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QUEST MEANS BUSINESS

Stock Market Rally; European Stocks Trading High; Iran Celebrates Nuclear Deal; Markets and the Economy; Swiss Vote No on Pay Cap; Protests Rock Kiev; Apple Buys Primesense; Israel Tech Boom

Aired November 25, 2013 - 16:00   ET

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


(NEW YORK STOCK EXCHANGE CLOSING BELL)

MAGGIE LAKE, HOST: It's milestone Monday for the markets. The NASDAQ breaks a 13-year barrier as the Dow holds ground. It's Monday, November the 25th.

Tonight, a rally for Iran. Global stocks rise as oil falls.

A legal bonus for big business as Switzerland says no to pay caps.

And "Catching Fire" at the box office. "Hunger Games 2" storms into the records.

I'm Maggie Lake, and this is QUEST MEANS BUSINESS.

Good evening. Let's get straight to the markets. The NASDAQ in focus today, it closing shy of 4,000. Earlier in the day, though, it was able to briefly cross that mark, and it's the first time that's happened in 13 years. So it gives you an indication that that bullish sentiment we've seen in the markets is in place.

The Dow and S&P have risen for the past seven weeks. If we take a look, the Dow closing up just fractionally, but it was able to stay above that 16,000 level. The S&P 500 did succumb to a little bit of selling at the end, but also managing to stay above that psychologically-important 1800 mark.

So all in all, still a pretty nice kick-off to a holiday week. Now remember, markets are closed for Thanksgiving on Thursday, and it will be a half-day session on Friday, so volume could be on the light side, but it looks like the buyers are still in control.

Alison Kosik is at the New York Stock Exchange to walk us through it. And Alison, a little bit tepid, but it seems like the path of least resistance is still higher.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It really is. We certainly saw caution play into the trade today. Even when we saw the NASDAQ touch that 4,000 level, it was kind of like 2000 again, wasn't it? But yes, it was, because the last time it hit that level was 13 years ago.

What was propping up stocks initially was that deal with Iran, helping to give stocks that extra boost. That deal, of course, loosening economic sanctions in exchange for Iran scaling back its nuclear program.

What we also were watching today, not just stocks, but oil prices. Oil prices fell today to about 90 -- about 1 percent to about $93 a barrel, which means that more Iranian oil could be exported, so that is why we saw oil, certainly, react.

A drop in pending home sales in October. That's really what kept stocks sort of in check today. The reading fell for a fifth month in a row as the government shutdown apparently sidelined potential buyers.

We have been seeing a bit of a slowdown. It was -- it's been really a strong recovery in the housing market, but we certainly did see more caution play into the trade today, Maggie.

LAKE: Caution, but no real selling in earnest, at least not yet.

KOSIK: Exactly.

LAKE: All right, Alison, thank you so much. Now, Iran's impact was not limited to Wall Street. In Europe, Germany's DAX hit a new all-time high. Overall, European stocks are trading near five and a half year highs.

Oil prices moved in the opposite direction. Brent Crude fell by as much as $3 before stabilizing. Analysts describe the move as a knee-jerk reaction as the deal does not allow Iran to increase oil sales for six months. The dollar, meanwhile, climbed against major currencies. Traders say lower oil prices will help the US economy, which in turn will strengthen the dollar.

The easing of sanctions is worth about $7 billion to Iran. The US describes the relief as "limited, temporary, targeted, and reversible." But for an economy crippled by sanctions, it's enough cause for celebration. Sara Sidner reports.

(BEGIN VIDEOTAPE)

(CROWD CHEERING)

SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT (voice-over): Celebrations erupt in the country as the Iranian negotiating team returns to Tehran with a deal over its nuclear program.

It's no wonder, because this deal means for the first time in decades, sanctions on Iran's biggest export, oil, are being eased instead of increased. There is a sense of hope in the streets of Iran and among shopkeepers.

UNIDENTIFIED MALE (through translator): These meetings make us Iranians proud. The market will be great. It will start moving. Thanks to these meetings, people have been happy over the past couple of days because they are overcoming their problems.

SIDNER: But analysts caution, those problems are deeply entrenched and may be difficult to overcome.

(CROWD CHANTING IN PROTEST)

SIDNER: The economic crackdown started as revolution swept Iran. The US levied the first round of sanctions in 1980 after 52 Americans were taken hostage in the US embassy in Tehran, a moment that marked the end of diplomatic relations.

Iran's oil imports were banned. Billions in Iranian assets were frozen. In the following years, international sanctions tightened over accusations of Iranian-sponsored terrorism and eventually its nuclear program.

Iran's economy has been battered, unemployment high, and over recent years, inflation has soared. The price of items such as bread has skyrocketed, a crushing reality for everyday Iranians. But analysts say limited sanctions relief will not likely be felt by the average person.

UNIDENTIFIED MALE (through translator): They were effective, very effective, especially during the past few months. We have felt the effects even more. They have to be lifted for us to see just how much effect it will have.

SIDNER (on camera): But world markets reacted positively, with a dip in oil prices. Though here in the oil-rich Gulf in the Middle East, there is deep concern about the new relations between Iran and the West, with Saudi Arabia, long at odds with Iran, expressing displeasure, as well as Israel. However, here in the Gulf in the UAE, you're seeing headlines that reflect a positive tone.

