stories, your stories and your stories, and your intelligence and generosity of spirit and we all love you. sandra: and a beautiful tribute, dagen. and keith, kevin and jo ling next. stuart varney is next. stuart: what a rotten way to hit you. that civil war in islam, that's going to hurt, too. good morning, for investors, the new year starts now, it's already going badly. the dow is going to open roughly 300 points down. why is that? bad news from china. looks like it's sliding maybe towards recession. the world economy shudder again. and calling a war in the middle

of the oil parch, that could not be good news. the president is changing the subject. job one for him today, gun control. and donald trump makes the headline list again. his first tv ad is out and this week he's going right after bill clinton. a big start to the new year on "varney & company." we're about to begin. ♪ i really hate to do this, but the first thing out of my mouth on day one of the new year trading session is the dow jones industrials average is going to go down about 300 points. could drop below 17 k. >> you can blame china, they faulted layer stock market after it dropped to nearly 7%. that means futures go down here about 330 as we speak.

trading begins in 28 minutes. art laffer is with us, former economic advisor to ronald reagan. art, is it slowdown in china, equals slowdown in the economy. >> when you said this is the worst start of the year and i thought you were going to follow through because i have as my first guest for the year art laffer. you switched. but china, the problem is, stuart, we have a mixed relationship with china. you know, we hate china politically, but we love china economically. we should get over ourselves. we should recognize that china is the best partner and ally that the u.s. could have. we and china together have the most phenomenal economic potential in this world and just recognizing that we all do business with china and china's been there and done a great job of prosperity for its people. stuart: what's your objective

judgment of what's going on in china right now. are they to the point of near recession? >> maybe. but they've been growing, stuart, for-- >> that's a big deal, art. they've grown and grown and grown and yes, indeed they have, second largest economy in the world. got it. but if they're slowing down and headed to recession, i know you're laughing, but-- >> no, i'm not laughing, it's not good news, but what you've got to recognize is these things do happen. china does slow down and even i slow down from time to time although that's not very often. you've got to recognize that and china is a huge plus for us. and you can't worry about this week or next week. i will guarantee you three years from now we'll have a stock market-- >> i'll guarantee you in 27 minutes' time the stock market opens way down and china is to blame. hold on, hold on, art laffer, just stay right there. i'm going to get back to you in

a moment and i'll bring other things into the show. the middle east, now, this has the hallmarks of a muslim civil war, shia versus sunni. the latest started when the saudies executed a shia cleric. they responded by burning part of the saudi embassy. they gave diplomates 48 hours, get out of riyadh. barack obama stuck in the middle of this, whose side are we on. i can't believe that's good news for america. >> let's be clear, saudi arabia is a top ally for the united states. they do a lot of things that we do not like, however, they are a better ally than iran and remember, in our history have sided with countries that we didn't agree with, think of stalin fighting hitler. but the problem is that the saudies don't trust us. they saw the president go through the redline in syria

with chemical weapons, saw them do a deal with iran and then they saw late last week when nobody was paying attention because everybody was partying for the new year, the administration said let's put sanctions on some of these iranians doing bad things that we don't like, iran threatened us and we pulled back. saudi arabia now is a little bit on its own. stuart: they're on edge. what happens if one little rocket comes over from iran, over towards the oil fields of saudi arabia? what are we going to do? we've got an aircraft carrier in the middle. >> nothing. ashley: saudi arabia is isolated since the arab spring and our very muted response to that, we did nothing and they felt an ally they had in the u.s. was never there and everything since then has reinforced that. stuart: let me have a look at the price of oil, you would expect that oil would go straight up in the event of this saudi iranian conflict. now it's backed off a bit. it's up 50 cents.

come back in, art laffer, see if they like the response to this one. if the federal reserve, janet yellen, is she going to raise interest rates again in this year, 2016 with all that's going on with the global economy, even though you discount it completely? >> i think she should raise rates and get out of the market altogether and let the rates find their own level. that's where you get the best effect of monetary policy. you know, when you have two low rates, stuart, you discourage people from lending money to the capital markets and to the mortgage markets and that's one of the major reasons we've had such a bad economy for many years, they've held rates way too low and not allowed capitals to flow into the markets. the less she does, the better off i feel. and i think she's basically going to pull out, one rocket that goes from iran to saudi arabia and the oil fields and you've got a spike in the price of oil like you haven't seen in a long, long time.

that would prevent a rate increase. >> that would have them not put another rate increase right away for sure and that would do a lot of other damage as well. this is a very, very serious political issue in the middle east, i wouldn't put it all to oil, it's much, much larger than oil. iran is a rogue nation, bad behavior for a long, long time. when we came into office in '80s and the hostages. the moment he took office they let them go to germany and back. i think that's the same situation today. i think by the time we get to the next president, iran will recognize we won't be soft and weak. stuart: we like what you have to say and you'll be back again in the new year. >> thank you. we've got a problem with

slowing down and saudi arabia versus iran and that's why we have the dow industrial average, the futures there of looking for a loss of what, 320, 330 points as we speak and that's about 28-- 22 minutes from now. down 300. let's get to politics, here it is. the first tv ad from donald trump. roll tape. >> the politicians can pretend it's something else, but donald trump calls it radical islamic terrorism and that's why you call for a temporary shutdown of muslims entering the united states until they figure out what's going on. now, not on this particular show, and look at this. these are huge crowds at a big rally in biloxi, mississippi.

and we've got the iowa caucuses first week of february and new hampshire, south carolina, and mississippi in march. why is he-- >> maybe he figures he lost iowa if you look at the polls now, ted cruz is up and cruz gained a lot as ben carson declined, maybe trump figures he doesn't have to spend money and time there, that's kind of over, he's got a big lead in new hampshire and all about spectacle, as you said, he had a big crowd and went down south to mississippi. ashley: i would say gambling, but he has his own casinos. stuart: he used to have. and an iowa caucus, where they get together in gymnasiums and farms, that's different from new hampshire and pulling the lever and dropping your ballot in a box. you can affect that more. >> it will be interesting how much of his own money he spends. stuart: the guy a fascinating.

and any way you slice it. >> you can't deny it again then you don't know really where people stand until they go to the ballot box and actually vote. stuart: well said. this is a very big day on "varney & company" for all kinds of reasons. there's news coming thick and fast, look at this, look who is back. ♪ >> this is lauren simonetti, back after maternity leave. i hope mom and child are doing well. >> yes, i'll show you pictures in had a little bit. stuart: we want them. >> great to see you guys. stuart: give us the news. lauren: mississippi flooding and the river cresting to levels not seen this time of year since the 1800's. as a result, they're issuing emergency weather warnings, more than 30 people have died and the worst may be yet to come. some locations along the river in missouri and in illinois, they're rising and the flooding might worsen in some of the southern states.

we're watching that for you. then you have the armed protesters, and took over in a wildlife refuge and they expect to stay and protest as long as it takes, they're protesting the sentences of fo local ranchers convicted of arson. and some say they started the fires to cover up poaching and the judge ordered them back to prison. "star wars" "the force awakens" 1 1/2 billion dollar globally and still has not opened in china. that happens this weekend. and yes, thank you so much for the welcome back. you want to see the pictures? >> i want to see them right now. >> baby ray, named after my dad and father-in-law, look at that smile. >> look at that picture. stuart: she's beautiful. four months. >> three months tomorrow. she's got a little light rattle in her hand. a happy baby and finding her

voice and kick her legs. you'll know this from your granddaughter and learned what she sounds like and big cheeks, i want to pinch them. stuart: that's the way to start the new year. thank you. now this, oh, deja vu all over again. i'm sorry to say, everybody, i said i think this was the jets year. i jinxed them. ashley: the varney jinx. stuart: i'm sorry, but don't transfer your allegiance to another channel. what about this? president obama preparing executive action on guns. he wants to take legal weapons away from law abiding citizens and look who is back as well. joins us at 9:45 this morning, that would be judge andrew napolitano. hey dad.

