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Quest Means Business
Tensions Flare Between U.S. And Europe; Trump: Announcement On Spirit Airlines Today Or Tomorrow; Oil Prices Fall As Iran Sends New Peace Proposal; Britain Faces Rising Public Dest And Slowing United States Trade; NASDAQ, S&P 500 Higher After Best Month Since 2020; "The Devil Wears Prada 2" Hits Theaters. Aired 4-5p ET
Aired May 01, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:23]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street.
Boys and Girls Club of America are ringing the closing bell, a variety of charities with them as well. Trading is over.
Look, as you can see, a sharp -- a bit of a sharp fall. Oh, one and a two and a one, two, three. Good Lord! The lady in yellow has knocked the
bejabbers and she is still going. She is determined.
My word! You don't get that on a Friday and it is probably just as well, since the market is off 153 points. It is a bit of a sharp fall towards the
end of the day. There are lots of undercurrents that explain why the market is down, and we will get to them over the course of the program.
Those are the markets, the events, these are the reasons.
President Trump will increase tariffs on E.U. cars and trucks to 25 percent, because, he says the E.U. isn't complying with the terms of a
trade deal.
Spirit Airlines is reportedly planning to shut down as President Trump says he has given them a final proposal.
And on the treadmill, quite literally, the chief exec of Pure Gym, the company's ambitious plans for global expansion.
Live from New York, Friday, May the 1st. "Sell in May and go away." We will discuss that as well. I am Richard Quest and I mean business.
Good evening.
A growing rift between the U.S. and Europe has got wider, with President Trump increasing tariffs on E.U. made cars and trucks.
Mr. Trump says the higher tariffs in response to the union dragging its feet on a trade deal and he has been lashing out all week, specifically
against the German Chancellor, Friedrich Merz, who said the U.S. was being humiliated in talks with Iran.
Donald Trump says he is thinking about reducing troops in Germany as well as Italy and Spain, two other countries whose leaders have publicly
disagreed with him.
On the tariff issue, the German automakers are urging a swift talks to avoid these higher tariffs. Now, automotive news says the current tariffs
already cost Volkswagen, BMW and Mercedes $6 billion last year, and that's when the tariffs were 15 percent, put it to 25 percent and you can imagine
the damage.
Elisabeth Buchwald is in New York with me to do the tariff side. Nic Robertson is in Islamabad to do the E.U. leaders in trouble side. Let's
start with you.
This came out of the blue, Elizabeth. What is really driving -- why now for this?
ELISABETH BUCHWALD, CNN BUSINESS ECONOMICS REPORTER: Yes, I am sure Nick will cover this a little bit more, but we are seeing a lot of divisions
between the E.U. and the U.S. and for a while we haven't seen any of these threats after the Supreme Court ruling. But right now, it seems like Trump
is trying to turn things around and have more cards in his hand.
QUEST: Bu Elisabeth, a 15 to 25 percent when there was a deal in place and we don't know the legality because we don't know how it has been done, but
it does once again show that Donald Trump is determined to use tariffs.
BUCHWALD: Absolutely. And here is the thing. So, 232 is what he has used. It is a set of industry specific tariffs to do automotive tariffs in the
past and it seems like what he is trying to do is set a new playbook here where he can't do those huge country specific tariffs, he is going to have
to go after the sectors that matter most to these trading blocs.
QUEST: Nic Robertson how much of this do you think is punishing Europe -- whatever it is dressed up as -- how much do you think it is punishing E.U.
leaders, particularly those like the German leader, because BMW, Mercedes, et cetera.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, obviously this is going to put economic pain into the E.U. and President Trump feels he is
getting pain in his war against Iran because the European countries aren't there side by side with him.
They do have meetings. They do talk about what to do after there is a permanent ceasefire deal with Iran, but they do view this Trump -- this
war, as a war of choice by President Trump and they have been very leery about getting dragged into it. It is politically toxic for them at home.
You know, on one hand, President Trump seems to be sort of throwing distraction away from the fact that he is not getting what he wants from
the Iranians right now, so some of it may be part of what he is very good at doing, which is creating distraction.
[16:05:13 ]
But absolutely, there is displeasure and Italy, Spain in particular, have not wanted to give the type of military support to the United States in
terms of bases for aircraft to take off from bases that are there already, but allowing the U.S. to use them to strike Iran, so some of it is probably
buried in there as well.
QUEST: Elisabeth, back to you. We've got a good example of how tariffs are still very much on the agenda. The President lifted the tariff on scotch
whiskey because he was so happy with King Charles' visit.
I mean, yes, thank you very much for the scotch whiskey industry, but no country or industry can feel at ease when they know tariffs, once again,
are the weapon du jour.
BUCHWALD: I was going to say that E.U. should maybe think about getting a King and Queen of their own and having them do a visit to the U.S., but,
yes, it is -- as you point out, that's exactly correct.
