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Quest Means Business
Elon Musk Owns Twitter; Political Violence; Latest PCE Index Shows US Inflation Still Running Hot; North Korea Fires Short-Range Ballistic Missile Into The Sea; Rock Legend Jerry Lee Lewis Dead At 87; Musk: Twitter Will Form A New Content Moderation Council. Aired 3-4p ET
Aired October 28, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:27]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS.": There is an hour to go before the trading ends and the Dow is up so far four percent
this week. All of that comes today, two and a half percent on the Dow, up nearly a thousand points, it can quite get there before we are closed, but
you'll never know. We'll keep you informed.
The markets and the way they are trading, and the events of the day are all over the place.
Elon Musk now owns Twitter and said in the last hour, he'll create a council to moderate content.
A week of dismal tech earnings: What it tells us about the global economy, or is it just tech that's in trouble.
And we'll bring you the latest details and violent attack on the husband of the US House Speaker Nancy Pelosi, we will have that in a moment.
We are live in New York, end of the week, Friday, October the 29th. Busy week. I am Richard Quest, and on a Friday, I most definitely mean business.
Good evening.
Elon Musk has bought Twitter for $44 billion on again and off again. It ends the tumultuous takeover drama, and barely is the ink dry and the sink
arrived and the changes have begun.
Musk has fired the company's chief executive, the chief financial and the executive responsible for banning Donald Trump. Musk paid in total $54.20 a
share for the company. It was an offer he made back in April, but there you have the way the market has gone since, although one has to say the NASDAQ
is down sharply, but Twitter of course has risen because it is obviously towards the offer price.
The CEO, Elon Musk, he owns Tesla and SpaceX. He also has grand ambitions for Twitter.
Over the next five years, he wants to increase its revenues from $5 billion to $26.4 billion and increase the number of users to more than 900 million.
Clare Duffy is with me in New York.
Clare, let's divide this into two distinct areas. The first of course, is he has got the -- well, the deal has been done, he didn't want to, but he
has got it done and already we are seeing the turmoil, but we don't know what he's going to do except for this quote we've had in the last hour
about content.
CLARE DUFFY, CNN BUSINESS WRITER: Right. I think it's anybody's guess what this company looks like in a week, let alone a year from now, Elon
Musk has made some really big promises about what he wants Twitter to look like, growing revenue, growing its users massively relying more on
subscription revenue, and even some more out there suggestions, like having users pay for each tweet with Dogecoin.
So you know, I think it's, it's up to him now to make good on some of those promises and we will see what happens. You know, I think by the same token,
he has started to realize, too, that at least for now, he is going to rely on advertising.
He has previously said that he hates advertising. It is clear he wants to move the platform away from advertising. But for now, advertising makes up
89 percent of the company's revenue, and you see him yesterday posting a letter to advertisers saying, you know, we don't want Twitter to become a
free for all hellscape where people can say anything that they want without consequences.
So I think, he is trying to walk a line for you know, for right now, and we'll see what happens.
QUEST: It is arguably a case that he might be more successful with content management, as a private company, because when you're a public
company, you're at the whim of every pressure group that says, "This shouldn't be allowed," or "This shouldn't be allowed." But Elon Musk can
simply say, "My view is X, it is not breaking the law. Therefore, Y happens."
DUFFY: Sure, I think that is certainly the way that Elon Musk is thinking about this. It sounds like it's the way Jack Dorsey also believes that
Twitter should be run.
I think it could -- you know, Elon won't have as much pressure from advertisers. Although, if he wants to make money off of this business, he
might have a little bit.
But I also think Elon has said, you know, he wants to allow all legal speech on Twitter, which sounds simple when you say it like that, but laws
about content moderation, are changing rapidly. They vary widely across the world. And you know, so it could be a little complex for him.
QUEST: Clare, you've covered this in detail and you cover technology in detail. Explain to me -- I know it sounds maybe a bit naive of me asking
this, but why does Twitter matter? It's barely got 200 million users compared to Facebook. It doesn't -- I mean, what's importance of it?
[15:05:09]
DUFFY: I think there are a lot of people who have that exact question. You know, a lot of sort of regular people are not on Twitter, or they're
reading Twitter, but they're not actually speaking on Twitter. But Twitter has become this platform where, you know, thought leaders and politicians
and journalists have really important conversations.
You know, news is made, news is broken, and so I think it's important the kinds of conversations that are being had there, how are they being kept
safe? How do we know what's real? These are the kinds of issues that he is going to have to deal with as he tries to make sure that people want to
keep using Twitter.
QUEST: And, ultimately, he has paid a fortune for this. He says, it doesn't matter whether he makes money, it is all about the public square,
and the town hall and all of that.
