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Stock Markets Deepest Dive Since 2015; Trump's Lawyers Objects Meeting with Bob Mueller; Successful Businessman Sent Back to Jordan; House Intelligence Committee Votes To Release Democratic Memo; Power Struggle Leads To State Of Emergency In Maldives; E.U And U.K. Teams Discuss Brexit Implementation; Europe's Market Following Asia In Global Sell-Off; Space X To Launch Falcon Heavy; A Little Goes A Long Way. Aired 3-4a ET

Aired February 06, 2018 - 03:00   ET

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

[03:00:00] ROSEMARY CHURCH, CNN ANCHOR: Asia markets tumble following a disastrous day for the Dow, but will Europe look similar. We are live in London where trading just open.

The vice president is en route to the Olympics. He is not mincing words on the kind of diplomacy he's packed for North Korea.

Plus, if this launch succeeds, Elon Musk will hold the key to the most powerful rocket in the world. What this means for a mission to Mars. We will have that later this hour.

Hello and welcome to our viewers joining us from all around the world. I'm Rosemary Church, and this is CNN Newsroom.

Well, the trading day is just beginning to the financial markets across Europe and we are waiting to see if they follow the downward trend in the U.S. and across Asia. Tokyo's Nikkei fell nearly 5 percent Tuesday, in Hong Kong the Hang Seng just closed, it was down almost 5 percent at last check. You see there, that's about we're at that. And the markets in Shanghai and Australia also in negative territory.

That all follows a record loss on Wall Street. The Dow suffered its largest point decline in history 1075 point. And it also saw largest intraday point decline when it dropped nearly 1600 points in the afternoon.

In percentage terms the Dow fell 4.6 percent far less than the 22 percent drop in October 1987. That put in perspective for us.

So, for more on the Asia markets, CNN's Paula Newton joins us live from Seoul, South Korea. So, Paula, the experts tell us don't panic, it's a correction, don't sell-off stocks and shares if you don't to, just stick it out. But the drop on Wall Street is sending jitters across the globe. Markets in Asia took a tumble. What's the feeling across the region?

PAULA NEWTON, CORRESPONDENT, CNN: Yes, of course, it is. Here's the feeling. They look at not just what happened in the United States terms of the close there, Rosemary. But the fact that that feverishly looking for a bottom, Rosemary, it didn't find one.

So when Asia woke and saw what happened as you saw that very choppy trading, quite frankly, send shivers down the spine didn't well on those indices and they didn't want to be cut out, of course, they sell off.

But again, looking forward to the United States they could not see that there had been a bottom with the futures opening in several hours from now. The said futures in the United States pointing significantly southward. And for that reason, the selloff happens.

What I will say what is the difference here in Asia is really their central banks, and they might be willing they might have more room to do a little bit more in terms of easing up that economy, putting more money through the economy as opposed to what the United States is doing which is obviously tightening those interest rates, hiking them, which means there is less money in the economy and that is because in the united -- in the United States.

Rosemary, this story isn't over yet in terms of those markets falling. And for that reason people here throughout the region despite what is robust growth in the region people here is still quite jittery about those valuations especially in the Unites States.

CHURCH: Yes, understood. Paula Newton joining us there from Seoul, South Korea where she's watching the Asia markets. I appreciate that. And of course, the trading day is just getting started across Europe.

CNN's Isa Soares is live in London. Isa, I'm almost scared to ask you, how is it looking.

ISA SOARES, INTERNATIONAL CORRESPONDENT, CNN: Not looking great. There is wild and really chaotic trading that we saw in Wall Street actually it's being felt right here across here.

Let's bring and look at the numbers, the minute it open down it started going this down. The FTSE is down 1, 2 percent. Now if you can look at it it's now 3 percent here in London. The Xetra DAX is taking slightly slow to catch up.

But look up, Paris CAC it's down more than 3 percent as well as is this Eurex SMI and it really is that ripple effect that we saw from the U.S. catching on not just in Asia, but also in Europe. Worth bearing in mind as well that when the Dow Jones was actually tumbling yesterday it was 7 o'clock here.

So, the markets really trying to catch up. And that feeling, the brunt. But you know, picking up what Paula was saying there just now, this is a very different scenario that we have seen previously.

You and I have spoken a great length before, Rosie, about the global financial crisis that, you know, the guideline normally was the global growth will be low, as well as inflation will be low. And so what the central banks will do they will try and help that by actually stepping in and now in keeping interest rates low, but is now shifted and now you're seeing really stock markets reacting for that trying to really find a new guideline, trying to reevaluate.

[03:05:00] And that is exactly what is happening with the FTSE now paring back to 3 percent, the Paris CAC 3, down 3 percent or so and the Xetra DAX still playing catch-up. But across the board it's pretty bloody day.

And now expect it to be a couple of bloody and next -- the next couple of days to be pretty bloody as investors try to makes sense, Rosie, of what exactly is happening in the United States and how this is going to ship. But in many ways this is the perfect storm.

But of course, what's good for the U.S. economy is in good for the markets. So it's really investors trying to lick their wounds trying to make sense of what is happening and really shifting the way they were reevaluating, the way they are looking at the market.

