Theresa May To Be Next British Prime Minister; May Expected to Follow Through on Brexit; Osborne Meets with Wall Street Investors; U.K.'s

MEANS-BUSINESS-01

BUSINESS-01

Follow Through on Brexit; Osborne Meets with Wall Street Investors; U.K.'s

Boeing Deal Will Create 2,000 Jobs; Virgin Atlantic Unveils Airbus Order;

Officer Shot at County Courthouse in Michigan; Venezuelans Go to Colombia

For Food, Supplies; UFC Franchise Sells for $4 Billion - Part 1>

Monica, Nick Parker, Jose Pagiliery, Paula Newton, Isa Soares >

after her final opponent, Andrea Leadsome, stepped aside. Despite being a

remain supporter, Mrs. May said she will indeed, lead the United Kingdom

out of the European Union. Virgin Atlantic says it will maintain a strong

presence in the U.K. It comes as Virgin announced plans to buy 12 A350

planes at a deal with a price tag of $4 billion. The markets had a strong

day, the Dow was up very sharply amid the uncertainty on Wall Street. The

S&P 500 hit an all-time high on Monday. Shares of Nintendo aren't just up,

they're rocketing. Powered by the force of the Japanese electronics

company that released a new smartphone game featuring characters from the

franchise Pokemon. Thousands of Venezuelans have crossed into Colombia on

Sunday, desperate to buy food and supplies, as Venezuela grapples with a

severe shortages of basic goods. President Nicholas Maduro temporarily

opened the border to offer access, so things like medicines and groceries

could be obtained. Portugal stunned the world of football by defeating

host France, and they won Euro 2016. The first time the country has ever

won a major football title. If you combine boxing, wrestling, martial

arts, and a fighting cage called the octagon, put it all together, and

seconds away you have the UFC, the Ultimate Fighting Championship. It's

just clinched a $4 billion sale. >

Government; Sports; Electronics; Technology; Treaties and Agreements>

[16:00:00] RICHARD QUEST, CNN ANCHOR: There's the bell ringing on Wall Street. Dow jones industrials having a very strong session, up the best part of 85 points. I've got a good feeling about today's gavel. Yes, look at that. A robust gavel on Monday, it's July the 11th. The U.K.'s next prime minister pledges to crack down on corporate excess as the chancellor of the exchequer is busy wooing Wall Street.

Thousands of Venezuelans are crossing the border. It's a desperate attempt to search for food. We're live in Caracas.

And fictional characters give Nintendo shares a real boost. Pokemon Go is taking the gaming world by storm. We start a new week together. I'm Richard Quest in New York, and of course I mean business.

We'll have our business news agenda in just a moment. But there is some breaking news to bring to your attention. We are following the breaking news from the state of Michigan, where shots were fired at the Berrien County courthouse. It's in St. Joseph in Michigan, you can see it there by the lake. We know that a police officer has been shot. The governor of Michigan has tweeted about the situation, saying Michigan State Police have secured the scene at Berrien County courthouse and started its investigation into the shooting that occurred this afternoon. That's a tweet from Michigan Governor Rick Snyder, confirming the police have the situation under control. They've started to look into exactly what happened. Those are, frankly, all the details we have at the moment. When we do have more to bring you, including of course the condition of the police officer, then I'll bring it immediately to your attention. Of course it has to be seen in the events the shooting of recent days, with the murders of five Dallas police officers.

While we wait for more details, allow me to most of on to our nightly agenda on business and economics. Britain will have a new prime minister in just two days. The current incumbent, David Cameron, says he will resign on Wednesday after the race to succeed him came to an anticlimactic end. Theresa May has been named the leader of the Conservative Party after her final opponent, Andrea Leadsome, stepped aside. Despite being a remain supporter, Mrs. May said she will indeed, lead the United Kingdom out of the European Union. And she said from that a new Britain will emerge.

(BEGIN VIDEO CLIP)

THERESA MAY, UK CONSERVATIVE PARTY LEADER: We need a strong, new, positive vision for the future of our country, a vision of a country that works not for the privileged few, but that works for every one of us. Because we're going to give people more control over their lives. And that's how together we will build a better Britain.

