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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 4:30-5a ET

Aired February 6, 2018 - 04:30   ET




[04:31:08] MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: It's very likely simply that ebb and flow of our stock market.


CHRISTINE ROMANS, CNN ANCHOR: The White House attempts to ease jitters after a record selloff on Wall Street. The gains of 2018 vanished. A remarkable split screen moment as the president touted the economy in Ohio. Right now global investors are selling again.

DAVE BRIGGS, CNN ANCHOR: And the president's lawyers reportedly concerned he could incriminate himself if he's interviewed by the special counsel. Now they're trying to sway him against the sitdown with Robert Mueller.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Somebody said treasonous. I mean, yes, I guess why not?


ROMANS: The president literally compares Democrats with people trying to overthrow the government all because they wouldn't stand to applaud during the State of the Union.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. The way I watched the Super Bowl, 1100 yards between the Patriots and Eagles -- is that how you watched yesterday?

ROMANS: 1100 points? Kind of. Kind of. In the end, I don't know who is the winner, though.


ROMANS: And that's the question.

BRIGGS: We shall see perhaps in the hours ahead.

ROMANS: We shall see.

BRIGGS: 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.

We're fortunate to have our chief financial correspondent here every morning with a look at the drop and how long this could last -- Christine.

ROMANS: Yes. I want to show you sort of what this looks like and what's happening right now. Right? Because the stock market selloff is not over yet. We can see what's happening in world markets. And the Wall Street plunge is rippling around the globe. This is Asia. Asian markets all lower, Tokyo, Hong Kong, Shanghai. Those are pretty big moves. The 4 percent move is a big move in the Nikkei. Europe just opened a little over an hour ago. All down there. But less than 2 percent right now.

So we're going to watch to see if they stabilize because futures -- Dow futures are up about 79 points. So they turned higher. But they were down more than 700 points overnight. It gives you a sense of just how erratic this is at the moment.

Let's talk a little bit about what happened yesterday. The Dow has lost more than 1800 points over the past couple of days. Monday was simply brutal. Look at that decline. That's a 1600 point decline. In the end, it was a record-setting day. 1,175 points lower. That is 4.6 percent. That is actually a rebound. The average has been down all the way here to 24,000. This was the biggest one-day point decline in history.

The Dow's worst day in 6 1/2 years, wiping out all of the gains for the year. But again that 4.6 percent -- percentage wise is important here, Dave, because the market has gone up so far so long that 1,000 points is still 4.6 percent. We've had much bigger days percentage wise. October '87, for example, was 22 percent lower. Just keep that in mind.

So what's going on here? A couple of things. The trigger was actually the jobs report Friday. Strong wage growth. Wage inflation is great for workers, but bad for corporate profits. And if inflation picks up too fast, the Federal Reserve may need to raise interest rates faster than planned.

And the biggest concern here, this is a bond market story. The bond market has been telling us the economy is doing so great. So great. Interest rates are now rising. That the Fed is going to have to do something to keep it from overheating. Bond yields move opposite to price. Yields hit a four-year high on Friday. As yields go up bonds offer better in returns, making them much more attractive to investors and risky stocks. So you buy bonds. You sell stocks.

But even if the stock drops again today, there is a chance -- no chance really of a crash or a panic here. Stocks have not really hit yet a 10 percent drop or correction. And a correction is long overdue. And conditions are still good. The economy is strong. The job market is robust. Corporate earnings are on the rise you finally have this moment where the stock market which is going up and up and up.


ROMANS: Is now saying, OK, wait a minute. Wait a minute. Maybe things are too rich there.

BRIGGS: It's still the Dow up 33 percent since Election Day.


BRIGGS: But if you're responsible for the gains, are you then responsible for the losses?

[04:35:04] ROMANS: Well, so this is what -- you know, in my history and experience covering markets, it's very rare for presidents to take credit for stock market gains because then you own the losses, too. Right? And that was a very big down day for stocks.

I think you'll probably see the White House start to try to sound more presidential about markets because it's not the president's fault the market fell. Just like it's not the president's -- you know, he doesn't get the credit for a big day up day. So we'll see if he starts to be a little more presidential in how he behaves with the markets.

BRIGGS: Sarah Sanders said the fundamentals of the economy remains strong.

ROMANS: And they are.

BRIGGS: And they are.

ROMANS: And they are.

