>> so the president can thank, basically the ongoing economy, instead of what's not getting done by all of of those republicans in washington these days. >> thank you to lindsey and andrew and harlan this morning. what a pleasure. "varney & company" starts right now with charles payne. >> i'm charles payne in for stuart. you've got a lot of stories, including north korea launching the first intercontinental ballistic missile. nearly a 4,000 mile range capable of hitting most of alaska. the back drop of president trump on the way to overseas, and then to poland and the g20 meeting, tensions between russia and china higher after the missile launch and the president will meet with vladimir putin on friday. meanwhile at home, our markets are looking to open, on monday creeping back at the close. we will have a huge session

today, a potentially all-time high. and illinois, one round yet and the debate. we'll take you to chicago, vrn varn starts right now. ♪ "varney & company" starts right now. right to the big story of the day, north korea's missile launch, ashley webster with the latest. ashley: here we go. the launch itself went for 578 miles. this is the icbm, whole new era of missile testing in north korea and concerning, of course. it went for 37 minutes, north korea claimed 39 minutes. the point is what conceivably could the end-game be here? if they continue to develop this missile at their current rate, it's a few years off yet, but it could indeed reach, as

you just said at the top of the show, charles, most of alaska, 461 miles to be exact. as we look at north korea as an improverished third world country, this is a game change ethey've got to find a way to put a small nuclear head on this thing before it can be a threat. north korea holding what they called deep striker missile testing into the south korean seas as a message to north korea that we are hear and ready to act. the u.n. security council will meet this afternoon to talk about this, where we can expect another strongly worded statement. we know what that does to north korea, absolutely nothing. donald trump by the way, tweeting on north korea and china, saying that trade between north korea and china grew almost 40% in the quarter, so much for china working with us. we had to give it a try. china not coming through.

>> they curbed coal imports, but the rest of the trade was phenomenal. and economic sanctions maybe not going to work this time. let's look at the futures. so far, there's been a muted reaction to north korea, in fact, you can see nasdaq, which was down all morning long, now starting to come back. remember, it's been under a lot of pressure. so let's take a quick look at microsoft, one of the big names in tech. premarket reports that the company is planning to announce a thousand layoffs and will switch the focus to cloud which has gotten back in recent years. crude oil under pressure the last couple of months, $2.23 the national average for regular. by the way, a 12-year low. you've got six states with gas now under $2 a gallon. in arkansas it's right on the edge. president trump tweeted gas prices lowest in over ten years, i would like to see them

go even lower. good news for the summer driving season, right. liz: oil is in a bear market. and despite opec saying we are going to cut oil production, the u.s. oil boom continues. 10 million barrels a day. ashley: the frackers say thank you very much. they've tipped to make opec almost obsolete. >> the fracke frackers don't ma frackers obsolete. there's a sweet spot, somewhere in the high 40's maybe. all right, guys, from geopoliticals to playing politics. the republicans divided on health care reform and want to bring in larry o'connor, on-line editor for weekly standard and a radio host. how worried are you about the mid term elections if they don't get something done, larry? >> i don't care about the mid term elections because the republicans have been elected

in 2010, 2012, 2014, 2016 on the promise they'll repeal obamacare. they should worry about if they don't go through on their promises, they weren't elected to be erected. other than mitt romney, i can't think of any republican who promised to repeal obamacare, other than mitt romney, they've got to repeal these things. >> the promise was repeal and replace. i think they ran astray a couple of years ago when they talked about replacing and it was a one-two punch. it feels like repeal is picking up steam here, certainly among conservatives like mike lee. do you think that's the shift? >> i hope it is. rand paul gets credit and trump suggests it's not a package, repeal and then work in the replacement. you mentioned mike lee and ted cruz, co-sponsored a bill i know you're going to like and

everyone on the panel likes free markets, brings free market back to the health insurance industry, screwed up by obamacare and the democrats and that's why the premiums went so high. and the important aspect of the cruz lee bill, the amendment they put forth. if they want affordable health insurance for people who truly can't afford it, most americans would like to help people who truly can't afford it, then don't tinker with the free market to meet that end, do what politicians have done since the '60s. if you want to provide a benefit for people, put your name and your reputation on the line and raise taxes. raise taxes to do it and then you're accountable for it instead of screwing with the free market and making all of us pay for it through a hidden tax in our insurance premiums. >> another issue and i like people that hammer away on the senate bill that pays the

health insurance $50 billion and when that runs out-- >> just another subsidy, always great to talk to you. >> a guantanamo detainee is going to get more than $7 million from canada. gregg, you were an attorney, this is mind-boggling, apparently the canadian officials shared information with u.s. officials and violated the rights for someone who may have killed earn m soldiers. >> well, he's a terrorist, first of all. he murdered a u.s. military official who had two little girls, two children, and here is the guy. he's a terrorist, al qaeda. he was caught on the battlefield in a fire fight. so he gets sent to gitmo and you know, canada sends intel agents down to interrogate him and share with the u.s. as they should, this guy eventually gets released. he goes back to canada, where he's supposed to be imprisoned. they let him out. he susan now he gets roughly

$10 million. >> $10 million canadian dollars, almost 8 million u.s. dollars. he gets an apology from the canadian government. talk about insult to injury. >> this is the kumbayah canada liberal government at work, you know, conservatives up there, and other people are up there and are outraged. paying this kind of money to a terrorist? because his feelings were hurt and he may have been mistreated at gitmo? it's awful. >> it really, really is awful. next one for you, gregg. susan rice has agreed to testify before the house intelligence panel this month. on monday we asked former house intelligence committee chairman pete hoekstra about it, roll tape. >> i wish when the intelligence committee said that she was going to come and testify, they would have laid it out to her, number one, you're going to come, come either voluntarily or we will subpoena you, there

will be a public portion of this and there will be a classified portion. >> all right, so, do you think rice will ever hit the public will ever get a chance to hear what goes on in had the hearing. >> probably not in public, but private she'll answer questions, she's in legal jeopardy. publicly she said i don't know anything about surveillance, unmarching and internal collection. turns out she wasn't telling the truth. the national security investigated and on dozens of cases she requested unmasking of dozens trump officials not related to national security, but purely politics so there's three potential felonies here that apply to her. the crime to lie in your unmasking request, claiming it's national security, when in fact, it's politics. it's a crime to use your government office for political purposes and finally, if she is the one who leaked michael

flynn's name, it's a felony to unmask somebody and leak that unmasking. >> how will we know? if one-- >> congress comes up. >> congress will know and so far, the hearings, let's be quite honest, nothing seems to materialize out of them at all. how much faith should we have that behind closed doors, the revelation will be made and the public will understand what's going on? >> i think the intelligence committee run by devon nunez is taking this serious and they'll make a recommendation to the department of justice if they feel that susan rice is behind the leaking and unmasking of names. >> if it wasn't for nunez, and thanks a lot. >> that's right. >> we're about to show you video from the blue waeter resort in arizona, a fireworks the malfunction.

a huge brush fire, took crews one and a half hours to get this under control. no injuries luckily were reported, but that's a spectacle there. a new round of follows, 61ers p-of voters don't trust president trump, wait until you hear don't trust the media. that's next.

>> quick check of the futures. dow, s&p and nasdaq all looking higher. particularly keep an eye on nascar. gave away a lot, stumbled into the close on monday. if that can reverse and all three are up at the same time we could be off to the races. cnn accused of threatening to reveal a private citizen's identity over the trump wrestling video. ashley: it appeared on reddit. cnn saying look, we are going to withhold the man's identity, isn't that nice of them, because he's a private citizen who issued an extensive

statement of apology. however, it goes on to say that cnn reserves the right to publish his identity should any of that change. charles: what? >> the claim for the man who put out the satirical. liz: this is the coercion news network now? you can't hold somebody's future behavior over their head and threaten them. that sounds like-- >> you can if it's. c. in n. liz: it sounds like criminal vacation, but i thought i read the law on that. charles: tracking down the person in the first place. ashley: and hold it over his head. liz: what about killing free speech. charles: we've had a lot of big news the last 24 hours. >> this is a guy who has gone on anti-semitic rants and done it before many times. why are they protecting his identity. the job is to tell the truth, including the truth behind that. charles: they keep making mistake after mistake, thanks, guys.

let's stay on president trump and bring in brent bozell, rather, from the media research center. you know, we've seen a string of high profile corrections, retractions from the mainstream media, bret. and i mean, obviously, this has got to be good for president trump and his assertion that this is-- the fake news has run amok? >> yeah, charles, good morning. this is a press that is out of control. this is a press that has declared war on donald trump. this is a press that's let go of journalistic standards so that anything they can find to go after trump, they're going to use. for example, the russia story, donald trump has said there is no definitive evidence that russia tampered with it. well, ap and the new york times found someone to say, wait a minute, all 17 agencies say there is. turns out there are only in our.

>> cnn comes out with a story, after donald trump says my campaign isn't involved. cnn finds someone to say, someone met with a russian state bank. they had to retract. i don't think it's about this person. i think it's about donald trump again. this is cnn that's been so embarrassed, it has overreacted so badly to that silly smackdown video, which i wish the president hadn't done, but they've overreacted so much by suggesting that it's fostering violence against the media, that they're trying to find the upper hand on this. this is what they're doing, they're trying to get a hold of it and take the upper hand in this discussion. but once again, they're looking like idiots. like absolute idiots. charles: we've got another one for you. 68% of americans say they do not trust the media. what's your reaction other than maybe that is a low number?