(END VIDEO CLIP)

QUEST: Theresa May. Joining me now from London is CNN political contributor Robin Oakley. I listened to Andrea Leadsome, what she said. Basically she realized she didn't have much of a hope of getting -- she was never going to win. And so rather than put the Tory Party through this, she decided it was best to just basically let Mrs. May have it. That's probably wise from the Tory Party's point of view, isn't it?

ROBIN OAKLEY, CNN POLITICAL CONTRIBUTOR: It's a great advantage from many people's point of view, Richard. Everybody have been saying why do we have to have this contest within a party, the party activists, dragging on for nine weeks through to September the 9th, when the whole country was desperate to have a clear leader of the Conservative Party, who was also prime minister, Richard.

QUEST: But the thing that struck me about it, we'll talk about Theresa May's views on business in just a moment, the thing that struck me, Robin, was every opportunity, she says Brexit means Brexit. No EU by the backdoor, no way of willying our way to stay in, and no second referendum. Does she mean it?

OAKLEY: Yes. I think she does mean it. And of course it suited her political campaign initially, because she had been a remainer, though a very quiet one in the campaign. She needed to convince all those Tory activists who tend to split about 60/40 as leavers rather than remainers, she needed to convince them she really was going to deliver the Brexit that the country had voted for. We'll see that probably reflected to a degree in the cabinet positions that she names after Wednesday evening.

QUEST: She says she's going to announce a Brexit unit, which will be led by a leading Brexiteer. Any idea who that might be?

[16:05:00] OAKLEY: No, not as yet. It would probably be one of those who had played a prominent part in the campaign. It could even be Andrea Leadsome after this. She paid tribute to her -- Theresa May paid tribute to her dignity in making the announcement today. Although of course there's not perfect blood between the two of them, Richard.

QUEST: And as for David Cameron, last week or two weeks ago when he rounded on Jeremy Corbyn, he said, I've got two months left in this job, basically. He hasn't got two months. He's got two days. How do you think, from what you're hearing at Westminster, he is feeling about it tonight?

OAKLEY: He almost rushed out into Downing Street to announce these arrangements, far quicker than we expected him to do. Normally these things are done with a bit of style and substance. He just sort of shot out of the door at number 10, there were just a small group of us journalists there waiting, to announce the timetable for getting out. Obviously, he had done that in some consultation with Theresa May and it couldn't go on for too long, but you got the impression, really, that he couldn't wait to get rid of the place. Of course he announced some time ago, when he announced his impending resignation, that he wasn't going to take any more of the big decisions, that those would all be for his successor, so there wasn't any point in him hanging around, Richard.

QUEST: Robin Oakley, in London and in the days and weeks ahead, Robin, we'll, obviously, be looking at the question of what this all means for the other European countries. How they're likely to react to the new British prime minister. Thank you, Robin, nice to have you.

And the newsletter tonight, the "QUEST MEANS BUSINESS" newsletter, which arrives in your e-mail in-box any time around right now. You can subscribe to it the QUEST MEANS BUSINESS newsletter and it's CNNmoney.com/quest. Today I'm writing about Theresa May's views on capitalism, because she said in a speech earlier in the day that -- Theresa May said in a speech that she wants to put the Conservative Party at the service of working people. One way she hopes to do that is to curb corporate excess. Among her proposals, Mrs. May wants consumers and employees to sit on corporate boards.

She wants more transparency such as publicizing the ratio between the chief executive's pay and the average company employee. And she wants to make shareholder votes on corporate pay binding, not just advisory. So all this from a Tory. Sounding remarkably socialist or social Democratic in terms of policies. Switzerland, the Netherlands, Australia, Belgium, and France all have some sort of binding say-on-pay for shareholders' votes. The 2015 study found little change in corporate compensation in Switzerland despite the law. I spoke to the conservative MP Nigel Evans, who supports Mrs. May's proposals. He was in the leave camp. He says he's confident that she will now follow the will of the Brexiteers.

