today, certainly for the dow jones industrials. michael, thank you. we have the confetti once again. >> thank you. liz: dow 20,100, up 31 points. that's a record. not so for the s&p. nasdaq too close to call. hand it over to david and melissa. david: we'll take one record, dow headed above the historic 20,000 mark second day in a road, making a new record close. hi, everybody, i'm david asman. melissa: i'm melissa francis. this is "after the bell." we have you covered on all the big market movers but here is what else we have for you coming up this hour. a live look at the white house. sources just telling fox news that one much president trump's more controversial executive orders is being moved up to this afternoon. the president and his advisors are hammering out the final details in the oval office. plus uk prime minister theresa may currently speaking to republican lawmakers. earlier today president trump

spoke to the same crowd, vowing allegiance to gop priorities as lawmakers preparing to go to battle over a timeline for tax cuts. coming up, steve moore, economic advisor to donald trump, austan goolsbee, former advisor to president obama sound off. david: all right. we have the a-team. meanwhile back to the markets. the trump rally is marching on. new record close for the dow. phil nine, price futures fox business contributor and watching action in oil and gold and lori rothman on the floor from the new york stock exchange. forget about the nasdaq and s&p, another record on the dow. why? >> we sure did. all right, david. it was kind of touch-and-go here. for the second day, david thedown closes above the milestone 20,000 mark but off the best levels of the session. just up 31 points. that is good for a second consecutive record close. it was a broad based rally for the dow but we saw a lot of weakness. there is a lot of concern given the political atmosphere out

there and we're in the height of earnings season. intel's numbers coming out right now. we can give those to you for you here in a minute. let me run through the indices. s&p and nasdaq as you said did decline today, so they will not notch records. staff meeting on s&p across the unchanged line, if not 101, 102 times. didn't have a chance to update that. that came out a few minutes ago. another interesting phenomenon is the peso. a true barometer as to the relationship between mexico and united states. as you know there was a lot of news about the wall and mexican president canceling his visit with president trump. saw the peso decline 1.1% versus the dollar today. very key to know since the outcome of election the peso has been down 14%. go ahead and give you those numbers for intel. looks like it was a revenue beat. all i have for you right now. give you more details if you like them later this hour. back to you. melissa: lori, thank you so much. president trump brand dons the

trans-pacific partnership. many tech companies are very core worried about the impact. as we look to this, fox economic advisor steve moore, lindsey bell and recon capital chief investment officer kevin kelly. kevin as we look at these earnings on intel, this is a big one that is going to be impacted by everything political going on right now, right? >> yeah, i think it should be. investor will focus on top line ref you knew number we just reported. they have missed the revenue guidance. they have only made it once out of the last six years. so this is very important especially on the data center group which is the most profitable side of the business and they're trying to grow. we'll see how they do on the mobile side but that will be impacted certainly bit budgeting this is coming through on large multinational corporations given a lot of geopolitical risk they don't know how to invest.

that will impact the data center group whether companies shell out money or hold on to cash given what the current administration is doing. melissa: without question, steve moore, i would imagine as they go to the conference call here one of the big questions will be about that withdrawal from tpp. that is something that would definitely impact the future of this company. >> you've got these counterveiling forces right now, melissa, where you have some of the positive things on the economy that some of the dough regulation, hopefully this coming tax cut, pro-business environment taking over in washington but some of these trade restraints are negative for growth, no question about it. the technology sector which is so globalized which is the big loser here. it is now a question of a balancing act. are pro-growth elements of his agenda can outweigh some of the negative things like these attraction on trade. melissa: absolutely. lindsey, what is your take on that? >> well, one thing i would point out when you look at intel, it is a company that underperformed the tech sector and run up into the earnings release. so expectations are high right here and it will come down to

the data center for sure. what a lot of people are talking about how the pc business was better than expected in the quarter and could save the company. melissa: yeah, kevin, do you agree with that? >> yeah. it is going to be hard to see on the pc side. i mean they have easy comps to beat. everybody is expecting it to flat line. even analysts talking about microsoft but everybody is so focused on the mobile side they need to start to deliver especially with the new partnerships including apple. melissa: yeah. steve moore, you know some count very veiling pressures that you mentioned on this company in washington what one thing would go in their favor? >> just a general change in attitude i think, melissa. melissa: right. >> let's face it, obama bam who was not particularly pro-business -- melissa: great point. >> trump says he is. so far he is. if the economy grows in the united states i think it will grow all over the world.