>> i hate to say it. >> you know, a couple of observations, that was taken by npr. what in the hell is npr doing using taxpayer money to take a poll? we have one every five minutes and 68% answered media. ab donald trump's numbers at 61%. donald trump may like the fact that the media are even more unpopular than he is. i've got to tell you, i think the democrats are looking at that poll and they're happy with it, because they could care less ultimately about the media. they care about donald trump and damage is being done even though more to the media in the process. charles: you think it's a victory as long as the salvos go back and forth? >> yeah, i think the president has got to get back on his agenda. i think that the president is going for tactical victories and scoring one after another against the mess, but

ultimately he's got to look big picture and ultimately got to look beyond them. i wouldn't pick fights with them. they're committing suicide all by themselves. if i were the president i wouldn't do a silly smackdown video. charles: or look the other way when they're-- >> look presidential. charles, he's got-- >> counter punch first. >> he's got the opportunity. he's got the opportunity now to rise above it and look presidential and really make them look bad. charles: thank you very much, really appreciate it. great seeing you. now to this a very serious story, a new york city police officer shot while she was sitting in a patrol car. police are calling it an unprovoked attack, an assassination, in fact, we've got the details for you coming up. a new high school graduation requirements for children in chicago, if you want a diploma. you have to show proof of a job, college acceptance or

apprenticeship. if not know graduation. if you like the idea tweet us. more varney after this.

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increasingly schools are in-- replacing parents. they need to in the inner city and so on so this is taking it another step. it's a great idea. it may not do a lot of good, but even if it does some good. ashley: they have to have a secure job, receive a letter to college and a trade apprenticeship, a gap year program or the military. this is a bankrupt city, and bankrupt school system where are those going to help achieve this. liz: illinois, growing and creating a business is as easy as jumping into a pool of hair dryers. this sounds great in theory, if you stay in the state you may have a tough go of it, but the other options, yeah, it sounds like common sense. charles: i agree a thousand percent. my wife and i give out shirts to high school graduates in new york and new jersey, and 90% unprepared, but i blame a lot

of it to schools. these schools that rubber stamping these kids, it's a conveyor belt. if you're going to put the onus on someone, put the onus on the chicago teachers who always demand pay raises, even at the expense of these kids over the last 20 years. let's hope they get that right, too. all right, guys, we're a few minutes away from the opening bell. all the equity futures looking pretty good here. look at this, the dow grinding higher. if we can get all three of the indices coming up, particularly the nasdaq, we're talking record numbers across the board. this is huge, huge news. we'll have the opening bell in less than five minutes. usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family, and we're usaa members for life.

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>> all right. folks, the opening bell less than a minute away. let me set the stage for you. at one point on monday with half the session. the dow was up 200 points. it ended up 127 points near an all-time high. the big news has been rotation and the selling of tech stocks, going into names and industries that hadn't been doing so well. right now, the stage is set for the major indices to open higher with tech reclaiming the leadership role and the blue chips doing well, also. they're doing extraordinarily well and industrial names and

material names, what they're doing to underscore the notion that our economy is indeed turning around and also to justify the stock market rally which, by the way, has been phenomenal for the indices, even the dow and the s&p and nasdaq up 13%. here we are, guys, the bell renninging right now. we're going to populate the dow board for you. first, apple, looks like the early winner, goldman sachs again, the story, the rotation in the banks and the so-called stress test. a lot of money has come pouring in. american express, goldman sachs, j.p. morgan, the top three of the top four names higher, nike down, but nike had an amazing two-day session after the earnings, oil down a little bit and caterpillar, but this is not a bad start, it's a pretty good start. dow up 24 points. let's take a look at this, there's been some discussion when it was in freefall, it was bad for the economy and the market. when it rebounded, it was bad for the economy and market.

i think it's at a low, pretty stable level. and it's okay. 235. check the tech stocks, facebook, alphabet/google, apple, all fractionally higher. the big banks doing extraordinarily well since they passed the stress test. i don't believe it, but nevertheless get back to investors, 120, 30 billion dollars through dividend hikes for buybacks and banks are looking strong. however, there's another headache for disney, it's not just espn we've covered that story, losing viewers for a long time. their kids channels losing viewers, too. so we're going to discuss that a little more in just a moment. joining us right now, ashley webster, liz macdonald, shah gilani, and dr barton. we've got to start with politics, the turmoil in north korea, and also health care. the good news, the market seems to be shrugging it off. shah what do you say?

>> the market has shrugged off everything, geopoliticals or politics, even slow growth is shrugged off. we're looking at the leadership, growth area in terms of technology stocks and now the banks are taking the forefront and the market is doing a rotation here and they're proving it wants to go higher and clear skies ahead. charles: shah, you're looking good. i'm waiting for you to break out a sherlock holmes type pipes, looking suave, my man. >> one thing i might add, tech stocks, we'll survived a tech stock pullback in some of the big five names and the rest of the market buoyed it up. we don't make tops when so many stocks are participating, when we have so much broad participation, even when the leaders fall down a little bit, everybody picks them up. this market may have a little dip in it, but i consider more upside. charles: you consider that a buy. rotation out of tech--

>> and also small caps. liz: we've been through this, it's not geopoliticals, it's going to be interest rate hikes, corporate earnings rates down or recession. the fed surprisingly talking about rate hikes, and amazon effects going lower across the board. charles: let me ask you about that, there's an article, the fed letting this run off. they haven't been precise, but they've hinted it's going to happen and it's rattled the market periodically. >> it's going to continue to rattle the market. there's nothing to affect the market longer term. this is normalization in the portion, this is what the fed should have started some time ago. reducing a 4 1/2 trillion dollar balance sheet is overwhelming and the markets are thinking how are they going to digest that and how is the band market going to digest that. so far so good as far as the

up-take in rates. the rate hikes have been a nonevent and in terms of the 10-year to two and three quarters and as far as the balance sheet, as long it's gentle, they're not going to do anything harsh. charles: let's not forget, the fed. ecb and bank of japan, 13 trillion. >> that's a huge point. we had the big down day because of draghi's statement they might do the normallizing or unwinding the balance sheet that shah talked about that. the market absorbed that and bounced back. charles: let's look at oil, gas at 2.23 for the national average. is it good for the economy or bad for the economy? we're a major crude oil producer and we want to be a major exporter at some point. we brought in 122% increase until friday's count two lower

and the market had a sigh of relief. >> i was out west talking to wild cate erer ercaters, we keet out of the ground faster while opec falls apart quickly and both of those are going to keep prices down. i think it's a long-term positive for the company. ashley: at what point, charles' point dr, is the sweet point. at some point, you can't go dig. you're not making enough on the line. liz: what is the break point, 50, 45? >> if you look at what's happened the last year, it's been the wild, wild west. even on friday, rig counts went up there. so they probably have the best, cheapest fracking oil out there and that's why there's consolidation. liz: but to ashley's points. hang on, is it $50 a barrel or 65, i heard-- i'm talking about the break point power of oil where it's not cost effective to drill.

charles: under 40, i think, but we'll see. some experts say a three-handle and be profitable. we'll see. tech stocks, guys, they've been hit the last couple of weeks. shah, we've got rebound at the open. is this the day that we start to see the overall bounceback in tech? >> i'm not worried at all about the tech. actually we call it a bull pac. looked like program trading and consumers decide they're going to take profit here. you see that kind of action when normally investors don't just dump like that. the fact that it happened quickly doesn't bother me at all. that's profit taking and taking profits at high levels. there's nothing wrong with that. all of them have been stabilized and tech stocks are probably a buy. any spur in the dip and some names makes them a buy. >> some viewers may be old enough for some saying that in 2000. don't worry about it, take this

dip up. [laughter] >> i think i was one of the one who said don't worry about it, baby, pick some stocks up. >> i'm in that camp because of the nontopping nature of the markets. i think that we have a much bigger chance of a blowoff top than a rapid pullback. i think there's another leg up for investors to buy on the pullback. charles: and everything it happens faster and microsoft reportedly going to layoff 1,000 people, thousands ultimately and they'll be laser-like focused on cloud computing. shah, are you surprised? or is this something like older tech like ibm should be doing? >> i'm not surprised, i'm supportive and ibm needs to do more. speaking of microsoft, their head count rose 6% in the last quarter. it doesn't surprise me. what they're doing and i'm supportive of.

the fact that they're focusing sales now on the cloud computer business, which is huge for them. moving forward, less emphasis on their box software services and i think that's a tremendous plus for the company. don't forget. it's amazon in terms of the cloud. and they can't get too far ahead of it. it's making the right move here. charles: a denver -- it's a different skillset. versus the crowd. a mixed picture now, down 19 points, down 20. the nasdaq up the most and s&p fractionally higher and take a quick look at the price of oil. we're down 78 cents. 45 is always your key number. maybe it holds this time in support before making the next run toward that 50 number. by the way, your amazon story today. there's always an amazon story, the company announcing it will create 1500 new full-time jobs at a fulfillment center in salt

lake city. and then the tesla story, the delivery end, mainly hurt by batteries. one of the losers on the nasdaq. and given up ground. volvo is trying to get in the game. saying all the cars will be he can willing trick or hybrid until 2019. shah, looks like the right move to you? >> yeah, i think so. and this points to the support that tesla had so far. eventually it's going to erode when some of these automakers step up. don't forget it's held the lead and high end brand classification, so, you know, it makes sense that people are very happy with it. the cars are fabulous, but as the other manufacturers build better electric cars, tesla is going to come under increasing pressure. charles: what do you make of it. ashley: i don't think that motorists want a hybrid or electric car right now.

