found in north carolina. it was cut down last monday. look at this. we are down 385 points. big negatives are apple, leading down. facebook leading the market down. and trade turning kind of ugly. one bright spot is tesla, which is up seven bucks. time's up. connell, it's yours. connell: tesla and the christmas tree. welcome, everybody. we will take you through the next couple hours. i'm connell mcshane filling in for neil. multiple issues, certainly trade worries and apple. iphone demand concerns, that's what's helping to sink stocks in a fairly significant fashion to start the week. boeing and apple combined shaving more than 100 points off the dow. today, we are down 378 right now. that's a 1.5% decline. shares of apple are down. the reports about production of all three new iphone models

being cut, and we will start there, then get into trade as the hour goes on, and whether the iphone production cuts may be a sign of issues, wider issues, with the consumer. john lonski is here today and ben phillips also here in studio. welcome, guys. john, let's get your 30,000 foot view, first of all, on the economy and whether this apple story is more than just an apple story. what do you think? >> the economy is growing. however, it's growing at a slower pace and moreover with apple, with housing and with auto sales, we now see the consumer is resisting significant price increases. connell: it's more than just apple. >> i think it is, definitely. we are finding out right now some manifestation of what's called the containment of consumer inflation expectation. connell: that sounds like a complicated way of saying -- >> the fed has said this for a long period of time. what this means is if businesses

try to raise prices too much too quickly, consumers will not buy, real sales volumes will suffer and that's exactly what's happening with the iphone right now. connell: we saw it, i guess, to some extent in the home builder sentiment number we will talk about coming up as well. do you share john's overall concern that it's more about the american consumer than just apple individually and the issues they might be having? what do you think? >> i think we disagree a little in that the consumer is showing the first signs of strength in really a long time, where we saw acceleration in consumer spending and activity and things like that. we are thinking the consumer is a little stronger than john's view. on the phone side, what we have seen is the data, the average consumer's adding about a month each year to their ownership cycle so each year, they are owning them a month longer. we used to be getting a new phone every 18 months, maybe. now it's every a little more than two years. the ownership cycle -- connell: i was saying to you guys before we came on, a lot of us have that deal where you get the phone and you can get one

every year if you want. >> do you need that? connell: i never even thought about it this time around. my current phone is fine. i'm paying enough for it. maybe i don't need to upgrade. again, so you don't think there's a wider story here to be told about the american consumer -- >> i think it's more on apple, more on the high tech luxury items. the technology is good enough where you don't need to upgrade every other year. your phone is great. >> what we see with apple, housing and auto is there's a warning to businesses not to overestimate their pricing power. >> i agree with that. >> if they do, they will be stuck with a lot of unsold merchandise. they have to take into account, yeah, the unemployment rate is the lowest in 49 years, but there's 3.7% jobless rate today, it isn't the same 3.7% jobless rate of 1969, when consumer incomes in the aggregate are growing by more than 8%, 9% annually. today, they are growing by about 5%. consumers simply don't have the type of purchasing power that in the past was associated with a

3.7% unemployment rate. connell: the group that takes that warning to heart is the federal reserve, to some extent. it's looking at the market being down as much as it is and watching some of the signs john is talking about and maybe, maybe you get a less aggressive federal reserve next year. >> the fed chairman powell actually said for the first time, he's shown a little dovishness. he's a hawk, we know that. he's more hawkish than yellen and probably more hawkish than he leads on publicly. this is the first time he's acknowledging some economic weakness. that's an important public statement from him. connell: wonder what the market is pricing in in terms of the federal reserve now, assuming he will stay as hawkish as he has been or starting to have second thoughts and hope that the interest rate increases won't be as aggressive next year. >> i want to hear john's point, too, but the shth market is pri in another hike in december and three or four next year. the odds have fallen on four hikes next year. connell: here's a quick headline as we are doing this for people. we have been watching this for

awhile. apple's stock price just dipped in for a second to what we would consider to be bear market territory, 20% drop off of closing high from where it was. you see it on the screen, down about 20% from its high, $185.94 is where it is. $185.65 was the quote unquote, magic number or i guess it's not magical for shareholders but that tells the wider story. let's get back to the federal reserve. >> they get a rate hike in december, that's a done deal, no more than two next year. by the middle of next year, i think the fed is finished hiking rates for the time being. i would also expect that we are going to be looking at a lower ten-year treasury yield one year from now, compared to today, just over 3%. don't be surprised if the ten-year treasury yield finishes the year at less than 3% here in 2018. connell: let's talk about trade for a little bit. i wonder how all that plays into it. they had this asia-pacific summit over the weekend and as they say, apparently things didn't go so well.

i don't know that we expected them to, but nothing much came out of it. they couldn't agree on a communique. to your point on the federal reserve, if trade continues to be a headwind, in other words, no big deal cut at g-20, that makes it more likely the federal reserve would -- >> because of these trade problems, we have the equity markets sink by another 5%, 10% by december 19th. i'm not saying it's going to happen but that could even prevent the fed from hiking -- connell: i don't know what to root for here. i'm sure most people in the market want to see a deal cut on trade but it almost makes it more likely to have an accommodative federal reserve if there's no deal. tariffs are a type of tax hike. basically you have a tightening of fiscal policy, not a very good idea to also have a tightening of monetary policy at the same time. >> no. you wouldn't think. what's priced into the market in terms of this whole g-20 thing? >> i think we are starting to price in there's nothing coming

out of g-20. hopefully that the summit with pence potentially meeting vice premier next week, there was going to be something to come out of g-20. i think the markets are telling you this is unlikely to happen, to see anything positive. connell: last week we were thinking or hoping for the -- >> we were hoping, too. at this point it looks like the market is saying we don't think much is going to happen there. that's a real risk. the real risk is if global trade escalates and we start seeing a breakdown in supply chains. we are seeing early signs of that now. connell: apple hitting bear market territory. >> it would have to be part of that. we have seen suppliers cut their forecasts one after the other. to me, that is, yeah, that's apple but those suppliers make products for other companies as well. >> that's true. in all likelihood, they may be going higher because of tariffs or lack of abscesses ccess to n inputs, creating more uncertainty regarding earnings and the equity market reflects that. connell: some people come up and

say, what you hear from companies and people you speak to, we haven't really seen it yet, the trade war. but the preparation we have seen from companies, knowing what next year will be like, getting out ahead of it, changing their shipment schedules and the like. even if the prices haven't been impacted directly, companies know what's coming. >> yeah. you can't really plan ahead with any reasonable degree of certainty. you will have less in terms of capital spending and you will hire fewer people. connell: i would think the president and, well, we talked about the federal reserve already but i would think the president and the administration, negotiators, i understand there's kind of a civil war brewing inside the white house we reported on for some time, kind of kudlow versus navarro and there are others on each side of it, you would think they see now a stock market down 473 points today, well off its high, apple in bear market territory, they know all that going into g20 so there has to be some chance the president cuts some sort of a deal just to make it look like there's progress.

