appreciate you going over the issues with

us, thanks.

GWENNAP: Not at all --

NEWTON: Now, coming up on QUEST MEANS BUSINESS, the price to pay for strong U.S. jobs numbers, it means seasonal workers can pick and choose.

More on the dilemma from retailers when we come back.

(COMMERCIAL BREAK)

NEWTON: And we are back for this last hour of trade at the New York Stock Exchange as the market continues down. All three indices are still down,

actually. That's despite the great labor market numbers that we had today. And the problem is that labor market could in fact be too strong for some

companies who may be having trouble hiring holiday workers. Clare Sebastian has more.

(BEGIN VIDEOTAPE)

JOE CARDAMONE, STORE MANAGER, JCPENNEY: You can do overnight for me?

UNIDENTIFIED FEMALE: Yes, I will.

CARDAMONE: Astounding, I see --

CLARE SEBASTIAN, CNN (voice-over): For Joe Cardamone; manager of JCPenney's Manhattan flagship --

CARDAMONE: Congratulations, welcome --

SEBASTIAN: The relief of seeing this turnout is palpable. This day could make or break his holiday season.

CARDAMONE: Because it is a tight job market out there, so for most JCPenney stores, it's getting ahead of the other retailers.

SEBASTIAN: JCPenney held its second-ever nationwide hiring event in mid- October, hoping to attract 39,000 people, and there's a new incentive, the chance to win a free vacation.

CARDAMONE: It's a dog fight out there, and I think whatever incentive you can give a new associate to stay around with you will always help.

[15:45:00] SEBASTIAN: A dog fight because this is not just the tightest labor market the U.S. has seen in almost half a century, it's also said to

be one of the busiest shopping seasons in years. Consultancy firm Challenger Gray and Christmas has so far recorded more than 700,000 job

announcements, the highest since they began tracking in 2012.

And one of the biggest dogs of all, Amazon just upped the stakes even further, offering a $15 minimum wage to all employees.

(on camera): Stores are really having to sell themselves, Target, for example, is offering $12 an hour and a $500 gift card for randomly selected

employees in an effort to hire 20 percent more people this year.

And Macy's says most of its seasonal hires will be eligible for a new bonus program.

(voice-over): And it's not just the retailers --

UNIDENTIFIED MALE: First of all, thank you for coming.

SEBASTIAN: Shipping giant UPS has rebranded its seasonal hiring event around Friday promising the chance of a permanent career.

STEFOND HARRIS, VICE PRESIDENT OF HUMAN RESOURCES, UPS: We started planning for holiday season 2018 the day after holiday season 2017. We

certainly anticipated that the unemployment rate was likely to go down and it was going to be even more competitive.

UNIDENTIFIED MALE: I mean, I ask you for a question --

SEBASTIAN: Another hiring trick is to target existing customers. Fifty seven-year-old Maritza Viruet found out JCPenney was hiring from a notice

on her receipt.

MARITZA VIRUET, JCPENNEY SEASONAL EMPLOYEE: Well, I shop here frequently, and now for the holidays I can stop in and spend my money here to work at

the same time.

SEBASTIAN: She'll be working in customer service; the front line of a festive shopping frenzy.

(END VIDEOTAPE)

NEWTON: Yes, Clare, thanks for bringing us that story. The retailers are certainly expecting a big season. And their sales are really in jeopardy,

right? If they can't find those right workers on time. And again, you said it, right? It's seasonal, they need the workers now and they need them to

work right through that holiday season.

SEBASTIAN: Right, Paula, this is exactly what brick and mortar has going for it over e-commerce. They need to have the seasonal associates in the

store to provide the kind of convenience and customer service that people are looking for. Otherwise frankly, they're just going to go to the likes

of Amazon.

And Amazon as we saw in the piece upped the ante with the wage hikes. That went into force just this week. And now JCPenney wouldn't tell us if

they're paying their seasonal associates anymore because of that. But I did talk to UPS, and they do say that in markets where the unemployment

rate is slightly lower than the national average, they may be upping their starting wages.

So pressure on all fronts, but really those strong numbers -- those strong jobs numbers playing out in real-time in stores just like this one.

NEWTON: Yes, they need those, the sweaters behind you off the mannequins and in the shopping banks, and that's not going to happen on its own. Now,

Clare Sebastian there, already in the holiday season we see it, thanks Clare, appreciate it.

Now, businesses are reporting, though, some of them are reporting a tough start to the holiday season. Apple warns holiday sales may miss

expectations. Shares were down sharply today making a lot of news, that was more than 7 percent right now as things stand.

UPS is also warning the shippers to brace for a strike. This couldn't be more ill-timed in the next two weeks. United workers and UPS' freight

division are set to walk off the job. Meantime, Alibaba has cut its revenue forecast, it's concerned about the growth slowdown in China and the

impact of that trade war we were talking about.

Alibaba's annual singles day event is in just nine days time, and we will be right back here on QUEST MEANS BUSINESSS with more in a moment.

[15:50:00] (COMMERCIAL BREAK)

NEWTON: The U.S. House of Representatives could change hands after Tuesday's midterm elections. One Democratic candidate who is hoping for an

upset in the very important state of West Virginia. It is a coal country heartland that went overwhelmingly for Donald Trump in 2016.

Now, he's signing up teachers to help him try and score an underdog victory. Eric Bradner has more.

