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Stocks Plummet as Investors Fret Over Fed Forecast; 211,000 Americans Filed for Unemployment Last Week; Moderates Weigh Tactics Amid Opposition to McCarthy's Speaker Bid. Aired 2:30-3p ET

Aired December 15, 2022 - 14:30   ET

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

(COMMERCIAL BREAK)

[14:31:03]

VICTOR BLACKWELL, CNN HOST: New economic data is sending stocks off a cliff today. Right now, the Dow is down more than 800 points here. At 870 right now.

BIANNA GOLODRYGA, CNN HOST: Continuing yesterday's sell-off.

CNN's Matt Egan is here with more on this.

So we expected that rate cut, but was it what the Fed chairman said that's causing the sell-off?

MATT EGAN, CNN REPORTER: I think today's a bad day for the soft- landing camp. Maybe a bad 24 hours.

The market is basically giving a big thumbs down to the idea that the Fed is going to be able to tame inflation without causing a recession.

And today's retail sales report really is what kicked off this sell- off in a big way. Retail sales were up, year over year, but that's not adjusted for inflation.

And if you adjust for inflation, it implies retail sales were actually down. Month over month, they were down by .6 percent. That was a much bigger decline than was expected.

Actually, there was supposed to be a slight increase. So there was no decline expected. This was the worst retail sales report since the end of last year, as you can see on that chart.

That is raising concerns that the consumer might be tapped out here because of high inflation. They're dipping into savings, turning to credit cards.

And this would be of concern because consumer spending is the engine that drives this economy. And these numbers suggest that that engine is not firing on all cylinders right now.

BLACKWELL: So 90 minutes more of trading today.

How about the jobs numbers? We got some of those today.

EGAN: There were some good numbers there. New jobless claims, initial jobless claims, they fell to the lowest level in three months. That is a proxy for firing. And it suggests a lot of employers are reluctant to let go of employees because there's a worker shortage right now.

Continuing claims, though, they stayed at the highest level in about 10 months. That's a sign that people are staying unemployed for longer because hiring has slowed down.

And the Fed thinks that is a trend that will continue because the Fed, yesterday, they went out and projected the unemployment rate will go from this historically low level today, of 3.7 percent, to 4.6 percent next year.

That's not high overall, but it does suggest significant job loss. That would mean that roughly 1.6 million more people would be unemployed than there are right now.

GOLODRYGA: So as we're going and dissecting once again what we heard from Jay Powell yesterday, what's the likelihood in his view right now that we can actually have a soft landing or softish?

EGAN: Well, I don't think Powell is willing to say that specifically. He's saying there can be a soft landing. He hasn't exactly said what probability --

GOLODRYGA: So at one point, he said that Americans are going to feel pain. And that was pretty ominous.

EGAN: It was ominous. And that did raise concerns.

Listen, Powell he spoke -- he really did talk tough yesterday. He's signaling they're not willing to give up this fight against inflation. That means higher rates to come. And that means more pressure on the economy.

I think when you combine that tough talk from the Fed with today's numbers, that is raising concerns about a recession.

But I think, at the end of the day, it's not a foregone conclusion that there's going to be a recession. There's a soft landing could still happen.

I just think the concerns about a recession have gone up significantly in the last day or so.

BLACKWELL: All right. Matt Egan. Thank you, Matt.

EGAN: Thanks, guys.

[14:34:16]

GOLODRYGA: Allies of Kevin McCarthy are trying to win over Republicans who vow to never back him. Our exclusive CNN reporting about the hardball tactics they're now considering. (COMMERCIAL BREAK)

BLACKWELL: In fewer than three weeks now, House Republicans will decide if Leader Kevin McCarthy gets to take over the speaker's gavel.

GOLODRYGA: But the razor-thin majority, moderates in the party are now considering special tactics to counter those who are unwilling to support him.

CNN's Melanie Zanona wrote this story for us.

Melanie, among the tactics they're considering, kicking those members off their committees. Do they think that's going to work?

MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Yes, essentially, it would be a form of retribution for McCarthy's critics if they don't fall in line.

Sources tell me and my colleague, Annie Greer, that a group of Republicans had a heated discussion about whether to offer a resolution that would kick these members from their committee's assignments if the speaker's race goes to multiple ballots.

They ultimately decided to hold off on the idea for now, worried it could backfire. But they are discussing a number of other hardball tactics that includes voting against a rules package if it includes some of the most hardline demands from McCarthy's critics.

And they've also publicly threatened to work with Democrats to try to elect a speaker if they can't agree as a GOP party on who their next leader should be. So it's really shaping up to be a showdown here.

[14:40:05]

And Congressman Don Bacon, a moderate, told us, "Teams win, fractured teams lose. We can't let a handful hold the conference hostage."