>> more for optics versus actual substance. i think trump is looking at the market and always has as a report card. i think he's still up a lot since he's been elected. connell: which he reminds us. >> he has a little dry powder and a little wiggle room there. if you look at how we are approaching china on foreign policy -- connell: he made that speech october 4th. >> it wasn't picked up very widely. it was very powerful. connell: it was in china. >> they made aggressive statements, more than we have seen from any u.s. administration towards china. connell: what i heard from the chinese side of it, they looked at that speech and said wait a minute, they are serious about this and that threw them off a little bit. i don't know what it's worth. how much do you think the president, because he does remind us when the market's on the way up, how much credit he should get for it, but he knows that he pays politically for a market on its way down. >> definitely. you have a deep enough slide by the equity market that begins to threaten the adequacy of systemic liquidity, that's access to funds, you will have

policy makers reacting in a hurry. you will also see policy makers take a different approach towards monetary policy. connell: don't you think -- it doesn't even have to be a big deal with china at g20, something that shows progress, some little portion of it would be enough to kind of give wall street what it wants or buy some time. >> exactly. something that saves face. connell: that's the chinese kind of saying for all this. i was saying this last week. we need a little of that ourselves. the president probably realizes that. he talks about the chinese saving face but what about the administration saving face? >> we are a little too far down that rabbit hole at this point, that there's much face saving that will occur on both sides. we need some progress in order for the market to get confident. connell: you can't forget we are their biggest customer. we all know the customer is always right. we will end it on that note. thanks for coming in. good stuff on both sides.

we are down 420 or thereabouts. 418 on the dow. let's talk about oil. we will get into that, to that in just a moment. we talked about stocks falling but the oil price over the last few weeks has been a big story as well. it's now at $56.20 a barrel, wondering what opec's next move will be. we will talk about that and more as we continue.

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connell: not a great way to start the week as we monitor the markets. the dow is down 419. look at the market scan. boeing, $13 lower. 3m, right next to united technologies there, down four bucks. at the bottom left, caterpillar down $3. that's all trade related. while we look at those type of stocks we were just talking about trade and we see it along with apple certainly weighing on the markets today. there has been a debate over republicans, what they can do with trade, now that the house is lost. let's talk about the political element here with washington free beacon senior writer liz harrington. liz, we were talking a minute ago about how closely we watch markets, it's basically our job, but we were wondering how much washington is watching, the white house and the congress, and saying well, we better get some sort of deal, we better get something done here on trade before this thing gets really

ugly, as if it hasn't already. what's your take? >> i think everyone is concerned and looking forward to the g20 at the end of the month to see if president trump can get the chinese president xi on board with some sort of the beginning workings of a deal, because we really don't want to see, nobody wants to see these tariffs increase in january. they are going to go from 10% to 25%. i think everyone is working towards that. now you have a lame duck house, republicans in the house, so i don't know how much they will be able to get done, but they need to wait to see what happens at the g20. connell: one of the things that will come up after that is this whole changing political dynamic, to your point. once we get back, g20 will be over, something or nothing will come out of it, and the house will be in democratic hands but it's not clear exactly what that means for trade as a big economic issue. philosophically, you would think some of these democrats are probably more in line than some of the traditional republicans with the president on trade, but

i don't know. i don't know if they are able to kind of give in to him and kind of give him these victories and side with him, or they will be more likely to oppose him for opposition's sake. >> right. i think that is very likely but you raise a good point, because trump got a lot of voters on the trade issue that were supporting bernie sanders and actually, he's had a lot more opposition within his own party rather than democrats on the issue of trade. but look, this is a campaign promise that president trump made to be tough on china. china has been the target all along, because they have been promising to open up their markets since 2000 and meanwhile our trade deficit has grown from $87 billion to over $300 billion today. so president trump has promised to be tough on this. vice president pence had some very strong language over the weekend. i think they will try this tactic because it did work for them with canada. they got canada on board with

the u.s. mexico trade agreement after very tough language. we will see what happens with president trump. connell: anything could happen. we will see what happens. you never know, that type of stuff. we're all talking that way now. but yeah, we will see what happens and if they don't give in, though, you are in an interesting situation politically if you are the democrats because if the market keeps going down, the economy looks like it's taking a hit because of all these things, even if you were inclined to be more protectionist or at least be in line with the president's hard stance on trade, maybe say you're on your own with this. i don't want to be aligned with something that's hurting the economy. that will be also something we have to see what happens. >> exactly. president trump is very attuned to the market as well. i think if it's more than he's willing to risk with no deal in sight, then he will probably have to change course. but for the time being, i think they still have enough time to try to get a deal with the g20 and before the end of the year. connell: let me ask you about

politics before i let you go. we have so much focus on florida. now it's decided so we kind of know where we stand there. governor's race and senate race, both going to the republicans, and the president talks a lot about the senate. understandably so. the republicans won in the senate. the advantage looks like it will be 53-47 there. the one kind of unknown right now is this mississippi runoff on the 27th of november. is that worth watching or you think it's even with the controversy, even with the attention, still in there for the republicans, 53-47 will be the split? >> sure, yeah, i don't think republicans are taking it for granted. however, the mainstream media is really pushing this to be in play. they are very excited. they are trying to make this candidate, the republican candidate, out to be a racist which is one of their favorite plays in the playbook, but i really don't think it's a situation like we saw in alabama, which the candidate was accused of molesting teenagers, so this is not really that

situation. democrats have not won more than 45% of the vote in mississippi, they have only done it once in more than a decade and that was 2008 when barack obama was on the ticket for the first time, you had record turnout and they still didn't win that race but they did crack 45%. i don't think there's enough votes there for turnout, especially when it's going to be a low turnout race, only a few days after thanksgiving. connell: we are headed 53-47 with the democrats adding maybe close to 40 seats in the house. we will see how it shakes out. good to see you. thanks for coming on. apple, the ceo, we talked about the stock and how much it's falling but the ceo tim cook made interesting comments over the weekend, saying the free market failed. hear his way of fixing that as we continue. apple, $186.54. just dipped into bear market territory today, down 20%. we are all over this all day long. join us 4:00 for "after the bell." melissa and i will be following all of this. see where apple closes, see how this market closes. down 410 on the dow.

