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Quest Means Business

Cooler-Than-Expected Inflation Fuels Wall Street Rally; Balance of Power in US Congress still Uncertain; Italian Gas Grid Operator Snam Expanding LNG Gas Storage; Stocks Soar on Inflation Data; Biden Takes Victory Lap; Call to Earth: Saving Endangered Whales; Pandemic Travel Woes Have Eased. Aired 3-4p ET

Aired November 10, 2022 - 15:00   ET

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

[15:00:22]

RICHARD QUEST, CNN INTERNATIONAL HOST: Hold on to your hats. We've got the biggest rally of the year and away and what a rally it is, too. Look at the

big board. The Big Board is up over a thousand points. The best of the day, three and a third percent. And if you factor it out, as we'll show you at

the Dow and all the others later, that you really see the big gains.

The triple stack is even more impressive. The NASDAQ is up over six percent, and if you want to know why, well the markets and the main events

they are one and the same.

US inflation has slowed to 7.7 percent. It's the first real glimmer that prices may have peaked.

On the other hand, a crypto currency giant is teetering on the brink of collapse. FTX is on its way out.

And John Kerry, US climate envoy tells us he hopes the US and China can restart climate talks soon.

Obviously, with the market in such buoyant mood, we are at the New York Stock Exchange today. Thursday, November the 10th. I'm Richard Quest, and

here at the NYSE, I most definitely in business.

Well, you know that saying about swallows and summers, well, today Wall Street is surging, and the US dollar is down. Are these signs that the

battle of inflation may have turned a corner? That's what we need to get to grips with tonight.

The three major indices are all up very sharply and have held their gains on the inflation number. CPI rose only 0.4 percent in October. That's

month-on-month. Year-on-year, it is 7.7 percent. Both figures cooler than expected.

Everything points to inflation falling from the June peak of 9.1 percent, and that suggests, although that 300 basis points of interest rate rise is

finally doing its job. The cost of food, energy, and shelter, they continue to rise in October. Accommodation including rent hasn't climbed sharply in

one month since 1990, which does suggest we might be missing something here.

Food and energy are no longer rising as fast as they were, and if you're adding groceries, they were the smallest amount since last December.

So used cars and truck prices fell sharply, down 2.4 percent, the sign of COVID era supply chains, unwinding, with airfares, clothing, and medical

supplies all declining, too.

Matt Egan is with me in New York. Is this the canary in the mine of good news?

MATT EGAN, CNN REPORTER: Well, Wall Street certainly thinks it is, right, investors have been desperate for signs that inflation is finally chilling

out, and it looks like we did get it.

You know, it is funny because at any other point other than this year, if you had a 7.7 percent increase in consumer prices year-over-year, I think

you would have a thousand point move for the Dow going the other way, but everything is relative, right? So this is an improvement. It is much cooler

than that nine percent inflation reading in June, and some of the economists that I've been talking to, they are really encouraged by the

fact that month-over-month, core inflation basically got cut in half and that was not expected.

And we did see these price declines for airfare and apparel, and you mentioned used cars which was a big one. Moody's economist, Mark Zandi, he

told me that this does seem to show that inflation is definitively moderating and he thinks inflation will be much lower a year from now as

long as we don't see a lot more lockdowns in China over COVID, and as long as oil prices don't go crazy.

But Richard you know, this move by Wall Street is pretty dramatic. I mean, a six percent increase for the NASDAQ. I mean, you can go through a whole

month and not see a six percent increase and we're seeing it all in one day. Some people are worried that maybe that's a little bit overdone. The

Former New York Fed President Bill Dudley, he told me, look this is just one report. He said it does lower the risk of the Fed raising by 75 basis

points next month, but he said the jobs market still remains way too hot.

QUEST: Matt Egan, thank you.

With me is Andrew Hollenhorst, he is the Chief US Economist at Citi. So now one swallow does noth a summer make we know, but do you think inflation has

turned the corner?

ANDREW HOLLENHORST, CHIEF US ECONOMIST, CITI: I think we're probably off of the peaks in year-on-year inflation, but think about what we're saying,

we've slowed down, we've cooled down to 7.7 percent, which is still far above two percent, so we are well above target levels of inflation.

[15:05:16]

Underlying inflation is probably running still below 7.7. So, I think we can actually come down further from these levels, but have we really turned

the corner? Are we really headed to two percent? I don't see convincing evidence yet.