But of course, the numbers what triggered this, Rosie was of course, the data that came out last week the jobs numbers which much better and that's good news for the U.S. economy, that's good news for President Trump but that means that now investors need to shift the way they are looking at these markets and shift the way they actually trading.

So that's exactly what we are seeing. Look at the DAX now. Xetra DAX now finally catching up as we mentioned that would happen. It's always a bit slower but now down 3 percent, so expected to be along and really turbulent and perhaps wild, perhaps chaotic day in Europe as European stock markets follow through from that ripple effect that we saw in the U.S. and also Asia, Rosie.

CHURCH: Yes, just the start of the day and we are already seeing around 3 percent losses there across the board. We will keep an eye on this.

Isa Soares joining us from London with all of that. Many thanks to you. And joining me now from London Jasper Lawler is the head of research with the London Capital Group. Thanks so much for being with us in sharing your perspective on what's happening right now.

Of course, the Dow plunged more than 1100 points markets across Asia followed suit, and we just saw in Europe the same thing. So, most analyst tell us not to panic. It's just a correction. But clearly, investors are pulling out. So what's your advice to people watching their retirement money does with this point?

JASPER LAWLER, HEAD OF RESEARCH, LONDON CAPITAL GROUP: Well, it's right to say that in the context of the move that we've seen over the last 12 months, even over the last 10 years really it is a very small correction but obviously it's a correction that happened very fast.

I'm always getting news alert from my phone last night just several in a row, 100 points down, another 100 points down, another 100 points down in the Dow.

That kind of rapid movement in the stock -- stock market is not typical. And we've seen volatility jump by its largest amount ever. So the amount, you know, you expect the stock market to move versus its average over the last few days, that's at record levels that jump quite dramatically.

So this is not a normal course of event and I think probably a defensive approach to the market is probably warranted as we approach is because we are now in perhaps a more different ball game.

And we really got us going last week and why we are still a bit jittery is the interest rates are heading higher, bond yields are heading higher and that's actually that makes the outlook for the stock market and less favorable if the stock market has been going up for this many years in a row. And you're getting a safer return on something like U.S. treasury bond earning, perhaps 3 percent a year.

Perhaps there is going to be a tendency now for investors to take their profits that they've had in the stock market and shift over to something safer that can earn to tidy returns. So, that's the worry that we're facing. And that's why stock markets could lower from here.

CHURCH: Right. So, as you say, a small but fast correction. How long do you expect this downward trend this correction to last.

LAWLER: Well, I think there, so we took some of the fundamental reasons why opinions might be changing here. But there is a lot of technical factors here, and so one statistic, for example, is that the S&P 500 went 300 days without the .5 percent correction without a drop in the day of .5 percent.

So obviously when we did have that up beyond that range. That traders have got used to there was almost a sense of not knowing what to do. So, stock lost orders got triggered so that automatically cut traders down to the market. Algorithms that are making prices in the market they switched off.

And so suddenly just flew slightly abnormally large move in the market that was just the complete absence of buyers and that's why you saw the market plummet here. And what we're doing technically at the moment is trying to search out some sort of bottom.

CHURCH: Right.

LAWLER: It didn't happen overnight in U.S. futures that we have some slight back. I would imagine the next couple of days are going to be very volatile. We could see lower prices, but sometime this week I would imagine that we start to pull back and see a bit of a recovery here as deep buyers come in and feel a bit more confident.

CHURCH: So where would that bottom be, what sort of percentages are we talking about in terms of losses?

[03:09:59] LAWLER: Well, I wish I knew precisely but certainly we saw, you know, we've seen 5 percent moves in the day, that's completely out of the ballpark to suggest that we can see more minus five percent days. But I said in a note just a few days ago that I think sometime in this

quarter we can expect the 10 percent correction in U.S. stock market, so we're already well into that. And so I think that 10 percent mark is a place a lot of people had in their minds to find more value in the market. So once we get to that kind of area, you know, that's when you're going to start attracting to come longer-term investors.

And so, that can -- that only needs to be a few more percentage points down from here, so it doesn't have to be a lot further to go before we could see that, the initial set of value by coming to market.

CHURCH: All right, Jasper Lawler, thanks so much for your analysis and perspective. I appreciate it on a day like this. Thank you.

LAWLER: Thank you.

CHURCH: Well, as the U.S. stock market took a dive President Donald Trump was in Ohio touting jobs and the economy. The Dow has now lost more than a quarter of its gains 27 percent since Mr. Trump won the election in November 2016.

Now, the president dodge questions about the stock market drop as he return to the White House Monday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: President Trump...

UNIDENTIFIED MALE: Anything on the stock markets?

UNIDENTIFIED MALE: Any comment on the Dow?

(END VIDEO CLIP)

CHURCH: Meanwhile, democrats are one step closer to going public with their response to the republican FBI memo. The House intelligence committee voted Monday to release this days after republicans blocked it while sharing their controversial memo instead.

CNN's Manu Raju has the latest.