DUFFY: He has these grand ambitions. He thinks this is important for the future of humanity, and sure Elon probably doesn't need to make profit on
Twitter necessarily. You know, it is interesting, because I think Twitter for him will be a really important communications platform. He has always
used it as an important communications platform.
And in some ways, this is sort of along the lines of Jeff Bezos owning "The Washington Post" or Marc Benioff owning "Time" Magazine, only Elon will
probably have more influence over what kinds of content is put on these platforms than either of those billionaires do with their media properties.
QUEST: Clare Duffy, thank you.
DUFFY: Thank you.
QUEST: Thank you.
Musk's acquisition raises questions about the future of the platform and its business strategy. Earlier this week, some of the biggest names, of
course, we were in Riyadh, in Saudi gave their views on the problems facing social media.
(BEGIN VIDEO CLIP)
STEPHEN A. SCHWARZMAN, CHIEF EXECUTIVE OFFICER, THE BLACKSTONE GROUP: One of the things that we're almost not aware of is how difficult it is for
governments to function in a world of social media. Almost every initiative that somebody tries to do to make the world better, is undercut by some
minority shouting down those people who are trying to accomplish something for the benefit of the world.
And that's an underlying utility function that has now been institutionalized, and unless we address that, in some way so that people
can actually do their jobs, we're going to have a lot of difficulty.
QUEST: How would you do that? I mean, you've set out a problem, but that's a reality. Social media is here, a policy is going to be announced.
It is going to be attacked in some sort of way. So how do you tackle that problem?
UNIDENTIFIED MALE: I don't know how to fix it. Some of them are trying to do it. We're going to need different standards for sort of written word,
different ways to create balance.
We can't just allow things to roll ahead the way we're doing because it's really becoming very dysfunctional.
QUEST: Very dysfunctional, Jamie, and then to Khaldoon -- yes.
JAMIE DIMON, CEO, JPMORGAN: I have a suggestion, which I probably shouldn't say. When you enter social media, they should identify who you
are. It will get rid of all the bots, all the fake e-mails, all the chat. It will make you legal under the law of the land, they should authenticate
the way you are just like, enter a banking system.
And number two, they should give you a menu of choices for how you want to be -- you know, what algorithm you want to use. Here's our algorithm.
Here's one that favors this. Here's one that favors that. They should give you a choice as opposed to manipulating you.
QUEST: What would you choose?
DIMON: I don't look any of that crap.
(END VIDEO CLIP)
QUEST: Beautifully summed up by Jamie Dimon of JPMorgan Chase.
Police say a man with a hammer was looking for the US House Speaker Nancy Pelosi, when he assaulted her husband, Paul Pelosi. They say, he broke into
their San Francisco home shouting: "Where's Nancy?"
The Speaker's office says that the Speaker was in Washington at the time and that Paul Pelosi is expected to make a full recovery.
Of course, the attack raises concerns in the US about political violence ahead of the Midterm Elections.
Whitney Wild is in Washington, DC.
I am staggered, Whitney, that the husband of the Speaker of the House, who is -- the Speaker is third in line to the presidency, that the house wasn't
being guarded? I mean, do we know anything about that?
WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: We're still trying to collect more details, but you raise a point that has been raised by
lawmakers to CNN as well.
The reality is, the threat against lawmakers over the last year-and-a-half to two years has extended to their families and the lack of Federal
protection for their families when the lawmakers are not present in the home has really frustrated lawmakers.
[15:10:13]
WILD: So certainly something that I guarantee you they will press the US Capitol Police to try to fix or figure out how to work with local police to
ensure that families have protection on the ground, but the threat landscape continues to be extremely dramatic.
What January 6 represented was not the peak and then a decline, but rather a peak and a maintaining of a summit, really a plateau at a summit level of
these heightened threats.
So, here's what we know about this case, which is just the latest example of all of this. We know that this happened at 2:30 this morning. Sources
tell CNN that this assailant broke into the back of the home and attacked Paul Pelosi.
When San Francisco Police arrived around 2:30, San Francisco Police say that they witnessed both Paul Pelosi and the suspect holding onto a hammer
and apparently it was in that moment that the suspect was able to wrench the hammer away from Paul Pelosi and attack him.
The San Francisco Police immediately tackling that suspect taking him into custody. He is now, Richard, facing a list of charges that includes
attempted murder, burglary, elder abuse among a list of other felonies. More to learn on him.
What we have so far after digging through his social media posts, as well as speaking with acquaintances is that he grew up in Canada. He moved to
California about 20 years ago and his social media shows posts that include multiple conspiracy theories about COVID vaccines, as well as perpetuating
these lies that the 2020 election was stolen.
