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QUEST MEANS BUSINESS

Fire on Russian Submersible Leaves 14 Crew Members Dead; At Least 50 Killed in Nigeria Fuel Tanker Explosion; England and USA Face Off for Spot in Women's World Cup Final. Aired 3-4p ET

Aired July 2, 2019 - 15:00   ET

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


ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Flirting with recod levels, the markets here in New York have had a choppy day of trade. The

Dow Jones is sitting in negative territory and that's after hitting record levels on the S&P as well as a four-day winning streak on the NASDAQ.

We're retreating.

One of the things on investors' minds, E.U.-U.S. trade tensions. That's what is driving sentiment today. Those are the markets and these are the

reasons why.

Meet the new boss. E.U. leaders pick Christine Lagarde to run the ECB. Saudi Arabia's Oil Minister tells CNN that oil prices could easily have hit

triple digits this year. And fury over a flag costs Nike some big investments in one U.S. state.

Live from the world's financial capital, New York City. It's Tuesday, July the 2nd, and I'm Eleni Giokos, this is QUEST MEANS BUSINESS.

All right, a very good evening to you. Great to have you on the show and we'll be keeping you up to date with the Women's World Cup Semifinal as it

kicks off in Lyon.

But first tonight, Christine Lagarde returns to Europe. In a massive shake up at the top of international finance, the Managing Director of the IMF

has been tapped to move from Washington to Frankfurt to take on the helm at the European Central Bank. Lagarde would replace Mario Draghi whose eight-

year term ends in October.

She tweeted she's honored to have been nominated and will temporarily relinquish her responsibilities at the IMF during the process.

A raft of top E.U. nominations have also been announced in the past couple of hours. We are going to speak to Valentina Pop, a reporter for "The Wall

Street Journal" who is in Brussels standing by for us.

I know you've been standing by in fact since Sunday for some kind of news and we are getting now a lot of information coming through. Christina

Lagarde, we know that she was in the pipeline for some time now. Her name had been put out there. But the question is, how did they come to this

decision and where to from here?

VALENTINA POP, REPORTER, THE WALL STREET JOURNAL: So it was a indeed a marathon stretch of talks almost three days in which E.U. leaders spent

here behind me in this building behind me in Brussels, trying to agree on four names or four top jobs here in the European Union and the European

Central Bank was one of these positions.

And for nearly two days, there was no end in sight and no hope and then the breakthrough came earlier today when French President Emmanuel Macron

really pushed for Miss Lagarde. And the German Chancellor Angela Merkel pushed for her Defense Minister, also a female candidate and then all the

cards fell in place.

And there was unanimity, except Miss Markel had to abstain, but that was because of some domestic political issue. So it was a bit surprising

because Miss Lagarde had been floated previously, but wasn't really a front runner.

GIOKOS: Exactly. And this is interesting, because she says she's going to step back until the process, you know, kind of goes forward and she has

just been nominated at this point in time. What is the process now going to be in Brussels?

POP: So for Christine Lagarde, first of all, the Eurozone Finance Ministers who are meeting actually next week will discuss her name, her

nomination and are then forwarding this name if they agree to have recommendation from the European Parliament after hearings and also from

the European Central Bank's governing board who also needs to approve this nomination.

But officials here in Brussels expect this to be more of a rubber stamping exercise and they don't really expect many hiccups in this process.

GIOKOS: But Valentina, we've also heard European Commission President, names have been flying around as well. Nominations have been coming in.

Are we getting closer to a resolution in terms of who is going to be heading up E.U. leadership?

[15:05:00] POP: Yes, it is. So Miss Lagarde's name came out as part of a package of four, and the next European Commission President, so succeeding

Mr. Jean-Claude Juncker will be this German Defense Minister, also a female candidate as I was saying Ursula von der Leyen, and in the European

Council, so the host of all these Summits and the main negotiator will be the current Belgian Prime Minister Charles Michel. And on the foreign

policy front, the Higher Representative, as it is called, will be the Spanish Foreign Minister Josep Borrell.

So now that we have all these four names, the leadership crisis is over.

GIOKOS: Well, hopefully. Thank you so very much for that Valentina. Great to have you on the show. So Christine Lagarde has had a storied and

distinguished career even without the ECB feather in her cap.

She was the first woman to lead the world's largest law firm, Baker & Mackenzie. She then served as French Finance Minister during the Euro

crisis and was the first woman in that role. She then replaced Dominique Strauss-Kahn to become the first woman Managing Director at the IMF.

So interestingly, like her would-be American counterpart, Jerome Powell, she is not a trained economist. Donald Tusk says he is absolutely sure

Christine Lagarde will be an independent President at the ECB.

When Richard spoke to her in April, Lagarde insisted central bankers must make policy based on numbers and not on politics.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, MANAGING DIRECTOR AND CHAIRWOMAN OF THE INTERNATIONAL MONETARY FUND: All central banks, wherever they are located, be able to

actually base the monetary policy decisions on data and verified data, not just impressions. And that also, they communicate their decisions in such

-- in clearing of the way so that invested actually understand where it's heading.

