anymore? >> powell is the glitch. maybe they had the volume in the cabinet meeting turned up. >> i'm going to make my statement from a vacuum, that's exactly the statement that i make >> give us final trades quick, a name. >> exact sciences. >> josh? >> i can't >> jim >> electronic arts. >> you got nothing >> i just can't. >> you got nothing give me something. i don't care give me something. >> i bought charles schwab, i like it. >> thank you everybody else thanks you as well "power lunch" starts now >> thank you, scott. i'm kelly evans. hi, evan a new year, the same old fears the major averages off their worst year since the 2008 crisis investors are still looking for a bottom we have concerns about the global economy fueling today's action china's manufacturing shrinking for first time in a year and a half the ripple effects and what it means for trade talks. that's straight ahead. and the government shutdown is in its 12 day now. president trump is set to hold a bipartisan meeting of congressional leaders to hammer out a deal that's in just a couple of

hours' time. we're already getting some headlines from the president we'll be live at the white house with the very latest and tesla is taking a big hit today. delivery numbers missing the mark and the company cutting prices we have the road ahead for the electric automaker coming up "power lunch" starts right now and it does indeed, kelly. welcome to "power lunch. i'm tyler mathisen welcome to the new year. the volatility continues in this new year 20 19. the dow down almost 400 points at its low today, shortly after the open wiped out most of those losses, all of them in fact as we're now higher by about 20 points. financials among the best performing sectors for a change. the stock market's turn around coinciding with a major rebound for oil. look at the prices there up 4.3%. prices were down early on, but they're moving up right now, crude at a two-week high

three stocks we're watching, amazon, higher despite getting its price cut to $1800 at evercore sirius xm rallying on upgrade by jpmorgan and take a look at general electric, up nearly 7%, back above $8 it is the best performing stock in the s&p 500 today let's get straight now to what's driving the trading action this hour seema mody tracking it all from the new york stock exchange. hey, seema >> hey, tyler. a dramatic reversal for the dow. down as much as 400 points and now back in positive territory these intraday reversals are becoming a notable trend what is behind it? traders here say it is oil we're now back above $37 for wti crude. art cashin says the fact that oil remained above 44, that is a bullish sign and this outperformers that we're seeing in oil, that's helping a number of energy producers. chevron, bp among others, up in today's trade. that bad news around global

growth concerns still continues after china pmi disappointed a number of its trading partners in asia including vietnam, malaysia, also disappointed. and even in europe, italy and sweden, its pmi came in softer than expected. this china trade index which houses a number of companies that has significant exposure to china, that continues to underperform the s&p 500 names like boeing, caterpillar and united technologies. kelly evans, back to you. >> interesting sweden struggling there, taiwan, china, different countries, thank you, seema straight to washington with the latest on the government shutdown, the president holding cabinet meeting and he weighed in on a number of issues including the stock market sell-off >> that cabinet meeting is ongoing now, going on for an hour at the white house. the first one of the new year. the president has been talking about the stock market in that meeting. he said there was a glitch in the stock market, but he expects the market will continue to go up and it has a long way to go once the trade deals are

settled. he said last month's volatility was just due to a glitch he also talked about drug prices during the course of this cabinet meeting. the president saying he expects to see a tremendous decrease in drug prices. presumably due to pressure by the u.s. government. the president has been tacking about doing something to lower drug prices for quite some time. the bulk of this cabinet meeting here, it really focused on immigration and his proposal for the wall the president is gearing up for a meeting with democrats in the situation room at the white house later this afternoon he is continuing to stand by his demand for $5 billion in spending for a wall on the southern border, the president saying here that the wall is just like the wheel in terms of inventions he said ultimately the wall will work, it will save the united states money and sticking by his demand for democrats to cough up the money now that they control the house of representatives. >> thank you very much so what are they saying on

capitol hill about the shutdown and the big meeting with the president this afternoon congressional leadership elon muey has that for us. >> here on capitol hill, folks are hunkering down into their positions. democrats are still planning to move forward tomorrow with a vote on their plan to reopen the government that plan would fund the department of homeland security through february 8th, it would also provide full year funding for the rest of the agencies that are currently shuttered now, in a letter to her democratic colleagues incoming house speaker nancy pelosi wrote we're giving the republicans a opportunity to take yes for an answer if they reject the deal, she wrote, they would be complicit in the chaos and destruction of the president's shutdown now, for republicans' part, they're not taking the bait here majority leader kevin mccarthy accused democrats of punting this debate on border security and mark meadows, the leader of the conservative house freedom caucus tweeted this today, he wrote, enough with the partisan games, it is time for congress to do its job, protect

communities, support law enforcement, and build the wall. democrats are saying that the shutdown will not slowdown their agenda for 2019. they are also planning to move forward with their signature package to reform campaign finance and ethics laws, guys, they're also planning to revamp the rules of the house so that they would remove the debt ceiling as a bargaining chip in future budget negotiations back over to you. >> ylan, is there any sense of when the shutdown might wind down does it go as long as the state of the union address >> it is quite possible that it goes that long i think what democrats are arguing at least for funding for other federal agencies beyond the department of homeland security there are proposals that senate republicans have supported in the past. this is their attempt at sort of reaching the lowest common denominator. they want to leave the department of homeland security as a separate item of debate, because clearly that's where the big sticking point is. >> ylan, thank you very much

the first day of 2019 trading picking up where we left off last year. a lot of volatility. that's the watch word. the dow starting the day down nearly 4400 poi00 points. should we expect more wild swings in the new year and what should you do with your money? bill stone with avalon adviser and michael vogel sang president and ceo with boston advisers michael, i'll start with you as you passed along some notes that seem interesting to me and relatively hopeful you point to two things. number one, years that end in the number 9, with the exception of 1929, have been pretty good by and large, and the second one is that years that follow a down, a remarkable strong down quarter like we had in the s&p are pretty good as well. >> yeah. i mean, it basically means the market comes back, right unless you think the market is not ever going to be above whatever our peak was in earlier

2018, you know, it is going to make some sense to be invested we are pretty optimistic about 2019 some of the reasons you said, some of the technical indicators are just more gains with numbers, i think but, you know, look, after you had a double digit quarter, and i think our friends that bespoke came up with this idea, if you double digit quarter, there has been 19 times we had that since world war ii from that -- >> double digit down quarter. >> correct double digit down quarter, sorry. 13 of the 19 have been up double digits the next year most of those over 20% the median is quite high there have been four flat ones and two basically down another double digit so very seldom do you get a follow through in this and, look, most importantly, bear markets and huge negative catastrophes like 2008 don't happen when the economy is in

decent shape clearly we have come off the boil to use a phrase, clearly things aren't as strong as they were looking last summer and last fall. but we certainly don't think it is armageddon. we think the market has gotten really cheap, good valuations here that's the basic gist of our story. >> let me turn to bill stone and get your reaction to what mike just said and what your overall thought about 2019 versus 2018 will be. if we're not in a bear market, let me pose the question a different way, is the bull market dead? bill >> i don't think it is i think similar we did some interesting analysis, not exactly the way on the quarter, but said, hey, down close to 20%, you know, did it make sense to buy in again. obviously we know the history, it does. but also looked at whether we ended up going into recession or not. in the end, it doesn't matter. you actually end up in a good place over three years certainly over one year, you're in a better place, you have better returns over the

following year if you weren't in recession. either way it gets to the same point, there is reasons to be a bit more optimistic this year. i do think you're going to see, you know, much of what we talked about, you're going to see the economy slow a bit, we're thinking something in about 2.25% pays over three for last year we think earnings will slow down to somewhere around 5% i think we'll probably beat that but it is still a good backdrop, you know again, not as good, but in terms of a good backdrop and things got cheaper last year because earnings were up over 20% last year if you're looking for a spot to start buying, i think it is a place to look. >> so, bill, you don't see a recession coming what happens if china keeps slowing? >> yeah, i don't see a recession, certainly this year, yet. you do have to worry, china and the whole trade issue is a -- i'll call it a wild card china in and of itself, i think they're going to start -- you heard some of it, will continue

to pump some stimulus in there i guess i'm not as worried that china in and of itself will turn around the trade is always hard i think we'll get to a deal, but that one is a little bit out of any of our hands, right but i think the interesting part is the u.s. can in fact diverge from the rest of the world and continue to grow, albeit it becomes a head wind if the rest of the world is having trouble that's not necessarily true of other parts of the world so i do think it is worth keeping that in mind when you're thinking about things. >> quick final thought, mike what sector do you like most for 2019 and what would you avoid? >> i think avoid utilities, avoid really, you know, deet flatith deflationary game. i would probably be interested in technology and financials if i had to pick two out of ten or 11 >> thank you happy new year >> happy new year frn t. the president is set to meet

with congressional leaders no cameras allowed this time, which may be for the best if you remember how the on camera discussion with chuck schumer and nancy pelosi went last time. i loved it i would love to see cameras here can this team negotiate a deal we're going to dig into that plus, tesla missing delivery targets and the stock stumbling today by more than 6%. it is also cutting prices. are these bad signs for the tesla bulls? "power lunch" will be right back put your data to work on the cloud that drives business. the ibm cloud. the cloud for smarter business. you should be mad at leaf blowers. [beep]

you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

don't get mad. i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome.

