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Quest Means Business
Positive U.S. News Boosts Investor Confidence; U.S. Treasury Soon Able to Resume Borrowing; Fresh Attacks in Kyiv and Just Inside Russia; Mexican Police Find 45 Bags with Body Parts; China Turns Down U.S. In- Person Talks Request. Aired 3-4p ET
Aired June 02, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:25]
ZAIN ASHER, CNN INTERNATIONAL HOST: All right, Wall Street is ending the week on our high. Let's take a look and see how the Dow is doing. In the
green all day. It is soaring over 700 points on tracks for its best day since November last year.
Those are the markets, and these are the main events.
It is full steam ahead for the U.S. labor market as May job numbers blows past expectations.
Crisis averted: President Joe Biden prepare to sign into law a deal to raise the U.S. debt ceiling.
And never mind the Metaverse, Meta tells his staff to come back to the office.
Live from New York, it is Friday, June 2nd. I'm Zain Asher, in for my colleague, Richard Quest, and this is QUEST MEANS BUSINESS.
All right, good evening.
Tonight, they say good numbers comes in threes. Well, U.S. markets have got a greenlit debt deal, strong jobs numbers, and also signs that the Fed may
soon hit the pause button on rising interest rates and that's music to the ears of a lot of investors as you could see here.
Look at the Dow go. Up more than 700 points, only an hour left until the trading day or trading week rather ends. It jumped on the bow and it pretty
much gained momentum throughout the day.
The broader S&P 500 has added more than one-and-a-half percent. The NASDAQ is more than 140 points higher. Global markets rejoiced as well. The Hang
Seng closed four percent higher, the Nikkei put on 1.2 percent, London's FTSE and Germany's DAX also posted healthy gains as well.
U.S. jobs growth last month was much stronger than forecast, 339,000 new jobs were added in May. Economists had been expecting about 195,000. High
employment can lead to inflation.
So a good jobs number, it can be bad news when the Fed is trying to slow the economy down, but there are some mixed signals here. The unemployment
actually ticked up to 3.7 percent, and wage growth slowed.
investors now put the chances of a rate rise this month at 33 percent.
Matt Egan joins us live now from New York.
So Matt, it really was kind of a mixed jobs report because you seemingly had these two divergent results. Obviously, you've got the stellar number
in terms of just how many jobs were added, 339,000, but the unemployment rate actually ticked up to 3.7 percent. Just help make sense of it for us.
MATT EGAN, CNN REPORTER: I'll try, Zain.
Investors are seeing this as a Goldilocks report because as you mentioned, hiring was really strong, but wages cooled and the unemployment rate ticked
higher.
So the thinking from investors is that yes, this is going to allow the Federal Reserve to keep interest rates steady here. The commerce that I
talked to, they are putting a lot more weight on the payroll growth number, that survey tends to be more reliable.
The household survey, the one that showed this significant increase in the unemployment rate, that one tends to be noisier, and it is also worth
noting that the unemployment rate is still very low. But you throw the jobs market, the jobs report together with the debt ceiling news, and that has
been this one-two punch that has been more than enough to send the stock market soaring.
And the Dow is actually on track for its best day in almost seven months. And on the jobs number, I do think we should try to add a little bit of
context around this, the 339,000 jobs added. You know, that is so much better than expected. It's better than any single month in 2019, the last
full year before the pandemic and that was a really strong time for the economy.
And this is also just so much better than those really dark predictions that we were hearing about. I mean, last fall, Bank of America was
predicting the economy would lose 175,000 jobs a month in the first quarter. We haven't seen anything like that.
I talked to Justin Wolfers, the economist from University of Michigan and he told me that the economy the jobs market is "really freaking good." He
said: "We've never had a recession when the labor market was running this hot. In fact, it would be absurd to use the R-word at a time when we're
creating jobs at this rate."
So, Zain for now the economy just continues to defy gravity and the odds of a soft landing seem to have increased. If anything, the worry is that there
is no landing for the economy, it's just going to keep growing.
[15:05:08]
ASHER: Yes, it just sort of feels that this recession that everyone was talking about six months a year ago, just -- where is it? It seems to have
been postponed.
So some other news that we're getting today is that Fitch has decided to keep the AAA rating that U.S. debt has. They've decided to keep it on
negative watch, even though that is a debt deal. Why is that?
EGAN: That's because I think they're getting tired of all of the debt ceiling drama that we have in the United States every few years. Fitch says
that, yes, the fact that they were able to reach a deal that narrowly will eat into deficits, they think that's a positive.
But they are concerned about these negatives around governance in the United States. They said that there has been a "steady deterioration" in
governance over the last 15 years. They pointed to these repeated brinksmanship episodes around the debt ceiling, but they also just pointed
to the general polarization in the United States, even the 2020 election and efforts to overturn that.
