Dow Closes at New Record; Gray out of Running for Treasury Secretary; Trump Sidesteps Conflict of Interest Questions
RICHARD QUEST, CNN HOST: The Dow Jones is at another record as indeed is the S&P 500. Over 19,000 for the Dow. No record for the Nasdaq. And a good strong gavel to bring trading on Wall Street to a close. It is Wednesday, it's November the 23rd.</s>QUEST (voice-over): Tonight, a billionaire's row on Pennsylvania Avenue. Donald Trump adds a mega donor to his cabinet. The leaves are changing color and so are Britain's growth forecasts. The chancellor's autumn statement in the red. And police raid Samsung headquarters as a corruption scandal spirals ever deeper. I'm Richard Quest, live in the world's financial capital, New York City. And I mean business.</s>QUEST: Good evening. Before we get to Donald Trump and his transition and the latest movements, I do need to update you on the markets. As I said at the beginning, there are records in some, not so in others. But it was still a bullish day as you will see if you will join me at the big board over here. The markets started the day down and it tootles through the morning. Not quite sure why it remains low in those early hours but then it picks up steam in the afternoon. And we get the Fed minutes and those minutes show that interest rates are going up but the market takes it in its stride. The Dow was up some 58 points at 19,082. Only question whether 91 is on the horizon. The S&P is also at a record. That eked out just barely a small record for the broader market. But the Nasdaq slipped back just a tad. And I think what you're looking at here is just a certain profit-taking and a bit of book balancing with the Nasdaq. Now as I mentioned about the Fed minutes, from the last Fed meeting, most committee members now think that rates could rise relatively soon. That is the word that the chair of the Fed, Janet Yellen, said. And if you look at what the Fed minutes say, that is borne out by most voting members, which seems to be, of course, suggesting that a rate rise in December. I think it's something like 80 percent of Fed economists or those economists who follow the Fed now believe that rates will go up a quarter of a point at the December Fed meeting. Not a done deal but certainly as you heard from Stan Fischer on this program earlier in the week, the numbers certainly make it justifiable. The other news we're following tonight, as Donald Trump begins his Thanksgiving holiday, his administration is taking shape. The transition team has confirmed two new additions to the Trump cabinetry. We already know Reince Priebus is the chief of staff, Steve Bannon is the chief strategist. Neither of those need to be confirmed by the Senate. They are in the gift of Donald Trump himself. However, he did announce Governor Nikki Haley of South Carolina for the ambassador of the United Nations, the first woman to join the cabinet and the first member of a minority. She's Indian by descent, has joined. Interestingly the appointment of Nikki Haley, she has no foreign policy background really to speak of and she traded insults with Donald Trump in the past. And she didn't support him in the nomination process. But she did get the -- she will be before the Senate to be ambassador to the United Nations. A few hours later, Betsy DeVos has been announced, she's a billionaire and a school choice activist. She has accepted the post of Education Secretary and that has been somewhat controversial because she is a large donor to the Trump campaign. She is a billionaire in her own right and the question becomes whether or not this is truly revolutionary change and draining the swamp, if you appoint large donors. Other announcements expected: an announcement is supposed to be forthcoming that Ben Carson, who was a strong contender during the primary process, is to be announced as the housing secretary. He wrote that he can contribute to making inner cities great for everyone. And as for the U.S. Treasury Secretary, that's one of the big five, there it is likely to be Steve Mnuchin is the Treasury Secretary. Apparently he's the only person that's on the short list after Jonathan Gray of Blackstone ruled himself out and served --</s>QUEST: -- but Steve Mnuchin served as the Treasury -- served as the campaign finance chairman and therefore is in pole position. CNN's Jim Acosta is at the White House, our senior -- beg your pardon, Jim, you're with me here in New York. My apologies.</s>JIM ACOSTA, CNN SR. WHITE HOUSE CORRESPONDENT: Yes, sir.</s>QUEST: But you are still the White House correspondent but you are in New York -- you should be in Florida. You missed the ticket.</s>ACOSTA: I tell you. Well, you know, this was one flight I did not want to catch. I'm trying to get home for Thanksgiving for at least one day off.