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Will Dow Rebound After Record Fall?; Democratic Memo Awaits President Trump's Approval; Vice President Pence to Attend Opening Ceremonies of Winter Olympics; Aired 4-4:30a ET
Aired February 6, 2018 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[04:00:13] MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: It's very likely simply that ebb and flow of our stock market.
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CHRISTINE ROMANS, CNN ANCHOR: The administration trying to ease jitters after a record selloff on Wall Street. All the gains of 2018 are gone. A quarter of the rally since the election gone. Now global investors are selling, too.
DAVE BRIGGS, CNN ANCHOR: The president's lawyers reportedly concerned he could incriminate himself in his interview by the Russia special counsel. Now they are trying to sway him against the sitdown with Robert Mueller.
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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Somebody said treasonous. I mean, yes, I guess why not?
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ROMANS: The president literally compares Democrats with people trying to overthrow the government because they wouldn't stand to applaud during the State of the Union.
Good morning. Welcome to EARLY START. I'm Christine Romans. Nice to have you back.
BRIGGS: Good to be back, my friend.
ROMANS: A couple of things happened while you were gone.
BRIGGS: Yes. It never slows down, does it?
BRIGGS: During that talk, though, the president also says he's not braggadocios so words were not exactly used that accurately yesterday.
I'm Dave Briggs. It's Tuesday, February 6th. It is 4:00 a.m. in the East. And we start with major market concerns. Investor concerns not quieting just yet after Monday's epic selloff on Wall Street. The Dow hit its single biggest point loss ever.
Overnight markets abroad were jittery. Futures on Wall Street now rebounding after falling sharply overnight.
Chief financial correspondent Christine Romans fortunately with us with a look at what's behind the drop and how long it could last, my friend.
ROMANS: You know, it's not over. The selloff is not over yet. I want to show you global markets right now because Wall Street's plunge is rippling around the world. We have markets in Tokyo, Hong Kong and Shanghai all down. Those are the big red arrows on the top of the screen. Europe just opened an hour ago. Europe following suit here with just shy of 2 percent losses here.
But Dow futures, Dow futures just popped higher. Look, this is Dow futures up 148 points. They were down more than 700 points earlier overnight. So that gives you a sense of just how wild this market sentiment is at the moment now.
The Dow lost --
ROMANS: The Dow lost more than 1800 points over the past two days. Monday was simply brutal. Shedding a record 1,175 points. It's something I've never said before in 20 years of covering stock markets. More than 1,000 points. But that's 4.6 percent. So a big- point loss. But remember we've had such a big run-up that percentage wise, it is shy of 5 percent.
Yes, but this is actually a rebound. Look at here. Got down to about 24,000. The average was at one point down 1600 points, the biggest decline in history. And the Dow's worst day in six and a half years, wiping out all of the Dow's gain for the year.
So what's going on? A couple of things. The trigger was actually the jobs report Friday. Particularly this, strong wage growth. That 2.9 percent wage growth. Wage inflation is good for workers but it's bad for corporate profits. And as inflation picks up too fast, the Federal Reserve may need to raise interest rates faster than planned.
And the biggest concern, a selloff in the bond market. Bond yields move opposite to price. They hit a four-year high Friday. As yields go up, bonds offer better returns making them much more attractive to investors than risky stocks.
Now even if stocks continue to drop here today, there is no chance of a crash or a panic. I want to be really clear about that. Stocks haven't even hit a 10 percent drop or a correction. And that's long overdue. And conditions are still good.
Dave, the economy is strong. The job market is robust. Corporate earnings are on the rise. Companies are going to make a ton of money this year.
ROMANS: So this isn't about the economy right now. This is about the stock market that has gone straight up for now almost 10 years of an expansion and old expansion. This is what it starts to look like in the late stages of an economic expansion when you have a bond market that's telling you the economy could get overheated.
BRIGGS: Well, we're still up 33 percent on the Dow since election day.
ROMANS: That's right.
BRIGGS: But it's tough to un-couple that from politics because of the president's cheering.
BRIGGS: Is this live by the sword or die by the sword?
