Dow Briefly Tops 25,000 for First Time
SESAY: Hello everyone. You're watching CNN NEWSROOM live from Los Angeles, I'm Isha Sesay. The headlines this hour. Prime ministers from 20 countries are agreeing to consider more sanctions on North Korea. the U.S. Secretary of State says it's time to talk to Pyeongyang but the North has to indicate its willing. Meantime, a third round of talks between the North and South was in agreement to return the bodies of four North Korean nationals found off the South Korean coastline. Well, days after false alarm of incoming missiles in Hawaii triggered a panic, Japan's National Broadcaster send out its own mistake and alert. NHK corrected its mistake in five minutes and apologized on air for the error. Well, Donald Trump's former chief strategist is facing tough questions in the Russia investigation. Steve Bannon met for 10 hours with the House Committee Tuesday, refusing to answer certain questions, so the Committee issued a subpoena. Special Counsel Robert Mueller also wants Bannon to testify before a grand jury. Well, U.S. stock market keeps tantalizing investors, the DOW floating, yes, another milestone on Tuesday, it rose above 26,000 and intraday all-time high. The spike didn't last, the DOW closed slightly lower but consider this, it took the DOW just seven, just seven trading days to go from 25,000 to 26,000. And take a look at this with me, you can see the DOW's meteoric rise in just the past 12 months, up, up, up, and up. But along with the euphoria there, also concerns, the U.S. stock market is in danger of overheating and all the gains we've seen could just melt away. Joining me now, Global Business Executive, our own Ryan Patel is in the house, happy New Year.</s>RYAN PATEL, GLOBAL BUSINESS EXECUTIVE: Happy New Year.</s>SESAY: Good to see you. So, there are those first of all who say all of this excitement and these -- the DOW performing so wonderfully well if you're an investor. It's really about the Fed and that it has the Fed's fingerprints all over this as opposed to the President taking credit for this. How do you see what we're witnessing right now? What's happening?</s>PATEL: Yes. This definitely is the Fed. This is -- and the Fed for the last eight to nine years that this is in place, it's not -- obviously people are taking credit for -- administration would be taking credit for it. But I mean, they've definitely have helped it over the last few months with the tax reform but it's -- this doesn't happen overnight, it's been going -- it's a bull -- it's a bull market for eight to nine years for a reason, it wasn't just a market that just came over last year.</s>SESAY: The President doesn't agree, take a listen to what President Trump had to say.</s>DONALD TRUMP, PRESIDENT OF THE UNITED STATES: 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. And had the other side gotten in, the market would have gotten down 50 percent from where it was, 50 percent from where it was remembered that. It was stagnant and it was going down.</s>SESAY: And not once but twice, the market have gotten down 50 percent if the other side got in and the market was stagnant going down. Ryan Patel, can you fact check for us?</s>PATEL: You're going to get him to tweet on me.</s>SESAY: You should be so lucky.</s>PATEL: No, I don't know. You know, that number happens to be what the market was when he got in the administration. I think the fact check is unemployment, jobs have been getting over for the last six, seven years behind it. And I think for him, what has changed from what it looks out today, the Fed is going to get involved now. And this year, you can kind of see them having to step in because of bonds, because of interface are probably going to have to increase, and then what are you going to say?</s>SESAY: Yes, indeed. John who is not here loves to say, if you take credit for the sunshine, you got to take credit for the rain. But there's the other -- you mentioned that the tax plan that got passed before Christmas and being partly responsible for what we're seeing, there's also this whole issue of deregulation. I want you to take a listen to our very own Richard Quest with his take on what's playing out.