BRIGGS: OK. Also President Trump's lawyers urging him not to sit for an interview with Special Counsel Robert Mueller. "The New York Times" reporting the president's attorneys are concerned he might incriminate himself by making false statements. CNN reported last week the Trump legal team arguing the special counsel's office has not met what it considers the high threshold for a face-to-face interview with the president. President Trump said last month he's eager to speak with Mueller and willing to do it under oath.

This morning, the Democrats, their memo pushing back against the Republican Nunes memo now sits on President Trump's desk. The House Intelligence Committee voted unanimously last night to make public the Democrats' rebuttal to the GOP claims the FBI abused surveillance laws.

The president now has five days to decide whether to declassify the new memo. But Democrats raising concerns that the president may play political games with their memo.

More now from CNN's Pamela Brown at the White House.


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. Pamela Brown, at the White House. Thank you, Pamela.

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.

A source tells CNN Bannon is 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: 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.


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: You know? Can we call that treason? Why not? I mean they certainly didn't seem to love our country very much.


ROMANS: For the record, the Constitution defines treason as an act of levying war against the United States or in adhering to their enemies giving them aid and comfort. Sitting silently is not treason. In other words, attempting to overthrow the government by teaming up with the enemy.

BRIGGS: Steve Bannon knows all about that word, treason. The president's comments met with a blunt rebuttal from Democrats like Rhode Island Senator Sheldon Whitehouse.


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.


BRIGGS: Illinois Senator Tammy Duckworth added to that sentiment, quote, "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."

[04:40:05] ROMANS: All right. In less than 72 hours, the federal government runs out of money. Yehey. House Republicans planning to vote on another short-term spending bill that keeps everything running through March 23rd. Now the measure has a sweetener attached. One full year of Defense spending. Republicans believe that gives them a chance to push the bill through without help from Democrats. But it has little chance of passing the Senate.

BRIGGS: And immigration reform remains influx. Senators supposed to debate and vote on major immigration legislation for the first time in years but Republican leader Mitch McConnell has been silent and members of both parties say they have no idea what he is planning. The White House has rejected the latest bipartisan effort from Senators Chris Coons and John McCain to protect Dreamers and improve infrastructure and technology at the border.

Pennsylvania's congressional maps likely headed for a makeover. The U.S. Supreme Court rejecting a 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. The 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 on the 2018 midterm elections where GOP control of the House is on the line.

ROMANS: All right. Colorado's governor says enough is enough after the third fatal shooting of a police officer in six weeks. Now another widow and 7-year-old twins are left in mourning.


[04:45:52] ROMANS: 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 come together and say enough is enough.

BRIGGS: 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. While he's not obligated to submit to an interview, the Los Angeles County Sheriff's Department does want to hear from him.


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.


BRIGGS: CNN's calls to Wagner's representatives were not immediately returned.

ROMANS: Wood drowned in November 1981 while boating off Southern California with Wagner and friend, Christopher Walken. She was 43 years old at the time. In 2012, the L.A. coroner changed Wood's cause of death from accidental to undetermined.

BRIGGS: Disgraced former USA Gymnastics doctor Larry Nassar sentenced to one final time for decades of sexually abusing girls and young women. Nassar received an additional 40 to 125 years in prison. At a hearing in Eaton County, Michigan, Monday Nassar apologized saying victim statements had, quote, "impacted me to my inner most core," while acknowledging that it pales in comparison to the pain of his victims.

ROMANS: The judge citing Nassar's earlier claims of no wrongdoing sentenced him to another lengthy prison term saying he was in denial.


UNIDENTIFIED FEMALE: You will be left to sit there with only the memories of destroying your own family and I do not believe that you will have the ability to shut all the words of the children and the young women and the adults who trusted you and who you let down. That will be your lifetime consequences.


ROMANS: The Eaton County sentence will run concurrently with the 40 to 175 years sentence handed down in Ingham County, Michigan. Nassar will serve both sentences after a separate 60-year sentence in federal prison for child pornography.

And this story is not over because there is a lot of investigation now into how many adults and how many people in law enforcement were warned, sometimes beseeching from parents and some of these young women saying something is wrong here.


ROMANS: And nothing happened.

BRIGGS: Yes. Looks like there was abuse going on at the time the FBI knew of --

ROMANS: That's right.

BRIGGS: Some of these allegations.

Well, 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.

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.

ROMANS: Tragedy.

BRIGGS: It is indeed.

All right. On the flipside of that NFL news, Philadelphia will honor Super Bowl champion Eagles with the parade on Thursday. It's expected to start around 11:00 a.m. The victory parade route begins in South Philadelphia near Lincoln Financial Field and ends at iconic Philadelphia Art Museum.