Certainly many more details to figure out, but right now that man is in custody, so no longer a threat to anybody else in the public. The big
questions now are what Capitol Police and other law enforcement agencies are going to do to protect these lawmakers? Our understanding is that the
US Capitol Police, the chief agency responsible for protecting lawmakers is assessing the security options at this point and assessing the resources --
Richard.
QUEST: Okay, I get that, you know, the man obviously had -- the assailant has issues, but really, surely this is really all about, I mean, between
the State Patrol in California, the San Francisco Police, the Capitol Police, and I'm sure a variety of other -- the Secret Service -- a variety
of other law enforcement agencies.
I'm imagining that one of the questions, what you're hearing in Washington is surely somebody should have been protecting him.
WILD: That is certainly a question that we continue to ask. And, Richard, the reality is, a lot of this is based on relationships that these Federal
agencies have with local police that is so important when you're investigating, as well as offering protection because the reality is
Capitol Police doesn't even have 2,000 officers.
And when you consider just how massive the physical space that they cover is, the Capitol and the Capitol complex here in Washington, as well as the
hundreds of lawmakers and then exponentially growing by the number of their family members, it is a difficult job that they alone cannot take on and
that is why their relationship with local agencies on the ground is so critical.
So we're digging into what those relationships had been, in what ways they may in the future be leaning on their local partners to pick up the slack
here, Richard, because you raise a good point, you've got to have a body out there to deter a potential attack.
Certainly that was the case when someone tried to attack Justice Brett Kavanaugh's house. There were US Marshals on the ground and the alleged
assailant walked away.
QUEST: Thank you. Grateful. Have a good weekend. Thank you.
We have new US inflation numbers that shows prices are still rising and the Treasury Secretary says there's reasons for economic optimism.
Janet Yellen explains why in an exclusive interview on CNN and you'll hear it on QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:16:35]
QUEST: Inflation numbers nuance, they are showing the prices remain painfully high despite the aggressive measures taken so far by the Fed. It
is the PCE Index, which is the Fed's preferred measure of inflation. It rose last month by 0.3 percent with US Midterm Elections approaching.
Phil Mattingly spoke to the US Treasury Secretary, Janet Yellen in this exclusive interview.
(BEGIN VIDEOTAPE)
PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice over): As Democrats scrambled to coalesce around an economic message to hang on to
their congressional majorities --
JANET YELLEN, US TREASURY SECRETARY: I don't see signs of recession in this economy at this point.
MATTINGLY (voice over): Treasury Secretary Janet Yellen sitting down with CNN to deliver her own.
YELLEN: We have unemployment at a 50-year low. There are two job vacancies for every American who is looking for work. We have solid
household finances, business finances, banks that are well capitalized, and we've been creating average 300,000 jobs a month.
MATTINGLY (voice over): It's an economic scorecard that hardly tracks with an exceedingly unsettled electorate.
MATTINGLY (on camera): The discontent seems to be very real, the feelings about the direction of the economy seems to be largely negative. Why?
YELLEN: Inflation is very high, it's unacceptably high. And Americans feel that every day.
JOE BIDEN, PRESIDENT OF THE UNITED STATES: Hello, Syracuse.
MATTINGLY (voice over): The split screen that is way down Democrats for months on the day the US economy delivered a bounce back quarter of growth,
Republican campaign ads continue to hammer inflation that remains near a four-decade high, soaring costs driving the economy to the top of voter
concerns, in reality with no near term solution that has clouded not just Democrats Midterm prospects.
MATTINGLY (on camera): So you're saying in terms of the time horizon, yours is not very helpful when there's a Midterm Election in 12 days? I
know you don't come from a political background here, but how much does that weigh into the policy process that you guys pursue?
YELLEN: Well, as I said, we're doing everything that we can to supplement what the Fed is doing to bring inflation down and medium term, we have an
historic investment in the strength of our economy, the passage of three very important bills.
MATTINGLY (voice over): But also what officials view as a historically rapid recovery.
YELLEN: These are problems we don't have, because of what the Biden administration has done, so often one doesn't get credit for problems that
don't exist.
MATTINGLY (voice over): All as Biden's legislative wins have driven tens of billions of dollars in private sector investment to manufacturing across
the country.
MATTINGLY (on camera): Is the kind of message at this point to some degree, we've done the work, be patient, it's coming.
YELLEN: Yes, we are beginning to see repaired bridges come online, not in every community. Pretty soon, many communities are going to see roads
improve, bridges repaired that have been falling apart.
We're seeing money flow into research and development, which is really an important source of long-term strength to the American economy and
America's strength is going to increase and we're going to become a more competitive economy.
(END VIDEOTAPE)
QUEST: Phil Mattingly, excellent to hear the Treasury Secretary, she doesn't do many interviews. But look, Phil, you nailed it.
