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Coronavirus Spooks Global Markets; Biden Looks For Big Win in South Carolina; Where Will Tom Brady Play Next Season? Aired 5-5:30a ET
Aired February 28, 2020 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: Percentage wise because of how strong the market rally has been over the 10 years.
The S&P 500, the Nasdaq both fell more than 4 percent. Look, a strong economy is central to the president's re-election message. Monday, he tweeted this, stock market starting to look very good to me, stocks have declined ever since.
Wednesday's news conference did not inspire confidence. Stocks fell then, too.
Take a look at this, the Dow is still up 40 percent since the 2016 election, but 36 percent of that Trump rally has evaporated this week.
Trump often uses the stock market as his personal scorecard. Just eight days ago, he claimed it was the largest stock market in history.
But as stocks declined and recession fears mount, Goldman Sachs warns this: If the coronavirus epidemic materially affects U.S. economic growth, it may increase the likelihood of Democratic victory in 2020 election.
LAURA JARRETT, CNN ANCHOR: This morning, there are growing concerns about the coronavirus spreading in the United States and now a whistle-blower at the Department of Health and Human Services claims more than a dozen workers who received the first Americans evacuated from Wuhan, China, were not properly trained and lacked proper protective gear.
President Trump, on the other hand, seems to be depending than the passage of time as the best weapon against the virus.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's going to disappear one day. It's like a miracle -- it will disappear. And from our shores we've -- you know, it could get worse before it gets better. It could maybe go away.
We'll see what happens. Nobody really knows.
(END VIDEO CLIP)
JARRETT: That's the president of the United States saying nobody really knows.
Vice President Mike Pence insists the risk of the coronavirus spreading in the U.S. remains low because of President Trump's quote "decisive action." Well, that decisive action includes the president praising himself on Twitter, blaming Democrats, and his impeachment for the virus fallout.
Kaitlan Collins is at the White House for us.
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Laura and Christine, the vice president has been tapped as the new face of the administration's response to the coronavirus. And you really saw that on full display yesterday as he was leading that briefing alongside the Health and Human Services Secretary Alex Azar, of course, who is still technically the chairman of the task force on this. But, Pence made clear that for the chain of command, he is going to be the one leading the response on this.
And his office is also trying to take the lead on at least public statements from this because we're now being told by several sources that from now on out any officials who want to either appear on television or make a statement about coronavirus will first have to clear it through Pence's office.
Now, Pence had been facing criticism for the way he handled, of course, the HIV outbreak when he was governor of Indiana and he seems to be trying to calm some of those fears by picking a State Department specialist to help him as he's leading the response to this. She is, of course, a physician, and that is someone who is going to be helping him with this.
But the question is even as they are continuing to add more medical experts to the team, you're continuing to see President Trump downplay this virus and essentially say that he does not believe it's going to be spreading in the United States, though we know that CDC officials have said it is not a question of if but when the coronavirus outbreak is going to spread here.
So, there are still major questions facing this administration. Travel restrictions are still being weighed. We're still talking to people at the State Department. And, of course, the president himself has still got his eye on the markets and what the numbers are looking like.
ROMANS: And, Kaitlan, thank you.
The numbers are not looking so good this morning again.
All right. The Northern California patient infected with coronavirus from an unknown source is in bad shape. California Congressman John Garamendi tells CNN the woman is in serious condition. She has been intubated to help her breathe.
Solano County health officials say her family members are in isolation awaiting test results.
Dozens of health care workers exposed to the patient have been identified and sent home from work to be monitored for symptoms.
JARRETT: The patient is being treated at UC Davis Medical Center, not far from Travis Air Force Base where coronavirus evacuees were flown from China.
But California Governor Gavin Newsom says commercial air travel may also be a factor.
(BEGIN VIDEO CLIP)
GOV. GAVIN NEWSOM (D), CALIFORNIA: Thousands and thousands of other people have come in on more traditional flights through the state of California. Some 8,400-plus are currently being monitored with 49 local jurisdictions doing those protocols and monitoring as it relates to more traditional commercial flights that came in from points of concern and potential points of contact, particularly in Asia.
