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Quest Means Business
JPMorgan Buys Most Assets At First Republic Bank; Biden Meets With Philippine President Marcos; Violence Erupts Mid May Day Marches Against Pension Law; Manhunt For Shooter Suspected Of Killing Five In Texas; Russia Launches New Wave Of Missile Attacks Against Ukraine; U.S. Marine Veteran Killed In Bakhmut. Aired 3-4p ET
Aired May 01, 2023 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISA SOARES, CNN INTERNATIONAL HOST: It is the first day of a new trading month and the Dow is kicking off May as you can see there, in the red, just
turning red in fact in the last hour, down six points, pretty flat to start off with, but those are the markets and these are the main events for you.
JPMorgan CEO says snapping up the collapsed First Republic may bring a banking crisis to an end. I'll ask Mohamed El-Erian.
On the streets of France, more than 700,000 people voice their anger in May Day protests.
And is AI coming for your job? The managing director of the World Economic Forum tells us millions of positions couldn't be made obsolete.
Live from London, it is Monday, May the first. I am Isa Soares, in for Richard Quest and I too, mean business.
Good evening, everyone. Welcome to the show.
Jamie Dimon says the current banking crisis is over as he assumes control over what remains of First Republic Bank. JPMorgan announced Monday
morning, it will buy most of the trouble lender. The bank had been unsteady since the collapse of Silicon Valley Bank, if you remember back in March.
Dimon said he believes the banking system is now on a stable footing. He warned in a call earlier the economy could face further issues down the
road. This is what he said. Have a listen.
(BEGIN AUDIO CLIP)
JAMIE DIMON, CEO, JPMORGAN CHASE: This is getting near the end of it. And hopefully this helps stabilize everything.
The American banking system is extraordinarily sound. You know, and obviously if going forward, you have recessions and rates going up and
stuff like that, you will see other cracks in the system. That's to be expected. The system is very, very sound.
(END VIDEO CLIP)
SOARES: Well, Matt Egan is with me.
So Matt, just explain to our viewers really how this deal came together?
MATT EGAN, CNN REPORTER: Well, Isa, the fact that JPMorgan is coming to the rescue here is obviously great news. I mean, the nightmare scenario was
that the FDIC was going to have to run this bank and bail out uninsured depositors at a cost to taxpayers and a cost to confidence.
You know, the best case would be that a white knight would step in to kind of stop the bleeding, and that is what has happened here.
In his statement this morning, JPMorgan CEO, Jamie Dimon, he said: "Our government invited us and others to step up, and we did." So let me take
you through some of the numbers here.
JPMorgan is paying the FDIC $10.6 billion to buy most of First Republic. It is assuming $173 billion of this bank's loans. And this is really
important. JPMorgan is acquiring all $92 billion of First Republic's deposits, including those uninsured deposits, those above the $250,000.00
limit that the FDIC normally insures.
So that means if you have money at First Republic, your money is safe. It's just changed hands to a new bank, JPMorgan.
I think going forward, though, the question is whether or not we're going to see any more bank failures. Are we done? Or could there be more trouble
along the way?
And also, what does this mean for the real economy? Because we know that all of this credit stress is going to make bankers less willing to lend --
you know, mortgages and car loans and small business loans, and all of that has a real economic impact, it slows the economy down, and that's on top of
the Federal Reserve's war on inflation, which is also slowing the economy down.
So hopefully, Isa, we are through the worst of it, because the longer the banking crisis lasts, the greater the damage it's going to do to the
SOARES: So fears of contagion? What is your sense of what you're hearing in terms of well, are we over the worse like Jamie Dimon said?
EGAN: Well, I mean, the situation does feel a lot better than six weeks ago, let's say. I mean, at that point, we saw regional bank stocks in
turmoil. We saw not just First Republic, but a lot of different banks suffering massive drops in their stock prices and more importantly
experiencing significant deposit outflows.
And so although some of those regional banks like the ones on your screen right now, PNC, PacWest, Citizens Financial are down today, you know, it
does not feel like we're seeing this cascading wave of selling right now.
US officials, they have said that the deposit outflows have stabilized. Jamie Dimon talked today about how the latest earnings reports from
regional banks do show some strength.
But you know, the big wildcard here is the Fed because whether or not the Fed continues this war on inflation, it is going to really have a big
impact on the banking system.
If the Fed raises interest rates this week, which is widely expected, but also continues to raise interest rates in the months to come, then you
could see even more stress on the banking system and even more pressure on the economy.
SOARES: Matt Egan, thanks very much for joining us there from New York.
Well, this morning's deal will make the biggest bank in US even bigger. JPMorgan shares are up about two percent the last time I looked, while --
yes, just over two percent.
It will gain exposure to First Republic's wealthy clientele. First Republic stock lost almost all of its value in fact, last week, after seeing
customers have pulled out $100 billion in deposits.