i think we're headed in that direction. gas is cheap, they're going to bigger cars and suv's are very popular. by 2019, that's just around the corner. >> volvo might be doing something smart getting ahead of the production chur of to get the hybrid cost down. i think that tesla is sell the news. we've got the date for the model 3, and we've been down, i think that tesla is due for a pullback. charles: it's starting. and disney not just the espn viewers they're losing, but also the kids' channels they're losing. what do you make of that. >> two cable channels geared to kids and teens lost about 4 million subscribers, each. those two have lost 4 million over the last three years. that's the problem and compound that with the cord cutting at espn, cable is a problem for

disney which is 43% of their profit. they're going to have to do something different and look to on-line. >> the age, they lost a third of that. that's streaming. disney could buy netflix, look at the footnotes, they've got billions off the balance sheet. billions of balance on the balance sheet. if netflix were smart it would sell itself to disney. just a thought. charles: and maybe disney should bring back my granddaughter's favorite show. thank you, appreciate your expertise. congress, they're still on the july 4th break, but when they return next week, will the lawmakers stick it out. get health care reform and taxes done, even if they have to give up the august recess. the state senate overrides the

governor's veto and then we'll have a live report of that coming up next.

>> all right. check the big boards out. now off 27 points so the rotation continues. it's out of blue chips and back into tech. one of the names not having a good day. tesla. the delivery end of the forecast, it's battery issues and one of the biggest losers today on nasdaq. talk about gee-whiz, apple reportedly testing 3-d face scanning for the next generation of iphones. nicole, what's going on. nicole: we know about the home button and using the fingerprint in order to open up the phone. there's talk by one analyst, who is reliable, the new iphone, the 10-anniversary may

include face recognition technology and maybe the eye. they're testing in hundred of milliseconds to get it open fast. they've got to do something special and not sure whether it's going to happen. charles: the phone sounds like the ultimate gee-whiz gadget and i might buy my first one. nicole, thanks a lot. let's get back to snort korea -- north korea and a member of the committee. sir, what should our response be at this point? >> we should pursue the diplomatic avenues and glad to see secretary of state tillerson coming out with a statement in that regard. as a member of the armed forces, we will not allow north korea having a missile and way to deliver it. i'm glad we stepped up.

charles: speaking of troubling, i was shocked with a joint communique with russia and china, to a large degree wagging fingers at america, hey, maybe stop with the ships and war games, the pressure would alleviate itself. i don't like that we're cobbled in with north korea in this situation. >> i'm anxious to see what the president done with the meeting with world leaders. it's got to be a message that we don't go in this direction. charles: and health care, anyone committing at least to get rid of the august recess? >> well, i think we're getting there. i joined with nine other of my colleagues, sent a letter to leader mitch mcconnell saying we cannot be taking a vacation in august, if we haven't done the people's work.

that's repeal and replace, and i'm optimistic there will be something to vote on when we get back. if we don't, we've got to get through the recess because taxes are waiting and we've got to do our work. charles: it feels like the senate bill was done behind closed doors. even some of those that are part of this decision were shutout. should there be a more transparent process? >> i think there will be a more transparent process, i've been in the senate seven months taking over jeff sessions place. it's not as if it hasn't been discussed. a working draft had to be produced, which it does. and it will be public, i hope when we get back on the 10th and we'll move quickly to get a bill passed. charles: last one for you, senator. food stamp rolls have plummeted, including in your

home state of alabama. what are your thoughts on that? >> i'm all about finding incentives to encourage able-bodied people to work. it's not a good way to develop independence. i'm for means testing and people who are able-bodied can get to work. the people who need it, who can't work or can't afford the basic necessities. charles: my mom as born and raised in alabama and i spent a lot of time there. a few weeks ago i was riding a bike and i was shocked how many able-bodied muscle-bound men sitting on porches listening to music. and when the state wanted to enforce one of the tough s illegal immigration, they had no one to work in the

factories. >> we've been living with an incentive not to work. it's crazy because we have plenty of jobs going begging. i spent a lot of times trying to get these people in the work force. we can talk about the disability programs so abused and ultimately when you think about it, hurts the most needy in our society. it's a problem in every state. >> we need to check those. sir, thank you for your time this morning. >> thank you. charles: i appreciate it. i want to check the market scan. the dow 30. more reds than green and walt disney having serious issues and nike had a big week, some profit taking there. we want to go to illinois, the finances are so bad you have republicans voting for an increase in taxes. that's next. whoooo.

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o'riley automotive, shares touching the lowest level in two and a half years, not the first time they've missed. a cop shot in new york city, you have the details. liz: miosotis familia. sunday night, three hours later she is dead. a single gunshot from a five shot ruger from alexander bonds. he was shot and killed as the police made chase. he was paroled after serving seven years in prison for a robbery and that was up in syracuse, paroled in 2013. familia was nearing the end of her shift, in the bronx. and happened after midnight. police call it an unprovoked attack. and police were leaning up to take her body to the medical examiner's office.

we have that up 20%. charles: 48-year-old mother of three. ashley: 12 year veteran. charles: 12-year vet. liz: shot in the head. charles: it's heartbreaking. and illinois, the illinois senate votes to override the governor's veto on income tax. at least they want to hit that. jeff flock is in chicago with the latest, you told us on monday, jeff, this was a possibility. >> yeah, yeah, you know, whether it's a good thing, a bad thing? depends on your point of view. the governor doesn't think it's a good thing, he's been overridden because of the tax increase and no real structural reform as to how illinois does business. he said he was willing to consider a tax increase if they would reform things. didn't happen in any meaningful way so now the house, the bill goes back to the house for an override vote. 15 republicans last week voted against the governor, and voted for the spending plan with the

tax increase, so, i don't know. i mean, the rating agencies like it, as you know, agent agencies like stability and money coming in, if it's for a tax increase, so be it. they're between a rock and a hard place. they were going to downgrade fem if they didn't do it, but if they do it and don't change anything, what can i tell you. charles: they're going to need serious reforms there. you go to the same game plan that got you there in the first place to prolong the agony. thank you, jeff. the stage is set for the president's secretary trip overseas as commander-in-chief. and north korea say they have a missile capable of reaching north america. the second hour of "varney & company" next.

. . . .

charles: well president trump is in the air on his way to poland before he makes his way to the g20 meeting. as north korea launches an intercontinental ballistic

missile with a range that could hit alaska. president trump hitting china on the trade dies with the nation. general thomas mack american you in i will give us their take. launching the peoples lobby where people can vote on policy topics. critics criticizing this as pet project for two billionaires. we're all over that. volvo going all-in on electric engines phasing out gasoline by 20129. second hour of "varney & company" is about to begin. ♪ charles: start with a check on the big board. dow is down. s&p slipped into the red. rerotation thing going on again.

money going back into tech. let's check on the big name tech stocks we follow every day. alphabet google also up. oil stocks oil pulled back. a heck of a nice stock but giving up some of it today. consequently oil stocks down as well. tesla down real big. deliveries at low end of their own forecasts hurt by battery issues. among the biggest losers on the nasdaq. mark pinkus, cofounder of zinc today and reed hoffman are trying to remake the democratic party. fox news contributor tammy bruce. how successful will these guys be? >> good luck to them. it is interesting, they're calling the new effort to win the future, wtf. which also means something else. what i find fascinating here, being billed as remake of the democratic party but in fact it is very separate.

i think what this shows me is the fact that any effort they have made with the existing party has not worked. they believe it is not going to be functioning this will be a virtual party a, a new party if you will. based people being involved, being able to vote online about what issues they like. then to have a discussion on twitter which is as we know these days really doesn't quite happen. but that is their approach. now both of those things of course can be gamed. what i think they're doing, trying to start to find out, especially maybe millenials are thinking about. they're starting out with two questions. do you think engineering degrees should be free? would you be against a candidate who doesn't want to impeach trump? so they're getting a feel for base at this point, whatever this new base would be, trying to organize them accordingly. charles: how does this work with respect to mark zuckerberg who has been really, he has done across the country tour.

