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Quest Means Business
Europe Swelters Under Record-Breaking Heatwave; Europe Braces For Sudden Slowdown Of Russian Gas Supplies; Portuguese City Leira Recovering From Devastating Fire; China Reports Uptick Of COVID Cases Amid Scorching Temps; Ten-Year-Old Checkers Champion Raises Money For Ukraine's Army; Cruises Stocks Soar As BOFA Predicts Strong Travel Trend. Aired 3-4p ET
Aired July 18, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CNN INTERNATIONAL HOST: So just when you thought he could report a positive day, the markets turn lower this afternoon. If we take a
look at that Big Board, it is now down about 116 points.
I mean, the gains weren't anything to ride home, but they were gains. Now the market, all three indices in the red. Those are the markets and these
are the main events.
Deadly wildfires rage right across France, Spain, and Portugal scorching thousands of hectares of forest. Sri Lanka's acting President says his
predecessor misled the public about the country's financial collapse.
And the cruise industry struggles to bounce back from a difficult two years.
Live from New York. It's Monday, July 18th. I'm Paula Newton in for Richard Quest and this is QUEST MEANS BUSINESS.
Tonight, Europe is sweltering through a record breaking heatwave. Evening has brought some relief but not much, really with those high temperatures.
Have a look at current temperatures right now.
Look at that, many cities there, this is evening time and many cities there still way up in the 30s. Some earlier in the day reached into the 40s. Now
people in Britain have been heading to the beaches of course, and shady parks to try and find some relief.
In Spain and Portugal, meantime, at least 1,000 deaths have been attributed to the heat. Temperatures in Spain have reached 45 degrees Celsius in
recent days. Spain as well as Portugal in fact, Italy, France, all battling deadly wildfires at this hour.
Barbie Nadeau is in Rome where the temperature today reached nearly 38 degrees Celsius.
And Barbie, I mean that's not a record for Italy, but given this prolonged drought, I mean the continent is really coping with a lot here and it seems
that the fires to put out everywhere are not just, you know literal, they are figurative as well, there is a lot going on.
BARBIE NADEAU, CNN CORRESPONDENT: That's absolutely right. It's a hot one today, definitely hot across Italy. Hot across all of Southern Europe, hot
across the United Kingdom.
You know, one of the big problems is people want to use their air conditioners, but because of the energy crisis, they're even worried about
doing that. So people are looking for all sorts of ways to cool down. We took a look at what's going on across all of Europe.
NADEAU (voice over): It's not just any hot day, London forecasters say Monday may be the hottest day ever in parts of the UK, and Tuesday is
expected to be even hotter.
Londoners are trying to stay cool by splashing in the city's public pools or trying to catch a breeze in the park.
It may look like fun, but there is a deadly side to the heat. The London Met Office issuing its first ever red heat warnings for parts of the
country. That means likely risks to the health and safety of people.
UNIDENTIFIED FEMALE: Worried about the train being canceled. My train is already canceled, so I'm going to try and get on a different one and hope
that it's not plucked out. Hopefully aircon.
NADEAU (voice over): London wasn't built for such extreme temperatures where the average high temperature for July is about 23 degrees Celsius.
Less than five percent of homes in the UK have air conditioning and less than 40 percent of trains on the tube have it either.
Rail officials say they're cutting down on schedules to try not to overheat the tracks, which could buckle in the heat.
KIT MALTHOUSE, CHANCELLOR DUCHY OF LANCASTER: We will learn over the next 48 hours about how the rail system copes with this kind of heat, which it
wasn't built to cope with. We will learn about how we deal as a community with heat.
NADEAU (voice over): The dangers of the heat are also being felt in southern Europe. Parts of France, Spain, Portugal and Italy are battling to
control large wildfires fueled by the record high temperatures baking the tinder dry countryside.
On Monday, Spain's Prime Minister Pedro Sanchez visited firefighters on the frontlines and says climate change is to blame for the conditions.
