vetting, as you know, for refugees but not for his nominees. and i mean, it sounds like ben is saying that this is sloppiness. what do you think? >> i think donald trump -- it's hard for trump to insist on standards that he himself can't meet. he has aides that will try so. >> thank you both very much. thanks for our international viewers. for you cnn "newsroom" is next. for you, "new day" continues right now. >> announcer: this is cnn breaking news -- okay. good morning, everyone. welcome to your "new day." chris is off. john berman joins me. we have had a day of breaking news. >> indeed we have. good morning. >> good morning. we start there again. all eyes on wall street today. trading will begin in two and a half hours. investors are on edge after yesterday's largest single day point drop for the dow. asian and european markets are rattled by the steep losses on wall street.

u.s. markets have now erased this year's gains in just two days. >> we've been watching the numbers come in all morning and signs point to an ugly open. how will the president handle this? he took credit for the markets nearly everyday. he wanted to own the gains. will he own the losses especially if they continue today. let's get right to our chief business correspondent christine romans. >> it's a global selloff. look at asia here, the plunge rippling around the world on wall street. asia markets all closed lower. this is europe. europe has been worsening here and dow futures are swinging wildly. they were down as much as 700 and higher. so there's no way to predict what's going to happen at the opening bell when it rings. let's listen what happened yesterday. the dow lost more than 1,800 points over two days. monday, brutal. shedding a record 1,175 points, that's 4.6%. it's the worst one-day point loss in history, you guys, but

it's not even one of the top 20 perjury losses. that's important to note. 8.5%, that's just within what we call a market correction, about 10%. so what's going on here? a couple of things here. most notably the trigger i think was the friday's jobs report. strong and strong wage growth. wage inflation is good for workers but bad for profits. the federal reserve may need to raise interest rates faster than planned. the biggest thing to talk about is the bond yield. a selloff in the bond market. bond yields move opposite of price. they hit a four-year high on friday. bonds are much more attractive to investors than risky stocks. so the bond market meltup here is what people are talking about. now even if stocks drop again today, i want to be clear here, my countdown is gone, there's no chance of a crash or a panic. conditions are still good. the economy is strong.

the job market is strong. ironically what you have here is a condition where wall street and main street are now a little bit disconnected. >> it sure looks like that. >> you have things doing really well in the economy but the stock market is worried about that overheating. >> does the stock market then have a ripple effect on the committee where it could do something negative. >> it could. but i think what's really most important to note here is this market has been going up, up, up, still up 33% since the election. now a quarter of the trump bump has been wiped away in the past couple days but you're still up 33% since the election. what people are coming to grips with is we're in an era of rising interest rates. now you're with going to see interest rates start to rise and you're going to see wall street and main street reacting differently as it really should. yesterday i don't know how much to quantify the computers because when you have a big move in the bond market, sometimes you have computer programs that trigger selling in the stock market. that could be happening here. there's also derivatives and

derivatives of derivatives. we have people selling instruments against volatility and selling -- shorting the stock market through different derivative instruments. that's at play here. >> over the last year, some of the stock market increase has been due to expectation of the tax cut that the president helped pass and took credit for that everyday. but this drop is sort of a reaction to the tax cut as well. it's investor's and companies seeing what is i don't want to say negative effect but a side effect of the tax cut they're getting. >> stimulus, stimulus from the tax cut that could filter into a very strong, maybe already overheating economy and cause the fed to have to raise interest rates and cause trouble in the bond market. >> we're also young, all three of us, that we barely remember inflation at all, periods of very high inflation, but inflation can be a concern not just for companies but across the board. >> it's not high yet, though. we're coming from zero inflation to a little bit inflation. let's keep that in perspective.

