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First Move with Julia Chatterley
Investors Remain Cautious As Data Disappoints And Bond Yields Fold; President Trump Will Travel To Ohio And Texas, The Site Of The Weekend's Mass Shootings; SoftBank's Tech Fund Helps The Company Post A Big Earnings Beat. Aired 9-10a ET
Aired August 07, 2019 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE. And here's your need to know. On edge.
Investors remain cautious as data disappoints and bond yields fold. Paying tribute. President Trump will travel to Ohio and Texas, the site of the
weekend's mass shootings. And a clearing vision, SoftBank's tech fund helps the company post a big earnings beat. It's Wednesday. Let's make a
move.
Welcome to FIRST MOVE once again, where Central Banks dominating the trading day yet again. Up first, the Chinese gently lowering the value of
their currency, yet again, but arguably the biggest news rate cuts from India, New Zealand and Thailand. Stimulus galore anyone. U.S. futures
meanwhile currently lower. They flipped in the last hour. So, there's clearly still a lot of nervousness out there and poor data -- we'll get to
it -- despite the bounce in stocks that we saw yesterday.
We did take back half of Monday's three percent plus losses for U.S. majors on Tuesday. Following that sharp move lower of course in the
Chinese yuan that created some of the concerns out there. Traders are going to remain sensitive to now, to that currency fix as it's called.
This is the midpoint around which the Chinese yuan then moves.
As mentioned, we are seeing a little bit weakness today with trading around 11-year lows right now. Now remember, the Central Bank told exporters
yesterday that the currency won't fall any further and we really have to gauge the move, I think over for a longer period of time.
The weakening that the Chinese do here has to look like it's under control. It's controlled a controlled descent. The big picture here, though, on
what China has argued that this is simply catch up and amid a sea of weakening global currencies and historically low bond yields.
Are the currencies in the region weakened? So why not China's? I'd argue they have a point and I'll keep arguing it especially in light of the news
I mentioned overnight. New Zealand cutting rates by half a percentage point today, double what was expected.
The Central Bank said rates could even move into negative territory. The New Zealand dollar now trading at a three and a half year low. Next up the
Australian dollar. Right now, sitting at a 10-year low on anticipation that Australia could cut rates here, too.
We also have both India and Thailand also chopping rates. Forget about the trade war and the currency wars, guys. Let's call it a race to zero rates
wars. Let's get to the drivers.
Clare Sebastian joins me now. Clare, let's talk about China first. I think the bottom line is investors. The markets are simply going to be
watching that fix for the Chinese currency every single day now to gauge whether it's weaker, whether it's stronger and what's going on over there.
SEBASTIAN: Yes, absolutely, Julia. I think the market is now on eggshells over this regardless of whether or not this is a serious, aggressive
competitive devaluation by China, which is far from clear, if you talk to analysts -- not at least -- because China has been trying to shore up their
currency.
They don't want to be dependent on exports. They want to transform their economy into something that is also driven by the consumer. But investors
are continuing to watch this closely, not least because this underscores also the potential for an asymmetric response by China to the tariffs that
the Trump administration has now threatened.
So, here we have a market that is really trying to assess the implications of this escalation, we saw that futures shifted about an hour before, but
even when they did that, even when futures were higher, we still saw this flight into safe havens, gold still at multiyear highs, bond yields around
the world are falling.
So this is a market that is really very nervous, perhaps an overreaction, but still very sensitive to these headlines.
CHATTERLEY: Yes, it's fascinating, isn't it? I made the point yesterday that you've got negative interest rates for the Danish Central Bank, the
Swiss Central Bank, the European Central Bank, we've had a whole host of Central Banks cutting rates.
The President on Twitter this morning saying, look, we're not the problem, the Federal Reserve is and actually they should be cutting rates further.
Where does this end?
SEBASTIAN: Well, I mean, this is starting to look like a real problem Julia, because now you have what is an alarming feedback loop between trade
policy and monetary policy? The Fed says, you know, we have nothing to do with trade policy. That is the preserve of the government. We don't
comment on that.
But here we have, you know, the potential for monetary policy to start to react if this escalation happens. Could we see a more aggressive rate cut
from the Fed in September? Could that prompt Central Banks around the world to act even more aggressively? The President on Twitter,
perpetuating this potential feedback loop, and then the question is, is monetary policy even the right way to do this?
[09:05:07] SEBASTIAN: James Bullard, the St. Louis Fed President saying this week that, you know, U.S. monetary policy cannot reasonably react to
the day-to-day give and take of trade negotiations because of course, monetary policy comes with a lag. They may not know until it's too late if
they've made a mistake, and that could make the entire situation with global growth slowing even worse.
CHATTERLEY: Yes, it's too noisy. If you react to it, you would be reacting every single day and that's part of the problem. Clare Sebastian,
thank you so much for that.
All right to Japan now. Japan's SoftBank delivering a solid earnings beat driven by a surge in profits from its $100 billion tech fund. Sherisse
Pham has more. Sherisse, no wonder they're launching tech fund mark two, quite frankly. But for me, this was a tale of two halves. The Vision Fund
doing really well, but when you look at the legacy businesses like Sprint, it remains a real battle here. Talk us through it.
SHERISSE PHAM, CNN BUSINESS REPORTER: Yes, that Sprint investment seems to continue to be an albatross around Masayoshi Son's neck, right? But today,
this really seemed to be a company that was trying to position itself as once and for all an investment powerhouse.
