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Black Friday; New Omicron COVID Variant Raising Alarm. Aired 1- 1:30p ET

Aired November 26, 2021 - 13:00   ET

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

[13:00:39]

ANNOUNCER: This is CNN breaking news.

JESSICA DEAN, CNN HOST: Hi, and welcome to a special holiday edition of NEWSROOM. I'm Jessica Dean in Washington, D.C. Ana Cabrera is off today.

Right now, health experts raising the alarm, as a global race to better understand a new COVID variant begins. The fast-spreading string currently known as B.1.1.529 was first identified in South Africa and is now in Botswana, Belgium, Israel, and Hong Kong.

The two biggest concerns right now, the variant may be more transmissible than Delta, and current vaccines may be less effective against it, those warnings coming directly from the U.K.'s top health official, travel to and from the South African nations now restricted by the U.K.

Several other countries joining that ban, but not the U.S. Here's Dr. Fauci.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, CHIEF MEDICAL ADVISER TO PRESIDENT BIDEN: Obviously, as soon as we find out more information, we will make a decision as quickly as we possibly can. You always put these things on the table.

But you don't want to say you're going to do it until you have some scientific reason to do it. That's the reason why we're rushing now to get that scientific data to try and make an informed decision about something like that.

(END VIDEO CLIP)

DEAN: Fear is over the variant also rattling markets today, U.S. stocks tumbling roughly 900 points. Trading just closed, an abbreviated day on Wall Street due to the Thanksgiving holiday.

We have teams covering all angles of this, but, first, we want to get right to CNN business reporter Matt Egan.

And, Matt investors obviously concerned about this variant. What are you hearing?

MATT EGAN, CNN REPORTER: Yes, Jessica, no doubt this was a brutal Black Friday on Wall Street.

Investors are clearly spooked by this new variant, the Dow finishing down more than 900 points, around 2.5 percent. For some context, that is the worst day of the Biden era. You have to go back to October of 2020, long before those vaccine breakthroughs, to get a worst day than this.

The S&P 500 closing down more than 2 percent as well. And this was a global phenomenon. We saw selling begin overnight in Asia, where markets closed lower. European stocks really took it on the chin. Now, we do have to emphasize that there's so much we don't know yet. We don't know how effective vaccines are going to be against this new variant.

We don't know how transmissible it is. And we don't know how governments and society are going to react. But, for now, investors are selling first, they're asking questions later, because they're worried that this could somehow slow down or even derail the economic recovery.

A lot of concern about the travel sector. We have seen airline stocks, like Delta hotel companies like Marriott, Airbnb, also Carnival Cruise and other cruise operators, they have all fallen sharply. Investors are also betting on those stay-at-home stocks, like Zoom, Netflix, Teladoc. They're betting that there's going to be more demand there.

Oil prices, which are very sensitive to the economic recovery, they are down 12 percent, down to around $68 a barrel. Remember, just a few weeks ago, they were at $85. A lot of drivers were hoping for cheaper gasoline prices, but no one wanted to get there this way.

Also, we need to look at how Moderna is doing, the vaccine maker closing up more than 20 percent as investors bet more demand for vaccines ahead.

Now, I asked Mark Zandi, the chief economist over at Moody's Analytics, about what he thinks all of this means for the economic recovery, and he told me it isn't difficult to construct dark scenarios about the economic threat posed by this new variant.

And while it is prudent to consider these scenarios, it is just too premature to jump to them. We also do need to put some context around this market move. Yes, stocks finished sharply lower today. But the S&P 500, it's still up more than 20 percent on the year. It has more than doubled since falling to those lows in March of 2020.

So far, this is just a blip. Also, it's worth remembering that a lot of Wall Street, they're still away for Thanksgiving right now. This is a holiday-shortened trading day. Sometimes, when you see days like that, you could see market swings kind of get exaggerated both up and down.

Jessica, I think, big picture, everyone wants to know, how much is this new variant going to adjust the new normal that we're all living with? And I think the answer to that question is going to dictate a lot in terms of where the market and the real economy go from here.

[13:05:04]

DEAN: Yes, there's no question about that, Matt.

We're also just getting breaking news that the WHO has now named this variant Omicron.

That brings in now our senior medical correspondent, Elizabeth Cohen. We have got this new name now from the WHO.

We know that data is just beginning to be collected on the variant. We heard Dr. Fauci saying they are rushing to learn more. Help us understand what this all means and more of what we know right now.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know, Ana (sic), we have been talking all day about how this variant, we don't know if it's maybe not such a big deal or a really big deal.

This puts us more towards the side of being a big deal. For the W.H. -- the World Health Organization to give it a name, Omicron, and call it a variant of concern, there have only been four other variants of concern during the pandemic, one of them being Delta.