[15:20:10]
QUEST: At the end of the day, this doesn't seem to be -- it's very hard to get over this headline number of inflation, which everybody is talking
about, and the truth is the Treasury Secretary, brilliant, though she is, former head of the Fed is not a politician and doesn't speak like a
politician.
MATTINGLY: Yes, which to some degree is part of the joy of interviewing her about these issues specifically, and yet, this is the reality of the
moment.
Janet Yellen is one of several Cabinet officials that were out yesterday, trying to highlight the administration's economic achievements or what they
view as their economic achievements in the middle of a heightened political atmosphere where winning the political message is by far and away the most
important thing for Democratic candidates that are looking out 10 days from now and seeing the very real possibility of not just losing both
majorities, but a very real possibility of sweeping Republican wins.
It is a complex message when it comes to this economy where things stand, even economists, even people, brilliant people, like yourself, Richard have
a difficult time trying to draw a through line that has a singular narrative based on everything coming out of the pandemic.
The administration has struggled with it, the Treasury Secretary struggles with it and right now, it looks like they're going to pay politically
because of that.
QUEST: That's the key.
Phil Mattingly, thank you.
With me now, our global economic analyst and "Financial Times" associate editor, Rana. She is also the author of "Homecoming: The Path to Prosperity
in a Post Global World."
And I enjoyed very much your article in "Foreign Affairs," which I have a copy of it here. We'll come to the article in a second.
Look, the reality is, Rana, you had Janet Yellen I mean, making nice economic points about the future of investment and it is not going to cut
the mustard with an electorate who can't buy their weekly groceries.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: It's tough. There's no question. But you know, honestly, Richard, I mean, what is she supposed to
say? Hey, we're going to cut taxes. It'll be great. Hey, let's just put on tariffs against China and everything will be good. I mean, those are
essentially the Republican messages.
I think the Democrats have no choice but to pound home the truth of the matter, which is that they have done a lot that is going to pay off in --
some of it this year, a lot of it next year, and a lot of it in the year after that, and hope -- and I hope that voters can see past the politics
and the hype.
I know that that's unusual, but I do think we're at an unusual time in the global economy right now.
QUEST: You have walked beautifully into my trap, Ms. Foroohar, because you've just argued that, you know, what else is she supposed to say? But in
your article, you make the very point that the neoliberal economic argument and thinking has lost. People are not in favor of it.
They are in favor of retaliation, protectionism, however bad it may be. The arguments of let's go and beat up on China find favor in the Midwest.
FOROOHAR: Well, they do, and frankly, you know, Biden has been very clear about Buy America. I think that that message has gotten through and I'm
from Indiana, and I think that message has gotten through in parts of the Midwest.
Look at Ohio, Richard, I mean, Intel is starting a major new foundry, the first one of the postwar era because of the Biden CHIPS Act, bipartisan
act. I've got to say, and you know, you can have me back on and I'll eat my words.
But boy, if voters in the Midwest don't see what this President has done for them relative to the last President and PS, can we just note that in
the last week, Joe Biden's export ban on high end dual use chips to China has done more to change supply chains than the entire Trump presidency did.
So, you know, I am saying now, people --
QUEST: But this --
FOROOHAR: Yes, sorry. Go ahead.
QUEST: It's a mixed blessing because, the onshoring which you're talking about, or even friend-shoring, which is a word Ngozi was telling me about
in Geneva, but the onshoring is not necessary, whilst it's vital, from what we've discovered post pandemic or during the pandemic, it's not
economically efficient in most cases.
FOROOHAR: Well, you know, you're spot on about that. But efficiency, as we have come to learn has all kinds of costs, and one of them is stagnating
wages in America since the early 1990s if you discount this minor bout of wage inflation now, which has not even been close to what other
inflationary levels are and is now declining.
I actually think we're going to get through this, but there is no question it is going to be bumpy. We are in the middle of a global economic paradigm
shift. This is similar to what happened in the 30s. This is something we're not going to see get in our lifetime.
[15:25:03]
FOROOHAR: There is going to be bumps, but boy, I mean if there was ever a time for people in this country and frankly, in every country to get a
little long term thinking going, this is it, because guess what? Americans and Europeans, if you go back to conventional neoliberal economics as
usual, not only are your economies not going to rise, we're going to be in dire geopolitical straits.
QUEST: I'm so excited we are doing this on a Friday where we have a bit of extra time. I mean, that long-term discussion that you're seeking, is
just about impossible to have and I'll tell you why.
I was reading this week about Ford and Volkswagen that have gotten rid of their autonomous vehicle jointer, because the level four is too difficult.
And they basically said, it will take at least half a decade, and a great deal more money.
