Wall Street Hits New Highs on 2018 Debut
BIANNA GOLODRYGA, CNN HOST: And U.S. markets are heading for all-time highs in the very first trading session of 2018. It's Tuesday, the second day of January. Tonight, Iran's leaders blame their enemies, and not the economy, for a string of deadly protests. A happy new year on Wall Street. The Nasdaq and S&P 500 head to fresh records. And Donald Trump takes the credit for steering the U.S. through the safest year in aviation history. I'm Bianna Golodryga. Happy New Year, and this is QUEST MEANS BUSINESS. Good evening. Tonight, protesters are back on the streets of Iran, as the U.S. rejects Iranian claims that outside forces are to blame for the unrest. Social media video from Shiraz appears to show clashes between protesters and police. Across the country, 21 people have died, 450 have been arrested. The U.S. is calling on Iran to unblock the social media tools used to organize the demonstrations, like Instagram and Telegram. This is the biggest challenge to the authorities in Tehran since a wave of mass demonstrations in 2009. The country's supreme leader says Iran's enemies are to blame.</s>AYATOLLAH ALI KHAMENEI, IRANIAN AND SUPREME LEADER (through translator): The enemy is waiting for an opportunity, for a flaw, where they can enter. Look at these events over the last few days. All those who are against the Islamic Republic, those who have the money, those who have the policy, those who have the weapons and the intelligence mechanisms, they have all joined forces in order to create problems for Islamic Republic and Islamic revolution.</s>GOLODRYGA: And joining me now from Tehran, Ramin Mostaghim, is a reporter for "The Los Angeles Times." Thank you so much for joining us, Ramin, we really appreciate your time. So, what is behind these protests? Is it more a domestic policy issue and the economy, or more geopolitical?</s>RAMIN MOSTAGHIM, REPORTER, LOS ANGELES TIMES: It is domestic policy and it goes to unemployment and policy of the young people. And no future for them in the horizon. So, these young people have seen in the past six days, they have nothing to do -- they have no idea about whatsoever about geopolitics, foreign policy. They don't care, they don't follow this sort of issue. They just want, self-centered. They want their own future, and they don't see it anywhere.</s>GOLODRYGA: So, when you hear the Ayatollah say this is caused because of Iran's enemies, what is he talking about?</s>MOSTAGHIM: He just actually wants to project that of the government. The problem sometimes it happens. So, they maybe might be involved. They may be happy, yes, U.K. or European or Americans, anyone who has some problem with the ruling establishment in Tehran may be happy to hear that. But officials actually, they are sympathizing with it. And by sympathizing with the protest they want to say that we understand your agony, we understand your problem, please let us do, in a way that less damage happens in the country, less collateral and human casualty. But at the same time, they are worried about some slogans, which are antiestablishment, like a dictator or something. And that's why they just try to -- try to categorize it as a two-part protest. Protest their rights, and are entitled to protests and those who are not entitled, because they are doing something which is not -- the domestic agenda. That is what official line says.</s>GOLODRYGA: You're seeing a huge population that is unemployed, a large percentage of that is the youth population there in that country. And it triggers images, of course, from 2009. The last time we saw such protests in Iran and on the streets of Tehran. Ramin, we really appreciate you joining us. Thank you so much. The Iranian president rejects the idea that these protests are just about the economy. But it's undeniable that there is deep disappointment about Hassan Rouhani's economic record. This was the scene over two years ago when the nuclear agreement was announced. The economic benefits President Rouhani promised, have largely failed to materialize. The economy is growing, and inflation is falling. But unemployment, especially among urban youth and women, remains high. Many educated Iranians are leaving the country, frustrated by the lack of jobs. Living standards are stagnant, and the government has proposed cutting subsidies for food and services for the poor. Fuel prices could increase by as much a 50 percent. And while the oil and tourism industries have benefited from the nuclear deal, red tape and corruption have held back the promised wave of foreign investment. So, the protests may have begun with these economic issues, but they have not ended there. As the Iranian president acknowledged in Parliament.</s>HASSAN ROUHANI, IRANIAN PRESIDENT (through translator): Their problem is not only economic ones. It's not like people have come to streets to say that we want money, bread, water. They have other demands, as well. They are claiming for other things, as well. One demand is allowing freer environment. People's demand is not only money, not only economy. Yes, one of them is economy.</s>GOLODRYGA: Robin Wright has reported on Iran since the 1980s. She is a distinguished fellow at the Wilson Center, and is joining me now from Washington with more. Robin, thank you so much for joining us. We heard from Rouhani that one of the issues is the economy. It's not the only issue. Do you support his statements?</s>ROBIN WRIGHT, DISTINGUISHED FELLOW, WILSON CENTER: I think the economy is indeed the primary motive. It's in many ways a perfect storm. You have some of the prices that have gone up by as much as 40 percent, part because of the removal of subsidies, and partly because of kind of accidental moments. There are the Iranians have been calling poultry, because of fears of avian flu. And so, the price of eggs has skyrocketed. But the cause doesn't make any difference to the working poor and the young in a country where you have somewhere between 30 and 40 percent of the young population unemployed and the majority of the population is young. And so, this -- the promises, the hope they all felt after the 2015 nuclear deal, have not been realized. And as a result, you find the kind of backlash against the regime that's taking on a political component, as well.</s>GOLODRYGA: And by all indications, the latest round of protests has taken the regime by surprise. Is the regime at any risk of failing at this point?</s>WRIGHT: Well, the regime clearly has the edge in its security forces, whether it's the regular police, the Basij, paramilitary volunteers or the revolutionary guards. So, it has the upper hand, and will, as it did in 2009, after much larger protests that went on for almost six months. But it does underscore that there is a deep dissatisfaction, and the aging revolutionaries understand that for the revolution to survive, for the Islamic Republic to survive, they have to address these basic grievances, and that will the challenge in the weeks and months ahead.