>> it is time for "varney & company." connell mcshane is in for stuart. connell: less than a week left of the year. the good times may finally be here. we are talking about the autonomy. the fastest growth rate we have seen in the united states in a decade. continuing to gain steam. we cannot forget about whale. gas prices are tumbling. you are spending it. some of the best retail figures we have seen now and about three years. what does this recovery means for the new year? >> it will be here before we know it. we have it all covered. "varney & company" starts right now. ♪

connell: stock alert. going right to the big board. oil, finding some support around 55-.58 right now. gasoline. that is what we were talking about at the top of the show. the national average is now $2.32. missouri, the first state to join the $1 club on an average. showing us $1.98. thirty-three states in the union now were at least one gas station has a price below $2 a gallon. the cheapest, by the way, $1.65.

baton rouge, louisiana. $1.65. this economic recovery. the real recovery. it really does finally appear to be here. you just have to look at the numbers. can and should president obama be taking credit for this recovery? good to see you. merry christmas. >> merry christmas. thank you for coming on. what has happened on my watch. does it work? >> i think it will take a number of quarters and a lot more good news to get americans to feel

what they have been talking about for years at this point. will he try? >> absolutely. >> it has been an argument or discussion we have had for years. even if your take-home pay has not gone up, you are not spending as much filling up the car so it feels like you have been getting a raise.

it is exciting. both parties should be excited about that. a better economy. the question is, can you draw a line between president obama's policies the last six plus years. he had unbothered control of congress. the two big initiatives that they push through were the so-called stimulus. >> that is a republican counter argument. we will talk about this in a second. by the way, there are plenty of things to get outside of the economy.

there are plenty of things not going great. >> it seems like the republicans would have to stick to some of those things rather than the economy. >> look, when the president and his party controlled everything in washington, d.c., they did two major things. to think the country is better off because we borrowed and a billion dollars? is this just a resilient economy that is divided government. it has brought us to this point. both parties will have their narrative, certainly. good news is good news. >> good to see you. thank you for coming on. appreciate it.

hillary clinton should be the big winner, you would think. lately, she has been looking for support from the last. david asman is with us right now. a run against elizabeth warren. >> the point is, people talk about her being on the left as if it is an unusual position. she is from an the left. when she was the first lady under bill clinton, bill clinton was the compromiser. she was the author. hillary care, for those that have forgot and obamacare on steroids.

a whole range of issues she tried to pull bill over to the left on. she -- it isn't heard dna. all this talk about her being a moderate. >> president obama was on the left with many issues. she was painted as the moderate. particular on foreign-policy issues. >> then on the left since bill clinton left office. they have really controlled the policy face of that party for the last 10 years. there was such a reaction against the war in iraq. that was the huge democratic issue against george w. bush. the democrats that took control of the party were on the left of

the political spec drum. that is where obama gets out of that. frankly, i think hillary will emerge. all of this talk about elizabeth warren on the left and hillary clinton on the right. look at hillary and what she has done. whether it is climate change. you think she will be different than obama with climate change? >> absolutely not. >> there were some things that she has talked about that even rand paul has talked about. more moderate than hillary clinton. connell: we were just talking to god benson about it. look. look at the numbers.

the economy is doing pretty well right now. two dollars gasoline. below it in some states. if you are hillary clinton and you are running for president, do you make an economic argument? >> there is no question that she will do that. president obama was taking credit for all the positive news that he managed to squeeze out. >> he has not done a great job of it now. >> he knows that he will not be running again. he will use all the power he has to do what he thinks to make the country a better place. he does not care about building in the coalition. he cares about what he wants.

he is a very egotistical person. he is interested in his policy right now. connell: let's go to stocks because of all of the buzz about the interview. this is my show preparation. lauren simonetti, joins us, by the way. >> it is unbelievably stupid. i laugh at just about anything. i did chuckle a few times. >> the stock is not moving too much. sony stock is up about 20% this year. it really has not moved through

all of this all that much. only 300 theaters showing the interview on christmas day. it sold out in many cases. it sold out. this will probably not be at amc or regal. when you are that widespread, you are on m 3000 screens not 300 screens. maybe after the weekend we will have better box office numbers. we will keep trying to get those numbers for you. people are renting it for six bucks. connell: blowing my cover of my show prep. >> i would never see this movie. this is just not the type of movie i go for.

>> i have supporting usa and i am supporting and will buy a ticket. connell: thank you, lauren. she is right. there were showed out crowds at the theater. it is unbelievably dumb. >> how many unbelievably dumb movies have made a lot of money? >> trust me, i have watched a lot of them. >> i hear that the north korean dictator was pretty good. >> it is a younger guy. you can get a kick out of it. they have a funny basketball scene with him and james franco. it clearly was the best pr they

could have hoped for with this movie. whatever form they sell live-in, this will so so much better now than it would have if it would have in fact. first of all, those e-mails. again, whoever hacked it was very clever. george clooney talked about this. we will talk about that in a second. he talked about how clever the hackers were. they rolled out these e-mails. sometimes, all of these nasty back biting, backstabbing e-mails. you had no sympathy. by that time, they had the him down any kind of loyalty that exist in this country. the main thing was when george

clooney try to get at least one person to sign his letter, i think we have a quote from the letter, we know to give in to these criminals now. we will open the door for any group that would threaten. we hope that these hackers are brought to justice. we will not stand in fear. >> what a dynamite letter. not one person. not know after. no studio executive. nobody. that is the part of the sony stories that i love. i am going to see it. of course i am. you and i can go together.

