U.S. Stocks Plunge on Rate Rise Fears; Mark Cuban Warns Stocks Would Sink Under Trump; European Markets Mostly Lower; Cameron Says ISIS Might Be



Sink Under Trump; European Markets Mostly Lower; Cameron Says ISIS Might Be

Happy with Brexit; Apple CEO Heads for India; Inside China's Tech

Revolution; Investors Bullish on Amazon's Echo; Delta Wants to Hike Fares;

Clinton Looks to Break Sanders' Win Streak; Christie Whitman Says She'll

vote for Clinton Over Trump; Qatar Airways Increases Stake in IAG; Russia's

VTB Bank Reports Q1 Profit; HP Reveals Commercial 3-D Printers; Largest

Cruise Ship Docks in Southampton; UK David Cameron Joins Tinder to Target

Youth Vote. Aired 4-5p ET - Part 1>

Rivers, Samuel Burke>

Michael Bayler, Theodore P Weisberg; Brian Blair>

DOW and it comes after a double whammy of news suggesting the Federal

Reserve may be gearing up to raise interest rates. Are we going back to

Fed's rise rates and stocks go down? Mark Cuban, host of "Shark Tank,"

says if Donald Trump becomes president the stock market could tank. He also

says, Trumps unpredictability and lack of detailed policies would cause

chaos. A new opinion poll published in the "Telegraph" newspaper, says the

remain campaign is gaining ground. See a rare access to Britain's

parliamentary archives and the one act which first tied it to the European

Union. Tim Cook is arriving in India today for the first visit there as

the head of Apple. While Apple is facing a slowdown in China, sales soared

last quarter in India even though Apple hasn't got any stores there yet.

China's tech scene still has a long way to catch up to the likes of Apple,

but a new generation of entrepreneurs is looking to change that. Amazon is

proving that big tech still has room to grow. The company's latest plans

revolve around a little device that could bring that ecosystem into your

home. Now in this rule busting 2016 race for the White House the Democrats

are finding support in some unlikely places. Christie Todd-Whitman, the

former Republican Governor of New Jersey says she'll vote for Hillary

Clinton over Donald Trump. Qatar Airways announced it's moving into

Delta's turf with direct services from DOHA to Atlanta due to start June

1st. Russia is one of the countries that's been hit hardest by the fall in

oil prices, but Russia's second largest bank, VTB, announced it turned a

profit in the first quarter. In the 1980s, HP revolutionized printing with

its DeskJet. Now it wants to do the same with 3-D printing. The world's

largest cruise ship reached the English Port of Southampton on Tuesday

after the maiden voyage. Why does the world need a ship like this?>

Aviation; India; Apple; Donald Trump; China; Democrats; United Kingdom;

European Union>

[16:00:00] PAULA NEWTON, CNN ANCHOR: Some love it. Some hate it. This is the volatility that the market has been known for the last several months. U.S. indices are down sharply as trading comes to a close on Wall Street. Look at the red. It's been like that most of the day and gathering speed. It is Tuesday, May 17th. Mark Cuban warns there's been red ahead for stocks if Donald Trump takes the White House. We'll get the traders' view. World's largest airline says rising oil prices means it's time to hike fares. And swipe right to stay in the EU. David Cameron joins Tinder. I'm Paula Newton and this is QUEST MEANS BUSINESS.

Stocks have plunged on Wall Street as the market prepares for a rate rise that could come much sooner than expected. The DOW, NASDAQ and S&P 500 each closed off about one percent. As you can see there, the DOW slightly off its lows of the day but still looking quite poorly. It's the third session in a row that we have seen triple digit swings for the DOW and it comes after a double whammy of news suggesting the Federal Reserve may be gearing up to raise interest rates.

First strong inflation data here in the United States and then comments from the head of the Atlanta Fed saying next month's meeting should be considered in his words live. Paul La Monica joins me live. You know Paul, this market has been searching for some other paradigm. Just a few days ago we heard people saying, "Eh, you know, the Fed. We don't have to worry about the Fed anymore. We've already put in a rate hike towards the end of the year and now today this." I mean, is there a new paradigm emerging or is it just back to the same old thing? Fed's rise rates. Stocks go down.

PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: Yes. I think it's the same old thing, Paula. We still have the absence of a lot of major economic or earnings news this week. So I think investors may be grasps for straws trying to analyze every single word of the Fed members. A Fed meeting, I think always live no matter what they say, because it's always data dependent some point. My best guess is end of the year. And maybe the new president has, you know, an unwelcomed present of a Fed rate hike right around November or December after the election.

NEWMAN: Yes. In terms of when you look at the fundamentals of this market, though, if we go through the earnings season here, was there a lot to worry investors in there?

LA MONICA: I think that, you know, those who want to worry can find things to worry about. But, you know, we did have, you know, some concerning reports from a lot of retailers, which does potentially raise questions about the health of the U.S. consumer but outside of that you did have some better results from some big tech companies, so it is a mixed bag. I think the absence of any definitive trend is what is most concerning. It is still very difficult to figure out if this economy is going to pick up steam or not. It doesn't appear as if we're going to have an answer to that until later in the year.

NEWMAN: Yes, and the big spoiler could also be oil. We'll talk about it a little bit later. Oil up again today. If we really see huge volatility in that market on the upside, do you think there's more collateral damage to the market?

LA MONICA: I think so because you will have more people worried about what that does to things like auto sales and retail sales more broadly. The American consumer wasn't really out there spending like gang busters when gas prices were really cheap. It is hard to imagine how they do that if prices will start to rise more steadily.

NEWMAN: OK, Paul. We'll continue to check in with you. It's going to be a wild ride, we think, until November. We are going to actually be, Paul, going into a lot of the election scenarios. If you had to talk about it now, how much more is that election sentiment creeping into market sentiment, where they're looking at Trump and likely Hillary coming head to head and saying, lock, there are no dramatic moves here until we know the president we're dealing with?

LA MONICA: I think to a certain extent that is the case. I still believe that the market is expecting that Hillary Clinton will prevail. Whether or not that happens, obviously, we have six months before the general election. But I think, you know, you can't also ignore what's going to happen with the big congressional races, as well. I think the power of the president, while clearly important, is somewhat muted depending on what happens with the congressional landscape, as well. I think investors for the most part probably expecting more gridlock.

NEWMAN: So much to look forward, Paul.

LA MONICA: Exactly.

NEWMAN: Thanks so much. Appreciate it.

[16:05:00] Now, this volatility comes as two U.S. states go to the polls. Now, a billionaire businessman made famous by reality TV -- sounds familiar doesn't it -- is warning American voters don't elect a billionaire businessman made famously reality TV. The internet entrepreneur, Mark Cuban, says "If Donald Trump becomes president the stock market could tank." Cuban is a host on the show "Shark Tank." and the owner of the Dallas Mavericks of the NBA. He told CNN, "Trump's unpredictability and lack of detailed policies would cause chaos."


MARK CUBAN, OWNER DALLAS MAVERICKS: That uncertainty, you know, potentially as the president of the United States, that's the last thing Wall Street wants to hear. And I can say with 100 percent certainty that there's a really good chance we could see a huge, huge correction. It could be 20 percent. You know? Now with high frequency trading accelerating, you know, strong moves in any direction, it could be worse than that.


NEWMAN: Theodore Weisberg, founder and president of Seaport Securities at the New York Stock Exchange, so how about it? Is Mr. Cuban right?

THEODORE P WEISBERG, FOUNDER AND PRESIDENT, SEAPORT SECURITIES: Well, I don't know if he's a lot smarter than me and certainly he's a lot richer. But I don't know that he's right because I'm not sure that with all his money and experience that he has crystal ball. I'd be reluctant to make that prediction. I would say this. I think that a change in Washington is actually going to be a plus for the stock market no matter who gets elected because I think the public wants a change.

And I mean, if you want do get into the weeds a little bit, I think one of the first things we're going to see happen, no matter whose president, is that Federal Reserve monetary policy just isn't doing it for this economy. And zero interest rates don't seem to work and I think the prospect of perhaps a tax cut, corporate tax cut, and repatriation of all those offshore trillions of dollars, because of some tax holiday, is probably in the cards no matter who's going to be president. So obviously, I don't agree with him. I have -- I'm reluctant to make any predictions. But I think the change is actually going to be positive for the market no matter who it is.