So there is this broader concern that although the U.S. economy is the biggest in the world, although the dollar is the world's safe haven, there
are these governance and polarization issues that raise questions about whether the United States still deserves that AAA credit rating.
So Zain, it is still possible that we have a situation like we did in 2011 where a debt ceiling debacle was avoided, and yet the credit rating gets
downgraded anyway.
ASHER: Yes, and we saw what happened in 2011 just in terms of the market reaction to that. Let's hope that doesn't happen.
Matt Egan live for us there. Thank you so much.
All right, the cogs of the U.S. Treasury will soon start turning again, after being jammed up for nearly five months. The government technically
hit the debt ceiling in January, and the Treasury has used a series of measures and maneuvers to continue paying the bills.
The deal to raise the debt limit passed Congress before Monday's default deadline, and once President Joe Biden signs the bill into law, the
Treasury can start borrowing money again.
Phil Mattingly is in Washington, DC for us.
So Phil, just walk us through -- I mean, it is really difficult in these sorts of situations for both sides to claim, you know, the deal as a win,
but just walk us through what's in the deal and if Republicans because they did manage to sort of save over a trillion dollars, can they say that this
is a win for them?
PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: It depends on the Republican, Zain, as you know well, and I think Speaker Kevin McCarthy has
been grappling with since the agreement was struck, since it was turned into legislative text and since it got through Congress.
Look, it's an interesting thing to think through, and I think Washington in particular loves kind of the winners-losers, where does this actually land
debate? Look, the baseline, and while this isn't necessarily a high bar for success, not having the first self-imposed default in the history of the
United States, that is still a really important thing to have off the table, given where these negotiations were or really weren't just a few
weeks ago. Certainly, over the course of the last several months.
Taking that threat off the table, particularly when you kind of thread it together with what you and Matt were just talking about in terms of another
robust beating expectations jobs report, the economy staying at a level that no analyst was predicting last year, seemingly last month, to some
degree, that this is a very clear moment and opportunity to turn the page.
I think it's going to be something you hear the president talk about tonight in his Oval Office remarks, but when it comes to the deal itself,
you talk to White House officials, they made clear that while they didn't want to tout it and maybe spike the football a little bit here, because
they were very aware that Speaker McCarthy needed to keep his Republicans in line or at least enough in line to get this over the finish line.
They feel like given the fact it was divided government, they were able to land it in a place that was as good as they could have landed it, given the
fact that was divided government.
Now you look at the budget caps. You mentioned the caps over the course of two years, it is a significant cut, particularly when adjusted for
inflation, that Speaker McCarthy has made a point of talking about regularly and he is merited in doing so, not deep enough for many of those
conservatives in his conference, but it is significant.
He also got an expansion of work requirements, broadening out work requirements on food stamps over a time period. That was something
tangible. Republicans have talked about it a lot.
When you dig into the details, the reason why the White House feels okay about it, despite the fact progressives have been really angry, they were
able to add several exemptions into that proposal, into that language, which according to CBO actually nets out at a gain of people that would
have access to the benefits.
So you get into the weeds of these negotiations of these deals, which nerds like me love to do and it is fascinating to see how the messaging tracks
with the reality of things.
I think the best way to frame this right now is no default is good for everyone, and in terms of the deal itself, probably the biggest takeaway or
the biggest win is the fact that they can move on to other things.
[15:10:04]
The polarization is certainly going to continue. I think the partisan fights are only going to increase given the fact we're heading into a
presidential election year, but getting this off the table, suspending the debt limit until 2025, that is a huge thing both for the country, and I
think, frankly, both political parties.
ASHER: And President Biden is going to be discussing the deal tonight. He is going to be addressing the nation. We'll see what he has to say.
Phil Mattingly live for us there. Thank you so much.
All right, most economists think the debt deal won't have a major impact on the U.S. economy. It pares back government spending ever so slightly over
the next two years. That may lower GDP growth by a small amount and cause some job losses.
The deal claws back some COVID-19 funds. It maintains climate measures and it ends a pause in student loan repayments, which my next guest says will
hit consumer spending.
Mark Zandi, chief economist at Moody's Analytics joins us live now from Philadelphia.
Mark, thank you so much for being with us. If you can just explain to us that aspect of it, this idea that student loan payments have now been
reinstated, and what effect, what tangible effect that will have on consumer spending.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yes, it'll be a bit of a headwind, Zain.
If you do a little bit of arithmetic, roughly 20 million student loan borrowers will start to pay again on their debt, about $250.00 to $300.00
more a month for these folks and if you add it all up, it's about $5 billion a month. And you know, that will shave a couple of three-tenths of
percent off of consumer spending GDP growth over the course of the coming year.
So, you know, it's not one of these things that's going to cause consumer spending to come to a standstill. Consumers have a lot going for them. We
saw today's job numbers. They were fantastic.