So the fact that it's being called a variant of concern and a name, that doesn't guarantee that it's going to be big, but it means that they have looked at the specific genetics, they had an expert team look at the genetics of this variant, and they say, look, we can either -- we either know or we can predict that there are going to be issues with this being more transmissible.

And there are going to be issues that it might escape. That's the -- sort of the scientific term, escape, to some degree, the vaccine. That's important. This is important to know, that the WHO thinks that this is of such a concern, that they say, look, we look at the genetics, and we can tell these things.

We either know or we can predict that this variant could cause problems.

DEAN: And, Elizabeth, what are vaccine makers saying about this.

COHEN: Right, so we actually have reached out to Pfizer and BioNTech. They're the folks who put out the vaccine that's the most commonly used one in the U.S.

And they say that they're working on this, that they are going into their labs, and they're seeing, could this variant affect the potency, the efficacy of the vaccine? One of the things that I'm sure they're doing as we speak is, you take blood from a vaccinated person, and you use it in the lab with the variant, and you see what happens.

And that tells you quite a bit. So what we saw, for example, with Delta, the vaccine was still effective, but it wasn't as effective, which is why we kept seeing all of those breakthrough cases. This is actually, scientists tell me, a relatively easy test to do. They could have answers within days.

DEAN: Wow.

All right, Elizabeth Cohen and Matt Egan, thanks so much for helping us put this all into perspective.

Let's go now to CNN's Pete Muntean.

And, Pete, you're tracking the travel ban aspect of this, the U.S. not a part of these restrictions, but major U.S. airlines certainly have it on their radar. What are you learning?

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: That's right, Jessica, no new restrictions here in the United States just yet.

But we know these restrictions keep popping up all across Europe. He United Kingdom really led the way here, banning flights from six countries, including South Africa, just yesterday. We know that the Netherlands is one of the latest countries to impose these restrictions.

And what's so interesting here is that passengers on a flight from Johannesburg to Amsterdam actually found out about these midflight and had to be cordoned off in a particular part of the Schiphol Airport as these restrictions were being sorted out, really creating a lot of chaos in the travel space right now.

The head of the International Air Transport Association says that this is really a bit of a knee-jerk reaction. They say governments are responding to the risks of the new coronavirus variant in emergency mode, causing fear among the traveling public. They also call for a data-driven approach to these alternatives to border closures and maybe a quarantine instead.

So, we will see how this plays out. The Department of Transportation tells me that the CDC and the State Department are monitoring this. Delta Air Lines, United Airlines, American Airlines, they all tell me that they are monitoring this. Delta and United currently operating flights between South Africa and the United States.

This is the statement from Delta. It says: "We will continue working closely with our government partners to evaluate any changes to U.S. travel policy, big gut punch to the travel industry right now.

It was not even three weeks ago that travel opened up for fully vaccinated foreign nationals coming into the United States. It just shows how quickly things can change in this new pandemic era, Jessica.

DEAN: Right.

It is. The change is constant, Pete. Thanks so much.

And let me bring in Dr. Abdul El-Sayed. He's an epidemiologist and former Detroit health commissioner. Dr. El-Sayed, great to see you. Thanks for being with us.

I just first want to get your reaction. We're learning just moments ago that the WHO has named this variant Omicron. They're considering it a variant of concern. Elizabeth walked us through a little bit about what that means.

As an epidemiologist, what do you think that means?

DR. ABDUL EL-SAYED, FORMER DIRECTOR, DETROIT HEALTH DEPARTMENT: Yes, it really is quite concerning.

I mean, I think you have to see this in the context of how fast it's doing what we call enriching, meaning how fast it's taking up space among all of the pantheon of variants. And the fact that this is enriching faster than we saw Delta enrich says a lot about the potential transmissibility.

[13:10:00]

That being said, there's still a lot that we have yet to learn. We don't know how severe the infections with Omicron are. We don't know what are -- the effects of our vaccines are going to be and whether or not they're good reactivity from the vaccines.

And we still don't know really how far this has gone. I mean, for a lot of folks, this is deja vu all over again. And what tends to happen is, as fast as you're seeing the spread, the virus is even spreading faster. And so we're probably behind knowing how far it's spread across our country.

That being said, there's still a lot more to learn. And while this is concerning, as the WHO has indicated, I do think that we have to step back and wait for the science on this.

DEAN: Right. So, it sounds like pay attention, but let's not overreact just yet.

Several countries in Europe -- of course, we were just talking about this -- putting restrictions on travelers from seven nations in Southern Africa. Do you think that's the right move right now, to be restricting travel? And should the U.S. be considering this?

EL-SAYED: Well, I do think, as we said, we want to wait for the science. And I do know that there's a lot more attention being paid to questions of spread right now than there had been.

That being said, the fact that you're seeing multiple governments restrict travel from South Africa is important. And I do think that we have got scientists and officials paying very close attention. The thing I will say is, again, these variants tend to spread, just like this virus, far faster than we can be paying attention.

