Return to Transcripts main page
QUEST MEANS BUSINESS
Tense Posturing Between The U.S. And Iran; The S&P 500 Touches A New High Despite A Turbulent Week; Protesters Are Back On The Streets Of Hong Kong. Aired 3-4p ET
Aired June 21, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN INTERNATIONAL ANCHOR: All right, we are inches and I seriously mean inches away from an all-time high here on the Dow.
The markets basically completely shrugging off all the geopolitical tensions we are seeing between the United States and Iran. The focus being
really on this idea that the Fed is likely going to lower interest rates in July in just about a month from now. Those are the markets, my friends and
these are the reasons why.
Global airlines are taking evasive action as regulators warn about Iranian airspace. Middle East tensions and a huge refinery explosion in
Pennsylvania make for a dramatic day when it comes to the energy markets. And stocks could finish the hour at all-time highs.
As I mentioned, the Dow has 60 minutes to hit its first record close so far this year.
Live from the world's financial capital here in New York City. It is Friday, June 21st, the start of summer by the way, I'm Zain Asher and this
is QUEST MEANS BUSINESS.
Good evening, everyone. I'm Zain Asher, while the world watches the increasingly tense posturing between the U.S. and Iran, Wall Street appears
unmoved by what is unfolding in the Gulf.
In the last hour of trade, markets adjust a fraction away from all-time highs with traders seemingly basically unconcerned by the standoff between
Washington and Tehran.
The S&P 500 is at all-time highs, I'm told. Today, President Trump told reporters he changed his mind on ordering a strike on Iran with just 10
minutes to spare. I want you to listen to this.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: They came in they said, "Sir, we're ready to go, we'd like a decision." I said, "I want to know
something before you go. How many people will be killed?" In this case, Iranians. I said, "How many people are going to be killed?" "Sir, I'd
like to get back to you on that." Great people, these Generals. They said -- came back and said, "Sir, approximately 150."
And I thought about it for a second. I said, "You know what, they shot down an unmanned drone -- a plane," whatever you want to call it, " ... and
here we are sitting with 150 dead people." That would have taken place probably within a half an hour after I said, "Go ahead." And I didn't like
it. I didn't think it was -- I didn't think it was proportionate.
(END VIDEO CLIP)
ASHER: Ryan Browne is at the Pentagon for us. So Ryan, you just heard the President there saying that he didn't think that the strikes that were
planned would have been proportionate. What do we know specifically about what was targeted? What was discussed there?
RYAN BROWNE, CNN PENTAGON REPORTER: Well, Zain, officials telling me that the targets were intended to be proportionate. The targets that were
selected were missile sites and radar sites that had been involved in the shoot down at that U.S. RQ4 surveillance drone. So the idea was this would
be seen as a proportionate response, the downing of that drone would be to target the very missile sites and radar installations that were involved.
However, those type of sites are operated on a 24-hour basis by the Iranian military. There's no nine to five. So there will always be Iranian
personnel at those sites, which likely led to that casualty estimate referenced by the President.
ASHER: So could these strikes, do you think Ryan, still go ahead?
BROWNE: Well, the U.S. military is very much postured to conduct an operation if so ordered. You heard the President there kind of hinting
that he was no longer seeking retaliatory strike.
However, the military had been increasing its presence in the region in the run up to these recent events. In fact, they had been warning for some
time about Iranian threats and pointing to the attack on oil tankers, pointing to some proxy operations by Iranian proxy militias in the region.
So they had been increasing their presence adding fighters, bombers, additional naval vessels, all of which could carry out a strike if ordered.
However, the President is seeming to strike a different tone. You know, initially he called the Iranian attack on the drone, a big mistake, taking
a kind of a hard line. He now seems to be a little bit less keen on some kind of retaliation strike, but the military very much postured to conduct
an operation if so ordered.
ASHER: All right, Ryan Browne, live for us there at the Pentagon, thank you so much. Another potential close call. Iran says they refrained from
shooting down a U.S. aircraft. Tehran says Tehran says a P8 spy plane like this one you see here was in the vicinity on the downed drone, but they
chose not to shoot at it.
Iran claims there are actually 35 people on board while the U.S. says that this type of plane, this type of spy plane could actually only carry nine
people. Fred Pleitgen is in Tehran for us.
[15:05:08] ASHER: So Fred, how close were we here to American servicemen being killed?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Oh, I think that potentially, it was extremely close, if you believe what the Iranian
said and the U.S. side also came out and actually confirmed that yes, at that time, there was a P8, that was flying in that area.
And essentially what the Iranians were saying is that they had this P8 in their sight, but decided not to shoot it down. And I think one of the
things that they were really trying to convey when they said that is they were really, maybe not directly responding, but certainly taking reference
to the fact that President Trump had been saying that he believed that the shooting down of the drone was some sort of mistake.
The Iranians though are saying they know exactly what's flying around outside and as they were saying close to their airspace and that their
weapons are extremely lethal.
Today also, Zain, for the first time, the Iranians came out and showed the debris from that drone that they shot down, or the alleged debris from that
drone that they shot that was quite interesting to see, because it was really only very small pieces that they were able to show.
