born by new year's day at latest. ashley: the tension is palpable. you can watch this, in all the real grower in real time. adam shapiro looking at what the heck. connell mcshane, we hand off the big breaking story. about harriet the eagle. connell: you started your drinking early. the year is a second longer. you guys are all over everything. ashley: we're on it. connell: you're on something. welcome you to "cavuto: coast to coast," i'm connell mcshane, in this week for neil. we have plenty to cover on a friday. you know about the u.s. slapping sanctions on russia for election hackings. russia signaled it will be the next administration that matters more. the russian president, vladmir putin, saying he will hold off any type of retaliation over the sanctions. instead wait to rebuild relations and office of

20th. chief information officer, theresa peyton is with us. what do you make of the response or lack of response from putin. >> he is taking a wait and see approach. we have three weeks left. i know president obama needed to do something, a response needed to be made and it will be interesting to see in the new year with the new administration, the negotiations that happen. candidly i like to see us start talking about ofnsive measures. a lot what we've been talking about so far is after a brch has happened, what we will do about it. let's talk aut not having breaches in the first place. connell: you talk about president obama needing to do something. there is some argument he should have left it for the next administration. you're saying get out ahead of this or, you know, i'm sure there are some also argue at same time that he waited too long. what is your view on the timing of it? >> the thing is, getting the

intelligence together, attribution, the information, who did it, who was behind it is very hard. we don't have surveillance cameras. we don't have physical witnesses often with data breaches. the president has to let the intelligence play itself out. the one thing that i think the new administration can take advantage, whether you agree with the actions that were taken or timing of it, it sets the table stakes for negotiations. connell: yes. >> the new administration can say, okay, the old administration did this, if you don't like it, how do we strike a deal? how do we talk how maybe we agree to disagree on political pong, but we need to talk about not attacking u.s. businesses -- political espionage. if there are things about the last administration you didn't like, let's make a deal. connell: i think there is lot to make that president obama boxed in president trump to some degree, but there is chance he did him a favor, not

intentionally but he set it up that the sanctions can be used as carrot. listen, trump can say you want to get rid of the sanctions, do this and this. >> exactly. sanctions will not stop financially motivated hackers. it is too lucrative for them to keep hacking. i like to see a new deal we talk to russia, china, eastern europe, other countries attacking u.s. businesses, we don't want to see this continue. how do we make it financially lucrative for these other countries to stop the hacking of american businesses? connell: i was saying let's talk a little bit more about this. theresa, stay with us. manny gomez, former fbi agent. good to see you. the other part of it president trump will meet with intelligence officers about what happened with russia. your take on now that president putin has not decided to go

forward with any future retaliation. how does that set trump up when he comes in. >> this sets him up tremendously well. he has a carrot. he is able to make a deal. that is what he does best. connell: what does he make a deal on? helping out with terrorism? something syria related? >> all of the above. clearly not only russia but israel sent a message they're willing to work with trump. so the first 100 days will set the tone for things such as hacking, intelligence sharing, terrorism fighting, globally, trump will form more of a partnership, even though we're not friends with russia, we don't need to be enemies with russia. connell: to the point not being friend with russia, trump spoke it is time to move on. you're formerly with the fbi. the fbi put out the 13-page memo said in their view fairly clearly it was russians that did this. is it time to quote, move on or will he need to be tougher? >> we need to be tougher.

they are hacking our systems. they are trying to steal our intelligence and top secrets. but at the same time, now that trump is going to be in power, i think he is going to reach out to putin an try to work it out. let's -- we'll continue spying on each other but that doesn't mean we can't be friendly adversaries. connell: theresa, having worked in a republican administration in your past, do you think there is room for mr. trump to be tougher than the way he presented himself so far, time to quote, unquote, move on? that doesn't seem be going over very well with republicans, likes of mcconnell, mccain, lindsey graham, people like that? >> you can see from the standpoint he has agenda he wants to roll out. cybersecurity will be a big piece of the agenda. he said as much. some of this can feel like distraction. he is getting an intelligence

briefing on this very issue. and at the same time as he comes more up to speed on some of the briefings he will formulate his own policy. candidly it is not just russia who is attacking u.s. businesses and u.s. organizations. it is china, other countries. some are state-sponsored, some are lone wolves and some are cyber criminal syndicates. we need international accords disincenting companies turning a blind eye against groups taking action against american businesses. we need to sit down to come up with financial incentives to disincent countries allowing the hacking to continue. connell: our conversation to this point is all about this new type of war, the war that takes place in cyberspace but the president-elect moments ago posted on facebook about traditional military. i will read the post. we'll build up our military. we'll make our military so big and so strong, so powerful i

don't think we'll have to use it. nobody is going to mess with us, that i can tell you. you have no doubt, manny, who wrote that post. sound like out of one of mr. trump's remarks on the campaign trail. the idea of building up the traditional military as a deterrent, that is a conversation certainly i think goes back to president reagan's type of talk,. >> absolutely agreed. we need a strong military, because in case we do need to use it, we have to have it. right now the military has shrunk. to be quite honest with you, other countries are not fearing us as they used to, specifically russia and china. russia is building up their military. they have obviously taken over lands they believe is sovereign to them. we disagreed but we did nothing about it because perhaps we couldn't do much about it. china is the same way. they're building up their military. it is time for us to the be the world's superpower in reality. connell: we'll talk about china later on.

happy new year to both of you. thank you very much for coming on. president obama is going out with something of a bang. not only the sto a russia we've been talking about, the new sanctions but condemning israeli settlements. we saw that earlier in the week with the speech from the secretary of state john kerry on his way out, and response from israelis and benjamin netanyahu. it is a st minute ban on oil hat, the in the arctic. transition between administrations and handled, chris bedford joins us from "the daily caller." it contemplates into this discussion we were just having, chris, this new president, president-elect trump being boxed in or being handed in some ways, i'm talking about russia in particular to start off, something of a gift here that he has this set up from president obama, he didn't put it in place, but as a negotiator, that is howe approaches everything, trump, hcause th as the quote, unquote carrot. what do you think?