FAISAL AL YAFAI, CHIEF COLUMNIST, "THE NATIONAL": I think it's more a suggestion of where this is going. If the international community can reintegrate Iran into the economy, the global economy and the regional economy, that would be very beneficial, both to the Iranians and for the companies in the Gulf.

SIDNER (voice-over): But Tehran and world powers are still working out a permanent solution, the country still facing a long, difficult road ahead before it regains the world's trust and investment.

Sara Sidner, CNN, Abu Dhabi.

(END VIDEOTAPE)

LAKE: The nuclear deal is seen as a first step toward a broader agreement. I spoke to Mehdi Varzi, the president of Varzi Energy, and I asked him what kind of lasting impact will the easing of sanctions have.

(BEGIN VIDEOTAPE)

MEHDI VARZI, PRESIDENT, VARZI ENERGY: I think the whole point is that this is an interim agreement and that we have to wait to see how the situation unfolds. I don't expect, for instance, Iran's oil exports to jump. I think there will still be tight constraints on Iran's ability to earn foreign exchange.

LAKE: The market seems to be anticipating, even if it is a slow transition, though, that this is going to be moving in the direction of more supply coming from Iran. What does that do to the landscape? How does this affect OPEC, for example?

VARZI: I don't think -- if we're talking about a few hundred thousand barrels a day additional supply for OPEC, this really shouldn't make that much difference, because other countries can adjust their production levels if they fear that prices are going to really come down. And prices still are quite firm.

LAKE: What is the state of the oil industry infrastructure in Iran? Even if they get the green light and sanctions are eased, is the infrastructure in good enough shape? Do they have the talent, the labor pool to be able to ramp up exports?

VARZI: No, the problem with Iran is that for a whole host of reasons, there has been underinvestment -- dramatic underinvestment -- in Iran's exploration, development, and production activities.

And also, there has been, I would say, politicization of the Iranian oil industry whereby it's very difficult to know today who is a technocrat and who is a bureaucrat. I think there needs to be major internal reforms before Iran can get back to the former level of, let us say, 4 million barrels per day.

LAKE: And do you think there is an appetite in Iran to see those kind of internal reforms?

VARZI: Well, I think there is a will to do them, but whether there is a way, whether people are really prepared to undertake what could be some painful reforms, that is open to question.

LAKE: And painful in what way?

VARZI: Painful in the sense that the old kind of agreements, which Iran had with foreign oil companies, that is the so-called buy-back schemes, the so- called service agreements, really should have no part to play if we're thinking about the oil industry turning a page, if Iran really wants to invite foreign oil companies back in a major way.

(END VIDEOTAPE)

LAKE: Iran's nuclear deal is not the only talking point in the markets today. Let's bring in Nathan Sheets, global head of international economics at CitiGroup. Nathan, thank you so much for joining us today. Iran a mild catalyst today. It's going to be a big issue geopolitically.

But if we turn back to the markets, they have just been unstoppable. It's got a lot of people excited, but it's also got a lot of people nervous. Is this stock rally justified?

NATHAN SHEETS, GLOBAL HEAD OF INTERNATIONAL ECONOMICS, CITIGROUP: Broadly speaking, I would say yes. When I look around the world, I think that the situation isn't great, but it feels a little bit better to me than it did six months or so ago.

We've seen the euro area emerge from recession. We've seen some very significant reforms put forward recently by the Chinese leadership. The US labor market, recent data suggests, is picking up.

And I think more and more, the markets are beginning to understand that for the Federal Reserve, even if they begin tapering, it's going to be a long time until they start hiking rates.

LAKE: Well, that's certainly the message that the Fed has been trying to deliver. But there does seem to be a disconnect. Listen, "not terrible" doesn't seem to justify 20 percent. Is all of the good news about the improvement and the turn already priced into stocks, and are we going to deal with the reality that it's hard to exit? Can the Fed do that smoothly?

SHEETS: So, my feeling is what you're seeing is a somewhat better macro environment. But then, as investors look at the micro-economics of the US corporate sector, they see a lot of firms that are very competitive and profitable in their industries, and there's a real business story there.

So I think the macro is less negative than it was, and the micro is very supportive. And I think that that will manifest itself over time in stronger investment, in stronger hiring, and the economy that the Federal Reserve is looking for to eventually start to hike rates and tighten policy.

LAKE: And that's the key, isn't it? Everyone's been waiting for the US economy to reach escape velocity and for that hand-off of the baton as they start to withdraw stimulus, the economy would be strong enough to move on its own. Do you have faith that it's going to happen that way? Sounds like a great plan, but timing is everything.

SHEETS: It's a wonderful story, and as you indicate, economists have been articulating it now for a couple of years. It does start to feel at this stage that --

LAKE: Inevitably, they're going to get it right? Inevitably, it's going to happen?

SHEETS: Yes. That it's coming together, that the consumer's in a better spot and the banks are in a better spot, and we won't have the drag from taxes and new expenditure cuts that we've had in 2013.

LAKE: Well, that makes me feel better.

SHEETS: So, 2014 is the key.