he is acting like a defacto candidate already. he is doing a listening tour. something really more along the traditional political lines. >> he is. he insists he is not running for any office. keep in mind the public opinion of the tech companies these days is very low. they see them as intrusive. as violating privacy. not doing enough against terrorism, et cetera. and what you don't want is to have donald trump and the administration against you as well when the american people are looking at you a little funny. both of the men by the way starting you up wtf. heavy donors to hillary like most of silicon valley was. liz: that is all they have got, astonishing breadth of economic growth policies. really overwhelmed. >> fascinating dynamic, they could make a difference when it comes to looking at base in different way. should tell people money in silicon valley does not view the

existing democrat party as probably even financing. charles: admission something is wrong. >> yes. charles: another one for you, tammy. democratic congresswoman maxine waters slamming housing and urban development secretary ben carson. she gave a speech in new orleans, ben carson doesn't know about the mission of hud. he doesn't care with people in public housing. he thinks if you are poor it is your own fault. if he thinks he comes before my committee i will give him a pass, i am going to take his beep apart. what do you think? >> demonizing they have always done. kind of rhetoric everyone saying they need to back away from. we know dr. carson, he is a nice man, no matter what your politics. he is a good guy, this rhetoric it is really bordering on, well she wants trump impeached. it is really suggesting to people that everyone on the other side, who you may disagree with should be considered an

enemy. this is somewhat violent when you talk about dismembering someone. this is not what people want. nancy pelosi a at one point tried to stop maxine waters and her rhetoric. this tells you there is no leadership with the democrats. otherwise this kind of rhetoric -- charles: or she has become something if not a leader, a mouthpiece. she is at awards show. liz: effective. only people lining up with her call exiled. charles: latest thing with millenials and her and elizabeth warren. issue she is taking his comments in the past the wrong way. >> exactly. charles: dr. carson's main thing people can change their own arc in life. they can, ultimately you are responsible if you decide to do things that make you remain poor. ashley: responsibility. it is your fault. >> those who grew up poor, we know it is our decision to get out of the dynamic. charles: right.

not the fact that you were born somewhere you in america have the ability. liz: none of our families had a lot of money growing up, we can all say that, right? charles: absolutely. liz: we all fought where we are. charles: to this president trump praising low gas prices. he tweeted, quote, gas prices are the he lowest in the u.s. in over 10 years. i would like to see them go even lower. moody's managing editor john lonski, will they keep going lower? >> over near term they might. last week we had rebound in oil prices. perhaps gas prices are close to bottoming out. i don't think they're that important to consumer spending going forward. that we avoid a spike in gasoline prices that could be damaging. charles: when they first wend down, when opec declared that war, opec mistimed whole war on u.s. frackers. when we were over $100 a barrel, we came down sharply, there was no noticeable increase in consumer confidence or spending. >> that's right.

i think it is also interesting to note that opec doesn't have the same amount of power that they had, say 10 years ago or so. and that is thanks to technological progress, drilling technology, that have given way to fracking. that puts a lot of downward pressure on oil prices regardless what opec does. charles: are you confident that american frackers have the, what is the word i'm looking for? the discipline not to over, not to overfrack, to, you know, because listen, big jobs that were created in this country over the last decade, a lot of them are associated with higher oil prices. not 100 bucks but higher than where we are now. >> right. i think the break even point for fracking is perhaps 60, $62 per barrel. right now we're well under that. if we have the price of crude break under $40 per barrel, you will see a lot of these wells shut down quickly. charles: the thing is, they can turn them back on quick. i have another one for you.

number of people on food stamps plummeted in states where they implemented work requirements. in alabama, number of food stamp recipients down 85% after they issued work requirements. given this thing we're not incentivizing people or rewarding people for not working, that might be the magic elixer. >> anybody will be better off if they're given a stronger reason to get off the couch and find a job and take care of themselves is, make a living. i don't care how lowly that job might be. this provides you with the opportunity climbing up the ladder. reminds me what democratic party was like under bill clinton. how it changed so dramatically. charles: that back to work bill was highly successful. our economy did extraordinarily well. bill clinton worked with republicans on that. that was bipartisan success. to your point we should have learned something but we didn't. >> we forebottom about it. this gives you attention to low rate of labor fours participation.

telling me 4.3% unemployment rate we have overstates extent of labor market tightness significantly. i think we could have the unemployment rate go well under 4%. charles: what about the u6? 8.3, 8.6%. u6 number is significantly higher. that shows more job opportunities. >> we need qualified workers f you're not qualified, make yourself qualified. charles: thanks a lot, john. appreciate it. now to this. two middle east airlines says u.s. laptop ban has been lifted. ashley you have the details. ashley: they are doing safety orders on 10 airports in the middle east and after from i can. they decided to scale back some of bans on laptops or tablets that had to be left in and checked at home. they're rolling back that ban saying they are happy that there are enough security measures in place to stop terrorists from

putting explosives inside of these devices. they rolled back that ban for eidhat on sunday. turkish and emirates airlines have been cleared from the ban. their airlines are happy. they were concerned it would have an impact on travel. charles: thank you very, very much. neither year, another win for joey chestnut. that famous nathan's hot dog eating contest. he won it for the 10th time in 11 years. 72 hotdogs in ten minutes. get out the barf bag. that is 20,000 calories. the guy is razor thin. president trump on the way to the g20. north korea is on the list topics to be discussed who will china and russia stand with this they made intriguing comments to start with. dow jones industrial average is at the low of the session down 5points. the second hour of

"varney & company" continues. ♪

charles: take a look at microsoft. report erdley laying off thousands as it focuses more on cloud services. nvidia announced a partnership with baidu to for cloud computing and self-driving cars. a major battle between long and shorts in the last two weeks. now to the collapse in venezuela. the country raising a minimum wage for third time this year. emac this will likely not help the average person. liz: venezuela's maduro tell as packed auditorium, minimum wage up 50%. third time this year he raised the minimum wage.

when he was elected, $1000 in local currency what it is worth today, worth just $3. ashley: oh, my gosh. liz: this is socialism run amok. this is pathetic. local venezuelas are up about it. they're only getting $12.50 a month. that is their monthly wage. so you know, just two months time that minimum wage was cut by 1/5 because of inflation in this failed socialist economy. charles: kind of remindses you like zimbabwe with wheelbarrow of money to buy a loaf of bread. that is after standing in line maybe two or three hours. ashley: yeah. liz: venezuela was once per capita one of the highest in this hemisphere. ashley: oil. liz: socialism has ruined it, if it was just oil, north dakota would be a basket case. wake door and canada would be too. not just oil. charles: dell socialism. president trump criticizing

china after north korea test of intercontinental ballistic missile. trade between china and north korea grew 40% in the first quarter. so much for china working with us. hey, we had to give it a try. joining us congressman lee zelden from new york. congressman, this will be a big topic of discussion at the g20 summit. how do you think think this will play out? >> as we talk about north korea with these other nations, we still have as our top, several options trying to get china to exert a leadership role as the united states presses forward with a principle called dime, diplomacy, information, military, economics, with a military certainly the last option we would ever want to get to. we need china and some of these other nations in the region but especially china to exert economic pressure on north korea. so the president's tweet this morning includes, i was not aware in the first quarter it

was up 40%, which is a staggering high number. we were previously optimistic when we saw china stop importing coal, even though they did import a whole lot of coal before they made that announcement. charles: right. >> we need china to go in the other direction, not this direction. so that is a pretty staggering number in the first quarter. charles: to your point in the first quarter, their coal imports were down 50%. they did cut off the coal but did a whole lot more business with north korea and it does underscore a critical point that if china does not step up, i know we want military to be the last option but by the same token, everyone underestimates how fast they get intercontinental ballistic missile and how fast it takes to get a warhead on these things. the clock is ticking pretty quickly on this no two things come to mind. one, we can not allow north korea to have the ability to deliver a nuclear warhead to the united states.

and every time we see one of these test firing by the north koreans, it is not just an act of aggression. it is not just provocation or a message being sent, they are testing their technology, making tweaks to improve the technology for what is next. what we can't allow north korea to get to, the ability to deliver the nuclear warhead. as far as china goes, you know the president has, there is carrot and stick. by stick, i don't mean military. there is carrot and stick tool available to this president, he came into the white house. he is trying to build a good relationship with the chinese in good faith. but the stick is, as we've seen from this president over the course of the last week or so, especially. with tomorrow sales, with taiwan, with sanctions that could be ramped up against chinese actors, the president certainly has a whole lot of other tools to exert pressure on the chinese because, as you

pointed out, that military is the last option. charles: right. >> as the north koreans get closer to that point, we can't allow them to get to we need to ramp up all our available options which all across the spectrum of dime. charles: i also love to see japan get rid of their pacifist constitution. maybe that could happen as well. congressman, i do want to ask you about this. last hour we asked senator luther strange about health reform. i would like you to hear what he said about canceling the august recess, just getting this thing done. roll tape? >> i think we're getting there. i joined with nine other of my colleagues sending a letter to leader mitch mcconnell saying we can not be taking a vacation or break in august if we haven't done the people's work. that starts with repeal and replace. i'm still optimistic negotiations proceeding we'll have something to vote on when we get back. if we don't, we have to work through the recess. taxes are waiting, other key priorities of the president. we have got to do our work.