But it is a bit of a headwind, and it is coming at a time when the economy will be struggling later this year and into next. So recession risks are
still quite high, and this headwind will, you know, if I were king, I wouldn't do it right now, but I guess there's no really any good time to do
it.
ASHER: Okay, speaking of jobs numbers. You mentioned, obviously, the headline number is pretty impressive. The unemployment rate did tick up
slightly to 3.7 percent. Just walk us through what the Fed does with this. How does the Fed read this report?
ZANDI: Yes, that's a great question. My sense is, it won't change any minds on the Fed. I mean, there is something in there for everybody. I mean, the
top line 339,000 job gain, well, that is just a pretty strong labor market, probably too strong for most.
But at the same time, as you pointed out, the unemployment rate rose. If you dig even deeper into the bowels, there are some reasons to think that
the economy is slowing, number of hours work per week declined. We saw wage growth moderate.
So all in all, I think the Fed, it is kind of awash, I think, and when it's all said and done, my sense is they will pause the rate hikes at this next
meeting in a couple of weeks. That's what I think they will do, but I certainly think that's what they should do.
ASHER: Okay. And just in terms of Fitch, I mean, this news from Fitch that they are going to keep the U.S. AAA rating on negative watch, despite the
fact that there has been a deal, a debt deal reached.
Are you surprised by that? What are your thoughts on that?
ZANDI: Well, I would have been surprised if they downgrade, yes, I mean, because at the end of the day, lawmakers got it together and pass it --
ASHER: A downgrade technically is still possible.
ZANDI: It is, yes, sure.
ASHER: A downgrade technically is still possible.
ZANDI: Yes, I mean, they are on negative watch, right? So I mean, that means that there is a reasonable probability that they will get downgraded,
but I suspect not, because it came to a reasonable conclusion, and the debt limit deal is, you know, in the grand scheme of things, pretty good. I
mean, the broader economic impacts are pretty small.
And when you think about it, the center held, right? I mean, the Republicans kind of in the center, and Democrats kind of in the center
coming together getting enough votes to get it across the finish line, so that was a compromise, and you've got people on either end of the political
spectrum complaining about it, that's a compromise.
So I think there is a lot to take some solace in this. So I don't think they'll downgrade, but having said that, you know, we've got a lot more
script to be written here over the years. The next go around is in early 2025. So, you know, it could downgrade at that point if we don't get it
together.
ASHER: The Senate held, but obviously, the gridlock in Washington is still a problem here and that's the point they are getting at.
So you touched on the fact that -- earlier, you touched on the fact that recession at this point is still likely. Has your calculation in terms of
when we might see a recession change at all, based on the sorts of jobs numbers we're seeing? And how soft of a landing it is going to be?
ZANDI: No, I don't think there is going to be recession. I mean, I think we have a fighting -- recession risks are high, no doubt about it. I mean,
when inflation is high and the reserve is in the warpath, recession risks, and you've got a lot of folks, smart folks out there thinking recession.
My sense is we have a fighting chance to get through this without an economic downturn.
[15:15:08]
ASHER: I misheard you. I apologize, Mark. I misheard you.
ZANDI: Yes, right. No worries.
ASHER: Okay, so don't think there is going to be a recession then.
ZANDI: No.
ASHER: Okay, right.
ZANDI: No, no. And that feels a lot clearer today about that because of these numbers. I mean --
ASHER: Yes, of course.
ZANDI: I mean, it is hard to see, right? Yes.
ASHER: I was just saying to Matt Egan, the reporter before you that the recession is -- well, it feels as though the recession just keeps getting
postponed, and we're nowhere near the sort of gloomy forecasts we were getting this time last year or even around Christmas in terms of what was
going to happen this year. So I guess, the calculation has changed.
Mark Zandi, we have to leave it there. Thank you so much.
ZANDI: Sure. Thank you.
ASHER: All right, and I want to update you on some breaking news out of India. Rescue teams are rushing to the scene of a horrific chain crash. An
official says, at least 50 people are dead. It is still too early to confirm specific numbers.
Authorities say that two passenger trains and a goods train collided in Odisha State. We'll bring you more details as we get them, but once again,
there has been a horrific train crash out of India and 50 people are dead.
The gates of war have opened in Russia, so says a senior Ukrainian adviser as more shelling is reported in the Belgorod region.
Mykola Podolansk (ph) says that Russians are opposed to the Kremlin are behind those attacks. Ukraine has consistently denied involvement. On the
other side, Moscow launched a new wave of air attacks on Kyiv. Ukraine says its defenses shot down 36 drones and missiles overnight. Two people were
hurt by the debris.
Sam Kiley is in Kharkiv for us. So just in terms of what's happening in the Belgorod region in Russia, just walk us through how concerned the Kremlin
is about what's happening there -- Sam.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Zain, I don't -- I can barely hear you over the sound of the sirens here in Kharkiv, but I
think that to some degree might answer your question without being facetious, because this is only about 25 miles from the northern border
between Ukraine and Russia.