It is now the third bank to collapse in just two months. Many investors now wondering whether it will be the last.
Well, that is indeed the question.
Mohamed El-Erian is the president of the Queen's College of Cambridge University. He joins me now.
Mohamed, you're just the person we need to wrap my head around this.
First of all, you know, when the news broke today, when I saw it early this morning, many of us in my group were asking: Why are we here again? You
know, 11 banks pumped -- what -- $30 billion into the bank last month. Your initial reaction to this?
MOHAMED EL-ERIAN, PRESIDENT, QUEEN'S COLLEGE OF CAMBRIDGE UNIVERSITY: So first, thank you for having me.
We are here because of three things that have happened that catch vulnerable banks off site; one, a massive interest rate increase that has
caused a mismatch in its balance sheet; two, lapses in Federal Reserve supervision and regulation; and third, deposits have become much more
flighty, much more volatile.
So when you bring these three things together, you can trigger a crisis at one of these regional banks that don't have the size or the diversity of
the big bank.
SOARES: And what our viewers will want to know, Mohamed, at this stage. I mean, does this is finally put an end then to the banking concerns that
we've been seeing over the last few months?
I mean, Jamie Dimon, as you heard there from Matt Egan in that call, basically thinks we're nearing the end, right? The banking system is sound.
Is it, in your view?
EL-ERIAN: So the banking system as a whole is sound, but not every bank is sound. Viewers should be reassured because every single failure has seen
somebody guarantee all deposits.
So we have established a practice now that's going to be very difficult to change of guaranteeing all deposits. That is good news for the depositors
and I think that people should feel reassured with that.
But we've made all sorts of changes to the system that weren't envisaged. We're making this as -- we are making it up as we go along. The big banks
have become bigger.
We have changed the deposit insurance system. We have also created more moral hazard in the system. So there is an issue of what happens next, and
as your reporter rightly said, the one people that will suffer are those that went to those regional banks for loans, that they are going to find
loans much harder to get and that is small and medium-sized enterprises.
SOARES: And when we look, we're looking at some of the shares or some of the medium banks we brought up. They are all pretty much on the red as Matt
Egan mentioned, but you know, I was speaking to one economist earlier and he basically said, look, in terms of First Republic, Mohamed, you know,
asset quality, the credit quality was pretty pristine.
So just explain what was behind, you know, First Republic's what was the Achilles heel here? What caused the problem compared to the other two that
EL-ERIAN: So this one was one of the most admired and most envied banks. It had a very rich clientele putting deposits. It had rich people taking out
jumbo loans, and those rich people are very credit worthy, and it had one of the best customer service.
It was envied by so many other banks, and yet it failed. And not only did it fail, but it died in a very slow and painful death. It's been on the
ropes since last March. And as you said, 95 percent of the value of that bank has disappeared. So other banks are looking at this and saying, wait a
minute, this bank should have been stabilized earlier on and it wasn't. That's why you've seen the reaction to the share price.
What was its problem? Basically, it couldn't liquidate except at a loss what it held against deposit. So once the deposit started going out the
window, people realized that it was having losses. People realized it was having a capital hole. That meant it needed more funding, but the funding
had become more expensive, which means to the depositors worried even more.
So it got into this vicious cycle that was triggered really by Silicon Valley Bank.
SOARES: We heard from Jamie Dimon, a media call today, Mohamed and he said that he did this deal not to hold off recession, because it made business
sense. Do you buy that?
EL-ERIAN: Oh, it makes total business sense. I mean, you can see the share price of JPMorgan higher on the day.
Look, they got a bank for one-twentieth of what that bank was worth at the beginning of the year, one-twentieth and they've gotten some good people.
They've gotten some sound deposits and they've gotten some good mortgages. Yes. I mean, as usual, JPMorgan has made a very smart move.
SOARES: Let's talk about the wildcard that Matt Egan was mentioning and that's the Fed. We have the FOMC meeting this week. Are we seeing another
hike? Or is there enough evidence for a pause? And how do you think, of course, the correlation with this and the banking sector and the risk of
inflation. Your thoughts, Mohamed?
EL-ERIAN: I would be very surprised if we do not see a hike. If we -- I expect that the Fed will hike by a quarter of a percentage point. Why?
Because the latest inflation numbers are worrisome.
Not only is inflation proving sticky, but inflation expectation, how people think inflation will evolve over the next year and longer term have gone
up. So the Fed has got to hike, and also the Fed believes that it has different tools to deal with different issues.
So it can deal with inflation using interest rate tools, and it can you deal with financial stability using other tools. So, I am almost certain
that they will hike by quarter of a percentage point.
SOARES: Mohamed El-Erian, always great to get your perspective. Thanks very much, Mohamed. Appreciate it.
Now, right now US President Biden is hosting Philippine President Ferdinand Marcos, Jr. at the White House. They are hoping to strengthen security, as
well as economic relations. It is in response to a growing threat from China.