charles: congressman, your reaction? >> well, the senate needs to, they're legislating. they're working their legislative will. hopefully as they get back next week they can pass something soon so that we could put something on the president's desk by the august recess. what i think would be very difficult would be to get really close to having a final product. everyone goes home for the august recess, just expecting to deal with it after labor day. option @ is get this on the president's desk by august recess. option b, if we're really close, we stay until it gets done. charles: congressman lee zeldin, thank you very much. really appreciate it. coming up volvo going all-in on electric engines phasing out gas by 2019. we have details for you. ♪

charles: volvo announcing phasing out gas car production by 2019. gerri willis with more. going all electric. >> hybrid. charles: forgot about the hybrid. >> by 2019 everything will be electric or hybrid. they're saying good-bye to internnal combustion. that is the industry that fueled this for 100 years. ever since the first model t came off the assembly line. irony, you're reporting that gas prices in this country 12-year low. what is going on here? cost of making regular

old-fashioned vehicle going up, up, because of stricter emission standards. there is tipping point in manufacturing, suddenly cheaper to make electric cars. that is what volvo suggesting will happen. they will pull out five new electric vehicles and high hybrids. five new designs. charles: do they make any now? i never heard of volvo being a player in the electric car market. >> you think of them as diesel, originally swedish. now owned by chinese. keep that in mind. people asking why might this come forward now? they also want to go public. charles: spin them out? >> company geely, bought them from ford in 2010. yeah, there is a lot going on there. i really think this is driven in large part by regulations. charles: really? even despite the fact that president trump is getting rid of onerous c.a.f.e. standards by the former administration? >> not that. it is the whole world has rules in place right now. charles: even individual states.

if you want to sell a car in california you still have those hurdles. gerri, thanks a lot. >> thank you. charles: coming you up u.s., north korea tensions continue to rise after north korea successfully tested a missile that could reach alaska. kim jong-un calling it a gift for the american bastards. we're all over the story. trump's secret to his success? could be taking moral high ground, according to charles hurt. he will make his case next. ♪ ♪ art. it can be sculpted, bringing to life beautiful detail.

or painted in luxurious strokes. and in rare cases... both. ♪

♪ charles: all right, guys. the music is hip but not the markets. we're getting hit here in a little bit. dow off 53 points. a little anxiety. janet yellen making a few comments heading to the fomc meeting. big tech names we check every day for you came out of the gate with gusto. they're also losing a a little steam. apple essentially unchanged although amazon is still holding up gains pretty well. look at defense stocks. defense stocks have done extraordinarily well. they continue to set the pace here. look at that, all green across the board. of course in the aftermath of the news of north korea's latest missile launch, you would expect the stocks to be higher. president trump in the mean offing to help terminally ill

child from britain quote, if we can help little charlie guard per our friends in the uk and the pope we would be delighted to do so. our next guest, charles hurt, has a new op-ed in the "washington times," trump seizes moral high ground in the charlie guard case. charles joins us now. president trump's tweet caught a lot of people, touched a lot of people. >> sure. charles: this is infant apparently being held hostage by the socialized medical system in the uk that won't allow his parent to bring, to come to america to seek experimental treatment. how did president trump seize the moral high ground here? >> you know, he just has this way, sometimes it is because he doesn't understand the political system. he just don't know all everything, doesn't know the ancient fights that have been going on forever and ever. sometimes i think he does it he realizes because he can. he walks into a politically fraught situation.

this has politics of abortion, life, health care, everything, he just walks in you know what? i want to help that kid. it touches a nerve with people. and it's a tremendously effective way to blow up you all the stupid, intractable fights that seize places like washington and all these sort of, all the political veterans who have a vested interest in keeping these titanic fights going. he just sees it as it is. he sees it as a sick kid. a family in a terrible situation. and he wants to help. in so doing, he, you know, shine as light not only sort of the value of life but also, terrifying situation it is to have a government saying, no, we're done with taking care of this kid. we're not going to try anything else. charles: that is just a heart-breaking story. would you want to or could argue passion is what drives president

trump and it can be a double-edged sword at times? really, right? >> absolutely, charles. the thing that is the best about donald trump is also the thing that kind of attracts some of the most vociferious attacks from people. charles: charles, i want to talk to you about this, democratic congressman jamie raskin is leading a push to examine president trump's mental fitness. the findings could be used to seek his removal from office. about two dozen democrat lawmakers backed this bill including debbie wasserman schultz and sheila lee jackson. what is the point of this? i feel like another embarassment to the democrats? >> i could not agree more, charles. talk about questions about fitness to lead or do anything else? i think it is just part of this donald trump derangement syndrome where people, they simply can not fathom the fact that you had some american

voters who, you know, who really are fed up with politics, fed up with washington. they want something drastically different to happen. they understand that you know, that donald trump isn't perfect. they take those imperfections. none of these imperfections in these people's minds amount to nearly as much baggage and recklessness as we have in all of these elected officials who are behind this thing. people are sick and tired of these people. charles: i remember, it is a long time ago, i was at an event at the 21 club. senior bush was president. his ratings were sky-high. ed markey was there, democrat from massachusetts. i say how are you guys going to beat this president with these sky-high approval ratings? he said we're not going do do anything. we'll let him mess himself up. what happened to the days of sitting back and chilling out? democrats are so eager so obstructionists that they keep tripping over themselves? >> that is such a great point.

what happened after that event you remember at the 21 club, within a year or two after the gulf war, popularity of the gulf war subsided, he did undo himself. completely beat himself. although, allowed bill clinton never won a majority of the vote, it was, he won enough and george h.w. bush did enough to hurt himself, that of course, democrats won and, smart people like that probably realized it. this is a totally different situation. this kind of fervor, this anti, blind, anti-trump fervor i would say is a lot more like what we saw in with republicans against bill clinton. and what we saw with democrats against george w. bush. in the midterms. of course both of those guys won re-election. they won it despite this, you know, frenzied hatred from the other side. charles: charles hurt, great column. very much appreciate it. >> thanks, charles.

charles: want to get back to north korea's missile launch. kim jong-un reportedly described the launch as a gift to the american bastards. joining us lieutenant-general tom mcinerney. general, how do we handle north korea? >> well, this is a very difficult challenge, charles, no question about it. he tried to provoke us. he did it on 4th of july, et cetera. he comes out with that uttering which is absolutely ridiculous. with what we need to do, at group of 10 this friday the president ought to put a lot of emphasis on diplomatic efforts to counter what north korea is doing and work on china and russia. second, we need to go into very aggressive economic sanctions, and i mean economic sanctions. anybody that deals with north korea, chinese banks or anything, cut them off from dealing with not only u.s. banks but other global banks. make it really hurt. we've done that before. it didn't last long but it hurt.

and then we need to look at our military options, charles. and first of all, they're both conventional and they're nuclear options that we need to look at. on conventional side, i would beef up our forces in the pacific western will fake a year

to move forces out there and rebalance them. we need to put massive conventional forces out there. we also need to start taking steps with nuclear forces. in other words, put u.s. nuclear forces back in to south korea. start talking with japan. talking about nuclear forces there. have a program that we had in nato which the nations sat alert. nuclear alert and u.s. weapons. in other words this is very serious. we need a deterrent to his nuclear strategy. those are some of the steps we ought to start planning and discussing. charles: general mcinerney, clear, concise to the point. we appreciate it. thanks very much. >> thanks, charles. charles: illinois house is expected to override governor's

veto of a budget that would increase income taxes. the state has $15 billion nun paid bills. ashley you have some -- ashley: senate voted to override the governor's budget. look it increases taxes by five billion. individual tax rate goes up from 3.75%. close to 5%. corporations go up 7%. taxes just over 5%. the governor of illinois just saying look, this is not going to work. this is not going to solve our problem. if anything, it makes it worse. however, the illinois senate saying we have to do something now. vote to override it. charles: that is what happens when you cross the rubicon. thanks a lot. north korea successfully testing a missile launch, focus on kim jong-un right now, will this overshadow fight against isis and terror?

more "varney" after this.

ashley: brent bozell to cnn's gripe on president trump's snacks down video. he says quote, they're looking like idiots. roll tape. >> this is cnn that has been so embarrassed it overreacted so badly to that silly smokesmackdown video which i

which the president hadn't done, they have override so much suggest fostering violence against the media, they're trying to find a upper hand on this. this is what they're doing. they're trying to get a hold of it and take the upper hand in this discussion. but once again they're looking like idiots, like absolute idiots. ♪

charles: disappointing sales at o'reilly automotive. wow, shares there, touching

lowest level in 2 1/2 years. taking a long for the ride. advance auto parts, autozone and genuine parts also getting hammered there. disney has a new problem on its hand. its networks targeting of children, losing a lot of viewers. emac, it used to be a about espn but -- liz: it is bad. that means merchandising. their sales and merchandising goes down as well. they have lost, lost a gigantic sum of people between 3 to 34. dropped by a third over last five years. they lot total 8 million customers in that, in the lower end of that range, age range. and so you know, here is the question. what is going on? it is streaming. it is lack of hits. meaning streaming shows like netflix and like are really slamming disney. you know, the cable revenue is about a quarter of its overall profits. basically the whole entity is about 43% of operating profits. they have to get on the stick to

fix this problem. they have to have a streaming strategy as espn is also clearly in trouble too. charles: you know, they have highly-prized management. you would have thought they would have been more aggressive by now. i'm sure they will be but wow, that is big number. to the migrant crisis in europe. austria deployed armored vehicles to the bored he with italy and deploy hundreds of soldiers to prevent mike glance from coming into their country. we have a ryan moreaux. they can't get a handle on this issue when you break out military assets, that is scary stuff. >> europe is really stuck. they are so stuck. they can allow millions of people arrive each year. all problems that entails while the population is demanding leaders that put an end to it. or, they can put an end to it to stop the flow. you're dealing with riots on the borders. violence of people desperate to get in there come in. that is also political suicide