</s>QUEST: Right and well deserved, if I may say. All right. So we have got these two. Nikki Haley, no experience of foreign policy. Betsy DeVos, a billionaire, a major contributor to Donald Trump. What will political Washington make of those appointments?</s>ACOSTA: Keep in mind, Richard, Republicans will say Bill Clinton was the governor of Arkansas, he didn't have a wealth of foreign policy experience, he was elected president. George W. Bush was governor of Texas, did not have a wealth of foreign policy experience, was elected President of the United States. So sending Nikki Haley to the U.N. is obviously less than being President of the United States and keep in mind the Trump transition team was looking for somebody who could send a message, not only to the United States but the rest of the world that Donald Trump can get outside of his comfort zone and even bring into his inner circle somebody who is a harsh critic. And Nikki Haley, as you said, she's the daughter of Indian immigrants, also sends some diversity not only into this cabinet level position but to represent the United States around the world. And so they're very excited inside the Trump transition team about this pick; they say that's sort of a pressure reliever for a lot of Americans, who were very concerned about Donald Trump being president.</s>QUEST: Now as for Betsy DeVos, the Education Secretary, the criticism I've seen today -- it was quite quick out of the gate, he's appointed a major donor.</s>ACOSTA: That's right. There is that. And so whatever happened to drain the swamp, as Donald Trump and his crowds like to say over and over again. And also keep in mind -- and this gets a bit wonky -- Betsy DeVos used to be linked to Jeb Bush. Jeb Bush was a champion of what they call Common Core standardized testing here in the United States. If you have children in public schools in the United States, this is something that makes you want to pull your hair out. They do so much standardized testing in the public schools now, that is linked to this Common Core push. Betsy DeVos had to put out a tweet today, Richard, saying that she is not in favor of Common Core testing. That is going to be a relief to people inside the Trump transition because Donald Trump, time and again out on the campaign trail, railed against Common Core, saying that he was going to get rid of it. And so she presents a couple of different complications for Donald Trump. But those complications are not expected to get in the way of her confirmation.</s>QUEST: So both of them likely to be confirmed?</s>ACOSTA: Absolutely, yes. And I think this also sets the stage for a potential Mitt Romney selection as secretary of state. If Donald Trump is willing to go to a harsh critic for his U.N. ambassador and bring somebody to the Education Department who may not line up with him on all of his views, that might portend something coming with Mitt Romney.</s>QUEST: Jim Acosta, Jim, have a lovely Thanksgiving and allow me to take -- thank you, sir, on this Thanksgiving, for all the hard work you do here on QUEST MEANS BUSINESS for us. We appreciate it.</s>ACOSTA: Thank you.</s>QUEST: Thank you, Jim Acosta. Now, CNN's learned that the short list for Treasury Secretary, the name is down to one. As I showed you, Steve Mnuchin is believed to be the only remaining candidate for America's top economic post. He worked for Goldman Sachs for 17 years, he became a film producer. The only name on the list was Jonathan Gray, the head of global real estate at the private equity firm, Blackstone. He said it was an honor to be considered but he still has much work to do at Blackstone. CNN's Joe Johns is in Washington. Joe, as much as these things ever are, where we're reading tea leaves, is it Mnuchin?</s>JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Yes, I got to tell you, that name is a difficult one to pronounce. And the way I've gotten it is Mnuchin.</s>QUEST: As in minutia.</s>JOHNS: Right. OK. So a lot of people have had problems with that. But he starts to sound like the last man standing in the competition though we don't have anything official. Treasury Secretary, big job, as you said, one of the top four, top five. He's a colorful character as well, the principal investor in One West Bank, which was formed after he purchased the failed subprime lender, IndyMac, back in 2009. He's since sold that bank. And Mnuchin most importantly, I think you already mentioned, was Trump's national finance chairman during the campaign. But importantly before that, he spent 17 years at Goldman Sachs, then started his own --</s>JOHNS: -- hedge fund. And most interestingly, I think, he's a real player in Hollywood, bankrolled movies including "American Sniper," "Suicide Squad," "The Lego Movie" and as you said, the reason why we have him prominently mentioned is because other top candidates, like Jonathan Gray, the head of real estate for Blackstone, has said they're not leaving their jobs.