welcome back another piece of data pointing to an economic slowdown in china overnight. how much of an impact is a trade war going to have on china joining us is fred kemp of the atlantic council and cnbc contributor. welcome, fred. >> good to be here. >> this is the second survey now in a week that said china's manufacturing sector is shrinking. and it is hard for us to get reliable data on what is happening in can the untri do you think they're experiencing a sharp slowdown and is that behind the sell-off in markets >> it is behind the sell-off in markets now. there is nervousness that the situation in china could actually be worse than it looks. you had advanced orders of chinese goods for in export markets to get ahead of the tariffs, that could have given a little bump last year. and you're going to have uncertainty through march 1st, the negotiating deadline for the u.s. at the same time, you also have seen a slowdown in manufacturing

in europe, you've seen it in the united states. you've seen it in malaysia and taiwan there is a global growth slowdown which is of concern, of course, if china gets worse. it is going to be worse all around. >> what does it mean for the trade talks, fred, which the u.s. and china are about to undergo? there seems to be a split within the administration, maybe that's too strong of a word there but lighthizer seems to want to get concessions out of the chinese and trump educated a lot of the american public about some of the damage that china is doing, they didn't know about it already. but the president himself at the same time wants to see a good stock market how does this get resolved >> there are two schools president trump is in the school of i've got to do the deal, i have to drive up the market and the deal has to make me look good others in the administration feel more fundamentally we're at the beginning of a cold war with china. this is going to be a technological arms race. there is going to be, you know, intellectual property involved,

other things involved and this is going to be generational and not just for a couple of market cycles i think depending where you are in the white house, and where you are in the administration, you're either on the side of let's get this deal by march 1st and move on, or this is generational and let's not give ground particularly in areas of technology and transferring technology to the chinese. >> what do you think the odds are that whatever deal event waits whether it is the first of march or some other point, they can kick the football down the field over and over again, that it will include enough of the points that are -- seem to be important to the administration that we will really genuinely be able to call it a win for the united states? the president certainly will call it a win, whether it really is or isn't because that is his want, he wants to be able to trump at something but what do you think the odds are that we'll really come out with a win here? >> well, i think you could have a win for soybean farmers, a win

for boeing manufacturers, brief wins for some sectors. you got two different market systems at odds with each other and this is going to go on, this can be bumpy for a long period of time. i just came back from a skiing vacation in colorado and i'm thinking of this as a double black diamond year if you're a skier, i think you know that this kind of a year, double black diamond run, is steeper, bumpier, more narrow, when the weather gets bad, it gets particularly treacherous. there is going to be a lot of volatility, not just in the china, u.s. relationship, but volatility in europe, with what is going on with brexit, and nationalism and populism, volatility in the middle east with what is going on with iran and saudi arabia so wherever you look there is risk that's great if you like volatility i don't know where the markets end, but i can predict the path and i think it is probably going to be a double black diamond path. >> fred, on that point, let me ask you about iran, the president was meeting with cabinet members and had a poster

that said sanctions are coming, a november reference to the reimposition of sanctions on iran while he's been very tough on them, they have benefitted from his decisions in syria to withdraw the troops there. and from -- if there say change in the relationship with saudi, benefit from that as well. what is happening with -- is iran becoming more enabled to assert itself in the international stage now? still struggling too much economically. >> it is a confusing picture if you talk to the top officials in the administration about their aim in iran, they'll be quite honest with you, they really don't think they can bring about regime change. but they can make the regimes malevolent activities in the region and around the world more costly that could make it more difficult for them to be able to afford what they're doing around the world. there are a lot of -- >> why then? only to go back to this point about syria, one of the most effective ways to enhance their influence is by america withdrawing from syria, isn't it

>> makes no sense at all to withdraw from syria. and at the same time put sanctions on iran. just like it doesn't make any sense at all to put the screw oz on china for unfair trade practices, but to pull out of the trans-pacific partnership. the fact that these things are contradictory don't mean we're not doing them that's what you saw senator graham doing, trying to convince the president that it wasn't the right course to do it, or if you were going to take this course, you had to do it more slowly and in conjunction with your allies. there is a lot of contradictory signals being sent, not only to iran, but also to china. >> yeah, all right, fred, it is good to check in with you as always, thank you very much. fred kemp. coming up, 2018, another rough one at ge. for today, 219 019 is a brand-nw start. why wynn resorts is moving higher as well by better than 6% we'll show you must see video from yesterday's college football bowl games. and not all of it took place on the field.

it is all coming up on "power lunch.

welcome back to "power lunch. we're checking on stocks today, hologic, price target cut to 39 bucks, that's where it is trading with the 5% decline. they make medical equipment. wynn resorts moving higher on strong gaming numbers from macau. wynn is up nearly 7% now and general electric, the top

performing stock in the s&p today, but still 7% gain, not much to be excited about for investors. stock still down 50% of the past year trading just over 8 bucks. >> for the world of soccer, the most gifted u.s. soccer player of his generation is now the most expensive american soccer player of all time christian pulisic is joining chelsea for $73 million in a transfer he currently plays for dortmund in germany and will remain there until the end of the season. he's just 20 an attacking midfielder, nine goals in 23 games for the u.s. national team. and has become one of the few bright spots for american men's soccer, which saw team usa fail to qualify for the last world cup. now i'm trying to learn everything i can about him >> 20, wow. >> he went overseas at 16, born in hershey, pennsylvania let's get to this story, some pregame tension before the sugar bowl last night. as you can see there, bivo

charged at the georgia bulldog during what was supposed to be a friendly photo-op. there were no serious injuries but you see there the photographs and bystanders nearly got attacked by the horns and a couple came away with some scratches. >> that little bulldog said, that's a bull, man that is really something that is great. get me out of the way of -- >> i'm sick of being a photo prop >> get me out of the way. >> one more time for good measure. look how close that -- >> got some horns and texas won the game still ahead on "power lunch," d.c. drama continues into the new year as government remains in shutdown mode will either side of the aisle budge? no sign of that at least at this hour plus, tesla misses fourth quarter delivery estimates we'll tell you what it means for the company. and chipotle having the best year or had its best year since 2013 despite recurring health scares isnoerneo llth o tte

you about. is this the start of a turn around all of this when "power lunch" continues.