(BEGIN VIDEOTAPE)

NIGEL EVANS, CONSERVATIVE MEMBER, U.K. PARLIAMENT: One of the reasons why I fought the leave campaign was I wanted to see the United Kingdom leave the European Union in its entirety. I don't think Theresa May could be any clearer than the way she has said that Brexit means Brexit and we're going to make a success of it. And that's what she wants to do.

QUEST: She's raised some very interesting questions about corporate governance, corporate pay, shareholder involvement in the setting up of it. Let me go through some of them. If -- we're going to have not just consumers represented on company boards but employees as well. Shareholder votes on corporate pay must not just be advisory but binding. Bosses' incentives must be better aligned. This is going against the core, traditional conservative voters, and big business. Does she have your support in this?

EVANS: Absolutely. What Theresa gets is the fact that there are a lot of families out there, working families, they get up early in the morning, they work five, six, maybe even seven days a week, particularly the self- employed. And they're hurting. The wealth that has been created, which is certainly being enjoyed by a small minority of people, isn't being spread out throughout the whole country.

[16:10:00] That's one of the reasons, Richard, why the northwest and the northeast of England voted in large numbers to leave the European Union. They were crying out. It was a message that I believe was lost on the government.

QUEST: Then there's going to have to be wholesale changes in economic policy to reflect that, which perhaps arguably the Cameron/Osborne government did not do. Because what she is espousing is what we might call a one nation Toryism, but she's saying the inequality is rife.

EVANS: Yes, and she's absolutely right. We have to give credit to David Cameron and George Osborne, the chancellor, for introducing the national living wage, which meant that clearly more people were earning more money guaranteed in their pockets. And indeed, that the rates of taxation were going down, so they were able to keep more of that money. But at the same time, there's recognition by Theresa that still there are too many people being left behind, and you're quite right, there's going to have to be a fundamental change.

QUEST: Do you have a wry smile at the irony that some of the policies that she's talking about, employee involvement on corporate boards, binding votes on executive pay, and CEO pay, this is all, Mr. Evans, dare I use the phrase, very European.

EVANS: Well, you know, sometimes when Europe does things right, you should adopt those practices. But when they do things wrong, you should ignore them. The problem with being in the European Union, of course, is that in many cases we just had to sign up with whatever was going on.

(END VIDEOTAPE)

QUEST: That is Nigel Evans. Now the crackdown on executive pay comes as the chancellor of the exchequer, the finance minister, is wooing Wall Street. George Osborne visited New York on Monday. He met Wall Street investors. The first of a series of trade missions to key finance and political centers. The other destinations where he's going are Singapore and China later this month. Those are crucial ones, because they are new markets where of course they are hoping to take up the slack from business from the European Union.

Brussels, he'll be going to talk with EU finance ministers. And lastly the British Secretary, Sajid Javid began talks have begun with India. All about trying to prove that Britain can create new trade relations with the fastest growing economies of the world. Mr. Osborne told Fareed Zakaria, that the country must build its economic ties with the world as it prepares to leave the European Union.

(BEGIN VIDEO CLIP)

GEORGE OSBOURNE, BRITISH FINANCE MINISTER: We've now got to make that work for Britain. And I think the best way to do that is to make it clear that the result is not the result of a country that wants to turn in on itself or become less tolerant or not face out to the world. Rather, this is a Britain that wants to be a global player. That wants to make sure our economic fruits are shared more widely across our nation. That wants to shoulder its responsibilities beyond our own continent. We are, yes, leaving the EU. We are not quitting the world.

(END VIDEO CLIP)

QUEST: Now, the chancellor says it's entirely Theresa May's decision whether he remains on as finance minister. You can see his full interview this coming Sunday at 2:00 a.m. and 12:00 p.m. in London "FAREED ZAKARIA GPS."