City officials expected to announce more details this morning. All Philadelphia school districts and administrative offices will be closed Thursday. The schools superintendent in a statement reminding students that everyone should be in school on time and ready to learn on Friday.

Congratulations to everyone. Still celebrating in Philly. ROMANS: All right. 49 minutes past the hour. Fans across the

country 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."


[04:50:09] JOHN MAHONEY, ACTOR, "FRASIER": I 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.



ROMANS: He starred on screen and on stage, you know, he 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.

All right. 50 minutes past the hour. The Dow had the single biggest day decline ever. Shedding, get this, 1,175 just under 5 percent. Is it going to continue today? CNN Money Stream next.


[04:55:19] ROMANS: Let's get a check on CNN Money Stream this morning. The stock market selloff is not over yet. Global stocks are jittery after Wall Street's epic plunge. Markets in Tokyo, Hong Kong all down. Europe opened a couple of hours ago. Europe is lower as well. But look at Dow futures on your screen, they're up a little bit. They propped higher.

Overnight they had been down 700 points. So it gives you a sense of just how kind of volatile it is right now. The Dow is now down about 8.5 percent from its all-time high. More details at the top of the hour.

Lululemon CEO has resigned after the company claims he fell short of its standards of conduct. It did not specify exactly how he fell short, only that it expects all employees to exemplify the highest levels of integrity and respect. Lululemon did not respond to our request for further comment. The CEO has Lululemon there since 2014.

Google's Waymo and Uber finally have their day in court and the result could shape the future of self-driving cars. It's been one year since Waymo accused Uber of stealing autonomous vehicle technology. It claims Uber cheated to get ahead of the self-driving car race. Uber denied the accusation calling it a conspiracy theory. The trial expected to take two weeks.

BRIGGS: Vice President Mike Pence en route to Asia right now for the Winter Olympics. Overnight the vice president 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 until the opening ceremony. They pulled more than 1200 security guards after they all came down with a virus.

For the latest, let's turn to Ivan Watson live in Pyeongchang.

Good evening to you, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. Good morning, Dave. That's right. The vice president, Mike Pence, he's making stops on his way to the opening ceremony here in Pyeongchang, which is in just a few days time. And he's making it clear that the theme of his trip is try to continue to put pressure on the North Korean regime, even though it has agreed to last-minute diplomacy with South Korea and has agreed to send quite a large delegation to these Winter Olympics here.

He wants to highlight the dismal human rights record in North Korea. He is bringing along the grieving father of the U.S. university student Otto Warmbier who died in a coma, died of brain damage after being held in detention in North Korea for more than a year. But curiously, Vice President Pence seemed to leave the door open to the possibility of talks, though the U.S. side has made it clear that there are no requests for any kind of sit-down meeting here in Pyeongchang.

As Pence makes his way here, the North Koreans are arriving in large numbers. Not only some 22 athletes who are already in training here, but a ferry boat just arrived carrying 140-member art troupe on the South Korean coast. They were met by anti-North Korean protesters from South Korea. Some of them are holding up signs of the portrait of the North Korean leader Kim Jong-un with his face crossed out in black.

There is another delegation arriving tomorrow by land. That's going to include more than 200 cheerleaders and a tae kwon do demonstration team. North Korea state media continuing its real insulting criticism of President Trump himself, calling him an old lunatic and rejecting criticism he's made of North Korea's human rights record.

Meanwhile, an unexpected hiccup here in Pyeongchang. Authorities here say that there's been an outbreak of this norovirus also known as Winter Vomiting Bug. 41 guards came down with it. Acute diarrhea and nausea. They've had to swap out some 1200 guards and bring in 900 more, and begin disinfecting buses, accommodations and sporting facilities to try to stop its spread -- Dave.

BRIGGS: Yikes. All right. We also learned Ivanka Trump will head to Pyeongchang for the closing ceremony.

Ivan Watson, live for us, 7:00 p.m. there.

EARLY START continues right now with the latest on the markets and where we're headed today.

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: It's very likely simply that ebb and flow of our stock market.


ROMANS: The White House attempts to ease jitters after a record selloff on Wall Street. The gains of 2018 vanished. A remarkable split screen as the president touts the strong economy in Ohio. Four and a half hours until the Opening Bell. Global markets are open and they are down.

BRIGGS: The president's lawyers reportedly concerned he could incriminate himself if he is interviewed by the Russia special counsel. Now they're trying to sway him against the sitdown with Robert Mueller.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Somebody said treasonous. I mean, yes, I guess why not?


ROMANS: The president --