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North Korea Fires Two Ballistic Missiles In "Serious Provocation"; NYPD Advises 'Elevated Vigilance' Ahead of Midterm Elections; U.S. Economy Grew 2.6% In Third Quarter. Aired 5:30-6a ET
Aired October 28, 2022 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:00]
CHRISTINE ROMANS, CNN ANCHOR: CNN's Kristie Lu Stout joins me this morning from Hong Kong. What else do we know, Kristie, about this launch?
KRISTIE LU STOUT, CNN CORRESPONDENT: Well, Christine, we know that tension is certainly rising in the region after North Korea fired two short-range ballistic missiles earlier today -- its 28th such launch this year. It comes just as South Korea is wrapping up doing military exercises on the east coast of the country, and it also comes just days before the U.S. and South Korea are due to kick off joint Air Force military drills -- that to begin on Monday, October 31.
This is what he heard from the South Korean joint chiefs of staff earlier today. They said that North Korea fired two short-range ballistic missiles around noon local time. They covered a distance of about 230 kilometers.
The South Korean military has been on alert as is the U.S. military.
We do have a statement for you -- let's bring it up -- from the U.S. Indo-Pacific Command saying this. Quote, "While we have assessed that this event does not pose an immediate threat to U.S. personnel or territory, or to our allies, the missile launches highlight the destabilizing impact of the DPRK's unlawful WMD and ballistic missile programs. The U.S. commitments to the defense of the Republic of Korea and Japan remain ironclad."
North Korea has been carrying out a flurry of missile tests this year. It was just last month when North Korea fired a missile over Japan -- the first such test since 2017. And this year, North Korea has fired the highest number of missiles since 2011. That was the year when Kim Jung Un took power.
We also know that tensions have been rising between the North and the South earlier this week. Both these countries were exchanging warning shots at sea.
And as you mentioned at the top of this live broadcast or at this live hit, we know that concerns are rising about a potential nuclear test. If that happens, the first such nuclear test since 2017. And we also heard from the U.S., along with its allies in the region (Japan and South Korea ), if that was to take place, they have already agreed to a response that is, quote, "unparalleled."
Back to you, Christine.
ROMANS: All right, Kristie Lu Stout. Thank you so much for that.
All right, quick hits around the globe right now.
Iran's government calling for nationwide rallies to condemn the deadly attack on a Shia shrine. ISIS is said to have claimed responsibility but authorities also blame anti-government protesters.
The new British prime minister won't attend a global climate summit next week in Egypt. Downing Street says Rishi Sunak has other pressing commitments. Other senior U.K. officials will attend.
Brazilians return to the polls Sunday to pick their president. It will be the second round of voting pitting the far-right incumbent against the left-wing former president.
All right, mortgage rates in the U.S. haven't been this high since "FRIENDS" was on Thursday nights. And who would have thought working the polls on Election Day would be risky?
(BEGIN VIDEO CLIP)
JOHN MILLER, FORMER NYPD DEPUTY COMMISSIONER OF INTELLIGENCE AND COUNTERTERRORISM: You've got poll workers and election officials literally quitting their jobs because of the atmospherics. They are worried about what they are seeing.
(END VIDEO CLIP)
(COMMERCIAL)
[05:37:34]
ROMANS: The economy may be issue number one for American voters but there's growing concern about security around the midterm elections now just 11 days away.
We get more this morning from CNN's Brian Todd.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): An urgent warning from America's largest police force. More vigilance is needed for security for the upcoming midterm elections.
The New York Police Department issuing a new bulletin warning that, quote, "Malicious actors, especially racially and ethnically motivated violent extremists and anti-government, anti-authority extremists, will continue to prioritize the targeting of political rallies, voting sites, poll workers, and election officials."
MILLER: You've got poll workers and election officials literally quitting their jobs because of the atmospherics. They are worried about what they are seeing and about what they are hearing.
TODD (voice-over): The NYPD says there are currently no credible threats to New York City polling sites but there have been threats elsewhere.
We spoke with Scott McDonnell, the clerk of Dane County, Wisconsin.
(BEGIN VIDEO CLIP)
SCOTT MCDONNELL, COUNTY CLERK, DANE COUNTY, WISCONSIN: We've gotten social media threats. I have -- in fact, we had someone wandering around all in camo in the April election, shaking on doors and trying to get in the places. By the time the police reacted to that he was long gone.
