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Stocks Down Again After Dow Has Worst Trading Day Since 2020; Hero Workers Saved Others During Buffalo Massacre; New York's Attorney General to Investigate Social Media Platforms After Buffalo Shooting; Case of Monkeypox Identified in Massachusetts. Aired 9:30-10a ET
Aired May 19, 2022 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JIM SCIUTTO, CNN ANCHOR: Just moments ago, Wall Street kicked off trading after its worst drop in nearly two years yesterday, starting down again there nearly 300 points. The Dow lost more than 3.5 percent yesterday.
What's happening there? Why all this right now?
Joining me now CNN's chief business correspondent Christine Romans and Jeanna Smialek, she's a Federal Reserve and economy reporter for the "New York Times."
Christine, first to you, so inflation is the worry, and then the Fed's reaction to inflation raising interest rates making money more expensive for things like buying houses and paying your credit card bills. I want to listen to what Fed chairman Jerome Powell had to say about what the Fed is up to and then get your sense of what this means. Have a listen.
(BEGIN VIDEO CLIP)
JEROME POWELL, FEDERAL RESERVE CHAIRMAN: What we need to see is inflation coming down in a clear and convincing way, and we're going to keep pushing until we see that.
(END VIDEO CLIP)
SCIUTTO: Any signs of it coming down and if not how long are we going to see them raising rates?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I mean, it means more interest rate hikes are coming. The cost of borrowing will continue to go higher and then there's this other fear, and that's what we saw in the stock market yesterday, this other fear that the Fed maybe hasn't got this quite right yet and doesn't have a handle on the situation and that could tip things into a recession in the U.S.
I mean, it's not a certainty, a recession, but the odds rising and more kind of high-profile market analysts have been saying the risks are rising. The same time you've got energy costs that are biting into consumer sentiment. Another record high for energy cost overnight. You've got a war in Ukraine, you got COVID lockdowns in China. Supply chains still pretty messed up. So there are so many cross currents.
Any one of those normally would be destabilizing. All of them at the same time, I think the bottom line here is the path of least resistance, the stock market isn't up anymore and investors have to adjust to this new set of circumstances.
SCIUTTO: Jeanna, why the heck didn't the Fed see this coming? I mean, it's been a cheap money environment through a hot economy for years. I mean, beyond Democrats pumping a lot of money into the economy with COVID relief, Republicans pumping a lot of money in the stock market with tax cuts, corporate tax cuts, that did lead to an investment boom, did lead to a lot of stock buybacks.
SCIUTTO: But why did the Fed -- this is their job, not begin to bring up rates and keep them so cheap for so long?
JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMY REPORTER, THE NEW YORK TIMES: I think it is so important to remember sort of where we were pre-pandemic in understanding the answer to this question. So before 2020, we had gone through years of really low inflation that was actually so low that the Fed was worried that it was going to become destabilizing.
And so I think when we got through the pandemic, they were very much trying not to choke off a nascent recovery and trying to allow the economy to sort of gallop ahead at a pace that would push inflation a little bit higher. Unfortunately, they got a lot more inflation than they were hoping for thanks to some of, you know, as you mentioned, big fiscal support coming from the elected government, combined with supply chain disruptions that I don't think anybody anticipated.
SMIALEK: You know, we weren't all expecting a massive car shortage last year. And so I think that they will admit, they'll be the first to admit that they should have raised rates sooner, but I think that in the moment, given the conditions they thought they were working with, they thought they were taking a prudent course.
SCIUTTO: Christine Romans, new survey of CEOs, pretty darn grim outlook, right?
SCIUTTO: Sixty-eight percent expect a recession, 60 percent think conditions will get worse, 54 percent think costs will be passed on to consumers. Wow. That's a big switch just in a few weeks' time. What does it mean?
ROMANS: It's their job to worry, right? I mean, they're worried about the shareholders, they're worried about their employees, they're worried about profits, and there is no roadmap for this. There's no playbook. I mean, you saw in those Walmart earnings, and you saw in those Target earnings that inflation and supply chain and labor costs are really starting to come home to roost for their profits. And that really was worrisome for so many other executives and C-suite people who are watching all of this.
But for regular people, for those of us who are buy and hold investors, Jim, who have money in a 401(k), I want to be really clear. If you have the S&P 500, that broad benchmark, you've lost about 14 months of gains, but you're still up dramatically from the last crisis in 2008. The Nasdaq, tech stocks have done much worse because they are much more sensitive to a higher interest rate environment.
But just a little bit of perspective here. You've lost about a year of gains in the blue chips. And you're back to October, you know, fall 2020 levels for the Nasdaq. So, you know, there's no reason to panic, but, you know, look at your portfolio and your risk balance, always good time to look at your risk tolerance and make sure you're balanced appropriately.
