Return to Transcripts main page

Early Start with John Berman and Zoraida Sambolin

Musk: SpaceX Will No Longer Pay For Portable Satellite Technology Used By Ukraine; European Markets Surge On Expected Reversal Of U.K. Tax Policies; Netflix Unveils Ad Subscription Plan That Will Cost $6.99. Aired 5:30-6a ET

Aired October 14, 2022 - 05:30   ET



CHRISTINE ROMANS, CNN ANCHOR: Elon Musk now says his company SpaceX will no longer pay for the portable satellite systems used by Ukraine on the battlefield. The company spent over $100 million for its Starlink systems. Musk wants the Pentagon to pay for them.


UNIDENTIFIED MALE: Why, at this moment, Starlink is raising this issue? It just -- it's really bad timing.

UNIDENTIFIED MALE: SpaceX is not a charity, of course, and they're losing a lot of money right now as a business, so I'm sure they're trying to recoup some of their costs.


ROMANS: A short time ago, Musk offered an explanation of sorts, saying he's following the advice of a Ukrainian diplomat who responded to Musk's Ukraine peace plan earlier this month. That peace plan where he said that Ukraine should cede the territory that Russia wants. The Ukrainian diplomat told him to f-off.

All right, Secretary of State Antony Blinken confirms the U.S. is reviewing possible consequences for Saudi Arabia's decision to slash OPEC's oil production. Blinken says the U.S. was clear in its public and private warnings to the Saudis that any cutback in production would only bolster Russian revenues while stifling the impact of U.S. sanctions.


ANTONY BLINKEN, SECRETARY OF STATE: We're in a global economic recovery. The recovery is fragile. We're dealing with headwinds from COVID. We're also dealing with headwinds from the Russian aggression itself. And so, now is not the time to take energy off the market.


ROMANS: The cutbacks have sparked outrage in Washington with calls from both sides of the aisle for a drastic shift in the U.S. relationship with Saudi Arabia.

Still ahead, new accusations against an NFL star accused of sexual misconduct. And mortgage rates going somewhere they haven't been since George W. Bush was in the White House.



ROMANS: Welcome back.

The two candidates in Wisconsin's Senate race pulling no punches in their second and final likely debate before the midterm election. Incumbent Republican Sen. Ron Johnson and Democratic challenger Lt. Gov. Mandela Barnes -- they've spent months attacking each other in campaign ads.

Last night, they sparred face-to-face on a number of issues, including crime.


SEN. RON JOHNSON (R-WI), WISCONSIN SENATE CANDIDATE: We need law enforcement. And the problem with the whole defund movement, which he has been a big supporter of -- it dispirits law enforcement. They're having a hard time recruiting members and we aren't going to have the law enforcement officers we're going to need to reduce crime.

LT. GOV. MANDELA BARNES, (D) WISCONSIN: No police officers in this country were more dispirited than the ones who were present at the United States Capitol on January 6. One hundred forty officers injured -- one crushed in a revolving door, another hit in the head with a fire extinguisher, another stabbed with a metal stake.

So this talk about support for law enforcement -- it's not real. It's not true.

JOHNSON: Falsehoods just seem to roll off his tongue. So I'd suggest anybody watching this debate or the campaign take anything Mr. Barnes says with a huge grain of salt.

BARNES: In Ron Johnson's America, women don't get to make the best choices for their health. Rape victims don't get to make the best health care -- or don't get to make the choices for themselves, and that's the unfortunate reality.


ROMANS: Johnson might be one of the more vulnerable Republican senators up for reelection in November. The latest poll shows him with a 6-point lead in this pivotal matchup.

In Michigan, Democrat Gretchen Whitmer sparred with her Republican challenger Tracy Dixon in their first gubernatorial debate. Whitmer attacked Dixon for her view on abortion rights and for refusing to accept the outcome of the 2020 presidential election. Both were asked about an upcoming referendum question guaranteeing

abortion rights in Michigan and whether they would respect the results.


TRACY DIXON, (R) MICHIGAN GUBERNATORIAL CANDIDATE: I will always respect the will of the voter. I don't believe that there are laws that I'm above. And unlike the governor here, who has said on multiple occasions that if there's a law out there that I don't agree with, I think I should be able to go around it, and Dana Nessel, who has also decided to go around laws, I don't believe in that. I believe in our Constitution and I believe in the people's right to decide.