</s>RICHARD QUEST, QUEST MEANS BUSINESS ANCHOR: Donald Trump was never a major player on Wall Street, that is until he became President. Now he's overseeing an historic rally in financial stocks and cutting regulation whereas he can. One of the biggest moments of the first year was overhauling the Consumer Financial Protection Bureau, it's a banking regulator which the President called a disaster. And he picked an enemy of it, of regulation, Mick Mulvaney to run the very organization he criticized. The first thing the man did was block all new rules.</s>MICK MULVANEY, ACTING DIRECTOR, CFPB: Effective today, we've put something similar in place here to what we did across the entire executive branch at the outset of the administration. To get the outset of the administration, we did a 90-day hiring freeze, we'd put a 30-day hiring freeze here at CFPB. Probably more importantly, we put a 30-day immediate freeze on any new rules, regulation, and guidance. It's in the pipeline, stops for at least 30 days while I get a chance to see exactly what's going on and kick the tires here at the bureau.</s>QUEST: Now those like Senator Elizabeth Warren who helped create the CFPB are furious saying, the right regulation can help stop another financial crisis. Anyway, it's not like the banks are having problems giving out loans in any event but the cuts, well they still keep coming. Relaxing things like the fiduciary rule making it easier for banks to sell products including risky ones at that. For now, Wall Street remains happy, this banking index is up more than 20 percent since the inauguration and if everything we hear follows through, it's going to continue. Richard Quest, CNN New York.</s>SESAY: Ryan, you're still with me, thank you. I want to take up on what Richard said that is going to continue, right, that's the expectation. My question is typically, how did bull markets end up?</s>PATEL: Yes. And overheating component that we're seeing is that we're near the end of this thing. I think what we -- for right now, let me just be very clear, fourth-quarter earnings, corporate earnings are going to come out pretty good and it -- above analyze -- analyst expectations. So it's not like he's going to turn probably this quarter but when you start to see is when the conversation goes to the Fed looking to increase the interest rate, you look at what foreign -- foreign countries stop buying into the U.S. bonds, right? The bond market becomes the higher yields. That kind of has to show kind of what happened before the bubble. The Fed has to kind of step in here. And these conversations are happening right now, so it's going to be very interesting to when --</s>SESAY: Happening within the --</s>PATEL: What I think -- yes, I think what's -- the conversation is, when do they step in? When is this the right time to increase the interest rates? I'm not saying that they're going to do it right now but is an eye to keep eye on for the rest of the year for them because if they wait too long, there will be a bad reaction to this. And so I think they're looking at science of what we happen to saw at the recession in 2007, 2008, there's some signs that are here too, we mind that.</s>SESAY: Yes. The overheating, the melt-up as they --</s>PATEL: Yes. I mean -- and even -- you can argue that the tax reform has kind of given a little bit of a breather just a tad and that's great. But at the end of the day, like you saw today, the reason why the down didn't hit finish because energy stocks came down. All -- so it's -- again, there's a reason for these things that are happening.</s>SESAY: So interesting. Ryan Patel, we very much appreciate it. Some saying this is like a freight train that's going off the tracks, I've heard various descriptions. But then the best I saw was that the Fed is going to have to take the punchbowl away, this has to wrap.</s>PATEL: And truthfully, you're going to have -- someone has to make a decision and it's going to be, if you take credit for the market, you got to take credit for when it goes down too.</s>SESAY: We'll see what happens. See if the President is saying that come that time. Ryan Patel, always appreciate it. Thank you. All right. Well, we are just days away from the one year anniversary of Donald Trump's inauguration. Ohio is one of the states that pushed him to victory, filled in part by democrat to cross party lines. Now the question is, would they do it again? CNN's Martin Savidge went to Ohio to find out.