QUEST: Elisabeth, I am grateful. Elisabeth Buchwald on that side of the story.
Last question to you, Nic Robertson. I feel that I have to sort of -- don't have to, but I need to, now, are there any advancement on talks?
ROBERTSON: There are steps, as President Trump said, does it go far enough? He is indicating not. Is it far enough for him to keep talking rather than
turn to bombing? Maybe. Iranians very experienced at getting into negotiations like this. But nobody actually knows precisely.
Publicly, it hasn't been stated what Iran has put on the table. I've got some indications from an Iranian official today, but that's not concrete
points.
Just to follow up on the whiskey tariffs, by the way, I did speak with a whiskey executive in Scotland earlier today, somebody I've been in touch
with over the years on precisely this issue. He was very happy to see that.
You know, as you know, this is a billion dollar business for the Scottish whiskey industry and it has cost them significant double digit percentages,
this tariff.
So, this, they think is good. But as you say, how long will it last? And if the mood sours over Iran, as we've seen and discussed here, President Trump
will look around to see what else he can do to either shift the narrative or perhaps, as we've indicated here, take out frustrations that lie
elsewhere.
QUEST: I suggest, sir, that bearing in mind all of that, you pick up a couple of bottles in duty free on the way home and you're most welcome back
in Britain.
Thank you, sir. Nic Robertson joining me and Elisabeth Buchwald.
The fate of Spirit Airlines -- talking of that from whiskey to spirits. Well, I thought that was funny.
The fate of Spirit Airlines is about to become much clearer. President Trump says he will make an announcement on a potential bailout today or
tomorrow. Spirit is trying to secure $500 million lifeline from The White House. It struggled to emerge from Chapter 11 bankruptcy.
It is the second time it has been in Chapter 11 in recent years, and largely, of course, higher jet fuel prices. The airline is reportedly
preparing to shut down in a matter of days.
The President says he will only bail the company out, if it is something in it for the United States.
(BEGIN VIDEO CLIP)
REPORTER: Did you decide against bailing out Spirit Airlines?
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: Well, I guess we are looking at it. If we could do it, we would do it, but only if it is
a good deal.
REPORTER: I think that they're preparing to shut down this weekend because they haven't gotten a deal.
TRUMP: Well, we are looking at it, but if we can't make a good deal, no institution has been able to do it. I said, I'd like to save the jobs, but
we will have an announcement sometime today. We gave them -- we gave them a final proposal.
(END VIDEO CLIP)
QUEST: Jon Ostrower is with me, editor-in-chief of "The Air Current." He is with me from Seattle. Jon, it is good to see you.
If there is one person who knows what is really going on with spirit, it is you. What is your understanding of their plans -- the airline's plans, and
whether or not they're going to accept the government.
JON OSTROWER, EDITOR-IN-CHIEF, "THE AIR CURRENT": Well, I think this really comes down to what the President wants to propose. I mean, I think the
stakeholders in this equation are trying to look at what the government is coming up with and say, hey, is this something that we can accept? And I
think what the state of that deal is, is ultimately up to -- it is really up to The White House.
QUEST: Right. But the plan is, as we understand it, essentially going to wipe out existing shareholders, but they're going to get wiped out anyway
if the whole thing goes down, which begs the question, you know, for Spirit, is it even -- jobs aside and the human factor aside, is it even
worth them staying flying?
[16:10:11]
They can't make money. They've not made money for years. Their model is flawed. They're not big enough. They weren't allowed to merge. This is just
good money after bad.
OSTROWER: Well, look, I think that certainly is the position of a lot of the creditors, they look at a Spirit Airlines that is worth more dead than
alive and really, this is a human tragedy, certainly for all the people involved, this is going to be incredibly disruptive.
But I think the -- as you look at sort of from the business perspective, yes, this is an airline that since the pandemic has not made money and the
structural forces behind them reaching this point are really baked into the system.
There is really no restructuring plan, at least in the eyes of certainly the folks that we talked to within the industry that would suggest that
there is a path toward a viable business/
QUEST: And I guess no one wants to take it over, along with the debt and obligations that would come with it, because it is not big enough, it
doesn't have enough oomph in any particular market, except maybe obviously the north. It is not really -- it is not a player worth having.
OSTROWER: Well, I think that that really gets to it. It is too small to be valuable to any of the bigger players. Certainly, there is a presence in
South Florida that JetBlue is trying to take advantage of, but I think you really hit the nail on the head.
This airline, the sum of its parts are worth more than it as a whole.
QUEST: Jon, can I just throw one thought to you? Any of us who have covered airline closing down, they do it overnight. They do it in the morning. All
of a sudden they say all flights are off. The first flight of the day is not going to go because exactly what has happened.
The one thing you don't want is people talking about you shutting down. It is one thing to go into Chapter 11 where they already are.
I guess, nobody is booking Spirit Airlines today.