>> he is definitely set up well here. this means obama kind of wiped the slate a little bit for him. obama was afraid donald trump wouldn't react. some republicans that wanted strong reaction to russia were afraid of that. we have a big reaction. diplomats expelled. spy houses shut down. donald trump comes in and doesn't have to start looking like overreaction of putin. if one of our guys disappeared in kiev, that is the kind of thing that the u.s. president would respond to. here he is basically free to try an do a little bit of a reset with russia. connell: he could say to them, hey, listen, you want to get rid of the sanctions, i need help fighting these terrorists. we have guys we need to go after. you work with us on this and we'll peel back some of these sanctions. i guess that friendly relationship with russia, at least he has something to hold over them, right? >> exactly he has something to

hold over them and they have things we want. right now they have a huge presence in syria. we don't want our ground troops in syria. looks like future of aleppo will hang between turkey, between russia and assad their ally. if we want to have influence there we'll have to be able to roll that back a little bit. we can offer things, hey we'll take saying shuns off the intelligence community. we're getting boxed out in places we want to be a major player. connell: especially president donald trump who presents himself as the ultimate negotiator. that is how he approaches life. you assume this is how he will approach the situation. the one place he may be boxed in a little bit with his own party. how will he approach the relationship say with a mitch mcconnell on certainly influential senators likes of john mccain and likes of lindsey graham would like see even more done against russians and more aggressive approach than trump has presented? if he has on the negotiating

side how can he approach his own party? >> you have to be careful. ways they work together a lot will be domestic. the republican party is extremely hawkish towards russia. their limitation is that the foreign policy is largely decided by the executive with support from the senate. so he will have, he will definitely have the biggest stick in this relationship and this, like you said earlier obama's actions free him up a little bit. he will be pushed by the gop to be more aggressive in syria and more aggressive in the middle east. connell: yep. >> but i think he has the biggest stick. connell: on israel do you think? he is in good negotiating position now? >> israel's tough. he will have to hit the united nations pretty hard what they did i. israel is reacting really strongly internationally, telling countries they have gone way out of line. he has a little bit of a moral high ground in israel. before americans might not pay attention and now looking at u.n. security council passed one resolution against syria and passed 20 resolutions against israel. they're saying maybe this isn't fair. he will be online with

republicans and pushing through for a stronger relationship with syria -- with israel, right. connell: not syria. thanks for correcting yourself. chris. >> thank you. connell: chris bedford, daily call. as we talk about the end of the year in politics, what about the end of the year in the markets? if you look at the major averages the dow is up for the year 14%, nasdaq 10, s&p eight. smaller stocks of russell is 2000 are up by 20%. we'll break down what is driving all of this but maybe more importantly where we all go from here. your insurance company

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best performance from election day to year-end since the days of herbert hoover since he was elected back in 1928. nicole petallides on floor of new york stock exchange. we get to the end of the year. we look at big epwinners and losers at end of the year we have interesting stories, nicole. >> we have the best since herbert hoover, we have that going for us. overall we have gained 2400 dow points for this year, a great year. you didn't get dow 20,000. not complain for 401(k)s and ira's. dow is up 14% all green for 2016. dow is up about 14%. s&p up almost 10 and nasdaq up almost eight. won't leave out russell and transports, i know you mentioned them, about 20% gain. best of the best was transportation because of donald trump bump. we saw financials and energy.

nighted health, chevron and exxon a. three names of the dow 30 had down arrow. nike lost market share to adidas and reebok. disney despite a great "star wars" launch, it was still a miss. it dropped about 1%. we certainly have jitters in the market. i just went through the outflows and inflows. we saw outflows of equities and everybody is running in, recorded net $3.4 billion inflow into the bonds, into bonds funds. so there is nervousness here at the end of the year, but we have 2017 to look forward to. connell: hang with us, nicole for a moment. i want to bring mark and nicole into the conversation. i don't make herbert hoover reference to think we'll have the crash of 29 here, but what

happened after the trump bump as nicole called it? it has been quite a run from the election to the end of the year. where do we to? >> i believe in 2017 we'll see positive growth, maybe even 10% by the end of the year. you have to remember trump says he is going to drain the swamp. as i said last week when he starts draining that swamp it will probably stink a little. if you look at charts and graphs, and technical indicators everybody would agree we're due for correction of some sort. but a lot of times things that get us are not the things on the charts and the graphs and technical indicators we can see. sometimes acts of nature, it is storms, that kind of thing. sometimes it is the political environment around the world as conflicts. sometimes things we don't see, that actually hits us in the back. let's not forget, bless their hearts, media and their hype. every time mr. trump sneezes they try to make a big deal of it. if you look at ordinary, which i'm going off 30 years

experience here, we would say we're due for a correction. now as i said last week also, there was nothing about mr. trump thus far that has been ordinary. connell: no, that is true. >> i believe when he starts making all these changes, i believe that he is going to upset some applecarts and there will be a lot of volatility. i think we will see overall growth for the year but you might want to buckle up your seatbelt. connell: i think that is probably fair to say, reference to the media, plus our hearts now indeed. mark, what is your kind of approach heading into the 2017? is there a relatively degree of caution? or, is it more optimism with the idea that more business-friendly practices are being introduced and more room for growth for equities? how do you look at things? >> we look a little bit of both. we borrowed a lot from 2017 gains already. so i think from a stock perspective, i think it is good to wait and see, look what parts of the trump agenda will take place. see what happens in washington.

see if corporate earnings can really deliver. but the economy is strengthening. it has been strengthening. we look for gdp growth continue to move up. approach the 3% range. we don't think we'll see a 4% gdp number as some politicians are hoping for. i think we'll see a stronger economy, a good but not great stock market. we'll see rising interest rates that come along as a result of the stro economy. coell: right, nile? sometimes people look at, what mark is alluding to, rising interest rates or other risks out there. when times are great we ignore them. all of sudden when times are not we have to deal with emthis, right? >> we have deal with them great or not great. we know you will have fed raise rates, raising second time in a year. last week was the first time in a deck i had today. we know we'll have rising rates. we know we'll deal with stronger u.s. dollar and we're dealing with higher gasoline prices. our first get noted some political things we're seeing. there was no doubt there was

nervousness brought on by israel and russia and u.n. by the no vote. those are a couple things pending but there is so much optimism what donald trump will do for business-friendly environment and tax cuts and regulation. there is a lot of hope. we have to deliver on that, have that come through, coupled with earnings. everybody is expecting great earnings for 2017. people are holding on to the bullish feeling for 2017. if they don't deliver and those things don't come through, we have headlines, we could see a pullback. connell: thanks to all involved. angela, mark, nicole at the famous corner of wall and broad in lower manhattan. we bring you up to 42nd street and times square. look up there in the afternoon where the security prep is well underway for the weekend and the ball will be dropping but this is a little bit different this year. it is always tight but with what's been going on around the world, a bit of a different approach after the, hoping that a berlin-style attack does not happen here.

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connell: are around this time every year you see stories on your television news about security for times square in new year's eve. it's a little bit different with the truck barriers being added in response to what we've seen overseas. former commissioner of the new york city police department howard safir joins us. good to talk to you. this is, there are all signs of the times of new normals and this is one that's put in place. i guess something that needs to be done though, right? >> absolutely. we live in a very dangerous world, what happened in berlin, what happened in nice are just targets that were not expected. so what nypd and the departments in new orleans and in chicago and boston are doing, is creating a perimeter around the celebration zones, with sand

trucks, with blocker cars. they use radiation detectors. they're using explosive detectors and literally thousands of police officers. connell: one thing i worry about when i hear a situation like that, for example, times square here in new york, there will be millions of people inside, what you rightly describe as a perimeter, what about the people just outside of the perimeter? these attacks have become so easy to carry out as if you have motivation to do so as we see overseas, that they are difficult to stop. within this perimeter r you're focused on it you can stop hopefully but in other areas it is difficult, right? >> there are no guaranties but the fact, in new york, nypd will have 7,000 police officers out not just in times square but throughout the city. they will have special weapons team. helicopters. people on rooftops. they have harbor and aviation working. so you know, you can't guarranty anything. what keeps a commissioner up at night is that lone individual