connell: stores posting their best holiday sales numbers in years. in terms of the numbers, people are spending more. we will break it down for you right after the break. ♪ ♪

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connell: market check here on finding and company. let's get a stock check for you. the shares today are bouncing back. a 3% gain. we may have just wrapped up the holiday sales. she joins us on "varney & company." >> look at the numbers that we saw on super saturday.

they were saying that global mobile payment systems were up 63%. they are spending online as well. >> you have to look out more sources. i am not doing it, shopping anyway. my wife did. everything is on your phone. one click on amazon. it is so easy to do.

>> you have to think about how people were spending before black friday. >> suspending from off told her all the way in till now. >> this focus on north korea. we are joined by former member of the national security council. we were talking half jokingly about the movie a few minutes ago. what have you made of what we have seen the last couple of week? >> tank for tank.

soldier to soldier. >> you do not get smoking guns. overlapping ip addresses. statements that they have made. it is pretty clear. >> it is hard to tell. the systems have been down for the past few days. this could be a coincidence. >> maybe not.

they passed a resolution about north korean rights. i think they will respond in some way. >> what about president obama's role? much different than how you would expect it to deal with north korea. is the president up to the task? >> you can fault obama for not doing well with north korea. it has been a hard, hard issue. >> with north korea, the option is always more to turn. a stronger cyber defense capabilities. it is about all you can do.

the diplomacy really have not worked. >> we will talk more about cyber defenses later. after the break, and other arctic blast. find out how cold it will be getting. we will get to the weather next. ♪ ♪ (holiday music is playing)

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connell: millions of americans traveling for the holidays, big winter storm bringing snow to the rockies and the upper midwest. we figured on "varney and company" we would check the weather. mario molina joins us from the weather center with the latest. maria: we are tracking the storm system moving through the rockies and it is bringing in some snow across areas of new mexico and parts of the planes across portions of nebraska and kansas but produced more than a foot of snow in states like utah and portions of colorado so we could be looking at snow totals in excess of 20 inches out there along the high elevations of colorado. the storm system will be on the move as we head into tomorrow and will move eastward and bring in snow across portions of the planes and parts of the upper great lakes, places like wisconsin and minnesota.

we will be looking at areas of rain and storms across parts of the midwest especially across portions of the gulf coast. out here across mississippi and louisiana, we could be looking at potentially severe storms as we head into saturday and sunday. that will be a big concern, earlier this week we had some confirm tornadoes across the southeast with that last for systems so hopefully it doesn't happening again as we head into the weekend with this particular storm system. areas of rain forecast farther north across the interior northeast. it will be tomorrow out there for heavy snowfall across the northeast. that will be changing over the next several days. we have winter weather advisories in effect across nebraska and minnesota and snowfall accumulations are generally light. we are talking about three to five inches of snowfall, i hear in the rockies where heavy snow is in place and winter storm warnings in effect.

current temperatures mild head of the storm system, 45 degrees in new york city but look at temperatures behind it, teens in rapid city and denver and like i mentioned over the next several days, and getting a lot cooler, and this is monday morning. low temperatures, 10 in denver, below zero in fargo and you are already cleaned down but a lot colder out there. 20s in new york city, buffalo and other numbers out here. you are below zero in denver and fargo. the next arctic blast is coming up next week. connell: that is more like it. it seems a the velorum right now. that should help everybody out with your traveling and these low gas prices, the only thing they mean is more money in your pocket as we talked about earlier but will they make you buy a house? one real-estate insider says the answer to that is yes and you

will find out why after this. so i can reach ally bank 24/7, but there are no branches? 24/7 it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates. and i quit smoking with chantix. people who know me, they say 'i never thought you would quit.' but chantix helped me do it. along with support, chantix (varenicline) is proven to help people quit smoking. it gave me the power to overcome the urge to smoke. some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. some people had seizures while taking chantix. if you have any of these, stop chantix and call your doctor right away. tell your doctor about any history of mental health problems, which could get rse while taking chantix or story of seizures. don' take chantix if you've had

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so ally bank really has no hidden fethat's right. accounts? it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates. connell: 18,073, we have been flying not quite that fast. all the games we have seen

coming in to christmas. how about will? it is down $50, 5554, finding support around 56, something we mentioned earlier, will prices and low gas prices. let's get back to retail. she watches the retail sector and is part of the company today. we spend all this money on the president and then return many of them. will this be a big year? >> huge year. the big numbers $20 billion. that is how much stores will end up seeing in terms of return. >> does that number go up and down or is it constant? >> it depends how much people are spending but because they went out so much and spent some much over the holiday, we were talking about this, they bought a lot and maybe they can't afford those gifts any more. connell: it is proportional in terms of how much we spend and return.

