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U.S. Stocks Open Lower; Rep. Adam Smith (D-WA) is Interviewed about the Economy, the Middle East and VP Contenders; Capt. Molly Murphy is Interviewed about Graduating Ranger School; Simone Biles Earns Silver. Aired 9:30-10a ET

Aired August 05, 2024 - 09:30   ET

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

[09:30:00]

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: As soon as possible, including the Americans, who put out a statement saying, just get any flight, regardless of where it's going, out of Beirut.

Now, the British embassy has withdrawn dependents of staff there. Now, I contacted the U.S. embassy. They tell me that they're maintaining their current status. But certainly they're keeping a very close eye on this situation given the tensions of the moment.

Sara.

SARA SIDNER, CNN ANCHOR: Yes, it is tense, as it has been for a while.

Ben Wedeman, thank you so much to you and your crew there.

All right, breaking news, markets about to open. I think they should be opening actually now. This is after a global sell-off. European and Asian markets plummeting around the world. And we've been looking at futures, and they were more than 1,000 points down.

RAHEL SOLOMON, CNN ANCHOR AND CORRESPONDENT: Yes.

SIDNER: Rahel Solomon, we are so lucky to have you here, but you bring us bad news.

SOLOMON: Yes, I bring bad news today, at least so far. We'll see how the markets open, and we'll get that pulled up just as soon as we -

JOHN BERMAN, CNN ANCHOR: Yes, let's pull up the big board so we can see where things are right now actually because it's ugly.

SIDNER: There it is.

SOLOMON: So, we're still off, yes, about 1,000 points for the Dow. So, this is a continuation, and we'll see how the S&P and the tech heavy Nasdaq are opening. I imagine probably not good.

But this is a continuation from Friday, right? It's the new week. Same old concerns that plagued the session on Friday. So, on the one hand, you have that jobs report that came out obviously weaker than expected. And you have some who say, it's one jobs report. It's one data point. That does not necessarily make a trend. On the other, and this is where the market appears to be, there is a growing feeling that the weakening that we have already seen in the labor market is intensifying, but also maybe the Fed dropped the ball. Maybe they waited too long.

We can actually pull up for you where the Fed Funds Rate has been. And you can see it's been in that 5 percent range for quite some time. Sort of - sort of adding to these concerns that maybe the Fed did too much. This is the unemployment rate, which we saw, obviously, jump in last Friday's report as well.

But it's sort of adding to these concerns that perhaps the Fed has done too much. Perhaps the interest rates are too restrictive and you're seeing that sort of in consumer spending, that being the concern.

So, the question now is, what does the Fed do? What do we do with this? I talked to Mark Zandi, the chief economist of Moody's, a short time ago, I asked him the same question. And this is what he told me. He said, "the fed needs to start moving. If they don't, we are going to have a problem. The economy is sputtering and it's going to stall out. Recession feels much more likely."

So, the clear message is, the Fed's got to move.

BERMAN: Let's put up again so we can see where things are, that's the Dow.

SOLOMON: Yes.

BERMAN: More than 1,000 points. A big round, ugly number. I think it percentage terms, the Nasdaq even uglier right now.

SOLOMON: Yes. Yes.

BERMAN: The tech heavy Nasdaq.

And in Japan overnight, they had record down day. More than 10 percent, driven largely by tech right there.

SOLOMON: Yes, so you have -

BERMAN: What's happening and why?

SOLOMON: So, you have the Nasdaq, obviously, the tech heavy Nasdaq. So, you think about names like Apple. You think about names like Meta. So, part of this - and there are a lot of different factors. Part of this is perhaps the market was too frothy, as investors might say. Perhaps this is a correction.

I will say that I spoke to, and then just to point out the Japanese yen, as you pointed out, what we're seeing here in the U.S., even worse overseas. And there's this expression in the markets that when the U.S. catches a cold, the rest of the world catches pneumonia, right? And so part of that perhaps is what we're already seeing.

But for people who are watching this at home thinking -

BERMAN: Things falling everywhere. It's not just the markets.

SIDNER: I mean, everything is falling.

SOLOMON: Right. Exactly.

SIDNER: The sky might come next.