QUEST: So you still believe the Fed -- I mean, the Fed is going to raise rates in December. Do you think this takes 75 basis points off the table

and leaves us with an okay 50?

HOLLENHORST: Yes. It makes the case for 50 that much stronger, right? This is a Fed that wants to slow down. Data was not cooperating. This is maybe

the first data point in a long time that has cooperated in a sense.

QUEST: Is there a risk that we are suddenly going to get "whoosh," a matter dramatic drop in inflation, as the economy slows, because we have

got that latency of the monetary lag and 300 basis points in the system.

HOLLENHORST: So that's what you tend to see happen. The Fed raises interest rates, that tightens financial conditions, slows down the economy, and then

you see prices come down.

The issue that the Fed is facing right now is especially if you look at the labor market, there is no sign of that slowdown.

QUEST: Right. Well, the viewer will have noticed. Of course, I have these interesting numbers. Now first of all, accommodation, accommodation

has gone up more than expected. It's very high. It's a major component.

It's offset by auto, sir, auto prices coming down. Now, factor that in and tell me, do we have supply side inflation or demand-led inflation.

HOLLENHORST: So, I think you're kind of looking at both the demand and the supply side, when you mention those two items -- used cars, cars -- we saw

demand come back very rapidly for cars in the beginning stages of the pandemic and the immediate reopening period, and there just weren't enough

semiconductors in the world to satisfy that demand. The semiconductors go into cars, so you've got a lot of used car price inflation, that's coming

off now.

What we're seeing in rents, so we're seeing in shelter, that's going to be stickier and what I'm really concerned about is the services other than

shelter, things like restaurants, accommodations, that's where we can really still see a lot of inflationary pressure.

QUEST: Mainly, foods.

HOLLENHORST: Food.

QUEST: The cost of food. How much of all of this is war dependent? I mean, obviously, if the war gets much worse, and other actors are brought

in, that is a given. But in terms of, you know, later in the program, we're going to be talking to an Italian energy company that basically says the

stockpiles are full and we should be okay in winter.

HOLLENHORST: Food, energy, those are going to be very dependent on international conditions, geopolitical events. When you look domestically,

then you're talking about things like the housing market, things like restaurant meals, that kind of domestically based inflation. It kind of

moves separately from what we're seeing with goods prices.

QUEST: I get the feeling the unspoken bit of what you're saying is, look, the market may be up a thousand points, but we're not out of this

yet. And anybody who thinks this is over before Christmas is deceiving themselves.

HOLLENHORST: At the end of the day, it's one month of data, a glimmer of hope. Yes. Conclusive evidence that we're headed to two percent? No, I

don't think so.

QUEST: Very grateful to you. Thank you, sir, for joining us. Much appreciated. Thank you very much, indeed.

Now, ballots are still being counted in several US States, and it may be days before we know which party will control the US Congress. Republicans

hold 49 Senate seats with several races too close to call.

In the House, the Republicans hold a sizable lead, and already staking claims on their leadership. However, there are still three dozen races,

still close too call and it does remain well, well, we will be premature to say which will lead that chamber.

John Berman is with me at the Magic Wall.

John, I will be honest, I mean, I've followed this as closely as I can, and I'm starting to get a bit befuddled and confused over exactly where this is

going.

JOHN BERMAN, CNN HOST: The US system when the UK has got this Parliamentary thing that none of us understand? This should be easy, easy pickings for

you, Richard Quest.

Let me make this simple for you right now in terms of when we will know and what matters still in the US Senate. There are three races that have yet to

be decided. There is Nevada, Arizona, and Georgia. Georgia, we know is going to a runoff because Georgia State Law requires the winning candidate

in the first round to get 50 percent plus, one neither candidate did, so it goes to a runoff in December.

Will that mean we have to wait until December to find out who controls the US Senate? Maybe or maybe not. Let me tell you why, because if Republicans

win both Nevada and Arizona, you see that gives them 51 Senate seats. That's enough to control the US Senate, they would have the majority.

[15:10:10]

On the other hand if the Democrats win both Arizona, Nevada, that would give them 50 seats, which with the Vice President Kamala Harris, breaking

the tie would mean that they would control the US Senate and that's even before the runoff in Georgia.