TODD (voice-over): Recently, armed individuals in tactical gear were seen outside a ballot drop box in Mesa, Arizona. Officials in Texas have asked the Department of Justice to send monitors to Harris County -- where Houston is -- where efforts to intimidate election workers have been reported -- incidents that prompted this vow from the U.S. attorney general.
MERRICK GARLAND, U.S. ATTORNEY GENERAL: The Justice Department has an obligation to prevent -- to guarantee a free and fair vote by everyone who is qualified to vote, and will not permit voters to be intimidated.
TODD (voice-over): Law enforcement officials and analysts say the threats are being fueled by extremists who still promote the falsehood that the 2020 election was stolen from Donald Trump and that they'll use all sorts of tactics to intimidate voters.
MARY MCCORD, FORMER ACTING ASSISTANT ATTORNEY GENERAL FOR NATIONAL SECURITY: It can be things that suggest to a person that they're being watched. That maybe what they're doing is illegal -- following voters to their cars, recording their license plate numbers. Certainly, asking them any questions about their eligibility to vote or any kind of thing like that.
MILLER: The online chatter is like nothing we have really seen before in terms of an election season. They're talking about attacking political meetings.
TODD (voice-over): And a new CNN report says federal funding for enhanced security measures at election offices and polling places often isn't getting to officials who would put those measures in place because of bureaucratic snafus or breakdowns in communication.
[05:40:08]
MCDONNELL: If there's money available at the national level we don't -- we don't know about it. There's no coordination and it's really deeply frustrating for us on the front line.
TODD (on camera): As a result, Scott McDonnell says security at his election office in Dane County, Wisconsin heading into the midterms, is, quote, "a joke."
Security analysts tell us they're worried that the threats and the holes in security at some election sites will prompt some voters to stay away from the polls this time, figuring it's simply not worth it.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
ROMANS: All right, 40 minutes past the hour.
A bad week for billionaires. Bosses like Jeff Bezos and Mark Zuckerberg losing more money than most of us can even imagine.
And this billionaire, Elon Musk, making his first moves as boss of Twitter.
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[05:45:05]
ROMANS: All right. Romans' Numeral this morning, 23 billion dollars -- 23 billion dollars. It's what Jeff Bezos lost yesterday, on paper at least, as Amazon shares tanked on a weaker holiday sales forecast. Amazon shares plunging after the e-commerce giant said it only expects revenue there up to $148 billion for the final three months of the year, well below the $155 billion analysts had expected.
Right now, a precarious time for Amazon. It's facing a shift back to in-person shopping and surging inflation and recession fears slowing demand.
Looking at markets around the world right now, you can see Asian shares all closed lower. Europe has opened down, so a grim mood around the world. Stock index futures on Wall Street also pointing to a lower open this morning.
The Dow ended the day higher after a stronger-than-expected GDP report in the U.S., but the S&P and the Nasdaq fell. Really, a tech wreck on Wall Street yesterday. Widely-held Amazon tanked, of course, and shares of Meta crashed to their lowest level since February 2016, wiping out years of gains. The one bright spot, Apple reported record revenue for its quarter.
Mortgage rates topping seven percent for the first time since 2002 -- 20 years.
Gas prices held steady overnight, now at $3.77 a gallon.
Let's bring in John Leer. He's the chief economist at Morning Consult. So much going on, John. And yesterday, CNN's Phil Mattingly sat down with the Treasury secretary, Janet Yellen, who said this.
(BEGIN VIDEO CLIP)
JANET YELLEN, TREASURY SECRETARY: I don't see signs of a recession in this economy at this point.
(END VIDEO CLIP)
ROMANS: After seeing the third-quarter GDP report, John, is she right?
JOHN LEER, CHIEF ECONOMIST, MORNING CONSULT (via Webex by Cisco): Well, she's right in the sense that there's nothing in the report itself that screams of a recession.
But I do think if you start looking underneath the hood a little bit, particularly at where that growth has come from in the third quarter, it's largely from exports. I do see many signs that the global economy is weakening. If you go look at China, if you look at Asia, the sentiment way down across all of those markets. And I think that will ultimately have some negative spillover effects on the U.S. economy.