LAKE: Very quickly, let's just wrap up with Europe, though. And you touched on this, so I want to circle back. The recovery looks like it's faltering there a little bit. Very different situation. We've had a central bank here that has had their foot slamming on the gas with quantitative easing.

Is -- are we going to see some moves like that from Europe? Should the ECB be doing more, or did they play it right?

SHEETS: My expectation is that we'll see some modest positive growth in the euro area, and I think that what the ECB is going to do is they're going to continue to find some modest ways to support the recovery.

But as you say, the ECB is not the Federal Reserve. The Federal Reserve is a very activist central bank. The Federal Reserve, if they see a problem, they want to address it. The ECB has taken a much more hands-off strategy and hasn't provided the same degree of support or stimulus to the euro area economy as the Fed has. And as a result of that, they have a weaker recovery.

LAKE: And you're seeing US equities outperform almost everything right now --

SHEETS: Yes.

LAKE: -- as a result as well. Nathan, thank you so much for joining us.

SHEETS: Pleasure.

LAKE: Nathan Sheets from CitiGroup.

The Swiss said no to capping executive pay. We'll tell you about the 1-to- 12 initiative when we return.

(COMMERCIAL BREAK)

LAKE: Voters in Switzerland rejected a proposal to cap executive pay on Sunday. The 1-to-12 initiative aimed to rein-in executive salaries to a maximum of 12 times the wages of a company's lowest-paid employee.

More than 65 percent of voters opposed it. Economy minister Johann Schneider-Ammann cheered the outcome saying it will allow Switzerland to remain an attractive location for businesses.

My next guest, Brigitta Moser-Harder, a shareholder activist, agrees that the initiative poses a threat to business. However, back in March, she supported a successful proposal that gave shareholders more control over executive pay and severance packages. Brigitta joins me now live.

Thank you so much for being with us. So, talk to me about this particular initiative. Were you surprised at the outcome, and what does it say in the country's efforts to rein in executive pay?

BRIGITTA MOSER-HARDER, SHAREHOLDER ACTIVIST: Hello. Well, actually, I was not surprised because especially after the initiative against abusive executive pay, which was enacted by the voters by 68 percent, it sure was not the right moment to put another cap on executive pay.

Because we in the committee, we had a proposal which really put some tough restrictions on executive compensation. We surely had to reach dimension not only in Switzerland comes up short. But it was really for all companies in Switzerland, but our proposal, which was expected, was only for listed company.

That means the shareholders say what the compensation could be. They put a cap on it because they can make a binding role if they accept this compensation, and if it's not, it has to be changed. And I think that's the main reason.

In Switzerland, from the Socialist-Democratic Party -- Social-Democratic Party was for all companies. The small ones, big ones, and I think that was too much.

LAKE: Too much. I think there isn't -- you could see where voters are coming from, because I think there is a lot of anger over income disparity, and yet, it's a tough economy. No one wants to see an environment where business is hurt or stifled.

MOSER-HARDER: Well, after this in March, I think for the moment the people of Switzerland have enough restrictions, because of course they fear about the economy. But I think the gap, sure, is very high, very wide between the smallest and the highest salary, and there sure must be changes.

But I think our referendum, it was so successfully, sure, it will limit executive pay and the people will see that it works, and when it works, that's what they think, and I'm sure it will work, so they don't need another cap on executive pay to -- sure, not so good for the economy. So --

LAKE: Brigitta, is it the problem with this that if any country acts alone, they're really isolated, and those businesses or companies will just move their headquarters and their executives to another country?

MOSER-HARDER: Oh, no, sure not. Because our referendum in March and the successful referendum had so much feedback in other countries that the European Union started their own restrictions on executive pay. So, it was really widespread, the understanding that something has to change.

And that, we are very happy that we were the first ones to do it, and the other countries will follow. Because in other countries, the people are upset because they have wages just for the minimum of living sometimes, and here are the executives who have millions and millions for sometimes just a normal job. And that, people are very upset.

And I think other countries will follow, and that makes us very proud in Switzerland, that they agree, something has to be changed with executive pay.

LAKE: Brigitta, we will watching the developments closely. Thank you so much for joining us tonight. Brigitta Moser-Harder for us tonight.

MOSER-HARDER: OK.

LAKE: The EU says its offer to strike a trade deal with the Ukraine remains open. Top Brussels officials say the Ukrainian people have shown that they understand and embrace the idea of closer ties to Europe.

These pictures from Kiev show they are prepared to fight for it. Thousands of pro-EU protesters clashed with police earlier on the streets of the capital. Police used teargas as trouble flared outside government headquarters.

Ukraine had been due to sign the trade deal with the EU on Friday. Instead, the country will pursue closer relations with Moscow. Phil Black is in Moscow with more.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: These free trade and political association agreements have been under negotiation between the European Union and Ukraine for some years, now, and the many angry people on the streets of Kiev believe they represent an historic opportunity for their country to further integrate Ukraine with with the European Union.

It's not full membership status, but they believe it would give them the chance to open Ukraine up to European business, ideas, culture, values, standards and, importantly, rule of law. They believe it is a chance to more rapidly modernize Ukraine's economy and political system. It would be an historically decisive step moving Ukraine further from the orbit, from the influence of its old Soviet-era master, Moscow.

