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Quest Means Business

U.S. Military Carries Out New Strikes On Iranian Targets; Eurozone Inflation Rises To 3.3 Percent On Elevated Energy Costs; Grieving Nepalis Live In Fear After Deadly Flooding; U.S. Urges Hands-Off Approach To A.I. Regulation; Shein Debuts In Hong Kong Market; John Ternus Takes Over As CEO Of Apple. Aired 4-5p ET

Aired September 01, 2026 - 16:00   ET

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

[16:00:15]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell is ringing on Wall Street and the market has been down throughout the

course of the session. As you can see, down now, I think that's probably almost at the worst, down 418 points. Look at the triple stack and you'll

see it is a similar tale of woe. In fact, it is actually worse. The NASDAQ losing just over one percent. We will get to all the reasons why,

particularly as it relates to oil prices.

But those are the markets, and these are the events that you and I will talk about over the next hour.

Oil prices surge after a flurry of military activity in the Gulf. Tehran is claiming U.S. strikes hit civilian airport.

Higher energy prices are fueling anxiety in the bond market. I will be speaking in a moment to the former St. Louis Fed president, Jim Bullard,

and getting his take on what the strategy should be.

And the Ternus era begins at Apple. We will hear from Steve Jobs' biographer about what lies ahead now, it has all changed at the top.

We are live in New York. It is Tuesday, it is September the 1st. I am Richard Quest, and in New York, as elsewhere, I mean business.

Good evening.

We begin tonight with a series of U.S. strikes on Iranian port cities that's now having an effect, sending shivers through the oil markets. Iran

says four projectiles hit the southeast of the country and that included striking an airport. An explosion was also heard in an area home to a key

gas and petrochemical hub.

The United States says it was targeting Iran's Islamic Revolutionary Guard Corps. Iran has vowed to retaliate.

The effect was seen on the international commodity markets, energy, you see there, Brent up five percent, West Texas was up best part of six percent.

Oil prices surged on the news of the strikes, with Brent climbing just slightly more than West Texas.

Now, those developments come as President Trump summoned oil and gas executives to The White House earlier as high fuel prices cut into his

popularity ahead of the midterms.

CNN's Kevin Liptak is with me.

Whatever he does, the price is being set by events, not by his comments and there is nothing much he can do about that.

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Right. And I think the way that this afternoon progressed was really interesting. You know, we first

heard about these strikes on Iran, these U.S. strikes on Iran. At the very moment that President Trump was sitting down in the Roosevelt Room with

these energy CEOs and you know, throughout the day, there had been some indication that maybe we would see this meeting, that the press would be

invited in, and that ended up not happening, and I think that just shows that the President has a real problem here.

The war in Iran is causing the energy prices to go up, and for as much as he wants to haul in some of these executives to try and press them to

expand refining capacity, to try and cut into their own massive profits, to help bring down the prices for consumers, nothing is really going to have a

real effect unless this war reaches a definitive end, which it clearly is not.

And now we seem to be back to this back and forth tit-for-tat, as Iran promises retaliation. It just underscores how difficult this will be, I

think, for President Trump.

QUEST: I mean, the market has known for some time that it was not going to go back to the previous prices. It was going to remain elevated at least

until the end of the year, and probably well into 2027.

So the best the administration can do is massage at the edges, because the fundamentals haven't changed.

LIPTAK: Right, and I think by having this meeting today, the President wanted to demonstrate that he is trying to do something about it. You know,

he is not the first President to struggle with high gas prices and he is not the first President to realize that there is actually very little that

the White House and that he is the commander-in-chief can do to bring them down. The levers are limited.

You know, the strategic stockpile releases or trying to limit exports, there are steps that he could take around the margins, but there is

nothing, you know, concrete, definitive short term that he can do to bring these prices down. So I think his goal here is to try and demonstrate that

he is trying to do something.

[16:05:04]

But in the end, the price that Americans pay at the pump and the price that they are driving past every day at gas stations, if it is above what it was

before the war began or before President Trump came into office, that's going to be what they remember. And so there is just really not that much

he can do, but it is a big political problem.

QUEST: Of course, we can't know how much the electorate will, in a sense, punish for that, which of course is the is the political question.

Kevin, I am grateful. Thank you.

Kevin Liptak is in Washington.

The global bond sell off is deepening. Some yields are hitting their highest level in more than a decade. Remember the price goes one way, the

yield goes the other. The 10-year bond spiked to nearly 4.8 percent. It is the highest it has been since January of last year, and it is not only a

problem in the United States.

