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Markets Hit Hard By Rising Fears over Coronavirus; CDC Confirms First Coronavirus Case of "Unknown" Origin in U.S.; Trump Contradicts Own Medical Experts During Press Conference on Coronavirus; Dr. Luciana Borio & Dr. Leana Wen Discuss Coronavirus and Answer Viewers' Questions on Preparedness; Coronavirus in the U.S.; Goldman Sachs Warns U.S. Companies Will Make No Profit This Year Due to Coronavirus Disruptions, Causing Recession; FDA Says Coronavirus Outbreak May Lead to Critical Shortages of Medical Products; China Implements "Contactless" Food Deliveries over Coronavirus. Aired 11-11:30a ET
Aired February 27, 2020 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thank you so much for joining me.
We start this hour with latest on the coronavirus outbreak. And there are a lot of new developments today. First, the financial fallout continues on Wall Street. If you look right there, stocks plunging again this morning. The major indices are on track for their worst weekly percentage drop since the 2008 financial crisis.
And at the same time, a new phase might be upon us in the coronavirus here in the United States. Doctors believe now they could have the first case in the country on their hands of a patient testing positive for the virus, who neither traveled outside the United States nor had contact with someone known to be infected. Doctors in California are trying to figure out where this patient contracted the virus right now.
This news broke just after the president held a press conference trying to calm fears surrounding the outbreak. Within the same briefing, he seemed to contradict his own medical experts about all of this. Listen.
(BEGIN VIDEO CLIP)
ANNE SCHUCHAT, PRINCIPAL DEPUTY DIRECTOR, CDC: Our aggressive containment strategy here in the United States has been working and is responsible for the low levels of cases that we have so far. However, we do expect more cases.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't think it is inevitable. I think there's a chance it could get worse. There's a chance it could get fairly substantially worse. But nothing is inevitable.
(END VIDEO CLIP)
BOLDUAN: Nothing is inevitable.
The White House is facing a lot of questions now about how prepared the country is. And we hope to ask those questions today to the White House and put those questions to the White House. But the White House pulled a planned with Peter Navarro, who is helping lead the effort against the virus. They pulled the interview this morning for a second straight day. And we're waiting for a White House response as to why.
Let's get started now with where we stand at moment. CNN's John Harwood is at the White House. Dan Simon is in San Francisco. And Julia Chatterley is at the New York Stock Exchange for us.
Let's start with Julia.
Julia, what are you seeing there right now?
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Morning, Kate. We're seeing everything you just described, playing out in real time here. The confusion, the uncertainty. We're seeing U.S. stocks now pulling back some 10 percent from recent highs. We're down around 2.5 percent in the session.
I will mention, just to be cautious here, we have bounced off the lows.
But it is fear, it is uncertainty, that has investors once again selling stocks today.
Just a few things. One, what happens in the United States and the response, the confusion that was created once again by that press conference?
Two, I think Goldman Sachs came out today and said, we're going to see zero earnings growth in 2020 in the United States.
I don't want to lose you in the weeds of what that ultimately means for businesses and for workers. The key point there's they're making an assumption the coronavirus spreads throughout the United States.
We also had big tech companies like Microsoft that have been such a support to these markets also saying their businesses, their expectations are going to have to be revised lower, too.
CNN's own gauge of investor activity swings between fear and between greed in these markets. Today, it is registering extreme fear. And I do think the risk here, the biggest risk to growth and to the outlook is perhaps more fear than the virus.
We do have to remember, in the United States -- Kate, I know you'll come back to this -- just 15 people at this stage infected. We have to be careful of fear.
But right now, investors today are selling. It looks like it will be a rough session. Back to you.
BOLDUAN: So it is all wrapped up into it.
Julia, thank you very much. I really appreciate it.
Let's get out to California now. Dan Simon standing by.
Dan, what are you learning, what more are you learning about this new case in California?
DAN SIMON, CNN CORRESPONDENT: Hi, Kate. We appear to be entering into a new phase here in the United States. This patient did not go overseas, did not go to a foreign country where the virus has been spreading. Didn't seem to have any contact with anybody who had the virus.
So at this point, the source of the infection is unknown. And the question is, does that portend that the virus could spread in a more rapid fashion.
I want you to listen now to the doctor at the hospital in Sacramento, where the patient is being treated. Take a look.
(BEGIN VIDEO CLIP)
DR. DEAN BLUMBERG, PEDIATRIC INFECTIOUS DISEASE SPECIALIST, U.C. DAVIS MEDICAL CENTER: We can't say there's definitely more. But I think it is highly suggestive that if there's one, there's probably more than one. There's probably other people.
But that suggests that the virus is out there in the community, and that means pretty much that everybody is at risk. We don't know who might be carrying it. We don't know who we could get it from.