obviously that expands markets for companies like intel and other technology companies. melissa: okay. thanks, guys. david: all right. we also had big news south of the border. we had a tweet war going on between president of the united states and the president of mexico. president trump saying that we had a bad trade balance with mexico and therefore we needed to change nafta. president nieto not too happy with that and in the end donald trump deciding not to meet with the mexican president. the mexican president deciding not to come here. it is unclear exactly who is involved there, but steve moore, does this bother you, the fact we have this kind of verbal war going on that may spill over into our trade relationship with mexico? we should mention donald trump is right when he says we've got a 60 billion-dollar trade imbalance. that still means we're importing about 260 billion and we're exporting about 220 billion. if you look at the overall numbers, it is not that far off.

it is close to abalance, is it not? >> no question about it and you know, you asked the question am i worried about it. i am worried about it, we always talk david what is happening in europe and what's happening in the far east and the middle east. you know one of our most important economic and security issues is mexico. melissa: okay. we have to jump in on you steve, so sorry. alphabet, parent company of google, reporting fourth quarter results. adam. >> give you this real quick. seems a miss on earnings per share. street was expecting $9.64. revenue before you extract traffic acquition cost. that is a beat. street was expecting 25.62 billion. traffic acquisition costs were 4.85 billion. that is driving traffic and they pay advertisers. in the fourth quarter paid clicks versus same quarter previous year up 36%. also the cost per click versus same quarter previous year was

down 15%. back to you. david: let's go back to our panel and ask about this, particularly with google, lindsey, but i'm wondering how this new president's relationship with silicon valley is going to progress? it started out very chilly. obviously during the campaign very few of those people, maybe peter thiel is one of only exceptions was in favor of donald trump but it seems to be changing. they seem to be warming up or am i just imagining that? >> no, i do think they seem to be warming up, and it is going to be important because if you think about it, tech, they are the sector with the largest amount of sales in the s&p 500 coming from overseas. so what he does with trade is going to impact him very significantly. so, i think it's going to be important for the two groups to get along. and, it is going to be interesting for sure to see how this plays out. david: kevin, i think eventually once these companies realize exactly how many incentives are

being offered by this new president, it is going to be what's not to like about this guy, right? >> yeah. i mean they all came in and descended to trump tower a few month ago and had the kumbayah moment and sat around the table especially with his secretary picks. ever since that happened the tech market led the s&p 500 up, and you saw the banks be relatively flat for the year. that's because the tech side is growing. it is the largest sector in the s&p 500. david: yeah. >> so you need to see them actually continue growing to support the valuationhat -- david: forgive m steve moore, it is so growing here. we have microsoft earnings coming out any moment. microsoft has 64,000 employees right here in the united states. that is by far the most they have anywhere in the world. so it is a business growing in the united states. that's what donald trump likes to hear, right? >> getting back to your last question, we got a little bit cut off, when you talk about the trade between mexico and the united states a lot of stuff we're importing from mexico are

inputs to the things that we produce and sell abroad. that makes american products cheaper. the integration of mexico-american economy on balance has been really good for mexico and positive for the u.s. as well. david: i just mentioned microsoft. they just came out with their second quarter results. adam shapiro standing by in the newsroom. what is the latest? >> it's a miss. i go with the revenue number first. came in at 24.1 billion in the second quarter. the street was expecting 25.3 billion. earnings per share adjusted 78 cents. street was expecting 79 cents, david. david: down after hours but not too bad. lindsey they have had a great run-up so far this year. >> they have had a great run-up but they have underperformed the s&p 500 tech sector just like intel has so far this year but i think, we'll want to dig into what the cloud business did in this quarter for microsoft. david: right. >> these reports are very surprising because tech has been leading the beats within the

s&p 500 in fourth quarter earnings season period. seems like the table is starting to turn with some of these bigger names coming out and -- david: adam will be looking into the details of these numbers, lindsey is absolutely right. amazon of course has this web service that is competing with microsoft's web and still not clear who is going to win that battle. >> yeah, they're actually number two in the cloud space behind amazon. they're doing exceptionally well and it is growing. they're fighting off google coincidentally enough in the cloucouting space. amazon has a different model. what needs to be focused on the subscription of office 365 model. we know subscriptions are starting to have bettercoms because not a one-off sale anymore, it is recurring revenue model which bodes very well. you see confidence from the marketplace in satya nadella and new business plan and model. it has healthy dividend