jerome powell the new fed chief started on the job yesterday. he has a real tough job ahead of heim here if this economy really does start to overheat. >> do you want to look at the dow futures now? do you do it second by second? >> i do look at them 374 right now. s&p futures are down more than a percent. percentage is really important here. in 1987 when we were all in diapers. >> diapers. >> the percentage drop for the s&p was something like 22%. >> right. >> a 4% move is a very big deal, no question, but we have gone up for so long this is maybe getting back to some reality here. another risk here, the president takes credit for the market so much, i want to see what his language is going to be like today. this is why presidents don't take credit for stock markets going up, you own it for going down. >> he'll find a way to take credit for something today. now to our other top story according to "the new york times," president trump's lawyers want him to refuse an interview request from robert

mueller's team. the times reports that they are concerned that the president could get caught lying to investigators. this follows cnn reporting that the president's attorneys argue mueller's team have not met the threshold for a face to face interview. cnn's abby phillip is live at the white house with more on this. good morning, abby. >> reporter: good morning. the white house confirmed the democratic memo is now in president trump's hands. he now has five days to decide what he's going to do with it. will he block it or redact it or perhaps release it as he did with the gop memo. all of this coming as we are also learning through new reports that the president and his legal team may not be on the same page about whether or not he should sit down with special counsel robert mueller. lawyers for president trump are urging him not to agree to an interview with special counsel robert mueller. partially out of concern that the president, who has a history of making false statements and contradicting himself, may incriminate himself with investigators, according to "the

new york times." but mr. trump has insisted that he's eager to speak with mueller. >> there's been no collusion whatsoever. there's no obstruction whatsoever. and i'm looking forward to it. i have to say, subject to my lawyer's and all of that but i would love to do it. >> reporter: cnn reported last week that mr. trump's attorneys are arguing that mueller's team have not met the high threshold they believe is necessary to interview a president in person. the russia probe hanging over the administration as the president decides whether or not to publicly release the democratic memo unanimously approved by the house intelligence committee last night. the democratic rebuttal challenges the accuracy of the declassified gop memo, crafted by devin nunes that accuses the fbi of surveillance abuses. >> we want to make sure that the white house does not redact our memo for political purposes and obviously that's a deep concern. >> reporter: the president attacking ranking member democrat adam schiff ahead of monday's vote, calling him one of the biggest liars and leakers

in washington. but praising nunes as a great american hero. and during a speech in ohio, mr. trump gloating about mr. nunes's memo which he falsely claims vindicates him in the russia investigation. >> oh did we catch them in the act. they are very embarrassed. they never thought they were going to get caught. we caught them. we're like the great sleuth. >> democrat mike quigley continuing to press nunes about whether his staff coordinated with the white house in drafting the gop memo. >> he wouldn't answer questions for. so besides having my feelings hurt, he didn't answer the question. >> reporter: nunes refusing to answer questions from cnn. >> do you vote to release the democratic memo? >> reporter: before again appearing on fox news to tout his memo. >> political dirt was used by the fbi and they knew it was political dirt to open a counterintelligence investigation into the other

campaign. that's what people -- i just can't believe that people on the other side are not furious about this. >> reporter: president trump also raising eyebrows with this rebuke of democrats for not applauding during his state of the union speech. >> they were like death. and un-american. un-american. somebody said treasonist. i guess why not? can we call that treason? why not. i mean, they certainly didn't seem to love our country very much. >> well, those remarkable comments coming at exactly the same time that president trump actually needs democratic votes to help him get a spending bill through congress and also deal with the immigration issue. president trump has a couple of immigration-related agenda items on his plate today. he will host a law enforcement round table about the ms-13 gang but also he'll sign a national security memorandum establishing new vetting procedures for

immigrants and visitors coming into the united states. >> abby, thank you very much. let's discuss it all with david gregory and chris cillizza. great to see both of you. the president's lawyers are understandably concerned that the president might be charged if he says something untruthful to investors, so they are trying to keep him from talking to mueller's team. what happens now? >> well, we'll see. i mean, it depends how hard mueller's team pushes. the president is on record saying that he looks forward to speaking to him, answering all of his questions. this is obviously a negotiation. as ken cuccinelli said in last hour, between his lawyers and special counsel office, the president meanwhile is engaged with help from republicans on capitol hill in working overtime to delegitimize this investigation, to try to poison the well here about anything that they might find or