In Japan, the Japanese government wants the JGBs, as they are known, 10- year bonds rose above three percent for the first time in 30 years. In the U.K., its gilts; Germany and France also saw their bond yields jumping to

the highest level in more than a decade. And the reason? Essentially the same. It is either a concern over inflation, Eurozone inflation, which

spiked last month to 3.3 percent on rising energy costs because of the war, along with, of course, the issues of debt and increasing government debt.

And so, all in all, investors are now thinking in the European terms, the ECB will raise interest rates next week when it has its regular meeting.

Allison Morrow is with me. The ECB has not as yet gone down the Warsh road of eschewing forward guidance and all those other things. So they are still

very much in the traditional mold of telling the market where they think they are going to be going, but yields are rising and that is a worry.

ALLISON MORROW, CNN BUSINESS SENIOR EDITOR: Absolutely. I think this is a similar kind of thing where when you're driving your car and the check

engine light comes on, it doesn't mean your car is about to explode, but it means that sooner or later you've got to get under the hood and address

what is going on with the machine and all of those countries that you mentioned, including, you know, the Eurozone and Japan and the United

States are all massive economies with this kind of core problem that bond investors have been particularly worried about for a long time, which is

debt, public debt, and the increasing cost to service that debt.

QUEST: You see, this shouldn't really have happened in the E.U. or the EC as it was then, because of course, it had the Maastricht Criteria and the

Maastricht Criteria was supposed to keep everybody to within a certain debt. Now, that was a long time ago. The rules have been changed many

times. Everybody has cheated in some shape or form, and I guess, this is the result.

You're financing wars and your financing recessions and pandemics and this is the result.

MORROW: Yes. I think, you know, the debt concerns have been brimming for a long time and bond investors can seem a little bit, you know, overly

worried about deficit and debt spending, you know, a lot of more liberal economists have said that bond investors tend to overreact to those things.

But the catalyst here has been the sudden surge from the war in Iran, driving up energy prices around the world. All of that kind of has that

ripple effect through the global economy.

You know, we always talk about how, like the stock market is not the economy and don't conflate the two, but the bond market almost is the

economy. It has a much more kind of immediate and, and reflexive impact on the global economy.

QUEST: One quick point, in the United States, the way the bond yields have continued to rise, in a sense, canceling out whatever the Treasury

Secretary was doing with his Twist Operation. Can we say that now definitively? I mean, for all intents and purposes, the twist didn't work.

MORROW: You know, I wouldn't say anything definitively, but I think the bond market is displaying -- you know, I've seen the word unruly thrown

around a lot. The bond market is being unruly. You know, it is not going to be tamed by the Treasury or the Fed or any kind of one policy making body.

These bond investors, you know, which is a giant global ecosystem are saying, here is the problem, we are worried about these things. You've got

to deal with the clear problem and not these kind of Band-Aid temporary attempts to keep things in line.

QUEST: I am grateful. Thank you very much. Let's stay with this topic. Rising inflation has had U.S. investors bracing for higher rates from the

FED, the FOMC.

The CME Fed Watch now says there is a 68 percent chance that the Fed will raise borrowing costs this month at its regular meeting.

[16:10:10]

The Fed Chair, Kevin Warsh, said last week at Jackson Hole that forward guidance has outlived its purpose. But, and this is crucial, he did call

inflation figures concerning.

Jim Bullard -- President Jim Bullard is the former President of the Federal Reserve Bank of St. Louis. Now, the dean at the Mitch Daniels School of

Business at Purdue University.

Mr. President, very grateful. Thank you, sir, for joining us.

Now, let's get the basics out of the way here first.

Do you believe that rates should rise, whether it is September, whether it is October, but that the inflation position now warrants an increase?

JIM BULLARD, FORMER PRESIDENT OF THE FEDERAL RESERVE BANK OF ST. LOUIS; DEAN AT THE MITCH DANIELS SCHOOL OF BUSINESS AT PURDUE UNIVERSITY: I've

argued that it would be a good time to try to tackle inflation and as Chair Warsh said in his speech, the real side of the economy looks pretty good.

You've got a lot of build out from A.I. and optimism about A.I. Youve got a labor market that is essentially at full employment, but you've got

inflation about a hundred basis points too high on the Fed's preferred measure.

So this might be a good time to make a move against inflation, since the rest of the economy is doing pretty well.

QUEST: On this - on the Jackson Hole speech and the interpretation of it, he sort of boxed himself in, in a sense. It was so hawkish in terms of

inflation, inflation, inflation that if he doesn't do something whilst inflation remains at these elevated levels, and then the new Chair's

credibility -- I am choosing my words diplomatically, might be a little tarnished.