hello, everybody i'm sue herera here is your cnbc news update for this hour. yosemite national park announcing limitations as a result of the government shutdown it comes in the wake of problems with human waste and damage to resources. health officials are investigating why six passengers became ill on a frontier airlines flight from cleveland to tampa on new year's day according to reports, the illnesses may have been connected to water fountains at cleveland hopkins international airport. and the fountains have now been taken offline as a precaution. general motors reportedly hit 200,000 u.s. electric vehicles sold in 2018. sources telling reuters that level was reached late last year, triggering the phaseout of a $7500 federal tax credit over the next 15 months and carls jr. is jumping on the vegan bandwagon. the fast food chain day debuting

a meatless version of the star burger the patties are from a company called beyond meat which counts leonardo dicaprio and bill gates among its investors. that's the news update at this hour back to you, kelly. a check on the markets and the volatility we have seen today in the new year. a major reversal for stocks if you saw this morning, we're down more than 400, now the dow is up 60 the nasdaq is the biggest percentage gainer now. up two thirds of 1%. chevron leading the way for blue chips. general electric and wynn resorts are leading the s&p 500. and check oil, a big rally today, maybe foreshadowing what is going on with stocks. crude hitting two week highs, nearly 4%. a check of how bonds are doing rick santelli at 266 on the ten-year, rick >> yes, since we settled at 268,

we're officially down two basis points for the new year. what is interesting about that, kelly is two year note yields are up two basis points. already opening to a flattening yield curve in 2019. there you see a chart of the intraday 10s we're referencing it has been pretty steady as she goes here at 62, 266 basis points if we look at the dollar index, anything but steady. it has been a rocketship, actually, off very low levels we haven't closed at since the third week in october. never had that sub-96 closing, an intraday trade there on very light holiday markets. if you look at the beginning of november, for two very important etfs, first hyg, the high yield etf, it is fighting a bit, so are treasuries to some extent f you look at the lqd, it is building taking out the important 2018 end of the year higher level that it traded. we want to monitor credit spreads both in etf form and securities form as an early

barometer on changing sentiment, one of 9 the big driving forces, the best collateral, if you want to get the smallest haircut and big institution, it is treasuries that has been part of the buying demand we have seen during periods of volatility since october. tyler, back to you >> rick, thank you very much those falling bond yields have sent mortgage rates lower. it may be hard for buyers to take advantage of that because of the government shutdown diana olick joins us now to explain. hi >> we have come out of the slowest two weeks of the year in housing, if this shutdown drags on, you will see a bigger impact on the mortgage market the biggest issue is the irs, which has an income verification service used by mortgage lenders to validate a borrower's tax returns. that is now not happening. it is creating a big risk for mortgage lenders >> while lenders are closing loans on time, during the shutdown, they're taking on more risk by doing so there are certain items that need to be verified through

government agencies including social security numbers and in certain cases self-employed people, irs tax transcripts and those things are not occurring right now. >> there are also issues at fha, the government insurer of home loans and part of hud. it is operating on a skeleton staff, lenders get automated loan numbers from fha. if there are any problems, they're not likely to get anyone on the phone very fast that could delay some closings there is the agriculture department's rural home loan program. it is a no down payment loan for rural home buyers, a very small percentage of the overall market, but bigger deal in rural states and totally shutdown for now. >> thank you very much, diana. we're less than 9 0 minutes away from a meeting between president trump and congressional leaders in the situation room at the white house. as the government shutdown enters a 12th day. so could there be a deal to come out of this meeting this afternoon or over the next couple of days let's bring in chuck gabriel, president of capital alpha

partners and cnbc editor at large. it seems, chuck, like both sides are really, really dug in here you don't have the votes, mr. president, as jefferson told hamilton back in the play there to pass it through congress, and the president saying, well, you're not going to get your budget through unless you give me a wall. there doesn't seem to be any movement here. >> i may have heard this on one of john's preparatory pieces early in the day we'll see how, you know, whether senate republicans are also dug in with the president. he doesn't believe in going into a knife fight with knives. he goes in with guns he's trying to manufacture leverage by dramatizing this in a situation room which is unprecedented, but also by suggesting that he won't accept anything but $5 billion plus in funding and for the wall in other words, that the democrats have to give in. >> john, what if the republican side led by the president makes an offer to the democrats that

involves some sort of flexibility with respect to the so-called dreamers >> you know, i don't think we're talking about that kind of a deal at this stage, tyler. that was on the table in 2017. and earlier in 2018. and the deal making never got done what the democrats will say is that the president trump seemed to accept the outlines of a deal, then backed away just like he did a couple of weeks ago, just before christmas when the senate republicans and house republicans were ready to take a deal on a punt until february and the president backed away at the last minute i think this is about democrats trying to stand up against the idea that there is going to be a wall at all. if they -- i think their goal is to puncture the fantasy that a wall will take place and john kelly, facilitated their argument the other day, that exit interview from the

white house, the los angeles times, he said we gave up a wall a long time ago. the problem is that john kelly may have given it up and in reality the administration may have given it up, but the president has not publicly given it up and unless he does that, i don't think democrats are going to be willing to pony up more money for him to pretend. >> what of the point, chuck, you pick up here, what of the point that some years ago, man a dozen years ago or so, in another flurry of legislation many democrats supported the idea of a physical barrier to cover much of the southern border >> it is just a great, you know, it is a great footnote, tyler, but it really doesn't have much real bearing today and i think for the markets, what is going to be interesting is that the -- we have this january 11th inflexion point that is really an important forcing mechanism if you will, the electronic tv of the next

paycheck for a lot of these workers. and i think as the media really looks at that, it is going to be seen as a very important point and if we get a nothing done at that point, i think there is going to be a perception this could go on longer >> if they miss the paychecks and people can't make their mortgage payments or rent payments, you're going to see a lot of stories on a lot of outlets showing the pain and suffering of people who can't pay their bills. >> that's where i think chuck's point about how far to the senate republicans go along comes into play. mitch mcconnell does not like shutdowns, he has repeatedly urged his colleagues not to do it he was ready to pass that legislation that would have avoided it before christmas. i think that the challenge is going to be, you know, mitch mcconnell saying i'm not going to do anything if president trump is not going to sign it. that's a real restriction. but the pressure is going to be

mounting on the government, on the executive branch, the president, because it is his government that is shut down and i think mitch mcconnell is going to shove this process along, the deeper we get into it. >> i wonder, chuck, what is going to happen as they both get together and try to strike a deal here in the next couple of hours. is there something along the lines of what failed over the summer that could rear its head once again the president gets his money for border security or for the wall, whether that's $5 billion or 1, chuck, and agrees to do something about the dreamers in exchange >> i'm skeptical about that, kelly. and one reason is if you look, the president is increasingly taking his muse, if you will, from the house freedom caucus, only about 15% of the house republican conference. but they're the ones that really made it very difficult to repel and replace obamacare, which cost republicans the house and they're the ones who basically told him to man up and help to force the shutdown just before

christmas. so i think they have been against this in the past i think that the president not that they're driving his tune here, but i think that that's a bridge too far, that something much smaller and for a shorter period is the best we can hope for. >> john, i was sitting at home last night, peacefully watching the sugar bowl game, and a story comes across, written by senator, now senator mitt romney, very critical of the president. what do you two gentlemen think of that, why did he do it, why did he choose the -- this evening to do it >> it is interesting, tyler. mitt romney has vacillated over the years in his approach to donald trump depending on where he was in his own political journey, but i think now as he prepares to become a senator, at a time when the pressure and the dangers of facing the trump administration are increasing, both politically because of democratic resistance in the house and legally because of

robert mueller getting closer and closer to the president, i think he is setting a marker down that there are limits, there are lines that we're going to draw. he didn't break with the president on policy, on taxes or regulation or anything like that but he talked about the president as a man of inadequate character. subpar character i do think that is a warning shot for the president because we are highly likely, i think, to be in a situation where the house of representatives is going to at least explore the possibility of impeaching the president. then it would go to the republican controlled senate where you need 20 republicans to join with democrats. mitt romney coming out even before he takes office and laying this marker down about the president's character, i think that's a sign that there will be some republicans who might be willing to go along with the democratic effort, don't know if it will be enough, but it is enough to worry the white house. >> so react there, chuck if you

would, to what john said, that kind of marker or is it a flag indicating that mr. romney may be considering a challenge to the president in 2020? >> i doubt the latter, but the timing, i think, i agree with john, the timing is very important and very interesting and it also coincides with the reality as paul ryan spends his last day as speaker, the republican party and it is kind of lost his mojo and the holy grail of tax relief, tax reform did nothing for it we had a thousand point move on the dow a week ago that tax bill got no credit for it so the future -- the heart and soul of the republican party going forward is up for grabs and this is something that wouldn't have happened a year ago. nobody would have taken on president trump. he is very much more vulnerable and he knows this, i think, and it is interesting, even his response to romney was more gentle than it would have been >> gentlemen, thank you very much we appreciate it tesla is coming up short on deliveries and now it is cutting

prices on all of its models. the stock is tumbling today. but how much bad news is this really for the company and president trump meeting with congressional leaders in just over an hour's time. is the new congress going to reach a deal to end this shutdown we have more on the d.c. drama, stay with us here on "power lunch.