conclude. but i think we may very well see the president answering questions in the end, but i think his lawyers are right to be very worried about the potential to put him in legal jeopardy. remember, so much of what we've seen in this investigation outside of the underlying conduct that sparked it was how much the president has brought on himself by firing jim comey, by overreacting to revelations, by going on the attack. he has really made this bigger than it ever was. >> how do you think the president likes his executive time this morning if he's reading the papers and watching tv and seeing that his lawyers are afraid he'll get caught lying. his lawyers are fighting not to have him talk to special counsel robert mueller's team because they're afraid he will get caught lying. chris cillizza, it's an interesting place we're in this morning. >> it's totally fascinating. i think the lawyers are right, john. we've seen when he has been deposed in the past, obviously not in this setting, but in past

cases he has been caught not telling the truth or being forced to acknowledge he had not told the truth or exaggerated significantly in the past. so if you are one of his lawyers, all you need to do is look at the past cases and say this could get dicey particularly given the stakes. what do we know about the president? does not like to be managed and does not like to be told not to do something. it's a sure recipe to get him to do something. i think it's a question of how much power do his lawyers have over him? i think david is right, this is a negotiation, this is not a final decision on whether or not he will talk and in what form. but we know that this president does not react well when people who he sees as working solely for him do not do sort of the appropriate amount of praise of him. >> politically speaking, david, there was once a time where people might ask, oh, what is the president hiding if he

refused that. but because he is so against this investigation, because he thinks that it's so tainted and has telegraphed that a million different ways, he probably politically -- i mean, at least with his supporters, obviously can survive saying i'm not going to take part in this. >> i think so. i think it depends where we get and whether they are going to compel him to testify, whether they feel that they need him to not testify but to answer questions. it wouldn't necessarily be under oath, of course. they could subpoena him at some point. we just don't know at this stage. but you have to make it very clear that the president has, i think, succeeded in what he has set out to do. >> yes. >> to undermine this investigation, to attack it at all fronts and to with the benefit of some of his political allies made the case that this is a garbage in, garbage out investigation, that you can't trust why they're investigating or what they'll conclude because

there was original sin in how they began it. that is what the attack on the fbi and the justice department is about. but you do have to wonder why the president is acting this way. what does he have to hide that he would fire jim comey and wants to undermine rod rosenstein, the deputy attorney general, that he was mad at the attorney general for not protecting him more. these things start to add up. and the behavior certainly in the mind of investigators and the special counsel has to have them thinking in addition to what they're actually finding through investigation that something is amiss here. >> look, i think you bring up the key point here, it's fascinating to me that the white house thinks they have soften the ground enough that they can survive politically the president refusing to testify or at least fighting over it. it shows they think they're winning to an extent this political battle at least with the people they need to. the other political debate of the week, the democratic memo in response to this nunes memo alleging fbi abuses in the early

stages of the russian investigation is now on the president's desk. the president gets to decide if this goes public quickly in the short-term. what kind of pressure do you think he faces here? >> okay. normal political standards, john, i think it's very difficult for him not to release the memo. we saw it voted out unanimously from the house intelligence committee because if transparency is good for the goose, then transparency is theoretically good for the gander. but donald trump's calculation, we all knew donald trump was making the nunes memo public because it re-enforced what he thinks. right? he believes, and he has said this, he believes in a deep-state conspiracy embedded with the fbi has worked and continues to work to undermine him. the democratic memo presumably does not do that. and so it's a test of are you willing to do things that are not sort of directly supportive

of your own personal belief system. again, a normal politician would do this because he or she would understand that by not doing it you look like a hypocrite. you look like you're only willing to listen to and release information that supports your point of view. i think he'll do it, but again, i say this like 25 times a day, but predicting what donald trump is going to do based on the way in which politicians who have had offices like his before would do is just not terribly instructive. >> david, we have congressman adam schiff on who obviously is spearheading this rebuttal. >> and is actually pretty tall. >> i'm going to ask him how tall he is when he's here. in any event, we have him on. then if the president doesn't release this memo, then what? it could go to a house -- a full house vote. but the point is we're in uncharted territory here.

