Return to Transcripts main page

EARLY START

Global Market Sink As Coronavirus Spreads; Grand Princess Cruise Ship Docks Today With 21 Infected Aboard; Six States Set To Vote Tomorrow. Aired 5:30-6a ET

Aired March 9, 2020 - 05:30   ET

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


[05:30:02]

LAURA JARRETT, CNN ANCHOR: Markets around the world shudder, stocks dive overnight, oil prices crash, and investors run for cover. How the coronavirus and 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's 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?

Good morning, everyone, this is EARLY START. I'm Laura Jarrett.

ROMANS: And I'm Christine Romans. It is 30 minutes past the hour.

And today is the 11th anniversary of the bull market and today stocks face the biggest test since the Great Recession. Today, it's not just the coronavirus, oil prices are crashing. More on that in just a moment.

But in the stock market, U.S. stock index futures down so sharply it triggered a mechanism to stop the damage at one point and they stopped trading when they hit five percent lower. You see markets around the world tumbling. Asian markets down sharply. European shares then opened dramatically lower. You have strained supply chains, workers staying home.

Deutsche Bank, this weekend, lowered its second-quarter GDP forecast in the U.S. to negative 0.6 percent -- a contraction. A shrinking U.S. economy because of the concern about the damage of coronavirus.

The 10-year Treasury yield has collapsed to an all-time low, dropping below 0.5 percent as investors around the world pile into safe-haven assets. This a warning sign there is risk of recession around the world.

The Federal Reserve has cut interest rates for borrowers. Congress passed an $8.3 billion emergency funding package. Now, that includes money for local businesses, for communities, hospitals, testing, and diagnoses. But what about American workers? A Brookings study shows 53 million

Americans earn just about $18,000 a year. They are more likely to live paycheck-to-paycheck. They cannot afford to miss work if they feel sick.

Many white-collar companies are asking employees to work from home. Now, it's easy for engineers and business managers who are paid to work for home -- from home and can bring their laptops home, but what about rank and file workers who have customer-facing jobs?

Uber and Lyft said they will compensate drivers for up to 14 days if they are diagnosed with coronavirus or put under quarantine. We'll be looking to see if other companies do the same.

As for what's next, it looks like markets expect two more rate cuts from the Fed. It meets again March 18th. But there are major concerns the Fed doesn't have much ammunition to really juice the financial system.

It's other trick, buying up mortgages and other U.S.-backed securities, but that only works when it's buying up these things at higher interest rates. There's some chatter the Fed may need to buy other things, like stocks. That would take an act of Congress to expand the Fed's mandate.

JARRETT: Market turmoil is about more than just the buyers. 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 in London for us. John, how big of a surprise was this move by Saudi Arabia?

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, in fact, I was at the OPEC+ meeting, Laura, Thursday and Friday and they were aiming to cut 1.5 million barrels a day off the market again. That was the desire of Saudi Arabia. The Russians pushed back. I think the biggest surprise is that this was like a family dispute that spilled out into the open.

And then we had Saudi Arabia double down over the weekend, cutting prices to its preferred customers -- the big oil companies, particularly in Asia, by $4.00 to $7.00 a barrel, and that triggered the price war.

So it's almost like we have the number one and two big exporters of the world pulling off the gloves ready to duke it out in the market right now. And no doubt, the U.S. shale producers will take a few punches along the way.

I think we have to look at this stock market correction as perhaps leading up, as Christine was saying, to a recession, and this will not be good for the oil patch going forward. Now, you have the oils states -- Louisiana, Oklahoma, Texas, New Mexico -- basins even in North Dakota. They've had a fantastic 10-year run. But at $30.00 a barrel, it will be much more competitive. So we see Vladimir Putin of Russia testing the shale producers. Saudi Arabia wanted to keep a stable market and at this stage said look, if Russia's not going to go along, we're going to cut our prices and we're going to go all-out for market share. It will get pretty nasty over the next three months.

The silver lining this morning is that we seem to have a stable price, at least, with that correction. And we're between $32.00 and $36.00 a barrel, depending on the benchmark of crude you're looking at right now. It's not the route that we saw two hours ago -- a little bit more stable -- but a huge correction.

[05:35:00]

ROMANS: But, John, for the average consumer and investor looking at this today -- I mean, I think it's important, right? How historic is this -- 0.5 percent Treasury yield, stock markets in correction and gunning for bear market territory if the field keeps going like this, and an oil market crash all at once?