And once a virus with this kind of transmissibility spreads or gets to a particular place, the speed with which it spreads is really quite fast. And so I do think that getting at it early is important. But I do know that there's a lot of attention being paid right now.

And so I trust officials to make the right decision.

DEAN: Yes.

And you wrote just this week about how Europe has been a harbinger of what's coming next to the United States. And what we're seeing in Europe right now are, cases are climbing. Cases now here in the U.S. are climbing. You also note, though, that Europe is more prepared. They're more vaccinated, they're doing more testing, they have more restrictions.

Now we have Omicron in the mix. What concerns you the most right now, laying out all of that?

EL-SAYED: Yes, I mean, it really is -- Omicron really is the curveball, and we really just don't know how it's going to land.

That being said, all this moment tells us is that vaccines are effective. And the more people getting their first vaccines and also getting their third vaccines, the less we're going to see the kinds of cases that have dominated hospitals right now, which are cases among the unvaccinated, and also the kinds of cases that have dominated the minds of people who have taken all the precautions, which are those breakthrough cases.

And so vaccines work. Make sure you get them. And we have yet to see what the reactivity of vaccines are to this new variant. That being said, it's not going to hurt. And so the most important thing I would be telling people right now is get your vaccine. And what we have seen in Europe, to get back to your point, is that the number of deaths and hospitalizations are far lower than you would expect them to be, given the number of cases.

And, again, all that points to is the difference between now and this time last year, which is that we have got vaccines on board. The only challenge here is that a lot of people are not taking them. And so the more folks who can take them, the more you're being protected against Delta, which really is -- and we have to emphasize this. That is the issue right now in the United States, but also the better the probability that you're protected from Omicron as we learn more about it.

DEAN: Right.

And you are in Michigan. That state right now is leading the nation in new cases, and according to reports, new cases in Michigan jumping 67 percent in the past two weeks, new hospitalizations up 46 percent. Walk us through this spike. How did it get so bad so quickly there? Is this more about a group of unvaccinated people in Michigan?

EL-SAYED: Jessica, that really is unfortunately the case, right?

We have got vaccination rates right up near 70 percent, very similar to the rest of the country. The challenge, though, is that you have got this group of unbothered, unvaccinated people who, unfortunately, tend to live amongst one another. And so once you get the virus circulating among a group of unvaccinated people, all of whom are sharing space, unfortunately, we are a colder climate.

And as the weather has gotten worse, you see people more and more likely to be congregating indoors. You put unvaccination together and you put congregation indoors together, as many people did just yesterday during Thanksgiving, and that's a recipe for disaster.

Now, the other piece of this is that we had a relatively large Alpha surge for the same reasons. But because we had such a large Alpha surge, it took Delta a while to really break in. And I think we're seeing the crest of a Delta surge that's coming in Michigan a little bit later.

So it's really a combination of things. But the most important thing to get back, to it here, is that we have got too many people who are unvaccinating -- unvaccinated who are unbothered about the fact that they're are unvaccinating -- unvaccinated and doing things that could spread the virus amongst them.

DEAN: Right, no question about that.

Dr. Abdul El-Sayed, thank you so much for your time. We sure do appreciate it.

[13:15:01]

EL-SAYED: Jessica, thank you.

DEAN: Black Friday now in full swing, and despite the supply chain problems and rising inflation, the analysts still expect this holiday season to break records. We have got details ahead.

Plus: a new low from the Republican Party, Representative Lauren Boebert telling a crowd of supporters a bigoted story, suggesting her Democratic colleague Ilhan Omar was a suicide bomber. And GOP leadership hasn't said anything about it.

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DEAN: Black Friday has some dark realities hanging over it this year, inflation, labor shortages and supply chain issues all dogging consumers right now.

[13:20:00]

And despite all of that, analysts still expect the shopping season to break records.

CNN business correspondent Alison Kosik outside Macy's in New York City.

Alison, what are you hearing from shoppers today?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Jessica, shoppers are just excited to be able to shop for the holiday season in stores, something that they couldn't do last year.

And everybody is just spending more on everything, but they're still shopping like crazy. In fact, the National Retail Federation is expecting holiday spending to break records this year. Consumers are expected to shell out anywhere between $843 billion to $859 billion by the time the holiday shopping season is over.

So today begins the unofficial -- or it's the unofficial start to the holiday shopping season. It is Black Friday, 108 million people expected to shop, 60 percent of those expected to shop in stores.

And that's a divergence from what we have seen in years prior. I'm talking even between before the pandemic. People want to go in stores and find what they want, because they're not relying on what they find online. They're concerned that the gifts they find online may not arrive in time because of the supply chain disruptions that are happening globally and something retailers are facing, inventory-wise, which is the reason many shoppers actually began their holiday shopping spending way back in September and October.