GOV. GRETCHEN WHITMER (D), MICHIGAN: Well, I'll always accept the law of the people, but here is the fact of the matter. I still have a lawsuit that's pending in front of the Supreme Court. And so, ultimately, that, too, will have to be decided.

I think it's really ironic when Mrs. Dixon stands here and says that she will accept the vote -- the will of the people. This is a candidate who still denies the outcome of the 2020 election. This is a candidate who --


ROMANS: Dixon says Whitmer's COVID-19 policies went too far. Whitmer defended them but did concede she would have done some things differently in hindsight.

In Europe this morning, markets appear to be embracing the expected reversal of some controversial tax policies in the U.K., even though Prime Minister Liz Truss is keeping her cards close to her -- to the vest. The British pound is showing some signs of life and certainly, markets are there, too -- stock markets.

CNN's Bianca Nobilo joins me live from London.

So, the new government's tax cut plan spawned, Bianca, weeks of turmoil in the U.K. market. The Bank of England even had to come in and intervene to make sure you had safe and even trading markets there.

What is happening now, this morning?

BIANCA NOBILO, CNN CORRESPONDENT: That was an unprecedented intervention. And not only did it trigger this economic turmoil -- mortgage rates skyrocketing, the pound plummeting -- but also deep political crisis and turmoil.

This is a prime minister who has been in the job less than six weeks and already, today, splashed on the front covers of the newspapers. The titles of all the political podcasts and discussions in the country are can Liz Truss last, how long will she last, and who will replace her? And that's another type of instability that the markets simply don't need. [05:40:00]

But let me explain because she's in a very difficult position here. Because if the prime minister and her chancellor don't make more U- turns on this so-called mini-budget that sent the market spiraling, it's likely that the markets will continue to spiral and she might not even be able to get these measures through the British Parliament. And in this country, that's tantamount to precipitating a government collapse, so she'd be in a very difficult position.

But then if the prime minister does make more U-turns and concessions on her economic policy, then she's undermining all of her stated economic principles. She is a libertarian. She wants a small state. She wants low taxes. She wants less redistribution of wealth. And that's the only mandate on which she got elected more or less.

So, whichever way you look at it, the prime minister is not in a good position. And the political pressure is mounting from her own backbenchers who look at these polls in this country and think there's no way we can win another election under this prime minister.

So that's led to open discussion in Westminster about how to oust Liz Truss. It doesn't mean that it's going to happen or it's going to happen soon, but there's discussions about the mechanisms because technically, she's safe for a year as she's such a new prime minister. So there's been this chatter about whether or not perhaps former British prime ministers from the Conservative Party, party elders can get together and find a unity candidate that can just be ushered in to replace her.

The fact that these discussions are happening less than two months into the job just underscores the political and economic --


NOBILO: -- peril that the country finds itself in, Christine.

ROMANS: Yes, with an economy likely in a recession or soon to be if it isn't already, and markets -- so much turmoil there.

All right, Bianca. Nice to see you. Thank you.

NOBILO: You, too.

ROMANS: You'll soon be able to get Netflix for a cheaper price with a big catch. And a cause for concern. Cancer in people younger than 50 on the rise.




JOE BIDEN, PRESIDENT OF THE UNITED STATES: Americans are squeezed by the cost of living. It's been true for years and folks don't need a report to tell them they're being squeezed. And a lot of people hurting these days. Today's report shows, though, some progress.


ROMANS: That's President Biden trying to find the positive in what's a positively grim inflation report.

The Consumer Price Index rose 0.4 percent on a monthly basis, and 8.2 percent on an annual basis. That annual number is cooling slightly. But look inside these numbers and core CPI, excluding volatile food and energy -- that was the biggest 12-month gain since 1982.

On Wall Street, stock index futures right now leaning a little bit lower. They've been jumpy all morning after this dramatic turnaround for stocks on Wall Street.

The Wall Street Journal notes it was the first day in history the Dow plunged at least 500 points and rose at least 800 points in the same day. Stocks dove on that report showing core inflation accelerating but then shook it off for these huge rallies by the end of the day for the major averages.

Meantime, the Fed's crusade to crush that inflation has driven mortgage rates to the highest since George W. Bush was in office. The average 30-year fixed-rate mortgage now coming in at 6.92 percent.