It has been no secret that Moscow does not want Ukraine to sign up to the EU in this way. Moscow would prefer Ukraine join its own rival block of countries, its so-called Customs Union, which includes Russia, Belarus, and Kazakhstan. And Russia has long argued there would be economic consequences, particularly in trade, if Ukraine were to proceed down the EU route.

Now, the most senior officials in Brussels have effectively accused Russia of bullying the Ukrainian government into turning their back on the European Union. They say they are aware of the external pressure Ukraine has been under, and they strongly disapprove of the action and position that Russia has taken in this. Russia denies pressuring Ukraine in any way and accuses the EU of trying to blackmail Ukraine into signing up.

Now, there was another issue that was thought to have the potential to scuttle these agreements, and it has more to do with Ukrainian domestic politics. It is the fate of Ukraine's former prime minister, Yulia Tymoshenko.

She is in jail, convicted of abusing power while in office, and Europe has long believed that she is the victim of selective justice, political payback, because she is the main political rival to Ukraine's president, Viktor Yanukovych.

The EU long ago set as a precondition to these agreements the release of Tymoshenko from jail. Ukraine has long stalled, showed little enthusiasm for letting Tymoshenko go from prison. But in the end, Ukraine says it has rejected the chance to sign on with these agreements for very different reasons. The European Union says its offer to move forward with Ukraine remains on the table.

Phil Black, CNN, Moscow.

(END VIDEOTAPE)

LAKE: Now, the holiday season in the US is traditionally a time for shopping, and that goes for companies, too. Apple, Facebook, and Google all think the best buys are to be found in Israel.

(COMMERCIAL BREAK)

LAKE: Apple has bought the Israeli 3D sensor company Primesense for a reported $350 million. Now, Primesense makes motion-tracking chips, which give devices the ability to observe a scene in three dimensions.

It's part of a big Israeli shopping spree by some of the world's largest tech companies. You may remember in June, Google acquired the social mapping firm Waze. The deal was reported to be worth more than $1 billion.

In August, IBM bought Trusteer, the transaction fraud prevention company, for a similar sum. And last month, Facebook said that it was buying Onavo, reportedly for up to $200 million. It's a start-up that makes apps which monitor data usage.

Well, Jonathan Medved is one of Israel's leading tech venture capitalists and is the founder and CEO of OurCrowd. I spoke to him earlier from Jerusalem, and I started by asking him about the Primesense acquisition and what it tells us about what Apple's got in the pipeline.

(BEGIN VIDEOTAPE)

JONATHAN MEDVED, FOUNDER AND CEO, OURCROWD: This acquisition of Primesense for $350 million follows their prior acquisition Anobit for $400 million. Anobit was the maker of flash memory modules for the iPad. And they've also now announced that they're going to be building a major R&D center here in Israel. So, this is yet another commitment of Apple to Israel.

Now, Apple is not alone in its commitment to the Israeli tech scene. They're just joining hundreds of other world leaders in technology who've been buying companies here. In fact, there are 300 different world technology leaders who now have R&D centers here. Most of them start their activity here by making multiple acquisitions of Israeli companies.

LAKE: And why do you think that is? What are these start-ups in Israel doing that have so many of these big tech companies from Silicon Valley coming and shopping? Is it the area that they're concentrating in?

MEDVED: Well, look. We're clearly the world's second source of major innovation. When you look at the world, you see a duopoly. There's Israel and there's Silicon Valley. And whether it's in certain areas, like 3D visualization or 3D motion sensors, which is Primesense's area, we're ahead.

We're ahead in 3D printing. We're ahead in all kinds of digital printing. We're ahead in many kinds of social or mapping applications. Whether it's in medical devices or in internet technology or Cloud technology or big data in analytics, Israel simply has a huge cluster of technologies.

Each year, over 600 Israeli companies are getting venture capital funding. So, it's a very, very dense venture capital environment. These companies then grow up, they either get bought or they actually go public in New York.

And one of the interesting things about the New York Stock Exchanges is that today, Israel represents the third-largest country delegation traded in New York. The ranking in New York today is the United States number one, China number two, and Israel number three.

It's ridiculous, it makes no sense when you look at our 8 million country population, you say how come you have so many companies traded or companies that are being bought? And the answer is simply Israel's secret sauce relative to innovation.

LAKE: NASDAQ over 4,000, first time in 13 years. Some people feel it's getting a little frothy, Jon. How do you feel?

MEDVED: I don't think it's that frothy at all. When you look at how many IPOs there have been this year, it's still under 50 IPOs in the tech sector. Back in the real bubble in 2000, there were a hundred a month. So, I think we've got a long way to go until we get really overheated here, and I think we're simply seeing the importance of technology in the overall scheme of things.

There are so many big new companies that are coming out of nowhere that are going to change our lives, and a lot of them happen to be coming from Israel, so we're excited about being here in Israel and our crowd and investing in these next Primesenses and the next Wazes, which will then be bought, ultimately, or hopefully go public on the New York Stock Exchanges.

(END VIDEOTAPE)

LAKE: Coming up, changes at the top of Walmart, Peugeot, and BlackBerry. We'll tell you who's in and who's out when we come back.