look at tesla shares today, tumbling by nearly 7%. as fourth quarter delivery numbers have missed the mark phil lebeau joins us with more hi, phil >> a lot of questions about not only delivery, demand as well as production in the fourth quarter, let's start with deliveries and for tesla, the real question is why did they fall just a little bit short of expectations here? they delivered 90,700 vehicles and the expectation, a little bit higher, at 92,000. not horrific news, but it brings up questions about what kind of demand is out there.

those questions are being further amplified by the fact that tesla is in fact losing its federal tax credit, being cut in half, it was $7500, if you bought one now it is $3,750 that's why tesla announced it is cutting the price on all of its vehicles by $2,000 that news is one reason why joe spack is out with a note today, he cut his price target down to $290 from $340 in the note he says the 2k price cut raises demand and gross margin target questions. look at shares of tesla, also keep in mind that the production numbers for the fourth quarter, coming in a little lighter than many analysts expected most expecting production of north of 90,000 vehicles in the quarter. tesla came in at a little over 86,000 not horrific, but enough reason to give some investors and some analyst oz on wall street reason to pause and say, okay, what is the demand picture like for

tesla. >> i want to ask a dumb and naive question, which i specialize in, when does a delivery count as a delivery when it reaches a dealership or when it reaches a customer and is actually bought by the customer >> well, keep in mind, tesla does not have dealerships. in the case of tesla, it is when the customer takes delivery of the car. now, in the case of other automakers, the dealership is the customer so it is when they take delivery of a vehicle from the manufacturer >> interesting so if i own a chevy, chevy when they say we drived thelivered ty vehicles, they may be sitting on the lot, but they're there. >> they're buying them from the manufacturer they then turn around and sell them to you. >> interesting. >> we're also reminded it is not just the federal incentives, it is state incentives that help make the cars so affordable. as these are paired back, for the model 3, how big of a problem is that for tesla? >> we're going to find out how

much demand is out there will people who were looking at a model 3, at about 50 or $51,000 say, boy, you know what, i'm not getting the full $7500, i'm not as crazy about it. or will they say, look, i like the model 3 and i'm going to follow through and buy it? with regard to the tax credits, the federal one may be phased out for tesla and it ultimately will start to be phased out for general motors this year as well you'll see whether or not or we will see whether or not we see states raise their incentives for electric vehicles, certainly a possibility in a state like california or some of the other states that are really pushing electric vehicles. >> journal had a pretty harsh op-ed about it over the weekend, look, this is a subsidy for the rich, that is who is buying the electric cars and the carmakers are making them at a law so they can comply with local regulations and the cars may be more energy efficient. >> now you're looking at the whole ecosystem there. but in terms of whether or not this is a subsidy for the rich,

these vehicles are more costly because of the battery packs, and therefore most of the electric vehicles that have been sold so far are higher priced vehicles and the whole idea behind this incentive, when it was put in place by the obama administration back in 2009 was to make it a little more palletable for somebody to say, okay, instead of going and buying a gas powered car, i'll buy an electric vehicle, it may cost more but i get the tax credit. >> also supposed to be temporary there, ten years later, by now, maybe there would be more -- the costs would come down or people wouldn't need them, but anyhow, we'll see. thank you so much. phil lebeau joining us from chicago. >> 2018 was a huge turn around year for chipotle. the stock up nearly 50% for the year under a new ceo so the question is, can the momentum continue at that chain? speaking of turn arounds, the dow now higher, it had been down 400 points early in the session. this is the era of big moves, folks. will thei year end rally contine

into january we'll figure it out. isower lunch" tus te rernafr th i am a family man.

i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back

chipole hoping to attract dieters. launching four new lifestyle bowls today. aimed at customers following trendy diets like whole 30, i don't know what that is s. paleo, keto. >> yet, this is all i hear about lately. >> the new menu items come after a great year for chipotle. the stock, the sixth best performer in the s&p 500 last year it surged 50% in 2018. best year since 2013 so are they posed for a comeback joining us now is the guggenheim managing director and kate rogers kate, does the ceo deserve all of the credit for a 50% turn around in the stock? >> i'd say he deserves a lot of it. >> what did he do? >> a ton of investor optimism from the time he was named to date it was up 50% from that point on you know, two things that he

came in and said he was reminding people why they love chipotle, the things they're well known for and removing friction when it comes to the customer experience when you're ordering on mobile or picking it up in stores or if you're in the store, moving you quickly through the restaurant so you can get your order and be on your way i think he's pulled through with a lot of the things he set out to do. >> i was really surprised to look at a statistic on how much of their business is digital it has really grown and it is a huge hunk of it. >> yeah, well i think to kate's point, also, brian identified areas of opportunities that others might have been faster moving towards, like a panera or a starbucks. he quickly caught them up on that he came out and said the brand has been quiet or it's given the loyalty it has with its core group of customers, outside of that group, it's been relatively quiet. i think his marketing expertise

is what everyone's waiting for to gain further momentum. >> is the stock fully priced now? >> i think it is i'm neutral on it. obviously 2019 is going to be a year of bounceback in the margins. i think thereafter it's probably not going to sustain that type of eps growth. it will probably come down into the 15% to 20% or so on that outlook, the valuation does seem to be a little bit stretched in my opinion. >> he says the brand has been quiet, my response has been what the hell they've had all these food pr b problems. >> it was one store, they closed it down, got rid of the food customers had moved on from that. the issues before brian took over were obviously something he was brought on to fix. i think he's moving forward and trying to turn it around with marketing and some of his expertise they have this for real campaign.

>> there was a story in the papers over the weekend that a massachusetts diner at a massachusetts location had found a nail in their food. >> that's right. the company said basically we talked to the customer, we gave them a refund. we're investigating it i think more of an isolated incident with that >> why did keto become such a thing? >> i will say to the company's, you know, credit people are focused on more health conscious options. chipotle's prices are cheaper. they're getting more competitive with those even healthier options, which is interesting. >> is the $15 burrito coming >> yes, that's a great question. i think some of these new items are coming at the premium side of it. that's something to look out for. the demand for quick casual has

moderated. no one else is -- no other brands are expected to grow as fast as chipotle next year within their peer group. the consumer demand has petered out a little bit i'd be concerned about bringing on premium items, these items are about a 25% premium. >> but all they are is a reshuffling -- they're saying we're picking out the ingredients for you. >> they're trying to tell you it's healthy to have guacamole, double the meat. these things are going to come at a premium they plant the seed in your head i think the point is that they're changing the narrative to their healthy benefits and take it away from the conversations of who just got sick there. >> yeah, and the food is fresh it is fresh. >> it's delicious. >> thank you coming up, 2018 was another good year for netflix. it was up 30% in a down market what can it do to keep growth

going into next year how will fed handle 2019 we'll bring it to you after this when the second hour of power go begins you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

we're going to bust into that message to take you to the white house of the president taking questions at a cabinet meeting. let's listen >> in order to reopen the government and get this thing moving forward. >> i'd rather not say it could we do it for a little bit less it's so insignificant compared to what we're talking about. i've heard numbers as high as $275 billion we lose on illegal immigration. you're talking about to complete again, a lot has already been done we've been getting money in. somebody said we didn't spend the money. we have spent it, but we don't pay contractors before they finish the job that's one of the other things

pat and i sort of instituted we like to have people do the work so if we're building a wall, we're paying as they build it. we pay it when it's finished so they do a good job if they don't do a good job, we're don't pay them not all the money has been paid, but the money has been used. maybe you can remember that when you say i haven't spent the money. we want to finish it up. the $5 billion, $5.6 billion approved by the house is such a small amount compared to the level of the problem when you see that the democrats wants to give away $12 billion extra and we're giving away $54 billion in foreign aid, so we give money to countries but we don't give money to our own country which is another thing i've been complaining about and we're cutting that back. it's very unfair when we give money to honduras and guatemala and el salvador and they do nothing for us when we give money to pakistan, $1.3 billion, i ended that a lot of people don't know it. because they haven't been fair