Just across that border, Ukraine has been sponsoring attacks by Russian dissident fighters, part of the Ukrainian security forces. They have been
accused of bombarding Russian villages, accused of killing two people.
The local governor there said two and a half thousand civilians have had to been evacuated from that location. There is consternation in the Kremlin
criticism of the Russian military coming from Prigozhin, the leader of the Wagner mercenary group, and so here, the anticipation is that there will be
a hit back from the Russians here, perhaps on to Kharkiv.
But the level of consternation has gone all the way to the Kremlin. Take a listen to what Vladimir Putin said.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Today, we will deal with the same issues in relation to ensuring the security of Russia. In
this case, domestic political security, taking into account the efforts that our ill-wishers are still making and intensifying in order to stir up
the situation inside Russia.
(END VIDEO CLIP)
KILEY: Now, he is worried about the destabilizing effect that has already been experienced by Russia by these cross border raids and also by the
drone attacks that have today hit the town of Smolensk or at least an oil refinery there in Krasnodar in the south of Russia just a few days ago,
also an oil refinery area hit there. There are burning buildings in the south.
Criticism of local authorities and the military coming from ordinary people on the ground, and Vladimir Putin has clearly been deeply rattled by this
new phase in Ukraine's war -- Zain.
ASHER: And Sam, as I was asking you a question, of course, we had those air raid sirens happening at the same time. And of course, you couldn't quite
hear my question, but just explain to us what's happening on the ground where you are. It sounds as though the air raid sirens have stopped for
now, but just set the scene for us there.
KILEY: Well, this is Kharkiv. It was along with Kyiv. It is the second largest city in the country, and along with Kyiv, it was very heavily
bombarded indeed from Russian territory, indeed, from the outskirts of Belgorod.
Our own Fred Pleitgen who was there on the ground watching missiles take off and I was here on the ground a year and a bit ago, when they were
coming in. You could literally see them take off and land pretty much live on CNN.
There is a concern now in Kharkiv that there may well be more incoming attacks coming from Belgorod. There were two S300s which were very large
missiles that were fired and landed a bit out of out of town to the east.
[15:20:12]
It harmlessly, without causing any significant casualties, but there is always a threat against Kharkiv. As indeed there has been a constant threat
against Kyiv, the real issue is whether or not given the destabilization in Belgorod province, the Russians can actually get it together to launch a
counterattack and whether or not really that is in their best interest, or perhaps they would want to focus their military energies elsewhere in this
war, and that really is the questions that the Ukrainians are forcing the Russians to ask.
ASHER: All right, Sam Kiley, live for us there. Thank you so much. We'll have much more news after this short break.
(COMMERCIAL BREAK)
ASHER: Meta might be envisioning a remote world of the future, but for now, they are telling employees come back in-person.
Meta is asking workers to be in the office three days a week starting in September, that is unless they've been designated as fully remote. It
follows a greater return to work trend across the United States.
Amazon has required three days in person since May, and Disney earlier this year made it four.
Clare Duffy joining us live now from New York.
So Clare, what's been the reaction among Meta employees. They have until September 5th, I understand.
CLARE DUFFY, CNN BUSINESS WRITER: Right. So they have until the end of the summer, which is something -- but I mean, for many tech employees, this
push to return to the office has not come as sort of a welcome announcement.
Earlier this week, we saw Amazon employees protesting its own return to office policy, and then it sounds like it may be a bit more flexible when
it comes to return to the office as a spokesperson told us that the company is committed to distributed work, but that they want to foster the
collaboration, relationships and culture necessary for employees to do their best work.
And Zuckerberg had also signaled that this might be coming in March. He talked about employees doing their best work, working more effectively when
they're in the office. And look, Meta has been trying to sort of appease shareholders after a really difficult year of the last year, and we know
that Wall Street is in many cases a fan of in-person work, and so this may be one way of him trying to do that.
ASHER: And just in terms of another announcement that we had from the tech world. Zuckerberg actually announced a new VR headset. We know that Apple
is going to announce their version on Monday.
Is this part of the new sort of focus for tech companies? Is this part of the new sort of arms race in terms of VR headsets? Just walk us through
what we're seeing in terms of the lay of the land there.
[15:25:13]
DUFFY: Yes, it is really interesting, because we've been hearing so much from tech companies about AI recently, it feels like VR is sort of a thing
that we haven't heard as much about recently. But then all of a sudden, with Apple poised to make this big announcement on Monday, we have Meta
sort of trying to preempt that news, announcing its Quest 3 headset just yesterday. And this puts these two big tech rivals again, in sort of
competition in this new area.
Apple's headset is expected to be about $3,000.00. So it's possible that these will be two sort of different customer bases for these two devices.