They said it was the outer shell of the drone, and they said that was for two reasons. First of all, they said they shot it down while it was at
50,000 feet that's extremely high. That's higher than commercial airliners fly.
But they also said that the reason why they only had fairly small pieces is because these were the pieces that were floating in their territorial
waters, as they said, which they say once again, proves their point from Iran's perspective that the drone had violated their airspace.
Now, one of the other interesting things that they said is they said they actually issued several warnings to the UAV and at those warnings were not
heeded and only then was it shot down. Here is what they said.
(BEGIN VIDEO CLIP)
AMIR ALI HAJIZADEH, AEROSPACE FORCE COMMANDER, IRGC (through translator): Our colleagues at the Army units issued warnings four times before we hit
the drone, we had no other way but to stop it from advancing into our territory.
Now the U.S. lost one of the most expensive and advanced spy UAVs.
Next to the UAV, an American spy airplane with 35 people on board was flying. We could have hit the manned aircraft as well, and it was actually
our right to shoot down that plane, but we did not do so.
(END VIDEO CLIP)
PLEITGEN: Zain, that was the head of the Iranian Revolutionary Guard, the Islamic Revolutionary Guard Aerospace for us, also talking about that
incident with that P8 where they said they refrained from shooting that down.
We always have to mention though, Zain, the Americans -- and continue to have a very different view of things. They still say that that drone was
flying in an international airspace over the Strait of Hormuz. They still say that this was an unprovoked aggression on the part of the Iranians.
The Iranians, however, for their part, after President Trump did not go through with those strikes have said look, they don't believe that there
would have been a reason or justification for strikes in the first place, and they also said this is the spokesman for Iran's National Security
Council that if there would have been strikes on Iran, that the Iranians would have had a very firm response, Zain.
ASHER: So Fred, here we are. And we're in a situation whereby the U.S. or the U.S. President has come out and said, "Listen, I could have conducted
strikes that would have killed 150 people, but I chose not to," the Iranians have now come out and said, "We could have also conducted strikes
that would have shut down a P8 spy plane that may have killed several people, but we chose not to."
So is this a moment of their taunt then in terms of the tensions between the United States and Iran?
PLEITGEN: Well, it certainly seems as though both sides may have, if you will, may have drawn red lines here for themselves, where they said they
don't want this to escalate into a situation where people are killed and where then the escalation could possibly snowball.
But one of the things that, of course, has not changed is the overall situation between the United States and Iran. And that overall situation
is making it virtually impossible for these two countries to come together and try to possibly talk this out or try to move forward.
The main issue, obviously, that the Iranians have is they say, look, the Americans left the Iran nuclear agreement, they've put Iran under these
crippling sanctions. The Iranians, for their part are saying they are not just going to idly stand by and allow their country essentially to be
starved off from their oil benefits and also from economic benefits, as well.
And they say that they're simply not going to talk to the Trump administration under those circumstances, and as long as that's in place.
Obviously, the very tense situation in the Gulf region is going to remain because then you still have a lot of militaries on both sides and a very
tense situation politically between these two countries, and that's certainly going to make it very difficult aside from the walking back that
you had now in this one situation for things not to flare up again in the not too distant future -- Zain.
ASHER: Right, Fred Pleitgen live for us there in Tehran, thank you so much. There was a civilian aircraft around 80 kilometers from the drone
when the Iranian shot it down.
[15:10:10] ASHER: Flights bound for hubs in Doha, Dubai and Abu Dhabi crowd the skies above the Persian Gulf. It's a region with many conflicts
and many flying restrictions. And this has become a vital route as well.
The FAA has now banned U.S. commercial flights from this space around Iran. Emirates, KLM, Lufthansa, British Airways and Qantas say they are diverting
around the area as well. Most of those planes you see, inside Iranian airspace, they're from Qatar Airways.
Anna Stewart is following this story live for us from London. So Anna, just give us the nuts and bolts here, just walk us through which airlines
are affected by this specifically and how much does having to divert routes complicate things for airlines?
ANNA STEWART, CNN REPORTER: Yes, well, let's start off with that list that you just mentioned. We're seeing it grow by the hour really, airlines very
keen to make sure that they're on top of this and not really surprising given in 2014, Malaysian airline Flight 17 was obviously tragically
involved in the war between Russia and Ukraine.
So they are actually here you see United Airlines, Emirates, KLM, Qantas, Lufthansa, British Airways have all suspended or diverted flights away from
this region. And it's a very specific area, Zain.
If you take a look at a map, it's Iranian controlled airspace over the Persian Gulf, and the Gulf of Oman. It was this time yesterday very busy.
Of course, today, as you said, you can only see a few planes and most of them are either Iranian or Qatar Airways.
ASHER: So how expensive is this for airlines, Anna?
STEWART: Well, it really depends on the situation. If you're suspending flights, of course, there's an X amount of cost. But rerouting is very
complicated. It depends how far they have to divert these planes. Because of course, every minute, every hour in the air is more money on jet fuel.
It's more money on operational costs, staff, and costs and so forth.
