Return to Transcripts main page

Quest Means Business

Sinn Fein Tries to Form Governing Coalition in Ireland; IEA Releases Climate Report; Sprint Up More Than 70 Percent After Judge Approves T-Mobile Merger. Aired 3-4p ET

Aired February 11, 2020 - 15:00   ET

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

[15:00:11]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: There are 60 minutes before the close of business. The Dow Jones has been all over the

map, as you can see, during the course of the day. Strong gains evaporated, we will explain why. A couple of moments of losses, now just down a few

points.

Those are the markets and these are the factors and reasons why.

The Fed chair Jay Powell warning the coronavirus could hit the U.S. economy; it's too soon to know how hard.

The billionaire investor, Ray Dalio telling CNN the market reaction to the virus has been exaggerated.

And Sprint closes in on the finish line. Regulators give its merger with T- Mobile the green light.

We are live in the world's financial capital, New York City, on Tuesday. It is February the 11th. I'm Richard Quest and of course, here in New York, as

always, I mean business.

Good evening. We begin tonight with the major markets trying to cling on to gains, records that had been seen, perhaps now evaporating. And it's all to

do with optimism and the slowdown of the spread of coronavirus, which had lifted stocks on Wall Street earlier in the day.

The S&P and the NASDAQ are still on track to close at record highs. The Dow was higher by up to a record and then it fell back. That's the latest

position. You can see on a yellow tag at the bottom if they are records and only the S&P and the NASDAQ are there at the moment, but you never know.

The Dow is having the most difficulty of all and it's because of Boeing and we'll talk about it later.

Investors are looking at numbers that appear to show the spread of coronavirus is leveling off. The death toll is rising. The last 24 hours

saw the highest number of people die in China from coronavirus.

The U.S. Federal Reserve Chair Jerome Powell says the Fed is closely monitoring the virus, and as to whether the economic effects will spill

over from China. He was speaking before Congress, when he told lawmakers it's too soon to know the impact.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: Question for us really is, what will be the effects on the U.S. economy? Will it be persistent? Will

they be material? That's really the question.

I think we know there will be effects on China through some part of the first half of the year and China's close neighbors and major trading

partners in Europe as well as Asia. And we know that there will be some -- very likely some effects on the United States. I think it's just too early

to say.

(END VIDEO CLIP)

QUEST: So we'll return to the Feds' position in a moment, though first we need to talk about Ray Dalio, who is the founder of the world's largest

hedge fund.

Now, as the markets have had wobbles over coronavirus over the last few weeks, Ray Dalio says that the virus is having an exaggerated impact on the

market. He spoke to CNN's John Defterios in Abu Dhabi.

(BEGIN VIDEOTAPE)

RAY DALIO, FOUNDER, BRIDGEWATER ASSOCIATES: Let's assume that it is like a typical virus rather than something that goes out of control, then it will

have a rise and it'll have a decline like SARS did, and we will exaggerate probably its importance over the near term and it certainly has a

significant negative effect on the economy.

But these are temporary things and in relationship to the longer term things, they're not that big a deal.

I would say from my contact with the leadership and watching how they're doing things, I think that they understand information flow very well. They

have tremendous ability to understand what is going on and a tremendous bureaucracy in terms of the ability to respond, then they are bringing in

the World Health Organizations and so on.

So there's the capability of dealing with this in a forceful way. So I would say the management of it is also good.

So my inclination is that this will probably be something that in a year or two, we won't be talking much about. It'll pass like SARS sort of that did.

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Interesting you say it, because we come into this crisis with projected growth of six percent,

which is the lowest in nearly 30 years after that boom we've seen over the last three decades. Are they vulnerable to a shock?

And if you get down to four percent growth, what's that mean for China working its way out?

DALIO: I think there are other issues in China that are issues. They can't leverage the economy the way it was. This is -- China is at a state where

it's not going to be able to grow at the pace that it did before.

[15:05:06]

DALIO: It's more expensive in relationship to the rest of the world. It's in a position where the economy has been more leveraged up. They are

restructuring the debt and so on.

At the same time, there is an innovation that's taking place. Letting loose the entrepreneurship and technology, they have a lot of free data. They're

fabulous in terms of data with AI.

And so you're seeing them become very competitive in the technology industries and a number of other industries.

So I think you're not going to see China grow at the rate that it has grown, if we compare it to the past. And you think that less than six

percent is disappointing, that's up to you, but not very disappointing.

But I think you have to also break it into its pieces, and so in terms of any of its innovation, it's a competitor and will become an increasing

competitor relative to the United States in the hottest areas, right? As well as other areas.

The geopolitical will be a competitor, the technology will be a competitor. We're in a world now, which is China is very effective in many ways, right?

DEFTERIOS: You don't see it as a Black Swan events in China that tilts the global economy into recession. I mean, three percent growth is not

fantastic.

