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Wall Street Bracing as U.S. Officials Warn of Coronavirus Spread; CDC Confirms First Coronavirus Case of Unknown Origin in U.S.; Trump Downplays Risk Amid Growing Concerns of Health Crisis; Democratic Candidates Make Final Pitch to Voters Ahead of South Carolina Primary; Battered Markets Expected to Drop for the Fourth Straight Day. Aired 9-9:30a ET

Aired February 27, 2020 - 09:00   ET

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

[09:00:05]

POPPY HARLOW, CNN ANCHOR: Good morning, everyone. I'm Poppy Harlow.

JIM SCIUTTO, CNN ANCHOR: And I'm Jim Sciutto.

The breaking news this morning, Wall Street battered and now bracing to take another major hit. The reason, the spread of the coronavirus.

HARLOW: That's right. Also this morning, a stark warning from Goldman Sachs which says U.S. companies will likely generate no earnings profit this year. None.

Let's begin this hour with our chief business correspondent Christine Romans who is here.

When Goldman Sachs talks and they analyze the numbers --

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

HARLOW: -- people listen. This is quite a warning.

ROMANS: It is. And I want to show you what futures are doing right now because they're down sharply again. If the market opens like this you're going to have the Dow 10 percent off its most recent high. That's a big move in a short amount of time and it's reflecting concerns about what the coronavirus and basically crippled supply chains and tourism, and people working from home and the health implications of this, what it could mean for the global economy and for the U.S. economy.

Around the world, you saw the FTSE down very sharply. European shares down hard, and six days in a row, the Dow has been down. The S&P 500 now is posting its worst week since December 2018. That was a terrible, terrible month for the stock market. Those are recession fears then.

Goldman Sachs is saying you could see another 7 percent down in the S&P 500. No earnings growth for this year and companies could actually lose money for the first half of the year.

SCIUTTO: And to be clear, this is not just about sentiment, fears, this is in the numbers. It's about economic slowdown.

ROMANS: Yes. And the stock market is so important to remember. It reflects the profitability of companies. Right? How much money companies are making.

HARLOW: Yes.

ROMANS: And because of the coronavirus and what it means around the world in a globalized economy, it means that companies will make less money and they will probably have higher costs and there will be disruptions. And we don't know how big those disruptions will be. That uncertainty is feeding into this base line unease among corporate executives.

I mean, just today our own company sent out an e-mail saying, you know, if you're traveling, who should stay home, where you should avoid. All companies, all managers are trying to figure out how to limit the exposure for their -- now I will say the economy, the consumer still remains strong. Unemployment is low. So it will be the consumer that holds things up here.

HARLOW: If it does this time around.

ROMANS: Yes.

HARLOW: Romans, thank you so much.

There are now more than 80,000 confirmed cases of coronavirus around the world. Here in the United States this morning, though, authorities are focusing on a single person. A coronavirus patient in northern California who did not travel to another country and did not knowingly at least come into contact with any infected patient.

SCIUTTO: Now if that's confirmed, that would mean for the first time here in the U.S., someone may have been infected while out in their own community. This matters as you measure the spread of a virus like this.

Joining us now from San Francisco, CNN correspondent Dan Simon.

And, Dan, what do we know specifically about this case? Do we know for certain that this person had no contact with someone who had traveled to China or is that still being investigated?

DAN SIMON, CNN CORRESPONDENT: Jim and Poppy, that's what we're being told, and that's what this case is all about. It represents a new phase with the coronavirus that here you have a patient who did not travel to one of these foreign countries where the virus has been spreading. Also appeared not to have any contact with anybody with the virus. So the source of this infection remains unknown. And that's what's particularly frightening here.

It raises questions as to whether or not the coronavirus is spreading. Particularly here in northern California. Right now, this patient is being treated at the UC Davis Medical Center in Sacramento. I want you to hear now from one of the doctors at the hospital. Take a look.

(BEGIN VIDEO CLIP)

DR. DEAN BLUMBERG, INFECTIOUS DISEASE SPECIALIST, UC DAVIS MEDICAL CENTER: We can't say that there's definitely more but I think it's highly suggestive that if there's one, there's probably more than one, there's probably other people. That suggests that the virus is out there in the community and that means pretty much that everybody is at risk.