Masa Son saying at one point, we are an investment company, as soon as we get Sprint off of our books. So he was saying that the Sprint merger with
T-Mobile is going to go forward. And very soon that will no longer be a subsidiary. And then once that is completed, he will have the money and
the time to focus on what he really wants to do, which is just be a massive influence in Silicon Valley and in tech startups.
So we did get some more details today on Vision Fund 2. We talked about this last time. We both noted that when the announcement of Vision Fund 2
came out last month, there was no mention whatsoever of Saudi Arabia in that press announcement.
Today, we're getting a few more details on that he said that Saudi Arabia and Abu Dhabi Sovereign Wealth Fund, both expressed interest in investing
in Vision Fund 2 and that the negotiations with those two entities are ongoing, so really the clearest signal yet that we got from Masayoshi Son
is that he'd be willing to work with Saudi Arabia again, this of course, quite interesting, given that Kingdom's ties to the killing of Jamal
Khashoggi and Masa Son stepping away and distancing himself from Saudi Arabia when that happened, now, saying, look, we are in no position to know
the details of that incident, and we are talking to the Kingdom about a possible investment in Vision Fund 2.
CHATTERLEY: Yes, fascinating, wasn't it? Because I remember very clearly, the two of us talking about this, putting great pains into the effort, I
think overnight to make the point that they're very willing to take Saudi Arabia money here.
But actually very willing to take any money, quite frankly. Because there's been lots of questions being asked about, actually what firm
commitments to this fresh $108 billion fund that's been announced that they've actually got right now other than the $38 billion that SoftBank is
putting in themselves. What do we know about that, Sherisse?
PHAM: Masa Son did address that news report today saying, hey, look, we read some news reports today questioning the $108 billion we said had been
attached to VF2 -- Vision Fund 2 -- through memorandums of understanding. He said that the memorandums of understanding if they were included in the
announcement last month, they are included with a certain amount pegged to that MOU and those amounts all add up together to $108 billion.
So he was batting down those reports, pushing back on those reports and took it even a step further saying look, we're still in conversations with
other investors. To your point, it looks like they're willing to take money from anybody and Masa Son said today, we are likely going to exceed
that $108 billion target that we set out last month, at one point showing a slide showing Vision Fund 1 at $10 trillion; Vision Fund 2 -- 10 trillion
yen, excuse me -- Vision Fund 2 at 12 trillion yen. I believe that works out to about $113 billion.
So he is really just kind of upping the stakes here saying, we've got the money, we've got the investment and we are ready to be a tech powerhouse.
And also, he gave us a few more details on timing saying that VF2 will probably start launching and rolling out in the next few months because
Vision Fund 1 is soon going to be exhausted -- Julia.
CHATTERLEY: So basically sprinting to the finish line of Vision Fund 2 even if Sprint is going nowhere fast to sprint itself. I know, I'm trying.
Sherisse Pham, thank you so much for that update there.
PHAM: Love the pun.
CHATTERLEY: I know. A little bit of Disney Magic now wearing off after the latest results of missed expectation. Shares actually in Disney right
now down some five percent premarket. The company is making a costly push into streaming. And it's just announced a big subscription package for its
upcoming Disney Plus service.
Brian Stelter is with us. Brian, great to have you with us. We'll dig into the details of the actual performance here. But let's talk about
bundling because I make that when you add the Disney package, the Hulu package, the ESPN $12. 99, that's bang in line with Netflix's standard
package still cheaper than their premium. What a coincidence.
[09:10:37] BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes. And you know, Bob Iger tried to say this was not a coincidence. But come on, Bob,
we know what you're up to. You're doing the right thing.
I think Wall Street analysts think this is a right move to provide these Disney streaming services at a relatively low cost at first, get as many
subscribers as you can, and then over time, probably gradually raise the price. That is certainly what hasn't worked for Netflix. And it's what
other companies are attempting.
So we know that in November, this bundle will come out. It'll be Hulu, Disney Plus, and ESPN. Plus, you'll be getting a lot of programming and
some sports all as you said for $12.99. That's the new offer from Disney. And I think it's going to be a very competitive offer in the market.
CHATTERLEY: Absolutely. Now let's talk more about what we got from the results, too. Because to Bob Iger's point, he said, "Look, guys, this time
it's complicated." Bitter disappointment on the theme parks including "Star Wars," people thought it would be busy and kept away which I thought
was a quite fascinating reason for what was going on there.
But also Fox, some disappointment, some digestion issues here with the Fox assets and the idea that perhaps people were just sitting on their hands
over there for a while and waiting for this deal to go through and not doing very much for a pretty long time.
STELTER: And if that is what happened, that's not the first time we've seen something like that happened during this lengthy merger and
acquisition period. You know, it takes a long time for these deals to get done.
It does affect companies. It does affect the companies that are being bought, you know, in this case, it is the Fox Film assets that really
underperformed. The film called "Dark Phoenix" that was really expensive. That was a bomb in the box office that actually hurt Disney's overall film
earnings; otherwise, it had a very strong quarter with the "Avengers" et cetera. So there was some weakness from the newly acquired Fox assets.
I think the message from Disney is some pain now, some pleasure later. Yes, we've taken over Fox, it's taking getting used to. There are some
underperforming parts of the company and it continues to be a factor on the cable side.
However, there will be pleasure down the road. There will be success down the road now that we have this broader, bigger company. I think that's the
message to Wall Street. We'll see how they react.
CHATTERLEY: We shall see. Brian Stelter, thank you so much and great to have you on the show.