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>> this is the first trading day of the new year, first, look at that. dow is down 300 points. the stocks that did so well last year are falling out of bed this morning. first of all, we've got apple, that's business in china, china is slowing down. apple is going to be around 102 when we open up today. remember last april it was 134. looking at amazon down $15 per share and facebook is down. that's down what, 15, $20. facebook is down $2 or 3 per share. i think the big news is apple down around 102, again, that's way down from the high of 134. and i think the problem with apple is, it does a lot of business in china and we have news this morning that china really is slowing down. so candidat so-- >> you have a lot of magical

thinking about china, all the money they spent to the local government and invested and the chickens are coming home to roost. ashley: china's market, i think the structure is poor and circuit breakers were confusing today, and people ran in and people sold off and new rules on friday, people unsure what they mean which will prevent people from selling off in these situations. they ran for the exit. i think there's confusion and fear in the markets that may not respect how bad the economy is. manufacturing it down again, but this is a market that's not up to snuff when it comes to operating properly. stuart: here is another negative and this is the internals of wall street. can we put up that term, amazon pre-market board again, please? we're going to be down, $15, $20 per share on amazon, we're down 68. think of it like this, if you

own amazon and made a huge profit last year, you think that maybe this market looks shaky so you sell the thing today and you've made a nice profit, but the result is, you don't pay the tax on that profit until april of 2017. so maybe you can afford to sell it now. you don't have to pay the profit tax for 14, 15 months. and a clinton presidency and taxes go up. stuart: don't say that. the other story today what i'm calling a civil war between the sunnis and the shia, saudies versus iranians. walid phares, i think we've got you on the phone. >> yes, sir. stuart: what do you say to this? i'm saying that it's a civil war and i'm saying that one little rocket that goes from iran to the saudi arabia, you've got yourself a hot war and what do you say. >> that's true. and begin with the narrative, civil war is usually within a country. of course, between brackets, it

is sunni shia confrontation. retalent this is the largest middle eastern conflict since the arab-israeli conflict. this is not just iran, there's the regime and hezbollah and other forces in the region and coalition and saudi arabia has the eau, kuwait, bahrain, potentially jordan and egypt in the future if it escalates. we're talking about world war i type confrontation. and eye missiles sent on the saudi oil fields that's an economic catastrophe. stuart: i'm short on time. thank you for joining us. i wanted our audience to get an appreciation and understanding how important this is, iran-saudi fight is for all of us over here and for our money. dow futures are going to be down 320 points. and bill clinton begins campaigning to hillary later

this morning and donald trump is going to go right after him. more on this, watch this, next. >> your defense has got a problem. she's married to a person that's a serious abuser and i mean, at the highest level.

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> >> donald trump continuing attacks on bill clinton as bill officially starts campaigning with hillary. now, listen to what donald trump had to say about that. >> hillary clinton's response has been well, you're a sexist. do you think she'll continue to go after you as a sexist? >> no, i don't think so because her defense, she's got a problem. she's married to a person that's a serious abuser and i mean, at the highest level and she, you know, she's not an innocent victim and you look at what happened with some of the people that he took advantage of and then she gets involved. so she's not like the innocent person sitting by the side and, you know, with tears in her eyes. stuart: strikes me, mary, that the political theater now shifts to trump versus bill. what do you say, who wins? >> bill is fair game if hillary has him out on the campaign trail and donald trump is

right. bill clinton was a genuine abuser and he didn't just abuse some women, he abused subordinates. if you imagine if that happened in the private sector, look at former hp, he went out to dinner and got fired. bill clinton was having sexual relations in the white house with a 22-year-old. ashley: not only that, but a serial abuser. stuart: and hillary clinton, trump is going off hillary. >> she covered up for him, a hypocrite and bringing him out on the campaign trail. it's not just the sexual abuse, but bill clinton was taking money from governments that would lobbying the state department when hillary clinton was secretary of state. stuart: we're close to the opening bell. i've got to cover the wall street first trading section of 2016, it's going to be ugly. let's stick with it, we'll show you how it opens in just a moment.

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>> it was not until reagan took office. they let them come back. i think it is following the same

political scenario we are seeing today. the next president of the united states, iran will recognize we are not going to be weak. five seconds away. the first trading day of the year. it is 9:30 a.m. i think we are in a position to check all 30 of the dow stocks. i believe all of them are in the red. going down so sharply. we are down 176 as we speak. the first opening day of 2016. scott joins us from chicago. what is going on with china? are they in fact headed towards

recession? >> people have been saying that for a long time. combine it with the fact that they are generally superstitious. it is really a knee-jerk reaction. stuart: we are down 240 points as we speak. because of china. is that the reason we are down? >> i think some of it. europe, for an example. however, the bigger concern, ruining the middle east. stuart: scott, the theory is that china is slowing dramatically. that drags down the entire global economy.

>> i do not know. we should not be surprised. it could be even worse than that. i agree. the rest of us. maybe a little bit of a bond of bottom of oil. stuart: iran to saudi arabia. we all have a problem. look at the big-name technology stocks. amazon netflix microsoft facebook. that would be google. all of them. now we are putting percentages here. 2% down. that is a selloff. if you made a big profit on these stocks, you do not pay the

capital gains taxes of next year. what do you say? >> i think, again, these are all legacy stocks now. they have gotten so good at what they do. if it is one thing that you need to cash, it is another thing to try to use alternate investments. i do not expect a huge wholesale unloading. cheryl is waving a piece of paper at me. netflix will go to russia this year. >> this is my stock of 2015. this is the stock to watch. look for a buying opportunity. i think that this is part of the big names of 2016. i am not a big stock picker. it keeps getting better and

better. >> there you have it. and vest her advice from cheryl casone. now i can show you all 30 of the dow stocks. that means every single one of those stocks that make up the dow industrial average are in the red. we are down, as you can see. we are down 350 as we speak. it is china. it is the muslim civil war. >> those are names to watch. >> on the other side, we have apple. it looks like it is closing in on $100 per share. weighed down. you were always bullish on apple. you buy the thing at $100 a share. >> yes. absolutely.

long-term investment per spec is. stuart: let me show george tenant into the dow industrials. keep going like this and we will drop below the 17,000 level. that is a 2% drop as we speak. nike is the biggest winner last year. it has a lot of exposure. >> the problem is a lot of overseas growth. the biggest profit for nike. the business was up 30% in the most recent order. problems in china will certainly hurt nike's bottom line. >> the lowest level since october 15. there you go. down 347. a look at oil. not the reaction that a lot of people were expect doing.

we were up a lot more than this. we are still at $37 a barrel. popping up to $40 a barrel this morning. what is going on between saudi arabia and iran. explain, please. >> may not be serious without overhang. yes, demand is almost double. we have almost four times. out there with oil in them. a lot like i did say earlier. getting closer to being traded out. stuart: would it be good news for a lot of companies and a lot of countries if oil did spike back up again? is that good news for other people? >> that is what we talked about

all last year. higher oil prices. energy rich economies. that hurts the consumer again. all that falls at the gas pump did not make it back into the economy. that is a problem that i think most of us are worried about. cheryl: oil prices. i am not saying that is behind political tension. ashley: iran will be pumping about more oil. there is a lot more that supply coming. stuart: is a good news for the american energy sector if oil does go back to $40 a barrel? >> well, no question. you will have more efficient competitors. it will also be good for places like russia.

stuart: how about the price of gold? as expected, is up a little bit this morning. a gain of 1.6%. that is not exactly a surge. why is gold not searching surging with all of the news out of the middle east. >> we do not have an inflation. some sort of perceived armageddon. we do not really have that on the plate yet here. it is hard to get really behind gold did i think gold is more of an inflationary plate than anything else. such an inflationary environment gold has a hard time. stuart: keith, would you second that? >> i don't know about a 10-foot pole. maybe eight and a half right now. >> i will let old sit.

stuart: president obama, we hear, is preparing is a kid if action on guns. we understand proposal should be released after today. what the president is doing. he will become the worlds biggest world's biggest salesman if he goes through with it. >> absolutely. there is no question. this guide does not understand what planet he lives on. they will jump again. >> put those gun stocks back on the air again. they are slightly down today. that is a good chart. that is a chart and a half for smith & wesson. i wonder how many more guns can be sold to put those stocks up. >> here is the thing. there are two ways of thinking.

thinking this will hurt gun companies. more likely, we will see a pickup in gun sales. a pickup. announced this week i the president. those stocks are stocks to watch. they may be buying opportunities today. >> cavaliere delta sold enough guns? >> 2.2 million gun permit applications. 2.2 million. is there room for any much more? >> oh, there is. those stocks do not in the day lower. >> okay. stern ruger up 14% since the san bernardino massacre. smith & wesson up 19%. 6% san bernardino.

we have fiat chrysler. that stock is way down. bring this all together, please. explain what is going on. nicole: low was that a 91. under its umbrella for 30 years. spun off the last 80% stake on sunday. fiat chrysler. focusing on his goals. including billions of dollars in investments. big things for jeannie. open to that. pursuits from other companies. did not say which one. he has made it known. does not seem to be fighting on that one just yet here it a merger of some sort would not be a sign of weakness. just a consolidation that we are seeing in this industry.

