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CNN International: U.S. Stocks Sink At Open After Global Sell- Off; U.S. Stocks Sink In Early Trading After Global Sell-Off; Florida Hit By Rain, Wind, Flooding After Debby Makes Landfall; Florida, Georgia And South Carolina Feeling Effects Of Debby; Israel, Hezbollah Escalate Cross-Border Attacks; White House: U.S. Preparing For "Every Possibility"; Soon: Harris To Reveal Her VP Pick; Bangladesh PM Resigns Amid Deadly Anti-Govt. Rallies; Far-Fight Rioters Set Fire To Hotels Housing Asylum Seekers; Trump & Vance Say They Don't Care About Harris' VP Pick. Aired 11a-12p ET
Aired August 05, 2024 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:00]
ANNOUNCER: This is CNN Breaking News.
RAHEL SOLOMON, ANCHOR, "CNN NEWSROOM": Hello and welcome to our viewers from around the world. I'm Rahel Solomon live in New York. We're going to get straight to our breaking news this hour. All eyes on Wall Street this morning, the Dow opening more than 1,000 points lower, and the NASDAQ Composite, plunging by more than 6 percent.
But U.S. stocks not the only ones that did a nosedive. We can pull this up for you. Japanese stocks suffering their biggest daily point loss. Nikkei Index closing more than 12 percent lower, the tumbling coming as global markets fear, the U.S. could enter an economic slowdown i.e., a recession.
And our team is tracking the global markets from all angles. We have Clare Duffy standing by for us. But first let's go to Julia Chatterley who's also live in New York. Julia, Monday morning, news session, same old concerns, talk to us about what seems to be spooking Investors.
JULIA CHATTERLEY, CNN CORRESPONDENT: This is an ugly trading day, wherever you look. And it's not just about the United States. As you pointed out, this is a global story. And there's a number of things going on. And it's not just as it appears to be about the U.S. economy. We've already seen a number of days of a shakedown in some of the biggest supports to financial markets, which is the tech stocks.
That's playing into sentiment here. Then, as you mentioned, we had that monster sell-off in the Japanese stock markets overnight, you don't see a sell-off like that, without seeing some carryover into U.S. markets as well. It's summertime, there's a lot of people that simply aren't trading. So, that makes things choppy.
And then, of course, come Friday, and we got that weaker jobs or payrolls number, and that really then did raise all those questions about a stronger slowdown in the U.S. economy than people feared. So, this is not just one story. This is a whole load of them all combining. And that's what I think is fueling the fear that we're seeing across all assets in the financial markets today. So now we take a step back. The big question is, where do we go from here? Some part of that on the economics front, as you well know, will depend on more data that we get.
And, of course, that then will determine what the Federal Reserve do. The silver lining is, the conversation is gone from the Federal Reserve, whether or not they'll cut interest rates in September to simply how much. Now, if these were just about the data point that we got on Friday? Well, I'd say this was an overreaction in financial markets.
The problem that we're facing here is that there's a whole load of other things going on at the same time. But what we did here is, from Austan Goolsbee speaking this morning, and he said, look, if we see problem further, problem in inflation, if we see further deterioration in the economy, if we see financial market instability, and by the way, this isn't that at this stage, then, the Fed will step in to fix it.
We can finger point over whether they should have cut rates by a quarter of a percentage point last week, that wouldn't have prevented this. And that's an important point as well. But, we'll certainly be watching to see what they say. And we'll also be watching the data and just continuing to see how the markets move. It's not a pretty day. That's clear.
SOLOMON: It's not a pretty day. And then, the question, as you point out is, will this be an ugly setup days? Will this be an ugly week? What happens from now? Julia, let me ask, I watched that interview as well on CNBC this morning.
And as you pointed out, the question is not, will the Fed raised rates at their next meeting, but by how much? But I also -- I'm curious what you think about the conversation now about whether they step in even before the September meeting, perhaps with an emergency rate cut?
CHATTERLEY: And just to be clear, we mean cut rates in September, just in case anyone's watching and go, oh, my goodness, we don't want rates to go higher. And I think it was a very important conversation. I think at this stage, remember, we're still up around 9 percent on the S&P 500 for all the pressure that we've seen in tech stocks, we're still up around 9 percent in the NASDAQ.
If the Federal Reserve came in, at this stage, given the data where it is, and I'm not just talking about that jobs number, I'm talking about the manufacturing sector, the services sector, the consumer that we know is spending less, they would create panic by cutting rates before that September meeting.
Now, if something changed in terms of financial market volatility, we saw a more significant drop in financial markets. Fine, but there's other things they can do to stabilize, they don't need to cut rates. So, certainly my advice would be, don't do that. I'm sure, we'll hear more from them in the coming days if we see more volatility, but that would create panic. We looked at that September meeting.
SOLOMON: It's a really interesting point, and the debate is reaching a sort of feverish pitch already. Julia, standby, if you might, I want to now bring in one of our business writers, Clare Duffy, to really hone in on what's happening with some of those tech stocks.
Clare, as you just heard Julia mention there, this is a -- this is a range of things that are taking place right now. But, talk to us a little bit about the sell-off we're seeing, especially, among those NASDAQ names.
[11:05:00]
CLARE DUFFY, WRITER, CNN BUSINESS: Well, yeah, Rahel, what's been happening is that these tech giants have been promising that artificial intelligence is going to lead to the next industrial revolution. They've been using that to justify tens of billions of dollars of spending in AI investment over the past couple of months.