SOLOMON: Hold on to your seat. But for people who are watching this thinking, OK, one, what does this mean to me and what should I do? Greg McBride, who's the chief financial analyst at Bankrate, he pointed out, "look, volatility is common and a 10 percent pullback tends to happen on average every 12 months. Investing for the long- term means embracing these periods of turbulence either to buy more, if you're feeling like you have that risk appetite, or to maintain the long-term perspective." So, hold on, buckle up.

SIDNER: It's always what they tell you is to hold on. But I guess the big question is, when the Fed might drop rates.

SOLOMON: And if I might - producers, if you might give me another minute or so, I will say that the next time the Fed is scheduled to meet is mid-September. But what you are starting to hear much more of is, do we see an emergency cut, a meeting in-between meetings. Even this morning, Jeremy Siegel of Wharton said as much on CNBC. So, do we see the Fed not only move, but move quickly?

SIDNER: Quickly.

BERMAN: All right, we will be watching that.

SIDNER: Yes. (INAUDIBLE).

BERMAN: We will be watching the markets all morning long.

Rahel, I think you better not go far the way things are looking right now.

SOLOMON: For sure.

BERMAN: Thank you very much.

All right, with me now is Democratic Congressman Adam Smith, who is the ranking member of the Armed Services Committee.

Congressman, just one quick question, what we're seeing in the markets right now. How do you feel when you look at these numbers drop this morning on what are now global fears about the U.S. economy?

REP. ADAM SMITH (D-WA): Well, I think it's time to bring interest rates down. I mean, I think your - your analysis of your guess there is spot on.

You know, we've seen an economy that has been remarkably strong coming out of Covid.

[09:35:02]

They've been predicting recessions for several years. They haven't happened now. And I think the Fed's handled that fairly well.

But inflation is down pretty close to zero. And now you have opposite pressures on the market. And I think the Fed should respond. And I think they will respond.

So, I think we could ride - ride through this and get to a good place. But, look, as you know, the global economy is very complicated and very difficult.

BERMAN: Look, and that's the concern behind door number one. The concern behind door number two this morning is what is happening in the Middle East as Iran and Hezbollah have promised to respond to Israeli actions over the last week.

What is it - and you are the ranking member of the U.S. Armed Services Committee - what is it you think the U.S. needs to do today, tomorrow, the next day?

SMITH: Well, what they've been doing, which is to push for calm and peace and not an overreaction in the Middle East. So that's one. Two is also what we've been doing, which is make sure we have an adequate deterrent capability in the region, support for Israel, certainly, but to protect our troops as well, to make it clear to Hezbollah and Iran and other actors that they don't want to escalate.

And look, they don't want to escalate. Iran doesn't want a war. Hezbollah doesn't want a war. We have to make -- take advantage of that. But make sure we have a deterrent capability in the region and then keep pushing for a peace deal. I mean the pathway out of this is fairly clear for Israel, get to a ceasefire in Gaza with the return of the hostages, get to a future for the Palestinian people so you can build the security agreement between the U.S., Israel, Saudi Arabia, the UAE and Jordan that has been in - was envisioned, frankly, before October 7th. That's where we've got to get to.

I think the Biden administration is leading the effort for calm and to get to that ceasefire and those alliances being built.

BERMAN: In a word, how nervous are you this morning about this?

SMITH: It's - it is a very nervous situation. And I think it's a huge problem. And there's big risk of miscalculation. You know, Iran has stirred the pot in the Middle East. They have empowered all manner of different terrorist organizations, and Hamas and Hezbollah and the Houthis and various militia groups throughout Iraq and Syria, you know, and they've turned them loose and they seem to think that they can control them. Well, that's an extraordinarily risky thing to do with groups like this that are so fanatical in many instances.

And secondarily, I'm nervous about the fact that Prime Minister Netanyahu needs to begin to outline a future for the Palestinian people and stop undermining that future, particularly in the West Bank, as we go forward so that we can get to that peaceful outcome. So, there's a lot to be nervous about. But I think the U.S. leadership in the region has played a very positive role.

BERMAN: Congressman, one of the reasons we like having you on is you have a tendency to tell us what you really think, which could ultimately become a problem for you over the coming days. But I heard you say recently, you actually, unlike most Democratic members of Congress, have a favorite in terms of a possible running mate for Vice President Harris. I've heard you say Mark Kelly, you think, would be a great choice. Why better than say Josh Shapiro?