The two are expected to discuss sending US military aircraft and patrol vessels to the Philippines. They may also announce a trade mission for
later this year.
Keeping an eye on it all for us is Kevin Liptak, he joins me now from the White House.
So Kevin, talk us through what we are expected to hear from both leaders and critically what both sides want to get out of this.
KEVIN LIPTAK, CNN WHITE HOUSE REPORTER: Yes, we did see them in the Oval Office just now. President Biden talking about the US-Philippine
relationship and saying that the US commitment to the Philippines' defense is ironclad. And in fact, the Philippines is the United States' oldest
treaty defense ally in the Asia Pacific.
So this is quite a complicated relationship, but it is a historic one. And of course, it is all about China. And you have seen President Biden try and
ramp up US military cooperation with the Philippines over the last year or so.
The Philippines has recently just granted the US military access to four additional bases in the country, and they have also just completed military
And of course, the real advantage that the US sees in the Philippines is proximity. The Philippines, their northernmost island is only a hundred
miles from Taiwan. So, as the US prepares for this eventual possible Chinese invasion of Taiwan, it wants its troops in position to help defend
the island, and that is really where the President sees the advantage in this relationship.
Of course, it's about more than just China. There's also this potential for the trade delegation, and I believe President Biden also announced that in
the Oval Office just a few minutes ago that he would be sending this trade and economic delegation to the Philippines to try and boost that aspect of
But really President Biden is trying to sort of repair a relationship that had frayed over the last several years both under President Trump, but also
under the former Philippine President Rodrigo Duterte, who had looked for closer ties with China. President Marcos is signaling that he wants to
develop a closer relationship with Washington.
Now that name will be familiar to viewers. He is the son of the longtime dictator, Ferdinand Marcos, Sr., that relationship had been -- or that
dictatorship had been backed by the United States. And in fact, in an interesting historical footnote, President Biden had opposed the Reagan
administration all that many years ago when he was a senator, so that there is this interesting sort of bookending.
Now President Biden very welcoming of Ferdinand Marcos, Jr. as he comes to the White House and really tries to bolster this relationship with Asia.
This is sort of a longstanding weeks' long, months' long effort. You saw last week the South Korean president at the White House. President Biden
will be headed to Japan and Australia in a couple of weeks sort of this you know, longstanding attempt to refocus American foreign policy to the Asia
Pacific -- Isa.
SOARES: I do like a good historical footnote, Kevin Liptak. Thank you very much, Kevin. Appreciate it.
LIPTAK: That's terrific.
SOARES: No French protests grew heated today. The violence is being condemned by union heads and government leaders. Our Melissa Bell reports
from Paris after this.
SOARES: Now in France, more than 700,000 people took part in today's May Day protests over increase in the retirement age. That is according to the
government's own figures.
Some protesters showing their frustration by starting fires. There were clashes between demonstrators and police in Paris, the Prime Minister
condemning those who resorted to violence as unacceptable.
Protesters have been turning out to oppose the Pension Reforms for months now and union leaders say, there is more to come.
Melissa Bell is in Paris for us this hour. So Melissa, how is it looking? I can see they are still out, very chaotic scenes we are seeing today. Have
things calmed down now a bit more?
MELISSA BELL, CNN CORRESPONDENT: They have quite a bit. What we've been seeing over the course of the last hour or so, Isa, are the riot police
really clearing out the Plaza de la Nacion. The last few remaining protesters, they are facing off with the police inside that at the entrance
to that metro station, but really this was their determined attempt to clear the square and get it free of protesters off for a day.
After a day, Isa that has been remarkable for its violence. There are more than a hundred policemen across the country that have been wounded today,
some of them severely so.
This was a day that the unions were determined should see many people turn out -- more than -- nearly 800,000 in the end did turnout across the
country. And again, a day really marked by remarkable levels of violence once again.
(BEGIN VIDEO CLIP)
BELL (voice over): Even after months of protests, it was a day of remarkable violence. Anger, not just at pension reform, but at the
Clashes erupted within the first half hour of demonstrations in Paris.
May Day is a traditional day of marches for workers' rights in France, but this year with the raising of the retirement age from 62 to 64, protestors
were out in droves in Marseilles, Rennes, Toulouse, and in the capital.
SOPHIE BINET, SECRETARY GENERAL, CGT UNION (through translator): You just have to look at the processions behind, you can see that today is a
historic May Day and we can see that this day of mobilization is a stinging denial of all the bets made by the government.
BELL (voice over): From September, the French will start working longer than they had after the government pushed through the reform without a vote
But the unions have vowed to fight on nonetheless.
(on camera): This May the first was always expected to be an important barometer of the popular anger that is out there, but it is likely also an
important measure of just how difficult the next four years of governing are likely to be for the French president.