>> we are. and paul ryan the house speaker, has said that the democratic memo should be released, maybe he would be able -- as the full house could do release the memo and let this debate continue in a way that's not completely one sided. but the bigger issue here is the damage that's been done to the fbi. people i talk to who are inside and formerly with the fbi has all set the fbi back by years to its reputation, to its effectiveness and the americans have to live with that, with these attacks on the fbi, which is not perfect. they have to get to the bottom of in terms of how the investigation was done, but there's something much bigger to the release of this memo that's at stake here. >> thank you so much for being with us this morning now that the democratic rebuttal is on the president's desk, do democrats think the president will let it go public? we will discuss with the key member of the house intelligence committee next. stay at la quinta. where we're changing with stylish make-overs.

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♪ president trump now has five days to decide if he will declassify the democratic

rebuttal to the republican memo. the house intelligence committee voted unanimously to make the democratic memo public. joining me now is democratic congressman jim hines of connecticut. congressman, thanks so much for joining us. if you were a betting man, do you think the president will allow this memo to go public? >> i'll tell you, i've never seen this president participate in an effort that did anything but make him look good. speaker ryan said it should be out there. i would bet against the white house saying what it said with the republican memo 100% it's going out. i think we'll see noise and obstacles. >> does this memo make him look bad? is that what you're suggesting? >> he'll perceive it that way. it's a point by point of the republican memo. i would point out, john, that what is happening here is really not, you know, who wins the argument of fact. in some ways it doesn't really matter all that much whether the democratic memo gets out or not.

the truth is that every lawyer out there looked at the nunes memo, considered this and this is not just lawyers, this is national security people, and said there's absolutely nothing there. however, it served its percentage. there's a meaningful percentage, not a huge percentage, there's a meanful percentage running around saying, gosh, that fbi, i'm not sure they're on the up and up. gosh, this president. there's some question about whether there was some political bias in the investigation. facts aren't going to change that. and it's a terrible, terrible thing because there was a time when people stood up for facts and what was true. >> so you say there is nothing there what the republican authors of the memo and i heard devin nunes speak on other networks extensively, the steele dossier, the fisa court was not told that the steele dossier was

funded with clinton campaign money. is that in a vacuum isolated issue here, is that true that the fisa courts were not told that? >> i do not believe the fisa judge was told that. there was no doubt that the judge understood that this had come out of a politically biased and politically adverse individual and remember, the question is not whether the source is bias. there are sources and informants all over every single day. not a single one of them is unbiased. it is the job of the judge to determine whether the bias that the informant or the source brings to a particular process has in any way affected the veracity, the trueness of the what is being offered to the judge. that's getting lost here. what matters is not the underlying bias. there are no people out there who are not bias in one way or

another. what matters is what was said and shown to the judge, was it true? >> you're making the legal argument, this deals with informants. christopher steele in this case is really an informant and the judge has to determine the reliability of the informant and in many cases the informants are paid. would the judge care who the informant was paid by. there is a difference in the minds of some saying he was politically motivated and motivated from the clinton campaign. if i can move on to other subjects, though, we are hearing overnight from the new york times that the president's lawyers are suggesting he will not testify, he will not speak to robert mueller's investigators. last week cnn reported they felt they hadn't met the standard to have the president sit down and talk to them. what do you make of it? >> let's clear aside all the political b.s. around this. if i were the president's lawyer, i would be horrified at the prospect this undisciplined

say what i want in the moment, don't be honest what i say, i would be horrified to put donald trump in front of an experienced questioner, prosecutor. what's happening is this is going to set up a serious maybe constitutional crisis is too strong of a word, every other past president that has been asked to testify in front of an investigation has. so this raises a huge issue. secondly, my god, this is a man who from moment one has said this is all a big hoax. there's nothing there. the democrats are making this up. mr. president, if that is true, there is absolutely no risk to you sitting with mueller's investigation and telling the truth. >> all right. i want to move on to one last point here and this isn't so much having anything to do with the information. it does have to do with the president's words and an accusation he made against you and your fellow democrats for how you behaved during the state of the union address. this came during his speech he gave in ohio yesterday. let's listen to the president. >> even on positive news, really