investors like 2.4%. melissa: steve, speaking of satya nadella, he is one of the one that said with regard to president trump and pressure putting on companies to create jobs in the u.s., he said himself he is not nervous. he creates high-paying jobs in the u.s. do you buy that? >> i do. i think the technology industries are major, major job procedures in the united states. they produce a lot of things overseas and so much comes back in products that we produce. the other thing to keep in mind be the capital gains and dividend tax reduction, corporate tax rate reduction, they're going to have to increase the values of shares of the stocks of these companies. they will benefit tremendously from the business and capital-gains tax cut. melissa: yeah, that's true, lindsey, what do you think of that? >> no, i completely agree with that. it's definitely having trump, a pro-business guy in office, is going to benefit these tech companies tremendously and corporate america in general. you're already starting to see it. look at the stock market where

we started whole entire segment. dow it hitting a new high today. melissa: great point. david: one thing everybody needed and election in the campaign is coffee. starbucks must be making a mint. go to lori rothman she had the quarterly numbers. >> no. david: they didn't make a lot of numbers in the coffee? come on. >> nobody would sneeze at $5.7 billion quarter for starbucks but it wasn't enough to impress the wall street guys. share off 1 1/2% in the extended session. here is the problem, you raise the bar too high, barista bar and don't meet it. same-store sales huge disappointment in the u.s., 3%. a little while ago starbucks promised 5%. this is our goal, 5% same-store sales growth. didn't happen. globally the same-store sales number was 3%. expectation for global sales 3.7%. didn't give you earnings number. it was 51 cents or 52 cents a share which was just about in line. ref you knew was soft.

that is the problem. another look at shares they're falling a little bit more now, up 1.6%. melissa: steve, maybe starbucks is pouring too much politics with its coffee. howard schultz somebody weighing in all during the campaign. he was even on the list that people hillary clinton was considering as a vp. they also have the green cup design going right now to represent the connections that we have during a very divisive time in the country. people just want coffee and sick of politics that he is serving up? >> well you know the other thing, look, donald trump is a guy who keeps score, right? you say something negative about him, on tv or in the newspaper or whatever, he remembers those things. and so, you know, the ceo of that company, starbucks, may have to pull some of this back if he wants to be in donald trump's good graces. >> maybe. kevin, look at dunkin' doughnut they steer clear of politics. they're not trying to influence

you and start a discussion. remember when starbucks they had their barristas, asking them to promote dialogue about politics and other things rather than just sitting there doing a faster job, getting you out the door with your caffeine? >> seems like starbucks is no longer a safe space for liberal politics but important to note that it's important to note this is actually howard schultz's last quarter at the helm of this company. so you're actually going to see management transition. one of the reasons why it is selling off in the after-hours because they have lofty valuations right now. they're not able to grow into that. so investors are punishing it and also howard schultz has been trying to transition the growth over in china. he talked about it time and time again. we're seeing actually now with american politics and chinese politics going head-to-head, that is not a good place for growth. melissa: are you go. adam has details on microsoft. >> earnings press release finally has come out.

the gaap revenue was 24.1. non-gaap adjusted a little over 26 billion which would be a beat. revenue number, earnings per share number came in at 83 cents adjusted which a beat over the 79 the street was expecting. back to you. melissa: okay. those are good numbers. go ahead, david. david: we're going back to talk about google or alphabet a little. still can't get used to calling it that. steve moore, there was a time you would google certain things and definitely drew you in towards a leftist perspective. my perspective now that that has changed. they have absorbed that critique and tried to change their algorithms so it is more neutral. what do you think? >> i think so but the jury is still out on that. google is not just a technology company anymore, a search engine. google producing one of the first automated cars for instance. david: that's right. >> amazing technology companies

are proliferating into all sorts of other areas outside of their comfort zone. david: steve, lindsey, kevin, we covered the waterfront. good work. appreciate it. protesters all over the nation, they're focused on sanctuary cities. billions of dollars are on the line as major cities are preparing to defy an executive order from the president. melissa: plus president trump's plan to keep america safe, blasting isis terrorists as quote, sneaky rats. lt. general thomas mcinerney breaks down the president's strategy. david: a preview of an historic meeting at the white house tomorrow. what will be the uk prime minister's message to the new president?

