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Early Start with John Berman and Zoraida Sambolin
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; Women Underrepresented In Global Boardrooms; Saudi Arabia Detains Members Of Royal Family; Late Night Laughs. Aired 4:30-5a ET
Aired March 09, 2020 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[04:30:00]
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LAURA JARRETT, CNN ANCHOR: Markets around the world shudder. Stocks dive overnight. Oil prices crash. Investors run for cover. How the coronavirus and now an oil war could make for a very chaotic day.
CHRISTINE ROMANS, CNN ANCHOR: Thousands of passengers and crew will dock today after almost a week in limbo over coronavirus. What next in their long journey home?
JARRETT: 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? Welcome back to Early Start. I'm Laura Jarrett.
ROMANS: And I'm Christine Romans. It is 30 minutes past the hour here in New York on this Monday, this Monday that is the 11th anniversary, the 11th birthday of the bull market and it doesn't feel like it. Stocks face the biggest test since the great recession. Today it's not just the coronavirus. Oil prices are crashing around the world. More on that in just a moment.
U.S. Stock index futures down so sharply it triggered a mechanism to stop the damage, to actually pause trading. Asian markets are tumbling right now. And European markets have opened lower as well. Look at London, down more than 8 percent. Paris down 6 percent. Frankfurt down 7 percent. Those are huge, huge overnight moves.
We have strained supply chains. Workers staying from home. Uncertainty about the coronavirus. How far it will spread. Deutsch Bank this weekend lowered its second quarter GDP forecast for the U.S. to negative 0.6 percent. A contraction in the American economy. The 10- year treasury yield has collapse to an all-time low dropping below 0.5 percent as investors around the world pile 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, communities, hospitals, testing and diagnosis. But what about the workers? A Brookings study shows 53 million Americans earn about $18,000 a year. They are more likely to live paycheck to paycheck. They are more likely to not afford to miss work. They do not have guaranteed sick leave if they're told to stay home. And many white collar companies are asking employees to work from home. They will likely be paid.
Engineers and business managers. Ride share companies and food delivery companies, they 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. As for what's next, its looks like markets expect two more rate cuts from the fed.
The fed meets again March 18, but, you know, does the fed have ammunition to juice the global financial system? The feds other trick buying up mortgages and other 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, but it would take an act of Congress to expand the feds mandate.
JARRETT: Market turmoil is about more than just the virus. Oil prices suffered a historic collapse late Sunday after Saudi Arabia shocked the market by launching a price war against one time ally, Russia. Oil down as much as 30 percent overnight. CNN's John Defterios is live in London for us. John, crude on track to have the worst day since 1991?
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Extraordinary. Laura, this is one of those days where you have to kind a rub your eyes and take a look at the screen and say did I get it correct or not? I mean, a swing in the market of 2 percent in the oil market is big. We're looking at 33 to 35 percent over two trading days, Friday and Monday. Ironically it came as a result of an effort to try to rebalance the market.
The largest exporter in the world, Saudi Arabia, wanted to take another 1.5 million barrels off the market in the so-called OPEC Plus agreement. I was in Vienna, Thursday and Friday. The Russians pushed back saying it only hopes the U.S. exporters and that production of 13 million barrels a day. Saudi Arabia said, look, if you're not going to go along. They broke the meeting in a very acrimonious way.
And then over the weekend, Saudi Arabia gave indications -- formal indications to its preferred customers that it's cutting prices $4 to $7 a barrel, which is extraordinary. As you said, it's the biggest correction since 1991. It takes us back to the early start of 2016 when prices crashed all the way to $30 a barrel. And here's the irony. This is what led to the POEC Plus agreement having Saudi Arabia, Russia, and some 20 other producers collaborate to stabilize the market. Boy, did that go south over the weekend.
JARRETT: John, it seems like it's something of a tradeoff for consumers as well. You know, gas prices are going to come down, it may come down, but at a cost of jobs around the world.
[04:35:10] DEFTERIOS: Well, I would say jobs particularly in the United States
here. And there is a tradeoff, Laura, as you're suggesting. Lower prices at the pump, but a lot of dislocation in the major oil producing and gas producing states. I'm thinking of Texas, Mexico, North Dakota, of course the big Permian Basin, of course, in West Texas. We have about 10 million jobs linked to the energy sector right now.
And I think what is more important is what Christine was talking about. The downturn in the market is pointing to a recession, six to seven months down the road. Exacerbated by the oil crash that we're seeing today. And don't forget about the coronavirus. We're seeing a drop in demand for oil and a price war. So this will cause a lot of dislocation and the United States and put a lot of pressure on the Middle East economies, because they're very dependent on oil revenues and even Russia, which is resilient, but still will pay a price for this.