OSTROWER: Well, it is funny, you go back in history and Herb Kelleher, the founder of Southwest, was asked, hey, what airline do you think is going to
go out of business next? And he said, well, I am not even touching that with a ten-foot pole because number one, this business is too fickle and
you might be in the pickle next. But really what it comes down to is you don't want to wish ill on another airline because it has a chilling effect.
When airlines are talking about shutting down, people stop booking and it becomes a death spiral. And I think that's what we've really seen with
Spirit over these last months, even as they tried to come up with a plan that delivers some type of viable business on the other side of
restructuring.
QUEST: Jon, it is so good to have your insight. Thank you, sir.
Jon Ostrower from Seattle, "The Air Current."
In just a moment, the U.S. is taking aim at Iran's economy ad so far, Tehran has managed to avoid economic collapse or at least that's the way it
appears, after the break, what's really going on?
(COMMERCIAL BREAK)
[16:15:35]
QUEST: Now there are some pictures for you, across the United States, demonstrations are taking place in honor of May Day.
The protests, as opposed to celebrations in other parts of the country, come as many across the country are expressing frustration against the war
in Iran and the resulting rise in gasoline prices or gas prices at the pump.
Oil itself fell as Iran sent a new proposal for peace negotiations. The U.S. President reported, he is not satisfied with the offer and that Iran's
options are a deal or in the President's word, blast the hell out of them.
Meanwhile, an Iranian source is telling us Tehran is deeply distrust distrustful of the U.S. Still, it was enough to send West Texas almost
three percent lower, bearing in mind this WTI versus Brent.
The two sides appear to be preparing for an economic war of attrition. The U.S., of course, trying to cripple Iran's economy through its blockade.
Sanctions have been there for years. Now, they have got the blockade and the president -- the U.S. President says Iran is in a state of economic
collapse.
Still, Iran's economy has shown resilience. Store owners say they've seen some disruptions. They haven't experienced that full scale collapse.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): Our domestic products haven't gone up in price, but most imported goods, yes, those have become more
expensive, about 20 to 30 percent more.
After the war, there hasn't been a shortage of essential goods. But there was a period when prices went up.
UNIDENTIFIED MALE (through translator): Naturally, prices have changed. I can't say they haven't, but part of it could be people panic buying and
stocking up at home. And part of it is that we've been through a war. So some price increases are to be expected.
(END VIDEO CLIP)
QUEST: Now, Adnan Mazarei is the former Deputy Director of the IMF's Middle East and Central Asia, now senior fellow at Peterson.
Good to see you, sir.
Look, this is an economy that is well-used to sanctions and trading, if you will, in strange circumstances. But aren't you even impressed at its
ability to withstand this onslaught as a result of war?
ADNAN MAZAREI, FORMER DEPUTY DIRECTOR OF THE IMF'S MIDDLE EAST AND CENTRAL ASIA: As you said yourself, Iran has been dealing with sanctions and has
worked out mechanisms to circumvent them, be it for exports of oil, financing of imports. Naturally, as this year, things have gotten worse
because of the war and because of the upgraded level of sanctions on Iran, especially to curtail its oil imports and use the international banking
system to move their money.
But there is considerable pain being created for the population. Inflation is running around 50 percent, but this regime in Iran has a high tolerance
for the pain that the people are suffering and also this regime is not about to fold in, given the current level of economic pressures.
QUEST: Okay. But if they cannot export their oil because of the blockade, how long before -- and I realize you've just said they're not about to
collapse, but not having that revenue from oil or gas exports, how long before that takes an intolerable toll on the economy?
MAZAREI: I would say several months. The government can resort to printing money, of course, that will raise inflation. The most pernicious impact of
sanctions will be coming through the exchange rate.
In the past two weeks alone, the exchange rate has depreciated by 20 percent and it is passing on to the prices. It is that pressure which may
induce the government to change its stance on some things, but I don't expect it to.
QUEST: If it doesn't change its stance and the U.S. continues.
I mean, this stalemate scenario that we are in becomes very difficult to see how it plays out ultimately. But arguably, whilst we've got oil at
hundred and whatever it is, a barrel, the damage into global economy just keeps perpetuating.
[16:20:21]
MAZAREI: You're absolutely right. There is inflation in the U.S., but the U.S. is not the one country that's hurt the most. European countries, East
Asian countries are being hurt considerably where one particular issue that is worrisome is the decline in the exports of petrochemicals, especially
fertilizer from the Persian Gulf, which is going to create difficulties for global food security.
We are seeing more and more reactions from the Europeans and Asians.
QUEST: I am grateful, sir, thank you for joining us. I appreciate it. Thank you.
MAZAREI: My pleasure.
QUEST: Now, Nearly two months, around 20,000 -- twenty thousand sailors have been stuck in and around the Straits of Hormuz in the Gulf. The
governments have floated the idea of escorting ships out of the Strait to get them some help.
You'll remember the Secretary General of the International Maritime Organization told me on this program last month that the plan is a
nonstarter to get people out of the way that has been put at the moment.