We don't know who might be carrying it. We don't know who we could get it from. But that other person probably exposed other people, and you have to realize that this virus is so new that none of us have any immunity to it. So anybody who is exposed is at high risk of getting infected with this.

(END VIDEO CLIP)

SIMON: And one thing that is concerning here is that this diagnosis was delayed. This patient had been at the hospital and the hospital wanted to get this patient tested, but the CDC delayed the testing. So that means potentially that the patient could have exposed other people to the virus.

Jim and Poppy, I'll send it back to you.

HARLOW: Wow. Dan, thank you for that reporting.

Meantime, the president has appointed Vice President Mike Pence to oversee the administration's handling of how they respond to this.

SCIUTTO: Today Pence will lead a task force meeting as the White House tries to tamp down fears. The president insisting the outbreak risk here in the U.S. remains, quote, "very low." Keep in mind this is despite warnings from the Centers for Disease Control whose job it is to track these sorts of things.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't think it's inevitable. It probably will, it possibly will.

[09:05:03]

It could be at a very small level or could be at a larger level. Whatever happens, we're totally prepared.

(END VIDEO CLIP)

SCIUTTO: Let's speak now to Dr. Jay Varkey. He's an associate professor of medicine from Emory University Hospital. Dr. Varkey has experience handling the Ebola outbreak.

First, I want to ask you a very specific question about this person in California. "New York Times" is reporting that the federal regulations for testing prevented this person from being tested for days because, to date, it's only a very small categories of people who are tested. People who did travel to China or had contact with people who traveled to China.

I'm curious, how big a problem is that, right, because if this thing is spreading beyond folks who have a nexus to China, then you would need to test more people, wouldn't you?

DR. JAY VARKEY, ASSOCIATE PROFESSOR OF MEDICINE, EMORY UNIVERSITY HOSPITAL: Yes. And I appreciate the question, Jim. I think that it highlights one of the challenges that our public health partners have been dealing with and that's both at the state level as well nationally at the CDC is how do we increase testing capacity?

At this stage, because the situation is fluid, that guidance in terms of when to test has been changing. And in this particular case, I think that the physicians and the medical team at UC Davis should be commended for having a high index of suspicion and for advocating testing their patient.

HARLOW: Doctor, could you help explain for everyone this morning what community spread really means for all of us as we go home and we take care of our kids and we take them to school? What is community spread and what do we need to do?

VARKEY: Sure. And Poppy, I think that that's the kind of key message is that this notion of community spread is not a reason to panic. It's a reason to prepare. And what I mean by that is reinforcing both within ourselves and within our families the basic hygiene that we use to try and keep safe during winter respiratory viral season or during a bad flu season. So this is, again, things like frequent hand hygiene. Either using soap and water or an alcohol hand rub.

This is doing things like avoiding touching your eyes, your nose and your mouth. And again, we have research here at Emory that shows that, on average, every hour, most people touch their face up to 20 times an hour. These are things that we should be more intentional about, not just during potential community cases of coronavirus but also during a pretty moderate to severe flu season.

SCIUTTO: Dr. Varkey, as you know, what's very important in outbreaks like this is reliable information getting out to the public. And it's been sobering to watch this because this is becoming, it seems, yet another partisan issue here, right, where you have the president blaming Democrats and the media for hyping this. The question becomes for folks at home who just want to know. They want to know, what do I have to do? How do I protect my kids? Right?

What should I be doing? What should I not be doing? Where is the reliable source of information for folks? For instance, you had the president at the podium yesterday, you also had his CDC -- or rather National Institutes of Health director who's telling a different story.

VARKEY: Well, Jim, I think that the key is, in terms of what we can do as citizens to protect ourselves and our families, and then coordination in terms of what happens broader within the country. So again we talk about some of the issues we as individuals can do. I think what we are looking for and I'll harken back to when we successfully cared for patients with Ebola at Emory University Hospital.