All right, let me bring you up to speed now with some of the other stories making headlines around the world. CNN has exclusively obtained video from
a bar in Dayton, Ohio, where a gunman spent more than an hour before he killed at least nine people early on Sunday.
It shows him entering the bar with his sister and a second companion. He is wearing a t-shirt and shorts, not the body armor or mask seen during the
massacre. The gunman's sister was among the people he killed.
Dayton is one of the two cities that witnessed a mass shooting over the weekend. The other is El Paso, Texas, where at least 22 people died.
President Trump will visit both cities today setting off at Dayton in this hour, but not everyone is happy that he is coming.
Joe Johns is at the White House. I know the Mayor of Dayton, Ohio, Nan Whaley had some pretty fierce comments to make. She said she would tell
the President how "unhelpful" quote, he has been. Joe, what are we expecting here?
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: A lot of controversy there. And the fact of the matter is, the White House has kept its plans
on these trips to these two cities very closely held. They haven't given us a lot of information about what the President plans to do.
Typically, in situations like this, he will meet with first responders and meet with city officials, perhaps others to try to get a handle on what
they're doing; also, expected to issue his condolences to the communities as well as the families.
However, as you said a lot of controversy there, simply because some people don't want him coming. Probably all of this has crystallized in the back
and forth between the President and the Democratic Presidential candidate, Beto O'Rourke, who is also a former Congressman from the State of Texas.
O'Rourke saying on Twitter, pretty, you know, strongly that he doesn't think the President ought to be coming there to El Paso. The President
pushing back very hard with some insults on Twitter against Beto O'Rourke, but others as well have said they're not sure they want the President
there.
Nonetheless, the Mayor of El Paso we are told does expect to greet the President in his official capacity as you know, mayors have to participate
in sort of the ministerial duties, especially at a time like this.
[09:15:10] JOHNS: The President is supposed to be the Consoler-in-Chief in the midst of quite a bit of controversy down in Texas. The President's
first leg beginning just a little while, though, is off to Dayton, Ohio -- the scene of the shooting there also over the weekend -- Julia.
CHATTERLEY: Yes, Joe, you know, it's interesting. I saw on "Axios" today they're saying, actually, gun violence has displaced immigration now as the
most talked about news topic on social media for the first time, actually, in the United States since May.
Do we hear anything more on perhaps what action can be taken here? Because you do get a sense of a sort of swelling of public opinion right now that
things can be tightened up without liberties that certain parts of the country will defend to the hilt here, quite frankly, things can be done
without upsetting too many people here. And actually, that's where public opinion is heading right now.
JOHNS: That's absolutely right, and one thing you have to note is the polls over the last several years, indicating again and again, across the
country, people saying that they do support the idea of some limited gun control that at least would be the background checks, which is something
the House of Representatives has passed an expansive bill to essentially make it against the law to give someone a gun without a background check no
matter who they are. That would be a significant strengthening and gun control laws.
It wouldn't necessarily have stopped either of the crimes that occurred over the weekend. Democrats have been pushing the United States Senate for
all of them to come back into emergency session. They're on vacation right now to try to push something through.
However, the Senate Republican leader, the Majority Leader, hasn't committed to that, but he has signaled some momentum by saying yes, he'd
like to at least get his Committee Chairman looking at some proposals that might be possible -- Julia.
CHATTERLEY: Yes, Joe Johns at the White House. Thank you so much for joining us. And the President is leaving the White House as we speak. He
stopped and made remarks. We will bring you those as soon as we get them. For now, we'll move on.
A suicide car bomb attack in Afghanistan's capital has killed at least 14 people including four police. Nearly 150 people were wounded. The blast
happened outside a Kabul police station during the morning rush hour. Taliban rebels have claimed responsibility.
British Airways has cancelled more than 100 flights due to a computer outage. Thousands of travelers have been affected at London's two main
airports -- Heathrow and Gatwick. The airlines says customers will be able to rebook their flights between August the 8th and the 13th. No idea yet
on what caused the failure.
All right, we're going to take a quick break, but coming up, after years of sluggish sales for AstraZeneca, find out how the last few quarters turned
out to be just what the doctor ordered and why.
Plus the company that gave us the Model T takes on Tesla. Why Ford is saying Elon Musk isn't the only disruptor in town. All that coming up,
after this.
(COMMERCIAL BREAK)
[09:21:24] CHATTERLEY: Welcome back to FIRST MOVE where we are eyeing a lower open on Wall Street. Futures now down around one percent after the
S&P and the NASDAQ broke a six-day losing streak on Tuesday, U.S. yields also falling again as the global flight to quality continues.
The 10-year yield has hit a fresh multiyear low, as you can see there 1.63 percent. We've been talking a lot on this show about just how investors
can find return in a world of ultra-low and negative rates, gold is rising. It is now trading at over $1,500.00 an ounce and up over 17 percent year-
to-date.
Bitcoin up some 200 percent year-to-date. It has been trading over $12,000,00 today, still a far cry from its all-time high of over $19,000.00
and of course some pretty choppy trading in that, too.
Joining us now, Mona Mahajan. She is the U.S. Investment Strategist at Allianz Global Investors.
Mona, what are you thinking at this moment? We're what? Five to six percent off record highs in U.S. stocks, but there's a lot of nervousness
out there clearly.
MONA MAHAJAN, U.S. INVESTMENT STRATEGIST, ALLIANZ GLOBAL INVESTORS: Yes, absolutely. You know, I think the story today in particular, and more
broadly is the global yield picture.