(END VIDEO CLIP)

GIOKOS: All right, So Mohamed El-Erian is the Chief Economic Adviser at Allianza and he is in Newport Beach, California. Great to have you on the

show. And what incredible news coming to the fore.

European Central Bank, an institution that is being run by technocrats, by central bankers, and here we've got someone new, but someone that we know

quite well, because of the work that she's done in Europe and because the IMF is a technical institution that focuses on things like central banks

anyway. But do you think she's the right person to head this institution up?

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZA: I do. I think it's an inspiring choice. And it comes at the right time, and it's a big break

from the past, but one that has been needed.

GIOKOS: Okay, so she is not a central banker. She's not an economist. She doesn't have that technical ability, one would say. She is also a

politician in many people's eyes. And she has in the past said, we've got to keep politics out of central banks. Is there a concern that this might

spill over into being a politically run central bank because of her background?

EL-ERIAN: No, I mean, look at what she brings to the table. Very deep national experience. She was a Minister of Finance and international

experience a very successful tenure at the IMF. She knows the private sector well. She knows the public sector well.

She surrounds herself with experts and learn from them very quickly. She's known to be a hard worker. She thinks in a multidisciplinary way. She has

politician rock star status. She is a great communicator.

So put all that together, and I think that the world and the ECB is going to be well served by her leadership at this time and it is a really

important time.

I think the hard thing is not the political interference with the ECB. It is the fact that the ECB has been carrying too much of the policy burden.

GIOKOS: Yes. And absolutely, the ECB has been, you know, expanding its mandate, so to speak, it's had to embark on intense stimulus, it's been

buying debts. It's been moving away from the rules. It has been, of course, trying to adhere to over the past few decades.

Mario Draghi's leadership was interesting. Do you think she's going to be very different to him? Or do you think she's going to continue on his path

of this, stimulating Europe after a crisis?

EL-ERIAN: So I think she's going to try and make the handoff that is so desperately needed. If she's not able to do that, she will think out of

the box just like Mario Draghi did. That's her inclination.

She is a big thinker. She brings in different elements. But the big hole for Europe is that we get the policy handoff and today we got another

warning. The German 10-year yield set a new negative record at negative 37 basis points. That is a flashing red light to European politicians that

they need a better, more balanced policy approach.

GIOKOS: I mean, and how many more tools does the ECB really have left in terms of getting, you know, a big economy like Germany back on track? Or

even just looking at Italy or even just dealing with E.U.-U.S. tariffs that could come into play.

[15:10:14] GIOKOS: The Europeans right now have a tough task ahead of them and Christine Legarde and the new leadership are going to have to try and

navigate this.

EL-ERIAN: Absolutely right. I mean, first of all, she's going in at a hard time, not only because the ECB is running out of tools, like you said,

but also because the economy is weakening.

I think at best, Europe could hope for one percent GDP growth rate and at that low level, in what's called "stall speed," think of a plane that

doesn't go fast enough to overcome all the structural issues.

So she comes at a tough time. But I think it's important to get new blood into this to disrupt the system a little bit and try to undertake this

policy handoff that Europe so desperately needs.

GIOKOS: Hang ten for me there, Mohamed so meanwhile, Donald Trump's trade policy tariff whack-a-mole basically continues, no sooner is one trade

issue resolved, another emerges The U.S. is now threatening a fresh round of tariffs on Europe.

An update on the three trade war fronts. In Mexico, tariffs are now off the table after they struck a deal to do more on immigration at the U.S.

border.

Just this past weekend, Mr. Trump called a ceasefire with China. He and President Xi agreed to restart negotiations. Now, it's Europe turn once

again. This time, the U.S. says the tariffs are in response to a 30-year- old dispute over subsidies for Airbus.

Mohamed, when you hear this, I mean, just when we thought we were off the hook with regards to new tariffs, with regards to massive economies. Here,

we are almost back to square one.

EL-ERIAN: Yes, I never thought we were off the hook. I mean, President Trump has made very clear that his sequence is NAFTA, Mexico and Canada,

China, and Europe and then others. And he's going down that sequence.

And I didn't think we're off the hook because first, he has that sequence that has been signaled. And second, China is like you said just a

ceasefire, it hasn't gone away. And with China, it is no longer just economic issues, but its national security.

Bottom line, this trade uncertainty is going to be with us for a while.

GIOKOS: And how are you pricing that in in terms of global growth numbers? And what is that going to do to the U.S. economy? We're sitting in the

longest running economic expansion ever in the United States.

EL-ERIAN: So what I think is fascinating is what happened yesterday. The markets celebrated the announcement over the weekend of a ceasefire, but

economists were much more cautious saying nothing has been solved. Because if you have a business that makes decisions, not over a few weeks, like

markets do, but over a few years, you still have that uncertainty. Meaning that trade uncertainty will continue to be a headwind to investment and

growth.