who is not on anybody's radar who somehow slips through something. i stood under that ball for seven years and we were able to protect new york and i have no doubt that the nypd will do it again tomorrow night. connell: right. >> but the fact is, there is a lot of targets in this country. that is what we have to worry about. connell: sometimes the targets as we saw in san bernanadino or orlando, that you wouldn't think of off the top of your head. where are we, do you think, kind of overall view as we end the year fighting terrorism? sometimes we do a great job obviously. other tiles seems like we can be reactionary. like what we're doing with these, you see the targets overseas, so now we're worried about trucks when there was a threat of a shoe bombing, then we took our shoes off at the airport. so sometimes we are reacting. are you concerned at all there is something we missing and we don't see? >> i'm always concerned. we have a very intelligent, well-financed, well-organized

enemy in isis. fortunately we have a new president is going to pay more attention and going to acknowledge the fact that islamic terrorism is the enemy. and, not kind of skirt around it as the previous administration has done. what we need to do is we need to be vigilant and of course the public needs to be vigilant as well. you know that saying, see something, say something, has worked and prevented many, many terrorist attacks. connell: we need the public to participate years ago. it even worked right in that area. >> worked in times square around worked in the bombing that took place recently in new york where fortunately nobody was killed but somebody walking down the street found a second device. connell: that's right, in the chelsea, in the chelsea attacks. up the block there was a second device and somebody saw it. happy new year to you and appreciate your insights. >> happy new year to you as well. connell: howard safir with us. when the ball drops tomorrow night in times square, minimum

wage will be going up in 19 different states. coming up next, why the fight for 15 as it is being called may intensify in the new year. we'll talk about the economics behind that. a fight to save an iconic deli here in new york. the restaurant owner who is offering millions to buy the carnegie deli will be on "after the bell." stay tuned for that, 4:00 p.m. eastern on fox business.

connell: we have business word on apple to bring you as you look at stock. overseas report from nikkei, apple will slice iphone production by 10% first quarter next year. it is set to slash the iphone production according to this report. certainly the stock and company taking heat this year for not innovating enough. there have been articles written about that even over past few days. still apple's stock, all the ups and downs, it finished up over 10% for the year 2016. or it is up 10%, apple. just about $116. all week long we've been doing a series called, cabinet close-up, showcasing cabinet picks and we put together a number of segments on that. carl's, jr. ceo, andy puzder has been tapped to be the labor ceo. he has been a long term critic of minimum wage.

>> restaurants have a commodity prices down, labor prices have gone up due to minimum wage increases regionally. transactions are down, businesses is down, and the reason transactions are down because of minimum wage, because of minimum hours, because of family leave and obama care, if we're going to increase the minimum way at all we have to keep lower minimum wage for entry level employees or they will be shut out of the workforce. connell: what is interesting about that the minimum wage is set to be hiked in 19 states beginning on the 1st of january. national council of chain restaurants executive director is here. kcke restaurants ceo, andy puzder going into this position if he is approved, rob, you heard his comments on minimum wage? how about the timing? the fight for 15 has been a big story, fight for fifth, has been a big story. what do you think? >> connell, thank you. andy puzder will be a great labor secretary. i had honor of working with him.

he will be thoughtful and informed and balanced. we have had eight years of obama administration and it will take andy puzder time to unpack the agenda promoted by the obama administration. it has been like what i call a regulatory rampage for the last eight years, labor department, nlrb and eeoc, a number of different federal agencies. when he gets confirmed by the senate. we know that is a process coming up next several weeks, he will take the time to assemble a team and take input from a variety of stakeholders, small businesses, large businesses, most importantly the perspective of the american worker. i think he will bring to the table a fresh perspective based on his experience, really fantastic experience as leader after a very large chain restaurant, 75,000 employees. connell: right. >> he has the experience and understands what will work for the american worker and as importantly what worked for american business. connell: on the point about american business i'm sure he

will say and as you have said, you know, we need to roll back so some of these regulations that have been stifling to business, in particular small business but on the idea of the american worker such as there is one way of describing american workers in general, he is going to be painted, he already has been critics to be anti-worker, how will he respond to that, by labor groups and over minimum wage and things like that, that is what they are going to say that andy puzder is anti-worker? >> that is unfair. people will see how thoughtful he is. he take as measured approach to the labor department that has broad mission and jurisdiction. not only wages but occupational safety and health, retirement security but on the issue of wages he has been very clear an increase at the federal level is not out ofhe questn. it is a matter how fast and how soon. connell: right. >> as you pointed out, starting wages are going up in 19 states as of the beginning of the year.

each state has its own economy has its own standard, cost of living, its own median wage. certain states are able to make the increases and still have very vibrant labor market. connell: different standard of living obviously here in new york than many other states. 10 bucks an hour will not go very far here. it may go a little bit further other places. should we even have, this is more of an intellectual debate have a federal minimum wage or is this topic best left in your view to the states? >> there has been federal minimum wage on the books since 1930s, acts as floor for starting entry level wages and states have the ability to go higher. states have done so. some argue, sort of a laboratory experiment. how fast and how high can the starting wage go before it really impacts job creation. it impacts workers at the lower end of the economic rung to need skills to really advance in their careers.

connell: do you think we're close to that point? if you go from eight or nine bucks up to 15, for example, that is a pretty big jump, right? >> it would be. i don't think any policymaker in washington is seriously considering $15. connell: not on federal level. if you do that on state level, depending where yore, if y were at $8 and go up to 15, if you do it overnight that can be rough on business. >> that is putting it lightly. that would be unstainable. it is ongoing debate in washington. but having andy puzder at labor department will be a very refreshing change. we have had -- he brings unique perspective as business leader and thought leader within the chain restaurant and restaurant industry and retail industry. written extensively, spoken extensively not shy about his opinions. he will be refreshing change from tom perez and hilda solis. connell: we had him on here a lot. he has been outspoken on issues

for years. it shouldn't be a surprise to people. rob, thanks a lot. good to talk to you you about it. good perspective. happy new year. >> happy new year to you. connell: rob green. investor have been focused or we have on dow 20,000, right? while that is happening the real big approach, how about the federal debt, approaching $20 trillion? 20 trillion, doesn't seem people get as worked up about that, right? a big gop lawmaker was on with us saying some deficit hawks are worrying. we'll talk about after this.