>> the biggest numbers we have seen, it depends on how stores take back those returns, talking about online shopping, those take returns even more so. than the stores that are authorized. connell: sometimes i feel less likely to return something that gets delivered online and get lazy about it. that could be just me. other people to send those back. >> the reason why is these return policies are still liberal on lined they want you to come online and shop. you saw those numbers, target had 40% increase on online sales. walmart killed in terms of online sales as well. connell: they get you back on the site and then you spend $50. >> you can go back to the store and return it. it is a win/win. connell: are you returning anything? >> i might. something i should not admit on live television.

connell: i get you to admit things you never thought you would say. we keep more money in their pocket but this is an interesting concept, we tease this before the last break. they could also give the housing market a boost. explain that to us. i think i understand but it seems like something i would not have thought of, lower gas prices and what happened? >> it is a cocktail mix, realtors pushing inventory further out saying it is cheaper to commute. you have the builder weird they are looking at the map and saying it is cheaper to build and if the prices stay low will execute selling in bulk so -- connell: say somebody is in a position where they live in a major city or maybe they were barely out side or across the river but they want to get that big house or they want the land and they will buy it in the suburbs but it is an our commute. you say they are more likely to buy that. >> there are studies that span

over the course of 30 years but there has never been a low interest-rate and low gas environment couple in each other so it will be interesting to see how it plays out. it is too soon to tell but so far so good. >> apprenticed in me says that is a mistake. as soon as you by the house you go through it and gas prices shoot up again u.s. that with the big house driving an hour to work and payne $4 a gallon. that could very well happen. how much is the real-estate market contingent how much does it move around with these types of factors? >> in the oil production states, texas, north dakota, they are deeply affected. there was a big boom but now there are major layoffs. connell: i didn't think of houston or north dakota. that economy did great out there but it was all oil. all the shale, and gas industry, they will get hurt by this. what about other areas? >> if people are well off they are not counting their pennies.

it will not affect areas like the economy is stable in terms of household income. >> what about the millennials? do you see millennials going in to buy these homes especially with interest rates really low? >> they have fear of buying but i don't think it will push them over the edge. it will slow oven down from buying that electric car. that does not necessarily push them to buy a home yet. connell: we will talk about that later on. next year will be the big truck, the pickup trucks and large as you thes and that plays in to what you were saying. younger people, he brings up a good point, they can -- i think some of it might be like style but they want to live near urban centers and in new york area they want to live in manhattan or around san francisco they want to live in cities. that is a lifestyle choice rather than something more contingent on gas prices.

>> they want the agility not to be committed too much. they might not keep a job, they are working remotely. the rental market might be affected by a gas prices in terms of commuting back and forth especially for people who work remotely. connell: want to buy a house in the suburbs? >> every time i see those big suburban houses we bought an apartment in the city. is big for our standards but when icy suburban houses. connell: you like it or it scares you? sign me up. connell: they are known for our videos, christmas and politicians, they are taking a look back at the year, the people who made this video next. ♪

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stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. >> stocks are up giving new interday records, volume in is in today. dow jones industrial average up 47 points, nasdaq higher by 30, the s&p higher by nine points. rating at 5530, that change the leadership in the market. mcdonald's, merck, american

express, pfizer and duncan, a lot of health care winners today on the dow. and the s&p 500. many people returning their christmas gifts today. it is friday and then the long weekend. amazon adding 10 million new members. that is the latest from the new york stock exchange. varney continues after this. ♪

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connell: talking about retail, if you watch this program on a regular basis you know stuart has been hitting on the theme of the shift of giving gifts to sharing experiences with people who you know and love. is consumerism dead? >> look and the way people are spending, the way everyone is going out buying things even when they are not buying gifts for themselves. they're buying individual. it is about the experience as we talk about this with the millennials, the ones that are driving this. we see companies like expedia and people going out and dealing with something. connell: do something with someone you have known a long time, how many sweaters can you buy, let's go out and see a

show, weekend getaway. travel business has been helped out by that. >> especially when we're talking about real-estate we talk about how millennials don't want to be free spirited. this speaks to that. and live in different places. and go with them. our friends and jim jab have compiled a satirical roundup of the year's biggest news stories and this is the one stop shop. everyone from the world cup to the legalization of marijuana. ♪

♪ ♪ ♪ ♪ ♪

connell: the years that was, jim jab's co-founder and ceo joins us from l.a. with more, the justin bieber getting kicked into the car, got the biggest laugh and the anaconda thing was pretty good. you had a blast putting this together. >> oh yes. there is no lack of material to fill up a minute and a half of musical comedy. connell: we are in business network and this will get a ton of clicks. already has. i watch the whole thing this morning and got a good kick out of it. how does that translate for you guys into making money. >> we started jib jab in 1999. this is our tenth annual year in review and we use to get the word out but the main business

is actually online greetings so you will see really big christmas business, 50 million people visited this month. this is a way of giving back and spreading a little fun. we don't make money directly. connell: you get the brand out there. did you see the job jab at year end? all of a sudden a greeting from you guys. i am curious from a production point of view. we don't do it this. of lot of effort, smart people -- how does it get done? >> an amazingly talented team of writers, directors, 90 people in the company was compiled in three weeks. these are really challenging. big news as i am sure you know, we're hitting jokes all the way through. it is also a lot of fun.