(BEGIN VIDEO CLIP)
ARSENIO DOMINGUEZ, SECRETARY-GENERAL, INTERNATIONAL MARITIME ORGANIZATION: We need to reiterate that escorting vessels is not the solution, because it
doesn't eliminate the risk a hundred percent.
A ship that is being escorted by a naval vessel can still be attacked, can still be actually affected, and we can lose seafarers. That's something
that I am not prepared to encourage the industry to do.
(END VIDEO CLIP)
QUEST: Now, Isobel Yeung spoke with one ship's captain, who shared the fears that his crew is facing. She also spoke to a family of an Indian
sailor who was killed on an oil tanker last month.
(BEGIN VIDEO CLIP)
CAPTAIN ISTIQUE ALAM, ON AN EMIRATI OIL TANKER JUST OFF THE COAST OF OMAN.: Ma'am, nobody are caring about seafarers. Ceasefire not for seafarers.
Ceasefire is applied for normal people.
ISOBEL YEUNG, CNN INTERNATIONAL CORRESPONDENT: The Strait of Hormuz has been pretty much shut down since the start of the Iram War, which means
that about 20,000 seafarers are currently stranded. We are about to call one captain who is stuck on one of these cargo ships.
ALAM: Nice to meet you, ma'am.
YEUNG (voice over): Captain Istique Alam is on an Emirati oil tanker just off the Coast of Oman. He and his crew have been stuck there for over two
months, along with dozens of other ships.
ALAM: Everybody wants to go home, you know, at night time, I shut my all vessel light because we don't know what will happen.
YEUNG: It must be difficult to sleep.
ALAM: Yes, of course, of course. You know, I am Master, so I don't want to show I am scared.
YEUNG: But you are scared?
ALAM: I am a human being, ma'am. I am saying I am not warrior, I am seafarer.
YEUNG: How close to the war have you been?
ALAM: I saw one of a fighter jet attack one drone.
YEUNG: It must be scary.
ALAM: Yes, a lot of people are scared, man. Every day. Every day we are in fear because we don't trust the stupid leaders.
YEUNG (voice over): They have good reason to be scared. At least 0 sailors have been killed since the outbreak of war according to the United Nations.
UNIDENTIFIED MALE: Yes!
YEUNG: Twenty-four-year-old Dalip Singh was on board an oil tanker when a missile hit the ship. A fellow sailor who managed to escape contacted
Dalip's family to let them know he hadn't survived.
We spoke with Dalip's cousin, Devendra.
YEUNG (on camera): There have been these very dramatic videos of the ship that your cousin was on, going up in flames after it was hit. That must
have been horrifying for you to see.
(DEVENDRA, COUSIN OF KILLED SEAFARER speaking in foreign language.)
TRANSLATION: This was the first time I had ever seen such a tragedy. I had never seen something like this before and there was hopelessness in my
heart.
Why did something like this happen to my brother?
YEUNG (voice over): With the U.S. and Iran at a gridlock and no sign of the Strait reopening, sailors are often forgotten in a geopolitical crisis that
they never saw coming.
YEUNG (on camera): I mean, obviously, you know, there is a ceasefire at the moment. We don't know whether the fighting will break out again or what
will happen with this war. Do you have a message for the world powers who are leading this war?
(DEVENDRA, COUSIN OF KILLED SEAFARER speaking in foreign language.)
TRANSLATION: These two countries are at war. But innocent citizens and people are becoming the target. It's not their fault.
YEUNG (voice over): Isobel Yeung, CNN London.
(END VIDEOTAPE)
QUEST: The city of London is trying to deepen ties with the United States as British exports are in some trouble.
Chris Hayward, the city of London's policy chairman will be with me after the break.
(COMMERCIAL BREAK)
[16:27:55]
QUEST: Hello, I am Richard Quest.
Together, we will have a lot more QUEST MEANS BUSINESS. I will be -- maybe for the faint hearted look away -- but I will be sweating it out with the
Pure Gym CEO as his company is expanding in the United States.
And we will be discussing my favorite movie, "The Devil Wears Prada," and what its sequel tells us about the state of publishing. Before that, this
is CNN and here, the news always comes first.
Donald Trump is slapping a new 25 percent tariff on European cars and trucks. The President says he took the action because the E.U. is not
complying with the trade deal that he reached with them.
Some of Mr. Trump's previous tariffs have run into opposition in the courts. It is unclear the legal basis for this latest.
Also, Mr. Trump says he is not satisfied with Iran's latest proposal to end the war in Iran, telling reporters the regime has made some strides, but he
is not sure a peace deal is possible. The President described the Iranian leadership as very disjointed, and Tehran sent a revised plan to America
through Pakistani mediators.
Protests and rallies have taken place around the world to mark May Day or International Workers Day. Thousands of people who took part in streets of
places like Marseille in France called for higher wages and better working conditions. For some, the economic fallout from the Ukraine war was a
rallying cry for peace.