>> i'm jeff flock. in a stunning mount prospect, illinois, talking gas prices. you know how much we saved at the pump last year compared to the year before? would you believe 27 billion, with a "b," billion dollars? that is according to aaa, but those gas savings could be short-lived. prices are already on their way back up. the national average today up $2.32 for average gallon of regular. last month? 2.15. this time last year, new year's eve, 2016, the national average was just $2 a gallon. where are prices going from here? we talk to our buddy patrick dehaan of gasbuddy.com on fox business today. he told us in 2017 the

organization anticipates the national average will rise to the highest level since 2014. several states get up to $3 a gallon.

connell: pack on "cavuto: coast to coast," when neil comes back next week, something to look forward to, congress gaveling on tuesday for next session. you can watch the whole thing unfold on noon eastern.

neil will have his gavel. speaking to his producer ralph, he is focused on the show doesn't appear to be focused on this show, i've been here all week but very, very well-produced show when neil comes back on tuesday. this is well-produced too. why things have gone very quiet. tax cuts and spending hikes are on the docket, right? but does that mean an increase in deficits? we started to have this conversation on the program yesterday. and got into it a little bit with the house republican policy chairman, congressman luke messer. this is how it went. >> the number one way to solve our fiscal challenges in congress is to have a growing economy. we need to make the policy decisions it takes to get our economy growing. connell: you're willing to add to deficits in that camp in the short term in order to get growth? that is the tradeoff? >> we're going to have to work our way through this we've got a lot that needs to be d frankly we've had stagnant growth over the course of the past eight years.

i think we can pass meaningful tax reform that will get this economy growing again. connell: terry jeffries joins us cns news editor. it is interesting, terry, that will be big, one of the big debates this new congress will have to have, right? it is great to cut taxes, we might get more growth but deficit could be issue. how will we deal with it? >> deficit and debt will be an issue. the congressman is right. we had 10 straight years, 2006 and 2015, real gdp grew less than 2%. that unprecedented in the history of the united states. i do believe the tax cuts that trump is proposing will spur growth and get you more revenue at a lower rate, however the federal deficit now is being driven by increased spending in social security, medicare, medicaid. the first two benefits are going to baby boom generation that's retiring and they're owed that money. third is expansion of medicaid

under obama care they can repeal immediately and deal with. they have to grapple with social security and medicare. they will see escalating debt in the long run plus escalating interest rate. the economy won't grow for long if that is what they do. >> interesting, we were showing a clock talking about the yearly deficits the overall federal debt approaching $20 trillion level. it almost reminds me of the conversation we're having about peace in the middle east. you're repeating yourself. every single year you have the same conversation. this too and it doesn't seem like it resonates with a lot of people. people say yeah, it is an issue, we'll deal with it at some point. that is a problem in of itself, right? >> it is a huge problem. politicians in washington don't want to deal with it. one. reasons donald trump got elected they see both establishments parties and they want to advance their political interests, not interests of the country. donald trump told stocks news,

told hannity he wants a balanced budget real soon. he hasn't come through with a concrete plan. if he doesn't do it, eventually the point is the debt is untenable. if you have $20 trillion in publicly held debt and pay 5% interest on it a year, that is one trillion dollars cash out the door the federal government needs to get from taxpayers to hand over to debt holders. that is untenable. that is where we're headed. connell: it is not a problem until it is. with you say that's where we're headed how close are we, do you think, to an issue where it is a tangible problem that real americans have to deal with on a day day-to-day basis? or give me me an example how it is already is? >> people can pull on the web the cbo long-term budget estimates. what they say there, more we go in this direction, the more we face potential of fiscal crisis where you see sudden spiking of interest rates, where the

government would have very difficult time floating new debt and financing the debt we have. it would suck up much of federal government spending. connell: right. >> we're going to be there soon. people, and look, the politicians don't want to deal with it until we get there but we can't get there. you don't want to be in the america the day after the fiscal crisis. connell: reason it is important for you and i and others to talk about it, when it is an issue then it is too late. terry, thank you. we appreciate it and we'll see how it bows in the new congress. >> thank you. connell: one of the individual stocks definitely taking note of this year, twitter. since it went public, twitter is down 30 he have is%. it is -- 37%. it there is talk it is not working out as a business. what is the big plan from ceo jack dorsey? some say, this isn't in the teleprompter, the fact that they have given up, ralph has given up on producing until neil gets

back, the plan he says it is for the birds. literally what it says. twitter, we'll be back. neil's back next week. that's horrible.

connell: we're talking about twitter now. many times this year you heard us do stories how twitter as a business has been struggling. now it is considering making changes. one of the changes would be letting users edit their tweets. they tweet something out and edit the tweet which you can not do, you have to delete it. a marketing expert joins us now. i don't know if this is the big solution to what ails twitter but what do you think? >> it is absolutely not the solution saving twitter. i think it is an interesting feature. sure, remember they're talking about two different types of editing and deletes. one would be a five-minute

window, you made a grammatical error or said something you didn't mean to you have a quickly a window to change that. there will be a longer editing period, go back a day later to change something, it will show the history of what has been edited. twitter is not losing itsinstant real time. connell: you can do that on larger social networks already. snapchat, the company that controls and owns snapchat is called snap. it will be looks like one of t more highly anticipated ipos going public. not saying they will be the next twitter. they say we're the next facebook. you look at these businesses. which ones make the most sense? obviously facebook does, but is snapchat more like that or will it have problems twitter has which is making money with their advertising? >> yeah. snapchat is already making money. twitter has never been able to

figure out that business model for themselves. connell: i know. >> snapchat cracked that code. they have done a great job integrating advertising natively, right, into the app itself and twitter has never really managed or figured out how to do that. i think snapchat will continue to be huge. even from clients perspective we still tell our clients, twitter's great. audiences, look at the presidential election to see the role twitter played. twitter is not going away by any means but in terms of as a business they certainly have a lot of work to do. hopefully they bring on some new leadership that help them make changes. connell: maybe it time for old guard and jack door sys of the world to bring somebody new in. that is interesting take. you might be right about that. what would they do though, those new people coming in? what type of changes can they make to make twitter viable business having ads that you would look at and click on which i think would be way eventually you make more money, right? what can they do differently?

>> there is a lot of ways they can integrate advertising a little more natively contextually into the plot form. like snapchat is doing, like instagram is doing. twitter needs to be careful. twitter is different type of social network so you can't force ads like facebook can on twitter. they have to be creative you how they at that great that. connell: there is bunch of doctor, more to it, normal people. the reason it gets a lot of attention we should point out, it is all reporters. when the president-elect or somebody tweets, all the reporters are on twitter, they're all picking it up. half the time, however many thousands of followers you have, half of them are bots or could be fake. that is issue for twitter, how many people are using it day-to-day and interacting with it? >> true. twitter has challenges of using twitter and retaining those users.

people try twitter and can't figure out how to use it. twitter is faster than api, when you think real time or news where people become the media, twitter is the go-to platform. connell: still first thing i got to say, wake up in the morning, first thing i do, pretty much, look at your phone and look at the twitter feed. you're not looking at facebook. you might for unfun or social reasons. you're looking at twitter. it has usefulness. maybe they figure it out this year. happy new year to you. >> happy new year to you. connell: as we look at top stories today, obviously what is going on with russia is at the top of the list and tensions have been intensifying and the response from putin or lacof announced yesterday by the united states very interesting and what does it mean for donald trump as he takes office? we will take that up with the trump camp. that is coming up next

...