He says more than 70,000 hectares have already been destroyed in his country by recent wildfires, and says that's almost double the last
PEDRO SANCHEZ, SPANISH PRIME MINISTER (through translator): I want to say that evidently, climate change kills. It kills people. It kills our
ecosystem. It also destroys the most precious goods of our society, which are affected by these wildfires -- homes, businesses, livestock.
NADEAU (voice over): Residents of Catalonia are rushing to try to save those very things as fires reach the outskirts of their farms. Thousands of
others have already been forced to move to evacuation centers.
ONOFRE MUNOZ, EVACUEE (through translator): We know that our house is completely burned. Our house had quite a few windows, they exploded and a
powerful flame came inside. We got some pictures in which we saw everything had burned.
NEWTON: Yes, and a reminder about how dangerous this heatwave actually is, and Barbie, you, in months and the weeks in the past have really brought to
us the story of the cost of living, that crisis in Italy as well.
Severe drought throughout Europe and even specifically there in Italy, there must be a lot of concerns about how this weather will just compound
the inflationary effects.
NADEAU: Oh, absolutely. People are really, really concerned about what the fall is going to look like. You know, we've been talking to a lot of
different people who are affected.
When we're looking at the drought along the River Po, which is a very big tributary that runs from east to west across this country,
hydroelectricity, irrigation for the farmers. The river is drying up. People don't know what they're going to do, and they don't know how they're
going to pay for the next season or plant their crops and things like that.
It's a very devastating time, and the worst part of it, Paula is, this summer was supposed to be a good one after two years of COVID. This was
supposed to be the summer everybody enjoyed and recovered from the last two years, and that's not happening either -- Paula.
NEWTON: Yes, it's a good reminder of what so many have been looking forward to and now dealing with this kind of crisis. Hopefully everyone
will stay safe and heed the warning to get into those cooling centers if they need it.
Barbie Nadeau, thanks so much.
Now the EU has signed a deal with Azerbaijan to double its gas imports from that country and it can't come soon enough for the bloc as it tries to
stockpile its gas reserves due of course to Russia's war in Ukraine. Now, Russian energy giant, Gazprom, claimed Monday it would not be able to meet
its obligations on gas supplies to German energy company Uniper.
Anna Stewart reports the heatwave is making European efforts even more difficult.
ANNA STEWART, CNN REPORTER: As thermometers spike in Europe, people are turning to air conditioning units, which means the continent is using more
energy at a time when it needs to be saving it up for the winter.
The head of the International Energy Agency warned in a commentary Monday that while Europe has made progress on reducing its reliance on Russian
energy, it hasn't done enough, especially on the demand side, saying Europe needs to act now and every day counts.
Right now, Europe's gas storage facilities are around two-thirds full according to Gas Infrastructure Europe. It is more than this time last year
and following the invasion of Ukraine, the EU now mandates that member states have these facilities 80 percent full before the winter.
However, the IEA says that even if gas storage facilities were 90 percent full by October, so more than that mandate, the bloc could still face
supply disruptions in the event of a complete ration cut off.
Meanwhile, it is a critical week on whether Europe will find itself cut off from more Russian gas supplies. Nord Stream One, a key Russian pipeline to
Europe accounting for some 40 percent of Europe's Russian gas is currently offline for routine maintenance. It's due to be turned back on, on
Thursday. However, there are concerns Russia won't.
It has already slashed gas supplies by this pipeline by 60 percent in June, a move Russia said related to the delayed return of a turbine held up due
A spokesperson for Germany's Economy and Energy Ministry has hinted that the turbines absence might not be the real reason for the cut in supplies,
saying the turbine wasn't even supposed to be used until September.
The EU has accused Russia of using energy as a weapon, and while the bloc remains reliant on Russian energy, it is a weapon that threatens to cause
severe economic damage and potential energy rationing come winter.
Anna Stewart, CNN, London.