You know, we saw last night, three Asian central banks surprisingly cut rates more than expected -- India and New Zealand and Thailand. What we're
seeing in U.S. yields as you just pointed out, fresh all time or near year lows. What that is really telling us here is that the global picture is
slowing.
And when you think back to what Jerome Powell told us back in July, what he is worried about is one uncertainty around trade, which has escalated
recently, and then two, slowing global growth, which has come to bear as well as we're seeing a lot of these risk assets globally.
You know, keep in mind, like you mentioned, we are down about six percent on the S&P, in line with a standard correction of five to 10 percent.
What we're really watching going forward is whether or not the U.S. can decouple to some extent or withstand what's happening globally and in
trade.
Our picture or our economy is largely based on the consumer, and the consumer thus far has held up well. So, what we'll be watching closely to
see whether or not this correction becomes something more severe is if the consumer actually buckles under this pressure as well.
So I think, you know, over the next few weeks we will be watching that data. There is a bit of a void given earnings season is winding down here.
The next Fed meeting isn't until mid-September.
And so in the interim, what's filling that void are these headlines around trade and, you know, global growth. And so I think, you know, for us in
particular, what we're watching is the U.S. and the U.S. consumer.
CHATTERLEY: Is there a disconnect here? Because if you look at what's going on in the United States in terms of the bond markets and the pull
lower here for bond yields, but also globally. I said earlier on the show we've got a race to zero or race to negative rates and while you've got the
United States and the Federal Reserve talking about insurance rate cuts, it feels like everybody is now doing the same because no one wants to get
caught with a weakening economy and not taking action here.
Are Central Banks being over aggressive here in making insurance cuts here to protect against a slowing growth that right now actually we can't gauge
because of the lack of knowledge about what's going on over trade.
MAHAJAN: Yes, you know, I mean, it's an interesting point you're making because clearly over the last 10 years post-crisis, Federal Reserve at the
Feds funds rate was held near zero for nearly seven years, and that did not really do much to pick up either growth or stimulate inflation clearly.
And that's the same case with, you know, Central Banks globally -- the ECB, the Bank of England -- everyone has held rates pretty low. And we have yet
to see that positive impact on growth and inflation and so I think you know, what's happening right now is not a race to zero necessarily, I think
clearly not in the U.S., perhaps more abroad.
But I do think that there has been historical relationships between yields and yield spreads. And so, I think that still kind of remains connected.
Our 10 year yield, the U.S. 10-year yield does get anchored downward when global yields are falling. So it's something to keep in mind.
[09:25:32] MAHAJAN: What that also does more broadly for risk assets is it pushes investors out the risk curve. So you know, it's the Tina effect,
there is no alternative if you can't get yields from government or Treasury bonds, you go into equities, you go into riskier parts of fixed income.
So that could be a trade that we continue to see particularly if you know the U.S. economy does at some point stabilize.
CHATTERLEY: Yes, as the stock markets ultimately benefit because the returns looks so much better here. The dividends that they provide look so
much better.
MAHAJAN: Yes.
CHATTERLEY: What are you telling clients because there is a lot of talk right now about alternative assets like putting more money into gold, like
putting money into Bitcoin? What do you think about, Mona?
MAHAJAN: Yes, you know, generally you know, what we're telling clients is to stay up in quality, stay defensive here, but to some extent, stay
invested.
Historically, you know, when the Fed does cut and does, you know, undertake insurance rate cuts and the economy is not headed into a recession, the
market outcome is positive.
For areas like a Bitcoin, you know, for us that's more speculative. We would put that in, you know, your Mad Money basket rather than a core
investment position.
But I do think an area like gold or real assets in general, can actually be a safe haven in a time when yields are falling pretty dramatically and
there is uncertainty around, you know, where the value might be held up.
So, I think we're positive on real assets like gold, we continue to be positive on areas like up and quality fixed income. If you're looking for
-- you know, there's this hunt for income going on more broadly, areas like convertible preferred bonds, but even selectively areas of European and
Asian high yield for U.S. dollar investors remain interesting. In equities we continue to prefer the U.S. as best in class right now.
CHATTERLEY: Yes. In the battle of the uglies, the U.S. wins. Mona, fantastic to have you with us. Mona Mahajan.
MAHAJAN: Thank you.
CHATTERLEY: From Allianz Global Investors. All right, the market open is next. Stay with us.
(COMMERCIAL BREAK)
[09:30:00] CHATTERLEY: Welcome back to FIRST MOVE. I'm Julia Chatterley live from New York. We've just had the opening bell over at the New York
Stock Exchange and as anticipated, U.S. stocks beginning the session firmly lower this morning after today's bounce back rally.
Today's fresh wave of volatility comes as Central Banks in India, New Zealand, Thailand, all cutting rates and global bond yields continue to
come under pressure.
President Trump made a note of today's Central Bank action in a series of tweets today. He said the Fed should do the same and cut quote "bigger and
faster." He says the Federal Reserve is too proud to admit its mistake of tightening too much.
Meanwhile, over in Europe, stocks are trading pretty mixed right now. German stocks are high despite an awful read on German industrial output,
which failed by a much greater than expected one and a half percent in June. German bund yields falling to fresh record lows today, too, amid new
fears that Germany is heading towards recession and of course, the greater likelihood perhaps of stimulus coming from the European Central Bank, too.
As you can see, yes, the Swiss Central Bank in fact, negative yields over there and the Swiss Stock Market underperforming, too.