DALIO: I'm saying, I'm not an expert on the virus. But if you're asking me about viruses, which I've looked into and so on, in terms of the coming and

going and this is something that's worse than SARS, but not Earth shattering, it'll come and go like SARS did and we will be beyond that and

other issues that are bigger and more important are not being discussed.

It's just the one that's on the table right now in front of us, so it gets the headlines and we're talking about it. But if you're dealing with, how

can China, let's say leverage its economy, that is going to be more of -- there are other problems that China have, that probably will be bigger than

this problem.

(END VIDEOTAPE)

QUEST: Ray Dalio. Clare Sebastian is with me. He is right, isn't he? I mean, it's the issue de jour, therefore it gets the attention, but the

bounce back will take care of most of the shortfall.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, that seems to be the feeling, Richard. Capital economics, for example, says that the lost output

will be made up in the next few quarters, and by the middle of 2021, global GDP will look as if this never happened. That's their assumption.

QUEST: Just to pause there just for one second, even the number of people killed/died as a result of this. It is awful to say, but it's less than one

would get in a regular flu season, where hundreds of thousands of people pass away.

SEBASTIAN: You know, I think with a lot of these things, it is possible certainly looking at the markets to talk it up to something more than it

actually is. And the presumption that we're getting certainly from the analysts from the banks looking at this is that it will be a sort of a V-

shaped recovery that this is going to be possibly just a Q1 story. And then the output will come back.

And we've seen, Richard, in some of the stocks that we have discussed this week that we might be having ...

QUEST: There's the stocks.

SEBASTIAN: ... a sort of buy the dip opportunity, these are some of the - -

QUEST: We were talking about Wynn Resorts yesterday.

SEBASTIAN: We were talking about it Wynn Resorts yesterday. They are very exposed with this, about 70 percent of their revenue from Macau and backup

today, about three and a third percent, but they are still down five percent on the year. So this isn't -- we're not finished with the V yet

when it comes to Wynn Resorts.

Similar story for Um China, which gets analysts from --

QUEST: But all of these could have been -- I mean, that they are at risk.

SEBASTIAN: Right.

QUEST: If this had turned worse and for longer, then these are the ones that are at risk.

SEBASTIAN: Absolutely. And this is exactly what we heard from Jerome Powell, the Chair of the Fed today that the key word he used was

persistent. If this is going to become a persistent problem, if this lasts longer than expected, then you might see a material impact on the U.S.

economy.

He didn't say what that would be. He said we must resist the temptation to forecast this at the moment because it's so uncertain how long it will

last. It's so uncertain how serious it will be. The data at the moment is based on assumptions that are not rooted in facts yet. So that's the

position that he took.

QUEST: But I get the feeling policymakers are sort of taking the view, we'll wait and see.

SEBASTIAN: Absolutely.

QUEST: There is no, you know, we don't know. And we still don't really understand. Every number that comes out of China is qualified by the

comment, these are numbers provided by the Chinese authorities.

SEBASTIAN: Absolutely, and you know, analysts and economist that I speak to say exactly that. That adds to the level of uncertainty around this

because you don't know whether you can trust the data.

QUEST: We'll talk more about it. Thank you. Let's do that with U.S. companies that are feeling the effects of the crisis.

Under Armour is warning that the coronavirus outbreak could cause up to $60 million lost sales this quarter and it gets worse later in the year.

Shares of Under Armour are down, sharply down, 17 percent as a result of that. But to be fair, Under Armour does have a variety of other problems,

which are giving it cause for concern as well besides just that.

[15:10:12]

QUEST: John Denton is the Global Head of the International Chamber of Commerce. He joins me now from London. What are your members telling you?

What do they actually want? Obviously, they're concerned, but what do they want and need?

JOHN DENTON, GLOBAL HEAD, INTERNATIONAL CHAMBER OF COMMERCE: In the context of the virus, I think that the description that Jay Powell gave is

actually pretty, pretty accurate, and the real worry we have is, is going to be persistent? We know it's pernicious, but will it be persistent?

And it's just too early to tell yet as to whether that's the way it will play out. Again, a bit like one of your other guests, I'm not an expert in

the virus itself, but what I do know and from the members, and from the businesses in China that participate in the ICC, we have millions there.

There is genuine concern.

There's been a lot of nervousness about the way in which the virus was first handled, when it was best understood for what was going on in China.

But I think what people are taking a little bit of heart from is the way in which the Chinese authorities have actually acted quite decisively in many

respects.

Surprisingly, decisively in a way that a number of countries could not do so to close this down. But of course, we've got people there -- sorry.

QUEST: Is it possible -- sorry -- is it possible --

DENTON: We've got people there whose families have lost loved ones. We've got people there whose families are actually still in suffering.

So obviously, I think the rest of the global community will reach out and we give our empathy and our sympathy and support to the Chinese business

community and to the citizens there.

QUEST: Is it possible that your members have had to change supply lines at very short notice and have managed to put in place -- because your global

members will have been having problems sourcing matters from China?