The tensions between the E.U. and the U.S. seem to be getting worse, obviously, with tariffs. But President Trump does seem to be on much better
relations with Britain, having removed all duties on scotch whiskey, the President said he made the decision in honor of King Charles and Queen
Camilla, who have only just finished their visit.
On Truth Social, he wrote: "The King and Queen got me to do something that nobody else was able to do without hardly even asking.
New numbers from the U.K. government show that goods exports to the U.S. fell sharply. With tariffs, slowing trade has become an issue for the U.K.
economy and so is the bond market.
[16:30:11]
Britain is now lumped with Italy and France. The BIFs, as they are known. In particular, seen their borrowing costs rise since the war broke out.
The yield on the 10-year gilt is now close to five percent up 50 basis points over the past year. Investors, some would suggest, have lost
confidence -- excuse me, in the U.K. economy.
London's financial center is the city of London. With me, Chris Hayward, the city's policy chairman, who was here on the visit of the king, and
who's just opened a new office.
And the city of London, you know, at the end of the day, Chris, you can't flim-flam the financial markets. If they don't like what they see in
borrowing costs and debt to GDP, and all this sort of things, as we saw with the Liz Truss regime, short lived as it was, they are going to sell.
And at the moment, the financial markets are wary about Britain.
CHRIS HAYWARD, POLICY CHAIRMAN, CITY LONDON: Yes, look, I think it's a really challenging time, but we have got to remember that we are dealing
with the most extraordinary geopolitical situation that we've ever dealt with in my lifetime, and therefore, markets are nervous, and understandably
nervous of what's going on in the world.
But I'm here in the US because the New York financial services sector, the New York and London -- City of London, that I speak for are incredibly
important competitors, but also able to work together. And what I want to do is to see a greater transatlantic cooperation between our financial
services and our markets.
QUEST: Well, hang on, what more could there be? The two are almost lockstep anyway. And arguably, post Brexit, that relationship. But your big problem
is back in London, whereby, for example, the ability to employ people has become more difficult with visas, post Brexit, some has moved -- have moved
business into continental Europe, Amsterdam, Madrid, Paris, or Frankfurt.
You are going to point and tell me that Chase and JPMorgan have spending billions on a new headquarters in London, but it's -- there is still a tent
some would argue.
HAYWARD: Well, look, let me say this that, obviously, Brexit, as far as I'm concerned, was not good news for the City of London or for financial
markets. But what we have been able to do is to be very resilient in the wake of Brexit. We didn't lose huge numbers of jobs to Europe as was
predicted when Brexit came about.
And you are right. I mean, I was with Jamie Dimon this morning of JPM, and they are opening a huge new office, but they are not the only ones. We have
got HSBC moving back into the city. We have got State Street, Clifford Chance. So actually, the Square Mile that I speak for the financial
district is booming. 25 percent up on our jobs at the moment, and we are really trying to build as many tall buildings as we can to accommodate
global demand.
(CROSSTALK)
QUEST: How --
HAYWARD: So, we definitely are not struggling in that area.
QUEST: How tricky do you think the current U.K. political situation is? Now, you know, I'm not going to take you too far down the political road
per se, but obviously, the prime minister is on the ropes over Mandelson. Now, we have the whole issue of anti-Semitism having been raised in a very
ugly and violent way, despite what's been said.
And work has to be done in a sense.
HAYWARD: Look, I think it does. We have moved in the U.K. from a what was a two-party system to a multi-party system. We have our local elections next
week across London, and I do think probably the government will take a hammering. But actually, what's happening, if you look across Europe, and
you look in the U.S., is there has been an incredible rise of sort of populist parties, populist parties to the center right.
So, I suspect we'll see some of that happening with reform in the United Kingdom. We have also seen a rise in the support for the Green Party as
well on the other end of the spectrum. So, I think it's everything to play for. We are still two years out from another general election, so, we've
got a stable government in albeit that you're quite right. Prime Minister Starmer is up against the ropes at the moment.
(CROSSTALK)
QUEST: Right.
HAYWARD: And he needs to do well in these elections.
QUEST: We had Sadiq Khan on the program recently, where we were talking about the perception that London is highly taxed, that its infrastructure
needs money spending. Now, the City of London is slightly different at one level, but it shares many of the same issues. And we had the Lord Mayor of
London, of course, on this program, they all come here eventually, you know. They all decide to sell their wares on QUEST MEANS BUSINESS.
What do you think is the biggest selling point for the city?
HAYWARD: Well, you know, Richard, we have a lot of natural advantages. First of all, the rule of law. You know, so many contracts are written in
British law enforcement across the world.
[16:35:03]
We have a good time zone. We have a good language. But actually, we also have good skills. And what I'm finding is that the demographic in the City
of London is changing to a much younger professional demographic as well.
(CROSSTALK)
QUEST: Right.