NEWMAN: You know, that's an interesting perspective because you know it's an odd one. Most people say, look, it does matter who's in there. You're talking about employing more fiscal policy than monetary policy. Do you think that's something that the market wants? That the market will respond to that? Because you know what? When it comes to those trade deals it can go in a completely different direction.

WEISBERG: I -- can you repeat the question?

NEWMAN: I'm saying if we get into the weeds, fiscal verse monetary policy, the market better, you know, be careful what you wish for, right? Because a lot of that may deal with problems, even in the trade agreement that is we now know, and Mr. Trump is very vocal about it. And perhaps Hillary Clinton may be a little bit more vocal about that.

WEISBERG: Well, listen. We can't predict what the changes will be no matter who's elected. All I'm suggesting is that I think a new administration in Washington, no matter whose elected, is actually going to be a plus for the market because the U.S. economy by all definitions, you know, has been walking in the soft sand for eight years. And a Fed monetary policy of zero interest rates, clearly, I guess, you know, has worked a little, really hasn't has didn't the results that folks wanted.

Yes, we have a better stock market and the unemployment rate improved, but you still have all kinds of variations of that theme. But the U.S. economy continues to be sluggish and the world's economy too sluggish. So I think monetary policy has done just about all it can do. Now we need some real change and I think one of those possible changes is a corporate tax cut to really, you know, get some juice into the economy and to get all of these offshore dollars back into the U.S. now, that doesn't help the rest of the world, but certainly could help the U.S. and that would be good for the market.

NEWMAN: OK. Excellent, Ted. Thank you. And thank you for getting into the weeds. We like the weeds here on QUEST MEANS BUSINESS. It's a good place to be in the next five months. Appreciate it.


NEWMAN: European stocks, meantime, closed mostly lower Tuesday. Greek bank stocks rallied while auto stocks slumped. And in the meantime, the British Prime Minister spelled out what he calls the horrors, that's as he sees them, of Britain leaving the European Union. Now with the referendum a few weeks away, David Cameron said the Brexit is the result that would probably please Vladimir Putin and even the leader of ISIS. Earlier today he was warning business leaders about the economic uncertainty it would bring.


DAVID CAMERON, BRITISH PRIME MINISTER: I think when very respected organizations are saying as clearly as they are that output would be lower, growth would be less, unemployment would be higher, prices would be higher, we would see a hit to living standards, that there is a very clear consensus that leaving the EU would have not just a short-term effect on confidence and investment and growth, but actually would have a longer term effect, as well.


NEWMAN: Now, for what it's worth, a new opinion poll published in the "Telegraph" newspaper, says the remain campaign is gaining ground.

[16:10:00] Fifty-five percent of people saying they want to stay in the EU and 40 percent in favor of the so-called Brexit. Now sovereignty and the power to make laws are central to the Brexit debate. CNN London's Correspondent, Max Foster, gains now what we see a rare access to Britain's parliamentary archives and the one act which first tied it to the European Union.


MAX FOSTER, CNN LONDON CORRESPONDENT (voice-over): Often described as the most important room in Britain, the Acts Room. High up in the houses of parliament it's home to 64,000 documents covering some of the most important moments in British history.

(on camera): On these shelves are stacked truly ancient documents. Here we have some that are 500 years old. During the reign of Henry VII no less. Here we have the Weights and Measures Act of 1497.

(voice-over): But who currently creates new laws is at the center of the referendum over Britain's membership of the EU.

JOHN REDWOOD, CONSERVATIVE MEMBER OF BRITISH PARLIAMENT: How much we raise in tax, what taxes we impose and how we spend that tax is no longer under the control of the British parliament. In many respects under the control of the European union.

FOSTER (voice-over): Whilst others see giving up on aspects of control is part of a globalized world.

VICKY PRYCE, ECONOMIST: We have decided to do things in a certain way so far, which gives up some of the sovereignty, pulls sovereignty for particular reason, which are good for us and Europe as a whole.