But this is an area where Meta has for years been talking about wanting to be a leader, and so it is interesting that we are now seeing Apple coming
in and trying to compete directly with it in this area that they clearly both think has a lot of potential growth.
ASHER: All right, Clare Duffy live for us there. Thank you so much.
All right, when we come back, the U.S. city of Phoenix, Arizona may have reached its limits in the desert southwest. Officials there say there is
not enough groundwater to support new construction. We'll have that story after the break.
(COMMERCIAL BREAK)
ASHER: Hello, I'm Zain Asher. There's more QUEST MEANS BUSINESS in a moment when a drug intended for weight loss may have a promising side effects for
those struggling with addiction, and the fastest growing metropolitan area in the U.S. is limiting new developments because of a lack of water. Before
that though, these are the headlines at this hour.
Rescue teams are on the scene of a horrific train crash in India climbing through the wreckage in a frantic search for survivors, and officials in
Odisha State says at least 50 people were killed when two passenger trains and a goods train that collided. Hundreds more were injured.
Police in Mexico have made a gruesome discovery. Dozens of bags filled with body parts. The remains appear to match seven people who worked at a call
center near Guadalajara. They were reported missing nearly two weeks ago An investigation is underway.
[15:30:30]
Police in the U.S. state of Texas say they believe this man is a serial killer. According to authorities, 62-year-old Raul Meza has confessed to
two murders. Now police say he's been investigated for possible involvement in up to 10 other killings.
The leader of a religious cult as appeared in a Kenyan courtroom to face grisly accusations over hundreds of bodies found in mass graves. He's
accused of encouraging followers to starve themselves to get to heaven. The court ordered him held for at least five more days. The preacher has called
the hearing a matter of intimidation.
The first live pictures from Mars were streamed on YouTube a couple of hours ago. The European Space Agency updated the images every 50 seconds or
so. It took the images more than 15 minutes to travel from a Mars orbiter to earth.
The Ukraine war is one topic of discussion at the Shangri-La Dialogue conference, the Asia Pacific region's most important annual security summit
began today in Singapore. U.S.-China tensions loom large. Last month, U.S. Defense Secretary Lloyd Austin asked to meet with his Chinese counterpart
at the conference. Beijing said no. CNN's Ivan Watson has the story.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: One of the biggest developments in the run up to this annual defense summit in Asia was the
fact that the Chinese government turned down a U.S. invitation for face-to- face talks here in Singapore between the U.S. Defense Secretary Lloyd Austin and his Chinese counterpart Lee Shangh Fu.
Well, moments before Australia's Prime Minister delivered an opening keynote address here Lloyd Austin was filmed walking over to Lee and the
two men shook hands smiling. This was all caught on camera by Wall Street Journal reporter Yaroslav Trofimov. And it underscores the fact that this
annual gathering provides the opportunity for the top military officers and defense chiefs around the world to rub shoulders and exchange views even
those who come from rival governments.
Now the Chinese government, it had accused Washington of being insincere when it talks of wanting dialogue with Beijing and it singled out what it
described as illegal unilateral sanctions. In 2018, the U.S. government put sanctions on Lee Shangh Fu. At that time, he was the director of the
equipment development department in the Chinese military. The Biden administration insists that those sanctions should not be an obstacle to
meetings with him now that he is a defense chief in China.
Of course, the rivalry between the U.S. and China that is one of the issues that is being discussed here, but also Russia's ongoing war in Ukraine
looms large. The Ukrainian defense minister is here with a delegation is expected to address delegates. A notable absence is any representative from
the Russian government. The organizers say they were not invited to attend.
Ivan Watson, CNN, Singapore.
ASHER: The fastest growing metropolitan area in the U.S. is limiting new developments due to a lack of water. Arizona officials say the Phoenix area
doesn't have enough groundwater to satisfy demand in the coming century. That decision won't shut down any construction that has already been
approved. However, to get a new project certified developers must now prove they can provide 100 years-worth of water from sources other than the
ground.
Not exactly easy to do. Stephanie Elam joins us live now from Los Angeles. I mean, this is -- this is major, especially because Phoenix is the fastest
growing metropolitan city in the United States. Just walk us through what is being decided here.
STEPHANIE ELAM, CNN CORRESPONDENT: Yes, Zain. It's not boding well for development in the southwest because this is not a problem that's limited
just to the Phoenix metropolitan area. But we have seen throughout the Southwest here in the United States that we just don't have enough water.
And you add into the fact that the Colorado River which supplies water to seven states, including Arizona has been dropping year after year to
unprecedent loads.
The surface water issue is a problem but also the groundwater and inside the Phoenix area, this is how they're dealing with it to make sure that any
new division developments will have to figure out where this is water is coming from.
[15:35:12]
They're saying, right now as things stand, four percent of current groundwater demands in the area just cannot be met. And that is why they
are making this change. In fact, take a listen to Arizona governor Katie Hobbs on this issue.