</s>QUEST: But if Mnuchin gets the nod and gets the job, is Trump going to be accused, well, here is another insider, here's another one; even worse, he comes from the evil squid, he comes from Goldman Sachs? But, Joe, you've got to balance experience and knowing your way around and there are only so many people who can do these jobs.</s>JOHNS: That's absolutely right. And if some of the people on the very top of your top list don't want to do it, then you have got a real problem. The name Jamie Dimon was kicked around for a while and, like Gray, both apparently big Hillary Clinton fans nonetheless, Gray, it sounded like, gave it some serious consideration before he decided he was going to stick around at Blackstone. But right, there are only so many people who have managed billions and billions of dollars and have a general idea of who the inside players are and how it all works. So Donald Trump has a limited list of people to choose from.</s>QUEST: Joe Johns, we wish and you happy Thanksgiving with your family, if you're lucky enough to be able to spend time with them in this transition time.</s>JOHNS: Thank you.</s>QUEST: Thank you.</s>JOHNS: Thank you, Richard.</s>QUEST: Now as we continue, Russia says it's hoping to put relations with the U.S. on a constructive course. A Kremlin spokesman says relations are at the bottom, so it's hard to make them worse. Andrey Kostin is the chairman of VTB, Russia's second largest bank at the APEC summit in Peru. He tells CNN's Shasta Darlington that Russia and the U.S. can reset their relationship.</s>ANDREY KOSTIN, CHAIRMAN, VTB: Well, Mr. Putin I think always stated that that's up to the American people whom they would elect. And like Mr. Putin, Mr. Trump was very reserved in his statement. I think he was very pragmatic. He was saying as we believe in Russia that restore relationship between Russia and the United States would benefit the whole world, the people of the whole world and people with Russia and America and that he thought that he could do business with Putin on a different very important issues like Syria and Ukraine and others. And I think that it's very much in line with Russia literature (ph) Mr. Putin thinks. But whether -- we think that we have a chance that our countries can really reset our relationship. But whether this chance will be used or not, that's a completely different question.</s>SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT: But there is also a hope that it could be an end of U.S. sanctions and broader sanctions on Russia.</s>KOSTIN: Well, sanctions, of course, are important but they are not</s>DARLINGTON: But on economic terms, there is the issue of sanctions. But there is also the issue of isolationism, protectionism, expectations that the United States will be more protectionist and even expand oil and gas production under President Donald Trump. Analysts say that that is a negative for Russia.</s>KOSTIN: The repercussions, the of oil price is still very difficult to assess from now. We don't understand whether necessarily the -- there's a Trump policy will lead to a cheap oil price. At the moment, we come from the original forecast of the World Bank, for example. The price will be around, let's say, $52 per barrel next year or something like this.</s>DARLINGTON: We are here at the APEC summit and there seems to be a lot of talk about China trying to position itself to fill a void that might be left by a more protectionist, isolationist United States. What are your feelings on that?</s>KOSTIN: Well, there is definitely competition in the APEC region between China and the United States. And the transpacific agreement for example is one example when the agreement was signed without China or Russia actually. So we see during the last decade a substantial growth -- even less</s>KOSTIN: -- in the region, though America is still probably very strong here. So we expect that it will continue to be competition between these two leading economic powers and so that is why I think the American side would be very cautious and very wise in dealing with this issue not to give advantage to the Chinese in this competition.</s>QUEST: Andrey Kostin talking there. The U.K. Chancellor of the Exchequer submitted his first autumn statement today.</s>QUEST: And the first comprehensive report on Britain's economy since the vote to leave the European Union. You'll hear the chief secretary -- the economic secretary to the Treasury after the break. QUEST MEANS BUSINESS. Good evening to you.