Now, if these two States split, if, for instance, the Republican wins in Nevada, and the Democrat wins in Arizona, then you have a situation where

if the Georgia runoff goes to the Democrats, it would be 50/50. The Democrats would control the Senate. If it went Republican, it would be 51-

49. Again, the Republicans would control.

So that is where we are. That's what's at stake now. In terms of the timing, it could be decided in the next week when those two States, Nevada

and Arizona come in or it could mean December 6th with the Georgia runoff.

Just to tell you where things stand in Nevada and Arizona because those are what matter now. That's where they're counting. In Nevada, the Republican

Adam Laxalt leads by about fifteen, sixteen thousand votes, Richard. There are anywhere from 100,000 to 135,000 ballots still to count in Nevada, and

their mail ballots, which tend to lead in Nevada towards the Democrats, so it is possible that Catherine Cortez Masto, the Democratic incumbent makes

up this 15,000 vote gap there and takes the lead. We're watching. We will get new votes reported or new counting reported tonight from Nevada. We

will get a sense of where that's headed.

Now in Arizona, there's actually a lot more votes still to be counted there, some 560,000 ballots still to count thereabout. The Democrat Mark

Kelly, the incumbent, he leads there by about 95,000 votes. But again, there is enough runway for Blake Masters to make up that 95,000 vote margin

because there is so much left to count, Richard. Did that help?

QUEST: John, it did. But one of the problems that Americans have in the electoral system these days that is new is this idea of having to wait for

results from mail-ins, from absentees, the counting -- the various processes of whether you count on the day first and then others, this and

that and the other. And even of course, the mail-ins that can arrive provided they were postmarked up to several days after the election.

This is new territory that we saw the difficulties in the last presidential and we could, you tell me, see just as much argy-bargy this time around?

BERMAN: I don't know what argy-bargy is, but I will tell you that what's new, Richard, isn't necessarily how it is done. What is new is people

complaining about it.

In Arizona, for instance, this is the way it's been done for many years, decades in fact, with the mail-in vote. They do their balloting largely by

mail, and it takes them often a couple of weeks to count them all. It is when the margins are this close that people really notice, and the laws are

different in Arizona and Nevada.

In Arizona, all ballots need to be in by Election Day. They needed to have arrived by last Tuesday to count. You're correct,. In Nevada, now, the law

is that if the ballots are postmarked by Election Day, if they arrive before Saturday, they will be counted.

The thing people need to know is that the law -- these are the laws and so the ballots that are being counted now are every bit as valid as the ones

that were counted a month ago before Election Day are the ones that were counted on Tuesday. That's just the way it is. I know it can be frustrating

for people to watch, but it has more to do, Richard, honestly, with how close some of these US elections have become more than the laws themselves

having changed.

QUEST: John Berman at the Magic Wall. I'm grateful, sir. Thank you.

BERMAN: Thank you, Richard. Nice to see you.

QUEST: As we continue tonight on QUEST MEANS BUSINESS, Ukrainian officials are describing a tense and difficult situation in the City of

Kherson. Ukrainian forces are advancing there. The danger is far from over. You'll have that in a moment.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

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QUEST: Ukraine says it has reclaimed more territory on the Kherson region one day after Moscow ordered a partial withdrawal. Kyiv now says it

is retreating Russian soldiers, it could still turn the regional capital into what once was called a City of Death.

Russia claims they have annexed Kherson and four other regions. This is an area Vladimir Putin had vowed would be Russian forever.

Christiane Amanpour spoke to the Ukrainian President Zelensky shortly before Russia said its troops would pull back.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): So, they are ready to defend this region, and they're not ready to leave the city. And

the fact that they are in these homes means that they are seriously preparing, but we are also seriously prepared for these developments.

But we are not considering this as just one single operation. We have a strategy and different directions.

(END VIDEO CLIP)

QUEST: Now the war in Ukraine has taken its toll on global energy costs, as countries in Europe move away from Russian gas supplies. Now the Italian

gas grid operator, SNAM says it is going to increase the country's gas storage capacity by setting up two new LNG terminals.

SNAM is one of Europe's foremost gas companies operating a pipeline network spanning from Italy to the UK and Greece. Three-and-a-half percent of the

world's gas storage capacity is with them, and the chief executive Stefano Venier is with me from Milan.

It is good to see you, sir. I'm grateful for your time.