(BEGIN VIDEO CLIP)
GOV. KATIE HOBBS (D-AZ): That's why as required by law, we will pause approvals of new assured water supply determinations that rely on pumping
groundwater. Ensuring that we don't add to any future deficit.
(END VIDEO CLIP)
ELAM: And that assured water supply is really what is key here. And that is why -- well, they're saying any other housing developments that have
already gotten the green light, they can continue ahead. But any new developer who wants to come on and build out into the Arizona desert, they
are going to have to show that they have a way to have this water available, that is not relying on local groundwater and that they will be
able to supply these homes for 100 years.
That's how far out they're looking at this. And it's been easy to expand in Phoenix because there's so much desert there, right? You can just keep
building further and further out. And that is what they want there to be a plan for. Because as things stand right now, despite the fact that you may
have heard us talk about that, Zain, that we've had this really incredible rainy season, this past winter and here in California, there's still
blowing snow out of the mountains.
You still can't drive through the highways in California. That is just one year. And it doesn't actually solve the crisis. And this human induced
climate change problem that we have seen here is leading many municipalities to think about how they're going to supply water to their
civilians over the next few years and into the future. Zain?
ASHER: And when you think about the sort of backdrop to this, I mean, this comes just after all states, the insurance company just stopped issuing new
policies for residents of California because of wildfires. Just another example of how the reality of climate change is affecting our everyday
lives, isn't it, Stephanie?
ELAM: Definitely. And, you know, part of the issue too, with especially with like a wet winter, like we saw here, an unbelievably wet winter that
we've seen here in California. What that also leads to is then there's more brush, right? And then that means as things start to get hot here, that
brush is going to dry out and we could see an even more intense fire season. These are the problems. We also see people building further and
further out into more timber heavy, more wooded areas of the state that also leads to more of this interface being a problem.
We have to look at how we're going to fight this. And one thing that you definitely need to fight wildfire is water. Everyone needs water, no one
can live without water. And so that is why drastic measures have to be decided now to make sure that all of these places where people love to live
and raise their children will still exist and be viable solutions and viable places to live in the future.
ASHER: Yes, Phoenix, basically saying that if you want to build new construction in that city, you have to prove that you can supply water for
the next 100 years without using sources from the ground. Incredible. Stephanie Elam live for us there. Thank you so much. Appreciate it.
All right. Off the coast of Israel, black sea urchins are dying at an alarming rate. If scientists can't stop the mysterious disease that's
wiping them out, the whole ecosystem could collapse. CNN's Hadas Gold has more.
(BEGIN VIDEOTAPE)
HADAS GOLD, CNN JERUSALEM CORRESPONDENT (voiceover): The pristine waters of the Gulf of Aqaba in the Red Sea. Reefs teeming with colorful fish. But
something is missing. And it's threatening this entire ecosystem.
UNIDENTIFIED MALE: In a very short time, we experience a massive catastrophe of failure, talking about losing a species that used to live
forever.
GOLD (voiceover): In January, black sea urchins here started dying and mass. Within days, entire populations of thousands were getting sick and
literally disappearing.
UNIDENTIFIED MALE: We've never seen any fluctuations on that magnitude. And now to say that sea urchins were completely gone, that whatever he's giving
them, is still defined as a waterborne pathogen. We know that it is transmitted through the water. They you don't need direct contact that it
takes 48 hours for an individual to go from a live healthy individual to basically bare skeleton.
GOLD (voiceover): Vital to keep the delicate balance of life here. These Urchins consume the algae that can choke reefs already stressed by human
activity and the effects of climate change.
Dr. Bronstein and his team of researchers from Tel Aviv University show us how the beauty and health of the reefs are under attack. We do not spot a
single black sea urchin.
UNIDENTIFIED MALE: The thought that we might be seeing something that is going to be radically changed is simply a very sad thought and it is
probably the most unique coral reef in the world. It is our responsibility to make sure that there will remain here for future generations.
[15:40:16]
GOLD: This coral reef is unique in the world because of its ability to withstand high temperatures, making it more resistant to the effects of
climate change. And that's why this reek is so ecologically important to the globe.
GOLD (voiceover): These tanks that the Interuniversity Institute for Marine Sciences in Eilat, Israel were once filled with the jet black urges. Now,
they are covered in algae. A small-scale example of what scientists say is happening in the sea.
UNIDENTIFIED MALE: Without external regulation that the sea urchins provide corals do not really stand the chance in this competition with algae
because the great -- the growth rate of algae is order of magnitudes higher than those of corals.
GOLD (voiceover): Only a few have survived this epidemic like this young juvenile, he seems rather lonely.
UNIDENTIFIED MALE: Oh, yes, a few individuals, even when they survive, that's not enough to sustain the population.
GOLD (voiceover): A similar pathogen wiped the urchins out of the Caribbean in the 1980s and reared its head again last year. Dr. Bronstein said it's
likely spread by ships and possibly helped along by climate change. And it's spreading. Researchers are using DNA technology to make a difference.