Really what you're seeing here is moderates feel like they have some leverage in this debate. They want to flex their muscles. They don't want to be pushed around.

And they're very concerned about the types of deals McCarthy might have to cut in order to become speaker. In fact, yesterday, they huddled with McCarthy to try to get a sense of where his head is at.

But they also reassured him they have his back, they're willing to vote for him, they're out there fighting for him.

They even passed around buttons with the word "OK" on it, which stands for "Only Kevin," which is a joking nod to the "Never Kevin" movement, which is the opposition.

But clearly, tensions are running high right now inside the House GOP -- Victor, Bianna?

BLACKWELL: All right, we'll see if floating these threats will be enough. They may have to implement and execute one of them. We'll see.

Melanie Zanona, thank you.

GOLODRYGA: The parents of a UVA football player, who was murdered last month, along with two other teammates, are speaking out for the very first time.

BLACKWELL: D'Sean Perry was killed on a bus by a fellow UVA student while returning from a field trip.

CNN's Leyla Santiago spoke with his family.

Leyla, her mother says that she had spoken her son just before that shooting. What else did you here?

LEYLA SANTIAGO, CNN CORRESPONDENT: As you might imagine, Victor and Bianna, they are just heartbroken.

In fact, when I asked them where they found themselves in the grieving process, in the healing process, the mom was quick to say, I am still in disbelief.

And the father said that he was all over the place. Sometimes he's trying to seek understanding and at times he's sad. All of what you might expect from a family who lost their son about a month ago to gun violence.

They said this is a group of parents they never wanted to join, parents losing their kids to gun violence.

So they have a call to action they're putting out there. They want stricter gun laws. They want stricter policies on college campuses as they try to make sense of what happened that night.

Here's how mom describes that night.

(BEGIN VIDEO CLIP)

HAPPY PERRY, MOTHER OF D'SEAN PERRY: That Sunday night I called him and he was telling me that they were on their way back from the Emmett Till play and they had a wonderful time and it was pretty cool.

And they had gone to dinner and they were on the bus, they were singing gospel songs. But he told me his phone, it was going dead.

But I did get a chance to pray with him. And he said, "Mom, I love you."

SEAN PERRY, FATHER OF D'SEAN PERRY: He was getting ready to graduate. Then, all of a sudden, you're there viewing his body. And then, the next day, you're packing up his apartment. And that Saturday, you're flying him back home. And then after Thanksgiving, you're having the funeral for him.

It's like a movie that's written. That's what it feel like. It was already written. It just happened so fast. Everything moves fast. (END VIDEO CLIP)

SANTIAGO: You know, they talked about how D'Sean was the tall one in the family. So at this time during the holidays, he's the one who would put the star over the Christmas tree. And that is going to be a tough moment for them.

Also, you know, when she talked about that prayer, she said part of that prayer she had with him was for kindness, understanding and safety.

And so that "understanding part," they want to have more answers as to the why, why this happened.

At this point in the investigation, a motive has not been released. Virginia State police investigating what happened, as well as the state's attorney general, assigning a special counsel for independent review as to what led up to this and how the university handled it.

In the meantime, the parents hoping that the power of college football, the power of the community here can come together to end gun violence -- Victor, Bianna?

GOLODRYGA: Just unimaginable what these parents had to go through. His father describing it like a movie. I mean, a horror movie.

Such a beautiful smile, too, in that photo.

Leyla Santiago, thank you.

[14:44:19]

BLACKWELL: Interpol is now involved in the case of a missing American college student studying abroad. CNN speaks with the woman who hosted him in France. Hear what she thinks happened, ahead.

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GOLODRYGA: TikTok may be loved by a billion users worldwide, but the U.S. Senate gave it a rare bipartisan review. Senators voted to ban the social media video app from federal government devices.

BLACKWELL: TikTok is already blocked from devices inside the Pentagon, the State Department, Homeland Security.

And a number of red states here enacting a similar ban on the state devices has grown to 10. Georgia and New Hampshire made the move today.

The concern is that China's government can access TikTok user data since its parent company is based there.

CNN's senior media reporter, Oliver Darcy, has more on the story.

Clearly, a growing movement here. What's next? OLIVER DARCY, CNN SENIOR MEDICA REPORTER: Well, House Speaker Nancy

Pelosi obviously controls the House for now, and she has not indicated whether this is going to get a vote before the end of the year. So it's really unclear when this legislation could eventually become law.

But I think the big picture is that TikTok is under growing pressure, political pressure in the United States as it's trying to hammer out a deal with the U.S. government to continue operating in this country.

And so these measures that are being taken in Congress and by state governors, they're really only limiting the use of TikTok on government phones.

I'm not really sure that's a huge user base to begin with.

BLACKWELL: Right.

[14:49:59]

DARCY: Even if you cut that out, it's not going to affect the billion- plus people using TikTok across the world and inside this country.