First before we talk about the new storage facility, the existing storage is just about full, over 90 percent across the continent, and provided the

weather is not too dreadfully cold, then Europe might have escaped the worst effects.

STEFANO VENIER, CEO, SNAM: Yes. Good evening. Yes, I mean, everything we could do to let's say prepare for next winter has been done. As you

mentioned, storage are full at 95 percent, that is five percent more than last five years average, and Italy in itself is secured that 12 bcm that is

basically 30 percent of the winter demand.

We also have a demand that is down by 30 percent plus due to the reduction in industrial consumption mainly. As you mentioned, with an historical

average temperature, winter is going to be in a tight balancing. So, shortfall in supply is not predictable, but still possible in case of

extreme and prolonged freezing winter or a sizeable shortfall on electricity production.

QUEST: Right. So do these two new LNG facilities, now they've been somewhat controversial over environmental grounds and some people have

objected to them, but they are going ahead. They are very large and they will make a difference.

VENIER: They will. They will. We expect to have them on stream the first in 2023 and the second in 2024, and these are essential to underpin the Ruxit

Strategy that the government in Italy and the European level are aiming at.

[15:20:11]

And those assets will cover basically 15 percent of the national demand or 50 percent of the imports we used to have from Russia.

QUEST: So the way in which Europe has diversified its supply, essentially going out there and finding anybody who has got any old liquid

LNG or oil and buying it up on the international market. Now, how sort of sustainable is that as a long-term strategy. I know people like yourself

are not only worried about winter '22-'23, but also long term changes for say, '23-'24 and beyond?

VENIER: Yes. Exactly. We need to work not only on short term responses, like the regasification vessels, or let's say the residual volumes we could

collect from, let's say, the other production countries like Algeria, Azerbaijan, and Norway, we need to work on structuring a resilient European

energy system. That means building redundant and flexible capacity with new investment both on entries, like the LNG and internal transportation to

have the European network more interconnected.

QUEST: So what about those who say, in the short term, yes, but we're still going to go back to fossil fuels. Renewables is all very good and

obviously COP27 has given that, but when you hear of coal coming back on stream, do you start to worry that the environmental requirement, the

sustainability aspect, it is not being forgotten, but it is been shoved to one side at the moment?

VENIER: Oh, temporarily, I think, of course, we need to keep working on both direction. I mean, transition is there. It is a target. I think we

need to combine a short-long-term view, short securing the energy security in the system, otherwise, we will not survive. And in the long term,

building the transition, that of course, is going to take us 20 to 30 years to be completed.

QUEST: Finally, give me a feel, if you will, for how fragile the system is. How -- I mean, both the amount of supply, the ability to -- because one

thing we've also seen in Ukraine is the ability to disrupt the flow and the infrastructure.

So when we look at European energy supply, how fragile is it?

VENIER: To a certain extent, it is fragile because we were relying significantly on Russian supplies. What we are doing is to work with

diversification mainly on LNG, but here comes a major question mark that regards China.

Of course, for this winter, we had larger LNG availability because of the first reduction in consumption in China in the last 20 years. But going

forward, we need to deal with it. We tackle with the possible bounce back in the China import that will make the LNG market more competitive, and now

LNG is essential for European market.

Of course, to face this situation, we need to work also on optimization and reduction in consumption, and at the same time, increase in the renewable

energies that are produced inland.

QUEST: And it all has to be done as quickly as possible with the winter coming up. Thank you, sir.

VENIER: Yes.

QUEST: Very grateful for your time tonight. Thank you.

John Kerry, he is the US climate envoy and he now says the fight against climate change is going to cost trillions of dollars. He wants to raise

that money by selling carbon credits to companies.

In an exclusive interview with David McKenzie, he said the plan should not allow greenwashing.

(BEGIN VIDEO CLIP)

JOHN KERRY, US CLIMATE ENVOY: Where you don't have sufficient rules or guardrails, and you don't have environmental integrity that could happen. I

met with the Secretary-General yesterday, and he was very clear, he doesn't object to all of them, he objects to the ones that are ripping things off.

But if you -- we talked about the tightest possible accountability, and I am absolutely convinced that it is one of the few ways that we have to be

able to produce the amount of capital we need to accelerate this transition.

We will be able to reduce emissions more in the methodology that's been put forward in this proposal where you are actually phasing out coal and

assisting and avoiding to have to go to coal and deploying renewables directly. That will reduce emissions.