(BEGIN VIDEOTAPE)

RICHARD OJEDA, DEMOCRATIC CANDIDATE FOR U.S. CONGRESS: We're on the richest scale in the United States of America. It wasn't us that said

that, it was the energy companies who come to West Virginia and stood in our capitol and said, you could be the next Saudi Arabia. And they wanted

it to be that way.

We have ten people driving Lamborghinis and the rest of us are starving to death. I'm trying to create an opportunity so when our children graduate

from high school and college, they don't have to leave. I mean, think about that right now --

UNIDENTIFIED FEMALE: Oh, I have to leave.

OJEDA: That's right, well --

ERIC BRADNER, CNN NATIONAL POLITICAL REPORTER (voice-over): Democratic State Senator Richard Ojeda is running for U.S. Congress against Republican

state delegate Carol Miller in West Virginia's third district. The third district is vast, stretches along the southern part of the state and has a

long complicated history with coal mining. Nearly one in five residents live at or below the poverty level.

OJEDA: We're tired of giving everything that we have underneath our feet away so that people can become millionaires and billionaires that aren't

from this state, and in the end we are nothing better.

BRADNER: Democrats are hoping the districts could help them win back the house in November. Here's where it gets tricky. In the 2016 presidential

election, the third district went overwhelmingly for Trump, so did Ojeda.

OJEDA: I supported Trump because I looked out my window and I saw my neighbors and I saw my family and friends and they were struggling, OK? I

give you my thumbs up in terms of his capabilities to help the coal industry, because that's exactly what's happening.

And these people have been working ever since he took office. I'm not happy that I've got an opioid epidemic and I'm getting nothing. I'm not

happy that I've got people at McDowell County relying on a food bank.

I'm a little angry that right now it seems that all we -- it's a circus. It's all about Twitter and tweets. Stop fighting with Rosie O'Donnell.

BRADNER: To understand how Ojeda as a Democrat became a contender deep in Trump country, you have to go back to January of this year.

OJEDA: I'm telling you right now, we're not listening to our teachers. I told the legislators you messed up. I told them, I said you pissed off

teachers and they're smarter than you are.

Our good teachers are fleeing to the border states because they get offered more pay.

(CHEERS)

It wasn't a couple days later, it was 55 strong standing at the capitol shoulder-to-shoulder refusing to take a step back.

(CHANTING)

UNIDENTIFIED FEMALE: Fifty five united, 55 strong!

BRADNER: Teachers had become the new coal miners in West Virginia. A group of passionate voters fighting for their livelihood.

UNIDENTIFIED FEMALE: People are scared, when you're talking about going on strike and walking out of your job, even though you feel it's for a just

course, there's always a huge degree of uncertainty there. Will I lose my job? Will I be able to feed my family?

Sometimes we felt like we didn't have a spokesperson and then Ojeda came along. And I think what's so captivating about Ojeda is that he's

authentic and he's real and he's one of us.

UNIDENTIFIED MALE: Thank you, my wife appreciates you.

OJEDA: I'm glad to help. Teachers will go to the polls, they want to take their families to the polls. And a lot of people out there like the unions

that stood with the teachers, they're going to take their families to the polls, too. I'm telling you right now, it's going to be a game changer.

Brother, thanks --

UNIDENTIFIED MALE: Appreciate you brother.

OJEDA: Airborne.

BRADNER: Ojeda is a retired army major, and that's not lost here among conservative voters in West Virginia.

UNIDENTIFIED MALE: Hi, airborne, thank you.

OJEDA: The Democratic Party where I come from is the party that stands up for the working class citizens. It's the party that takes care of our

sick, taking care of our veterans. If I'm going to send you away and I'm going to break you, then I'm going to fix you when you come home.

BRADNER: But will his service and the teacher unions be enough to get him elected in November? There's been little polling in the district, but the

fact that the race is even close is a surprise.

OJEDA: You want to come into our state and take what belongs to us and you don't want to do for us. In the United States of America, let's help

everybody.

[15:55:00] You know, let's try to let everyone be prosperous. We have prosperity on the East and West Coast. We got it. How can we bridge the

gap to middle America and Appalachia so that we can have something.

(END VIDEOTAPE)

NEWTON: So there's a candidate there who says the midterms on Tuesday will be a game changer. You can come right here to Cnn for full election

coverage. We're going to look into the markets here again and see how they are doing. They had those losses and with just a few minutes left in the

trading day, we'll be back and give you a market recap.

(COMMERCIAL BREAK)

NEWTON: Oh, we're just a few more moments here before the markets close for the day and the week as you can see there, the Dow is off its lows of

the day, down about 145 points now, and that's still triple digits. The Nasdaq meantime is off more than 1 percent pretty much in that territory

all day.

Now, a strong jobs report drove early gains, wages in the United States key here grew at their fastest pace since 2009. Mixed messages though on trade

from the Trump administration, and that kept investors guessing throughout the entire day.

The Dow came off the lows of that session after President Trump said he thinks the U.S. will make a great trade deal with China. Now, one

consistent downward factor today was Apple though. It is single-handedly keeping the Dow in the red.

Apple's market value has slipped under that key $1 trillion mark. The company says its holiday sales may not meet Wall Street's expectations.

I'm not sure if the streets here, you can hear the noise there, they're getting ready for the closing bell that's met all the expectations and

there we go.

(BELL RINGING)

That's QUEST MEANS BUSINESS, I am Paula Newton at the New York Exchange, "THE LEAD" with Jake Tapper is next.

END