positive news like that they were like death. un-american. un-american. somebody said treasonist. i said, yeah, i guess, why not? can we call that treason? why not. i mean, they certainly didn't seem to love our country very much. >> so the president of the united states called democratic members treasonist and suggested you don't love the country very much and un-american. >> you know, john, it's yet the latest installment of this president taking our democracy and our country into the gutter. there are nicaraguan dictators who would be embarrassed to call their political opponents because they happen to disagree politically treasonist or un-american. it's quite frankly pathetic. now, john, i also need to note, this is a long tradition. and lots of democrats applauded at lots of things but eight

years ago my very first speech with the brand new president obama, a republican stood up and shouted you lie. i would suggest that standing up and shouting you lie is a little less thoughtful for people not agreeing with things they disagree with. this president and in that moment dragged this country deep into the mud of dictatorship as opposed to the kind of democracy that whether you watch fox news or rachel maddow you ought to aspire this country to have. >> thank you for being with us. thank you very much, sir. >> thank you, john. as we've been discussing republicans wanted the nunes memo released. do they feel the same way about the democratic rebuttal? we asked chris collins that and more next. our daughter home, that was it. now i have nicoderm cq. the nicoderm cq patch with unique extended release technology helps prevent your urge to smoke all day. it's the best thing that ever happened to me. every great why needs a great how.

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♪ the white house says president trump will review a classified memo from democrats on the house intelligence committee. that committee, as you may know, voted unanimously to make their rebuttal to the nunes memo public. so with five days to decide, what do republicans think the

president should do? joining us now to answer this and so much more we have republican congressman chris collins of new york. good morning, congressman. >> always good to be with you. >> great to have you. should the president authorize the release of the democratic rebuttal? >> absolutely and i was very happy to see that was unanimous vote. certainly not the case when the vote was taken to release the republican memo, but we're all about transparency. we can have disagreements on some of the minutia, if you will, that may come out. and my guess is that after the democrat rebuttal is released -- and i'm confident it will be -- you'll probably see republican rebuttal to the rebuttal. >> fun. that will be great. that would be great fun. but why do we need a rebuttal to the rebuttal, if as the president says, the nunes memo vindicates him? >> well, i think it comes down when you look at the request for the fisa warrant and you look at comments that mccabe made that

said without using the steele dossier paid for by the hillary clinton campaign and the democrat national committee that they would not have been able to get the warrant. >> if you believe those comments. >> that's correct. >> the rebuttal as you know democrats on the committee say that is a misrepresentation. >> there you go. >> so do you believe that andrew mccabe's testimony behind closed doors is the thing that should be made public so that we can read it with our own eyes? >> well, there's the issue of what's confidential information. this is the intelligence committee. i will trust the folks both on the committee and at the white house just to make sure that we're not releasing any information that would help our enemies in any way. >> yeah. >> but that's -- what you brought up is exactly the conversation we're having. >> yeah. >> and i think america needs in a transparent way to put the issues out. we can all make our own decisions. >> yes. adds a journalist, i would love

to be able to read that. okay. next, should the president sit down with an interview with robert mueller? >> well, in this case i would say we should rely on his attorneys and sounds like they're suggesting he should not. one thing when you're involved in litigation, you're paying your attorneys to give you the right advice. >> yeah. but just to be clear, it sounds like from the new york times reporting that they're suggesting that he not do so because they are worried that he would say something misleading and be charged with lying? >> well, in this case, alyson, where the issue is not really collusion. i mean, i think most people have said there was no collusion. now you're into the nuances of what is obstruction of justice? is there an allegation in that way? is that where this investigation is headed? >> but before that, just lying to investigators.