it really has not done much over the last couple of months here. stuart: fiat chrysler down. thanks a lot. check that big word. now we are down 369 points. 2.1%. the dow getting pretty close to breaking the low at 17,000 mark. all 30 of the dow stocks in the red. all of them. every single one. just going across the board here. down we go. 375 points. >> i was going to say that. those are the biggest losers. those are oil names. stuart: that is interesting. why would they go down at a time where oil is up. ashley: it is just downright momentum right now.

stuart: the dow industrial average down 384. this is turning into a tumble. we are 12-13 minutes into a trading session. we continue to head lower. can we look at some of the big-name technology stocks that are believed the big losers as of this morning. ashley: down 5.2%. netflix is down 5%. so much for your pick. >> my story stock and i will stick with that this morning. stuart: amazon is down. $25 lower. netflix is down 6% now. microsoft is down 2%. that is $1.20 down.

from my point of view, that is not that bad. $100 per share. it has to be called google. down 3%. that is a $24 drop. the dow industrials now down 388. this is a significant drop. why is this happening? it started overnight when china closed its market. they had circuit breakers. they kicked then. the market was closed and down it went. cheryl: 10 months. stuart: is china sliding towards recession? if it is? what does it do to us? what does it do to developing countries which rely heavily on china? cheryl: nobody is talking about several top financial executives that are still missing.

we have seen china's government take some very frightening actions. stuart: keith, i think you are still there. tell me about the easy second is in financial companies that are still missing. >> here is the thing. we have diffuse responsibility. in china, we have one individual that is responsible for a lot of everything that has happened. the fact that these guys are missing, is very significant. they are sending a message. they want to get these people out of the marketplace. the fact that they cannot be found is extremely disturbing. however, in china, it is exactly what i want to see. they are very serious about enforcement. very serious about anticorruption measures. many of them will get a long

walk in the adobe desert. stuart: two and a quarter percent. financial stocks. goldman sachs stocks down particularly. what is the point of asking or financial our financial advisor were stocks are going this year? does anybody know? does anybody have a clue where this market is going? >> no. no one trusts the stock market or the stock pickers anymore. when the resorts down 6%. these are casinos. an interest in macau which is china. look at that. 6% down. i'm going to change the subject to welcome back a fine performer.

first of all, let me introduce. president obama is preparing is negative action on guns. judge napolitano is here. great to see you back. >> are you referring to me or president obama. it is good to be back. happy new year. what is the president likely to propose today? they have not put anything in writing yet. one is to require background checks for vocational sales. you sell me your gun. you are not in the business of selling guns. congress has accepted you from the application of performing a background check on me. the president wants to change that on his own. that is incredibly risky for him.

you cannot change that law. >> he wants to change it, but he cannot change it without the law changing. >> i think that it will be invalidated with the core. i think he wants to give the impression that he is changing it. the base of the democratic party. he is not stupid. stuart: let's say that i sell my gun that i have to you. am i supposed to do a background check on you? how on earth could i possibly do this? >> instead of buying a gun from you, i buy it from a gun shop in new jersey. the gunshot gets a background check from the state police. they get it from the database. the fbi making it available for the state police. private individuals cannot tap into this database.

a lot of sensitive, personal information there. that is the good side about this. the bad side is the background checks are only as valid as what is in the database. if i have never been adjudicated man's man, he can order all the background checks that he wants and it will not prevent an undocumented madman from getting his hands on the gun. stuart: i think that the president did change the subjects. we have a shia sunni middle war. absolutely falling to pieces. >> we have the stock market collapsing. we have china in dire distress. there is another mantra that these folks have. this is pushed aggressively by hillary clinton. no-fly, no guns. you are on-the-fly list.

you cannot be trusted with a gun. that is mixing apples and oranges. you get on that list by a bureaucrat checking a box on a piece of paper. >> why not break that confidentiality between person, custer, client. if you do that, you would change who gets guns. >> why not let more people carry guns. the madmen chewed up places. somebody else shows up to stop them. they run. they flee. they kill themselves. stuart: you are coming back later on the show. i hope so. more people died between christmas and new year's than any other time. we have more on that later in the program. college football joined new year's eve. the ratings slip 30%.

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stuart: the regular season is over. playoffs begin. he was going to the super bowl?

>> stuart, i love a good story in sports. a super bowl victory. >> is that your prediction? >> i am calling for that now. the carolina panthers went 15-one this season. i do not why i do not seem to really buy into them yet. it seems to be the odds on the choice. some teams are very strong. their final 10 games of the season. seattle very strong. i like the seahawks. stuart: you are hedging. the super bowl is going to be, tell me again. >> i think i may be stronger in my thought of picking stocks. >> do not hold me through it.

on new year's eve, they have these college games. the ratings were terrible. they were down 13%. that is still a huge drop. record ratings for the semi finals. they say that they will not stop doing this. i think that that is what the issue is. busy doing other things. living in new york, how come you do not have time? there is just too much going on here. you are either on your way to a party, or you are getting ready. not just because the games were blowouts. january 11. it is always about the placement. stuart: rival the super bowl.

>> college football right behind the nfl in our country. five weeks from today. who is in the final? it will beat lampson and alabama. stuart: i want to watch. i really do. happy new year to you. we are in selloff mode as of right now. 350 points give or take. a civil war between, among muslims. iranian diplomats forced out of saudi arabia. tensions real high. ralph peters on that next. second hour. varney and company two minutes away. ♪

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>> any way you slice it, this is a rough way to start the new year, a selloff for the stock market, a 2% drop. look at the 30 dow stocks, all of them are now in the red, moments ago we had chevron move to the upside because the price

of oil is now up over a dollar a barrel. i can't explain that, with oil up a buck a barrel, why is exxon and chevron two dow leaders on the down side. more in a moment. big name tech stocks, last year, they're the big losers as of this monday morning. amazon down 4% and netflix, tech winners last year, all down today. the biggest sector loser is the financial stocks, look at them, please, all of them on the down side. j.p. morgan, citigroup, wells fargo, when you start talking in percentage terms, you've got a selloff. same with casinos, they have china reportedly slowing down dramatically, so you've got wynn resorts and they've got a big casino in macao down nearly 5%. steve moore is with us, great

to have him with us on this monday morning. the story here is that the global economy, if i sacrumbling that's the long word, but in part due to chinament how slow is this, steve. >> last week i was on the show and you asked me what countries i liked and i was worried about china. china doesn't get the free market thing. their economy has been growing the last 20 years at 10% and now growing at 4 or 5% and that feels like a recession for china compared to before. manufacturing has definitely slowed in china. their output is decreasing and when your output decreases, your incomes decrease and china has actually become an important market to the united states and other countries. the second thing that i find more fascinating, what china put in place is circuit breakers on their stock market.

now, that never works. that doesn't work in the united states and latin american countries and it's not working in china. absolutely, you tell you can't sell your stocks, you're locked in. that causes a panic and that's what's happening in china right now. >> now for the middle east. i've got this report coming to us from reuters. it's banning citizens at all from travelling to iran. that's according to the saudi foreign minister. it's cutting off ties with iran. lt. colonel ralph peters is here. spring this right at you. this looks like a very serious development. iran versus the saudies and the saudies versus iran. give our viewers, please, some perspective on how important this is. >> well, it's vitally important, i know, stuart, you've called it a civil war and you certainly can call it a civil war in religion.

i prefer to call it a world war in the great fate of proxy wars and terrorism, and it's pre shaping the global landscape more deeply and pro foundly than anything since the collapse of the european empire. one thing i don't think we have to worry about immediately is a shooting war between the saudies and eye -- iranians, they are in other proxy wars, yemen, et cetera. but it's not good news in any respect. stuart: but we now have the dow jones industrial average down 405 as we speak and part of the problem for the-- for wall street is what's going on in the middle east. i put it to you, the one rocket fired from iran to the oil fields of saudi arabia, you've got yourself a real problem here. >> yeah, you do. and even short of that, in or

near the straits of hormuz, i haven't seen the numbers today, but i'm sure the insurance rates and reinsurance rates in the gulf are going up. so there are many being many problems, but on our end here in washington d.c., stuart, the travesty is that democrats and republicans alike continue to try to deny that this is about religion. it's a great religious war spanning much of the globe and we try to explain it away in terms of macro economics and geostrategies. the people that would have understood this, europeans of the ages of war and religious which were absolutely hideous and the muslim world is going through that on a grander scale and without ameliorating effects of a renaissance, so the end results of this, i fear, are going to be an utter wasteland in the middle east, a devastated middle east over the coming years and decades for all of us.