to us. we want to have a great relationship with pakistan but they house the enemy, they take care of the enemy we can't do that so i look forward to meeting with the folks from the new leadership in pakistan but i ended the $1.3 billion we paid like it was water we just pay it to pakistan so i ended that. we ended a lot of other money that's being sent out on a monthly basis and a yearly basis to countries that don't even vote for us in the united nations. we give them billions of dollars, they don't vote for us in the united nations. we want something to help certain countries -- it's not all about the rich countries the rich countries really do take advantage of us because they pay a small portion of the military and they take advantage of us on trade other than that they're wonderful. okay there are countries that are poor that we will -- we don't

want anything from them. we want to help them there's horrible things going on in the world we want to help those people we don't want money from them, we're not looking for that but when you have massively wealthy countries that have very low military costs because the united states subsidizes them, so they take advantage of us on military, they could easily pay us the full amounts, and they also take advantage of us on trade. so when i speak up, i mean that's why i got elected issues like that issues like the border and it would be so easy not to do anything when they say i'm not popular in europe. i shouldn't be popular in europe if i was popular in europe i wouldn't be doing my job because i want europe to pay germany pays 1%. they should be paying 4% they pay 1%. they should be paying even more than that. other countries have a small percentage of what they're saying when i say you have to pull up,

i shouldn't be popular in europe they did a poll, i was at 80% in europe i don't care about europe. i'm not elected by europeans, i'm elected by americans and by american taxpayers frankly so, you know, i think my relationship -- i will tell you with the leaders of europe is very good. a lot of them don't even understand how they got away with it for so many years. i'll say to angela and many of the other leaders, i'm friends with all of them, i'll say how did this ever happen they go like i can't believe it either they have presidents and other people within administrations in the past that allowed them to get away with it some would say no one ever asked us to pay. we have negotiations going on with numerous countries right now to pay a lot of money to the united states for what we're doing for them i wouldn't say they're thrilled. because they've had many, many years where they didn't have to

p pay. now they're going to have to pay. if that makes me unpopular in those countries, that's okay we're doing a tremendous service to those countries and they should at least respect us they didn't respect us go ahead i have to give him -- >> i appreciate it, mr. president. maybe the military has an angle here or a possible -- >> they have no angle. i know the angles. i know every angle they have no angle the military under past leadership, including for many years, was taken advantage of by other countries. allies and not allies. they were taken advantage of and our country has to be respected. we're not respected when we do that, when we're taking -- when horrible things are wahappeningn trade, we have barriers put up, we have tariffs put on we open our country up, we just open it up, where cars are sent into our country with no tax, no nothing and yet they won't

accept our cars. when cars are sent in and they pay no tax, but we're expected to pay 25%, 40%, 50% and we pay nothing, i'll be honest with you, i don't know how people allowed that in my position, allowed these things to happen and we're not allowing it to happen anymore i can be the most popular person in europe. i could run for any office if i wanted to but i don't want to. i want people to treat us fairly and they're not. it's not -- there's no angles. there's no angles. there's nothing -- you know, when a country sends us 200 soldiers to iraq or sends us 100 soldiers from a big country to syria or to afghanistan, and then they tell me 100 times over oh, we sent you soldiers, we sent your soldiers that's one one hundredth of the

money they're taking advantage of they're doing that to make me happy or to make past presidents happy. i've heard past presidents, wow, they're involved in the afghanistan war. they sent us 100 soldiers. yet it's costing us billions of dollars. i could give you an example where i get along very well with india and the prime minister modi he's constantly telling me he built a library in afghanistan a library. do you know what that is that's like five hours of what we spend he tells it. he's very smart. we're supposed to say thank you for the library. i don't know who is using it in afghanistan. but i don't like -- >> it looks like we lost a bit of the feed there. we'll pick it up as soon as we can. that was the president taking questions at a cabinet meeting

he did not, at least so far as we heard it, really talk about the government shutdown. but maybe he will as we go back to the president >> it's the end of the world and we're subsdidizing their militaries by billions and billions, many, many times what those soldiers cost that country. >> did you hear about the mitt romney up ed, what's your reaction to it if you heard about it >> i wish mitt could be more of a team player. i'm surprised he did it this quickly. i was expecting something, but i was surprised he did it this quickly. you know, look, i endorsed him he thanked me profusely. it was very nice but i am surprised we've done a lot he actually says it, i read his op-ed. he said it, you know, he agrees. i don't think he would -- i don't think anybody would have been able to do the tax cuts like i did we got the greatest tax cuts ever we got an wwar approved, we get

rid of the individual mandate. that case from texas should win in the supreme court i mean, it only was kept, obamacare, it was only kept because of the individual mandate. now that that's gone, i don't know how you can possibly keep it let's repeal and replace john mccain voted against it after campaigning for many years, john mccain voted against it he went thumbs down and that was the end of that. for many years, it was repeal and replace and then at 2:00 in the morning he went thumbs down. so i'm a very flexible guy we were part of that lawsuit, as you know and a great judge, highly respected from texas, said the individual mandate is out. that means we should win at the supreme court where this case will go. when we do, we will sit down with the democrats and we will come up with great healthcare. far better far better we'll have everything included we'll have everything included

far better because obamacare's too expensive. the premiums are way too high and the deductibles don't exist. the deductibles, you can't even use it the deductible is so high, unless you get hit by a tractor, you can't even use it. nobody's ever seen anything like it the deductibles are so high. obamacare is a tremendous failure. now that we won the individual mandate, and that's it -- which by the way was the most unpopular thing in obamacare with mitt romney, i'd love him to be a team player, possibly he won't be i'm surprised he acted so quickly. i gave him an endorsement, i was happy he won in utah, i have great popularity in utah. i love the people of utah. i did something for them that nobody else would have done, that has to do with their parks, as you know. that was a big day, a big thing. and we did that for a special

person who is now going to be retiring after 42 years. you know who i'm talking about, my great friend, great senator who is a spectacular man and also for mike lee, who really pressed it very hard. orrin hatch and mike lee the people of utah really appreciate what i did for them hundreds and hundreds of miles of park that they'll be able to now use as opposed to not. and so i was surprised at mitt romney i hope he's going to be a team player if he's a team player, that will be great i will say this, if he fought really hard against president obama like he does against me, he would have won the election does that make sense to you? if he fought the way he fights me, i'm telling you, he would have won the election. but i think he's going to end up being a team player. i think he agrees with many of the things we've done and many of the things we have in mind.

we'll see what happens go ahead, afghanistan. [ inaudible question >> i think india should be involved in afghanistan. i'll give you an example you can talk about our generals, i gave all our generals all the money they want and they didn't do a great job in afghanistan. they've been fighting in afghanistan for 19 years general mattis thanked me for getting him $716 billion he couldn't believe it because our military was depleted now we're rebuilding our military we're getting -- in fact pat was responsible for a lot of the orders for the new f-35 fighter jets and f-18s and all of the things we're doing, including ships and missiles and everything general mattis was so thrilled what's he done for me? how has he done in afghanistan

not too good not too good i'm not happy with what he's done in afghanistan. and i shouldn't be happy but he was very happy, he was very thankful when i got him $700 billion and then the following year $716 billion. so i mean, i wish him well i hope he does well. but as you know, president obama fired him and essentially so did i. i want results [ inaudible question >> we're going to do something that's right we're talking to the taliban, we're talking to a lot of different people here's the thing, because you mentioned india, india's there russia is there. russia used to be the soviet union. afghanistan made it russia because they went bankrupt fighting in afghanistan. russia so you take a look at other countries, pakistan is there they should be fighting. but russia should be fighting.

