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Stocks Rally As Key Inflation Gauge Shows Price Hikes Slowed; Home Depot Issues Warning As Customers Pull Back On Spending; 156-Plus Square Miles Charred Since Flames Erupted in Athens, Greece, Sunday; Tropical Storm Ernesto Slams Caribbean, Races Toward Puerto Rico; USA Gymnastics: Appeal Over Jordan Chiles' Bronze Medal Denied. Aired 2:30-3p ET

Aired August 13, 2024 - 14:30   ET

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

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[14:33:24]

BORIS SANCHEZ, CNN HOST: We are closely watching markets right now. The Dow, S&P and NASDAQ all up. Investors reacting to new data out today indicating wholesale inflation slowed last month.

CNN's Matt Egan joins us now live from New York.

Matt, where do things stand?

MATT EGAN, CNN REPORTER: Well, Boris, I think things stand in a much better place than the market would have had you believe just a week ago. Remember, investors were freaking out about cracks in the jobs market. All these fears that maybe the Fed is waiting too long to cut interest rates.

Totally different story this week. We see the Dow up more than 300 points, around 1 percent. Even sharper gains for the NASDAQ of around 2 percent.

And the latest inflation readings are a big part of the story. And we're talking about the Producer Price Index. This is measuring wholesale inflation. It's pricing pressure before it gets to all of us as consumers.

And it was better-than-expected. Prices we're up by 0.1 percent between June and July, 2.2 percent year over year. Both of those are improvements. If you look at the trend, you can see that this metric has gotten much better in recent months.

At 1.2 years ago, it was almost at 12 percent. We are miles away from that. And this is really exactly what the Fed wants to see. Prices, of course, they're not going down, but they're going up at a more gradual pace.

And this is another piece of evidence that could help make the case for the Fed to start cutting interest rates at the next meeting in September, which by the way, is the last let's meaning before the election. [14:35:03]

Of course, Boris, we're getting another potentially key piece of evidence tomorrow in the Consumer Price Index. So we'll have to wait and see what that says as well.

SANCHEZ: Now there are some red flags out there. One of them specifically coming from Home Depot. It's the largest home improvement retailer in the nation. And they have some warnings about the economy. What are they saying?

EGAN: Of course, they're saying they're seeing weakness. This company cutting its outlook, warning that sales will drop more than expected.

And what's really key here is why they see this weakness. The Home -- Home Depot CEO said that, quote, "Higher interest rates and greater macroeconomic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects."

Specifically, they're saying that Americans are cutting back on a number of categories, including kitchen, bath, lighting, and flooring.

And they say it's really for two reasons. It's concerns about rising unemployment. And that people are delaying certain projects where they'd have to borrow money because they're expecting the Fed will start to cut interest rates soon.

So, Boris, it's just another reminder of some of the pressures that consumers are facing from prices and from borrowing costs, and how all of this is interconnected.

SANCHEZ: Very interconnected.

Matt Egan, from New York, thank you so much.

New evacuations were ordered today near Athens, Greece, as crews are trying to contain wildfires just on the outskirts of the capital. Global warming making these blazes even fiercer. We'll explain.

Meantime, Tropical Storm Ernesto slamming the northern Caribbean with heavy rain and winds. And it could soon hit Puerto Rico as well. The latest on its path when we come back.

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[14:41:22]

JESSICA DEAN, CNN HOST: Happening now, crews are making more progress against a deadly wildfire near Athens, Greece. Officials say the situation is improving, but firefighters are still working to put a number -- put out a number of hotspots.

The threat has forced thousands of people to evacuate since Sunday. And now some of them are returning to see what's left at their homes.

CNN's Eleni Giokos is in Greece near Athens. Eleni, how are residents describing this damage to you?

ELENI GIOKOS, CNN ANCHOR & CORRESPONDENT: Yes. I mean, it's been one of the most difficult days, frankly, for so many of the people that we met with today. They were relaying pain and trauma and just sheer shock in terms of what transpired over the last couple of days.

And this is because of multiple things. Firstly, a fire that started very far away from where we are right now, around 40 kilometers away. It spread very quickly and was completely unpredictable, destroying everything in its path.