i mean, do you think that that could be a problem for the president? sometimes as you know he says things that are fact challenged. >> well, again, i would listen to his attorneys. i'm not going to comment one way or the other and certainly not going to tell the president what he should do. it would appear right now that they're negotiating perhaps to have the questions done in writing. and what would be wrong with that? so there's ways to get this out short of somebody sitting down and i've sat down with attorneys in the past and they can tie you all up in knots and push you every which way you and at the end say oops, you said it this way or you said it that way. >> is not clapping for a president at the state of the union treasonist? >> well, no, i wouldn't use the word treasonist. boy, was it embarrassing. when gutierrez stood up when the president said we should stand and respect our flag for pledge of allegiance, the national anthem and those of us republicans stood and cheered and started shouting usa, usa

and gutierrez storms out of the chamber, i think that says it all when it comes to the democrat response. they were stoic, sitting on their hands. they did not want to applaud at any turn, other than joe manchin. joe manchin was applauding every which way, right with the republicans. and we all know why. it was just a very partisan reaction. and i've sat through some of former president obama's states and we were -- >> how was that? >> we were reserved, but i don't think quite to the extent that we saw. >> all right. let's just take a look at it. so here is how republicans reacted when the president obama had his addresses and state of the union. let's look at a b-roll. i believe you have a monitor to look at this. so maybe we can play this for everybody. >> give small businesses the credit they need to stay afloat.

[ cheers and applause ]. each of these proposals deserves a vote in congress. [ applause ]. let a bipartisan bill do it. >> so congressman, why wasn't that embarrassing where you see john boehner stone faced there and you see the republicans not applauding for the economy? >> well, again, it's degrees. as i had already acknowledged, we did not overreact or did not stand and cheer with obama anymore they did. i guess it's degrees of it. i just said i believe the democrat response was more subdued than our's with obama. >> it's hard to know how not applauding in both cases one can be more subdued than the other, but of course there's this moment also with joe wilson. let's remind you of this moment. watch this. >> the reforms, the reforms i'm proposing would not apply to

those who are here illegal. it's not true. >> that wasn't very subdue, congressman. >> no. in fact, you might get a chuckle. i suggested to joe wilson during president trump's address that he should stand up and shout now that's the truth. >> congressman, that's a funny line, but you seem to be ignoring the point, which is that was incredibly disrespectful. why are you more focussed on democrats not applauding? >> well, no. that was disrespectful. and i would say it was an emotional response, much like gutierrez storming out of the chamber. it is what it is. it was for the moment in time where joe wilson was reacting to something he thought was not truthful and gutierrez was reacting to the president saying we should respect our flag. >> you think you lie is the same as walking out of a room?

>> i think walking out of the room when the crowd is chanting usa, usa and you're an elected member of the congress is very disrespectful to the chamber, it's disrespectful up and down and in the case of joe wilson, something just hit him that he was not hearing and it was an emotional response. >> i see. so joe wilson's was an emotional response. but not gutierrez. thank you for your opinion on this congressman chris collins. >> okay, alyson. >> john. >> president trump has no problem taking credit when the markets soar, so will he own it when it goes down. steep losses over the last few days. we'll speak to the president's former economic adviser next. whoooo.

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>> announcer: this is cnn, the most trusted name in news. ♪ all right, we are less than two hours away from the opening bell. right now dow futures are down about 200 points, ahead of the open. the stock market's dramatic fall over the past week comes after unprecedented gains. and president trump has not been shy about taking credit for those soaring numbers. >> the stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time. >> the united states is doing

fantastically well, better than we've done in decades. the stock markets are incredible. >> you're seeing what's happening with the stock market. people are appreciating what we're doing. >> the stock market is way up again today. and we're setting a record literally all the time. and i'm telling you, we have a long way to go. >> all right, let's discuss all of this and what's happening today with cnn senior economic analyst and former senior economic adviser to the trump campaign stephen moore and christine romans. great to have both of you standing by at set. you nervous? >> i am nervous. the futures are down another few hundred points. >> it could be several hundred points on the dow if this negativity holds. >> if the president is going to take credit when there's a boom, does he need to take responsibility when there are these losses. >> yeah, but look the dow was up 7,000 points. so it's given back you know 1,500 to 2,000, we're still way ahead of the game. one piece of advise for investors out there, people with 401(k) plans, people tend to