BULLARD: I thought it came off pretty hawkish. I don't think that was any accident. I think that probably reflects the median of the committee but I

don't think it necessarily has to mean that they would move in September. They could use September to set up a move later in the year. That's one way

that the committee has sometimes behaved, and also have a little bit of data between now and then to check out, and so they can lean on that a

little bit.

QUEST: This question of the way in which the Warsh Fed is going to communicate. Now, you served under the previous regime, I don't think

anybody would agree or disagree, sorry, that there needed to be changes to the monetary structure or framework and the way it was operating. I think

there is a broad consensus, but do you think he is going in the right direction, sort of eliminating forward guidance or at least denuding it,

the dot-plot, the press conferences? Do you think that's right?

BULLARD: Well, I think, not to overinterpret him, but I think that, you know, interest rates are determined by an intersection of what the Fed does

and what the market is thinking, and I think he just felt like it got overweighted toward the Fed. It was 90 percent Fed and 10 percent market.

He wants it to be 50 percent Fed, 50 percent market. And, so in that sense, I think he is spot on. I think it is probably too much Fed previously, but

you can't really go to a situation where it is all market no Fed because they are still going to care about what the Fed is doing.

QUEST: And this is the point, isn't it? This idea that the market tells the Fed, not the Fed telling the market in a sense. I mean, I am putting it in

very simplistic terms like that, but the market is the barometer of what rates should be. I mean, it is going to require a mindset shift by the

markets. Can they do that?

BULLARD: Oh they are very capable and they love to send their own signal about what they think should be done. But, you know, there is no getting

around it. They are going to care what the policy is going to be because that's setting the discount rate for the whole economy, so that matters a

lot.

But then they can say, well, if you're going to do that, then here is what I am going to need to buy these longer term instruments, and so that's what

you're seeing today, kind of wanting higher interest rates for that.

QUEST: Are you concerned that all the major Central Banks, in all the economies -- Japan, the E.U., the U.K. very high debt levels, inflation may

or may not have been tamed, but the transmission mechanism arguably has been -- has been dented and still there is no real discussion about deficit

reduction.

[16:15:10]

BULLARD: Yes. I think, it is concerning. I mean, even the $40 trillion that the U.S. owes today, you know, if you felt like there was a plan going

forward, I think investors might feel a little more confident about that and they might be okay with it. But you've got the $40 trillion in debt and

really no end in sight and no plan whatsoever.

And now you've got divided government probably coming in the U.S. after the election. That's what the political people are saying. And so I think

that's what really got markets going here is the realization that with divided government, they are very unlikely to do anything about the six

percent deficits that we are seeing as far as the eye can see.

QUEST: President Bullard, thank you so much for joining us. These are difficult issues and you make you make them sound so much more palatable

and understandable and I am very grateful to you, sir, for joining us tonight. Great to see you. Thank you, sir.

Now, when QUEST MEANS BUSINESS returns in a moment, a heart rending report, we will be in Nepal to bring you up-to-date.

Survivors of last week's devastating floods, they are mourning their loved ones and there is still a real fear that they are in harm's way.

(COMMERCIAL BREAK)

QUEST: Officials in Nepal have now confirmed the death of more than a thousand people in last week's flooding disaster, and they say nearly 4,000

people remain missing. The country's army now says it has so far rescued 3,800 people by air, and that includes more than a hundred people brought

to safety today.

The United Nations says there has still been no contact with some of those areas that were hit hardest by the floods, and experts are warning there is

a risk of further landslides and flooding.

So those warnings are making life extremely hard still for the survivors as they try to cope not only with the unspeakable loss, but also, of course,

their own danger.

Will Ripley now reports from Nepal.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): On this unfinished rooftop of a small municipal building in Bidur, Nepal, 50 men

left homeless by the flood try to sleep, but the nights are long and cold, and Subba Tamang says, full of tears and fear.

SUBBA TAMANG, NEPAL FLOOD SURVIVOR: This place is not also safe.

RIPLEY: So you're afraid the floods could even come up to this roof?

TAMANG: Yes.

RIPLEY: How do you sleep at night? Do you -- are you able to sleep?

[16:20:07]

SUBBA TAMANG No. We can't -- we couldn't because many people cry because of -- because they lost their family members, too.

So many people cry here at night remembering their members. And every day, it is going like that.

RIPLEY: You've got the helicopters always flying over.

RIPLEY (voice over): Every day, the choppers fly out searching for survivors. Every night, they fly back and those he lost are still gone.

TAMANG: And I lost my eight family members here.

RIPLEY (on camera): You lost eight family members.

TAMANG: Yes. I lost my uncle, aunt and my siblings.

RIPLEY: I am so sorry.

