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Wall Street Braces for Rocky Start After Brexit; Anger, Resignation as UK Parliament Meets; U.S. Secretary of State John Kerry Pushes to Shore Up U.S. Ties, Loyalties; Clinton and Warren Team Up to Take on Trump; GOP Leader Hedges On Trump Being Qualified; Conservative Pundit Ditches GOP Over Trump; Volatility Grips Global Markets After U.K. Vote. Aired 9-9:30a ET

Aired June 27, 2016 - 09:00   ET

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

[09:00:00] CAROL COSTELLO, CNN ANCHOR: And good morning, I'm Carol Costello. Thank you so much for joining me.

Great Britain in turmoil this morning and U.S. investors bracing for a big hit. Wall Street opening minutes from now and Brexit set to rock stocks. World markets closing in the red. And at this hour, parliament confronts the crisis after a number of lawmakers in Britain resigned. Some voters say they were duped into supporting Britain's exit from the European Union.

Secretary of State John Kerry rushes to shore up U.S. interests there as an ugly divorce looms. He is reassuring the EU and the Britain that America will remain loyal to both.

And the British turmoil reverberates on the American campaign trail. Donald Trump and Hillary Clinton seizing on the divisions and the fear.

Our correspondents are here to break it all down from the initial bombshell to the ripples spreading across Europe and around the world. Chief business correspondent Christine Romans will preview the U.S. markets opening later this hour and Richard Quest will have the political fallout.

Let's begin with you, Christine.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Well, let's look at where markets are right now because it was a really horrible day on Friday. And there's fear there could be a little more to do here today. We have futures lower. They had been a little higher earlier on, but futures, Dow futures slipping there, about 88 points. Nasdaq futures down, S&P 500 futures lower as well. All of the gains for the year now have been erased in the S&P 500.

Global markets also closely watching what's happening in Europe. Europe, still broiled by the uncertainty by just the profound impact of this divorce will have on business and investment there. Markets detest uncertainty and that's all there is a surplus of right, is uncertainty around the world. You see European markets lower, London down 2 percent, Paris down 2 percent, Frankfurt down almost 2 percent. You had mixed to higher markets in Asia.

Carol, what this is really here is rejection by some of these voters of the UK of some 40 years of globalization. A feeling that globalization and technological advances have helped the top 1 percent, have helped the investing class but have not helped working class voters. And that is what you saw in spades in this vote. And that's where there's some parallels to what's happening in the United States.

All of that uncertainty, of course, is what causes companies to invest less, to hire less, it causes consumers to be nervous, and that's what the real fear here is -- Carol.

COSTELLO: OK, Christine Romans, many thanks.

I want to bring you to Britain now. So, Richard Quest, voters got what they wanted. They voted their anger and now there just seems to be confusion.

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: I think that's a vast understatement, Carol, if I may. Confusion would be putting it mildly. I think we're looking at outright chaos in many cases.

First of all, let's just go through the political ramifications. Behind me of course, Number 10 Downing Street, the home of the British prime minister. He held the first cabinet meeting since the referendum results this morning. Any time now, he is expected to head to the House of Commons where he will brief MPs not only obviously on the results, but his plans of resignation and also the fact he's got to go to Europe tomorrow and just begin the informal discussions, if you like, the tet-a-tet about how you actually effect this divorce.

Opposite him in the House of Commons will be an opposition party that is an even greater disarray, if that were possible. There, you have more than half the cabinet of the opposition that resigned, basically telling the leader of the opposition, Jeremy Corbyn, they have no confidence in him. They didn't he was a good leader. They thought he was the wrong man for the job and they wanted out.

Now throw all this together, at the same time, Carol, as you've got some people in the country saying what did we vote for, have we been sold a bunch of lies? Because now, Carol, the ultimate, it seems some of the promises may not be kept. Especially the idea of spending half a billion dollars a week, $350 million a week, on the National Health Service.

Listen to one of the Leave campaigners, Nigel Farage.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The 350 million pounds a week we sent to the EU, which we will no longer send to the EU, can you guarantee that's going to get to the NHS?