And so, heading into tech earnings season, which happened over the past two weeks, Investors had really high expectations. They were hoping to see some revenue returns from those big AI investments. But that's not what happened. Instead, what we saw was pretty mixed results across the board, in some cases, lower margins, because of those AI investments, in some cases, weak guidance for the current quarter.
And it was kind of a record scratch moment for Investors where they went, wait a minute, what are we doing here? When are we going to start making money from this technology? And the answer really is that it's going to take longer than many people thought.
Microsoft CFO, for example, saying that they're expecting to see monetization of their AI technology over the next 15 years and beyond. We also saw Meta saying that they're expecting to monetize their AI investments over a longer period of time. And for Investors, that time horizon is uncomfortable.
One analyst, Gil Lauria told me last week that a 10 to 15-year return on investment is more like a venture investment than a public company investment. So, I won't be surprised if we start to see these big tech names pull back a bit on that AI spending as they try to reassure investors, especially, amid this broader economic uncertainty, Rahel.
SOLOMON: What do you make -- one of the things that you're seeing being discussed at least in some of the research notes and among the investment community is, are we seeing this pullback in AI? Is this more reflective of the beginning of the internet? Or is this more reflective of the dotcom bust? I mean, what are your thoughts here?
DUFFY: Yeah, Rahel, I don't know that we're going to see a bust necessarily of this AI hype cycle. But, I think we're certainly on sort of the downhill slide of the hype that we've seen over the past couple of months. I think most of these big tech companies are still saying that AI is going to make them money at some point. I think it's just a longer time horizon than many people thought. And
it's going to take still more investments, still more tens of billions of dollars to get the data centers put in the ground, put in place, so that this technology can start to generate real returns, but it's going to take longer than people thought.
SOLOMON: And then, Clare without getting too technical, how much of sort of the market reaction that we're currently seeing in tech has to do with how overbought perhaps some of those tech names were.
I mean, you think about Nvidia, for example, I mean, we've talked a lot about Nvidia in the past, and just sort of how much we've seen how much money we've seen pour into that stock. So, how much of this is perhaps a correction or a selling sort of -- of some of that market reaction? What do you think?
DUFFY: Yeah, I mean, these big tech stocks make up a huge portion of the markets, and even beyond their specific share prices, this whole story, this narrative that we've heard about, artificial intelligence revolutionising nearly every industry, creating cost savings, and new revenue opportunities, I think, everybody is sort of coming back down to earth, and realizing that it's going to take longer than we thought for that to happen.
And so, I think that is certainly driving a big part of what we're seeing today. With Nvidia, specifically, as you start to hear these big tech companies, the Meta, the Google, the Microsoft, potentially saying that they're going to pull back on AI spending, about half of what they're spending right now is going largely to Nvidia.
It's for those chips that power this artificial intelligence technology. So, if we start to see these big names pull back on that AI spending, that is going to directly impact videos bottom line, Rahel. So, I think we are seeing a bit of the correction in the stock price as people realize that's what's happening.
SOLOMON: And what would you say looking forward, or sort of the next major catalyst for these tech names when it comes to, you know, the Dow 30, the broader economy names, we think about economic data, we think about consumer spending, but for the tech names, what are you watching in terms of future catalysts and where these stocks go?
DUFFY: Yeah, I think there's really two things. I think the first is whether we do start to hear them say they're going to pull back a bit on that AI spending, rain in their spending, while they focus on their core businesses, because when you think of these big tech names, often if we see economic uncertainty, that hurts their core business, the core cloud business, the core advertising businesses that really drive most of these companies' profits.
And so, if we start to see economic uncertainty, their customers pulling back on cloud spending, or advertising spending, those big tech names are then going to definitely have to pull back on the AI infrastructure spending while we wait for things to normalize a bit.
And so, I think that's the two things I'll be watching, how is -- you know, how is the core business performing? And then, do we start to hear them say they're going to pull back on spending, try to get their margins back in a better place before potentially beginning to spend on AI again, Rahel.
SOLOMON: OK. CNN Business writer, Clare Duffy, thanks for explaining all of that for us. Thank you. I'm sure we will be talking again very soon. For now, let me bring in Mark Zandi, who joins us from Philadelphia. He is the Chief Economist of Moody's Analytics. Mark, always good to have you.
[11:10:00]
Let me just start with how you think the Fed might be viewing this -- this market sell-off that we've now experienced for a few days now. How are they viewing this?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, I think they take this as a message, a clear message that they need to act, that they need to start cutting interest rates, and they need to start cutting rates aggressively. I mean, I don't think they're in any kind of panic mode here.
I mean, the stock market's down, say, 10 percent from the peak, the all-time high a few weeks ago, but it's still up 15 percent from a year ago, economy still creating a lot of jobs. So, the economy is fine. It's not anywhere close to recession. So, there's nothing to panic about here.
But, I do think the message we're taking from last Friday's job numbers and the market reaction to it that, you know, they got to get moving, and they got to get more aggressive in cutting rates. So, hopefully, Rahel, over the course of the next few days, few weeks when they're out there talking to the press in the media, and trying to get a message across, they're signaling to everyone that, yeah, they got the message, and they're going to move here and move aggressively.