ROMANS: That's a really good point because this is why presidents and treasury secretaries and vice presidents, they don't talk about the market as a cheerleader. The president has taken a completely new role as cheerleader-in-chief. He has taken credit for every one of these big rallies and big records. It will be very interesting to see if he tones that down now because 1,000 point decline -- you know if that was 1,000 point rally he'd give himself credit for it. So we'll see if he tones it down, becomes a little more traditional in how he talks about the stock market.
BRIGGS: Sarah Sanders hinted that perhaps a bit of pivot when she said the president's focus is now long-term economic fundamentals. So we'll see if that previews a shift in his rhetoric.
BRIGGS: Christine, thank you, my friend.
President Trump's lawyers are urging him not to sit for an interview with Special Counsel Robert Mueller.
[04:05:03] "The New York Times" reporting last night the president's attorneys are concerned he might incriminate himself by making false statements. CNN reported last night the Trump legal team is arguing that the special counsel's office has not met what it considers the high threshold for a face-to-face interview with the president.
The "Times" reports President Trump's attorneys believe that if he refuses to sit for an interview, Mueller may not go willing to go so far as seeking a subpoena to compel the president's testimony. The president said last month he is eager to speak with Mueller and willing to do it under oath.
ROMANS: This morning, the Democrats' memo pushing back against the Republican Nunes memo sits on President Trump's desk. The House Intelligence Committee voted unanimously to release the Democrats' rebuttal to GOP claims the FBI abused surveillance laws.
The president now has five days to decide whether to declassify it. The Democrats are raising concerns that the president may play political games, though.
More now from CNN's Pamela Brown at the White House.
PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, good morning, Christine and Dave.
The House has now approved the Democrats' memo to come here to the White House and now it is up to the president whether he will declassify it. It was truly a test of transparency considering the justification for releasing the Nunes memo from the White House was transparency. And so it will be interesting to see how the White House handles this now that it has the Democrats' memo.
A White House official said that the Democrats' memo will go through the exact same process as the Republicans' memo. It will be scrubbed. It will be reviewed by White House lawyers. But the question is, will there be any redaction? As you'll recall, there were no redactions on the Nunes memo from the White House.
Now Republicans on Capitol Hill said that's because they already made changes from the FBI's input before it ever came here to the White House. But Adam Schiff, the ranking Democratic on the House Intelligence Committee, came out and said that he's concerned the White House will redact parts of the Democrats' memo for political purposes so it remains to be seen what exactly will happen.
But the president has five days to review the memo and make the decision on whether or not to declassify it.
Back to you.
ROMANS: All right, Pam. Thank you so much, Pamela, for that.
All right. Steve Bannon will not appear before the House Intelligence Committee today. President Trump's former chief strategist risking a contempt of Congress charge for failing to comply with a subpoena. Bannon declining to testify because the White House and the Intel Committee have not reached an agreement on the scope of the questioning. The committee has delayed Bannon's return twice while the two sides negotiated whether he could discuss events that took place during the transition and his time in the White House.
BRIGGS: There is a man who knows what the word treason means.
President Trump mocking Democrats for their stone-faced reaction to this State of the Union address. The president was discussing tax reform and the economy at a rally outside Cincinnati on Monday when he said this about Democrats who refused to stand and acknowledge record low black unemployment during the State of the Union.
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TRUMP: They would rather see Trump do badly, OK, than our country do well. That's what it means. It's very selfish. Even on positive news, really positive news like that, they were like death. And un- American. Un-American. Somebody said treasonous. I mean, yes, I guess, why not?
TRUMP: Can we call that treason? Why not? I mean they certainly didn't seem to love our country very much.
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ROMANS: Somebody said treasonous, it's like a classic Trump, you know, word crutch.
BRIGGS: That's right.
ROMANS: For the record, the Constitution defines treason an act of levying war against the United States or in adhering to their enemies giving them aid and comfort. In other words, attempting to overthrow the government by teaming up with the enemy. That's the definition of treason.
BRIGGS: The president's comments met with a blunt rebuttal from Democrats like Rhode Island Senator Sheldon Whitehouse.