The aviation industry has gathered in Farnborough, England for one of the world's premier air shows. The outgoing Prime Minister, Mr. David Cameron was there. He was aiming to sell a bid to the message that Britain is open for business. That includes a big deal with U.S. aircraft maker Boeing, which will bring 2,000 new jobs to the U.K. speaking at the air show before announcing he was stepping down on Wednesday. Mr. Cameron said it was in Britain's fundamental interest to remain close to the EU.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: As for our European relationship, there is a huge amount of work to be done. Complex issues to understand and crack, and a negotiating mandate to draw up. The big strategic decisions are for the next prime minister. But the groundwork is under way. And all I would say about the outcome is this. I believe it's in our fundamental, national, and economic interests to remain very close to the European Union. For trade, for business, for security, for cooperation. So let that be our goal. So the right relationship with Europe, higher productivity, more exports and inward investment, these are the things we have to get right. And they will require a massive national effort.

(END VIDEO CLIP)

QUEST: Prime minister, Brexit or no Brexit, Virgin Atlantic, the airline that's 49 percent owned by Delta, says it will maintain a strong presence in the U.K., not surprising since it's based there. It comes as Virgin announced plans to buy 12 A350 planes at a deal with a price tag of $4 billion. CNN's Hannibal Jones spoke to the company's chief executive, who was from Farnborough, and asked him what else is on the shopping list.

(BEGIN VIDEOTAPE)

[16:15:00] CRAIG KREEGER, CEO, VIRGIN ATLANTIC: It's a very exciting day for Virgin Atlantic today, Hannah. We're really happy to be out of the air show to be able to celebrate our order of 12 A350-1000 aircraft. It all is about the future. We have incredible confidence in the future for Virgin Atlantic and the opportunity to take a new airplane that will be great for customers and is so much better for the environment, both from a noise and emissions standpoint, and a fuel efficiency standpoint. It really is an exciting day for us.

HANNAH VAUGHAN JONES, CNN ANCHOR: You said before that greener, cleaner, and quieter is the priority. Why is the environmental impact of so much importance to you?

KREEGER: Well, virgin, as a company, Virgin Group and Virgin Atlantic have always stood for being part of the communities that we are investing in. And being able to lower our carbon emissions, while flying customers to wherever they need to go is a big part of what we think our responsibility is. This airplane, like I said, is a big part of our future in that regard. It saves about 50 percent of noise from the aircraft it's replacing and 30 percent of fuel. Between both of those things we think we can make the world a better place.

JONES: Just in the last half hour or so we've been hearing from David Cameron, the British Prime Minister, he's there at the same air show as you. He's been saying the new reality now is Brexit and we have to make it work. Do you think it can work for the aviation industry?

KREEGER: Look, it doesn't matter what I think about Brexit. My job to do and our team's job to do is to find opportunities when things change. And the world, while it may change the way in which we interact with other parts of the world, there isn't any question that continuing to carry goods and services to and from the U.K. will be part of what Virgin Atlantic is doing under any scenario. We're all about moving forward and moving forward positively.

JONES: The order backlog for a lot of these new aircraft is actually enormous. Are you concerned that some of these deals, including the deal you've struck with Airbus itself, might be put on the back burner at all, or that it might not actually follow through?

KREEGER: No, we're very confident, and we've worked with Airbus many times before, but we're really confident. This airplane begins coming into service for us about 2 1/2 years from now, in early 2019. And will come through, the 12 airplanes come from 2019 to 2021, and they fit exactly when we need them to replace some of our older aircraft. We're absolutely thrilled with it and very confident in its delivery.

(END VIDEOTAPE)

QUEST: Craig Kreeger on Virgin Atlantic. On the markets, an historic high for the S&P 500. All the signs of investor uncertainty are remaining. We'll discuss the big signals on Wall Street in a moment.

(COMMERCIAL BREAK)

QUEST: Welcome back. The markets had a strong day, the Dow was up very sharply amid the uncertainty on Wall Street. The S&P 500 hit an all-time high on Monday. A record intraday of 2140. Previously it was 6 points underneath that. Today it finished at 2137, so were talking about the intra- and an all-time close.

[16:20:00] Paul La Monica is at the New York stock exchange. What is driving markets to reach these sort of levels at the moment? This is what everybody is really not perplexed about, because we know there's been cheap money, but this continual push forward in the absence of certainty.

PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: It is amazing, Richard. I think that the expectation is that cheap money will continue in light of that jobs report on Friday. It was good but not so strong, there were some caveats. People feel that the Fed will be on hold a little while longer. Brexit fears, amazingly, are starting to fade even with the news today of Theresa May who will be taking over from David Cameron, not a surprise, obviously, since Boris Johnson took himself out of contention. So I think right now you have this perfect market environment where they're not really being surprised by anything in a negative way. Any surprises you get, like a jobs report, is a positive one.

QUEST: We're about to enter an earnings season, aren't we, just getting under way. Alcoa has reported earnings, and I see the stock is up after hours. What are we expecting for this earnings season?

LA MONICA: It's not going to be a great one, Richard. We're expecting another year over year decline for quarterly profits. I think the best that investors are hoping for, and this might be good enough, strangely, to drive stocks further higher, is that longs big companies don't warn that the rest of the year, 2017, are going to be dismal, that could be good enough. There's expectation that the third and fourth quarter, we might finally see a return to growth. We only have a small sample size so far. Pepsi last week, for example, big in the U.K., also Walgreen's, neither of them warmed because of the problems in Britain.

QUEST: Right, but when we're talking about this earnings season, obviously it's the second quarter, are we talking about the scenario where the market is expecting bad news, so if it's merely poor, you get a pass, if it's not really bad. Expectations are so low that if you do merely do OK, you will be considered to have won the game.

LA MONICA: I think that is a great point. No one is expecting profits to grow for the entire S&P 500. So your kind of throwing away these second quarter results. But if people warn that the third quarter is also going to show earnings falling, that would be very bad news. We need to see growth again.

QUEST: Right, but thank you Paul, but to put it, Alcoa says it's earned $135 million or 9 cents a share in Q2 compared with $140 million or 10 cents a share a year ago. The numbers are down, but the trend of course is not as bad as it could have been, I guess is what you're saying.

LA MONICA: Yes, the profits did top forecasts. They are obviously a commodity-centric company so no one expected them to report an earnings increase. They weren't as bad as expected.

QUEST: Paul, nice to see you at the exchange, looking good there, thank you, sir.

Across Europe markets also closed in the green. The FTSE continued the recent rally and boosted by the weak pound. This time it was the DAX that put on the most weight, up 2 percent. Investors reacted to the news that the uncertainty over who was the next PM was over. Japan's Prime Minister Shinzo Abe won the elections on Sunday and increased hopes for more fiscal stimulus in Japan. It's been a horrible time for Burberry. The British fashion retailer has replaced its chief executive, Christopher Bailey. The shares closed 4 percent higher on the announcement. Questions were raised during Bailey's reign when he missed profit targets in the stock lost more than 30 percent over the past year. Now he will remain. Mr. Bailey says the creative director. The new chief will be Marco Gobbetti, the luxury French brand Celine, chief executive. He takes over next year.

Shares of Nintendo aren't just up. They're rocketing. Powered by the force of the Japanese electronics company that released a new smartphone game featuring characters from the franchise Pokemon. It is a smash hit. People are talking about it. They're doing it. The shares are up 9 percent on Friday. They are up nearly 25 percent on Monday. CNN's Nick Parker explains how people search for Pokemon characters in the real world around them, all part of this somewhat extraordinary game.

(BEGIN VIDEOTAPE)

NICK PARKER, CNN CORRESPONDENT: this is New York's iconic Central Park. Built in 1858, it's known for hot dogs, its horses, and now, it would seem, a host of brightly colored Pokemon characters just waiting to be caught. Just days after its release, Pokemon Go has captured the imagine imagination of some people enjoying a stroll.

[16:25:03] UNIDENTIFIED MALE: I haven't seen anything that comes close to it. There's been other GPS games, but there's never been one this popular or this in demand.

UNIDENTIFIED MALE: This is my first time actually playing the game, because I have time. I'm just surprised how -- it's virtual, how the reality, it's like it's right in front of you.