SOLOMON: And Mark, how about how soon they move? I mean, as you pointed out, the next meeting isn't scheduled until September. But, as you know, there's a conversation happening right now about whether we should see an emergency rate cut before then, do you think what we've seen thus far warrants that?
ZANDI: No, I don't. I mean, there's still a lot of script to be written. And maybe things go more off the rails to a degree where they would have to do a cut, so called inner meeting cut. But they say those kinds of cuts when they cut -- when they don't cut at the meeting, that when things are really dysfunctional, the markets aren't operating well, liquidity is a real issue, you know, banks would stop lending, you can issue bonds in the bond market, the financial system is seizing up.
We're not even, yes, not what we're talking about here. So, I would be very surprised, you know, given what we know so far. I mean, obviously, things could go in an untoward direction here over the next few days, couple of weeks, they may have to changed course here, but I'd be very surprised if they cut rates before September. SOLOMON: Mark, you've told me once, you've told me twice, but markets go up, markets go down. So, how would you explain for people watching that the type of reaction we are seeing, would you call it an overreaction? I mean, how would you describe what we're witnessing? And why?
ZANDI: Well, Rahel, right now, you could characterize it as what I would call a garden variety stock market correction, right? I mean, that's down 10 percent from the peak. And I think, you know, what today's market action, we're not quite there yet. And then, you see lots of these corrections all the time, you know, it happens once every year, two, three.
So -- and particularly after a period of very rapid stock price growth, and when valuation, so called valuations, get very high when stocks look really expensive and pricey. And you certainly could make the case that stocks, before all this, looks kind of expensive and pricey, some froth was building in the market. So, you know, I don't know that I'd be at all surprised by this.
And for the typical American investor, you and I, as individuals, you know, we're in the market for a long time, five, 10, 15, 20 years. So, these kinds of up and downs and all arounds, as I've said in the past, you just don't pay attention, don't even look at it, they shouldn't even matter. It shouldn't even be on your radar screen.
SOLOMON: And Mark, what about those who have been waiting for mortgage rates to fall a bit more? And who are wondering, is there potentially a silver lining hear that perhaps we see a more aggressive Fed in terms of rate cuts, and perhaps that means an even steeper fall in mortgage rates in the months to come? What do you think?
ZANDI: Yeah, great point, Rahel. There -- the mortgage rates are falling. Last I looked, we were what 6.3 percent, it's still high. But that's down from, you know, well over 7 percent long ago. And all the trend lines here look pretty good.
Now, even if the Fed started cutting rates as aggressively I would expect mortgage rates to come in and kind of travel closer to 6 percent over the course of the next few weeks, couple of months. And 6 percent seems to be like a real threshold, and I think appropriately so in people's thinking about mortgage rates.
That's a -- that's a rate that's more consistent with some -- with how's it -- reasonably good housing affordability people can afford and start buying homes, and we start to see home sales start to pick up. And I would expect to see that, so you're right. If there is a silver lining in this -- this bit of stock market chaos, it's bringing interest rates down with regard to mortgage rates, in particular, and that's a very positive development.
SOLOMON: Yeah, certainly. Certainly some news that sum, including yours truly, who was in the market for home would like to see Mark Zandi, good to see you. Thank you.
ZANDI: Good luck. SOLOMON: Thank you.
ZANDI: Good luck with that.
SOLOMON: I need it. All right, turning into severe weather now. Tropical Storm Debby is slowing down after making landfall along Florida's Big Bend just hours ago as a Category One Hurricane. It is now dumping heavy rain across northern Florida as it moves inland, prompting tornado watches all the way to southeastern Georgia.
[11:15:00]
Now, Debby is the fourth named storm of the Atlantic hurricane season, and it could bring a month's worth of rain in just a single day when it moves into Georgia, when it moves into South Carolina. Officials are also preparing for a strong storm surge.
Schools and universities in the region had been canceled for today, those classes have been cancelled for today. We have team coverage on this as well as we watch the impact of the storm and its movement.
Joining us now first is CNN Meteorologist, Elisa Raffa on the ground. And we'll get to Meteorologist, Derek Van Dam who is in the CNN Weather Center. But, Elisa, let's start with you. Talk to us a little bit about and think, a picture tells a thousand words as we see here. What are you seeing there on the ground?
ELISA RAFFA, CNN METEOROLOGIST: Rahel, the winds have just been relentless here this morning. We got the eyewall this morning. The front end of Debby was brunt. We had the heavy rain and the gusty winds. We had a little bit of a calm period when that eye, the center of it, came over us. We had those winds relax a little bit until we came to the other side of the storm.
This backside of the storm has been non-stop. We have been in incredible gusts, as you can see, and the wind gusts are just pushing the water. This is the Steinhatchee river behind me and it is incredibly aggravated. It's been incredibly rough. Some of it in some parts of the river around here around this marina are coming in limb.
All of the docks are empty. They had to get these boats out yesterday before the storm came in. And some locals are telling us that the docks here are new, because they were destroyed last year in Idalia that made landfall just nine miles away from here.
So, they were really worried that the progress that they made since last year with Idalia would be ruined just with one storm here, Debby, because we've been watching that storm surge. Storm surge has peaked on the Big Bend around six feet in Cedar Key.