What about the global movers though this morning. Disney down some 5.7 percent at the open here. The media giant's profits falling and revenues
missing expectations in Q3. CEO Bob Iger blamed the ongoing integration of Fox entertainment assets after Disney bought it in that $71 billion deal.
The company also announced a big subscription package for its upcoming Disney Plus service, too, bang in line as we mentioned earlier on in the
show with Netflix amount, the standard package $12.99.
What about Teva Pharmaceutical, also down at just over six percent. The Israeli company said its Finance Chief is stepping down for personal
reasons. The company has begun the search for a replacement. Michael McClellan will stay in the post through the third quarter.
Match Group higher by more than 15 percent after the company reported an exploding user base for the dating app, Tinder. Tweaks to its product saw
over 40 percent growth in its average subscriber base in the last quarter.
All right back to our top stories. Concerns over global growth are intensifying after three Central Banks slashed their rates overnight.
India Central Bank cut for the fourth time this year. New Zealand surprised the market with an aggressive half a percentage point cut and
Thailand cutting rates, too. That, of course, on the Bank of China lowering the value, the fix of the Chinese yuan, yet again, just slightly,
but it was lower.
The key concern for investors, the U.S.-China trade war that shows no sign of coming to an end here. Kevin Rudd is the President of the Asia Society
and the former Australian Prime Minister, and he joins us now. Kevin, always fantastic to have you on the show.
Even as recently as a month ago, you were saying look, some kind of trade deal here and I catch myself, it's still possible. Have the odds changed
in your mind, in light of what we've seen just over the last 48 hours.
KEVIN RUDD, PRESIDENT, ASIA SOCIETY: Well, we always rely upon President Trump to raise the degree of political difficulty, and he has done
precisely that in terms of securing a trade deal. So, by year's end, is it still possible that we'll have a U.S.-China trade deal? I think so. Has
it slipped just below 50 percent probability? Yes, it just has. Because of the President's two most recent decisions on 10 percent tariff here,
plus the declaration of the Chinese as currency manipulators.
But the bottom line logic, I think still remains. It's in the underlying economic self-interest of both governments and both Presidents to get this
deal done.
CHATTERLEY: A lot of the debate centers around who can hold out longer here, and whether or not the Chinese are looking at the situation and
saying actually, the closer President Trump gets to the election in 2020, the more willing he will be to give concessions in order to get a trade
deal.
You know, the Chinese incredibly well, do you think that's the way that they're looking at the situation here?
RUDD: I think the Chinese government and those who advise it are as confused --
CHATTERLEY: Kevin, I'm going to have to stop me there, actually. I apologize. We do have some comments here from that President Trump that
we're going to listen into. Let me pass you over to him now.
[09:35:04] DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And then we're going to El Paso and we'll be meeting with first responders, law
enforcement, some of the victims, and paying my respects and regards. I'll be going with the First Lady. And it's a terrific opportunity really to
congratulate some of the police and law enforcement, the job they've done was incredible, really incredible.
QUESTION: President -- Mr. President, no doubt, I don't think nobody could argue, this is a difficult time in our country for all of us. So,
from your heart, from your mind, what do you say to your critics that believe it's your rhetoric that is emboldening white nationalism and
inspiring this anger?
TRUMP: So, my critics are political people. They're trying to make points. In many cases, they're running for President and they're very low
in the polls. A couple of them in particular, very low in the polls.
If you look at Dayton, that was a person that supported, I guess you would say, Bernie Sanders, I understood. Antifa, I understood. Elizabeth
Warren, I understood. It had nothing to do with President Trump.
So these are people that are looking for a political gain. I don't think they're getting it. And as much as possible, I've tried to stay out of
that.
(CROSSTALK)
QUESTION: Mr. President, (INAUDIBLE) to tone down the rhetoric. Do you agree with to that?
TRUMP: Well, I do agree. But I think we have toned it down. We've been hitting -- we've been getting hit, left and right, from everybody. Many of
the people, I don't know. A couple of people from Texas -- political people from Texas that aren't doing very well, I guess.
Somebody said the Mayor. I had one very nice conversation with the Mayor of Dayton. It could not have been nicer. And then she goes and says -- I
tried to call her. Well, I spoke to her. And I didn't receive any call. So they're trying to make political points.
I don't think it works because, you know, I would like to stay out of the political fray. As I was saying, and has just came out, the Dayton
situation, he was a fan of Antifa. He was a fan of Bernie Sanders and Elizabeth Warren. Nothing to do with Trump. But nobody ever mentions
that.
(CROSSTALK)
QUESTION: (INAUDIBLE)
TRUMP: Say it?
QUESTION: (INAUDIBLE)?
TRUMP: No, I don't blame Elizabeth Warren and I don't blame Bernie Sanders in the case of Ohio. And I don't blame anybody.
I blame -- these are sick people. These are people that are really mentally ill, mentally disturbed. It's a mental problem.
And we're going to be meeting -- we're going to be meeting with Members of Congress. I've already got meetings scheduled, and I have had plenty of
talks over the last two days. And I think something's going to be come up with. We're going to come up with something that's going to be, really,
very good. Beyond anything that's been done so far.
(CROSSTALK)
QUESTION: (INAUDIBLE)?
TRUMP: Well, we're going to see where we are. We're dealing with leadership right now. And, you know, you have two sides that are very
different on this issue. And let's say all are good people, but two sides that are very different.
If we get close, I will bring them back. But it has to be -- you know, we have to see where we are with leadership.