That other person probably exposed other people. And you have to realize that this virus is so new that none of us have any immunity to it. So anybody who is exposed is at high risk of getting infected with this.
(END VIDEO CLIP)
SIMON: And one thing that is concerning is that the diagnosis was delayed. Raising questions about whether or not this patient exposed other people to the coronavirus.
That's because the test did not take place in an expedited fashion like the hospital wanted. The CDC has very tight restrictions in terms of administering these tests. That is one of the open questions here.
Kate, at this point, we have a total of 80 people so far in the United States who have the coronavirus or who have gotten it. The majority of those cases, we should point out, came from that ship in Japan.
We'll send it back to you.
BOLDUAN: That's exactly right.
Thanks so much. I really appreciate it, Dan.
So, John, over at the White House, what did the president know about this new case when he took to the briefing room yesterday?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: He knew in general that there was a new case. He didn't know all the details. Alex Azar, the Health and Human Services secretary, had signaled in Hill testimony there was another case they were still trying to get to the bottom of.
What we have seen over the last 24 hours or so is an administration grappling with its response in a very evident way publicly. Clearly, the White House knew the happy talk from earlier had not been working.
So during the day yesterday, there was speculation, is the president going to appoint a czar for this purpose to coordinate and oversee the response. The White House denied on the record in the afternoon it would do so. Then we went into the press conference and saw the president put Mike Pence in charge, saying, well, it is not a czar, but he's going to oversee and coordinate the response.
Alex Azar, who had been doing so, was pushing back to that to reporters there. The president struggling to accept the level of mortality, not arguing with our Sanjay Gupta over Sanjay's point about the higher level of mortality for the coronavirus.
Uncertain about how much additional money was going to be necessary from Congress, uncertain whether there was going to be community spread as we saw confirmed after that news conference.
And when we saw the Dow futures dropping during the news conference, that was a sign that the message was not inspiring confidence. We have seen that from the market today.
And the danger is that, if you get this fear that Julia talked about escalating, you could have, as we move toward a -- the potential for global pandemic, you could have the risk, heightened risk of recession. That would make President Trump the first president since Jimmy Carter, in 1980, if, in fact, we tip into recession this year.
Mark Zandi, the independent economist, told me today, the odds of that now are 50/50.
BOLDUAN: Yikes. A lot needs to happen, but a lot of things are happening quickly. That's the whole thing about this whole situation.
John, it's great to see you. Thanks for coming on.
BOLDUAN: Joining me to talk more about this, Dr. Luciana Borio, the former head of medical and biodefence preparedness for the National Security Council during the Trump administration. Also a former official with the Food and Drug Administration. And joining us is Dr. Leana Wen, the former health commissioner of Baltimore, and a visiting professor at G.W. School of Public Health.
Doctors, thank you so much for being here.
We have a million questions. We also want to get to some viewer questions if we have time, which I hope we do.
Dr. Borio, you have been talking about how public health officials have needed to be prepared for a wider outbreak. What is your big take than from this new case out of California?
DR. LUCIANA BORIO, FORMER DIRECTOR, MEDICAL & BIODEFENSE PREPAREDNESS, NATIONAL SECURITY COUNCIL & FORMER OFFICIAL, FDA: Good morning.
This case in California, we have been expecting this to happen for the last few weeks, given the features of this virus. It is highly transmissible. It presents very similarly to other infectious diseases that affect the respiratory tract. So we always believe that we -- if we're looking for the cases, we would find them. Now we did.
BOLDUAN: Dr. Borio, one area that seems to be a big concern or where there's a glaring shortage in the immediate is the availability of testing kits for this specific virus. The last reporting coming from the government was that there were only 12 states and localities that can test samples for coronavirus now. That leaves the vast majority of states where?
BORIO: That's right. That's been a major source of frustration and a gap in our ability to do adequate surveillance and respond to this emerging pandemic. I think that every individual involved in the developing of diagnostic tests is frustrated with the situation.
I spoke to individuals who are working on these tests recently and I believe that we are very close to having commercially available tests in clinics and hospitals, very close.
But it is important to understand that it does take time to do the proper validation of these tests, one test that actually worked as we expect. And they need -- the CDC needs to grow the virus, needs to propagate the virus, distribute the virus to developers in safe -- in a safe manner. So that process does take some time.
BOLDUAN: False positive, falls negative in this situation do not help anybody.
Dr. Wen, a big part of successfully dealing with any public health crisis is trust. I was really struck that you started writing about this very thing in late January. What do you make of the administration's response so far?
DR. LEANA WEN, VISITING PROFESSOR OF HEALTH POLICY AND MANAGEMENT, GEORGE WASHINGTON UNIVERSITY SCHOOL OF PUBLIC HEALTH & FORMER BALTIMORE HEALTH COMMISSIONER: Well, you're right that public health depends on public trust. It depends on the public believing that the government has their best interest at heart and that the government is telling the truth.