And for some of these airlines, this is already a problem. This is already hitting their bottom lines in the region because flying across the Middle
East is very, very complicated.
There are plenty of areas you can't go over, conflict zones for instance, Yemen, Libya, Syria, and disputes between different countries, which also
affects different airlines.
ASHER: All right, Anna Stewart live for us there. Thank you so much. And as Anna was just talking about, airlines certainly will not be quick to
forget the lessons learned in 2014 when Malaysia Airlines MH Flight 17 became tragic collateral damage in the war between Russia and Ukraine.
The plane was en route from Amsterdam to Kuala Lumpur, Malaysia. It was more than 30,000 feet above the conflict, but a surface to air missile,
plucked it from the sky and killed all 298 people on board.
Peter Goelz is in Washington for us. He is a former Managing Director of the National Transportation Safety Board here in the United States. So
Peter, just how dangerous are things for airlines that are flying in the region?
PETER GOELZ, FORMER MANAGING DIRECTOR OF THE NATIONAL TRANSPORTATION SAFETY BOARD: Well, you can't take any chances. Remember, even before Malaysia
Flight 17, there was an Iranian commercial airplane that was shot down by a U.S. warship over the Gulf.
So wherever you have this kind of conflict, and you've got, you know, fingers on the trigger, you can't be too careful. And I think you're going
to see virtually every air carrier divert away from this area, because you just can't take a chance on who has the control over these surface to air
ASHER: Yes, I mean, that was going to be my next question. Because on the one hand, yes, the tensions are specifically between the United States and
Iran. But there are several Western Airlines that are avoiding this region, as well, particularly airlines that actually -- airlines from
countries that do have diplomatic relations with Iran. What does that tell you about just how tense things are on the ground?
GOELZ: Well, there are -- they are very tense and from a safety and insurance situation, how could you justify having a plane flying in this
area if it were tragically shot down? How could you justify that? You could not. You must take the step now to divert and protect your
passengers. There's no other question.
ASHER: So how logistically difficult is it for airlines to, you know, do all the necessary diversions in order to keep passengers safe?
GOELZ: It can be very complex because first of all, on these transnational transoceanic routes, you have to carry enough extra fuel to be able to
divert to, you know, a safety airport, should something go wrong.
And if you're diverting even a hundred miles out of your normal route, it may cause you to have to stop and refuel. It may put you into an entirely
different scheduling situation. It is a challenge to do it. But the air carriers either have to divert or they have to cancel their flight like
ASHER: So what would this mean? I mean, we've talked about this with my colleague, Anna Stewart, a second ago, but what would the specific airlines
-- rather lessons learned from the shooting down of MH17?
[15:15:10] GOELZ: Well, the lesson there was that there was this terrible conflict that continues in the Ukraine. There was a warning not to fly
below a certain level below 30,000 feet, and that was raised to a higher level.
Malaysian Airlines was flying right at that level. There appeared to be no clear control over who had the final say on firing the missile, and it was
just a terrible tragedy that the Russians and the Ukrainian rebels denied to this day.
ASHER: All right, Peter Goelz live for us. Thank you so much. Appreciate it.
GOELZ: Thank you.
ASHER: All right. Up next, the S&P 500 touches a new high despite a turbulent week. Investors are hoping the leaders of the world's two
biggest economies can restart trade talks. But international companies are joining the protesters in Hong Kong on the streets to the boardrooms. We
will look at why a lot of people think the controversial Extradition Bill is bad for business.
ASHER: All right, welcome back everybody. With less than an hour to go to the close, it has been a choppy trading day on Wall Street. S&P 500
touched a fresh all-time high before pulling back. Right now, it is just about at a record high.
Meantime, the Dow has risen every single day this week. It has been on track for its first record close since October, but has had earlier gains.
Investors took heart from U.S. Vice President Mike Pence, a decision to defer a planned speech on China policy. That rekindled optimism over trade
talks. The decision comes a week ahead of talks between Donald Trump and the Chinese President Xi Jinping at the G20 in Japan.
Paul La Monica is joining us live now to all things U.S. stocks. I mean, when you think about this week, the Dow inches away like literally
centimeters away from an all-time high.
PAUL LA MONICA, CNN BUSINESS REPORTER: Exactly. The S&P 500 is getting close to 3,000.
ASHER: Yes. Incredible. It is mainly because of what happened with the Fed coming out and intimating that it was going to cut rates potentially
next month. Traders saying there's a hundred percent chance of a rate cut next month and also bouyed by the ECB as well.
LA MONICA: Yes, I think that the market is very happy with the direction that central banks are taking right now, which is that they are willing and
ready to provide more stimulus, if needed if the global economy starts to slow and the U.S. economy starts to lose a bit of steam as well.
[15:20:15] LA MONICA: So as you point out, it's probably a slam dunk that the Fed is going to cut rates in its meeting in July unless there is some
shock and that could be a positive shock if the U.S. and China actually come to a trade deal, but I don't think too many people expect a full blown
long term deal to be announced at the G20, maybe just something that, you know, gets us closer to one.