>> welcome back now to cavuto

coast to coast. i'm connell mcshane in for neil this week and u.s. and russian tensions have been intensifying. and president obama taking what some describe as a hard stand on all of this. the president of russia, vladimir putin, meantime, holding off and retaliation at least for now, says he's looking to restore relations under the next president, donald trump. and blake burman joins us and has the latest from the trump camp. what are they seeing? >> the back and forth between the united states and russia centers around of all places, moscow, new york and centerville, maryland, just about 50 miles to our east here in d.c. the scene that took place just a while ago. this has been within the past hour here. you see this slew of dark tinted vehicles that left the complex there. the obama administration says that that complex is being used by the russians for intelligence purposes. the russians say it was merely

a recreational gathering spot for families. either way at this hour they are out because that facility and another one in long island, new york, has been closed off as of noon. vladimir putin responded to the closures, the removal of 35 russians from the u.s. and the additional sanctions by essentially brushing off president obama. here is the statement that he released, his office at least a while ago. they say, quote, although we have the right to retaliate, we will not resort to irresponsible kitchen diplomacy, but will plan our further steps to restore russian-u.s. relations based upon the policies of the trump administration and perhaps coincidentally, connell, or not, who knows, the president-elect posted this message to a social media basically, earlier today as well saying, quote, we are going to be building up our military and we're going to make our military so big and so strong and so great and it will be so powerful i don't think we're ever going to have to use it. nobody's going to mess with us. that i can tell you.

that from the president-elect. by the way, mr. trump's staff, at least, one of his top advisors saying that so far, at least as of this morning, no direct communication between the president-elect and vladimir putin himself. connell: right. because trump is supposed to meet next week with intelligence officials. can i follow up on the compounds for a moment. that's interesting or at least for people watching this. in maryland, as you say on the eastern shore there, and the place on long island is on the north shore of long island, the shot that blake referred to in maryland earlier today. these areas, these are big homes and i know that area of long island is one of the few areas, unless you go way out to the hamptons where you can get gated homes secluded from the rest of the neighborhood. big mansions and the like. we have areas like that overseas as well, i guess, like, you know, outside of moscow, there would be a place for u.s. diplomates to kind of hang out, is that what these areas are? >> you would think there wouldn't be something like that overseas. but basically, this is 50 miles

away from us here. it's kind of an area of the delmarva region, delaware, maryland and virginia and get in the middle of it, it's sparse population, bigger plots of land you can have a massive compound. connell: and have conversations that aren't, tough to have surveillance and stuff like that. >> when you're 50 miles away, when there's wide open areas, you would think that that would go into the thinking of russia or whoever, but they're saying, look, this is a place for our kids and they're playing the holiday card, russia is. our kids are there and they just want to enjoy the holidays and they're getting booted out. but the u.s. says it's not a recreational spot and they feel it's part of the whole-- >> and putin saying that u.s. diplomates can bring their kids into the kremlin for the holidays. so a lot going on here. blake, thank you. >> you got it. connell: in terms of president-elect trump, to blake's point saying it's time to move on. he'll have meetings with the intelligence officials about what has happened, but there are certainly questions about

this hacking. it's a big sorry. we have a former cia analyst with us. the idea that's been brought up to us-- good to see you, tara. >> good to see you. connell: do we have did he -- definitive proof that the russians did it. this 15-page report should be good enough for everybody including the president-elect, or what? >> i think that we have definitive proof. in terms of how definitive we're going to get in terms of classified information. we've had bipartisan support on both sides of the aisle agree, all of our intelligence agencies agree that the russians are behind it. the and there's a report which outlined some unclassified parts of the evidence and have a fuller investigation where members of congress who are cleared to see classified information, will be able to see the evidence itself. this is both forensic evidence in terms of computers and where the attack originated from and also evidence that shows the

implication of russian officials in the attack itself. meaning they had knowledge of it, they were behind it and that they had, you know, knowledge to direct it. so, i think we've seen as much evidence as is needed to make and definitive conclusion on this and perhaps a little more in the final report, but again, much of that will be classified. connell: to that point about further investigations, we've heard from senator john mccain, he'll be holding a hearing to talk about cyber threats. he's calling on james clapper to testify at that hearing. how will it be handled by the next administration. it looks like they're setting up a clash between the president-elect and president. and mitch mcconnell-- i don't know if they see eye to eye. >> the executive order put in place by president obama can be reversed by donald trump if he sees fit to reverse it. having said that you have republicans who agree with

putting sanctions on russia for the cyber activity. you have a revision to a previous executive order which now puts sort of election interference into the bundle of behaviors that's unicacceptable to the united states as it should be. ago go into place if other actors carries out these tasks. trump has his hands tied here. he's meeting with officials from the intelligence committee and briefings he should be gettinery day as far as i'm concerned. let's see if his assessment once he gets classified information behind the scenes. connell: it would be tough for him to go back on that. it gives him a negotiating tactic. hey, we'll take the sanctions away. didn't put them in place, but use that as a carrot to negotiate a little bit. not sure if he'll effectively do that. real quick and then we have to move on. >> he can use them as a carrot, but he hasn't come out

heart-hitting. he hasn't said he reviewed the evidence and hasn't said it's acceptable to interfere in a u.s. election in a cyber attack on our, you know, e-mail servers of election people running for office. so, to be honest, it's in the trump administration's best interest to take a firm stand on these types of cyber activities, because they're the next administration and they're going to be the target for the next four years, if they didn't take a hard stand now they better get ready for attacks on them as well. connell: good point. tara. >> thanks a lot. connell: and sean spicer, who is going to be the press secretary, looked at friction between president obama and the president-elect this week. we'll talk about that. but first watch sean spicer. >> i think potentially, there's an amount of jealousy of what is occurring, domestic policy and jobs, this is a president that's going to accomplish more

before being president than some may have accomplished the first couple months in office. connell: we have a former trump surrogate and a conservative commentator. jason, go first. jealousy, what do you think? >> there's no question that president obama is acting out of complete emotion here, and president-elect trump is getting under his skin and you see the deals he's made with carrier, with sprint, with boeing, so, he's been very successful before he's even taken oath of office and i think it's getting under obama's skin and he's acting out on emotion. connell: what do you think, somehow there's some jealousy what the president is doing on his way out? >> connell, i think that's purely arrogant on his part. these deals, these were in place long prior to november 8th. like i said, this is just arroga. president obama-- >> you're talking about the business deals, the job stuff, is that what you're talking

about, sprint and the like? >> absolutely, right. and president obama, i was regional director on his campaign in 2008. he will act and continue to act with the utmost decorum that his job has. if anything, he just wants to see the country continue to prosper. >> but robin, look what he's done in the last few days with the sanctions on russia, what he's done to israel. he's just acting out of complete emotion. >> i want to talk about that a little bit. especially with russia. since that's the story of today. sabrina, why don't we get your view how has the current president set up the next president? it's one of two way, we talked about it earlier. he's given him a position to negotiate from, whether on purpose or not. sanctions in place and to negotiate or some have written today he's boxed him in. how has he set up. >> take a step back and realize we're looking at two administrations, one coming in and one outgoing, grand standing both of them and both interesting in reminding the