What we had was close coordination between the federal government, the CDC, the FDA, the State Department and our local and federal health partners. And I think that that close coordination really helped us safely care for folks in very different circumstances.

HARLOW: Sure.

VARKEY: And there's no reason that couldn't happen again.

HARLOW: Dr. Varkey, is there one symptom that carries across all cases? Meaning what should I be checking for? Is it always a fever?

VARKEY: Yes. So for about 80 percent, and this is based on data we've gotten internationally. For about 80 percent of people who develop coronavirus, the symptoms can be quite mild and very similar to either a bad cold or a mild flu. And most of those patients don't necessarily even require hospitalization. But those symptoms can be like a bad cold or flu, a fever, a cough, shortness of breath, potentially even a sore throat and GI symptoms.

It's some of the other, that 15 percent to 20 percent that might develop symptoms of a more severe pneumonia that we're looking for that might require hospitalization and more advanced care.

HARLOW: I just think so many people have those symptoms right now. You know, my kids had a bad cough for two weeks.

SCIUTTO: Sure.

HARLOW: Does that -- I mean, does she need to be tested? I just -- how do people decide at home?

VARKEY: Yes. So I think at this stage, as we're learning in terms of with the majority of the cases still being international.

HARLOW: OK.

VARKEY: I think the reality of it is focusing on symptoms and recognizing that whole principle of identify, isolate and inform.

[09:10:02]

What I mean by that is that rather than focus so much on -- so we may be at an inflection point where the real focus is on symptoms. And that doesn't mean that every person with a fever or cough needs to be tested for coronavirus. But it does mean that those persons should take the basic hygiene symptom -- hygiene steps to avoid transmitting infection to others.

HARLOW: Sure. SCIUTTO: Right.

HARLOW: OK. Yes.

SCIUTTO: Listen, important questions because I have exactly the same questions you do.

HARLOW: Exactly, right? Yes.

SCIUTTO: And I'm sure a lot of people watching today. And folks, we're going to bring it to you as we have it as best we can.

HARLOW: That's right. Next hour -- thank you, Dr. Varkey.

We're going to answer some of your questions. Our own Dr. Sanjay Gupta will join us and take your questions one by one and walk us through all of this.

Let's talk more about the politics here that you brought up, Jim, with our chief political correspondent Dana Bash and CNN national security commentator Mike Rogers, also formerly Republican House Intelligence chairman.

Good morning to you, guys. Thanks for being here.

Dana, what are we looking at now in terms of if all of the key agencies in the White House are really on the same page?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: They certainly seem to be trying to take steps to be on the same page. The fact that the president came out and announced that the vice president would be the one overseeing the task force, which the HHS secretary is in charge of, and that the VP would report to the president, is more than we knew before. The fact that it seemed to have been a surprise to the HHS secretary isn't necessarily the greatest sign in the world.

But, to be fair, this is a fast-moving thing. And the big question is, how are all of these individuals going to wrap their arms around a bureaucracy that really, really needs to work here. A public health system that needs to work in a way that hasn't proven, thus far, if you just listen to our Sanjay Gupta, that it will work in terms of understanding how to, as you were just talking about with the doctor, how to see the signs and then report those signs.

SCIUTTO: Mike Rogers, the president's focus has been, it seems, focused on the market. The market reaction to this, rather than -- and making a deliberate effort here. And there's nothing wrong with calming fears. But there was a moment at the podium yesterday where the president said for instance one thing about vaccines and then the guy who's in charge of vaccines for the country said, no, this is many months away.

Are you concerned about the president's leadership here, putting political -- his political fortunes, as tied to the market, ahead of concerns about this outbreak? MIKE ROGERS, CNN NATIONAL SECURITY COMMENTATOR: Listen, I'm concerned

about any politician that puts their own personal concerns ahead of the substance of the problem set. So I have mixed feelings about this. I think because the vice president is there, if there are any problems to mitigate, you have someone that can do that quickly. So if you are thinking about test kit problems, which there are.