david: big day in the city of

brotherly love. british prime minister theresa may wrapping up her speech at the gop retreat. after president trump took the stage to address republican lawmakers on his agenda and thank the people of pennsylvania voting for him. peter barnes is live in philadelphia with the very latest. hi, peter. reporter: hey, david, that's right. donald trump coming to speak to republican members of congress at the retreat here. after this morning's back and forth, tit-for-tat between the trump administration and the president of mexico, and in which they canceled plans to, the two presidents canceled plans to meet in washington next tuesday because of the dispute over the wall and how to pay for it. president, president trump saying once again that mexico will pay for it. in fact his press secretary sean spicer telling reporters on air force one when they came back from philadelphia, that president trump plans to propose a 20% tax on imports from mexico

to pay for the wall. but here is what the president said about this dispute when he spoke to republicans earlier. listen. >> the president of mexico and myself have agreed to cancel our planned meeting schedud for next week. unless mexico is going it treat the united states fairly, with respect, such a meeting would be fruitless and i want to go a different route. reporter: well, the relationship with the united states, between the united states and mexico might be deteriorating in this dispute. the relationship between the united states and great britain looks for a reset here. theresa may telling members of congress in her speech before she heads down to washington tomorrow, she is hitting on themes of national security, enter national security but very much wants a new bilateral trade

agreement with the trump administration particularly as britain exits the eu. david: thatcher reagan, may, trump. there is precedent. melissa: economic advisor steve moore, former obama economic advisor austan goolsbee will break down the details of this plan. plus president trump is about to sign another second i have it order coming up. we'll bring you a live update from the white house.

melissa: president trump laying out his agenda in front of gop leaders including a tax reform bill. >> we're working on a tax reform bill that will reduce our trade deficits, increase american exports and will generate revenue from mexico that will pay for the wall if we decide to go that route.

it is time that the american people had a president fighting as hard for its citizens as other countries do for theirs. melissa: all right, two economic masterminds joining me now. steve moore is back. we have austan goolsbee with us as well, former obama economic advisor. thanks to both of you for being here. steve, let me start with you. that quote we heard from donald trump doesn't sound like the news we he heard at the end of the last hour about this possible import tariff. how do you reconcile those things? >> well i didn't hear the whole speech so i don't know the context of what he was saying there, but that quote, sounded like he is going to get tough with mexico, no question about it, and you know, i inferred from that that there was going to be some kind of a import tax or something to that effect. there is a lot of talk about something like that in the works in the white house. that was not part of the original tax plan that i worked on, melissa. melissa: yeah.

>> there is new whispering that something like that might find its way into the tax plan. something i would not favor. i don't think an import tariff is a good idea. melissa: austan the idea of an import tariff flies in the face of what we heard reince preen bus say on "hannity." let me play that for you. we'll talk about on the other side. >> if we're an administration that cuts regulation, that lowers business taxes so that keys companies can expand, that we disincentivize from companies moving overseas into mexico and china and doing business in america better for them, well then the jobs are going to explode. we'll have maybe, three, five, six, 7% growth if these things happen. melissa: austan, what do you think? >> well, i heard the word explosion and i see there are a lot of things on fire. that is all about i agree with in these statements. look, the actions you saw of donald trump today where he is

going to get in a kind of a tit-for-tat yelling contest with mexico. melissa: that is not a tit-for-tat yelling context. what he is saying potentially there will be import tariff for a border wall. that is policy. >> well, when you say policy, this started when they had organized, they were going to have meeting of heads of state. then donald trump said he is going to build a wall and make mexico pay for it. melissa: he has been saying that more than a year. so the meet wag set. >> then mexico said we're not going to pay for the wall. to which donald trump -- melissa: which they have been saying for a year. >> if you will not pay for the wall you shouldn't come. he said i'm not coming. donald trump sent out the press secretary saying we'll put a 20% tariff on mexico. that is it not well-thought out policy. melissa: you think he made up the 20% tariff after the meeting was canceled you think he made that up after the meeting was canceled. austan, come on.