Investors on pins and needles for corporate earnings season. Several big companies, including JPMorgan Chase and Delta, are set to release their quarterly earnings later today.

And gas prices, overnight, fell a penny, now at $3.90 a gallon.

Let's bring in Scott Brave, head of economic analytics for Morning Consult. And Scott, I mean, stock markets do not reflect, of course, what's happening in the economy. But what happened yesterday? What happened yesterday? That was the craziest day I remember seeing, really, maybe in my career.

SCOTT BRAVE, HEAD OF ECONOMIC ANALYTICS, MORNING CONSULT (via Webex by Cisco): Yes, I know, certainly, Christine. It was a wild ride and I would expect to see more of that, potentially, going forward here.

We're entering this point in the cycle where it's going to be very difficult to interpret the data. We see a negative number like the CPI, which suggests things maybe aren't as good as what we think. But then, there's also the expectation how will the Fed react to that. So the markets are really trying to digest all this information.

And we're kind of at a bit of a turning point at the moment where backward-looking indicators are going to see a little strength still in them. And forward-looking indicators -- they're starting to flash some red signals. Our high-frequency data at Morning Consult, in particular, right now, is starting to send some signals that consumers may be pulling back a little bit quicker than people were expecting.

So, buckle up. It's going to be a wild ride here for a while.

ROMANS: Yes, I think -- I think you're absolutely right.

So we're going to get some new data on retail sales today and consumer sentiment. We're going to see some earnings reports. I mean, it will be important to see how companies are fairing here. They've done pretty well through both COVID -- the pandemic -- and now higher interest rates.

But we've got six months now of higher interest rates. Should we start to expect to see that in these numbers a little more?

BRAVE: I think so. I think we're entering that stage. We've seen it already. You remarked about the housing market. It's been very clearly going through there. Interest rate-sensitive markets have been the first to react, as you would expect. We're going to start to see those broader effects on demand here over the next six months or so.

And so, I'm really focused in on this fourth quarter, like I said, but I think we're already seeing some of that maybe more broadly on the consumer side. We'll see how the firm side of things reacts to that. And generally, you would think that earnings are a bit of a lagging indicator here but we've got a ways to go.

ROMANS: Consumer sentiment, you point out, really closely tracks gas prices. Gas prices have come up a little bit but they're way off their highs from this summer.

How important are gas prices into how consumers are feeling about things and how consumers are spending their money?

BRAVE: Very important. I think it's a -- it's a very strong link there. That price of gas really gives the consumer a good sense of how to view the economy. We see that very strongly in our own sentiment data -- University of Michigan data that we'll get later today. It's very apparent there as well.

And this is a number today that I wouldn't overlook with everything else going on. I think the expectation is for sentiment to be up slightly from the prior month, but some of the higher frequency data that we look at suggests that it might actually be down a little bit.



BRAVE: That's consumers are reacting more quickly to these changes that we're seeing. So keep an eye on it.

ROMANS: All right, we'll have to wait and see. Retail sales at 8:30. There's just so much going on and you're right -- everyone should just buckle up.

All right, thanks, Scott Brave. Nice to see you. Thank you.

BRAVE: Thank you.

ROMANS: All right, next on NEW DAY, never-before-seen video of congressional leaders frantically pleading for help as the mob closed in on January 6. And Parkland parents outraged after a jury spared the life of a gunman who took the lives of their children.



ROMANS: The mighty Mississippi not so mighty these days. Water levels are lower than they've been in at least a decade -- so low it's becoming harder for the barges to float, threatening critical exports. The past few months have been among the driest on record in parts of the Heartland and long-term forecasts suggest the drought will continue in the future here.

There will soon be a way to get Netflix cheaper, with a catch.


Clip from Netflix "The Watcher."


ROMANS: That's a scene from "The Watcher," streaming now on Netflix.

The company unveiling a new subscription plan yesterday. The new tier, basic with ads, will cost $6.99 and will include 15- to 30-second commercials that play before and during the content. It will be available November 3.

All right, the Astros push the Mariners to the brink of elimination in the baseball playoffs with another clutch home run.

Andy Scholes has this morning's Bleacher Report. Hey, Andy.