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And I think you're going to see, once the rules get fully worked out, and everybody is in a comfort place, hopefully this will be implemented because

we desperately need the money.

There is not enough money in any country in the world to actually solve this problem. It takes trillions, and no government that I know of is ready

to put trillions into this on an annual basis. That's what the scientists and the UN finance report say we must do, two-and-a-half to four-and-a-half

trillion every year, for the next 30 years.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: The private sector is clearly important, but government negotiations are also critical. The US

and China is in a deep freeze. Is this damaging the possibility of reaching climate targets?

KERRY: Well, my counterpart from China and I have in the last days, had informal conversations. We're not formally negotiating at this point. But

our hope is that within a short span of time, it will become possible for us to really get together again in full measure, and do the things we need

to be doing as the two leading emitters in the world, and as the two largest economies in the world.

China and the United States really need to cooperate on this, and without China, even if the US is as we are moving towards a 1.5 degree program,

which we are; if we don't have China, nobody else can make to that goal, and we blow through 1.5 and it will cost citizens around the world

trillions of more dollars.

(END VIDEO CLIP)

QUEST: John Kerry talking to David McKenzie.

After the break, a drama worthy of Shakespeare right in the heart of crypto. Binance now says it will no longer save rival exchange, FTX. As a

result, a new power and a play is unfolding.

(COMMERCIAL BREAK)

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(MUSIC PLAYING)

QUEST (voice-over): I'm Richard Quest. Hello, warm welcome. There is more QUEST MEANS BUSINESS. Binance is pulling out of its rescue of FTX.

Trivago says higher prices is not slowing down travel demand. We'll get to that after the news headlines because this is CNN. And on this network the

news always comes first.

(MUSIC PLAYING)

QUEST (voice-over): A Russian diplomat says Vladimir Putin will not attend next week's G20 in Indonesia. The foreign minister Sergey Lavrov is

expected to make a trip to Bali. The Russian embassy in Indonesia said Putin may join some meetings virtually.

Hurricane Nicole made landfall in Florida, as a category 1 storm. It's the first November hurricane to hit the U.S. in nearly 40 years. It's now

weakened to a tropical storm.

Iranian actress Taraneh Alidoosti posted a picture of herself without a hijab in support of protests that have gripped the country for two months.

She holds a sign that reads, "Women, life, freedom."

(MUSIC PLAYING)

QUEST: Let me tell you what we are waiting. On we're waiting on President Biden, who is going to be speaking. The vice president is currently

speaking at the moment. There you see the president.

It's a reception to thank people for their work on the midterms. As soon as the president starts speaking, we will, of course, go to him. Bear in mind,

this is the markets at the moment.

If you take a look at them and you'll see that we are up very strongly. In fact, we've put on weight since we started the program, we were up 3.3

percent, now we are up 3.5 percent. And that is solid green, absolutely solid green.

The Nasdaq is nudging 7 percent gain. The S&P up 5 percent in a day. These are unrealistic numbers by the way, particularly they're on the back of the

inflation number we saw today. In the view of the economists, does not justify these gains. But will take them.

So is this a dagger I see before me?

You will recognize that as "Macbeth," act two, scene one. The Shakespearean drama which is now taking place in the crypto world is very similar to

"Macbeth," bubble, bubble, toil and trouble.

Sam Bankman-Fried, who is the king of crypto, has been taken down at the hands of his rival, Binance CEO CZ. He backed out of a deal that would've

saved FTX. The reason is, FTX's problems are beyond their help and ability.

The U.S. regulators who are investigating how FTX handled customer funds. Paul La Monica is with me.

When we spoke yesterday or the day before, we didn't see this coming down the way?

PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: No, this is a huge surprise. It does make you wonder, is CZ of Binance the Macduff in this

scenario?

It really is a stunning turn of events that Binance looked at the books further and said, thanks but no thanks. That now has FTX and Sam Bankman-

Fried scrambling to raise more capital. He admitted they made some mistakes. He apologized.

They are now in a situation where they're probably going to have to unwind the Alameda hedge fund aspects of FTX and focus on the cryptocurrency

exchange.

But you have to wonder, Richard, will there be another savior?

Another white knight?

It's going to be very troublesome. But the good news is that cryptocurrencies are rebounding today. Bitcoin and others, including

Ethereum, are up. So maybe the worst is over but I think it's probably premature to say.