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welcome back. i'm susan li at the floor of the new york stock exchange. the dow down almost 400 points. home builders in focus today, also losing ground. let's track the small caps, skyline, mi homes and top build as well. home builder call finance lowest in two years. the problem in the housing market, higher mortgage rates, also higher home prices which is hurting consumer confidence

buying these expensive items. lennar, kb homes, also expecting lower sales in 2019 as well. goldman sachs also predicting five more interest rate increases so they don't see any more relief at least when it comes to higher mortgage rates that impact home buying in the future. that's going to trickle down into the u.s. economy. housing accounts for a fifth of the u.s. economy and basically goldman sachs expects a slowdown from 3.5% in 2018 to 1.75%. that should impact them. connell, back to you. connell: that was a much more aggressive call from goldman than john lonski from moody's. susan, thank you. the nasdaq, well, tech stocks in general getting hammered. the nasdaq down well over 2%, almost 2.7%. apple is helping to drag down the nasdaq and the dow. we talked earlier about the stock price decline for apple but the other thing that's kind of in the background here, the

fear or the concern about regulations heading into the new year. apple's ceo tim cook with some interesting comments over the weekend in an interview about that, says the free market is not necessarily working. here he is. >> generally speaking, i am not a big fan of regulation, i'm a big believer in the free market. but we have to admit when the free market's not working, and it hasn't worked here, and i think it's inevitable that there will be some level of regulation. connell: that was an interview with axios on hbo. the axios technology reporter david mccabe is with us, also joined by lindsay bell, cfra research investment strategist. welcome to you both. david, why don't you give us a little context and perspective, if you can, on those comments from tim cook. it's significant when you hear somebody like tim cook say the free market isn't working. >> as he said in the interview

with my colleague, tim cook made those comments and in fact, apple has been staking out this position for a little bit, this sort of we are different from google and facebook, we're not using your data so we are okay with regulation and we actually think regulation might be needed to rein in those companies. in that same interview, my colleague made a really good point to tim cook. she said well, yes, you say this about google, about facebook, but you take a lot of money from google to make it the default search engine on the iphone, on the mac, and his response was essentially well, we try and mitigate it. i think that gets at how complicated this conversation about privacy and regulations are even for companies that said yes, this should happen. connell: he said that but first he said they make the best search engine. >> exactly. connell: that was kind of interesting as well. lindsay, to the point david's getting at, if you are tim cook and you are apple, it's easy i guess to call for more

regulation amid regulation on data collection and privacy, when it would hurt facebook or google but wouldn't necessarily do harm to apple. easy to call for that if you're tim cook. >> absolutely. much easier if you are tim cook than say mark zuckerberg, right? so i think, look, regulation, it's already, europe is really pushing for regulation on these companies, google, facebook, and the democrats here are really pushing for more regulation. it's a matter of time before regulation gets put into place. the big question is, what is it going to look like, how impactful will it be for these companies. it seems to be there does need to be some sort of regulation, but to the extent that we can have as little regulation as possible, i think is important. connell: that's always what business is rooting for. david, the people you are speaking to, what's something we cannot count on, but sort of start to anticipate for next year, from the point of view of regulation of big tech? >> yeah. i think the big question is

whether or not the regulation will be enough for democrats to say yes, we can preempt state regulation, particularly in california, which has sort of led the way. preemption is the battle to watch. that's sort of the red line. i know in some cases law makers left that out, saying we don't want to touch that. then i think we get to a bunch of other battles like should it apply across the internet, not just to google and facebook but to brick and mortar stores and internet service providers, and questions about whether or not, what kind of constitutes sensitive data, you might need to opt into the collection of. at the end of the day you will keep coming back to will they or won't they preempt california before those laws go into effect in 2020. connell: very, very interesting point, the idea of federal versus state regulation. we are down 423 on the dow. let me make a final point about apple's share price. we are looking at it, up 10% year-to-date, down almost 15% this month. as we told you a few minutes ago, apple entered what we would

consider bear market territory, off more than 20% from a closing high and it's in the news, not necessarily because of the regulation but because of these disruptions in its supply chain and the suppliers cutting their forecast. what do you make of the apple share price decline? >> yeah, we think that the share price decline for apple really has been overdone. look, the supply chain issue is definitely a concern because usually when there are issues with the supply chain, you don't hear about it until january. so this is very early to be hearing about it and the weaknesses early on doesn't bode well for the rest of the cycle for certain, and the big question really is the weakness has been in the xr, which is the lower priced phone. if you're not having users of the iphone upgrade at the low end price, the question is who is going to upgrade next year when they continue to want to raise prices. we do think that their exposure to services, their exposure to some of the, you know, higher

priced end phones do help margins, but the question is, where's the low end of the market going to go. connell: apple is $186. you're saying apple, to be clear, is a buy at $186? >> we do like it. look, it's trading at 13.8 times, that's very cheap on a historical basis. if you look at the amount of cash they have on the balance sheet. they are going to buy a quarter of their shares back every year for the next three years so they are putting a basin in this stock. the margins are expanding and apple has always figured out issues like this in the past. connell: always good to see you. thanks for coming on. david, thanks for coming on again. good to see you. another big story today is nissan. boy, carlos ghosn arrested. this is a big name in the auto industry for many, many years, about to be ousted from the company. we will have the latest on the charges that he is facing as we continue. then we will continue talking about tech as it gets absolutely hammered today.

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banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. connell: all right. back to the market selloff in just a moment, but another big story today involves the nissan chairman carlos ghosn ousted and arrested. you never want to see those two words next to your name if you're chairman of a company. hillary vaughn on the story. what happened to carlos ghosn? reporter: this follows an internal investigation at nissan that exposed several years of misconduct by ghosn. nissan says ghosn has been using company assets for personal use, also misusing company investments and also, he underreported his salary for several years by about $44 million u.s. nissan saying in a statement they have been actually working

with japanese authorities to take down their own chairman, confirming the cooperation in a statement saying quote, nissan has been providing information to the japanese public prosecutor's office and has been fully cooperating with their investigation. we will continue to do so. we will continue our work to identify our governance and compliance issues and to take appropriate measures. in a press conference, nissan's ceo says ghosn is a mastermind who had quote, a long regime at the company and says this corruption is in part caused by a corporate structure that gave so much power to one person. >> we need to really look back on what happened seriously and take immediate and fundamental countermeasures to solve this. these are the things that we have to do. i feel despair and indignation or resentment. reporter: the partnership between renault, nissan and

mitsubishi will not be affected. the three will work together to minimize confusion between them. they also have to correct their securities report that the company published due to incorrect disclosures by ghosn, and also, any three of these offenses by their chairman would be enough to dismiss him from the board, making it clear that this dismissal was not a reaction to the arrest. that's something that he will have to face separately, but that's probably not the only legal trouble ahead for him. the nissan ceo said in the press room today that he was not ready to rule out whether nissan would actually file a lawsuit against ghosn for some of the damages that the shareholders are incurring because of all of this fraud. connell? connell: wow. just imagining being in a world where you can underreport your salary by $44 million, first of all. boy. that's a big name in the auto industry. hillary, thanks, on carlos ghosn. as we continue on this market selloff today, we are down off the lows actually a little bit, still down 399

points on the dow jones industrial average. we talked about the uncertainty we see over trade but don't forget, brexit and the uncertainty in the uk. theresa may fighting to keep her job. she's told critics getting rid of her won't make delivering brexit any easier. analysis on this now, former british parliament member john brown. all right, john, always good to see you. this no confidence vote we keep hearing about, i guess they need 48 votes and it's unclear if they are going to get to 48. what do you think happens? >> you are quite right, 48 votes would trigger a vote of no confidence within the party, not within the parliament, which would mean a general election, but just within the party, so that they could change leaders and therefore, prime minister. people are very upset, because prime minister theresa may has negotiated in secret a deal which is greatly beneficial to