NEWTON: Now, in the City of Leiria in Portugal, more than 7,000 acres of forests were burned by wildfires, nearly 900 firefighters were involved in
that city alone as strong winds were getting the fire under control, and making it even more difficult for those firefighters to battle those
Luis Lopes is the Councilor for Environment and Civil Protection for the District Council there and he also served as the city's Fire Chief for six
I can imagine how important your expertise is right now. So give us a situation on the ground. Do you feel like you're getting a handle on these
LUIS LOPES, COUNCILOR FOR ENVIRONMENT AND CIVIL PROTECTION, DISTRICT COUNCIL OF LEIRIA: Well, right now, near the central region where we have
our city, we just have two fires with small dimensions. But in the north part of Portugal, we have two big fires and we just called -- we just heard
about two victims, two seniors that were killed while driving away from the fire.
So these are the first civilians that were killed during our fires during this year. But what we are struggling now is heat, strong winds, and a lot
of fuel that's just in a perfect condition to burn.
So this is the main difficulties that we are struggling now, but the fires now are in the northern part of Portugal. Last week, were in the central
region. So this is difficult to manage because this is not just in one part of the country.
NEWTON: Yes, and I hear you that it is spreading in many different parts and I'm so sorry to hear about those two victims, it must be very
difficult, as you said, to try and keep up with these conditions.
Given your experience, and given, you know, the dramatic temperatures and the extended drought and fire conditions that we're looking at, what would
you say are the lessons learned here? I mean, we're already looking through to the rest of summer and next summer thinking, what could be next?
LOPES: Well, most of all, it is information and communication. We have to be more fast while communicating with all the civilians, and this is a
severe problem that we have to deal with because one of the fires we had near our city, we had one fire in 2005, that is the same area now which
burned in just six hours and 17 years ago, it took three days.
So the fires are more rapid, more severe, with more potential to cause damage, and, obviously, to cause victims. So this is more serious than most
-- that most of all, we're growing up with these fires. These fires are different, they are all over the country, not just on the interior, and the
rural areas, we have problems in the cities, so this has to be understood.
And this is a problem of education and prevention, most of all. So it is a challenge for all the generations, not just the old ones that live in rural
NEWTON: Yes. I hear you. The way fighters had been behaving, we can't expect they're going to behave that way and I know how quickly it can jump
from one community to the other, depending on wind conditions. And obviously, the excessive heat.
I have to ask you, everything you guys are dealing with, not just to fight these fires in terms of resources, but the economic damage in general.
LOPES: Yes, we have so far, some houses that were completely destroyed, some buildings that were critical to the way the communities work, and we
have also some factories that were affected or destroyed.
So it depends on how huge or how big or where these facilities are, but so far, in the last week, it is being really severe to most -- all of the
country, because we had also fires in the south part of the country and all of that, that we know for sure.
So this is not something we are doing are struggling in one part of the country. So houses, factories, and now as I've told you, we just lost two
civilians. So this is the most problematic right now in the summer, where when people shouldn't be resting or spending their vacation and resting.
No, we have fires all over and we have to deal with them and everyone needs to be alert and respond effectively to what's happening in Portugal and all
of the other places.
NEWTON: Again. Yes, and again, our condolences over that tragic news and we certainly hope that conditions improve in the days to come. Appreciate
Now the CEO of Goldman Sachs is warning investors about the future of the economy. Why David Solomon is calling this an unusual period.
NEWTON: Sri Lanka's Acting President says the previous government was covering up facts about the nation's financial crisis. Now, he gave CNN an
interview Monday after declaring a nationwide emergency. Sri Lanka has been hit with soaring inflation and severe shortages of food, fuel, and
Protesters, you'll remember, brought down the previous government. Our Will Ripley is in Colombo now with the latest.
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: On Wednesday, the Parliament here in Colombo will decide who takes over as President for the remainder
of the former President Rajapaksa's term, and the front running candidate is the current acting President and former Prime Minister Ranil
Now, we had a chance to sit down with him. It's his first interview since becoming acting President, his first international interview anyway, and he
sat down and was very candid about the challenges facing Sri Lanka right now, a nation that is in crisis, a nation where people are waiting days for
things like food and fuel and medicine. A nation that is so deeply in debt that it cannot pay off the interest on its loans.