QUEST: The president is speaking. I'll thank you. We will go to the president.

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: By the way, Doug criss- crossed the country. I think he did -- he spent more time making sure that the folks who actually count the votes in these states do it honestly. And

thank you.

(APPLAUSE)

[15:35:00]

Folks, on behalf of Jill and myself, we're here for a simple reason, to say thank you from the bottom of our heart, not a joke. We mean this. This is

not a political piece. This is to say thank you, thank you, thank you. Most of all, thank you for believing in your country.

Thank you -- no, I really mean it -- thank you for fighting like the devil to make sure that we had a free and a fair election. You know, all those

election deniers so far, to the best of my knowledge, none of them has not said when they lost, they said we lost. That's a big deal. No, I really

mean it.

Tuesday was a good day for America, a good day for democracy. It was a strong night for Democrats.

(APPLAUSE)

BIDEN: For months and months, all you heard from the press and the pundits was that Democrats are facing a disaster.

Remember that?

And all those polls, all those polls, God love them, you know historic losses are on the way, a giant red wave.

Folks, that did not happen. We were talking backstage here, before we came out, each of us crisscrossing the country, all four of us, and we're saying

we come back and say out I don't know what they're talking about.

No, no, no I'm serious. The overwhelming response we were getting and the fact that even those folks who may not like me or may, not like somebody

but they agree with our agenda. They thought what we were doing --

(APPLAUSE)

BIDEN: -- you know, by the way, all the Democrats ran on the same agenda without being told look, while votes are being counted, we don't know the

outcome of all the races, here's what we do know.

We lost fewer seats in the House of Representatives than any Democratic president in his first elected midterm, at least 40 years. We had the best

midterms for governor since 1986.

Experts said we could not beat the odds but we did beat the odds. And we did it for one reason. This is not hyperbole. Because of you and all of you

up by the -- it's hard to see up in the balcony but God love you. I really mean it, because of you, you believed in the system.

You believed in the institution, you fought like hell for it. And that's the most important thing that happened in my view in this election. It was

the first national election since January 6th and there were a lot of concerns about whether democracy would meet the test.

It did. It. Did it did.

And I want to compliment all those mainstream Republicans. I mean, they fought like we usually fight and they -- we got a result and we accepted

it, everybody accepted it.

So for many of you, you organized. You got the vote out. You volunteered at the polls. Think of all we heard before this election about all the people

being intimidated, all the people being threatened at the polls, all the people who work the polls.

Despite the threats and abuses of too many poll workers on Election Day and I should say election officials, experience of late, you did your job. You

fulfilled your duty. You showed. Up you did what you're supposed to do. And so did the American people.

(APPLAUSE)

BIDEN: Look, the American people overwhelmingly supported our agenda, lower prescription drug costs, making health care more affordable,

rebuilding America, revitalizing American manufacturing, taking on the economy crisis and finally making big corporations pay their fair share.

Preserving democracy, protecting fundamental rights, this is the progress and the programs that we ran on. This is the vote. And it showed there's

some real enthusiasm for what we were fighting for.

And guess what?

It matters. You know, when we came to office, we inherited a nation and a pandemic raging and an economy that was reeling. But we went to work, all

of you. And by the way, I know a lot of you just didn't show up on Election Day. You've been working the last 20 or so months for us.

But you went to work, building an economy from the bottom up and the middle out. So the MAGA Republican trickle down economic policy we decided didn't

work for Americans. Our economic policies created 10 million new jobs. Unemployment went from 6.4 percent down to 3.7 percent, one of the lowest

in 50 years.

QUEST: President Biden extolling his policies. And interestingly, making the strong argument -- which was made in lots of newspapers this morning --

that obviously the Democrats did much better and actually it was almost a Democratic victory in a sense, even though they may well lose the House and

the Senate is still up for grabs.

The red waved didn't materialize.

[15:40:00]

And therefore he feels justified in claiming victory in the round. We'll hear more about that. As John Berman told us there, we've still got a long

way to go.

As you and I continue together tonight, the answer to saving endangered whales might lie in the world's shipping lanes as today's call for Earth

explores technology that could prevent these magnificent creatures from getting injured.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: Michel Andre has devoted 30 years to solving a complex problem of how to protect endangered whales in busy shipping lanes. Now he's finally

putting his work into action. In this week's Call to Earth, CNN joins the Rolex Awards lawyer on his journey into Southern Chile for this

groundbreaking event.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voice-over): About 1,200 kilometers south of the Chilean capital of Santiago sits the quaint

waterfront city of Castro. The area is known both for its cultural and natural splendor.