TAMANG: This one also.

RIPLEY: This is your brother?

TAMANG: Yes.

RIPLEY: How old is he?

TAMANG: He is two years old.

RIPLEY: What's his name?

TAMANG: His name is Sagar (ph). Anjana (ph).

RIPLEY: How old is Anjana?

TAMANG: He is two years old. Her name is Dolma Tamang (ph).

RIPLEY: So she is your aunt?

TAMANG: Yes.

RIPLEY (voice over): Camera phone pictures are precious commodities for Subba and his cousin, Kopila Tamang (ph). They have little else left.

KOPILA TAMANG, NEPAL FLOOD SURVIVOR: When he was born, I take this one.

RIPLEY (on camera): You took this one?

K. TAMANG: Yes.

RIPLEY: How old?

K. TAMANG: One month. She is first daughter. Second daughter. My mom is third one. This also lost, my mom and my two siblings also, and two

cousins, auntie and her daughter.

RIPLEY: Both were lost?

K. TAMANG: Yes. Both lost. This is my sister, she is also lost. This is my Grandma.

RIPLEY: She was also lost?

K. TAMANG: She also lost. She is so innocent. She used to love me so much.

RIPLEY: Everyone in this picture?

K. TAMANG: Yes.

RIPLEY: Is gone?

K. TAMANG: These all are gone. They are like my children. They are - when I came home, they always come back with me and call me "Fufu." So I miss

them.

RIPLEY: Seventeen family members.

K. TAMANG: Yes.

RIPLEY: That's really hard to even wrap your head around?

K. TAMANG: Yes.

RIPLEY (voice over): The 2015 earthquake destroyed her old family home. Back then, everyone survived. This time, the wall of water consumed her

family's new home in Rasuwa, leaving nothing and no one behind.

RIPLEY (on camera): So you were trying to call?

K. TAMANG: Yes.

RIPLEY: Your dad? Your mom? Nobody --

K. TAMANG: My relatives. There is no answer.

RIPLEY: Because all of them are gone.

K. TAMANG: Yes.

RIPLEY: What do you -- what is keeping you strong?

K. TAMANG: I have one small brother, I have to take care of him. Now I am the mother for him, so I have to be strong. When I cry, he will also cry.

RIPLEY: Hello!

K. TAMANG: He is my brother.

RIPLEY: What's your name?

HOGAN TAMANG, KOPILA TAMANG'S BROTHER: Hogan Tamang (ph).

RIPLEY: Hogan Tamang, nice to meet you.

RIPLEY (voice over): Time passes slowly here. Most people are still in a state of shock with only the clothes on their backs.

About 100 women and children sleep in this yoga center. They tell me every time there is a rumor of another flood, everyone runs up this nearby hill

and hides. The rumors often come late at night, they say.

There are no showers and everyone shares a bathroom. They get their drinking water from a truck or fill their bottles at nearby waterfalls.

Children like Rojina and Rosita Bhatta can't go to school because it was also destroyed.

So what happened when you're on the bus going to school?

(ROJINA BHATTA speaking in foreign language.)

RIPLEY: "We could see the water chasing us from our window," she says "Everyone started crying and shouting. The driver drove very fast and took

us to a safer place. I was extremely scared. We thought the flood would not be this big, but when we saw how huge it was, we were terrified."

Her dad, Rajendra Bhutta, says the bus driver saved his children's lives. He saw dozens of houses being washed away, along with a bridge and a road.

The raging water dragged this bus hundreds of feet.

Did you ever think you'd see a flood like this?

(RAJENDRA BHUTTA speaking in foreign language.)

RIPLEY (voice over): "No. I've never seen this type of flood," he says. "Not just me, but my father and grandfather also never witnessed such a

devastating flood in their lifetimes. I think a large number of school children may have died, since some of their parents may also have died.

There is no one to ask about their whereabouts."

RIPLEY (on camera): You really have got to watch your step. This is quicksand, probably about 20ft deep. Some of these guys out here said

they've stepped in it and it went right up to their neck. That makes recovering bodies very difficult and dangerous.

RIPLEY (voice over): Nobody knows how many bodies are buried beneath or when or where it will be safe to rebuild all the homes, all the lives swept

away.

Will Ripley, CNN, Bidur, Nepal.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

[16:28:11]

QUEST: The U.S. is making the case for less strict A.I. regulation, and it is doing so by pushing G20 countries to take a more hands-off approach,

which includes avoiding making new rules. It is a view which most major A.I. companies are, of course, fully on board with.

Here is how SpaceX founder, Elon Musk put it at the G20.