connell: what did you get in wheat. and get in something visually at the very end. the bill cosby story was big at the end, a lot of things we were trying to get at the end as well as those touchy subjects you want to reference but are very far from funny like ferguson and isis. it is a real tight wire but we do our best. ferguson and kim kardashian photo shoot in the same video can be a tight rope. >> you lead with kim kardashian. that was a no-brainer. the fish in the barrel to get people in. is that an argument around the newsroom? what should we put first? i am sure that wasn't easy. >> top of the list is what we lead with. connell: jim jab, big changes

for health care this year as more obamacare law is going to affect. the individual and employer mandate but the supreme court post the biggest risk to the president's signature law. we will find out why after this quick break.

connell: in 2014 was the first time obamacare's massive changes were implemented in the united states. next year will be a big year for the law as well. the employer and the individual mandate will kick in. we will get a supreme court decision on subsidies. there is a lot to talk about when it comes to health care. peter barnes joins us and let's talk about these cases, looking back on this year i would think some people who get covered, falling to certain categories they are like obamacare but if you look at a polling is as unpopular now as it has ever been. >> a poll earlier this month showed 58% of people want to repeal obamacare and that is not good for the president and gives ammunition to republicans in congress who want to try to do that but the president has pledged to fight republicans who tried to rollback obamacare. take a listen. >> if republicans seek to take

health-care away from people who just got it, they will meet stiff resistance from the. >> but that he says he will beat the republican bills to repeal obamacare at has enough democratic votes to prevent any overrides of any vetos. the bigger threat will be from the supreme court next year. on march 4th able hear arguments in king versus perwow, awful lot to a case in which they upheld obamacare as constitutional. the question is whether the irs can give people tax credits to help pay for health insurance which analysts say if the court says no, it costs 5 million low and moderate income people their credit. a serious setback for obamacare. >> if the court decides to interpret the affordable care act to prevent tax credits to individuals and states who are

relying on the federal league facilitated exchange health-care marketplace, then it could have disastrous consequences for the act. connell: in the meantime the administration is plowing ahead. so far 6.4 million people have signed up for obamacare coverage for 2015 and the administration's goal is 9 million. connell: peter barnes in washington. you have been with us throughout the hour, we work a lot of this out about some good news for a change, not just how bad things are buddies retail numbers are good, stock market is 18,000. we could look for things but it is pretty good. >> i hate to be the dell order. connell: you have 30 seconds. >> these retail numbers are really amazing. i am a little concerned as we go into 2015. some of these promotions are so good and great for consumers, 75% of them across the street,

that is when you merge into these retailers. don't know how this will fare in terms of earnings next quarter. lou: that didn't depress us that much. at the new year. it is the running theme no matter what, new at noon we will talk about this economic recovery. it does look like it could finally be here. strong growth, gdp growth, stock market rallies, down 18,000, hour number 2 of "varney and company" two minutes away. 24/7 it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates.

so ally bank really has no hidden fethat's right. accounts? it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates. connell: the big story, connell mcshane in for stuart varney. you could call it the best christmas present we got this week, rumors of a real recovery, the economy growing at the fastest pace in a decade, will prices pushing gasoline lower and lower. more money in your pocket, you know that if you have done your christmas shopping, stocks at

record levels. dow 18,000 pushing higher it than that. looking pretty good as we move into the new year. stay right where you are. we have our number 2 all over this on "varney and company" starting right now. ♪ connell: a lot of expressions that varney. let's get to our theme of the day we are talking about, the economic recovery is the real deal. we see it in the numbers, to make an argument against it may be. we will talk to some people about it. couple that with the market rally down 18,000, the question is can president obama take credit for all this and should he take credit for all of this. we go to dan henninger her. thank you for coming and. number 2 on the question of the president taking credit we started last hour with this conversation and i do believe if you are the president you can make a statistical argument that

says look where i came in and look where we are now and hammered at home politically. i don't think he has done that effectively but he could. do you think he should or will? >> he will. he will take credit, he will get to it. i think it is a hard sell frankly. we have had 5-1/2 years of tepid economic growth, 2%, the first quarter was negative and often growth has been down around 1% over the past 5-1/2 years. the effect on employment and unemployment has been terrible, many people stopped looking for jobs. the black unemployment rate remains twice the white unemployment rate. we have a long way to go and i think growth for all of 2014 is not going to be 5%. it may be 2.5% and probably below 3% next year. if we have to find the he wrote in all this i think it has to be the private sector of the united states and i think we should

toast them. you cannot keep the private economy of the united states down forever and some corporations have been working hard, investing and their earnings reflected ended is the private economy itself despite the burden of things like the dodd-frank financial bill, despite the burdens of obamacare, the private sector has begun to come back. connell: one thing that is different from the conversation we would have had six months or years ago is real people doing better. we were talking last hour about how we would always say wage growth wasn't there and i know it is not but the gas price story to me is a big story because people have more money in their pockets. pay $2 a gallon gas is better and they feel better about themselves. >> that is happening. energy prices have fallen. it has that effect. let's wind this back to barack obama. his idea of reviving the economy after the recession was this