(COMMERCIAL BREAK)

LAKE: Welcome back, I'm Maggie Lake. The headlines this hour. New diplomatic efforts underway just a day after the historic deal on Iran's nuclear program. The French foreign minister says the EU could lift some sanctions as early as next month. Iran promises to slow its nuclear program in exchange for the easing of sanctions.

The UN has finally set a date for its long-awaited peace conference for Syria. It says Geneva II will convene on January 22nd, but it's still not sure who will show up. Syria's government has previously said it will attend. Some opposition groups are pledging to boycott.

The crisis in Syria was expected to dominate talks between Pope Francis and Russian president Vladimir Putin. The two leaders sat down for a closed- door meeting at the Vatican just a couple of hours ago. This is the first time the new Pope and the Russian leader have met face to face.

China has asked the United States not to interfere in its territorial dispute with Japan. The U.S. has warned of increased tension in the region after Beijing laid claim to airspace around disputed islands in the sea in East China Sea. It's another record-breaking day for U.S. markets as the NASDAQ briefly went past the 4,000 mark for the first time in 13 years. It failed to hold on to those gains though for the close.

We are seeing some big changes at the top of some of the world's most influential companies. Walmart says Doug McMillon will become CEO starting in February. He will replace Mike Duke who's headed the company since 2009. At Blackberry, new CEO John Chen decided to remove several executives including its COO, CMO and CFO.

Peugeot has poached its next CEO from Renault. Carlos Tavares is expected to take the helm at Peugeot next year. Three months ago he stepped down as Renault's COO. And finally, Yahoo says Katie Couric will join its ranks as global anchor. The exact details of her role are still unclear. CNN Money's Julianne Pepitone joins me now. Julianne, Katie Couric is someone people are used to seeing in their living rooms, at least in the United States. What's in this for Yahoo? Why would they do something like this?

JULIANNE PEPITONE, CNNMONEY.COM: Well, Maggie, on a surface level they have you and I talking about this right here. They're getting headlines, Katie Couric is a big name in media, and getting buzz for Yahoo has been a big part of Marissa Mayer's tenure. Especially for a company that frankly was pretty boring for a lot of years there before she joined.

But beyond that, it's really about Mayer's focus on media. Not just about recycling content and grabbing it from other places on the web, this is about original content that Yahoo is a place where you will go media. And Katie is not the only big name that Mayer has poached recently. She's also joined forces with a lot of people who used to be "New York Times" folks including the former (themes) tech columnist David Pogue. You can see that she's really throwing down and probably spending a lot of money.

LAKE: I was just going to say these are high-profile people but they don't come cheap, that's for sure.

PEPITONE: No.

LAKE: How is she doing in the whole effort to turn Yahoo around? She's spending money we know that, but is it paying off?

PEPITONE: Well, we're not really seeing a payoff in the financials yet to be honest. It kind of seems like a nice fresh coat of paint on kind of core structure that's (still run). The financials really have not turned around - not getting worse which in Yahoo's case is kind of getting better. But it's still definitely stuck in neutral. I actually talked to some analysts last week about why is Yahoo stock up 82 percent so far this year if the financials really aren't turning around, and they really pinned it more on Yahoo's stake in Alibaba, the Chinese e-commerce site that's going public.

LAKE: Yes.

PEPITONE: So, it's really less about what Mayer's doing, even about Yahoo, and more about Alibaba. And they've said to me frankly we're not really expecting a change any time soon, and if she is able to engineer a turnaround, that's icing on the cake.

LAKE: At some point though the two are going to be separated, and she's going to have to show something for all this money's she's spending. Investors are giving her, you know, the benefit of the doubt now I suppose. What about the employees? Because in tech so much is about retaining top talent. You can buy an anchor you can buy somebody like David Pogue with a big contract, but what about the sort of rank and file? Do they still believe in her?

PEPITONE: It does seem that the employee morale at Yahoo is better. Again, we're kind of comparing it to years where it was pretty miserable so she was kind of starting from a low point. But in speaking to analysts they said they've talked to a lot of employees who are excited about what she's doing, she has a lot of energy and yes bringing on people like Katie Couric could get kind of the rank and file employees excited about it. But you're right, if you can spend here, you can spend there, if you can buy Pogue, you can buy Couric. But eventually the analysts (inaudible) are going to stop playing nice, say, 'OK, you've been on the job for more than 18 months now, where are we seeing the turnaround in these financials?' And we're not seeing it yet -

LAKE: Show me the money - it always comes down to that.

PEPITONE: -- as always.

LAKE: Just lastly, it strikes me that she was - there's always this sort of existential question with Yahoo. Is it a tech company, it is a media company -- what is Yahoo? A lot of people thought when she took over, she comes from tech absolutely, not from media so much, and yet it seems like where she's been making a lot of moves is on the media side. Or is that just sort of the thing that's easily digestible for us and she is actually doing a lot on the core tech side too?

PEPITONE: Well, it's been a lot of the focus lately for sure, another pillar that she's talking about is video which could arguably be content or tech - could really fall in either bucket. She's also done a lot of acquisitions in the mobile space. You could argue that's really more about acquiring people who are really good on the tech side and mobile. But it definitely seems like recently she's focusing on being a media company. But, yes, that's the age-old question - what is Yahoo? And Marissa Mayer's predecessors have not famously not been able to answer that question.