(BEGIN VIDEO CLIP)

ELON MUSK, FOUNDER, SPACEX: You have to have an environment that's relatively free of regulation, meaning that new things must be default

legal as opposed to default illegal. So, in the E.U. for example, we find that the regulation level is extraordinarily high and things are generally

default illegal and this inhibits progress of new technologies.

It slows it down. It doesn't ultimately stop it, but it slows it down quite considerably.

(END VIDEO CLIP)

QUEST: "The Financial Times" editor, Ed Luce is with me.

Ed, I was reading your fascinating piece that you wrote on A.I. and the whole A.I. sort of backlash to it. The problem here is you've got Bill

Gates saying, as he did last week to Anderson Cooper, look, this could be the worst thing we've ever seen or the best thing we've ever seen. But

whatever it is, it is a massive revolution. And Elon Musk says, well, don't worry too much about it. We should have less regulation, light touch on the

tiller. Theres a contradiction there that's going to go wrong.

ED LUCE, U.S. NATIONAL EDITOR AND COLUMNIST, "THE FINANCIAL TIMES: There is, and you know, Elon Musk has changed his tune and he might change it

back again because he spent years warning about the potentially, catastrophic consequences of A.I. for the human species and he had a very

famous argument back in 2013 at a dinner party with Larry Page, then of Google, of Alphabet about whether there should be constraints on this

potentially species-threatening technology, and Musk then was in favor of constraints.

So he is not alone, whether you talk about Sam Altman of OpenAI or Dario Amodei of Anthropic, Mark Zuckerberg, each of them has both warned of the

potentially disastrous consequences of A.I., but also promised a kind of utopia that this will work solve disease, potentially even create

immortality.

So I call it, a sort of dark utopianism.

[16:30:49]

QUEST: Right. But this would all be, you know, there are two, there are two forces here at the moment. You've got what you're talking about there in

terms of the regulatory force, but you've also got this organic backlash that's now created against A.I., against data centers, and the like, and

managing that could be even more tricky in a sense because of elections and politics.

LUCE: I think this is a huge problem that they haven't really begun to grapple with, even though they are by some of their more dramatic

predictions, fueling it themselves. But they haven't begun to grapple with the fact that 80 percent of Americans or more are terrified of A.I.. And

they don't see these great utopian solutions. They just see threats to their jobs, threats to their children.

They see massive sort of "Blade Runner" sort of type inequality in their future. And this is across the board, this is -- this isn't just sort of

progressive Democrats or Democratic socialists or MAGA people. It's centrists, it's independents, it's Americans of every stripe. And their

concerns are not really being addressed by politics, certainly not by the Trump administration.

QUEST: Which it's not belittling, but it's sort of discounting to an extent. But here's the problem. Those same protesters want the benefits of

A.I.. They just don't want sort of the coal like -- it's like the old coal fire stations and the old coal power stations. They just don't want them on

their doorstep. So what is the solution there? Because if we are going to get A.I., we need these data centers. They've got to be put somewhere.

Finish that sentence off.

LUCE: Well, I think that a public-private partnership between these big companies and Washington and the state capitals to build safety tools and

guardrails that would be consistent with addressing the public's legitimate concerns about A.I., but without constraining the growth and the incredible

potential, upside potential, that you see in areas like medicine, and of course, autonomous driving and the like.

That -- those two things are not mutually exclusive. They're possible, but there's got to be some kind of a partnership here. There is another factor,

Richard, which, you know very well.

QUEST: Right.

LUCE: And that is about 50 -- approaching 50 percent of U.S. stock market capitalization is now the A.I. companies. It was about zero a few years

ago. Now it's approaching half. And yet two-thirds of the world's A.I. usage, the tokens as they call it, that you spend when you ask A.I. a

question, or you an A.I. agent, are coming from Chinese A.I. companies that charge a fraction of what American A.I. companies are charging.

So where are they going to get the revenues to justify these data centers? This massive hyper scaling, as they call it? It's an open question as to

whether we really are approaching a big bubble here.

QUEST: I'm grateful to you. Thank you. I mean, I know we'll talk more about it. Thank you very much, sir.

Shein made its market debut in Hong Kong on Tuesday. The company struck the gong at the Hong Kong Stock Exchange to mark the occasion. Shares finished

flat on the first full day of trading. They bounced back after falling as much as 10 percent earlier. The closing price values Shein at around $26

billion. Now that sounds a lot, but it's not. Well, it is a lot, but it's 74 percent less than its peak some years ago.

The fast fashion retailer has faced headwinds ever since 2022.

[16:35:03]

They've been hit by U.S. tariffs. That includes President Trump eliminating the so-called de minimis exemption. Shein is also facing slowdown and

slowing growth, and more competition.