As to the United States, ironically, it is the best place country right now to deal with that. Why? It is big. It is relatively close, so it's less

sensitive to trade, than say Europe is and it is more entrepreneurial.

So the U.S. will suffer some damage, but the rest of the world will suffer a lot of damage. And that is why -- that is the bargaining power of the

U.S. to say, you know what, I'm willing to incur some damage because I'm really serious about this, and you're going to incur much more damage. And

I think other countries are going to understand that and make concessions.

GIOKOS: You know, the last really big economic expansion we had ended in 2001 and you know, you keep looking back at history and you say, these big

economic expansions are then -- you know, what happens after that is some kind of a big problem where you see a possible recession. And in fact,

some people are actually calling this.

When you look at the 10-year Treasury yield in the U.S., it's calling for drama. It is saying that we should be, you know, looking at the risks on

the horizon. How are you reading into bond yields, right now, that could be signaling, you know, some problem happening in the next couple of years?

EL-ERIAN: So I don't think you can understand that 10-year in the U.S., which they've below two percent today without looking at Germany, because

this is an interconnected global market.

So the pressure down, the pull down on U.S. yields is coming from Europe and Europe, as I said earlier, is a big systemic risk for the global

economy.

Having said that, the U.S. has to be careful that it doesn't run out of steam and there was a case to be made for further pro-growth reforms, which

is on infrastructure, which leads to the last issue, what went wrong 15 to 20 years ago? We lost sight of what produces good growth.

Instead of pursuing education reform, labor training, infrastructure, we fell in love with finance, as the engine of growth and now we're

discovering that that is actually not a very good engine at all.

GIOKOS: Mohamed, great to have you on the show. Thank you so much for your insights. All right, let's quickly check in on how the Dow is doing

right now. And as you just heard from Mohamed as well, we've actually seen the 10-year Treasury yield dip below that two percent level, which

basically means that some kind of risk is on the horizon.

But the Dow Jones right now, as you can see, very choppy I today's trade. We're down two tenths of a percent. It's been a rocky day for the index.

Earlier, it shared some of Monday's gains, but then move back into the green.

Investors are still processing that tariff ceasefire between the U.S. and China and then of course, the possibility of tariffs on Europe as well.

Now, the S&P 500 has been bouncing between red and green all day. If it ends positive, it will be a new record closing high.

Now, the U.S. has just taken a one nil lead in the World Cup Semifinal showdown against England. We will bring you the latest from the

transcontinental rivalry underway in Lyon.

And Nike pulls a new sneaker for the Fourth of July after athlete, Colin Kaepernick reportedly called its design offensive. Stay with us.

(COMMERCIAL BREAK)

GIOKOS: The United States have taken the lead in the first Semifinal of the Women's World Cup between England and the United States.

Christen Press scored within the first 10 minutes. The U.S. Captain Megan Rapinoe is on the bench, for the favorite's England's usual goalkeeper is

also out injured. This game is a huge showcase for Nike.

England and the United States both have the iconic Nike tick on their uniforms. The U.S. women's Jersey is the number one soccer jersey ever

sold on Nike's websites in one season.

Nike is also backing socially aware athletes and it sponsors U.S. Captain Megan Rapinoe know who campaigns for gender equality and social justice.

Nike also made NFL player Colin Kaepernick the face of an ad campaign in 2018. He sparked controversy for kneeling during the U.S. National Anthem

to protest police brutality.

Both athletes have been criticized by U.S. President Donald Trump.

Now this week, Nike is standing by Kaepernick after he criticize the company's new shoe design. Nike has since cancelled the shoe in question

which features an American flag that was designed by Betsy Ross in the late 1700s. This is the shoe that's being pulled.

[15:20:16] GIOKOS: Now "The Wall Street Journal" indicates Kaepernick found the flag offensive because of its connection to the time of slavery.

Arizona's governor has since criticized Nike's decision to pull the shoe saying he is pulling financial incentives for Nike to locate in his state.

Now the sneaker, meanwhile, is selling for upwards of $2,500.00 on a street wear auction site. So I want to bring in Bruce Turkel, CEO of TURKEL

Brands. He joins me now from Miami, Florida. Great to have you on the show. Your first thoughts on this where Nike has decided to pull this shoe

because Kaepernick found it offensive.

We know that old flags do evoke emotion. It's been in conversation in the United States for a while. What is -- do you think that this was the right

thing to do?

BRUCE TURKEL, CEO, TURKEL BRANDS: Well, Nike once before followed Kaepernick and it turned out they were on the right side of history and

they did what their customers wanted. So they were smart to listen to him.

And they might have had a marketing malpractice because what nobody is saying yet is that that symbol, although for many of us, it is the

Revolutionary flag of the country, it has also been coopted by white supremacist groups. And they have now taken this image and corrupted it no

different than when the Nazis took the swastika, which was a good luck image for Native Americans, but also a German image of honor for thousands

of years. But it no longer is.

And so maybe this image no longer is and Nike understands that their customers respond to that.