FOSTER (voice-over): Remain campaigners are keen to cite that between 1993 and 2014, only 13 percent of British laws, such as the working time directive, came from the European Union. However, if you add up all of the EU regulations, including the ones that don't need to go through Parliament, like mobile phone roaming charges, those championing a Brexit argue that 62 percent of British laws have EU origins. But only one law was needed to make this possible.

(on camera): Well, here it is. This is the European Communities act of 1972. And this is the piece of legislation that signed the UK up to what was the European Economic Community and which we now know as the European Union and this really paved the way for all of those regulations and requirements that now apply in this country.

(voice-over): The UK does have an influence on those regulations. Equally so do the 27 other member states, which means Britain doesn't always get what it wants. If the country went it alone it could set its own laws but if it wanted to be part of the single market, it would have to adhere to EU rules with no say on how they're set. Sovereignty becomes a tradeoff between power and influence. These scrolls bear witness to changes in power and attitudes over hundreds of years but who has precedence over the laws in the future will be decided by the British people. Max Foster, CNN, London.


NEWMAN: Now, India's Prime Minister Narendra Modi, has been trying to strengthen his country's ties with Silicon Valley and now he'll be face-to- face with the biggest name in the business.


[16:15:13] Tim Cook is arriving in India today for the first visit there as the head of Apple. He wrapped up a trip to China and the company faced one of the worst ever financial quarters. While Apple is facing a slowdown in China, sales soared last quarter in India even though Apple hasn't got any stores there yet. CNN's new Delhi Bureau Chief, Ravi Agrawal, explains.


RAVI AGRAWAL, CNN NEW DELHI BUREAU CHIEF: Tim Cook has been to China eight times since he became Apple's CEO in 2011, but he hasn't visited India even once until now. India represents a major growth spot for Apple.

In the last quarter Apple recorded its first decline in global sales in 13 years. India was a rare bright spot with sales up 56 percent. One reason is that India has a fast growing smartphone market. In 2010, only 100 million Indians were on the internet. In 2015, that number jumped to 300 million. Most of that growth is coming from Indians who are discovering the internet not on pcs or Macs, but on smartphones, and there is still a lot of room to grow.

The world bank points out a billion Indians remain offline. That's why Apple CEO Tim Cook is bullish on India. But it's not all smooth sailing. Earlier this year, Apple sought government permission to sell refurbished iPhones to appeal to a broader section of the Indian market that permission denied.

There is also the fact that while Apple has 32 of the flagship Apple stores in China, it has a grand total of zero in India. And that's because the tech giant has struggled to comply with regulations to source a certain percentage of each phone's components locally. Lots for Tim Cook to mull while he's in India.

Among the people he's expected to meet are India's Prime Minister Narendra Modi. Modi has courted the support of top American CEOs as he tries to bring jobs and foreign investment to India. This is one meeting that any tech watcher would love to be a fly on the wall for. Ravi Agrawal, CNN, New Delhi.


NEWMAN: Now, China's tech scene still has a long way to catch up to the likes of Apple, but a new generation of entrepreneurs is looking to change that. Now as part of "CHINA'S TECH REVOLUTION," Matt Rivers visited a state sponsored hub for company start-ups.

MATT RIVERS, CNN CORRESPONDENT (voice-over): Playing the guitar is cool. And yet, Zhang Bohan calls himself a geek because he developed the app that helped teach him to play. The app is called "Poputar."

The app is called "Poputar", think popular guitar. A series of lessons on your phone shows you what to play. The guitar that comes with it connects to the app and lights up spots where you're supposed to put your fingers. And voila, you're Jimi Hendrix.

We met up with Zhang and his partner Zhao Yan in a cafE up the street from the office. Along with another partner, the trio hatched their plan back in 2014 around these tables.

He says this is where people with an idea, but no money, connected friends, or resources meet up. The garage cafe, where the next big idea is just one espresso away, is an incubator where people rent small space to help launch their tech companies. It's one of forty or so on this street alone, called "Innoway", a 200-meter stretch in northwest Beijing. More than 300 start- ups call this area home.

The Chinese economy is undergoing a broad transition, moving away from manufacturing and relying more now on services. In 2013, the Chinese government invested 36 million us dollars into this street, where startups dominate instead of, and say, steel. It's a sign that times are changing.