>> in anger. melissa: oh, austan. >> that is what he did, please stop interrupting and just answer why you think that we had steve moore and reince priebus and donald trump himself in just the days preceding this not talking about a tariff. we only -- melissa: it has been on the table from the beginning. it has been one of the things that has been discussed all along. i mean before the meeting was even canceled. >> border adjustment tax is not a tariff. you know it is not a tariff. melissa: this has been on the terrible, it has never been a good idea but it has been on the table from the beginning. steve moore, this has always been one of the options, i'm interested in the four, five, six,% growth. we get that growi? >> good luck. >> you don't get growth growing by imposing tariffs. i think that is something austan and i would probably agree on. i like what reince said actually last night. this is what i have been saying for six months. if you get the taxes down, austan, get the regulations off,

if youake america pro-growth place to be, then you don't need tariffs. those jobs will come back. that is what americans want. they want jobs in michigan, ohio, pennsylvania. pardon me? i think he want to do these things though. but he also has this kind of obsession with two country, mexico and china, as if somehow they're deterring growth in the american economy. i don't believe that to be true. maybe in some ways with china but i don't think mexico is adversarial country to the united states. melissa: no. but he talked all along how he has to build the border wall. and he talked all along how he will make mexico pay for it. >> right. melissa: there are bookkeeping ways to do it, show revenue coming in, earmark it for the wall. mexico paid for this because it was aid we held back or border crossing tax. you don't have to do it by putting 20% tax on products, austan you agree, ends up with

people buying the products paying it? some mix of seller has to lower the price of products to compete but buyer will end up paying more. that is not really mexico paying for it either with tariff. >> -- would go up and for sure much of the manufacturing export from mexico to the u.s. are actually parts used to make the manufactured goods in the united states. so if he goes to meet with ceos that he met with this past week, again next week, the first thing they will say, please don't put a 20% tariff. melissa: i don't think he is going to either. this is one of those negotiating things. >> there is a solution here though. i think it is something that the three of us might agree if i heard you all correctly. i think the way to deal with it border adjustment tax, stop taxing what we produce here in america and starts taxing what we import. that is what mexico does to us. germany,. melissa, italy, spain, china. why not have a tax changes way we tax.

it doesn't violate trade agreements. melissa: i don't like tax -- we won't agree any tax of any type is ever a good idea. i love you both. thank you. david: we have enough taxes. we don't na w one, thank guys. microsoft is beating earnings on both the top and bottom lines for the second quarter. the positive report driven in part by significant growth in xbox live active monthly users, wow, as well as gains in the cloud services. meanwhile alphabet, of course that is the parent company of google, "missing" street expectations on earnings per share. as you can see after-hours it is down just about 20 bucks. by the way, you were right,donald trump has been talking about tariff for a year. it is gop talking about the new border adjustment tax. melissa: all taxes are bad idea. david: i hate taxes. who likes taxes? melissa: nobody. socialists. all right, president trump, now you know how we feel, making bold statements about the fight

against terror and his plan to take down the enemy. david: plus democratic lawmakers pushing to take away a very important power from the president. lt. general mcnerney is here. he will tell us what that is and why lawmakers are making a big mistake. no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. you may know what it's like to deal with high... and low blood sugar. januvia (sitagliptin) is a once-daily pill that, along with diet and exercise, helps lower blood sugar. januvia works when your blood sugar is high and works less when your blood sugar is low, because it works by enhancing your body's own ability to lower blood sugar. plus januvia, by itself,s no kely to cause weight gain or low blood sugar (hypoglycemia). januvia should not be used in patients with type 1 diabetes

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melissa: rewriting american policy, president trump expected to sign an executive order on

extreme vetting an refugees any minute now. blake burman standing by at the white house with details, break? reporter: what you see behind me media members waiting to go into the oval office to take pictures and video of the president signing that executive order. we were first led to believe this morning that the executive order that the president would sign today, dealing with voter registration. however that took a bit of a pivot, took a bit after turn mid-afternoon. we're led to believe it will be, as you mentioned, dealing with extreme vetting. this was a campaign promise from the president. he told abc last night in a preview it is not his initial muslim ban. >> it is not muslim ban but it is countries that have tremendous tremendous terror but countries that people come in and cause us proems. reporter: you see frenetic pa and feel of everything around here. told one thing mo morning.