huge stimulus bill which did not stimulate the economy. he basically out forced the economy to the federal reserve which went through its quantitative easing, brought interest rates downie effectively to zero. the thing about that zero interest rate is a lot of americans whose money is tied up in savings have had no will gain from their savings. those of us who are able to put money in the stock market have done very well but that is not everyone. there has not been much wage growth in the economy so i think yes, there are good signs, there's a large portion of the economy, individuals who are still basically treading water and feeling a little anxious. connell: if this is a real recovery only for the people who are little bit better off and going in, is this something? that is the republican base, helps republicans more than the president? >> republicans have to make that argument but i would say the

market is making the argument which is to say 2014 the republicans gain control of congress is probably good for the economy because they do intend to initiate more pro-growth legislation. they will temper the dodd-frank bill and try to undo the worst aspect of obamacare. back to the oil question they will try very hard to help the regulate the energy industry which the obama administration through the environmental protection agency has been leaning on very hard. they pass legislation that will allow the united states to export oil and liquid natural gas overseas. connell: conventional wisdom would tell you a stronger economy gets stronger before the rates in 2016 would help the party that is in power and if it is hillary clinton or whoever gets the democratic nomination, if you say all those things come true it could help the republican nominee. >> if the republican nominee can make a strong argument for

stronger growth by deregulation, rationalizing the tax system, undoing the damage of the last five years and trying to ride with the private economy as it grows, hopefully through 2015, i think which every individual whether it is the republican nominee or perhaps hillary clinton who i think has a harder case to be made in that area, they are going to gain support from the american people who have been waiting and waiting for this kind of economy to return. connell: no matter who the nominee is. you are not a fan at the moment. in case we have to have you on when i need a question to ask. stay with us for a minute. we want to get stock alerted for you and check the big board, 18,000, almost 74, we are above that mark, full-year trading at the stock exchange, this day after christmas. oil is down 50 bucks from highs in june and today 5529 is where you find the oil price, down 1%.

the national average for gallon of regular is $2.32. missouri, first state in the nation in the $1 club if you want to call it that, $1.98 is the average price of regular gallon of gasoline, we have 33 states where at least one gas station has gasoline below $2 a gallon and there they are on your map and this is our public service on "varney and company," the cheapest gasoline in the country, not maybe that would not be a good idea but if you are near baton rouge it is $1.65 i am told and have no reason to doubt that because it comes from our friends at gasbuddy.com. sony, we talked earlier about sony and the hack and the movie and everything else. the fbi says north korea is behind the hack. cybersecurity experts, some of our own white house -- hackers

disagree with that. are we barking up the wrong tree to some degree? the ceo is with us and dan henninger is also with us. let me go to you. i am trying to establish this. north korea is behind it is that a fair statement or is there some doubt in your mind? >> there is no doubt in my mind north korea is behind it. that is because the fbi was clear about technical indicators that they said were leading it to believe that north korea was behind it but also they are using all sorts of signals intelligence, human intelligence, big microscope pointed at north korea at all times so you will get a lot of people who say it is not north korea because their credibility is in the toy the right now. connell: that probably is but let me get to your area of expertise and you can tell us something we don't know.

have we learned anything from what is happening that might help our future sony, another company, some other big american company that goes through something similar from a technical standpoint and if so what is that? >> i don't think we learned anything from sony and is not really about sony. what you see is north korea posturing and showing it has this capability and iran did the same thing less than a year ago. this is one of these things countries have to do to prove they can do something like this but from a technical perspective what we have learned is we are fair the defenseless and we need a deterrent. connell: that is not exactly encouraging. what about response from your point of view in terms of what we should do? there is already speculation, not sure if we have, we have no way of knowing or confirming that but what should the response before the united states?

>> that is in some ways a provocative question. i completely agree with what david said. we learned nothing from this and by and large we a defense was. at least those of us to operate in the internet rather than the normal internet rather than a hardened internet which is something we don't want to do. is a paradox with the internet is laudable, you stream movies, do e-mail, it is terrific, it is easy, that means it is easy for the bad guys, easy for packers in north korea, china and russia. sony was the tip of the iceberg. they have had many american corporations, and chinese at the department of defense. what can we do? we have to consider countermeasures. north korea's internet was taken down. connell: that is what i was talking about. >> if that was the united states i think that is a good thing. the u.s. in the absence of any technological weapons have to tell north korea, china, the russians, if you do this to us

you have to be prepared the we will do something similar to you. connell: it brings the question that is that our best defense in this case or do we need to build up our defense? i am sure the answer is a combination or do we need to build up our defenses because if we're truly defenseless, the only thing we can do is go back at them? what do you think? >> part of it is we need a clear communication about what is crossing the line. this sony thing at first, we were not specifically saying it was crossing the line we were going to respond and it took along time to do that and the main country we need to communicate that to is china. chinese feeling tons of intellectual property, taking jobs from americans for a long time. we need to communicate what the repercussions for that are and again for their partners in north korea. connell: good stuff with china. thanks to both of you. back to stocks for a moment.