the refugee flows have just started. stuart: extraordinary. you've got to tell me about the iran nuke deal from our perspective as we see what's going on. it seems that this deal is in tatters, if i'm going to use a strong word. do you agree with that? >> of course it's in tatters. it has a great affect for the iranian benefit. the obama administration and certainly secretary kerry, they've tied themselves so closely to this as their great legacy that we bound our own hands in dealing with iran so the saudies, one of the reasons the saudies executed the cleric several days ago, accused of sedition and then the reason the saudies did it originally, not only do they have a new king, trying to show this tough guy, but they don't trust us

anymore. they can't trust us anymore. so i think we're really going to have to retrench on this and accept the fact that we no longer can shape events. what we have to do is concentrate on defending and furthering our own selfish interests. stuart: thank you for joining us on the first trading day of the new year. let's get to the new trading session, this is not pretty. now we're down 409. 2.3% ishlgs a couple of economic numbers adding to the negative sentiment. u.s. manufacturing activity last month down to 48.2. anything below 50 reading is contraction. the expectation was for 49, that's a miss there and then we have construction spending also missing and came in at minus .4% ap the expectation was for pl plus. and two misses on construction spending. >> that follows the problem in

china where manufacturing is clearly slowing down big time and they put in the circuit breakers on the stock market. >> once it hits 5%. >> everybody gets nervous when you start closing markets. >> remember, one of the reasons we saw oil selling off in 2015 is because of a global economic slowdown and the numbers back up that concern. >> if china has got a problem therefore, so does alibaba. we call that the chinese am non. that stocks it down $76 a share on alibaba. baidu, again, we call that the chinese google, baidu is down sharply that's a 4% drop there. anytime you start talking about percentage declines, you know you've got a big selloff on your hands. 2.3% down for the dow. we're off 402 points and this is the opening of trading for 2016. what a rotten way to start the year. going to bring politics into this particular part of the

program. what happens to the market if trump or hillary wins? assuming that's the matchup. here is cke restaurant ceo who is never afraid to take on politics and the market and mix the two up. cke is the parent company of carl's junior and hardees. let's get back to the original question, what happens to the market, in your opinion, if donald trump is the nominee and he wins the election in november. what happens? >> well, it's hard to say what happens with donald trump because it's hard to say what his economic policies would be so you really can't make a prediction. i know, he was recently a democrat, he recently proposed a 14%, plus, tax on wealth. those things obviously would have a very devastating effect on the economy, which reverberates in the stock market. but you know, i really don't know. i wish i understood his economic policies better. he certainly sounds great on the campaign trail, you can't

help, but like his comments on twitter, but i'm not getting solid information about what his economic policies would be, which is a little scary. >> that's a fair point. how about hillary clinton? if she were the nominee, i think she will be and if she wins the election, what happens to the market and to the economy? >> talk about scary. hillary clinton would be very, very damaging for the economy. you know, the problems we have right now are the tax code's too complicated and the inmany could tax rate for corporations way too high. they're going overseas, they're overregulated and we've got obamacare, all of these policies that led to this overregulation are the policies that she wants to continue. just take a look at, she supports rising the minimum wage to $12 an hour. wal-mart the highest revenue in the country, known for efficiency of operations, wal-mart raised to $9 an hour,

the labor costs went way up and couldn't offset with automation or price increases as the progressives tell us businesses will be able to do and its stock is down 10%. this year it's going to $10 an hour. at the $12 a rate that hillary clinton supports you actually-- it actually costs you money to hire people at entry level positions and at $15 an hour you have a big loss. so, her economic policies are completely misguided. they're exactly the wrong way to go. we need a recovery after the last seven years, we've had dismal economic growth. 6.8 million more people living in poverty. it's time to stop with these progressive democrat policies and elect a conservative republican who knows what he's doing with respect to the economy or what she's doing if it's carly and let's move forward. stuart: and that conservative republican may or may not be donald trump. he may or may not be a conservative. >> who knows, i know people who know him, some think good

things and some bad things. it's had a -- it's hard to get a handle on him. stuart: last thing we want is a trade war with china. and a huge headline, lauren simonetti back this year and we're pleased for that. give us a story on the flooding. >> absolutely, major flooding in the midwest around for weeks to come because the mississippi river now surging south. rising waters and storms killed more than two dozen people in missouri and illinois alone so far. some of the waters are rising and the video that you're looking at capturing what the flooded area looks like. >> that's a drone. >> they have their uses. >> they do. stuart: that's good. >> at the box office, the "star wars" raked in 83 million dollars. it's grossed more than jurassic world and "titanic" and might top avatar, too, this weekend.

and prince william says father hood has changed him making him more emotional, more anxious and recognize how precious life is. so the dad to prince george and princess charlotte there. stuart: and the future king of england, good luck. lauren, welcome back. are we in a position to show lauren's baby pictures. r. ashley: there we are. >> rae vivian. stuart: rae vivian. ashley: cute. stuart: love at first sight, am i correct. >> for me, i love her more every day. stuart: oh. all right, don't forget, tune in every morning, now we can say this legitimately, 5:00 every morning, lauren simonetti, they're on fb a.m. baby pictures and all.

15,000 people showed up and his first campaign ad is hitting the airwaves now. more varney after this.

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>> we're still down, still a triple digit loss. disappointing numbers, and down in china, there she goes. look at the 30 dow stocks, including exxon and chevron, in the top left corner of your screen. they are down even though the price of oil is up. now, that's interesting. across the board, selloff in stocks. how about the price of gold? well, with the rising tension in saudi arabia and iran, it's up nearly $22 an ounce, that puts it at 1,082 an ounce as we speak. all right, now look at the price of oil. that's a solid gain, a buck 16 higher, oil's at $38 a barrel, but exxon and chevron are still down. explain that one. lululemon, that's a winner in a

down market. what is going on here? or get out there and boo i-that thing, it's up 5 1/2%, maybe they had a better christmas that we didn't know about. >> competitive space. >> with the dow down 360, lululemon 5%. and donald trump releasing his first campaign ad. >> they call it something else, but donald trump called it radical islamic terrorism and that's why he wants a temporary shutdown until we figure out what is happening-- >> hear that, take their oil. ashley: i kind of like it. stuart: the brilliance of the ad. ashley: finally someone is standing up to what's going on in our tepid response. this is why he gets the support he does. someone who is willing to say

enough is enough. stuart: he expresses our righteous anger. >> absolutely. >> this is going to be a theme though, you can tell in iowa the end of that ad, the announcer also says he's going to build a wall with mexico and they're going to pay for it. he's spending 2 million a week by the way. stuart: he he says he's going to. i'm going to stay on trump because he held a big rally in biloxi, mississippi. why was he not in iowa? the editor of "the iowa republican", he joins us now. craig, welcome to the program. the iowa caucus is february 1st and then new hampshire primary and then south carolina. why is donald trump leap-frogging over that and going to mississippi? >> we've seen a lot of candidates do that, they'll go from iowa and go to other parts of the country, the south where

they can also get some good media coverage, national media coverage. so we've seen donald trump a number of times, you know, the last few weeks and we'll see him again. it's another way for him to continue. he can get the big crowds going to places that don't get the political activity and so, here we are, we are talking about the huge crowd he had in mississippi. stuart: it's good politics, if you can draw a 15,000 crowd in mississippi, you make a headline just by drawing that crowd. if he'd got 500 people to come and watch you in iowa you don't have the headline. >> well said. a few thousand-- >> hold on a second, i know you've written an article and the title of that article is, fed cruz is a false prophet of social conservativism. expla explain. >> sure. look, i mean, i think people need to understand where ted cruz's policies are.

he's a strong 10th amendment conservative and so when you're a social conservative that kind of puts you at odds with him. this is someone who says, look at a state like california or new york and wants to have gay marriage or late term abortion, they can have it. a station goes crazy at wants. if it wants to have common corps, that's their prerogative. that's not where the social concerns are and want to apply a strict one law for the entire country. and that comes from-- >> ted cruz is leading iowa at the moment and you're in iowa. he's going to win iowa, isn't he? >> well, he has a great shot to win iowa and it's because he doesn't have, you know, viable social conservative challengers. mike huckabee and rick santorum are struggling to catch on in this election cycle even though they won previously in iowa.