PARKER (voice-over): The engrossing nature of the game has given rise to a series of bizarre events around the world. These gamers from New Zealand hide a kayak to get to a Pokemon gym which happened to be out on Lake Wellington. In the United States, one user uncovered a body while following the game. And four suspects were arrested, accused of lying in wait for gamers and then robbing them at gunpoint. User awareness of their surroundings is one potential issue.

UNIDENTIFIED MALE: It's like hard to pay attention. I was walking in my backyard and my dog jumped out at me. I thought it was Pokemon.

PARKER (on camera): A little worrying.

UNIDENTIFIED MALE: A little bit.

PARKER (voice-over): But some of the benefits are also clear.

UNIDENTIFIED MALE: It makes me more proactive. Oh, I'll do X, Y, Z in one Go. Now it's I'll go to a shop that a few block further.

PARKER (on camera): is it helping you get fit?

UNIDENTIFIED MALE: Yes, definitely. You know, I saw, I mean, it was like the NFL has trying to get kids fit for 20 years and Nintendo did it in 24 hours.

PARKER: So the game getting users off their sofas and out into their neighborhoods to explore. By any measure this is a huge step forward for augmented reality, giving Nintendo a much-needed shot in the arm as investors are very stable of other much loved characters for future potential. Nick Parker, CNN, New York.

(END VIDEOTAPE)

QUEST: CNN's Jose Pagliery is following the story. He found his favorite Pokemon character at his desk. Jose, look, I think in the interests of conflict of interest, we need to declare you're a geek on this.

JOSE PAGILIERY, CNN MONEY CORRESPONDENT: A little bit, sure. Look, I'm 30 years old. I was part of the generation that grew up with the trading cards and the video games and the TV show. What we have here is a huge step forward for Nintendo, because they've managed to take this, the old game, right, Gameboy. This little cartridge, and now it's on your phone. And it's not just that. It's that augmented reality projects these creatures into the real world. It's a huge step forward. When people talk about virtual reality, an augmented reality in real life being a success, this is the first iteration of that kind of thing.

QUEST: Ok. I'm going to so regret this question, my ignorance level.

PAGILIERY: Go ahead.

QUEST: You start off and you're walking around, and just to prove, I'm not advertising one over the other, you're walking around and you see these Pokemon thingamajig's whatsits names, what do you do?

PAGILIERY: You try and catch them.

QUEST: What do you mean you try to catch them. They're not real. I'm sorry to disappoint you, Jose, they're not real.

PAGILIERY: Hey, look, real life might be a digital projection. There are theories about that too. Anyway, so look, you throw these balls at them. You try to catch them and then eventually you try to fight them. That's what the Pokemon world is. And it's really neat because what this game does it lets you explore your neighborhood. One of the things I found most fascinating, while trying this out myself, was that whoever is taking pictures for this game, they've mapped it out to real maps, OK, across the world. I can look up and see etches on a statue somewhere, I can see real life things that appear in the game. It's real life meshing with digital life. It's making people get off the couch.

QUEST: What are you looking at? You're looking at a real picture -- are you looking a camera picture of the place?

PAGILIERY: Well, it's a mix, right? You see your character walking around this virtual world. But when a character appears, when a Pokemon appears nearby you and it actually works with your map to tell you that, then you can see through the camera, you can see a Pokemon next to a tree or on a bench or on the floor.

QUEST: Why doesn't the camera say, careful, there's a railway line ahead of you, careful, there's I-95 or the M-1 motor way right in front of you, and you might actually want to think twice about that, because you're about to fall down a ditch.

PAGILIERY: You know, It's fair to say, and it's the first iteration of this. When you start the game, it actually warns you to be careful about your surroundings. Look, we're going to have mistaken, because that's real life, right? Any game that gets you off your couch, you're going to have things happen to you that aren't on your couch. Now it's worth noting that just in the last few hours, a bit of dark news for Nintendo and the maker of the game Niantic, because we've found that the permissions that it asks for on your phone for you to play the game, it actually lets these companies read all of your Google accounts. So it's your photos, your e- mails and everything else. We're trying to still figure out whether this is a mistake on the part of the companies that built this game or not.

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