And this group from around the world comes filled with anticipation. But they are not here as tourists. They've come to mark a milestone occasion.

Barcelona based professor Michel Andre is among them.

MICHEL ANDRE, TECHNICAL UNIVERSITY OF CATALONIA: This project was started many years ago and has required a lot of effort from many people. So today

is a total satisfaction, of course, and a great joy to be here.

WEIR (voice-over): The day's main event involves a four hour round trip into the Gulf of Corcovado to witness the installation of the Blue Boat

Initiative's first smart buoy, part of an effort to protect endangered whales and monitor marine ecosystems.

ANDRE: This is a very important area for the whales. They come, they breed, they feed for a few months per year.

WEIR (voice-over): It's also an area with a lot of human activity and a very busy shipping route.

[15:45:00]

Data collected by the MERI Foundation, a nonprofit focused on scientific research and environmental education, shows an alarming trend, prompting

them to reach out to Michel for help.

SONIA ESPANOL-JIMENEZ, EXECUTIVE DIRECTOR, MERI FOUNDATION (through translator): In the year 2020 and 2021, at least eight whales died from a

collision. That's only in Chile. And in the world work that between 2007 and 2019, at least 1,200 whales died from a collision.

WEIR (voice-over): In the early '90s, the bioacoustic expert discovered human-made noise pollution was drowning out the whales' own sounds, likely

leading to deadly collisions. In response, he developed the whale anti collision system, a first of its kind technology, designed to alert ships

of the whales' presence for the past 30 years he has continued improving on the idea.

ANDRE: When the whales play a fundamental role in the ocean and (INAUDIBLE) ocean on the ballot.

WEIR (voice-over): Growing scientific evidence shows that protecting whales can benefit global climate and their bodies act as a carbon sink.

Each great whale sequestering on average 33 tons of CO2.

ANDRE: This is why we need to take the Gulf of Corcovado as a natural laboratory, where we can study the way to combine the interests of human

activities with the conservation of the ecosystems.

WEIR (voice-over): The smart buoy works by using software called listening to the deep ocean environment or LIDO, for short. It is a network with more

than 150 acoustic observatories all over the world, developed by Michel and his team.

Named Suyai, which means hope in the local Mapuche language, this buoy is now connected to the vast network. In addition to collecting other

scientific data, it will use its artificial intelligence software to identify the type and location of sea mammals, alert the authorities, who

can, in turn, notify nearby vessels to slow down or change course, thus avoiding impact.

ANDRE: This is a historic day because of the many years of developing the technology. This is the first time that it's applied for this purpose. To

prevent collision, to improve the quality of the habitat where the whale lives, to preserve the natural environment. This is just a step now. This

is not the end.

This is the start of another long process to replicate the same approach along the Pacific Coast, where we know that there are the same challenges

that the whales face with human activities.

(END VIDEOTAPE)

QUEST: Beautiful mammals. Now let us know what you are doing to answer this call. You know the hashtag, #CallToEarth.

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[15:50:00]

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QUEST: You may have noticed on the course of the program from the exchange over to my left here, you will see the Department of the Navy, Carlos Del

Toro, who's the 78th Secretary of the Navy. He will be ringing the closing bell. He just arrived, walked through stock exchange.

(INAUDIBLE) cheering for the Navy Secretary and you will see him in about 10, 9.5 minutes when he rings the closing bell.

Before that, inflation is slowing down and airline tickets are getting cheaper. That is what the CPI data is showing. Here, the index fell more

than 1 percent last month. The CEO of Trivago says travelers are still spending, despite rising costs. That means a faster recovery for travel and

leisure.

Axel Hefer our good friend is with me, CEO of Trivago. He joins me.

Good evening, Alex. I'm reading your shareholders' note for the latest quarter. And it is an absolute mirror of the economy. You talk about

significant improvements, of course, increasing and average price levels, affordable destinations. But inflation will take its toll on real

disposable incomes.

AXEL HEFER, CEO, TRIVAGO: Absolutely, yes, so that's basically what we are expecting and partially seeing already.