The criteria for testing, which there are problems with those, this can get sorted out in that kind of a fashion pretty quickly. That, to me, is a positive. If it's to manage the message coming off of what this is, I have a problem with that. I think clarity, transparency, everybody needs to be on the same -- and by the way, the people should be out front talking about this are not the political figures.

It really should be CDC folks, folks from the National Institute of Health. Those are the folks that should give that calming --

HARLOW: Sure.

ROGERS: And by the way, and tell you, for those very questions that you just had, we've all had it. I had a cough two weeks ago that just didn't seem to go away. You know, everybody starts thinking, uh-oh, do I have this thing?

HARLOW: Yes. Yes.

ROGERS: And that's problematic if you don't have all the answers.

SCIUTTO: (INAUDIBLE) know all the answers to these questions, we'll find out, does this latest flu shot, for instance, cover in any way, does it provide any protection? I don't know.

HARLOW: Yes. Another good question.

(CROSSTALK)

ROGERS: I think the answer you're going to find is no.

SCIUTTO: I think it's no but we'll confirm it because it's important.

HARLOW: So, Dana, it is the vice president who has been tasked with this. Not officially a czar like with the Ebola czar, but it's his job. And there have been some questions raised about, is he equipped to do this given his history just in -- you know, just a few years ago in terms of handling an HIV outbreak in rural Indiana when he was governor, being very slow to agree to decriminalize needle exchange? And once he said he would pray about it once he finally did that, it really stopped the crisis there in that community.

BASH: A lot of criticism about that, and I'm sure we're going to hear a lot more about what happened in Indiana when he was governor with that crisis, and questions of him about why he handled it that way and how he has, hopefully, learned from that, given what's happening now.

What's interesting is, you see this auditorium behind me. We had a series of town halls here tonight, and almost to a person, not surprisingly, the four Democratic candidates on the stage criticized the administration's handling of this.

But Amy Klobuchar, who I was with, said there needs to be a medical professional in charge of this. You know, that's an interesting point. There wasn't the czar during the Ebola crisis was Ron Klain who is extremely experienced in the law and government, not a medical professional. But he had --

[09:15:00]

HARLOW: Yes --

BASH: A team of them around him. And that is not -- we saw some of them --

SCIUTTO: Yes --

BASH: Last night, but we really aren't hearing from them as --

SCIUTTO: Yes --

BASH: Overtly as we could. And just one other quick thing that I want to say because Mike Rogers is talking about the crisis. We feel like we're in a state of crisis really for the past three years. But we haven't had during the Trump years, a crisis that is not, frankly, of -- based on behavior of the makings on the inside out of the White House. This is real. And this is the --

SCIUTTO: Yes --

BASH: First time we're going to see --

SCIUTTO: Yes --

BASH: That test.

SCIUTTO: Yes, and it affects people's lives. It's just -- to your point about when Obama appointed a czar, this was President Trump's reaction to that appointment in 2014, I'll read the tweet. "Obama just appointed an Ebola czar with zero experience in the medical area, and zero experience in the infectious disease control, a total joke." That was president, you might say, you can level the same concern this time around.

But I want to talk about something else, just Mike Rodgers before we go, this is a president, it's been a priority for him to cut foreign aid including the global health programs and organizations whose job it is to respond to this sort of thing. Are we seeing a potential here for blow-back from that decision and that cut in funding?

ROGERS: Oh, I'm sure -- you're going to get blowback any which way. I do think there were some reforms needed in the way they were spending them. But it's never just the amount of money. How are you effectively spending that money on health care?

HARLOW: Yes -- ROGERS: So, I thought that sometimes that gets lost. It's either --

you know, I'm all in or I'm all out. And I think that probably the answer in that spending was somewhere in the middle. I do think that they're going to have to reconfigure. And this is why I think having the vice president in these meetings, if there is a problem with resources --

HARLOW: Yes --

ROGERS: He can engage Congress to help work this out. But also, we need Congress to stop going on the floor and saying, it's all screwed up. They need to be --

HARLOW: Yes --

ROGERS: Part of the solution so that you get --

HARLOW: Right --

ROGERS: This panic down.