ROMANS: You know, John, sometimes you see one market move. Sometimes you see an outsized over reaction to markets but we're seeing the oil market crashing, the stock market actually haven't cause futures trading overnight, because it fells so sharply, 0.5 percent on the (inaudible). It feels a little dangerous here, doesn't it?
DEFTERIOS: It certainly does, Christine. We were working together back in those days. 2000, it starts to feel like that bubble is bursting. Because we had this automatic growth in the stock market. You could always think it was a one way bet. Same thing in the mortgage markets. So, the valuations were very high. Dislocation in the market -- stock market alone on the coronavirus is big. Now you add in a very nasty fight between Saudi Arabia and Russia in oil and I don't see any winners on this one. It's a big, brash move by Saudi Arabia after the Russian response, but it doesn't look promising for the oil patch.
ROMANS: All right. Watch the space. John Defterios.
JARRETT: Thanks so much, John. Good to see you.
Well, a big test for U.S. efforts to keep coronavirus from spreading on American soil. The Grand Princess cruise ship is expected to dock today in Oakland, California. At least, 21 people aboard have coronavirus, 19 crew and two passengers. Those numbers could rise after passengers are screened upon docking by the Department of Health and 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 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)
ROMANS: Passengers will receive a full refund. 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 now warning Americans against traveling by cruise ship, especially people with underlying medical conditions. There are now 565 cases of coronavirus in 34 states and the District of Columbia. With what's ahead today, CNN's Lucy Kafanov at the port of Oakland.
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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.
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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.
(END VIDEOTAPE) ROMANS: All right. Lucy, thank you for that.
Fallout from the spread of coronavirus reverberating nationwide. Events across the country now are delayed or cancelled outright. The latest include the BNP Paribus tennis open in California. South by southwest. Cancellation of the pop festival will cost the Austin economy about $350 million. The U.S. surgeon general says this about the government strategy.
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DR. JEROME ADAMS, U.S. SURGEON GENERAL: Now we're shifting into a mitigation face which means that we're helping communities understand you're going to see more cases. Unfortunately, you're going to see more deaths. But that doesn't mean that we should panic.
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JARRETT: Mitigation will mean more disruptions to travel, public gatherings and workplaces. There are already new school closures. More Washington districts have closed as cases are discovered and test are done. Expect other schools to shut down as a precaution as well. Some schools are doing remote learning but many students don't have internet at home. Government estimates six to seven million households with school age children lack home internet access. At the University level, Stanford, Columbia, and Rice are the latest to cancel in person classes, moving to remote classes for a varying lengths of time.
ROMANS: I know that a lot of parents are worried about, you know, what is my contingency plan if my kids' school closes. And a lot of parents in other schools are talking about it and what it will look like.
JARRETT: A huge (inaudible) for them. Because they have to take off (inaudible) what to do with their kids.
ROMANS: All right. Limits in the U.S. don't compare to new restrictions in northern Italy. CNN live in Rome next.
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[04:45:00]
ROMANS: All right. Coronavirus 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.
JARRETT: 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. Delia, kit seems like the situation in Italy really just escalated quickly.
DELIA GALLAGHER, CNN VATICAN CORRESPONDENT: Well, that's right. Of course, there was a spike in the numbers over the weekend so the government decided to install these new measures which Italians really woke up to and have to sort of scramble to understand what it meant for them. Of course, there's a lockdown in the north but also in the rest of the country. Museums are closed, the coliseum, for example, is closed. All of your social engagements basically for the next few weeks had been suspended.
They don't want any major public gatherings in any place throughout the country. People are trying to get used to the recommendation to stay three feet away from each other in public spaces. But as you can imagine, not a lot of people are even going out. And that is affecting, as well, tourism, restaurants, hotel industry. So there is also economic concern for these new regulations.
In fact, just a few moments ago we had a statement from the finance ministry saying that they are putting in place some measures to help support workers and those industries that are going to be affected by this temporary economic downturn. But the message from the government here to the Italians is to abide as well as possible by these new regulations which is a huge disruption to their daily lives. Schools are closed as well and people are not sure in some areas whether they can get to work. How are they going to do that? So, for the moment, at least for the next 3.5 weeks, Italians are going to have to change their daily habits in order to help stop the spread of this virus. Laura?
JARRETT: All right, Delia. Thank you so much.
ROMANS: This could be a make or break week for Bernie Sanders 2020 campaign. Six states vote tomorrow. Senator Sanders stomping 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 his disappointing Super Tuesday. On CNN, he tapped into the anti-globalization message that helped elect President Trump and he 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.