the reason russia was in afghanistan was because terrorists were going into russia they had a right to be there the problem was it was a tough fight. literally they went bankrupt they went into being called russia again as opposed to the soviet union, you know, a lot of these places you're reading about now are no longer a part of russia because of afghanistan. why isn't russia there why isn't india there? why isn't pakistan there why are we there and we're 6,000 miles away i don't mind we want to help our people we want to help other nations. you do have terrorists, mostly taliban, but isis. i'll give you an example so taliban is our enemy. isis is our enemy. we have an area that i brought up with our generals four or five weeks ago where taliban is here, isis is here and they're

fighting each other. i said why don't you let them fight? why are we getting in the middle of it? i said let them fight. they're both our enemies let them fight sir, we want to do it -- they go in and end up fighting both of them it's the craziest thing i've ever seen. i think i would have been a great general, but who knows these are two enemies that are fighting against each other and we end up going in and fighting and what are we doing i say this, india, great relationship with prime minister modi, he's a great gentleman, great man. he's done a fantastic job, he's brought the country together india, russia, you look at some of the satellite countries that are extremely wealthy with oil surrounding -- i spoke to some of them. i said to a certain country, very rich country, what would you do if the united states pulled out we'd be taken over by the

taliban and terrorists i said oh, then why are you charging us when we have to use your country to send product through? why are you charging us when we send airplanes over our country? we're doing the job for you, why are you charging us? he said to me, very great gentleman, smart he said to me. nobody ever asked me not to. i said i'm asking you not to he said we will not charge you i'm talking about millions and millions of dollars. flights over his country but i said to him, what would happen if we weren't here? he looks at me and he goes we would be overrun we could not defend ourselves. and yet he charges us, but he doesn't charge us anymore. okay yeah, please >> you used the word slowly when you're describing the withdrawal -- >> i never said fast or slow. >> what's your timetable >> somebody said four months, but i didn't say that either i'm getting out -- we're getting out of syria look, we don't want syria.

obama gave us syria years ago when he didn't violate the red line i did when i shot 59 missiles in but that was a long time later and when president obama decided not to violate his statement, that they would cross the red line and then they did and he didn't do anything about it, yo know, making a threat is okay but you have to follow through with the threat. syria was lost long ago, it was lost long ago. besides that, we're talking about sand and death that's what we're talking about. we're not talking about, you know, vast wealth. we're talking about sand and death. now, the kurds, it's very interesting, turkey doesn't like them, other people do. i didn't like the fact they're selling the small oil that they have to iran we asked them not to sell it to iran but the kurds are selling oil to

iran we're not thrilled about that. okay i'm not happy about it at all. at the same time, they fight better when we fight with them you know, when we send 30 f-18s in front of them, they fight much better when they do when we don't. you've seen what's happened. we want to protect the kurds, nevertheless, but i don't want to be in syria forever it's sand and it's death and when we kill isis, if we don't -- everyone says then they'll come to our country. that's true, a small percentage. do you know where else they're going? iran, who hates isis more than we do. they're going to russia who hates isis more than we do we're killing. and then i read when we pull out, russia's thrilled russia's not happy do you know why they're not happy? because they like it when we're killing isis we're killing them for them and we're killing them for assad

we're killing isis also for iran and just while we're on iran, because, you know, people don't like to write the facts, iran is a much different country than it was when i became president. iran when i became president, i had a meeting at the pentagon with lots of generals, it was like from a movie. better looking than tom cruise and stronger i had more generals than i've ever seen. we were at the bottom of this incredible room. i said this is the greatest room i've ever seen i saw more computer boards than i think that they make today and every part of the middle east and other places that was under attack was under attack because of iran. i said to myself, wow, i mean, you look at yemen, you look at syria, you look at every place, saudi arabia was under siege they were all -- i mean, they

wanted yemen because of the border with saudi arabia, that's why they're there, frankly every place was under siege. i actually asked the question, how do you stop these people they're all over the place they have plenty of money. president obama had just given them $150 billion. he just gave them $1.8 billion in cash. i'm still trying to figure that one out. gave $1.8 billion in cash. plane loads of cash. cash from five different countries. do you know why from five different countries? because we didn't have enough cash in the tri-state area to give them $1.8 billion they had to use the currency of other countries. that's the real reason so with all of that, with all of that being said, i did something called terminate the horrible iran nuclear deal. which in eight years gives iran the legal right to have nuclear weapons. iran is no longer the same

country. iran is pulling people out of syria. they can do what they want there, frankly they're pulling people out they're pulling people out of yemen. iran wants to survive now. iran was a power in the middle east they were going to take over the whole middle east. they were going to take over -- that was what they wanted to do. and destroy israel while they're at it. iran is a different country. they're having riots every week in every city bigger than they've ever had before. their currency is under siege, thanks to us a lot of bad things are happening. when we do all of the things we've done monetarily to iran, iran is in trouble you know what? i'd love to negotiate with iran. they're not ready yet, i don't think. they will be but iran is a much different country right now, jeff, than it was when i took over when i took over two years ago, iran was going to take over the middle east and who knows what and they were going to have all

the nuclear weapons they wanted in a short period of time. when i terminated that deal, and then did what i had to do, iran is a much different country today than it was 19 months ago. that i can tell you. >> on a timetable for withdrawing troops -- >> it's a period of time we're withdrawing. but we're hitting them very hard when i met with the generals in iraq, i said to a couple of the generals, why didn't you do this before he said, sir, our commanders were telling us what to do i said, don't you tell them? no, sir, we take orders. they do. they're great soldiers they listen. i do it differently. i sat around and after a few minutes they listened up and they said this is what we should do we were supposed to be out of syria many years ago if you remember, we went to syria for some spot hits and

that was five years ago. we never left. i don't want to be in syria. i go to walter reed hospital and i see soldiers that are so badly injured and hurt, i don't want that i don't want it. i want to rebuild our country. i want to spend money on our military without depleting it every day. i want to spend money on our country. that's what's happening. our military is getting really strong i mean y coui could tell you sts about our military when i first got here i don't want to talk about. one of the things i've told the secretary and other people, we do these reports on our military some ig goes over there, who mostly was appointed by president obama, but we'll have ours, too, and he goes over there and they do a report every single thing that's happening and they release it to the public what kind of stuff is this we're fighting wars and they're doing reports and releasing it

to the public. now, the public means the enemy. the enemy reads those reports, they study every line of it. those reports should be private reports. let them do a report, but they should be private reports and be locked up and if a member of congress wants to see it he go in and read it but for these reports criticizing every single thing -- and even in some cases saying good, perhaps but for these reports to be released, to give it out -- forget about the public, giving it out to the enemy -- it's insane i don't want it to happen anymore, mr. secretary, you understand that. we'll look at the reports. nobody more critical -- it's not fault, i didn't put us there but we're getting out and we're getting out smart. and we're winning. we're winning. okay but just to answer your question, over a period of time. i never said i'm getting out tomorrow i said we're pulling our soldiers out and they will be pulled back in syria and we're getting out of syria, yeah, absolutely

we're getting out very powerfully yes, ma'am [ inaudible question >> we're asking for $5.6 billion somebody said $2.5 billion no, look, this is national security we're talking about just like we talk about the military, just like we're talking about syria or afghanistan or all these different places, i mean, we spend in afghanistan more in one month than what we're talking about for the wall think of that. that's another way we spend in afghanistan more money than most countries spend, except a few it's ridiculous. what i'm talking about is the $5.6 billion the house approved. i have to tell you, the house was very impressive. they stepped up and they went in and they approved. i'm not holding nancy to this, but she said you'll never get the republicans to vote for it

i never saw anything so beautiful in my life the spirit they had -- i'd like mitt romney to join in that spirit we're doing great things we don't need another democrat you know what? i want the democrats to join in it, too. the $5.6 billion is such a small number, literally, it's one month in afghanistan we're talking about national security this isn't just a border this is national security. this is health and wellness. this is everything [ inaudible question >> we're going -- let's see. maybe they have an idea. and i talk, also, daca, but i think we're better off waiting for the supreme court. if the supreme court rules that president obama was wrong, which they should -- by the way, if he was right, then i've been given tremendous power can you imagine me having that power? wouldn't that be scary right? no, if president obama is allowed to do what he did on

daca, then i'm allowed to do whatever i want to do on things that, you know, probably a president, as he said, probably a president doesn't have the right to do. >> how long do you think the government is going to stay partially shutdown >> could be a long time, could bead quickly could be a long time it's too important a subject to walk away from i was here on christmas evening. i was all by myself in the white house. it's a big, big house except for all the guys out on the line with machine guns. nicest machin machine guns. i was waving to them i never saw so many machine guns they don't wave. they don't even smile. i was there all alone with the machine gunners and i felt very safe, ben, i have to tell you. they're great people there are a lot of them. i was hoping that maybe somebody