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SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND: Maybe he's been watching too much North Korean television where everybody in the North Korean assembly stands up and they all clap together automatically whenever the Deal Leader said something. That's not the way America works.
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BRIGGS: Illinois Senator Tammy Duckworth added to that sentiment, "We don't live in a dictatorship or a monarchy. I swore an oath to preserve, protect and defend the Constitution of the United States, not to mindlessly cater to the whims of Cadet Bone Spurs and clap when he demands I clap."
ROMANS: All right. Today President Trump is expected to order the creation of a National Vetting Center. Administration officials tell CNN the aim is to improve screening with travelers and immigrants entering the U.S. An official says the center will also vet some immigrants who are already here, including those subject to deportation.
[04:10:03] The president's national security memo does not call for additional funding. The center will just stream line information flow among federal agencies including DHS, the State and Justice Departments and intelligence agencies.
BRIGGS: Pennsylvania's congressional maps are headed for a makeover. The U.S. Supreme Court rejecting the request from state Republicans. They wanted the justices to block a lower court ruling that ordered the state's congressional maps redrawn. Currently Republicans hold 12 of Pennsylvania's 18 seats. Pennsylvania Supreme Court earlier ruled Republicans illegally sought partisan advantage over Democrats in drawing the maps. GOP leaders say they may pursue further legal action.
The ruling could have a significant impact, though, on the 2018 midterms. That's where GOP control of the House is on the line.
ROMANS: All right. A candidate with a history of anti-Semitic statements and holocaust denial is poised to represent the Republican Party in a race for a congressional seat in Illinois. Arthur Jones is running unopposed in the March 20th GOP primary for Illinois' 3rd District. His Web site contains a section suggesting that, quote, "There is no proof such a so-called holocaust ever took place." Another section outlines his views on white supremacy and religious supremacy.
The Illinois Republican Party has refused to back his candidacy. The Jones campaign did not immediately respond to CNN's request for comment.
BRIGGS: Takes us back to the times of Roy Moore in a way.
All right. Ahead, Colorado's governor says enough is enough after the third fatal shooting of a police officer in just six weeks. Now another widow and 11-year-old twins left in mourning.
[04:15:50] BRIGGS: 4:15 Eastern Time. A sheriff's deputy has died and three other officers were wounded in a shooting Monday in Colorado Springs. Authorities say they were trying to detain a car theft suspect when a struggle ensued and shots were fired. 34-year-old Deputy Micah Flick was killed on what was his 11th anniversary with the sheriff's office. He's survived by his wife and 7-year-old twins. The suspect also died in the gunfire.
The deputy is the third Colorado officer to be shot and killed since New Year's Eve. Governor John Hickenlooper said in a statement people must, quote, "come together and say enough is enough."
ROMANS: All right. 16 minutes past the hour. Actor Robert Wagner remains a person of interest in the 1981 death of his wife, actress Natalie Wood. Wagner has declined to speak with investigators since they reopened that case seven years ago but he's not obligated to submit to an interview, the Los Angeles County Sheriff's Department does want to hear from him.
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LT. JOHN CONNA, LOS ANGELES COUNTY SHERIFF'S DEPARTMENT: The original events he's portrayed in the media, I think -- we told the original investigators really don't add up to what we've found.
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ROMANS: CNN's calls to Wagner's representatives were not immediately returned.
BRIGGS: Wood drowned in November 1981 while boating off Southern California with Wagner and friend, Christopher Walken. She was 43 at the time. In 2012, the L.A. coroner changed Wood's cause of death from accidental to undetermined.
The suspected drunk driver who killed Indianapolis Colts linebacker Edwin Jackson and another man early Sunday morning is a twice- deported, undocumented immigrant. Police say Manuel Orrego-Savala, a citizen of Guatemala, is in the U.S. illegally after being deported in 2007 and again in 2009. Immigration officials say he was previously convicted of driving under the influence in Redwood City, California, in 2005 and also has misdemeanor criminal convictions and arrests.
Authorities say Jackson was a passenger for a ride-sharing operator identified as 54-year-old Jeffrey Monroe. Both men were standing outside the vehicle when they were struck. Funeral arrangements are pending.
ROMANS: Another legendary musician ready to call it a career.