(CROSSTALK)
TRUMP: Normally, this has been, really, a decision -- Congress gets together and they try and do something. But if you look over the last 30
years, not a lot has been done.
(CROSSTALK)
QUESTION: (INAUDIBLE) background check bill (INAUDIBLE) in the House. What could you support?
TRUMP: Well, I'm looking to do background checks. I think background checks are important. I don't want to put guns into the hands of mentally
unstable people or people with rage or hate, sick people. I don't want -- I'm all -- I'm all in favor of it.
(CROSSTALK)
QUESTION: What about (INAUDIBLE)? What is your position on that?
TRUMP: Well, I can tell you that there is no political appetite for that at this moment. If you look at -- you could speak, you could do your own
polling, and there's no political appetite, probably, from the standpoint of the legislature. But I will certainly bring that up. I'll bring that
up as one of the points.
There's a great appetite -- and I mean a very strong appetite -- for background checks. And I think we can bring up background checks like
we've never had before. I think both Republican and Democrat are getting close to a bill on -- to doing something on background checks.
(CROSSTALK)
QUESTION: (INAUDIBLE) between the U.S., South Korea and Japan, exporter list?
[09:40:02] TRUMP: Yes. South Korea and I have made a deal. They've agreed to pay a lot more money toward the United States. As you know,
we've got 32,000 soldiers on South Korean soil, and we've been helping them for about 82 years and we get nothing. We get virtually nothing. And
South Korea and I have made a deal where they're paying a lot more money, or they're going to pay a lot more money.
The relationship is a very good one. But I felt all along, I felt for years, it was a very unfair one. So they've agreed to pay a lot more, and
they will agree to pay a lot more than that. And we're with them. We're with them.
(CROSSTALK)
QUESTION: Would you consider a ban on (INAUDIBLE)?
TRUMP: So, you have to have a political appetite within Congress, and so far I have not seen that. I mean, I can only do what I can do.
I think there's a great appetite to do something with regard to making sure that mentally unstable, seriously ill people aren't carrying guns, and I --
I've never seen the appetite as strong as it is now. I have not seen it with regard to certain types of weapons.
(CROSSTALK)
QUESTION: Mr. President, how (INAUDIBLE)? What are you going to do about it?
TRUMP: I am concerned about the rise of any group of hate. I don't like it. Any group of hate, I am -- whether it's white supremacy, whether it's
any other kind of supremacy, whether it's Antifa, whether it's any group of hate, I am very concerned about it, and I'll do something about it.
(CROSSTALK)
QUESTION: Mr. President, (INAUDIBLE)?
TRUMP: No, I don't think my rhetoric says it all. I think my rhetoric is a very -- it brings people together. Our country is doing incredibly well.
China is not doing well, if you look at the trade situation.
China just admitted yesterday that they've been a currency manipulator. First time they've ever been called out. Companies are moving out of China
by the thousands, and our country is doing very well. We're going to see how it all works out.
Somebody had to do this with China because they were taking hundreds of billions of dollars a year out of the United States, and somebody had to
make a stand. No, I think our country is doing really well.
(CROSSTALK)
QUESTION: (INAUDIBLE)?
TRUMP: I think the markets -- I think the market reaction is anticipated. I would have anticipated. I would have maybe anticipated even more.
But ultimately, it's going to go much higher than it ever would have gone, because China was like an anchor on us. China was killing us with unfair
trade deals. The people that allowed that to happen are a disgrace.
China, what they were doing to us for years and years, taking hundreds of billions of dollars out, stealing intellectual property, targeting our
farmers -- all of that's ending, and they understand that.
(CROSSTALK)
QUESTION: (INAUDIBLE)?
TRUMP: That's right. I'll be -- I'll be convincing some people to do things that they don't want to do, and that means people in Congress.
But you get a lot of people on one side, and you have a lot of people on the other. But I can -- I have a lot of influence with a lot of people,
and I want to convince them to do the right thing. And I will tell you, we've made a lot of headway in the last three days; a lot of headway.
QUESTION: (INAUDIBLE)?
QUESTION: You and the shooter in El Paso used that same language. Do you regret that?
TRUMP: I think that illegal immigration -- you're talking about illegal immigration, right? Yes?
I think illegal immigration is a terrible thing for this country. I think you have to come in legally. Ideally, you have to come in through merit.
We need people coming in because we have many companies coming into our country. They're pouring in.
And I think illegal immigration is a very bad thing for our country. I think opens borders are a very bad thing for our country, and we're
stopping.
We're building a wall right now. We won the lawsuit in the Supreme Court two weeks ago. The wall is well under construction. It's being built at a
rapid pace. We need that.
We need strong immigration laws, but we want to allow millions of people to come in because we need them. We have companies coming in from Japan, all
over Europe, all over Asia. They're opening up companies here. They need people to work. We have a very low unemployment rate.
So, I believe we have to have legal immigration, not illegal immigration.
(CROSSTALK)
QUESTION: (INAUDIBLE)?
TRUMP: I am. I think the market reaction is to be expected. I might have expected even more. At some point, as I just said, we have to take on
China. They've been taking -- look, they've been taking us to the cleaners for 25 years.
[09:45:10] TRUMP: This should have been done long before me as the President. You know the story better than anybody. You know it better
than I do, frankly. Hundreds of billions of dollars a year taken out of our country, stealing intellectual property.
And you know what? We, right now, we're sitting on top. We have money pouring in. We have powerful companies, strong companies. China is losing
so many -- they're losing -- thousands and thousands of companies are leaving China now because of the tariffs. And we're in a very good
position.