Do you think somebody in Beijing or Shanghai or Shenzhen is sitting there saying, you know, I think it might take a half a decade and a great deal,
but we better not do it? Do you think that's the basis of Xi Jinping?
FOROOHAR: You know what? I'll tell you something, and in fact, this is something I'm thinking deeply about. I actually think in the last few days,
the hardening of Xi Jinping's regime and the shifts in the party leadership are actually very bad for the economic trajectory of China. You're seeing
very little real economic technocratic expertise in the new leadership, you're seeing a lot more State control. As you well know, that's not how
China became dominant. That's not how they grew and got, you know, a billion people out of poverty in the last 40 years, it was by following a
different model.
Now, you can argue and some people would argue that the top down, you know, model allows for speedy decisions, but I honestly don't necessarily trust
this regime to make the right decisions. And it's interesting that in the last Party Congress, for the first time, you're hearing national security
take precedent over global growth, not great for China.
QUEST: Interesting. So glad we had this to talk about. We will keep the discussion going. Lovely to see you. Have a great weekend, Rana.
FOROOHAR: You, too.
QUEST: A rough week for Wall Street for some of the top tech stocks, pretty good elsewhere though, and the holiday season is near.
Look at that, Apple is up four percent, Amazon is down seven. Now there are specific reasons and Rahel is going to uncover all, in a moment.
(COMMERCIAL BREAK)
[15:30:32]
QUEST: Hello, I'm Richard Quest. A great deal more QUEST MEANS BUSINESS tonight together.
Amazon's troubles cup a week of brutal attack on Brazil's presidential campaign and is its final days. The key economic issues. We will get to it
all. But only after the news headlines because this is CNN and on this network the news always comes first.
The Pentagon says North Korea has far two ballistic missiles into the sea. South Korea says they flew about 230 kilometers and landed off to the --
off the peninsula the eastern coast. Its military officials have called the launch a serious act of provocation.
Video from Eastern Iran shows protesters fleeing gunfire and tear gas following Friday prayers. Activists says a 12-year-old boy was shot in the
attack. Iranian media says both security forces and protesters were hurt after being shot by unknown people.
The rock and roll and pioneer Jerry Lee Lewis died at 87 from his publicist say to reporters. He was one of the leading figures in the 1950s along with
legends like Elvis Presley and Chuck Berry. He was also known for his turbulent personal life.
Elon Musk now owns and is at the helm of Twitter. And now of course, what does he plan to do with what is the world's biggest digital town square. He
has tweeted that Twitter will form content moderation counsel with widely diverse viewpoints. He says no major content decisions or account
reinstatements will happen before that council convenes. Musk is a free speech advocate.
He's already said it was a mistake that Twitter banned Donald Trump. Vivian Schiller is the executive director of Aspen Digital. Former global chair of
news at Twitter. Joins me from Washington, D.C. So, what do you think we should expect from Musk Twitter?
VIVIAN SCHILLER, EXECUTIVE DIRECTOR, ASPEN DIGITAL: Well, we should expect the unexpected. You know, Musk rules by -- is subject to his own whims. And
we've seen him say a lot of things, many contradictory over the last few months. What we haven't seen is a lot of deep thought and analysis as to
how he wants to handle content moderation. Although the notion that he wants to create this is maybe a little bit comforting, insofar as he's not
just going to make knee jerk decisions without, you know, speaking to others.
QUEST: Right.
SCHILLER: We'll see. Who knows what will happen?
QUEST: Is that not something to be said for an owner who knows what they want, and isn't going to be deflected by every pressure point that calls
for this or for that or for any action.
SCHILLER: Oh, of course. Absolutely. That -- that's the best kind of leader. If we see that he has a point of view about the principles by which
he wants to consider what kind of content will be on the platform that would be most welcome. We have not seen that yet. Again, this council, I
mean, we'll see who's on the council, we'll see how that works. That's maybe a little bit promising. He has also recently as promised advertisers
that it would not turn into assessable. That's also promising. But he's also said a lot of other things that are a
little more disturbing.
QUEST: The idea that 900 million he wants to get, it's about 250 at the moment. You know, I remember when Twitter started, it was all about telling
your friends what you were doing and being able and them telling you what they had for dinner. Now it's become the way where anybody who's in the
news makes a comment on public. Someone dies, you get your quotes from people on Twitter. Where do you see the role for Twitter?
SCHILLER: Well, you know, the interesting thing about Twitter is since its founding, it has always been -- it has been shaped by its users. There
famously has never been a clear strategy from the creators of Twitter about what it is. So, you know, the people have come in and turned it into the
very valuable platform that it is today. Not valuable from a Wall Street point of view, perhaps but very valuable in terms of exactly what you're
talking about.