go pro insiders sold shares and lauren did sell shares. at the new york stock exchange, tell us where you are. >> volume is light, the volume on the stack is very heavy, 8.5 million shares so the day before christmas eve insiders could sell their gold pro shares, this is the 188 period after the ipo with that lockup that expired and on christmas eve, an analyst essentials the the go pro hero camera not the most expensive one. the other one's own 130 to $300 but not only selling well but selling out at wal-mart, target and best buy. consumers really like it. it is a high priority but want to point out this is a stock that essentially doubled this year but in the last couple months since a high of $98 in

october is down 30 bucks since then. connell: all right, thank you very much. a lot of people like go pro. larry 11 in chicago, the dow 18,000 has not only gone there but has gone above their. we have been talking about the economic recovery being for real and what the political ramifications are. how about the stock rally? we got 18,000 quickly will we get 19 to 20,000 and beyond? what is the outlook next year? >> it would not surprise me to see us get there quicker than we got to 18,000. the momentum is that way. the economy is improving. the biggest issue, we get this government intervention we have gotten for a long time. janet yellen certainly says she will be patient and patient is another signal for traders down here for people to hit the bottom button and we have a lot of people did that so we're sitting over 1800 again so

without anything unforeseen there are things that could happen that we don't know about but without that you could see more of this a lie believe. connell: good to see you. 2015 around the corner and it may be the year of the truck especially with these falling gas prices. what that means for tesla and other electric car companies. that is coming up on "varney and company" after this.

connell: let's bring david nelson in on "varney and company". big money for the market. what about next year? are you bullish that we continue the crazy run we have been on? >> it is tough to come up with a target for next year. is always the n nona, something we can see. would have thought opec would commit suicide and sent oil prices down? i will use the same matt i used last year. last year i took the earnings estimates and drag them forward. 8% growth in earnings and

hitting 2,000 in the s and p. i prefer the s&p as the target but we are beyond that but if i extrapolate the same earnings growth which analysts carrying right now, gets you about 2250. that is a reasonable target for next year. connell: what will get in the way of that? >> one of my principal concerns is this drop in oil is a two way support. there will be an enormous transfer of wealth around the world. russia is a wild card. vladimir putin seems to get more irrational, stepping down the price of oil and the price of his currency and could also hit here as well. there is a lot of debt exposed to the energy market. of oil went significantly below 40 some of these companies could go out of business. connell: some of its seems obvious and it is a political wildcard but what are you

worried about with regard to russia and its affect global markets? >> politics play affect on economies. you can't ignore what is going on. he seemed able to survive the sanctions and it is part of a broader theme with oil. you see a transfer of wealth. venezuela is on the verge of bankruptcy. connell: vladimir putin could be in trouble. >> very definitely in trouble. connell: vladimir putin himself and what effect that might have. >> this country sits on 85 nuclear warheads. this is a nuclear power. connell: how are we going to get vladimir putin? the answer was oil prices go down and now they have. >> they have taken the stair step down and i don't know if it will be 50, 70 or 80 but we moved into a new >> reporter: it is here for the long term. connell: thanks for coming in. i got the 2250 in my head. the cheap gas prices now and the

effect they are having on a number of things, gary is host of the box car report. gas prices stay $1.65. fill up the suv, cost effective. they are low. the year of the truck is 2015. >> no doubt about that. trucks sales are increasing dramatically even at $3 a gallon. it is so cheap, derek gas cheap, the economy getting better is more important, people are scared of $4 gas, $3 gas wasn't keeping them out of trucks but once you get down to $2 and a better economy no doubt next year will be great. connell: your expertise is looking at the actual automobiles picking up what the best ones aren't testing that kind of thing. did year of the suv, the pickup truck, 18 wheeler's. >> lots of focus next year.

ford f 150 everyone is interested in. some people are excited. gm and fiat going after those on the fence people very aggressively in marketing and pricing with the silverado, they are selling very well. you have that going on. general motors is re-entering the small pickup truck business and this is their answer to the fuel efficient f 150 made of aluminum. small trucks are more fuel-efficient too but people are buying that is a second or third vehicle to play with on a weekend because the economy is so good. they are a different segment. helping out their toyotas introducing a new tacoma in detroit will show, more competition in that as well and the new ram pickup. connell: speak to the executive at least involved in planning to. have they had to change their planning a lot, few efficiency was everything to them, trying to make sure if they made a big truck for you it somehow was

either fuel efficient or you would think it was have they had to change their minds that? >> next year you will see a change in the way they sell these vehicles. was going to be the fuel efficient drug, people are not concerned about fuel efficiency and even though it is a field efficient trucking is not very much more fuel-efficient than the competition. what you will hear from them is when it is lighter can carry more than the other guy, you will be hearing more about these truck kind of things from them. connell: let me ask about something not unrelated, it is still cause but unrelated to big trucks and that is tesla which is a company we talk a lot about, electric cars in general people talk a lot and there's the stock, $225. what is happening with gas prices change your outlook for a company like tesla which does make some things that only rich people can afford to buy anyway but what is your take? >> short term it won't have an effect because these people are -- they don't care. the price of fuel they want a