But he seemed pretty confident that once stability and calm is restored here, he can turn the economy around. He thinks he is the right person for
the job. Despite the fact that protesters have been calling for his resignation, they set his house on fire and he talked about, you know,
really, candidly, his former boss, the former President who has now fled in exile, most recently to Singapore, as far as we know.
He said, and I think this is really an attempt to try to distance himself that the former administration was not telling the truth.
You said earlier as President, it's important to tell the truth. Do you think that the previous administration was telling the truth to the people
of Sri Lanka?
RANIL WICKREMESINGHE, SRI LANKAN ACTING PRESIDENT: No.
RIPLEY: They were not.
WICKREMESINGHE: They were not.
RIPLEY: They were lying to the people.
WICKREMESINGHE: They were covering up facts.
RIPLEY: What were they covering up?
WICKREMESINGHE: That we are bankrupt, that we need to go to the IMF, and that's it.
RIPLEY: So what would you like to say to the people now truthfully, as somebody who could very likely be their next President?
WICKREMESINGHE: I would tell the people, I know what they are suffering. We have gone back. We have to pull ourselves up by the bootstraps, but we
can do it.
We don't need five years, 10 years. By next year, let's start stabilizing. And by the end of by, certainly by 2024. Let's have a functioning economy,
which will start growing, export-oriented economy, a dynamic economy.
RIPLEY: He said getting Sri Lanka back on track means that they have to restore stability here in Colombo and other areas where there has been a
large amount of civil unrest.
I mean, it was just a couple of weeks ago that protesters occupied the Presidential Palace. They briefly occupied the Prime Minister's office.
They set the Prime Minister's residence on fire.
He says that will not happen on his watch. He has issued a State of Emergency. He has authorized the police and military to take whatever steps
are needed to keep protesters, allow them to peacefully protest, but to keep them from occupying any other government buildings and that is
something that potentially could lead to clashes here on the streets of Colombo given that there are huge protests scheduled for Tuesday afternoon
Will Ripley, CNN, Colombo.
NEWTON: The head of Goldman Sachs warns the economy is in what he calls an unusual period. You can say that again.
In an earnings call he said the pandemic and the war in Ukraine have of course brought a lot of uncertainty to the market. Goldman Sachs says its
second quarter revenue was down 23 percent from a year ago, but that still beat expectations by more than a billion dollars.
Now Bank of America's second quarter earnings were also stronger than analysts had expected. The bank says customer spending rose 10 percent from
the same period last year. Its net income however, was down by a third.
Now Goldman shares up, we'll take a look at them. Still, better than -- a two -- almost two and a half percent there. Bank of America still on the
upside, but not by much, about a half percent there.
NEWTON: Now, the latest bank earnings helped lift US markets in the morning. Those gains are gone now. We're down. We're negative on the Dow,
not by much, again, a market that has no idea where to go at this point.
Now, Bloomberg reported that Apple plans to slow hiring and spending next year and that might be what has got people down. Now the NASDAQ saw the
biggest reversal, the shares had been up there by better than one percent. We're now down almost half a percent. And as you see there, again, a bit of
a sideways trade today.
Rahel Solomon joins us now in New York.
Well, you and I were just talking about how banks earning sometimes are a test for sentiment, right, as the earnings period begins. You know, the
banks seem to be telling us that things are not as bad as people believe, and yet this is a market on a hair trigger.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Yes, I mean, there seems to be much like a lot of the data we get these days, sort of conflicting data
points, conflicting messages here. So you can look at bank earnings in multiple ways.
You can look at sort of the actual business of banking, and we look at that, those results, well, investment banking revenue really plummeted for
a lot of the major banks, right?
JPM saw its revenue in the investment banking division fall 61 percent last quarter. Morgan Stanley, a similar picture, 55 percent. When we look at the
mortgage demand side of the business, that also fell, that business also fell as interest rates have risen more than two percent at least this year.