MANU RAJU, SENIOR CONGRESSIONAL CORRESPONDENT, CNN: The House intelligence committee now putting the memo back to President Trump's desk for the second straight week, this after unanimous vote in the committee to release the democratic memo to provide the other side of the argument about exactly what happened and how this surveillance warrant was obtained to monitor the communications of that Trump foreign policy adviser Carter Page.

You'd recall that the memo released last week by the committee that President Trump declassified alleges abused by the FBI and how they obtained that surveillance warrant allowing the president himself to argue that the whole Russia investigation is a hoax, that he's been vindicated as a result of this allegation, similar allegations.

What the president has made have been rebutted by some members of his own party. Remember the last after the republicans opposed the release of the democratic memo last week because they say they had enough time to review it now arguing to review it. And now agreeing in a unanimous vote in the intelligence committee the set for President Trump's desk to result of this memo authored by the democratic Congressman Adam Schiff.

Now, the president who have five days to decide whether or not to object or agree to its release. And after that five day period we'll see what the president decide to do, if he decides to redact it in any way or he decides to block its release or allow it to happen.

And if he does decide to block it, will the House intelligence committee vote to override the president. That is something that has not been decided yet by the House intelligence committee. Republicans now for now republicans and democrats on the committee say the president should release this memo allow for the public to evaluate it for themselves.

But the White House tonight not saying what they will do, in fact, saying that they are still evaluating this proposal this memo. We'll see if the president decides to do within this five day period.

Manu Raju, CNN, Capitol Hill.

CHURCH: Well, Donald Trump lawyers are reportedly advising him not to talk to special counsel Robert Mueller in the Russia investigation. According to the New York Times their concern the president may get lying then have to face charges.

Now CNN has reported Mr. Trump's lawyers believed Mueller's team has not met the high threshold it needs for a face-to-face interview. The president has said publicly he is willing to speak with Mueller.

Co-author of the daily newsletter Politico's Playbook Daniel Lipmann joins me now from Washington. Thanks so much for being with us.

DANIEL LIPPMAN, CO-AUTHOR, POLITICO'S PLAYBOOK: Thanks for having me.

CHURCH: So the New York Times is reporting that President Trump's lawyers want him to refuse any interview in the Russia probe, why? What are they afraid of here?

LIPPMAN: They're worried that he could perjure himself if he is under withering questioning by seniorly -- senior trained lawyers for the FBI who work for Robert Mueller. These are people who went to Harvard Law School. They are very smart at sucking out any lies and the lawyers for Trump are worried that he could trip himself up and, you know, face charges he would've otherwise faced had he not granted an interview.

[03:14:54] CHURCH: Now of course, Mr. Trump had previously said that he look forward to talking to special counsel Robert Mueller, but gave himself an out by saying it was ultimately up to his lawyers. Well, now they've made it clear they don't want him to do it.

Did he ever really intend to give an interview to Mueller, was this always going to be the outcome the lawyers would step in and say no, it's not going to happen.

LIPPMAN: He may still talk to Mueller because he doesn't want to be, you know, given a subpoena and forced to testify to a grand jury because it would make him look like he's hiding something, and so she may think the risk is worth the reward of actually saying I have nothing to hide. I'm going to talk to Robert Mueller, I'm going to clear my name.

But it's really unclear if he's going to actually make that step. We should remember that he's been sued thousands of times in the past and he had to give depositions and he had to admit in those depositions that he's said things that were not true, he's lied, but this would be the highest stakes he's ever faced in a legal proceeding.

CHURCH: Right. And President Trump's lawyers say that Mueller has not met the threshold for presidential interview. Is that the case?

LIPPMAN: It's a hard threshold to define. There is no legal, you know, definition. So I think Mueller, you know, right he wants to talk to Trump because this is all have been about the Trump campaign and about their actions in the White House.

And so it seems pretty reasonable to actually want to talk to the principal. This is the guy that has been deciding things about Michael Flynn, Paul Manafort, and so he's at the center of all of this action. And so, it makes sense that he would actually want to talk to the guy in the middle of all this.

CHURCH: And you touched on this at the start that Mr. Trump's lawyers apparently concerned about a perjury trap if he's interviewed, but if Mr. Trump simply tells the truth is there any reason for him to worry about the outcome?

LIPPMAN: Even if he tells the truth they could still get him. And so if they are able to formulate new charges against either Trump himself or others senior aides without even an interview. I think Trump is thinking, you know, that this is all been a fake probe. It's a witch hunt.

But we've seen real charges here. And so, I don't think they are intentionally trying to trip up the president. They just want the truth. And so, because Trump he often doesn't say things that are entirely accurate that may be where the problem would lie.

CHURCH: So what's going on here exactly then, given Robert Mueller can eventually issue a subpoena, so how long would Mr. Trump and his lawyers be holding out here and what's the use of it if ultimately Mueller just issues a subpoena.

LIPPMAN: So if he issues a subpoena they can try to fight it. They may not be successful. You know, presidents have had to give testimony and give interviews in past investigations and so Trump can't say that this is unprecedented. This would go through to the U.S. district court, to the appeals court, even the Supreme Court and they would probably side with Robert Mueller, a person they probably respect much more than President Donald Trump. CHURCH: Interesting. On another topic, of course, a House intelligence committee democrats voted unanimously Monday to release their rebuttal memo in reply to the GOP's controversial Nunes memo that the president said indicates him, but now of course it is up to Mr. Trump himself to declassify that democrat memo and allow its release. So, how likely is it that he'll do that?