car that doesn't use gas. to run a test every year, it is only $2,000 but even if gas goes up 50%, which it is probably not but if that happens we are talking $1,000, a drop in the bucket to these people. tesla will be bringing its market and coming out with $40,000 contract car, model 3, people in that segment are definitely going to be more price conscious and looking at total cost of ownership. a lot of people want an electric car also but they won't be the ones that get you 200,000 units a year. you need to convince people who like their gas cars that this is a good alternative mandible be cheaper and greener. that is a tough sell. connell: and gas prices could be high years and they are. markets go up and down. and big sighs prius, and mcdonald's has its share of

headaches. our question should be should you buy that stock. we talk about mcdonald's and its stock after this break.

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connell: we are back on "varney and company". you probably didn't think we would be talking about in all but we are.

pinball is making the big rebound in popularity. of course phil keating from fox news has discovered. he joins us from miami with more. pinball. >> this is space invaders. remember that? video game industry valued at $70 billion a year and a lot of people fought with sony play station and all the video games around, pinball, the popular game, bowling alley of the 70s, would be dead but not at all. in an enormous weight in ball is back. there it is. consumed with the banking and clanging of pinball, they are pinhead 1 and pinhead 2. they are addicted to these games of the 70s. once fought for of replaced by video games, pinball is booming

again. tournaments at every stage, and bouncing battles, broadcast live on the internet. >> indecent that adapts birdie fest. >> play pinball every day? >> 15-year-old attices is the reigning champion. and so many pinball machines at home. >> the 90s over here. >> 16 of them. there's barely room left for their trophies. >> definitely all the lights and sounds is cool when you get a jack pot calling jackpot. that is grade. everyone knows you are doing well. >> i of the physics of it and the actable interaction. i feel i am controlling what the ball does. >> this is the walking dead, brand new state of the art. $7,500 to buy this, one of the most popular games at the arcade

odyssey, ten pinball machines, the most one spot in south florida. two governing bodies, a lot of prize money and who would have thought it was read popularizing what everyone does on the day after christmas like today. >> thank you, stocks with our alert on mcdonald's. mcdonald's putting big size fries on its japanese menu but at home macdonald had its share of headaches. david is here to talk about the stock. not suggesting you should leave. >> a round 2. connell: mcdonald's. you like it? >> let me start with the good news, nobody likes this stock anymore. i did a survey of 30 firms and if you look at all the analysts there are only six with buy recommendations and it is

understandable. this is not a cyclical problem. it is not just a downturn in the economy but a secular issue. i don't think it is a secret that consumer tastes have changed. connell: mcdonald's is trying to figure out who is or who it wants to be. >> others have figured it out. mcdonald's is behind the curve. they are doing a lot of things on the inside that i find comical. in the u.s. they are doing a restructure, the reorganizing of u.s. units into four units. i don't know what that will do. they are just moving the deck chairs. connell: from stock point of view good news people don't like and you do or somebody would because of that? >> i knew -- >> i can't find a reason to own it. look at revenue. revenue in 2011 was $27 billion. analysts projecting $27.2 billion. stock is a two points since 2012.

10,000 stocks out there. what plane that backyard? connell: if you can't make an argument for it don't make someone else do it. the glass is not have full but a quarter full. thank you. that is mcdonald's. is president obama going to take a victory lap on the improving economy we spent a good part of our show talking about? and does he deserve to do that? more "varney and company" after this. so i can reach ally bank 24/7, but there are no branches? 24/7 it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates.

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from the bank where no branches equals great rates. connell: back to your money now. jeff flock joins us from chicago. ashley: team we just got the latest numbers from mastercard. good news today. not so good news, the super saturday. those numbers are out as well. the forecast was for $10 billion to be spent on super saturday. it was better than last year. that is a positive for the brick-and-mortar guys. today, a really big day.

five or six for both traffic and sales. take a look at some of the pit bargains out there today. maybe you see some different retailers. macy's, 65% off sweaters. victoria's secret, 60% off clothing, gap up to 60% off and walmart, $50 off next book. connell: jeff, good to see you. thank you. retail is a big theme for us today. the real recovery. it is finally here.

we have the stock market rally. is this something that the president should be taking credit for? we talked with dan henniker earlier in that hour. the president will realize there are so many tough things going on in the world. the economy and the stock market, that is one thing i can make the argument for. >> i think that it is a fair claim. obama is in a lot of trouble. that means one third of americans are still, are not looking for a job or have given up altogether. there is a lot to be said out there that is gloomy. connell: let me ask you about

young voters in the next election. the last two times, president obama did well without group. maybe they have an easier time getting jobs. where do you see those voters going in the next election? >> it is a really interesting question. it has only fallen by 2% since this time last year. people are really hurting economically. a lot of these issues like edward snowden will take them off the economic track. things like ferguson. really resonate with them.