LAKE: And so far we haven't gotten an answer from her -- even if she knows it, we haven't found out yet. All right, Julianne, fascinating. So thank you so much.

PEPITONE: Thank you.

LAKE: Well coming up, a storm barreling across the United States is threatening to wreak havoc on Thanksgiving travel plans for millions of Americans.

(COMMERCIAL BREAK)

LAKE: U.S. aerospace company SpaceX is launching what it calls its most challenging mission to date. Its Falcon 9 rocket will lift off from Cape Canaveral in Florida at 5:37 in the afternoon local time. Its cargo is a commercial telecommunications satellite. If all goes to plan it would solidify the young company's reputation in the space transport industry. CEO Elon Musk was recently named "Fortune Magazine's" business person of the year. He spoke to CNN's Fareed Zakaria about his inspiration and aspirations.

(BEGIN VIDEO CLIP)

FAREED ZAKARIA, HOST OF CNN'S "FAREED ZAKARIA GPS": Somebody who is very scientifically-oriented, all your companies now certainly have a deep, deep amount of science in them. But there's also an enormous amount of imagination to the idea of moving to Mars -

ELON MUSK, CEO OF SPACEX AND TESLA MOTORS: Yes.

ZAKARIA: -- the glamour of having a very fast car - not just an electric car. Do you think that - do you think of yourself as a scientist, as an inventor - how do you think of yourself?

MUSK: I mean I try to focus on whatever the problem is that's impeding progress and my personal interest is much more in engineering and design, science and that kind of thing. But in order to create a company and have a company succeed, you also have to do other things. You have to do finance and sales and legal - those are not my favorite things to do, but if you don't do the stuff you don't like, then the company won't succeed.

ZAKARIA: So this is the Dragon -

MUSK: Yes.

ZAKARIA: -- that goes up into space and is going to go up on Monday, correct?

MUSK: Yes, that's our Dragon spacecraft, version 1 which is capable of taking cargo to and from the space station, including biological cargo like you know fish and mice and that kind of thing.

ZAKARIA: So when do human beings start going up in it, do you think?

MUSK: We expect to complete version 2 of Dragon which will have actual transport capability in about two years.

ZAKARIA: And most of what you do now is send satellites up into space, right?

MUSK: Yes.

ZAKARIA: That's how you pay the bills.

MUSK: Exactly.

ZAKARIA: But you want to do something much more ambitious with SpaceX.

MUSK: Yes. I mean the long-term aspiration is to develop the technologies necessary to transport a large number of people and cargo to Mars in order to create a self-sustaining civilization there. And now that's really why I started the company - was because it seemed as though -

ZAKARIA: To create the possibility for life on other planets.

MUSK: -- yes, exactly. I mean it sort of started off when I was thinking about what to do after PayPal, and I'd always been interested in space, but I didn't think there was anything that an individual could do in space. I mean it seemed like the province of large governments and - but I started looking into and I went to the NASA website to say - to find out when we're going to Mars. It seems like, obviously, that is the next thing after the moon. And I couldn't find anything. So, I was like wow, this just seems very strange. Initially I was under the impression that it was - that we'd lost the will to do that. And I later came to the conclusion that I was quite wrong about that. I think the United States in particular is a nation of explorers.

ZAKARIA: So you decide you want to try and do this, and do you look at it as - why did you decide transport was the most important thing?

MUSK: Oh, right, yes.

ZAKARIA: I mean (inaudible) people would regard living on Mars as a -

MUSK: No, no, that's the relatively easy - easier thing, yes. Absolutely.

ZAKARIA: So we could live on Mars, just getting there is the problem?

MUSK: Yes. But getting - I mean, right now getting to Mars right now is impossible, so I guess it kind of doesn't matter what you do when you got - - what you do when you get there if you can't get there.

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LAKE: Boeing shares fell today after the company issued an alert about the 787 Dreamliner. It says Dreamliners with General Electric engines must avoid thunderstorms because of the risk of ice crystals forming. The warning prompted Japan Airlines to reassign jets on some routes. Boeing shares hit $133, that's about - that's down about 2 percent.

The timing couldn't be worse for de-icing issues. Airlines are already having to make contingency plans as a winter storm rolls across the U.S. ahead of Thanksgiving. Around 500 flights were canceled in two days at Dallas-Fort Worth International Airport. The bad weather has already contributed to at least ten traffic fatalities. CNN's Rene Marsh now on some storm chasing.

RENE MARSH, CNN NATIONAL CORRESPONDENT: Two things that should never go together - peak holiday travel and treacherous winter weather. A traveler's nightmare - cancellations, delays and frustration all around. In Dallas were ice-coated airplanes. Airlines were forced to pre-cancel hundreds of flights to avoid the inevitable. Airlines and airports are experienced with wild weather and they're ready for this round.

ALEXANDRIA MARREN, UNITED AIRLINES OPERATIONS VICE PRESIDENT: You can call this the nerve center of the airline.

MARSH: United watches the weather and directs every flight around the world from their headquarters in Chicago. The decision to cancel flights happens here.

JIM DEYOUNG, UNITED AIRLINES MANAGING DIRECTOR/NETWORK OPERATIONS: These individuals are actually measuring the impact of weather, of the air traffic control system and coordinating not only internally with United Airlines but with the FAA.