stuart: it could be that they realize that -- could be that voters realize that social conservatives. ashley: given your example of what a social conservative could do, know the going to win the election. i think that would be pretty true. you've got 20 seconds to answer. >> sure. look, i still think that, you know, cruz might have some issues of being challenged on the right, especially from someone like huckabee or santorum, but viability matters in elections and if you look at the poll numbers, ted cruz is pretty strong. less than 30 days out of the caucus. >> all right, craig, thanks for joining us, we appreciate your comments and come back soon. thank you, bill clinton campaigning for hillary this week and howard dean, known for the scream, say donald trump

has met his match. >> if you would have told us we were third in iowa we would have given anything for that. and now something? you know something? not only are we going to new hampshire, tom harkin, going to south carolina, oklahoma and arizona and then we're going to washington d.c. to take back the white house, ya! the only way to get better is to challenge yourself,

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>> all kinds of stock groups are down, including casino stocks. look at wynn, it's down big, why? because it's got big exposure in china and china is down. and apple stock with exposure in china, last hour keith fitz said buy that stock cheap at 103.

we were talking about why it could be a bad year for apple. donald trump has finally met his match in bill clinton. so says howard dean, the presidential candidate who blew his chances with that famous scream in 2008. dean stays bill clinton is the best politician since fdr. he says there will be no response to trump. dean says bill will just let it float. maybe, but trump won't. trump will go where no candidate has gone before. he already has. he will bring back monica lewinsky, gennifer flowers, and juanita broderick, the blue dress, sexual favors in the oval office and trump will remind everyone that hillary clinton attacked those women and stood by her man. she claims the feminist mantle and howard dean thinks that the clintons can float through all of this. he's wrong. trump will attack, he will

attack because bill is hillary's achilles heel and think twice before they put him back in the white house. and he's entertaining even when he's talking from infrastructure. and wait until he's talking about monica lewinsky, everyone will wade in and voters will laugh it up. the left wants everyone to think that the clintons have moved on, that hillary is untouchable. that bill is such a brilliant and popular politician that he can get hillary elected. that's howard dean's theory. wishful thinking! donald trump is about to test bill's bubble. he's going to test hillary's vulnerability. let's see if she can float through this one.

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stuart: you could try to put a brave face on it and say that we stabilized. down 300 points. the big gainers of last year, they are the losers this monday morning. i am looking at netflix. a 7% are out. cheryl: buying opportunities. a lot of companies do not have buying opportunities yet. stuart: a down day. how about amazon? down 5% now. it doubled last year. all the way back to 640. facebook. down nearly 4% today.

it is up a bit today. 37.83. how about apple. here is what we are hearing. it could be a tough year for apple. why do you think, why are you saying out here you are telling the world that may be a tough year for apple. >> a big believer in china. their revenue was up 100% last year. their exposure to china is even more than what it was before. any currency changes, china is the second biggest market for apple right now. any change in consumer behavior, factory output. there is an upside to it.

there is a lot of growth. the data that we consume here in new york. only 10% penetration rate now. stuart: you take china out of the equation. i know you really cannot do that. now assess apple going forward he had. >> analysts are not bullish on this. look at iphone seven coming. there is a lot of weakness and innovation. there is also concern about how is apple watch doing. you also look at the ipad. the ipad pro. people are buying it. is it enough to change the entire sect are? >> also the apple watch. i think that it has been a bit of a disaster. >> you do not have to be a brain

surgeon. >> you have a point. they have not broken out. stuart: we hear you all. apple is out 102 as we speak. bringing a continuing theme which we ran with at the end of last year. a good dividend. i think that that is a real good idea in a down market like this. let's start with at&t. i think you like that on a dividend play. >> 5%. a long-term investor. you have some potential there. stuart: at&t now. $34 a share. i lock in a 5% annual dividend payment. >> yes, you do.

>> in this type of market, you want to lock in a nice dividend. it gives you a little bit of a buffer. stuart: how about dryden? what is the dividend there? >> a little over five. same situation. another on your list. not a dividend play at all. you like amazon. convince me that i should buy amazon and $640 a share. 300 times pe. >> i do like amazon. this is for a long-term hold. the amazon time, the streaming service, signed up for a million subscribers in december alone. deutsche bank was next by 2020. i like amazon. stuart: okay. we hear you.

at&t, verizon and amazon. important to have you with us on a day like this. i like a 5% dividend. let's get to politics. we do a lot of politics on this program. bill clinton starts campaigning for hillary today. donald trump is attacking the former president. listen to this. >> hillary clinton's response has been you are sexist. do you think she will continue to go after you? >> no, i don't think so. she is married to a person that is a serious abuser. at the highest level. she is not an innocent that if you look at what happened with some of the people. she is not the innocent person sitting by the side. stuart: we have with us now a conservative commentator. this is the former miss america. this is conservative columnists.

>> thank you. stuart: hold on a second. how is a guy that blew his presidential campaign speech, finally, donald trump has met his match and his matches bill clinton. he thinks that bill clinton will be donald trump in a head to head matchup. donald trump and hillary. all for women's rights. letter has been caught him five for her. be in the main line of attack. taking on donald trump had on. this could be bill clinton finally coming to grips about what he has done. it really could be a bad one for the clintons. >> bill clinton will float above it all. he will not respond to donald

trump. going right at it. >> he probably will not respond right away. he says that he will go on the attack. what we saw in the last couple elections in 2008, especially, when he was pushed about barack obama. he finally said something and it made him a liability on the campaign trail. this really could have been there campaign to win. stuart: i would absolutely guarantee that any audience, i do not care who they are, fascinated to listen to donald trump talk about monica lewinsky. you oppose the question. you want that in the white house again? >> most people would say, no. they are tired. stuart: bill clinton is a wildly popular politician. he could become elected the president himself. >> his polling is 69% favorable.

it did just come down a little bit. people do still think pretty favorably of him. what you are looking for is the independence. it is coming up and coming up. they will not like it did they will want to get rid of it. they want something new. they want something fresh. let's start with something new. additionally, terrorism and national security will be one of the main issues. it is not about the economy right now. americans care about who can take out isis. donald chump is really showing the strongest forefront there. stuart: 2008 miss america. >> thank you. stuart: fascinating. i do not know if any other as a conservative commentary. welcome to the program. thank you. check our big board now. down 387 points.

still down 2.2%. let's get to the sector report. big-name techs made impressive gains. amazon, microsoft, facebook, google. you do not have to pay the capital gains tax in till 2017. you know, you have a year and four months to figure out how you will pay the taxes. we are update time. president obama using his pen to push gun control agenda. is it working? we will deal with it next. >> i am a madman. i have never been a adjudicator did madman. the background checks that he wants. undocumented madman. ♪ ith the uncertainties of hep c. or wonder... ...whether i should seek treatment.

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manufacturing numbers here at home. all ladders. down over 3%. american express. all dow 30 are to the downside. energy. tensions in the middle east. chesapeake up 2%. netflix, a big loser. start your day at 5:00 a.m. ♪

stuart: chipolte. lots of trouble with those e. coli outbreaks. back right now at 458. a 27 month low. stocks across the board are getting lousy. historically, the month of january. what we will see the rest of the year. is that historically accurate? >> all of january is a great predict therefore the rest of the year. the s&p 500. 0.57%. keep in mind, that is the average rate. however, january, the average

gain for the s&p 500, 11.5%. you want a strong january. >> it has to be the whole month of january. january was a slight -- we are under a bill big winner for the year. >> it is all about january. stuart: down in the first couple of days. >> if the s&p 500 is down more than 5% on the first trading day of the year, they have six times, this is happened 13 times since 1945. it is not a great predictor. the average return, do you want to know that? average return, 2.44%. it is all about january. you need to cheer for january.

stuart: december though one will be a great day. >> do not invite me back. [laughter] preparing executive action on guns. wants to control them more. let's bring and economists from the national examiner. the president comes back from whole why you. we will get details on how he wants to control guns at some point in the future. is this a pluto cowinner? >> it is unlikely that this will be a political winner. between hillary clinton, bernie sanders during this democratic debate. since president obama has taken office, sales of guns in the united states have gone up dramatically. they have been afraid that the president will ultimately try to take action.