LISA-MARIA SCHMIDT PHD RESEARCHER TEL AVIV UNIVERSITY: So basically, just establishing a new monitoring method, a high throughput and non-invasive
one. It's allowing us to follow processes in the water of different species.
GOLD: So in a way you're trying to predict the future was --
(CROSSTALK)
SCHMIDT: More or less, yes. Without going through the water. Yes.
GOLD (voiceover): But the time to save these black sea urchins is running out, Dr. Bronstein says. Governments need to move within weeks.
UNIDENTIFIED MALE: And decisions makers need to understand that the window of opportunity to take action is very, very narrow, and it's closing
rapidly. If we don't move quickly, to create the broodstock populations based on the Mediterranean population, the remaining population if we don't
take extra care about what we pump into this environment, we may find ourselves in a huge problem in a huge situation.
GOLD: It's all shares this gulf and this problem with Jordan, Egypt and Saudi Arabia which you can see just behind me. And with which Israel has no
official relations, but under the water there are no boundaries, and no politics and international cooperation will be a key to fixing this
problem.
GOLD (voiceover): These fragile reefs were everything plays its part in the cycle desperately waiting for help.
Hadas Gold, Eilat, Israel.
(END VIDEOTAPE)
ASHER: All right. When we come back, Ozempic has been embraced in Hollywood as the ultimate weight loss drug. Now scientists they as potential to treat
addictions like drinking and smoking. We'll have a report for you from our correspondent after the break.
(COMMERCIAL BREAK)
[15:46:03]
ASHER: I want to update you on the breaking news I brought you earlier out of India. Rescue teams are rushing to the scene of a horrific train crash.
And official says at least 50 people are dead. Of course, it's still too early to confirm specific numbers. Authorities say that two passenger
trains and a goods train collided in Odisha state. Isa Soares joining us live now from London with the latest on this.
Isa, this news just coming to us. Just walk us through what we know. So far,
ISA SOARES, CNN INTERNATIONAL HOST: Very much it is developing what we do know from authorities saying that this happened around 7:00 p.m. local time
about what, 6:00 hours or so ago authorities telling us and of course the numbers could change given of course the developing story and given the
scenes that you are seeing right now on your screen. 50 people authorities are saying are dead and hundreds injured in this train accident in India in
the state of Odisha that is in the east of the country.
Now the number of those injured, Zain, exceeds 300. But, you know, it's 7:00 p.m., it would have been very busy. As you can imagine carriages that
would have been packed as well. What we don't know at this stage, Zain, is how many people are trapped. We see people clamoring around as you saw in
those pictures on the side of that train. Clearly there are people stuck inside. We don't know yet how many there are.
But authorities are telling us that what happened is two passenger trains and a goods trains collided. What we don't know at this stage, Zain, is how
the carriages came off the track then hitting the goods train which I assume would have been an adjacent trap. That we do not know at this stage.
But rescue teams have been told, have been rushed to the scene of what looks like a very horrific crash.
And more than 50 ambulances and several fire service units have also been sent to the scene. Now, the Indian Prime Minister Narendra Modi, he has
tweeted in the last 40 minutes or so, and he said he's distressed as you can see there on your screen by the train accident. And he says his
thoughts are with the bereaved families. And also, the government has also announced in the last half hour or so it will offer compensation to the
train accident victims but as you all know, Zain, and many of our viewers will know, India has one of the largest rail networks in the world.
It's exceptionally busy, it's very important. Millions of people of course use the train every day. It's one of the cheapest ways to travel these
trains crisscross India and what I was looking two of these passenger trains, they were very speedy trains. So, we are keeping an eye on the
latest developments but it -- the pictures, the images we are getting right now it sounds and looks like a horrific accident.
Fifty people dead. We do not know at this stage how many are trapped but as soon as we have more details of course we'll bring it to you. 300 injured
exceeding 300. Zain?
ASHER: Yes. Absolutely heartbreaking. It's just gone 1:15 in the morning there in Odisha. So hopefully, we will get a clearer picture as to what
happened in the early hours of the morning. Isa Soares live was there. Thank you so much. We'll have much more news after this short break.
(COMMERCIAL BREAK)
[15:51:41]
ASHER: Some people taking drugs like Ozempic for weight loss are noticing a curious side effect. They say it also helps them curb addictive behaviors
like drinking and smoking. Researchers are now studying mechanisms behind the overlap. Our Meg Tirrell has the story.
MEG TIRRELL, CNN MEDICAL CORRESPONDENT (voiceover): These days, Cheri Ferguson has swapped her vape pen for an Ozempic pen.