Adobe Analytics showed a survey that consumers found two billion out- of-stock messages on a variety of categories, ranging from jewelry, to toys, to clothing, so many people just wanting to go in stores and find what they want.

Here's some of what they told me today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: During the pandemic, we are at home off the computer, sales and stuff online. And now we can go outside, see the people, shop, fit the things, smell. It's -- yes, it's different. It's nice.

UNIDENTIFIED FEMALE: I like to come out and feel the holiday, the Christmas spirit. And it was a little phenomenal. It was good shopping at Macy's.

UNIDENTIFIED FEMALE: Everything was there. We came early, so we had everything we wanted. But we just have to be patient.

(END VIDEO CLIP)

KOSIK: The downside to having all this demand and low supply, fewer discounts. Retailers have less incentive to discount their products -- back to you, Jessica.

DEAN: All right, Alison Kosik for us in New York City, thanks so much.

And we're going to take a step back now for a wider look at the economy.

Austan Goolsbee is the former chair of the Council of Economic Advisers under President Obama. He's now an economics professor at the University of Chicago Booth School of Business. Austan, great to see you. Thanks for being with us.

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Great to see you.

DEAN: We saw the markets tumble this morning amid this news of the Omicron, now newly named Omicron variant. And there is a lot of uncertainty right now.

But what grade would you give the nation's economy currently?

GOOLSBEE: I think you got to give it an incomplete. I mean, we're trying to come back.

And there are some parts that are very strong. And I thought that was a great report, because it highlighted there are supply chain problems, but a lot of those problems are coming from there has never been higher demand for physical goods in the United States, where we haven't been able to spend money on services. So we're spending it on physical products.

And we're setting records. So it's actually going to be an unbelievable Black Friday and holiday period for the physical stores. When you go down to the mall, you're going to see big crowds of people out there physically buying stuff, retail strong, the job market very tight and very strong.

But, as I always say, the virus is the boss, and if we have Omicron, or we're going to go back and learn a bunch of Greek letters for new variants, that will affect the economy in a negative way. That's why you saw the stock market react the way it did.

DEAN: Right. And we're just hoping as we get more information that it won't be as bad as Delta was or potentially even worse.

Last month, we saw inflation surging at its fastest pace since 1990. We know that gas prices across the country are nearing their highest levels in a decade. What do you make of inflation right now? Do you think this is a temporary speed bump? Or is this a longer-term issue for Americans?

GOOLSBEE: Well, I have thought that it's more of a temporary speed bump, but temporary is measured in months, not weeks.

And the reason I say that is precisely this thing, that we're spending so much of our money on physical goods, which is very unusual. We normally spend our money on services, and we haven't been able to do that. And if we can get the virus down and go back to normal spending patterns, a lot of that pressure on the supply chain is going to ease.

[13:25:05]

It doesn't help, for sure, that all the countries of the world are trying to do the same thing at exactly the same time. So, you got Germany the highest inflation in 30 years, China highest in 30 years, U.S. highest in 30 years. But I think that's more because of how unusual those circumstances

are.

DEAN: Yes, we are just in a in a very unique situation right now.

From groceries, gas, cars, coffee, we are seeing prices going up. Do you expect Americans to cut back on their spending at any point? Or do you think this pent-up demand -- and we have heard, too, like Americans have -- a lot of Americans have a lot of savings because they maybe didn't spend as much during the pandemic.

Do you expect them to start pulling back or to continue spending?

GOOLSBEE: I think they're going to continue spending.

I mean, if you look, prices were up, but retail spending still surged. And, as I say, I think it's a sign -- for the most part, it's a sign of a healthy economy, that we're trying to get back to normal. We just have this hiccup that everybody's out trying to buy physical stuff at the same time.

The promising things are, you have seen the delays in the ports shrink. You have seen the price of oil at least coming down a bit from its peaks. Hopefully, that will translate into lower gasoline prices in the immediate run. And the market system is quite good once you give it the signal, here's how much demand we're going to have on a long-term basis.

They will figure out how to deliver it. And you kind of saw that for Black Friday and coming into the holiday season. You have seen the big retailers announce they have actually solved their supply chain problems. They're not going to have stocked-out shelves anymore than normal. I mean, normally, you get stocked out if you will wait until Christmas Eve, the way I do, to get presents.

DEAN: Right, yes, exactly, when it's the mad dash in the hours leading up to Christmas.

All right, well, Austan Goolsbee, thanks so much. We appreciate it.

GOOLSBEE: Yes, great to see you.

DEAN: You too.

New violent and ignorant rhetoric from the extreme wing of the GOP. Congresswoman Lauren Boebert now suggesting her colleague Ilhan Omar is a suicide bomber and openly calling her a member of the -- quote -- "Jihad Squad."

Where are the leaders of the Republican Party?

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