You know, I heard the press conference yesterday, and I think President Trump was trying to paint a rosy picture of what was going on. That's not what we expect from the commander-in-chief. We want the commander-in-chief to be telling us the truth, to be open and transparent with us.
What he should have said is that the U.S. response has been very strong so far. It has been effective. But this is a global problem. And there are now more than 40 countries where coronavirus is spreading. We only have 15 cases in the U.S. now. But we expect for the numbers to go up. We are ready. We are prepared. And here is what we're going to do about it.
That actually projects the strength and the confidence that he needs as our commander-in-chief. But it also gives the truth, which is also what the American people deserve.
BOLDUAN: And, Dr. Borio, some of the criticism coming at the White House is that they've been cutting positions and cutting funding that are directly related to a crisis like this.
Your position that you held on the National Security Council, for example, has not been filled since you left in 2018. Are you concerned that this is impacting the response?
BORIO: So I have to say that it gives me great confidence that our response, at its heart, is really conducted by career individuals, physicians, scientists, some of whom with the president yesterday in the briefing, who have a wealth of expertise and decades of experience in managing these types of situations.
This is a very serious situation. Nobody can be fully prepared to counter it. It is very challenging.
But what I want the American people to know is that there are incredibly experienced individuals at the CDC, at the NIH, at the FDA, and throughout government, who are extraordinarily dedicated to this issue and, in turn, are supported by dozens and dozens of more experts with wealth experience. I am confident in our ability to address this challenge.
BOLDUAN: Do you think the administration, the White House will be better served if they had someone like a Dr. Luciana Borio in the position that you held?
BORIO: I think every White House needs to organize its house the way it sees fit, and each -- it is difficult to draw, you know, a conclusion from prior experiences because each epidemic is very unique.
But, again, my job there was actually made much easier because of the type of experts that I was able to rely on, day in, day out, as I did my job. BOLDUAN: So, Dr. Wen, let me get to some of our viewer questions. We
have been getting thousands, tons of questions coming in from our audience. I want to tick through some of them with you if I could.
Here is one we heard a lot about, should face masks be used or are there better ways to protect one's self if the virus becomes widespread in the United States? Dr. Wen?
WEN: Great question. Face masks are effective and should be used by health care workers. But there's no evidence showing that they're useful for everyday people.
Actually what is much better as a preventive mechanism for every person is hand washing. Wash your hands well with warm soap or warm water and soap. That will reduce 50 percent to 60 percent of infections.
BOLDUAN: And, Dr. Wen, also this. Here is another one we heard a lot from folks. Do people who got the flu shot this year have any better chance of not getting coronavirus than those who didn't get a flu shot? In addition, if you're currently sick, does this make you more vulnerable to the virus?
WEN: The flu, influenza, is a separate virus from coronavirus. And so getting the flu shot does not protect you from getting coronavirus. But it does protect you from getting the flu. Which is important because there have been tens of thousands of deaths from influenza this season in the U.S.
It is not too late to get the flu vaccine. Get it now if you have not already.
And if you're older, have chronic conditions, also get the pneumonia vaccine as well.
It is true that you are more likely to get sick in general if you have other illnesses, too. So if you are already sick with the flu, maybe you could have a higher chance of getting coronavirus and vice versa. But that's why it is important for all of us to protect ourselves and our families.
Do basic things like hand washing, stay home when you're sick, don't be around others while coughing, sneezing. Cough into your sleeve and not out in the open and so forth.
BOLDUAN: It seems everyone is looking for something new to protect themselves from something new but it is getting back to the basics.
Dr. Wen, Dr. Borio, thank you very much for coming in.
BOLDUAN: Coming up for us, a new warning coming from Goldman Sachs about the long-term impact potentially of the coronavirus on the year ahead. We'll bring that to you as we continue to watch the Dow.
And later, Elizabeth Warren makes it very clear, she's in the Democratic primary until the bitter end. What does her new message mean for the race?
BOLDUAN: We're following another steep plunge for stocks on Wall Street today. Right now, the Dow is down more than 400 points at the moment. It is the sixth drop in a row for U.S. markets amid rising fears over the coronavirus.
And it's happening as President Trump is trying to calm the public. And clearly trying to calm investors over the danger and threat of the coronavirus in the United States.
Joining me now, with much needed perspective on this, CNN global economic analyst, Rana Foroohar.
Thank you for coming in, Rana.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Thank you.
BOLDUAN: I want to start with the warning from Goldman Sachs, putting out a warning to investors today that U.S. companies are going to generate zero, no profit growth this year due to the disruption of the coronavirus. What does that mean?