As to whether or not a deal will be made, I will tell you this: China would like to make a deal very badly.
(CROSSTALK)
QUESTION: Joe Biden says you have more in common with George Wallace than George Washington.
TRUMP: Well, you know, Joe is a pretty incompetent guy. I've watched his interviews. I've watched what he said and how he said it, and I wouldn't
have rated him very high in the first place. But Joe Biden has truly last his fast ball that I can tell you. Thank you.
SCIUTTO: The President there leaving the White House just moments ago, of course, on his way here to Dayton, Ohio, and then later to El Paso, Texas.
As is so necessary, we need to fact check the President after moments like this because many things he said have no factual basis.
Let's begin with the motivation of the shooter here in Dayton. He cites correctly that he did have social media postings in support of Bernie
Sanders, Elizabeth Warren. However, he has a violent history going back to high school, kill lists, rape lists. Law enforcement has made no
conclusion about that being his motivation for this as the President claimed.
So the President said that he is building a wall in response to the question about immigration. In fact, our latest fact check shows that
there's only repair of existing wall. He has still not managed to get money that he wants, Federal money, to build a wall -- a wall through
Congress.
He also stated early on that he is avoiding the politics of this debate; that he's always tried to stay away from politics. Seconds later, he
attacked Joe Biden and then you heard him there, just before he completed his comments, attacking Joe Biden again.
Finally, if there was a bit of news in here, the President saying that he is open to background checks as a new gun control measure following these
attacks here. The question is, does he follow through on that?
We know that many Republican lawmakers, they privately say they support such a measure. They need the President's leadership. The President,
after past attacks, including Parkland, has expressed support for gun control measures and then backed off after meeting with the NRA. Will this
be any different? He has made promises like this before, has not followed through.
I want to speak now to a number of folks we have here, Kaitlan Collins, Nia-Malika Henderson, David Swerdlick, and Brian Stelter. First, let me
begin with Kaitlan Collins there.
Test that Presidential -- I don't know if we want to call it a commitment there, but a statement that he is open at least to background checks and
that there's a lot of support for that. Is that a significant change for this President?
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, that echoes what he's been saying privately since these shootings took place over the
weekend. And, of course, you're right, this is something we've heard from the President before, only to have him later back away from some of the
stances that he's been supportive of in the past. So that is what critics are going to be saying in light of this, whether or not this is something
he's actually going to standby his support for that.
But the President did say that he believes there is a growing political appetite to expand those background checks. That's something that would be
pretty significant and, of course, it would essentially open up the getaways for Republican lawmakers to go ahead and be behind that because
they've been wary about some of these things with Mitch McConnell saying he doesn't want to move that universal background checks bill that the House
has passed because he doesn't believe that the President himself supports it.
So the President is saying there he does support that. It was interesting, but also he said he doesn't believe there's a political appetite for any
kind of a ban on assault weapons. He repeated that several times there. And that's going to be the question going forward.
And that was a big criticism of his address to the nation a few days ago, what the President is talking about the aftermath of the shooting, but the
question is what is he actually going to do going forward. And he is saying there he is open to background checks.
SCIUTTO: Yes. Well, I'll tell you, one Republican who came out publicly last -- yesterday for legislation banning weapons of war is Ohio
Congressman Mike Turner, who has 100 percent rating from the NRA.
His daughter was standing very close to where I'm standing now during this shooting in the early mornings of Sunday morning, a near miss as nine
people were killed behind me and he's now come out in support of that. Will he be a singular voice?
Nia-Malika Henderson, help me fact check the President on the following claim he made at the beginning of his remarks. "My critics are political
people. These are people looking for political gain. As much as possible I've tried to stay out of that." The President uttering those words again
before attacking Joe Biden. Can he say that with any credibility?
NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: No, he can't. And he has of course, attacked Beto O'Rourke as well during the course of the
healing that needs to go on and is going on right now around these two massacres, one where you are in Dayton and the other down in El Paso.
[09:50:09] HENDERSON: What's also not true is it's not just his critics trying to score political points, folks who are political people, he said,
and folks who are running for President. It's actually average Americans who feel like his rhetoric is too divisive -- too racially divisive -- and
inspires incidents like we saw in El Paso.
It's folks who talk about stochastic terrorism, the idea that words do matter and words do inspire people to commit terrible, terrible acts.
So on those two counts, he is absolutely wrong, he has been political, and it's not just his critics, it's not just political people who really want
him to tone down his language.
And I think that is a big question for this President. Does he actually do this? All of us who have watched this President, first as a candidate in
2015 and now as President, and there's always been the question of whether or not he changes his behavior, modifies his strategy, in this case around
being racially divisive and calling out illegal immigrants and calling out people who are black and brown folks in this country. Does he change?
And I'm sure, if you're a Republican, you certainly want him to. They haven't been that vocal in calling him out. They sort of say, "Oh, it's
not helpful," but they haven't been as vehement certainly publicly. And maybe that's something that will change. And I think most Americans
certainly hope his rhetoric does change.
JIM SCIUTTO, CNN ANCHOR: Yes. Well, as you heard there, the President was pressed, he was asked about the invasion rhetoric. Of course, similar to
that cited by the shooter in El Paso in his manifesto. The President, rather than denouncing or backing away from that, seemed to defend it as a
description talking about illegal immigrants, the number of them, et cetera.
David Swerdlick, the President is saying that he is in favor of background checks. Based on his past statements and track record, it doesn't mean
that he is credible on that because he has backed away.