GIOKOS: So what I'm not understanding is how this product could go through design through production without anybody saying, "Hey, we might be being

tone deaf here. Maybe this is not a good idea."

TURKEL: Well, that's a great question, except every time I get invited on the air to talk about where a company made a mistake, we always say how

could they get this far? And I guess they get this far, because people are human and people don't notice things. And you know, the emperor has no

clothes, and we know all those issues.

So good for Nike, good for Kaepernick for standing up and saying, "Wait a second, this may not work out the way you think it's going to, we better

look at this again."

GIOKOS: But what I don't understand is that it's being sold online for $2,500.00 despite the fact that it's been pulled off Nike's platform. Why

do you think that we are seeing that coming through? It was meant to just be a few hundred dollars.

TURKEL: Oh, because it's instant -- it's an instant icon. It's instant rarity. Remember, it's not like Nike had this idea, showed some prototypes

around and then cancelled it. They had already shipped product and they recovered that product.

But let's face it, we know they can't recover everything. Some people put some away and now it's on eBay and selling for upwards of $2,000.00.

GIOKOS: So Nike is interesting, because it has shown in the past that it is willing to make political statements. Fashion and politics, do they

mix?

TURKEL: Well, I think it's critical that we understand that speech, you hated -- speech you hate is not necessarily hate speech, and it's a fine

line.

Fashion and politics always mix, and the question is, when do you become more fashionable by being more provocative? When do you become more

fashionable by pulling back? And in fact, the most important question, what does your customer and your potential customer care about?

So whether you like it, or I like it, it may or may not matter to Nike who is their demographic and what do those folks care about?

GIOKOS: So what's interesting is Arizona is also pushing back as much as you've seen criticism coming through from Kaepernick, you've got Arizona

saying, well, we are going to pull our financial relationship with Nike as well.

So there's repercussions to this, I guess, on both sides of the spectrum, and it depends where you stand whether you get offended by a flag that was

clearly, you know, used during a time of slavery, or whether you feel we will get over it. You know, this flag represents something else, and

America is divided at this point in time. I mean, there's no question about that.

TURKEL: The last bit of research I did before the red light blinked on my camera showed that Nike has already received $43 million in press coverage

from this issue.

So you know what Arizona can do whatever it wants. The point is, Nike has shown time after time after time, that these controversies being on the

right side of history make the money.

I mean, as we say in every business, money talks and BS walks, so when this whole kneeling thing happened, Nike stock was at $52.00. When Trump

complained, it stayed there.

When Kaepernick sued the NFL it went up to $60.00, and today, the case is settled and Nike stock is an $85.00. So the governor of Arizona can make

as much noise as they want. The truth is, Nike has their finger on the pulse of their customer.

GIOKOS: Fantastic. Okay, we're going to be catching up with you a little later. But I want to turn your attention now to the most important thing

perhaps that's happening this evening.

England have equalized against the United States in that Women's World Cup Semifinal. We will have a full update for you at half time.

In the meantime, AB InBev is looking to raise $8 billion to $10 billion in what could be the biggest IPO yet this year. Everyone is focusing on that.

And, of course, it comes through in Hong Kong. Matt Egan now joins me to discuss this further.

AB InBev is sitting in a tight spot. It has got high debt. It has got to find a way to raise capital and this is one way to do it. Is this the

right move?

MATT EGAN, CNN BUSINESS LEAD WRITER: That's right, you know, they do have this big problem, right? Three years ago, they went out and acquired SAB

Miller. It was about $100 billion transaction.

Fast forward to today, you know, they still have more than $100 billion of debt on their balance sheet. They promised that they would deleverage, but

that process has been slower than they hoped, in part because of sluggish profits and sales in North America.

And so it does make some sense to try to monetize this fast growing business that they have in Asia Pacific.

GIOKOS: $10 billion, is what they're looking to raise. I mean, I guess that does take a little bit of the hundred billion that you were talking

about. But it's a fast moving markets in Asia. It's interesting, the valuations, I guess that's the big question, is this a fair price?

EGAN: That's right. So this would be a really, really big IPO. It would not just be the biggest of the year, but at the high end, this would

actually be according to Deal Logic, the biggest food and beverage IPO in history, it would top even the Kraft Foods IPO when it spun off from Philip

Morris in 2001.

And so the question about valuations. Now, this would trade at about a 16 to 18 times enterprise value and so that would be a relatively lofty

valuation, more expensive than the company itself and more expensive than some of the rivals.

But clearly they feel as though this is a fast growing market, it's a good opportunity.

GIOKOS: And beer is actually quite defensive in times of hardship, by the way.

EGAN: That's right.

GIOKOS: People still drink beer.

EGAN: And one of their biggest markets is in China, which is the world's biggest beer market.

GIOKOS: Do you think that they're going to start looking at their divisions like Africa, for example, or you know, Latin America and start

actually looking at listing all their divisions to try and raise capital? Is that one way to do it?