(voice over): All the more so because despite the many months of strikes and sporadic violence, more than 62 percent of the French are sympathetic
to the movement, according to polling from April.
THIERRY CAMUSSO, UNION REPRESENTATIVE, CGT VITROLLES (through translator): We are going to show Mr. Macron, that the country, we are not happy with
this reform, and it will not do.
BELL (voice over): The government says the current pension system is simply not affordable, its deficit at risk of spiraling out of control.
But that line hasn't dampened the popular anger so far, with frustration against Emmanuel Macron and his manner of governing, showing no signs of
BELL (on camera): So what happens next, Isa, that's the big questions for the unions. They will gather tomorrow morning after this day of protest to
work out what their next plan is, either they say they will be looking at another day of protest on Wednesday, or they'll push that back to June 8th,
which is when the opposition parties are in any case tabling a motion to try and get this pension reform repealed.
Either way, Isa, what they are determined to do is keep up this pressure from the streets, perhaps not to change this particular pension reform, but
certainly to get in the way of any other reforms the French president may have had planned -- Isa.
SOARES: And just how damaging, Melissa, politically is this? Because you and I were talking in the last hour, because when this started, it was
seven weeks or so ago, it was so much based on the reform, on the policy that he was trying to push through.
How much is this rancor that we've seen, this anger that we've seen in the streets are now being focused on actually Macron and how damaging this
could be for him?
BELL: I think, initially, when he announced at the start of the year, that 2023 was going to be the year of pension reform. It was all about showing
that he was that reforming president that could touch even the sacred cows of the French Social Security System and push through controversial
reforms, that he could be tough, get tough and when he said something, he meant for it to be heard.
There was something about the timetable that he had announced, the very frontal way in which he insisted that it would be done that really got on
the wrong side of the union to begin with, and they accused him of not organizing or allowing for any of the normal kind of debate.
In the end, because of that popular anger that we've seen over the course of the last few weeks, it is an awful lot of political capital that he's
invested and it appears lost.
And I think the real question is now beyond the anger in Parliament, beyond the anger on the streets, how much support he feels he has around himself
to attempt anything else.
After all, this was meant to be the beginning of a long series of reforms that were meant to be the legacy of his presidency. Four more years at this
stage, very difficult to see what he can try and get through or what he can actually manage to get through -- Isa.
SOARES: Yes, the road ahead may indeed be long. Melissa Bell, appreciate it. Thanks, Melissa.
Well, Cuba's traditional May Day March has been cancelled because of a nationwide shortage of fuel. Cubans have been suffering for weeks as fuel
stocks run out.
Officials say the regular suppliers Russia and Venezuela haven't been sending fuel shipments. CNN's Patrick Oppmann has the story for you from
PATRICK OPPMANN, CNN CORRESPONDENT (voice over): It's a country running on empty. Across Cuba right now, more cars seemingly wait online to fill up
the drive on the road. Even at stations when there is no gas, people line up for when or if it finally arrives.
For drivers like Elienne (ph), the sudden island-wide shortage of fuel means they spend their days trying to fill up rather than working.
(ELIENNE speaking in foreign language.)
OPPMANN (voice over): "It ain't easy. They sell too little," he says, "Only 40 liters. That only gives me enough for one day. They won't give me more
Some people immediately siphon the gas they managed to pump either to resell or to hoard it as they get back in line all over again.
Increasingly, Cubans complain that police are letting too many of what they call "indisiplinas," undisciplined behavior take place.
OPPMANN (on camera): What many people do is they save several spots per car which multiplies many times over how many people are actually in this line
waiting for gas. Once the gas actually arrives, so people come rushing back they cut the line and that's when all hell breaks loose.
(voice over): As the lines get longer, tempers get shorter. Certain privileged groups like foreign diplomats have their own gas stations
assigned to them, but it makes little difference when there's no gas to pump.
The Cuban government has said little about the crisis. The worst in years, but acknowledges that there has been a disruption of shipments from
suppliers like Venezuela, Cuba's socialist ally, who they receive oil from in exchange for medical workers.
JORGE PINON, UNIVERSITY OF TEXAS AT AUSTIN ENERGY INSTITUTE: The first domino piece that falls out of this is Venezuela, that it is selling its
better quality crude to those customers that can pay cash. So the good quality crude that Cuba used to get are no longer there because Cuba
doesn't pay cash for crude oil.
OPPMANN (voice over): The ripple effects of the gas crunch impact nearly everyone on this island. University classes have been canceled, farmers
don't have fuel for tractors. There is not enough diesel for garbage trucks to empty dumpsters that overflow with trash.
And the Cuban government was forced to cancel the massive parade held every May Day in Cuba's Revolution Square.
Usually, the island's top leadership looks on as hundreds of thousands of workers file by. This May Day, officials are encouraging Cubans to march in
their own neighborhoods. There simply isn't enough fuel for anything on a large scale.