In fact, it was just incredibly -- incredible to see some of the buildings that had engulfed, specifically the businesses and the homes that we came across.

Some of the residents were describing a furnace that was playing out in over 24 hours. We just got off the phone with the fire department. They say that things have calmed down.

You can tell that the wind has really subsided. That's after gale- force winds really assisted the fire to move rapidly across the city.

It's been hard to breathe today. I have to say it feels like I'm in some kind of fireplace. It is just filled with soot. And I think the air quality has been dramatically impacted as well.

Experts say that because so much forest area, 100,000 hectares have been burned just in this fire season, in this area in southeast Athens. And that is going to have a long-term effect.

We're going to see prolonged heat waves in the city of Athens and it's changing its climates, where it's not only a global climate change issue, but also that the city of Athens and Greece as well. As more forest burns, that's going to have an adverse effect.

DEAN: Yes, for sure.

And walk us through how fire crews have been able to keep the flames from getting closer to Athens itself.

GIOKOS: Yes. Such a good question. I mean, we're around 18 miles from the center of Athens. And I mean, it's pretty shocking to think that the fires encroached to the basic point where we're seeing commercial activity, there's major concern.

But we must also not underestimate that the suburbs, again, were major hubs. It came so close so that I think everyone was very worried about what that would mean down the line.

They had helicopters and planes to try and douse out the fires. We also spoke to so many firefighters on the ground. Assistance came from the European Union as well. It was herculean efforts.

I have to say, Jessica, in terms of what the people we saw today and the efforts on the ground. DEAN: No doubt about it. Our hearts are with so many of those who are both fighting the fires and those who've lost already so much.

Eleni, thank you so much for that reporting.

Boris?

SANCHEZ: Happening right now, a powerful tropical storm is battering the northern Caribbean with heavy rainfall and damaging wind. It is expected to hit Puerto Rico as the island braces for what could be a hurricane by tomorrow morning.

CNN Meteorologist Chad Myers is tracking Ernesto's path.

Chad, where's the storm right now and where is it headed?

CHAD MYERS, AMS METEOROLOGIST: It has just left the Leeward Islands. It's moved now into the Caribbean itself. And it's headed toward either the U.S. V.I. or the British Virgin Islands there, just to the east of Puerto Rico.

[14:45:01]

But even if Puerto Rico only sees 50-miles-per-hour winds, we know what those winds can do to the power lines anyway.

The storm is not very organized. There are hurricane hunters that are flying through it right now.

And in some of these brighter colors, they're seeing winds around 60- miles-per-hour. It is not rapidly intensifying yet. That could certainly happen after sunset. That's kind of how things go here.

Tropical storm warnings are in effect for Puerto Rico and even hurricane watches are in effect for the islands from about (INAUDIBLE) all the way over toward St. Kitts. And that's what the area that we're seeing.

It is not rapidly intensifying yet because it is not breathing like an eye. You cannot find an eye on this map. You see storms rotating around a common center.

But after the sunsets, in this warm water, like this, when the shear backs off, that's when you can see those storms get a lot stronger. And that's why the potential for the hurricane, a category one, moving to the north of Puerto Rico, brushing the eastern half.

Now, polls say you're not going to see a lot. But if you're over there in the BVI, you are going to see quite a bit.

Then where does it go? Here's our problem, Boris. It goes very close to Bermuda. In fact, right over the top of Bermuda. With wind temperatures here, we're going to see these things kind of go quickly.

And all of a sudden, by Saturday, Bermuda, you need to be ready. Now is the time to be ready. And I know you know how to do it. This is not going to affect the east coast of the U.S. that we don't

think. No models are bringing it close to the U.S.

But if you're on the beach this weekend, there will be large waves. There will be rip currents. There will be still be problems, even though we are hundreds of miles away with the center of the storm still from the east coast.

Those waves could be 68 feet. And certainly, even this track here, all the models, well out to the ocean, still could see something here.

You take your life in your hands. If you're getting in those waves, those waters, and the red flags are out, please don't do it.