LIPPMAN: So, the White House spokesman Raj Shah said today that it's uncertain how President Trump will decide on this issue. He was very willing to release the Nunes memo, but this is a different kettle of fish because democratic -- democratic members of Congress they wrote this memo to rebut the Nunes memo, so it would make Trump look bad by default.

And so it's not really in the interest of Trump to actually help releases memo, but he has said that he is all about transparency. And so I think a lot of republicans they want this whole controversy to be over with release all the memos in this battle of the memo.

CHURCH: Yes. I mean, the optics would be unusual, wouldn't they, if he doesn't allow, but I guess we will see how this plays out. Daniel Lippman, thank you so much for joining us. We appreciate it.

LIPPMAN: Thanks for having me.

CHURCH: And we'll take a short break here, but athletes are not the only ones going to the Olympics. North Korea is also sending along some statement and not just anybody. The leader of Kim Jong-un's favorite girl group just survived.

[03:20:01] Plus.

(BEGIN VIDEO CLIP)

AMER OTHMAN ADI, DEPORTED TO JORDAN: Even if anybody will stop their dream I won't let them because (Inaudible).

(END VIDEO CLIP)

CHURCH: A family torn apart after nearly 40 years of living and working in the United States. Deportation forces a successful businessman back to Jordan.

(COMMERCIAL BREAK)

CHURCH: Welcome back, everyone. Palestinian Amer Adi has -- he came to the United States 39 years ago like so many hoping for new life. Now he's back in Jordan, but not by choice.

Jomana Karadsheh has his story.

JOMANA KARADSHEH, CORRESPONDENT, CNN: The family of reunion no one here wanted. It's been years since Amer Othman Adi last saw his mother, in her arms now, a broken man who is deported back to Jordan, the country he left nearly four decades ago to pursue his American dream. (BEGIN VIDEO CLIP)

ADI: What happened is unjust, not right. And everybody back there knows that. What Trump administration is doing is something that is inexplicable. You cannot even explain it.

(END VIDEO CLIP)

KARADSHEH: The successful businessman and father of four is credited with creating jobs and revitalizing downtown Youngstown, Ohio.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He is an American in every sense of the work.

(END VIDEO CLIP)

KARADSHEH: Ohio Congressman Tim Ryan describes Adi as a pillar of their community.

(BEGIN VIDEO CLIP)

TIM RYAN, (D) UNITED STATES REPRESENTATIVE: If you would see the breath of -- breath of support that this gentleman gets from, you know, whether it's his Italian Irish Catholic congressman or an African-American Pentecostal woman who is supporting him or the working class people I saw his shop the day they thought he was going to get deported.

This person has brought this community together in Youngstown, Ohio.

(END VIDEO CLIP)

KARADSHEH: But his visa expired in the early 1990s. Adi did have a valid work permit though and pay taxes he says. His attempts to gain permanent residency were complicated by immigration officials who said his first marriage to an American was a sham. It's a claim Adi and his first wife denied.

Still in statement to CNN immigration officials say, quote, "Over the last decade. Mr. Othman's immigration case has undergone exhaustive judicial review at multiple levels of the nation's courts. In each review, the courts have uniformly held that Mr. Othman does not have a legal basis to remain in the U.S."

Through proposed legislation specific to Adi, Congressman Ryan was able to secure consecutive states of a 2009 deportation order, but with the Trump presidency came a crackdown on illegal immigration tens of thousands have been rounded up by Immigration and Customs agents.

According to Human Rights Watch many like Adi are deeply rooted in their communities with no criminal conviction.

(BEGIN VIDEO CLIP)

[03:25:00] RYAN: To watch these families get ripped apart is the most heartbreaking thing any American citizen could ever see and it doesn't mean you're not because you're for these families. It doesn't mean you're not for secure border, it doesn't mean you're not for making sure drugs don't get in the country. It doesn't mean you're not for throwing people out of the country who are felons and violent criminals.

I'm for all of those things but I'm for a humane pathway for good people.

(END VIDEO CLIP)

KARADSHEH: ICE says it is only enforcing immigration policy and that no one is exempt. Adi is still in shock that he's no longer welcome in the America he believed in.

(BEGIN VIDEO CLIP)

ADI: The American dream I started 40 years ago, for me, I build this whole thing from scratch from nothing. Even -- even if anybody will stop that dream I won't let them. I will keep the fight going.

(END VIDEO CLIP)

KARADSHEH: For now, Adi doesn't know when or he'll ever see the place he calls home again.

(BEGIN VIDEO CLIP)

ADI: I missed my wife and the kids, and to see Youngstown. I missed everybody.

(END VIDEO CLIP)

KARADSHEH: Jomana Karadsheh, CNN, Amman.

CHURCH: Heartbreaking stories there and so many more of them, too. And the U.S. says it is gravely alarmed by reports of new chlorine gas attacks in Syria. The volunteer rescue group the White Helmets nine people including three of its volunteers were injured by chlorine gas in Idlib province on Sunday.