NIGEL FARAGE, BREXIT LEADER: No, I can't. And I would never have made that claim? UNIDENTIFIED FEMALE: Seventeen million people have voted for Leave.

FARAGE: Yes.

UNIDENTIFIED FEMALE: Based -- I don't know how many people voted on the basis of that answer, but that was a huge part of the propaganda. You're now saying that's a mistake?

FARAGE: We have a 10 billion pound a year, 34 million pound that featherbed. That is going to be free money that we can spend.

(END VIDEO CLIP)

QUEST: The problem, Carol, is that free money to be spent in the campaign was spent five or six times. It was spent on the NHS. It was spent buying off farmers, it was spent buying rural development. It was spent on industrial policy for steelworkers. It was spent on the pensioners. It was spent on education.

Everybody said this money will be spent on them. And now, of course, everybody has realized, it is classic pound part and only a couple of pence in it.

[09:05:12] COSTELLO: Wow. So, Richard, a question for you. Part of the -- part of this vote had to do with immigration, too, that immigrants were coming into Britain and taking jobs away from blue- collar workers there. So how will this help those blue-collar workers? Will they kick the immigrants out? What's going to happen?

QUEST: No, no, no. Let's be absolutely clear. Absolutely clear. It's been made abundantly clear that anybody who is here already stays. And there's good reason for that because there's 1.2 million British residents living overseas that could be kicked out of France, Germany, or Spain. So there's no question, those who are here on international treaties gets to stay. They're grandfathered in.

The question of future immigration, it could just be another promise that was made that's not being kept or can't be kept. The reality is, we don't know, Carol. I mean, will Europe require Britain to take more immigration? Will there still be freedom of movement of labor? These are the bigger notes. What is the price that Europe is going to demand of their resident in that building to keep us having access to the single market? That is the unknown.

So, Carol, when I say to you that it's chaos or confusion, and uncertainty, this isn't hyperbole. I promise you this. The cab ride from CNN's bureau to here, the cab driver, I cannot use the word he used to me, on a network, live network, but he basically said, are we ruined? He used a slightly more fruity version of that same phrase.

(LAUGHTER)

COSTELLO: OK. I'm using my imagination on that way. A much more fruity word.

Richard Quest, Christine Romans, thank you so much. Secretary of State John Kerry meeting separately with British and EU

leaders. Kerry rushing to contain any potential damage to U.S. interest while underscored Washington's loyalty to both sides of this growing chasm.

Let's turn to Nic Robertson now, our international diplomatic editor. He's in the Belgian capital of Brussels. Hi, Nic.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, hi there, Carol. He came right into the heart of the problem here. On the one side, you have the European Union that's demanding and saying that Britain should start its negotiations in good faith soon to exit the European Union. The British people have spoken. Get on with it. And on the other side in Britain, you just heard from Richard there saying the political chaos, there isn't even a leader in Britain that the European Union could take his words at face value.

David Cameron, the prime minister, is resigning. There's no replacement on the horizon. No vision yet from the British side about when they will start this negotiation, and that worries the European Union.

Secretary Kerry came right into the middle of that. He met with the EU foreign policy chief here. They discussed this issue. Secretary Kerry, afterwards, talked about it, and saying that we didn't want anyone going off hotheaded, that people should be calm and rationale about this. That everyone has a lot in common. This is a historic alliance that Britain has been part of it for a long time. The United States keep Britain as a special ally. It still has a very good relationship with the European Union.

But the reality is here that there's a problem that Britain and Europe are out of step on how they should be done. Secretary Kerry who's trying to sort of -- if you will, sort of trying to put that fire out. This is what he said.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: On EU, the United States cares about a strong EU. Why? Because there isn't one issue on which we work today, whether it is climate change or whether it's counterterrorism, migration, immigration, you name it, we are working together. And it's through the strength of those countries coming together that we are able to make good things happen.