HAYWARD: So, I think we've got everything to play for. And I feel very optimistic actually about the future of the square mile. We are resilient.
We have been around a thousand years.
QUEST: Right.
HAYWARD: And we are going to be around for another thousand years.
QUEST: Well, hopefully so we can do a summer Friday, and maybe you can even get us into the mayor's parlor where we can present the program from.
HAYWARD: For you, Richard, of course, we can.
QUEST: With the mayoral chain as well. Thank you, sir. Good to see you. Have a safe journey back to Britain.
(CROSSTALK)
HAYWARD: Thank you very much.
QUEST: Coming up. U.S. market soared. Now, you know the old thing, sell in May, go away, but who would want to sell when there are such gains to be
had? Or maybe that's the point.
(COMMERCIAL BREAK)
QUEST: For decades on Wall Street, they used to say, and in the City of London, sell in May and go away. Those were the days. Because at this time
of the year, traders will be getting ready for a summer in the Berkshires or the Hamptons going off to the Borscht Belt. And the idea was that you
sold the stocks that generally like between June and September, because markets were so quiet.
It might be tempting after the NASDAQ just posted its best month since 2020. Analyst at Deutsche Bank are not so sure. They advise against it
based on historical data of European stocks.
Apparently, it's a bad idea, because, you know, Sam Stoval is the chief investment strategist at CFRA Research. You and I both grew up with that
mantra, sell in May, go away. I don't know anybody who ever actually did it, but everybody said somebody else should.
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA: Well, Richard, yes, everybody talks about it because historically, from World War II, the May
through October period gained only about two percent for the overall market, but up seven percent from November through April. And so, at least,
it's something that sounds interesting, and it advises investors, don't let your emotions rule your portfolio's action. Just be aware that there could
be volatility in these coming six months.
QUEST: So, if there is no real justification for the -- for the old idea of sell in May, go away.
[16:40:02]
The problem is, A: if you are selling stocks now at higher levels to the capital gains tax issue in many cases that you have got, particularly, if
you look at Nvidia and those big ones. And secondly, what do you do with the money instead? Now that's a stupid question. At one level, you put into
cash, you put into the bonds or whatever, you put your pocket somewhere.
But then, you are going to have the uncomfortableness of just watching the market go up and up and up.
STOVALL: Well, you are right. And also, really, it's only the Midterm Election year of the four-year presidential cycle, in which the sell in May
adage actually works, because, in that period since 1990, the S&P lost 1- 1/2 percent on average, and also fell more frequently than it advanced.
So, typically, investors rotated into the defensive areas of food, beverage, tobacco, and health care as they waited out this volatility, but
then, dived back into the more cyclical sectors like tech come the beginning of November.
QUEST: Do you think that's a strategy worth following today?
STOVALL: I think it's something that for nervous investors could be a good way of staying in the market, in a sense, rotating rather than retreating.
But this technique has not really worked over the last six or seven years.
(CROSSTALK)
QUEST: OK.
STOVALL: Mainly, technology has just driven the markets so dramatically.
QUEST: So, a question I'm asking, sort of -- most of all, people like yourself, who know what they are talking about.
Before we went into the war, there was a definite, obviously, story and feeling that the market was overvalued, the A.I. hype, et cetera, et
cetera. That to some extent has abated, as we have got numbers. But the truth is that the market is still tech AI dominated and that could still be
regarded as precarious, or am I being old fashioned, and somewhat backward?
STOVALL: No, I think you are right that investors are concerned, because valuations do matter, whether it's technology stocks or any other stocks on
the market. And prior to the recent sell off, the tech stocks were trading at a 20 percent premium to their five-year average valuation. And today,
they are still around a nine percent -- nine -- 10 percent discount. So, some investors would say that there is upside momentum ahead.
QUEST: I'm good, good to see you, sir. Thank you very much indeed for joining us. Very kind. Thank you.
STOVALL: My pleasure.
QUEST: All right, how do -- how do you want to look on the beach? Yes, right. Better than we did before. So, go to the gym. Well, I went to
Puregym. I did some rowing with the chief executive, and we talked about his plans for the way in which they are going to advance in the United
States.
(COMMERCIAL BREAK)
[16:45:39]
QUEST: Our regular viewers know that, you know, "Details of your incompetence do not interest me. By all means, move at a glacial pace. You
know how that thrills me." They are, of course, the quotes from my favorite film, "The Devil Wears Prada", where the sequel is out in cinemas this
week.
The original film depicted the glamorous life of a fashion magazine. 20 years on, and the landscape is very different in media. The sequel to
tackle the decline of print media and publishing and the pressure of maintaining a luxury lifestyle.
Brian Stelter is with me. I just love "Devil Wears Prada". I could quote it all, all day, because of what it said about the time. You know, when they
go job to jobs that pay the rent. It was about the millennials.