And we know that the banks are setting aside more cash for the potential of bad loans.
But Paula, if we were looking for any signs of a recession, we didn't see it here. I mean, these CEOs really striking more optimistic tone in terms
of what we're seeing with the consumer. JPM by the way, saying that credit card and debit spending increased 15 percent year-over-year, saying travel
and dining spent 34 percent.
Jamie Dimon also saying that if we go into any recession, consumers are in good shape. If you spoke to businesses, you'd hear CEO say things are
looking good, and I agree.
Citi's CEO Jane Fraser striking a similar tone saying that you can see how resilient the consumer is in the US, through the elevated payment rates and
the low level of credit losses.
So these are optimistic comments, at least right now from the bank CEOs. Paula, quite a stark reversal from what we hear in American voters in terms
of the polling and in terms of consumer sentiment. Americans still feel very lousy about the economy.
But according to these bank statements and these bank earnings, they're still spending.
NEWTON: They absolutely are, Rahel, and it's always been that great question mark, right? How long can US consumers hold on and now, we are
going to have a rebound or just some shallow recession?
Okay, busy earnings week and we'll expect to hear more from you as the week goes on. Rahel Solomon for us, thanks so much.
Now, US lawmakers could vote as early as Tuesday on a bill that aims to boost the country's computer chip industry. The global chip shortage has
quickly and unexpectedly turned into a glut in some sectors. Now, I will stress it's only in some sectors.
Inflation, lockdowns in China, and the war in Ukraine have softened demand, though. Worries about a downturn are hitting some chip companies. In late
June, Micron said they'll reduce production. And NVIDIA says another shoe could drop as prices keep falling.
John Neuffer is the President and CEO of the Semiconductor Industry Association. He joins me now from Washington, DC. And it is good to have
you weigh in here.
We heard for so long during that pandemic about the crisis in chips. Can you give us a status report on where we are in the industry? And if it is
clearly not dire, but I think if you're a consumer looking to buy anywhere in the world right now, you know, where do they have chips? So they might
have them for my phone and my refrigerator, but not for my car. I mean, what's going on?
JOHN NEUFFER, PRESIDENT AND CEO, SEMICONDUCTOR INDUSTRY ASSOCIATION: Well, first of all, Paula, actually, I think the situation is a little bit dire.
Right now, we're in a build cycle for the industry, we're responding to the explosion of demand for chips and the corporate leadership in the chip
industry around the world is making commitments to build fabs.
And if we don't get this chips legislation across -- the chips and fabs legislation across the finish line, our manufacturing base for
semiconductors will diminish even more.
1998 was 37 percent of the world's semiconductors were produced right here on American shores. Now, now it's 12 percent.
NEWTON: And we understand that that was the crisis in the industry, and a lot of people blamed the shortages on that. And yet, this means that
corporate welfare is on the table. This means your industry will get money to produce something that you believe is in a national interest.
NEUFFER: Yes, so I think that's framed a little bit off.
NEWTON: Go for it. Tell me how I'm off, because I think a lot of taxpayers want to know what they're getting and if they're going to put this money on
the table, whether it's here or in Europe or elsewhere, they want to know that there isn't going to be this chip shortage in three, five, seven,
NEUFFER: So this is all about global competitiveness. Other countries, decades ago made the strategic decision to start incentivizing
manufacturing for semiconductors, and so there's massive incentive programs put in place.
NEUFFER: Our government has not done that at the Federal level. As a result, our manufacturing has diminished over the years. And if we don't
level the playing field, we'll end up with more of these new fabs for the chips to be built overseas.
The reality is, market economics is great. Our industry loves market economics. It is great until it doesn't until it's not great, and because
of the incentives that are provided overseas by other governments, we can't compete globally. It's 25 to 50 percent more expensive to build and operate
a fab here in the US than it is overseas. That's just an untenable, unbalanced situation.
NEWTON: And I want to go back to my original question. When you say that it's dire. I mean, where is it most acute, especially now that we do see
prices falling, which indicates that, you know, obviously, there is not a supply issue in some sectors?