Activists tell CNN the gas was released from Syrian helicopters. CNN has not confirmed that or the authenticity of this video.

Idlib as you can see on this map is one of the few areas in Syria still largely held by rebels. At the U.N. on Monday the U.S. accused Russia of blocking a Security Council statement condemning Sunday's alleged attack.

(BEGIN VIDEO CLIP)

NIKKI HALEY, UNITED STATES AMBASSADOR TO THE UNITED NATIONS: We have reports that the Assad regime has used chlorine gas against its people multiple times in recent weeks, including just yesterday. So we proposed a Security Council press statement condemning these attacks.

So far, Russia has delayed the adoption of the statement. A simple condemnation of Syrian children being suffocated by chlorine gas.

VASILY NEBENZYA, RUSSIAN AMBASSADOR TO THE UNITED NATIONS (through translator): Today's meeting is being used by the United States being used by the United Kingdom to slander the Russian federation. Recently, there had been a lot of fuss about the allege incident in Damascus suburbs with chlorine being used.

There are even rumors of sarin being used. Where? When? By whom?

(END VIDEO CLIP)

CHURCH: Activist says air strikes Monday also killed at least 29 people, including children in the rebel held enclave of Eastern Ghouta near Damascus.

South African President Jacob Zuma is again under pressure to resign. His political future now depends on top leaders of his policy. They could decide on Wednesday whether to remove Zuma from office or to wait until he finishes his term next year.

CNN's David McKenzie is following this story from Johannesburg.

DAVID MCKENZIE, INTERNATIONAL CORRESPONDENT, CNN: Well, he's known as the Teflon president, but President Jacob Zuma faces his toughest test yet. The ruling ANC has called an urgent meeting on Wednesday of the national executive committee. Now that committee could recall the president who is facing growing pressure from within the party and just from ordinary South Africans to step aside.

Zuma has faced many scandals, particularly corruption allegations over the years, he's denied them all. But on the weekend the leadership of the ANC now headed by Cyril Ramaphosa reportedly tried to persuade President Zuma to step down, to resign, but he has not. And so it comes down to dismissing of the ANC executive.

And it's just schedule, just 24 hours ahead of the state of the nation address which Zuma is currently scheduled to make to parliament on Thursday, it's an incredibly tense moment politically for the ANC with several factions within the party. Many people though, want to see the back of Jacob Zuma.

David McKenzie, CNN, Johannesburg, South Africa.

CHURCH: And when we return after U.S. financial markets plunge we will get the closing numbers from Asia and see if Europe is following suit, too.

[03:30:00] (COMMERCIAL BREAK)

CHURCH: A very warm welcome back I am Rosemary Church. I want to update you now on the main stories we had been following this hour. U.S. President Donald Trump has the next five days to decide whether to approve or block Democrats response to the Republican memo about the FBI. On Monday, the House Intelligence Committee voted unanimously to send it to the White House. The document is expected to rebut allegations that the FBI abused surveillance source. The President of the Maldives has declared a state of emergency and

made a power struggle between the Supreme Court and government, it is defying its courts order to release political prisoners and reinstate Parliament members from the opposition. The Attorney General has warned that the court may have the President impeach.

Negotiating teams for the U.K. and the European Union are holding their first technical talks on the Brexit transition period. The meeting comes a day after the E.U.'s chief negotiator said it was time for Britain to make a choice about what kind of relationship he wants with the block.

The one-day record loss is now infecting markets around the world. Asian markets all finished lower and now it's Europe's turn right now you can see they all markets across Europe, the footsie down 2 percent more than 2 percent in the symbol patent there elsewhere in Germany, Zurich and Paris. So in Asia, the Hang Seng and the Nikkei will both open about the 5 percent market in Shanghai and Australia drop more than 3 percent. I want to bring in CNN's emerging market editor now John Defterios who is live in Abu Dhabi, so John just how concerned should we all be as we watch markets plunge across the globe and how long would you expect these losses to last?

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: First and foremost Rosemary, those are follow the markets. Although they don't like being exposed to stocks shouldn't be surprised by the sell-off, but the evaluations from Wall Street to Tokyo been very high record highs. In fact, over the last 12 months we were just looking for a trigger or a spark to light the fire we saw that last Friday with the employment report from the United States showing unemployment at 4.1 percent we are watching the wages very carefully. They rose 2.9 percent of the overall concern for the U.S. economy right now is the U.S. Federal Reserve, the central bank may be behind the curve when it comes to inflation, which means that interest rates could go higher, but is a flash across the screen. We saw correction of 4 to 5 percent of the Asian markets and we see the European market probably better than 2 percent waiting for Wall Street to rise. We got to keep in mind the U.S. economy is $20 trillion of nearly $80 trillion economy is carries all lot of weigh, so concerned about rising interest rates in United States.