(END VIDEO CLIP)

ROBERTSON: So the making good things happen right now also includes stopping the turmoil in the international market. So that's what Secretary Kerry is hoping that his visit here will have achieved -- will help achieve. And that is just stabilizing the situation, telling everyone just to chill, calm down a little bit. Take your time. It's going to take time to work through this.

But you know, frustrations on the European side are high. Britain has not been the best partner in the past. I mean, it hasn't signed up to everything in Europe. It wasn't part of the Euro currency zone. It wasn't part of the free movement passport zone. So it's sort of got a bad reputation here already, Carol.

COSTELLO: We just got something over our wires about the German chancellor, Angela Merkel. She says she does not want to enter into talks with the UK about, you know, Britain leaving the European Union until it formally -- until Britain formally triggers the exit process.

[09:10:06] So it seems to me that Angela Merkel is slowing things down. Why might she be doing that?

ROBERTSON: She is and she is sort of the one voice in Europe that's emerging even though her foreign minister, justice minister, and finance minister have all in the past couple of days said -- have been part of that chorus that says Britain should get on with this and speed it up.

I think what Angela Merkel recognizes here is that any decisions made in haste in Britain are going to be counterproductive. They might produce a leader that's going to be harder for the European Union to stomach, to get on with. That there are important -- you know, important trade, there is important trade. Significant and important trade between Britain and Germany. Britain and the European Union.

And people that have a lot at stake in Germany certainly has a lot at stake in this. Don't want to lose out by rushing into quick decisions. And it's a political reality. Chaos in Britain, Angela Merkel sees that, and is perhaps being a wiser, calmer head here. But she's just one voice. There are 26 other European leaders involved in this -- Carol.

COSTELLO: All right, Nic Robertson, reporting live from Brussels this morning. Thank you.

Brexit has taken center stage in American presidential politics. Hillary Clinton wasting no time in releasing a Brexit attack ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Every president is tested by world events. But Donald Trump thinks about how his golf resort can profit from them.

DONALD TRUMP (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: When the pound goes down, more people are coming to Turnberry.

(END VIDEO CLIP)

COSTELLO: Next hour, Mrs. Clinton joins forces with Trump critic, Senator Elizabeth Warren. That will take place in Ohio, in blue- collar Ohio. The two Democratic powerhouses stumping together for the first time, fueling even more VP rumors.

CNN's Jeff Zeleny is live in Cincinnati where the rally -- it's just about to take place.

Good morning, Jeff. JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning,

Carol. There are fewer Democrats who have gotten under Donald Trump's skin more than Elizabeth Warren in these last recent weeks. Hillary Clinton has been admiring this from afar, so today she invited her to join her on stage in battle ground Ohio.

(BEGIN VIDEOTAPE)

ZELENY (voice-over): This morning, Hillary Clinton and Elizabeth Warren to make their campaigning debut, testing their chemistry in Cincinnati.

CNN has learned the Massachusetts senator is on a short list of potential running mates being vetted by Clinton. A choice that could potentially excite liberals and Bernie Sanders' supporters to enthusiastically back a Clinton-Warren ticket.

Warren has emerged as one of Donald Trump's harshest critics.

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: A small, insecure money grubber.

ZELENY: Appearing with Clinton as she prepares a new line of attack against the presumptive Republican nominee.

ERIN BURNETT, CNN ANCHOR: Stocks tank around the world.

TRUMP: Brand new sprinkler system, the highest level.

BURNETT: He's talking about his new sprinkler system.

ZELENY: The Clinton campaign releasing a new ad, slamming Trump's response to the U.K. split from the European Union.

UNIDENTIFIED MALE: In a volatile world, the last thing we need is a volatile president.

ZELENY: Trump, touring his new golf course in Scotland the day after the vote, calling the economic fallout a good thing for his business.

TRUMP: When the pound goes down, more people are coming to Turnberry, frankly.

ZELENY: And comparing the outcome of the Brexit referendum to the same momentum that's carrying him to the GOP nomination.

TRUMP: People want to take their country back, so I think you're going to have this happen more and more. I really believe that. And I think it's happening in the United States. It's happening by the fact that I've done so well in the polls.