sell when the market is falling. you don't want to do that. if your in for retirement purposes don't sell now because -- in fact, i think -- i kind of agree with you. at some point this will bottom out. when it does, i think the market will go on its way. don't sell in a down market. >> there's an old phrase on wall street, don't just, you know, stand there, do something. don't just do something stand there because you're going to make a mistake in your own retirement right now. and stephen is right. since the election, the dow is up 33%. now, it's lost all of the gains for the year and lost a quarter of the trump rally, but you have to put it all in perspective here. there's a lot going on, too. there's things called program trades, computers. we have a big move in the bond market which is what we have seen. sometimes you have selling in stocks that's tied to that that has to do with computer programs. >> if he's going to take credit for the boom in the stock market, which the president has time and again since becoming president, he thinks that -- it sounds like -- that the changes

that he's made have contributed to the stock market going up. that there is a feeling of consumer confidence. and that there is good news coming down the pipeline. so he does take credit for what's happened in the stock market. so will he now -- should he now take responsibility for today? >> i think you've already seen the white house changing the messaging, sarah huckabee sanders yesterday talked about the long-term fundamentals of a strong american economy. that's what you should say when you're talking about the stock market from white house perspective. that's what they should be talking about. you heard the ebb and flow, the vice president talked about the ebb and flow of markets and that's what they should be talking about. i just -- it's very dangerous to cheerlead a market because when it turns you have to own it. and that's a problem. >> here is the thing, this is a strange market correction in the sense that -- >> yep. >> if you look at the fundamentals of the economy, if you look at the jobs report f you look at the wage report that came out on friday, the highest wage increases that we've had in ten years, you know, "the wall

street journal" headline yesterday was 82% of companies had higher earnings than expected. you think if earnings are higher than expected that stocks would go up. i think what's going on here is a lot of your friends on wall street get spooked every time there's good news because they think that there's going to be, you know, an inflationary affect from all of this. >> yes. and won't there be? >> pardon? >> won't there be? >> i don't see it out there. look, it is true that energy prices have risen a bit over the last month or two, but you look to companies that don't have a lot of pricing power. and my big thing is prosperity does not cause inflation. more people working does not cause inflation. >> but one last thing, i just want to get because we heard christine on this. do you think that the tax cuts that have gone into effect, do you think that that is in some way connected to this? >> i think the tax cuts have been spectacular success in every way. i mean, you've had hundreds of companies -- >> you don't stimulate a hot economy and that's part of what this correction could be? >> no, no no.

look, this is not about -- this is about expanding investment, expanding hiring. i never believe in this idea of an overheating economy. we've had rates of growth in the past of 5, 6%. >> okay. >> we the era of low interest rates are over. artificially low interesting rates held by the fed are gone. inflation what is inflation? most americans don't know what it is because we haven't had any for so long. >> tell us. why is inflation -- >> even on your point of interest rates. look, i agree that they're going up. i lived through the 1970s when we had 14, 15% interest rates. we're talk about interest rates maybe 3, 3.5 or 4 at the worst. those are still pretty historically low. >> why is inflation dangerous? >> wage inflation is what we're worried about. we had a number on friday 2.9% year over year wage growth. we have not seen that since 2009 and that starts to eat into corporate profits and that starts to feed into this whole concern about the economy starting to overheat. am i right? so that's what they're worried about. they're worried about the wage

part of it. >> look, we want higher wages. this has been the problem with the u.s. economy last 20 years. now we get some wage increases and wall street panics. i'm with the workers. i want workers to make more money. >> i agree. what you're seeing for the first time in a long time wall street, main street separating. the economy is doing well, and that's good. >> exactly. >> but wall street is not the economy sometimes and so that's what we're seeing here. >> that's a great point. >> okay. christine, stephen, we thank you both very much. stand by. >> don't sell. >> got that message. all right, john? >> thanks, alyson. police say a suspected drunk driver that killed an indianapolis colts player. the driver was an undocumented immigrant. what we know about his past next. or make a back seat that feels nothing like a back seat? why give it every feature you could want, along with a few you didn't know you needed? it's simple. you can build a car, or you can build a cadillac. come in now for this exceptional offer

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we know that when you're spending time with the grandkids every minute counts. and you don't have time for a cracked windshield. that's why we show you exactly when we'll be there. saving you time, so you can keep saving the world. >> kids: ♪ safelite repair, safelite replace ♪ police say the suspect in a drunk driving crash that killed two people including indianapolisal colts linebacker edwin jackson is an undocumented i'm granted who has been deported twice. cnn's athena jones live in indianapolis with the latest. what are you learning?