[10:35:05] Obviously a shock against the markets, but let us have this in contacts the Asia-Pacific markets over the last 12 months are up 25 percent. Even after this correction, Hang Sang the Hong Kong markets of 30 percent, so I wouldn't be surprised to see a correction officially of 10 percent. The big concern of course this spills in a ghostly bear market of 20 percent. We don't see central banks are finance minister so far calling for concerted action. The waiting to see what the new Federal Reserve Board governor or Chairman Gerald Powell is going to do, he is just warning yesterday, a tough job to come in watching the dow just swing by 1600 points even in context Friday, Monday the correction of less than 10 percent of United States waiting to see it flatten out of the stage.

CHURCH: All right, John Defterios bringing us up-to-date on the situation there as we watched the numbers across Europe around about a 2 percent to almost across the board that will keep an eye on that for sure. Thanks so much John I appreciate it.

Just a few more days until Friday's Olympic opening ceremony. The anticipation grows and not just the world-class athletes showing off their skills, North Korea's involvement is gaining attention. We are awaiting the arrival of North Korea's top girl band. They are performing a rare concert later in the week. The north is also sending athletes that will compete under the same flag as the South Koreans like a unified Korean women's hockey team, but for the Russian men's hockey team. They competing under a neutral flag doping scandal both Russia ban for sending a team to Pyeongchang and they are arriving this hour as well.

Meanwhile 32 Russian athlete who were not allowed to participate in the games are appealing the international Olympic Committee's decision to exclude them. So let us bring in Paula Hancocks who is standing by Pyeongchang in South Korea. Paula a lot going on there, waiting for the arrival of the girl band and that the special favorite of Kim Jong-un of course talk to talk to us about that. These teams working together, particularly in the North and South Korea, because a lot of eyes are on what's happening with them.

PAULA HANCOCKS, CNN CORRESPONDENT: That is right Rosemary. I mean you are going to see hundreds of journalists run off to these that North Korean athletes everywhere they go over the next couple of weeks and she said we also waiting for the ferry loads all of the band the orchestra that will be playing. Let us talk about the sports at this point were joined by Christine Brennan. Once again, CNN Sports analyst and also works with USA Today as a columnist. First of all Christine if we can talk about the North Korea figure skaters, I understand that you went to watch them practice today. Tell me about those journalist running after them and the guys themselves.

CHRISTINE BRENNAN, CNN SPORTS ANALYST: It was an official practice Paula for the short program and they did their short program Beatles music. Of course, what strings are North Korea more than Beatles music, but their Canadian coach was there watching them. And while the North Korea's sped through the mix zone did not do any interviews for quite a following of reporters and cameras that they didn't want to move very quickly to pass all of us. But then the coach stuck around and he was asked specifically about their chances for medal and if at all, no chance of that and he is honest and he is also correct, because they were 50 world championships in Helsinki last spring and I think a 15 place finish year would fir for them.

HANCOCKS: I mean they were the only North Korean athletes to actually qualify for the Olympics.

BRENNAN: Exactly yes. They did that in the in the fall in Germany and they had cumulative results so that when people look at them. You know you're thinking I might that be rich. It might they be not look like a real figure skating pair, well they do look exactly like the figures skating pair. You see them on the ice and say they look like anyone else out there and they are really quite good. They deserve to be here.

HANCOCKS: So let us move on to Russia then, I understand that there are more Russian athletes who are wanting to appeal the ban against them in just a few days before the opening ceremony and I mean talks us through there.

BRENNAN: We talk about 11th hour, we know that the ban. The Russians were banned by the international Olympic Committee on December 5th. So it has been 2 months and here we are to the bitter end, the Court of arbitration for sport actually look favorably upon 28 Russian athletes last week, the IOC, the international committee then told the 13 who could. Here they could not compete so they slam the door on them, but because of the court of arbitration for sport, things are favorable I think the other athletes 32 of them including the dictator Victor on very popular athlete. They are now going to the court of arbitration for sport asking them to help them get into these Olympic Games. This really could go for another day or two with the opening ceremonies now with just a couple days away.

[03:40:06] HANCOCKS: The IOC didn't extend an invitation to those who had the bans overturned, I mean do you think they would do the same to those 52?

BRENNAN: Well if we can read the tea leaves them follow they didn't do it. As you said they said no way. We don't care what the court arbitration for sport that you're not coming that was the 13. The question is what they do that again with 32 if the quarter of arbitration for sport does allow them back in and I think they are right now. The IOC has given a strong signal. They're not going to let them come back in.

HANCOCKS: Now this is your 18 consecutive Olympics that you are covering, what is the difference about South Korea to any of the other Olympics?

BRENNAN: Well, certainly we've heard over the years you are well aware of this and so many of the viewers are problems at the Olympics, you know Rio with a view ready so cheeky for having and not their heads through the bathroom doors to get out of the athletes work I do get out of the room to room sort ready all kinds of things, here, everything is ready. This is an efficient game you know it from the moment you land at the airport. The glistening terminal as you go through and I think South Korea has been ready for quite a while. I also think that they also for seeing that efficiency and that stick to it in the sense that they wanted to have these small so that hitch. So far as looking quite good.

HANCOCKS: Christine Brennan, thank you very much.

BRENNAN: Thank you Paula.

HANCOCKS: This is certainly a very efficient gains on, I am sure the organizers would like little more snow but that is something that we had seen in previous Winter Olympics as well. Rosemary, back to you.