HARLOW: Just two facts --

SCIUTTO: Yes --

HARLOW: To Jim's point. I mean, he did -- they did cut CDC funding --

ROGERS: Yes --

HARLOW: And cut CDC staffing in countries outside of the U.S. to prevent spread of infectious diseases --

ROGERS: Completely --

HARLOW: And they don't have someone on NSC tasked at this point with overseeing global health. I mean, those are just two undeniable facts --

ROGERS: No, I mean --

HARLOW: They're grappling with --

ROGERS: Absolutely right. And I think, again, they went from, yes, we need some reform to let's just --

HARLOW: Yes --

ROGERS: Get it --

HARLOW: Fair enough --

ROGERS: Get rid of it. That's where I think they made a big mistake, hopefully, this will correct that. They're going to see that this pandemic issue is real.

SCIUTTO: Yes -- HARLOW: Yes --

ROGERS: Every president is likely to confront this, by the way, from now and moving forward, given the amount of global travel. So, we're going to have to focus on this in a way. But again, doesn't mean throw money at it.

SCIUTTO: Yes --

ROGERS: It means how do we sensibly --

HARLOW: OK --

ROGERS: Get to that -- the right answer in this.

SCIUTTO: Right --

ROGERS: And by the way, inconsistency leads to panic.

HARLOW: Yes --

SCIUTTO: Yes --

ROGERS: That's what they've got to stop --

SCIUTTO: You're right for your messages --

ROGERS: Yes --

SCIUTTO: Mike Rogers --

HARLOW: Thank you --

SCIUTTO: Dana Bash, thanks very much to both of you. Still to come at this hour, all eyes on South Carolina ahead of the critical primary there. The 2020 Democratic candidates all over the state talking to voters today. Is this a make or break time in particular for Joe Biden?

HARLOW: And you can bet Wall Street is bracing for potential another major hit this morning. The Dow set to drop on that Goldman Sachs news about corporate profits. All of this tied to fears around the coronavirus. Plus, a tragic workplace shooting leaves five people dead. We'll talk you live to Milwaukee for the latest.

(COMMERCIAL BREAK)

[09:20:00]

SCIUTTO: We are just two days away from the South Carolina primary, 2020 Democratic hopefuls making their final pitches there, and in upcoming Super Tuesday states such as Texas and North Carolina.

HARLOW: Back in Washington, in an attempt to avoid a nomination mess, five months from now at the convention, House Speaker Nancy Pelosi bringing in DNC officials today to brief lawmakers on the delegate selection process and what has changed since last time. Members of Congress, of course, are super delegates and could have a key role in choosing the nominee in the second round if no candidate has secured it in the first.

Joining us to discuss, Karen Finney; former senior adviser and spokesperson for Hillary Clinton's 2016 campaign, and Toluse Olorunnipa; White House reporter for "The Washington Post". Good morning to you, guys. Toluse, let's just begin --

KAREN FINNEY, FORMER SENIOR ADVISER & SPOKESPERSON FOR HILLARY CLINTON'S 2016 CAMPAIGN: Good morning --

HARLOW: With that, the briefing today for House Democrats, and what has changed this cycle in terms of the new rules about what super delegates can and can't do.

TOLUSE OLORUNNIPA, WHITE HOUSE REPORTER, THE WASHINGTON POST: Well, this is going to be an important briefing in part because there is more and more likelihood that we could go to a brokered convention in the Sumner in which no one goes into the convention with a delegate majority and there has to be a sort of this multi-round process where super delegates and various delegates decide the ultimate nominee for the party.

And something that could be different from whoever goes into the convention with a lead. With Joe Biden starting to get some steam in South Carolina, looking like he could get sort of -- catapult out of South Carolina into the Super Tuesday, it could be sort of a messy process in which Bernie Sanders and Joe Biden and maybe even another candidate are all sort of still in the mix when we get to the convention.

And it's important that the house members know sort of what the process is going to be. A lot of them are going to be at the convention, some of them are worried about Bernie Sanders being the nominee and are looking for ways to maybe get out of that, even if he goes into the convention with a lead. So, this is the process of trying to get to the bottom of that delegate process early, so that once we --

SCIUTTO: Yes --

OLORUNNIPA: Get to the Summer, they don't end up in a messy convention with no clear leader.