told something else this afternoon. they are trying to get things out. the press secretary before they took office, the sequencing they are working through. appears they still are. melissa: not to mention the crowd behind you. so much more activity in the white house, every time we look at your shot, people running in and out, back and forth, trying to clarify. blake, thank you. david: trying to keep up with the guy, trump. >> more for our tax dollars what we're getting. david: here to talk about this with general thomas mcinerney. fox news military analyst. general, great to see you. general, it is clear donald trump is following through what he said he would do during the campaign. more scrutiny from refugees arriving in the middle east, where isis is known to exist. where isis has been known to infiltrate refugees in the past. what is wrong with greater statute any? >> -- scrutiny. nothing, david, he is spot on. first commander-in-chief eight years, go back to some.

problems in the bush administration clearly identifying the threat, what it is. it is radical islam. and so you have to associate all those attributes that radical islam has to what the threat is and correlate, and you come up with what you have got to do. that is why he got this ban. david: we knew there would be pushback from the people that supported president obama's position where he didn't mention radical islam, in fact today, we have the lead editorial in the "new york times." here it is, i think islam hates us. they're talking about how because of what's happening, because of this extra scrutiny on refugees, because we'll keep gitmo open, because we may even use waterboarding that in fact they will hate us even more than they already did. i don't think donald trump is going to be moved by these messes, do you? >> not after 15 years, david we finally figured out we're not the problem, they're the problem. they're attacking us.

he is identifying it. he is marshaling not only the united states but our european and our asian allies to how we defeat this. the muslim nations themselves have not been responsible for destroying radical islam. they created it from saudi arabia. now they have got to defeat it. we can help them but they have got to defeat it. david: reinforcing gitmo, not closing down it, reinforcing gitmo, turning less into kind of a camp than into more into kind of a joe arpaio sort of prison. frankly i don't think that is is a bad idea, particulary how hardened terror suspects are. >> look, gitmo is club med and obama let 200 of them, almost 200 out and probably 60 to 100 of them are going to return to the battlefield and kill americans. david, that didn't pass the smell test. david: by the way, extreme vetting, that proposal has been

delayed until tomorrow. we'll talk about that tomorrow when it happens. but i have to do one last thing, with you general, which is, that some democratic lawmakers want to take away from the president a power that every president has had since harry truman, which is first strike using nuclear weapons. now, god forbid we ever had to do it. did it once under truman. haven't had to do it since. now lawmakers want to take the power away from the president. what do you think about that? >> they're insane. why do you want to decrease the credibility of our nuclear deterrent, first strike we publicly said we would not do but there may be a situation minutes before that you go ahead and do it, but, take no options off the table for our nuclear deterrent forces. it is given us peace since the end of world war ii. it has been hugely successful. why would anyone want to change that, david? david: lt. general thomas mcinerney. good to see you, general, thank you very much. appreciate it. >> thank you, david.

david: melissa. melissa: not backing down, protests erupting across the nation as sanctuary cities vow to fight back against president trump's immigration policies. we'll take you live to one of those cities next. now on the next page you'll see a breakdown of costs. what? it's just... we were going to ask about it but we weren't sure when. so thanks. being upfront is how edward jones makes sense of investing. you know how painful heartburn can be. for fast-acting, long-lasting relief, try doctor recommended gaviscon. it quickly neutralizes stomach acid and helps keep acid down for hours. relieve heartburn with fast- acting, long-lasting gaviscon. and helps keep acid down for hours. just like the people every business is different. but every one of those businesses will need legal help as they age and grow. whether it be with customer contracts, agreements to lease a space or protecting your work.

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melissa: defying the president. chicago mayor rahm emanuel and new york city mayor bill de blasio refusing president trump's orders to stop harboring illegal immigrants. jeff flock in chicago with the details. jeff. reporter: all the mayors we have heard from are in fact doing the same, all defying the president who today in pennsylvania once again one day after his executive order, threatening the federal funds in those cities hit again. sanctuary cities, take a listen. >> congress passed these laws to serve our citizens. about time those laws were properly enforced. they're not enforced.