Newsmakers use it as a platform to announce everything whether it's a, you know, heads of state to, you know, to heads of -- heads of companies, to
people, you know, tweeting about breaking news. They're seeing around them.
[15:35:12]
It's, it's a very valuable public real time asset.
QUEST: One that we've not seen the like of before. And I just wonder whether Elon Musk isn't exactly the right person. After all, think of
Tesla, think of SpaceX, think of Starlink, maybe he's exactly what this thing needs.
SCHILLER: Well, you know, from your lips, I really -- nothing would make me happier than for Elon Musk to be the finest steward of Twitter that has --
that that has come along today. I would like to hear a little bit more strategy or sort of thinking about his approach to the platform. So, you
know, I guess we'll have to wait and see if and when that comes.
QUEST: We'll talk more. Thank you. Grateful, Vivian. Amazon's down, the online retailers predicted a lighter than expected holiday shopping season.
All the usual economic reasons are in their top seven percent at the moment. And AWS which is actually the most profitable part is growing at a
slower pace. There's rallying elsewhere in the market with tech stocks. Apple, for example is up very sharply today. And others are too.
Rahel Solomon is with me. What's going on?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, I mean, yes, I mean, you can say the markets are higher. But Richard, make no mistake that this was
an ugly week for tech, right? I mean, tech players, Amazon, Microsoft, Meta, I mean, you name it. They have all enjoyed really strong revenue. I
just want to run through just a few. And we can talk about what we're actually starting to see this week.
Amazon, in its most recent quarter posted, Richard, $127 billion of sales. Apple, 90 billion. I mean, these are the type of sales that most companies
would kill for. And they've benefited from not just that high growth, but also stocks that for about 10 years went one direction, practically up. And
also tech trends because of the COVID lock downs. And now this week, we started to hear a different tune from a lot of the tech players.
For example, some of the ad players like alphabet and Meta, certainly, in the case of Meta reporting slowing advertising spend as other companies
start to feel a bit more cautious about the outlook, right? You think about some of the cloud computing names, as you pointed out, AWS, but also
Microsoft saying that they're seeing softer revenue, as again, companies start to feel a bit more cautious about the outlook.
So the headline or the conclusion rather, Richard, is that at a time when it felt like these growth companies, these tech companies were immune from
perhaps a slowdown, it's looking like after this week, there's really not a lot of places to hide, they too, are vulnerable.
QUEST: Right. Now, let's break them out, though. So you've got the tech companies that rely on advertising. The Googles, if you will. The Metas.
You then got Nvidia and the chips which are being slammed by U.S. changing policy. Now you've got Amazon and the wall -- and the best buys (INAUDIBLE)
like online on the slowdown but which of them fundamentally is still running a business and everybody uses?
SOLOMON: Well, I mean, I guess the -- perhaps question is, which is most shielded, right, from these economic slowdowns?
QUEST: Better port. Much better points.
SOLOMON: OK. So we can talk about Apple, right? I mean, you already showed that the shares were much higher. Apple is still benefiting from strong
iPhone sales, really across the world. They're still benefiting from strong Mac sales which is really interesting, because we're seeing in the larger
techspace people really pulling back from hardware, right? Amazon, although it is starting to see some slowdown in its cloud business, it still has its
retail business although it is warning of a slowdown.
It has its cloud business, it has its retail business, so it has a better boat so does -- moat rather, so to speak. Amazon or Apple rather also has a
pretty significant vote because it has subscription services, right? It also gets quite a bit of revenue from. So I think the question in this type
of environment is who was better shielded from the economic headwinds? Who has a better moat? Who has more diversification?
And I think it's really going to become the difference between the winners and the losers on the other side of this.
QUEST: Have you bought anything from Amazon in the last week?
SOLOMON: I have not proud to say. How about you?
QUEST: I have. I bought a book, one of the originals. Now there's something novelist that I actually bought a book on Amazon this morning. All right.
Well, have a lovely weekend. See you.
SOLOMON: You too.
QUEST: Next week, of course. We'll know a bit more about the Brazilian future in one of the countries which is home to the other homes in Brazil.
It's the final few days of campaigning before Sunday's presidential election. The most important election ever so it said in Brazil, the left
his former President Lula da Silva is challenging the incumbent, the far- right Jair Bolsonaro. The big issues, inflation and rising poverty.
Paula Newton is in Sao Paulo.
(BEGIN VIDEOTAPE)
PAUL NEWTON, CNN INTERNATIONAL CORRESPONDENT: Nova Vitoria Speranza (ph) this pandemic era village on the outskirts of Sao Paulo is fertile ground
for votes but not food.
[15:40:11] The irony not lost on anyone here. Food is the issue this mother of four will be voting on. Even Hilda's (ph) partner works 16 hours a day
and still she tells us there isn't much in her refrigerator.