SCIUTTO: And you're buying cheaper now. If you're buying every month, right, you're buying --
SCIUTTO: It's that old rule, dollar cost averaging.
ROMANS: That's right.
SCIUTTO: So you're get some of these stocks hopefully lower. Anyway, that's what the financial heads tell us.
Jeanna, on the interest rate side, how should folks look at this? I know you're not a consumer economist, but, you know, listen, folks have their credit card rates to worry about, their car loan rates, their home mortgage rates.
SMIALEK: Yes. Absolutely. And it's clearly the case that rates are going to be higher. I think the good news for consumers is that markets know that and so some of this is already priced in. So to some degree you've already seen mortgage trades move up in anticipation of what's going to happen next. I think the real question is just how much higher are they going? So we are going to see a situation where consumers are facing potentially much higher mortgage rates, as you mentioned. Much higher auto loans, credit cards, et cetera.
I think the sort of takeaway from that is it's a two-sided story. On one hand borrowing is going to be a lot more expensive for you. On the other hand if you're a retiree, you're somebody looking for safe investments, you might finally get to yield on the bonds you're trying to investment in. You know, some of those longer-term investments might finally begin to offer a payback and so there is a silver lining here.
SCIUTTO: For sure. I mean, and that's good to have in your portfolio, right, a bond that's actually paying more than like .00 percent.
Christine Romans, Jeanna Smialek, thanks so much to both of you.
ROMANS: Thanks, Jim.
SCIUTTO: Still ahead we are learning new details about what happened the moment an armed gunman stormed a Buffalo supermarket.
(BEGIN VIDEO CLIP)
JEROME BRIDGES, TOPS MARKET EMPLOYEE: People were scattering around the place. There was screaming, crying, yelling, talking about there is a shooter in the store, there is a shooter in the store.
(END VIDEO CLIP)
SCIUTTO: Yes. One can only imagine. The gunman is in court right now as security is stepped up around that courthouse. We're going to take you there live next.
SCIUTTO: The accused Buffalo shooter is back in court right now, and more evidence against him could be presented this morning as a judge determines whether the case should go to the next step, the grand jury. We're also hearing more stories from survivors including one man who risked his life to save co-workers and customers inside the store that day. Average people being asked to show great courage and bravery.
Joining us for more on this, CNN crime and justice correspondent Shimon Prokupecz live in Buffalo.
What are you hearing?
SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes, so, Jim, the alleged shooter just walked into the courtroom, the judge is going to be allowing cameras in court, so we should get a look here later today. We are waiting for word on what exactly this hearing is going to entail. We're told that there could be new evidence, new information that prosecutors present. And as you said, the next step would be the grand jury proceeding.
Of course, all this as we're starting to hear from survivors, people who were inside the Tops supermarket as the gunman came in and started firing. Jerome Bridges, the man I spoke to yesterday, said that as soon as he heard the gunshots, all he kept thinking about was the employees and the store shoppers, and how he could get them into a room to get them away from the gunfire.
BRIDGES: And then that's all you heard was fire, constant firing and firing and firing. So I ran to the back part of the store where the conference room was at, down the long hallway, and I grabbed my produce manager and my night ops manager, a cashier and about five to six customers, told them to get in there and dug down, and then that's when I thought to myself, he might come busting through the door, so there is an old oak table back there that I put to the door, with one arm, and barricaded the door.
(END VIDEO CLIP)
PROKUPECZ: Jerome Bridges also says that he's so thankful for the support that this community has been receiving from people all across the country, from the food and the clothing, and most importantly the counseling. The counseling that he and his fellow employees have been receiving.
The court proceeding is still ongoing here. Security was certainly stepped up here, Jim, in anticipation of this court hearing. We saw a SWAT team here, we've seen dogs, canine dogs that the sheriff's office was using to patrol the area. Obviously there's a lot of concern for safety here -- Jim.
SCIUTTO: Shimon Prokupecz, thanks so much.
On its way to the Senate now, a bill passed by the House aimed at stopping domestic terrorism and violent extremism by white supremacists. It's not clear yet whether it has support in the Senate, though, even after the racist attack in Buffalo that killed 10 people.
This comes as the New York Attorney General Letitia James is launching an investigation into the social media companies the suspect allegedly used and broadcast from.
Joining us for more on this is CNN tech reporter Brian Fung.
We've seen this before, you know, in other shootings, you know, posting kind of the manifestos if you want to call them that, in advance or live streaming. There's always talk about what changes that could be made technologically or legally. They don't happen, and then another one happens. So where does this all stand?