Liu Wei is at the forefront of that change. He runs legend star, a company that specializes in seed investment, the first round of fundraising. In other words, he helps start-ups actually start up.

He says 10 years ago, start-ups weren't big here because the investment community was very conservative. Few companies with the resources to invest in start-ups actually did so. But he says that's swiftly changing as more and more people realize that technology is the key to profits in the digital age.

He thinks the startup scene here will eventually rival and perhaps surpass the success of Silicon Valley. Back at Poputar, it's an exciting time. The app just went live this week. Zhang says he's nervous but confident. Surprise, surprise, he plays guitar to alleviate stress.

[16:20:00] (on camera): Teach me how to do this. Let's see if I can learn.


A few admittedly terrible notes later, it does get a bit easier. I might not be a star, but Poputar is aiming become one in the ultra-competitive app world part of a growing number of Chinese start-ups hoping to strike a chord with consumers. Matt Rivers, CNN, Beijing.


NEWMAN: Matt is clearly a braver correspondent than I.

Now all companies start small. Some grow into behemoths and learn about China's tech giants and the Chinese Tech Revolution on CNNmoney.com/Chinatech.

Now, back here in the United States, Amazon is proving that big tech still has room to grow. Company held an investor meeting today and shareholders had very little to complain about. The stock is up more than 64 percent over the past year. For years, Amazon invested at the expense of profits in cloud computing, in building its own devices and, of course, video streaming. It was all to get consumers into what it called the Amazon ecosystem. Now, the company's latest plans revolve around a little device that could bring that ecosystem into your home. CNN money Samuel Burke has more.



ALEXA: The time is 1:24.

BURKE: Alexa, when's the meaning of life?

ALEXA: The meaning of life depends on the life in question.

BURKE: Alexa, turn the lights on.

Apple has Siri. Microsoft with Cortana. Google has Now. Those voice systems live in your phone or tablets. Amazon's Alexa lives in your home.

She dwells in a series of amazon devices called Echo. Wi-Fi connected speakers with a microphone always listening for you to say the wake word. Alexa -- amazon's making a huge push into two different market trends with this device. Artificial intelligence as well as the internet of things. Projected to be a $14 trillion market by 2022. And even though Amazon doesn't disclose sales numbers investors are bullish on this sleeper hit.

ALEXA: Alexa, alarm off.

BRIAN BLAIR, CO-FOUNDER, GRAYS PEAK CAPITAL: What's interesting about this product is that Apple doesn't have one of these yet. There's rumor that Google is going to actually introduce theirs in the next month or so, and Apple may end up doing something like this. but this is the truly first smart home hub that we have seen that people are using, and it's getting great reviews and it really just makes sense.

BURKE: What's unique about the Echo is you don't have to be nearby to hear you. You can be in another part of the house, or on the other side of the room and it will still pick up your voice.

Alexa? Who won the Warriors game last night?

ALEXA: Last night the Warriors beat the Trail Blazers 125-121.

BLAIR: It's making the home and the family more acquainted with everything that Amazon offers and so that's where the opportunity is.

BURKE: Alexa, I want to hear some Coldplay songs.

ALEXA: Shuffling Coldplay from Prime Music.

BURKE: Just like Amazon's other hardware products, they're always trying to entice you to pay for Prime.

Alexa, turn the volume up.

Placing an internet connected microphone in the middle of your house may leave some with privacy concerns. Amazon says echo will only start listening once you say, "Alexa" and the light indicates this it's all ears.

Though a curious reporter with "Gizmodo" asked the FBI if it had ever wiretapped with the Echo. The FBI would neither confirm or deny that to "Gizmodo." Amazon told CNN it doesn't comment on speculation. And instead of apps, Amazon says the Echo has skills. Over 1,000 of them. And services from companies like Uber, smart home devices and news updates from CNN.

Alexa? Who is CNN's Samuel Burke?

ALEXA: Sorry. I can't find the answer to the question I heard.

BURKE: Clearly artificial intelligence still has a way to go.