CHERI FERGUSON, OZEMPIC PATIENT: I thought I'm not enjoying vaping. So I may as well just put this into the battery bin at work. And I'll see how
long I can go without it. And that was 54 days ago,
TIRRELL: TIRRELL (voiceover): Ferguson started using Ozempic 11 weeks ago to combat weight gain during the pandemic that she says was increasing her
risk of diabetes. A smoker for much of her life, Ferguson switched to vaping last July. But after starting Ozempic, she says something changed.
FERGUSON: It's like someone's just come along and switched a light on, and you can see the room for what it is. And all of the vapes and cigarettes
that you've had over the years -- it just -- they don't look attractive anymore. It's very, very strange -- very strange.
TIRRELL (voiceover): Ferguson is one of many patients taking drugs like Ozempic for weight loss who say they've also lost interest in some
addictive behaviors.
Doctors told CNN that patients most commonly report an effect on alcohol use. It may be because these drugs in a class known as GLP-1s have an
effect not just in the gut but also in the brain. It's something being studied at the National Institutes of Health where researchers just
published a paper showing semaglutide, the active ingredient in Ozempic, reduced what they called binge-like alcohol drinking in rodents.
DR. LORENZO LEGGIO, RESEARCHER, NATIONAL INSTITUTES OF HEALTH: We believe that at least one of the mechanisms is how this drug reduces alcohol
drinking is by reducing the rewarding effects of alcohol, such as those related to transmitters in our brain which is dopamine. So these
medications are likely to make alcohol less rewarding.
TIRRELL (voiceover): And it's not just alcohol and nicotine. Patients have even told The Atlantic it had effects on behaviors like nail-biting and
online shopping.
LEGGIO: There is a lot of overlap on the (INAUDIBLE) mechanism that regulate addictive behaviors in general. So it's possible that medications
like semaglutide, by acting on these specific mechanisms in the brain -- they may help people with a variety of addictive behaviors.
TIRRELL (voiceover): Clinical trials in humans are needed to prove that. One set is underway at the University of North Carolina, looking at
semaglutide's effect on alcohol and tobacco use.
Cheri Ferguson says Ozempic has helped her lose 38 pounds. Even better, she says, is how it's made her feel.
FERGUSON: The weight that it takes off your mind is far greater than any pounds that come off your body.
(END VIDEOTAPE)
TIRRELL (on camera): Ferguson started using Ozempic, Novo Nordisk as well as Eli Lily which makes a similar medicine. Both companies said right now
they are not running trials of their drugs for addiction. This traditionally hasn't been a market that's been appealing to pharmaceutical
companies because drugs really haven't been successful in selling well, although doctors emphasize there is a huge unmet medical need here.
Alcohol use disorder affects almost 30 million Americans and only five percent currently receive treatments.
[15:55:05]
So, researchers are hoping that perhaps these promising early results will draw more in interest into the field.
ASHER: And update now on that dramatic rescue near the summit of Mount Everest. Anderson Cooper spoke to the guide who saved a struggling climber
in an area the mountain known as the Death Zone. Gelje Sherpa said the mountain was clinging to a rope and about to die. He also said it was far
from his first rescue.
(BEGIN VIDEO CLIP)
ANDERSON COOPER, CNN HOST: How did you secure him so that he was warm? And you could -- and you could carry him down almost 2000 feet?
GELJE SHERPA, EVEREST GUIDE. Yes, because he was very like cold place in like more than 8,000 meters like in what we call the Death Zone. That's a
very dangerous place. And no one come possible to bring down to him, and so that's why no one like, helping him. Everyone just focusing on the summit.
I decided just bring down to him and we carry back it down.
COOPER: We're showing video of you. You've packed him in a mat, I think, and you're literally carrying him on your back down the mountain.
SHERPA: Yes.
COOPER: And we just showed a video of him actually shivering. That was when you first saw him. I mean, he's shivering, he's helpless, essentially. How
difficult was it to bring him down the mountain?
SHERPA: It was, like, massive difficult because I did like more than, like, 55 rescues, but it was very like hardest in my life.
COOPER: You've done 55 rescues? That's incredible.
SHERPA: Yes, I did more than, like, 55 rescues. I did, like, long line, other normal rescues, everything. But it was -- this is like very hard
rescue, like, really hard to do like rescue, like, around the dead zones.
(END VIDEO CLIP)
ASHER: On Monday, a very special edition of QUEST MEANS BUSINESS. Richard Quest will be live from the IATA Conference in Istanbul. He'll also be
joined by chief executives from some of the world's biggest airlines including the CEOs of United, Etihad, Qatar Airways and Air New Zealand.
All right. There are just moments left to trade on Wall Street. We'll have the final numbers and the closing bell right after this.
(COMMERCIAL BREAK)
[16:00:11]
ASHER: The closing bell is ringing on Wall Street. U.S. markets are soaring into the weekend up almost 700 points. And that is QUEST MEANS BUSINESS.
I'm Zain Asher. "THE LEAD" with Jake Tapper starts right now.
END