BRIAN FUNG, CNN TECH CORRESPONDENT: Well, Jim, you know, this big question right now about how to hold tech platforms accountable for the content that's on their platforms is a big one. And New York's Attorney General Letitia James is launching an investigation into some of the main platforms the suspect allegedly used to live stream his attack and to post his racist screeds.
Those companies include Discord, the audio chat messaging platform, Amazon-owned Twitch, which is the live streaming platform that the shooter allegedly used to broadcast his attack, as well as a number of Web sites including 4Chan. You know, Discord has said that they're planning to cooperate. We haven't heard from the other companies yet.
You can imagine the sorts of questions that might be being asked here. You know, what are the platforms' policies, were they violated, did the platforms take any action ahead of, you know, this event, was this guy on their radar, so to speak, beforehand? But, you know, the government, New York state government's probe is going to focus on whether these platforms may have criminal liability here, civil or criminal liability in terms of hosting this content.
And that's worth pointing out here that, you know, First Amendment experts and legal experts that we've spoken to have said it was -- would not have been illegal for the shooter to post his video on to these platforms and, you know, it's perfectly within the First Amendment rights of the platforms to allow this content. It's not illegal speech. And in addition there are other laws on the books that allow these platforms to evade liability for having hosted this content, Section 230 of the Communications --
SCIUTTO: Wait, the screed is not illegal speech or the live broadcasting of murder is not illegal speech?
FUNG: So I think the live broadcasting of the murder, people -- you know, experts have said would not have been illegal. I think it depends on the context and what specifically is in the screed and the specifics around that could be -- could raise some additional questions as to whether or not there may have been illegal content in there.
SCIUTTO: Goodness. Remarkable. Brian Fung, thanks so much.
Well, health officials are investigating the first case of monkeypox, you heard that right, in the U.S. this year, that in the state of Massachusetts. How concerned should Americans be? Still a small number of cases, but where does this go from here?
SCIUTTO: The CDC is now investigating a confirmed case of monkeypox in Massachusetts. It's the first case in the U.S. this year. The agency also tracking multiple clusters of the rare illness in Europe. This morning, CNN spoke with Surgeon General Vivek Murthy about the potential risk.
(BEGIN VIDEO CLIP)
DR. VIVEK MURTHY, U.S. SURGEON GENERAL: This is a virus that is rare in humans but when it does come up it's a serious one we should investigate and we've got to make sure that we understand if and how it is spreading. At this time we don't want people to worry, at this point again these numbers are still small. We want them to be aware of these symptoms and if they have any concerns to reach out to their doctor.
(END VIDEO CLIP)
SCIUTTO: CNN senior medical correspondent Elizabeth Cohen joins me now.
So, Elizabeth, what's the level of risk here? Because folks are going to read monkeypox and say, oh, my gosh, what do I have to deal with now? I mean, does it spread quickly? It's not deadly or is it? What should we know?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: So, Jim, you and I have been talking about COVID for more than two years so I'm just going to start out by saying this is not COVID.
SCIUTTO: Thank you.
COHEN: This does not spread as easily as COVID. It is much -- you're welcome. It is much easier to contain.
Let's talk a little bit about this Massachusetts case and then sort of look at the bigger picture. So we have this one person who was admitted to Mass General on May 12th into the Special Pathogens Unit with all of the very careful control measures that that involves. This person, we don't know if it's a man or a woman, is in stable condition. Their close contacts have been told to monitor for fever, swollen lymph nodes, because that's what happens before you get the rash, so they want to keep on that. And there have also been cases of monkeypox recently in Portugal, Spain and the U.K.
So now let's look bigger picture at what monkeypox is and where it's been seen. So since 1970, there have been various countries that have spotted cases of monkeypox, including in the U.S. In 2003, there were 47 cases. That's part of how we know this doesn't always spread so quickly, right.
It was contained at 47 cases. And also, it is transmitted by prolonged, not quick, prolonged face-to-face contact and direct and indirect contact with bodily fluids or with those lesions that form on the skin.
Now this is the scary part. It's got a pretty high mortality rate. Up to 10 percent of people die, especially younger people, seem to be most vulnerable. And there's no special treatment for it. So this is a do not freak out situation. If you know -- if you are listening and you know this person in Massachusetts who has monkeypox, then you need to be closely monitoring yourselves, but this is not as difficult to contain as COVID -- Jim.
SCIUTTO: Elizabeth Cohen, thanks for making it all clear for us. Appreciate it.
Right now President Biden is meeting with the leaders of Sweden and Finland at the White House. There they are. One day after they formally applied for membership in the NATO alliance. All three of them are expected to speak next hour. We're going to bring you those important comments live.