EGAN: Yes, that's possible, they could have to look into other ways to monetize the business. For right now, they're focusing on this Asia

Pacific business and you know, it's important to know that while they've said, Anheuser-Busch has said, "Listen, you know, this would accelerate our

deleveraging plan."

They also said that they think that this would be a great jumping off point for them to sort of build a regional champion in consumer goods and they

said that this would be an opportunity for them to even build out more maybe do some acquisitions in the region.

Because you know, let's face it, I mean, the emerging markets right now is where the growth is, and the United States and even in Europe, it's not a

very fast growing market, especially for these mass market beers.

GIOKOS: Fantastic. Thank you very much, Matt. Great to see you.

EGAN: Thanks, Eleni.

GIOKOS: All right, so up next, thank Saudi Arabia for oil under $100.00 a barrel, so says the country's oil minister, that interview and the OPEC

meeting's latest, next.

(COMMERCIAL BREAK)

[15:30:00] ELENI GIOKOS, HOST, QUEST MEANS BUSINESS: Hello, I'm Eleni Giokos. Coming up on the next half hour of QUEST MEANS BUSINESS, you'll

hear from the Saudi Energy Minister on why oil prices haven't surged despite tensions with Iran.

And it's still level in the Women's World Cup semifinal between England and the United States. We'll have the half-time update from our world sports

headquarters. Before that, this is CNN and on this network, the facts always come first. Vladimir Putin has ordered an investigation into the

deadliest incident involving a Russian Naval submarine in years.

Russia's Defense Ministry says 14 crew members died during inhaling toxic gases after their deep-water sub -- most of all, court fired. The vessel

has been moved to a Naval base on the barren sea.

A horrific accident has killed at least 50 people in central Nigeria. Officials say the victims had rushed to collect fuel from spilling from an

overturned tanker when the vehicle exploded. More than 100 people were injured, some of them critically.

The European Council has new leaders for a new presumably post-Brexit era. Belgium Prime Minister Charles Michel takes over as president of the

European Council replacing Donald Tusk. Michel called for a united Europe and said the next five years will be very important for its future.

Congressional Democrats in the U.S. have filed a lawsuit to get a copy of Donald Trump's income statements and taxes. They initially asked for the

IRS to hand over the president's tax returns in April. But the Treasury Department denied the request. The matter will now head to a court in

Washington and could eventually end up before the U.S. Supreme Court.

The Saudi Energy Minister says oil prices would be in the triple digits if it weren't for Riyadh's efforts to calm the oil markets in light of recent

tensions with Iran. This comes as OPEC leaders agree to supply cuts to prop up prices. John Defterios asked the Saudi Minister why it was so

important to reach this deal.

(BEGIN VIDEO CLIP)

KHALID AL-FALIH, ENERGY MINISTER, SAUDI ARABIA: Well, we have to think beyond where we are today. In my role as Energy Minister and responsible

for stability of the oil markets, I have to isolate all other factors. Geopolitical, regional, and just focus on the long-term need to stabilize

oil markets.

And even if U.S. fume which I hope will happen very soon that we'll get to a balanced market by the end of this agreement. I've been around long

enough to know that there will be a period of instability in a few years or imbalance that requires intervention and bringing balance back.

So, it was really critical that we build on the momentum that we've had the last two years and formalize this, so that we're ready to put it in place

when we need to.

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Geopolitical question, but important one for the region. Iran is losing about $50 billion a year in

exports because of the U.S. sanctions. Lost about two and a half million barrels a day in exports in the last year. Isn't this a powder keg in the

region that you have to deal with and a very risky one, put aside the motivations of Donald Trump?

[15:35:00] AL-FALIH: I think we have political issues that are serious with Iran. My colleagues, the Foreign Minister and my colleagues, the

Minister of Foreign Affairs or Minister of State for Foreign Affairs are more qualified to talk about them and how to resolve them. And Iran knows

what it has to do to join the civilized states and be friends with Saudi Arabia.

We've always extended our arms and peace with Iran, and if Iran does the right thing, they'll find us to be very accepting neighbor for them.

DEFTERIOS: The Iranian Minister says he's not going to negotiate, the government is not going to negotiate with these U.S. sanctions, either

squeezing them on oil, which is your portfolio.

AL-FALIH: Yes, I think the exit of Iranian oil to the extent that some of it has exited or has been accommodated by producers like ourselves, we

still have a significant spare capacity that if we need to, we can deploy it to ensure global market stability. So, I'm not concerned at all about

any impact that Iranian oil sanctions will have on us or on the global markets.

I am concerned though about security of oil supplies from threats, from state and non-state actors that we have seen. We've seen ships being

attacked, we've seen pipelines being attacked. We've seen drones being launched from militias that are agents of Iran, and that's putting the

global energy supply at risk.

We voiced this in the G-20 ministerial meeting in Kanazawa three weeks ago, and it continues to be a risk to us today. But we're going do all that is

necessary to defend our territory, our assets, our shipping lanes and make sure that the energy security of the world is not taken hostage by any

regime.

DEFTERIOS: In your multiple decades in the oil business, and I've covered it for 25 years. You would see a violent reaction to attacks like that.