ZELENY: While rallying support on Sunday from the nation's mayors' meeting in Indianapolis, Clinton cautioned against a Trump presidency.

HILLARY CLINTON (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: Bombastic comments in turbulent times can actually cause more turbulence. (END VIDEOTAPE)

ZELENY: Now Elizabeth Warren certainly not the only Democratic being considered. Here's a list of at least a few more. Tim Kaine, that Democratic senator from Virginia, certainly on the list, as well as potentially Senator Sherrod Brown from here in Ohio, as well as Julian Castro from San Antonio, Texas, who's the Housing and Urban Development secretary right now -- Carol.

COSTELLO: All right. Jeff Zeleny, reporting live from Cincinnati this morning. Thank you.

Did you catch all that? Because it's going to be a really busy morning once again. Here is a roundup of everything we're watching for you right now. About 15 minutes from now, the UK parliament is meeting amid this growing turmoil. Of course we're watching it. At the same time, Wall Street is bracing for the opening bell and what could be a very rocky day for stocks.

Next hour, we're expecting the Supreme Court to issue a major abortion ruling. Our team is standing by. And in just about an hour and a half, Hillary Clinton and Elizabeth Warren will team up for that campaign rally we're just talking about.

We are on top of all of it. Stick around.

(COMMERCIAL BREAK)

COSTELLO: A big policy speech tomorrow for Donald Trump. Can he convince the GOP establishment he is their guy? Phil Mattingly is covering this for us this morning. Good morning.

PHIL MATTINGLY, CNN CORRESPONDENT: Good morning, Carol. Donald Trump comes back from Scotland, back in the United States, but still facing some serious questions, serious new questions. Here is kind of a good way of looking at it.

I spoke to six top GOP officials over the weekend and asked each of them, what is their biggest concern right now as Donald Trump really hits kind of the main pathway into the Republican convention?

All six had different answers. One said infrastructure. Another said fundraising, another said the fact that he was in Scotland, which as this official added it isn't exactly a swing state. These are all major concerns that you really heard from Senate Majority Leader Mitch McConnell this weekend. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you believe he is qualified? How do you convince all those voters to think he isn't?

SENATOR MITCH MCCONNELL (R), MAJORITY LEADER: Well, look, I think there is no question that he's made a number of mistakes over the last few weeks. I think they're beginning to right the ship. It is a long time until November, and the burden obviously will be on him to convince people that he can handle this job.

UNIDENTIFIED MALE: I didn't hear you say whether you thought he was qualified.

MCCONNELL: Look, that is up to the American people to decide.

(END VIDEO CLIP)

[09:20:10]MATTINGLY: Not exactly a rousing endorsement from somebody who is behind Donald Trump sensibly. Now, the reality here, Carol, is this. Before Donald Trump took that trip to Scotland, he really had his best week of the campaign. Big fundraising numbers for the first time.

The campaign's chairman, Paul Manafort had a number of hires and started to do a switch, infrastructure concerns. Donald Trump gave a speech that was well received and largely on script.

The question becomes can he continue that movement forward or does he take any steps back? Carol, you noted that speech in Pennsylvania tomorrow, another policy speech. It will be interesting to see if he continues his sticking to the teleprompter, sticking to message and trying to assuage a lot of very serious concerns --

COSTELLO: So do we know if he will use a teleprompter on Tuesday?

MATTINGLY: We don't know that yet. You won't actually find out until you walk into the even and see them standing up there.

COSTELLO: So this major policy speech, it has to do with the economy for blue collar workers, manufacturing, is it that?

MATTINGLY: Here is one of the most interesting complaints I've heard repeatedly from Republican officials. Why he is in Scotland? Why is he in California? Why is he in places that are not swing states? Donald Trump will be in Pennsylvania.

A swing state that he believes based on the demographics of that state, he can absolutely put in play, even though it has been traditionally blue, over the last couple of cycles, you might be seeing the campaign roll out a strategy that GOP officials have been hoping they would do at least for the last couple of months, certainly in the last couple of weeks.