DENTON: Well, look, I mean, the reality is that most of the effect at the moment is being felt within China. We're also seeing particularly around

China, particularly in Asia-Pac. I mean, I'm an Australian, you're seeing some of the effects in Australia.

So you're actually seeing some deliberate change to the way in which supply chains are operating. And in a funny way, some extraordinary innovations

that are coming into it.

But if this is persistent, and that is the problem, then we're actually going to see some significant shifts in the way in which those companies

operate. And actually, a lot of that may will be quite detrimental, I think, to the growth outlook for China, and this is the problem.

But also to the growth outlook for countries peripheral to China, particularly in Asia-Pac, and actually in countries like Australia, and

then more broadly, where you've got the interrelationships.

The big difference between this and say SARS is just the size of the engagement of China in the global economy in 2020 compared to where it was

in 2003.

QUEST: But what do you mean by there could be some longer lasting shifts? If people -- are you suggesting if people have managed to circumvent China,

they may stay circumvented?

DENTON: Well look, think about, for example, overseas students in say, Australia. At the moment, there's a fundamental disruption to the way in

which the overseas student market is operating in Australia. That's coming about because students cannot travel to Australia. Students are being

forced to stay back in China.

What you'll find is that work around if it actually is persistent, it may ultimately have an impact in the way in which that sector of the economy in

Australia will operate.

QUEST: Can I ask you about trade tensions and the alleviation of those with the Phase 1 agreement between the United States and China? There has

been much rah-rah about that Phase 2 when it comes along.

But your members have been concerned for many months on worsening trade relations, not only with China, but elsewhere in the world. Are they seeing

things getting easier?

DENTON: Well, I mean, I think the first thing to understand about the U.S.-China trade issue is that we're talking about Phase 1 and Phase 2.

It's actually a game in two halves.

The first half, no doubt, has actually, clearly, from my perspective, being a clear win for the U.S., and frankly, the situation for China is actually

not so bad when you actually look at in its totality. Where the losers are is with the W.T.O. and actually small countries or small powers that

actually rely upon the multilateral trading system.

Phase 2 is going to be a different game, and clearly, the outcome of Phase 2 is going to be kicked down the path beyond the U.S. elections in

November.

And so -- and the reason that's happening is it's just much harder. Phase 1 was around trade and investment. Phase 2 is going to be around structural

reforms to the Chinese economy, and that's going to be much harder to deliver.

Now, the good thing about Phase 1, it has actually taken a lot of the tension and a lot of the volatility out of the global markets and we are

actually seeing some confidence come back in.

So in many respects, Phase 1, the first half is actually a net win, but Phase 2 is going to be a problem and underlying that, the losers in the

W.T.O. and the challenges we now see and clear risk we see, the small powers.

If two major powers can operate outside the multilateral trading system, what does that mean for the reliance on the multilateral trading system

which is so critical to the way which trade disputes are understood and managed for small and medium powers? We want them back in and it's a

warning signal to the W.T.O. that it must reform itself.

[15:15:27]

QUEST: Good to see you. John Denton, thank you for joining us from London tonight.

DENTON: Thank you, Richard.

QUEST: The United States New Hampshire primary is well underway. This time, Wall Street doesn't seem too worried about who wins. We will analyze

why.

Sprint is up more than 70 percent on Wall Street. It was a bruising fight. However, the merger with T-Mobile finally looks set to reach the finish

line. QUEST MEANS BUSINESS live from New York.

(COMMERCIAL BREAK)

QUEST: A pivotal day perhaps in the Democratic presidential race as voters head to the polls. It's in the New Hampshire primary.

And the markets are watching very closely. Have a look at it. Bernie Sanders leads in the most recent polls and that's for the liberals, you can

see there. You may think the Democratic socialists will be the kind of candidates to worry Wall Street.

So the fact that U.S. stocks are records, bearing in mind, but that could also be that they don't see him as being able to beat Donald Trump. You

place you money, it takes your choice on that one, even if you want to even get that far.

Interestingly, Pete Buttigieg there, although he doesn't reach as high with the liberals, he remains constantly high with the moderate conservatives.

And if you take those two together, you're left saying that he is the choice, if you like, of the mainstream.

Miguel Marquez is in Dover, New Hampshire. First of all, where are you? And secondly, how true is that? That Buttigieg has taken that position where he

is acceptable to all?

MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: So Dover is just north of Portsmouth, which is just north of Manchester, if you know New Hampshire at

all.

It's a very liberal area of the state and what you were just describing there is what we are seeing here. Most of the people have been doing sort

of an unofficial exit poll from voters and I've talked to dozens probably, over a hundred, 120 or so throughout the day, and most, the vast majority

are for Bernie Sanders. But number two is Pete Buttigieg and then I'm hearing a lot of people saying that Amy Klobuchar -- Senator Klobuchar and

Warren are also sort of in that top four.

[15:20:06]

MARQUEZ: What is most surprising perhaps about talking to all of these voters all day is that not a single one of them said that they voted for

Joe Biden, which is a bit of a surprise, even, you know, in a liberal area like this.