NEUFFER: So first of all, it's dire because we're in a window here where the commitments are being made today about where to put fabs. Whether
you're going to put fabs in the US, or you're going to put fabs overseas.
The Europeans, Japanese, the Koreans have all ramped up. There are already fairly substantial manufacturing incentive programs, and if we don't make
the decision soon, these decisions to put the fabs up will be made so that there's more fabs overseas.
NEWTON: Okay, but which sector or just in terms of which sector? So I have not noticed that there's an issue with, let's say, phones or computers, and
yet the car issues still seems to be quite striking.
NEUFFER: Yes. So, definitely this is kind of a checkered story. There are some sectors are returning to equilibrium when it comes to supply demand.
But in our industry overall, there is -- there definitely continues to be future shortages, and the thing is with the Fabs and the Chips Act is this
is going to help insulate us in the future, when these kinds of shocks hit our economy.
NEWTON: In terms of prices, though, do you believe it will still -- there will still be a softening of prices? I mean, because -- go ahead.
NEUFFER: Great question. So you know, our industry is notoriously cyclical, ups and downs. But for the long run, we are -- we have a very
We did a study with Boston Consulting Group 18 months ago or so and the results of that study suggests that over the next 10 years, we're going to
have a 56 percent increase in manufacturing capacity demand.
So all you have to do is look around you to see how much more reliant we are on chips than we've ever been, and I think coming out of the pandemic
with the remote learning, the remote healthcare the remote work, we're just we're going to be even more reliant on these chips.
So I think just kind of commonsense. The future is really bright for our industry. We may have some oversupply here and there, but I think as an
overall market trend, we're in a very strong trajectory going forward.
NEWTON: Okay, well if you do get that money from legislators, I know a lot of people will be holding you in future years to that reliance, that
reliability in your industry because you know, you can put that corporate money to a lot of different things, the taxpayer money including to
industries like baby formula even these days.
Okay, we will leave it there for now, but I appreciate your discussion.
NEWTON: Now, up next, cruise bookings rebound and airport chaos. The CEO of P&O cruises on the outlook for a COVID recovery.
NEWTON: Returning to our top story. A record breaking heatwave is scorching several continents as rising temperatures coincide with a surge in COVID
cases. China is now facing a double crisis and that's prompting lock downs that are leaving thousands stranded. Blake Essig has our story.
BLAKE ESSIG, CNN CORRESPONDENT: The combination of extreme heat and China's zero-COVID strategy aren't doing it's already strained healthcare system
any favors. The good news is that temperatures are cooling but it's still going to be hot for days to come. That means health care workers were in
full hazmat suits and millions of people who at times have waited outside in line for several hours in order to get tested for COVID will continue
enduring extreme temperatures.
Now nationwide over the weekend, more than 1000 new locally transmitted cases were reported across the country and at least 16 provinces have
reported new local cases in the past two weeks. That includes the beach resort town of Beihai in southern China, where a snap lockdown over the
weekend has left more than 2000 tourists stranded. In the region more than 500 cases have been reported this past week as a result of the local
government has locked down parts of the city ordered mass testing banned residents from leaving their home and shut down all entertainment venues.
In the special administrative region of Macau, China's Las Vegas authorities have extended its ongoing lockdown and mass testing through
Friday. Meaning all non-essential businesses like casinos have had their operations suspended. And in Shanghai. Many people are worried about
another round of mass lockdowns after 17 new cases were identified in the past 24 hours. In an effort to STEM community spread, the city government
said that they will require residents across 10 of the city's districts in some smaller areas to undergo two rounds of testing for COVID-19 over a
three-day period starting this week.
Whether it's daily testing or lockdowns, China's zero-COVID strategy continues to impact people's lives around the nation. Blake Essig, CNN,
NEWTON: Ukraine's children are fighting for the very future of their country and they're using their skills and talents to lift people's hearts
and to show that the world -- and show the world exactly what resistance looks like. Now one of those children is a 10-year-old world checkers
champion. Alex Marquardt sat down with her and to see what her fight for Ukraine involves.
ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT (voice over): At a small folding table outside of busy Kyiv shopping center, Valeria Yezhova
just 10 years old, quickly and methodically dismantles every opponent who sits down at her checkers board. Defeated, they dropped money onto the
growing pile of bills in her box next to a sign that reads, we are helping the Ukrainian army.
What many who are playing her don't know is that for Valeria, checkers is no simple hobby. She's the world champion for her age, taking home the
trophy last summer.
I really wanted to help our army and soldiers and I asked my mother what I should do, she said. Mom asked me what I'm good at. I said playing
In nine days outside this shopping center she raised more than $700.
She then presented it to the head of a foundation that buys equipment for the military. Serhi Pretula, a celebrity and activist whom Valeria calls
her hero. He broke down in tears.
She says that at first people hesitated to play her. Then as they watched her beat everyone, more and more stepped up to try their luck.
MARQUARDT (on camera): Have you ever lost any of the games while you've been doing this?
MARQUARDT (voice over): I've never lost here, she says.
Word quickly spread about the young champion doing her part for her country. When this man heard from his wife that Valeria was playing nearby
he quickly left work and ran over.
Valeria is already a legend here, he says. You'd rather lose to her. She's doing a great job helping the Ukrainian army. She's probably touched the
whole of Ukraine.
Other kids from her checkers club have followed Valeria's lead. Ukraine's children feel this war profoundly.
MARQUARDT (on camera): You think about the war a lot, or are you just trying to live here normal life?
MARQUARDT (voice over): I would like to live a normal life. But during the war, it's difficult, she says. Of course, I'm scared. There are a lot of
The defeated asked for photos with the growing star Valeria is poised, calm, and all too happy to oblige.
MARQUARDT (on camera): Shall we play a game?
VALERIA YEZHOVA, 10-YEAR-OLD CHECKERS CHAMPION: Yes.
MARQUARDT (voice over): She also obliges me.
MARQUARDT (on camera): White first.
YEZHOVA: White first.
MARQUARDT (voice over): With zero hesitation in her moves.
MARQUARDT (on camera): I forgot about going backwards.
MARQUARDT (voice over): As my pieces fly off the board.
MARQUARDT (on camera): There's nothing I can do.
YEZHOVA: A sense for play.
MARQUARDT (on camera): Thanks for thank you for destroying me. Thank you very much for the game.
YEZHOVA: Thank you.
MARQUARDT (on camera): It was an honor to play with a champion.
YEZHOVA: Thank you.
MARQUARDT (voice over): Alex Marquardt, CNN, Kyiv.
NEWTON: All right. We have 20 minutes left to trade and the markets are at session lows and those losses are accelerating. That was just in the last
few minutes from now. The one outlier here. Cruise stocks. They surge today after the CEO of Bank of America predicted that travel spending will remain
strong, whose bookings are back to pre-pandemic levels, that is saying something.
And look at those stocks. Now the rebound though, of course, is vulnerable to new variants of the virus. And a whole host of other things likely.
Joining me now is Paul Ludlow. He is CEO of P&O Cruises. And it is good to see you. Yes. How about that stock rally? Why do you think there's so much
confidence right now beyond, you know, those broader economic trends that we were talking about?
PAUL LUDLOW, CHIEF EXECUTIVE OFFICER, P&O CRUISES: Well, hi there. Good evening, Paula. Yes. It's been a bit of a good day on the stock front. I
think generally, the cruise market is very buoyant at the moment, certainly here in the U.K., cruises seen very, very strong demand. And I think it's a
number of factors here in the U.K. Obviously, we've got huge disruption at the airports here in the U.K. which has been lots of people to holidays in
And of course, we have the cost of living crunch. And I think cruises never represented better value than it does right now, given what's included in
the ticket price. So, we're seeing really strong demand for cruise holidays right now.