QUEST: So every plane I have taken is full. I mean and they are full at the front and the back. So expensive tickets.

Is this pent-up demand?

Is this leisure?

Is this people dipping into savings?

What are you seeing in the bookings?

HEFER: Yes, so you are right. I mean, this summer has been extremely strong and for us and most of the other travel companies, we've booked

record quarters with record profitability. So people have delayed a lot of their trips, a lot of their business trips have been delayed. And a lot of

money has been saved during the pandemic.

So this summer has been extremely strong. But what we are starting to see is that travelers are trying to mitigate some of the cost increases by,

you, know spending fewer days when they are traveling. We've seen some early indications of that in Europe by going for cheaper destinations and

also by comparing more prices.

QUEST: Now if we then catapult ourselves forward into spring, because, I know, of course, after December, it's a huge buying time for summer

holidays next year. Now that tends to go to the big companies, the big sort of tour operators.

But if you look to your February, March, April of next year, what are you seeing there?

HEFER: Yes, so for us, we start to see the first signs of it. But for us really, the bookings are starting to come in earlier of the year. So our

booking windows are more three months rather than six months.

But what we expect is that the absolute spending will be up. But the relative spending will actually slightly come down, so people will manage

to partially compensate the price increases through cost savings.

QUEST: I was at the WTM and earlier this week. It was interesting. Destinations are being a lot more selective, where they show their wares.

For example, New York and California and much of the U.S. was not there.

And we've got, of course, the WTTC with its annual conference coming up. The industry, I think your numbers are showing it. The industry is on the

cusp of its best years ever. But the clouds are dark ahead.

HEFER: Yes, absolutely. I think it's a bit like, during the pandemic, to be honest. You can see already that next year will be tougher, quite a bit

tougher in Europe. I think slightly tougher in U.S. and in Americas overall.

And one thing we learned in the pandemic is it's always better to act early and to prepare for a worse outlook than to wait for it and then be

surprised.

QUEST: What can you do to do that?

HEFER: Yes, so we actually have basically focused on our core value proposition in summer, so we cater to adjacent products and projects. And

we believe that the biggest opportunity for us is really focusing on our core product, just comparing at that price, which is more relevant next

year than it has been in the last couple of years.

And I think that is what all companies should do. They should really focus on the key value they can bring to their customers next year.

[15:55:00]

And make sure that they reduce their costs and they can basically sustain any potential environment that we are about to face.

QUEST: Sound words of advice. Thank you, sir. Great to see you, always good to see you. Thank you.

Now let me show you what the markets are doing as we leave you. Inflation is cooling off, stocks are set for their best day. There you see the Dow

and the triple stack. If we look at the Dow itself, the Dow 30 and see that the makeup of the Dow 30 then hopefully we can get an understanding.

Only one bit of red, McDonald's. I can only assume that's on a frolic of their own. But Boeing is up 5 percent. That is a huge number which, of

course, has dragged the market up. Salesforce, there you might expect it because -- but it's Home Depot, it's Nike, it's Microsoft.

It's broad based and Apple being up so strongly is very telling for what this means for the market because clearly, it's retailers. And Apple, of

course, is suffering as a result of Christmas and we know the Foxconn problems there.

Plenty for us to get our teeth into as we have our "Profitable Moment" after the break.

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QUEST: Tonight's "Profitable Moment," I'm not going to be the Grinch or the miserable one that basically says that the market is overpriced,

overvaluing, discussing, you know, things that this inflation number is wrong or right.

No, no. The market will make the market's judgment on what it is. I think it's gotten too excited as a result of this inflation number. But to go up

1,100 points, fair enough. What it tells me more than anything else is that there is a wall of money out there that is just waiting to move into the

market.

By the way, for those of you who are wondering, I sliced my finger opening a can. Even as I was doing it, I thought, this is not going to end well.

Sure enough, it did not.

But that could arguably the same way With the market. The market thinks it's all over but the shouting. Well, as we've told you tonight, that is

not the case. Rates are still going to go higher. Inflation has not been tamed. There is still more work to be done.

But like the Navy who you are going to see in just a moment ringing the closing bell, at least there is help and support for exactly what is going

on. And when the experts get involved, there you are, you can hear, the big roar and cheer as they get ready to ring the closing bell. We are watching

it all in its glory because that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest at the New York stock exchange. Whatever you are up to in the

hours ahead, I hope it is profitable.

END