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Global Markets Take Another Historic Dive; Virus-Stricken Ship To Dock Today; Presidential Race 2020, All Eyes On Michigan; Turmoil After Oil Alliance Between OPEC And Russia Implodes; Coronavirus Viral Outbreak, Major Events And Attractions Impacted; Severe Restrictions In Italy; America's Choice; Coronavirus Rattles Market; WA Nursing Home Employee Tests Positive; Lawmakers To Self-Quarantined After Possible Exposure; Best Friends Of 17 Years Learn They're Sisters. Aired 4-4:30a ET
Aired March 9, 2020 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: Global market shudder. On Wall Street futures take an historic dive overnight falling so far they stop trading. How the coronavirus and an oil war could make for a very down day.
LAURA JARRETT, CNN ANCHOR: Thousands of passengers and crew will dock today after almost a week in limbo over the coronavirus. What next in their long journey home?
ROMANS: And Bernie Sanders facing a big test tomorrow in Michigan. Can he beat back the Joe Biden surge? And can he stay viable if he doesn't?
JARRETT: Welcome to our viewers in the United States and around the world. This is Early Start. I'm Laura Jarrett.
ROMANS: Good morning. I'm Christine Romans. It's going to be quite a day. It's Monday, March 9th, it is 4:00 a.m. in New York and today is the 11th anniversary of the bull market and that bull market in stocks faces the biggest test yet with the coronavirus and a crash in oil prices. Oil prices crashing more on that in just a moment. U.S. futures are down sharply. The S&P down so much it triggered a mechanism to stop trading to contain the damage.
Asian stock markets also tumbling here this morning and you could see the European shares have opened lower as well. Deutsch Bank analyst this weekend lowered its second quarter GDP forecast for the U.S. to negative 0.6 percent. That is a contraction in shrinking American economy. The 10-year treasury yield collapse to an all-time low now below 0.5 percent as investors pile out of stocks into safe haven assets.
The Federal Reserve has cut interest rates for borrowers. Congress passed $8.3 billion in emergency funding, that includes money for local businesses, for communities, hospitals, testing and diagnosis. But a big question this morning about American workers. A Brookings study shows 53 million Americans earn about $18,000 a year. They are more likely to live paycheck to paycheck and cannot afford to miss work. And many white collar companies are asking employees to work from home. Engineers and business managers at Rideshare and foods of delivery companies can bring their laptops home but that doesn't work for rank and file independent contractors.
Uber and Lyft announced they will compensate drivers for up to 14 days if they are diagnosed with coronavirus or put under quarantine. But for millions of American workers, they are paid to stay home. And that is a big question for policy makers.
As for what's next, it looks like markets expect two more rate cuts from the fed. It meets again, March 18th but big concerns the fed just doesn't have the ammunition to goose the market and the financial system. Its other trick, buying mortgages and U.S. backed securities only works when it is buying up this things at higher interest rates. There is chatter the fed may need to but other things like stocks that would take an act of Congress to expand the feds mandate, not likely soon.
JARRETT: Meanwhile, market turmoil is about more than just the coronavirus. Oil prices suffered a historic collapse late Sunday after Saudi Arabia shocked the market by launching a price war against one time ally, Russia. U.S. oil down as much as 33 percent overnight. CNN's John Defterios is live for us in London. John, investors have to be waking up this morning shell shocked.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Yeah, indeed, Laura. We're used to moves of 1 to 2 percent in the oil market. And we're looking at a loss of better than 35 percent between Friday and Monday. It got ugly in a hurry. I was at the OPEC meeting on Thursday and Friday. And sources told me inside the room as they broke up it got very nasty because the original intention was to cut supplies by Saudi Arabia to rebalance the market due to the coronavirus.
Russia's always held this position that it was giving too much space to the boom of the U.S. shale producers and the U.S. being the number one producer at 13 million barrels a day. Low and behold, they both decided to break from the meeting very acrimonious. And then, Saudi Arabia doubled down over the weekend and cut prices to their preferred customers by $4 to $7 a barrel.
That is a price war. What does that mean? It takes us backed to 2016. When prices at $30 a barrel. They had this OPEC Plus agreement to try to cut production, keep the market balance, keep investment coming in. That right now is out the door. Obviously the Crown Prince of Saudi Arabia, Mohammad Bin Salman and Vladimir Putin do not see eye to eye. And this does spill over to the U.S. energy production in the future.
A lot of bankruptcy expected and the Premium Base and the Eagle (inaudible) in Texas as well, we have 10 million jobs related to the energy sector and we've seen 200 bankruptcies over the last four years. I would expect more going forward as a result of this. It is extraordinary to see a drop of 35 percent in two trading sessions. Unheard of in the oil markets since 1991.
JARRETT: Since 1991. John, thanks so much for that.
ROMANS: Remarkably you'll see bankruptcies in Texas and Oklahoma that will be a real problem. So, you know lower oil prices mean lower gas prices for consumers but it's really hard on the employers who are drilling and processing that oil.