</s>MARTIN SAVIDGE, CNN INTERNATIONAL CORRESPONDENT (voice-over): Anywhere you look in Youngstown are reminders of what's been lost: factories, jobs, the city's population is down by almost two-thirds from the 1950s. The economy wasn't just disappearing here, so was the way of life.</s>UNIDENTIFIED MALE: And I realized that the core foundation of our country is slipping away.</s>UNIDENTIFIED FEMALE: I mean, I got to the point where I did not like the direction that my country was going.</s>SAVIDGE (voice-over): The answer for many was Donald Trump. In 2016 according to the Mahoning County Board of Elections, approximately 7,000 registered democrats switched parties to become Republicans.</s>UNIDENTIFIED MALE: He said he's going to make America first and he's going to bring jobs back.</s>UNIDENTIFIED MALE: Donald Trump says we have lousy trade deals, we fix that, the jobs can come back.</s>UNIDENTIFIED FEMALE: Something that he said that really sticks with me is that he wants to give the power back to the American people and that's something that I can certainly get behind.</s>SAVIDGE (voice-over): I'm with the pastor, a stay-at-home, a student, a machine shop worker, and a union member, Democrats were raised in democrat families who crossed over to vote Trump. We're one year, one year in, how's he doing?</s>UNIDENTIFIED MALE: Fantastic.</s>ANNA PARA, MOTHER OF FOUR: Great. Better than I ever would have dreamt, I mean necessarily.</s>SAVIDGE: Really?</s>PARA: Oh yes.</s>SAVIDGE: Derrick?</s>UNIDENTIFIED MALE: Yes, I agree. Yes, he's doing wonderful. He's staying on task.</s>SAVIDGE (voice-over): We start with a hot-button topic at the moment, how big an issue to all to all of you is immigration?</s>GINO DIFABIO, MACHINE SHOP WORKER: Huge.</s>PARA: Huge.</s>SAVIDGE: Really?</s>DIFABIO: Absolutely.</s>SAVIDGE: In Youngstown, Ohio?</s>UNIDENTIFIED MALE: Absolutely. And as far as I'm concerned, they're stealing jobs of rightful citizens.</s>SAVIDGE (voice-over): It's also about something else, Trump voter say is important, rules and respect.</s>JUSTIS HARRISON, STUDENT: I feel like when people come here illegally, that's just very disrespectful, you don't respect our laws, and you shouldn't be able to come here free willing like that.</s>SAVIDGE (voice-over): A year later, they all still want the wall. As for the President's inflammatory tweets and speech, Gino says he used to cringe, not anymore. So, you don't cringe anymore because you've grown numb to it or --</s>DIFABIO: No, not numb at all, I know what he's done. And I'm starting to get an inkling why he uses Twitter in the way he does because if all he had to rely on is what people say about him, oh my God, I might not like the guy. I love the guy, I love the job he's doing.</s>SAVIDGE (voice-over): Justis met Trump in a rally and says he's not a racist.</s>HARRISON: He was just the nicest person and honestly he -- if he was a racist as everyone paints him out to be, he could have just walked right past me and not even said a word.</s>SAVIDGE: What about the lies? Well let me ask you this, do you think he is a liar?</s>DIFABIO: Do I think he's lying? No. Do I think he's fallen short in some of his goals, we all do?</s>SAVIDGE (voice-over): Economically, they say things aren't getting better. The stock market and their home values are up.</s>UNIDENTIFIED MALE: Industries are booming everywhere I've seen.</s>SAVIDGE: I look around here, I don't see a boom.</s>UNIDENTIFIED MALE: Well in this area, no. But I feel like there's small businesses that are starting to pick up.</s>SAVIDGE (voice-over): Derrick says Trump's tax reform will fuel the recovery.</s>UNIDENTIFIED MALE: You expand your business in the inner city so then my community will benefit from this tax cut.</s>SAVIDGE: Do you think the media gives the President a fair shake?</s>HARRISON: I don't think so at all.</s>UNIDENTIFIED FEMALE: No.</s>SAVIDGE (voice-over): One year later, these voters couldn't be happier. They see achievement, most of all they see a President like them.</s>PARA: He's like tenacious sometimes and says stuff off the cuff like we do, like real Americans do, we're not perfect. I'm tired of suave, I'm tired of polished, I'm tired of the teleprompter. I am. I want my country back.</s>SAVIDGE (voice-over): Martin Savidge, CNN Youngstown, Ohio.</s>SESAY: Next on NEWSROOM LA, a man caught in the middle of the fight over U.S. immigration, how he ended up in a country he hasn't lived in for decades.