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Early Start with John Berman and Zoraida Sambolin

Tomorrow: Voters Could Return Netanyahu To Power; Violent Clashes Between Students and Security Forces In Iran; Elon Musk Tweets Paul Pelosi Attack Conspiracy. Aired 5:30-6a ET

Aired October 31, 2022 - 05:30   ET



HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Now we have the caretaker prime minister Yair Lapid in power, and he is hoping that by being prime minister that will help convince people to let him keep the job. Benjamin Netanyahu is now campaigning from the outside.

And the other major difference -- what's really at stake here is also the rise of the far-right in Israel. Because right now, Benjamin Netanyahu, in order to come into power, will rely on the support of some far-right parties that are seeing numbers in the polls that they have never seen before.

And these are people whose leaders have been convicted in the past of inciting racism and supporting terrorism. These are people that many would have been -- many would have thought it was impossible for them to be in government. In fact, Benjamin Netanyahu himself said last year that the likes of these people being in the cabinet would be unlikely. And now he says it's certainly possible for them to be in a ministerial position.

So, it's very much the same in terms of whether it's pro-Netanyahu or against Netanyahu. But for a lot of voters they're looking at this far-right party and seeing that they could possibly be in power -- something that they would have thought impossible just a few years ago --


GOLD -- Christine.

ROMANS: All right, Hadas. Thank you so much.

Violent clashes breaking out on Sunday between security forces and student protesters at universities across Iran. The demonstrations continuing despite an order from the Revolutionary Guard that Saturday was to be the last day of protests.

Anna Coren is tracking the latest developments for us. What is Iran's next move now that the order to end the protests is clearly being ignored?

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Well, Christine, the fear is that these protests are going to become more violent, more brutal, more deadly. That we are going to see an even further crackdown by authorities. These protests have now entered their seventh week.

And over the weekend we saw security forces firing tear gas at protesters at university campuses right across the country. On Sunday, large numbers of protesters converged on the grounds of dozens of universities calling for an end to the regime -- something we've heard week after week. And we are getting this all from social media. This came a day after the head of the country's feared Revolutionary Guard issued an ultimatum claiming that Saturday would be the last day of protests.

Now, according to state media, the country's hardline President Ebrahim Raisi said, quote, "Security is the red line of the Islamic Republic and we will not allow the enemy to implement in any way its plans to undermine this valuable national asset." Certainly, a veiled threat there.

Iran has been gripped, as we know, by protests following the death of 22-year-old Mahsa Amini back in mid-September after she was arrested by the morality police for wearing an improper hijab.

Rights groups say that hundreds of protesters have been killed, thousands arrested. And Christine, we know that this is a conservative number as authorities struggle to contain an outpouring of public anger and demonstrations calling for the regime's overthrow.

Now, I should mention that more than 300 Iranian generalists have issued a statement calling for the release of two of their colleagues, Niloufar Hamedi and Elahe Mohammadi. They are both accused by the Ministry of Intelligence of being CIA spies and, quote, "the primary source of news for foreign media." That's a crime punishable by death -- after breaking the story of Amini's death. Both those journalists have been held in Tehran's Evin prison since their arrest last month, Christine.

ROMANS: All right, Anna Coren for us -- thank you so much -- on the latest in Iran.

All right, quick hits around the globe right now.

In the U.K., calls for an investigation after a report former Prime Minister Liz Truss' phone was hacked while she was foreign secretary. The Mail on Sunday reports messages, including those about arms shipments to Ukraine, were intercepted by foreign agents.

Lebanon's President Michel Aoun departing the presidential palace Sunday, a day before his term ends, with still no replacement in sight. Parliament has, so far, been unable to agree on a successor.

Apple says workers at China's largest iPhone assembly plant have left the factory complex for their hometowns after a COVID outbreak hit the plant. Apple supplier Foxconn has not disclosed the number of workers who were infected.