DEFTERIOS: It's a perfect storm, Christine, no doubt about it.

I'm saying that the coronavirus is like a black swan. We didn't see it coming --

JARRETT: Yes.

ROMANS: Yes.

DEFTERIOS: -- and therefore, it had everybody flat-footed, right?

And when it comes to the oil market here, Saudi Arabia had this intention to stabilize the market. Russia went against it and right now, they're just clashing like crazy. And it's not a healthy environment here for oil, which you'll have a spillover effect on U.S. jobs, particularly in the oil and gas patches --

ROMANS: Yes.

JARRETT: Yes.

DEFTERIOS: -- which have been so successful for a decade.

ROMANS: And you'll see bankruptcies and job losses there for sure --

JARRETT: Yes.

ROMANS: -- like Oklahoma and Texas, you know.

JARRETT: And clash with workers -- real workers in the middle.

All right. John, thanks so much. Good to see you.

Well, a big test today --

DEFETERIOS: You bet. JARRETT: -- 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 -- two crew members and two passengers. Nineteen crew members, I should say, and two passengers. Those numbers could rise after passengers are screened upon docking by the Department of Health and Human Services and the CDC.

(BEGIN VIDEO CLIP)

CAPTAIN, GRAND PRINCESS CRUISE SHIP: The first group who will 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, PASSENGER, GRAND PRINCESS: It's not quite 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)

ROMANS: Passengers will receive a full refund but that's hardly the point.

The Grand Princess has been in limbo since Wednesday when officials learned 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 and the District of Columbia.

With what's ahead today, CNN's Lucy Kafanov is at the Port of Oakland.

(BEGIN VIDEOTAPE)

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 Air Base, up north, and the March Air Base, down near San Diego in Miramar. Both of those bases have been hosting Americans evacuated from Wuhan, China so they're experienced in this. The other U.S. citizens -- U.S. residents -- they'll be taken to either Lackland 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's going to have to be tested and 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 1,100 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 Lucy, thank you for that.

The United States wants confidence the government is in control of the coronavirus situation, but the president's trusted method for winning his battles is being exposed.

(COMMERCIAL BREAK)

[05:43:45]

ROMANS: Fallout from the spread of coronavirus reverberating nationwide. Events around the country now delayed or canceled outright. The latest includes the BNP Paribas Tennis Open in California and South by Southwest. The cancellation of that popular festival will cost the Austin economy about $350 million. A lot of folks in Austin -- those 10 days are, you know, half of their revenue or earnings for the year.

There are already new school closures. More Washington districts have closed as cases are discovered and tests are done. Expect other schools to shut down as a precaution.

JARRETT: Some schools are already doing remote learning but many students don't have the Internet at home. The 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 varying lengths of time.

ROMANS: Senator Ted Cruz and Congressman Paul Gosar will self- quarantine after interacting with someone who had coronavirus at the Conservative Political Action Conference (CPAC). The two Republicans currently do not have symptoms. They say they're isolating themselves as a precaution.

Even as coronavirus cases rise across the country, the U.S. surgeon general outlines a new direction in strategy.

[05:45:00]

(BEGIN VIDEO CLIP)

DR. JEROME ADAMS, U.S. SURGEON GENERAL: Now we're shifting into a mitigation phase, 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. We actually feel pretty good that some parts of the country have contained it.

(END VIDEO CLIP)

JARRETT: So, from containment to mitigation. His comments about containment echo other White House officials. And the president said this Friday.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You know, my uncle was a great person. He was at MIT. He taught at MIT for, I think, like 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.

Every one of these doctors 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.

(END VIDEO CLIP)

ROMANS: Joining us here in New York, Princeton University historian and professor Julian Zelizer, a CNN political analyst.

And the president -- that comment -- that appearance by the president was roundly criticized and mocked by investor professionals who said they want a steady hand on the till as this is happening here and the president's talking about his late uncle and his -- you know, his -- I guess, he absorbed, by osmosis, this man's ability for infectious disease. But this is -- this is not -- the ultimate reality in narcissism that

you sometimes get from this president as he's riffing before the cameras is not helpful to confidence and very different from what we usually see from the White House.

JULIAN ZELIZER, CNN POLITICAL ANALYST, HISTORIAN AND PROFESSOR, PRINCETON UNIVERSITY, CO-AUTHOR, "FAULT LINES: A HISTORY OF THE UNITED STATES SINCE 1974": No. In a public health crisis, what you need is straightforward facts from the White House and you need some kind of calm and sense of a plan.