I just don't want my kids to go hungry, she says. She fears they may if President Jair Bolsonaro is reelected even though he raised welfare
payments ahead of the election.
In the view she says Bolsonaro didn't fulfill his promises and is only given us the subsidy to see if he can get more votes.
People here know better than to expect too much from either candidate. But from former President Lula de Silva, they expect something.
I intend to vote for Lula she tells us because Bolsonaro has been there for four years and in four years, he's not been able to do much.
NEWTON (on camera): From Brazil's impoverished suburbs to the streets of its commercial capital inflation is biting here. Access to food as become a
central election issue and a convenient campaign promise these tens of millions continue to live in poverty.
NEWTON (voice over): A Bolsonaro rally supporters ridicule Lula. Calling him a thief who belongs in jail, hardly a savior of the poor. Even Hilda
sees Lula's past corruption scandals differently.
Every single one that is in there steal something, she says. Even just a little. They are talking about Lula and saying he sold maybe he did. But at
least he takes care of us, takes care of the poor.
Bolsonaro has spent billions on welfare subsidies in the lead up to the selection, trying to prove he can save Brazilians from hunger.
Robson Mendonsa (ph) has been feeding the hungry for decades. He says hundreds more have been lining up at his soup kitchen in recent months. And
he's troubled that the desperate plight of so many is being exploited for votes.
UNIDENTIFIED MALE (through translator): Bolsonaro was even capable of lying on national radio saying there is no hunger in Brazil. They don't see
anyone asking for bread at the bakery. He doesn't know reality. There are millions asking for a plate of food because they can't feed themselves.
To win, both presidential candidates need to count on votes from those who can't count on their next meal. A stark snapshot of what's at stake for
Brazil's hunger.
Paula Newton, CNN, Sao Paulo, Brazil.
(END VIDEOTAPE)
QUEST: That election is this weekend. As QUEST MEANS BUSINESS continues tonight. Giving kids a head start in life. When it comes to finance. It's
the app in Dubai that wants to change the way we educate young people about money (INAUDIBLE) some of us are older. Next.
(COMMERCIAL BREAK)
[15:45:58]
QUEST: You're never too young to learn the value of a dollar, a yen or a pound. Start them young, which is why the creators of a new app in Dubai
believe personal finance to give it its posh title should be taught from a very young age. And in that famous old phrase, there's an app for that
that'll now teach kids how to handle money. Anna Stewart is part of Think Big.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice over): Ten-year-old George (ph) and seven-year-old Molly (ph) are not the most typical of children. Yes, they
study and they play but they also discuss their finances.
UNIDENTIFIED MALE: If I gave her a thousand dirham, she would save it like what's the point?
UNIDENTIFIED FEMALE: To get something good.
STEWART: The catalyst for this conversation is EdFundo. Built in Dubai, it's a mobile application that aims to teach children about money.
ANDREW TOWARD, CO-FOUNDER AND COO, EDFUNDO APP: EdFundo is a family financial education and money management app that's built by teachers,
which provides families early access to personal finance.
STEWART: With the app, parents can send their children pocket money digitally and track their spending. The kids have a prepaid debit card and
a separate dashboard.
UNIDENTIFIED FEMALE: And my Stanford has 146 and my safe class 25.
STEWART: Where they can set personal goals.
TOWARD: So what do you think you're going to save for?
UNIDENTIFIED MALE: I believe I'm going to save for a BMX.
STEWART: The idea is for children to learn while engaging themselves in real-life spending.
TOWARD: They can really manipulate exactly what they want to do and essentially operate within a real world situation by learning through
doing.
STEWART: Worldwide, only 17 percent of adults claim to have a high knowledge of finance. In a 2020 survey conducted by the Organization for
Economic Cooperation and Development. Making sure children start becoming aware of key financial concepts is a goal for some parents and educators.
NAN MORRISON, PRESIDENT AND CEO, COUNCIL FOR ECONOMIC EDUCATION: It's really
important for kids to understand all this as they're growing up. Not to scare them, but -- so they have the language and vocabulary so they
understand what these things are. Because if you know what the deal is, you won't get hurt.
TOWARD: You and I had a photo of it.
STEWART: Well, apps like EdFundo might help, for Nan, the role parents and teachers play is still fundamental in the process.
MORRISON: If you think about it, the first time you went out to play a sport, somebody probably came with you. And learning about money is a lot
like that. The apps to me fit in to a broader group of tools that can be used by students, teachers, parents to help their kids leawrn more about
money.
STEWART: George is working hard to achieve his goal of getting the BMX bike and he has chosen a very well thought out deadline.
UNIDENTIFIED MALE: I believe I should shave off until December 23rd. It's my birthday show. If I don't meet the goal my dad can buy it for me.