FOROOHAR: That's very bad news, because it means companies are not going to grow profits, not going to hire people. They're hunkering down.
When Goldman sacks puts out a warning like this, they don't do it lightly.
FOROOHAR: And a lot of people, including Goldman, are now saying, look, this could be the thing that tips the economy into a recession, not just a market event, but an overall economic event. And this is happening in advance of November when it really matters.
BOLDUAN: It is really wild timing because --
BOLDUAN: -- as you mentioned, in the report, it also says that "a more severe pandemic and a more prolonged disruption could lead to a recession."
We have been talking about signs and signals of a coming recession or correction for a long time. How much of a game changer is this virus, is this public health crisis? FOROOHAR: It is interesting. This is almost the tailwind that the
markets needed. They were already so jittery. They were ready to tip. It could have been anything. It could have been more conflict with China. It could have been recession in Europe. It could have been a terror event. Who knows? But it was a pandemic. We didn't know that was going to happen.
I think what makes this really severe is not just the fact we don't know how bad it is going to be yet, right?
FOROOHAR: I mean, this is much more infectious than SARS, a higher death rate. We're not sure --
BOLDUAN: And it's changing rapidly.
FOROOHAR: And it's changing rapidly. The president didn't calm the markets by saying everything is fine. That's not what health experts are saying. The markets are reacting to that and how we're going to handle a pandemic.
But it is also emanating from China. And now it's in the U.S. And the U.S./China relationship is the most important global economic relationship.
BOLDUAN: This is something I'm keying in on. And you have spent a lot of time covering the Chinese economy and the economic relationship between the United States and China.
And the FDA said on Tuesday that the outbreak will, quote, unquote, "likely affect the medical market supply chain." Things I've been looking into this morning, according to the FDA, China ranked second among countries that exported drugs and biologics to the United States and first for medical devices.
The supply chain is a real concern for critical things. How serious is this?
FOROOHAR: This is so serious. This is the mid- to long-term story. I think that if there's a lasting impact here, aside from recession, it will be decoupling. We have been talking for a long time about how the U.S. and China are going in different directions economically.
Now we had a trade deal. But a lot of U.S. companies in the midst of this virus have been moving production to Vietnam, to Mexico. Now I think you're going to see that speed up.
The problem is that those countries can't take all the overlap from China. China has been the --
BOLDUAN: There's not a short-term fix to this. (CROSSTALK)
FOROOHAR: Which means more costs.
BOLDUAN: Guy, just for a small, small perspective on what we're talking about here, I say drugs and biologics, according to the Commerce Department, in 2018, China accounted for 95 percent of U.S. imports of Ibuprofen. That's Advil.
BOLDUAN: And 70 percent of U.S. imports of Acetaminophen.
BOLDUAN: That's Tylenol.
BOLDUAN: These critical things that we take for granted in everyday life, China is where it is coming from.
FOROOHAR: It is so important. And I think it is something -- a wonky thing, supply chains. I've been focused on it for decades.
BOLDUAN: We'll talk about it next time.
BOLDUAN: We're going to talk about it for the next few months.
This is going to be a big deal. And there are going to be big political decisions have to be made about, all right, once the virus passes, are we going to go back to the status quo or will we say we need to move back critical lines of production to the U.S. The military has been talking about this for a couple of years now.
And also, again, another facet of just how troubling this really is.
BOLDUAN: Especially if China completely shuts down.
FOROOHAR: An economic story, health story, foreign policy, everything.
BOLDUAN: A mess.
Good to see you, Rana. Thank you very much. I really appreciate it.
FOROOHAR: Thank you.
BOLDUAN: Still ahead for us, Elizabeth Warren's big pitch to voters is she has a plan for everything. Now she's revealing she has a plan for the Democratic convention. And some others may agree with her in terms of they'd like to do the same thing. What she said last night about how far she's willing to go in this race.
BOLDUAN: New cases of coronavirus are being confirmed around the world this morning: Canada, the U.K., Germany, Spain, Denmark, and Estonia. That's today.
We also learned all public schools in Japan will close for a month, according to the prime minister, starting on Monday.
And, of course, a lot of focus in China, especially with warnings of what a severe impact on everyday life, which we could be seeing in the United States if the coronavirus spreads.
We wanted to show you. And David Culver, who was there, took a look at what it looks like in the country most hard hit. Watch.
(BEGIN VIDEO CLIP)
DAVID CULVER, CNN INTERNATIONAL CORRESPONDENT: You are looking at the new normal for many fast-food restaurants in China. Customers entering this KFC passing through the now standard temperature checks. Walking up to a giant screen. They either transfer their order from their Smartphones, thus avoiding touching the surface, or type it in. As soon as they step away, an employee swoops in to disinfect.