CHURCH: Yet. There's always a few problems and challenges, but that all goes well in the end, doesn't it? Thanks so much, Paula Hancocks joining us there from Pyeongchang in South Korea. U.S. Vice President Mike Pence arrives in Tokyo later on Tuesday.

Pence is on his way to the Olympic Games in Pyeongchang in South Korea. CNN Alice ask the Vice President if he'll talk with the North Koreans while in South Korea, he says he has not scheduled anything but we will see what happens. He is words there. Mr. Pence adds he will make sure no one forgets North Korea's oppression and tyranny.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENTIAL OF THE UNITED STATES: The Olympics with my wife and with our delegation. Certainly we will cheer on the American athletes, but also quite frankly, we are traveling to the Olympics to make sure that North Korea doesn't use the powerful symbolism in the backdraft of the Winter Olympics, but paper over the truth about the regime, will be telling the truth about North Korea at every stop will be ensuring that whatever cooperation that is existing between North and South Korea today on Olympic teams does not cloud the reality of a regime that must continue to be isolated by the world community.

(END VIDEO CLIP)

CHURCH: Mike Pence there on North Korea is sending it ceremonial head of state Kim Yong-nam to the games which fueled the speculation about possible talks. All right we have some breaking news here now, Hong Kong's highest court will let three young leaders of the City's pro- democracy movement walk free. It is a major reversal from an earlier court ruling Joshua Wong, Nathan Law and Alex Chow were key figures in the 2014 protests calling for reforms to Hong Kong's electoral system except about two months in jail before they were granted bail last November.

Space-X CEO Elon Musk is testing his new rocket with one of his prized possession. The details of the upcoming launch that is next.

(COMMERCIAL BREAK)

[03:45:47] CHURCH: Welcome back everyone will the world's most powerful rocket begins its maiden flight on Tuesday, playing an appropriate tune.

David Bowie space oddity will also leave the planet when Space-X launches its much-anticipated Falcon Heavy rocket from Florida. No one will be only a noble flight since the rocket could explored before making it into space. Perhaps the most exciting payload a Cherry red tesla roadster belonging to Space-X's chief Elon Musk and who else at the wheel, but star man Musk revealed this photo of the roadster with a dummy named star man in the driver's seat. Dress in a space-X suit. Elan Musk was not very optimistic about this launch last. He is saying there was a good chance the Falcon Heavy wouldn't make it into orbit, but during a recent call with reporters he had a more positive outlook.

(BEGIN VIDEO CLIP)

What I find strange about this flight is that normally I feel super stressed out the day before, but this time I don't. That may be a bad sign, I am not sure, but I feel quite giddy and happy actually. So I am really hopeful for this flight going as planned. We have done everything we can. That is what I am confident. I am sure we have done everything we could do to minimize the chances of success of this mission.

(END VIDEO CLIP)

CHURCH: Giddy and happy, Musk told CNN this people are coming from all around the world to see what will either be a great rocket launch or the best fireworks display that in the same.

Aerospace and defense analyst for full cost international Incorporated, William Ostrowe joins me now by Skype from Danbury in Connecticut. Good to have you with us.

WILLIAM OSTROWE, AEROSPACE AND DEFENSE ANALYST, FULL COST INTERNATIONAL INCORPORATED: Thank you, thanks for having me.

CHURCH: OK the launch of Falcon Heavy takes place in just a few hours from now, do you expect this to be a success last your goals, Elon Musk didn't even think it would make it so what's changed?

OSTROWE: Yes Falcon Heavy is interesting situation, you know Elon Musk, himself as I expressed doubts about the mission is not the first mission and it is a test mission so there's always a higher chance of failure and know the Falcon Heavy result is interesting because it is basically taking three (inaudible) and putting them together in each of those has a nine rocket engines. This is a lot there that could go wrong. Obviously, there are expecting a success and hoping for success, but I know chance of failure is relatively high for something like this.

CHURCH: That is difficult isn't it? When you going to something like this of course space X has released what they call, aspirational goals and that is to get the first target mission to mars by 2022 and then an actual crew there in just six years in 2024. Tuesday's launch of course were news, hope the flying crewmembers on those missions to Mars in the mirror and one of the many challenges ahead. The Falcon Heavy and its objectives.

OSTROWE: yes. Sure so on the Falcon Heavy for instance kind of a tricky situation was first announced back in 2011, Elon Musk saw a pretty big market for the launch vehicle and they were expecting about 8 to 10 launches per year. That has gone down pretty drastically since then and there are a few factors at play a part of it is that satellites have gotten smaller and so the demand for a really large long table like the Falcon Heavy, isn't quite there and it is not quite strong as it was at one point and at the same time as Space X had been making incremental upgrades to its own falcon nine which is a obviously a smaller rocket but it is much more cheaper than it used to be and so that is actually been able to take some of the market that the Falcon Heavy was supposed to address.

[03:50:27] Space X is putting a lot of their focus now on developing the VFR as sort of their future heavy rocket and that is going to take some market share away from Falcon Heavy also and in fact just today Elon Musk announced that they may not even human rate Falcon Heavy, I mean they just put all their attention on to the VFR.