world that they have competing views how to run the government. you know, how large the government should be and what kind of accomplishments they want to have in terms of foreign policy and domestic policy. of course it's not surprising that we're seeing president obama try to push through regulations on the way out and israel, and set things up on the russian stage. at the same time it's not surprising that trump wants to come in appearing to be already charge with confidence from the american people. so, i think we have to sort of walk a fine line. i don't think either is really in the right here. connell: well, okay. that's fair. jason, to go back to you on the point you started to make there. the president-elect comes in, inaugurated january 20th as the next president. how do you think he handles these very situations, for example, if we take up russia, first of all, does he go in and change the position he had or friendly towards the russians, use the sanctions as a negotiating tool? what do you think? >> look, i think-- what you're witnessing is the difference between a community

organizer and a shrewd negotiator who wrote "the art of the deal", president-elect trump is running circles around president obama and i think what you're seeing is, you're seeing someone who knows how to make good deals, someone who knows how to position the u.s. properly. it's not such a bad thing to, you know, to use russia in certain ways to make-- to put china on the defense. i think that what trump is doing, he's a chess player and he knows how to play the game. connell: the question is, be a tough chess opponent, i would think in vladimir putin, but, you know, in terms of who is using who and you're saying, jason, ro be is making a point that it's trump ahead of the game using russia and pitting them against china. that's an interesting dynamic to watch. what do you think, robin? >> the art of the deal, this is now-- this is the art of the election, we're beyond that now and donald trump, i don't know what he's doing. he's making these victory laps, not taking calls from foreign

leaders, only-- >> right, and president obama-- >> what is there to be jealous of. >> president obama is on a hopeless corps and michelle obama says we have no hope. i think that america finally has hopes. we have finally have hope and what the president is doing is a sense he's going to be pro growth and pro business. president obama's legacy he's trying to grab onto, his legacy is the destruction of the democratic party. >> president obama will dedicate more time for a transition to allow a smooth transition. connell: i wonder what it will be like. >> a smooth transition. connell: do you think the two will have any relationship after the 20th? or never speak again? >> i suspect it's not going to be a warm and cuddly relationship. if we look back and think about what's happening here, president obama, whether you like him or not, is of a progressive mindset. he believes deeply sort of top down government regulations and we've had a lot--

his legacy is obamacare and we have trump coming in and don't know all of what he'll stand for, but a number of cabinet picks look more toward the pro growth, groundup accomplishments, so i think we are going to see how things pan out. if trump is able to repeal and replace obamacare with a market-based system of health care that's probably not going to lead to thanksgiving dinner between the obamas and the trumps. connell: i don't think we have to worry about that. sabrina, thanks. and jason, robin, thanks as well. >> thank you. connell: with the markets today, i mean, it's one thing as we wrap up the year, you know, it's the movement towards 20,000, not quite getting there. it's kind of been the story of the week, but it's been a huge run-up to end the year, especially since the election. one index that's really been soaring, it could signal big growth to come for companies of all sizes and we'll talk about it right after this. your insurance company

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>> business alert. as we come back, the s&p 500 groups of stocks this year, energy, the energy sector is up 24%, that's been the big one. and now looking at financials, that's the big one since the election of donald trump, right? especially goldman sachs, leading the dow. done that story over and over again and telecom has had a good year, up by 18. now, let's flip it over before we talk about the market a little bit and look at your worst performing groups for the year 2016. health care is down. health care is down by 4%. that's the one to highlight in what has been a good year for stocks, especially lately for small stocks. the russell 2000 ends the year up by about 19%, so we move into next year, could smaller companies, these economically sensitive companies benefit the most from trump administration policies? christine short joins us now,

what do you think about that? i know we're doing well already, but what would you be looking at with smaller stocks for next year? >> i think the small caps are going to benefit from the same things that the larger caps are benefitting from. one advantage that small caps have, they're not impacted by the stronger dollar. coming into 2016, the stronger dollar was a big concern and kind of went away in q-2 and q-3. the expectations are the rally in the dollar that's going to continue through 2017 and rate hikes and economic growth in the u.s. the great thing about small caps, however, the price actually lags earnings resultsment so if you are keeping a close eye on the those fundamentals and watching the earnings reports, you can get in early before the price actually shoots up because they're thinly traded and not a lot of people are necessarily looking at them. i think if you think about the stronger dollar and why are

smaller cops benefit? these are companies under 2 million in market cap and domestically focused and the multinationals rely on other countries and you see that repatria repatria repatria repatriateion. sometimes we ignore the risks in the markets when things are going well. one of the points are the stronger dollar. we showed some companies. if you're a multinational ge, apple or other companies, that will have an impact on you. with the other smaller stocks, what factor are you looking at if the strong dollar saw something that would hurt them. what's something that maybe would help them. what changes are going to be put in place. is it something political or something different. a lot of the policies that he's spoke been. obviously they're reacting positively to those. depends what sector you're

looking at. a lot of comesbacks, financials, energy, have been laggards for the last several years. financial since 2009. so finally, we're seeing the markets led by the cyclicals and you came into 2016 which i will say was the worst start to the year ever you don't want to see that. and i think with the industrials, it's everything from an infrastructure and defense spending and looking at the financials, deregulation and certainly, a lot of cabinet membe members. was it priced in? the markets are taking a breather and ran up too quickly. one thing i'm concerned are salvations. p.e.'s, historically 15 times and i think that that valuation is rich. connell: maybe we pull back for a correction before a leg higher? >> maybe we pull back, but

everything is eth up well for 2017 ch 2017. 2017. wages and growing and housing seems to do well and mixed results throughout 2016 and it's psychological as the consumer goes into the new year and they're going to spend who are. things are setting up well and ran up a little at the end of the year. a little bit of a pullback. >> thank you very much. happy new year to you and hope you're right about the market certainly. thanks for coming on with us. tonight, speaking of the markets. the fox business network, it will be time for wall street week. it's back with the year-end special you're not going to want to miss. get you set up as we're trying to do there for next year. what's done well and might do well going into 2017. wall street's year end special tonight. the president-elect has been promising big changes, certainly to immigration. how his campaign really began when you think about it.

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>> well, so much for brexit worries. you know what happened in the united kingdom, the stock market closed at an all-time high. look at that, the ftse, and the financial times 100 index in london up they're at 7100 plus, a 14% gain for the year for the ftse and neil's take on the concensus getting it wrong will be coming up. how is that coming by the way. you have the whole show pretty much done at this point. ralph has been working pretty much on next week and not paying attention to what we're doing to understand. the dow is down 20 and keeping it eye on that, apple in the news and slicing iphone production in the first quarter at least we're led to believe that's what's happening.

the nikkei, the stock is down by 82 cents today and just about 116 bucks for apple just below that. we'll watch apple and that's kind of interesting note on u.k. stocks after the back and forth we have about brexit. a lot about trump as well and the trump administration is getting set to take office as it does. immigration attorneys seeing a surge in applicants for undocumented immigrants leaving the country and applying the country to come back. and what do you think of this? >> you know, it's an interesting thing, and not surprising. some of the people who are participating in leaving and then reentry are really the millennials. those who came here legally -- illegally and x it and re-enter legally and gives options and people are looking for certainty. we saw this with health care and a mini.