SMITH: Let me make one thing perfectly clear. The six people that the vice president Interviewed this weekend, any one of them would be outstanding. And now you're down to sort of the picking nits portion of this. It's people, I liked that, I don't like that. So, any one of the six that she interviewed, incredibly talented, successful, accomplished individuals who have done a lot with their lives, who will add a lot to the ticket. And as soon as this announcement is made, no matter who it is, I'm going to be really excited about it.

Look, I think Senator Kelly brings the most do the ticket. You know, astronaut, fighter pilot. You know, he and his wife Gabby have been working on gun safety for a while. By the way, Gabby is an incredibly compelling figure as well who would be part of this. And I think Mark brings the right sensibility to the ticket in terms of, you know, we tend not - we tend to like reluctant politicians in America. And Mark has been a reluctant politician. He got into politics for the same reason millions of other people did, because of Donald Trump in 2016. But he - I think he has a very strong understanding of the American people all across the board. And I think he'd be a great addition to the ticket.

BERMAN: Yes.

SMITH: But again, all six would be outstanding.

BERMAN: Very quickly, there has been a lot of criticism, or some criticism, I should say, from people inside the Democratic Party of Governor Shapiro over for the last several days, some of which seems at least loosely connected to his faith, or at a minimum, his support of Israel in the past. What do you make of that?

SMITH: Look, it's a bad look. And I think Governor Shapiro would be an outstanding pick. And Governors Shapiro's position on Israel and the Middle East newly (ph) isn't that different, than I can see, from the position of any of the five other candidates at this point.

So, no, I don't think criticism of Governor Shapiro is warranted in that regard.

[09:40:03]

But on the other hand, look, everyone's got their particular issue, you know, in terms of where you come down. And you're going to say, well, I think that person is closer to it. But I want to say to all those folks, Vice President Harris is leading

this ticket. Her policies are the ones that are going to drive it. Whoever she picks as a vice president is going to support those policies. And again, I think all six would do a great job of that.

BERMAN: Congressman Adam Smith, great to have you on this morning. Thank you very much.

SMITH: Thanks, John.

BERMAN: All right, this morning, an unexpected fall by Olympics icon Simone Biles. We've got new reporting on the moment that cost her a medal today.

(COMMERCIAL BREAK)

[09:45:01]

SIDNER: The U.S. Army Ranger school is a grueling leadership course and a major milestone in any military career. The two-month course is exhausting, it's tough and it's unlike any other. And one recent grad has made history as the very first female Army nurse to complete the program. Captain Molly Murphy is joining us now to share more about her accomplishments this morning.

Thank you so much for being here.

Tell us how this journey started for you. How early did you start thinking, you know what, I'm going to be a first, I'm going to do this?

CAPT. MOLLY MURPHY, PEDIATRIC ICU NURSE AT WALTER REID: Thank you for having me.

It's probably about right when I started active duty, I wanted to start to go to different schools and see - see how far a nurse can make it in each school. So, I went to, you know, airborne school, aerosol jungle school, and I was like, maybe jungle school will be where I - where I end in my - my trail. And then after jungle school I had some people tell me I should go to Ranger school. And my best friend Page (ph), her dad was like, don't worry about your hair, you're fine, it will grow back. And I was like, I don't - I don't know. I don't know if I want to lose my - you know, I had long, blonde hair.

And I finally decided, you know, hair grows back. And about a year before I started the school, I started really focusing and training up on it. And, yes.

SIDNER: Can you give us a sense of just how grueling it was, because we say the word grueling, but people may not understand just what you have to go through for those two months just to get through it.

MURPHY: Right. Well, the first week is definitely the most difficult. It starts with your lack of sleep and you just go through event after event. And then, beyond that, you're just standing for hours, just all day on end, and you don't realize how much of a toll that takes on you until you're there doing it. And luckily I do have the nursing background where we stand 12 hours a day and we're constantly running around. So, that was a good, helpful - helpful for me.

Beyond that, then you're just going in these field training exercises in you aren't - you're getting your - your two meals a day and you may or may not sleep that night and you don't really know until - till the next morning when the sun rises and you haven't slept. And trying to lead and follow and stay positive in that environment is just very difficult.

SIDNER: Yes.

MURPHY: But I had - I had some great guys around me that helped - helped keep me - keep me positive, keep me motivated.