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JARRETT: Biden now leading in delegates striking a more positive tone. (BEGIN VIDEO CLIP)
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.
(APPLAUSE)
(CHEERS)
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JARRETT: Biden and Sanders both picked up some big name African- American endorsements over the weekend. 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 of the same coin. Sources say, Trump is frustrated by Biden's comeback.
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ROMANS: Twitter says for the first time ever it is labeling a video retweeted by President Trump as manipulated media. The video sent by senior White House aide Dan Scavino and retweeted by the president, misrepresents something Joe Biden said by playing only the first half of it. It had almost six million views by last night and had been retweeted more than 23,000 times. The manipulated media label is part of a new policy Twitter hopes will combat the spread of misleading videos. Twitter said, the label, may not be immediately visible to all users, something is working on. The Biden campaign is hitting Facebook for not taking similar actions calling it a national crisis. We live in a social media era of low information and misinformation that I think is -- something we really never seen before.
JARRETT: Well, if you can't even see the label.
ROMANS: That's the point. All right. It's going to be another terrible day for investors. These numbers staggering here. Big losses around the world in stocks. Oil prices crashing. Investors rushing into the bond market record levels. CNN Business has a look at markets next.
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[04:55:00]
ROMANS: This will not be a happy Monday, folks. Let's look at markets around the world. Huge losses in Asian markets and European shares have opened sharply, sharply lower, 7 percent loss in the FTSE, 6 percent in Paris, 6 percent in Frankfurt. On Wall Street, what is the mood? Equally grim.
You have DOW futures now below -- well below 25,000 and the S&P 500 futures down almost 5 percent. At one point they had hit this level that triggered basically trading to stop. It's a mechanism to break the free fall in the market. Meanwhile, the 10 year treasury yield fell to a record low dropping now below 0.5 percent. Investors pile into safe haven assets. That number right there seen as a flashing red light in the market. Now the outbreak revealing a central problem for the global manufacturing industry. Even industries that have shifted production away from China are still tangled in its supply chains. Tech and consumer electronics had been hit the hardest, the stalled production line.
All male board rooms are becoming more rare, but they are still dominated by men. Look, there's pressure from investors and others to diversify board rooms. Last year 20 percent of global board seats were held by women, just 20 percent. Now some of the credit goes to California's board room law which requires all California based companies have at least one, one -- one female Director. Still at this pace, researchers say it could take another 25 years before there are as many women as men in board rooms all around the world.
JARRETT: Senior members of the Saudi royal family are being detained in what appears to be an effort to consolidate the power of Crown Prince Mohammed Bin Salman, and prevent a possible coup. CNN's Nic Robertson is following developments, he's live in London for us. Nic, what's going on here?
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: yes, there are two names to watch here. One is Prince Ahmed bin Abdelaziz and the other is Prince Mohammed Bin Naif. Now, why are those names important? Why would they be on a list to be arrested? These two men are people who could be considered to be legitimate heirs to the throne. Prince Ahmed is the younger brother of the current king and the Prince Mohammed Bin Naif, is the former crown prince who was ousted a couple of years ago by the current crown prince Mohamed bin Salman.
So, when these two men had been taken into detentionthat raises all sorts of concerns with outside and within the kingdom as well. Why is this happening right now? And there aren't clear answers for that. I've spoken to sources in the Saudi government and they are not aware of any change in the status of Prince Ahmed or Prince Mohamed bin Naif. Now, Prince Mohammed Bin Naif really been understood to be an effectively under House arrest since Mohamed bin Salman forced him out of the crown prince position, that sort heir to the throne position in 2017.
So, it's a question, why arrest them if they've been effectively under House arrest since then? And it's interesting that sources in the government are not confirming this, they're not aware of these changes. Sources outside of the government right now aware of other senior princes who have been arrested and remain in detention. They're the ones that have this information at the moment. So this is why we're watching it very closely.
Of course, Saudi Arabia at the center of handling the coronavirus like so many countries, but also the spotlight on it, it hosts the G-20 this year. And right now it is the center of one of the reasons for the tumbling oil prices on global markets.
JARRETT: Sure. All right. Nic, thank you so much for that. Just fascinating.
ROMANS: All right on a lighter note here. Saturday Night Live had some fun with how Fox News is covering the coronavirus. And there was a surprise guest.
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UNIDENTIFIED FEMALE: Tonight's main story, I don't know why, coronavirus. The left continues to wage its deceitful, dishonest and frankly gay smear campaign against President Trump. To help you calm down, here's a list of much bigger things to worry about. You've got women who keep their maiden names. Montessori schools. Mexican teenagers rehearsing a dance for the Kings and heralds in public parks. Fat Barbie's. What's the maid saying?
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