ROMANS: Singer-songwriter Paul Simon announcing Monday his upcoming tour of North America will -- and Europe will be his last. In a message to fans, the 76-year-old Simon says it's unsettling, exhilarating and a bit of a relief. He says touring takes away from time with his wife and family. Homeward Farewell Tour kicks off in Vancouver in May, and wraps up in July in London.
Simon is the latest among major artists saying they are retiring from the road. We've got Elton John, Neil Diamond, Ozzy Osbourne and Lynyrd Skynyrd so 50 ways to leave here. Fifty years to leave your career, I guess.
BRIGGS: Indeed. All right. Hollywood is remembering veteran actor John Mahoney who died Sunday. He's best known for playing the curmudgeonly and sharp-witted father in the classic comedy series "Frasier."
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JOHN MAHONEY, ACTOR, "FRASIER": Accidentally stain your carpet and you set fire to the one thing in this apartment I care about and heave it out into the street.
KELSEY GRAMMER, ACTOR, "FRASIER": I'll tell you what, the healthiest thing you can do right now --
MAHONEY: Want to know the healthiest thing you can do?
GRAMMER: Shut my yap.
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BRIGGS: Classic. The actor starred on screen and on stage. Mahoney was an ensemble member of the Steppenwolf Theater in Chicago for 39 years. His publicist says he died following a brief illness. John Mahoney was 77 years old.
BRIGGS: And boy, was he funny.
ROMANS: Great actor.
BRIGGS: What a great character.
ROMANS: And Chicago legend.
All right. Vice President Mike Pence says the world needs to hear the truth about North Korea, but won't close the door on the meeting at the Olympics.
We go live to Pyeongchang next.
[04:24:01] ROMANS: The vice president en route to Asia right now for the Winter Olympics. Overnight Mike Pence did not rule out a meeting with North Korean officials but also says he plans to tell the truth about North Korea at every stop.
Meantime new trouble for Olympic officials with just three days to go to the opening ceremony. They have pulled more than 1200 security guards after they all came down with a virus.
For the latest, let's bring in CNN's Ivan Watson. He is live for us in Pyeongchang.
Good morning, Ivan.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Christine. And that's right. Mike Pence, he's leading the U.S. delegation that will be attending the opening ceremony here in Pyeongchang in just a couple of days. And he's stopping in Alaska. He's stopping in Japan first. And it's in Alaska where he repeated this message that he's trying to bring.
He's trying to highlight North Korea's dismal human rights record. He wants to challenge the public relations offensive that North Korea is conducting by engaging at the last minute in these Winter Olympics.
He is bringing with him the father of the American University student Otto Warmbier who died after more than a year in custody in North Korea with his parents accusing the North Koreans of essentially torturing him to death. [04:25:14] But interestingly, he did leave open the possibility of
talking to the North Koreans, even though the U.S. side says he hasn't asked for any formal meetings. Now as Mike Pence makes his way here, the North Koreans are arriving. The athletes are already here. A ferry boat has just arrived from North Korea carrying 140 performers with an art troupe that will be performing here.
There's another 280 North Koreans believed to be arriving tomorrow by land. They're going to include cheerleaders and a tae kwon do demonstration group. And a sports minister.
North Korea state media has fired back against criticism from Washington. A recent statement that had a lot of insults against President Trump himself calling him an old lunatic and also rejecting the accusations that North Korea has a dismal human rights record.
Finally, yes, an unexpected hiccup here. This norovirus called also Winter Vomiting bug has infected 41 people with sudden diarrhea and nausea, so the South Koreans have had to swipe out more than a thousand security guards and starts disinfecting buses and accommodations to try to make sure that doesn't spread -- Christine.
ROMANS: Wow. All right. And we just learned also that Ivanka Trump will be going to the closing ceremonies to represent the United States at her father's behest. So a lot of developments in the Olympics. Thank you so much. Nice to see you, Ivan.
BRIGGS: Much feel like the most political Olympics of our time.
Ahead, the Opening Bell five hours away. U.S. futures are rebounding after global markets took a dive overnight. Can the Dow bounce back after a record selloff?