with the millennial illegals. looking for some sort of certainty in their path and exiting and having that official stamp coming back in and gives some choices and options moving forward. connell: makes sense from their point of view if they think that the incoming administration is going to be tough as it says it's going to be on illegal immigration. among it makes the big picture easier. there's a lot to do here. >> there's massive amounts of work on immigration. and the trump administration is between campaign rhetoric and it's interesting where they'll go. jeff sessions poised to take over as attorney general, hardliner in terms of immigration, but i also think you're going to see an interesting discussion for immigration we need to get to as a country. sadly, the leadership of both the political parties, democrats and republicans have been using immigration as a

wedge issue for far too long. they've raised a lot of money off of it, and ran political campaigns off of it and tried to win elections off of it. we're not that divided. i believe that the majority of the immigration issue could be solved in an afternoon on the floor of the united states senate and the house because everybody agrees on the broad spectrum of things. outside groups, both conservative and liberals are raising lots of money off of this issue. connell: and that's interesting, because if you watched this campaign you would think we're bitterly divided on this one particular issue, but where is the best place then do you think for common ground? >> well, i think everybody agrees on a lot of the basic things, in terms of entry and exit systems. we've got to make it easier for people to come here legally. people have to recognize, there is an opportunity there. conservatives and liberals to come together on core issues where we can get it done. it's also important for all of the political folks to recognize that the american people didn't vote for a

conservative agenda or a liberal agenda. they voted for disruption and this is what disruption looks like. and so, it's very interesting that while president-elect trump has dialed back a lot of harsh rhetoric on immigration, he may be the one who creates space for us to have a real conversation. connell: you're still talking about the wall, right, for real? a physical wall and you just think that's nonsense, they're not actually going to go forward with that? >> it seems to be going back and forth a lot on whether it's rounding people up and deporting, which everyone knows is not reality in terms of practicalities, nor is the war a practical components. a lot we can do in terms of border security that needs to be done and i think everyone agrees on that. the test is whether they can move everybody forward and if president-elect trump will choose to use his bully pulpit to force congress to do their job and address the situation. connell: you've got to be careful in terms of pulling it back too much. he's promised a lot of people a lot of things and one of the

reasons he was elected is because you had people thinking he was going to do certain things, whether build a wall or something else, could be trump supporters who could turn on him if he was seen as being too soft, right? >> president-elect trump has a fragile coalition he's built with blue collar and former democrats voting for him to come into office, but i think he's got enough wiggle room. he could say look, here is what's good for american workers, good for american jobs. here is what's good for the american economy. what we have to recognize, we can't get better at an old system. it's time for that disruption, that's what people are looking for and he can actually lead the charge on that and i don't think he loses credibility with his base if they see it's moving people forward and helping the people, helping jobs and getting the economy to move. got to get through that 20,000 mark. connell: tell me about it. so we don't have to talk about it. >> it's all on you, connell. connell: i said, it would lose

2, 300 points the way m going. last week i couldn't get close, and this week, thanks for reminding me. have a happy new year, boyd matheson with us. we have one thing you can help us learn this year into next year. a special year end message from mr. cavuto that sparked a new reaction. we'll have that from neil after this.

>> so last week, neil had his end of the year common sense and it actually sparked a huge reaction on social media, twitter and elsewhere. he told viewers to challenge concensus because more times than not it seems like that concensus is wrong. let's watch that again, here is neil. >> i have a resolution to make and no, it is not about eating healthy. been there, had my chest ripped open on that, got there. no, my resolution is for all of us, not to eat healthy, which is a good idea, but to show some healthy skepticism. not about what we eat, but about what we ear and told to believe. because we're told believe it and challenge concensus opinion and i want us paul-- all to remember why. because it's wrong, more often than not it's wrong. not just a little wrong. very wrong. when the concensus was that donald trump could never win the presidency and he did, or the markets could tank, if he did and they did not.

beware those who push these views and question you for dare challenging these views. remember the ones who sate donald trump supporters would go nuts if they lost, but saidening about themselves if he won. remember how wrong they were and how foolish we were for questioning them. remember them, all of them and all they said in the unasailable data they had to support what they said. remember how they picked and chose that data. remember how they virtually ignored russian hacking before the election, but that it cost their candidate after the election. remember how they quoted a cia report on the matter and swore by it, even though they were the same folks who ripped another cia report on weapons of mass destruction and swore at it. pan remember how they made you feel like an idiot if you questioned whether man was making the earth warmer even not more than four decades ago they were pushing an earth growing starkly colder. remember how the concensus said

that isis isn't a threat until it was, how it was just the jv team until it made varsity. they said president bush's orders went too far and president obama's didn't go far enough. her the concensus said america would tumble into a deep recession and even depression after 9/11 or that housing would never recover after the financial meltdown yet, somehow it did. remember how they got it wrong. how often they got it wrong. so many times over so many years. remember the nine in ten doctors who didn't much worry about smoking in the 1950's, until, well, facts changed. remember those who said health care for all was worth it, even if you had to pay through the nose to get it. remember those who said nothing about other presidents cabinet picks, but can't restrain themselves ripping this president-elect's cabinet picks. remember how barack obama m a team of rivals and donald trump had a team of moguls. remember their consistent

inconsistency and history is defined not by things that we think will happen, but by things that actually do happen. things that concensus doesn't see. things that concensus doesn't want to see. things that concensus will laugh at if you challenge what they think. you think? you see what following the concensus gets you? not much. so the next time the concensus crowd laughs because you don't think they're the center of the universe, remember when the same crowd laughed at a guy named copernicus because he challenged the sense of view, the earth was the center of the universe. through the ages, remember the so-called sages. remember when they said the world was flat and then i want you to ask yourself, how many times can you be flat-out wrong? connell: the great neil cavuto. how about that? we have reaction to it by the editor of the world almanac. the copernicus reference, that

other people were wrong about this year. you're going to focus on one thing, the idea that we didn't see brexit coming, didn't see trump coming. the idea of populism in the world if you're going to put it in the almanac the start of the year you'd be surprised. >> yeah, 2016 was a pretty unexpected year, unpredicted year, lots of ups and downs and i think really speaks to, you know, the concensus was, for a lot of things, and then of course, those things didn't end up being. connell: why this year more than others? the idea of the el thinking they know everything and aren't right about it? but there does seem to be a trend building here, of course. >> i know that lot of people say we need to look to the polls and how they're conducted because so many people are unreachable by polls and there also is a general sense that we need to look deeper into the polls. you start to talk about margin of error and people's eyes sort of glaze over.

you can't just look at the headline. you have to dig deeper into the data because a lot of the times the polls weren't quite as off as they may have seemed if you just looked at top line results. connell: it's true in certain areas. and it's true they were wrong in other areas and it's kind of amazing that we built ourselves up for so many years, whether it's in business or in sports or in politics, where we've become more and more data driven, right? i'm sure that's your business as well as you put together the al na-- almanac and how it's put together. and we have a president-elect who is driven by instinct rather than anything else. it's the type of thing to develop in the situation, maybe a backlash against that. we've gone the other way, maybe we've gone too far? >> almanacs look at information from a lot of places. we're checking into the source of the data. how it was collected, who was behind the collection of the data. connell: that's another issue, right? sources and where the news is. is it real news, fake news?

another big story this year. >> a huge story. a study that stanford did, 80% of teenagers can't tell whether a news story is sponsored content, as it in ad. connell: a lot of people ask me, how do you know if it's real or not? that's another big thing that we have to think about. >> the world almanac editors work and spend time on that. and that's something that may be looked at more in 2017. connell: good to meet you and thank you for coming in, and i'll have the whole almanac read by the end of the show. it's small print. russia, maybe this will be in there in the year 2017 if the tensions continue to escalate. another bigger threat rearing its head and that is next. cavuto coast to coast will be back. s. the market's hot. sync your platform on any device with thinkorswim. on at meritrade.