STEWART: So, the family may have a long road ahead as they teach their kids about finance. But today's tools like at EdFundo could make the journey
more fun.
Anna Stewart, CNN.
(END VIDEOTAPE)
QUEST: I think we can sum it all up with the old saying, look after the pennies and the pounds will take care of themselves. Now that's certainly
the truth. The Dow is on track for its best month in nearly 50 years. I know you're asking has the tie changed? Is this the start? Or we got
another leg down to go. Gorilla Monica after the break.
(COMMERCIAL BREAK)
[15:52:20]
QUEST: We've got a good rally underway. You saw it before the break. But if I give you a bigger picture, the Dow's up 12 percent on the month and it's
the best October since the 1970s. And October traditionally is not a good month. Paul La Monica, Gorilla Monica is here. The only issue really
everybody wants to know is has the tide turned or is this a dead cat bounce off a low September when things were looking grisly?
PAUL LA MONICA, CNN DIGITAL CORRESPONDENT: Yes, it's a great question, Richard. I would take issue though with the notion that October is not a
good month, I think October has a bad reputation because historically we've had major crashes like 29, 87, 2008. But when you look at the data, the
stock market typically does well in the fourth quarter, October, November, December. It's anticipation kind of good earnings heading into the
holidays.
You have a lot of investors maybe looking to either catch a rally or locked in your more gains buy more stocks that could be heading higher. So this
isn't that abnormal. But we definitely know that October has had some pretty scary crashes in the past. Unless we get one on Monday. It looks
like we'll avoid a big October stumble this time around.
QUEST: There's a real bifurcation now, the earnings are not bad elsewhere. Tech earnings are pretty horrible, particularly those ad led ones that were
held was talking about earlier. It's difficult to draw trends out of the season.
LA MONICA: Yes, I think it is. I mean, you have companies like Amazon and Meta that have had disastrous results. Meta, really it's just been a horror
show to go into Halloween theme all year long for this company. But Apple's numbers clearly reassuring. Intel, which has had a very rough year,
suggesting maybe the worst is for with chips. So I think that was good news and why we're seeing the market rally today.
But take away tech Richard and you've had some good earnings from the likes of G.M., from Coca-Cola from other big consumer and industrial companies.
And that is I think the reason why the market has rallied quite as good as this month.
QUEST: I've got a -- I have a wry smile as you say that go. The companies you mentioned Coca-Cola, General -- G.M., big and boring.
LA MONICA: I didn't mentioned --
(CROSSTALK)
QUEST: Large companies. I mean, that's the truth. The companies are making things, the companies are just getting on the Warren Buffett companies that
they're in all right.
[15:55:02]
LA MONICA: Exactly. And Apple remember is now not just a Warren Buffett company, it's the proverbial Warren Buffett company. It's Berkshire
Hathaway's largest holding, you can make fun of him all you want for maybe catching it late. But, you know, it's been a good investment for Berkshire
Hathaway and a lot of his other companies, industrial giants. And the banks don't forget how much he loves financials.
They've held up relatively well. The earnings have been decent, so.
QUEST: Fine. Thank you, girl. Let me just tell you, because I know everybody's -- has an unhealthy interest in my own investments. My Twitter
I bought back in 2018 at $44.67. I topped up in January -- in December of 21. That a few more, not many don't believe we were running the dozens by
the way. $44.49. So I guess somebody will work out that I've made money on both tranches, and the drinks this weekend are on me.
We'll have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Eager the final thought today I was absolutely staggered, horrified. When it became clear today that Nancy Pelosi's husband, Paul Pelosi doesn't
have full time 24 hour security. And that even though the speaker isn't at home in San Francisco, there are no armed guards on the house. At least
that's what we believe. Otherwise, how else did somebody managed to get into the house and hit him with a hammer?
And by the accounts of what happened if the police hadn't arrived then it could have been absolutely horrific, more horrific, I should say.
Look, we've had Abe in Japan who was assassinated. We've had Salman Rushdie, who was attacked. We heard last week how spouses of former prime
ministers in Britain get a car and a driver because for any nutcase or malcontent, who wants or even just -- or terrorist who wants to attack
somebody, if you can't get them, you go after their family. So it begs the question between the California Highway Patrol, between the San Francisco
Police between the Secret Service, between the Capitol Police and their house in San Francisco is unmanned or unguarded.
And you realize they'll be a lot more to say on this in the days and weeks ahead. But people who go into public life have it right and deserve to be
looked after and protected and that includes their family too.
[16:00:06]
And that's QUEST MEANS BUSINESS tonight. I'm Richard Quest. The markets are up. Whatever you're up to in the hours ahead I hope it's profitable. That's
the bell.
END