MARSH: They're talking to this FAA command center near Washington. Conference calls keep airlines and FAA controllers up to date with changing conditions. And a warning for travelers - think before you book.

GEORGE HOBICA, AIRFAREWATCHDOG.COM: Probably the worst mistake is to take a connecting flight or if you do connect, to connect through a known bad weather airport like Chicago or Denver or Detroit or Minneapolis -- airports that are prone to snowstorms.

MARSH: But a storm as big as this one will be hard to avoid.

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LAKE: And that was Rene Marsh reporting, and if I'm not mistaking, this storm is headed right to the east coast. Let's find out - Samantha Mohr is at the CNN International Weather Center. Rene was right, it is going to be hard to avoid this one, isn't it, Samantha?

SAMANTHA MOHR, METEOROLOGIST WITH CNN: Oh, it is, and the timing could not be worse because we're heading into that busiest travel day of the year, so millions will be impacted - they're saying 43 million. It's going to be even more than that. This is a heck of a system. It's really affected pretty much the entire country starting out with blowing down trees in the San Francisco area before it made its way well to the east. It has moved through Dallas-Fort Worth. It was lucky for them that they ended up being above freezing for much of that - the storm event. So they didn't end up seeing the freezing rain we were concerned about. So that was some very good news. We did see the snowfall here though - in New Mexico 25 centimeters in Stanley, and in Vinson 33 centimeters of snow in Vinson, Oklahoma.

Let's take a look at some of those pictures we have coming out of Lawton, Oklahoma, and that's where we saw some snow coming down and it made for some beautiful sights here but slow-going for those folks. In fact, across southwestern Oklahoma, we ended up seeing 20 to 30 centimeters of snow out of this system. And this one is going to bring some heavy snow across much of the east as well. So let's take a look specifically at where we think that's going to be. Here comes the low across the Gulf of Mexico, bringing in some very heavy rain. Here in northern Georgia across the Atlanta area we'll likely see some street (sweating) from the heavy downpours we're expecting here.

Let's get you into Wednesday early. We could see some wintery weather moving into the D.C. area - that could slow down your travel and also the heavy rain moving in ahead of this front and then the dramatic shift in temperatures behind the front with incredibly gusty winds Wednesday into Thanksgiving Day. So, they're going to have to batten down the hatches as we have the famous Thanksgiving Day Parade in New York City - that will be in jeopardy. Some of the floats there and the balloons that they take along the route could be in jeopardy. And then the heavy rain all along this area of low pressure.

So, winter storm warnings in pink and the winter weather advisory's here in the purple and lots of ice on the roadway. This is actually a freezing rain concern with an ice advisory here across parts of the Piedmont. So here are the airports we expect to be impacted on Tuesday - Atlanta, Charlotte, Philly, Pittsburgh and Washington, D.C.

On Wednesday the list grows a little longer, adding in Boston and New York and Philadelphia. So we're going to see more spots along the east coast impassed as we head into our Wednesday. Of course that is the busiest day. If you're headed in this direction, pack warm clothing because you're going to need it. Those temperatures are going to be well below average for this time of year with those gusty northwesterly winds and snow on the ground throughout much of the eastern Great Lakes and across the northeast, piling up in some spots. So, this is how cold it is, Maggie. Those temperatures really on the frigid side, some ten to 20 degrees below average.

LAKE: All right, Samantha, I saw a lot of unsuspecting tourists who were not prepared packing up those bags with jackets and boots and anything they could get their hands on. It's just -

MOHR: I hope they pack wisely.

LAKE: I know and I know the travel is going to be so difficult. Thank you for bringing us up to date. Well this is a movie that has set the box office on fire.

(BEGIN VIDEO CLIP)

Male: (Inaudible) girl on fire.

LAKE: Oh, you know what I'm talking about. I'm going to talk to a critic about the record-breaking Hunger Games sequel and why one movie is never enough.

Female: You gave me a chance to live (inaudible) to do something.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

LAKE: It was a huge weekend for the box office - the Hunger Games Catching Fire smashed records for a November debut in the United States. The sequel took $161 million here and pulled in over $300 million worldwide. That's nearly double what the original movie made in its first weekend. Now, to put it into perspective, the Hunger Games sequel had the fourth highest grossing weekend of all time. You could see, this is some pretty tough competition that it's up against. It came out behind Marvel's The Avengers with over $207 million, Iron Man 3 comes in second with $175 million and Harry Potter and the Deathly Hallows still hanging in there - Part 2 with $168, let's call it $169 million.

Critic Maggie Furlong joins me from Los Angeles to talk about the Hunger Games hot sequel, and Maggie, this - we knew it was going to be a success but what is it about this movie that keeps drawing people in?

MAGGIE FURLONG, TELEVISION CRITIC: You know, she beat Batman, she beat Spiderman, she beat all of the Twilight movies. Katniss Everdeen cannot be stopped. There's something about this story - it's post-apocalyptic, they're talking about you know future events, what could happen if reality TV sort of went a step further and kids fighting kids to the death - there are these really dark themes throughout the movies, but at the end of it, it's all about Katniss Everdeen. This amazing heroin who is easy to get behind because she is so lovable, and she's going through something that you can't possibly imagine. And they manage to put it on screen movie after movie and it was really - it was an amazing follow up to the first film. And I think it deserves all the box office love, but I think that the third and the fourth films could be even bigger.