All right. A big test today for U.S. efforts to keep coronavirus from spreading on American soil. The Grand Princess cruise ship is expected to dock today in Oakland. At least 21 people aboard have coronavirus, 21, 19 crew, 2 passengers. Those numbers could rise after passengers are screened upon docking by the U.S. Department of Health in Human Services and the CDC.
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UNIDENTIFIED MALE: The first group to be moved will be those who are symptomatic and most in need of medical support. Those in need of hospitalization will be sent to medical facilities around the region.
ARCHIE DILL, GRAND PRINCESS PASSENGER: It's not quite like prison but it's a lot like that. I am running out of medicines that I usually take. I feel like the government really didn't have a plan and they're just making this up as they go along.
(END VIDEO CLIP)
JARRETT: Passengers will get a full refund. Bu that's hardly the point. The Grand Princess has been in limbo since Wednesday when officials learned that a California man who traveled on that same ship last month later died of coronavirus. The State Department is now warning Americans against traveling by cruise ship, especially those with underlying medical conditions. There are now 565 cases of coronavirus in 34 states in the District of Columbia. With what's ahead today, CNN's Lucy Kafanov is at the port of Oakland.
LUCY KAFANOV, CNN CORRESPONDENT: Christine, Laura, good morning. That's right. A lot of mixed feelings on board the Grand Princess cruise ship. On one hand the ordeal of these passengers is over. They know that the boat will be pulling ashore here at the port of Oakland in California. On the other hand, another chapter is just about to begin. Everyone is going to be under quarantine for 14 days, it just depends on where.
So, let me walk you through sort of the sequence of events as we know them so far. The seriously ill patients, those will be evacuated first. They'll be taken to local hospitals in this area. Then begins the disembarkation process for the rest of the passengers, the American citizens specifically.
Now, the thousand or so California residents, they will be taken to two military bases in the state. Travis airbase up north and the March airbase down near San Diego in Miramar. Both of those bases have been hosting Americans evacuated from Wuhan, China. So, they are experienced than this. The other U.S. citizens, U.S. residents, they will be taken to either Lockland air force base in Texas or to another military base in Georgia.
The big question now, what happens with the hundreds of foreign passengers, foreign guests on that cruise who are on board? There are 54 countries represented on the cruise ship. We know that the State Department is working out the details with each individual country to see how they can get those residents home. They are looking into chartering flights for these residents but, again, everyone is going to have to be tested, what to do if anyone comes back with a positive test for covid-19, the coronavirus.
And then there's also the matter of the crew, about 1100 or so crew members on board. They will not be allowed to get off the ship. They will spend their 14 days in quarantine on the Grand Princess, that ship as soon as everyone but the crew is off, it's going to pull away from the port. The governor of California saying they're taking every step possible to prevent any of these passengers from mixing with the general population. They want to make sure that everyone stays safe. Christine, Laura, back to you.
ROMANS: All right. Lucy, thank you so much for that.
An employee at the hard-hit Life Care nursing facility in Kirkland, Washington, now testing positive for coronavirus. This employee is one of at least three staffers hospitalized with symptoms. Life Care says 70 others are showing coronavirus symptoms and are being asked to stay home. Life Care housed 120 residents in mid-February. That number is down to 55 including one woman who wants out immediately.
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SUSSAN HAILEY, LIFE CARE NURSING HOME: I want to go home. All these people, you just don't know whose going die next.
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ROMANS: A vast majority of vets in King County system in King County rather stem from Life Care. A first responder tells CNN at one point there were only three staff members left to take care of 90 residents last week. Life Care says it now has enough test kits to test all of the remaining residents.
JARRETT: Senator Ted Cruz and Congressman Paul Gosar will self- quarantine after interacting with someone who has coronavirus at the conservative political action conference. The two Republican currently do not have any symptoms.
They say they're isolating themselves as a precaution. A congressional recess has already been set for next week. House Speaker Nancy Pelosi and Senate Majority Leader, Mitch McConnell could extend it even as coronavirus cases rise across the country, the U.S. surgeon general makes a bold claim.
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DR. JEROME ADAMS, U.S. SURGEON GENERAL: We actually feel pretty good that some parts of the country have contained it.
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ROMANS: His comments echo other White House officials and President Trump said this Friday.
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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You know, my uncle, is a great person, he's in MIT, he taught at MIT for I think for a record number of years. He was a great super genius. Dr. John Trump. I like this stuff. I really get it. People are surprised that I understand it. Everyone of this (inaudible) said, how do you know so much about this? Maybe I have a natural ability. Maybe I should have done that instead of running for president.
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JARRETT: The nation wants confidence the government is in control of the situation, understands the reality and has the facts and the science to deal with it. It's not coming from the president bragging that his uncle is a super genius at MIT. Keeping things in context, Friday the CDC said there are 34 million flu cases in the U.S. so far the season with 20,000 deaths.