So those kinds of comments combined with other statements he's made about things that are not true undermine the confidence not only of markets but also of Americans who are struggling on a daily basis to figure out what to do with --

ROMANS: He said we were going to zero. Just a week and a half ago he said we were going to zero cases. Kellyanne Conway and Larry Kudlow, who advise the president, said that we have containment, we have containment. And then this weekend, the official shift from the surgeon general -- we're going from containment to mitigation. These -- this is not a steady message.

ZELIZER: Right. And all these crises are hard to handle. Every president struggles to figure out what to do. There are mistakes that are made.

But this is different. These kinds of statements are under the control of the president and this is a kind of Trumpian presidential politics meeting up with a major health crisis.

JARRETT: Isn't part of the issue here Julian that he can't insult his way out of this. He can't deny the fact that futures are down, the stock market is tanking. The oil market is in a complete clash between Saudi Arabia and Russia. I mean, these are facts that he can't fight. These are facts that he can't tweet his way out of.

ZELIZER: Yes.

ROMANS: He could pick a nickname for coronavirus that's going to help.

ZELIZER: No, that's true. His usual media strategy of distracting doesn't work when real things on the ground are happening every day. And for him, even the stock market measures are something that are very tangible.

He also needs expertise. There are moments in government where expertise is even more important than usual. He has not surrounded himself with that, he does not listen to that. And right now, as a president, he's going to struggle as a result of that as the nation struggles.

JARRETT: But even with his own advisers -- I mean, there's just contradictory messages.

ZELIZER: Yes.

JARRETT: He goes out and says to everybody, everybody who wants a test can get a test. And then Sec. Azar has to come back and say well, wait a minute. It's actually anybody who has been diagnosed and who actually has talked to their doctor.

ROMANS: Yes.

JARRETT: It's this constant push and pull between Trump's message trying to project some sort of optimism but really, the facts conflict underneath.

ZELIZER: Well, the contrast is President Obama, who also came under criticism when dealing with issues like Ebola but was very steady in terms of managing the best and the brightest around him, listening to what the experts were saying and trying to move the country toward a resolution. That's not what we're having here.

And we don't know what happens day-to-day, not just with the health crisis --

ROMANS: Right.

ZELIZER: -- but with the president. And so you want the certainty with the president as we try to deal with the rest.

ROMANS: Certainly, markets are really at a dangerous moment here. And, you know, you're a historian and I'd have to go through history to find periods this rough. You can go back to 2008, frankly. This feels like 2008, which was a problem of a lot -- of a very different making.

Meanwhile, you've got Bernie Sanders and Joe Biden who are neck-and- neck here trying to get the nomination. Bernie Sanders was on with Jake Tapper this weekend and he illustrated I think what is a very -- what is going to be his message about Joe Biden in Michigan.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D), PRESIDENTIAL CANDIDATE: In Michigan, the people here have been devastated -- devastated in Flint, in Detroit by these disastrous trade agreements that Joe Biden voted for. He voted for NAFTA. He voted for PNTR with China, which forced American workers to compete against desperate people who were making pennies an hour. We lost over four million good-paying jobs as a result of those trade agreements -- 160,000 jobs here in Michigan alone.

I voted and helped lead the opposition to those disastrous trade agreements. I worked with the unions. I knew what they would do.

(END VIDEO CLIP)

[05:50:03]

ROMANS: That's a strong message in Michigan. It struck me that is the message that got Donald Trump elected and that Donald Trump -- if he is against Joe Biden, for example -- he'll use that same -- that same argument.

ZELIZER: He will, but Biden also has the Obama-Biden record. And in 2009, the stimulus, the auto bailout -- those are also things that voters there remember --

ROMANS: And like.

ZELIZER: -- and like.

And so is the electability argument that we are now seeing in the last week is taking up a lot of strength where a lot of voters, who are Democrats traditionally, will like Biden and see him as a path forward to a new economy.

And now we have the context of this moment where the economy is shaky at best, and many Michigan voters are going to be thinking about that.

ROMANS: You know, the president's tough on -- does what's happening in the economy right now hurt him or does he brush this off. Is this a Fifth Avenue -- I could shoot someone -- a Fifth Avenue moment for him? What do you think?

ZELIZER: No, you don't brush this off. This hurts voters, it hurts his investment base as well, and I don't think this is easy to wipe away. So this is not stabilized. This is perilous, politically, for any incumbent.