CNN's Anna Stewart reports in London.

ANNA STEWART, CNN CORRESPONDENT: Well, Richard, this wasn't the blockbuster anyone might have hoped for, particularly a few years ago, 2022, worth

nearly $100 billion, now worth, in terms of value terms, you know, about a quarter of that. Quite the fall.

You mentioned some of the reasons. There's obviously, as you would expect from a sort of newcomer into fashion, much competition. There's Temu,

there's Ali Express, but also, frankly, better offerings from traditional high street brands like Zara. There's Amazon Fashion. There are a few

newcomers as well.

The IPO drama is being trying to list now for a few years. There was a huge political backlash in New York when it tried to list there. It then tried

London and actually it was the prospectus it was going to have for the London listing that involved the Chinese securities regulator pulling it

due to embarrassment over the suggestion that forced labor could be one of the risks for this company.

That's not very attractive for investors. There's the regulatory probes. And then as you mentioned, there's also the tariffs. There's the de minimis

losing the exemption from tariffs in the U.S.. There's also duties by the E.U. and further taxes by France. It's not as cheap as it once was

essentially.

QUEST: When you look at this and you put it into perspective of what happens, I mean, everybody says that the idea of the de minimis getting rid

of it and all of these things has changed the retail experience. I don't easily see it coming back.

STEWART: No. And I'm not sure if you've ever tried to order anything from Shein, Richard. You know, perhaps your ties or your braces. But clearly

this is a company that was, you know, all about value. It was low cost. It took a long time to arrive, given it's a Chinese supply chain, but the

value there wasn't it being cheap and copying fashion very fast.

Now, as soon as it's not cheap anymore, and for instance, in France as of today, there's a new taxation that's come into place, a per item fee that

by 2030 could go up to $22.60 per item. Suddenly that's not cheap. And that really was the edge that it had. There are also concerns, increasing

concerns I think, about, you know, the impact it has on the environment, about the, you know, allegations of forced labor, which the brand has

always denied. That all plays into the consumer experience as well.

QUEST: Anna Stewart, grateful. Thank you. Anna Stewart in London.

Now this has just into CNN. Iran, Iran says it's launched missiles towards Jordan in response to the latest round of U.S. strikes. Jordan's state

broadcaster is now reporting that air raid sirens were activated in two governorates. There was no immediate information on casualties or damage.

For most of its existence, Apple was synonymous with its co-founder Steve Jobs, the man who introduced the Mac computer, and then, of course, the

iPhone. He handed the reins of power to Tim Cook. He made Apple one of the world's most valuable companies during his 15 years as CEO. He introduced

the Apple Watch, the AirTag, amongst other items, and now a new era takes over.

The John Ternus era as the new Apple CEO after spending years heading the company's hardware engineering teams. Ternus has some big shoes to fill,

obviously. First of all, under Cook's leadership, shares of Apple rose more than 2,000 percent. It's up to him, Ternus now, to keep the momentum going.

At the same time, navigating the pivotal moment for the company.

Geoffrey Cain is with me, the tech columnist for "The Spectator" and the managing partner at Alembic Partners. He also wrote the book "Steve Jobs in

Exile: The Untold Story of the Next and the Remaking of an American Visionary."

Good to have you, sir. Let's put it bluntly. This man is not an outsider. John Ternus knows where the bodies are buried. He knows how the company

runs. I guess the only question is, does he have the sparkle necessary to run the company?

GEOFFREY CAIN, TECH COLUMNIST, THE SPECTATOR: Well, within Apple, John Ternus is seen as a highly reliable leader, so he hasn't -- he's just

starting as CEO today. But what he's known for within Apple as its former chief hardware engineer is that when he says something is going to get

done, he gets it done. And he doesn't over promise. That's the reputation that I've heard from my sources at Apple.

And he's been there for more than 20 years. He started working there when Steve Jobs was CEO. He he took in those lessons and he took in the lessons

of Tim Cook, who was the successor to Steve Jobs.

[16:40:06]

So very much an insider. He's not somebody who brings the sparkle, necessarily. That's not his personality, but he knows how to get things

done. And what's most important to Apple executives is that he knows how to hold the line. He knows how to preserve the ongoing success of Apple and to

make sure that the incremental innovations that keep coming out are going to keep coming. They're not going to (INAUDIBLE).

QUEST: How long do you think he's got? How much rope is the market going to give him?

CAIN: The market is going to give him, I would say, two years max to see what he's capable of. There's a big product launch that he just wrote in an

e-mail to employees this week. He said that a big product launch is coming next week. There's a rumored foldable phone that's going to come out. It's

a foldable iPhone that opens up similar to a booklet.