(UNIDENTIFIED MALE speaking in foreign language.)
OPPMANN (voice over): "We will still commemorate May Day," he says, "But rationally and with maximum austerity."
Then on Sunday, the government announced that celebrations would be pushed back to Friday because of weather conditions.
Cuban officials have said the gas shortages will last at least through the end of May and as frustrating and punishing as this crisis is for Cubans,
all people can do is hope and endure their long waits.
Patrick Oppmann, CNN, Havana.
SOARES: After the break, a humanitarian catastrophe. We will have the latest on Sudan's deepening crisis, as thousands try to make a grueling
escape from violence.
SOARES: Hello. I'm Isa Soares. There'll be more QUEST MEANS BUSINESS in a moment when we'll be in Sudan where CNN witnessed firsthand the journey to
escape the violence.
And a new report says 14 million jobs will disappear because of artificial intelligence. Before that, this is CNN, of course and on this network, the
news always comes first.
A manhunt continues across the southern United States tonight for the man accused of shooting and killing five people in Texas over the weekend. He's
been identified as Francisco Oropeza, a 38-year-old Mexican. A source from the U.S. Immigration Service tells CNN he was previously deported at least
four times prior to the shootings.
Russia has launched new missile attacks across Ukraine. The Russian Defense Ministry says all the same targets would hit overnight. Ukraine says it
intercepted at least 15 cruise missiles but some is -- missiles did land. Ukrainian officials say there were dozens of casualties into Kherson and
The U.S. Department says -- the U.S. State Department I should say says a U.S. Marine veteran was killed on the outskirts of Bakhmut, Ukraine last
week. Cooper Andrews' mother says he was hit by a mortar amid the battle for the Ukrainian city. He was killed evacuating civilians while working
for an activist group.
And environmental groups are suing the U.S. Federal Aviation Administration over last month SpaceX rocket launch. The starship exploded over the Gulf
of Mexico about four minutes after it took off. The lawsuit says the FAA allowed the launch to go ahead without considering its likely impact on the
surroundings which are a home to protected animal species.
British singer, songwriter Ed Sheeran says allegations in his copyright infringement trial are "really insulting." He continued testifying Monday
in the New York courtroom denying that he copied Marvin Gaye's classic. Let's get it on. Sheeran says his song Thinking Out Loud was actually
inspired by Van Morrison.
Now, the humanitarian crisis in Sudan is reaching breaking point. That is the warning from the United Nations, which says the fighting could force
more than 800,000 people to flee the country. With a conflict into a third week, the warring sides both say they agree to extending the current
ceasefire. But Khartoum was again rocked by gunfire and explosions today. An estimated 73,000 have already escaped the fighting for neighboring
Many have headed to Egypt, Chad, South Sudan, as well as Ethiopia. Others are taking the long and grueling journey as you can see there from your map
from Khartoum to Port Sudan hoping toward ships headed for Saudi Arabia. CNN's Larry Madowo traveled on one of them and filed this report.
LARRY MADOWO, CNN CORRESPONDENT (voice-over): 2:00 a.m. and they're finally getting out of Sudan after many anxious days. Saudi soldiers check
documents and lead them through. A nightmare almost over.
MADOWO (on camera): Thousands of people have (INAUDIBLE) over 500-mile journey from the capital Khartoum to here in Port Sudan. One person told us
it took them 36 hours but finally on a boat and eventually it was shipped to Jeddah.
MADOWO (voice-over): A sad final goodbye to Sudan, victims of the stormy waters in Africa's third largest nation.
HAMZA NAVID, PAKISTAN EVACUEE: It's very, very hard for me and very hard and very painful for me because this like a second home my home.
MADOWO: CNN joined Saudi forces on an evacuation voyage from Jeddah to Port Sudan and back, bringing more people one step closer to save shores.
But the demand is high, and the military ships can only take so many people at a time. Our round trip was more than 24 hours, but brought back only 52
people across the Red Sea.
Sudanese American businessman Adil Bashir can finally sleep undisturbed for the first time in two weeks. He says his car dealership in Khartoum was
trashed, burnt, and some vehicles stolen. So, he took the risk of drive to Port Sudan.
ADIL BASHIR, SUDANESE-AMERICAN EVACUEE: A lot of human body, dead body on the
MADOWO (on camera): You say you were detained by men in Rapid Support Forces uniform after you told them you're a U.S. citizen?
BASHIR: Maybe you are a U.S. citizen, you are a spy. I believe they want us to be like a human shield because they were 13 ahead of me.
MADOWO (voice-over): As more people escaped from Sudan, another ceasefire was broken over the weekend with fighting in the country. And during the
third week. The Saudi port city of Jeddah has become the main landing point for thousands fleeing the conflict. The Saudis are throwing everything at
this rescue operation.