NEWTON: And I hear you and yet we are still -- we know about those images from the Diamond Princess, from your company. It was emblematic for so many
weeks of the insidious spread of this virus. You know, you guys have gone through all the testing regimes, all the vaccine requirements. This is not
over. Is it? I mean, in terms of the adversity, you guys have taken some steep losses, a lot of debt. What's the path forward here and how many
years will it take?
LUDLOW: Well, I think that it's been a challenging couple of years. But I think we've learned a lot throughout the pandemic. I think customers now
can feel very confident about cruising and having a great holiday whilst they're with us. I think the --it's an upward road from here, you will see
that we're seeing really strong demand right now. The fundamentals approved holidays are still very, very appealing to customers and never more so in a
-- in a credit crunch, where people are desperate to get away on holiday but really making sure that they have value and a guarantee of quality.
So, I think the cruise industry is going to go and go from strength to strength, because the basics of what we offer is still just an incredible
choice for people.
NEWTON: And I hear you on value but what can be done in terms of trying to allay people's fears when it comes to things like infectious diseases,
because some of the stories as you know, were quite worrying for anyone who even loved cruising. Never mind someone who have never tried it.
LUDLOW: Well, yes. So here in the U.K., for example, you know, we ask that all of our guests travel with us are fully vaccinated. And then we have
lots of policies and protocols on board to keep people safe and well. And obviously we've been sailing now for over a year. Our full fleet is back in
operation for P&O Cruises. And so far so good. Guests are enjoying their time with us. Going away with confidence of what they've experienced and
telling their friends that it's a great choice for the future.
NEWTON: Given the debt load that many cruises -- cruise lines are holding especially yours, I would say, you're really going to have to do something
about that value proposition, meaning the margin has to be there. Well, how do you guys see that long term debt restructuring to happen, even if it is,
you know, on strong bookings because, of course, earnings have to be there as well. And when you've got all this adversity, it's hard to know how to
really keep that in check.
LUDLOW: Yes. I mean, we have great economies of scale. So we, you know, once we build our occupancies, as we are doing right now, we can sort of
gradually grow the ticket price, I think things are working in our favor. I think the future is very bright for the economics of the cruise industry
and for Carnival and for P&O Cruises. The brand that I represent, I think that consumers will come back, are coming back.
They will pay more over time and of course spend on board with this as well. So I think we have a clear path into the future. And I think things
are looking very strong.
NEWTON: OK. Cruising is back. We'll see how that slogan holds up over the months and years to come. I really appreciate you for your time today.
Thanks so much.
LUDLOW: Thank you very much.
NEWTON: And that is QUEST MEANS BUSINESS. I'll be back at the top of the hour as we make the dash to the closing bell. But up next for us, Living
NEWTON: Hello, I'm Paula Newton. And this is the dash that closing bell and we are less than two minutes away. Right now U.S. stocks in fact are set to
close lower. You see it there, some of the lows of the day. Now the markets had opened higher. And it was helped by strong earnings from Goldman Sachs
and Bank of America. But then stocks pulled back after a report that Apple will slow spending and hiring.
And you see it there. Those are some of the lows of the day. Top of the S&P 500 today though are cruise stocks. And they're getting a boost from Bank
of America CEO Brian Moynihan predicted travel spending will remain strong. A priority for consumers really and that's despite uncertainty over new
COVID variants. And that's giving the likes of Norwegian and Carnival a big lift as you can see there from the strike prices.
They have been a little bit higher earlier. But right now still holding on to some pretty solid gains. We want to take a look at some of those Dow
components now. Goldman Sachs as we were saying at the tops, not bad in terms of a close 2-1/2 percent higher. But then you see Apple there really
suffering through some of that lower guidance going forward and off a little bit better than two percent now.
At this point in time though, the entire market on a hair trigger, as I said, we started out the day fairly high and now set for a complete
reversal in the last couple of hours.
That is the dash to the bell. I'm Paula Newton. The closing bell, you hear it there. And then "THE LEAD WITH JAKE TAPPER" starts right now.