big corporate interests, but totally against the interests of the british people in general, and totally betrayed the brexit referendum. she's now going around making misleading statements to cover it like saying it's in the interest, big business wants it but of course, big business is a small percentage of the businesses of britain, of the small businesses which employ 60% of the working people in the country. also, she makes weasel words like of course, britain will still have laws, regulations and its borders. she forgets to mention those will be laws, regulations and open borders of the euro-soviet so people are very upset, even some of the remainos are upset because we will end up being in the european union in name and regulations and laws and overrule, but no seat on the board. this is desperate, it's desperate. this is britain's last chance of

a peaceful exit from the euro-soviet by peaceful means. i don't hope -- connell: either way, the uk is getting out of the european union. to your point, if there's no deal in place, it would be you're out, but you're trying to be still part of europe. i guess that's where people like you are not happy with her. now, the other side of it, if you look at markets, we are selling off a lot today not necessarily because of this, but in general, if you're not giving in or catering to the interests of big business, don't you risk a larger financial market impact and how do you kind of balance the two if you're britain here? >> well, in britain's case, the main interests of the people who have expressed their absolute definite view to get out of being betrayed, big business of course is important, but the people you are talking politics, not just big business, and this is the problem of favoring just big business over the people.

that's why people are so angry. connell: i guess what i'm asking is if you do that, if it is a hard brexit or you do kind of break a little bit harder than maybe theresa may wants, is there risk to that, that the people who voted for it may end up being the people who suffer in an economy that doesn't do as well? >> well, you are absolutely right, people will suffer tremendously. they are already suffering and it's being hidden by increasing debt of being members of the euro-soviet. for example, trade deals that britain negotiates have to be within the european soviet so they favor french and german business. they do not favor financial industries like britain. so out of the european union, britain will be free to negotiate her own deals with the rest of the world. that's -- connell: they will be better off economically out. >> absolutely. absolutely. and without the huge cost.

we are the second largest payer into the european union and they want to fine us $40 billion, $50 billion to get out. it's a disgrace. connell: what do you think will happen? >> people will be much better off. connell: what do you think happens? >> what do i think will happen or has happened? connell: not what do you want to happen, but what do you think will happen? what is the end game? what does brexit look like? what's your best analysis, knowing all the players, how does it actually end? >> my fear, when you tell me there are less than 48 votes here, is that the british members of parliament will not have either the integrity or the courage to vote down prime minister may as prime minister, that britain will be sucked into the euro-soviet and they will suffer. i say again, this is the last peaceful opportunity to leave or to get free, break free of the euro-soviet on a peaceful basis. so if we do get out eventually, there will be blood on the

streets and that is so sad, on the 100th anniversary of the end of the first world war, where we voted for freedom. connell: i suspect this whole euro-soviet thing is another word for european union but i'm following with you. >> well, yes, because it has its own politburo, the commission which is appointed, not elected, has a parliament which is elected but doesn't give the parliament any power and therefore, is exactly what happened in the soviet union. connell: i followed you. i was following along. good to see you, john brown. we never have to question where john stands on an issue. let's get back to our markets here. we have come off the lows but boeing has, if anything, extended its losses and is now down 4.6%, so $15 drop in boeing, that's one of the big reasons the dow is still lower by 385 points. we'll be right back.

connell: let's get to california. flames from the wildfires destroying more than 10,500 homes so far. 80 people have died, nearly 1,000 missing. fox news correspondent jonathan hunt in malibu now with the latest. jonathan? reporter: connell, good morning to you. let's start up north, where the

camp fire obviously is the most devastating and deadly in california state history. there is a grim search going on there now through what remains, and it is very little, of the town of paradise, where almost every home and structure was destroyed. searchers going house by house, looking through the ashes, trying to find any human remains. that is because almost 1,000 people still remain unaccounted for there, and before the predicted rains come in the next 24 to 36 hours, they want to search every structure they can, because with everything reduced to ash, those human remains could literally be swept away if the rains do indeed come sometime this week. there was also a vigil near the town of paradise last night for those who have survived and are

now left homeless, many of them sharing stories of their miraculous escapes. coming down here to the south, a lot of people are being allowed back into malibu now, where the woolsey fire was so devastating, destroying hundreds of structures, but so many people are going to come back to find a scene like this, a beautiful family home on a bluff above the pacific ocean, very little left of it, as you can see. clearly, connell, in these circumstances, it is going to be anything but a happy thanksgiving for so many people in north and southern california. connell? connell: to put it mildly. thank you for your reporting. all right. we will shift gears now. charlie gasparino is here in studio. couple of things. number one, president trump saying that he would help nancy pelosi become speaker. all this as maxine waters looks to take the reins of the house

financial services committee and maybe go after the banks. so let me start with the maxine waters stories that are out there. axios had one. there are others being written. you are on top of this. >> you kind of started this and i remember before the election you were saying maybe they could have a constructive relationship with maxine waters. here's the thing. i think she's going to want certain things out of the banks, campaign contributions, stuff that helps her community. it's a lower income community in los angeles. so that is clearly going to be the focus and i think the banks will, you know, you would see i guess better cra compliance. that's the sort of stuff that i think she would want out of them. but she will do some investigations and i think the investigations will not be broad stroke, unless she finds some massive sort of fraud or problems in banks not lending to minority communities.

i think where she's going to go with this, because remember, she doesn't have a lot of power, she has investigative power, she has almost no power to regulate. connell: that's the federal reserve. >> it would be to look at essentially two banks, i think wells fargo, i understand from people close to her, are under the gun for obvious reasons. california banks, she thinks they have a lousy record in the community out there. i think they will come under pressure. they have been in the news for a lot of reasons, including the big scandal a couple years ago involving the fake accounts. the other will be deutche bank, because it was donald trump's bank. connell: that's the issue. there are stories about how she's going to go after foreign banks but it's really a deutche bank story because of trump. >> the foreign banks were in the context of money laundering and things like that. remember, there is a belief among democratic lawmakers that donald trump used, i'm not saying it's true, used deutche bank -- connell: can you tell us the

back story? was that the time he couldn't get a loan or couldn't borrow money from most other banks? >> donald trump the businessman, he morphed into -- he went from a real estate guy to a casino owner. it's in the casinos where he got a lot of trouble, the casinos went bankrupt. he didn't personally go bankrupt, because he changed the ownership structure of it, but those loans, he stiffed a lot of banks. all the major banks, on those loans. he was essentially persona non grata in the new york money center bank world. where did he go? he developed a relationship with deutche bank. connell: went to germany. >> one of the people he developed a relationship was the son of the retired supreme court justice. connell: kennedy? >> anthony kennedy's son. connell: is that right? >> was the guy he had the direct relationship with. connell: he worked at deutche. >> that was his bank of preference. now, there's always been suspicion among the democrats that deutche bank was involved

in some shady dealings between trump and russia. connell: no proof of anything? >> we haven't seen it yet. they are clearly going to go there. adam schiff is running judiciary. connell: good job getting his name right. the tweet over the weekend. >> i heard about that. jerry nadler, judiciary. adam schiff, intelligence. maxine waters at finance. elijah cummings in government reform and oversight. those are the places where i think particularly maxine waters, you will see the trump/deutche bank relationship fully vetted. now -- or investigated. i think that's where she will get into the global thing. i do not think, who knows, i mean, maybe she has some broad hatred for jamie dimon. i don't think jpmorgan is coming under -- is going to come under that much scrutiny. connell: we will go, less than a minute, but on trump being so kind in his tweeting towards

nancy pelosi, your take on that? just trolling around? >> maybe he's worried about the alternative. i'm really waiting for him to pardon the turkeys and make everybody eat kentucky fried chicken. connell: i'm not even going to ask. here we go. >> we will eat kfc. connell: my mistake. we will wrap this up here. instead of saying we are going to wrap this up, i should have said we are wrapping this up. >> you think he will pardon the turkeys and make everybody eat kfc? come on. i'm asking a question. connell: nothing wrong with kfc. >> that's a yes. connell: never mind. we'll be back in just a moment. in the middle of all this, the dow off 417 points. apple off by a ton, down $7 more, on everything that's going on, how it relates to trade, when we come back.