Why is the market so sanguine, if you will, despite the high wire act we see around the Straits of Hormuz?

AL-FALIH: I think part of it is a vote of confidence in Saudi Arabia. The rest of the world knows that the kingdom has redundancy, has stronger

infrastructure and have the will and the capability of defending itself physically against attempts to penetrate.

Another factor is that we've given the right statements to calm markets. But rest assured, if we didn't do that, if we didn't take the measures we

took, oil would be in the triple digits, easily.

(END VIDEO CLIP)

GIOKOS: Fascinating conversation. Joining me now is Antoine Halff; director of the Global Oil Markets Research Program at Columbia University

and former chief oil analyst at the International Energy Agency. Thank you so much for joining us, great to have you on --

ANTOINE HALFF, DIRECTOR, GLOBAL OIL MARKETS RESEARCH PROGRAM, COLUMBIA UNIVERSITY: Thanks for having me, right --

GIOKOS: Triple digits.

HALFF: Right --

GIOKOS: Do you think that would have been one scenario that we would have to contend with?

HALFF: Well, I think with the -- I find his remarks really underscore this how much the market is caught between very opposite risks.

GIOKOS: Yes --

HALFF: They are high supply risks with issues in the Middle East, but also very significant demand issues with concerns about the slowdown, the impact

of the trade war, very bearish market indicators this week, very bearish --

GIOKOS: Yes --

HALFF: Notice it is from an economy in England.

GIOKOS: Yes --

HALFF: So, yes --

GIOKOS: But I mean, oil and geopolitics, it seems like it's a marriage. Not a happy one, but it always -- I mean, the one influences the other all

the time.

HALFF: It's a very busy joint relationship --

GIOKOS: Yes --

HALFF: Yes, right --

GIOKOS: So, this is what I find fascinating. If I look at what oil did today, Brent crude was falling off a cliff, so was WTI, and it's

fascinating because, you know, at the end of the day, why did we see such a drop when this decision was taken?

HALFF: Well, it's very counterintuitive in a way because OPEC really delivered at the meeting on all of the elements they had on the agenda.

They extended backing those mandate, delivered on the formalization and the relationship with Russia and the not OPEC partners. And they extended the

production cut for nine months which was the most bullish way in a way outcome in the agenda, yet Brent collapsed and WTI fell as well.

GIOKOS: And usually when these OPEC meetings happen, I know that there's a lot of to and fro, and you know, who's going to cut, who is going to be at

the receiving end of that. But you've got OPEC and non-OPEC members. You've got Russia that was --

HALFF: Right --

GIOKOS: On board which is a really big deal. We might see a little bit of weakness today, but what are prices going to do going forward?

HALFF: So, what I think is the market is relying on imperfect information. The signals that come from public sources are very detailed, they're very

large(ph), and they are partial and they're not very good in quality. So, one of the issues that the market is not seeing, but we're seeing through

sideline observation is that stocks are starting to fall.

[15:40:00] They rose -- inventories rose dramatically after President Trump announced the lifting of the sanctions waivers back in April, end of

April. So, there was a huge build-up of customer stocks, especially in Asia. For the last two weeks, we've been seeing a draw -- a fallback in

inventories, and the fact that now Iran barrels are off the market. It's starting to squeeze the Asian buyers which are the main market.

GIOKOS: And that's interesting because when we saw what happened between the U.S. and Iran, the oil prices were, you know, rallying quite a bit

because we were worried about the choke point in the Strait of Hormuz. And then you saw Iran shipping oil to China.

HALFF: Right --

GIOKOS: Is that a wild card here that we need to focus on?

HALFF: It is a wild card. So, in the first round of the sanctions between November and end of April, Iran was actually remarkably successful at

getting Iran the sanctions. Shipping oil on tankers that jumped off their transponders and really getting its oil to the market at a discount, but

supplying the market.

Now, we see a shift, and Iran has been loading its oil for the last six weeks, but it hasn't really found a home for it. So, maybe it will unleash

that --

GIOKOS: Yes --

HALFF: Tsunami of oil in China, maybe not.

GIOKOS: That will be interesting.

HALFF: Yes --

GIOKOS: Very quickly, U.S. President Donald Trump and what he's been saying about oil prices because he wants an oil price that is at a decent

level for his producers, but he also wants cheap gasoline prices for consumers.

HALFF: That's always been the case for presidents, regarding of their party affiliation during the --

GIOKOS: Yes --

HALFF: Election year. When the election comes around, presidents want the low points --

GIOKOS: So, we shouldn't worry too much about this?

HALFF: I think we should worry, there's always --

GIOKOS: OK --

HALFF: Risks in the market, so it's a very risky markets.

GIOKOS: OK, Antoine, thank you very much, good to have you on the show.

HALFF: Thanks for having me.

GIOKOS: Thank you so very much. All right, and you saw the score update on your screen, the United States have retaken the lead in that Women's

World Cup final, and you're finding out as I'm finding out because I'm reading this as it's happening. So, England 1, United States 2. It looks

like it's going to be a very good game as we head to the end of that.