So, the Astros' big slugger Yordan Alvarez becoming a postseason legend. On Tuesday, he had a 3-run walk-off home run, and yesterday he was at it again. The Astros were down 2-1 in the sixth. A runner on and Yordan connects -- a 2-run shot into the Crawfish Boxes. And with that, Yordan becoming the first player ever in the postseason to hit multiple go-ahead home runs in the sixth inning or later with their team trailing, and he did it in two straight games.

The Astros win 4-2 to take a 2-0 lead in that series.

The Yankees-Guardians were rained out last night so they're going to get the triple-header started today just after 1:00 eastern. You can catch that one on our sister channel TBS.

All right, week six of the NFL season kicking off last night with -- well, not the best matchup -- the Commanders taking on the Bears. This game was 3-0 at halftime.

But there was a great moment for Washington rookie Brian Robinson Jr. in the fourth quarter. Just six weeks after being shot twice in the leg during an attempted robbery, the rookie scoring his first touchdown to give the Commanders the lead.

The Bears had a chance at the end but Darnell Mooney gets shoved out just short of the goal line on fourth down.

The Commanders win 12-7 despite Carson Wentz throwing for less than 100 yards.

And after the game, Coach Ron Rivera said he's tired of all the talk surrounding his quarterback.


RON RIVERA, WASHINGTON COMMANDERS HEAD COACH: Everybody keeps wanting to say I didn't want anything to do with Carson. Well, (bleep). I'm the (bleep) guy that pulled out the sheets of paper, that look at the analytics, that watched the tape in the fricking -- when we were at Indianapolis, OK? And that's what pisses me off because the young man doesn't deserve to have that all the time.


SCHOLES: All right. Browns quarterback Deshaun Watson, meanwhile, faces yet another lawsuit accusing him of sexual misconduct during his time with the Texans. The woman claims that in late 2020, Watson pressured her into performing unwanted acts during a professional massage session at a hotel.

Now, this comes less than two months after Watson settled all but one of 24 civil lawsuits filed against him.

CNN has not heard back from Watson's attorney, the Browns, or the NFL regarding the new allegations.

Watson is in the middle of serving an 11-game suspension for violating the league's conduct policy. As of now, he would be eligible to play December 4 in Houston against the Texans.

All right, Tom Brady, meanwhile, speaking out about the controversial roughing the passer penalty that helped his Buccaneers beat the Falcons on Sunday. Yesterday, he told reporters that bad calls from referees -- it's just part of the game.


TOM BRADY, TAMPA BAY BUCCANEERS QUARTERBACK: It's just the way sports are. You just -- I miss throws, refs miss calls, but we try to do the best we can do. And when they don't go your way you just complain to the refs, like I do. So --


SCHOLES: All right. And finally, last night at the Islanders game, the brave soul took off his shirt and proposed to his girlfriend. He got the crowd to start chanting "Yes" as he was down on one knee. Christine, she, however, says something to him and pulling him close, and then runs off up the stairs. ROMANS: Oh.

SCHOLES: Now, was this fake? Was this real? We don't know. But if it was real, I guess the advice is there -- maybe don't go shirtless and propose at a hockey game to your girlfriend.

ROMANS: If you don't know the answer is yes, do not do it in front of a Jumbotron. That's all I'm going to say.

SCHOLES: You've got to be 1,000 percent sure, right?

ROMANS: All right, Andy. That was a great one. Thanks so much.


ROMANS: Have a great weekend, Andy.

SCHOLES: You, too.

ROMANS: Thanks for joining me. I'm Christine Romans. "NEW DAY" starts right now.


REP. BENNIE THOMPSON (D-MS): The clerk will report the vote.

UNIDENTIFIED MALE: Mr. Chairman, on this vote, there are nine ayes and zero nos.

THOMPSON: The resolution is agreed to.

UNIDENTIFIED FEMALE: He is not coming but that could --



REP. NANCY PELOSI (D-CA): I hope he comes. I want to punch him out.

UNIDENTIFIED FEMALE: I would pay to see that.

PELOSI: I've been waiting for this. For trespassing on the Capitol grounds. I want to punch him out, and I'm going to go to jail, and I'm going to be happy.


BRIANNA KEILAR, CNN ANCHOR: A subpoena against a former president and never-before-seen footage, including that, of lawmakers scrambling to save the Capitol.

I'm Brianna Keilar. John Berman is off this morning.