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connell: we are back here on cavuto coast to coast very big test driving the markets down 395 points. apple tipping the bear market territory earlier in the session cutting production orders on all three of the new iphone models. the stock at 18617, nearly 20% off the closing high. more than 20% off the high a little bit earlier. we'll try to put this all together. anything trade related is down. start with wealth advisor in gerri willis for the thought business network on the apple story.

rebecca, i'll go to you first heard the story be an apple related, which is one thing and we cannot handle that and i would be a big issue. but a wider story could possibly be being told about the american consumer and weakness in the holiday season in 2019. which is to do your thing? >> i think i'll have a great holiday season. as you know, we always represent a big holiday season and i do know the tax cuts may be waning lately. at least some indication of that. i also think consumer confidence is still really high. unemployment is low, wages are rising. overall we're going to have a $1 trillion holiday shopping season. treaty which would be good if not the glass half full version of it. reduce the weakness in other areas related to retail. the numbers were great last week for different reasons. home depot, jcpenney, macy's and a bunch of retailers out this week the people seem concerned about. we might jcpenney we really expecting great numbers?

this is a company that can't find his way out of the bottom to the pics but retailers are still struggling with online sales. apple here too because everybody's worried about apple. how is this quarter going to go for them? he has to realize that peaked four years ago. this is a story that's been a long time in the making. just because apple has found the ceiling for the prices on handsets, that doesn't mean it's going to be a lousy christmas season. connell: that's the issue, rebecca, all of us don't want to be paid year to year a thousand dollars profound and maybe they've got to make some adjustments. >> yeah, what they did is they went from two phones every year to three. and then they increase their price. while apple can obviously deal with profit margins by going to service revenue in e-commerce sales that they have, their suppliers can. suppliers at the tight margins they have, and they are relying on building volume to actually

have a profit. that's why you see the problem with suppliers saying this is a big problem for us. i think she's 100% right. we are getting to a price point and a lot of competition now. there's so much more competition than they've ever had before a think. we had a 2015 peak sales obviously for the phone. connell: let me ask you one more question. you brought up the suppliers in many of them one after the other, some of them small companies, some of them little bit bigger. i understand that topol related. they don't break it out in terms of how much is apple, how much is other companies and you could say many suppliers have other customers and if they're cutting their forecaster might tell us there's weakness for some of those other customers, but it's not just apple. >> i think that is partially true. let's look at the iphone next. apple cut the production requirements for the first three months of 2018 by 30 million units. we know apple is brought out new

products and has over forecasted the last couple years and had to go back and say i'm sorry. a big risk for suppliers. you're right they offer other products. when you've got been making 75% of apple and cutting their earnings quarters and talks are going down you know if someone apple related for sure. connell: you guys are definitely positive. not that i'm looking to rain on any parades. you guys are right in the holiday season goes pretty well and maybe people are overreacting now about the state of the consumer. i would think having the federal keep raising rates and say it's a pretty strong economy. it's almost like you don't know what to root for. some of the market wouldn't mind now. >> that's an open question. when not positive about his apple at this moment because last year 36% of all handset sales were in the holiday quarter is. that's a very big portion. that is not good news. a lot of people are like trade

is going to hurt holiday, christmas tales. those prices were locked in last summer. they will make plans to buy their holiday stock. months and months in advance. if there were big price increases, they would've seen it already. i think that a lot of this is sort of overdone. the real concern should be about apple and whether they can continue to raise prices on what is essentially a monetized product. connell: true. if you're right about trade doesn't take on questions about 2019. if you have the issue settled for this holiday season people getting out ahead of it and it's a question of what they're getting out. we appreciate it. speaking of trade, vice president mike pence about to brief the president here at a lunch they are having today on the talks over the weekend at this apec summit which most of the reports we received it necessarily go to well. in your china planning to

propose changes to the wto, world trade organization putting it all together for us everyone at the white house. reporter: let's start with the wto news. the u.s. oblivion reforms for the wto to crack down on china related to their state-sponsored dumping of steel and other items close the forced transfer of technology from firms. now china say they will propose their own reforms of the wto. china going forward at a luncheon in paris adding that they would not be in what they call, quote, put in a straitjacket by these reforms are the wto. in 45 minutes at the white house, vice president mike pence will meet donald trump for a working lunch. the vice president talking about china again on the agenda appeared his fresh off his trip. the asia-pacific economic cooperation summit. the vice president was there with president xi, the president

of china. they could not come up with a consensus because of the positions of the united states and china over trade. china saying that their statement is coming out saying, quote, it seems like the u.s. attended this apec meeting with great anger. ditto for my cause controversy, created discord, spoil the atmosphere of the meeting and did not contribute to achieving the consensus here the vice president delivered a message basically telling the chinese they cannot take advantage of the u.s. or other countries for their unfair trading practices. the white house advisor kellyanne conway says the president will not back down. >> i don't know why people don't take him seriously because he obviously went ahead and put the tariffs on and things that we should not have a $100 billion trade deficit with china. trade to the vice president told the leaders at the summit that

the u.s. would not back down or change course on this position of tariffs and whatnot in order to level the trade playing field with china. connell: kind of funny how they're having all this attention on the chinese and other countries not been able to come to a consensus. they couldn't even come to a consensus among themselves more or less working with the other countries and they didn't put out in a statement before they left. >> in addition to that, and they were actually watching what the u.s. is doing related to this because they would like to follow this format to stop stealing information from their countries there. although not local, watching this process. >> is interesting. we'll get ourselves find out before we worry about everybody else. edward, thank you tiered edward moran said the white house. will these trade tensions lead to higher prices? something were talking about with jerry a moment ago in the holiday season.