So, still ahead, a disturbing story from London, but one that is important to share. Police believe a man stowed away in the under carriage of a

plane from Kenya before falling to the ground. The latest on what we know next.

(COMMERCIAL BREAK)

GIOKOS: To a horrendous story now. And authorities in both Kenya as well as the U.K. are investigating the case of a man who is believed to have

fallen out of an undercarriage of a plane.

[15:45:00] He's thought to have been a stowaway traveling from Nairobi to London. Over the years, a number of people are known to have fallen from

planes over London when the wheels are engaged in preparation for landing at Heathrow.

British police say the body landed near a man sun-bathing in his garden. Nina dos Santos has been following the story from South London.

(BEGIN VIDEOTAPE)

NINA DOS SANTOS, CNN CORRESPONDENT (on camera): It was on this tranquil terrace street in southwest London on the flight path towards Heathrow

Airport that a body plummeted from the sky, falling around about 2,500 feet into the backyard of this property. Just yards away from where a resident

was sun-bathing.

Well, pictures of the scene showed the depression on the ground that this impact had made. And residents say that they're still shocked that this

could have happened in this part of the capital.

UNIDENTIFIED MALE: I thought it's quite frightening as well. My garden is a few doors down from there, so yes, it was quite frightening. As was

coming back on the bus, you could see there were hundreds of people that were coming, and it could have been a major tragedy if he'd fallen on the

crowds over there. It was a tragedy anyway.

DOS SANTOS: Still, little is known about this stowaway thus far, all that is known is that they are male, we don't know their identity, their

nationality or indeed their age. The police have said that they will conduct a post-mortem examination.

But airlines experts say that the conditions that they will have endured inside that landing compartment would have been treacherous for the 18 and

a half journey from Nairobi to London.

ALASTAIR ROSENSCHEIN, AVIATION EXPERT: We're talking about extremely low temperatures. And we're talking here around minus 60 degrees Celsius, and

the other thing is the partial pressure of oxygen is so low that a stowaway will pass out at about 20,000 feet and above 30,000 feet, they will shortly

expire, die. And then they freeze.

DOS SANTOS: This is not the first time that the bodies of stowaways have been discovered either in the back gardens or on roofs of buildings in the

south and western suburbs of the capital, falling from planes that have often taken off from African airports as they're headed in towards London

and the landing gear was deployed.

In 2012, the body of a Mozambican man was stowed away on board a plane which had set off from Angola was found. And in 2015, another stowaway was

discovered after having taken off from Johannesburg. Well, this latest incident will be investigated.

The Kenyan airport authorities said in a statement that they have set up a joint investigation team to work with the U.K. authorities to determine who

this individual was and how he managed to get on board this plane. Nina dos Santos, CNN in Southwest, London.

(END VIDEOTAPE)

GIOKOS: All right, we're ten minutes away from the end of trade here in New York. The S&P 500 could still close at a record high, but before we

get back to talking markets again, remember this? Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: And that's it.

DON RIDDELL, ANCHOR, CNN WORLD SPORTS: Oh!

UNIDENTIFIED FEMALE: Congratulations, Don!

RIDDELL: Oh my goodness, oh my goodness.

(END VIDEO CLIP)

GIOKOS: All right, so one year ago on this program, Don Riddell burst with emotion as England advanced in the Men's World Cup on a shoot-out victory

as the English women's team takes on the U.S., Don is back, will join us after the break.

[15:50:00] (COMMERCIAL BREAK)

GIOKOS: Halfway through the semi-final match between the U.S. and England at the Women's World Cup in France. The Americans are up 2 goals to 1 on

the Lionesses. Christen Press scored the tenth -- in the 10th minute for team USA, then England equalized in the 19th minute on the turf end from

Ellen White and then Alex Morgan on her 30th birthday scored the go-ahead in the 30th minute.

World Sport's Don Riddell is at the CNN Center and I'm sure you're watching so very closely. I have to ask you, are you one of those superstitious

people wearing the same clothes as last year, so that you can make sure that this team wins? You can tell.

RIDDELL: You know, I wouldn't have known what I was wearing last year until you showed that clip before the commercial break. So no, it didn't

even occur to me, I don't have lucky underpants or anything like that --

GIOKOS: OK --

RIDDELL: But some people do, some people do.

GIOKOS: We were just wondering, I mean, what an incredible match, halfway through and we've got three goals. That's fantastic --

RIDDELL: Yes --

GIOKOS: For football lovers.

RIDDELL: Oh, yes, it has been a really good game, really open game. I must say, as an England fan, I wasn't very optimistic after the first 15

minutes because it was all the USA. The England team could hardly get out of their own box, never mind their own half. But they got that terrific

break-away goal through Ellen White, it did come against the run of play.

But that really opened up the game and the Americans seemed a bit more reluctant to press so many --

GIOKOS: Yes --

RIDDELL: Players forward after that point. They did though, as you say, get another goal through Alex Morgan and of course they'll be feeling

slightly more confident at halftime.