SCIUTTO: So, Karen Finney, we have South Carolina, but very quickly --

HARLOW: Yes --

SCIUTTO: You move to Super Tuesday. And obviously, a lot more states are going to have a big impact here. There's a -- there's a -- there's a theory, right, that Mike Bloomberg who is spending a lot of resources on Super Tuesday, that his impact in the race might actually strengthen Bernie Sanders because he's taking support away from other moderates who are in the race, including Joe Biden. [09:25:00]

There were some polling showing that with Bloomberg in the race, Biden is much stronger, for instance, in the state of Texas, but -- or weaker with Bloomberg in the race than he would be if Bloomberg was not in the race. What do you read his impact here on Super Tuesday?

FINNEY: Yes, I think that's a really important point because it does mean that the result coming out of Super Tuesday could be far more fractured than we might have otherwise had. I don't think any one person is going to come out of Super Tuesday as the clear front-runner in terms of number of delegates. I don't see anybody amassing an unstoppable lead just yet.

That could change, obviously. I think if Joe Biden has a good showing in South Carolina, that could certainly help him in the Super Tuesday states. But I expect Bernie Sanders is going to do very well in South Carolina because he did in 2016 among younger African-American voters, and he's strong as we've seen in the polling in a number of those Super Tuesday states.

The challenge that most of the candidates are going to have is that other than Bloomberg and Warren, most of them haven't had people on the ground in those Super Tuesday states nor do they have the kind of resources to run advertising and do outreach. So, I think there's a likelihood that we'll see, you know, sort of a fractured, you know, result, and I certainly think that Bloomberg is taking some of that support away.

He's also, you know, potentially -- we have to take a look and see coming out of South Carolina what's happening to those supporters of Pete Buttigieg and Amy Klobuchar because you know, we saw some fracturing there coming out of New Hampshire.

SCIUTTO: Yes --

HARLOW: Toluse, I was really struck this morning by "The New York Times" piece that paints such a bleak picture for Joe Biden in Super Tuesday states, and it begins in California where he has, you know, one field office versus 24 for Bloomberg and 23 for Sanders. And it says, "aside from fund-raising, Biden has not campaigned in Super Tuesday in over a month."

It quotes the chairman of the Democratic Party in Texas talking about a lack of a grassroots effort in that key state. When you think about how many delegates are in California and Texas. If you are at the Biden camp this morning, what are you thinking?

OLORUNNIPA: You know, thinking that it all rests on South Carolina. Biden is really relying, he's called it his firewall. He's relying on South Carolina to push him into Super Tuesday with some momentum. The good thing that he has maybe going for him is that, if he does well in South Carolina, there are a number of other southern states that are voting on Super Tuesday in which he could potentially do well against Sanders. Sanders did not do very well in 2016 in the southern states. He lost

to Hillary Clinton in a large number of states and was not able to make up that deficit. But it is going to be very difficult when you don't have boots on the ground, when you haven't had that kind of grassroots fund-raising that has powered Sanders and some of the other candidates to do well when Super Tuesday is 14 states, all across the country.

You have to have money. You have to be on the air waves in order to really reach voters. And Biden just haven't really had that. So, he's really relying --

SCIUTTO: Yes --

OLORUNNIPA: On South Carolina, hoping that a lot of the Super Tuesday voters are looking at South Carolina, looking for an alternative to Sanders, and if he does well, he could potentially position himself as that alternative.

SCIUTTO: Yes, all right, Toluse, Karen, thanks to both of you, we are just moments away from the opening bell on Wall Street, brutal week for stocks, could continue this morning. Look at those numbers there, predicting a drop of nearly 500 points at the start. Investors still very cautious about the global effects of coronavirus.

HARLOW: And we're also expecting the Dow to open in what's technically known as correction territory. For you at home, that means the Dow would be down 10 percent from the recent high. Microsoft, the latest company to say it's not going to meet its earnings target because of the outbreak.

(COMMERCIAL BREAK)