So then you just have to look at the economic data. I mean, unless we have a jobs report that is so strong and raises inflation fears, again, the Fed
probably can have some wiggle room to cut by at least a quarter point, if not more.
ASHER: When you think about just this week, though, you look at all the sort of different factors. On the one hand, you've got stocks, Dow,
nearing all-time highs, but at the same time you have gold higher. You also have this week, the 10-year falling below two percent. I mean,
there's so many mixed messages happening right now.
LA MONICA: Yes, if you believe the stock market, it's we're in full blown bull market, rally mode. Things are going to get better because the Fed
and other central banks are going to keep the party going.
But then you look at the bond market that 10-year yield below two percent. You have negative yields in a lot of other developed markets in Europe and
Japan. That's potentially a worrisome sign. The rise of gold is, I think, a sign of fear in the U.S. markets, particularly with regards to what might
be happening with the U.S. and Iran. That's obviously hit oil prices as well.
Then there's Bitcoin, which in some weird way has become the digital gold, if you will, and I think one of the reasons it is rallying is because of
the Fed as well.
ASHER: And let's talk about Neel Kashkari's comments. He is the head of the Federal Reserve Bank of Minneapolis, just walk us through what he had
to say. He actually intimated that the Fed actually should have cut interest rates at the last meeting this week.
LA MONICA: Yes, Kashkari not only said that the Fed should have cut rates, but that the Fed could have done it or should have done it by a half
percentage point which is larger than what most people would think is needed right now.
The only dissenter in this week's Fed decision was St. Louis Fed, Jim Bullard. He said he was expecting a quarter point rate cut or was hoping
for a quarter rate cut that's what Stephen Moore, one of Trump's Fed nominees who didn't actually make it through the process, also calling for
a similar sized rate cut.
But what's interesting here is that Kashkari will be a voting member in 2020. So by that point, it is possible we will have several rate cuts that
the Fed will have made. Will he still be pushing for even more when he is a voting member next year? That, we have to wait and see.
ASHER: We'll see. All right, Paul La Monica, live for us. Thank you so much. Protesters are back on the streets of Hong Kong. This is the third
mass demonstration in less than a week over a bill that would allow extradition to China. Several groups, including Amnesty International are
calling for an investigation into the police response to the protest.
The government has suspended the measure, which many protesters view as a Beijing power grab. They say the bill has got to go for good.
International businesses certainly agree. Hong Kong is famous for free enterprise and they want to keep it that way. So they made sure Hong
Kong's leaders knew their feelings.
Andrew Stevens has more.
ANDREW STEVENS, CNN ASIA PACIFIC EDITOR (voice over): Hong Kong likes to call itself Asia's world city, a haven for free enterprise, a place where
business enjoys a very close relationship with government.
So it was a stunning turnaround when business leaders joined protesters in condemning the government's extradition bill, and not just local business,
international companies based in Hong Kong also joined in.
(BEGIN VIDEO CLIP)
TARA JOSEPH, AMERICAN CHAMBER OF COMMERCE, HONG KONG: Well, I think the bill definitely tarnished confidence, that's because we've seen various
things over the last year that started to add doubt and sow doubt in people's minds about whether this unique one country, two systems and the
very important rule of law was actually starting to evaporate.
(END VIDEO CLIP)
STEVENS: At the heart of business concerns, a fear that if the bill is passed, the long arm of Beijing could reach into Hong Kong, and pluck
alleged defenders out of the city to face charges under China's opaque and politicized legal system.
Those fears were heightened earlier this year after the arrest in China of the Canadian businessman Michael Spavor on national security grounds. A
move that critics say was a political retaliation for Canada's arrest of a top executive at Chinese tech giant, Huawei, just days earlier.
Business confidence in Hong Kong has been falling since the extradition bill was first announced by the government and those worries only grew when
U.S. Congress threatened to review Hong Kong's special trading and economic status with the U.S. over concerns the bill would erode the territory's
high degree of autonomy from Beijing.
[15:25:10] STEVENS (voice over): As business lobbied against the bill and millions took to the streets to protest, the beleaguered government
eventually backed down.
(BEGIN VIDEO CLIP)
CARRIE LAM, CHIEF EXECUTIVE, HONG KONG: I offer my most sincere apology to all people of Hong Kong.
(END VIDEO CLIP)
STEVENS (voice over): The business community has welcomed the government's decision.
(BEGIN VIDEO CLIP)
JOSEPH: We're absolutely relieved to see that the bill has been shelved and really won't see the light of day again. Now is the time for the
government to get out quickly and restore lost confidence.
(END VIDEO CLIP)
STEVENS (voice over): Hong Kong's own Chamber of Commerce also supported the government move. "We hope that this will draw a line under this
unfortunate episode," it said in the statement. "We are a resilient city with a strong and well intentioned people. It is time we move on
STEVENS (on camera): So the government has got a report if at least from the business community, but it comes with a clear warning that Carrie Lam
has now to restore confidence in this divided city shocked to the core by what is perceived as a government which is arrogant and out of touch.