SIDNER: Yes, having no sleep, it can really, really be difficult, especially when you're doing all these physically grueling things and then you have the mental component as well trying to be strong and not break down, because that's what they're trying to do to see how far they can push you.

MURPHY: Right.

SIDNER: I am curious what you think women can bring to the table that may be different from your male counterparts.

MURPHY: Well, I can't speak for all women, but for myself, especially as a nurse, I was able to bring just the caring attitude towards the males. You know, they came up to me with all their ouchies and boo- boos and I was able to kind of - kind of, you know, walk them through that. And like truly bring that sense of caring side. Like, I cared about every single one of the guys I was with because they gave me that same respect and they really cared for me. Like, we can bring that. And just my organizational skills. I was able to really help with the operational order and ensuring that everything was like written nicely for the person who has to read it off in the morning.

SIDNER: You did all the things. But to hear somebody say that the guys had ouchies and boo-boos is the highlight of my morning for an Army Ranger. That is hilarious.

Thank you so much, Captain Molly Murphy, for sharing your really cool story with us. We appreciate it, and congratulations.

MURPHY: Thank you. Thank you so much.

SIDNER: John.

You're welcome.

BERMAN: Yes, it wasn't the captain's fault, but right under her face you can see that dismal opening on Wall Street. The Dow more - down more than 1,000 points already. We have the very latest. This is going to be a crazy day on the markets.

And we have a real-time update on Simone Biles at the Olympic. Stand by.

(COMMERCIAL BREAK)

[09:53:38]

BERMAN: All right, just moments ago, what could be the last time we ever see Simone Biles compete at the Olympic games. So, how did she do?

CNN's Coy Wire is there with the latest.

Spill, Coy.

COY WIRE, CNN SPORTS ANCHOR: Yes, good to see you, John.

Simone Biles finishes out her 2024 Olympics with a silver medal to add to the three golds she's already won here. She did miss out meddling in beam earlier today. But her floor routine, just moments ago, jaw- dropping. She stepped out of bounds, John, a couple of times, likely costing her the gold. But her difficulty level was on such another level that it still won her the silver. A triple twisting double backflip at one point. Tom Brady was there, your boy, John, in the stands. His face lit up and you could see him mouth the words, wow, that's ridiculous.

It was Brazil's twenty-five-year-old star Rebecca Andrade winning the gold in the floor. Her first gold of these games. Simone was cheering her and hugging her. Such great sportsmanship and good karma because Andrade had been cheering Simone all along the way, John.

Five medals in all for the GOAT at these games. An American record. Eleventh in her Olympic career. And she has not ruled out competing in the 2028 games on her homeland in L.A.

All right, Team USA's Clark Kent of gymnastics feeling like Superman, John. Steve Nedoroscik has gone viral during these games for his pommel horse heroics, his big personality, elite Rubiks cubes skills, and his glasses.

[09:55:05]

I asked him about that and his nickname. Check it out.

(BEGIN VIDEO CLIP)

STEPHEN NEDOROSCIK, TEAM USA GYMNAST: I kind of just wanted to be that guy who might be a little bit nerdy, but also really good at sports. That's kind of all I wanted to be.

WIRE: Are you cool with his nickname Clark Kent?

NEDOROSCIK: Totally cool. Yes, I love it. It's all those videos and memes of me sitting my head back, I'm visualizing like my routine over and over and over again, as well as doing some breathing exercises.

WIRE: He's not sleeping. You're not (INAUDIBLE). NEDOROSCIK: I'm wide awake. I'm processing everything.

(END VIDEO CLIP)

WIRE: Visualization, John. He won an individual bronze in pommel horse and his pommel horse performance in team propelled the men to their first team medal since 2008. He is fastening. He's got an electrical engineering degree. Said he might want to get into maybe audio and something working in our industry, in media. So, we'll see what's next for Clark Kent of gymnastics.

BERMAN: I hope you gave him good advice when it came to that.

Coy Wire, thank you very much.

And let's just say, boundaries cannot contain Simone Biles.

SIDNER: That is true.

BERMAN: Right?

SIDNER: That is true.

But I'm visualizing sleeping right now.

BERMAN: Yes.

SIDNER: I'm not visualizing doing anything amazing like these athletes.

But thank you so much for joining us. This is CNN NEWS CENTRAL. "CNN NEWSROOM" with Jim Acosta, up next.

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