COSTELLO: All right, Phil Mattingly, thanks so much.

So let's talk about this with CNN commentator, Amanda Carpenter, who is the former communications director for Senator Ted Cruz, John Phillips is a talk show radio host and a Trump supporter, and Emily Tisch Sussman is a Democratic strategist and Hillary Clinton supporter. Welcome to all of you.

Thanks for being here. So John, are you relieved that Mr. Trump is giving his major policy speech in a swing state, Pennsylvania?

JOHN PHILLIPS, TALK RADIO HOST, KABC: That's right. It's been a rough three weeks for him. He fired his campaign manager, Corey Lewandowski. He is hoping to right the ship. Hopefully it won't get worse than it has been. It certainly -- I think there is only one way to go, and that's up.

Look, he has a really tough situation right now in the Republican Party, and that he is the Rodney Dangerfield character in a party that's used to voting for the Ted Knight guy.

In these latest polls that have been coming out, including the ABC poll, his numbers have dropped dramatically, but they've dropped among Republicans.

So in this speech that he is giving in Pennsylvania, he needs to give Republicans some security. He needs to show Republicans that he can give a serious policy speech on a subject where the country is very uneasy right now.

And if he lands this speech then I think the ship could be as Mitch McConnell said put on the right track.

COSTELLO: OK, because the ship does need to be put on the right track. Amanda, I'll pose this question to you. The most disturbing number in an AB/"Washington Post" poll released over the weekend for Mr. Trump concerns Republicans.

As "The Post" put it, nearly one-third of Republicans and Republican leaning independents say Trump is unqualified for office, 18 percent say he does not represent their beliefs.

There is a list of prominent Republicans who say they're leaning toward Hillary Clinton. I'm talking about big names like Richard Armitage, David Petraues, Henry Paulson, Brent Scocroft. So how can Mr. Trump right the ship, Amanda, at this late date?

AMANDA CARPENTER, CNN POLITICAL COMMENTATOR: The time is certainly running out. I think Trump supporters would say, hey, listen, those are members of the establishment. They weren't right before. They haven't succeeded in any policy battles so why do we need them now. That's sort of the problem.

I think Donald Trump has approached this election like it's an "Apprentice" contest. Just be the last guy standing, slash and burn politics until the end and then no one standing around you.

Look at Mitch McConnell's comments over the weekend. He could not say the Republican nominee was qualified. This is a very basic task. Meanwhile, you have the Democrats are running around saying Hillary Clinton is the most qualified nominee of all time.

So there is such a huge mismatch here and here is the thing I fear. Donald Trump may give a great speech now although frankly, it is very strange, we don't know what the subject is at this late stage of the game.

But we see him take one step forward, two steps back. He gave a descent speech about Hillary Clinton's problems last week and then stepped all over it by going to Scotland and not being able to handle Brexit questions that well.

So he is running out of time. He has to find a way to get Republicans to stand with him. But with only a few weeks before the convention, we don't even know who is going to be willing to speak on his behalf. These are huge, huge problems.

COSTELLO: So on the subject of Hillary Clinton, Emily, she is campaigning in blue collar Ohio, right, and she is taking Senator Elizabeth Warren with her. In the same "Washington Post"/ABC News poll, she is still doing poorly among blue collar white voters. So I'm not sure that people in Southern Ohio really know who Senator Elizabeth Warren is, and if she will resonate? So why is Senator Warren with her?

[09:25:05] EMILY TISCH SUSSMAN, DEMOCRATIC STRATEGIST: So interestingly, Warren considering how short she has been in the Senate, actually does have a fairly name id. People really know who she is. She really is a rock star within the party. Remember before the Sanders support came --

COSTELLO: Maybe within the party, but I'm talking about one group of supporters that Hillary Clinton needs to improve upon.

SUSSMAN: Absolutely. And Warren has been even stronger than Sanders had always been. Sanders had broken off a lot of these voters, and Warren actually was the original Sanders, right? Before there was Sanders, there was Draft Warren.