ROMANS: Yes. I mean, I think that the scorecard -- and I'm paraphrasing Phil Mattingly here, but the scorecard that the administration is trying to give is all correct but it doesn't match the mood of the electorate right now. The mood is still very inflation-focused. People don't feel great about this economy.
LEER: That's exactly right. Consumer sentiment continues to decline. We're seeing it every day here at Morning Consult, not only in the U.S. but globally.
I think the other thing to note is that inflation expectations also remain elevated, so folks continue to expect high levels of inflation going forward, even as gas prices have kind of stalled around the world.
And so, you're exactly right. The mood is fairly dour. And the GDP report I think largely reflects what has happened in the past.
ROMANS: Yes.
LEER: It's not particularly good if you're thinking about the future.
ROMANS: Yes. One of our writers here said it's the bump before the slump. People are really worried about what's going to happen next year.
Where you've seen the Fed really -- the higher interest rates really working in the economy is in the housing market. We now have the 30- year fixed rate mortgage above seven percent for the first time since 2002. George W. Bush was in the White House the last time you had -- you had mortgage rates this high.
When can we expect to see higher interest rates filtering into other parts of the economy, John? What do you think?
LEER: Well, we did see higher interest rates impact residential and fixed business investment this last quarter. So I think a lot of folks who are thinking about making major capital expenditures are, in fact, pulling back. What we haven't seen yet is higher interest rates, in fact, impact the
demand for workers and the demand for labor. We continue to see really, really strong evidence of high-frequency employment data.
I don't think that's probably going to happen this month or next. I think it's more likely to start -- we're likely to start seeing that early next year.
ROMANS: Let's talk about the Fed meeting next week. There's also a jobs report next week, by the way, that could still show us how this economy is still very strong in terms of the job market.
What are you expecting from the Fed -- 75 basis points? Any signals that they could slow down after that?
LEER: I think the Fed is fairly strongly committed at this point to 75 basis points in large part because of how persistent inflation, particularly core inflation in some of these service sectors can be. And so, it's sort of -- it's better to come out aggressive now.
The other thing to note, right, is that we're seeing global central banks raise interest rates as well. That should ease some of the pressure on the -- on the dollar. And I think that will ultimately be a benefit to the U.S. economy in the long run.
But I think the Fed will be very aggressive with 75 basis points next week.
ROMANS: That strong dollar you were mentioning was at play in the Amazon earnings yesterday. Look, no one is crying for Jeff Bezos losing $23 billion on paper. Mark Zuckerberg losing a bunch of money yesterday on paper, too, because Facebook shares fell. But these are stocks that are pretty widely held. They're probably in your 401(k).
What do you make of this sort of rotation we're seeing in these big tech names that had led the market during the pandemic and now are showing signs of weakness? What does that say more broadly about the economy, John?
[05:50:08]
LEER: Workers and businesses are reallocating how they're spending their time and how they're spending their money.
For a long period of time we, in fact, couldn't go out and spend money on services. Those were all shut down. We had lockdowns. Now folks are coming back and reengaging with some of the services sector. They're reimagining how they're going to live their lives and that, in turn, is translating into a shift in spending.
We've started to see that -- I think some of that sort of reopening boon that we experienced over this past year will start to contract a little bit as discretionary services start feeling the impact of a consumer who is struggling a little bit more.
ROMANS: All right, John Leer, Morning Consult chief economist. Nice to see you this morning. Have a great weekend.
LEER: Thank you so much.
ROMANS: All right, former President Obama heading on the campaign trail for Democrats in just hours. And a CNN team in the trenches at the war in Ukraine.
(BEGIN VIDEO CLIP)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: So this is the actual front line between the Russians and the Ukrainians. They say that the Russians are only a couple of kilometers in that direction. And obviously, there's a lot of shelling that goes on here almost all the time.
(END VIDEO CLIP)
(COMMERCIAL)
[05:55:40]
ROMANS: New York's bravest making history with the appointment of the city's first female fire commissioner. Laura Kavanaugh says she hopes it will pave the way for other women in the future.
(BEGIN VIDEO CLIP)
LAURA KAVANAUGH, NEW YORK CITY FIRE COMMISSIONER: This moment, me being first, only matters if I am not the last. Change is what has made this department and this city continually stronger. It is why we are the best.
(END VIDEO CLIP)
ROMANS: Kavanaugh has been acting commissioner since February.