former consultant to the u.s. trade representative. good to see you, sir. gerri willis was singing maybe we don't see that. we don't see prices go up this holiday season. i was making the point that you might be right but that doesn't mean we don't see some of this working its way into the future because a lot of companies have tried to get out ahead of the trade tensions knowing kind of what is going on. what is your view on that? >> well, i think you're both right. the prices were baked in this holiday season certainly. if you're looking ahead, the investors have a plan for what it's going to happen next year. what is looming over them is whether or not the administration will actually -- already put tariffs on $207 billion of u.s.-china trade and is directing if there's not some accommodation between now in the first of january to put tariffs on another up to 250 billion tradition of the president can do this in incremental terms. but that is certainly sent and

to factor into their decisions about next year. entirely dependent also on what dr. you're in, how much are dependent on parts of the component. apple has a discussion i was listening to about apple, you need to keep in mind the apple supply chain has been protected so far by both the united states and china. hard to know how that'll play out after january 1. connell: that's right. they've been exempt from all this. i have the whole idea of putting onto something on my mind because of chris wallace's big exchange of the president over the weekend in their interview. do you come question would be what i was would you put on the january 1 threaten tariffs going into place, knowing everything we know or don't know now had a g20. >> well come a footnote for everything were going to say and starts with at the top. one never knows day-to-day or

our tower. at the moment and certainly the events he discussed a few minutes ago at the apec meeting, the administration number one does need to have attacked together. and i think they are united as somebody mentioned, your reporter mentioned they couldn't put a statement out a month ago in china. i think there's general agreement, certainly it looks as if that the case which had to have been cleared by the white house was a strong signal in that direction that they are going to go forward if it's not some sort of accommodation with china or the signal of china in the g20 meeting coming up in two weeks or in discussions below that level that they will accommodate the united dates and some of its demands. i don't see that happening, but we are into the shoot of at least some tariffs. as i say, and it doesn't have to do this all in one fell swoop is a word. it could do this incrementally

with 10% and 25% and pick and choose. the chinese can do the same thing in retaliation. connell: how close it using both sides is watching how the financial markets work into this. almost a resume of a question of the federal reserve is the fed chairman watching to see how the markets are being. many stocks apple went to bear market territory. other stocks that boeing and others are related to trade under pressure. if that continues close to that point of january 1, how much of that affects the president thinking? >> i think it does in the margin. it's going to affect his thinking as you get closer and closer to 2020. everything now is going to be pointing to the fall of 2020. he's asking questions about people in the fed were to the

treasury or whoever. you know, what is the impact of what i'm doing on trade, on the economy and in general is the economy moving to slow down or is this the kind of paused. the stock market doesn't always reflect what's happening in the broader economy appeared at the kind of balancing act i would guess right now. as i say, the president's focus is going to be -- already is on the election. >> right now his focus is on a christmas tree but i hear what you're saying. thank you for coming on with us. given the horse a little tap there. he and the first lady welcoming the christmas tree to the white house. nothing trade related here. i think it's from north carolina. certainly not from china. we'll be right back. liberty mutual accident forgiveness

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connell: investors deal with all kinds of uncertainty in the dow but for 52 right now. white house uncertainty which president trump has responded to report that the white house shakeup they've been in the works. if you saw the interview with chris wallace over the weekend,

wall street editor john busey is with us here today on how likely that is and who goes. interesting to see the back-and-forth between president trump and chris wallace. he always seems his options open about who might care who might go. i didn't that would give anyone a big vote of confidence. what do you think happens? >> chris pressed him on this issue. i like him. we get along. that in one way, not so good in others. that suggests he's looking for a change. >> what he was talking about his weaknesses, what do you think they are? >> is looking into 2020. the structure of the white house's ear towards mobilization for the 2020 election in the long-time criticism of john kelly was brought in to basically make the place organized. this is the chief of staff to

operate like a chief of staff. we are going to prioritize that the president has to see an organized and he apparently did that. does he have the political chops to say to the president, this is the way you should go with maximizing political impact with congress or with the public. the white house chief of staff in the past they do have those, have run campaigns afterwards and are those types of figures. use the military guy. you don't rise in the military as high as he did without having diplomatic skills that may not be the political instincts the president wants. maybe now but donald trump feels like he needs right now. but you see other kind of this episodic change elsewhere the deputy head of the nsa, national security council john bolton

deputy gets ousted by the first lady. which is incredibly unusual and the president kind of follow suit and i don't know her, but time for another job in the administration. we've seen the removal of a lot of very tough people from secretary of state, trade advisor council. so can he get his mission done before 2020. the thing is certain his priority list with that kind of constant uncertainty. jeff sessions complaining about ahead of the homeland security, neil said may be going as well, who's aligned with john kelly. can you focus on your priorities with this amount of personnel change in the white house? we will see that it's kind of hard. connell: for our purposes today in just about every day on sbm has something to do with trade. if you're the president seems to me at least one of the ways to set yourself a better for reelection in 2020 is to cut a deal.

it would help the financial markets, get uncertainty out of the economy and maybe be able to avoid a recession hit in a just a worse time yourself politically. no wonder he's thinking that way. >> big ticket item particularly changing the way china does business, which has been interestingly kind of a non-denominational both parties kind of agreeing that china cannot continue to operate the way does the global trading system. but this structural change that the white house wants in china. everything from changing the way the state owned enterprises operate and are subsidized to forcing technology to china, is china really going to change knowing that it's a possibility this may be a new president. connell: is the answer is no, what would make them change of terrorists aren't the answer? >> operably in the long haul something like sitting down and negotiating over hard-fought

treaties. maybe it's the next generation of tpp, maybe the next generation of bilateral investment. connell: somebody said you should have done a tpp because the whole idea behind the transpacific partnership is to get all the other countries against china appear the president didn't do that and i don't see a scenario where he says i was wrong about that. let's get into this whole tpp deal. >> said the tpp was really orchestrated with china and mine. was not going to be part of it, but all the rules about state owned enterprises and go up against general electric and are able to outbid them and projects come you can't do that anymore. if china wanted to enter was going to have to abide by the treaty. by the way come you could rename it. it could have some other name on it and claim credit for it. >> he could very well. they saw the return of deals in there that were advantageous. peter navarro, so maybe there's some other iteration, but it takes a long time.

you can't do something like that within two years. we'll buy more oil, by more than us, buy more of that coming again it can outlast president trump. maybe it will be able to outlast president trump. we don't know. it's not going to be able to outlast the sentiment in the u.s. business community in the global business community that enough is enough. whatever admin is ration comes in is the second term for president trump. it's going to be the same time with china. connell: everybody seems to be on board with that. one thinks of europeans and canadians. down for the 36 now. we were talking about earlier. >> this is a community that the president really attuned to. thank you is always for coming in. one of the things getting hit hard in this market is facebook. crisis mode it seems like barefaced the. all the stories being written about problems within facebook,

with the stock down more than $7 will talk about those problems when we come back. this is loma linda, a place with one of the highest life expectancies in the country. you see so many people walking around here in their hundreds. so how do you stay financially well for all those extra years? well, you have to start planning as early as possible. we all need to plan, for 18 years or more, of retirement. i don't have a whole lot saved up, but i'm working on it now. i will do whatever i need to do. plan your financial life with prudential. bring your challenges.