And it struck me that he set up himself for backing off that support by putting the onus on Congress saying, well, there's not a lot -- there's not
a lot of -- it's got to happen in Congress and for measures like assault weapons bans, that's got to be something that there's not political backing
in Congress there.
Did you see the President setting up at least an off-ramp, as it were, for supporting those measures?
DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Jim, what it sounded like to me was that the President was focus grouping the issue in real-time in
front of cameras, in front of the American people.
He said there was a strong appetite for background checks. As Kaitlan pointed out, he said -- he suggested there was less appetite for banning
assault weapons. It seemed like he wanted to throw that out there, see what the reaction was, and see how far he could go or how far Republicans
might consider going.
But given the track record with the President and Republicans in the Senate, I'd have to say I'm skeptical at how fast any kind of national gun
reform legislation is going to move.
Can I make one more quick point about Congressman Turner that you brought up from Ohio? Yes, as you said, he has an A-rating from the NRA. His
daughter was across the street from the Dayton shooting. Now, he has sort of seen the light on gun reform, reminded me of another Ohio politician,
Senator Portman, who was against gay marriage until 2013 when he said that his son came out as gay, reversed his position.
It makes me ask, when do politicians take a stand on principle and open their minds to the pros and cons of an issue rather than having to wait
until something is personal and brought home to take a stand possibly on principle on an issue? That, I think, is the one question I would have for
Congressman Turner.
SCIUTTO: Well, there was one Congressman here whose daughter was across the street. He is the one who has come out and publicly changed his
stance. There weren't other Congressmen in that situation. Does that mean they hold their stance?
Brian Stelter, you heard the President's answer there on white supremacy. Now, to his credit, he called out white supremacy in the hours after this
attack. But did you hear something in his answer there, something of a both sides moment where he said, I'm against all kinds of supremacy.
STELTER: Right.
SCIUTTO: I'm not sure what other sorts of supremacies he was talking about there. What was the President trying to do there?
STELTER: He was trying to draw a false equivalence between white supremacy terrorism, the kind that we saw in El Paso, and other forms of violence.
Now, yes, it is true the Dayton shooter had extreme left-wing views according to his Twitter feed. That's been reported by CNN and lots of
other outlets. Trump claims that's not been reported, even though it has.
Trump is trying to mix everything together, muddy the waters, confuse people so they come away with a misimpression of what's really going on.
White supremacy terrorism is a rising threat. There is no indication of a political motivation in Dayton to this point. If that changes, the
authorities will let us know.
But right now, El Paso is clearly politically motivated, and the President wants to avoid and ignore that whenever possible.
[09:55:00] SCIUTTO: Yes. And let's, if we can, fact check. I'm just going to ask my team, we have statistics on this, by the way. There is
only one kind of supremacy, and that is white supremacy, that has led to an increase in acts of domestic terrorism in this country by the Justice
Department's own statistics, by the Anti-Defamation League's own statistics. That is white supremacy. An enormous percentage, that is
where the growth in problem is as identified by the President's own Justice Department.
I want to briefly go to Democratic Presidential candidate and Senator Cory Booker. He has just taken on Trump directly, saying, in his words, that
you reap what you sow. Have a listen to him.
(BEGIN VIDEO CLIP)
SEN. CORY BOOKER (D-NJ), PRESIDENTIAL CANDIDATE: So the act of anti- Latino, anti-immigrant hatred we witnessed this past weekend did not start with the hand that pulled the trigger. It did not begin when a single
white supremacist got into his car to travel ten hours to kill as many human beings as he could.
It was planted in fertile soil because the contradictions that have shadowed this country since its founding remain a part of our body politic.
It was sowed by those who spoke the same words the El Paso murderer did, warning of an invasion. It was sowed by those who spoke of an infestation
of disgusting cities, rats, and rodents, talking about majority/minority communities.
It was sowed by those who have drawn an equivalence between neo-Nazis and those who protest them.
It was sowed from the highest office in our land where we see in tweets and rhetoric hateful words that ultimately endanger the lives of people in our
country.
(END VIDEO CLIP)
SCIUTTO: Nia-Malika Henderson, you heard Senator Cory Booker's words there, responding directly to the President. Tell me the significance
today.
HENDERSON: Powerful words from Cory Booker there. Obviously down in Charleston, the site of another racist inspired killing down there. And,
you know, I think he gets at how deeply felt this is for Americans, particular for black and brown Americans.
The idea that you have a President who has targeted people who are black and brown over and over and over again as if to say those folks aren't part
of the fabric of American history.
So I think you have a lot of Americans who are going around afraid, afraid of what might happen next because of the rhetoric that comes from the
highest office in the land, as Cory Booker said.
And he is a critic. And I'm sure the President will dismiss him. But, listen, the President should certainly listen to Americans who are afraid
because of his rhetoric and what his rhetoric might inspire.
SCIUTTO: Yes. And because of the facts, the data, what it shows. Brian Stelter mentioned before about how the President was muddying the waters by
talking about all kinds of supremacies.
Let's look at these figures here from the Anti-Defamation League. The attacks, extremist related killings in the U.S., in the last year, 78
percent driven by white supremacy. That's the vast majority here. That is the focus of the problem, again by the Department of Justice's own
statistics as well.
I want to take a moment here to look at the Dow. The Dow Jones Industrial average down more than 400 points, a reaction here to concerns about the
ongoing trade war with China. We're going to stay on top of that story as well. And we'll be right back.
(COMMERCIAL BREAK)
[10:00:00]
END