SANCHEZ: Yes, very important to keep an eye on rip tides.

Chad Myers, in the Weather Center, thank you so much.

Jess?

DEAN: Let's look at some of the other headlines we're watching this hour.

The slowdown in consumer spending may have sped up yet another change at the top of Starbucks. The struggling coffee chain is replacing CEO Laxman Narasimhan after just one year on the job.

Starbucks has been struggling with falling sales in the U.S. and abroad. The stock down 17 percent for the year. The CEO of Chipotle restaurants will be taking over at Starbucks.

The Boston Red Sox have suspended outfielder, Jarren Duran, for directing a homophobic slur at a fan. He will sit out two games and have his salary for those games donated to an LGBTQ organization.

He was heard during Sunday's broadcast using the slur while telling a heckler behind home plate to shut up.

Now watch this frightening encounter off the coast of California.

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UNIDENTIFIED MALE: There he is. You alright?

UNIDENTIFIED FEMALE: Yes.

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DEAN: That's some -- that's some "Jaws" energy there. A shark surprising a couple of kayakers while they we're out fishing in Half Moon Bay. One of them noticed the shark was following them for a couple of minutes before it circled away.

As for what it was like, one of them told a local news outlet, quote, "It felt special, more than anything else, to spend time near an apex predator that behaved so placidly." I think they're braver than me.

The Olympics are over, but the fight over Jordan Chiles' bronze medal may just be beginning. Ahead, next after an arbitration panel says it will not reconsider its decision after asking her to return that medal.

Stay with CNN NEWS CENTRAL. We're back in just a minute.

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[14:52:59]

SANCHEZ: In the battle over the bronze, the situation is getting more complicated by the day. USA Gymnastics says it's appeal for Olympic gymnast, Jordan Chiles, to keep her bronze medal was denied.

The governing court says that its rules do not allow for an award to be reconsidered even when they are presented with new evidence.

CNN's Don Riddell joins us now live for the latest.

Don, bring us up to speed.

DON RIDDELL, CNN SPORTS ANCHOR & CORRESPONDENT: Hey, Boris. Say, if any of our viewers are familiar with the works of the novelist, Franz Kafka, they might have an understanding of this story.

Because the U.S. team and Jordan Chiles are finding themselves in an increasingly bizarre and surreal situation.

Let's just look at what's happened over the last 24 hours. Our contributor, Christine Brennan, has been reporting that when this hearing, this Romanian appeal was scheduled for Friday, the Court of Arbitration for Sport, which is supposed to notify both sides, notified the wrong American personnel.

Obviously, the Americans lost their appeal or they rather lost their bronze medal. And so it went to the Romanian team.

Second of all, the U.S. has then discovered video evidence that proves that the appeal they lodged right after the competition ended last Monday was actually done within the 60-second time limit. And they now have video evidence to prove it.

But they've been told that no new appeal will be heard, regardless of new evidence that's presented, and even conclusive new evidence that's being presented. So USA Gymnastics has basically been told that they're out of luck.

And within the last few hours, another fascinating wrinkle. It's being reported that one of the three-member panel of the Court of Arbitration for Sport that made this big decision of the weekend has been representing Romanian interests for the last decade.

So I mean, this one just gets weirder and weirder and more complicated. For the U.S. team and for Jordan Chiles, it really is a nightmare. And the way this whole thing has been handled is an absolute fiasco.

[14:55:00]

And let's just quickly show you what the U.S. Olympic and Paralympic Committee have said about this because they are going to try and keep fighting.

They have said, "We are deeply disappointed by the notification and will continue to pursue every possible avenue and appeal process, including to the Swiss Federal Tribunal."

SANCHEZ: Don, if you had Franz Kafka on your bingo card for names that would appear on CNN NEWS CENTRAL today, somewhere somebody is celebrating.

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SANCHEZ: Don Riddell, thank you so much.

RIDDELL: All right.

SANCHEZ: Still ahead, Governor Tim Walz is set to headline his first solo campaign event any moment now as he seeks to rally union support and draw a contrast with former President Trump on labor issues.

A live report when CNN NEWS CENTRAL returns.

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