(END VIDEO CLIP)
JARRETT: The U.S. now faces its first coronavirus-related medication shortage. So far, the specific drug and the reason for this shortage are unknown, but the U.S. relies heavily on Chinese-made drug ingredients.
ROMANS: Meantime, the CDC is warning of far-reaching effects if the virus spreads widely in the U.S. Private schools, childcare centers, public gatherings like concerts and sporting events could also overtax the medical system and strain critical infrastructure like EMS, the transportation industry, and law enforcement.
All right. Concerns on Wall Street are so real. Investors are being warned the result of the election could change. How did this all happen so quickly?
ROMANS: All right, you're not getting any stabilization here guys U.S. stock index futures are down sharply again. Indexes suffered a historic tumble almost 1,200 points yesterday at the Dow Jones Industrial Average. That's the biggest one-day drop ever.
And this is because of the coronavirus, they're now factoring how this will affect global business. The response has been fast and fierce.
Matt Egan who's had a slow week is lead writer for CNN Business.
And, Matt, how did this unravel so quickly? MATT EGAN, CNN BUSINESS LEAD WRITER: Well, first of all, it's really
important investors resist the urge to panic. A thousand-point is not what it used to be, Percentage basis, about 4.5 percent. It's painful but not nearly as bad as the 8 percent we covered in 2008, let alone a 22 percent crash, Black Monday of 1987.
And, listen, investors tend to overreact.
Markets go from one extreme to the other, long-term investors should try not to do that. Believe it or not despite these historic losses this week, S&P 500 is still more than quadrupled since the 2009 lows. But clearly confidence is a fragile thing and it can go away in an instant, and that's what we've seen.
Think about this, it took just six trading days for the S&P 500 to go from record highs to a correction. That is the fastest that has happened in more than 70 years, $3.4 trillion wiped off the S&P 500. So, clearly, Wall Street was totally unprepared for this. Everyone was very complacent, overconfident and I think that has amplified the losses.
The other thing is, let's be honest, investors are not health experts. They are not trained in epidemics, let alone pandemics. So there is this fear of the unknown, and it's not just stocks getting hit, oil prices which are kind of a real time barometer of the sense of the economy they have gotten crushed. They're in a bear market. Treasury yields are really low and I think this really sums up the mood of the market.
Yesterday just one of the 30 stocks in the Dow was up and that was 3M and that's because that company doesn't just make Post-Its, they make medical masks.
ROMANS: Right, and we know -- this is just momentum and just fear, companies are warning that they have seen this in their numbers. United Airlines, Apple, all these other companies, so, it's not just momentum and psychology, there's real fundamentals behind this.
JARRETT: As you tweeted yesterday, don't freak out.
ROMANS: Don't freak out, right.
JARRETT: So then do you think had the recession fears are overblown?
EGAN: Well, I think a recession seemed completely out of the cards just until the last few weeks and that's because this health crisis has moved so quickly. But here's how you get there.
One, global growth is really weak coming into this and that's mostly because of the trade war.
EGAN: If this health crisis ends up sparking a recession in countries like Germany and Japan, Italy, that could spill over into the United States.
The other thing is that consumers are the brightest part of the U.S. economy and it's easy to see how a health crisis can really impact consumer spending, consumer psychology. People might not want to go to crowded malls and theaters and --
EGAN: -- and concerts and that is going to have a real impact there.
And that's why I talked to Mark Zandi over at Moody's and he said, listen, if this ends up being a real crisis here, then we will be very hard -- it'll be very hard to avoid a recession here.
We should point out, though, listen this is the longest economic expansion in American history. It has proved to be very resilient. It survives all these different scares. There was the tsunami and earthquake in Japan in 2011, the fact the oil prices crashed in 2015, of course, the trade war, and it has survived all of those. This will clearly be another test, though.
ROMANS: The president has taken the Dow Jones industrial average as a popularity poll. I mean, just was -- last Wednesday, he was tweeting about, hey, best market ever and it's gone straight down since then.