because of how that can escalate. you can have muslim communities within europe rise up as you have riots and clashes with people trying to come in. so i don't see a pretty ending to this at all. charles: i know in the last two weeks alone, i've seen so many images of these big ships, these big boats drifting from north africa into italy. they come, almost like a highway. they don't stop them somehow. they get there. there is no turning back. italy seems to go on one of these focal points. austria breaking you out heavy artillery. what do these folks do? how do they fight it? their welfare program, not generous but if they just get up there. >> with security not allow them to come in. being at security personnel. looking at people risking their lives to come to the continent. a lot of people died trying to make the trip. that is heartbreaking itself. some situations independent

kurdistan taking a lot of refugees or safe zones in syria. it helps. but let's be realistic. none of those places compare to getting to europe or united states or other country in the west. people will still try to flow in. charles: another one for you, with all the focus on north korea's latest missile launch, do you feel the fight against terrorism gets overshadowed? >> when you're dealing with crisis like north korea, that is legitimate thing to cover, other stories that deserve attention don't get attention they deserve. this individual, abdullah, who was previously arrested in 1977, they found material for 50 bombs in his home was arrested again. he had a stockpile of guns. this was in upstate new york. according to sources within a group called muslims of america, sources that i obtained as well as someone i worked with martin moyer obtained this individual is not just one guy with a lot of guns. he is a close associate of this group, muslims of america, which is famous for having what they call islamic villages around the country. that is a big story.

when you have a guy associated with a radical group with infrastructure around the u.s., that is something that needs to be covered. charles: also wouldn't from a military point of view, we had general mcinerney on, talking about massive deployments of weapons and troops. our military is so thinned out. when we do that, it has to embolden iran and other bad actors in the world because they know we can't fight on all the fronts at same time? >> there was talk going back to early 1990s, there was treaty with iran and north korea, within of them gets into a fight, the other picks a fight, that raises chance for them to succeed. if they believe fight with the u.s. is inevitable. that is the way you go about it. have, a nice way of ending in any way. for example, the regime is going to implode one day. when that happens, it is going to be like gold rush of terrorist rogue states snatching up weapons and personnel. charles: implode in what?

there will be internal uprising someone takes out kim jong-un? >> it is inevitable. the best scenario someone near him overthrows him. but dish, they look look afraid. they have five medals and they're scared. >> one day it will happen. charles: thanks a lot, ryan. >> sure. charles: president trump on way to g20 right now. response to north korea undoubtedly at top of the list. what should america's response be? lieutenant colonel oliver north joins us in the next hour. ♪

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quickly to get a bill passed. charles: last one for you, senator. food stamp rolls plummeted in states that require work requirements that includes your home state of alabama. what are your thoughts on that? >> i'm all about finding incentives to make able, to encourage able-bodied people to go out to find work. if you give something away, people don't have to earn it, not a good way to develop independence. i'm all for means testing and requiring people who are able-bodied and can work to go to work so that the benefits will really go to people who need it. most deserving people in our society maybe can't work or can't afford the basic necessities. charles: my mom was born and raised in alabama. i spent a lot of time there. a few years ago, i was out riding a bike. i was shocked how many able-bodied 20-year-old men, muscle-bound men sitting on porches listening to music. they're getting paid not to work. when your state wanted to enforce one of the toughest illegal immigration laws in the country, businesses begged you

to stop because they had no one to work the catfish farms. they had no one to work factories. we can't pay people not to work, can we? >> we are creating unfortunately with our incentives a incentives not to work. it is crazy. many of our jobs going begging. i spent a lot of my time as attorney general finding ways to get able-bodied people in the workforce. we can talk about disability programs being so abused. people when you think about it, hurt most needy people in our society, thanks. so it's a real problem, in every state. i was wondering if an electric toothbrush really cleans...

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charles: i am in for charles payne in for stuart varney. let's start with north korea successfully testing a long-range intercontinental ballistic missile capable of carrying a nuclear weapon that could strike the united states, the military responding with precision military drills with south korea, our ambassador calling for an emergency council meeting after donald trump heads to europe for the g 20 summit. air force one en route to poland meeting with leaders in that country before traveling to hamburg, germany for that summit. it is a slow week in dc, congress on break for the july 4th holiday, back to work next week, healthcare reform at the top of the agenda but can it be done before the august recess. will they cancel the august break? chicago announcing new graduate requirements. if you are a senior and don't have a plan you are not getting a diploma. we haven't covered. "varney and company" hour 3 starts right now.

first to your money, we came out the gate with some gusto but we are crawling back only 20 points. let's check oil which made a rebound last week. give me some of that back, could be a support point. let's look at the 10 year yield, 2.35%, that is a 7-week high. then there is microsoft, the company planning to announce thousands of layoffs and switch its focus to the cloud. amazon announcing it will create 1500 jobs in salt lake city. mainly heard by battery issues. consequently that stock is one of the biggest loses on the

nasdaq today. disappointing fail that o'reilly automotive shares touching a level not seen in 21/2 years. auto zone and genuine parts, back to north korea. the first intercontinental ballistic missile, not much of a reaction in the market, want to bring in steve forbes, are they shrugging on this north korea thing? >> for the moment but i think they will wake up to the fact that this is something we can't kick the can down the road anymore, a more drastic measure has to be taken. with a rogue regime like that and i'm certain china, that will create uncertainty. charles: what happened to geopolitical risk and fear? i remember when you could add $15 to oil because of geopolitical risk. cut are at odds with its friends.

it was as stable as any time in recent memory. stocks or oil, what happened to geopolitical risk. >> we have been spoiled since an end of the cold war. after 9/11 when the effect wore off people got used to the way the world is and don't feel it is going to affect them, certainly not the economy, the oil spike in the past. charles: the smartest guys on the room are wall street guys. they believe the solution will happen with respect to north korea in particular. in the past it boiled down to cutting them a check. >> given what happened in the past, your voice comes up with a solution which north korea would violate. charles: they violate the treaty. >> something will be cooked up this time. world war i, 100 years ago up to the declaration of war in europe the markets didn't believe it would happen and they panicked and the stock exchange closed

for five months. even smart wall street is don't always see the future. stuart: donald trump tweeting yesterday, quote, gas prices at the lowest in the us in over ten years. i don't like to see them go even lower. are we going to see a bigger drop in gas prices? >> only if you reduce the gasoline tax. charles: it went up. >> new jersey went up 20% a gallon. charles: a handful of states have got up and more will follow. the federal gas tax is getting traction. people say it has been a long time, we have a lot of potholes, why not do it this way? >> they come up with why they have to pick your pockets even more instead of making do with what they have but lower oil or gasoline prices demand the $5 or $10 reduction in oil. it won't be good for oil stocks. charles: what about employment? a lot of the capital-intensive projects in this country were

driven by the oil and gas industry. >> oil and gas have done well since a couple years ago when oil prices finally cracked. we saw in the 1980s you can have a depressed energy industry which we had back then. texas was a desolate area and still have a vibrant economy. lower gasoline prices are good for the consumer and that will create more confidence. what it does do for the energy industry to drive them even more which they are becoming more efficient, more formidable producer. charles: we talk technology in terms of silicon valley but what they have been able to do in oil and gas. technology is absolutely remarkable. i want to talk about healthcare reform, members of congress home this week, they are in bed with protests from constituents that oppose the gop health plan. is that going to be harder for them to get a bill when they come back to work?

>> no matter what you do in healthcare you will get burned because of what obamacare has done. premium prices of gone up no matter what you do unless you provide hundreds of billions in subsidies which is not going to happen for the insurers. charles: they will get $50 billion out of this deal. >> not a bad deal but you are still going to have premiums going up. in new jersey, horizon is facing the same pressure as other companies. let's washington gets its act together you are going to see there and elsewhere around the country companies raising prices because costs are going up. obama's promise of $2500 reduction in your family budget for healthcare goes along with you can keep your doctor and keep your healthcare policy. charles: all those promises didn't come to fruition and you could argue they were designed to but this is fallen into the lapse of the republicans, they were voted into power and they own it. they are at serious odd how to

fix it. interesting because i read where susan collins was at a parade in her district and she said every person -- every single person talked about healthcare. first time a single topic of discussion, almost virtually all of them in her position. as a conservative it is hard for me to believe that. >> this is where the republicans blue it in terms of messaging. most people are convinced publicans get their way no matter what it is, tens of millions of people will lose their insurance, millions on the streets, not getting care they need and in that sense the communications battle, democrats have won, so republicans have to get not only a bill through but to explain and have a guest figure groups, congress got to get on this. this is a good deal, better deal than what obamacare is doing for you, trying to fix this thing. what they should emphasize which will pay dividends in the future

especially 2020, is provide governors flexibility on medicaid which is a runaway program states like rhode island and kentucky want to do things, you can provide more for less. charles: states want the ability to control, from dc. they want to talk about the chaos in venezuela. that is the last thing, raising the minimum wage for the third time. liz: in the midst of three month of protests, 80 people are dead, thousands injured in jail and now moving to rewrite the constitution so for the third time this year the embattled nicholas maduro who collapsed this economy into a failed state of socialism, increased by 50, two or three years ago.