This is one of six wards in the City of Dover. We watch it very carefully because Dover, this city is typically a bellwether for how the state will

vote as well.

The last four contested Democratic contests, it matched exactly. The city matched exactly how the state ended up voting, and not just number one, and

number two, but number one, two, three, four, five candidates when you had a big field of Democrats. So it's interesting.

QUEST: And when you take the winner of New Hampshire and you extrapolate to the rest of the primary season, in other words, does he or she who wins

New Hampshire tend to go on to be the nominee?

MARQUEZ: Well, certainly, they have a good showing in Iowa and New Hampshire and especially if it's a surprise.

I mean, I think a lot of people because Senator Sanders is from next door in Vermont. He had an organization here. He ran very well here in 2016,

winning New Hampshire in 2016. He ran very well in Iowa, almost besting Hillary Clinton there that there was a sense that he was going to perform

strongly in these states.

But Pete Buttigieg coming on strongly. Amy Klobuchar, she had a very strong performance in a debate just a few days ago, and a lot of people I've

spoken to today said, look, we saw her in the debate, and that's what brought me over.

There's a lot of last minute deciding voters seem to be going toward Amy Klobuchar. So I think once you move beyond these first states, and you get

to South Carolina and Nevada, where you have more African-Americans, more Latinos, a much more diverse sort of electorate, then you really get the

sense of it.

But it won't be until Super Tuesday, March 3rd where you have about 38 percent of those electors available that you'll really get a sense of where

this race is.

QUEST: I think you can answer this next question and a yes or no. And I'll hedge my bets here. Are we likely to see anything like the chaos and

confusion that we saw with the Iowa caucuses when it comes to results time?

MARQUEZ: No.

QUEST: Thank you.

MARQUEZ: No, I even asked that one before.

QUEST: Miguel Marquez, good to see you. Thank you very much. In Dover, New Hampshire.

Now, the death toll from the Wuhan coronavirus has now topped 1,000 worldwide. More than 43,000 people have been diagnosed with the infection.

In Japan, all sick passengers from the quarantined, Diamond Princess cruise line have now been taken off the ship and another ship, the Westerdam

belonging to the Holland-American company has been refused permission to dock in Thailand because it is carrying passengers who boarded in Hong

Kong.

A hundred and thirty five people aboard the Diamond Princess have now tested positive for coronavirus. There's a tiny bit of good news in all of

this as Matt Rivers explains.

(BEGIN VIDEOTAPE)

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Here on Tuesday in Yokohama, Japanese health officials reporting no additional people testing positive

for this coronavirus on board the Diamond Princess. That is a stark change.

It's the first day and several that we haven't seen the number of cases go up, especially considering what we saw on Monday when an additional 65

cases including five crew members were reported.

That said we have spoken to multiple health officials who say they are expecting the number of coronavirus cases to rise over the next several

days.

We are still in the middle of this two-week quarantine process where everyone has to stay inside their rooms except for limited amounts of time

during the day imposed by Japanese health officials.

Now, health officials say that even if the number of viruses go up, they do not believe that the people who will eventually test positive picked up the

virus after the quarantine started. They believe that these people contracted the virus before the quarantine period. They believe the

quarantine is working.

That said, we've spoken to people on board who are feeling uncomfortable. They're feeling tense. They're feeling that maybe the health officials are

not doing the exact right thing here, but Japanese health officials are sticking by their plan.

They say the quarantine is the way forward. The ship currently out of the harbor in Yokohama for some routine maintenance, expected to come back in

around 9:00 a.m. on Wednesday morning, and the quarantine will likely stay in effect until February 19th.

Matt Rivers, CNN, in Yokohama.

(END VIDEOTAPE)

QUEST: Sprint and T-Mobile have cleared their final hurdle and will soon merge. It's the end of the name Sprint, and the beginning of a new T-Mobile

that hopes to compete with AT&T and Verizon.

(COMMERCIAL BREAK)

[15:27:53]

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment.

We're going to be looking at how Sprint and T-Mobile. Finally got their merger over the finish line. What does it mean for the rest of the telecom

industry now that there is this new larger player?

As more airlines halt flights to China, how the crisis is affecting the travel industry.

As we continue, this is CNN. Here on this network, the facts always come first.

The World Health Organization is warning that the noble coronavirus could create havoc in their words if it reaches a country with a weak health

system.

The virus has killed more than a thousand people and infected 43,000 people worldwide.

The U.S. may announce a deal to deescalate violence with the Afghan Taliban as soon as this week.

Two U.S. Defense officials say that deal would call for a ceasefire period with hopes of reaching a peace deal in the near future.

Officials warn there is skepticism as to whether the deal is feasible.

Top Justice Department officials are undercutting their own prosecutors with Donald Trump's informal adviser Roger Stone.

The prosecutors had recommended that Stone face seven to nine years in prison over charges stemming from the Mueller investigation.