All right, antisemitic messages posted on the side of a major sports stadium. And Twitter's new era begins with misinformation tweeted by that guy -- the man in charge.



ROMANS: Welcome back.

Twitter's new owner, Elon Musk, says he doesn't want the platform to become a, quote, "hellscape." That didn't stop him from retweeting a fringe conspiracy theory about Paul Pelosi.

CNN's Donie O'Sullivan has more.


DONIE O'SULLIVAN, CNN CORRESPONDENT (on camera): So, just as we approach Election Day here in the United States, there are people at Twitter working to combat misinformation and disinformation about the election.

But we saw on Sunday their new boss -- the new owner of Twitter, Elon Musk, tweeting out a link to an article that was making baseless claims about what happened to Paul Pelosi. Musk eventually deleted that tweet, perhaps acknowledging he was wrong.

But that website that he had linked to was basically a website that often publishes nonsense, including in 2016, that same website actually claimed that Hillary Clinton had died and that the person on the campaign trail was a body double.


Just a few days into Musk owning this company, we've seen a lot of upheaval within the company and now we see Musk doing this publicly. It's going to be a rough ride for people at Twitter for the next time.

Back to you.


ROMANS: All right, thanks, Donie.

A Twitter spokesperson did not immediately return a CNN request for comment.

All right, quick hits across America now.

Families of the 17 Parkland school shooting victims will each get to speak at a hearing beginning Tuesday before Nikolas Cruz is sentenced to life in prison. The jury, at his penalty trial, did not unanimously agree on a death sentence.

Antisemitic messages, some referencing Kanye West, were posted in multiple public places in Jacksonville, Florida this weekend -- one projected on the outside of the football stadium during the Georgia- Florida game. New York City agreeing to pay $26 million to settle lawsuits on behalf

of two men wrongly convicted of killing Malcolm X. They spent more than 20 years behind bars before their convictions were thrown out last year.

All right, the Dow hasn't had a month this good since disco was king. And the vaccines now in the works to keep kids from getting severe respiratory illness.



ROMANS: All right, Romans' Numeral this morning, 1976. The Dow Jones Industrial Average is having the best month since the year 1976 when Gerald Ford was president and the Bee Gees were topping the charts. The Dow is up 14.4 percent in October on this final trading day of the month.

The S&P and the Nasdaq are currently on track to snap a 2-month losing streak. Right now, on Wall Street, stock index futures -- you can see them -- we'll pull them up. This is Tokyo and Hong Kong. You can see -- there we go -- down just a little bit.

Looking at markets around the world, a mixed performance really here. European shares mixed as well. October's inflation figures from the Eurozone due out today, by the way.

Earnings season resumes this week. Marriott, Uber, CVS, Under Armour, and Hyatt among those set to release quarterly numbers.

The Federal Reserve meets Tuesday and Wednesday. Fed chief Jerome Powell is expected to deliver another whopping interest rate hike.

Gas prices, in case you're watching, holding steady overnight, now sitting at $3.76 a gallon.

It's all about the Fed this week. Let's bring in Mark Zandi, chief economist for Moody's Analytics. Good morning, Mark. Nice to see you.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS (via Webex by Cisco): Good morning, Christine.

ROMANS: All right. So, another gigantic interest rate hike is expected -- four in a row. It's really jacking up mortgage rates, right? You can see it really hurting some of these high-growth tech stocks.

When will it start to cool inflation, in your view?

ZANDI: I think it already has. I think inflation has peaked. I mean, obviously, it's very high -- painfully high. Consumer price inflation is over eight percent. But we were at nine and it feels like it's starting to come in. The economy is starting to slow, recruiting fewer jobs than we were just a few months ago. It feels like wage growth is rolling over. I'm listing a bunch of stuff but they all kind of play into that question about inflation.

It feels like inflation has peaked and is moving in the right direction. But having said that, we've got a long way to go --


ZANDI: -- to get back to anything anyone would feel comfortable with.