BRIAN STELTER, CNN CHIEF MEDIA ANALYST: Yes, yes. Yes, and it was 20 years ago, at a time when now, we know, as we look back, it was kind of the
pinnacle for that print publishing industry, for those magazines. Runway is the name of the magazine. The film obviously inspired by Vogue, Anna
Wintour, of course, her character played by Meryl Streep.
And you know when you look at that film now versus then, well, these films actually are quite a pair. For anybody going to see the film this weekend,
or maybe some folks already have. It's already made $40 million in international markets. What you see is a eulogy for an industry in decline,
you see the runway print magazine getting scrutinized by tiktokers and influencers.
So, Richard, is very much of the moment exploring the shifting balance of power and media. And I've seen some reviewers say it's one of the most
biting satires of modern media they have ever seen.
QUEST: OK. But that was the great part about the original as well. It nailed it in terms of how far people wanted to go.
(CROSSTALK)
STELTER: Yes, yes.
QUEST: To be in media, to be there, and the -- and the pressures of doing it. But Brian, core to it is -- this is the contradiction.
STELTER: Yes.
QUEST: We still want the content. We still want the stories. We still love the glitz and the glamor. It's the delivery mechanism.
STELTER: Right, right. And some people are not willing to pay. Many people are not willing to pay, at least in print, but even online, that has been
the struggle for the real-life Conde Nast, and the real-life hearse. They have not been able to recreate that what was an incredibly lucrative
business model in print.
And you see some of that in the sequel as well. There is some commentary about vanity media owners, perhaps, some similarities to Elon Musk and Jeff
Bezos in some of the new characters that are introduced. So, I appreciate what the film wants to say about this environment and how it is changing.
You might say evolving. You might say devolving.
But look, Richard, there is a lot of interest. This film's on to make $100 million in the first weekend. A lot of that, of course, thanks to Meryl
Streep and an all-star cast, but a lot of curiosity about the sequel.
QUEST: Right.
STELTER: And sometimes, sequels don't go so well. But so far, it's getting well, well-reviewed.
QUEST: To quote the first, Brian Stelter, that's all.
Coming up, summer is just around the corner. While you might be cutting weight, Puregym is putting on profits.
In just a moment, their 2025 earnings came out this week. Revenue went up by 23 percent, driven by membership growth and international expansion. So,
I asked Puregym's CEO, where he is looking to go next. And, of course, we had to do it at the gym.
(BEGIN VIDEOTAPE)
QUEST: Team me up, Scotty (PH).
CLIVE CHESSER, CHIEF EXECUTIVE OFFICER, PUREGYM: Rowing and talking is --
(CROSSTALK)
QUEST: It's not easy. And you are doing most of talking --
50 classes of -- we lose it over here.
I'll declare the conflict of interest there, if you work out in this very gym. So, I'm familiar with it.
CHESSER: Delighted to hear it.
QUEST: You spend a lot of money on this gym.
CHESSER: We spend a lot of money on all our gyms.
QUEST: And you reconfigured this with a particular purpose. Explain.
CHESSER: The big macro trend is towards strength training, towards functional training, and some of that coming away from cardio into this
area. So, we make sure that we create the right amount of space in all of our gyms. Give our members what they are looking for.
Are we walking or running?
[16:50:01]
QUEST: You have just --
(CROSSTALK)
CHESSER: Sped up again?
QUEST: One --
CHESSER: Let's walk. Let's walk.
QUEST: Let's have a fast walk.
CHESSER: OK. OK.
QUEST: International expansion.
CHESSER: Yes.
QUEST: Where are your -- where is your focus?
CHESSER: So, the core part of our -- the biggest part of our business is here in the U.K. We have got 460 gyms in the U.K. We open one a week last
year. We'll open one a week this year. So, we got, still very big growth potential across the U.K. We acquired businesses in Denmark and Switzerland
around six, seven years ago. Good growth in Switzerland, in particular.
QUEST: Is the U.S. the biggie.
CHESSER: U.S. is the biggest fitness market in the world by some margin. So, I think, it is -- it is the, oh, well, hang on a minute. OK.
QUEST: Just to know.
CHESSER: OK. As we start talking about the U.S., I get faster.
QUEST: Yes, they do.
CHESSER: And yes, it's the biggest market in the world. We acquired a business called Blink Fitness in New York. This is -- this is verging on
the running territory here --
(CROSSTALK)
QUEST: Yes, let's go down.
CHESSER: Yes, yes. And we bought -- we've got about 60 clubs currently in the -- in the U.S. Fitness penetration in the U.S. is very strong. There is
a huge amount of white space, and we think the products and the quality, and the -- and the -- and the value that we are bringing to the market out
there, we are really confident that, that can prove to be a winning proposition.
QUEST: On to the next machine.
CHESSER: OK.
QUEST: I'm exhausted.
CHESSER: I noticed you slowed down there. Yes.
QUEST: Many British companies, M&S, Midland Bank, years ago, you and I are old enough to remember some of the great failures of our time. Why are you
going to succeed there when others have failed?