And so the real threat to TikTok is whether they can't hammer out this deal with the U.S. government. And I think this political pressure from things like this is really making that environment much more difficult.

GOLODRYGA: Bipartisan political pressure, we should note. And this has really picked up steam over the past few days. How is the company responding?

DARCY: They're upset these, primarily Republican governors and others, are enacting these measures. Because they would like the U.S. government, which they are negotiating with -- that's the big issue here.

They would like them to complete their review of TikTok and so they will figure out whether they will be able to operate in this country or not.

But you are seeing a lot of concern from lawmakers. And they're, you know, passing these sorts of things.

But again, this is only limiting use on --

GOLODRYGA: Devices, government devices.

DARCY: -- on government devices. And that's really not the big issue here.

And I think a lot of these measures that governors are passing, these Republican governors, again, just very limited scope.

BLACKWELL: Yes, yes.

All right. So we got 10 states thus far and this legislation moving through Congress, so we'll see how far it goes.

Oliver Darcy, thank you.

DARCY: Thank you.

GOLODRYGA: First, it was dozens of tornadoes. And now a severe weather system is set to bring ice and snow up and down the east coast. We'll tell you who's at risk straight ahead.

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[14:56:16]

BLACKWELL: Interpol, the international police organization, has issued a yellow notice for missing U.S. college student, Kenny DeLand Jr. He's 21 years old. He was studying abroad. And he was reported missing from Grenobles, France, on November 29th.

One French official from the prosecutor's office says, "The young man reportedly told several people that he arrived in France underprepared and was having difficulty making friends. And seems to have left Grenobles voluntarily."

GOLODRYGA: DeLand's parents dispute that assessment.

CNN's Melissa Bell brings us the latest.

(BEGIN VIDEOTAPE)

MELISSA BELL, CNN PARIS CORRESPONDENT (voice-over): Social media posts give little away. Just images of a young American enjoying his exchange program in France.

But Kenny DeLand Jr vanished 15 days ago without a trace after leaving the home of the host mother he was staying with.

UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)

BELL: She explains she's only spoken once to Kenny's mother, never to his father, but agrees to speak exclusively to CNN without the camera.

(on camera): What the host mother told us was that, of all the exchange students she'd had at her home, Kenny DeLand was the one that seemed to be having the most trouble fitting in and settling down to life here in Grenobles.

She also said, since he disappeared, she was inundating him with messages to which he hadn't responded.

And she added that she had been reassured by that sighting of him about an hour south of here in that sports shop.

Because she said it confirmed the possibility and her hope that, in fact, he had gone and cut off communications voluntarily.

(voice-over): It was taken on December 3rd. Kenny DeLand spent just over $8 before vanishing altogether, according to his family. Leaving behind only Facebook pictures of his life in France from Paris to the University of Grenobles, Alps.

(on camera): The last time Kenny DeLand turned up for lessons here at the university he was studying at was November 28th. By the 29th, when he failed to turn up, a missing-persons report was filed.

And it emerged that he left his host family that morning, taking a packed lunch, a change of clothes, his wallet and his phone. Kenny DeLand hasn't been heard from since.

(voice-over): We showed Kenny's picture around the campus in the hopes that someone may recognize him. When we find Kenny's friends, they prefer not to speak on camera.

But tell us that Kenny had friends that were exchange students and some that were local.

"We care about him and we want him to come back safely."

Statements that contradict what French authorities have said, that Kenny struggled to make friends.

KEN DELAND, FATHER OF MISSING STUDENT: What I'm telling you is he makes friends and he's easy to talk to, like me. If you don't know my son, then it's tough for you to make some statement, some bold statement.

BELL (on camera): One of the things Kenny's friends told us is he may have been stressed about the upcoming exams.

Is that something that you recognize?

DELAND: He's in a foreign country. He's a pretty upbeat kid. You know what I mean? So it's possible, sure.

He was anxious. He wanted to do good. He wanted to prove he could get good grades even on the trip of a lifetime.

BELL (voice-over): Kenny DeLand Jr chronicled his journey to France in August. His father still hopes he'll be able to pick him up as planned on Saturday.

Melissa Bell, CNN, Grenobles.

(END VIDEOTAPE)

BLACKWELL: Top of a new hour here on CNN NEWSROOM. Good to have you along. I'm Victor Blackwell.

GOLODRYGA: And I'm Bianna Golodryga.

The massive storm system that spawned dozens of deadly tornadoes across the south and blinding blizzards out west, well, it's not done wreaking havoc quite yet.

[14:59:55]

It's now heading for New England and the mid-Atlantic in the form of nor'easter, threatening to dump heavy snow and ice across the region.

And further south, the tornado threat persists. Parts of central Florida right now remain under a tornado watch.