However, President Trump blasted the recommendation on Twitter and a senior official says, there are now plans to reduce the sentencing recommendation.

It all follows the announcement, a top Mueller prosecutor withdrew from the case.

In Beirut, protesters clashed with Security Forces as they tried to stop a confidence vote in Parliament on Tuesday. They say Lebanon's new government

fails to address their demands and can't help the country out of its deep financial crisis.

The government won the confidence vote by a large margin. Hundreds of people were injured in the clashes.

And in the U.S. presidential election, the first primary contest is underway. New Hampshire voters are casting ballots right now.

The Democratic results could narrow the field. There is a Republican primary, too; however, President Trump is expected to win that contest,

hands down.

So, Ireland's election results are reshaping a political landscape that's hardly changed in a 100 years. Now, let's go through this slowly and

carefully. Sinn Fein, which was once the political wing of the IRA and led for many years by Gerry Adams; an outcast party, but is now trying to form

a government.

If it was successful, and you look at the numbers, can you see why? They're only one party -- the one seat membership behind Fianna Fail. It would be

the first time since Ireland achieved independence that neither of the country's two main parties was in charge. Sinn Fein's leader, Mary Lou

McDonald says the result makes the prospect of Northern Ireland, leaving the U.K. to join the Republic more likely. But then of course, you've got

the current Prime Minister Fine Gael comes in as third and Fianna Fail, whether or not they're going to manage to pull together. Nic Robertson is

with me. This is very interesting, Nic Robertson. Who will be the next Prime Minister or Taoiseach?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: You know, there's even an idea that it could be a rotating Taoiseach, that you could have two

people or perhaps more because no one has really specified it yet, doing that job. That was one of the suggestions coming from Mary Lou McDonald's

camp. Look, I think at this stage, Richard, it is just anyone's guess about what's going to happen.

I think, clearly, Leo Varadkar is not going to become a Prime Minister again, Taoiseach again, he's made that clear. He said that he knew that

there was going to be change. Micheal Martin; leader of Fianna Fail, it could be him. This is his last shot for him in his sort of political career

becoming Taoiseach. But it's Mary Lou McDonald that people are focusing on now. What would her pathway to becoming the first female leader of Ireland

be?

Well, she would have to form a coalition. She has 37 TDs as they're known, MPs if you like in the dail, the parliament as it's known. At the moment,

to get a majority, she needs to get over 80. Well, there are about 50 independents --

QUEST: Right --

ROBERTSON: Means left-wing partners. It would be a huge job to try to corral all those together and probably politically impossible.

QUEST: Is it -- is it -- for those of us who are not as familiar with Ireland's politics, is it out of the question that Fianna Fail or Fine Gael

would go into government with Sinn Fein for the prerequisite number of seats, cabinet seats roles and responsibilities.

ROBERTSON: Fine Gael, Leo Varadkar; the current Taoiseach has said he won't do it. Micheal Martin; leader of Fianna Fail and some others in his

party have indicated this may be a possibility. But at the moment, the two main parties --

QUEST: Right --

ROBERTSON: Seem to be stepping back and leaving it with Mary Lou McDonald to figure out how she's going to do it without them. Parties are saying --

QUEST: Right --

ROBERTSON: And particularly Sinn Fein are saying they're going to have a series of talks and meetings over this week to see what's feasible.

QUEST: All of this happens as the U.K. negotiates its future trade relationship with the EU before the end of the year of which a crucial

element is the relationship, the cross-border relationship with the south.

ROBERTSON: This comes at a difficult time in the negotiations, in the trade future relationships, trade negotiations, no doubt. It comes at a

fraught time between Westminster and the politics of Northern Ireland because the unit as politicians in Northern Ireland who want to remain part

of Britain feel that they're being made ever so slightly less British that those ties are being cut.

And they recognize that Mary Lou McDonald and Sinn Fein having a bigger voice, remembering that the second largest party, very big party in the

north are now the second largest party, although they won the popular vote in the elections last week --

QUEST: Right.

ROBERTSON: They are absolutely going to press the case and have said they will, and with the European Union to push for a united Ireland. All of

that, put all of that together and that makes what happens along the border between the north of Ireland and the south of Ireland and Britain's trade

talks with the European Union, it makes them harder. There is no doubt about that.

The current government in Ireland at the moment --

QUEST: Yes --

ROBERTSON: Leo Varadka will stay in place until there's a replacement. So the difficulty is to form a new government, are also going to play into

that. But one can anticipate that by the time the crunch time comes later this year for that deal, there will be a new government in Ireland.

QUEST: It's just a question of how strong that government is and how still -- anyway --

ROBERTSON: This is a --

[15:35:00]

QUEST: We will talk about this. Plenty of time to arrive -- thank you. Good to see you, Nic Robertson. The climate crisis when we return, we'll

analyze new data on global carbon emissions. It comes from the International Energy Agency, and we need to get to grips with it in a

moment.