it is $3 today. this comes as -- rewrite the constitution, lawmakers and the opposition party routinely beaten up. the average venezuelan, $12.50 on minimum wage and this is basically a leading light of oil rich company, a few years ago, depend on the likes of bernie sanders, oliver north and sean penn on the failure of socialism. this is what socialism brings. this is the reward of socialism in venezuela was oliver stone. thank you. >> oliver north would not be a fan. charles: margaret thatcher said the inevitable in a socialism when you run out of other people's money, historically it has been bloodshed and violence. that is your historical

exclamation point. i we headed that way? >> already happening. with the army going to intervene. in the past venezuela has a history of coups and the army will realize this is an untenable situation. they get food, severe malnutrition, starvation and this cannot continue. printing money is not the way. charles: raising wages for the army a lot, we will see if we can keep buying them off. they can't like what they are seeing either. a huge announcement from volvo. dropping the internal combustion engine, this could change the auto industry as we know it. we have more details coming up on that. healthcare reform, top of congress's agenda. when they get back from the july 4th vacation but here's the question. can they get something passed before they take another vacation in august?

we are going to handicap it after this. ♪ sonal istory. and through ancestry it brought us closer to understanding where i came from. finding out that i'm part native american and that i was related to one of the founding fathers i think has brought me closer to feeling more patriotic, definitely, and also feeling more like this is my home and this is truly where i came from. i'm jamie and i'm the fifth great-granddaughter of benjamin rush. ♪

charles: we started strong and we are down 60 points and clawing our way back. look at oil stocks, getting hit here oil plunging this morning down 3%. that is the steepest drop since june 14th, opec exports actually rose. take a look at those oil drillers under serious pressure. of although becoming the first major automaker filling gasoline vehicles. ashley: they are going to bring out five new electric and hybrid vehicles. from now on it is all hybrid or electric vehicles, volvo.

two are going to be built by a spinoff company, very high end to take down the teslas of this world. they are throwing all their money and on hybrid and electric vehicles. interesting move, with cheap gas and everyone in the country buying suvs and trucks i don't know if the full conversion to electric and hybrid is there yet but they are trying to get ahead of the curve. charles: they are owned by the chinese, the largest electric vehicle market in the world. could this be a china centric sort of move? ashley: it could be, a bold move, totally do away with the traditional gas powered engine. my question is is the infrastructure in place for the vehicle enough? charles: i don't think -- one or two fueling stations but they were at steve's house. other than that. >> not taking subsidies from the government. charles: donald trump heading to poland ahead of the g 20 meeting in germany later in the week.

the hopes are high. this is supposed to be -- angela merkel, emmanuel macron, how will this play out? >> the president making an intentional choice with his first visit the he is going to warsaw before he does any of the rest it is expected to give a speech in which he embraces the country's nationalistic conservative right wing politics and talks about a rejection, soft in part but a rejection nonetheless of euro centrism, globalism, the global elite attitude trump ran against, leave the door open for angela merkel to forge a new alliance that minimizes the united states. these are high-stakes games and

we have to read the tea leaves to see what people mean because you never get anything out of those statements. charles: the tea leaves pendulum is sworn back and forth a lot. there is a lot of hope, if you are a builder, teresa may looked at poll numbers, no way i can lose. she has to cobble together. what did happen to the nationalism, they try to use for leverage. >> poland represents the only large country with successful nationalistic government of that kind. a more moderate version of le pen and something trump hopes he can forge a new relationship, we will also see how this reflects,

and pull aside with p going to warsaw and whatever else the government in warsaw is it is against russia. pro polish, not for some resumption of the eastern bloc. how this plays into that dynamic has consequences for iran, syria and the rest of it. charles: congress on break this week, but when they return to washington they will have three weeks to get the healthcare reform bill done before the august recess. is that enough time? they have seven years was three weeks enough? >> i can't imagine that it is. when you hear from people like susan collins and other moderates who are getting an earful when they are home for the fourth of july break when talking to people, that they will come back even more resistant to the idea that is the journal points out a big

concern is premiums are going to go up under this plan, they are aware they are going to go up, they will go up no matter what but this means republicans would be responsible for voting to put premiums for americans in the individual market. the only hope republicans have at this point is to take the plan to put forward, senator nebraska with the backing of the president which is to repeal with a time limit, vote now, repeal, date certain, one year hence that stabilizes market in the short term and gives the republicans time is a need to come up with a replacement because as they are doing in our plan to rescue obamacare this year tacked onto a jerryrigged effort to make a long-term solution just doesn't look like it will get the votes. charles: really appreciate it. let's take a quick check at the big board. the dow jones industrial average up 15 points, settling after being up a lot, down a lot, fractionally for the moment. if you are a high school senior

in chicago you better have a plan for life after high school or you might not get your diploma. we have details right after this.

charles: take a look at the big board, the dow off 16 points, oil under pressure all morning long, down $1.68, china above $1.45, swing number. take a look at nvidia, bringing artificial intelligence to cloud computing and self driving vehicles, nvidia has chips to do all those things. check shares about the retailer cabela. the feds approving the merger with fast pro shops, the stock is up $.30. it is too late for that now. chicago telling high school

students if you want a diploma you have got to have a plan. in order to graduate students have to show proof they are going to go to college or start a job, join the military or enter a program. steve forbes, do you like this idea? >> no. they don't have enough counselors to ask how many time a visitor counselors, 0. and number 2, the state saying to you, you completed the course requirements, now we want to monitor your future? no. my libertarian instincts say it is not going to work, just a feel-good thing by the mayor of chicago and number 2, they should not be telling people what to do after they leave school. charles: what if the state had attacked together and teachers really did provide through vocational training or college preparation? >> then you wouldn't need a requirement. it would happen naturally. you could say there are good jobs waiting for me. the schools fail the kids

especially in chicago and they are saying we missed you up but tell us what you're going to do to make a good life. charles: now i know why hemac shows you the great one. maxine waters, democrat california, taking a serious shot at ben carson, saying he does not care about people in public housing. you are going to hear it right after this.

charles: the big board getting closer to the unchanged line. we were a big, down big, the s&p and nasdaq bringing disappointing sales at o'reilly automotive, at the lowest level in 21/2 years. advance auto parts and genuine down for the ride as well. maxine waters ripping into housing and urban development factory ben carson in a recent speech saying, quote, ben carson knows nothing about the mission of hud, he doesn't care about people in public housing, he believes if you are poor it is your own fault and if he thinks when he comes before my committee i'm going to give him a pass, i'm going to take his blanket apart. here to discuss fox news

contributor murdoch, fighting words. >> expect that a vaccine what a. he will never say anything nice about anybody who works for donald trump. it is not a shock. charles: not a big shock perhaps but the tone is amazing particularly in light of everything going on. representative scalise in the hospital and the notion of coombe by our --kumbaya. but the birth cradle-to-grave welfare state that many people find themselves in generation after generation, an essential part will be his platform asked hud. what is wrong with that? >> nothing is wrong with that. the democrat model is tax and spend, taking money from people, spend it on people and grateful that -- this democrat model has been for years. maxine waters and her colleagues see that as a threat to the business model. much better is the idea, and

improving economy. charles: when someone is honest about the lures of welfare and some of the reasons it is tough to get off, they are portrayed by mainstream media and democrats as being heartless, which is part of their comments. do you think ben carson is the kind of person, i think so but curious what you think in terms of doesn't care, he will be honest about this, the best way he can because he grew up at a certain level of poverty but his mother and his education got him out of it. >> talking about opportunities to educate themselves, school choice ties in with this discussion of public benefits. if kids can get well-educated they can get out of the system and prosper. if they don't they stay there. public welfare and benefits should be there for people who cannot take care of themselves and more we spend on everybody the less attention the truly needy people get and there have been efforts to get people on food stands off of food stamps, welfare requirements, people able to take care of themselves

back in the workforce and people who are disabled and sick and injured, we can pay attention to those people. charles: the next topic is the number of people on food stamps has plummeted. and four states, they restored their work requirements. in alabama the number of recipients down 85% underscoring what you were talking about. >> i was struck by this report on tuesday requirement, able-bodied people getting off of food stamps and go to work, not just down 5% or 10% in alabama, down 62% in georgia, 75% kansas, very dramatic. illustrate how many people are on public relief who shouldn't be. the economy has picked up some. rudy giuliani was mayor in new york, he had a requirement that if you get welfare benefits, you have to have fingerprints and what they discovered a lot of people ran, and demonstrate they were collecting in new york city

and new jersey and connecticut, triple dipping and rather than get caught and go to jail, just disappear quietly into the night and reduction in welfare under rudy giuliani, very large number. charles: back to the point we made a huge mistake in this country paying people not to work. you got to wonder if we were to rescind some of these things and take a harder line it would help illegal immigration the generation, there wouldn't be jobs waiting for illegal immigrants if americans had to take them. >> i think that is true. americans step into jobs, less of a magnet for people who run across the border and take these positions and important tying into the obamacare deal, when you reach a certain level with medicaid, take that job and medicaid disappears and you have to decide do i want to work and get 0 benefits or stay on the system and not work to get medicaid, the situation where it goes down a little bit, make a certain level of income and pay $10 a month.