Again, with the tide coming up and down, we've been seeing the onslaught of the water here kind of rushing in linen really rocking around some of these docks. And the parts of the metal framing of the top of some of these sheds and stuff, they've been kind of peeling a little bit here, because the winds have been relentless. We've also seen some power lines that are kind of clipped in half.
And, you know, again, if you ever see that anywhere, don't touch them, because you don't know if there's liv electricity that's coming out of them. So, it has been intense here today. And we're not done. Debby will continue to move inland, and then, get to a slow crawl and just stop.
We're talking a forward speed of three to four miles per hour, you could walk faster than that. And we're looking at prolific historic amounts of rain that will cause catastrophic flooding for parts of the low country of South Georgia and South Carolina.
So, we're incredibly worried about that as we go through the week. Even going into the weekend, things might not wrap up until Saturday, maybe even Sunday. So, something to watch very closely. I also want to mention that just before landfall this morning, Debby was able to rapidly intensify again.
And that's because we had ocean temperatures here in the Gulf that are in the upper 80s and low 90s that we see this sign and symptom time and time again, the warm ocean is just fueling this intensification. And we're adding that heat to the oceans with climate change.
So, that's a trend that we just keep seeing with each of these storms. Beryl did it. And then, Debby was able to do it here this morning. But again, the water here is relentless, the winds are relentless, and people are just needing to hunker down.
SOLOMON: Yeah. You can even hear it just sort of the force of the winds on your mic there, Elisa Raffa, in Florida, be safe. Thank you for your reporting. Let's now go to Derek Van Dam with more on the path of Debby. Derek, what are you seeing? Where's the storm going?
DEREK VAN DAM, CNN METEOROLOGIST: Yeah, well, Elisa really touched on it there. But, this is going to be a slow mover. Anytime you combine those words, slow-moving and tropical system, you know that the outcome is not going to be good. This is going to be in the form of flash flooding.
And, the potential here exists using wording from the National Hurricane Center, catastrophic flooding potential right here, along the southeast coast of the U.S., particularly into the state of Georgia, and South Carolina. And here's why.
Basically the steering winds, the steering currents, the winds aloft and the upper levels of the atmosphere that are meant to guide these tropical systems along and push them away are going to collapse or they're going to become basically non-existent.
So, we're going to slow things down considerably over the coming days. So, we can track this out quite nicely. Pay attention to this. You can see Tuesday 08:00 a.m., and then, Wednesday 08:00 a.m. There's the 24- hour movement. But, I want to expand this even further and show you that 48 hours later, that's Friday at 08:00 a.m., this storm doesn't move a whole heck of a lot. So, that means it's going to take all of that moisture that picked up from both the Gulf of Mexico and the Atlantic Ocean, and produced that heavy rainfall right along the coastline here.
It's really a testament to just how uncertain this weather forecast is going to be, because none of our models exactly know, how this is going to move and operate as we head into day three, day four day five, because it's such a slow mover.
[11:20:00]
But one thing's for sure, we look at previous storms that are behaving in similar ways.
And we know that the rainfall can be extreme. So, these are the threats right now. This is more of an immediate threat. We have tornado spin-ups very possible today across that eastern quadrant of a landfalling tropical cyclone, that's very typical, they're usually quick, they're usually rather weak, but nonetheless, can cause some damage.
There's the heavy rainfall, though. This is going to be a tough day from Jacksonville northward into Savannah. And you can see the flash flood warnings across Florida. But that is going to shift to the low country of South Carolina and southeast portions of Georgia. And that's why we have this high risk of excessive rainfall that could lead to flash flooding.
These are very rare Level Four of Four from the Weather Prediction Center. They use them and reserve these days for only the most extreme days. So, the fact that we have our computer models spitting out over, 15 inches of rain in some locations, on top of a storm surge threat. If this system does eventually move off these coasts, this means the water only has one way to go. And that is up. Rahel?
SOLOMON: OK, Derek Van Dam live there. Derek, thank you. And so do come for us a new threat from Iran to punish Israel for a series of high profile assassinations. We'll see how the U.S. is helping Israel shore up its defenses straight ahead. Plus, the Prime Minister of Bangladesh resigns after protesters stormed her official residence. What the Army Chief is saying about what comes next. We're going to have live report.
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SOLOMON: Welcome back. Israel and the USA say that they are tightening defense cooperation plans against threats by Iran, and its proxies. President, Joe Biden, is trying to shore up regional support for Israel as it braces for potential attack. He's expected to speak with Jordan's king this hour, then convene his national security team later this afternoon.
Now, Iran's foreign ministry today said that it does not want regional war, but must take action to prevent further instability after a series of high profile assassinations blamed on Israel. Turkey has now joined countries urging its citizens to leave Lebanon amid fears of a wider war.
Hezbollah says that it hit a military target in a drone attack in northern Israel today. While Israel says that it struck multiple Hezbollah targets in Lebanon overnight. Prime Minister, Benjamin Netanyahu, was vowing to stand against Iran on every front.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, PRIME MINISTER, ISRAEL (Interpreted): The State of Israel is in a multi-arena war against Iran's axis of evil. We are striking hard at any of its arms. We're prepared for any scenario both on the defense and the offense. I tell our enemies again, we will react an exact a heavy price for any act of hostility towards us from any arena.
(END VIDEO CLIP)
SOLOMON: All right. Let's get more now from CNN's Jeremy Diamond. He is live in northern Israel for us.
