Impressive Presidential Speech Moves Market
UNIDENTIFIED MALE: This is CNN breaking news.</s>CHURCH: A very warm welcome back to our viewers here in the United States and around the world. I'm Rosemary Church.</s>VANIER: And I'm Cyril Vanier. A growing number of democrats are calling for U.S. Attorney General Jeff Sessions to resign.</s>CHURCH: The one time Trump campaign adviser met twice with Russia's U.S. ambassador last year but failed to disclose those contacts during his confirmation hearing in January.</s>FRANKEN: And if there is any evidence that anyone affiliated with the Trump campaign communicated with the Russian government in the course of this campaign, what will you do?</s>SESSIONS: Senator Franken, I'm not aware of any of those activities. I have been called a surrogate at a time or two in that campaign, and I did not have communications with the Russians.</s>VANIER: Sessions issued a statement late Wednesday saying "I never met with any Russian officials to discuss issues of the campaign. I have no idea what this allegation is about, it is false."</s>CHURCH: Earlier, CNN's senior legal analyst Jeffrey Toobin talked about the legal implications of this news about the attorney general.</s>VANIER: He says the first step will be finding out whether it was just an honest mistake or deliberate lie.</s>JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: As a legal matter what we need to determine or what the authorities need to determine is whether he didn't tell the truth because he made a mistake or because he lied. And legally, there's a world of difference between the two. But, you know, based on what the Washington Post said and based on Evan's reporting, we know there were at least two meetings, one, a group meeting with the Russian ambassador and the other, a meeting in Sessions' office, which is unusual for a senator to meet with an ambassador in those sorts of circumstances. I mean, it's not unprecedented, but it is an unusual thing, and for him then to say I did not have communications with the Russians is simply false. Now the explanation that is putting -- that's being put out by the Justice Department is that he met with the ambassador as a member of the Foreign Relations Committee, not as the leading senatorial surrogate for, for the Trump campaign. I mean, that's the kind of meta physical distinction that I'm not sure exists in the real world, but certainly, it is something that merits investigation. I'm not here to convict or accuse Jeff Sessions of anything. But any reasonable prosecutor would say these are statements that need to be investigated by an independent prosecutor.</s>VANIER: Now Wall Street has welcomed President Trump's address to Congress with record-breaking numbers. The Dow soared more than 300 points to close above 21,000 for the first time ever on Wednesday.</s>CHURCH: That milestone comes just 24 trading days after the Dow hit 20,000. Richard Quest gives us his take on the market's reaction.</s>RICHARD QUEST, CNN HOST: The market opened straight into record territory and never looked back. Again and over 303 points, but it wasn't just that, it went right through 21,000, over to 21,115. A 1.5 percent rise in a day, at a time when everybody had been perhaps expecting the market was going to take a breather, having had so many gains and so many records in a row. The reason is very, very simple. Donald Trump's speech to Congress. That address gave people the hope that the expectations will come to fruition. A trillion dollars in infrastructure spending, a tax reform, which eventually will arrive. And greater deregulation, which the president can do without congressional approval. Put it all together, from what I've been hearing in the market, most traders seem to be believe the rally has legs and still has got further to go. Of course, if the expectations don't arrive, well then it's a different matter. But for the time being, I would describe this market as quietly confident in the direction of travel. Richard Quest, CNN, New York.</s>CHURCH: And for more perspective on the market reaction, Michael Hewson joins us now from London, he is a chief market analyst for CMC Markets. Thanks so much for being with us.</s>MICHAEL HEWSON, CHIEF MARKET ANALYST, CMC MARKETS: Good morning.</s>CHURCH: So, the Dow in record territory, crossing the 21,000 mark. What's behind the soaring Dow do you think, and just how sustainable is this?</s>HEWSON: Well, I think on every level, momentum is everything. And what I would say is I'm calling this the FOMO trade, fear of missing out, essentially, in the wake of that speech by President Trump, I think investors are jumping on the bandwagon and basically trying to get ahead of the projected infrastructure spending boom, the building of the wall, you know, investment in railways. Investment in airports. But there's one other thing as well. You're also getting a little bit of an improvement in the global economy. And I think, against that backdrop, and the prospect as well, that the Federal Reserve feels confident enough to start talking about multiple rate rises, and ultimately, what you've got is you've got markets, investors coming out of bond markets and putting their money to work in equity markets. Now, as Richard Quest quite rightly said, ultimately, this is based on a promise, and if that promise proves to be, shall we say, fall short, then ultimately, we could well see this rally unravel, but at the moment, momentum is everything. We've broken higher. The likelihood is that we're probably going to maintain that momentum unless something prompts us to, prompts it to falter and the Federal Reserve may well have a part to play in that.</s>CHURCH: All right, so what would it take to burst the bubble? I mean, the early departure of President Trump's national security adviser, the chaos surrounding the roll out of the Trump administration's travel ban, the destabilizing daily tweets from the president appeared have had no negative impact on the markets, clear joy about the Trump presidency. So what does that signal to you?</s>HEWSON: It signals to me that ultimately, investors are looking at this through rose-tinted glasses, but I think there is a concern, and what struck me over the past week or so, Rosemary, is the fact that the Federal Reserve has virtually done a full reverse on the prospect of a potential March rate rise. They've really ramped up expectations. A week ago, we were talking about a 36 percent possibility that the fed was going to go in March. Now I think the fed is behind the curve on this. And you know, I've said so on a number of occasions. They've switched tax so very, very quickly. If they now don't go and raise rates in March, then ultimately, the market could take fright in that. Because we've gone from 36 percent probability to 86 percent probability in five working days. So the fed has really ramped up expectations here, they now need to deliver.</s>CHURCH: All right. And what impact might this new scandal surrounding Attorney General Jeff Sessions have on the market, if any, given previous scandals and chaos have appeared have no negative impact.</s>HEWSON: I think given the previous scandal, the way the market shrugged them off. I think they're looking through the political turmoil surrounding the Trump administration is really what I would call growing pains of someone who really isn't a career politician and is a little bit fumbling around in the dark. So, I don't expect that to have any negative effects on the markets at this point in time.</s>CHURCH: All right. Michael Hewson, thank you so much. We'll see if it continues to rise.</s>HEWSON: Thank you.</s>CHURCH: Many thanks. HEWSON We will see. Thank you.</s>VANIER: And people in the Midwestern U.S. are starting to clean up after more than two dozen tornados tore through the region. More on the severe weather when we come back.