STEVENS (voice over): It's a huge task; getting the business community back on side is only the start. Andrew Stevens, CNN, Hong Kong.
ASHER: All right, oil prices are spiking amid tensions with Iran. I'm going to be talking to an industry expert who says geopolitical risks in
the Middle East maybe high, but crude production is still going strong. That's next.
ASHER: Hello, everyone. I'm Zain Asher. There's more QUEST MEANS BUSINESS in just a moment. But first, these are the headlines for us at
The U.S. President is now confirming a limited strike on Iran when he learned it would likely cause 150 deaths. Mr. Trump said the action was
too strong, a response for Iran's downing of an unmanned drone earlier this week. Iran said the drone was targeted because it was in its airspace.
The British Prime Minister has suspended Foreign Office Minister Mark Field after he was seen forcibly removing a Green Peace protester from a
dinner in London. Green Peace have accused Field of assault, there will now be an investigation. Field apologized for grabbing the woman, he said
he took the action as a security measure.
And Spain's Supreme Court has found five men known as the Wolf Pack guilty of gang rape. It sentenced each of them to 15 years in prison for raping a
teenage girl during the Running of the Bulls Festival in Pamplona three years ago. The decision reversed a lower court ruling that found the men
guilty only of sexual abuse.
And British Pop music icon Sir Elton John has received the Legion of Honor Award from French President Emanuel Macron. The medal is France's highest
honor. President Macron presented the singer, the medal in private before they both addressed the crowd at the Paris Music Festival.
And a grand jury has indicted American entertainer Cardi B on felony assault charges in connection with a bar fight at a New York strip club
last August. Police say the Grammy Award-winning rapper was part of a brawl in which two people were injured by throwing bottles and chairs.
Right, President Trump and Saudi Arabia's Crown Prince Mohammad Bin Salman have spoken about the stability in the Middle East, the threat of Iran and
global oil markets. Jeremy Diamond is at the White House. So, Jeremy, just walk us through what was specifically discussed on this call?
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: That's right. Well, it appears as of now that the president and the Crown Prince discussed the
situation happening right now in the region, particularly these confrontations with Iran. And we expect that, that must have included the
president's decision to order and ultimately call off a series of targeted strikes against Iran.
Those strikes would have hit three Iranian military targets. But the president explaining today that he decided to call those strikes off within
minutes, really, of when those strikes were set to begin. And so, that is where we stand right now with the White House with the president here,
seeming quite confident in his decision to not ultimately go through with those military strikes.
But a lot of questions still remain, a lot of uncertainty still about how the president will ultimately respond to Iran's downing of a U.S. military
drone. It's not clear as of now that the president's decision not to go forward with those strikes, whether that means that the president will not
retaliate at all or whether other options are still being drawn up.
ASHER: Unless of course, Jeremy, it comes at a time when the president has nominated Mark, expert to head the Department of Defense, but it's still a
tricky time given the tensions between the U.S. and Iran because of the vacancies at the head of the DOD.
DIAMOND: That's right. Well, the president has not had a Senate-confirmed Secretary of Defense since January 1st. That is when Defense Secretary Jim
Mattis resigned his position after he was -- after he resigned to the president and he was succeeded by the acting Secretary of Defense Patrick
Now, the president had planned to nominate Shanahan. And this week, Shanahan decided to withdraw his nomination amid a series of domestic
violence incidents from his past involving his former ex-wife. Now, the president was set to nominate -- to put expert into that position as acting
Secretary of Defense.
He now intends to nominate him, we are told. But again, this just means that there will be a series of leadership changes at the top of the
Pentagon, as all of these tensions with Iran are very much ongoing. If indeed expert does become the acting Secretary of Defense on Sunday and
then is subsequently nominated for that position, because of U.S. rules, he'll actually have to step down from that acting position while his
nomination goes through the Senate.
Which means, again, another new acting leader of the Pentagon likely to come in charge at some point in the coming weeks as that nomination rolls
over to the Senate.
ASHER: All right, Jeremy Diamond live for us there, thank you so much. All right, so, oil prices are hanging on to their rally, boosted by those
fears of a potential conflict between Washington and Tehran. But they're still down around 15 percent from its April high after slipping into a bear
market earlier this month.
Investors are more concerned, then where the global growth prospects. Ted Hall is senior market analyst for oil industry experts Kayrros, he joins us
live now from Paris. Ted, thank you so much for being with us. So, yes, we are all talking about the fact that oil prices are higher, but you have
to put this into the broader context. Oil has actually been down quite a bit this year.
[15:35:00] TED HALL, SENIOR MARKET ANALYST, KAYRROS: That's correct, and today's oversupplied crude oil market, any escalation and supply risk and
geopolitical risk has a dampened effect. So, without further escalation intentions, without further risk that we're closer to an actual physical
disruption of supplier flows, we'd expect prices to fall back off relatively quickly.
ASHER: So, how close are we, do you think, to a noticeable dip in supplies if tensions between the U.S. and Iran continue to escalate?