GENERAL TURKI AL-MALKI, ROYAL SAUDI AIR FORCE: The assets, the capability, military civilian in Saudi is taking the civilian from Sudan. So, as long
as it's safe, we will keep doing our role.
MADOWO: This large commercial ship brought nearly 2000 evacuees from Port Sudan, one of the largest arrivals in Jeddah so far.
Hanadi Ahmed and her Sudanese American family were among those in the vessel received by U.S. embassy staff. They're relieved to be safe, but
heartbroken for those who couldn't get out.
HANADI AHMED, SUDANESE-AMERICAN EVACUEE: It's very bad because all my families are here. My mom, my dad (INAUDIBLE)
MADOWO (on camera): You're scared for them.
MADOWO: I am so sorry.
AHMED: It's OK. We are out.
MADOWO (voice-over): A few like dual nationals and foreigners can leave but most Sudanese people are trapped in a deadly conflict with no end in sight.
Larry Madowo, CNN, Jeddah, Saudi Arabia.
SOARES: We'll stay on top of this story for you. Now the board appointed by Florida Governor Ron DeSantis to oversee Disney special district is now
suing the company. Its chairman says the purpose of the lawsuit is to uphold the board's authority over the special taxation district. Last week
Disney sued DeSantis and his oversight board saying they had punished the company for political reasons.
That dispute goes back to when Disney publicly spoke out against what critics call the states Don't Say Gay law. CNN Steve Contorno joins me now
from Florida. So, Steve, we are now have a jeweling lawsuit here. Just remind us how we got here. Because this battle between DeSantis and Disney
really has been going on for almost 15 months now.
STEVE CONTORNO, CNN REPORTER: That's correct. This all started when Florida lawmakers pushed through a bill that critics have called the Don't Say Gay
bill. This bill restricts how sexual orientation and gender identity can be taught in schools here. Disney put out a statement opposing this bill. It
was pretty tepid but another nevertheless, the governor pounced on it and objected to Disney getting involved in state matters.
And what DeSantis did then was go after Disney special taxing district. This is a district that governs the land around Disney's large footprint in
Central Florida. It's surrounds all the theme parks. And basically, this is a government that was essentially handed to Disney, you know, about 60
years ago. And they were -- they were given this swamp land and they said basically do what you want here.
And for most of its existence, the state and Disney have both benefited from this partnership. Disney has built one of the largest tourist
destinations in the world. And that has brought a lot of tax dollars to Florida. But in this fight, DeSantis has gone after that special government
and earlier this year moved to take over the board, put his own appointees in charge of it. That board then came in power to find out that Disney at
the 11th hour had moved a lot of its power -- a lot of the board's power to the company.
And they didn't like that. So, they voted to nullify these agreement agreements which caused Disney to sue last week. And now we see this board
is filing its own lawsuit creating what I expected -- many expect to be a legal back and forth that's going to last probably for the foreseeable
SOARES: Yes. A legal -- battle of legal ping pong. But you know, DeSantis - - Ron DeSantis and I think it's important to say this, he hasn't thrown his hat in the ring for president, for Canada, right? As a candidate. But how
damaging, Steve or perhaps favorable this might be for DeSantis do you think this could be going after a major corporation? Will this hurt him or
hinder him here?
CONTORNO: Well, right now, it depends on who you ask. If you talk to Republican Party supporters of his, a lot of them have been very
enthusiastic about his war with Disney. They see this as a company that has pushed progressive values on people and they think it's impressive that the
governor is willing to stand up to even his own -- it's one of his state's largest business to push his conservative agenda.
But when you talk to others who are sort of sick of the Trump era of politics and Republican leaders and potential rivals who are considering
challenging DeSantis, they say what are we doing here going after a business because of something they said?
So, we've seen sort of this push and pull the Republican Party over what DeSantis is doing here. And I think we'll have to wait and see whether or
not voters ultimately think what aligns with this and current GOP or if it is going a step too far.
SOARES: Steve Contorno, thanks very much for breaking it all down for us. Appreciate it, Steve. And of course, DeSantis hasn't thrown his hat in the
ring. But one man has. Former US President Donald Trump. He is set to participate in a CNN town hall next week. This just into CNN. Trump will
take questions from New Hampshire Republicans and undeclared voters who plan to vote in the 2024 presidential primary.
The event will be moderated by CNN Chief U.S. National Correspondent Caitlin Collins. Well, stay tuned for that.
Now, historic day for Kevin McCarthy. Only the second ever U.S. House Speaker to address the Knesset, Israel's Parliament. Earlier he met with
Prime Minister Benjamin Netanyahu who has been facing mounting pressure at home and abroad over proposals to overhaul Israel's judicial system. Mr.
Netanyahu has had to put those plans on hold, but said in an interview with CNN that despite a growing chorus of criticism, Israel remain a robust
Hadas Gold was at the Knesset and spoke with McCarthy shortly after he addressed parliament.