prohibit them from trying to get them. trying to go around congress. only fueling those fears and further inflame the poll numbers stuart: that is not what the average voter is hearing, i suspect. all these terrible gun outrages. have to do something. why can't the politicians do something. the president tried to do something. you say that that is a political negative. >> there was a great poll that came out in december. they asked americans, you think to you think that we can prevent these long wolves type of attacks. would you rather see you more law-abiding citizens having guns? even as we have had more and more tragedy headlines, every time the president weighs in on an issue and needs to take

action, the polls go on the opposite way. it seems like this could be a real risk for obama. >> you can walk down the street with a rifle over your shoulder. the world can see you are carrying a gun. how to think most people feel about that? >> i think that most people are pretty divided. gun control or gun rights should be privilege. you have a state there that has a culture that is much more comfortable with guns than, for instance, a state that is a little bit bluer. it very state-by-state. interestingly, bernie sanders got a relatively good rating from the nra. federal action is so politically risky.

on the other hand, president obama will never be on a ballot again. political risk does not necessarily mean anything. stuart: thank you for joining us. thank you very much indeed. the dow is down 380 points. we will be right back. ♪

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>> democrats and republicans alike continue to deny that this is about religion. we try to explain in terms of macroeconomics. we are busy doing other things. sometimes people ask why do you not have time for this. there is just too much going on here. on new year's eve, you are either getting ready for a party. it you are not just sitting down watching football. stuart: less care for on the market selloff. down more than 400 points. let's take a look at one stock in particular. game stop. not that bad. down three quarters of a percent. the big question for game stop is going to be, can it survive in a digital game world.

your thoughts on this. the concept of going in. it seems like so yesterday. how is game stop surviving? >> that slowly but surely, every year, people downloading the games digitally. finding them on other sources. it is really hurting them. game stop is in deep, deep trouble. stuart: they do downloads. they make money through the downloads. a decent number for them. it is really very low for them. also, they sell like toys and stuff like that. their margins will never get back to where they were a few years ago. people were trading in these games. they saw a new game and they saw

a used game. ashley: the deathwatch on this company goes on and on. doesn't have does it have to change its business model and how feasible is that? >> it is such a drastic shift. it has been built for so many stores. they would need such a shift and they will never reach those profit margins. sustaining all of these sources that they sell. >> you mentioned this a little while ago. so massive. >> yes. absolutely. stuart: game stop. thank you so much for being here. the iranian nuke deal. putting the whole deal in jeopardy. president obama's legacy is on the rocks.

chris will join us at the top of the hour in three minutes. ♪

stuart: remember the iran nuke deal? it is in shreds. not to mention the reputation. what happened last week while the world was a new year's celebration? testfired new missiles. violating the new deal. went within 1500 yards of a u.s. aircraft carrier. wednesday morning, that is the ease of new year's. forty-two minutes later, in another message. another message will be delayed. it was too late and definitely. supporters of the deal wondering when the president was never stand up to iran. now, the whole deal is in

jeopardy. the new king and his 30-year-old defense fed up with president obama. they are going right at. they are ignoring the administration. seeing the iranians and their rockets. they do not like what they see. they will fight. the president in yet another foreign-policy bind of his own making. $100 billion. should they get it when they clearly violated the terms of the deal? will he'd do it? he desperately needs the help of democrats. the truth is, the iranian nuke deal is unraveling. it is not pretty. they have repercussions. his record is reminiscent of 1979 when the iranians humiliated president carter.

♪ first, you have to look at this. the first monday. the first trading day of 2016. we are down now 445 points. 16,980. check out all the stocks that make up the dow industrial average. that includes exxon and chevron. despite the fact that the price of oil is up today. by the way, last year's big winners, big technology companies, they are the big losers today. amazon, netflix, google, microsoft, facebook. all down nearly 6%. look at the financial stocks. they are the biggest of all

losers. what you are looking at now is stocks related to china. china is slowing down. that is why you have the china related stocks down so much. all of them are way, way down this morning. let's move on, please. i have china economic news. no surprise for our next guest. the coming collapse of china. the author of that movie, gordon chang, is with us. this market selloff started this morning. we have news that china was way, way down. how much is china slowing down? >> i think that china is slowing at zero, maybe 1%, if that. essentially, the real story is not where china is growing at

this moment. the most important story is that everything that government has been doing to try to restart growth, that has not worked for more than a year. they can slow the dissent of the economy. they cannot change the downward direction. stuart: why not? what is the basic underlying problem here? >> there are two problems. the model is exhausted. you can just pour money into an economy and it will grow. that worked for about 10 years, but it is not working now. the president has this ongoing corruption campaign. it is really a political purge. it is causing real concern throughout china. you have a real problem in the economy. >> and maybe that case. protecting himself politically.

>> consolidating his political position. the mac the second largest economy in the world. >> the difference is they have been longer and deeper. he has not gone after his family members. most important, he has been jailing anticorruption campaigners. it is not an empty corruption campaign. >> the collapse of china. you have had this for a long, long time. are you sticking with it? >> i do not think that they are able to get to this. the primary basis has been the delivery of prosperity. now they cannot do that. it brings him into conflict with the united states and its neighbors. this has no good endings.

stuart: gordon chang, we hear you. i have to discuss the explosive developments in the middle east. this is the other huge negative we are facing today. mideast rising tension. that is a cliché. how does the problem in the middle east, how does that come back to bite us here. politically and economically. >> remember how much freight we have put on the president's plan to rebalance the power. remember how much we believe or this administration believes that the key to solving isis, the key to everything was to strengthen iran. rebalance the scales instead of our usual sunni plans that we would have friends on both sides. everything would be better in

the long term. as it turns out, that rebalancing leads to real conflict. the other golf states coming as we would expect. to cut off relations with iran. what we will expect is not just the stuff that you people follow. and politics, my goodness. all of the president's plans were dealing with isis. the iran nuke deal is in shreds. is it? >> they never said that it was good. no one said that i was in favor of it. what they indicate is sort of like obamacare. it is not perfect. it is not great.

it is the first step. we will bring them into the adult stable. we will encourage the moderate. now, what does it do? it does the opposite. we have this instability. >> coming back and then going for gun control. >> the president wants gun control. i do not understand the president's critics. for him, this is the subject. he wants gun control. it is much like when he talks about global warming. believe it or not, he believes what he is saying about these things. he needs to do it. stuart: thank you very much for joining us. the dow jones industrial average is falling. we are up 454 points as we speak. that is 2.6%.

the dow has dropped well below. >> oil has turned negative. after initially moving higher. now, those gains have been raised. there is still a perception that there is a massive amount. there is still no, that chick thing coming to use up all that oil. the tensions are certainly adding to the unpredictability. oil down 1%. stuart: that is a switch and a half. >> immediately happening at the same time. stuart: the price of oil. i will stay on this site between saudi arabia and iran. it is sunni versus shia. for the benefit of our viewers, it is not quite a hot water. it is a big fight between saudi arabia and iran. it seems to us that it is almost

like a civil war. is that accurate? is it that bad? >> absolutely, stuart. the hot word they are. aside. isis. the majority there. the bottom line is that template, if you will. make no mistake here. you do not execute 40 million people. saudi arabia primary issue is this sort of threat to the royal family. a lot of insight that is going on right now. what better than throwing in a shia clerk to kill him with the other 43 million sunnis that were killed.

it sounds like saudi arabia is divided. unstable. that is what you saw yesterday. a moderate company come to its defense. it is very unusual. they see saudi arabia on the brink, if you well. it's future as a sunni running is tied to saudi arabia. the entire region, because of two major issues, one being russia and american abstinence has allowed the fall mentation of the severe rivalry. >> it is not going away. all right. thank you very much for joining us. we appreciate it did that market

really is falling out of bed. we have a triple digit selloff. now, we're down 465 points. we are back at 16,000. 962. that is where we are. this is a selloff. up 2016. promising executive action on gun control. going around congress again. trying to get his agenda. more varney after this on that subject. ♪

tracy: the first trading day of 2016. we are down 2%. below 17,000. how about the price of oil. oil was up. now it is back down again. hurting the overall stock market. financial stocks.

of all the sectors, this sector is probably suffering more than all the others. a big rock. we have teslas model x. that is their first new car in three years. apparently, that is not good news. what is wrong? >> that is a fair question that you ask. not indicative of the demand. the reason is, they are ramping up their production. a different, very specific item. >> elon musk slowly ramping up production to make it more efficient and to get these cars out the door. 50,000 cars is comedy they sold

overall last year. that is up 75% year-over-year. >> i think i know why the stock is down. that is the videotape that you brought us last year. it was plugged in. >> it was plugged into a supercharger. that is very traumatic. that is what they are telling you. they are investigating it. thankfully, no deaths. it charges your car twice as fast. they will have to choose. one of the biggest markets in europe. it does not bode well. china and the united states. >> amazon is down. thank you very much indeed. i want to move on to gun stocks. they are now rallying.