(COMMERCIAL BREAK)

QUEST: Soaring like an aeroplane or a rocket. It was Sprint shares that follows a year-long effort to merge with T-Mobile and create a new

dominance while its carrier in the United States. Now, it seems to be at an end. The shares are up more than 70 percent, just look at you. T-Mobile

also nice, good robust 12 percent, but its Sprint that's really got it, 76 percent for Telco, that people wondered why they were almost out and done

because look at it, it's down at $8 a share. But this is really changed it.

It was a $26 billion deal that's been approved by a federal judge who rejected the lawsuit, well, by several states. I spoke to the CEOs of

Sprint and T-Mobile when their merger was first announced. John Legere laid out the case for this deal.

(BEGIN VIDEO CLIP)

JOHN LEGERE, CHIEF EXECUTIVE OFFICER, T-MOBILE: Regulatory approval prospects have never been better, right? What we have now is we're going to

invest $40 billion to create the world's -- nation's first deep and broad 5G network that the country needs. Second, the un-carrier or the competitor

that we've created, we're going to super charge it. Consumers can look to broader services, faster speeds and lower prices, and the country can look

forward from day one, more jobs.

(END VIDEO CLIP)

QUEST: Now, Brian Fung is in tech industry, he is in Washington. This is now a done deal, when will they close the deal?

BRIAN FUNG, CNN TECHNOLOGY REPORTER: Well, that's a great question. I think now that the deal is allowed to move forward, we could see approval

finally in a matter of weeks. Remember, this is a landmark decision by a judge not to take the arguments of more than a dozen states who are seeking

to block the deal, arguing it was anti-competitive.

Now, two things that are going to happen now, one, Sprint is going to go away, so at some point, if you're a Sprint customer, you will soon become a

T-Mobile customer. Second, a number of prepaid customers that are currently with Sprint are going to be spun off and launched under a new brand that is

going to be owned by "Dish Network", the satellite provider.

Now, a big question here is whether or not that new provider by "Dish" can actually effectively compete with the other three carriers, "AT&T",

"Verizon" and the new T-Mobile.

[15:40:00]

Of course, a number of states have criticized this deal saying it will lead to higher prices in the long run, and could be bad for competition,

allowing carriers to coordinate with one another in ways to keep prices high.

QUEST: Right --

FUNG: Judge Victor Marrero decided not to buy those arguments, saying he found the arguments by the companies much more persuasive.

QUEST: Brian, thank you, sir for giving the interview --

FUNG: Thank you --

QUEST: Of the latest position in Washington. To get to this point, T- Mobile and Sprint had to clear a whole succession of hurdles. For example, there was the lawsuit from 13 attorneys generals, who said prices would

rise for consumers. The judge ultimately disagreeing and over the hurdle they went. Then there was a deal with "Dish Network", forced to sell off

some subscribers over anti-trust concerns. That didn't last long either. Over we go.

Massive lobbying effort, Legere met many times with the FEC and DOJ, that raised eyebrows, even staying at a Trump hotel in D.C., over we go. The

deal is expected to finalize in April. The Sprint name will disappear, it will disappear and the new T-Mobile still in third place. Who else is

there? Oh, well, you can see the formidable "AT&T", parent company of this network, pays my wages.

"AT&T" is still in first place, "Verizon" is in second place, third place the new T-Mobile. So Lance Ulanoff is here, Mashable's former editor-at-

large joining me now. So does being number three, but a bigger number three matter? Does that actually count?

LANCE ULANOFF, SOCIAL MEDIA & TECH EXPERT: Oh, yes, I certainly think it does. You know, it's just -- it's a bigger network. It's -- I mean, it's

really about technology because they're combining, you know, these networks, the 5G plus, which is probably the most important part of this

deal as far as looking forward. You know, they have slightly different 5G technologies, but they can be combined. And there's more coverage for more

people. So, if you're a T-Mobile customer, you have 5G coverage theoretically everywhere.

QUEST: But why am I reading in my newspapers that this is a game-changer. This deal rewrites Telcos in the United States?

ULANOFF: I mean, I guess it's -- look, we've had -- over the long history of Telcos, we've had the big giant Mabell and they break it up, and then we

have all these companies, and we have these mergers and consolidations. But we always have this idea that we're going to try never to have this big

conglomerate one company, and here we are again boiling down to essentially three.

Now, I know, they're trying to prop up "Dish" like some sort of wobbly table. But I don't think that's really going to work here. You know,

customers aren't going to -- may not stay with it, and certainly aren't going to march over to it. So, we have a consolidated area at a moment in

time when the government is taking a hard look at tech mergers and acquisitions. That's what's so weird about this moment is that, this has

happened, the federal government said this is OK.

And yet we have legislators and potential presidents saying it's not good to have this consolidation, we have to stop it, we have to unravel it.