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: This was the U.S. speaker Kevin McCarthy's first trip abroad since being elected speaker and he said that
that was on purpose. That he wanted his first trip and first address to a foreign parliament to be -- to Israel for its 75th anniversary because he
wanted to highlight, he said that the U.S. has no greater ally than Israel and vice versa.
And that was the tone that was carried through this entire trip. And through his address to Congress essentially saying that the U.S.-Israel
alliance is incredibly important. He said that as long as he is U.S. speaker, the U.S. security assistance for Israel will continue. He talked
about the threats that Israel faces saying that the U.S. will always support Israel when it comes to any of these sorts of military threats.
And he will also work on the international arena to be set to prevent these unnecessary attacks on Israel, especially in the United Nations. The only
slight moment of criticism in his entire speech was about being careful about Chinese investments. But at its core, this was a pro-Israel stump
speech. He made biblical references to the fact that Jerusalem is Israel's eternal capital. He talks about the shared values between Israel and the
United States, saying that they are values of freedom of liberty, and of faith.
Later, at a press conference, he was pressed about the more internal issues in Israel. Asked about Israel's judicial overhaul plan that Prime Minister
Benjamin Netanyahu's government has been trying to push through. It's on pause right now. He was asked about and essentially said that that is
something for Israel to decide with its internal politics, it's a democracy. He said they can make their own decisions.
I asked the speaker specifically about some of the more extreme members of this government, some ministers whose statements have been criticized by
the U.S. administration. I asked him whether he is concerned about the direction of this government. Take a listen.
(BEGIN VIDEO CLIP)
REP. KEVIN MCCARTHY (R-CA): He's the -- he's the Prime Minister. He's in control.
GOLD: Now. Do you think, though, that he will bring this judicial overhaul plan back on the table?
MCCARTHY: Look, it's -- there's work. But I think what's happening now, what he told me is, they're working with both sides to come together to a
compromise to try to solve the problem. I've heard from both sides and both sides says there need to have some reform.
(END VIDEO CLIP)
GOLD: Speaker McCarthy had also said that if President Biden does not invite Prime Minister Benjamin Netanyahu to the White House soon, he will
instead invite Benjamin Netanyahu to speak to Congress, even without a White House invitation. Making a joke, saying that he's been treated the
same way by President Biden since McCarthy, he says has also not yet been invited to the White House to meet with President Biden.
But he did soften that just a little bit saying that he does expect the President to invite Benjamin Netanyahu to the White House in the near
future. This was -- I should know, a bipartisan delegation, more than a dozen Democratic and Republican members of Congress coming to Israel to
commemorate its 75th anniversary. And the tone was definitely one of a continuation of the Israeli-United States alliance.
And it was bipartisan also from the Israeli side, although there's deep divisions in Israel right now on politics and on the direction of the
country. Both the coalition and opposition members were in attendance and gave the speaker McCarthy a very welcome standing ovation.
Hadas Gold, CNN, Jerusalem.
SOARES: And coming up. A new report says artificial intelligence will create 69 million jobs by 2027. Even more, though will be eliminated. We'll
speak to one of the people behind that report just ahead.
SOARES: Welcome back, everyone. The World Economic Forum looked into how A.I. will impact jobs. And you might not like wait what they found out.
Their new report estimates A.I. will eliminate 14 million more jobs and it will generate -- they will create over the next five years. Globally, as
you can see there on your screen, it says 83 million jobs will go while 69 million are created. Thanks to A.I.
It comes as tech leaders including the man-dubbed, the grandfather of A.I. raise major concerns of the future of artificial intelligence. Saadia
Zahidi is the managing director of the World Economic Forum. He joins me now from Geneva city. Saadia, great to have you on the show. So, creation
has 69 million new jobs, but a net decrease of 14 million in the next five years. I mean, what industries from what -- from this report, what interest
you see facing the biggest changes here having the most impact because of A.I.?
SAADIA ZAHIDI, MANAGING DIRECTOR, WORLD ECONOMIC FORUM: So, we're looking at more than A.I. when it comes to some of the changes. And it's very clear
that the jury's out when it comes to artificial intelligence, about 50 percent of companies think that there will be growth and jobs and about a
quarter of companies think there will be net decline in jobs. The growth of course, as expected, artificial intelligence specialists, machine learning
specialists, people that are working with big data, those are going to be growing roles.
When it comes to declining roles, it's really people that are at the lower skilled end of the workforce. So, people who are working in administrative
and secretarial roles, bank tellers, people who are postal service workers, those are the ones who are most likely to be disrupted by artificial
intelligence. But then there is also growth. There's expected to be more than four million new jobs in agriculture.
More than three million new jobs in education. A number of jobs, at least a million that are going to be created because of the green transition. So,
when we look at that complex mix of both technology and sustainability and supply chain changes, there's actually going to be nearly as much growth as
disruption of jobs.