HALL: It's not really, we don't speculate on that at Kayrros. But we do monitor how much interruption there is currently in the Gulf supply market,
and even though geopolitical risk is high, the actual interruptions are relatively small with the notable exceptions of Iran and Venezuela, even
geopolitical risky countries are supplying either at full rates or close to.
ASHER: So, how much of an important factor is the U.S. supply of oil? A lot of people are saying that if it wasn't for the fact that the United
States had increased its oil productions, you might even see oil prices at $100 a barrel right now.
HALL: That's absolutely the case. So, if you look at today, between 10 years ago, 20 years ago, it's a radically different regime and oil
production in the U.S. is growing at an even faster rate than it was in 2014 at its peak. So, today, we're 1.5 million barrels a day, higher than
with foreign production in the U.S. and we're expecting that trend to continue.
So, again, anywhere, OPEC had a lot of power before as far as whether when disruptions could come off and geopolitical risks had a big impact in
price. That's a little bit more dampened today because of the growth in production state side.
ASHER: So, the increase in oil prices we're seeing, I just want to point out the broader context for our audience, it comes at a time when U.S.
sanctions against Iran and sanctions against Venezuela that are dampening down supplies. Just walk our audience through that.
HALL: Sure, so, it's with sanctions, it's difficult to find customers for your crude oil, that simple. So, Venezuela is still moving crude to China
and to Russia and to India. But with additional pressure on those customers, specifically, India, those flows could be interrupted. And in
Iran, it's a little more difficult, what we see and our monitoring at Kayrros of Iranian production through flaring and through their storage and
We see signs that the market may be underestimating the amount of production we have today.
ASHER: Right, Ted Hall, live for us there, thank you so much, appreciate that. Meanwhile, another wild card for the energy market here in the
United States. A huge fire hit the largest and oldest refinery on the U.S. East Coast. Several explosions rocked the Philadelphia Energy Solutions
Refinery early Friday.
Firefighters are still battling the blaze which is contained, but not completely under control. We are being told that nobody has been seriously
hurt, obviously, good news there. But our Athena Jones is on the ground there in Philadelphia. So, Athena, just walk us through what happened,
what caused this blaze?
ATHENA JONES, CNN U.S. CORRESPONDENT: Hi, Zain, well, we don't know yet what caused the blaze. They're not going to be able to really begin
investigating in depth until the fire is out. And the latest information we have from fire officials is that it is still as you mentioned,
contained, but not under control.
According to the Fire Department, it's standard practice when fighting a fire of this type to let the flammable gases burn away in a controlled
fashion. But we have seen a diminution and the number of bio-trucks around here. There were several fire trucks behind me until just a few minutes
ago -- I can tell you that this fire began in the early hours of this morning around 4:00 a.m.
There were three explosions in the refinery's alkylation unit, that's part of the refinery process. This explosion rocked people awake nearby and
several miles away, and you can see big balls of fire in the sky. It was a massive major blaze. There were 51 fire truck apparatus here, 120
personnel fighting it at one point.
And we know that as I mentioned, it's still not out. We also know though, that this is the second fire this month at this facility. There was a fire
on June 10th as well, no injuries there. Officials say, the mayor says that these fires were not related, but he says he's convening a working
group with officials from the company, Philadelphia Energy Solutions to go over and then talk about the concerns surrounding these fires.
ASHER: Right, so, you mentioned --
ASHER: This is a second fire this month, the other one was on June 10th. What does that tell us about safety standards at this facility?
JONES: Well, it certainly raises questions, and I should note that my colleague Chris Isadora is reporting that this company, Philadelphia Energy
Solutions that owns this refinery has faced some financial troubles in recent years.
[15:40:00] They filed for bankruptcy in January of 2018, they were able to come out of bankruptcy later that year in August by restructuring some
debt. But filings show that they continue to face challenges for a number of reasons. Some of it has to do with regulations, some of it has to do
with the lifting the ban -- with the ban on crude oil exports.
So, there's a lot going on that this company is facing, and is one reason that the mayor wants to have this working group to talk about what may have
caused these fires and to talk about the concerns. Also with air quality, we know from health officials that they've done some initial samplings,
there were no -- nothing to show that they were any concerns about air quality.
They went back and did more samplings of air upwind and downwind of this facility. And we're still waiting for those results. So, these are all
questions that still need to be answered and they're just getting started when it comes to looking into what caused these huge explosions and these
huge fire. Zain?
ASHER: Athena Jones live for us there, thank you so much, appreciate that. All right, so, Boris Johnson has emerged from a crowded pack to take the
lead in the race to be Britain's next Prime Minister. Now, the governor of the Bank of England is telling Boris his Brexit plan is plain wrong. We'll
explain why after the break.
ASHER: Welcome back. The Governor of the Bank of England is dismissing the Brexit plan put forward by Boris Johnson; the leading contender to be
the next U.K. Prime Minister. Mark Carney says Johnson is wrong and that the U.K. won't be able to avoid EU tariffs if it leaves the European Union
without a deal.
This Sunday marks three years since the original Brexit referendum. Roger Bootle is founder and chairman of Capital Economics, he supports Brexit.
Earlier on "THE EXPRESS", he told Julia Chatterley that a no deal isn't the disaster that people fear.