[applause] reporter: the question is though, melissa, do the statutes, do the situations in the sanctuary cities, in fact, do they violate federal law? the president is referring to article 8 of the u.s. code which says, in fact, that if local authorities learn about someone who is here illegally they must share that information with the federal government. they are not required to find that out, to ask those questions or determine whether somebody is legal or not. look at the code in chicago, for example. one of the sanctuary cities. no agent or agency shall request information about the citizenship or immigration status of any person unless required by illinois state statute, federal regulation or court decision. the same is true in los angeles. it is the policy of the l.a. police department undocumented alien status itself is not a matter for police action. technically, that does not violate federal law. and, the local police in these sanctuary cities say the police trust with the members of the

community that they police, whether or not they're legal, that needs to be maintained, and implementing policies like this will harm that. listen to the san francisco mayor. >> i'm here to say that again, i believe in our sanctuary city status. i think there are hundreds of mayors all over this country that are saying the same thing, and we stand united that a safer city is a city that doesn't allow its residents to live in fear. reporter: question of course, also what authority does the president have, melissa, it withhold these funds. courts are mixed on this when president obama tried to say, i'm going to take your medicare funds to the states that wouldn't expand medicare, supreme court came in and said you can not hold a gun to these states, to the heads of these states. we'll see if the trump has a bigger gun or what. melissa: i like cities said you don't need the money. ke leave the federal fund's way. perfect. we'll save the money.

david: wasn't kate steinle from san francisco? she was killed with a gun, don't forget that. breaking news on starbucks way down after hours. stock down more than 3% after it missed on revenue. retailer reported record quality and holiday results. coo, rapid expansion of mobile ordering and play is causing challenges. you have to pay the bills. melissa: there you go. mr. trump preparing to sit down with uk prime minister. how the two new leaders are preparing to tackle the trade agenda between these two long-time allies.

david: the day before the historic moating, uk prime

minister teresa may may be on board with president trump's trade deal. >> i'm delighted that the new administration made a trade agreement with our countries one of its earliest priorities. a trade deal between britain and america must work for both sides and serve both of our national interests. it must help to grow our respective economies and to provide high-skilled, high-paid jobs of future for working people across the america and across the uk. and it must work for those who have too often felt left behind by the forces of globalization is. david: react now, financial times u.s. managing editor. gillian, thanks for coming in. i want to talk generally about the special relationship between britain and united states, particularly when there is a female prime minister, you can't help but to harken back to thatcher and reagan. i know may is not thatcher and trump is not reagan but are we in for that kind of a relationship?

>> well, on one level, theresa may is very keen to promote the idea that the u.s. and the uk do have a special relationship, and she said very specifically they must work together to lead on the world stage and to avoid, what she calls the eclipse of the west. that is music to donald trump's ears. but on another level it is very different. she has said quite specifically today she does not want to copy the tony blair doctrine of intervening in other countries. she wants donald trump and theresa may to work together to avoid the eclipse of the west but without intervening elsewhere. make our own economies strong. david: she must appreciate the fact that trump's instincts, at least on "brexit" were picture-perfect. he was there on the day that the "brexit" was voted into power and so many of the pollsters as you well know and so many of the so-called experts said the british people weren't going to vote for it. they did. trump was there. even upstaged president obama in

terms of trump talking about it before obama could. >> absolutely. the reality is, trump and may are radically different people. i mean, theresa may looks look like your most scary head mistress. trump, what can i say about that, okay? she herself said, that classic message of any dating website, opposites can attract. although they actually think very differently, they both are involved in political disruption. that is what they're both trying to do. david: final word, gillian, one thing i think they say in common a hatred for bureaucrats, and globalism. this globalism thing that both the british people and american people are trying to get out of is being controlled by bureaucrats. >> absolutely. it is all about trying to take back control, use a slogan the "brexit" team used frankly would appeal to a lot of people supported donald trump. david: right. >> trying to get back to first principles. if you share adam smith vision

of the economy and that is what they're trying to build on. david: always a pleasure to have you on. >> thank you. great to be on. melissa: the trump slum that never happened. you how political emotion got in the way after nobel winning economist and his forecast. david: who could that be? melissa: i don't know. ♪

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david: no sooner did president trump say he will open up the keystone pipeline, transcanada applied for a presidential permit to begin work on the project. melissa: standing corrected again. markets close at a new record

high. remember palm krugman's prediction? david: . this was after he received his nobel peace prize for economics. i don't think it would have affected him getting in the first place. melissa: he said that was his specialty. >> we are going to build the wall. believe me, we are going to build a wall. >> we have a trade deficit with mexico. they are going to pay for the wall within they will be happy about it. liz: a spat escalated into a battle royale, one that could end in a trade war. the president.