ROMANS: So the Fed, maybe, a 75 basis point rate hike again this week. Anybody borrowing money, you've been warned that rates are going to go higher here.

And then what happens after that? Do you still see a path to avoiding a recession?

ZANDI: Yes, I do. I mean, the Fed has laid out a script.

They're going to raise the rates here three-quarters of a point. Then they meet again in December and they'll raise it another half a point. They meet again in January and they'll raise the rate another quarter point. And then I think they'll stop and pause and take a look around because they know that it takes a while for all of these interest rate hikes to affect the economy and to slow inflation.

My sense is that at that point they'll have enough evidence that inflation is moderating sufficiently and the economy is right where they want it and that's the end of the rate hike. So if that's the case, then I think we can avoid a recession.

But, obviously, having said that, a lot of risk around all of that. And the economy under any scenario -- recession, no recession -- is going to struggle next year. It's going to be a tough year.

ROMANS: Yes, that's why all that recession guessing continues, I mean, almost obsessively. People wondering what's going to happen --


ROMANS: -- in the U.S. economy.

Meanwhile, you have the stock market bounce back in October. But year- to-date -- I mean, it has been tough, especially for those so-called FAANG stocks -- Facebook, Apple, Amazon, Netflix Google. Those high- growth tech stocks that are interest rate-sensitive.

What do you see happening there -- that rollover? Is that another one of those signs that the Fed's medicine is starting to work in the economy?

ZANDI: Yes, absolutely. I mean, you've got to just put it into context, right? Go back a year ago -- these stocks -- the FAANG stocks were just going skyward. They're just coming back to Earth.

They've got two problems. One is they're growth stocks. Investors are not questioning just how much they're going to grow in the future. I mean, they were booming earlier in the pandemic when we were all stuck at home and people were buying lots of stuff -- entertainment online. And they're still doing well but not quite as well as we're out and about going to restaurants and ballgames, and traveling, and that kind of thing.

And the second is the interest rate that you mentioned. Investors invest in these companies for the earnings that are going to make long into the future. Well, when rates are higher, the value of those earnings long into the future is lower, and that's why prices are down.

But having said all of that, Christine, these are powerhouse companies --


ZANDI: -- so they're going to do well. It's just maybe not as well as stocks investors thought a year ago.

ROMANS: Yes. Sometimes they just don't go straight up anymore, right, when you're in this --


ROMANS: -- kind of an environment.

Also not going straight --

ZANDI: Especially when you're --

ROMANS: Go ahead.

ZANDI: Yes. I was just going to say since they're massive companies, right? I mean, these guys are big now. It's hard to grow --

ROMANS: Right.

ZANDI: -- a lot when you're -- when you're this big.

ROMANS: Let's talk about the housing market because that is where we're also seeing those higher interest rates at work. Last week, the 30-year fixed-rate mortgage above seven percent for the first time in a couple of decades.


What is your feeling on housing and whether you -- how it's going to weather these higher rates?

ZANDI: Well, housing is taking it on the chin but that's to be expected. I mean, again, the Fed is raising rates to try to cool off the economy and get that inflation back down, and there's no more interest rate-sensitive sector of the economy, right? I mean, if most people want to buy a home they've got to go get a mortgage and that's tied right into interest rates.

And so, I -- and, of course, house prices went skyward back when rates were record lows a year-year and a half ago.


ZANDI: So you mix the now high house prices with these high mortgage rates and people just can't afford it, and so they've been just pulling out of the market.

So, housing is going to struggle here over the next 12 to 18 months and I do expect some meaningful price declines. But again, that's part of the script, right?


ZANDI: I mean, if the economy is going to slow, this part of the economy has got to slow more than others.


All right, Mark Zandi, Moody's chief economist. Nice to see you this morning. Thanks for dropping by.

ZANDI: Yes. Take care now.

ROMANS: Have a great day.