These kinds of products are widely seen in the market as add-ons. They're not revolutionary devices that are going to upend and change the image of

Apple, but ultimately it's going to be a question of, can he keep the enormous success of Apple in the last 15 years since the death of Steve

Jobs? Can he keep that growth coming and can he continue to build things like supply chains, distribution networks? Can he continue to build the

system and also integrate artificial intelligence into A.I.'s product lineup?

QUEST: And very briefly, can he also manage to keep the politics on side? And, you know, Tim Cook was very good at managing to keep Donald Trump,

even turning up at the White House with those gifts and all of that. So managing that political relationship is going to be significant.

CAIN: Right. And it's interesting that Tim Cook is taking a role. So, Tim Cook is not retiring completely from Apple. His role is going to be

executive chairman, and he's going to be taking a role of managing those government relationships, both in the U.S. with the Trump administration,

but also in China, where Apple has a massive supply chain presence and also a massive consumer market.

Right now, the geopolitics between these two countries, I used to be a foreign correspondent in China covering this.

QUEST: Right.

CAIN: And the geopolitics are rough because both countries cannot get along. And so Tim Cook is managing a lot of this. Well, John Ternus, he's

going to do some of that, but he's really focused on the products, the hardware. He's a hardware engineer, and you know, what comes next for the

iPhone. It's been out now since 2007, almost 20 years. What is the thing that comes after the iPhone?

QUEST: I'm -- well, a question you and I will talk about in the future. I'm grateful to you, sir. Thank you very much for joining us.

And that's QUEST MEANS BUSINESS for this Tuesday. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.

"World of Wonder" is next.

(COMMERCIAL BREAK)

[16:45:41]

(BEGIN VIDEOTAPE)

QUEST (voice-over): It's time to embrace new adventures.

Just doesn't get much better than this, does it?

Seize the moment in this "World of Wonder."

It is morning in Williams, Arizona.

All right, so I'm going to make some coffee because this one wants coffee.

BONDI BEAU, CAMERAMAN: The crew definitely wants coffee.

QUEST (voice-over): And Cafe Quest is open for business. I've brought along my own machine and my coffee pods.

BONDI BEAU: You can still have the luxuries on the road.

QUEST: Absolutely. Are you impressed or are you impressed?

BONDI BEAU: It doesn't get any better than that, does it?

QUEST: Correct.

(Voice-over): Maybe Cafe Quest in another life.

Oh, it's good. So that's the sewer. Let's get the hoses out first.

(Voice-over): We've been on the road for a week.

There's two of them.

(Voice-over): And I've now generously offered to do the task everyone else seems to be avoiding.

Wait a minute. There we are.

(Voice-over): Indeed it is time to empty our tanks.

BONDI BEAU: Yes. There you go. Good connection.

QUEST: Right. That's done. OK? Locked and closed. There we go. Done.

(Voice-over): Bertha is now all freshened up, and we are late. Racing against time as the storm clouds come rolling in.

It's not always sunshine on Route 66. And when the rain arrives, the storms, it really does it with a vengeance. This stretch of historic old

Route 66, from Seligman to Kingsman is the longest stretch of the original road.

(Voice-over): In 1987, Angel Delgadillo led the charge to create the first Route 66 Association after the interstate opened and everything came to a

stop. Soon a whole new industry of tourism was generated, and Route 66 went from bypassed to a heritage route.

And what started here was rapidly followed by other parts of the country, which had Route 66 going through it.

Oh, that's gorgeous. Oh, I think that was one of the best sunsets I've ever seen in my life.

Well, we really are in the middle of nowhere. Excuse me.

(Voice-over): In Oatman, Arizona, the overwhelming majority of inhabitants are these wild burros or donkeys.

This was the quintessential town that died when the interstate opened, and it remained dormant for years until somebody decided to invest in it, buy

it, and slowly but surely, bit by bit, bring it back.

Here you, love.

I think this feels to me the most wilderness part of the route so far.

(Voice-over): Amboy, California is quite literally somewhere in the middle of nowhere.

Population 20.

(Voice-over): In its heyday, Roy's Cafe was a popular stop for motorists wanting to fuel up, relax, and grab a bite to eat.

[16:50:03]

KEN LARGE, OPERATIONS MANAGER, ROY'S MOTEL AND CAFE: I can only imagine what it was like in the '30s or '40s coming across, coming across the

desert.

QUEST: I'd pay good money.

LARGE: And you finally see lights of this little town down the road.