So the fact that she actually didn't endorse during the primary and is now campaigning with Clinton, I think really does say a lot and brings a lot of credibility to bring that left piece over to the Clinton campaign.

That a lot of people were concerned weren't there. Not only are Trump's numbers going down with Republicans, but Clinton's numbers are going up with base Democratic voters, and those that blue collar set of workers that people were saying would potentially break for Trump are actually now coming back to Clinton partly because she is solidifying the base of the party.

So she really is doing what she needs to do as Trump, as everyone is agreeing, is crashing and burning.

COSTELLO: OK, so John, I want to go back to Brexit for just a second. The voters in Britain voted to leave the European Union in part because they feared immigrants were taking their jobs. Now many of those same voters feel the politicians lied to them because Britain is not going to kick out any immigrants.

And who knows what will happen to immigration in the long run? So isn't that the same thing that Donald Trump may have to deal with? Because he still hasn't answered the question, what are you going to do with these 11 million immigrants still here and can he really build a wall?

PHILLIPS: Well, it shows you right now how important the issue of immigration is, not just in the United States but worldwide. England is more liberal than mows liberal states in the United States. They voted to exit the European Union.

When you go back to the United States and that same ABC News/ "Washington Post" poll that you were citing, 56 percent of Americans want to go in a different direction that the direction that President Obama is taking us in.

So there is a lot of people who like Donald Trump's ideas. There is a lot of people who want to secure the boarders and sign up to defending American sovereignty, and that's why Donald Trump needs to stop the unforced errors and get back to these issues that have popularity and massive deal.

COSTELLO: But Amanda, I'll ask you that same question because, you know, and I understand the anger, and John is right on with that, right? But voters are now angry because they feel their politicians lied to them. There really isn't anything they can do with the immigrant population that's already there.

CARPENTER: Here is the thing. They're going to have it go through a process of deciding what exiting the E.U. means. I think it is sort of a fault of the elite campaign for not clearly outlining what would happen.

But that said, I think there has been a mistake by a lot of people in the media saying these people don't know what was going to happen. They're uneducated. They're regretting it. I think it maybe what is happening here.

There is sort of caution being thrown to the wind, people are so fed up, they say listen, we've been, you know, hurt economically, the bottom rungs of the ladder, the elites have done so well. We don't care what happens because it can't get worst.

So I think that feeling is there. I think that feeling is here in America. It is why Donald Trump has been able to get away with not providing any clear policy explanations behind his ideas.

Because people are so fed up and angry, they sort of don't care what happens, they just want see some kind of change. Things have been so bad. There is a feeling it can't get worst. I think it can, but that's what we're seeing play out.

COSTELLO: All right, I'm going to have to leave it there because I want to get to the opening bell on Wall Street. As you know, that Brexit vote could have major repercussions for the American stock market. So Amanda Carpenter, John Phillips, Emily Tisch Sussman, thanks so much.

As I said, Wall Street set to open at any minute now. It appears that markets are headed for another rocky start. The initial shock may have worn off, but investors are still reacting to plenty of uncertainty.

With U.S. stock futures down again this morning, Alison Kosik is following the numbers from the New York Stock Exchange. Take it away, Alison.

ALISON KOSIK, CNN MONEY CORRESPONDENT: Good morning, Carol. So guess what, the Brexit freak out not over yet. We do expect to see stocks continue to tack on more losses when the opening bell rings in about 45 seconds from now.

Stocks overseas, they continue to fall, but not as much as Friday. The good news is we aren't seeing the capitulation that everybody was worried that would happen on Monday morning.

So we are seeing the major indexes in London, Paris, and Frankfurt, they're falling, but there was a big rebound in Tokyo. So yes, the initial shock of the U.K. leaving the E.U. has worn off, but everybody wants to know what now.

Well, what comes up ahead, the road ahead will be bumpy. Don't be surprised to see more volatility. I'm talking about big up and down swings in stocks as this investors, you know, they try to keep their eye on what happens with U.K. and the European Union.

You are continuing to see a sell-off here in U.S. stocks because there's uncertainty about how multinational companies will conduct business in the U.K. and the E.U.