connell: everybody says you vote your pocketbooks. that does not necessarily have been. yes, we have a vase of things going forward in 2015. we cannot avoid a major issue. that would be the threat of terrorism. jeffrey simon is author. he joins us from l.a. things have changed big time in terms of how we prepare for a terrorist threat. how'd do we prepare? is there something we are not doing that we could do better in preparing for a lone wolf attack? >> the internet has been that big game changer in mobile

terrorism. crossing the entire spectrum. we have individuals as young as teenagers. the internet can radicalize individuals in terms of entering its chat rooms, webpages. it can also be a double edge sword. trying to monitor while protect being civil liberty. basically, lone wolves love to talk a lot. they do their talking on the internet. connell: how do we connect that that?

people make a threat and some of them may be nothing. >> we do not have that and there yet. there we have the individual that actually committed a violent act before he went on his rampage. basically, the lone wolf is still very difficult to anticipate and capture. they tend to fly under the radar. we will have to put a lot of effort into having to try to reduce the time span.

connell: it seems to, more and more. especially lately. we appreciate you coming on today. can we expect records to carry over to 2015? ♪ i'm looking forward to. for some, every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars.

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on to gains. off session highs. new york volume 165 million shares trading at 1:00 p.m. eastern time. the dow and s&p are of. two stocks that we are watching today are sony and microsoft. the reason we are talking about them now is that because of the interview. they did experience a user connection problems yesterday on christmas. they are continuing today. both services are limited. as you can see, both of those stocks showing down arrows. more "varney & company" after this. ♪

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down. >> remarkable if you just take a step back. it just goes straight up. >> no. certainly not. there can still be some kind of pulled back. nothing has changed. we thought isis woodlock a lot of production off-line. none of that happened. it is all about the fed. it had nothing to do with the economy. there is no concept there. you cannot get yield out there. you are coming to the u.s. stock market. connell: let me ask you about the economy.

the economy does look pretty good now. people have more money in their pockets. >> i am optimistic. i am not as optimistic as some. until it gets correct did, we are seeing that pulled back a little bit. connell: good to see you. task getting cheaper by the day. how about that. it means more money in your pocket.

pretty good times in america right now. >> absolutely. really good times. especially for middle america. these folks have not seen raises. lots of them have not taken part in the stock market rally. now, they can go out and shop. >> it is a great point. people on the upper end of the income spec drum has been doing better. you get 17, 18,000 like it was nothing. nineteen-20,000 could be right after that.

it does not affect me that much. it does not affect my day to day life. >> right. a lot of people cap kept on the sidelines because they were afraid. their budgets were really tight because they did not get those raises. even among the wealthy, i think there is a real focus on asset protections. middle americans watching their budget closely. i think this gas production will really help them. connell: the economic recovery is here and it is real. what are the concerns for next year? >> i think the big? is whether it will raise rates and how it will affect the

overall economy. i think that wage growth is still a big issue. a lot of underemployment. a lot of people working part time. those jobs still are not out there. connell: of next, obamacare. we will tell you what to expect on that. coming up after this. ♪ i'm only in my 60's.

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call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now -- and down the road. i have a lifetime of experience. so i know how important that is. connell: let's go to peter barnes in d.c. a big year for the president healthcare law. >> that is right. republicans got some ammunition to attack it. >> a huge political advantage. basically, the stupidity of the american poster or whatever. that is what is really critical. >> most people did not

appreciate those comments from professor gruber. the poll also went on to say that 58% want obamacare repealed. those votes make it there wish next year. the supreme court. it is a follow-up to the 2012 case. this time, the issue is whether the irs can give certain people tax credits to help them pay for their health insurance. a serious setback for obamacare. >> it is very possible, likely event, that that person would be able to continue to afford to carry health care coverage. >> 6.4 billion million people have signed up for obamacare coverage for 2014.

>> thank you very much. peter barnes out of washington, d.c. we will have more "varney &hi company" after this quick breake ♪ yeah... i do... try a new way to bank, where no branches equals great rates. and cialis for daily useor you. helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away.

ask your doctor about cialis for daily use and a free 30-tablet trial. when electricity is generated here's awith natural gasu: instead of today's most used source, how much are co2 emissions reduced? up to 30%? 45%? 60%? the answer is... up to 60% less. and that's a big reason why the u.s. is a world leader in reducing co2 emissions. take the energy quiz -- round 2. energy lives here. so ally bank really has no hidden fethat's right. accounts? it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees,

from the bank where no branches equals great rates. >> the cosby's story was picked at the end. there were a lot of things trying to get in big at the end. you want a reference, a very far from funny. connell: the ceo from jib jab. i am connell mcshane. filling in on "varney & company" today. connell mcshane and rich ads in. >> thanks again.

i am rich and thin filling in for deirdre bolton. this while billions of you headed to the getters and went online to stream "the interview" with new year's eve quickly approaching, we will tell you what you need to know. first, to our top story. working to restore service after an alleged hack attack yesterday. what is the difference between what sony solved with the interview and what they are seeing now? >> there is a big difference. we do not know who is behind it. this has not resulted in anybody's personal information being s