LAKE: Oh - here we are, we already see where they're going. But the problem is, when you have these franchises, I know that's what everybody likes, but the expectations are so high that the next one is going to top what we've seen before. That's hard to live up to. Some have done it, but there have been a lot of others that have faltered. Does Hunger Games, you think, have what it takes to be able to continue to grow the audience, or are we going to get a little disillusioned here?

FURLONG: I mean, I hope it does, I definitely hope it does. You mentioned you saw the top three and those are all sequels and this is a sequel as well. People love their sequels, they love (boarding) of the franchise and knowing that they get to be with these characters for several movies. In this case, it's a little bit different because the third book in the franchise was maybe the least critically loved. Fans sort of had issue with the ending - I won't spoil a thing - you should read it yourself. But it'll be interesting to see if splitting that into two movies works for them or against them the way Twilight did.

LAKE: And what about - are they going to be able to afford to keep Jennifer Lawrence? She seems so key to the success, she's so hot right now. In Hollywood, they need to get her to sign on.

FURLONG: She has signed on, no fear, sleep at night, Katniss Everdeen will always be Jennifer Lawrence. Doesn't matter how many Oscars she wins, doesn't matter how amazing American Hustle looks - her next movie. It's something that she will always go back to and she credits this with really making her career. This is a huge role for her and you can tell she appreciates all the fan love.

LAKE: That's great, and I already see the billboards for American Hustle. We'll have to talk about that one next time. Maggie (Long), thank you so much for joining us.

U.S. retailers are slashing prices in the run up to Christmas. Already the first Friday after Thanksgiving known as Black Friday is usually when the shopping frenzy kicks off in earnest. Last year, Black Friday weekend spending hit a record of nearly $60 billion, but now with Thanksgiving still three days away, the cut price Christmas rush has already begun. Alexandra Field takes a look.

(BEGIN VIDEO CLIP)

ALEXANDRA FIELD, CNN CORRESPONDENT: The mad dash used to start on Black Friday. Shoppers rushing for steals and deals. This year bargain hunting is beginning a week earlier. Walmart is slashing its prices for a pre-Black Friday sale that started on Friday. That's seven days before the shopping holiday that keeps creeping up on Thanksgiving Day.

KATHY GRANNIS, SPOKESWOMAN, NATIONAL RETAIL FEDERATION: We know last year 35 million shoppers were out - in stores and shopping online on Thanksgiving day, and we're fully expecting to see just as many people this year.

FIELD: On Thursday Walmart will open its doors at 6 p.m., Toys R Us opens at 5 p.m. But how do you entice shoppers to come inside? Big buck stores are luring shoppers in with promises of low prices and more price matching with competitors.

UNIDENTIFIED MALE: It's better to be first in line than to be last and wondering if we going to get something that you really want.

FIELD: At this Best Buy in Fort Myers, Florida, they're already camping out for Thursday's sales. Same thing in Akron, Ohio.

UNIDENTIFIED MALE: A couple of us are looking for TVs as you know presents for our family.

FIELD: The National Federation says millennials are driving the Thanksgiving Day shopping trend, but it isn't for everyone.

UNIDENTIFIED FEMALE: It's just absolutely crazy. I know they do it every year and every year I say the exact same thing - it's just crazy.

FIELD: Black Friday still draws the biggest numbers - 46 percent of consumers will hit those sales and 34 percent of shoppers will be back in stores Thanksgiving weekend. So, had enough yet? Of course not. Cyber Monday is around the corner and it isn't just for Monday anymore.

VICKI CANTRELL, EXECUTIVE DIRECTOR, SHOP.ORG: Last year, the days Cyber Monday, Tuesday, Wednesday, Thursday were all over a billion dollars online.

FIELD: Alexandra Field, CNN New York.

(END VIDEO CLIP)

LAKE: From holiday shopping to a bit of decorating. We'll be back in a moment with more. 'Tis the season. The Christmas holiday is right around the corner, and the requisite decorations are going up. The Capitol Hill Christmas tree has arrived in Washington. The 27-meter Engelmann spruce will be lit Speaker of the House John Boehner during a special ceremony on December 3rd - yes, that is a flatbed truck bringing it in. Now, if you can't wait until December 3rd for the Whitehouse to light up its tree, check this out. A family in Australia really got into the festive mood. They just smashed the Guinness world record for having the most Christmas lights on a house. Not that we can see the house through all of that. We're talking more than a half a million bulbs - that's around 50 times more than the Whitehouse tree. Laying it out, that would equal nearly 50 kilometers of lights.

And speaking of records, a reminder of how the markets closed. As you can see, very tepid trade. (Inaudible) hours for the Dow and the NASDAQ, NASDAQ briefly touched over 4,000. The Dow ended at another record high. First time for the NASDAQ by the way - over 4,000 in 13 years. The S&P 500, the only one that was lower by just a fraction, but it remains over 1,800.

And that is "Quest Means Business." I'm Maggie Lake in New York. Thanks for watching.

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