All right, families in at least a dozen countries in mourning right now after the deadly crowd surge in South Korea. And new details on the man accused of attacking Nancy Pelosi's husband in their home.




Clip from Warner Bros. Pictures "Black Adam."


ROMANS: All right. Dwyane Johnson's "Black Adam" holding on to the top spot for a second weekend with a $28 million take. The superhero film was down nearly 60 percent from its debut weekend but still held off a star-studded romcom and three horror flicks.

All right, the Packers' season is turning into a nightmare after falling to the Bills for their fourth-straight loss.

Coy Wire has this morning's Bleacher Report. Hey, Coy.


On paper, this looked like it was going to be the marquee match-up between two of the best quarterbacks in the NFL. Josh Allen and the Super Bowl favorite Bills hosting the Packers and 4-time league MVP Aaron Rodgers.

Unfortunately for Green Bay fans, they don't play the game on paper.

Fortunately, for Bills fans, Josh Allen. He can run it. Look at him scrambling there for 20 years, putting people on skates at 6-foot- five, 235 pounds. It's just not fair.

He can also pass it. He hits his tight end, Dawson Knox, here for one of his two touchdowns on the night. Bills fandom going buck wild.

Next possession, Bills star receiver Stefon Diggs putting a double move on Rasul Douglas that leaves him in the dust -- touchdown. That's Diggs' now tied for the league lead with seven touchdown receptions on the season.

The Packer's Romeo Doubs did give Go Pack Go some hope, though, making an incredible grab in the end zone -- outstanding concentration.

Buffalo rumbles, though, 27-17, now atop the AFC at 6-1. The Packers falling to 3-5 for the first time since 2006. That was Brett Favre's second to last season in the league.

Christian McCaffrey going back to Cali. The former Stanford star traded to the 49ers not even two weeks ago but he's already part of history. At the defending champion Rams yesterday, McCaffrey pulled off the rare touchdown trifecta, becoming the first player since Hall of Famer LaDainian Tomlinson in 2005, to have a passing, a receiving, and rushing touchdown in the same game. The late great Walter Payton and David Patten are the only other players to have done that since the 1970 merger.

Niners win in a rout, 31-14.

The Atlanta Falcons finding a way to win again. Their game against division rival Carolina was over. Up six over the Panthers with 23 seconds to go, but Carolina's Hail Mary prayers are answered -- D.J. Moore with a 62-yard score.

But he takes his helmet off for his team. That's a no-no. That's a 15- yard penalty. So, kicker Eddy Pineiro shanks what would have been an easy extra point for the win. To overtime we go.

Pineiro would get a chance at redemption -- a 32-yarder for the game and the win, but that was no good. So the Koo game comes down to the Koo train. All aboard, Atlanta. Younghoe Koo, from not speaking any English when he moved here into the U.S. from South Korea as a 12- year-old, to pro bowler, to game-winner from 41 yards out.

The Falcons win 37-34 and move to first place in the NFC South.

Elsewhere, four Michigan State football players suspended for attacking Michigan players in the tunnel after their game Saturday night. Wolverines coach Jim Harbaugh saying two of his players were assaulted during the shuffle. One of them may have a broken nose.

Spartan's coach Mel Tucker says the players will remain suspended until the police, the Big 10, and both schools complete their investigations. Finally, Christine, after five consecutive losses, the Los Angeles Lakers have finally won their first game of the NBA season -- 121-110 over Denver. And L.A.'s big three -- they came through big. LeBron James has 26 points; Anthony Davis, 23. Russell Westbrook, off the bench, scoring 18.

Afterwards, you would have thought they'd just won a trip to the NBA Finals. But no, it's a celebration for Lakers Coach Darvin Ham's first career win as a head man.

ROMANS: All right.

WIRE: Christine, back to you.

ROMANS: Congratulations to him.

All right, Coy, nice to see you. Have a great day.

WIRE: You, too.

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