benefits don't vanish but you have to be something so you are participating, that awful dilemma, i keep my medicine or do i get my medicine. charles: that is the way it is with transfer payments or payments from the government, a combination of things, so hard for a lot of people to say i will take a pay cut by taking my first job or taking a job and somehow it has got to be articulated. the first rung of the economic ladder. once you get on you have an opportunity to climb and you look back and what you were getting is chump change. >> what is a cliff, turn the cliff into a slide, slide down the cliff rather than drop off and the first rung of the latter, a lot of people think a job at mcdonald's, how degrading. jo ling:'s best first job, people start out there and moved to other things, some stick with mcdonald's and become district managers. probably more money than we are. charles: some become owners

which i worked mcdonald's when i was a teenager. back to that budget battle in illinois, state senate voting to override the governor's veto of the income tax hike. jeff flock has the latest. >> reporter: breaking news, the illinois house, we have a crisis here, the house was supposed to meet to override that veto, but they met half an hour ago, convened and there wasn't a quorum presence. only 59 of 118 lawmakers were on hand so they couldn't do business, they will reconvene tomorrow at 2:30 eastern to try to do that override tomorrow. the governor of course very outspoken against this tax increase. he says the package of legislation fails to address illinois's fiscal and economic crisis, in fact makes it worse in the long run. just learned the governor plans to come to chicago today, i will be pursuing him as he tries to

make his case and put pressure on those house members will perhaps vote tomorrow, override his veto. keep republicans on his side or this becomes law. charles: thank you very much. i want to bring in herb london from the policy research center. your reaction to the illinois budget battle. a lot of republicans say we have no choice and going with higher taxes. >> there is no reservoir for the pension payments, liabilities are far greater than the ability of illinois to address it. even if you raise taxes you are in the end going to look at the federal government to bail people out. look at new york, everywhere you look in the united states the influence of pensions is having a corrosive effect on budgets. there is no doubt we do not have the resources based on existing liabilities to pay off what is

necessary. charles: these are state pensions where the promises have been extraordinary, lavish, your ability to access them in an earlier age than most working people in america, just phenomenal. >> look what happened in michigan, detroit went to the courts, the courts had to decide, general obligation bonds and people who work for the government and were given a promise. what do you do in that case? they split the baby in half. in the end this is not a workable solution. these are not sustainable solutions. unless you have a reservoir capital for pensions we have to think about pension system in a different way in this country. charles: next one donald trump turning the heat on china, china pressuring north korea, he tweet theed trade between china and north korea grew 40% in the first quarter, so much for china working with us but we had to give it a try, meeting with chinese president xi jinping later this week. what do you think comes out of

that? i want to let the audience know that china and russia have a joint communiqué wagging their fingers, north korea and america saying if we weren't doing military exercises we wouldn't be provoking this hermit kingdom. >> that for the chinese, very upsetting, changes the correlation of forces in asia but the important thing, important development is the united states won a more robust system across the globe. we have to put as many resources as possible -- we have to find the resources to have an antimissile system on the west coast, we have to do more to put pressure on china including talking trade with china and we have got to do something with japan to encourage the japanese to modify article ix of their constitution so that they have nuclear weapons. of the japanese were to talk seriously about nuclear weapons

as a deterrent the chinese would jump into that negotiating table. charles: i always felt shin so they --shinzo abe was brought into -- the nation has neutered itself and their last grasp was to elevate this guy and they wanted of outrage, reports that canada will pay millions of dollars to a former gitmo detainee who admitted to fighting against american troops in afghanistan. get ready to be angry. more varney after this.

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>> the big board down 13 a moment to go down eight, anytime he gets close to the unchanged line it does seem to stumble. apple could be looking to do it with a fingerprint reader, testing 3-d face scanning to unlock their next generation of iphones. britain largest pay processor said it agreed, us credit tech firm, values almost $10 billion, supposed to be a bidding war but jpmorgan backed out. to north korea, successfully launching its first

intercontinental ballistic missile capable of reaching most of alaska. oliver north, host of war story joins us now. i have to ask you how should we be responding to this? they are getting better at this a a faster rate than anyone thought six month ago? >> the nuclear weapons and the icbms they have been testing don't have to be all that accurate. i heard one of the previous administration's talking heads yesterday on the radio saying they are not that accurate. if it is an emp burst it doesn't have to be. what you have seen happen is the last three tests have been a very high altitude, just exactly the right place you want to be for an electromagnetic pulse weapon. that is not necessarily a sign of a bad deal working for the north koreans. second, reality check. the obama administration for eight years ignored real

existential threats from both pyongyang and tehran, further proof that this utopian idea we unilaterally disarm everybody else is, let's put it politely, is not working. yesterday when they tested the weapon they did things they had never been able to do before and ought to put the fear of god into everybody in the neighborhood to include the japanese. one of your earlier guests suggests there is a diplomatic solution. let me and the idea we encourage the japanese to amend their constitution and start developing their own nuclear weapons. that is number one. never 2, let's have some real sanctions. the nuclear weapons and icbm programs with north korea and iran were joined at the hip for years and ever since the so-called vienna cord, the nuclear deal, improved

dramatically to transfer technology and money to north koreans where grass is truly a vegetable. china is not going to help until beijing feels the pain. before we do a conventional strike we ought to impose real sanctions against any company doing any business whatsoever with the people's republic of korea and iran. they stop doing what they are doing and that means real pain. we have the ability to turn north korea into an overdone pop tart if we want to use conventional weapons to do that. charles: let's hope that happens because outside of stopping coal shipments china has increased -- i do want to ask about canada. the story, paying a former gitmo detainee us$7 million as compensation for being mistreated. this is a man who pled guilty to

killing us army medic, he later recanted that but the whole idea is his rights were violated and canada feel obligated to not only pay him $7 million but to apologize as well. >> a socialist covenant is going to do some stupid things and they are our closest neighbors and biggest trading partners but that is a stupid idea. it is going to encourage others to make -- khalid sheikh mohammed, architect of the 9/11 attack, we are going to apologize to him? i hope not. charles: you were able to join us, thank you very much as usual. up next austria deploying troops and armored military vehicles to its borders. their goal to stop migrants from entering their country ahead of the g 20 summit. we are all over that, more varney after this. ♪

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session. look at microsoft, the company planning to announce thousands of layoffs and will switch their focus, their business focus to the cloud. amazon announcing it will create 1500 new full-time job that a fulfillment center in salt lake city. authorities will package items like books, toys and electronics. austria deploying four armored vehicles to its border with italy sending 750 soldiers blocking migrants entering the country. steve forbes, what is your reaction? >> of so-called freedom party which was a reaction to immigration, see the same thing in poland, same thing in britain, they are all saying to brussels, the european union, this has got to stop. we have to come up with a solution. when barack obama was president had he gone along with our

military and established a safe zone in syria this never would have happened. charles: north africa, particularly libya, orchestrate the removal of qaddafi, didn't have plan b. >> now it has become a huge smuggling business, people go to libya and take the rickety boats, often dying to go to italy and get in the eu. charles: what can be done about it now? >> why don't we establish a safe zone in syria again? here's a chance to go back home. we did it in iraq, the kurds in the 1990s. that is where hitler, stopped hitler from taking over austria in 1934, brenner pass, four years later, close allies. a little bit of history.

charles: you reclaimed the mantle. another one for you. frankfurt became the first german city where the natives are now the minority. more than half of city residents have a migrant background. what are your thoughts on that? >> this goes back to the 1960s when germany actively sought workers because they had labor shortages, primarily from turkey. a lot of the population is turkish. it goes to show the assumption angela merkel will have any the reelection this year, i am not so sure. there is a real reaction. charles: is there a cautionary thing? america hit its lowest birthrate ever last year. if you run out of people, you have to bring them in sometimes. isn't that a cautionary title? >> it is. if we get the economy moving our birthrates will go up. we have the highest in the developed world, we can have vatican. before thank you very much.

more varney after this. . . . .

charles: time for the favorite story today. liz. venezuela maduro in midst of 84 people dying, massive protests. he wants to rewrite constitution. he says you know what, population? i want to raise minimum wage. inflation is through the roof. will not help failure of socialism in venezuela. charles: you covered this better than anyone else what happens? liz: i do not know. neither do my sources. charles: ashley. >> volvo saying good-bye to the internal combustion an begin after 100 years. they're going to hybrid electric cars. owned by a chinese company we should point out. charles: steve? >> my two favorites. socialism failing in venezuela. with volvo i wouldn't be surprised to retreat.

internal combustion engine with realistic gas prices we do now, still is the king of the road. charles: believe me in this country king of the road. big trucks and suvs like the one my man neil cavuto drives. right, neil? neil: yeah. absolutely. you got me dead center on that one. charles, you think about electric engines, i don't know. i mean, i would at least hedge my bets a little, right? charles: i would also. listen, volvo, ashley is right, they're rolling the dice big time here. neil: i don't know. great two hours. three hours? how long was it? charles: i lost track. [laughter] neil: i will carry the baton here. thank you my friend. we have a lot going on with u.s. upping ante against north korea. they want a emergency meeting at u.n. security council. the question is, been there, done that, and nothing materialized. this time they promise things will be different.