All right, the Ravens hand the Buccaneers their third straight loss, marking Tom Brady's first 3-game losing streak in 20 years.
Andy Scholes is in Houston, the site of tonight's game one of the World Series. He's got the Bleacher Report this morning. Hey Andy.
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.
You know, we're just not used to seeing this from a Tom Brady-led team. The Bucs have now lost five times in their last six games.
Now, Brady did set another NFL record in the first half of the game last night, but not the kind of record that you want. The 45-year-old becoming the most-sacked quarterback in league history, passing Ben Roethlisberger. Brady ended up being sacked three times on the night.
And the Bucs -- they did have a 10-3 lead into halftime but that's when Lamar Jackson took over. Baltimore scoring on its first four possessions after halftime, including a pair of touchdown passes.
The Ravens pull off to come back and win 27-22.
So, for the first time in Brady's storied 23-year career, he's two games under 500. Afterward, the 7-time Super Bowl champ spoke about not giving up.
(BEGIN VIDEO CLIP)
TOM BRADY, TAMPA BAY BUCCANEERS QUARTERBACK: I think there's always hope and then there's reality. And the only thing you could really focus on is what the reality of the situation is and that's -- you know, we haven't played our best football.
We have a lot of quality players and we've got to -- we've got to do a better job playing well. And you've got to take it one week at a time. Everything's different. Things could change after this game, too, and things could change the week after that, and the week after that, and the week after that, and the week after that. We've just got to go find a way to get a win.
(END VIDEO CLIP)
SCHOLES: Meanwhile, here at Minute Maid Park, we've got game one tonight of the World Series between the Astros and the Phillies. And this park is no stranger to the Fall Classic. It's going to be the fourth time in six years that the Astros are playing in the World Series.
The Phillies, meanwhile -- they're back in the World Series for the first time since 2009. And just what a run this team is on after squeaking into that last playoff spot in the National League. They beat the Cardinals, then they beat the Braves, then the Padres. This team certainly has that team of destiny feel to it.
(BEGIN VIDEO CLIP)
BRYCE HARPER, PHILADELPHIA PHILLIES DESIGNATED HITTER: I think as a team, we kind of just hit on all the right cylinders at the right time and started playing good baseball.
RHYS HOSKINS, PHILADELPHIA PHILLIES FIRST BASEMAN: It's just a fun time to be a Philly, really. We're having as much fun as we've had all year.
LANCE MCCULLERS JR., HOUSTON ASTROS PITCHER: We've got to roll with the punches. We put our self in that situation originally and we're -- we've clawed our way out. And we've shown the world that we're a heck of a baseball team and it would be great to cap it off with a -- with a trophy.
SCHOLES: Would you like to give them that tomorrow night?
MCCULLERS: Of course. Yes, of course -- yes. Yes -- we want -- we want them to be able to have the ultimate -- the ultimate Uno reverse card.
(END VIDEO CLIP) SCHOLES: Yes. That was Lance McCullers telling me how he'd love to give Astros fans the chance to say hey, look, we are true champions despite the whole cheating scandal.
An Astros win would also be extra special for manager Dusty Baker. The 73-year-old has the most wins in baseball without a World Series.
So it should be a good one, Christine. A lot of people looking forward to it, especially the fans here in Houston. They would love to win a World Series after all the boos and things they've had to hear over the last few years.
But the Astros kryptonite has been the hot team from the NL East just peaking at the right time. They lost to the Nationals --
ROMANS: Yes.
SCHOLES: -- in 2019. They lost to the Braves last year. Phillies fans hoping they have some of that same magic and can pull off the upset against the Astros.
ROMANS: All right, Andy Scholes. Have a good time. Work hard but have a good time. Best assignment at the network today is you.
SCHOLES: Thanks.
ROMANS: All right, thanks for joining us. I'm Christine Romans. Have a great weekend, everybody. "NEW DAY" starts now.
BRIANNA KEILAR, CNN ANCHOR: It is a done deal. Billionaire Elon Musk completed his $44 billion takeover of Twitter.
I am Brianna Keilar with Alex Marquardt this morning.
ALEX MARQUARDT, CNN ANCHOR: Good morning.
KEILAR: Good morning. John Berman is off.
And according to sources, Musk immediately fired Twitter's CEO, the chief financial officer, and the company's top lawyer.
Musk first agreed to buy the company back.