And you know, I have a theory, a long-running theory, every time we have one of these outbreaks or fire drills sometimes. We don't have paid sick leave in this country. And I think one of the reasons why we do have so many deaths to the flu, the seasonal flu very year is because we don't take measures to make sure the public can step back especially employee -- you know, in customer facing jobs and be paid to stay home when they're sick. We don't do that, 53 million people live paycheck to paycheck in this country and they can't afford not to go to work.
JARRETT: Everyone is force to go to work.
JARRETT: All right. Well, limits in the U.S. don't even compare to new restrictions in northern Italy. CNN is live in Rome next.
JARRETT: Coronavirus is affecting more people and more events worldwide. The biggest wild card right now is the Tokyo Summer Olympics. Organizers say they are keeping a close eye on developments. Meantime, Saudi Arabia is suspending schools and universities starting today. Israel is considering quarantines for everyone entering the country which could mean big changes for people planning to travel for Passover next month.
ROMANS: France has announced a ban on gatherings of more than 1,000 people. Greece also restricting public gatherings announcing that all sporting events will be held behind closed doors. School trips are banned for two weeks and northern Italy has imposed the largest lockdown outside of mainland China. Restricting the movements of nearly 16 million people. CNN's Delia Gallagher is live in Rome with the latest. It's remarkable to see the pictures of just -- you know, quiet on the streets, people at home, what is the effect?
DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: Well, you know, Christine, since yesterday there has been major disruption in the lives of Italians, not only there in the north where the lockdown measures are in place, so not much freedom of movement except for essential work or medical reasons, but also in the rest of the country. Museums are closed, historical sites like the coliseums are closed, no weddings or funerals can be held. Anything you had on your calendar for the next few weeks has been cancelled.
People are especially trying to get used to this recommendation to maintain three feet of distance between each other in public spaces. We spoke to one restaurant owner yesterday, he said, he's trying to figure out how waiters can bring food to the table if they have to maintain that kind of distance.
Of course, he also said, people aren't really coming to his restaurant. So there is concern also for the economic repercussions of these measures. The government is begging Italians to please abide by them. Of course it is difficult to enforce and police movement of people. That they're appealing to Italian's common sense to try and accept these changes for the next three and a half weeks in the hopes of containing this virus. Christine, Laura?
ROMANS: All right. Delia Gallagher, thank you so much for that, Delia.
JARRETT: Well, this could be a make or break week for Bernie Sanders 2020 campaign. Six states vote tomorrow. Senator Sanders is stumping in Michigan with a sense of urgency trying to stop the resurgence of former Vice President Joe Biden. Sanders surprised a lot of people with a win over Hillary Clinton four years ago in Michigan. He's hoping for a repeat tomorrow following a disappointing Super Tuesday. On CNN, he tapped into the anti-globalization message that help elect President Trump and slammed Biden for trade deals, he says led to the loss of four million jobs.
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SEN. BERNIE SANDERS, (I-VT), U.S. PRESIDENTIAL CANDIDATE: In Michigan the people here have been devastated, devastated in Flint and Detroit by these disastrous trade agreements that Joe Biden voted for. He voted for NAFTA. He voted for TNTR with China which forced the American workers to compete against desperate people who are making pennies an hour.
(END VIDEO CLIP) ROMANS: Biden now leading in delegates striking a more positive tone.
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JOE BIDEN, FORMER VICE PRESIDENT OF THE UNITED STATES, 2020 U.S. PRESIDENTIAL CANDIDATE: Presidents have to heal. Presidents cannot hold grudges. Presidents have to bring us together. We must beat Donald Trump and the Republican Party. But we cannot become like them.
(END VIDEO CLIP)
ROMANS: Biden and Sanders picked up big name African-American endorsements, Senator Kamala Harris for Biden. Civil Rights leader and a former presidential candidate Jesse Jackson for Sanders. As Democrats start to coalesce around Biden, the Trump campaign is arguing he's just like Sanders. During a call with reporters on Sunday, one official said they are two sides -- they are two sides of the same coin. Sources say, Trump is frustrated by Biden's comeback.
JARRETT: All right. Still ahead, they're already best friends. Turns out they're so much more.
ROMANS: North Korea fired at least three unidentified projectiles into the sea last night. South Korea said its military was monitoring related movements in case there were additional launches. A U.S. official told CNN, North Korea actually launched four projectiles. Other Americans officials said the launched were not unexpected. That signs of an upcoming launch had been observed. Last week North Korea fired two short range projectiles, likely as part of drills for winter time exercises.
JARRETT: Two best friends of 17 years discover they're actually sisters.
Ashley Thomas and Latoya Wimberly -- always had a lot in common. But they didn't know they shared a father until someone recognized Latoya's dad in some old photos. Ashley never knew her biological father. So the three of them took a DNA test. After Wimberly realized he once had a brief relationship with Ashley's mother, the results for Kenneth is Ashley's real father. While Kenneth has always been in Ashley's life through Latoya. They say they're still adjusting to this new reality. I bet.
ROMANS: Wow. That's something. All right.
This is shaping up to be the most dangerous morning for the economy since 2008. Coronavirus now mixed with an oil market crash. The U.S. economy now forecast to shrink this quarter.