CHURCH: Right, so now in just a few hours. This will take place. It will either not work in which case they will have to sort of regroup in and start again. Presumably if it does work. What comes next specifically after that in space X?

OSTROWE: Sure yes. Especially in terms of Falcon Heavy really finding a market for that launch vehicle. You know they do have a few contracts they sign with some companies to launch satellites aboard the Falcon Heavy. It is really about finding other customers they are putting a lot of emphasis on the U.S. government at the customer, you know launching they are really heavy size satellites for NRO launching science missions for NASA, things like that. We are going to be focusing in terms of the Falcon Heavy going forward.

CHURCH: OK. I just want to read this quite from Elon Musk and get to your reaction. He said this. I love the sword of the cob drifting apparently endlessly through space and perhaps being discovered by an alien race millions of years in the future. So Musk seems pretty sure there are aliens out there, do you share his view on that?

OSTROWE: the universe is pretty big and so yes I think they are probably out there somewhere.

CHURCH: No doubt about it?

OSTROWE: Yes. Sure they are somewhere that if they are interested in tesla's or not.

(LAUGHTER)

CHURCH: All right. Lovely to talk to you William Ostrowe. Thank you so much for joining us.

OSTROWE: Yes it was my pleasure.

CHURCH: Thank you. And you can watch the launch live on the space X website starting at 1:30 p.m. Eastern Time that is 2:30 am in Hong Kong. 6:30 pm in the London, but this disclaimer, there is a 2 1/2 hour window for that actual lift so be patient. Meteorologist Pedram Javaheri joins us now from the International Weather Center so Pedram of course everyone wondering if the weather is going to cooperate for this launch. What do you think?

PEDRAM JAVAHERI, CNN METEOROLOGIST: Big element all this, it looks pretty good. This is something they had look forward to for many years on $90 million just for this launch alone. The weather is nice just to talk to lower 70s, middle 20 Celsius sunny skies, lighter wind as well so is the rocket has 27 engines and about 80 times the thrust you would see a Boeing 747 kind of talks to the significance of this particular event that really is nice as the weather pattern just for this time of year. Across parts of Florida's years gets all the elements in place for Mother Nature at least to help out with this historic event that is going to be taking place across the region. I want to talk about what's happening across parts of South Africa of

course, high pressure has been firmly controlled for seemingly years across the region and strong enough here to deflect just about every single storm system, of course we know the significant drought in place of course the water restrictions are now in place as well. The water dropped off from what is normal to historic low to the past couple of years across the town area. Now we know down to less than 15 liters per day is what people were expected to use to be able to push back to the day zero is now which is the day at task that runs dry now pushed back into the middle of May. That amount of water is roughly 7 times less of an average person usually break this down Rosemary, we are talking about the equivalent of state of a family of four brushing your teeth just once a day that is the house water, they are allowed to use over the next several months before water potentially runs out.

CHURCH: Unbelievable. All right Pedram thanks so much for keeping an eye on all of that, appreciate it. We will take a short break still to come little goes a long way for U.S. President Donald Trump, a look at the from the President's favorite jam. We will be back for moment.

(COMMERCIAL BREAK)

[03:55:48] CHURCH: All right. Whether it is crooked, lime, sleazy, sleepy sloppy, wacky, there is no secret Donald Trump love giving his opponents nicknames. Now he is using little a lot. Here is Jeanne Moss.

(BEGIN VIDEO)

JEANNE MOOS, CNN CORRESPONDENT: President Trump sure knows how to put a little in belittle with his tweeted nickname for Democratic Congressman Adam Schiff, he calls him little Adam Schiff.

UNIDENTIFIED MALE: Little Adam Schiff.

UNIDENTIFIED FEMALE: Little Adam Schiff.

MOOS: Little Adam Schiff, now why does that sound so familiar?

TRUMP: Little rocket man. Little Markle. And that little George Stephanopoulos.

MOOS: He is tweeting about little Michael Bloomberg, little Berry Dealer, little more Lisa Zuckerman and little Bob Corker. He also got the owner of a pointless apostrophe lots of previous little's. One critic to tweet. He is running out of nicknames. Do you really have a sub third-grade vocabulary tweeted someone else. That is the best you could do? You even suck as a bully. The Congressman Trumps dubbed little Adam, look on the bright side.

ADAM SCHIFF, (D) CALIFORNIA: Look, first he attacks me some months ago calling me sleazy Adam Schiff, now it is little Adam Schiff which I don't know seems better.

MOOS: Even some of the President's supporters conceded he could've done better would've preferred shifty shifts with so many little nicknames, it's clear the President doesn't believe a little goes a long way. President Trumps speaks his own lingo one day saying...

TRUMP: I guarantee you my I.Q. is much higher than any of this people.

MOOS: Only complete humility the next.

TRUMP: Non-regular shifts.

MOOS: Even a supporter can't keep a straight face. Jeanne Moos, CNN.

TRUMP: Don't worry about it little Marco.

MOOS: New York.

(END VIDEO)

CHURCH: You have to work on some new names. Thanks to your company at this hour. I am Rosemary Church. The news continues next with Max Foster in London. Have you folks a great day.