would come back and negotiate. but they didn't do that. that's okay. look, look, this is really something that should be bipartisan and we'll see if it is i hope it is i hope it is >> you willing to keep the government shutdown until the supreme court rules on daca? >> no, because i think -- no, i think this should -- by the way, if the supreme court would do a great favor to this country, if they would say the president should not have done that, we will settle this whole thing, including really a big immigration policy, not just border security, which is very important. because we would do something with daca -- a lot of the republicans, most republicans are fine with some deal on daca. daca's okay. these are people that have been in the country a long time in many cases, they don't even speak the language of the country from which their parents came >> how are you viewing this meeting later this afternoon

you mentioned border patrol, is this a campaign -- >> all this is is to tell chuck and nancy and some others from i.c.e. and from border patrol and also from local law enforcement. how bad it is, how dangerous it is and why we need a wall. but they know that look, look, when they say the wall's immoral, well, then, you better do something about the vatican. the vatican has the biggest wall of them all. the wall is immoral. look at all of the countries that have walls. they work 100% never going to change. a wall is a wall the other is just -- we can have all the drones flying over the people last night as they tried to rush the border, the only thing that stopped them was the wall if we have drones up there, it's wonderful, we'll get nice pictures. >> $5.6 billion is a small amount -- >> it was never -- by the way,

you know, a lot of people thought it was $25 billion that was for overall homeland security that was for much more than the wall the wall was a piece of that a lot of people said he should have taken the $25 billion that covered a lot more territory than the wall. >> how long are you willing to keep the government shutdown >> as long as it takes look, i'm prepared i think the people of the country think i'm right. i think the people of this country think i'm right. again, i could have done nothing. i could have had a lot easier presidency by doing nothing. but i'm here, i want to do it right. i'm not only talking here, i'm talking about middle east problems and other problems and north korea problems [ inaudible question >> i don't know that he will,iowill,io hope he does i think i have the highest rating in the history of -- i was looking at the poll. yeah, i mean, i don't know why,

but they like me they say i'm the most popular president in the history of the republican party you see the same polls as i do a number that is hard to believe considering i never get fair press or good press. how do i have these numbers and i get bad press? people see the job we're doing people see the gasoline is way down the reason it's way down is because i called up some of the opec people and said don't do it if you look back a few months, gasoline was at $83 a barrel that was going to be bad it was going to $100, some people were saying $125, rick. i made calls and i said you better let that gasoline flow. they did and now it's down to $44 i put out a social media statement yesterday, i said do you think it's luck that that happened it's not luck. it's not luck. i called up certain people and i said let that damn oil and

gasoline, you let it flow, the oil. it was going up to $125. if that would have happened, then you would have had a recession, depression, like we've had in the past when that happened [ inaudible question >> i don't know if he's going to become a team player i hope he does, if he does i think it will be better for him. i think people are very upset with what he did he hasn't even gotten to office yet. he hasn't even gotten to office. and he was very happy when i endorsed him so, you know, i don't know what changed. other than we've succeeded in many of the things i said we were going to do and let me tell you, we're succeeding in others, we're really succeeding in things that people thought were impossible to do. so i think that mitt romney hopefully will be a team player. if he's not, that's okay, too. look, i handle it. i just got rid of -- i wouldn't say -- they say they retired they say that bob corker

retired. they say that jeff flake, wonderful guy, i never even met him and he's hitting me. he was going to tell people how to win in 2020 because 2016 -- he wrote a book about it didn't work out too well, that book because we won in 2016 because we didn't want to wait until 2020 so jeff flake is now selling real estate or whatever he's doing. he'll probably go to work for cnn. that's my prediction bob corker, unfortunately, we had a good relationship then he thought he'd get publicity for himself and his ratings tubed where he couldn't come in fourth in the primary he was going to be a senator bob corker was going to be a senator for another 20 years then for some reason he hit me because he thought it was going to be good publicity it didn't work out too well. so with mitt, i hope he's a team player but if he's not, that's okay, too. i will tell you, we have great republicans. if you look at the way they're

standing up for border security, you'd be very proud of them. if you're a republican or if you're a person that loves our nation thank you very much, everybody thank you. thank you very much. thank you very much, thank you, jeff >> what are you going to do about those markets? >> i think they'll be good. >> bounce back >> we need a little help from the fed. the fed. they're going to be good the trade deals are kicking in >> when will they kick in? >> sorry about that shot at the end, of course we wanted to hear the president. this was in a question and answer session after his cabinet meeting responding to a query about the fed at the very, very end of that. prior to that had been a wide ranging discussion about everything from the border wall to iran, whether daca would be part of a deal to end the government shutdown and saying we need a little help from the fed when asked about these

markets. >> reporter: an unvarnished president trump there. that cabinet meeting was on camera for over and an half. we played the q&a portion the president was happy to have reporters observe him on the first business day of the new year, 2019 the president suggesting there that he might be willing to accept a little bit less than the $5 billion that he's been demanding for border wall funding in this negotiation over whether or not they can get the government entirely reopened here the democrats have said they not going to provide any money for building that border wall. we'll see whether he's willing to compromise at 3:00 p.m. the president's expected to have a democratic and republican leaders in the situation room with him for some negotiations on the ongoing standoff. and also for a briefing from homeland security security on the situation at the border. we'll see whether they're in the mood to compromise or to

continue to dig in their heels the president there, you know, really laying into his critics, including mitt romney, the former republican presidential nominee who issued an op-ed in the washington post today suggesting that the president is not living up to the moral stand that a president of the united states should set for the nation this president responding to that by saying he expects that mitt romney will be a team player in the future. >> he's paba bit of a jazz musician he can go a lot of different places, i was struck where the government shutdown is topic number one on most of the newscasts. more of the time in that give and take was spent discussing mitt romney, it was spent discussing our european allies and their contribution to military spending and iran than it was on anything else. >> reporter: the president hit all the notes there, tyler, to

continue your metaphor the president is stung by the criticism of mitt romney and general mattis, the outgoing secretary of defense the president really criticizing mattis saying that mattis failed in afghanistan and that the generals have been fighting in afghanistan for 19 years he said and what have they got they're not doing very well. he wants to get out of syria he doesn't necessarily feel like he wants to take advice from military leaders who want to stay the course in those two regions of the world the president, very much flexing his muscles rhetorically here all those cabinet members sitting at the table knew what happened to james mattis, the president saying he essentially fired him. >> all right thank you very much on the north lawn of the white house. coming up, economic growth, tax cuts, job cuts, presidential tweets, how will it all factor into the fed's decision making this year? what impact could the difference atilrks?s have on the maet th wl be the topic when we return

welcome back we've heard from the president, his thoughts on a wide range of issues, including the federal reserve in these markets which he previously referred to as having a glitch over the last months or so let's check in where we stand.

the dow has been flirting around the flat line, it's up about six. the nasdaq is up 50 points .75% gained for the technology heavy index. the nasdaq there here are the sectors if you're wondering how this is shaking out. energy, communications are positive by just under 2%. healthcare and utilities are lagging. utilities in particular because interest rates are lower leading the dow in terms of individual countries, jp morgan and ibm, travelers and united health are the laggards. facebook is having a nice day, up 4.5%. take a look at oil, crude had been down a full buck at the lows but settled up at 2.5%. traders are attributing that to a drop in opec production. the biggest in two years. >> what will the fed do in 2019? what are the factors influencing rates?