[11:25:00]
Jeremy talk to us first about the attacks intercepted by the Iron Dome overnight and what are you hearing is an attack imminent?
JEREMY DIAMOND, WHITE HOUSE CORRESPONDENT, CNN: Well, there's no question that these really military is at a heightened state of alert right now it is very hard to tell exactly when that Iranian retaliation will come but Iran has telegraphed repeatedly that there will be retaliation for the apparent Israeli assassination of Ismail Haniyeh, Hamas' political leader, while he was in the Iranian capital.
We have seen a continuation of those cross-border attacks between Israel and Hezbollah over the course of the weekend, with some Iron Dome inner -- missile interceptions, as you mentioned, overnight. But that is not the retaliation that we are waiting for.
What we are waiting for is likely going to be something far more significant with a very likely a direct Iranian attack against Israel and the possibility of it also bringing its proxies in the region into that retaliatory action as well. And that obviously would include Hezbollah, which is just 30 kilometers north of where we are along the Israel-Lebanon border.
Now, as all of this is happening, there is certainly a lot of rhetoric coming from Israeli officials, including the Israeli Prime Minister, as you just heard, they're warning that Iran will pay a very heavy price for any action that it takes against Israel. And part of that, obviously, is also intended to try and get Iran to second guess itself to recalculate as it prepares to telegraph a response here and deter, as Iran looks to determine how heavily it will attack Israel, and what the potential consequences of that could be for the region.
There is certainly a flurry of diplomatic activity aimed at trying to prevent Iran from carrying out a large-scale attack on Israel to try and de-escalate those tensions. Amid that, the U.S.'s top Middle East General, General Kurilla is in the region, trying to also form up that international coalition that helped Israel carry out that very successful orchestrated air defense suffered back in April, when Iran attacked. And there's no question that there is an effort to put that coalition back together again.
Here is the National Security Council Spokesman, Admiral John Kirby, just recently.
(BEGIN VIDEO CLIP)
JOHN KIRBY, WHITE HOUSE NATIONAL SECURITY COMMUNICATIONS ADVISOR: Now, I don't know what they're going to do or when they're going to do it, but we got to make darn sure that we're ready, and that we have the capabilities in the region to be able to help Israel defend itself, and quite frankly, defend our own people, our own facilities, our own national security interests.
(END VIDEO CLIP)
DIAMOND: And now, as it relates to Israeli civilians, so far, the Israel's Home Front Command has yet to issue any new guidance to Israeli citizens in terms of their emergency alert preparedness levels. But several towns and cities in Israel like Haifa, where we are now, like Jerusalem, have already urged residents to begin taking precautions, to begin stocking up, and being prepared to rush to a bomb shelter very quickly, if needed. In Lebanon, we are seeing that civilians there -- foreign nationals are being urged to get out of the country immediately.
That includes U.S., U.K., and citizens from multiple other countries who are being told to rush to the airports and get out because of the possibility and the very real fear of a very significant escalation. Rahel?
SOLOMON: OK. Jeremy Diamond live there. Jeremy, thank you. Coming up, we'll look at the clashes between far-right rioters and Police in the U.K., as attempts are made to burn hotels, housing, asylum seekers, and other latest developments on that story straight ahead. Plus, we could get an announcement anytime now about Kamala Harris' running mate. We'll take a look at who she's likely to choose and why, when we come back.
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[11:30:00]
SOLOMON: Welcome back. You're watching CNN Newsroom. I'm Rahel Solomon in New York. The Prime Minister of Bangladesh has resigned. This is video of protesters storming Sheikh Hasina's official residence in the capital Dhaka earlier today. All of this follows deadly anti- government demonstrations that have gripped the South Asian nation for weeks, including clashes Sunday that it left at least 91 people dead.
The country's army chief announced that Sheikh Hasina's resignation in a news conference earlier today. The general there saying that the army will form an interim government. So, I'm bringing Sophia Saifi who joins me now with more on this developing story. Sophia talk to us about what's the very latest. SOPHIA SULTANA SAIFI, PRODUCER, CNN: Rahel, so we do know that, according to state media in Bangladesh, that Sheikh Hasina, who was the Prime Minister of Bangladesh from 2009, has not only resigned but has also left the country. And we don't really know -- we haven't gotten any confirmation as to where that -- where she's gone. Now, what's happening itself in Bangladesh right now is that there are scenes of jubilation, there's a lot of celebration, there were these protests that had been ongoing for almost a month now.
And even before that, before they became deadly that, over the past month -- for over the past weekend, there had been an Internet shutdown. They had been deadly clashes on Sunday. And we have seen a statement that's come out from the U.S. Embassy in Dhaka, calling for its staff to remain undercover, to stay -- to remain -- to get cover, to stay safe because this is still a volatile situation. Rahel?
SOLOMON: Yeah. And talk to us just a little bit more about what all triggered this unrest and what seems to be coming next now.
SAIFI: So, this started with a quota system, which the student movement in Bangladesh said was unfair and was leaning towards the party of Sheikh Hasina, was biased towards the party of Sheikh Hasina. It had to do with the quota system that allocated certain seats in the certain jobs in the bureaucracy to people who fought in the liberation movement in 1971. Now, there was -- there were accusations of bias that was then dismissed, that quota system was dismissed by the top court of Bangladesh.
However, that has -- that had then snowballed into something much larger. There have been accusations of human rights abuses against Sheikh Hasina. This was a student movement that had the lawyers of the country join them, it had -- it was across the various socioeconomic stratas of the country.