CHESSER: Fundamentally, because the quality of the proposition that we are bringing to the market, we are -- we are very confident that, that will
prove to be popular in what is a very competitive market, and you know, we absolutely have huge respect for our competitors that we are up against in
every market.
And we are new to New York. So, extra humility, and --
(CROSSTALK)
QUEST: That's important.
CHESSER: Yes.
QUEST: And I like that.
CHESSER: I think it is. And the reason that I'm confident we're going to succeed is we've had an opportunity to learn from the business that we had
for a few years down in Washington, D.C., only three clubs. We've taken our time. We bought the business about a year and a half ago now, and we've
taken our time to talk to the members, to listen, to go and test some things, and --
(CROSSTALK)
QUEST: I'm exhausted.
CHESSER: Right onto the next.
QUEST: These are the famous pod doors.
So, the door opens, and you go.
CHESSER: These are the Puregym doors, and they are designed for one sole purpose, which is about safety. So, the reason we have these doors is we
operate most of our gyms 24/7. And in New York, where we've opened recently, we operate 24/7, and this is the system that enables us to do
that in a safe way, to keep our members safe. So, that we know exactly who is in the gym at any time. Our members, importantly, know that we know who
is in the gym at any time, and it's a safe environment.
QUEST: You understand the consumer mentality.
CHESSER: Yes.
QUEST: Hospitality, consumer, whatever. Why did you decide you wanted to do pure?
CHESSER: I mean, for some people, it feels like a bit of an odd move. I think, you know, pubs and beer to fitness. But it doesn't feel odd to me,
because I love pubs and beer and I love fitness.
And I was very keen to go and work in a brand that I'd be really proud of, international brand and a growth brand. Of course, in a growth sector, we
do something that is phenomenally good. I'm very proud of that and excited about the role we play.
QUEST: Can you see any similarities between the two industries?
CHESSER: Yes.
QUEST: I don't mean, you know, hospitality, pubs, and this.
CHESSER: Yes, there are big similarities. I surprisingly, perhaps, I think, there is -- there is more overlap than differences. Yes, these are
community businesses, pubs are the archetypal community businesses. Gyms are increasingly community businesses. You look around here, you know, you
seen people who have come here with their mates, they are working out together, they are spotting for each other. There is run clubs that are run
by Puregyms. These are, these are fundamentally community businesses. And importantly, the people that run them are so passionate and care about what
they do.
(END VIDEOTAPE)
QUEST: Puregym. Now, about those pod doors. Here in New York, there was some controversy about them, when someone got stuck and the New York Fire
Department got excited about them. This is what the chief said about that.
(BEGIN VIDEO CLIP)
[16:55:01]
CHESSER: There was a video that went a bit viral of a lady who was in a door and got -- and got stuck for a short period of time. Now, there is a
button in these doors that enables you to open the doors manually, so nobody, in fact, can be stuck in the door without being able to open the
door. They are entirely safe. We had some conversations with the New York Fire Department about our emergency egress doors, and we have now fitted
those out to be compliant with New York systems.
(CROSSTALK)
QUEST: Right.
CHESSER: Which has -- because this is a door that in an emergency, you don't go through these doors, really importantly. In an emergency, we have
fire exit doors around the gym, and we have an emergency exit door here.
(END VIDEO CLIP)
QUEST: There you have. The doors, the pod -- the famous pod doors of Puregym. By the way, but where else is Puregym in the Middle East,
(INAUDIBLE) by a few other places, London, and, of course, now globally across the U.K. and in parts of -- I think it's Switzerland.
Wall Street. I'm going to show you very quickly where we ended the day on the triple stack, because we did have some gains there. We do have some
records to show you. There you are.
Strong performance, particularly on the NASDAQ. Records galore, NASDAQ and the S&P 500 at a record high.
We will take a "PROFITABLE MOMENT" after the break.
QUEST MEANS BUSINESS. It's Friday.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT", from the first moment I saw the original "Devil Wears Prada", I love the movie. Why? Because it spoke to
millennial, it spoke to the drive, the ambition, the can do spirit, people coming to New York to make it here in an industry, as Miranda Priestly
famously says, "don't be ridiculous. Everybody wants this. Everybody wants to be us." That quote to jobs that pay the rent. The way people will come
to New York, and you can arguably say London or Paris.
They will live in the most awful circumstances. They will spend a fortune to be there, because this is where the action is, or at least that's where
the perception is.
And Devil Wears Prada spoke to that. And it did so at a time of the beginning of the change of social media, the revolution that was to follow.
And that's why I'm very curious to see what "The Devil Wears Prada 2" is like.
And here is a little secret for you. When I see my younger, newer colleagues, who join us on QUEST MEANS BUSINESS or elsewhere here in New
York, or London, or wherever.
[17:00:05]
I see exactly that same spirit. They are here to make it because they bring to work in an industry that's one of the most exciting in the world. And
that's what drives them.
END