Larry Kudlow on Monday, the president's chief economic advisor said everyone should consider buying stocks, long investors. Larry's losses are now 8 percent if you took his advice on Monday, you're down 8 percent.
Goldman Sachs is warning that this health crisis could actually affect the election. What are they saying?
EGAN: The Wall Street had been banking basically on four more years of President Trump, which would mean low taxes, light regulation, and a really obsessive focus on the stock market.
But Goldman Sachs is warning investors, really, that's not a slam dunk anywhere because if the coronavirus ends up having a real impact on the economy, it could tip the elections to the Democrats. And it's no secret that a slowing economy going into an election can be a fatal blow to a president, a sitting president. And they're also saying, listen, don't count out Bernie Sanders. Lot of people on Wall Street have been thinking it Bernie Sanders is the nominee, he could be easy foil for President Trump because of his bold policies like breaking up the banks, and banning fracking and Medicare for all.
ROMANS: Tax the rich.
EGAN: But Goldman Sachs is saying, look at the national polls. Head to head, they're competitive, this could go either way.
Now, if you add the political uncertainty on top of the health crisis, you're going to understand why that is another thing weighing of market psychology right now. ROMANS: Second quarter, so I think Goldman Sachs said this, but I was
talking to Joe Lockhart. He used to advice President Clinton and others. You know, the rule of thumb is the economy in the second quarter is what people take into the ballot box.
JARRETT: Yes, that's --
EGAN: They're saying that is a key predictor in presidential races.
ROMANS: All right, Matt Egan --
JARRETT: Good to see you this morning, Matt.
EGAN: Thank you.
ROMANS: What a week.
JARRETT: Thanks so much for coming in.
EGAN: Thanks, guy.
ROMANS: Thank you for getting up early for us.
EGAN: All right. Will he or won't he stay with the Patriots? Why the Tom Brady rumor mill is swirling this morning. Andy Scholes has the "Bleacher Report", next.
JARRET: All right, welcome back.
Everything is on it line for former Vice President Joe Biden in tomorrow's South Carolina primary. Biden desperately needs a jolt ahead of Super Tuesday where a third of the delegates are going to be awarded but he says he's focused on the long game.
CNN's Arlette Saenz spoke with Biden in South Carolina.
ARLETTE SAENZ, CNN POLITICAL CORRESPONDENT (voice-over): After three straight losses, Joe Biden is now banking on a state he's called his firewall.
AUDIENCE MEMBER: Are you going to win?
JOE BIDEN (D), PRESIDENTIAL CANDIDATE: Yes! All right. Because South Carolina is the trajectory to winning the Democratic nomination.
SAENZ: The former vice president betting his long-time ties to South Carolina and his African-American community will pay off.
A new Monmouth University poll shows Biden with a double digit lead over his rivals here, with the backing of 45 percent of black voters, who made up a majority of the Democratic Party primary electorate in 2016.
TOMI GREENE, BIDEN SUPORTER, SOUTH CAROLINA VOTER: He understands people. He's dealt with death. He's dealt with single parenting. You know, he really feels people, and especially what we, as black people, feel at times.
SAENZ: Days before the primary, Biden picking up a key endorsement from Congressman Jim Clyburn who says the former vice president needs to win by a substantial margin.
REP. JIM CLYBURN (D-SC): One point may be a win, but I don't think it's a propeller that we need. I want to see a much bigger victory to that.
SAENZ: After South Carolina, a quick turn to Super Tuesday three days later.
(on camera): A lot of your rivals are spending time on the ground campaigning in those Super Tuesday states. They are outspending you on the airwaves. How do you plan to catch up with them in these three days before them?
BIDEN: You can't catch up with them with money. I -- you know, I don't have Steyer's money. I don't have the billion dollars he has or I don't have the money that Bloomberg has.
But just since the debate, we've raised $2 million online. So, we're in the best run we have. I think if we do here -- do well here, we'll be able to compete across the board in terms of the money we need to be able to compete.
SAENZ (voice-over): Biden predicting he could win in states like North Carolina and Texas.