People came out in huge numbers, despite clashes, despite many people dying, many protesters dying, many Police being injured in these protests. Now, what we're going to have to wait and see is, the army chief has said that there will be an integrator -- interim government formed after meeting with the President, as well with -- as well as with all of the stakeholders.
However, the army itself has had a questionable past in Bangladesh. It has been in power over many years in Bangladesh's short history since 1971. It was actually in power even back in 2008, after which there were elections, which led to Sheikh Hasina becoming the Prime Minister of Pakistan -- sorry, of Bangladesh. This is a very young country. This has been a movement led by very young people, by young students, and it's going to -- we're going to have to wait and see how this unfolds in Bangladesh at the moment. Rahel?
SOLOMON: Yeah. Perhaps, not the end of the unrest. Sophia Saifi, thanks for the report. All right. Now to the U.K., where dozens of people have been arrested after a weekend of rioting and violence across much of the country. Far-right protesters vandalized hotels, reportedly housing asylum seekers, even setting them on fire. At least 147 people have been arrested since Saturday. The violence was sparked by the fatal stabbings of three girls in Southport last week. Far- right groups spread false claims and disinformation about the suspects background.
The UK Prime Minister Keir Starmer has condemned the riots. Earlier today, he chaired his first Cobra meeting. Let's bring in Elliott Gotkine, who joins me from London. Elliot, we heard the Prime Minister there condemned what he calls far-right thuggery, and said that he will use the full force of the law against rioters. But there are also concerns that some of the prisons in the UK are already at capacity.
[11:35:00]
ELLIOTT GOTKINE, CNN CORRESPONDENT: That is a concern, Rahel. And I don't think it's any secret that the prison system here in the U.K. is at breaking point. Indeed, when he was asked about it earlier today, Prime Minister Kier Starmer, blaming the previous government -- to be fair to him, he's only been in office for a month, but saying that the government would find ways to process all of those people that were involved in violent disorder.
And as part of that Cobra meeting, and he spoke about it afterwards, this is like an emergency meeting, a gathering of ministers and Police chiefs. In the wake of that meeting, Kier Starmer, saying that they discussed and they agreed among themselves, the ministers to create, in his words, a standing army of specialist officers to tackle violent protests. And at the same time, he outlined some of the other measures that the government would be taking.
(BEGIN VIDEO CLIP)
KEIR STARMER, PRIME MINISTER OF THE UNITED KINGDOM: We will ramp up criminal justice. There have already been hundreds of arrests. Some have appeared in court this morning. I've asked for early consideration of the earliest naming and identification of those involved in the process, who will feel the full force of the law. And thirdly, I'd been absolutely clear that the criminal law applies online as well as offline. And I'm assured that that's the approach that is being taken.
(END VIDEO CLIP)
GOTKINE: So, hundreds of arrests and the Prime Minister also saying that he's ordered courts to be open 24 hours a day, in order to process the large number of people that have been arrested and that are expected to be arrested. Indeed, the Home Secretary Yvette Cooper, who ultimately oversees the Police, she has warned that there will be a reckoning for those people that were involved in the violent disorder and some of the shocking images that we saw over the weekend, including hotels being set on fire and Police officers coming under attack.
We also heard from the Assistant Chief Constable of South Yorkshire Police. This includes the town of Rotherham, which was the scene of some of the most violent images that we saw. She said that if you were there, we will find you, and that is what the government intends to do. Rahel? SOLOMON: So, Elliot, I mean, as you lay out some of the measures that we may see from the government moving forward, is it safe to say that they are expecting more violence in the coming days or at the very least preparing for it?
GOTKINE: They're certainly preparing for it. And they're certainly concerned that there will be more violent disorder. I should say that, today, the first day of the week, has been relatively calm. I guess even rioters have day jobs. But at the same time, there is concern that certainly online, there are plans afoot for more violent protests.
And of course, as you noted, this all began with misinformation online in the wake of that horrible killing of those three small girls in Southport, a seaside town in northwest of England and Liverpool, taking part in a Taylor Swift themed dance class. They were killed, eight other children seriously injured, a couple of adults in hospital as well.
And there was misinformation surrounding that, particularly on X, formerly known as Twitter, suggesting that the suspect was a Muslim and a recent migrant as well. In fact, he's a second generation a Brit, who was born in Wales. Parents originally came to this country from Rwanda.
And indeed, it was quite unusual that they lifted the reporting restrictions on that suspect because he was under 18. He is actually due to turn 18 this week. So, there are concerns of further violence there, Rahel. And certainly, the government is saying that they are ready, and they hope that the arrest so far will dissuade people from taking part in more violence.
SOLOMON: OK. Well, we shall see. Elliot Gotkine, live for CNN in London. Elliot, thank you. All right. Just ahead for us, how the 2024 U.S. presidential race is shaping up? Our panel joins me for a look at all things election, including how the economy may pose a challenge for Kamala Harris. Plus, should Olympic competitors be swimming in the sand? Let's take a look at the athletes who have become sick from doing exactly that. We'll be right back.
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SOLOMON: Welcome back. And to the U.S. election now. And the biggest decision of Vice President Kamala Harris' two-week old presidential campaign, her running mate. That decision must come by Tuesday. But a source tells CNN that, as of this morning, she has not made a decision. When she does, her campaign says that she will make the announce -- the announcement to supporters via an online message.