>> reporter: good morning, john. we're talking about manuel orrego-savala, a 37-year-old guatemalan national. he's facing a number of counts including driving while intoxicated and causing death when driving while intoxicated. police say in the early morning hours of sunday morning, orrego-savala drove his pickup truck onto the emergency shoulder here striking jackson and his uber driver jeffrey monroe. he had been using an alias. he first entered the u.s. illegally in 2004. we're learning in 2005 he was convicted of drunk driving in california and that he had been deported twice, once in 2007 and again in 2009. i should mention i.c.e. -- immigration augt thorlgthoritie detainer on savala. an outpouring of grief we're seeing from those who knew and

loved edwin jackson. his team saying he was well respected and loved by all, admired for his outgoing spirit. we're seeing anger being expressed including by vice president mike pence who is, of course, the governor of indiana. he tweeted this was a senseless and avoidable tragedy. this is a great loss for the entire indiana community. we also heard from another republican congressman here who says the death of jackson and this uber driver should make all americans angry because it was caused allegedly by a twice deported undocumented immigrant. >> it does make everyone angry and sad. what a tragedy. athena, thank you very much. another headline for you. one deputy is killed and three other law enforcement officers are injured in a colorado springs shooting. police say the incident began as an investigation into a car theft and quickly turned into a chase with shots fired. police say the suspect was killed. the fallen deputy, micah flick was celebrating his 11-year

anniversary with the force. she the third law enforcement officer to be killed in colorado since december 31st. deputy flick is survived by his wife and 7-year-old twins. the supreme court rejected a request from pennsylvania republicans to block a state court ruling ordering the state's congressional maps to be redrawn. the state supreme court earlier ruled the republicans pursued a partisan advantage in drawing the maps. republican leaders say they may try to take further legal action, although it's unclear what that would say. veteran actor john mahoney has died, best known for playing the curmudgeonly but sharp-witted father in the tv series "frazier." >> i accidentally stain your apartment and you set fire to the one thing in this apartment i care about and heave it out. >> i'll tell you the elgtiest thing -- >> want to know the healthiest

thing you can do? >> shut my yap. >> bingo. >> his publicist says he died sunday after a short illness. john mahoney was 77. he was so likable. such a likable actor. >> he was a terrific actor. he didn't start acting until he was over 30. he was the father in "say anything." >> was he in "juneau?" >> i don't know. he would have carried the film completely. >> i know i like him. that's all i know. >> not in "juneau." >> we're following a lot of news this morning. let's get right to it. good morning everyone. welcome to your "new day." john berman joins me. chris is off. it's a knuckle-biter for investors. >> good to be here. >> 90 minutes until the opening

bell. invaefters bracing for another wild day on wall street. all the gains from 2018 wiped out by this record setting 1,175-point plunge on monday. >> how will the president handle all this, especially if there is an ugly open. the president has been taking credit for market gains whenever he can, will he take credit or try to own these losses? don't count on it. chief business correspondent christine romans live with the latest look. i see a lot of down arrows. >> it's not good. it looks like the market selloff is not over yet. here is what the markets look like around the world. wall street's plunge is spreading around the globe. asia markets closed sharply lower, europe all lower and worsening paris and frankfurt. dow futures are swinging wildly. depending on when you take a snapshot, you could be talking three to 500 points lower at the opening bell. down as much as 700 points overnight. here is what happened yesterday. the dow lost more than 1,800

points over the last couple days. monday brutal, about 4.6%. context is so important. it's the worst one-day point loss ever. but it's not even one of the top 20 percentage losses. that's important to note. let's talk about the dow stocks. all of them just got hammered yesterday. it doesn't matter what you sell or what you make. it got hammered yesterday. how bad is this? the dow is down about 8.5% from its most recent high. if you see as bad as it looks for this morning, you will have hit a 10% technical correction. what's going on here? the trigger was the jobs report friday. wage inflation is good for workers but bad for corporate profits. if inflation picks up too fast, the federal reserve may need to raise interest rates fas