discussing a new executive order on controlling guns. as i understand it, the president wants to do a private sale. if i sell a gun to you, i have to do a background check on you because you are about to get a gun. that is impossible. >> that is what they are proposing. change the definition of who the seller is of a firearm. lawful gun owners. small businesses, families. wanting to transfer gives them weapons. none of which, stuart, is important to know, would have stopped what happened in all of these places. obama wants more is negative actions. the reality is he can only

nibble, thankfully, at the margins. >> going up again. they are rallying. i talk to you about the new taxes open carry law. moving around texas. a rifle on your shoulder. i am all in favor of gun ownership rights. this makes me think twice. do i want to walk down the street with my kids? how do you feel about this? >> a lot of things said. a lot of speech. if taxes believed as many other states do that the right to bear arms includes bearing their arms openly, they should be allowed to do so.

obviously, you want folks exercising it responsibly. they have done a lot to exercise citizens. you do not see a lot of attacks happening. places that are not gun free zones. criminals or terrorists know they are potentially armed and can see that they are arms. the chances of attack are that much less. you can see responsible gun owners in texas. that is what america is about. >> i want to see it. i really do. >> we're going together. >> you've got it, brother. stuart: back to the big board. cannot ignore this. a major stock selloff. concerned that china is very clearly slowing down big time.

death and the holidays. why more people die in the two weeks between christmas eve and new year's eve. why is that? it is true. they do. more in a moment. ♪

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stua: weave en watching this all morning. the market has been up nearly two hours. how about the price of oil. it opened higher. $0.45. the price of gold is always clichéd. it is actually a $14. now, this. an event happening right now. there you go. this is live. that is bill clinton. campaigning for hillary clinton. i do not know what he is going to say. i pretty much guaranteed that donald trump goes right after him and hillary throughout this week. that is trump's new target. that is the target you are looking at right now. he is fair game looking at donald trump.

>> fascinating to see.ge he just cannot help himself. stuart: all trump has to do is come on and talk about monica. do you want that back in the white house? >> that will be the best. stuart: bill probably will not mention it. getting right added. how is this for a story. new research shows there is a big increase in the number of deaths the week between christmas and new year's. cheryl, i understand it. >> have been looking at this for years. the day that most people die is christmas eve, christmas day and

new year's. we tripled the amount of deaths. stuart: there is no explanation for this. ashley: people who feel ill are more likely to put off going to the hospital or care because they want to stay home with their families. >> okay. all illness groups. >> the same spike. >> in those three days. dying of natural causes. stuart: it is not funny. >> inexpressible. >> you are fired. [laughter]

stuart: in other hillary clinton e-mail. janelle dumped on new year's eve. one of her main adversaries as a wacko. we will be back in a moment. ♪

. . . . [vet] two yearly physicals down.

martha and mildred are good to go. here's your invoice, ladies. a few stops later, and it looks like big ollie is on the mend.

it might not seem that glamorous having an old pickup truck for an office... or filling your days looking down the south end of a heifer, but...i wouldn't have it any other way. look at that, i had my best month ever. and earned a shiny new office upgrade. i run on quickbooks. that's how i own it. stuart: we're still down 400

points plus. we're still below 17,000. oil opened higher base of this tension in the middle east. now we're lower. we're off 50 cents, $36 a barrel. the price of gasoline, national average, here is some good news. we're down to $1.99. here is a number that counts, from our friends at gas buddy. we, america, we saved $134 billion in the at pump in 2015 compared to what they paid in 14. ashley. >> are they spending it? many people tell you no. the national average last year is probably more than you thought it was for entire year was 2 heroin $40 a gallon. previous clear. it was 3.34. we came down nicely. the state with the biggest savings? hawaii. down 80 cents. should go over there and do extensive report on that. the state hurt the most, california. they're kicking off this year up

it -- 23 cents from where they were last year. refinery issues and boutique blends. stuart: bottom it. >> good news for today as the market sells off. 3/4 of gas stations have gas under $2 a gallon. leave it there. stuart: i paid $1.69 in new jersey on new year's eve. buck 69 cash, regular. nice. >> retail numbers are, i feel like we will get surprises. stuart: you do? >> i do. stuart: only time will tell you. told you not to say. >> say it every day at journalism school. stuart: the whole world is apparently worried about china's weakening economy. trading on china's exchanges suspended after markets plunged 7%. they just stopped trading. market watcher jim awad is with me. the dow is down 400 points s that all because china is

weakening and global economy is going down with it? >> yes, that is the reason the market is going down, in terms of the u.s. economy it is a misplaced worry. because the u.s. economy will power through driven by consumer spending which offsets weakness in manufacturing and exports. stuart: keying off the price of gasoline with a shot in the arm? >> wages going up. employment going up. you don't get bearish on u.s. economy because of the u.s. markets because of the economist. the risk, i said this with you consistently. said it august 24th. said it in december. the risk the slowdown in china create as credit event somewhere, whether sovereign default. commodity country default or small oil company's default. the reason the market is going down that's valid, you're getting a gradual tightening in monetary conditions in the united states through selloff in the junk bond market. new issues going public lower than last market value. that is the vulnerability. stuart: the vulnerability is like brazil, for example.

>> yes. stuart: going into second year ever traumatic dick recession, maybe depression. if they had a credit issue, for example, we would go down a lot more than 400 points. >> absolutely. if it results in a freeze-up of credit markets here in the united states which affected ability of u.s. companies to borrow and grow, that would a vulnerability. stuart: you wouldn't get another interest rate hike from janet yellen, would you? >> they are frozen. most likely from their point of view they would like to raise again, i would be surprised if they get the opportunity to do it more than one more time. i think interest rates are where they are. and will not be a threat to the valuations or the economy. stuart: i'm sorry to interrupt you but there is this. if i sell a stock today which i have made a big gain, if i sell it today, i don't have to pay the capital gain tax until april of next year. >> that is absolutely -- stuart: why not sell? you have plenty of breathing

room. >> if you're young. if you're young. stuart: very funny. >> happy to be here for christmas and new year, if you're young you want to think in multiyear terms you want to be a pier during periods of weakness because over time stocks will do better than bonds and cash f you're older and only have a year or two to retirement your thesis holds sell, nail it down and you don't have to pay taxes that would include you and i. stuart: i thought you were going to say if you have only couple of years left. jim awad. you may be back. much more, this is serious too. state department released latest batch of e-mails from hillary clinton. released them 4:00 in the afternoon on new year's eve. that is called a document dump. one of those emails called author ed klein totally whacko. this total whacko wrote the book, unlikeable, referring to

hillary clinton. take me through this, ed. he is here on the show. what happened. what was the e-mail exchange. tell me about it. >> they were talking about a new book that i was working on. i'm very flattered to be included in hillary's emails along with word leaders and president's and all that. let me ask you this. was the late "new york times" columnist bill safire a whacko when he called her a con againal liar? is maureen dowd, "new york times" columnist a total whacko said the clinton opposition campaign is a slime room? is ron fournier of "national journal" a totally whacko when he says that the clintons demean anyone who dares to criticize them? i don't think so. stuart: but you're total whacko, not, so you're not. what is your response to all of this, other than are these people whacko? obviously not. what's your response?

it was very specific. you're writing a book which is very negative about hillary clinton. they called you a total whacko. your response to that? >> my response to that all books about contrary politics, including bob woodward, the game change authors, use only anonymous sources which is exactly what i do. i've been doing this now for 20 years since 1996, i've been writing about hillary clinton. 20 years. i have more than 1000 interviews in my filing cabinets. i think, you know without being falsely modest i'm probably the world's greatest expert on hillary. stuart: is she corrupt? >> oh, completely. think about it. while she was secretary of state, bill clinton was taking for the clinton foundation hundreds of millions of dollars in donations from foreign governments and foreign businesses, the same governments and businesses she as secretary

of state was dealing with. stuart: last one. you still think she has health problems which have not been revealed which are a negative for her in a campaign? >> i do. i've been told, for instance, after her benghazi 11 hours, which might be understandable, that on the way to her limousine, she literally swooned. and they had to hold her up and take her and put her in the limousine. stuart: total whacko, ed klein. thanks so much for joining us. >> thanks. stuart: we'll see you again soon. now this. a new year's eve prayer service at a small north carolina church had quite the scare when an unidentified war veteran suffering posttraumatic stress disorder walked into the church with a gun. the pastor, retired army staff sergeant, asked the man, and what can we do for you. can you pray for me. he took his gun and invited him

to join the service. no charges were filed. priests for life, al vita king is with me. what a pleasure to have you on the show. what do you make of that the incident of the pastor disarming a con a gant? >> i believe that is a wonderful, happy new year message, varney. that is the way that life should be. those of us who pray and are spiritual and love humanity can see the pain of a gunman, say i help you, rather than screaming or running or throw him out or something like that. that was heart control. that wasn't gun control. that was heart control. i commend pastor larry and his congregation. i glad the veteran can get prayer because we love our veterans as well. stuart: to some degree it reminds me of the church in the carolinas where a young white man walked in and shot black people at prayer in a service, in the church. that man right there.