</s>GOLODRYGA: And as you know, the president has been tweeting about it over the weekend. He said just last night, quote, all the money that President Obama so foolishly gave them went to terrorism and into their pockets. He, of course, is referring to the Iran nuclear deal, which he talks about almost routinely, as being one of the worst deals in history. Is he right to bring that up right now, and do you expect him possibly to rip up the deal?</s>WRIGHT: Well, first of all, you have to know that the money that the Obama administration gave back was Iran's money that dates back to military equipment bought by the Shah that's been in dispute ever since. So that was -- we weren't giving them or paying them off for anything. The question is, what does the U.S. do next? And does intervention, does this high-volume series of tweets give the Iranian regime an excuse to blame it on the outside world? And what does the Trump administration do next? There have been growing tensions between Washington and Tehran since he took office. And he has some big decisions to make in the next few weeks about whether to wave sanctions that were part of the nuclear deal.</s>GOLODRYGA: We will be watching, as always, Robin. Thank you so much for your insight.</s>WRIGHT: Thank you.</s>GOLODRYGA: Oil prices are easing little after the unrest in Iran, lifted them to two-year highs previous session. Brent Crude and WTI both started the year above $60 a barrel for the first time since 2014. Prices are also underpinned by continued restrictions in supply from OPEC and Russia. Meanwhile, on Wall Street, U.S. markets kicked off the new trading year with the Nasdaq and S&P 500 both setting records. The Nasdaq closed above 7,000 for the first time in history. The Dow finished nearly half a percent higher. A rise of more than 100 points. Paul La Monica joins me now to explain. What's behind this recent rise, given the uncertainty we're seeing playing out around the rest of the world? It's a trend we have seen over the past last year and it looks like we are continuing into 2018.</s>PAUL LA MONICA, CNNMONEY CORRESPONDENT: Yes, I think part of it, Bianna, is what we have already been talking about with Iran, the oil price spike has helped companies like ExxonMobil and Chevron, two leading Dow components. That's one thing. But also, tech stocks, they were the big winners in 2017 and they started off 2018 with a bang, too. Amazon, Apple, Google, Facebook, all of them really surged today. Big showing that investors aren't ready to give up on last year's winners any time soon.</s>GOLODRYGA: And a lot of that had been anticipation of the President's tax deal, which was passed. So now what?</s>LA MONICA: I think a lot of people are wondering just exactly how much of an earnings boost are companies going to get? We started to see some companies like BP and Shell talk about a short-term pain because of the tax bill. But that's probably just a one-time accounting issue. You're going to see more companies that will be saving money, because of the lower taxes. FedEx is one big company that reported results just before the holidays. They said they may generate up to $1.5 billion more in earnings this year because of lower taxes. I think as companies start reporting their results later this month, you'll see a lot more of them talking about the big boosts that they're going to see. Whether or not they pass it on to shareholders with dividend increases or dare I say, even hire more workers and give raises, that's another question entirely. But I think it's definitely going to be good for Wall Street, if not necessarily main street.</s>GOLODRYGA: The president keeps pointing out consumer confidence being at highs, as well as CEO confidence at the same record highs. What, if anything, could reverse that trend?</s>LA MONICA: I think the biggest wild card right now is that even though there is not much evidence of inflation just yet, it's always the type of thing that just comes out of nowhere, and a lot of Fed chiefs have been flummoxed by, oh, wait, we haven't had much evidence of inflation, and now all of a sudden, it's here. And there's really only one recipe to try and fix that. It's raise interest rates. And if the new Fed chair, Jerome Powell has to raise rates more aggressively than his boss, President Trump, would like, that could potentially be a problem that hurts the economy and slows down this red-hot stock market.</s>GOLODRYGA: Had been a report over the weekend that a lot of CEOs are attributing their new-found confidence in the pulling back and easing of regulations that we have seen from President Trump. Is that something that you're hearing from your source, as well?</s>LA MONICA: I think that's fair that there are so people who wondered if there was too much of a tightening of rules and regulations during the Obama administration as a result of the great recession, and all of the froth that was created in the financial markets before then. Maybe the pendulum swung too far. And I think people are optimistic about President Trump rolling back a lot of regulations. Now whether or not he goes too far, and you wind up having big businesses get into trouble again, that still remains to be seen.</s>GOLODRYGA: It's hard to believe it's been a year since the president has taken office. And he started as you may recall, from time to time, he still does, personally attack individual companies, right? For something he didn't like, whether it's the "New York Times," whether it's specific tech companies, what have you. And initially, we saw real fear and trepidation from a lot of these CEOs. Do they still fear retribution from the president?</s>LA MONICA: I don't get the sense from people I talk to that people are as nervous, and especially people on Wall Street. I think they find this more amusing than anything else. It's clearly unprecedented. We have never had a president use social media. Of course, because social media didn't exist really until the past few years, as a bully pulpit to shame companies into getting what he wants. So right now, I think we know that President Trump, there's a difference between tweeter-in-chief Trump and what happens behind closed doors. And I think most people are of the mind-set that cooler heads eventually prevail, despite all the rhetoric that he can now put into 280 characters instead of just 140.</s>GOLODRYGA: Exactly. Interesting how we acclimate to so many things. Paul, great to see you, happy new year. Thank you for joining us. Well the cost of hate speech and fake news is unqualifiable. But now a crackdown in Germany means social media firms could face multimillion dollar fines if they spot it and do nothing. More on that, coming up next.