JARRETT: All right, Julian. Always good to see you here on a Monday morning.

ZELIZER: Thank you.

ROMANS: Thank you.

JARRETT: Thanks so much.

ROMANS: All right, let's look quickly at markets around the world just to remind you here. You have got Asian shares closed down sharply. European shares opened lower and have been just really struggling here.

On Wall Street, futures are down sharply here. I haven't seen Dow futures update in a moment. But you had S&P 500 futures fall to five percent and then they stopped trading before bouncing, which is relative. I mean, they're still down a lot here.

Meanwhile, the 10-year Treasury yield fell to a record low, dropping below 0.5 percent as investors pile into safe-haven assets.

The outbreak is 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 have been hard-hit by stalled production lines.

We'll be right back.

[05:56:18]

JARRETT: All right, welcome back.

A big warm-up is expected in the east -- temperatures 10 to 20 degrees above normal. Here's meteorologist Pedram Javaheri.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, guys. What an incredible lineup of weather here over the next 24 or so hours.

We'll go with sunny skies across the eastern third of the U.S. Temps running some 10 to 20 degrees above average. We're talking late-April into early-May-like temperatures across parts of the eastern U.S.

Of course, we do have a front to tell you about. It is bringing showers in place that will change the pattern moving forward. But for now, we'll enjoy it. And some of those showers certainly could be beneficial if we get them in western Oklahoma -- wildfire activity there. Unfortunately, winds will accompany this particular front.

And eventually, the front does arrive across the northeast sometimes Tuesday evening, so expect the winds to pick up across the region there Tuesday into Wednesday as well.

Here's the perspective. Middle-70s yesterday in Omaha, dropping down to the 40s this afternoon. Look at Kansas City, from 71 down to 57 degrees. There's the perspective again today. Middle-60s out of Cleveland, 73 in Washington, upper 70s across New Orleans as well.

The seven-day forecast looks as such here. A cooling trend in store. We'll warm up again with showers on Friday. And notice the weekend cools off back down to reality -- guys.

(END VIDEOTAPE)

JARRETT: All right, Pedram. We'll take the warm-up.

It's hard to believe from the pictures but after a small plane crashed in Destin, Florida, two men and a dog emerged without a scratch on them. Look at that stuck in the tree. It's still not known what caused the plane to go down just short of the airport runway.

Well, "SATURDAY NIGHT LIVE" had some fun with how Fox News has been covering the coronavirus, and there was a surprise guest.

(BEGIN VIDEO CLIP)

KATE MCKINNON, CAST MEMBER PORTRAYING FOX NEWS HOST LAURA INGRAHAM, NBC "SATURDAY NIGHT LIVE": 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.

And 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, and Mexican teenagers rehearsing a dance for a quinceanera in a public park, fat Barbies, what's the maid saying?

SEN. ELIZABETH WARREN (D-MA), FORMER PRESIDENTIAL CANDIDATE: Not only did I not accept money from billionaires, I got to give one a swirley on live T.V.

MCKINNON, PORTRAYING ELIZABETH WARREN: Hi, there. How are you?

WARREN: Oh.

MCKINNON: Sorry, I just -- I wanted to put on my favorite outfit to thank you -- to thank you for all that -- all that you've done in your lifetime.

WARREN: I'm not dead, I'm just in the Senate.

MCKINNON: Right.

(END VIDEO CLIP)

JARRETT: Thanks for joining us. I'm Laura Jarrett. "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

ROMANS: The Grand Princess cruise ship is expected to dock today in Oakland.

DILL: It's not quite prison but it's a lot like that. This is not how we expected our cruise to be.

TRUMP: I would be inclined to say leave everybody on the ship for a period of time.

ADAMS: What we're prioritizing is making sure people who are sick get the medical care that they need.

GOV. JAY INSLEE (D), WASHINGTON: Every single social contact between humans anywhere in the world today is a potential exposure.

SUSAN HAILEY, RESIDENT, LIFE CARE CENTER, KIRKLAND, WASHINGTON: All these people -- you just don't know who's going to die next.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: All right, welcome to our viewers in the United States and all around the world. This is NEW DAY. It is Monday, March ninth. It is 6:00 here in New York.

And breaking overnight, it is now a pandemic. The coronavirus outbreak is now spreading across countries and continents from person-to-person with a range in rate that clearly meets the definition. So, CNN will start using that term. It is a pandemic, with one U.S. official saying we have moved past the point of containment to mitigation.

END