SOARES: And Saadia, you've probably heard this, this is a conversation that's constantly being had. I mean, people and workers are concerned about
their own jobs. What can they do to protect their positions? I'm thinking - - I'm talking about here of A.I. specifically.
ZAHIDI: So, it's very clear that those that are students and learners at the younger end of the workforce today should absolutely be becoming more
technology literate, should be spending more time on starting to understand some of the changes that are afoot. But when it comes to the workers that
are already in the workforce, the one thing that companies are placing a very high premium on beyond technology skills is actually leadership and
So, the ability to be able to work with other people, to be able to collaborate and essentially to do things that machines and algorithms
cannot do. That's what companies are looking for. And another element of that is critical thinking, creative thinking, analytical thinking. These
are all things that workers have in plenty already in the workforce. And they could be doing more to upskill themselves.
SOARES: And you -- I mean, you and I have spoken about this report, not this specific at all. But previous reports. You've been doing this since
2016, following the labor market. Just talk to us about the evolution, you know, as you tracked, of course, the labor market. When you talk about
A.I., did you see it in the last, you know, three, four reports or so, what stood out to you here?
ZAHIDI: Yes. This has been very interesting. You know, the last two reports, everyone was concerned about the robot revolution. About the rise
of industrial robots, and potentially even humanoid robots that are going to disrupt healthcare and factories and education. And here we are today.
And that's not quite played out. In fact, there's been an increase in the roles that are required across all those sectors.
Even increase in advanced manufacturing and in factory workforces. So, we're at a similar inflection point today. It can look very daunting to
look at the types of skills that will be disrupted. And yet at the same time, it's clear that there is ample opportunity for people to be able to
do more value-added work with artificial intelligence.
SOARES: Saadia Zahidi, thank you very much. I was actually impressed that we said that companies are prioritizing women. 79 percent. That was great
to read. Appreciate it. Thanks very much.
Now, China's Golden Week is boosting tourism. And business owners are welcoming the return of much needed customers. That is next.
SOARES: Tourism in China is seeing a massive boost during its May Day Golden Week. It's a welcome lift for businesses as the economy begins to
recover from the heavy blows, of course, of Beijing's zero-COVID policy.
CNN's Kristie Lu Stout has a story for you from Hong Kong.
KRISTIE LU STOUT, CNN CORRESPONDENT: It's China's first May Day Golden week holiday after the pandemic. And tourism is surging. In Beijing, massive
crowds have descended upon the great wall. On Sunday more than 14,000 people visited the Mutianyu section of the wall located north of Beijing.
Throngs of visitors are at the entrance, climbing the wall and queuing for cable cars.
Meanwhile, in Macau, hundreds of thousands of Chinese tourists have been crowding into the world's biggest gambling hub. The surge comes after
pandemic restrictions were lifted in January, opening the door wide to visitors for the first time in more than three years.
BECKY ZHANG, SHOP OWNER (through translator): Now the customers flow has recovered to around 60 to 70 percent of pre pandemic levels. So, we are
very busy. Compared to during the pandemic, it's much more fulfilling and there's less worry.
ALA ZHANG, TOURIST (through translator): To be honest, I feel that the vitality of the pre-pandemic period has really been restored with the
crowds of people and bustling atmosphere. I haven't seen this for a long time.
GOLD: According to state media, over 240 million people will travel during the five-day holiday period surpassing pre pandemic levels. Domestic travel
bookings for the holiday period have also exceeded 2019 levels according to trip.com.
GOLD (on camera): And here in Hong Kong, more than 165,000 people arrived from the mainland at the start of the May Day Golden week holiday. After
three years of tough border controls the city is luring visitors back and hopes are high that it will be a golden week for consumer spending.
Kristie Lu Stout, CNN, Hong Kong.
SOARES: And there are just moments left to trade on Wall Street. I'll have the final numbers and the closing bell right after this.
SOARES: Now investors in the U.S. are watching the bank -- banking sector closely after JPMorgan of course agreed to buy what remains of First
Republic Bank. As you can see there, the Dow has given up early again. So, you can see them turning a read, down almost 40 points is (INAUDIBLE) 30
points pretty flat for today. If we have a look at the bigger picture in terms of Dow components tells us story really. JP Morgan of course, it's up
as you can see there in the green up two percent after benefiting from that First Republic buyout on -- up over two percent.
Merck interesting here. Also, up almost one percent with beat. It reported an earnings speech last week. But other than that, we're not seeing many
big swings. Intel though, if you haven't had a look here is down or almost two and oh, just over 2-1/2 percent. Last week if you remember, it reported
its worst quarterly loss ever. That's a picture for the start of May.
And that is QUEST MEANS BUSINESS. I'm Isa Soares. The closing bell is about to ring on Wall Street. And "THE LEAD" with Jake Tapper starts right now.
Have a wonderful day. Bye-bye.