QUEST (voice-over): Then when that interstate was built, the town dried up almost overnight until, that is, 2005, when the late Albert Okura bought

Amboy and had a vision to restore it as an oasis in the desert.

Is this as it was when it closed?

LARGE: This is as it was when it was closed. This was the hotel lobby. And so it's called Googie architecture. And what Googie architecture is, is

deliberately nothing is square. Every wall is at an odd angle or triangle, trapezoid, something.

QUEST (voice-over): There are still cabins and a post office, even a church.

What's your time scale for the next stage of its development?

LARGE: If we get water this year, I think that we can have those cabins rentable in the next year. It'll be a unique place where you can come stay

in an original 1950s cabin and feel what it felt like to come here and see a neon sign in the middle of the bobby.

QUEST (voice-over): In the comfort of Bertha, I see how these ghost towns, Oatman and Amboy and the like. They are windows to the past, and it only

takes one person with a vision to open that window and keep the American heritage dream alive.

(COMMERCIAL BREAK)

QUEST (voice-over): We have been true to our mission. We have followed the mother road and California is our reward.

I love a diner.

PEGGY SUE GABLER, OWNER, PEGGY SUE'S 50'S DINER: Good. A diner is where people live. People come in. They've been coming here for 30 or 40 years.

My menu hasn't changed.

QUEST: And it is homemade, I hope.

GABLER: Of course it is. I'm 78 and I do forget things. But I won't lie to you.

QUEST (voice-over): We're at Peggy Sue's Diner, and this is the eponymous Peggy Sue. In 1987, Peggy and her husband took a leap of faith and restored

this original '50s roadside diner.

What would you say is the essence of a diner? Good food. But it's more than that, isn't it?

GABLER: You have to have a little bit of personality in the diner.

QUEST (voice-over): Peggy Sue has it in spades.

GABLER: Follow the Yellow Brick Road.

QUEST: Follow the Yellow Brick Road.

(Voice-over): It wouldn't be a classic roadside diner without a quirky Route 66 attraction.

GABLER: So this is the lovely dinosaur park. There's flamingos, there's little turtles in here.

QUEST: Turtles, dinosaurs and flamingos.

GABLER: Yes. What more could you ask for?

QUEST: Well, I was just about to say. What more could you ask?

GABLER: This is a place to cool off.

QUEST: It is really, really lovely.

You know what I feel when I'm in here?

GABLER: What?

QUEST: I just feel the love that you and your husband put into it.

GABLER: It makes me feel good, too. I miss my husband. 53 years is a long time. You know, a long time to miss him. He's been gone five and a half

years.

QUEST: He's still here.

GABLER: I know.

QUEST (voice-over): The heart and soul of this road and the people who have dedicated their lives to preserving it. It's palpable wherever we've been.

[16:55:00]

What I've come to learn on Route 66 is that when we embrace that spirit of adventure, we never know what we'll stumble upon.

This is really weird. This is bottled. Bottle trees. Wow.

(Voice-over): Elmer's Bottle Tree ranch. Hundreds of these peculiar trees.

You have to admire this lot.

BONDI BEAU: It's kind of cool actually.

QUEST: It is actually.

(Voice-over): Labyrinthic, trinkets from the past.

Oh, wow. This is bigger than it looks.

(Voice-over): It was built simply to make road trippers like us stop and take a moment and experience the desert.

I like this more than I thought I was going to. Wow. Very, very cool. I mean, an interesting, different, weird, wonderful, bizarre, but thoroughly

enchanting.

Hello, yes? Yes. Well, we've just about finished. That's very kind of you. Yes. So another couple of hours? Right. Santa Monica. Goodbye.

(Voice-over): We are nearly there. Almost to the Pacific.

It is really cool that we've driven all the way to the coast. Yay. Come on, Bertha. There it is. We've made it. The West Coast, the Pacific Ocean. I'm

like a kid with a toy.

(Voice-over): Santa Monica, California, and the end of Route 66. For all of us, there is this most wonderful sense of achievement. The experience of

seeing so much of this beautiful country, of driving through sweeping vistas and embracing the unique, the delightful, the plainly odd. Meting

those new friends.

We have traveled Route 66 in the great comfort of Bertha. Even so, we've got an insight into what it must have been like for those earlier true go

Westerners.

The Santa Monica Pier, the end of Route 66. Nine days, eight states, one journey. And the one thing I've learned as we've made our way across

America is Route 66 is so much more than just the asphalt and the concrete. It represents the hopes and dreams of Americans on the move heading West.

And you'll want to come here and experience the mother road all for yourself because when you get out and meet the people, you realize Route

66, driving through a "World of Wonder."

(COMMERCIAL BREAK)

END