the response of that community was very christian. it was to turn the other cheek and forgive. i think that is another example of the power of prayer, is it not? >> that is the power of prayer. we remember at that tragic juncture several lost their lives. but you know if they were here today, they would tell you we know where we were going, to heaven being, and they forgave. that incident did a whole wave of forgiveness, repentance, a racist symbol being addressed there. so i believe this is a good way to start new year, believing in prayer. the power of prayer. the power of god's love, overcoming evil with good. that is the way i was raised you know in the king family. martin luther king, jr., my father, daddy ad and mommy king. we were taught to love and forgive. what a grateful message and was

greatful to wake up to the news t was wonderful. stuart: thank you for coming on program and telling the viewers good news. much appreciated. >> yes, thank you. stuart: once again, check the dow, we're down 420 points right now. we had been down a lot more. we're at 17,000 almost on the dot. here is what is next, texas, open-carry. it is legal. carry your gun in public. colt .45, strap it around your waist and rifle carry it over your shoulder. is that a good idea, i ask you that? g. g. the company is actually doing really well on, on social media. oh that's interesting. i - i started social media. oh! it was my...baby.

>> i'm nicole petallides with your fox business brief. the selloff is underway here on wall street. weak china manufacturing numbers. right here at home, u.s. manufacturing falls, weaker-than-expected. with that the dow jones industrial average down 417 points, a loss of 2 1/2%. right now, 17,000. had been in the 16,000 range for first time since october. right now we're seeing s&p down 46 and nasdaq composite down 134. here is look at intraday chart with the dow down roughly 474 points. technology is under serious pressure. financials under pressure. names like yahoo!, amazon, google. tech is really to the downside with yahoo! down 6%. gun stocks on the other hand doing well after a great 2015. kicking it off where president

obama may use executive action. smith & wesson up 6%.

stuart: the story of the day, are the markets, first trading day of the year, we're down big time go 1/2%. global economy is clearly slowing down. oil down. gold a winner of sorts. up about 10 bucks an ounce. that's all you've got despite all the stuff going on in the middle east. how about facebook? check that stock.

they're making the oculus rift, the virtual reality headset, the whole thing that wraps around here. they announced preorders for that device start on wednesday, that is january the 6th. go to oculus.com to get one. there is a free commercial. texas gun owners are allowed to carry firearms openly in public, thanks to open-carry law that began january the 1st. one restaurant owner says no, i don't want that in my restaurant. jack perkins runs, make sure i got this right, slow bone and maple and moto restaurant in dallas, is that correct? >> two restaurants. stuart: got the people exercising their constitutional rights by popular demand. why won't you let them in your restaurant with a gun on display? >> not that, we won't let them. i'm a concealed handgun licensed holder. and we welcome concealed handguns in the restaurant. that's preparation for eventuality.

to certain degree open-care constitutes a perceived by a lot of people. we want to take care of all of our customers. stuart: i'm in agreement with you, jack. it just worries me to see guns so open, and possibly intimidating. if i walk into a restaurant where guys have a .45 on the table and rifle over the shoulder i think twice. i do. i think twice about that. that is what you're reacting to as well. >> it is human nature to respond to threat, ultimate threat of deadly force. if you have a conflict there is no room to escalate. if you're already at deadly force. stuart: so what are you going to do if a customer walks in, puts the .45 on the counter, what do you say? get out? >> better not take it out of his holster in front of me. what we like to do is calmly ask someone, would you mind taking that outside?

if they don't, we would ask them to leave. there is signage that it has to be posted to legally remove someone from your restaurant. we would like to do that as in a conversation. you know, it is a private property issue on top of everything. and true conservatives you have, private property trumps almost anything. the reason for the second amendment is to protect private property. stuart: yep. you just said a moment ago that better not take a gun out of its holster while i'm around. >> right. stuart: explain. >> well, that is against the law. once you have taken the gun out of holster, then it is gone from perceived threat to actual threat. and, then we would have a problem. stuart: okay. jack, we appreciate it. jack perkins. appreciate you being with us. i share your point of view on this particular issue, much to the annoyance of many of our viewers. >> not everybody does, right. stuart: thanks, jack. we appreciate it.

come on and see us soon. >> thank you, stuart. stuart: i got to say on the market because we're down, we're down bit. 400 points lower. 17,000, just holding. get this, "affluenza" teen, ethan couch, could stay in mexico for months. his lawyer is fighting extradition. judge napolitano is back from his extended vacation. he is on that subject. feel a cold coming on? new zicam cold remedy nasal swabs shorten colds with a snap,

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♪ stuart: tradition of -- extradition of ethan couch better known as "affluenza" kid could be months away. his lawyer said going back from mexico could violate his rights so he is staying a few months. all rise, judge napolitano is back. >> i'm not sure how i understand the argument deporting him would violate his rights unless the punishment escaping probation for a youth is greater ites i suppose you make that argument but that will fall on deaf ears. stuart: can we get to the bottom line as i see it? >> sure. stuart: at some point he comes back to america. he can not have that 10-year probation wiped away. the most he faces is 120 days in jail because he skipped parole.

that is all the most can happen? >> the reason the most he faces is 120 days because he is a youth. if he were an adult he would face resentencing and could be sentenced to the full 10-year term. remember, this is not just a dwi, this is a dwi with four deaths. it is bizarre defense. the judge allowed defense. jury accepted defense. state is stuck with that. no appeal of or acquittal obviously. the real culprit is the mother who orchestrated this whole thing. never mind way she raises her kid, she made this kid an international fugitive! stuart: i go further the judge that bought the "affluenza" defense. >> to that extent you're right. remember in our system the judge is a gate keeper. he decides if defense is articulated before a jury and jury decides whether they y ud in history that permitted "affluenza" defense to go to the jury.

stuart: might be the last one. >> yes. stuart: i want to bring out the open-carry rule of texas. i'm a big supporter of gun rights. that is the second amendment of the constitution. i'm for it all the way. but i have a few qualms when i think about walking down the street seeing people carry guns openly. i feel rather intimidated. how do you feel? >> well i have not seen people other than police walking down the street carrying them openly because there is no open-carry in new york or new jersey. stuart: imagine this. >> i too am a strong supporter of the right to keep and bear arms. not because it is in the second amendment. because it's a natural human right to defend yourself and use currently-available technological means by which to defend yourself. i'm glad we have a second amendment. supreme court has found that is pre-political right. it existed before we broke away from the mother country. because it's a, it's a human right.

the restaurant you're is correct it restrains the governornant. it does not restrain priced individuals. you can say to me come to my garden party but don't bring your gun. he can say to me come to my restaurant but don't bring your gun. stuart: i can't tell the colt .45 guy down the street from carrying gun. >> but you can walk away from him. stuart: is that america. >> rather than interfering with his freedom. stuart: you're killing me. i'm going deaf with what they're saying. it is alex. he is doing it. alex -- >> he a good man. stuart: more vann any after this. -- more "varney" after this.

stuart: now, the program thus far this morning has been all about the selloff on wall street. it started right from the get-go at 9:30 eastern time when the market opened. we were down 300 points in no time. then we were down 400 points. that's where we've stayed.

the big problem early on was the slowdown in china. that was compounded later with other news about a slowdown in manufacturing in the united states. as we leave you, we got 17,000 on the dow, down 420 points. neil, it is yours. neil: stuart, thank you very much. you're right, it comes back to china, how much we can trust as far as economic statistics out of china. the latest one as stuart pointed out dealt with the factory sector there. we had similar news there. no matter how you slice it, things stay where they are now, this would represent biggest opening day fall of the stock market since 1932. back then on january 4th, 1932, we were down 71 points. that represented about an 8% slide in the market at the time this represents about a 2.2% slide but as i said the catalyst this time seems to be china and