QUEST: Is it realistic though? I mean, I think to the U.K. which I'm familiar of course, has numerous operators, Vodafone and the like, and

several smaller operators. What's lacking here seems to be the smaller operators. But it's hard --

ULANOFF: Right --

QUEST: To see how they survive. I mean, I see adverts on television for some strange ones that claim that they're half the price.

ULANOFF: Well, those are NVNOS, right? Those are companies that are using the infrastructure of the bigger Telcos to basically do their service. So,

they really -- they didn't build the wires, the cell towers, all of that --

QUEST: But if they're offering cheaper prices than the big --

ULANOFF: Right --

QUEST: Three across their networks, then that is -- that is a competitive advantage, you're looking cynical --

ULANOFF: It's -- well, because they're kind of competitors, but they're not running their own networks, they're kind of doing it. It's just --

they're kind of a small, very tiny piece of this picture. The ones that matter now are the big three. And what T-Mobile is going to do, and

obviously in the 5G space, but also how it's going to encroach on home cable, sort of Broadband access, what it's planning to do there. I mean,

this is going to be extremely disruptive.

QUEST: Before we finish, I want to just get your view. We've got "AT&T" parent company of this network with its policy and strategy of media, it

owns the all-time Warner them, now "Warner Media". You've got T-Mobile sort of doing its own thing, but not in quite the same way in terms of content

creation --

ULANOFF: Yes --

QUEST: And you've got -- and the rest of us got Verizon basically saying, we made a mistake in all these other things, we're not going into the

content creation, we'll buy it and we'll make it that way.

ULANOFF: I think that it's going to be very interesting to see who doesn't go into content creation. Because everyone wants to -- even though that's

supposed to be not what you have in monopolies to allow people to have sort of both the content and the delivery platform, that's what's happening

everywhere. I fully expect with T-Mobile especially if they're pushing into the home, Broadband access to push into content as well --

[15:45:00]

QUEST: Creation?

ULANOFF: Yes, but everybody does it sort of --

QUEST: Right --

ULANOFF: What they do is they don't actually create it. They hire some people, and if they see a long road to great revenue, they will start to

create it on their own. But that's not going to happen right away at all.

QUEST: Good to see you --

ULANOFF: Good to see you --

QUEST: As always, thank you. Well, there's positive news to bring you in the developments in the climate crisis. The global carbon dioxide emissions

from energy use has stopped rising in 2019 even as the economy grew by nearly 3 percent. The new data comes from the International Energy Agency

that says reduced emissions from advanced economies helped offset a rise in other countries. That is good cheer indeed.

But emissions still need to fall to meet the goals of Paris, one of the biggest contributors to the earth's carbon footprint is the production of

cement. I know, commoner garden, ordinary, but crucial cement. John Defterios visited U.S. producer looking to make concrete change in this

edition of the "GLOBAL ENERGY CHALLENGE".

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): Building cities, connecting communities, it's an often overlooked foundation that's

fundamental to human life -- concrete.

UNIDENTIFIED FEMALE: Concrete is the second most consumed product in the world next to water.

DEFTERIOS: But cement, the main ingredient in this ubiquitous material comes with a huge carbon footprint. It's one of largest industrial sources

of CO2 responsible of up to 8 percent of global greenhouse gas emissions. This is a problem that LafargeHolcim, one of the biggest cement producers

in the world wants to fix.

JAMIE GENTOSO, CHIEF EXECUTIVE OFFICER, U.S. CEMENT, LAFARGEHOLCIM: This is our plant in Florence, Colorado. And it is a great example of what we're

doing to improve our environmental footprint. First and foremost, you see behind me, we've got the solar field. We also use tire-dried fuel here from

tires that are literally collected in the Denver area, we chip them up and use them as fuel in place of coal or packed coke.

UNIDENTIFIED MALE: Holcim control --

GENTOSO: So behind me here is the control room, being able to collect all the data that we collect, the equipment basically learns from itself. And

we can run the equipment much more efficient.

DEFTERIOS: So power-saving measures and cleaner energy sources only solve 40 percent of cement's emissions problems.

UNIDENTIFIED FEMALE: Sixty percent of emissions comes from processed emissions. The main constituent in cement is limestone. So, limestone is

CaCO3. We need to heat that up to about 2,800 degrees so that it becomes free lime which is CaO, and so in that process, CO2 is driven off into the

atmosphere.

DEFTERIOS: The company has developed a low carbon-blended cement line called Enviro-Pour. These cement mixtures use alternative raw materials or

those bound for the landfill.

UNIDENTIFIED FEMALE: So, this is a fly-ash-bonded cement. Fly-ash is a product of coal combustion literally flying through the air, it can be

collected and utilized in concrete. We've been producing these cements for 20 years or so, but they haven't caught on in the marketplace.

DEFTERIOS: Just up the street, Castle Rock Construction Company has been using LafargeHolcim sustainable cement on Colorado's major highways.