GIOKOS: Yes --

RIDDELL: But England, they're in this game and it has been open. It has been very entertaining and that has been a theme throughout this

tournament.

GIOKOS: Yes --

RIDDELL: It's been a really exciting tournament and crystal clear proof that the women's game, women's football really has developed a lot in the

last few years and the entertainment is there for all to see.

GIOKOS: Yes, absolutely, and it's -- you know, the U.S. is three times world champions, and the question is just how prepared are the Lionesses

for this match? I mean, what we did here is, you know, they were watching past games to figure out their strategy.

But you know, and this is mutual ground that they're playing on. So, this is going to be an interesting one to watch as we get into the second half.

RIDDELL: Yes, for sure, I mean, the United States are the favorites, no doubt about it. As you say, three-time world champions. They're the

defending champions, they thrashed Japan in the final four years ago. They've won the Olympics four times.

You know, this team really were the trail blazers for women's football, has been professional here for a number of years and they really have set the

standard for the rest of the world to try and keep up with. England know that, England know that if they're going to win the World Cup, they're

going to have to go through a team like the United States.

And actually, their manager Philip Neville, he used to play for the England men's team has said exactly that. He said as soon as he got the job early

in 2018, the first thing he did was learn everything he could about the United States team because they are the standard bearers.

England are the underdogs, we wouldn't be at all surprised if the USA won this game and went on to the final and won it again, but it's competitive.

Other teams are now catching up with the U.S.

GIOKOS: Fantastic, Don, great to have you on the show.

RIDDELL: All right, sure --

GIOKOS: Much appreciate it. All right, as we said earlier, one group of football lovers were celebrating long before this game began. Team USA's

kick partner Nike, the company says the women's jersey is selling in record numbers. Bruce Turkel of Turkel Brands is back with me.

And you know, this is just testament to the fact that, you know, those that had said, well, women's, you know, football doesn't actually -- you know,

you can't really capitalize on it as much as men's. I think this proves that it's not true. Bruce, are you there?

BRUCE TURKEL, CHIEF EXECUTIVE OFFICER, TURKEL BRANDS: Yes, I am.

GIOKOS: Yes, so what are your thoughts? I mean, Nike, you know, selling basically one of the bestselling products ever in terms of football

jerseys.

TURKEL: I think we are watching history happening. I think we've been talking about women's sports and certainly in this country, we've been

talking about the fairness of colleges supporting women's sports and all the rest.

[15:55:00] But now we're seeing it come to its fruition. And as we said in the earlier segment, money talks. And Nike has shown that their

sponsorship works, their jerseys are selling, and let's face it, the team is doing fantastic. You guys use superlatives like standard bearer, three-

time world champ --

GIOKOS: Yes --

TURKEL: The ones to beat, this is the real deal!

GIOKOS: This is the thing. Can we monetize? Can we further monetize women's football? Because I guess that is the argument -- well, not that

many people are interested in women's football. And I think this match and this game, and leading up to the finals here, we're seeing a very different

rhetoric emerging.

TURKEL: Well, and if you look at -- once again, look at the numbers, by the end of the matches, over 1 billion viewers, that's billion with a "B" -

-

GIOKOS: Yes --

TURKEL: One billion viewers have tuned in. I'm here in Miami, Florida. Some people are into soccer, football, but for the most part, don't talk

about it. But they're talking about this, and I was at a conference and people were leaving or rushing to the lobby to watch the game. This is the

game changer I am thinking.

GIOKOS: Bruce, who's going to win? Who do you want to win?

TURKEL: Oh, we're going to win! USA, of course.

GIOKOS: Hey, I'm South African, I get to ask these questions because I'm neutral. Thank you so much, Bruce, good to have you on the show,

appreciate it. All right, so up next --

TURKEL: Thank you, thank you --

GIOKOS: Just minutes to go until the closing bell and we take a look at the day's winners and losers. Stay with us.

(COMMERCIAL BREAK)

GIOKOS: All right, a few minutes left of trade on Wall Street. This is how the Dow Jones is performing today. Lots of flirting with that positive

and negative line, and as you can see here, this is where the U.S. women's soccer team started scoring goals.

I think that's possibly what's pushing us in positive territory. Who knows? Forty points up on the Dow right now, let's take a look to see how

the other indices are faring. Dow Jones sitting up slightly, we've got the S&P, new record high at this point in time. The S&P keeps shooting the

lights out, it's a fantastic performance coming through for that index and the Nasdaq also sitting up only slightly.

Let's take a look at the winners and losers as we head closer to the end of trade. ExxonMobil, Chevron, all the oil majors coming under pressure,

Brent crude prices, WTI, of course, also took a big knock as OPEC made that decision and as we head closer to the end of trade today.

It's a big good-bye from us, and thank you so much for watching QUEST MEANS BUSINESS, I'm Eleni Giokos. Take care.

(BELL RINGING)

END