(BEGIN VIDEO CLIP)
ROGER BOOTLE, FOUNDER & CHAIRMAN, CAPITAL ECONOMICS: When you say no deal Brexit, what do you actually mean? I mean, and what people imagine is there
are no -- there's no agreement about anything. Which is already not true, and you have this great bus stop and storm out. And of course, in those
circumstances, presume that includes no deal with regards to tariffs.
But you're absolutely right, under the rules of the WTO, the World Trade Organization, it's perfectly OK for two countries, in this case, the EU and
the U.K. to say, look, we're going to carry on trading without tariffs. So, I think in that sense, Mark Carney is, well, quitely wrong, has
overstepped the mark, we say.
[15:45:00] JULIA CHATTERLEY, CNN: But it is assuming that both sides can agree to suspend and --
BOOTLE: Exactly --
CHATTERLEY: And it is in both side's interest --
BOOTLE: Exactly --
CHATTERLEY: Not to create tension which you --
BOOTLE: Yes --
CHATTERLEY: Could argue it is at this stage --
BOOTLE: Yes --
CHATTERLEY: But it is a game of chicken in essence. My fear is going into October 31st, whoever it is, whether it is Jeremy Hunt or Boris Johnson,
it's simply not credible at this stage to say we're OK going for a no deal because the preparations for a no deal stopped, and businesses in
particular, 60 percent according to Mark Carney are simply not ready. They haven't done the paperwork to be able to deal with the no deal.
BOOTLE: Well, I think this is frankly exaggerated. We have done a lot more preparations in this country than we would have done, had we been
leaving in March, the original plan. And in any case, I think it's been awful scare mongering about what the down side is. We've got a few months
There's still time, I think, to prepare quite a lot. And of course, now we're in the midst of this wretched campaign. We need to get that over and
done with, and whoever it is who becomes Prime Minister, I think they have logically got to put their shoulders to the wheel and prepare seriously for
Even if they hope strongly, we're not going to have a no deal. The whole point is, the more prepared we are, then the more likely it is that in the
end, the EU will give us a reasonable deal.
CHATTERLEY: Does it matter if it's Boris Johnson or it's Jeremy Hunt in the end? Does it matter more what the EU does here, and if the EU simply
isn't willing to change the stance it took with Theresa May, then our situation simply hasn't changed.
BOOTLE: I think that's fundamentally right. Because on the surface, you might say that you're going to get a tougher deal and we're going to be
tougher with the EU under Boris Johnson. After all, he led the leave campaign. And Jeremy Hunt has told us that he voted to remain, also Boris
Johnson has been tougher on the whole subject of leaving on the due date at the end of October --
CHATTERLEY: Yes --
BOOTLE: And tougher on no deal. I suspect, frankly, all that for the birds. When it comes down to it, it's the essential logic of the
situation, we should correctly pay. You could have Winston Churchill on the job or Mickey Mouse. I don't think it makes much difference. The real
issue is, what could you get out of the EU, and if you don't get anything out of the EU, how are you going to confront the Conservative Party at
Are you prepared to leave on the due date at the end of October? Are you prepared to go for a delay? Those are really the critical issues.
(END VIDEO CLIP)
ASHER: It was a down day for stocks in London and the rest of Europe as well. Stocks finished the session with modest losses, but it was a
profitable week on trading overall. German stocks finished the week up 2 percent, French stocks were higher 3 percent, it was after hearings of more
stimulus from the ECB President Mario Draghi earlier in the week.
All right, still to come here, how the head of IT Cosmetics built a billion-dollar brand. Her tips for women to follow in her footsteps.
[15:50:00] (COMMERCIAL BREAK)
ASHER: Changing the way women see their own beauty. That is what Jamie Kern Lima wants IT Cosmetics to do. The former news anchor launched the
brand out of her apartment in 2008, just eight years later, she sold it to L'Oreal for $1.2 billion pocketing herself $400 million. The deal marks
L'Oreal's biggest acquisition in years and made Kern Lima the first female CEO in L'Oreal's history. I asked her what that moment meant to her.
(BEGIN VIDEO TAPE)
JAMIE KERN LIMA, CHIEF EXECUTIVE OFFICER, L'OREAL: I came from a family that's worked really hard, and hasn't had an outcome like that. And so,
you know, it was -- I mean, it started in my living room, worked 100-hour weeks for ten years, and so yes, this is really surreal.
I remember the moment that it happened and yes, and we were the largest shareholders, and I remember "Forbes" calling, and me saying, oh, I don't
want to talk, like you're on the self-made women's list, whether you want to talk or not, we have enough data. I'm like, how do you have data?
Like everything just shifted. There's overwhelming amazing things, there's of course, challenges.
ASHER: Yes, of course, but everyone knows how much money you have, that comes with a lot of --
LIMA: You know what? And you know what, Zain, when "Forbes" first started writing about it, my initial reaction for a few years, literally, the last
two years was to hide it, right? So, on my bio, it doesn't say, you know, "Forbes" richest self-made woman.
It says like "Forbes" most successful.