BIDEN: I think, you know, the good news for me is the vast majority of people in those states think they know me. I've been around. They know my record. And they know that I am pretty straight with what I tell them I'm going to do. So, I feel good about it.
SAENZ (on camera): After South Carolina, the contest quickly shifts to Super Tuesday and some of Bidens rivals have already spent time on the ground in those states campaigning this week. Biden will hit five of those states before Super Tuesday, including California and Texas, but ultimately he is hoping for a win here in South Carolina to push him into Super Tuesday and beyond.
Arlette Saenz, CNN, Conway, South Carolina.
JARRETT: Arlette, thanks so much for that.
Tonight, President Trump hosts a Keep America Great rally in South Carolina, the fourth straight state where he's holding a rally before the Democrats vote.
ROMANS: All right, the NFL combine taking place right now in Indianapolis. The buzz around the league, where will Tom Brady play next season?
Andy Scholes has more in this morning's "Bleacher Report".
To be or not to be?
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Good morning, Christine.
It's the big question of the NFL off-season right now. Will Brady return to the Patriots where he's played his entire career or at 42 years old make the move to a new team?
NFL network in a wrap report reporting Brady's agent meeting with teams this week at the combine. Those teams include the Los Angeles Chargers, Las Vegas Raiders, and Indianapolis Colts.
Now, agents are not allowed to discuss free agents right now, but Brady's agent also represents other players who are currently on those teams and well, you know, people talk.
Vegas odd makers, they've set odds on which team Brady will play for next year. They have the Patriots as the favorites to bring Brady back. The Raiders the second favorite to land Brady.
Teams can officially start signing players when they new league year begins on March 18th.
Meanwhile at the combine, Alabama wide receiver Henry Ruggs nearly making history. Ruggs running a 4.2749-yard dash that's Deion Sanders speed right there. He was just 0.05 off the fastest time ever which was set by Bengals wide receiver John Ross back to 2017.
Meanwhile, when it came to the bench press, one guy was turning heads, and it was punter Michael Turk. The 21-year-old from Arizona state getting in 25 reps at 225 pounds. It was the most ever for the punter. He was the only kicker or punter partake in the bench press because, you know, it's not a very important measurement for what kickers need to do out there on the field.
But Turk now owns some impressive bragging rights, 25 reps. That's more than defensive lineman stars like Damien Plany (ph) and Frank Clark.
All right. Finally, the Senators' Bobby Ryan with an emotional return to action last night. Ryan left the team in November to enter the joint NHL assistance program after admitting having a problem with alcohol. Ryan recording a hat trick in the game last night and was fighting back tears as the crowd there gave him a big standing ovation.
(BEGIN VIDEO CLIP)
BOBBY RYAN, OTTAWA SENATORS FORWARD: It's kind of all over. It was a great night. You can't write it any better. And you know, a hat trick's great and that contributed. It was just a great night. I'm glad my wife was here. I'm glad I was able to do it at home.
(END VIDEO CLIP)
SCHOLES: Yes, pretty cool there, Christine, Ryan away from the team a hundred day and to come back and have a hat trick.
ROMANS: And that kicker, I've never seen anything like that before. Amazing.
SCHOLES: You know what, Turk, get out there.
ROMANS: I know, my producer is like whatever you -- don't rough the kicker. Andy Scholes, thanks, Andy.
Laura, what's up next?
JARRETT: He looks like you in the gym, Christine.
JARRETT: Well, in the blink of an eye, concerns about coronavirus wipeout more than a third of the gains on Wall Street since the president took office.
What will he say about it today, how will he put a good spin on that and when will global markets recover?
ROMANS: All right. Global stock markets just cannot shake the coronavirus. The biggest single day drop in the history of the Dow and looking like another rough start on Wall Street this morning. Can the markets stabilize, and what will the president say about it?
JARRETT: And will the firewall hold? The fate of Joe Biden's campaign hinges on tomorrow's primary in South Carolina.
Good morning, everyone. This is EARLY START. I'm Laura Jarrett.
ROMANS: And I'm Christine Romans. It is Friday, 30 minutes past the hour.