RALPH BELL, CHIEF EXECUTIVE OFFICER, CASTLE ROCK CONSTRUCTION COMPANY: We were very nervous about it to begin with, and concerned about the quality

of their product, but it's turned out great. It's a very sustainable product in the last 30 or 40 years, and can be recycled, but there's more

progress that needs to be made.

DEFTERIOS: With the use of concrete expected to rise and a slow-to-change industry, the heat is on to decarbonize cement.

UNIDENTIFIED FEMALE: The next step is working on carbon capture, one of the most exciting things that we're doing right now is working out a

scoping study, so the unit that we're looking now will actually capture more than 700,000 tons of CO2 per year. The society is built on concrete,

and we wouldn't be able to exist without concrete. I think their industry has ways to go, and will continue to evolve and continue to decrease our

carbon footprint.

DEFTERIOS: John Defterios, GLOBAL ENERGY CHALLENGE, CNN.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

[15:50:00]

QUEST: The anxiety over the Wuhan coronavirus continues to take a toll on the aviation industry, we talked about it last night. American Airlines and

United are suspending flights to Hong Kong, saying demand for seats is down. American Airlines had already stopped operating to mainland China. At

one point this year, demand for travel from the U.S. to China dropped more than 58 percent compared to this time last year, according to the travel

app Hopper which predicts prices for flights and hotels. Hopper's economist Hayley Berg joins me now from Boston. What are you seeing? Just how bad is

it for those -- for those airlines and those prices?

HAYLEY BERG, ECONOMIST, HOPPER: So far, we've seen that 58 percent drop is the biggest. So far we do expect it to continue. We've already seen some

airlines adjust their expectations for capacity all the way through the end of April. So definitely, it remains to be seen how far in spread this

capacity cut will be. But today, we're expecting about 5 percent of U.S. international capacity to be cut out of the market until this virus is

cleared up.

QUEST: Are you seeing any spill-over into other routes? In other words, a not just direct to China or to Asia, but, for example, Trans-Atlantic? Are

you seeing any weakness or softness in those pricing pressures?

BERG: We're seeing the most price impact from the U.S. and the North American region to Asia and southeast Asia. So far, there hasn't been an

impact on Trans-Atlantic routes primarily because China was such a connecting country for access to other parts of southeast Asia, and without

those connections, there's much less capacity, which is driving up prices to some of those other regions.

QUEST: OK, talk about Hopper, which is -- I confess, I've used several times in terms of finding flights. How do you do it? I mean, how does it --

how does it work out when the best time --

BERG: Yes --

QUEST: To buy a ticket is?

BERG: So the best predictor of future prices and demand are historical demand and prices. So, we're using machine-learning and AI, in 5 years of

historical data, so about 65 trillion data points to predict what we think the best price will be for consumers, and then we send them a notification

via the app as soon as that price is available.

QUEST: And what's the -- I realize, you know, you're from Hopper, but what's the hour-range in that thing? You know, because obviously an

exogenous event can send things completely off the charts.

BERG: Yes, when there is an impact on demand, something like a coronavirus, so even a hurricane, we do see differences in how people shop

and the prices available in the market. But again, since we have such a long range of historical data, we're able to look back and other similar

events, other outbreaks like zika or hurricanes, blizzards, to see how a demand in prices moves at those times, and help us adjust the forecast.

QUEST: It's extraordinary the amount of data that you must be getting in to be -- because honestly, I've used it on several routes when I've been

looking to buy tickets, and it's extremely effective. So congratulations on that. Thank you for joining us and talk about -- we'll talk more about this

in the future. Thank you, ma'am, for joining us.

[15:55:00]

Now, a last look at the markets. Let me go -- come over and join me. I see records ahead! Two records for you tonight, S&P 500 at a record high, the

Nasdaq at a record high. I'm guess that if you look at the level of that, they will hold and we will go into a record for those. The Dow Jones is up

23 points, no records on the Dow, but it is still holding 29,295. That's the way the market looks -- what a weird sort of day it's been. But we'll

have our profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment. Well, the way in which the coronavirus is hitting economies and what's happening as a result. The fact is Ray

Dalio tonight was correct when he said -- not that he needs me to give him a -- to say that about him -- but the long tail of coronavirus will have

limited economic impact over the long term. There will be a bounce-back and in a year or two time, we'll be wondering what the fuss was.

Now, that is not to diminish those who have been killed by the virus or indeed the quarantines and the public inconvenience to people's lives. But

on an economic strict economic front, the bounce-back that takes place after these sort of incidents, well, it continues and you pretty much end

up net-net. There's strong evidence for that, from SARS, from bird flu, from mess -- all the others as well -- even earthquakes to some extent, the

bounce-back can be quite strong.

And that's where we are tonight. Unfortunately, we talk about this at a time when the death toll is at its highest, but there may be a scintilla of

good news. The number of infections arguably is just starting to drop, and that in and of itself suggests it may have crested, and the long tail may

be about to begin. We'll follow, we'll watch carefully.

And that is QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable.

Our special coverage of New Hampshire comes next.

(BELL RINGING)

END