welcome meghan and steve steve, a week or so ago there were all kinds of stories that the president and mr. powell, the fed chair, might just sit down for a lunch or a meeting face to face do you think that will happen? do you think that's a good idea? >> i think i have a better guess at what they might serve at the meeting, at that lurncheon i think it will happen and it probably should happen it's been a little complicated by the president, who sort of has decided he wants to take on the federal reserve. >> it wouldn't be unprecedented fundament if it did? >> other presidents and other chairmen have met. it would not be unprecedented. it wouldn't be unusual for it to happen i don't see a reason why it couldn't. >> what do you think should the president and the fed chair, who the president said -- how are the markets going to do? they're going to do fine once we get the trade thing settled down and we need a little help from

the fed? >> that's inappropriate. for the president and the chairman of the fed to meet, that's, again, not unpres den unprecedented. but for the president to put pressure on the fed, that's not necessary and inappropriate. it's not the president's purview, that's why the if ped is independent i don't think that chair jay powell really cares what the president thinks if it were more widely spread and members of congress might be complaining, then they may take note >> it's not really the problem, though, meghan you're right, the fed reports to the congress the problem i think is that when the president does what he's been doing, he creates all of this political pressure from every other place that comes out. all of a sudden, every fed decision becomes in the political sphere

i think that in that context, it matters to the fed that it raises or doesn't because of the backlash it gets from the public. >> so i think you're right if the media were to pick this up in a widespread way. that's about it. you're not seeing widespread report of the fed killing off the recovery, acting inappropriately. in the absence of that i don't think the fed will take note. >> i wonder about china. the reports that robert lighthizer might have different objections which of those two forces might win out? >> do you remember what president trump said to joe kernen when he did the interview? we're playing with the bank's money. all of a sudden we're not playing with the bank's money anymore. we're paying a bit out of pocket china is paying out of pocket,

we think we're paying out of pocket the incentive is there for both leaders to come to an agreement. i think maybe what president trump has learned is that yes, he can indeed, hurt china's economy, but there's a slap back on the united states from that you remember, it was a couple years ago before the president was in office, there was scare in the united states and u.s. markets because of a china slow down that's part of what concerns people now. >> this can be resolved in two ways one way is that the sort of superficial way, yeah, we came to an agreement, it's hunky dory and nothing changes. the other way was china was forced to give concessions on intellectual party because it's coming from a place of weakness. the stock market is happy in the short term which of those two tracks are w headed down? >> the first one, i think it

will be a superficial deal i don't think the market cares i don't see the market every trading up when it looks like there will be more tariffs out there. i don't think the market cares about this intellectual property deal doesn't mean the market's right about that i'm saying that's my gauge. >> let me go back to the fed and get your sense of what it may do with interest rates this year. it sounds like they were taking a step back from the idaea of three rate increases to potentially two. there was a split. some people thought two or fewer, some thought two or more. it was a split decision there. talk to me a little bit about that i'm sure you saw today's big takeout in the "the wall street journal" about the level of debt globally how hard is it going to be on some of the borrowers as they have to roll credit over the next year at higher interest rates? do you see that as a threat to the economy? >> yeah, so on the fed first, you know, i think the fed's in a

tough spot going from forward guidance to real data dependence it was always going to be a difficult transition i've thought the fed would hike two times this year. i do think the risk is on the down side. they will be data dependent. while i think the markets are ov ov overdoing, it the macro data is strong i've been warning about this since before it was cool a couple year ago, as long as profits are high and rates are really low it's not an issue given that profits is going one way, down, and rates are probably going one way, up that could be put a squeeze on a bunch of countries that's suggests that as rates go up and profits start to fall, or at least grow more slowly, a lot of smaller companies will get into some trouble. if we were going to have a

systemic crisis like we did in 2008, this would be the spark of it i don't think this will be the cause of the next crisis, it might exacerbate it. >> i want to give steve one last thoughts here. you have a two hike scenario and those are the -- >> these are the fed's numbersinumbers. what we have is the conditions under which the fed says it's going to hike twice. 2.3% gdp unemployment comes down to 3.5% and inflation is at 2% i don't know if we have the next screen, but i have a zero hike scenario which shows -- there you go, the one on the left sounds like a book, the zero hike scenario. 0.5% to 1.9% at gdp. >> deflation. >> pick a middle ground there for one to two hikes. >> thank you very much thank you. and coming up, the big picture for netflix, the company is hoping to do to the movie

business what it did to tv the question is, will hollywood t brdgeonoa r. millionth order. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

hey, batter, batter, [ crowd cheers ] like everyone, i lead a busy life. but i know the importance of having time to do what you love. at comcast we know our customers' time is valuable. that's why we have 2-hour appointment windows, including nights and weekends. so you can do more of what you love. my name is tito, and i'm a tech-house manager at comcast. we're working to make things simple, easy and awesome. just over an hour of trading left in the day and 2019 beginning kind of the way 2018 ended. a lot of volatility.

the dow down about 400 points earlier but basically flat now zap s s&p and nasdaq have moved positive jonathan, the last hour of trading the last few weeks has beentopsy-turvy. but today it has been fairly stable after the big drop at the start. >> absolutely. kind of interesting today. we're seeing a lot less participation in the market today. when you go back to last week, it was a short holiday week, buying was significantly higher, participation was higher today it seems like tit has bee turned off so not really looking for much to happen. a lot of people are watching for what comes out of the white house. but as far as what happened in the last hour, i think that we will stay within this range. i'd love to keep the s&p above

2500 >> explain to us all what happened this morning and why the market did what it did and then come back the way it came back what was going on? who was doing that selling, what was going on >> it seems like old times bad news was on the tape s&p 500 futures were down significantly. the market seemed to find its pace and move straight higher. not real significant buying into this just once again it was lack of participation. the market will move in these vacuums when there is not really enough action going on so yes, the china economic data was bad, but not bad enough to have our futures down 40 way down pre-opening so we continued to get headlines out of washington. the president has been commenting a lot today and that has moved our markets higher >> all right jonathan, thank you very much. appreciate your time meantime it has disrupted the cable business and now netflix is taking aim at the

movie industry julia. >> we've already heard so much about the threat that netflix poses in terms of streaming. just the appeal of streaming and now we're learning just how many people watched a movie called bird box starring sandra bullock. netflix saying over 45 million people streamed at least 70% of that movie in its first seven days so that is a massive number. if all those people had actually bought a ticket to go to the movie, that would be about $700 million at the box office. of course it is not apples and oranges. much easier to watch on netflix than get a baby-sitter and go out. >> and this is happening anyway, so might not be exactly like going to the movie, but it is still taking up that two hour chunk of your time what happens if more start to

watch directly from netflix? i'm sure the theaters aren't happy about it >> well, it is interesting because there is a real push and pull here. and at the same time, netflix is reporting these big numbers but also losing some very popular license content that had been on their platform for instance over the course of january, they will be losing various movies including rogue one, the star wars film, as well as a lord of the rings movie both of those companies will be launching their own streaming services that will be directly competing with netflix over the course of this year. so netflix is both serving as a buyer for hollywood content but also really increasingly serving as a rival and the movie theater chains don't like the fact that netflix put these movies just in theaters and we did see a push/pull with the fact that netflix introduced row ma ed ro oscar bait movie on netflix,

trying to get academy award nominations. they do have to play by the rules when it comes to trying to win some oscars. >> i was going to ask you that very question. i want to see it s if it is in theaters, it is on netflix. how do they thread that needle >> most will watch it on netflix. they are putting it in theaters for the art house crowd, for people who read about how beautiful the black and white cinematography is. and i did go in those first three weeks before it was available to stream because i had read so many things about it, but i'm in the minority there. most people will just watch it online and the fact that they can't tell us how many people watched it, that is an example of a movie where they are using a big art house filmmaker in order to show hollywood creators that they can win them or cscars. and that is the acclaim people care about in hollywood. and the reason they shared bird

box numbers, netflix is really doing this release to sort of get their foot in the door with theaters and also feel out how it works see if they can use the marketing to get more people to watch it online. >> comes down to marketing >> so you have to have a theatrical release to get an oscar? >> you do. that is the rule for now >> for now julia, thank you so much check please that is next

i'm still fixated on the beard trimmer. but there is a meeting beginning at the white house we'll see if anything comes out of it. i think expectations are low i thinks moment of pain is when the first check that those government workers don't get in the home districts of a lot of congressmen and senators that is where the pain and rubber will hit the road >> i've been wachbiaeeen watchie of media articles coming, all over the "new york times" and "wall street journal" and know somehowti showtime is coming out with a series about the 1987 stock market crash it has been in development for about a decade >> the show has. >> this show has it goes back to the 2008

collapse the guys worried they were losing their timeliness but now feeling like maybe they have it again. >> maybe they do i remember covering that crash and it was a scary time. >> 23% in one day. >> it was 500 some points, but that was when the dow was at 2400 or something like that. >> gives us some perspective thanks for watching "power lunch. >> "closing bell" right now. welcome to the closing bell. i'm sara eisen >> and i'm mike santoli. let's go right to the markets. >> on the first trading day of the year, dow at one point down 398 points at the low. but flipped positive about two different times during the session. and is now weaker again. a lot of chatter around president trump speaking does that have anything to do with -- >> it seemed like the market kind of lost a little altitude during that, but made up for the losses coming into t d