connell: we have the latest on the damage control of "the wall street journal" with a report that mark zuckerberg is now on the offensive, becoming more aggressive as a manager in that apparently is causing morale issues within facebook according to the reporting and the rest possibly between zuckerberg and the chief operating officer sheryl sandberg. matter how you look him in the stock continues to fall. art hawkins joins us with a little more about that. facebook at 13188. another new low down another

$7.63. 5.5%. what do you make of all of this internal stuff that we keep reading an article after article the big "new york times" these followed by the journal over the weekend basically saying there's an issues between even zuckerberg and samberg. >> yeah, i think what we're dealing with is beyond even just face the. we are facing the evolution of social media to point out. in the beginning of a hat of the social media marching orders for a decade as work to grow the user base and praise the interaction models are that's all they were really focused on doing and it wasn't so much control in the content and they made it very clear they viewed themselves as a platform and they had no responsibility for what was being put on the platform. that has been called into question and rightfully so. but where do you draw that line

between having responsibility for what's on your platform and censorship. right now facebook is getting slammed and that's when you'll start being responsible. >> line might be drawn for you and that's where were headed now. the line drying might have been which is the last and business wants to say is it's going to come down to what type of regulation is put in place. >> on the one hand everyone really loves the free market. i'm not excited to see the government coming to make decisions. on the other hand from a liability standpoint it's a lot better for attack is some external group says here is the line as long as that is what should follow. you know the rules. exactly. we take the same issue with google. the amount of information google has on all of us is thoroughly terrifying. where is the line. what responsibility do they have for how this is going to be

viewed. connell: you're right. you're absolutely right because you know the rules of the game. everybody's playing by them. you can line yourself up and plan for the future. in terms of facebook and how it being managed, and there's some interesting stuff in all these articles are to the journal piece they even have one thing or mark zuckerberg would have a goal for a new year which is i'm going to read 25 new books and learn mandarin. now he says i'm going to fix facebook. okay, now were making a just dense. it does bring up a larger point that it seems like a guy like him and say your ceo or company. you have to run this company day-to-day and maybe that got away from them a little bit. i think so too. probably became a bit of a victim of the roads has been zuckerberg is willing on and this is basically the only job he's ever had. we need more board interaction. you need more of the season members on the board who are going to be able to see these problems coming.

connell: to slip avril and i don't know if he'll ever get up. it's a lot of power. this has been -- what you make of it down almost 2% on the dow. trades a big issue. not only facebook, but apple and supply chain. what you make of the market? >> the market really got ahead of itself. expectations kept going up and up and we really thought we would see some pain in the third and fourth quarters because you're not going to get another tax cut. that is not going to boost things that. we've had to trade issues. there's a lot of geopolitical uncertainty out there and now with the next in d.c. with republicans and democrats, so much power the house will be even harder to resolve any of these issues. a lot of uncertainty in the market was expecting we would continue to have this incredibly accelerating growth which is impossible when you've got a labor market that's incredibly

tight. profit margins already superhigh. how much more room do you have. >> at the low part of peak earnings, p. s., pete rose. wonder how they look at all this because i could be the one thing that brings us back you would think is the fed slows down its rate of increases next year. at the last question do you think happens? >> i don't think so. the fed is going to stay on track because what they're more concerned about his not having enough arizona have the downturn. racers will really low by historic norms. connell: always good to see you. thanks for coming on. laura hawkins. other things seeming to be hitting us today as housing. speaking of interest rate, and that seemed to be a lot of one homebuilder confidence that it lowest level in more than two years. demand stolley now as interest rates are going. we will talk about that with the dow down 470.

we will be right back.

connell: albright will stay on top of this market decline. we took a commercial break and things calmed down a little bit. a rough day for stocks, whether it's apple, trade, lot of issues on the table that will get back to in just a moment. another big story today, for anyone following business news in the auto industry in particular over the years, nissan ousting the chairman carlos ghosn after misconduct was uncovered. john bizzell is with us in the studio today. good to see you. you deal with global automakers with foreign companies that deal the united states and i assume you sign over the years that what you make of this news? >> first of all i know nissan well. we are still catching up to it. i'm chasing the story along with everyone else. the company seems to have taken

fairly quick and decisive action to get to the bottom of it. trembling under reported a salary by $47 million. wherever we are, it's a significant person in the auto industry. a big name that's been there for many, many years. made a lot of changes and a big impact. >> i would agree with that. as a transformational ceo. been around a long time and really showed you can build a global company through alliances. very successful career at this point. connell: a loss they would be a significant one. we'll see how nissan would respond to that and rebound from that. carlos ghosn ousted and arrested. we always talk to every time you're on about trade. i know you testified last week at the hearing about the quote, unquote new nafta, the u.s. mca. big picture people are looking at this. people want to know what's the effect on them and this is simply people are paid more because of everything be negotiated or has been negotiated for their cars going

up here on out. >> there's no question about it. we should look at the cumulative effect of all of this. steel and aluminum terrace already in place. by the way, still in place with mexico and canada even though we've completed negotiations and that's already increasing the cost of production of cars and united dates. some people estimate the number to be $400 a vehicle. sure you do on all vehicles are just the foreign owned companies that operate here you deal with? >> this is a great question. on every vehicle. in other words, the u.s. companies have protection in the form of these terrorists and so they're raising prices. this is effect in everybody and frankly whether your gm or ford or toyota gear using primarily u.s. steel for u.s. production. connell: i know they can maybe make some changes and concessions he had a lot to still needs to be done with

regard to china and some extent with europe. what's your strategy. you're usually in washington trying to convince people to act in the interest of their clients. say we need policy that will put us in a better position to do business plain and simple. what's the argument now? >> the argument is we need more trade and more trade talks, not barriers to trade. our future in the u.s. auto industry is in exports. we are at 17 million units of annual sales. that's probably a peek. we don't know what the other side of the people looks like and the opportunity is exporting more vehicles. >> you say made by americans or that this necessarily mean ford and gm. >> yeah, that's right. at the cars built in this country are built by companies like toyota and honda and the rest. connell: sounds like you're losing the argument to be frank.

to get out of washington are the administration is now there's more of this. they been treating us unfairly for years. is there any truth to that by the way that something needed to be changed? >> certainly with regard to china i would agree with that. there are real questions in the relationship that need to be resolved whether its intellectual property. with regard to the u.s. and europe, it's been a pretty level playing field. the fact of the matter is we have terrace coming from europe in may of terrace and vehicles going there. >> some of the get lost in the translation. terrorists are much lower theirs or higher. the difference between cars and trucks. what's the difference? >> is a great point. everything we send over their cars and trucks. we were 2.5% tariff on passenger cars but on pickup trucks with 25%. that's why you don't see foreign pickup trucks in this market. as the result of a trade dispute

in the 1960s. when you save yourself we can put these tariffs on but they'll come off easily, that is been around since the 1960s as a result of the trade dispute. connell: that's why we love the ford f. 150s. nothing against it. that's why you don't see as many toyota pickup trucks. >> the toyota toyota tundra is made here come the nissan is made here. connell: that does plan to the president's argument that he wants to see those cars and trucks made here. maybe that make some sense. >> sure, but remember all of these companies have global supply chains and so we want to make sure we have access to parts all around the world because they go into us-made vehicles. the most american vehicle by government statistics about part components come apart percentages for honda odyssey made in alabama with 25%. so that's what the industry looks like. connell: i don't think a lot of people know that but i guess they do now.

good to see you. we'll stay on top of these issues. shifting gears completely will shift and talk about the market decline. reports about the cia coming to a conclusion that the saudi crown prince, mohammed salman was behind the killing of jamal khashoggi. what does the white house do about that if anything? what type of action do we see going forward? will get into that after a break. a september to remember, starts with a december to remember at the lexus december to remember sales event.