The Vice President spent the weekend interviewing the finalists. And she's expected to choose one of these three men, either the Minnesota Governor Tim Walz; Pennsylvania Governor, Josh Shapiro; or Arizona Senator Mark Kelly. Let's bring in CNN's Edward-Isaac Dovere, who joins me from Washington. So, as we said, by Tuesday, but maybe before then, I mean, when can we get an announcement? And what's the thinking behind each of these candidates? Isaac?
EDWARD-ISAAC DOVERE, CNN SENIOR REPORTER: Well, look, we can say that as of right now -- and right now could be different from 10 minutes from now. But as of right now, we are told that Harris has still not made a decision about which candidate to go with. Those three appear to be the ones in most contention. But of course, there's always the possibility to beat somebody else.
Of those three, we've got Governor Josh Shapiro from Pennsylvania, who's got a lot of strengths, winning over both Republicans and Democrats in the state, very popular in his key battleground state. He has come under some fire from some people on the left for his criticism of campus protests around Israel, and those who tried to ascribe more responsibility to him than he actually has for the situation to the policy toward Israel.
Then there's Tim Walz, the Governor of Minnesota, who has one very popular in his swing state, done a lot of things that have been very popular with Democrats in the last two years. And then, there's Mark Kelly, Senator from Arizona, one, two tough races there, another state that Harris would like to win. He's obviously also an astronaut formerly, and married to Gabby Giffords, the Congresswoman who was shot in 2011.
SOLOMON: Yeah. Edward, talk to us a little bit about what we know about Republicans and who they want Harris to choose. Do we know? Do we have a good sense there?
DOVERE: That's also somewhat up in the air. Though we've seen some attention from Donald Trump and JD Vance, specifically, on Josh Shapiro. Sensed he seems to be at the front of the pack in a lot of people's minds. But on the other hand, they have sort of left it open about whether it matters, let's take a listen to what the two of them had to say.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), FORMER U.S. PRESIDENT, 2024 PRESIDENTIAL CANDIDATE: I don't care. Let them do whatever. They still want to have open borders. If she picks Shapiro, she's going to lose the Palestinian vote. And that's fine. Everybody has their liabilities.
SEN. J.D. VANCE (R-OH), 2024 VICE PRESIDENTIAL CANDIDATE: I don't really care who she chooses as a running mate. It's not going to be good for the country. And we're ready, meaning President Trump and I are ready to take the case to the American people.
(END VIDEO CLIP)
DOVERE: And so, look -- and what Trump was saying there, I don't think anybody quite can figure out what he means by the Palestinian vote. But he has also himself said that he doesn't think running mates matter. When speaking about his own running mate, JD Vance, he ducked last week a question of whether he thought Vance was ready on Day 1 to be president. So, that's the frame that the Republican campaign is going into this with. And then, we'll see what they do this week to respond to Harris' pick, notably, Vance himself will be in Philadelphia on Tuesday, where Harris is set to do her first event with the running mate, whoever it may be.
SOLOMON: Yeah. And certainly, I'm not speculating, but some are speculating about where that event is happening. And if that could mean anything about who she ultimately chooses. We shall see Edward- Isaac Dovere in Washington. Thank you so much. Good to see you.
DOVERE: Thank you.
[11:45:00]
SOLOMON: All right. Let's bring in our panel. Maura Gillespie is the Founder and Principal of Bluestack Strategies, and served as Press Advisor to former Speaker of the House, John Banner; and Mo Elleithee is the Executive Director of the Georgetown Institute of Politics and Public Service. He has also served as Communications Director for the DNC and Senior Spokesman for Hillary Clinton's 2008 campaign. Good to see you both. Mo, let me start with you. If you were a gambling man, if you were a betting man, who do you have your money on? In terms of VP, who Harris may choose for her VP?
MO ELLEITHEE, EXECUTIVE DIRECTOR OF GEORGETOWN INSTITUTE OF POLITICS AND PUBLIC SERVICE: I got out of the prediction game after the 2016 election. So, I don't know who she's going to pay. But for Democrats, the good news is she's not -- she can't go wrong with any of these choices. Look, there are a couple of reasons why you pick a running mate. One, someone who can maybe help you geographically win the election. That isn't typically play out --doesn't typically play out. But could Josh Shapiro get her a couple of points in Pennsylvania? Could Tim Walz get her a couple of points in Minnesota? And Kelly in Arizona? That's one thing. And all three of them could be helpful there.
The other is to double down on a message, right -- to double down that -- of sort of the overall theme of the campaign. And if she is leaning into a generational change argument, something fresh, something different argument, again, I think Shapiro, Kelly, Walz, all can help -- can help with that. So, I don't think Democrats are going to be disappointed with any of the choices.
SOLOMON: Yeah. And Maura, what do you think? I mean, we just heard that sort of mash up of clips from both JD Vance and the former President Donald Trump saying they really don't care. Do you buy that? And who don't Republicans want to see on the ticket? What do you think?
MAURA GILLESPIE, FOUNDER & PRINCIPAL, BLUESTACK STRATEGIES: They should care. And I think because the VP position and the selection hasn't been as heavily focused on in past elections as it is right now. And that's for a lot of reasons. And Moe just mentioned a few of them. Why -- you know, what benefits there are just picking a certain BB candidate versus another.