NEWMAN: Oh, you describe that as artificial intelligence too. Now, Samuel, you know that I'm a gadget phoebe and I'm holding a little speaker. I know. Look, look. I'm the skeptic here. You know that I'm always going to say Amazon is not at great at hardware like this. Why would this be any different?

BURKE: They've had a hit with the Kindle. Then a huge flop with the Amazon Fire phone. And usually when I report on the internet of things, Paula, internet connected devices, a lot of times I just find that they're useless. But this is actually useful and it actually started to make sense to me, a lot of other smart devices I reported on. For instance, the smart lightbulbs and never thought what will I do with a smart lightbulb? Why connect to the phone?

[16:25:00] But now that I connected lightbulbs to the Alexa and I can just walk in the room and say, "Turn on the lights," as you just saw. It really started to make me realize why the market has that huge trillion-dollar evaluation. A lot of other stuff starts to makes sense and this product really has a lot of room to grow in I think.

NEWMAN: Well, let's see what it actually does, because we're going to come right back here in a few years, Samuel, and we'll see if this gadget actually made it into people's homes.

BURKE: It going to have our jobs, Paula.

NEWMAN: If it tells me where my son's homework is, Alexa can have the job. OK.

BURKE: She'll do the homework for you.

NEWMAN: That's a good point too. Well, we'll get into that another day, Samuel. Appreciate it as always. Thanks, Samuel Burke.

As fuel prices rebound, Delta says airfares may increase, surprise, surprise. We'll be back with more.


[16:30:00] PAULA NEWTON, CNN ANCHOR: Hello, I'm Paula Newton. Coming up in the next half hour of QUEST MEANS BUSINESS, the chief executive of HP shows me the company's brand new 3-D printer and I'll ask Royal Caribbean about the world's largest cruise ship as it finally goes the sea. Before that, though, these are the top news headlines we're following this hour.

At least 46 people have been killed in 3 attacks across Baghdad on Tuesday. ISIS is claiming responsibility for a car bombing that killed 24 people in the area known as Sadr City. Follows a series of ISIS attacks in the Iraqi capital just last week.

The U.S. and Russia are promising to strengthen the fragile truce in Syria. But talks in Vienna didn't do much to revitalize that peace process. World leaders failed to agree on a schedule of further talks. U.S. Secretary of State John Kerry suggested finding a way forward would be a challenge.


JOHN KERRY, U.S. SECRETARY OF STATE: A variety of competing interests are going to have to be reconciled and those involved in this conflict with competing agendas are going to have to be willing to prioritize peace.


NEWMAN: Some disturbing video of Kenya. The country's chief of police says he wants an investigation after officers were shown beating and kicking a man after he fell to the ground. It happened on Monday during a protest in Nairobi. Police had moved into the area to disperse a group of protesters.

Thousands of oil workers have been evacuated from northern Alberta in Canada as huge wildfires move closer to oil sands installations there. The fires are likely to affect oil production in the region. The premier of Alberta praised the oil companies for getting their work earls to safety.


RACHEL NOTLEY, ALBERTA PREMIER: At this point the fire's not moving north. It is moving towards the east so we're told that it's not a significant concern, but that being said, as we saw with the original evacuation the oil and gas industry was remarkable in terms of their ability to air lift 15,000 residents of Fort McMurray out of their camps through air. And so they assure us that they're more than able to evacuate the remaining roughly 6,000 folks who are on very temporary basis moved further north.


NEWMAN: Hillary Clinton is trying to close the door on Bernie Sanders and bring the Democrats primary contest to a close. Now, voters in Kentucky and Oregon are at the polls today as we speak. Clinton is making a push to try and hold Sanders momentum after he won a string of late-season victories. According to CNN estimates, even if Sanders wins all the remaining pledge delegates it wouldn't be enough to stop Clinton from becoming the Democratic nominee. Still his campaign hasn't shown signs of getting out of the race and conceding to Clinton.

Now in this rule busting 2016 race for the White House the Democrats are finding support in some unlikely places.

Joining me now is Christie Todd-Whitman, the former Republican Governor of New Jersey. I said Republican Governor of New Jersey. And she says she'll vote for Hillary Clinton over Donald Trump. And Governor, you know, many people will think that you are traitor to the Republican Party for even thinking of it.