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connell: oil prices for a moment. but ever rebound today at 56.92, 46 cents as president trump seeks to preserve an alliance with saudi arabia. now oil although it is still 25% off the highs and something to watch the last few weeks. market watcher allen nachman joins us now. it was interesting to watch president trump come allen, with the video he did with chris wallace and recent comments about the saudi's. i don't know what your senses, but some people think he wants the issue to go away and whether or not he'll deal to do that is

an open question. how does the ballplayer in the market? >> there's a lot of differing interests are involved. we can look at mr. trump. he wants lower oil prices but at the same time that could slow u.s. economic growth. i don't understand his motivation necessarily bear. the kind of trip to 30 arabia a bit at the iran sanctions that would take oil off the market but he gives them an exemption but it really hasn't. battling forces as well as russia that doesn't want any production cuts. all these factors have to balance out in the price comes straight down from october 1st more than $20. we have held the lows for the last 52 weeks so far. connell: if you're saudi arabia look at all of this in the impetus there is to cut production of oil and the president says don't cut production of oil, would you do? at the same time, you know that all the reports whether it is cia report say we are on to you

that it was mohammed in common the crown prince behind the killing of the writer jamal khashoggi. if you defy to the order searches you are from a trade from the american president up into a tough spot. i wonder how they'll risk on. >> saudi arabia has a certain amount of independence regardless of who the president is. no mystery for the past month and a half as who was responsible. the markets know that and have digested that. it becomes a change in psychological sentiment because it was only six weeks ago they were four years high in oil. the global growth story may be helpful to little bit. at the china situation can be solved, that will get us back on track once again for the global growth. the dollar last week coming new year highs and more following through on the selloff. that can be very helpful. gold is the $25.15 last week.

that could put in for crude as well. connell: good point here will talk more about dogs as well as the doubt. thank you for coming on. always good to see you. the dow was down 429 now. zero and continues to be one of the big drive if you look at apple today, that is a $17 drop for well under $320 a share. put it together with the likes of caterpillar and 3m. tough day for goldman sachs and the sale starts. we'll be back to talk about all of the what the dow down 439 points. back in just a moment.

connell: ugly day for stocks as the selloff continues. trade worries, some apple supply chain concerns and we have from the independent womens forum [ inaudible ] and ashley webster in place at the new york stock exchange, where we are down 439. this will be an interesting afternoon. wonder if we have a ways to go here or will stabilize for the next couple hours. ashley: you never know what will happen. to your point, it just feels very defensive and bearish right

now. we have been talking about the demise of the tech sector. look at these stocks. boeing, you can say is a trade concern stock, down 5% but check out apple. again, bad reports about softening demand for the iphone. that's down nearly 4%. visa, too, down nearly 4%. but getting to the big tech, this has been the leader of the bull market, that sector, for so long, it's getting smashed. what you have is big institutional investors now cashing in, taking their cash and going defensive into utilities. procter & ganl belmble, coca-co. bond prices are going up, the yield's coming down and it just has that feel about it right now, the sector that led for so long is kind of deflating a little and bringing the market down with it. of course, we have the china trade worries. no particular progress there that we can latch on to and because of that, we definitely have a defensive market right now. connell: if anything, a lack of progress which doesn't

necessarily rule out some sort of tweet this afternoon or statement that leads you to believe maybe there will be progress to be made. you always have to be cognizant of that. but to ashley's point, especially on a monday, holiday week, maybe you would expect a little more from this market and the fact we aren't getting it, people, lot of negative people out there. i don't know what to make of it. what do you make of it? >> i think ashley's right to highlight so many of the different factors contributing to today's selloff. it's not just concerns about trade. however, the vice president's remarks about china over the weekend certainly indicate as you said, a lack of progress. we do know president trump is scheduled to meet with the president of china at the g20 summit this month. that meeting becomes all the more important now as we know january is coming, when americans start thinking about thanksgiving and christmas, we start to think about the new year. in january, about $200 billion of chinese goods are facing a 10% tariff rate from the united states now would face a 25% tariff rate as the rates would increase in january. we are in a standoff with china

right now and i know many american consumers and workers hope ultimately we will come to a better deal. connell: do you get the sense the president is about to double or triple down on the china front, whereas last week we had a number of guests coming on saying you know what, maybe he's open to cutting some sort of deal because it will help markets. that's not the kind of thing we have heard over the weekend. this goes back and forth. that's why i say always be open to some kind of tweet that says you guys are getting it wrong, i'm not missing the boat on this, i know what's going on. what direction do you think the president is going? >> well, i think it would be wrong to underestimate president trump when it comes to trade deals. this has been a top priority of his since he's come into office and he's done well with the usmca, the new trade deal in north america. when it comes to china, it's a complex relationship we have with china. we want to continue to have a good economic relationship and continue to trade with them with minimal barriers. we do understand sometimes china is a bad actor and don't play by

the rules, they don't respect protections for american intellectual property, and those are things we need -- places we need to apply pressure and be on our economic relationship. we know china simply has a complex political relationship with the united states, so there are head winds the president and others have to navigate coming to this deal but it's not out of the picture. certainly we can have economic relations and continue to work through other aspects of our relationship. connell: it all depends how the federal reserve reacts to all that. i would be remiss, i always have to ask you a quick question about the homeland. any closer to this no confidence vote on theresa may? ashley: it feels to me whoever would be behind that confidence vote is holding their powder. she's going to go to the eu, to brussels this weekend, seal up the deal, then goes back to parliament to try and sell it. if it gets voted down in parliament, i think leadership challenge will be launched at that point. connell: ashley, see you all afternoon from the new york stock exchange. hadley, always good to see you.

appreciate you coming on. ashley webster wrapping it up. don't miss this market close because it's anybody's guess how it's going into the close. i will be on "after the bell" with melissa at 4:00 p.m. eastern time this afternoon. we are down 465. 1.8% of the dow jones industrial average. charles payne, giving you a tough hand going into the 2:00 hour. charles: you certainly are. the pressure has been mounting all day. thank you very much. good afternoon, everyone. i'm charles payne. this is "making money." we have a market that's off now, you can see the dow at 466 points. a combination of things, tech stocks primarily taking a toll on this market. this as vice president pence taking a very strong stand against china, particularly its predatory international lending. we will break down what that means for trade talks as we head into the g20 meeting next week. again, big tech in trouble. more than just the day's selloff. one ceo says regulations are inevitable and get this, because the free market is