And I hid it and I had this moment this year where I realized the power of seeing things, right?
ASHER: Yes --
LIMA: And if I'm dimming my own light, you know, I want other women -- I don't want all the women out there and all the girls and all the
entrepreneurs that have dreams, I don't want them to just see men in business suits on Instagram and women in, you know, whatever, that you
know, whatever it is.
ASHER: Yes --
LIMA: I want them to see women --
ASHER: Of course --
LIMA: CEOs --
ASHER: That is powerful --
LIMA: Women on the "Forbes" list.
ASHER: Negotiating with L'Oreal. What can you teach women who are listening today about how to negotiate? So many women, as we talked about -
LIMA: Yes --
ASHER: Don't understand their own value --
LIMA: Yes --
ASHER: And when it comes to negotiating even a promotion, they sell themselves short.
LIMA: So, I think energy is contagious, and I think that if you let on to insecurity or doubt or you're around people that have that, it's
contagious. So, my first thing with negotiating is surround yourself with people who believe in you, who have confidence in you because you need to
have that confidence in yourself.
And I think that's really -- I think it's really important to do an audit of who's around you, even in your personal life. I think that's really
important. And I think that's -- I think that so much of negotiation is psychological.
ASHER: When I read that you were the first female CEO in L'Oreal's 108- year history --
LIMA: Yes --
ASHER: I was baffled because it seems to me, just you know, that it doesn't make sense that the beauty and fashion industry have been dominated
by male CEOs who are talking to women --
LIMA: Yes --
ASHER: For so long.
LIMA: Yes --
ASHER: Why is that?
LIMA: Yes, I don't know, but we're changing it.
We are changing it --
ASHER: Good --
LIMA: We are changing it, and I'm so -- I'm so excited by it, and I'm proud of it, but I'm also, you know, it was -- it was another woman that
fought. She was inside L'Oreal and she fought for me to keep my CEO title, and I think part of it is us championing each other, for sure.
And, you know, I think that that abundance mindset, you know, is so important for women --
ASHER: And not competing with each other --
LIMA: Not competing, but having that abundance mindset, and I just believe at the heart of everything, like, what we give is what we get.
ASHER: Absolutely --
LIMA: Do you know what I mean?
ASHER: Yes --
LIMA: And I've lived that. I try to live that every single day. And again, I think when people have a scarcity mindset or they think there's
only one seat at the table or this or that, that just breeds more scarcity.
ASHER: For women out there who are desperate to start their own business, maybe they're not happy in that 9:00 a.m. to 5:00 p.m. --
LIMA: Yes --
ASHER: Maybe they just want more flexibility --
LIMA: Yes --
ASHER: What can you say to them to help them realize that there is a power within them where they can achieve their dreams. Even though, the CEOs in
this country is vastly dominated by men, there is room for more women.
LIMA: Yes, absolutely. I think when you know where you're at in life, you have a feeling if you're where you're supposed to be, and you kind of know
if you're not, right? Whether it's a job or anything else. You kind of have this deep still small voice, and I feel like as women, we can feel
that and hear it.
[15:55:00] It's one of our super powers, and so I think if you know, you know inside that you want to start your own thing. I think number one, you
can and should, for sure. What I would say is timing is really important, and be ready for that chapter, be ready for that season.
Surround yourself with the right people. Ask yourself, do I have the right resources? Are there ways I can use my current job to, in the future,
leverage some of the things that maybe I can learn. And you know what? Maybe if you're in a job in accounting right now at a company, whatever it
is, go spend some time with people in all the different departments so that when it is your company, you can ask for their advice because as an
entrepreneur, you usually can't afford to hire all of the people that you need for quite a while.
(END VIDEO TAPE)
ASHER: Fascinating nuggets of wisdom there from Jamie Kern Lima. All right, just minutes left to go on Wall Street. Will there be records? It's
going to be a close one, we'll check the numbers and bring you the closing bell, next.
ASHER: All right, this just in to CNN. One day after coming within minutes of a military strikes on Iran, the Trump administration is back to
talking about economic sanctions. This as Tehran threatened to start enriching uranium violation of the 2015 nuclear deal. A senior
administration official tells CNN that President Trump has not taken military action entirely off the table just yet. We will have more news on
this as soon as we get it.
Meanwhile, we are on the last few minutes of trade on Wall Street, just about one or two minutes to go, rather, 75 is the magic number for the Dow.
The Dow has actually tipped into negative territory ever so slightly, we are down 28 points or so in the last 2 minutes of trade.
If we get a last minute push, it would actually set a new all-time high in terms of closing, but it doesn't look likely right now. The first one, it
would be the first one since October of last year. That might just be out of reach as we approach the closing bell.
Again, as I mentioned, just about 90 seconds to go, but whatever happens, it's been a very good week overall. The Dow is up nearly 3 percent, fueled
by signs of the Fed might be getting ready to cut rates later on this year, likely in July. And that is QUEST MEANS BUSINESS for today, I'm Zain Asher
in New York, the closing bell is about to ring on Wall Street. "THE LEAD" with my colleague Jake Tapper is next.