But I think, for Republicans, it would be hard, especially for the Trump world, for any of these choices that appear to be more moderate. I would say, Mark Kelly is going to be tough for them, because he would pull, I believe, a lot of moderate Republicans, potentially over to that ticket.
And I think that Trump has not thus far nor dance has really made much of an effort to reach those moderate voters, especially in the Republican Party. Most recently, posted on Truth Social to purge the party of those who don't support him. That's not the big-tent party that I was described to you. That's not a big-tent party that I belong to.
And that's not how you bring voters over. You know, if you're going to focus on policy issues, Republicans are far and away, you know, in a good position there. But again, if Kamala Harris picks somebody like a Mark Kelly, like a Josh Shapiro, it can prove to be a real problem for the Trump campaign, unless they change tactics between now and November.
SOLOMON: Well, what about the economy? Is that proving to be a continued problem for Harris? I mean, we obviously had the Jobs report on Friday, which was weaker than expected. I mean, I'm sure you've seen everything that's happening in the markets right now. It is a total meltdown. Trump wasting no time to jump on this to attack, the Biden-Harris administration on the economy.
How do they handle this? What's the message moving forward? Because as you know, the last few years with inflation being what it was, the one bright spot that you would often hear from Democrats is oh, wait, the labor market, but now you're seeing slowing and weakening in the labor market. So, what do they do about this?
ELLEITHEE: Yeah. Look, this is why it's really important. And the Vice President has started to do this in recent days, for them to be aggressive in drawing a contrast between what it is they want to do versus what it is Donald Trump wants to do. If you look at the Project 2025, that sort of is the blueprint of the Trump campaign, they're talking about tax cuts for the wealthy, and raising taxes on the middle class. They're talking about all sorts of economic policies that would hurt everyday Americans. Contrast that with a record that shows jobs up, wages up, inflation starting to drop.
And so, they've got to make that contrast, but the key is not to paint a rosy picture. To say, we have made progress, but not enough. And it's going to continue to be dicey. So, where we go next is important. Here's what we're going to do. And here's how Trump is going to get back to helping his cronies and the wealthy as opposed to everyday Americans.
SOLOMON: Maura, let me ask a CNN Poll of Polls shows that the race is basically a dead heat at this point. Any sense of who you think has the edge going into the last few months of the campaign? And depending on whether we see one debate, whether we see two more debates, I mean what seems to be the catalyst moving forward now?
GILLESPIE: I think this has been Trump's to lose. And part of me feels as though he has been really rattled by those polls that show that the race is so close, that it is neck and neck. [11:50:00]
And his ability to just kind of revert back to his 2016 self, unfortunately, it's coming to the forefront. We saw it over this -- over the weekend with his recent rally in Georgia. He just reverted back to, unfortunately, the 2016 version of Trump where he was very much speaking to only MAGA world, and not talking policy and not talking about ways that Republicans should be capitalizing.
I mean, across the board, we know that polls show that Republicans are viewed to be better and stronger on the economy and on safety and security when it comes to the border. Those are two issues that Republicans should be, especially down ballot races should be screaming from the rooftops about how important it is that they are back in positions to drive our economy in a better place than where the Harris-Biden Administration is put it. I think that those are issues where they really can focus on and they need to be. So, right now, it's there.
So, it is because of the person at the top of the ticket, unfortunately. I will say real quickly that the Project 25 did come through the Heritage Foundation. And there's lot of controversy about how much of the Trump World was part of that planning. And I don't disagree that they obviously will be pulling some things from there, but to like a state and make it seem as though it was a Trump blueprint. It's not.
But at the same time, his speech on -- in Georgia didn't really prove to give confidence to people and Republicans like myself, who are looking for the policy conversations, and not the juvenile comments that he tends to make, unfortunately.
SOLOMON: OK, well, we'll leave it here. Certainly. I'm sure I'll see you both in the months to come. Thank you, Maura Gillespie and Mo Elleithee. Thanks for your time today. All right. Still ahead, a new Miss USA has been crowned. And today is one more thing. We will explain why this new honor is so unusual. We'll be right back.
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SOLOMON: Welcome back. The Paris Olympics are now in the second week of competition. China leads the gold medal count with 21. The U.S. is close behind with 19. And the U.S. holds the overall medal count with 75. The triathlon mix relay in the Sand River took place earlier today with Germany winning gold. That's despite Belgium withdrawing after one of its athletes became sick.
A Swiss competitor also dropped out after becoming sick. French officials have been keeping track of the water quality. Olympic officials say it is safe enough to swim in. And a stumble on the balance beam knocked Simone Biles out of metal contention in that event. The American gymnast was able to capture silver in the floor exercise.
Her score was slightly deducted for stepping out of bounds. And Brazil's Rebeca Andrade won gold. OK. Before we go, one more thing. Miss USA has crowned a new title holder, making it the third person just this year.
[11:55:00]
The new winner is Michigan's Alma Cooper, a 22-year old U.S. Army officer. She bid 50 other contestants for the honor. Her win comes after a series of tumultuous events for the pageant, started in May when Utah's Noelia Voigt stepped down.
She cited mental health reasons on social media. OK. It's been a busy hour. And we know your time is money. So, thank you for spending some time with me today. I'm Rahel Solomon, live in New York. Stick with CNN, One World is coming up next.
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