>> i'm nicole petallides, the dow is away from the 20,000 mark. a great year, the dow is up almost 14% and we're looking at the sectors the best performers that would include energy and financials. energy itself gained over 45% this year and financials 20%. telecom and industrials, up more than 15% each. the dow winners, 27 and the 30. and they have up arrows, up more than 30%, united health pulled out of obamacare after losing hundreds of millions of

dollars and caterpillar chevron the other winners on the dow. i met with tim cook, ceo of apple. he gave an optimistic and very optimistic for 2017. there are reports that apple is set to cut production in the january to march quarter by 10% watching app slightly lower tod today.

>> we spent the whole show here today talking about russia or a lot of it. forget about that for a moment.

our friend steve leeb is here, saying the big worry, surprise, surprise, should be china. isn't that right, headed into next year. the only bitter boomer. i don't know where gasparino, everybody is in. >> i'm studying china and wondering whether or not my kids are going to have a nice, free life in this country and i am concerned, connell. connell: we joke around a lot with you about china, but you're concerned about it. >> yes. connell: that country and the president-elect is, too, i think, but you're concerned about china specifically now because of why? >> lots of reasons. on the down side, if china implodes. let's say they have a coup. there was a-- there was some rumor that the previous president or the previous, previous president chang who was a powerful guy, who had been the titled core leader, totally corrupt, was

trying to get rid of chi. >> i don't think he's a threat. i think it's much more of a threat that someone takes over for him. i'm worried about that, but not that much. if something happens to china, economically, politically, it could be catastrophic for the world. connell: are we still rooting for china? i was there like six years ago in china and we did a lot of business stories at the time and the story line was we need china to succeed, it only helps us if they do. it seems it's changed in the last few years. >> it's changed, but should not have changed. china, as opposed to russia is inward looking. russia wants to conquer the world, they want to spread-- as many countries as they can. connell: china wants to do well itself. >> itself. that's part of their militarizing the south china seas and the other china seas, et cetera, they don't want

people interrupting them. they're not doing this to be offensive. they're doing this to protect themselves. china is for china. they're not interested in making other countries communistic or amerikrattic. connell: and the way that trump is approaching that, seems like china foe, russia friend. >> that's dangerous because china can be helpful to us. the advantagof china cpa to russia, if we invest in china, if we invest in their-- all of these infrastructure banks that they're setting up. they'll allow us to make money. they're happy if we make money, as long as it's good for them, too. connell: trump says they really have beaten us on the trade deals. >> if we let them beat us then shame on us. connell: have we? >> probably to some extent and we've bothen them, too. i'm sure it goes both ways, the beating. connell: that's not a big issue, you don't think?

>> it's an issue, but it's deminimus. china right now is going to basically establish infrastructure with over 60 countries, accounting for 4.4 billion people. now, that just overwelcomes everything else. and that's their one belt, one road, silk road kind of strategy. we have a chance to invest with them. they're not saying like, russia, you can't go here. come, happy to have you. do your due diligence. if you like the project, come aboard. connell: we've had that chance, right? obama's tried to be friendly with them and that hasn't worked that well. >> i'll tell you honestly, the first article i've seen on this, and this is the largest infrastructure project in history, 12 times what the marshall plan was, just for starters and that's just starters because it will be infrastructure on top of infrastructure. i've seen one article in a really credible urnal an that was foreign affairs about two months a.

connell: you're saying that we've got to get in there and get our piece of that? >> it doesn't mean we have to help them, but china is happy if we help ourselves as long as it boosts the economy of the east. china wants to be the center of the east. they don't want to be the center of the world. and that's what we have to recognize. connell: it will be interesting to see how president-elect-- >> i tell you this, peter navarro scares me. connell: he's coming in on trade and going to be tough on them in trade. >> he doesn't have experience in the nuts and bolts and they may easily take advantage of him. connell: and that's for our future bitter boomers. you and gasparino. >> china, china, come on. i miss it. connell: yeah, we need somebody to get you cranked up. >> thanks a lot. connell: the great steve leib on china today. stocks, it's been a great run since the election of donald trump. we've talked about it over and over and the financial sector up 16%, since the election. we're going to have more on financial stocks and what's next in just a moment. your insurance company

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>> so we move now from steven leib on china to amazon on robots and they're implementing robots and the use at a rapid, rapid pace. economists have been arguing that jobs and animation goes, this sounds counter intuitive hand in hand. let's bring in hillary vaughan on this, she has the details. >> hey, connell, economists we talked to said that artificial intelligence technology could create jobs of the future. they'll look different than the jobs of today, but they'll pay a lot more. >> so what the data actually says is that even though we're at about a 6% job loss today through automation, by 2021, we're going to have eliminated a net 1% more jobs.

so it's not a huge 6% loss between now and then, it's about a 1% change as jobs are lost due to automation and created in new industries through automation as well. >> over the past 70 years, america's work force experienced a huge amount of eig automation thank you it hasn't had the impact. >> people are confused, they think that automation, that a robot is going to completely replace me. what happens most the time with automation, it comes along and takes over some tasks i do, but not all of the tasks i do. >> today companies like uber, netflix are on the front lines of what they call digital disruption. they're matching supply and demand through digital platforms and making old ways obsolete. what are your options if your job is phasing out. retrain and reskill yourself for a job in an industry that economists say is growing

because of ai technology, which is the health care sector, or you can try something different, altogether. and they also say they're seeing an increase of people using skills that they already have to do something else, like driving an uber car, or becoming a dog walker, mobile apps have changed the game and opened up more job opportunities. connell: and that opens the game. and james sounded like a robot, but it was a person. running it altogether. back to the market. has the trump rally brought-- the dow is pace for the third consecutive down streak since the friday before the election. more in a moment.

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connell: want to give you some good news. happy new year everybody, end of 2016. that is obvious. next week we deal with congress back in session. that is not good news.

you will see it on this show at noon next week. president obama heads to capitol hill to discuss with lawmakers to discuss about obamacare. competing ignoring us, ralph is working on next week's show. everything is ready to go. could not be more prepared. happy new year, ralph. trish. here is trish. trish: ouch. connell: they did great with me. i'm joking around. trish: major embarassment for president obama, russia's vladmir putin refuses to engage. he is waiting for the trump administration to take off. i'm trish regan. welcome to welcome to "the intelligence report." that this may be meaningless and do nothing to address the real problems we have. is he extending his muscle and trying to, energize his democratic